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Federal Reserve Bank of St. Louis
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Federal Reserve Bank of St. Louis
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Federal Reserve Bank of St. Louis
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Federal Reserve Bank of St. Louis
Secretary's
OVERNORS
C ¢
October 1 0 =12, 1922
Washir
g t o n ,
D ,
C .
C205S REFERENCE INDEX TO
SECRETARY'S MINUTES AND STENOCRAPHIC FICORD
OCTOBER 10 = 12, 1922 CONFERENCE OF COVERNORS
Paragraphs in} P a g e s i n
Secretary's |Stenographic
Minutes R e p o r t
A’sorption o f costs o f shipments o f coin
to and from member banks . . . . . . . -
|
G
1
2
,
1
5 9 8 b - 1 1 2
128-132
Acceptances =
Report o f General Committee
ON <ce S s
m
s I
3
2
0
-
ACCOUNTING A N D AUDITING
Report o f Committee o n Standardization
m Accounting Torme o>.
s s 5 6 ws :
Proper nethod o f distributing commissions earned o n investments
for 2 oreign “banks < 4 2 42.
2
‘
L
1
i
2
2
-
1
Accumulation o f used but fit currency 1
Action t a k e n
2
7
2
6
9 8 = 9 8 b
i
‘
Advice o f opening o f banks previously
oe
e e e
a e e e e e
7
Advice t o direct sending banks o f other
districts o f non-payment o f cash items .
1 8 6 - 1 9 1
7
1
5
Advisability o f further reduction i n total
investment sacegunt:
< < 2.04 b s
S e
S e
o n subscriptions t o n e w issues
of Government ‘secu ities <4. 4% s s s s
American Acceptance Council = sustaining
m e m o e r sih i a 6 2 4 s s
a e a
ee
Bond Investments b y Member banks .
o
s
....
"Borrower" ~ - Interpretation o f i n Sec.
3 P a Se B O a
aes e e
a e e e
Cancelled bonds/notes = Risk assumed
by F. R, B s i n shipping t o Washington . .
Closed banks =< Advice o f reopening . . . .
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Federal Reserve Bank of St. Louis
-
1
a t Governors C o n f e r e n c e s
Varying interpretations o f . . . . .
Allotments
7
2
Gov.II-8.
-
4
7
+
1
8
5
8
Secretary's
Pages i n
Stenographic
Minutes
Report
Paragraphs i n
COIN, CURRENCY A N D CIRCULATION
Vault reserves o f F, R. B s and percentage o f gold coin and cer~
Sifictatom (et 0tet o e e e s e
Til .As
Standard of fitness o f currency .
T1i.8.
Reconsideration o f action o f last
conf erence relative t o absorption o f costs o f ail shipments
of coin t o and from member banks
in view of possible attitude o f
Treasury because o f discrinina-
98b-112;
128-132
tion against nonmember banks . .
Coin s h i p m e n t s t
o and from member
banks ~- absorption o f costs i n view
of Treasury attitude because o f dis=
crimination against nonmember banks .
98b-112;
128-132
Collection o f items payable .in foreign
countries . . . . +
18-82.
COLLECTIONS AND CLEARINGS
Report o f Standing Committee o n
Collections +
«++. + «+s -e-+e-s
Extent t o which non-cash collection
department has been developed
in
e
a c
h
b
a
n k
*
a
a
7
-
.
¢
=
s
e
2
*
s
Raising limit o f no-protest items
ga. o 0 S O e e e
e
e eee
Liability o f Res. Bks. i n making
unqualified indorsement o n
checks received for collection . .
16; 398-399
Advice of opening of banks’ pre7778
viously closed :
Should F. R. B s handle collection
items payable i n foreign
e
e
e
e a
a
ea
o
f foreign
Commissions o n Investmentsr
' banks - distribution of
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Federal Reserve Bank of St. Louis
217-226
Secretary's
Pages i n
Stenographic
Mirutes
Report
Paragraphs i n
Committees < «
Covnittee o n Centralized Execution o f
Purchases a n d Sales o f Govt, securities
pee
S
S
y e e 2
a
Cove s h e
Gov. Fancher added t o personnel o f
asa0 250
14; 3
0
s o fe meeting
t
uO c t .
n 2,i 5h MBeate
30
Committee o n Open 3i11 Market Condition
aiid O p e lt na— 6.6. 6
6. o eg
S e
39
Committee o n Standardization o f Account
ite Pere 6 S
s e
ww
e
e
e
General Comaittee o n Acceptances
Gov. V I . A .
25
Gove I » D e
38
General Committee o f Twelve o n
Economy ani Efficiency
Insurance Committee
. ,
..,
Leased Wire Committee
Pensiun Counittea:. |
Gov. IV.H.
191+212
Gov. I V . A .
132-140
Gov. -IV.6d.
140-150
S
358-367
Standing Committee o n Collections Stone Of. i
6 « 638 6
w a S e
Gov. I I .As.
Condition - Weekly report o f = change i n
6=56
956-357
Costs o f shipments o f coin t o a n d from
member banks = absorption o f i n view
of Treasury's attitude because o f discrimination against nonmember banks . .
Gov.III.Cc.
98b-112
128#132
CREDIT TRANSACTIONS A N D POLICIES
Investment Policy o f Reserve Banks
Gove I . A s
Report o f Committee o n Centralized
Execution o f Purchases and Sales
of Govt. Sonds b y F. Rk. 8s .
Gov.l .A.l
Advisability o f further reduction
in total investment account
. .
Investments for Earnings . . . . .
Gov.J A . 2
Govel.A.3
291-293
Gov.[sA.4
293<297
Policy i n relation t o Gold Imports
and Money market .
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Federal Reserve Bank of St. Louis
.
Program |Paragrajhs in} P a g e s i n
and S e c r e t a r y ' s |Stenographic
Topic M i n u t e s R e p o r t
Purchase of Exchange... . +. +s + « G o v . I.A.5.
3
5 9 7 - 3 0 0
Interoretation o f "Borrower" Sec.
13 F.R.A. limiting amount which
F.R.Bs may rediscount for any one
tnuocsiD
Toit ete e r y eee
o
s
‘Rates
Report o f General Committee o n
Acceptances. .
. e« «
Currency accumulation = u
Currency fitness - standard o f
9
0
-
9
8
Direct sending banks <+ advice o f non
mers of Sher (tens
S
S 8 se :
pemount Nites 4 5 ) 6
1 1 5 4 - 1 5 8
o e Se
e si
:
3
2
5
Distribution o f commissions earned o n in-
vestments for foreign banks ....4.-+ |
Gov
Duplex telegraph wire N. Y. - Chicago
-
2
-
1
1
7
-
5
2
0
-
2
1
5
6
4
ij
Earnings ~ Investments for
i
G
o
v
. I.A.3.
3
3 2 9 1 - 2 9 3
|
Beonomy a n d Efficiency -
Progress o f work
}
of General Committee o f Twelve o n . . .
!
Gov. I V . H . :
1 9 1 - 2 1 2
|
|
Examination o f National Banks -
{
Payment for reports o f . .
i
o
e
. fa.
--ts a h 1 1 2 - 1 1 4 ;
{115-127;
270 ~291;
368-371
|
i
Use o f Revorts o f b y Branch Managers .
3
6
Exchange = Purchase o f . . . . + . + . + . + -
. - |Gov. I-A.5.
Extent o f development o f non-cash collection department i n each bank . . .
G o v . 11.8.
8
2
9
3
7
7
=
3
1
0
0
Fancher, E . R . - Member Committee o n
Centralized Execution o f Purchases
and Sales of Government Securities . . .
[
1
1
4
-
1
1
5
;
1247-270
Farm Land Banks - reimbursement a s fiscal
Mee O e e s
e o a
ee
w e
e
s
|
Federal Reserve Pension P l a n
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Federal Reserve Bank of St. Louis
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Paragraphs in, P a g e s i n
Secretary's ;€tenograpkic
Minutes
R e p o r t
FISCAL AGENCY OPERATIONS
Payment o f Savings Stamps
due January 1 , 1923
Allotments. o n subscriptions t o n e w
issues o f Govt. securities t o
banks a n d o t h e r s
Permanent r e c o r d s
. .
a g a g e eee a e
o f source
Government securities
o f all
. . . . .
‘SES
(391-296;
| 422-425
Payment o n presentation o f 211 matured
Victory coupons regardless o f whether
the notes f r o m which detached h a v e
been p a i d o r not - « . . .
396+398;siv
425428
§
Fit but used currency - accumulation
of
&
98-98
Fitness o f currency ~ standard o f
..,..
Gov -III.B.
90-98
Foreign Collection items + » . . . ao
Sa
Gov. II.F.
78-82
GovelII.A.
83-90
Gov.1.A.4
293-297
Gov. V.B.
