The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
CONFIDENTIAL • J a n u a r y 20, 1934 Washington, D. Morning S e s s i o n The Conference was c a l l e d at t h e r e q u e s t of t h e F e d e r a l Reserve Board to c o n s i d e r t h e p r o p o s e d Gold R e s e r v e Act of 1934, to e n a b l e t h e Board to o b t a i n t h e views of t h e Governors on t h a t B i l l , a n d a l s o to c o n f e r w i t h t h e S e c r e t a r y of t h e T r e a s u r y c o n c e r n i n g t h e Government' s f i n a n c i n g program. The Conference was c a l l e d to o r d e r at 1 : 4 5 o' c l o c k a. m. w i t h Governor B l a c k p r e s i d i n g . Present: • Governor B l a c k and Messrs. Hamlin, M i l l e r , James, Thomas, Szymczak of t h e F e d e r a l Reserve Board, a n d Governor C a l k i n s , Chairman of t h e G o v e r n o r s ' Conference, Governors Young, N o r r i s , Fancher, Seay, Geery, Martin, Hamilton, and McKinney. Also A c t i n g Governors Johns and S c h a l l e r a n d Deputy Governor Burgess; Mr. S t r a t e r , S e c r e t a r y of t h e G o v e r n o r s ' Conference; and Messrs. M a r t i n a n d M o r r i l l of t h e Fede r a l R e s e r v e Board s t a f f . A f t e r a b r i e f p r e l i m i n a r y d i s c u s s i o n , at l1 : o' c l o c k a. m. S e c r e t a r y of t h e T r e a s u r y Morgenthau a n d Mr. B a i l i e e n t e r e d t h e C o n f e r e n c e and o u t l i n e d t e n t a t i v e p l a n s f o r t h e immediate p r o g r a m of Government f i n a n c i n g , which was t h e s u b j e c t of g e n e r a l d i s c u s s i o n , a f t e r which t h e S e c r e t a r y of t h e T r e a s u r y r e q u e s t e d t h e i n d i v i d u a l views of t h e Governors p r e s e n t . All of t h e Governors e x p r e s s e d them- s e l v e s as w i l l i n g to c o o p e r a t e to make t h e p r o g r a m a s u c c e s s . At 1 2 : 3 o ' c l o c k p. m. S e c r e t a r y of t h e T r e a s u r y Morgenthau • r e t i r e d f r o m t h e meeting, and at 12: 36 o' c l o c k p. m. Mr. B a i l i e r e t i r e d . At 1 2 : 4 o ' c l o c k p. at l: 45 o' c l o c k p. m. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis m. t h e C o n f e r e n c e a d j o u r n e d to r e c o n v e n e • - 2 - Afternoon S e s s i o n The meeting was c a l l e d to o r d e r at l: 45 o' c l o c k p. m. w i t h t h e same a t t e n d a n c e as at t h e morning s e s s i o n ; a l s o the Honorable Newton D. Baker, S p e c i a l S y s t e m Counsel, a n d Mr. Walter Wyatt, General Counsel; Dr. Goldenweiser and Mr. Smead of t h e Fed- e r a l R e s e r v e Board s t a f f . Governor B l a c k r e v i e w e d p r e v i o u s c o n s i d e r a t i o n of t h e Gold q u e s t i o n and r e f e r r e d to t h e h e a r i n g s b e f o r e t h e S e n a t e Committ e e on Banking a n d C u r r e n c y and to t h e s t a t e m e n t s which he made to t h a t committee c o n c e r n i n g t h e proposed B i l l , a n d it appeared f r o m t h e d i s c u s s i o n s which e n s u e d t h a t t h e Governors p r e s e n t were in ac- • c o r d w i t h t h e p o s i t i o n which Governor B l a c k had t a k e n . Governor