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957 a meeting of the Federal :leserve Board held in the office of the Board on Wednesday, December 17, 1919, at 11 PLIZITT; The Chairman The Governor Mr. Strauss Mr. Hamlin Mr. Moehlenpah . Mr. Chapman, Secretary. By unanimous consent the reading of the minutes of meetint, of the Board held December 16th vas deferred until the next meeting of the Board. The Governor reported rediscount tra,-saction, pursuant to authority heretofore vested in him; member bank promissory notes secured by Government obligations, rate 4-1 as follows: Date Dec.13th Bank Rediscounting Philadelphia With Amount Chicago .4,500,000 Maturities 11-15 days Uoted. The Governor reported the reserve positions of the several Federal Reserve banks as at close of business December 15th, and the status of rediscounts between Federal Reserve banks as of the same date. The Governor reported the purchase of special 2,;: certificates of indebtedness of the United States for deposit with the Comptroller of the Currency as collateral for Federal • Reserve bank notes, as follows: For Federal Reserve bank of: flew lork, Date Amount Dec.lbth ,1200,000 Approved. The Governor read a letter addressed to him under date of December 16th by the Secretary of tne Treasury, calling attention to the large reduction of loans by Federal Reserve banks on paper secured by Government obligations, and the large increase of purchases by the Federal Reserve banks in of acceptances in the open market, and suggesting that his opinion this condition was one that should be looked into by the Federal Reserve Board. Memorandum by the Fiscal Agent dated December 16th, d in the recommending that Federal Reserve banks be assesse sum of ;525,000 to meet the estimated expenses of the Federal Reserve board for the period January 1 to June 30, 1920. On motion duly seconded, it was ordered that the following minute be entered. Whereas, under Section 10 of the act approved December 23, 1913, and known as the Federal Reserve Act, the Federal Reserve Board is empowered to levy semi-annually upon the Federal lieserve Banks in proportion to their capital stock and surplus an assessment sufficient to pay its estimated expenses, including the salaries of its members, assistants, attorneys, experts, and employees for the half year succeeding the levying of such assessment,together with any deficit carried forward from the preceding half year; and Whereas, it appears from estimates submitted and considered that it is necessary that a fund equal to 9E-19 -3twenty five hundredths of one percent (.0025) of the total paid-in capital stock and surplus of the Federal Reaerve banks be created for the purpose hereinbefore described, exclusive of the cost of engraving and printing of federal Reserve notes; ;ow, therefore, Be it resolved, That pursuant to the authority vested in it by law, the federal Reserve Board hereby levies an assessment upon the several federal Reserve Banks of an amouunt equal to twenty five hundredths of one percent (.W25) of the total paid-in capital stock and surplus of such banks, and the fiscal Asent of the Board is hereby authorized to collect from said banks such assessment and execute, in the name of the Board such assessment will be colreceipts for payments made one-half each; the first of lected in two installments 1, 192y, and the second January installment to be paid on 1920. half on Larch 1, On motion duly soconded, it was voted that General Uounsel be instructed to advise the Board whether or not it lies within the power of the Board to authorize federal Reserve banks to set up a reserve out of earnings of the. current six months against assessments made by the Federal Reserve Board to meet its expenses for the succeeding six months. etter dated December 5th from the Chairman, federal Reserve Bank of Philadelphia, requesting authority to declare a dividend at the rate of six percent per annum, payable on December 31, 1J19, to all stockholders of that Bank as shown by the books on that date for the Bid: month period July 1st to December 31, hilv. Approved. 