19260406_Minutes.pdf

327

Of the

A meeting of the Federal deserve Board was held in the office

Federal Heserve Board on ?.uesde,y, April 6, 1926 at 11 o'clock A.M.

PHESE172: Governor Criss ingerMr. PlattMr. HamlinMr. MillerMr. JanesMr. CunninjianMr. McIntoshMr. 1oe11, Assistant Secretary.Mr. McClelland, Assistant Secretary.

Memorarslum dated April 5th from the Assistant Secretary, recorrnend—

ing that .tobert Piper, messenger, be granted an extension of ten days sick

leave, in additional to the usual thirty claws sick leave allowed by the

'33.1:6-, on account of absence occasioned by injuries received while on duty.

Approved.

liemorandum dated April 1st from General Counsel requesting

authority to employ a file clerk in his office at a salary of rr;1200 per

41141-1111; Counsel stating that his budget for the year includes an item of

3900()— to provide for the employment of an additional stenographer or

rile Clark or both.

Upon motion, the authority requested wasgranted.

Liernorandum from Counsel, dated March 5th, on telegram dated March

ora the Assistant Cashier of the Federal deserve Bank of San Francisco,

,Slig that there is being transferred to the Security Trust and Savings

Los Angeles, 150 shares of Federal Reserve Bank stock held by the

Citizens State Bank, Sawtelle, California, on account of the merger of those

tv10 institutions; Counsel stating that the Federal .i.e:-).erve Bank stock is

Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

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transferred by operation of law, but that the certificate of stock of the

cozsolidating banks should. be surrendered and. a new certificate issued in

lieu thereof in the name of the consolidated. institution.

Noted with approval.

ilemorandum from Counsel, dated April 1st, submitting and corment-

ilIC On opinion rendered recently by the Circuit Court of Appeals in the

ease Of Crowell vs. Federal Jaserve Bank of Dallas.

Noted. and ordered. circulated.

Letter dated April 3rd from the Federal deserve Agent at Richmond,

transmitting Auditor's re-port on a shortage of .„;7,200 at the Baltimore

81*.alleht the responsibility for which has been fixed upon r2e11er dalter

3/1Ycler; the Agent stating that at the next meeting of the Board of Directors

°I* the Baltimore Branch, full details will be laid before that bocV, which

14 compliance with the law, will submit the matter to the District Attorney,

8.411clagh the bank is protected from loss by the bonding company and the

exliPloYee has been dismissed.

Upon moticrn, it was voted that the abovematter should be reported by the Board. to theDepartment of Justice in the usual manner.

Draft of circular letter to the Chairmen of all Federal reserveban.,

9 requesting that they furnish the Board with a statement giving

eerta-111 S-oeCifi al information for all rnernber banks which were borrowingi'rota

their respective Federal reserve banks during 1925, together with corn-

41e/itsas to the reasons for such borrowing and the probable period of its

• ecktilluance.

Upon motion, the proposed letter was approvedas amended.


4/6/26a.•081.

329

aeport of Committee on Salaries and. Expenditures, dated I.:arch

31st, referring to the Board's action of February 16th in voting that

the installation of a budget system should be recomerxled to the favorable

uonsideration of the three Federal reserve banks which do not now have such

all arrangement in effect; the Cormittee subnittin..7 and recommending approval

Of a ferill of letter on the subject to the Governors of the Federal 2..ese:cve

13ailks Of St. Louis, Kansas City and Dallas.

Appmved..

Report of Committee on Salaries and. Expenditures, dated April

1st, on the matter referred to it at the meting on Febru.ary 16th, namely,

the l'ecenzaend.ation of the iTovember 1925 Conference of Governors that all

11°cIera1 reserve bars should absorb at least enough of the expenses of

°13el'ating their cafeterias so as to fu.rnish employees a lunch at not to

eZeeea two-thinls of the out-of-pocket expense (i.e., cost of food. and.

aei‘v.ice) of providing those meals, with the understanding, of course, that

ill the discretion of the directors, this basis of charge might properlybp,

tzlodified so as to net special circumstances; the Committee (1) recom-

inellcliflg. that for the present, Federal reserve banks be authorized, to absorb

41:11)1'exirnate1y one-third. of the total cost of oirati:ck; cafeterias, as shown

111 the functional expense reports, and that the part of cafeteria ex-

1311se which is absorbed. by the Federal reserve banks should be treated asa c,

-1'rent expense, rather than as a loss to be 'charged to profit and. losst),a,

erld of the year, and (2) submitting draft of letter to the GovernorOf

-̀ "ea Pedero..1 reserve bank, setting forth the above recommendation and.

l'cillesting a statemnt outlining the plan under which cafeterias are being

ed by his bank.


