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BANK OF CHICAGO
DISTRICT No. 7

P.713 1 - 1915

FEDERAL RESERVE
BANK
Chicago, January 28th, 19)0

-Ser4f
Mr. Benjamin Strong, Jr., Governor,

-0

Federal Reserve Bank of New York,
New York City.

BENJ. ST30I4
AI..
PERSON

Dear Mr. Strong:-

I wired you this morning inquiring whether
it had been definitely decided that the unexpended portion
of the foreign exchange gold_fuwl would be deposited with
you for distribution, and asking for an indication as to
Chicago's portion.
In reply I have your telegram stating that
the contributing banks will be asked their preference as to
the method of distribution, and that you were unable to estimate
Chicago's portion until reply was received.

If the plan should be decided upon whereby a
distribution is made through you, will you please be good enough
to advise us by wire of the amount of Chicago's portion.

Very truly yours,

4




-41

WESTE4.1aP

Form 2138

STR,G-, Jr,

TEL ....tteA Am

PERSONAL.

WESTERN UNION

DIRGE W. E ATKINS, VICE-PRESIDENT

NEWcoMB CAR!-TON. PRESIDENT

f

BELVIDERE BROOKS, VICE-PRESIDENT

DELIVERED FROM

L:14

RECEIVED AT 24 WALKER STREET, NEW YiligKitrigY

LllL-8ER

//-

J

rE844,4, 44/,76,

118CH DKH 29 LDW

MQ CHICAGO ILLS JAN 28 1915
ENJAMIN STRONG JR

997
GOVERNOR FEDERAL RESERVE BANK OF NY NEW YORK.

1S PLAN BEEN DEFINITELY DECIDED UPON WHEREBY FOREIGN EXCHANGE GOLD
(21L_WILL BE DEPOSITED WITH YOU FOR DISTRIBUTION IF SO CAN YOU INDICATE
MOIMMIN

r'20XIMATELY CHICAGOS PORTION AND DATE AVAILABLE.




J

B MCDOUGAL
1245PM

rx.

116
Dart
tAN

T't':0E,W.,




RESERVE

WA
Jan. 28, 1915.

James B. i,lcDougal, Esq.,

Federal ppserve Bank,

itoo lii.

Contributing b4Inks will be asked to express preference an to
method
of distribution. Stop. Can't estimate
Chicago's portion .until

reply is received. Stor. Wilting details.
S6Jr/VCM

Charge Federal eserv,:, Bank,
Government rate.

Benj. Etrong, Jr.

5x.




FEDERAL RESERVE BANK OF CHICAGO

p F.(7 plvF=

DISTRICT No. 7

E)

FFR 3 1915 8 5. 5-

i= /

Chicago, February 1st, 1915.
E_R\JE BAt;1{

K

Mr. Benjamin Strong, Jr., Governor,
Federal Reserve Bank of Neu York,
New York City.

Dear Mr. Strong:-

Your favor of the 9ilrtieth ultimo is received,
also circular letters and forms is ex by the Gold Fund Committee
ion.
explaining the manner of distrib
I note with '14erest that most of the banim into their New York correspondents
terested desire checks issu
and of course, this would revent'the Federal Reserve Bank from
which it was hoped they might secure
receiving the full belle.,
in the matter of 1iquidting their indebtedness to you.
rn,

ing you for your advice in the premises,

Very truly yours,

Governor.

FEDERAL RESERVE BANK OF CHICAGO
79WE

0




SZinif 0 EDEVE.

OFFICERS

DI RECTORS

JAMES B. MF DOUGAL GOVERNOR
C. R Me KAY DEPUTY GOVERNOR

W. F. MF LAL LEN SECRETARY
B. G . Mg CLOUD CASHIER

W. F. M LALLE N

c. H. BOSWORTV,

DEPUtY FEDERAL RESERVE

CHAIRMAN AND FEDORAS RESERVE AGENT

KB. HUTCHISON, oTrulAwA,lowA

F

AXPitgl RV E BA

_VOGEL, MI Lwau KEE,yvfscoNsi N

Chicago, March

1915.

My dear Governor Strong:I have today re eived through

your secretary, copy of Governor Hamlirs letter, acknowledging the receipt of some flo
evidently been good enough to sen

rs which you have
on behalf of the

Governors.
This

is highly appreciated.

ttention on your part

It c rtainly was very nice in

you to permit the other Go
tton in which I, at least

rnors to share in an attenhad no initiative.

71th kind regards,

Very truly yours,

Mr. Benjamin Strong, Governor,
Federal Res,rve Bank of New York,
1

York City.

AGE/

ET MEREDITH,DEs ,101 NESHE A
NO'S
G.M.R EYNO

J. B. FORGAN, CHICAGO. ILLINOIS




RVE BANK OF CHICAGO

FEDERAL R

0

OFFICERS
C. , 5,AV 0EPUTY GOVERNOR
A/1
W. F. MS LAL LE N SECRETARY
B. G. Mc CLOU D CASHIER

DI RECTORS
W. F. M LALLEN

C. H. BOSWORTH

JAMES B. Mc DOUGAL GOVERNOR

,ft.46,442,Mh.WW,606dWilig0W040.40W,

'NIROE STREET

WE

DE

J. B. FORGAN CHICAGO. ILLINOIS
H .TCH 'SON OTTUMW,OWA
JOHNSON,ATERL00, IOWA
H.B**. JOY, DETROIT. MiCHIGAN i

R7.)::TF9 (1:15F IRV

DEPUTY

CHAIRMAN AND FEDERAL RESERVE AGENT

E.T. MEREDITH2OES MOINES:101A

K

G.M.REYNOLDS,cHicAGo,iwrvoiS

-

Ess

A.H.VOGEL, M I LWAU E E ,wISEONSI N

FEDEPAL
Chicago, April 7th, 1916r EHERVEBAIIK
yoRii

Mr. Benjamin Strong, Jr., Governor,
Federal Reserve Bank of New York,
New York City.

My dear Governor Strong:-

Re ,/*ntra-District Collection Plan.

,(I am pleased to hand you here,/

with copies of the Form Letter - Rules and Requirements
- