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A meting of the federal Reserve Board was held in the office of the Board on Tuesday, October 4, 1921, at 11:15 a.m. PRESENT: Governor Harding Mr. Platt Mr. Hamlin Mr. Miller Mr. Mit chell Mr. Hoxton, Secretary. PRENT ALSO: Mr. G. L. Harrison, Deputy Governor, Federal Reserve Bank of New York. Minutes of the meeting of the Board held September 30th were rea 'd and on motion approved. There followed "an info rmal di scus sion between the members of the .8°ard and Mr. Harrison of the salary policies of the Federal Reserve Bazk Of New York with reference to certain inquiries made to that Bank bY the Congressional Joint Corrmission on Agricultural Inquiry. At 1:10 p.m. the meeting adjourned, and a recess was taken until 2:30 p.m. Pursuant to the terms of adjournment, the Board reas semb led et 2:3c) p.m. PRESENT: Governor Harding Mr. Platt Mr. Hamlin Mr. Miller Mr. Mitchell Mr. Hoxton, Secretary. eraa The GovErnor reported the reserve positions of the several Fedl'aserve banks as at close of business September 30th and October let, and the status of rediscounts between the Federal Reserve Banks as "the same dates. The Governor reported rediscount transactions, member bank pro11118801'Y not es secured. by Government obligations, rate pet e Sept 30 Sept. 30 Oct. I Oct. 3 Oct. 3 Bank rediscounting Richmond Dallas Atlanta Richmond Dal las Amount With New York Boston Cleveland NEW York Bo sten 5,000,000 1,500,000 1,000,000 5,000,000 2,000,000 3,000,000 as follows: Maturities 7-15 days 11-15 " 1-90 dys.(Com) 11-15 1-90 dys.(Com) 11-15 " Governor Harding stated that the special order business won til9 docket was the consideration of the proposed classification as aticlatural paper of the parer of Fruit Growers Marketing Associations. Upon the representation of Mr. Mitchell that he had not examined the documents in connection with this question, action was postponed in order to provide Mr. Mitchell an opportunity for such examination. Memorandum dated October 4th, from the Secretary of the Board, liecillesting authority to supply certain omissions in the minutes of the d of September 21, 1916 and August 26, 1920, by attaching explanIlt°1'Y ntmoranda to the minutes of those dates. Approved. Memorandum dated ()etober 1st, from the Secretary of the Board, st 1 ng authority to install a method of preserving the records of the I°°ard by which all letters and documaits on which Board action b eon t3.ken and vthich are referred to in t1 minutes will be kept se r t3gated in the general files during the current year, and bound at -3- the end- of each year as a supplementary volume to the regular minutes. Approved. Memorandum dated October 3rd, from the the Assistant secretary of BO .ã, requesting authority, in behalf of the Board's Sub -committee °II Staff, to make certain modifications in the present method of grading and rating nplows. Appro. ved. Letter dated October 1st, from the Railway Loan Advisory Cornittee of the Federal Reserve Board, reconuronding approval of the form °1)ligat ion submitted by the Boston and Maine Railroad for a loan of O9 000 under the provisions of Section 210 of the Transportation 4ct' 19209 as amenied. Approved, Mr. Hamlin not voting. Letter dated October 4th, from the Railway Lo aa Advisory ComInIttee of the Federal " eserve Board, recommending approval of the form -,-gat ion submitted by the Western Maryland Railway Company for a ' 1/1 six parts, of e,;1,000,000, the carrier electing at this time to °L-lte over the first part of the loan amounting to ;150,000, under the Plvvisions of Section 210 of the Transportation Act, 1920, as amend- Approved. Letter dated September 27th, from the Chairman of the Federal -4've Bank of San Francisco, advising of an increase in salary, from 133on to A'3600, for Mr. A. B. Mason, recently transferred from the 1)°111e.n.d Branch to the Examination Department of ths Federal Reserve 13811k Of San Francisco. Approved. Letter dated September 27th, from the Chairman of the Federa l Reserve Bank of San Francisco, advising that Mr. W. H. High has been enP1°Yed by the Federal Reserve Bark of San Franci sco, at a salary of ' ' f 240o Per annvn. Approved. Letter dated September 27th, from the Chairman of the Federal eserve Bank of San Francisco, advising of the appointment of Mr. J.P. as Assistant Auditor at the Portland Branch, effective October 10, 19219 without charEe in his presen compensation t . No ted. Letter dated September 28th, fromths Governor of the Federal ' 70 Beak of New York, in reply to the Board's letter X-3207, of %tenter 20, 1921, requesting the Federal reserve banks to secure rePorts of rates of interest charged by member banks to their customers (311 all Paper offered for discount at the Federal reserve banks. Upon motion, referred to Messrs. Platt and Mitchell as a special committee to consider the /natter and. report to the Federal Reserve Board tomorrow. Dially Of ta4, Application dated September 27th, from the Equitable Trust ComNew York for permission to accept bills of exchange drawn on ' °aIlk by banks or ba.nkers in the respective countries designated bY the Federal Reserve Board, for the purpose of creating dollar exchange. Appro ved. Telegram dated October 4th, from the Chairman of the Federal Beserve Bank of Minneapolis, advising that the Board of Directors of that Bank had, subject to the review and determination of the Federal Reserve 13°41 ' 111 fixed a rate of 6% on all paper of all maturities offered for cliset'unt, effective October 5th. Appro ved. Letter dated October 3rd, from the Chairman of the Federal