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June 29, 195k
RF 5UO61
Dear President Calkinsi
Thank you for your letter of June 15, with nhich
you submitted your budget for the year beginning July 1,
1951* in the amount of $53,325, under the above appropriation
for the preparation of a history of the Federal Reserve
We are enclosing herewith our check in the
amount of $26,662*50, representing the first semi-annual
payment due for the year 195^-55•
We shall appreciate receiving anrma.l statements
of receipts and expenditures from you with reference to
this appropriation*
Very truly yours,

President Robert D« Calkins
The Brookings Institution
722 Jackson Place, N. V .
Ifcfchington 6, D. C.
Enct 1 check
Copy to Miss Mildred Maroney, Treasurer

June 16, J954

Miss Flora N5. Rhind
The Rockefeller Foundation
49 West 49th Street
New York 20, New York
Dear Miss Rhind:
At a meeting of the Executive Committee of The
Brookings Institution held today. Dr. Calkins reported the grant
made by The Rockefeller Foundation for the preparation of a
history of the Federal Reserve System. The following resolution
was adopted:
Resolved, that the Executive Committee of The Brookings
Institution express its appreciation to The Rockefeller Foundation
for its action on May 21, 1954 in providing up to $310,000 to The
Brookings Institution for the preparation of a history of the
Federal Reserve System, the project to be administered jointly
by The Brookings Institution and The Committee on the History of
the Federal Reserve System; and that the Chairman be asked to
convey to the Foundation the Committee's appreciation for this
support of an important project.

Sincerely yours,

wii;Laia R.


Chairman of the Board


o m c t or THI HCXITARY

May 2lh
Dear Dr. Calkins:
I have the honor to inform you that at a meeting of*
the Executive Committee of The Rockefeller Foundation on May 21,
19£1|> action was taken providing up to $310,000 to The Brookings
Institution for the preparation of a history of the Federal Reserve System. This grant is in addition to the Foundation's grant
No. QA SS fj^OU, and the combined sums are available for the period
ending May 31, 19*9.
It was the understanding of our Trustee© that the project
for which these funds were appropriated would be aduinistwed
jointly by The Brookings Institution and The Committee on the History
of the Federal Reserve System.
If it meets with your convenience, we shall be glad to
make payments on this appropriation on a semi-annual basis upon receipt at the beginning of each year of a budget for the project.
We shall appreciate receiving also annual statements of receipts and
expenditures. Any balance of the fund unexpended on May 31, 1959,
will revert to the Foundation.
A brief public announcement of this grant will be made
in the next quarterly report of the Foundation. There is, however,

Page 2

May 2h, 1

no objection on our p-irt to your announceraent of the grant prior
to the issuance of the Foundation's report if for any reason this
appears to you desirable. In this connection we are enclosing, as
a matter of routine, a printed statement of The Rockefeller founda
tion policy regarding the announcement of grants.
It ie a pleasure to report this action to you.
Sincerely yours,


Dr. Robert D. Calkina
President, The Brookings Institution
722 Jackson Plac*, N.W.
Washington 6, D. C#

Copy to Dr. Donald B. Woodward


Announcement of Grants
The Rockefeller Foundation is primarily a grant-making organization.
Except to a limited extent, in public health and agriculture, the Foundation
does not itself engage in research and experimentation, or furnish services
in particular fields; rather it seeks to advance its charter purpose "to promote the well-being of mankind throughout the world" chiefly through
grants to universities, research institutes, and other qualified agencies conducting work within the scope of the Foundation's program.
Since its establishment, the Foundation has followed the practice of
recording its grants in an Annual Report that appears early each year.
More recently this has been supplemented by Quarterly Reports in which
brief announcements of grants are published soon after they have been
made. Through these reports the Foundation seeks to fulfill its responsibility of accounting to the public for the current use of funds it holds in trust.
Consequently, the Foundation has no reason to ask recipients of its
grants to make any announcement of them. Recipients who do wish to
acknowledge publicly receipt of funds may do so, either by routine reference or by similar listing in their Annual Reports. If occasionally special
circumstances make desirable some further announcement that involves
interpretation of the Foundation's action in making the grant, the officers
of the Foundation will appreciate the opportunity of seeing such announcements before they are made public.
Since the Foundation neither expects nor desires that the results obtained
in research or other projects supported by its grants should be submitted to
the Foundation for approval, there should be no acknowledgment of the
grants in prefaces of books or in similar usages which might imply or suggest that those results carry the specific approval of the Foundation.
While the Foundation's action in making a grant carries implicit
approval of the proposal for which the grant is made, the recipient, and not
the Foundation, is responsible for giving effect to the proposal and for its
results. Therefore, no reference of any kind should be made by the recipient implying that the Foundation has control over the project or any
responsibility for its results.
The Foundation requests particularly that its name not be used on
jackets or in any advertising of books or in designating projects, fellowships, laboratories, or buildings toward which it has contributed.




