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( Upon call of the Governor a special meeting of the Federal Reserve Board was held in the office of the Governor on Friday, Septanber 25, 1925 at 10:45 a.m. PRESENT: Governor Crissinger Mr. Platt Mr. James Mr. Cunningham Mr. McIntosh Mr. Eddy, Secretary The reading of the minutes of the meetings of the Federal Reserve Beard held on September 23, 1925 was dispensed with. Governor Crissinger reported that in compliance with the request (3f the Board he had attended the meeting of the board of directors of the Federal Reserve Bank of New York yesterday, at which all directors but 13ne were present. He stated that at the meeting the question of a change in the rediscount rate of the Federal Reserve Bank of New York had been thoroughly discussed and that the directors present were unanimously of the opinion that it would be unwise, in view of both the national and international credit situation, to increase the bank's discount rate at this time. He stated that the directors also felt that it might be necessary to increase the System's investment in Government securities for two reasons: (1) In the event of a stringent money market arising from a break in the stock market, and (2) to be in position to offset a probable surplus of funds at the beginning of the year. The Governor stated also that he had discussed at the meeting the action of the directors of the Federal Reserve Bank of Boston in voting to increase their rediscount rate to 4/0 and that the directors of the New York Bank had expressed the opinion that while the proposed change in the 9/25/25 -2- rate of the Boston Bank would not materially affect New York, if Boston, Philadelphia, Cleveland and San Francisco should all change their rates, it would place a real burden upon the Federal Reserve Bank of New York if that institution maintained its present rate of 3% and might force that bank to raise the rate, which action might be very embarrassing in the matter of handling international financial relations and bring about a readjustment of contemplated international investments which in the end would very likely retard, at least, if not actually handicap, the movement of the crops and the exports of this country. He stated that he had taken the matter up with the Governor of the Federal Reserve Bank Of Boston over the telephone and had been advised that while the directors Of that bank did not wish to withdraw their recommendation for an increase Ln their rate, there would be no objection to the Board permitting it to lay On the table in accordance with the action taken at the meeting on September 23rd. After discussion, it was voted that the recommendation of the Federal Reserve Bank of Boston for an increase in its discount rate to 4% be permitted to remain tabled. Letter dated September 24th from the Federal Reserve Agent at New York, who is Chairman of the Executive Committee of the Federal Reserve Agents' Conference, acknowledging receipt of the Board's letter suggesting topics for consideration at the forthcoming session of the Conference and expressing the opinion that it would be interesting to have a report at the joint conference from either Professor Sprague or Dr. Stewart, on the : 9/25/25 -3- work of the committee appointed by the Board to study necessary banking legislation, The Secretary reported that such a report by Messrs. Sprague and Stewart was under consideration. Letter dated September 23rd from Mr. John M. Miller, Jr., member of the Federal Advisory Co moil from the 5th District, referring to informal of discussion at the recent meeting of the Council concerning borrowings finance corporations in the United States and suggesting that it would be interesting to ascertain the volume of this business in member banks. Following a discussion of the matter during which Mr. McIntosh reported his willingness to attempt to secure this information as to national banks, the Secretary of the Board was directed to confer with the Comptroller and to undertake to secure the information as to state member banks. the The Governor then presented correspondence with the Manager of Public Relations Section of the American Railway Association, with reference to the appearance before the forthcoming Conferences of Governors and was Chairman of Pederal Reserve Agents of Honorable Sidney Anderson, who the Congressional Joint Commission of Agricultural Inquiry, for a discussion d by the AssociaOf the activities of the Regional Advisory Boards organize Joint Commission for the tion in conformity with the recommendation of the and agriculture. PUrpose of developing public contact with industry Noted with approval. Reserve Letter dated September 23rd from the Governor of the Federal a Bank of Cleveland, enclosing correspondence with Mr. J. M. Gardell, 9/25/25 -4.. real estate agent of Cincinnati, with reference to his claim for commission in connection with the recent transaction between the Federal Reserve Bank Of Cleveland and the Chamber of Commerce of Cincinnati; the Governor of the Federal Reserve bank stating that the claim is wholly without merit. Noted. The Governor then reported that Honorable Reed Smoot, United States Senator from Utah, had called on him and left copy of a letter addressed to the Chamber of Commerce of Salt Lake City by the Deputy Governor of the Federal Reserve Bank of San Francisco, with reference to the proposed buildfor the Salt Lake City branch; the letter stating that the firm of Young and Hansen, Salt Lake City, are the architects of the building and that invitations to bid on the work in connection with the awarding of contracts will be issued from their office. After discussion, the Secretary was instructed to report to the Board the status of the Salt Lake City building project. The Secretary then stated that he had received several letters from the United States Civil Service Commission, requesting detailed information regarding the employees of the Federal Reserve Board, their salaries, etc., for use in connection with the administration of the Civil Service Retire- 'tent Law, to which no replies had been made in view of the informal opinion Of the Board's Counsel that the provisions of the Retirement Law do not 413Ply to employees of the Federal Reserve Board. He than presented another letter dated September 24th from the Secretary of the Commission stating "it is realized that employees of the Board are not subject to the Civil - 9/25/25 -5- Service Law, the Retirement Act and other laws governing the personnel of the government" but requesting general information regarding the Board's Staff for the use of the Bureau of the Budget. The Secretary also submitted a formal opinion of Counsel, dated September 12th, to the effect that the Retirement Law is not applicable to any