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Friday afternoon
Dear Dr. CalkinaThe draft proposal as I have re^-done i t i t attached.
It i s s t i l l roiaght, and I hate to ask you to read more
than necessary, but I would Tery much like to know whether
you think this i s coming better.
Tou will find on page
a phrasing of the cut-off date difficulty for which Id
appreciate comment.
Ho one else has seen this yet.
My plan i s to write a page and a half of introduction,
to insert the report on the pilot project, then th follow
with this proposal. I ' l l get the whole back to you as
early in the week as possible so that you can see i t for
final comment.
I shall be in H f Tork Monday, and will call you by phone
in the morning.
Don Woodward has arranged I hat he and I
go to ses Dr. Willitts that afternoon at three.
I assume
we will take this whole thing with us, rough/f though i t
still is.
Ihanks much for so many kindnesses
Mildred Adams
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PBOPOSH,
Introduction
In January 195k the Boekefeller Foundation Bade a grant for a pilot
project leading toward a history of the Federal Bsserve System. The isnediate
end was to find out what materials were available for such an undertaking, ma*
terials not only in the *9n*9 of papers, but also of the livinr memories of man
active in the early days of the System.
That task has been carried on since January 15>th. It has yielded
extraordinarily good results (a report of its findings to April is appended),
and there is e^ry reason to believe that an even greater harvest of papers
and memories lies wait in? to be gathered* The Committee feels that this has
proved to be in the best sense of the wowd a pilot project* In addition to
exploring papers and memories, it uncovered that sense of personal strurgle
and accomplishment which i3 the living core of any institution. It e listed
interest and it ensured cooperation for the future* It points the way V&TJ
surely to the next and much bigger task which lies ahead, and for which the
Committee new asks the consideration of the Foundation*
I The Task
In calling itself the Ccanlttee on the History of the Federal Reserve System, the group presenting this proposal defined its primary purpose*
But the discoveries, contacts and discussions made during the pilot project
have deepened the content and widened the scope of that purpose* The Committee now knows that what needs to be done is much more than a single history
of the Heserve System - it is an appraisal of one of the most extraordinary
inventions in this democracy, a review of experience in its functioning, an
analysis in terms of the memories of men who helped develop it and who took
part in its operation* The episodes around which conflicts swarmed, and out
-2o£ which change came, the process by which decisions were made, the importance of personalities, the interplay between public policy and private needs these various angles of approach and natny more which have bsen suggested from
time to tim® by Committee members testify to the vitality of the subject and
to the lessons which can be learned for other democratic institutions by a
detailed study of its experience,
H
Why Important?
The iaportance of the subject is, however* greater than a natter
of the material dealt with or the people dealing with it. It goes much farther than the task of history writing, vital as that is, and farther than what
art cojEsonly considered the somewhat narrow confines of the banking world*
(a) Of all the innovations Sit government secuani.sas which Aaerisane
have brought about during the twentieth century the Federal Be serve System
•i
stands first, and not only because of the unprecedented functions which it is
called on to perform • It operates with a high degree of autonomy linked with
a fine sense of public purpose* To an extraordinary extent it has managed to
preserve its freedom from both Congressional and Executive pressures* 3h periods when it has been forced to yield the public protests against such yielding
have been continuous until the pressures have softened and the balance has been
restored*
(b) Writing in 191*6 about twentieth century monetary controls, Professor
Robert Warren of the Institute for Advanced Study observed that in the nineteenth century there developed a new type of society, the noney economy,
which made new demands on those who administer Government control over the
supply of money* "High and low, rich and poor, bond and free there had always
bsen, but never before had there been an economy that expected the majority of
its people to be totally dependent upon the continuty of a stream of money
-3income11 • Along with other observers Professor Warren interpreted the
primary task of the Federal Reserve System as one of seeing that this
continuity of the stream is not interrupted by monetary failures* To
do this it bridges the gap between public and private efforts to influence the economy• The goal toward which it has been directed in these
later stages is the stability of the economy for the public goodj in that
pursuit it has developed, tried and discarded one method after another,
only to reach for a new one which promised better results * Analysis cf
these experiences form important chapters in both monetary and economic
history.
(c) In the practise of the functions laid upon it, the System
has enlisted and trained staffsswhose skill and devotion to the System's
work stands in notable contrast to that of certain other governmental institutions* Not only have they weathered forty years of political storms
with a minimum of vulnerability5 the System as a whole, by some curious
magic, has withstood political attack from both parties* Tensions which
in theory should have split it apart seem somehow to have been important
factors in holding it together*
(d) An analysis of the changing experience in design and in operation of this unique governmental mechanism would have great value* It
is important for the future performance of the System and of the American
economy* There is reason to believe that such analysis may hold lessons
of great value which can be applied to problems of organization in both
governmental and pjsfcvate life, far removed from the process of monetary
management •
III
The questions which this study would illumine fall into two categories* There are in the first place what might be called the techanlcal
issues, soae theoretical and some matters of operating policy, which have
absorbed the Systemfs attention at one time or another in its life* These
appear in annual reports, they are high-lighted in government hearin -s, but
in both instances the questions which an informed and impartial student might
ask are diverted by the exigencies of the noaent* Enough tine has elapsed,
for instance, since control of the discount rate was first used by the System
as a tool of monetary poliey so that its importance under varying conditions
can be weighed and studied* The sane thing is true of changes in reserve re-
c
quirements, and of the tool of open market operations* let a vast amount of
controversy still surrounds them, soae of which could be resolved by competent
studies*
Beyond the technical points at issue (of which these are merely
instances that come first to hand) lie broader Issues both within and with*
out the banking system. For example, how did it coiae about that so unique
a mechanism of monetary control was established? By what methods and devices
has it endured and thrived? How are the skill, competence and individual
freedom of its staff, unusually high in government or in private bodies, maintained and encouraged? How has the relationship between staff and Board members been worked out? How can the Asternfs role in the world of government
and in the economic world be best defined and understood? What are the lessons
of this role for other organisations, in or out of government? How are Board
decisions, with their high 4mgye9 of importance in American life, arrived at?
How does the System influence the operations o£ monetary mechanism at moments
of crisis? What lessons are there in the relations which prevail between Board,
itesQrve Banks and Member Banks, and how are those relationships evolving?
I? Scope and Method of Inquiry
The study which we propose would cover the entire Federal Heserve
, Including the Board and the twelve regional banks, fro® t h e i r i n ception* Much has b@en written on th© events, crises and personalities
which led up to the founding of the System, but ®rm this need* re-studying in th® light of newly discovered material.
l e would therefor© set out to sake a complete search for the mat e r i a l and the people eonoerned in Federal Seserv© legislation, theory and
operation, going back at least to 1907 when the Aldrieh Commission functioned*
From 1913 forward we would undertake to discover the cast of influential characters in the System's growth, change and operation, including governmental
figures in Congress and the executive branch) Members of the Board and 3n»
fluantial tmn on the Board staff} Oerv©raors, Presidents and senior officers
of Beterve Banks 1 Members of the Federal Advisory Council, the Open Market
Gomittee and allied bodiesf men in academic l i f e (as for example, Oliver
W. M. Sprague and John H# l i H i a a s ) who have been in close and influential
contact with the Syitem during i t s years of growth •
Tim method to be used i s that whieh has suceessi&lly been developed
during the pilot project phase of this study* I t includes visiting Board and
Banks, both to search out ®en who reisea&er early days, and to ascertain how
records are kept and what local records are a/a liable j the establishing of
the names of the dramatis personae, the recording of brief bipor
concerning them, the request for interviews If they are stixi **AV% tim
search for their papers if they are deceased*
Experience in the pilot project, and consultation with those engaged in other attempts to chart and record the course of living institutions,
have taught us that the comprehensive study of t h e Federal Heeerve System
which i s the core of our endeavor divides i t s e l f into three steps j these ti&r
convenience may be called, the a rchirad process, the interview process and
the writing proc@«s. L©fieally, the as three appear to b® separate, just
as in the pilot project the process of discovery of papers, gathering of
intmoriM and biUdiiig ©f ear4 f i l e s appeared to be separate* Actually,
each process ia the pilot project fed and profited from each other. The
success of that project was in no small part due to what itemed a t tises
a handicap - namely, that a l l three processes, were necessarily going o» a t
once*
Wem i t a&trtsat&e, ix\ risv of that ®3j»srie®c@, t© t i y to cariy ©u
tha archival, the interview and the history-writing preeosses of t ^ main
projeet one at a tie®, in series, us might propose that the grand design
asove forward ia t i o phases* A reading of the report ©a the pilot projeet
shows how much haste&®nstarted, and hew mach remains to be done* For example, the researefe director hoped to T i s i t a l l twelve ^ s e r v e Banks dariag
the pilot phase, bat th® rolvm and rariety of t?ork taader way forced pest*
ponementf most of those Banks distant from the Atlantic seaboard remain t o
be explored* The sapping and survey stage uncovered not only papers and
memories. I t also s e t the pattern for the study of those papers and those
memoirs. A great deal more must be dons along these l i m s before the Blaster
files of papers and othsr natsrials are ready for the student's use.
Mot only siast the master files be completed, but the papers which
have been uncovered during the pilot project, and the collectiooa s t i l l to be
found, must be analysed for pertinent material* the ilsjtlin diaries, recently
released from a ten-year seal, stand alone in terms of the preparation and
indexing lavished on them, but even the Hamlin diaries are new ground for the
student.
Someone smst read those 26 voluiaes and evaluate them for the pur-
poses of any comprehensive history of the
The work to be done on other collections, not yet sorted or classified, Is more extensive* The National Records Management group stands readyto start a pilot study of a similar group of papers in order to chart costs
and work oat efficient methods of handling* Tome: Parker Willis would take
time froa his work at the Federal Reserve Bank in Boston to survey his
father's papers if this were arranged* The Ooldanwelser papers, the Adolph
C» Miller papers are destined for this Committee's use* These and many
more must be classified and set in order.
But even while setting down these snail axaaples of the large
amount of work which remains to be done in the first two processes we recogniae how inextricably linked with them is the third process* Daring the
pilot phase we became aware of writings under way and needing encouragement
which would be valuable for our purposes and which would be finished the
sooner if they could profit frost the work we were doing* Heseareh into the
past is not well done in a vaccuum or without the added spur of a person
who wants to use its results* The historian who can work with researchers*
using their data, stimulating and broadening their search by his questions*
has a richer content to draw froa than the one who starts after the research
process is finished and filed away*
Proposal
We therefore propose to move forward with three groups of activities,
all of them vital to the comprehensive study which is the core of this
endeavort
1* Archival
(1) To continue and complete the visits to Board and banks*
the search for records* the interviewing* the hunt for
papers and the recording of discovered material which was
-8started during the pilot phase*
(2) to continue and complete the biographic, bibliographic
and chronological master files which were started during
the pilot phase.
(3) to make available to qualified students that part of
the Committeef3 research material which is partinent to
their Inquiries.
(li) to work out problems of handling related collections of
papers and putting them in usable shape for students*
this may include financial aid in certain instances* (For
exaaple, the Carter Glass papers are at the University of
Virginia as described in the report on the pilot phase*
Their classification and study is essential, but funds
would have to be provided).
2* Interview
To continue the interview process which has yielded such
good results under the pilot project, and to enter on a
series of further interviews with chosen individuals in
the older group who have already shown themselves to have
good memories and an interest in contributing all they can
to this project* Suca men as Soy Xoung and Walter iyatt
of the Board, George Harrison, l« Herbert Case and Leslie
Bounds of the New Xork Bank, John Sinclair and Casisair Sienkeiwica of Philadelphia, are of this type, and there are
many sore* Ju«t as the Harvard Business Studies group finds
a tape recorder valuable for catching the living word in key interviews, so might w» profitably avail ourselves of this
technique in selected instances*
3* Writing
The writing and editing falls into tares parts (l) The monographs - in a study as extensive and important as
this the aonofraph plays a key part* la some instances it
stands by itself, as a definitive study of one part of a
related whole* In others it acts as an introductory study
and say later be incorporated into the whole. The pilot
phase uncovered certain monograph ideas, some of them
already started, others only in the planning stage* For
example, Carl Parry, now retired from the Board staff,
should be encouraged to complete his half-done monograph
on Selective Credit Controls, a subject In which he has
had active as well as theoretical interest* Gardner
Patterson of the International Finance Section at Princeton University would like aid to write a study of Reserve
International financial Operations in the 1920sj Lester
Chandler, also of Princeton, would like aid to write a
long monograph or a short book on "Ben Strong, Central
Banker* j two able men, Dr* Karl Bopp of the Philadelphia
Federal Beserve Bank and Professor Edward Shaw of Stanford
University are each interested in a study which si^ht be
called "The Art and Polities of Central Banking•*
Ho
commitments have been made in regard to such work* these
examples are, however, listed as showing the caliber of
work which this Committee would like to encourage, and
for which it would use funds*
(2) Hater Work!
Of these the definitive history is the core of the
project and the one toward which we continue to point
oar endeavors* We believe that its writing will take
a good three years on the part of a distinguished scholar
who has already shown the skill and judgment which the
creation of such a history demands* The task of exploration and recording of materials will be carried further
and the field of possible scholars will continue to be
canvassed*
Considering the high cost of subsidies for aajor
works we would hesitate to name other volumes for which
we are ambitious were it not for hopes that at least
some of these might find publication through coasaarcial
channels and would need froa this Committee little more
help than can be provided through consultation* use of
materials, perhaps a small subsidy for stenographic aid*
We have from the beginning believed that the play of
personalities would be an important factor in any governmental operation and that a volume of biographic
essays on key figures could be written so as to illumine various facets of the System* $e also think that
a volume of essays on crises in the banking world, follow*
ing the volume by Oliver B« f« Sprajme on History of Crises
Under the National Banking System. would be an important
contribution which might find publication through regular
channels* There would be others as the project develops*
(3) £ditinn and Pabllahlng of Documents
The Comait tee's staff has noted with interest the
British example whereby documents basic to central
banking in England, including key apeeehea and meiaoranda as well as legislation, were edited and published
under the title Gregory's Select Statutes, Documenta and
Reports Relating to British Bank* 1632-38, Comparable
material in American banking practise is scattered, and
might well be gathered in some such volume* It has also
been suggested that a comprehensive annotated bibliography
covering both published and unpublished works bearing on
the System would be a most useful contribution to research
activities• In addition it is not improbable that selected
papers from the various collections under survey m&j prove
so valuable as to deserve publication* No decisions have
been made in this field, but we list this activity as one
in which the Committee may engage*
Uae Of Materials
The Board and the Reserve Bank of New York have been particularly
interested in the work of this Committee; individuals from these institutions,
both officers and staff have been actively participating in it* Both Board and
Bank may face problems of participation when more recent events come to be discussed} the availability of confidential materials covering recent events aay
also present a problem*
The existence of this problem must be recognized, but the Committee
is confident that a solution will b@ found which will neither hamper the project
nor strain either the willingness or the ability of individuals or institutions
to continue their co-operation*
¥X Organisation^ Hrpwrnml and Budget
(a) Organization
The grant for the pilot project was made to the Brooklngt
Institution | an informal working arrangement was established whereby the
President of Brookings became a member of the Committee, work was done under
Committee supervision, and Brookings acted as disbursing and bookkeeping agent*
That institution also furnished office space in Washington for the Research
Director, as did the Federal Reserve Board*
Because the Committee was composed of busy men, the super**
vlsoiy function fell most frequently to its secretary, Donald Woodward, at
one time on the Board*s staff, now Chairman of the Finance Coaaittee of Vick
Chemical. The other members of the Committee have also shown steady and
vigorous interest in the pilot project and have been generous with tisie and
advice when called on for consultation*
The dally work was carried on by a small staff headed by
Mildred Adams as Hesearch Director, assisted by Catherine McKinst ry (who
shared her skill as research assistant and her time between the work of
this Committee and that of Br. John H« Williams, consultant to the Federal
Reserve Bank of New tork) and two young typists. All these assistants were
assigned by the Bank from its own staff, their salaries paid by the Committee.
The Bank also supplied working space and furniture*
This same plan of organization, with some modifications, is the
one we would recoBEaend for the comprehensive study* The association between
an ad hoc committee and Brookings Institution is unusual, it has values for
both groups and we recommend that it continue* Certain problems in that
relationship will arise when the publishing stage is reached* These problems
do not, however, call for inanedi&te solution and their resolving will not
disturb the work of this Cownittee,
.-
The Conurdttee's functioning, and its relation to the small
staff, would continue along established lines* Thus far the Committee has
been kept Informed of work accomplished through progress reports put out by
the research director, through personal consultation$ and by discussion in
meetings * Meetings will be held when needed, they will be called by the
Secretary with the consent of the Chairtaan. the identification of interests
between the Committee members and the work being done will m&ka for continuing
fc or; the part of members.
(b) Personnel
The nmjor project will be put in charge of a scholar of wide
experience and attainments who will have general supervision over its various
parts and who will himself undertake some of the writing assignments which the
Committee contemplates• Mr* W* Randolph Burgess, presently Deputy to the Secretary of the Treasury, will occupy this part when his present work at the
Treasury is completed* An active member of this Committee, he brings to the
post an extraordinary combination of practical experience in monetary affairs
and scholarly accomplishment * A graduate of Brown University, he got his
doctorate at Columbia in 1920 and went at once to the Federal &sssrve Bank
of Hew York* He became Deputy Governor of that Bank in 1930, and vice President in 1936. To this experience in central banking he added fifteen years'
experience in commercial banking as Vice Chairman of the national City Bank
and then Chairman of its executive committee*
In 1953 he returned to the
Federal Beserve Bank* only to go to the Treasury as Deputy to the Secretary*
The breadth of his scholarly interests is Indicated by the fact that he has
been at various times President of the Aaerican Statistical Association and
the Academy of Political Science, as well as of the American Bankers Association. Hi** Barges* i« editor of a volume of papers by Benjamin Strong, "Interpretations of Federal He serve Policy11* and author of "The lie serve Banks and the
•HiHoney Systea", a classic in this field of literature.
