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COMMITTEE ON THE HISTORY OF THE FEDERAL RESERVE SYSTEM 33 LIBERTY STREET, N E W YORK 45, N E W YORK TELEPHONE: RECTOR 2-5700, EXTENSION 286 ALLAN SPROUL, Chairman With cooperation of W. RANDOLPH BURGESS DR. ROBERT D. CALKINS WILLIAM MCC. MARTIN, JR. WALTER W. STEWART DONALD B. WOODWARD, Secretary MILDRED ADAMS, Research Director THE BROOKINGS INSTITUTION 722 JACKSON PLACE, N. W. WASHINGTON 6, D. C. May 26, 1954- Dear Mr. Woodward: This note is to thank you for your statement of expenses for your trip to Washington, D.C., on May 11th, which we had not previously received from Mrs. Williams. I expect to submit Miss Adams's expense account for the month of May next Tuesday and will include the items on your account as well, so that she may reimburse you shortly for them when the regular monthly check comes in from Brookings. I trust this arrangement will suit you. Sincerely yours, Research Assistant Mr. Donald B. Woodward 122 East 42nd Street New York 17, New York May 2U, Miss Mildred Adams Committee on the History of the Federal Reserve System 33 Liberty Street New York, k$, New York Dear Mildredj I agree with virtually al} of the suggested changes in the letter to Riefler, As Mrs, v i llains is away and we are overwhelmed, I wonder if you could have this letter typed in your office and sent to me for signature• In looking over the papers, I find the item of my expenses for the trip to vashington, Tuesday, May 11 in the file. Could you tell me if Mrs, Williams typed this and sent it to you or if you have not yet received such a statement? Cordially, Donald B, Woodward DBW/bai att« A * May 17, 195U Miss Mildred Adams Committee on the History of The Federal Reserve System 33 Liberty Street Hew York fe, K.Y. Dear Mildred: 1. I return herewith your minutes of the meeting on May 11. I have suggested a small change on Page 2 and another on Page 3» I t seemed to me you did an adteiiraliLe job, quite unimpaired by the difficulties under which you labored. On further thought i t seems to me these minutes had just as well go out as soon as you can conveniently get them out. The Committee should have a record of what i t did, whatever i t may wish to do after May 21, 2. I enclose a draft of a l e t t e r to Win Riefler in accord with our telephone discussion on Saturday, Won*t you plaase delouse i t and return to me whereupon I will get i t out. 3. I enclose a note on expenses for the trip May 11, With melting admiration. Cordially, DEW:lw Enclosures Hay 25)', 19ft Mr* Randolph Burgess Deputy to the Secretary Treastsry Department Washington, D.G. Dear Randy: I talked to Mr. Sproul who i s dubious of the matter or availability of Roelse but will explore the matter with him arid will l e t me know. Cordially, Donald B. woodward DBW/bam 6, ;£L 0L May 25, 1954 To: Messrs. W. Randolph Burgess William McC. Martin, Jr. Walter W. Stewart Donald B. Woodward, Secretary Miss Mildred Adams, Research Director From: Robert D. Calkins Herewith is a letter from Mr. Sproul approving the arrangement between the Brookings Institution and the Committee. In order that everyone be reminded of the understanding that the Board and the Reserve Banks may refuse to make available any material which in their judgment should not be published, I am sending herewith a copy of Mr, Sproul's letter. Enclosure o p Y FEDERAL RESERVE BANK OF NEW YORK New York 45, N.Y. May 21, 1954 Mr. Robert D. Calkins The Brookings Institution, Washington 8, D.C. Dear Bob: The memorandum of agreement between the Brookings Institution and the Committee on the History of the Federal Reserve System, which you sent me under cover of your note of May 14th, seems to me to carry out the decisions of the Committee at its recent meeting, and I have no changes to suggest. Just to be on the safe side, however, I repeat a statement which appears in our application for a grant from the Rockefeller Foundation; It should be made clear, however, that neither the Federal Reserve Board nor any of the Eeserve Banks are committed to make available any material which in their judgment should not be published/' While we want to cooperate in the discovery, classification, and indexing of materials in our records and files, and in their use, we shall have to retain a veto over the publication of confidential Information, particularly when it relates to persons or actions in recent years. Sincerely, [signed] AJLUVN SFROUL Allan Sproul May 2k, Miss Mildred Adams 3U0 Bast 72nd Street Sew York, 21, New York Dear Mildred: I have just found what looks like another interesting individual with memories of two interesting phases of the fbderal Reserve history. His name is Carl Prickett, now retired and living in Greensboro, North Carolina. In the early days of the system, Mr. Prickett was one of the prominent individuals, I believe, in establishing the examination system and as you know, bank examinations have been one of the critical spots ever since the establishment of the system. Then later he occupied a critical role in the examination of branches of isember banks located in foreign countries during the early days of the depression* This may be the piece to gut a good deal of light on that great problem of the system "its relations abroad". Would it be worthwhile to put one of your sleuths on the job of getting a more detailed identification of Mr. Prickett? I talked with him briefly and he is enormously interested in the project0 He is in Sew York intermittently and would be very happy to talk with I can make arrangements as may be desired. Yours. Donald B. Woodward P.S* Mr. Prickett days that the early members of the Board made it a practice to hire very competent make secretaries (perhaps the idea came from Justice Holmes, though I didn't ask) o He says that there are several of these individuals now in prominent positions in Federal Reserve Banks and elsewhere* He thinks that it would be fruitful to check the names of secretaries and assistants to the Board members and this sounded interesting to ae* I5BW. COMMITTEE OK THE HISTORY OF THE FEDERAL RESERVE SYSTM May 24, 1954 Messrst Allan Sproul W. Randolph Burgess Robert D. Calkins William MeC. Martin, Jr. V Walter ¥. Stewart Donald B. Woodward At the meeting on May 11th two possible projects were given provisional approval with the understanding that the Research Director would get more details for Committee consideration after May 2Oth« Requests from Professors Chandler and Kincaid giving details of their respective projects are enclosed. The Chandler project for a study of "Benjamin Strong—Central Banker11, as approved provisionally on May 11th, was then explained as including *& possible subvention of fl2,GGO to $15,000 plus typing costs and publishing aid} it would begin in February 1955 and continue for at least a year*. In his detailed presentation Mr, Chandler asks for |17,000 which includes estimates for typing and publishing costs. He would like to start work in September 1954 &nd would hope to do the job in two years time* The Kincaid project for sorting and classifying the Carter Glass papers, as provisionally approved, was seen as *a smaaer1 s work of arrangement and inventory by a graduate student under the supervision and with the advice of Dr. Kincaid11. Dr. Kincaid1a proposal for using three students is more expensive, but it would sees more realistic, and with a better chance that the sorting, classifying and listing could be finished this summer. I have checked independently on the students Dr. Kincaid has suggested. Mr. Edel is writing his thesis on Parker Willis, and in the process has been looking through some of the Glass papers. H© is rery familiar with the ©vents MMft the periad they cover, and is believed to work well under Dr. £incaidfs guidance. Miss Thomas has a good reputation for intelligence, ability and persistence. Mr. C&rdwell is teaching out~ side the University of Virginia, but writing his thesis for submission to the Economic Department there. Otherwise he is not known to ay informant. All three are believed to have studied trader Dr. Kincaid. The sums he mentions are solely for costs of personnel, including his own services. Assuming a three months period running from June 15th to September 15th (which covers the vacation stretch during which this work is projected) the costs as given total as follow*— Totals for 3-aonth period 1 student at $225 P«r month $ 675 1 student at $250 per month 750 1 student at ISO a week 1040 $2465 Services of Dr. Kineaid 2400 Stationery and incidental® 135 $5000 -aProfessor Chandler leaves for Europe June 22nd and would sppreei&te a decision "before then. Br, Kineaid's project ought to be started by June 15th, Meanwhile he is holding his chosen assistants by force of persuasion. Under these circumstances a speedy decision, particularly on the smaller Kineaid matter, would be greatly appreciated, ¥© have three weeks in which to get further detail* from Professor Chandler or suggest revisions of his plan* but Dr. Kineaid would like to be able to give his assistants a final answer this week. Mildred Adams Hesearch Director MISC. 14O B (Misc. ,40 B.,-3OM-6.53) tmiVMSITY OF James Wilson School of Economies Melntire School of Business Administration University Station Charlottesville, Virginia May 18, 1954 Miss Mildred Adams Research Director, Coasaittee on the History of the Federal Reserve System, 33 Liberty Street New York i5, N. Y. Dear Miss Adamss Xou desire w® to submit an estimate of the probable cost of sorting and classifying the Glass papers, &.nd I am now submitting what may be considered a progress report, I have tentatively engaged the services of the followingJ 1. Miss Anne Thomas, a graduate student* She will undertake the work of sorting sad classifying, and in addition will do some typing. She would, require a compensation of per month. !« Mr, Saisuel P. Cardwell, a second year graduate student, who would expect a ©alary of per month, 3, Mr, William C. Edel who has just completed his work for the Masters degree, and has taken a position for the summer. He is willing to give up this position and work with i$e this awmer for a period of at least ten weeks for per week. Moreover, he is willing to continue the work, if need be, after the opening of the fall term in September. However, it would be necessary for him to have a. leave of two weeks during July or August because of military service. He is the most experienced of the three and is most familiar with the Glass papers, I could rely upon him to serve in my place in a pinch. U* I am uncertain what price to place upon my own services. The nearest approximation is the salary I would have earned bad I taught in the summer school. In that work I could have earned' for the first term, and probably a like amount for the second, (Total, }• MISC. 14O B (MISC. 14O B.1-3OM-6-53) 5. fh®?'« will be some incidental ejqpenseg for certain supplies and materials to be obtained from the University Library* Mr. E&el can also do typing so I doubt if I will have to hire another person for typing, I cannot make an estimate of the duration of this madertaking but I have the impression that the major part of it will be completed by the opening of the fall term. If there are some odds and ends remaining then, the three parsons mentioned above could, under the guidance of Mr, Berkeley of the Library, probably clean up the job. Do you contemplate any sort of deadline? It in possible that I could find one more additional person to work on this project, if necessary, though I doubt if that would expedite the vork proportionally• I have not actually engaged the three persons named above because I will not know until after yo\ir meeting on the 20th vhat the outcome of the project will be. Sincerely yoursf /•/ £. A. Sineaid EAIilc E. A. Kineaid, Associate Director, School of Business Administration, INCtTON MHIftHfl MISC. 14O B (MISC. i4o B.I-3OM-6-5S) P r i n c e t o n , ?§ev J e r s e y Department of Economics nnd Social Institutions May 18 # 1954 Mist* ttUni Adam* CMttittee on the History of the Federal Reserve System 33 Liberty Street Nil York 45, »• T. Dear Hiss Adams$ Enclosed is & description of my proposed study, "BenjamiB Strong—Central Banker," «.&d « formal request for « grant to finance ti?e study, I am acutely conscious of the fuet that this description tad request lenrv aiany question* useaswered. I hsir©, hovever, triad to provide A* Much laflilBillim I I I can «t this early stage. If you or others desire any further Inforastion, I shall do my best to provide it. I nov find that I shall b© leafing for Europe on June 22 end returning on August 23. I shall apDreciata receiving SOf information that you f©€-l frs*e to send before my <tepsrtm<S c»st©, Siacf*rely yours, /*/ Lester V. Chandler Lester V. Chandler LVCJJ enc. A rmtOSSb 8T0CT, TJHTATIVHUT MSTITLKB, gy Lester V. OF Till STOW Tve .central interest of this study will b# %hm role played by BenjaaiB Strong, as heed of the federal B Bank of Mew York fir«©s§ th» tta* ©f I t s ©st^bXI^haant uotl.1 death in 1928, Is ib* toTWulatioo »»«?• ftdainlstz^tlon of ®oa#t®ty pulley f teoth In this ©oia«try &n& &hroBA* I t will, of course, d«rr6t# such stt#ntion to Mr. Strong Mi « person— b&ekg^ouad, hit traioiog Mi *xp$ri<H*e* b«for« 19H # ld*A« fe#for« fe^eomlsg li##4! of the S«w Terk JT«d*raX th* coaplex ©f psrsonal ehuraetdrlstlcs indleatiag of mRa1* tk^t h« D«S« But I t will d© to ht» prof«ssloaAl 11f#, hi* inp&et on th* Federal and #oooof6ic affairs, and th« iispsct of th# Fedentl | s on hla and his ides,», fh* orlglocl Federal B»s«rvs Act «ad i t s earlf left f*ooa for ame-h flexibility* Only in the a e t t t#r»s die i t imiieate tb« obj©otiT«ji ©f Federal Heserre policy, the iastyuMtants to be used to att&ln selected objectives, aad tlie loefetion of polloy-ssaklag aad powers. Within mtfo * broad legislative tmdenreat ooatlftootts development iSl evolation In rssponsv to the aw.r«h of eoonoaic ^refits, changing l<Jeas, mud tfc® iat#rplay df aaay personalities. I balism* this study em M i l | substantial oontrlbutioa to our «ad^rstaadieg of MISC. 14O B J (MISC. 14O B.I-3OM-6-53) %h® evolution of IMM& Beaerv© practice and policies during tfee first fifteen yeers. Thcmgli Benjiualii Btroag will Iw i t s footl pointy this study will ele&rly have to touch ©a swmy thing* that v i l l also be covered bjr th& projected 0T«r^-all higtory of the F«6«r»l Bj»0#rv© -«nd bj th« laore sp€ f bowerer, I consider an adyg^t^ge, for i t v i l l to eo»pare th« poiats of Tiesw of At tbis st«ge i t i s impossible to for©aa»t loi^Md $^idly v i l l &*• I as sum, it vill PLAH OF I f tbie application i& gruntta, study so l a t e r than September 1954« 1 hop* t© begin the From that tia» u&til February 1, 1955 I vo«l<i work p«irt->tis« on i t , doing ^efefrouisd reading* loc?iting M l beeoalag familiar with source aaterlitlt, m& so cm, Beoaua© I ^«fe «, Xe*re of &b»enee for m tfce &eeo$& t*vm ©f ^h» coming fteadoale y®&r, I emu vork on the #tm«iy full tlm from February 1 to September 1$, 1955* After that 1 *haXl sgftiu have to vork on i t on * p&rt-ti&e bftsis. Though waafa predlotlon i » dimg^rom, X e*ul& finisls the study in a l i t t l e over two I expeet th«,t MISC. 140 B (MISC. 14O B.J-3OM-6-53) to r#Xy primarily ®m the following Q£ nftt«ri«l»t ( I ) published is»t«risl8, (2) tfee 8«nJ«.mia Strosg papers &i the Federal Beserre ganfc o f Sev York, (3) relevant a&terlala at the Bo&r«l o f Governors, (4) MQT pri^at tfeat %im Stroag f a s l l y .may agrwi t o make available, (5) icterrlfnm with p«opl« vho knew Nr, String, I ah«lX <o s#e.te »my otlMr sourer» th»t proaite t ote«f r a i t f o l * My sho®# bus®11 ^oul^ be Prlnoeton^ from vhioh I would cosasiute t o §#v York end make such oth*r tripe m* vould MATTiJM #«tjj»t« t h a t i s *a*mm&9 41ffi««at a t b l s stafo i s that r e l a t i a g t o th« m*t o f the proposed project, Th* f o l l i v i n g fignr#s» sdbdtttMily a© aexv tlaua ( l ) I would r«o«iT<s out of th» gr*nt ooXy ®y otit*of-poolE#t to probably 1^* rath«r SBMXX* (2) I wuXct try to small ®s pdssibl© vitl»o\)t oodot- §aerifie« of •ith«r ovn tim« or of th« ausJlity of th# t t « ^ « (3) I wo«Xd aot *ttppl€»^entaTy fr«atf aad voaXd return &ny unused funds* u MISC. 14O B (MISC. 14O B.I-3OM-6-8S) Costs of the Project 1# My ©*m expenses Meals, hotel®, ete. «¥*y from homo tJ.f0OO $00 2,000 ;• Secretarial 3f000 Salary for trips to Tork while there 3,500 4. Publication costs (siaxi-sua) 10,000 5» fypevritar remtsl, -caper, materials, etc* • . • • • I should like to h«v# yoa consider tfci* as ® fora&l for & gr®&t of #17,000 to finance the study outlined n.bGv«u I shall, ©f course, be glad to furnlsb any further informs-tion th&t yo^ »aj desire. Respectfully submitted /•/ L««ter ¥• Chendler 500 rom MILDRED To ^Ucc . Us 1/ THE ROCKEFELLER FOUNDATION 49 WEST 49TH STREET Mxw Y«wx 20, N. Y. 2lh Dear Dr« Calkinst I have the honor to inform you that at a meeting of the Executive Committee of The Rockefeller Foundation on May 21, 19£ii, action was taken providing up to i'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^ grant He« OA SS $hdk9 and the combined sums are available for the period ending May 31, 19S9. It was the understanding of our Trustees that the project for which these funds were appropriated would be administered jointly by The Brooking 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, 19f>9, will revert to the Foundation, A brief public announcement of this grant will be mad© . in the next quarterly report of the Foundation. There is, however, Page 2 May 2\x, no objection on our part to your aimouneeroent of the t,rant prior to the issuance of the Foundation's report if Tor any reason this appears to you desirable. In this connection we are enclosing, as a matter of routine, a printed statement of The Rockefeller Foundation policy regarding the announcement of grants. It is a pleasure to report this action to you. Sincerely yours* FLORA M. RHIND Secretary Dr. Robert D. Calkins President, The Brookings Institution 722 Jackson Plaee, I«V« Washington 6, D« C. Copy to Dr. Donald B. Woodward o 6, <B722 fatkson May 20, 1954 Dear Don: I had sent copies of the proposed arrangement between the Brookings Institution and the Committee on the History of the Federal Reserve System to all members of the Committee, Sincerely yours, Mr. Donald B, Woodward Vick Chemical Company 122 East 42nd Street New York 17, New York May 20, 195U Mr. R» D. Calkins, President The Brookings Institution ?22 Jackson Place, N.W. Washington, D. C. Dear Bobj this will confirm in writing what I told you orally at the Board Meeting that I approve of the statement "proposed relations between the Comittee on the History of the Federal Reserve System and Brookings Institution,* 1 Cordially, r 3lttstttuttmt 6, May U , 1954 To* Allen 3proul, Ciwdnaan V, Randolph Burgess Villism MoC. M&rtin, Jr. Walter W4 Stawmrt Donald B« Woodward, Storetwy w Mildred Ad*a«, Rosearch Diractor Froai Eob«rt B, C*lkins Bnolo6«d i s a stctvaant of the proposed arnng«uai between the Couoittee on the History of the Feder&l Eeser?e System and the Brookin6s Iaatituiion. Mr. Burgess has approved the statement with A slight aodifieation in item 5 a change th*t has been made in this draft* If you have modifications to suggest, I shall be glad to receive them) i f not, 1 shall be glad to have you signify your approval* ene. o PROPOSED RELATION BETWEEN THE COMMITTEE ON THE HISTORY OF THE FEDERAL RESERVE SYSTEM AND THE BROOKINGS INSTITUTION 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 Institution. 