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106 A meting of the federal Reserve P,o:.:rd was held in the office of the Board. on Wednesday, February 2, 1921, at 11:20 ?TIMCYT: Governor :Farding Mr. Platt Mr. Hamlin 7r. 7.i11er r. Wills Trx. Williams r. Hoxton, Secretary. ':inutes of the meeting; of the Board held febrtury 1st Were read, and. on rnot ion, appnved, as amended. The Governor reported the reserve positions of the several Federal Reserve banks as at close of business ;fan-nary 30th, and the status of rediscounts between the Federal Reserve banks as of the rlie date. Thu Governor reported rediscount transactions, member bank promissory notes secured by Government oblicT.tions, rate as follows: Date Jalia• 31 Bank rediscount inpz Minneapolis With Boston Jan. 31 Atlanta Cleveland Amount .1,000,000 700,000 Maturities 11-15 days do Letter dated January 29th, from the Cholrman of the Federal Reserve Balk of Kansas City, transmit tins' action of the Beard of Directors of that bank, invo1vin7 a change in the application of the progressive rate of discount, \thereby the Federal Reserve Bank will discontinue the rate progression when the rate ,, and lorovidinp; aPPlying apAinst a member bank shall reach 12'; -2- 107 that when such a point is reached the Federal Reserve Bank of Kansas City will only in exceptional cases rake further advances to such 11nTrber bank. :7r. Williams moved that the maxim= rate Of progression in the Kansas City District be limited,to 10, Which motion was lost, Mr. William voting "aye" and Messrs. Harding, 'lat t, Hamlin. Miller and. Wills voting "no". Mr'Wills moved, that the action taken by the Board. of Directors of the Federal Reserve Bank of Kansas City, as advised in hr. Ra.msay's letter of January 29th, be allowed to stand. Carried., hr. )latt votin- "no". Mr. "Tills suggested that Governor Harding secure an expression of opinion from the Federal Reserve Bank of Kansas City as to the advisability of entirely abolishing the progressive discount rate. Governor Harding stated that the next thing in order would be consideration of the motion submitted. by hr. Williams at the meeting of yesterday, as follows: BE IT RESOLVED, that it is the sense of this Board that the application of progressive rates in all districts Where thev- are now in effect should. be suspended until further action by this Board, so far as said plan permits the Charge of any rate in excess of 10r7 per annum on any loans or discounts nr.de by reserve banks to member banks. The motion being put was lost, Mr. Williams voting "aye" and Ii 1:essrs. Harding, 'Platt, Hamlin, Miller and 'ills voting "no". 108 -3- -emoranda dated February 1st and 2d, from l'r. Smear" and Hoxton, reporting upon the ratter of penalties for reserve deficiencies, with special reference to the tele:7am of February 1st from the Chairne.,n of the Federal Reserve Bank of _Atlanta, transmitting the recommendation of that bank that the progresslye penalty assessed against member banks for reserve d_eficiencies be so modified that the r.enalty rate will not progress beyond 11 above the discount rate for commercial paper. 7.1r. moved to modify so that no penalty shall be alloyed to e-xceed 10/3.. Lotion lost: Mr. 7illiams voting "aye", and i'essrs. Tardinfi;, platt, Hamlin, Miller and Mills voting "no". Upon motion, the recommendation of the _Federal Reserve Bank of Atlanta, as uncle in the telegram of February 1st, was approved. Governor Harding was requested to notify all Federal Reserve banks to send to the Comptroller of the Currency and to the Chief 2xaminer of the respective districts, periodical lists of 7Tational banks Penalized for deficient reserves, including the amount of deficiency and the amount of penalty, and upon motion of ::r. Miller, duly seconded and carried, the lovernor was also requested to write a letter to the Comptroller of the Currency, formally calling his attention to this action by the Board, so that the comptroller ray be in a position to enforce the section of the law forbidding Mat lanai banks, when their reserves are impaired, to rake new loans or declare dividends. 