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152 A meeting of the Federal Reserve Board. was held in the office of the Pederal Reserve Board on Friday, September 10, 1926 at 11:00 o'clock aeM• PRESENT: Governor Crissinger Mr. Platt Mr. Hamlin Mr. Miller Mr. James Mr. Glunninghan Mr. McIntosh Mr. Noell, Asst. Secretary Mr. McClelland, Asst. Secretary The Boari sat with the Open Market Investment Committee, meeting here 14Xer previous arrangement with the Boa xd. There were present Governors Rarding, Norris and. McDougal and Deputy Governors Case and. Zurlinden, Members °t the Open Market Investment Committee, Mr. Matteson, Secretary of the ComIllitteet Mr. Goldenweiser, Chief of the Board's Division of Research and. Statistics and. Mr. Winston, Undersecretary of the Treasury. Mr. Case, Acting Chairman of the Committee read his report and the Members of the Board discussed. with the =embers of the Committee the statetaetuts and. recommendations contained therein. The Secretary of the Open .14aritet Investment Committee made a record. of this meeting which was comPlated at 12:55 p.m. whereupon all parties except the members of the Board 424 Deputy Governor Case of the Federal Reserve Bank of New York withdrew tAnn the room. Mr. Case referred. to the action of the Board at its meeting on SePtember 7th in voting to disapprove an applica.tion of the Citizens 17ati.°11a1 Bank of Englewood., IT. J., for an extension from six months to 011e Year of the time in which it shall increase its capital by at least 41°09000 in order to comply with the condition imposed. by the Board. on 153 9/10/26 -2- 1 August 12th when the bank's application for fiduciary powers was approved. Mr. Case discussed with the Board the condition of the balk in question and. stated the .reasons why in the opinion of the Federal Reserve Bank of New York the extension requested should be granted. He asked that the Board reconsider its action of September 7th ard then withdrew from the meeting. Thereupon Mr. Cunnins-ham moved that the Board reconsider its action of Saptanber 7th as requested by :Ir. Case. Carried, Mr. James voting "no". Mr. Platt then moved that the Board extend from six months to one year the time in which the Citizens National Bank of Englewood, N. J. shall increase its capital by at least ,,1100,000 in order to comply with the condition imposed by the Board at the time the bank's application for fiduciary powers was approved. Carried., Mr. James voting "no". Discussion then ensued of the recommendation of the Open Market Investment Committee at its meeting this morning, above referred to, in voting to the effect that the System's Special Investment account should be maintained for the present at .200,000,000 with the understanding that the Committee could, 14 its discretion, increase or decrease the account by not more than 4:i50,000,000. Mr. Platt moved that the Federal deserve Board approve of the recommendation of the Opera Maxet Investment Committee except the authorization to the Committee to decrease the System's Spacial Investment Account by not more than ;;50,000,000. Mr. Miller moved as a substitute for Mr. Platt's motion that the Open Market Investment Committee be advised as follows: "Having considered the report and the final recommendations of the Open Market Investment Committee, the Board is of the opinion that the present situation 154 9/10/26 -3"of the money mL.rket requires no interference by the Federal Reserve System either by purchases or sales in the open market. Should subsequent developments arise as the autumn advances that would make a departure from this position advisable, the Board will be ready to consider the matter again in the light of actual changes in the money or general economic situation. The Board has, therefore, concluded: 1. That there should be no chanF7e in the present volume of securities held in the System's Special Account. The 10 millions of September 15th maturities should, therefore, be relaced as the opportunity for purchase is favorable. 2. The 12 millions of September 15th maturities in the account held by the Federal _eserve Bank of :Taw York for foreign correspondents should also be replaced by purchases for the 3; stem's Special Account. While this would result in an enlargement in the amount of securities held in the System's account, it would not in effect alter the amount of money maintained in the open market by purchases of Treasury securities either for Federal eserve or for foreir4n correspondent account; in brief, would leave the existing situation unmodified so far as the Federal Reserve's relation to it is concerned." Following a brief discussion action on the above motions was deferred a meetinr: this afternoon, and at 1:10 p.m. the Board recessed. At 2:45 p.m. the Board reconvened, the same members being present as attended the mornin session. The Governor reported that he had communicated with all Federal Reserve 43ents and. Governors of all Federal Reserve Banks with regard to dates for FL.11 Conferences of Governors and Federal Reserve Agents, tentatively 211 3e3tinr; that the Federal Reserve Agents' separate conference be held on ITevember 4th, 5th and 6th, and the Governors' separate conference on November 8th, 9th and 10th, with the joint conference immediately thereafter. He stated that the dates suggested by him were agreeable to all Governors and Acents. 155 9/10/26 -4- Upon motion, it was unanimously voted that the Conferences should be held on the dates suggested by the Governor. The Governor then brought up for consideration the substitute motion made by Mr. Iiiller at the meeting this morning with regard to the recommendation of the Open Market Conmittee earlier in the morning, which after discussion Li'. Miller amended, moving its adoption in the following form: "Having considered the report and the final recommendations of the Open Market Investrent Committee, the Boa/d is of the opinion that the present situation of the money market requires no interference by the Federal Ileserve System either by purchases or sales in the open market. Should subsequent developments arise as the autumn advances that would nake a departure from this position advisable, the Board will be ready to consider the matter again in the 1 ight of actual changes in the money or general economic situation. The Board has, therefore, concluded that there should be no chnnge in the present volume of securities held in the System's 'Special Account. The 10 millions of September 15th maturities should, therefore, be replaced as the opportunity for purchase is favorable." Miller's substitute motion being put by the Chair vas lost, the mmbers voting as follows: Mr. Miller, "aye" Mr. Hamlin, "aye" Mr. Cunningham, "aye" Governor Crissiner, "no" Mr. Platt, "no" Mr. James, "no" Mr. McIntosh, "no" The Board then considered the original motion submitted by Mr. Platt "That the Federal :deserve Board approve the recommendation of the Open Market Investnent Committee except the authorization to the Committee to decrease the System's Special Investment Account by not more than ii;50,000,000." Following a discussion, daring which Mr. Hamlin left the meeting, Mr. Platt, at the suggestion of Mr. Janes, amended his motion so as to read as follows: 156 9/10/26 "Resolved, That the Open Market Investment Committee be advised, that the Federal Reserve Board has considered the report submitted at its meeting today and authorized the Committee to maintain the System's Special Investrent Account at from :i 200,000,000 to ,;225,000,000." Mr. Platt's amended motion was then out by the Chair and carried, the members voting as follows: Ex. Platt, "aye" Mr. James, "re" Mr. Cunningham, "aye" Mr. McIntosh, "aye" Governor Crissinger, "no" Mr. Miller, "not voting" The Secretary then referred to a letter addressed to Mr. Platt under date Of August 27th by the Chairman of the Federal Reserve Bank of New York, requesting that an address made by him some time ago before the annual convention Of the National Association of Supervisors of State Banks, be submitted to the Board for approval or disapproval, and for any suggestion of changes in the text valich should be made before it is printed in the proceedings of the convention. The Secretary stated that the address had been circulated among all members of the Board and read a revision of one paragraph of the address suggested by Mr. Miller. Upon motion, the Secretary was instructed to advise the Chairman of the Federal :deserve Bank of New York that the Board will interpose no objection to the publication of the address with the change suggested by Mr. Miller. On this motion, Mr. Cunningham did not record a vote, stating he had not read the address. The meeting adjourned a 4:10 Assistant Secretaw. APPrOved: tr4:
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