279#390
e e
G o l d coin and ctfs. i n vaults o f
Federal reserve Banks - percentage o f
Gold imports and money market = policy
in
POlutioi-t6
4 .
g g
s e
e e
+ 2
4 6
e s
Government Securities «
Allotment o n subscriptions t o new
issues
to banks a n d others ,
Permanent r e c o r d s
$ e
o f source
a
e e e e
of . . ,
a e
Gov. V.C.
| 422-425
Purchases a n d Seales -
Report o f Committee
Govel.A.l
Interpretations o f action taken a t Governors
Conferences ~ variations i n e e e e
oe e r e
1-6;247-270;
432-439
O
186-191
Interpretation o f "Borrower" Sec. 1 3 F R.A.
limiting amount which F .R.Bs may rediscount.
eer tny tue Sank
s
e
e
e
e
Gov. 1.8,
Investment Account < advisability c f further
reduction i n total investment account
:
a
e
a
e
e
e C
e
Investments for foreign banks - distribution
of commissions earned o n . .
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Federal Reserve Bank of St. Louis
o
s !
o
r4
~
%
V
e 2sV C L G
«4
>
300+320
n
291
291-293
217-226
~Propram jpParagraphs
e
r a j 5 in) P a g e s i n &
and S e c r e t a r y ' s ; Stenographic
Topte.*} M i n u t é s
Investments i n bonds b y member banks . . . .
&
1
Liability o f Res. Bks. i n making unqualified
indersement
M N S GR
o n checks received f o r col-
e e e ea
ee a
o e ees
e e e
Mail = pouching o f through establishment o f
M a p e t e t s Gn. po0n.- 0:7 L o s a
6
Wee 2
Matured Victory coupons - sayment
Sel
S o a e a eSoa o e eee e e e
. =
ee
=
Member banks' b o n d investments
G
S
O
s
u
p
Membership i n American Acceptance Council
Vals
. IV.
S u r . Like
National B a n k Examiners Reports i
?
Porn
O F a
o
o
S
e
G
o
v
.
1
l
V.F
vse oy Managers o f Branches . . . . . . New Issues o f Government securities - allotments o n subscriptions t o banks a n d
Serer e t 5
e t e p e s e t S e e a
Non-cash collection department - development
R o e
S S a . Se
e S
e e e e e e e
Non-member clearing banks - telegraphic
transfer for
1
Non-payment o f c a s h items -
7
1
No=protest itens - raising limit o f
Opening o f banks previously closed - advice
SS
a
a e
e
e
e
OPERATION
Report 2 f Insurance Committee
Report o f Leased Wire Committee
Method o f advising direct sending
banks o f other districts o f
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Federal Reserve Bank of St. Louis
1
8
2
method o f advice
todirect sending banks of other districts.
non-payment.
-
o f c a s h items
1
5
4
-
1
5
8
and
Secretary's
Pages i n
St enographic
Topic
Linutes
Report
Gov.IV.D.
20
Program
Telegraphic transfers - + + + + = »
Paragraphs
Use o f test words b y Treasury Dept.
telepraphic transfers . ..- +--+ -
in
159-171
182-185
Gov.1V.E.
Payment ofor use o f N- B. Examiners'
reports
P
Gov.1V.F.
e
eo 5a. (46
112-114;
115-127
270-291;
368-371
Varying interpretations o f action
taken a t Governors C o n f e r e n c e s .
Gov.IV.G.
186-191
Progress o f work o f Gen'l Comm. o f
Twelve o n Economy and Efficiency
Gov.iIV.H.
191-212
Par Collection System
e
k
o e
401-402
n s
Payment f o r u s e o f National B a n k Examiners
Meporus- = , 4. 6-e S o o e
e o
S e e
Gov.1V-F.
112-114;
115-127
270-291;
368-371
Payment o f Matured Victory Coupons
Gov. V.D.
396-398;
425-428
Gov. V.A.
271-279;
407-422
... -
Payment o f Savings Stamps and Certificates
dug Sander yha Loss e c i e n t o e e S
POnsiSn Pian
5 6
Permanent r e c o r d s
S O G EtPT
168-3
s e a
See
o f Source
358-367
eee
o f a l l Govt.
6 6 h eee a
a
we
Gov. V.C.
391-396
422-425
Policy i n relation t o Gold Imports and
Gov.1-A.4
293-297
for pouching of mail . . + + + + + + + s s
ene B e
227-231
Pouching o f mail ~ establishment o f substatjon post offices « « + « + + 2 «e+ « »
Sup. I.
227-231
Purchases a n d Sales o f Government Securities
Report o f C o m m i t t e e . . « «.& 2 2 0 « o s
Gov.J.A.1
1-6; 247-270;
433-439
114-115;
247-270
Gov.1.A.5
297~300
Money Market .
2. 1 6 6 © = © © © + 2 + =
Post Office sub-stations -
establishment o f
Gov. Fancher appointed member o f Comm. . .-
Purchase o f Exchange . «
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Federal Reserve Bank of St. Louis
Ralsing limit o f no-protest items
Rates o f discount . . . .
Reimbursement o f Federal R
as fiscal agents F a r m Land banks
=:
e
s
W a r Finance Corp,
c
s
ft o rn oun e o bank
-
i
d
e
R
4
inter
vretation
of"borrower" Sec. 1 3 F. R. A. limiting
Pe
0 8 oe i a
e
e 3
=}C o v e .
Be
Reduction i n total
weality o f = > .
;G
Reports o f Examination o f Nation=1 Ranks 1
S e e
e
e
e e e
e
e
o vwheni
Gov.1V.F.
1412-114
| 115-127
>
,
270-291;
| 368-371
Use by Managers o f Branches .
368=371
Reports o f Committees Committee o n Centralized Execution o f
purchases a n d sales o f Government
Securities b y Federal reserve banks .
Gov. -AelL
Gov. Fancher a d d e d t o personnel o f
t t
B e e
e
e
r
o
248~252
1 114-115
| 247~270
Minutes o f meeting o f Oct. A , 1922
Committee o n Open Bill Market Condition
Mean O O P S i o e
S s e
e s s se
E S , :
Committee o n Standardization o f Account
o e
S S S
S e
e
e
e e =
Gov.VL.A
General Committee o n Acceptances
Gov. I.D.
General Committee o f Twelve o n Economy
and Efficiency
. . . . .
Insurance Committee .
Gov.IV.H.
< 2
Leased Wire Committee . . ,
ecw
Standing Committee o n Collections
Gov.1V.A.
135-138
Gov.1V.3.
aighios
Gov.ii <Ax
18-56;
Reserves -
Gold a n d Gold ctfs.
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Federal Reserve Bank of St. Louis
ji9l-<le
|
i n vaults o f F, R. Bs.
Gov,ill.A
400
Pages i n
Paragraphs i n |
|
Secretary's
Minutes
a e
Risk a s s u m e d
by t s
{
S t
enographic
Report
B a c i n shipping
cancelled bonds/notes t o Washington. .
Savings Stamps and Certificatas d u e
Jam. 1, 1923, payment o f 2 s s s i a e s
28;55
aa 1-242;
42 8-433
45;52
271 se
Shipments o f cancelled pice an eateigese
to Washington Risk assumed b y F.
Source o f a l l Government Securities Hermationt rererds o f o o
S
e
e e
Subscriptions t o new issues o f Govt.
Securities allotments o n t o banks a n d
DUMOT G 6 a s we S e a a
a
e
e
27 9-390
Sub-station post offices - establishment
of for pouching o f mail . . . . . - .
Sustaining membership i n American AcCO t i t e C o u n c ) —
2
o s ew e e e
24 3-245
Treasury savings certificates a n d stamps
due Jan. 1, 1923 - payment o f . . . .
Supe VeAe
Standard o f Currency Fitness . . . .
G
o tvrass
s
Telegraphic Transfers For non-member clearing banks . .
Limitation over orivate wires . .
Use o f test words o n by Treas. Dept.
17 1-132
15 9-171
18 2~185
Test words o n telegraphic transiers - use
of b y Treasury Department
. . . . . .
18 2-185
Transfers For non-member clearing banks . . . . .
Limitation o f over private wire
. . -
Use o f test words b y Treasury i n wikine <
C G U .V e 1
171-182
is 9-171
18 2-185
Gov.II.D.
76 3398-399
Gov.1V.D.
Unqualified indorsement o n checks received f o r collection ~
Liability
of reserve banks i n making . . . + . + . .
Used but fit currency - accumulation o f
Vault reserve o f Federal reserve banks
Victory Coupons -
Cov 1litahe
payment o n presenta-
So00- Of a1) emiured 4 ° . 6
hss
Jar Finanee Corp'n. - reimbursement o f
F, R, Bs. as fiscal agents of . . .
Weekly Report o f Condition
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form o f report o f .
Federal Reserve Bank of St. Louis
- chanre i n
Gov. V . D .
