Full text of Minutes of the Board of Governors of the Federal Reserve System : Meeting Minutes, September 20, 1927, Volume 14, Part 3

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A meeting of the Executive Committee of the Federal Reserve Board was
20,
held in the office of the Federal Reserve Board on Tuesday, September
1927 at 11:15 a.m.
PAESENT:

Vice Governor Platt
Mr. James
Mr. Cunningham
Mr. Eddy, Secretary
Mr. McClelland, Asst. Secretary

National
The Vice Governor presented application of The Louisa County
, executor,
Bank of Columbus Junction, Iowa, for permission to act as trustee
estates, assignee,
administrator, registrar of stocks and bonds, guardian of
that the bank,
receiver and committee of estates of lunatics; and stated
Savings
since assuming certain assets and liabilities of The Louisa County
Bank has been acting as trustee, administrator, executor and guardian without
a permit from the Board.

The Vice Governor read a recommendation of the

the national
Federal Reserve Agent at Chicago that the Board merely permit
the savings
bank to continue the trusts which were actually in existence in
the permit
bank at the time that institution went out of business, but that
receives a
extend no further until such time as the Federal Reserve Agent
s of the concomplete report of examination upon which to base an analysi
it should be
dition of the bank and a recommendation as to whether or not
permitted the general exercise of trust powers.

He also submitted a mem-

been the policy
orandum from the Board's sub-committee stating that it has
Of the Board not to grant fiduciary permits to act in specific cases and
ly as trustee,
recommending that the bank be authorized to act general
the authority
executor, administrator and guardian, which would cover
tration of the
necessary to make lawful the continuance of the adminis
trusts now in the national bank.



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After discussion, upon motion by Mr. James, it
was voted to authorize the Louisa County National
Bank, Columbus Junction, Iowa, to act as trustee,
executor, administrator and guardian.
The Vice Governor then presented two bonds, dated September 13th and 15th,
ta the amount of „i50,000 each, covering 1,1r. W. W. Hoxton, Federal Reserve
Agent at Richmond.
Approved.
Memorandum from Counsel dated September 9th, submitting draft of letter

4

to Mr. Joseph C. Specht with reference to his application for permission to
serve at the same time as director of the National City Bank and as director
Of the German American Savings Bank, both of Los Angeles, Calif; the proposed
letter stating (1) That it appears from the evidence submitted to the Board
that these two banks are in substantial competition within the meaninE: of the
Clayton Act and on the evidence before it the Board has no power under the
law to grant the application; (2) Dist before passing finally upon a case
Of

this kind it is the practice of the Board to afford an opportunity to the

that
applicant to present any additional facts or arguments tending to prove
the banks he wishes to serve are not in substantial competition; and (3)
That if the Board does not receive notice within thirty days that Yr. Specht
his
desires to present additional information or arguments in support of
application it will be considered as definitely refused.
Upon motion, the letter submitted by Counsel was
approved and ordered transmitted.
Memorandum dated September 14th from the Chief of the Division of
Bank Operations, submitting the resignation of Miss Louise Barnard,

comp-

September 19th, and
tometer operator, effective at the close of business
the vacancy thus
recommending employment of Mrs. Rita S. Fugitt, to fill



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created, at an annual salary of 41400.
Upon motion, Miss Barnard's resignation was accepted and the employment of Mrs. Fugitt was approved.
Report of Executive Committee on letter dated September 16th from the
Comptroller of the Currency, recommending an increase from 44800 to 45,000
per annum in the salary of National Bank Examiner H.

Byers; the Com-

mittee recommending approval.
Formally approved.
Report of Executive Committee on letters dated September 15th and 16th
from the Comptroller of the Currency, recommending approval of salaries for
National Bank Examiners as follows:
Benjamin H. Wooten, 11th District
Chester A. Welday, 12th District
William L. Sibley, 11th District
Wm. C. Lriswold, 4th District

-

4600 per annum
u
2700 "
ft
2700 II
If
5000 ft

Formally approved.
Report of Executive Committee on letter dated September 19th from the
Comptroller of the Currency, recommending approval of a salary of 43600
per annum for National Bank Examiner Verne J. Wilson, assigned to the
Seventh

Federal Reserve District.
Formally approved.

