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Secretary's Minutes
G O V E R N O R S
C O N F E R E N C E
November 2 — 4, 1925
Washington, D. C.
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Federal Reserve Bank of St. Louis
e e s
INDEX TO SECRETARY'S MINUTES
GOVERNORS CONFERENCE
NOVEMBER 2 - 4, 1925
Paragraph i n
Secretary's
Minutes
’ Advances t o member banks o n their nromissory note f o r longer period
than 15 days which is now the law, ‘Yould it be advisable for F,
R. Banks t o make
Agents* Committee on Member Bank Reserves, Renort o f - - * - - - American Bankers Association, Advisability o f discontinuing
' r a c t i c e o f disnlaying Federal Reserve exhibits a t A. B. A .
annual conventions
Rank examination and credit functions at F. R. Banks + - - - - + Bankers Accentances, R e p o r t o f Sub-committee o f General Committee ~
Rarton brief, Revort o f Committee o n Voluntary Services t o Federal
Reserve Board i n renly t o
Bills and certificates bought f o r foreign banks, Commissions
charged o n
Budget control o f expense o f operating F. R. Bank, Effectiveness o f
cafeterias o f F. R. Banks, Uniformity i n the operation o f
Canital t o deposits, R a t i o o f Bank
Sash Items
. Should smaller member banks b e requested t o sort c a s h items i n
accordance with Time Schedule, o r should Reserve banks average
availability o f unsorted cash letters
™elegranvhic instructions before returning c a s h items forwarded
aS non-cash items o f $500 o r over
Checks - Printing a n d numbering Government c h e c k s t o better facilitate their handling b y F. R . Banks
Class "BY director o f a F. R. Bank, Hligibility o f officer o f a n
insurance comnany f o r election a s
Collection o f non-cash items b y F. R, Banks - Reply to Rarton brief Collections, R e n o r t o f Standing Committee o n
Commissions charged o n bills and certificates bought f o r foreign
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Federal Reserve Bank of St. Louis
Paragraph i n
Secretary's
Minutes
Conventions o f American Bankers Association, P r a c t i c e o f displaying Federal Reserve exhibits a t annual
Cost o f securing revorts o f examination o f national b a n k s
Cost o f transferring o n e dollar bills f r o m o n e F , R . Bank t o
another, Should not Treasury absorb the
Counsel t o assist i n litigation o f nar clearance cases. and to act
as clearing house for legal departments o f all F. R. Banks, Permanent employment b y Board a t fixed retainer o f special
Credit, S h o u l d F . R . Banks assume resvonsibility o f determining
solvency o r insolvency o f member banks i n handling transit
items o r i n the extension o f
Credit functions a t F . R . Banks
Criticisms o f F, R. System Currency P r o g r a m -
vast a n d vrosrective
<- -
Current reports b y F. R . Banks t o F. R , Board, Elimination o r consolidation o f
Deficiency i n member bank's reserves, Advisability o f revorting
chronic c a s e s t o Superintendents o f banks a n d Comptroller o f
Currency
Devosits - Ratio o f bank capital t o devosits
Direct sendings o f non-cash items
~ -
Director o f a F, R . Bank, Bligibility o f officer o f insurance
company f o r election a s Class "R" director Discount R a t e s +
Dollar bills f r o m one F. R . Bank t o another, S h o u l d n o t Treasury
absorb cost o f transferring
Bligibility o f a n officer o f insurance company for election a s
Class "RB" director o f a F. R. Bank
Elimination o r consolidation o f current reports b y F. R . Banks t o
F. R . Board
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Federal Reserve Bank of St. Louis
Paragraph i n
Secretary's
Minutes
Employment o f special counsel b y F. R . Board a t fixed retainer t o
assist i n litigation o f p a r clearance c a s e s a n d t o a c t a s clear-
ing house for legal departments o f all F. R. Banks
Mxamination o f member banks b y F. R. Banks
Exchange drafts -
Procedure i n handling
Exhibits a t annual conventions o f American Bankers Association,
Practice o f displaying - fixnense o f operating F , R . Bank, Effectiveness o f budget control o f Federal Reserve System, Criticisms -
past a n d prospective
Foreign accounts, Adjustments i n
Foreign accounts, Renort o n
Foreign banks, Commissions charged o n bills a n d certificates bought
Gold holdings and payments
Government checks - Printing and numbering Government checks t o
better facilitate their handling b y F. R . Banks
Insurance Committee, Report o f
Leased “fire Committee, Revort o f
Legislative Committee, Report o f Chairman o f
Liability o f F. R. Bank for carrying out instructions i n making
transfers f o r account o f corporations o r individuals Member bank reserves, Revort o f Agents' Committee o n
Non-cash Collections
Direct sendings o f non-cash items
Renort o f Committee o n Voluntary Services i n revly t o Barton brief Telegravhic instructions before returning non-cash items o f
“500 o r over
Oven Market Investment Committee, R e n o r t o f
Pension Committee, R e v o r t o f
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Federal Reserve Bank of St. Louis
Paragraph i n
Secretary's
Minutes
38
Procedure i n handling exchanse drafts
Promissory note o f member banks, o u l d i t be advisable for F. 2.
Banks t o make loans f o r a period longer than 1 5 days which i s n o w
the l a w
Protection -
Proper F . R . B a n k p r o t e c t i o n
Rates, Discount
Ratio o f bank carital t o devosits
Recommendations contained i n Report o f Agents' Committee o n Member
Bank Reserves
Registered mail insurance contract
Reports
Agents' Committee o n Member Rank Reserves
Committee o n Voluntary Services i n reply t o Barton brief
Foreign A c c o u n t s
Insurance Committee
Leased Y i r e Committee
Lezislative Committee
Oven Market Investment Committee
Pension Committee
Standing Committee o n Collections
Sub-committee
o f General C o m m i t t e e
o n Bankers Acceptances
Reports o f examination o f national banks, Cost o f securing
Reports b y F. R. Ranks t o F. R . Board, Elimination o r consolidation
Reserve deficiencies, Advisability o f revortins chronic cases t o
Suverintendents o f banks a n d Comytroller o f Currency
Reserves - Recommendations contained i n report o f Agents! Committee
on Member Bank Reserves
Returned non-cash items, Telegraphic instructions before returning
items o f {£500 o r over
Revision o f Time Schedule with a
view t o reduce float
Solvency o r insolvency o f member banks, I n the extension o f credit
or handling o f transit i t e m s should F. R . Banks assume resnonsi-
bility o f determining
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Paragraph i n
Secretary's
Minutes
Standing Committee o n Collections, Rerort o f
28.— 35
Telegraphic instructions before returning non-cash items o f {$500
or over = - +
40
Time Schedule
Revision o f Time Schedule
ae
Should smaller member banks b e requested t o sort cash items i n
accordance with T i m e Schedule o r should F . R . Banks average
availability o f unsorted cash letters
Transit items, S h o u l d T , R. Ranks assume responsibility o f deter-
minine solvency o r insolvency o f member banks i n the extension
of credit o r handling o f ---+-+-+-+-+s.
Uniformity i n the operation o f the cafeterias o f the F. R. Banks - Wire transfers f o r account o f corvorations o r individuals,
Liability o f F, R. Bank for carrying out instructions i n making -
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42
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PROGRAM
60 ¥
3
R N -0-8-5
C O N F E
November 2 , 1925.
