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Federal Reserve Bank of St. Louis
FEDERAL RESERVE BANK
OFST.LOUIS
926 APR 9
AM 8
35
Secretary's Minutes
CONFER
INDEX T O SECRETARY'S MINUTES
GOVERNORS CONFERENCE
MARCH 2 2 - 24, 1926.
Paragraph i n
Secretary's
Mimates
8
Absorption o f shipping charges o n silver dollars
Acceptances d r a w n against g r a i n stored i n warehouse Licensed a n d
ine
spected b y State or Federal Authorities, Amendment t o Regulation A
relative t o
Advances to member banks on bills payable secured by U. S. Government
Securities held i n safekeeping , Should Federal Reserve Bank make - --
amendment to Federal Reserve Act, He R. 7895 amending Section 14 - - Amendment t o law i n order t o restore t o Federal Courts jurisdiction
over suits by and against Federal Reserve Banks, Advisability of
-
-
Amendments to Regulation A
Amendment to Article A, Section IV (bp) - - -
Amendment to Article B, Section X {3) - - Bills Payable secured by U.S. Government securities held in safekeeping,
Should F, R. Bank without ascertaining that securities are property
of offering member bank make advances t o member banks o n
Budget control of Federal Reserve Bank expenses, Progress i n
Building expenditures and receipts - Segregation from other expense
and income accounts -
Business conditions, Review of
Capitalization and other requirements imposed by State lew on State
banks and trust companies exercising fiduciary powers <
Cash letters - Is it not unfair to require manber banks, but not
nonmember banks t o remit for cash letters i n funds o f immediate
a v a i l a b i l i t y
«
-
<
«
<
<
e
s
s
e
e
u
e
e
c
o
n
e
a
n
u
n
w
n
e
n
w
e
Character o f tenants o f Federal Reserve Bank buildings Chargeoffs b y F, Re Banks o n account o f depreciation i n machinery <- - -
Checks - Numbers or symbols to indicate F. R. Bank o r branch
territory <- - -
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Federal Reserve Bank of St. Louis
Paragraph i n
Secretary's
Minutes
Committees
Insurance Committee
Leased Wire Committee
Open Market Investment Committee
Pension Cimmittee
Standing Committee o n Collections
Sub-committee o f General Committee o n Bankers Acceptances
Vounsel t o assist i n litigation a n d t o act a s clearing house for
legal departments of all F. Re Banks, Permanent employment b y
F. Re Board at fixed retainer of
Continuous Borrowers, Discount o r loan policy in respect to
Criticism of F. R. System - Steps taken to insure that F. Re Banks and
System are not subject t o criticism
Currency Committee of Treasury ~ Report of progress made
Currency counting machines
Depreciation i n Fe R e Bank machinery, Charges o n account o f
Discount o r Loan Policy - - - --- =
Discount Policy and Procedure, Reports to be sent to Mr. Newton D. Baker}
Discount Rates
Eligibility o f notes o f corporation representing borrowings o f funds
to be advanced to subsidiaries, Questions arising out of F. Re Board's
ruling relating t o - = - e - - 7 + - 7 - % °
Employment o f special counsel b y F. R. Board a t fixed retainer t o
assist i n litigation and to act a s clearing house for legal departe
ments o f all F. Re Banks
Expense and income accounts o f F. R. Banks, Segregation o f building
expenditures and receipts from other
Expenses of F. Rs Banks, Progress i n budget control of
Federal Farm Lean coupons, Should not F. R. Banks b e reimbursed for
expense involved i n paying - <«- - + - +.< < 5 = 4 5 2
Federal Reserve Act, He Re 7895 amending Section 14
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Federal Reserve Bank of St. Louis
42
41
1,49 - 54
19, 43
20-22, 25-29
39
Paragraph i n
Secretary's
Minutes
Federal Reserve Bank Buildings
Character o f tenants
Shargeoffs o n account o f depreciation i n machinery -
- -
-
- - — -=
Segregation o f building expenditures and receipts from other
expense a n d income accounts
Fiduciary powers ~Requirements imposed by State law on State banks
and trust companies
Poreign Accounts
Gold holdings and payments
H. Re 7895 amending Section 1 4 of Federal Reserve Act
Idaho Grimm Alfalfa Seed Growers Association, Case o f Federal Reserve
Bank o f San Francisco v s the
Immediate availability, I s it not urfair t o require member banks,
but not nonmember banks, t o remit for cash letters i n funds o f - - -
insolvency of member banks, Responsibility of F. R. Bank and steps
to be taken t o determine
Insurance Committee, Report of
Joint Conference o f Governors and F. R, Board
Jurisdiction over suits by and against F. R. Banks, Advisability of
seeking amendment t o l a w i n order t o restore t o Federal Courts -
- =
Large Lines, Discount o r loan policy i n respect t o
Leased Wire Committes, Report o f
Loan account of Stock Exchange - Relation to money market and credit
situation
Loan o r Discount Policy
Non-cash collections
Appointment o f Committee o f five Governors t o confer with F. Re
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Federal Reserve Bank of St. Louis
Paragraph i n
Secretary's
Minutes
Open Market Operations
Report of Open Market Investment Committee
Review of business conditions
i e s
49 50-
Par List, Withdrawals from
7
Pension Committee, Report of
43
Pension P l a n
19
Questions arising out of F. R. Board's ruling (X-4484) relating
to eligibility o f notes o f a corporation representing borrowings
of funds t o be advanced t o subsidiarics
Rates o f Discount
Redemption Agents for unfit U. 5. Currenty, Proposal t o make
F. R, Banks
Rediscount o f notes secured b y adjusted service certificates under
provisions of Section 502 of World War Compensation Act, Advisability of issuing regulations relating t o
Rediscounts - Report o f present precedure and practice t o b e sent
to Mr. Newton D. Baker - - - = «= = += ---=<=2
Regulation A
Amendment to Article A, Section I V (bv) - -
Amendment to Article B, Section X (3) o rediscount o f notes secured b y adjusted
Regulations r e l a t i v e t
service certificates under provisions o f Section 502 o f World War
Compensation Act, Advisability o f issuing
Reimbursement o f F. R. Banks b y Federal Land Banks for expense in~
volved i n paying Federal Farm Loan coupons
Reports
Foreign Accounts - «
13
Insurance Committee
38
42
Leased Wire Committees
41
Open Market Investment Committee
Pension Committee
Standing Committee o n Collections
Sub-committee of General Committee o n Bankers Acceptances
Responsibility of F. R. Bank and steps to be taken to determine
insolvency of member bank i n view o f decision o f Circuit Court
Grimm
ofAppeals i n case of F. R. Bank of San Francisco v s Idaho
Alfalfa S e c d Grovors Association +
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Federal Reserve Bank of St. Louis
1,49 - 54
19, 43
20=22,25-20
39
Paragraph i n
Secretary's
Minutes
Safekeeping o f securities which are not property o f depositing
ank, Should F. R. Bank accept
Se
Zregation o f building expenditures and receipts from other
expense and income accounts
i
7
Shipping charges o n silver dollars, Absorption of - 8
Standing Committee o n Collections, Report o f
20 = 22 ,25-29
Stock Exchange loan account - Relation t o New York money market
and credit situation i n general
6
, 10
Sub-committee o f General Committee o n Bankers Acceptances, Report of- 4 3 8 9
Symbols o n checks t o indicate F, R. Bank o r branch territory -
---
Treasury Currency Committee ~ Report o f progress made = 9 - = = « = »
Trust Powers Advisability
o f F. R. Board adopting f o r national ®
:
a:
banks minimum capital requirements a n d imposing o t h e r requirements
in connection with its granting authority ta exercise
Withdrawals from Par List
World War Compensation Act, Advisability o f issuing regulation
relative t o rediscount o f notes secured b y adjusted service
certificates under provisions o f Section 9 0 2 o f
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Federal Reserve Bank of St. Louis