PROGRAM F O R GOVERNORS' CONFERENCE
October 10, 1922
Washington
Ee C R E D I T TRANSACTIONS AND POLICIES
A.Investment Policy o f Reserve sanks ( d i s c u s s i o n )
1. R e p o r t o f Committee o n Centralized Control o f Purchases a n d Sales o f Government Securities f o r
o Federal Reserve Banks,
agcount f
Governor Strong, Chairman,
Advisability o f further reduction i n total i n v e s t
( d i s c u s s i o n )
ment account,
Investments for Earnings,
( d i s c u s s i o n )
New York
San Francisco
Policy i n relation t o Gold imports a n d Money
Market.
(
d
i
Purchase o f Exchange
s
c
u
s
s
i
o
n
)
( d i s c u s s i o n )
New York
San Francisco
Interpretation of "Borrower" Section 13 F, R, Act
limiting amount which Federal Reserve Banks may rediscount f o r any one bank, ( d i s c u s s i o n )
Richmond
Discount Rates (see Federal Reserve Board letter X-3518
of September 9, 1222 - Joint Conference Program)
(discussion)
San Francisco
Report o f General Committee o n Acceptances
Mr, Kenzel, N e w York Chairman,
COLLECTIONS A N D CLEARINGS
A,Report o f Standing Committee o n Collections
Mr, Strater, Cleveland Chairman,
8, Extent t o which non-cash collection department
has been developed i n each bank, number o f
banks using facilities, classification o f
banks a s to reserve cities and otherwise,
and expense involved, (
discussion)
Chicago
€.Raising limit of no-protest items from 1 0 to 920
(discussion)
D, Liability o f Reserve Banks i n making unqualified
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Federal Reserve Bank of St. Louis
indorsement o n checks received f o r collection,
Recommended:
Theat uniform indorsement b e adopted,
Richmond
egZg-«
COLLECTIONS AND CLEARINGS (continued)
E. A d v i c e o f opening o f banks previously closed.
Recommended:
That e a c h Federal Reserve B a n k advise e a c h
other Federal Reserve Bank, b y wire o r
letter, w h e n a
member o r nonmember b a n k
in its district, previously advised a s
S
closed, i s reopened,
n Francisco
a
F. S h o u l d Federal Reserve Banks handle collection i t e m s
payable i n foreign countries.
S
t
a
n
d
i
n
g Committee o n Collections.
COIN, CURRENCY AND CIRCULATION
A. V a u l t reserve o f Federal Reserve Banks a n d percent-~-
age of gold coin and certificates t o total.
(discussion ) B o s t o n
B. Standard of fitness of currency ( d i s c u s s i o n ) R i c h m o n d
C. R e c o n s i d e r a t i o n o f action o f last conference rela-
tive t o absorption o f costs o f all shipments o f
coin to and from member banks. i n view of possible
attitude o f Treasury because o f discrimination
against nonmember banks.
( d i s c u s s i o n )
S a n Francisco
OPER ATION
A. Report o f Insurance Committee
Mr. Cramer ,Chicago Chairman.
B. Report o f Leased Wire Committee
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Federal Reserve Bank of St. Louis
Governor .McDougal, Chicago Chairman.
Method of advising direct-sending banks of other districts o f non-payment o f cash items.
Present practice i s t o send s u c h advice prepaid over
commercial wires.
Recommended:
That private wire b e used for such advices t o
S
banks located i n Federal Reserve cities.
n Francisco
a
Telegraphic transfers. W h e t h e r transfers over
private wires s h o u l d b
e limited t o transfers
of bank balances s o that transfers f o r account
of individuals, firms, corporations, etc., should
be effected b y member banks a t own expense over
commercial wires,
( d i s c u s s i o n )
S
a
n Francisco
OPERATIONS (continued)
Use o f test words b y Treasury Department
on
discussion)
telegraphic transfers. {
S
a
n Francisco
Payment for use o f National Bank Examiners’
reports.
( S u g g e s t e d f o r discussion a t con-
ference, also with Comptroller o f Currency.
C h i c a g o , San
See also Joint Conference Program)
F r a n c i s c o &
Recommended; ( S a n Francisco)
B
o
s
t
o
n
‘That t h e matter b e taken u p with t h e Comp-
troller again with view to eliminate the
cost o f these reports o r t o reduce t h e
amount o f the charge t o cover o n l y t h e
actual c o s t o f copying.
Varying interpretations
o f action t a k e n a t Governors’
Conf erences, (
discussion)
S
t
. avis
N
e
w York
Propress o f work o f General Committee o f Twelve o n
Economy and Efficiency.
( d i s c u s s i o n )
FISCAL ACENCY OPERATIONS
A. Payment o f Savings Stamps and certificates due
January 1 , 1923 (Suggested that Mr. Gilbert discuss w i t h Governors.
B
o
s
t
o
h
B. A l l o t m e n t s o n subscriptions t o n e w issues o f
Government securities t o banks a n d others.
Recommended:
That the Treasury b e requested not t o make
allotments t o Reserve Banks until t h e subscriptions a r e closed a n d the total- amount
known, a n d then t o make allotments o n the
basis o f t h e total subscriptions received b y
each Reserve B a n k o n a n exact percentage
basis, i n order t h a t t h e Federal Reserve
Banks m a y i n turn make allotments o n a sliding scale, allotting t h e smaller subscriptions i n full.
N
e
w York
G. P e r m a n e n t records o f source o f all Government
securities.
Recommended:
That the Treasury b e requested to reconsider
its instructions with regard t o Reserve Banks
keeping a permanent record o f the source from
which a l l G o v e r n m e n t s e c u r i t i e s
and t o waive t h i s requirement.
a r e received,
N
e
De P a y m e n t o n presentation o f a l l matured Victory coupons
regardless o f whether t h e notes f r o m which detached
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Federal Reserve Bank of St. Louis
have been paid o r not.
Recommended:
That t h e Treasury b e r e jested t o reconsider i t s
w York
FISUAL AGENCY OPERATIONS (continued)
instructions with regard t o the handling o f
coupons f r o m called Victory notes a n d t o
authorize Federal Reserve B a n k s t o p a y all
New Y o r k
matured coupons o n presentation,
ACCOUNTING AND AUDITING
A. Report o f Committee o n Standardization o f Accounting
Forms, M r . Vogt, Chicago Chairman,
B, Proper method o f distributing commissions earned on
investments for foreign banks, .
(
discussion)
San F r a n c i s c o
TOPICS FOR DISCUSSION A T JOINT CONFERENCE
OF GOVERNORS AND AGENTS O F FEDERAL
RESERVE BANKS
CREDIT POLICY
Federal Reserve Board letter +3518 o f September 9, 1922
{Topic I C Governors’ Program)
Federal R e serve s o a r d
PAYMENT F O R USE O F NATIONAL BANK EXAMINERS' R E P O R T S
(Topic I V F Governors’ Program)
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Federal Reserve Bank of St. Louis
Chicago, S a n
Francisco &
Boston
SUPPLEMENTAL LIST
OF
TOPICS RECEIVED TOO LATE FOR PROGRAM
OCTOBER 1922 CONFERENCE OF GOVERNORS
Pouching o f Mail + Establishment o f sub-station
Post Offices
(
d
i
s
c
u
s
s
i
o
n
)
Philadelphia
Risk Assumed b y Federal Reserve B a n k s i n
shipping canceled bonds/notes to’
Washington :
(discussion)
Sustaining Membership i n American Acceptance
Council
( d i s c u s s i o
n
)
Chicago
New York
Bond Investments b y
Member Banks ;
(discussion)
(Governors Norris and Seay requested
toprepare a memorandum).
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Federal Reserve Bank of St. Louis
Atlanta - Richmond
Philadelphia
Boston Group Conf,
1 F E D E R A L RESERVE BOARD PROGRAM
Joint Conference of Federal Reserve Agents and.Gove rors
With!
Federal Reserve ‘Board,
October 1922,
Federal Reserve Credit Policy
(See X-3518 - Sept. 9, 1922)
L.__What object should Federal Reserve credit policy seek to
accomplish and by what test may we know that it is sound?
_Discussion t o b e led b y Messrs. Norris and Wills.
What relative importance should b e given t o the following
factors i n d e t e r m i n i n gh
c
u
s policy?
a, F e d e r a l Reserve reserves,
b.Interest rates in the open market.
Intere st charged b y member banks.
Interést rates paid on time deposits,
Balance o f trade a n d inward o r outward movement o f gold.
Credit conditions in, and exchanges with, leading foreign countries,
Volume of bank loans and deposits,
e
e
Business and industrial activity, present o r prospective,
Commodity price levels,
j. Condition o f security markets,
ee D i s c u s s i o n to be led by Messrs, Jay and Seay.
3, What light does the experience of the Federal Reserve Banks
throw o
n the value of different methods of making their
credit and discount policy effective!-
“ Discount rates,
Open market operations,.
