The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
C O N F E R g hr yN CE > a ) B O A RI!
JAIN L D N
Hin a
4 vF a sf
W O oV E E R N
G
ORS
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
SHORTHAND REPORTER
OO
T
i
A P I A ]
O
I
n
e
V A T A
UYVLUINIDIAN B L U U , V
PH
SECOND CONFERENCE OF GOVEFNOBS
J A N U A,R0
19Y
25.
P R O G R A M
1. R e p o r t o f special committee o n Federal reserve bank settlements,
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Expenses o f shipping currency and o f purchasing
exchange i n settlement o f balances between
Federal reserve banks,
Transcript o f réciprocal accounts between Federal
reserve banks.
Summary o f above accounts
Government deposits,
Sub Treasury transfers.
Report o f Governor Rhoads a s s u b committee o n cipher code,
Membership i n vankers associations.
Receipt o f national bank notes for member banks desiring t o use
Federal reserve banks a s redemption agencies.
Uniform method o f deferring charging off so-called organization
expenses a s s u g g e s t e d y
b Federal Reserve Board,
Bonding o f employees t o the b a r :
a n d t o the Federal reserve agents,
Comptroller's recent ruling dissontinuing permission to deduct
national b a n k notes o n hand i n computing reserves o f member
banks.
Time deposits.
Report o f counsel i n the matter o f waiver o f demand notice a n d
protest.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Collection o f notes discounted b y Federal reserve banks payable
outside their own districts.
Compensation o f members o f Federal Advisory Council.
Definition of “eligible paper."
Regulations respecting revenue warrants.
Regulations respecting acceptances.
Credit information for members.
Porm and number o f reports b y member banks « + statistics,
Foreign exchange.
Journal o f Commerce article,
Should the Governors’ Conference prepare a n d publish i n the press
a general answer t o all the newspaper criticisms o n the socalled failure o f the Federal Reserve System to meet the expectations o f the public?
Approval o f discount rates b y Federal Reserve Board.
Directors’ profits i n dealing with bank.
General S u b Treasury relations,
Appointment o f e x a m i n e r ssa Deputy Federal Reserve Agents,
Clearing house relations.
State bank memberships.
(a) Recommendations from each Governor relative t o
regulations.
(b) M r . Breckinridge Jones' brief o n atove subject.
Collections, :
(a) Telegraph transfers.
(b) S a n Francisco plans.
Date and place o f next meeting.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Insurance o n currency shipments,
Meaning of “lawful money."
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
e e e
e r vm g u y is f p r
TP
a t t e 2
seeTees
4 4
s
PRDURAL 3
OP
GOVERNORS
t
New Wiliard Ketel,
ashington,
January
Aiken,
Governor,
B
Rhoades, Governor,
2¢ ;
a
n
k
o f Boston,
R e s e r v e B a n k o f Phila.
* 4
Pedersal R e s e r :
MePougsl, G o v e r n o r , F e d e r a l R e s e r v e B a n k , ¢
i, Yella, G o v e r n o r , Federal Reserve Bank,
Theo. Yold, Governor, Federal Reserve Bank,
¥@lis, G o v e r n e r , F e d e r a l R e s e r v e R a n k , D a l l a s ,
Kaine, G e r e r n o r , P e d e r a l R e a r r v e Bank,
S a n
of the Federal Reserve Hank o f Weer
the P e d e r a l R e s e r v e
Ban
Secretary.
Joint Conference
P e d e r a l Advisory Council,
of w h o m t h e f o l l o w i n g Y e r e present:
presiding,
T . .Vorean,
ie r a ns e tH g
¥ r .
, Jaffray,
Lyerly, Ardley, a n d aleo Goverrors Seay, Yells, a
ott §
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Kains, whe are Slee members o f the Federal Advisory
Council.
e r e not
rc
enee
Conferences w a e galied t e order a t 10:50
M
e
, M r . James B . Forgan, Presiding.
fhe Cheireean:
meeting,
Gentiewen,
t h i s i e q u i t e a n informal
b y autual arrangement between t h e Governors o f
Federal Reserve Banks o n d t h e Pedersi Advisory Ceuwneil..
Council h a s b e e n i n s e s s i o n f o r t r o days.
Y
e knew that
you were t o have a session after that time, s e v e thought
We would get a day i n between, g e t tegether and get acquainted.
f f a r a e the Pederal Advisery Council i s cencerned,
get. s o m e p r a c t i c a l k n e s i e d g e o f h o r
are v o ing e m a t the differnt Federal heserve Banka
the country, a n d «specially h o w t h e Geverners were
gatling sions with t h e vexing question o f celiesction o f
Gountry cheeke, w h i c h question t h e Advieory Council h a e not
taken sagdtiien wpon, because w e have been waiting f o r prace
tdenl advice from the experience o f the Governors o f the
different banks, a s i t has developed.
I do not think there i e anything more that —f have t e
euy o n behalf e f the Advisery Council.
Y e will b e glad
to tuke u p @ny matter fer senferunce that t h e Governors i g h
te have u s take u p a t thie meeting, a n d s o far a s the
Adviserr C o u n e i l
i s sonterned, w h a t w e e a p e c i a l l y w a n t t e
knew about i e i f you think y o u o a n get aiong with t h e ecljection o f checks?
(The Chairman t h e n made 4 etatement t o the Conferenes
which the reperter was direeted nat t o repert.)
The Chaireans G o n t i o m e n , m a y # ¢ not hear f r a m t h e
Gevernors a s to how they a r e getting alenc vith
question o f eollestion o f checks?
He. Jaffray:
“ o w l d 4 t n e t tbe a
good i d e s
the eiroular that w e diseuesed last night, t h a t
mercial paper circulation, a n d get t h e Severnors t o pass u n e n
our recoemendst lone?
The Chairman: =
I t wdil n o t take very lone.
might say, o m behalf o f the Advisory
Council, t h a t t h e Feeevtive C o m i t t e e e f the Advisory
Couneii h a d & meeting o n Monday,
s t which i t took u r Cire
sular No. 14, covering t h e eligibility e f commercial paper
for reediscount, a n d after deliberation o n that circular w e
agreed u n a n i m o u s i y
t e send t h e fellewing opinion
t o the
Foard:
*In the opinion o f &khe Thie Cownsil many o f the recuiremente i n genmection w i t h commercial proper a x e e l i e i b l e f e r r e e
discount under Cirevlar Ne. 13 (dated November 16, 1024)
which was deferred until J u l y 15, 1925, w n d e r resciutiers A ,
eeriesof 191% (dated January 1 2 , 1915) iepese inceneenienne
‘wpen the business public, t h e Pedgral Heserve and mesber
banks, s n d cannot b e gueccassfully carried o u t i n pract ice,
“It i s our opinion that t h e reculations o f the Federal
Reserve Board shovld provide that t h e management o f the
veriéus Federal Reserve Banke should determine t h e admissibility o f cemmercial paper offered f e r re-disdount b y
their
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
member banke.
F a c h a p p l i e a t i e nr
e
f re<-discount
ehould b e sensidered w e e n i t e merits,
"fe would therefere r
e
a
p ye l
recemmend
al ut f
that the
requirements i n Circular %o. 13, aommencine w i t h the werds
(in the middle o f the seeond peracraph o n page 3 thereef),
‘It is, however, thought advissbie b y the Meard t e reaqrire
that o n and after Januery 15, 1915,' ete., should b e permiunently eliminated."
Yhen we dieevesed that st the Advieory Council ve learned
from Ur. Seay that there w a e another cireular i n prereration
that bac boon went eut t o zaxteus the Governors for their
Gomeigeration, a n d that the mew @ireular went @ long way t e
serrect t n e eviie o f the farmer eirculer.
f e we = e
t e the
Yeders] Beard o n d asked t h e m for @ copy e f the tentative circulay they had gotten out, being ¢ireular Ho, 5 , Serie o f 1915,
and treir regulation B in regard t e cemme@reial paper.
Pane
ape you gentlemen have seen that. H e w e v e r that may be, w e
Will iet i t go.
T h e cireuler was 211 richt and the
Regulation B i e a l l right e o f a r a s the statutery require«
mente a n d t h e character o f the paper elicible a r e soneerned.
When £ t eomes down t o the method c f certifying elieibility
we recommended that t h e requitonent b e eliminated; t h a t
is, that t h e rubber stamp "““licibis f e r rediecount i n
Federal Reserve Ranks under Federal Reserve Board Regulation
B, oredit Tile, n a m e o f momber bank,” e n d s o forth, should b e
@lisinated,.
I t aut down that seetion referring t o certify-
ing t e eiigibiiity t e simply thie:
“Every sember bank wili b u required t o ceritfy i n the
ietter o f aprlicstion, wunier the signature o f « duly asuthor
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
sned officer, thet, t o t h e best e f his kuevledge a n d beliat’,
ths bili w a e iseued f e r one o f the purpose mont ioned i n
paragraphe I({(¢} a n d [f{a} hereef, a n d that i t eenferm t e
the provisions o f the Act a n d t h e requirements o f this reaue
imtion.*
That has been changed t o agree with the elimination thet
has a i r e a d y t a k e n rlage,
Them “Svery mewber bank showld maintain a
eredit file"~<«
and thig i g & mere sugzestion ««=— “shich sheild eontain 4
statement o f the finanetal cenditien e f the berrower, e i t h e r
Signed h y the borrever o r duly certified b y a member b a n k o r
motary public, t o be a
copy e f the signed statement. S u c h
statement shevld contain 1 1 t h e information essential t e
& Glear and correet knewledce e f the borrevwerts credit
and of hie methods o f borrewing. A
schedule @pecifying
eortain information which auch statement should contain a n d
the s a i n p o i n t s t o b a o b s e r v e d
i s hereta S o p e n d e d , *
Then T Gome t e the arpendix.
7 a gut ovt t h e fection
DBand Geetion B , i n regard t o the waxione: and sinimum amount
of shert time leene during t h e preesding year a n d the
anticipated maximus during t h e present Year; a n d Geetion H ,
refering t o & statement avidencing t h e purpose o f such shert
tine jeans and the pelicy o f the terrower i n financing slew,
permanant o r fined assetea.
“@ J e f t h e others a s they wore.
I t i s only sugges-
tion a s t o hor the statement should t e made, b u t w e did
not
Lhimk i t Whe pragtiicable t o ask berrewere for that kind o f
inforestion.
https://fraser.stlouisfed.org
With
Federal Reserve Bank of St. Louis
W
e i e f é i t a t vhat.
“
e had «
t h e Bourd afterwards a n d W e seemed t o make
diseuesion
eion o n them, aithough e f ceurse I
d o set knew h o w they wiii
finally decide t h e matter,
Did y o u t a k e e x e e p t i o n
t o pararrarh f
Seotien C , “ a u c h b i l i b e a r s t h e e i e r a t u r e
o f t h e euProhaest
and t h e gelier e f the goods, a n d contains a
statement e n t t e
face that i 4 i s issued f o r eneds actually purehased o r s o l a ?
The Chairman:
ur. Strong;
Y e atruck thet a l l owt.
H y , Chairasn, t h i e circular which c a s
Considered b y the Advisory Couneil has not yet been aon]
sidered b y the Governers s t a meeting.
I t vas submitted t e
a Sommittce o f five deverners that ast i n New York Inet
week t o eénaider other mattera, t h e informal underetanding
being that i t would b e taken u p a t our meeting here thie
WEEK» T n a g m u c h a s m a t o f the Governors hayes not h a d a n
opportunity
t o consider
i t a n d dieoves
might i & n o t s e r v e t h e p u r r e s e
i t S m o n e themselven,
t o h a r e r e u r Yecoruendaticor;
submitted t o the Geverners f e r consideration n e w whan they
tuke u p thie proposed regulation,
s o that ther g a n Aave t h e
benefit o f your views o n the astter?
Tha Chairman:
T t think i t i s well f e r the Governers t e
know that we have put i n thet recommendation, and they ean
follew i t up with further elimination, i f they want to.
Y ¢
is & question o f elimination I think, (Laughter)
is the conse o f the meeting, w e will leave i t
that way,
W e have put before you our resemesndation i n
that particular, a n d w e wil} leave i t for the Governors
to
consider.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Now, I
ehali b e c i
t o hear frem t h e Governors o n this
| Question e f h e e y o u a r e ¢ e t t i n g B l o n g o n c h e e k colleetions.
“e want that because w e will probably b e asked for our opine
jones b e f o r e v e r y J o n g a n d w e w a n t t o k n o w t h e p r a c t i c a l e n d
ef it, h o w i t i s werking out, a n d b o w i t g a n b e worked out.
Ur. Shrong: T h i s subject of domestic exehance, se
| We have considered i t , o
f as the Governora have considered
it, divided iteelf nateraily into t w e quite separate accounts
that ara, heweve®, interdepenitent.
O n e i s the a m ad juetment
of talances between Federal Recerve Banke that arise f r o m
the handling o f checks drawn o n Pederal Reserve Ranks;
and the other i s the general subject o f clearing checks
| dyeen o n member banks.
Some Tigures that w e heve drawn u p i n Ber Yerk, f r o m
eur experience
i n the handling o f cheeks drawn o n Federal
Reserve Banks, a r e rather enlightening.
S i n c e t h e bank # a s
opened, I should say starting with about the end o f the firet
| Week i n December, o r the middie o f December, w e have handled
through t h e aegeunts sith t h e other eleven h a n k s «a total o f
and
ninety millions s f exehange, t h e net debit = a oving t o u s
by the other eleven banke teday i d 338,060,000. T h a t looks
2ike 3 vVory startling s u m o f moncy, a m d m y experience i n dige
cuesing t h e matter i t h t h e Governora leads m e t o balievs
that t h e ¢xpense o f adjusting these balances seems t e them
to b e &
Very s e r i c u e matter. 4
h a v e asked o n e o f the
best insurance brekers i n New Yerk t e prepare @ propesition f o r the ehipwent o f currency t e eettle these balancen.
fe hase subsaitted t o us 4 schedule o f Siammen figures for uhipmont between All the twelve tanke; that ia, 132 avenues o r
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
shisment o f currenty.
S e rave apnlied h i s prepesitien
te the exvenve o f settling. t h e balance o f cighteen miliicore
Reserve T a n k o f N e w York,
and w e find that i t would cost $1900; that i s te say, & t
Will eost u s 6966 t o eettlie out h e i fef the expense, a n d
the other 2006 will b e divided amenc the other eleven banks.
So I =
not seared t e death yet about the exrense o f
settling balances that ariee cut e f these transactions, i f it
is thoucht w i s e t o m a k e e x c h a n g e t h r o u g h t h a t method.