[ 2 2
“PROGRAM
C O N F E R E N C E
G O V E R N O R S
March 22, 1926
Yashineton,
D . Ce
CREDIT TRANSACTIONS AND POLICIES
A. O p e n Market Operations.
1. R e p o r t o f Open Market Investment Committee.
2e.- Peticy.
Discount R a t e s ,
Discount o r Lo2n Policy i n respect to:
1. C o n t i n u o u s Borrowers.
2. Laree Lines,
(
d
i
s
c
u
s
s
i
o
n
) New York
Discussion o f the extent o f the responsibility
of 2 Federal reserve bank a n d the steps t o b e
taken t o determine insolvency o f a member
bank i n view o f recent decision o f Circuit
Court o f Appeals i n the case o f the Federal
Reserve Bank o f San Francisco vs. Idaho Grimm :
Alfalfa Seed Growers Association.
Should a
K
a
n
s
a
s City
Federal reserve bank make advances t o
member banks o n bills payable secured b y
United States Government securities held i n
safekeeping without taking steps to ascere
tain that such securities are the property o f
the offering member banks,
K
a
n
s
a
s City
Stock Exchange L o a n Account.
Its relation t o the N e w York money market a n d
the credit situation i n general, ( d i s c u s s i o n ) N e w York
Amendment t o Section IV(b) o f Regulation A ,
Discussion o f the advisability o f amending
this regulation s o a s not t o require member
banks t o specify o n applications f o r rediscount t h e source f r o m which t h e y 2cquired
the paper offered f o r rediscount except i n
the case o f paper acquired f r o m nonmember
banks, ( S e e Board letter X-4544 dated
February 27, 1926.)
F
. Re board
COLLECTIONS AND CLEARINGS
A. Report o f Standing Committee o n Collections,
Be. Y i t h d r a w a l s f r o m the P a r List.
S
t
. Louis
C. Desirability o f final settlement o f contro-
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Federal Reserve Bank of St. Louis
versy regarding non-cash collections.
( d i s c u s s i o n ) N e w York
COIN, CURRENCY A N D CIRCULATION
Ae Gold holdings and payments.
Be
( d i s c u s s i o n ) N e w York
Absorption o f shipping charges o n silver
dollars,
(
d
i
s
c
u
s
s
i
o
n
) Kansas City
Currency counting machines, V o l u m e o f work
performed and estimated savings.
De
( d i s c u s s i o n ) New York
Treasury Currency Committee. R e p o r t o f
procress made,
T
r
e
a
s
u
r
y
-OFBRATION A N D ADMINISTRATION
Ae S h o u l d a Federal reserve bank accept f o r
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Federal Reserve Bank of St. Louis
safekeeping securities which are not the. :
property of the depesiting bank?
K
a
n
s
a
s City
Should not t h e Federal reserve banks b e
reimbursed b y Federal Land Lanks for
expense involved i n yayine Federal Farm
Loen coupons?
C
h
i
c
a
g
o
Progress i n 5udget Control o f Federal Reserve
Bonk Expenses.
(
d
i
s
c
u
s
s
i
o
n
) New York
Further exchange o f views relative to the
steps trken a t each Federal reserve bank t o
make sure that the bank and the System are
not properly subject to criticism beeause
of the practices o f t h e bank o r its personnel.
N
e
w York
Federal. Reserve Sank Duildines.
1. Character of tenants,
( d i s c u s s i o n ) New York
2. S e g r e g a t i o n o f building expenditures
and receipts from other expense and
income accounts,
C
h
i
c
3. Chargeoffs o n account o f depreciation
in machinery.
( d i s c u s s
i
a
o
n
g
o
) N e w York
Discussion o f capitalization a n d other require-
ments imposed by State law on State banks»
and trust companies exercising fiduciary
powers, a n d advisability o f Board adopting
for 211 national banks « minimum capital re«
quirement a n d imposing other requirements i n
connection with its granting authority to such
banks to exercise trust powers,
F
Report o n Foreign Accounts,
Report o f Sub-Committee o f General Committee o n
Bankers Acceptances,
Report o f Leased ‘Tire Committee,
Report o f Insurance Committee,
Report o f Pension Committee,
. Re board
V. SUPPLEMENTARY TOPICS
A
A. Permanent empleyment b y the Beard a t a fixed retainer
of special counsel e f outstanding ability t o assist
in litigation, a n d t o act as a clearing house fer the
legal departments o f all Federal reserve banks. { S e e
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Federal Reserve Bank of St. Louis
Soard's letter of March 9, 1926, X~4550; also paragraph 26, Minutes of Nevember 1925 Gevernors Conference.)
Advisability e f seeking amendment t e the law i n order
to restore to Federal Courts jurisdiction ever suits
by and against Federal reserve banks. { S e o Beard's
letter of March 11, 1926, X=4558,).
yuestions arising out of Board's ruling e f December 30,
1925 (X=4484) relating to the elizibility of notes
of a corperation representing borrewings o f funds t e
be advanced t o subsidiaries. ( S e e Board's letter of
March 12, 1926, X~4560)
F.R.Board
Advisability o f issuing resulations relative t o the re-
discount of notes secured by adjusted service certificates under the provisions o f Section 502 of the Vorid
War Compensation Act. ( S e e Board's letter o f March 13,
1926, X=4561)
Is it not discriminatory and unfair to require nember
banks t e remit for cash letters i n funds o f immediate
availability whereas nonmember par remitting banks are
allowed t o remit for cash letters i m funds not imediately available?
