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Federal Reserve Bank of St. Louis
5
DTN
CONFERENCE B O A R D
7
)
“ O V E
R N G R S
O F GOVERNORS
AVE BANKS.
Merning Session, J a n u a r y
OY c h e e oh, L I D .
4
Lin " L I A A T T
P HE T D RN O2 H S
D N A
REPORT!
COLUMBIAN BLDG, WASHINGTON, D.C,
PHONE M A I N 8224
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Federal Reserve Bank of St. Louis
SECOND DAY.
New Willard Hotel, Cabinet Room,
Januray 21, 1915.
The conference reassembled a t 10:30 o'clock a . m.,
Governor Strong presiding.
The Chairman: G e n t l e m e n , I
would like t o first convey
to you a message f r o m the gentlemen w h o have been reporting
our proceedings,
t o the effect t h a t there a r e a good many
incomplete statements i n the record d u e t o interruptions.
It does n o t make v e r y much difference a s a matter o f record
of our proceedings, b u t sometimes t h e interruption occurs i n
the middle o f a statement a n d the thread o f the discussion i s
broken, a n d w e thereby lose a
make m u c h progress. I
good deal o f time a n d d o not
a m very anxious
t o g e t away,
a s some
of the others are, a s promptly a s possible; a n d I merely
suggest t h a t i f e a c h o n e o f t h e G o v e r n o r s
i s permitted
complete what h e i s saying, before t h e next m a n starts,
will have a
to
we
very much better record.
When w e adjourned last night action h a d just been taken
in respect t o Item 1 3 o n our program, "Regulations Covering
Revenue Warrants."
Governor Rhoades,
o f Philadelphia, w o u l d liek t o bring
up one other matter f o r discussion i n connection w i t h the
regulation, b e f o r e t h e subject i s closed,
Mr, Rhoades: I
have been i n correspondence with Mr,
Warburg, a s k i n g f o r some regulation that would permit u s t o
take f r o m our member banks, w i t h their endorsement, n o t e s
issued upon municipalities, representing short-time borrowe
ing.
W e cannot regard that a s a commercial transaction a n d
we t h e r e f o r e h a v e t o c l a s s t h e m a s municipal w a r r a n t s .
These
notes a r e i n small a m o u n t s a n d w o u l d n o t c o m p l y w i t h a l l t h e
detailed regulations that apply t o large issues s u c h a s New
revenues.
Mr. W a r b u r h w r o t e m e a s follows:
"FEDERAL RESERVE BOARD
January 11, 1915.
"My dear G o v e r n o r Rhoades:
provision
If w e add t o t h e warrants regulations a
substantially a s follows:
"tany Federal reserve bank may purchase from
any of its member banks warrants o f any municipality
endorsed b y such member bank, w i t h waiver o n demand,
notice and protest, u p to the amount not t o exceed
ten per cent o f the aggregate capital a n d surplus
of such member bank; Provided, however, t h a t s u c h
Warrants comply With provisions ...sscsseeevsveear
of these regulations.!
what would b e your idea as t o what clauses o f the
regulations these purchases O f endorsed warrants should
remain subjected?
"T shall b e very glad t o have your suggestions.
"With kindest regards, I am,
Very truly yours,
PAUL M. WARBURG.
C. J , Rhoades, E s q . ,
Governor, Federal Reserve Bank o f
Philadelphia, Pennsylvania."
I s u g g e s t e d t h a t h e o m i t f r o m t h e regulation,
s o far
applied t o such purchases, a 1 ] details that a r e
set forth i n the regulations o n municipal warrants,
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Federal Reserve Bank of St. Louis
T e c h -
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Federal Reserve Bank of St. Louis
nically these a r e not commercial paper, b u t t h e y come t o
us i n the shape o f commercial paper when they come a s re~
discounts f r o m member banks,
The Chairman:
G o v e r n o r Rhoades! suggestion,
a s I under-
stand i t , i s f o r t h e p u r p o s e o f e n a b l @ n g t h e F e d e r a l R e s e r v e
bank t o purchase o r discount, w i t h endorsements o f member
banks, obligations o f municipalities t h a t have been taken
by member banks;
t o take t h e m away from the limitations a n d
restrictions o f the regulations governing t h e purchase o f
municipal warrants; t h a t i s t o say, s u c h purchases,» with t h e
endorsement o f member banks, w o u l d hit b e s u b j e c t t o the per-~centage limitation n o r t o the opinion o f counsel,
o r the
other limitations imposed b y the tentative regulations that w e
have been discussing.
Do y o u offer that a s a motion, Governor Rhoades?
Mr. Rhoades: I
do.
The Chairman:
I s that motion seconded?
Mr, Aiken: I
will second t h e motion,
The Chairman:
I s there a n y discussion?
Mr. Wold: I
notice t h e limitation there i s 1 0 per cent
of the capital stock o f the bank offering.
I n the case o f
small institutions, a n d I presume y o u get those offers f r o m
the smaller banks i n the interior, with $25,000 capital,
they would only take $2500 worth. W o u l d that b e sufficient?
Mr. RMoades: C a p i t a l and surplus. T h a t i s the regulation.
The Chairman:
Mr, Kains:
an
time,
I
I s there a n y further discussion?
s i t understood t h a t t h i s i s for a
o f s i x months? x
limited
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Federal Reserve Bank of St. Louis
Mr. RMoades: Yes.
The Chairman:
G o v e r n o r Rhoades!
m o t i o n provides t h a t
they shall have t h e maturity prescribed b y the statute,
of
Course.
Mr. McCord:
W h i c h i s not i n excess o f s i x months.
The Chairman:
N o ; not i n excess o f six months. I
will
put t h e question,
(The motion was put and carnied.)
The Chairman:
I s there a n y other discussion o f
on our program, t h i s morning?
T h e item has reference
purchase o f revenue warrants. I
suggest,
i f there i s
further discussion, t h a t w i t h t h e two recomneridations
have been made i n the resolutions offered b y Governors Aiken
and Rhoades that w e express o u r views a s t o this tentative
regulation i n the form o f a tlotion t o b e submitted t o the
Federal Reserve Board,
Are y o u prepared t o express t h e approval o f the Governors
of the tentative regulation o n the purchase o f revenue
warrants,
a s w e n o w have i t ?
Mrs Ritpades:
The Chairman:
T o b e drafted b y the secretary,
a s usual?
Y e s ; the resolution t o be drafted b y the
Saex Secretary.
Mr. Wold:
D i d we not discuss that a t the last meeting
of t h e G o v e r n o r s ?
The Chairman:
G o v e r n o r Wold, a
was s u b m i t t e d a n d discussed;
and s u b s e q u e n t
tentative regulation
c e r t a i n s u g g e s t i o n s w e r e made,
t o the meeting a
tentative r e g u l a t i o n w a s
issued with the idea that a n y mkkex changes, w h i c h experience
indicated were desirable, w o u l d b e submitted t o the Federal
Reserve Board b y the Governors o f the Federal S e a t s banks.
to m e
This s e e m s / t o
be a
good o p p o r t u n i t y
view t o t h e R e s e r v e
a r d 4
t o express o u r
t e n t a t i v e regulation
which they have made following o u r last conference,
Are y o u referring n o w t o Item No. 1 4 ?
The Chairman:
N o ; this i s Ttem No. 13.
None o f the gentlemen present s e e m disposed t o make a
motion. I
a m afraid the Chair will have t o offer a resolu-
tion t o the effect that i t i s the sense o f this meeting that
the regulation, w i t h the t w o changes suggested, appears i n
general t o b e satisfactory t o the Governors o f the Federal
Reserve Banks.
Mr. MeCord:
A b o u t t h e limitation cof the amount o f
warrants t h a t w e could discount o r purchase,
of issue.
a s t o the amount
T h a t w a s under discussion a t our last meeting
with the Board.
T h e y made a
suggestion o f 2 5 per centum o f
an
the a m o u n t o f issue.
T h a t w o u l d b e unknown quantity
some localities, because y o u might purchase a
in
warrant i n a
county, a n d i n less than thirty days another issue would b e
had, covered b y the same t a x assessment, t h e same authority,
and the same conditions surrounding it, a n d you would b e
held down t o 2 5 per cent o f the issue a t the time y o u purchased,
N o w t h e q u e s t i o n arises:
T o what extent will t h e y
allow u s t o purchase county warrants?
Mr. Seay:
H a v e y o u been buying s u c h warrants a t all,
Gevernor M c C o r d ?
Mrs McCord:
N o .
W e have turned t h e m down because
of t h e u n k n o w n quantity.
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Federal Reserve Bank of St. Louis
Mr. Wells:(of Dallas), I n a s m u c h a s these regulations
specify that a n y exception, a n y seeming exception t o the
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Federal Reserve Bank of St. Louis
ee 4
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which
they
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the B o a r d ,
ies ep
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i . eCord,
7 Governor Welis ( o f Dallas)
the R e s e r v e B o a r d h a s i n d i c a t e d t o t h e
banks t h a t a p v l i c a t i o n m a y b e m a d e
the B o a r d
2
yparently c o m p l y w i t h t h e
Perhaps I
did not make myse
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a
n
d
{
i
se a county i s contempla
th at t h e y h a v e l e v i e d a
in w i t h a
tax t o
warrant
Before I
for
can touch that
saction I have g o t t o write u p here t o Washingt
whether I
ca
$ 5 , 0 0 0 mmin worth f o warran ux
to b e absolutely a n d unqueskm o w
b e f o r e
more o f it.
I
the year
i s over
t i s all within
that
pecause
i t i s the
to d e p e n d u p o n a
future c o r
idea was that t h e y would exempt these small matters
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Federal Reserve Bank of St. Louis
that come u p t o local counties where
ient a n d conditions a r e
issue those warrants j u s t a s
ation was put into.effect I
, Until I
could o n l y take $1250
have written here W a s h i n g t o n .
t o find
out whether I - c a n b u y the $5,000 worth.
crude i n m y explanation,
Mire Wold:
b u t that case i s rig
i
n point.
I f the Board concedes t h e request m a d e b y Ma.
Rhoades, w o u l d i t not enable Governor MeCord t o take that
from the member b a n k and handle i t i n that
Mr. McCord:
T h a t is what I
want. I
want t h e privilege
of taking i t from the member bank.
Mr. W o l d :
Gover)
R
] d e s ' suggestion was made t o
just s u c h a contingency a n d t o enable y o u t o handle i t
through t h e member banke
Mr. Seay: I
suggested that matter t o the Board, after
we had discussed i t a t the last conference, saying that i t
would practically nillify i t s usefulness i n the southern
district s o fas a s county warrants were concerned. I
sug-
gested that i f that phase o f the matter came u p that t h e y
view i t with pleasure.
The Chairman:
V. G i l m o r e I d e n ,
W e have a
o f the Journal
caller,
i n the shape o f Mr.
o f Commerce.
I
T would l i k e
to suggest t h a t this matter c a n b e brought t o a vote a n d conclude this subject o f Revenue Warrants,
will make &
i f Shrecake McCord
motion that will enable u s t o make a
recommenda-
tions
Mrs MoCord:
I f it is the wiew o f the body that 4
motion will cover that subject, t h e n I have n o further c o n +
tention t o make. I
wanted t o t a k e t h e m f r o m t h e m e m b e r banks,
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Federal Reserve Bank of St. Louis
The Chairman:
My},
T h e
. Séc)
t o wvrepare
a r y is. directed
des" resolution, a n d possibly with your sug*
=
e
can b e . S s p r e
R O E
aL d e s
B
a
S
s &
i
e o t oly 3
c o v e r
R
E E
F
t n e point
b
c e e .
that
;
Mire: MeCord::. A
Chairman:
r i g h t h a t . sett t h a t question.
M y r
e
n o f
t i Journal
he comes
consider o n e point. A
o f Commerce
i s
i n I think w e ought t o
purely tent
advance w a s s o t
ion o f N e w York, a s
and I
appreciated h i s
Wells:
just between ourselves.
Chairman:
T h e whole r e c o r d o f that discussion h a s
been kept out o f our general rex
to the gentlemen here
7 to s e y t h a t w h a t
himself.
f this Board a n d i s presented through
You h a v e h e a r d t h e motion. I
will a s k
of a vote.
and carried; )
(Mr. V.-Gilmore
Commerce,
n
h
t Journal o f
, r e p r e s e n t i n ge
w a s thereupon invited i n t o t h e conference room,
when t h e following proceedings. t o o k place: }
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Federal Reserve Bank of St. Louis
17
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Federal Reserve Bank of St. Louis
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D i d you have
The Chairman:
a y conversation w i t h m e a t
that time?
do not remember t h a t I did. I
Mr. Iden: I
a long time a g o - ~ b u t I
remenber
imagined i t was the gold p o o l
fund t h a t w a s b e i n g o r g a n i z e d t h e n - - I
stopped y o u a n d a s k e d
you a question a n d you said there wasnothing t o b e said;
that y o u were not a t liberty t o s a y anything.
only time that I
e
The e
T h a t i s the
can remember.
