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380 A meeting of the Federal Reserve Board was held. in the office of the Federal Reserve Board on Tuesday, Novether 30, 19 26 at 11:10 a.m. P3ESENT: Vice Governor Platt Mr. Hamlin Mr. Miller Mr. James Mr. Cunningham Mr. Eddy, Secretary McClelland, Asst. Secretary The minutes of the meeting of the Federal Reserve Board held. on november 24th were read and approved. The minutes of the meeting of the Federal Reserve Board. held. on november 26th were read. and approved as amended. The secretary stated that the Governor before leaving town had. requested. him to advise the Board that in accordance with the action taken at the meeting on November 22nd reconsideration of the Board's ruling of SePtember 23rd, with reference to the handling by Federal Reserve Banks of 11°11-eash. collection items livable at street addresses, would be special e rcier Of business for a meeting to be held. on Tuesday, December 7th. ' Report of Law Committee on application of The First National Bank °I* Stanton, Iowa, for permission to act as guardian of estates, assignee, receiver and. committee of estates of lunatics; the bank previously having beell granted. authority to act as trustee, executor, administrator and registrar Of stocks and bonds. Mr. Hamlin concurred in the recommendation of the 811b-Cormaittee that the application be approved., but Mr. Platt reported e4Irersely on account of the small capital of the bank, same being only Mr. Hamlin moved aoproval of the application. 381 11/30/26 -2- Carried, :Ir. Platt voting "no". Letter dated November 24th from the Secretary of the Federal Reserve Bank of New York, advising that the board of directors on that day made no Change in the bank's existing schedule of rates of discount and purchase. ITo ted. Matter approved, on initials on November 27th, namely, telegram dated. november 26th from the Federal Reserve Agent at Kansas City, requesting the ciesignation as special examiner of Mr. S. A. Wardell, auditor of the bark. Formally approved. Matter approved on -initials on November 29th, namely, reply to telegram aated November 29th from the Federal Reserve Agent at New York, inqu.iring Whether the Board's recent approval of the merger of the First Bank of *Albany atui the Albany Trust Company includes the taking over of two branches of the AlhanY Trust Company, one already in operation and. the other about to be °Pened; the reply advising that the Board's approval of the merger may be cl)netrued to cover both the established. branch of the Albany Trust Company 411(1 the branch about to be opened. Upon motion, the above reply was formally approved. Telegram dated November 24th from the Governor of the Federal Reserve 13aalk Of Dallas, requesting approval of a contribution of „,.2,000 by that bank toward the expense of the distribution of a farm chart by the Texas Safe Farm- 41 I/1R Association; together with reply made on November 29th, on the initials of 4'llabers ' of the Board, stating that the Board will not object to the con.tribu- Upon motion, the proposed. reply was formally approved.. kl! 382 -3_ 11/30/26 Letter dated November 27th from the Federal Reserve Agent at Kansas 01t7, transmitting resignation of Mr. VI. S. Bulkley, Class “C" director of that bank and stating he believes it is intended to be immediately effective. Upon motion, :,:r. Bulkley's resignation was accepted, effective immediately. Letter dated. November 25th from the Assistant Federal Reserve Agent at Cleveland, advising that the Western Bank and. Trust Company of Cincinnati, °Ilio• has decided not to establish the branch at 1530 Harrison Avenue, Cincinnati, aPProved by the Board on November 20, 1925. Not ed. Report of Committee on Examinations on letter dated. November 22nd trora the Federal Reserve Agent at Cleveland, transmitting and. recommending apPlIeval of, an application of The Citizens Trust and Savings Balk, Columbus, Ohio, f " Pezmission to establish a branch on Grandview Avenue near 'lest 1st Street, arandview Heights; Mr. Platt recommending approval and Mr. Cuxtningham submitt ---"T6 no recommendation. hr. CunninF,iiam stated that he did not join in 1:r. ?latt's recommendation for the reason that he vies not sure that the location °f the proposed branch was within the city limits of Columbus. After discussion, Mr. Hamlin moved approval of the application on condition that the proposed location of the branch is within the city limits of Columbus or contiguous thereto Mr. Hamlin's motion being pit by the Chair was carried, Mr. Cunningham voting ,no". ' Memorandum dated November 26th from the Chief of the Division of Bank I4eration3, transnitting staterants of expenditures of the Federal Reserve balzcs for educational and welfare work, etc. during the month of October and t°r the ten month p3riod. ending October 31st. 383 -4- 11/30/26 Ordered. circulated. liemora;adum from the Comptroller of the Currency, dated November 27th, recommending approval of an application of the .tock Growers National 3ank Of Cheyenne, Wyoming, for permission to rectace its Capital from ;,;400,000 to 'i;300,000, providing that .;100,000 of its undivided profits are transferred to the surplus account. 