A
t
l
a
n
t
a
GOVERNORS C O N F E R E N C E
March 2 2 o a4, 1926
Washington, D C .
First Day's Segsion, Monday, M a r c h 22, 1 9 2 6
Morn ing
The meeting was called t e order a t 10:00 o*clock a » me
Present:
Governor Strong Chairman.
Governors Harding, Norris, Fancher, Seay,
Weliborn, McDougal, Biggs, Young, Bailey,
Talley and Calkins.
Mr. Harrison, Secretarye
Topic I s Ae l e Report o f Open Market Investment Committee
The Chairman presented t o the conference the report o f the Open
Market Investment Committee a s approved a t its meeting o n March 20, 1926.
Before action was taken upon the report, there was a discussion of general
business conditions with particular reference t o the statement o f the
Committee that there have been reports of business hesitation i n the past
few weeks. T h e consensus of opinion seemed to be that while production
and manufacture are still active, nevertheless there i s some evidence o f
business hesitation which might b e reflected soon i n accumulating inventor-
ies. Upon completion of the discussion, upon motion of Governor Young, it
was
VOTED +to approve and file the report (printed on pages 25 = 38
ofthe stenographic record) as submitted.
(See pages 3 - 24 stenographic record)
Topic I , C. D i s c o u n t o r loan Policy i n respect jo:
i. Continous Borrowers.
Zo L a r g s Lines.
Upon request o f t h e Chairman there w a s a distussion o f the policy
pursued i n each district with regard t o continuous o r excessive borrowers
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Federal Reserve Bank of St. Louis
among menber. banks. W h i l e i t appeared that there are r e l a t i v e l y w
e
f banks
throughout t h e country which a r e borrowing f r o m t h e Federal reserve b a n k
merely for the sake of making a profit, nevertheless there are still a
number o f continuous borrowers which are unable at the present t o reduce
or eliminate their lines.
i t was felt by the conference that there is_
no general r u l e applicable t o a l l cases o f continuous o r excessive borrow=
ers, i t being a
matter o f judgment a s t o t h e best course t o b e pursued b y
the Federal reserve bank i n handling each individual case.
(See pages 33 » 59 stenographic record)
Topic I . E e S h o u l d a
and
t
Federal reserve b a n k make advances
to member banks on bills payablé secured
by United States Government securitics
heid i n safekeeping without taking steps
to ascertain that such securities are
h e property of the offering member banks?
Topic IV. A. Should e a Federal reserve b a n k accept f o r
safekeeping securities w h i c h a r e not t h e
property o f t h e depositing bank?
Governor Bailey stated that Topic I. £. was preposed i n order to
ascertain the views and procedure followed a t other Federal reserve bankse
With some exceptions, i t was felt that i n making advances to indoor banks
on bills payable secured b y Government securities held i n safekeeping a t
was best t o assume that the securities are the property o f the borrowing
e
member bank unless the Federil reserve bank i s o n notice t o the contrarys
p
While there was some difference o f opinion a s to what might constitute such
notice i n any given case, i t was 5 abatic agreed that the reserve bank
would b e charged with notice o f facts actually i n the possession o f any of
its various ascibnntan
Indiscussing Topic IV. A. Governor Bailey stated that he cone
siders this a most valuable service to country member banks, but a
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Federal Reserve Bank of St. Louis
( 4 )
3
majority o f t h e Governos's felt that Federal reserve banks should n o t accept
for safekeeping securitics which belonged t o customers o f a moniber banke
Some of the Federal reserve banks take steps affirmatively t o ascertain
whether securities deposited for safekeeping actually belong t o the deposite
ing bank, b u t others assume that t h e depositing b a n k owns t h e deposited s e »
curitics unless i n possession o f knowledge t o the contrarye
N o action was
asked for o n either o f these topics.
‘(See pages 59 » 79 stenographic record)
He Re 7995 amending Section 1 4 of the Federal Reserve Acts
The Chairman reported that the Governor o f the Federal Reserve
Board had stated that the House Committee o n Banking a n d Currency i s to
hold hearings o n Congressman Strong's bill H. R. 7395 t o amend the
Federal Roserve Act so as to provide that "all of the powers of the Federal
Reserve System shall be used for promoting stability i n the price Levels”
Copies o f the bill were distributed and a discussion held concerning the
attitude of the System towards the proposals i n the bille
Topic I. F. Stock Exchange Loan Account
Its relation t o the New York money
market a n d the credit situation i n
general.
(See also paregraph 10)
The Chairman stated that this topic had been placed upon the
program primarily t o give a n opportunity for questions o r discussion b y
other Governors.
T h e Chairman reviewed the history o f the publication o f
the loan account and called attention to possible difficulties i n 4
direct
program which might be understood to place upon the Reserve System
this
responsibility for the Stock Exchange Loan Accounte ( D i s c u e s i o n o f
topic continued in paragraph 10-)
{See pages SO = 85 stonographic record)
at
At 12:45 ofclock ps me the conferences adjourned t o reconvene
2:15 o'clock p e Me
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Federal Reserve Bank of St. Louis
First Day's Session, Konday, M a r c h 22, 1926,
Afternoon
The meeting was called t o order a t 2:30 oe’ clock p. m
Topic II. B. Withdrawals from the Par List.
(
7
)
Each Governor revigwed the status of the par list in his district.
in those districts where there have been withdrawals during the past year o r
nore i t was pointed out that many were not voluntary withdrawals but were
withdrawals requested by the Federal reserve bank on account of unsatisfactory
remittances.
N o a c t i o n was asked for.
(See pages 86 - 90 steriographic record)
. Topic Tit. B y A b s o r p t i o n o f shipping charres o n silver
=
d
o
l
l
a
r
s
(
8
.
In discussing this topic, i t was pointed out that at a previous conference (see paragraph 6 3 Minutes o f May 1922 Conference) i t was voted that
ehipping charges o n coin and currency should b e absorbed b y the Federal ree
serve bank, with the exception of shipping charges o n standard silver dollars
in which case the Federal reserve bank should have the option t o absorb o r
not absorb the charges. I n a s m u c h e s this cevered the point i n question, t h e
topic was passed without action.
“(See pages 91 = 93 stenographic record)
Topic Ii. G. D e s i r a b i l i t y o f final settlement o f controversy
regarding norie-cash coliections.
