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391 Upon call of the Vice Governor, a special meeting of the Federal Reserve Board was held in the office of the Federal Reserve Board on Friday, April 19, 1929 at 4:30 p.m. PRESENT: Vice Governor Platt Kr. Hamlin Mr. James Mr. Cunningham Mr. Pole Mr. Noell, Asst. Secretary Mr. McClelland, Asst. Secretary The Assistant Secretary presented the following resolution unanimously 4(lopted by the Federal Advisory Council, and submitted following the meeting "the Council with the Board this morning: "On February 15, 1929, the Federal Advisory Council adopted the following resolution: , 'The Council believes that every effort should be made to correct the present situation in the speculative markets before resorting to an advance in rates.' The Council in reviewing present conditions finds that in Spite of the cooperation of member banks the measures so far adopted have not been effective in correcting the present situation of the money market. The Council, therefore, recommends that the Federal Reserve Board permit the Federal reserve banks to raise their rediscount rates immediately and maintain a rate consistent with the cost of commercial credit." Re also presented a telegram dated April 19th from the Chairman of the Federal Reserve Bank of Chicago, advising that the executive committee cer the bank, under adthority of the board of directors, today voted to estabi ish a rediscount rate of E)'/ on all classes of paper of all maturities, effective the first business day following that on which approved by the Peatip, 41 Reserve Board; the action of the committee, however, to be auto' ) :39' -2_ 4/19/29 rustically rescinded in case the Board does not approve before the close of business on April 25th. After a detailed discussion, 2,1r. Hamlin moved"that the Federal Aeserve Bank of Chicago be advised that the Federal deserve Board has received the advice that the executive committee of that bank has established a rediscount rate of 6,, and that the Board is taking the matter under review and during the interim has determined the rate of the bank to be 5p." Mr. Hamlin's motion, being put by the Chair, was carried, Mr. Platt voting "no". Further discussion then ensued with respect to the resolution submitted by the Federal Advisory Council. Mr. James moved that the Board request the FederP1 Advisory Council to explain just what is meant by "correcting the present situation of the money market" as used in the resolution submitted to the Board today, in order that the Board before acting on the resolution may be fully advised, and its records disclose just what objective the Jouncil had in mind in recommending "that - ederal Aeserve the Federal Reserve Board permit the F banks to raise their rediscount rates immediately and maintain a rate consistent with the cost of commercial credit." Mr. James' motion, being put by the Chair, was carried, Mr. Platt voting "no". Bank Telegram dated April 18th from the Chairman of the Federal lieserve Of San Francisco, advising that the board of directors at a meeting on that 'late made no change in the bank's existing schedule of rates of discount and PqrChase. Noted with approval, Mr. Platt voting _teserve Bank Letter dated April 18th from the Secretary of the Federal at its meeting °I 'law York, confirming advice that the board of directors t)93 -3- 04 that date made no change in the bank's existing schedule of buying rates alid quoting the following resolution adopted by the directors with respect to the discount rate of the bank: "VOTED subject to review and determination of the Federal Reserve Board, to establish a rate of six per cent. for all rediscounts and advances, effective from the opening of business April 19, 1929 and until further notice and superseding the existing rate but with the understanding that this action of the board of directors of this bank is predicated upon approval or disapproval by the Federal Reserve Board today." Noted. TS OF STANDING COMMITTEES: Dated April 18th, 19th, Recommending changes in stock at Federal Reserve Banks as set forth in the Auxiliary Minute Book of this date. Recommendations approved. The meeting adjourned at 5:20 p.m. Assistant Secretary. A PProved: Vice Governor.
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