19250319_Minutes.pdf

A mooting of the Federal :deserve Board was held in the office of the

-Federal deserve Board. on Thursday, March 19, 1925 at 11:05 a.m.

PAEJ2,NT: Governor Crissinc,-er

iir. Platt:th.r. Hamlinthr. Miller1,1r. Jamesthr. Cum. in -f.rlamMr. 2,ddy, ,..iecnAary

PA:ZENT ;ISO: Dr. Jtewart, Lirctot.. of the _Division

of ..iesearc,.h and. Jtatis tics.

?ho minutes of the meeting of the FeJeral deserve Board held. on

March 16th were read. end. approved..

The Governor stated. that had ho been pmsent at the meeting he would

have vote," against the motion to instruct the Vice Governor to prepare. a

letter to the Comptroller of the Currency, alvising him that in the olAnion

Of the Board names similar to those used b former national ban.1,-,:s should

t 1)0 r7iven new national banks within less than five, and. certainly not

less than three, years after the date of the cloz -InL.: of the lp..21.-ks original-

)y havin such names.

Dr owart then presented. the trend. of the baakig ard business

situation daring 2 ebruary and the first part of March., . .

Letter dated March 16th from the Deputy Governor of the Federal

deserve Bank of New York, advising that it has recently earnarked for the

.Z2nbassy an additional „1,500,000 in United. Jtates L:old coin, the

total L,.2-nount earmarked .or the -2,.."•nbassy now being' ,,;5,000,000.

Noted.

Letter dated March 17th from the Chairman of the Federal Lciserve

Bank of ..lichmo,A, affivisin,,_; that the data re,..iaested b-,), the .;oa.rd with respect

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

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to the cost o the proposed branch. -:)f the Federal .deserve 3t.ulk in the south-

western portion of its District is being prepared by a special committee

and would be submitted to the Board following the april meeting of the 3oard

Of Directors of the .3ank.

Noted.

Aeport of ....;xecutive Committee on letter dated. idarch 12th from the

eu.eral .ieserve gent at Jan Francisco, recommendinc arova1 of an aTyplica-

tion of the First National ;a2.-,1k of liillyard, recently annexed. to the city

Of Cpokane, ,,ashin:,ton, for a reduction in its reserve revirements from

of demand deposits to 7i; of demand deposits under the provisioas of

jection 19 of the Federal AJserve act; the Committee also recommending

approval.

approved.

deport of' Committee on ;3.1aries, ..;xpenditures and lifficiency r - --,--,r-

riLE; to letter dated. March 11th from the Controller of administration of

the Federal deserve 3auic of Chicago, and recommending aoroval of the action

Of that bank in om1oing r. urover iiinehart, for servic:e in c'tanection

viith claims ‘.7.4' failed. member banks, at a salary of v4,000 for annum, ef-

fective Febr.ILry 1, 1925.

approv

Lottr dated March 17th from the Chairman of the Federal deserve

,-anr: of atlanta, transmittinn the resination of 1,1r. JosoLh a. Chapman

Of Colurrbia, I2ennesseo, as director of the lishviile Branch of the Federal

deserve Sank of atlanta, effective immediately.


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Upon motion by Mr. Hamlin, it was voted to

accept the resignation of Mr. Chapman and to

refer to the Committee on District #6 the matter

of the appointment of a director to fill the

vacancy:

Memorandum dated March 17th from the i*tcting Comptroller of the Cur-

rency, with reference to the application of the Broadway liLtional Bank of

Paterson, N.J., in process of organization, for permission to exercise

trust pacers when chartered; the Acting Comptroller stating that he knows

Of no reason why the Board should treat this application as an exception

to its general policy that newly organized national banks should not be

given immediately the privilege of exercising trust powers.

Mr. Platt then moved that the application .of the

Broadway National Bank of Paterson, New Jersey, for

trust pacers be held pending an examination.

Carried.

Letter dated March 16th addressed to the Comptroller of the Currency,

Tared by the Vice Governor in accordance with action taken at the meet-

ing on March 16th, advisin that in the opinion of the Board a name similar

to that used by a former national bank should not be given a new national

bank for a period of five or certainly not less than three years after the

date of the closing of the bank originally having such nane.

After discussion, Mr. Miller moved approval of

the proposed letter.

Lir. Miller's motion being rut by the

chair was carried, Golvirnor Crissinspr

voting "no".

The Governor then presented the matter on which action was withheld

at the meeting on March 16th, namely, the application of the New First


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3/19/25 -4-

National Bank in Oakland, California, for stock in the Federal Aeserve

Baalk, of San Francisco.

