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C O N P F B R E N
May 9
t o 12, 1927
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Federal Reserve Bank of St. Louis
Washington,
D . ¥&
C
INDEX TO SECRETARY'S MINUTES
GOVERNORS CONFERENCE
MAY 9 ~ 12, 1927
Paragraph i n
Secretary's
Minutes
Advisory Committee of Governors on Legislative Matters - --=- = 7
38
Agencies o f F. R. Banks
35
Air
Mail
S e s
i e e
S 5 8 6 =
e
s e e
e
=
e
S
e
o
O
R
e
o
e
e
36
Allotment o f Treasury notes and certificates, Possible improvement
in
o f =
method
=
@
=
©
w w
e w e
w e
w e e
m
e
a7
e
e l
O
w
Amendments t o F. R, Act
Desirabilityf
o amending Section 13 relating to discount of demand
a n d
s i g h t
d r a f t g
«
=
« - 2 =
0 8 2
« ©
« =
= e =<=
=
+ =
s
=
s
2
©
ry
Availability, R e m o v a l f r o m P a r List o f nonmember banks because o f
inability to furnish exchange immediately - - - - c *
77"
7,7
Automobile registration a n d drivers license checks, Possible re~
euct Jon g n number handted b y Ff, 4. Banks «0°82 S o s =
e e e .
“Balances due to banks," Deduction o f non-cash items from = = = =
Benkers Acceptances, R e p o r t
on =
7
=
@
w m e e mR m a
o f Sub-Committee o f General Committee
w m e w s e e a n s
w
w e w e we w e e m D
y
e
Borrowers, Report o f number o f continuous ~
Braneh banking, E f f e c t s o f McFadden b i l l o n
Checks and Collections:
Air mail service for collection items - - - - * " = - * 7 - 7 7 ° ° :
Checks handled account of automobile registrations and drivers
e e e
licenses ~ ~ " = e = ss e e e e e e e e e e e e e
banks"
- - =
to
due
"Balances
from
items
Deduction o f non~eash
Member bank stamping o n cashier's checks “not payable through
FR, Bank" - = - - < = = e e w e eee
Report
o f Standing Committee
e
e e e
eee
ewe
o n Collections
7 7 7 7 "
- - - * - 7 7
Routing checks o n nonmember banks i n same city where such items
are desired b y member bank, Should not member banks b e given
preference i n s t " - * = 3 5 - 2 e e e e e e e n e r t e e s
Should F, R, Banks send checks to nonmember banks when there i s
member benk i n same p l a c e =
*- e s "
2
7
7
5
-
Committess:
Advisory Committee of Governors on Legislative Matters
we tee
Tnsurenes Committee
< < 2 <eqe a
Leased Wire Committee -
emw
s e m
me
= 2 «= 3 s = e w w e e e e
Qpen Market Investment Committee
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
m m
-~*- - 7 7 7 7 " 7
2
7 rees
Paragraph i n
Secretary's
Minutes
Committees: —
Pension Committees Safekeeping Committee
Standing Committee o n Collections
Treasury Currency Committee - - - = =
Continuous borrowers, Report o f number c f
Coupons, Should not F, 2. Banks be reimbursed for expense involved
inpaying Federal Farm Loan coupons ~ * * s s e e e e e e e e 2
Cuban Agency o f F, R , Bank =
Currency program, Future
- -
= e = e e e e e s e wee e w w
= = s** se e e s
ema
e e e ow
were
eee
Neduetion o f non=cash items from “Balanees due to banks" -
as
- = = =
Discount o f certain demand and sight drafts, Desirability o f amend-
ing Section 1 3 relating to - + - " >
Earmarked gold, Recent purchase o f gold t o b e held under earmark
e w
= = <= = se e e w e e w
abrond *
of
Eligibility of notes held b y member bank bearing endorsement
+
=
~
banks
officers o f nonmember
Federal Farm Lom coupons, Should not F. R, Banks be reimbursed for
expense involved in paying - - - - =
Federal feserve Act, Desirability of amending Section 1 3
First National Bank o f Hartford, Ala. stamping o n cashier's checks
"Not payable through F. R. Bank o f Atlanta" ~ - - = - = - + - - - < < - e
Fiseal Agency Operations:
Improvement i n method o f allotting Treasury notes a n d certifieates
- ~ - -
t
a e
s
e
a
e
e
™iscal program o f Treasury
Forezen Relations:
Gold standard abroad, Progress o f
Purchase o f gold abroad
Report o f foreign accounts
Gold holdings and payments
Gold purchased under earmark t o be held abroad
Gold standard abroad, Discussion o f progress o f
Insurance Committes, Report o f =
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
- <== - = e e e w e e w e e
ewe 6
Paragraph i n
. Secretary's
Minutes
16
Leased Wire Committee, Report o f
Legislation:
McFadden Bil (H.R. 2)
Report o f Advisory Committee o f Governors o n Legislative Matters
Strong Stabilization Bill (H. R. 7895) = ~
29, 33, 34, 39
38
44
29, 33, 34, 39
McFadden Bill (H. 2. 2)
F, RB.
