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271 A meeting of the Federal Reserve Bowd was held in the office of the Federal Reserve Board. on Tuesday, October 19, 1926, at 3:30 p.m. PRESENT: PRESENT ALSO: Governor Crissinger Mr. Platt Mr. Hamlin Mr. Miller Mr. James Mr. Cunningham Mr. McIntosh Mr. Eddy, Secretary Mr. McClelland, Asst. Secretary Er. Wyatt, General Counsel Mr. James stated to the Board that the President had appointed him as all additional member of his Committee to study the cotton situation and. lest methods of relief. He presented the following letter ath enclosure, ackiressed to him by the President, formally advising of the appointment, and l'equested an expression of the views of the members of the Board as to the PD3priety of his serving on the Committee and at the same time serving as a member of the Board. "The White House Washington October 19, 1926. My dear Mr. James : I enclose for your information the original statement issued. from the White House regarding the appointment of a committee to study the cotton situation and suggest methods of relief. It is, I think, desirable that the scope of the committee should be broadened. and I am therefore appointing you as an additional member. This letter will serve as your authorization to act as a member of the committee. Very truly yours, Hon. George R. Jams, Federal Reserve Board, Washirrton, D. C. Encl." (Signed) Calvin Coolidge 272 10/19/26 "The President has appointed Eugene Meyer, Managing Director of the War Finance Corporation; Andrew W. Mellon, Secretary of the Treasury; c:Alliam M. Jardine, Secretary of Agriculture; and Herbert Hoover, Secretary of Commerce, a Connittee to cooperate with those engaged in the production, marketing and use of cotton, to investigate the present market condition of cotton and render such desirable assistance as can be given by the Goverment to the efforts already being made in the South throug4 the financial institutions, cooperative organizations and Federal Intermediate Credit Banks and otherwise, Mr. Meyer through his CID nnection with the War Finance Corporation has had. a large experience in dealing with situations of a kindred nature and has been requested by the President to act as Chairman in charge of field activities. Secretary Mellon through his connection with the Federal Reserve Bank System, Farm Loan Banks and. Intermediate Credit Banks, will be able to advise about the securing of credits which can undoubtedly be done through ordinary banking methods. Secretary Jardine and Secretary Hoover will be in a pos ition to furnish information as to the production, warehousing, marketing and use at home and abroad of the present cotton supply. The naite House, October 9, 1926." Miller moved that the After discussion, Board express its gratification at the President's selection of Mr. James to be a member of his Cotton . . Jazes Committee, and. that every facility be given La' for the performance of his duties and any leave of absence that nay be necessary. Er. Miller's motion being pat by the Chair was carried, Mr. James not voting. The Governor stated that the meeting had been called for the purpose of considering the special order fixed for today, namely, the action to be taken bY the Board in the case of hIr. J. A. McCrary, director of the Federal Reserve talv, ' -4 Of Atlanta, in the light of the report, dated June 5th, submitted at the .1Leet ing of the Board on June 30, 1926, by 7:_r. James as a special committee 4139ointed by the Board on :lay 20th to investigate the conduct of Mr. .McCrary a view to determining whether or not he should be eliminated from the 273 J p4 10/19/26 -3- Reserve System, and the report of Mr. Howard E. Rank, sicial accountOf the Department of Justice, who was temporarily designated as an assist- ant examiner of the Federal Reserve Board to assist in the examination of the Pecleral 'Reserve Bank. of Atlanta made as at the close of business July 10, 1926, which report was transmitted to the Board by the Assistant Attorney General lalider to of August 18th. Mr. Jars suggested that if it was the consensus of opinion of the E)dera]. Reserve Board that Hr. HcCrary is not a proper man to be a director ot the Federal Reserve Bank of Atlanta and lacks qualifications deemed neces'zill for the position, particularly in view of what transpired in connection sa with the shipment of currency made by the Federal Reserve Bank of Atlanta to Its Havana Agency on April 10, 1926, the Board would be justified in asking LIcurary for his resignation, and that if 1,1r. McCrary declined to resign be in order for the Board to take definite action and remove him. Thereuoon ensued a discussion of' this suggestion, during which members or the Board expressed their individual opinions with respect to the advisatY of requ.esting Hr. LIcCrar,r's resignation. Following the discussion, 1416 James submitted the following resolutions: the Federal Reserve Board has considered the report made by its special investigating committee, and also the report submitted through the Departrnt of Justice, regarding the alleged conduct of Mr. J. A. McCrary, director of the Federal Reserve Bank of Atlanta, and "b/113.1EAS it appears to the Federal Reserve Board that the facts are established (1) that Mr. LIcCrary was a member of the pe.rty which accompanied thern shipment of currency made by the Federal 10th, Reserve Bank of Atlanta to its Havana Agency on April asbusiness a took kind any of authorization and without sociate along as his guest, --EAs "vrirE1. 