19201012_Minutes.pdf

At a meeting of the Federal Reserve Board held in the

office of the Board on Tuesday, October 12, 1920, at 11 A.M.,

PRESENT: The GovernorMr. PlattMr. MillerMr. HamlinMr. WillsMr. WilliamsMr. Emerson, Assistant Secretary.

Minutes of meetingsof the Board held October 6th and

11th were read, and on motion approved.

(At this point the Board went into executive session,

to consider the suggested amendments to the By-Laws of the

Board and changes in its organization chart).

On motion duly seconded, it was voted to apprdve the

new form of organization chart of the Board (as per auxiliary

minute book as of this date), and the amendment of the By-laws

of the Board as submitted by the Executive Committee to read

as follows:

BY-LAWS OF THF FEDFI/AL RPSERVE BOARD

Article IThe Chairman

The Secretary of the Treasury, as Chairman of the

Board, shall preside at all meetings when present. In the

absence of the Chairman, the Governor shall act as presiding

officer. In the absence of both the Chairman and the Governor,

the Vice-Governor shall preside, and in the absence of all

three such officers, the remaining member of the Executive

Committee shall preside.

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

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Article IIThe Governor

Sec. 1. The Governor of the Federal Reserve Board

shall be the active executive officer thereof; subject, however,to the supervision of the Board and to such rules and regulationsas may be incorporated herein or may from time to time, by reso-

lution, be established.

Sec. 2. The Governor shall have general charge of the

executive and routine business of the Board not specifically

assigned under the by-laws or by resolution of the Board to any

individual member or committee thereof, and 'shall have super-

vision of the Board's staff, including promotions, appointments,

salaries and dismissals.

Sec. 3. It shall be the duty of the Governor to over-see and control the submission of statements to the press ex-

pressive of the Board's policy or. descriptive of its action.

Article IIIThe Vice-Governor

Sec. 1. In the absence or disability of the Governor,his powers shall be exercised and his duties discharged by the

Vice-Governor, and in the absence or disability of both of

these officers, such powers shall be exercised and such duties

discharged by the remaining member of the Executive Committee.

Sec. 2. It shall be the duty of the Vice-Governor to

cooperate with the Governor in the administration of the

executive business of the Board.

Article IVThe Executive Committee

Sec. 1. There shall be an Executive Committee of the

Board consisting of three members, which shall include the

Governor and Vice-Governor and one other. The third member shallbe nominated and elected at a regular meeting of the Board. Mem-

bers of the Board shall serve as far as practicable in rotation

and for periods to be fixed by, the Board from tine to time. Two

members Shall constitute a quorum for the transaction of business.

Sec. 2. It Shall be the duty of the 7xecutive Committeeof the Board to transact all business of an administrative nature


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Which can be transacted in accordance with principles or

policies already established by the Board, and such as may be

delegated to it from time to time; to review and approve im-

portant correspondence involving the expression of opinions or

decisions of the Board, and to prepare and make recommendations

governing the conduct of the Board's business.

Article VThe Secretara and Assistant Secretaries

Sec. 1. The Board shall appoint a Secretary and one

or more Assistant Secretaries.

Sec. 2. The Secretary shall attend each meeting of

the Board and shall keep an accurate record of its proceedings,and shall conduct such correspondence as may be assigned to

him by the Board or the Governor. He shall be Secretary of

all standing committees of the Board and shall perform such

other duties as may be assigned to him by the Governor.

Sec. 3. The Secretary shall have custody of the

seal, and, acting under the authority of the Board, shall

have power to affix the same to all instruments requiring it.

Such instruments shall be attested by the Secretary.

Sec. 4. The Assistant Secretary designated by the

Board or by the Secretary shall exercise the powers and discharge

the duties of the Secretary in his absence or disability. The

Assistant Secretaries shall perform such other duties as may

be assigned to them from time to time by the Board or by the

Secretary of the Board.

Sec. 1.Governor.

Sec. 2.such duties as

Sec. 3.

Article VIAssistant to the Governor

The Board may appoint an Assistant to the

The Assistant to the Governor shall perform

shall be assigned to him by the Governor.