For obvious reasons this cannot yet b@ publiclj announced,
but the commitment is firm* Mr* Burmese will give full-time to this project*
He has from the beginning of the pilot phase been an active participant in
Committee discussion and will so continue daring the renainder of his service
at the Treasury* Daring that interim he will continue to be assisted in Committee matters by Mr. Donald Woodward. Secretary of the Committee. Mr* Woodward's experience with monetary material includes work on the Board staff and
writing about System affairs for the Wall Street Journal. Business leek and The
Economist (of London)* He developed the research division of the Mutual Life
Insurance Company and became First Vice President of that institution* He is
now Chairman of the Finance Committee of the Vick Chemical Corporation*
The other four members of the Corasittee are. of course, experts
In the monetary field* The Chairman, Mr* Allan Pproul, has spent his working
life within the Federal Heserve System. Starting in 1920 in the Federal Heserve
Bank of San Francisco he served there ten years and then moved to the Federal
Heserve Bank of Hew York* He has been President of the Mew York Bank since 19kl*
Mr* William MeChesney Martin Jr. comes from a St* Louis family
famous in central banking* To experience in the Federal Beserve Bank of St*
Louis he added ten years of activity in the investment business* Be was President
of the Hew Tork Stock Exchange from 1938 to 1 9 & S Chairman and President of
the i^xport-Iaport Bank in 191*6 $ U . S . Director of the Bank for Reconstruction
and Development | Assistant Secretary of the Treasury in I?ii9* He Is now Chair*
man of the Board of Governors of the Federal Keserve System*
Br* Robert Calkins is now President of the Brookings Institution*
He got his doctorate in 1933 with a thesis on banking, went at once into academic
work* lecturing on economics both at Stanford and at the University of California
-ISwhere he becaaa Chairaan of the looncaic© Bapartaant and then Dean of the
College of Uo®s»rce» Betw##n 19kl and 19h7 he was Dean of the School of
Business at Coluabia University, and from 19^7 on he was Vioe President
and Director of tha General Education Board, Dr. Calkins served for five
Tears as Director of the Federal Baserv* Bank of Htw Toxic*
Br. Walter *• Stewart also has combined academic with banking
and lovest&$nt ejqperienoa* Professor of £c©nomic* at Aaaerst Collate fro»
1^16 to 1922, he than went to the Federal Beserre Board as Director of the
Division of Hessareh and Statistics*
Xa 1928 he bsearaa Economic Advisor to
the Bsnk of £ngland| in 1?31 M was appointed American Kssiber of a speoisl
coEiaittws of the Bank of ItJternational Settleawnts to look Into German reparation obligations unttor the Toung Flan* Ite was for sose %±m President of
Case Poasny ami Qo®%mw» an Investnsnt house* Tnxsfcm of the Hook®feller
Fonmiation, Ohalman of the Seneval Education Board, Professor at the Institute for Adranoed Studies,
hs was In 1953 callod to Washington to baooaie a
msmfcmr of the Cornell of leonosdo Advisers*
As lusaeatxh Diraotor, Hldred Adams who initiated m£ carried
through the work of the pilot phasa, will contfbue durinj! at least the early
period of the saain study* l i a s ^daiss (in private lif$ Mx^.W* Houston K«nyonf
wife ol a ^ew York attorney) i s an «cope&lst by education and a journalist by
training* To axperlene* in feature writing for the Hew York Sunday Tises,
Barrons weekly and various oths>r isagasinds th» added editorial writing for
Business i'«ekf and for fhe ^-onoaiat (of London)* She has recently been United
Nations corespondent for the latter publication*
In order to do the amount of visiting of Reserve Banks which
the study needs* Miss Adams mist have an assistant capable of accepting more
responsibility for adninistrtttlve detail than can be delegated to Miss KeKlnttry
-16if the part-time arrangement for the latter1 a eervices prevailing under the
pilot project la to continue* The Committee's aim is to find a well-equipped
and exceptionally able research assistant, with the necessary academic
training in monetary matter* and some experience in administration, who
has the capacity to play a major role in the project* Such a person would.
after a year or so as administrative assistant, take charge and carry forwards Miss Adams will then be in a unique position to embark on a major
writing part of the project*
In addition we would need a secretary with research experience* (Kiss McKinatry is so exceptional that we would like to keep her.
even with the handicap of part-timo service)* It may be necessary to add
secretarial help in Washington* and provision for this contingency will
be made in the budget*
(c) Quarters
There is reason to believe that offices and equipment assigned
for the pilot project by the Federal Beserve Board in Washington, the Brooking*
Institution and the Federal Beserve Bank in Mew York will continue to be available*
This provision of rent-free quarters and equipment (the Federal
Heserve Bank imposes a wif nominal fee for furniture rental which is more than
counterbalanced by its many operating services) is a concrete instance of the
interest which the System is taking i$ the entire project* Soard and Banks are
also making important contributions in the form of material and of research
assistance.
Their continued co-operation is of course a vital factor in the
process*
(d) Budget
In the exploratory phase, personnel of Board and Banks have
been helpful and co-operative with specialised knowledge and time for discussion.
The CoBB&ttee*s debt to librarians, heads of research departments, purchasing
agents, secretaries who helped out is very real, and financially substantial*
Significant parts of the cost of this project will be provided
by contributions from the System In the fora of rent-free quarters, use of
equipment, consultations with officers, hours of work on the part of librarians,
research aides, purchasing agents, secretaries, and other staff members. The
Board and the twelve Reserve Banks have evidenced continuing interest* Hie
Treasury files are open to us, the manuscript division of the Library of Congress and interested people in the University libraries are rendering us all
possible aid* The Committee members themselves are serving without compensation, and with no allowances except for occasional travel expense*
In addition to these large contributions from the %rstem and
other groups, contributions which in themselves attest to the importance of
this project, further funds will be needed to carry on this study*
Die costs which can be estimated are preponderantly for staff
salaries, travel expenses, supplies (limited mostly to stationery and archival
materials) and subventions to be used in three ways - to be paid for the study
and evaluation of collections of papers, to assist the writers of monographs,
to defray the cost of major works*
Based on experience in the pilot project, we have made estimates
in two groups, one for an early period when research expenses and travel costs
will be relatively high, the other for a period when the heavy costs will
take the form of subventions and other aids to writing and publishing which are
the goals of this study. These budgets should be taken as estimates only, and
we would ask that a hiph degree of flexibility be allowed the Committee In al»
locating the funds for which It asks* There may be Instances in which provision
for salaries will be transferred to grants-in-aid, and vice versa, depending on
the situation*
1* %9$k to
Earlier Period
Later Period
Salaries
$30,000
to provide a research director
administrative assistant,
research secretary, secretary
for the projsot head, typist
Salaries
travel Costs
3,000
travel Costs
2,030
Other expenses
1,500
Other expenses
1,000
15*000
funds for writing
Annual Total
$10,000
Binds for writing
ii,9.50O
Totals for earlier period
Totals for later period
Total for five years
Annual total
2^000
#6?,0QQ
1 99*000
2^000
1310,000
Ttm arithmetic in this table is worked out on a two and a
three-year period* Actually we cannot tell at this moment exactly when
people w i H be available or Just how fast some steps can go* Therefore,
we would ask that the expenditure curve be left flestible*
2h view of these estisates the Coamittee respectfully requests that
for the purpose described in this proposal the Hocke feller Foundation grant
s:310,000 to be expended in the five years between June 1, 19$h and May 31, 19$9*
The grant should go to the Brooking Institution with the understanding that its responsibilities and those of the Committee toward the project are
mutual, and that an infomal relationship between the two bodies comparable to
that which proved so satisfactory during the pilot phase is to continue*
the report of the pilot project, which reveals the wealth Of materials
found and indicates the richness yet uncovered, is appended*
Walter Bagehot said "Money will not manage itself11 • To which
the late imanual Goldenwsiser added his plea for "an understanding of this
major force, of its causation and consequences" » We are convinced that the
role which central banking plays in the management of money will be even
greater in the future than it is now* It is the hope of this Coamittoe
that the study proposed will contribute to its better understanding*
V
Proposal
Experience in the pilot project, and consultation with those
engaged in other attempts to chart and record the course of living
institution's have taught us that the task of writing a comprehensive
history of the Federal Seserve System which is the core of our dndeavofc
divides its-tlf into three steps; these for convenience may be called
the archival process, the interview process and the process of history
writing. Logically these three appear to be separate, just as in the
pilot project the process/ of discovery of papers, gathering of memories
and building of card files appeared to "be separate. Actually^ each process
in the pilot project fed and profited from each other. The success
of that projecTt was in B O small part dV)e to what seemed at times a
handicap - namely, that all three processes were necessarily going
on at once»
Were it advisable, in view of that experience, to try to c#_rry on
the archival, the interview and the history-yaoBai writing processes
of the main project one at a time, in series, we might propose that
the grand design move forward in two phases. A reading of the report
imicjr
on the pilot ptfoject shows how much has been started, and howV±±fcfc±e
remains to be done.
^
£rxxskflDix xFor example, the research director feoped ti> visit all twelve
Reserve Banks during the pilot phase, but the volume and variety of
work under way forced postponement; most of those Banks distant from
the Atlantic seaboard remain to be explored. The mapping and survey
stage uncovered not anly papers and memories. It also set the pattern for
the study of those papers and those memoirs. A great deal more must be
done along these lines before the master files of papers and other
materials
are ready for the student's use.
a
- ; *
Not only must the, master f i l e s be completed, butleMKpapers whiOh have
been uncovered during the p i l o t p r o j e c t , and the c o l l e c t i o n s s t i l l to
\
be found, must be analyzed for pertinent mar.erial. The Kamlin diaries-*
stand alone in terms of the care for preparation and indexing l a t h e d
r e c e n t l y released from.chcfrgncU>"-whiet!Kgpb-fefrem~±Trrirrbartre,
on them, but e n the HamTln diariesyare untouched ground for the student,
&yaaigwn -"omeone must read those 26 volumes and evaluate them for the
purposes of any comprehensive h i s t o r y of the System.
The work t o be done on other c o l l e c t i o n ^ i s s t i l l more elementary.
Fui1
UJLJIIIUIUL
rYofp^^ 1 " Fjbnrti Kim iH nf—H'ii
like to,xJLx^ii^r and itwfr- Mi
n
II iir rnily irf VI i'| .l"1^ r»
n l r n ^ n ^ H « w r The National Records
Management group stands ready to start a pilot study of a similar group
of papers in order to chart chets and work out efficient methods of
handling. Young Parker rflllis would take tine from his work at the
Federal Reserve Bank in Boston to survey his father's papers if this were
arranged. The Goldenweiser pqpers, the Adolph Miller papers are destined
for this Committee's use. These and many more must be classified and
set in order.
But even while setting down these small examples of the
large amount of work which remains to be done in the first two
processes we realize how inextricably linked with them ic the third
0 a-tw, r\
process. Evwrtn the pilot phase we became aware of writings under
. Q* ldii&uiahiVtg "i'-or -te^g-of encouragement which \rould be valuable
for our purposes i£-f±Rrsh©4~ and which Would be finished the sooner
if they could profit from the work we were doing. Research o£
wiii is not -well done in a vacuum or without the.spur of a person
who wants to use its results. The historian who can work with researchers, using their data, stimulating and broadening their search
by his questions, has a richer content to draw from than the one who
starts after the research process is finished and^ pw.fr "iB-»cU£ilo
Under these circumstances we apo goingfee*>¥vpvs& that the
Rockefeller Toundation grant us the sura of $300,000, to be available
for spending over the course of five years, with such funds we would
expect to accomplish the following ends:
1. Archival (a) to complete the various master card files of biographic and
bibliographic material started under the pilot project.
-5(b) to make available to qualified students such part of this
research material as is pertinent to their inquiry•
(c) to work out problems of handling pertinent collections of
papers and putting then in useable shape for students*
include financial aid in specific instances.
Carter Glass papers are -4
This nay
For example-, the
the University of Virginia,
(see report).
Professor Elbert Kincaid of that*•»llng,ai, duo to retire from teaching
in June, would like to classify and study them if funds could be
provided.
2.
Interview (a) to continue the interview process which has yielded such good
results under the pilot project, and to enter on a series o
A
interviews ;o.th chosen individuals in the older group who have already
shown themselves to have good memories and an interest in contributing
all they can to this project.
Such men as Roy Young and Walter Vyatt of
the Board, jQaiiipV) D*»nrifnn dn, George Harrison, J. Herbert Case and Leslie
Rounds of the New York Bank, John Sinclair and Casimir Sienkicwicz of
Philadelphia, are of this type, and there are many more.
T4t i R frh^
hr>pp> nf fhrffnmrriMinn'i vfiivi h- 111 "" 1111 Mi I- just as the Harvard
Business Studies group j**e&e> a tape recorde£r*for catching the living
techni
word «*.««# interviews, so atee might profitably 4b« this technique
in selected instances.
3.
History-writing, which i s the core of this project, falls into two
groups, the comprehensive history itself, and certain principal works
wiiich bear on i t , contribute to i t , «a»d aice in -bofaag ~T i?nn'*h? "t-rfmrl
^ ^ i c t ^
^ + v i m r r nilurr
'
7? (b)
t|kw |
i«» •HI,-
t PWecc i t e_.as
The prfliitiipnA works are Jrii Lliu 'niaii'i monograph^.
n
'
K
examples'"fake fact Hurt Carl Parry, now retired from the Board staff,
should be encouraged to complete his half-done monograph on Selective
I
Credit Controls, a subject in which he has had active as well as
theoretical interest.
Gardner Patterson of the International Finance
Section at Princeton University would like aid to write a study of
Reserve international financial operations in the 1920s: Lester
Chandler, also of Princeton, would like aid to write a long monograph
or a short book on "Ben Strong, Central Banker'1; two able men, Dr.
Karl Bopp of the Philadelphia Federal Reserve Bank and Professor
Edward Shane of Stanford University are interested in a study which
I
might be called "The Art and Politics of Central Banking".
It goes
without saying that no commitments have been made in regard to such
work.
These examples are, however,. &vte& as showing the caliber
of work which this Committee would like to encourage, and for -which
\
it might use funds.
We have every reason to hope that the work done
by this Committee, the contacts established during the pilot phase, and
the
the stimulus uhich K%kar6 existence of this project provides will result
in other important works-
A
The writing of the history itself is the major commitment
toward which all this work leads and for which funds are being asked.
The author must be a man who combines proven scholarly ability with
wide experience in the monetary field.
His name should carry authority
in both the academic and the practical world.
Ve are assured of the
interest of a candidate who meets the most stringent requirements,
-7himself the author of books "which are classics in the field.
This
potential author is at the moment occupying a poet of high rank in the
Government, and any specific discussion of his future availability
runs the risk of raising rumors which should not be started.
Ve trust
that the Foundation will accept our word that the qualifications
and experience, both in monetary affairs and in the very different
disciplines of the student and the writer, are such that we recommend
him without qualification.
Operation
Experience in the pilot project has persuaded us that the
best way to handle the comprehensive design is through a small administrative staff, over which this Committee, which in one form or another
would continue in being, will have supervision.
The Committee's
association with Brookings, which has besn both pleasant and helpful,
Mill continue, though perhaps with modifications made necessary by
the larger size of the project and the new problems raised by entry
into the writing phase.
Those new problems involve three sets of relationships - those
concerned with the use of material, those raised by relationships of
Board and Bank with this Committee, those which arise from the commission or subvension of any author and the relationship of the
Committee and Brookings Institution to whatever work he produces.
The use of material is a problem which becomes acute when
it is proposed to move from the archival and interview steps to that
of history writing.
In the operations of the Board and the Banks
-3certain information is made public. Reports, news letters, legislation,
published hearings and so on come in this first category. Other
types of information are held confidential, bone for a period of years,
some under an indefinite seal. When the pilot project was started
it was with the understanding that the Board was much interested in
helping along an independent and impartial history project, did
not wish to impose restrictions on the Committee's research, but
would prefer that no explorations be made into events taking place
after 1935* Because the research director was during the pilot
project primarily eager to search out the papers and people of the
older stages of the System this cut-off date created no difficulties.
It will, however, pose problems as the work of history-writing takes
shape. A forty-year life, whether of man or of institution, can
hardly be adequately recorded if biographers and historians are allowed to examine only its first half. On the other hand in operations as iroMucivti with .oawPi*©* as those which take ulace in the
^
A
monetary world, certain reticences must obviously be respected.
Two ways of handling theproblem have been proposed, one that
it be talc en back to the Board in the hope of another ruling when and
if the question becomes acute, the other that perhaps it is unfair
Coww\Vtid
to ask men now active in the Reserve System to stay on the flaapd and
lend their tao-it approval to explorations which in their official
roles they might feel unable to encourage. The Committee would iike
hate to lose them as members, but neither does any one want them to
7
be subjected to unnecessary dilemmas. A third solution might be to
postpone action on the problem in view of the fact that the work
thus far proposed is mostly concerned with matters prior to 1935
and that therefore the difficulties are all in the future. "When
they arise they can be dealt with individually.
As for the future commissioning of authors, and the problems which this may create, the Committee would in this follow the
rules laid down by Brookings Institution after long experience and
found satisfactoryifesjMw***.
Staff and Office
The pilot project was carried on by the research director,
Mildred Adams, with the aid 6T" ayqLhiliTlgil research assistant ,>
U4
p
fiire hi^iii^bfiuaa.s rharflffl wjjjiftJDr. John Williams, and two young typists
"
who have been helping to build card files. The association with
Dr. Williams which this arrangement made possible had real values
which migii )JO sroiglied a/jjamgt the"'difficulty of operating with re-
A
search help only on ae a part-time basis.
The research director vrould like to continue in the same
role during the first year or so of the major phase. She must,
however, have an assistant able to give full time and capable of accepting nore responsibility for administrative detail than could be
delegated under the part-time arrangement prevailing during the
pilot project.
The ideal would be to find a young, veil-equipped
and able research assistant with the proper academic training, and
some experience in administrative work of a related nature, who would
-10ultimately be capable of taking entire charge of the project and
carrying it forward.
Offices and equipment were assigned for the pilot project
in the Federal Reserve Board in Washington, the Brookings Institution,
the Federal Reserve Bank of Mew York,
ITork was mostly centered in the latter because staff was
provided there and the research director is resident in New York.
There is every reason to believe that similar arrangements will be
continued throughout the major phase.
This provision of ront free quarters and equipment (the
Federal Reserve Bank imposes a very nominal fee for furniture rental
T '
which is more than counterbalanced by its Vu^w^
CAIVCA < V W
\
*-\ services")
< r '
is a concrete instance of the interest which the System is taking in
the entire project.
Board and Banks are also making important
contributions in the form of material and of research assistance
which cuts do-71 the coct of the entire project.
3udp;et
The pilot project operated on a budget of $>10,000 for four
months, which on an annual basis comes to f.30,000.
As we paid no
rent for working premises, that money provided salaries, supplies
and travel costs.
The main project has wider needs.
The same number of
people (four) should bo provided for the office, but the research
director needs an administrative assistant, and one of the typists
should be replaced b;. a secretary with some research experience,
(if Miss McKinstry could be secured for full instead of part-time in
this post she would be excellent, but this would mean her separation
from Dr. Williams, a possibility which seems remote.) Travel costs
would grow as the time
factor is eased and the presence of a good
administrative assistant in the office makes it possible for the
research director to go further afield.
For the Archival and interview phase? we have estimated a budget
of §3U,000 a year, broken down for each year as follows}
Salar/y of research director
n
n
administrative assistant
11
" research secretary
»
» typist
Expense and travel
$10,000 (to be raised to (12,000)
7,500
6,000
3,500
7,000
$3U,000 per year
Assumiing that this budget will continue during the project's
five years of life, and that it is made sufficiently flexible so
that thfe research director can have leeway with the funds provided
to care for changing needs as the project progresses, thir calls for
a total of
$170,000 to be spent for archival and interview purposes.
The costs of writing such a history as we contemplate are
variously estimated. The best guess, based on Brookings experience
the costs of
with .similar work in other fields, is that a two-volume history of the
A
->
highest type will cost in the neighborhood of $1120,000, To this we
wo Id add $10,000 for assistance to the writers of monographs. This
means only $2,000 a year for this smaller purpose, which limits the
possible aid to |2ySl0Slz3izy:B3njx little more than stenographic assistance, but we are confident that in certain instances even this will
mean the difference between frustration of a scholar ahfi the production
of a valuable work •
*J*s crO
Ifclt coR«r W %&&$0QOt • t o u l vtitoh i f propOMM! for t h i i
to b« fipvnt VWT th#
<3tt»at that the
foek«f»ll«r
Tnftlttttion OA th«
oitUliMd In thU
thli
of four j—vu.
