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/ FEDERAL RESERVE BANK Prl') OF BOSTON FREDERIC H. CURTISS CHAI R MAN st\li September 1, 1921. My dear Governor Strong: 4, 0:13 I want to assure you how greatly I appreciate the unusual courtesy extended by you anOethe other officers of the New York bank in inviting us to be your guests at the delightful dinner given by you to our European friends at the Metropolitan Club on Tuesday night. The opportunity to exchange views with those two gentlemen and especially with the chief, both at the dinner and yesterday morning, will be long remembered. - When the opportunity arises for carrying out any perfected plans which develop from the visit of these two gentlemen, you can count on the officers of the reserve bank of Boston using their influence and cooperation to their successful conclusion. I also want to take this opportunity of expressing to you my congratulations on the splendid piece of work which you have done not only for the Federal Reserve stem, but for the United. States, in your excellent exposition of the purposes and administration of the policies of the :Federal Reserve System before the Congressional Committee in WaShington. We are looking forward with the greatest interest to the extended report the conference and believe it will go down in the arly of banking in this country as one of the 0most'historic episodes. Thanking you again for your kindness and courtesy, I am, Sincerely yours, FHC/B Governor Benj. Strong, Pederal Reserve Bank, New York, N.Y. Chairman. q4 Septaaber 2, 1921. Frederic H. Curtiss, Esq., Federal deserve Bank of Boston, Boston, :lass. My dear Ur. Curtiss: Thank you most cordially for your kind letter of yesterday. It was a great privilege to have you and Governor Morse with us to meet those good friends of ours from Landon and I am sure we all profited by the evening. Thank you also most cordially for the kind things you write in regard to the congressional investigation. I am just now engaged in reading the gaily proof and as soon as the print- T'cic ing is completed you will be supplied with a number of copies for such use as you care to make of them. With kindest regards, Very truly yours, BENJ. STRONG, Governor. Bsbia le-71 s )--6--(2. 1 /61 jIggLAW4LAND March 6, 1919. GOVFIDEN;;AL My dear Governor Mores: For some time I have been interested with some friends in a study of some of the problems of our national financial system and particularly to the possibili- ties of a reform movement which might result in the establishment of a scientific plan for a Federal budget. The need for this has past two years and as aome of my friends a result of contact with believe been made apparent to me the financial the time is now opportune for a machinery in during the tashington. general attempt to inter- est the people of the country in national financial reform. The campaign for saving, thrift and sensible spending, incident tation of Government loans has put many of our people in a ther suggestions in these matters. The national be reduced if both individuals and the Government to the flo- receptive mood for fur- debt ;list be reduced and can only practise sensible spending. It is particularly true with the Government but cannot be made possible until scienti- fic machinery is installed to accomplish it. Students of this subject seem to budget system is the only solution. scientific To persuade our people that such a system should be installed, a nonpartisan organization paign of publicity inaugurated. be in general agreement that a MhJuld be built up and a wise and It is a plan of that sane cam:. sort in which some of my are interested with a view to activity after the next loan is placed. friends In the meantime steps must be taken to prepare the publicity, and the personnel of the organization east be developed in advance. It is, of course, out of the question to utilize the tions as such for an enterprise of this character. proper for me to ask you if in your It does Liberty Loan organiza- not, however, seem experience with the Liberty Loan, War aavings, or other organizations in connection with the war, you have come in contact with individuals iz. March 6, 1919. in your district who would be likely to be interested in this movement and who would be qualified for service in such an organization and who would do so as a matter of public duty. to What is first needed is a representative in every State, competent take charge of the movement and direct it in the State. Heshaald have qualifications to enable him to become a leader of the State movement, some ability as an organizer, should se public spitited, able to grasp the subject and willing to study it, and should be regarded locally as without political prejudice or purpose, and have the confidence in general of the people of the State. In addition to State directors, similar organizers must be appointed in the various counties and principal cities. I shall be greatly indebted to you if you can let me have suggestions and names of men in your district for this work without, however, mentioning the matter to them. You may know them well enough to make definite recommendations not only because you came in contact with them in Liberty Loan matters, but ether public spirited activities with which you are acquainted or connected. This is a matter in which I have a strong personal interest and. will be grateful for your assistance. At our nesting in tashington on the 20th I hope to have an opportunity to refer to this matter mere specifically. Sincerely yours, Governor. Charles A. MOrss, Esq., Governer, Federal Reserve Bank of iloston, Boston, '2.1ass. BS/DT September 13, 1921. Dear Governor Mores: You will recall that about two years ago we had some correspondence in regard to the work of the National Budget Comaittee. In part, at least, passage of the budget legislation by the Congress was due to the work conducted by that Now that the basis of the budget system has been adopted by Congress, committee. our organization is endeavoring to crystalliee public sentiment for the support of the program of overnment eoonomy and thereby to insure permanent success for the new national budget system. te are seekiag to extend this work by selecting, so far as possible, bankers to accept active chairmanships in various of the more important cities, simply to carry on work which will be laid out for them by the national. cos ittee. The scope of the work is described in the enclosed memorandum. Can you auggeet representative men, preferably bankers, who might be willing to accept such apiointments in the cities of Boston, Bridgeport, Cambridge, Fall River, Hartford, Lowell, New Bedford, New Haven, Providence, Springfield and Worceeter. (I understand that Mr. George F. Hanigan, President of tne Lowell Trust Company, hati tentatively agreed to serve as chairman in Lowell.) At the present time i Shall only ask you to suggeet names, but later on possibly you would be willing to communicate with them directly and further our object of having them accept these appointments. If for any reason you think it unwise to make these suggestions, will you not write me quite frankly and, if you are willing to do so, give me your reesons. With best regards, and thanking you very cordially, Tours very truly, Charles A. Mores, Esq., Governor, Federal Reserve Bank of Boston, Boston, Masa. BS:MM enc. t. RESERVE BANK I COPY if,c,ftt( 3Ovember 22, 1921. Dear Governor Mores; Deferring to our discussion of the practice of certain of the reserve banks in the purchase of bills from dealers under resale agreements; this matter has been studied by our Mr. Hensel, who has had conferences with the more important dealers with whom we regularly trade, and I am now writing to give you his conclusions and his suggestions as to how the matter should be dealt with. Loans made by these dealers from the commercial banks are not in the form of repurchase agreements, but collateral loans, and the amount of bills pledged to secure the loan in each instance is approximately,the present value of the bills pledged; that is to say, an amount of paper is handed to the lending bank which at its present worth will just cover the amount,of the advance. Our practice has been to deduct discount for 15 days from the face amount of the paper, thereby advancing to the dealers a larger amount than the present worth of the bills. The reason for this practice has been more convenience, and in order to promote the development of the lending market, than any other reason. 