21e Secretary called attention to the fact that this recornmandation is in accordance with the suggustion made by the .7,oard's Committee onxraminations in a report submitted. at the meeting on rovember 24t1-1 9 relative to a previous memorandum addressed to the Board by the Comptroller re garding the same reduction. Upon motion, it was voted to aTrove the aoove application subject to the condition recommended by the COLIT)t 1'0 lie r. Letter dated November 24th from the Federal 2eserve .1.-7;ent at Chicago, afiv1sin7; that the Detroit Clearing House Ilssociation has adopted a resolution l'r°1iclin --7 that no member of that .:.ssociation or bank clearin7 throurh a member shall cash or acce-ot for de-posit checks on banks in ::ichir:an which are 11°t collectible at Dar through the Federal .:eserve bank,and no member or bank el-rearing throui a member bank shall nay exchange on checks on banks located in ::ichigan which are collectible through the Federal :ieserve bank. -Noted. Aeport of Conimittee on Salaries and. -.]x-)cnditures on letter dated 11.011 er:11)er 99th from the Chairman of the Federal Reserve 7ank of New York, l'equesting aroval of an amaLrfient to Section 5 of :,.rticlo II of the 3y-laws °I' the Buffalo Branch, effective January 1, 1927, so as to nrovide that dirc.,ctors 384 100/264 other than salaried officers, when present at meetings of the Board and subcommittees constituted by the Board, shall receive a compensation of .,;;20, illsteacl of :;10, for each meeting attended and an allowance to cover actual necessary traveling expenses incident to attendance at regular and special of the Board. or of the sub-committees; the Committee recommending approval. Approved. The Vice Governor then presented the recommenclat ionsmade to the Board by the Federal Advisory Council at its meeting on November 19th and called attention to the statement contained therein that the Council in general does not approve of reducing the reserve requiremen.t of outlying banks in central reserve and reserve cities, that it realizes that exceptions 118.70 been made and before reaching any final decision in the matter requests the Board to furnish it with such data and recommendations as may have been Illacle as the result of a careful investigation of this question. Upon motion, the Secretary was directed to furnish the Council with all pertinent data in the Board's possession. Memorandum from the Secretary dated November 27th, with reference to the matter referred to the recent meeting of the Federal Advisory Council 4ncl the recent Conference of Federal Reserve Agents, namely, the question of the effect, if any, on the value of the Board's weekly consolidated statement the condition of member banks if the Board. were to release separately the gures for New York an& Chicago member banks in advance of the consolidated atatement; the Secretary advising of a resolution passed by the Federal Reserve 41 , /8e-,. _6_ 11/30/26 nts' Conference to the effect that it would interpose no objection to this Procedure and calling attention to the report of the Federal Advisory Coun.:-A.1 that it believes it is inadvisable to publish only a part of the statement of (2iliclition of reporting member banks as this may, at times, lead to false imPressions as to economic and financial conditions of the country. Thereupon ensued a review of the Board's previous cons ide rat ion of the suggest ion that figures of the condition of reporting member banks in New York and Chicago be issued each week on Friday in advance of the consolidated statement for all districts which would continue to be released the following Tuesday. Following a discussion, Lir. Miller moved that the report of the Federal Advisory Council having been received, the Board disapprove the suggestion for the release of New York and Chico.p,o member bank figures in advance of the regular weekly consolidated statement. Mr. Miller's motion being put by the Chair was carried, Mr. Platt voting "no"• lie-norandum from Counsel dated 'November 27th, with reference to Clayton 4ct applications of 'Messrs. C. .. Lotto, .Ti.lmer A. Cadmus, George .1. ienkel 841(1- Albert H. 3later for permission to serve at the same time as directors °I the Broadway National Bank and. The National Bank of America, both of ?at e S , . J., which were temporarily refused by the Board on August 4th 441 the usual opportunity given the applicants to present additional evidence; e°1111se1 stating that in accordance with this action a Conference was held With a representative of the applicants on October 7th and that while the ql1oF.3tion of substantial competition between the banks involved is a very 108 e one, especially in view of the difference in size of the banks and the 386 11/30/26 -7- extent to which their stock is owned. by the same parties, he is of the opinion ,that they are in substantial competition and therefore recommends that the applications be refused, effective Janus. 