Report of Committee on Salaries and Expenditures on letter dated
September 16th fram the Chairman of the Federal Reserve Bank of Richmond,
requesting approval of an increase from 03600 to

.1,000 per annum in the

salary of Mr. Travis F. Epes, who has been appointed General Auditor to
succeed Mr. Hugh Leach, transferred to the Charlotte Branch as Managing
Director; the Committee recommending approval.




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Approved.

es on letter dated
Report of Committee on Salaries and Exrenditur
at Dallas, requesting approval
September 8th from the Federal Reserve Agent
in voting to extend
of the action of the board of directors of that bank
with full pay, leave of
for a period of twenty-one days from August 9th,
granted to Yr. H. H. Alexander,
absence on account of illness previously
; the Committee recommending
an employee of the Insolvent Banks Department
approval of the salary payment involved.
Approved.
tant Federal Reserve Agent
Letter dated September 13th from the Assis
American Trust Company
at San Francisco, advising that on September 1st the
Francisco, the branch
Of San Francisco moved to 345 Powell Street, San
formerly located at 465 Powell Street.
Noted.
Expenditures on letter dated
Report of Committee on Salaries and
the Federal Reserve Bank of New
September 8th from the Deputy Governor of
the grades of Miss Inez Voelkner
York, recommending approval of promotions in
grade is in excess of 42500
and Mr. Henry Perrin, to positions where the
mber 1st; the Committee recomper annum, such changes to be effective Septe
are in accordance with the grade
mending approval of the promotions which
on January 12, 1926.
classification plan approved by the Board
Approved.
dated September 13th
Report of Executive Committee on letter
transmitting and recommending
from the Federal Reserve Agent at Boston,
Island Hospital Trust Company of
approval of an application of the Rhode
t up to 100
Providence, A. I. for permission to accep




of its paid-in and

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9/20/27

unimpaired capital stock and surplus; the Committee recommending approval.
Formally approved.
Letter dated September 16th from the Federal Reserve Agent at Boston,
advising that the Merrill Trust Company, Bangor, Me., whose notice of intention to withdraw from the Federal Reserve System does not expire until
,
November 9th, is negotiating to take over the ialdo Trust Company, Belfast
Le. and operate it as a branch; the Agent inquiring wheth.r under the
circumstances he should advise the Merrill Trust Company that it can not
take over the branch.
Upon motion by Mr. James, the Secretary was
d
directe to advise the Federal Reserve Agent that he
should inform the Merrill Trust Company that under the
law it can not establish a branch outside the city of
Bangor until after its withdrawal from membership in
the Federal Reserve System which will become effective
on November 9th.
The Vice Governor then submitted the matter which was referred to the
er 6th
Executive Committee on September 8th, namely, letter dated Septemb
submitting a
from the Secretary of the Federal Reserve Agents' Conference,
ton
tentative program for a meeting of the Conference to be held in 7ashing
the latter part of next month.
Upon motion, it was voted to approve the tentative
program as submitted.
The Secretary reported that the only topic which the Board has thus
that of a
far voted to refer to the Federal Reserve Agents' Conference is
Reserve Agents
system policy with respect to the publication by the Federal
member banks
or Federal Reserve banks of their findings in examinations of
made under their supervision.

He referred, however, to the discussion had

the advisability
with the Federal Advisory Council at their last meeting as to



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of standardizing the forms of statement being required by the Federal
Reserve banks in connection with the rediscount of paper.
Upon motion, it was voted to place this question
upon the programs for the forthcoming Conferences of
Governors and Federal Reserve Agents.
Aeport of Committee on District #10 recommending the appointment of
Mr. iiayland ::. Magee of Bennington, Nebraska, as director of the Omaha
Branch of the i'ederal Reserve Bank of Kansas City for.the unexpired term
Of Mr. A. J. Weaver, resigned, ending December 31, 1927.
Upon motion, it was voted that the 2xecutive Committee should endorse the recommendation of the Committee.
Letter dated September 16th from the Federal Reserve Agent at Atlanta;
Florida
transmitting copy of letter from the Comptroller of the State of
advising that he has made no change in his policy of requiring a capital
Of 400,000 and a surplus of 450,000 to be paid in by trust companies
before beginning business in that state.
Noted.
Memorandum from the Secretary dated September 16th advising that by
direction of Mr. Cunningham he furnished to each member of the Federal
meeting
Advisory Council a copy of Mr. Cunningham's statement made at the
Of

