frsbog_mim_v09_complete.pdf

'tlST:

(a) All postage in connection with remitt~ceo made to cover collections ( to be, provited for by enclosing return stamped envelope).

(b) All expenses incident to shipnents of currency to Federal Rosene banks. in pay-ment of items.sent for collection.

(*) Currency does not include silver or subsidiary coin.

Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

. . .

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X-1237 - 2-

You will notice tha.t ~ragraph (a) under 1MEW3ER BA~l(S 1 2 has been revised so as to omit, for the present at least, the pay-ment of postage, exp-ressage, insurance, etc. incident to shipments to and fro.m member banks of collateral notes and bills for redis-count, and securities deposited as collateral to rr~mber bank promis-sory notes and notes rediscounted' Paragraph (b) has been revised so as to omit the payrr~nt of charges on all telegrams in connection with 1loans'.

It is believed that payment by the reserve banks of these ex~enses will have the effect of more nearly equalizing the advantages offered member banks, and will also be helpful in our campaign for State member banks. The Board, of course, in adopting this plan, reserves the right to modify or rescind it at any time upon reason-able notice,. should it be deemed advisable.

You were also advised in the telegram above referred to that the Federal Reserve Board appreciates the excellent results already attained by the Federal reserve banks in gathering gold from the banks in their respective districts and strongly urges that efforts be continued to the end that all available gold be mobilized in the Federal reserve banks. The Board authorizes you to absorb the abrasion and to pay all expenses incident to the shipn:ent of gold to your bank and shipment of Federal reserve notes in exchange therefor.

Kindly acknowledge receipt of this letter and oblige,

Very truly your.s 1

Secretary.

The Governor, Federal Reserve Bank1


I

EX-OFFICIO MEMBERS

WILLIAM G. MCADOO SECRETARY OF THE TREASURY

CHAIRMAN JOHN SKELTON WILLIAMS

COMPTROLLER OF THE CURRENCY FEDERAL RESERVE BOARD

WASHINGTON

October 3,1918.

MEMORANDUM,

There are transmitted herewith for your

infornation one copy each of H .. R. 12923 The Bond

Bill and H.R. 12283 The Phelan Bill. These are

the first copies received from the Government

Printing Office.

Yours very truly,

Joseph Ae Broderick~

Secretary.

The Governor, Federal Reserve Bank,

W. P. G. HARDING, GovERNO~ ----, VICE GOVI!:RNOR ADOLPH !;.. MILLER CHARLES S. HAMLIN

J. A. BRODERICK, SECRETARY L. C. ADELSON, ASSISTANT SECRETARY W. T. CHAPMAN. ASSISTANT SECRETARY W. M. IMLAY. FISCAL AGENT

ADDRESS REPLY TO FEDERAL RESERVE BOARD

X-1239


{-

z,- ._. . -' r-

.

EXOP'FICib MEMa-

WILLIAM G. MCADOO SICIIITARY Of THE TRIASUliY

CHAtatiAll JOHN SKELTON WILLIAMS


WASHINGTON

W. P. G. HAlOING, G\)VIRNOII ----.,VICE G\)V-J AOOLPH C. MILLEII CHARLES S. HAMLIN

J. A. BROOERICK, SECRETARY L. C. ADELSON, ASmTAHT SICRITAitY W. T. CHAPMAN, AsSISTANT Sl.aiiTARY W. II. IMUY, FISCAL AeENT

ADDR- III:PLY TO FEDERAL RESERVE BOARD

October 3, 1918.

Dear Sir:

SUBJECT: RECLASSIFICATION OF ELECTO~L GROUPS FOR CLASS A AND CLASS B DIRECTORS.

X-1240

Confirming telegram addressed to you today, you are infonr.ed

that, pursuant to the pOW'ers vested in it under the provisions of

the so-called 11Phela.n Bill u, which beca1t8 law on Septed>er 2-6, the

Federal Reserve Board ha.s classified the electoral grwpe for Class

:::A and B directors 1n your district a.s f ollo.vs:

Tuesday, November 19, has been designated by the Board as the date

for opel'ling the polls for the election of directors to succeed those

Whose tenns expire December 31, 1918..

fhe Board's ietter to you of Septembe~ 19 (No. Xl215) gives you complete instructions ae to the course to be -pursued. In addition,

there is enclosed herewith fo~ of resolutitn to be~do,tel by direct-

orates of meanber banks design&ting officers ~uthorised to cast their

blots .

Kindly acknoWledge receipt.

Very tntly yours,

Governor. TheCha.i:ril.a.n,

Fede~l Reserve !B.nk#


i I

I '

.. '

X-1240 A

DESIGNATION OF OFFICER AUTHORIZED TO CAST VOllE .OF !mABER :stiK. Federal Reserve Bank of

District ___ _ Group ____ _

At a meeting of tho board of direotors of the

(nE:me of bank) duly called and held on the ----------'day of. ___ ......... 19___,

on motion duly made and seconded, it was

nResol ved, Th.a t Mr ___ __.._ __ .._ _______ t.:.::hT:e::----:--:-~-:---=--(President,Cashier(. or other officer.)

empowered, and directed of this b:1.nk be and he is hereby authorized .

to cast the vote o.f this Bank for r:lass A and class B directors of

the Federal Reserve Bank of , in accordance with the

prov.isions of section 4 of the Act of Congress approved. December 23, . . .

1913., known as the FeJ.eraJ Res~rve Act, as ~Amended by the Act ot September 26,1918.

RESOLVED FURTHER, That the authority hereby granted shall continue in force untU revoked by the directors of this bank.

(Signature of Officer authorized to cast vote of bank.)

I hereby certify that the foregoing is a tru.e and correct copy. of .the resolution of the board . of directors of this Association., duly adopted on the date specified. I further certify that the fore-going signature is the signature of the officer named therein, who is authorized to cast the vote of this bank.

. . .

5

(to be signed by officer other than the officer authorized to cast vote of bank.) To~--------~----------------J

Chaitman, Board of Directors, Federal Reserve Bl.nk of ______________ ....;.


' ..

WILLIAM &. McAOOO SICRITARY q,r THE TRuSuWY

CIWIIIAN JOHN SKELTON WILLIAMS

COIIPTIOLLER OP THI CURRINCY FEDERAL RESERVE BOARD WASHINGTON

Replyjng to yonr ~.etter ot

applying tor a pe~it to aot in certain fiduciary

capacities as set forth in the Federak Reserve ACt

as amended September 26. 193.8. you are advised that

an a.ppllea~on form is nov, 'being pte~red. and aa

soon as a. supply has been printed a. cow will be

furnished to you .

Verir tl"Uly yours,

Assistant secretary.

,

W. p, & . HARDt!$. &c)~a - .. - :---. VICE Govlllllillt ADOLPH c. lllLLIR CHARLES S. HAMLIN

:-aRODE~. SICRITART6 L. C. ADELSCJii. AIIIITANT SICRITARY W. T. CHAPMAN, AsSISTANT SICRITARY W. 11. IMLAY, FISCAL MV

.

WII.LIAJI G. MCADOO

'w. P. G. HARDING,IIO- ~ ----.. -~DNOof ADOLPH C. MILLER:~<

SICREYAIIY 01' THE TREASURY CIWIIIIAN

CHARLES 5. HAMLIN-

JOHN SKELTON WILLIAMS . COMPTROLLER OP THI CURRENCY

Dear Sir:

FEDERAL RESERVE BOARD

WASHINGTON

October 8.,1918.

J. A. BRODERICK, SICREYART L. C. ADELSON, ASSISTANT SICltEYARY W. T, CHAPMAN, ASSISTANT SICREYAIIY W. M. IMLAY, FISCAL MhT

ADDai!U RIIPLY TO FEDERAL RESERVE BoARD

X-1243 SUBJECT: OPEN MARKET FOR BANKERS ACCEPTANCES

IN ITS ~~ DISTRICT.

I would appreciate it if you would let me know your views as to the expediency and practicability of ea.eh Federal reserve bank esta'blishing an open market for bankers' acceptances in its own district.

The Federal Reserve B-Jnk of Boston has beetl successful in establishing an open market f~r acceptances, and, as you knon# the Federal Reserve Bulk of New York has for some yea.ra dealt in acceptances on a very large scale. 'l'he business has developed so that it has become necessary fer the New York bank to ask that the Federal reserve banks of other districts assist it in carrying the burden.

As the Federal reserve banks generally have indicatecl a willingness to relieve New York of acceptances originating in their resSctive districts, the idea naturally suggests itself whether it would be possible to localize the wsinaaa in the various Federal ra.serve cli"tr1cte by developing a local. discount ~rkat for acceptances in each district.

Will you please discuss this uatter with your Exeoative CODIDittee?

Vary truly yours,

Go'farnor.

Qla1.ruan1 Federal Reserve Bank,


WILi.IAM 6. MCADOO SIICUTARY OP TilE TRIWUitY

, CIWIIJIAN

JOHN SICLTOH WIWo\MS COIIPTROLLIER 01' THI CUIIIdiiCY FEDERAL RESERVE BOARD J. A. BRODERICK, Sll:RITAIIY L. C. ADELSON, ASsiSTANT SICRITAOY

W. T. CHAPMAN. ASSISTANT SICIIITARY, W. M. IMLAY, FISCAL MilOT

WASHINGTON ADDRDS UPLV TO FEDERAL RESERVE BOARD

October 5,1918.

X-1244

SUBJECT: TRUSTEE POIIJ'ERS UNDER SECTION 11 (k) OF THE FEDERAL RESERVE ACT AS AMENDED SEP'lDABUl 26,1918.

Dear Sir:

Under Section 11 (k) of the Federal Reserve Act as amended by the Act of September 26, applications for per-mission to ezercise trust powers can be granted only to ' those banks whicb have capital reqUired under the State laws of State banks and trust companies exercising simUar pcmers. A new form of application is now 1D the hancl.s of the printer and there ,is also being prepared a form for use in handling these applications, which prescribed the uetbod of procedure to be followed.

These fo~ will be distributed among the J'ederal reserve banks in a few days. You are req\leste4 to hold .:11 applications on fUe until receipt of thisJ fonD.

Respectfully,

Governor.


WII.I.IAM.G. ~ SII:IIITAIY OF THC THASURT

CHAIRMAN JOliN SKELTON WILLIAN$ .

CollPTROLLIR OF THI CURRENCY

W. P.!i.!IAIIDING;8oVONOW -- ----.-,VICE~AOOLPH C. IIIWR CHARLES S. HAMLIN

FEDERAL RESERVE BOARD J. A. BROOERICK, SII:RITART L. C. ADELSON, ASSISTANT SICRITAIIY W. T. CHAPMAN, ASSISTANT SPIT ART W. M. IMLAY, FISCAL AGINT

WASHINGTON ADDIIIDS IIIIEPLY TO FEDERAL RESERVE BOARD

October 5,1918. ~1245

SUBJEC!: RESERW lU!QJIR!WftS OF BANKS LOCATED IN Otl'l'LnNG DISfiUC'.l'S OF CENTRAL RESERVE AND RESERVE CitiES.

