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A. meeting of the Executive Committee of the Federal Reserve Board was held in the office of the Vice Governor on Monday, July 2, 1023 at 12:15 n. in. FRESEI;T: Vice Governor Platt Mr. James Mr. Eddy, Secretary Mr. Uoell, Assistant Secretary. The Vice Goverzior stated that although th9 present by-laws do not seem to provide for a meeting of two members of the Executive Committee, nevertheless, it seems necessary to hold such a meeting so as to ;rake a record of telegrams and messages from the Federal Reserve Bank of Chicago and to fix a clat0 for their consideration by the Board. The Vice Governor then presented a telef,:rar2 dated June 29th, advising that the Executive Cournittee of the Federal Reserve Bank of ghica:o, under authority Of the Board of Directors on June 29th, voted to establish a. rediscount rate of 5 per cent on all classes of naner of all maturities, effective the first bl-leiness day following that on which approved by the Federal Reserve 2oard. He also presented a telegram from the Chairman of the Board dated June 29th, readas follows: "At the regular meeting of our executive committee this morning very careful consideration was given to the money market situation prevailing here and elsewhere. In Chicago for a period of two weeks or more the going counter rate for commercial purposes has been five and one half oercent with a minimum of five percent. The rate to local stock brokers was advanced several days ago from five and one half to six percent. Under all circumstances the action reported in our code telegram was considered fully justified." The Vice Governor stated that he had severl telephone calls with Governor --epougal and Heath and had discussed the -oro7)osed rate change with the Secretar7 of the Treasury and the Undersecretary of the Treasury. He submitted - emorandml of his teleohone calls as follows: "Along about one o'clock on Friday, the 29th, Mr. Heath of Chicao called_ me on long distance telephone and stated that ne Executive 7-2-28 "Committee of the Federal Reserve Bank of Chicago which had authority to act, had voted a 5 per cent rediscount rate, subject to approval by the Board. He stated that the directors had all been consulted and were nearly unanimous in favor of the increase; that those Who favored it were very strongly of the opinion that the increase should be made. I told him that of the an-pointed members of the Board, only Mr. James and myself were present, that it would be tnlossible to act at once and might be imnossible to act on the proposed increase until after the 4th of July. Governor McDauEal came on the phone a little later and gave MB some further information to the effect that for the past two weeks customerls rates in Chicago had advanced so as to fully justify a 5 per cent rate and that such a rate in fact had been discounted. I told him that it seemed to me it would be unfortunate to put a rate increase in effect just before the half yearly settlement date, even if it were possible to obtain action from the Board - that it ought to go over anyway until the settlements had worked through. Governor McDougal replied that they had considered the nrobability that rates would ease in rew York after the first of July but that they did not think that would affect the local situation. I suggested he could perhaps get in touch with Governor Young. The telegrams that followed from Mr. Heath and Governor McDougal give further information. gJuly 2nd - At about 10:35 this morning (Monday) Governor on long distance telephone and read me the cDougal called he had received from Governer Young. As letter a of substance be received by me either today doubtless will letter same the to repeat it. Governor undertake not will or tomorrow, I there should be any believe not did he that added McDougal for the present, and :ratters market open in policy reversal of Market meeting on Open an for ?roposal the about I told him for some change." reason be might there time which by 18th, July The Vice aovernor also renorted that he had written to Doctor -111er, w'',o is in Boston, relative to the -oronosed rate change and stated that ,lecretary of the Board had advised him that Doctor !alder had called over the telephone this morning and advised that he, Doctor Mier, felt that action on the matter should go over until the next meeting of the Board, w"-ich is se_-eLlled for Tuesda7, July 10th. The Co=ittee having no authority to take action ,on the proposal of the Federal Reserve Bank of Chicago to increase its rate, instructed the Secretary to advise the ahairman of the Federal Reserve Berar of Chicago that his telegram reporting the action of his Executive Committee had been received and would be presented to the Board at its next meeting, which it is exnected will be held on July 10th. 7 The Secretary read a letter received from Assistant Secretary Bond of the Treasury Department confirming statements made by him at the meeting of the Board on Tuesday, June 26th, concerning the status of the Treasury's program for reducing the size of currency notes. The Secretary was instructed to send a copy of the letter to all Federal reserve banks and request the banks to wire the Board the amount of orders for printing to be placed with the Bureau of Engraving and Printing for the fiscal year, beginning July 1, 1928. Letters from the Federal Reserve Agent at Atlanta, dated June 28th and June 30th, submitting application of the Canal Bank and Trust Company of New Orleans for permission to purchase certain assets and assume the liabilities (exclusive of stockholders' liability) of the Marine Bank and Trust Company of hew Orleans, effective July 3, 1928; the recommending Federal Reserve Agent and the Board's Committee on Examinations approval. Approved. Memorandum approved by the Secretary, recommending the appointment of August T. E. Buckley as vacation relief telegraph operator during July and at a salary of $120 per month; also recommending the appointment of a while messenger boy during July and August to fill Mr. Buckley's position he is act inc: as o2erator. Approved. REPORTS OF ST,I.::DE7G COMMITTEES: Recommending changes in stock at Federal reserve banks as set forth in the Auxiliary Minute Book of this date. Recommendations apnroved. ing approval of the application of Mr. Fred Recommend 26th, June Dated, Swensen for permission to serve at the same time as director of the Pacific National Bank, Los Angeles, California Dated, June 30th, =PC= OF STAYDRTG 17.107:ITTEES (Continued) as director of the Graham rational Bank, Graham, California, 7.nd as director of the rational Bank of Hermosa Beach, Hermosa Beach, California. 3ec=mendation ap-oroved. Dated, June 26th, Recommending ao?rovel of the aoplication of r. George H. Barlow for permission to serve at the same time as onal Bank, Corry, Pennsylvania, director of the Citizens Y and as director of the Se 0 ty Savings and Trust Co:-..pany, Erie, Pennsylvania. Recommendation ap9rfr '4'• The meeting adjourned „:4O p.m Secretary A-ooroved: Vice Governor.
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