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FEDERAL RESERVE 10.AHD ST ilTEMENT FOR Th"E PHESS X-1733 For release to morning papers, Wednesday, January 7th. The conference of representatives of the clearin6 houses from various parts of the Country assembled at Washington ye~terday for the purpose of discussing the relation of the rates of interest paid on deposits to the Federal Reserve bank discount rates, concluded its session with the adoption of the following resolution: WBEREAS the Federal Reserve :,~oard.has invited the representatives of the clearing houses from various parts of the country, here assembled, to attend a conference in regard to the interest rates paid on deposits throughout the country, and Governor Harding of the Federal Reserve board, has ou tlin.ed very clearly the present financial situation and the probability of advances in rates by the Federal Reserve banks 1 and WEEBE.AS it is the opinion of the conference that the present wethod in several of the lare,er centers of the country of re,sulatin~ :i.nterest on bank balc..nces, by a sliding scale, based upon the ninety day Federal Reserve Bank discount rate 7 is not wholly satisfactory 1 and WHEilli.AS until more satisfac.to:r.y regulations are adopted governing the rates of inte:c·es t to be paid on balances it is most important that existing regula ~;ions should not be abrogated, end WHEREAS it is the opi.nion of t.b.is conference that the Feder a 1 Reserve Banks should alwa;ys be f:i.~ee to es tab li.sb their rctes of disr;Ol;.nt without reference to any cJ.ea:.:-ing house regulations as to the payment of :i.nterest, and WHEnEJ.S it is the opinion of this conference that the payment of high rates of interest on bank or commercial balances :i.s unsound. ard is bad banking, and that every effort should be made to avoid. such a p1·ac ttce, 79 X-1766 -2- NOW THEREF0"8E in order to make progress along safe and conservative lines, it is requested that the Federal Reserve Board invite the Clea.t·ing houses in each Fede1•al Reserve City to select thr:::e (3) representatives from its Federal Reserve district to attend a meeting·to be held on o£· a:buu~ the 23l:d day of ,January, 1920, at Chicago, Illinois 1 to consider this whole question -of intarest on balances in order that some basis may be agreed vpon tha·i; will te mutually sat5.sfactory, conducive to conservative banking and benefit the entire business and banking com~unity. The Federal Reserve Board announces that pursuant to the request cuntained in the fore;;;oinb resolution it has instructed the Chairn1en of the several Federal Reserve banks to invite the clearing bouse in each Federal Reserve city to select tl~ee representatives frou its Federal Reserve district to attend such a meeting to be held in Chicago on January 23rd next. January 6, l;J20f
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