The gress figures indicating the expenses o f shipping
thie exchange, i f thea offset had mot Grisen, a r e Sige rather
interesting,
It would cost 25,800 for the other e l e v e n banks t e e p
ua the mmount that they e r e u s o n the belanes, a n d i t would h a y
vost u s about $3400 f e r use t e ship “het w o ewe t h e m o n t h e
eredit e i d e o f ovr acceunt,
s o thal t h e grees expense, a p ~
preaching $0000, ica redyeed t e = net expense o f about 91500,
It s e e m s t e w e t h a t t h e s t r i k i n g t h i n g a b o u t e u r a c e c e n t
is that, having hendied ninety miliieons e f deliare throuch
the apeounts, t h e r e w a e 916,000,000 net, t h a t i t will c o s t
about $1806 t o settle,
I do not want you t o feel, & however, that I believe that
what w e are now doing i s a esund thing t o de,
to two things.
I t gives rise
I t creates « fleat between FPedetal Reserve
banka thet I think ought t e be precipitated and eliminated.
It alse opens the deor t e member banks abusing the privildge
of drawing against balances that d o not exist.
At the leapt meeting o f the Gevernors that matter w a s
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
discussed a d naueoum.
T t finaliy resvited i n the ape
pointmwent o f & thereughly competent committees t e deal i t h
the matter, a n d #hen that ecomaittee o f five met c t f e e d
that inetead o f having twelve opinions, t h a t existed a t t h e
weeting o f the teslve Governors, t h e y h a d reduced i t t e five
opinions. (Laughter)
A p p l y i n g the precese o f ad
nayvgeam exhaustium w e finelly sueceeded i n preparing «
report w h i e h will b e submitted w h e m t h e Cevernors meet a n d
i hepe wii1 result i n = methed being arrived « t for deaiing with the balances between the reserve banke that will
be proper, fair and economical.
That, briefly, i s the situation f r o m the standpoirt o f
Hew York a f the cheeks drawn o n Vaderal Reserve Berks.
Mow, a m te the gener] subject ef oollectinga checks
ayveaen o n customers o f menher bake, t h e y are & Littie
differentiy situated i n Nee Yerk than i n any other d i e
trict. T h e r e are three reserve sities i n evr district;
New Yerk, Brocklyn a n d Albany.
B r e o k l y n i s included i n
the Wew York elesring house saree, w o that w e eniy have
éLbany t o deai with i n handling cheeks drawn o n national
banks, member banka,
i n reserve cities,
three m e m b e r banke i n Albany.
T h e r e a r e only
Y e have h a d n e great dife~
ficulty i n handling cheeks drawn o n those banks, a n d m e
preblem hae arisen with us; but w e have been ureed --- F
Will not aay urged «~— but i t has been suggested w e were a
i2ttie slow i n wadertaking the clearanee o f cheeks within out
district. Therefore, following the last conference o f Gever~
indicate
nore we undertook t o get some data i n Mew York t o tmtinkkn what
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
the problem would b e if we undertook first t o clear the
gcheeke within o u r o w n district, a n d eeeond t o clear checks
aroun o n mesber banke outeide o f the Dietrict. I
esn-
not give y o u the figures f r o m momory, b u t a g t o the whole
protiem o f handling checks f r o m t h e whole country,
i t is
something iixs this?
Tnolusive o f the clearings that c e throuch the Wer Yerk
Clearing Feuse; that is, o f the cheeks which are safuaply
handied between member banks i n the City o f Wew York, w h i c h
average i n cmotint from $250,000,000 t o $500, 006, 000 < i .
we find that 446 out o f 482 momber banks i n our dietrict,jif
they sent e l ] o f their items, vould s e n d u s £55,000 shecks
every duy, amounting t o ©46,506,000, w h i c h w e would have t e
handle,
i may b e wrong i n thia, b u t I believe that. t h e
theory o f charge a n d credit which h e e been diecuesed a s the
proper method e f clearing cheeke throughout t h e country e a n
only b e operSted i f the debit i e always offset b y the oredit;
that ie to sey, if we are to charge checks to our member
banks? accounts,
w e have got t e e@erxredit them with t h e ehechs
that they ore reosiving, othervise the balance will b e
constentiy impaired, T r e a t will necesesrily impiy that
we w i l l g r a d u a l l y t a k e e v e r e h e c k s t e < o t h r o u g h t h e
Vew York Clearing Rouse<
I n order t e have t h e offset --«.o”
beth aldes o f the account « « - w e have endeavered t e set a Line
on what volume o f business w e would have t e handle i f we
teck member b a n k checke i n New York City.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
bs
AS nearly o s we can estimate there sre shout 2506 man
engaged f o r twe hours every morning,
i n Wer York, m a k i n g u p
the Gleuring howsae records o f the city clearing.
W e esti-
mate t h e t i f @]1 t h e liters g o i n e t h r o u c h t h e e l e a r i n g h o u n e
would witinetely come t e us, that i s t e say, eliminatine t h e
SShunke which sre fot meghere, a n d taking exly the twenty«
minebanks that a r e clearing, a n d that a r e members o f the
Pederal PReverve Bank System, w e beifeve i t would result i n our
handling witimately ene balf e f a1] the items that g o throush
the clearing house, a n d i t would prebably t a k e f r e m 1,060 t e
1,500 Glerks t o handle that matter alene.
O f course w e
have the benefit o f a large amount o f reseurees i n gold
ietked u p i n the safe deposit vauite there, but F do not
want t o eenduet thie enermous operation, iniess i t i s neces<
weary t e d o it. F u r t h e r m o r e , I
d o net want t o age t h e
Yederal Reserve Banke i n Wew York underteke that tremendous
operation until w e know that i t oan be successfully done and
done o n sound Lines.
the
Speaking only for New York bank I have w o many very
grave doubte about t h e soundness o f the echeme that b a a b e e n
diseuesed,
o f charging items a n d erediting iteme through
the reserve accounte o f the member banke, that m y poaltion i e t e uwree the utuost sntiteerit ion a n d gare before
we undertake something that may lead u s ente dangerous
ground.
The Chairnan:
other Governors.
V e r h a p s w e w a y hear fren some e f the
M r . MeTeugsl, w i l l y o u tell u s h o w y o u
are getting @lone i n Chicage?.
Mr. HeDougals
I n Chieage w e have been urged b y t h e
Federal Reserve Board t e extend c u r acticities, a n d w e here
considered i n executive committee eeetings a
numer e f times
the advisability o f epening u p the entire district.
O n e
thing, s b o v e all ethers, w h i c h h a d delayed action, h a s been
the lack o f any definite anthority o r advice a g t e what w e
’ere t e d e i n the matter o f charginc a n d crediting itens
The Board i n Yashington h e a indicated some iapationss
recently, a n d that b a s resulted i n our ¢oneiderine t h e mate
ter a g a i n l a s t w e e k i n e x e c u t i v e a g e x k a x c o m c i t t e e meeting’.
I t h i n k t h a t i f Tt should r e a d «
letter t h a t wea sent t o
“Governor F a w l i n , f o l l o w i n g t h a t meeting,
i t wowld g i v e o
pretty good indication o f what w e ure prepered t e do.
T t
*111 alse b e interesting t e these centlemens
t wicht also b e interesting t e soke o f those present:
to k n o w t h a t u p t e t h e present t i m e w e h e v e c o n f i n e d o u r
operations, i n so far ae check handling i e soneerned, t e
items drawn upen member banke i n rogerve cities and items
r
drawn upon the other federal reserve banks.
O
n
January 15, 1915, this letter was s e n t t
o Hon, Charles § .
taulin, Governer, Paderal Reserve Board, Yashingten, > . ¢.,
*eive
The Federal Reserve Bank o f Chicago u p t o the
present time hae confined its activities with resrect t s
the handling o f cheeke t e items drawn o n member banks i n
drawn
reserve c i t i e s o f t h i s d i e t r i c t a n d t e i t e m s x g v a e n
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
the
ether eleven Federal pescrve B a n k e
"The matter o f extending o u t activities t e include t h e
hendiing o f cheeks drawn o n @1] other banks within this
rights with reapect t e t h e charging a a d crediting o f items a s
received.
C u r Exeeutive Committees a t Ete mecting today
aeain discussed t h e eubject a n d h a w inetruoted m e t e present
te yeur Board f o r econsideration &
plan w k k wnder which i t i s
prepesed t y reveive f r o m i t depositers items o n all member
banks within this dietriet.
items drawn o n member tanks within thie die«-
Ge evedited twcediteaciy uren reeeipt.
"2 ~ Items regeired n o t t e b e imeeditely charged
ecainet m e n k e r banks! a e c o u n t s , charzces t o b e d e f e r r e d f o r
two daye affording time for member bawke te preteet their
reserve b a l a n c e s .
"3 = Mombor bagike Leeated i n the City o f Chieasge, i t i s
believed, K i l l agree t e Garry nine-sighteenthe o f thei
reserven w i t h u s , t h e execean t o s a v e r t h e aescreecate sanount
in tréomeitt arising f r o m deferred churros.
foregoing plan, i t i s believed, w o u l d b e faveratiy
reeeired b y our sember banka.
wii
mower
tie ourry
Willing:
[ h e
w e e s
P r o v i d e d t h e Chicace B a r k y
balances
t o a d e p t t h e r i a n & e owti 2 :
referre4
i
t o shore
f the eane
"Se grait your advice i n the premises before procecde-
ing further.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Very truly yours,
Severner.*
w e
That. t e t h e w a y « ¢ u n d e r s t e n d
i t i n Chieage.
Our o p e r a t i o n s b e t w e e n f e d e r a l r e s e r v e b a n k s h a v e n a t u r -
Sily n o t been e o great a s these referred t e h y Governor
TtYoRg, @nad the net result o f eur eperabions tedate h a s ore«
sted & balance e f $2,396,759.36,
o r the m e t amount d u e u s
fvom the Federal Reserva Banks; t h s t da; that i s the asount
Lo S e t t i e w i t h use one w a y o r another,
There i ¢ one feature i n Chieage t h a t I
k Mr. Betougel m i c h t heave mentioned, a n d that i e the
Glaim b y s e m e o f t h e i a r c e r t e w n e t h r o u s h o u r district,
which
¢o mot happen t e b e reserve cities, B u t d o beve quite a
GlLientellie o f country b a n k bueinese, complaining that b y
opening u p the Federal Reserve City Banke there i e e die«}
orininstion ereated against then which was not permitted by
iow,
A n d there 1 8 something i n that, tees
T h e banke
in theee reserve cities began Supplying theic austomers
With rubber atampe, a n d the customers would atamp o n the
chectks, " P a r through Federal Reverve wank a t Chieago*,
which attragted t h e attention o f these othe geod sized
Cities which were n o t having that privilege;
n d there dis
& great deal i n that, too,
Ur. MeDougal : A n d i t eae “ a d e the basie f e r sslicitae
tiono? businese,
" Y o u r cheek, d r a w n wren us, i a gged i n
thie district a t par, «hereas t h e fellow y o u a r e deine bugie
nese with Gould n e t offer y e s that privilece a t p r e s e n t ,
.
*
That i s very trut.
The Chairaan:
M r . Seay, will you be good enough to
give v s euch information a s you have Bioeng thie line. F
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
4
know you have been studying the avbject.
Er. Seay:
M r . Cheisman,
w e haye all b e e n studying
the subject from different angles and from the point o f
view o f gonditions i n the different districts. I
that I
others.
euppese
a m only @ little further f r o m « Genciusion t h a n t h e
“ Y e have been endeayering t o ebtain t h e opinion
of bankers i n our district o n thie matter, a n d w e find thet
quite a
state o f confusion exists wnonc them.
T h e
moat thet w e hoped, i n asking then t o give usa their opinion
of whet ought t o he done, was t e get them t o thinking o n the
subject i n order that they sight see how comphicatedstt wiB,
and Bhat o u r o w n diffieulties were i w coming t e a oonclesten |
in their behalfy
Ye sent o u t certain inquiries t e five hundred members
and we received replies from only about two hundred. :
think t h e others were tec much puzzled t e reply.
I n fact
we got many letters indicating that a n d one gentieman pro-
posed that w e have a convention texfieseuss it. (Lauchter)
i told h i m I thought i t would last 7 2 6 days o u t o f the
year. ( L a u g h t e r ) i
informed h i m that the Governors hed
been having several conventions t e discuss i t and that they
head not arrived a t any definite conclusion a n d they felt
hopeless about arriving at a conclusion through the sediun
of & sonvention. I
think sont of the Gevernore here ara
familiar w i t h t h e c h a r a c t e r
e f questions t h e t s e r e a s k e d t h e
number banks, begause w e exoehaenced Giroulars; b u t I think
| perhaps the result o f the inquiries i n our district may be
of interest t e w a ali,
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Governor Strong mentioned the two plans under eonsiderae
tion.
O n e o f then wag t e give t h e credit, a n d t h e other
was deferring t h e dbbit o n such oheeks thet w e reosived a n d
forward t e member banks s n d making immediate debete i n
order t e make t h e effeat.
Y e therefore asked t h e member
banks the firet question, which ito as Pollewes
"De you believe that 311 the cheeks gent t e us b y you
Should b e counted b y yea a t ence i n your reserve, a n d that w e
should give you credit o n reeeipt and pay your drafts against
the same before w e receive advice o f payment o f suth ktean?®
One hundred a n d forty-one replied y e e t a that,
one replied ne.
Fifty
F i v e made n o powitive anever, a n d t h e reeset
are yet t o b e heard Prom.
The seeond question was: “ o u l d it be satisfactory te
you t e heave u s charce againat y o u r reserve Sceount w i t h
thie bank a l l ehecks dravn o n your benk, iemediately o n
feceipt b y use and befere they reich you for examination?”
Gne hundred and thirty replied yea t e that; fiftr-four
replied no. T h i r t e a n gave m o pesitive ansrer and the reat,
Were gilent.
The third question wae:
"Should w e give you eredit o n receipt for checks o n
ether banks sent b y you unlese w e here your permiesion t e
_tharge t o your account o n regeipt checke o n your bank
received f r o m sther banke?®
thrity-three said yes t e that.
T h e y wanted t o take
but they would uct give. ( A p p i s u s e }
O n e Pamdred and
forty+twe s a i d no, a n d twenty«-twe gare n e resitive anever,
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
The fourth question waes
*vhich weuld you prefer <==
{A}
T e have o c eredit imeediately a l i cheeks
on otner monhere revsived f r o m y o u e n d charge t e
you imeediately a11 checks o n you received frou éther mom«
bere, y o u t e agree t o maintain # balance o n our books, i n
eaditionsc y o u r iocal reserve, sufficient t e meat a n y e x e
seea o f debits over credits, a n d t o pretect ite-e «ficat
in the main,*
“Or the alternative:
(8)
T o hove ue credit checks sent b y you only after
adviee o f payment, o r f n after the lapse e f sufficient
| same ‘ o reach destination, a n d charge t e you checks drawn o n
your tank only after acknewledgesent o f receipt b y rou, o r
after the lapse o f sufficient time t o reach you?t?*
Peplying t o the issediate eredit prepesition e n e hundred
and nineteen ansvered yes, that they were willine t é eustain «
balance i n exeeses o f their legal reserve.
three replied no.
P i f t y ~
t w e n t y gave n o positive cnewer. Z
have that Just « Tittic wrene, gentlemen.
O n e hundred a r d
ninetegn preferred t h e ianediate oredit dydten. P i f t y - o i g h t
preferred postponed eredit t o give time f o r the sheekse
to
reach both ways, a n d twenty gave n e pesitive answer.
The Pifth question waa,
‘oulde
r would not plan (A) sugcested above tend t o
Lead t e the practice e f drawing’ Afainet non-exisiting beal~
ances, anc promote 'kiting( beth o n the part o f banks and
individuala?"
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Piftty-Skew five replied that it would.
Winety-eight said
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
mo, a n d forty-four eave n o ansver.
The sixth queation waa:
"So you think thet items outside c f Dietriet Ne. 5 showld
be handled upon the same terms a s fiems within the distriat?
If #0, which plan under heading No. 4 would y o u prefer,
(A) or (B)e"
Ve question Mos 6
one hundred a n d forty~eicht a n i d that
items outside o f the district whould b e handied o n the same
plan a g i t e m s i n s i d e t h e diatriet; t w e n t y - t h r e e e s i d n o a n d
twehty-six gave n o positive answer,
The seventh question was:
"De you think i t reasenable under either o f the abevra
Suggested plans f o r this bank t o make 4
charge f o r eoliect.-
ing items outside o f Dietriet He. 5 ? *
Fertyeane w a d d thet t h e y thoucht i t was right t e d o
that.
O n e hundred a n d thirty thought not, a n d trenty-six
save n o positive sanever,
Cvestion H e , &
wags
"De you think that any member bank should make a
Gharge o f exchange f o r items drawn upon i t +--+
(e)
i f coming from within the Pistrict,
(a)
& f coming from outeide the District,
Tf sg, who should pay it?”
Sixty-one thought there showld b e a charge; sixty-nine
thought there should m o t b e « charge; sixty-seven would n o t
give & positive anewer.
T h e r e was hopeless confusten o n
the matter a s te who should pay the exchange.
Fleven
sald” tne reserve bank showld pay it; eight said that
the payee bank should pay it; fortrefive said that the
i?
sanding bank should p a y it; four said that t h e selieeting
bank should pay it; three said that the drawer shewld pay i t
and 12% did net give a reply om that question. (#prlawee}
4a to the number of iteas handled inthe distriat, f
sent out some queric® thet weuld give them the least pessible
trouble. I
4id not send them i n the wey i n which fT wanted
te send then. I
was rether discouraged b y a n experienesd
bank mon i m our bank, the Vederal Reserve Agent, who did n e t
think I oweht t o eend the: e t @ll. I
teld h i m I wanted t h e |
inforssti¢n and was going t e send them. I
merely asked
them t o keep & n accqunt fer a eel a n d give w e the volume o f
items that they were sending aut and the amount received from
all sources, I
wanted t o everwhelm them a Little with the
business they were bhendling and ase whet the result might b e :
if it all vent threuch our bank,
I
t was-for that purpone
that IT sent the inquiries i n the fors i n «heih T sent then,
I asked t h e m t o give t h e informution a e t e the balance
from itmes sont o u t b y them t o their presently i s e l g n a t e d
reserve a g e n t e ;
t e their reculer corresrendents
cellaneous serrespondents. I
a n d miae
found the average mwseber a f
items went out for gix days, per day, was 144,600, a n d the
aaount 13,000,000,
T h a t invioved,
o f course, i t e u s r e e
oeived from state banks, non-member banks and all.
T t
| @uppese that w e would handle a t least o n e half o f that i f i t
@ll Game toe ua,
You remember that the Comptrolier obtained free the
| bank, sone tine prior, certain information, a n d betveen
| the two we might form a somelusion.
T h e s e returne oxuse
in very reeantly, and I have not had tine te anéiyne them
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
any o r e t h a n I as
The Genmstroellar e k e d the folleving queations o f the
pankot
T o give t h e musber o f ¢hecks o n other menber banke
Guteide o f own sity depowited b r depesitere other t h a n
metiber banks.
I n our district that axmeunted t c 31,000
checks o n member banks,
Ey. Throne:
Y a s that a n avernge f o r one day?
Mx. Seay: I
presume that i s a n average f o r one day.
Then h e asked f o r 211 checks o n ether aember banks r e -
ceived from correspondents outeide o f the district.
T h a t
brought forth fourteen theusand, making 4 total o f 46,006
items,
I f you #i11 ebeerve h e did not ask them t e give tihom
mumber of checks received from correspondents within the
district.
W h y , I
do not knows
T h a t “ould b e a volume. s e
very .
|
large, perhapa, s e the other, o r nearly 3 6 lance.
A
L
any rate, those two items ameuntd t e 45,000 and the amount,
ig *¢, 000,600,
The resources o f cur bank at present are 35,0
on depesit a n d 2 1 , 0 0 0 , 0 0 0 c a p i t a l ,
a n d y o u R i e s therefore eee.
what t h e volumes o f teeiness might b e i f w e underteok t e handie
thess checks o n our member bankas
These are the reeulte, gentlemen. . Ye have yet t e req u
fiec% vpen them, a n d disset them, and draw our sonelusions
from thom.
Mr. Yeld:
T h e information y o u bave gotten, relative
to the number o f items a n d t h e velune « « « the manner i n vhich
You have aeked for the information would rise te duplication,
Would i t net; w h e n y o u asked f o r a]1 t h e items t h e banks
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
sent sut?
ur. Seay:
Y h a t i s sent out o n a single day.
Fold: t
should think i t would give 4 duplication
per cent.
Seay: I
would mot think ao, sir.
+ Voids Y o u . get what t h e smaller banks send t e tie
Maltimere bank, and what the Baltimere bank gets “hen they’
aend i t aut.
tr. feay:
T h e iteme sent b y the emai] banks vould n o t
he handled a t t h e other banks until a
eourle e f days after-nnx
wards ; but taking the same day, these items are o f inter~
est a n d would come through.
Hy
Ur. Teids
T h e federal] reserve b a n k handline today t h e
items which t h e country b a n k handled t h e d a y before yesterday
or yeeterday, w o u l d make a
Wr. S e a y ?
f
duplication just t h e same.
o wheat extent.
M
y estimate w o u l d b e
that w e would have 70,000 e d d a day, i f yeu take t h e s o m }
trolier's figures, a n d they s e e m t e b e correct.
Yr. Fancher:
V i l i y o u tell u s sbout y o u r experience
in handling c h e c k s n
o other federal reserve banks?
Wr. Sear:
f t presume a1) o f our experience i n handling
checks on. the other banks h a s been that t h e number o f
cheeke i s insignificant a n d I have not theught i t worth while
te report t e this conference t h e nusher e f cheeks.
¥ e
have actually exeahnged debits w i t h t e n o f the Federal p e e
serve bunks a n d w e are i n bedt t o tee o f then.
are i n debt t o us i n « emall amount.
Y
T h e ethers
e are very heavily
indebted t o Hew York, t w o a n d a half million dollafe a t this
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
prealing
$0
t s
n e v
ley York menber banks
e
u
r redisconnts
mmtisnt
t a deal
e y og f
“ae D e e n u s e d
1eans
te
o is HoM e m v u e r
cities,
weupa FaESGAYe.
ue g h a c k s
O F wo x S
and
aBaarv?
o n member
Federa}. R e s e r v e
farvays
agninet such balances
4 sated
f
¢tae
thoae things,
oa
ni
o
a
t take
eend cireular, h i n t e
atroncer,
ana I
S a r r e t keep u p .
settle
s u r debi
thie t i m e o f t
&
t n e mA
Phare
Pee
aei
o f ourraney.
year t o esttia 1 % a n d that i s b y the ahirye
*@ G o not hapeen t e hare anyihine b u t
8 @Qoulid tranfer o u r
mold,
and t a k e
Our Chances o n getting b a c k a n equal anount o f gold.
That i a shout
the a t a t e o f affaires w i t h r e l a t i o n t a
the » other f e d e r a l r e s e r v e banks.
The C h a i raans:
result o f a
district,
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Fd
Bik »
lst e f
lr, S t r o n g h a g «
questions
statement w h i c h i s t h e
t o member banks
i n the Wee York
mieht b e interesting slong ferdt h e same Line.
Ye h a v e 4 8 2 m a m b e r b a n k s
i n our district
Ye sent t h e m s i x inquiries a n d received 4 3 6 replies,
up
te t h e t i m e t h i s s t a t e m e n t w a d made.
The f iret question w a s whether i t would B e eatisfactory
to h a v e a
¢harge m a d e a g a i n s t t h e i r r e s e r v e account.
anid yes a n d 110 said no,
if w e s h o u l d g i v e t h e n i n n e d i a t e e r e d i t
On receipt
o f items sent there.
2 7 1 e834 res a n d 5 6 said
Tt.
The third question w u s winthay w e shovld give credit
on re@eipt unless w e had sutherity t e charge iteme.
116
said y e s a n d S O 8 s a i d m o ,
Perhaps I
had better read that question,
a s i t i s not
Suite olear.
“Should w e give y o u eredit o n reeeipts f r o m other banks
unless w e heve your permiesion t e charce your ageount o n
reecipt w i t h eheeke o n your b a n k received f r o m other banke?*
216 maid yee a n d 308 snid no.
The f o u r t h q u e s t i o n w a s w h e t h e r t h e y t h e u g h t h e y
ahewls omke charges for paying cheeke drawn o n their own
banks.
2 0 2 said y e e a n d 2 2 2 s a i d nc.
The fifth question w a s whether t h e y theught t h e Pederal
Regerve Hanks ghould make the tharce fer celleeting items
| phgyabae outeide o f District Mo. =. 1 2 4 said that they
tigught
i t w a e desirable,
a n d 2 8 5 s a i d i t was n o t desirable
fer the Federal Reeexve Kanie t o make charges.
The s i x t h q u e s t i o n w a s w h e t h e r t h e m e m b e r b a n k t h o u g h t
/ the Federai Reserve Fanks siiculd held items payable outside
or District We. 2
i n transit accounts, puking proeesds avnile
*
@ble when cheeks
were paid.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
S 6 8 theught that t h e y should b e
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
7
w i?
s IRB
s
*
aos a2
r ee
&
ee.
Sofe
Fe
RFit t a
nat
Tse
ect e o n
)IrT
eaTL
S
&e
%
2
w
aSial
L?
w
ste
cate
#oo
a
hank.
"Ye ahve handled, s i n c e o u r epening,
w p t e and include
ing t h e 15th instant, through o u r oity olearine, «
tetali a f
11,409 items, agerecsting -030, 532,907.85."
Theat i s about t e n per cent i n agopnt, a n d lisea than
ten por cent i n number o f items that daily e e throuch t h e .
Yew York Clearing House,
"To have handled through our sountxy clearings a
total o f 158,958 items, ageregating $37, 571,872.87."
That i e = little were t h a n half o f what seuld aaily 2 c
through o m asceunt i n nusber e f iteess
"On Recember 15th, w e extended t h e funetions o f this
bank toe inelude t h e clearing e f all checke a n d drafte drasmn
againetmesber bunks o f District Fo, 20, and t o irelude checks
and drafts o n othem Pederal Peserve Barks, a n d o n sember hanks
in other Bederal Reserve eities.
"On Recember L7th, owing t o the action taken b y the
Gevernora a t t h e conference i n Washington,
W e advised o u r
members t h a t w e w e u l d m o t t a k e i t e n e d r a w n o n b a n k s s u t e i d e
of our district, except these drawn o n Pederal Heserve banks,
“And later,
o n December 24th, aeing t e the restrie-
tions placed o n endorsenente b y neighboring districta,
w e were
Sompelled t o limit the items t o be handled b y thie bank, t o
these bearing endorsements entirely within t h e district.
& result o f t h e s e restrictions,
w e have h a d 4
a
considerable
sccumlation o f bklanees against u s i n &t. Loule, Chicago
and New York, which wauld n e t have resulted othervise.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
*"Sinee t h e extension o f the fumetions o n Decesber 25th,
s
we Kave handled
daily, 5,561 items sarreg=
number o f items handled f r o m December 1 5 t h t e January 1 5 t h
inclusive, w a s 137,541,
"A41} i t e m e h a n d l e d
chareed
in
t e t h e member banks accounts
o n t h e d a y reesived a t
thie bank.
*4t t h e outeet, o u r mail w a s censiderably delayed i n
getting o w t o f our offies, a n d owing t o the heavy Xmas
business,
T h i s reeulted
t h e i n c o m i n g = e i l w a s a l s e delayed.
in q u i t e h e a v y d e b i t h a l a n c e s a r i s i n g a g a i n e t t h e m e m b e r
“On the fifth d a y of t h e oreration o f this department,
debit Balances r a n over #1900, 000,00.
ney r e a c h e d a
@vadualiy.
reduced.
total o f #3, 261, 000.00.
T h e tote]
O n t h e serenth
T h i s has bean
a t t h e ¢ l o s e o f business t x t a r s
day (the 16$h instant) being $458,295.78. A p p r o x i m a t e l y
two-thirds o f these debit balances arise f r o m cur relations
With benkelecated i n three o f eur reserve cities, nasely,
Yuskeges, Ghlahoms City and Yiehita.
O n the 16th instant,
out o f the debit balanees ageregating *454,295.78,
$235,000.00 was represented i n Oklahoma City and Tichita
BLGAnS.
" h e banks
i n t h e s e t w a c i t i e s heave & ® large n u m b o r
of n e a r b y country c o r r e a p e n d e n t s t h a t i n d u l g e
i n t h e prac-
tice o f drawing drefte against their Tichit« correspendente,
Thes@
drafte a r e i n the nature o f transfers i n round smountes,
and since December 15th, t h e leeal banke; that is, t h e
Fansas City banke have been: turting these transfer drafts
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Federal Peserve Bank at Kansage City, for credit,
tha debit balances; t h u s eceasioned t h e tetal
would b e greatly reduced.
m4 consigersble eouplaint f r o m o u r country
banks o n sceount e f the leas o f exchange which they
Ya believe, however, t h a t t h i e m e m objestion will b e
serregsted e h e n « a thoreveh e x p l a n s t i o n
i s made t e each
hanks shoving them the benefits which they say derive
syuten.
"Considering t h e wngatisfaetery eonditicna ender which
have b e e n working,
a n d t h e faet t h a t * ¢ have n e t h a d t h e
cooperation o f the ether eleven banks i n the way o f clesring
facilities, t h e writer believes that t h e plan h a s worked a s
Well a e Gould b e expected.