Washineton ,D.C.
CREDIT TRANSACTIONS AND POLICIES
Report o f Open Market Investment Committee .
Discount Rates.
C
h
i
c
a
g
o
Credit functions a t the Federal reserve banks.
The Governors’ discussion of this topic to
be based o n the report o f the sub-committee
of deputy governors designated t o make a
study o f the bank examination a n d credit
functions a t the Federal reserve banks.
(See Board's letters of June 4, 1925, St. 4543,
and September 8, 1925, X-4416) .
The recommendations contained i n the report o f
the Agents’ Committee o n Member Bank Reserves.
(Report forwarded t o each Governor b y Chairman
. R. Board
F
ofCommittee on June 30, 1925).
Advisability o f a n arrangement whereby t h e reserve
banks would report chronic cases o f reserve deficiencies t o the superintendents o f banks i n
the various states and to the Comptroller o f
the Currency, after a n understanding h a s been
reached with these officials that they will
promptly communicate with the directors o f the
banks concerned, acquainting them with the financial loss which the bank i s suffering through
its failure t o maintain required reserves and
calling their attention t o the fact that they
F
are continually violating the law.
F, R a t i o of Bank Capital to Deposits
N
G. I n the extension o f credit o r handling transit
items i s it the duty o f Federal reserve banks
to assume the responsibility o f determining the
solvency o r insolvency o f member banks * I s not
this entirely within the province and a duty of
the Comptroller o f the Currency? _
. R. Board
e
w York
K a n s a s City
Would i t be advisable for Federal reserve banks
to make loans t o member banks 6 n their promissory note for a longer period than the fifteen
days, which is now the law! (See paragraph 13,
Minutes of May, 1924 Governors Conference) . K a n s a s City
II. C O L L E C T I O N S A N D CLEARINGS
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Federal Reserve Bank of St. Louis
A. R e p o r t o f Standing Committee o n Collections,
B. C o l l e c t i o n o f non-cash items b y Federal
reserve banks.
Report o f Committee o n Voluntary Services
to Federal Reserve Board i n reply t o
Barton brief.
C
l
e
v
e
l
a
n
d
Revision o f Time Schedule with a view to reduce float a n d avoid existing inequalities;
particularly t o either abolish f i v e a n d s i x
day points, o r else make t h e m universal.
Recommended: ‘
That committee b e appointed upon which
the Federal Reserve Board will b e rep-
resented.
P
h
i
l
a
d
Procedure i n handling exchange drafts.
e
S
l
p
a
h
i
a
n Francisco
Government checks.
Recommended:
That the Standing Committee o n Collections
be requested t o study the question o f
having government checks printed a n d
numbered i n some such way a s better t o
facilitate their handling by Federal reserve banks.
N
e
w York
Returned non-cash items.
Recommended:
That Federal reserve banks telegraph f o r
instructions before returning non-cash
items, o r cash items forwarded as noncash items, o f $500 or over which are
not being handled for any reason.
N
e
w York
Direct sendings o f non-cash items.
Discussion o f the advisability o f encouraging those member banks having a substantial
number o f out-of-district non-cash items t o
send s u c h items direct t o t h e Federal reserve
bank o r branch o f the district where payable.
N
e
w York
Should Federal reserve banks request smaller
member banks t o sort cash items strictly i n
accordance with Time Schedule, o r should
Reserve banks average availability o f unsorted cash letters?
N
e
w York
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COIN, CURRENCY AND CIRCULATION
Ao C u r r e n c y program,
T
r
e
a
s
u
r
y
Should not the Treasury Department absorb
the cost o f transferring o n e dollar bills
from o n e Federal reserve bank t o another?
Gold holdings a n d payments.
K
a
N
n
s
a
s City
w York
e
OPERATION A N D ADMINISTRATION
Ae C o s t o f securing reports o f examination o f
U
n
f
i
n
i
national banks,
s
h
e
d business
Effectiveness o f budget control o f the e x pense o f operating a Federal reserve bank.
At the present t i m e t h e Federal Reserve
Ranks o f New York, Philadelphia, Cleveland,
Richmond, Chicago, Minneapolis and San
Frencisco a r e operating under budgets pre-
pared along the lines suggested b y the
Roard's Pudget Committee (Messrs. Rounds,
Fleming and Smead),
It i s expected that t h e discussion o f
this subject a t the conference will b e
led b y the Governors o f those banks f o r
the benefit o f the Governors o f the other
banks which h a v e not y e t adopted a budget
system,
F
. R . Board
Flimination o r consolidation o f current reports
by Federal reserve banks t o the Federal Reserve
Board.
Suggested that e a c h bank prepare a n estimate
of the cost involved i n preparing reports
now forwarded b y them t o the Federal Reserve
Roard, together with a separate list o f any
reports which t h e Reserve bank feels that
the Federal Reserve Roard m a y properly b e
N
requested t o eliminate o r modify.
e
w York
Proper Federal reserve bank protection.
The Roard feels that e a c h Governor should
come t o t h e conference prepared t o discuss
the organization a n d scope o f the work o f
the protective staff a t his bank a n d that
the conference should take steps t o f o r m e
late s o m e general p l a n b y which e a c h bank
can b e guided i n the matter.
F
. R e Board
Bligibility o f an officer o f a n insurance
company for election a s Class "B" director
of a Federal reserve bank.
The Board desires a critical discussion
of i t s ruling o n this subject contained
in its letter o f July 2, 1925, X-4373,
F
. R e Board
F, Uniformity i n the operation of the cafeterias
of the Federal reserve banks, ( S e e Board's
letter of September 9, 1925, X-4418),
G, Permanent employment b y the Board at a fixed
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Federal Reserve Bank of St. Louis
retainer o f special counsel o f outstanding
ability t o assist i n litigation, such a s
the so-called Pascagoula a n d Brookings p a r
clearance cases, a n d to act a s aclearing
house f o r the legal départments o f all
Federal reserve banks.
This topic has a s its basis a suggestion
of the Governor o f the Federal Reserve
Bank o f Dallas and the question was considered a t the conference o f c o u n s e l fo
the Federal reserve banks held i n Washinge
ton last July,
T h a t conference passed
a resolution t o the effect that the employment o f such special counsel i s not
essential t o the proper administration o f
the Federal reserve banks and recommended
that the banks continue, a s heretofore,
to employ special counsel t o assist i n
litigation o f System-wide interest, when
in the judgment o f counsel f o r a n y reserve
bank concerned, t h e occasion requires such
employment a n d the other banks a r e a g r e e
able,
F
Limited health insurance for employees.
, R , Board
S
a
n Francisco
Commissions charged o n bills and certificates
bougkt for foreign banks,
N
e
w York
e
w York
e
w York
Criticisms o f Federal Reserve System - past and
prospective, :
It is suggested that there b e a n exchange
of views a s t o what steps a r e taken a t each
Reserve Bank t o make eure that the Bank and
the System are not properly subject t o
criticism because o f any practices o f the
bank o r its personnel,
N
Report on Foreign Accounts
N
Report o f sub-committee o f General Committee o n
Bankers Aeceptances,
Report of Chairman of Committee o n Legislative
Matters,
Report o f Committee o n Standardization and Pyrchase
of Supplies,
Report o f Leased Wire Committee
Report o f Insurance Committee
Report of Pension Committee
RELATIONS WITH MEMBER BANKS AND THE PUBLIC
Ay A d v i s a b i l i t y o f discontinuing the practice o f
displaying so-called Federal reserve exhibits
at the annual conventions o f the American
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Bankers Association,
F
, R , Board
G O V E R N O R S
C O N F U R E N C S E
November 2
- 4, 1925
Washington,
D . C.