Member bank stamping o n cashier's check “not payable through
Dank" e
e
ee |
National b a n k currency, Retirement o f
Non-cash collections:
Deduction o f non-cash items from “Balances due to banks" - = = =
Resolution o f Governors Conference o n non*cash collections = = ~
Ruling of F. R. Board as to opticnal charges for handling non~
cash cotlections -
=
Notes hetd b y member bank bearing endorsement o f
Open Market Operations:
Report o f Open Market Investment Committee = Par Clearance Case o f State Bank o f Hugo, Minn,
Par List, Removal o f nonmember banks from, because o f inability to
tt TTT
furnish exchange immediately available ~ - - 7 - 7 7 7
Penalties, Regulation relative t o method o f computing member bank
e e
Peseryes. tor. 8 = = S e e n e
Pension Committee, Report o f ---<+-+*="--+7-°"7°"
--=-=
+ s
ee
= =
Rediscount o f notes held b y member bank bearing endorsement of
officers o f nonmember banks, Eligibility f o r - - - " * " 7 " 7 7 "
Relations with foreign banks - - = + «= =
Reports:
Advisory Committee o f Governors o n Legislative Matters
S S
e
e 8
Torsion. Apeownte = < 22" -— + o e
3
8
7
7
~"-- = e
Insurance Committee e e
oe e e e
Leased Wire Committee
-*
=
7
7
Open Market Investment Committee ~ - - ~ - ~ Pension Committee
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
- - ° <
+
+ s
e s
e e >
ee
10, 12, 42, 43
Re
member banks, Eligibility o f =
Purchase o f Gold abroad -
10, 12, 42, 43
e e
Paragraph i h
Secretary's
Minutes
Reports:
Safekesping Committee
--"- "7 *
Standing Committee o n Collections ~
Treasury Currency Committee
Reserves;
to
Deduction o f non-cash items i n transit from “balances due
= =
banks" for purpose o f determining reserve requirements = ~
reserves
Regulation relative t o method o f comput ing member bank
“ w e e s =
a
for penalties
e
aga e
= "
- - - *
Resgrves against: Time Deposits
t t t
-- o e
Revision o f Treasury Department Ci¥oular Noe 9 2
Saftkeeping Committee, Report of =
=~ hak cuca
1 ofF., R, Act, Desirability of amending
Section3
"77 " 7 " 7" *
Standing Committee o n Collections, Report of = s
State banks converting into national banks i n view of terms o f
ticTadder b i , P
r
o
p+
s
Strong Stabilization Bill Ga. R. 7895)
e-
s
e
e Pc e t
f
oe e
%
2 2 7 2 "
- - * 2
Sub-Committee o f General Committee o n Benkers Acceptances
Time deposits, Reserves against - - ° 7-7-7777
Time Schedules:
=
Effect o f Air Mail Service o n Time Schedule
Revision o f Time Schedule
~ ~ -- 7
77
tM
-- *-° =
e r e
e r
Trade Acceptances, Possible effect of decision of Supreme
=
=
Texas i n rendering non-negotiable c e r t a m
= * = 23
#2 saeeove =
Treasury Circular No. 92, Revision o f e
o f - - ~ - * 7 7 " " 7 "7°
Treasury Currency Committee, Report
method of allott ing
Treasury notes and certificates, Improvement i n
Treasury’s
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Federal Reserve Bank of St. Louis
fintal
geaeeesh* =
=
+
<= e
e
e
e
e
e
PROGRAM
C O N F E R E N S
G O V E R N O R S
E
May 9, 1927
Washington,
D . ©.
CREDIT TRANSACTIONS A N D POLICIES
A. O p e n Market Operations.
1, Report o f Open Market Investment Committee.
2. Policy.
o f the
3, Discussion o f effect upon money market
M i n n e a p o l i s
Systom.
the
for
foreign accounts handled
B,. D i s c o u n t Rates a n d Policies.
CG, Relations with Foreign Banks.
1. Report
New York
last
2,Monetary situation abroad, as observed
ear and this year i n
ta) France
HP Italy
New Y o r k
{oc P o l a n d
of
3, Discussion o f progress towards restoration
dovelopment
gold standard abroad a n d present
standof intormediate stage o f gold cxchange
Reserve
ard and its relation t o the Federal
on
Systom and its policy, including report
foreign balances in this country.
N
e
w York
for
4, T a x e s o n income earned from bills purchased
account o f foreign banks.
D, Continuous Borrowers.
bank
Report to be submitted b y each Federal reserve
each district
showing number o f borrowing banks i n
of banks which
with particular reference to numbermore,
the amount
have been borrowing for a year or
resources, a n d
of their capital, surplus and total
f r o m t h e Fede
the average amount o f their borrowings
of Secretary's
eral reserve bank. ( S e e paragraph 5
Minutes of November 1926 Governors Conf erence.)
pearing endorsement
E. S h o u l d notes hold b y a member bank
considered eligible
b
e
banks
of officers o f nonmember
letter
for rediscount at F. R. Banks? (See Board
%-4813 dated March 22, 1927.)
F, Strong Stabilization Bill. (H. Re 7895)
F,Re Board
New York
part o f Section 1 3 relate
G. Desirability o f amending that
sight drafts secured b y
ing t o discount o f demand and
shipment o f agshipping documents covering domestic
imelude all staple nonricultural products s o it will
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Federal Reserve Bank of St. Louis
example as flour,
perisheble commodities, such for
as reimbursement
bran, cottonseed meal, ctc., a s well
pills carrying
drafts for the procoeds o f othor
shipping documents.
Dallas
2
H. T h e possible effect o f decision o f Supreme Court o f
Texas i n rendering trade acceptances non-negotiable
where they contain the clause: " T h e obligation of
the acceptor hereof a r i s e s o u t o f t h e purchase o f
goods from the drawer, maturity being i n conformity
with the original terms of purchase."
This decision was rendered i n the case styled
Lane Co. vs. Crum e t al, i n the following opinion:
“For an instrument to be negotieble, the oblige
tion of the maker must arise exclusively from the
instrument, N o obligation arising from a collateral transaction can be imported into the terms o f
the instrument without destroying t h e negotiability
of the instrument."
II, GOLLECTIONS A N D CLEARINGS,
A, Report o f Standing Committees o n Collections.
B, Non-Cash Collections.
1. Discussion o f ruling o f F, R. Board a s to optional charges for handling non-cash collec-
F
, R. Board
R i c h m o n d
tion items, and situation arising from the Min- C l e v e l a n d ©
neapolis method of handling non-cash collect ion items.
2. Resolution o f Governors Conference submitted t o
S a n Francisco
F, R. Board o n the question of non-cash collece
tions. ( S e e paragraph 28 of Secretary's Minutes
ofNovember 1926 Governors Conference.)
C, Diseussion o f ruling o f F. R. Board providing that where
nonmember banks desire t o receive their o w n items f r o m
F, R. Banks and agree t o remit a t par i n satisfactory
exchange, i t is incumbent upon F. R. Banks t o s o route
the items.
1, Should not member banks b e given preference i n
routing checks o n nonmember banks i n the same
town o r city where such items are desired b y
member banks?
Dallas
2. Should F. R. Banks send checks t o nonmember banks
when there i s a member bank i n the same place? B o s t o n
D. I f F. Re Banks sond checks t o nonmember banks, should those
banks b e required t o file ecepies o f examiner's reports
or deposit securities i n sufficient amount t o protect
remittances?
E. Possible reductions i n number of checks handled by F. R.
Banks account o f automobile registrations and drivers’
licenses.
F, Removal from Par List o f nonmembor banks because o f inability o r unwillingness t o furnish exchange immediately
available.
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Federal Reserve Bank of St. Louis
Philadelphia
Minneapolis
III, G O I N , CURRENCY AND CIRCULATION.
New York
A. Gold Holdings and Payments.
B. Treasury Currency Committee.
T
r
e
a
s
u
r
y
Report o f Progress.
Cc, Future Currency Program.
Has the time approached t o consider i n anticipation
some program a s t o the two per cent Consols n o w
N
held t o secure national bank note circulation?
e
w York
OPERATION AND ADMINISTRATION.
A, Proposed Revision o f F, R. Board Regulations.
F
(See Board letter X-4804 dated March 4, 1927.)
, R. Board
B. Revision of Treasury Department Circular No. 92,
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Federal Reserve Bank of St. Louis
issued April 17, 1919. ( R e p o r t t o be submitted
by Governor Norris.)
Regulation relating t o method o f computing member
bank reserves for penalties.