*"Regretting Governor Saeyer's inability t e attend, a n d
with good
wishes
a3
® f o r a most snecessful meeting, I ,
am
yours,
(Signed)
&
. Threli,
c a e @ h n h i e tr.
Ve Slee enclose t h e opinion o f our attorneys
regarding waiver of*@erund notices and protest.'*
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
ether Piguresa eubmitied a r e t h e slearing figures
with t h e exeeption that there use
aituatian
with the other
iargeest i t e m i a L o u i s .
Louis about 2660, 006,
T h e y
T h e y o w e N e w York $206,900,
Test a r e a ) 1 n o m i n a l ,
aredit balanee that i c owing Kaneas C i t y i s
frem t h e figures a e y o u hava
that F a n e s s
entire d i s t r i a t
Folume
Ve h a d o v r a u d i t e r
i s lees,
a t Kansas a
week, o n d threugch eorreapendernce s i t h the £
member b a n k s w e l e a r n e d t h a t t h e Fangsas C i t y b a n k e a r e
ough Federal R e s e r v e H a n k i t e m s o n s u c h p o i n t e
that they h a v e n o cenmestion whatever.
e
h
situation With relation
to
the
T r
T h a t vould h e
Ct i t i c
O
u
r ine
formation leade u s t o believe that # e would n e t c e t a
a Twin C i t y B a n k w h e r e t h e y n e w h a d a n a g e a
®
Thay Gontinue t e send t e that peint direct, a n d w e
would simply get the eurplus items on points where they
had n o connection whatever, a n d would probably handie t h e
some Muanber i n amount a n d i n volume, a n d net a n y mere than
that.
Hergan?
T h a t i e t h e eage i n Chicago, too,
Hepeugal ?
MeDougel : Y e a , sir.
Ur. Yelias
( O f Dallas) T h a t would net b e the ease i f
&Li o f t h e t e e i v e b a n k s s h o u l d e s t a b l i s h a
Permanent p l a n .
4am T a n ' t i
t true that a l l o f the mémber tanke a r e not ubilig«
ing any plan === for inetanee take the ease of Kansas City: <<-
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Sa
k i w H e MepepER
transit
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
wae Q n i m p l i e d a u t h e r i t y w h i c h w a e c e n t a i n e d
i n t h e law.
Covered b y the blanket provision thet Pedere
s@ thines w h i e h
business described i n the act.
implied i n the other
paragraphs y o u refer te.
“ex h e would conatrue
that way;
bu
2
6 i t works t h e other
definition o r exact interpretation o f o n e
paragraph regardless e f what the other paragraphs have t o say.
i think w e have s geod sepinion o n that. |
it i s a
think
very r e a s o n a b l e o p i n i o n t o c i v e s
Chairaan:
T h e r e i 6 a neceasery opinion, i f we are
d> t h e business under t h e law.
Strong:
Y o u represent t h e n those 2 7 8 members
Geverner Seay's, t h a t d i d ae
of
a n e v e r that question? ( L a n g h e
ter)
The Chai raan: Y
a m not prepared t o anewer t h e quene
tion definitely, b u t I would like t o see how i t i s going
to b a worked o u t before w e make a decision.
I netics i n the arrancement which y o u sige}
gect, Hr. Y o r c s f
p u r district, t h : ‘ o u introduce
tie outside element.
Y o u sugrest
mindle c h e c k s
o n members
a t yo b e prepared
i n your distric »
wut i n erder t o
ae s o the banke will put u p @ little surplus balance fund b y
which t e handle t h e n .
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Thatxken
Yes,
i t is.
i s a
little e x t r a n e o u s
to
t _—_—
a e s og 3
a*
“
9
The Chairman:
Both
I
a
y o u @lininate that?
f it i s eliminated there w e only
uy or thing t e Gai} b a c k upen, a n d that i s t e divest
eines E
Se
8
the credit a n d
interested
i a m very etroencly
banke cuteide o f Chicane.
i n the mesber
dosen't m a k e e o m u c h d i f f e r e n c e
an t h e i n t e r e s t s
o f t h ea
t
e
m e m b e r
i n Chicago,
o f course,
k
e a &
Balance
a
reserve b a l a n c e w i t }
but
banks outside o f Ghieace I T am
very strongly o f t h e opinion that t h e r could n o t
; %
I t
Ps8 expected
he r e s e r v e b a n k s u m l e s a t h e
a t their credit o h their beeke w i t h t h e Pederal
Reserve Banks i s absolutely within their o w n contrel. t
ae n o t t h i n k i t
vag running &
etre
a =)
ula b e attempted i n any other #ar.
i f
bank a n d h a d t o keep a 2 gertain reserve a t
& @ertain place, a n d I was away a considerable distance f r o m
that place a n d had euch bu@iness w i t h 2 larce nugher o f cuse
Ontomers drawing checks o n me, a n d TIT4i¢- s e t know whem they
drev them er the amounts drown; i f I had no knovledse o f a
what w a g sent out, b u t t h e y were eharced t e m y reserve
ageount without m y Knowledge a n d coneent,. Iwould protest
wntil deomeday about it.
T *oulda'tt e t a n d f e r i t a
+ z
minute.
are doing i t not.
ere PSM S
Tne Sneireans t
know they a r e deing i t now, b e t I
to it just the sa
Mr. Aiken:
Y o u reserve your figure o n the besks off
your o w n bank?
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
The C h e t mar:
On the books o f x e out o w n bank; y e s .
a6
Wr. Aiken:
t
Ger Yngiand, T
T a m very mech surprigedat t h « tanks ix:
4414 not send theme . general cirenlar,
pave inquiries o ~ & great many country banks thronch
district,
a n i T f have y e t t o f i n d o n e t h a t e b j e s t e d
t e having
the c h e c k s a g a i n s t h i m c h a r g e d t h e n i g h t t h e y m w e r e s e n t a f f ,
Ve gave h i m eredit f o r hie cash lather t h a t oame i n i n the
morning, «
The Chairasan:
Y o u r banks have setten accustemed
t o
country b a n k clearing.
Alken:
Y e a , t h e y heaves.
T-9g¢@ c h a r e t e
Mr. Jaffrey: I
a r e made t h e second ARY »
would like t o know the Governors!
feeling about the national] banks i n our dietrict being
Willing t e give v p the exchanee item.
T
n our district w e
=
have banks
that a r e three a n d four days away f r o m Vinasapelis
ana those smail banky have Minnespolis exthange o n l y about
three o r four months f n the year. ‘ T h e balance o f the
yesr t h e y are shiprine scurrenoy t e cover their balances
with us,
A r e they g@ing to be expeeted te ship curreney
te Minneapelie t o cover these aheoks free o f charge and alse
carry & bulance i n the Federal Reserve Bank?
the National. hank system?
A n d tay i n
M a n y o f these banks i n ovr ecun~
try make their «xrenees a n d their @alaries a n d dividends
on exchange sesounts. i
think t h e effect will h e that a
dot o f them will heave t o leave t h e Hationsl B a n k ayatem
where
they o a n d o g o without injuring their o w n business.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
\
some o f our replies o n that question have
that a s l o n e a s t h e time, d i s t a n e e ,
a n d express charges
are a n element o f deine business t h e y think they cucht t e
tke t h e aharge.
Mr. Jaffray:
M a n y o f the teens a r e three a n d four
2 Minneapolis a n d o n some o f the brancR Lines t h a y
three s G i l e « a week,
T h e y h e v e s x e x =x<keece
exchange o m Minneapolis a n d Duluth during t h e grain moving
senon, a n d f o r the belence o f the yvear i t l e ali t h e ether
WAY»
h a v e & very gruve doubt whether these banks, where
help theawelves, w i l i atehd free eaehange.
They cunnot help themselves.
My. Jaffray:
T h e y cannot exeept
b y getting o n t o f t h e
noe. get eredit a t par for all their cheakn.
*%
there a r e a dosen interior b a n k peints, l i k e Bismark a n d
Mickinsen thet would take t h e ceuntrr b a n k cheeks a t p a r a n d
give @redit o n reeeirt t e d e away with t h e question o f ex«
tiwir o w n part.
T h o n they i n turn gharzce ues
heavily o n every check that comes t o them.
That @harge they d q not have t e pay,
ur. Jaffray:
t h e y d o not huve t e pay.
everything f r e e a n d G h a r s e
T h e y set
i n r e t u r n f o r a l i sheeks.
ir. MeGerd:
M a y I sek & questien « < <
Ur. Jaffray:
T i e r e # 8 5 a meeting o f about t o o weeks
in St. Paul --<to show you how interested they are i n it «<<
and a t that meeting there were 8 0 0 state bankers, a n d
they
speant 4 1 1 d a y discussing t h e question o f Joining t h e
Pederal peserve System.
T h e question o f exghange i n
the little towns Game Up, a n d t h e y are evidently
interested
in it. I
think the State Rankine Departement e f eur Ttate
is rather inelined t e help these banks t e
pretest Lhegae
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
selves i n cage this par question goes inte effect.
Nix. MeGord: I
#131 state thet i n m y district, t h e
State o f Georgia having 680 state banks and 114 nations
banks, h a y e o r g @ n i c e d «
etate c l e a r i n g h o u s e a g s e s t a t i o n .
They have elected officers a n d are ready t e g o t o werk when
the Wational Syatem has put that business i n force.
vy, Seay:
H a y e they formulated ony plan for bawic«
of eharge?
YotCord:
Remy
T h e Georcia State Clearins Kouse?
Y e e ,
They
Wr. MeCord:
M a n resiiae, o r at least they think the
re@ult o f the national system wili b s that
the eheeks w$1},
Clear a t apr, and they are going Qleng S e u lines t o meat that
situation.
i n other words, they intend t o clear a t par,
the overhead charges t o b e sade egninet t h e banks doposit ime
the cheske and net sgainet the banke o n whom the Shecks
ares drawn.
T h e r e a r e 425 member banks i n that assceiation
new,
Br, Mergen:
T h i e s i e 4 matter vupen whieh T
a m nat «
docter, because I never h a d t e r u n a treneit Secount;
but i t
seoms t o me thaten baeie principles the statements o f
nations) basike have got t o be accurate.
T h e nations bavk
makes ite statenent o f ite reserve from its own books,
L f
one the seme day i t makes s statement ite whole reserve pst 4
magbeen wiped out b y unexpeeted cheeks «whieh 1 6 does not
mow
about, them that statement i e met aceurate.
ae atht t h e fundamental
I t seene t o
d i f f i e v l t hyt the
:w whole thing i a
i
baving
that you cannot have a eharge without/a correspondg
n
i
https://fraser.stlouisfed.org
entry
Federal Reserve Bank of St. Louis
o n the beoke o f the bank; you cannot keen the svetem
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
soins.
Y o u have « = fleating seceunt which will inerease
more a n d more a n d y o u sicht have t h e whole sesets o f the
Federal R e s e r v e & ; stem r i e a t i n g w i t h e u t a n y e n t r y c o r r e s e
pendingiy made. I
4@o met think i t i s « safe a n d prorer
way t o d o thie kind o f business, S u t o f conres I
do not
knot,
The Chairmen:
Wr. Strang:
I
. think y o u a r e right, sir.
T h e question f r o s the standpoint o f the
reserve bank s e e m t o m e t e b e this;
barks n o w i n t h e s y s t e m h a v e a
resources, a
T h a t t h e member
tetal o f $12,000,600
of
fraction o f shich censists o f investmenta i n
pngollected chevke.
I
f thie eystem transferred a
portion
ef that investment t e the Paderal reserve banke i t weuld
take A l l o f the resources
The Cheirman:
T h e present condition i a thie;
the reserve agents e f country banke always s h o w more
thelr credit t h a m t h e banks o f the cerresponidert,
do
not?
ZtBelieve that i g true.
The Chairman:
W o u l d net the mae reverse b e the eage i f
we shoud) charge these ghecks u p t o them before they k n e w anything about a k them < - that t h e reserve balances o f these
sountry b a n k s
i n t h e f e d e r a l r e s e r v e b a n k s w o u l d « x aleays
be less than the amount that the member banks* bocke shew?
Yr. Vold: i
doe n o t q u i t e u n d e r s t a n d t h e question.
I do not quite agree with you that the country banker's
books Glways show less than the reserve banke?
The Thadowans
Y o u .
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
z
P
ant
‘e
t oae
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
*
255 ¢
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
gis
%ie
bs
i
a a
s
s“
£
he g h e g k w a s n e t
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
S EAS
es
e 0 1 2
e e +
R a f t Se
r
o
e he
Enrourhout
Be i
% w o teeet
Liened Pa ee d»
3
:
O Y< i e ea we i8 t h et hte op
i Sy
r 4Peservys
@iger t h e 4d:
fhe b a l a n c e
Reserve A c t contemplates t h e t
™~
Glapeed e r i
FEeerve catike, unless the reserve
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
*
De ps
e R+
ee
‘ve
“
#%
ztiB
e
mem
v he
on
knab
e Bs
f 3
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
ei
i a
e
¢
2
Nak ci)
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
; o nbs
5Saal Gah
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
”
t BTiS
a Be
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
&
SKFi
shtbe
*F
s a “*
z t ¥E
P
o
t Sekt
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
o
&x
” >
ee
“id dbg-&%
%
t svere
A
or
Ps§
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
siv¥eGn ¥
afSit ae’
mo
ni
e
i
x.
P Sehey
can
% foes
oe
Pka l l e l . $
e
e
£et
8 0 2 1>3
R T T
,
=)
Fave
another
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
ecomriderabie oariticties, m e r e a f
‘ saga
e
e
e
e
‘ante e r e L a r e é l y b a n k a
e
e f
inter ier v e i n t Be m e i x 4
°
c haa bees G A N G .
knee W e e
Lebanon,
5g w i t h
sye W a g a
state b a n k e r
game along 2 s
#3
i said, “Until
pplication t e J o i n thie feceral reserve
oun g l a t e P a n k e |
sok m e u y a n e
w e whether
not a n d whether «yy inetitetion
aware e f the fact that i
had
+4fol Ww, ae h a n been decometrated hore
i believe t h e t your: car¢licsiona a n d y o u r r e a s o n s
amd i earit bo become & @ Recker. *
The ‘Chairmant
o r GOUT SS
an infotaal c o n f e
t
o 6 xGhanme
views. T h a t i c about ald c e could expect t e de,
wycouncil i
U n be~
would say thist
rt. o f their
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
r e eg
<a ¥ d
v
iz
e
e
Revey
ae
at Fs
e— ‘
£ iY n e ao rs
om e b
e e r GAS
t a e d n r e n wkeie
Lan i
&
a
e7
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
after
t h e foevrernc F 9 r e a c h
HRS
question e f pattiexsent b e t w e e n ? eceral H e s e r v e
Heever,
whe. fheirmarm
Aftec y o u have s e t t ea t h a t
oe s t e p a n c
heave t o t a k e
RS,
~
Cast
t h
G F FOR
woeic x
back
the
f mde
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
ih
ed
4 4
* Rey
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
®
“pet3
3 ry
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
2 4 a e 44
eGz
er
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
That has indused the membera o:t t o exercise that
feature, but t o ereate their exchengea i a Jew York, and va Lue
ageinet Rew York, and that hae brought about the payment
by ne t o Hew York ef $250,000 t o $300,000 & dey, & great
geal o f which would, b y the natural flow o f trancections
if the system was free end open, come back t o us throngh
vhicage, throngh St. Louis, through Zeneas City, e n d sone
through Cleveland b y reason o f the iron inéastry end steel
industry of that partieular district. T h e r e f o r e these
fTigurer ars not i n the m e i n correct, f o r t h e sivple reason
Whiekh I heve just etates, nearly everything i s peid i n few
York exchenge, & large pert of which sould be paid i n western
exchenge, a n d would find ite way beck throngh the other
channels.
