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278 A meeting of the Federal Reserve Board was held in the office of the Federal Reserve Board on Wednesday, October 20, 1926 at 11:00 a.m. PRESMIT: Governor Crissinger Mr. Platt Mr. Hamlin Mr. Miller Mr. Janes Mr. Cunningham Mr. Eddy, Secretary Mr. McClelland, Asst. Secretary The minutes of the meeting of the Executive Committee and the Board held. cn October 12th were read and approved. The minutes of the meeting of the Federal Reserve Board held on Oetober 14th were read and approved. The minutes of the meetings of the Federal Reserve Board held on October 19th were mad and approved as amended. Letter dated October 14th from the Secretary of the Federal Reserve Bank of New York, advising that the Board of Directors on that day made no ellallee in the bank's existing schedule of rates of discount and purchase. Noted. Telegram dated October 13th from the Chairman of the Federal Reserve 8ank of Philadelphia, advising that the Board of Directors on that day made 11° change in the bprik's existing schedule of rates of discount and purchase. Noted. Telegram dated October 14th from the Secretary of the Federal Reserve 84nk of Kansas City, advising that the Board of Directors on that day made Iange in the bank's existing schedule of rates of discount and purchase. 11(1 ° Noted. 279 10/20/26 -2- Memorandum from Counsel dated October 15th, approved by the Law Committee, with reference to the application of idr. John A. Coyle for Permis- sion to serve at the same time as director of the Conestoga National Bank and the Peoples Trust Company, both of Lancaster, Pa.; Counsel recommending that the Board refuse the application temporarily, advise the applicant that with the evidence before it it can not permit him to serve these barks and l'ePost him to furaish the Board with additional information, and also that the time within which the applicant shall notify the Board whether he desires t0 furnish additional information be limited to thirty days with the underthat if the Board is not not within that time its refusal of the application will become final. Upon motion, it was voted to approve Counsel's recommendations and the above application was temporarily refused. Memorandum from Counsel dated October 11th, approved by the Law eerftAttee, with reference to the application of Mr. Theodore L. Bean for " 13 Illission to serve at the same time as director of the Montgomery National 844k and the Montgomery Trust Company, both of Norristown, Pa.; Counsel atating that at andsince a hearing held on October 5th evidence has been fillIlished the Board on the basis of which he is of the opinion that the 11441% concerned may be considered as not in substantial competition. Upon motion, it was voted to approve Mr. Bean's application for permission to serve the Montgomery National Bank and the Montgomery Trust Company. Letter dated October 11th from the Federal Reserve Agent at Atlanta, anc)viledging receipt of the Board's letter of October 8th, enclosing letters 8441'essed to the Federal Reserve Bank of Atlanta and to Mr. Joseph L. Campbell 280 10/20/26 ativisilig of the Board's action in voting to remove Mr. Campbell as Deputy Govern° r of the Atlanta bank; the Agent stating that he has made personal delive4y to Mr. Campbell of the letter addressed. to him and will present the letter addressed to the Federal Reserve bank to Mr. M. B. Wellborn, e4vernor of the bank upon his return, and that he will cause the latter letter to be read to the board of directors of the bank at their next meet- Noted. Telegram dated October 18th from the Managing Director of the 13111110h Federal Reserve Bank at Detroit, alvising of the death of Mr. H. H. Bassett, one of the Board's appointees to the directorate of the branch. Noted with regret and referred to the Committee on District 47. Telegram dated October 18th from the Deputy Governor of the Federal ll'eaerve Bank of New York, advising of the death of Mr. James H. McNulty, one Of the Board's appointees to the directorate of the Buffalo Branch. Noted with regret and referred to the Committee on District #2.. Report of Executive Committee on memoranda= dated October 8th from the Acting Director of the Division of Research and Statistics, transmitting the resignation of Miss Louise Young as stenovapher in the Division, effective October 31, 1926, and recommen.ding that Miss Young be granted thirtST days leave of absence; the Conaittee recommending approval. Upon motion, Miss Young's resignation was accepted and the leave recommended was granted. 10/20/26 -4- Report of Coxnmittee on Salaries and. Expenditures on letter dated °otober 16th from the Controller of Administration of the Federal Reserve Bank of Chicago, requesting approval of a salary of3,000 per annum for • John Martin, employed in the Loan Department of the bank; the Committee ' leccommending approval. Approved. Letter dated October 15th from the Assistant Federal Reserve Agent at New York, advising of the merger of the Arerican Bank of New York, a non- memb er, into the Central Mercantile Bank of New York, effective at the close Of basiness, October 13, 1926. Noted. Report of Committee on Salaries and Expenditures on letter dated October 12th from the Secretary of the Federal Reserve Bank of Atlanta, tegnesting approval of the action of the board of directors of that bank IA voting to grant an additional thirty days' leave of absence, with full on accaant of illness, to Miss Frances Shropshire, an employee of the 14°11eY Department; the Committee recommending approval. Approved. Letter dated October 14th from the Controller of Administration °t the Federal Reserve Bank of Chicago, advising of a payment of 4156.92 laacle to Mr. J. H. Patton, attorney, for services and court costs in various IriEttters in which he has represented the Federal Reserve bank, growing out Of the failure of the Merchants National Bank of Grinnell, Iowa. Noted, with approval. 282 10/20/26 -5- Lemorandum from the Chief of the Division of Bank Operations, dated October 15th, transmitting statements of expenditures by the Federal Reserve ballks for educational and welfare work, etc. (hiring the month of September alld- for the nine months' period ending 'September 30th. Ordered circulated. 1.:emorandum from the Secretary dated October 16th, advising of the action of the board of directors of the Federal Reserve Bank of Dallas, in allthorizing the r-Ixecutive Committee of the bank to make an arrangement for 1 services with the firm of Locke, Locke, Stroud z.Ind Randolph, upon the te.rms of employment as formrly had with E. B. Stroud., whose resig- liation as Counsel becam effective October 1, 1926 and whose salary was ,...6,000 Per "4441/11; together with a memorandum from Assistant Counsel dated October 19th with reference to the proposal of the bank to turn over to the sazac firm 411 notarial work which in the -oast has been handled in -Dart by J.P. plieibolbis who has resigned as Assistant Office Counsel at the Federal Reserve and become connected with the firm of Locke, Locke, Stroud and Randolph. After discussion, the above matter was referred to the Board's Committee on Salaries and Expenditures. 1.1criorandum from Counsel dated October 11th, submitting draft of reply to letter dated September 1st from the Governor of the Federal Reserve Bank (3f L:ausas City inquiring whether a member bank in computing its reserves may 1)11°1)(119-y deduct as amounts due from banks, credits actually entered by corl'es1)°11(lent banks renresentin7 items such as coupons, checks drawn on themselves by c not "Porations other than banks, bill of lading drafts, etc. which have Ziet proposed reply stat4et1ca11y been collected by the correspondent bank; the 1 283 10/20/26 -6- 11 ing that when credit has actDally been entered by a correspondent bank on iteMS forwarded to it by a member bank and the member bank is entitled to draw against the credit so entered, the amount of this credit may prooerly be considered an amount due from banks and deducted by the member bank in computing its reserve from its balances due to banks, notwithstanding the tact that the correspondent bank has not yet actually collected the item. Upon motion, the proposed reply was approved. Draft of reply prepared by Counsel to letter dated Septamber 28th from Riahard Y.ayer, trust officer of the Southwark National Bank, Philadelphia, inquiring vbether a lot in the city of Philadelphia which has been imProved to the extent that the sidewalk in front of it has been paved, the curbs laia on the streets abutting the lot and such streets have been fully paved, be considered improved real estate upon which a national bank mi;:ht make 4 loan under the terms of Section 24 of the federal Reserve Act; the proposed /sePlY statinr; that inasmuch as it does not appear that there is any substantial cr remanent structure upon the lot described it can not, under a ruling of the Comptroller's office, be considered as improved real estate under the Dro visions of Section 31. Upon motion, the proposed letter was approved. Letter dated October 11th from Mr. W. H. Kettig, Chairman of the °W°a11. Agency Committee of the Federal Reserve Bank of Atlanta, advising that both his committee and the committee appointed by the Atlanta Clearing 11°118e Association are prepared to present the Atlanta side of the Cuban 284 -7- 10/20/26 4eencY cuestion at any time the Federal deserve Board desires a meeting. Noted, without action, in view of the fact that the Board yesterday made the matter of the jubaa Agencies special order for a meeting on November 11th and ordered all interested parties advised. Corinittee on Latter ordered circulated at the meeting of the ..s:ecative SePternber 15th, namely, letter dated. September 9th from the Governor of the Pe(leral Reserve Bank of Dallas setting forth circumstances surrounding that 12'a e i recent refusal to extend the use of its rediscount facility to the CitY National Bank, Decatur, Texas, except upon certain conditions; together With a memorandum from the Comptroller of the Currency expressing the opinion that the Federal Reserve bank would be perfectly justified in not extending a Of credit to the institution named. Noted. a Letter dated October 11th from Mr. Montgomery B. Angell, submitting Statet10rit in the amount of .)5,025.32 for fee and expenses in connection with tl/k) Par clearance case of the Pascagoula National Bank v. Federal aeserve 1341-1-1t of .Lticsata et al. Referred. to the Law Contaittee. of Letter dated October 14th from the Deputy Chairman of the board (111%ectors of the Federal ieserve Bank of New York, replyinc; to the Board's propriety under the "of Sertenber 29th, with reference to the need and lett eszl'Oral -ieserve Act of the uses made by the First National Bank of New Yoai: er the credit facilities of the Federal aeserve bank. 'Referred to the Committee on District 2. 285 10/20/26 -8- Letter dated October 15th fram the Deputy Governor of the Federal esp --rve Bank of row York, transmitting copies of the program of topics for discussion at the forthcoming Conference of Governors. Ordered circulated. Boston, Letter dated October 14th from the Federal Reserve Agent at elaclosing copies of the program for the forthcaming Conference of Federal ileserye Agents. Ordered circulated. Draft of reply, prepared by the Vice Governor in accordance with reOctober 9.116st made at the meting of the Board on October 12th, to letter dated with referenee 8t4 fram the Governer of the Federal Reserve Bank of 1:inneapo1is, v:ith memto certain relourchase transactions had by the Federal Reserve bank ber banks in YAnneapolis and St. Paul; the proposed reply stating that inasralleh as the transactions engaged in by the Liinneapolis bank were on a limited seals and to meet a transitory situation there is no occasion to ,so into the lloatter formally and more fully. Upon motion, the proposed reply was approved. At this point, Lir. James referred to the provisions of the Board's :iegalations with respect to the appointment of directors of Branch Federal ?'e2ee Banks that the directors appointed by the Federal _Zeserve Board shall be chosen from the ranks of men of high character and standing, who are enin agriculture, industry or commerce, insofar as may be possible or 1)racticab1e, while the directors annointed by the Federal aeserve banks shall 11°flO1I well qualified and experienced in banking. James stated that at 286 —9— the beginning of the present year the Board made exceptions to this rule and. retained as its a000intees certain branch directors who were actively ens'ar. ed. 14 banking. He stated that certain bra-1h directors in districts in which he We's interested as a Committee member, whose terms expire with the end of the culirent year, were active bankers aal for his guidance in making recommendations fc)r Appointments to succeed these men inquired whether the Board in making agDointments would abide strictly by the -provision of its 2.egulations that its •131Dointees should be non-bankers. After discussion, Lir.ller moved that it is the sense of the Federal lieserve Board that beginning January 1, 1927 all district committees in making recommendations for the appointment of branch directors should_ give full effect to that section of the Board's allegulations governing the appointment of such directors which provides that the Board's appointees "Shall be chosen from the ranks of men of high character and. standing, who are engar_,red in agriculture, industry or commerce, insofar as m,r be possible or practicable" and that in cases where this appears to be impracticable the matter should be reported to the Board for considerat ion. :.:r. Miller's motion being put by the Chair was carried, ::r. Platt voting "no". :latter ordered circulated at the meeting on October 5th, namely, letters (/3"tecl October 1st and 2nd from the Chairman of the Federal .deserve Bank of t%tlaza,_ 4 with reference to action taken on the various criticisms and sug" stions 1-mde by the Board's .2,xarain.er, following the examination of the 1D411k made as of the close of V..r.siness July 10, 1926. deferred to the Board's Chief `.:Ixaminer. of the The Secretary then presented draft of a letter to the Governor action of the Board at its ?ecleral -;;eserve Bank of New York, advising of the 287 10/20/25 fleeting yesterday in disapproving the recomendation of the board of directors Of the Uaw York bank that the minimum rate at which bills will be purchased filora the National Bank of Belgium under the Board's authorization of October 5, 1926 be fixed at 0 instead of 5% as previously approved by the Board. After discussion, the above letter was approved after being amended to read as follows: "At the meetinL; of the Federal ,ieserve Board yesterday, Lir. Harrison presented verbally the recameniation of the board of directors of your bank that the minimum rate at which the bank will purchase bills from the National Bank of Belgium under the Board's authorization communicated to instead of you on October 5, 1926, be fixed at as previously approved by the Board. After discussion of the effect upon the purposes of the plan in the event no change was made in the minimum rate at which bills are to be purchased by the Federal deserve Bank of New York nlyler the authorization given by the Board on October 5th, action by the Board resulted in its disapproval of the recommendation of your directors that the minimum rate at which bills will be lurchased be fixed at 6%. 41 The Governor then referred to the action of the Board on October 12th in votin.s; that 1,:r. Goldenweiser arrange to come before the Board for the :9111"pose of c7ivi/r: it a comprehensive review of the present credit and business He stated that Goldenweiser was prepared to come before the Board immediately, if desired. Upon motion by Lr. Hamlin, it was voted that Goldenaeiser be requested to appear before the : held tomorrow morning at Board at a meeting to b. 10:30 a.m. 117, -.uo OF STADING Lat"3d, October 15th, .aecommending changes in stock at Federal .32serve banks nc, set forth in the auxiliary minute book of this date. 16th, "0 Approved. 16th, 19th, • 288 10/20/26 -11- REPORTS' CF STAIDING CCI.TAIUTEES: (Cont Dated, October 13th, 16th, 19th, Dated, October 19th, Dated, October 12th, Dated., October 16th, Dated, October 16th, Dated, October 18th, Recoeing act ion on applications for fiduciary powers as set forth in the Auxiliary Minute Book of this date. Approved.. RecORM nding action on application for fiduciary powers as set forth in the Auxiliary Minute Book of this date. Refused. Recommending action on application for fisiue iary pov..ers as set forth in the Auxiliary Minute Book of this date. Ordered. held.. Recommending action on application for admission of state bank, subject to the conditions stated in the individual reports attached to the application, as set forth in the Auxiliary Minute Book of this date. Approved. Recommending approval of the application of Mr. F. T. Manley for permission to serve at the same time as director of the First National Bank, Port Arthur, Tex. and as director of the National Bank of Commerce, Houston, Tex. Approved. Recommending approval of the application of Mr. Ernest Peyler for permission to serve at the Sara9 time as director of the Community National Bank, Buffalo, N. Y. and as director of the Citizens National Bank, Lancaster, N. Y. Approved.. The meeting adjourned at 1 p.m. e rotary. A pproved: If
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