14 would feel willing at once to change our practice, and discount the paper for its full period, were it not that it will very greatly increase the clerical work in the bank, increase the expense of conducting the business, and cause delay in concluding transactions. We frequently have loans of from 08 to 010 millions, sometimes even more, in one day, and in such instance we may take in 500 or 600 pieces of papal'. If our discount department were obliged to figure the discount on each piece until maturity, which as you know varies considerably, it would frequently be impossible to conclude the transaction until the following day. would require a much larger force It of clerks, a great deal more bookkeeping in rEQERIVi frSERVE tiaCYA 0 PY 2 November 22, 1921. recording the paper, and general inconvenience and expense. This inconvenience is further reflected in handling all substitutions of collateral which take place daily. VI. Renzel suggests that we should continue the practice of discounting the paper for 15 days, or such number of days as relates to each transaction, figuring entire the discount upon the amount of paper at its it to its maturity, and that each dealer making to us, in the case of 90 day bills a face value rather than such resale contract with figuring DA deliver margin of 2% of the amount of the advance, and a correspondingly greater or lesser margin, according to the maturity of the paper. This can be done roughly and without much work or inconvenience to Anybody. ables substitutions amount of work. It to be made and the amount of discount readjusted with the least The business can be conducted more promptly and economically, and the bank will always have in its hands an amount of paper which will cover the Camount of the contrast, even though the dealer is unable to make good his repurchase agreement. I am convinced that this is the desirable way tO handle the business, and adopted recommend that it be just as soon as assents are received banks now handling such transactions. from each of the 1111 you not be good enough to wirte ms upon receipt of this? Tours very truly, Benj. Strong, Governor. Charles A. Verse, Esq., Governor, Federal Reserve Bei* Of Boston, Boston, Mass. BS :101 l3. k May 6, 1022. Dear MOrFS: My friend, Mr. John T. Pratt, who le head of our Budget Committee organization is very anxious to have Alfred Aiken rep- resent the organization in Boston. Could you bring any influence to bear upon him which would induce nim to accept the job: At Any rate, won't you name a nice talk with him, And let me (now the outcome. our sincerely, Charles, A. Morse, Esq.., Governor, Federal Reserve Bank of Boston, Boston, 416.66. FEDERAL RESERVE iBANK OF BOSTON May 6, 1922. PERSONAL Mr. Benjamin Strong, Governor, Federal Reserve Bank of New York, New York City. Dear Governor Strong: I have your letter of May 6th saying that Mr. John T. Pratt will visit me within a few days to discuss thqkja21zIjIgga4 Organization of Boston and that you would like to have Alfred Aiken take charge of that organization if it were possible to induce him to do so. I shall do my best with Mr. Aiken and shall surely give Mr. Pratt an interview, anticipating a very pleasant conversation with him if nothing more. I wish to thank you for your courtesy to me especiaiy last Friday and to say that I enjoyed meeting your guest of the afternoon very much indeed and shall look forward with a groat deal of interest to the success of his mission to the United States, Very truly yours, Charles A. Morss, Governor. R. vEi L9V 51 3 3F4 JAc3C3 VIOT2C)E1 ---to ; .; . tA1 ' . CN1 Crf /1/ (6- 2 2- '/g )GA Arborotilatt Thar 144\'' astti-tujton,43.(t. ----74 -- - - _} ,t ^-.-e,/ -,.--0- e 1 ')( \, M (v Z. 140B 140 B.1-18M-2-59) METROPOLITAN CLUB Washington, D.C. Oct. 16, 1922 COPY OF HANDWRITTEN LETTER Notation in pencil indicates Strong replied to it by hand on Oct. 17, 1922 Dear Gov. Strong: A careful persuaal of the President's letter which appeared in the press this morning must convince anyone that the local newspaper men are in all probability correct in their surmise that my return to the Federal Reserve Board is most unlikely. I think it is time now for me to consider my own future. I have no uneasiness from the standpoint of a meal ticket, but I really think it d be desirable from the Federal Reserve System's point of view that I d have the same position of moderate responsibility and dignity in that membership on the Board may not be entirely discredited, and in furthermore that my influence may be felt to some extent in the cal times that I am sure are ahead of us. Will you be good enough to nk this over, and let me know if there are any prospects for me in the East? Alabama, I could exert only a local influence, which would il nothing. FtheIn I should like very much to be able to announce my own plans at same time--or before--the President makes an official statement of his selections for the Board. With assurances of my appreciation of your friendship and support n the past, and with warm regards and best wishes, I am Sincerely yours, (Signed) W. P. G. HARDING Attuvotitzttt rj ztokirt5tott,1).(C. CT 1J. 9 \----)1 1'7 ,K2 -J2 c-- c _ aiatt- (7/ _ Acknowledged: Oct. 19, 1922 7- 140B ,OBA-18M-2.59) METROPOLITAN CLUB Washington, D.6. PRIVATE October 18, 1922 COPIED FROM HANDWRITTEN LETTER Dear Governor Strong: I am obliged to you for your letter of the 17th. Certainly I shall stand by my friends at any cost, as long as it that there is any chance of winning out on the principle for which we are fighting. I am now given to understand that the President's reference to "the mistaken program of drastic deflation" was a mere gesture for political effect in the West, and is not to be taken as an indication of his disposition toward me. I was much pleased with the Times editorial on the subject. Cappears I am glad to know that I shall have the pleasure of seeing you here next week and would like to have you come to my house in order that we may go over the whole situation. It is very interesting, and I am kept well informed of what is going on, except as to the reactions in the mind of Warren G. Sincerely yours, (Signed) W. P. G. HARDING Ooto ber 1922. Dear Harding: Tour note is just received. I air. anxious to have a good talk with you about the future and will make my trip to Plashing,ton the latter part of next week the opportunity for doing so. I may be there only for one or'possibly two days, .and have been obliged to make some engagements which may not make it possible for me to have an evening with you as .1 would prefer, but I will stop in at the Club Thursday morning, before in to the War College and I will know by then just what my angh.gements will be. Meantime, I an very certain that that letter to Mr. deli should be interpreted as indicated