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. c 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. TRUSTEES WILLIAM R. BIGGS, Chairman HUNTINGTON GILCHRIST, Vice Chairman ARTHUR STANTON ADAMS DANIEL W. BELL ROBERT D. CALKINS LEONARD CARMICHAEL COLGATE W. DARDEN, JR. JOHN S. DICKEY WILFRED L. GOODWYN, JR. JOHN W. HANES JOHN E. LOCKWOOD LEVERETT LYON THOMAS E. MURRAY ROBERT BROOKINGS SMITH LEWIS L. STRAUSS LAURENCE F. WHITTEMORE DONALD B. WOODWARD c HONORARY TRUSTEES ROBERT PERKINS BASS MRS. ROBERT S. BROOKINGS JOHN LEE PRATT HARRY BROOKINGS WALLACE OFFICERS 6, J. C 7 2 2 JACKSON PLACE, N. W. ROBERT D . CALKINS President MILDRED MARONEY Treasurer ELIZABETH H. WILSON Secretary SHELDON B. AKERS Executive Manager Kay 12, 19H PB0POSED R3UTIGH B » f f i » TWL CGIW2TTXE Oi THK ELSTOhX OF THH rsUKUL HBSKS¥E 8YSWM AHB THE BOOKINGS I8ST1TUT1C 1. The Cosalttee on the History of th« Federal Reserve System tad the Brooking* Institution w i l l assume joint responsibility for the administration of the proposed project on the History of the federal %m**rf* Sy»t«i «ad the <wp«aditur« of fuadi that nay b» grmnt^d by the Rockefeller Foundation for t h i s activity• The propo»e<i great be a*4e to the Brooking* Institution for edminiatraUon j o i n t l y the Coniaittee m& the Institution* a* The Co«aittee v i l l enlarjge i t * present «e«bereaip end provide for the replaoeaKint of sonbere as »gr«ed upon by the Condttee end ikm Brookin^c I n s t i t u t i o n , 3* To f&ciiitete the aAftinietrfetion of the project, the Coaaittee n i l l deaiputte an Bxeeutire Conmittee with power to make tdsdniat n t i v © dettiEione j o i n t l y with the Brooking* Institution on s e t t e r * th&t asy require action, and & m«iber of thi« Eatecutire Ckswdttee w i l l be designated end e«pover«d to aet for the Coaaltt^e in ao with general poliele* eetmbliahed j o i n t l y by tike CkM&dttee wad the Brookings I n s t i t u t i o n . A* The CosRaittee, directly or through i t s deaiptated repre*entativee t and the Brooking* I n s t i t u t i o n , through the Fresidetit, w i l l j o i n t l y determine the research and related a c t i v i t i e s to be undertaken, the aHocation of funds, the aaaner in which tiieee a c t i v i t i e s i h a l l be pursued, the personnel to be engaged, the contrfeot*, gr&nte, or otnar commitments that **y be made* 0 ~ a. 5* the administrative arrangements and the payment of funds will be handled by the Institution on the authorisation of the President in accordance with procedures approved b^ the Coinmittee and the, Institution 6* Employees engaged for work on th© 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, i&d not regular employees of the Brookings Institution* 7. Contracts or grants for writing, research, or other services shall b« arranged by the President of the Institution in consultation with a designated representative of the Committee. These contracts or grants, as the circuastences may require, shall specify the obligations of the parties, the amount and manner of payment, ta# responsibility for supervision, and the responsibilities respecting reading and criticism of manuscript, editorial work, approval for publication, and publication arrangements. Such contracts or grants* stay be entered into with th* Brookings Institution Itself for portions of the work on terms that comply with the Institution 1 a usual operating practices* 8* The Institution will keep a record of i t s overhead and other expenses Incurred in administering the project, tnd render en teeountl&g to the Committee annually* Such expenditures up to $3,000 per year (as provided in the request) shall b© charged against the funds for the project* My expenditures beyond 13,000 per yuar shall be subject to reimbursement with the approval of the Committee* 9* Th«»« *rrtmg«aeats th&ll apply for the duration of th« project or»r tha next fira ,r«fer», mnieft« altered with the ftppxor&l of the Committa« and th« Brookinge Institution* TRUSTEES HONORARY TRUSTEES WILLIAM R. BIGGS, Chairman HUNTINGTON GILCHRIST, Vice Chairman ARTHUR STANTON ADAMS DANIEL W. BELL ROBERT D . CALKINS LEONARD CARMICHAEL COLGATE W. DARDEN, JR. JOHN S. DICKEY WILFRED L. GOODWYN, JR. JOHN W. HANES JOHN E. LOCKWOOD LEVERETT LYON THOMAS E. MURRAY ROBERT BROOKINGS SMITH LEWIS L. STRAUSS LAURENCE F. WHITTEMORE DONALD B. WOODWARD ROBERT PERKINS BASS MRS. ROBERT S. BROOKINGS JOHN LEE PRATT HARRY BROOKINGS WALLACE OFFICERS i 6 , •©. <DL 7 2 2 JACKSON PLACE, N. W. May 7, 1954 Mr. Donald B. Woodward Vick Chemical Company 122 East 4.2nd Street New York 17, New York Dear Don: I am sending you herewith a tentative draft of three alternative plans covering the arrangements that might be established between the Brookings Institution and the Committee on the History of the Federal Reserve System. Under Plan I the Committee would assume responsibility for the project directly. Plan II provides for a joint responsibility by the Committee and the Institution. Plan III provides for an assumption of the responsibility by the Institution, with the Committee serving in an advisory capacity. When a choice has been made among these three basic plans certain further details can be agreed upon. This matter will be a subject for discussion at our luncheon next Tuesday, here at the Brookings Institution at 1 o!clock. Luncheon will be served in the West Alcove. Sincerely yours, President enc. ROBERT D . CALKINS President MILDRED MARONEY Treasurer ELIZABETH H. WILSON Secretary SHELDON B. AKERS Executive Manager May 7, 1954 SUGGESTED KEUTIOHSHIP BETWBBi IHI MOOKIMGS INSTlTUTIGi AND TH1 OONKITTHB OH THE HISTORY OF THE fBHERAL HE6EKVE 3T3TW Last Decasaber the Brookingft I n s t i t u t i o n was asked by the Coa&ittee on the History of the Federal Heserve System whether i t would be w i l l i n g to cooperate with the Goaalttee and ad&inigter & prospective grant from the taokefeller Foundation for the development of a research program. the I n s t i t u t i o n expressed i t s i n t e r e s t i n the project, and indicated i t s willingness to receive md adainister a grant i n coH&bar»tion vdth the Committee for the proposed exploration of TQ***rcih p o s s i b i l i t i e s sad foxttulatlon of & research project. The grant of Jtyraary 21, 1954 was aade t o the Brooking* I n s t i t u t i o n to be administered by the I n s t i t u t i o n in collaboration with the Conaittee. At the request of the Coaalttee the I n s t i t u t i o n appointed Hiss Mildred Adams as a aeaber of i t s s t a f f and paid her out of the Foundation grant and disbursed other funds for expenses Incurred i n connection with the exploratory project* On April 20, 1954 the Coaaiittee submitted to the BocJcefeller Foundation & request for a five-year grant* A supporting. l e t t e r from Mr. Calkins on April 26 expressed the willingness of the Brooking* I n s t i t u t i o n to act as sponsor and as f i s c a l ag#nt for t h i s resec-xoh undertaking and reported that the proposed arrangement would be presented to the Trustees for foimal approval on May 14. The request i t s e l f recoaaended a continuation of the association between the Committee and the Brookin^e I n s t i t u t i o n ! and pointed out that trie relationship would need c l a r i f i c a t i o n , particularly wh«m the publishing stage was reached. This memorandum Is intended to suggest the relationship that should prevail, &s I see i t , from the point of view of the Brookings Institution snd of the Committee* Three plane of cooperation are presented herewith for consideration, Plan I Under this plan the Committee will assume direct responsibility for the project and the grants &n& the Brookinge Institution vlll &ct only as fiscal agent, paying sums from the grant on the authorization of the Committee for purposes <snd by methods that are acceptable to the Brookings Institution as meeting its obligations to handle th» funds prudently within the terms of the great* Under this plan the Committee will assume full responsibility for the project, select personnel, supervise the work, edit and finally approve manuscripts for publication, arrange for publication, end take financial and other responsibility for the outcome. The Brookings Institution will assume none of these responsibilities, but, in the capacity as fiscal agent, will merely pay funds from the grant upon authorisation of the Chairman, the Research director, or Secretary, ec determined by the Committee, and as approved by the Institution. Flan II Under Plan I I the Committee and the Institution will assume joint responsibility for the project and the expenditure of fund*** The Committee and the Brooklnga Institution, through I t s President, will fegree jointly on the character of the program and the purposes for wnich the funds are expended, and the Institution will pay out sums from the grant on the joint authorisation of the Coaadttee and the 4 Institution by methods to be specified, aarl the two parties will responsibility for the results as specified be-low. The Comaitte* and the Broskings Institution will jointly aake contracts with individuals, organisations, or the Brcoklngs Institution to complete portions of the program aad these contracts vlll ^eeify the ob Uftf of the r^rtiee and the amount and manner of payment. J^ysaents will be aad* on the joint authorisation ef the Chairmen, Research Director, or Secret ry of the uommittee and the authorisation of the President of the Breedings In»titution# These eoatraots will SiJecify the ultiaate responsibility respecting editorial laafcj efpNVftl for ;;-.ublic&tionf Net the p In understood tli&t any contract research undertaken by the arcckiags Institution itself will deleg-te Xm the Institution, in with th© eu&toa&r^ practic , .. decision reajwoting editir*g and pub- lication tiaitH otherwise eacpresisly provided, itoder such co:\tr.;-cts the Coamittea's *drice will of coarse be sought and considered in the conduct of the research. Part III Under Plan III the Institution project and the adninistriition of the funds by agreement with the Coaaittee, and the Uoamittee will become an Advisory Cos&ittee to the Resident respecting tae project and the allocation of the grant, tinker this arr&agaaent the President of the Brookings Institution will haw L decision respecting all aspects of the program, bat will give due consideration to the adTico and recoainendations of the Ccaaittee. Sdltorifcl ree^o-uability, aoeepUace of amnwerivt» for ublic tlcn, ?nd ublicKtion arr&ngeaeats »1X1 to determined finally ty the Institution. o COMMITTEE ON THE HISTORY OF THE FEDERAL RESERVE SYSTEM 33 LIBERTY STREET, N E W YORK 45, N E W YORK TELEPHONE: RECTOR 2-5700, EXTENSION 286 ALLAN SPROUL, Chairman With W. RANDOLPH BURGESS DR. ROBERT D. CALKINS WILLIAM MCC. MARTIN, JR. WALTER W. STEWART DONALD B. WOODWARD, Secretary MILDRED ADAMS, Research Director T H E cooperation of BROOKINGS INSTITUTION JACKSON PLACE, N. W. WASHINGTON 6, D. C. 7 2 2 May 1 3 1954. Dear Don: Dr. Calkins1 draft of the proposed relationship between the Connnittee and Brookings will be waiting for you at the Cosmos Club tonight. I talked to Mr. Burgess by phone about my objections to paragraphs 6 and 7 on page 2. Unhappily, had just talked to Calkins, and told him that the draft was all right to circularize, with the exception of paragraph 5 in which he wanted to give Brookings more power. He was not impressed by my suggestion that paragraphs 6 and 7 be changed to give them less. This is in line with Mr. Burgess* statement at the meeting that he was in favor of Plan II, with modifications leaning toward III. Burgess' argument is that "tilings get done better if only one person is responsible rather than though they must be initialed by two. I grant they may get done faster. But I still think the point worth making that if we give Brookings the power implied in those two paragraphs, with "consultation" the only control left to the Committee, we will find the Brookings routine taking over. It seems to me that the time to set up safeguards is now when they aren't needed, rather than later when they may be needed and we can't get them so easily. The draft will be circulated, and the Committee will have an opportunity to comment. I am therefore still raising the question with you - Wouldn't the clear desire of the Committee for ad hoc decisions be better preserved if paragraphs 6 and 7 were amended? At present paragraph 6 reads (underlining mine): o -2- 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, I would suggest that this read ••••• shall be appointed by the President of the Institution or by a designated representative of the Committee, provided that such appointment is made only after consultation and agreement between these two....." Paragraph 7, reads: 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. To this arrangement my objection is even stronger in that the present combined with the last, wording of the first sentence, seems to leave Brookings free to make contracts with itself. This seems to me dubious practise, and I am reminded of Walter Stewart1s statement in another connection "He needs another employer than himself". Also I do think there may be instances in which the Committee can do better with publishers than can Brookings, and I am not sure that "consultation" is enough to secure such ad hoc treatment. Therefore I suggest that the first sentence of paragraph 7 be amended to read "Contracts.... shall be arranged either by the President of the Institution or by a designated representative of the Committee, depending on the character of the work and provided that such contracts are made only after consultation and agreement between the two..." Mr. Donald B. Vick Chemical 122 East £2nd New York City Beefy as always Mildred Adams Woodward Company Street 17, N. Y. TRUSTEES WILLIAM R. BIGGS, Chairman HUNTINGTON GILCHRIST, Vice Chairman ARTHUR STANTON ADAMS DANIEL W. BELL ROBERT D . CALKINS LEONARD CARMICHAEL COLGATE W. DARDEN, JR. JOHN S. DICKEY WILFRED L. GOODWYN. JR. JOHN W. HANES JOHN E. LOCKWOOD LEVERETT LYON THOMAS E. MURRAY ROBERT BROOKINGS SMITH LEWIS L. STRAUSS LAURENCE F. WHITTEMORE DONALD B. WOODWARD HONORARY TRUSTEES ROBERT PERKINS BASS MRS. ROBERT S. BROOKINGS JOHN LEE PRATT HARRY BROOKINGS WALLACE OFFICERS 6, J1EL C 7 2 2 JACKSON PLACE, N. W. May 19, 1954 Mr. Donald B. Woodward Vick Chemical Company 122 East 4.2nd Street New York 17, New York Dear Don: I have had a telephone call from Walter Stewart indicating his approval of the proposed arrangements between the Brookings Institution and the Committee on the History of the Federal Reserve System. Mr. Riefler replies by letter that the proposal has the approval of Mr. Martin. We have not yet heard from Mr. Sproul. Mr. Burgess had given his previous approval. Mr. Woodward expressed his approval orally, and it has my approval. Accordingly we have a unanimous vote of the Committee with the exception of Mr. Sproul, who is not yet heard from. I am glad to report also that the proposed arrangements were approved by the Trustees of the Brookings Institution at their meeting last Friday. Sincerely yours, President cc: Miss Mildred Adams Aft H^^M. ROBERT D . CALKINS President MILDRED MARONEY Treasurer ELIZABETH H. WILSON Secretary SHELDON B. AKERS Executive Manager COMMITTEE ON THE HISTORY OF THE FEDERAL RESERVE SYSTEM 33 LIBERTY STREET, N E W YORK 45, N E W YORK TELEPHONE: RECTOR 2-5700, EXTENSION 286 ALLAN SPROUL, Chairman With cooperation of W. RANDOLPH BURGESS DR. ROBERT D. CALKINS WILLIAM MCC. MARTIN, JR. WALTER W. STEWART DONALD B. WOODWARD, Secretary MILDRED ADAMS, Research Director THE