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July 2,

1P1PB1AIRV 1919



My dear Strong:

I tiok up with Kelley the question of arrangements to permit
the use by you while abroad of State Department cable facilities.

Mr. Kelley has arranged the matter with the State Department and
will now try to secure from them some form of letter that can be
handed to you as evidence of/the fact that the arrangement was
Yours very truly,

Mr: Benj Strong, Governor,
Federal Reserve Bank,
New York, N. Y.








Address by


Philadelphia, Pa
Friday Evening, May 12, 1922.

For Release in Morning Papers,
Saturday, May 13, 1922.



The topic assigned for discussion this evening "America and
the Debts of Europe" is broad enough to allow of considerable latitude
and does not necessarily imply that discussion is to be limited to the

debts of Europe to America, but I take it that it is with such debts
that we are chiefly concerned, and I propose to speak particularly of
the debts not of European governments to our government or even to our

people who have purchased the bonds of European governments, but of
the debts which business men, manufacturers and bankers of Europe awe
to our business men, manufacturers and bankers.

With regard to the great debt of our former allies or associates
in the war to our government I merely want to say in passing that I

have been rather surprised as to the source from which the principal
demand for its early payment appears to come.

If this demand came from

the great financial centers or from men of large incomes who pay the

most burdensome taxes, it would be explained by the desire for relief
from taxes through the application of the sums received to the reduction of the war debt, but it appears to come from producing centers,

and particularly from agticultural sections which are dependent upon
export demand for their products for maintenance of prices.

It would

seem clear that early payment of any part of this debt must decrease
the purchasing power of the people of the allied countries and must
therefore make for lower prices for the products we sell to them.

It is of course well known that European merchants, traders and
bankers owe large sums of money to Americans.

Even if we had no direct



proof of this we should know that it must be true from the fact that
large flotations of foreign securities have been made in this country
without turning the tide of gold importations.

Since last October

the foreign financing in this country has at times almost equalled
the current trade credit balance, but gold importations have continued,

with only a slight slackening due evidently to the stoppage of gold
production in the South African mines



How much of an unfunded trade balance is there?

This has proven

an interesting study for economists and statisticians and they have
assembled many columns of interesting figures, but have differed considerably in their conclusions.

I think the first serious effort to

bring together the known facts, the visible items, with some estimate
of the "invisible" items was made by the Federal Reserve Board's

Division of Analysis and Research in the Federal Reserve Bulletin for
September, 1920.

A merchandise balance had accumulated in our favor

of $6,062,000,000 between November 1, 1918 and July

31, 1920

and it

had become very evident long before that such a one-sided trade could
not be carried on indefinitely.

The Federal Reserve Bulletin


to light offsets that appeared to reduce this balance If more than six
billion dollars to about three billion dollars, adding that "from this,
of course, must be deducted the amount of indebtedness to European and
other countries which existed at about the time of the Armistice."
This was followed the next month by a much more elaborate study
by Dr. B. M. Anderson in the Chase Economic Bulletin on Europe's
unfunded debt.

His conclusion was that "on September 15, 1920 Europe




owed an unfunded debt of over $3,500,000,000 to private individuals,

banks and corporations in the United States," this being in addition
to the ten billion dollars which European governments owed to the

United States government, and in addition to the debt of Europe to
investors in the United States holding European securities.


Anderson maintained that the primary explanation of the tremendous
expansion of bank credit in the United States in 1919-20 was "our

unbalanced and unfinanced export trade, together with the rising
prices, fictitious prosperity, and speculation which have grown out
of the unbalanced export trade."

Our exporters had borrowed money

from our banks in large amounts because of inability to collect what

was due them abroad, or because they had taken payments in foreign
currency balances which they thought they could convert into American
dollars at more favorable rates of exchange later.

Dr. Anderson

declared that computations as to the unfunded balances owed us on our
world trade were not par,ticularly valuable - that the European balance

was the only one that countea, as the triangular exchange of goods
and of credit by which America's credit balances in Europe had been
settled through debit balances with South America

and the Orient had

broken down.

