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SIXTH CONFERENCE O F GOVERNORS
TO B E HELD A T WASHINGTON, D . ¢.,
JANUARY 19, 1916.
P R O G R A M M E
Election o f officers o f t h e Conference f o r t h e year 1916.
Minutes o f t h e Fifth Conference o f Governors.
Committee t o wait upon Federal Reserve Board,
Report o f the Executive Committee.
M
e
D
o
u
g
a
l
Joint meeting with Executive Committee o f
Federal reserve agents - Nov. 17, 1915.
Meeting o f November 1 8 = 20, 1915.
Meeting o f December 1 4 = 16, 1915.
Report t o Federal Revervé Beard.
Amendments t o Federal Reserve Act.
Unfinishsd business.
(a) M a t t e r s referred t o Federal Reserve Board
(bd) Action taken by Federal Reserve Board.
Joint C o n f e r e n c e s .
(a) With Federal Reserve Board.
(bo) With A. B, A. Committees.
Collections a n d Clearances.
(a) Attitude o f Boards o f Directors o f Federal
Reserve Banks,
M
c
D
o
u
g
a
l
g
a
l
(b) Should Federal reserve banks now be permitted t o receive i n accordance w i t h t h e
schedule f o r deferred credits, c h e c k s o n
member banks located i n other Federal r e serve cities?
M
c
D
o
u
(c) Collections from member banks of other districts,
K
a
i
n
s
Fiscal gency functions,
(a) Transfer o f government funds and appointment
of reserve banks a s fiscal agents.
M
c
W o l d &
D
o
u
g
a
l
(b) Receipt from collectors of checks carrying
exchange charges.
Open Market Operations,
A
S
i
t
) Domestic Acceptances.
_ Trade Acceptances,
) Statements o f private bankers,
Division o f purchases,
k
r
e
o
n
n
g
10,
Gold Settlement Fund.
(2) Ought Federal reserve agents to ship gold deposited with them+to retire Federal reserve
notes t o the subtreasury f o r deposit i n the
Gold Fund?
(b) Advisability of sparating physical custody of
Wold
gold fund between the banks and the Federal
reserve agents.
Strong
(c) Telegraphic code for transfers o f gold in gold
settlement fund between reserve agents and
banks.
Retroactive liability for expenses.
Wold
Kains
(e) Committee to audit for whole year,
5Bs
Internal Operations o f FederalReserve Banks,
( P u b l i c i t y of Federal reserve banks! earnings.
Fancher
( T e r m s o f office o f reserve bank employees
Aiken
Strong
( Publication of reserve banks! salary lists
( R e p o r t o f cormittee o n method o f calculating
dividends.
* Seay
( R i g h t .of a national bank, directly or through
officers, t o act a s agent forinsurance com=
panies,
(f) Weekly report o f net deposits and balances o f
member baks.
12.
Foreign Arrangements.
13,
Accumulation o f Statistics,
1 4 ,
Wold
Aiken
Proposal of National Bank Section of Ay Bs As for joint
conference i n Kansas City.
Report o f National B a n k Section o f A e Bsa A s o n recom=
‘ mendations for legislation.
Reserves o f member banks =
treatment
o f the float,
Applicability o f Federal income t a x t o Federal reserve
banks.
Desirability o f appointment o f a n assistant f o r each
national b a n k examiner,
The purpose o f accumulating gold i n the hands o f Federal
reserve agents b y the issuing o f Federal reserve . .
notes,
The advantage,
i f any, o f t h e @nversion o f U, Ss» bonds
provided for in Section 18,
Member banks under Special Examination.
What should b e the attitude o f the Fxecutive C o m =
mittee i n passing upon discounts f o r such banks,
and what w o u l d b e a reasonable l i n e o f discounts
to extend?
Press Stabments - advisability of publishing conference
recommendations.
Nekt meeting.
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MeCord
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amorandum o f
a t Me
Consideration
Suggested f o r
4
f
a
hi
W
es :
held
Banks
Federal Reserve
G o v e r n o r s of
5 glo.
na n uu a ar 4y 19,
First:
Section ll of the Federal Reserve Act gives the Board power,
"T> a d d t o t h e number o f cities classified a s reserve
and central reserve cities", etc.
Under this authority, t h e Federal Reserve Board could name t h e city
in which e a c h Federal Reserve B a n k i s located a s a central reserve
Cusy
T h e immediate effect would i s 4 4 increase t h e reserves o f those
cities from fifteen t o eighteen per cent, a n d a t the same time cause
a transfer o f reserves i n those cities t o t h e Federal Reserve Banks,
both o f which objects are desirable, a n d more easily accomplished a t
a period o f easy money and excess r
T
h
e Federal Reserve
Board would b e very glad t o have a recommendation from the Governors
on this subject.
Second:
At the September meeting o f the Advisory Council, i t recommended
to the Federal Reserve Board that Federal Reserve Banks should not
establish joint agencies i n foreign lands, b u t that this field should
bekept open for member banks. S i n c e that time the Federal. Reserve
Board has canvassed the subject through the Federal Reserve Agent of
each District with a view t o ascertaining whether the larger banks i n
the various Districts would be willing to join in the ownership of
branches i n foreign countries.