The history o f the non-cash collection controversy was reviewed a t
some length, a n d after discussion, upon motion o f Governor Harding, i t was
VOTED
t h a t t h e non-cash collection service should b e continued
as a t present, that is, without charge arid without limitation a s to itens
payable a t street addresses.
Nine Governors voted Yes; Governors Bailey, Young and \Wellborn
voted No.
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Federal Reserve Bank of St. Louis
)
a
Thereupon, upon motion o f Governor Harding, i t was
VOTED t h a t inasmuch a s the question o f the non-cash collection
service has been thoroughly surveyed and has been before the Federal Re-
serve Board for nearly two years, the board be requested to take final
actisn u p o n it.
Eleven Governors voted Yes; Governor Weilborn voted No.
(See pages 93 = 120 stenographic record)
Topic I. F. S t o c k Exchange Loan Account. Cont’d.
{See also paragraph 6)
Governor Strong continued h i s discussion o f t h e Stock E x c h a n g e
Loan Account and pointed out that the only proper and effective control of
isans made b y member banks t o members o f the Stock Exchange i s necessarily
through the berrowers themselves and not through Federal reserve pressure
upen the lenders, t h e ultinate use o f Federal reserve credit not being cone
trollable b y the Federal reserve banks.
(See pages 120 = 125 stenographic record)
fopic TIT. A. G o l d Holdings and Payments.
(
2
1
Mr, Harrison referred t o the increase i n the past t w o years i n the
percentage o f hand t e hand gold held b y the various Federal reserve banks,
but indisated that in seme cases this percentage is still quite low. H e then
reviewed the sald basmees policy o f the Federal reserve banks since 1922,
pointing out that i n that year the New York bank commenced making gold payments
in order to offset the amount of imports of gold and that at the end of 1924
when the gold flow changed from an import to an export movement, i t was agreed
with the Treasury that it would be desirable t o maintain the gold certificate
circulation at about its then figure = aroynd 31,000,000,000 ~ se that future
gold movements would b e reflected i n the gold reserve o f the System.
The
épinien was expressed that this policy seems to be the proper one at this
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Federal Reserve Bank of St. Louis
)
time a n d several o f t h e Governors present offered t o cooperate i n their g o l d
payment policy, i f necessary, i n order t e maintain the certificate circulation
atv about the propesed amount.
I + was understood that the Federal Reserve Bank
of New York would advise the other Federal reserve banks if o r when their
vooperation might b e necessary t o accomplish this.
{See pages 125 » 139 stenographic record)
Topic IIT. C. C u r r e n c y counting machines.
Volumef
o
work performed a n d estimated savings.
The e f f e c t i v e n e s s f
o the currency counting machines installed a t
the Federal Reserve Dank o f New York was outlined and the other Governors
were requested a s soon a
convenient t o advise the Federal Reserve a n k o f
New York whether they care t o purchase any such machines and, i f so, how
many, i % being stated that the delay i n placing these orders i s handicapping
the manufacturing program of the producer and delaying the benefits which it
is believed will result from the use of such machines.
(See pages 139 - 149 stenographic record)
Topic IV. FB. S h o u l d not the Federal reserve banks b e
reimbursed b y Federal Land Banks for
expense involved i n paying Federal
Farn Loan coupons?
Upon motion of Governor Strong, i t was
VOTED
t h a t this topic b e referred t e Governor Norris with power.
(See pages 149 - 154 stenographic recerd)
Topic IV. € . P r o g r e s s i n budget control o f Federal reserve
bank expenses.
This topic was placed on. the pregram ae a follow-up of the dis-=
cussion a t the last Governors Conference (sce paragraph 2 1 Minutes o f
November 1 9 2 5 Conference).
T h e r e was a
review o f the effectiveness o f bud~-
get control throughout the Federal reserve banks.
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Federal Reserve Bank of St. Louis
(See pages 154 and 155 stenographic record)
Topic IV. D e F u r t h e r exchange o f views relative t o t h e
steps taken a t each Federal reserve bank
to make s u r e that t h e bank a n d the System
are not properly subject t o criticism be-+
cause o f t h e practices o f t h e bank o r its
personnel.
This topic was propesed i n reference t o the discussion o f this
Subject at the last Governors Conference (see paragraph $3 Minutes of
November 1925 Conference). T h e views of several of the Federal reserve
banks were expressed relative to the program submitted at the last con
ferencea
(See pages 155 - 158 stenographic record)
Topic IV. E . I . F e d e r a l Reserve B a n k buildings.
ieCharacter of tenants.
After discussion of the general principles considered i n seletting tenants for Federal reserve bank buildings, this topic was passed
without actione
{See pages 150 - 162 stonographic record)
Topic IV. #, 2, Federal Resorve Bank buildings.
2e Segregation o f building expenditures
and receipts f r o m other expense a n d
income accountse
While i t was suggested that building expenditures a n d roccipts
be segregated from other expense and income accounts o f Federal reserve
banks, i t was the consensus o f opinion that this procedure should not b e
adoptede
{See pages 162 ~ 173 stenographic record)
Tanic {V. E s 3 . F e d e r a l Reserve B a n k buildings.
oe C h a r g e o f f s o n account o f
depreciation i n machinery.
In discussing the chargeoffs made by the several Federal reserve
banks on account of depreciation i n the machinery of new bank buildings,
it appeered
t h a t most o f t h e Federal rosorve
banks a r e n o w charging o f f
X
P
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Federal Reserve Bank of St. Louis
10% per annum. O n e bank is charging 6 2/3% per anmum, one 5%, and twe
others 5 % on part o f the machinery and 10% o n the balances
(See pages 173 - 177 stenographic record)
Pension Plans
(See also paragraph 43)
Governor Fancher reported that he, Governor McDougal and Mr. Platt
had that morning visited the Chairmen o f the House and Senate Committees o n
Banking a n d Currency a n d that e a c h h a d manifested interest i n the pension
plan a n d agreed t o introduce t h e bill a s drafted b y the committee.
S o m e
question w a s raised b y the conference a s t o whether i t would b e feasible t e
propose a n amendment t o t h e bill i n orderte provide f o r t h e liquidation o f the
plan upon t h e liquidation o f a n y o r all Federal reserve bankse
was requested =
T h e committee
s t u d y this matter a n d report b a c k t o t h e conferences
At 6:00 o*¢lock p. me the conference adjourned t o reconvene a t
10:00 o'clock o n Tuesday morning, March 23, 1926.
Second Day's Session, Tuesday, March 23, 1926
Morning
The meeting was called t o order a t 10:25 o'clock a. me
Topic II. A . R e p o r t o f Standing Committee o n Gallections.