This idea was combatted by Prof. John H. Williams in the June,
1921 Review of Economic Statistics of the Harvard University Committee
on Economic Research.

He gave reasons for believing that it is still

permissible to subtract from Europe's debt to us the amounts we owe
to non-European countries, and his final


was that the un-

funded debt to the American merchants, bankers and corporations was



'considerably smaller than others had estimated.

"Our international

situation since the Armistice," he declared, "has been less alarming
than has frequently been stated.

It appears improbable that our

unfunded balance exceeded a billion dollars at the end of last year"
(December 31, 1920).

Our unfunded balance from Europe was estimated

at from half a billion to a billion greater than our balance with
the world as a whole, but he concluded "It is not possible to believe
that so prolonged and pronounced a recovery could have occurred
(in European exchanges) had London and the Continent been indebted
to the United States - besides the $10,344,000,000 of obligations
held by our government and the private long term indebtedness - by
some three to four billion dollar'.

In November, 1921, the Federal

Reserve Bulletin returned to the subject with a much more complete
statement of items of credit and debit than in the study of September,

1920, the conclusion being that so far as visible items, and items
which could be estimated with some approach to accuracy were concerned,
the sum due our merchants, bankers and corporations was on October 1,
1921 no less than $3,403,000,000.

The Bulletin mentioned offsets

that might reduce this amount, such as the speculative purchases of

foreign currencies by Americans, but did not attempt to estimate their

This sum referred to our trade with non-European as well as

with European countries.


It was swelled half a billion dollars by

of an item with relation to the cost of cancellation of

European war contracts in this country in 1919, an item not included,
I think, in any previously published estimate.



The February 1922 Federal Reserve Bulletin pointed
out that in October, November and December our favorable
balance of trade was a little less than $300,000,000, from

which gold imports of $125,000,000 were to be subtracted,
leaving the net addition to the unfunded balance $175,000,000,
and conjecturing that the invisible items plus foreign financing probably more than offset that amount.

The unfunded

balance on January 1, 1922 was therefore given as $3,400,000,000,
lopping off $3,000,000 from the November estimate.
There have, of course, been other contributions on
this subject.

The journal of Commerce on Monday, April 24th,

published a number of articles by leading bankers and economists,
and the economic magazines have published occasional papers,
but generally speaking these have added only an item or two to
the studies already referred to, or have expressed opinions
without bringing much that was new to their support.
It is noteworthy that the main studies of this subject
cokincided with periods of depression or of recovery in sterling

Sterling had been pegged during the war at 4.76,

and when allowed to take its own course after March 18,


began to fall until in February, 1920 it reached a low point
of 3.13.

It recovered to 4.00, then fell to


in August



at the time when the first study of unfunded balances was made
in the Federal Reserve Bulletin in September of that year,
followed by Dr. Anderson's study of October.

In the Spring of

1921 there was a remarkable recovery with cable rates at or a
little above $4.0o for more than a week in the latter part of

May, and it was during this period of recovery, or before the
reaction from it had proceeded far, that Prof. Williams made
his elaborate contribution to the Harvard Review of Economic

It was natural at that time to find reasons for

believing the unfunded balance much less than had previously
been estimated, and Prof. Williams'

conclusion that so pro-

nounced a recovery could not have occurred with so great an
unfunded balance as three or four billions of dollars seems

By the time of its publication, however, in June

the reaction was well under way and before the end of July
sterling rates were' as low as in August of the year before, below


from the 19th of July to August 6th.




When the Division of Analysis and Research of the Federal Reserve
Board made its second and chief investigation of the question of unfunded
debts for the November issue of the Bulletin there had been considerable
recovery, but the study was published or was prepared, just before the
notable rise in sterling, in French francs and in lira that began about
the time the Conference on the Limitation of Armaments met in Washington.

By the end of November British pounds had risen to about $4.00, and by
December 31st to 4.21 1/4, and by March to


Since March the

as proceeded less rapidly, but has been well sustained.


is no further talk of debasing the pound and British bankers express
confidently their expectation that par may be reached before the close
of the present year, or soon after-the end of the year.