The Assistant to the Governor shall have

power to sign checks of the Federal Reserve Board withdrawing

funds from the Gold Settlement Fund as described in Article VIII

of these by-laws, and requisitions upon the Comptroller of the

Currency for the delivery of Federal eserve notes to the re-

spective Federal Reserve Agents or to their order and Federal


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Reserve Bank notes to the respective Federal Peserve Banks or

to their order as described in Article IX of these by-laws,

such checks and requisitions to be countersigned by the Governor

or Acting Executive (ifficer of the Board.

Article VII

The Fiscal Agent and Deputy Fiscal Apent

Sec. 1. The Board shall appoint a Fiscal Agent and a

Deputy Fiscal Agent. The duty of the Fiscal Agent shall be to

collect and deposit all moneys receivable by the Board with the

Treasurer of the United States, to be placed in a special fund

established on the books of the Treasurer for the Federal Re-

serve Board. The Deputy Fiscal Agent shall perform the duties

Of the Fiscal Agent during his absence or disability.

Sec. 2. The Fiscal Agent and Deputy Fiscal Agent

shall each execute a separate bond with surety satisfactory to

the Board.

Sec. 3. Payments of expenses .and other disbursements

Of the Board shall be made by the Fiscal Agent upon proper

vouchers out of moneys advanced to him by requisition and war-

rant out of the special fund and placed to his official credit

With the Treasurer of the United States as provided by Section

5 of this Article. In the absence of the Fiscal Agent payment

of expenses and other disbursements shall be made by the Deputy

Fiscal Agert upon proper vouchers out of moneys advanced to the

Fiscal Agent by requisition and warrant out of the special fund

and placed to his official credit with the Treasurer of the

United States as provided by Sections 5 and 6 of this article.

Sec. 4. The Fiscal Agent shall prepare a quarterly

account in such form as shall be approved by the Comptroller of

the Treasury and, after approval by the Governor, such quarterly

account shall be submitted to the Auditor for the State and

other Departments. Such account shall cover payments of ex-

penses and other disbursements made by both the Fiscal Agent

and the Deputy Fiscal Agent.

Sec. 5. The Governor shall, when necessary, make requi-

sition on the Treasurer of the United States for the advance

of such sums to the Fiscal Agent as may be necessary from the

Federal Reserve Board fund.

Sec. 6. The Deputy Fiscal Agent in making disbursements


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of the Board upon proper vouchers out of the moneys advanced

to the Fiscal Agent shall sign against funds to the official

credit of the Fiscal Agent with the Treasurer of the United

States in the name of the Fiscal Agent by himself as Deputy

Fiscal Agent.

Article VIII

Gold Settlement Fund and

Federal Reserve Agents' Fund

All funds deposited by or for account of the respective

Federal Reserve Agents in the Federal Reserve Agents' fund of

the Federal Reserve Board and all funds deposited by or for ac-

count of the respective Federal Reserve Banks in the Gold Set-

tlement Fund of the Federal Reserve Board shall be held on de-

posit with the Treasurer of the United States and shall be sub-

ject to withdrawal only 1%,, check of the Federal Reserve Board

Signed by the Assistant to the Governor, or by the Secretary or

an Assistant Secretary and countersigned by the Governor or

Acting Executive Officer of the Board.

Article IXRequisition for Deliveu

ofFederal Reserve rotes.

Requisitions upon the Comptroller of the Currency for

the delivery of Federal Reserve notes to the respective Federal

Reserve Agents shall be signed by the Assistant to the Governor

or by the Secretary or an Assistant Secretary and countersigned

by the Governor or Acting 7xecutive Officer of the Board.

Article XThe Seal.

The following is an impression of the seal adopted by

the Board.


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Article XICounsel

Sec. 1. The Board shall appoint a General Counsel

Whose duty it shall be to advise with the Board, or any member

thereof, as to such legal questions as may arise in the conductof its business; to prepare, at the Board's request, opinions,

regulations, rulings, forms and other legal papers and to per-form generally such legal services as he may be called upon bythe Board to perform.