W e r e y o u a t the Willard Hotel
o n Friday
evening, Deeember llth, w i t h t w o o r three other representatives o f newspapers,
a t the entrance t o the Gridiron Club
room, w h e n I was asked t o make a
regard t o t h e p r o c e e d i n g s
statement t o the press i n
a t t h e m e e t ing?
wasinformed a t that t i m e about t h e members
Mr. Iden: I
of the press coming there. I
stand the reason y o u put t h e question, I
tried t o correct
that w i t h the person w h o reported i t t o you.
informed;
under-
did not came ovéere I
H e Wasimis-
a t Aa ast. h e got the wrong impression, E v i d e n t l y
you have been given a n incorrect impression o f that instance,
because I
remember talking i t over w i t h the gentleman, w h o m
very likely you have been comaunicating with, a n d at the time
I talked with h i m w e talked cery rapidly a n d hurriedly, o n e
evening w h e n I w a s trying t o catch a car,
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Federal Reserve Bank of St. Louis
W h e n I
saw him
the next d a y h e brought t h i s thing u p again a n d I corrected
it. I told him so, that I had not been dow at the time they
met you, b u t t h e other newspaper m e n h a d told m e what h a d
taken place,
The Chairman:
W o u l d y o u mind repeating t h e substance
of that c o n v e r s a t i o n t h a t y o u r e f e r t o ?
Mr. Iden:
W h y , i t was a
private conversation. 1
would
I f you insist, o f
prefer not to, i f y o will excuse m e
course there i s nothing i n the conversation t h a t could not
be repeated-- b u t i t was nothing. I
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Federal Reserve Bank of St. Louis
a m a t perfect liberty--
but you understand m y position?
The e a l pears
W e are n o t going t o a s k you t o make a n y
statement that y o u vegard a s improper o r i s a violation o f
any confidence,
Mr. Iden:
I t would not b e improper a t all; b u t i t was
friendly c o n v e r s a t i o n ,
just a
meet s o m e o n e I
might g o o u t a n d
j u s t like I
k n o w c a s u a l l y a n d m a k e s o m e remarks.
The Chairman:
M r , Iden, h a v e y o u been asked a n y fur-
ther q u e s t ions about t h i s article,
o r have y o u b e e n q u e micenee
as t o the authority f o r t h e statement which appeared i n it?
Mr. Ident Y e s , I have been asked about the article.
I was asked, a s I understand officially,
b y the Federal
Reserve Soacd.
The Chairman:
D o y o u mind telling u s what y o u advised
then?
Mr, Iden:
Why, I
The Chairman:
Mr. Iden:
think m y reply i s i n witing.
I t i s i n wiiting?
I t i s i n writing a n d i t i s i n the records.
Anyone i s a t liberty t o see i t at a n y time.
The Chairman:
D o we understand that you have stated,
ur, Iden, t h a t t h e information o n which this article i s
based d i d not come fram a n y member o f the Federal Reserve
Board?
Mr. Iden: N o , I did not s a y that, I
peen told m e b y him, b y a n y o n e o f them.
difference i n that, y o u se@e
said i t had not
There is a
The Chairman:
Mr. iden:
Y e s . T h e r e w a s someone i n between, then?
Yes.
The Chairman:
H a v e y o u a t a n y time claimed that t h e
responsibility f o r that statement,
o r that the source o f
the information, w a s one o f the Governors o f the Federal
Reserve Boamifim banks?
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Federal Reserve Bank of St. Louis
Mr. Iden:
N o indeed; n o , s i r e I
have n o t .
A s you will
notice, a n d I suppose y o u will acknowledge, t h a t t h e article
is very friendly t o the Governors themselves.
I
t i s ace
cording t o the Governors’ p o i n t o f view, f r o m m y knowledge
of t h e subject.
The Chairman:
W e met i n Washington o n the dates I have
referred to, December 10th, l l t h and 12th - Mr. Iden: I
The
Saturday.
a m not positive o f the dates,
d u s t s
T h o s e d a t e s w e r e Thursday,
Friday and
S a t u r d a y morning t h e Governors m e t i n the Board
Room with the Federal Reserve Board, w i t h the members o f the
Federal R e s e r v e B o a r d ,
a n d immediately following t h a t meet-
ing a statement w a s given t o the press i n writing?
Mr. Iden: I
obtanhned that statement.
The Gyietsuens
Y o u got a
Mr. Iden: I
did; yes.
The Chatman:
W a u l d you mind telling m e who gave i t
copy o f t h a t s t a t e m e n t ?
to you?
Mr. Iden: I
correctly. I
positive t h a t I
got i t from Mr, Cooksie,
i f I remember
a m not positive a s t o that, b u t I
a m almost
got i t from Mr, Cooksie's office.
The Chairman:
M r . Iden, I
would b e glad i f you would
look a t t h e f a c e s o f t h e m e n w h o a r e i n t h i s r o o m a n d a s s u r e
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Federal Reserve Bank of St. Louis
14
us t h a t t h e i n f o r m a t i o n
o n w h i c h t h i s artiféle i s b a s e d c a m e
from none o f the gentlemen w h o a r e here,
Mr, Iden:
Oh, I
have stated that before. I
can state
it again with a very clear coscience, t h a t this article o n
currency w h i c h y o u r e f e r t o d i d n o t c o m e f r o m t h e Governors.
of course y o u must l e t @ m o d i f y that d a saying; nothing
other t h a n the statement w h i c h Igot f r o m Mr. Cooksie's
office,
The Chairman:
Mr. Iden:
Y e s ; t h e wiitten statement.
T h e written statement.
“
I did not know
there w a s a doubt a s t o that point, Mr. strong.
The Chairman: I
think your statement makes i t clear
that the only information which you claim t o have received
from a n y o f the Governors w h o attended that meeting w a s the
information contained i n the written statement t h a t y o u received f r o m Mr. C o o k s i e
o r from saneone
i n the Treasury
Department.
Mr. f e n :
T h a t i s very clear. I
was told i t was a
statement prepared b y the Governors a n d given o u t w i t h the
consent
o f the Federal Reserve Board,
The Chairman:
Mr. Iden:
any article,
A
m 1
correct
i n that?
T h a t i s correct.
O f course a l l you gentlemen know,
i n writing
i t i s necessary t o gather your information f r o m
several sources.
Y o u asked m e about a
question i n that
art icle--The Chairman:
Mr, Iden: I
Yes,
have a n s w e r e d t h a t
a d s a y that t h e r e w a s
other i n f o r m a t i
o
n in the article which came f r o m other
sources, w h i c h I got direct f r o m t h e source,
the s o u r c e ,
a s you know--
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Federal Reserve Bank of St. Louis
The Chairman: T h e n I understand this article was based
upon information that w a s gathered through various methods?
Mr. Iden:
O h , yes.
N o w £ £ I had the article before m e
I could point o u t various points i n i t where i t would b e
perfectly legitimate information.
The Secieaen:
T h e point is, however, that that portion
of the article that I read, a n d which i s i n quotation marks,
did n o t c o m e d i r e c t l y f r a n a n official
o f the F e d e r a l R e s e r v e
I s that t h e point y o u mean t o make?
Board,
Mr. I d e n :
I
The Chairman:
Mr, I d e n :
t w a s n o t t o l d d i r e t t l y t o me.
B
y a member o f the Federal Reserve Board?
N o e
The Chairman:
B u t other portions
o f the article d i d
come d i r e c t l y f r o m t h e s a m e s o u r c e f r a n w h i c h t h e q u o t e d
information came indirectly?
Mr. Iden:
T h e legitimate information I
Y e s , sir.
not think anyone would have a n y objection t o a t all.
do
F o r
instance, "that i t would take possibly t e n days t o clear a
check o n a country bank i n a far distant district",
legitimate information, I
The chaitmans
T h a t is
think.
want t o make s u r e that w e under-
Y e s . I
stand clearly everything that y o u a r e w i l l i e t e tell u s i n
regard t o t h i s article.
Mr. tdehe C e r t a i n l y , Mr. Strong. I
want t o b e very
frank with you, a s far a s I can,
The Chairman:
pearing
T h e statement w h i c h I have r e a d a s ap-=
i n quotation m r k s ,
a n d which i s s a i d t o have c o m e
from a n official o f the Federal Reserve Board, I
actually c a m e f r o m a n official
understand
o f the Federal Reserve B o a r d
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Federal Reserve Bank of St. Louis
but through a
Mr. Iden:
third party.
T h a t i s correct, sir.
The Chad rman? I
want t o make a
statement i n regard t o
this article o n behalf o f the Governors.
I n using t h e e x
pression "the source o f information", would you mind explain=
ing exactly what y o u mean b y that? :
vidual o f same public body,
D o you mean some indi-=
o r some private source o f infor=
mation? :
Mr. Iden:
M r . Strong, I
will e x p l a i n i t t h r o u g h a n
example, w h i c h w o u l d p o s s i b l y b e t h e b e t t e r w a y ,
B P ce |
wanted t o know what type o f investments the New York Federal
\
Reserve Bank made, I
The Chairman:
would came t o youas the source ---
Y e s e
Mr. Iden: B e c a u s e y o u a r e the best able t o tell me,
The Chairman?
W h e n y o u w e r e preparing t h e article
i n
which y o u m a d e t h e s t a t e m e n t t h a t t h e c h a r g e h a d b e e n m a d e
that t h e Governors! meeting h a d been influenced b y the oligarchy o f the Clearing House a n d inspired b y Wall street
interests,
y o u would naturally c o m e t o m e t o get confirmation
of that?
Mr. Iden:
T h a t i s a quotation i n the article,
a s you
know,
The Chairman: I
Mr. Iden:
source w h i c h I
beg pardon?
T h a t i s a quotation,
have m e n t i o n e d
The S i t e s
s
T h a t came f r o m t h e
i n t h e quotation,
o that there i s a specific source?
Mr. Iden: C e r t a i n l y .
The Chairman:
A
n official specific source f o r this
information?
Mr. Iden:
Y e s , sif,
T h a t which I read was not guoted i n the
The Chairman:
I t w a s a quotation f r o m the article, b u t i t d i d
article.
i n quotation m a r k s
not a p p e a r
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Federal Reserve Bank of St. Louis
i n t h e article,
Mr. iaent W e l l , i t i s the same source.
I t came f r o m the same source,
Curt is!
Iden:
d o you mean?
Y e s , Mr. Curtis.
daotentnt I
would like t o read one sentence f r o m
this article, w h i c h i s as rotlows!
"Nevertheless, i t did not assuage the feeling o f those
radical officials o f the Board w h o were inclined t o charge
that t h e Governors!
m e e t i n g h a d been influenced
b y t h e oli-
garchy o f t h e c l e a r i n g h o u s e a n d i n s p i r e d b y W a l l s t r e e t
interests."
Do w e understand f r a n that statement t h a t a
charge v a x
made that t h e Governors! m e e t i n g h a d been influenced b y the
oligarchy o f the clearing house?
Mr. Iden: C a n n o t I
itself?
allow the article t o speak f o r
P u t i t i n the r e c o r d here.
The Chairman:
to make a
charge,
w h e n y o u s a y that t h e y were inclined
d o you mean that that w a s a n assumption
of yours t h a t y o u g a t h e r e d f r o m c o n v e r s a t i o n w i t h them,
or
aswas i t a more positive statement, something more t h a n a n
sumption?
Mr. Iden:
T h e positive statements I
always.try t o put
into quotation marks whenever i t c a n b e cone.
The Chairman:
Y o u have made t h e statemeht t h a t t h e pore
ct=
tion o f this article i n quotation marks came t o y o u indire
ly but from a n official o f the Federal Reserve Board.
I
stated that this portion o f the article that
You
have just reaad
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Federal Reserve Bank of St. Louis
18
came f r o m the same source a s the portion quoted i n the
article,
Mr. Iden: I
do not want t o get confused, M r . Strong.
I haven't the article before me, but I am making i t as
straight a s I can, a n d I will stand b y that.
(The article referred t o was thereupon handed t o the
witness.)
Mr. iden:
H a v e you a
The Chairman: I
copy o f this, M r . C h a i r m a n ?
have another c o p y before me.
The
portion t o which I referred i s the last p a r t o f the second
column beginning with the word "nevertheless." I
would like
to ask, i n regard t o that portion o f the article, h o w you
came t o learn that this statement t o which you referred d i d
not assuage t h e feelings o f the more radical members o f the
Board?
Mr. raed E x c u s e me, but I am afraid you will have t o
put that question a
The Slisicdant L
little m o r e clearly.
Wit.