Vt
grttat thle *UR to th«
tbtt i t wtiT V* »rp«»«»f! AMP th»
*ot* u»d«r th* direct nxtpmrnnton of
Ur^"
Ci
if
ev\
"^ \/(J$
Proposal
Experience in the pilot project, and consultation with those
engaged in other attempts to chart and record the course of living
institutions, have taught us that the task of writing a comprehensive
history of the Federal Reserve System which is the core of our endeavor
divides itself into three steps; these for convenience may be called
the archival process, the interview process ana the process of history
writing* Logically, these three appear to be separate, just as in the
pilot project the process of discovery of papers, gathering of memories
and building of card files appeared to be separate* Actually, each
process in the pilot project fed and profited from each other* The
success of that project was in no small part due to what seemed at
times a handicap - namely, that all three processes were necessarily
going on at once*
Were it advisable, in view of that experience, to try to carry on
the archival, the interview and the history-writing processes of the
main project one at a time, in series, we might propose that the grand
design move forward in two phases* A reading of the report on the pilot
project shows how much has been started, and how much remains to be done*
For example, the research director hoped to visit all twelve Reserve
Banks during the pilot phase, but the volume and variety of work under
way forced postponement; most of those Banks distant from the Atlantic
seaboard remain to be explored. The mapping and survey stage uncovered
not only papers and memories* It also set the pattern for the study of
those papers and those memoirs* A great deal more must be done along
these lines before the master files of papers and other materials are
ready for the student's use*
Mot only must the master files be completed, but the papers vhich
have been uncovered during the pilot project, and the collections still
to be found, must be analysed for pertinent material* The Hamlin diaries,
recently released from a ten-year seal, stand alone in terms of the care
for preparation and indexing lavished on them, but even the Haalin diaries
are untouched ground for the student* Someone must read those 26 volumes
and evaluate thorn for the purposes of any comprehensive history of the
System,
The work to be done on other collections is still more elementary.
The National Records Management group stands ready to start a pilot study
of a similar group of papers in order to chart costs and work out
efficient methods of handling, Xoung Parker Willis would take time
from his work at the Federal Reserve Bank in Boston to survey his
father1 a papers if this were arranged. The Qoldenweiser papers, the
Adolph Killer papers are destined for this Committee1 s use* These and
many more must be classified and set in order*
But even while setting down these small examples of the large
amount of work which remains to be done in the first two processes we
realize how inextricably linked with them is the third process. During
the pilot phase we became aware of writings under way and needing
encouragement which would be valuable for our purposes and which would
b@ finished the sooner if they could profit from the work we were doing.
Research into the past is not well done in a vacuum or without tho added
spur of a person who wants to use its results* The historian who can
work with researchers, using their data, stimulating and broadening
their search by his questions, has a richer content to draw from than
the one who starts after the research process is finished and filed
away.
-3Under these circumstances we ask that the Rockefeller Foundation
grant us the sum of $300,000, to be available for spending over the
course of fire years. With such funds we would expect to accomplish
the following endsi
*•« Archival (a) to complete the various master card files of biographic and
bibliographic material started under the pilot project.
(b) to make available to qualified students such part of this
research material as is pertinent to their inquiry*
(c) to work out problems of handling pertinent collections of
papers and putting them in usable shape for students. This may
include financial aid in specific instances* For example, the
Carter Glass papers are at the University of Virginia,
(see report).
Professor Hbert Eincaid of that university, due to retire from
teaching in June, would like to classify and study them if funds
could be provided*
2« Interview (a) to continue the interview process "vtfxich has yielded such good
results under the pilot project, and to enter on a series of further
interviews with chosen individuals in the older group who have already
shown themselves to have good memories and an interest in contributing
all thsy cea to this project*
Such men as Roy Young and Walter Wyatt
of the Board, George Harrison, J. Herbert Case end Leslie Rounds of the
New lork Bsnk, John Sinclair and Casimir Sienkiewica of Philadelphia,
are of this type, and there are meny more* Just as the Harvard
Business Studies group finds a tape recorder valuable for catching
the living vord in key interviews, so we might profitably experiment
with this technique in selected instances*
3. History-writing» which is the core of this project, falls into two
groups, the comprehensive history Itself, and certain peripheral works
which bear on it, contribute to it, and are already planned or under way*
(a) The writing of the history itself is the major commitment toward
which all this work leads and for which funds are being asked. The
author must be a man who combines proven scholarly ability with wide
experience In the monetary field. His name should carry authority in
both the academic and the practical world* Ve are assured of the interest
of a candidate who meets the most stringent requirements, himself the
author of books 'which are classics in the field. This potential author
is at the moment occupying a post of high rank In the Government, and
any specific discussion of his future availability runs the risk of
raising rumors which should not be started* We trust that the Foundation
will accept our word that the qualifications and experience, both in
monetary affairs and in the ^reiy different disciplines of the student
and the writer, are such that we can recommend him without qualification*
(b) The jie.il|I)II»'IBA works are mostly of the monograph type, Ve cite
the following as examples: Carl Parry, now retired from the Board staff,
should be encouraged to complete his half-done monograph on Selective
Credit Controls, a subject in which he has had active as well as
theoretical interest* Gardner Patterson of the International Finance
Section at Princeton University would like aid to write a study of
Reserve international financial operations in the 1920s) Lester Chandler,
also of Princeton, would like aid to write a long monograph or a short
book on "Ben Strong, Central Banker"j two able men, Dr. Karl Bopp of the
Philadelphia Federal Reserve Bank and Professor Edward Shaw of Stanford
University are interested in a study which might be called "The Art end
Politics of Central Banking." It goes without saying that no commitments
have been made in regard to such work* These examples are, however,
listed as showing the caliber of work which this Committee would like to
encourage, and for which it would use funds* We have every reason to
hope that the work done by this Committee, the contacts established
during the pilot phase, and the stimulus which the existence of this
project provides will result in several other important works.
Operation
Experience in the pilot project has persuaded us that the best
way to handle the comprehensive design is through a small adminlstrative
staff, over which this Committee, which in one form or another would
continue in being, will have supervision. The Committee1s association
with Brookings, which has been both pleasant and helpful, will continue,
though perhaps with modifications made necessary by the larger size of
the project and the new problems raised by entry into the writing phase.
Those new problems involve three sets of relationships - those
concerned with the use of material, those raised by relationships of
Board and Bank with this Committee, those which arise from the commission
or subvention of any author and the relationship of the Committee and
Brookings Institution to whatever work he produces.
The use of material is a problem which becomes acute when it is
proposed to move from the archival and interview steps to that of history
writing. In the operations of the Board and the Banks certain information
is made public. Reports, news letters, legislation, published hearings
and so on come in this first category. Other types of information are
held confidential, some for a period of years, some under an indefinite
-6seal* When the pilot project was started it was with the understanding
that the Board was much interested in helping along an independent and
impartial history project, did not wish to impose restrictions on the
Committee18 research, but would prefer that no explorations be made into
events taking place after 1935* Because the research director was
during the pilot project primarily eager to search out the papers and
people of the older stages of the System this cut-off date created no
difficulties* It will, however, pose problems as the work of historywriting takes shape, A forty-year life, whether of man or of institution,
can hardly be adequately recorded if biographers and historians are allowed
to examine only its first half* On the other hand in operations as pregnant
with differences of opinion as those vhich take place in the monetary world,
certain reticences must obviously be respected.
Two ways of handling the problem have been proposed, one that it be
taken back to the Board in the hope of another ruling when and if the
question becomes acute, the other that perhaps it is unfair to ask men
now active in the Reserve System to stay on the Committee and thus lend
their tacit approval to explorations which in their official roles they
might feel unable to encourage. The Committee would hate to lose thorn
as members, but neither does any one want them to be subjected to
unnecessary dilemmas, A third solution might be to postpone action on
the problem in view of the fact that the work thus far proposed is mostly
concerned with matters prior to 1935 and that therefore the difficulties
are all in the future. When they arise they can be dealt with individually.
As for the future commissioning of authors, and the problems which
this may create, the Committee would in this follow the rules laid down
by Brookings Institution after long experience and found satisfactory.
Staff and Office
The pilot project was carried on by the research director,
Mildred Adams, with the aid of a most competent research assistant,
K&therine Mc&instry trained by Dr, John Williams and loaned part-time
by him, and two young typists who have been helping to build cart files.
The association with 0r, Williams which this arrangement made possible
had real values which compensated in that phase for the difficulty of
operating with research help only on a part-time basis.
The research director would like to continue in the same role
during the first year or so of the major phase. She must, however,
have an assistant able to give full time and capable of accepting
more responsibility for administrative detail than could be delegated
under the part-time arrangement prevailing during the pilot project.
The ideal would be to find a young, well-equipped and able research
assistant with the proper academic training, and some experience in
administrative work of a related nature, who would ultimately be
capable of taking entire charge of the project and carrying it forward.
Offices and equipment were assigned for the pilot project in the
Federal Reserve Board in Washington, the Brooking* Institution, the
Federal Reserve Bank of Hew lork.
Work was mostly centered in the latter because staff was provided
there and the research director is resident in New York. There is Qv®ry
reason to believe that similar arrangements will be continued throughout
the major phase.
This provision of rent free quarters and equipment (the Federal
Reserve Bank imposes a veiy nominal fee for furniture rental which is
more than counterbalanced by its many operating services) is a concrete
instance of the interest which the System is taking in the entire
project. Board end Banks are also making important contributions
in the form of material and of research assistance which cuts down
the cost of the entire project.
Budget
The pilot project operated on a budget of $10,000 for four months,
which on an annual basis comes to 130,000. As we paid no rent for
working premises, that money provided salaries, supplies and travel
costs*
The main project has wider needs. The same number of people (four)
should be provided for the office, but the research director needs an
administrative assistant, and one of the typists should be replaced by
a secretary with some research experience.
(If Mies McKinatry could be
secured for full instead of part-time in this post she would be excellent,
but this would mean her separation from Dr. Williams, a possibility which
seems remote*) Travel costs would grow as the time factor is eased and
the presence of a good administrative assistant in the office makes it
possible for the research director to go further afield*
For the archival and interview phases we have estimated a budget
of $34*000 a year, broken down for each year as follows;
Salary of research director
*
* administrative assistant
n
*
research secretary
•
• typist
Expense and travel
$10,000 (to be raised to $12,000)
7,500
6,000
3,500
7.0QQ
$34,000 per year
Assuming that this budget will continue during the project's five
years of life,and that i t i s made sufficiently flexible so that the
-9research director can have leeway with the funds provided to care for
changing needs as thn project progresses, this calls for a total of
1170,000 to be spent for archival and interview purposes*
The costs of writing such a history as we contemplate are
variously estimated.
The best guess, based on Brookings experience
witn the costs of similar work in other fields, i s that a two-volume
history of the highest type will cost in the neighborhood of $120,000.
To this we would add $10,000 for assistance to the writers of
monographs* This means only |2 f 000 a year for this smaller purpose,
which limits the possible aid to l i t t l e more then stenographic
assistance, but we are confident that in certain instances even this
will mean the difference between frustration of & scholar *nd the
production of a valuable work*
This comes to #300,000 a total which ±a proposed for tuis project
to be spent over the course of five years.
We rearjectfully request that
the Rockefeller Foundation grant this sum to the Brookings Institution
on the understanding that i t will be expended for the purposes outlined
in this proposal and under the direct supervision of this Coaiaittse.
•
tA
I
i -
/>
•
'
*• > • • i ' i j i l
hh i
April 6, 195A
DRAFT PROPOSAL
Writing in 1946 about twentieth century monetary controls,
Professor Robert Warren of Princeton University observed that in the nineteenth century there developed a new type of society, the money economy,
which made new demands on those who administer Government control over the
factor of money. "High and low, rich and poor, bond and free there had
always been, but never before had there been an economy that expected the
majority of its people to be totally independent upon the continuity of a
stream of money income.11
Continuity is, for this proposal, the governing word, and the
one that catches at the student. In this new continuity of money income
the panic of 1907 represented the climax of a series of interruptions
which had repeatedly upset the United States. This was not the sharpest
crisis that the country had known, nor the worst. It was the one beyond
which Americans refused to go without making a determined effort to control
what seemed to be the monetary causes and effects of a panic. The creation
of the Federal Reserve System was the remedy suggested, approved, and written into the law.
Since December 1913, when the first Federal Reserve Act was
bvy
times.
signed, the American economy has expanded in size .about nine/a&a—taw.
The principal generative factors in that economy, agriculture and industry,
have changed places and the resultant effectson American society stand
clear on every street corner. The American citizen is in general aware
of these changes. He knows a certain amount about industry, how it
functions, how strong it is, what part it plays in giving the United States
1/ Economic Research and the Development of Economic Science and Public
Policy, lational Bureau of Economic Research. 1946. p. 90
- 2 its present place in the -world. He regards himself as living in an industrial economy. He seldom tries to understand the role of money
except for the part it plays in his own personal life.
When the Committee to Study the History of the Federal Reserve
Systeaa first proposed to the Rockefeller Foundation a pilot project, its
objective vas preparatory work leading to a comprehensive study of the
System.
"Papers which form the source material should be located, clas-
sified and roughly analysed* said the proposal*
"Important characters in
the drama should be sorted out, their co-operation asked and their interest
enlisted. The dimensions and proportions of this comprehensive study should
be sketched and its possibilities bulked out. The exploratory study would at
least hope to answer the basic questions, 'vhat?1, 'where?1 and 'whom1."
Toward the end thus described, the Foundation generously granted
$10,000 to the Brookings Institution and work started January 15, to end
May 1. Four weeks of that period remain, but enough has been done so that
we can report on the result of the mapping and survey of papers and people.
This has been in the best sense of the word a pilot project. The
exploratory process, superficial though it had to be, and incomplete, has
yielded a gratifying harvest. More collections of papers have been located
and surveyed than we thought possible.
The characters in the drama are nore numerous and possessed of
better memories than we dared to hope. Even from the earliest years a few
hardy operating men survive in each bank. To some of these men, work In the
Federal Reserve System has been a lifetime occupation. Their memories will,
of course, be checked with the records, but the sense of struggle and accomplishment which talks with them convey would be a valuable factor In any history of any institution. Their interest has been enlisted and their co-operation is generous. As a method of recording people, papers and events pertinent
to this inquiry we have started four types of card files, one a Who* a Who file
-2-CL
of persons; one a time file vhich co-ordinates persons, pertinent events,
legislation; one a bibliographic file of published and unpublished material;
one a subject file. These master files are arranged so that the/ could be
photostated for the benefit of students working on a later phase of the project. They are by no means completed, but their pattern is set.
Papers
When we set forth the terms of the pilot project we said that "the
papers vhich would be needed as source material in writing an adequate history
r
are scattered asaong Government, banking and private files. It is not even known
what exists, nor where some of what exists could be found." To remedy this situ*
ation has been a first endeavor. Ve have not yet located everything we set out
to find, but we can now answer the question "Vhere"? in some detail. More remains
to be done, but at least we have made a fruitful start.
Thanks to the co-operation of librarians at the Library of Congress,
in the Board and in the banks, we have made progress in the search for pertinent
bibliographies of basic material which is printed, and in the more difficult hunt
for related material which is not printed. Ve know, for example, that material
covering the Liberty Loans of World Var I was sent from the Treasury to the Ha*
tional Archives, and that the records of the Capital Issues Committee are deposited in the same place. Ve have a listing of the indispensable material which
must underlie any study of the Board's work—the legislation, the hearings, the
minutes, the policy decisions, the reports and so on—and we have a similar list
for the New York Bank.
Of the other District Banks, the research director has visited Boston
and Philadelphia, and hopes to get to several of the other nine before this pilot
phase is finished. Meanwhile, we have been in correspondence with all of them,
and are receiving information as to their own stores of local historical material.
We have in preparation a master list of basic material which we hope to send for
-3their checking. If this device works, it will furnish the data for & bibliography of be^sic historical material for the entire System vhich will be of
primary use in the ttudiea in prospect.
As for the papers of individuals concerned with the Systom1a history,
ve heve located enough collections so that ve are now facing problem* of handling, indexing and permanent deposit. This search is by no means complete, but
it has already uncovered riches which vill be of great uae to scholars if they
can be made available and usable. The siae of the collections makes it necessary
to postpone classification to • later date, but ve have found an organization which
might handle such papers, and at our suggestion they propose to start a sample
study to determine time and costs of the necessary process. Problems of a place
of deposit, and of permission to use, still remain but the fact that these have
arisen and must be left for a second phase is, in an oblique way, an earnest of
the accomplishments of this operation.
The following list of papers uncovered during this pilot phase includes
those of Board members, high officials of the executive branch, Members of Congress,
Governors of Reserve Banks, men in academic life whose writings have been influential
in the development of the Systems
The papers of Voodrow Wilson, in whose administration the Federal Reserve System was first organized, are in the Library of Congress. Permission to
consult them has been granted to this Committee.
The papers of Villlaa G. McAdoo, first Secretary of the Treasury to
sit on the Board, are in the Library of Congress. Permission to consult them
has been granted to this Committee.
The papers of Senator Carter Glass are in the University of Virginia
in 216 boxes (perhaps 10 x 15 x 3 inches in size). They have been rough-sorted
as to date; letters from outstanding personalities were isolated by an early
biographer. A quick sampling shows that classifying and indexing will be needed before these papers, so important in the early history of the Federal Reserve
System, would be generally useful to students. (See main project proposal.)
Of the first Board of Governors, we have found the following papersi
The papers of Charles Hamlin, first Governor of the Federal Reserve
System, are in the Library of Congress. These consist of 245 volumes of which 28
"bound volumes of manuscript diaries covering UMI twenty-one years during
which Mr. Hamlin vas a member of the Boerd, and alraost as many ere bound volumes
of newspaper clippings covering the veers 1871 to 1938. Both sets of volunes
have been amply indexed and cross-indexed by Mr. Hamlin. The whole collection
constitutes a sine of l&fontfctiofl P r d ooiranent which bai neither been studied nor
evaluated. (Bee main project proposals.)
The papers of H. Parker Willis, neraber of the Organization Coraaittee
•Bd tho Board*s first Secretary, s.rr- in the ho^e of M a vidow on Str-.ten Island.
They were willed to his son, Perker Villis, now in the Federal Reserve Bank of
Boston. How ranch of value remains in them which vas not used by Mr. Willis in
his own books is a question which can only be answered by sorting and classifying.
(See main project proposals.)
The papers of Paul H. Warburg were mostly destroyed after 1930 when he
wrote his own two volumes on the Federal Reserve System. The residue includes a
skeleton diary covering the years 1907 to 1914 inclusive and dealing mostly with
events leading up to his taking of the oath of office as a first Board memberj
there is also P diary dated 1915 &xi& covering "daily happenings bearing on the
work and policy of the Board" from October k to 24-, 1915. Ther« are in all five
volunes of miscellaneous material dating 1912 to 1918, some of it highly interesting. This material is in the hands of Mr. James Varburg at Sorth Greenwich,
Connecticut, and permission for its use must be sought from hixa. The collection
is not so extensive as to need further work for its use.
The papers of James Warburg, covering a later period, are in the same
building. These include a six-volume diary covering the months of 1933-3-4 which
covered the banking holiday and the London Economic Conference to which Mr. Varburg
was a delegate.
The papers of John Skelton Williams are in the hands of his widow, now
Mrs. William Allen Villingham of Richmond, Virginia.
The papers of Dr. Adolph Millar were thought to be embodied in the files
of the Federal Reserve Board, but a small collection has recently been found in the
horse of his widow, and negotiations are now under way to have them available to this
CoaEaittee for sorting and evaluating.
The papers of Benjamin Strong, first Governor of the Federal Reserve
Bank of New Tork and in that post until his death in 1928, are divided among the
Bank, the Firestone Library at Princeton University, and a New York storage warehouse. The Bank's collection occupies six file drawers end consists of addresses,
meiaoa and correspondence with leading personalities in the United States and Europe.
In addition that portion of the filing system which was set up during his lifetime
is permeated with Strong material incorporated in the subject files. Permission
for study of this material laust, of course, be sought from the Bank.
The Princeton material which forms the nucleus of what is there called
the Strong Collection includes 196 volumes of newspaper clippings of World War I
from July 27, 1914 to March 20, 1920, well-mounted and preserved. Var poster©,
war currency, and a folder of correspondence between Strong and Kemaerer are also
there. The material in the Lincoln Warehouse, un^er the control of Mr. Benjamin
Strong, is believed to consist mostly of personal papers and correspondence; it
should be -r.ade available to a qualified biographer.