Reserve Bank of Philadelphia, asking to be excused from exhibiting to his Boari, Of Directors the circular letter addressed. to him by Governor requiring him to refer to his Board of Directors for concurrence all ratters perta.ining to salary adjustments of the enployes of tl-B Reserve Agents Department. Governor Harding was requested to advise Mr. Austin that the Board does not consider it material that he should exhibit the letter referred to to his Board of Directors, but that he will be expected to act in accordance with the terms of said letter. Draft of telegram addressed by Governor Harding to the Chairman or thothat Federal -deserve Bank of Chicago (in answer to an inquiry) advising all open mirket purchases of acceptances, whether from dealers or 89 must not be purchased at a lower rate than the minimum rate for anci, 4' Puzchases established by the Board of Directors of the Federal Re4)1% 'dank of Chicago and approved by the Federal Reserve Board. Apprfo ved. -6- Telegram dated October 1st, from the Chairman of the Federal 'Reserve Bank of Philadelphia, stating that the Board of Directors of that 13a4k had, subject to the review and. determination of the Federal Reserve 13°ard• established a 4% minimum rate on open market purchases of bankers' cePtanc es Approved. Governor Harding submitted to the Board several letters and talefrom the Chairman of the Federal Reserve Bank of Atlanta, request that the Board approve for that Bank a minimum rate of 4'7 for open nIst'ket Purchases of bankers' acceptances. Upon motion, it was voted that no change should be made in the open market rate for the Federal Reserve Bank of Atlanta at this time. Letter dated September 30th, from the Chairman of the Federal liese 6 e Bank of St.Louis, requesting authority to set aside the sum of for the purpose of making loans to needy aid worthy employes, the 841c1 illnd to be administered by the Governor and the Chairman of the toara. Approved. Governor Harding submitted to the Board the carbon copy of a letter addressed by him to the Chairman of the Federal Reserve Bank of 411as' in reply to a letter of September 28th, written by Judge RamseY• a.1.4 eXPressin; his views in the matter of selection of certain senior °I‘ticers fcr that Bank. ...T.:1 I -7- Upon motion, the Board concurred. in the attitude expressed by Governor Harding in his letter, and Governor Harding was reed to telegraph Jilige Ramsey to that effect. Governor Harding advised. the Board that the Directors of the l'ecieral Reserve Bank of Atlanta had. been in the habit of holding some Of their napalar meetings at the offices of the several branches of that -8.111c, and supgested that the Board advise the Federal Reserve 13allit Of Atlanta that the meetings of the Board of Directors of that illstitution should be held at the head office, and that if for any Pellicular reason it is desired to hold. a meeting at some other place, the aPproval of the Federal Reserve Board. covering its expense account 811°111cl be secured in advance. Upon motion, it was so ordered. rir. Hamlin submitted to the Board a letter prepared for his 81gri at — e. addressed to the President of the First National Bank of Utica, 1Tevv Y.(3r1t, setting forth the opinion of the Board with reference to the citla sifloation ani elig).bility for discount of the paper of the Dairyketis League cooperative Association. Apir oved. Governor Harding stated that the next order of business was the hea rt rig to show cause why the Farmers Equity Bank, Brooksville, Kentucky, sholad not be required to surrender its stock in the Federal Reserve Bank Of Cleveland and to forfeit all rights and privileges of membership the Federal Reserve System. Inasmuch as no one appeared in behalf (32 that Farners Equity Bank, Brooksville, Ky., that Bank having by resol011 Of its Board of Directors, dated September 29, 1921, admitted its rentlre to comply with the provisions of Section 9 of the Federal Reserve Act 8ald the resolution of the Federal Reserve Board made pursuant thereto, 8421 having waived its right to a hearing before the Federal Reserve Board Izilier the terms of Section 9 of the Federal Reserve Act, upon motion, the f°11°Nving resolution was unanimously adopted: WHEREAS, it appears to the Federal Reserve Board, from ,, 44 co nsideration of the evidence and information received by it, tulat the Farmers Equity Bank, Brooksville, Kentucky, has failed s() comply with the provisions of Section 9 of the Federal Reerve Act, and that said bank has failed to comply with the „ " jglalations of the Federal Reserve Board Trade pursuant to the Provisions of that section, NOW, THEREFORE, BE IT RESOLVED, that the Federal Reserve t icoard require and direct the Farmers Equity Bank, Brooksville, Ae r,lituckY, under the terms of Section 9 of the Federal Reserve ' s 4 as amended by the Act of June 21, 1917, to surrender its al t"k in the Federal Reserve Bank of Cleveland, and to forfeit 1 right s and pri vii eges of memb er sh ip as of the dat e on which i°t ioe of this action on the part of the Federal Reserve Board 8 received by said Bank. p_.,..00/3,1ITTEE NO. 1: 1)atea ktted Oct.1st, Recommending changes in stock at Federal reserve banks, as set forth in the auxiliary minute book as of this date. Approved. 3d, Recollawnding action on applications for admission of state banks, subject to the conditions stated in the individual reports attached to the applications, as set forth in the auxiliary minute book as of this date. Approved. 4-1 )t) -9- At 4:30 p.m. the meeting adjourned. Secretary.
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