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Federal Reserve Bank of St. Louis
INFORMAL CONFERENCE OF GOVEHNORS
OF
FEDERAL RESERVE BANKS
HELD
NOVEMBER 8
9, 1917
AT
llASlIIlJG TON, D.O.
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Federal Reserve Bank of St. Louis
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Federal Reserve Bank of St. Louis
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Wednesday
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THURSDAY AND R I D A L . I Q V D R 3 - 8. 191 7.
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Meeting c a l l e d to order in the Board room at 1 : 3 n Thursday, Governor
. i
Harding p r e s i d i n g .
Governor Eard.illg suggested t h a t it
would be d e s i r a b l e to s t r e n g t h e n the
New York bank s i t u a t i o n and as many of the o t h e r Federal reserve banks had v e r y
s t r o n g reserves he asked how many of the 'banks would be w i l l i n g to p a r t i c i p a t e in
the purchase of 5 5 ,
,
. of b i l l s of exchange f r o m the Lew York bank.
eleven banks responded c h e e r f u l l y , taking 5
,
,
All the
. each.
Later Governor Aiken r a i s e d the o u e s t i o n of the r a t e at which t h e b i l l s
also
should be taken by the o t h e r banks and he r a i s e d the q u e s t i o n whether the r a t e s
should not be the same which p r e v a i l e d in t h e Boston d i s t r i c t f o r t h e i r purchases.
This r e s u l t e d in two or t h r e e informal d i s c u s s i o n s on t h i s s u b j e c t .
Governor Aiken
was advised that the New York b a n k had, s i n c e the opening of the b i l l market, f u r nished the o t h e r Federal r e s e r v e banks w i t h b i l l s f r o m time to time and always at
the r a t e r u l i n g in New York, and furthermore that t h e o t h e r banks had at t h e i r
o p t i o n bought or r e f r a i n e d f r o m buying these b i l l s .
.
Furthermore, t h a t the
.. New
York bank had not asked the o t h e r banks to purchase the b i l l s but t h a t it
was a
matter which had emanated in t h e Board as a means of s t r e n g t h e n i n g the p o s i t i o n
of the new York bank on Which heavy demands were being made.
Governor Harding then p r e s e n t e d a l i s t of topics :for d i s c u s s i o n at the
conference, whicl l i s t of t o p i c s had not been f u r n i s h e d the
1.
overnors i:o advance.
Relations with Treasury and F i s c a l Agency matters.
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Federal Reserve Bank of St. Louis
li
- 2 -
LCDOUGA,L - Commercial r a t e 5 1/2% to
6%at
2 6 b a n ks
precent.
in C h i c a o d i s t r i c t now borrowing of F e d e r a l r e s e r v e bank.
Our nomnembe r banks have purchased c e r t i f i c a t e s in
on book c r e d i t s .
advance to pay f o r bonds i n s t e a d of t a k i n g Government deposits
Ju.st beginnin our
Our loans a r e now t peek.
'CCORD l i q id p e r i o d .
LILL
Our bank is overloaned and will
-
be
u n t i l January l s t .
year, .,)old everywhere.
w S 0 , , . of c t t l o :pap r 1 · i g i n a t e s in Kansas C i t y e ch
Banks in o t h e r d i s t r i c t s
to renew,
making it
( b)
which have purchased seme
necessary f o r banks in
when i s s u e d a r e now d e c l i n i
Kansas C i t y d i s t r i o t to
p u r c h a s es m e .
Treasury C e r t i fi e t e s of Indebtedness.
BROADS -
le
t h i n k higher r a t e on t h e c e r t i f i c a t e s of i n d e b t e d -
ness would be b e t t e rand they would s e l l in g r e a t e r volume.
VA ZAiDT- aloney conditions in our d i s t r i c t easy.
s many c e r t i f i c t e s at
could s e l l
as a.t 4 1 / 2 % . °
The r a t e on c e r t i f i c a t e s d u r i n g the campaign s h o u l d
104ps
not be
4%
we
Think
bove bond r t e .
T h i n k ro.te on bonds if
urchased by i n d i v i d u a l .
should
be as h i g h a r a t e as the c e r t i f i e t e s purchased by banks.
( c)
Pe.yment of Coupons by Federal Reserve Banks.
Let the coupons on these L i b e r t y bonds be p a i d by sub-
idioADS-
treasuries.
/I
Mr. Dela.no then de cri bed the
/ar
Savings C e r t i fi c· te and S t a . p p l a n ,
the o r a n i z a t i o n .
showing samples of t h e c e r t i f i o s t e s a n d explaining in d e t a i l
state
t h a t the Federal re.,erve banlts · r n u l d
agencies would be
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Federal Reserve Bank of St. Louis
e depots f'or d i s t r i b u t i o n .
post o f f i c e , c h a i n of s t o r e s , e t c .
He
Other
That the . American Banke:rs
-3-
Associo.ti on · , o u l d e n l i s t every bank in the country as a d i s t r i b u t i n g c e n t e r .
