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At a meeting of the Federal Reserve Board held in the office of the Board on Tuesday, October 12, 1920, at 11 A.M., PRESENT: The Mr. Mr. Mr. Mr. Mr. Mr. Governor Platt Miller Hamlin Wills Williams Emerson, Assistant Secretary. Minutes of meetingsof the Board held October 6th and 11th were read, and on motion approved. (At this point the Board went into executive session, to consider the suggested amendments to the By-Laws of the Board and changes in its organization chart). On motion duly seconded, it was voted to apprdve the new form of organization chart of the Board (as per auxiliary minute book as of this date), and the amendment of the By-laws of the Board as submitted by the Executive Committee to read as follows: BY-LAWS OF THF FEDFI/AL RPSERVE BOARD Article I The Chairman The Secretary of the Treasury, as Chairman of the Board, shall preside at all meetings when present. In the absence of the Chairman, the Governor shall act as presiding officer. In the absence of both the Chairman and the Governor, the Vice-Governor shall preside, and in the absence of all three such officers, the remaining member of the Executive Committee shall preside. -2Article II The Governor Sec. 1. The Governor of the Federal Reserve Board shall be the active executive officer thereof; subject, however, to the supervision of the Board and to such rules and regulations as may be incorporated herein or may from time to time, by resolution, be established. Sec. 2. The Governor shall have general charge of the executive and routine business of the Board not specifically assigned under the by-laws or by resolution of the Board to any individual member or committee thereof, and 'shall have supervision of the Board's staff, including promotions, appointments, salaries and dismissals. Sec. 3. It shall be the duty of the Governor to oversee and control the submission of statements to the press expressive of the Board's policy or. descriptive of its action. Article III The Vice-Governor Sec. 1. In the absence or disability of the Governor, his powers shall be exercised and his duties discharged by the Vice-Governor, and in the absence or disability of both of these officers, such powers shall be exercised and such duties discharged by the remaining member of the Executive Committee. Sec. 2. It shall be the duty of the Vice-Governor to cooperate with the Governor in the administration of the executive business of the Board. Article IV The Executive Committee Sec. 1. There shall be an Executive Committee of the of three members, which shall include the consisting Board and one other. The third member shall -Governor Governor and Vice be nominated and elected at a regular meeting of the Board. Members of the Board shall serve as far as practicable in rotation and for periods to be fixed by, the Board from tine to time. Two members Shall constitute a quorum for the transaction of business. Sec. 2. It Shall be the duty of the 7xecutive Committee of the Board to transact all business of an administrative nature • Which can be transacted in accordance with principles or policies already established by the Board, and such as may be delegated to it from time to time; to review and approve important correspondence involving the expression of opinions or decisions of the Board, and to prepare and make recommendations governing the conduct of the Board's business. Article V The Secretara and Assistant Secretaries Sec. 1. The Board shall appoint a Secretary and one or more Assistant Secretaries. Sec. 2. The Secretary shall attend each meeting of the Board and shall keep an accurate record of its proceedings, and shall conduct such correspondence as may be assigned to him by the Board or the Governor. He shall be Secretary of all standing committees of the Board and shall perform such other duties as may be assigned to him by the Governor. Sec. 3. The Secretary shall have custody of the seal, and, acting under the authority of the Board, shall have power to affix the same to all instruments requiring it. Such instruments shall be attested by the Secretary. Sec. 4. The Assistant Secretary designated by the Board or by the Secretary shall exercise the powers and discharge the duties of the Secretary in his absence or disability. The Assistant Secretaries shall perform such other duties as may be assigned to them from time to time by the Board or by