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29 L meeting of the Federal Reserve Federal .deserve 3oard PC.;' oard was held in the office of the cinesday, July l, 1927, at 12:15 p.m. Governor Urissin::3er Hamlin • __iller ..r. James 4, r. Jirrinin;ham ..r. 42ddy, 3ecretary Secretarj r. The minutes of the meeting of the 203eral iteserve Board. hell on July 6th were read and approved. as amended. ,leport of klorunitte.e on Salaries and. ..1xoenditures, dated. July 11th, on letter dated July 8th from the federal Aeserve -,.gent at Dallas, requesting approval of the action of the bo.a.d of directors of that ban-6.- in grantiu; to 1. • . L; Brown, an employee of the fiscal gcncy Je-:)a.rt ant, a leave of absence on account of illness, with full Day, 'or the period from June 25 to July 31, inclusive; the Jor.mittee recoLne,diir: approval. 23.pproved. ziepo.,t of Jo:alittee on Salaries al.d....::penditares dated. July 11th, on :•,ont at letter dated. July 8th from the federal .eserve ,.., allas, requesting approval of the action of the board of directors of that ba,: in grantinl; to Bob deems, porter, a leave of absence on account of illness, with full pay, for the period from June 2j to july 15, inclusive; the committee recommending approval. 2..pproved. 2.he secretary reported. that in accordance .ith instructions he had disc-,:c33ed Lifor;..- .ally with „..ssistant secretary..laito of the .;tate Jellartment, the ir000sed co=lunication fr-La the ;oard to the secretary of ;tate on the 30 7/13/27 subject of the Juban Agency and the ta:. imposed on its ol,erations by the Cuban Uoveriment, which he had sabmitted to the ..xecutive Jommittee at its meati,4; yesterday, and that 123 had been advised by the :.ssistant .- )tate that the letter was in a form satisfactory to the jecretary of , z.itato Jeoartment. Upon motion of Lr. Hamlin, the form of letter was aooroved and ordered si:;nol aad transmitted to jepart..eat. the .itate 2he ,iover.lor then called attention to the action taken by the .board on June 2Uth in postponini: until July 1"..5th publication in its weekly statement of the condition of federal _ieserve banks of bills boucht by 2edera1 ieserve banks in the o)en market in form so as to shov separately those bills which have been bou_ht and are payable in dollars and those which have been bou4it and are -oayablo in forei,4n currencies. 2he Jecretury was called upon to read the record of the Board's action in ordering the .publication oZ bills purchased by the reserve banks, sereated as to those payable in dollars and those payable in forai':n currencies. I:.ollowing the readily; and after discussion of the James moved that the Board reconsider its subject, actions of Docemoer ',;rd and 28th, 1926, 2ebruary 23, 1927, and June 20, 1927, on this subject. darned.. James then moved that the action taken by the Board on _December 20, 1926, in votinT to show in its weekly statement of the condition of Federal :eserve banks under the ca9tion "Bills bouht in the open market" separate items for forei[71 and domestic bills, be revoke" and that the said statement be continued in form as at present, all purchases of pills mado at home or abroad, whether ,2ajable in dollars or foreign currencies, to be shown in a consolidatel total under the caption "Bills bou_ht in the ooen m_rketi, and - 31 -- 7/13/27 that the maturities of all bills purchased, whether at home or abroad, be shown in the statement without reference to the currencies in which they are payable. James' motion, being put by the Chair, was carried, the members voting as follows: Governor Orissinger, "aye" :dr, Hamlin, "aye" Mr. James, "aye" Cunningham, "no" 1.:r. Miller, "no" Mr. '.iunningham thereupon announced that he intended to leave ashington at the end of the week for his vacation, to be absent for a period of approximately one month, and that he desired to submit the following statement for Inclusion in the record: "Realizinz that the question of a credit policy by the Federal Aeserve Banks may come up for discussion and consideration during my absence, I desire in this memorandum to present my views relative to such policies so far as can be discerned at this time: "First. In the absence of any material change in existing credit conditions between this date and Muclist 15th, 1927, I would favor a reduction in the discount rate of the Federal Aeserve Banks on or about ugust 15, 1927. i believe such very stimulatins. effect on the marketing action would have of crops and on eneral business activities during the fall season, without ,:ivin7; undue encouraement or added Impetus to stock market activities. "second. I do not favor additional Open Market purchases by the Open Market Committee unless or until it has been fully demo,strated that the reduction in the discount rate has not createl the ease in the credit situation that was ex')ected." Dr. Miller stated that if there was any chan .e in the credit situation which ,ould reqaire his presence in jashington, he would be ready to return at any time if -,iven ample iotica in advance of the date on which his presence miht be required. He stated that the situation is not clear to him as to future discount policy of the banks, 4.12 ederal -eserve tint he aid not believe it would 31aar itself prior to the 32 7/13/27 1 -4- ne::t maetinc; of the federal -dvisory Council, at which time he believed the whole subject should be laid before the Co.ancil for discussion and an exoressior, of the 0ouncil's views. :e stated that if it should appear - ederal desirable for the f eserve banks to take any a3tion to ease a credit situation, he would be distinctly adverse to their doing so by further purchases of open market securities, and. in his opinion, action to ease u situation should be throu:h a reduction of the rediscount rate. 11 Jr. ,7;ht it very uncertain at this time as to hiller also stated that he thou. what the discount ,olicy of the federal ,ieserve banks should be for the closing months of the year, and that in no event should action with respect to the discount rates be taken unless for very convincin-: reasons. he further stated tat if a call to ease the 2rese_lt situation should caMc,,! un in the near future, he would be inclined to vote in the noative. The minutes of 'the meeting of the _:xecutive Jommittee held on July 12th were road a:id the actions recorded therein were ratified. Governor Orissinger referred to the action of the -xecutive 3oramittee on July 12th in voting to instruct the Board's 0ounsel to nrepare and submit to the 3oard in due course a regulation such as 3ontamplated by the Doard's action of July 6th in voting that the purchase and sale of bills of exchan7e and acceptances, made abroad as "ell as at home are subject to its jegu.lation. present and approval. He stated that if he had be bject of 110 would have voted agai.ist roquirirg the e preparation the motion being referred to Oounsel for it J.' that the he as ruling, or formal regulation of a of pro *- on. ututory merely declaratory was resolution The :meth urned a Secretary. --)nroved: : 0 p. Govan, i
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