After
d e s c r i b i n g t h e p l a n , dr. Dela.no s t a t e d that t h e campaign would o...en in f u l l s t r e n ct;h
s s i g n a b l e , n e g o t i a b l e nor t r a n s f e r a b l e
C e r t i f i c a t e s were not
on December 1 s t .
but can be cashed at any money order p o s t o f f i c e .
Concentration and Conservation of Gold.
2.
Governor Herding r e p o r t e d more e f f e c t i v e cooperation by sub-
( a)
t r e a s u r i e s as p e r c o n f i d e n t i a l c i r c u l a r presented. to e a c h of the governors r e g rcli n g Treasury d i s c o n t i n u i n g use of the gold c e r t i f i c a t e s in meeting c u r r e n t d i s bursements, e t c .
It
( b)
•
had been p l a m e d t h a t any member bani may send u n f i t c u r r e n -
cy to t h e Treasury Department r e c e i v i n g c r e d i t f o r same on t h e Federal r e s erve
enks of t h e d i s t r i c t . in which member
5.
ank is
located.
L i g h t weight Coin.
D i s c u s s i o n - L O I - In t h e Ssn Francisco d i s t r i o t more gola being paid out by
banks then should be.
Some a l a r m caused by r e s i d e n t ' s statement.
Average
& o l d was withdrawn f r o m savings banks,
in some c a s e s as h i g h as 2 , p e r 1
,
.
Cons idera.ble
l o s s by a b r a s i o n in our d i s t r i c t
anks c o o p e r a t i n g n o w in peymont of
paper c u r r e n c y i n s t e a d of coin.
e a l l o w 6 / 1 o f 1;
9 D U a l - Our banks w i l l i n g to send in g o l d .
f o r abrasion.
Our brr.nk is sending out c i r c u l a r t h i s .eek to 5 , 5 b a n k s in our·
d i s t r i o t a s k i n g t h e i r c o o p e r a t i o n in conserving gold.
6
,
,
le
have taken in ...bout
.
LYICH - I should t h i n k 1 /5 of 1% would represent the average l o s s by
abrasion on t h e coast.
Comptroller i l i l l i a m s asked klr. Lynch h o w n c h a b r a s i o n gold in c i r c u l a t i o n tnd .._r. Lynch ans e r e d he thou,ght about
$
1
,
,
.
OLD - We have absorbed in our d i s t r i c t about all of the f u l l weigh
co in OU t s t a n d i n g ,
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Federal Reserve Bank of St. Louis
-4-
iir. Tremn
r e p o r t e d as to t h e experience of
the New York banks and the
e f f o r t s made in d i s t r i c t lo. 2 to conserve gold and gave some s t a t i s t i c s .
4.
Gold Embargo.
f i r s t was
Governor Harding e x p l a i n e d that t h e embargo a.eai 11s t J.:.exico at
has been r e l a x e d more as g o l d is n e c e s s a r y in some
v e r y r i g i d but l a t t e r l y it
About , ; 5 , , . of g o l d b e i n g
:pa.rte of L;.exico to c a r r y on c u r r e n t business.
shipped mostly f r o m Dallas.
VAJ. ZANDT - Customs and o t h e r paymentc must be p a i d in t;;old.
5ADI
- Arrangements have been made to r e l e a s e ¢ 2 5 , , . of gold
to C n a d a , t r a n s f e r s to be made through New York.
VAN ZANDT - we s e e
1 1 e v i d e n c e
of any r e t u r n of g o l d f r o m 1...exico.
- ile s e e no evidence or any &old b e i n g r e t u r n d f r o m Cc.na.da.
U. S. in
ve u n d e r s t a n d t h a t g o l d c e r t i f i c a t e s a r e b e i n i s e n t o u t of t h e
5.
the m a i l .
DISCUNT3 AND INVESTIJVTS.
refrain
Warburg - It is g e n e r a l l y recognized t h a t member banks s h o u l d
f r o m d i s c o u n t i n s t h e i r own a c c e p t a n c e s .
acceptances quit
generally.
The Bus ton r e s e r v e bank d i s c o u n t s these
t
Pre; a r a b l e to have in e a & d i s t r i c t a c c e mances
tional i n d o r s e e n t .
f i n d i n g t h e i r own market and when purchased to have an c.ddi
General d i s c u s s i o n on comrnodi ty rates.
Governor Lliller reported that the 1{. C. bo.nk was discounting v e r y
h e a v i l y on 15 d a y n o t e
6.
ecured by o t t l e paper i n s t e a d of rediscounting.
STAkP TAX.
if
Governor Harding r e p o r t e d t h a t l e g i s l a t i o n would be secured
doing away wi th t h e stamp t a x
11.
u. •
ossi b l e
s e c u r i t i e s , loans •
present
. · General d i s c u s s i o n e,S to one day uo1·ro'Hers being penalized by
s tamp tax.
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Federal Reserve Bank of St. Louis
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General d i s c u s s i o n as to d i s c o u n t r a t e s .
7.
BRANCHES 1' THE FEDERAL RESERVE ANX.