the Secretary of the Board. Article VI Assistant to the Governor Sec. 1. Governor. The Board may appoint an Assistant to the Sec. 2. The Assistant to the Governor shall perform such duties as shall be assigned to him by the Governor. Sec. 3. The Assistant to the Governor shall have power to sign checks of the Federal Reserve Board withdrawing funds from the Gold Settlement Fund as described in Article VIII of these by-laws, and requisitions upon the Comptroller of the Currency for the delivery of Federal eserve notes to the respective Federal Reserve Agents or to their order and Federal 826 8c)'7 _4_ Reserve Bank notes to the respective Federal Peserve Banks or to their order as described in Article IX of these by-laws, such checks and requisitions to be countersigned by the Governor or Acting Executive (ifficer of the Board. Article VII The Fiscal Agent and Deputy Fiscal Apent Sec. 1. The Board shall appoint a Fiscal Agent and a Deputy Fiscal Agent. The duty of the Fiscal Agent shall be to collect and deposit all moneys receivable by the Board with the Treasurer of the United States, to be placed in a special fund established on the books of the Treasurer for the Federal Reserve Board. The Deputy Fiscal Agent shall perform the duties Of the Fiscal Agent during his absence or disability. Sec. 2. The Fiscal Agent and Deputy Fiscal Agent shall each execute a separate bond with surety satisfactory to the Board. Sec. 3. Payments of expenses .and other disbursements Of the Board shall be made by the Fiscal Agent upon proper vouchers out of moneys advanced to him by requisition and warrant out of the special fund and placed to his official credit With the Treasurer of the United States as provided by Section 5 of this Article. In the absence of the Fiscal Agent payment of expenses and other disbursements shall be made by the Deputy Fiscal Agert upon proper vouchers out of moneys advanced to the Fiscal Agent by requisition and warrant out of the special fund and placed to his official credit with the Treasurer of the United States as provided by Sections 5 and 6 of this article. Sec. 4. The Fiscal Agent shall prepare a quarterly account in such form as shall be approved by the Comptroller of the Treasury and, after approval by the Governor, such quarterly account shall be submitted to the Auditor for the State and other Departments. Such account shall cover payments of expenses and other disbursements made by both the Fiscal Agent and the Deputy Fiscal Agent. Sec. 5. The Governor shall, when necessary, make requisition on the Treasurer of the United States for the advance of such sums to the Fiscal Agent as may be necessary from the Federal Reserve Board fund. Sec. 6. The Deputy Fiscal Agent in making disbursements - 828 -5of the to the credit States Fiscal Board upon proper vouchers out of the moneys advanced Fiscal Agent shall sign against funds to the official of the Fiscal Agent with the Treasurer of the United in the name of the Fiscal Agent by himself as Deputy Agent. Article VIII Gold Settlement Fund and Federal Reserve Agents' Fund All funds deposited by or for account of the respective Federal Reserve Agents in the Federal Reserve Agents' fund of the Federal Reserve Board and all funds deposited by or for account of the respective Federal Reserve Banks in the Gold Settlement Fund of the Federal Reserve Board shall be held on deposit with the Treasurer of the United States and shall be subject to withdrawal only 1%,, check of the Federal Reserve Board Signed by the Assistant to the Governor, or by the Secretary or an Assistant Secretary and countersigned by the Governor or Acting Executive Officer of the Board. Article IX Requisition for Deliveu of Federal Reserve rotes. Requisitions upon the Comptroller of the Currency for the delivery of Federal Reserve notes to the respective Federal Reserve Agents shall be signed by the Assistant to the Governor or by the Secretary or an Assistant Secretary and countersigned by the Governor or Acting 7xecutive Officer of the Board. Article X The Seal. The following is an impression of the seal adopted by the Board. 