T h e replies t o these inquiries are
not as encouraging as has been hoved they would b e for i t appears
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Federal Reserve Bank of St. Louis
that while f o r a number o f good reasons i t seems unwise that the
‘ Federal Reserve Banks should undertake t h i s business, t h e r e i s
a great deal o f hesitation o n the part m
m e m b e r banks t o
undertake i t themselves.
A few banks appear t o show a spirit o f enterprise i n
the matter a n d t h e Board believes t h a t under a n y circumstances
the door ought t o be opened a s wide a s possible and that Congress
should b e urged t o d o all i t c a n t o offer t o member banks, s i n g l y
or combined, t h e opportunity o f entering these foreign fields.
In this connection some questions h a v e occurred t o t h e
Board i n considering this matter upon which i t will b e glad t o
have the views o f the Governors.
T h e s e questions are:
(a) Should the proposed amendment provide that others than
member banks b e permitted t o b e stockholders i n these banks which
are t o operate under Federal charters i n foreign countries?
so, should there b e a provision t h a t a
I f
majority o f t h e stock b e
held b y member banks?
(bd) Would i t not be advisable t o provide that there’ should
not b e a double liability with respect t o the stock holdings i n
such banks, b u t only a liability u p t o the authorized capital?
(c) What, i f any, should be the reserve requirements o f
these foreign banks?
I
f they are t o receive deposits i n foreign
countries i t would subject t h e m t o great hazard o f fluctuation o f
exchange i f against these foreign deposits t h e y a r e required t o
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keep reserves i n the United States.
(ad) Should these foreign banks be required t o be members
of the Federal Reserve Systom?
(e) S h o u l d these foreign banks b e permitted t o invest a
definite percentage o f their capital a n d surplus i n holdings o f
foreign banks operating under locai charters?
(£) W h a t restrictions s h o u l d b e placed u p o n these foreign
banks f o r their operations
i n the United States?
F o r instance ~ -
they might b e permitted t o accept deposits o n l y where t h e s e d e posits a r e incidental
the other hand,
t o transactions
i n foreign countries.
O n
i t would appear that t h e y should b e permitted t o
receive deposits o n demand o r on time from other banks, particularly
from those for which they will act as correspondents o r agents i n
foreign countries.
(g) Should these foreign banks be permitted to
should their "bankers' acceptances" b e eligible f o r rediscount
with t h e Federal Reserve Banks?
1/19/16.
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PROPOSED AMENDMENTS TOSECTION, 22
OFTHE
FEDERAL RESERVE ACT
Amend second paragraph t o read a s follows:
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“Other than the usual salary o r director's f e e paid t o any
officer, director, employee o r attorney o f a member bank, a n d
other than a reasonable f e e paid b y such b a n k t o a n officer,
director, employee o r attorney for special services rendered t o
such bank, n o officer, director, employee o r attorney o f a mem-
ber bank shall b e beneficiary o f or receive directly o r indir~ectly, e i t h e r f r o m the bank o r f r o m other person o r persons,
any fee, commission, g i f t o r other consideration f o r o r o n account o f his services, v o t e o r influence a s such officer, d i rector, employee o r attorney, i n connection w i t h o r i n respect
of a n y loan, purchase, sale, payment, exchange o r transaction
with respect t o stocks, b o n d s o r other investment securities,
or notes, b i l l s o f exchange, acceptances, bankers'-bills, c a b l e
transfers o r mortgages made by or on behalf of such bank of
which h e is a n officer, director, employee o r attorney, provided
that this restriction shall n o t b e construed t o cover transac-
tions made i n good faith and i n the ordinary course o f business between a member bank an@ any other person, f i r m o r corporation i n which the compensation i s received b y such officer, director, employee o r attorney f r o m such other person, f i r m o r corporation, a n d i n which s u c h officer, director, e m p l o y e e o r attor=ney takes n o part o r has n o vote i n behalf o f the member bank.
No examiner, public o r private, s h a l l disclose t h e names o f bar-
rowers o r the collateral for loans o f a member bank to other than
the proper officers o f such bank without f i r s t having obtained
the express permission i n writing from the Comptroller o f the
Currency o r from the board o f directors o f such bank, except w h e n
ordered t o d o so by a court o f competent jurisdiction o r by direction o f the Congress o f the United States, o r of either House
thereof, o r any committee of Congress or of either House duly
authorized, provided that t h e Comptroller o f the Currency a n d a n y
national bank examiner shall give such information concerning a
member b a n k t o the Federal reserve b a n k o f w h i c h i
t is a member
upon request o f such Federal reserve bank. A n y person violating
any provision o f this section shall b e punished b y a fine of not
exceeding $5,000. o r b y imprisonment not exceeding one year, o r
bot h e =
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G O V E R N O R S
E S H R V E
B A N K S
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SIXTH CONFERENCE O F GOVERNORS
OF THE
FEDERAL RESERVE BANKS
The Sixth Conference o f Governors o f the Federal reserve banks w a s
held a t the Shoreham Hotel, Washington, D . C., o n January 19, 20, 21,
1916.
Mr. Strong, Chairman o f the Conference,
Messrs. Aiken, Rhoads, Fancher, Seay,
McDougal, Wold, Miller, V a n Zandt, Kains,
McCord and Wells; a l s o
Mr. J w F e Curtis, Sec'y o f the Conference.
The meeting was called t o order a t 10:15 o'clock A. M. o n January
19th b y Mr. Strong.
