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a regular meeting of the Federal Reserve Board held in the office of the Board at 11 A. L. on Wednesday, October 25, 1916, PRE3NT: Governor Harding, presiding, Lr. Delano, Thrburg, r.ecretary. The minutes of the meeting of the Executive Committee on October 23rd, and the meetings of the Board on October 25 and 24 were read and aeprovedYr. presented to the Board a letter from the Park Bank of I:OW York with reference to the question of counting uncollected items in the hands of Federal Reserve banks reserve, and called attention to the fact that the present practice is not uniform, and it would be desirable to make it so. After brief discusion the matter was referred to Counsel for report. The question or consideration of the annual report having been brought up, it was, on motion, voted to begin the formal consideration of it by the Board on ovember 15th. The Secretor:: of the "oard presented certain me:noranda relating to a counterfeit note recently detected at the Federal Reserve Bank of Minneapolis. Atten- tion was called to the fact that a photographic enlargement of the bad note is to be sent to all Federal Reserve banks, and it was agreed that Governor.,old be asked to cooperate with secret service efforts to suppress the note. The application of the Bank of Iota, LouisianL— for admission to the Federal :Eeserve system, duly recommended by the Committee on Member and state Banks, ;:as on motion approved, and the bank ordered admitted. The Governor of the Board presented . a letter from the federal :.eserve Bank of Cleveland detailing fully the situation as to certain warrants of the city of Toledo, recently acquired by that Bank. An opinion of Counsel with reference to various points relating to member banks' acceptances recently raised in letters from such banks, was presented, and on motion referred to the Committee on law. A letter from Mr. Percy S. Straus of row York, asking for a hearing with reference to his status as Lprivate banker having been presented, it was on motion voted to grant the hearing at a date to be fixed by the Governor of the Board. The secretary 'of tLe Board having presented a letter from Federal heserve Agent Perrin as to the question of acceptance of deposits from non-meniber banks, the matter was on motion referred to Counsel. A report prepared by Lr. arburg with reference to the status of certain Eassachusetts warrants, the question at issue being the purchase of those maturing before the penalty date, was referred to the 1!;xecutive Committee with power to instruct 1r. Broderick as to his treatment of the warrants. The secretary of the Board having presented a report of the ",-,cecutive ComJittee which had Leen directed to consider the question of distributing to reserve lanhs the circular of the Comptroller of the Currency regarding amendments to the Federal Reserve Act, the report was on motion referred back to the Lxecutive Committee. Thu 11:Lecutive Committee reported that the following teleram had been sent to all Federal Eeserve agents by way of meetinc assertions in a circular sent out by curtain New York Trust Companies, and filed with the Board, (Vile No. 334.1) "Board is advised that an acceptance credit aproximating one hundred million dollars, drawn on American banks and trust companies, is about to be concluded, on ninety day drafts, subject to five renewals, the accepting banks, committing themselves to advance the money to the foreign borrowers at five and one-half per cent per annum, plus acceptance commission of one-fourth percent for each three months. In view of widely circulated press statements that these acceptances will be eligible for rediscount or purchase by Federal Reserve banks, Beard deems it its duty to point out that banking prudence and obligations toward general commercial interests of the country, require that Federal Reserve banks should not acquire acceptances of this character beyond a conservative amount. This view is consistent with the Board's policy in the past, txil while it wishes, through all legitimate means, to promote the development of the American acceptance market and to further the growth of our export trade, and while it wishes to avoid any attitude of interference with the powers of member banks in this respect, Board feels nevertheless, that it should be clear.ly understood that these acceptances which represent obligations for cash advances aggregating a very large amount, by the acceptors for eighteen months, cannot properly be regarded as paper selfliquidating within a period of ninety days. If offered in excessive amounts, Federal Reserve banks may be obliged to discriminate against or to exclude entirely acceptances of this character. Board feels that prospective acceptors should have a clear understanding of this. (Signed) HARDING, Governor." On motion at l2 o'clock noon the Board adjourned until Zriday, October 47th, subject to earlier call of the chair if necessary. crAg„i ecretary.
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