19290118_Minutes.pdf

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

Federal Reserve Board on Friday, January 18, 1929 at 11:30 a. m.

PRESENT: Governor YoungMr. HamlinMr. MillerMr. JamesMr. CunninghamMr. Noell, Asst. SecretaryMr. McClelland,Asst. Secretary.

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

15th were read and approved.

At the suggestion of the Governor, it was voted to refer to the Federal

Advisory Council the question of the ruling requested by the First Federal

Foreign Investment Trust that the corporation's bills arising from installment

resales of American automobiles in foriegn countries are a satisfactory basis

for acceptance credits.

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

Bank of Boston, letter dated January 17th from the Secretary pro tern of the

Federal Reserve Bank of New York, telegram dated January 16th from the Chair-

man of the Federal Reserve Bank of Philadelphia, telegram dated January 16th

from the Chairman of the Federal Reserve Bank of St. Louis and telegram dated

January 17th from the Chairman of the Federal Reserve Bank of San Francisco,

all advising that their boards of directors at meetings on the dates stated

made no changes in the banks' existing schedules of rates of discount and

Purchase.

Noted.

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

Bank of New York, advising that he and Director Hough of the Buffalo Branch

Will be in Washington on January 25th for a meeting at 10:00 o'clock. The

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

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Governor stated that Messrs. McGarrah and Haugh are coming to Washington

for the purpose of conferring with members of the Board regarding the sal-

ary recommended by the directors of the New York bank for Managing Director

Schneckenburger of the Buffalo Branch, on which action has been deferred

by the Board.

Noted.

Report of Committee on Salaries and Expenditures on letter dated January

15th from the Secretary of the Federal Reserve Bank of Atlanta, requesting

approval of the action of the board of directors of that bank in voting to

appropriate the sum of $6,850 for welfare and educational work through the

Federal Reserve bank clubs at the head office and branches during the year

1929; the Board's Committee recommending approval.

Approved.

Report of Committee on Salaries and Expenditures on list submitted

by the Federal Reserve Bank of Atlanta of employees for whom the directors

of that bank approved leaves of absence with pay, on account of illness,

during tile month of December, where the total of such absences since January

1, 1928 has exceeded thirty days; the Board's Committee recommending approval

of the salary payments involved.

Approved.

Memorandum dated January 17th from the Secretary recommending approval

by the Board of a request by the Federal Reserve Bank of Chicago for a change

in the inter-district time schedule from Chicago to Portland, Seattle and

Spokane from four to three days; the Secretary stating that tae changes have

the approval of the Federal Reserve Bank of San Francisco.


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Approved.

In connection with the above matter, Mr. James called attention to the

increased float being carried by the Federal Reserve banks and suggested that

the increase might be due in part to recent changes in tae time schedule.

After discussion, the Governor WaS requested toinstruct the Chief of the Division of Bank Operationsto study the matter and report thereon to the Board.

Letter dated January 15th from the Assistant Federal Reserve Agent at

New York, advising that the Tl'ade Bank of New York, New York City, on January

8, 1929, received special authorization from tae New York State Banking Depart-

ment to exercise certain fiduciary powers. The Secretary stated that this

matter is reported to the Board as a change in "the scope of the functions"

exercised by the member bank within the meaning of the general condition

under which it was admitted to membership in tne System.

Noted, with approval.

Letter dated January 16th from Mr. Wm. McC. Martin, confirming telegraphic

advice on the snme date that tne board of directors of tne Federal Reserve

Bank of St. Louis on that date unanimously elected him Governor of the bank

and tendering his resignation as Class O Director, Chairman and Federal

Reserve Agent; tae letter stating that tae directors of the St. Louis bank

fixed his salary as Governor at $25,000 per annum, effective January 1, 1929,

subject to the approval of the Board.

Upon motion, it was voted to accept Mr. Martin'sresignation as Class C Director, Chairman and FederalReserve Agent at the Federal Reserve Bank of St. Louisand to approve for him as Governor of that bank a salaryof $25,000 per annum, effective January 1, 1929,

The Governor also presented a letter dated January 16th from Mr. Martin,

advising that in accordance with an informal suggestion of the Board, following


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the meeting of tne ooard of directors of the St. Louis bank held on January

16th each director present at the meeting was asked to express himself as

to whom, in his opinion, was best fitted for appointment as Class C Director,

Chairman and Federal Reserve Agent at the bank; Mr. Martin stating that each

Director present, with the exception of Mr. Rolla Wells, expressed the opinion

that Mr. Wells is tae best fitted man and that taey would like very much to

see him receive the appointment. The Governor submitted draft of a letter to

Mr. Martin advising that Mr. James will be in St. Louis in the very near

future and will endeavor to complete the appointment as quickly as possible.