TOPIC # 1 - ELECTION O F OFFICERS O F THE CONFERENCE FOR THE YEAR 1916,
was postponed b y consent.
TOPIC #2 - MINUTES O F THE FIFTH CONFERENCE O F GOVERNORS. -
On motion
it was
VOTED t o approve the minutes o f the Fifth Conference
without reading.
TOPIC
#3 -
COMMITTEE
T O WAIT U P O N F E D E R A L RESERVE BOARD. =
O n motion
it was
VOTED t h a t Mr. Seay b e appointed a committee o f one
to wait upon the Federal Reserve Board.
TOPIC #6 + JOINT CONFERENCES WITH FEDERAL RESERVE BOARD AND WITH
A. B. A. COMMITTEES. -
After a brief discussion o f this topic i t was under-
stood that Mr. Seay would state t o the Federal Reserve Board that this Conference proposes holding a joint meeting with the committee o n Federal Legislation and ths wantudaue Committee o f the National Bank Section o f the American Bankers Association o n January 20th, such joint meeting having been arranged a t the request o f the committees o f the A. Be. As, and also that this
Conference holds itself i n readiness t o meet with the Federal Reserve Board
at its convenience.
At this point Mr, Seay retired from the conference room to call
upon the Federal Reserve Board.
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TOPIC #14 - PROPOSAL O F NATIONAL BANK SECTION O F A. B. A. FOR
JOINT CONFERENCE I N KANSAS CITY. =
A
letter f r o m the Secretary p r e t e m
of the A. B, A., dated January 3, 1916, was submitted b y the Chairman.
After a
brief discussion,
a n d o n motion d u l y made q n d seconded,
i t was
VOTED t h a t Mr. Curtis b e requested t o write Mr. Farnsworth, conveying t o him our appreciation o f his invitation
and stating that w e are not yet able t o determine whether
there will b e any necessity for a business meeting o f the
governors o f the reserve banks a t the time o f the confer~ence o f the A. B e A., and that i f the invitation should not
be accepted b y the Governors! Conference a s a body, t h e sentiment, however, w a s that t h e governors w o u l d individually
be very glad t o attend the convention, a n d that a further
reply will b e made a t a later time.
TOPIC # 4 - REPORT O F THE EXECUTIVE COMMITTEE. ~
M r . McDougal,
in behalf o f the committee, submitted a report which will be found o n pages
14 to 19 inclusive of the stenographic minutes. Whereupon it was
VOTED t h a t the report o f the Executive Committee b e
received and filed and that the Conference take u p i n order the various matters acted upon b y the Executive Committee for approval o r comment.
At this point Mr. Wold joined the meeting.
In accordance with this vote the first matter discussed was the
action o f the Executive Committee i n referring the matter o f the proposed
amendment t o the Federal Reserve Act authorizing the membership o f savings
banks t o the Conference o f Federal Reserve Agents. W h e r e u p o n i t was
VOTED t h a t the action o f the Executive Committee i n this
regard b e approved.
The Chairman then made ‘ brief statement o f the action o f the Ex-,
ecutive Committee taken a t the joint conference o f the Executive Committee
with the Federal Reserve Agents, a n d indicated the subjects which had heen
tentatively assigned for consideration b y the Conference o f Federal Reserve
Agents. W h e r e u p o n i t was
VOTED t h a t t h e action o f the Executive Committee i n
this regard b e approved.
At this point Mr. Kains joined the meeting.
The Chairman stated that t h e next action o f the Executive Committees
was with respect t o the proposed clarifications o f Section 13, 14, 15, 16, 1 8
and 2 2 of the Federal Reserve Act, a n d also stated that a memorandum o f the
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proposed amendments had been forwarded t o the governors o f each o f the banks,
At the request o f the conference, Mr. Curtis explained the purposes o f the various amendments t o these sections. W h e r e u p o n the following proceedings were had:
SECTION 13: Paragraph 2, third line o f proposed amendment, change the
word “or™ t o “and.”
During t h e course o f the discussion o f the proposed amendments, M r .
Seay returned from the Federal Reserve Board and reported that they would let
the Governors’ Conference know when they desired to have a meeting, and that the
Board would have t w o subjects t o submit t o the. governors f o r discussion, w h i c h
will be presented i n writing at a later time.
SECTION 15: T h e last five lines o f the second paragraph o f the pro#
posed amendment were stricken out, the paragraph a
e n d after the word "determine."
SECTION 16; Paragraph 1, line 12, strike out the words "or at any Subtreasury o f the United States,"
After a discussion o f the proposed amendments t o Sections 13, 14, 15,
16 and 18, a proposed amendment t o Section 2 2 was read b y Mr. Curtis and discussed,
and a copy handed to each of the governors present. Thereafter there followed a
considerable discussion of all the proposed amendments, but no action was had thereon.
The Chairman stated that h e would like t o hold a n executive session a t
this point; whereupon the stenographers left the room and the conference went into executive session,
a t t h e conclusion o f which a
recess w a s taken a t 1 o'clock
pe Me
The conference reassembled a t 2:30 o'clock p. Me
The subject o f proposed amendments t o the Federal Reserve Act was again
brought u p for discussion. Whereupon i t was
VOTED t h a t this matter b e laid o n the table until after the
meeting with the Federal Reserve Board.