BROOKINGS INSTITUTION 722 JACKSON PLACE, N. W. WASHINGTON 6, D. C. May 18, 1954. Dear Don: I have read your letter to Win and made some small suggestions. The only important one is that three sentences on page 2 might come out. You may have some reason for restating that point of argument which I don't know, but I question whether it is wise in what is, after all, a gesture intended to placate. On the same page you will find that I suggested putting between parenthesis the sentence about protective possibilities. That is so as not to lessen the effect of the sentence immediately preceding it. I certainly hope that this will clear the air, Meanwhile, I will do my best toward the same end. Thanks for editing the minutes. I will try to get them out today. Also I will see that your expense account is incorporated into the May account to Brookings. Best, as always M • t Mildred Adams enc. Mr. Donald B. Vick Chemical 122 East 42nd New lork City Woodward Company Street 17, N. Y. 17, 195U Mr, B. D. Calkins, President The grookings Institution 722 Jackson Place, N.W. Washington, D. C. Dear Bobs I understand that you w i l l send to a l l members of the Conffi&ttee the copy of the statement on "Proposed Relations Between the Committee on the History of the Federal Reserve System and the Bro©kings Institution. n This i s just a note to be sure that i t goes - and i f you would prefer that this o f f i c e send i t out please don't hesitate to say s o . Cordially, DBWslw ccj Miss Mildred Adams COMMITTEE ON THE HISTORY OF THE FEDERAL RESERVE SYSTEM 33 LIBERTY STREET, N E W YORK 45, N E W YORK TELEPHONE: RECTOR 2-5700, EXTENSION 286 ALLAN SPROUL, Chairman With cooperation of W. RANDOLPH BURGESS DR. ROBERT D. CALKINS WILLIAM MCC. MARTIN, JR. WALTER W. STEWART DONALD B. WOODWARD, Secretary MILDRED ADAMS, Research Director THE BROOKINGS INSTITUTION 722 JACKSON PLACE, N. W. WASHINGTON 6, D. C. May 1 3 , 195-4 Dear Don: In checking expense accounts for the month of April I seem to find no record from you about incidental expenses for the trip we made on April 7th • According to my records we went down on the 8:30 A.M. train. The Bank bought transportation; we had coffee in the middle of the morning; you tipped the porter and paid taxi fares. At the end of the day you returned tc New York; you must have had taxi fares and a dinner charge. We have no record of any of these expenses for you except for the cost of your seat on the train (|2.30), for which I am enclosing my check. You may already have charged them to Brookings yourself, but if you have not arranged otherwise, I can send them in a supplemental account if you will give us the details. The May account will not go in until the end of the month, but we will, at that time, need your record of expenditures for both of us on May 11. If I remember correctly these include - breakfast, coffee and dinner for the two of us, as well as taxis and tips. If there are charges I have forgotten you will, of course, let me know. Thanks for acting as disbursing agent. Best,, as always Ctu^cA Mildred Adams enc. Mr. Donald B. Vick Chemical 122 East 42nd New York City Woodward Company Street 17, N. Y. c COMMITTEE ON THE HISTORY OF THE FEDERAL RESERVE SYSTEM 33 LIBERTY STREET, N E W YORK 45, N E W YORK TELEPHONE: RECTOR 2-5700, EXTENSION 286 ALLAN SPROUL, Chairman With cooperation of W. RANDOLPH BURGESS DR. ROBERT D. CALKINS WILLIAM MCC. MARTIN, JR. WALTER W. STEWART DONALD B. WOODWARD, Secretary MILDRED ADAMS, Research Director THE BROOKINGS INSTITUTION 722 JACKSON PLACE, N. W. WASHINGTON 6, D. C. May 13, 1954 Dear Don: I have only tried one telephone call to a publishing house on the matter of reading fees, but the response was such that I am convinced that world has not changed as much as we vere led to believe. This information vas secured on a confidential basis. Norton is oublishing a textbook on Money and Banking which will run close to 250,000 words. Karl Bopp read manuscript on it, and criticised it in such detail that the promised fee of $100 vas raised to $200. A Pennsylvania professor turned in 50 pages of critical and analytical notes on a book on National Income Analysis; the job was so detailed and so good that his promised fee of &50 was raised to $100. In both cases the work done was so extensive that the oay received must have fallen far short of any $50 a day rate. Fees for reading technical economic books vary from $50 to $200, der>ending on length, difficulty, reputation of the reader and so on. Lesser works are still read for as little as 135* My informant in the publishing house asked me to let him know if I found any $50 a day reading jobs around - he'd like one himself! Mildrfcd Adams Mr. Donald B. Woodward Vick Chemical Company 12? East 42nd Street New York City 17, N. Y. TRUSTEES WILLIAM R. BIGGS, Chairman HUNTINGTON GILCHRIST, Vice ARTHUR STANTON ADAMS DANIEL W. BELL ROBERT D . CALKINS LEONARD CARMICHAEL COLGATE W. DARDEN, JR. JOHN S. DICKEY WILFRED L. GOODWYN, JR. JOHN W. HANES JOHN E. LOCKWOOD LEVERETT LYON THOMAS E. MURRAY ROBERT BROOKINGS SMITH LEWIS L. STRAUSS LAURENCE F . WHITTEMORE DONALD B. WOODWARD HONORARY TRUSTEES Chairman <3l:ttsititfitet OFFICERS 6, JL (ft. 7 2 2 JACKSON PLACE. N. W. May 1 2 , 1954- Dear Don: I am sending you a draft of the memorandum which was sent today to Randy Burgess. On further reflection it seemed to me advisable to make the employees joint employees of the Committee and the Institution since they will inevitably be regarded in some degree as institutional employees in any case. I would like to have them designated as joint employees, however, in order to distinguish them from regular employees of the Institution and in order to avoid any moral obligation for employing of the staff when the budget is completed, unless such commitments are explicitly made by the Institution. Sincerely yours, Mr. Donald B. Woodward Vick Chemical Company 122 East 42nd Street New York 17, New York enc. ROBERT PERKINS BASS MRS. ROBERT S. BROOKINGS JOHN LEE PRATT HARRY BROOKINGS WALLACE ROBERT D . CALKINS President MILDRED MARONEY Treasurer ELIZABETH H. WILSON Secretary SHELDON B. AKERS Executive Manager (Slttstttultmt 6, §. OL May 12, 1954 Dear Randyj I am submitting herewith a statement of the proposed arrangement between the Committee on the History of the Federal Reserve System and the Brookings Institution. I will c a l l you tomorrow to inquire whether this meets with your approval• I f i t does, I shall send i t out to the other Cosuaittaa aeiabsrs for their approval, and I shall present i t to our Trustees on Friday for approval here* Sincerely yours, President • Mr* V. Randolph Burgess Departaent of the Treasury Room 3434, Main Treasury Building Washington 25, D« C, enc. cot Miss Mildred Adams Mr. Donald B. Woodward May 12, 1954 PROPOSED RELATION BETWEEN THE COMMITTEE OH THE HISTORY OF THE FEDERAL RESERVE SYSTEM AND THE BROOKINGS INSTITUTION 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 Conmittee will enlarge its present membership and provide for the replacement of members as agreed upon by the Committee and the Brookings Institution* 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 way require action, and a menber 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. A. The Committea, directly or through its designated representatives, and the Brookings Institution, throu^i the President, will jointly determine the research and related activities to be undertaken, the allocation of funds, the manner in which these activities fhall be pursued, the personnel to be engaged, the contracts, grants, or other commitments that may be made. 2. 5. The administrative arrangements and the payment of funds will be handled by the Institution on the authorization of the President with the approval of a designated representative of the Committee, 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, researah, or other services shall b« 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 Institution1s usual operating practices. 3* 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 Comoittee. • •• • 9« These arrangements shall apply for the duration of the project over the next five years, unless altered with the approval of the Coamittee and the Brookings Institution* j >ti*-4 0 r May 10, 1954 Dear Joe: Den ?*OQchrard suggested It sight be helpful if I wrote you direct about my connection with the project for the History of the Federal Reserve System. I have been interested in this general field for nsany years and, from time to t5,rae, have put into it substantial amounts; of labor and love. 1 have always believed that, on my retirement, my raajor interest vould be writing in this general area, and I am now of the same disposition. Therefore, when the members of the Committee inquired, I indicated my willingness to associate i^yself actively with the history project when I have completed ray present task. Uy assigpmsent at the Treasury has no precise terminal point, so I cannot predict how long 1 shall be here, and it has the first call on my time and energy* v/e are offered here a great opportunity to re-establish both in practice and in peopled minis the principles ox sound money, including the possibility of aiding in the re-establishing of currency convertibility in Europe. In theffieantiiae,I would plan to maintain contact with the history project, spending, as 1 do, several days a month at the Federal BtMrrt Bank of Kew £ork. Kith my best regards, Sincerely yours, Randy W, Randolph Burgess Dr. Joseph Willits Rockefeller Foundation 49tfest49th ftreet New York, New York CC: Mr. Donald B. Woodward Hay 6, 195k Hr. W. Randolph Burgess Deputy to the Secretary Treasury Department 'ashington, B. C» Dear Randy; Chairman Sproul, Dr. Calkins and Walter Stewart lunch at Brookings at 1:00 on Tuesday, May 11 to discuss the urgent questions in ray memo. Either Governor Martin or Win Riefler will be present and I have high hopes of getting there, but in any event Miss Hildred Adams will be there. This probably will be the only meeting of the Gouuaittee that need be held for a considerable t i s e . I do very much hope that you can make i t - or at very least corae in for dessert with us. Cordially, Donald I. Woodward Secretary May 6, Mr. Walter V. Stewart Council of Economic Advisors Washington, B. C. Dear Walter: I am delighted you car. make lunch at Breakings at 1:00 on Tuesday, Hay 11* This is an important meeting. Cordially, Donald B. Woodward Secretary D3W:lw May 6, Mr. W. IT, R i e f l e r Federal Reserve Board Washington, D. C. Dear Kins Best of all, could both you and Governor Martin attend? Very few meetings have been necessary and I think even fewer may be suggested r££ we do get the grant but this one does seem to me urgent. Cordially, Donald B. Woodward Secretary Hay 6, 195U Governor Williaa McC. Hartin, Jr* Board of Governors Federal Keservc* System 19th i Constitution Ave. 0, C. Dear Governor: Most of the Ccariittee can, it appears, make lunch at Brookirigs at 1:00 Tuesday, Kay 11* It does seem pretty important for the Committee to have some conversation as a group on the urgent questions covered In my letter and 1 do hope that if at all possible you can juake it» I understand that Win Riefler can be present if jou ar© unavailable and he has dbn® a splendid job In your stead &n& I am sure *&11 do so again* We are trying very hard to carry this project forward with as little inroad on the tiae of Cosmittee members as possible• Very truly yours, Donald B, Woodward Secretary DBtftlw ccj W. Riefler Hiss Adms -. . • May 6 , Gfovemor AUan 3proul Federal Reserve Bank 33 Liberty street Kew York, K. Y. Dear Governor: Thank you so much for your l e t t e r of May U« On the strength of i t I have arranged lunch at Brookings Tuesday, May 11 • I t does seem highly important froa a l l standpoints for the C i t t to have a raeeting. Kiss Mildred Adams will also attend along with the others• Very truly yours, Donald 3. Woodward Secretary DBW:lw 6, 19& Mr. R. D. Calkies, President The Brooking© Institution 722 Jackson Place, N.W. Vfcahington, D. C. Dear Bob: I M veiy happy that the Coas&ttee can have lunch together next Tuesday, May H or at least that you and Walter and the Chairman can talk together* I think I can make it though X am not absolutely sure but Hiss Adams will be there. Riefler, I understand will be present if Governor Martin can't aake it but 1 am writing Governor Martin a letter urging that he attend. Randolph Burgess as you know is away but I hope on return he will agree to the date. In any event a conversation with most of the Coauaittee with the Chairman seems especially important. * If it isn't convenient for lunch at Brookings I wauld suggest a private room at the Haye-Adams, Carlton or Statler. Dr. V&llits might find it very useful if the Committee could have even a partial meeting of mind on the points covered in my letter. Cordially, Donald B. Woodward Secretary cc: Miss Adams May 6, Mr, F. Cyril James Principal k Vice Chancellor McGill University Montreal 2, Canada Deer Oyril: I am very ha|^>y that you can aeet Hiss Adaws and B O at the university Club at i*:00 Ttiursday, May 13. I think you nay find su?^.e of" the progress M© have made of interest. With warmest, personal regards. Cordially, cci Miss Hildred Adaas o PRINCIPAL AND VICE-CHANCELLOR F. CYRIL J A M E S McGILL UNIVERSITY MONTREAL, 2 May 3rd 19 5 4 Dear Don, Thank you very nruch indeed for your letter of April 28th and its suggestion that we might have lunch together on Thursday, May 13th. Unfortunately I am already booked at lunch for a discussion with the people at the Rockefeller Foundation, but I should be delighted to meet you and Miss Adams at the University Club around 4. o'clock so that we might have a chat about the History of the Federal Reserve System. The whole project certainly interests me considerably. With best personal wishes meanwhile, I remain, Cordially yours, Donald B. Woodward, Esq., Secretary,Committee on the History of the Federal Reserve System, 33 Liberty Street, NEW YORK 45, N.Y. copy to Miss Adams April 28, DP, F. Cyril James Principal k Vice Chancellor McGill University Montreal, Canada Dear Cyril: Miss Mildred Adams, the Research Director for the Committee on the History of the Federal Reserve System of which I have the honor t> be Secretary tells me that you will be in Sew York Thursday, Hay 13 and that you might have time for some discussion of possibilities for Bob Varren's papers and other matters in which the Committee is interested, I am delighted to hear this for I have thought about you several ti?ses in connection with the Committee. Could you by chance have lunch with Miss Adams and me on Thursday, Hay 13? If that is not possible could we meet in the late afternoon perhaps Us00 or i*s30 for tea or other refreshment to your taste? I would suggest the University Club if you expect to be up-town or the City Midday Club if you will be downtown* I think you may be interested in several aspects of the Federal Reserve liistory project - and it will be a great pleasure to see you again. With regards. Cordially, cc: Hiss Mildred Adams TREASURY DEPARTMENT WASHINGTON May 5, 1954 Dear Mr. Woodward: In Mr. Burgess1 absence in Paris attending OEBC meetings, I am taking the liberty of acknowledging your letter of May 3rd. Looking at Mr. Burgess1 calendar, I see nothing to conflict with your proposed meeting in Washington on Ifey 13th. I believe, however, that Mr. Burgess would prefer having the meeting at 2:30 rather than at lunch, since he usually tries to keep free to lunch in the Treasury with the Secretary and other officials so they may discuss current matters. In any event, Mr. Burgess will be in touch with you, probably by phone, when he returns to the office on Monday. Sincerely yours, Secretary to Mr. W. Randolph Burgess Mr. Donald B. Woodward Secretary, Committee on the History of the Federal Reserve System 33 Liberty Street New York 45, New York c FEDERAL RESERVE BANK OF N E W YORK N£w YORK 45, N. Y. May A, 1954. Mr. Donald B. Woodward, Secretary, Committee on the History of the Federal Reserve System, 33 Liberty Street, N e w York A5, N.Y. Dear Mr. Woodward: The date you suggest in your letter of May 3rd for a meeting of the Committee on the History of the Federal Reserve System finds me with a meeting of my own directors and an engagement which I have already changed once to suit my convenience. I cannot be in Washington on Thursday, May 13th, therefore, and if that is the only day you can get the others together, we shall have to go it alone here. Could you come in on Monday morning, May 10th, say, at 11 o'clock? I am sorry again not to be able to fit my schedule to the date suggested for a meeting of the Committee, the more so since you have been so good about carrying the load without coming to me or the Committee except when absolutely necessary. I am going to be in Washington on Tuesday.May 11th. and if a luncheon meeting could be arranged on that day, I couli be present. With best regards, A' **° Yours sincerely, Lan Sproul, President. 