Sit papers of Gfeornce K»rrison, second Governor of the Federal Reserve
Bank, of New York, are also incorporated la the file**, of the Hew York 3ank. In
addition, th&ie are &«*v«£i file drawers of reports, Memoranda aaa correspondence
which Mr. Harrison took with him when he left the Bank to become President of
th© U&v York Life Insurance Company. These, liit« the Stroug Collection, have
the great merit of presenting material culled from the mass of daily workj they
are therefore easily handled as veil as vary valuable to the student. This Corazaittee has oermission to consult ther.
*
•
The papers of Charles Daves, of the Bawes Plan, are la the De«ring
Library at Northwestern University, They include diaries, journals, scrapbooks
and memoranda, rough-sorted and put in chronological order; thas© include material
x'elating to the currency question from 1900 to 193£, and to the Aldrich-Vreeland
Act of 1908, as well as later material on the German debt question*
In addition to the papers of Woodrow Wilson, the Library of Congress
also has the papers of Calvin Coolidge, Charles £vans Hughes, Hewton P. Baker
who was Wilson's biographer, Senator George Norris, all of whoa dealt in their
various ways with Federal Reserve aiatters. Permission to consult these has been
granted this Coacaittee.
The papers of Dr. Edwin Ktsaaerer are mostly in the Firestone Library
at Princeton University. Some memoranda are believed to be in the hands of Mrs.
Keiaraerer.
The papers of O^den Mills. Secretary of the Treasury and Chair&an of
the Federal Reserve Board in 1933, ara in twenty-five boxes in a garage on Long
Island. A small attempt at sorting was made by Mrs. Mills, who got through some
five boxes and then decided the job called for expert advice} otherwise they are
intact, and just as they came from the Treasury. Word has just coae that after
having consulted with this Committee as to the disposition of the papers Mrs.
Hills has decided to turn the boxes over to the Library of Congress. These
papers must be sorted, classified and indexed before they are useful for students.
The papers of Eugene Meyer are still in Mr. Meyer1 s hands. A biographer,
Sidney Hyman, is at work on thesa.
The papers of Norman H. Davis were given to the Council on Foreign
Relations, which recently sent them to the Library of Congress as a final place
of deposit. They include some five file drawers and a huge box of unsorted
material. The Library of Congress has promised to have it ready for students
in two years.
The papers of Dwight Morrow, who played an important part in the
international negotiations of the 1920*s, are being prepared for deposit in
the library of Ataherst College, where they are expected to be available for
use after June, 195A»
A email collection of the papers of Leon Fraser has been handed to
this Committee, but little of value has been found in the LA.
The papers of Oliver V. A. Sprague. at various times consultant to
the Treasury and to the Board, are in the hands of his son in the Sprague
residence. Sttattl*t*4 bjf i •'piiri'-s from this Committee, Mr. Zprague is
nov sortiag and cl«ssif;yir ~ tb« Rftt+rial bis father left.
The papers of Vslter LjcM-ensteln, for two decades (1926*1948)
secretary of the Federal Advisory Council, federal Reserve System, have
"been given to BftdnuNI University, vhare they are divided between the Baker
tft&d the Videner Libraries.
The ppper.5 of Srasnuel Goldenweisex-. research officer of U M Board
froa 19?2 to 1945 ^nd author of various studies, ara at present ia • storage
warehouse in Princeton, '"few 3*T99f* Ccnversationa with Mrs. Goldenweiser
indicate thnt they \my bs ^ade available for study this auaiior. (2e© oain
project proposr-ls.)
Obviously this lift! of 26 per+i.ient collections which V3 have located is bj nofttoftlexhaustive. It does,
townTt
show what riches can be
uncovered by persistent search. All this, a~id ranch more, raust bs studied by
aoyone now aiming to review the System's work and its place ia the American
economy.
Meanwhile, men still active in the System are known to have been
accumulating papers which, If they can be preserved, vill add greatly to the
desirable material. The student of Federal Reserve banking may with reason
long for the tinje when the speeches, correspondence and isooranda of modern
laaders in Federal Reserve theory and practise are -aside available. It is to
be hoped that this Corassittee may be active in persuading those -nen to leave
their paper* to a responsible depository where future students may consult them,
Persons
Tie other chief object of inquiry in tho pilot project was
"The ?sen who hv.ve acted t\s architects and builders of the present Federal
Reserve System #re cilready beginning to disappear", we said in our first
presentation.
"Those living, whose -seniories form a jiost valuable supple-
ment to any papers which they may have, should be approached and asked to
contribute personal knowledge and access to papers before it is too late."
The process of interviewing has been throughout this pilot study
one of the major occupations of the research director. Starting froia a list
-7*
on which Committee members indicated their own first choices, the interview
process has widened to include some sixty-odd persons, niost of them officers
or staff members of the Board or banks.
In general these interviews served a purpose somewhat different
from that which was contemplated when they were started. In the first place,
they struck sparks of interest and good will which ere very valuable for the
success of this project. Benefits continue to flow from them, and further
opportunities to interview the same individuals at later dates have been
^
promised.
These meetings were of great help in establishing the human atmosphere of whatever period was under discussion. In some instances they also
brought forth valuable memories of key isoiaents, and information which was
unique in itself. But it quickly becnrae clear that in order to evoke the
most vital detail in any disputed area it would be necessary to ask the carefully pointed question. This can be done well only in Ister interviews, with
full confidence established and much more study accomplished than hs-s been
possible in three months 1 time.
/^-v
The interview technique has proved full of surprises. Far from
being less valuable than was anticipated it has been more so, but the values
have been of a different order. The xaost important of the zae>aories, which is
to say those that lie at the deeper layers, are still to be gathered.
But
certain inquiries hare been set in "notion which will yield results after this
report has been written. The continuing interest -which has been secured will
accrue to the benefit of the a&in phase of the proposal.
Card Fileg
As visible evidence of work done during this pilot project and as
preparation for the larger project, we undertook to build "a biographic index
of personalities", a "bibliography of basic materials" and a "map of some papers",
-
Ve now hare in hand the early stages of what will "be master card files,
prepared In such fashion that they could be photostated end made available
to students working on various phases of the main project. These includei
A bibliographic file of unpublished material, put together in a
form suggested by the Manuscript Division of the Library of Congress, where
collections are described roughly on c&rds, and more exactly on larger "registers * of the material in the collection.
A bibliography of printed materials basic to any study of the Federal
Reserve System,
A bibliography of the works of the earlier Board members, Senior
Bank Officers and Directors.
A biographic file of persons active in the System, with data as to
their careers both in and out of the Federal Reserve,
A chronological file keying together persons, legislation, hearings,
policy changes said events affecting the operation of the System.
A list of scholars whose records indicate the type of interest in
the subject which suggests that they might be enlisted in the main project,
r—-v
(All this work has been done under the Research Director, Mildred
Adams, in three offices, one assigned in Washington by the Federal Reserve
Board, one provided by the Federal Reserve Bank of New York where a small
staff was assigned to this work by the Bank from its own personnel, one in
the Brookings Institution. The latter organisation has been kind with expert
advice, as well as with the technical assistance needed for administering the
fund.)
Conclusions
All this work has been pointed toward the larger design which constitutes the reason for the pilot project and the grant making it possible. The
sise and importance of that larger design has loomed larger and more complex
with every day's work.
Ve said in X-saunrr t*mt ray attempt to drnw tha limits o* the
comprehensive design vould hava to be Ptfflttd six months fron ItWfti
At
tfell writing half that Hat ban gone; the design s t i l l chwiges avery time
e new comsr Is r*ouitd«d p.nd n n«w Ml of
many vay» to for^iulst* t>?© ©o?.apmh«n8ive
to think ©bout i t .
This Comltti* har derelop«<i vithin i t s e l f » lively and
«tiTaulf;ting sat »f opi?iiong on the fubjact, a l l different end a l l valuable,
53nd«r th©^<r- clrcumst--3Tice'» the -sain project proposal »g h<*r\*in sub•ittttd i'«pre»ents a consensus of the ld»&s of six men lesrn*d in th« th#ory
of central b^n^ing i*ihi «*xperienoe4 to the practices of the S/
of tbis C^ailtte© se« th« S^st©*, fro:a many diff«i*«at angles,
fbi proposal as
r«pro».int» those &jpeet» of the grind design on vhich the C«asd.tt«t
Proposal
The core of t h i s proposal s t i l l remains the writing of a definit i v e history of the Federal Reserve System.
Tovard that end -we propose
-0four other activities, all of them preparatory to and feeding the central
object of endeavor*
(1) to continue and complete the "\jork of exploration and recording which was started during the pilot project;
(2) to make the Committee^ research material and facilities
available for students, and to provide encouragement and
aid where needed in the form of secretarial assistance
or of small subventions$
(3) to encourage the writing of monographs, articles and books
on various phases of the subject, and to aid contact between writers and publishers where such aid seems desired
and desirable^ and
^
(4.) to edit and publish certain documents which are basic to
any understanding of the Federal Reserve System.
Those preliminary activities are implicit in the work already
started during the pilot project, but & few words of explanation may
serve to set them into focus in the comprehensive design.
A reading of the report on the pilot project shows hov much has
been started, and how little finished. For example, the research director
hoped, to visit all twelve district Reserve Banks during the pilot phase,
but most of those distant from the Atlantic seaboard remain to be explored*
This mapping and survey stage uncovered not only papers and memories. It
also set the pattern for the stu^y of those papers and those memoirs. A
great deal more must be done along these lines before the master files of
papers and other materials are ready for use.
Not only must the master files be completed, but the papers
which have been uncovered during the pilot project, and the collections
still to be found, must be analyzed for pertinent material. The Hamlin
diaries stand alone in terms of the care for preparation and indexing
lavished on them, but even the Hamlin diaries are untouched ground for
the student. Some one must read those 26 volisaes and evaluate them.
-14The work to be done on other collections is still more elementary. For example, Professor Elbert Kincaid of the (Jniversity of
Virginia vould like to classify and stu^y the Carter Glass papers. The
National Records Management group stands reedy to start a pilot study
of a similar group of papers in order to chart costs and work out efficient methods of handling. Young Parker Willis would take time from
his vork at the Federal Reserve Bank in Boston to survey his father*s
papers if this were arranged. The Goldenveiser papers, the Adolph Miller
papers are destined for this Committee's use. These and many more must
be classified and set in order.
Thus (l) leads into (2) which in turn leads to (3). We have
already mentioned the fact that the master files started under the pilot
project were prepared in such fashion that they can be photostated for
use by students when desired. We hsve alreaefcr begun to find work under
way, and work planned, which will move the faster for encouragement and
aid. Carl Parry, formerly on the staff of the Federal Reserve Board,
might well be encouraged to complete his half-done monograph on Selective
Credit Controls (a subject with which he has had active as well as
theoretical experience) and Gardner Patterson of the International Finance
Section at Princeton University would like aid to write a stutjy of international financial operations in the 1920*s.
We have every reason to hope that the work done by this Committee, the contacts established during the pilot phase, and the stimulus
which the existence of this project provides will result in other works
of a peripheral and important nature. We would like to see an analysis
of "Hie techniques of decision-making which have been developed by the
Board} an account of the relations as they have developed between Board
and Banks; a book on the Art and Politics of Central Banking; another on
the part played by personalities and political circumstances.
better be encouraged than commissioned.
These can
They are books whose success de-
pends more on the enthusiasm, initiative and skill of the vrlter than on
interested pressure*
Part U9 the editing and publishing of documents basic to any
adequate study of the System and i t s functioning, i s a proposal for -which
a useful pattern exists in British banking experience.
Gregory's Select
Statutes. Documents and Reports Relating to British Banking. 1832-193& i s
a classic in i t s field, and a book vhich no student of fee subject neglects.
A qualified editor would have to be found for such an undertaking, but the
usefulness of such a book i s so great that i t s publication could probably
be secured through professional publishing channels.
The necessary research
work will be rendered far easier by the master files started under the pilot
project and to be completed under part 1 of this proposal.
As for the history itself, at once core and object of a l l this
endeavor, we believe that i t s writing will take a good three years on the
part of a distinguished scholar who has already shown the kind of knowledge,
•^
skill and judgment which the writing of such a history demands.
HXBttiAxfo
However, at this juncture we believe that the actual choice of
a scholar to whom the history i s to be entrusted should be delayed for at
least six months.
His work should not start until the task of exploration
and recording of materials hes been carried further.
Any decision to
employ this scholar or that should be made only after the field has been
more thoroughly canvassed.
-18Operation
Experience in the pilot project has persuaded us that the best
way to handle the comprehensive design is through a small administrative
staff, over -which this Committee, to continue in being, •will have supervision. We would hope that the association vdth Brookings vhich has
proven so pleasant and helpful could continue, with "whatever modifications
the larger size of the project mr.de advisable* This would mean thst the
grant, if allowed, vould be made to Brookings.
The pilot project has been carried on by the research director,
a research assistant -whose time has been shared with Dr. John Williams,
and two young typists "who have been helping to build card files. Until
those files are completed (a matter of another six months) the same number
of individuals will be needed, vith some change in function. The research
director must have an assistant able to give full time and capable of taking more administrative details then could be delegated under the parttime arrangement prevailing during the pilot project.
Offices were assigned for the pilot project in the Federal Reserve Board in Washington, the Brookings Institution, the Federal Reserve
Bank of New York. Work was mostly centered in the last named because
staff was provided there and the research director is resident in New York,
It vould be most useful if in addition a secretary vith some research experience could, be made available to the research director in Washington.
Budget
The pilot project has been operating on a budget of $10,000 for
four months, which comes to $30,000 per year. If, as we assume, the
Committee can continue to count on having no rent to pay the expenses of
the main project will be divided among salaries, traveling expense, and
saall subventions. We propose the following figures as a baset
Salaries of Research Director
Administrative Assistant
Research Secretary
Typist
Expense and Travel
Encouragement and subventions
|1O,OOO
7,500
6,000
3,500
5,000
10,000
$-42,000
Total per year
U years
$168,000
We estimate that the history itself vill cost $120,000, to be
spent over ihe course of three years.
For item U9 the editing end publishing of basic documents, we
would allow $25,000 on the ground that most of the research for such a
volume would be done in the course of the project.
This comes to $313,000, a total which is proposed for this
project to be spent over the course of four years. We respectfully request that the Rockefeller Foundation grant this sum to the Brookings
Institution on the understanding that it will be expended for the purposes outlined in this proposal and under the direct supervision of
this CoBBdttee.
DRAFT PROPOSAL
Writing in 194-6 about twentieth century monetary controls, Professor
Robert Warren of Princeton University observed that in the nineteenth century
there developed a new type of society, the money economy, which made new demands
on those who administer Government control over the factor of money. "High and
low, rich and poor, bond and free there had always been, but never before had
there been an econony that expected the majority of its people to be totally in1/
dependent upon the continuity of a stream of money income.11
Continuity is, for this proposal, the governing word, and the one that
catches at the student. me panic of 1907 represented Jja thit .continuity of money
Ij
' •""'-." " • i y i t e t f v$ti
$to5b
incomeVthe climax of a series otJbvim^ which had repeatedly upset the United
T
States• ^ vas not the sharpest crisis that the countiy had known, nor the worst.
A
It was the one beyond which Americans refused to go vithout making a determined effort to control what seemed to be the monetary causes and effects of a panic. The
creation of the Federal Reserve System was the remecty- suggested, approved, and written into the law.
Since December 1913> when the first Federal Reserve Act was signed, the
American economy has expanded in sise about nine diameters. The principal generative
factors in that economy, agriculture and industry, have changed places and the resultant effect on American society stand clear on eveiy street corner. The American
citizen is in general aware of these changes. He knows a certain amount about industiy, how it functions, how strong it is, what part it plays in giving the United
States its present place^ in the world. He regards himself as living in an industrial
econony. Heldaetrinjtriatjrto understand the role of money except for the part i t
A
plays in his own personal life.
The highly important element which oils the 'wheels of industry and keeps
it going has remained an enigma, itsJnctfctodo of interest only to a few specialists.
A
1/ Economic Research and the Development of Economic Science and Public Policy,
National Bureau of Economic Research. 1946. p. 90
- 2The continuity of money income, that abstract economic concept which in practice
makes it possible for Americans to work steadily, eat well, and live warm, is a
phenomenon which most people take for granted and veiy few explore* The Federal
Reserve banking system, whose functions are essential to the efficient flow of
that money income, operates outside the usual paths of American thought or American
understanding. For one thing it is complex, for another it staffers from the gray
pall of imagined dullnessA%feai hangs over most economic affairs; further, it has
been shrouded in that secrecy which banking, to a greater degree than any other
American business, has thought proper to its operations• ThanT^stem has been
built and rebuilt during the last four decades, but just what effect the building
y
and rebuilding, have had is nowhere adequately recorded• Bits and pieces cfett have
been studied by specialists, but the whole has yet to be sufficiently explored or
recorded*
f
* . ,
There i s a veiy real peril in this^frwlfruft pubilu i^ifrBi»Baiijfw
A
The
Federal Reserve System, like the Constitution, the powers of the President or any
other factor in the national Government, is in "fee la git anftly^jug* the creature of
the electorate* Recent events have shown all too clearly that even the most cherished
and accepted of Governmental^eJLe&ea&g is not safe from the attack of those who think
th^y can profit from such activity* Institutions withstand attack most successfully
when they are firmly ifcft>edded in the public mind as gumething to be kept at all costs*
The Committee has from the beginning held firmly to the belief that one of
the most important factors in the strength of the System is the fact that, like every
other structure in Government, its ultimate power lies in its acceptance by the
American people. Because the American people, in the last analysis, created it and
can undo it, its continuing vitality depends on as much understanding of its value
as can be achieved by laymen. The institution is complicated, but it must not therefore be allowed to seem so far above the heads of its ultimate masters as to arouse
their distrust and animosity. Where there is no vision, it is not only the people
- 3 who perishj so also do the objects of that lost vision. The national banking system
vill live and flourish only while the people trust in its ways, and there are mimerous examples in modern life to prove that they do not long trust blindly.
It vas in recognition of this situation that a committee vas constituted
late in 1953flto stucly the history of the Federal Reserve System", and a pilot project
to search out materials for such a study was proposed to the Rockefeller Foundation*
The Committee eaa** at that time that "the papers which would be needed as source
material in writing an adequate history are scattered among Government, banking and
private files. It is not even known \*hat exists nor ^here some of what exists could
be found. The men who have acted as architects and builders of the present Federal
Reserve System are beginning to disappear. Carter Glass and Governor Strong, for
example, are dead. Others are reaching retirement. Those living, -whose memoirs fona
a most valuable supplement to any papers which they may have, should be approached
and asked to contribute personal knowledge and access to papers before it is too latett<
The Committee proposed a six months1 exploratory project, for the purpose
of surveying and mapping the field, as a prelude to recommending the much more comprehensive study which is so needed* The Rockefeller Foundation generously granted
$10,000, but fyiwfl^ff^^
• cut the exploratory period almost in half. The
work done under that grant is described in an appended report. It is on the basis
of that work, and as the result of discoveries made possible by the pilot project
grant, that the Committee now appears before you with a request for funds for the
comprehensive study.
