meeting minutes, january 21, 1928, volume 15, part 1 · letter dated january 19th from the chairman...

59

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

Psderal Reserve Board on Saturday, January 21, 1928 at 11:00 a.m.

PRESENT: Governor YoungMr. PlattYr. HamlinMr. MillerMr. CunninghamMr. Eddy, SecretaryMr. McClelland, Asst. Secretary

The minutes of the meeting of the Federal Reserve Board held an

jelitlerY 18th were read and approved.

Letter dated January 18th from the Chairman of the Federal Reserve

4111c of St. Louis, advising of the election of Mr. John W. Alderson, Vice

?resident of the Bank of Eastern Arkansas, Forrest City, Ark., as a di-

'")r of the Memphis Branch for the unexpired term of Mr. J. W. Vanden,

cle°eased, ending December 31, 1928.

Noted.

Letter dated January 16th from the Chairman of the Federal Reserve

114tikOf Dallas, advising of the re-election of Mr. B. A. McKinney as mem-

ber of the Federal Advisory Council from the Eleventh District during the

4rear 1928 and the appointment of Mr. W. E. Connell as alternate member of

tIle Council.

Noted.

Memorandum dated January 20th from the Chief Examiner, recommending

the slopointment, under authority previously granted, of Mr. W. D. Dougal

48 Assistant Examiner at a salary of „i2,500 per annum, effective February

16, 1928,

Approved.

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

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Report of Executive Committee on letter dated January 19th from the

4cting Comptroller of the Currency, recommending approval of a salary of

4P0,600 per annum for National Bank Examiner John A. McMullan, assimed to

the Fifth Federal Reserve District; the Board's Committee also recommending

approval.

Approved.

Report of Committee on Salaries and Expenditures on letter dated

jarluary 16th from the Governor of the Federal Reserve Bank of Minneapolis,

IkIvising that subject to the approval of the Board Mr. L. C. Danielson,

all employee of the bank, has been granted a 90-day leave of absence on

aceftit of illness with full pay; the Board's Committee recommending ap-

proval of the salary payment involved.

Approved.


aalluary 18th from the Chairman of the Federal Reserve Bank of Boston, ad-

of the action of the board of directors of that bank in votin,3 to

e tend until their next meeting, with half pay, leaves of absence on ac-

Of illness previously granted Mr. Joseph Buckley and Miss Dorothy

II° Roberts, employees of the bank; the Board's Committee recommending

ePproval of the salary payments involved.

Approved.


jallilarY 17th from the Secretary of the Federal Reserve Bank of Atlanta,

4avising that subject to the approval of the Board the directors have

Iroted to appropriate 46,850 for welfare and educational purposes through


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the Federal Aeserve Bank Clubs at the head office and branches during

1928; the Board's Committee recommending approval.

Approved.


January 17th from the Deputy Governor of the Federal Reserve Bank of

New York, transmitting list of employees for whom the directors of the

barik have

the month

approved leaves of absence with pay on account of illness during

of December 1927, where the total of such absences since January

1, 1927 has exceeded thirty days; the Board's Committee recommending ap-

Proval of the salary payments authorized by the New York directors.

21pproved.

Telegram dated January 18th from the Chairman of the Federal _eserve

Batik of Boston, letter dated January 19th from the Secretary of the Fed-

eral Reserve Bank of New York and telegram dated January 3)th from the

°Ilairman of the Federal Reserve Bank of Philadelphia, all advising that

the boards al directors at their last meetings made no changes in the

1344ks' existing schedules of rates of discount and purchase.

:Athout objection, noted with approval.

Telegram dated January 19th from the Secretary of the Federal

eserve Bank of San Francisco, advising that due to lack of a quorum

40 r110:3ting of the board of directors of the bank was held on that date.

Noted.