Governor Harding re o r t e d t h a t the l a w provided 'for branch banks
and c e r t a i n comrnuni t i e s were demanding such.
carry reserves.
S t a t e d t h a t branch banks co.nnot
O r i g i n a l l y proposed to s t a r t branch banks
«ith d e s i g n a t e d t e r This
r i t o r y l i m i t s and r e q u i r i n g banks in each t e r r i t o r y to deal w i t h 1n:anches.
•
was f o u n1da to have many o b j e c t i o n s .
It was proposed in t h e branch banks at P i t t s b u r g h a n d C i n Ic i n n a t i , C l e v e terriland d i s t r i c t , that t h e branch banks should be c l e : T i n g houses f o r a d j a c e n t
tory.
Branch bank's would oe i n a u g u r a t e d and n o t a g e n c i e s .
I
CHECK CLEARING ANDCLLECTIN, TRANJFERS AND EXCHANGE.
There was a general d i s c u s s i o n on the f i n a n c i n g of the Rubber Company
opposed
and the American Tobacco Company, a p l a n f o r d o i n g which was unanimously
by t h e
governors.
General d i s c u s s i o n followed on c l e a r i n g s , e t c.
its
.AIKEN - Boston has i n c r e a s e d t h e amount of " t r a n s f e r s " r e d u c i n g
Rat s e d t h e q u e s t i o n of w l t h e r the time l i m i t schedule
" f l o a t " to a minimum.
should n o t be r e a d j u s t e d .
AICHER - The amount of f l o a t Should be c a r e f u l l y '\;:etched and the
present i n t e r e s t r a t e therefor,
Tall @AIDT -
e
2,
should be i n c r e a s e d .
have r a i s e d our exchange r a t e f r o m l¢
to 15¢.
Business
in October $ 1 1 , , . a g a i n s t 2 , 5 , . in September.
The re was some d i s c u s s i o n over d a i l y s e t tl emen ts being made through
t h e g01d c l e a r i n g fu d .
Governor Harding asked t h e governors to consider t h e same and. 1a.ke a
Digitizedrfor
e pFRASER
o r t en it ( d a i l y
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Federal Reserve Bank of St. Louis
s e t t l e m e n t s and a l s o 2 accounts vs one account \ , i t h Hew
-
-
York bank.
We have added 1 6 7 nonmember banks to o u r p a r l i s t snd have
LDOUG@L-
w r i t t e n to them.
rune by means of l e t t e r s
done
- le
EAlow
added 12 to l5
is best.
Thought
y t h o s e p r e e n t , in v i e , of t h e pr
ould be a d v i s a b l e to hold in
r e s e r v e b n k , it
ch.an e and a d d i t i o n a l
banks to
a Louth to t h e i r smell
t.
r li
banks and it
ent demands on t h e Federal
beyanee any d i s c u s i o n over ex-
Li » bi _- s t a t e d t h a t in t h e i r d i s t r i c t they
s
Have
banks t h r o u g h means of l e t t e r s .
end out personal r e p r e e n t a t i v e but b e J i e v e t h a t o. personal 8p-
been too busy to
1..oach
have
were r e m i t t i n g 5 c he c ks
worked very s a t i s f a c t o r i l y .
k - R e p o r tce d t..l-J.at ine Clevelandh d i s t r i c t ct h e y were 5r e m i t t i n g £
:B·rnCH.ER
to t h e i r smaller banks.
A rnajori ty of the governor
eemed to t h i n k t h a t n o t h i n g was gained oy
as they
r e m i t t i n g and New York b a n k r e p o r t e d t h a t t h e y had not adopted the p l a n
e r e :akin '
&
s e r v i c e c h a r g e of o n l y 1¢ p e r item.
Then f o l l o w e d a
service char
ber banks if
away
a th
f o r check c o l l e c t i o n s .
- Surplus e a r n i n g s t h i s year would permit us to remit s e r v i c e charge.
AI
rm.
eneral d i s c u s s i o n on the a d v i s a b i l i t y of d o i n
DELAI:,O - It
o u l d o e r t a i n l y c r e a t e a f a v o r a b l e impression runon • em-
s e r v i c e c h a r g e on ch cks coula. e remitted, e s p e c i a l l y h e l p i n g c o u n t r y
and r e l a t i o n s w i t h them.
banks
s
..ILLER -k
h
of f r e ce checks to 5
e a r e c o n cs i d e r i n g i n c ree a s i n g the number
day which
per ...........
o u l d ta-ire in most o
t h e cou.11try bcnks Olld would be received
most 'favorably.
MCCORD- ' a v o r the reductio11 of serv:ice c h a r g e as soon as p o s s i b l e .
I.IILLER - In our
i s t r i c t the number of i t e s has i n c r e a s e d 25'° and a.
it
number of banks who never used our c o l l e c t i o n system b e f o r e a r e now u s i n g
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Federal Reserve Bank of St. Louis
be-
- 7 -
cause of the f r e e s e r v i c e .
,}JLLS - S t . Louis h s o n l y i n c r e a s e d t h e number of benlts, by ubout 1 s i n c e
the f r e e s e r v i c e p e r month was o f f e r e d them.