RociroimD, N«w YORK

Dear Bob*
Kxny thanks for your letter of May 2ii and tte
•nclos«d copy of the agreement between Brookings and the
Coenlttee on the History of the Federal Recerre Systeau
Thanks also far your report to the Trustees of
Brooking* • I hare not had a chance to read this yet,
but hope to do so shortly* As you can imagine, ve are
rather busy just now!
Sincerely yours,

Or* Robert D . Calkins
The Brookings Institution
722 Jackson Place, m
VashingtoB 6, D«C*

U , 1954

Dear Joe}

you herewith a oopy of the agreement that we
are proposing between the 5rookinge Institution and the
Ooaad-ttee on the Hittory of the Federal Reterve 8y»tem*
I t It tentatively approved and i t now before the Ccwaittee
for final approval. M T rut tee t approved i t today.
For /our information I tend you herewith a copy of
«y report to Truateet today on work in progrett and propoted
projects, lour grant Game at treat help at the very turning
point in our affairs* there It auoh to be dona, and vm
expect to get on with the at«igBa«nt - with resultt th&t
will confim your faith la the Inttitution.
Sincerely yourt,

Mr. Jotuph H.
The Bookefeller Foundation
49 Vett 49th Street
lev Tork 20, lev Tork


Approved by the Board of Trustees, Brookings, May 14, 1954;
" Committee on History Fed. Res. System, May 21, 1954 (letter from
Allan Sproul)

1. The Committee on the History of the Federal Reserve System and the
Brookings Institution will assume joint responsibility for the administration
of the proposed project on the History of the Federal Reserve System and
the expenditure of funds that may be granted by the Rockefeller Foundation
for this activity. The proposed grant will be made to the Brookings
Institution for administration jointly by the Committee and the Institution.
2. The Committee will enlarge its present membership and provide for the
replacement of members as agreed upon by the Committee and the Brookings
3. To facilitate the administration of the project, the Committee will
designate an Executive Committee with power to make administrative
decisions jointly with the Brookings Institution on matters that may require
action, and a member of this Executive Committee will be designated and
empowered to act for the Committee in accordance with general policies
established jointly by the Committee and the Brookings Institution.
4. The Committee, directly or through its designated representatives,
and the Brookings Institution, through the President, will jointly determine
the research and related activities to be undertaken, the allocation of funds,
the manner in which these activities shall be pursued, the personnel to be
engaged, the contracts, grants, or other commitments that may be made.
5. The administrative arrangements and the payment of funds will be
handled by the Institution on the authorization of the President in accordance
with procedures approved by the Committee and the Institution.

6. Employees engaged for work on the project shall be appointed by the
President of the Institution in consultation with a designated representative
of the Committee, and they shall be joint employees of the Committee and
the Institution for specified periods, and not regular employees of the
Brookings Institution.
7. Contracts or grants for writing, research, or other services shall be
arranged by the President of the Institution in consultation with a designated
representative of the Committee. These contracts or grants, as the
circumstances may require, shall specify the obligations of the parties,
the amount and manner of payment, the responsibility for supervision, and
the responsibilities respecting reading and criticism of manuscript,
editorial work, approval for publication, and publication arrangements.
Such contracts or grants may be entered into with the Brookings Institution
itself for portions of the work on terms that comply with the Institution's
usual operating practices.
8. The Institution will keep a record of its overhead and other expenses
incurred in administering the project, and render an accounting to the
Committee annually. Such expenditures up to $3,000 per year (as provided
in the request) shall be charged against the funds for the project. Any
expenditures beyond $3,000 per year shall be subject to reimbursement
with the approval of the Committee.
9. These arrangements shall apply for the duration of the project over
the next five years, unless altered with the approval of the Committee and
the Brookings Institution.


N*j U , 1954

Miss Flora M. Rhind
Tho Kockofollor Foundation
49 *ost 49th rtr»«t
S*v Tor* 20* H. I .

At th« aMtlng of our Boerd of Trti»t««« h«ld

th« Boturd of t n » t o « « of
SrooiclDge XnstliutlcMi •ipr%#» i t *
ttcw to ttio Boeic»f«Il«r Fomdattioa for tho
gsmnt swtdo oa Jaai«try 2X# 1954» 1» tho aaomt
of |10,000, for *& «xplor»tory study of
t o r l e t l m U n r U i i rel*tiag to tho Fofertl

Slaoor«ljr yours f
(bigned) William R. Biggs
of tho Board







April 30, 195k

Dear Dr. Calkins:
I an very glad to be able to inform you that
action has been taken by the officers of The Rockefeller
Foundation extending to September 30, 19$k, our grant
GA SS 5kOk to The Brookings Institution for an exploratory study of historical materials relating to the
federal Reserre System*
Sincerely yours,

Dr. Robert D. Calkins
The Brookings Institution
722 Jackson Place, Ntf
Washington 6, D.C.