S u t , inmosmech as i t hae act Been vut inte prae-
tide, a great desl of it takes the old chennel through Bew
York. When the system gets inte full workin: order we will
be able t o offset eredit balances to ourselves thet we carry
in the other reserve cities.
éelphia.
Y e owe few York ond Phila-
T h e otherg owe is, with the possible exeeption o f
jnat the ehenge o f St. Louis t o a $14,900 evedit balance :
in the isst dey o r tyre.
she Chairman: W h a t is your conclusion, Mr. MeCera? . :
Kes HeCerd:
H y soncinsion is thet Fash ington is about
the bect point o f settlenent, from the voint o f view that
these things will largely offset themselves, and there will v e
very little money t o be exchamged o r remitted. |
Furthermore, if we mike Yaghington the eottl eent oity,
weoan get the support of the Treasury Department, me ana NY
possible get the advantage of their aub-treseuries. ‘there |
| i g @ feeling comewhat i n t h e sub-treseuries that the Federst
Reserveienks
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
are vans
t o eo encroach = e . them that they
E S
will not be sustained, end probably some of them will be
‘discontinued: whereas, i f we cleer through Tashington, a n d
get the benefit e f the enb-treacury cities a c they now exist,
that feeling will subside, ani, in fact, go away, end we
will work i n hermony with the present syetem o f the Treasury
Department .
Parthermore, a t gertein seasons o f the year w e heve
qnite a lot o f national bank notes for redexption, andi if
Yaeshington i e the gettlement sity, these redemptions are
beet mode i n Fashingten, ani the repleniching o f the reserve
would b e better sede here.
T h a t fie my view o f it. T h a t
is the way I fe@l about if, and I think Yashington i s the
proper plese.
The Chairman:
i g there eny farther disaugsion a s to
peragraph 1 ? U r . NeCord, i s it your desire that these para-
graphs be sumbitted t o e vote, or discussed enl the whole
report voted woon at the comeluston o f the diseussion?
Fach
peragreph being the enbject o f « separate vote m y vrolong
the dissussion o o asiderably.
re MeCord: I
think we ean hendle thet a s a whole, /r.
Chairmen, <nd when we get through we will know about where
they @1] stand.
The Chairman:
i f there i s s o further diecursion o f the
Firet peragreph, w e will preesed t e He. 2,
M e y I say one
word on that eubjeott T h i e plen ie te sone extent dependent
ppen @veceesfal negotiations with t h e Treasury Departaent
in regard t o two matters.
G n e is the ure of the substreseuries
for trensfern, ané part}y, but uot entirely, upon the
Willingness of the Secretery eof the Treasury te esteblish s os
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
fend --~ poseibly not a complete fand, but gertainly the |
begiuning of a fund --- for vot tLenext purposes, by a de~
, pesit with the twelve henaeak Reeerve Ganks o f come port iai
ofthe goneral funds of the Government.
I n the discussion |
at the committee meating i n Sew York i t wes thought unwice
thet reference should be made i n this report to a possible
Seposit b y the Secretary o f the Treasury, which might b e open
te misconstruetion;
m t i t wmld b e « grest deel better t e
conpider this trensection and thie report a s quite independ-
ent o f any deposit b y the Seeretary of the Sreseury, ana then
this same committee, o r sane other ecoumittee o f the Governors,
might meet with the secsetery of the Treasury «nd take u p
the question of Government deposits a s a n independent metter,
end suggest t o him thet i f he iz Geposed t e make such deposits, :
thie i a en opportune time t o do s o i n connection with
thie fund, which would simply eveid the expense o f
shipping meney b y tarning i t over i n Uaehington for the
use .of mich fund.
Are there any comments inmgerd t o the second para~
graph?
lr. EoCord:
O n l y one, Mrs Chairman. S u p p o s e w e pat
in the gold ourselves? ‘ o u l d we be prohibited from using
that i n tines of etrens, that volume o f golé, s e ageinet the
iseue of notes, carrying it inte that generel gold fund?
TheCheirsen: ir. MeGerd, this specifieslly provides
that i t shall cound as a pert o f the reserver o f the bank,
and the use you would make o f it would b e i n a bookkeeping
sense &6 & portion o f your reserves, and ite physical loca
tion would not affect your ebility t e use ti i n the sense |
| that
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
I understend y o u mean,
K d
Mre MaCerd:
T h e t i s the only point.
The. Chadrmen:
eecond paragraph?
i e there any further discuszion o f the
I f aot, w e will teke u p Bo. &.
Shere are n o egmomente a s to fo. 3.
to reed Se. 4.
Wy. Wold:
$ I will eliow time
T t i s a pretty Long one.
I t ie a matter o f bookkeeper, largely.
Mr. MeCerd: ‘ e e t i o n Ho. 4 ie go clear thet I do not
think it is necessary te diseuss it.
I t ie perfestiy plain
and clear.
The Chedamen : I f there are n o eommoente i n regard t o
| paragraph ¢ , w e will proesesd t e paragraph § .
ie. O. VYelig. M i r e Chairman, linked wit: the sonsiéeration o f Jo. 5 must necessarily be, perhaps, & clear under
standing o f what i s euggested i n So. 10; i n other vorde, i f
we do uot injeet any exchenge eharge a e & meane o f caring
for the time element, then the purchase o f sxcheange i n
actual operstion would porhepa b e difficult.
I n our dig-
mum trict et certain seasens of the year it would be &i2Tisult.
The Cheirnen. CGoverner Yelle, i s it not a fact that
foragreaphs §, 6 and 10, read together, would afford ample
facility for dealing with any lees] exehange situation such
es might arise between Dalles ani Jew York, e n d Delies and
Deyou mean without any eleberation of ~\
the lengusge o f Peragraphe &, 6 amd 107
The Chairmen: Paragraph .6 was introduced with the idee, ;
aa I yreeell the discussion {cerreot we if I am act right,
Ut. Mekey), thet epecisl situations might develop between —
Pederel Reserve Banke which wovld require trestment outside!
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
late v y o r y
necesel
seat& 2
eonver 123e@ o F beth > a n k s f h i m k
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
i t would b e w eoNileothler % tBe h e
ould
:eidEa
there without baving to interfere with the fond through
Veshington, Gither t y ehicning inte the o u d o r by drawing
6
a
The Chairman: I
e:
:
euloreteed that might arise between
New Yerk ani Chicsgo alge.
iy. Mekay:
I ¢ might ariso there, m t i t ie heved that
under t:is plen there will b e ne eoset for shipping curreney
from the sub-treaeuries t o the Treasury Cepartmeent, a n d that
the enall cost o f ehicping from Delise and the other five
eities thet beve cot got s eub-treasury will b e turned into
the c i n e expenses, and the whole thing will uot amount toe
vory much.
ime OO. Yelle:
M r . Cheiresn, o f course, t o appreciate m y
desire t o get sane o f these detaile etraight i n m y opm mind,
you must remember thet I am f r o m aseetion o f the sountry
where the shipment o f curreney i s nearly alwaye one way o r
the othe.
i f this ples wae i n operation new, far example,
there would b e s o way by which w e sould protect ourselves
ageinst either a censiderable expense i n the shipment o f
ourrency for redemption, o r en attack thon our supply o f gold.
Using i t ao it ben been i n @ limited way, w e owe now perhepe |
$1,750,000 efter having shivped a million dollers ef eurrency.
T h a t will s o n t i n u e e
t get larger unlese w e oan bev @
eoue privilege o f desliag i n exchange o n some premiua beeie,
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
bywhieh we gam @<11 exehenge at a premium, or buy exchange >
at @ premium, m d i t will t e impossible for uz t o keep
covered e t thie seacon o f the yoer.
She Chairman:
T a r t i s ell provided f o r i n here.
at
Ur. Mekay: T h i s plen prevides tam thet you ean bay or).
sell exchange, which means at the market prise of ezchange. —
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
iaree
ic moving i n the opperite
large
2@ are agounulating
not eare t o
eS w e e P k n
n e d
may G r a i l $ s
b ei
rediis
Ee2 W e n m i s t i s n ©
e
ean,
u
Bie
eend t o
i
r
s gryThey e e e
w OS L o s
to
o sover.
Y
The Chairmen:
oe
Foid:
eeas
BeCord:
Lbuolutely.
4iti om arising.
to ship i n volumes o f curren
new order o f things
i
W
E
e volumess o f currency,
o
a fh i n
a
« 3ti l ns o r ee t hie i r @ o w nS
e ereps.
t
i
l act
t c e e agt,
but
GB
inte the interior, e n d back into theme
iran:
MeCord:
A a n & é 1 ¢ will b e Federal R e e c r v e n c tes.
A n d it will be Federal keserve notes, sand
question t h e t would «one u p world b e the r e i e m p t n
o
i
Pedgerel Reserve notes, a n d that i s provided
i underttand,
a thousand;
w i t h expresr c o n n i e s
r
a
t
e of
et
a m i i n t e * “ e t o n , a n d o f coureas i n t e f e w
Orleans, you osn get your ineuranee polisies e t probably ea
:6
s
e
rate. P u r teh e r m e r e , there
will s o tl tbe th«t
Baa
shiocping i n maumm currenoy a a thore bee been i n the poet.
will b e your own Federsl Reserve sotes that will g e out and
flew tack into your own vauite, without going beyond your own
only reason w h y thet i s s c t poacible a t
encrmons amount o f Aldrieh-Vrell e n d
‘® have f @ t e k e aeare o f a n d z a t
Peteral Reverve
» Giessount beeis.
& to protect
unieretend w e have a n y
Rererve n o t e c t e protect t h e
ee are going t e show you.
Yerhare I am enticipating, i n dlicring
gone into m r mind s t théte point.
S u t mragraph
shetks d r a w n o n Federsi R e s e r v e b e a k s s h o u l d
of t h e
the bacig t a m e time taken t o roach the dexstination, which means that checks @rawm o n the Federal Zeserve
Sank o f Dellee would b e accepted b y you and credited t e your
sember benk after three deye time.
she Chadrme.m:
Ey. O e Bella:
Y e s , sir.
4 % seasons o f the year when New °
icKt & diecount, because of the voluxe, the drat
us Will b e i n differm? volume from whet they ore when Hew
YorE \exehange i e naturally s t a preniom I
gannet maintain
(i
/®@ veey high preaium rete on esstern exchange out of which
#
to “ever the oost o f shipping eurrensy, i f the member bank
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
get your
2
d144
i4 i
8
+ *% o F
Aiea
bP ne
O F any K i n gof @xene
exchange,
y o u o a n buy i t
in immedi
Fe
sroewedure T h i c h w
York i
&
recit
omeble
m e today
o n tke b a s
t e accent «
e f t a e time taken t e
reach ite n a t i o n from one vember, e n d bay from another
member o n
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
hinge.
orettycss well talked out,
ee
a
e
meetings
G e
de o n aii.
& faa)
among reserve
liy fixed rate a
or
to k m o w w h e t h e r
eredit o n a block o f exchenge which h e
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
You deal a t the market rate i n Texzac?
with other kinds o f ex-.
x
\
oo
o F
i e
le
i t
e i t
i
h
Pt i g W w &
i
y
?
, yeu; w e d o with other, even t o the
eka ys
rket f a r i n
“@iis: K a n e e s City, St. Lowis, Caleago, a n g
one W e a r e u s u e i l y b u y i n g
7a gometiues m a k e t h e othore
rrses ; s o v e r n o r Yells, thet i s
arises
bavike o n t h e F e d e r a l H e s e r
on t h e F e d e r a l
ane Cheireoesn:
y o u w a n t t e proteat y o u r p e s i t i o n o f
in exeheange --— a 6 & metter o f fact, t o
this reference, t h a t i f Perasraph
if. 1 0 prevalis, the member banks will seen find ext a t what
a
expense t h e y c a n eroate exahtng:
b y drawing ageainet balances
which they g a y have created w i t h m e i n other ways, b y the
adiseount o f paper, a n d thet will f i x the rate o f premium
whieh I
a m able toe buy exchenge.
she Cheirmean: Y a s . :
Kye G e Bele:
f h e difficulty i e tiat while they are
creating exchange i n that way, there i s ao exchange offered
at that orice. I
will have t o p a y @ higher price, a n d t o
pay this bigher price would mean ecimply the prefit thet would
nateraliy fall t o the meuber bank,
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
I z i pay him @ higher
erice then h e G a m make e x c h a n g e e
h
, gete eredit f o r the pro]
seeds o f the transaction b y which I
buy exebenge,
m a against
that e a n draw a draft a n d p u t i t beck i n S e w York.
the Chairman:
i n other words, the situation i s uo
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
ani b y doing that w e howe oreotically
nearly all over
Sew York
the p a c t , largely; I mean
the discount
eBS
o f it, tecauee
t t h e eettlenent w e
uPpeel Tes
"
h
i
¥ tOf.
h
say would b e
- s e e s
P
y =
*
were f l e W i n g b a c k s
wards t r
o
m
e exchenge
our way, the @ i f f i e u l t y being s t st @ seneon o f the year
when i t is &11 being said i n Eew York, i t requires the
y wich
w e ehb
ouy
n eculte,
a on i i t h a g mb e e n d r a w n
back f r o m the interler t e b e ghinped t e N e w York t o ereate
those
fhe
E C h a i r s:
n G o v eSr n o r telle, thet
E situstioa will
Siveye exict between t h e different sestiese o f thie eountry
ike S
Car
we grow cotton i n fTexse end #e1] i t i n Zerope, o n d
you tuy goods
wH, .
