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." } i GCVERNORS' CONFERENCE, Ccotober 14, 1926, First Day's Session 7 Special topics susrested b y Governor Harding, WL1l i t b e a d v i s a b l e o r p r a c t i c a l n e x t year, or in the near future, t o establish i n each district a2uniform rate o n all classes o f paper except ; b a n k e r s ! ’ acceptances, doing away with any diffore NAH e n t i a l o n sovermment secured paper? Moved by Governor Calkins and unanimously carried that i t will b e advisable a n d practical i n the hear future to establish i n each district a wniform rate o n ali “classes o f paper except bankers! acceptances d o i n g away https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis with a n y differential o n Government secured paper except possibly Treasury certificates, 2e S h o u l d t h e r e b o a limit f i x e d i n advance on interbank borrowing? ? On motion o f Governor Case, unanimously carried, the Conference answered this question i n the negativo. Se S h o u l d t h e r e b e a discount r a t e ? uniform interdistrict On motion o f Governor Fancher, ywnanimously carried, the Gonference answered this question i n the affirmative, 4, S h a l l t h e borrowine Federal reserve bank: be required t o fix a rate t o its customers t o meet t h e r a t e o f t h o F e d e r a l r e s e r v e b a n k from w h i c h i t borrows? https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis it was moved by Governor Seay, seconded b y Governor Van Zandt, a n d unanimously carried, that i t is t h o s e n s e o f this C o n f e r e n c e t h a t t o t a k e s u c h action would introduce a new factor i n t o t h e fixing of a discount rate and might involve, under certain circumstances, a change o f rate o n the part o f the rediscounting bank which would not b e justified b y fundamental conditions i n the district, a n d therefore such action would b e injudic ious, De S h o u l d there b e a theoretical limit o n “yp vr i s s u e o f Federal reserve notes t o m e m b e r banks, The Conference v o t e d that t h i s question b e answered i n the nerative, https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis a s e GOVERNORS! CONFERENCE, October 14, 1920, First Day's Session. Regular Program. neene me te UNFINISHED BUSINESS. Check C l e a r i n g a n d Collection. Direct routing o f collection items b y member , banks i n one Federal reserve district t o member \\"/ banks i n another Federal reserve district, for ‘ ” wire transfor o f proceeds t o sending bank's Federal reserve bank, The Conference received committoo report; i t was J resolved t o concur i n the committee report w i t h t h e amend-~ . ment that t h e Federal reserve banks exclude acceptance of telegraphic transfers f r o m all except member a n d non-member clearing banks, The propriety o f Federal reserve banks sending collection items t o member a n d nonemember banks with instructions t o remizt t o the nearost Foderal roserve b a n k f o r the credit o f the send- ing Federal reserve bank. Upon motion o f Governor Van Zandt, duly seconded and unanimously carried, the committee report was con~ curred in, with the amendment that the last five lines on pago 4, last paragraph, beginning "In such caso”, Shall b e eliminated, ithe Curroncy a n d Circulation, In view o f prosent insufficient supplies o f n e w currency, i s i t desirable that the Federal reserve banks a n d branches adopt t h e uniform policy o f paying o u t n e w a n d redeeming unfit currency? There w a s a conferenco o n this topic w i t h Messrs, ¥ Gilbert, Broughton a n d Emerson, ® I t was moved, d u l y se- | * https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis \ Conded and unanimously carried, that inasmich a s the Treasury Department w a s unable t o furnish adequate currency, i t is the sense o f this meeting that there should b e impressed u p o n the Treasury Department t h e necessity o f taking proper steps t o furnish a sufficient volume o f Federal reserve notes, a n d that the Federal Reserve Board b e requested t o take u p with t h e Secre-~ tary o f tho Treasury t h e question o f providing t h e necessary notes through contract w i t h private concerns, The Conference deemed this matter o f paramount impors tance, a n d a committee, composcd o f Governors Norris a n d Calkins, w a s appointed t o draw u p a communication trangmitting t h e above resolution t o the Foderal Reserve Board, (Letter o f transmittal i s attached hereto,) https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis won Redemption o f National B a n k notes a n d correction of total Foderal reserve notos outstanding, No further report, Operation Pension fund, Committee appointed t o handle this matter reported progress, Personnel a n d Welfare, Committees n o t ready t o report. Q u e s t i o n passed awaiting final report, A Poll o f the Conference indi- cates that a l l the Federal roserve banks a r e giving attention t o this matter and that much progress hag been already made, Discount T r a n s a c t i o n s Allotment o f acceptanco purchases a m o n g all Federal roserve