1

4/6/26 -4-

After discussion, lir. Hamlin moved approval ofthe recommendations of the Committee and the proposedletter to all Governors.

1:r. Hamlin's motion being put by theChair was carried, lir. Liller voting "no".

330

llemorandurn from Counsel, dated April 5th, sutrnitting, in accordance

With instructions given by the Board on ::arch 23rd, drafts of letters to

te Pederal .-',eserve Agent at Kansas City and the Meadow Grove State Bank,

1:ead".,„

Grove, Nobraska, advising of a hearing to be held before the Board

at its offices in Vlashinston, at which representatives of the 2-.1eni)cr bank

are requested to alopear to show cause why the institution should not be

l'°(111.1 (1 to surrender its stock in the Fedex-al eserve Bank of Kansas

(atyaria to forfeit all rights and privileges of membership in the Federal

:e3erve System,because of its failura to maintain with the Federal 'Reserve

}38412, the reserve required by the Federal iieserve Act; the proposed letters

statin€ that in the event the mamber bank desires to waive its richt to

al3Dear before the Board, it my appear before the Federal eserve Agent,oz ,

uate to be fixed by him, to present such evidence as it may care to

have trananitted to the Federal Reserve Board, provided reasonable notice

941va11ce is given both to the Board and the Agent of intention to so

111)13ear,

Upon motion by LIr. Hanlin, the proposed letterswere approved, after April 27th had been fixed as thedate for the hearing before the Board.

Draft of circular latter to all Federal Reserve Agents, prepared in

—.̀ alle0 with authority gr'anted by the Board at the meeting on April 2nd,

't1111,7' that bej.nninf.7 with April 7th, weekly reports be furnished the


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B°arcl showing detailed figures of principal assets and liabilities for

ee'cil reporting mentor bank; the reports to include each item for which

figlires are received for mailer banks and also figures supplied from the

boolcsOf the Federal reserve bank along the F_;eneral style of the Board's

gla ar P 0 3:111 St. 51. The Governor stated that a letter had also been

13rePareci to the Federal Reserve Agent at New York, requesting certain

81)ecia1 info /mat ion desired under the resolution adopted by the Board on

1141'ch 4th, but recommended that this letter be not trananitted until after

the weekly reports requested in the above circular have been received and

ezarzilIed,

212cl

Upon motion, it was voted to approve theproposed circular letter, as well as the recom-mendation of the Governor that the special letterto the Federal Reserve Agent at New Yol'ic be with-held for the time being.

Lir. Cunninjiam then referred to the action of the Board on April

referring to the Comittee on District #7, letter dated March 31st

i'll°111 the Secretary of the Federal

4t the last meeting

01a°111 Confidential Secretary to the Governor, was appointed Assistant

2ecl'etalV of the Board of Directors,

th0 Secretary. Mr

ellbrnitted verbally its

has prevailed at

tar.141 Staff should be

Reserve Bank of Chicago advising that

of the Board of Directors of that Bank, Er. Arthur L.

to act in the absence or disability

. Cunningham, on behalf of the Board's Committee,

recommendation that no change be made in the practice

the Federal -Reserve Bank of Chicago, that the secre-

taken from the Federal Reserve Agent's Department.

After discussion, Mr. Cunningham movedapproval of the Committee's recommendation.


4/6/26 332

The motion being nit by the Chair was carried,the members voting as follows:

Mr. :liner "Aye"

Mr. Janes "Aye"Mr. Cumninjian "Aye"Mr. McIntosh "Aye"Mr. Platt "ITo"Mr. Hamlin "No"Governor Crissinger "Not voting".

