frsbog_mim_v29_0270.pdf
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FEDER L RESERVE BO RD
WASHINGTON
a d d r e s s o f f i c i a l c o r r e s p o n d e n c e t o
t h e f e d e r a l . r e s e r v e b o a r d
X-6142
September 2 2 , 1 9 2 8 .
SUBJECT: Topic
f o r
G o v e rn o r s '
a n d
Agent s '
C o n f e r e n c e s .
Dear S i r :
There
a r e
a t t a c h e d h e r e t o c o p i e s
o f
s e l f - e x p l a n a t o r y l e t t e r s e x ch a ng e d between t h e
Federa l Reserve Bank
o f
D a l l a s
a n d t h e
Board,
a n d i t i s r e q u e s t e d t h a t t h e s u g g e s t i on r e f e r r e d
t o
t h e r e i n ,
o f
annual meet ings be tween
t h e
Members
o f t h e
Fed e ra l Res e rv e Bo a rd
a n d t h e
d i r e c t o r s
o f
t h e F e d e r a l r e s e r v e b a n k s , b e c o n s i d e r e d a t t h e
f o r t h c o m i n g c o n f e r e n c e s
o f
Governors
a n d
F e d e r a l
Reserve Agen t s .
V e ry t ru l y y o u r s ,
<J. C«
N o e l l ,
A s s i s t a n t S e c r e t a r y .
TO ALL GOVERNORS AND
AGENTS
O F F . R .
BANKS.
I
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X-6142-a
September
1 8 , 1 9 2 8 .
Dear
M r .
Walsh:
R e c e ip t
i s
acknowledged,
o f
y o u r l e t t e r
o f
September
1 5 ,
with
r e g a r d
t o t h e
r e s o l u t i o n a d o p t e d
a t t h e
recen t mee t ing
o f th e
Advisory Committee
o f
your bank' s S tockho lde r s Ass oc i a t i on , sug ges t ing
t h a t
a
jo i n t confe r ence be tween
t h e
Members
of t h e
Board
a n d t h e
d i r e c t o r s o f t h e Federal Reserve Banks b e he ld each year i n Washington
f o r t h e purpose o f g i v i n g c o n s i d e r a t i o n t o c o n f i d e n t i a l m a t t e r s
which have been brought t o t h e a t t e n t i o n o f t h e d i r e c t o r s , o r o f which
t h e Board shou ld have pe rs on a l a n d in t ima te knowledge . T he Board h a s
c a r e f u l l y c o n s i d e r e d t h e p r o p o s a l o f t h e Advisory Committee a n d w i l l
b o
ve ry g lad
t o
f o l l o w
t h e
s u g g e s t i o n t h a t
t h e
m a t t e r
b e
r e f e r r e d
t o t h e
f o r t h c o m in g c o n f e r e n c e s
o f
Governors
a n d
Federa l Reserve Agents .
I n t h e
meantime, however, sho uld an yt hi ng develop
i n
your
t e r r i t o r y r e g a r d in g w hic h y o ur d i r e c to r s wo uld l i k e t o conf e r wi th
t h e Board you may be sure tha t t h e Board would b e ve ry g lad t o
m e e t w i th y o u r d i r e c to r s a t a n y time the y f e e l th at the y have a
compla in t o r problem o f s u f f i c i e n t i m p o r t a n c e t o war ran t such a
c o n f e r e n c e .
A t
d i f f e r e n t t i m e s
t h e
d i r e c t o r s
o f
o the r Fede ra l
Reserve Banks have co nf er re d wi th
t h e
Board
an d we
have always
assumed tha t t h e d i r e c t o r s o f a n y reserve bank would fee l a t l i b e r t y
to do so whenever they thought i t t o b e n e c e s s a r y . I f such a
procedu re shou ld p l ace t o o much inconvenience upon t h e time o f your
d i r e c t o r s ,
t h e
Board
a t
th e i r r e q u e s t , w o u ld
b e
ve ry g lad
t o
make
a r rangements
t o
have Members
o f t h e
Boar d meet wi t h them
i n
your
own
d i s t r i c t .
