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A meeting of the Federal Reserve Board was held in the office of the rederal Reserve Board on Thursday, February 21, 1929 at 11:45 a.m. PRESENT: PRESENT ALSO: The Chairman Governor Young Mr. Hamlin Mr. Killer Mr. Cunningham Mr. Eddy, Secretary Mr. McClelland, Asst. Secretary Dr. Goldenweiser, Director of the Division of Research and Statistics. Uhile awaiting the arrival of the Chairman, the Governor reported that cillrlag his visit to New York on Monday and Tuesday he discussed the matter Of the discount rate of the Federal Reserve Bank of New York with one or two °f the directors of that bank. Upon inquiry as to what the attitude of the 143erd would be should the directors again vote to increase the rate, Governor le411R stated that he replied that although he could not speak officially, his Personal opinion was that such action would not meet with the approval of the 4Mior4y of the Board. Re also stated that Governor Harrison advised him over the telephone that he hacl discussed the question of procedure in the matter of direct action in cleaillig with member banks in the Second District with Mr. William C. Potter, 'Of the Federal Advisory Council from that District who, as a result or th e discussion, seemed to have changed his mind as to the advisability of , tlE111111 member banks in for group conferences and to be of the opinion that Aid be better to deal with the member banks individually. He also stated that he was informed by Governor Harrison that draft of are PlY to the Board's latter of February 2nd has been prepared and will be 44brait ted to today. the board of directors of the bank at its meeting 4 cdr) 2/21/29 -2- Ile also stated that while in New York he met and talked briefly with Gc)vernor McDougal of the Federal Reserve Bank of Chicago who stated he had (41cussed the situation in the Seventh District with Mr. 7/etmore, member of the pederal Advisory Council, and with some directors, and is contemplating ealling in member banks in Chicago as quickly as possible, instead of issuing a circular letter. With The same procedure, he stated, would probably be followed respect to member banks in Detroit, Milwaukee and other centers. At this point, the Chairman joined the meeting and further consideration was given to the Board's Annual Report of the Year 1928, now in galley proof folte During the discussion, Dr. Goldenweiser submitted a proposed revision or Portions of the paragraphs on "Position of Reserve Banks in the Banking 4ructur" and "Banking Policy and Credit Policy", which were discussed and e' Ettrielicied at the meeting yesterday. At the conclusion of the discussion, it was voted to approve the report, as amended, for page proof. The Chairman then left the meeting and the other members, as an Executive °Tmllittee, discussed with Governor Norris of the Federal Reserve Bank of Naad elPhia the matter of requests which have been received by that bank for the esta blishment, at other Points in the District, of revolving currency funds zlzch es are maintained in Scranton and Johnstown, Pa. Governor Norris reviewed ' 1Y the results of the operation of the fund at Scranton. He was informed that 4,, 1 he Board considers the matter of the establishment of such currency depots 4a ne Which raises a question of System policy, as the establishment of such (leDota could. doubtless be justified in hundreds of cities throughout the country 4a °asp 'Y as in the cities in the Third District which either have or are pe' 4411g for such depots. _ k 2/21/29 It was suggested to Governor Norris that he should discuss at the next Governors' Conference the question Of the advisability of the establishment of such revolving funds or depots as a System policy. Governor Norris then discussed with the members of the Board the credit sitIlati0 11 iXi the Third District and stated that the directors of his bank are reluctant to increase their rate except as a last resort, realizing that such aetio4 would probably have harmful effects on blisiness. He stated that they fE e1 the public statement issued by the Board has had EzTod results and that attii further good can be done by cooperation between the deral Reserve bank alicl its -member banks, as sur:irested by the Federal Adviso Council. The meeting adjourned at 1:20 p.m. Secretary 4.13provea: Chairman.
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