After brief discussion, upon motion, Mr. James wasauthorized to tender to Mr. Wells appointment as ClassC Director of the Federal Reserve Bank of St. Louis forthe term ending December 31, 1930, and designation asChairman of the Board of Directors and Federal ReserveAgent, for the year 1929, at a salary of not to exceed$20,000 per annum.

The Secretary then submitted, with the approval of the Committee on

Salaries and Expenditures, the following salaries recommended by the board of

directors of the Federal Reserve Bank of Minneapolis for officers at that

bank and the Helena Branch for the year 1929:

HEAD OFFICE: FROM TOW. B. Geery, Governor $22,500 $25,000B. V. Moore, Deputy Governor 12,500 14,000Harry Yaeger, Deputy Governor 10,000 11,000F. C. Dunlop, Controller 7,000 7,500Gray Warren, Cashier 5,500 5,500L. E. Rast, Asst. Cashier 4,000 4,500H. I. Ziemer, Asst. Casnier 4,800 5,500H. C. Core, Asst. Cashier 4,800 5,000A. R. Larson, Asst. Cashier 4,200 4,800Andreas Ueland, Counsel 5,000 5,000(Allowance for office expense) 4,000 4,000


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HEAD OFFICE: (Contld) FROM TOCurtis L. Mosher, Asst. F. R. Agent $7,000 $7,000

F. M. Bailey, Asst. F. R. Agent 6,500 7,000

HELENA BRANCH:R. E. Towle, Managing Director 6,500 6,500H. L. Zimmerman, Cashier 4,000 4,000A. A. Hoerr, Asst. Cashier 3,000 3,000

T. B. Weir, Counsel 3,600 3,600

After discussion, upon motion, the salaries recom-mended by the board of directors of the Minneapolis bankwere approved.

The Secretary called attention to advice contained in the letter from the

Chairman of the Minneapolis Bank, submitting the above salaries, of the re-

election of Mr. Theodore Wold as member of the Federal Advisory Council from

the Ninth Federal Reserve District for the year 1929.

Noted.

Letter dated January 14th from the Chairman of the Federal Reserve Bank

Of Minneapolis, with further reference to the increase from $4,500 to $5,500

per annum recommended in the salary of Mr. Oliver S. Powell, Statistician in

the Federal Reserve Agent's Department, on which. the Board deferred action;

the Chairman stating that the increase has been unanimously approved by the

Board of Directors of the bank which urges that the matter be reconsidered

and the proposed salary approved by the Board.

A discussion then ensued during which it was theconsensus of opinion that the salary of $5,500 proposedfor Mr. Powell would be out of line with the salariespaid for similar services at other Federal Reserve banksof comparable size, and that the Federal Reserve Bankof Minneapolis should be advised that the Board does notfeel that it can approve a salary in excess of $4,800per annum for Mr. Powell.

Following the discussion, upon motion, the matterwas referred to the Committee on District #9.


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Letter dated January 15th from the Governor of the Federal Reserve Bank•

Of Chicago, written in reply to an inquiry made by the Board on January 12th

as to the duties and responsibilities of Mr. Arthur L. Olson, recently elected

Assistant Controller of the Chicago Bank and for whom an increase in salary

from $4,500 to $4,800 per annum was recommended; the letter pointing out that

Mr. Olson is also Assistant Secretary of the Bank and listing various duties

to be performed by him as Assistant Secretary and Assistant Controller.

A discussion ensued, at the conclusion of wnich Mr.Cunningham moved tnat the Board approve for Mr. Olson thesalary of $4,800 per annum recommended by the directorsof the Federal Reserve Bank of Chicago.

Mr. Cunningham stated that he made tills motion veryreluctantly and would reluctantly vote in favor of theincrease.