Governor Harding then s t a t e d t h a t w i r e t r a n s f e r charges were not u n i f o n n
and, afte1· d i s c u s s i o n in \,'hich Lr.
,a.rburg and o t h e r s joined, it
was thought ad-
v i s a b l e to l e a v e t h e wire t r a n s f e r charges f o r e ch bank to d e t e n n i n e .
LY1O1 WO52 r.
We
c h a r g e 1¢
We
per da.y per . ; ; i l , . on t r a n s f e r s .
c h a r g e 2% p e r annum f o r t h e time necessary.
Warburg - Banks do n o t s e e m to use t r a n s f e r f a c i l i t i e s .
AIK@ii - banks w i l l use t h e n a n d f i n d them most advantageous
EQUALIZATION OF RESERVES AGAINT NOTES AND DEPOSIT.
Ai@URe
by adding t h e
Tne o n l y t h i n g which counts is the average reserve ascertained
two together.
l e s s than t h e a v e r s -:e.
Gold reserve in hands of agents should be e. l i t t l e
a 1 k s might s e t asid.e or earmark enough gold to e q u a l i z e
reserve.
Ai
pledge what
question, if a bank had i n s u f f i c i e n t p a p e r to
•
should be done and he was a d v i s e d to secure a d d i t i o n a l pr-pe:r f r o m o ther
4Ai@2 - Raised the
banks.
Discussion on e 9 / l J _ X 2 2 9 E }
being s e c u r e d f r o m a l l member banks in t h e
large oities.
• iAREtJRG - The Boa.rd d e s i r e s t h a t t h e r e p o r t s :from e a c h c i t y be kept
separately.
Grec.t advanta..;o in h a v i n g r e p o r t s at the p r e s e n t time, e s p e c i a l l y
f r o mthe l a r g e centers.
Of
It was suggested t h a t e a c h bank should rnake u... a l i s t
c i t i e s in i t s d i s t r i c t f r o m which r e p o r t s should be received.
It was thought
the State
a d v i s a b l e to have the s u p e r i n t e n d e n t s of S t a t e banks c a l l r e p o r t s f r o m
that
banks on t h e same day av the Federal r e s e r v e banks' reports a r e c a l l e d and
notify
undoubtedly n arrangement could be made in which the c o m p t r o l l e r would
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Federal Reserve Bank of St. Louis
- a -
the s u p e r i n t e n d e n t s t h r o u g h t h e Federal r e s e r v e banks, if necessary,. as to the d.a.te
Of
the c ru.l."
It was suggested t h a t t h e s u p e r i n t e n d e n t s of S t a t e banks should be con-
s u l t e d as to t h e i r u s i n g a u n i f o r m f o r
The S t a t e banks would s e e to t h e p u b l i s h i n g of t h e i r om r e p o r t s but a
Broderick.
py .of
of r e p o r t a l o n g t h e l i n e s suggested by Mr.
t e re ...o r t would go to each Federal reserve bank.
Gov m o r H a r d i n g s t a t e d th t it
was most e c s e n t i a l t h a t two copies of s l l
c i r c u l a r s mid c i r c u l a r l e t t e r s sent out by Federal r e s e r v e banks to member banks
should be s e n t to t h e Federal Reserve Board £or i t s f i l e s and the Federal Reserve
Agent in each bank s h o u l d l a v e two or t h r e e copies subrnitted to him.
it
would be a d v i s a b l e if
In fa.ct,
each member of the Federal Reserve Bo:...rd should r e c e i v e e.
copy of s u c h c i r c u l a r l e t t e r .
Then followed a d i s c u s s i o n on t h e · e f f e c t on r a i l r o a d arid c o r p o r a t e bonds
h e l d by banks
by r e a s o n of
the p r e s e n t d e p r e o i a t ion.·
as to how t h e s i t u a t i o n would be helped.
General d i s c u s s i o n
L7OE - In C a l i f o r n i a we have a s e r i o u s s i t u a t i o n .
dent is now c o n s i d e r i n g h a v i n g
perintenThe b a n k s u...
a p p r a i s a l made of a l l r e a l e s t a t e covered by
mortgages h e l d by savings banks, a l s o to have l i s t s of bonds h e l d by each savings
bank s u b m i t t e d o.t p r e s e n t v a l u a t i o n .
l.rmoUGAL - In t h e Chicago d i s t r i c t our Sto.te bank s u p e r i n t e n d e n t will be
y
a l i b e r a l constructionist.
]1/lliCHER - In Ohio t h e r e is c o n s i d e r a b l e concern as to the p r e s e n t s t a t u s
of c e r t a i n s a v i n g s i n s t i t u t i o n s ,
'JELLS - ,;e have, l i l r e Ohio, c e r t a i n i n s t i t u t i o n s about which there is cons i d e r a b l e conc ern.
AIN
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Federal Reserve Bank of St. Louis
- There is
s e r i o u s s i t u a t i o n in L e , Englnnd.