The Chairman stated that the next action o f the Executive Committee t o
be brought u p for consideration w a s w i t h respect t o the administrative expenses
of the operation of the Gold Settlement Fund. Whereupon it was
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VOTED t h a t the action o f the Executive Committee and its
recommendation as to the method of dealing with this item of
expense b e approved,
The Chairman stated that the next subject was the action o f the Ex~
ecutive Committes with respect t o the distribution o f future expenses o f moving
gold for the Gold Fund. W h e r e u p o n i t was
VOTED that this subject b e passed, but left upon the
programme for the next conference.
The Chairman stated that the next item o n the report o f the Executive
Committes was with respect t o check collections.
A f t e r considerable discussion
it was
VOTED t h a t the action taken b y the Executive Committee
at the direction o f the Fifth Conference o f Governors with respect t o the check collection plan b e approved.
Mr. Miller desired t o b e recorded a s not voting, a m d Mr. McCord t o b e
recorded a s voting t o receive the report o f the Committee but without committing
himself t o any binding plan,
The Chairman stated that the next action o f the Executive Committee
for consideration was with respect t o the answers t o the five questions submit
ted by the Federal Reserve Board. T h i s matter was passed b y consent until Mr.
Miller had had a chance t o study the reply o f the Committee.
The Chairman stated that the next item covered i n the report o f the
Executive Committee was the matter o f the telegraphic code for transfers between
Federal reserve banks and Federal reserve agents i n connection with the operation
of the Gold Settlement Fund,
T h i s topic was considered disposed o f b y consent.
The Chairman stated that the next item was the matter referred t o Mess.
McKay and Hendricks, which was not discussed i n view of the fact that i t appears
later o n the programme.
The Chairman submitted a n invitation from the Secretary o f the American
Bankers Association for luncheon o n January 20th. Whereupon i t was
VOTED t h a t the invitation b e accepted with thanks.
RESERVE CITIES & CENTRAL RESERVE CITIES - The Chairman stated that he
had just received a memorandum from the Federal Reserve Board o f topics suggested
for consideration a t this conference.
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A f t e r considerable discussion,
i t was
VOTED t h a t i t i s the sense @ f the Conference that the
governors are not i n a position t o make a n adequate reply t o
these questions o f the Federal Reserve Board without a n opportunity for thorough investigation and canvass o f the situation i n the respective cities involved.
whe
(Note;
T h e text o f the questions submitted b y the Federal Reserve
Board will be found o n page 85 of the stenographic minutes. )
BANKING FACILITIES I N FOREIGN COUNTRIES.
T h e Chairman then presented
the second question submitted b y the Federal Reserve Board with respect t o inauguration o f banking facilities i n foreign countries. W h e r e u p o n after considerable debate, i t was
VOTED t h a t i t is the sense o f the conference that ahLoe
to making definite and specific replies t o this question i t
would b e desirable for the governors t o have a meeting with
the Federal Reserve Board and discuss the subject more fully.
(Note:
T h e second question submitted b y the Federal Reserve Board
may b e found o n pages 97, 9 8 and 9 9 o f the stenographic m i n u t e s . )
TOPIC # 5 = UNFINISHED BUSINESS. -
The Chairman stated that the recom~
mendations o f the Fifth Conference o f Governors held a t Minneapolis had been
forwarded t o the Federal Reserve Board, a n d also the recommendations o f the Ex~
ecutive Committee meetings held i n Washington i n November and December last,
but that n o action thereon had been taken b y the Board.
TOPIC # 7 ) COLLECTIONS AND CLEARANCES,
(a) Attitude of boards of directors of Federal reserve banks, Informal expressions o f the views held b y the directors o f the several Federal
reServe banks o n this subject were stated, b u t n o action w a s had
thereon,
(b) Should Federal reserve banks now be permitted t o receive i n ac~
cordance w i t h t h e schedule f o r deferred credits, c h e c k s o n member
banks located
in other Federal reserve cities? -
After a
brief discussion,
i t was
VOTED. t h a t consideration o f this topic b e deferred until the
governors receive a report from the Federal Reserve Board upon the
collection plan submitted t o them
(c) Collections from member banks o f other districts. +
T h i s subject
was passed b y consent,
TOPIC #8 - FISCAL AGENCY FUNCTIONS.
(a) Transfer o f government funds and appointment o f reserve banks a s
fiscal agents, ~
This subject was disposed o f b y consent.
(b) Receipt from collectors o f checks carrying exchange charges. =
After a brief discussion i t wag
VOTED t h a t the Federal Reserve Board b e requested t o take
this matter u p with the proper officers o f the Treasury Departe
ment.
The meeting adjourned at 5:35 p. me until Thursday, January 20th at
10 o'clock a . m
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nS
January 20, 1916.
The Conference reassembled a t 1 0 Ae Ms, and immediately held a
joint meeting with the Legislative Committee o f the American Bankers As~
Spciation a n d t h e Executive Committee o f the National B a n k Section o f the
As
B
e
A
e
PRESENT ;
All governors except Mr. Wells; also
Messrs.
C . A , Hinsch.
J , W. Perry'.ond
W. A. Sadd o f the Legislative Committee
of the Ae B e A y =
Messrs.
Van
the
and
and
J s E o Cox,
O .
J , Sands
a n d W.
M.
