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233 A meeting of the Federal Reserve Board was held in the office of the Federal Reserve Board on Tuesday, October 30, 1928 at 11:30 a.m. PRESENT: Governor Young Mr. Platt Mr. Hamlin Yr. Miller Mr. James Mr. Cunningham Mr. McIntosh Mr. Eddy, Secretary Mr. McClelland, itsst. Secretary The minutes of the meeting of the Federal Reserve Board held on October 26th were read and approved. Telegram dated October 26th from the Chairman of the Federal Reserve Beam- of Chicago, advising that the Board of Directors at its meeting on that date made no change in the bank's existing schedule of rates of discount and Parchasee Without objection, noted. with approval. Memorandum dated October jOth from the Secretary's office calling attention to the fact that the temporary appointment of Charles G. Trescott as ttlaseenger expires at the close of business November 3, 1928. Upon motion, the appointment was made permanent at a salary of :„;900 per annum. Report of Executive Committee on letter dated October 29th from the °°111Ptroller of the Currency, recommending approval of a salary of ,,.5,000 per en4L1M for National Bank Examiner Henry R. Tull, assigned to the Fourth Federal le3erve District; the Board's Committee also recommending approval. Approved. Report of Committee on Salaries and Expenditures on letter dated °otob °I '26th from the Secretary of the Federal Reserve Bank of Chicago, trans- 234 10/30/28 kitting _2_ list of employees for whom the directors of that bank authorized leaves of absence with pay, on account of illness, during the period September 28th to October 25th, where the total of such absences since January 1, 1928 has exceeded thirty days; the Board's Committee recommending approval of the salary payMonts involved. Approved. Memorandum dated October 26th from the Director of the Division of Re- oh and Statistics, approved by the Committee on Research and Statistics, referring to the instructions of the Board at its meeting on October 11th and "mending that the table in the Federal Reserve Bulletin showing sales of tell order houses carry the following footnote, with reference both from the title Of the table and from the figures - "It is to be noted that the two largest of the reporting mail order houses have been establishing throughout the oolta trY during recent years an increasing number of branch stores in which sales 4116 Made over the counter. Changes in the volume of sales by these firms, therefore 'no longer measure changes in sales through the mail". Upon motion, the recommendation was approved. The Board than considered the proposed letter to the President of the Pecia— "g41 Advisory Council, submitted by Er. Miller at the meeting on October 26th, reiltze sting consideration at the next meeting of the council of the question of the relation of the Federal Reserve System and the call loan market. A general and detailed, discussion ensued during which several changes in the proposed letter were suggested by members of the Board and accepted by Mr. Miller. Mr. James, during the course of the discussion, requested to be recorded as objecting to consideration of the question referred to at the present time. Q 4t-o k-F 10/30/28 -3- At the conclusion of the discussion, it was voted that copies of the letter, in the following amended form, be furnished to each member of the Board and that it be brought up for further consideration at the meeting tomorrow. "Credit developments and money market movements during the last year have been the subject of widespread public interest. Particular attention has been drawn to the behavior of the call loan market and call loan rates; and the connection and responsibility of the Federal Reserve System in the situation. The present seems to afford a peculiarly opportune time for a thorough-going consideration by the Council of these matters and the Board therefore proposes as a subject for consideration at the next conference of the Federal Advisory Council with the Board the topic 'The relation of the Federal Reserve System and the call loan market.' In this connection, it is further suggested that the following subjects be given careful consideration: (1) The relation of Federal reserve discount rates and call loan rates. (2) The effect of open market operations and buying rates of the Federal Reserve System on the call loan market. (3) The relation of call loan rates to other money rates. (4) The proper function and use to be made of banking investments in call loans. (5) Wimt responsibility in the opinion of the Council has the Federal Reserve System in the matter of the call loan market and by what methods of policy, control, maneagement or operation may that responsibility be effectiv the free ly discharged with a minimum of interference with credit?" al commerci or al industri play of A general discussion then ensued with respect to the Committee report, subrIlittea at the meeting on October 26th, of a sugested revision of the Open put briestr:,ent procedure of the Federal Reserve System, but the matter was (1161% without action until the meeting of the Board on Thursday. Lr. Young, economist Platt then reported an official conversation with 10/30/28 °f the -4- State Department, during which he was advised that the United States government will be represented at a conference on economic statistics to be held under the auspices of the League of i:ations on :covember 26, 1928, and that the representative of the government, 1:ir. Durand of the Department of Comm --erce, would like to be accompanied by some representative of the Board's Division of Research and Statistics, preferably :C.r. 'doodlief 2homas, who has charge of the Board's domestic business statistics. He also reported that r. Young expressed the opinion that the Department of State will have no ' bjection to a representative of the Board attending the Conference. ?he Governor presented a memorandum on the subject addressed to him by the Director of the Division of Aesearch and Statistics, referring to Previous correspondence between the Board and the Department of State, and sUbmit ,_ State, inquiring tLug draft of a proposed letter to the Secretary of member of the f°111nally whether it is agreeable to the Department to have a 3"rd'e staff attend the conference. idter discussion, 1r.r. Hamlin moved that the Governor of the Board be given power to act in the matter, after consultation and agreement with the Chairman'of the Board. motion, :r. James moved, as a substitute for Mr. Hamlin's representa a that Board Reserve that it is sense of the Feieral . Conference the to sent be tive of the Board should not was LIr. James' substitute motion being put by the Chair follows: lost, the members voting as Mr. Miller, "aye" Mr. James, "aye" Yr. Cunningham, "aye" Governor Young, "no" Yr. Platt, "no" Mr. Hamlin, "no" Yr. McIntosh, "no" 10/30/28 -5-. Mr. Hamlin's original motion was then it to a vote and carried, Messrs. James and Cunningham not voting. Ur, Hamlin then requested that the Board's Law Committee be authorized to go to New York for the purpose of conferring with the Federal Reserve Agent th"e with respect to a proper definition of the term "public interest" withthe meaning of the recent amendment to the Clayton Upon motion, the authority requested w The meeting adjourned at 1:00 p.m. Approved: ct. granted.
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