- 9 n o t be
LY1QCH - Matters s h o u l d be a l l o w e d to r e s t a.s q u i e t l y as p o s s i b l e and
s t i r r e d any more than necessary.
Assistance s h o u l d be rendered in cases where
necessary to hold.
Governor Ea.rding t h e n asked f o r an e x p r e s s i o n of opinion as to whether
another i s s u e of bonds at 4% r a t e would be successful.
developed but the consensus of opinion was t h a t if
Some d i f f e r e n e e of opinion
c o n d i t i o n s do not become wo r s e
a 4%i s s u e could be f l o a t e d .
KaUaG -
While t h i s may be t r u e the next i s s u e w i l l have to contend
with t h i s
with t h e present 4% loan, \,herea.s the 3 1 / 2 % l o a n in June d i d not compete
1.oan to a n y e x t e n t .
I hope, however, the next loan may go at 4%.
SEAY - The savings bank s i t u a t i o n is a menace.
D i s c u s s i o n as
to whether t h e i e d e r a l Reserve Act should be amended
So
as
become memto a l l o w S t a t e banks which were in e x i s t e n c e on November 1 6 , 1914, to
nationo.l
bers of the Federal Reserve System, although t h e i r c a p i t a l be l e s s t h a n
b a n k requirements.
My impression was t h a t the consensus of opinion was a g a i n s t i t .
Governor Harding s t a t e d that the American Bankers Association Committee
banks in
was p l a n n i n g to vigorous a t t e n t i o n to promoting membership of S t a t e
the
Federal Reserve System.
•
a
General d i s c u s s i o n as to orders b e i n g e n t e r e d f o r p r i n t i n g of d d i t i o n a l
amounts of Federal r e s e r v e notes.
,Discussion as to p l e d g e of commercial paper w i t h Federal Reserve Agent
In t h i s ex:, nana indorsement back to bank by h i m of such paper f o r c o l l e c t i o n .
n e c t i o n , Governor Harding s u b m i t t e d memorandum d a t e d November 5 t h .
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
- 1-
C-OYERNORS CONIE.REINCE
£iuDAZ a9ii:Ike,
All Govern ors :present except Governor wells.
General d i s c u s s i o n on stamp tax on f i f t e e n day notes and far. J. F. C u r t i s
of the N e w York bank was asked to f r a m e p r o p e r l e g i s l a t i o n to permit of loans w i t h
Federal r e s e r v e banks up to f i f t e e n days secured by Government obligations to be exempt f r o m stamp tax.
was d i s c u s s i n g tho f
paper and
discountin/*Government
Boston
that
Governor Aiken reported
,..
rebating i t .
« u e s t i o n of d a i l y settlement in e;old. fund and having two accounts w i t h the
Federal Reserve Bank of Heu Yorlc was discussed.
Governor' Seay moved no change in the p r e s e n t method of settlement through
&old fund and same was adopted, it
being understood tha,t New York or any other bank
c o u l d ask f o r s e t t l e n e n t on any day d u r i n g t h e week when it
became necessary.
D i s c u s s i o n as to t r a n s f e r s between banks, e s p e c i a l l y to N e w York.
It
was moved and c a r r i e d t h a t the Federal Reserve Board be requested to a.rra:ne;e with
the U s. Treasurer to make treinsfers regularly on \ledneodays of e a c h .eek and
t h a t the s e t t l e m n t s between Federal reserve banks in t h e Gold Settlement Fund be
made on Thursday i n s t e a d of Wednesday.
It was su g e s t e d by Governor Harding that the governors take up w i t h the
respective boards the s e r v i c e charges
by
Federal r e s e r v e banks.
M
' CDOUGAL - Su gest t h a t in oruer to s t i m u l a t e the use of the Federol Res e r v e System, s e r v i c e charges s h o u l d be reduced u n i f o r m a l l y r a t h e r t h a n by exempt-
i n g a c e r t a i n number of checks f r o m the charge.
Was brought
cu.ssion it
After a general cli .....
out t h a t t h e Federal Reserve C o l l e c t i o n S y s t e m has had the e f f e c t of
reducing charges
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
in
in d i s t r i c t s where f o r m e r l y e x c e s s i v e charges
were made, t h e y were_conforming to t h e 1 /1 o f 1%.
....
;e over other
RHOADS - A c i t y bank in a l!'ederal r e s e r v e c i t y ho.s ad.vanta
The Philc.d.cl h i a bank is
t i n g s e r v i c e charge would
bring
now h a n d l i n g a b o u t 5 , i t e m s d a i l y .
was agreed to by both
Thi
us many more i terns.
Remit-
It developed t h a t f u u r of the twelve Federal r s e r v e banks
LcDougal ana Fancher.
were g i v i n g exempt ions on a c e r t a i n number of checlcs.
I
baks
LYI.CH - The San ..1ranc i sco bank has abandoned t h e attempt to coerce
caused so much i l l f e e l i n g .
by c o l l e c t i n g charges through t h e e:x-press company, e.s it
the v a u l t s
Thell f,ollowed a di cuss i o n on t h e d e s i r c b i l i ty of drawins i n t o
of the 1tederaJ. reserve banks the g o l d o u t s t a n d i n g
d
the
practice of e ch 'bc.nk was
asked.