in your note. Thank you for writing ire. Yours sincerely, ilonorable c/o Metropolitan Club, Washington, D. C. 3E.MY June 15, 1923. W. P. G. Harding, Esq., Governor, Federal Reserve I:lank of Boston, Boston, Mass. Dear Governor Harding: I have your letter of June 14 in reply to mine of the 6th and 12th regarding your participation in the accounts of the Bank of Japan and the Bankovni Urad Ministerstva Financi, and note that it is the sense of your board that there is no occasion in the present circumstances for your further participation in our transactions with foreign banks. As you point out, your participation in our foreign accounts is entirely voluntary; and we have never had. the remotest desire to force upon any of the Federal reserve banks a participation which they did not wish. Aar sole reason for offering participations has been to follow out a general policy outlined by the governors several years ago to have the Federal reserve banks act as a single unit in their foreign relations so far as practicable. As I have in the past written both Governor Morss and yourself quite filly on this subject, I am sure that you and. your directors are aware of our views and. that it is unnecessary for me to say anything further at this time. In view of the fact tfria.t your bank desires to withdraw from your partici- pation in our foreign bank arrangements, I believe it would be more satisfactory to terminate your entire participation at one time, rather than continue it as to transactions in process, and we will be glad to take over your participations to-day for air own account. We have accordingly arranged. with your office to credit us to-day .;103,241.06, being your share of the free balances, and also to wipe out your contingent liability on bills purchased for foreign correspondents amounting to 2, $2,19E,894,90. W. F. G. Harding, Esq. 6/15/23. We have simultaneously Charged your account for the free balance and increased our ccntingent liability in the appropriate amount. As to your share of the commissions earned on the foreign accounts in which you have participated since January 1, we will calculate the amount due you and transfer it to your bank in a day or two with appropriate advice. Very truly yours, J. H. CASE, Depaty Governor, JEC/CEP COPY FEDERAL RESERVE BANK OF BOSTON Jane 14, 1923. Mx. J. H. Case, Deputy Governor, Federal Reserve Bank of New York, New York. Dear Mr. Case: Your letters of June 6 regarding the participation of this bank in your account with the Bank of Japan, and of June 12 relating to the account you have opened for the provisional bank of issue in Czechoslovakia, were duly considered by the board of directors of this bank at the regular session held this morning. It is the sense of our board that there is no occasion in the present circumstances for farther participation by this bank in your transactions with foreign banks. There is nothing in the Federal Reserve Act which requires such participation, although it is provided that with the consent and approval of the Federal Reserve Board, any Federal Reserve Bank may carry on or conduct through the Federal Reserve Bank opening an account with a foreign bank, any transactions authorized by Section 14 of the Federal Reserve Act. The records of this bank show that its participation in transactions of the Federal Reserve Bank of New York for the account of foreign banks began on June 16, 1920 with the purchase of bills for account of the Bank of Japan, in Which this bank's contingent liability was $1,168,000 and its share of the free balance was $292,000. There was no change in these figures during the remainder of the year 1920 but during the years 1921 and 1922, your operations were extended to include other foreign banks, and the transactions embraced the ear-marking of gold and the purchase of Treasury certificates as well as bills. This bank's ratio of participation was 7.3%! of the total amount from June 16, 1920 to December 31, 1922, but since January 1 of this year, it has been 7.5%. The following summary Shows this bank's annual averages of the free balance deposits, contingent liabilities, and total commissions paid: Average Average Free Balance Cont,Liab'ty Income 1920 1921 1922 1923 3292,000 529,589 326,038 92,21E $1,168,000 2,330,721 2,314,406 2,343,496 0 $3,742.40 (inc. 1920) 3,755.74 Income to date - - - $7,498.14 Mr. J. H. Case - 2 - June 14, 1923. It is conceded, of coarse, that the possibility of any substantial loss in these transactions is very remote, but it seems that the income accruing to this bank as a result of its participations is small and not in proportion to the amounts involved. A participation in a., purchase or loan returns a proportionate share of the discount or interest paid, but our participations in your foreign accounts, while carrying all the risk involved in a purchase, give us only a share in a small commission. The directors of this bank feel, that looking at the matter purely from the standpoint of income, it is not good business to permit it to have these contingent liabilities. Their approval of these participations In the past has been actuated by a desire to cooperate with the other Federal Reserve Banks in transactions which were represented as being in the public interest, and which in the circumstances then existing seemed likely to involve contingent liabilities which had better be distributed among all Federal Reserve Banks rather than assumed by one bank alone. There do not at the present time, however, appear to be any considerations of a public character requiring this bank to continue to participate in accounts opened by the Federal Reserve Bank of New York in its awn name and upon its own initiative with various foreign banks. The conduct of these accounts is necessarily under the sole management and control of the officers of the Federal Reserve Bank of New York. Your institution is the sole beneficiary of any collateral advantages which may accrue from these banking connections abroad and bears the overhead expense of transacting the business. There is at Present no strain upon the Federal Reserve System and the directors of this bank see no reason until conditions change Why it should Ahare in the profits or bear any part of the losses Which may grow out of your transactions with your foreign correspondents. In arw large transactions impressed with a distinct public interest such as the ear-marking of gold with the Bank of England in June 1917; the deposits you held for the account of the Bank of the Nation of Buenos Aires, which involved their payment in gold within a certain time after the end of the war; the ear-marking of German gold with the Bank of England in June 1919; and the ear-marking of gold with the Bank of France in September 1920, the directors of this bank have cheerfully agreed to a participation, and it is their intention to participate in any similar transactions Which may be engaged in hereafter. In view of the foregoing, the directors have instructed me to advise you that this bank does not care to participate in your arrangement with the Czechoslovakian bank, and with respect to your accounts with the Bank of Japan, Bank of England, Bank of France, de Nederlandsche Bank, 3wiss National Bank, and de Javasche Bank, in which this bank has been a participant, to give notice of cancellation of participation agreements hitherto made by this bank except as to transactions in process. ir J. H. Case -3- June 14, 1923. With assurances of our appreciation of the courtesy you have accorded us in all these matters, I am Very truly yours, (Signed) W. P. G. Harding, W. P. G. Harding, Governor. WPGH:A COPY FEDERAL RESERVE BANK OF BOSTON