1 i

There is no necessary conflict between the figures on the unfunded

balance as given in the November Federal Reserve Bulletin and carried


forward to the end of the year and other studies of the subject, with
the exception of one or two items, for the reason that the Bulletin has

not attempted anything further than an appraisal of known facts with
_such invisible items as had long been estimated as offsetting the balance
of trade, such as tourists' expenditures, relief contributions, emigrants'

remittances, etc., concerning which enough information could be obtained

upon which to base estimates.

As already stated it appears that the

gold imports, the known investments of Americans in foreign securities,

and the invisible items included in the Bulletin's figures have somewhat
overbalanced the excess of exports over imports for several months,

but for more than a year imports have been slowly increasing while
exports (in value at least) have been decreasing, so that this change
alone is not enough to account for the very pronounced and well sustained rise in sterling and in the principal allied currencies.


conslus ion seems inevitable that no such recovery could have been made

if there were still an unfunded balance due the merchants and bankers
of this country as great as three billion dollars.

That there was such a balance in the summer of 1920, when the
Federal Reserve Board first undertook an investigation of the subject
I have no doubt.

Liquidation had scarcely begun at that time, and

Dr. Anderson was doubtless also right in attributing a large share
of the overextended condition of banks in the financial centres to
the efforts of our exporters to carry this balance

Whether it could

have been cut down so much as Prof. Williams estimated by the beginning
of the year 1921 seems more than doubtful, but that liquidation and invisible offsets had by that time become well started is reasonably certain.

The Federal Reserve Bulletin has suggested that speculative

purchases of foreign currencies may have been a large item and has
also suggested that American exporters have doubtless charged off con,
siderable losses.

It seems probable that the major depressions of

exchange mark periods when our people were seeking to convert foreign
.balances into dollars and that exchange recovered when most of the
conversions had been made and losses wiped out.

Some very large

American exporters are known to have taken considerable losses in

-9this way.


They sold in terms of foreign currencies, and found them

when payments became due considerably depressed, but when recovery was
delayed beyond their expectations they finally bought dollars and took
their losses.

Very large losses are also known to have been charged off

by some of our bankers.
It should be remembered always that even if the balance of trade

were actually against us European exchanges would not be at their old
gold pars.

The principles laid down in the well know Bullion Report

of MO with regard to the effect of irredeemable paper currency on
exchange still govern.

With the English budget in balance and

British prices about as low as ours,sterling might be nearer the old
par than it is now if there were no unfunded balance due us, but it
can not go to par until, the paper currency of England is actually and

freely exchangeable for gold.

Predictions as to the future course of exchange are rather thankless, however.

As aleeady mentioned there were British economists and

bankers who declared no longer ago than last fall that the pound sferling

could never recover, or thatits recovery could not be attained without
a ruinous decrease of prices, and that it would be better to stabilize it
at about




There has in fact been a considerable decline

in prices in Great Britain and that decline has been doubtless a leading
factor in the recovery of sterling and also in the recovery of Britain's
export trade.

No longer ago than fpril 1st the editor of the Economic "Torld whose

articles are always worth reading and usually sound

predicted that "no


person now living will ever see the value of the present French franc
of actual currency normally and regularly equal to one-half of that of

the gold franc established by law as the monetary unit of France".

the time that was published the French franc was quoted at about 9 cents
in our currency.

It had been as low as

to 8.13 at the end of December.



1921 but had recovered

Within a little more than two weeks

Mr. March made this prediction French francs sold at

9.37 1/2,

and had little more than a quarter of a cent to go to reach half par.

They have since fallen back somewhat, but I see no reaspn why they
should not continue to advance, if France makes progress towards
balancing her budget.

They are not lower now than our Civil War

greenbacks were at one time, and complete restoration does not appear
impossible, though it may take a considerable number of years.

I am not going to undertake to estimate how great an unfunded
balance may still be due to the merchants, bankers and corporations
of America.

They had a severe lesson in 1920 and have since then



preferred a diminishing business for which payment was reasonably
sure in dollars.

It appears at any rate clear that they have for

many months been collecting or funding in some way, oil charging off
debts due them.

I believe that investments in real estate in Europe

and in the shares of European enterprises have been a very large offsetting factor.

Prof. ITTilliams states in the May number of the

Quarterly Journal of Economics that foreign investments in Germany
since the Armistice have been estimated at nearly $250,000,000, and




it is well known that Americans have been large investors not only
in German property, but in Poland, in Italy and in the states which
formerly made up the Austrian empire.

This item of foreign invest-

ment, with the wide-spread spectlative purchases of foreign currencies
might easily have amounted to a billion dollars.
The debts of individuals in Europe to individuals and corporations
in America, at any rate can not at present, I believe, be so large as
to present any insuperable bar either to the restoration of the exchanges that seem within reach of restoration or to the stabilization
of exchange with countries where inflation of paper currencies has



reached a point beyond the possibility of restoration.

of exchange, due to inflation, is annoying and introduces a very undesirable element of speculation in foreign trade.

An irredeemable

paper currency even if not constantly expanded is subject to changes
of value from political and other causes not related to trade balances
or international debts.

Our Civil Tar greenbacks went up or down in

value in accordance With the fortunes of the Union armies, and later
with relation to policies under discussion in Congress.

The deprebia-

tion-of some European exchanges has undoubtedly been increased by the
instability of some governments or by socialistic policies.
as Secretary Hughes has well said, must precede credit.


Given good

government and balancnd budgets something could doubtless be done in
the direction of stabilizing exchanges between countries havin
irredeemable paper currency and countries on a gold basis.


It would





12 -

probably be in the nature of recognition for fixed periods, or in
some cases permanently, of new pars around which fluctuations could be
controlled within something approaching normal limits.

No outside

or international attempts at "stabilization", however, could perform
miracles or take the place of the necessary internal conditions and
efforts in each country.

Stabilization of exchanges between the

United States and the neutral countries, whose currencies are not
greatly depreciated, such as Holland and the Scandinavian countries,
seems within reaCh on the former gold par bases, and foreign trade
would doubtless be benefited by such control of fluctuation as might
be instituted in other cases, but so long as our own currency is sound
and our prices attractive and so long as the pound sterling continues
to maintain itself at a point so near par, with francs and lira showing progress, it can hardly be said that the continuance or recovery

of our foreign trade are really dependent upon any such stabilizing







December 21, 1922.

Dear Governor Strong:
I read to the
ers of the Board this afternoon
your letter of December 1 th with' reference to the McFadden
bill which provides for universal exchange charges of $1.00
It seemed to members of the Board present that the
per $1,000.
letter was timely and that the conclusions reached that the
passage of the bill would be fatal to the par collection system
and would have a very serious and fundamental effect upon the
Federal Reserve System as a whole are well taken. The various
numbered probabilities seem to sum up the results which might
follow from the passage of such a bill.
Such a meeting of bankers and business men, possibly
with some of the meders of Congress, with a view to the
development of some definite position by the Federal Reserve
System may, it Seems to ma, become necessary or advisable but
my information is that there is no likelihood that the bill
will be taken up for passage or even reported by the committee
As you know, the Crelit
at this session of Congress.
Association watches this matter very carefully and I keep almost
in constant tote with Mr. 1-ea1ty, their agent here in Washington.
He called me up Yesterday to say that he had talked with Mr.
7.c77adien told him he had no idea of brin,ing
McFadden and
I am not quits sure of Mr. ':c7adden .
the bill Up at 'this session.
own position but he often introduces bills by request which he
does not fully a,ree with and I do not Itlieve he will be found
to be an opponent of the rar collection system,in Trite of his
former position in 1917 when we had the big fight in the Ecase
of Representatives on the subject.

yours very truly,

a7--ee?r-Acting Governor.

1r. Benjamin Strong, Governor,
Federal Reserve Bank,
New York, N. Y.