First Day's Seesion, Monday, November 2
Morning
The meeting was called t o order a t 10:00 o'clock a , m,
Present:
Governors Harding, Strong, Norris, Fancher,
Seay, Welltorn, McDougal, Biggs, Young,
Bailey, Talley and Calkins,
Mr, Harrison, Secretary,
ere ee nae
A
E
A
E S E T LED
Topic I. C. C r e d i t functions at thé Federal reserve banks.
The Governors' discussion o f this topic t o
be based o n the report o f the sub-committee
of deputy governors designated t o make a
study o f the b a n k examination a n d credit
functions a t the Federal reserve banks.
Upon discussion o f the report o f the sub-committee concerning
eredit functions o f the Federal reserve banks, jit appeared t o b e the concensus o f the conference t h a t a l l Federal reserve banks were i n agreement
with the report except t h a t part which recommended t h a t Reserve banks n o
longer furnish gratuitously blank forms o f credit statements,
I t was felt
that the very slight expense incident t o providing such blank statements was
more than offset b y the resulting advantage and convenience t o the Reserve
banks, W h e r e u p o n , u p o n motion o f Governor Young,
i t was
VOTED t o approve the report o f the sub-committee with the exception o f the recommendation o f the committee t h a t Reserve banks n o longer
furnish d l a n k f o r m s
o f credit s t a t e m e n t s f r e e o f charge,
Schwann y
e
a
s aEste;
m
e
t r
(See pages 3 - 13 stenographic record)
Examination o f Member Banks b y Federal Reserve Banks,
After a long discussion o f the subject o f examinationsby Federal
reserve banks and the responsibilities o f the Federal Reserve System for
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Federal Reserve Bank of St. Louis
Z
a
&
t
h
e supervision o f member banks, upon motion o f Governor Young, i t was
VOTED t h a t S x e t a a ’ i ous b y Federal reserve banks b e confined
to credit investigations, e x c e p t where t h e circumstances m i g h t m a k e a
complete examination necessary o r advisable,
(See pages 6 - 15 stenographic record)
Topic I . D . R e p o r t o f the Agents' Committee o n Member Bank
Reserves.
Governor Seay reported the action taken b y the Advisory Com-
mittee o f Governors o n Legislative Matters coneerning the several recommendations i n the report o f the Agents’ Committee o n Member Bank Reserves
and pointed out that the Advisory Committee feels that i t is inadvisable
to propose a n y change i n member b a n k reserves a t thie time i f a n amendment
to the l a w i s required t o accomplish it.
A f t e r t h e report o f Governor
Seay, t h e conference discuesed a t some length t h e whole question o f member
bank reserves a s presented b y the report o f the Agents" Committee, a n d upon
motion o f Governor Harding, i t was
VOTED + o concur with the reported action o f the Agents’ Conference that n o changes i n member bank reserves which require a n amendment
to the l a w should b e made a t this time,
(See pages 15 + 32 stenographic record)
The conference was later advised (see pages 5 4 - 56 stenographic
record) t h a t t h e agents’ Conference opposed a s k i n g f o r legislation o n l y
conditionally, s o that the following recommendations o f the Federal Reserve
Agents' Committee w e r e t h e n reconsidered b y the Governors
o n their merits:
BY
(See pages 1 and 2 of Agents’ report dated May 12, 1925)
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1, Deduction o f Checks i n Process o f Collection.
Permit the deduction from demand deposits o f
(a) exchanges for clearing house, (b) checks on other banks
in the same place a n d (c) checks i n process o f collection
(whether w i t h Federal Reserve Banks a r correspondent banks)
according t o Federal Reserve echedule o f time required f o r
collection o f checks,
Upon motion o f Governor Norris, i t was
VOTED t h a t , i n the opinion of the conference, the recommendation
of the committee i s inconsistent w i t h t h e fundamental vrinciple t h a t
& check i n the process o f collection i s not a balance due from a bank,
and that therefore the recommendation should not b e approved.
(See pages 59 and 60 stenographic record)
2- N e t Difference o f Amounts D u e T o a n d F r o m
other Banks.
Retain the present provision o f the law that "the
net d i f f e r e n c e f
o smounts due t o and from other barks” shall
be taken a s the basis o f ascertaining t h e n e t amount o f balances
due t o banks.
Upon consideration o f the recommendation o f the Agents’ Committee, and o n motion o f Governor Fancher, i t was
VOTED
+ o concur with the recommendation o f the committee.
(See page 60 stenograrhic record)
3. Increase i n Reserves Against Bank Dalmees Provide that the reserve retired t o be held rgainst
net balances due t o banks b e 10 per cent for all member banks
except those in New York City and Chicago. T h i s involves a n
increase from the present requirement o f 7 per cent for
country bangs.
Upon motion o f Governor Seay, i t was
VOTZD
t h a t t h e conference agree w i t h t h e principle recited i n
this recommendation, but that since it would require legisintion, i t is
inadvisable a t this time.
(See pages 66 and 61 stenogravhic record)
4. Reserves Acainst Covernment Denosits -
(
7
)
Provide that reserve shall te carried against government deposits a t the same rate 1 5 against demand derositsUpon motion o f Governor Norris, i t was
YOTE
t
o approve the recommendation that reserves should b e
carriec against sovernment deposits with the understanding that the Federal
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Federal Reserve Bank of St. Louis
4
Reserve Board o r other appropriate authorities should determine wiether
any effort should be made t e secure the necessary amendment t o the law.
(See pages 61 - 63 stenographic record)
Other topics i n the Federal Reserve Agents’ Committee's Report
on Member Bank Reserves were considered i n turn.
Adjusted credit a n d debits t o member banks f o r
currency shipments.
Inasmuch a s the Conference o f Governors had previously voted o n
the question o f considering currency i n transit i n determining the amount
of penalties for deficiencies i n reserves, n o resolution was offered.
The
previous conference had voted six i n favor and five opposed and one Governor recorded a s not voting. ( S e e paragraphs 2 0 and 2 1 Secretary's Minutes
ofNovember, 1924 Conference.)
(See pages 3 3 and 34 stenographic record)
Currency Depots.
Upon motion o f Governor Seay, i t was
VOTED t o b e the sense o f the conference that the establishment
of currency depots b y Federal reserve banks i n cities outside o f Federal
Reserve Bank o r Branch cities i s at least o f doubtful expediency.
(See pages 35 - 44 stenographic record)
Classification o f outlying districts o f reserve
or central reserve cities.
Upon motion o f Governor Seay, i t was
VOTED t h a t the conference should concur i n the expressions o f
the Federal Reserve Agents’ Committee that the presumption should b e
against granting reductions o f reserves o f outlying sections within
municipal limits o f central reserve o r reserve cities.~
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Federal Reserve Bank of St. Louis
(See pages 4 4 and 45 stenographic record)
Seerepation o f savings deposits.