S a t e
a
y
:
o i z
My. 0 ° elie:
4 n Q just t h e t long suet w e either heave -
some besis o f preminm and digcount, derending u p o n t h e volume
£ the ebb a d flow, o r else w e abgorh the cont ourselves
in orenting those balancer f o r e n d against .
iitts BoCord:
E x c e p t i n the os
now find ourselves, w h
t
i
h
n whieh w e
e history
of the vorld before, where people are sot merketing their
erops, snd. yet are salling fer money, i s i t sot also true
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
are ereated acainct y o u i n 4 e w York, t h e
a.
mi moving t o ithe centers,
erof the BAL? chen the foreign
exchange feature goes in, you will te in a better position,
heving the credit i n Jew York te buy these billie ae a n sdvoutese more than wort anyone elne i n your distriet, because
you have your eredite i n Sew York, o n d you b e y the bilis,
which settler with your man a t home.
the Chairmen: G e r e r n o r Yells, this may seem t e be a
very extreme statenent o f whit m a y a m happen, t u t I believe
it ig well within the possibilities that the i y will come
when the Feéeral Seserve Genk o f Dallas will make all the
few York exchange i t requires
b y shipping cotton bills r a y
able i n Liverpesl end tondm end Bremen and other pointe,
| @irestiy t e the Federal Reeerve Bank e t S e w York.
bitte Oe Welle: I
the Cheirean:
grent you thet.
T h a t mpy not seem & vragticable thing t o
do, but I apprehend that theday will come when the settlement
of the Hew York exchanges thet are now appsrentiy 5 mensae to
: your reserves will b e effected b y your being i n the market
there t e buy sixty and ninety day cotton bills, which you
“will remit t o use under an arrangement b y which w e will for-
| ward them te London, where they will be digcounted.
“yg. 0. Welle:
Gr. MeCord@:
Y e will hela them until maturity.
A n d you will get six por cent interest o u t
| of them.
!
E
s O - Wells: I
grant you thet; tat, i n the meantime,
I a m very much concerned about extabliching i n apermanent
way 6 plan b y which we heve practiosily eradicated « tinehonored eustom o f premiun and discount upon enstern exchange,
ond b y which mether those whe utilize i t pay the treensor-
| tetion charges. T h s t ie whet we do cow,
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
4 4 gertain seasons
when
S
Ga
em
Re
ea
on
nc
e
w e
«o a fd B —2 i—m _ S E R S _O RtE Sr ap w w ye
a s =
S e
6
S
be —
P
m n i e
e a oy ate ee Veet a
G u U r r e n e y
%. a'en i
p eegee BF a go
s
wes N P E smi tim
Gur m e m o e r
weeks e x p o r i n e n t
of
to either give m e “ e w York exchenge a t
their o w n aoet, w h i l e heretefere t h e y
easelves against t h e t
on oxghange coavering t h e cost o f treneport
three Gaye -<~ b y the way, #hat i s
the v e r cent o n « thousand dellare?
ERs
‘
EPs U e Ee@ihi
t i e about e i x eente a dsy.
R
a
t ;
oe
i
h
e premium a t which t e
may dasl i n Hew York exehange i n o u r district.
- n e m i t cones
the other w a y w e will heve n o wey o f fixing t h e diecount,
ecause thie i e a fixed glean summer end winter, M 1 )
“pring.
I sey sonething?
I @ e not want t o apply arbitrary rules,
but we sre epending tec mudh time o n this Paragraph. C a n n e t
we get &
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
motiont
o saat o n it? c o v e r n o r Felle h a g t h e flisoer,
Geverner.yelle, will you offer e motions
on this matter,
se
ME «
the Chaireant I
Rr. Mehay: I
may meke a
suggest:
would l i k e t o point c u i ,
if I
way, t h a t
exchange i g not disregarded a f a commodity, a n d ales that
the tranenetions y o u have h a d sith H e w York, where y o u a r e
Owing Y e w York, w e r e c a u s e d p r o b a b l y b y y o u r m e a b e r b a n k s
Sending, their check o n Dallas t e the N e w York correspendent
for immediate credit a t par.
Mr. O . Wallet
‘Br. HeFay:
I s that s o ?
M u c h that way.
I f the W e w York Federal Rees
& deduction o f three days before i t g e e i n t e the reserve
account, the time allewanee, t h e New York correspondent
| Danks will make a
three days interest deduction, e n d that
will step the practice cof the barks i n your district sending
their checks o n t o the K e w Yerk correspondent, T h e r e f o r e ,
you will n c t h a v e t o g e t a l l t h i e New. York e x c h e n g e
to
settiec that.
Mr. ©. Wells: - It will n o t s t o p it, Er. MoKay,
i f they
need that money i n Yew York, beeaues that will b e t h e sheapeet w a y b y which they c a n make t h e exchange. T h e a t i s cheaper |
then shipping money,
Mr. HoXay: Y o u . c a m make exchange cheaper t h a n .16
cents per thougeang b y shipping currency a t the rate o f 10
conte per thousemd, a
little mere than 2 6 cents per theusend,
t@ t h e s e e r e s t s u b - t r e s e u r y .
Mr. 0. Welle: T h e t i e upen the eesuwaption that w e heave
always good round shipping bilia. F r e q u e n t l y w e have small
bilis, a n d the cest o f the redemptions, t h e sending t e
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
sceount
Y u n fer @
img S u r accounts
ferent f r o m t h e s e
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
the l e d g e r « « - t h a t i s ,
in ond which
k
e everything thet e a c h bank sends
i t receives, a n d adjust i t e m that basis. T h e r e
cam b e n o fuirer basis,
a g I can see,
That i s suggested i n here, but not determined
absolutely.
Mr. McCerd:
T h a t would p u t
t
one w a y o n & fair basiea with t h e o
h
e
n
e
t i s going
d the ether o n
a fair besie with it.
Chairman:
I m the interest o f progress, Ooverncr
MeCerd, would y o u b e willing t e perm
a
, matter t o rest
h
t consideration e f the report?
until w e c o n c l u d e d e
Mr. MeCord:
W e s t assuredly.
The Chairment A n d then, inasmuch a s Peragreph 6 leaves
the matter e p e n for d¢termination a s « supplement o n the
matter, h e v e a reaclution adepted such e s Governer Neterd
uggeste a g the completion o f Paragreph 6 . G h a l i w e proeeed
to Paragraph 9 ? A r e there any commentea?
Wr. M e C o r d s P a r a g r a p h G
might i n t e r f e r e w i t h s e m e
arrangement t h a i b a r k e o u t e i d e e f t h e r e s e r v e c i t i e s p o s s i b l y
uny have with the Treasury Department, i f thie i s te be subemitted t o t h e F e d e r a l R e s e r v e B o e r d . I
d e not k n e w t h e t I
am
lal
te b e guceessfuli, b u t i
a m going t e meke m y best
Ca i m t h a l dirvyeeciticn, a s w e a r e n o t i n a
aSking t h e Departacnt
subetreasgury
t ¢ allow u e t e ship *Celi et*
st t h i s
mat g e t t i @ g s m e n t
@:
you back redenpe
“5 %
a
y
y
e
a
. sre c e T o o t o f
10% t r e n e f r e r
Mr. O . Welist I
Mr. Wetord:
did n o t s m e w that.
That ie |
if possible.
bank
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
notes
redeemed,
b u l
t h i n g thet I want to: get out
F o r instance, i
ehe
v
e gend
can get national
u p unfit
Jawfal
money,
not g i v e
The Chairman:
dealt with b y p
e n e r MeCord ’
thet situgtion c a n
t i n g t h e credit i n this fund «-«
Mr. Meterd: T h a t i e t h e p i n t I
a m after;
actly why I wanted Yaghington a s the settling
May I
s u g g s a t,n,eho
tn
that i e &
Mr. HeCord: Yea.
Tne Chnirmant
A n d w e will p u t i t o m that part e f the
program.
Wr. MeCord:
L e t this passa, then.
The Chairman:
A r e there e n y coursents
take Paragraph 11.
W a y 1 suggest t h a t Peragpraph
al be referred back t ¢ the same comaittee thet dealt with
thie matter f e r t h e deteraination c f a basie o f charge i n
cause i t i s thousht f i t t © consider making charges a n d telegraphic transfers, t h e i r repert t e b e ultimately submitted
te the Pederal Neserve Beard for approval, a s
necessary anyway.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Mr. Fancher:
I n other swords, thet would b e a detail
te b e thraehed o u t i f the general p l a n i s eppreved?
The Chairman: Y e s , i m the comaittee.
Mr. McCord:
M r . Chairman,
o n that poin},i hare
+@ dea). w i t h that a s a national banker f o r abeut ninetecn
years, a n d since the organization o f this bank I heave had
ene o r two ask me for tranefers, a n d the basis 1 gut t o them
On was --- a n d i t preyed very satisfactory, a n d i t kept d o w
a geed deal o f telegraphic tramafers «-- there i s n o reason
for i t except a fellew whe i s rumming close t o the shore,
and h e rune thet w a y all t h e time, u m d m y rule i m the
natiensl b a n k w a s t c charge t h e time necegseary f o r meting &
remittance, a n d for t h e exprense charges woe m o t regi ctereé
weil charges, b u t exprese charges.
F o r instance, I
charge
him 7 5 eente « a thousand f e r transfers b y telegraph, p l u s
the accumulated interest, a n d when y o u d e thet, y o u will
eliminate a gocd deal of these transfers. (Daughter.)
And they ecught t e b e eliminated.
tir. O, Wellst D u r i n g the last seventeen years h e had
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
ne
Tew,
r s
Rr. MotCord:
Kaine:
hetwecn R o g i e n
in foree i n
city i n whic!
t
f
i
n business w a s 5 0 cents a
thousand.
Chairmen: Gentlemen, w e heve a basie f o r sensidering
telagraphic trensfers that never exiatec
mintiar « . « o r a b least
ehele s u b j e c t
unifemm a c h e d v i e
w e #iii
i s eoncluded.
f o r t h e cesat e f s h i c p i n g c u r r e n c y b e t w a r
the resperyé banks, e n d w e will have a
bank rete o n w h i c h
trenge-
fers; a n c i f t h e committee considers thie matter,
i t seems
te m e most natural that t h e y should take inte secount,
in
fixing charges for telegraphic traneafers, these two elements
that will b e unvarying exeept a s w e change o u r bumk rate, a n d
te i s chenmged, i t i s smple justification f o r
@ change
i n the charge f o r telexraphic transfer.
That is
ths basis u p e n which t h e German bank effects a l l o f its
transfers.
Wold:
t e y o u m e a n t h e digsecunt :
Chairman:
M
r
, Chairman?
Yes.
discount?
Chair man?
Wr. GO, Welle:
T h e mail transfer i s supposed t o b e banged
the shipping rate.
The Chairman: T h a t may heye t e be modified; b u t whate
iz4
But w a eculd net u s e t h e shipping rate,
becauce t h e mail tremsfer i s based upen t h e same rate,
Sr. Befey:
T h e email t r e m e f e r e o u l e b e w a d e a t t h e
the telegraphic transfer could b e made a t
a certuin s u m plus the marret rate «<< that is, representing
the interest f e r t h e tims, t h e twe days, o r t h e three days,
ot @ 8 many days e ¢ i t might be, aecording t o the distence
ef the tranefer.
The Cheirmen:
Paregrayh 1217 I
I s there e m y further comment i n regard
a m mot pushing thie sleng t e c fast,
am
gemtlenen?
Paragraphs 1 2 a n d 1 3 ere just explanatory.
O n e word
sheut Paragraph 12. T h e r e i s considerable discussion aps t e
whether t h e settlement sheuld b e weekly, detly, e v e r y t w o
weeks, o r once a month,
T h e r e a r e pros a n d cons, W h a t e v e r
aotion i s taken i n respect O f this report, when w e come t o
adopt the plan, i t seema t c me thet w e een agrees now that
the time o f effecting sett) enents through t h e fund will b e
experimental a t the outset, e n d subject t e change, possibly
by the diregtion o f a committee which w e may want t e cone
timue t o keep i n teuch with thie whole matter f o r a peried
after w e start cperation, i f w e de. Gowerner McDougal,
the matter has now reached the point where i t i s proper for
you t o make a motion.
Wr. Kaine: Mr. Chairman, might I revert for just @
moment
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
t e Paragraph 5, i n which i t i g said, i n the last
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
izs
few words, “ G o l d m a y b e deposited
t h e Sub-Treagsury f o r
the credit e f t h e settling fund e f a n y Pederal Reserve bank."
In S a n Franciece i t i s g e s l t e g e t h e r w i t h us. T h e l a w
@nys t h a t g o l d m a y b e t a r e n w i t h i n a
certain l i m i t o f t o l e r e
ancd, but i f I ge with @ million dellars t e the Sub-Treasgurer
and h e weighs i t and i t if @ l i r i g h t L
the l i m i t o f t e l e r a n c e « - « a n d I
is away w p over
ack h i m for a
ceartificate
ef transfer f o r that, h e will m o t give i t t o me.
say, " I have net the stuff. I
Separately, I
H e will
would have t o weigh every coin
knew y o u heve g e l d enough there within t h e
Limit o f tolerance, b u t there may b e some going that are 6 6
much abraded that t h e y a r e much belew t h e limit o f tolerance,"
That i e made u p b y the amount e f n e w eccin there is, T h a t i s
ewe y o u four o r five million
@ great difficulty with me. I
dellare n o w which I would b e very p l a d t e p a y off i f I could
gat f r o m t h e S u b - T r e a s u r e r a
transfer f o r t h a t g o l d w i t h i n
the limit o f telerancs.
fhe Chairmant M a y I suggest w e put that o m our program
to take u p with the Secretary o f the Treasury?
would b e very gGiad t o heave that done,
Mr. Kaine: I
The Chairman:
T r o e s e mattera should b e straightened o u t
¢ interest o f this ayatem.
I t i s not right thet your
bank showld not b e permitted t o desl with the Sub-Treasurer
there i n hendling cold, which the law requires a SubTreasurer + o deal w i t h i n a certain way.
Mr. MeMmy:
I t might b e well t e put i n “er golc cer-
tificates® there,
Mr. GO. Wellies:
pix. MeFay:
I t is understocd, i s it not?
I t ie understood, but i t might be better te
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
26
in t h e r e .
Chairman:
T e y o u offer t h a t a s a
ekay: i
de.
Chairmen:
T h e metien
resolution
to
i s m a d e mend s e c e r d e d t h a t
ef the fourth line,
e f the
Mr. MeCord: . _pid you notice a recent ruling
could be counted
Treasury Department that silver certificates
as on offset against your reserve notes?
W e are geing t ¢ talk about that iater.
Chairment
MeCord:
W h y not just gay “"Leeful money"?
Chairman: I
Yencher:
do net think that would d e fer this
W e provide a sold fund, t e start
:
Slight emendment. I
m
i
ai m regard
h
C
T nh e amotion
ir s made
ee
%
will a s k these w h e favor i t t o
(The motion was carried.)
fre Chairman:
I s there a n y further discussion
report a s a whole?
Wr. WeDougal:
W r . Chairmen, y o u heave heard t h e report
as i t tas been read a n d ceomaidered, i
wili n e w maxe a
motion t h a t t h e s a m e b e a d e p t e d a s anended.