N
w York
e
McFadden Bill. (H. R. 2)
1. Effects o f McFadden bill o n branch banking i n
the different districts. (Each district is
N
asked to submit a report.)
w York
e
2. Prospects o f State banks converting into
national banks i n view of terms o f McFadden
bill. (Each district is asked to submit a
report.)
Minneapolis
3. A r e there any other questions requiring discussion which are raised b y enactment o f
McFadden bill?
New York
Agencies o f Federal Reserve Banks.
1. G u b a n Agency.
New York
2. Possibility of establishment of other agencies,
Should not F. R,. Banks b e reimbursed b y Federal Land
Banks for expense involved i n paying Federal Farm
Loan coupons?
At the last conference i t was voted that each
Governor submit a
new estimate o f expense involved
in handling these coupons. ( S e e paragraph 41 of
Secretary’s Minutes o f November 1926 Governors
Conf erence.)
Air Mail Service.
1, T o what extent i s i t being used o r should b e used
by F, R. Banks?
2, I t s effect o n Time Schedules?
B
o
s
t
Pension Bill.
1. Report o f Pension Committee.
2, Discussion o f plans for again taking u p Pension
Bill.
o
n
New York
4
Report o f Leased W i r e Committee.
Report o f Insurance Committee.
Report o f Committee o n Safekeeping.
Report o f Advisory Committee o f Governors o n Legislative
Matters.
FISCAL AGENCY.
A. P o s s i b l e improvements
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Federal Reserve Bank of St. Louis
i n method o f allotting Treasury
Notes o r Certificates, ( W i t h particular reference t o
desirability of reasonably firm district quotas.) P h i l a d e l p h i a ,
VI. SUPPLEMENTARY TOPICS
A.
Member bank stamping o n cashier's check “not payable through
Federal Reserve Bank."
Be
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Federal Reserve Bank of St. Louis
Par Clearance Case o f the State Bank o f Hugo, Minn,
Report o f Sub-Committee o f General Committee o n Bankers
Acceptances,
Purchase o f gold abroad.
Seduction o f non-cash items f r o m "balances d u e t o banks."
Reserves against time deposits.
C O N F E R E N C E
G O V E R N O R S
May 9 - 12, 1927.
Washington,
D . ©
First Day's Session, Monday, M a y 9.
Morn in
The meeting was called t o order a t 10:20 o*clock a. M e
PRESENT; G o v e r n o r Crissinger
Messrs, Platt, Miller, Hamlin, James, and
Cunningham
Governors Harding, Strong, Norris, Fancher,
Seay, Wellborn, McDougal, Biggs,
Young, Bailey, Talley, and Calkins
Mr, Harrison, Secretary.
S
r
,
SUPPLEMENTARY Member bank stamping on cashier's check “not
TOPIC VI. A p a y a b l e through Federal reserve bank.”
( 1 )
(See also paragraphs 2 and 4)
Atthe request of Governor Crissinger, Mr. Newton D. Baker
the legality
made a statement t o the Conference o f his views concerning
of the action o f the First National Bank o f Hartford, Ala., i n stamping
on its cashier's cheeks the phrase “not payable through the Federal R e
serve Bank of Atlanta," and outlined his tentative opinion a s to the
possible steps t o b e taken a t the present time:
7
(
1
so
) T o amon é the regulations o f the Federal Reserve Board
&
as to prohibit the use o f such a legend o n a member bank's check o r
depositor's check;
(2) T o have the Federal Reserve Board request the Comptroller
of the Curreney to bring to the attention o f member bank directors any
violation o f such regulation a n d penalties f o r such violation;
acéount
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Federal Reserve Bank of St. Louis
{3) T o have the Federal reserve bank charge to the reserve
o f the member bank a n y such checks, whether eashier*s checks o r
depositor's checks, i f returned unpaid;
(4) A n y such checks returned b y a member bank t o the
Federal reserve bank t o b e held b y the Federal Reserve Bank o f
Atlanta, with notice t o the member bank that its account has been
charged,
After Zeneral discussion o f the suggestions of Mr, Baker,
the joint conference adjourned at 12 o'clock, and the separate
Governors Conference convened.
(See pages 3 = 70 stenographic record)
o cashier's check "not
SUPPLEMENTARY Member bank s t a m p i n gn
TOPIC VI. A . p a y a b l e through Federal reserve bank.”
‘Gee also paragraphs 1 and 4)
The Gonference discussed the points raised i n Mr. Baker*s
discussion o f the legend stamped on certain checks payable a t the
First National B a n k o f Hartford, A l a ,
a n d without formal a¢tion i t
was generally agreed (1) that Mr. Baker should be requested to consult
with the Federal Reserve Bank of Atlanta to see whether it would be
feasible to have the matter settled amicably before taking the aetion
proposed b y Mr, hess: (2) that i f it should be decided not to attempt
to negotiate t h e difficulties, t h e n t h e Conference favors t h e procedure
proposed b y Mr, Baker and suggests that he should send to each of the
Federal reserve banks a written outline o f that procedure s o that they
may be guided accordingly; (3) that each Federal reserve bank should be
provided with copies o f the suggested amendments t o Regulation J and
bank circulars i n order to give them a n opportunity to consider the pro-
posed changes; ( 4 ) that each Federal reserve bank should give instructions to its transit department to be on the lookout for such checks;
and ($) that consideration should b e given t o the possible effect o f
a @hange i n the regulations o n other banks not now using this legend,
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Federal Reserve Bank of St. Louis
At12:30 o'clock the conference adjourned in order to per
mit the members of the Open Market Investment Committee to hold a
meet ing.
First Day's Session, Monday, May 9.
Afternoon
The meeting was called to order at 3:15 o'¢elock.
Topic ¥. H , T h e possible effect of decision of Supreme
Court o f Texas i n rendering trade accep-
tances non=negotiable where they contain
the clause "The obligation of the acceptor
hereof arises out of the purchase of goods
from the drawer, maturity being in con form=
ity with the-original terms of purchase.”
n the
case
This decision was renderedA i
tenance tacenganeah e e aeneceearia ena acn R A a I E
RS
R E S RIT IONE S
styled Lane Co, vse Crum et al, i n the fol»
lowing opinion: “For an instrument to be
negotiable, the obligation of the maker
must arise exclusively f r o m the instrument.
No obligation arising f r o m a collateral
transaetion c a n b e § r t e d i n t o the terms
of the instrument without destroying the
negotiability o f the instrument,”
(See _also paragraph 73)
Various suggestions relative to the amendment of the legend
now used on trade acceptances were discussed. ( S e e also paragraph 13)
(See pages 8 3 = 87 stenographic record)
SUPPLEMENTARY Member bank stamping o n cashier's check “not
( 4 )
r i c V i . A . p a y a b l e through Federal reserve bank."
