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RESTRICTION OF IMMIGRATION FROM REPUBLIC OF MEXICO

JUNE 9, 1930.-Referred to the House Calendar and ordered to be printed

Mr. Cooke, from the Committee on Immigration and Naturalization, submitted the following

MINORITY REPORT

[To accompany S. 51]

As a member of the Committee on Immigration and Naturalization, I can not concur with the recommendations of the majority of that committee in favorably reporting S. 51 to the House.

The proposed law is discriminatory in character and based upon an ill-advised expediency. It violates those principles of justice and comity which should be characteristics of legislation of this kind. I am in favor of the establishment of an immigrant quota for the Western Hemisphere imposing equal restriction upon all of the countries included within that area. S. 51 singles out one country, Mexico, for the application of the principle of restricted immigration; it therefore by implication approves the present immigration status with respect to other western nations. I agree neither with the object of the bill nor the implication mentioned. The first is manifestly unjust; the second is untrue.

Until Congress is convinced of the necessity of a quota limitation on the nationals of all Western Hemisphere countries, I am opposed to its infliction upon any one nation in that area.

Respectfully submitted.

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AMEND THE FEDERAL RESERVE ACT WITH RESPECT TO METHOD OF ELECTING CLASSES A AND B DIRECTORS OF FEDERAL RESERVE BANKS

MAY 23, 1930.-Referred to the House Calendar and ordered to be printed

Mrs. RUTH PRATT, from the Committee on Banking and Currency, submitted the following

REPORT

[To accompany S. 4096]

The Committee on Banking and Currency, to whom was referred the bill (S. 4096) to amend section 4 of the Federal reserve act, having considered the same, report favorably thereon with the recommendation that the bill do pass.

This bill was passed by the Senate on May 12, 1930, and is reported out of your committee in lieu of the bill (H. R. 10249) which had been referred to your committee on February 25, 1930, and is identical with the Senate bill.

The enactment of this legislation is especially desired by the Federal Reserve Board. The reasons for this legislation and the purpose to be accomplished are fully set forth in letter of February 12, 1930, from Gov. Roy A. Young to the chairman of the committee, which is appended hereto and made a part of this report, as follows: FEDERAL RESERVE BOARD, Washington, February 12, 1930.

Hon. LOUIS T. MCFADDEN,
Chairman Banking and Currency Committee,

House of Representatives, Washington, D. C.

SIR: The Federal Reserve Board wishes to recommend the enactment of an amendment to section 4 of the Federal reserve act to clarify the meaning of the phrase "electors voting" in that part of the statute providing the method of counting ballots in elections of class A and class B directors of Federal reserve banks. The existing law provides that the member banks voting in an election shall indicate thier first, second and other choices and if no candidate have a majority of first choice votes, the second choice votes shall be added to the first choice votes, and if any candidate then have a majority of the "electors voting," he shall be declared elected; if not, votes for first, second and other choices shall be added together and the candidate then having the highest number of votes shall be declared elected. In a recent election of a director at one of the Federal reserve banks no candidate had a majority of first choice votes and it was accordingly necessary to add together the first choice and second choice votes; when this was done several candidates had a majority of "electors voting" and it became ma

terial to the result of the election to determine whether the candidate having the highest number of first and second choice votes combined should be declared elected or whether in such case votes for first, second and other choices should be added together and the candidate then having the highest number of combined votes declared elected. The decision reached on this question was seriously questioned by one of the unsuccessful candidates for the office who contended that he had been improperly deprived of the election.

The proper answer to this question under the terms of the present law is open to serious doubt, and under such circumstances it is likely that whenever the question arises in the future whatever decision may be made will be unsatisfactory to one or more of the unsuccessful candidates who will regard the election as having been improperly determined or as determined by highly technical considerations. For obvious reasons it is important that there should be no doubt as to what candidate has been lawfully elected in all elections of Class A and Class B directors of Federal reserve banks, and in order to remove the possibility of such doubtful cases arising hereafter the board believes that the statute should be amended so as to provide that, when first and second choice votes have been added together, the candidate then having a "majority of the electors voting and the highest number of combined votes' shall be declared elected. A draft of an amendment for this purpose is submitted herewith for your consideration, together with a print showing the textual changes in the present law which would be made by the adoption of the proposed amendment.

Respectfully,

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R. A. YOUNG, Governor.

In conformity with section 2a, of Rule XIII, of the House Rules, there is herewith printed section 4 of the Federal reserve act, as it will read with the amendment proposed in this bill, such amendment being printed in italics, and the part to be stricken out in brackets, as follows:

SEC. 4. When the organization committee shall have established Federal reserve districts as provided in section two of this act, a certificate shall be filed with the Comptroller of the Currency showing the geographical limits of such districts and the Federal reserve city designated in each of such districts. The Comptroller of the Currency shall thereupon cause to be forwarded to each national bank located in each district, and to such other banks declared to be eligible by the organization committee which may apply therefor, and application blank in form to be approved by the organization committee, which blank shall contain a resolution to be adopted by the board of directors of each bank executing such application, authorizing a subscription to the capital stock of the Federal reserve bank organizing in that district in accordance with the provisions of this act.