Letter dated January 19th from the Chairman of the Federal

Ieeerve Bank of New York, advising that the board of directors have

411thorized the emoloymont of an assistant to the ...onager of the Buffalo


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Branch at a salary not to exceed „I;6,600 per annum and inquiring whether

this action meets with the approval of the Board; the Chairman stating

that the officers of the New York bank for some time have felt the need

01 strengthening the official staff at the Buffalo Branch and that the

resignation of Mr. E. L. Theobald as Assistant Cashier, which becomes ef-

fective February 15, 1928, furnishes an opportunity to meet the situation.

After discussion, the above letter was referred

to the Governor with power.

Letter dated January 19th from the Chairman of the Federal deserve

Ballk of New York, advising that on January 17th the bank made final pay-

and took title to the Manufacturers and Traders Bank Buildin, which

wasacquired under authority granted by the Board on January 25, 192

6 for

the Purpose of housing the Buffalo Branch; the Chairman stating that the

ctilisctors have now voted to authorize certain alterations, at a cost not

to exceed ,80,000, which are necessary in order to make the building suit-

able to the requirements of the Branch.

Upon motion, the action of the New York directors

was approved.

Letter dated January 16th from the Chairman of the Federal iteserve

Ballk Of Dallas, advising that subject to the approval of the Board the

ectors of that bank have voted to accept bids totaling „165,137.00

(3/rering four major contracts in connection with the erection of a build-

to house the San kntonio Branch under plans and specifications ap-

131%°.7ed. by the Board on November 4, 1927; the Chairman stating that this

Ilti°11 Was taken on the basis of an estimate by the bank's Building Com-

tilittee that the total cost of the building, includin architects' fees,


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will be about ,478,000 and will not exceed .180,000.

Referred to the Committee on District tn.

Draft of reply to letter dated January 11th from the Federal Reserve

Agent at Kansas City, with respect to the desire of the Conqueror Trust

ComPanY, Joplin, Mo., a state member bank, to surrender its stock in the

Fecleral ReserveBank of Kansas City, since it has disposed of its entire

coMmc)rcial banking business to the newly organized Conqueror First National

114111k of Joplin; the proposed reply stating that although the Conqueror Trust

ec)raPanY may surrender a proportionate amount of its stock in the Federal

lesel've Bank based upon a reduction in its capital incident to the disposi-

ti()'11 Of its commercial business, the only way in which it could surrender its

elitire holdings of stock in the Federal Reserve bank, except after a regular

In°nths' written notice of intention to withdraw from the System, would

bethe trust company had violated some provision of the Federal Reserve

Act and forfeited its membership after hearing in the usual manner under

8ectiOn 9 of the Federal Reserve /lot.

In connection with the above matter, Messrs. Platt and

Hamlin, members of the Law Committee, expressed the viewthat some method might be legally arrived at %,hereby a

state bank desiring to surrender its membership in the Fed-eral Reserve System, could do so, if there was no objectionO n the part of the Board, without the necessity of filing

Six months' notice of intention to withdraw and waiting untilthe expiration of that notice for the cancellation of its

xederal Reserve bank stock.

After discussion, the proposed letter to the Federal deserve

Agent at Kansas C5ty was referred to the Law Committee with the

request that the Committee take up with the Board's Counsel the

Matter of formulating some legal procedure whereby Federal Res-

erve bank stock held by a state member bank might be surrendered

with the approval of the Board, other than by voluntary withdrawal

Irom the System after formal notice.


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Letters dated January 10th and 11th from the Deputy Governor of the

l'ederal Reserve Bank of New York, with reference to gold movements during

tile Year 1927 and the first ten days of 1928 and transmitting a detailed

table Of gold imports and exports between the United States and various

1*(Ille igla countries and of gold ear marked and released from ear mark for ac-

of various countries.

The above letters having been circulated among the

members of the Board, were noted.

Memorandum from Counsel dated January 19th with reference to the

Clan en Act application of Ur. Victor S. Fisher, involving the Pacific

41reillle National Bank and the Atlantic Safe Deposit and Trust Company, both

Of Atialltie City, N.