Discretion i n rediscounting,
Credit examination o f member banks.
Credit ratings o f commercial borrowers.
Discussion t o b e led b y Messrs, Strong and Perrin,
What _is the most practicable method o f bringing about timely
and competent consideration o f matters o f credit p o l i c y b y
all of the Federal Reserve Banks and effective action t o
ebtain the results aimed at?
Discussion to be led by Messrs, McDougal and Curtiss,
SSIS
R I E
Following the afternoon session devoted t o the above program,
proposed t o devote a n evening session t o the question -
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Federal Reserve Bank of St. Louis
What does the present business and credit situation indicate
with reference t o the prospective demand for credit and the
need or advisability of any action at the present time by
Federal Reserve Banks with respect t o matters o f credit and
discount policy?
General discussion,
{7.- f s
M E A
Oe e e
October 1 0 -
e e
12, 1 9 2 2
First Day's Session, Tuesday, O c t o b e r 1 0
Joint C o n f e r e n c e w i t h F e d e r a l R e s e r v e B o a r d
and Federal Reserve Agents
Morning i
The meeting was called t o order a t 10:30 o'clock a. m.
Present:
Honorables Platt, Miller, Crissinger, Mitchell and
Hamlin, M e m b e r s
o f t h e Federal Reserve Board;
Messrs. Curtiss, Jay, Austin, Wills, Hardy, McCord,
Heath, Martin, Rich, A s a E. Ramsay, Wm. F. Rameey,
and Perrin, Federal Reserve Agents; a n d
“Governore Morss, Strong, Norris, Fancher, Seay,
Wellborn, y
licDougal, Biggs,
i Young, Bailey
f and Calkins.
Vice Governor Platt adiressed the joint conference, calling attention ( 1 )
to the importance ‘ o f many o f the topics o n the program for discussion, a n d staiing that one o r two additional topics t o b e presented t o the respective conferences
should b e considered,
At 10:50 o'clock a. m. the joint conference adjourned,
separate Governors Session
The meeting was called t o order a t 10:55 o'cleck a. m.
Present:
Governors Morss, Strong, Norris, Fancher, Seay,
Wellborn, McDougal, Bigzs, Young, Bailey and Calkins.
Mr. Harrison, Secretary.
Topic I.A.1 R e p o r t o f Committee o n Centralized Execution o f
Purchases
a n d Sales o f Government Securities
b y
Federal R e s e r v e B a n k s .
The Chairman presented t o the conference t h e report o f the Committee o n
Centralized Execution o f Purchases and Sales o f deaevieent Securities b y Federal
Reserve Banks, b u t inasmuch a s some o f the Governors had not had a n opportunity t o
read it, t h e whole t o p i c o f “Credit Transactions a n d Policies,"
a s well a s con-
sideration o f the minutes o f the October 2, 1922 meeting o f the Committee o n Cen-tralized Execution o f Purchases a n d Sales o f Government Securities b y Federal R e serve B a n k s w a s h e l d o v e r u n t i l t h e n e x t d a y ' s s e s s i o n ,
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Federal Reserve Bank of St. Louis
{
s
e
e paragraphs 3 0 : & 56)
es
Topic II.A.
R e p o r t o f Standine Committee o n Collections
Upon motion o f Governor Fancher,
i t was
“VOTED t h a t the report (pages 18-56 stenographic record) o f the Committee o n Collection should b e approved and that i t is the sense o f the Conference
thet the Standing Committee o n Collections appointed a t the last conference o f
Governors shall have active a n d complete jurisdiction over 211 current collection
matters, inelud ing forms, a n d thet a n y such matters arising should b e referred b y
the Reserve Banks t o such cenmittee f o r disposition, with the understanding thet i t
make a report t o each successive conference o f Governors o f all matters acted u p o n
by it.
I t is the sense o f the Conference, however, that general questions o f
collection policy, a s distinguished from routine questions o f operation, should be
referred t o the committee f o r recommendation t o the next Conference o f Governors
and not for final disposition b y the committee.
Governor Calkins, not having hed opportunity t o read the report, voted
for its adoption with the understanding that h e might, b y correspondence with
the Chairman o f the Committee, discuss possible amendments after h e had had
opportunity to study it. (See also paragraph 50)
Topic II-B.
E x t e n t t o which non-cash collection department
hes beeh developed i n each bank.
Severel o f the Governors discussed the nature o f the services o f the
non-cash collection departments o f their respective banks.
C o v e r n o r McDougal
said that h e had raised this question for discussion with a view t o considering
whether the services o f this department should b e continued i n the light o f the
expense t o each Reserve Bank i n carrying o n its operations.»
I t seemed t o be
the opinion o f individual governors t h a t t h e present services afforded b y this
department should b e continued-
N o ection was asked for, although i t wes felt
by some that c i t y items should n o t b e collected f o r banks i n the same city.
Topic II.C.
R a i s i n g Limit o f No-protest I t e m s f r o m $ 1 0 t o { 2 0
After general discussion o f whether o r not Federal Reserve Banks
Bhould initiate a recommendation o f a uniform limit o n no-protest items, a n d
if so whether that limit should b e 910 o r ($20, upon motion o f Governor Fancher,
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Federal Reserve Bank of St. Louis
VOTED t h a t i t i s the sense o f the conference that there should b e a
unif orm no-pr otest Limit and that the Federal Reserve Banks should agree unif orm=
ly to adopt either the 310 o r 320 limit, whichever i s determined b y the majority
" of the menber banks t o b e preferable t o them, i t being the sense o f the conference
i
4
that the Federal Reserve Banks should adapt their practice i n this regard t o the
Wishes and convenience o f the majority of their member banks.
Tonic IT.D. L i a b i l i t y o f Reserve Banks i n making unqualified
indorsement o n checks received for collection.
(
6
)
Upon motion o f Governor Fancher, i t was
VOTED t h a t this tonic b e referred t o the Collection Committee t o dispose of after correspondence with Governor iicKinney, who had proposed the topic
f or consideration, b u t who was absent from the conference o n account o f illness,
(see also paragraph 49)
Topic II.E. Advice of opening of banks previously closed.
(
7
)
Upon motion o f Governor Young, i t was
VOTED t h a t e a c h Federal Reserve B a n k advise e a c h other Federal Reserve
nae,
b y wire o r letter, w h e n a
member o r nonmember b a n k i n its district, previous-
ly advised as closed, i s reopened.
Topic IT.F. Should Federal Reserve Banks handle collection
(
8
)
items payable i n foreign countries.
After general discussion o f the advisability of
Federal Reserve Banks
handling collection items payable i n foreign
countries, i t was
VOTED (upon motion o f Governor Fancher) that, a s a matter o f general
Policy Federal Reserve Banks should not handle collection
itens payable i n foreign
countries, with such exceptions, however, a s may be
necessary i n special cases such
as Canadian items.
ws
Topic ITI.A. V a u l t reserve o f Federal Reserve Banks and
(
9
)
percentage o f gold coin a n d certificates t o
total,
Governor Morss referred t o the fact that n o w that many o f t h e Federal R e -
serve Banks have, o r soon would have, their o w n vaults, i t would
b e desirable for
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Federal Reserve Bank of St. Louis
ate
them t o hold'a considerabie portion o f their gold reserve i n their o m vaulte and a e
a basis o f diecuseion r e a d t o t h e conference t w o resolutions passed b y the last Soeton-rhiladelphia-Atlanta a n d Richmond G r o u p Conference w h i c h suggested a
serve o f 257, i n coin o r bullion.
vault r e -
A f t e r discussion, u p o n motion o f Governor Mores,
it was
VOTED t h a t i n determining t h e amount o f vault reserve n o definite percent--
ase should b e fixed for each reserve bank, but that each bank should build u p its
available gold supply held i n its owm vaulte, t a k i n into consideration the amount
of ite gold, remoteness from source o f supply o f available circulatins gold, a n d
other relevant factors.
Governor Strong referred t o the fact that at. the present time the several
Federal Reserve Banke had a relatively emall percentage o f their liabilities i n gold
coin a n d bearer certificates,
t h e aggregate f o r the System being only 11.9%, a n d
many o f the banks having less t h a n 5 % ,
Topic ZII.B. Standard of fitness of currency.
(
1
0 )
Many of the Governors expressed the opinion that the test ofthe etandard
of fitness prescribed i n the "Currency Distribution and Payment Policy for Federal
Reserve Banke" program adopted a t the May, 1922 Conference o f Governors, w a s too
etrict a n d that Federal Reserve Banks should revert t o the sort which prevailed i n
the System a s a whole prior t o last I’ay when that test was adopted,
T h e discussion
brought out the fact that several o f the Treasury officials who had made a careful
investigation o f the sort made i n accordance with the test prescribed i n May felt
that i t was t o o strict a n d resulted i n the payment b y Federal Reserve Banks o f a
er standard o f fit notes t h a n those b e i n g paid o u t b y the Treasury itself.
low
Upon
motion o f Governor Seay, i t waz
VOTED t h a t the method o f determining the standard o f f i t n e s s s
a prescribed
in the Currency Distribution and Payment Policy for Federal Reserve Banks appro ved
in May, 1922 b e discontinued a n d that the officials o f the Treasury Department furnish each Federal Reserve B a n k with a
sample package o f notes t o represent t h e lowest
standard t h a t should b e p u t i n eirculation, a n d that t h e monthly teste b y the Treas.
