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A meeting of the Federal Reserve Boal'd was held in the office of the Fed-oral R . eserve Board on Tuesday, September 6, 1927 at 11:00 a.m. P.AE.Slilf:T: Governor Crissinger 'Er. Platt Er. Hamlin Er. Miller Mr. James Er. Cunnincliam McIntosh Hoell, Asst. Secretary Er. McClelland, Asst. Secretavy The Governor stated that special order of business for this morning's meeting would be consideration of the situation with respect to rediscount rates at the Federal Reserve Banks of Ohicacp and San Francisco, where the Boards of Directors at their last meetings voted to continue the 4:; rates now In effect. The secretary read to the Board. the minutes of the meetings of the 30arat s Executive Committee held on August 30th and 31st and on September 1st 1tii respect to the action of the Chicagoo-directors and the minutes of the C ommittee meeting of September 2nd, in which reference is made to the San l'railoisco rate. tWO banks He also read telegrams exchanged with the Chairmen of the and at the request of the Governor read a letter from the Chairman Of the Federal deserve Bank of Chicago with reference to theattitude of various members of his board of directors in the matter of a chance in the ballk's rate and stating that he believes a reduction in the rate may be nlade at a meeting of the bank's executive committee to be held an Friday, September 9th. Mr. Japes moved that the minutes of the Executive Committee just read be approved, and that the actions recorded therein be ratified. 145 9/6/27 Mr. Platt made the point of order that the Executive Committee had uo authority to disapprove any rate at present in existence, or any rate change. Its authority was limited to the approval of a reduction to 1/2 per cant when made by any Federal havin eserve bank - this authority been delegated by the Federal 2,eserve Board merely to save time ta case the directors of any Federal Aeserve bank should notify the Board Of a reduction at a time when no quoram of the Board happened to be Present. The Board's minutes show that the only action of the Board deleatim: authority with relation to rates was the action of July 98 1927, recorded in the Board's minutes as follows: "Mr. Hamlin moved that authority be delegated to such member or members of the Board as may be present to give approval to any recommendation received from any Federal Heserve bank for. a reduction in its rediscount rate to 1/2 . Lir.'Hamlin's motion being put by the Chair was carried." Mr. Platt made the further point of order that the Executive Committee 4ugust 30th had nothing before it with relation to rates on winch it could axpress formally either approval of disapproval. The records of the Board shod that the monthly and weekly renorts of meetings of directors or Of executive committees of Federal .eserve banks have uniformly been treated as matters merely of information, when no change of rates have been reported. The -ioard has never voted either approval or disapproval of rates rePorted unchaned. The points of order raised by :Ir. Platt were over-ruled by the Chair and 1:r. James' motion was then carried, the members votinr: . as follows: 146 9 ' Governor CrissiAer, "aye" James, "aye" Junninaain, "aye" • L:cIntosh, "aye" . Platt, "no" .L.;:r. Hamlin, "no" jr. :::iller,."no" /// Thareunon ensued a discussion, ,Lurin_7 which the various members of the Board. expressed their individual orAnioas as to what action, if any, should be taken by the Board today with regard to the rate of the Federal deserve Bank of Chicago. During the discussion, Mr. Junninham submitted and moved adoption of the following resolutions: Mereas, the board of directors of the Federal deserve 'lank of Chicago at their meeting on Lugust 26th voted that no chan?se be mcde in the bank's existin;; rediscount rate of 4, and so advised the Federal deserve Board; Be it resolved, that the Federal _ieserve Board is of the opinion that the present rediscount rate of the Federal deserve Bank of Chicago should be reduced; and Be it farther resolved, that the 2ederal deserve Board in the exercise of its power of ryviaw and determination fixes a rediscount rate for the Federal deserve Bank of Chicago of 3 l/2„; on all classes of paper of all maturities, effective at the close of business today." LI .'Hamlin moved as a substitute for the resolutions• submitted by :Mr. Cunnincham, that the Federal deserve Bank Of Chicago be advised that the Federal .deserve Board has approved-of,the continuance by that bank of a rediscount rate Of 4';; through to the close of business on Friday, September 9th. Following the discussion, Mx. Hamlin's substitute motion was 'put by the Chair and lost, the members voting as follows: Mr. Platt, "aye" Mr. Hamlin, "aye" Governor Criss inger, "no" 147 9/6/27 James, "no" Mr. Cunningham, "no" Mr. McIntosh, "no" Mr." Miller, "not, voting" By unanimous consent Mr. Kamlin then moved that action on Mr. Cunniarham's motion be deferred until after the meeting Of the executive committee of the Federal aeserve Bank of Chicago, whioh is to be held on Friday. Mr. Hamlin's motion beinr7 it by the Chair was lost, the members voting as follows: Mr. Platt, "aye" Mc. Hamlin, 'a-ce" Mr. illor, 'aje" Governor Crissin-er, "no" Mr. James, "no" Mr. Junninc;ha-., "no" Mr. McIntosh, "no" Mx. Cunningham's motion was then put to a vote and carried, the members votin2: as follows: * Governer Orissinger, "aye" Mr. James, "aye" Mr. Ounninham, "aye" Mr. McIntosh, "aye" Mr. 