LYI;"CH -
116
pay charges b o t h ways.
Have· received some gold
nd our b a n k s
a r e , to a c e r t a i n e x t e n t , s o r t i n g c e r t i f i c t e s .
2RA7 -
our d i s t r i c t .
per 1
,
e
le
pay charges both •.. ays.
«e heve drawn in about a l l t h e t:,Old in
l
i
. the la b r a s iio n c h at r g e , wuh i c h oamounts
b to a
absorbed
/e have
Our e f f o r t s included nonmember bonks.
, abrasion l o s s .
) - We do not
a l l o w c h a r g e s in
gold except
h ve not roceived m1y Gold c o i n to -my
exchange.
ai
hen cu rency is
ount.
.e have absurbed
£ , p e r 1
the a b r a s i o n l o s s which in some oaseshas mounted to as l i g h as
In our d i s t r i c t our c i t y banks do n o t
taken in
,
,
1:>era.te in s o r t i n g c c r t i f i c o . t e •
included nonmember banks in our e f f o r t s .
11ILLER - .. e e l l o w charges both ways and i n c l u d e nonmember banks,
absorb ebraaion charge.
Do not
Have c o l l e c t e d about ¢ 2 1 , , .
2 E A 4 I - a e p o r t e d conditions in New York d i s t r i c t .
banks as well.
cnoUG,AL - In our d i s t r i c t we he.ve i n c l u d e d nonmember
Banks seem very w i l l i n g to cooperate.
Have absorbed transportation charges b o t h
ways and a l l o , . u:p to 6 /1 o f 1% a b r a s i o n l o s s .
5 , 5 ba n k s
in o u r
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
district.
Have just s e n t o u t l e t t e r to the
Considerable gola c o i n in.
- 12 I
'
o e n d o f f e r d to
have not absorbed the o r a s i o n
t h e ti_:rr.e but
Pittsburgh
5
,
gold c o i n and ¢
OLD -
Webegan in
.s al
ve
,
2
enks e x o e p t in
:old c o i n h e l d by t h e l c.rge
ave s e c r e d . o s t of t h e
were c o n s i d e r a b l e amounts of g o l d a r e
. ir
,
old c e r t i f i c t e s a l l
A.re r e c e i v i n
vet.
s
.
,
July and
,e
xges b o t h . ..,
cl
p:i.
. o.ve di vn
still held.
in
certificates.
in
xe f i n a l l y
absorbed the a b r a s i o n
o and have accumilated
1
,
,
banks reacled .... oil t where they only he.d. l i g h t w e i g h t coin.
o h a r g =.
.
The wii
t te
d
le
Cit;
other
laces in ...o ta.nu :p y ut consider b l e amounts of gold coin.
RHOADS - Phil
lowed any l o s s b
el h i e pay
brasion.
e
shipping c h a r
of th
ave cleane
our d i s t r i c t but tl e r e are o. number of ...1 ce ... " e r e
but h ve n o t a l -
evs
: o l d , e t h i n k , in
chines f o r payin
old coin
in payrolls a r e s t i l l being u s e d .
stood a b r a s i o n l o s s and pay both
V
revious to war beine decl re , f o r shipment of
t.. rou
t e e· shi . e n ts .
c o i n to
t wei
had. numerous deman s f o r
le
t
uexioo,snd we t h o u
r c t i c a l l y a l l the li
t h e m to Germany, and di ...osad of
our d i s t r i c t th'rou
g0l¢
l..c.a. o.e1 en ds ,
ays.
ola.
i .
ll
i1l
t to
i e x i o o and Spain.
A I k : - Boston
ways
pays c h a r + s s b o t h
tends the
ho.d f i n e coo er .... ion f r o m our ban . end a l s o tl e s a v i n .
l i t t l e , if
n y , coin le.:.t in our d i s t r i c t .
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
\
banks,
abrasion l o s s .
The re is v e r y
we
- lv GVERNORS CONFERENCE
FRIDAY, 3 n. m,·
Governor Aiken reporte • t h e governors' actions as to d a i l y settlements a n d
Also
t a t e d t h a t t h e y f e l t t h e i r was no n e c e s s i t y :f'or two accounts w i t h New York.
asked t h a t the F e d e r a l Reserve
Goard r e q u e s t the Treasury De,Paz·tmen t to make c.:hange
in d a t e of t r a n s f e r s , e t c .
Governor Harding asked as to t h e o.t ti tude of the governors to.vards pled i n g commercial
paper with t h e Federal reserve agent and indorsement back to the
bank by h i m of such paper f o r c o l l e c t i o n .
1.:mm - Rep·orted that in San s rc i s c o they indorsed by rubber st anp a.11
paper o f f e r e d to the F e d e r a l r e s e r v e a ,en t and t h e n the Federal r e s e r v e agent i n d o r s e d it
It was st t a d th t Judge E l l i o t t had d e c i d e d t h a t t h e r e vs
back.
no
o b j e c t i o n to t l i s r a c t i c e .