I
t i s stated i n the article
"that t h e G o v e r n o r s w e r e a l l o w e d t o a p p o i n t a
committee,
which committee w o u l d report s a n e t ime next month. N e v e r theless, t h i s d i d not assuage t h e feeling o f those radical
officials o f the Board w h o were inclined t o charge that t h e
Governors!
meeting h a d been influenced b y the oligarchy o f
the clearing house a n d inspired b y Wall Street interests,"
We would like t o know how y o u learned that t h i s action o f
appointing a
committee, a n d s o on, t o report t h e following
month, d i d not assuage t h e feeling o f the radical members
of the Board,
a d h o w y o u leaned that they were inclined t o
charge that this influence h a d been brought t o bear?
W a s
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Federal Reserve Bank of St. Louis
249
19
that b y direct converation w i t h the source,
Mr. Iden: I
have talked with various members o f the
peserve Board, I
of them,
if I
think I
have talked t o practically a l l
remember correctly.
The Chairman:
Mr. Iden:
s o t o speak?
O n this a b j e c t ?
O n every subject.
The Chaivaan:
W a s this article based o n conversations
with those gentlemen?
Mr. Iden:
T h i s article w a s not written, I
until a t least a
believe,
week after t h e whole thing happened. I
carried i t around i n m y head, I
do not want y o u t o obtain
the wrong impression o f that; b u t various things were
called t o m y a t t e n t i o w t b
y various m e m b e r s
the meant ime.
o f the Board i n
A f t e r t h e article w a s written quite a little
information h a s cane t o me.
The Chairman:
D i d y o u submit t h e article t o anyone
before i t was published?
Mr. laden:
N o , I
did not, e x c e p t
t o t h e editor
o f my
paper.
The Chairman:
W e would like t o know h o w you came t o
learn s p e c i f i c a l l y ,
f r o m t h e s o u r c e t o w h i c h y o u refer, t h a t
members o f the Federal Reserve Board were inclined t o
charge that t h e Governors’ meeting h a d been influenced?
Mr. Iden: .
Well, Mr. strong, I
a m afraid y o u a r e trying
ti make m e tell things o u t o f school.
The Chairman:
N o .
W e are n o t going t o t r y t o make y o u
tell a n y t h i n g t h a t y o u d o not t h i n k y o u o u g h t
t o tell.
W
would simply like t o know whether y o u got that directly
from the source o r whether i t was a n fmpression that y o u
e
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Federal Reserve Bank of St. Louis
gathered somewhere?
I n the correct u s e o f the w o r d I
Mr. Iden:
no.
I t i s a n impression I
this subject,
should s a y
obtained b y general covering o f
T h a t i s a slang expression among newspaper
men,
The Chairman: I
understand that.
T h i s article goes
with,
with some detail into the subject that you are dealing
from
and i t n e c e s s a r i l y i m p l i e s t h a t y o u h a v e i n f o r m a t i o n
an t u h o r i t a t i v e s o u r c e .
Mr. Iden: W e l l , I have studied the subject, Mr. Strong.
The Chairman: P e r m i t m e to conclude, please.
D o we
gather that i t i s i n fact a n official source o f information
on which the entire article i s based?
Mr. Iden:
W h y certainly. I
fiction f o r the Journal o f Commerce,
have never written
i f you will excuse t h e
levity there,
The Chairman: I
understand that y o u stand b y the
articé a n d that i t came f r o m a n authoritative source?
Hr. Iden:
O h , yes.
I f I may state, the article
has n o t been officially denied anyway. I
quested t o retract a n y o f it.
have n o t been re-=
I f you will request m e t o
retract a n y o f it, and state wherein i t is incorrect, I
am
perfectly willing t o d o that.
The Chairman: I
am not going t o a s k you t o retract
any correct statement t h a t y o u have made o n official authority, Mr. Iden.
Mr. Iden:
A n y o f it, Mr. Strong;
o r a n y statement t h a t
I have p u t under t h e Washington date line, I
give y o u all
aol
permission, w h e r e v e r y o u s e e a
t o call m y atten=
would like t o have y o u d o that, a n d I
tion t o it. I
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Federal Reserve Bank of St. Louis
Mistake,
om
perfectly w i l l i n g t o h a v e t h e c o r r e c t i o n f u l l y published.
think y o u r e a l i z e t h a t w e a r e e n -
The Chairman: I
titled t o whatever information y o u c a n give u s that i s not
a violation o f c o n f i d e n c e w h i c h y o u f e e l a
newspaper m a n s h o u l
respect, a n d there i s just o n e more question that I
want
to ask you, t o make absolutely clear o u r position i n the
matter,
i n regard t o that same paragraph stating that t h e
radical officials were inclined t o charge t h a t the Governors'
meeting h a d been influenced, a n d s o on,
I s that statement
based u p o n - - =
Iden?
U p o n m y impression.
Chairman:
U p o n cmversations - - =
M y impression,
Iden:
want t o f i n i s h m y question, M r . I d e n ,
Chairman: I
Iden:
O h , excuse me,
The Chairman?
U p o n conversations w i t h members o f ”
officials o f the Federal Reserve Board,
o r did i t came t o
you a s a quotation o r repetition o f conver sat ionsheld a y
other people with the officials?
Mr. Taen:
I n that letter, Mr. strong, i f I answered
in t h e affirmative, I
wrong impression. I
a m afraid that I
should s a y i t w a s m y g e n e r a l i n -
pression o f t h e w h o l e situation.
is a lot that I
have given t h e
Y o u k n o w o f course t h e r e
did not put into this article.
(Mr. Iden here requested that certain names that h e
had used b e stricken f r o m the record.
already been taken b y the reporter.)
T h i s action h a d
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Federal Reserve Bank of St. Louis
The Chairman: I
a m reminded, Mr. Iden, that t h e
positive views about this
members here have aistinet a n d
b e informed whether t h i s
matter a n d they feel w e should
came f r a m general
statement t o which I have referred
were n o t authorized t o speak
conversations w i t h people w h o
authoritative
o r whether i t was i n fact a n
with authority,
members o f the Board o r
statement either directly f r o m
quoted c o n v e r s a t i o n s
o f members
o f the Board w i t h whoever
you got t h e information from?
manner a s
T h a t information came in Like
Mr. Iden:
the quotation which you refer to.
The a
a
e
f r o m t h e menI t did not come directly
Board?
pers o f the Federal Reserve
Mr. Iden:
N o , sir.
I f you will notice, I
word “oligarchy" i i n quotation marks.
used the
T h a t i s a n indication
of it, Mr. Strong.
The i c ienan:
T h e n t h e word "oligarchy"
i s a quoted
source?
word which was used b y the
Mr. Iden: C e r t a i n l y .
The Chairman:
Mr. Iden:
T h e official source?
Y e s , sir.
The Chairman:
o r i n any
I n a written statement,
a t the
time y o u were interviewed
oral statement made a t the
B o a r d i n regard t o this
request o f the Federal Reserve
information h a d not come
article, d i d you state t h a t the
w i t h Governors?
from the Board but f r o m conversation
Mr. Iden: I
statement.
do not remember making that
a r e twist ing-- I
am afraid, though, t h a t y o u
know w h y y o u
293
have that information, Mr. strong. I
a m afraid that y o u
are doing t h e gentleman that y o u refer t o a n injustice.
The Ges irnaas
D o not assume anything about what I
know and d o not know.
Mr. Iden: I
know that, Mr. Strong. I
know where
you g o t that, a n d w h y y o u a s k e d t h e question,
The Chairman;
D i d y o u make a
statement t h a t t h e in-
formation came f r o m a n y o f the Governors, M r . Iden?
Mr. Iden:
T h e information which which y o u asked m e
here?
The Chairman:
T h e information o n which this article
is based.
Mr. I d e n :
O h , yes; t h e information c a m e f r o m the
Governa,
s certainly.
The Chairman:
Mr. Iden:
T h e information c a m e from the Governors?
O h , yes, t h e information w a s i n a typewritten
statement w h i c h w e got f r o m Mr. Cooksie's office.
Mr. McCord:
M a y I ask this question:
T h e Governors
of these banks --Mr. Iden: ( I n t e r r u p t i n g : )I
refer t o t h e Governors!
statement w h i c h w a s g i v e n o u t w i t h t h e c o n s e n t
o f the Feder-
al Reserve Board and I obtained a copy from Mr. Cooksie's
office. I
refer t o that i n the first p a r t o f my statement.
The Chairman:
T h e statement w h i c h w a s given o u t b y
the G o v e r n g ,
s t o w h i c h y o u refer, m a d e n o m e n t i o n o f t h e
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Federal Reserve Bank of St. Louis
subjects discussed i n this article o f yours.
Mr. Iden:
O h , yes, i t does. I
beg your pardon,
to the c a m i t t e e t h a t w a s appointed, d o e s i t not?
I t refey
The Chairman T r u e enough, but--«=
Mr, Iden: (Interrupting: ) T h e statement was all about
the subject o f clearance; t h e r e w a s quite a
good deal i n i t
about clearance,
The Chairman:
H o w about t h e statement contained i n
the article that “officials o f the Board believe t h e
clearing house associations a r e blocking t h e efforts t o have
reserve banks clear checks."
D i d that come from the
Governors?
Mr. Iden:
G h , no,
of the article I
from.
A s I said before about t h e sources
could pick o u t a n d tell y o u where e a c h came
I t came f r o m various sources,
making--
T h e point y o u a r e
i t i s perfectly clear t o m e which point y o u object
to and what particular article y o u object to, a n d I have t o l d
you t h a t I
cannot d i s c l o s e t h a t s o u r c e ,
The Chairman:
T h i s article, I
think y o u will agree,
gave t h e impression t o the public t h a t there i s a fight;
that improper influences a r e being used i n this meeting, a n d
that a
situation w h i c h w o u l d m i l i t a t e a g a i n s t t h e d e v e l o p m e n t
of the n e w banking system has arisen,
T h a t i s the general
impression w h i c h t h e a r t i c l e w o u l d give;
a n d w e want t h e
source o f that.
Mr. Iden: I
did not mean t o give that impression,
I a
not think there i s anything t o militate against t h e success
of the banks, I
rather think, a s I pointed out, the Governor
meet ing lere w a s very successful a n d that the Governors a c canplished that point, w h i c h w a s a very good point.
The Sih abi acs T h e n I understand your position i s that
that article i s simply news which y o u g o t f r o m a n official
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Federal Reserve Bank of St. Louis
209
source i n regard t o differences o f opinions, disputes, a n d
so o n ?
Mr. Iden: E x a c t l y .
T h a t i s the w a y I look a t it. I
am e x t r e m e l y s o r r y t h a t a n y b o d y e l s e h a s p l a c e d a
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Federal Reserve Bank of St. Louis
cifferent
interpretation o n it.
The Chairman:
T h a t portion o f the article relating t o
disputes a n d s o o n did not c o m e from a n y Governor attending
the meeting, d i d it?
Mr. I d e n :
T h a t part which I
Tt came i n the w a y I indicated.
I
know y o u refer t o d i d note
t was not told directly
to me.
The Chairman:
somebody t h a t I
Y o u refer, Mr. Iden, t o something o r
k n o w i n c o n n e c t i o n w i t h t h i s matter.
Mr. Iden: W e l l , I will tell you, Mr. Strong. I
was
told that y o u telephoned t o Mr. warburg o n the d a y the
article appeared,
o n the long distance phone, t h a t y o u were
quite angry a t the article, w a s the w a y i t came t o me. T h e n
I was told that y o u w r o t e a
letter, I
believe,
t o Mr.
Hamlin; t h a t t h e y took i t u p i n a board meeting a n d they
read this article, a n d the Board appointed Mr. Willis,
the secretary o f the Board,
a s a committee o f one t o come
to m e and fina out w h y I wrote i t a n d where I
mation. I
got t h e infor-
talked w i t h Mr. W i l l i s q u i t e f r e e l y because,
you know, Mr. Wiblis u s e d t o b e o n m y paper.
editor o n m y paperfrom the Board. I
4 8
H e was news
H e told m e h e was a committee o f one
said "Well, now, t h i s puts a n entirely
different status o n ite I
do not want anyone t o misinter-
pret m y relations w i t h you, s o I will put m y answer i n
writing, a n d you will have t o let i t g o that way."
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Federal Reserve Bank of St. Louis
The R e c iecen:
Mr. Iden!
W h a t d i d you state i n your answer?
M r . Willis h a s t h e letter. I
will s h o w i t t o you, a n d i f not, I
a m sure h e
will g i v e y o u a
carbon
copy o f it.
The Chairman:
D i d y o u deny i n that letter that y o u re-
ceived a n y o f this information, o t h e r t h a n t h e written
statement, from the Governors?
can g e t y o u t h e letter, a n d i t will answer
Mr. Iden: I
will give i t t o you here. I
the same purpose. I
have a
copy o f i t i n m y office.