Sec. 2. Subject to the direction of the Governor, the

General Counsel shall have authority to correspond directly withthe Counsel of the various Federal Reserve Banks and to request

their opinions as to the interpretation of the local laws of the

States included in their respective Federal Feserve Districts.

Copies of all such correspondence to be furnished to the Boardfor its information.

Sec. 3. Whenever it may be deemed advisable, the Boardmay appoint one or more Associate or Assistant Counsel, or one ormore Assistants to Counsel. The duty of such Associate or As-sistant Counsel shall be to assist the General Counsel in the per-

formance of his duties and to perform the duty of the General

Counsel in his absence. The duty of such Assistant to Counselor Assistants to Counsel Shall be to assist the General Counselin the performance of his duties.

Sec. 4. The Board may appoint from time to time Con-sulting Counsel, who may be attorneys at law engaged in outside

practice.Article XIIY.eetings.

Sec. 1. Stated meetings of the Board shall be held onsuch days of the week at such hours as the Board by majority

vete may adopt from time to time. 3pecial meetings of the Board

shall be called upon written request of three members of the Board.

Sec. 2. A majority of the Board shall constitute a quorumfor the transaction of business, except that an affirmative voteof at least five members of the Board shall be necessary to re-

quire Federal Reserve Banks to rediscount the discounted paper of

Other Federal Reserve Banks, or to change reserves of banks in

outlying districts.

Sec. 3. At all meetings of the Board the following shallbe the order of business:

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(1) Reading or inspection of the minutes of thelast regular meeting and minutes of meet-ings of all committees.

(2) Report of the Governor.(3) Report of the Secretary.(4) Reports of the cornmittees or members on as-

signed business.(5) Unfinished. business.

Article MIInformation and Publication

Sec, 1. All persons employed by the Board shall keep

inviolate its business, affairs and concerns, and shall not

disclose or divulge the sane to any unauthorized person - 71.1om-

soever, and any employee who shall give information contraryto this by-law shall be liable to immediate dismissal.

Sec. 2. While each member of the Board must determinefor himself the propriety or necessity of expressing publiclyhis individual opinion on any question, members shall not quote

Publicly the opinions of other members on matters which have notformally been passed upon by the Board.

Sec. 3. There shall be published monthly, under the

supervision of a committee of the Board, a bulletin to be knownas "The Federal Reserve Bulletin", which shall be the official

periodical organ or publication of the Federal Reserve Board.

Sec. 4. No resolution of a personal character, exceptupon the death of a member of the Federal Reserve Board while

serving as such, Shall appear in any publication of the FederalReserve Board.

Article XIVBudget and Audit

The Executive Committee, acting as a Committee of Budgetand Audit, shall audit the accounts of the Board for each six

months' period, and shall report to the Board a tentative budgetof expenses for the next succeeding six months.

Article YVAmendments

These ly-laws may be amended at any regular meeting of

the Board by a majority vote of the entire Board, provided that acopy of such amendments shall have been delivered to each memberat least seven days prior to such meeting.


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Upon motion duly made and seconded, the following

changes in the Board's staff were approved:

Fffective November 1, 1920, Yr. W. W.

Hoxton, Executive Secretary of the Board, was

appointed Secretary at his present salary, to

fill the vacancy caused by the resignation of

Yr. W. T. Chapman. Mr. Hoxton was_designated

Acting Secretary for the period October 16th

to 31st, inclusive.

Effective October 16th, Kr. R. G. Emerson,

Assistant Secretary, was appointed Assistant to

the Governor, at a salary of ."4,6,500 per annum.

The matter of appointing one or more

Assistant Secretaries of the Board was referred

to the Executive Committee with power.

(At this point the regular business was resumed).

The Governor reported the reserve positions of the

several Federal Reserve,Banks as at close of business October

rdth, and the status of rediscounts between Federal Reserve

Banks as of the same date.