In view of the fact that the proposal covered b y this topic
would require legislation, i t was considered t o be covered b y the previous
vote o f the conference and no action was taken e
(See page 45 stenographic record)
Reserve against t i m e a n d savings deposits.
The conference then considered the letter o f Governor Crissinger
addressed to Mr. Jay under date of October 15, 1925 (Printed
o n p a g e s6
4 and
47 stenographic record) concerning the desirability o f amending the reserve —
to be carried against time and savings deposits o f member banks. Vhile agree»
ing t o the desirability o f affording adequate protection t o savings
deposi-
tors in commercial banks, nevertheless upon motion o f Governor Seay, it
was
VOTED
t o b e the sense o f the conference t h a t i t would b e in=
advisable at the present time to take any action which would lower ree
quired reserves as would be the case if the plan proposed were adopted.
Governors Harding and Calkins asked t o b e recorded a s not voting.
(See pages 45 » 54 stenographie record)
Enabling Acts i n States.
Upon motion o f Governor Young, i t was
VOTED t o approve the recommendation o f the Federal Reserve
Agents’ Committee o n Reserves.
(See pages 5 7 and 58 stenographic record)
Restrictions concerning loans and dividends when
r e s es deficient
r vi e
.
In view of the fact that the Advisory Committee o n Legislative
Matters had unanimously voted t o leave the statute unchanged regarding
this matter, upon motion of Governor Norris, it was
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Federal Reserve Bank of St. Louis
VOTED t h a t the conference should concur i n the action taken
by the Advisory Committee o n Legislative Matters o n the ground that the
present l a w operates a s a wholesome restriction against wmauthorized
loans.
Cece
868 pages 58 and 59 stenographic record)
Topic
1 . E. h a v i aebiTity o f a n i
a a a w h e r e b y the
reserve banks would report chronic cases o f
reserve deficiencies t o t h e sunerintendents
of banks i n the various states a n d t o t h e
Comptroller o f the Currency, after a n undere
standing h a s been reached with these officials
that t h e v will promptly communicate w i t h t h e
directors o f the banks concerned, acguainting them with t h e financial l o s s which t h e
bank i s suffering through i t s failure t o
maintain required reserves a n d calling their
attention t o t h e fact that t h e y a r e continual-
iy v i o l a t ienhlay.
gt
(See also paragraph 59)
After discussion o f the topic proposed b y the Federal Reserve
Board, upon motion o f Governor Norris, i t was
VOTED t o be the sense o f the conference that the arrangement
proposed b y the Vaderal: Reserve Board i s now being followed b y most
Federal reserve banks, that it is most desirable and that the Board should
be requested t o confer with the Comptroller o f the Currency with a view
to having the dctheedl bank examiners advised o f the n a t u r e f
o the arrange-
ment and the relative responsibility of the several parties.
a
(See pages 63 - 67 atonogtupns¢ ‘Facord)
S
C
T
Topic I. R a t i o of Bank Capital t o Deposits.
(
1
6
Reference was made t o the fact that the ratio o f capital t o deposits o f banks has been declining i n recent years, and upon motion o f
Governor Strong, i t was
VOTED that it should be the policy of the Federal reserve banks
whenever opportunity arises i n their dealings with member banks t o urge
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Federal Reserve Bank of St. Louis
)
7
them to increase their capital and surplus, gradually i f
necessary, t o
at least 1 0 per cent o f their deposit liability.
i
e
(See pages 67 - 70 stenographic record)
Topic I . G .
e
P
R Oren
R a c m e POOF
they
I n the extension o f credit o r handling transit
items i s i t the d u t y o f Federal reserve banks
to assume t h e responsibility o f determining
the solvency o r insolvency o f member banks?
fs not this entirely within t h e province
and a duty of the Comptroller o f the Currency?
After a general discussion o f thie topic i n which i t was brought
out that the Federal reserve banks are necessarily liable
for their own
negligence i n the handling o f collections and that that i s
a liability which
they must necessarily
e e
t h e topic was passed without further action,
(See pages 1
7 - 73 stenographic record)
Topic I, H. W o u l d i t be advisable f o r Federal reserve banks
to make loans t o member banks o n their promissory note f o r a longer period t h a n t h e fifteen
days, w h i c h i s n o w the law?
Governor Bailey referred to the report of the Trust Company
committee o f the American Bankers Association, which
indicated that many
member banks a r e n o w objecting t o Federal reserve
banks n o t makine a d s
vances o n member b a n k notes i n excess o f fifteen
days.
I t was t h e opinion
of those Governors who discussed the subject that
i t would b e entirely
proper a n d appropriate t o extend t h e maturity o f the
fifteen-day note t o
not exceeding thirty, sixty,
o r perhaps e v e n ninety days,
I t was pointed
out, however, t h a t i n n o event should t h e longer
maturity apply t e notes
-collateraled b y government bhacitise- A f t e r further discussion,
a n d upon
motion o f Governor Bailey,
i t was
VOTED t o b e the sense o f the conference that the conference
would l o o k with favor upon t h e extension o f the
fifteen-day advances t o
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Federal Reserve Bank of St. Louis
8
not exceeding sixty days when secured b y eligible commercial paver,
Governor McDougal v o t e d no.
(See pages 74 - 86 stenographic record)
At the Joint Conference o n November 5 with the Federal Reserve
Beard and Federal Reserve Agents, i t was reported that the Agent s' Confers
ence had voted i n favor o f extending the m a t u r i t y f
o member bank advances
from fifteen t o ninety days when secured b y eligible commercial
paper.
After further discussion, upon motion o f Governor Talley, i t was
VOTED
t o be the sense o f the Joint Conference that i f an amend-
ment i s asked i t should b e for the ninety-day limit, instead o f sixty days,
when s e c u r e d y
b eligible commercial paper,
: F i v e members of the conference voted no, being i n favor of the
sixty-day limit.
At1:15 o'clock p. m, the conference adjourned to reconvene again
at 3:00 o'clock p. m
First Day's Session, Monday, November 2, 1925
Afternoon
The meeting was called t o order a t -3:00 o'clock p. m.
(19)
Topic I. A. Revort o f Open Market Investment Committee,
(See also paragraph 57).
Gevernor Strong reported that t h e Open Market Investment Committee
hat approved o f the report o f the Chairman previously submitted t o the
Governors, but consideration o f the report b y the conference was postponed
until a
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Federal Reserve Bank of St. Louis
later session.
(See pace 86 stenographic record)
Topic IV. A. Cost of securing reports of examination of
(
2
national banks.
The secretary r e a d the proposed draft o f the letter f r o m Governor
0
)
2
Strong t o the Comptroller o f the Currency concerning charges f o r reports
of examinat ion o f national banks.
T h e conference agreed t o the f o r m o f
letter and authorized the chairman t o refer i t to the Comptroller o f the
‘Currency i n order t o ascertain whether w e principles enunciated therein
were agreeable t o him. T h e secretary, upon request o f the chairman, conferred with the Comptroller o f the Currency who later reported t o the conference that h e was i n agreement with the terms o f the letter provided one
clause unqualifiedly fixing $5.00 as an ultimate maximum limit should be
eliminated, T h e conference agreed to this amendment and the letter was
subsequently dispatched a s authorized,
(See pages 87 ~- 205 2925 328 and 329 stenographic s o a k
Topic IV. B . E f f e c t i v e n e s s o f s a e
:
o
c o n t r o l o f the e x p e n s e 2 * \ (22)
f operating a Federal reserve bank. k
The operation o f the budget plan i n the various Federal reserve
banks was reviewed by the Governors, it appearing that n i n e o
f the Federal
reserve banks already have a budget plan i n operation a n d the other three
having cont tols which were somewhat s i m i l a r t o a budget.