Copy to Miss Mildred Adams


April 26, 1954

Dr. Joooph H. UUlltt
Tho loafcoftUoT
49 V«rt 49th 8tr*ot
low lorte 20, M w Uxk
Dnr Br. ¥ l l l i t «
X akoalo Ufco officially to m o i d to* Broaki^e XaotltuU
wholohoartod 9up9*r% of th« rmqmt tllmd with joo by Mr. Dowdd
MMlf of th« Oondtt^ on tfe« Hl»\ory of th« F«d«r*l 3«»orro
tbo C«Mlttoo r o y f • furihor ootttributlon of $310,000
for * oontlanatloa of thm «sj>lartiU«m tad roioroh on tho hletory
of tho Fodos«l KO*OJT* %fi«i oror th« ft«ari ttvm yo*r»» this roqooot
f i f ^ i i i t i i tho oonUMMtlao of tbo O3d«tia« rtltUoniMp
«ho BrooklagJ ZnsUtuUoo oad tho Oomlttoo*
Tho BiooldBga liuititutlom i» glod to *ot ** apoaoor and as CLooal
tt for this ruMourah qMtrtaklng. tn this 1 o«pjpo«» tho YIOWI of
tho h&vimry Cognoili tho Frooldomt, tho flholT—nt oai * aKri»*r of tho
T n i U n , FonwX o^cwoX of thio u n n | « « t will bo toaght *t tho
Truotoo* aootlAi on Max 14« *n& I bm*m ovory rom«a« to bolioro that
tfao «jma§o«oBt will bo f a m i l y
As poiatod omt 1M tho oabal«oioA9 M M of tbo omngOBonto vith
tho XAOtitttUom r i i l n to bo ootUod. ¥o aro ooafldknt that thooo
•attora ooa h» hoA41od to tHo n t o a l aatUfhoUam of tho Osavittoo
aad tao

Report on a Pilot Project
Proposal for a Further Grant
to Study and Write
The History of the Federal Reserve System

in co-operation with

Allan Sproul, Chairman
W. Randolph Burgess
Robert D. Calkins
William McC. Martin, Jr o
Walter W. Stewart
Donald B. Woodward, Secretary
Mildred Adams, Research Director


on a
to explore materials and memories
for a
Study of the History of the Federal Reserve System

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

''Papers which form the source material should be located,

classified and roughly analyzed" said the proposal.

"Important char-

acters 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 ? " 'where ? ' and Vhom? '. "
Toward the end thus described, the Foundation generously granted
$10,000 to the Brookings Institution and work started January 15, to end
May 1. A few 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
The exploratory process, superficial though it has 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 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.

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

should be a valuable factor in any history of any institution.


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's Who
file of persons; one a time file which 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

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.

When we set forth the terms of the pilot project we said that
**the papers which would be needed as source material in writing an
adequate history are scattered among Government, banking and private

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 Reserve 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.

We know, for example, that material covering

the Liberty Loans of World War I was sent from 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 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 corre-

spondence 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.
As for the papers of individuals concerned with the System's
history, we 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 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 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
The papers of Colonel E. M, House, containing material about
the early creation of the System, are in the Yale University Library.
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 System, would
be generally useful to students. (See main project proposal.)
The papers of the late Professor James L. Laughlin of the
University of Chicago, a widely recognized teacher of banking during
the formative years of the Reserve System, covering the period 191032, contained in 15 boxes of material, are now on deposit with the
Library of Congress.
Of the first Board of Governors, we have found the following
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 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 comment which has
neither been studied nor evaluated. (See main project proposals.)

The papers of Ho Parker Willis, member of the Organization
Committee and the Board's first Secretary, are in the home of his
widow on Staten Island. 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 member; 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 dated 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 James Warburg, covering a later 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 a delegate.
A collection of the private papers of Mr. A. Barton Hepburn, a
prominent New York banker who served as Comptroller o the Currency
(189^-93) and later (1918) as a member of the Federal Advisory Council
of the Federal Reserve Board,is on deposit with the School of Business
Library, Columbia University.
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 C. 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 has been made
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 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 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 York 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 York Life Insurance
Company. These, like the Strong Collection, have the great merit of
presenting material culled from the mass of daily work; they are therefore easily handled as well as very valuable to the student. This
Committee has permission to consult them.
The papers of Charles Dawes, of the Dawes Plan, are in the
Deering Library at Northwestern University. They 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 Woodrow Wilson, the Library of
Congress also has the papers of Calvin Coolidge, Charles Evans Hughes,
Ray Stannard Baker who was 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 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 , Secretary 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 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 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. Meyer's 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 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 at Amherst College, where they are expected to be available for use after June 1954.
A small collection of the papers of Leon Fraser has been handed
to this Committee, but little of value has been found in them.
The papers of
to the Treasury and
Sprague residence.
Mr. Sprague is now

Oliver W. M. Sprague, at various times consultant
to the Board, are in the hands of his son in the
Stimulated by inquiries from this Committee,
sorting and classifying the material his father left.

The papers of Henry Morgenthau, including the famous stenotype
records of conversations, are said to be in the Roosevelt Library at
Hyde Park.
have been
the Baker

papers of Walter Lichtenstein, for two decades (1926-1948)
of the Federal Advisory Council, Federal Reserve System,
given to Harvard University, where they are divided between
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 they may be made available for study
this summer. (See main project proposals.)
Obviously this list of 30 pertinent collections which we have
located is 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 System are known to have been
accumulating papers which, if they can be preserved, will add greatly
to the desirable 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 theory and practise
are made available. It is to be hoped that this Committee may be active
in persuading these men to leave their papers to a responsible depository
where future students may consult them.
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.


Those 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 choice,
the interview process has widened to include some sixty-odd persons,
most of them officers or staff members of the Board or banks. The
long list includes:
Daniel W. Bell
Dr. Karl Bopp
Joseph Broderick
J. Herbert Case
Jay E. Crane
Robert W. Fleming
George L. Harrison
E* A. Kincaid
R. C. Leffingwell
Walter S. Logan
and many others.