When the minimum amount of capital stock prescribed by this act for the organization of any Federal reserve bank shall have been subscribed and allotted, the organization committee shall designate any five banks of those whose applications have been received, to execute a certificate of organization, and thereupon the banks so designated shall, under their seals, make an organization certificate which shall specifically state the name of such Federal reserve bank, the territorial extent of the district over which the operations of such Federal reserve bank are to be carried on, the city and State in which said bank is to be located, the amount of cap tal stock and the number of shares into which the same is divided, the name and place of doing business of each bank executing such certificate, and of all banks which have subscribed to the capital stock of such Federal reserve bank and the number of shares subscribed by each, and the fact that the certificate is made to enable those banks executing same, and all banks which have subscribed or may thereafter subscribe to the capital stock of such Federal reserve bank, to avail themselves of the advantages of this act.

The said organization certificate shall be acknowledged before a judge of some court of record or notary public; and shall be, together with the acknowledgment thereof, authenticated by the seal of such court, or notary, transmitted to the Comptroller of the Currency, who shall file, record, and carefully preserve the same in his office.

Upon the filing of such certificate with the Comptroller of the Currency as aforesaid, the said Federal reserve bank shall become a body corporate, and as

such, and in the name designated in such organization certificate, shall have power

First. To adopt and use a corporate seal.

Second. To have succession after the approval of this act until dissolved by act of Congress or until forfeiture of franchise for violation of law.

Third. To make contracts.

Fourth. To sue and be sued, complain and defend, in any court of law or equity.

Fifth. To appoint by its board of directors such officers and employees as are not otherwise provided for in this act, to define their duties, require bonds of them and fix the penalty thereof, and to dismiss at pleasure such officers or employees. Sixth. To prescribe by its board of directors, by-laws not inconsistent with law, regulating the manner in which its general business may be conducted, and the privileges granted to it by law may be exercised and enjoyed.

Seventh. To exercise by its board of directors, or duly authorized officers or agents, all powers specifically granted by the provisions of this act and such incidental powers as shall be necessary to carry on the business of banking within the limitations prescribed by this act.

Eighth. Upon deposit with the Treasurer of the United States of any bonds of the United States in the manner provided by existing law relating to national banks, to receive from the Comptroller of the Currency circulating notes in blank, registered and countersigned as provided by law, equal in amount to the par value of the bonds so deposited, such notes to be issued under the same conditions and provisions of law as relate to the issue of circulating notes of national banks secured by bonds of the United States bearing the circulating privilege, except that the issue of such notes shall not be limited to the capital stock of such Federal reserve bank.

But no Federal reserve bank shall transact any business except such as is incidental and necessarily preliminary to its organization until it has been authorized by the Comptroller of the Currency to commence business under the provisions of this act.

Every Federal reserve bank shall be conducted under the supervision and control of a board of directors.

The board of directors shall perform the duties usually appertaining to the office of directors of banking associations and all such duties as are prescribed by law.

Said board shall administer the affairs of said bank fairly and impartially and without discrimination in favor of or against any member bank or banks and shall, subject to the provisions of law and the orders of the Federal Reserve Board, extend to each member bank such discounts, advancements, and accommodations as may be safely and reasonably made with due regard for the claims and demands of other member banks.

Such board of directors shall be selected as hereinafter specified and shall consist of nine members, holding office for three years, and divided into three classes, designated as classes A, B, and C.

Class A shall consist of three members, who shall be chosen by and be representative of the stock-holding banks.

Class B shall consist of three members, who at the time of their election shall be actively engaged in their district in commerce, agriculture, or some other industrial pursuit.

Class C shall consist of three members who shall be designated by the Federal Reserve Board. When the necessary subscriptions to the capital stock have been obtained for the organization of any Federal reserve bank, the Federal Reserve Board shall appoint the class C directors and shall designate one of such directors as chairman of the board to be selected. Pending the designation of such chairman, the organization committee shall exercise the powers and duties appertaining to the office of chairman in the organization of such Federal reserve bank.

No Senator or Representative in Congress shall be a member of the Federal Reserve Board or an officer or a director of a Federal reserve bank.

No director of class B shall be an officer, director, or employee of any bank. No director of class C shall be an officer, director, employee, or stockholder of any bank.

Directors of class A and class B shall be chosen in the following manner: The Federal Reserve Board shall classify the member banks of the district into three general groups or divisions, designating each group by number. Each group shall consist as nearly as may be of banks of similar capitalization. Each

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