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741 A meeting of the Federal Reserve Board was held. in the Office of the Board on Tuesday, January 25, 1921, at 11:20 a.m. PRESENT Governor Harding Mr. Platt Mr. Hamlin Mr. Miller Mr. Wills Mr. pill lams Mr. Hoxton, Secretary. PRESENT ALSO: Mr. Login, General Counsel. Minutes of the meeting of the Board held. January 20th were read, and. on motion, approved, as amended. Minutes of the two meetings of the Executive Committee held respectively, January 22d and January 24th, were read, and on motion, approved. The Governor reported the reserve positions of the several Federal Reserve Banks as at close of business January 20th, 21st and 22d, and the statusiof rediscounts between the Federal Reserve banks as of the same dates. The Governor reported rediscount transactions, member bank bromissory notes secured by Government obligations, rate 7% aal 77, on commercial paper, as fbllows: Dat e Jon. Jan. Jan. ,Jan. Jan. Jan. 20 20 20 20 24 24 Bank rediscounting Atlanta Dallas Atlanta Dallas Dallas, Atlanta With Cleveland Cleveland Philadelphia Cleveland Cleveland Boston Amount Maturities 500,000 2,000,000 1,000,000 1,000,000 9,000,000 2,800,000 - 11 - 15 days Comm. paper 11 - 15 days 11 - 15 Comm. paper -2- Unfinished busine ss: 75 Discussion as to whether the Federal Reserve Board will exercise its ri -tht to authorize Federal Reserve banks to purchase in the open market bankers acceptances with maturities in excess of three months and. not more than six months. Upon motion, it was resolved to bring up the matter for discussion at the next meeting of the Federal Advisory (ouncil, with advice to the Council that the Federal Reserve Board is inclined to recp.rd the proposed regulation unfavorably. Suggested circular letter of this date prepared for transmission to all Federal Reserve banks. and Enclosing and commenting Upon the Federal Reserve inter-district time schedule as finally revised and_ agreed upon at the conference of representatives of the Federal Reserve balks held on Janrary 13th. Approved. letter dated January 21st, from the Governor of the Federal Reserve Bank of Um York, suggesting that there be an understanding among Federal Rescrve banks that bills from their own portfolios Will not be offered for sale in the open rriarimt, and reduestinp; that at least all bankers' acceptances ourchased by other banks from the Federal Reserve Bank of :rev York, be offered for re-purchase to the Federal Reserve Bank of :':ew York before offering same in the open market. Governor liard.ing was requested to advise the Governor of the Federal Reserve Bonk of TTew York that the Board sees no objection to his suggestion, but advising Governor Strong to get in touch with the Governor of the Federal Reserve Bank of Chicago, which bank is especially interested in this natter. 76 -3- Letter dated January 21st, from the Railway Loan Advisory Committee, requesting approval of a form of loan, in the mount of :s. 200,000, to be rade to the Bangor and. Aroostook Railroad_ Company, urrler the provisions of Section 210 of the Transportation Act_ 1920, as aneiried. Approved, Tr. Tiamlin not voting. Letter dated January 21st, from the Railway Loan Advisory Committee, requesting approval of a form of loan, in the mount of 622,E300, to be made to the Western Maryland Railtay Company, under the orovisions of Section 2.10 of the Transportation Act, 1920, as amended. A p pro ved:. Letter dated January 22d, from the Railway Loan dvisory Committee, requesting); approval of a form of loan, in the amount of :n 320,000, to be nude to the 7 -able Central Railroad_ Company, -under the provisions of Section 210 of the Transportation Act, 1920, as amnded. Approved. Draft of letter dated January 25th, 'prepared by Governor 'Harding, to the Govcznor of the Federal Reserve Bank of Dallas, drawn in reply to a letter from Governor Van 7,andt, dated January 20th, and in accordance r.ith the action of the Board at its meeting yesterday. Aoproved. -4- At this point 1:r. Williams entered the meeting, and stated tIzt he was prepared to submit certain motions coverin recommend- ations rrade in his letters of December 28, 1920 and January 17,192 1. fir. Williams moved_ as follows: BE IT RESOLVED, tIr..t the Boxd hereby gives its approval to the rates proposed by the Federal Reserve Bank of Atlanta in its resolution of July 9, 1920, upon the conditions set forth in said resolution, and the rates therein provided for shall be substituted promptly for those now in force. After full discussion, and upon the reoresentat ion of Governo r Harding that Counsel had advised that the plan proposed by the Federal Reserve Bank of Atlanta was contrary to the provisi ons of the 1?ederal Reserve Act, 7-r. Williams renuested that his motion be Placed upon the