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Reproduced from the Unclassified I Declassified Holdings of the National Archives


— /
AUGUST 8, 1934
Of f t ? / 1 * /

There were present for the meeting
Governor Harrison, chairman, Governors Norris, Faneher, and
Schaller, and Deputy Governor Burgess, secretary.
At 10?45 a* m.f the committee met with the Federal Reserve Board, there
being present
From the Federal Reserve Board
Governor Black, Messrs* Miller, Hamlin, and Thomas,
Undersecretary Coolidge,
From the Board staff
Messrs. Morrill, Wyatl, Goldenireiser, Martin and Jones*

Governor Harrison reported upon his recent trip abroad, the meeting
having been called at his request for that purpose*
At 12:00 o ’clock the ccumittee adjourned from the Board offices to the
Treasury and, in company with Governor Black, met with Secretary Mbrgenthau, who
discussed with them informally the method of handling silver certificates to be
issued against purchases of silver by the Treasury.

The Secretary stated that

his present plan was to issue up to §100,000,000 of silver certificates, and he
trusted the Reserve banks would cooperate by receiving and paying out these silver
certificates in the normal course of business#
There was some discussion of the method by which these certificates
should be distributed, and it was agreed that further consideration would be given
by the individual meidbers of the committee*
There was also discussion of the method of dealing with any shortage of
tenders for the $150,000,000 of bonds of the Home Owners Loan Corporation being
offered that afternoon*

The meeting adjourned at one o’clock*

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A u t h o r it y

ia t£ b i

Tlie meeting reconvened at 2:15 p* m. in the offices of the Federal
Reserve Board with Governor Black*

Governor Harrison referred to the fact that

at the last joint conference in June the members of the Executive Committee of the
Federal Open Market Committee had been asked to serve as a continuing committee to
study ways and means of aiding the recovery program, as well as to study necessary
changes in the banking system*

It was recognized that there was probably little

specific action, other than what has already been taken by the Federal Reserve
System to aid directly in recovery, except through the extension of industrial
loans under the Act of June 19, 1934*

In this connection, reference was made

to the fact that commercial bankers are reported to be hesitant to participate in
these 5-year industrial loans for fear that such loans will be criticized by bank

Governors Harrison and Fancher were appointed a committee to discuss

this question with the Secretary of the Treasury*
There ensued a discussion of plans for studies of changes in the bank­
ing system*

It was agreed that in order to conduct sue

desirable to place the responsibility on a small group
agreed that Dr. Goldenweiser and Dr. John Williams shou
work and that they should associate with themselves Mr. Walter Stewart if he were
available and, if not, that some other outsider should be considered*


Black indicated that he would like to add to the committee of governors for the
purpose of these studies a member of the Federal Reserve Board, in order that the
Board might have representation on the comnittee*

It was felt that this would be

The Secretary’s report of operations was distributed and considered*
There ensued a discussion of the disposition of profits on securities sold and
those present agreed that it would be desirable to use realized profits to write

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down the book value of government security holdings rather than to distribute them
as income.

It was recognized that this procedure involved a number of accounting

problems which should be given careful study before the end of the year.
Governor Black reported that the directors of the Federal Reserve Bank
of Atlanta had expressed a desire to discontinue the Havana Agency, and reported
that both representatives of the State Department and the principal banks having
branches in Cuba had expressed themselves as opposed to the discontinuance of the

Governor Black pointed out that the law provided that the Board can re­

quire any bank to establish a foreign agency.

He raised the question whether

some means could be devised by which the expenses and risk of maintaining the
agency could be distributed among the twelve Federal reserve banks rather than
having it all fall upon the Atlanta bank.

Governor Harrison suggested that con­

sideration should be given to the possibility of using one or more of the commer­
cial banks having branches in Havana as agencies of the System*

The meeting adjourned at 3:15 p. m.
W. Randolph Burgess