(See a l s o paragraphs 1
e
and 2
a
l
At this =o int Mr. Baker returned t o the meeting and
Governor Strong reported to him the points and suggestions which had
been raised informally by the Conference {see paragraph 2). During the
tourse of the discussion, Mr. Baker suggested that he and Mr, Wyatt be~
ieved it advisable to request Mr, Parker, Counsel of the Federal Reserve
Bank of Atlanta, t o come to Washington to talk over the situation with
them and to decide whether efforts at conciliation would be worth while,
In the meantime, i t was understood that each Governor would instruct the
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Federal Reserve Bank of St. Louis
trans it department o f his bank t o watch out for checks bearing the
legend in question, to handle them in the usual course, and to forward them to the Federal Reserve Bank o f Atlanta for collection a s
usual, and that the Federal Resérve Benk of Atlanta should then
handle these checks 2s agreed upon, that is, forward them to the
member bank for collection, a n d i f returned unpaid, charge them to
the account o f the member bank under advice t o the member bank.
{See pages 87 = (06 sténoerenhac record)
At 4:15 o'clock p , m , t h e Conference adjourned i n order t o
permit the Open Market Investment Committees to meet with the Federal
Reserve Board.
Second Day's Session, Tuesday, May 10.
Morn ing
The meeting was called to order at 9:30 o*clock a, My
Topic II, A. R e p o r t o f Standing Committee o n Collections.
{Printed pages 107 = 1124 stenographic record)
Mr, Strater read the report of the Standing Committee o n Collections,
Upon jetion o f Governor Seay, i t was
—ToTED that the report be received and committed to the
study o f the various Federal reserve b a n k s w i t h t h e request that e a c h
Federal reserve bank submit i t s views o r comments concerning the pro=
posed Time Schedules t o the Standing Committee o n Collections before
the fall Conference o f Governors, M r , Strater was requested to write
to each Federal reserve bank describing the nature o r extent o f the
comments which he would like to receive from the various Federal re<
serve banks, S
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Federal Reserve Bank of St. Louis
See pages 107 = 131 stenographie record)
Topic IV, HH, Re}
:
Mr, Kenzel distributed and then summarized the report of
the Pension Committee. After discussion o f various aspects o f the
Teport, upon motion of Governor Calkins, i t was
VOTED t o adopt the report together with its recomendations,
“including the appropriation of$10,000 for further actunrial studios,
(See pages 131 ~ 190 stenographic record)
Topic Il. © , Discussion of ruling o fF, t d
provid
that where n
b e r banke i
m
ceive their
f r o m F , R, Banks
ree r e m i t
E A atisfactor
t
c
i
t is m b e n t
F
R
to so route the items
i. Should not member banks be given
preferenes i n routing cheeks o n
nonmember benks i n the same town
or tity where such items are. de~
sired b y member banks?
2. Should F, 2, Banks send ehecks to
nonmember banks when there i s a
member bank i n the same Place?
The procedure followed i n various districts i n hendling f o r
collection items drawn upon nonmember banks was briefly discussed,
While under the present regulations of the Federal Reserve Board the
method o f handling items drawn o n nonmember banks i s not expressly
set forth, it appearedo
t be the opinion of the Conferenes that such
items should b e sent direct t o the nonmember banks o n whith d r a m i f
they desire them to be so sent and if they are willing to remit i n
satisfactory exchange; the decision a s to whether o r not the exchange
ig satisfactory being a mattor for the determination o f the Federal
“reserve bank,
Upon request o f Governors Taliey and Harding the topic was
passed without action,
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Federal Reserve Bank of St. Louis
(See pages 190 = 205 stenographie enor)
Topic II, E, Possible reductions i n number of checks
handled b y F
. 8. Banks account of automobile registrations a n d drivers’
Licenses.
After discussion this topic was passed without action.
(See pages 205 = 209 stenographic record)
Topic IT. F, Removal from Par List of nonmember banks
because o f inability or unwillingness
e e e
o furnish exchange immediately available.
t
Governor Young referred t o the fact that approximately 350
banks i n the Minneapol is district d o not remit i n immediately available
exchange and raised the question whether the Federal Rewcrve Bank o f
Minneapolis should insist o n immediately available exchange, a n d whether,
ifsuch exchange i s not provided, such banks should be struck off the
Par List, T h e general opinion seemed t o b e that. satisfactory e xchange
need not necessarily be immediately available exchange and that ins is~
tence on such exchange would result i n driving many banks i n various
districts off the Par List.
I n the circumstances, Governor Young said
that h e would let the matter rest a t least for the S g a
(See pages 209 - 221 stenographic record)
Topic If, B. Non-Cash Collections.
1. Discussion o f ruling o f F, 8. Board as
to optional charges f o r handling non-
eash collection items, and situation
arising-.from the Minneapolis method
of handling non-cash collection items.
2.Resolution of Governors Conference submitted to F. 8. Board on the question
ofnon-cash collections, (See paragraph 2 8 of Secretary's Minutes of .
November 1926 Governors Conference. }
(See also paragraphs 12, 42 and 43)
Governor Fancher reviewed the present status of the non-cash
' gollection system end referred particularly to the development since
the Board's ruling o f September 1926 which made i t optional with each
Federal reserve bank a s to whether o r not they would collect items pay-
able at street addresses. Governor Strong also referred to the many
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Federal Reserve Bank of St. Louis
t o the
discussions o f this whole subject and called attention
Con ference,
numerous votes which have been taken b y the Governors
collec
usually nine to three, i n favor of continuing the non-cash
t4on service as at present, including all items, even those payable
atstreet addresses, and without any charge.
H e felt that the Fed«
question a n d a s
eral Reserve Board should now decide this important
requested b y the November 1926 Governors Con ference apply their
ruling to all districts alike i n the interest of uniformity.
Governor Young suggested that before any action is taken the collec
problems.
tion committee should g o t o Minneapolis t o study their local
Certain Governors objected to this procedure unless the present prac=
tice i n Minneapolis i s suspended i n the meantime i n order to prevent
further dissatisfaction and complaint throughout other districts.
(See pages 221 = 257 stenographic record)
At1:00 o'clock p. m. the conference adjourned to reconvene
at 2:30 o*clock p. m.
Second Day's Session, Tuesday, M a y 10,
Afternoon
The meeting was called to order at 2:30 o'clock p, m.
SUPPLEMENTARY P a r Clearance Case of the State Bank of
TOPIC VI. B . H u g o , p i n k
(See also paragraph 2 5
= The Chairman presented t o the Conferenee the resolution
passed b y the Federal Reserve Board on May 9% recommending the employment o f Mr, Newton D , Baker t o act a s special counsel o n behalf
of all Federal reserve banks i n the par elearance case o f the State
Bank of Hugo, Minn. vs, the Federal Reserve Bank of Minneapolis.