Nftsel stating that

J. which was refused. by the Board on May 3, 1927;

although the Board on July 12th voted to permit

l'ishar to submit additional evidence in support of his application and

allch evidence was subsequently furnished the Board, he is still of the

°Pilltpla that the banks

'lac. toNmael

involved are in substantial competition and is un-

recommend that the application be approved. In his memorandum

recommended, however, that the Board defer taking any further

11013. on Mr. Fisher's application until it is determined whether the

4111414dment to the Clayton Act recommended by the Board will be enacted

4tI1e present session of Congress, since under this amendment, if it

be`quea law, the Board will be authorized to approve an application if

114 tile judgment of the Board such action would not be incompatible with

theNblic interest.

Upon motion, in accordance with Counsel's recommenda-

tion, it was voted to defer action on the above application.


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Report of Law Committee on Clayton Act application of Yr. C. G.

111"89 involving the First Joint Stock Land Bank and the Whitney-Central

Trust and Savings Bank, both of New Orleans, La.; the Committee recommenaing

a Proval of a suggestion of Counsel that since neither institution is a mem-

ber C)f. the Federal Reserve System and the Board has no power to grant the

414/11cation, action thereon be withheld until it can be determined whether

theame ndment to the Clayton Act recommended by the Board will be passed at

thGPresent session of Congress, as the amendment, if enacted, would crive

the Board power to approve applications of this kind.

Upon motion, in accordance with the recommendation

of the Law Committee, action on the above application

was deferred.

Memorandum from Counsel dated January 19th with reference to the

eleYto4 Act application of Ur. W. H. Belk, involving the Charlotte National

the Merchants and Farmers National Bank and the Independence Trust

4t1113441, all of Charlotte, N. C.; Counsel (1) Stating that from the evidence

ellItatted with the application it appears that the three institutions in-

1434ed are in substantial competition; (2) Recommending that the Board

tlhilr*rarily refuse the application with the usual opportunity to the ap-

Plicant to furnish additional information in support thereof, and (3)

""nding that the applicant be advised that he must notify the Board

twenty days whether he desires to furnish additional Information,

1'44 the understanding that if the Board is not notified within that time,

Its refusal will become final.

Upon motion, in accordance with Counsel's recommenda-

tion, the above application was temporarily refused.

13414tLetter dated January 18th from the Chairman of the Federal Reserve

°I' St. Louis, advising of the action of the directors of the Federal


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eserve Bank of 3t. Louis in voting to exercise an option, ::hich expires

February 28, 1928, for the purchase at a price of •r 100,000 of a property

at the northwest corner of Jefferson Avenue and Third Street, Memphis,

fronting 80 feet on Jefferson Avenue and running 3.48i- feet on Third Street;te

Ohairman also advising that the directors have voted, subject to the ap-

131‘°val Of the Board, to erect on this site a building to house the Memphis

Branch at an estimated total cost of not to exceed .A50,000, including the

c°8t Of land, building, vault construction and equipment, fixed machinery

all°1 equipment, and furniture and fixtures. In his letter, the Chairman

13(3111ted out that the lease of the present quarters of the Branch expires

St 31, 1930 and can not be renewed except at an increase of „;8,900 per

1111411M over the present rental, which it is estimated will increase the

cost of operating the rented quarters after September 1, 1930 to

'g4,941.61.

Discussion ensued during which the Governor re-

ported receipt of a letter from Mr. James recommending

approval of the action of the directors of the St. Louis

bank.

Following the discussion, it was voted to approve

of the purchase of the property above referred to at a

price of not to exceed „400,000.

It was further voted that the proposal of the St.

Louis directors for the construction of a building on

the property in question be referred to the Committee

on District 113 for report.

an-

he Jecretary then submitted a telegram dated January 21st from the

4110r of the Federal deserve Bank of Atlanta, advising that the Havana

r'(311eY Of that bank is required by Cuban law to return a tax of upon

itsProfits; the Governor stLtinL. that the Agency will show a

profit of


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about 11,000 and that unless the Board deems it inadvisable the i'...anager of

tIle Agency will be instructed to make a return and pay the tax.