The
l a t t e r p r o c e d u r e m ig h t
b e
p r o d u c t i v e
o f t h e
b e s t r e s u l t s
a n d
i n c i d e n t l y
i t
would
b e
l e s s e x p e n s iv e .
I
want
t o
a s s u r e
y o u
tha t
t h e
Board would
b e
w i l l i n g
t o
f o l l o w e i t h e r p r o c e d u r e
a t t h e
p l e a s u r e
o f y o u r d i r e c t o r s .
Wi th k i nd pe r so na l r ega rds , I am,
Very t ruly yours ,
( S ) R . A . Young,
Governor.
Mr. C. C .
Walqh, Chairman,
Federal Reserve Bank,
Dal las , Texas .
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FEDERAL RESERVE BASK
OF DALLAS
X-6142-b
September 15 , 1928
C. C. Walsh .
Chairman o f t h e Board
a n d Federal Reserve Agent
Federa l Reserve Board
Washington, D. C.
Gentlemen:
The Advisory Committee o f t h e S t o c k h o l d e r s
1
A s s o c i a t i o n , o f
t h e Federal Reserve Bank o f D a l l a s , i n a mee t ing he ld o n September 12 ,
1 9 2 8 , i n
t h i s bank, pa ss ed
a
r e s o l u t i o n s u g g e s t i n g t h a t
a
j o i n t
c o n -
fe rence be tween t h e members o f t h e Federa l Reserve Board , a n d t h e
d i r e c t o r s o f t h e Federa l Reserve banks, b e held each year i n Washington,
D . C . , a t a t ime t o b e d e s i g n a t e d b y t h e Board, f o r t h e purpose o f g i v -
i n g
c o n s i d e r a t i o n
t o a n y
c o n f i d e n t i a l m a t t e r s w h i c h
m ay
have been
b ro u g h t t o t h e a t t e n t i o n o f t h e d i r e c t o r s o f t h e Federa l Reserve banks,
e i t h e r t h r o u g h t h e Advisory Committee o f t h e S t o c k h o l d e r s
1
A s s o c i a t i o n ,
o r b y t h e member ba nk er s them sel ves , a n d o f which t h e Federa l Reserve
Board should have personal
a n d
int imate knowledge#
T he r e a s o n s g i v e n b y t h e Advisory Committee f o r t h e h o l d i n g
o f
such con fe r enc es
a r e ,
s u b s t a n t i a l l y ,
a s
fo l l o w s :
F i r s t - That many member ba nk er s he s i t a t e t o submit t o t h e
o f f i c e r s o f a Federal Reserve Bank a n y m a t t e r s o f c r i t i c i s m , o r
c o m p l a i n t , a r i s i n g o u t o f t r a n s a c t i o n s h a d between t h e member
banks a n d t h e Federa l Reserve banks, o r t h e t e x t a n d a p p l i c a -
t i o n
o f t h e l a w a n d t h e
Board
1
s
r e g u l a t i o n s .
The
s u g g e s t i o n
b e i n g fu r t h e r b a s e d u po n t h e o p i n i o n o f t h e members o f t h e
Advis ory Commit tee, ga i ned through conta ct wi th bank ers i n
t h i s d i s t r i c t , t ha t 9 0 $ o f t h e smal ler banks i n t h e d i s t r i c t
approach
t h e
Fe de ra l Reserve Bank wi th
a
s p i r i t
o f a w e ,
h a r b o r -
i n g t h e
though t tha t
i t s
o p e r a t i o n
i s
su r rounded wi th
a n
^atmos-
p h e re
o f
s e c r e t i v e n e s s
a n d
mys t i c i sm.