The Chairmen!
wr, MeGord; I
The Chairmen:
Y o u have heard the motion, gentlenen.
second t h e metion.
T h e mction i s made a n d secénded.
I 8
n
o
there a n y further c i s e u s s i ?
(The motion being put, wae carried.)
Tne Chairmen:
M a y I alse offer a suggestion, that some+
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
L27
ne
Mey
$
e i ht
tWee
*
Shei
i& ® BeLi
b
on
the Federal
f
#3#2
eo; 2
S
r i d
e
fer convey?
c p t e d
reault
Bae Be
ecdliberations, a n d t h e
gree be discussion o f what should b e
ebligaticne
e a
f e o c r a t a r y of
Qrrarigeng nt &
G
n
L
a
P
p
few minutes.
x=
e
n
gp ca ate *
e
a
t
.PRAtuT
m f
s
half p a s t f i v e f o r a
R e
c
er
e *
he
k
*
e
r u a
o re f m g t ,
yo
y e i¥w
the c h a i r w h i l e I T a s
,
BAO
thie r e p e r t
e
w i ih
Board, e n d what
¥ederal. 3 [Seeryc
nmeiid
precedure s n o
uic
e
deselt
Depertaent »
&
lize
can g o right s h e a d d u r i n g m y
happene w h e n I
Mr. MePoural: I
ee
get beek.
mere thet
Ceyerrar
Aiken
chair d u r i n g y o u r a b s e n c e .
(Tre motion having been s e c o n d L& a
the motion was carried,
wr, Weld:
t a h=the
t
wer
thie b e f o r e
eo i n t e
go inte conference with thom, s m a
eonferencs, t h e comaitt
miter
e h o hed
@vbject up,
their g e n c h a i r a a n t e b r i n g
i m en
ang i
charge o f the discussion.
the twelyvs Gevernere getting
r
heatn, l e t t h e con
u
t
e
a
r
a
Tse.
we
tice delegate o n e o f
+
se
r e b i s u wa
n
e
r i pn pres
e
r Sms¢ ing: this, f F
tnh e eGeverners
--
guestione that t h e Federal Reserves
ee
pound i m connection w i t+h =
heve &
eepy o f thins
befere they g e int
me they should
the ccnfereance, 8
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Sad ase a, e t
ot ge Z
Le
gubj«
ign s e e o n s e ead?
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
ee
The Secretary:
i
Wiliis
w a e j u s t i n c o m a u n i c a t i o n «with Mr.
e n the a p h o n e , a n d h e says the Board would like t e
hays t h i e C o n f e r e n c e coneicer,
i n i t e o r d e r o f topics,
i f it
is agrevable t o the Cenference, first, t e p i c Ne. 12, e n
"Comercial Paper"; next, t e p i c Bo. 13, o m “Revenue VWarYrante"; mext, t o p i c Yeo. 14, o n *Aceeptances"; next, t o p i c
Wo, 15, "Credit Information f o r Members", w h i c h w e have
already considered; next, topic Ne. 16, "Reports B y Member
Panke"; next, tt5 o p i c Bo. £4, " C l e a r i n g Mousse Helations.,*
the Governors t o heve « joint meeting with the Beard{
ir. Pancher:
b i d h e suggest e n y time?
The Seeretary:
W o e . T h e y s u g g e s t e d n o time, e x e e p t t h a t
they would b e pleased t o heave i t a t the conyenienes o f t h e
Governors.
Mr. Fancher:
I t will probably b e tomorrow some tims,
not tonight.
The Secretary: I
tenight.
gathered t h e y might like t e have i t
H e mnde n e Buggestion
Mr. Seay:
o n that.
L e t t h e m suggest t h e time.
Wr. MeCord:
M r . Chairman,
a s w e haye f r o m them t h e suger
gesticn o f several topics here, I think i t weuld b e well
forws t e see what w e could d e with t h e diseussion e f these
tepics before w e set a
Mr. Fancher:
definite hour.
W e could n o w set o m hour f o r temerrow,
and continue o u r discussion t h i a evening, r e a l l y accemplighing s o m e t h i n g d e f i n i t e b e f e r e w e geo before t h e m .
Mr. Seny: I
think w e might settle e l l these pointe.
wr. Fancher:
I f w e centinue through thie evening,
we
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
138
ef t h i s m e e t i n g
i s w t £32
t
h
e
f
c
r our
‘erence t o m e r r e y ,
Tre c h e a i r a e
o f t h e C o n f erence
t o t h e a d e p t i o n e f t h i a report,
ai supplemental
22, “General Sub-Treasury Relations."
T h a t folicws
maturally frem t h e terme o f this preposed arrangement f o r
aettlemnts,
w u l d like suggestions f r o m mexbers c f
e n d I
te t h e tepicse t e b e tar er
Reserve B o a r d o r t h e S e c r e t a r y
o f the Treasury
i n
py would b e taken u p with t h e
Ceeretary o f the Treasury.
Wr. Kaine:
M r . Chairman, i n regerd t e that, a r e w e
taking u p Topic
Tre Acting
f
T
e
p
i
c Ne. 22, yes.
Under present arrangements i t i s practiesbls
gold, o r full weight gold, i n the SubTreasury a n d gst certificates.
T h a s e certificates a r e i n
denominations ef $10,006, and may be used for exchange
ourposes. “ B u t $16,000 i s a very imconrenient s u m of money
for that purpose, i s yery emali, and I thinir i t ©
possible t e obtain a letter transfer for a gocd reund sua of
money, @ hundred or two hundred o r two hundred and fifty
e m & very
thousand dollars a t @ clip, end. i think i t w o u l d b
good i d e a i f w e c o u l d g e t t h a t b e f o r e t h e m a g o n e thing,
t e
see if they would grant that.
fhe Acting Chairsan:
D e I understand y o u t o m e a n that
they showld make transfers b y mall, e r give u s some f o r m o f
rrecei pt?
Wr. Zaine:
S o m e form e f reeeipt,
The Aeting Chairman: Men-nerotiable receipt?
Ur. Kaine: A
neler,
n o n e n e p s t i a b l e receipt,
o F wherever t h e transfer
Mr. YVold:
a n d adrise
i s reguired.
Y o u m e a n t o replenigh thie #014 fund?
ay, Kainst I
de net especialiy m e a n t o replenish t h e
gela fund f o r years.
F o r t h e last f e r years i t has been t h e
Custom of the Sub-Treasury people t e allew that t c be dene,
in San Franciseo.
I % does net seem t e be with any regul arity
that t h e y h a v e acgepied t h a t rule, b u t t h e y h a v e
d o n e ae, a n d
it. has made exchanges between Sum Franciace and New York at
a
very Suell premium, P r i c e r t e five o r s i x years
afro i t was
& Peguliar t h i n g f e r w h e t w e c a l i Terpular e x c h a n g e
««< that
ia, demand «=. t e g e t e t h e shipping peint, e n d telegraphic
two and « hekf cente shove that. B u t that hee net
been the
cane Ter seme years, eving t o the willineness o f the
Treasury
i exchange their certifientes f o r cur goid., I
was wondering |
‘hether w e could not improve thet b y getting a letter
transfer
for &
round a m o u n t o f money, b e c a u s e s h i p p i n g t h e s e
certifiqe
Cates coaté insurance, und i t would b e very difficult
t e get
them teplaced i f thay were lest,
Mr. 0 , Welle.
GCovermers, I
M r . Chairman, j u s t t o inform the
want t e S a y thet w e ship a
very great volume o f
| geld certifieates, a n d some gold e@in, t u the Sub-Treasurer
at St. Lewis, a n d obtain thoas geld certificates payable
S¢ our order for the purpose o f minimising the hasard againet
theft o r fire, a n d t o relieve the congested condition o f our
Yeults; e n d « ¢ are arranging now t o have the member banks make
the payment c f their next instalment. o f eapital, i f they
will,
te the Sub-Treasurer, for the same reason.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
134
The Acting Chairgmn:
D e I understand, Governor Fyains,
that whet y o u want i a t o have some f o r m o f instrument i n
Larger dencwinatiers*®
Mr. O. Welle: I
that for information.
unierstand that, b u t I was only
H e said i t w a s the
Francises, a n d h e did not know whether i t was dene i n
places.
Er. Kaine:
A n d t e avoid t h e risk e f iese cof
Little $16,000 certificates.
Mx. MeCord: Governor Kains, i n reference t o
ecin, y o u siated that some e f i f was light weight
wolume y o u weigh u p .
Keine: Y e s .
MeCord:
I s theré n o t a mint i n San Prencisce?
Kadnst T h e r e i s ,
MeGord:
i t seems t o m e e w i f t h e Treasury Tepartaent
cCught t o b e prevailed on, a g they teke t h o m weighed,
their businesa t o take care o f a Light coim.
i t is
I t i s a duty o f |
the Government t e t h e people.
Mr. Kaine: I
it, w e a I
agree w i t h that, b u t t h e y will n o t admit
think n o w i s t h e t i m e t o m a k e t h e m sdind t st, A g i @
regult o f thie n e w l a w w e are hoping t h a t cold vill g e out
of circulation,
a s i t sheuld g e out o f circulation,
Mr. M e C o r d s t
will.
Ur. Kaine: A n d w e do not want the last fellew who has
that ebreded coin t o get stuck with it.
Mr. McCord:
i. Maine:
I t i e not fair.
W o , i t i s not.
I t i s a thing thet i s preperly chargeable
te the Goverment, a n d I thought that w e woulé never have a
more influential delegation before the Treasury than this
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
heard o f Governors.
i. K e t o r d : i
weuld t r y t @ a i r a i g h t e n
o u t the e n c e b y
tang «lLie¢niieon t o the f a c t that the mint was there, and
e duty t o produce geec G i n i f you furniehed
@ Getm6t de @ thing with the Philadelphia
ee nave tried elendiiy.
ay. Kaine:
T e t 2 6 what + says
i f thie bedy will
uae ite influence sith ithe *eceral Board, w e may get semetiing through, and i t a111 b e a dietinet service t o the
Snorican people.
aP> Seid: {
weekd i k e
t e inquire upen whet basic
Governor Kaine thinks thet the devermment choule stand
this ieee iren abrasion end eventing and #liling?
i. Keine: i
worn ¢Gins i
im. GOL:
saiue;
a@ not mean Seenting. i
mean properly
6 net stan ony rulned coin.
H o w de yom keow i f i8 properly ebraded?
I t just shows.
VLG s T h e sweating preceme Wild nel. show.
Reine:
S a t g e n b e eesiisy doatected.
the Agiing Caairssn! L e t up tame up ond diapose of the
suggestion of Governor Aeing.« @
+ under@tand thet you ove
toat there be lacerporated i n thie a resesseniation that we
tuke up with
the -reasury Departeent
tho iseuence-— ‘
2
j
i. tailings
O f letter transferee.
The acting Chairsan; O f letter transfers. Those are
rousipiG, preciicaliy, i n letcer fers?
ie, R a i n e s
Reecivcte
i n letter
Ppt,
yee,
tiabie, anc which ceriaiaty will b e aseoptabhe i
offic
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
ees te when realited.
2On16
ihe
GO—
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
33S
“ugkeay? H e t negotisble betwoen Pedoral “sserve
Enine: i
tomes:
would jJuct os soon heyo thes negotiable. |
t f they sey “Pay any Federal Reserve bank",
be ifme a geld learing hours tertifieate.
Keine:
Thet wer oot ay idea. I
thought these Let-
tere would Just clean u p a trancfer.
Tre Acting Crmireent f i m p l y o n order of trensier.
Reinet Y e e .
ae, S e l a
Y o u want t o deposit a million Cellars there
and get a certificate of transfer to Few York?
a, “siest T e e .
“. Weld:
t e net inat reductbie t o the question o f
ming tramfere «ithout cherge betwcen ths Sub-Tree: uriest
ur. Kaduet t h e t ie jast vheat 11 resolves itecif inte.
You cen got these certificates end send them, and it costs
the samant o f the insurance, and pute the risk o m the bank
sending tied. I
bones 4
think they aight d e it for *eceral “eserve
Go sot meen the maaiic.
The Acting Ghsirsan:
T h e n your revgasendation is tart
e@ take up with the Seeretary of the ‘reasury the question
of arranging for transfers betwean Sub<Treasurers for the
eecount of Pedersl “eserve Danke vlihout charge?
am, Koinst T o s .
lp. GO. Belle:
S y . Cimiroen, could thal not b e aade «
portion of the cubfcet vhich would neturally come umior
Yaragraph No. 7, and «hieh is t o be relerred t e this c o u
sities for cupplemcstel aetdon?
foe Acting Chairesa: 1
eheuld think 3t sould. I
should
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
LS?
think thet wos one o f the isportant matters t o be taken up.
lie. Mesay: T h e idea wae in this plan that the Sub*poasurer would wakeo these transfsrs over.
t h a t i e just
the idca, a & I underpiand it.
‘“. Bgkay:
Timugh not expressed nore, that transfers
free between Sub-Trceasapors.
ip. Babaas
t i vould mebtiee relieve m y sind 1 2 I knew
thet ammid b e done.
The Agbing Chaleman:
2 1 k you mere, Covernor Keine,
we incorporate a recomawslation thet arrangements b e
ogce b y which tirvansfers c a m b e mede bet@eon Sub—Treasurers
WalhGut exponset
a. R a d e i
wove it.
(the motion haviag been seconded and the question put,
tie sotios was carried.)
ine Agting Chairs:
# e @ will ceil that free tram fers
between Sub~Treasarers o m account o f Fecd<ral oeserve banks.
we. Mekayt D o e s that c o m under tie head of Paragraph
22, o y Paraerapgh 107
Seay S e t a .
The Acting Chairman:
A r e there any other suggestions
of mittere t e be taken up with the treasury Dem riaent?
%. Pemther:
‘ T h e euggestion o f the deposit o f the
gole fund would b e rather seperaie and apart from angtining
of this eort, weold i f notT
The Acting Chairnens: I
ebould tnink ibst might well b e
tekem u p with the Federal “eserve Bourd i n ihe hope that they
sight hegetiate with the *reacury Departaent.
P e you
keow Hr. Ctrong’s feeling avout that, Gr. Curtis? .
The Seeretery: W o , I do not. I think he het some idep
of teking i t u p with both the Board end the oserctary,
getting sore o r ie og informal
juli with the Seeretary o n
Lat.
The Acting
te.
nes a r l e e n w i t h
T EmRaPi g n i . sey itet ene thing trat.
w i r
meetion o f having the national
u s
the Sab-Treasury
benk nolads r e c e p a c d « f
LG s e n t
t o $e
Shingiwm, and
b
o
Paasi
pnabie GhjeciL
4 2@ O L soe ehy 11 w e l d n o t b e
a>,
in iswial cones.
soe
i
a3 i m i t .
