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Page 1 November 20, 1916 MINUTES OP JOINT MEETING FEDERAL RESERVE BOARD & F3DI2HAL ADVISORY COUNCIL As arranged a joint meeting of the Federal Reserve Board and the Federal Advisory Council was held in the Board room i.j the Treasury building on Monday, November 20, 1^16, at 10JJ30 A. M. Present: Governor, W. P. G. Harding, Vice Governor P.If* Warburg, Messrs* A. C.Miller, J. S. Williams, C. S. Hamlin, 7. A. Delano and Secretary H. Parker Willie of the Federal Reserve Board; and President, James B. Forgan, Vice President , X*. Hue, Messrs. W. S. Rowe, D. G. 'wing, J. W. Uorwood, C. A. Lyerly P.O. Watts, C. T. Jaffray, T. J. Record, Herbert Fleishhacker, -*ni Secretary Merritt H. Grim of the Federal Advisory Council* Trovernor Harding called the meeting to order, and more fully explained the four topics submitted by the Board for the consideration of the Council in his letter cf I«fv 3, 1916, reading as follows: Mr. James B. Forgan, President, Federal Advisory Council, Chicago, jll. Dear Sir: Referring to ycur letter of October 27th I subir.it, in behalf of the Board, the following topics for the consideration of the federal Advisory Council at its next meeting, 1, In view of the amendment which permits member banks to use their option as to vault reserves, provided the excess reserve with the Federal Reserve Bank offseta the diminished reserve in vau&t, would it be advisable for Federal Reserve Banks to allow member banks interest on reserves in excess of the legal minimum of reserve? Z. A discussion of tne subject of acceptances and acceptance credits in general, and in particular so-called •re volving credits", with a renewal agreement on the part of the accepting banks*. In this connection your attention is called to an address riade recently by the writer, in which thus subject is discussed, (pages 8 to IS), The Board invites comment upon or criticisms of its policy regarding such credits, as well as suggestions is to the course it should adopt in the future. 5. The establishment of branches of national banks where state laws are not in contravention of such policy. The > roj osed amendment allowing this went over by agreement until the s iort session of Congress this winter, and in view of the resol ’cited at the Convention of the American Bankers Ass»n ution Pag© November 2 0 , 2 1916 at Xana as City, (upon which resolution abate bankers were allowed to vote), it is evident that some hard work will be necessary to secure the passage of the proposed amendment. 4* In conn«ction with the clearing system for the collection of country ohecksn! the suggestion has been made that Federal Reserve Banks allow member banks in the smaller cities and towns having no clearing house, a moderate fe e for the collection of checks drawn on state banks; the theory being that while a bank may be obligated to remit without charge to the Reserve Bank for checks drawn upon itself, it has no ouch duty in the case of items which it has first to collect before remi tting. Yoursj very truly, (signed) v.P.G.Harding Governor. Governor TTarding asl:ed the Council to ignore the ref erence to Federal reserve banks paying interest cn reserve balances mentioned in the first topic, making it read as follows •In view of the amendment which permits member banks to use their option as to vault reserves, provided the excess reserve ^/ith the Federal Reserve Banks offsets the diminished reserve in vault, what would it be advisable for t F e d e r a l Reserve Banks to do tc induce member banks to deposit their excess reserves with them?* Governor Harding also asked the Council to consider the following subject: •The suggestion that the law be amended so as to change the time when bank balances with reserve agent will cease to count as legal reservo from Hov. 16, 1517, to February or March 1S17»# Hr. Forgan then thanked the Board for meeting with the Council and expressed the Council’s appreciation of having fct first nand the information and explanation given by Governor Harding* The Board r-embers then withdrew. r Page 4 3 November 20, IS16 1CIKUTES OF ME3TING federal advisory council A regular statujfcotfy meeting of the Federal Advisory Council was held in the Federal Reserve Board room in the United States Treasury department, Washington, D. C. , Monday, tfowember iiOth, 1&16, at 11:30 A. M. Present: IT^ssrs. James B. Forgan, President, L. L. Rue, Vice President, D. G. Wing, V. S. Rowe, J. W. Norwood, C. A. Lyerly, F. 0. Watts, C. T. Jaffray, T. J. Record, Herbert Fleitojahaoker ind Merritt K. Grim, Secretary. The President called the meeting, to order. He read a letter from E. F. Swinney saying that he would be unable to attend the meeting on account of illness. stated that Mr. Forgan also Morgan would not b« present as he was in Europe. On motion of Mr# Fleishhacker, seconded by Mr. Rue, the minutes of the Federal Advisory Council and of the Executive Cor..' it tee of Geptervsr 18th and 19th, 1916, copies of arhich neen sent members , .vere approved. The uni"ini a"ied business was taken up. J£r. Forgan presented a j>roposed amendment prepared by aim as requested at the September meeting of the Council in the nature of a substitute for the fifth paragraph of Section 13, of the Federal Reserve Act as amended, as follows: P*fe 4 PROPOF53D SUBSTITUTE FOR FIFTH PARAGRAPH OF SECTION THIRTKBN OF Till?; FBD3RAL RBEF,PV» ACT November 2 0 ,1 9 1 6 Any member ‘ bank xaay acccpt or agree to accept or pay draft* or bills* of exchange drawn uj on it laving not wore than six rriontha’ sit;ht to run, exclusive of days of 'race, which gre* out of transactions involving the importation or exportation ci £ocaj; or which grov: out of transactions involving the domestic shipment of goods provided shipping documents conveying or becur ing titic are ut &acaed at t*ie tiive of accex tance; or which are secured at the time of acceptance by a warehouse receipt or ot.iai such document conveying or securing title covering readily laarketable staples. Any member bank im/ undertake that another bank or banker ahall accept or ny such drafts orfcills of exc^a^e drawn upon ouch bank or banker, and inay indemnify any bank or oanle r against Ihe acceptance or payment of any such hills of exchange dra;;n upon su m other bank or banker. No member bank s. tli :ccet I or agree to accept or pay such bills, or undertake that others shall accept or pay such bills, or indemnify others against the acceptance or payment of such bills, ‘shether in a foreign or domestic transaction, for ^ny o;:s parses, company, firm or corporation to an amount equal at any time in the a::%~regate to more ti>,n ten i-sx centum of its paid-up and unimi rired capital stock <,nd surplus, unless the bank is secured eitner by attached documents or by some other actual oecurity growing out of the same transaction as the acceptance and no bunk shall accept such bills to an amount equal at any time in tne a.;: .rebate to more than one-half of its paid-up and unimpaired coital stock m d surplus, excex-t by f.utbority of the Federal Reserve £*ard, under such general regulations as said Board may tre<-cribe, but not to exceed the capital stock and surplus of sucn bank, and such regulations shall ap^ly to all banks alike reg^rdleoa of the amount of capital stock and surplus. In aJ: ition to the powers granted in tne preceding para graph of this Section, any member bank may accept or agree to accept or pay drafts or bills of exchange dra?m upon it and payable at sight and may undertake that any ether bark or banker ahall accept or pay sight bills drawn on such other bonk or banker and may indemnify any other bank or banker against the acceptance or i ayment by such bank or banker of any such sight bills, drawn upon sucn bank of banker, but no member bank shall accept or agree to accept or pay sight bills, or undertake that ct :jsrs s :j x 11 accept or pay such sight bills, or indemnify others against the acceptance or payment of oucti _ight bills, for any one person, firm or corporation for an amount equal at any time in the aggre gate to more t nan ten ^er cent of its paid up and unimpaired capital and surplus, anu no member bank shall accept or agree to accept or pay such sight bills or undertake that otaers shall accej t or pay such si^nt bills, or indemnify others against the *cceitance or payment of ouch sigat bills toan amount eq^ual at any time in the aggregate to more than twenty-five per cent of its paid-up and unimpaired capital stock and surplus, except by autnority of tne Federal Reserve Board, under such general regu lations as said Board may prescribe but not to exceed fifty per °ent of tne capital stock and surplus of such bank. November ;i0, 1916 •Tr. Fieiahhacker moved that a special coricittee consisting of the •ruuidrfnt, vice-president, and A'r. Wing be jointed to take this matter up with the Governor and ViceCcvernor of the Federal Reserve Board and also the Com*troller of th< Currency if in tae committee's judgment it is thought advisable. ® Motion seconded and carried. r . Rue j r e s e n t e d , a s r e q u e s t e d a t t h e l a s t m e e t i n g , a p r o p o s e d a r e n d m e r . t | r e p a