19270617_Minutes.pdf

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maetillg of the Federal Reserve Board was hold in the office of the

Federal Reserve Boara on 2riday, June 17, 1927 at 11:1u a.m.

PI.C:SENT: Governor Crissinger

Lir. Hamlin

r. Miller

Jr. Jameslir. Cunningham

Eddy, Secretary

:Ai. McClelland, Asst. Secretary

The reading of the minutes of the metingpof the Federal .ieserve Board

held on June 10th, 13th, 14th, 15th and 16th was dispensed. with.

Telegram dated June 15th from the :;haillnan of the Federal eserve Bank

" Seaton, advising that the board of directors at their meeting an that date

14(le no change in the bank's existinp; schedule of rates of discount and par-

Chase.

Noted.

Telegram dated Juno 15th from the Chairman of the Federal :eserve Bank

" St. Louis, advisin• that the board of directors at their meeting on that

Clate Made no change in the bank's existin schedule of rates of discount and

PlIrchase.

oted.

Letter dated June 16th from the Assistant Secretary of the Federal

„ileac)rve Bank of :ow York, advising that the board of

directors at their meeting

°II that date made no change in the bank's existin:; schedule of rates of discount

44a rJurchase.

Z\laerai

Matter a.:Troved on tnitials this morning, namely, te1e4ram to the

eserva 11.!;ent at Chicago, referring to the Board's letter to him of

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

550

11)

6/17/n

DecelAber 10, 1926, reqiestin: a report on an experiment to be conduct-ed daring

the first six months Of 1927 at the Detroit Branch of carrying Federal ;eserve

11°tes as ball:: cash; the telegram in„uirias- whethJr he can file prior to July

lst a report covering the first five months of 1927 in order that the D)ard

determine before that date what is to 'so the status of the position of

4e5istant Federal !eserve .k.,ent at the Branch.

Formally appL'ovod.

21eort of Committee on ialarIes and Exl:enditures on letter dtted June

13t4 -Irom the Federal iteserve A41;ent at Cleveland, requesting approval of the

transfer of :,:r. F. L. Brumley from the :,:ember ,.;)epartment to

the ,-:`-xwniaation ',Deartment at a salary of ,.;3400 per annum, effective July 1,

19 27and a„.Jproval of an increase from .j3000 to )3400 -6er annum in the salary

ot7. F. 3nyder of the Exa2ination Department; the Committee recommending

41)Droval.

Approved.

deport of Committee on 3alaries and 3xpenditures on letter dated

11 ,11e 13th I:rom:the Federal Lieserve L.L;ent at ::inneapolis, requesting approval

(4 411 incr-ase .)3,000 to )3,500 per annum, effective July 1st, in the

444rY Of :r. O. 3. Powell of the Federal .deserve Agent's Department; the

'00 ,.Lttee recommendi:Ig approval.

I I

Approved.

_ieport of Committee on salaries and -_:xpenditures on letter dated

15th from the Federal 2eserve Agent at Philadelphia,..requestin,g approval

tIt 411 Increase from „A,000 to .g,.,)0,) per artaum, effective July 1st, in the


551

6/17/27 -3...

of :LrIlest C. ::ill, Lssistant Federal ,..1serve Agent and Chief Ex-

_4111iher, and the appointment as 2i:<..ami1ars of t;:e4:7L.el1 G. Fenner at a salary

Of ,.;3,300 r annum, and Thomas P. Laude at a salary of „:3,603 per annum

both effective July 1st, the Committee recommendinc; approval.

Approved.

Telegram dated June 16th from the Chairman of the Federal :aeserve

4t1kef San Francisco, advising that William L. Halo has been aoointed

aueeing Director of the Los Angeles Branch to succeed 1:r. R. 3. 1:otherwe11,

l'asigned, and that subject to the approval of the Board his salary has been

fixed at .A,000 per annum, effective July 1, 1927.

Upon motion, the salary proposed was approved.

aeport of Executive Committee an letter dated June 16th from the

41111:troller of the Currency, recommending approval of a salary of .)5100

ler annum for rational Bank Examiner Jacob 3mbry, assiened to the Meventh

4daral aeserve District; the Co=ittee also recommending approval.

Approved.

Letter dated June 15th from the Chairman of the Federal Reserve Baak

°I* Philadelschia, advising that arrangements have been made to pay half salary

befling June 1st to ilary J. Bozarth, an employee of the bank, who has

'444 Cranted Leave of absence on account of illness until July 1st; the Chair-

Ina:4 also advising that it is unlikely she will be able to return to the bank

°4 the first of July and that the board of directors of the bank will extend.

4" leave of absence for =other thirty days from July 1st.

Upon motion, the Secretary was directed to advise the

Chairman that the Board will approve a recommendation of his

board of directors for another extension of thirty days from

July 1st with half pay.


552

6/17/27

Letter dated dated June 14th from the Federal _eserve Agent at 1Tew York,

14.71-sing of arranen;ents which are under way by the Bank of ::anhattan Bompany

1Tew York City to take over the Bank of•::ashinc.,-ton Heights.