(See also paragraphs 25, 26, 27, 28 and 29)
Mr. Strater, Chairman of the Standing Committee o n Collections
summarized the report o f his committee t o the conference {printed o n pages
277 - 286 stenographic record}.
The substance o f each o f the recommendations contained i n the
duis a n d the action taken b y the conference i s summarized below:
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Federal Reserve Bank of St. Louis
Revision o f time schedules with a view t o reducing
float and avoiding existing inequalities,
The committee refers t o the fact that there are a t
the present time many discrepancies i n the inter-district
time schedules a n d that owing t o t h e emount o f work necessary
to counter-check these schedules a n c compere t h e m with train
schedules, i t is impossible for the committee t o d o more than
report progress, w i t h t h e understanding t h a t t h e work will
probably b e completed i n time t o report b a c k t o t h e next
conferences M r . Strater asked that each Federal reserve
bank and branch carefully check the time schedules appended
to the committee's report and advise the committee o f any
errors o r inaccuracies.
Upon motion o f Governor Calkins,
i t was t h e n
VOTED that a conference of operating officers of the Federal
reserve banks should b e subject t o the call o f the Chairman o f the Stand=
ing Committee o n Collections t o consider any differences o f opinion o r
discrepancies i n the time schedules before the final report o f the
committee i s submitted t o t h e next conf erences
(See pages 180 and 181; 184 - 191 stenographic record)
Numbers a n d Symbols o n Cheeks t o indicate Reserve b a n k o r
Branch territory.
After discussion the advisability o f having checks bear a number
or some sort o f a symbol t o indicate t h e Federal reserve b a n k o r Federal
reserve bank branch territory i n which the drawee bank i s located, upon
motion of Governor Young, i t was
VOTED t h a t this question b e referred t o the Standing Committee
on Collections with authority t o take the matter u p with the Transit Com-
mittee of the 4#merican Bankers Associations
{See pages 181 « 184 stenographic record)
Topic I. D e D i s c u s s i o n o f the extent o f the responsibility
of a Federal reserve bank and the steps to
be taken t o determine insolvency o f a member
bank i n view of recent decision o f Circuit
Court o f Appeals i n the case o f the Federal
Reserve B a n k o f S a n Francisco vs. Idaho G r i m m
Alfalfa S e e d Growers Associatione
At the request o f the Governors Conference, Mr. Nevton D. Baker
appeared t o discuss w i t h t h e Governors a n d t h e members o f t h e Federal R e -
serve Board various aspects o f the case o f the Federal Reserve Bank o f
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Federal Reserve Bank of St. Louis
10
San Francisco vs. Idaho Grimm Alfalfa Seed Growers Association i n its
relation t o the discount policy and procedure o f the several Federal reserve bankse
Mr, Baker pointed out that the case of the Idaho Grimm Alfalfa
Seed Growers Association does not change any established principles o f law
relating t o negotiable instruments b u t t h a t t h e application o f these prines
ciples o f l a w t o t h e facts i n this particular c a s é seemed more severe t h a n
in previous decided cases.
H e reviewed i n some detail the different Federal
reserve b a n k operations w h i c h might i n some w a y b e related t o t h e principles
of l a w applied i n the Grimm Alfalfa case, mertioned s o m e o f t h e dangers t o b e
guarded against, a n d urged u p o n t h e Federal reserve banks t h e need o f placing
a red ticket against t h e name o f a n y member b a n k which,
i n its opinion, m a y
be in a failing condition, s o that an abundance of caution will be exercised
not t o d o anything i n discounting paper f o r s u c h a bank o r i n any other trans»
actions with such a bank which might make the Federal reserve bank a n unwitting
party t o a fraud within t h e rules s e t d o w n i n the Grimm Alfalfa cases
I n con=
clusion, Mr. Baker stated that t h e Federal reserve banks i n the last analysis
must use their best judgment i n each individual case, must take some risks and
must l o s e s o m e money rather t h a n b e rigidly automatic
i n dealing w i t h weak banks
in a n effort t o s o b a l o s s i n the conduct o f necessary Federal reserve b a n k
operations.
~*~
“
S
t
e
a
m
Upon conclusion o f the discussion, i t was agreed that each Federal
reserve b a n k would s e n d t o Mr. Baker, through t h e counsel o f t h e Federal R e -
serve Board, a report o f its present procedure and practice i n the matter
R f\
yt N
we
of making rediscounts for e r advances o n bills payable e f member banks, 8
cluding a des¢ription o f the policy o f the Federal reserve bank i n requiring
additional collateral and the steps t a k e n i
n general i n dealing with weak
banks,
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Federal Reserve Bank of St. Louis
a s well a s a n y other pertinent facts that might enable Mr. Baker t o
\
“1
make a thorough s t u d y of the subject with a view t o informing all of the
Federal reserve banks o f t h e dangers t o b e guarded against a n d t h e procedure
to be follewed i n such of their operations a s might b e concerned with o r
related t o the principles o f law involved i n the Grimm Alfalfa case. ( S e e
ee
a
e
e
e
also paragraph 32)
{See pages 192 ~ 263 stenographic record)
At 1:00 o*clock p. m. the conference adjourned t o reconvene a t
2215 o'clock p. me
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Federal Reserve Bank of St. Louis
Day's Session, Tuesday, March 23, 1926.
S
e
c
o
n
d
Afternoon
The meeting was called t o order a t 2:30 o'clock p. me
Topic II. A. R e p o r t of Standing Committee o n Collections. Cont'd.
(See also paragraphs 20, 21 and 22}
Revision o f the form o f Treasury warrants t o
facilitate their handling b y Federal reserve banks
The committee reports that i t has been i n communication with the Treasury Department with a view t o carrying out
the recommendations o f the last conference, that the Treasury
has already made certain changes along t h e lines suggested,
and that i t is hoped that further progress will b e made later
ONs
(See page 2 6 4 stenegraphic record)
Availability of unsorted cash letters
The committee reports that after a thorough considera~
tion of the procedure followed b y the several Federal reserve
banks, i t i s of the opinion that n o change should b e made i n
the present provision o f the majority o f circulars o n this subject a n d that t h e matter o f determining availability o f wunsort-
ed items received from the smaller member banks b e left t o the
discretion p f t h e several Federal reserve bankse
(See page 265 stenographie record)
Cost o f telegraphic advice o f non-payment o f checks
of$500 and overs
Mr. Strater stated that the committee i n submitting
its report t o the last Conference o f Governors d i d not iniend
to recormend that Federal reserve banks discontinue the practice
of absorbing these charges unless that action beeame imperative
in order t o reduce t h e cost o f cheek collections.