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Federal Reserve Bank of St. Louis
<nue
ury b e discontinued;
w i t h t h e understanding t h a t t h e Chairman would report these
views t o Under Secretary Gilbert withthe request t h a t t h e Treasury Department g i v e
formal confirmation o f o r assent t o the action o f the conference.
Accumulation o f Used b u t F i t C u r r e n c y .
Governor Young discussed the difficulties that h e i s having i n his district
in the accumulation o f used b u t f i t currency, a n d sugzested t h e possibility o f each
of the Federal Reserve Banks agreeing for a given period not t o pay out any new curs
rency, saying that i t was futile for any one Reserve Bank to. attempt such a policy
alone,
I t seemed t o b e the sense o f the conference t h a t this w a s a
ehould b e disposed o f i n eaen district b y a judicious handling
matter which
o f the amount o f new
notes paid out, without a n y agreement b y all Reserve Banks not t o pay o u t any new
currency.
N o action being asked f o r the topic was passed.
Topic LI1.C, Reconsideration o f action o f last conference
(
1
2
)
relative t o absorption o f costs o f all ship-ments o f coin t o a n d f r o m member banks.
Governor Calkins referred t o the fact that the action o f the last confer.
ence, i n voting to absorb the cost o f outgoing shipments o f subsidiary and minor
coin, reculted, i n hie district, i n considerable abuse and unnecessary expenditure
of money b y the Reserve Bank,
H e moved, therefore, that the conference vote t o dis-
continue absorbing t h e c o s t o f such shipments. G o v e r n o r McDougal moved t o continue
to absorb t h e expense o f outgoing shipments o f such coin, b u t t o discontinue absorb--
ing the expense o f incoming shipments.
A f t e r come diecuesion Governor lHeDougal
withdrew his motion a n d asked that t h e subject g o over until t h e next conference.
Governor Calkine expreesed the view that thie wae a matter that should b e definitely
settled a t this time, a n d that i n a n y event, t h e r e should b e uniformity o f practice
throughout t h e System. G o v e r n o r Strong seconded Governor Calkins’
original motion,
but, upon vote, t h e motion was lost, Gevernor Calkins voting i n the affirmative.
(see paragraph 15).
Topic IV.F. P a y m e n t for use of National Bank Examiners’
(
1
3
Reporte.
The Chairman sugzested t h a t a
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Federal Reserve Bank of St. Louis
committee o f two Governors b e appointed t o
)
Bw
meet w i t h a
similar committee o f the Agents t o discuss w i t h the Comptroller o f the
Currency the question o f making payment for copies o f reports o f examination o f national banks,
U p o n motion o f Governor McDougal,
VOTED t h a t t h e Chairman appoint s u c h a
i t was
committee;
whereupon, w i t h tie approval o f the conference, Governors Norris a n d S e a y were d e signated f o r the purpose.
several of the Governors expressed their views a s t o he position the committee should take i n meeting w i t h the Comptroller. ( s e e paragraphs 3 1 and 44)
Addition t o Personnel o f Committee o n Centralized Execution
of Purchases a n d Sales
Reserve Banks,
o f Governvent Securities
(
1
4
)
b y Federal
Upon.motion o f Governor Seay, i t was
VOTED t h a t Governor Fancher b e made a member of: the Committee o n Centralized Execution o f Purchases and Sales o f Government Securities b y Federal Reserve
Banke,
At 1:30 o'clock t h e conference adjourned t o reconvene a t 2:30 o'clock.
First Day's Session, Tuesday, October 1 0
Separate Governors Session
Afternoon
The meeting was calied t o order a t 2:30 o'clock p. m.
Present:
Governors Morse, Strong, Norris, Fancher, Seay,
Wellborn, McDougal, Biggs, Young, B a i l e y a n d Calkins.
Mr. Harrison, Secretary.
Topic III.C. (continued - see paragraph 12)
Reconsideration o f action o f last conference
relative t c a b s o r p t i o n f
o costs o f all shipments
of coin t o a n d f r o m member banks.
Further consideration w a s given t o the question o f whether o r not a
commit.
tee should b e appointed b y the conference t o study not only this particular topic,
but the whole question o f the absorption o f expenses f o r services rendered t o member
banks.
T h e appointment o f such a
committee n o t being sus7ested b y the conference,
however, t h e topic w a s passed without further conecideration, b u t w i t h the under-
standing that all Reserve Banks will conferm uniformly t o the action taken
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Federal Reserve Bank of St. Louis
on this topic a t the last conference.
Topic IV.A, R e p o r t o f Insurance Conmittee
Upon motion o f Governor Norris,
VOTED
(
1
6
)
i t was
t o adopt t h e report (pages 135-138 stenographic record) o f t h e
Committee a n d t o refer t o the Committee f o r study and:recommendation t h e question
of effecting improvements o r economy i n our present method o f insuring shipments o f
currency and securities.
Topic IV.B, Report of Leased Wire Committee.
Upon motion o f Governor McDougal,
(
1
7
)
i t was
VOTED t h a t the report (pages 142-149 stenographic record) o f the Committee b e adopted a n d that t h e recommendations contained i n the report b e approved.
Duplex Wire between New York and Chicago.
(
1
8
)
Governor McDougal referred t o a supplementary report o f the officers o f
the Chicago bank concerning the establishment o f a duplex wire between New York and
Chicago and other changes i n the cireuits, agreed upon after conference with the
officers o f the Arierican Telephone and Telegraph Company, i n order t o increase the
efficiency o f the wire system a s awhole. “ H e reported the volume o f business now
transacted over the various circuits.
N o action was asked for.
Topic IV.C. M e t h o d o f advising direct sending banks o f
other districts o f nonpayment o f cash items.
(
1
9
)
The present practice i s to advise direct~sending banks o f other districts
of the nonpayment o f c a s h items b y sending messages prepaid over commercial wires.
Governor Calkins suggested that such advices to banks located in Federal Reserve
Cities should b e sent over the private wire, S e v e r a l o f the Governors expressed
opposition t o any change i n the present practice o n the ground that there i s ereater
protection i n sending such messages over the: commercial wires than i n effecting
telephone advice o f nonpayment b y the Federal Reserve Bank receiving a message
over the private wires.
without action.
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Federal Reserve Bank of St. Louis
I n view of this general sentiment, t h e topic was passed
Topic IV.D. Telepraphic ~Transfers, W h e t h e r transfers over
( 2 0 )
private wires should b e linited t o transfers o f
bank balances s o that transfers f o r account o f
individuals, firms, corporations, etc., s h o u l d
be effected b y member banks a t o w n expense o v e r
commercial wires.
Upon motion o f Governor Calkins,
i t was
VOTED t h a t this topic b e referred t o a committee t o b e appointed b y the
Chair f o r a thorough study o f the whole subject and for recommendation
t o the next
Governors Conference.
The Chair, thereuvon, appointed t h e Leased Wire Committee t o study
all
phases o f the Situation, including possible Limitations upon
the kind of transfers
to b e made, a s well a s possible charges for transfers.
Telegraphic transfers f o r nonmember clearing banks.
(
2
1
)
After discussion o f t h e above topic, Governor Y o u n g referred
t o the
special c a s e o f a nonmember s t a t e bank, n o t eligible
f o r membership i n the S y stem,
which keeps a
Glearing account e n d w i s h e s t
o make wire transfers t o cover i t s renit-
tances. G o v e r n o r Young moved that the previous action
o f the Leased Wire Comite
tee limiting wire transfers t o member banks b e amended s o
as to permit o f the
transfer o f funds for nonmember clearing banks which maintain
clearing accounts.
This motion was objected to, but after general discussion,
i t was brought out that
the Leased Jire Committee's report (X-3237 -
Feb, 21, 1922) provided that " a s some
of the Federal Keserve Banks are under obligations t o accept
telepraphic transfers
from their nonmember clearing banks, t h e y m a y f o r
t h e present continue t o make
such transfers,"
a)
4 opic
IV-E.
U s e o f test words b y Treasury Department
on telegraphic transfers.
(
2
2
Upon motion o f Governor Calkins, i t was
VOTED t h a t this topic b e referred t o the Leased Wire Committee
with
instructions t o work. out some suitable test words t o b e recommended
for use b y
the Treasury Devartment i n transactions involving telegraphic
transfers for the
Treasurer's a c c o y n t .