0 " i May 3 , 19S* Hr. Allan oproul, President Federal Reserve Bank 33 Liberty Street New Tork fof M.T. Dear Mr* Sprouls I have t r i e d hard to carry on without coming t o you as was your i n s t r u c t i o n s . The questions and the meeting referred to i n the attached seem q u i t e v i t a l and I do hope that the Committee members can meet and t a l k t o each other about them* I f i t doesnot c o i n c i d e with your schedule t o attend t h i s meeting could I come t o see you p r i o r t o i t ? Very t r u l y yours, Donald B. Woodward Secretary DBW:lw May 3 , 1951* Dr. Robert 0* Calkins, President The Brookings Institution 722 Jackson Place, N.W# Washington, D« G. Dear Bobs I understand the attached i s agreeable to you and I know that the memorandum you expect to circulate in advance will be very fc&Lpfui. Please telephone me if there are any questions. Cordially, Donald 3* Woodward Secretary May 3, 19SU Hr* W. W. Riefler Federal Reserve Board Washington, D« G. Dear Win: I hope that the attached together with the memo that you will receive from Dr. Cglkins will serve sufficiently as an annotation agenda which I understood you wished to have for such a meeting for discussion with Governor Martin. If you need more than what is hear could you give me a ring? Cordially, Donald B« Woodward Secretary May 3 , 195U Mr. Walter W. Stewart Council of Economic Advisors Washington, D. C« Dear Walter: I understand that you will be leaving town on the afternoon of May 13. But if you possibly can do so, I hope you will let us have the wisdom of your council on the matters referred to herein* They are highly important for future actions and may be highly important for Dr. Willits. If it does prove impossible for you to be with us, I do hope you will convey your thoughts through someone of us on these points. V&th warmest regards. Cordially, Donald B. Woodward Secretary DBWslw 3 , 195U Mr, W« Randolph Burgees Deputy to the Secretary Treasury Department Washington D. C. Dear Bandy: I am afraid this may be crowding you a little in view of your trip abroad* I do hope you can make it however as it combines importance over the long run with importance in connection with our application 1 — wiHiWlji Please do let aw have any wishes you say have in the natter and I'll attempt any changes you aay indicate. Cordially, Donald 3* woodward DBWilw o May 3, 19& Kr. Ralph A. Young, Director Division of Research k Statistics Board of Governors Federal Reserve System Washington 25, D. C. Dear Ralph: Many thanks for the new booklet on the System. I'll go over it with much interest. You probably will recall that I always write when I have something in mind - t*nd sometimes when I don't.Warmest regards. Cordially, DSWslw r - ^ BDARD DF GOVERNORS DF THE FEDERAL RESERVE SYSTEM WASHINGTON 25. D. C. ADDRESS OFFICIAL TO CORRESPONDENCE THE BOARD April 28, Mr, Donald B. Woodward, Chairman of Finance Committee, Vick Chemical Company, 122 E. U2nd Street, New York City 17, New York. Dear Don: The new Federal Reserve booklet explaining the System's purposes and functions has just been released and a copy is enclosed for your examination and interest. Any reactions or suggestions which you may have as to format, content or organization will provide us with an inventory of improvements which we may want to consider in a next edition. I sincerely hope that you will find it a useful and helpful item of fuller explanation. With kind regards. Sincerely, Ralph A. Division Enclosure irector, and Statistics. tm%M I a* Maltor *• - at m* *ppUc«tioc to tho Eocfcofollar <m Ito m^msm to b« OR tlw to X If 9r« 1. torn in m m&at aiaff on ttai. (or of Tito l&srtii pol^t coficwmo tho <p«e*lom of ntuteit to vr&mim tfm Gortor Ceatral tct oafetrlt on * ttn^r of *3in toker «*itt # tat in IMNO4 bo holpf&l lo know be ^prevod and of It ~"> a $ , § font th« a§ar4ia for * o*«ti*m* CeoXd tr»« Gomittee ntt#t on Thur»d«y, 13 ID Wi^leitoa, either far lwt»oh at isOO IMi. or at 2t3D IU*,t X foxnvr would \m dte«irabl« i f po»»ibl«. lit mtotsmm of tho two 5«or©t«ry ddwgyl&e point* 1 «ia 3, «lth fwrtlwir light an fx&at U$ the U to. Qmlkim m isroomngii « point 2* *CTW»PdijMiip cct •*^W Hiss Adams (3) • 1 copy to Miss Adams Jf Brookinga urn ^W|W(F%HW(BMf ^rJ^ •f^WWWp^P w^fclir^^ April 29, May 1 T hursday 6 PM Washington Saturday 9:30 AM Charlottes ville Dear DonI am enclosing a copy of a short memorandum to be sent out as a c a l l to meeting on May 13th. Washington members have that date on their calendars, but most of them are not firmly committed. For instance, Burgess goes abroad on Saturday (today) and w i l l return Monday the 10th; Reifler wants an annotated agenda in time to discuss i t with Martin; Steward wants to go up to Princeton that afternoon and doesn't want to say he will be present - he might, I'm sure, be open to urging by you. We might be able to bake care of Stewart! by callingja luncheon meeting - you and I could make i t by tdc Ing the 8:30 AM train but I d^idn f t have time to find out. You might suggest both 1 PM and 2;30 and see what happens. Brookings, of course, has a sm^lll private dining room, I could find out about the Hay Adams or the Carlton ±± when I get back on Friday if lunch seems best. I ' d think there would be l i t t l e chance of Sproul coming, but i t might be well to send him a special note with the call saying that if he can't come, perhaps he will let us come and talk with him in advance of yww* the Washington meet ing so we can know his views$ Wednesday the 12th should be a l l r i g h t . In the light of conversations held in Washington on Thursday i t seemed to tee best to handle the thing this way, rather than to send the Committee your memo as i s . Calkins will have h i s , on the proposed relationship betv/een the Committee and Brookings, for me t o see when I get back to Washington Friday May Tth, and the two of them can go out about the same time on, perhaps, Monday so as to reach the Committee ahead of a May 13th meeting. I didn T t see either of your friends in Richmond - Boustall and Hyde were both out of town. I did see Mrs, 3eay - a pathetic old lAeLy living in the past. Also I talked to both Leach and Storrs about Kinkaid - he i s very beloved in the Richmond Bank, Sdsbrrs says his teaching i s slowing down, (which may have been what inspired Abbott's negative report to you) but that with a good graduate student furnishing the drive, and Kinkaid furnishing the judgement, the result ought to be worth whatever money we want t o put into i t . the I ' d like to Jut both^Kinkaid and Chandler projects on the agenda for discussion, on the ground that if the gait grant should come through, we might get Kin&aid to work this summer, and assure Chan(])djbr (who sails the 26th for a summer in Europe) that he can plan to start work in February when he goes on a six months's (Leave. Obviously such a discussion is ! l if/-y", butithere seems to fee general approval of both men, and i t ' s getting lateV by the minute. Best as always - \ Uss MbKinstry knows where I can b e reached. aft for MrJVtfodwar^ Y - (?r v 1, 1954 Messrs Allan Sproul, .Chairman W. Randolph B^ rgess etc ^(or written in the form of an individual letter as you think best) \ J Since submission of our application to the Rockefeller Foundation I have talked twice with Dr. Willits to clarify a few of the points madB in i t . He feftls that the Committee's proposal was well prepared, and- while nothing i s certain until the mating on May 20th thus far the application.appears to be on the right track. In view of the possibility that in late May we will receive word that funds are available and work may proceed, I suggest that the Committee might well begin to consider certain elements in our future procedure. T^ree items are of espeical importance, a fourth one calls for preliminary discussion. If the Committee could meet and reach a concensus of opinion on these before mid-May their conclusions might provide supplemental information for Dr. Willits in case he should be questioned on them. The three points presently Important are: 1, Finding a major staff man (or woman) i 2. Cla±±fying the relationship which i s to exlqt between Brookings and the Committee^iu^tecms of administration p £j^v^l|arr*-T e'ciprocal~ iov mutu^fl., er~ joint) responsibilities. - od u*wA* 3 / securing breadth of viewpoint on major subjects of inquiry. The\fourth point ±x concerns tentsat i ve agreement tos. on aiding \ .Dr. Kinkaid and a graduate student to organize the Carter Glass papers, and o» Lester Chandler to embark on a study of "Ben Strong, Central Banker". Obviously no action can be taken until the grant comes through, but in planning ahead bt would be helpful to know whether the Committee i s agreed that these are : 1 ; .v ' projects which might be approved and supported* fHi-e$%-tK& probability factor which we would like to know. ) These three items, and a possible consideration of the fourth, would form the agenda for a met$ing»tre~%e held at p 2:30 (or at 1> subject to DWfs judgement )-in islr. Bu^ess » office in In advance of the meeting two memoranda will be circulated kyxfcfest for Committee consideration - the f i r s t by the secretary covering points 1 and 3, with further light on point 4; the second by Dr. Calkins s-etting forth the Brookings point oi view on point 2. Very sincerely yours, Donald Woodward, Secretary f? C *~\ ^ -** ••^/Wl>«' ^-/^«A c *^' ' • .«- | o n, 195k X&fcFT 901 C^HflTfrftMTin Iff BE. Wsttlli £&* GAUCISS • TO E 8UIA1TT££ of our «p^3.ic»tioo to twle© iriih £r« « i U i t « *t his to elmrltf a few of ih« points* H» f»«l« that tlM Cowtitt«« *• f^vofomSl mm ml\ prep^rsd *nd# whll«i notbinr ic c«rtAin until the BMtlnft @n ¥ay t\$ th» application thus flir t ^ t t n to b« OB tlM lit vimr of th® possibility th»t t« l«t« ligr «t will word that tw&s *r* availafol* and work MQT proowd, that tli* Cewftttt** s l # t w»U fcwgln to think «bo«t KHK&zv* Two jpoteta ar» ©f ©ap«ci*l importan c»j i f the Ckwsdtt#« eo^ld r©*ch * cone«nKi« of opinion on th»a« two tte wight j?*wl*ie supplttHKiMl lafor»»tioii for Br. In eiMW lift should b* qwation^ on th*»# Tfee two chiof problems ai« *• follow* t 1 . fitnUsg m m$or staff 2# rwpiwswntatloa of a l l points of Page !• 2 finding a major staff man. Our proposal stated (Page 19) H h e Committeefs 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. Bach 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 project0i This individual will be a highly significant factor in the work of the Committee• therefore he will need to be most carefully chosen* I should think there are several possible avenues of approach* One would be to seek an individual sufficiently close to retirement and with sufficient qualifications as to be interested in moving to this job in the near future* Such a person might be George B # Hoberts of the National City Bank or W* A. Berridge, Economist of the Metropolitan Life Insurance Company or J. H, Riddle recently retired from the Bankers trust Company after some tia® at the Federal Reserve Board* Another approach would be to seek a presently established person who would want to do the job and might be able to get a leave of absence, or who might see this as a big enough opportunity to wish to take it and hope to find another post at its termination* (If there were the possibility of an appoint- ment at Brookings following experience with this project, this might also be a factor*) Halph Young of the lieserve Board staff has excellent qualifications and so I should think does Donald Ihoayion of tli» Clovolaad ft§doral Roisrvo Bank, E« J. SaxOnler of Columbia, Lester Ch&ndlar of Frincaton, or Barton Hallowell of Connecticut lesleyan * to »a*ti» a few* (Other names follow this aeao*) Tot another approach would be to Book a good young person who might hope to make this the springboard for a major career and who has already demonstrated marked capacity. Tho office hat a l i s t of yotra^er scholars, compiled by Miss HeKinstry from experience with Br» John Williams* which say bo useful. Probably Balph Towtg, or Saulnier, or £r« Williams or a miaber of others could suggest nasos* (Oihor imnos follow this Porhaps tho Cossdttoo would wish to have pmy&vwS a of Its objootlvos and the kind of person It Is saaklr^t and to send snoh a stattisent to a nunbar of ^onomlets In t h i s Hold with a mqwst for tholr sttggostlons* Tour preforonoes in ttmm possibilities and your sag* fistlon of naaos would b# halpful. $mm mmptmsmB m conc^nmis might svol/« for fatrthor conoldaration by tho Coa«ltto«. 2« Idontifioatijm of sajor problems, with repnssentation of a l l points of viswt Om of tfm first problsas for the POsearch director, in passing froa tho e^loratory phaso to th» main pro.ioct, will bo that of kmwlm, in so wldo a flsl4* which mibjoets and which points of diseussioii aro In mood of tho added light that fferthor rosoaroh »sy bring* What do th« experts want to know? What aost passl#s tho historians? ®hat i» i t about tho 3yst*$ that lnforuod son hftv* nsvor raally understood? To obtain f e x s i am key points A i s of the first ln$ortance# It should bs th» kind of focus that ceases from coordinating various points of visv • froa aen in and out of Soaixi aad Banks, from taachsrs and students of fInano* siid business, from economic historians and politlosl scientists* X& order to help obtain focus, and to g*t rounded ^presentation, the Cowsaittee mig^it ear* to ask a dossn or so persons, psrtieularlv int^mstsd ami qualified, for a fttX statoseut on the qu«j?tions conearoing ths history, mn% and ftntotioninr Of tb$ F»doral :%serv« System nhioh to than ®ost ispertant and sost pussling:* This msthod of •nriching th» rasaareh .islsacs of a project has bsan triad els*** A with suceass} i t saass to pro?* ths ssor* successful vhsn an homraries of IHO0 or 1200 for thoughtful sarg»»ti«^« i» offered with t&£ rs^usst* ^ » Cosodttaa might lik« to coosider such an idoa* (A ^ist of ocaasicmal advisers or consultants on a £m basis follows at HM end of this s»ao.) After this original approach, ths CoBuaittaa wl&& wish to establish a procedure for intaradttant consultations with such a raprasentati?* ^rcmp in the ftotureu Tha same gro»p# or sosae »«l«ct€fd indivldnals from i t , siifht bt fonwd into an advisory ^roup for the Consltt**! this sight be don« directly or thrm)ii?h th« faoiliti#s of Brokings. Itsd«#d It mirht be dusimblo to hava such a Conadttaa nsatisg perhaps sesd^annually to twi*w pre^msc* For tha political scientists Br# f # t# Kay of Harvard or Arthur McMahan of Columbia midit be suitable* Among I the historiana Frad Laa® of Johns Ho^ina and who haa apanding «oae t l s » with tht iieckafellar foundation ainht be halp&tl and 00 al«o Arthur Col«« well b« «OIM OR thia cr©% th#ra sight of th« tiamss mentlonoc a« p o s a i b l l i t i a t for Gowaitte© staff abov® ws& with th» addition of p®rhap« «uch as Dx*# ^ohn i i l l i a i a s , Br« C. C» Abbott, newly mm»& Dean of the Or»d«at« Scho©l of tha (W^if«ity of Virginia, F, ^rril Jama, Pi^ncipal of MeOiU Oniif«r»ity, Upland Eobinson of ^orthMiatorn Univeriaty, r*tc« In t h i s , as in th« pwvioue oas@f m»pons@8 by tha Conaittaa could jpoaaibly provid® a c©nc#asue for further coapi^ad frog i^taff l i a t t Ocoaaional Adviaar* or Conmiltanta (On fa* baaia) FXfCT PttVEUEVCK LIST John K. Wtniama * John w# Clark 1* W# Hoatov • 0 # Griffith Johnaon-* ^# Hmm MEUm C0UBHIA «#I.T. OHZCiGO * Ia*l J # KaiRllton <mt, SERVICE * Pawl Ho«an - OCIa F. » , ifcchlttp Fettar Frits •- m m Arthur %ithiaa or S t e u d S. ^aaon - Horwan 3« Buchanan QnaliXlad persons* preaently la active service, who aisht be persuaded to get leaves froa present posts to serve as Hese&rea assittant *nd eventually i^iraotor of Hese&roh (providing salary we* aoelsd to their current Karl K Bop© - Philadelphia R. 3 . SlUs - California Kfcser Tood - University of Missouri Xt«V* Chandler • Frinoeton Bray Heaaond • Xdvini? tenporarlly in Italy Harold !»« Hesd* Cornell (now about 66 yaars old) F. Cyril torn** SfeOill Richard Sfcsgrs** * Miehi^aa Cosjpetent yamwr s^n who sight be considered as Assistant sad eventually Director of BfearsJa, (in order of t» * IIKI* fcs« connection 1* Paul K9 MoQimotam ^inneapolie ^nk# former U« of Kiohi^a dirsetor of researoij 2« John Untner or Harvard to^uate Sohool of Learenoa E# Iho^paon Ba»iisoas Adsdniatration 3» V'iotor IT* Longatreet *Jfederal Reaarve Board IfSd Bdaeion abroad !&• 8ariy 0* Johnaon Cambridge tJaivenity (also tlnir* of Toronto) $• Jaaea 1 # Ford y 6, (toy Freutol S t . Louie Bank Washington tl#f St« Lottie ?