4,r 1, 1927. Mr. Hamlin and. Mr. Platt, nlembers of the Law Committee, submitted separate memoranda; 1,:r. Hamlin stating he is inclined to the view that the banks are not in substantial competititon but that because of the closeness of the case it should be considered by the rual Board, and Lir. Platt stating that he believes the applications involved. allolzid be granted. After discussion, Lir. Hamlin moved. approval of the Clayton Act applications of Messrs. Lotte, Cadmus, Renkel and Slater. Mr. Hamlin's motion being it by the Chair was lost, the members voting as follows: Mr. Platt, "aye" Mr. Hamlin, "aye" Mr. Miller, "no" Mr. Janes, "no" Mr. Curmingham, "no" Mr. Platt then stated that in view of this action, the applications stood finally refused, the applicants, however, not to be affected until the first of the year which is in accordance with the understanding at the time of the Board's preliminary refusal of their applications. Memorandum from Counsel dated November 22nd, submitting draft of a letter to 4.1, Secretary of the Treasury, advising that the Board understands that his elaairtment, at the request of the Federal Farm Loan Board, is to submit to the 4Ittcirrtey General for an opinion the question whether Joint Stock Land banks are --vs" within the meaning of the Clayton Act, and requesting that in submit"ale this matter to the Attorney General he transmit copy of an opinion render°(1 by the Board's Counsel and adopted by the Board to the effect that Joint 387 11/30/26 -a- Stock Land banks should be so considered. Upon motion, the proposed letter was approved. Memorandum from the Secretary dated November 27th, with reference to discuss ion at the recent Conference of Federal Reserve Agents as to the Procedure in reference to the gianting of national bank charters, during which it was thought desirable to consider thether the Federal Reserve Board should tot be given authority, if it is not already given it, to deny applications Of newly organized national banks for stock in Federal Reserve banks; the Illemorandum setting forth that in order to give careful study to this question 4 Committee was appointed to report at the next meting of the Conference. Not ed. Memorandum from the Secretary dated November 27th, submitting report ' ct the Federal Reserve Agents' Committee on National Summary of Business Conwhich was adopted at the recent Conference of Federal Reserve Agents. Noted. Memorandum from the Secretary dated November 27th, submitting a report aiscussion and recommendations made at the recent Conference of Federal aeaerre Agents on the subject of the examination function at the Federal Reserve bazoca Referred to the Corrmittee on Examinations. Memorandum from the Secretary dated November 27th, reporting that it 17Ets brought to the attention of the recent Conference of Federal Reserve Agents that Federal Reserve banks have freciuently been compelled to pay dividends on ?ecle xttl Reserve bank stock held by national banks which have ceased to do business 388 11/30/26 -9- 40141 which were carrying no balances with the Federal Reserve banks; the rnemorandum stating that a committee of the Conference conferred with hr. Stearns, Deputy Comptroller of the Currency, who indicated a willingness to do all that is possible in the Comptroller's office to remedy this situation and that the Conference adopted a report of the Committee recomInending (1) That the Board request the Comptroller of the Currency whenever Possible under the law to notify a national bank which has ceased to do bu.silless but which has not gone into liquidation that it must go into liquidation .accordance with law or else a receiver will be appointed; (2) That the Board recommend to Congress the passage of an appropriate amendment to the 147 Which wculd give the Comptroller of the Currency authority to appoint a receiver for a national bank which has discontinued, its banking operations a period of sixty days, but which has not gone into liquidation, as pro7icled by law, and which would also authorize the cancellation of Federal Ilsserve bank stock held by such a national bank when a receiver has thus been aDpointed. Upon motion, the above memorandum was referred to the Law Committee. ::emorandum