YAN AND2 - Reported t h a t they used t r u s t r e c e i p t and i n o r s e d on back
" Paic
° i d to Federal reserve agent of D a l l a s , "
Governor Hardin
r e p o r t e d tha.t the Federal r e s e r v e agent may turn back to ,
the ban f o r c o l l e c t i o n commercial paper pledged f o r note i s s u e .
thought it
S t a t e d t h a t he
would be a d v i s a b l e f o r each bank to have a m i n i m u m and maximum c. .cunt
of Federal r e s e r v e notes needed by each bank.
General d i s c u s s i o n followed as to d i s c o u n t r a t e s .
,LY!;vH - Re o r t e d demand now for rediscount at i t s maximum a
11e'--vy
demo:ids.
w i l l have
The l a r g e b ank:S w i l l be l i q u i d a t e d q u i t e f u l l y by F e b r u a r y 1 s t .
OD0UGAL - Reported that the hi c e g obank was
2 5 b a n k s at the p r e s e n t time.
be at minimum by
mairing
lo s s to about
.'ould i11crease up to January l s t .
Denend s h o u l d
March l s t .
llILLBR - Reported Ka.nsa.s C i t y reached i t s maximum about December 15th.
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Federal Reserve Bank of St. Louis
-14-
Thought it was n o t ac.. d v i s a b l e to have any higher r a t e s .
I;.)
<;.i,
UCrJOlID - Sc.id t h e i r l o a n s 'Were nov.- at
the peak 'and t h e h i g h p o i n t w i l l
continue unti 1 about December 1 5 t h .
SEAY - Bonk:s in our d i s t r i c t nave s u b s c r i b e d t o o hee.vily fol. L i b e r t y bo11cis.
le s h a l l ha.VE to rru. se o u r r a t e s f r o m p r o b a b l y 3 1 / 2 % to 4 o n lo ens s e c u r e d by
Government s ecul·i t i e s .
1.CDOUGiiL -Chica'1:Ibank ho.s encouraged. the banks to borrow and they are
Do n o t a n t i c i p a t e
expecting l o w r a t es on loe.ns s c u r e d . by Govcrnmen t s e c u r ! t ie s.
t h e y Vi 11 be c a l l e d . on to borrow of o t h e r Federal r e s e r v e banks.
I K E - Reported
that
Boston wo.s h e a v i l y lo,med. ,:.J'ld but l i t t l e money
Peak of' t h e 1 oan f r o m December 1 5 t h
!,.oney c ondi ti ons very ti ..,ht.
available.
High p r f o e s f o r labo1
to..,Junua1--y1 Gt.
d matcnio.l adcl burdens to mnnufa.cturer.
Gorporst ions had h a d g r e a t p r e s s u r e put upon them to buy L i b e r t y bonds.
w i l l need to still paper to other Federal r e s e r v e banks.
sm-pri.sed to hear the e x p r e s s i o n f r o m n e a r l y all
can be kept low, in
t h e i r judgment.
VAN AINDT
1
-
Boot an
Gov-error Aiken was
the o t h e r e.overnors t h a t r a t e s
had
In our c l i e t r i c t \.'e ha.ve,.considerable l i q u i d . a . t i on rece11tly.
Expect s t r o n Z ;dem211d.
i
v,ill come e a r l i e r
Believe we should maintain 3 1 / 2 % r a t e .
t h i s year, ...ro ba b l y in February.
Mr.
d£.S
xpect
Warburg s u g g e s t e d t h a t it
1 1 me te ri
al ch:...nge u n t i l February l z t .
would be a d v i s a b l e to b r i n g a b o u t l i -
q u i d a t i o n of bonds where h e l d by member banks insoft-r e.s i t , . . $ p o s s i b l a .
it
I
RHOADS - Ve a n t i c i p a t e c o n s i d e r a b l e b o r r o w i n g a f t e r November 1 5 t h .
Our
banks have r a t h e r a n t i c i p a t e d t h a t t h e r e would be a 4% r a t e on l o a n s s e c u r e d by
Goverl"ll1lent oblig:tions.
ougnt to be e a s y
on other banks to take some of' o u r paper.
•
y February l s t .
le may have to c a l l
Uncertain as yo t.
AR@UiG - P h i l a d e l p h i a ought to encourage the r a t e of 3 1 / 2 % o n
t r a d e acceptances.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
j
1
i
l
- 1 !3 -
Abnormal conditions p r e v a i l -
:oLD - View i n ' o u r d i s t r i c t is u n c o r t t i n .
ing.
Easy p e r i o d about February l s t to a r c h l s t .
R a i l r o a d s congested.
t h i n k r a t e on f i f ' t e e n day loans ..;hould be continued at 3 1/2%.
FR
- C l e v e l a n d advanced i t s r a t e some two or
3 .to 3 1/ 2 and 'from 3 1 /2 to 4%.
t h r e e months ago f r o m
maximum c h a r g e is in December.
