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At a meeting of the Federal Reserve Board held in the office of the Board on Tuesday, Juno 10, 1919, at 11 A.:.:., PIC2ZENT: The Mr. Mt. Mr. Yr. Mr. Governor 1;trauss Miller Hamlin VAlliams Chapman, assistant Secretary. The minutes of the meeting of the Board held on June Sth were read and on motion approved. The minutes of the meetings of the Goldport Committee held on June 6th, 7th, 9th and 10th were presented and approved, and the action therein set forth ratified. Morning business was presented and disposed of as follows: The Governor reported the purchase of special 2 cer- tificates of indebtedness of the United States for deposit with the Comptroller of the Currency as collateral for Federal Reserve bank notes, as follows: Date June June June June June June June 4th 4th 4th 4th 6th 9th 9th For Federal iieserve Bank of: St.ouis Minneapolis Atlanta Cleveland Richmond Dallas Richmond i'..mount i500,000 500,000 500,000 540,000 200,000 500,000 100,000 Approved. The Governor reported rediscount transactions, pur- -2suant to authority heretofore vested in him: member bank promissory notes secured by Government oblig,,ctions; rate 4"; on paper secured by certificates of indebtedness and 4:10 on paper secured by Liberty bonds or Victory notes, Date Bunk Eediscounthig. June 5th June 5th June 7th Richmond :::ichmond. Dallas June 9th Richmond ,,ith ;mount :,;10,000,000 Chicago Minneapolis 5,000,000 2,500,000 Chicago 5,000,000 (Chicago as follows: 1.1aturities 11-15 days 11-15- days 1-15 days 11-15 days (Cleveland 5,00,u30 The ;1,xecutive Committee reported that the Secretary of the Treasury had transmitted to the 3oard cable reply received from The President to the inquiry as to his wishes with respect to the Board's contemplated action in removing the control heretofore exercised over transactions in foreign exchange and over the exportation of coin, bullion and currency, and that The President having expressed himself in favor of such action the Committee had voted to remove the controls refor ferred to and had api)roved press statement to this effect release in the papers of June 9th, and had authorized the Governor to telegraph the Chairmen of all 2edera1 Reserve Banks accordingly. On motion duly seconded the action of the o.xecutive Committee was ratified. 464 Strauss filed with the Secretary various papers and documents leading up to the removal of embargo, stating that such papers had theretofore been circulated among members of the Board. L:emorandum by the Secretary dated May .7th, in re recommendations of the Federal Advisory Council at its meeting ray 19, 1919. Referred to Mr. Miller for report. Y.emorandum by the Secretary dated June 5th, submitting correspondence in re suggested establishment at Nashville, Tennessee, of a branch of the Federal Reserve Bank of Ltlanta. Ordered cireulated. Letter dated May 26th from the Chairman of the Federal Reserve Bank of 2hiladelphia, advising of the desire of the Bankers Trust Company, Atlantic City, row jersey, to be admitted to the Federal Reserve ,-;ystem lidthout increasing its capital of 400,0J0, and submitting statements as to the estimated population of that city, together with memorandum by General Counsel dated June 5th. Voted that the Board accept the statement made to the effect that the permanent population of Atlantic City, New Jersey, is less than 50,0A, in determining the requisite capital stock of banks in that city desiring to join the Federal Eeserve System. Application of the :ationt,1 City Bank of New York for 4.65 -4authority to establish a sub-branch, agency or office of its Uruguay Branch in the City of Yientevideo, Eepublic of Urui3uay. Approved as set forth In the order book as of this date. The Governor submitted for ajproval copy of his letter to the Governor of the Federal Reserve Bank of Atlanta under date of June 6th, with respect to the proposed establishment of a state reserve bank of Georgia. Approved; ordered circulated. 1,:emomndum dated June 6th from Deputy Comptroller of in re st,estion of reduction in the the Currency size Of paper currency. Ordered circulated. 1!0morandum by the Secretary dated June 5th, in re penalties for deficiencies in reserves. Referred to the Governor for report. Letter dated March 27th from the 3ecretary of Labor to the Secretary of the Treasury, in re suggested legislation to stimulate buying and building of homes, etc. Referred to the 4;ecretary for advice to the Seeretary of the Treasury that the banking system proposed by the draft of legislation submitted is entirely foreign to the basis of the Federal Reserve Zystem, and that its operation could not be said to come within the limitations necessarily prescribing the operations of the iederal Reserve ystem. J,(36 -5Telegram dated June 6th from Joseph N. Teal, Portland, Oregon, advising that he would be willing to accept election as director of the Portland Branch of the Federal Reserve Bank of San Francisco. On motion duly seconded Sr. Joseph N. Teal was appointed a director of the Portland Branch of the