5101/1913VOD. :17.11V 70 331'1'10


March 14, 1923.

Dear Mr. Case:

Your letter of March 8th, together with letter
of Mr. W. L. Saunders, Deputy Chairman, dated February

28th, and copy of Governor Strongts letter to you,
dated March 8th, was brought to the attention of the
Federal Reserve Board at its meeting yesterday and the
Board unanimously voted approval of the action of
the directors of your bank granting Governor Strong
leave of absence of six months with half pay. We
all hope that the rest the Governor is to take may
speedily restore him to a full measure of health and
strength. .
Yours very truly,

Acting Governor.

1.. J. H. Case, Deputy Governor,
Federal Reserve Bank,
New York, N. Y.




March 14, 1923.

Dear Mr. Cass:

Your letter of March 8th, together with letter of
Mr. W. L. Saunders, Deputy Chairman, dated February 28th, and copy
of Governor Strongls letter to you, dated March 8th, was brought to
the attention of the Federal Reserve Board at its meeting yesterday
and the Board unanimously voted approval of the action of the
directors of your bank granting Governor Strong leave of absence of
six months with half pay.
We all hope that the rest the Governor
is to take may speedily restore him to a full measure of health and
Yours very truly,

Edmund Platt
Acting Governor.

Mr. J. H. Case, Deputy Governor,
Federal Reserve Bank,
New York, N. Y.


April 20 192.!.



Attention of Mr. Platt
AS I explained to you on the telephone this

afternoon, we

have received

a confidential cablegram from the Swiss National Bank, Berne, stating that they may

need a credit here of approximately *4,000,000. to be used by them in strengthening
their exchange should that prove necessary as a result of the use of a credit

recently premised by them to the Reichsbank.
advance, presumably against gold, and

short Treasury bills here.

They inquire if we would make this

whether as an alternative they could sell

After carefUl consideration of

the matter we have sent

the Swiss Sationel Bank the following sable reply which I read to you over



"Replying your cable April 18th we believe your problem
more readily met by sale here of Treasury bills which we believe
could how be sold in reasonable amounts on favorable terms.
desired would gladly discuss matter with issuing bankers here.
Your alternative suggestion of advance from us involves question
of general policy not yet considered in developing our relations

with foreign banks of iseue and which woad require discussion
with Federal iteserve board in Washington and other Federal reserve

As this might delay eeeisien unduly suggest sale Treasury
for present."

bills postponing question of aevance


J. H. Case,
Deputy Governor.

Reserve Board,
Washington, D. C.



December 22, 1924.


DEC 2 C 1924

Dear Governor Strong:

R S.

DEC 26 i924

I read to the Board this morning your letter in reference to the
McFadden bill, and your remarks with reference to the lack of protection
to savings depositors in national banks provoked considerable discussion
and I think was generally agreed to.
It certainly is very do
whether there ought to be any enlargement of the authority of national
banks to make loan,l_preal estate unless accompanied by a provision for
the segregation ofIneparate investment of savings deposits.
It seems to me regrettable that the Board is only now beginning to
mae a careful study of the McFadden bill apart from its branch banking
provisions, which occasioned so much discussion and division of opinion
that the other features were in a large measure overlooked.
May I suggest, by the way, that if anyone wants to suggest amendments to the bill such suggestions in order to be effective probably
should be addressed to Honorable Nicholas Longworth, the Majority Leader
in the House, or to Senator Pepper who has charge of the bill in the
Senate. The bill is on the House calendar and if the Majority Leader
approves is likely to be taken up when Congress reassembles under special
This is the general understanding, but I think no actual rule
has yet been presented to the House.
I am not suggesting, of course, that you Should write to either of
the persons mentioned, but merely that if anyone outside the Reserve
Bank has amendments to proposethat would be the effective way to secure
Yours very truly,

Mr. Benjamin Strong, Governor,
Federal Reserve Bank,
Npw York, N. Y.


/W. 11 1925













tyl nude,T.




July 10, 1925.