829 -6Article XI Counsel Sec. 1. The Board shall appoint a General Counsel Whose duty it shall be to advise with the Board, or any member thereof, as to such legal questions as may arise in the conduct of its business; to prepare, at the Board's request, opinions, regulations, rulings, forms and other legal papers and to perform generally such legal services as he may be called upon by the Board to perform. Sec. 2. Subject to the direction of the Governor, the General Counsel shall have authority to correspond directly with the Counsel of the various Federal Reserve Banks and to request their opinions as to the interpretation of the local laws of the States included in their respective Federal Feserve Districts. Copies of all such correspondence to be furnished to the Board for its information. Sec. 3. Whenever it may be deemed advisable, the Board may appoint one or more Associate or Assistant Counsel, or one or more Assistants to Counsel. The duty of such Associate or Assistant Counsel shall be to assist the General Counsel in the performance of his duties and to perform the duty of the General Counsel in his absence. The duty of such Assistant to Counsel or Assistants to Counsel Shall be to assist the General Counsel in the performance of his duties. Sec. 4. The Board may appoint from time to time Consulting Counsel, who may be attorneys at law engaged in outside practice. Article XII Y.eetings. Sec. 1. Stated meetings of the Board shall be held on such days of the week at such hours as the Board by majority vete may adopt from time to time. 3pecial meetings of the Board shall be called upon written request of three members of the Board. Sec. 2. A majority of the Board shall constitute a quorum for the transaction of business, except that an affirmative vote of at least five members of the Board shall be necessary to require Federal Reserve Banks to rediscount the discounted paper of Other Federal Reserve Banks, or to change reserves of banks in outlying districts. Sec. 3. At all meetings of the Board the following shall be the order of business: • -7(1) Reading or inspection of the minutes of the last regular meeting and minutes of meetings of all committees. (2) Report of the Governor. (3) Report of the Secretary. (4) Reports of the cornmittees or members on assigned business. (5) Unfinished. business. Article MI Information and Publication Sec, 1. All persons employed by the Board shall keep inviolate its business, affairs and concerns, and shall not disclose or divulge the sane to any unauthorized person - 71.1omsoever, and any employee who shall give information contrary to this by-law shall be liable to immediate dismissal. Sec. 2. While each member of the Board must determine for himself the propriety or necessity of expressing publicly his individual opinion on any question, members shall not quote Publicly the opinions of other members on matters which have not formally been passed upon by the Board. Sec. 3. There shall be published monthly, under the supervision of a committee of the Board, a bulletin to be known as "The Federal Reserve Bulletin", which shall be the official periodical organ or publication of the Federal Reserve Board. Sec. 4. No resolution of a personal character, except upon the death of a member of the Federal Reserve Board while serving as such, Shall appear in any publication of the Federal Reserve Board. Article XIV Budget and Audit The Executive Committee, acting as a Committee of Budget and Audit, shall audit the accounts of the Board for each six months' period, and shall report to the Board a tentative budget of expenses for the next succeeding six months. Article YV Amendments These ly-laws may be amended at any regular meeting of the Board by a majority vote of the entire Board, provided that a copy of such amendments shall have been delivered to each member at least seven days prior to such meeting. 831 -0Upon motion duly made and seconded, the following changes in the Board's staff were approved: Fffective November 1, 1920, Yr. W. W. Hoxton, Executive Secretary of the Board, was appointed Secretary at his present salary, to fill the vacancy caused by the resignation of Yr. W. T. Chapman. Mr. Hoxton was_designated Acting Secretary for the period October 16th to 31st, inclusive. Effective October 16th, Kr. R. G. Emerson, Assistant Secretary, was appointed Assistant to 4 6,500 per annum. the Governor, at a salary of .", The matter of appointing one or more Assistant Secretaries of the Board was referred to the Executive Committee with power. (At this point the regular business was resumed). The Governor reported the reserve positions of the several Federal Reserve,Banks as at close of business October rdth, and the status of