Federal Reserve Board employee. Upon motion, it was voted to accept the opinion of Counsel above referred to but to interpose no objection to the furnishing of the general information requested by the Civil Service Commission in its letter of September 24th. Draft of reply to letter dated September 22nd from the Federal Reserve Agent at Chicago, sufEesting the temporary designation, without official title, of Mr. GlelinKirk, an employee in his Department, to assist in receiving and receipting for Federal Reserve Notes and in making deliveries of such 110 tea to the bank and to have control of the combinations to safes of the Federal Reserve Agent, pending the regular designation of a successor to whose resignation Mr. E. L. Harris, Acting Assistant Federal Reserve Agent, ia pending; the proposed reply stating that with the understanding that Mr. /Uric, is properly qualified under the terms of the Federal Reserve Act snd 7q111 be required to give the usual bond, the Board will approve of his appointment to act for a temporary period in the name and stead of the Federal Reserve Agent in the performance of the duties mentioned. Upon motion, the proposed letter was approved. Draft of reply to letter dated September 17th from the Chairman of the Federal Reserve Bank of New York, with reference to the Board's circular -1! 9/25/25 -6- letter of July 10, 1925 on the subject "Employment of Expert Services by Federal Reserve Banks"; the proposed letter advising that the ruling of the Board was not intended to preclude a Federal Reserve bank from engaging special legal talent or the services of any expert prior to securing approval of the Board, when failure to make a firm commitment might jeopardize the best interests of the bank. Approved. Memorandum dated September 19th from the Director of the Division °f Research and Statistics and the Chief of the Division of Bank Operations l ecommending certain changes in the weekly statement showing condition of ' Pederal Reserve banks in order that it may more fully reflect certain foreign operations, including those which may arise out of the recent Credit arrangement with the Bank of England, namely, (1) The addition Of a new resource item "Rue from foreign banks", (2) The addition of a 4%7 liability item "Foreign Bank" in the deposit block, (3) A change in the Caption "All other earning assets" to "Other Securities", and (4) A Change in the caption "Total Earning Assets" to "Total Bills and in Securities"; the memorandum also recommending that bills payable foreign currency and bills payable in dollars be shown separately in the detailed classification of bills bought in the open market, which ie published monthly in the Federal Reserve Bulletin. After discussion, upon motion by Mr. James, voted to approve the changes recommended. was it of Memorandum dated September 19th from the Chief of the Division I -7_ 9/25/25 Bank Operations, submitting a brief explanatory statement to be published 14 the analysis of the first weekly statement showing condition of the Federal aeserve banks, in which the ch.ea_as above outlined are made effective. Approved. ')I? STANDING CO:ZII7=S: Dated, September 25th, Dated, September 23rd, Dated, September 23rd, Dated, September 23rd, Dated, September 26rd, Dated, September 23rd, ecommending changes in stock at Federal aeserve banks, as set forth in the Auxiliary Minute Book of this date. Approved. Recommending approval of the application of Mr. W. A. BOnynge, Jr., for remission to serve at the same time as director of the Commercial National Bank of Los Angeles, Cal. and as director of the Bank of America, Los Angeles, Cal. Approved. Recommending approvaa of the applie,ation of Mir. E. B. Adams for permission to serve at the same time as director of the Commercial National Bank, Los Angeles and as director of the Bank of America, Los Angeles, Cal. Approved. Aecommending approval of the application of Mr. S. A. Bulfinch for permission to serve at the same time as director of the Commercial National Bank, Los Angeles and as director of the Bank of America, Los Angeles, Cal. Approved. Recommending approval of the application of Mr. Robert W. Brydon for permission to serve at the same time as director of the Commercial National Bank, Los Angeles and as director of the Bank of America, Los Angeles, Cal. Approved. aecommending approval of the application of :Ir. H. J. Burkhard for permission to serve at the same time as director of the Commercial National Bank, Los Angeles and as director of the Bank of America, Los Angeles, Cal. Approved. rTh tc..) 9/25/25 -8- REPORTS OP STANDING COMITTEES: (Cont'd) Dated, September 23rd, Recomnending approval of the application of Mr. Charles G. Chapman for permission to serve at the same time as President and director of the Commercial National Bank, Los Angeles, and as director of the Bank of America, Los Angeles. Approved. Dated, September 23rd, Recommending approval of the application of Mr. J. L. Dabbs for permission to serve at the same time as director of the Commercial National Bank, Los Angeles and as director of the Bank of America, Los Angeles, Cal. Approved. g approval of the application of Mr. Recommendin Dated, September 23rd, Leroy M. Edwards for permission to serve at the same time as director of the Commercial National Bank, Los Angeles and as director of the Bank of America, Los Angeles, Cal. Approved. Dated, September 23rd, Recommending approval of the application of Mr. Orra,E. Monette for permission to serve at the same time as director of the Commercial National Bank, Los Angeles and as President and director of the Bank of America, Los Angeles, Cal. Approved. Dated, September 23rd, Recommending approval of the application of Mr. George E. Platt for permission to serve at the same time as director of the Connercial National Bank, Los Angeles and as director of the Bank of America, Los Angeles, Cal. Approved. Dated, September 23rd, Recommending approval of the application of Mr. G. D. Robertson for permission to serve at the same time as director of the Commercial National Bank, Los Angeles and as director of the Bank of America, Los Angeles, Cal. Approved. Dated, September 23rd, Recommending approval of the application of Mr. G. Spencer Shimmin for permission to serve at the same time as director of the Commercial National Bank, Los Angeles and as director of the Bank of America, Los Angeles, Cal. Approved. Dated, September 24th, Recommending approval of the application of Mr. Myer Siegel for permission to serve at the same time as director of the Commercial National Bank, 9/2V25 -9- REPORTS OF STANDING COMUITTEES: (Cont'd) Los Angeles and as director of the Baak of America, Los Angeles, Cal. Approved. The meeting adjourned at 12:00 o'clock. Approved: It
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