I t was t h e con-
sensus o f opinion o f those Governors o f the nine banks operating under a
budget that the plan i s a most effective and s m i ntaetuks check o n the ex‘penses o f their rospective banks.
S E I L E R
E L B E ABE I B
(see pages 90 - 103 ak desea pha
G P E ILLS,
= e
Topic IV. C. Elimination o r consolidation o f current reports ( 2 2 )
by Federal reserve banks t o the Federal Reserve
Board.
The reports a n d statements n o w submitted t o t h e Federal Reserve
Board b y the Federal reserve banks and the expense o f preparing those reports a n d statements w a s discussed a t s o m e length.
U p o n motion o f Gover-
nor Calkins, i t was
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Federal Reserve Bank of St. Louis
VOTED t h a t t h e cenference r e n e w t o the Federal Reserve Board
10
its earlier recommendation that t h e whole question o f the number a n d f o r m
of reports t o the Federal Reserve Roard b e studied i n view o f the fact that
the total direct expense t o the Federal raserve banks i n furnishing these
reports a n d statements t o t h e Roard i s somewhat i n excess o f $100,000 p e r
year.
(See pages 103 - 113 stenographic record)
Topic IV. D . P r o p e r Federal reserve bank protection.
(
2
3
)
After a thorough discussion o f the steps taken b y the Federal re. Serve banks safely t o proteet their operations and their resources, i t was
VOTED t h a t the chairman should report t o the Federal Reserve
Roard that the conference had considered the topic they proposed, that there
was & general exchange o f information, that i n the opinion o f each Governor
the protection n o w afforded i s adequate although there may at times b e nead
to increase the force o f guards at some o f the banks, thet detailed reports
of protective measures a r e not filed because o f the need t o keep t h e m con-=
fidential, t h a t t h e United States Secret Service a r e kept f u l l y informed
from time t o time a s to protective measures i n force, thet the responsibility
_for the management o f the Federal reserve banks i s vested b y law i n the respective boards o f directors, that the Givsciies are fully alive t o that
responsibility, a n d that i n view of the different conditions affecting the
different b a n k s i t would s e e m impossible t o formulate a n y uniform p l a n o f
protection.
(See pages 113 ~ 115 stenographic record)
Topic IV, E. Eligibility of an officer of an insurance
(
2
4
company f o r election a s Class "B" director
of a Federal reserve bank.
Upon request o f the chairman, t h e secretary read to the conference
an opinion prepared b y the counsel o f the Federal Reserve Bank o f N e w York
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Federal Reserve Bank of St. Louis
)
a2
expressing a
view contrary t o that outlined i n the Federal Reserve Board's
ruling o f July 2, 1925, the ruling submitted b y the Board to the conference for consideration. U p o n motion o f Governor Calkins, i t was
VOTED t h a t the question involved i s solely one of law and
that while all o f the Governors have read the opinion o f the Federal Re»
serve Roard's counsel, nevertheless the conference respectfully submits
the opinion o f the counsel o f the Federal Reserve Rank o f New York a s a
contrary view for the Board's consideration.
(See pages 115 ~ 120 st enographic record)
Topic IV. F . U n i f o r m i t y i n the operation o f the cafeterias
Ssh
o
(25)
f the Federal reserve banks.
Each o f the Governors present reported the procedure followed
in the respective Federal reserve banks concerning t h e method o f operating
the cafeterias and the basis on which charges are fixed for meals.
I t was
the opinion of the Governors, reflecting the experience of the several
Federal reserve banks, that all Reserve banks should absorb a t least
enough o f the expenses o f operating the cafeterias s o as to furnish the
employees a
lunch a t not t o exceed two-thirds o f the out-of-pocket expense
(i. e. cost o f food and service) o f providing those meals, with the under=
standing, o f course, that i n the discretion of the directors this basis
of charge might properly b e modified s o a s t o meet special circumstances.
(See pages 120 - 140 stenographic record)
At 5:00 o'clock p, m. the conference adjourned t o reconvene again
at 12:30 o'clock o n Tuesday, November 3 , 1925.
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Federal Reserve Bank of St. Louis
Ee
Second Day’s Session, Tuesday, November 3 , 1925
Morning
The meeting was called t o order a t 12:30 o'clock.
Topic IV. G . F e r m a n e n t employment b y the Board a t a fixed
retainer o f special c o u n s e l f
o outstanding
ability t o a
s s n ilitication,
si t
such a s
the so-called Pastagoula a n d Brookings n a r
clearance cases, a n d t o a c t a s a clearing
h o u se
r otfh e legal departments o f all
Federal reserve banks.
Upon motion o f Governor Seay, i t was
: VOTED ‘that the conference concur i n the opinion o f the counsel
of the Federal reserve banks
v o t et da
the joint meeting o f those counsel
on July 13, 1925 t o t h e effect t h a t i t i s not essential t o the proper
administration o f the Federal reserve banks t o employ advisory counsel for general supervision of legal matters affecting the System, and that
the banks continue a s heretofore t o employ special counsel t o assist i n
litigation o f system-wide interest when i n the judgment o f counsel con=
cerned the occasion requires i t and the banks are agreeable.
Governor Talley asked t o be recorded a s voting no.
(See pages 140 ~ 142 stenographic record)
Topic V- A. Advisability of discontirivine the practice of (27)
displaying so-caliéd Federal reserve exhibits
at the annual conventions o f the American
Bankers Association.
All o f those Governors present who had been present a t the
convention o f the American Bankers Association a t Atlantic City expressed
their views about the merits o f the Federal Reserve exhibit a t that cone
vention. M o s t o f those present experienced a favorable reaction. U p o n
motion o f Governor Seay, i t was
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Federal Reserve Bank of St. Louis
13
VOTED
e
t
o be the sense o f the conference t h a t t h e Governors
g e n e r a l l y were i n favor o f t h e continuation o f these exhibits.
(See pages 145 - 151 stenographic record)
At 1:15 o'clock p. m. the conference adjourned t o reconvene
again a t 2:30 o'clock p. m.
second Day's Session, Tuesday, N o v e m b e r 3 , 1925
Afternoon
- The meeting was Called t o order a t 2230 or eb0ek p e mM.
Topic 25s A s Report o f Standing Gomittes o n Collections.
(See pages 152 - 176 stenographic record) |
Mr. Strater, Chairman of the ‘Standing Committee o n Collections
read a digest o f that report previously submitted t o the Conference o f
Governors under date of November 2. T h e conference then considered
in order each of the Snteoeden dane contained i n the report o f the committee.
T h e substance o f t h r e c o m m e n d a t i o n s a n d the actions taken
bythe conference is seforted as follows:
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Federal Reserve Bank of St. Louis
eR
o f
t t
Direct S e n d i n g s .