Dear Sir:

The Board now :has authority 'W'lder the Ac~ of September 26,1918., alllell4ing the Federal Reaerve Act to re4\1Ce tbe rese"e reqW.reunts of banks looate4 ia outlyinl districts of Central Resene an4 Reserve Cities. There is now under coneiclera:tioa a repla.tion covering this a.tter, but 'before issuin& the 1'8&\1-lation ycul" opiniCIIJl is desired as to the cenoral rule which should be a4opte4.

You are requea.ted. to a4viee this office a.t your earliest convenieace of your .view of the- matter based upon looal ~ditiae in your OWI'l city anct other reserve cities ~' your cliatrict. fhe pst10J) it should the Boara. ostabU.sh a definite tenitorial limi~ or ek~d cop.bance be tal:ea .also of the ehal'&ltel" ~ .. ~~ e ... ge~ ill .. ~.the baJike D\VOl'fed ~ .. \h&\ ..... tile .. ~ )Ottbm M baak 'ba.Un\$e to ind1YtdwU. !epnits ca.triect b:r tbe rest&c\ive ~k~.

It sbo\11.4 be borne i11 min4., however', that the s.ans ,,_ withc:Nt ~tbority to redce the reaene req\liiH of a'lf'l llarlk which is looate4 within the recop1ae4 bwJirless aa4 fi.DMd&l center, as direot reference is ~ to "~tlying diatriota. !he principal problem i11Yolve4, therefore, eeEJIDe to be vrhether all ~ke loe&te4 ln outlying 41stricta eutsi4e of the bustn oeater shCN14 be clateifie4 alike.

Very truly you.n,

Governor.


-:-.

I . . . - . -W. P.'G. HAII&ING. Go.._ --, --,VICE.,_.

' WII.LIAM G' MCADOO. SIIC1I'ITARY OF TH1 TIIIASiiRT

CIWIIIIAN

ADOL!'H C. MILL!II CHARLES s. HAMLIN

J. A. BRODERICK. hi!RETAIY JOHN SKELTON WILLIAMS

COIIPTROI.LIR OF TKI CURRENCY FEDERAL RESERVE 'BOARD L. C.' ADELSON, AltiSTANT SI!CltJfART W. T. CHAPMAN, ASSISTANT SI!CIIETARY W. M. IMLAY, FISCAL AGENT

WASHINGTON ADDRESS REPLY TO FEDERAL RESERVE BOARD

October 11~1918. StmJECT: DIRECT REMITTANCES. X-1248

bear Sir:

It has been brought to. the attention of the Federal Reserve Board .tbat

deiays frequently occur in the crediting ot rendttances sent by uember banks

in o:oe federal Reserve district to Federal Reserve Banks in other districts~ either direct to the Federal Reserve Banks or through local correspondents.

The Board fully realizes that such delays in most cases are the result of

delayed nails, receipt of remittances after clearing hours, cashiers checks

being deposited by lbcal banks after clearing hours, and in sorr.e eases, letters

being mailed at point of origin on a day other than the date appearing upon

letter of enclosure.

It is important that the handling of these direct remittances be expedited6

as in some instances member banks receive imr.ediate credit and are called upon

to pay a stated charge per day until such remittances are actually credited.

by the receiving Reserve ~ank. It is suggested that instructions be given

your transit departrr

X-1250

SUBJECT: REVISION OF BYLAWS.

PROPOSED REVISAL Ql Tij[ BY-LAWS OF THE FEDERAL RESERVE BOARD.. ELIMINATING

ALL OBSOLETE lv'1..ATTER AND INCORPORAT'l!VG ALL ANl:NDMENTS.

ARTICLE 1.

I.he Chairman.

The Secretary o'f the Treasury shall be Ch:l.irnan of the Board, and shall presi.ie at all meetings when present. In tho absence of the ~~airuan the Governor of the Board shall act as presidli1g offic0r. In the absence of both the Chairrrf'in and the Governor, the Vice Governor shall act as Chairrr.an.

(Article 1 of the original Bylaws.)

ARTICLE lL

Thsz. Gove rno;::.

'Section l. The Governor of the Federal Reserve Board shall be the active executive officer thereof; subject, bow~ ever, to such rules and regulations as rray be incorporated herein or rray from time to time, by resolution 1 be established~

(Section 1 of Article 11 of thQ original By-laws.) Section 2. The Governor shall have general ch~rge of

all business of the Board not specifically assigned by resolu-tion to any individual member thereof, or to the corrmittee of the whole .. He shall submit a sumrr.ary of such business at each succeeding meoting of the Board.

(Section 4 of Article 11 of the original By-laws. Sec-tions 2 and 3 were repealed by Amendments 111 and IV of Febru-ary 1, 1915, and Section 5 is made Section 3 of Article V of the revision.)

ARTICLE 111. The Vice g.overno...r,.

Section l. In the absonce or disability of the Governor, his powers shall be exercised and his duties discharged by the Vice GQvernor and in tho absence or disability of both of these officGrs, such powers shall be exorcised and such duties discl'la:];-ed by such member of the Board, as it may by resolution, desig-nate Chairman pro tam.

1.:1


Section 2. It shall be the duty of the Vice Governor to cooperate with the Governor in the-administration of the gen~ eral business of the Board~

(Article 111 of original By,;.laws.) ARTICLE lV >

The Executive C9rrzyittee.

1. There shall be an Executive Committee of the Board . consisting of three n:embers, which shall include the ~vern~r . and Vice Governor and one other. The third member s}'la11 be norr ..... inated and elected at a regu1atmeetirtg of the Board~ Mem~er~ of the Board shall serve as tar as practicable in rotation and for periods tb be fixed by tho Board frorr. time to time. Two . . members shall. constitute a quorum for the transaction of business.

2. tt shall be the duty of the Executive Comnittee of t~e Board to transact all business of a general nature which can be transacted in accordance with principles already established by the Board~ and such as rray be delegated to it from tine to time; to review and approve important correspondence involving the . expression of opinions or decisions of the Boardjto prepare and make recommendations governing the conduct of th~ Board's business and to oversee and control the rraking of statements to the press expressive .of the Board's policy or descriptive of its action.

3. The Executive Corr.mittee may at any time delegate to the. Secreta~/ of the Board, either individually or under the super-vision of one of its members, the exercise of its functions with reference to publicity as hereinbefore set forth~

(Added by Anendment V, ~arch 22,1915.) ARTICLE V.

~ Secretary .an9., Assistant Secreta~ I

Section 1. The Board shall appoint a Secretary, whose duty it shall be to attend all meetings of theBoard, and keep a record of its proceedings. .

(Section 1 of Article lV of the original By~la.ws, which was trade Article V by Amendment V of }VIarch 22,1915)

Section 2. The Secretary shall assist the Governor and members of the Board in the administration of general business and correspondence. He shall under the direction of the Governor have general supervision of the office and shall supply the Board with detailed inforrration regarding domestic and international business and banking relations, and such other data as the Board nay from time to time require.

\~ect1on 2 o! Article lV of the original By-laws{ which was made Article V by Arr.ondrr.ent V of N.arch 22,1915. J

12


.\

...

Section 3. The Secretary shall hav~ custody. of the. seal . and shall have power to affix the sarr~ to all -instruments ~equiring it under the authodty of the Board. Such instruments shall be attested by the Secretary. . .

(Section 5 of Article 11 of the original By~laws 1 as amend~ ed by Amendmentl of February 1,1915.)

Section 4. The Board shall appoint an Assistant Secretary, who shall exercise the powers and discharge the duties of the Secretary in his absence or disability and shall perform such other duties as rray be assigned to him from time to tin:e .by the Board, o:r by the Secretary of the Bo~rd . .

(Amen~~nt ll of February 1;1915, which, together with Amendment lV of the same date, repealed Section 3 of Article lV of the original Bylaws~)

ABTICLE Vl~

~ ~~1 A~ent ana D~puty Fiscal Aent: Section 1.. The Board shall appoint a Fiscai Agent and a O~pu..;.

ty Fiscal Agent~ The duty of the F~.scal Agent shall be to col- . lect and deposit all moneys receivable by the Board with the Tr~asurer of the United States 1 to be placed in a special fund estab-lished on the books of the Treasurer for the Federal Reserve Board. The Deputy Fiscal Agent shall perform-~he duties of the Fiscal Agent during his absence or disability. .

Section 2. The Fiscal Agent and Deputy Fiscal Agent shall each execute a separate _bond with surety satisfactory to the Board.

Section 3. Payments of expenses and other disbursements . of. the Board shall be made by the Fiscal Agent upon proper vou-chers out of moneys advanced to h~ by requisition and warrant out of the special fund and placed to his official credit with

. the Treasurer of the United States as provided by Section 5 of this Article. In the a'sence of the Fiscal Agent payment of expenses and other disbursements of the Board shall be nade by the Deputy Fiscal Agent upon proper vouchers out of moneys ad.: vanced to him by requisition ~nd warrant out of the special fund and placed to his official credit with the Treasurer of the United States as provided by Section 5 of this Article~

Section 4. The Fiscal Agent shall prepare a monthly ac~ count in such form as shall be approved by the Comptroller.of the Treasury and after approval by the Governor such monthly ac~ count shall be submitted to the Auditor for the State and other departments. At the end of each month during which the Deputy Fiscal Agent shall have made disbursements for or on behalf of the Federal Reserve B~rd, and at such other times as the Exec~ utive Comnittee rray direct., he shall prepare an account in such form as shall be approved by the Comptr.oller of the Treasury, and after approval by the Governor such account shall be sub~tted to the Auditor for the State and other Departm:mts~

1.3


x.:.1250

Section 5. The Governor shall, when necessary, make re.:. quisition on theTreas~rer of the United States for the advance of such sums to the Fiscal Agent as rray be necessary from the . Federal Reserve Board fund, and shall likewise make requisition on the Treasurer of the United States for the advance of such sums to the Deputy Fiscal Agent- as may be necessary from the Federal Reserve Board fund. The accounts of the Fis~a.+ Agent and Deputy Fiscal Agent shall be separately kept and neither shall be permitted to d:raw upon ,;: disburse f\.mds advanced to the other, but each shall account for the funds so acvanced to-him.