The Governor reported rediscount transactions, pur-

suant to authority heretofore vested in him; member bank

promissory notes secured by Government obligations: rate 75%

as follows:

Date Bank Redis-counting

With Amount Maturities

Oct.6th Richmond (Boston $5,000,000 11-15 days

(Philadelphia 5,000,000 11-15 days

Oct.6th Kansas City Boston 6,000,279.50 9-14 days

Oct.6th Dallas Boston 7,500,010 11-15 days

Oct.6th Dallas Cleveland 4,500,000 11-15 days


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Date Bank Redis-counting

Tath Amount Maturities

Oct.7th Kansas City Boston $3,061,570 8-14 daysOct.7th Minneapolis Cleveland 1,000,000 11-15 daysOct. 8th Minneapolis Philadelphia 2,000,000 11-15 days'Oct.8th $t. Louis Boston 7,010,000 Tithin 15 daysOct .9th Minneapolis Cleveland 2,500,000 11-15 days

Noted.

The Governor reported rediscount transactions, pur-

suant to authority heretofore vested in him; member bank

Promissory notes secured by Government obligations: rates

'7%, and 7% on commercial paper, as follows:

Date Bank Redis- V;ithcountiim

Amount Maturities

Oct.7th Atlanta Cleveland U32,860,000 10-90 days( 1,140,000 11-15 days

Oct.7th

Oct. 5thOct. 6thOat. 9thOct.9th

Kansas City Cleveland. .c

AtlantaAtlantaAtlantaAtlanta

ClevelandClevelandClevelandCleveland

4,000,0002,000,000

2,200,0001,608,250500,000

1,009,000

11-15 days30-180 days

10-90 days10-90 days

Tithin 14 days15-90 days

Noted.

Letter dated October 12th from the Railway Loan Ad-

visory Committee, recommending approval of form of loan of

4,000,000 as the first installment of a loan of 02,000,000

to the Virginian Railway Company, under the provisions of

Section 210 of the Transportation Act, 1920, as amended.

Approved.


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Letter dated October 4th from the Federal Reserve

Agent at Minneapolis, with reference to that Bank taking over

certain 3ub-Treasury functions.

Noted.

Letter dated October 6th from the Federal reserve

Agent at Xansas City, with reference to that Bank taking over

certain Sub-Treasury functions.

1Toted.

Mr. Ilamlin reported favorably on the memorandum by

General Counsel under date of September 30th with reference

to the proposed amendment to the Oregon Constitution, fixing

the maximum rate of interest and discount at U;:', in that State.

Ordered mimeographed and circulated, andcopies furnished for the information of theconference of Governors and Federal ReserveAgents.

Memorandum dated October 8th by the Assistant Score-

tary, with reference to the distribution of the mimeographed

copies of the monthly summary of business conditions.

Referred to Mr. Miller for report.

Letter dated October 4th from the Chairman, Federal Re-

serve Bank of New York, reporting upon negotiations of that Bank

relative to taking over property recently purchased at 89 Maiden

Lane, upon which it is proposed to construct a storage building,


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and requesting the approval of the Board to an increase of

the expenditure for the land and building to $1,450,000, due

to the discovery that a considerable portion of the area is

composed of quicksand beds, making it necessary to drive steel

piles for the foundations.

Approved.


Agent at New York, submitting monthly recommendations of ad-

justments in salaries of employees of that Bank and its Buffalo

Branch whose anniversaries of employment fall during September,

1920,

Approved.

Letter dated October 6th from the Chairman, Federal

Reserve Bank of Dallas, submitting proposed increase in salaries

Of employees of that Bank as approved by its Salary Committee

and Executive Committee.

Referred to Yr. Hoxton for report.

Letter dated October 11th from the Chairman, Federal

Reserve Bank of Richmond,submitting recommendation of the

Executive Committee of that Bank for inarease in salaries of

employees, effective October 1, 1920.

Deferred to Mr. Hoxton for report.

Letter dated October 6th from the Federal Trade Corn-


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mission, enclosing copies of advertisements used by the

Farmers National Bank of Pomeroy, Washington, purporting to

have been approved by the Federal Reserve Agent at San

Francisco.

Referred to 1.Ir. Wills for discussion with

Mr. Perrin.


Agent at Dallas, enclosing copy uf the minutes of a special

meeting of the Board of Directors of the Houston Branch of

that Bank held on October 2, 1920, in which it was voted to

recommend that the Federal Reserve Bank of Dallas purchase

a site for the Houston Branch at a price not to exceed $80,000.

