View original document

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

April 19, 1955
Internal Memorandum
Conversation with Mr* George t** Harrison

This interview began with a telephone conversation with Miss McCarrick, secretary to Mr* Cieorge Harrison at the Mew fork Life Insurance Gompacy, saying that they
had found papers belonging to Mr* Paul Warburg which were sent to Mr* Harrison by his
son James after the elder Mr* Warburgfs death. In them Miss McCarrick had found material
which she thought might be of interest to us* An appointment was made for me to go to
the office and see the papers. Miss McCarrick felt that she would like to have Mr*
Harrison there when I came, partly perhaps as a safeguard for her in any negotiation
which seemed to be needed*
Mr. Harrison looks very much better than he did when I saw him a year ago.
He is still giving the impression of a man whose mind has slowed, but his color is better, and his pace is not slow as it was last year*

He tells me that has had a

slight stroke between then and now and that at present he is having trouble with the
middle ear -yhich makes him slightly dizzy* He moves around in a #ieel~chair but once
in a room walks about*
I had a chance to look casually at the Warburg papers before Mr* Harrison

There are three bundles of them, each bundle perhaps twelve inches in thick-

The bundles contain papers in folders, sorted as they would be sorted in an of-

fice. On a quick survey, they all seemed to be papers which concern the early days of
the Federal Reserve System*

One of the bundles contains a thick, stapled memorandum

on the history of bankers1 acceptances by Paul Warburg*

It was written in 1915t and

in addition to the chronological commentary, it contains all the supporting evidence
in terms of letters, legislative drafts, and so forth. Mr. Warburg was the person ^ho
introduced the idea of bankers1 acceptances into the new Federal Reserve System, and
he had almost an evangelical attitude toward it. His analysis of the attitude of
Board members toward the idea is highly important in this particular phase of the history*


fhere was not time to look at the other papers, but they all give the impression of having importance for the work of this Committee in that early period•
Mr* Harrison will check with Mr# James Warburg on their disposition, but as Mr. Warburg
gave them to him in the first place, he assumes that he can hand them on to this
Committee with no objection.
Mr* Harrison went to the Board as Assistant General Counsel (can we find
the exact date?) in 1914* He was working with Mr* M* C # Illiott, then Counsel. Mr.
Elliott, he said, was a fine la-yyer but a rather lazy man who passed on work to Mr*
Harrison. This meant that the latter, who had taken his Bachelor of Laws degree from
Harvard only a year previous, was the bright young hard-working man of the legal staff.
Mr. Elliott and Mr. Warburg, being men of vastly different temperaments, found great
difficulty working together, and Mr* Elliott assigned to Mr* Harrison iiie questions
which Mr. Warburg wanted answered*

Hence, Mr. Harrison claims that he got his educa-

tion in central banking from Mr. Paul Warburg at the Board and from Mr. Benjamin Strong
at the I4ew lork Bank*
Mr* Harrison made various comments about personalities which should be recorded*

He said that Dr* Adolph Miller found it extremely hard to admit that he was

ever wrong and equally hard to be persuaded that any idea he himself did not first
think up could be any good. Hence, it was very difficult to persuade him of an idea
not of his own creation.
He was stubborn, and he was authoritarian. Mr. Harrison liked him but would
have difficulty remembering why.
these characteristics made for a series of conflicts between JJr. Miller and
Mr. Warburg.

The latter knew so much more than i>r. Miller did about banking and how

it worked, having been a practicing banker with a wide European experience, that it
must have been very galling to % . Miller to have to listen to him. Undoubtedly, Mr*
Warburg too had his difficulties in listening to Dr. Miller who must have seemed a


theoretical economist with no real knowledge of banking of any kind, from the practical
point of view.
Mr. Hamlin seemed not to have made much impression on Mr. Harrison, or perhaps that was only the contrast with Mr. Warburg, who made so great an impression on
Mr. Boy loung, who was at the Board, was described by Mr. Harrison as being
an extremely stubborn man, who was best approached by asking a question on >Mch be
could tell a story. Mr. Xoung is, according to him, a very

vocal man who stops in to

see him whenever Mr. Young comes to Hew lork and talks inteminably.

As a solution

for my own difficulty in getting anything of any value out of Mr. loung, he suggested
first talking with Mr. Sam Carpenter at the Board, who knew Mr. Xoung well and liked

Second, he said that he himself would write a note to Young if it could be done

in such a way as to be helpful. He is quite sure that Mr. loung knows a great deal
and that there is every reason why he should contribute his knowledge to the work of
this Committee.
Mr. Harrison will talk further at a later date and would prefer to talk on
the basis of a skeletonised outline of questions which we would like him to discuss.
I will arrange with Dr. Chandler to make it possible for him to question Mr. Harrison
about certain things common to Mr. Strong and Mr. Harrison. I will also try to see him
on the early days of the Board and on his later phase as President of the Federal Beserve Bank of New York fro& 1928 to 1941- He is not a well man but is entirely willing
to do as much as he can before the end of May.
Post Script - I asked Mr. Harrison why bankers1 acceptances, "which were a new device in
the United States and one accepted with some enthusiasm by American banking when Mr.
¥arburg first introduced them, had lost their value. He said that all went well in the
beginning, but that when interest rates began to fall, bankers1 acceptances lost their
appeal, and bankers began to wonder *why they should bother with this particular device.
Kiis would have to be enlarged to be understandable.
The Warburg
Federal Reserve Bank of St. Louis

papers were brought to this office April 20, 1955 and are now in our files.