The Gisirmans
Y o u s a i d t h a t y o u talked w i t h various
members o f the Federal Reserve B o a r d i n regard t o this
matter f r o m t ime t o t ime.
D o you still believe t h a t t h e
emtents o f this article are true?
Mr. Iden: I
have n o t taken b a c k any o f it, Mr. Strong.
The Chairman: I
was going t o ask you, Mr, Iden, i f
you still believe, a s y o u apparently d i d when y o u wrote
this article, that there was a fight about that.
Mr. Iden:
E x c u s e mé.
T h e r e i s a sincere difference
of opinion among t h e members o f the Board o n this subject
of mimaumema clearance. I
do not k n o w yet whether t h a t
difference h a s b e e n met o r not- I
tomorrow,
hope that t o d a y o r
o r whenever y o u meet w i t h the Board, t h a t t h e y
will f i n a l l y s e t t l e i t properly.
The Baa t reer
Y o u h a d authorit ative sources o f infor-
mation which convinced you, before youwrote this article,
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Federal Reserve Bank of St. Louis
that a n official o r officials o f the Federal Reserve Board
believed that t h e N e w York bunch was trying t o vitiate
the effectiveness o f the n e w banking law?
Mr. Iden: I
did n o t believe that.
The b a c a e a I
thought y o u had official source f o r
that iivecnakion a n d believed that t h e Governors’ m e e t i n g
had b e e n i n f l u e n c e d b y t h e o l i g a r c h y
o f the clearing houses,
and s 0 On.
Mr. Iden: I
The
E S
did not believe that.
Y
o
u d i d not believe i t ; b u t y o u had
official sanction f o r t h e statement o r a n official source f o r
the statement t h a t s a m e o f the H e t c r a Reserve Board d i d
believe i t ?
Mr. Iden:
Y e s , sir; i t made a good story, I think,
But y o u a l l p a r d o n t h e levity.
The Sissiates G o v e r n o r Wells calls m y attention t o the
fact t h a t t h i s a r t i c l e w o u l d c l e a r l y c r e a t e t h e i m p r e s s i o n
that t h e r e w a s a
difference
o f opinion between t h e b o d y o f
the Governors a n d the Federal Reserve Board,
o r some part
of the Federal Reserve Board, a n d that ehere w a s a n official
source o f information u p o n w h i c h t h a t s t a t e m e n t w a s b a s e d
as made i n the article.
I s that a correct assumption?
That i s , t h a t y o u h a d a n official s o u r c e o f i n f o r m a t i o n
of such a difference o f opinion between t h e Governors a n d
some o r all o f the Federal Reserve Board?
Mr. Iden: I
was a
difference
knew positively, Mr. strong, that there
o f opinion, a
serious d i f f e r e n c e
ion, o n the clearance o f checks.
o f opin-
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Federal Reserve Bank of St. Louis
Y o u knew that posit ively?
The Chairman:
Mr... lden:i- O h , yes.
A n d had authoritative information o n
The h s n a n :
the subject?
Mr. Iden:
O h , yes.
A n d n o t f r o m a n y o f t h e Governors?
The Chairman:
Mr. Iden:
N o , site
T h a t t h e r e W a s a n issue i n fact between
The Chairman:
the Federal Reserve Board,
o r sane o f the Federal Reserve
Board, e n d this body?
Mr. iden:
D o e s this article make i t a n issue?
O r ,
does i t just point o u t that there i s a radical difference o f
opinion?
R e a d t h e sub-title, a n d see i f i t does not
Mr. Curtis:
say s o m e t h i n g a b o u t that.
Mr, Iden:
Mr.
Y o u are correct there.
T h a t s a y s that t h e Reserve Board w a s a t
Seas
issue with the Bank Governors, does i t not?
Mr, Iden:
T h e t i t l e does; b u t i n t h e newspaper w o r l d
we refer t o the b o d y o f the article,
ften y o u h a v e s e e n a r t i c l e s
a s you know.
Quite
i n newspapers w h e r e t h e h e a d -
line gave a n absolutely wrong impression.
t h e h e a d line f o r this?
The Chairman:
D i d youwrite
hir. Iden: I
sometimes write t h e headlines a n d some-
times d o not. I
could not say a s to this- I
am a very poor
writer o f head lines, a n d when I do attempt t o w i t e one they
always c h a n g e i t i n t h e office.
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Federal Reserve Bank of St. Louis
I
The Chairman:
See.
f you wrote t h i s headline i t expresses
U n r e s t
thet—earacraph o f the article, d o e s i t not?
f i
T
Mr. Iden:
wrote i t s I
think i t i s just a
I do not know. I
words,
could n o t s a y a s t o t h a t
pareing o f
i s i t not?
want t o call your attention t o the
The Chairman: I
-—
fact, i f you did not write it, that some one of your staff,
who read the article, d i d write i t a n d h e has expressed
his impression o f the article which y o u wrote.
I s not t h e word “issue" there--
Mr. Iden:
an issue after a l l just a
Chairman:
debate?
Y e s ; t h a t m a y be.
W e have t h e m u p i n Congress a l l t h e time.
Iden:
Chairman:
W o u l d a n y o f the other Governors l i k e t o
ask Mr. I d e n a n y questions?
ing u s a
Mr.
W e appreciate that h e i s s h o w
i n subjecting h i m s e l f
courtesy
e e
i s not
t o questions.
want t o b e p e r f e c t i y frank. I
I
a m very
willing t o answer a n y question which the Governors c a r e t o
ask m¢e
The Chairman:
D o youcare t o make a n y additional
statement?
Mr. Iden:
N o , sir: I
would make t h i s request. I
not g u i t e u n d e r s t a n d t h e o b j e c t
suppose
do
o f c a l l i n g m e here, b u t I
i t i s t o u s e m y t e s t i m o n y f o r s o m e purpose.
The Chairman: I
will explain t h e object t o you before
you leave t h e room.
Mr. Iden:
I f that i s the case I
over before y o u use i t e
would like t o look i t
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Federal Reserve Bank of St. Louis
The Chairman:
any p r o c e e d i n g
Mr. Iden:
I
t i s not o u r intention t o use i t f o r
o r anything
o f that sort.
W o , o f course I
did not mean that y o u
would u s e i t i n a proceeding.
The Chairman:
W e may u s e it, a n d i f y o m would like t o
look i t over y o u are a t liberty t o d o so.
Mr, Iden: I
would like t o d o that.
Mr. Seay: I
would like t o allude t o o n e point.
T h e
article s e e m s t o c o n v e y t h e i m p r e s s i o n t h a t t h e r e w a s a
pronounced o p i n i o n o r p o l i c y p r o m u l g a t e d
b y t h e Governors,
in that the article s a y s “there i s a n issue o n the policy
between certain radical members o f the Board a n d the
Governors,"
S o far a s I recall t h e object o f the Governors
was t o study t h e question.
Mr. Iden:
Mir. a i a
Exactly.
a n d the point w a s not reached where a n y
definite policy w a s man ifested- T h e r e f o r e I
do not under-=
stand h o w the radical element could have gathered t h e opinion t h a t t h e r e w a s a n issue b e t w e e n U S .
Mr. Iden: I
Mr. Seay:
see your point, I
believe.
I n other words, h o w d i d the radical element
become advised o f the fact that the Governors, a s a body,
had certain pronounced opinions a s t o w at s h o u l
o r should
not b e done?
Mr. Iden:
T h e Governors a l l h a d the opinion that
nothing should b e done until this matter w a s studied.
That
was a n t e w o L a c y .
Mr. Seay:
C a n you s a y that the o t h e r s w e r e
o f an
mm opinion that something should b e done before i t was studied?
Mr. I d e n ?
T h e others were o f the opinion that t h e y
knew nothing about it, I
The Chairman:
imagine.
G o v e r n o r McCord wishes t o ask Mr. I d e n
a question.
Mr. McCord:
T h e o n l y question I
suggested w a s b r ought
out b y Governor Seay, a n d that w a s a s t o a direct issue between t h e t w o Boards a t that particular meeting touching o n
this p a r t i c u l a r s u b j e c t .
The
e s a s
W a s i t covered b y GovernorSeay's gues-
tion?
Mr. VeCord: G o v e r n o r Seay's questions covered it.
The S h a v e s
T h e gentlemen attending this meeting
appreciate t h e f a c t t h a t y o u h a v e c o m e h e r e a s a
courtesy, M r , Iden:
matter
of
T h e y have a l l very decided views i n ree
gard t o the attitude o f the press towards t h e work that t h e y
are doing.
W é d o not want t o incur t h e animosity o f the
press a n d w e w a n t n o d i f f i c u l t y w i t h t h e p r e s s
else.
o r with anyone
W e want t o stay about o u r business a n d get i t com-
pleted,
Mr. Iden: I
The Chairman:
and I
think t h e p r e s s w i s h e s
t o reciprocate,
W e want t o make that clear t o the press,
have a s k e d t h e r e p r e s e n t a t i v e s
here, because w e are going t o make a
o f the press t o come
statement t o them,
Will you stay, Mr. Iden?
Mr. Iden:
Y e s , sir. I
wish t o s a y t h a t I
for y o u r courtesy.
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Federal Reserve Bank of St. Louis
The Chairman:
W
e a p p r e c i a t e y o u r courtesy.
thank y o u
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Federal Reserve Bank of St. Louis
(Whereupon t h e r e p r e s e n t a t i v e s
o f the p r e s s w e r e i n e
vited i n t o t h e C o n f e r e n c e r o o m , a n d t h e f o l l o w i n g p r o c e e d i n g s
took place:)
The Chairman:
T h e object
o f asking t h e representatives
of the press t o meet u s here today i s t o make a
in r e g a r d t o t h e a t t i t u d e
statement
o f the press generally toward t h e
work that t h e Governors o f the Federal Reserve Banks a r e
doing,
a n d particularly
t o r e f e r t o a n a r t i c l e t h a t ap-=
peared i n the Journal o f Commerce, following t h e last meeting o f the Governors i n Washington, w h i c h w a s hela Secenies
10, 1 1 and 12. T h a t article was published o n December 21st.
Mr. Iden, w h o wrote t h e atticle, h a s been goal enough
to s t o p h e r e t h i s m o r n i n g a n d make s o m e e x p l a n a t i o n s
regard t o it~
in
I t has been considered b y the Governors o f
the Reserve Banks, a n d they a r e unanimously o f the opinion
that i t w o u l d b e u n w i s e t o p e r m i t t h e p u b l i c a t i o n
of
articles o f that character without challenging them, a n d a
statement h a s been prepared which will have t o b e revised
somewhat, i n view o f the statement that Mr. Iden has made;
it w i l l b e r e v i s e d a n d w i l l b e g i v e n o u t t o y o u l a t e r
the day,
in
o r p o s s i b l y tomorrow.
Before reading it, a s I intend t o do, 1
want t o make
this statement,
The m e n w h o have taken their positions w i t h t h e
Federal Reserve Banks have done so, without exception, a t
personal sacrifice t o d o sane work that t h e y think they
ought t o do, t o get this banking system started properly o n
a sound basis.
T h e y a r e doing i t without selfish o r
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
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Federal Reserve Bank of St. Louis
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Federal Reserve Bank of St. Louis
porters o n e o f them steted
secretary o f the meeting
v
a
s current
Washington t h a t a disagreement e x i s t e d
ters, particularly t h e collection matter, a n d
subject.
Mir.
Curtis d e n i e d emphatically t h a t a n y such disagreement h a d
arisen s x i s t e d
T h e following (that is, Saturday)
written statement was given to t h e press w h i c h
morning, @
was t h e o n l y statement o f a n y kind given b y the
eentieman w h o wrote t h e article h a s admitted
it was a
fabrication" - - ttement I
ir. Iden:
O h , NOs
The Chairmen:
effect, I
understand i s not correct?
A l t h o u g h our
want t o make t h e statement accur
fy
tlicand t h a t t h e i n f o r m a t i o n d i d n o t c o m e f r o m t h e
Federal R e s e r v e B o a r d a n d h a s c l a i m e d t h a t h e g o t i t f r o m
lr. Strong.
H e rece
1
0 informatio
Strong, except that which was handed him i n writing,
that w a s g i v e n b y Mr. C u r t i s . "
not p r e s e n t
at
had with a n y reporter, w h i c h occurred Friday
ment contéined
was h a r m o n i o u s
i n every possi
of t h e G o v e r n o r s w i t h t h e F e d e r a l
Reserve Board
harmonious
"Portions
o f the artic] e f e r r e d t o were
parts o f the country.
T h e extent t o which i t may
ejudiced public opinion i n regard t o t h e Fed
& matter o f cor
ficers o f these b a n k s have many o f them undertsken t h e
banking system a t considerat
not intend that their efforts
newspaper p u b l i c a -
tions.