Second
-
That s uch member ba nk er s woul d
n o t
h e s i t a t e
t o
di sc us s such problems wi t h
t h e
d i r e c t o r
o f t h e
Federal Reserve Bank
coming f r om t h e i r r e s p e c t i v e d i s t r i c t s , f o r t h e r e a s o n t h a t t h e
member banker regards t h e d i r e c t o r s o f a Federal Reserve Bank,
i r r e s p e c t i v e o f t h e c l a s s w h i c h t h e y r e p re s e n t , a s h i s d i r e c t
r e p r e s e n t a t i v e
i n h i s
r e l a t i o n s w i t h
t h e
Federal Reserve Bank,
a n d h e f e e l s f r e e r t o g o t o t h e d i r e c t o r i n h i s r e s p e c t i v e com-
muni ty wi th a n y g r i e v a n c e , o r m i s u n d e r s t a n d i n g , w h e t he r r e a l o r
i m a g i n a ry , i n s t e a d o f g o i n g d i r e c t t o t h e o f f i c i a l s o f t h e Federa l
Reserve Bank.
T h i r d ~ That i f such con fe ren ces between t h e Federa l Reserve
Board
a n d t h e
d i r e c t o r s
o f t h e
Fe de ra l Res erv e banks were h e l d
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- 2 -
X-6142-b
t h e
member ba nk er s fe e l t ha t t hey would,
b e
b rough t
i n
c l o s e r
touch wi th t h e Board a t Washington, through t h e i n d i v i d u a l
members
o f t h e
Board
o f
D i re c t o r s , w i t h r e f e r e n c e
t o a l l
m a t t e r s a r i s i n g b e t w e e n t h e member banks a n d t h e Federa l
Reserve banks.
A s u g g e s t i o n w a s made th at t h i s w a s t h e f u n c t i o n o f t h e
Advisory Counci l ,
i t
b e i n g
t h e
duty
of t h e
Advisory Counci l -
m an f ro m e ac h d i s t r i c t t o p re s e n t t h e s e m a t t e r s , b u t t h e
s u g g e s t i o n w a s i m m e d i a t e l y o f f s e t b y t h e s t a t e m e n t t h a t 9 0 $
o f t h e
smal ler banks
i n a
F e d e ra l R e s e rv e D i s t r i c t
d i d n o t
know that
w e h a d a n
Advisory Counci l ,
n o r
were they acquain ted
w i t h i t s r e l a t i o n s h i p b et we en t h e member banks a n d t h e Federa l
Reserve Board.
F o u r t h
-
They a l so f e e l th a t
i f
such conf e ren ces
c a n b e
a r r a n g e d a much c loser contact wi l l b e e s t a b l i s h e d b e t w e e n t h e
member banks a n d t h e i r ow n Fed er al R eserve Bank a n d t h e Federa l
Reserve Board; a n d t h a t a s a f u r t h e r r e s u l t a b e t t e r u n d e r s t a n d -
i n g , a
m o re c o rd i a l f e e l i n g ,
a n d a
much more sa t i s f ac to r y
c o -
o p e r a t i o n , w i l l o b t a i n t h rou g h ou t t h e d i s t r i c t s , a s w e l l a s t h e
System.
F i f t h
-
That
b y f a r a n d
wide
a
g r e a t m a j o r i t y
o f t h e
member
b a n k e r s
o f t h e
Federal Reserve System
a r e
s t ro ng p roponen t s
o f
t h e
Federa l Reserve banks,
a n d o f t h e
Federal Reserve System,
a n d h e a r t i l y e nd or s e t h e c o n s t ru c t i v e c r e d i t p o l i c i e s l a i d down;
tha t t hey a r e s t r o n g b e l i e v e r s i n t h e e f f i c a c y a n d e f f e c t i v e n e s s
o f t h e economic views sponsored b y t h e System, a n d t h a t i t h a s
p ro v e n
t h e
g r e a t e s t p i e c e
o f
c o n s t r u c t i v e l e g i s l a t i o n t h a t
h a s
ever been pa ss ed b y a Nat ional Congress o r a S t a t e L e g i s l a t u r e .
S i x t h - That i t i s t h e e a r n e s t d e s i r e o f such member bankers,
a s
p ro p o n e n t s
a n d
a d v o c a t e s
o f t h e
p o l i c i e s
o f t h e
System,
t o
cement each year t h e bonds o f un ion more c l os el y , a n d i n doing
so to e l i m i n a t e , i n s o f a r a s t h i s may be accompl ished, a l l
c a p t i o u s a n d i r r e l ev an t c r i t i c i s ms which have been o f f e r ed f rom
time
t o
t ime
b y
opponents
o f t h e
System.