r e d by h i m t o S e c t i o n 5^00 H S U. sj a s a m e n d e d by t h e s i x t h p a r a g r a p h o f S e c t i o n 1-3 o f t ne F e d e r a l R e s e r v e A c t , r e a d i n g a s f cIIoy/s: "Sixth, Liabilities as an endorser on accepted bills of exchange actually owned by the association and rediscounted at none or abroad". O n m o t i o n o f M r . R u e i t Hi o r d e r e d t h a t t h i s C o u n c i l recorcnend t o t h e F e d e r a l R e s e r v e B o a r d s a i d amendment and t h a t i t be r e f e r r e d to th e C o m m ittee c o n s i s t i n g o f th e P r e s id e n t , V i c e P r e s i d e n t , a n d M r . W i n g t o j. r e s e n t t h e m a t t e r t o IfZSfif and Vice-Governor of the Federal Reserve Beard, Motion duly secunded and passed. The Council then proceeded to consider the topics submitted b y the Federal Reserve Board. ( S e e minutes of Joint Meeting w i t h Federal Reserve Beard, Ikv. 2 0 , 1 9 1 c ) motion of Mr. Record, duly carried, it was agreed that the Council should discuss informally the topics and then refer • -er U the Executive Committee for the preparation of state rs: t: embodying the views expressed, to be reported back for its final ap;roral. In connection with the second topic the following statement . vas adopted as the Council's opinion on it and the Executive Committee instructed to make it a part of t.ieir re;crt: fIn regard to b a n k a c c e p t a n c e s a n d p a r t i c u l a r l y in regard to s o -c a lle d "Revolving" c r e d i t s " w i t h a r e n e w a l agree m e n t o n t h e p a r t o f t h e a c c e p t i n g b a n k s we a r e i n a c c o r d w i t h t h e a r g u m e n t s a n d t h e p o l i c y b a s e d t h e r e o n a s s e t forth in t h e address recently made b y Governor Harding to w h i c h our a t t e n t io n hae been d i r e c t e d . Even i f s u c h a c c e : t a n c e s m a y , ur ;c r a l e g a l i n t e r ] r o t a t i o n o f th e w o rd in g o f th e F e d e r a l R e s e r v e A c t , b e r e g a r d e d a s e l i g i b l e f o r p u r e i a. se b y F e d e r a l reserve a ;ir it banks of the they laW . are not They in are our in no o p in io n sense in accord s e lf - w ith liquidating the Page 6 November 20, 19X6 within the time fixed by the law and cannot be regarded as etrictly liquid instru m e n t s of credit such as are b a s e d on commercial t r a n s a c t i o n s w h i c h thems e l v e s p r o v i d e for tneir retirement at maturity. In our opinion, therefore, the purchase of t h e m by the f e d e r a l reserve banks in the open m&rlcet should be d i acouraged". The C o u n c i l t h e n a d j o u r n e d u n t i l 2:30 P* S£* M I N U T E S O F M E E T I N G OF FEDERAL ADVISORY COUNCIL * * * * Nov. 20, 1916 Continued. • The F e d e r a l A d v i s o r y Cou n c i l r e c o n v e n e d at 2:30 P.M* The C o u n cil c o n t i n u e d the info r m a l c o n s i d e r a t i o n topics s u b m i t t e d by t h e F e d e r a l R e s e r v e B^ard* of the &r. J a f f r a y s u g g e s t e d that tne Co u n c i l reco m m e n d to the R e s e r v e B o a r d t he a d v i s a b i l i t y of h a v i n g the S ecretary of the T r e a s u r y e x c h a n g e a l l thi r t y y e a r 3^ b o n d s of the U nited States for 2 ^ bonds, ins t e a d of h a l f t h i r t y y e a r 3*s and half one y ear 3^ notes, as now p r o v i d e d by law. After consideration on motion of Jtfr. Rue, t ne P r e s i d e n t was r e q u e s t e d to present this m a t t e r for i n f o r m a l d i s c u s s i o n at the joint m e e t i n g with the Board* Federal On m o t i o n November 21st. t*ie C o u n c i l a d j o u r n e d u n t i l 1 0 : 0 0 A. t i . Tuesday, Secretary* MINUTES OF EXECUTIVE COIkATITTISTC M E E T I N G FKD ZRAL ADVISORY COUNCIL Nov. 20,1916. The Executive Committee met after adjournment of the Counci}. in tne Board room at 4:30 P.m . and. proceeded to formulate tenta tive statements in regard to the five topics submitted by the Federal Reserve Board, embodying the views expressed by members in their informal discussion of them, to be submitted at the meeting of the Council on the 21st instant* The following recommendations were finally agreed to; I RECOMMENDATIONS PREPARIfl) BY THE FKDiOUL ADVISOKY COU1TCIL on Tim topics sui&ittkd by r m FEDERAL RE8ERVE BOARD. November £0, 1916 Topic ITo. 1. In v i w of the amendment which permits meisber banks to use their option as to vault reserves, provided the excess reserve with the federal Reserve Banks offsets the diminished reserve in vault, what would it be advisable for the Federal Reserve Banks