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At a meeting of the Federal ,Reserve Board with the Federal Advisory Council at 11:00 A. id., Tuesday, September 19, ;916, Governor Harding, presiding, Mr. ViarburLs, Mr. Miller, Er. Alliams, Mr. Allen,:.;;ecretary, -. Al]. members of the Federal Advisory Courcil, President lorgan reaj the vie:x of the Council upon the topics suggested by the Board and those hich the Council itself had originated. At the conclusion of this reading, Mr. Record of the 11th District read a substitute offered. by Aim to Topic 5, sub-division b. which had been presented as a minority report, but had failed to receive a second. There was general discussion of reserve conditions and discount rates in which all the members of the Council participated, briefly as follows: - Boston. The excess reserves of Doston b2.nlcs 982 are approximately !27,000,000, e!,24,000,000 of which is in New York banks. There is little borrowing from the Federal Reserve Bank by country banks. The discount rates appear to be about right. MR. MORGAN - New York. not Banks generally are/now carrying large excess reserves, but a few large banks carry heavy amounts and the situation is understood. Hesuggested no change in discount rates, but the application of the new 15-day rate for member banks' promissory not, to 10-day paper. MR. RUE - Fhiladolohia. Rosurve conditions are normal and there is a surplus of funds. No change is recommended in rates. 1.111. ROWE - Cleveland. Conditions are normal, vith less than the usual demand for credit. iTo change recommended in rates. UR. 10R001). - Richmond. Reserve conditions arc satisfactory and the rates in the Richmond istrict are beinc closely watched. T.71. LYE2LY Reserves are above normal and no change is recommended in rates. There is a large excess of reserves, but probably no need for change in discount r_Aes this year. - Louis. Reserves are at normal and l'obably as low as they should be. No change is recommended in rates. MR. JAYFRAY Minnea Reserves and rates are being closely watched to prevent expansion. a;;IITNEY - Kansas City. It is difficult to kee7) funds employed. Reserves are high and rates should not be ay lower. RECORD - Dallas. Reserves are generally good. No change is necessary in rates, but they should be kept low enough to encourage banks to discount. MR. FLI LCR - Francisco. Reserves are high. There is no necessity for a rate change at present. There was general discussion of the position of the Board relative to the topics upon which the opinion of the Council had been requested, Governor Harding discussing the clearing plan, payirg particular attention to the giving of im.lediate credit for checks drawn upon member banks and the payment, without deduction, at a designated Federal Reserve Bank, of checks and drafts drawn by a member bank which keeps the necessary excess reserve with it Federal Reserve Bank, under arrangements made by the drawing bank with the Federal Reserve Bank of its He then asked Mr. Warburg to discuss District. the question of stock ownership in foreign corporations. Mr. Warburg also took up the ,?..uestion of placing vault money with Federal Reserve Banks, urging that excess reserves be so placed, and that assistance be given the banks in the accumulation of gold. In this counection, Mr. Morgan suggested the issuance by Federal Reserve Banks of certificates of deposits of gold, and said 980 he could make deposits in New York if such certificates could be given. Referenee was made by Mr. IlorCan to the effect of recent rulings of the Board under the Kern amendment to the Clayton Act, with the suggestion that such rulings mit tend to keep non-member banks from entering the system. Mr. Forgan then gave it as the opinion of the Council that a director who removed from the Federal Reserve District, should resign his directorship, and at 12:30 P. K. the conference adjourned.
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