Eugene Meyer
Carl E. Parry
Leslie Rounds
John Sinclair
Walter W. Stewart
Benjamin Strong, Jr.
Woodlief Thomas
John H. Williams
Walter Wyatt
Roy Young

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 are 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 moments,
and information which was unique in itself. But it quickly became 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 later interviews, with full confidence established and much
more study accomplished than has been possible in three months' 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 benefit
of the main phase of the proposal.
The comment of a former Reserve Bank Governor was, "You're
asking me to open doors long ago shut. They open hard." Any historian going under the auspices of this Committee to discuss a vital

point with such a man will find his way much easier because the preliminary door-opening has been done.
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 personalities, " a *'bibliography of basic materials" 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 working 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 Library 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 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 and 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

This work has been done under the Committee's 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 with a staff of three assigned to this work by the Bank
from among its own personnel (their salary costs paid by the Committee),
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.
The co-operation of the Board has from the start been prompt and
generous. All doors have been open, including library and files, and the
research staff has made a large and valuable contribution to the bibliography. Co-operation with the Banks was established when the Chairman of this Committee, President Allan Sproul of the Federal Reserve
Bank of New York, sent to the Presidents of the other eleven Banks a
personal letter explaining the Committee project and inviting their
interest. Since then, material bearing on the local histories of the
individual banks has been arriving in response to specific requests.
Meanwhile the New York Bank, like the Board, had opened all doors
and created for the Committee's staff an atmosphere of co-operation
which has both facilitated the work process and constituted an important
financial contribution to the project. It is already apparent that
regional divergences and developments form a rich field for research
in any comprehensive study of the System.


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 design has loomed larger
and more complex with every day'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.


are as many ways to formulate the inajor project 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 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 as submitted represents those aspects of the grand design
on which the Committee is agreed.


for a
Grant to Study and Write
The History of the Federal Reserve System

In January 1954, the Rockefeller Foundation made a grant for a
pilot project leading toward a history of the Federal Reserve System.
The immediate end was to find out what materials were available for
such an undertaking, materials not only in the sense of papers, but
also of the living memories of men active in the early days of the
That task has been carried on since January 15th. It has yielded
extraordinarily good results (a report of its findings to April is appended),
and there is every reason to believe that an even greater harvest of
papers and memories lies waiting to be gathered.

The Committee

feels that this has proved to be in the best sense of the word a pilot
project. In addition to exploring papers and memories, it uncovered
that sense of personal struggle and accomplishment which is the living
core of any institution. It enlisted interest and it ensured co-operation
for the future. It points the way very surely to the next and much
bigger task which lies ahead, and for which the Committee now asks
the consideration of the Foundation.

The Task
In calling itself the Committee on the History of the Federal

Reserve System, the group presenting this proposal defined its
primary purpose. But the discoveries and contacts made and the
discussions held 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 Reserve
System - - it is an appraisal of one of the most extraordinary inventions
in this democracy, a review of experience in its functioning, an analysis
of its performance illumined by the papers and the memories of men
who helped develop it and who took part in its operation. The episodes
around which conflicts swarmed, and out of 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 many more which have been suggested from
time to time 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 the experience of the Federal Reserve

Why Important?
The importance of the subject is, however, greater than 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
are commonly considered the somewhat narrow confines of the banking
(a) Among the innovations in government mechanisms which
Americans have brought about during the twentieth century, the Federal
Reserve System occupies a unique position, and not only because of the
exceedingly important functions which it is called upon to perform.
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 temporary Congressional and narrow Executive
pressures, as well as pressures from private finance, while maintaining
its responsiveness to the general economic purposes of the Government.
In periods when it has been forced to yield to such pressures the public
protests against such yielding have been continuous until the pressures
have softened and the balance has been restored.
(b) Writing in 1946 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
money 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 been, but never before had
there been an economy that expected the majority of its people to be
totally dependent upon the continuity of a stream of money income.'*
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 a 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 good; 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
of these experiences would form important chapters in both monetary
and economic history, and in our striving to develop an economic

systein in which increased public participation will not stifle private
(c) In the practice of the functions laid upon it, the System has
enlisted and trained staffs whose skill and devotion to the System's
work stands in notable contrast to that of some governmental institutions or agencies. Not only has this institution weathered forty
years of political storms; 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 which can be applied to problems of organization in
both governmental and private affairs, not directly concerned with the
process of monetary management.

Issues to Be Treated
The questions which this study would illumine fall into two

categories. There are in the first place what might be called the
technical issues, some theoretical and some matters of operating
policy, which have absorbed the System's attention at one time or
another in its life.

These appear in private papers and in annual

reports, they are high-lighted in Congressional hearings; but the
questions which an informed and impartial student might ask are

usually diverted by the exigencies of the moment. Enough time has
elapsed, for instance, since control of the discount rate was first used
by the System as a tbol of monetary policy so that its importance under
varying conditions can be weighed and studied.

The same thing is true

of changes in reserve requirements, and of open-market operations.
Yet there is little knowledge of them even among an informed public,
and controversy still surrounds them within the banking world. Some
of this ignorance could be dispelled and some of these controversies
might 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
without the banking system. For example, how did it come about that
such a mechanism of monetary control, uniquely adapted to our needs,
was established?