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Federal Reserve Bank of St. Louis
After consideration by the Conference, i t was duly
VOTED t h a t the conference i s i n favor o f having appropriate
steps taken to employ Mr, Baker to act as special counsel in the
par ¢learance case of the State Bank of Hugo vs. the Federal Reserve Bank o f Minneapolis,
(See pages 258 ~ 263 stenographie record)
At3:00 o'clock p, m the conference adjourned to go into
joint session with the Federal Reserve Board t o discuss the subject
of Non-Cash Collections (Topic IT. B.),
At 3:05 o'clock p. m, the conference met i n joint session
with the Federal Reserve Board.
PRESENT: G o v e r n o r Crissinger
Messrs, Platt, Miller, Hamlin, James
and Cunn ingham
‘sovernors Harding, Strong, Norris,
Fancher, Seay, Wellborn,
MeDougal, Biggs, Young, Bailey,
Talley and Calkins
Mr. Harrison, Secretary,
Topic It, B , Non-Cash Collections,
1. Discussion o f ruling o f F, R, Board
as to optional charges f g r handling
non=cash collection items, a n d situation arising from the Minneapolis
method o f handling non=ceash collec=
tion items.
2.Resolution of Governors Conference sub
mitted t o F, R. Board o n the question
of non-cash collections, ( S e e para=
Sraph 28 of Secretary's Minutes of
November 1926 Governors Conference.)
(See also paragraphs 10, 4 2 and 43)
Upon request of Governor Crissinger, who took the chair,
Governor Fancher reviewed the recent correspondence between the
Federal Reserve Board and the Federal Reserve Bank o f Cleveland e n this
subject, Governor Strong then summarized the history of the non-cash
collect ion system and presented his objections t o the Plan
o f collec
tions now in vogue i n the Minneapolis district, There
was a genera}
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Federal Reserve Bank of St. Louis
discussion pro and con and most o f the Governors who spoke emphasized the confusion end inconsistency o f the present situation and
the likely serious effect o n the Federal reserve collection s y s t e m
throughout the rest of the country.
I t seemed to be the sense of
the Con ference a s a whole that the Federal Reserve Board, a s pre=
viously requested b y the Governors Conference, should promptly end
finally dispose o f the matter b y adopting a wmiform pract ice applicable t o all districts alike.
(See pages 263 = 337 stenographic record)
At4:55 o'clock p. m. the joint conference adjourned.
The Governors Con ference reconvened at 5:00 o'clock De Ms,
with Governors Strong and Young absent, a n d with Governor McDougal
acting a s Chairman,
I, H . “The possible effect o f decision o f Supreme
T
o
p
i
c
Court o f Texas i n rendering t r a d e a c
ceptances non-negotiable w h e r e t h e y con-
tain the clause: “The obligation o f the
acceptor hereof arises out of the purchase o f goods from the drawer, maturity
being i n conformity with the original
This decision was rendered i n the case.
styled Lane Co. vs. Crum et al, i n the
following opinion: " F o r an instrument
to b e negotiable, t h e obligation o f the
maker must arise exclusively from the
instrument.
N o obligation arising from
a collateral transaction c a n be .imported
into the terms o f the instrument without
destroying t h e negotiability o f the i n =
'Strument.”’.
(See also paragraph 3)
After discussion, u p o n motion o f Governor Seay, i t was
VOTED t h a t Mr, Harrison b e requested t o confer with the
counsel o f the Federal Reserve Board with a view to dete fmin ing
whether a revision might not be made in the form of elatise now #famped
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Federal Reserve Bank of St. Louis
10
upon trade acceptances s o as to avoid the obstacles raised i n the
decision b y the Supreme Court of Texas i n the case of Lane Co, vs.
Crum et al.
(See pages 337 - 341 stenographic record)
Topic XV. B. Revision o f Treasury Department Circular
No, 92, issued April 17, 1919, ( R e port t o be submitted b y Governor Norris. )
(See also paragraph 27).
Governor Norris reported to the Conference the steps which
hehad taken, as requested by the last Governors Conference, to procure
@ revision o f Treasury Circular No. 92, explaining that the Treasury
pe paetigetr had advised him that they would consider the matter a n d inform = < later o f their decision. M r , Harrison was ‘equnated
b y the
Conference t o ask Mr, Dewey to discuss this topic with the Governors
Conference when h e appears t o distuss the
Treasury's curreney program
under Topic IIZ. B ,
|
(See page 34] stenographic record)
Topic Tit. 8 , Treasury Currency Committee,
Report o f Progress,
Owing to Mr. Dewey's absence from town, this topic was
passed without a n y discussion, os
Topic IV. t. Report o f Leased Wire Committee.
Governor McDougal referred t o the action o f the last
Governors Con ference i n asking the Leased Wire Committee to study
the question of an additional supply of code books, After communicating with all Federal reserve banks and the Federal Reserve Board,
the committee concluded that i n view of the available supply
of code
books now held by the Federal Reserve Board, the ibatdon of having
an additional supply printed should b e deferred for another
year,
Governor McDougal also reported that there has been n o change
i n the
arrangement o f the leased wire Circuits, that the present
facilities
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Federal Reserve Bank of St. Louis
at
are ample, that the service i s satisfactory, a n d that there are no
recommendations t o b e inde b y the committee.
Upon motion o f Governor Norris, i t was
VOTED that the report of the Leased Wire Committee be re~
ceived and filed.
(See pages 3 4 2 = 343 stenographic record)
Topic iV. J . R e p o r t o f Insurance Committee.
The committee reported that since the last conference there
have been n o new matters referred t o i t for consideration. U p o n motion
of Governor Norris, i t was
VOTED t h a t the report b e received and filed.
(See pages 343 = 344 stenographic record)
SUPPLEMENTARY Report of Sub-Committee of General Committee ( 1 8 )
TOPIC VI. C.
o
n Bankers Acceptances,
(Printed on pages 344 - 345 of stenographic record)
Upon motion of Governor Fancher, i t was
VOTED t h a t the report b e received and approved and that a
copy b e transmitted t o the Federal Reserve B o a r d f o r its information.
(See pages 344 = 345 stenographic record)
e
e
'
—
Topic I. G. Desirability of amending that part of Section ( 1 9 )
13 relating t o discount of démand and sight
drafts secured b y shipping documents covering domestic shipment o f agricultural products
so_it will include all staple non=perishable
commodities, such for example a s flour, bran,
cottonseed meal, etc., a s well a s reimburse= |
ment drafts for the proceeds o f other bills
: c a r r y i n g shipping ‘documents,
(See also paragraph 3a)
Upon motion of Governor Talley, i t was
WTED t h a t this topic b e referred t o t h e Advisory Committee
of Governors o n Legislative Matters f o r consideration and recommendation.