12
After further discussion, u p o n motion o f Governor Young, i t was
e
e
E-
VOTED t h a t all Federal reserve banks unifermly adopt the fol~
lowing paragraph, effective July 1, 1926, relating t o this matter (see
page 5 of the committee's report; printed o n page 234 of stenographic
record):
"All telegraphic costs pertaining t o payment or
nonepayment, o r in connection with receiving o r transmitting
any other information o r instructions, will b e charged t o the
account e f the depositing bank. A l l such telegrams t o the de=
positing bank will be sent *Collect.**®
Geverners Calkins and Talley voted in the negative.
(See pages 265 = 274 stenographic record)
After consideration o f individual recommendations contained i n
the committee's report, upon motion o f Governor Young, i t was
VOTED t h a t the report a s a whole b e approved and filed.
(See pages 274 and 275 stenographic record)
Absorption o f postage o n dirset sent cash letters
Mr. Strater referred to the fact that all banks except the
Federal Reserve Banks o f Doston and Kansas City are now complying with the
vete o f t h e April 1925 conference ( s e e paragraph 3 4 Minutes o f April 1 9 2 5
Conference)
t o the effect that n o Federal reserve b a n k should absorb t h e
cost o f postage o n cash letters s e n t direct b y its member banks t o other
Federal reserve banks.
(See pages 275 ~ 277 stenographic recor)
Decision n
i the case of Federal Reserve lank of San Francisco
vs. Idaho G r i m m Alfalfa S e e d Growers Association.
Upen motion of Governor Calkins, i t was
VOTED t h a t the secretary o f the conference b e requested t o edit
one copy of the record of this discussion and after that has been done to
have three copies prepared for the Governor o f each Federal reserve bank.
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Federal Reserve Bank of St. Louis
(See pages 299 and 300 stenographic record)
(30)
Foreign Accounts.
Governor Strong discussed off the record matters relating t o
foreign affairs i n general and particularly i n their relation t o the
Various central banks o f issue.
Topic I. G. A m e n d m e n t t o Section I V ( b ) f
o Regulation A.
iscussion o f t h e advisability o f amend=
ing this regulation s o as not t o reguire
member banks t o specify on, applications
for rediscount the source from which they
acquired t h e paper offered f o r rediscount
except i n the case o f paper acquired f r o n
nonmember banks. ( S e e board letter X4544
dated February 27, 1926.)
(See also paragraph 24)
in considering this topic, reference was made t o Mr. Laker*s dis-
cussionf
o the Idaho Grim Alfalfa case, and after consideration, upon motion
of Governor Young, i t was
VOTED t h a t pending a further consideration o f the whole matter
byMr. Baker (as recommended in paragraph 24) Federal reserve banks, as
authorized b y the Federal Reserve Doard i n its letter X»4544, should elin-
inate from their application blanks any letters or other symbols designed
to indicate whether discounted paper i s depositor's paper o r purchased paper,
and that the conference recommend t o the Federal Reserve Loard that these
application blanks should not require any reference even t o discounted paper
obtained b y a member bank from a nonmember bank.
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Federal Reserve Bank of St. Louis
Governor McDougal voted Ne.
(See pages 300 - 306 stenographic record)
Topic IV, F . D i s c u s s i o n o f capitalization a n d other r e q u i r e
nents imposed b y State law o n State banks
and trust companies exercising fiduciary
powers, a n d advisability o f beard adopting
for all national banks a minimum capital ree
quirement a n d imposing other requirements i n
connection with its granting authority to
such banks t o exercise trust powers.
(See also paragraph 55)
(33)
14
There was some discussion b y the Gevernors a s to the scope and
purport o f the question presented b y the Federal Reserve Board, a n d some
doubt expressed as to whether the Board could legally place a minimum
limit upon the capital o f a national bank t o which the Loard grants
trust powers.
I n view o f this doubt a s t o the scope o f the Loard*s
question, upon motion o f Governor Norris, i t was
VOTED
t o postpone discussion o f this topic until the joint
conference with the Federal Reserve board.
(See page 306 stenographic record)
Topic JIL. D. Treasury Currency Committes.
(
3
4
Report o f progress made.
lip. C. S. Dewey, Assistamt Secretary of the Treasury, appeared —
before the conference and read a report o n matters now before the Treasury's
Currency Committee.
H e outlined i n some detail the problems before the
committee and mentioned certain pending proposals affecting the size and
design of all kinds of currency.
H e requested each Federal reserve bank
to write to hin its views regarding the matters set forth in his letter of
March 11, 1926, sent to each Federal reserve bank concerning the proposed
plan t e eliminate the rows of silk thread from distinctive paper.
I t was
understood that this procedure would b e followed.
Mr. R. G. Hand, Commissioner of Accounts and Depesits, then de=
scribed t h e proposal under consideration b y the Treasury t e make Federal
reserve banks legal redemption agents f o r unfit United States currency, .
with a view t o enabling the Treasury Depeistriatct to save approximately
$10,000,000 in transit float.
(See pages 316 = 348 stenographic record)
Non-Cash Collections,
Governor Strong ‘presented t o the conference a letter fron
Governor Crissinger dated larch 23, 1926, in reference t o the subject
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Federal Reserve Bank of St. Louis
)
z$
of non=cash collections a n d requesting t h e conference t o appoint a
committee of five members t o confer with and to aid the Federal Reserve
Loard i n reaching a conclusion o n this question. Governor Strong there-
upon appointed Governors Fancher, Harding, Talley, bailey and Young.
(See pages 348 - 3503 368 stenographic record)
S e e .
Topic Ve A. Permanent employment by the Loard at a fixed
retainer o f special counsel o f outstanding
ability t o assist i n litigation, a n d t o act
a5 a clearing house for the legal depart=ments o f all Federal reserve banks. ( S e e
board's letter of March 9, 1926, X=-4550;
80 paragraph 26, M i n u t e s f
o November 1925
Gevernors Conference.}
After a discussion o f the various aspects o f the proposal contained i n this topic, a n d with special emphasis o n the n e e d f o r having
System counsel employed to handle litigation i n matters which concern
all Federal reserve banks, upon motion of Governor Calkins, it was
VOTED
t o recommend te the Federal Reserve board that the
Federal Reserve System, acting through the Federal Reserve Loard, retain
as special counsel, Mr. Newton DB. Laker, t o consider litigable matters
only, and that all Federal reserve banks shall refer te the counsel of
the Federal Reserve Loard as seon a s it arises every litigated question,
together with all papers relating thereto, a n d that the counsel o f the
Federal Reserve Loard should refer t o such special counsel all such cases
as he thinks concern the System as a whole and any other cases which
counsel of the forwarding Federal reserve bank requests be referred to
the special counsel.
