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X-5055 FEDERAL RESERVE :BANK OF NEW YORK November 22, 1927. Dear Governor Young: On November ·17 I forwarded to yo1J. a. copy of the Minutes of the recent Conf-erence of G9vernor.s a.nd .. I ha.ve today :t:o~a.rded a. letter referring speqifica.lly to certain matters act-ed upon a.t the Conference which were submi tted to the Fede:ra.l Reser.ve Board for its advice a.nd approval or upon which the :Board ha.s asked for the opinion or r.ecommendation of the Confer-ence. As indicated in .the Minutes a.s.well as in the letter of today•s dat·e, the Conference vot·ed (see paragraph 17, ·Secretary's Minutes) tha.t in its opinion it would be advisable for the .Federal Reserve :Board to call a conferenc-e of the counsel of the several Federal reserve batiks in Washington at a reasonably to consider the e~ly vario~s le~l date to meet with Mr. Wyatt and Mr. :Baker questions pending before the System. While the Conference voted to request the counsel of the several Federal reserve ' . banks to bring to that meeting, if called, a.n:y legal questions now pending before them which they thi~ should be submitted to the meeting, nevertheless~ I was asked as Secretary of the Conference to submit to the :Board a list of thoae questions pending before the Conference of Governors which it was thought should be considered by the Conference of Counsel. For your informa- tion I am glad to list below the topics referred to. (a) Wha.t effect will ruling of Supreme Court of Texas that trade acceptances are non-negotiable which bear the legend - "The obligation of the acceptor -2- hereof arises out of the purchase of goods from the drawer, ma. turi ty being in conforr.1i ty with the original terms of purchase 11 -have upon the negotiability of barucers acceptances containing similar lanc;uage, e. g., 11 This accepta.."lce arises from the donestic storage of cotton and was secured at tir.:1e of acceptance by documents securing and conveying title to --- bales and will remain so secured throughout the life of this acceptance. 11 (b) In view of recent decision of Supreme Court of Kansas (Colorado and So. Railway Co. vs. Docking, Receiver of American State Bank, 124 Kansas, 48), in which it was held that directions contained in cash letters to remit by draft, changed the relationship between the forwarding bank and collecting bank from principal and agent to that of creditor and debtor: Vfhat change, if any, should be made in methods of procedure no~ followed to obtain imr.1ediately available remittances for cash letters? (c) The action of certain member banks in stamping on cashier's checks the phrase 11 not payable through Federal reserve banks. 11 (d) The action of member banks in stamping on cashier's checks the phrase 11 Payable in New York Exchant;e. 11 (e) The par clearance case of the State Bank of Hugo, Minn. (f) The individual reports by each Federal reserve ba11k outlining the procedure followed by each bank in handling cash and non-cash collections. These reports were prepared as a result of a request made at the Spring Conference of Governors to be submitted to Mr. Eaker for his review and recom.nenda.tions. (g) The right of a Federal reserve bank to charge to the reserve account of a.."l insolvent member ba:ik checks received by the Federal reserve bruik for collection and transmitted to the member ba..Jk for payment prior to the insolvency. (See Board letter (X-4976) dated October 1927. In the opinion of tho Governors Conference all of the.se topics listed above should be subnitted to the Conference of Cotu1sel of the Federal f .. ~. X-5055 -3- ' reserve banks for their consideration if tho Federal Reserve Board agrees with the bovernors that such a conference should be called. Very truly yours, GEORGE L. HARRISON, Secretary, Governors Conference. Honorable R. A. Young, Governor, Federal Reserve Board, Washington, D. C.
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