of
the Federal Reserve Board on July 13th and recorded in the minutes

said meeting, with respect to his view of the credit policy to be followed during the period of the ensuing several weeks.
Noted.
FedLetters dated September 15th and 16th from the Chairmen of the
eral Reserve Banks of San Francisco and Richmond, respectively, advising




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of amendments to the By-laws of those banks with relation to the annual election of officers, adopted by their boards of directors in conformity with
the request made in the Board's letter of August 16th (X-4928).
Noted, with approval.
Letter dated September 13th from the Federal Reserve Agent at Dallas,
member
transmitting copy of a further circular letter being sent out to
s, Presibanks in the Twelfth Federal Reserve District by Mr. J. P. dilliam
dent of the First National Bank, Mineral Wells, Texas, with respect to the
Policies and administration of the Federal Reserve Bank of Dallas; the
Agent stating that Mr. Williams is also sending out another letter to
in Fort
certain member banks inviting them to attend a meeting to be held
Worth the latter part of September.
Noted, and ordered filed.
Letter dated September 13th from the Federal lieserve Agent at
and
Boston, inquiring whether deposits in member banks by building
loan associations, mutual savings banks, co-operative banks, credit
to banks"
unions and Morris Plan banks should be classed as amounts "due
or should
Within the meaning of Section 19 of the Federal Reserve Act,
from
be classed as demand or time deposits, against which amounts "due
rebanks" can not be applied in arriving at the basis for ascertaining
quired reserves.
After discussion, it was voted to refer the
above question to the forthcoming Cenferencesef
Governors and Federal Reserve Agents.
Bank
Letter dated September 13th from the President of the Marine
of
and Trust Company of New Orleans, suggesting that the New Orleans Branch




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9/20/27
to member
the Federal Reserve Bank of Atlanta be permitted to make advances
on prime English banks,
banks against the pledge of sixty day sterling bills
with the Federal
With documents attached, which bills would be deposited
that if this permission
ieserve bank for collection; the letter stating
enable New Orleans banks to
should be granted the New Orleans Branch it would
and grain imoort bills which
Purchase considerable quantities of cotton
be handled by the banks there.
originate in that territory and which should
above
After discussion, it was voted to refer the
recomfor
ta
Atlan
of
Bank
e
Reserv
al
letter to the Feder
Board's
mendation and at the same time to request the
compliance
counsel for an opinion as to the legality of
in.
there
ined
conta
with the suggestion
with regard to an inquiry
Memorandum from Counsel dated '3eptember 8th,
to whether a member
made by Mr. Gilbert, Supervisor of Examinations, as
the Federal Reserve ACt
bank that is violating one or more provisions of
member banks,
and United 3tates statutes made applicable by that act to
conditions of membership, has
regulations of the Federal Reserve Board or
g the
a right to the enjoyment of any or all privileges of membership durin
if not, whether the Federal
time that such violations may be continuing and
instructions or by regulaReserve Board has power, by general or special
from the banks so delintion to require Federal Reserve banks to withhold
privilege of discountquent their privileges of membership including the
delinquency.
ing eligible paper during the period of such
Ordered circulated.
with regard to the matMemorandum from Counsel dated September 2nd,
y, memorandum dated
ter referred to him at the meeting on August 11th, namel
nations setting forth certain
August 10th from the Supervisor of Exami