• *«. C* Bradford northwestern ft* aarren L, Stoith 0, of Virginia 9* Donald C. 3linor f Div. of &» 6 S # Federal Bsserve Board XO. Janea Tooia or Hew lork Sank R. C# WaUich, Yal* University April 28, Mr. W. Randolph Burgess Deputy to the Secretary Treasury Department Washington, D. C. Dear Randolphs The Goasaitteefs application i s being carefully considered at the Rockefeller Foundation and my impression from the discussions with Dr. Willits who has asked some clarifying questions i s that the reaction i s favorable thus far* Of course nothing i s certain until final action is taken. I t i s desirable to do everything reasonably possible to anticipate any questions that migfct arise during the course of consideration. lou are the most significant figure in the entire matter, yet there i s no coiaaunication from you directly! there are only some statements aade about you in a document filed with my signature as Secretary to a Cowmittee of which you are a member. If you feel that you could reasonably do so, a letter froa you expressing desire for the project to go forward and committing yourself to major responsibility and time on a not too distant (but not specifically identified) occasion i t mig&t be helpful. This would simply amount essentially to saying directly what you have authorised to be said in the report. And i t may be unnecessary and nay never be used. But i f the need arose i t could be quite useful. If you care to write such a note you might address i t to Dr. Willits and either send i t directly to him or let me have i t to be used only in the event of imed. In the latter case I should of course want the permission to l e t Dr. Willits know of i t s existence and contents. This letter i s not written out of ray unstimulated imagination5 on the other hand i t i s in no sense imposed as a condition nor a formal request. Cordially, Donald B. Woodward Secretary cc: Miss Mildred Adans April 27, 199* Miss Mildred Ada&s Cosifiittee on the History of The Federal Beserve System 33 Liberty Street Sew York h$9 K.I. Dear Mildreds This is just as it was dictated - and that was done with several interruptions. Why donft you make a respectable product of it. tilth what you accomplished in making a great document out of the proposal for funds you can do it with lours, DRAFT FOR CQMSXDERATXOg B* HISS AQAMS OP A DRAFT FOE CONSIDERATION BK DR, CAUCDiS AJJD I B . BUHCBSS OF A i»AFT ma ojusimRkWjh m THE <x»irasi Since submission of our application to the Rockefeller Lon I have talked twice with Dr. T&llits at his request to clarify a few of the points. He feels that the proposal was well prepared and, while nothing is certain until the meeting on May 21, the proposal thus far appears to be on the right track* Consequently I suggest that the Oomittee sight well begin to think about procedure to be followed in the event that we receive word in late Hay that the application has had favorable action and that the funds are available. There are two points which are of especial importance. Furthermore if the Committee does reach any concensus of opinion on these matters before the Rockefeller Foundation seating, the conclusions aright provide interesting supplemental information for Dr. WilXits in the event questions arose. The two chief questions are as follows: Page 2. 1. Finding a major staff man. Our proposal stated (Page ly) the Committee's aim is to find a well equipped and exceptionally able Besearch Assistant, with the necessary acedemic training in monetary matters and sons experience in acfcainistration who had the capacity to play a major role in the project. Such a person would, after a year or so as ada&nistrative assistant take charge and carry forward* Hiss Adams would then be in a unique position to embark upon a major writing part of the project. This individual will be a higily significant factor in the work of the Committee, Therefore he will need to be most carefully chosen.'*' I should think there are several possible avenues of approach. One would be to seek an individual sufficiently close to retirement and with sufficient qualifications as to be interested in moving to this job in the near future. Such a person might be George £• Roberts of the National City Bank or W» A. Berridge, Economist of the Metropolitan Life Insurance Company or §« H. Kiddle recently retired from the Bankers Trust Company where he was after some services with the Federal Reserve Board. Another approach would be to seek a presently established person who would want to db the job and who might be able to get a leave of absence or who mig^it see this as a big enough opportunity to wish to take it and hope to find another post at its termination, (If there were the possibility of an appointment at Brookings this might also be a factor.) Ralph Young of the Reserve Board staff has excellent qualifications and so I should think does Donald Thompson of the Cleveland Federal Reserve Bank, Ft. J. Saulnier of Columbia, Pago 3* Lester Chandler of Princeton, or Burton Hollowell of Connecticut Wesleyan - to name a few. let another approach would be to seek a good young person who might hope to make this the springboard for a major career and who has already demonstrated marked capacity* Probably Halpfa Young, or Saulnier or a number of others could suggest names. Perhaps the Ooecuittee would wish to have prepared a statement of its objectives and the kind of person it is seeking and send such a statement to a number of Koonoadsts in this field and ask their suggestions. lour preferences in these possibilities and your suggestion of names would be helpful* From responses a concensus might evolve for further consideration by the Committee* 2* Identification of major problems and representation of all points of view. In order to help obtain focus on the more important questions, and to obtain the Interest and Suggestions of a representative group of individuals interested in the endeavor, the Committee might care to ask a doaen - o r fifteen or twenty - particularly interested £*•***-*qualified persons for a thoughtful Statement from them on what questions seem most important about the.history, development, functioning, of the Federal Reserve System. These individuals mi#it be told in a memorandum of the Committee's existence and objectives and asked to write thoughtfully their suggestions; in order to make them more serious about it a fee of *100* or £200• might be offered, the group might be chosen frcm among the most qualified academic, financial and business students, and I should suggest it ought to include one or two economic historians and one or two politicsl scientists. o Fage I. After this original consultation, the Gosaaittee might wish to have the procedure for intermittant consultations with such a representative group in the future. The same group, or some selected individuals from i t , might be formed into an advisory group for the Gansndttee 5 this migiit be done directly or through the facilities of Ift-ookings. Indeed i t might be desirable to have meetings perhaps seai-annually of such a Committee to review progress. For the political scientists Qr« V. L« Key of Harvard or Arthur HcHahan of Columbia might be suitable* Among the historians Fred Lane of Johns Hopkins and who has been spending some tine with the Rockefeller Foundation sight be helpful and so also Arthur Cole* On this group there might well be some of the names mentioned as possibilities for Casualttee otaff above and with the addition of perhaps such as Dr* B« C. Abbott, newly nsmei Dean of the Graduate School of the University of Virginia, f. Cyril Jsmes, Principal of McGill University, Roland Robinson of Northwestern University, etc* In this as in the previous case responses by the Goiaaittee could possibly provide a concensus for further discussion. DStfilw COMMITTEE ON THE HISTORY OF THE FEDERAL RESERVE SYSTEM 33 LIBERTY STREET, N E W YORK 45, N E W YORK TELEPHONE: RECTOR 2-5700, EXTENSION 286 ALLAN SPROUL, Chairman With cooperation of W. RANDOLPH BURGESS DR. ROBERT D. CALKINS WILLIAM MCC. MARTIN, JR. WALTER W. STEWART DONALD B. WOODWARD, Secretary MILDRED ADAMS, Research Director THE BROOKINGS INSTITUTION 722 JACKSON PLACE, N. W. WASHINGTON 6, D. C. Or* Sobort f« CaUtas H U l a i Ho M* Itotin Jr. •" ** Ifel doci^f^t. **9vls"H In c.ceo relate-; v/it"- , which M«fc iodtor t« Cr. IlUita of t!» m 4 ro^ort of ti» pilot pgpo>etf ooat to Cossittoo X m *lm o^oooilttf ib» loltor of or that * oopywllii Uttor vrittoft ly Dr*feobartC*lkia« as Pr«iid»«t of th» Institution i s to follow* Xf# do^plto orofgroiio98 cars, you Had nnnXttono triMLoU m i bo ycm l«t u» know oo that «o wm ^wn» tfaom to £»• tttllta of£too« April 20, Dear Dr. Win its Enclosed with this letter you will please find tuo copies of the report of the pilot project for which the Rockefeller Foundation made a grant to this Committee in January, and a proposal for a larger project, the possibilities of which the pilot study explored* This proposal asks for the S O B of $310,000, to be expended over a period of five years for purposes con* cerned with the history of the Federal Reserve System and set forth in detail in the text* A. supporting letter from Dr« Robert Calkins, member of this Committee and President of the Brookins Institution to which we ask that the grant be made, will follow immediately* Very sincerely yours, Donald Woodward, Secretary toe* COMMITTEE ON THE HISTORY OF THE FEDERAL RESERVE SYSTEM 33 LIBERTY STREET, N E W YORK 45, N E W YORK TELEPHONE: RECTOR 2-5700, EXTENSION 286 With cooperation of ALLAN SPROUL, Chairman W. RANDOLPH BURGESS DR. ROBERT D. CALKINS WILLIAM MCC. MARTIN, JR. WALTER W. STEWART DONALD B. WOODWARD, Secretary MILDRED ADAMS, Research Director THE BROOKINGS INSTITUTION 722 JACKSON. PLACE, N. W. WASHINGTON 6, D. C. April 27, 1954 Dear Don: I am inclosing copies of two letters from Dr. Calkins, one to me and one to Dr. Willits. These for your information. I am also inclosing a letter to Mr. John Calkins of San Francisco, son of the man who was active in the early days of the San Francisco Federal Reserve Bank. Would you read the latter and let me know if you think changes should be made. I am abashed at having done so badly with the South and have no desire to create an incident in the West. Gratefully, Mildred Adams enc. Mr. Donald B. Woodward Vick Chemical Company 122 East 42nd Street NYC (17) MISC. 14O B (MISC. 14O B.I-3OM-6-S3) THE BROOKINGS INSTITUTION Washington 6 , D. C. 722 Jackson P l a c e , N. V A p r i l 26, Dear Miss Adams: , I shall be glad to see you toward the end of this week. Enclosed is a copy of a letter to Joe Villits, reporting our endorsement of the request filed by the Committee to the Rockefeller Foundation. I think you have done an excellent job in whipping this request and report into shape. It is a good statement. Sincerely yours, /s/ Robert D. Calkins President Miss Mildred Adams Committee on the History of the Federal Reserve System 33 Liberty Street New York 45, New York enc. MISC. 14O B (MISC. 14O B.I-3OM-6-53) THE BROOKINGS INSTITUTION Washington 6, D. C. April 26, 1954 Dr. Joseph H. Villits The Rockefeller Foundation 49 West 49th Street New York 20, Nev York Dear Dr, Villits; I should like officially to record the Brookings Institution's wholehearted support of the request filed with you by Mr. Donald Woodward on behalf of the Committee on theHistory of the Federal Reserve System. The Committee requests a further contribution of $310,000 for a continuation of the exploration and research on the history of the Federal Reserve System over the next five years. This request contemplates the continuation of the existing relationship between the Brookings Institution and the Committee. The Brookings Institution is glad to act as sponsor and as fiscal agent for this research undertaking. In this I express the views of the Advisory Council, the President, the Chairman, and a number of the Trustees. Formal approval of this arrangement will be sought at the Trustees meeting on May 14, and I have every reason to believe that the arrangement will be formally ratified. As pointed out in the submission, some of the arrangements with the Institution remain to be settled. We are confident that these matters can be handled to the mutual satisfaction of the Committee and the Institution. Sincerely yours, /s/ R. D. C. President cc; Mr. Akers Miss Maroney Mrs. Wilson Miss Adams cct Miss Adams April 23, Mr. Edwin Hyde Miller k Khoads Richmond, 7ft* Dear Mi Hiss Mildred Adaas toe Research Director of this project will be in Richmond to visit the Federal Reserve Bank on Friday, April 30 and Monday, May 3« In view pf your interest in the subject I thought you might be willing to talk to Miss Adams a little if your tiae permits. She will telephone you soon after arrival. The exploratory project of this Committee is nearing completion and we bam just filed an application with the Rockefeller Foundation for a 3argar grant of funds to extend the Committeefs activity for a considerable period. Ho one can be sure what will happen until the Foundation acts, but we have hopes. May I add that Miss Adams is a most esteemed friend with whom I have had associations for a number of years on the London Economist and in other adventures. With wannest regards. Cordially, Donald B. Woodward Secretary April 23, 195U Mr. T. C. Houshall The Bank of Virginia 800 ft. Main S t r e e t Richmond, Virginia Dewr Tom: I am not sure whether I have told you of this extracurricular activity. It is operating as an exploratory project on a small grant from the Kcokefeller Foundation; results have been so encouraging that the Conaittee has just filed an application with the Rockefeller Foundation for a larger grant to make activities possible for several years to coae* Mo one can know what will happen to the application but we have hopes* Hiss Mildred Adams is the Research director and will be in Richmond on Friday, April 30 and Kay 3, Monday for discussions at the Federal Reserve Bank. I have told her that your view of the Federal Reserve System and your position regarding it for many years has been one from the outside and seeing the desirability of sembership. It would be very helpful to her if you could see her while she is there and afford her some greater familiarity with that view. Hay I add that Miss Adams is a most esteemed friend with whom I have had associations for a number of years on the London Economist and in other adventures. With warmest regards* Cordially, Donald B* Woodward Secretary COMMITTEE ON THE HISTORY OF THE FEDERAL RESERVE SYSTEM 33 LIBERTY STREET, N E W YORK 45, N E W YORK TELEPHONE: RECTOR 2-5700, EXTENSION 286 ALLAN SPROUL, Chairman With cooperation of W. RANDOLPH BURGESS DR. ROBERT D. CALKINS WILLIAM MCC. MARTIN, JR. WALTER W. STEWART DONALD B. WOODWARD, Secretary MILDRED ADAMS, Research Director THE BROOKINGS INSTITUTION 722 JACKSON PLACE, N. W. WASHINGTON 6, D. C. April 22, 1954. Dear Don: I telephoned Mrs. Williams this morning to head off your kind suggestion that you remind Calkins about extending the pilot project grant through the month of May. When I came in I found on my desk a copy of a letter from Calkins to Willits which I am enclosing. As you will see he has taken care of the matter in complete detail. It is always educational to see how foundations talk to each other. On Friday I shall not however expect you to talk as one foundation to another. Best as always. C KJ (US. Mildred Adams, Research Director. Enc. Mr. Donald B. Woodward, Vick Chemical Company, 122 East 42nd Street, New York 17, New York. April 20, 1954 Dr. Joseph H. Willits The Rockefeller Foundation 49 West 49th Street New York 20, New York Dear Dr. Willits: On January 21 the Rockefeller Foundation made available |10,000 to the Brookings Institution for an exploratory study of historical materials relating to the Federal Reserve System, This grant was for use during the period ending April 30, 1954* &nd was to be administered by the Brookings Institution in collaboration with the Committee on the History of the Federal Reserve System, As you know, Miss Mildred Adams has been in charge of this exploratory work. As her progress reports have shown, she has turned up a great wealth of material and has important clues to further materials which we hope may be made available to the Committee. I shall not review in this statement the variety of materials which she has uncovered. Her own review is presented in earlier memoranda, which I believe you have received, and likewise in the document which the Committee is sending you today, requesting a further grant for the continuation of this work. In this letter I should like to request formally an extension of the existing grant from the period April 30 to May 31, 1954. This request is being filed at the suggestion of the Committee in order that we may have the benefit of Miss Adams1 services during the month of May and until the request for a supplementary grant can be acted upon. If a further grant is obtained we intend to continue Miss Adams on this assignment. For the next few months she would pursue her exploratory work, and thereafter be assigned to research activities. We believe there are distinct advantages in continuing her services without interruption. An extension of this grant for one month would permit us to take care of her salary and other expenses for that period. To date the Institution has expended only about half of the grant, so that there are ample funds for meeting the expenses in the month of May, if the extension can be granted. Dr. Willits -2- U/2O/5U A further reason for this extension is to permit Miss Adams to complete some of the work begun during the past few months• This she would need to do even though the funds for a continuation of this work were not forthcoming. In view of the possibility that the Foundation may be willing to make a supplementary grant for this work, we are suggesting an extension only for the month of May. I have confirmed with Miss Adams and the Committee regarding the project which is being submitted to you today. As soon as I have received the final copy of this request I shall send you a formal statement expressing the willingness of the Brookings Institution to act as fiscal agent and to cooperate with the Committee in the continuation of this work. While a number of details regarding publication and operating practices have not yet been agreed upon, our informal discussions offer every indication that these matters can be settled without difficulty when the occasion arises. The Institution is very glad to cooperate in this undertaking, and in this expression I can report the views of both the Advisory Council of the Institution, the Chairman of the Board, and other members of the Trustees with whom I have had an opportunity to discuss the matter. The arrangement will be submitted formally for ratification to our Board of Trustees on May 14., and I have every reason to expect a complete endorsement of the actions taken. Sincerely yours, President cc: Mr. Leland DeVinney Mr. Akers Miss Maroney Mrs. Wilson Miss Adams April 20, 195U Dr. Joseph H. Willits Rockefeller Foundation h9 West U9th Street New Tork, K. T. Dear Dr. Willits: Enclosed with this l e t t e r you will please find "feet) report of the pilot project for which the Rockefeller Foundation made a grant to this Committee in January, and a proposal for a larger project, the possibilities of which the pilot study explored. This proposal asks for the sum of §310,000.00 to be expended over a period of five years for purposes concerned with the History of the Federal Reserve System and set forth in detail in the text. * The supporting l e t t e r from Dr. Robert Calkins, a raemijer of t h i s Committee and President of the Brookings Institution to" which we ask that the grant be made, will follow immediately. Very sincerely, Donald B. Woodward Secretary DRAFT Dr. Joseph H. Willits Rockefeller Foundation h? West Itfth St. New York, N.Y. Dear Dr. W i l l i t s : Enclosed with t h i s l e t t e r you will please find the ifeport of the p i l o t project for which the Rockefeller Foundation made a grant to t h i s Committee in January. O*v*&~ $-* 8* Proposal for a larger project which the p i l o t oxp-lfrfrationo vnvt eai'i'ioii w*>. This Proposal asks for the sum of $310,000 # 00 to be expended over a period of five years for purposes concerned with the History of the Federal Reserve System and set forth in detail in the t e x t . The supporting l e t t e r from Dr. Robert Calkins, a member of t h i s Committee and President of the Brookings Institution to which we ask that the grant be made^ w i l l follow immediately# Very sincerely, 0 ~f- J DOMESTIC SERVICE V_ Check the class of service desired; otherwise this message willbe sent as a f ullrate telegram FULL RATE TELEGRAM X DAY LETTER r >£JIGHT LETTER NO. WDS.