Upon motion by Mr. Hamlin, it was voted to approve

the arplication, effective if and when the Comptroller

of the Currency issues to the tank a certificate of

authority to commence business.

Draft of telegram to the Federal Reserve .Agent at Jan Francisco, as

follows:

"Board in receipt following telegram from Comercial

Trust (3; Savings Bank Oakland: 'This bank is in process of

conversion to a national bank association to be known as

the New First National in Oakland and has been approved

by the Comptroller of the Currency stop Vie are doing a trust

business and confidentially expected to continue our trust

department and were not advised of the requirement of a

twenty percent reserve fund until after approval of the

Comptroller of conversion Stop ';;ould you give consideration

to a special ruling in our case otherwise we will be com-

pelled to discontinue our trust derartment Stop Our surplus

now twenty-five thousand'. Please comunicate with bank, have

it file application with you and wire Board your recommenda-

tion. 3oar(1. would be inclined to waive surplus requirement

if for no other reason application should be disapproved."

.itfter discussion, Mr. Hamlin moved approval

of the telegram wit-o. the omission of the last

sentence.

Carried.

Lotter dated March 5th from the Federal Reserve ,gent at Jan Francisco,

illquiring whether in view of circumstances stated the Board would be disposed

to reconsider the application for membership of the Federal Trust and Savings

1344k of Hollywood, California, which was disapproved by the Boarc. on Septamber

6, 1923,

Upon motion by Mr. Miller, the letter was

referred to the Conrmittee on Examinations.


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Letter dated March 10th from the Federal Aesc-rvo .i'isrerit at :,:inn.caeolis,

liquirins" as .7,0 the possibility of cancelling the memb - rship of the 2armers

and Merchants State Bank of Heckla, S. D. which is in an insolvent condition

and the paper of which is of such character that it would. be impossible to

restore the bank to solvency.

deferred to the Law Committee.

deport of Committee on District ;42 dated March 17th, sur7gestinc- the

appointment of Mr. 71. L. Valentine of „San :Karim), California, to fill the

ItacaLcy on the Board of Directors of the Los .,Adageles Branch ca-ased by the

resiC;nation of Mr. Henry B. McKee and. recoLlLending that telec-ram be sent to

the Federal deserve .gent at Ban Francisco, requesting him to ascertain

whether Mr. Valentine would be disposed to accept the appointment.

Upon motion of Mr. Hamlin, the recommendation

was approved..

Memo:and= dated I:arch 17th from tho 2.1ss1stant Secretary with refer—

etcto letter dated March 13th from the Federal deserve ..gent at Chic:3:p,

recommondin:: the authocization of Mr. L. HarriJ, an emrloyec of his de-

1Dartment, to 'iYn and act for the Federal deserve igent in matters of

clidinary routine in the absence or disability of both the ,,gent and his

4i3sistant; the ...ssistant .AcrAary recommendinc7 that Mr. Harris be desinated

by t0 Board. as L.cting ssis tent Fedet-al deserve 2;.gent at Chicago upon a

clerical rather than an official basis, and that he be empowered to sign

43 such and further that the 'Federal deserve agent be requested to forward

to the 3oard bond or Mr. Harris in an amount which will be cormensurate

'4Ith his ilicr.ased responsibilities.


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Upon motion, the recommendations of the Assistant

Jecrotary were approved and Mr. Harris was dosipmated

cting ;1ssistant Federal aeserve Agent for the remainder

of the current year.

Matorandum dated March 16th from the Secretary, submitting proposal

from the Albe.larle Investment Company, owners of the Otis Building, for

renaval of lease for space in that building at a rental of ,17,500 per

annum for a period of two years for 10,507 not square feet, or ,1.66 per

Square foot, and a proposal from the agent for the '2ransporttlon Building

for 10,000 net square feet for v20,250 per annum, or ,2,0a2-l per square

foot, oa a two or three year lease; the Secretary recommending acceptance

Of the proposal of the zabemarle Investment Company, with the understand-

ing that the new lease will be similar to the old one with the exception

that the Board will give sixty days' notice instead of thirty as provided

in the present lease.

Upon motion, it was voted to approve the recom-

mendation of the Jeer tary and to accept the proposal

for a renewal of the lease for space in the Otis Building.

