Full text of Mimeograph Letters and Statements of the Board : Discount Rates, Number 281, Volume 2, Page 434

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-281N6TICE FOR THE PRESS.
June 24, 1915.

The Federal Reserve Board today announced a new departure
with regard to discount rates, approving a rate of

3% for

loans

at

10 days maturity at the Federal Reserve Banks of New York, Philadel­
phia, San Francisco and St. Louis.

)
.The

matter of establishing such a rate has been before' the

Board for-some time past, and has^received very careful investigation.
It was discussed at the recent Conference of Governors in Chicago, and
i

the general idea of 3uch a rate was appfovted.

In'the opinion of the

Board the introduction of the plan just at the beginning cf the cropmoving season may result in extending material assistance to -banks
which desire special accommodation for very short periods*

*

The ■

short term rate is believed likely t^ be an.effective substitute
for call loans based on collateral, and is in line with the policy
of the Board heretofore established of. progressively decreasing
the rate of discount as the maturity ef the paper
shortened, ana as its liquidity

presented is

correspondingly increases-

The

new plan will, it is thought be particularly useful to banks, that
0J

■

i

are memoers of the Clearing 5/vte.i. ind desire from xi^re to ti:.;e to oot-in
short term accommodation for the maintenance of their oalances with the
reserve banks