By what methods and devices has it endured and

How are the skills, competence and individual freedom of

its staff, unusually high when compared with most governmental or
private bodies, maintained and encouraged?

How has the relationship

between regional Reserve Banks and the Board of Governors, between
staff members and policy-making officials at the Banks and the Board
been worked out? How can the System's role in the world of government and in the economic world be best defined and understood?


are the lessons of this role for other organizations, in or out of government?

How are decisions of the Board of Governors, of the Federal

Open Market Committee, of the Boards of Directors of Reserve Banks,
with their high degree of importance in American life, arrived at?

How does the System influence the operations of the whole monetary
mechanism at moments of crisis?

What lessons are there in the

relations which prevail between Board, Reserve Banks and Member
Banks, and how are those relationships evolving?

Scope and Method of Inquiry
The study which we propose would cover the entire Federal

Reserve System, including the Board and the twelve regional Banks,
from their inception. Much has been written on the events, crimes
and personalities which led up to the founding of the System, but even
this needs restudying in the light of newly discovered material, and
then it needs to be carried forward into decades of operation.
We would therefore set out to make a complete search for the
material and the people concerned in Federal Reserve legislation,
theory and operation, going back at least to 1907 when the Aldrich
Commission functioned.

From 1913 forward, we would undertake to

bring records to light and use and 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 influential men on the Board staff; Governors,
Presidents, and officers of Reserve Banks; Members of the Federal
Advisory Council, the Federal Open Market Committee, and other
related bodies; men in academic life (as, for example, Oliver W. M.
Sprague and John H. Williams) who have been in close and influential
contact with the System during its years of growth.

The Committee considers that an important part of the whole study
is this effort to encourage those who took part in the System's development to tell the story as they saw it.

Complete objectivity is not an

easy ideal for any historian, and it becomes even more difficult when
the history being dealt with is recent.

The recording of contemporary

memories is an important contribution toward that ideal.
The method to be used is that which has successfully been
developed during the pilot phase of this study. It includes visiting
Board and Banks, both to search out men who remember early days,
and to ascertain how records are kept and what local records are
available; the establishing of the names of the dramatis personae,
the recording of brief biographic data concerning them, the request
for interviews if they are still alive, the 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 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, and the writing process. 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.
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, 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 must read those 28
volumes and evaluate them for the purposes of any comprehensive
history of the System.
The work to be done on other collections, not yet sorted or
classified, is more extensive. 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.


H. Parker Wilis, Jr. would take time from his work at the Federal
Reserve Bank in Boston to survey his father's papers if this were

The Toldenweiser 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 small examples of the large
amount of work which remains to be done in the first two processes
we recognize 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 be 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 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 from than the one who starts after the research
process is finished and filed away.
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 endeavor:



Archival and Research

To continue and complete the visits to Board and Reserve
Banks, the search for records, the interviewing, the hunt
for papers and the recording of discovered material which
was started during the pilot phase.

These archival activ-

ities lead to, and should be considered an integral part of,
the research activities.

Their purpose is to contribute

speed and accuracy in the research process.

to continue and complete the biographic, bibliographic,
and chronological master files which were started during
the pilot phase.


to make available to qualified students that part of the
Committee's research material which is pertinent to
their inquiries.


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 example, the Hamlin papers must be read and
evaluated; the Carter Glass papers at the University of
Virginia, the Willis and Goldenweiser papers all need
work as described in the report on the first phase.


classification and study is essential, but funds would have
to be provided.)



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.

Such men as Roy Young and Walter Wyatt

of the Board, George L. Harrison, J. Herbert Case and
Leslie Rounds of the New York Bank, John Sinclair and
Casimir Sienkiewics of the Philadelphia Bank, Ray Gidney
of the Board, the New York and Cleveland Banks, and now
Comptroller of the Currency are of this type, and there are
many more. Just as the Harvard Business Studies group
finds a tape recorder valuable for catching the living word
in key interviews, so might we profitably avail ourselves of
this technique in selected instances.

The writing and editing fall into three parts : (1)

Monographs. In a study as extensive and important as
this the monograph plays a key part. In 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 may 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 E. 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 on
"Reserve International Financial Operations in the
1920's"; Lester V. Chandler, also of Princeton, would
like aid to write a long monograph or a short book on
"Ben Strong, Central Banker"; either of two able men,
Dr. Karl R Bopp of the Philadelphia Reserve Bank and
Professor Edward S. Shaw of Stanford University would
be qualified to write a study which might be called "The
Art and Politics of Central Banking." No commitments
have been made in regard to such work. These examples
are, however, listed as showing the kind of work and the
caliber of men which this Committee would like to
encourage with access to materials and use of funds.