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Federal Reserve Bank of St. Louis
)
Popic IV.G. V a r y i n g interpretation o f Action taken a t
Governors Conferences.
(
2
3
)
This topic, which related t o the method o f making charges for certain
wire advices, was disposed o f b y report o f Leased Wire Committee (paragraph 17)
so that n o action w a s asked for.
Topic IV.H. Progress o f ifork o f General Committee o f Twelve
( 2 4 0 ~
on Economy a n d Efficiency.
There w a s considerable general discussion o f the amount o f progress
that
had been made since t h e Committee o f Twelve w a s appeinted
over a
questions o f economy a n d efficieney i n the System a s a whole.
year a g o t o study
I t was mentioned
that while the studies that had beer made b y the Committee had
been helpful,
nevertheless a comparison o f functional expense accounts o f the
several Federal
Reserve Banks o n the present dissimilar bases could not
o f itself accomplish all
that was intended b y the establishment o f the Committee
o f Twelve, a n d that while
these comparative tables have accomplished much i n prompting
study and economies
in the individual banks, nevertheless i t was felt b y some
that the Committee o f
Twelve might also undertake the study o f individual departments
i n the different
banks in order to ascertain which bank has established the
best, most efficient,
or most economical organization and procedure i n each function,
a n d with a view to
Prompting its adoption throughout the system a s a whole s o far as that
might b e
Possible.
Upon riotion o f Governor Calkins, i t was
VOTED t h a t the Conference recommend a n early meeting o f the
Committee o f
Twelve with the Board's committee further t o consider
t h e reports recently rendered.
Topie VI-A. Report o f Committee o n Standardization o f
Accounting Forms,
(
2
5
)
Upon motion i t was
VOTED t h a t the report (paces 212-216 stenographic
record) b e received
-
a n d that the recommendations contained
therein b e adopted.
Governor Young voted i n the negative because
o f the fact that h e had not
had opportunity t o check u p the forms
referred to.
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Federal Reserve Bank of St. Louis
-
1 0
-
ead
Topic Vi... P r o p e r method o f distributing commissions
earned o n investments f o r foreign banks.
There was general discussion
o f ths basis o n which investments for
foreign banks are being handled b y the Federal Reserve Bank o f New York for account
of all Reserve banks, a s well a s the basis o n which the coumissions earned o n thos:
transactions are distributed among the several Reserve Sanks.
U p o n motion o f
Governor Calkins, i t was
VOTED + 9 approve the presert method o f distributing those earnings a s
described i n a letter addressed t o all Reserve 3anks b y Mr. Case, Deputy Governor
f the Federal Reserve Bank o f New York o n June 15, 1922.
Topic Sup. I . P o u c h i n g Mail post offices.
Establishment
o f substation
Governor Norris referred t o the fact that h e is having difficulty i n
negotiating with the Post Office Department for the establishment o f a sub-station
post office a t the Philadelphia Reserve Bank, a n d asked for information from the
other Governors concerning their present method o f handling incoming and outgoing
mail.
S o m e o f the Governors reported progress i n their negotiations with the
Post Office Department a n d , without formal action,
i t was understood that Governor
Strong would s e n d t o Governor Norris copies o f the correspondence between t h e
Federal Reserve B a n k o f N e w York a n d the Postmaster General relative t o t h e estabe
lishment o f the station a t the New York bank.
Tovic Sup. Il. R i s k assumed b y Federal Reserve Sanks i n
(
2
8
)
shipping canceled bonds/notes t o Washington.
After informal preliminary discussion, i t was agreed, o n motion o f
Governor Seay, t h a t this topic should b e held over until Mr. Gilbert appeared before
the conference t o discuss fiscal agency matters.
T h e discussion indiceted, how-
ever, that most o f the Federal Reserve Banks now insure shipments o f canceled
securities t o the Treasury Department, w h i l e t h e Federal Reserve Banks o f N e w York,
Philadelphia, Richmond and San Francisco, pendirg adjustment with the Treasury Department, a r e holding u p shipments.
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Federal Reserve Bank of St. Louis
( s e e paragraph 5 5 )
eehee
Topic Sup, Ill. Sust2zining membership i n American Acceptance
( 2 9 )
Council.
Governor Strong read extracts from a memorandum relative t o the worx of
the American Acceptance Council and its financial program.
I t was brought out in
the discussion that the Council now estimates that its expenses
for next year will
be about 322,000 and that i n order t o meet thie cost i t has planned
t o solicit this
year certain sustaining memberships, a t 3500 per annum, which, together
with the
regular member shivs, o f 53100 per annum, will.be sufficient t o permit
a continuation
of its work for another year.
T h e question presented t o the conference was whether
the Federal Reserve 3anks would be willing to become sustaining
members for this
year if, a s is understood, twenty o r more commercial banks will
d o so.
I t was ine
formally agreed that the matter should be referred to Governor Strong to ascertain
what i s the present practice o f the Reserve 3anks with regard
t o this and similar
matters, and, i f necessary,
sonal correspondence,
t o take i t u p with the Federal Reserve
Soard b y per-
i t being the general view of the conference that
i t is im-
portant t o the best interests o f the Federal
Reserve System t o continue the work
ofthe American Accept ance Couneil,
At 5:45 o'cloek DB. m.- the conference adjourned
t o meet a t 10:00 o'clock
a» m. o n Wednesday, October
li.
Second Day's Session, Wednesday, October 1 1
Governors Separate Session
Morning
The meeting w a s called t o order a t 10:15
o'clock a . m .
Present:
Governors Morss, Strong, Norris, Fancher, Seay,
Wellborn, McDougal, 5iggs, Young, Zailey and
Calkins.
Mr. Harrison, Secretary.
Topic TeAsl. (continued - see paragraph
2)
Report o f Committee o n Centralized Execution
of Purchases a n d Sales o f Government Secur ities
by Federal Reserve sanks.
The Chairman announced that the Committee o n
Centralized Exeeution o f
Purchases and Sales o f Government securities
h a d slightly revised the minutes o f
its meeting o f October 2 , and submitted t o
the conference for its consideration anc
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Federal Reserve Bank of St. Louis
approval a copy o f the minutes a s revised.
T h e Committee, a s recorded i n these
minutes, expressed i t s approval o f t h e action taken b y the Federal Advisory Council
its last meeting relative t o investments b y Federal Reserve Banks f o r t h e pure
pose of making earnings, and recommended to the conference (1) that Governor
Fancher o f the Federal Reserve Bank o f Cleveland b e made a member o f the Committee
(see paragraph 14) and (2) that the Committee's duties be extended so as to provide
for the making of recommendations and suggestions to each Federal Reserve Bank from
time t o time concerning the advisability o f making purchases o r sales o f Government
securities.
Upon motion o f Governor Young, i t was
VOTED t h a t t h e report (pages 248-252 Stenographic record) a n d the recom-
mendations contained i n the minutes (pages 25€+263 stenopraphic record) of: the Committee b e approved.
( s e e also paragraph 56)
Topic IV.F. (continued - see paragraph 13)
(
3
1
)
Payment f o r u s e o f National B a n k Examiners’
Reports.
Governor Norris reported t o the Conference the substance o f the meeting
which t h e joint committee o f Agents a n d Governors h a d h a d with t h e Comptroller
of
the Currency concerning payments for the reports of examination of national banks.
He stated that the Comptroller h a d estimated that his deficit for the
current year
would b e $50,000, o r some $90,000 less than the amount which h e is now receiving
froh Federal Reserve 3anks i n payment f o r t h e reports o f examination
o f national
banks.
G o v e r n o r Norris a l s o s a i d that t h e Committee t o l d the
Comptroller t h a t t h e
present arrangement w a s a
temporary o n e t o meet a n emergericy a n d that i f payments
for reports w e r e t o b e continued t h e y should b e o n some permanent
defensible basis
and not o n t h e present emergency basis.
he would b e willing t o consider a
T h e Comptroller t o l d t h e Committee that
revision o f the present charges a t a
later meet-
ing with the Committee.
Upon motion o f Governor Bailey, i t was
VOTED t h a t the Committee b e authorized t o conclude a n arrangement with
the Comptroller o f the Currency for furnishing reports o f examination o f national
banks to Federal
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Federal Reserve Bank of St. Louis
Reserve Banks o n the best terms Possible, effective from the
present time, subject, however, t o revision a t the next fall Conference o f Governors
and Agents, provided, however, that while the Federal Reserve Banks feel that they
might b e justified i n paying the "cost" o f furnishing such reports, they would not
be justified i n naking a payment simply for the purpose o f meeting a deficit i n the
Operations o f t h e o f fice o f t h e Comptroller
o f t h e Currency.
{ s e e paragraph 44)
Topic 1.4.2. Advisability o f further reduction i n total
investment account.
(
3
2
)
This topic was passed inasmuch 1 s it was understood t o be covered b y
the Report o f the Committee o n Centralized Execution o f Purchases and Sales o f
Government Securities.