Employment of Expert Services by Federal
Reserve Banks.

Dear Sir:

At a meeting of the Board yesterday, the matter of
Federal reserve banks emnloying the services of experts
in the conduct of litigation, special studies, etc.,
was considered, and the Board voted that all reserve
banks, before making or authorizing such engagements,
shall first secure the approval of the Federal Reserve
Board thereto.
Very truly yours,

Edmund Platt,
Vice Governor.






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December 12, 1925.

Dear Governor Strong:

Following the meeting of the Advisory Committee of
Governors and Federal Reserve Agents held on November 3rd,
the Committee furnished to the Federal Reserve Board as
an interim report, copies of the minutes of its three
The legislative proposals approved by the Committee
were referred by the Board to the Federal Advisory Council
for consideration. The presentation thereof to the
Council at its meeting an November oOth was made
Professor Sprague. A copy of the recommendations
Council is enclosed herewith and also copy of a memorandum
prepared oy Trofessor Sprague commenting on the Council's
The legislative proposals of the Committee will be
considered by the Federal Reserve Board at a meeting to be
held on Tuesday next and you are requested to wire the
Board not later than Tuesday morning, December 15th, any
comments you may have to make on the recommendations of
the Council and the conclusions of Professor Sprague.


Edmund Platt,
Vice Governor.

Mr. Benjamin Strong, Governor,
Federal Reserve Bank,
New York, N.Y.

.:01:1]0 811014A0
Ci3A1 021




ENV.11, 50,3-28



Correspondence with kr. Platt (YRBoard) at the time of appointment
of Governor foung.


Misc. 3:1.5031.8-25






June 15, 1926


G. L. Harrison

Tuesday a. m.
June 15, 1.926

I telephoned this morning to Vice Governor Platt
(having previously telephoned to Governor Crissinger's office
and found that he is out of town) to tell him that I would be
glad, if the Board cared to have me do so, to go to Washington
to talk with them concerning Governor Strong's trip abroad.
I mentioned that newspaper reports concerning him and his
trip have been quite conflicting and generally misleading,
but that I was not able to offer to report to the Board
sooner because of the fact that only on Saturday did I receive Governor Strong's two final letters concerning that
part of the trip up to the time when he went on his vacation
at Antibes.
I explained that we had a few cables from him,
but that I wanted to await receipt of his various letters
which he had cabled were on the way before suggesting a talk
with the Board.
Mr. Platt said that he thought it was a very good
idea and that he thought the Board would be most interested
to have me come.
I told him that I would be glad to go any
time that he suggested - at once, later this week, or next
week, as he preferred.
He mentioned that Governor Crissinger
is away (which I had already learned from Governor Crissinger's
own office and that it was uncertain just when he would be
He also mentioned that Mr. Miller is away, having
sailed for Europe, and that I might just as well come this
Thursday as to wait until later. I said that would be wholly
agreeable to me.'
He then mentioned, however, that the Open Market
Investment Committee is to have a meeting in Washington on
Monday and that I might possibly consider coming at that
I mentioned that that would be entirely agreeable
to me, particularly as the Open Market Committee has general
supervision over the foreign business in which all Federal
reserve banks participate. He then stated that he thought
there would be no particular advantage in waiting until the
arrival of the Open Market Committee, the only question
in his mind being whether there was any disadvantage in
reporting at that time.
I explained that there is no concrete suggestion or plan for the System to act upon, that
I merely wanted to acquaint the board with the substance
of Governor Strong's report on conditions as he sees them
at thie time.
I also mentioned to Mr. Platt that Mr.
was with Governor Strong during the better
part of his trip,
that he had just returned from Europe,
and that he might be able to add something to the report
as I had received it from the Governor.
Mr. Platt said he would like to think it over
and talk to some of the other members of the Board with a
view to finding out whether they would like to have me come
Thursday or later, and said that he would call me back shortly.