Federal Reserve Bank of San Francisco to serve during the unexpired portion of the term of Lverett Ames, deceased. Copy of telegram dated June 9th, addressed to all Federal Reserve banks by Assistant Secretary of the Treasury Leffingwell, advising the banks that the Treasury Department has authorized them, on and after June 10th, and until further notice, to redeem In cash before maturity, at par and accrued interest to date of redemption, Treasury certificates of indebtedness maturing on or before July 1, 1919. Noted. Letter dated June 5th from the Chairman of the Federal Reserve Bank of Dallas, commenting upon letter from the Governor of the Federal Reserve Bank of Chicago, suggesting that the first named bank raise its rates, in view of the large unount of rediscounting done for its account. Eeferred to the Governor for reply. (At this point Mr. Williams joined the meeting). Letter dated June 6th from the Chairman of the Federal Reserve Bank of Chicago, submitting application of the Second -6e0urity 3ank of Chicago, Chicago, Illinois, for redaction of its reserve requirements to 1.1/4i on demand deposits and 3:", on time deposits. .1pproved. :emorandum by Lr. li1Ior dated June 9th, regarding steps to be taken to procure regularly, data with respect to business. and financial conditions in foreign countries. Ordered circulated and docketed for the meeting of the Board to be held on ',I.'hursday,June 12th. . Letter dated June 4th from the Chairman of the 1'ederal 'Reserve Bank of Dallas, elaining action of that sank in permittinc; a reduction of interest on loans to the Citizens rational Bank, Uarland, Texas. Ordered circulated and docketed for the meeting of the Board to be held on Thursday, June 12th. Letterdated June 6th from the Park-Union ioreign Banking Cor:.Joration, submitting list el* its authorized branches and those in actual operation. 7oted. On motion duly seconded it was voted .that, effective June 15, 1919, the Board's offices will be closed at 1 2.:. on all Saturdays until Q'eptember 15, l'-419, no time being allowed for lunch on such days. The Governor reported the reserve 2osit1ons of the several Federal .1'.eserve banks. 4G8 11'2ORT6 Ci COLMITT O. l: Dated June 1,./th, 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 June 6th, in re violation by the Peoples Bank, Mobile, Alabama, of the condition of membership relatin to the payment of dividends. Referred to the Governor. Dated June 5th, recommending action on applications for fiduciary powers as set forth in the auxiliary minute book as of this. date. Approved. Dated June 9th, recommendirw, approval of application of S.J. Lealey for permission to serve at the same time with the 1,:idland National Bank, Minneapolis, and the First National Bank, Perham, Minnesota. Approved. Dated June 5th, recommending approval of application of J.C.72Lqlor for permission to serve at the same time .with the Pennsylvania rational Bank and the Delaware County Trust Company, both of Chester, pt.. Lpproved. Dated June 6th, recommending approval of application of J. L. Williams for permission to serve at the same time with the Last Liver National Bank, row York City, and the Bank of Italy, San Francisco,Cal. Approved, providing iederal Reserve Lgent concurs. Dated June 6th, recommending disapproval of application of Frost for permission to serve at the same time with the Merchants Rational Bank and the Southern Trugt and Commerce Bank, both of San Diego, Cal. Application disapproved. Dated. Juno 5th, recommending cancellation of certificate authorizinp; W.C.Jonos to serve at the same time as director and officer of the East River rational Bank of —ea York, as officer of the Rational Park Bank of row York,and as director of the First rational -6Bank of Daytona, Florida, and the i:3suance in lieu thereof of a certificate authorizing him to serve at the sane time as director and officer of the 1:;ast iiiver rational Bank of rew York, as officer of the rational Park Bank of New York, and as local trustee of the Fiatbush Branch of the Irving Trust Company of New York. Lpproved. Dated June 9th,recommending appointment of Miss Demmu humate as key-punch operator in the Division of Reports and r6tatiatics at a salary of ;1,000 per annum, effective at such date as she reports for duty. Approved. Dated June 10th,recommending increase in salary of Bliss "Plaine, Messenger on Board's staff, from ::444() to 960 per annum, effective June 16th. Approved. Other business was presented and disposed of as follows: Memorandum by Assistant to Counsel, dated June 9th, advising of violations of the Clayton anti-trust act by the following directors of Yational banks: F. Folda, E. 7. Lewis, Lugene H. Darrach, F. Russell Beebe, C. D. Bevington, Eugene Murray, 1. C. ,allick, Patrick B. Llagrane, L. ,14.;eos, E. B. Malone, Charming Li. Wells, U. E. Hitt, J. J. Pomeroy. Voted that the Governor be authorized to sand to each such director form letter X-1379-A. The Uovernor submitted for approval, draft of letter dated June 10th to the Chairmen of all Federal Reserve banks, advising of the adoption by the