August 2, 1923. Mr. J. H. Case, Deputy Governor, Federal Reserve Bank, New York, N. Y. Dear Mr. Case: I am enclosing herewith carbon copy of a letter which I sent Mr. Crissinger today. I thought of this point last night and called Wyatt on the telephone this morning and read him my letter to Governor Crissinger. He says the point is well taken and I think he will advise the Board accordingly. If you can have your counsel back up my position in this matter and send a brief to the Board on the subject, I think it will help. Yours very truly, (Signed) W. P. G. Harding, Governor. Enclosure. COPY August 2, 1923. Hon. D. h. Orissinger, Governor, Federal Reserve Board, Washington, D. C. Dear Governor Crissinger: The report of the Governors' Advisory Committee made to the Board and which I signed late yesterday afternoon does not, in my opinion, condemn in strong enough terms the Claiborne_Adams scheme. To my mind to permit a member bank to unload upon a Federal Reserve Bank its transit items, receive immediate credit for them and have these items in transit counted as part and in many cases all of the member banks legal reserve is absolutely unsound and is indefensible from any standpoint. You will remember that before the passage of the Federal Reserve Act, national banks were required to carry part of their reserve in their own vaults and in the case of barks in central reserve cities, all of their reserve in their own vaults. The law provided that this reserve should be made up of lawful money, that is, gold and United States notes. The object of this letter, however, is to call your attention to the fact that under the terms of Section 19 of the Federal Reserve Act the Claiborne plan is probably illegal and on this question I would suggest that you refer the matter to counsel. The point I wish to raise is this - In Section 13 a clause permits a Federal Reserve Bank to receive from any nonmember bank or trust company deposits of current rands in lawful money, nationalbank notes, Federal reserve bank notes, checks and drafts payable upon presentation, or maturing notes and bills, provided that such nonmember bank or trust company maintains with the Federal Reserve Bank of its district a balance sufficient to offset the items in transit held for its account by the Federal Reserve Bank. Please note that in this case the words "actual net balance" are not used but merely the term "a balance." This seems entirely proper as this balance does not count as part of the nonmember banks reserve but is merely to offset transit items sent the Federal Reserve Bank by nonmember banks. Under Section 19, however, which relates to reserves, this language occurs - "Every bank, banking association or trust company which is or which becomes a member of any Federal Reserve Bank shall establish and maintain reserve balances with its Federal Reserve Bank as follows: If not in a reserve or cantral reserve city....it shall hold and maintain with the Federal Reserve Bank of its district In actual net balance equal to not less than seven per centum of the aggregate amount of its demand deposits and three per centum of its time deposits. If in a reserve city an actual net balance equal to not less than ten per centum, and If in a central reserve city per centum." an actual net balance equal to not less than thirteen Section 19 further provides that The required balance carried by a member bank with a Federal heserve Bank may, under the regulations and subject to such penalties as may be prescribed by the Federal Reserve Board, be checked against and withdrawn by such member bank for the purpose of meeting existing liabilities." -2 My contention is first, that the words "an actual net balance?! as used in the paragraphs above quoted have a meaning entirely different from the term "a balance, as used in Section 13 in referring to nonmember bank accounts and, furthermore, the permission given a member bank to check against or withdraw its required balance in a Federal Reserve Bank presupposes that this required balance is an actual net collected balance, if it is conceivable that under the Claiborne plan the ',required balance!! carried by a member bank with a Federal Reserve Bank would be composed of uncollected checks in transit, it is also conceivable that the required balance of all member banks in a given district might be made up in whole or to a large extent of uncollected checks. It has been demonstrated I think to the Board's satisfaction that commercial banks which give immediate credit at par require compensating actual balances for them; if they did not they would be unable to meet checks drawn against uncollected items and a Federal Reserve Bank might find itself in a position where it would be unable to meet withdrawale of its member banks against their reserve balance if such balances were made up of uncollected items. It seems to me that if there is any feeling on the part of any iember of the Board that it would be wise to adopt the Claiborne plan which provides for immediate credit to the reserve account of a member bank of items which the Reserve Bank cannot collect except in from one to four days, it would be advisable to ask counsel for his construction of the reserve requirements as laid down in Section 19 of the Federal Reserve Act. Yours very truly, W. P. G. Harding, Governor. - COPY August 2, 1923. Hon. D. R. Crissinger, Governor, Federal Reserve Board, Washington, D. C. Dear Governor Crissinger: I wrote you this morning raising the question as to the legality of the Claiborne plan to have the Federal reserve banks give immediate credit to the reserve accounts of member banks for intra district checks. I desire now to supplement statements made in that letter by inviting your attention to the Federal Reserve Act in its original form as approved December 23, 1913. Section 19 of the original act provided that a part of the member banks legal reserve must be carried in its own vault and a part with the Federal Reserve Bank of its district. Section 19 of the act as it now stands is a material amendment to the original act and is part of an act approved June 21, 1917. The present law provides that all reserves must be kept in the Federal Reserve Bank and no cash carried in the vaults of a member bank can be counted as part of its lawful reserve. The original section 19 in prescribing the amount of a member banks total reserve to be careied with its Federal Reserve Bank for a period of twelve months and for each succeeding six months until the total amount required is reached, does not use the ord "balance" or "actual net balance" but uses the word "reserves." For example, original section 19, paragraph (b) "A bank in a reserve city as now or hereafter defined, shall hold and maintain reserves equal to fifteen per centum of its aggregate demand deposits and five per centum of its time deposits as follows: In its vault for a period of thirty six months after said date, six fifteenths thereof, In the Federal Reserve Bank of its disand permanently thereafter, five fifteenths. trict for a period of twelve months after the data of aforesaid at least three fifteenths and for each succeeding six months an additional one fifteenth until six fifteenths have For a period of been so deposited, which shall be the amount permanently required. thirty_six months after said date the balance of the reserves may be held in its own vaults, or in the Federal Reserve Bank or in national banks in reserve or central reserve cities as now defined by law." As I stated yesterday, the Federal Reserve Board during the first two years of its existence, devoted a great deal of careful study to reserve requirements and to