table, and moved that Counsel be requested to review his former opinion and submit a memora ndum either sustaining or modifying the former opinion. Duly seconded and carried. Thereupon 17r. Williams submitted his second motion, as foil ow s: BE IT Ri.ZOLIT:M that the Governor of this Board be requested to prepare for the press a statemen - for the purpose of informing the public of the actual facts of the situati on. including figures as to the present unused lending Dower of the Federal Reserve System and the intentions of the Board as to the restrictions of interest rates to a more reasonable and, moderate basis tnan those which have recent ly prevailed in certain Reserve districts. After discussion, the question \vas put, Hr. Williams voting aye, and Governor Harding, LIessrs. Platt, 'Tomlin, Miller and Wills voting no. -5- Thereupon Mr. Williams submitted his third motion, as fol- BE IT Tr.90LVM that it is the sense of this Board that the application of the progressive rates in all districts where they are now in efft ct should be suspended until further action by this Board. -ith reference to the above motion, Governor Harding exhibited to Williams the letter addressed to Governor Van 7,andt and approved by the Board earlier in the meeting. and Mr. Williams reauested that his third motion be placed upon the table, in order to give him an Opportunity to read the said letter. At this point a recess was taken at 1:40 o.m.. to reconvene at 3 p.m. At 3:25 p.m. the Board reconvened, with those members present who were present at the morning session, with the exception of Mr. "Jilliarns. Telegram dated January 24th, from the Chairman of the Federal Reserve Bank of San Francisco, recommending that the Board give Wire approval to certain di rectors of the Nat lanai Bank of Takoma, Washin7ton, to serve also as directors of the Army National Bank of Camp Lewis, Washington. Approved, won recommendation of the Clayton Act Commit tee. Letter dated January 19th, from the Deputy Governor of the Pederal Reserve Bank of Kansas City, requesting the installation of a direct leased wire from Kansas City to Denver, and. a duplex wire between Kansas City and Chicago. Approved. -6- Letter dated January 21st, from the Deputy Governor of the Federal Reserve Balk of Cleveland, enclosing recommndations as to salary adjustments. Referred to Messrs. Platt and Wills. T,".cmorandurn dated January 18th, from the Chairman of the Federal Reserve Bank of Dallas, err losing a copy of the minutes of the last meeting of the Board of Directors of that Bank. Referred to General Counsel, with instructions to prepare memorandum dealing with the legality of the purchase of mail transfers by the Federal Reserve Bank of Dallas, in accordance with that Bank's present nractice. T.Temord_um dated January 18th, from 1.7r. Emerson, submitting f an ii3xecutive Order dated January 5, 1921, to the effect that Federal Reserve banks will be e:cpected hereafter to receive deposits from steamship companies, or agents for the credit of the collector Of the ?annma canal rhich heretofore have been nnde with the Treas- urer, or _'ssistant Treasurer of the United States. :ot ed. Letter dated. January 19th, from the Federal Reserve Bank of 'Tow York, transmitting application of the Liberty 1Tational Bank of ' - ev.1 York for permis si on to accept dra ft s having not longer than three months sirt.t to run, drawn noon it by banks or bankers in Australia, :ev,7 Zealand and other Australasian dependencies, for the purpose of creat inn' dollar exchange. Approved. Letter dated January 22d, from the Federal Reserve Bank of 1Tew York, transmitting application of the Farmers Loan (I?: Trust Corn- -7- pany of New York to accept bills drawn upon it by banks or bankers in Argentina, for the purpose of furnishing dollar exchange. Approved. Letter dated January 17th, from the Second National Bank of Boston, applying for pErmission to accept drafts drawn upon that Bank to create dollar exchange, drawn by banks or bankers in those countries already designated by the Federal Reserve Board, as well as in those countries which the Federal Reserve Board may from time to time designate. Approved. Memorandum dated January 21st, from Mr. nerson, requesting the Board to formally approve the excess expenditure of :-1-3237.98 over the $75,000 orinally authorized for the purpose of making vault construction tests; also to authorize the transfer from the original appropriation of $75,000 the additional sum of 750.00 to the appro- Priation "Industrial Research Bureau of Standards, 1921", in order to complete the Board's records. Approved. Telegram dated January 24th, from the Chairman of the Federal Reserve Bank of San Francisco, advising that that Bank has purchased a site for a branch bank in Salt Lake City, for $115,000. Approved. Upon