Board of the following definition of the term "readily marketable staples" as used in that 13 of the Federal Reserve iLat which authorpart of ..;ection izes any member bank to accept drafts Lhich are secured at time of acceptance by warehouse receipt or other such document' conveying or securing title covering readily marketable staples; "A readily marketable staple may be defined as an article of commerce, agriculture or industry of such uses as to make it the subject of constant dealings in ready markets with such frequent quotations of prices as to make (a) the price easily and definitely ascertainable; and (b) the staple itself easy to realize upon by sale at any time". Approved. Letter dated June "7th from Deputy Governor Curtis of the Federal Reserve Bank of New York, suggesting that the Treasury Department accept blanket bonds given by Federal Reserve banks to cover losses on shipments of warrants or checks between Federal Reserve banks and the Treasury Department. ,trauss for report. Referred to Lis. '', Letter dated June 7th from the Governor of the Federal Reserve Bank of Atlanta, submitting request of the Chickamauga Trust Company, Chattanooga, Tennessee, that its acceptances be classed as eligible for discount by Federal Reserve banks. 471_ -10Voted that, in view, of the nature of the business done by the Chickamauga Trust Company and the non-liquid character of its assets, the Board does not approve as eligible for discount by federal Reserve banks, acceptances of the Chickamauga Trust Company. Letter dated June 7th from the Chairman of the Federal Reserve Bank of Chicago, in re action of the Board in advancing his salary, effective July 1, 1919. Referred to the Governor for reply. Telegram dated June 7th from the Chairman of the Federal Reserve Bank of 3an Francisco, requesting authority to announce in June or July that a fitting bonus will be paid at the end of the year, and authority to make payment at time of discharge of bonus at the rate paid in 1918 to employees those services may be dispensed with prior to the expiration of the calendar year because of the reduction of the volume of Government work done by the Bank. Approved. Memorandum by Mr. Hamlin dated June 4th, and memorandum by General Counsel dated June 3d, in re draft of incorporation of the American Cotton xport Financing Corporation. Ordered circulated. The Governor submitted for approval, draft of letter to the Chairmen of all federal Reserve banks prepared by him under date of June 10th, in re suggested reclassification of 472 -11reserve and central reserve cities. Approved as amended. Letter dated Ilay 13th from Assistant Federal Reserve • Agent Nevin at Cleveland, requesting ruling on the question of whether or not a 60 day certificate of deposit becomes a demand deposit after a lapse of 31 days. The Governor sub- mitted opinion of General Counsel dated June 7th, to the effect that the Board could not and its regulations or rulings in any way to permit of any other interpretation of the Act than that a time certificate of deposit becomes a demand deposit when it has less than 30 days to run. Approved. Mr. Liner stated that, in view of the liklihood that the people of the United States would have to do a great deal toward providing the basis for the financial and economic reconstruction of Europe, and, in view of the fact that the country should have the best information bearing upon the character and the extent of Europe's needs and the extent to which the United States could undertake the financing of them without prejudice to home requirements for capital investment, he thought it altogether proper that the Federal Reserve Board should in the emergency use its best endeavors to secure a thorough-going consideration of pending problems of -12foreign finance. '7ith tais thought in mind, Mr. Miller moved that the Governor be authorized to invite the Executive Committee of the Federal I.dvisory Council to meet with the Board on a convenient date, not later than June lJth, for the purpose of discussing the entire situation and how it can best be dealt with, more particularly to discuss the advisability of having a Committee on Financial Facilities for urope, national and representative in its character, so as to command the confidence of the entire public, to be composed to the extent of one-third of its membership, of representatives of industrial, agricultural and commercial interests, one-third of financial and banking interests, and ono-third of the public interest, the last named to be selected by the Federal Reserve Board. Referred to the Governor with power. On motion duly seconded it was voted that, in view of the order discontinuing the control of transactions in foreign exchange and the exportation of coin, bullion and currency, the Gold .2,xport Committee be discharged, and that the issuance of licenses for the export of coin, bullion and currency be placed under the supervision of the Executive Committee. 474 At 12:50 P L., the meeting z. journea. Asitant Secretary. roved.:
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