-CL. CFSVC. PD. OR COLL. "WESTERN UNION J 1206 10-51 FULL RATE LETTER TELEGRAM >£HIP RADIOGRAM W. P. MARSHALL, PRESIDENT CASH NO. INTERNATIONAL SERVICE V Check the class of service desired ; otherwise the message will be Bent at the full rate TIME FILED CHARGE TO THE ACCOUNT OF Vick Giieuicai Qo., 122 ji.i*2nd b t # , N.I . 0 . Send the jollowing message, subject to the terms on bac\ hereof, which are hereby agreed lo April 20, DR. WALTER W. STEWART COUNCIL OF ECONOMIC AWT WASHINGTON, 0 . C. APPLICATIO!? T. BOGORUJHI JDUIIDATIuN FOR IUOU0. ESSfiRVK KL&toKI PROJECT FUNDS PKEPARED Al-TBR COKSULTATIwM WIT: DE. WILLITS Hkb m& APMQV&O HT ALL OTHi;R KtKHKUt! OF Q O H B S n UO$ OKI KIWOR aiAt^rES. tfK PLAN TO SUHilT THE APPUOAIIDN IOEKALLY TODAY ASSttilNG YOUK AP?ii>BATlGii ON MLSU Of PREVIOUS CONVERSATION. I F TOU liA^E ANY 9MXX0I ^SAik, TELEPHONE »u OR MISS A D ^ S . . WDO.AiittD 4 Date: TO: Mr •„.. Dona Id Woodward For your information FROM: W. http://fraser.stlouisfed.org/ Room 3434 s^V. Federal Reserve Bank of St. Louis RANDOLPH BURGESS E x t . 2352 April 16, 1954 Dear Miss Adams: The revised draft for the proposal to the Foundation arrived a few minutes ago and I have read it. In general it seems to me in fine shape* In the paragraph of the document which relates to me, I should like to suggest some changes, and I attach a revised sheet for that purpose which I think is definite enough to do the Job without putting all the nails in the coffin. You will notice that I have taken out the sentence about its being a fulltime job, which I don't really believe it is, but I suggest wording it in a way that avoids a commitment on that matter* arise?~f am suggesting a revision of the paragraph relating to William Martin. Otherwise, I have no suggestions to offer* I am sending this along now since I shall be ia White Sulphur on Monday* Sincerely yours, Burges* W, Randolph Burgess Miss Mildred Adams Research Director, Committee on the History of the Federal Reserve System 33 Liberty Street New York 45, Hew York Enclosures c*c. to Donald B* Woodward » . . . , * , • • , , - 13-A Per | 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 sane 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 Hew 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 in- dicated 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, tf Interpretations of Federal fLemerve Policy'*, and author of "The Reserve Banks and the Money System", which has for years held an outstanding position as a text book and reference book in this field. • 18-A (Continued) He is a fellow of Brown University, a Trustee of Teachers College (Columbia), of Robert College (Istanbul), and of The Carnegie Corporation. For obvious reasons this cannot ret be publicly announced* Mr. Burgess has fro® the beginning of the pilot phase been an active participant in Committee discussion and will so continue during the remainder of his service at the Treasury, . . . . . Revision on Page 14 • • • • Mr, William HcChesney Martin, Jr., comes from St« Louis, where his father was the 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 1941j Chairman and President of the Export-Import Bank in 1946; U. S. Director of the Bank for Reconstruction and Development; Assistant Secretary of the Treasury in 1949. 1951 he has been Chairman of the Board of Governors of the Federal Reserve System. • • • • Since COMMITTEE ON THE HISTORY OF THE FEDERAL RESERVE SYSTEM 33 LIBERTY STREET, N E W YORK 45, N E W YORK TELEPHONE: RECTOR 2-5700, EXTENSION 286 ALLAN SPROUL, Chairman With cooperation of W. RANDOLPH BURGESS DR. ROBERT D. CALKINS WILLIAM MCC. MARTIN, JR. WALTER W. STEWART DONALD B. WOODWARD, Secretary MILDRED ADAMS, Research Director THE BROOKINGS INSTITUTION 722 JACKSON PLACE, N. W. WASHINGTON 6, D. C. April 15, 1954. Dear Don: Here is the masterpiece. I would like to have been able to have you see it before it went to the other Committee members, but the changes are as we discussed them last night and I hope my pencil has not betrayed me. We will, of course, have to do a complete retyping job and the proper setup for the Rockefeller Foundation. I will find out from Dr. Willits1 secretary how many copies are usually prepared for them. It looks as though it would be both fat and impressive when finished. t" K Best as always. V Very sincerely yours, i Mildred Adams, Research Director Enc. Mr. Donald B. Woodward, Vick Chemical Company, 122 East 42nd Street, New York 17, New York. J^L,ipX.% ' PBOPOSAL Introduction, In January 1954 the Rockefeller Foundation made & grant for & pilot project leading tovitrd & history of the Federal Reserve System. The ifttsediat end was to find out vh&t materials vere available for such KQ undertaking, Ma terials sot only in the sense of p&p«rs, bat also ©f the. living meis©rl«ik of active in the early days of th« Syst^i* that tftffe has be«» carried on since January 15th. It hue yielded extraordinarily good results (a report of its findings to April is «tpp«»d«d)* aad there is every reason to beller© that as tvea greater h&rwst of papers imd 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 sad saeaories, it uncovered that s«n*« of personal struggle und sccoaplishateat VHich is the living core of my institution. It enlisted interest and it ensured oooperatioa for the future* It points the vay very surely to the next sad such bigger task which lies ahead, and for vhieh the Committee oov askt the eonsideretios of the Foundation* In calling itself the Committee on the History of the Federal Reserve System, the group presenting this proposal defised its primary purpose* But the discoveries, contacts and dismissions sade during the pilot project have deepened the eon tent and videned the scop© of th&t purpose. The Comsittee nov knows that what needs to be done is mueh worm than a si&fle .history ©f the Passerve Systeas - it is an appraisal of on# of the *so*t eartrmordinary inventions in this desjooracy, 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 of vhich change came, the process by vfc&ch decisions vere ®&&e$ the importance of ^ersooslities, the interplay between s*ubllc policy ©nd private needs these various angles of approach and aaay aore which fc*ve be®n augg#et«d from tjjae to time by Cosemittee members testify to the vitality of the subject sad to the lessens vhich can b« leexntd for othur d^iiocratlc institutions fc^ a detailed steady ©f Its experience. Vby The laport&nse of the subject i», however, greater than a matter of the t&ateri«il dealt vith or the people dealing with it. It goes much farther th«ua the ta#k of history writing$ vital as that i», #ja«i farther than what are cosaonly considered the tosevfiat narrow coafinee of the banking vorld* («) Of all the innovations in goverruaeat sseohajaisma which Americans have brought about during the twentieth oeatury the Federal Reserve Sy«t«a stands first, &a& not only because of the unprecedented functions which It is called on to perform. It operates with a high degree of autonomy linked with & fine sense of publle purpose. To aa extraordinary escteai it has managed to pr*a*TT* its freedom fros both Comgr©8«ional m& Executive pressures* la periods when it has be#n forced to yield the public protests against »uch yielding have been continuous until the pressures hav# softened &n& the balance tea be«js restored. (b) Virlting in 1946 about twentieth century ;sonet&ry controls, Profasiwr l^burt Vmnmn of the Institute for Advanced $tmdy observed that in the nineteenth century there developed * aev type of society, the r*on«y eoonoi^f, vhich fnade new demands on those who administer Government control over the supply of itcmey. "High and low, rich and poor, bond and free thftr<s had always been, but n«rmr before h*d there be*m »n sconoiay that expected the ss&Jorlty of it* people to be totally depso&eat upon the continuity of a str«&a of asoney income*. Along with other observers Professor ¥&rren interpreted the primary task of the Federal Reserve System as one of seeing that this continuity of th© stre&ia is not interrupted by monetary failures. To do this it bridges the g&p between public and private ©ffort« to influence the eeooo&y* 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 on# isethod after another, oa^y to reach for a new one vhich promised better result®, Analysis of these experiences fons important chapters ic both monetary « E 4 economic history • (c) In the praoftise of tb© functioas laid upon It, the System has ©alisted and trained staffs vho«« skill &n<l devotion to the System's vork stands ia notsble contrast to that of certain other goverai&ent&l iastitutloas^ Hot only hav© they veathered forty years of political storms vith a g&nifauis of vulaerability) the £»yst«a &» a whole, by soae ctirious magic, has withstood political attack from both parties. Tensions which in theory should have split it apart sema somehow to have been laporUot factors in holding it together* (d) An analysis of the changing experience in design and is operation of this unique governmental mechanise would have great value. It is lsporta&t for the future performance of the System and of the American economy. There is reason to believe that sueh analysis may hold lessons of great value vhich can be applied to problems of organisation in both governmental sad private life, far removed from the process of snometary III The questions which this study would illumine fall into two categories. There are in the first place what saight be called the technical issues, some theoretical and some matters of operating policy, which have absorbed the Syst«mfs attention at one time or another in its life. These appear in annual reports, they are high-lighted in government hearings, but in both instances the questions which an informed and iap&rtial student might ask are diverted by the exigencies of the Taoment. Enough time has elapsed, for instance, sinee control of the discount rate was first used by the System as a tool of monetary policy so that its importance under varying conditions can be veighed and studied. The saae thing is true of changes in reserve requirements, and of the tool of open amrket operations, let a vast amount of controversy still surrounds then, some of which could be resolved by competent studies. Beyond the technical points at issue (of vhich 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 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 Bombers been worked out? Row can the System's 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 degree of importance in American life, arrived at? How does the System influence the operations of Monetary mechanism at moments of crisis? What lessons are there in the relations which prevail between Board, Beserve 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 Reserve Ey* tern, Including the Board and the twelve regional b&nks, fro® their inception. Much has been written on the events, crises and personalities which led up to the founding of the System, but even this needs re-studying in the light of newly discovered material* V« would therefore set out to make a complete search for the &a~ terial «md the people concerned in Federal reserve legislation, theory and operation, going baek at least to 1907 when the Aldrieh Commission functioned. From 1913 forward v@ would undertake to discover the cast of Influential characters in th* 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 senior officers of Heserve Bank*| Members of the Federal Advisory Council, the Open Market Cowaittee tmd allied bodies; men in academic life (as for example, Oliver ¥• M, Sprague and John K, Villiams) who have been in close and Influential contact with the System during its years of growth, the method to be used is that which has successfully been developed during the pilot project phase of this study. It includes visiting Board and Banks, both to search out men who reiaesber early days, and to ascertain how records are kept and what local records are availablej the establishing of the nemes of the dramatis per&onae, the recording of brief biographic data concerning then, the request for interviews if they are still alive, the search for their ptpmre 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, havst taught us that the comprehensive study of the Federal Reserve Systew 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 o the writing process. Logically, the©© t&r«* appear to b« M y H l H | just &s in the pilot project the process of discovery of papers, gathering of and building of card files appeared to be gepar&te. Actually, process iu the pilot projeet £«d and profited from each other. The success of that project was in no oaiall psrt due to whet seemed at time* a handicap - namely, that all three processes were nec&es&rily going on at mm* Were it *civi sable, in viev of that experience, to try to carry on the archival, the interview &n& the history-writing processes of th# main project one at a time, In aeries, we might propose that the grand design move forward in two ph&aee. A reeding of the report on the pilot project shows how anich has betsa started, and hov such remains to be dose. For em* ample, the research director hoped to visit all twelve Beaerve B&cks during the pilot phase, bat the volume and variety of work under way forced post~ ponament; aiost of those Backs di#taRt from the Atlaatlc »#eb&&r& rmmin to be explored. The mapping sad survey stage uncovered not only papers and memories. It also set the pattern for the study of those papers and thoie memoirs, A great deal more must be done along these lines before the master filet of papers and other m&terit&s &re reeu&y for the student's use. Sot only must the master files be completed, but the p&p&r* vhich have been uncovered during the pilot project, and the collections still to be found, oust be analysed for pertinent material. The Haalln diaries, recently released from a ten-year seal, stand alone in terms of the preparation and indexing lavished on thea, but #ven the Handle diaries are cew ground for the student* Someone aust read those 26 voluaes and evaluate them for the purposes of any comprehensive history of the System. o The v©r& to be don© m other ooll«etlon» # not jp*t sorted or clsas* lfi*4, i s WNPi extenalve. The 8&tloB«l Records Management group i t f i i to atert « pilot staiy of a similar group of papers in order to efe&rt costs vork out efficient ©etfeodt of l&mOLing* tomg P»rk«r Vlllls from bis work at the F@derml B«s«r?@ Bsnk la Boston to survaj a father1® papers i f tfeii mrm «rr«ng9d« Th« Qolo«nv»l8«r p*p«ra, the (## Miller pap#r» ar« d«atia«d for tinia CoaadLttee's use* These and wmjr aor® must b# elatfified asd »«t In order. Bat ev#n while tetting down th#se 4»aall escsmplea of ^tae large macHsat ©f work -wtilch remains to be done la the first tn© proce*»ei ve recogaize hov Inextricably llukad vith them i s the third process* During the pilot phase Hi became svare of writings under vay and needing eneour&g«aent vhloh would be Toloable for our parpoaea and vhich would 'be finished the sooner i f they could profit from the worfc we were doing. Rea«art$i into the peat i s aot v«ll don# ia a v»eeti»a or without the added »pwt of a peraofi waati to use i t s results• the histori&s vfco eajs vork with renearebers, tfeeir dataf atiisulatlag ^ad broadening their eesreh by hit qu#»tionsf h&s « richer content to drwtr from than the one who utmrta after the researah prooesa i s finished and filed We therefore propose to aove fonmrd vith three groups- of all of th«a Vital to the eoaprcheasive study wfelch i s the core of this 1. (1) f© eontio-ae m& conpiete the • i s i t s to Bo*rd arid banks, the eeareh for records, the intcrrieving, the hunt for paper* and the reeording of diacovered ^^terial whleh im.a o started during the pilot phase, (2) to continue and complete the biographic, bibliographic end chronological master files which were started during the pilot phase, (3) to make available to qualified students that part of %te CoMiaittee1* research material which is pertinent to their Inquiries, (4) to work out problems of handling related collections of papers and putting the« in usable shape for students. This may include financial aid in certain instances. (For exaople-, 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 hare 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. Such men as Boy Young and Walter Vyatt of the Board, George Harrison, J. Herbert Case and Leslie Hounds of the New Xork Bank, John Sinclair and Ustair Slenktivics of Philadelphia, are of this type, and there are tsaa>- more. Just as the Harvard Business Studies group finds a tape recorder valuable for catching the living word in key interviews, so ve might profitably avail ourselves of this technique in selected instances. 