B l a c k t h e n a s k e d t h e Governors to c o n s i d e r t h e B i l l " T o p r o t e c t t h e c u r r e n c y s y s t e m of t h e United S t a t e s , to p r o v i d e f o r t h e b e t t e r use of t h e monetary g o l d s t o c k of t h e U n i t e d S t a t e s , a n d t o r o t h e r purposes ( S. 2366 of t h e 73d Congress, 2d S e s s i o n ) ". The d i s c u s s i o n t h e n c e n t e r e d a r o u n d S e c t i o n 2 ( a ) of t h e B i l l which proposes to v e s t in t h e U n i t e d S t a t e s a l l r i g h t , t i t l e , and i n t e r e s t in a n d to a n y a n d a l l g o l d c o i n and g o l d b u l l i o n , i n e l u d i n g t h a t h e l d by a n d f o r t h e F e d e r a l R e s e r v e banks. The g e n e r a l o p i n i o n was e x p r e s s e d by t h e members of t h e Conference t h a t t h e r e might be some doubt of t h e c o n s t i t u t i o n a l i t y of t h a t s e c t i o n and t h e q u e s t i o n r a i s e d as to whether, if • any s u c h doubt e x i s t e d , al Reserve S y s t e m s h o u l d a c c e p t i t s p r o v i s i o n as Law if t h e Feder- passed. It was t h e g e n e r a l o p i n i o n of t h e Governors p r e s e n t t h a t t h e Boards of D i r e c t o r s of t h e s e v e v e r a l r e s e r v e banks c o u l d s a f e l y be g u i d e d by https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • - 2a - t h e o p i n i o n of S p e c i a l S y s t e m Counsel, General Counsel f o r t h e F e d e r a l Reserve Board, and Counsel f o r t h e i n d i v i d u a l F e d e r a l Res e r v e banks. In r e s p o n s e to a d i r e c t q u e s t i o n , Mr. Baker e x p r e s s e d t h e o p i n i o n t h a t if t h e B i l l is p a s s e d and s i g n e d by t h e P r e s i d e n t , t h e terms of S e c t i o n 2 ( a ) s h o u l d be c o m p l i e d with. c u r r e d in Mr. Mr. Wyatt con- Baker' s o p i n i o n . The Conference t h e n c o n s i d e r e d t h e s u g g e s t e d amendments to t h e B i l l which had been p r e p a r e d by a committee of t h e F e d e r a l Reserve Board a n d a number of t h e Governors on t h e p r e v i o u s day. • It was VOTED t h a t t h e p r o p o s e d amendments be c o n s i d e r e d and a c t e d upon s e p a r a t e l y . Thereupon, t h e C o n f e r e n c e p r o c e e d e d to c o n s i d e r t h e f o l l o w i n g s e p a r a t e amendments: • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • t u t 1 t o n t P 6t.otton l(ti)I &oet!on 2(a), ..t d611c.ll? l fJ uat . l:11 en by tho 111tflt t: Ia the i.t « • e cf 1m i 4 1 ,, B!l f • - i t r- l u o or. ft'Jii!,\t • - Obl ) t , : e ult i r«taat t Dcltm shall In tho - • i ; \ I: • - - - - Tresaary« _ ·1.u_Jfl'.l. fJb! 'I> • m : ' the oderel Reoerv tbt., lltrltCJ-ij''L1 - 1 Df l t i i l f..esorve benke by the Pedera Trenury. uoh payments shalt be made out o ! wna r,J!/1 •• m t" tftl le bt)'ie\ii • provide fov such _ a.""t tt0 paymeati the 2f!.. . ho lie,t . ltttbt1 , :7 blt: \tllfj .· a l t oib _ . ing Ped Ksdevel ti OOU'"\efL. note t de»et Vc < J. P · 11-..1• n 14 D U$Ctlti tac -,.oo r a , a l v tw a , 1 1 wte, tM1 fttltndttt,t• Ia the event tho preeeding amendasnt, providing a m»botitution for Ow\l(m r e ) ta Mt.. t i o a 2(a) a0 i 2 -m : l )i C J, t ¢ t&io ,, J.