Seven Gevernors voted Yes; Governors Young, McDougal, Seay,
Dailey and Wellborn voted No. Governor Seay explained that he voted in
the negative because o f the fact that nothing has happened t e change his
opinion since i t was voted a t the last Governors Conference not t o employ
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Federal Reserve Bank of St. Louis
16
eS
S p e c i a l counsel and also because h e thinks that the precedure outlined
will cause unnecessary delays.
scons
(See pages 307 = 316; 350 ~ 368; 396 stenographic record)
At 5:50 ofclock p. m. the conference adjourned t o reconvene a t
10:00 o'clock a. m. on Vednesday morning, March 24, 1926.)
Third Day's Session, Vednesday, March 24, 1926
Morning
The meeting was called to order at 10:00 o’ clock a. nm.
Topic IV. G. R e p e r t o n Foreign Accounts.
Upen motion ef Governor Young, it was
VOTED
t o approve and file the report.
(See page 369 stenographic record)
Topic IV. H.; R e p o r t o f Subcommittee o f General C o m i t t e e
on Lankers Acceptances.
Upon motion o f Governor Calkins, i t was
VOTED t h a t the report {printed o n pages 370 - 378 of steno~
graphic recerd) b e approved and that the Federal Reserve Loard b e requested
to adopt the recommendations contained therein.
(See page 370 stenographic record)
Amendnent t o Regulation A
relative t o acceptances d r a w n against
groin stored i n warehouse licensed a n d inspected b y State o r Federal
authorities.
Upon motion of Governor Young, i t was
VOTED t h a t the Federal Reserve board b e requested t o amend sub}
divisign 3 of section 1 0 of Article 5 of Regulation A te read a s follows:
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Federal Reserve Bank of St. Louis
“The storage o f readily marketable staplos, provided
that the dill is secured at the time of acceptance b y a warehouse, terminal, o r other similar receipt, conveying security
title t e such staples, issued b y a party independent o f the
customer o r issued b y a terminal grain elevater company duly
bonded and licensed and regularly inspected b y State o r Federal
(40)
17
authorities with whem all receipts for grain and all transfers
thereof must b e registered and without whose consent n o grain
can be withdrawn; a n d provided further, that the acceptor
remains secured throughout the life o f the acceptance x "
(See pages 378 = 389 stenographic record)
Topic IV. I . R e p o r t o f Leased Wire Comnittec.
Upon motion of Governor Talley, i t was
VOTED t h a t the report (printed o n pages 390 and 391 o f steno-
graphic record) be approved and filed.
(See pages 389 and 390 stenographic record)
Topic IV. J . R e p o r t o f Insurance Committee.
Upon motion of Governor Young, i t was
VOTED t h a t the report (printed o n pages 392 and 393 of steno-
graphic record) be approved and filed.
(See page 391 stenographic record)
Topic IV. K. R e p o r t o f Pension Committee.
(See also paragraph 19)
Governor Fancher referred t o the interim report which h e had pre=
sented t o the conference o n March 22, 1926, a n d stated that since thet time
the members of the committee had seen Secretary Mellon and that he had
stated that h e i s i n accord with t h e procedure which was followed i n
regard t o the introduction o f the bill t o authorize a pension plan.
Governor Fancher a l s o referred t o the fact t h a t t h e committee h a d considered
the proposal t o a d d a n amendment t o the bill t o provide f o r the liquidation
of the plan i n the event o f the liquidation o f any o r all o f the Federal
reserve banks.
H e reported that t h e committee h a d previously studied
this matter and had discussed it with members of the Federal Keserve
Board a n d that ail had agreed that there i s n o occasion o r need
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Federal Reserve Bank of St. Louis
18
to place a restriction o f this character i n the enabling act.
U p o n motion
ofGovernor Seay, it was
VOTED t o approve Governor Fancher*s report i n behalf o f the
comnittece
(Sec pages 303 + 396 stenographic record)
PLETE,
Topic V e B e A d v i s a b i l i t y o f seeking amendment t o t h e l a w
in order t o restore t o Federal Courts juris=
diction over suits by and against Federal
reserve banks. (See Board's letter of March
11, 1926, X-4558.)
Upon motion of Governor Seay, it was
VOTED t h a t t h e counsel o f t h e several Federal reserve banks
be asked t o prepare a n opinion o n the advisability o f seeking a n amend»
o t t n e m
,a
N
i
the law i n order t o restore t o Federal Courts jurisdiction over
suits b y and against Federal reserve banks, a n d that a l l o f these opinion
when prepared should b e forwarded t o the Governor o f t h e Federal Reserve |
Boards
¥
(See pages 397 and 398 stenographic record)
Topic V. C. Q u e s t i o n s arising out of Board”s ruling o f
December 30. 1925 (X-4484) relating to
the eligibility o f notes o f a corporation
representing borrowings o f funds t o b e
advanced to subsidiaries. ( S e c Board's
letter of March 12, 1926, X~4560-)
Upon motion o f Governor Talley, i t was
VOTED
t o refer this topie b a c k to. the Federal Reserve Board
with the request that i t be submitted for consideration at. the next
Conference o f Governors, i t being pointed A
t h a t the topic had not
bem Seputtod b y the Federal reserve banks i n time t o permit o f ade=
quate consideration i n advance o f t h e conferences
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Federal Reserve Bank of St. Louis
(See page 308 stenographic record)
19
Topic Ve. De Advisability of issuing reculations relative
(
to t h e rediscount o f notes secured b y adjusted
Service certificates under t h e provisions o f
Section 502 of the World War Compensation Act.
(See Board's letter of March 13. 1926, X-4561.)
Upon motion of Governor Calkins, i t was
VOTED t o refer this topic back to the
Federal Reserve Board
with the request that i t be submitted
for consideration a t the next
Conference of Governors, i t being pointed out
that the topic hed not been
received b y the Federal reserve banks i n time
to permit o f adequate con~
Sideration i n advance o f t h e
conf erences
{See pace 398 stenographic record)
ienaiacanines.
Topic V e E e
I s i t not discriminatory a n d unfair
t o require
member banks t o remit f o r cash letters
in
funds of immediate availability whereas non=
member p a r remitting
banks a r e allowed t o
remit f o r cash letters i n funds n o t immediate=
ly available?
in discussing this topic, i t was stated b y
some of the Governors
that inasmuch as all collections are primarily
for theo bonefit of manber
banks, Fedcral reserve banks should be left
free to handle items o n none
member banks i n the best way feasible and that
if, i n order t o effect
Collections o f checks drawn o n normember banks,
i t i s necessary t o accept
remittances i n funds not immediately available,
then that course should
be pursued without any fear of discrimination against member
banks.