3* Writing Th» writing &&d •dlti&g fell* into three (1) The monographs - In & study &s •Kteusive aad important as this the mooo^r&ph plays & key pert. In so&e Instances I t stands by Itself, if & definitive study of one p&rt of a •related vhol*. In others I t act* &• &n introductory study and may l a t e r b« incorporated into the vhole. The pilot phaae uncovareu certain ssonograph ideas, gone of tb«tt »t4rted f others oaly in the pl*uaaing sUge* f For Carl P»rry# ROV retired from %h» Bo%*d staff, should be eaeour&gfcd to complete his h^lf-iloii© aouogitfeph on Selective Credit Controls, * subject in which he has had aetiv© as veil as theoretical l»ter«*st* Gardner Petterson of the Ijatenaatle&sl Flamae© Seotioo a t Princetoa OniTisrsity would like aid to write a study of Reserve International Financial Operations in the 1920s; Lester Chandler, also of Priuoeten, vould like aid to v r i t e a long siOitogr^ph or & short book on wBe& Str^ag, Central taker*| two «,b.le me»y Dr. Karl Bopp of the Philadelphia Federal Bftgerve BaiiJc and Professor Idvard Sh&w of Stanford d i v e r s i t y ar« #&«h iutez^stod in © study which aigiht be called «the Art and Polltloa of Central B&nfciiig,* So have btoi ;M4« la r©ganl to such work* These are, however, listed &g shoving the caliber of work vbieh Uais Coasittee woiild like to eucourage, fojr vhich i t would use funds. •10(2) Major Works Of thea* the definitive history Is th© cor© of the projact and the oas tovsrd vhleh ve continue to point our •ftd**vor«* V# believe that Its writing will tak« e good three y»ars on the part of » distinguished scholar who hat already shova the skill and judjpwnt which the ere&tlon of moh * hldtory d^HMida. T^* taak of «xplo* ration «isd recording of «sat«risla will b« carried further and th# fl»ld of poatlbl© »cholar» will continue to b» th« high cost of subsidies for major ve would h#sitat« to n*«« other volt^*a for vhieh if* *r# *abitio\i# w»ro i t not for hop#s tfeat at l®***t of tb«*« sight flad publiefttion through eemm«relnl *nd voul^l B«e4 from thl* Committo* l i t t l e ®&r# feelp thai* c$n fc» provided through eoaiult«tioB f u»e of f peftiapi « m t l l subsidy for stenographic from the bftflnsilsg believed tb*t DM pl®f of psraoaitlitie* vould be «a ia^ortaut factor la euy emtnentel op«ration rad tfe&t • volume of biographic eeeera on key figures could be writtea to M to i l l u mine v&riouft facet* of the Syetesa. Ve also thiak th*t ft volume of «s»Aye on erisee in th« banking world, follow lag the volume by Oliver M« VC* Sprague oa History of Criee Under th« ^tlonftl Banking gytstom would be ao isport&nt contribution vhleh might find publication through regular channels. There would be others as the project develops* (3) Editing and .Publishing of Docuwntg The Coisadttee's staff has noted wltfe interest the British example vherebf documents bssle to central banking la England, including key ®p#^ehes mnd maiioiranda as veil at legislation, warn edited and published under the t i t l e Gregory*i Select SfostuteSi .lEpeuascnt* a&cl Fteiaortg Relating to British gmnklngt X832~3&« CSomparable material in imerlean banking praetla® is soatteredf and. sight veil \m gathered in §os# much volume« It bat also been suggested that a eomprehensiirt s&nn©tat©d bibllogrsphgr sovering both published and "unpublished worksfe«mri«gon tlie System vould be a sjoet useful ^jntrlbutioB to research activities. In addition i t i s -not improbable that seleoted papers froia tb® irarlo^s collections under BKTWJ m®y prove so YsJtaabl* as to deserr® publles-tlon* Ro deelslcms have been aeds- la this field, but we l i s t this tctirity as one In Which the Coasftltte© say engage. Use of Materials The Board and the Be serve Bank of Hew York hav$ been particularly interested in the work of this CoisfBitteej individuals from these luititutioms, both officers and staff hav© been actively participating la i t . Both Board and Bank may face problems of participation v!*en worm recent events come to b« dis~ eusaedj the availability of eonfidential m«-teri«ls eoverlRg recent events wcy also present & problem. The existence of tteit problem aust b« recognised, but the Committee i s confident that & solution will be found vMeh will neither hamper the project nor strain either the willingness or the ability of individuals or institutions to continue their eo-©permtlon. ^ ^ ^ ^ * ^ ^— }rv**% Qrgimltatlof^ ffersp^e^and The grant for the pilot project v&s a®4# to the Brooking* Institution j an In formal working errangefaant waa @st&blish®d thereby the President of Br@okii.if # bmvmm a member of the Gownitte®, vork vss doa« under Cotwitte® supervision, and Brookinge acted as disbursing snd bookk©©pir*g agpnt* iastitntion also ,f^yaiish»d officn spaa® in ¥*0hiagtos for th» , es did th« f@derml E#s#rv# Board, Baoause th* Conad.tt«« va« oonpoc«dt of t%\&y mm$ the function fell most frtquontly to i t * feer^t&rj, I^II«14 Woodvmri, at one tin* on tiM fcgH's staff, nov Cbslr^an of th© Finaisc^ Coaaitt«* of ITiek » fht oth@r nnwab#r» of the Comsiittt* h»T» mlso ^bo-wix steady fenei iat@r@st i s th» pilot pr©Jeet and k«f« b®«n generous with tin* atsd vb«n called OR for oononltatioa* thu dally W5rk wa# carried o s t y s t a a l l »taff beaded fey Mildred Maa» as Bes^arch Pir^etor, ^»sist«d fey Ea.th®rin» Kcftinatry twho ahared h#r aklU aa re®©«$reb. a#gistaot and her tiae b#tye©J3 the vork of this Cesaittee .und that of Br* Jofca 1« Villiea« f consultant to the Federal Beterv# Bank of $ev York) &nd two yt*usg typists* All th#s# nisistit aaeigned by the Bank froa i t s ovn staff, their salsri^s peld by the The Bank al«o ampplied vorkiug apftc® and furniture. This «&me plan of organisation, witb soiae aodifleatioaai i s the one ve would MtjMMMfti for the eomprehenaive study. The aseociation hetveem &a ad hoe cof«dtte# and Brookings Institution i t Bnuaual, i t hat values for both groups and y reeosesesd that i t eontiaue. Certala probleaa in th«t relati^ifelp v i l l arise wh#a the puhliablzig t t a f t i s rsmehed, Tfeeae problemt do not, hovewr, ©all for Immediate folMtloa mid their rmmlring &ot disturb th# %mrk of this Coaalttee. c -13- o The Ceottitt**1* functioning, *nd Its relation to the tfsall st&ff, would continue along established Unas. Thus f«r the Ccmittee hes been kept inforaed of vork accomplished through progress reports put out by the research director, through personal consultation, end by discussion in meetings. Meetings v i l l be held vhen needed,• they v i l l be called by the Secretary with the consent of the Chairman* The identification of interests between the Coasmittee cieabers end the vork being done v i l l mmke for continuing oversight an the part of members* (b) Personnel Ike Mtjor project v i l l be put in charge of a scholar of wide experience &.nd attainments vho v i l l have genersl supervision ov®r l i t 9mri«IM perts and vho v i l l h l B f l f undertake goiae of the vriting esgignwent« vhich the Coanlttee contemplates* Mr* W« Beadolph Burgess, presently Deputy to the Secretary of the Treasury, will occupy this poet vhen his present vork at the Treasury i s completed* An active stember of thi« Co^sittee, he brings to the post an extraordinary combinetion of prscticsl experience in conetery affairs &od scholarly accomplishaent. A graduate of Brovn University, he got his doctorate &t Coli«bi« in 1920 and vent t t once to the Federal ^©serve Bank of 8ev Tork. He became r^pui^r Governor of th&t Sank in 1930, and Vice President in 1916* To this experience in central banking he &&ie& fifteen years 1 experience in cosaaereifcl banking' ss Vice Chairman of the national City Bsnk and then Chairman of i t s executive coamittee* In 1953 he returned to the Federal Reserve Baok9 only to go to the Treasury as Deputy to the Secretary* The breadth of his scholarly interests i s indicated by the ffcet that he hes been &t various tiar-es President of ih% American Statl«tlenl Association end the Acadesy of Pvolitical Science, &a veil as of the iB«rloea Bankers is«ocietion* Mr* Burgess i s editor of a volune of papers by Eenje&in Strong, "Interpretations of Federal Reserve Policy1*, and author of "The Reserve Beaks end the f « ola«*lo ia thi« floltf of literstvro, for e&vioi*© roaoans t h i s cannot yot fe® publicly the eonsltttont i f f i m * Mr« Burgoaa v i l l gi^e fulX-tlfrc to this Ho has frs® tho boglimiitg ©* ^ ^ p i l o t ph**o b«#i* an aetiir# pwtiltpMit COMB!ttoo dtaeitMloa and v t H so eostlitu* cluriid^ tht rm&tw&w @f his at the fiMMWjr* Dorl-ag tSi»t lataria h« v i l l e0atiuiM to Iwi &sai*t»& In ^- Mr* B M w i t i a g •>»<! Jlfst*® feff#lra far tlit Tfi0 SoonoRlst (of Lsttdon)* H f «wMMirch division of too Mattel Llf« tasumne# Co»pcuogr and boose* fir-t't of tli^t i&&tltuti&n« Ho I t sov ttfeitSNMI of tho F1H«BC# Oflonittoo of th® flck ChofsloAl Corpora Uoa* T&© OlilOt foupp isosbors of tho i n t&o m0a#tar^ fl#ld« CORES! tto* tro, of couro*| #xport«« tho Chairman, Mr. illasi Spro'ai, hag epoat hin id.thin ttM Fodord Segr#?vt S^«t«i« Storting in 1920 i » tho Furors! F of San Frsnelsoa %m mrv®$ ^i@r® too yours and thon ssovod to tho low ?#yk# Hi? hut b#»u Pre»i**ont of tli* Mov tork Bai& Mr, V m i M WcGsoMMor lte,rtia Jr. ese#is from a St. tout* i n oontml bftafclng# To oaqporionoo 1» tho yodoral looorvo Bsak of St* h# n i i i i ton ) p n of activity i n la* Invoetaont businooa* So ^R© Proal- dont of to* iwi lork Stack l^»h«»go frets X93S tw 1941 j QBMilMM ai*l Prosldont of Bscjmrt-Iujsort i^afe i» I f 4 4 | B. S. Blr«etdr ef tho Bank for !tooon«triiotion Dovolopatont; itsislitant Sterotaxy of thi Tro*.*iiry i a 194,9* H® I s no^r Chair* of tho Board of Governors of th« Fo^oral Kosorvo $y*toK« Iff* 'Ho%ort Cmlkina i s rmv Fr««,id#at of tho Brooklngs- Institution* Ho got M i doistomto l a 1933 vith • tho«i« en bankin£y wtat at ®mm Into aco^OKlo f loeturln^ an odonoi&io» both at St^af©r€ an*? at tho Snivareity -if California o -15where he bocfire Chairmen of the Economies £J*partsi«at and then Bean of the College of CoBaaaree* feetvoeB 1941 end 1947 he was Dean of the School of Business at Columbia University, and from 194? on h@ v&» Vic# President and Director of the General Mucatioa £o&rd« fcr* Calkias sexvea for five years as -Director of the Federal Reservefia&itof Sew Xorlt. Dr. Vialter V. Stevart &1&O has csabJUed &c^asiaic with and investment experience* Pi-ol'esaor of economics at Aaherst College 1916 to 1922, he then w i t to the Federal Hsserve Board as Director of the Division of Research and Statistic*• In 19-$ a« became Ecoaojaic Adviser to the Bank of Ingland; in 1931 he « M appointed American Member of a special coa^aittae of the Bftult of International Settlements to look la to German reparation obligations under the loung Plan* Ho waa for soae ti^e President of Case Poawroy and Coapaay, an invastaent hoas«. trustee of the Bockefeller Fouadatlon, Chairman of the General idueation Botxrdf Professor at the Xustitute for Advanced Studies, he was la 1953 sailed to W&aktKigtoc to b«e€»ifte m member of the Coonail of Economic Advisers* As Besearch Director, Mildred Aaass who iuiti&ted &«d carried through the work of th© pilot phase, will continue during at least the e&rly period of the a&in study* Miss Adams (la private life lira. V* Houston &©nyon, wife of a Sew fork attorney) is an economist by «duc&tion Mid a journalist by training. To ©xperi©sc© in feature vritiag for the iiev York Sunday tiaesf Barrons Weekly and various other magazines she added edltori&l writing for Business Week, and for The tcoiios&st (of London). She has recently been United Nations correspondent for the latter publication* In order to ao the amount of visiting of Reserve Banks which the study needs, Kiss Adiu&s jaust have an asslst&at capable of accepting more responsibility for administrative detail than o&n be deleg&Ud to Miss McXinetry -16i f the pfert-tise arrangement for the l e t t e r ' s services prevailing under the pilot project I s to continue. The Committee's ei&i i s to fiai a v*ll«»ecuipped &nd exceptionally eble research insistent, «ith the neees&ary acedeMe training in isoijet&ry mutters end some eacperience in administration, vho has the capacity to pley « major r^le in the project. Such a person m&4 f i fter a yeisr or so ft© edminigtr&tiv® ea^istsnt, tek© charge end carsy forvard. Hle» Idems v i l l then b« in a unique position to «absrik on a ®ajor vriting pert of the project. In addition v© wauld ne@.-4 s aecretary vith research experience, (Mies MciCinstiy i s go exceptional t^iat ve vould like to keep her, even vith thttendloep of p«rt*tiae i5erri«?e)# I t may be nee«8S£Ty to •<!£ secretarial help in v?»ahington# and provision for "feis contingency will be made in the budget, (c) Q-qerters %®re i s reason to believe that offices and equipment eeeigned for the pilot project by the Federal Begerve Board in Washington, the Breakings Institution feiad the Federal Reserve Bank in Sev Tork v i l l continue to be sv&jisbl t h i s provision of rent-free quarters aad equijsaent (the Federal reserve Bank imposes I verv isominal fee for furniture rental vhich i e ssore tAuBrs eotmterbalenced to? i t s ®a.sy operating service;?) is a concrete instance of the Interest vhieh the System la taking in the entire project* Boar?? tad Banks are slso Eeking important contribiiticng i s the form of material &nS of research aasi stance • Their continued o o - p e r r t i s n i s of cotirse c r i t c l factor i s the process* (d) Budget In the exploratory phae*, personnel of Board fend Benks h&ve been helpful and co-~perative vith gp«cielis«d knovledg* &n& t i s e for discu9ilon# The Committee1! debt to librarians, heads of research departments, purchasing agents, secretaries who helped out is vtry real, and fiaancially substantial* Significant parts of the cost of Ibis project vill be provided by contribution** from the Syst&a In the form of rent-free quarters, use of equipment, consultation* with officers, hours of work on the part of librarians, research aides, purchasing agents, secretaries, and other stsff member*. The Board and the twelve Reserve Banks have evidenced continuing Interest. The Treasury files are open to us, the i&aauscrlpt division of the Llbrsry of Congress and interested people in the University libraries ar© rendering us «11 possible aid. The Couaitt## ^^bers themselves ere serving without compensation, and vlth no allovances except for oceasional travel expense* In addition to these large Gontributio&s fros? the Syste® and other groups, contributions which in themselves attest to the l&portanee of this project, further funds vill be needed to carry on this study, Tfct costs which c«a be estimated art preponderantly for staff salaries, travel expenses, supplies (limited laostly to stationery and archival materials) and subventions to be used in three v»ys - to be paid for the study and evaluation of collections of p«p#rs, to acsiat th# writers of aonographs, to defray the cost of major works. Based on experience in the pilot project, we have Bade estimates la two groups, one for en early period when research expenses mid travel co#t« will be relatively high, the other for a later period when the heavy costs will take the fora of subventions and other aids to writiag and publishing vhich are th@ goals of this study* These budgets should be taken as •fftlastftt only, aad ve would ask that a high degree of flexibility be allowed the Committee is allocating the funds for which it asks. There may be instances in vhich provision for salaries will be transferred to grants-in-aid, and vice versa, depending on the situation* Estinatas J\aa» 1. 