Major Works
Of these the definitive history is the core of the
project and the one toward which we continue to point
our 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 major
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
commercial channels and would need from 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 is 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. We also
think that a volume of essays on crises in the banking
world, following the volume by Oliver M. W. Sprague 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.
Editing and Publishing of Documents
The Committee's staff has noted with interest the
British example whereby documents basic to central
banking in England, including key speeches and memoranda as well as legislation, were edited and published


under the title, Select Statutes, Documents and Reports
Relating to British Banking, I83Z-1928, by T. E. Gregory.
Comparable material basic to central banking practise in
the United States is scattered, and might well be gathered
in some such volume. It has also heen suggested that a
comprehensive annotated bibliography covering both
published and unpublished works bearing on the Federal
Reserve 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
may prove so valuable as to deserve publication. No
decisions have been made in this field, but it is a phase
of the over-all study which the Committee may wish to
Use 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 may also present a problem.
The existence of this problem must be recognized, but the Committee is confident that a solution will be found which will neither hamper
the project nor strain either the willingness or the ability of individuals
or institutions to continue their co-operation. It should be made clear,

however, that neither the Federal Reserve Board nor any of the Reserve
Banks are committed to make available any material which in their
judgment should not be published,
VI. Organization, Personnel, and Budget
(a) Organization
The grant for the pilot project was made to the Brookings 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.
The Committee's supervisory functions were exercised in two
ways: first, specific problems were decided either in Committee
meeting or in special conferences with members particularly expert in
those areas; second, general supervision was assigned by the Committee
to its Secretary, Donald B. Woodward, at one time on the Board's staff,
now Chairman of the Finance Committee of Vick Chemical Company.
The other members of the Committee have also shown steady and
vigorous interest in the pilot project and have been generous with time
and advice when called on for consultation.
The daily work was carried on by a small staff headed by Mildred
Adams as research director, assisted by Katherine McKinstry (who
shared her skill as research assistant and her time between the work
of this Committee and that of Dr. John H. Williams, consultant to the
Federal Reserve Bank of New York) 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

This same plan of organization, with some modifications, is the
one we would recommend 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.


problems in that relationship will arise when the publishing stage is

These problems do not, however, call for immediate solution

and their resolving will not disturb the work of this Committee.
The Committee's function, and its relation to the small staff,
would continue along established lines,, The Committee is composed of
men experienced in the monetary field, and strongly interested in the
development of economic studies.

The Chairman, Mr. Allan Sproul,

has spent his working life within the Federal Reserve System.


in 1920 in the Federal Reserve Bank of San Francisco, he served there
for ten years and then moved to the Federal Reserve Bank of New York.
He has been President of the New York Bank since 1941.
Mr. William McChesney Martin, Jr. comes from St. Louis, where
his father was for a considerable period head of the Federal Reserve
Bank of St. Louis. To a brief experience in the Federal Reserve Bank
of St. Louis, he added ten years of activity in the investment business.
He was President of the New York Stock Exchange from 1938 to 1941;
Chairman and President of the Export-Import Bank in 1946; U. S.
Executive Director of the International Bank for Reconstruction and
Development; and Assistant Secretary of the Treasury in 1949. Since

1951, he has been Chairman of the Board of Governors of the Federal
Reserve System.
Mr. W. Randolph Burgess has had a lifetime of experience in
control and commercial banking. He is now Deputy to the Secretary
of the Treasury.

(For more complete details, please see page 17 under

Dr. Robert D. Calkins is now President of the Brookings Institution. Banking was an early interest and the subject of his thesis
submitted for a master's degree. He got his doctorate in 1933 and
went at once into academic work, lecturing on economics both at
Stanford and at the University of California (Berkeley), where he became Chairman of the Department of Economics and then Dean of the
College of Commerce. Between 1941 and 1947 he was Dean of the
School of Business at Columbia University, and from 1947 on he was
Vice President and Director of the General Education Board.
Dr. Calkins served for seven years as Director of the Federal
Reserve Bank of New York.
Dr. Walter W. Stewart also has combined academic with banking
and investment experience. Professor of Economics at Amherst
College from 1916 to 1922, he then went to the Federal Reserve Board
as Director of the Division of Research and Statistics. In 1928 he became Economic Adviser to the Bank of England; in 1931 he was
appointed American Member of a special committee of the Bank for
International Settlements to look into German reparation obligations
under the Young Plan. He was for some time President of Case,
Pomeroy and Company, an investment house. Trustee of the

Rockefeller Foundation, Chairman of the General Education Board,
Professor at the Institute for Advanced Study, he was in 1953 called
to Washington to become a member of the Council of Economic
Mr. Donald B. Woodward, Secretary of the Committee, has had
a varied experience in monetary affairs, including work on the Board
staff and writing about System affairs for the Wall Street Journal,
Business Week, 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 Company.
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 Chairman. The identification of
interests between the Committee members and the work being done
will make fOT continuing surveillance on the part of members.
(b) Personnel
The major 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, has
indicated his willingness to occupy this post when his present work

at the Treasury is completed. An active member of this Committee,
he can bring to the post an extraordinary combination of practical
experience in monetary affairs and scholarly accomplishment. A
graduate of Brown University, he earned his doctorate at Columbia
in 1920 and went at once to the Federal Reserve Bank of New York.
He became Deputy Governor of that Bank in 1930. To this experience
in central banking he added fourteen years' experience in commercial
banking as Vice Chairman of the National City Bank and then Chairman
of its Executive Committee. In January 1953 he retired from the Bank
to go to the Treasury as Deputy to the Secretary.

The breadth of his

scholarly interests is indicated by the fact that he has served as
President of the American Statistical Association and the Academy of
Political Science, as well as of the American Bankers Association.
Mr. Burgess is editor of a volume of papers by Benjamin Strong,
Interpretations of Federal Reserve Policy, and author of The Reserve
Banks and the Money System, which has for years held an outstanding
position as a textbook and reference book in this field.