(Amen)iment 111 of February 1)1915.: as amended larch 25~1918)~

ARTtCLE VlL

!b.~~~ The following is an impression of the seal adopted 'by th~

Board:

(SEAL) Article 'V of ihe original By~laws, which was rracle

Article V1. by a.mendtnent V of ~.a.roh 2211t15.) ARTtCLE \Tlli.

~~~ .. The Beard. sfa.ll appOint a regular Counsel whose duty it

shall be to ad.vj.s$ with the :Board, ot any n:ember J'here_of 1 as to such legal questions as may arise in t~e conduct of its business; and to prepare, at the Board's request, toms and Other' letal papers anti to perform generally such legal services as he nay be called upon by the Board to perform.

(Article V-a of the original By-laws{ which was made Article Vl - a by Amendment V of :w.arch 22,~1915. J

ARTICLE lX.

Meeting&~

Section l. There shall be a stated meeting of the Board each week day exc~pt saturdays and legal holidays at ll a.m.

Section 2. A majority of the Board shall constitute a quorwm for the transaction of business except that an affirmative vote of at least five members of the Board shall be necessary to re~ire Federal reserve banks to rediscount the disco~ted paper of other Federal reserve banks.


Section 3. At least once during each quarter there shall be a joint conference in Washington of me~bers of the Federal Reserve Board and the Federal Advisory Council, at such tirre as may be nutually agreed upon by said Board and said Council.

' Section 4~ At ali meetings of the Board the following shall be the order of business!

(l) Reading or insper.tion of the minutes of the last regular. mee .. c5.ng~

(2) Report of the Governor. (3) Repcnt of the Secretar7. {4) Reports of. the corm:i ttees or members on assigned bus-iness: (5) Unfinished business.

(Article Vl of the original By~laws, which was ~ade Article Vll by AmendmeJi, V. of Nt\.:~cn. ~2;-l~S.)

ARTI OLE X~

In f oma t iou.

Section l. All persons employed by. the Boar~ shall keep inviolate its business 1 affairs 1 and concerns.~ and shall not disclo~e or divulge the same to any unauthorized person whoms oe ve r .~ and any employee who shall give info~ation contrary to this by~law shall be liable to irr.rr:ediate dismissal~

Section 2. Unless a different procedure in given cases is authorized by vote of the Board, the action o:r policy t>f the Board shall not be expressed through any ind.ivid.1J.al meu1ber, but by its duly constituted officers 1 after formal action by the Board~

X~l250

-6-

AR'riCLE Xll.

~:::nendrcenta.

These by~laws rray be a~ended at any regula~ ~oeting of the Boar~. by a rr.ajority vote 0f the entire Board} p;.ovided that a copy of such a:r:nendu:en"ts shaJ.l- have been deliv3led to- each member at least seven days prior t.c su~!h :.nE?et:ing,

(Article lX of the o1iginal By-~laws which was made Article X by Amendrr_ent V of llfarch 22,1915.)

tG


.,

EX-0:::-FlCIO MEMBERS W. P. G. HARDING, GOVERNOR ----, VICE GOVERNOR ADOLPH C. MILLER V/ILLJAM G. MCADOO

SECRETARY Of THE TREASURY CHAIRMAN

CHARLES S. HAMLIN

JOHN SKELTON WILLIAMS COMPTROLLER Of THE CURRENCY FEDERAL RESERVE BOARD J. A. BRODERICK, SECRETARY

WASHINGTON

October 19)1918.

L. C/ ADELSON, ASSISTANT SECRETA'fY W. T. CHAPMAN. ASSISTANT SECRETARY W. M. IMLAY, FISCAL AGENT

ADDRESS REPLY TO


X-1851 SUBJECT: APPLIC~TIONS OF NATIONAL BANKS FOR

PER!I"ISSION TO EXERCISE FIDUCIARY PO'iERS UNDER AUTHORITY OF SECTION 11 (k) OF THE FEDERAL RESERVE ACT AS AJ1:ENDED BY THE AC' OF SEPTEI'i.BER 26 1 1918.

Dear Sir:

Under the prov~s~ons of Section 11 (k) as amended by the Act of September 26 .. 1918, applications of national banks for per-mission to exercise trust po~Ne rs can be granted only to thooo banks which have capital and surplus equal in amount to that required by State laN of State banks, trust companies and corporations exercising similar powers.

Under date of Sopterrber 26}1918 1 the Comptroller of the Currency addressed to all national banks a letter ~n the subject of this .3.n:endn:entJ a copy of which is enclosed hereNith for ycur inforrration. There is also enclosed a copy of the Act of Scpte~ber 26th and your attention is called to Section 2.

There is being sent you under sep~rate cover (l) a supply of new Form 61,~ application blanks, for use by national banks desiring to obtain permission to exercise trust poNers; (2) a supply of Form 61-a which shows in detail the procedure to be fclloNed in handling these applications.

The regulations of the Board covering trust operations of national banks will be revised in the ncar future and copy will be furnished you. Pending receipt of revised regulations the procedure to be followed in handling these applications is as folloNs:

(a)

(b)

V:flcre a national bank which has not heretofore been granted a pern:it to exercise trust poNers de sires to apply for

pe~~ssion of tho Board to exercise such powersi Form 61 should be furnished to the bank for execution by the proper officers. Those forrr.s will be sent upon request either by the F~deral reserve bank or by the Federal Reserve Board. Upon ra ceipt by the Fadera~ reserve agent of Form 61., proparly executed, this form should be enclldsed in and attach~d to Form 61-a. Federal reserve agents should 506 that sub-divisions (a)~ (b) and (c) are properly fi~ cut and should transmit same to the Federal Reserve Board. ~~rrn 61-a should not be sent to the applicant bank.


-2-

(c) \Then national banks have already boon grn.ntod permboion to exercise certain trust powers but de sire to apply for permission to exercise; additional pomH'S 1 Form 61 rr.ay be used pending receipt of new form noN bt;ing prepared for this purpose but in such case the Federal reserve agent should :rite or starrJp on the f om "Supplerr.entary application" to indicate that an application has been previously n.ade by the applying bank. The saxre procedure should be followed that is outlined for the original application.

Tho Federal Reserve Board has fixed the first rr.eetingtc be held in December as the tirr.e it will act upon applications filed under Section 11 (k) as arr:ended. 1 up to and including November 15th. hpplications filed aft.er that date will in all probability not be acted upon until a subsequent meeting.

Respcctfully 1

Governor ..

The G'hai rrr.a.n , Fe~e ral Reserve Bank 1


EX-OFFICIO MEMBERS W. P. G. HARDING, GO\IERNOR ----, VICE GOVERNOR -~: '~ ::,

WILLIAM G. MCADOO ADOLPH C. MILLER SECRETARY OF THE TREASURY

CHAIRMAN

CHARLES S. HAMLIN

JOHN SKELTON WILLIAMS COMPTROlLER OF THE CURRENCY FEDERAL RESERVE BOARD

WASHINGTON

October 21.,1918. .

SUBJECT: SHIPMENTS OF CURRENCY TO AND FROM RESERVE B.ANKS.

Dear Sir:

X._l252

J. A. BRODERICK, SECRETARY l. C. ADELSON, ASSISTANT SECRETA~Y W. T. CHAPMAN. ASSISTANT SECRETARY W. M. IMLAY, FISCAL AGENT

ADDRESS REPLY TO


In order that the Board rray be kept advised regarding

currency movements to and from the Federal Reserve Bank) a for.m has been prepared for tho use of the Reserve Banks in sugmitting

reports to the Board shO';ving these movertents vvi th respect to

banks in Federal Reserve and Federal Reserve branch cities and

banks outside these cities.

In case the inforrration is available it is requested

that the first report cover the month of October and be subrr~tted

as at close of business October 31. !n case sufficie~t data

covering the month of October are not available the first

report rray be submitted as at close of business November 30.

Enclosed please find copies of the report form X

Yours very truly,

The Chainr.an, Assistant Secretary. Federal Reserve Bank~


,

...

. '

EX-OFFICIO MEMBERS W. P. G. HARDING. GOVERNOR ----, VICE GoVERNOR ADOLPH C. MILLER WILLIAM G. McADOO

SECRETARY OF THE TREASURY CHAIRMAN

CHARLES S. HAMLIN

JOHN SKELTON WILLIAMS COMPTROLLER OF THE CURRENCY FEDERAL RESERVE BOARD

WASHINGTON

October 21,1918. .

J. A. BRODERICK, SECRETARY 2 {} L. C. ADELSON, ASSISTANT SECRETARY -W. T. CHAPMAN. ASSISTANT SECRETARY W. M. IMLAY, FISCAL AGENT

ADDRESS REPL V TO FEDERAL RESERVE BOARD

X-1253

SUBJECT: EXPENSE ACCOUNT CURRENCY SHI~~NTS TO BE REPORTED ON FORM 96. .

Dear Sir:

1~y we request that your IT-onthly report of Current

Expenses 1 fol'Til 96, show under head of "Currency receipts and

shipments - Expense 11 all payments of postage1 expressage,

insurance, etc., on account of currency shipped to and

recoivedfrom member and non~member banks. . .

It is desired that the first report of this information

be shown for the IT-Onth of October, but if data arc not avail~ able, the first report rray be shown as at close of business

November 30 1 1918, and at the end of each month thereafter

Yours very truly,

The Cha:i.rman, Assistant Secretary~ Federal Reserve Bank,


EX-OFFICIO MEMBERS

WILLIAM G. McADOO SECRETARY OF THE TREASURY

CHAIRMAN

JOHN SKELTON WILliAMS COMPTROLlER OF THE CURRENCY

-.


WASHINGTON

October 23,1918.

J. A. BRODERICK, SECRETARY l. C. ADELSON, ASSISTANT SECRETAR-Y W. T. CHAPMAN. ASSISTANT SECRETARY W. M. IMLAY, fiSCAL AGENT

ADDRESS REPLY 'TO


x..:.l254

SUB.JECT: DRAFTS DRAJ.VN FY 'l'HE FOOD ADMINISTRATION GP~IN

..,<

< \VfLLIAM G. MCADOO SIICIIETAR? Of'< TKE TRIWURY

QIAIIIIAN JOI:IN< SKI!~ TON WILLIAMS

COMPTROLLII OF 'J'HI CURRINCY FEDERAL RESERVE BOARD

WASHINGTON

J. A. BRODERICK, SICRETARY L. C. ADELSON, ASSISTANT SIICIIETARY W. T. CHAPMAN, AsSISTANT SECRETARY W. M. IMLAY, FISCAL AGENT


For your information, and for the purpose

of checking with your recorda) there is enclosed here~ with a copy of each mimeograph letter sent your Bank

during the past month.

Very truly yours, ..... ~ ......

J .A. BRODERICK~

To the Cha:lnmn.

To the Governor.

Federal Reserve Bank~


CONFIRMATION.

TELEGRAM FEDERAL RESERVE ~OARD