While the committee appreciates that certain risks
and dangers a r e incident t o the p r a c t i c e of sending c a s h
items direct, nevertheless i t i s the committee's opinion t h a t
. the principle i s important i n the development o f collections
under the Federal Reserve System, that its advantages greatly out~weigh the dangers, a n d that i t should b e encouraged, especial-
lyamong larger and well managed. member banks. With reference t o the question o f placing a limit o n the minimum dollar
amount o f cash items that a member bank may send direct, t h e
committee expresses t h e opinion that there should b e n o such
-limit, b u t that where i t appears that a direct sending member
bank sends more numerous letters each day than should b e necessary, o r as a regular practice sends daily letters o f
trifling amounts, the Federal-reserve bank of the district
in which such member bapk“is located should take up the
matter with the bank-fn question i n a n endeavor t o correct
the practice.
14
FERRE N D E SEL ORL ERA,
~
e e e
s
e
t
t
LORELEI
E S
s &
z
= e
e
i
i
VOTED t o approve o f thie section o f the Committee! s report
Governor Y o u n g a s k e d t o b e r e c o r d e d
E
D
E
N
oh
t
s
a s voting 2 0 »
r a e
See pages 177 - 180 etenographic record) a
pe
.
instructions i n cash letters o f member banks
sending items direct.
Nesey
“THE committee recommended that a uniform section
covering t h e question o f instructions s h o u l d b e incorporated
in identical language i n the check collection circular o f
each Federal reserve bank under the heading “Uniform Instructions," T h e section i s quoted o n pages 7 and 8 of the c o m
mittee’s report a n d o n pages 1 8 2 and 1 8 3 o f the stenographic
record,
Upon motion of Governor Calkins, it was
R
OTED
p i e
a
p
e
r
meses
t o approve o f thie section o f the committee's
Govern r
4-
e
eL
Young voted no,
sE
P A O R TS E S T
I
D E E =
(See pages 180 - 186 stenographic record)
a
< instructions f o r handling bill o f soeiok drafts.
The Somntttac discussed the question of having
Federal reserve banks deviate from instructions o f member banks
when sight drafts w i t h bills o f lading attached a r e n o t paid
upon first presentation, a n d expressed t h e opinion that while
it might b e technically improper t o set a precedent o f not
following instructions literally, nevertheless the collection
system should n o t b e operated contrary t o the practices o f
commercial banks and that Federal reserve banks should, therefore, hold such items after giving prompt notice o f ii@honar
to the sending member b a n k a n d asking f o r further instructions,
Upon motion M s
Swauiss o
_
O
R R S
A e eae Sma
VOTED t o approve o f thie section o f the committee's report.
Governor S e a y voted n o a n d filed f o r the record 2. memorandum
of his p i o o t
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Federal Reserve Bank of St. Louis
bok
c i
E l -
Pte stenographic record)
S L E S
Gs
o f telegraphic advice o f non-payment o f checks
over $ 5 0 0 ,
The committee reported that c p e s e u i a k s $55, 000
per annum might b e saved b y the System i f Federal reserve
banks d o n o t absorb t h e cost o f telegraphic advice o f none
45
payment o f checks o v e r $500, a n d suggested t h a t this might
be a good opportunity t o effect a considerable saving i n
the operation o f the collection system,
=
f
a
! :
Upon motion o f Governor McDougal, i t was
—
—
a e
—
VOTED t h a t t h e Federal reserve b a n k should n o t absorb t h e
cost o f these telegraphic advices and that the Standing Committee o n Colee
a k e b e requested t o prepare a paragraph o f advice t o member banks
a n s might b e forwarded b y each Federal reserve bank t o their — "
NSIS I N E LONER RES Sarepgnansee
n
e M E A T ASARIE REMC Rr t e n
(See pages 205 = 207 “stenographic a a e t t
n
SRDMOR SAIS TTP R Y tite
I E eA T e e n a
Gollection o f actual charges incurred i n handling
of negotiable securities forwarded b y ineured registered
mail o r express.
——
The committee recommended that all o f the Sodoea
reserve banks obtain reimbursement f o r shipping charges o f
twenty-five c e n t s o r over o n all sécurity collections
whether received from other Federal reserve banks, f r o m
direct sending members o f other districts, o r from their
own members, with the understanding that charges amounting
to less than twenty-five cents should b e absorbed b y the
collecting Federal reserve bank,
_Upon motion of Governor J O U
ESTAR
i t was
VOTED t o approve of this section x
jand
t o urge all Federal reserve yates o
.
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Federal Reserve Bank of St. Louis
e
the committee's report,
=
se
auserve ite
esas
s e e s Son e s R
T
S
G7and 208 “stenographic record)
Preparation o f coupons t e f e a r d e d for collection b y :
(3
Federal banks a n d their direct sending members t o otner Federal w t
reserve banks.
i
h
SEMA E A T E R A E AIR A M O
F O R S g ERE P
I
R
E
S
The committee referred t o the present practice o f the
Federal Reserve Bank of New York regarding the preparation and
handling o f coupons received f o r collection and stated that
while i t can see n o objection t o having the Federal Reserve Bank
of New York continue its present practice, nevertheless t o have
all federal reserve banks adopt the New York practice would
place a heavy burden upon the other Federal reserve banks and
all direct sending members without producing comparable results
and without a n y material reduction i n the cost per item of
handling coupons,
16
Upon Bahl oe of sgrndge a2 pECnOg 4 it was
.
i
AvoTED
t o approve o f this é
l
“esee papel HOC" and 310. x r e r e
R
e
o f the ‘connittee" s |report.
—
—
Upon motion o f Governor Strong, i t was
VOTED
+ o extend to the Standing Committee o n Collectiors the
thanks o f the conference f o r the careful study and work involved
i n the
preparation o f this report.
(See page 211 stenographic record)
Topic IL. B. C o l l e c t i o n o f non-cash items b y Federal
reserve banks.
Covernor Fancher referred t o the resolution o f the Federal
Advisory Council which voted t o approve o f the reports o f the Standing
Committee o n Collections a n d the Committee o f Governors o n Voluntary Services relating t o the question o f non-cash collections, a n d also called
attention t o the exchange o f letters between Governor Fancher a n d Governor
Crissinger under dates o f October 15, 16 and 17 relating t o the submission
of these reports t o Mr. Barton's committee - Covernor Fancher then
MOVED t h a t i t is the sense o f the conference that inasmuch A S
the rome’
o f the Committee o n Voluntary Services was submitted t o the
Federal Reserve Board eighteen months ago and since a supplemental report
on the so-called Barton brief has subsequently been filed with the Federal
Reserve Board, a n d that inasmuch a s it will b e detrimental t o the best interests o f the System t o have t h e matter remain unsettled a n y longer , the
question should now be finally disposed o f and the Board requested t o
asppove o f the report o f the Committee o n Voluntary Services,
a s recommended
by the Federal Advisory Council. ©
Before action was taken o n this motion, Governor Wellborn moved
to lay the motion o n the table.
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Federal Reserve Bank of St. Louis
7
Governors Bailey, Young and Wellborn voted i n the affirmative All the otherSvoted i n the negative The conference thereupon voted upon Geverncr Fancher's motion.