T h e Governors
ment denying absolutely t h e contents o f
to w h i c h w a s p u b l i s h e d
i n the Hournal
o f Commerce,
and
this means o f expressing their intention o f informing t h e
public, throug e
press,
o f the true facts
i n regard t o
statements o f this c h a r a c t e d which e r e hereafter brought t o
heir a t t e n t i o n
a nf
t h e i r further i n t e n t i o n t o prosecute
any newspaper, w h i c h publishes anything o f a character f o r
which i t can b e prosecuted, under t h e law."
That statement w i l l b e revised,
a s i t must b e , after
ering Mr. Iden's statement, a n d the object o f reading i t
to y o u gentlemen i s t o express t o y o u directly, f a c e t o
face, t h e intention o f these gentlemen t o d o their work
without unwerranted interference a n d without permitting
as improper a n d
y would regard tomapmemmmimmiinm incorrect statements
Slleged facts t o appear i n the press.
I think I will correctly voice t h e sentiment.
member o f this b o d y when I
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Federal Reserve Bank of St. Louis
o f every
say that t h e y appreciate t h e
never=
they
Commerce.
the afternoon
from what y o u have s a i d that t h e statemay not b e ready f o r u s i n time.
i},
The Chairmen:
i
aS
or i yI
a m going t o a s k that
you d o n o t publish i t i n the afternoon papers i s that
ir. I d e n t o have a n opportunity t o convey t o his o w n paper
before i t appears i n the other papers.
T h a t seems t o u s t o
be a courtesy t o wiich h e i s personally entitled, although
that c o n f i r m a t i o n f r o m
is o f the contents o - a t a r t i
i
t did not appear neces-—
sary f o r u s t o g o t
this statement t o you.
A Newspaper Representative:
H a v e
steps t o shut o f f
future, a n d what steps t o take?
matter, a n d merely s a y that I have absolutely n o experience
with newspapers o r d o I know h o w t o d o anything with regard t o newspapers.
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Federal Reserve Bank of St. Louis
A-Newspaper Representative:
w h a t I
was that perhaps a f t e r every meeting o f the Conference,
ome sort o f a statement c o u l d b e made u p o n which t o base
it w o u l d e l i m i n a t e a
Chairman:
great d e a l o f speculation.
D o y o u mean after this meeting o f the
Board o f Governors?
A Newspaper Representative:
thing that w e are considering h e r e now, t
I
mean
Treasury Depertment o r a t any other time.
At o u r first meeting o n the 10th o f
stion u p and t h e wishes o f those
present were cons ;
n d they decided t h a t i t would b e
inadvisable t o have a n y misunderstanding a s t o the information t o b e given out.
should
W
e agreed among ourselves that
the information miimhim b e reduced t o writing and given out
at the conclusion o f the meeting.
T h a t w a s done.
W e
with t h e p r e s s
thought that w e were dealing fairly mamingiwenmom®
i n pre-
atements that were accurate a n d giving them a l l t h e
given them, and that they would respect our
attitude and not speculate i n regard t o what hed been done.
A Newspaper Representative:
W h e n a board o f
portance comes t o Washington a n d holds extensive meetings,
slmost impossible t o prevent something being published
in t h e papers.
T h e p a p e r s a r e a n s i o u s f o r t h e information.
Our suggestion i s that i f you could notify u s a t t h e close
of-your sessions,
i n a general way, o f what subject were
under consideration, w h a t progress h a d been made, i f any,
greatly appreciated. I
do not think i t
would b e necessary t o g o into details w h e n y o u have n o t
reached a n y conclusion.
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Federal Reserve Bank of St. Louis
The Chairman:
O
f course y &o u r e a l i z e - - - a n d I
sure
am moh
270
you d o ~-- that a good many o f t h e matters t h a t are discussed a r e n e c e s s a r i l y m a t t e r s
no newS value a t all.
n
o f trivial d e t a i l t h a t h a v e
e Other hand, t h e more impor-
tant m a t t e r s a r e t h o s e which a r e s i m p l y t e n t a t i v e l y <dis-
sed, o r matters which w e have n o power o r authority t o
decide b u t must submit t o a
decision o f the Federal Reserve
mm i t would b e i m p r o p e r a n d discourteous.
to
make a n y statement w i t h regard t o those matter
until they h a d taken action o n them.
W e will endeavor t o
meet the views o fad t h e press i n giving information that i s
proper
t o g i v e j u s t a s c o m p l e t e l y a n d a c c u r a t e l y a s possible.
A Newspaper Represe!
T
h
e
t i s all that c a n b e
asked, o f course.
The Chairman:
W
e want t o ask o f you gentlemen
when we say we cannot give information about a matter,
you d o n o t i n d u l g e
37
i n what c o u l d f a i r l y b e d e s c r i b e d a
reoklese speculation about things that d i d n o t occur.
A Newspaper Representative:
Department i s publicity.
T h e policy o f the Treasury
I f w e could get something f r o m
a definite source afte e
be n o more conjeéture. A
o f these meetings, there would
man o n l y writes random stories
you might call them, w h e n h e i s unable t o g e t direet information from m e n i n authority.
The Chairman:
T a k e a s a n illustration t h e meeting w e
are holding here now. T h e r e a r e a . good many matters connected with this n e w bank l a w that are n e w and that require v e r y
extended discussion a n d concerning which very honest differenées o f o p i n i o n m a y arise.
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Federal Reserve Bank of St. Louis
I
t i s the spirit
o f the m e n who
are d e a l i n g w i t h t h e p r o b l e m t o w o r k i t out.
T h a t i s what
we are here for, I t would b e highly impropér f o r u s t o discuss matters t h a t are i n course o f analysis, a n d which w e
are trying t o work out, before w e have arrived somewhere
with them,
A Newspaper Representative:
what y o u c a n tell us. I
Y o u must b e t h e judge o f
merely suggested that after e a c h
meeting y o u will meet w i t h u s for a minute.or t w o a n d tell
us What y o u c a n tell us.
not a t t e m p t
t o g e t t h e news f r o m some outside source,
fhe Chairman:
followed
I f you will d o that when w e will
D o y o u not think that t h e procedure
i n Washington
a t t h e last meeting w a s perfectly
fair i n that respect?
A Newspaper Representative:
V e r y fair, a n d i t w o r k e d
out all right, except that w e had a great deal o f difficulty
in getting t h e statement prepared f o r us.
T h e Pederal
Reserve Board s a i d they had n o authority t o make i t public
and the Secretary o f the Treasury s a i d h e could not make i t
public.
Mr, Curtis: I
on t h e m a c h i n e
remember t h e statement w a s mimeographed
o f t h e Pederal Reserve B o a r d a n d t h e y h a d
at least forty o r fifty copies which I personally handed
to s o m e o f t h e g e n t l e m e n h e r e p r e s e n t
A Newspaper R e p r e s e n t a t i v e :
i n t h e room,
Y o u d o n o t understand
the f e a r u n d e r w h i c h e v e r y m i n o r e m p l o y e
Dr. Willis I
u p t h e r e works.
believe h a d those statements a n d h e refused t o
give t h e m out o n the ground that i t was n o t a publication
by t h e Board.
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Federal Reserve Bank of St. Louis
H e s e n t t h e m t o t h e S e c r e t a r y o f t h e Treasury.
They r e f u s e d t o t o u c h t h e m t h e r e f o r f e a r t h e y m i g h t b e
contaminated a n d s e n t t h e m b a c k t o t h e S e c r e t a r y o f t h e
Board.
T h e Secretary o f the Board thereupon sent them back
to t h e S e c r e t a r y o f t h e Treasury. I
was r u n n i n g b a c k w a r d
and forward there trying t o get o n e o f them t o let m e steal
one, I
finally g o t one after t w o hours o f argument.
They
finally locked t h e m i n a drawer a n d took t h e key, a n d
Governor Hamlin himself went over a n d g o t a copy a n d brought
it back.
Mr, Curtis:
O f c o u r s e y o u u n d e r s t a n d t h a t Mr. W a r b u r g
had invited m e t o g o t o lunch with h i m and I couldn't stand
there a t the door o f the building a n d hand t h e m out.
The Chairman:
W e have n o offices here a n d n o machinery
with w h i c h t o c o n d u c t a n y business.
. take a record o f our proceedings,
W e employ someone
to
a n d when our meeting i s
over w e bundle u p our papers a n d g o back home.
I t will
be necessary for you gentlemen t o assist u s i n getting the
information properly t o the press. I
someone r e p r e s e n t a t i v e
would suggest t h a t
o f t h e press b e nominated
b y you t o
get such written statenent a s w e make, a n d then i f the
representatives o f the press would like t o have a n interview
or would like t o take u p some particular part o f the statement, l e t u s arrange i t b y appointment.
Y o u possibly d o
not r e a l i z e i t , b u t t h e s e m e e t i n g s h e r e i n W a s h i n g t o n
start a t t e n o ' c l o c k
i n the morning a n d d o n o t stop until
twelve o'clock a t night, a n d i t i s difficult t o find time
in which t o prepare a
long interviews,
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Federal Reserve Bank of St. Louis
statement, a n d much less t o have
A Newspaper Representative:
W h e n c a n w e get this
revised statement, a n d how?
The Chairman:
W e will t r y t o have i t here a t five
o'clock this afternoon.
I t i s possible t h a t w e m a y b e de-
tained i n the Treasury Department building this afternoon
until later.
Mr. Iden:
W
e w i l l d o t h e b e s t w e c a n t o g e t i t ready.
W h y not make i t tomorrow morning a n d make
certain o f it.
The Chairman:
Perhaps
w e w i l l h a v e t o d o that.
W e will
try t o get i t a s promptly a s possible.
A Newspaper Representative:
M a k e t h e h o u r certain,
Put i t a t a n h o u r t o m o r r o w m o r n i n g w h e n y o u k n o w t h a t y o u
will b e ready.
Mr. Curtis: I
assume t h a t t h e g e n t l e m e n w h o r e p r e s e n t
the morning newspapers would rather have i t this afternoon.
A Newspaper Representative:
I t i s under release, a n d
it wouldn't m a k e a n y difference.
Mr. Curtis:
W e c a n have i t this afternoon.
A Newspaper Representative:
I f y o u have i t ready a t
five o'clock this afternoon that will b e i n plenty o f time.
after
The Chairman: H o w would i t d o t o have i t ready mbmnaihfi
mammh dinner this evening? S u p p o s e w e have i t ready a t half
past six,
I f i t i s not ready then w e will have t o let i t
go over until tomorrow morning,
A Newspaper R e p r e s e n t a t i v e :
D o y o u care t o have a n y
mention o f this conference made?
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Federal Reserve Bank of St. Louis
The Chairman:
I t seems t o m e i t would n o t b e wise,
although I
have n o t d i s c u s s e d
Mr. McCord: I
i t w i t h m y a s s o c i a t e s here.
think i t would b e better t o hola i t
in abeyance until t h e statement i s ready, because t h e wrong
impression m a y g e t out.
The Chairman: I
think that would b e wiser.
We v e r y m u c h a p p r e c i a t e y o u r courtesy, g e n t l e m e n ,
(Thereupon t h e n e w s p a p e r n
e
m retired f r o m t h e Conference
room, )
The Chairman:
I s i t your desire, gentlemen, that w e
should g o over this statement again a n d complete it, thereby
getting i t behind us?
(Whereupon informal discussion followed with reference
to the press notice.)
Rds f l s
12 o c l o c k
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Federal Reserve Bank of St. Louis
ussion;
o r w e c a n g o ahead
7 of the items suggested b y the
Reserve Board.
T h e next o n e i n
the regulations regarding acceptan
ived from the Federal Reserve B o a r
set o f the regulations respvecting acceptances.
now
any p o i
I c a n f u r n i s h t h i s meetir w i t h t h e o p i n -
councel o n that subject.
The Chairman:
O f acceptances?
Nias
Mire Chairman, w h a t a r e t h e o b j e c t i o n s
occurr t o you?
Mre W o
M
a
y I
inguire, Mr. Chairman, f i i t i s customthese acceptances,
The Chairman: A
i
custom,
in this country t o speak o f now.
t o have three parties
f o course w e have n o custom
T h e custom abroad I think
might fairly b e stated t o include not only the endorsement
as provided i n this reguletion, b u t possibly more t h a n o n e
endorsement. I
mean t o s a y
London, f o r instance,
h e c i r e u j a t i o nf
o bills
i n
i s s o free betireen t h e discount houses
and the banks, t h a t they accumulate a
good many endorsements
in the course o f
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Federal Reserve Bank of St. Louis
Mr. Wold:
B u t w h e n they are first offered,
i s i t neces-_
to have t h e drawer, t h e acceptor, a n d a n ecdorser?