WASHINGTON, .

October 23 ,1918 .. x..:.12s7

SUBJE~: ACCEPTANCES OF U.S. FOOD AD!J:INISTRATION ~RAlN CORPORATION.

Federal Reserve Eank

Boston New York Philadelphia Clev3land Rir.hmond Atlanta Chicago Minneapolis Kansas City St.Louis IRl.las

Board holds that acceptances by banks for Gre.in Co~poration

are not to be regarded as covering exportations b11t are subject to regulations governing domestic acceptancas, aceepting banks being

limited to fifty percent of their capital and surplusa

HARDING


/

TELEGRAM


WASHINGTON

CONFIR!vlA TI ON October 22,1918~

Federal Reserve Philadelphia Cleveland Richmond Atlanta

-!\gent,

Chicago St.Louis Minneapolis Kansas City Dallas San Francisco

SUBJECT: RESERVE REQUIRElviENTS BANKS IN OUTLYING DISTRICTS.

X-1258

Referring to provis~Gns Section 19 Federal Reserve Act as amended September 26th, relatL~g to reserve requirements banks in outlying

sections central reGerve nu reserve cities, Board has decided it will not attempt to define such outlying sections in cities in your

district Board will however give consid~ration to individual appli~

cations received frorc such banks as rr.ay feel c.atHled to ch?tngc of

reserve requirements pursuant to terms of new law. Appli~21tion should

shan location of bailk> alco capital.r surplus and prcfits and deposits.t

latter divided as follons! individual deposits, deposits and collection

accounts of local bankn and trust companies> and deposits of out of

town banks. Such applications should bo submitted through and bo

accompanied by recou.rr.end~tion of Federal Reserve Agent. You~ however,

are authorized to subm:i..t direct to Board genora1 application in behalf

of all such banks in your district without waiting individual action of

banks concerned. Kindly advise your me~bors accordingly_

HARDING

Governor.


..

TELEGRAM


WASHINGTON

October 23~1918~ Y.-.:.).259

CONFIRMI\ TI ON

Telegram to Governors of aJ.l Fode1al Reserve Ba.nks:

SUBJECT: !RANSIT AND AUDIT C_ClNFE~:

In view of the rrany inquiries raised as to transit questions

and. accounting between Reserve Banks Board. zugges~s that a

conference be held in Chj_cago Monday No'Zember eleventh and that each bank have in a'Ctendance the officer 5.n charge of

the transit d.epartrr.ent and the auditor of the Bank stop

'the banks are requested to sugges~ by telegraph topics for

discussion stop a tentative program wHl be p1epared and

sent to each bank stop Board requests that each bank make

a study of its own float situation with view of dete~ining

the actual time it takes to obtain actual settlement-for

items handled either for its own account or for the account

of other Federal Reserve Banks and that its transit represen-

tative be prepared to discuss with representa-tives from other

Federal Reserve Banks the desirability of adjusting the inter-district time schedules .. stop Please advise names of your

ropre~entativcs who will attend also ad~ise McKay Chi~ago who

will upon request make necessary hotel reservations.

HARDING

GOVERNOR


?

EX-OFFICIO MEMBERS W. P. G. HARDING, GOVERNOR ----, ViCE GOVERNOR ADOLPH C. MillER

'N{LLIAM G. MCADOO SECRETARY OF THE TREASURY CHARLES S. HAMLIN

CHAIRMAN

JOHN SKELTON WilliAMS COMPTROLLER OF THE CURRENCY FEDERAL RESERVE BOARD J. A. BRODERICK. S~~p~RY L. C. ADELSON, Ass)St.ANt $ECRETAffY

W. T. CHAPMAN. As.sl!itANT SECRETARY W. M. IMLAY, FISCAL AGENT

WASHINGTON ADDRESS REPL. Y TO

October 26,19l8. x-:..260

SUBJECT: F'IIELITY BONJS.

tear Sir:

W:i.ll you kindly furnish us for the b::mefit of cur

record the following infomation concerning fidelity bond

protection carried by you:

Ne.n:e of Company

Amount of total

Nature oi c o;re rage


------~c~)~ve:agQ ________________________ ~R~e~rr~a,~r~k~s~----------

Under the caption "Nature of coverage" please indicate

whether primary, soconda~J) third or fourth coverage and state

what officers are covered. Also state vvhether blanket or in-

dividual bonds.

Under the caption 11 Rermrks 11 in the t.ase of blanket

bonds) state the amount that individual employees or officers are covered for and if such individual coverage gives you the

benefit of investigations made by the bonding corr,pany. In the

ease of individual bonds state whether you receive the benefit

of investigations made by tho bonding company.

Very truly yours,

The Govc rn or, Assistant Secretary. Federal Reserve Bank,


} I

..

r-'- ? I~ ~ G B. ;_ (\fl

Washington

October 29 1 1918. X-1264-a

CORRECTED COPY

Confinr.ation

(INSTRUCTIONS TO OPERATOR: Send following rressage to each of the banks ;.1amed)

FEDERAL RESERVE BANK: Boston New York Phil.:tdelphia. Cleveland Richmond Atlanta Chicago St.Louis Kansas City Minneapolis Dallas San Francisco

Mr. Albert Strauss has been sworn in as a rr~mber of the Federal Reserve

Board and has been designated Vice Governor.

HARDING


EX-OF'f'ICIO MEMBERS W. P. G. HARDING, GOVERNOR ----, VICE GoVERNOR ADOLPH C. MILLER WILLIAM G. MCADOO

SECRETARY OF THE TREASURY CHAIRMAN CHARLES 5. HAMLIN

JOHN SKELTON WILLIAMS COMPTROllER OF THE CURRENCY FEDERAL RESERVE BOARD

WASHINGTON X-1266

Novanber 2, 1918 ..

SUBJ...::CT: Lu.dit ani Tra:.1sit Confermce, Chic'lgo, Conc;ress Hotel, 10 a.m., November 11, 1918.

Dmr Sir:

In connection \vith the conference. sugc;sr:,ted

J. A. BRODERICK, SECRETARY L. C. ADELSON, ASSISTANT SECRET ArtY W. T. CHAPMAN. ASSISTANT SECRETARY W. M. IMlAY, FISCAL AGENT


topics have be :.m rocei ved and seve1al copies of .s, tentative

program are submitted he:cewith so th::tt those '1IDO v1ill

attend may acquaint therabelves with the subjects th1t will

be taken up. The reprosent:1.tives of the ban. .. l.rs will, of

course, be }:Br:;U.t ted to present such other ra8ttors as may

suggest tha:1se1ves.

1--s stated in Governor R:trcli:cJg s tclegran of October

23rd, the Board pa:cticubrljr dasLes that t~1e rep:cesentatives

of the vtrious banks be in o. position to thoroud1ly cUscu.ss

the float situation cmd the bearing it has upon the necessity

for a ~evisi en of time schedules.

If my further information is ~esired as to the

coufererr~e or arrange:nents 1t Chica .. ;,u 9 please wire Mr. C. R.

McKay, Deputy Gove1nor, F:-deral Reserve B"lnk of Chic3.go.

Ple3.se acknowl :clge receipt.

Vory truly yours,

The Govemor. Federal Reserve Bank, Assistaut Secretary.


..

... X-1266 A

COPY OF GQV_;RIJOR HJdDL.JG'S T.:ll..GGRLi.v1 OF OCTOB& 23, 1918,

SUGG-.:.:STHJ3- THAHolT JJTD LUDIT COm'.:.~.IL.:llC ~ ~o B.::~ .l!LLD IN

CHICAGO, iv10lWl""Y, l;OV.dviBLR 11, 1918:

"In view of the many inquiri.es raised as to transit

questions and .'lccounting between Reserve Banks, B~J

X-1266 B

Chic age, Illinois.

Congress Hotel, 10:00 a.m. November 11, 1918.

... * * * *

Federal Res 8l'V e Banks represented as followf':

BO.:>TON: Mr. Willett Mr. Cu.rri er

NBW YORK: Mr. Hendriclm Iviro Jefferson

PHILlLD.&:..PHIA; .Mr. Dyer Mr. Le Bold .Mr. Gam on

C LEV.ill.AND: Mr. Strater Mr.- Wagner

RI CinvlOJ'ID: Mr. Blackburn Mr. Cadwallader

ATU..NTil..: Mr. Pike Mr. Albertson

CHICAGO: Mr. Burgess Mr. B8.Chrtan

ST~LOUIS: ~ilr. Lttebery Mr. Novy

) MINH~FOLIS~ Mr. Long Mr. Core l(ANSAS CITY: Mr. Anderson or Mr. Wardell

Mr. Cross

DALLAS: ilr. Teylor Mr. Weiss and possibly i.1Ir. Gentry

SLN FRANCISCO:

Sug.;ested topics attached.


. X-1266 0

Fedel'Sl Reserve iBanJr. a~counts:

(a) Uniform sta.tenents.

(b) Stat erront s to show both debits and crEdits.

~ggested ]?z.:

1-7-9-10

2

(c) Desirability of pr8sent system of m~:in{~ 9 . correcting aJ.tr:l.es aid entries for r9turued. it ellll by deductions from statements.

(d) Currency shipment a.dvic es to show cost. 9

(e) Statements to be rendered by branch b6.tlks direct to other Federal RescJrve banks.

1

(f) Exchange of statements between branches. 1

(g) General adoption of petty differences plan.. 7 ACc(Mnting Methcxls:

(d) Resumption o lAmlop Anderson plail

Gold Set tleman. :Fund:

7

(a) Uniform statenents showing detail of cred.i ts 4 wired.

{b) Peyment for :redisoounts between Federal Re8erve 11 bankS

(c) lkily direc~ settlement by branches tlu-ou~l fund.l2


'(" .

- 3 - x- 126G

Gold Settlemer..t Fund (Contim.ed):

(d) Deduction of miscellanems clBrge:: from ~uspense C!'edits.

("'!. . '.

(e) Fig;u.res for da5.ly settlements to be wi --:-ed Bosrd ani er,tel~ed 1s of da:l of c:ed.lts, 7

(f) Proper 17lethods of handling deJ.uc'.;io:.1s froa ?" credits v.hen deductions exceed tota:i. erccEts for day.

(g) Suggestions as to improvancnts.,

Float:

{a) Fede1al Rese:rre 3oard's mothod. of cornputi:og float percen tat,res.

1. Goven1ment 'lccounto 2. 1-Katured collection i tern debits 3. Earning float. 4. non-compliance vii th Board's let t

I

- 3 - X-1266 ~

Collections: Suggested~

(a) Service char0es for un:r:aid ite.11s between Fcde1-a 1 4 Reserve banks

Collect ion item ~redi t s:

(a) Uniform method of deferring letters co-.1.taining 7 items of dif:'erent availabilities.

Collection t.tem deb::.t s;

(a) Periodical verific

'

If

X-1266 D

TP.hNSIT' CONF~1JTCE

Float: Suggest ed_!?x:

(a) General.

(b) Should National and Federal Reserve bank notes 3 be counted ae float

(c) Uniform method of computing number of days itens 9 are in process of collection.

Time Schedules:

(a) Revision. 1. demb er banks ~ 3 2. Federal Reserve B'=mks.

Cash Letters :

(a) Description of items. 1

(b) . .?.cknowledged and advised by daily settle;wnt 3

(c) Return to members of other districts all collection 5-7 itens included in cash letters.

(d) Properly prepa;ced letters by member bmks taking advantage of direct routing. 5

(e) Should member banl'".s be per.11itted to remit for cash letters :1r should their accounts be clla.iged after allowir:g proper time to cover. 6