Letter dated March 9th from the Governor of the Federal deserve Bank

Of Kansas City, transmittin,,, copy of letter addressed to the Nebraska Jtate

3ank, Ord, Nebraska, with regard to that bank's complaint a_ainst the 1rovi-

81on of the Federal Reserve Junk's check collection circular rosr,rvinr; "the

right to charge a member bank's account covering cash letters forwarded to it

`then at any time, in any particular case, it deems it nocessarj to take such

act 104".

Ordered circulated.

Memorandum dated March 10th from Counsel, roferria to letter dated


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zebruary 97th from the Chaiman of the Federal Ao'ierve Bank of Atlanta, re-

e;ardiac a petition for an ag'ency of the Federal eserve Bank at Miami,

.elorida, and requestiaz to be advised thother or not a plan could be ef-

fected whereby Federal .Ares;rve notes hold by the branches aad aT:ehcies of the

Atlanta bank as issued currency could be placed under the custody oif an of-

ficer or employee of the branch or agency deal nated as Assistant ,:ederal

Jieservo A7eut; Counsel stating that such a plan would not be a proper com-

pliance with the provisions of Jection 16 of the Federal deserve Act, but

that a, ,presentative of the Federal deserve Agent should not ho an affloyee

Of the Federal 2.eserve Bank or Branch but should be entirely independent

thereof.

After discussion, Mr. amlin moved that a

coy of Counsel's opinion bc, sent to t'le Chairman

of the Atlanta bank.

Carried.

Tc)13gram dated March 16th from the Chairman of the Federal eserve

Ba41c ofCan . -.rancisco, roquestin: an expression of the Board's onion con-

Corning a suggestion by th,: President of the Fed:ral Advisory Council that

each 2edoral Aeserve bank appoint on: alternate memoor of the 2e3e-ra1 Advisory

Coiiy •to SO:V3 in case of the inability of the resul..r mmher. jhe _ecretar

ID°t1ted out that two Federal Aeserve Banks - aidhmond and Dallas - at the be-

of year elected alternate members of the Federal Advisory Council

alla caged a%tention to an ojnion by Counsel for the Board dated March 27,

1919, that ualer the terms of the Federal _3s-rve Act there is no way in -Alich

a 2edoral ...-,.;arve bank may legally elect as alternate member of the Council.


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After discussion, Ir. Hamlin moved that

advice of this opinion be sent to the Jresident

of the Federal Advisory Council and to the

Chairmen of all Federal deserve banks.

. Carried.

The Governor then presented telegramsfrom all Federal deserve Banks,

regarding the resolution tentatively adopted by the Board on Larch 5th

reaffirming previous decisions authorizing the practice of purchase and

sale in the open market of bankers acceptances and goverament securities

by Federal Aeserve banks from and to banks and qualified dealers under

fifteen-day repurchase agreements.

The Governor also presented a letter dated March 13th from the Governor

Of the Federal deserve Bank of Kansas City, the only one objectin7 to the

Proposed resolution, pointing out the desirability of their continuing pur-

chases of government securities from Federal Land banks under repurchase

agreements for longer periods than fifteen dvs.

After discussion, Mr. HaTlin moved that the

Board formally adopt the motion tentatively ap-

proved on March 5th, with the understanding that

the Federal deserve Bank of Kansas City will be

informed that it may make application to the Board

for an exception in the case of government securi-

ties purchased from the Federal Land Banks.

Yr. Hamlin's motion being put by the

chair was carried, and the Motion of March

5th was formally adopted as follows:

"The Federal deserve Board reaffirms previous

decisions authorizing the practice, long continued,

of purchase and sale in the open market of bankers

acceptances and Government securities, by Federal

reserve banks from Ella to banks and qualified deal-

ers, under 15 day 'repurchase agreements', it being

understood that such transactions shall be open,


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"under similar facts and conditions, to all

Federal reserve banks with relation to banks

ald similarly qualified dealers in their res-

pective districts."

Report of Law Committee on letter dated March 13th from the Chairman

the Federal Reserve Bank of New York, transmitting unanimous recom-

mendation of the Board of Directors of that bank that the Board again

da4Y the application for general trust powers of the Liberty National

Bank in New York which was refused by the Board on October 7th, 1924;

the Committee also recommending that the application be again refused..

Upon motion, the recommendation of the

Committee was adopted and the application of

the Libort;,, National Bank in New York for

permission to e.:zercise general trust powers was

rejected.

