"The maximum number of veterans for which these homes can now afford accommodations is about 20,000, and there are at this time more than 18,000 being accommodated. The increase during the past two years has been over 3,000 and will continue by reason of provisions of the act of Congress approved March 26, 1928, as follows: "The following persons shall be entitled to the benefits of the National Home for Disabled Volunteer Soldiers, and may be admitted thereto upon the order of a member of the Board of Managers, namely: Honorably discharged officers, soldiers, sailors, or marines, including women commissioned or enlisted, and Army and Navy nurses under commission, enlistment, appointment, assignment, or contract since April 21, 1898, who served in the regular, volunteer, or other forces of the United States, or in the Organized Militia or National Guard when called into Federal service, and who are disabled by disease or wounds and who have no adequate means of support, and by reason of such disability are either temporarily or permanently incapacitated from earning a living.' 666 "Testifying before a subcommittee of this committee, February 7, Gen. George H. Wood, president Board of Managers of the national home, stated in part: "As a result of the heavy increase in membership, at a meeting of our board last March, 1928, the executive officers were ordered to make a survey to see what we needed and what we ought to ask for, and whether we would be able with out present facilities to meet the needs of the disabled veterans who are entitled to our service. This survey was made by me, and certain recommendations were made to the board with regard to additional facilities at several of the branches. In this survey I stated: """As another part of our program for the legislative year 1928-29, I feel that we should recommend to Congress the establishment of a home somewhere in the Southern States. At present we have no home south of Johnson City, Tenn.; and as the last two wars were fought by men from all sections of the country, we are having a very heavy demand for our services from Southern States.' "This recommendation, included in my survey, was unanimously adopted by the board, and I was directed to submit the matter to Congress, which I did in the letter transmitting our proceedings to Congress. That simply contains the same recommendation I made, approved by the board, and submitted to Congress for consideration. ""The reason that induced the board to take this action was, of course, the fact that we needed additional facilities. Whether it would be better to group them in our present homes is a question. We do feel, however, that there is a maximum number that can be satisfactorily taken care of in one branch home, so as to give that careful attention to the work by the officers, which they should give to it. "There was a limit to what we could build up. Therefore we determined that it would be wise to establish an additional home, and the board felt that, as 87 per cent of our present population is made up of men who served in the SpanishAmerican and World Wars, the recruits for which armies were taken from all States of the Union, it should be located some place in the South, in justice to the southern tier of States. "Another thing, we have a large number of men coming from those States. and when they make application for admission we have to ship them to the home where we have facilities, which, in some cases, is many hundreds or thousands of miles from their homes; and so, we have felt that it would be an act of justice and an act of consideration to disabled veterans applying for admission to the National Military Home from the Southern States to have a branch home where they would be nearer to their homes and their families, which is something to be considered in any work of this kind. "A third proposition, which is important from the administration standpoint, is the fact that a home in a very mild climate, which could be established in the southern tier of States, would be very much less expensive in operation. One of the heavy items of maintenance we have in all of our northern homes is coal. Our coal bill is one of the heavy expenses of operation, whereas if we had a home in a more genial climate that cost of operation would be less; and, of course, that is something quite important for the Government. Then we find that sixty-odd years after the original homes were established for the benefit of soldiers of the Civil War, we have a large number of those soldiers still in our homes, and we must figure that any building we do now should not be for the next two or three years, but for the next 50 years at least. "The facilities contemplated at present time would not provide for more than 1,500 additional members; and I think they will soon be taken up by those veterans we are getting in every day. I think the need for another branch home is necessary if we propose to keep up with demands; and, of course, as it takes time to build, we should build ahead.' "Branches of the National Home for Disabled Volunteer Soldiers have been established throughout the country from Maine to California. "The number of applicants is increasing rapidly, due to liberal provisions of the act of March 26, 1928, incorporated in this report. "Should a branch of the home be established in the far South, it would accommodate veterans from that section as well as veterans from all other sections of the country. "It is believed that the establishment of a branch of the home in Florida would, from the standpoint of economy of operation, climate, and beneficial effects from an abundance of sunshine, prove advantageous to the Government as well as to disabled veterans of all wars. "" GRANTING THE FEDERAL RESERVE BOARD DISCRETIONARY AUTHORITY IN THE MATTER OF ASSESSMENT OF COSTS OF EXAMINING MEMBER BANKS AGAINST BANKS EXAMINED MAY 26, 1930.