Duesen o f the Executive Committee o f
National Bank Section o f the Aw B s A.,
Mr. F, Es Farnsworth, Gen'l Secretary,
Thos. B . Paton, Gen'l Counsel, A,B.A,
Mr, Strong took the chair,
Mrs C o x stated that a l l o
f the recommendations made b y the Executive
Committee o f the National Bank Section a t the joint vonfsrence i n December h a d
been approved a t a meeting held o n January 19, 1916 b y the Federal Legislative
Committee o f the A, B. A s T h e following subjects were then presented f o r dis»
cussion,
J. = INTER-LOCKING BANK DIRECTORATES, -
A
statement i n regard t o
this matter was made b y Mr. Paton, who recommended a n amendment t o the Clayton
Law. A
general discussion followed but n o action was had thereon,
2, » READJUSTMENT O F RESERVES. -
A
statement o n this subject was
made b y Mr. Van Deusen and a brief discussion followed, b u t n o action was had
thereon,
3. - FOREIGN BANKING CONNECTIONS, «
A statement o f this subject was
made b y Mr. Hinsch, a n d a discussion followed, but n o action was had thereon.
At this point Mr, P e r r y joined t h e meeting.
4, ~
CAPITAL REQUIREMENTS. ~
A brief statement o n this subject w a s
made b y Mrs Strong, b u t n o action was had théreon.,.
5. = RETIREMENT O F GREENBACKS. =
A statement was made b y Mr. Saxds
on this subject a n d a discussion followed, b u t n o action was had thereon,
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The joint meeting adjourned at 12:45 p. m, a t which time the stenographers were requested t o withdraw and the conference went into executive
session,
The Chairman presented a letter from the Assistant Secretary o f the
Federal Reserve Board a s follows:
“january 20, 1916.
To t h e Governors o f the Federal Reserve Banks:
The Federal Reserve Board would b e glad t o
meet t h e Governors o f the Federal reserve banks i n a n
executive session i n tne Board r o o m a t 3 o'clock this
afternoon,
(Signed ) S h e r m a n Allen
Assistany Secretary."
The executive session took a recess a t one o'clock for the purpose
of taking lunch with the members o f the committees o f the Ao B y A y
The conference reassembled a t t h e r o o m o f the Federal Reserve Board
at 2 pe m
A s this meeting was considered a n executive session, t n e secretary
did not attend t h e conference,
January 21, 1916.
corference reassembled a t 1 0 o'clock a. m,
L present except Mr. Wells.
Chairman invited the attention o f the conference t o a n article
which h a d eppeared i n the Washington Post o f January 21, 1916, u n d e r t h e
heading "TO CANCEL GREENBACK ~« FEDERAL RESERVE BANKS PROPOSE RETIREMENT O F
WHOLE ISSUE ~ AMOUNTS TO $346,000,000."
B y unanimous consent Mr. Mc Dougal
was requested t o call upon Vice Governor Delano and state t o him that the
article i n qucstion appeared much + o the astonishment o f the goverrors;
was
neither authorized nor proceeded from any of the governors, and that s o far
as the Governors' Conference was concerned, they had been victimized b y the
incaution o f some banker who may have talked t o the publicity man of the
A. B. A e and that all the necessary precautions had been taken a t the Governors' Conference t o impress u p o n t h e committees o f t h e A. B e A s that t h e joint
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“T+
conference held yetterday was t o be considered confidential, a n d further, that
no action had been taken by the Governors’ Conference o n the subject o f the ree
tirement o f greenbacks other than to have a brief discussion o n the matter.
Whereupon Mr, McDougal left the meeting to call upon Vice Governor Delano,
TOPIC #1 = ELECTION OF OFFICERS O F THE CONFERENCE FOR THE YEAR 1916.
After considerable discussion o n this subject, i t was
VOTED t h a t i t is the sense o f the Conference that
1, T h e r e is no longer any necessity for a permanent
organization, with officers and a n Executive Committee.
2. T h a t i n the future the meetings of the Governors should
be called either at. the request o f the Federal Reserve
Board o r by two o r more governors.
3. T h a t the presiding officer of such conferences should
be selected either a t the next prior meeting o r at the
beginning of each meeting; a n d
That for the purpose o f preparing programmes, conducting correspondence and reporting actions o f such con-=
ferences, a suitable officer o r employee i n one o f
the Federal reserve banks b e appointed from time t o
timé to undertake such activities i n behalf of all the
Federal reserve banks.
TOPIC #10 = GOLD SETTLEMENT FUND, (a) Ought Federal reserve agents to ship gold deposited with them
to retire Federal reserve notes t o the Subtreasury for deposit i n the Gold Fund?
After a brief exchange o f views o n this subject, i t was passed without action.
(ob) Advisability o f separating physical custody o f the gold fund be=
tween the banks and the Federal reserve agents,
T h e Chairman read a letter
which had just been received from the Federal Reserve Boatd with reference to
this subject. D u r i n g the discussion of this subject Mrs McDougal returned
and reported that h e had explained the situation with respect t o the publica»
tion of the article i n the morning Post to Vice Governor Delano, who expressed
his appreciation o f h a v i nd agthe
h
matter explained t o him and said that h e
would mention i t to the other members o f the Board. A f t e r further discussion
of this subject i t was
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(
V O T E D t h a t the secretary b e requested t o convey t o
each of the governors b y separate communication, t h e subd-=
stance o f the ruling o f the Federal Reserve Board i n regard
to the separation o f the fundg held b y the Federal Reserve
Board for account of the Federal reserve agents and the Fed-+
eral reserve banks, a n d with the suggestion that the views
of each o f the governors b e finally conveyed t o the Federal
Reserve Board o n that matter, after consulting with counsel
for each bank and the Federal reserve agent o f each bank,
(c) TELEGRAPHIC CODE FOR TRANSFERS O F GOLD I N GOLD SETTLEMENT ‘FUND
BETWEEN RESERVE AGENTS AND BANKS. = This question was considered disposed o f
by the action o f the Federal Reserve Board i n providing a series o f test words
for use i n telegraphic transfers, b u t the question was raised a s t o the advise
ability i n all cases o f code telegrams o f forwarding b y mail a translation o f
the code telegram, W h e r e u p o n i t was
VOTED t h a t the Conference request each a f the Federal
reserve banks t o discontinue the practice o f sending trans~
lated confirmations o f code telegrams.
(d) Retroactive liability for expenses. = During the discussion of
this subject t h e Chairman announced t h a t h e h a d b e e n requested b y
Vice Governor
Delano t o call upon him to discuss the article i n the morning Post. W h e r e u p o n
it. was
VOTED t h a t Mr. Fancher take the chair during the abSence o f the Chairman,
Mr. Strong thereupon left the room to call upon Vice Governor Delano
and Mr. Fancher took the chair,
After considerable debate it was decided without formal action that
this topic might b e passed indefinitely, b u t retained upon the programme for
the next Conference o f Governors,
{e) Committee to audit for whole year. = This subject was passed
temporarily until Mr. Strong's return,
(f). Five Per Cent Redemption Fund. - The Acting Chairman submitted
a letter from the Federal Reserve Board under date o f January 14, 1916, author-
izing payments to be made at the request o f member banks b y Federal reserve banks
franthe Gold Settlement Fund t o the Treasurer o f the United States for the credit
of 5 % Redemption F u n d accounts o f member banks,
After a
brief discussion o f
this topic, i t was developed that none o f the governors o f thé Federal reserve
banks present a t the conference had made any request o r suggestion for the ace
tion taken b y the Federal Reserve Board i n this regard.
There followed a general discussion o f the advisability o f improving
the practice o f the Federal Reserve Board with respect t o sending copies o f let:
ters o n administrative matters t o the officers o f the bank. Whereupon i t was
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VOTED t h a t each o f the governors should take u p this
matter individually i n such a way a s seems best t o him to
promote the efficiency o f the service.
The discussion t h e n returned t o the subject o f transfers t o the
5% Redemption Fund. Whereupon it was
VOTED t h a t t h e matter o f making payments t o t h e 5 %
Redemption Fund for member banks b e left t o the individual reserve banks t o deal with a s they may deem proper.
TOPIC #11.= INTERNAL OPERATIONS O F FEDERAL RESERVE BANKS.
(a) Publicity of Federal reserve bank's earnings. = After a
brief discussion i t was
VOTED t h a t the conference suggest t o the Federal
Reserve Board that the publication o f monthly earnings
of the Federal reserve banks may b e misleading both t o
the public a n d t o the member banks, a n d that t h e Board
be requested t o consider the advisability o f publishing earnings not more frequently than once a quarter,
and preferably every six months.
(b) Terms o f office of reserve bank employees, - After a brief
discussion, this topic was passed b y consent without further action,
{c) Publication of reserve bank's salary lists. - This subject
was passed temporarily until t h e return o f Mr. Strong,
(d) Report o f committce o n method o f calculating dividends. Mr. Seay, f o r the committee,submitted a n oral report which referred t o and
supplemented the written report, a
copy o f which had already been sent t o
each o f the governors. A f t e r considerable discussion i t was
VOTED t h a t t h e report b e received, p l a c e d o n file,
and that the matter b e referred again t o the committee for
further consideration and report.
At this point Mr. Strong resumed the chair,
TOPIC #10 (e) - COMMITTEE T O AUDIT FOR WHOLE YEAR. - After
discussion o f this subject, i t was
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VOTED t h a t Mr. Strong b e authorized t o arrange for
the appointment o f auditing committees i n advance for a
whole year; e a c h committee t o consist p f two officers o r
employees o f the reserve banks for each audit, one t o represent t h e banks and one the Federal reserve agents, a n d
of whom one shall have served o n the next prior committee
and the other shall b e a new member, b u t n o committee shalt
be formed o f two members o f the staff o f the same bank.
TOPIC #11 (c) - PUBLICATION OF RESERVE BANKS’ SALARY LISTS: After some debate, this subject was passed without further action, except the
Suggestion that the governors who had not already expressed their views t o the
Board o n this subject might write them about it-
(e) = Right of a national bank, directly or through officers, to act
as agent for insurance companies. -
During the discussion o f this topic, the
Ghairman reported his conversation*with Vice Governor Delano with respect t o
the article i n the morning Post, and he also m a d e astatement with respect to
topic #12, Foreign Arrangements, a n d his proposed trip t o “Europe.
A recess was taken a t one o'clock.
The conference reassembled a t 2:30 p. m
All present except Mr. Wells and Mr. Wold.
