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FEDERAL RESERVE BOARD WASHINGTON address official correspondence t o the federal reserve board X-9037 Deceuber 4 , 1934. Dear S i r : In accordance r/ith the Board's telegram of Kovember 28 c a l l i n g a conference of the chairmen of the Industrial Advisory Corcuittees, to he held i n Washington on Tuesday December 18, 1934, there i s i n c l o s e d a l i s t of t o p i c s suggested by the Board f o r cons i d e r a t i o n a t that conference. I t w i l l be appreciated i f you w i l l mail or wire, i n time to reach the Board not l a t e r than Monday morning December 10, a l i s t of any a d d i t i o n a l t o p i c s you would l i k e t o have discussed a t the conference. Very t r u l y yours, Inclosure Chester M o r r i l l , Secretary. CH&IBMTS OF EACH INDUSTRIAL ADVISORY (XMIITT15E X-9037FOR DISCUSSION WITH THE CHUBMTO OF THE INDUSTRIAL ADVISORY COIfi/IITOBES 1 . flhat i s f e e l i n g i n regard t o operation of S e c t i o n 13b "by t h e Federal Reserve "banks, ( a ) Among i n d u s t r i a l i s t s , whether p o t e n t i a l borrowers or not? (b) Among other b u s i n e s s leaders? ( c ) Among f i n a n c i a l i n s t i t u t i o n s ? 2. Need f o r working c a p i t a l f o r industry and commerce. (a) Has experience i n d i c a t e d that there was a substant i a l need not being met through u s u a l sources of credit? (b) I f such need now e x i s t s can i t be adequately met under t h e present S e c t i o n 13b? 3 . Assuming that there w i l l be a continuing need f o r 13b advances or commitments, (a) Will a p p l i c a t i o n s f o r the most part take the form o f : (1) A p p l i c a t i o n s f o r d i r e c t advances, (2) A p p l i c a t i o n s i n v o l v i n g separate advances by the Federal Reserve bank and by f i n a n c i n g i n s t i t u t i o n , or ( 3 ) A p p l i c a t i o n s from f i n a n c i n g i n s t i t u t i o n s f o r commitments covering proposed advances. (b) Should the r a t e s charged by the Federal Reserve banks be so f i x e d as t o encourage amplications under 1 , 2 or 3 above? 4 . Recognising that subsection "a™ of S e c t i o n 13b i s designed t o meet emergency s i t u a t i o n s , should i t be a permanent p r o v i s i o n of law, and i f s o , should i t be amended a s regards: ( a ) Requirement t h a t applicant be unable t o o b t a i n r e q u i s i t e a s s i s t a n c e from u s u a l s o u r c e s . W 9 %.9037-a (b) Requirement t h a t loans "be f o r working c a p i t a l purposes. ( c ) Requirement that loans be made on a reasonable and sound b a s i s . (d) Requirement that loans be confined t o e s t a b l i s h e d businesses. Should s u b s e c t i o n N n b of S e c t i o n 13b be a permanent p r o v i s i o n of law, and i f s o , should i t be amended as regards; (a) Authorization o f advances through f i n a n c i n g i n s t i t u t i o n s other than member banks. (b) Amount o f o b l i g a t i o n as t o l o s s s u s t a i n e d . ( c ) A u t h o r i z a t i o n of separate loans by Federal Reserve banks aad by a f i n a n c i n g i n s t i t u t i o n on which repayments are made pro r a t a . Would the making of loans f o r working c a p i t a l purposes presumably have been conducted more e f f e c t i v e l y i f Intermediate Credit Banks a f f i l i a t e d w i t h the Federal Reserve banks had been s e t up f o r t h i s purpose a s provided i n the f i r s t b i l l proposed by the Federal Reserve Board? I f s o , why? What has been experience a s regards a p p l i c a t i o n s ? (a) Bxtent to which f e a r of r e j e c t i o n and of p o s s i b l e adverse e f f e c t upon a p p l i c a n t ' s c r e d i t standing has discouraged submission of a p p l i c a t i o n s . (b) Extent of and reasons f o r withdrawal of a p p l i cations . ' ( c ) I s character of a p p l i c a t i o n s improving" I s the proportion of a p p l i c a t i o n s f o r d i r e c t advances declining? (d) Has there been any s u b s t a n t i a l number of comp l a i n t s of a l a c k of courtesy on the p a r t of the Committee or of o f f i c i a l s or employes of Federal Reserve banks? / 380 • 3 • X-9037-a ( e ) l a t h e r e any evidence that Federal Reserve "banks are r e q u i r i n g an e x c e s s i v e amount of c o l l a t e r a l t o secure loans? ( f ) I s t h e r e evidence of any other ground f o r c r i t i c i s m of e i t h e r the committees or the "basks? 0 . Assuming that more p a r t i c i p a t i o n s "by and commitments t o f i n a n c i a l i n s t i t u t i o n s are d e s i r a b l e , what i s your recommendation as t o how to "best obtain the cooperation of f i n a n c i a l i n s t i t u t i o n s t o t h i s end? 9 . Has t h e Federal Reserve bank taken adequate measures t o b r i n g t o the a t t e n t i o n of f i n a n c i a l i n s t i t u t i o n s , and p a r t i c u l a r l y of member banks, the advantages t o them o f a c t i v e l y seeking out commercial and i n d u s t r i a l e n t e r p r i s e s i n t h e i r t e r r i t o r y i n need of a d d i t i o n a l working c a p i t a l and f u r n i s h i n g such c a p i t a l under the p r o t e c t i o n of a commitment from the Federal Reserve bank? 10. What, i n your experience, has been the most important s e r v i c e rendered i n d u s t r y and commerce under S e c t i o n 13-b? 11. Has t h e a d m i n i s t r a t i o n of S e c t i o n 13-b to d a t e had any e f f e c t not shown i n r e g u l a r reports of Federal Reserve Banks on t h e e x t e n s i o n of c r e d i t through regular and usual channels t o i n d u s t r y and commerce by p r i v a t e f i n a n c i n g i n s t i t u t i o n s ? 12. Recommendations, not covered elsewhere, on the s u b j e c t of t h e a d m i n i s t r a t i o n of S e c t i o n 13-b.
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