-Referred to the House Calendar and ordered to be printed Mr. MCFADDEN, from the Committee on Banking and Currency, submitted the following REPORT [To accompany S. 485] The Committee on Banking and Currency, to whom was referred the bill (S. 485) to amend section 9 of the Federal reserve act and section 5240 of the Revised Statutes of the United States, and for other purposes, having considered the same, report favorably thereon with the recommendation that the bill do pass. This bill changes the present law so that the matter of charging State member banks for examinations and credit investigation of them, made by the Federal reserve banks, is optional with the Federal Reserve Board. 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, dated April 24, 1930, addressed to the chairman of your committee by Deputy Governor Edmund Platt, of the Federal Reserve Board, as follows: FEDERAL RESERVE BOARD, Washington, April 24, 1930. Hon. LOUIS T. MCFADDEN, House of Representatives, Washington, D. C. In a good many cases if we assess costs against a State member bank for an examination, it puts a double charge on the bank which has already paid similar costs to State examiners. In fact the provision requiring us to assess costs has been a constant source of embarrassment ever since I have been on the Federal Reserve Board, and the Federal reserve banks have sought various ways of getting around it under the theory that they are making "credit investigations' instead of examinations. In some cases where small State banks are involved it would work a very severe hardship to assess extra costs, particularly in the Western States where they are long distances apart and where railroad fares enter very largely into the costs. No two districts making examinations of State banks operate on exactly the same plan. There are some State banks that are examined by Federal reserve examiners through general consent, the States accepting the Federal reserve examination and perhaps putting a man or two in with our men. That is the case with Rhode Island, where they have only a small force of examiners and where the big banks are examined by the Federal Reserve Bank, of Boston, with full costs assessed. Such cases, of course, present no problem, but even in the Boston district if it becomes necessary to examine a small country bank in Maine or in northern New Hampshire the problem again becomes acute. Generally speaking, I think the Federal reserve banks accept the examinations of State examiners, but in many cases they like to put a man or two in with the State examiners to look over the note cases and to form their own ideas of the policy of the bank and also of the sufficiency of the State examination. In such cases the question always arises whether the Federal reserve bank examiners render any assistance to the State examiners, and, if so, whether there should or should not be a charge. In Pennsylvania, in many cases, the reserve bank charges for the time of their examiner so far as he assists the State examiners. Sometimes that works all right and sometimes the States object and the banks object. Such districts as San Francisco, Dallas, Kansas City, and Minneapolis, where the distances between banks is very great, present the most serious problem. Governor Young, who has had a lot of expereince with all these practical problems, is very much interested in this bill, and I hope it may be possible for the House Banking and Currency Committee to take it up, report it out, and put it through. Yours very cordially, EDMUND PLATT. In conformity with section 2a of Rule XIII of the House Rules, there is herewith printed sections 9 and 21 of the Federal reserve act, as they will read with the amendments proposed in this bill, such amendments being printed in italics, and the part to be stricken out in brackets, as follows: SEC. 9. Any bank incorporated by special law of any State, or organized under the general laws of any State or of the United States, desiring to become a member of the Federal reserve system, may make application to the Federal Reserve Board, under such rules and regulations as it may prescribe for the right to subscribe to the stock of the Federal reserve bank organized within the district in which the applying bank is located. Such application shall be for the same amount of stock that the applying bank would be required to subscribe to as a national bank. The Federal Reserve Board, subject to the provisions of this act and to such conditions as it may prescribe pursuant thereto may permit the applying bank to become a stockholder of such Federal reserve bank. Any such State bank which, at the date of the approval of this act, has established and is operating a branch or branches in conformity with the State law, may retain and operate the same while remaining or upon becoming a stockholder of such Federal reserve bank; but no such State bank may retain or acquire stock in a Federal reserve bank except upon relinquishment of any branch or branches established after the date of the approval of this act beyond the limits of the city, town, or village in which the parent bank is situated. In acting upon such application the Federal Reserve Board shall consider the financial condition of the applying bank, the general character of its management, and whether or not the corporate powers exercised are consistent with the purposes of this act. Whenever the Federal Reserve Board shall permit the applying bank to become a stockholder in the Federal reserve bank of the district its stock subscription shall be payable on call of the Federal Reserve Board, and stock issued to it shall be held subject to the provisions of this act. All banks admitted to membership under authority of this section shall be required to comply with the reserve and capital requirements of this act and to conform to those provisions of law imposed on national banks which prohibit such banks from lending on or purchsing their own stock, which relate to the withdrawal or impairment of their capital stock, and which relates to the payment of unearned dividends. Such banks and the officers, agents, and employees thereof shall also besu bject to the provisions of and to the penalties prescribed by section 5209 of the Revised Statutes, and shall be required to make reports of condition and of the payment of dividends to the |