to do to induce member banks to deposit their excess reserves with them? Recommendation: As member banks become more familiar with and better accustomed to the working of the Federal reserve system they will more fully appreciate the desirability for the strengthening of the system of keeping as much of their It>gal reserves on deposit in tlie Federal leserve Banks as say be found practicable* We know of no special inaucementa that should be offered to a*eisber banks to do so at present, but we would reiterate the suggestion we made at our last meeting that "it would help to make thin provision of the law effective if the Member banks could feel sure that they could at all times receive from the Federal Reserve Banks gold and currency in tiifc denominations required and if the Federal Reserve Bank* could arrange with the Treasury Department to keep on hand a suffi cient supply of currency for that purpose" . If this could be accomplished it is ourbelief that the member banks would be inclined to carry a greater proportion of their cash reserves with the Federal Reserve Banks. In this connection a resolution was passed nine to one in favor of making Feueral Heserve notes available as legal reserve for member banks. (Mr. W. S. Rowe voting in the negative). Topic Ho. 2. A discussion of the subject of acceptances and acceptance credits in general, and in particular so-called "revolving; credits" with ^ renewal a$re*r?ent on the part of the accepting banks. In this connection, your attention is called to an address made recently by the writer in which this subject is discussed (pages 8 to 19), The Board invites comment upon or criticism of its policy regarding such credits, as well as suggestions as to the course it should adopt in the future. Recommendation: In regard to bank acceptances and particularly in regard to so-called "revolving credits" with a renewal agreement on the part of the accepting banks we are in accord with the arguments and the policy based thereon as set forth in the address recently made by Governor Harding to which our attention has been directed. » e n if such acceptances isay# under a legal interpretation of the wording of the Federal Reserve Act, be regarded as eligible for purchase by Federal Reserve Banks they are not in our opinion in accord with the spirit of the law. They ure in no >jense self-liquidating within the ? 2 Vopic No. 2 Continued: tine fixes by law and cannot be regarded ae strictly liquid instruments Tor credit such as arc based on commercial transactions which themselves provide for their retirement at maturity. In our opinion therefore the purchase of them by the Federal Reserve BarJco in the open market should be discouraged. Topic No. 3. The establishment of branches of national banks where state ittws are not in contravention of such policy. The proposed aroend®ent allowing this went over by agreement until the short session of Congrees this Winter, and in view of the resolution adoptee at the Convention of the American Bankers Association at Kan*ias City (Upon which resolution state bonkers were allowed to vote), it is evident that sorae haru work will be necessary to secure the passage of the proposed oaendx.ent• Recommendation: Ve still adhere to the opinion expressed in our comninuoation to you or September 21, 1915, to the effect "that the National Bank Act should be amended so as to permit tne establishment of bran ches by national banks having an unimpaired capital ana surplus of not iesa than ;£1,000,000 in central reserve ana reserve cities provided that no branches are placed outsiae of the limits of the city where the head office cf tne parent bank is located" . We are advised that such a privilege granted to national banks woulu not be affected ty stat# laws and in our opinion any Federal legislation granting auch a privilege should apply to all banks in the national system ef adequate capital or to none. Topic No. 4* In connection with the clearing system for tiie collection of country checks, the suggestion has been made that Federal Beserve banka allow member banks in the smaller cities and towns having no clearing house a moderate fee for the collection of checks dra^n on state banks; the theory being that while a bank Kay be obligated to re;,.it without charge to the reserve bank for checks drawn upon itself, it nas no such duty in the case of itetos which it bats first to collect before rerr.itting. Recommendation: The statement published in tiie Federal Beserve bulletin for 5 o*ic lio. 4 Continued: Qotobc r of the operations of tan inter «-district clcuring gy&tem indicates tiu*t the nutuber of atate bniiU agreeing to remit at p*r i- ateuaily incregain*; snd th<*t checks on nearly half of the $tatt banka in the country are now being rerait tea for at par. It ttoula sec;*' therefore' ti*at th*; ayatem is satisfactorily devel oping and under tneue conditions think it inaaviaablft that any chun ,< .