.__HEtrri son

Tuesday p. m.
June 15, 1926

August 25,1926

Thursday a.m.
August 26,1926

Mr. Platt telephoned to me later in the day
(1:45 N.Y.time) to say that he had discussed my suggestion with members of the Board and that they would be
very glad to have me come before them on Thursday morning.
He also said that they would be glad to have Mr.
Winston supplement Mr. Strong's report in any way that
he might care to do.

I telephoned Governor Crissinger's office to
ascertain whether he would be in Washington on Monday
when I have to gàthere to see Mr. Winston and Mr. Dewey
about gold matters, but was told by his secretary that
Governor Crissinger was out of the office at the moment,
but that he would zall back and advise me later. His
secretary subsequently telephoned that Governor Crissinger
was going away that afternoon and would not return until
Monday or Tuesday - probably not until Tuesday.

This morning Governor Crissinger, on his way
through New York to Boston, telephoned to me to ask what
it was that I wanted to see him about. I told him that
while I had advised the Board fully of Governor Strong's
movements (as stated in my letter of August 23, that he
is now in Paris for discussions with Governor Moreau)
nevertheless there were a number of letters about past
matters, amplifying cables which I had reported to the
Board, which the Board might care to have me talk over
with them, although there was nothing substantially new.
The Governor said then that while it was unlikely that
he would be in Washington until Tuesday, that so many of
the Board planned to be away next week, in any event,
that he thought I had better postpone any discussions
with them until later on.
I reiterated that there was
nothing new in the letters, merely background, and while
it might not be necessary to report to the Board at all,
I merely wanted to let him know that I would be glad to
The matter was left that way.
do so if he wanted me to.




4:1' 4V;-,Dk1,Aaw7414-2 (gtv)4 (c`f-42



C 0 P

of handwritten letter dated September 24, 1927 to Mr. Platt, F.R.Bd.

Dear Mr. Platt:

Your letter le.ves me in some doubt as to what is in your mind except that you also have some doubts, aroused by the "Sun".

Here is my

attempt to reply:

The "Skin" may at times have some information as to what is in my

mind, but I doubt if it is to be relied upon!

On the other hand, I have the

only accurate data on that subject, - and I'll give it to you without reserve:
Mr. Mellon has asked my opinion about some names suggested to fill
the vacancy.

Mr. Gilbert's name was never mentioned.

Its the last name I

would suggest and Im certain the Secretary would feel so, tho' I never asked
him as the name never came up.

Gilbert is too important where he is.

I asked I would urge against it for that reason, if for no other.
was never suggested nor considered, so far as I am aware.
to me I would definitely and positively decline at once.

One; - I wouldnt take the job on any terms.


My name

Vere it proposed

The reasons are

It wouldnt suit me -

my health wouldnt permit, and I wouldnt be willing to go through the grilling
necessary to effect a reorganization of the Board's philosophy and its procedure to make it function


it should.


The President wouldnt appoint

me if asked for he is wise enought to know that it would raise a howl:


the Senate would not confirm me, certainly without a big hull-a-ballo (sic)
and that I wouldnt tolerate.

Finally:- it would involve you

in that I would not be willing to participate.
I have enough income for my needs with no salary.

The salary is of no moment.
I have been hoping and

expecting and trying to retire entirely for some time and have not been allowed
to do so by my associates.
In 1922 President Harding offered to appoint me on the Board and
find a place for you unless I could do so.

I declined to have anything to do


with it for much the reasons stated above.

Now as to what is or may be in
say so and Ill put it up to our Board.



If you want my job, just

But I advise against doing so.

are a number of reasons - but only one major one will suffice.
our organization apart and destroy the work of years.

most of our best men would leave.

It would tear

When I quit, the men w ho

have labored loyally in the service are entitled to promotion;
it and have reason to expect it.


they have earned

Nere anyone outside the Bank to be appointed
And they should:

Its test that / should write you in this downright fashion and it will

help all of us a lot if suspicions of what Im about are allayed by such frank
letters as yours which enables me to reply with equal frankness.

My ambition is to have a garden and read books, but surely that
shouldnt arouse sympathy.
My best to you.
B. S.

Copied - 9.27.27





















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Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102