In our first request we described as the end project toward >*hich the
pilot phase was directed a definitive "history of the Federal Reserve System, including the editing for publication of certain source materials, the writing of
biographic sketches of some of the most important figures, the composing of books,
monographs and articles on special facets of the structure which emerge as of
potential interest, and perhaps a popular histozy or two designed for wide public
reading" • We knew then, and we now repeat, that such a comprehensive design will
be a considerable undertaking,
;
to be carried on over time by experienced
specialists in the field*
e e^lsgwrtaroB' we have carried onittare modified and clarified
A
A
our atas* ¥e know that three months of exploration has barely scratched the surface
of a field much richer in materials and more complex in structure than we anticipated*
We are more than ever convinced that a stuc|y of the type here to be proposed will
yield far more understanding of the past and comprehension of the future than was
/\
thought possible when we started*
The core of this .grody still remains/ the writing of a definitive history
p
of the Federal Reserve System*
*
Toward that end we propose to. jflnflaartitftft four other
activities, all of them preparatory to and feeding the central object of endeavor:
(1) to continue and complete the work of exploration and recording which
was started during the pilot project;
(2) to make the Committee*s research material and facilities available
for students, and to provide encouragement and aid -where needed in
the form of secretarial assistance or of small subventions;
(3) to encourage the writing of monographs> articles and books on various
phases of the subject, and to aid contact between writers and publishers where such aid seems desired and desirable; and
(4.) to edit and publish certain documents which are basic to acy understanding of the Federal Reserve System*
Those preliminary activities are implicit in the work already started during the pilot project, but a few words of explanation xsmy serve to set them into
focus in the comprehensive design*
A reading of the report on the pilot project shows how much has been
started, and how little finished*% This mapping and survey stage uncovered not only
papers and memories* It also set the pattern for the study of those papers and those
memoirs* A great deal more must be done along these lines before the master files
of papers and other materials are ready for use*
Not only must the master files be completed, but the papers which have
WfaL
J
X d^jtt^
u ^ a i i t ^ult ^\,i S ^ 4 M , 4>*V*i ^**iv^ ImvtW -CvvW ^ $£*-
-5 been uncovered during the pilot project, and the collections still to be found,
must be analyzed for pertinent material* The Hamlin diaries stand alone in the
A
care for preparation and indexing thwiii'lliffilllliiii lavished on them, but even the
Hamlin diaries are untouched ground for the student*
Some one must read those 26
volumes and evaluate than*
The work to be done on other collections is still more elementary* For
example, Professor Elbert Kincaid of the University of Virginia would like to classify and study the Carter Glass papers* The National Records Management group
stands ready to start a pilot study of a similar group of papers in order to chart
costs and work out efficient methods of handling*
Young Parker Willis would take
time from his work at the Federal Reserve Bank in Boston to survey his father's
papers if this were arranged* The Goldenweiser papers, the Adolph Miller papers
are destined for this Committee1s use. flhcj must be classified and set in order*
A leads to (j$) • We have already menThtfs (l) leads into (2) which in turn
tioned the fact that the master files started under the pilot project were prepared
in such fashion that they can be photostated for use by students when desired. We
have already begun to find work underway, and work planned, which will move the
faster for encouragement and aid*
Carl Parry, formerly on the staff of the Federal
Reserve Board, might well be encouraged to complete his half-done monograph on
Selective Credit Controls (a subject with which he has had active as well as theoretical
experience) and tha* Gardner Patterson of the International Finance Section at
Princeton University would like aid to write a study of international financial operations in the 1920 f s.
We have every reason to hope that the work done by this Committee, the contacts established during the pilot phase, and the stimulus which the existence of
this project provides will result in other works of a peripheral and important nature.
We would like to see an analysis of the techniques of decision-snaking which have been
developed by the Board} an account of the relations as they have developed between
- 6Board and Banks; a book on the Art and Politics of Central Banking; another on the
part played by personalities and political circumstances* These can better be encouraged than cocamissioned. They are books whose success depends more on the
enthusiasm, initiative and skill of the writer than on interested pressure*
Part 4> the editing and publishing of docxanents basic to any adequate
study of the System and its functioning, is a proposal for which a useful pattern
exists in British banking experience• Gregory.1 ,B Select Statutes» Documents and
Reports Relating to British Banking. 1832-1938 is a classic in its field, and a book
-which no student of the subject neglects. A qualified editor would have to be found
for such an undertaking, but the usefulness of such a book is so great that its publication could probably be sectored through professional publishing channels• The
necessaiy research work will be rendered far easier by the master files started under
the pilot project and to be completed under part 1 of this proposal^with <wre okwge
an assistant j^jl^ttTgive^full time
and capable of taking more administrative detft&^*uan could be delegated under the
part-time arrangement prevailing <Jj®*fffg the pilot project•
Offices were agp&gSied for the pilot project in the Federal Reserve Board
in Washirjgton, tj^lfrookings Institution, the Federal Reserve Bank of New Yoric» Work
was cente^flfin the last named because staff was g ^
dir«fiii*H£^^
As for the histoiy itself, at once core and object of all this endeavor,
we believe that its writing will take a good three years on the part of a distinguished
scholar who has already shown the kind of knowledge, skill and judgment which the
writing of such a histoiy demands. We find that Dr. Lester Chandler of Princeton
University or Dr« Karl Bopp of the Federal Reserve Bank of Philadelphia who has made
valuable contributions in the field e<a of central banking might possibly be available
for this work*
- 7However, at this juncture we believe that the actual choice of a scholar
to whom the histoiy is to be entrusted should be delayed for at least six months*
His work should not start until the task of exploration and recording of materials
has been carried further. AIQT decision to employ this scholar or that should be
made only after the field has been more thoroughly canvassed.
Operation
Experience in the pilot project has persuaded us that the best way to
handle the comprehensive design is through a small administrative staff, over which
this Committee, to continue in being, will have supervision. We would hope that
the association with Brookings which has proven so pleasant and helpful could con-
/
tinue, with whatever modifications the larger size of the project made advisable.
This would mean that the grant, if allowed, would be made to Brookings.
The pilot project has been carried on by the research director, a research
assistant whose time has been shared with Dr. John Williams, and two young typists
who have been helping to build card files. Until those files are completed (a matter
of another six months) the same number of individuals will be needed, with some change
in function. The research director must have an assistant able to give full time and
capable of taking more administrative details than could be delegated under the parttime arrangement prevailing during the pilot project.
Offices were assigned for the pilot project in the Federal Reserve Board
in Washington, the Brookings Institution, the Federal Reserve Bank of New York. Work
was mostly centered in the last named because staff was provided there and the research
director is resident in New York. It would be most useful if in addition a secretary
with some research experience could be made available to the research director in
Washington.
Budget
The pilot project has been operating on a budget of $10,000 for four months,
which comes to $30,000 per year. If, as we assume, the Committee can continue to
count on having no rent to pay the expenses of the main project will be divided
- 3 salaries, traveling expense, and small subventions. We propose the following
figures as a base:
Salaries of Research Director
Administrative Assistant
)\>.:i.i u«t u,v S e c r e t a r y
Typist
Expense and Travel
Encouragement and subventions
Total per year
110,000
8,000
7,000
5,000
5,000
10.000
7*:
—
1-i
$45,000
A years
$180,000
We estimate that the history itself will cost U£pO,OOO, to be spent over
the course of three years•
For item 4., the editing and publishing of basic documents, we would allow
$25,000 on the ground that most of the research for such a volume would be done in
the course of the project*
This comes to $jOiijOQO, & total which is proposed for this project to be
spent over the course of four years* We respectfully request that the Rockefeller
grant this sum to the Brookings Institution on the understanding that it will be
expended for the purposes outlined in this proposal and under the direct supervision
of this Committee*
RBPORT OH PILOT PROJECT
When the Coasaittee to Study the History of the Federal Reserve
first proposed to the Rockefeller Foundation a pilot project, its objective was
preparatory work leading to a comprehensive study of the System«
"Papers whieh
form the source materiel should be located, classified and roughly analysed1*
said the proposal. Important characters in the drama should be sorted out, their
co-operation asked and their interest enlisted*
The dimensions and proportions
of this comprehensive study should be sketched and its possibilities bulked out*
The exploratory study would at least hope to answer the basic questions, "What?**,
•J'' *vhere?" and "whoa?11.
Toward the end thus described, the Foundation generously grented $10,000
to the Brookings Institution and worked started January 15, to end May 1*
Four
weeks of that period resain, but enough has been done so that we can report on the
result of the mapping and survey of papers end people.
This has been in the best sense of the vord a pilot project*
Trie explora-
tory process, superficial though it had to b©, and incomplete, has yielded a
gratifying harvest* More collections of papers heve been located end surveyed than
we thought possible.
The characters in the drama are more numerous and possessed of better
memories than ve dared to hope* Even from the earliest years a few hardy operating
/
men survive in each bank. ^wHti^rfc-^-persoTT^^
To some of these ©en, work In the Federal Reserve System has been a lifetime occupation* Their memories will, of course, b© checked vith the records, but the sense
of struggle and accomplishment which talks with them convey would be a valuable
factor in any history of any institution. Their interest has been enlisted and
their co-operation is generous. As a method of recording people, papers and ©vents
pertinent to this inquiry we have started four types of card files, one a Vho f s Vho
file of persons! one a time file which co-ordinates persons, pertinent events,
^legislation* one a bibliographic file!) of published and unpublished aaterialj one a
- 2 ~
subject File*
These master files ere arranged so thet they could be photostated
for the benefit of students -working on a leter phase of the project*
They &r$ by
no means completed, but their pettern Is set.
Papers
When we set forth the terms of fee pilot project we said that "the papers
which \#ould be needed as source material in writing an adequate history are scattered among Government, banking and private files*
It i s not even knovn vhet exists,
nor vhere soase of what exists could be found*11 To remedy this situation has been a
first endeavor* We have not yet located everything we set out to find, but we can
now answer the question "Where*1? in some detail.
More remains to b© done, but at
least we have mad® & fruitful start*
Thanks to the co-operation of librarians at the Library of Congress, in
the Board and in the banks, we have made progress in the search for pertinent bibliographies of basic material which i s printed, &n& in the more difficult hunt for
related material which i s not printed* ¥e know, for example, that materiel covering
the Liberty Loans of World War I was sent fros* the Treasury to the National Archives,
and that the records of the Capital Issues Committee ere deposited In the sans place*
We have a listing of the indispensable material -which must underlie any study of the
Board1 s work—the legislation, the hearings, the sdnutes, the policy decisions, the
reports and so on—-and ve have a similar l i s t for the New York Bank*
Of the other District Banks, the research director h&s visited Boston and
Philadelphia, and hopes to get to several of the other nine before thle pilot phase
i s finished*
Meanwhile* v» have been in correspondence with all of them, and are
receiving information as to their own stores of local historical material* Ve have
in preparation a master l i s t of basic material vhieh ve hope to send for their checking* If this device works, i t will furnish the dsta for e bibliography of basic
historical material for the entire System vhich will be of priRsiy use in the studies
in prospect*
- 3 -
As for the papers of individuals concerned with the System's history,
we have located enough collections so that ve are now feeing problems of handling,
indexing and permanent deposit*
This search i s by no means complete, but i t has
already uncovered riches which will be of greet use to scholars i f they can be
Bade available and usable.
The size of the collections xakes It necessary to post-
pone classification to © later date, but we have found an organization which might
handle such papers, and at our suggestion they propose to start a sample study to
determine time and costs of the necessary process* Problems of s piece of deposit,
and of peraission to uee, s t i l l remain but the feet that these have arisen BM must
be l e f t for a second phase i s , in an oblique way, an eernest of the accomplishments
of tills operation*
,.
The following l i s t of papers includes those of Board meabers, high officials
A
of the executive branch, Members of Congress, Governors of Reserve Banks, men in
academic l i f e whose writings have been influential In the development of the Systemt
The papers of Voodrov Wilson, in whose administration the Federal Reserve
System was first organized, are in the Library of Congress, Permission to consult
them has been granted to this Committee*
The papers of William G. McAdoo. first Secretary of the Treasury to s i t
on the Board, are in the Library of Congress. Permission to consult them has been
granted to this Committee*
The papers of Senator Carter Glass are in the University of Virginia in
216 boxes (perhaps 10 x 15 x 3 inches in size). They have been rough-sorted es to
date} letters froa outstanding personalities were isolated lqy en early biographer*
A quick sampling shows that classifying and indexing will be needed before these
papers, so important in the early history of the Federal Reserve System, would be
generally useful to students* (See raein project proposal*)
Of the first Board of Governors, we aeve the following paperst
A
*
The papers of &fi Charles Hamlln. first Governor of the Federal Reserve
System, are in the Library of Congress* These consist of 245 volumes of which 28
are bound volumes of manuscript diaries covering the twenty-one years during which
Mr. Haalin was a aeaber of the Board, and almost as many are bound volumes of newspaper clippings covering the years 1871 to 1938* Both sets of volnaes have been
amply indexed and cross-indexed by Mr. Haadin* The whole collection constitutes a
mine of information and corament which has neither been studied nor evaluated* (See
main project proposals*)
The papers of H* Parker Willis, member of the Organization Committee and
- 4, the Board1® first Secretary, are in the home of his vidov on Steten Island* They
were willed to his son, Parker Willis, now in the Federel Heaerre Bank of Boston*
How much of value remains in the® which van not used by Mr. Willis in hia own books
is a question which cen only be answered by sorting end classifying, (See main
project proposals.)
The papers of Paul M. Varburg were mostly destroyed after 1930 when he
wrote his own two volumes on the Federal Reserve Syutem* The residue includes a
skeleton diary covering the years 1907 to 1914 Inclusive and dealing Eootly vith
events leading up to his taking of the oath of office as & first Board Kember|
there is also a diary dated 1915 and covering "daily happenings bearing on the work
and policy of the Board" from October 4 to 24, 1915- There are in all five volumes
of miscellaneous material dating 1912 to 1913, some of it highly interesting* This
mai erial is in the hands of Mr* James Warburg at North Greenwich, Connecticut, and
permission for its use must be sought from him* The collection is not so extensive
as to need further work for its use*
The papers otdfft James Warburg* covering a leter period, are in the same
building* These include a six-volume diary covering the months of 1933-34- which
covered the banking holiday and the London Economic Conference to which Mr. Warburg
was & delegate*
The papers of John Skelton ¥illiaae are in the hands of his vidov, now
Mrs* William Allen Willingness of Richmond, Virginia.
The papers of Dr* Adolph Miller were thought to be embodied in the files
of the Federal Reserve Board, but © small collection has recently been found in the
home of his widow, and negotiations are now under vay to have ther- available to
this Committee for sorting end evaluating*
Hie papers of Benjamin Strong, first Governor of the Federal Reserve Bank
of Hew York and in that post until his death in 1923, ere divided(^wtwwnfe the Bank,
the Firestone Library at Princeton University, and a Nev York storage"warehouse.
The Bank's collection occupies six file drawers and consists of addresses, memos
and correspondence with leading personalities in the United States and Europe. In
addition that portion of the filing system which was set up during his lifetime is
permeated with Strong material incorporated in the subject files* Permission for
study of this material must, of course, be sought from the Bank*
The Princeton materiel which forms the nucleus of vhat is there called
the Strong Collection includes 196 volumes of newspaper clippings of World War I
fro® July 27, 1914 to March 20, 1920, veH-*mounted and preserved. War posters, war
currency, and a folder of correspondenoe between Strong and Kemmerer are also there*
Th9 material in the Lincoln Warehouse, under the control of Mr. Benjamin Strong, is
believed to consist costly of personal papers end correspondence; It should be made
available to a qualified biographer*
The papers of George Harrison* second Governor of the Federal Reserve Bank
of Hev York, are also incorporated in the files of the Sew York Bank* In addition,
there are seven file drawers of reports, memoranda &.nd correspondence which Mr«
Harrison took with him when he left the Bank to become President of the Sew York Life
Insurance Company* These, like the Strong Collection, heve the gre&t merit of presenting materiel culled fro» the mass of dally workj they ere therefore easily handled
as well as very valuable to the student. This Committee has permission to consult
them*
« 5 «.
V
;.
7
The papers of Charles Daves, of the D&wes Plan, are in the Deerlng Library
at northwestern University, they Include diaries, journals, scrapbooks end memoranda,
rough-sorted snd put in chronological orderj these include material relating to the
currency question fro& 1900 to 1902, and to the Aldrich-Vreeland Act of 19Q§* as well
as later material on the German debt question.
la addition to the papers of Voodrow Vilson, the Library of Congress also
has the papers of Calvin Coolidge. Charles Evans Hughes, (tfgfe Hevton D» Baker who wes
Wilson's biographer, Senator George Norris* all of whom dealt in their various ways
with Federal Reserve matters• Permission to consult these has been granted this
The papers of Dr» Edwin Keamierer are ssostly in the Firestone Library at
Princeton University. So&e memoranda are believed to be in the hands of Mrs. Kemmerer.
The papers of Ogden Mill3, Secrete ry of the Treasury and Chairman of the
Federal Reserve Board in 1933 > are in twenty-five boxes in a garage on Long Island•
A ©Ball attempt at sorting was made by Mrs. Kills, vho got through some five boxes
and then decided the Job celled for expert advice} otherwise they are intact, and
just as they came fros the Treasury* Vord has just coise that after having consulted
with this Cowtittee as to the disposition of the papers Mrs. Hills hes decided to turn
the boxes over to the Library of Congress. These papers must be sorted, classified
and indexed before they are useful for students.
The papers of Eugene Meyer are s t i l l in Mr, Meytr's hands. A biographer,
Sidney Hyoen, is at work on them*
The papers of Nora&n H« Davis were given to the Council on Foreign Relations*
which recently sent them to the Library of Congress es a final piece of deposit. They
include some five f i l e drawers and & huge box of unsorted material• The library of
Congress has promised to have i t reedy for students in two years.
The papers of Dwight Morrov» who played an important part in the international negotiations of the 1920»s, are being prepared for deposit in the library of
Amhjfcrst College, where they are expected to be available for uae after June, 1954-*
A small collection of the papers of Leon Fraser h«s been tended to this Co»B&ttee, but l i t t l e of value hss been found in theas*
The papers of Oliver V. M# Sprague. at various times consultant to the
Treasury and to the Board, are in the hands of his son in the Sprague residence*
Stimulated by inquiries from this CosiEdttee, Mr. Sprsigue i s nov sorting end classifying the material his father l e f t .
The papers of Walter Lichtensteln. for two decades (1926-1943) secretary
of the Federal Advisory Council, Federal Reserve System, have been given to Harvard
University, where they are divided between the Baker and the Videner Libraries*
papers of Emg.nuel Goldenweiser. research officer of the Board from 1922
to 1945 &nd author of various studies, are at present in a storage warehouse in
Princeton,fifewJersey* Conversations with Mrs. Goldenweiser indicate that they may
be made available for study this sufflaer. (See main project proposals*)
^—Obviously this l i s t of 26 pertinent collections which ve have located i s
- 6 -
by no means exhaustive*
It does, however, shov what riches can be uncovered by
persistent search. All this, end much more, must be studied by anyone now aiding
to review the System's work and i t s place in the iasericsn economy.
Meanwhile, men s t i l l active in the System are known to have been accissulating
a
papers which, i f they can be preserved, will add greatly to the-iiwllwiili* xsaterlsl.
A
The student of Federal Heserve banking may vdth reason long for the tiise when the
speeches, correspondence and memoranda of modern leaders in Federal Reserve theory
and practise are made available. It is to be hoped that this CoiBEittee may be active
in persuading these men to leave their papers to s responsible depository vhere future
students isay consult theau
FersQ&g,
The other chief object of inquiry in the pilot project was persons? "The
men who have acted as architects &nd builders of the present Federal Reserve
are already beginning to disappear", we said in our first presentation.
"Those l i v -
ing, whose memories fora a most valuable supplement to any papers which they may have,
should be approached and asked to contribute personal knowledge &nd access to papers
before i t i s too late."
The process of interviewing has been throughout this pilot study one of
the aajor occupations of the research director.
Starting froK a l i s t on which Co»-
ttittee zse»b*rs indicated their own first choices, the interview process has widened
to include sosse sixty-odd persons, Kost of them officers or staff members of the
Board or banks*
In general these interviews served e purpose somewhat different from that
which was contemplated when they were started.
In the first place, they struck sparks
of Interest and good will which are very valuable for the success of this project.
Benefit* continue to flow fro® them, and further opportunities to interview the same
individual® at later dates have been promised.