F od
b e a
w
e
L
i
a
o nol o e a n y r e a
t
t
g
ts t . i T a s
a r e
Gunnet
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
imiy
re
ae
l
e experie:
hear SOce sucges=
Lileiows o f that
hed,
y bare t o
“rensury Degertmenat t o redeem there a f
precticavie t o r tke
tae
c
e
gent Loewen vhoe heave
n
a
i
f &
i
e
.
tin
reneon
w
e why
i t
t 1
b e done,
y
i
Look
n
wg
t iu p t ¥
ho L h e
of metions:l tenk woten& e e e&
Mini
r
v e beve
we @gald he would «rite t e Yeshincton
eny errangeonta o f ihet sort pat
see i f b e e o u l d
LI Ouigris
S u b
F
elas’
o h i r
e
a
ee have not heard enything
d
2%
a ad‘
sngekgstage 4
give yOu sresecn wig tney « 1 1 met
AeLee t
rertnecd t o take thos o n deposit.
eCord:
* Sag 2
tes
bitte,
enyt
2 6 0
Hetionel b e a k netleas
The law says you ebnll. take t h o m
¢ ?
a ine t
sd
tay” take theme
&A@iing Chadirm
teoe
ae
A
s
& matter o f information,
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
132
would ifke t e esk Geverner MeCord why they cannot d o that-
Me» Yecord: I
«211 tell you. ‘ T h e “overnsent sainteaines
euly « small office foree at each of the fub-Treasuries. Thasy
ipy to mininise the expense of handling Dmeinese st the Sul
*roneuries.
f n e y will. not take over « certein amount o f
silver on any one day in New Oriesnms, for inatance. T h e
redemption of satione] bank notes i n a Sub-Treasary involves
a8 sneregus a m o n .
e f labor, a n i reauires expert accounting,
end for thet reason you #111 sewer b e able, i n ay opinion,
teget the Treasury “epartaent te allow the redemption of the
wiideanl benk notes e t the Sub-Treesuries.
T h e y require u s
i@ ship these Dilis i m 100 bills i n « package, a n i when they
get bere ihe Separteaeat turns them right inte the redemption
éepertuent, where t h e y are sorted b y Siates, t h e n b y cities,
end them b y banks i m the cities, emi out of timt they evolve
these thet are for retirement. end these that are for re~
issue.
T o 66 any part of that work in # Sub-Tressury in-
volves « eaystem of expert accounting, ant they w i l ao: d e
it for that reagcon. T h e a t ie the mein reeseon for it.
tr. Faneher: S e a r i n g o m thet, I sight apeak of an oxperience w e hed with the oub-Treasurer i n Cinclumeti, KS
regard te the redemption o f mtilatec lerful money- Clevelend mot boing a Sub-Treasury cliy, when the Sub-Treasurer from
Gineinneti <amp te us, when he got te ihe matter of ahpe
Shipping out autilated mency to Gineinncti, we erranged
with him to send up te ue hie wlraps, emi we strapped the
money i n the form required, e n d gusranéesd the ceumt, ani
anipoed aur soney t o Cincium ti, ani i+ elmply went through
there, and they cameelled the gold sertifientes, ami it
went through t o Weshingtom and caved them all the lebor-
v e
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
146
shipped them i n the required form, i n packages o f the required shape, with their streps,on, which he told as how t e
fix, and we have passed 211 cur mriilated money through the
Cincinnati Sub-—Treasury, o n d it hee gooe o m here i n that
form and sewed them thet actual inber.
um. Geivat W i t h o u t being counted b y the Coverneent?
iv. Fancher: #
Without being ccunted b y the Sub-Tresgur~
it is qgusranteed.
i t come t o wy aim! vhether w e can
not affest some errangement i m the matter of national bank
notes » guaranteeing the secount.
i. ReCord*
L e t me make this explanation, then.
I t
costs you as m c h t o sen@ them t o Cincinnati e s t e send then
éoen t o Weshington, did i t not?
#2. Yenther:
H o .
ped b y regintered mil.
O u r shipping rate i s less.
‘ % e ship:
° @ get some yery cheap rates.
o e
Shipped quite a bunch of our soney b y peresl post before they
flopped um.
o S got i t insurcd, ani w e got « very Low rate
on$2,000,900, but fimally they checked we up on that.
“m. NeCerd!
T h e “evernmant will not rormit it?
Me. Poancher:
W o u l d n o t permit t h e m reel pest.
i n
other words, they would not register the packages i n bulk.
*e shipped $200,400 in a package.
ay. SeCords
T h e reaton I naked that qestion was, I
have the sane insurance rate for the m reel post thet 1 have
for the regular letter pestege.
i. Fancher:
W e shipped cur mutilated gold certificates,
torecuce the bulk of the currency In our vaults, to save
space, emi 1i went through ant saved the Sub-Treasury all
thet mamal labor,
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
141
fhe Acting CGhairmant I
might say that f have taken up
the watter a mumber o f times with the manager o f the Sub| Peasury i n Boston, ané h e wee very anxious timt «ee should
arrengée, i f poceible, with Saghingtom t e do that.
H e seid
they could handie i t without difficulty i f Yashington would
only let thes, with the foree of mon they had in the SubTvcacury i n Boston.
Ge. HeCormds
H e would have t o seugeont his force.
Mi. FPamchers I
am mot femilier ofough with Sub-Treas~
ury acthods, b u t G o y o u mot suppose t h e t i f w e shipped o u r
netienal bank notes t e the nearest Sub-Troasury, and guaranteed the account, they could pess them through and it would
save the Sub-Treasury thet lebor that they wank t o saveid?
te. Metords T a k i n g that view of it, i presume thet
could b e done. I
do not m e c whether you could make that
arram gement with the Supb-Treasurer.
ie, Pancher:
t e heve passed through the Assistant Sub-
“Poasurer in Cinelmmeti et least Gig400,000.
“ap. Mgtord:
i I am gle@ t o knowthat. i
wiil make Hew
unless work for me.
the Acting Chairmant 1
would like t o atk Uoyernor
Panther whet charge you had t o pay?
ar. Faneher:
S e simply paid t h e shipping charge t o
Cincinnati.
mm» “old:
a n d they mid the «xpross charges ‘rom
there t o ‘ashington?
Me Pancher: I
ihe Sub-ireasury.
suppece so- T h a t , i g all w e heard froa
Y o u say you ship lewful money?
Me. Yolds “ e s , lawful money.
Me. MeCord:
T h e difference «bout the ontional bank :
noite is thet i t goesfor redemption o r retirement. .
ti. Pangher: “ e s , thet fe it.
Ue. SeCerd:
i t j e wet s o i n the leefcl money ease. \
ae Seayt T u t there may be a fumi for the payment, |
of charges o n the lerful. somey, and o n the other not.
Ue. UeCerd!
T h e other i m expense is prorated among the
notional banks i m ihe United “tates, eccnrding t o the
onoaunt of relomption.
ir. Pancher:
c h a t wight b e a double shipping charge.
fhe Acting Chairaen:
v o u l d you ceontiemen think i t
worth taking up te cot an officiel opinion from tne “reesury
Depa riment «e@ to hor ihbey wuld hondle theait
I t wakes os.
great differoace vith the wenber banks i f it ie going t o be
possible for thew. particularly «here «a Feders] Seserve
bank is in a Sub-Treagury sity, i f they are going t o be
able t o t i m i n nationals, and if we ean turn them into Sub<
+roasurhes, and if they are handled free of teansportation
Shar goes
lip. Kadwe? I
kuew w e would b e ewamped i n San Preneisco
with tnuem if we vould take ineam.
i. MeCord:
e have i m the sixth district twenty-two
millions o f Aldridh-Yroeland, four miliions hee been deposited
for nédenption, o r for Setiresent,—- the words are nearly
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
tie same, tut they ere entirsly different.
3 % is my purpose--
and 1 got my b o m t o pass a renolutien author xing me o e
to send ou. Pecoral “sserve notes inte the other citics, and
to pay the insurenee and the postage, ami alee t o pay the
insurance ami the postage o f thg return of the national bank
notes.
Y o u say “Chat Im the world do you wmt t e © thet
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
fort? h a t do you want to incur that expense fort” 1
would
be very gled indeed t o make ihe evap i n the sixth district,
because I vould float out my o m oredite t o ihe extent of
about sixteen miliions, i f I e d the discounta t e take
care of ite~<- «nd theyare coming very fast.
ie. Seay: T h a t is the point.
Me. MeCord?
s n d et the sane time 4 would v e taking out
the Aldrich<Vreelané that i e going t o be retired, and I heve
got to furnish the money to retire eo goog deal of it, and in
exchange 1 equld get gold i n “ashingtou for it.
wy. Seegr U a v e your State banke responded te thet?
My. SeCerd: C e r t e i n i y . ‘ T h e r e is omiy one State bank
in the city of Atlante thet le « weuber of the clearing
house.
T h e oihers are all mtionmis-« ‘ t h e n I sentioned i t
to the vice~coresident he esid, “Most aseuredliy, I will aid you.
i cam give y o u four o r five hundred thousand ddilers national
bank notes right now, and 1 will take your federal Seserve
nates, ond will bo gled indeed to get thea, becaugee it is
a dircet obligation o f the Government, a n d sesured b y gold.
It 18 s© beticr than the other, bat then I knew that is good,
besiv money.” I
have arranged with Sew Orleans whereby they
ship me metionel bank notes, sami I ahip them Federal Acserve
notes. I
have also made arrangements with ithe bani i n Wee
Vrleane whereby they will count their moacy up im lundrod
bills, in e package, ond they will ship them dircet to the
“rensury fer my account.
ae. Panther:
Ur. BeCord:
< t your expense?
A t wy expenses; and I am doing that t e ihe |
extend only o f the Aldrich-Yreeland money- S e a r l y every
bank in the district has issued it. Nearly all ere
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
retiring it, omi i t enables w e te disegunt wore freely for
my miaber benke, b y getting m y Federal Keserve hotes o u t
an t x hon’s o f the State becke, o f well o s retional banks.
GY tach bewe you suapped o m that plent
Ce. Meterie
= F heave net awepped auch, inch I am ready
Step & ooe@ desk more, emi I have the contemete mad: f o r
it. i
¢as weap Piwe o
s i m mi lifer.
jour die counties
; Glesgnale s r e w o w appreaching t u o mile
lious, wel they are coming very fash, because the tem o n the
Alcrich-Vreeland hee reaeheé 2 poiut higher then ay diseSaunt rate, s n Geing t e the nom-cervement o f the preducte
ef the country they e v e f o keep eene Jind o f credit out,
ami they prefer t ¢ give a
t h e diremmtis, end I prefer t e
Uns Gleammita, onl Moat a y Pedorel feserve acies into
Ltery, rather t h e m t e have thelr Aldrich-Vreeland ouf
a8 a menace againat ae, and againet a y heving o n oppo: tunity
te G¢ basinenss.
Sp. Faucher:
f e Lt your Ueueht thet your State banke
will pai the Siele setes inte the Peceral Jesarve?
Mee K e t e l s i e s ; Gixs S h e y hewe aggeed t o do it.
Tie auting Chaieosn:
b e the gevilemen thiak it is vorth
while t o tcke w p with the *reacury Soperinent that aatter?
Seay:
A t is quite worth while, bul. tiere are very
Littisc hopes.
i. WOidi:
Z e e BAVG @ committies-
t h y not let then
haniie the whele subject?
che Acting Cheirwamt
Y o u soulé leave all of this t o the
counittce having i n charge t h e mibter o f wralting this plan?
a. Wold: i
think sco.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
me. Fanghers i
move you thal thie s e one o f the
Lopies i o b e discusge@ w i t h the ‘roseury Depertment.
the Acting Chairman: G o v e r n o r Fancher aoves that the
matter o f the redemption o f muetilenal bank notes a t Sub—TreamigreLen b e added t o the l i s t o f topics.
(the question heving b o o n soeconded an} put, w a e c a r
ried. }
Te Agting Chairman:
i e @ there any other abjects t o
be taken u p @lth the ‘reasury7
ay. Seng: t r . Comiraen, + eill wention, i n eomection with this topic, something that Game out of the aceting of
the comslttee i n Sew York. I
understood Gevernor Strong t e
@e7 that Sub-Treasuries h a e been aporoached e s t o the soct
of making some o f these transfers, ani they had siated that
the provision for their expenses was pretty well oxhausted,
aod when they applied f e r o m e additions t o t h e provision f o r
eupenses, they vere met b y a comaitice i n Congress--- when
the Sub-ireasury officials applied-——< who stated t h a t i t was
contemplated t h a t t h e federal Reserve Banks would absorb some
of these charges, and they they were expe@ted t o absorh a
of these charges, and thet provision a t the Sub~-Treasuries f o r
Some of these things we wich te have done aight not be wo
ample i n the future.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
L U L S T e ai,
imate t h e
% é
out a e @ besian for figuring
wtaining about
amd sane type a n d paper
be s i m i l a r t h e
A . B H A , Cade, wit!
p c o k .e td oam tth e
tee. *
Pyche ge ee
Cs ‘FY Se.
€t Se S&S oe?
SE
L G
aiphabetical arder those
gontents o f this s u p p ,ec9“nt, s a b e
print, bind and deliver
YP eyek ty "
3
»
: xi
a
: —
2 O % erty 2 « a i e the
s rh e e g E a
thé
gupplenent,
i Ban aceerdance
spucificats
n
e
i at t h e eri
i~5 conta)
mag o r
supriement
f e
binding considerable etady w i t h the r e e
plein
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
aeo e
bheo ee Ee c y
2fG E G te 2 S
that euch banke would t h e very s@ai2 i n nu&iber a n d
have telegraphic comumioaetion w i t h
erncr Kheadea,
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
{of Twelias):
w é ¢ here net
Fercort W a s mecde
Mr. Yelle (ef Dallas)
7
u n d a r s
t e r fes4 E h e a y p e
3 6 5 2
Secret
m a t e
a v d
h
e 4
k
s
e
s
ave n o t ali. m e m b e r s e f t h e Ase@ricon B e n k e r s Auscteiation n e e a r p
werve H e a r d w a e read.
(Of Dalies}= T h a t wae
eh’ ection t e our taking o u t 2
ef the Auerican Hankera Association,
veplied t e thet comumication t o Gererner Btreng t e the efe=
provide fer « ¢tiel membership
‘t
S
be S E F
any
until the next ceuncil m e t , which
era m2 cording t o that letter
ex Yather rentriction:<
mot i m & peuition t e erail surselves o f a
of the Anerican vankers Association Cede
been i g e e d
seasary t o b e g aae¢
Te me the Secretary'«a letter aimest
to # statement t h a t h e would b e perfectly willing f e r u s
B atl,
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
= pre =
sae
Geke tt ae SER
Lion a g i l e
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
e -ewe
at a e y e e r
h oe
u WE
S=
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis