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At a regular meeting of the Federal Reserve Eoard held
in the office of the Vice Governor on Thursday, September 133
at eleven A. L.
Ur. !!ardinr, presiding,

Mr. Hamlin,

Mr. Warburg,

?!r. Williams,

T'r. Delano,

Mr. Willis, Secretary.

Present also:
T'r. George J. Sony, Governor, Federal Reserve PPnk of Richmond—
The Board engaged in conference with Governor Seay with
reference to the proposed quarters and general conditions of operation of the proposed Branch at Baltimore.

After careful consid ra-

tion, the following resolution "as, on motion, adopted:
WHEREAS: The Federal Reserve Board has examined certain
plans and photographs of a building in Baltimore which it is
proposed by the Federal Reserve Bank of Richmond to purchase for
its Branch et, that point, and
':,HEREAF,, The Board is in agreement with the plan to purchase
the said building and believer the price to be, on the whole,


That it ie the opinion of the Board that the

Governor of the Federal Reserve Bank of Richmond should be
assured of its disposition to authorize the purchase of the
building at ,00,000, final action to that effect not being


token at this time because it is the opinion of the Board
that an efrort should first be mnde to induce the State banks
and trupt companies of Baltimore to accept membership in the
System, or at all events, clearing membership, as a preliminary
to the establishment of the Iranch or the purchase of a building, which would practically commit the Richmond Bank to the
continued maintenance of such Branch.
It was informally agreed that the Governor should trmimit
to the Federal Reserve Bank of Richmond a letter

toting the rub-

stance of the foregoing resolution.
Governor Seay then diacuesed with the Board the question
of organization and staff as affecting the Richmond Bank during
the coming month.

ery having -ithdrn- n from the room, tha minutes

of the meeting of the Poerd held on '
,eptember 12 -ere read and on
motion npprc vc d.
On motion, Governor Harding was authorized to write a suitable letter to Governor Aiken of the Federal Reserve Park of Boston,
relative to the,.paper of the Southern New Pnglnnd Telephone C
discussed at the meeting of September 12, and ranking reference to
the paper of public utilities companies in general.
Discount rate sheets for the week tore presented and ordered filed, no changes being requested.

application of the Texas City national Bank for power

to reduce its capital stock from

100,000 to

50,000, recom-

las, on metion,, apmended by the Comptroller of the Currency, ,
Letters from the Federal Rnserve ranks of Richrrord and
Philadelphia, relative to their treatment of reserve deficiencies,
sgere pre33nted and the Secretary directed to maintain a complete
file of such letters a.nd present them in tabulated form to the

A letter fror, Federal

eserve Agent Perrin, relPtive to the

ontiblinhment of a Branch at Salt Lake City, dated September 7,
was rend fo'r the info, nation of the r'oard, and ordered passed to
Covernor Harding presented a telegram from Covernor Van
Zandt of Dallas, with reference to subscriptions of the Dallas
Bank to the pondinq'issue of short term certific.ctes of indebtedness.

The matter was placed in the hands of the Cov(rnor for a

proper reply.
A letter from the Firat Tational rank of Harrisonburg,
with reference to the conversion of large legal tender notes into
one dollar bills, was ordered investigated by the Secretary of the
7pon recommendation of the Committee on membership, the

tate banks wore. ordered admitted to momber_rhip in the

Federal Reserve System upon the conditions set forth in each case

in the report of the Committee:
St' Lawrence Trust Company, Ogdensburg, N. Y.
Sault Savings Bank, Sault Sic. Narie,
Lr. Delano presented a letter from Crvernor Miller of
Kansas City, transmitting a letter from the First National Bank
of Denver, relative to the payment of gold certificates in dealings with the United States Mint, asking that the Mint be induced
to accept drafts on the Federal Reserve Bank of Kansas City.


matter was referred to the Comptroller of the Currency in conjunction with Mr. Delano.
Governor Hardinr reed

letter from rovernor Tither of

Kansas City with r eference to the question of exemption from military service.

No action was taken.

Governor Hardinc submitted to theBoard an opinion of
Acting Attorney Ceneral dated Septemkr 10, 1917, addressed to
the Secretary of the 7.'ren our', dealing with the question whether
Ctate banks and trust companies becoming members of the Federal
Reserve System thereby become subject to certain provisionsof
Clayton Act to which they were not subject prior to entrance into
the Federal Reserve System.

This opinion was rendered in re-

sponse to a request of the Federal Reserve Board transmitted under
( ...te of August 2, 1917, to the Attorney General through the Secretary
of the Treasury.

The Attorney Ceneral holds that these provisions o
tion 8 of the Clayton Act apply to mtion-1 banks and to State
banks or trust companies organized or doing bu-iness in the District of Columbia but do not apply to State banks or trust cOmpnies

under the laws of a State which become members

of the Federal ReserA System.
In substance the opinion which was read to the E,eard vas
to the effect that whether or not Congress originally intended
the 3a1d provisions of Section 8 to apply to State banks or trust
companie 53 bec Q3inr-

members of

the Systew as banks operating under

the lrms of the United States, any doubt on this subj cot
moved by the positive provision
1S17, am iding the



lined in the Act of June Cl,

Federal Reserve Act, which declared that

St•rte b,inks shall retain "their full el:al-ter and statutory rights"
as State banks "subject to the provisions of this Act and to the
regulations of the Foard made pursuant thereto".
In view of this provision it was held that State member
banks are free from the said restrictions imposed by Section 8
of the Clayton Act.
On motion, mode and seconded, at


Thnt the Cover-nor be and he is hereby authorized to trans-

mit a copy of this opinion to each Federal Reserve Dank.
2) That the Clayton Act Corernittee be and it is hereby authorized

directed to adopt the conclusiort, of the Attorney General in

passim. upon applications made under the Clayton Act, and thrtt
such changes shall be made in the r.igulations and forms of the
Loard as are necessary to make such regulations nnd forms consistent crith the opinion referred to.
(3) That a report be made to the Board for its action of
filly applications undtr the Clayton Act rahi ch have been refused
on the assumption that Section 8 of the Clayton Act applies to
State banks and trust companies which become menbers of the
Federal Reserve Syst ea
On motion, at 1155 A. M., the Board adjourned to rout
on Tuesday, September 18, at ten A. M.




Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102