the problem of collecting checks and when the Board decided early in the year 1917 to recommend to Congress a further reduction in reserve requirements and the elimination of vault cash as a reserve, it had been determined by the Board not to permit items in transit or float to be counted as reserve. Therefore, the bill which Was sent to Congress and whidh became law on June 21, 1917, used in all three paragraphs relating to the amount of reserve that was to be carried by the various classes of banks, the words "actual net balance." I am Quite sure that if you will refer to the minutes of the Board and to the hearings by the Committees on Banking and Currency of the House and Senate, you will find that there is no doubt of the intention to prohibit by law the counting of "float" or uncollected items as reserve. Yours very truly, W. P. G. Harding, Governor. COPY August 3, 1923. Dear Governor Harding: Thank you for your letter of August 2, enclosing copy of a letter of the same date addressed by you to Governor Crissinger on the subject of the legality of the Claiborne-Adams scheme. Our counsel has had the matter under ad- visement for some time and is of the opinion that the proposal is in plain violation of the terms of Section 19 and of the spirit of the Federal Reserve Act. Further, that any attempt by the Board to put it into effect by regulation would not stand the test of the courts. However, I think it inadvisable at this time to raise the questionof strict legal right . The subject has been consistently dealt with by the Federal Reserve Board in the past on grounds of policy. See ruling of the Federal Re- serve Board of September, 1921, Bulletin, page 1080, where the Board ruled on the collection of demand bill of lading drafts. The Board in that ruling said: "If Federal reserve banks credited the reserve accounts of their member banks immediately upon receipt of the items, this evil.(i.e., the evil of the old system of banks counting as part of their reserve deposits, items sent to reserve agents but which were still in process of collection) would be perpetuated and to that extent the purpose of the Federal Reserve Act would be defeated." I think it better that the question be dealt with now on the same basis as in this former ruling of the Board. If the Federal Reserve Board should reject the Claiborne-Adams plan on legal grounds, the effort would immediately be made by its proponents to get the law amended by Congress so as to provide means by which it could be put into effect. n- 2 rnor Harding August 3/23. There are other reasons which I am sure are not unknown to you and which in my judgment make it inadvisable to raise the strict legal question. I need not assure you of my hearty concurrence in your views and my desire to do all in my power to gain the end you seek. Very truly yours, tSigned) J. H. Case, Deputy Governor. LRM:GSR Mr. W. P. G. Harding, Governor, Federal Reserve Belnk of Boston, Boston, Mass. FEDERAL RESERVE BANK COPY OF BOSTON Mr, J. H. Case, Deputy Federal Reserve Bank, August 4, 1923. Governor, New York, N. Y. Dear Mr. Case: I have your letter of the 3rd inst. and would say that the question of the legality of the Claiborne-Adams scheme or at least that part of it which relates to immediate credit and availability of transit items has already been raised informally by me. I should think that the Board would reject the plan on good sense and economic grounds, but at the same time I do not think it is amiss to let the members know that their rulings are being closely watched and that the Board cannot make regulations except in accordance with the terms of the Act. I do not shate In your apprehension that, if the Board should reject the Claiborne-Adams plan on legal grounds, Congress might amend the law in order to provide means by which it could be put into effect. The proposition would amount to this - that National banks and other member banks of the country are not required to carry any cash reserves whatever and that their entire legal reserve, which is now less than the amount which the National banks were formerly required to keep in their can vaults, could be made up in In case a serious effort should be made in Congress whole or to amend the Federal Reserve Act in this way, I feel sure that it could be defeated. It would give opportunity to enlist the horse sense of the country against this and other foolish schemes which the radical element may propose. in part of float. As to the effect which the Board's recognition of this legal principle may have on present practices of the Federal Reserve Banks, I do not think that it need be appreciable. Our deferred credits are now based on time schedules which are more or less theoretical and, as a matter of fact, the consolidated weekly reports of the System show that the banks have always carried a certain amount of float. This is unavoidable, but when we bear in mind the well established legal axiom "de minimis non curat lex" I see no reason why we should feel disturbed. One of the older membrs of the Board is the Chairman of the Law Committee and he is rather proud of his powers of conciliation. His method of dealing with a noisy minority seems to be to ascertain what is wanted and to grant it. He is not very well posted as to banking practices and it seems difficult to enlighten him on this subject; but he has a legalistic mind and is always impressed by suggestions of legal obstacles. /sr Mr. Cade -2- August 4, 1923. As the matter now stands, the Board has passed the buck to the Advisory Council thus giving Mr. Claiborne about six weeks in which to Agitate. To the average member bank the idea of immediate credit is naturally attractive. In 1915 this whole question was studied very carefully by the Federal Reserve Board and the Governors of the Federal Reserve Banks. * Mr. Delano had an idea at first that the collection system was a good deal like the car service system of the railroads but he never suggested a one sided system of immediate credit. The plan which he favored at first calledbbth for immediate credit and immediate debit. Many of the banks liked the immediate credit part of it but raised very valid objections to having their reserve accounts charged with checks which they had not seen and of which they knew nothing. They insisted upon their rights to have the checks presented and to make payment at their respective places of business. The Claiborne-Adams plan means the carriage of float by the Federal Reserve Banks and the immediate availability of transit items as member banks reserves. Yours very truly, (Sgd) W. P. G. Harding Governor. (In handwriting): Mr. Delano said that it made no difference to the Wabash R.R. if 1,000 of its freight cars were in service on other lines provided the Wabash had in use 1,000 cars belonging to other reads; and that it was not material to the banking system it the San Francisco bank had one million dollars worth of checks on N.Y. and N.Y. had an equivalent amount on San Francisco - for the money was in the banks and the transfer was a mere matter of bookkeeping. * My answer was that in order to do business, railroads must have cars, and banks must have money; that a car is a Car, but a check is merely an order for money, and that the Wabash could not handle traffic on mere orders for cars. He finally came around, and agreed to the views of Warburg and myself which are embodied in the amendments of June 21, 1917. My diary shows the dates on which I explained the reserve amendment to the House Committee chairman, and to the Senate Committee, and states that the Senate Committee voted, before I left its room, to report the amendments favorably. (See