banks, Stabilization o f the open bill market b y the System as a whole and a n equitable basis for making such support effective, S h a e : ie i, t submittedr by committee o consisting p S of Governor W A f Fancher, Gowernor Moras and Mr, Kenzol, A f t e r considera-} ahn discussion tending t o clarify certain words a n d tend-« ing t o make clear t h e position o f certain o f the Gover nors o n the subject, i t was moved and unanimously https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis or carriod that the Conference adopt the report, with thanks t o tho committee, a n d that said committee b e appointed a s a permanent committee t o deal with the matter o f rates a n d t h e interdistrict support o f a n open market, Accounting. Standardization bank forms, o f inter-Federal r e s e r v e Subject passed t o await final repobt o f committees, Treasury Relations, The report o f the committec w a s concurred i n sub-~ ject t o further investigation o f a committee composed of Governors Fancher, Seay and Morss,. At this point Mr. Martin, representing t h e Conforence of Foderal neserve Agents, called t o ascertain what ace tion had been taken upon the recommendation o f the Federal Reserve Board that tho twelve Federal roserve banks be divided into four groups for purposes o f conference and c l o s e r r o l a t i o n b e t w e e n t h e b a n k s a n the rospoctive Broups.» It was moved b y Governor Case, duly soconded and https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ontp u unanimously carried, t h a t this Conference adopt t h e recommendation o f the Federal Reserve Board o n this matter and thus conour i n the action taken b y the Conferenco o f Chairmen, NEW BUSINESS, Operation 1, E f f i c i e n c y of° the personnol o f the several F e d e r a l r e s e r v e b a n k s , A call o f the roll indicated that a l l Federal rogerve banks a r e giving attention t o efficiency o f personnel. I t was moved b y Governor Caso, duly second-~ od and unanimously carried, that the question be roferred for further s t u d y a n d final recommendation t o the four groups o f banks. &, A d v i s a b i l i t y o f providing a method, a "Clearing Houso", s o to speak, for the exchange o f details concerning methods o r de-~ vicos which a n y Reserve b a n k has found offi-~ Client i n operation, Upon motion o f Govepnor Calkins, dulf seconded and unanimously carried, i t was the sense of this meeting that this topic should b e referred t o a conferenco o f the operating officials o f the twelve banks t o b o callod in the near future. Secretary requested t o follow u p https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Q matter a n d call conforence, u e i f approved b y the Foderal Reserve Board, Discount T r a n s a c t i o n s . Uniformity i n the application o f the rules and regulations a s t o the eligibility o f paper. Upon motion o f Governor Case, seconded b y Governor Young and unanimously carried, i t was resolved that tho Gwernor o f each bank b e requested t o appoint a conmmittes to pass o n the eligibility of paper, and in important cases wherein such action i s taken, that all other Federal roserve banks b e advised, 4, S h o u l d o r should not Federal roserve banks b e freo t o sell t o member banks or i n the open markot, bankers! accepteances h e l d i n their portfolios? Question disposed o f i n the action taken upon tho roport o f acceptance committeo, t h e principle boing os~« tablished that Federal reserve banks havo t h e right t o so disposo o f bankers! acceptances held i n thoir porte folios, b u t some o f the Governors strongly opposod such disposal a s a matter o f policy. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis wn w e Cire lation The imposition o f a tax o r Charge on Fedorai roserve notos uncovered b y gold, Moved a n d duly seconded a n a unanimously carried that t h e imposition o f a tax would b e unwise, Check C l e a r i n g a n d Collection, 6, C o l l e c t i n g States, o n doubtful b a n k s i n par Moved b y Governor Calkins, duly seconded and unanimously carried, t h a t this i s a matter which should b e handled b y the individual Federal roserve bank for tho present, Ses G o v e r n o r Young interjected a topic, dig~ cussed at the last Conference, regarding the ccircuitous: routing o f checks, It was moved b y Governor Young that the Governors request tho Federal Reserve h a h a t o reconsider the Board's letter No, X#1944, dated April 7, 1920, relat-~ ing t o the cireutitous routing o f checks a n d i f consis~ tent t o tssuo a ruling i n accordance with tho rocommendations o f t h e l a s t Conferenco, Motion carried, Chiceggo voting no, Adjournment a t 6,10 p.m, https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 3, a o e w e O m e . s GOVERNORS! CONFERENCE, Oct. 15,1920, S ~ e e ‘ t a c oyn tSession. yd aD Chock Clearingd n a Collection (Cont'd.) Competition with member banks i n collections on individuals i n Foderal reservo a n d branch citios, No. Action, Governor Wellborn asking t o b e recorded as being opposed t o the policy o f making these collections and thinks A c t should b e