from the Secretary dated November 27th, with reference to "Ilsideration at the recent Conference of Federal Reserve Agents of the cillestion of the necessity for Assistant Federal Reserve Agents at branches ths practicability and the desirability of establishing some uniform 1/rocedure for handling the note functions of the Federal Reserve Agents at those branches of Reserve banks where the full time services of an Assistant 4cleral Reserve Agent do not appear to be required; the Secretary reporting 389 11/30/26 -10- the adoption by the Conference of the following Committee report: "There are 23 branches of Federal ileserve Banks. At only eight of those are unissued. Federal deserve notes kept on hLnd, namely: Cincinnati, Pittsburgh, Jacksonville, ITew Orleans, Detroit, Denver, Omaha and Oklahoma 2-‘-t the first five nEntioned branches there are _Assistant Federal -,leserve Agents. The Committee assumes that there is some special reason at the branches above mentioned for keeping on hand a supply of unissued. n°tes and in the case of five of the branches for maintaining _Assistant Ped.eral 2,eserve Agents. The Committee believes that nothing should be done to reduce the Protect ion which the se branch territories now derive from having a supply (3 4.! ? unissued. Federal _;eserve notes maintained at the branches named.. On aldris other hand, the Committee feels that as other branches, some of which fre as large as these ei,Yht branches, now conduct their business satisortorlly without maintaining a supply of unissued notes, some if not all those eight branches should now give consideration to evolving some " 1bethod whereby the present protection can be maintained for their member allks without keeping a surply of unissued notes on hand. It is impossible for the cormittee, as a Committee, to 10:10177 the o ,44.4ions in each of these branches and wl-Dther it would be possible for 4 cirr or all of them to carry their reserve supply of notes in the banking :-7'artment instead of in the Agent's department. A shortage of collateral (:); Certain seasons of the year, or other reasons of an emergency nature Ilia in the nature of a gradual change in conditions over a longer period, this impracticable. The Committee can only suggest that without Oh the present form of organization, each of these branches should, t.1,1` 1‘ing the next six months, experiment with the possibility of carrying e reserve sunply in the banking department instead of in the Agent's 17 ) artment. At the end. of this period each of these bramhes would be a position to know the extent to which this would, be practicable, alit might be necessary in some of them to carry on the experiment .ger in order to be able to observe all of the conditions which might ax,11 lSO at such branches during the full course of a year." After discussion, it was unanimously voted to approve the recommendations contained in the above report. :Ianorandum from the Secretary dated iTovanber 27th, with reference to c)/181derat ion at the recent Conference of -Federal 2,eserve Agents of the 1.011 Of procedure in elections of Class A and 3 Directors of Federal -4. v.0 banks; the 3ecretary reportim: that a Committee was appointed by t'ae Lionfemnce and requested. before the 1927 elections to work out details 1 390 11/30/26. -11- and submit ferns in accordance with the recommendations contained in the follo.vring report, which was adopted by the Conference; ' ,The Committee believes that it would be highly desirable if the Chairman of the Beard in sending out the list of nominees could omit the name of the bank making the nomination. This, however, is not permissible under the Federal aeserve Act as it now stands, and we recommend that the Act be amended. 7atil respect to the voting, we believe that the ballot should be a secret ballot. To that end, we recommend that all ballots reach the Chairmen of the Federal Reserve Banks in special envelopes sealed, and that these envelopes be opened and the ballots counted at a speciried time and place. We also recommend that due notice be given to all nominees to the effect that the opening of the envelopes and the counting of the ballots will be conducted in the presence of the nominees or their representatives, if such nominees wish to be present either in Person or by representatives. It is suggested that the envelopes be °Pened and the ballots counted by at least tm persons appointed by the Chairman. If it meets the ap-3rovea of the Conference, this Committee will be glad to work out details and submit forms to the Chairmen of the 130ards of the Federal Reserve Banks." After discussion, it was unanimously voted tentatively approve the recomirendations conto the above report pending receipt of the tained in supplemental report of the Committee. Llemorandum from the Secretary dated rovember 27th, with reference to the consideration at the recent Federal aeserve Agents' Conference of the clizestion of the practicability of reviewing at least once each year the altilation with respect to member banks located in outlying sections of reserve and central reserve cities which have been granted permission to -LY reduced reserves; the memorandum advisinr: of the action of the Con1°1'ence In arproving a Committee report recomrnding that the Board require 84ch a review to be made and a report and reconuendation thereon to be sublelittea on jecember jlst of each year by each l'ederal Reserve Agent. 