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2896 A meeting of the Executive Committee of the Federal Reserve Board With the Governors of the Federal reserve banks was held in Washington on Saturday, September 22, 1934, at 10:20 a. m. PRESENT: Mr. Mr. Mr. Mr. Thomas, Vice Governor Hamlin James Szymczak Morrill, Secretary Bethea, Assistant Secretary Carpenter, Assistant Secretary Goldenweiser, Director, Division of Research and Statistics Mr. Smead, Chief, Division of Bank Operations Mr. Vest, Assistant Counsel Mr. Boatwright, Assistant Counsel Mr. Mr. Mr. Mr. ALSO PRESENT: Messrs. Young, Harrison, Norris, Fsncher, Black, Schaller, Martin, Geery, Hamilton, McKinney and Calkins, Governors of the Federal Reserve Banks of Boston, New York, Philadelphia, Cleveland, Atlanta, Chicago, St. Louis, Minneapolis, Kansas City, Dallas and San Francisco, respec— tively. Mr. Peple, Deputy Governor of the Federal Reserve Bank of Richmond. Mr. Williams, Economist for the Federal Reserve Bank of New York. Governor Calkins, as Chairman of the Governors' Conference, stated that the G overnors would be pleased to hear any comments which the Board Would .1 'ike to make with regard to industrial loans by the Federal reserve batiks. vice Governor Thomas stated that the Board felt that the Governors 44d Other officers of the Federal reserve banks should do all they can, throu,, sPeoches or otherwise, to acquaint the public with the industrial loall 1)r°gram. Governor Calkins referred to the Board's letter of April 18, 2897 -21982(X-71S5), with regard to speeches by officers of Federal reserve banks, and some of the Governors stated that because of the necessity of submitting conies of speeches to the Board in accordance with the P°11q7 laid down in the letter they had declined to make speeches. °thers stated that they had received the impression that the Board thought it would be better if the officers of the Federal reserve banks 4141 not make speeches. In this connection, Mr. Morrill read the letter address& 1. the Board under date of September 15, 1954, to Governor Ramilton of the Federal Reserve Bank of Kansas City, with regard to an a4dre88 by him before the Nebraska Bankers' Association, and stated that, at t1e request of one of the members of the Board, a letter is being prePared to all Federal reserve banks along the lines of the letter to Governor Hamilton. Mr. =Tames stated that, in his opinion, the Board's letter of April 181 1982 'was not intended to restrict the officers of Federal reserve 11411ks in making addresses which they feel are desirable, but was primarily for tl— "' Purpose of placing the Board in possession of information with reto the substance of addresses by officers of the Federal reserve banks °Mer that the Board may be in a position to answer comments or critieinme /Yhich might come to it following such addresses. e:o : ernor Black stressed the importance of the Federal Reserve toard b a advised of substance of addresses made by officers of the Pederal res erve banks, and stated that he felt the Governors and officers Of the Federal reserve banks could do a great deal toward popularizing the 2898 9/22/34 _3_ • Federal Reserve System and acquainting the public with its operations, and that there should be no objection to furnishing the Board with abstractsi g-7ing the substance of addresses made in this connection. At the conclusion of a discussion, it that a letter would be adunderstood was dressed by the Board to all Federal reserve banks regarding the matter. In response to an inquiry from Governor Calkins as to Whether the Board felt with the banks had done everything they should in connection advancing the industrial loan program or Whether additional steps shcntla be taken, Vice Governor Thomas suggested that the banks give turther consideration to the advisability of holding group meetings of 'ePresentative bankers in their districts and also to the advisability Of calling meetings of representatives of industry for the purpose of acquainting them with the facilities at Federal reserve banks for industrial loans. In response to a request from Governor Calkins for an expression *cm the Board as to Whether the banks should adopt a liberal policy in considering applications for industrial loans, Mr. Thomas stated that the I30ard did not want the banks to make unsound loans but that they should eive a liberal interpretation to the requirements of the law and the 8°ard's regulation in considering a loan which it is felt can be made on a reasonablY sound basis. In this connection, Mr. James called attentton to the survey of credit needs made by the Federal reserve bAnks at the request of the Secretary of the Treasury and stated that, in his °Pinion, if a large volume of industrial loans is not made by the 2899 \ 9/22/34 Pederal reserve banks, their activities in connection with industrial loans must show as the reason why more loans were not made, that the estimate of credit needs of worthy borrowers who are unable to get adequate credit from banks was entirely too high. Mr. James stated that he had just been advised by Yr. Smead that the Treasury. Department had agreed that under the Emergency Appropria- tions Act for the Fiscal Year 1935, approved June 19, 1954, the Treasury ment is authorized to make expenditures for any purpose in connection vith the carrying out of the provisions of any of the executive "tiers and proclamations regarding the bank holiday, any regulations is sued thereunder, including costs of transportation, insurance, and protection or gold coin, aold bullion, and gold certificates transferred to the Pederal reserve banks and branches, United States mints and assay ss, and the Treasury, after March 9, 1953, and for the purpose of Iteinlbtirsing the Federal reserve banks for losses sustained by them due to abr asion of gold coin, and expenses incurred in carrying out the in0118 issued by the Secretary of the Treasuryy. after March 4, 1953. It 1748 stated that a letter would be addressed to the Federal reserve batiks re garding the matter. to the Mr. Thomas stated that the Board has been giving consideration suggestion that there be employed as a member of the Board's staff P"s°A sx Perienced in public relations work, in connection with making PUblic currently information with regard to important matters concerning the Pederal Reserve System and other public relations activities, and 2900 9/22A4 that he would like an expression from the Governors as to the advisability of such a step. It was moved that it be the sense of the Governors' Conference that the suggestion that a public relations man be placed on the Board's staff, be adopted by the Board when it finds a suitably trained man for the position. The motion was approved linAnimously by all the Governors present. Governor McKinney stated that he had just received a telegram from I. '°Put7 Governor Gilbert of the Federal Reserve Bank of Dallas stating that at the meeting of the bank's executive committee yesterday inter st rates on industrial loans were discussed and two of the directore expressed the opinion that rates on such loans might be reduced. Re 144 •' - atad that the meeting may wish to give some consideration to this The matter was discussed briefly and it was indicated, as the general opinion of those present, that the rate on industrial loans should be determined by the circumstances involved in each case. Governor Harrison, as Chairman of the Legislative Program Committee, called on Mr. Goldenweiser to make a report of the preliminary work being done by the committee. Mr. Goldenweiser stated that some of the work 18 being conducted by Ur. or Williams, Economist for the Federal Reserve Bank 4 re'rk, and " Mr. Stark, technical assistant to the committee, and that Work has been started on (1) the preparation of material along the lines history- or the System and how it has functioned, (2) the gathering 2901 9/22/54 -6- of descriptive work about the System, and (5) a preliminary list of topics 011 Which it is anticipated the committee may need to take a position. He also stated that at a recent meeting of the committee the list of topics 17as reviewed and work begun on some of the topics. Mr. Goldenweiser said also that the committee proposes to send a letter to each Federal teserve bank requesting that a member of the bank's staff be designated to Prepare a descriptive account of the relations between the bank and it8 member banks and the services performed for the member banks. There was handed to each of the Governors present a memorandum Pr Pared in the Division of Research and Statistics under date of September 20 1954, on business and credit conditions. Governor Harrison stated that a meeting of the Federal Open Market C°mmittee was held yesterday but took no action requirina7 the consideration 00 Federal Reserve Board. He also referred briefly to certain tters which were considered by the Federal Open Market Committee. Thereupon the meeting adjourned. rr Secretary. Vice Governor.
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