LrItter dated March 16th from the Governor of the Federal Aeserve

3a111.7 of Boston, suggestinrs discussion at the forthcoming Governors' Con-

17 rence of the bill introduced by Conirressman McFadden at the last session

of ",;onf;ress (H.R. 8887) to amend the National Banking 4xt, and also of the

bill introduced by Mr. McFadden (H.. 12453) to repeal certain war time

amendments to the Federal Reserve ,Act.

Thereupon ensued a discussion during which

the members present expressed the opinion that

H. a. 8887 should not be made a subject of dis-cussion, but that the Conference should appoint

a committee to study and report on, before the

next session of ConLress, the question of What

amendments to the National Bank ,ict are necessary,

in order that national banks may be better enabled

to meet banking requirements and that the develop-

ment of the national banking system may more close-

ly follow the trend of banking development in the

country at large, so far as experience shows that

this development is along sound and strong linos.


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Memoranda dated February 13th a d -1,a,.ch 17th from Lessrs. James aad

Platt, resctively, members of the Board's special cou.Aittee on ion-Jash

Collections, with roCprd to the desLrability of curtailing this service

of the Federal deserve banks aal suf,c;estin:„ consideration of the following

regulation l'.1.ffective July 1, 1925, only such non-cash collection items as

are Pa;iable by or at member banks, or banks that are on the par remitting

hat of the 2oderal aeserve banks, or that are collectible tbrou-:,h Blearing

H011se .1.ssociations, hall be handled by the Federal deserve ..-;ystem".

;Liter discussion, the Jecrtary was instructed

to furnish cosies of the above men_oranaa to all

members of the Board paid to submit the report to

Jhairman of the Gov- rnors' Jonference for con-

3 lerat ion at the apnroachin; meeting.

.2he ',.iovrnor then presented the matters laid on the table at the

11.1(rting on 2ebruary 19, 1925, namely, the application of the Bank of Italy

for permission to purchase and establish a branch in the promises of. the41,11orican i•:ational Bank of Banta kna, ;z.ilifornia, the First 1,:at lanai Bank

°f 1 Oeutro (disapproved by the Board on March Gth, 2.923 and opened for

racon3idor tiou on ida;; 14- 1924 ) ; the 3tato 3'3.1E: of Venice, the Ban :erl and°

a777 --4.7s _bank end its branch at Na,ihall, the Banta -anica Boulevard Jtate

3a41 , rioll-„-wood, and the iircarlia Jav'no Bank (disaocoved hy the Board on

4Pri1 9, 1924).

Mr. liar:.11n moved that the Board reconsider

its action of .a.pril 9, 19B4 in votin_ to dis,:pirove

the applications of the Bank of Italy for branches

at Venice, .J an 2ernan3.o, io.e1ia1l, Iiollywood and

.i.readia •

Licss es . Platt an3_ James, :lac; Till) .I'S of

the Jonrnit tee on ..:..-,:arainations stated that they h<rild

no objec t ion to recons idera.tion.


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Mr. Hamlin's motion being put by the

chair ,-;as unanimously carried.

James stated that his reason for voting in favor of recons -1Thra-

atiell was because at the time the applications of the 3ank of Italy for

Permission to establish branches at Venice, Arcadia, Jan Fernando, 1;ewha1l

and liollywood were disapproved, one of the reasons for turning them down

as because of the insufficiency of examinations by the California Stat

Ba11:11:1112,' Department, while at the present tune the examinations of that

Departrnnt were considered satisfactory, a receAt examination of the 3

°f Italy by the California jtate BanktaL: Department having been accepted

by the an Francisco Bank and Uy the Federal 2.esarve Board. It is under-

stood that these applictions wore filed -prior to the date set for malAnE

thO Board's FLogulation rii" effective and that this action in no ":,-ay conflicto

With the said regulation which remains in full effect.

Thereupon the Governor stated that individual

action on the applications of the 3011k of Italy,

would be deferred until the poeting tomorrow.

OF STALIDII;d

ated, March lath,

Dated,

i)at

L'i.,rch 19th,

March lath,

Foecommen3Ln: changes

Banks, as set forth

of this date*Approved.

.aecorrnending action

powers as set forth

of this date.Al.Troved.

i.econonding approval of the

Benjamin F. .LJed to sera at

director of the Dallas liational Bank, Dallas,

2exas, as director of the First :National Bank,

Gorman, Texas and as director of the First

liational. Bank, aisin2 Jtar, 2exas.

Approved*

in stock at Federal Liesorve

in the Auxiliary Lanute Book

on application for filuciary

in the -Auxiliary Minute Book

application, of Lir*

the same time as


The meeting adjourned at 12:50 p


19250319_Minutes.pdf

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