I:oteds

Ylemorandum dated June 14th from the Board's Counsel, submitting copy

Of letter addressed to him under date of Juno 11th by r. Robert S. Parker,

a°114sel of the Federal eserve 'Sank of Atlanta, advisinL7 that none of the

liatiolial banks which have adopted the procedure of stamping on their cashiers'

#1.Ls the dirase "Ilot payable threuith Federal deserve Bank" are refusing to

the checks when they are presented throu:h the Federal Reserve bank; the

tor stating that as to whether or not the banks 1)ropose to abandon the

there is no information, since none of the three to whom letters

been sent have replied to the communications, but that it would al-Tear

tliat the banks do not propose to make any contest with the Federal eserve

134111c, The Secretary referred to the action of the Board at the meeting on

j141̀G 13th in directing that the Chairman of the Federal Reserve Bank of

4tianta be requested to report on the present status of the przictice above

l'eferred to, aid stated that the request had not been communicated to the

Ohmin view of the above letter which arpeared to give information

-e the lines desired by the Board.

After discussion, the Secretary was directed to com-

municate with the Chairman of the Atlanta bank inquiring

as to what steps have been taken to have the practice dis-

continued.

Letter dated Juno 13th from the Federal Reserve L.-cent at Atla,ita, with

tee,"enee to the e:Teriments being made at the Jacksonville and :Tew Orleans


553

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6/17/27 -5..

Branches of that bank during the first six months of the current year to

astermine the practicability of havin: the necessary supply of Federal

:isserve notes carried as bank cash and the re2ort on the exoeriments which

the 3oard requested at the end of the period.; the ANnt recommendinL: the

designation of ::/". Fulton Saussy as Assistant Federal Reserve Agent and

,* P. Kendall as alternate at the Jacksonville Branch and the designation

°f Lir, William I]. L:iller as Assistant Federal aeserve AP:ent and James a.

St°7sns as alternate at the Naa Orleans Branch for -a farther period of three

six manths, so that a proper study of the results of the experiments may

be nade.

After discussion, upon motion it vas voted to approve theredesicnation of ilessrs. Saussy, Kendall, n.1ler and Stevens,as recommended, for a period of three months, r. Cunninrilamvoting "no".

Llopaocandum froLI Counsel dated June 11th with reference to an a?plication

the National Shawmut Bank of 'Boston for permission to make an additional

illIrestment in the stock of the Jhawmut Uor)oration; Aunsel stating (1) chat

(11 hj 5, 1919 the Board approved a., investment by the National Shawmut Bank .

i)A.,800,000 in the cannon stock of the 3hawmut Corporation, which invest-

1.111t subseouently increased to slightly more than :2,000,000; that due to

°s to the Corporation in 1921 the =aunt of the investment of the National

311,c47rillit Bank as charged down to646,000 with the aoroval of the Board and.

that subseouently the National Shawmut Bank invested an additional ,4 4000,000,

4° that its present holdings in the 3hawmut IJorporation are 10,000 shares at

1r4luo of .::,1,646,000; (2) That the National Shawmut Bank now has an aggregate

4tDita1 and s rIlus of ,)25,000,000 and proposes to make an additional invest-


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6/17/27

Ii of ,8/34,000, bringingthe total annunt of its investment in the

3".r.awnrat

(1°11)oration up to the maxiisza limit of ,;2,500,000 or 10;0 of its capital and.

Surplus; and. (3) That there appears to be no reason why the present

application should not be approved as the Board has heretofore held that

tile limitation upon an amount of stock which a nz:tiona.1 baul: may take in

f°reign banking corporations refers to the Ciluount which may be invested by

tnellational bank rather than to the book or par value of the stock.

In this connection, the Governor presented a memorandum addressed to

the Comptroller of the Currency by the Deputy

Comptroller, stating that

tills lcosition is not in accord with the position of the Comptroller's office.

At the request of .7r. Hamlin, the above file including

the memocandum from the Deputy Comptroller was referred

back to the Law Cozznittee.

-6-

Goverhor then presented a letter dated June 2nd from the President

the ,_'armers :Tational 3aric, Bedford, Pa., requesting approval of that bank's

aDDlication for p)rmission to exercise fiduciary powers v.thich at the meeting

c't the -ioard on J'amary 19th was held. and. which the Board on April 26th ad-

the Federal _lesorve Agent at Philadel,thia it was thought best not to

CiVe further consideration to until the bank had established itself in the

c)Ill'idence of the people of Bedford by obtaining a sufficient volume of

b'Lla l-ess to indicate that it has their confidence; the letter pointing out

thesubstantial growth of the institution and re(..uestinc: that

its application

rOr trust powers receive favorable consideration. The Governor reported

t114t the comptroller of the Carrency has made a persopa.1 investigation of

hQ institution and favors al.;proval of its application for permission to

°e1Ci20 fiduciary p0 TS •


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6/17/27

After discussion, lir. Hamlin moved that the T.loard

ayiJrove the aolietton of the Fanners i:ational Bank

of Bedford, Pa. for permission to exercise general

f id.uc jary power s

:Ir. Hamlin's motion being vut by the Chair

was carried.