amended o r a ruling made covere ing the point, 8, E x c h a n g e o f letters between Federal reserve banks covering endorsement o n items sent direct t o other Federal roserve banks bymember banks. Governor Fancher moved that this matter b e referred to the Federal Reserve B o a r d with request t h a t counsel f o r the Board prepare a letter o r rogulation covering these endorsements t o be exchanged b y the twelve benks. Motion duly seconded a n d carried, Treasury R e l a t i o n s 9. Transfer o f sub-treasury functions, Previously disposed of, https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Accounting 10, A d v i s a b i l i t y o f standradizing methods o f auciting a n d acccunting, ineluding real estate ACCOURU SEs a D i s p o s e d o f under topic No, 2 , Inter-Federal Reserve Bank Transactions li, T h e devising o f a method t o avoid present frequent holding o p e n o f b o o k s : n i connoc-' tion with interbank rediscount operations, 12, A bettor method o f prepayment b y Fodoral reserve banks o f paper under rediscount by other Foderal reserve banks, During discussion o f this topic a recess w a s taken for t h e purpose o f entering joint Conference w i t h the Board and Federal Reserve Agents, Conference reassemblind at 2 , 5 0 a t conclusion o f joint conferenco, Governor Fancher moved, covering topics 1 1 and 1 2 that i t i s the sense o f the meeting: 1. T h a t rediscounts m a d e b y one Federal reservo bank f o r another Fedoral.roserve b a n k b o made a s o f the d a y when t h o request i s mado , axcept o n Friday w h e n the reserve position o f cach bank i s made public, https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 188 That cach Federal reserve bank redis~ counting with another Federal roserve bank prepare and forward promptly the schedule o f papor i t has been rediscount~ ing S e s That requests f o r anticipation o f paper under rediscount b e combined i n one wiro each day and that such transaction b o effected u p o n tho d a y o f receipt o f t h e requost, i f roeeived before the close o f business; i f not u p o n tho following day, Motion duly seconded a n d carried, ; Governor V a n Zandt moved that this r e m lution b o promptly transmitted t o the Federal Roserve Board, with request that t h e substanco thereof b e taken into considor- ation i n the instructions t o be issued covering tho matter, such instructions a s the Board may see fit t o issue, Motion duly seconded and carried, Genoral, “13. T h e advisability o f meeting criticism o f the Federal reserve system and tho method (if any) to b e pursued, Passed w i t h o u t a c t i o n , https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 14, A d v i s a b i l i t y o f placing club qualifi-~ cations o f Federal reserve banks o n quar= terly basis. No a c t L O n « 15, P o l i c y o f furnishing a n d suggesting Federal roserve system advertisements to member banks, Passod w i t h o u t a c t i o n , Governor Young referred t o sub-section M of Section 1 1 o f the Federal reserve Act, stating that i t expired b y limitation December O49 1920, and raising the question a s t o whether t h e Board should b e request- ed to seek amendment t o the law, No action, Upon motion duly seconded t h e Conference a d ~ Jjourned ? a t 4 o'clock e9M e , GZOinz into joint Session 3 with t h e F e d e r a l R e s e r v e B o a r d a n d C h a i r m e n o f the Foderal Reserve Banks, a t 4.30 o'clock Pem. o f the same day, https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis -_ ‘ ‘ F i ow] A on e a6 a G e e d ¢ e A o s , B s e (Letter ‘accompanying resalutinn-on subject ofcurrency,etc,) To the Reserve Board, Gentlemon: it was the feeling o f the Governors o f the Federal reserve banks assembled i n somi-annual e m f e r e n c e t h a t t h o Subject o f the supply o f new currency w a s one o f the most important engasing their s p s s N o t o n l y has there b e e n for gomc time a n inadequacy o f supply, but the quality o f notes delivered recently has been such that thoir life i s much shorter than was formerly the casc, A s a rosult o f this condition there has b e e n widespread complaint a s t o the unsuitable character o f the curyrency i n circulation, Even m o r e s e r i o u s i s the lack o f a roservo s u p p l y available t o meet emergencies which may readily b e antici~ pated a n d are certain t o occur, T h i s creates a of actual and positive danger, A carefully considering this mattor, presentatives condition conmmitteoc which has beon i n cooperation with r e ~ o f the Treasury Department, reports t o u s that while there should b e 1,200,000,000 pieces engraved each year, t h e deliveries t h i s year have b e e n running a t the rato o f 638,000,000 pieces and the maximum output o f the Bureau o f Engraving & Printing with its presgont plant would b e about 900,000,000 pioces, T h e Conferenco ‘has thorefore adopted tho res lution enclosed herewith, a n d has directed that this supplemental statement b e forwarded to your Board, https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis
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