19240116_Minutes.pdf

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

Federal Reserve Board on Wednesday, January 16, 1924, at 11:25 a.m.

PRESENT: Governor CrissingerMr. PlattMr. HamlinMr. InnerMr. JamesMr. GunninjiamMr. Eddy, Secretary

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

January 15th were read and approved as amended.

The Governor stated that special order of business would be consider-

ation of the matter ordered circulated at the meeting an December 27th,

namely, a memorandum dated December 18th from Counsel su7gesting a form

Of letter to the Federal Reserve Agent at St. Louis in reply to his let-

ter of October 22nd on the subject "Discount of Sight and Demand Bill

Of Lading Drafts";the proposed letter stating that pending the issuance

Of a comprehensive ruling or statement of policy on this subject, the

Federal Reserve banks should use their discretion in passing upon the

eligibility of bill of lading drafts offered for discount under the

amendment of March 4, 1923, to Section 13 of the Federal Reserve Act.

After discussion, upon motion by Mr. Hamlin,

the proposed letter to Mr. Martin was approved.

Letter dated January 1st from the Comptroller of the Currency,

recommending an increase from .)5400 to 6.5o0 per annum in the salary of

National Bank Examiner B. K. Patterson.

Approved, effective Janmary 16, 1924.

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

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Letter dated January 15th from the Chairman of the Federal Reserve

Bank of Nov.' Yolk, advising of the action of the directors of that bank

In making an appropriation to be used by the Federal Reserve Club for

approved educational purposes for the year 1924 amounting to 37,420.

Approved.

Telegram dated January 15th from the Federal Reserve Agent at

San Francisco, transmitting the application of the American Bank of San

Francisco for the Board's permission to consolidate with the American

Bank of Oakland, a non-member bank, to take over the branches of the

American Bank of Oakland and to operate under the name and corporate

organization of the American Bank of San Francisco; the Federal Reserve

ksent advising that both he and the Executive Committee recommend ap-

proval.

Referred to the Committee on Examinations.

Letter dated January 9th from the Federal Reserve Agent at

Chicago, transmitting copy of a letter addressed to him by the Assistant

Federal Reserve Agent at Detroit, regarding the Northwestern Finance

Corporation of America which is advertising that it is "Officially

recognized by the Federal Reserve Board".

Referred to Counsel for the preparation of a

letter of cen:mre.

Letter dated January 9th, from the Chairman of the Federal Reserve

Bank of Boston, sum;esting that the Board limit the right of Federal

Reserve barks to pledge as collateral for Federal Reserve notes


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bills bought in the open market, such right to be exercised only upon

the approval of the five members of the Board.

Referred to Committee on Discount and Open

Llarket

Letter dated January 14th, from the Governor of the Federal Reserve

Bank of Yew York replying to the Beard's letter of January 3rd, with ref-

erence to the liability of Federal Reserve banks in the event of payment

Of bonds and coupons of Federal Land banks contrary to instructions.

Referred to Law Committee.

Letter dated January 11th, from the Under Secretary of the Treas-

IlrY transmitting letter from the Associated Builders of Kings County, In-

corporated, Brooklyn, New York, stating that banks in the Second Federal

Reserve District are discriminating against builders' paper for the reason

that they can not rediscount same at the Federal Reserve bank.

Referred to Counsel for the preparation of a

reply.

Letter dated January 12th, from the Chairman of the Federal Reserve

Bank of Chicago commenting upon general conditions in the Seventh Federal

Ileserve District.

Ordered circulated.

Letter dated January 15th, from the Chairman of the Banking and

Currency Committee of the House of Representatives requesting an expression

Of the Board's opinion on H. R. 3227, a bill designed to amend Section 5202

Of the United States Revised Statutes, referring to liabilities of National


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Banking Associations.

Referred to the Law Committee.

Letter dated Janu ry 10th, from Mr. 77. 2. Adams of Salt Lake City

with regard to the employJent by member banks of former managers or

assistant managers of branch Aderal Reserve banks.



Bank Of St. Louis, replying to the Board's letter of January 2nd regarding

the action of the Drovers' National Bank of East St. Louis, Illinois, in

rediscounting paper emanating from non-member banks but not bearing the

indorsement of such non-member banks.


Letter dated January 8th, from Mr. John W. Davis enclosing a state-

/tent 'of his account for services in the par clearance cases, amounting to

Referred to the Law Committee, with instructions to

the Secretary to prepare a memorandum of previous action

by the Board in connection with the emuloyment of Mr.

Davis.

Letter dated January 11th, from the Assistant Attorney General,

advising that the Grand Jury has failed to return an indictment against

SidneY 3. Jalzman, a former employee of the Federal Reserve Bank of New

York, for possible violation of the criminal provisions of Section 5209 of

l evised Statutes.

Noted.


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Letter dated January 9th, from the Assistant Attorney General,

advising of the conviction of Edgar F. Hiatt, formerly President of the

Dickinson Trust Company of Richmond, Indiana, a member bank, and stating

that the attorney for the defendant raises the question whether a state

bank or trust company has power to subscribe for stock in a Federal

Reserve bank and whether Congress -exceeded its power in attempting to

exercise control over such banks.


Letter dated January 15th, from the President of the Federal

44visory Council, advising that the next meeting of the Council will be

held in 7,ashington on Monday, Febmary 18th, 1924, and requesting that the

Board advise him of any topics which it would like the Council to discuss.

Referred to the Executive Committee

for preparation of a list of topics.

Letter dated January 14th, from the Chairman of the Committee

O m Banking and Currency of the Senate, requesting the views of the Fed-

eral Reserve Board with regard to Senate Joint Resolutions 3 and 51,

authorizing the Federal Reserve Bank of Kansas City to invest ;"650,000 each

it the construction of buildings for its branches at Denver and Omaha.

Referred to the Committee on Branches.

Letter dated January 15th, from the Deputy Governor of the

.?ederal Reserve Bank of New York, enclosing copies of correspondence with

the Reichsbank in Germany concerning the amount of German capital in the


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United States and in other foreign countries.

Noted, no action by the Board being necessary.

Letter dated January 15th, from the Third Assistant Postmaster

General with regard to the preparation of registered.matter for mailing,

calling particular attention to the proper method of attaching address

tags to sacks containing registered matter.

Referred to the Secretary for investigation

and report.


Bank of Richmond, enclosing copies of a report of the officers of the

Bank to the board of directors in the matter of the establishment of a

branch in the southern portion of the District.

Referred to the Committee on pranches.

Lotter dated Oanu_ry 7th, from the Governor of the Federal Reserve

Bank of San Francisco with regard to the legality of the acceptance by

the National Bank of Commerce, .Seattle, Vihshington, of a draft of the

clrahoma Specie Bank for the purpose of raising funds to finance the

ezportation of goods.

Referred to the Law Committee,

Mr. Hamlin stated that in accordance with authority given him at

the meeting yesterday he had communicated with Ur. Edmund P. Cohill,

°t Hancock, Maryland, who had signified his willingness to serve on the

bOard of directors of the Baltimore Branch of the Federal Reserve Bank


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Of Richmond.

Mr. Hamlin moved that Mr. Cdhill be appointed a director of the

Baltimore branch and that notices of appointment now be sent both to him

and Mx. Matthai.

Carried.

The Governor then presented a telegram dated January 16th,

from the Federal Reserve Agent at Dallas advising of plans for the

organization of the Albuquerque National Bank, Albuquerque, New Mexico,

With capital of c>500,000 and requesting Board's approval of procedure

Whereby the El Paso branch will receive on deposit ,250,000 of new capital

Pending issuance of charter and authority to begin business.

Upon motion by Mx. Hamlin, it was voted to

approve the arrangement subject to the aproval of

Counsel.

The Governor then brought up the matter held over at. the meeting

Yesterday, namely, the following resolution offered by Mx. Cunningham:

"MERE/1_3 it is deemed desirable for the Federal Reserve

Board to be in possession of the fullest possible information

with regard to the officers and minor employees of the Federal

reserve banks and Federal reserve branch banks and with regard

to the official duties of such officers and employees, the

work performed by them, and the salaries paid to them; and

1rnREAS, it is manifestly desirable to improve as far as

possible the efficiency of the Federal reserve banks and branch

banks and at the same time to bring about the strictest economy

in the operation of such banks and branch banks;

NOW, 2HEREFORE, BE IT RESOLVED by the Federal Reserve Board

that the Conraittee on Salaries and Expenditures be authorized

and empowered to make a complete survey for the purpose of ascer-

taining the numberof officers of the various Federal reserve banks


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"and branch banks, the duties performed by such officers

and the necessity for such services; the number of am-

ployees of such banks and branch banks, the character

of services they are rendering and the necessity for

such service; and the total overhead expenses of the

various Federal reserve banks and their branches;

BE IT eURTHER RESOLVED that the Committee on Salariesand Expenditures is hereby authorized and empowered to

employ such experts and other assistants as it might

deem necessary for the purpose of procuring such data

and information as will enable it to be fully informed

on all matters involving the management, operation and

expenses of the various Federal reserve banks and branch

banks;

B2 12 FUR2,21ER RESOLV2aD that the Committee on Salaries

and Expenditures is hereby directed to make such recom-

mendations as in its Judgment will improve the efficiency

of the operation of such Federal reserve banks and branch

banks and will be instrumental in brirgionzabout and main-

taining the strictest economy commensurate with efficient

service.

BE IT FURTILR IrUSOLVED that the Committee on Salaries

and Expenditures is hereby directed to report its findings

and recommendations to the Federal Reserve Bcyaid not later

than November 1, 1924."

ILfter discussion, Mr. Hamlin moved that the resolutions offered by

11r. Cunningham be amended by adding a proviso that the Committee on Salaries

and Ilbcpenditures shall incur no expense without the direct vote of the Fed-

eral Reserve Board.

Mr. Hamain's motion being put by the chair ms

carried, Mr. James not voting.

Ur. Hamlin then moved that the Board adopt the resolutions as amended.

Mr. Hamlin's motion being put by the chair was

loot, the members voting as follows:


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Governor erissinger, "no"Mr.. Platt, "no"Mr. Hamlin, "aye"Mr. Cunningham„ "aye"Mr. Miller not votingMr. James not voting

ZaORTS OF STAB:JUNI COLIMTTEvS:

Dated, atnuary 16th, Reconnending changes in stock at Federal Reserve

banks, as set forth in the Auxiliary Minute Book

of this date.Approved.

The meeting adjourned at 1:00 p.m.


19240116_Minutes.pdf

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