The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
Ex-Officio Member* r.9. W. HARD1N6, SOVERROR PAUL M. WARBURO, Vice 0 OVRRN0 R FREDERIC A. DELANO ADOLPH C. MILLED CHARLES S. HAM U N W ILU AM 6 . MCADOC SECRETARY OF TOE T i l U t n CNAMMM JOHN SKELTON WILLIAMS COMPTROLLER OF THE CURRENCY FEDERAL RESERVE BOARD WASHINGTON H. PARKER WILLIS, SECRETARY SKERNAN P. ALLEN. AMT. SECRETARY ANO FWCAL AOEMT AB D R E U REPLY TO __ FEDERAL RESERVE BOARD x-331. August 15, 1917* * Dear Sir: Tho Board is advised that several of. the Federal rosorve banks havo recently requested the Federal Reservo Rank of Hew York to buy acceptances for thoir account# That particular institution is very wisely, in tho opinion of tho Board, not investing its funds in tho market at this time, but is on tho contrary liquidating its maturities* In order to fill tho orders which have been received from othor Federal reserve banks, tho Hew' York Bank has boon selling to them from its own portfolio* From tho standpoint of tho Board, tho re is no objection to this, bocause tho cash and ros^rvo position of the system as a w ’ -ole, is not affoctod* Tho Federal reserve banks, however, should not request the Federal Reserve Bank of How York, or any othor Fodsral reserve bank to make purchases in the market for their account, at a time liko the present, when the intermediary bank is not buying for its own account; in other words, while there is no objection to having Federal reserve banks participate if mutually agreeable, in tho purchases which hav~ already boon made by the two or thr^o banks which hold the bulk of acceptances, tho Board does not feel that additional purchases should be oncouragod at this timo, and believes that tho Fodoral rcservo banks should adopt tho policy of strengthening their position while money is oasy, and that they should not seek investments for the sako of tho income to be dorived therefrom* The banks will have amplo opportunities to increase their earnings during tho periods of payments for government loans* - Very truly yours, / Governor-
@FedFRASER