11/30/26 -12- 391 After dismission, it was voted to approve the above recommendation and to request from each Federal Reserve Agent an annual review, as suggested, the first thereof to be submitted as of December 31, 1926. Letter dated November 23rd from the Federal Reserve Agent at Kansas City, advising that following the recommandation made at the recent Federal Reserve Agents' Conference he has arranged to discontinue the carrying of a SIAPply of unissued Federal. Reserve notes at the Oklahoma City and Omaha 81"arthes of that bank, and that effective November 26th the necessary currency at the branches will be carried as bank cash instead of unissued Federal Reserve notes in charge of an Assistant Federal Reserve Agent; the Agent also Sviaing that he has under considoration adoption of the same method at the ellver Branch and that after an analysis of the situation has been made he Will advise the Board of whatever change, in his opinion, is desirable at that . Brauch Noted, with approval. Letter dated November 24th from the Federal Reserve Agent at Chicago, 84vising that a new state bank is being organized at Viheaton, Ills, which elcAects to open for business about February 1st and is desirous of becoming a illember of the Federal Reserve System concurrently with its opening; the Agelit inquiring if the Board wculd be inclined to favor such membership, 1)r°vided that prior to the opening of the institution they satisfy themselves that the directors are capable men vho will give proper attention to their clilties and that the managerent will be of high class. After discussion, the Secretary was directed to advise the Federal Reserve Agent 392 -13- 11/30/26 that the Board. \mad be disposed. to view favorably an application for membership from the bank in question, provided the Federal Reserve bank is satisfied as to the character of its management. Memorandum dated November 24th from Mr. Platt, with reference to a visit which he made on November 18th to the Brareh Federal Reserve Bank at Buffalo; the memorandum referring particularly to working conditions in the present blzilding of the Branch which will have to be occupied until the building l'eoently acquired is turned over some time during the year 1928. Not ed. Telegram dated November 30th from the Chairman of the Federal Reserve 13413Ic of Dallas, advising of the re-election of Mr. Howell E. Smith as Class Director of the bank, and Mr. J. J. Culbertson as Class B Director, both ,for terms of three years, beginning January 1, 1927. Not ed. Matter ordered circulated on November 24th, namely, memorandum from C°1111sel dated. November 17th submitting, in accordance with the action taken the Board at the meeting on November 9th, a formal ruling authorizing liat ional batiks to accept drafts drawn upon them by other banks against the se°Urity of import and. export bills of exchange previously discounted. by 8740. other banks where the underlying import and export transactions have hot been completed at the time such bills are drawn. After discussion, Mr. Hanlin moved adoption of the Ailing as submitted. by Counsel and of Counsel's recommendation that sane be mimeographed and transmitted to all Federal Reserve banks. Carried., Mr. Miller voting "non. 393 a, 11/30/26 -14- Memorandum from Counsel dated November 23rd, submitting material for Publication in the December issue of the Federal Reserve Bulletin. Approved. Matter ordered circulated, at the meeting on November 19th, namely, raftoran.dum frau the Secretary dated November 12th, with reference to an irlquiry made by the Governor of the Federal Reserve Bank of Minneapolis as to Whether the Board would object to their mstking a charge in connection with their safekeeping f-uxet ion. After discussion, the above matter was referred to the Committee on District #9 for recommendation. Letter dated November 23rd fran the Federal Reserve Agent at Minneapolis, tri teillYing to the Board's letter of October 12th, with reference to the action of the liellette County State Bank, Mite River, S. D. in reducing its capital to which is less than that required for the organization of a national bailk ta a place