The Chairman:
Y o u cannot s a y exactly, Governor Wold,
that there i s a custom prevailing o n that point.
standard established b y custom a s t o what the Bank o f Imgiand
does, a n d the Bank o f England's
invarisble one, I
c o m , aithough i t i s not a n
understand i s t o require t h a t bills which
they b u y bear the obligation o f t w o English concerns, maker,
acceptor, o r endorser.
T h a t i s t o say, i f the Guaranty
Trust Company d r e w a bill o n the Guaranty Trust Company o f
London, being simply a branch office, t h a t bill would n o t b e
accepted b y the Bank o f England, e v e n with o n e English e n dorser, f o r discount.
O
n the other hand, i f the Guaranty
Trust Company should d r a w a bill o m the London City a n d
Midland Bank, a n d i t h a d the acceptance o f the London C i t y
end Midland Bank, t h e n i t woule b e discounted, with t h e en-
dorsement o f the discounting concern, with the Bank o f England.
Mr. Wold: T h e a t would b e two.
The Chairman:
T h a t would b e two; that i s tosasy, two
English obligations.
Mr. Aiken:
S U P T
h a t is t h e basis for the require-
ment o n the first page, that one endorsement must b e a member
bank.
member b a n k s ,
o r registered t r u s t companies,
o r bankers,
o n
the bill.
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Federal Reserve Bank of St. Louis
The Chairmen:
Y e s e
Mre QO. Wells:
N o , n o t two.
The Chairman:
Y e s s
Or registered banks.
Not a s endorsers, b u t a s varties, virtually.
Could i t not b e somebody else
Suppose i t i s
The Chairman:
T h i s p r e a m b l e provides t h a t t h e accept-
that m a y b e purchased a r e confined t o t h e c e p t a n c e s
names appear o n the list, s o
O. Wells:
I t says o n e endorser must b e a member
registered n o n - m e m b e r b a n k o r t r u s t c o m p a n y ,
or
red p r i v a t e f i r m - - - o n e endorser.
The Chairman:
T h e acepetor m u s t a l s o b e a
registered
It seems t o m e i t discourages acceptances,
encoureging theme
« Wells:
M r . Chairmen, I
have n o t found t h e
language where i t says t h e acceptor must b e & member bank.
I had supposed t h e word “acceptor” might m e a n a n English
firm, o r a n American firm, i n the case o f importations.
Would n o t such a one b e eligible under t h e language?
The Chairmen:
firms a n d institutions w h o desire t o have their acceptances
eligible f o r discount must f i l e a n application.
Mr. O « Wells:
ceptance.
T h a t does n o t necessarily mean their ac-
I t means acceptances which they m a y own, w h i c h
they are handling.
e We
o
r, i t m e a n s tMh e i e c e p t a tn c e .
The Chairman:
n e a n s t h e i r acceptance.
N
Wells:
workable,
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Federal Reserve Bank of St. Louis
4.3
T h e n this language i s absolutely non-
i n that case.
I t i s exceedingly restrictive.
The Chairman: I
ean tell y o u just about what t h e situa-
t i o n is i n New York n o w i n regard t o acceptances.
There
are possibly a dozen private firms, banks a n d trust companies,
that are accepting i n connection with principally foreign
commerce.
T h o s e bills a r e presented
b y the holder t o t h e
bank f o r acceptance,and t h e n are sold b y the holder through
brokers.
S o m e o f t h e m b e a r endorsements;
m o s t o f t h e m d o not.
Most o f them are simply t h e obligation o f the drawer, m a d e
payable
t o h i s o w n order, e n d o r s e d
i n blank b y the drawer
and accepted b y the accepting institution o r firm.
T h e y are
being very largely purchased n o w b y banks i n New York City,
a great m a n y millions o f them, a n d the o n l y w a y i n which t i m
we c a n b u y them today i s from t h e broker w h o handles them, b u t
who d o e s n o t e n d o r s e them.
Consequently,
until t h e money
actually changes, a n d when i t does change, until t h e rate f o r
bank acceptances i s below the rate f o r call money o n the N e w
York Stock Exchange, w e could never get any ecceptance that
would comply with t h i s regulation, because n o n e o f them would
be endorsed.
T h e y w o u l d h a v e t o b e p u r c h a s e d f r o m t h e broker,
and could not b e purchased f r o m the banks.
Mir. Fancher:
A n d t h e y would n o t come within this regu-
latiom.
The Chairman:
A n d they would n o t come within this regu-
lations
Mre O . Wells:
U n l e s s t h e broker were a
member
of a
banking firm.
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Federal Reserve Bank of St. Louis
The Chairmen:
Mr. Wold:
Y o u c o u l d n o t e v e n b u y t h e m then.
H e could not b e registered unless h e was
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Federal Reserve Bank of St. Louis
suthorized
T h e broker c o u l d n o t b e
t o accept.
accept.
The Chairman:
as I
G o v e r n o r Wells, t h i s regulation,
ioe
b
should b e a list
read it, contemplates, first, t h a t there
of registered houses a n d institutions.
T h e n i t provides that
the bills which w e m a y b u y must bear t h e obligation o f a
drawer, a n d o f a n acceptor w h o i s one o f those registered a c -
Wells:
O r a membere
The Chairman:
4 n d a n endorser w h o i s also o n e o f those
registered a c c e p t o r s ;
o r the endorsement
o r acceptance
of a
member bank.
Mre O «
Mr. Aiken: I
your judgment,
would like toask, M r e Chairman, i f , i n
i t would b e prudent t o allow u s t o buy ace
ceptances w i t h t h e name o f but o n e registered acceptance house
or bank o n it, a n acceptance i n the f o r m i n which w e see
them often i n Boston now, without t h e name o f a seond registered acceptance house o r bank?
D o y o u not think that y o u a r e just a s
The Chairman:
well p r o t e c t e d
i n p u r c h a s i n g p a p e r m a d e b y a n obligor,
accepted b y a responsible acceptor,
paper made b y a borrower f r o m a
a s youare
and
i n discounting
member bank, a n d endorsed
by the member bank?
Mr. Aiken: I
submit m y judgment
think so, myself;
t o y o u r s u p e r i o r e x p e r i e n c e a n d knowledge.
Mr. Chairman, I
CAaSe. S u p p o s e a
b u t I was preparing t o
want t o present a
concrete
manufacturer o f shoes i n Atlanta should
purchase leather i n South America --- Buenos Aires --- and
one o f the banks i n Atlanta, w i t h a million dollar
(I believe t h e y c a n n o t a c c e p t u n l e s s t h e y h a v e a
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Federal Reserve Bank of St. Louis
dollars c a p i t a l , u n d e r t h e law) s h o u l d a c c e p t a
million
draft.
Wovld
this preclude t h e Federal Reserve B a n k i n Atianta f r o m pur-
chasing that bill?
place, Governor McCord, I
a
w eliminated i n the
lar l i m i t a t i o n s
heay:
I t was.
A l l right.
MeCord:
The Chairman:
L e t u s eliminate that.
B u t t h a t bill would b e drawn b y a shipper
of hides i n Buenos Aires, a n d bear the obligation o f the
Shipper;
t h a t i s , it. w o u l d b e a
Mre« MeCord:
draft d r a w n a g a i n s t a
credit
Yes.
The Chairman:
I t would t h e n bear t h e obligation o f
in Atlanta which accepted
Mr. McCord:
Y e s e
A n d y o u w o u l d b u y i t , probably,
The Chairman:
broker,
from
o r f r o m s o m e t h i r d party.
MeCord:
Y e S e
Chairman:
A n d i n order t o b e able t o b u y i t under
the t e r m s o f this r e g u l a t i o n ,
i t would a l s o h a v e t o b e a r t h e
endorsement o f a member bank, o r o f one o f these registered
institutions
o r firms w h o a r e a u t h o r i z e d t o accept.
Nr. MeCord:
T h a t means
n o business.
Yes, sir.
Tt m e a n s t h a t s u c h a c c e p t a n c e w o u l d b e
sent t o N e w
selves.
i n s t i t u t i o n s , w h o will b u y them them-
T h e reserve b a n k does n o t get them.
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Federal Reserve Bank of St. Louis
Mr. M e C o r e é
not
b u y
of C h a r l e s t o n a c c e n t e d
same
it r e q u i r e d a l s o t h e e n si
mber bank. I
stated
place that acceptance w i t h a
buy i t and
DO
ess c o m e
t o us, a l t h o u g h w e m i g i
d o
a)
good deal o f its
in Atlanta would n o t b u y
because
for o t h e r p u r p o s e
permitted
to
acceptance;
os
Chairman, I
would l i k e t o a s k G o v e r n o r
could n o t have accepted t h e t acceptance
4.
ceptvances
Om o f
member
member b a n k . "
revresented o u r views
a l l points b u t one.
Warburg contended that acceptances bearing t h e acceptance o f
member banks should b e purchased without a n y entorsement,
that a e c c e v t a n c e
2 2 3 8
m e r s . 8
noble
e n d o r s e d .
the object t o
ances w a s t o m a k e a
broad. market f o r acceptances,
egy= T y o F
Ga v o p P
thing that would b e dealt i n e t l o w mmhmam a n d that
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
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https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
endors
424,
the
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a
r a t e
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tance
r e
ir. A i k e n ?
The C h a i r m a n
vintage here.
wrote ;
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preat a n d e x h a u s t i
7
one t h a t h a s j ed
u s t been handed t o
the o n e o f I] n b e r 22nd w a s based
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Federal Reserve Bank of St. Louis
files.
Pea
e e
VAAL P M E
S0th t o
*
C
Lo.5 y
a
further
r
e
f
a,
e later nee
d
Ling:
proces
andA nLu mLb e
Ar
fers
e
nvo t a s ehe h
e f r o m t h e Fme d e
McCord:
r
a
am wonderin
Roard.
I t came i n here yesterday.
While y o u w e r e o u t o f
Chairmen:
with a f 1
y
o
of report, quite a
u have also b e e
long form, that
the 17th o f December, which w e estimate required u
tuoba
about thirty-five calculations o f averages.
whether t h a t h a s b e e n w i t h d r a w n
i n favor o f t h i s p r o p o s e d
port i n very brief f o r m o r not.
Mr. Aiken:
M r . Chairman, t h e longer report w a s for
banks, outside. o f reserve cities.
T h i s short o n e
for reserve c i t y banks only.
« Use W e l l g
i
I s the l o n g o n e still intended t o ob-
i want t o e n t e r m y protest.
Rhoades: I
second that.
O. Wells: I
protest
assume e v e r y G o v e r n o r h a s
o f some degree
will have t o thrash o u t later a s individuals, r a t
this mamhinhag meeting, u n t i l w e have something definite?
The Chairman:
Y o u ask a
question t h a t i s i n m y m i n d
a |
strongly,
a b o u t this particular f o r m o f statement. I
=
e v e i l e bi
t h a t w e c a n make v e r y m u c h progress
i n making
a form o f statement,
by m a k i n g a
general s t a t e m e n t
we
posed form, w h i c h I think, wiiia all regard a s too long, e x pensive,
a n d cumbersome;
a n d that i t will b e regarded
b y
member banks a s a really r i o u s annoyance i n the expense i t
o n them to prepare it,
a
l i a t n e u
based u p o n a
O u r feeling i n New York
v e r y f r e q u e n t l y e x p r e s s e d complaint,
that
the b a n k s a r e n o w b e i n g c a l l e d u p o n a t
all sorts o f unex ecte
texts
ed times for statistical information o f all kinds
that tekes
up t h e i r o r g a n i z a t i o n a n d i n t e r f e r e s with
t hv e i r work,
T h e y
have cheerfully complied, a n d will continue
t o d o sO, b u t t o
impose u p o n t h e m t h e n e c e s s i t y o f
preparing a
=
weekly s t a t e -
ment o f t h i s m a g n i t u d e J u s t now,
w h e n their feclings a r e more
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Federal Reserve Bank of St. Louis
or less strained anyway, I
t
think would b e a
serious
i s t ah e s u b h
stanceT o f
+
6)
order t o b r i n g t h e d i s c u s s i o n . t o a
em t o b e t w o o r t h r e e p r i n c i p l e s
that w e o u g h t t o c o n s i d e r
xecommendation.
the amount.
i n submitting a
O n e i s the length o f the statements a n d
o f i n f o r m a t i o n required.
to make a
i n regard t o
i n a m D o e s someone c a r e
motion i n the nature o f a general recommendation
in r e g a r d t o t h e f o r m o f t h e s t a t e m e n t ?