These meetings were of great help in establishing the hisasn atmosphere of
«. 7 •
whatever period was under discussion*
In some instances they also brought forth
valuable liemories of key moments, &nd informstion which was unique in i t s e l f .
But
i t quickly became clear that in order to evoke the roost vital detail in any disputed
area i t would be necessary to eak the carefully pointed question.
This can be done
veil only in later interviews, vith full confidence established and much more study
accomplished than has been possible in three months* time*
The interview technique h&s proved full of surprises.
Fer froin being less
valuable then was anticipated i t has been more so, but the velues have been of a different order* The most important of the memories, which i s to say those that l i e et
the deeper layers, are s t i l l to be gathered. But certain inquiries have been set in
motion which will yield results after this report h&s been written.
V
The continuing
b phase of the proposal.
interest which has been secured will accrue to *thh main
Card F U e g
As visible evidence of work done during this pilot project end es preparation for the larger project, we undertook to build "a biographic index of personalities*1,
a "bibliography of basic materials" and a "nap of some papers"• We now have in hend
the eerly stages of vhat will be master card files, prepared in such fashion that they
could be photostated and made available to students working on various phases of the
sain project. These include!
A bibliographic file of unpublished waterlal, put together in A for© suggested by the Manuscript Division of the Library of Congress, vhere collections ere
described roughly on cards, and more exactly on larger ^registers" of the material
in the collection,
A bibliography of printed itaterials basic to any study of the Federal Reserve Systea.
A bibliography of the vorks of the earlier Board aeabers, Bank Qitii»ej..iuriS
A
/\
and Directors.
A biographic file of persona active in the System, vith data as to their
careers both In and out of the Federal Reserve*
A chronological file keying together persons, legislation, hearings, policy
changes and events effecting the operation of the System.
A list of scholars vhose records indicate the type of interest in the subject vhieh suggests they they Eight be enlisted in the main project*
(All this work has been done under the Research Director, Mildred Adaiss,
in tkree offices, one assigned in Washington by the Federal Reserve Board, one provided by the Federal Reserve Bank of Sew York vhere a email staff was assigned to
this work by the Bank from its ovn personnel, one in the Brooking® Institution. The
latter organisation has been kind with expert advice", ss veil as with the technical
assistance needed for administering the fund*)
Conclusions
All this vork has been pointed tovard the larger design which constitutes
the reason for the pilot project and the grant making it possible. The size and importance of that larger design has loomed larger and more complex with everypeyfs
vork.
Ve said in January that any attempt to drav the limits of the comprehensive
design vould have to be revised six months from then. At this writing half that
time has gone; the design still changes every time a nev corner is rounded and » new
set of ideas uncovered. There are as sany vays to formulate the comprehensive design
es there are people equipped to think about it. This Committee has developed within
itself a lively and stimulating set of opinions on the subject, all different and all
valuable.
Under these circumstances the raain project proposal as herein submitted
represents a consensus of the ideas of six men learned in the theory of central banking and experienced in the practices of the System. The members of this Committee
see the System from many different angles. The proposal fes submitted represents
those aspects of the grand design on vhich the Committee is agreed.
REPORT ON PILOT PROJECT
When the Committee to Study the History of the Federal Reserve System
first proposed to the Rockefeller Foundation a pilot project, its objective was
preparatory work leading to a comprehensive study of the System. "Papers which
form the source material should be located, classified and rotjghly analyzed"
said the proposal* Important characters in the drama should be sorted out, their
co-operation asked and their interest enlisted. The dimensions and proportions
of this comprehensive study should be sketched and its possibilities bulked out*
The exploratory study would at least hope to answer the basic questions, "what?11,
"where?11 and "whom?"*
Toward the end thus described, the Foundation generously granted |10,000
to the Brookings Institution and worked started January 15, to end May 1. Four
weeks of that period remain, but enough has been done so that we can report on the
result of the mapping and survey of papers and people*
This has been in the best sense of the word a pilot project* The exploratory process, superficial though it had to be, and incomplete, has yielded a
gratifying harvest* More collections of papers have been located and surveyed than
we thoiaght possible*
The characters in the drama are more numerous and possessed of better
memories than we dared to hope. Even from the earliest years a few hardy operating
men survive in each bank. (The list of persons interviewed is in the appendix.)
To some of these men, work in the Federal Reserve System has been a lifetime occupation* Their memories will, of course, be checked with the records, but the sense
of strt^ggle and accomplishment which talks with them convey would be a valuable
factor in any history of ai3y institution*
Their interest has been enlisted and
their co-operation is generous* As a method of recording people, papers and events
pertinent to this inquiry we have started four types of card files, one a Who f s Who
file of persons; one a time file which co-ordinates persons, pertinent events,
legislation; one a bibliographic fiel of published and unpublished material; one a
- 2 subject file. These master files are arranged so that they could be photostated
for the benefit of students working on a later phase of the project*
They are by
no means completed, but their pattern is set.
Papers
When we set forth the terms of the pilot project we said that nthe papers
which would be needed as source material in writing an adequate histoiy are scattered among Government, banking and private files • It is not even known what exists,
nor where some of what exists could be found." To remedy this situation has been a
first endeavor. We have not yet located everything we set out to find, but we can
now answer the question "Where"? in some detail. More remains to be done, but at
least we have made a fruitful start.
Thanks to the co-operation of librarians at the Library of Congress, in
the Board and in the banks, we have made progress in the search for pertinent bibliographies of basic material which is printed, and in the more difficult hunt for
related material ^hich is not printed• We know, for example, that material covering
the Liberty Loans of World War I was sent frcan the Treasury to the National Archives,
and that the records of the Capital Issues Committee are deposited in the same place.
We have a listing of the indispensable material which must underlie aay study of the
Board1s work—the legislation, the hearings, the minutes, the policy decisions, the
reports and so on—and we have a similar list for the New York Bank.
Of the other District Banks, the research director has visited Boston and
Philadelphia, and hopes to get to several of the other nine before this pilot phase
is finished. Meanwhile, we have been in correspondence with all of them, and are
receiving information as to their own stores of local historical material. We have
in preparation a master list of basic material which we hope to send for their checking. If this device works, it will furnish the data for a bibliography of basic
historical material for the entire System which will be of primary use in the studies
in prospect«
- 3 As for the papers of individuals concerned with the System's history,
ve have located enough collections so that we are now facing problems of handling,
indexing and permanent deposit* This search is by no means complete, but it has
already uncovered riches which will be of great use to scholars if they can be
made available and usable* The size of the collections makes it necessary to postpone classification to a later date, but we have found an organization which might
handle such papers, and at our suggestion they propose to start a sample study to
determine time and costs of the necessary process* Problems of a place of deposit,
and of permission to use, still remain but the fact that these have arisen and must
be left for a second phase is, in an oblique way, an earnest of the accomplishments
of this operation*
The following list of papers includes those of Board members, high officials
of the executive branch, Members of Congress, Governors of Reserve Banks, men in
academic life whose writings have been influential in the development of the System:
The papers of Woodrow Wilson, in whose administration the Federal Reserve
System was first organized, are in the Library of Congress. Permission to consult
them has been granted to this Committee*
The papers of William G* McAdoo, first Secretary of the Treasury to sit
on the Board, are in the Library of Congress. Permission to consult them has been
granted to this Committee*
The papers of Senator Carter Glass are in the University of Virginia in
216 boxes (perhaps 10 x 15 x 3 inches in size) * They have been rough-sorted as to
date; letters from outstanding personalities were isolated by an early biographer.
A quick sampling shows that classifying and indexing will be needed before these
papers, so important in the early history of the Federal Reserve Sjystem, would be
generally useful to students* (See main project proposal*)
Of the first Board of Governors, we have the following papers:
The papers of Mr. Charles Hamlin, first Governor of the Federal Reserve
Sjrstem, are in the Library of Congress* These consist of 245 volumes of which 28
are bound volumes of manuscript diaries covering the twenty-one years during which
Mr* Hamlin was a member of the Board, and almost as many are bound volumes of newspaper clippings covering the years 1871 to 1938* Both sets of volumes have been
amply indexed and cross-indexed by Mr* Hamlin* The whole collection constitutes a
mine of information and ccaament which has neither been studied nor evaluated* (See
main project proposals*)
The papers of H. Parker Willis, member of the Organization Committee and
the Board1 s first Secretary, are in the home of his widow on Staten Islandt They
were willed to his son, Parker Willis, now in the Federal Reserve Bank of Boston*
How much of value remains in them which was not used by Mr* Willis in his own books
is a question which can only be answered by sorting and classifying. (See main
project proposals*)
The papers of Paul M* Warburg were mostly destroyed after 1930 when he
wrote his own two volumes on the Federal Reserve System. The residue includes a
skeleton diary covering the years 1907 to 1914 inclusive and dealing mostly with
events leading up to his taking of the oath of office as a first Board memberj
there is also a diary dated 1915 and covering "daily happenings bearing on the work
and policy of the Board11 from October 4 to 24, 1915* There are in all five volumes
of miscellaneous material dating 1912 to 1918, some of it highly interesting* This
material is in the hands of Mr. James Warburg at North Greenwich, Connecticut, and
permission for its use must be sought from him* The collection is not so extensive
as to need further work for its use*
The papers of Mr* James Warburg« covering a later period, are in the same
building* These include a six-volume diaiy covering the months of 1933-34 which
covered the banking holiday and the London Economic Conference to which Mr. Warburg
was a delegate*
The papers of John Skelton Williams are in the hands of his widow, now
Mrs* William Allen Willingham of Richmond, Virginia.
The papers of Dr* Adolph Miller were thought to be embodied in the files
of the Federal Reserve Board, but a small collection has recently been found in the
home of his widow, and negotiations are now under wqy to have them available to
this Committee for sorting and evaluating*
The papers of Benjamin Strong% first Governor of the Federal Reserve Bank
of New York and in that post until his death in 1923, are divided between the Bank,
the Firestone Library at Princeton University, and a Hew Xork storage warehouse*
The Bank's collection occupies six file drawers and consists of addresses, memos
and correspondence with leading personalities in the United States and Europe* In
addition that portion of the filing system which was set up during his lifetime is
permeated with Strong material incorporated in the subject files* Permission for
study of this material must, of course, be sought from the Bank*
The Princeton material which forms the nucleus of what is there called
the Strong Collection includes 196 volumes of newspaper clippings of World War I
from July 27, 1914 to March 20, 1920, well-mounted and preserved* War posters, war
currency, and a folder of correspondence between Strong and Kemmerer are also there*
The material in the Lincoln Warehouse, under the control of Mr. Benjamin Strong, is
believed to consist mostly of personal papers and correspondence; it should be made
available to a qualified biographer*
The papers of George Harrison* second Governor of the Federal Reserve Bank
of New York, are also incorporated in the files of the New Tork Bank* In addition,
there are seven file drawers of reports, memoranda and correspondence which Mr*
Harrison took with him when he left the Bank to become President of the New Tork Life
Insurance Company. These, like the Stroijg Collection, have the great merit of presenting material culled from the mass of daily workj they are therefore easily handled
as well as very valuable to the student. This Committee has permission to consult
them*
- 5 The papers of Charles Daves# of the Dawes Plan, are in the Deering Libraiy
at Northwestern University* Th^y include diaries, journals, scrapbooks and memoranda,
rough-sorted and put in chronological order; these include material relating to the
currency question from 1900 to 1902, and to the Aldrich-Vreeland Act of 1908, as well
as later material on the German debt question*
In addition to the papers of Voodrow Wilson, the Libraiy of Congress also
has the papers of Calvin Coolidffe, Charles Evans Hughes* and Newton D. Baker who was
Wilson1 s biographer, Senator George Norrls, all of whom dealt in their various ways
with Federal Reserve matters* Peimission to consult these has been granted this
Committee •
The papers of Dr. Edwin Kemmerer are mostly in the Firestone Library at
Princeton University. Some memoranda are believed to be in the hands of Mrs. Kemmerer.
The papers of Ogden Mills % Secretaxy of the Treasury and Chairman of the
Federal Reserve Board in 1933• are in twenty-five boxes in a garage on Long Island.
A small attempt at sortiijg was made by Mrs. Mills, who got through some five boxes
and then decided the job called for expert advice; otherwise they are intact, and
just as th^jr came from the Treasury. Word has just come that after having consulted
with this Committee as to the disposition of the papers Mrs. Mills has decided to turn
the boxes over to the Library of Congress. These papers must be sorted, classified
and indexed before they are useful for students.
The papers of Eugene Meyer are still in Mr. Meyer1s hands. A biographer,
Sidney Hyman, is at work on them.
The papers of Norman H. Davis were given to the Council on Foreign Relations,
which recently sent them to the Libraiy of Congress as a final place of deposit. They
include some five file drawers and a huge box of unsorted material* The Libraiy of
Congress has promised to have it ready for students in two years*
The papers of Dwight Morrow» who played an important part in the international negotiations of the 1920 f s, are being prepared for deposit in the library of
Amhurst College, where they are expected to be available for use after June,
A small collection of the papers of Leon Fraser has been banded to this Committee, but little of value has been found in them*
The papers of Oliver W. M» Sprague^ at various times consultant to the
Treasuiy and to the Board, are in the hands of his son in the Sprague residence*
Stimulated by inquiries from this Committee, Mr. Sprague is now sorting and classifying the material his father left.
The papers of Walter Lichtenstein. for two decades (1926-19-48) secretary
of the Federal Advisory Council, Federal Reserve System, have been given to Harvard
University, where they are divided between the Baker and the Widener Libraries.
The papers of Emanuel Goldenweiser, research officer of the Board from 1922
to 1945 and author of various studies, are at present in a storage warehouse in
Princeton, New Jersey. Conversations with Mrs. Goldenweiser indicate that thsy may
be made available for study this simmer. (See main project proposals.)
Banking Holiday Group
Obviously this list of 26 pertinent collections which we have located is
- 6 by no means exhaustive. It does, however, show 'what riches can be uncovered by
persistent search. All this, and much more, must be studied by anyone now aiming
to review the System's work and its place in the American economy•
Meanwhile, men still active in the Sfcrstem are known to have been accumulating
papers which, if th^y can be preserved, will add greatly to the available material.
The student of Federal Reserve banking may with reason long for the time when the
speeches, correspondence and memoranda of modern leaders in Federal Reserve theoiy
and practise are made available. It is to be hoped that this Consmittee may be active
in persuading these men to leave their papers to a responsible depository where future
students may consult them.
Persons
The other chief object of inquiry in the pilot project was persons; "The
men who have acted as architects and builders of the present Federal Reserve System
are already beginning to disappear", we said in our first presentation. ttThose living, whose memories form a most valuable supplement to any papers which they may have,
should be approached and asked to contribute personal knowledge and access to papers
before it is too late.*
The process of interviewing has been throughout this pilot study one of
the major occupations of the research director. Starting from a list on which Committee members indicated their own first choices, the interview process has widened
to include some sixty-odd persons, most of them officers or staff members of the
Board or banks.
In general these interviews served a purpose someidiat different from that
which was contemplated when they were started. In the first place, they struck sparks
of interest and good will which are veiy valuable for the success of this project.
Benefits continue to flow from them, and further opportunities to interview the same
individuals at later dates have been promised•
These meetings were of great help in establishing the human atmosphere of
- 7 whatever period was under discussion* In some instances they also bro-qght forth
valuable memories of key moments, and information which was unique in itself. But
it quickly became clear that in order to evoke the most vital detail in axy disputed
area it would be necessary to ask the carefully pointed question. This can be done
well only in later interviews, with full confidence established and much more stucty
accomplished than has been possible in three months1 time.
The interview technique has proved full of surprises* Far from being less
valuable than was anticipated it has been more so, but the values have been of a different order. The most important of the memories, which is to say those that lie at
the deeper layers, are still to be gathered. But certain inquiries have been set in
motion which will yield results after this report has been written. The continuing
interest which has been secured will accrue to the main phase of the*proposal.
Card Files
As visible evidence of work done during this pilot project and as preparation for the larger project, we undertook to build "a biographic index of personalities11,
a "bibliography of basic materials11 and a "map of some papers". We now have in hand
the early stages of what will be master card files, prepared in such fashion that they
could be photostated and made available to students yorking on various phases of the
main project. These include:
A bibliographic file of unpublished material, put together in a form suggested by the Manuscript Division of the Libraiy of Congress, where collections are
described roughly on cards, and more exactly on larger "registers" of the material
in the collection.
A bibliography of printed materials basic to any study of the Federal Heserve System.
A bibliography of the works of the earlier Board members, Bank Governors
and Directors.
A biographic file of persons active in the System, with data as to their
- 8 careers both in and out of the Federal Reserve*
A chronological file keying together persons, legislation, hearings, policy
changes and events affecting the operation of the System.
A list of scholars -whose records indicate the type of interest in the subject which suggests they they might be enlisted in the main project.
(All this work has been done under the Research Director, Mildred Adams,
in three offices, one assigned in Washington by the Federal Reserve Board, one provided by the Federal Reserve Bank of Hew York where a small staff was assigned to
this work by the Bank from its own personnel, one in the Brookings Institution* The
latter organization has been kind with expert advice, as well as with the technical
assistance needed for administering the fund.)
Conclusions
All this work has been pointed toward the larger design which constitutes
the reason for the pilot project and the grant making it possible. The size and importance of that larger design has loomed larger and more complex with eveiyday*s
work*
We said in January that any attempt to draw the limits of the comprehensive
design would have to be revised six months from then. At this writing half that
time has gone; the design still changes every time a new corner is rounded and a new
set of ideas uncovered. There are as many ways to formulate the comprehensive design
as there are people equipped to think about it. This Committee has developed within
itself a lively and stimulating set of opinions on the subject, all different and all
valuable.
Under these circumstances the main project proposal as herein submitted
represents a consensus of the ideas of six men learned in the theory of central banking and experienced in the practices of the System. The members of this Committee
see the System from maqy different angles. The proposal as submitted represents
those aspects of the grand design on which the Committee is agreed.
2nd skeleton
April 1, 1954
Proposal
That funds be asked to carry on the main project in two phases:
I* Continuation of the preparatoiy work done under the pilot project, with certain
functions added to further and strengthen that preparation* This would include:
1* The hunt for papers, the interview process, the file building, to
cover all twelve districts of the System*
2. The sorting, listing and evaluating for Committee purposes of collections found in the course of the pilot project, or in (l) above•
This could be done either fcy the assignment of interested scholars
to particular collections, or with the help of such a group as the
National Records Management Council (used by the Harvard Business
Studies Group) vhich is eager to set up this type of research service.
(a) The Carter Glass papers are at the University of Virginia•
Professor ELbert Kincaid, formerly a consultant to the
Federal Reserve Bank of Richmond, is eager to sort, classify
and study them. He would need a subvention from this Committee, or sotae other interested group*
(b) The papers of Charles Hamlin, first Governor of the Federal
Reserve Board, have recently been opened to students* They
were cross-indexed by Mr* Hamlin, but an adequate stucfy- remains to be made of their contents*
(c) Papers left ty H. Parker Willis are still in the house of
his widow on Staten Island* They should be sorted, set in
order and evaluated, either by young Parker Willis to whom
they were left or by an independent agency*
(d) The papers of Emanuel Goldenweiser are in a Princeton storage
warehouse* A small subsidy would make it possible to sort
and evaluate this potentially interesting collection*
Other indications of similar work which should be done
will be found in the list of collections discovered, on page
of the report on the pilot project*
3* Survey and systematizing the records of historical material in the
Board and the Banks, so that their availability may be known and their
future comparability assured*
4.* Completion of a master file on papers, collections and documents in
libraries or other institutions which are pertinent to this study*
II* Writing, editing and publishing
1* Documents
(a) The compiling and editing of documents basic to an understanding of the System and its functioning—not only legislation
— 2 —
but also speeches, memoranda, policy decisions (The British
established a useful pattern in Gregory1s Select Statutest
Documents and Reports Relating to British Banking, 1832-1938*)»
(b) The compiling and editing of selected papers of various
thinkers on Reserve policy, this to be done so as to illustrate
the changing ideas about Board policy, purpose and function*
(Mr. Burgess set a pattern for this in his Interpretations of
Federal Reserve Policy in the Speeches and Writings of
Benjamin Strong. The widening of the picture to take in the
thought of mary men would be a valuable addition.)
