Full text of Minutes of the Board of Governors of the Federal Reserve System : Meeting Minutes, March 8, 1921, Volume 8, Part 1

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A. meeting of the Federal Reserve Board was held in the
office of the Bom.d on Tuesday, March 0, 1921, at 11:10 a.m.
PRMITT.: Governor Harding
Mr. Platt
Mr. Yana in
Mr. Miller
Mr. I-Toxton, Secretary.
Minutes of the meeting of the Bora-a held 77arch 3d were read
and on motion, approved.
The Governor reeorted the reserve eositions of the several
Federal Reserve banks as at close of business March 4th md 5th,
aril the status of rediscounts between the Federal Reserve banks as
Of the same dates.
The governor reported rediscount transactions, member bank
prondssory notes, secured. by Government obligations, rate 7%, as
follows:
Dat e
I.:arch 3

13a.n3c /tealscount i22.11_.
Dallas

With
Clevelaid

Amount

Maturities

'6,000,000

11-15 days

Governor Hardin; reported_ that Mr. George L. Harrison, DePutY Governor of the Federal -Reserve Bank of Thy/ York, had returned
to him the correspondeite from the Com)tro 11 cr of the Currency re ferred to in the minutes of the meeting of the Board on March 3d.
Letter dated March 5th, from the Secretary of the Federal
ilese2"ve Bank of Cleveland, reolnsting approval of the action of the
Beard of Directors of that bank in the natter of a bonus upon a
l'eauced scale for the months of January, February and March, 1921.




App/eved.

-2-

Letter dated :1'rell 4th, fron-I the Chz).innan of the 7edera1
.1- eserve TSk of (.115.0

estin- t'll2t in oilier to facilitate

cooPerati on between - at lonal Pnk Ixminors and 2ederal 7,eserve
Bcrtl:uiers t-ilat the 1:7-tter 1,0 oorlmissioned b:7 t1e
Of the Currenc7 as -1:t lo nal Sank

nerilAr0 ller

1-Kumi210rs.

-.),ef erred to 7over nor 4--,r(lin. with power.
Let ter d too
-I-eservo

reb 5th, from the Mrirmaa of the 17‘eoer- 1

sikof nhicarp, advisi 21' the mo-rd t.t the Operatin- De-

.Partment of that
spec ial

is ,,Lrocee,An,.; with the or-anization ,of
t to be eharr,ed with the dut7 of su)ervi s

'le

Operations of over extended and weLic member b-enics.
Referred to Gov orn Or Ho!din:7 for rep1.7.
Draft of letter prepared by the office of the 'lencral counsel and addressed to the Chairman of the 1?ederal Resc rye Bank of
San Francisco, setting forth the position .t,11- ca by the Federal reserve Roard with referenc e to aiplications made by rational .T)
. ,-.-:fks *
f°1" Permission to subscribe to corpor,?tions orrJanized under the
.]d -;e :et.
q.,ro ved.
:'r. 'latt submitted to the, 3:oard a n-port of the Ixeent ive
Commit tee

sup)].emen tar -..- to its report of _;'ebruary 28. 1921.
Aopro ved. and ordered filed v7i t 1, or ir7inal xnport

'..fter some discussion ioltive to the




c16 holdin-s of the

Federal -Reserve System,

Miller moved, as follows; "thct beginning

on or about April 1, 1921, the published statement of condition of
each Federal Reserve balk and. the published consolidated statement
Of condition of the twelve Reserve banks shall show, for the system
as a whole (arxi for each of the Reserve banks its computed pre rata),
all

rold held in the Federal Reserve System in excess of '
.2,000,000,-

000 of -old, not as gold held in reserves, but

gold, deposited with

Federal Reserve agents for the reduction of liability on 'Federal
Reserve notes; th

the form of published statement issued. be re-

v ised accordingly, and that the i)ro rata of the [-old in excess of
)2,000,000,000 shall be computed for,eacli of the Federal Reserve
ban.-ks by the Board's Statistician; and that the revised form of
statement no longer shm! the reserves against combined deposit and.
note 1lab

it y"•
Upon motion, ordered laid uI)on the table.

With reference to the volume of Federal Reserve notes in circlaation in foreign countries, 1:r. ITnnlin moved that Governor
"e 1.ki with the several Federal Reserve banks the matter of securlflg re2)orts from time to time from member and. non-member banks, show; the volume of unfit Federal Reserve notes received. for redemption
'k
foreign countries; this incraiiy to be mde viit31 especial reference to those banks in. this country which do a foreign business.




• 195
-4-

Telegram a 1ti letter dated 1.13rch 3d, 1.`rom the Chairman of
the Federal. Reserve Bank of St.Louis, stating that the Board of Directors of that bank had, voted against raising the rate won loans
secured by Liberty Bonds and Victory TTotes from 5-I L"' to 6.
moved that the Federal Reserve Board, in the exercise of its pov.er
0±' review and determination, fix a 6c,4 rate

on strh loans.