Mr. McCord: I
I could g e t a
would like t o make a
motion,
i f I thought
second a r o u n d t h i s board, t h a t t h e s t a t e m e n t
offered f o r reserve c i t y banks
w e believe short, concise
aoi
and satisfactory,
T h e Late statement f u r n i s h e d t o us, f o r
banks outside o f reserve citiesg i s too complicated for the
purpose;
t h a t t h e Governors
a e e x p e r i e n c i n g considerable
difficulty i n getting a n y response, o n account o f the numerous r e q u e s t s f o r s t a t e m e n t s r e c e n t l y made.
Mr, McDougal: I
do not think I
perienced a n y d i f f i c u l t y
can s a y w e have ex-
i n getting a n y responses
t o state-
ments o f this kind.
Mr. McCord: G o v e r n o r McDougal, I
have never y e t gotten
the c o m p l e t e f i l e f r o m t h e c o u n t r y b a n k s o f t h e i r c o m p u t a -
tion o f reserve o f November 16, a n d m y credit bureau has
been called o n b y the country banks t o make o u t t h e report
and send it, a n d they would s i e n i t i f they k n e w how t o
make
it. I
mbhhmemp also requested another c o m p u t a t i o n o n
December 1 8 .
T h a t h a s m e t w i t h t h e s a m e result. I
tempted t o send o u t a
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Federal Reserve Bank of St. Louis
then a t -
short, concise statement u s e d b y our
clearing house i n Atlanta, w h i c h i s very simple, a n d I got
& very g e n e r o u s r e s p o n s e
t o that, b e c a u s e - t h e y k n e w h o w t o
make t h a t out; and. from that information w e were enabled t o
arrive a t our computation o f their reserve.
The Chairman:
G o v e r n o r McCord,
may I
repeat y o u r m o t i o n
for t h e record, w i t h a slight modification t o meet Governor
MeDougal's s u g g e s t i o n ?
Mir. McCord: C e r t a i n l y , sir.
The Chairman:
G o v e r n o r McCord offers a s a
resolution
that i t i s t h e s e n s e o f t h i s m e e t i n g t h a t t h e s u g g e s t e d
form o f w e e k l y r e p o r t b y m e m b e r b a n k s
concise, b r i e f ,
i n reserve c i t i e s
a n d e m b o d i e s t h e n e c e s s a r y information,
is
and
is approved b y this
Mr. Aiken: I
would l i k e t o a s k i f t h a t i n v o l v e s a p -
proval o f the requirement o f a weekly report, M r . Chairman?
The Chairman:
this meeting.
N o . (Continuing:)
A n d i s approved b y
T h a t t h e longer f o r m o f report t o b e made
by member banks located elsewhere t h a n i n reserve a n d central
reserve cities i s considered t o be t o o long, a n d inwebwminetoo m u c h w o r k a n d e x p e n s e
i n preparation
t o b e satisfactory
to member banks, a n d that this conference recommends that
the form o f report required o f member banks located e l sewhere t h a n i n reserve cities b e made n o longer o r more
com-
plicated than that required o f member banks i n reserve cities.
Governor MeCord, h a v e I
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Federal Reserve Bank of St. Louis
Mr. McCord:
N o , sir,
The Chairman:
Nr. Fancher: I
The Chairman:
;
,
i
I
n
paraphrased t o o much?
I t is*all right,
D o e s a n y o n e s e c o n d t h e motion?
second t h e motion,
L e t m e explain, before w e vote
o n this
t 7
intended
: +
n
o
o
m
next
t o ai s k for t a n expression
o f opinion
as t o t h e f r e q u e n c y o f t h e statement,
calculation
a n d then a s t o the
o f average a n d actual figures.
D o e s that cover
the p o i n t y o u h a v e i n mind, M r . S e a y ?
Mr. Seay: P a r t l y . I
wish t o a s k i f i t i s not likely
that t h e last statement prepared f o r t h e country banks i s
not a t l e a s t a s brief
statements,
a s this?
a s I remember.
T h e y first s e n t u s two
B o t h o f them were quite long.
One was for t h e banks i n reserve cities, a n d o n e f o r country
banks.
T h e y have abbreviated t h e o n e f o r t h e reserve cities,
and o f c o u r s e i t i s q u i t e p o s s i b l e t h a t t h e y h a v e a b b r e v i a t ed t h e o n e f o r
t hy
have i t b e f o r e
h
e
banks.
r
e
B u t w e d o not happen t o
i s o n e point,
i f this i s t o a p p l y
to c o u n t r y banks, a l t h o u g h t h e y a r e r e q u i r e d
@ week,
t o report o n c e
i t requires t h e m t o k e e p t h e d a i l y averages.
Mr. McCord:
I d o n o t consider t h a t i s required
t o be
kept daily.
Mre Wold: I
do not think they should b e required t o
it daily.
Mr, Seay: I
d o not m e a n t o s a y they should, b u t they
their o w n o p i n i o n o n t h a t subject.
average
k t p i x days, I
I
f you get the
d o not s e e h o w y o u c a n escape keeping
it daily.
Mr. MeCord: Governor Seay, i t is a physical impossiDe
tse 3
bility t o get a country bank t o keep these reports daily.
- ;
2
That i s w h a t I
1 x
days,
y
1
8
mean t o say.
i
f y o u gave h i m some leeway
e
w
{
h be m ea y mr a k e
a hn estimate
f o r t h e last s i x o r eight
o r s o m e t h i n g o f t h a t kind,
y o u w i l l g e t results,
but if
insist
i o t
n t}h e smt ae
t b
t e mne n t
being
eing t
k e p t ddaaii
l yi, y o u w i l l n o t
get anything.
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Federal Reserve Bank of St. Louis
The Chairman: G o v e r n o r McCord,
TM
w e have proved t h e form
of report w h i c h c a l l s f o r a n a v e r a g e f r o m t h o s e b a n k s
in
reserve cities where undoubtedly those figures c a n b e furnished w i t h o u t m u c h difficulty.
Mr. McCord:
Yes.
The Chairman:
N o w w e have offered a
resolution, w h i c h
has b e e n s e c o n d e d , w h i c h d o e s n o t a p p r o v e o f t h i s l o n g e r
form of. report.
Mr. McCord:
Y e s , sir.
The Chairman:
I f y o u care t o a c t o n that resolution
now, w e will t h e n discuss t h e features o f t h e n e w report t o
be r e q u i r e d o f c o u n t r y banks.
(The question having been put, the motion was carried.)
Mre 0 , Wells:
T h a t question carries w i t h i t the re-
duction o f the longer f o r m
Mr. Seay:
t
o conform t o this one?
N o t necessarily a
reduction.
O. Wells:
T h a t i s the w a y y o u stated it,
Chairman:
I t said n o longer t h a n t h e form required
of r e s e r v e c i t y banks.
I s not t h e next question t o consider
in connection w i t h this statement t h e requirement f o r average
figures a n d for actual figures, a n d i n order t o bring t h e
matter
t o a focus, I
would l i k e t o S u g g e s t t h a t a c t u a l
figures b e provided i n the f o r m o f a statement f o r
all items
to b e reported upon, except t h e reserves.
Mr. Wold:
I s not that t h e provision here? I
d o not r e a d
mamm this t o indicate that t h e figures a r e
t o b e actual e x cept o n supplemental information regarding
reserves,
The Chairman:
T h e long statement, suggested f o r
the
country banks, contemplates giving t h e average
amount o f req
discounts, single-name paper, double-name
paper, a n d s o on.
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Federal Reserve Bank of St. Louis
Are y o u r e a d y t o c o n s i d e r w h e t h e r a n y a v e r a g e f i g u r e s s h o u l d
be required, other t h a n the reserves?
Mr. McCord:
Y e s , Mr. Chairman, I
think a
country bank
ought t o be required t o give u s the amount o f their discounts.
Chairman:
Mr, McCord:
T h e average?
Yes, I
The Chairman:
think so,
I n a w e e k l y report?
Mr, McCord: I
do not think i t ought t o be a weekly
report. I
a m with Governor Fancher. I
too often.
S a y semi-monthly,
The Chairman:
think that i s
o r something like that.
D o e s not that make a
harder calculation?
Mr. Wold: Y e s , a n average o f fifteen instead o f a n
average
o f seven.
Mr, Bains: I
the average. I
would like t o know the merit o f having
want t o know the actual condition o f the bank,
The Chairman: G o v e r n o r McDougal?
Mr. McDougal: I
was going t o suggest that w e recommend
actual f i g u r e s i n s t e a d o f average,
i n connection w i t h all
information e x c e p t i n g alone t h e reserves.
The Chairman:
D o y o u make that a s a motion?
Mr. McDougal:
t I would, yes, sir.
(The motion having been seconded a n d the
question put,
the motion was carried.)
The Chairman:
T h a t implies that w e would approve
of
average f i g u r e s f o r t h e reserves.
Mr. Seay:
D o e s it?
The Chairman:
D o y o u wish t o make a
separate recom-
mendation i n regard t o the reserves?
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Federal Reserve Bank of St. Louis
Mr. Seay: I
would like v e r y much t o have it,
I t would
be v e r y m u c h m o r e u s e f u l
t o us.
I t does involve t h e keeping
of the daily reserves b y the country bank,
o r a n estimate a t
the e n d o f the week, a n d I would much rather have a n actual
ntat anon a t the e n d o f the week than a rough estimate o f the
average f o r t h e week.
Mr. McCord: I
fully agree with you. B u t the getting
of that i s the trouble.
Mr. Seay: I
believe y o u could g e t t h e actual figures
at t h e e n d o f t h e week, a n d t h e y w o u l d t h i n k t h e y w e r e d o i n g
a good deal t o get y o u that.
Mr. McDougal: I
have i n mind that before w e complete
this w e will eliminate this weekly statement, a n d recommend
that i t b e published once a
month.
I t would b e a
physical
impossibility f o r our bank, w i t h o u r force, e v e n i f these
statements a r e gotten o n the date that t h e Federal Reserve
Board thinks they would reach us, t o compile all mimeme this
information f o r t h e Board a n d send i t forward a s promptly
as they would like t o have it, O n c e a
enough,
i n m y opinion.
The Chairman:
W e will reach that i n just a
Mr. McDougal: I
that I
month would b e burden
minute.
mention that n o w simply for t h e reason
had i n mind t h e n that t h e average
iene
w o u l d mean
they
It would b e more difficult, unless m m kept
a daily statement; a n d they d o not.
The Chairman:
T h e object o f getting t h e average reserve
applies m o r e p e c u l i a r l y
t o the banks
i n central r e s e r v e
cities t h a n t o a n y other, a n d t o some extent, b u t n o t
to a
very great extent,
applies,
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Federal Reserve Bank of St. Louis
t o the banks i n the reserve cities; a n d
i n m y opinion,
v e r y slightly
t o t h e c o u n t r y bank.
The N e w Y o r k C l e a r i n g H o u s e A s s o c i a t i o n a d o p t e d t h e p l a n
for a n a v e r a g e r e s e r v e
i n order t o avoid t h e growing
practice o f window dressing a t the time o f the clearing house
statement, and, a s a matter o f fact, m o s t bankers, w h e n they
look o v e r t h e c l e a r i n g h o u s e r e p o r t e v e r y w e e k ,
significance
attach more
t o the actual figures t h a n they d o t o t h e
average figures. I
would b e i n c l i n e d
t o recommend, p e r s o n -
ally, t h a t t h e average figures b e required o n l y from banks
in central reserve cities a t first; later, f r o m the banks
in the reserve cities, a n d that n o average figures b e required f r o m t h e c o u n t r y b a n k s
a t all.
Mr. Fancher: A c t u a l figures.
That i s m y sentiment, M r . Chairman.
The Chairman:
T h e actual f i g u r e s w o u l d b e satisfactory.
The f i g u r e s f r o m t h e c e n t r a l r e s e r v e c i t i e s a n d t h e r e s e r v e
cities w o u l d c o n t a i n b o t h a v e r a g e a n d actual.
you would b e able, assembling these figures,
Consequently,
t o get t h e |
actual f o r the whole country a n d the average f o r t h e ceaeres
centers, w h i c h would s h o w the tendency o f the reserve centers,
and I do not believe that, a t t h e outset, m u c h more t h a n t h
should b e attempted.
Mr. Fancher:
A p p l y t h e average s i m p l y t o the reserve
cities?
The Chairmen:
Mr. Seay:
T o t h e reserve cities.
E v e n that y o u will n o t get.
Mr. Fancher:
I t will b e estimated.
I t will n o t b e any-
thing authentic. ‘They will euess at it.
Mr. Semyh Wold: T h i s f o r m for report f r o m reserve
city
banks does not contemplate t h e actual figures
a t all.
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Federal Reserve Bank of St. Louis
The C h a i r m a n :
I t e m 3
does.
I t e m 3
Mr. Wold:
The Chairman:
i n the b o d y o f the statement does?
Yes.
T h a t means percentages.
Mr. Wold:
Y o u would have t o
your o w n computation.