TOPIC #11 (e) w a s again passed temporarily until Mr. Wold's return,
{f) Weekly report o f net deposits a n d balances o f member banks. =
After a brief discussion this topic was passed without further action.
TOPIC #13 - ACCUMULATION O F STATISTICS. -
After some discussion i t
VOTED t h a t the matter o f the accumulation o f statistics
be turned over t o Mrs J a y as Chairman o f the Federal Reserve
Agents" Executive Committee.
TOPIC #12 = FOREIGN ARRANGEMENTS - was then taken up again for diss
cussion, b u t n o action was h a d thereon.
At this point Mr. Wold rejoined the meeting.
TOPIC #15 = REPORT O F NATIONAL BANK SECTION O F A. B, A. O N RECOMMEN~
DATIONS FOR LEGISLATION. -
In view of the fact that a copy o f this report has
been submitted t o each governor, this topic was passed a s having been disposed
of.
TOPIC #16 - RESERVES O F MEMBER BANKS ~ TREATMENT. O F THE FLOAT. During the discussion o f this topic, the advisability was brought out o f having
a committee prepared t o discuss the details o f any plan which the Federal Re»
servo Board might outline for inter-district collections and clearings. Whereupon i t was
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VOTED t h a t a committee f o r this purpose b e appointed,
consisting o f Messrs. Wold, Miller, Aiken, Rhoads, Seay,
McKay and Hendricks, a n d i t w a s understood that i f occa»
. Sion should arise for a meeting o f the committee, t h e communication should b e had through Mr. Curtis.
Nofurther action was had with respect to Topic #16.
TOPIC # 1 1 {e) * RIGHT O F A NATIONAL B A N K DIRECTLY O R THRGUGH OFFICERS
TO ACT A S AGENT FOR INSURANCE COMPANIES. -
After a brief discussion this subject
~
xomve
P a
was passed b y consent, without action.
TOPIC #17 = APPLICABILITY O F FEDERAL INCOME TAX T O FEDERAL RESERVE BANKS
a;
After reference t o t h e letter o f the Commissioner o f Internal Revenue, d a t e d Nov.
28, 1914, o n this subject, t h e topic was passed b y consent without action.
\
TOPIC # 1 8 «
BANK EXAMINER. +
DESIRABILITY O F APPOINTMENT O F A N ASSISTANT F O R EACH NATIONAL.
After a brief discussion this topic was passed b y consent withe
out action,
TOPIC # 1 9 -
THE PURPOSE O F ACCUMULATING G O L D I N THE HANDS O F FEDERAL
RESERVE AGENTS B Y THE ISSUING O F FEDERAL REASERVE NOTES. =
After a
brief discus«
sion this topic was passed without action,
TOPIC # 2 0 - THE ADVANTAGE,
I F ANY, O F THE CONVERSION O F U. 8 . BONDS PRO}
VIDED FOR IN SECTION 18. - After considerable discussion it was
VOTED t h a t a n inquiry b e addressed t o the Federal Reserve
Board a s to whether any policy has been determined upon b y the
Board and b y the Secretary o f the Treasury i n the motter o f ex-
changing U. S. 2% Gold Bonds bearing the circulation privilege
for one year gold notes and 30-year 3% Gold Bends under the provisions of Section 18 of the Federal Reserve Act, and also whether
any form of application t o b e executed b y Federal reserve banks
in this regard h a d b e e n prepared b y the Federal Reserve Board,
TOPIC #21 - MEMBER BANKS UNDER SPECIAL EXAMINATION. -
After a brief
discussion, t h i s topic w a s passed b y consent, without action.
TOPIC #24 = ADVISABILITY O F SUGGESTING COMPILATION O F MEMBER BANKS?
REPORTS I N COMPTROLLEHS QFFICE ACCORDING T O FEDERAL RESERVE DISTRICTS. -
After
a brief discussion i t was
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VOTED t h a t the secretary b e requested t o communicate with
Mr. Perrin, advising him that this topic appears t o b e one which
shculc b e referred t o the Conference o f Federal Reserve Agents,
but that the sense o f the Conference o f Governors is, a s expressed
at this meeting, that i t would b e advisable t o have steps taken t o
bring about a compilation o f member bank reports i n the Comptroller's
Office, according t o Federal reserve districts,
TOPIC # 2 5 -
LETTER F R O M VILLISGA NATIONAL BANK, VILLISCA, ToVA,
with reference t o tne provosed revenue tax stamp was read t o ths conference
by the secretary, but n o action was had ther sons
TOPIC #26 = LETTER FROM THE MEDINA COUNTY NATIONAL BANK, MEDINA,
OHIO, - with reference to the size of the printing bill eauted b y the new
form o f Comptroller's statement, was read b y the secretary. W h e r e u p o n i t
was
i
h
e t e
VOTED t h o t this letter b e referred t o the Con=
ference of Federal reserve agents.
TOPIC #27 = LETTER FROM FIRST NATIONAL BANK O F CARROLTON, GA. «=
with reference t o the campaign o f the Comptroller o f the Currency against
usury was read b y the secretary, b u t a o action was had thereon.