After discussion, lIr. Hamlin moved that the Secretary

be authorized to advise the Federal aeserve Bank of Atlanta

that the Board approves payment of the tax, if after inquiry

Of the State Department it is determined that there is no

treaty or understanding between the United States and Cuba

by reason of which the tax should not be paid.

The Secretary then presented a telegram dated Jaluary 20th from the Chair-

rnall °f the Federal 'deserve Bank of Chicago, advising that the executive corn-

rIlittee under implied authority of the board of directors on that date voted

to establish a rediscount rate of 4,; on all classes of paper of all maturities,

oil'ective the first business day following that on which approved by the

er iieserve Board and stating that January 24th is their preference as

to the date on which the new rate should be effective. In this connection

he also read a letter from the Chairman of the Chicago bank, just received,

c°11firming his telegram and commenting on the action of the executive com-

Mittee Of the bank. The Governor stated that he has arranged for all mein-

bel'e Of the Board, except Mr. James, to be present at a meeting to be held

°4 TilesdaY, January 24th, at which the action of the Chicago bank will be

fc3111Y considered.

An informal discussion then ensued of the rediscount

rate and money market situations, during which the Vice

Governor reported a telephone conversation with the Acting

Chairman of the Open 1:arket Investment Committee during

which he was advised that arrangements have been made for

delivery today of the .25,000,000 of securities previous-

ly reported to the Board as having been sold from the

System account for delivery next 1:_onday.

The Governor stated that he has received and is cir-

culating among the members of the Board a letter from the

Acting Chairman of the Committee setting forth changes

which have taken place in the security holdings of the

System since the first of the year.


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REPO,iTS OF STANDING COMMITTEES:

Dated,

Da t e d.

Da t e d

Dated,

Dated.,

Dated,

Dated.,

January 19th, Recommending changes in stock at Federal Reserve

20th, banks as set forth in the Auxiliary Minute Book

of this date.Recommendations approved.

January 16th, Recommending approval of the application of Mr.

F. C. Kaths for permission to serve at the same

time as director of the National Bank of Topeka,

Topeka, Kansas and as director of the Exchange

National Bank, Hutchinson, Kansas.

Recommendation approved.


G. A. Kelley for permission to serve at the same

time as director of the Union National Balk,

Houston, Texas, as director of the Guardian

Trust Company, Houston, Texas and as director

of the Lufkin National Bank, Lufkin, Texas.



James P. Gardner for permission to serve at the

same time as Vice President of the Hanover National

Bank, New York, N. Y. and as director of the Mont-

clair National Bank, Montclair, N. J.



Walter H. Rossmassler for nmission to serve at

the same time as director of the National Bank of

Germantown, Philadelphia, Pa. and as director of

the Bank of North America and Trust Company, Phila-

delphia, Pa.Recommendation approved.


Edgar B. Ober for permission to serve at the same

time as director of the Merchants National Bank,

St. Paul, Minn. and as director of the National

Exchange Bank in St. Paul, St. Paul, Minn.



Lotus D. Coffman for permission to serve at the

same time as director of the Third Northwestern

National Bank, Minneapolis, Minn. and as director

of the Marquette Trust Company, Minneapolis, Minn.



Frank W. Yager for permission to serve at the

same time as director of the College Point National

Bank, College Point, N. Y. and as director of the

jueensboro National Baak, Corona, N. Y.



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OF STANDING COMMITTEES: (Cont,d)

Datecl, January 20th, Recommending approval of the application of Mr.

Robert Billings Rugg for permission to serve at

the same time as director of the Gloucester

National Bank, Gloucester, Mass. and as Vice

President of the National Rockland Bank of Boston,

Mass.Reconimendat ion approved.

The meeting adjourned at 1:00 p.m.

Secretary.


meeting minutes, january 21, 1928, volume 15, part 1 · letter dated january 19th from the chairman...

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