Topic T.A.3. Investments for Earnings
(
3
3
)
This topic was passed inasmuch a s it was understood t o be covered b y
the Report o f the Committee o n Centralized Execution o f Purchases and Sales of
Government Securities,
Topic T.A.4. Policy i n relation t o Gold Imports and
(
3
4
)
Money Market.
Governor Strong briefly referred t o the policy o f the Federal Reserve
Bank of New York and the reasons therefor i n selling some of its investments and
in making small payments o f gold t o Government disbursing officers and New York
City banks.
N o action o n this topic was asked for.
Topic-I.A.5. P u r c h a s e o f Exchance. |
Govern tr Calkins e s k e d for a
(
3
5
)
statement o f t h e practice o f t h e
séveral Federal Feserve Banks i n regard t o buying and selling domestic exchange.
It appeared from the discussion that n o Federal Reserve Banks are now buying
domestic exchange, some o f those banks who had been doing s o having discontinued
the practice.
N o action was asked for, although Governor Calkins stated that the
Federal Reserve Bank o f San Francisco will very likely, o n account o f the difference
in time between San Francisco and New York, begin t o give immediate credit o n wire
transfers which are not i n fact consummated until the next day, making a n appropriate charge therefor.
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Federal Reserve Bank of St. Louis
Po
oe
a
Topic I.5. I n t e r p r e t a t i o n
of "Borrower" S e c t i o n 1 3 Federal R e -
( 3 6 )
serve Act limiting amount which Federal heserve Banks
may rediscount f o r a n y o n e bank.
o r inGovernor S e a y raised t h e question whether t h e phrase “signature
be indorsement o f any one borrower" i n Section 1 3 o f the Federal Reserve Act could
presented t o a Federal Reserve
t h e “indorser"™ o n a n obligation
Egp
’ terpreted t o mean that
;
Bank for rediscount might b e the "borrower."
U p o n general discussion i t developed
that seven o f the Federal Reserve Banks are a t present oursuing the practice covered
re~
in the Federal Reserve Board's letter t o t h e Federal Reserve B a n k o f Richmond,
ferred t o b y Governor Seay, that is, they consider the maker the borrower i n all
cases except. where i t appears from the circumstances surrounding the loan that the
h
t bormaker i s an accommodation maker, i n which case the indorser i s c o n s i d e r e de
rower.
F o u r o f the Reserve Banks, however, including the Federal Keserve Bank o f
Richmond, expressed the opinion that either the indorser o r maker might b e the bor~
rower dependent u p o n the circumstances o f e a c h case.
U p o n motion o f Governor Seay,
it was,
VOTED t h a t i t i s the sense o f t h e conference t h a t t h e Federal Reserve
o withhold any formal ruling o n this subject until the
Board should b e r e q u e s t e d t
t study the
counsel o f the several Federal Reserve Banks may have a n o p p o r t u n i t yo
question a n d submit. their views t o the Federal Reserve Board.
Topic 1.C. D i s c o u n t Rates. e
eon
e
This topic w a s passed jnasmuch a s i t i s necessarily included i n the topics
presented o n the Board's program f o r consideration a t the joint conference.
Topic 1.D. R e p o r t o f the General Committee o n Acceptances
(
3
8
)
Upon motion, i t was
VOTED that the report (end of stenographic record) of the General
Committee o n Acceptances should b e received a n d filed.
R e p o r t
o f Committee o n Open Bill Market Conditions a n d Operations. ( 3 9 )
Upon motion,
i t was
VOTED that the report (pages 321-324 of stenographic record) o f the
Committee o n Open Bill Market Conditions a n d Operations b e received a n d f i l e d ,
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Federal Reserve Bank of St. Louis
-15Reimbursement f o r vrork performed 2 s Fiscal Agents o f (
War Finance Corvoration.
40)
The Chairmen reported the fact that the Conference o f Federal Reserve
Agents had referred t o the Governors f o r consideration and action the question
whether o r not certain overhead expenses should b e included with actual expenses
in determining the amount o f reimbursement asked for services rendered e s fiscal
agents o f the War Finance Corporation.
Upon motion o f Governor Seey, i t wes
VOTED t h e t every Federal Reserve Bank performing services f o r the
Wer Finance Corporation should advise e v e r y other Federel Reserve B a n k performing
similar services, just what items are included i n determining the amount for which
reimbursement i s now asked.
“Ypon motion of Governor Bailey, i t ves
VOTED
t o incorporate i n this resolution similar instructions con~
cerning Farm Land Banks.
Topic Sup. IV. B o n d investments by Member Banks. {
41)
This topic, which wes presented t o the conference b y the Atl anta-RichmondPhiladelphia end Boston Group Conference, wes discussed b y Governors Norris and
Seay, members o f that Group Conference, the question being whether i t might b e
desirable o r advisable f o r the Federal Reserve Banks t o attempt t o place a n y control o r restrictions u p o n t h e investments b y member banks i n promiscuous bonds,
other than Government securities. Governor Seay expressed doubt whether i t was
possible o r wise t o attempt a n y such control f r o m t h e point o f view o f the Federal
Reserve Banks, although h e stated that many country member banks i n particular, some
‘of which are borrowing from the Federal Reserve Bank, are investing much too great
a percentage o f their assets i n such bonds.
O t h e r members o f the conference e x -
pressed the opinion that the regulating o r supervisory authority for such operations
of member benks i s now elready well established b y law, a n d that though Federal
Reserve Banks i n dealing with their members could not completely ignore the investment account o f such members, nevertheless they should not attempt t o regulate o r
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Federal Reserve Bank of St. Louis
wih 6s
run t h e details o f their business-
N o action w a s asked fore
Form of Weekly Report of Condition (
42)
The Chairman stated t h a t t h e conference o f Federal Reserve Agents h a d
reierred t o the conference, w i t h their approval, a
memorandum suggesting a
change
in the form of the weekly report s o es t o separate non reserve cash from other
items now included i n that caption, such as “uncollected” i t e m s
Upon motion o f Governor Young, i t was
VOTED t h a t the conference concur i n the suggestion contained i n the
memorandum »
At 1:00 o'clock noon the conference adjourned t o meet a t 2:30 p- me
Second Day's Session, Wednesday, October 1 1
Governors’ Separate Session
Afternoon
The meeting was called t o order a t 2:30 o'clock p - m.
Present:
Governors Morss, Strong, Norris, Fancher, Seay,
Wellborn, McDougal, Biggs, Young, Bailey and Calkins.
Mr. Gilbert, Under Secretary o f the Treasury, during
latter part o f session.
Mr. Harriscn, Secretary.
Federal Reserve Fension Plan. (
43)
Governor Calkins stated that i t was his opinion that one big step i n
the present economy and efficiency program o f the Federel Reserve Banks would b e
to establish a pension plan, since i t would d o much t o maintain the continuity
and efficiency i n the personnel o f the Federal Reserve Banks. A f t e r general discussion, i n which i t was pointed out that i t is probably impossible now to procure
the congressional legislation necessary t o establish any sort o f retro-active
pension plan, upon motion o f Governor Seay, i t wes
VOTED t h a t i t is the sense o f the conference that, i f possible, some
sort o f Federal Reserve pension p l a n should b e inaugurated a n d that t h e question
should b e referred back t o the Committee o n Pensions t o make a further study and
recommendations
a s t o whether
congressional legislation.
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Federal Reserve Bank of St. Louis
o r not s o m e progress might
b e m a d e vrith o r w i t h o u t
em
Topic IV-F'. { c o n t i n u e d = see paragraphs 13 and 31) (
44)
Payment for use o f National Bank Examiners’
Reports.
Governor Norris reported the substance o f the second interview o f the
committee appointed t o discuss with the Comptroller o f the Currency the expense
of procuring reports o f examination o f national banks.
H e stated that t h e com-
mittee had advised the Comptroller thet both the Governors and Agents, i n separate
meetings a n d without consultation, h a d unanimously reached t h e opinion t h a t pay-
ment for reports o f examination o f national banks should b e based not upon a n y
probable o r estimated deficit i n the operation o f the Comptroller's office, but
rather upon the cost o f preparing the reports which the Comptroller was t o furnish t o the Federal Reserve Banks.