Letter dated June 15th from the Chairman of the Federal Heserve Bank of

tlanta, referring to the proposal of that bank to install a vault in the4

4e77 quarters being lease;L. to lollse its Havana Agenc;"; the Chairman stating

thatset of plans and specifications prepared by

the bank's architect,

7/it1 changes su-gested by the 3oard's Consalting Architect, is being forJarded

41/41 advisiaT: that the board of directors of the bank is anxious to proceed

as Boon as possible with the carrying out of the plans.

After discussion, Lir. Hamlin moved that the matter

of the vault at the :,avana Agency be referred to the

Executive committee with power.

Carried.

1110 Gover Lor then presenteda letter dated June 16th from the Governor

el' the Federal lieserve

ehanze in the position

Bank of 'Jew York, advising that there has been some

of the money market due to the unexpectedly large

°Ie'draft of the f2reas-;ly in connection with June 15th transactions, and

e niranting upon the position of the market and prospective purchases by

the ()Pen Market Investment Committee; the letter stating "One hundred

Ofl uollars of the securities now held in the open market account

Were purchased to offset the loss of that amaant of gold earmarked for

ter.eien account as described in my letter of June 9th, so we have only

1114lizea about 415,000,000 of the increase in the account which was contemr

1)leted when the Committee and the Board discussed the matter at the May


6/17/27

teeting" and "So that, to realize fully the

556

aims that we had in mind at that

time, we might still purchase an additional 100,000,000 between now and

4,11g4st 1st".

Discussion then ensued as to the action of the Board at its meeting

13111a17 13th in approving a recommendation of

tittee "That it shall be the policy of the C

ist next, gradually to acquire, if possible

41304 the money market, sufficient additional

ticEms to bring the total of the Committee's

the Open Market Investment Com-

ommittee between now and August

to do so without undue affect

short time government obliga-

investment account up to

1250.0°0,000.

littention was called to the fact that the System account now amounts

t° 4PPrOximately 235,000,000 and that regardless of the manner in which the

4 01.1nt was built up the authority granted by the Board has been exercised

444 the aims which the Board had in mind have been realized.

/4411t

After discussion, it was understood that therewould be prepared and submitted to the Board at itsnext meeting draft of a letter to Governor Strangalong the lines of the discussion at this meeting.

Letter dated June 16th from the Governor of the Federal Reserve

New York, referring to the Board's letter of February 23, 1927,

441'i8tna that when the volume of bills payable in foreign currencies held

1) the Federal Reserve banks shall amount to .5,000,000 or more bills boucht

14 the open market will be segregated and reported separately in the .weekly

litatement

14 l'equestinc; the Board to make no disclosures of the transactions in foreign

as "Bills payable in dollars" and "Bills payable in foreign cur-

Governor Strong advising that in the opinion of the board of

of his bank their responsibility is such that they are justified


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6/17/27 -9-

at present except what will appear bzi: (1) no increase in the total

al:loll:at of 'tills 'farchased in the open mark t; (2) The reduction in the reported

aln°1111t of cold held, abroad 1, if nec.,,essar: (,;) In the statement in the Ted-

(31.41 Lieserve Bulletin at the end. of the mouth :,en the amount of bills owned.

are payable in foreign currencies is shown se2arately. In his letter,

G°vernor 3troaL7 also stated that a visit is expected two weeks from

th.0 overnor of the Bank of --ha.land and the 'Tice Governor of the Bank of

44"e, and. expressed the hope that in view of this a proachin.; visit a de-

-1.011 as to the fora of report can be deferred until ViEVS can be exchanged.

Personally.

.1'ttari discussion, action on the above matter wasdeferred until the next meeting of the Board.

1)ated,

33Ettea,

June 16th, :ieconzniindinz chances in stock at Federal .2.c:serve 3anks,as set forth in the Auxiliary ::inute Book of this date.

.i'ecOMMendat ions approved.011210 14th, `),ecommondinii action on applications for fiduciary powers

as set forth in the Auxiliary ::inute Book of :this date.i?ecommendations approved.

June 15th, ileconnending approval of the application of hr. reorrnan A..2erry for permission to serve at the saL) time as directorof the Indiana ITational Bank, Indianapolis, Ind., asdirector of the Union ?rust Company, Indianapolis, Ind.and as director of the Farmers Trust Company, Indianapolis,Ind.

June 16th,

1)4tea, June 16th,

.2.ec ommendat ion app roved..',ecommending approval of the a.:plicat ion of hr. John L.Kelly for permission to servo at the same time as directorof the Ventnor City rational Bank, Ifentnor City, K. J.and. as director and preside-at of the Larine Trust Company,Atlantic City,

_.teconamendation approved..ecommeiidinc apprsval of the application of hr.

:Zicidle for permission to serve at the sa..; time as directorof the Tontnor City I:ational Bank, 7entnor City, h. J. andas director of the Larine Trust Company, itlantic City,

0.2ecoraloadat ion approved.


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T3icniootiIIT_; aajourned at one o'clook•


19270617_Minutes.pdf

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