rediscounts between Federal Reserve Banks as of the same date. The Governor reported rediscount transactions, pursuant to authority heretofore vested in him; member bank promissory notes secured by Government obligations: rate 75% as follows: Date Bank Rediscounting Oct.6th Richmond Oct.6th Oct.6th Oct.6th Kansas City Dallas Dallas With Amount Maturities 11-15 $5,000,000 (Boston 11-15 5,000,000 (Philadelphia 9-14 6,000,279.50 Boston 11-15 7,500,010 Boston 11-15 4,500,000 Cleveland days days days days days 832 -9Date Bank Rediscounting Oct.7th Oct.7th Oct.8th 'Oct.8th Oct.9th Kansas City Minneapolis Minneapolis $t. Louis Minneapolis Noted. Tath Amount Maturities $3,061,570 8-14 days Boston 1,000,000 Cleveland 11-15 days Philadelphia 2,000,000 11-15 days 7,010,000 Tithin 15 days Boston 2,500,000 Cleveland 11-15 days The Governor reported rediscount transactions, pursuant to authority heretofore vested in him; member bank Promissory notes secured by Government obligations: rates '7%, and 7% on commercial paper, as follows: Date Bank Rediscountiim V;ith Amount Maturities U32,860,000 ( 1,140,000 10-90 days 11-15 days Oct.7th Atlanta Cleveland Oct.7th Kansas City Cleveland..c 4,000,000 2,000,000 Oct. 5th Oct.6th Oat.9th Oct.9th Atlanta Atlanta Atlanta Atlanta Cleveland Cleveland Cleveland Cleveland 2,200,000 1,608,250 500,000 1,009,000 11-15 days 30-180 days 10-90 10-90 Tithin 15-90 days days 14 days days Noted. Letter dated October 12th from the Railway Loan Advisory Committee, recommending approval of form of loan of 4,000,000 as the first installment of a loan of 02,000,000 to the Virginian Railway Company, under the provisions of Section 210 of the Transportation Act, 1920, as amended. Approved. -10Letter dated October 4th from the Federal Reserve Agent at Minneapolis, with reference to that Bank taking over certain 3ub-Treasury functions. Noted. Letter dated October 6th from the Federal reserve Agent at Xansas City, with reference to that Bank taking over certain Sub-Treasury functions. 1Toted. Mr. Ilamlin reported favorably on the memorandum by General Counsel under date of September 30th with reference to the proposed amendment to the Oregon Constitution, fixing the maximum rate of interest and discount at U;:', in that State. Ordered mimeographed and circulated, and copies furnished for the information of the conference of Governors and Federal Reserve Agents. Memorandum dated October 8th by the Assistant Scoretary, with reference to the distribution of the mimeographed copies of the monthly summary of business conditions. Referred to Mr. Miller for report. Letter dated October 4th from the Chairman, Federal Reserve Bank of New York, reporting upon negotiations of that Bank relative to taking over property recently purchased at 89 Maiden Lane, upon which it is proposed to construct a storage building, -11and requesting the approval of the Board to an increase of the expenditure for the land and building to $1,450,000, due to the discovery that a considerable portion of the area is composed of quicksand beds, making it necessary to drive steel piles for the foundations. Approved. Letter dated October 6th from the Federal Reserve Agent at New York, submitting monthly recommendations of adjustments in salaries of employees of that Bank and its Buffalo Branch whose anniversaries of employment fall during September, 1920, Approved. Letter dated October 6th from the Chairman, Federal Reserve Bank of Dallas, submitting proposed increase in salaries Of employees of that Bank as approved by its Salary Committee and Executive Committee. Referred to Yr. Hoxton for report. Letter dated October 11th from the Chairman, Federal Reserve Bank of Richmond,submitting recommendation of the Executive Committee of that Bank for inarease in salaries of employees, effective October 1, 1920. Deferred to Mr. Hoxton for report. Letter dated October 6th from the Federal Trade Corn- 835 -12mission, enclosing copies of advertisements used by the Farmers National Bank of Pomeroy, Washington, purporting to have been approved by the Federal Reserve Agent at San Francisco. Referred to 1.Ir. Wills for discussion with Mr. Perrin. Letter dated October 5th from the Federal Reserve Agent at Dallas, enclosing copy uf the minutes of a special meeting of the Board of Directors of the Houston Branch of that Bank held on October 2, 1920, in which it was voted to recommend that the Federal Reserve Bank of Dallas purchase a site for the Houston Branch at a price not to exceed $80,000. Noted. REPORTS OF COrMITTEE NO. 1: Dated Oct. 11th, recommending changes in stock at Federal Reserve Banks, as set forth in the auxiliary minute book as of this date. Approved. Dated Oct. 11th, recommending approval of applications for fiduciary powers, as set forth in the auxiliary minute book as of this date. Approved:. Dated Oct. 11th, recommending approval of increase from :2,600 to ,I 3,000 per annum in salary of Mr. Herbert Freeland as Assistant Chief, Records and Relorts Division of the Auditing Department, Federal Reserve Bank of New York. Approved. 