(f) :.ra-L1ner of handling non-cash it ems included.. 6-7

(g) HandliflJ' of items drawn on banks not on par list. 9

(h) Ac 1mowled~ent t.o branches. 12-

(i) Discontinuance of cha.J"l~'i~13 totals of cash letters 7-

(j) Railroad cli:afts md cl1;:,c :s .c.arked "P:J.yable 7-

Cash Items:

(a) Collection or .return of cash items forwarded in 3 error.

(b) Responsibility of Fed8:ral Reserve Banks in collecting 3


. .

I

I ~)

X-1266 J)

Cash ItJms (Continued): Sugr;ested b1[l

(c) Ha.ndli~ of cash items forwarded by Treasurer of United States as rcegu.hr cash itens a11d not as special items as requested by Treasurer.

Returned !terre and ~lissorts, and ItemL_not on P'1r List;

{a) .. 1ethod of haad.ling.

(b) Direct to Fed ~ral n.'3S8rve bank o:.. bLanches Of items received from me:nbe:.:s in Fedeial Reserve city or b:.:anch city, or direct 'GO se .. 1ding banl-c.

(c) !tems on non-]_:)e,.c points to be returned vri thout exception.

{d) Discontinua.nc3 of obtainin,; .L,eceipts.

Par List:

5-7-10

7

(a) Advisability of s~parate par list is~ued periodically 4 by ea~1. :B'crl.'3ral J.es3J.~ve bank .:md bro.nch bank in additi:

(b) Removal of lL~1i t 011 ~xchange drafts

3

4


'.

--

I

- 3 -

Drafts of Fed-.::J.-.'11 Reserve B1llks on Other Federal RGs.; ... vc_ :: tn!u.

( c l :Jisco;:lt 1nuaJ.1ce ui au vice Purc11ae,..,s o:lr Exchange by Fed,;:u.al Hes:_ve Bm1g:_:

(a) Uniform ~ethod.

Collect io;.lf> :

(a) Ldvices of p:tyment of time ite:1s.

X1265 r

?

7

3

(b) Uniform methods for :r~ndli:::1g non--cash-0oEec~ic~'1 items 4

Negotiability:

(a) Ite..1s drawn "payable in exchJ.nge ."

\lire Transfers:

(a) Uni fo .on closing hour for m.::hO &tage star.a:;>s,.

,r ...


EX-Of:'P'ICIO MEMBERS

WILLIAM G. McADOO SECRETARY OF' THE TREASURY

CHAIRMAN

W. P. G. HARDING, GOVERNOR ALBERT STRAUSS, VICE GoY!RNOR ADOLPH C. MILLER CHARLES S. HAMLIN

JOHN SKELTON WILLIAMS COMPTROLLER OF THE CURRENCY FEDERAL RESERVE BOARD J. A. BRODERICK, SECRETARY L. C. ADELSON, ASSISTANT St:CRIT'(

W. T. CHAPMAN, ASSISTANT SECREfA;Jtf~ W. M. IMLAY, FISCAL A~ENT ': .. ~ f

WASHINGTON ADDRESS ftEPLY TO FEDERAL RESERVE BOARD

November 7)1918. X-1267

SUBJECT: INVE~TIGATION OF FEDERAL RESERVE NOTE CIRCULATION~

Dear Sir: There is enclosed herewith a general outline of a study of Fedcnl

Reserve note circulation :l'hich hCt.s been approved by the Fedenl Reserve BoetrdJ and Nhich .vill be IT;J..de by its Division of Analysis and Research. A part of the infomation Nill necessarily have to be obtained direct frorc banks and business houses. Portions of it rr.ust 1 however) be provided by Federal Reserve banks 1 cvh ile on one or t'NO points where the data might be obtained direct from nember b

X-1267 a. FEDERAL RESBrNE lWTE CIRCULATION

In or:ler to obtain a cor:plete and thorough account of the present situation Nith reference to the circulation of Federal Reserve notes in the United St=ttos1 a study} framed along the follmdng lines ha3 been authoriZed b)' the Board and undertaken by the Division of .Analysis 3.nd Research.

(1) Con,pile frou data already at hand in th3 BoarJ. 1 s publications and files corr-plete tables shov.ring the issue of Federal Eeserve notesJ in tha aggreg.:ctc c.nci by nonths, to Federal Reserve banks, Provide cr.2lxts shoNing the aggregate note i..ssue and. shmving1 by separate lines; on the sarr.e chart, the gross arnount of notes rr.onthly issued to each Federal Reserve bank} either frorr, the Bureau of Engraving and Printing, fro~ the ~~n~s, or fro~ the Sub-Treasuries, the effect exhibited in each Cdse being the amount of notes actually ootained by the Federal Reserve Agent for use.

(2) Prep~re tables of statistics and charts exactly parallel to those rr~ntioned in paragraph 1 1 except that in each case the effects exhibited shouli be the note3 is3uei by the Federal Reserve Agent to the Federal Reserve bank for use by the latter in rr.aking actual payments. The differences bet:men the sho:vings rrade in paragraphs 1 and 2 will represent the an.ounts heli on hand by Federal Reserve Agents and Nill have an interest :?.S showing hoN the Agents have been equipped. fron: tirr;e to tirr.e with notes held in their custody for the purpose of nesting ,ossitlo denBnds.

(3)0btain and corr:pile frorr ec,ch Federal Reserve bank, by rronths from the be-ginning~ tables shoNing the gross an;ount of Feder::.l Reserve notes paid out by the bank to customers, and the gross areount received by the bank fron: all sources. Prepare charts shoNing1 by separate line;;;~ the gross an..ount paid out) the gross arr,ount received 1 a.nd net differences} the latter being the actual net amount of circv.lation outstanding. ShouU it be im~ossible to obtain figures in this foro; fron, the beginning, obtain therr: in so Lr ::..s figures will permit 1 .;..nd if for any reasorj tney should not be available c..t all, substitute figures sho-r~ting the quantity of Federal Reserve notes sent in to the Treasury for redemption1 as indicating the current Nithdn:.vals frorr. circulation1 these to be charted. in the san:e Nay ..ts the issues of notes.

(4) Obtain fron. each Federal Reserve b:mk figures showbg as far back as possible the occasions or reasons calling for the issue of Federal Reserve notes> as, e.g., issued in exchange for gol~, issued in response to checks and drafts dr~Nn on the reserve account Of the trorr,ber banks; directly issued 2.S result Of the re-discounting of paper. Analyze these returns in order to show percentages of total notes issued 'fhich .rv-ere represented by notes issuei for each of the pur-poses specified.

(5) Obtain f rcru a group of selected member banks in each Federal Reserve district figures shoNing the total amount of Federal Reserve notes ~eceived by it from the Feder::tl Reserve bank of its district during a given year, together with analysis of purposes for w:'lich it obtained the notes; such as, e.g.,d.irect pay-u.ents to de:;o3itorsj payu.ents t'll2.de :'!.S the res1.1.l t of rediscounts obtained by cu.s-toners for busines3 purposes (crop rr.ovingJ etc.) :Lnd payments rrade to other banks as the result of rediscounts or purc[-,ases of their :paper. Collate ;,n.:: corr.pare the figur~s thus obtained from~ say_, ten representative banks in each district, or one hundred btenty in alL


) --J- X-1267 a

(6) B.3Q1.l~st a nutLb.:;r of rJpt8sentativ 3 whol3sale). jobbing1 and r3tail hou.s3S to analyz3 spJcifi9d data} to bo nam3d by tho Board, th~ circulating ~~diumwhich

th~y r3c~ivcd, in ord3r to ascertain the p3rc3ntag3 of such rcc3ipts consisting of F3d3ral R0sJrv~ notJs. Also ask such h9us3s to stat3 wheth~r th~y hav3 blan in th3 habit of dir3ctly rJ~i3positing such F~d0r~l R3s~rv3 notas in th~ir banks or :paymg th,;,tn out ~gain.

39

(7) Obtain fron: .3a.Ch F3dJrc:..l Rss:'.rvo bank an analysis for a specified p0riod of th.; quantity of r~s~rv-3 not;s is.SU3d by. oth.Jr rsd3ral Rescrv~ banks which haV$ b~3n d3pos~tJd ~ith it) as contrast~d nith thJ quantity of its own not~s which have boan d~posit3d Nith it. Pro!=>a.ro frorr thes3 data. naps sha..ving pictorially the curr3nt$ or moven;::.nts of F..jd0ral R3s;3rv;:; not~s (a) fron: the Board .and its authoriz.3d ag~nci3s to tho R~s,:).rva Agants, (b) frorr th3 Ag.:.nts to ths .ResJrvc banks,. (c) fron: thi.:) Res.Hv::; banks to th~ n.:;tLb.::r banks ~(d) frorr. th.:) m.3mb0r banks to th ... public_. .(..:,)- fron: tha publi'c back to tha m3n;b0r banks; tf ), frou.- thd u~m~Jr banks back to ~hv R~s3rv~ b~nksJ and (g) frorr. thu R0s0rve banks ba~k t~

th~ Traasury for canc3llation. Also sh~v by shadad ar3as on a blocked chart. th~ r~lat~v~ position of th~ circulation in th3 various F0~sral R3s~rv~. uis~ricts as consisti11g of F~dt}ra.l RosJrVe not~s and all oth3r forms of currancy ...

(8) ob-tain and tabul~ta statistics frorr. tha r~cords of th0 Gold. Export. Con:rr:ittee and. fron: th.=. puatorLs Hous.:,a1 shoNing mov.3ments of F3d3ral Ri3S.Jrv:, notos out of and., if possibl.J~ into. th0 Unit..;d St~t3s during th0 p-3rio.d that such records h.;.va b.Ln kept.

(9) From all of th~ f9r~goL1g d~ta formulatJ a t~ntative 3stirrat3 of th~ loca-t.i.on of F.)daral R~s~rv3 not~s) NhJth3r in th~ hands of Ag.::snts> vaults of R~servs b~ks1 vaults of ~~~b~r banks~ safos ~nd drawJrs of busin3ss hous3SJ pockJts of th~ public, and -ooss.3ssion of foraig-nors .. From th3so data praparc conj-ectural 0stin.ate of probabl3 'amount of F.:ld;ral R:Jserve not~s hoarded or actually kept out of activ3 hand-to-hand circul.a.tion ..

(1~) Pr~parQ p~rc~ntagc figur3s showing av~ragJ lif~ of F3daral Res0rve notosJ b.a.s.in~ this upon s3lact\3d data obtain~d for tne various d.)tlominations. From this tor.m 3stinat$ of. actual cost (n~nufacturing cost) involv~d in providi~g paper currency circulation> consisting of F3d.:ral R3sJtv-e not:Js ~

(11) Contr.ast th3 da~a ~3latin~ to activity ~nd cost of FJd~ral RJs~rv~ not3s ani cost of rJs3rva hQld. bahind th~m :vith S\.tch oorrasponding data as are avail- .. abl~j rJlative to th3 sam~ it~ms for national bank not3s or gold c3rtificatvs> or both.

(12). Pr:-par.) brief d~acriptiv _, ta'blJs for d~ff~rant kinds and class3s of .circu-lation1 shoning thJ ehang~ in tha c~position of th~ circulation si~e3 tha or;;a.niza.tion of th3 FadJral R3sorve syst:3n:1 by rr.,onths. Frorr th~s3 tablos d.3duc,:; conclusion as to actual econott of goli :rougnt about through the use of Federal Reserve note~~


,_

X-1268

TELEGRAM


WASHINGTON

CCNFIRMATION

TO ALL FEDERAL RESERVE AGENT~~

Please instruct me~b8rs other than nation~l banks in your district

to report on forrr, 105 neretofore sent you condition as at close of business