960 -4Letter dated December 5th. from Assistant Federal Reserve Agent 7evin of the i.'ederal Reserve Bank of Cleveland, submitting resolution declaring a dividend at the rate of six percent per annum, payable on December 31, 1919, to all stockholders of that Bank as shown by the books on that date for the six month period July 1st to December 31, 1919. Addroved. Letter dated December 5th from Secretary McLallen of the Feder&l Reserve Bank of Chico, submittinl!; resolution declarin 4 dividend at the rate of six percent der annum, payable on December 27, 1(J19, to all stockholders of that Bank as shown by the books on that date for the period from July 1st to December 31, 1919. Approved. Letter dated December 8th from the Chairman, Federal Reserve Bank of Chicago, with respect to the Board's action in limiting the amount thich might be charged to current expenses by that Bunk on December 31st against the value of buildings on lot recently acquired by that Bank. On motion duly seconded, it was voted that the Board reconsider its action in limiting to 4500,(JOU the amount which might be charged to current expenses by that Bank on December 31st against the value of buildings on the lot at the corner of LaZalle street and Jackson Boulevard recently acquired by that Bank. r-4 -5(At this point the Chairman and mr. '7illiams joined the meeting). The Chairman read to the meeting, report of Mr. aoxton dated December 12th of the result of referendum submitted to member banks in Oklahoma as to their choice between Oklahoma City and Tulsa as the location of the branch of the Federal Reserve Bank of Kansas City, proposed to be established in the State of Oklahoma. Mr. Yoehlenpah thereupon made a statement to the meeting of the observations made by him on his recent trip to Oklahoma City and Tulsa. After considerable discussion, on motion duly seconded, it was voted that the Federal Reserve Bank of Kansas City be authorized to establish at Oklahoma City a branch having powers similar to those pertaining to the Buffalo oranch of the Federal Reserve Bank of Bow York, Mr. Strauss voting "1o. (Mr. Miller withdrew from the meeting at 12-58 P.M. before a vote was taken). Voted further, that the Executive Committee be authorized to prescribe the details of approval of the proposed branch. voted further, that no announcement be made of the Board's action unless and until the recommendation of the .tIxecutive Committee as to the powers to be exercised by the branch shall be submitted to and approved by the Board. (At this point a recess was taken until 3 P.I.:. today). After recess: 'jr-12 -6PRESEKT: The Mr. Mr. Mr. Mr. Governor Strauss Miller Moehlenpah Cnapman, Secretary. The Governor referred to the action of the Board at its session before recess in voting to reconsider the question of the charge off to be made by the Federal Reserve Bank of Chicago against the value of buildings on real estate acquired by it. Voted, that the rederal Reserve Bank of Chicago be authorized to charge off as of December 31, 1919, the sum of $820,000 against the value of buildings on the lot recently acquired by the Bank, located at the corner of LaSalle Street and Jackson Boulevard. Telegram dated December 16th from the Chairman, Federal Reserve Bank of San Francisco, requesting authority to reduce the amount at which the building site acquired by ;400,0J0 to 3231,375, the latter , the bank is now carried from ; being the value of the land alone, appraised as if regarded as security for a mortgage loan. Approved. welegram dated December 16th from the Chairman, Federal Reserve Bank of Chicago, requesting approval to permit reserve for depreciation on United States bonds to remain at the figures now carried on its books, viz: 485,000. Referred to the Secretary for report. Ofr.? kr -7Teieram dated December 17th from the Chairman, Federal Reserve Bank of 1;t. Louis, recommending approval of the following schedule of discount rates: rotes of all maturities secured by Treasury certificates regardless of rate of interest borne by certificates..... ..... 4-1 All paper, whether secured by Liberty bonds or Victory notes or eligible .Japer and for rediscount of all maturities up to days 4.-rj/4;Z 1.1ember banks collateral notes secured by dar finance Corporation bonds and rediscounts secured by same for all maturities 5-3/41 .approved. Tuirum dated December 16th from the Chairman, Federal Reserve Bank of an Francisco, requesting approval of the payment of extra compensation to the employees of that Bank for the period July 1 to December dl, 1919, as follows: 25,1 Jalaries up to „;1,80U per annum 2J4 i;alaries of „;:1,600 up to 3,001,) .0aiaries of ,;,j,030 up to and including 45,uu,) 15;1 I.:aximum salary in a lower grade is to be the minimum for the next higher grade. Telegram dated December 1Gth from the Chairman, Federal Reserve Bunk of an Francisco, submitting for approval the following schedule of discount rates to be effective December 1919: It...3 96,1 -8Member bank collateral notes secured by cer4-1/27, tificates of indebtedness 4-3/4; secured by TT..Bonds or Victory notes 4-3/47, oecured by commercial paper higher) 1; paper finance (iifteen day ";Jar Rediscounts, when secured by certificates of 4-1/4, indebtedness Secured by 4-3/4 ..bonds or Victory note Fifteen lay commercial paper.. . 