836 -13The Executive Committee reported favorably upon the memorandum of the Chief, Division of Examination, dated September 28th, recommending increase in salaries of the following Assistant Federal Eeserve Examiners, as indicated: T. J. Harrington, R. B. Chamberlain, J. B. Atkins, C. IT. Cramer, Alfred Boysen, K. E. Prickett, From 43,300 2,800 2,400 2,700 2,700 2,400 To i 3,600 : 3,000 2,700 3,000 3,000 2,700 Approved. Mr. Hamlin submitted with favorable recommendation, amended draft of letter by General Counsel to Mr. Aaron 3apiro of Cincinnati, Ohio, with reference to the eligibility for rediscount or purchase by Federal Reserve Banks of trade acceptances drawn upon cooperative marketing associations by growers who are members, such drafts to be accepted by the associations and secured by agricultural products. 1,:r. Miller submitted a negative report in connection therewith. In view of the differences of opinion of the Members of the Law Committee, on motion duly made and seconded, it was voted to refer the entire correspondence to a special committee consisting of Mr. Platt and Mr.Vills for further re-Port to the Board. Memorandum by General Counsel dated October 12th, submitting proposed draft of letter to all Federal Reserve 8,‘17 -14Agents and Governors of Federal Reserve Banks, with reference to proposed changes in legends appearing on Federal Reserve Bank notes and National Bank notes, as submitted by Assistant Secretary of the Treasury Gilbert. Ordered mimeographed and copies furnished to Members of the Board, and to the Governors and Federal Reserve Agents in conference. Letter dated October 11th from the Governor, Federal Reserve Bank of Richmond, enclosing letter written by him to the Editor of the Manufacturers' Record, in answer to certain criticism of the Federal Reserve Board made by that publication, asking the Board's approval of the circulation of this letter after it has been published by the Editor of the Manufacturers' Record. Referred to the Governor with power. Mr. i11s submitted letter dated October 9th which he had received from Deputy Chairman ':Tilliage of the Federal Reserve Bank of Cleveland, with reference to the statements published by the Manufacturers' Record, suggesting the possibility of securing from the American Bankers' Association when it is in conference in Washington next week, a statement endorsing the policies and methods of operation of the Federal Reserve System. Referred to the Executive Committee. 838 -15The Governor submitted draft of letter under date of October 11th to Yr. George P. Fampton of the Farmers' National Council, replying to a letter received by the Secretary of the Treasury under date of October 9th. Approved. The Governor read telegrams which he had received from Ur. F. R. Marshall, Secretary of the National 7ool Growers' Association, and Senators Smoot and King, requesting that he address the annual convention of that Association at Salt Lake City in January, 1921. The Governor was authorized to accept the invitation. Letter signed by several representatives of Washington Bureaus of various farm organizations, requesting a statement of the Board with reference to the Board's policy in connection with assistance to be rendered to farmers in the marketing of crops. referred to the Governor for reply. On notion duly seconded it was voted that the Conference of Governors and Federal Reserve Agents be called at 10-30 A.M., on October 13th, in the Board's assembly room, National Metropolitan Bank Building, and that a dinner be tendered to'the Governors and Agents on the evening Of -16October 14th; all subsequent arranLements to be left to the Executive Committee with paver. It 1-30 P.M., the meeting adjourned.
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