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Federal Reserve Bank of St. Louis
(See page 346 stenographic record)
,
12
Topic Tit. A , G o l d Holdings and Payments.
It was understood that Mr, Harrison would forward to each
Governor a statement showing the amount o f payments and receipts o f
gold b y the several Federal reserve banks a s well a s a comparison o f
the present holdings of payable gold by Federal reserve banks.
{See page 347 stenographic record)
At5:45 o'clock p, m. the Conference adjourned to recon"
vene at 9:30 o'clock a. m. on Wednesday, May 11.
Third Day's Session, Wednesday, M a y 11.
Morn ing
The meeting was called to order at 9:30 o'clock a m
Topic I , D , C o n t i n u o u s Borrowers.
Report t o b e submitted b y each Federal
reserve bank showing number o f borrow=
ing benks i n each district w i t h parti-
cular reference t o number o f banks which
have b e e n borrowing f o r a year o r more,
the amoumt o f their capital, surplus and
total resources, a n d the average amount
of their borrowings from the Federal re=
serve bank, (See paragraph 5 of Secre> |
tary's Minutes o f November 1926 Governors
Con ference. }
Baeh Governor reported t o the conference the number o f bor=
rowing banks i n his district w i t h particular reference t o the number
of banks which have been borrowing f o r a year o r more a s well a s the
average amount o f such borrowings,
(See pages 349 = 356 stenographic record)
At this point Governor McDougal took the chair.
eeeneene
pes
at
Topic I. BE. S h o u l d notes held b y a momber bank bearing en=
dorsement o f officers of nonmember banks be
considered eligible for rediscount at F. R,
Banks? (Seo Board letter X-4813 dated
March 22, 1927.)
Upon motion of Governor Harding, i t was
VOTED t h a t i n the opinion o f the Conference a n y note offered
for rediscount which i s endorsed b y m officer o f a nonmember bank puts
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Federal Reserve Bank of St. Louis
— _ — _ —
(22)
13
the Federal reserve b a n k o n not ice t o invest igate t h e facts a n d
if the facts show that the note is not being offered i n effect
for rediscount f o r the benefit of the nonmember bank, there i s
nothing i n the endorsement t o impair the eligibility of the paper.
It was also the sense o f the Conference that there i s no need for
a ruling b y the Federal Reserve Board o n this subject. .
(See pages 356 = 360 stenographic record} ;
Topic IV, F , S h o u l d not F y 2. Banks b e reimbursed b y
Federal Land Benks for expense involved
in paying Federal Farm Loan ‘coupons?
At the last Conference i t was voted
that each Governor submit a new ssti~
mate o f expense involved i n handling
these coupons. ( S e e paragraph 4) of
Secretary's Minutes o f November 1 2 2 6
Governors Conference.)
Each Governor reported to the Conference an estimate of
the cost involved in paying Federal Farm Loan coupons, Governor Seay
moved i t to be the sense of the Conference that Federal reserve banks
o
f the expense involved in paying Federal Farm
should be r e i m b u r s e dr
Loan coupons b u t n o vote w a s taken. upon this resolution. G o v e r n o r Talley
Suggested adding the phrase “if and when such reimbursement might be
asked b y the Federal reserve bank." Governor Seay accepted this suggested amendment provided a further addit ion should b e made t o the
resolution, that is, “if the amount i n v o l v e ds
i sufficient t o justify
the Federal reserve bank ask ing for at." Governors Seay and Talley
pointed out that this resolution would observe the principle involved
but leave to each Federal reserve bank to decide whether re imbursemont
was worth while o r not.
After further discussion and consideration of the suggested
resolution,
m o t i o n o f Governor Calkins, i t was
VOTED t o be the sense of the Conference that i n principle
a Federal reserve bank should b e reimbursed for services performed
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Federal Reserve Bank of St. Louis
i4
for Government agencies other than the Treasury, when the expenéé
involved i s sufficient t o justify such bank's asking f o r reimburse- —
ment.
(See pages 360 =~ 369 stenographic record)
Topic I. G, Desirability of amending that part of Section
13 relating t o d i s c o u n tf
o demand and sight
drafts secured b y shipping documents cover=
ding domestic shipment o f agricultural pro-
ducts so it will include all staple nonperishable commodities, s u c h for example a s
flour, bran, cottonseed meal, etec., a s well
as reimbursement drafts for the proceeds o f
other bills carrying shipping documents, —
(See also paragraph 19)
Upon further consideration of the earlier action on this
topic ( s e e parag raph 19) t h e suggestion w a s made that t h e matter might
properly b e handled b y a ruling o f the Federal asabee Board and upon
motion of Governor Harding, i t was
VOTED t h a t the Federal Reserve Board b e asked t o reconsider.
its previous ruling to the effect that bran, flour, cottonseed meal,
etc., a r e not non-perishable readily marketable steple agricultural
products within the meaning of Section 13, i t being pointed out that
the particular paragraph i n question does not contain the Limitation
"in the raw state" as in the previous paragraph of the law. I t was
understood that this action does not revoke the action taken Tuesday,
May 10, under Topic I, G,
— gen
(See pages 369 = 376 stenographic record)
Governor
o s
t o o k the chair.
SUPPLEMENTARY P a r Clearance Case of the State Bank of
TOPIC Vi. B. H u g o , Minn.
(See also paragraph 11)
The Chairman Sesik Gc ike Con tieusee a telegram from
Mr. Baker a¢eepting the appointment o f special counsel i n the
Par Clearance Case of the State Bank of Hugo, Minn., vs. Federal
Reserve Bank of Minneapolis,
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Federal Reserve Bank of St. Louis
_.(See page 376 stenogréfihie record)
Lo
At10:50 o'clock a, m, Mr, Mills, Undersecretary of the
Treasury, joined the meeting a n d off the record discussed the
Treasury's fiscal program.
Topic V. A. Possible improvements i n method o f allot=
tine Treasury Notes o r Certificates,
(with particuiar reference to desirability
of reasonably firm district quotas. }
The Conference discussed with Mr. Mills possible means of
allott ing certificates i n some manner that would avoid unnecessary
padding of subscriptions. Without formal action, i t was understood
that t h e Federal Reserve B a n k s o f Boston, Philadelphia, Cleveland,
Dallas and New York would each designate a representative t o serve
on a committee subject t o the call o f Mr. Mills t o go t o Washington
to discuss this topic a s well a s the revision o f Treasury Department
Circular No. 9 2 (see paragraph 14).
I t was. suggested that Mr. Mills
would indicate t o the committee w h a t d a t a should b e prepared i n ad~
vance o f the meet ing.
(See pages 377 - 389 stenographic record)
Topic ITI. C. Future Currency Program.
Has the time approached t o consider i n
anticip: .ion some program as to the
two p e r cent Consols n o w held t o s é
cure national b a n k note circulation?
