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Pursuant to a call issued by the Governor, a meeting of the Federal
aeserve Board was held in the office of the Federal deserve Board on
,alesday, 7,11xy 19, 1925 at 3:15 n.m.
• PENT: Mr. Mellon, Chairman
Governor Crissin-or
•
r. Platt
4
Mr. Hamlin
Miller
Mr. James
Mr. Cunnin(e:ham
Mr. 2,ddy, Secretary
) Federal Aeserve Ba_k
dover_lor Streng
it1,33:
of New York
Deputy Jever-or Harrison)
:. Stewart, Director of the Division of _I:sears:1
and Statistics.
Mr. Winston, Under Secretary of the Treasury.
The Chairman called the meeting to order, and
Governor Orissinmr
stated that the purpose of the meotincr was to ,T.ive consideration to a rePort made to the Board under date ef May 1, 1925, by the Governor of the
• Peaoral Aoderve Bank of New York an the arrane'ement, made in pursuance of
44 authorization given by the Federal Reserve Board on January 10, 1925,
htvreon the Federal Reserve Bank of New York and the Bank of Encaand for
tho
extension of a revolving credit of „;200,000,000 to the. latter institu-
tion. The Governor stated that
Of the
the report had been read by dach msmbor
Federal deser.ve Board prior to this meeting, and that he had pre-
1)4rod the following resolution which he submitted and moved be adopted:
or
New York, in
".7112AS, the Federal deserve Bank
pursuance of the authorization of the Federal deserve Board
of January 10, 1925, which by direction of the Board was aot
at that time made a matter of record, has entered into an
agreer.e.it with the Bank of J-k-,land, as evidenced by the letter
of M. O. Norman for the Bank of L1171and dated ipri1 S, 1925,
and the letter of BenjAin Strong for the Federal deserve
ri1 20, 1925.
Bank of New Yor':.- dated
21Ll't1120,11], BL; 12 ILZOLV:;), that the action of the Federal
Aeserve Board of January 10, 1925, is hereby confirmed and made
a matter of record, and these letters are ordered spread upon
the minutes of the Board.."
-2_
5/19/25
At the reTlest of 2..1".
1att,
overnor Stron
.eondueti by his bank with the Ban-z: of Ilo.J71and durin
outlined the ne7otiations
the period from
Jarraary 1 0, 1 925, to date, followin.c7 vfilich the Chairman called for a vote
• on tho resolution.
ilatt,
Junain7,ham, James rInd - ellon voted in the
uffirliative, and Jr. 1.1111 Jr stated that he
wished to be recorded as not votino." and to
be :iven the 2- r'Lvi1ese of inserties. in the
records of the 3oar1 a statement of his reasons
for not desirin: to vote. 2ho hedr assented
to Dr. Yliller's reuest.
Socrotar's 1;ote.
At the mectinE; of the i;oard of 7Lith those
4r0 tho minutes, Jr. idillar maJe no statement of his reasons for not Vote
04
the resolution offered %, ;:ovornor Orissincr nor did ha 2,articiate
.
in
tho discussion of the,uvranament nlade to =tend the credit to the Bank of
.4.41and.
On idaY 22nd ho filed with no the fo11owinr7 wTitten statement
jth
th° rocuest tht it be inserted in these minutes;
1:1111er st'-ted in explanation of his recuest to be recorded Liz 'not votinct that while he
a2-21.oved o the purpose vi:lich had led the Federal
2.oserve Bank of i;c-,.7 York to enter into a wor:dus.
connection
urran:er,mt with the 3a:11: oZ
free
-old
of
a
market
rc,ostablish'1_nt
in
with the
of
the
particular
approve
not
form
could
London, he
of credit arran-e.Lent ,..uthorized Ix; the Board and
ras not, therefore, cLle to vote for the approval
of the resolution."
2The Secretary than reed a teleacam, addressed to him under data of
4'c'Y 19, 1995, by J. T;,. ideintosh, Colaptruller of the Uu-crenoy, vLich tale ram
7711c; ordered srlroad on the Pinutes of the rieetin, as follows:
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114.4
5/19/25
The
of .]n-land w -Jila have the ri;lit:
Jredit b, ,:ithto utilize this
drawinc' -old fo: e::)ort of earmark, or by nA',:in,)aumints in aollars by draft or cable on the Federal
eeor7can: - arid
to live ih use at any time or times within
the two y),?_r 2c,riod all or any art of the ,200,D00,000
with liberty to re2ay anl, redraw in oart or in whole
within the two year period.
of this ,evolv(4) The equivalent of all or :a-1.7 ,Jart
in7 Jredit whLfc, say rmxtIlle to time be in use throur'ho-szt he two year p:riod shafl be maintailled at the current
rate or c.- 1.31-: =hanrc in an account in pouu3s sterlinrto the credit of ne Federal ..eserve 3ank on the books
4.
of the Bank of -.1=-11
(5) The rterlin- balance of the Federal oservo
on the 1.00:1.3 of the 3311k of 2.n7land created in the manner
aescribed in 1.)ara;---ra h (4) may be 0ended, dqrin- the
life of the redit, only at such times and in such arounts
as may be arran;-ed between the Federal -,eserve Bank and
in the parchase, for '.cc-,11.nt of the
the ianTI: of
Federal eserve 2auT]:, of elifible sterlin co inercial bills
ruarantced by the _.;aak of .,.;11-land.
I shall be crlacl to know if the a'..)ove s-,zg7estions weuld
of illterest
meet with your a„Tro-rul, end, if 20,
would be ch,,r7ed OA the al-I.ok;nts from time to time In use
under this rovolv ' credit.
(3)
an,
Bear Lir. ..;ove,:nor,
I'oars most fait"hrllly,
BiJiaJtronc3,
_Jver,lor, Federal .deservo Bank of 1;e?; York."
IfFederal
of Levi York,
ru
20, 1.225
Jovernor:
in
advise
it
ril 8, 1975, i 3rve to
o ‘,:yir letter of
be convenient for the 2edo,,:al .Leserve
7:1:7
4
CO,
'
04
5/19/25
-5-
York to 2rovide ;Ill to v200,000,000 rold oo_t of
Barfc of
a total credit of 1/300,000,000, subject to the five conditions
enumerated in your letter.
Interest will be har=ad. in apilars by the federal
pon the Lmounts outstaadin:: from time
serve Bank of i;ew
to time at one 1;er cont. above it s officl rate of disc cant
connercial paper, with a LlilliMUM of :four pe.2
flat' ninety
a
cent. eal
maxiranra of cin jr cent., except that 'whenever
our discount rate shLal be above si:: per cent. the interest
charred in be at the discount rate. iuly discount earned
the elirible storlin.L; co=lercial 1.dils shall be applied
reiuction of ,s;.-i,s,.21 interest.irhe L....aount of discount, cal of
eolated at the cable rate of the day, an.' he not
Interest earned, shall be payable qua:..ter1;,- in dollars at
Federal lieserve Lanlz of i;ew York, el the entire :,-,mo-vit
of the revolvins credit outstandia' at the ter=inf,tion of the
two year -,-)eriod shall lrze.-aise be repayable t the 2edel.al
cservc Lcifc of igew Yon:..c:old or its equivalent in 'dollars.
- rove
I tras t that our acceptance of your proposal 77i11 p
to be an effective aid in ie ceneral restoration of :01,1 ayiaei:t thr a iout the world.
Pal th..'ully yours,
(;Lr.:!ned)
3.-:-or.
llorrnan,
;1.1rIntazu.
.
Governor, The Bank of17,..-na.,1
.4„).drovod;
Ohalano
@FedFRASER