Friday Noven:ber first. Rej:~Orts should be trailed to you ;vithin ten days

after receipt of form by rr,ember banks.

(signed) Strauss CONFIDENTIAL:

For release 10 a.m. Novenber 8~1918.

P. S. The Comptroller has issued sirr:Har call for national banks.

Vice-Governor.


..

EXwOF'P'ICIO MI!MBER8



COMPTROLLER OF THE CURHENCY

Dear Sir:-


WASHINGTON ~ovember 15~1918.

SUBJECT: PRJ::..P :~RAT J: ON OF J\ N:rC.AL RE'-'ORT.

W. P. G. HARDING. GoVERNOR ALBERT STRAUSS, VICE GoVERNOR ADOLPH C. MILLER CHARLES S. HAMLIN {1 -If ---- w.,!. J. A. BRODERICK, S&

-; -c:,- X-1370

entire report covering the operations of the Board and the Federal reserve

ban~:s 1)e cont:tir:ed in one vo:Lur::e of re::-.sonable size., it is necessary to

rG:,uest the Federal Resor1c .Agents to keep to t"i:eil.~ teJ.Ct . avoiding unneces3ary

ver;~iJ.so 2cn:l prolixity. It is s~ggc;3ted that in n ost cases the re?orts should

not exceed five or six thol'.sard i.'ords. 'Sooe of the reports subu.:itted last

year were several tin:es this length and it was necess2:.ry to edit them in order

to bring them within reasonable limits.

It is suggeBted that in yreparing your report that you endeavor to give

stress to the particular cor;mercial or financial :levelopments ~vhich have

s;?ecial apl?lication to conditions in your o.vn Jistrict. It does not a:;.;pear to

be essential that the reports fron the several districts be gi'Ien a national

coloring; tha.t being the sco:~e of t:i.1e Boa.d. 's oNn report, but in each of the

.:listricts thare aill bs some outsb.nH::g industrial or businass developments

u;on rvhich stress ca.n properly be pla.ced.

Your attention is invited to the general outline., enclosad. herewith;

'Nhich it is suggested be follonea tt.s far as prc,cticable ir. or:ier to secure

uniformity in the character of the reports.

An attarr:pt was rr.z..d.e last yec:.,r to have the reports in han& by Decerr:ber

20th., but it :ms found that this date viTas too early and that the inclusion of

tha figuras at the eni of t~10 year delayed actual progress. The Board has

J.Ccoriir..gly J.ecid.ei this year th.:..t all reports be ~olaced in its possession in

con;plete:: forn: b;l January 81 1919.

Fe1er~l Reserve Agent, Federal Reserve Bank 1

Very truly yours.,

C-overnor.


X-1270-a

SUGGESTED OUTLINE OF TOPICS M:D THE ORDER IN 1','HICH THEY SHOULD BE TAKEN UP BY THE FEDERAL RESERVE J,GE~ITS IN THEIR .AN:WAL REPORTS FOR 1918 ..

1. Financial results of operation;

(a) Earnings 1 expenses., diviC:ondc,. etc.

(b) Comparative ba1anr;e sheets for December 31,.1917 - 1~18.

(c) Profit ani loss statements for 1928.

2. General Business and Ba11king Con~citions:

(a) Volurr:e of business~.

(b) Labor.

(c) Money }JJarket.

3. Discount Operations:

(a) Re:liscounts - Conr;ercial Pctper

(b) Reiiscounts - Liberty Loan

-.. Tr::::.::.e Accept:...nces

5. Acceptc:,nces

(~) Growth of open rr.arket for acce.i.)tances (o) Policy on acceptance ~urchases

6. Reserve Position

'1. 1v:oveTLsnt of Merr,bership

(a) National Ba~k

(b) St~tte B:mks

8, Relations with N?.tional Bank Merr;bers

(a) Discount operations

(b) Trustee ~ewers

9. Relations W'ith Sk,te banks ::..nd tru.st companies:

(a) Discount operations

(b) Exa.minct.tions

(c) Reserves Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

-2- X-1270_,4

10. Fiscal Agency Operations

(a) For Treasury Departn.ent

1. Allotrr:ent of Treasury Ce rtiiicates arr.ong banks in district

3. Flotation of Liberty Loans

4. nork in cor.nection with sale of V!ar Savi:1gs Ce;tificates.

(b) War Fin:mce Corporation

(c) Ca~it.:ll Issues CorfX'Littee

11. Note Issues

(a) Feder~l Reserve notes (b) Feleral reserve bank notes

12. Position of corr:ttercial banks :;tS a result of Nar financing:

(a) Increase of their obligations,

(b) Effect on cormercia.l paper of district.

(c) Relation to., and effect on) ger:eral business. 13. Policy to be pursued in restoring liquidity of bar.ks:

(a) Probable tirr.e in which they can clear up their "war pcctper" ..

(b) Policy of Federal reserve bank toward therr rr.e2.nNhile.

14:. Operations of Fe1eral Reserve Bank br2:."1ches:

15. ~iscellaneous: including:

(a) Internal organization.,

(b) Clearings 1

(c) Collections

(d) Gold Settlerr:ent Fund

(e) Foreign accounts (f) Banking Quarters - neN buildings.


FED1\RAL RES.Er.VE EOAED

FJashington

SU?JECT: IClecticn of Cl0-s2 A ,o..nd Class B directors.

The 3o~"rd h.::.s been :.skad Nhether 1 unier Section Four a.s .:;..rr:er:J.ed by Act of Se1~ter. ber t,lenty-sixth) a ch:1irt112'.n hol\iing e-:.n election of directors r:;.,y refuse to count the vote cf a rLerr.ber bank unless wit;1in time lirdt prescribed. by him the h:.nk tL3 filed the .. necessary C3rtif icate authorizing one of its officers to cast its vote. The 3oa.ni h,~.J ruled that a rrerr:ber t.::.nk is entitleCi. to have its vote covnted if the certific:cte in ;uestion is f ilei Nit'n the ch,drrr

EX-OFFICIO MEMBERS




WASHINGTON

X-IZ72

Dear Sir:

Inclosed herewith I hand you co j;Y ()f c. h;ttcr from

~he Treasury De:r;artmunt containing a statement of the cost

of pre:r:aring Federal reserve notes during t.he rwnth of

last, the amount chargeable against your bank beiag

\Jill you please de:r:;osit this amount in thE General

Account: Treasurer, U. s., on your books, and issue C. D.

W. P. G. HARDING, GOVERNOR ALBERT STRAUSS. VICE GoVERNOR ADOLPH C. MILLER CHARLES S. HAMLIN /..;

--~ --i~. J. A. BRODER-iCK. SECRETARY L. C. ADELSON, ASSISTANT SICRETA~t-Y W. T. CHAPMAN, ASSISTANT SICIETARY W. M. IMLAY, FISCAL MiENT

ADDRESS REPLY TO


on Form 1, National Banks, for credit of "Salaries & Expens0s,

Federal Reserve Board, Special :Fund," cost of preparing Feel-

eral resGrve notes, nniling duplicate c. D. to the Federal

Reserve BO

'" j

47

fREASURY DEJ;lillT"JENT WAmlt:UGTON November 14. 1918.

The Governor, Federal Reserve Board.

sir:

. By direction Qf the Secretary you are advise

'

,_

,; Ill X-127 . .>

Mim.-.tes of session of Advisory Council with Board., at a joint meetipg cf the Federal Reserve Board and the Advisor-y Council, held in the Assembly

Ronm, National Metropolitan Bank Building, Washington, D. C. on Monday,

. November 18, 1918) at 11 o'clock~ A. M.

.c'rescnt~

oi the Federal Reserve Board)

Mr. Harding, presiding .Mr. Strauss Mr. ~in Mr. Miller Mr. Williams Mr! Broderick, Secretary .. and !-fl.r. Forgan Ur~ Rue Mr. M()~gan Mr;. Wing MrL Rcme Mn Norwood Mr .. Lyerly Mr. Watts Mr4 Mitchell Mr. Wilmot Mr~ Fleishhacker

of the Federal Adviso~ Council.

Present also: R. C. Leffingwell, Assistant Secret~ry of the Treasury.

Benjamin Strong, Gov~rnor of the Federal Reserve Bank of New York.

in opening the session, Governor Hardtng said:

"We are treating totia.y under far ha.pJ>ier auspices than upon the oc

casion of our last joint session. Today ,q are concerned with the l)toblame of reconstructian and pease insteai of those of the prosecution of the great

War. We have the pleasure of having li'lith us today ~. Lef!in.f!}vell., Assist-

ant Secretary of the Treasury, who is present to ~represent the Secretary

of the Treasury. Governor Strong, of :.he Fecleral. Reserve Bank of New York,


X-12B - 2 ...

is also precent at our request to contribute the benefit of his views to

the meeting. You have before you the topics suggested by the Board-for

' discussion at the IT~eting. They are very comprehensive questions anl are

all inter-related 1 so instead of trying to discuss therr. in detail I be-

lieve I might bf\t t~r presen"t briefly a g:meral picture of the situation

as the Board sBes it.

It rray be nell to take a retrospective view of what the Federal Re-

serve Board has done during the past four years, or rather~ some of the

things it has not done. When the banks were organized ~on November 16,

1914 1 the shock given to credit institutions and industries by reason of

the outbreak of the European War had largely subsided. Through the

n:eaqures taken., a.nd. particularly through the issue of the err.ergency

currency :proVided by the Aldrich-Vreeland ActJ as amended by the Federal

Reserve Act 1 the Feder~l Reserve Banks found therrselves at the outset

apl:roaching a period of easy rroney. !n 1915 an

-:3- X-1873

b:lllliOD result vas that Ne gained sorr.ething over aJ ,~lollars in gold

f rorr. JJ..nua.ry l) 1915, t0 J~~nuary lJ 1917. '"Te s::t.N a very large increase ir.. thb

gold. volurr.e of 'bank creii ts as a result of our gold expansion.

Tha only period. .1hen tho Fed.eral Reserve Boa.rci lll'as able to exercise

.::my effective cor.trol over the bankin;;:. situation w2~s :iuri"1, the last tN"O o: three months of 19101 and the first q_uc:.rter of 1917. You Nill remember th:..

during these rronths ~he 3oard discouraged the purch.;cse of r.:unici:pal vVarrz.nL:.:,

advanced Uscount rc,tes 1 ~n:.i alvise:l the Feder;;:.l Reserve Banks to put thei~

afL-'irs in the n.ost liquii shape possibls 1 and that very rr.aterial increases

in reserves hai the only provL1ce of the banking

con:r::ur1ity in this cor.:::"ectio

-~+;

.,f:,e questio'l ~~cvV C~.:c-i s0s, has th6 tirLe corr;e Nhen the Federal RtH'e:rve

'=-""lks ~:nl the Fc;;.Gl'al Resec:e .~oa"J can assume to undert,::~.ke any aggressive

po:icy relating to Uu topi1.:s .. ch?.t hc..v3 been suggested to you for consilera-

tion, or Nheth:3:r rve shoul..i r.Gr:::ly consi..ior than. anl get rea-1:1 for tho tirrJ

.:hen Ne C3.n proper:y u.n:..JrL . .ke thJ exorcLD of all the functions entrust3d

tc us unJ.er th~? LHTiS of tha Fe.::..,;.r3.l Reserve ;,.ct. It seerr.s to rr.e that ,;

X-1273 e:;~.:J

i..J::-bi} H:ies. We rL'~t: of coun:e} tear in rr.i:r.d that th~re is a point: beyoh.'d:

.. '-:~ch deficiency in :;:eservvs ~gair.st leposits cannot be pern:itted.

In::lications :10 that de.' eire corc~ng 'ba.ck rapidly to a peace basis. A

J?Tr:.Jt n.any of the :.es~.;ricti.ons irr.posed by the War Industries Board an::l other

"!:ranches of Executiva Lay1at+1~.ents of the Gov8rnn.ent are fast being rerr,oved.

For exarr:ple, the dcrr.estic use of gold and silver for indu3trial purposes ~.r 1

in the arts has been freed of restrictions. I believe that the rercoval of

restrictions against the use of goli anJ. silver in the arts .vill have a very

good effect. bec3.use .vhile it uay result in the presentation of sone Federal

Reserve notes for reJenption there Nill be afforded an opportunity to de-

tmnstrate that the Fe:ieral Reserve noto is what it purports to be - red.eerr.ab'-o

in gold - and .vill show the people that there is no pren:.ium on gol:i in thi~

country, 1vhich can be obta.ined by the presentation of Federal Reserve note~; ..

The restrictions in:posei upon the ex}>ortation of gol:i vvere rrade effectprs

over a year ago ( in Se_ptenber 1917) by an Executive Or:ler of the PresiJ.cnt

vvhich put the Nhole rr.atter in the hanJs of the Ser.retary of the Treasury, ,;rho

in turn, gave to the Federal He serve Boar:l po ver to issue licensGs in specific

c::~.ses. The question arises as to when the Board should alv~se th.at these

restrictions be riodif ie:i or lifted entirely. The sue;::estion has been rra:ie

that it ;v-ould be proper to begin .vith the South ani Central Arr:erican nations.

The Bo~rd itself is not unanin:.ous on this subject. The uajority Of the Boar:l is of the opinion that it vvoulcl be well to be assurel of our d.OILestic

positio~ before taking any such action: to rraintain the integrity of the

Federal neserve note, to be prepared to nz..ke any necessary reden,ptions to

est::tblish the fact that these note are always redeen0.ble on J.err.ani in gold~

So far as our lealings JVith foreign -::ountries are concerned, it is evident


' ... ~

~.: 53 X-1473

"tlJ.a+. 01lr exc~a.nge situation all over the world is rraterially improve.d. This

,uore satisf.actory exchange position arises .from several causes -.direct

neg.o'tiat.ions by Unj_~ed. St:tted Treasury agents abroad and,. the most corr.pelling

factor is.., of courseJ. our r.:il5.tary success ... Our present exchange situation

is by no me~ns acut~.

The suggestion has been rra&e th~t 'it ..rvriuli be.wise policy for the

Feiaral Reserve Banks to reduce their rates on b~~kers' acceptances ~gainst

th~ exportation and importation of goods .. Such a course would give the banks

quickly ~vailable resources in the shape of prirr~ investn:ents and nould

en.;;..ble us to :meat foreign competition .. There woul.i be no reason thGn for

anyone. to hesitate as between d.ra-ning in dollars or in sterling or fee.l

:Ocliga~ to use starling b'aca.use of lo'lvrer ra.tas. In order to put the banks in

a position to give these. low rates it seerrs necessary to continue the exis~ing . . .

. .

rates on our internal transactionsw There does not appear to ba any reason .hy ne should. consider at this t'ime any reduction of the discount rate on

~inety day coll!II.ercial paper or meTLber banks 1 colla tera1 notes. Upon. the antrat:tce of the Un.i ted States into the war J. the Federal Reserve

Boari~ in line with its policy of supporting the Government to the utmost of

i~s ability, established a diffetential rate on paper secur-ed by Governm.ent obligations~ The rate of interest o.n Treasury certificates and Governrr.ent

bonds was e~tablishe~ by the Secretary bf the Treasury after consultation

nith vario~s interests all over the country; and in order to make it possible

~or ~anks to engage in these transaOtions without being penalized~ th~ Board

felt that it Noul.d be helpful to establish a differential .. The result bas

been that the invested resources of the Federal Reserve Banks are between


)

...

-,,,.. X-1273

T)'f'. ..;.nd 80% b p::1pe~- S3CU!'ed by Gov .Jtmront obligations and the b::1lano::e in

cou:.ercial obligations 1 ;dth the further effect that the Federal Reserve

n')\.es outstanding are ti1vs .indirectly secured proportionately by Governn:ent - "'\ ~ . .j.. . o J.'. ~ga ~ 1.ons..

It is eviden~; tl1at Cl ~e11ction in the Federal Reserve Banks t rate on

b::1.nkers 1 accepi:.e.n..:fs Nill ha.ve a tendency to restore the proper equilibri.t:..a:

in the banks' inv.asted reeourc&s and give th~tt an opportunity gradually ~o

;;ork off these obligations securJi by Governrr,ent issuas.

There is one further t.hought Nhich I have not had an opportunity of

liscussing .,vith rr,y colleagUes of the Boad but v1hich I venture to throw

out - when the time comes for us to !Lwe larger dealings in gold ,vi th

foreig-n countries there should be reache.i son;e definite understanding, It

seetM to be that before engaging in such transactions we n:ust be assured

of the responsibility of the governments Nith .vhich we ::leaL It is, of

course, obvious that our de3.l ings .vith foreign countries nust be b3.sed

upon credit for sorr.e time to corr:e .. l:Ir. Leffing,l'ell says that the Treasury

expects to continue for sorr.e time to make advances to a.llied governrr.ents on

account of their pu.rchases in this country. \li,ben vve consider our otm

national debt and. the war obligations of Great Britain, Fran

-6- X-18'/3

ste Govanmant obligations out of the banks and get back to a basts of

1.iq1.J.i.i corrr.ercial paper the notes 'Nill autotraticc..lly reg;ulate then.selves

an:i JOlve any currency problerrs which nay arise, thus preventing the corr.-

p1 ica .. tions which aros~ at ths close of the Civil \Var.

1''henever we es~ab:isll a free golJ. rrark;;t in this country '.Ve shoul:i

bt; p

-

-9. X-1Z73

~n :-J.ll our discussions. It seerr.s to ~.e that you have gone even be1ond

U1e bounds of courtesy in ::leferring to the Boa.rd# and I >'~~'OulJ like to

c:;.ll attention to t':1e ~act that this Advisory Council is a body organized

by Congress .;d.t:> certain s:re~ific powers. It has the rigbt not only to

aivise the Board Lut also to criticize. its actions; it bas the right to

call for :my specific infonr.a.tion it desires and to ask 11the reason vl'hy:'.

As fa.r as I am concerned ( and I an, sure ruy colleagt.l.~.;.s of the Board take

the satre view ) I vvould JVelcone any suggestion and. alsc any inquiry that

you -vis~ to rrake as to the N.hy's and Nl:fl'refore 1s of the Board policies.

It seerrs to me that the a:ioption of a poliC)' of this sort by the Council

Nould be very helpful just now in building up sorr:0 constructive policy upon ~Vhicb to base our NOrk from this tirte forth. We have here a bc'y

of representative bankers trorr. all sections of the eountry and,certainly

their vie;vs individually as well as collectively would be of great value

to the country 1 so I hope you Nill not defer too nuch to the Board and

that you will be as assertive as you please in order that Ne rray have a

friendly discussion of uny o.atters which you nay deem important.

Y.r. Wilrrot. GQvernor Hard1ng1 how u:uch free gold has the Federal

R~serve System DOVI on hand?

Governor Harding: About $5001 000,000. The issue of Federal Reserve notes h::.s not bean naterially increased for the past thirty days and the

crop rr..oving is pretty well advanced ttnd there should be ~oa.~ contraction

of the note issues during the next sixty days.


EX-OFPICIO MEMBERS


CHAIRMAN JoHN SKELTON WILLIAMS


WASHINGTON

SUBJE!C'.r~ EXCESS lYE PEDIS..:!C'U.N'!.'S BY i.'!E.lJB~R EANI::S.

Dem- Sir:

W. P. G. HARql-NG, GOVER..o;-;' -::.-ALBERT STR~, VICE GotMNoi ADOLPH C. Ml~tER CHARLES S. HAMLIN

J. A. BRODERICK, SECRETARY L. C. ADELSON, ASSISTANT SI:CRETAIII-Y W. T. CHAPMAN. ASSISTANT SECRETARY W. M. IMLAY, FISCAL ~ENT

ADDRESS REPLY TO


lYlS. X-1::.74

The attention of t.b.e fafiura.J.. .Clusorve Boc.rd ha.r bC'en ca:'.led to i;h.;;

fxt that in some inst.lncos raem;,er b

:K-12~'4 - 2- e;Q

.t' I

O~r cr&dit "t"esollrces mtJ~St. therefore, be conserved and used to meet the

ac~t:tal requiremenlo~ of the coant~.r at largP., :and when the r.eed.s of a. . .

given commllnity have l:een s:.zpplied, the:::oe sho11ld be no diversion c re-

sources from other sections reerely to increase the profits or the business

of the banks in that communit7.

Rediscounting oparat;ons )etw~an Federal reserve bar~s are essential

in many cases and are being freely e~aged in. They a.re made necessary by

the Governments operatior8 and by th~ seasonal require~nts of ~he various

Federal reserve distrioto. l.ntt they llught not to be engaged in merely for

the benefit of member bankS of a:ny pa.rticlllar Federal reserve district as a

means of aMbling them to go ;_olltsido of their natural field of' activity to

attract bllsiness or to make profits.. A member bank v;t, ich has received from

its Fed.er~l reserve bank a.ccommodat ior..a sufficient fc.r n.eeting its legit:iLlat&

local demands s.hollld not be permitted to secure ;J.9.ditiona1 aucommoiat ion

~rely for the,pQrpose of increasi~ its profits or expanding its b~siness beyond reasonable limits.

A non-member bank vl.l.ich has contributed none of its resvurces to the

Federal reserve system ought not to be pe:-mitted to use a member bank as a

medium or agency for the purpose of procuring accommodations from Federal

reserve banks, Qnless qpon presentation of the facts to the Federal Beserve Board Sllch a course is found to be necessary or advisable in the public

interest.

The dllty is expressly imposed upon the directors of. Federal reserve ,. ,.