Nine Governors voted yes, Governors Baily, Young and Wellborn
voted n o -
(See pages 211 - 220 stenographic record)
Tonic I. C. Revision o f Time Sehedule with a view to re- (
duce float and avoid existing inequalities:
particularly t o either abolish five and six
apypoints, o r else make them universal Governor Norris discussed certain existing differentials i n
the inter-district T i m e Schedules w h i c h h e believes warrant s t u d y b y 2a
committee with a view to reducing float and avoiding certain existing
inequalities. U p o n motion o f Governor Norris, i t w a s
VOTED t h a t the Standing Committee o n Collections make a study
o f the
of the present Time Schedule a n d prepare 2 scientific revision
schedule i f that seems t o be netessary-
I t was
a c k .
however ,
that the committee should consult o r advise with any Federal reserve
banks concerned wherever that might b e helpful t o the committee a n d that
a tentative schedule b e submitted t o each bank for review before i t is
submitted t o the Federal Reserve 3oard a s a recommendation (See pages 220 - 226 stenographic record)
Topic IIT. D. P r o c e d u r e i n handling exchanee d r a f t s -
There was some discussion on the part of several Governors of
the extent t o which member banks are using the Federal exchange draft
privilege.
I t appeared from the discussion that there has not been
much demand for these drafts except o n the part o f member banks i n the
Cleveland a n d Richmond districts.
G o v e r n o r Calkins, w h o proposed this
topic, a s k e d f o r n o action.
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Federal Reserve Bank of St. Louis
(See pages 226 - 230 stenographie record)
37)
18
Topic IT. E . G o v e r n m e n t checks.
Upon motion o f Governor Fancher, i t was
vormp t h a t t h e Standing Committee o n Collections b e request-
ed to study the question o f having government checks printed and numbered in some such way as better t o facilitate their handling b y Federal
reserve b a n k s .
(See pages 230 and 231 siguaananhic sincera.
Topic II. F . R e t u r n e d non-cash items.
Unon motion o f Governor Seay, i t was
VOTED t h a t Federal reserve banks telegraph f o r instructions
before returning non-cash items, o r cash items forwarded a s non-cash
items, o f $500 or over which are net being handled for any reason.
a
st ( S e e pages 231 and 232 ahtngen oes record).
Bon Serre
nome Ar
Topic TI. G . D i r e c t sendings o f non-cash items.
Upon motion o f Governor Strong,
i t was
VOTED t h a t Federal reserve banks consider t h e advantages a n d
economy resulting f r o m further direct s e n d i n g o f non-cnsh items b y those
member S a a s Maer h have pene? idee sa o f it ems s n i d e
v
v
e
S are ee pre e N O
E M M
e
e
i n other districts.
te n
,
a F
e n n a i ater ete N T T
Sipe mane
(See rages 232 - 234 enbeweeitia i e r
Topic II. H . S h o u l d Federal reserve banks request smaller
member banks t o sort c 2 s h items strictly
in accordance w i t h Time Schedule, o r should
Reserve banks average availability o f unsorted cash letters?
Unon motion o f Governor Fancher,
i t was
vorRD t o refer to the Standing Committee o n Collections for
consideration t h e question whether Federal reserve banks should request
with the
smaller member banks t o sort all cash items strictly i n accordance
mime Schedule or whether Federal reserve banks might, i n their dis
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Federal Reserve Bank of St. Louis
49
average t h e availability o f unsorted c a s h letters,
o r accept t h e m o n
some other basis.
(See pages 234 - 236 stenographie record)
Tonic ITT. C. Gold holdings and navments The secretary reported upon the question o f the increase i n
the holdings o f gold coin and certificates b y the Federal reserve banks
during the past two years.
each Federal reserve bank a
T h e conference requested that h e send t o
sthedule o f the amount o f such holdings b y
each Federal reserve bank at the present time as compared with what it was
when this matter was first taken u p by the conference sbout two years ago.«
(See pages 236 + 243 stenographic record)
Topic TIT. 3. Should n o t the Treasury Department a b s o r b
( 4 4 )
the cost o f transferring one dollar bills
from o n e Federal reserve b a n k t o another?
Upon motion o f Governor Bailey, i t was
VOTED t h a t the conference should concur i n the report o f
the Currency Committee o f the Treasury Department t o the effect that the
Treasury would try to get an appropriation from Congress t o cover the
cost o f transferring circulated one dollar bills from one Federal reserve bank t o another.
I t was understood, however, that this action
should not be retroactive.
(See page 243 stenographic record)
Topic IIT. A. Currency program.
(
4
5
)
This topic was passed betause o f the fact that i t was trans-
ferred to the program for the Joint Conference before waich Mr. Dewey
planned t o discuss the question.
6
4
(
Tonic I¥.1- Commissions charged o n bills a n d c e r t i f i c a t e s )
bought f o r foreien banks.
The secretary r e a d a
report f r o m t h e Federal Reserve D a n k o f
New York covering the commissions charged for the work rendered for
various foreign correspondents. Governor Strong elaborated i n some
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Federal Reserve Bank of St. Louis
20
detail the nature o f the work which w e now perform for foreign banks and
our reasons for not wanting t o insist o n exclusive arrangements with
those banks. U p o n motion o f Governor Young, i t was
VOTED t h a t the conference should approve o f the new rates o f
commissions proposed i n the report submitted b y the Federal Reserve Bank
of New York,
(See pages 2 4 3 ~
252 s t enographic record)
Following this action, the chairman discussed, o f f the record,
( 4 7 )
various matters relating t o international dongst ices and stated that cere
tain adjustment s in some o f our foreign accounts, t o which h e referred,
would b e dealt with b y a letter to each Governor after further studies
have been prepared.
At 6:00 o'clock p. m, the conference adjourned t o reconvene again
at 10:00 o'clock a. m. o n Wednesday, November 4, 1925,
Third Day's Session, Wednesday, N o v e m b e r 4 , 1925
Morning
The meeting was called t o order a t 10:00 o'clock a. m
Topic IV. K. Report o n Foreipen Accounts.
(
4
8
The report was received and ordered filed as part o f the record
of the conference.
(See pages 253 ~ 255 stenographic record)
Topic TV. Le. R e p o r t o f sub-committee o f General Committee
on Bankers Acceptances,
Upon motion of Govermor Fancher, i t was
Z
w
consider a
t h a t the conference is prepared and would be glad to
statement o f the principles t o b e used i n connection w i t h
domestic acceptances a s a muide to determining their eligibility such
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Federal Reserve Bank of St. Louis
)
21
as the report indicated the Acceptance Committee o f the twelve Federal
reserve banks might e
e
(See pages 255 = 258 stenographic record)
o Committee o n
Topic IV.M. Renort o f C h a i r m a n f
Legislative Matters.
This topic w a s passed i n view o f the fact that Governor Seay,
Qhairman o f the Advisory Committee o f Governors o n Legislative Matters,
was requested t o make his report t o the Joint Conference.