\- t"it1Q r T mt R I - suggested J.n Sec- 8o IU.l\i t o , beginning vita l i n e ix snd ending »eillwa .. GUlbL The , 1 sh ah»ii eounte shall be lfflYI •• be in #uh fomaand ta = ct ,..1'11:t.;l in suchaaoounta shell b e , - _ • • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis leer t£te " • il'wll bci to Rt!l •u - t bd e.rt.• et tbe IN ta , o.u.\ • CsutlM :51 tthtob I ml lln.Q eve, page nine, Of t,lle 1111 bo a ended by ad c f()\1.tmn, ,afl1tao1 ' f l • eactJ !l d1til.l orfi t l w of: tho a t l f t ! u a·etlrma1 i . aeetion be amended by dtl:la,t __ -- a tm .• a,. llM bn c td.n.o, th• f'-?l:t:0J11tll • e - q tJ:m <t1• l e t l r l . Q; , 4m . o y • • ;I. to approve t h i s The Conferenee voted unanimously "• • tieot-tm 6 of the llllt, whioh toll,MifJ on pege ten, # a n d a- , permitted in res * .tlffltll nduent, -· lt.lnl· too ttic Preaident, no e doomed in p d - Gtat 1'.Ga, AO ebttl.l tao Nd _ o. anlt tb 1 '."1 l" r,rucnor co • • QB 11.ftb ·ow. W ••ball. t,o r dntt!.fl trJ, dolls# amount required by law"; #oh t i : i o a t e g " be s u b t i t u t s d fov w; • ts b7 Law"on llllc r;tG,»h Qf ltflt ad thnt • h(iX, tic lnfl& •l!ft.Gffbotv,oen the fflu# •in• ad ._ lines nineteen and twenty of peg» t;¢11 eft1 that Ibo K t t l o o lo • nae - bJ • w l k t q . o-utline• , i , tLtt,;;a. ttrontll''tmP l t m . lines one and on page eleven, • * - • to approve the amendments $o ttt.t f l m f J : m f c c c voted wniaowsly lbst eDotlon 8 ' - · - qr (tlJ l l n I W l t l , :11'..SG twetfll ,. - _ l l t : t.l_fJI I C k n Um!tl' t t l ' I \Jt thl o,, flN' , or ffie t r a w , , , offont\1 t, !!ta lo?: u l • •ru, •' l . t lent mmomnt of' lawful woney#. e t t n J l&U - lbtlll. pn:r• pey for it Cent # n a e voted unanimously to approve ne l h - f" r 6. t ·tth _. limos •b1e"''"(tf} t,, iheNt<JN l a t t f f l l t me r d a n ' ti\ttvr t • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis no f f l i l : 1 1 1 rm: itmttn1 • tJel!JJr4. lt(l w e n t , , tm,, f ¥ o the ewiatizg twenty #«one, lll11 C'A t-ho fi , erte,?' 11h• '" , thl GM i - r . __ .- , - iftu tlia -t n 8 • threw be t l J l Mt!• a - 'f,..v:e, auri Vie trtillt-1 bf lbl • e o f lbt TtkllU'f,• tbal\ ••11 to\.d\ t o n " - equivalent amounts!n a . t u \ *mG • lt e t e ; ,old ,• quired (a) for pon«monetary domestio uso noi inoluding !iOUl!l.n,• o• (I) h• t t • • 8 t h e Contof'ellN vottl ,.. tmlUltiJt.n.lllf to· •1 tt1te - t • '1eotirm l o t , . - n tilUAl l t m tt m , t , - ,__ twelve, and e»tending through l i n e s i x onpage thirteen, rending e# fottorJat ataeettm, lO(o) • Jot tl\c. , , n ot ut,ablU.dq \l'w. exchange l u e of rtbtt h1l.cP, t?l ;o_. rotaryof tho Treasury, direetly or through auoh qtm>ttS GD1te my dNtGJM\(j• 11 eutbort\ttO• ,a,- the &ct;r)Ut\t of tile D tlft&hllch ln tbtu accttou, to t ta sett ln4 foreign exchange, and such other instruments of e r o d i t c eourity as he say deemneoennry to omrryout the purpono <lt thlo ecottoa., Anen.9Wlt 1 u l ! t t,f 'b timd 11ti,ll '8 aado ..naI r1tto»-t t t . i : f l t t : e t tct th P td e t* he DW!ml \ri tu.a • h o t l m lO(eJ. ltor the to\l P Q R of Gtabllic- tie foN!p G l t · 911\lo flf Uta doll••• tha &0cretary of the Treasury, the uovernwr of' the Foderel til&t Roetne Doa,a, ffltrl ano othc.'1l' tlv'"Tn rle-danl'!,tcn :by • President, h a l l ecnotitutea Stabilization domittes, which, until the termination of th» e x i t i n g National m , Bell he.-e the powersand duties conferred by fblo f.Gotlo.n. tlold C O l t t . - ,!ft-ct err ,ueh l e 1 •• it rlon1pat4-, t.• autlirn-ltW. !-cl' the: • .., cmmt of. , u : m1 t#toll to tht11. •teUeti• to t!lll ln sole fM forelgh axobenge, and ueh othor inotru»enta of eftfllt or #0ourity payable in foreign countries •• h,,.. eigh ourreneioa, ap it may de :1t aecu,.,,, t :o11 n,tt \ltD pt.tr»oao or '11·• aooilcn. ia emiUOl aOO!t llfnm4 oha be made and a report thereof submitted to tho Proui ?ha Conferenoe w t e d unaimcusly to approve this amendment, I. llmt tllm NI 6itlbLU.cat1,n the "oorwtary of tiw l t u ftt t i n e f t Y W• t:ti&rI t \ tie ed . ti. tlit-eo• , t1-\ lfbldl 1 n1 4 "",u, ·OKt• •e,e of tfhff} u r ; ., . »Line feu»tom, :tfflio lblfktt>J enn thlt Uaca s\te w Uffl).tt,•tfflfr In• eluu! ff Id tfte tu,.at t.tu,oo . ca J i g n - , , L ' I tie Q ,flltlOltffll out ot ib.e l l l ' t ant o ffl.lttlfll f t W U t e t i & \b.GftfOfl •HY C l \ l l l t & u le I.ti \lt1entin.., the ele • • er ftlh1 U$l.,_ t.11 w\lue e.t \b6 ® l l f f h 1 1 U < m \ti f&Jdp N n ' " l l Q . · e· • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis t;u r luab OOIO n, be tnvu"6 uG n t n . _ , k l l t .. • b f!1 Nn o.b\tlal1mlo ot th.o Dnlt.o8 fttat.t.a•• oved unanimously t lw the tiltftf'.N 9,m, ight, twsaty«ive 11 ... j , tbt.1 l.fi'ht ~· a e d statute :QB a r4t tb lb\w11! thl.ft 111Ch 1 • I 1 t t.a! U.bl reeogniu , a, la :, • ;t •lt b&Ye en, e t t e t • . • - unanimous!, 4 Ut• not rovedthis It wasthe a a n s oef ' tie Conference t h a t d m1mtlttcnt1 , n111 ;r,& •• t. be c i Treasury, aw It • to th Pres regarding https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis rt ta}f' e hemorning - • 1 n, ,._ f at »o# '"'.t.tl • etlta :nl tho Fedoral Beaorve ystes toward • - 7 - t h e Government f i n a n c i n g program, and it was VOTED t h a t t h e f o l l o w i n g . s t a t e m e n t be approved: "A Conference of Governors of t h e r e s e r v e banks was h e l d t o d a y at which t h e r e was f u l l cons i d e r a t i o n of t h e p r e s e n t f i n a n c i n g p r o g r a m of t h e Government, a n d f u l l c o o p e r a t i o n _ w i t h t h i s p l a n was a c c o r d e d to t h e T r e a s u r y by t h e Governors". It was f u r t h e r VOTED t h a t Governor Black convey t h i s s t a t e m e n t to t h e S e c r e t a r y of t h e Treasury, and t h a t Governor Black be a u t h o r - • i z e d in h i s d i s c r e t i o n to g i v e t h o s t a t e m e n t to t h e P r e s s . S h o r t l y a f t e r t h e o p e n i n g of t h e a f t e r n o o n s e s s i o n , Deputy Governor Burgess l e f t t h e Conference to appear as a witn e s s b e f o r e t h e S e n a t e Committee on Banking and Currency, and r e t u r n e d to t h e meeting at 4 : 5 o' c l o c k p. m. Adjourned at 5 : o ' c l o c k p. m. • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis
@FedFRASER