He is a Fellow

of Brown University, a Trustee of Teachers College (Columbia), and
of The Carnegie Corporation.
For obvious reasons this choice cannot yet be publicly announced.
Mr. Burgess has from the beginning of the pilot phase been an active
participant in Committee discussions and will so continue during the
remainder of his service at the Treasury.

During that interim he will

continue to be assisted in Committee matters by Mr. Donald B. Woodward,
Secretary of the Committee, who has acted in a supervisory capacity

during the pilot phase (for other details see page 18).
As research director, Mildred Adams who initiated and carried
through the work of the pilot phase, will continue during at least the
early period of the main study. Miss Adams (in private life Mrs. W.
Houston Kenyon, wife of a New York attorney) is an economist by
education and a journalist by training. To experience in feature
writing for the New York Sunday Times, Barron's Weekly and various
other magazines she added editorial writing for Business Week and
The Economist (of London). She has recently been United Nations
correspondent for the latter publication.
In order to do the amount of visiting of Reserve Banks which
the study needs, Miss Adams must have an assistant capable of
accepting more responsibility for administrative detail than can be
delegated to Miss McKinstry if the part-time arrangement for the
latter's services prevailing under the pilot project is to continue.
The Committee's aim is to find a well-equipped and exceptionally able
research assistant, with the necessary academic training in monetary
matters 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 forward.
Miss Adams would then be in a unique position to embark upon a major
writing part of the project.
In addition we would need a secretary with research experience.
(Miss McKinstry is so exceptional that we would like to keep her, even
with the handicap of part-time service.) It may be necessary to add
secretarial help in Washington, and provision for this contingency will

be made in the budget.


There is reason to believe that offices and equipment assigned
for the pilot project by the Federal Reserve Board in Washington, the
Brookings Institution, and the Federal Reserve Bank in New York will
continue to be available.
This provision of rent-free quarters and equipment (the Federal
Reserve Bank imposes a very 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 and Banks are also making important contri-

butions in the form of material and of research assistance.


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 specialized knowledge and time for discussion.

The Committee's debt to librarians, heads of research de-

partments, 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 form 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
The Board and the twelve Reserve Banks have evidenced continuing interest.
staff members. /The Treasury files are open to us, the Manuscript
Division of the Library of Congress and interested people in 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 System and
other groups, contributions which in themselves attest to the importance
of this project, further funds will be needed to carry on this study.
The 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 high degree of flexibility be allowed the Committee in
allocating 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. No allowance was made
by Brookings for the costs of handling the short-term pilot project;
they must, however, be reimbursed for their costs in handling the
longer operation, and due allowance is made in budget estimates.

Budget Estimates, June 1, 1954 to May 31. 1959
Earlier Period (Two Years)
Annual Salaries and Research
Annual Travel Costs
Annual Brookings Handling
and Overhead
Annual Other Expenses

Later Period (Three Years)


Annual Salaries and Research
Annual Travel Costs
Annual Brookings Handling
and Overhead
Annual Other Expenses


$ 67,000


Total for earlier period (2 years)
Total for later period (3 years)
Total for 5 years

$ 109,000
. 201,000
. .$ 310,000

The arithmetic in this table is worked out for two phases.
Actually we cannot tell at this moment exactly how fast the work will
proceed, how much overlap there will be, and when competent people
will be available to undertake writing assignments. Therefore, we
would ask that the expenditure curve be left flexible.
VII Request
In view of these estimates, the Committee respectfully requests
that for the purpose described in this proposal the Rockefeller Foundation grant $310,000 to be expended in the five years between June 1, 1954
and May 31, 1959.
The grant should go to the Brookings Institution with the understanding that its responsibilities and those of the Committee on the
History of the Federal Reserve System toward the project are mutual,
and that an informal 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 suggests the richness yet uncovered, is appended.
Walter Bagehot said, **Money will not manage itself." To which
the late Emanuel Goldenweiser 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 and in promoting economic stability will be even greater in the
future than it is now. It is the hope of this Committee that the study
proposed will contribute to the better understanding of that role.

April 20, 1954

fi, ,39.

April 2, 1954

Mr. Joseph H. Willits
Rockefeller Foundation
49 Vest 49th Street
Jlev York 20, lev York
Dear Joes
As you have probably heard, Miss Adams has turned up a
great wealth of Material bearing on the History of the Federal
Reserve System, The Committee hopes to have some definite
suggestion for you shortly*
Meanwhile, it has seemed to us that regardless of vhat
recommendations are made by the Committee, it may be desirable
to have Miss Adams continue beyond April 30 the kind of
exploration which she has been carrying on during the last
few aonths. The present grant of $10,000 runs only until
May 1* If this grant could be extended for another month
or so it would facilitate the continuation of the very fruitful work that Miss Adams has been doing*
Would you be willing to consider a request for an
extension of this grant? If so, we would be glad to file
such a request within the next week or 10 days*

Sincerely yours,



February 9,

Mr. George £, fan Dyke
Office of the Comptroller
The Rockefeller Foundation
49 Vest 49th Street
York 20, Mw York
Dear Mr. fen Dyfcsi

6A 8g 5404

I should like to adaaovlsdgs roc«ipt of your
cheek for $10,000 In full pftyntnt of the grant for
an exploratory atuily «f hiatorical naterlala
to the Federal Reserve System. It ia our \mder*taiidin<
that this grant i t available for uae until April 30f
1954* Shortly after that date v» will furniah a aUteaent of the expenditures under the grant aad refund any
uftexpeaded balance of the fuadt.