Fed. Reserve Bulletin, Feby 1917, pp. 98-99 and Mch. 1917, p. 188). W.P.G.H. August 6, 1923. Dear Governor Harding: I have your letter of August 4th. when I wrote you on the third that you Board the legal difficulties. I was, of course, aware had already pointed out to the However, we are definitely committed here to the policy of resisting the Claiborne-Adams scheme on grounds of good sense and sound banking. success can be had along There is these lines. substantial reason t/ think As I suggested to you in my letter of the third the Board has already ruled as this proposal in effect, a fact of which they are now not unmindful. I think it ds quite certain that under the circumstances the question of strict technical right might better he left untouched, at least for the time being. Hence I find myself unable to ,tin in your protest on legal grounds, in notwithstanding my hearty concurrence your views, Very truly yours, J. H. Case Deputy G. darding, Esq., Governor, Federal Reserve Bank of Boston, Mass. Boston, Governor. Mr. Beyer: Will you please write by hand the following letter to be signed by Mr. Strong. January 33, 1924. Dear Harding: It was only on my return from the South that I learned of the sad tragedy which occurred in your family, and hasten to send this line of Sincerely yours, Mr. W.P.G.Harding, 37j kj-c(z-t 4t7. Boston, Mass. sympathy. Septserber 10, 1923. Dear Governor Crissieger; I aolcrowledge reosipt of your letter X-3883, dated eeptember 8, 1923, with whioh you enclosed copy of letter from Hon. L. T. McFadden, Chairman of the Coneressional Joint Committee of inquire on MemberI note your requeat that I furnish ship in Federal Reserve Jy stem tik Board with aeowers which I would individually make to the questions propounded by tee Committee, and in accordance submit the following; Sffect of the present limited membership of state ;Mules and J. do not reeard the limited memberehie of these institutions as being altogether unfortunate. euality should wars oe oonsidered in the membership of the Sestau, and I have no doubt that there are some undesirable manbers. It is equalle true, however, that there are many non-member banks whose acquisition veauld be desirable. i oelieve that there is a eTadualle developing sentiment among bank depositors throuehout the countre that the safest and most reliable depositaries are the member banks. This sentiment Oboe and flows but k, tins additional streeeth whenever clouds appear Upon the financial horizon. In my opinioe, the influeette of the Federal Reserve Board and the respective Federal Reserve Seeks should be exerted upon the member banks in sea a wa,y as to justify and foster the faith at the public in member banks. Trust Companies. Advisability of attempting to Ixreao the raembership of the I douut the wisdan of undertaking a set:Itemtic csenpaien along revival or campmeeting lines to increase the Federal Reserve Sestem. The reasons which actuate desirable non-mameer banks to remain aloof should, however, be careful1y! analesee, and if array Me mberahip. of these reasons are well-founded, steps should be taken either tv appropriate changes in the reeulations of the hoard or by amendment of the Federal Reserve Act to remove au valid objections which mae be ikard, and you will notice that I shall discuss this feature further on and will make a pertinent suggestion. Advice on the present financial conditions in the agricultural sections of the Unitee States. I have already forwarded to the Board a report on aonlitions in the most distinctive aevicultural section of this district; viz, Aroostook County, Maine. I do not know of any especial agricultural credit problems elsewhere in Now Breeland. The Legislation of 1922 is, 1 Ti opinion, an admis::ion on the part of Congress that the admithatration of the Federal Reserve eeetern under the law as it stood in the years 1920-1921 111,y. -2- was not in any way responsible for the adverse conditions in cultural sections, and I do not know of any further arnendreests to the Federal 'Reserve ixt with respect to the agriculturel credits that ere either necessary or desirable. Time should be allowed for testine the efficacy of the amendments alreade made. 4, Reasons which actuate eligible State bunks and Trust oonneseies in failing to become members of tee Federal Reserve eestan; what administration measures, if ene, have boon taken and are 'Doke taken to increase such membership; and whether or no t any chanees shoulci be made in the axieting law or in the rules and reeulatiees of the Interest on daily balexxoes of the Federal Federal Reserve eoferd. Reserve Sestets, couflict and competition now exietine between Betional and etato bankine laws, In this district there is little, if buy, disposition to criticise the Federal "Reserve Board or the betainistration of this bank, and except in the State of Connecticut, loeue laws do not operate against State banks' membership in the :.-eztern. In Connecticut, however, the law requires Nees:sine reserves to be carried by State banks and Trust COMS1111e6, and does not admit of any muitificatioue is favor of 3tate bank members. Therefore, the few State breaks arid Trust OCIMIltrlieU in Connecticut which are members of the eeetee work under the handicap of carryine double reserves in order to meet the requirements both of the Connecticut law and tile Federal Reeerve eot. ii.'fforts have been made repeatedly to induce the Connecticut Legislature to make the &me concession as has bsee: made in other States in favor of State bank membership, trat due to the efforts and influence or' one iudividual, the President of a Trust Company, whe is also a etete eoeutor, and Chairman of the Finance Committee of the Connecticut Seeate, these offer ts have been unavailing. Further attempts will be made in the succeeding sessions of the Connecticut Leeielature, which i hope ultimately Oa successful. During the early weeks of my LIGUMb040:i here I found that there Was a stroeg sentiment among MIU14;i of the memeer banks, as well as the nonmember banks, that the Federal Reserve Beek should pae interest on dopoeite I took some pains to joint eut hoeever that in order for the bank to pay interest it must increase its eareinee very ooneidarable and that in order to iecrease its eaeninee it would be oeliged to engage so exteesivele in open mar'eet operations as to put it in ective competition with member and noreememeer bunko, and that snoh a policy would also destroy its character as a reserve bank, for by having its assets actively employed at all times, it would have no means of assisting member banks in times of emereence. These areuments have proved effective and for some months paet I have heard of no sentiment in favor of interest on deposits. There is, however, a feeling that the Reserve eank is distinctly a Government institution and that the member banks have no actual part or interest in its affairs. No interest is taken in the election of Class "A" and Class "B" directors, and there is absolutely no feeling of proprietorship on the part of member banks, 4aite rsosntly the Boston Clearing Reele has inaugureted a movement ta bring about a closer oontact and keener intorent on the part of leer banks, believing that it is useless to attempt to bring in non-member banks and State banks as long as there is an aleofness and Pke wermness on the part of /ember banks, :II:W=1a= is oontagious and whenever member banks become active partisans Of the eystam, State bake will apple? for membership, It has been suggested twit at tho next annual meeting of the :4w engiand Bankers el:ow:dation, one session be set aside for a meeting of the stockholders of the eakerel Reserve eank