Ordered laid uoon the table pending further
communication on the subect with the Federal Reserve
Bank of St.Louis.
Memo iandum dated 1:3rch 3d, from Mr. Ja,cobon with regard to
the request of Mr. Sheeley, of the 7ational Credit pens Association,
for re,orts of cold reserves, note circulation, etc.
eyed.
Letter dated Earch 1st, from the Chainnan of the Federal Re13 *.kre Bank of Philadelphia, announcing that that bank on Octob-er 6,
1920, had advanced the rate of discount for indorsed bankers acceptances from 5: to 6'; for all mnturities, and rerryettinr, that the
/natter of the Board's approval for this change had been overlooked.
The rate of 6, as above, was, uoon motion,
aparoved, to be retroactive to October 6, 1920.
Letter dated March 2d, from Mr.

submitting his

'
l esi7;nation as a member of the Railway Loan Advisory Committee of
the "?ederol Reserve Board.
Accepted.
Letter

()a tea

7arch. 3d, from the Chairman of the Federal Re-

serve Bank of Richmond, advisin'; of the appointmont of 1.7r. ¶7. Reed.




196
-5-

Seal to the Examining Deinrtront of that Bank, at an initial
salary
Of

2,760 per annum.
Approved.
Letter dated T'arch 4-th, from the Vice President of the 7Tecc-

chznits 7ationni Bank of Richmond, sumestin,c.; that for the benefit of
member banks the Federal Reserve System establish its own secret service organization.
Upon motion, referred as a topic for the next
Governors' Conference.
Telegram that

I.7arch 5th, from the (Maim= of the Federal

Reserve Bank of Sm. Francisco, with reference to the issuance to
the public of the monthly rL.ports of business conditio
n.
Referred to .Governor Harding and Vice Governor
71a.tt with powor.
Letter dated I-arch 7th, from the Southern Realty Corporation,
CivinL, the Board fonnal notice to vacate the space now occupied by
it in the Southern Building
.
Referred. to Governor Harding with pomr.
Letter dated I--rch 3d

fran the Railway Loan Advisory Corn

mittee, reouzstinr; anproval of a form of loan, in the amount of

1,-

173,500, to be inade to the seaboard Air Line Railway. wider no nrovisions of Section 210 of the Transportation Act, 1920, as amanded.
Ratified, having been o...;,proved by mumbers of the
Board on Farch 7th.
Letter dated .7- rch 3d, from 1,:r. ITerret P. Caskey, Section
SlaDervisor, Division of Reports (Statistics, tendering his resig-




-6-

nation, to tz-ct

effect at the close of busi,less .A)ril 9, 1321.

:_ccet ed.
Letter dated -arch 2d, from the Controller of the currency, anno -onc in,: the 'L,Il.aointment of 7r. Cl2n6e

as

Ixaniner, assigned to assist the Chief htional

!Oral

ho - 1- _-

erv 'rorl: City, and requesting the Board's a,)nrcval of a
salary of .'!6,000 per annum.

•

Approved.
• Adplicat ion dated 7.'arch 3, 1921! of the Liberty 1Tationa
'Bank, tray! Yen: City (if anivale:a convertod to the ), I,iberty Lank of
the City o f -cv York, for admission to the Federal 'reserve System;
for x.rmission to accent no to 100: of its capital; and for TrmisSion to acceit drfts d.ravrn u-)on it by be nks or bankers

• certajn

ciesited foreign countries, for the purpose of furnisliin- dollar
exchan!-_,-e.
The above .havin: been anpro \rod by four members
of the Board on Larch 5th, was upon motion, duly
rat ifled.

OF

CCIIMITT22 :TO. 1:

Dated :.7arcla 7th, Reconmendin7 chanT:es in stock at Federal Reserve
Banks as set forth in the auxiliary minute book
as of this date.
Appr oved.
Dated ',arch 1st, Recommndinc approval of applications for fidu2nd, ciary powers as set forth in the auxiliary minut e book as of this date.
Apnr eyed.
Dated larch 5th, Recommendin7 approval of admission of state institutions, subject to the individual reoorts
attached to mch application, as set forth in
the auxiliary minute book as of this date.
Aonroved.




-7-

Dated :'arch 8th, ':ecorrmendin-: that authority be given to certain
Thtional banks to Purchase stock in corporations
ormniz ed under th e -43dge Act, as set forth in
the awdliary minute book as of this date.
pprov ed.
Dated 17arch 2nd, Reconnending
appmvai of the applicct Ion of I•r.
W. A. Bonynge to servo at the same time as
President and director of the Commercial r-ational Bait.. of Los Angeles, Cal., alfl as director
of the Golden State
tional Bank, Anaheim, Cal.
•
Ap-oroved.
Dated T!lar ch 2nd, Becoamendin. apnroval of the an plicat i on of 7'r.
L. L. Harmon to serve at the sane tire as director of the ''hoonix 7Tati onal Bank,- -)hoe nix, Ariz.,
and. as director of the Tanpe rational Bank, Tempe,
An zona.
A,)-:)roved.

At 1:05 p.m. the reetin,
; adjourned.




Sear tary.