0 During the discussion of the rratter of deficient reserves Of National banks, Ni'. Williams read to the Bonrd a letter upon this subject, recently addressed by him to the Board of Directors of the National Bank of Cleveland, Cleveland, Texas. Letter dated January 29th, from the Director of the Division of Analysis e, Research, requesting permission of the Board to give out preliminary statemonts of certain data received by that Division. Approved. Letter dated, January 31st, from the Director of the Division of Analysis • Research, recorrmending that the proposed con- ference upon monthly business reports be held in "Tashino:ton on Pebrmry 21st and 22d, and =king suggestions as to the details Of such conference. Referred to Llessrs. Platt, Miller and Wills, with power. Letter dated January 31st, from Mr. J. A. Broderick, Vice resident of the tional Bank of Commerce in New York, stating that it will be impossible for him to accept the nomination of the Federal "r-Zescrve Board to sarve as the Arrerican member of the Cuban Commission on Insolvent Banks. Upon motion of I.:r. ')latt, duly seconded, Governor Harding was reouested to invite Ti'. Oscar Wells, of Birmingham, Alabama, to accept the appointment. Draft of letter dated February 1st, addressed to the Chairmn of the Co]Tnittee on Banking & Currency of the House of -5- Representatives, with refere2re to Senate Bill 4f4666, nrovidinr; for the discount of cotton factors paper. Approved, with the understanding that the letter will be amended by insertin7 the word "present" before the words "harmful effect". Governor Harding stated that the next thin- in order Would be the first motion offered by 77r. Williams at the meetinc; of the Board on January 25th, with reference to the discount plan proposed by the Federal Reserve Banic: of Atlanta in the resolution of its Board of Directors dated July 9, 1920. Upon motion of 7.7r. Filler, the motion referred to was ordered laid upon the table. Tele,gram dated February 2d, from the Chairman of the Federal Reserve Bank of 7hiladelphia, stating that the Board of Directors of that bank, subject to the review and determination Of the Federal Reserve Board, had established a new maximum rate Of 51: --/- for loans and rediscounted bills secured. by United States Treasury Certificates of Indebtedness, except when secured by certificates bearing a rate of interest in excess of 514, when the rate of discount is to be the mme as the rate borne by the certificates. Approved. Letter dated February 1st, from the Chairman of the Federal Reserve Bank of Richmond, advising of the appointment in the EXamination Department of that bank of J. F. Strong, at a • -6- salary of .2,760. per annum, and Mr. H. M. Gordon, at a salary of 2,640 per ainum. Appro ved. 7'emor2.ndum dated January 31st, from Mr. ilerson, advising that in the course of the examination of the Federal Reserve Bank of Kansas City, it developed that while advances to member banks secured by Liberty Bonds and Victory Motes borrowed are included in the 7eneral credit structure, the a.policat ion of the pre7ressive r-.tes is waived in such instances. Hot ed. Telegram dated February 2d, to the Manager of the Helena Branch of the Federal Reserve Bank of Minneapolis, officially desio;natin7 1Telena, Fontana a reserve city, in accordance vith the established policy of the Federal Reserve Board of classifying as reserve cit ies all cities in which branches of Federal Reserve banks may be located. Approved. .RF„PORTS OF COLIIITT.i..2, MO. 1: Dated February 1st, Recorlmendincf changes in stock at Federal Reserve balks, as set forth in the auxiliary minute book as of this date. Approved. Dated 'February 2d, "?ecolnmend.ing that authority be r-iven to certain Thtional banks to purchase stock in corporations organized under the socalled EdP,13 Act, as set forth in the auxiliary minute book as of this date. Aooroved. Dated February 1st, Recoranending increase in the salary of Genevieve C. Meacham, Junior Technical Clerk in the office of Statistician, of 1120.. to f,31,680; also increase in the salary of Elizabeth Headley, Card Puncher in the Division of Reports Pc Statistics, of :3120. to ftk1,320. Approved. 1:15 p.m. the mains- adjourned.
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