'Platt., "no" Mr. Hamlin, "no" Liner, "no" Me Governor then referred to the rate situation at the Federal eserve Baulc Of Jan Francisco, and Mr. James moved: "That the Chairman of the Federal _deserve Bank ofan Francisco be advised that the Federal aeseL've 3oard is of the opinion that the rediscount rate of that bank should be reduced and requests that the board of directors or executive committee of the bank reconsider the action reported in the Chairman's. telegram to the Board of 3eptember 1st." Mr. James' motion was yut by the Chair and carried, the members voting as follows: Governor Crissinger, "aye". Mr. James, "aye" Mr. Ounninrjiam, "aye" 148 9/6/27 -5- Lr. McIntosh, "aye" Li*. Platt, "no" Lr. Hamlin, "no" Mr. 1,1Aller, "no" ir. James then referred to an application for membership in the , .eederal :ieserve System filed by The Dollar State Bank and Trust ,;omPany, SPranton, Pa. which was received by the Board with a recommendation from the Executive Colamittea of the Federal _ieserve Bank of Philadelrhia that it be approved, subject to the usual conditions of membership. Mr. James, 4°wever, called attention to certain conditions in the bank, particularly the fact that approximately 50,-; of the resources of the bank are in the form of bonds and securities and that a lare part of the bank's :let earncome from the purchase and sale of securities. He stated that informa- tiO4 furnished the Board indicates that the Cashier of the bank, .Who is its adm inistrative officer, devotes practically all of his attention to the ,• S oond account and expressed doubt as to the desirability of the insti. tution bein admitted to membership. Upon motion, it was voted that the above application be referred back to the board of directors of the Federal .eserve Bank of Philadelphia for -further consideration and a new recommendation. At this point, Mr. ricGarrah, Federal ,-.eserve Agent and Chairman of the Federal iwserve Bank of New York, entered the meeting and discussed -th the Board informally the action of the directors of his bank in voting to recommend the appointment of Mr. d. H. Dillis:;in as Assistant Federal ent and Manager of the 3ank Examinations Department at a salary • ,10 500 per annum, effective October let. Mr. L1cGarrah advised the of Mr. Dillistin's qualifications and expressed the hope that the 149 9/6/27 -6- appointment and. the salary proposed by the New York directors will be approved by.the Board. At 12:30 p.m. the Board recessed and reconvened at 3:15 p.m., the same , present as attended the mornin , .members beinr._, session. The Governor then brou,d'it up the matter which was discussed with 1 f IdcGarrah at the mornim: meetin,7, namely, the recemmen;:ation of the board of directors of the Federal aeserve Bank of New York that 1.1r. 7. H. pillistin be appointed Assistant Federal :,'Zeserve Aq:ent and ;„iana,3er of the 3 -4 ", . .2.4amination Department of the Federal aeserve Bank of Hew York at a salary of '1.3,500 per annum, effective October 1 1927. Mr. James moved that Mr. Dillistin be designated as Assistant Federal aeserve Apont at Hew York for the remainder of the present calendar year and that the Board approve for him salary at the rate of. 13,500 per annum, effective October 1st. Carried. Governor brought up the matter which on August 30th was made s peOlal odor of business for today, namely,'application for permission tP exercise fiduciary powers filed by the First National Bank of Perry, He stated that this application has been in the hands of the Board 'or some time, but that action has been deferred due to the fact that a fQrmer Commissioner of Ba-akin57; of the state adopted a policy Of requiring 4 capital of 100,000 and a paid-in surplus of ::;50,000 for state 'institutions sxercisinp: trust powers. The applicant bank, he stated, has the capital re- quired by state law for the exercise of such powers but would not be eliible to exercise them should the Board decide to follow the policy adopted by the State Commissioner. 150 9/6/27 Following a discussion, upon motion by Mr. McIntosh, who stated that the applicant bank is an exceptionally strong institution, it was voted to approve the application of the First ITational Bank of Perry. The Governor then presented a proposed.statement for the press announcing the reduction made this morning in the rediscount rate of the Federal deserve Bank of Chicago. Approved. The minutes of the meting of the Federal aeserve Board held on August 12th were then read and approved. The minutes of the meetings of the Executive Committee held an 1.1119.1st 17th and 94th were then read and, upon motion, the actions recorded therein were ratified. 1.r. Miller, on behalf of the Committee on District l2, then recommend- ed the appointment of1: . Peter McGregor as director of the Jpokane 3ranch OX the Federal Reserve Bank of an Francisco for the une::pirdd term of Mr. ill jam Duling, deceased, and recpested that the Committee be authorized to communicate with Mr. McGregor and ascertain whether or not he will accept slIch appointment. Upon motion, Mx. McGregor was appointed a director of the Spokane branch for the term expiring DeceMber . 31, 1928 and the Committee was authorized to aommunicate with Mr. McGregor as requested. The meetinc; adjoiled at 4:10 4PPrOVed: r Assistant Secretary: iik
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