Mr. Cunningham's motion being put by the Chair wascarried, the members voting as follows:

Governor Young, "aye"Mr. Hamlin, "aye"Mr. Cunningham "aye"Mr. Miller, "no"Mr. James, "no"

Letter dated January 15th from the Foreign Trade Securities Company,

Ltd., requesting a further extension for a period of thirty days of the Board's

approval and reservation of the title "Foreign Banking and Investment Corpora-

ton" for the corporation which it is proposed to organize under Section 25

(a) of the Federal Reserve Act.

Upon motion, the extension was granted for a periodof thirty days from January 25th.

Memorandum from Counsel dated January 14th, with reference to an inquiry

by the Continental Bank and Trust Company, Chicago, Ill., whether pecans in

the shell stored in independent warehouses constitute a readily marketable

Staple within the meaning of the Federal Reserve Act and the Regulations of


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tne Board, and whetner bankers acceptances secured by independent warehouse

receipts for pecans in the snell may be considered as eligible for rediscount

With the Federal Reserve banks; Counsel submitting draft of a letter to the

Deputy Governor of the Federal Reserve Bank of New York regarding the request,

as well as letters to the Secretary of Agriculture and the Federal Reserve

Agent at Chicago on the question of tne marketability of pecans.

Upon motion, the letters submitted by Counselwere approved.

Letter dated January 15th from the Governor of the Federal Reserve Bank

Of New York, transiAtting minutes of the meeting of the Open :larket Investment

Committee held on January 7, 1929.

Ordered circulated.

In accordance with the statement made by him at the meeting on December

21st, Mr. Cunningham then presented a memorandum on the subject of qualifica-

tions and compensation of employees of the Federal Reserve Board, in connection

With which he submitted the following resolution:

"BE IT RESOLVED BY THE FEDERAL RESERVE BOARD that the Governoris hereby authorized to appoint a conLittee, consisting of the Gov-ernor as Chairman, and two other members of the Board, who are di-rected to make a study of the employment situation under the Boardin order to determine the efficiency of the service being rendered,and whether, considering the present cost of living, any adjustmentsin the compensation paid individual employees, should be made

BE IT FURTHER RESOLVED that the committee is hereby requestedto make a full report of their findings, together with any recom-mendations wnich they deem advisable, to the Federal Reserve Board,not later than June 1st, 1929."

After discussion, the resolution submitted by Mr. Cunninghamwas made special order of business for a later meeting at whichmore members of the Board are present.

Report of Executive Committee on memorandum dated January 15th from

t4a Comptroller of the Currency, recommending approval of an application of


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the City National Bank in Miami, Fla., for permission to reduce its capital

from $1,000,000 to $500,000, on condition that no money be returned to the

Shareholders, that the capital stock be immediately increased back to

$1,000,000 and taat unsatisfactory assets amounting to $700,000 then be

charged off the books but retained as the property of the bank; the Board's

Committee also recommending approval subject to the conditions suggested by

the Comptroller.

Approved.

On behalf of the Committee on District #2, the Governor then submitted

draft of a proposed letter to the Deputy Governor of the Federal Reserve Bank

of New York, with further reference to the application of member banks in

Albany for the termination of the designation of Albany as a reserve city;

the letter concluding with the statement that the Board has decided to

deny the application, believing that proper legislation is the only method

by which reserves of member banks can be determined so tnat all banks will

be treated equitably, but that if such legislation does not develop, the

Board will use its best efforts to see that certain other cities throughout

the United States are raised to a comparable basis with Albany.

The Governor stated that he wished merely to presentthe letter at tnis time, and at his suggestion action wasdeferred.

REPORTS OF STANDING COMMITTEES:Dated,, January 15th, Recommending changes in stock at Federal Reserve Banks

16th, as set forth in the Auxiliary Minute Book of this date.17th, Recommendations approved.18th,

Dated, January 17th, Recommending approval of the application of Mr. LouisD. Ricketts for permission to serve at tne same timeas director of the Valley Bank, Phoenix, Ariz., and as


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Approved

The meeting adjourned at 12:45 p. m.

Vk7 /04 earreed Assistant Secretary.

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agyoRTs OF STANDING COMYITTEES: (Conttd) director of the Los Angeles-First National Trust andSavings Bank, Los Angeles, Cal.

Approved.Dated, January 17th, Recommending approval of the application of Mr. Arthur

L. Lougee for permission to serve at tne same time asdirector of the Beacon Trust Company, Boston, Mass.,

and as director of the Merchants National Bank, Salem,

Mass.

Approved:11


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19290118_Minutes.pdf