the size of White River, and the desire of the bank to termite its mambership in the Federal Reserve System at the earliest possible 111°nIe12t. Referred to the Committee on District 49. Memorandum from the Secretary dated November 30th, advising that the 8°41 ' 1* Of Directors of the Federal Reserve Bank of New York has voted to reappoint liarry T. Ramsdell as a director of the Buffalo Branch for a term of three Ireettst beginning January 1, 1927. Not ed. Letter dated. November 23rd from the Federal Reserve Agent at Kansas eitY, referring to his letter of September 27th which at the meeting on September 394 11 11/30/26 -15- 30th was referred to a special committee for recommendation as to the examination policy to be pursued by the Federal Reserve Banks of St. Louis and Ransas City in view of the most recent opinion of the Attorney General of the State of Missouri that the Commissioner of Finance of the State has the right to furnish to the Federal :deserve bank information regarding the condition of a state bank that is a member of the Federal Reserve System, but 11°t information regarding a bank which is not a member of the System; the Peaeral Reserve Agent stating that both he and the Federal _Reserve Agent at St, Louis feel that they have heretofore had material assistance from the State authorities of Missouri, and as that state is willing they would like to again resume the same relations with the state authorities as were in effect prior to the Board's action of August 3rd in voting to instruct them to make examinations in its name at least once a year of state banks located Inssouri which are stockholders of the Federal Reserve banks, the expenses Of maQh examinations to be borne by the banks examined. Mr. James referred to the fact that this action was taken by the Board because of an earlier °Pinion of the Attorney General of the State of Missouri that the Commissioner Of Pinance of that State could not, as he had theretofore, furnish the Federal seerve banks with copies of reports of examination of member banks and trust cftpanies made by State examiners. In view of the more recent opinion of the Attorney General of the State, Mr. James moved that the Board. rescind its order of August 3rd, above referred to, and permit the Federal Reserve Agents at St. Louis and Kansas City to resume with the State Banking Delartnent of Missouri the relations which existed prior to that action. Mr. James' motion being put by the 395 11/30/26 -16- Chair was carried.. The Secretary then presented Stenographic 'Report of the hearing on the Subject of the Cuban Agencies held by the Board. on November 11, 1926. Upon motion by Mr. James, the report was ordered circulat ed. Mr. James, Chairman of the Committee on District #8, then referred to the vacancy in the Boa rd. of Di mot ors of the Federal Reserve Bank of St. Louis, caused by the recent death of Mr. C. P. J. Mooney, Class C Director, and. he recommended that Mr. Paul Dillard, a cotton planter and Member of Dillard. and Coffin Company, Memphis, Tennessee, be appointed to fill the vacancy. He stated that he had. taken this matter up with Mr. Dillard during a recent visit to Memphis and that the appointment would be aoceptable. Upon motion by Mr. James, Mr. Dillard. was appointed a Class C Director of the Federal Reserve Bank of St. Louis for the unexpired term ending December 31, 1928. Mr. Miller then referred to the action of the Board at the meeting °11 November 26th in deferring consideration of the action of the recent er°vornors' Conference in voting to approve a report submitted by its Pension C°Intlittee under date of October 27, 1926, with the understanding that the a4tion recommended therein should be taken insofar as it is practicable. He moved. that the Federal Reserve Board. does not concur in the recommendation of the Pension Committee or the action of the Governors' Conference in approving same, and that the Secretary prepare for submission to the Board a letter to all Governors advising accordingly. Mr. Miller's motion being put by the Chair vas unanimously carried.. 396 -17- 11/30/26 • RE1301-TANDING COMIITTYES: Recommending changes in stock at Federal Reserve banks, as set forth in the Auxiliary Minute Book of this date. Approved. Dated, November 26th, Recommending action on applications for fiduciary powers as set forth in the Auxiliary Minute Book of this date. Approved. De'ted, November 24th, Recommending approval of the application of Mr. Franklin D'Olier for pe /mission to serve at the same time as director of the Seaboard National Bank, New York, N. Y. and as director of the First National Bank, Philadelphia, Pa. Approved. Dated, November 26th, 29th, The meeting adjourned at 1:15 p.m. APProved: Vice-Governo r.
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