1954 to L&tsr Period ,000 to provide « r«$e&roh director, administrative assistant, r®®mrQh secretary, secretary for the project feead, typist Salaries #40,000 travel Costs 3,000 ?rnvnl Costs 2/) 00 Other e3ip*m»e& 1,^0 Other $xpmm$ 1,000 fwum for writing 15*000 Aanml t o t a l Funds for writing 149,500 Totals for earlier period t o t a l s for l a t e r period Total for five years Annual total | 9^>CK)0 .211 ,.000 $310,000 The arithmetic in this table i s worked out on a two Aotumlly we cannot t e l l mt this will b© a-ridlabl® or J\ast how f&st mm® st^ps oa» go, T!i#refor®, ask that the i i p i a i l t H i cunr® be l#ft f?. Is rimi of th«M ©stiwat^i th* Comsltt®^ r«sp*etfull7> rtqtumts th»t for th« 'f«»rp©s@ d«a©rib«4 i© t h i s propossl th* Boek«f«ll«r Foundation grant 1310,CKK3 to b# ®xp#Bd#d 1B the fiv# y®&r® b®tw@gs Jtm« 1," 19§4 m& May Th» grant' »h©!uld go t© th# Brookings Institution with iSsm ia§ that i t s r#ipongibiliti*» aa<l thoM of the Cowslttee tov&rd th# proj#©t sr« oatusl, ®a4 that an informal r«latioa»hip b#tw««m t!s# tvo boditi compar«bl« to that wfelsfe proT«d so #«tisfa©toiy during th« pilot ph&s# i s to eoatliMMu Ths report of th« pilot project, which r«T#&ls ths wealth of materials fowid and indie&tas tfe® riehiMiss yet injeoYsr@d> Is f r -19- z V<er Bagehot mid •Money will not issnage Itself*, To which the late &smtel Gk»ld«nw«lser added his pla* for *&n imderit^adirjg of this atftjor force$ of its causation snd consequences*. We are convinced that the rol© which central benkleg plays in the saanngesient of aoaey ^ill b® even greater is the future than it is now. It is the hope of this Conasittee that the study proposed will contribute to its hotter *mderstending. MISC. 34.1 35 M 10-29 FEDERAL RESERVE BANK OF NEW YORK C. .FIRMAT1ON OF TELEGRAM COPY FOR INFORMATION OF MR. D. B. WOODWARD Sent to Members of Committee on DAI LETTER the History of the Federal Reserve System WE HAVE TODAY TELEGRAPHED YOU AS FOLLOWS: TO BE MAILED April U , 1954 After consultations following discussion by Coaa&ttee on History of Federal Reserve $ystem at April 7 meeting, draft for presentation to Rockefeller Foundation asking $300,000 nov being finished STOP I believe the draft Meets all points raised including personnel to be responsible and adequate latitude for arrangements suitable to Committee members regarding latter part of period and for working out of relations between Committee and Brookings STOP Draft will reach you Thursday or Friday and your suggestions essential not later than Monday, April 19 STOP Exploratory project has been remarkably successful ead I am confident that the grant, if made, will produce an extremely important and valuable contribution. IBWskm Donald B* ¥oodward W^<£ K ^ , April S, 19$h Dr. Joseph H, Rockefeller Foundation U9 West hWi Street Kew tork, Hew Xork Dear Dr. Willits: Attached hereto is the draft proposal of which we talked on the tele* phone this morning and let me emphasise again, that it is a rough draft. There are several points on which elaboration is being developed at present i 1. The extent and method of treating more recent history, 2. Relations between the Coasiittee and the Brooklngs Institution, and 3. Hethoda to develop the history. x> You will doubtless have further suggestions which I hope you can give me on Monday. I will be in your office at three o•clock Monday afternoon. Cordially, Donald B« irfocdward COMMITTEE ON THE HISTORY OF THE FEDERAL RESERVE SYSTEM 33 LIBERTY STREET, N E W YORK 45, N E W YORK TELEPHONE: RECTOR 2-5700, EXTENSION 286 ALLAN SPROUL, Chairman witf, cooperation W. RANDOLPH BURGESS DR. ROBERT D. CALKINS WILLIAM MCC. MARTIN, JR. WALTER W. STEWART DONALD B. WOODWARD, Secretary MILDRED ADAMS, Research Director of BROOKINGS INSTITUTION 722 JACKSON PLACE, N. W. WASHINGTON 6, D. C. o l I TT - COMMITTEE ON THE HISTORY OF THE FEDERAL RESERVE SYSTEM 33 LIBERTY STREET, N E W YORK 45, N E W YORK TELEPHONE: RECTOR 2-5700, EXTENSION 286 ALLAN SPROUL, Chairman With W. RANDOLPH BURGESS DR. ROBERT D. CALKINS WILLIAM MCC. MARTIN, JR. WALTER W. STEWART DONALD B. WOODWARD, Secretary MILDRED ADAMS, Research Director of BROOKINGS INSTITUTION 722 JACKSON PLACE, N. W. WASHINGTON 6, D. C. yj cooperation IJMAJL U~| Utuj JUr^,,,. . April 2, 1954 Beer Dr. Calkins* The meeting with Dr. Burgess and Mr. Sproul today came to the following conclusions: 1. that a proposal which was too elaborate or too specific would defeat i t s e l f either through becoming too ponderous and expensive, or through inability to get agreement on details; 2. that the best way to proceed was to agree in general on what were the Important things to be done, namely (this i s in substance A.I* of the skeleton of 3/23) (a) to continue the work done during the pilot project; (b) to edit and publish certain documents (see A.I. 3 and 4)$ (c) to find and hire the proper soholar for th© history which i s fee core of the project; (d) to make the CoMnittee1® research f a c i l i t i e s available for students and provide help perhaps in ttie form of small subventions or secretarial assistance* For this Dr. Burgess proposes asking for $250,000 to be spent over five years (vhich would give us $50,000 a year)* This would be supposed to support a. small office, the editorial and research workt and leave rooa for soa© peripheral subventions. The office would be allowed $20,000 a year, which i s based on the original estimate of $10,000 forjsix ciqnt&fi^. the writing of the history would cost perhaps $20,000 a year ( i t i s essused thst the bank will continue to house the Coffin!ttee although this has not been specificelly stated), leaving $10,000 for printing, subventions, travel, e t c . This is a rough eusai&ry of en interested and interesting meeting, other two pointg made were that the proposal to accept a cutoff date of 1935 was not possible and Mr. Reifler would be overruled on it, and, second, that the problem nov is to find a form of vorda and presentstion vhich will be generally acceptable* Sincerely yours, Mildred Adams, Research Director* Dr» Robert Calkins Brookings Institution 722 Jackson Place, K. V, Veehiagton 6, D. C # IU U REPORT ON PILOT PROJECT Vhen the Committee to Study the History of the Federal Reserve System first proposed to the Rockefeller Foundation a pilot project, its objective vas preparatory work leading to a comprehensive study of the System. "Papers vhich form the source materiel should be located, classified and roughly 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 eoaspreh©naive study should be sketched end its possibilities bulked out* The exploratory study would at least hope to answer the basic questions, Mwhat?*, *where?" and H who»? w . Toward the end thus described, the Foundation generously granted $10,000 to the Brookings Institution and worked started January 15, to end May !• 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• Tnia has been in the best sense of the word a pilot project. The exploratory process, superficial though it hsd to be, 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 aaore 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 m&n, •work in the Federal Reserve System has been a lifetia© 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's Vho file of persons; one a time file which co-ordinates persons, pertinent events, legislation} one e bibliographic fiel of published and unpublished material^ one a - 2 - subject file* These master files are arranged so thet they could be photostated for the benefit of students working on a l e t e r phase of the project. They ere by no means completed, but their pattern i s set* Papers When we set forth the terms of the pilot project we said that w the papers -which would be needed as source material in writing an adequate history are scattered among Government, banking and private files* I t i s not even known what exists, nor where some of what exists could be found*" To remedy this situation has been a f i r s t endeavor* We have not yet located everything we set out to find, but we can now answer the question "Where"? in so&e d e t a i l . 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 bibli* ographies of basic material which i s printed, and in the more difficult hunt for related material which i s not printed* Ve know, for example, that material covering the Liberty Loans of Vorld War I was sent from the Treasury to the National Archives, and that the records of the Capital Issues Committee ere deposited in the same place* We have a l i s t i n g 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—end we have a similar l i s t 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 ia finished* Meanwhile, we h&ve been in correspondence with e l l of them, and are receiving information 8s to their own stores of local historical material* We have in preparation a master l i s t of besic material which we hope to send for their checking. If this device works, i t 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, we have located enough collections so that we are now facing problems of handling, indexing and permanent deposit* This search is by no meens complete, but it has already uncovered riches which will be of greet use to scholars if they can be Bade 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 s 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 feet 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 Vilgon, 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 es to datej 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 the following paperst The papers of Mr. Charles Hamlln. first Governor of the Federal Reserve System, are in the Library of Congress. These consist of 245 volumes of which 2S 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 H. Parker Willis, member of the Organization Committee and o . • 4 m o ft the Board*s first Secretary, are in the home of his widow on Steten 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 &n& classifying, (See isain protest proposals•) The papers of Paul M. Varbury vere mostly destroyed efter 1930 when he wrote his own two volumes on the Federal Reserve ^rstem. 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 meaberj there is also a diary dated 1915 and covering "daily happenings bearing on the work and policy of the Board" fron October 4- to 24, 1915* There are in all five volumes of miscellaneous materiel dating 1912 to 1913, some of it highly interesting* This material is in the hands of Mr* James Warburg 8t North Greenwich, Connecticut, and permission for its use isugt be sought from him. The collection is not so extensive as to need further work for itg use. The papers of ffr. Jesses 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* 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 file© of the Federal Reserve Board, but a small collection has recently been found in the home of his widow, and negotiation© are now under way to have them available to this Committee for sorting and evaluating* The papers of Benjamin Strong, first Governor of the Federal Reserve Bank of Hew York and in that post until his death in 1923, are divided between the Bank* the Firestone library at Princeton University, and a Hew fork storage warehouse. The Bank's collection occupies six file drawers and consists of addresses, memo® and correspondence with leading personalities in the United States and Europe, la addition that portion of the filing j^rstesi which was set up during his lifetime is permeated with Strong material incorporated in the subject files* Penalsalon for study of this ss&terial smst, of course, be sought fro© 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 ¥ar 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 ar© also there* The materiel in the Lincoln Warehouse, under the control of Mr. Benjaa&n 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 Hew 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 Hew York Life Insurance Company. Ihese, like the Strong Collection, have the great merit of pre-» senting material culled from the mass of daily work? they are therefor© easily handled as well as very valuable to the student* This CoBmittee h&.s permission to consult them. • 5 * The papers of Charles Daves» of the Daves Flan, are in the Deering Library at Northwestern University* They include diaries, journals, scrapbooks and Kemoranda, rough-sorted end put in chronologicel orderj these include materiel relating to the currency question from 1900 to 1902, and to the Aldrich-Vreeland Act of 1908, as veil as later material on the German debt question. In addition to the papers of Woodrov ¥ilson, the Library of Congress also has the papers of Calvin Coolidge, Charles Svans Hughes, snd Mevton D. Baker who was Wilson1s biographer, Senator George Norriff, 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* Edvin Keta&erer are mostly in the Firestone Library at Princeton University. Some memoranda are believed to be in the hands of Mrs. Kemmerer. The papers of Qgden Mills» Secretary of the Treasury and Chairman of the Federal Reserve Board in 1933f are in twenty-five boxes in a garege on Long Island* A small attempt at sorting vas made by Mrs* Mills, vho got through some five boxes and then decided the job called for expert advice} otherwise they a-e intact, e.n6 just as they cecie froic the Treasury. Word has just come that after having consulted with this Coffisiittee 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 still in Mr. Meyer's hands. A biogrepher, Sidney Hymen, is at work on them* The papers of Homan H* Davis were given to the Council on Foreign delations, vhieh recently sent them to the Library of Congress as a final piece of deposit. They include some five file drawers and. a huge box of unsorted material* The Library of Congress hag promised to have it reedy for students in two years* The papers of Dwight Morrow, who played an important part in the international negotiations of the 1920*8, are being prepared for deposit in the library of Amhurst College, where they are expected to be available for use after June, 1954• A small collection of the papers of Leon Fraser h«s beentendedto this Coomi ttee, but little of value hes been found in them. The papers of Oliver V. M. Sprsgue, at verious times consultant to the Treasury and to the Board, are in the hands of his son in the Sprague residence* Stimulated tjy inquiries from this Committee, Mr. Sprague is now sorting end classifying the material his father left. The papers of Walter Llchtensteln. for two decades (1926-194-3) 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* The papers of Baanuel Goldenweiser. research officer of the Board from 1922 to 194.5 end author of various studies, a^e at present in a storage warehouse in Princeton, Hew Jersey. Conversations with Mrs. Goldenweiser indicate that they may be made available for study this stonier* (See main project proposals•) Banking, Holiday Group Obviously this list of 26 pertinent collections which ve have located ie by no means exhaustive. persistent search. I t does, however, show what riches can be uncovered by All t h i s , end much more, must be studied by anyone now aiaing to review the System's work and i t s place in the American econaoy# Meanwhile, men s t i l l active in the System are known to have been acciaBulating papers vhich, if they can be preserved, will add greatly to the available materiel* The student of Federal Reserve banking may vdth reason long for the tiiee when the speeches, correspondence and memoranda of modern leaders in Federal Reserve theory and practise are made available. I t i s to be hoped that this Committee may be active in persuading these raen to leave their papers to e responsible depository vhere future students may consult them* Persons The other chief object of inquiry in the pilot project was personal HThe men who have acted as architects and builders of the present Federal Reserve System are already beginning to disappear1*, we said in our f i r s t presentation. ^Those l i v - ing, whose memories form a most valuable supplement to any papers which they may heve, should be approached and asked to contribute personal knowledge and access to papers before i t i s too l a t e . " The process of interviewing has been throughout this pilot study one of the major occupations of the research director. Starting frois a l i s t on which Com- mitteeffie»btij?sindicated their own f i r s t choices, the interview process has widened to include seme sixty-odd persons, most of them officers or staff members of th# Board or banks* In general these interviews served a purpose soffiewhat different from that which was contemplated when they were started* In the f i r s t 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 th# hiasan atmosphere of * 7 m whatever period was under discussion. In some instances they also brought forth valuable memories of key moments, end 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 months1 tim«. The interview technique has proved full of surprises. Far from being less valuable than was anticipated it hag 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 &s 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*1. We now have in hand the early stages of vhst 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 includes A bibliographic file of unpublished material, put together in a form suggested by the Manuscript Division of the Library of Congress, where collections sre described roughly on cards, and more exactly on larger ^registers11 of the material in the collection* A bibliography of printed materials basic to any study of the Federal Reserve Sjrs A bibliography of the works of the earlier Board members, Bank Governors and Directors. A biographic file o f persona active in the System, with date m to their - 3 careers both in and out of the Federal Reserve* A chronologic©! 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 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 Heserve Bank of New York where a small staff wss assigned to this work by the Bank from its own personnel, one in the Brookings Institution. Th« 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 size and importance of that larger design has loomed larger and more complex with everyday*g work. Ve said in January thet 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 snd all valuable• Under these circimstances 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 many different angles. The proposal as submitted represents those aspects of the grand design on which the Committee is agreed*
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