TOPIC #28.= T h e Chairman presented a memorandum submitted b y the
two committees o f the A. B y A, o f the topics discussed a t the joint confers
ence yesterday. W h e r e u p o n , after a brief discussion, i t was
VOTED t h a t Mr. Curtis b e requested t o communicate
with Mr. Paton, General Counsel o f the A. B s AL, suggest=
ing that the committees o f the A. B e A s prepare their own
memoranda for submission direct t o the Federal Reserve
Board o n the subjectsof inter-locking bank directorates
and the retirement. o f greenbacks, a n d that they prepare
similar memoranda for submission both t o the Federal Rex
serve Board and to the Governors o f the Federal reserve
banks o n the subjects o f readjustment o f reserves and
foreign banking connections.
TOPIC # 5 - UNFINISHED BUSINESS. +
The Ghairman r e a d a
letter dated
January 20, 1916,from the Federal Reserve Board, advising the Conferences o f
the action taken b y the Board u p o n the recommendations m a d e t o the Board b y
the Fifth Conference o f Governors a t Minneapolis last October.
(Note: N o action was taken with respect to this communication but
copies thereof have been forwarded b y the secretary t o each of the governors.)
TOPIC #29 = CONFERENCE O F AUDITORS. - The Chairman presented a memo~
randum prepared b y the auditor o f the Federal Reserve Bank o f New York with
respecé t o the nethod o f closing the buoks and items c f organization expense,
After a
brief diecucsicn.it w a s agreed, without formal action, t h a t a
meeting
of some o f the auditors o f the reserve banks should b e arranged b y Mr. Curtis
%o discuss the matters prosented i n the memorandum, a n d the governors should
be kept advised o f such arrangements,
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Sh
TOPIC #9 - OPEN MARKET OPERATIONS.
(a) Domestic acceptances
(b) T r a d e acceptances
{c) Statement o f private bankers.
The Chairman made a statement with respect t o the above mentiened
topics and a brief discussion followed, b u t n o action was had thereon.
(d) Division of Purchases. - The Chairman made a statement with
respect t o the allotment o f warrants and acceptances purchased b y the Rederal
Reserve Bank of New York, and. submitted a memorandum of figures concerning the
operations o f the twelve. banks, A f t e r considerable discussion i t was
VOTED t h a t the Federal Reserve Bank o f New York
should prepare figures to indicate what minimum investment the bank should maintain t o produce income suffice
ient t o cover its current expenses;
AND I T WAS FURTHER VOTED t h a t a committee consist~
ing of Messrs, Seay, Aiken and Rhoads b e appointed t o determine the basis upon which purchases o f warrants and
acceptances made by the Federal Reserve Bank of New York
should be divided among the Federal reserve banks desire
ing to share i n the same;
i t being understood that such
Givision should take place only after the minimum invest=
ment had been made b y the Federal Reserve Bank o f New York
in its own behalf.
TOPIC #30 - QUESTIONS SUBMITTED B Y THE FEDERAL RESERVE BOARD. =
The
Chairman presented a communication from the Federal Reserve Board dated January
21, 1916, entitled “Questions for the consideration o f the Conference o f Gov=
ernors touching foreign operations.” A f t e r a brief discussion i t was
VOTED t h a t Messrs. V a n Zandt, Kains, Miller and Wold
be appointed a continuing committee t o prepare a reply t o
the memorandum submitted b y the Federal Reserve Board, and
that they b e empowered i f necessary t o appoint their success=
ors t o take u p the work after the committee leaves Washingtons
(Note: A
copy of the memorandum may be found on page 342 of the
stenographic minutes. )
TOPIC #22 = PRESS STATEMENT- ADVISABILITY O F PUBLISHING CONFERENCE
RECOMMENDATIONS. ~
A f t e r a brief discussion i t was
VOTED t h a t the usual procedure with respect t o issuing
a statement f o r the press b e followed,
(Note: A
statement for the press was prepared b y the Chairman
and Secretary o f the Conference, a n d was left with Mr. Sherman Allen, Assist~
ant Secretary o f the Federal Reserve Board for distribution t o the press o n
Saturday, January 22, 1916, a n d a copy thereof has been sent t o each o f tus
governors. )
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TOPIC #23, » NEXT MEETING. - I t was movef,seconded and unani-«
mously carried, t h e motion being put b y Mr. Seay, that Mre Strong b e selected t o preside a t t h e next meeting o f sbhe conferences
It was then suggested that a s the eléction of a secretary for the
conference was only for the year 1915, there appeared t o b e no secretary o f
the conference o r aggregation o f governors. W h e r e u p o n i t was
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VOTED t h a t i n accordance with the vote recently taken
under Topic #1, Mr. Curtis b e requested t o make the neces-~
Bary reports o f the action taken a t this conference and t o
attend t o the necessary details o f the next conference,
i n
cluding the preparation o f programmes and the conducting o f
correspondence, a n d that h e b e requested t o attend and as~
sist i n the conduct o f the meeting.
AND I T WAS FURTHER VOTED t h a t a n arrangement b e made
by the committee appointed t o deal with the allbtment o f pur~
chases b y the Federal Reserve B a n k o f N e w York, t o provide
a Suitable basis o f remuneration t o b e paid t o Mr. Curtis
for his services i n passing o n questions arising i n connection with the eligibility o f warrants and the character,
terms and form o f bills o r acceptances purchased for other
Federal reserve banks and other services rendered b y him
in behalf o f such banks,
The conference adjourned a t 7 o'clock p. Me, Without day.
fF
Secretary.
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