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At a meeting of the Federal reserve Board held in

the office of the Board on Friday, April 30, 1920, at 11-15

PRESENT: The ChairmanThe GovernorMr. TillerMr. MoehlenpahMr. WilliamsMr. Fherson, Assistant secretary.

Minutes of meeting of the Board held April 29th were

read, and on motion approved.

Business was presented and disposed of as follows:

The Governor submitted for approval of the Board,

draft of reply to a letter received by him from Yr. N. J.

Upham of Duluth, Minnesota, dealing with questions of prac-

tice and policy of the Federal Reserve System.

Approved.

The Governor submitted for consideration of the

BRard, telegrams received from the Federal Reserve Banks of

Chicago, Minneapolis and Tan Francisco, recommending increase

in rates on paper secured by Liberty bonds and Victory notes.

After discussion, on motion duly secondedit was voted to advise the Federal ReserveBanks of Chicago, Minneapolis and San Fran-cisco that in vier -of local conditions in

those districts the Board would approve rateof 5-3/4 on all paper secured by Libertybonds and Victory notes, or if, in the opinionof the directors of those Banks, a rate of elis necessary on this class of paper to controlthe present situation, the Board would approvesuch rate.

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1,1r. Williams moved that the Board should make ef-

fective, provisions of Section 16 of the Federal Reserve

Act, which provide that a Federal Reserve Bank "shall be

charged with the amount of notes issued to it, and shall

pay such rate of interest as may 1:),1 established by the Fed-

eral Reserve Board on only that amelInt of such notes which

equals the total amount of its outstnding Federal reserve

notes, Tess amount of gold or gold certificates held by the

Federal Reserve Agent as collateral security", by establish-

ing the rate of interest provided for above at 3%.

On motion 'duly seconded, it was votedto lay Mr. Williams' motion on the table un-til the Governor had received reply from aletter addressed by him:to Senator Class onthis subject.

(At this point the Chairman withdrew from the meeting)

T.lemorandum dated April 29th from General Counsel sub-

mitting for approval of the Board, memoranda of telegraph

service furnished the Board by the American Telephone and

Telegraph Company, effective 'lay 1st, at the same rates now

in force, it being the desire of the telephone comrany that

the contracts be signed by the Board rather than by the Fed-

eral Reserve Bank of Chicago for the Board.

On motion duly seconded,the Governor wasauthorized to sign the contracts on behalf ofthe Board.

Memorandum by Yr. Eoehlenpah suggesting that the Federal

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Reserve Banks be advised that the Board believes that Federal

Reserve Banks should route checks of parring non-member banks

direct for collection, unless a bank is not considered to be

solvent, rather than forward such items to National banks for

collection.

Approved.

Letter dated April 27th from Assistant Federal Peserve

Agent Nevin of Cleveland, advising the Board that it is the

practice of that Bank, whenever subscribers to Liberty bonds

who live in Cleveland fail to call at the bank for their bonds,

to forward such bonds by registered mail.

Noted.

The Governor reported the reserve positions of the

several Federal Reserve Banks as at close of business April

28th, and the status of rediscounts between Federal Peserve

Banks as of the same date.

The Governor reported rediscount transactions, pur-

suant to authority heretofore vested in him; member bank

promissory notes secured by Government obligations: rate 5/z

on parer secured by certificates of indebtedness bearing rate

of 5-1X on paper secured by certificates of indebted-

ness bearing rate of 5-1/4%; 5-1/25 on paper secured by Lib-

erty bonds and Victory notes, and 6,1 on commercial paper, as

follows:

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Date Bank Redis-countinK

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With Amount ':aturities

Aril 28th Chicago New YorkApril 29th Philadelphia New York

April 29th Richmond Clevelandit St.Louis New York

roted.

15,000,000 Tithin 15 days3,500,000 11-15 days

5,000,0005,000,000 31-90 days

knplications of the following banks for authority to

accept drafts and bills of exchange up to 10077 of their cap-

ital and surplus, under the provisions of Section 13 of the

Federal reserve Act:

Fidelity National Bank & rust Company,

Xansas City, Yo.

Denver National Bank, Denver, Colo.

Approved.

RTTOP.TS OF MIMI= NO. 1:

Dated April 30th, recommending admission of State institu-

tions as set forth in the auxiliary minute

book as of this date, subject to the con-

ditions stated in the individual reports

attached to each application.Approved.

Dated April 20th, recomrending changes in stock at Federal

reserve Banks, as set forth in the auxiliary

minute book as of this date.Al)rroved.

At 12-15 P.—., the meeting adjourned.

Approved:

vf' /

Chairman.

Assistant Secretary.

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