274 10/19/26 -4- "(2) that during the course of the trip it was shown that the officer in charge and other members of the party indulged, in the use of intoxicating liquor and that Mr. McCrary made no effort whatsoever to prevent the use of liquor, but on the contrary, he himself partook of the libations, and (3) that subsequent to the investigation made in Atlanta by the Board's Special Committee, Mr. :McCrary returned. to the Federal Reserve Bank of Atlanta a certain sum of money presumably for the purpose of eliminating any on as to the expense involved; "THEREFORE BE IT RESOLVED that it is the sense of the Federal Reserve Board. that Mr. J. A. MoUrary lacks certain qualifications which are deemed requisite and necessary for a director of a Federal reserve bank, and "BE IT FURITHER RESOLVM that the Federal Reserve Board througi its presiding officer request Mr. J. A. McCrary to resign as a director of the Federal Reserve Bank of Atlanta." Following a discussion of the above resolutions, Mr. Hamlin moved. as a sA bstitute that the reports of the Board's Special committee and. the special a000autant of the Department of Justice be laid on the table, to be called /113 at alay time on one week's notice. Mr. Hamlin's substitute motion, being put by the Chair, was lost, the nembers voting as follows: Governor Orissinger, "no" Mr. Miller, "no" Mr. Janes, "no" Mr. Cunningham, "no" ' ,aye, Mr. Platt ' Mr. Hamlin, "aye" Mr. McIntosh, "aye" Thereupon ensued a further discussion of Mr. James' resolutions, during Which Mr. Miller suggested as a possible alternative that Mr. McCrary be illvited to appear before the Board on a date to be fixed by the Governor, 41'ter consultation with him, to be heard. in connection with his alleged mis°°rIctzet as a director of the iederal Reserve Bank of Atlanta and. more particu4tlY in relation to certain incidents in connection with the shipment of 275 10/19/26 -5- made by the Federal Reserve Bank of Atlanta to its Havana Agency on 4Pri1 10th. Mr. james stated that action along this line would be satisfactory to hira. However, 1:r. Cunningham moved, as a substitute for Mr. James' resolutions, the following: "WIERFAS the Federal Iieserve 3oard has considered the report ride by its special investigating committee, and also tne report submitted through the Department of Justice, regarding the alleged condict of Mr. J. A. ::eurary, di rector of the rederal _ieserve liank of Atlanta, "BES0LV11,D that in ti o opinion of the Federal 1-Zeserve ioard there is not sufficient evidence in these reports to warrant the elimination by the ksederal :..eserve Board of Mr. ::curary as a director of the Federal Reserve Bank of Atlanta. After discussion, Mr. Cunningham's substitute motion was put by the Chair and. carried, the members voting as follows: Governor Crissinger, 'layo ff Mr. Platt, "aye" Mr. Hamlin, "aye" Mr. Cunningham, "aye" Mr. James, "no" Mr. Miller, "not voting" Mr. McInt osh, "not voting" Thereupon ensued a further discussion, following \Lich Mr. Miller moved that Lir. J. A. McCrary, director of the Federal 'Reserve Bank of Atlanta, be -.eci before the Federal eserve Board, on a date to be fixed by the Governor, collnection with certain inquiries which the Board desires to make regarding onduct as a director of the Federal _Reserve Bank of Atlanta, and, more iptIl loularly, his recent conduct in connection with the shijAnent of currency acle by the Federal Reserve Bank of Atlanta to its Havana Agency on April 10, 276 10/19/26 -6- Mr. Miller's motion, being put by the Chair, was lost, the members voting as follows: Governor Crissinger, "no,, Mr. Platt, "no" Mr. Hamlin, "no" Mr. 0um:11401am, "no" Mr. Miller, "aye" Mr. Jams, "aye" Mr. McIntosh, "aye" • At this point, Mr. McIntosh left the meeting. Mr. Jams then moved that the question of the consolidation and future sPeration of the Cuban agencies of the Federal Reserve Banks of Boston and a as recommended in the report of the Special committee submitted at tile meeting on May 20, 1926, be brought up as special order of business on Tilee(laY, October 26th, and that notice be given to t'ne Federal Reserve Banks ot Boston and Atlanta, and to the Atlanta Clearing House Association that a hearing will be held on that day. Thereupon followed a discussion during vlaich the Governor called atten1411 to the action of the Federal Advisory Council, at its meeting on September 17th in voting that in its opinion there should be only one agency in Cuba, Pederal Reserve Bank which is to maintain this agency to be selected with tttle regard to the operation and movement of commerce and trade. Mr. Hamlin then moved as a substitute for Mr. James' motion that the cliation of the consolidation and. future operation of the Cuban agencies of Pederal Reserve Banks of Boston and. Atlanta, as recommended in the report (3t the special committee sutmitted at the meeting on May 20, 1926, be broujat 1113 as special order of business on Thursday, November 11th, and that notice 277 10/19/26 -7 be givto the Federal Reserve Banks of Boston, New York, Philadelphia and. Ittlauta, the Atlanta Clearing House Association, and. sny other interested 'Parties that a hearing will be held. on that day. Mr. Hamlin's substitute motion, being put by the Chair was unanimously carried. The meeting adjourned at 5:45 p.m. 4171)r0 d
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