Governor Strong referred to the possible retirement o f
national bank currency and all the Governors expressed their views
as well a s possible reactions o f national banks i n their districts.
Tt bbogaaas t o be the consensus o f opinion that the larger national
banks would have but Little object ion to the retirement o f nat ional
bank notes but that certain o f the smaller banks, largely for sentimental reasons, might feel reluctant t o abandon the circulation
privilege.
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Federal Reserve Bank of St. Louis
(See pages 389 - 395 stenographic record)
16
At12:30 otclock p. m. Mr. Mills left the meeting and
the Conference adjourned until 2:30 o'clock p. m. i n order that
the Open Market Investment Committee might meet i n the meant ime.
Third Day's Session, Wednesday, M a y 11.
Afternoon
a
w called to order at 2:00 o'clock Pe Me
The m e e t i n g s
Topic IV. A, Proposed Revision of F. 8. Board Regula=
(
2
tions. ( S e e Board letter X=4804 dated
March 4, 1927.)
(See also paragraphs 30, 3 4 and 39)
Upon motion of Governor Fancher, i t was
VOTED that the Conference recommend to the Federal Re~
serve Board that, i f agreeable t o the Doard, a
committee represent-
ing some Federal reserve banks b e asked t o assist the counsel o f the
Board i n giving ‘consideration t o the suggestions made b y the various
Federal reserve banks relative t o the preliminary redraft o f the
Board's Regulations prepared b y the counsel of the Federal Reserve
Board, a n d to assist the counsel i n redrafting the new regulations,
with the request that each Federal reserve bank b e given a n oppor-
tunity to examine such redraft before final promulgation.
I t was
understood that a n y proposed suggestions would b e mailed direct t o
Mr, Harrison s o that they could be available for use b y the Federal
Reserve Board's counsel and the committee, i f approved b y the Board,
(See pages 396 = 397 stenographic record)
Topic IV. C, Regulation relative to method of computing
member b a n k reserves f o r penalties,
(See also paragraph 29)
It was understood that this topic would b e referred t o the
Committee w h i c h t h e conference suggested should b e appointed t o assist
the counsel o f the Federal Reserve B o a r d i n redrafting n e w regulations
jn the light o f suggestions received from all the Federal reserve banks,
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Federal Reserve Bank of St. Louis
{See pages 397 = 399 stenographic record)
9
)
17
Topic 1. A. O p e n Market Operations.
(See also paragraph 45)
The secretary distributed to the Conference the final
draft of the report of the Open Market Investment Committee which
was t o b e taken u p with the Federal Reserve Board later on i n its
meeting with the Open Market Investment Committee. U p o n motion,
it was unanimously
VOTED t h a t the report o f the Open Market Investment
Committee be approved. PIES o s . .
e
e
(See pages 399 = 405; 411 stenographic record)
SUPPLEMENTARY Purchase o f Gold Abroad.
TOPIC VI. D.
Mr, Harrison discussed the recent purchase o f gold b y the
Federal Reserve Bank of New York to be held under earmark abroad
and asked whether the other Federal reserve banks eared to. parti-
cipate with the Federal Reserve Bank of New, York. A l l of the
Governors agreed t o part Léipate although i t was understood that
their action was subject t o ratification t y their respect ive
boards o f directors.
{See pages 405 <- 411 stenographic record)
T
o
p
i
c
IV. D. MeFadden Bill. (H. 3. 2)
.
1
(
3
. Effects o f McFadden bill o n branch
banking i n the different districts.
(Each district i s asked to. submit
a report.) ;
2. Prospects o f State banks converting
into national banks i n view ‘of
terms of McFadden bill, (Each
district i s asked t o submit a
re
port.
Bach Governor reported concern ing t h e effects o f the
ReFatden Wiki oa branch teak dnc Sc hha Biatekek oe salle ce ihe
subject of conversion of State banks Seto nebional banks. T h e viows
expressed indicate that there i s not yet any substantial evidence o f
a tendency o n the part o f State banks t o convert into nationak Banks
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Federal Reserve Bank of St. Louis
3
)
i8
and little noticeable effect o n branch banking i n the various
&
d i s t r i c t s except i n a few localities,
(See pages 411 = 424 stenographic record)
Topic IV, D, McFadden Bill. (H.R. 2) =
3. A r e there a n y other questions requiring
discussion w h i c h a r e raised b y enact=
ment o f McFadden bill?
(See a l s o paregraphs 2 9 a n d 39)
Reserves Against Time Deposits.
I n consideration o f
Topic IV. D , 3,, which was placed o n the program merely a s a n invitation f o r suggestions o r discussion, G o v e r n o r Norris a n d others
present urged the need for revision o f the Regulations o f the Fed~
eral Reserve Board o n the question o f reserves against time deposits,
It was t h e sense o f the Conference t h a t t h e increase i n the amount o f
deposits, w h i c h a r e subject o n l y t o the three p e r cent reserve,
i s @
growing evil and needs early attention. Governor Seay proposed that
the special committee, w h i c h t h e Conference suggested should b e ap-
pointed t o study the new Regulations o f the Federal Reserve Board,
might b e requested t o take u p this question. with the Board, b u t
Governor Harding expressed the view that the matter could b e handled
only b y an amendment t o the law and indicated that h e thinks some
maximum limit must be placed on the amount that may be carried aS @ ahve
imge deposit for any one account, (Continued under paragraph 39)
(See pages 425 = 432 stenographic record)
Topic IV. E. Agencies o f Federal Reserve Banks.
l. C u b a n Agency.
2.Possibility of establishment o f other
agencies.
This topic was w i t h d r a w t
a the request o f Governor Strong,
Topic IV, G, A i r Mail Service. (
1. T o what extent i s it being used or should
be used b y F, 8. Banks?
2. I t s effect o n Time Schedules?
There w a s a
general discussion o f the u s e o f the a i r mail
service f o r collection items,
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Federal Reserve Bank of St. Louis
I t w a s t h e consensus o f views t h a t t h e
36)
14
t o justify
air ma4l service has not yet had sufficient experience
e
Federal reserve banks
g e n e r a l use for this purpose a n d that the
the Standing
should await further reports a n d recommendations b y
to the
Committee o n Collections, which, a s indicated i n its report
April 1925 Conference, will keep this matter under consideration.
(See pages 433 - 440 stenographic record)
Topic IV. K. Report o f Committee o n Safekeeping.
(Printed on pages 440 = 461 stenographic
record)
After general discussion o f the report o f the comnittes
filed with the Federal Reserve Board, i t appeared that She recommen ~
dations contained i n the report are consistent with procedure now
generally followed b y most Federal reserve banks, U p o n motion of
Governor McDougal, i t was
WTED t h a t the report b e received and approved.
Governor Calkins requested to be recorded as not voting
‘because o f the fact that h e has not had opportunity to study the
report.
(See pages 440 = 466 stenographic record)
Topic TV, L. Report o f Advisory Committee o f Governors
on Legislative Matters.
Governor Seay reported thet there has been n o meeting o f
the Advisory Committee o f Governors o n Legislative Matters since the
Last conference because n o new matters have been referred t o i t for
consideration a n d because the Federal Reserve Board had reported t o
him that they had no special matters t o refer t o the committee.
{See ‘pages 466 - 467 stenographic record)
SUPPLEMENTARY Reserves against Time Deposits.
TOPIC VI, F
(See also paragraphs 2 9 and 34)
-Upon further consideration o f this topic, which was dis~
cussed under paragraph 34,-upon motion of Governor Harding, i t was
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Federal Reserve Bank of St. Louis
view
VOTED t h a t t h e Governors o f the Federal reserve banks
20
with grave concern the weakening o f the reserve. pos it ion of the
banks o f the c o m t r y due t o the constantly growing tendency to
transfer what are i n effect demand deposits into so~called time
certificates o r savings accounts, a n d respectfully suggest that
ifthe Board finds that it cannot adequately cope with this tendeney b y regulat ion, steps should b e tikon t o impress upon the
Congress, a t its next session, the importance of amending the reserve provisions o f the Federal Reserve Act i n such manner as to
safeguard the banking position o f the country.
(See pages 466 » 466 stenographic record)
SUPPLEMENTARY Deduction of Non-Cash Items from “Balances
( 4 0 )
TQPEC Vie Ee D u e _toBanks."
Governor Fancher presented to the Conference for cons idera~
tion the rulirig of the Federal Reserve Board contained in its letter
ofMarch 24, 1927, (x-4816), which refers to an earlier ruling dated
October 2%, 1926, (X-4705), o n the question of the de tick Jon of non«
cash items im transit from “balances due to banks" for the purpose of
determining reserve requirements, U p o n motion o f Governor Fancher,
it was
VOTED that the onference respectfully call to the atten-
tion of the Federal Reserve Board the fact that the ruling in its
etter of March 24, 1927, (X-4816), in reply to letters from the
Federal Reserve Bank of New York dated November 8, 1926, and February
¥8, 192%, will have the effect, if generatly adopted as apractice
‘by member benks, o f ‘ c a t e vefy sonsiderably the liability i n the
item “due to banks" upon which the reserve calculation is made,
which appears t o b e unjustifiable because o f the fact that the
items so deducted need not have been oretited to the depositors"
accounts under the terms of the Board's ruling.
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Federal Reserve Bank of St. Louis
{ See pages 468 - 469 stenographic record)
3
21
Topic T. F. Strone Stabilization Bill. (H. Ry 7895)
Governor Strong discussed the objects of H, R, 7895, :
known as the Strong Stabilization Bill, and indicated that Congressman Strong i s under the impression that there was some c o n
certed effort o n the part o f the Federal reserve banks t o oppose
his bill. A l l of those Governors present, who had written to
Congressman Strong, stated that they had done s o without a n y 6 x
change of views with any other Governorg, and Governor Strong was
authorized t o s o advise Congressman Strong.
(See pages 469 - 473 stenographic record)
Topic Il. B . N o n ~ C a s h Collections.
(Seo also paragraphs 10, 1 2 end 43)
Governor Seay made a motion that the Conference should re~
affirm the resolution adopted a t the last Conference o f Governors
and urge upon the Federal Reserve Board the need for its early action,
B e fore any action was taken, Governor Harding suggested the
consideration o f separate resolutions o n the advisability o f uniformity and the need for a prompt ruling one way or another, U p o n
request o f some o f the Governors action was postponed untii the Con-
ference reconvenes Thursday, M a y 12.
(See pages 474 ~ 479 stenographic record)
At 5:00 o'clock p. m the Con ference adjourned to reconvene Thursday morning, May 12, a t 9:30 o’clock a. m.
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Federal Reserve Bank of St. Louis
Fourth Day®s Session, Thursday, M a y 22.
Morn ing
The meeting was called to order at 9:45 o'clock a, m
Topic II, B. Non-Cash Collections.
(See also paragraphs 10, 12 and 42)
Upon motion o f Governor Harding, i t was
VOTED t h a t a s c e finite resomnendations
o n the subject o f
non=cash collections have been made a t sucecssive Conferences o f
Governors f o r the past three years t o the Federal Reserve Board, after
full discussion, a n d as all members o f the Conference a s well a s members o f the Federal Reserve Board are fully informed o n the subject,
there i s no further information necessary i n order t o enable anyone
to vote intelligently o n this subject.
Nine Governors voted i n the affirmative. Governors Young,
Bailey and Wellborn voted i n the negative.
Upon motion of Governor Harding, i t was then
VOTED t h a t the Conference believes that this question
Should not be held i n abeyance any longer, and requests the Fed=
eral Reserve Board to make, a t an early date, a definite ruling
on the subject one way or the other,
Ten Governors v o t e d i n the affirmative.
G o v e r n o r s Young
and Wellborn voted i n the negative.
Upon motion o f Governor Harding, i t was then
VOTED t h a t i n the opinion o f the Conference i t is de-
sirable that any ruling made by the Federal Reserve Board should be
uniform with respect to its application a t all Federal reserve banks.
Nine Governors voted i n the affirmative. Governors Young,
Bailey and Wellborn voted i n the negative.
_Upon motion of Governor Hardirg, i t was then
VOTED t h a t the collection o f ali non~vash items, including
those payable a t street addresses, should b e continued a t all Federal
reserve banks.
Nine Governors voted i n the affirmative. Governors
Young,
Bailey and Wellborn voted i n the negative.
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Federal Reserve Bank of St. Louis
(See pages 481 = 486 stenographic record)
23
Topic I. C , Relations with Foreign Banks,
Mr, Harrison submitted t o the Conference o f f t h e record
a report o f the relations with foreign banks and discussed with
the Conference the monetary situation abroad and the progress towards restoration o f the gold standard.
(See pages 486 = 487 stenographic record)
At10:30 o'clock a. C o n f e r e n c e adjourned
meet w i t h t h e
that the Open Market Investmen
eral Reserve Board.
K H A K I
reconvened a t 12:15 o'clock p , m
Open Market Operations.
l so paragraph
a
31)
At the request of Governor Strong, Governor Harding re=
n the substance ofthe
n meeting
ported to the Conference
of the Open
Market Investment Committee w i t h t h e Federal Reserve Board.
At1:00 o’clock p. m. the Conference adjourned until
2:30 when the Conference was t o reconvene i n joint session with
the Federal Reserve Board.
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Federal Reserve Bank of St. Louis
Harrison,
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Federal Reserve Bank of St. Louis
@FedFRASER