eeis meeting will elect its own chairman ana will call for such information as at asually receive at meetings, and will also elect for the term of one year, an %xecutive Committee of seven. This oommittee will receive complaints or suggestions frmn member banks and will take them up with officers and directors of the seeerel Rooerve Aank, Being representative of the stookholders, conversations can be hold with this committee by the officers of the Reserve Bank on questions of mutual interest without fear of the imputation of favoritism, which might be the case at present if the opinions of officers of two or three banks were -ealght, In view of the fact that the Now neland Bankers Association does not meet until next June, the Boston Clearing House has requested the ereeleent of the Jan era ,aeociation of each State in Aw I' lglanki to appint one member of a committee to serve until the stockholders' meeting next June. eho eresieent of the eassaohnsette Bankers Association has aepointed tee members of the committee, and one member has boon or will be apeointe_ from ()echo! the other NOw englend ntatos. committee is expectoe to meet in the near future ant will probably have some suggestions to make to the Neard before) the meeting of 7ir. eeeeaden's Committee in rotober, I mey say that there is a general feeling aneng the Now englana bankers that 'election 7 Of the eoderal Renerve ect should be amended; not with the view of depriving the Government of revalue) but rather with the idea of making the eystema mutual one, It is argued that as Section 7 now stands', there is AD reason why member banks should take any particular interest in the eystene he eividenee on their stock at 6% per ;eneum are cumneetive and ae a fixed charge on the not earnings, but the eovernment gets all the rest, even the eurplus will go to the Government in the event of need liquidation. It has bean pointed out that Congrsss has been more liberal in thir: respect to the :arm Loan eaeks than it has to the ideml Reserve Beeks, esr the capital of the earm Loan Be/lee lees supplied originally by the Treasury of the :ftited states, although the Joint etook Land Bunks have now relieved the Treasury of by ter the larger part of its stockholdings in the earm Lean Banks. earm Loan Banks are exempt from all taxes except as to real-estate owno.44 their bonus as well es tore of the joint etook land Banks are exempt from Income Texas., and. the earnings are applies. to the payment of dividends to stockholders, to the creation of a. surplus, anu the remainder is distribute:, to borrovere as a rebate of interect, In the ease of the venmel aeserve !Auks the capital was supplied entirely by the member banks, which also furuish the deposits, The aovernment's cola oontributiOn was 0100,000 which was appropriated te pay the expenses of the erganieation Committee* of welch amount $17.000 was turned beak into the eroasury. The Governsent has received so far !e135,000,000 from the leieral Reserve eanks as franchise taxes, and it hat) also had the benefit of their services as eisoal Agents, the value of welch woula be hard to eattnate. It is argued that the only reel contribution that the Government makes to the eederal leserve eaeks is the neaumeleeseree note, and teet is a contribution only to the extent to whioh the eederal Reserve note is not specifically covered by a gold reserve. There is endoubtedly a strong feeling througheut Now 71ng1and that there should be an equitable division of the profits, if aey, Of the Peeeral Reserve Banks. It has been pointee out that in the summer of 1913, the Original Olase Bill as it passed the louse of Representa- tives, provided. for 5% oumulative dividends to member banks, the oration or a serplus equal to ase% of the eaeitel &took, and the eivielon of any additional earnings between the Goveremeet and the FO,oral Reserve Banks In the proportion of 60% to the Government as a franchise tux and 40% to the Reserve Banks to be distributed by them to their stockholders in propertien to the average reserve balanooe oarriee during the year, The Owen Bill as it passea the eenate providea for 6% emulative dividends, the creation of a 40% surplus, and the payment of 50% of any earnings remaining as a franchise tax to the Goverement, and the setting aside of the other 5O as a trust fume for the payment of claims against insolvent member banks, This introduce the principle of a guarantee of aeposits end would have tended to put all member banks on the sumo footing. Barkers generally protested and the Rouse conferees would not agree to tate provision, ?no differences 4etween the Senate and the House were compromised by the Conference Committee and the bill as reported by that eommittoe, and whioh finally boosae a law, prevideu for 8% cumulative dividends, the creation of a surplus of 40%4 ane the payment of all additional earnDees to the Government as a franchise tax. In 1919, Section 7 was alendee so as to proviae for a surplus /Neel to 100 Of the subsoribea oapitalami tee retention by the banes as a further additior to surplus of 10%, the remaining 0% to be paid to the Goverement as e franohise tax, The surplus createu,however, under the present law, goes to the Government when the banks are finally liquidated. I have made no effort to influenee banking sentiment in this distriot but have taken sere pains to aseertain just what the sentient is, There is no disposition to change the caaracter of the Federal Reserve Banks; in fact most of the banks are anxious that they should ho continued as Reserve Banks and mot as comae-tine balks, There Is no longer arg general sentient in tevor of Internet on deposits but there ilea strong feeling that member banks should be &word° the benefits which useally accrue to stockholders, I think that balking sentiment in Nor enelana is in favor o f an peweefirst, for the payment to the merit to Section 7 which would proviee: -5Government of a specific tax by Federal Reserve Banks - a tax based upon the uncovered portion of Federal Reserve notes outstanding, which after all is the Government's real contribution to the Systeee I have hoard sugi.;estions made that this tax be fixed at 2% which is the same as national banks pay, and it has been pointed out that with this tax in effect in 1919, 1920, and 1921, the Government would have reeeived a large return from it, and the Federal Reserve Bunks would have been well able to pay it. In 1924 when the reserves were large, the earnings were small, and the tax would have been small. I believe that riew Felgland bankers generally would like to see the 64; cumulative dividends continued with no further additions to surplus, and that they would like to have excess earnings, if any, after payment of taxes and dividends, distributed to member banks in proportion to their reserve balances. This principle was recognized by the Glass Bill which passed the house of Representatives in 1913. I again repeat that I have hoard of no disposition whatever to interfere with the administrative and regulatcry powers of the Federal itoserve board, and that banking sentiment here is not actuated by a desire for the actual profit but rather by a feeling that the present provisions of Section V are not equitable in that the non-borrowing bank gets no direct benefit wile its reserve is used often at a profit by banks whioh are borrowers. reading the diecussion of this mutter in the last two issues, September 1 and September 6, of the United States Investor, written by Ur. Frank P. Bennett, wne tells me that he made the suggestions contained therein after discussing the matter with I have been interested in :nany bankers throughout New lingland. b. Par