Our o r d i n a r y
.e
expect v e r y heavy demands on account of banks' pul'chases of Libe1ty boncls.
Governor H""'rding, c f t o r s t a t in
ors in
l is
leasure
t t h e o c t i o n of the govern-
u r c h a s i n pt.per f r o m the Ne. Yorlt ba.nlc so 1 r . i l l i n g l y , asked f o r an e x p r e s s i o n
of' o i n ' o n
£.Ci
to r e m i t t a n c e of such S t a t e be.nks
hose p r e ...ent c a p i t i l i z a t i o n is
low the requi ·e e n t c of t h e F e d e r a l Reserve ... c t .
l . e a r l y all
be-
t h e governors d i d not
favor r e m i t t a n c e of such Jt.a.te banks.
Some d i s c u s s i o n as to p a y i n g s a l a r i e s to e n l i s t e d men.
It developed that
most lI'ederul re ...e r v e b e n t s are p a y i n g tl e d i f f e r e n c e between the s a l ar y f r o m the
Gov .rumen t end tl
C h i c a g o bank i n v e s t i g a t e s each c a s e and
t p a i d by the bank.
;:overnors i t s e l f a c c o r d i n g l y .
There was c o n s i d e r a b l e d i s c u s s i o n as to the p r a c t i c e in v a r i o u s d i s t r i c t s as to meeting o u t - o f - p o c k e t expenses i n c u r r e d by banks in L i b e r t y Lon
campaigns.
,
RICE... OlID r e p o r t e d en a.llowance f o r expenses of 8
CHICAGO reported
4 5 , .
DALLA r e p o r t e d ¢ 2 5 , . and have s o l d 7
A2LARITA s o l d 5
,
,
,
,
,
. and had an allowance of 4 1 , . f o r expenses.
Kl .ubS CITY was el lowed 4
in t h e i r di s t l ' i c t .
.
,
, f o r expenses and w i l l s e n d 1
,
.,ere not c J . l o i n g o u t - o f - _ocket expenses to bS'lks.
CrICAGO have n o t at tempted to a l l o w o u t - o f - p o c k e t ex_penses.
CL'EV::L.AND have n o t rai s e d the ...uestio11 ,i th t h e banks.
he n t h e y r a i s e it w i t h t h e Cleveland bank.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
; ! i l l n e e t it
.
- 16 -
J E R a & o L I s e a r e not
n in o u r
attempting to reimburse tbe 4 , , b a ks
d i s t r i o t.
- - - L A -
We a r e not t r y i n g to reach each bank.
le
have a l l o ed
commissions in c e r t a i n cases.
DALLAS - ,e e.:.i.,e
1 1 t
talcin
t h i s mt t e r up , i tL. o u r b a n k s ,
Federal r e s e r v e benks g e n e r a l l y . e r e not roimburcin
bond houses f o r
s a l a r i e s of t h e i r salesmen, o n l y ac tual expenses.
and gave a t a l k
Mr. C l i f f o r d of t h e r e a . , u r y Department was i n t r o d u c e d
L i b e r t y Loan m a t t e r s
about twenty mintues to one- a l f an hour on t h e way the
He e x p r e s s e d the f e e l i n t h a t ...ome
had been land.led in the Treasury Department.
Of
enough in t h e i r allo·,:.rt..nces
of' the Federal r e s e r v e clis tr-icts had not been l i b e r a l
a l l o w i n g of e:x;penses p r o a.nd. t h e d i s t r i c t s which had been most l i b e r a l in t h e
duced best r e s u l t s .
About 9 , 5 , p e o p l e had s u b s c r i b e d f o r bonas,
Thought
•wit" p l a t e matter in
that our d i s t r i c t should b e g i n to f u r n i s h c o u n t r y papers
should h ve b e t t e r
preparo.tion f o r the next ccmpaign so t h a t c o u n t r y u i s t r i c t s
f o r bona i s s u e s .
understanding of the reasons f o r t h e war and the n e c e s s i t y
He
or more f ' i r J t - c l o . s s o r s u g e s t e d f u r t h e r t h a t each d i s t r i c t should s e c u r e one
in each d i s t r i c t where t h e r e
g a n i z e r s and immediately begin checkin u... t h e p l a c e s
had not been a good response
nd t h i s work
should begin at once.
Suggested f u r -
committees and ;perhaps
ther thnt more business men should be usea on the v a r i o u o
service,
Suggested the n e c e s s i t y f o r e n l i s t i n g men f o r t h i s bond
fewer bankers,
the same as f o r o t h e r Governuent s e r v i c e ..
where S e c r e t u c y
The meeting t h e n udjournecl. to SecJ."etc.:.ry t..oAdOO' a o f f i c e
a
McAdoo eave an informal t l l t of • bout o n e - h e l f an hour
governors e.s to matters in e ch p&l"ticulcJ." d i s t r i c t .
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
th
a s k e d the v a r i o u s
Suggested v a r i o u s reasons why,
.
%
4
at
e
u
s
si
t
x
e
n
e
ht
on
7
1
-
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
et
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