2. Monographs - of value for themselves and as preliminary studies leading
to books*
(a) The encouragement -with funds or by other means, of work
started, planned or dreamed:
(1) Carl Parry should be encouraged to complete his halfdone monograph on Selective Credit Controls, a subject with which he has had active experience.
(2) Lester Chandler of Princeton University would like
to do a monograph, or perhaps a book, on M Ben
Strong, Central Banker". (He would need a grant to
free him from teaching for six months.)
(3) Gardner Patterson of Princeton would like to do a
monograph in the field of international operations
of the 1920«s«
(b) The planning and encouragement of monographs on such subjects as
(1) The function of Central Banking in the American
(2) Relationships between the Board and the Banks•
(3) Relationship of the Federal Reserve SJystem to other
Government agencies with financial functions.
(4.) General Credit Controls.
(5) The Federal Reserve System as an Instrument of Government, with particular emphasis on its techniques
of decision-making.
3» Books dealing with the following subjects:
Dr. Karl Bopp should
do one of these, and
would like to if he
can get time*
(1) Definitive history of the Federal Reserve Systemy with particular
emphasis on the evolution of its own conception of its functions,
its policy objectives and its methods? including its crises, its
relations to other Government agencies.
Dr. Lester Chandler (2) The Art and Politics of Central Banking in the U. S.
is very much interested
in (1).
- 3 (3) Crises in the banking world—--a series of essays
covering both domestic and international crises—
how they arose, how their occurrence and treatment
brought about System modifications in an attempt
to guard against their repetition. (Oliver Spraguefs
History of Crises Under the National Banking System,
written for the National Monetary Commission, is a
forerunner which needs a modern sequel)«
(4-) The Role of Personalities in the System—Biographic
essays on personalities and their influence in shaping policy* This type of group biography should
make the Federal Heserve System a very human institution. If well done, it could set a new type of
institutional histoiy*
Final draft
SKELETON LIST OF WORKS TO BE PROPOSED
March 23, 1954
GOMKITtEE TO STOUT TB£ HISTOFT OF THE FBDEFAL B£SE*¥E SYSTI24
Llat of Works to ba Froposed
Harch 23, 1954
Toi
Messrs,
Alltm Sproul,
¥• Baadolph Burgesa
Robert £. Celkins
V l U l a » McC, Martin
Walter V* Stewart
Donald B. Woodward, Secretary
The p i l o t project for which Koekefeil©r fuacia w«re granted a&d work
begun ©s J&wmrf 15th hma now com© to the point of preparation for the second
phaaiu Progress report* have indicated t h a t th« assumptions oa vhicb worK
at&rt&il have proves f r u i t f u l . More aunrivorf of ^arly federal Heserve e
have been located tfe&n v® d&rsd hope - they to&*£ without exception been generous
with t h e i r time sad w i l l i n g t o prossi#e further and .sore detailed comr*rations
about matters of suoli i n t e r e s t . More papers heve been uucovered than we dared
a n t i c i p a t e - t h e i r finding po«#s »©w probleaa of haadllag, editing and deposit*
Ue are developisg data f i l e s to serve as research t o o l s which, wt hope, w i l l
have value for q\3is.llfied person® vorklng in t h i s field*
the field i t e e l f hut a continued to broaden and deepen &$
the vork ha« gone ahead, $ov t h a t the tlase h&» oom# to block out the second
tmd a » | o r phase, we are © t i l l conscious of itr^as l e f t uni&snplored, but a t l e a a t
the laala proportioBS do begin to loom*
Th® proposal for the a*in project toward which t h i s p i l o t project
haa b«e» leadiag ^ust b% in th© hsmda of Dr. W i l l i t s of the ftockt*feller Fou»d^tion by April 18th. T&is su»«na t h a t a d r a f t v i l l seed to b® considered by
the Costalttee e^rly i s April.
As a preparatory s t e p , a^d to obtain Committee guidance, ve are aov
t o you a akeleton l i s t of proposed vork which, i f approved, w i l l be
amplified In the f u l l proposal. The coaprehennive design has, fro?s the begianing, impltmd a research and v r i t i n g project of considerable ditaeassione. We
suggest to the Committee t h a t i t should include the preparation and publication of a body of worfca «uoh &$ the followingt
1,
Booke by sad for scholar® and technicians
I.
Documents m& papera
I«
The c l a s s i f i c a t i o n &nd indexing of papers p e r t i n e n t
t o im u»d«rstandi!ag of the Federal Reserve System
including highly Important collections di$cov«jn§d
in the course of the pilot projects
XI,
2,
The continuing
System*s ®&rlf
participants•
beginning In &
capture of personal knowledge of the
days, &$ remembensti \& distinguished
The pilot project h&& only «a*de a
v«ry rich field*
3»
The compiling &nd editing of documents basic to en
understanding of the System &n& It® functioning - not
only legislation but also speeches, aeaorftnds., policy
decisions. (The British ©»tablish@d I u$@ful pattern
in Gre^qiy'g Sf^ect Stfttutta^ Doeu-»#BtB and Report»
to British Banking. I B 3 2 « . J )
4#
The co^pili«g &tsd editiag of ^^leetec! papers of ooe
or tvo outstanding leedera In Federal ^aeerre thought,
(Mr# Surges tet a pattern for this in hiss
tlone.of fedgrifcl Reg^r^ft P o l l o j ,ln the Speeches
of Begjjfcala Strong« The publishing of the
pp
of l a t e r me» would mispllfy the picture and
bri&g i t closer to aoUern struggles.)
History and analysis
1.
A definitive «uadi objective history of the Federal
Reserve System from its
2«
An analysis of the int$r*-r«l&ti£mship betv#<itt the
System saad the ©eonotsy in vhlob i t function**
3*
A history of the development and relationship
between the Board aau the regional banks# and
of Uid relstlonship of tbe regional bfe£ik» to
each other,
4*
An analysis of th« Federal Reserve ?yste» fts AD
important in*truss«5nt of th© government, vlth
particular *«mph«ais on i t s t^chniques of d
mmklng.
5»
In ^ccov®t of the international operstlons of the
Federal R«e*rve Systeii and Its barJta vith the foreign
benke of Issue.
6.
the eneourftgeaent «tad perh&ps the publioption of
expert technical raonogrsphs such «^ Curl Parry 1 *
h&lf-flnished book on Selective Credit Control*.
JBookg for the Intelligent !&y reader (non-technical)
1»
A voluae of esss.ys on crises in the banking vorld,
<!o»eetle m& internntion&l, hov they aros©, hov they
w#-re hsadled by the Federal B«s«rv#, hov their occiarrsace
•»
ym
brought ©bout System modification* In
an attempt to guard ^gsiast their repetition*
2« 1 volume of biographic
&&& functioning of the
America life, through
rounding eireunstanoes
It what it is,
essays shoving the gro\rth
System **n<t Its place lu
the live*, tiBS and sur~
of the sen who helped
3* A couple of good full-length biographies of leaders
aiaong the bunkert who have helped to shape the System.
4* A simplified eeoount of the System1i development and
functioning in this democracy, designed for supplesa«nt»ry reading for hl$h school students of civic*
or first year college students of eecraoalcs aad
political sclenoe* (This to be cheeked with school
)
C, Mev lork Federal R«terve Project®
(These h«y* been it subject of study in the pilot project.
They form ft special group vithiu the main project; whether
or not their financing is separately arranged they vill
benefit by a continuing position within the whole, and
)
1, the compiling amd editing of documents bssie to an
uaderstending of th© development of the Federal
Bank of H«rw York and its place is th*
A history of the Federal Beserv© Bask of Kew York
which will b« useful in the training of young executives aatf is ®o pl4srsed that it c«tn froa time
to time be brought up to date.
3« I pattern for the oreatlon of $&nk Archives in
the Federal Itserve Bank of $©v tork, (This
appears to h&ve been started in 1927, reaetlveted
uuder the influence of Mr* Varren in 1944* but not
yet real1ted*)
The preparation of such & corisiderabl® body of work, grouped around
a subject of such high import &e th® Federal Reserve System, obviously calls
for scholars of the first ability mnd for »n adequate op«rntif3g organisation*
Ve are gathering the ns-se® of scholars, »Q<J ve will have operating sugg»stiott
r®a.dy for a later draft,
Memxtisse my we ask the Cosatltte©* s conglderattoa of this skeleton
list* Any suggestions, whether es to content or form, will help in the
formation of the draft proposed itself. We will b© grsteful for your reactions by Monday, ihe 29th* if possible*
Mildr#d Adams
Research Director
COMMITTEE TO STQt? THE gXfTOMf Of THE FS8&US. Rl
Skeleton List o r Vorfcs to be-
To 1
Messrs*
Alltm Sproul,
V. Randolph Burgers
Robert to* Calkins?
Villifrm McC. Kartic
Walter ¥• Btevrrt
Donald B« Voocward, 3*cret?«ry
The pilot project for which Bockefeller funds were granted and work
begun on Jenuary 15th h&s now- come t o the point, of preparation for the second
phase. Progress reports have indicated tfeftt the assumptions on which work was
started have proven f r u i t f u l . More survivors of early Federal I^MBWNi ©xperi01-.ee
have been locstec t t e n w«? dared hope - tbay IHMM without exemption b©«m g«n>#rotin
with t h e i r t i n e sad willing to promise .further Aftd MSM <>ti|li<1 conrersf*ttonss
about scatters of guoh intereist. More papera hnve been \meov%r®4. th^n w@ darnHS
attticipete - t h e i r finding poses nev problems of handling, editing and deposit,
Ve are developing date f i l e s to serve *s research tool? vhich, v© hope, v l l l
have VRIU© for qualified persons vorkln^ in Idttt f i e l d .
Mea»vhiley tfc# field I t s e l f IMM ttKUWMtf to broaden «nd deepen ft»
the ifork has gone ebesd, Nov t h s t th« time has cone to block out MM «@e«nd
and major ph^se, v« are s t i l l MNiat&ftttf of ?.:r«?js l e f t \inexplor«rdy but nt l e a e t
t&e sain proportions do begin to loom.
TVve proposal for the m$M project tov^rd vhloh t h i s p i l o t project
has been leading nust fa& in the bMMli of Dr. V i l l i t s of tb^ Fookefeller
d«tt*on by April 13th». ^t dr*ft v i l l ba re^dj f;^r cowmittee re
h" e«rly
April. is^@ mu ifanfr if n i i iwfi •til 1*1 im mm
migwixjr*&m**
vhsn tho p i l ^ t project was f i r s t fortad, bat the..v^.r.iauji...«^««^I u vork to
be proposed c^« nov be cieacrib^d vitli eosaevhat raore precision and d e t a i l then
then va«-yo99im?e»
As B. fnnpitfcltfjf step, MMI to Sce^p the Comr5itt#e ^breerl of st^ff
suggestions # we are now aubmiittr.g to you s skeleton l i s t of pwipeted veilwe •
which, if approved, will b^ amplified la the full proposal. Th«» eom-prehen&iv
design has, from the beginning^ impll--jsenrch MMi writing project of
considerable dimaBsions, Ve suggest to th® Gosnlttee tht-t i t ^should include
the preparation &n& publication of I body of works such as DM followingI
k*
Books by ^nd for scholars and technicians
I*
^^MMHtt
History and analysis
The proposal for the main project i ^ a r d which this pilot project j
has been leading must be in the hands of Dr. , / i l l i t s of the Rockefeller foundation by April 18th. This means that a draft will bead to be considered by
the Q^mmittee early in April,
As etoreparatory step, and to obtain Committee guidance, we are
now submitting to you a skeleton l i s t of proposed work wMch, if approved,
will be amplified in the full proposal. The comprehensive design has, from the
beginning, implied a research and writing project of considerable dimensions.
We suggest to the Committee that i t should include the preparation and publication of a body of works such as the following:
A.
Books by and for scholars and technicians
I . Documents and papers
1. The classification and indexing of papers pertinent
to an understanding of the Federal Reserve System
including highly important collections discovered
cour3e
* ^
°f the pilot project.
2. The continuing
System's early
participants.
beginning in a
capture of personal knowledge of the
days, as remembered by distinguished
The pilot project has only made a
very rich field.
The compiling %nd editing of documents basic to an
understanding of the Syatesi aad i t s functioning - not
onlj legislation but «l»o speeches, memoranda» policy
decisions. (The British rfstftfelisfced i useful pattern
in Gregory1 s gelc-ct Statutes f Documents and Feports
Felltln} to British B--mklng. 1832-193371
Tb« compiling m& editing of selected p&p*r» of one
or tvo outstanding Iftsd^rs IB F«»d®r©l Re»«rre thought.
(Mr, Burgess set a pattern for t h i s in Ms Interpretsttons of Federal Refterve Policy it; the Sp@ecb.os Rnd
Writings of Banjaadn Strong, The publishing of the
paper8 Qf laWr aen would amplify the picture and
bring i t closer to ?io'iern struggles*)
II.
II.
History and analysis
1. A definitive and objective history of the Federal
Reserve System firom i t s inception*
2. An analysis of the inter-relationship between the
System and the economy in which i t functions,
5. A history of the development and relationship between
the Board and the regional banks, and of rsi the
relationship of the regional banks to each other*
4 , An analysis of the Federal Reserve System as an
important instrument of the government, with
particular emphasis on i t s techniques of decisioninaki ng •
% An account of the international operations of the
Federal Reserve System and i t s banks with the foreign
banks of issue,
6, The encouragement and perhaps the publication of
expert technical monographs such as Oarl Parry's
half-finished book on Selctive Credit Controls,
B. Books for the intelligent lay reader (non-technical)
1, A volume of essays on crises in the banking
world, domestic and international, how they
arose, how they
were handled by tba Federal Beserve, how their
occurrence and tr&tttaftnt brought ebout
no" '
'
I
their
2*
A voluuw of biographic
>and functioning of tfcs
Jnerlo*n life* through
rounding elreQn*tnnc»^
i t what I t In.
essays shoving the growth
Syateea tad i t s §&**• tn
the iiv@s, aims and surof the Ml v.ho helped ?&&k«
3.
A couple of good full-length blogrtphle* of l e x e r s
thefcJMlNsftwho IttiVt helped, to ahfips the
4.
A simplified MMMMft *f Hwi Sjfst#it'
In this ae^oer^cj, designed for
2**&alng tor high | M K stuaimts of civict
«r f i r s t y i y college? st«d#ittij of «c0ttoaic» #jsd
political seiene«, (This to b« ch#ck«d with school
)
Projects
• subject of study in the pilot project.
They foim « special group within the aisia project; whether
or sot tbeir fin Ml if 1* sft^aretely Arranged they will
beDeflt by % continuing position vithin the whole,
verss.)
!•
The compiling mad editing of doc«s«ata b&ale to mn
. HM #|Wi|AfM% of the
l • • • Toric • • ! it» pl^ee in
t«
I Mttory of the Federal B«s-«rya Bask of B#v Tork
w^lah will bt» useful In ^he train!ng of yotsng ea»
eoutivee i»tf i» so planned that i t eaua TTO'A time
to tiste be brought np to
A ijottera for the ometlon of B*mk Arohlven
the Federal Reserve Bank of Mew Yor^:« (This
#^r® to h^-'r^ been aitftrted in X$TT$
under ths ixifluecoe of Mr. Varren in 1944, but not
)
pr#pftr*tion of MMfti • cooeiderable body of work, grouped around
* tubjeat of such high import us the PMtlfel f»?ii#rv# System, obviously
il
for tchol&rs of tb# fir-si c b i l l t y end for an Adequate oper&tlng or
Ve &re gathering ffcl n^m& of -¥cbolsrs# and w® will hav# operating
raady for e l^ter <iri*ft.
*»tif vm «sk the tesssiitte©1® eonfiideretlon of this skeleton
l i s t * Any suggeatioas, whether ftf to ocmt#nt or form^ will help in the
forantioji of the druft propots^d itself* Ve will be grateful for your r e actions by Monday, the 39thf if poasibl«.
Mildred
Research Director
j
(
,\xL*y«
2
March 20, 1954
Draft Proposal
When the Committee to Study the History of the Federal Reserve System
first proposed a pilot project to the Rockefeller Foundation, its objective was
preparatory work leading to a comprehensive study of the System.
"Papers which
form the source material should be located, classified and roughly analyzed.
Im-
portant characters in the drama should be sort out, their cooperation asked, and
their interest enlisted. The dimensions and proportions of this comprehensive
study should be sketched and its possibilities bulked out. The exploratory study
would at least hope to answer the basic questions, what? where? and whom?".
Toward the end thus described, the Foundation generously granted $10,000
to the Brooking Institution and work started January 15th to end May 1st. Two
weeks of that period remain, but enough has been done so that we can report on
the result of the mapping and survey of papers and people which went on at so
brisk a pace. The exploratory process superficial though it had to be, and as
yet incomplete, has guilded a gratifying harvest. The material located is rich,
and the memories valuable. The interviews, though hardly more than introductory,
show an enthusiastic interest in a further development of the project.
This has been in the best sense of the word a pilot project. It has
located and surveyed more collections of papers than we thought could be possible.
(The complete list is in the appendix).
The size of the collections make it
necessary to postpojie classification to a later date, but we have discovered
an organization that might handle such papers and at our suggestion they have
started a sample study to determine time and costs of the necessary process.
Problems of a place of deposit, and of permission to use, still remain but the
fact that these have arisen and must be left for a second phase is, in an oblique
way, an ernest of the work which has been accomplished.
The characters in the drama are more numerous and have shown themselves
more cooperative than we dared to hope. Even of the earliest years a few hardy
operating men survived.
(The list of persons inter-viewed is in the appendix).
To some of these men work in the Federal Reserve System has been a lifetimes
occupation*
Their memories must, of course be checked with the records, but
the sense of life and struggle which they convey would be a valuable factor in
any history of any institution. Their interest has been enlisted and their cooperation is generous.
As a method of recording people, papers and events pertinent to this
inquiry we have started four card files, one a Vho's ¥ho file of persons, one a
time file which coordinates persons, pertinent events, legislation; one a bibliographic file of unpublished material; one a subject file. These are arranged so
that they could be photostated for the benefit of students working on a later
phase of the project. They are by no means completed as yet*
This work has been done under the Research Director, Mildred Adams,
in an office generously provided by the Federal Reserve Bank of New York and
with the aid of a small staff assigned by the bank from among its own personnel.
Office space also was assigned in Washington by the Federal Reserve System and
by the Brookings Institution, The latter organization has been generous with
expert advice as well as with the technical assistance needed for administering
the fund.
MA:lk
5
-- Operation
t
i
The pilot project has enjoyed a unique position -g4&**4geadak the Brookings Institution. The Rockefeller grant was made to Brookings (as to a tax free
scholarly institution of high repute) which then acted as bookkeeper, disbursing
agent and consultant* te««*ia#Hfie#^
4^r,,rHYfi» Vhether auch an arrangement should be eosi for the major project is a
matter for discussion and decision on the part of the Coimaittee and of the Brookings Board*
Meanwhile, and apart from the subject of Brookings affiliation, two
methods of operative have been suggested. The first is a centralized oppe&tftmr*
A.
in which a research staff would be assembled and organised, and the work done
from the central headquarters* The other would be \A decentralized^epegafricm with
r\
J
a small staff to act mainly as a center for grants, information, consultation, and
occasional applying of the spur to the lagging. It is the Committee1s recommendation
that this second method be the one chosen* ^ ,¥a W I J O V M it has the merit of encouraging independent research and the exercise of independent judgement* It is our hope
that this project will attract many good minds from several disciplines - we believe
they will operate aor© fruitfully in freedom and with a certain loose competition
between them tb#oi though an attempt is made to assemble them, wtfor a single
, no msttar how distinguished.