H e reported further that the committee h a d
Suggested t o the Comptroller e payment for ell revorts o f examination a t the rate
of ten cents a page, or, for the sake o f convenience, a t the rate o f $3.00 a
report, i t being estimated thet all o f the reports together average approximately
a
h stated that h e
thirty pages. G o v e r n o r Norris reported that the C o m p t r o l i e rd
feit ten cents a page too little, and had suggested fifteer cents e page, o r a
flat rate of $4.50 per report, regardless of the number of pages. T h i s latter
rate was agreed t o b y the committee, i t being understood that all past reports
would b e paid for at the old rate, the new rate t o become effective a t once,
subject t o review a t semi-annual conferences o f Governorss G o v e r n o r Norris a l s o
reported that the Comptroller o f the Currency stated that h e had no objection t o
the copies o f the reports o f examinetion o f benks located i n branch territory
being furnished t o the managers o f the respective branches, provided thet they
were handied b y such manegers i n the proper manner, that i s i n the same wey es eat
the parent banke (See paragraph 66a Secretary's minutes of May, 1922 Conference
of Governors)
Upon motion o f Governor Young, i t was
VOTED t h a t t h e action o f the committee b e ratified, w i t h t h e understanding t h e t Governor Norris would make a
for the recorde
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Federal Reserve Bank of St. Louis
formal written report o f the agreement
Topic V.A. Payment of Savings Stamps and Certificates
due January 1, 1923.
There was preliminary discussion o f this topic pending Mr. Gilbert's
presence t
a the conference. Governor Morss reported his views, pointing out the
necessity of making some arrangements t o meet large payments of savings stamps and
certificates due January I, 1923.. Governor Strong referred to the great number o f
certificates that will probably b e presented for payment i n New York City alone.
The topic w a s passed until Mr. Gilbert s h o u l d join t h e conference.
( s e e paragraph
52)
Topic V.3. Allotments o n Subscriptions t o New Issues o f
Government Securities t o banks and others,
(
4
6
)
For the purpose o f discussion, Governor Young moved that the Treasury
be requested n o t t o make allotments t o Reserve Banks until t h e subscriptions a r e
closed and the total amount known, and then to make allotments o n the basis of the
total subscriptions received by each Reserve Sank o n an exact percentage basis, i n
order that the Federal Reserve Banks may in turn make allotments o n a sliding scale,
alletting the smaller subscriptions i n full; o r o n some other determined basis after
subscriptions are closed.
in discussing this motion, several o f the Governors expressed the opinion
that i f adopted i t might induce padding o f subscriptions,
been largely overcome i n many o f the districts.
a n abuse which now has
I t seemed t o be the general opinion
that the present plan o f allotment o n some basis o f the percentage o f the bank's
rescuntes i s the most satisfactory a n d the least apt t o cause padding o f subscrip-
tions. whereupon, Governor Young withdrew his motion, and Governor Strong withdrew
the topic from the program.
ca
Topic V.C. P e r m a n e n t reeords o f source o f a l l Government
There w a s informal discussion b y eaeh o f t h e G o v e r n o r s f
o the question
(1) o f the practice o f the Federal Reserve Banks i n keeping records o f the source
of all Government securities, a n d (2) o f the desirability o f keeping those records-
All of the banks do at present keep such records, but in varying degrees of detail.
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Federal Reserve Bank of St. Louis
=]
it was the informal opinion o f the majority o f the Gevernors present that the
Federal Reserve Banks should b e relieved o f the responsibility o f keeping such
records» I t was understood that the topic would be discussed with Mr. Gilbert.
(see paragraph 53)
Topie V.De P a y m e n t o n presentation of all matured Victory
(
4
8
)
coupons regardless o f whether t h e notes f r o m which
detached have been p a i d o r not.
After a very brief discussion, this topic was left over for consideration
with Mr- Gilbert. ( s e e paragraph 54)
Topic I1-D. (continued - see paragraph 6) (
49)
Liability o f Reserve benks i n making unqualified
indorsement o n checks received f o r collection
The Secretary read a telegram from Governor McKinney e e the subject o f
unqualified indorsementse U p o n the suggestion of the Chairman, the telegram
was referred t o the Standing Committee o n Collections, t o which this topic had
previously been referred.
Topic II-A- (continued =~ see paragraph 3)
Report of Standing Committee o n Collections (
50)
Governor S e a y referred t o the importance o f h a ving a l l Federal Reserve
Banks conform t o the recommendations made b y the Collection Committee i n its
report, stating, however, that, a s agreed b y the conference, each Governor might
discuss with the committee the prepriety o f meking slight verbal changes i n the
report.
Par Collection System
(
5
1
)
There was a n informal discussion o f certain problems incident t o the
o p e r a t i o nf
o the collection systems
Sg veenet Caikine briefly described the results o f the Brookings State
Bank ease, stating that the Federal Reserve Bank hed won its case i n all particulars
Governor Young asked what would be the practice of the other Federal
Reserve Banks i n the case o f a nonmember state bank located i n a city where there
is n o other bank which refused t o remit a t pare F i v e o f the Governors present
-gtakhed that they thought i t would b e proper t o take such a bank off the par list,
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Federal Reserve Bank of St. Louis
OQ =
&
w h i l e the other five expressed i t t o b e their opinion that they would send out a n
>
agent o f effect collections o n such a bank unless t h a t might b e contrary t o t h e
wishes o f counsel i n pending collection cases.
Atthis point Mr. Gilbert joined the meeting.
Topic V.A. (continued - see paragraph 45)
(
5
2
)
Payment o f Savings Stamps and Certificates
due January 1 , 1923.
Mr. Gilbert stated that the Treasury Department i s now working o n a plan
for the payment o f savings stamps and certificates due J a n u a r y ,
1 1923, and that he
would endeavor t o have a preliminary copy of: that plan sent t o each Federal Reserve
Bank o n o r about October 1 9 i n order t h a t t h e y might m a k e t h e necessary arrangements
for carrying out the suggestions the Treasury might make.
H e said further that h e
considered i t advisable t o have Federal Reserve Sanks a n d Sranches m a k e payments o f
savings stamps a n d certificates i n the same manner t h a t t h e y n o w make payments o f
¢oupons o n matured bonds, notes and certificates, W h e n the question of the cost
of establishing branch offices, o r making other arrangements, t o make payments o f
these certificates was raised, Mr. Gilbert stated that the Treasury would b e willing
to listen t o reasonable claims f o r expenses.
Topic V.C. (continued - see paragraph 47)
Permanent records o f source o f all Government
Securities.
After a
(
5
3
)
short discussion o f this subject, M r . Gilbert s a i d that h e would
be glad t o have all o f the Federal Reserve Banks look into the question o f the exe
pense involved i n maintaining permanent records o f t h e sources o f a l l Government
securities, a n d advise him of the results o f their investigations.
I t was infor-
mally understood that that would be done.
Topic V.D. (continued - see paragraph 48)
Payment o n presentation o f a l l matured Wisters
coupons regardless o f whether t h e notes from
which detached have b e e n p a i d o r not.
(
5
4
Mr. Gilbert explained that t h e present instructions o f the Treasury D e -
partment regarding the payment o f matured Victory coujsons, regardless o f whether
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Federal Reserve Bank of St. Louis
)
- 21or not t h e notes f r o m which detached have been paid, conform t o the long-standing
practice o f the Treasury Department a n d that unless i t developed,
the srraller operations i n the 2
a s a result o f
3/4 Victory Coupons o n December 1 5 , that t h e plan
was not workable, h e would prefer t o continue it.
Topic Sun. Il. (continued - see paragraph 28)
Risk assumed b y Federal Reserve Banks i n
shipping canceled bonds/notes t o Washington.
Mr. Gilbert reported that h e had had frequent t a l k s with the Comptroller
General with regard t o a ruling concerning the risk involved b y Federal Reserve
Banks i n shipping cancelled bonds a n d notes t o Washington,
receive a n early n e w ruling f r o m hin.
a n d that h e expected t o
U n d e r t h e vresent ruling o s Treasurer w i l l
i t was
pass credit only i f and when the actual securities are received b y him.
o f the current ruling
sugrested that i t might b e possible t o avoid the difficulties
to
by cutting i n half bonds a n d notes that h a d been cancelled prior t o shipment
Washington, thus minimizing the risk o f loss,
M r . Gilbert thought that this might
be done i f i t were ultimately found to b e necessary, but suggested that n o action
be taken until after the Comptroller General had made his ruling.
I t was infor-
been
mally understood that n o action shall b e taken until after such a ruling has
received.
(
Topic I.A.I, (continued - see paragraphs 2 and 30)
Execution
Centralized
o
n
Report o f Committee
5
6
)
of Purchases a n d Sales o f Government Securities
by Federal Reserve Banks.
o f the ComThe Chairnan briefly outlined t o Mr. Gilbert the policies
o f Government Securities b y
mittee o n Centralized Execution o f Purchases and Sales
taken b y the cormittee a t its
Federal Reserve Banks, a n d advised h i m o f t h e action
m a d e a t that time.
meeting o n October 2 , together w i t h t h e recommendations
the conference
After further informal discussion, a t 5:40 o'clock p. m12, when they were t o g o into
adjourned until 10:00 o'clock a. m. Thursday, October
Reserve Agents t o disjoint ecorference with the Federal Reserve Board and Federal
Credit Policy.
cuss t h e Board's program o n Federal Reserve
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Federal Reserve Bank of St. Louis
@FedFRASER