I t s a y s s o a t t h e foot.
The Chairman:
I t says "Please figure y o u r reserve f o r
Mr. Fancher:
above date o n the back o f this form."
T h e r e i s n o t a n y t h i n g l i k e t h a t o n t h i s forme.
Mr. Wold:
o n the }
t
h
The Chairman:
T h e r e i s nothing
Mr. 0 . Wells:
‘ T h a t i s t h e reserve f o r o n e day.
The Chairman:
W o u l d your question b e met b y a
lution r e c o m m e n d i n g t h a t a
e form
reso-
paragraph r e a d i n g " P l e a s e f i g u r e
your r e s e r v e f o r a b o v e d a t e o n t h e b a c k o f t h i s f o r m " s h o u l d
include t h e request f o r t h e actual a n d percentage figures
on the back?
Mr. Wold: I
d o not k n o w that I
the actual figures.
care particularly f o r
Y o u referred t o it, t o get your actual
and m a k e t h e comparison.
Mr. Seay:
Mr. Wold:
I n o r d e r t o make t h e
I n order t o make t h e figures f o r the whole
country.
Mr. Fancher:
W i l l n o t t h a t b e statistics t h a t t h e
Federal Board will want?
Mr. McCord: T h e y are requiring i t now. Reserve cities
are r e q u i r e d
t o k e e p t h e d a i l y actual figures.
Mr. Wold:
W h a t i s t h e purpose
figure t h e r e s e r v e s
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Federal Reserve Bank of St. Louis
o n the back?
o f requiring t h e m t o
I f they assert t h e y have
a certain reserve, o u g h t n o t that b e conclusive?
The Chairman:
Y o u mean i f they a r e going t o lie about
the figures lie?
Mr. Wold:
M o s t assuredly, a n d that will make
more work for them, a n d they will f i n d that much more fault
bmumumak w i t h m a k i n g o u t t h i s report.
4
Mr- Seay: I
agree t h a t t h a t m i g h t b e
‘man:
H o w about a
motion o n that, Governor
form b e changed t o provide
@ percentage f o r t h e r e s e r y
is made,
a s well
h e l d u p o n t h e date t h e report
a s a n average
t o apply o n l y t o the report
from the reserve c i t y banks, member banks.
The Chairman:
W e ought t o g o a n d keep o u r appointment
now. G o v e r n o r W o l d o f f e r e d a
only t h e s t a t e m e n t
resolution
t o t h e effect t h a t
o f t h e reserve percentage
but that t h e calculation
b e required,
b e not made o n the statement.
Was
that s e c o n d e d ?
Mr. Seay: I
The Chairman:
second t h a t .
I s there any further discussion o f
Governor Wold's resolution?
(The question being put, t h e motion was carried.)
The Chairman:
7
W e will t a k e a
recess n o w , a n d r e c o n v e n e
>
at t h e F e d e r a l R e s e r v e B o a r d r o o m a t 2 : 3 0 ofclock,
1,
P
s
4
(Thereupon,
a ts °1:00 o'clock p. m., a recess was taken
g
until 2:30
o'clock p. m.)
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Federal Reserve Bank of St. Louis
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Federal Reserve Bank of St. Louis
AFTERNOON S E S S I O N ,
The C o n f e r e n c e r e s u m e d i t s s e s s i o n a t 6 : 0 0 o ' c l o c k
Pp. m., upon its return from a conference with the Federal
Reserve Board a t the Pederal Reserve Board rooms, Treasury
Department.
(The C o n f e r e n c e e n t e r e d i n t o a n i n f o r m a l d i s c u s s i o n
with respect t o p r e s s matters.
A t the expiration o f t h e
informal d i s c u s s i o n t h e v a r i o u s r e p r e s e n t a t i v e s
o f t h e press
who were i n waiting were invited into t h e Conference room,
when the following proceedings occurred: }
Mr. Seay: G e n t l e m e n , I
wish t o s a y t o y o u t h a t I
have
just h a d a con¥ersation with Governor Hamlin o f the Federal
Reserve Board, e n d h e has informed me, a n d t h e Conference
through me, t h a t y o u gentlemen paid h i m a visit today. I
presume t h a t a l l o f y o u w e r e there.
A Newspaper Representative:
Mr. Seay:
M o s t o f u s were there.
H e has requested me, because o f that fact,
to s a y t o y o u t h a t h e h a s r e q u e s t e d t h e G o v e r n o r s h e r e t o
make a
report o n this matter t o the Federal Reserve Board,
and t h a t t h e F e d e r a l R e s e r v e B o a r d w i l l t a k e s u c h s t e p s i f
the matter a s seems t o them proper.
He has authorized m e t o s a y t o you,
i n his behalf, t h a t
he desires t o put y o u upon your honor t o publish nothing
about this matter t h a t y o u d o not g e t from them,
like y o u c a n c o m m u n i c a t e w i t h him,
I f you
o r y o u c a n call h i m u p
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Federal Reserve Bank of St. Louis
296
now, b u t h e d e s i r e s
u s t o make o u r report
him, a n d h e h i m s e l f w i l l u n d e r t a k e
o n this matter
to
t o arrange t h e matter w i t h
you.
I would l i k e t o k n o w i f t h a t i s p e r f e c t l y s a t i s f a c t o r y
to you, a n d i f y o u f e e l t h a t y o u c a n g r a n t t h a t request, c o m -
ing from h i m and not from us?
Mr. Iden:
I n view o f m y position i n the matter, w h e n
you m a k e y o u r report, c o u l d I
timony,
ask t h a t y o u transmit m y tes-
t h e stenographer's report,
Mr. Seay; I
w i t h your report?
do not think that will appear i n the
matter, u n l e s s y o u r e q u e s t i t .
A m I
right
i n that,gentlemen?
(Addressing the Conference.)
Mr. Iden: I
suppose they will let me see it.
Mr. Seay: I
a m quite s u r e t h a t t h e y will d e a l w i t h
you f r a n k l y i n t h e m a t t e r a n d w i l l d e a l o n l y t h r o u g h you.
Governor Hamlin wants your assurance - - - i t i s not (y&who
want it, b u t hesethat whatever y o u publish i n this matter
you w i l l s e t f r o m him.
H e desires t h a t w e make a
him a n d t h a t w e n o t u n d e r t a k e
t o give y o u a
report
to
statement o u r -
selves.
A Newspaper Representative:
Y o u have decided n o t t o
issue t h e statement?
Mr, Seay:
W e will submit
t o h i m what w e were g o i n g t o
submit to.you.
A Newspaper Representative:
T h a t i s i f w e accede t o
his request.
Mr. Seay:
we a c c e d e
A r e y o u Willing t o accede t o his request i f
t o it?
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Federal Reserve Bank of St. Louis
(There were several responses o f "yes",)
Mr. Seay: I
a m authorized
t o give y o u assurance t h a t
he h a s m a d e t h i s r e q u e s t n o t o n l y o f u s b u t o f y o u a n d t h a t
he w i s h e s
us
- - - I
repeat - - - t o m a k e o u r r e p o r t
t o him
and t h e Federal Reserve Board will undertake t o communicate
with y o u a n d w i l l g i v e y o u s u c h i n f o r m a t i o n a s i t desires
to b e g i v e n o u t u p o n t h e subject.
A Newspaper Representative:
quest,
A s I
understand y o u r r e -
y o u d o n o t want u s t o publish anything until t h e
Pederal Reserve Board gives u s something t o publish?
Mr. Seay: E x a c t l y .
A Newspaper Representative:
Y o u d o n o t wish t o con-
fine u s t o what t h e Federal Reserve Board tells us, because
we a r e not confined,
i n what w e publish,
t o a n y sources o f
information.
Mr. Seay:
W e are going t o leave i t t o Governor Hamlin,
and w e a r e g o i n g t o a b i d e b y w h a t h e d o e s w i t h y o u gentlemen,
because
h e has t a k e n t h e responsibility o f t h e matter o u t
of our hands.
A Newspaper Representative: I
think some o f i t has
already been sent out; t h a t i s the statement made b y Mr.
Strong,
Another N e w s p a p e r Representative:
N o n e o f i t has b e e n
sent out.
Mr, Iden: I
know some fellows w h o h a d written stories
on i t but were holding t h e m until t h e y got the statement.
When w e went o u t o f the room this morning a l l o f them distinctly u n d e r s t o o d t h a t t h e y w e r e n o t t o p u b l i s h a n y t h i n g
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Federal Reserve Bank of St. Louis
298
until t h e y g o t that statement.
A Newspaper Representative: Nothing has been sext free.
Mr, Seay:
W i l l y o u undertake t o see those m e n a n d ex-
Plain t h e situation t o them a n d tell t h e m that y o u are going
to abide b y i t and get them t o abide b y it?
Mr, Iden: I
will call them up, i f you wish me to, but
in view of my situation, I would suggest that you ask soue
other m a n t o d o it.
Mr. Seay: I
will a s k you t e appoint someone t e cem-
municate with t h e m and tell t h e m the exact situation a n d
@et their agreement t o abide b y it. A r e you sure you can
prevail w i t h them?
A Newspaper Representative: I
cannot s a y a s t o that.
I imagine they will agree, o f course,
Mr. Seay:
D o you think the matter can be left i n that
state, gentlemen? (Addressing the Conference.)
The Chairman:
absolutely correct.
G o v e r n o r Seay, i t seems t o me that i s
W e understand a
request h a s been made
through y o u b y Governor Hamlin which w e believe should b e
acceded t e a s a matter o f courtesy, certainly.
I n view o f
that fact w e have asked these gentlemen t o wait until
Governor Hamlin i s able t o see them about it. I
think I
know newspaper m e n well enough t o know that t h e y usually
comply with those requests.
A Newspaper Representative:
W h e n a n y statement shall
issue from the Pederal Reserve Board, does that release
whatever m a t t e r w e h a v e i n c o n n e c t i o n w i t h t h e c o n f e r e n c e
at noon today, Wet must w e be confined sclely t o whatever
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Federal Reserve Bank of St. Louis
text t h e Board shall issue.
The Chairman:
T h e p u r p o s e o f t h e m e e t i n g t h i s morning,
as w a s c a r e f u l l y e x p l a i n e d I
thought,
w a s n o t t o furnish
news b u t t o talk t o y o u gentlemen a s individuals i n regard
to the statement t h a t w e were going t o make, a n d that your
news o n the subject w a s that statement. W h a t e v e r statement
is given out, a s I presume will b e b y Governor Hamlin, w i l l
contain t h e news.
A s I explained v e r y carefully this morn=
ing, t h e statement that was read t o y o u contained t h e gist
of what w e were considering making a s a statement which,
however, w o u l d have t o b e modified i n view o f what Mr, I d e n
had said.
T h a t statement h a s b e e n modified a n d changed
in
a number o f particulars a n d would have been given out t o
you t h i s e v e n i n g e x c e p t f o r t h e r e q u e s t m a d e b y G o v e r n o r
Hamlin,
A Newspaper Representative:
A n y t h i n g t h a t appears
in
that statement t h a t y o u read this morning which will n o t
appear
i n the statement
scinded?
o f t h e Board i s revoked a n d re-
I s that t h e idea?
The Chairman:
was t h e p u r p o s e
Y e s , t h a t i s the understanding,
a n d that
o f talking w i t h y o u frankly a n d t o s e e that
no s u c h m i s u n d e r s t a n d i n g m i g h t a r i s e a g a i n a s a p p a r e n t l y d i d
arise i n connection with this news about t h e former meeting.
To p r e v e n t t h a t w e t o o k a n o p p o r t u n i t y t o i n v i t e y o u i n here
and tell y o u exactly what was transpiring; t h a t t h e only news
that would b e authorized would b e that which w e would give
you i n writing, a n d now the only news that will b e authorized will b e that which Governor Hamlin will give you.
W e
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Federal Reserve Bank of St. Louis
thought t h a t was t h e w a y i n which t o avoid a
misunderstand-
ing w i t h t h e n e w s p a p e r men.
A Newspaper Representative: I
gather f r o m that that
your c o n v e r s a t i o n t h i s m o r n i n g w a s confidential,
The Chairman: E n t i r e l y , a n d i t was explained i n that
way, s o that nothing would b e published until t h e matter h a d
been f u r t h e r e x a m i n e d a n d a
final s t a t e m e n t prepared.
A Newspaper Representative:
T h a t i s perfectly clear
now, I think.
The Chairman:
W e are very much obliged t o you, a n d
if Mr. I d e n cares t o g o over t h e matter further a t this
time w e a r e a t h i s disposal.
(Whereupon the newspaper representatives retired from
the Conference r o o m a n d upon motion, d u l y seconded, t h e
Conference took a recess, a t 7:05 o'clock P, M, until
9:00 o'clock P. M. of the same day.)
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