After further discussion, Mr. Miller moved that aletter along the following lines be addressed to theFederal Reserve Agent at Chicago:

"Receipt is acknowledged of Mr. White's letter ofMarch 31st, advising that at the meting of the Boardof Directors of your bank, held on Fridaz,r, March 26th,Arthur L. Olson was appointed Assistant Secretary of theBoard of Directors, to act in the absence or disabilityof the Secretary. On reference to its records, theBoard finds that Kr. Olson is now carried on the rollsof your bank as confidential secretary to the Governor.The Board., mainly for the reason originally stated byit in its 'Outline of Organization', X-840, has doubtsas to the propriety of this appointment, aid I amtherefore instructed to notify you that it is not yetready to act upon it. You will be advised when theBoard. has taken action."

Mr. Miller's motion being nut by theChair was carried, Messrs. Platt and Hamlinvoting "No".

11r. Cunninjiam then reported that Mr. Cation, Managing Director

of 1-1,-""e Detroit Branch and maraber of the Building Committee, had called on

hita'I-is morning, and inquired regarding the em-oloyment of Mr. A. B.

TI‘cm7b iali--Ase as Consulting Architect for the Board in connection with the

E*°ction of the Detroit building. He stated tint they wished to have Mr.

'ridge act with their local architects in the preparation of plans.

Thereupon ensued a discussion as to the advisa-bility of the Board employing Mr. Trowbridge as consultant,in connection with both the Detroit and Baltimore Branchbank building projects. Attention was called to the fact


4/6/26 -7-

that the joint resolution, S. J. Res. 61, just adopted.in Congress, provides for an expenditure of ,)600,000for the Detroit building and. that the resolution pending,S. J. lies. 66, provides ;1,025,000 for the Baltimorebuilding, and. that on the basis of Mr. Trowbridge's pre-vious proTx)sal of a fee for his services, of 1,; of theamount authorized by Congress, such fee would amount,in connectioa with the Detroit and. Baltimore projects,to A6,250.

Following a discussion, Mr. James moved -

"That in view of the Congressional resolutions topermit branch Federal reserve bank buildings atBaltimore and. Detroit, it is the sense of theBoard that arrangements should be made to have Mr.Trowbridge act as consulting architect in the pre-mises and that the Governor be authorized to opennegotiations looking toward. the possible an-plovmait

of Mr. Trowbridge, under this resolution".

Mr. Miller sumestecl and Mr. James acceptedan amendment to the above resolution, by which thefollowing was added:

"The total charges not to exceed 40,00.0 for bothprojects."

Mr. Janes' motion as an ended being putby the Chair was carried, Governor Crissinvrvoting "no".

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By unanimous consent, the Governor then submitted telegram dated

41)111 5th from the Federal Reserve Agent at San Francisco, replying to

the „Boarcl

_ _'s telegram of April 2nd, regarding the application of the Valley

tanz.Of Phoenix, Arizona, for permission to establish a branch de novo

at rescett; the Federal Reserve Agent's telegram reading as follows:

"Suggest Valley Bank Phoenix be permitted to establish branchat Prescott with strict understanding that inasmuch as State

Department is not prepared to make simultaneous examinations ofhead office and. branches the Federal eserve Bank in the futureWill undertake to conduct according to boards regulations atleast one such examination each Jear the cost of which must be


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born by the bank. With number of branches now in opera-tion we are prepared to conduct such an exanination ofValley Bank at a cost approximating two thousand.. In myopinion establishment of proposed branch will promotePublic interest and convenience owing to recent failuresat this point."

Mr. Platt moved approval of the recommen-dation of the Federal Reserve Agent that the ValleyBa./f, of Phoenix be irnittod to establish a branchat Prescott with the strict understanding that theFederal Reserve Bank of San Francisco in the futurewill undertake to conduct at least one simultaneousexamination of the institutions each year, the costOf which must be borne by the bank.

Mr. Platt's motion being put by theChair was carried, Mr. James voting "no".

The minutes of the meeting of the Federal Reserve Board. held on

413111 2nd. were read and a.pproved.

1-3.,-PiZg.,.4a3 OF STANDING CO:ZIITTEES:

t ed. -April 2nd.

3rd.5th

a.tec1 A.pria 6th

ki,provea:

33,1

lecoramending changes in stock at Federal reserve banks,as set forth in the Auxiliary Minute Book of this date.

Approved.Aecommending action on applications for admission ofState banks, subject to the conditions stated. in theIndividual reports attached to the applications, asset forth in the Auxiliary liinuto Book of this date.

Approved.

The meeting adjourned at 1:00 P.M.

Assistant Secretary.

Governor.


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19260406_Minutes.pdf