collections. I have not hoard of any sentiment whatever In this district against that has been reported to favorable sentiment. the par collection system, and everything me by our field representative indicates a I am advised else that there has been no general sentiment in favor of abolishing the office of Gcmptroller of the Currency since Yarch 1921. here does not appear to be any desire on the part of any New Lngland it own town or city. in bank to establish branches cutside of metropolitan Boston which erabraces several municipalities, there are two or three national banks, as well as several trust companies, which have branches in varicus parts of the city and in the suburbs. The national banks which have branches have acquired them either by establishing the while they wore operating under state charters as Trust comianies or else through merger with convertee national banks which had establish branches while they were trust companies. One or two other national banks are considering the question of establishing branches, but if they do, will probably acquire them through mergers. Sc far I have heard no talk of any national bunk surrendering its charter for the purpose of establishing branches as a State institution; although it is probable that one large national bank would have - 6 - surrendered its Charter had it been unable to establish branches in the manner above described. In many large cities it appears that the establishment of suburban branches is becoming more and more a necessity for a down-town bank. Very truly yours, W.P.G. Harding!, Governor. Hon. D. R. Crissinger, Governor, Federal iteserve Board, Washington, FEDERAL RESERVE BANK OF BOSTON FREDERIC H.CURTISS W. P.O. HARDING, GOVERNOR WILLIAM W. PADDOCK, DEPUTY GOVERNOR CHAIRMAN OF THE BOARD AND FEDERAL RESERVE AGENT WILLIAM WILLETT, CASHIER KRICKEL K.CARRICK,sEcRETARy ALLEN FIOLLIS DEPUTY CHAIRMAN OF THE BOARD CHARLES F. GETTEMY ASSISTANT CASHIERS ELLIS G.HULT ERNEST M. LEAVITT 1.11. ASSISTANT FEDERAL RESERVE AGENT 11111.11111.111 L.WALLACE SWEETSER October 9, 1925. Dear Governor Strong: I have received your letter of the 8th Instant nd have already looked over the statement which I received yesterday. t seems to me that the adjustments proposed are equitable and I have no changes to suF:gest. I am Sending you today a copy of my 'book "The Formative Period of the Federal Reserve System" which, as you will see, deals with the work of the Federal Reserve Board rather than of the and when you read it, I hope banks during the period it covers. If that you will do so with a charitable frame of mind remembering that it is my first attempt at authorship as it will be my last. Sincerely y G57-72.e40.7-cel;7-ernor. Benjamin Strong, Governor, Federal Reserve Bank, New York, N. Y. ocir13, a 1925 ''')1"`) OFFICr 30,11-_-ny Vs!Pnlo v - 'E n 9 iJkJi la fi Octoter 10, 1926. Deer Governor Harding: Thank you for your latter of tl2e ninth. I shall certainly read the book *ith 141 t greet deal of interest, and it will require no charitable frame of mind indeed, when T recoil the many difficulties and perplexities which you ter e required to face during your administration. I hope the book is favorably received, and that you will aot be iecouraged vs in author. Sincerely yours, W. P. G. Harding, ,Esc., Governor, Federal Repervo Bank, ,oston, Personal December 9, 1926. Dear Governor Harding: 'hen 1 se. r Governor Strong he risked 7re to thank you very muh for your kind. message of December 6. AsI told you over the telephone this morning, the governor is Touch improved but Is yet to reAk to undertate cor- res2ondence, so he to takLng thia means of expressing his ap- preciation. He ir shortly to go to Colorado for e period of re- cuperation, and we hope he will gnin back his o16-t1me vigor. Very truly yours, J1 H. CASE, D ruty Governor. Mr. W. P. G. Hardin., Federal eaerve Bank of Boston, Poston, Massachusetts. FEDERAL RESERVE BANK OF BOSTON W. P. G. HARD! NG, GOVERNOR FREDERIC H. CURTISS WILLIAM W. PADDOCK, !DEPUTY GOVERNOR CHAIRMAN OF THE BOARD AND FEDERAL RESERVE AGENT WILLIAM WILLETT, CASHIER KRICKEL K. CARRICK, SECRETARY ALLEN CHARLES F GETTEMY ELLIS G. HULT ERNEST M. LEAVITT L. WALLACE SWEETSER HOLLIS DEPUTY CHAIRMAN OF THE BOARD ASSISTANT CASHIERS ASSISTANT FEDERAL RESERVE AGENT December 6, 1926. Dear Governor Strong: Upon my return a few days ago, I was very I am glad to sorry to learn of your severe illness. hear, however, that you are now entirely out of danger and that no serious consequences are likely to ensue. I trust that you will soon be able to go to a more genial climate where you can recuperate, and I hope that you have a speedy restoration to health. With kindest regards. I am Sincerely yours, ,,,111111" Mr. Benjamin Strong, Federal Reserve Bank, New York, N. Y. FEDERAL RESERVE BANK OF BOSTON W. P. G. H ARDI NG, GOVERNOR FREDERIC H. CURTISS WILLIAM W. PADDOCK, DEPUTY GOVERNOR CHAIRMAN OF THE BOARD AND FEDERAL RESERVE AGENT WILLIAM WILL ETT, CASHIER KRICKEL K. CARRICK, SECRETARY ALLEN HOLLIS DEPUTY CHAIRMAN OF THE BOARD ASSISTANT CASHIERS ELLIS G. HULT ERNEST M. LEAVITT L. WALLACE SWEETSER CHARLES F GETTEMY ASSISTANT FEDERAL RESERVE AGENT September 22, 1927 My dear Strong: I am sending you a letter which I dictated yesterday, althouel I feel that Young's appointment has made the whole question an academic one. In this appointment I think I can see the deftness of your touch and I congratulate you on the excellent work you have done in putting him over and in securing his acceptance. I think the appointment of Young is"bully"in every respect and to use an expression which has passed into history - "I am deelighted". Sincerely yours, Mr. Benjamin Strong, Governor, Federal Reserve Bank, New York, N. Y. Enclosure September 23, 197. My dear Hardin: I was glad to ha.ve your various letters this morning. The confidential one of the 21st leads me to write you some further comments, vinieh I shall hope to do so to-morrow. I am so glad f..t your reaction to Youngle appointment. *Shen the D fifil C.,' wee suegeeted enc.4. I heard of it I placed no obstacles in the as I did, you can be sure tnat way. Young has always impressed me as an upstanding, two-fisted, Irish-American, of the type no clearly expressed in that offhand remark of his Lt the meeting, when he said that he never ley down in his life unlash he 613 s knocked down. You do net know how much anxiety this has cleared out of my mind, for I have been worried a lot about the recent developments and know that you and a lot of the others have been, too. Some tint: I hope us rill have s chenoe to talk this al over. Sincerely yours, P. G. licrding, Wo Federal Reserve Bank of Boston, Eoston, Massachusetts. Mr. BS/RM THIRTY PEARL STREET BOSTON September 28, 1927 My dear Strong: / have received your letter of September 24 which I have read with the greatest interest. It is evident that we are not very far apart in our views. / am going over to New York Saturday on the one o'clock train and will remain until 5 o'clock Monday afternoon. I shall call at the bank to see you some time Monday morning,and hope that you can spare me a half hour or so for discussion of the situation then. With kind regards, I am Sincerely yours, Mr. Benjamin Strong, Federal Reserve, Bank, New York, N. Y. September 29, 19k."7. Deer Governor fitirding: I tm delighted to e,ot your note and 1oxi that you sill be in Mel, York. If you e.,re been .S.,turday evening 8,.nd Monday mcirnios won't you t:-tephone me at Murray b179? We might have b_ little vielt uptcAm. Sincerely youre, Mr. W. P. G. Hardilg, Federta Reeerve ink of Houton, Boeton, Masa. BS/RAH
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