motion of Mr. Miller, communications from the Director Of the Division of Analysis & Research, with r3ference to the annual reports of the Federal Reserve Bank of Cleveland and the Feieral Reserve Bank of New York were referred to Mr.Wills and Mr.Platt, res)ectively, with power. -8- Draft of letter of January 25th, p repa red by General Counsel, to the Chairman of the Federal Reserve Bank of Dallas, in regard to the cotton marketing proposition outlined by Judr,7e Ramsey in his letter of January 20th. Approved. RE_)ORTS OF CO72ITTEZ, NO. 1: Dated January 10th, 21st, Recommending admission of State institutions as set forth in the auxiliary minute book as of this date, subject to the conditions stated in the individual reports attached to each application. Approved. Dated JanuLry 18th, 22nd. Recommending approval of applications for fiduciary powers, as -set forth in the auxiliary minute book as of this date. _Approved. Dated January 20th, Recommending chary-es in stock at Federal 22nd, Reserve banks, as set forth in the auxiliary minute book as of this date. Angroved. Dated January 22nd, Recommending that authority be given to 25th, certain 17ationa1 Banks to purchase stock in corporations organized under the socalled Edge Act, as set forth in the auxiliary minute book as of this date. Approved. Dated January 21st, Resignation of 1.:rs. thee Robillard as Clerk in the Division of Reports and Statistics, effective at the close of -business January 22, 1921. Tot ed. Dated January 24th, Recommending approval of the appointment of Liss qcrtrude C. Shaw as Stenographer in the ',old Settlemnt Division. at a salary of `411500 per annum, effective January 26, 1921. Approved. W:4 -9- Dated Janirlry 22, 7ecornmending approval of the application of :r. H. A. Robson to serve at the same time as director of the Charleston :Tational Bank of Charleston. West Va. and as director of the Montgomery National Bank, I7ontgomery, West Virginia. Approved. Dated January 22, :Recommenling approval of the application of Mr. L. S. Ottenheimer to serve at the same time as director of the 'First National Bank, and as director of the Morris Plan Bank, both of Toledo, Ohio. App:roved. Dated January 17, Recommeniing approval of the application of Mr. A. Z. Litz to serve at the same time as director of the Farmers National Bank of Tazewell, Va., and as directo7 of the First National Bank of Huntington, West Va. Appro ved. Dated January 17, Recommending approval of the application of Mr. Jesse F. McDonald to serve at the same time as President of the Amer ican National Bank, of I,eadville, Colo., and. as Vice-Pres. of the Hamilton ::ational Bank of Denver,Col. Approved. Dated January 21, Recorrmealing approval of the application of Mr. W. W. Knight to serve at the same time as director of the First National Bank and of the Morris Plan Bank, both of Toledo, Ohio. Approved. Dated Janurtry 21, Recomending approval of the application of Mr. H. S. Reynolds to serve at the same time as director and officer of the First 7.ational Bank, Toledo, and as director of the 7.7orris Plan Bank, Toledo, Ohio. Approved. Dated January 21, Recorrmanding approval of the application of I.:r. G. M. Mather to serve at the same time as d.irector of the First National Bank, and as director and officer of the Morris Plan Bank, both of Toledo, Ohio. Approved. Dated January 24, .Recorrmending approval of the application of Mr. Hamilton F. Kean to serve at the same time as director of the First National Bank of Perth Amboy, the Federal Trust Company of Newark, and the W.Hudson Co. Trust Company, of Harrison, N. J. Appio ved. -10- E33 Letter dated January 22d, from the Chairman of the Federal Reserve Bank of New York, submitting application of Mr. Howard Bayne, of the Columbia Trust Company, New York, to serve as director of the Seaboard National Bank, and urging the granting of the application, on the grounds that the father of Er. Bayne is now serving as officer and director of the two banks named. Upon recommendation of the Clayton Act Committee, the Board declined to grant the application, and directed that Yr. Jay be advised that the permission to occupy the dual directorship previously granted to Mr. S. G. Bayne, the father of the applicant, will be allowed to stand for the present, but will possibly be revoked when the contenplated survey of all such cases is made by the Board on April 1st. Memorandum dated January 22d, from Mr. Wills, recommending that a hearing be arranged for Tuesday, February 1st, at 10 a.m. in the matter of the applications of Mr. K. Secor and Mr. H. C. Truesdall to serve as directors of the Northern National Bank and the Union Savings Bank of Toledo, Ohio. Approved. At 4i50 p.m. the meeting adjourned. Secretary. Approved:
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