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W. P. G. HARDING, GOVIRNOR PAUL M. WARBURG, YICI GoVERNOR FREDERIC A. DELANO 0 ADOLPH C. MILLER:.;'. ';)!: CHARLES S, HAMLI'tr EX·OP'P'ICIO MEMBERS A WILLIAM G. McADOO SECRETARY OF THE TREASURY CHAIRMAN JOHN SKELTON WILLIAMS FEDERAL RESERVE BOARD COMPTROLLER OF THE CURRENCY WASHINGTON H. PARKER WILLIS, SICRUARY SHERMAN P. ALLEN, ASIT, SICR!TARY AND fiSCAL AGENT ADDIUtSS RIEPLY TO FEDERAL RESERVE SOARD X•l075. July 19, 1918. Dear Sir: The Board has received a letter from one of the Federal Reserve agents suggesting that, in view of unusual conditions now prevailing, the present is an opportune time for the enforcement of a rule providing for &igned· statements to accompany notes of• fered for rediscount. The letter expresses the opinion that the necessity for rediscounting is now so urgent that the banks would be willing to conform to a requirement of this sort, and with the explanation that the step is in line with proper conservatism in the handling of paper, that no opposition wo.uld be manifested, but that · banks would comply with the re·qulrements without objettion. partie.. ularly as the banks. geherally .understand ·ncm. better than they for. . merly did the advantage of obtain~ statements. This letter bas· been considered by the Boar4t which is of· the opinion that .it may be desir-able to have Federal Reserve banks require that signed statements accompany n~tes offered for rediscount, il.b(\rlit is possible. that these statements may :tJe elaborated so as to show the purpose fo~ ~hich the credit was grantedr 'lhe Board be- . liews that th:ts would have an important bearing upon the question ·J x-lo7s - 2- 44 of whether or not the credit is essential, and might be effective in curtailing non-essential credits. Vfuile it does not seem necessary that this matter should be covered by regulation~ as it is within the exercLqe of a proper au- thority by the directors of the Federal Reserve banks to require a statement; it is deemed desirable that uniform action be taken in all districts; and the Board would therefore appreciate an expression of the views of your Executive Committee or of ybut directors bn this subject. Very truly yourst Governor
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