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questions regarding the interpretation of Sections 5204, 5205 and 5209 of
the Revised Statutes of the United States, in connection with state member
banks which, through losses or other withdrawals, have suffered Impairments
Of their capital.
Ordered circulated.
The Secretary then referred to a request made by the President of the
Federal Advisory Council at the time of the meeting here on September 16th
that the Executive Committee of the Council be furnished with copies of
the draft of the Board's proposed new regulation regarding the computation
Of reserves of member banks.
Upon motion, the Secretary was authorized to
furnish copies of the tentative regulation to the
President of the Council.
Matter ordered circulated at the meeting on August 30th, namely,
memorandum dated August 19th from the Secretary submitting and summarizing letters received from the Governors of the various Federal Reserve
banks, with respect to the practice of certain banks of making a charge
Of

twenty-five cents on checks drawn against insufficient funds, which

letters were addressed to the Board in connection with a request from
the Governor of the Federal Reserve Bank of Minnearolis for a ruling as
to whether the Federal Reserve bank should remove from the par list
certain non-member banks in the ninth District which have adopted the
practice of making the charge against the bank which sends the item
rather than against the drawer of the check.




After discussion, it was voted to submit the
above question to the forthcoming Conference of
Governors for discussion.

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9/20/27

Division of Bank Operations
Memorandum from the Assistant Chief of the
expenditures by the Federal
dated September 20th, submitting statements of
etc. during the month of
Reserve banks for educational and welfare work,
ending August 31st.
August and daring the eight month period
Ordered circulated.
AgE2RTS OF STANDING COMMITTEES:
in stock at Federal Reserve
Dated, September 16th, Recommending changes
Minute Book
17th, banks as set forth in the Auxiliary
20th, of this date.
Recommendations approved.
mending action on applications for fiduciary
Recom
Dated, September 16th,
e Book
powers as set forth in the Auxiliary Minut
of this date.
Recommendations approved.
mending approval of the application of Mr.
Recom
Dated, September 16th,
the same
F. W. Shelton for permission to serve at
sa
Hermo
of
Bank
nal
time as director of the Natio
the
of
er
offic
as
and
Beach, Hermosa Beach, Cal.
Pacific National Bank, Los Angeles, Cal.
Recommendation approved.
mending approval of the application of Mr.
Recom
17th,
Dated, September
at the
Stewart Cosgriff for permission to serve
Commercial
the
of
tor
direc
same time as President and
tant
as
Assis
and
Idaho
National Bank, St. Anthony,
Lake
Salt
Bank,
nal
Cashier of the Continental Natio
City, Utah.
Recommendation approved.
mending approval of the application of Mr.
Recom
10th,
Dated, September
at the
Charles A. Miller for permission to serve
Bank,
nal
Natio
First
the
same time as director of
the
of
er
Cashi
tant
Assis
as
Allegany, N. Y. and
Y.
N.
,
Olean
Exchange National Bank,
Recommendation approved.
val of the application of Mr. J.
Dated, September 16th, Recommending appro
the same
Arthur House for permission to serve at
ian Trust
Guard
the
of
er
offic
time as director and
the
of
tor
direc
as
and
Ohio
Company, Cleveland,
land,O.
Cleve
Bank,
Land
Stock
Ohio-Pennsylvania Joint
ved.
Recommendation appro
mending approval of the applicatirm of Mr.
Recom
15th,
Dated, September
at the
Maurice N. Niezer for permission to serv3
nal Bank,
Natio
ln
Linco
the
of
same time as director
dent
Presi
Vice
and
tor
direc
Fort Wayne, Lad. and as
Ind.
,
Wayne
Fort
ny,
of the Lincoln Trust Compa
Recommendation approved.




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l'APORTS OF STANDING COMMITTEES: (Cont/d)
Dated, September 15th, Recommending approval of the arplication of/tr.
Samuel M. Foster for permission to serve at the
same time as director and Chairman of the Lincoln
National Bank, Fort Wayne, had. and as director
and Chairman of the Lincoln Trust Company, Fort
Wayne, Ind.
Recommendation approved.
Dated, September 16th, Recommending approval of the application of Mr.
M. S. Eccles for permission to serve at the same
time as officer and director of the First National
Bank, Ogden, Utah, as officer and director of the
National Bank of Idaho, of Pocatello, Idaho and as
officer and director of the First National Bank of
Rock Springs, Wyoming.
Recommendation approved.




The meeting adjourned at 1

e.

I/ll

/

Secretary.

Vice Governor.
1;1