bcmks in extending accommodations to member banks to consider at all times

the possible actual reeds of all their member banks.. Sect ion 4 of the ll'ed-

eral Reserve Act contains a specific provision that the directors of the Fed-

era.l reserve bank "shall administer the affairs of said bdl1k fairly and


I

..

- 3 .

imr'art ially and w5_t.hout discr>.mj.nat~ vn in favor of or against onjr mem..>er bank

o~ banks an

? 'J ') '4 r> f) ~---,:,. ._, . r! { - 4- -

extenc.ed the member bank should be required to make a. :fr.o.ll disclos'llo of th0

linos of credit which it is extending, whether or not it is using the funds

obto.ir:e d from the Federal l"escrve bank to purchase paper in the open markGt

merely to increase the profits of the bank, and partlcll.la.rJy whether it is

be i:r.g ll.Sed by non-memher banks, wi. thot:.Lt ~ho permission of the Federal Res:nve

Board, as a medium or agoncy for obtaining accorr:modat tons from the Federal

reserve bank

When deemed necessary an assistant Federal rese:rye agent or a )_,representa.-

tive of the Federal reserve bank might call personally upon the officers of

the member banks whose rediscounts with the FedG:ral reserve bank arc out of

proportion to their capital and surplus in order that the sitll.J.tion may be

fully discussed ond understood. In case any member bank should fcil or

refuse to fll.rnish the Federal reserve bank with full information regarding

its lines of credit, an examination sholl.ld be made by the Federal reserve

b8ll:k of its affairs and the facts reported to the Federo.l Reserve Boa..rd

for Sll.Oh act ion as may be fcund to be necessary.

Very truly yours,

Governor.


:FZDii:H.A:G R2SSrtVE BOARD

Washington

HoveTLber 21,1918.

COi~Fim'.A T I ON:

TO ALL FEDERHL RESERVE BL~KS~

SUBJECT: Gold settlJreent Clearings by Branches of Federal Reserve Bank of Sa:..1 Franc"l.scn.

On Decer::bGr 3rd and ev;;ry settlerr.ent day thereafter,, Seattle} Spokana, Portland., St. Lake and San Francisco Banks offices vill tele.g:capn to the Federal Reserve Board; code L~BEG., their credits for other FederaJ. Reserve Banks as at close of business previous day to be settled through the daily Gold Fund Clearing< The f:i.ve offices of San Francisco BEmk ,rvill render 1 separately, to the head offi.ce of other Reserve banks, daily mail tran"1c.ripts supporting credits settled through F .. md. Boar1 will include ia daily BEP!i:G telegrare to other .Reserve Banks credits of .San Francisco olfices as fol1oNr~:

Total

Seattle Spokane Portland Salt L01.ke San Francisco San Francisco

arr.o1.mt amount an:ount amount an;ount

and branches amount

The Federal Reserve Banks are requested to open separate accounts w:i.t: the five off ices Frisco Bank on Decerr.ber 2nd and viJ'ir,3 Board.~ code LABEG, f.:; Decorr.bor 3rd Gold Fund Clearing,. an;ounts of credits for ea(:h of the fiiid offices, San Francisco Bank, and to render daily nail transcripts to ea.:,;; office, supporting credits so reported in Gold Fund Clearing.

For Decer.::ber 3rd Gold Fund Clearing and each settlen:ent day the rea ::-:c. .. each Federal Reserve Bank should report credits, in daily code LABEG telegram to Board, for five Frisco offices as follows:

Seattle amount Spokane amount Portland amount Salt Lake amount San Francisco amount

Total San Francisco and branches amount

Please note old system .vill continue: St:- tements, Nover;be r thirtieth and Gold Settlemsnt Clearing; Decerrber second 1 New Plan effective: State-ments, Decen:ber second; Clearing, Decenber third.

BRODERICK

Secretary.

/\ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

EXOFP'ICIO MEMBERS


CHAIRMAN

W. P. G. HARDING. GOVERNOR ALBERT STRAUSS, VICE ~--")>o ADOLPH C. l)l,ILLER ;o, .. CHARLES S .11li.MLIN

JOHN SKELTON WILLIAMS COMPTROllER OF THE CURRENCY FEDERAL RESERVE BOARD J. A. BRODERICK, SECRETARY L. C. ADELSON, ASSISTANT SECR!TA!t-Y

W. T. CHAPMAN. ASSISTANT SECRETARY W. M. IMLAY. FISCAL MiENT

WASHINGTON ADDRESS ltEPL Y TO FEDE;RAL RESERVE BOARD

November 21 1 1918. X-1279

SUBJFrrr '(.'AR TAX ON CUERENCY SHIP~mNTS.

De::1.r Sir:

In connection with your absorption of the cost of shipping

currency1 there ~re quoted below inquiry received by the Board ru1d

response thereto:

11There is enclosed herewith a file on the subject of exemption of war tax on currency shipn:ents to and from Federal Reserve Banks.

"We shall be very glad to have sorr.e advice as to .vhether vve shoul: pay full express rates on shipmsnts or 'Nhetli.er the Feder::1.l Reserve Bank will be construed as a department of the Government justified to sign the exerr.ption certificate provided. 11

"Reference is made to your letter of November 18 1 regarding war tax on currency shiprr.ents to and f rorr. Fc,deral Reserve Banks and file accompar.ying sa~,

11 0n page 931 of the Federal ReserV3 Bulletin for Dacerr.ber 1917 there .vas published an opinion of the Conrdssioner of Internal Revenue that Federal Reserve Banks are not subjsct to tax upon charges for telephone 1 telegraph and expre~s service when such charges fall directly upon the Federal Reserve Bank."

Very truly yours~

Assistant Secretary.

The Governor 1 Feder~l ResGrve Bank)


' CARTER GLASS SECRET AN.\' CJF THE TREASURY

CHAIRMAN. JOHN SKELTON WILLIAMS

COMP'TROtlER Ofl' THE CURRENCY FEDERAL RESERVF;: BOARD

WASHINGTON

November 22 1 1'.?18.

STTIJECT: FIDUCIARY fOiTI:RS OF NATIONAL BANKS, REVISION OF REGULATION F, Series of 1917.

Dear Sir:

W. P. G. HARDING, GO\IERNOR ALBERT STRAUSS. VICE GoVI!:RNOit ADOLPH C. MILLER CHARLES S. HAMLIN

-~J:-28Qc.;.,;,. J. A. BRODERICK,' s!(:RETAIY l. C. ADELSON, ASSISTANT S!.CRETARY W. T. CHAPMAN, ASSISTANT SECRETARY W. M. IMLAY. FISCAl. AGENT

ADDRESS REPLY TO


X-1280

A rev~s~on of Regulation F1 Series of l9i 7~ which deals with trust powers of national banks, is now in course of preparation. The recent amendment to Section ll (k) of the Federal Reserve Act rrakes certain State law.s applicable to the trust operations of nation_al banks. The laws of the several States dealing "Nith this subject are not \mifQrrn.'

trorr letters received it appears that Counsel for the sevetal F'ederal reserve barlks ~tre not agreed on the question of nhat powers rr:ay be granted to national banks where the State laws do not .Spec ;if 'icallcy enumerate the fiduciary povers ,tha:t competing State corporations n.a.y exercise ..

It is., of cour.se, necessary that the policy adopted 'by the Federal Reserve. Bo:trd should be unif om, in the several districts and at the request of its Coun3el the Board he.s deferred the 2.doption of a regulation superseding Regulation F 1 Seri.l;;ls d 1917, unt.il he can corr:n.unicate with Counsel for tho several Feden.l reserve banks.

In order} however, that the Feder:?.l reserve 'banks rray be h.tlly advioad as to the rrethod of procedure to be followed in handling the applications for trust powers, the Board has adopted the enclosed amend rr:ent to Article II of Regulation F, Series of 1917.

Respectfully 1

Governor.

Enclosure.


X-1280 a

November 20,1918.

Article !I, Re::;ul:1tio11 ::?1 Series of ).SJ. 7: which relates to applications

for perrr.ission to exercise tn1.st poo~ers h

!

I,

EX-OFP'ICIO MEMBERS




WASHINGTON

Noverrber 22Jl918o X--1281

SUBJECT: Revenue Starrps. Dr~fts drawn to finance sales of goods -to Allied Purchasing Con:n:ission.

Dear Sir:

W. P. G. HARDING, GOVERNOR ALBERT STRAUSS, VICE GoVERNOR ADOLPH C. MILLER CHARLES S. HAMLIN -- -,,-,

.... -

J. A. BRODERICK, SECRETARY L. C. ADELSON, AsSISTANT SECRET All-Y W. T. CHAPMAN, ASSISTANT SECRETARY W. M. IMLAY, FISCAL MiENT

AODitESS ltEPL Y TO FEDERAL RESERVE BOARD

heferring to the Doard's letter of Septerrber 16,1918; No. X-1196;.

on tho above subject: The Board~s attention has been called to the fact that soie

difference of opinion exists as to the proper intorp:::-etc.tion 0f the ru.J inc

of the Commissionur of Int0rnal Revenue in this connection.

To clear up any misundersta:1ding> thJ question was af:'ain referrsd

by Counsel of the .Oo21.rd to the Corrrriesioner of Internal Revenue., and there

is enclosed for your inf ornation a copy of Counsel 1 s lett0r ?..nd reply theretc

of the Commissioner.

Very tru.ly yours..,

Governor.


.

COPY

FEDERAL RESERITE BOARD,

Office of Counsel

Hon. A.A. 0allantine1 Solicitor of Internal Revonue 1 Washington 1 D.C.

My dear :W.:r. Jallantine:

Novecber 6,1918 X-1281 a

In June we had son:e correspondence on the subject of revenue stamps on drafts drawn to finance s:;:.les of goods to the Allied PurGhasing Conr.ission1 and your office finally ruled e1.S foll o.vs:

"It is accordingly held that the stamp tax imposed by subdivision 6 of Schedule A of Title 8 of tha Act of Octobar

3,1917, does not attach to drafts on domestic banks in connect~on with the shipment of articles from the interior to the seaboard

where such articles have been sold to the United States .3.gent of a foreign purchaser for export under circumstances entitling the transportation within the United St.3.tes to ex:?nrption from the transportation tax."

The Federal Rsserve Banks and n:ember banks .vere advised of this ruling through the Federal Reserve Bulletin, but it appears that the interpretation placed upon it by banks in different parts of the country is not uniform. In some instances counsel have advised the banks that drafts dra:nn in connection ,'fith the sales to the Allied Purchasing Commission are sv.bj act to the tax unless accompanied by shi)ping documents or other evidence showing that the period the draft is to run is more or. less coincident Nith the time C"Qnsumed in the shipment from the intGr:i

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