Mr* Mkmtm


H. M A U I I I M


( i l l . ! . H I I I- , ( C M PI K..I.1.KH


L \ K (• , A S S I S T A N 1

i \t V I «• •!. I HR

February 5, 19^U

GA 5° 5UOU

Dear Mr. Calkins:
In accordance with your letter of January 29 to
Miss Rhind, we are enclosing herewith our check in amount of
$1O,OCC as payment in full of the above grant for an exploratory study of historical materials relating to the Federal
Reserve System.
As you know, the grant is available until
April 30, 195U, and on or about that time, we shall expect to
receive a signed statement of expenditures, together with a
refund of any unexpended balance of funds.
Yours very truly,

Mr. Robert D. Calkins
The Brookings Institution
722 Jackson Place, N. W.
Washington 6 D. C.


January 29,,1954


OA SS 5405

Miss Flora A. Rhind, Secretary
The Rockefeller Foundation
49 West 49th Street
New York 20, New York
Deer Miss Rhind:
I should like to acknowledge and thank you for your
letter of January 21 advising us that the Rockefeller Foundation
has made available the sum of $10,000 for an exploratory study
of historical materials relating to the Federal Reserve System.
This grant is to be used during the period ending April 30, 1954
end will be administered by The Brookings Institution in collaboration with the Committee on the History of the Feder&l Reserve
System •
We shall be glad to have you make a payment at this
time of the full sum of $10,000 with the understanding that any
unexpended balance will be refunded to the Foundation,
We are very grateful to the Foundation for this grant
and we feel confident that a very worth-while exploration of
these materials can be made during the next few months.
Sincerely yours,


Dr. Donald 3. Woodward
Miss Mildred Adams
Mr. Akers
Miss Maroney
Mrs. Wilson



January 21, 195k

Dear Dp. Calkins*
I hart the honor to inform you that action has been taken
by the officers of The Rockefeller Foundation Baking aTailable the
sim of $10,000, or as such thereof as nay be necessary, to The
Brooklngs Institution for an exploratory study of historical Materials
relating to the Federal Reserve System. This grant is for use during
the period ending April 30, l£2i, and it is our understanding that it
will be administered by The Brooking* Institution in collaboration
with the Committee on the History of the Federal Beserre System, of
which Mr* Allan Sproul is chairman*
We shall be glad to make payments to meet your convenience*
Arrangement f er this may be made by writing to our Comptroller* Any
balance of the funds unexpended em April 30, 1 9 & * will rerert te the
Foundation* At the end of the period for which the fund has beem
made available ve mUall appreciate receiving a statement of receipts
and expenditures* Kmy we request that when eemmunleatlmg vlth the
Foundatlom concerning this grant, you quote the reference number
•0A SS » 0 5 . *
A brief public announcement of this grant will be made in
the next quarterly report of the Foundation* Ve are enclosing, as

Dr. Robert D. Calkins

- 2 ~

January 21, 1°5U

a matter of routine, a printed statement of Rockefeller Foundation
policy respecting the announcement of grants.
It is a pleasure to report this action to you.
Sincerely yours,

V ~ r! "7V

Dr. Robert D. Calkins, President
The Brookings Institution
722 Jackson Place, N.W.
Washington 6, D.C.
Copies tot

Q:. Donald B. Woodward
Miss Mildred Adams


7 , 1954

Dr. Jos«*>h 3* Wililt*
Tb« k>okof©ii«r foundation
49 Wost 49th Stroot
York 2J, Bow lork
Do»r Dr,

Oa Jamury 4, Mr* Dotwdd 8 , Voo4^tr«i Mbalttoti to you «.
for *a o&ploratory ^roj*ct Intended to ooii*et y appf«d»«# aad edit
in this I'
v l l i b* very

grs&t to th»
i t In

ln«tlWtioo i» rmry much
to r*cei*« » grtat for the
l a foxaulttlttg *a<: Owwiuctiai
l be giad Vo

Sprmd I*


, roj»ot,

h*t v« will
ili*t©ry of V*

coat of |169OJO« I t
vtt;i Mr* WockhMJtl i t
xt^ftdia* frosi now o a t l i
would i>9 JKi-j« f o r
of the gi%nt for ta*t poriod woulu be $109000»
»oath4 *t «s
ia your di»oaft«i«

th&t th«
l t «w.t tn»t

OB aati mtiml Mzlo* o f

>,roj*4t by i«t« April, uteiob «i£ht b« oo»»ivJ»rod by you «t LH» N^y aooting
This oitMigo ia tuo orlgi»»l plwi« f a l l / ttaet* vitis ay approvnl* W ateail
b« ^.iaii to r*o«ivo tho ( M a t umior ti^so t t m i , Arr*a±<mmits tr© a*.l« to
thm gr&iit i s
Lot » • o&y afftin th&t I doopl/ a^prooi^vto /our int«r» t in tnia
ftubjoet* Braokin^ii i* glad to ooop«rat» l a t h i s
With w y b««t wi»boof