-.ui id be jmaae at present. IKFOHi. AL fclUaaBSTIOK BY OOVEHKOH HAKDIHO. In reuponae to your au*^;e$tion tiiat the provisions of the la* which require ti *>t after l?ov.2ft,1917, balarcea in the hands of legal reserve agents will ceaae to count ao lawful reserve be -vde effi ctive at an earlier date, in view of present finane m l condition« v?e «ouiu favor amending, the laft so as tc grant authority to the '.'cderal Reserve Board to make tola provision eff< ctive at any date irior to Hov. 16, 1917, on giving member banka sixty days* notice. a d b it io it a l m * co i: t t o a t i o k . The douncil recommends that to the exception*? contained in Section 5 02 B.8. as amended by Section 15 of the Federal Reserve ^ct the following should be added aa a eixth exception: liabilities aa an endorser on accepted bill® of exchange ' •actually owned kj tne a jociation and reaiaoounted at home or abroad. Page MINUTES OF FKDFIRAL ADVISORY 10 November 21,1919 COUNCIL The Federal Advisory Council met as arranged in the Federal Reserve Board room at 10:00 A.M. November 21st, Present: Messrs. J. B. Forgan, President, in the chair, L. L. Hue, Vice President, , W. S. Rowe, D. G. Wing, J. W. Norwood, C. A. Lyerly, I# 0. Watts, C. T. Jaffray, T. J. Record, Herbert Fleiahhacker and Secretary Merritt H. Grim. Mr* Forgan reported that the committee consisting of Mr. Rue, Kr. v*ing and himself had a conference witn the Governor and Vice-Governor of tie Federal Reserve Board as instructed in regard to the amendments to the Federal Reserve Act which had been proposed at yesterday’s meeting and that they had secured their favorable consideration of them. (See minutes of Federal Advisory Council, Nov. 20, 1916;. The Council voted to hand to the Federal Reserve Board the following as an additional recommendation: "The Council recommends that to the exceptions contained in Section 5202 R S as amended by Section 13 of the Federal Reserve Act the following should be added as a sixth exception: **6th. Liabilities as an endorser on accepted bills of exchange actually owned by the association and rediscounted at nome or abroad", The President t nen laid before the meeting the report of the Executive Committee presenting tentative statements on the topics submitted by the Federal Reserve B^ard, In connection with topic No. 1, a resolution was passed nine to one in favor of making Federalraserve notes available as reserve for member banks, Mr. Rowe voting in the negative. The statements on the topics submitted by the Federal Reserve Board as prepared by the Executive Committee were otherwise unanimously agreed to. (See minutes of Executive Ccrn..ittee of Nov. 20, 1916). The Council then adjourned pending the arrival of the members of the Federal Reserve Board for the joint session arranged for. Secretary Pa*re 11 November 21,19l6 KIKUTKS OF JOINT MEETING of Wie FKDKRAL ADVISORY COUNCIL with t m FIDKRAL RESEKVB BOARD. A© arranged a joint meeting with the Federal Reserve Board was held in the Board room at 11:00 A.M. , November 21,1916. The following member a of tlie Board were present: Governor, . P. G. Harding, presiding; Vice-governor, P. M. Warburg, F. A. Delano, J. S. Williams, C. S. Hamlin, A. C. Miller, K. ^-trier Villi©, Secretary. The following members of the Council were present: President James B. Forgan, Vice-president, L. L. Rue, D. I, wing, ¥. S. Rov*-e, J. W. Norwood, C. 4, Lyerly, F. 0. Watte, C. T. Jaffray, T. J. Record, Herbert Fleiahhacker and Secretary Merritt K.Grim. Governor Harding called the meeting to order and asked : r. £wrgan to read tne Council*s report to the Beard, which was done. The members of the Board and tne Council then joined in a generalmdiscusaion of the various topics. Hr. Forgan suggested for informal discussion the advisa bility of having the Secretary of the Treasury in his discretion exchange all tairty year 3f bonds of the United States for 2? bonds instead of half thirty year bonds, and half one year 3/f as now provided by law. It eae pointed out that such an exchange would be more advantageous to the Federal Reserve banks. Mr. Delano suggested that tne law might be amended to provide that a definite percentage of reserve should be kept on deposit with the Federal »serve banks, leaving it to tne individual member banks to keej. whatever amount of cash on hand for till money tney required. The suggestion met with the federal favor of the Council. Governor liarding called on the members of the Council individually for informal reports on financial and commercial conditions in t ie various liatricta, and -J.1 of the members of the Council responded. Co/;n trolier illiams, suggested that Council members should visit their Federal reserve banks at least once a quarter to keep in closer touch with the management of the various banka and that the Federal Reserve banks should pay the expense of members of the Council in this connection. There being no further business the joint session adjourned. Secretary. Federal Advisory Council. FSJBKRAL R£Sj£RVi£ BOARD ,/aahington Februat f 5, 1917. U r* James B. Forgan, : resident, Federal Advieory Council, Chicago, 111. Uy dear Mr. Forgan Replying further to your latter of January 27th I have the honor, in behalf #f the Board, to suggest that tho Council consider the following: 1. DOMESTIC HRANGiliiS OF FEDERAL RSSilRVK BATIKS, as required by Section 3 of the Federal Reserve Act. In this connection the attention of the Council is called to the report of the Committee of the Governors of Federal Reserve Banks, which advises tiiat agencies rather than branches be established; and to the fact that the House Committee on Banking and Currency has reported favorably a b ill making i t mandatory upon the Federal Reserve i oard to see that brandies are established in each district, but at the same time simplifying the machinery for operating tuese branches, (oee ouse B ill 20661, page 9 ) 2. FOIvJIGi'i A,;..i-JGIilS OR BRANCHES OF IK03RAL RiiSJRVS BANKS. Should their establishment -it this time be encouraged^ 3. REJ^iVK POSITION OF UZU3&R BANKS. dhat changes are anticipated in tho present situation^ 4 . SU&-TABA3URIES. (Bee le tte r of Secretary of the Treasury in February Bulletin, page 110 j To what extent is i t practicable or advisable that their functions be performed, by the federal Reserve BanksJ Very truly your9, Signed) -. P. G. ilarding Governor. Additional topic in following telegram February 6, 1917 •James B. J o r d a n , ?rest. Federal Advisory Council, First National Ban*, Chicago, 111* "Board -ias been advised to establish Division or Bureau in charge of competent man, v?hich shall begin by making thorough study and investigation of Porei^n exchange and its bearing on our efforts to establish Doiiai l&xo&ang* in this country* Board would qq very ..lad to have you add this, to list of topics for discussion at your coming meeting at Washington and to have benefit, ci our recommendations. "Harding. Governor" January 30, 1917. Hon. ?• Harding, Governor, Federal Reserve Board, Washington, D. C. Pear Sir: At the meeting in Washington last month the Governors adopted the following vote: "That it is the sense of the Conference that when conditions in a Federal Reserve District appear to necessitate the establishment of additional facilities in cities other than that in which the Federal Reserve Bank is located, such facilities should be provided through the means of Agencies, rather than through Branches, as contemplated by the Federal Reserve Act." The Committee appointed to submit this recommendation to the Jederal Reserve Board begs to report that the discussion of the topic by the Governors brought out the following reasons on which the vote was based: (a) The establishment of branches would involve large ex; ense which, in the event several were necessary, would be almost if not quite prohibitive. (b) The establishment of agencies would be much less expensive, the difference being sufficient to be of vital iirjportance. (c) The establishment of agencies would permit of more uniformity of operation, all being under the direction of the Federal Reserve Bank, (d) The establishment of branches with their semi-inde pendent operation would undoubtedly tend to arouse conflict in policy and rivalry between sections. (e) The establishment of agencies would permit of the discontinuance of any agency or office which experience proved to be unnecessary or unprofitable, while there is no provision in the Federal Reserve Act for the discontinuance of a branch once established, regardless of how unprofitable or unnecessary that branch may prove to be. (f) The establishment of agencies would permit of the expansion of any one or all of them into fully organized branches whenever experience demonstrated the expediency of such a course. Respectfully submitted, R. L. VAN ZANDT, JOS. A. McCORB, JNO. V. CALKItfS, Committee*