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or in t • .111 Li, ano, a * The reading of the minutes of the proced1n motion, dispensed with. lovcrnor Harding stated that i- was to considerthe luestion of deposit reiationB b 1 tw a convatInn 'le object of the me lie banks and member banks. th retary of the tit had had 4. asu y, ho de- :21 red that the "'ederl reserve banks shoald arrange some :or r 1(ipositinL; : r, not immediatc. or 7.„.rdia Lqble, 1-roceeds of lovcrnment withdra , vilth member bans. 7.(:„.2 1 tie nd had n that this was not pos- ted that , rediscount plan be adopted member ik.41174.s. would 1.)• would contin- • Govern- sp 1 te and old the funds as the proceeds of redis- counts obt%ined from t'icir Federal reserve banks. The Secretary of the "reasiry had indicated that in the event of the adoption of such a plan it might be necessary to charge a rate of interest upon public moneys in the hJnds Governor Harding thought this of Federal reserve banks. would be undesirable, and the outcome of the conversation was a re,luest from the ;ecretary of the Treasury that some plan be worked out for making the deposits, in order to keep the funds in the banks which had subscribed them. .arburg suggested at the proper time the use of member 1T.J.nk collateml notes protected by the new Gov- ernment securities, and with 1 special low rate of interest. By discounting these notes, the reserve banks could enable the member banks to keep control of the funds they had contributed. Non-member banks could ob- tain accommodation by passing their notes through a member bunk. Mr. sum•ested that Federal reserve b,nks. acting in their capacity as fiscal agents for the Government, mi,:ht m..lke deposits with member banks, thus eliminating the rediscount plan. Yr. i11er believed a 1 1 could be made effective. to thtsuseste qcneral discussion :,11d, on motion, it WE; voted that the Executive Committee be req.uested to preFirc' for use the proper time L. rczalation covering a special temporary type of advance on parer berin:g the endorscrlent of member banks and protected by lovernMent bonds, such paper to be Lubject to a lo':; rate of dicount to be known as the "Federal loan rate," the regulation to be reported back to the Bo hen prepared * , 1 . 2.50 p.. the F,oard adjourned. On motion at 1 : ?ecrctar7
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