(See page 258 stenographic record)
N E D
i,ceenasnetett e e t
e
EY:
p e e
|
Tonic IV. o f Report of Leased Wire Committee.
i the ‘Teport o f the Leased
The two recommendations contained n
e
Committee werer considered separately:
i
W
ame ee
t h e cost o f
(1) T h e committee recommended t h a t
transfers
telegrams sent over commercial wires representing
because o f
of funds when t h e leased wires a r e unavailable
t o the
storms o r other interruptions should b e charged
member bank from which the request was received.
u p o n motion o f 4
After consideration o f this recommendation,
z
: Governor Young, i t was
i
+o f
=
VOTED t h a t Federal reserve banks b e given the discretion
4
‘
i
jj
4
A
‘absorb t h e costs covered b y the recommendation +
e
t
j e c e a n e n a e n O N soectice
F e
c o t e
e
I
ag, t a n a
and McDougal voted ncFancher
G o v e r n o r Biggs, Calkins,
—
o seconeES
ae n s n t e s
RSian
e,a
c ye
a
ee
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e
s
e esse Ra S
a
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s
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ia
r e c) oaGr
stenograpnic
e
(
o
258S - 269
pages
AIT, niga Rei eMC ATT ST
mmittee
(2) The socond racommendation of the co
reimbursed
be
was that the Federal Réserve Bank o f New York
leased
for the expense involved for telegrams sent over the
other
o
f
wires a t the request o f and for the sole benefit
5
.
e
g
A
Federal reserve banks.
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R
A
R
A
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e
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s
e
l
s
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Federal Reserve Bank of St. Louis
8
0
2
5
s
s
e
e
re
I t was suggested by the committee
e
e
n
a
n
conference
that i f this recommeridation i s approved b y the
n
i its
that the Federal Reserve Bank o f New York i n c l u d e
riumber
the
o
f
Board
Reserve
Federal
monthly report t o the
suppl mentary
of words gent over the leased wire system a
which was :
therein
included
report o f the number o f words
benefit,
sole
their
for
banks
sent t o other Federal reserve
a
n
r
e
t
n
i
cS
e
aO
i
p
e
e
a
A
ee
g
i
S
i
22
and that the Federal Reserve Board i n apportioning the
expenses o f the leased wires should make appropriate
r
e
e
w
allowance i n favor o f New York for such words,
)
U
p
o
l
a
o
f
n motion of Governor Young, i t was
t
i
VOTED ‘that the conference approve o f this recommendation o f
|
e
n
i
7
~P
~
,
e
t
Fi
é
the Leased W i r e Committee,
: —e s
i
ere
p
e
e
a
l
t
e
t
e A
t
L
>
egRRREE N N
O TNIY L E I
e
.
:
S
o
p
e
rsey A T R
Seep pages "269 and 270 eléddevenhic record)
Havelits.of fecerve p a n k f o r carrying o u t instructions i n m a k i n .
transfers f o r account o f corporationeor individuals,
Upon motion o f Governor Talley, i t was
VOTED t h a t t h e appropriate officers i n the Federal reserve banks
be instructed not t o make unreasonable requests t o other Federal reserve
banks t o exercise discretion i n making wire transfers f o r account o f individuals o r cerporations o t h e r t h a n banks
t
O
E
A
P
R
E
S
S
a
o
R
p
S
e
e s
(See pages 270 and 271 etenographic record)
Topic IV. P. | Report o f Insurance Committee.
(Printed o n pages 271 - 281 stenoraphic record)
Upon motion o f Governor Seay, i t was
VOTED t h a t n q further action b e taken a t this time i n the
matter o f the inter-bank self-insurance plan,
(See page 282 stenographic record)
While t h e recommendations contained i n the latter part o f the
report o f the Insurance Committee w e r e held o v e r until after t h e Joint
Conference, i t was subsequently
stant
e
i
a
a t e.
=
:
2
p
a
i
n
S
e
e ceecasasce: P
N I I neon
R
S
VOTED,
/
j committee relating t o the Treasury's registered mail insurance contract,
submitting proposed r a t e s o f adjustment a m o n g t h e various
¥
vyg
banks,
b e approved w i t h t h e sugzestion that t h e Treasury Department b e
jrequested t o make appropriate arrangements w i t h t h e underwriters f o r
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Federal Reserve Bank of St. Louis
®
20
| billing to each Federal reserve bank the premium
o n its shipments o f
\
i new Federal reserve notes from Washington a t the rates indicated
i n the
|schedule attached
t o the report, a n d that a t the end of stated periods
i the adjustment b e made t o take care o f the difference
t h a t m a y exist
;
between the total premiums charged o n this basis and the
total premium
\ figured at the flat rate of 4 7/8 cents, as per
the stscche
b e e e n e
T
ALAA nici aapsegace S R E
et
i
pa —
w
t
e :
o
g
Svieanee” e r c n r Bailey, Talley, Norris, MeDougal , Fancher,
Seay and Young were present and voted affirmatively o n this recommenda-
tion. Governor Biggs voted yes by proxy. T h e other
Governors were absent.
Topic IV. Q. Report of Pension Committee:
(
5
6
)
After considerable discussion o f the proposed pension p l a n
b
y
which it was pointed out by the Covernors present that the Federal Rerd
s e r v e System would be materially benefitted and the welfare
o f the em-
ployees greatly promoted by the adoption of the pension
plan, upon motion
of Governor Norris, i t was
VOTED that the chairman be asked to prepare a statement of
the
attitude o f the conference i n the matter t o be submitted t o the Federal
Reserve Board in writing.
I t was understood that this letter when pre-
pared should b e considered a s a part o f the record o f the conference (See pages 262 - 291 stenographic record) .
Topic L.A. Report of Open Market Investment Committee . ( 5 7 )
(See also paragraph 19)
Upon motion of Governor Young, i t was
VOTED t h a t the report of the Chairman of the Open Market
Investment Committee (printed o n pages 293 ~ 306 o f stenographic record}
ee
p r e v i o u s l y submitted t o the conference b e approved.
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Federal Reserve Bank of St. Louis
24
Topic IV. J. Criticisms of Federal Reserve System - past
(
5
8
)
and prospective.
There was a discussion b y each o f the Governors present o f
the steps taken i n each Federal reserve bank t o make s u r e that t h e bank
and the System are not properly subject t o criticism because o f any
practices o f the bank o r its personnel.
(See pages 306 - 327 stenographic record)
Topic I , E . A d v i s a b i l i t y o f a n arrangement w h e r e t h e
Cont'd R e s e r v e banks would report chronic cases
of r e s e r v e deficiencies t o t h e superintendents o f banks i n the various states
and t o the Comptroller o f the Currency,
after a n understanding h a s been reached
with these officials that t h e y will
promptly communicate with the directors
of the banks concerned, acquainting them
with t h e financial l o s s which t h e bank
is suffering through i t s failure t o
- maintain reouired reserves a n d calling
their attention t o the fact that t h e y
are continually violating the law.
(See also paragraph 15)
This topic which had been previously acted upon b y the conference
n
a it was exwas again discussed with the Comptroller o f the C u r r e n c y d
plained that while the procedure suggested b y the Federal Reserve Board
neverthe~
is already being followed b y most o f the Federal reserve banks,
a
w i n favor o f adopting t h e proposal formally s o a s
less t h e c o n f e r e n c e s
to mak e it a matter o f routine,
T h e Comptroller expressed his desire
to cooperate i n any w a y possible.
{
(See pages 329 - 332 stenographic record) =
(60)
Topic Ie Be Discount Rates,
rates.
There w a s a n extended discussion o f the question o f discount
at
At 1:00 o'clock p. m,. the conference adjourned t o reconvene
Reserve Board a n d
3:10 otclock p s m . i n Joint Conference with t h e Federal
Federal Reserve Agents,
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Federal Reserve Bank of St. Louis
George L. Harrison,
Secretarye
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Federal Reserve Bank of St. Louis
@FedFRASER