I t
was sugeested that i t i s all a matter o f judgment
i n each individual case
as t o what i s the best procedure i n the circumstances
f o r t h e benefit ofmember banks depositing i t e m s f o r
collections
c
a
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Federal Reserve Bank of St. Louis
e
l
(See pages 399 - 403 stenographic record)
4
6
)
20
Topic I p Be Discount Rates.
(
4
8
)
While i t was agreed that this topic should b e postponed until the
joint meeting with the Federal Reserve Board (see page 3 8 stenographic
record) nevertheless there was a n informal preliminary discussion before the
joint meeting conveneds
(See pages 403 = 407 stenographic record)
At 11:00 o'clock as.m. the conference adjourned t o meet i n joint
conference w i t h t h e Federal Reserve Boards
JOINT CONFERENCE O F GOVERNORS A N D FEDERAL RESERVE BOARD
The meeting o f the jaint conference o f Governors with the Federal
Reserve Board was called to order at 11:30 o’clock a. me o n Wednesday,
March 24, 1926.
Present: G o v e r n o r Crissinger presiding
Messrs. Platt, Hamlin, Miller,
Jemes and Cunningham.
Governors Harding, Strong, Norris,
Fancher, Seay, Wellborn, McDougal,
Biggs, Young, Bailey, Talley and Calkins.
Governor Strong reported to the Federal Reserve Board that the ( 4 9 )
Governors Conference had approved the report o f the Gpen Market investment
Committee submitted t o the conference o n Monday, March 22, 1926, the report
which had previously been considered b y the Federal Reserve Board a t its
meeting with the Open Market Investment Committee o n Saturday, March 20,
1926.
Before t h e Board expressed i t s views o n the recommendations contain=
ed in the report o f the Open Market Investment Committee, each Governor was
requested t o describe current business conditions i x their respective dis=
trictss
Shortly after this review was commenced the conf crence adjourned
at 12:50 o'clock ps me t o reconvene a t 2:00 o'clock p. te
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Federal Reserve Bank of St. Louis
21
The afternoon meeting o f the joimt conference o f Governors with
the Federal Reserve Board was called t o order a t 2:20 o'clock p e més
After the review of business conditiohs beguh at the morning
( 5 0 )
meeting (see paragraph 49) was concinded, Governor Crissinger advised the
March 22,
conference that the Federal Reserve Board had, at its meeting o n
although
1926, approved the report o f the Open Market Investment Committee,
t o t h e re=it was explained that t h e Board’s approval related expressly
t o the
purchase o f March 1 5 maturitiese G o v e r n o r Strong t h e n referred
securities
advisability o f giving the committee authority t o buy additional
if and as soon as i t may be apparent that conditions justify ite
H e stated
Invest=
thet i n his opinion the latter part of the report of the Open Market
ment Committee, which was drafted almost a week before, a n d which suggested
that if the
the likelihood of the need for additional purchases, indicated
quarter
discounts o f New York City member banks did not decrease after the
i t would b e
day movements i n the money market had been reduced t o normat,
advisable for the committee t o make further investmentse
The Federal Reserve Board thereupon withdrew from the conf erence
in erder t o consider this questioris
erence
During the absence of the Federal Reserve Board, the conf
t h e Open
discussed t h e matter further a n d expressed t h e opinion that
purchase u p t o
Market Investment Committee s h o u l d have authority t o
conditions
$90,000,000 above the yel0 ,000 ,000 ‘iw s a t a n ae if and when
might justify such purchases prior t o April 15, 19266
At 4:30 e'clock p- me the Federal Reserve Board returned t o the
meetinge
Mr. Eddy, Secretary of the Board, read to the conference that
part o f the minutes o f the meeting o f the Federal Reserve Board relating
to the report o f the Open Market Committee stating that the Boerd approved
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Federal Reserve Bank of St. Louis
22
-}
of the repurchase o f the March 1 5 maturities and the restoration o f the
Open Market Investment Account to $210,000,000.
I t was pointed out, howe
ever, that the Board had taken n o vote o n the latter part o f the report
concerning t h e prompt purchase o f further securities since the Board felt
that the committee's report made n o svecific recommendation o n this questions
Governor Strong emphasized the fact that the Open Market Investment Committcc"s
report had bea@m drafted six days before, that the readjustments o f the quarter
day period were now over, that New York City banks are still heavily i n debt
to the Federal reserve bank, that the conditions suggested i n the last part
of the report e s a guide for further purchases appoared now t o exist, and
recommenda<
that t h o committee*s report should therefore b e considered a s a
tion that i t should b e authorized t o make the additional purchasése
Governor Strong then informed the Board that during its absence ( 5 3 )
t h e coms
from t h e meeting t h e conference m a d e t h e specific suggestion that
mittee be authorized to buy up to $90,000,000 more if developments i n the
money market indicate the need for doing s o before April 15, 1926.
The Federal Reserve Board thereupon withdrew from the meeting a t
4:50 o'clock p e m e t o act upon this specific recommendations
At5:15 o'clock pe me, Governor Crissinger and Mr. James
the
returned t o the conference and Governor Crissinger reported that
to
recommendations o f t h e conference t o give t h e committee authority
been lost
purchase a n additional 390,000,009 i f conditions justify, had
t h a t Mr. Mellon
in the Federal Reserve Board b y a vote o f threo t o three,
daye
was away, a n d that t h e Board would a c t again o n the following
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Federal Reserve Bank of St. Louis
23
Topic IV. Fe Discussion of capitalization and other
requirements imposed b y State l a w o n
State banks a n d trust companies e x e r
Gising fiduciary powers, a n d advisa~
bility o f Board adopting f o r a l l
nationsl banks a minimum capital requirement a n d imposing o t h e r requirs=ments i n connection w i t h i t s granting
authority t o s u c h banks t o exercise
trust powers. (Continued)
(See also paragraph 33)
Governor Strong reported t o Governor Crissinger t h e action o f
the conference relative t o this topic a s recorded i n paragraph 3 3 of the
minutese G o v e r n o r Crissinger said that a s long a s most o f the members
of the Board were absent from the conforence, a n d as long a s there was
no pressing need t o decide this question now, i t would b e put over until
the next Governors Conf ercnces
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Federal Reserve Bank of St. Louis
(See pages 528 and 529 stenographic record)
At 5:30 o'clock p. m. the conference adjourned sine dice
George L. Harrison,
Seeretarye
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Federal Reserve Bank of St. Louis
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