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At a regular meeting of the Federal Reserve Board held in the Board Room on Monday, November 12, at 3:05 P. M., PRESENT: Mr. Harding, presiding, Mr. Delano, Mr. Warburg, Mr. Allen,,Assistant Secretary. Mr. Hamlin, Governor Harding stated that finding that Mr. J. F. Curtis, Counsel of the F. R. Bank of New York, was in Baltimore, he had requested him to come before the Board to discuss the attitude of the Board toward the 90-day notes of the American Tobacco Company and the Goodrich Rubber Company, which were issued with a.two year renewal privilege. Yr. Curtis stated that Mr. Wiggin of the Chase Securities Company, had discussed with Governor Strong the matter of the renewals referred to and that the question of acceptances to cover the same loans had been taken up with Mr. Curtis, but abandoned. A proposed agreement with the Goodrich Rubber,Company had been brought to the Federal Reserve Bank of New York and dis- cussed with Mr. Curtis, but he had said that he could not approve it. The announcement of the proposed loans then cnme in the newspapers, following which Governor Strong had telegraphed to the bank about the matter. Mr. Curtis said the bank felt morally committed in the matter because of a statement by Governor Strang, and was anxious to have the Board, while maintaining the position which it had outlined in its statement to the newspapers on the subject, allow the benk to exercise some discretion as to rediscounting the notes in question. He stated that at the time the matter was presented, Governor Strong was very much pressed with work, and in a highly nervous state due to his being overtaxed. Mr. Curtis said Mr. Jay had stated that if the notes were otherwise eligible the bank did not care what the contract was between the bankers and the companies. Mr. Curtis thought about forty banks were in one syndicate and forty-five in the other. Governor Harding stated that Mr. Stetson, of the Guaranty Trust Co., had said that the two banks involved would release the members of the syndicate. Mr. Curtis in closing his statement asked that the New York Bank be allowed to rediscount the paper of the American Tobacco Company and the Goodrich Rubber Company if the member banks holding it were pinched or had no other paper for rediscount. He then retired frwl the Board Room and there was discussion of the matter by the Board, after which Mr. Curtis was summoned and Governor Harding stated as follows: "We have decided we will stnnd on our statement as given to the press. We think this paper an undesir- able investment to make. We do not believe that in the face of our statement the Federal Reserve Bank would rediscount any of this paper. If the question comes up again we win cross that bridge when .-.70 get to it." Mr. Curtis replied that he feared an absolute closing down might have embarrassed the bank very much and also Governor Strong. In reply to this Mr. Hamlin said that from the remarks of Mr. Curtis it seemed as if he thought the Board hnd decided that while undesirable as a whole, the Bank in particular cases, might exercise its discretion, and to remove any doubt he added: "Please understand that we are not opening any door by our decision, on the contrary, we have closed it." The minutes of the meeting of November 9 were read and approved. The minutes of the conference hald with Governors on November 8 and 9 were referred to M . Hamlin for examination and approval. Discount rates at San Francisco as indicated by a letter from Federal Reserve Agent Perrin, dated November 5, were noted. Attention 7tas called to a letter from Clarence V. Tiers, Paying Teller of the Dollar Savings Bank of Pittsburgh relative to withdrawals in. gold by GermanAmericans, and this was ordered to be sent to Federal Reserve Agent Ville, of the Cleveland District, asking . his attention. Formal approval was given to a salary of $1200 per year for John Thomas Schram, whose employment had been previously authorized by the Board. Letters from Federal Reserve Agent Wills stating progress made in connection with the preliminary organization of branches of'the Federal Reserve Bank of Cleveland at Cincinnati and Pittsburgh were noted. Authorization was given to send to the Federal Reserve Bank of Dallas without indicating names, the salaries of officers and directors of various banks of similar size to that of Dallas, for their guidance in the revision of the salary list. The request of the Treasury Department for rip- proval by the Board of a plan for the payment of coupons of United States bonds by Federal Reserve Banks acting as Federal Reserve Agents, was noted and given the approval of the Board. \ Governor Harding called attention to the letter of Counsl in connection with the complaint of Thomas L. Jones Company, Louisville, Ky., as to exchange charges, and the letter was approved subject to minor changes as suggested. Reports from Committee No. 2 were acted upon as follows: Discount rates at Philadelphia: The report of the Committee, which was approved by the Board, provided for the following increuse in rate for 15-day paper, including member banks' collateral notes, from . to 4. 'Increase in 90-day Liberty Loan rate to 47,, rate to go into effect a few days after November 15. 15-day rate for collateral notes secured by Liberty Bonds or certificates of indebtedness; decision withheld until November 15. Uargin of to be maintained between trade accept- ances and commercial paper of similar maturity, a bank to - make an additional charge of ten cents per item for each item under $50.00. Application of the Federal Reserve Bank of Philadelphia to take q50,000 warrants of the County of Gloucester, N. J., from the Farmers & ;Jechanics National Eank of Woodbury, N. J., due January 2, 1918, recommended by the Committee, and approved by the Board. Applications of the Importers a Traders National Bank of New York, recommended by the Federal Reserve Bank t National Bank of of New York, and the Massasoit-Pocass, Fall River, Mass., recommended by the Federal Reserve Bank of Boston, to accept up to 100t, recommended by the Comittee and approved by the Board. Reports from Committee No. 3 -- Clayton Act -were approved as follows: Recommending that no further action be taken in connection with a list of what were regarded as possible interlocking directorates, furnished by the Comptroller of the Currency on October 30, 1917. A report to the effect that no further action was necessary in regard to R. Laker -,nd H. A. Woe, directors of the American National Bank, Austin, Texas. Committee No. 3 also reported in favor of answering in the affirmative the following inquiry from Federal Reserve Agent Perrin; "Are trade acceptances originating outside hut payable inside this country subject to stamp taxes? Are acceptances originating inside but payable outfUde subject to stamp taxes.?" Mr. Warburg reported for Committee No. 2, recommending favorable action upon the following applications frcm State banks for admission to the system' United States Mortgage & Trust Co., New York. Zxchange Bank of Kentucky, Mount Sterling, Ky. Lapeer Savings Bank, Lapeer, Mich. Hillsboro Bank & Savings Company, Hillsboro, O. Columbia Trust Company, New York. B. Dansard t Sons State Bank, Monroe, nch. Farmers State Bank, Spring Valley, Minn. !Ir. Williams entered the meeting at this point. At the suggestion of Nr. Warburg, Form Federal Reserve Agent X-26, giving maturity of paper held by the Feder91 Reserve Agent, was authorized abondoned. Mr. Hamlin reported informally to the Board that in a telephone cenversation with Mr. Curtiss of Boston he had been informed that Charles A. Mores had been recom- mended for Governor of the Federal Reserve Bank of Boston by a committee or its directors, but that action upon the recolmeneation had been postponed for two weeks. Mr. Hamlin was authorized to inform Mr. Curtiss that it would be necessgry for him to come to Washington to discuss the matter. At 5:00 p. m. the Board adjourned. APPROVED: Chairman. Secretary.
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