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L. meeting of the Executive Committee of the Federal Reserve Board was held in the office of the Federal Reserve Board on Wednesday, July 2, 1924. 1RES=2; LIS° PR::3SLIY1: Governor Crissinger EAller James Mr. Eddy, Secretary 1.1r. Menzel, Deputy Governor, Federal Reserve Bank of Yew *York 77yatt, General Counsel of the Federal Reserve Board Mr. Freeman, issistant Counsel of the Federal Reserve Board The Law Committee submitted draft of a letter dated July 2nd addressed to Mr. E. R. Kenzel, Deputy Governor of the Federal Reserve Bank of New York, in answer to his letter to the Board dated May 1st in which he proposed a method uf financing sales of cotton in Germany by :merican Bankers' acceptances, which would be eligible :or discount by Federal reserve banks; the proposed letter stating that there is nothing in the law or the Board's regulations which precludes the establishment of acceptance credits in the United States secured by cotton in warehouses in Germany, with the substitution of trade acceptances as security when the cotton has been sold out of the warehouse and delivered to buyers. The proposed letter pointing out that the Board's requirement, in order for an acceptance covering the storage of readily marketable staples to be eligible for rediscount by Federal reserve banks, is that the acceptor must remain secured throughout the life of the acceptance, and the Board's ruling that a trade acceptance after acceptance by the drawee constitutes "actual security" within the meaning of the provision of Section 13 of the Federal Reserve ',et, and that such acceptances might be substituted for the warehouse receLt covering the cotton subsequent to the acceptance of the bankers' acceptance drawn to finance the storage The meetin:„; adjourned at 4:30 p.m.
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