Noted.

REPORTS OF COrMITTEE NO. 1:

Dated Oct. 11th, recommending changes in stock at Federal

Reserve Banks, as set forth in the auxiliary

minute book as of this date.

Approved.

Dated Oct. 11th, recommending approval of applications for

fiduciary powers, as set forth in the auxiliary

minute book as of this date.

Approved:.

Dated Oct. 11th, recommending approval of increase from :2,600

to ,I 3,000 per annum in salary of Mr. Herbert

Freeland as Assistant Chief, Records and Re-

lorts Division of the Auditing Department, Fed-

eral Reserve Bank of New York.

Approved.


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The Executive Committee reported favorably upon the

memorandum of the Chief, Division of Examination, dated Sep-

tember 28th, recommending increase in salaries of the following

Assistant Federal Eeserve Examiners, as indicated:

From To

T. J. Harrington, 43,300 :i 3,600

R. B. Chamberlain, 2,800 3,000

J. B. Atkins, 2,400 2,700

C. IT. Cramer, 2,700 3,000

Alfred Boysen, 2,700 3,000

K. E. Prickett, 2,400 2,700

Approved.

Mr. Hamlin submitted with favorable recommendation,

amended draft of letter by General Counsel to Mr. Aaron 3apiro

of Cincinnati, Ohio, with reference to the eligibility for re-

discount or purchase by Federal Reserve Banks of trade ac-

ceptances drawn upon cooperative marketing associations by

growers who are members, such drafts to be accepted by the

associations and secured by agricultural products.

1,:r. Miller submitted a negative report

in connection therewith.

In view of the differences of opinion of

the Members of the Law Committee, on motion

duly made and seconded, it was voted to re-

fer the entire correspondence to a special

committee consisting of Mr. Platt and Mr.Vills

for further re-Port to the Board.

Memorandum by General Counsel dated October 12th,

submitting proposed draft of letter to all Federal Reserve


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Agents and Governors of Federal Reserve Banks, with reference

to proposed changes in legends appearing on Federal Reserve

Bank notes and National Bank notes, as submitted by Assistant

Secretary of the Treasury Gilbert.

Ordered mimeographed and copies furnished

to Members of the Board, and to the Governors

and Federal Reserve Agents in conference.

Letter dated October 11th from the Governor, Federal

Reserve Bank of Richmond, enclosing letter written by him

to the Editor of the Manufacturers' Record, in answer to

certain criticism of the Federal Reserve Board made by that

publication, asking the Board's approval of the circulation

of this letter after it has been published by the Editor of

the Manufacturers' Record.

Referred to the Governor with power.

Mr. i11s submitted letter dated October 9th which

he had received from Deputy Chairman ':Tilliage of the Federal

Reserve Bank of Cleveland, with reference to the statements

published by the Manufacturers' Record, suggesting the pos-

sibility of securing from the American Bankers' Association

when it is in conference in Washington next week, a statement

endorsing the policies and methods of operation of the Fed-

eral Reserve System.

Referred to the Executive Committee.


838

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The Governor submitted draft of letter under date of

October 11th to Yr. George P. Fampton of the Farmers' National

Council, replying to a letter received by the Secretary of

the Treasury under date of October 9th.

Approved.

The Governor read telegrams which he had received

from Ur. F. R. Marshall, Secretary of the National 7ool Growers'

Association, and Senators Smoot and King, requesting that he

address the annual convention of that Association at Salt

Lake City in January, 1921.

The Governor was authorized to accept the

invitation.

Letter signed by several representatives of Washington

Bureaus of various farm organizations, requesting a statement

of the Board with reference to the Board's policy in connec-

tion with assistance to be rendered to farmers in the market-

ing of crops.

referred to the Governor for reply.

On notion duly seconded it was voted that the Con-

ference of Governors and Federal Reserve Agents be called

at 10-30 A.M., on October 13th, in the Board's assembly room,

National Metropolitan Bank Building, and that a dinner

be tendered to'the Governors and Agents on the evening Of


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October 14th; all subsequent arranLements to be left to the

Executive Committee with paver.

It 1-30 P.M., the meeting adjourned.


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