16 to 90 days 4-3/47, 51 Agricultural or livestock paper,i.dz.,ya 16 to 90 days 91 days to six months 4-3/4; 5;; Trade accpptances, 15 days 16 to 90 days . Cn,motion duly seconded, the Governor was authorized to send to Ur. l'errin a telegram reading as follows: "Your telegram today, Board feels it very important to abolish differential rates whether based on collateral or time to run, except as to certificate secured paper and cannot therefore approve schedule submitted in its entirety. The Board is prepared to approve a five percent rate on all classes of paper under 90 days secured otherwise than by certificates which remains as at present, unless such five percent rate in your judgment would be prejudicial to Government bonds." On motion duly seconded the Governor was authorized , to communicate to Federal 7Leserve Bunks, General Counsel's opinion dated December 9th regarding the method of calculating reserves of Federcl 'Reserve banks, which opinion was approved Orr 3.;.A.2) -9efb- the Board at its meeting on December 12th, to be fective ,hoduclry 1, tee The Governor stated that the executive Commit had the reed upon the details of the plan of operation of ized branch of Federal Reserve Bank of Kansas City, author for apto be established at Oklahoma City, and submitted action proval draft of press announcement of the Board's December to be published in the morning papers on Thursday, as of this date. 18, 1919, (X71759); see auxiliary minute book Approved, and the Governor authorized to telegraph contents to the chairman, Federal Reserve Bank of Yansas City. Applications of the following banks for permiozion to accept drafts and bills of exchange up to 10j;; of their on 13 of capital and surplus under the provisions of 1;ecti the Federal Reserve Act; iirst rational Bunk, Yew Bedford, Lass. I.:arine Bank of rorfolk, Va. First rational Bunk, Clarksville, Tenn. Approved. er 26th, :lemorandum by General Counsel dated rovemb oller of submitting copy of letter addressed by the Comptr e the Currency to the Lanaging Director of the ;iar Financ by the Office Corporation, stating the construction placed "Yully of the Comptroller of the Curruncy on the words 966 -1ycovered by insurance" in connection with livestock loans, and recommendinL' that an official rulin, be made by the Board in connection therewith. 1:r. reported that after consultation with General Counsel he recommended that the Board publish the decision of the Comptroller of the Currency as contdined in his letter to Mr. =Lean above. .1.pproved. Application of the imerican Bank & Trust Company, Paris, Arkansas, for admission to the Federal Reserve 6ystem. Voted to refer to General Counsel for report in connection with his study of applications of other institutions having similar dowers. -atter dated December luth from 1:!r. L. E. Kenzel, • Chairman, enclosing a copy of the report to the rover.ler conference of Governors of the committee appointed at the Larch, 1919 conference of Governors, to study and recommend a pension plan,rucommending that stops be taken to secure the services of a committee of el:pert actuaries and pension specialists to advise with a committee to be appointed representing the Federal Reserve Board and the Federal Reserve banks, and that such colnmittees together shall work out the cost and an equitable distribution of cost between the Federal Reserve banks, and their officers and employees, and such other persons, if any, that it may be decided should 967 -11be permitted to participate in contributions or benefits, and recommending further that the expenses of the committee, including reasonable compensation for expert advisors and counsel be prorated among and paid by the Federal Reserve banks. Voted that the Board is willing to approve the recommendations of the committee, but before doing so, desired to be informed as to the probable cost thereof. 2r. Strauss made a statement regarding the status in of the operations of certain foreign banking institutions connection with the regulation of exchange rates between the united States and China under the agreement with the Federal Heserve Board. voted that in his discretion Ur. Strauss zed to modify the arrangements made authori be s of American banks in the branche the with permit the shipment of standard to as so Orient silver dollars up to dn amount not exceeding $10,000,000 without previous melting or without any obligation on the part of the banks to melt the dollars after arrival in the Orient. At 4-15 P.M., the meeting adjourned. Secretary. Approved:
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