Seven th - That t h e d e s i r e f o r th ese j o i n t conf ere nce s between
t h e d i r e c t o r s o f t h e various F ede ra l Reserve banks, a n d t h e Board a t
Washington,
i s
prompted so le ly
f o r th e
purpose
o f
c r e a t i n g
a
more
harmonious a n d f r i e n d l y r e l a t i o n , a n d a more i n t e l l i g e n t u n d e r -
s t a n d i n g of t h e us e s , b e n e f i t s a n d r e s p o n s i b i l i t i e s o f t h e System
t o t h e
member bankers,
a n d
t h e i r d u t i e s
a n d
o b l i g a t i o n s
t o t h e
Federal Reserve Bank
o f t h e
d i s t r i c t ,
t o t h e
Federal Reserve Board,
a n d t o t h e p r o f e s s i o n o f banking.
E i g h t h
- I t w a s t h e
o p i n i o n
o f t h e
Advisory Committee that
a l l o f t h e
d i r e c t o r s
o f
e ach Fe de ra l Reserve Bank sho uld
b e
p r e s e n t a t t h e j o i n t con fe renc e be tween t h e Federal Reserve Board
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X-6142-b
a n d t h e bank' s d i r e c t o r s a t t e n d i n g t h e same, a t which time they
c o u l d d i s c u s s f r e e l y m a t t e r s a n d r e l a t i o n s h i p s a r i s i n g o u t o f
t h e re spec t ive bank* s o p e r a t i o n s , g i v i n g p u b l i c i t y t o such i n -
f o r m a t i o n
a s t h e
F ed er al Reserve Board might
s e e f i t t o
r e l e a s e .
Nin th
- I t w a s t h e
id e a
o f th e
in di vi du a l members
o f t h e
S t o c k h o l d e r s
1
Advisory Committee that i f , a n d when, th es e c o n -
f e r e n c e s a r e i n s t i t u t e d , t h ey s h o ul d be h e l d s e p a r a t e l y by t h e
Board with t h e d i r e c t o r s o f each Federal Reserve Bank i n t h e
System. This , o f course , i n t h e even t a l l of t h e F e d e r a l R e -
serve banks i n t h e Sys tem des ired t o t a k e p a r t i n such a c o n -
f e r e n c e , w ou ld r e q u i r e o n e confe rence f o r each bank i n t h e
System during t h e y e a r , a n d w o u l d n e c e s s i t a t e t h e arrangement
o f tw e lv e d i f f e r e n t c o n f e r e n c e s ; but th e th o u g h t w a s a l so
s u g g e s t e d t h a t
i t
might
be
po ss ib le th a t some
o f t h e
Fede ra l
Res erv e banks th ro ug ho ut t h e System might n o t have ma t te r s of
s u f f i c i e n t i m p o r t a n c e t o r e q u i r e a meet ing every year , h u t
i f
they
d i d
t ha t they shoul d have
t h e
o p p o r t u n i t y
o f
meet ing
t h e
B oa r d t h r o u g h t h e i r d i r e c t o r s
a n d
d i s c u s s i n g
t h e
same.
Tenth
- I t was
a l s o sugges ted
by th e
Advisory Committee
t h a t t h i s m a t t e r
be
p l a c e d
o n t h e
program
f o r
d i s c u s s i o n
a t
t h e
Agents
1
a n d
Governors* con fer ence s
to h e
h e l d
i n
Washington
November 12-17, 1 9 2 8 .
I a s s u r e d t h e Advisory Committee that I would t ransmit i t s
views
i n
r e g a r d
t o
those confe rences
t o t h e
Federal Reserve Board,
a n d
I
shou ld
b e
p l e a s e d
t o
r e c e iv e y o u r r e a c t i o n
i n
r e f e r e n c e t h e r e t o ,
f o r
t h e
p u r p o s e
o f
r e p o r t i n g
t h e
same back
t o t h e
Advisory Committee
a t i t s
next mee t ing.
Yours very t ru ly ,
(S ) C . C . Walsh,
Chairman o f t h e Board.
CCW/MK