Experience in the pilot project suggests that in its early stages this
major project will need a staff composed of a director, an administrative assistant,
and a research assistant, with two secretaries and a typist. The work to be done
will include first, the assigning of agreed works to chosen scholars* Two, the
making of grants and agreements for work. Three, the acting as a center for information as to whereabouts of papers, and permission to use themj the whereabouts
of people, and their willingness to talk, the usefulness of their meiaoriesi the
distribution of photostated files, etc. Jwaple1 of overlapping and a certain supervisory of fields of inquiry and of investigation*
Continuation of Previous Memo - Operation
The pilot project has enjoyed a unique position via the via the Brookings Institution.
The Rockefeller grant was- made to Brookings (as to a tax free
scholarly institution of high repute) which then acted as bookkeeper, disbursing
agent and consultant in the most generous fashion and without making reciprocal
demands. Whether such an arrangement should be sort for the major project is a
matter for discussion and decision on the part of the Committee and of the Brookings Board•
Meanwhile, and apart from the subject of Brookings affiliation, two
methods of operative have been suggested. The first is a centralized opposition
in which a research staff would be assembled and organizaed, and the work done
from the central headquarters. The other would be a decentralised operation with
a small staff to act mainly as a center for grants, information, consultation, and
occasional applying of the spur to the lagging.
It is the Committee1s recommendation
that this second method be the one chosen. ¥e believe it has the merit of encouraging independent research and the exercise of independent judgement. It is our hope
that this project will attract many good minds from several disciplines - we believe
they will operate more fruitfully in freedom and with a certain loose competition
between them then though an attempt is made to assemble them under a single umbrella, no matter how distinguished.
Experience in the pilot project suggests that in its early stages this
major project will need a staff composed of a director, an administrative assistant,
and a research assistant, with two secretaries and a typist. The work to be done
will include first, the assigning of agreed works to chosen scholars. Two, the
making of grants and agreements for work. Three, the acting as a center for information as to whereabouts of papers, and permission to use themj the whereabouts
of people, and their willingness to talk, the usefulness of their memories; the
distribution of photostated files, etc. People of overlapping and a certain supervisory of fields of inquiry and of investigation.
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DRAFT
MISC. 14O B
(MIBC MO B.I-SOM-6.M)
CQHIGTTEE OH THE HISTORT OF THE FEDERAL RISIB?I STST1M
PROPOSAL
The pilot project for which funds were granted to begin January
15, 1954* has uncovered a wealth of material, both In the form of unpublished paper* and In the Interested cooperation of men who hare played (or
are playing) an Important part In the Federal Reserve S&rstesu A report
of the vork done under the terms ot that preliminary grant Is appended.
That work was designed to be exploratory only. Its results
have more than justified that approach to the larger project.
The Committee*s first statement that the System, built and rebuilt during the past four decades, has not been adequately analysed
or Its history and influence sufficiently recorded must be repeated vita
added emphasis. The correlative statement that the vork of examining what
has been done, and of setting it down in readable fora must be started
soon lest a vital section of financial and economic history be lost has
been reinforcedt
during the vetr process of the pilot project one collec-
tion of papers of a Board member was destroyed before they could be
reached, one retired officer of the New lork Bank vhose experience vent
back to **r}j days died before his memories could be gathered*
The exploratory process, superficial though it has had to be
in the time allotted, and as yet incomplete, has yielded a gratifying
harvest. The appended report shows how rich Is the material located, and
how valuable the memories• The interviews, though hardly more than Intro*
ductory, show without exception an enthusiastic interest in a further
development of the project, and a willingness to give further time for
more extensive interviews and to put at the Committee's disposal
MISC. 14O B
(MISC. 14O B.I-3OM-6-B3)
«* 2 **
(surrounded of course with due safeguards) the use of papers vhen such
can be found* This cooperation en the part of sen vho are leaders in
the banking -world i s not only gratifying in itself, but i t also gives &
measure of the values which l i e in carrying this project into a second
and *>re intensive phase.
Vhen the pilot project was first set forth, the Committee outlined as the desired end-produot "e comprehensive history of the Federal
Beserve System, Including the editing for publication of certain source
materials, the writing of biographic sketches of some of the most important
figures, the composing of books, monographs and articles on special facets
of the structure of particular interest, and perhaps & popular history or
two designed for vide public reading."
"Obviously/said the Coamittee,
•such a comprehensive design would be a considerable undertaking, to be
carried on over time by experienced specialists in this field**
Though the exploratory work i s by no Beans finished, i t i s now
possible to see l a greater detail the comprehensive design which i s i t s
goal.
The aain elements in that design continue to be those set down
in the f i r s t statement, but their outlines are now clearer, and we now
know that to then should be added other works which give the struoturs ^ g ^
substance and balance/The Coaaittee has from the beginning held firmly
to the belief that one of the most important factors i n the strength of
the Astern i s the fset that, like every other structure in Government, v
I t s ultimate power l i e s l a i t s acceptance by the American people*
Because the American people, l a the last analysis, created i t and can undo
MISC.
14O B
(MISC. 140 B.I—3OM-6-S3)
3 -
i t , I t s continuing vitality depends on as much und ere tending of i t *
vslue a» can be achieved by laymen, The institution i s complicated, hut
i t must not therefore be allowed to seem so far above the heads of i t s
ultimate masters as to arouse their distrust and animosity,
i s no vision, i t I s not only the people who perlshj
of that lost vision*
Where there
so also do the objects
the national banking system will live and flourish
only while the people trust in Its ways, and there are numerous examples
in modern l i f e to prove that they do not long trust blindly.
For these reasons, the Committee has from the beginning seen i t s
ultimate objective as the production of two kinds of publications!
scholarly and technical studies on the one hand} and, on the other, works
designed for more popular use.
The first group would Include the writing
of a definitive history and analysis and the publication of basic documents*
the second calls for banking biographies so framed as to interest the lay
T**Amr In both the people portrayed and the work they have done as well at
the publication of important papers which throw light on the questions at
issue and reveal the final outcome of such debates in a manner that would
make the controversies come alive to the non-specialist.
the following l i s t I s not necessarily complete (the vitality of
this whole field i s attested by i t s impulse to grow), but the Committee
believes this i s the minimum that i s needediA. Scholarly Group
I* History and Analysis*
ft fW
, -,
Wr**» {
h i
1* A definitive history of the Federal Reserve System,
from Its inception in 1907 to the latest date for
vhieh records can be made available*
this should be
MISC. 14O B
(MISC. 14O B.I-3OM-6-B3)
a full-bodied job, written against the background
of economic growing pains from which the System
sprang. I t should cover a discussion of what the
proponents of the System thought central banking
was and would do, an account of the handicaps
imposed by lack of knowledge of how central banks
could or should operate, a description of the changes
which have come about i n ihe American concept of
central basking after forty years of experience with
the developing American type* I t should cover policies
and procedures as well as operational legislative
changes and their effects*
Tre&sury~Federal Reserve
relations} as well as the straight history of the
Systea in war, peace, and crises.
2.
An analysis of the operation of the System within the
economy and of the inter-relationship between the System
and the economy* This would include the history of
an awareness within the System that some shaping of the
economy was part of i t s function;
the attempts made,
the forss they took, the successes or the failures*
3* An analysis of the Federal Reserve System as an instrument
of Government* This volume would be the work of a
political scientist interested i n the whole problem of
the methods and mechanisms which this democracy develops
and through which i t functions*
IllSJllIf i
MISC. 14O B
(MISC. I4O B.I—3OM—6-83)
- 5
II.
r
Documents and Paperst
1* Th© compiling and editing of documents basic to an
understanding of the System and i t s functioning.
These
would Include not only the relevant legislation with an
Indication of the changes brought about by amendment,
r
but also such speeches, memoranda, executive decisions,
excerpts from hearings, and so on as have affected both
policy and function*
the British established a pattern
for this In Oregory1* Select Statutes* Document* Jt
Reports H»jLs..tly to, Br3.tj.sfr Banjfclnff,
this model could usefully be adapted to American needs.
2.
the compiling and editing of documents basic to an under*
Standing of the Federal Reserve Bank of Slew York, I t s
growtht development and influence.
This leads to the
writing of a history of the Sew Xork Federal Reserve Bank
which will be useful for the training of young executive*
and which can be added to as occasion warrants.
This,
whiea i s "fee other part of particular interest to Hr»
Sproul, eaa be done in one of two ways once the Job of
locating documents Is finished.
B# Popular Group (Nontechnical)
1# A volume of essays on orlses In the banking world, how
they were handled by the Federal Reserve, how their oc-
j^*V«U*
«IU
I
currence and handling modified the System in an attempt
to guard against their repetition,
this would include
\
MISC.
14O B
(MISC. 14O B.1-3OM-6-83)
the financing of World War I with I t s Liberty Loansf
the aftermath of the war in the depression of 1921 j
the crash of 1929 vith the failure of the System to
prevent i t and the work done by Federal Reserve bankers
in mopping up after i t |
the financing of World War II
and the long captivity of the Board* There i s a great
deal of drama In these, and their Importance in the
economy i s tremendous* They should be written for
popular reading, with due regard for their appeal to
the vide audience that had experience vith or tales of
these crises,
2* A volume of biographic essays shoving the growth and
functioning of the System through the lives and aims of
men who helped to make i t what i t Is* this would include
not only Governors, but staff menj not only the Benjamin
Strongs but also the Leslie Houndses, not only the Adolph
Killers but also the Rieflers, Goldenveisers, Stewarts,
etc*
there are various ways of planning this, various
criteria for choice! but I t should Include as many kinds
of men and as many phases of the Board's work as ean be
made to live by this method* I t should be planned and
written for popular, not technical, readers*
3* A couple of good biographies of leaders among the bankers
who have helped to shape the System. Benjamin Strong of
the New lork Reserve Bank I s the most obvious one, but
there are other Important candidates, such as Roy Toung
and Allan Sproul.
MISC. 140 B
(MISC. 14O B.I-3OM-G-53)
4* A popular history of the System designed for high
School and first-year college •Mbasjuy classes.
This
should be based on number (l) above, and, If possible,
should be designed to appear shortly after the publica-
i
tion of the longer and definitive work. Popularizing i s
In i t s e l f no small art, and the services of someone who
has proven himself expert in the exercise of that art
should be sought*
5* A aa!f«*tsennicalf half*»popular history of the New Xork
Federal Reserve Bank designed for young executives.
0* In addition to these tvo groups, a third i s of great importance*
1.
The assembling, classifying, and indexing of papers uncovered tsy the intensive search carried on in the pilot
project i t a vital part of the main project.
In many
/ instances, this must be done before the papers are
usable.
l e t because the disposition and arrangement of
relevant papers i s so important a part of the scholar1 s
work, the tvo procedures cannot always be separated*
Ifor
can the writing of volumes in this project be postponed
until a l l relevant papers are in hand, or neither task
would evtr be finished*
The two to a certain extent feed
on and stimulate each other.
2.
the publication of selected papers of leadings thinkers
on the pattern of, say, Mr* Burgess's Interpretations
of Federal Reserve Policy in, tfre Speeches and Writings of
Benjamin Strong*
MISC. 14O B
(MISC. MO B.1-3OM-6-S3)
m, S <m
3* A pattern for t&e creation of Bank Archives i a the
Hew Xork Federal Reserve Bank* Tnis means* first*
location of pertinent historical material which i s
burled i n the great sea of bank f i l e s , end which
does not Jimp to the eye from any perusal of the
subject catalogue* Second, i t implies the continuance of any system of location for historical purposes
so that i t s history function a&y continue.
Continuation of the search for papers end intensification
of the process of interview*
The search must go on for
papers* The process of interviewing must continue as a
itlBulant to men's memories and a reminder that their
papers are valuable to the writing of history in this
democracy*
MISC . 14O
B
(MISC. I4O B.I—3OM— 6-53)
Work ten* in the course of the pilot project
List of Papers Unoorered
List of Introductory Interviews. Held (Person and Htsaber)
Lint of Files Coapiled As visible evidence of work accomplished during the pilot
project v© set ourselves to ere&te the following group of f i l e t vhioh
we considered essential for the use of anyone starting work on Federel
Reserve Betters.
They ere by no meeus finished, but enough have been
done to ahov this function.
They have been set up in such * Tom thet
they can be photostated «t « moderate cost for the use of scholar*.
These H i t s ere se&nt to serve as a basis for research and as usable
sodels for the further vork in specialised fields to vhieh iadividuels
direct themselves.
1,
A f i l e of persons aotive in the Eastern. This includes
N
the Federal Reserve Boards oae Chairs ay mesbers of the
Board, tnd senior offioialsi
the Presidents (or Governors),
the Chairmen, the Federal Reserve Agents in eaoh District Bank.
2« A bibliography of unpublished papers uncovered during the first
phase* This i s in some instances merely a bulk l i s t , with an
indication of where the papers are, and vho mist be consulted
concerning their usef
in some Instances, we have also a
register of items.
3.
A chronological f i l e (knov to the Coasdtt**1* Research Director
as the *ft*e File«) # stertlng with 1907, which keys together
persons, legislation, litigation, and outstanding events within
the System aad in the economy. T4*^ U* U* wU» - - .
MISC. 14O B
(MISC. MO B.I—3OM—6-S3)
Appendix m 2
4* A subject f i l e ,
5« A blfeiiogrspiKr of ptabli«5h#d wrks vhiefe bear oa th*
(tbis v« int#fH^«d to postpone until » l*t«r g%fff,, but i t
g«th#r«d iteelf «n ve vork^d.
It Includes * l i s t of the
aattrlel becic tc aiy esrterteiTe study of the Str«t«Esf such
, etc*)
DBAFT
Harch 5, 1954
PROPOSAL
The pilot project for which funds were grunted to begin
January 15» 1954 has uncovered a wealth of material, both in the fotm
of unpublished papers and in the interested cooperation of &#n who have
played (or ar« s t i l l playing) an important part in the Federal Reserve
^ygtea. A report of th© work dona under the t«ras of that preliminary
grant i s appended.
that vork wss meant to be exploratory, and i t s results have
aore than justified that type of approach to the larger project,
the
Goaaittee then talked in tarns of the "desirability of producing and
publishing such works as a definitive history of the Federal Reserve
System, an analysis of i t s place in the Americas eeonoay, several volumes
of pertinent papers to be collected i nd edited, one or tvo key biographies,
at least one popular account useable in high school and freshsmn college
courses, articles and »onogrep4is in periodicals**
Research has shown
those alas to be only part of a larger complex of studies vhieh are needed*
More vork needs to be done before so»e of those studies can be
clearly outlined, but we are nov able to plan the followingi1. A definitive history of the Federal Reserve System,
from i t s inception in 1907 to -Che.-latest~3at* iav vaieh records
can be made available* This should be a full-bodied Job, written
against th© background of economic growing pains from which the
System sprang. I t should cover a discussion of what the proponents of the Sffstest thought central banking was and would do, an
account of His handicaps imposed by lack of knowledge of how
central bsaks could or should operate, a description of the
changes which have come about in the A&erlcen concept of central
basking after forty jmrs of experience with the developing
imericsn typo. I t should cover policies and procedures as well
as operations| legislative changes anrl their effectsj TreasuryHe ss-rre Board relations} as veH as the straight history of the
System in war, peace and crises*
.
~ 2 -
2* An analysis of the operation of the System vithin this
econoss?', and of the inter-relationship between the System and the
econoay* Thia would include the history of an awareness within
the $y$te» thet soae shaping of the economy wag part of i t s function? the fetteapts &ade, the fora© they took, the succes or the
failureB.
3* An analysis of the Federal Reserve System as an instrument of Government, this calls for © political scientist interested in the whole problem of the isethods and mechsmlsas which
this democracy develops and through vhich i t functions. (Dr.
Calkins Is particularly interested in this*)
A* The compiling and editing of docis^ents basic to En
understanding of the System and i t s functioning. These would
include not only the relevant legislation vith an indication of
the oh&ngas brought about by amendment, but also such speeches,
aeaorende, executive decisions, excerpts from hearings end so
on e© have affected both policy and function.
5. A couple of good biographies cf leader® ancng the bankers
vho have helped to shape the System* Benjamin Strong of the Hev
York Federal Reserve Bank i s tha ®ost obvious one, but there are
other iaportent candidates, such as Hoy 3foung and Allan Sproul.
6. A volume of biographic essays shoving the grovth
functioning of the System through the lives and. sims of si@n vho
helped to ®ake i t vhat i t i s . This vould include not only
GovernorSi but staff men—not only the Benjasin Strongs but alto
the Leslie Roundses, not only the Adolph Millars but elso the
Hi^flers, Goldenveisers, Stewarts f e t c . There art various ways
of planning t h i s , various criteria for choice, but i t should
include EC aany kinds of men, and es aeny |^i63eB of the Board1*
work| as c&n be alive* I t ghould be fraised for popular, not
teohnlottl,
7* A vol\jR6 of essays on crises in the banking world, hov
they vere handled by the> Federal Reserve, hov their occurrense
&nd handling modified the S^gtem in an ettespt to guard ng«lnst
their repetition. This would include the financing of World War
I vith i t s Liberty Loans? the efteroath of the w©r in the depression of 1921} the cr&sh of 1929 vith the failure of th® Syottm
to prevent i t end the vork don^ by Federal Reserve Bankers to mop
up after i t j the financing of World Var II I aj the long captivity
of the Board. There i s a greet deal of dresa in these, end their
importance in the econoac i s treisendous. They should be written
for populer reading, vith du® regard for their sppe&l to the vide
audience that had experience, or teles of, these crises.
8. k popular history designed for high school end first-year
college history classes* This should be based on mmber (1) and,
i f possible, should be designed to appear shortly after the
publication of the longer and definitive work. Popularising i s
in i t s e l f no small a r t , and tht services of someone who hag
proven hl&sclf expert in the exercise of that a r t should be
aought.
9. Tha &ssembllcg, classifying &nd indexing of papers uncovered by th«* intensive scorch carried on in the pilot project
i s (i v i t a l pert of the ffifein project* In tt&ny instance®, this
muet be done before tfei papers are U6«able» l e t because the
disposition and arr&ngement of relevant papers i s so important
s pftrt pf HM scholar's vork, the tvo procedures cannot always
bf? separated. Kor can tfca writing of volumes in this project
be postponed until a l l relevant papers are in head, or neither
task would ever be finished, the two to a certain extent feed
end stimulate each other. (Thi© i s i#iy we have not started this
phase vith this problem.)
10. The search aust go on for papers• The process of intertwining musst continue as a stiaulant to men's aeffiories end a
reminder that their papers are valuable to the writing of history
in this deoocracy*
11. A pettern for the creation of Bank archives in the New
Xork Federal Reserve Bank, that i s , a pattern for segregating
froa the files of the Bank copies of aaterial which will be
helpful in establishing a history of the Bank. (Mr. Allan Sproial
i s much interested in t h i s . ) This means, f i r s t , locating pertinent historical material which i s buried in the great sea of bank
f i l e s , and which does not Jump to the eye froa &iay peruse! of
the subject catalogue. Second, i t implies the continuance of
any systea of location for historical purposes so that i t s history
function »ay continue,
12. A history of the New York Federal Reserve Bank which
will be useful for the training of young executives &n& which can
be added to as occasion warrants. This, which i s the other part
of particular interest to Mr. Sproul, can be done in one of two
ways once the Job of locating documents (n»ber 11 above) i s
finished.
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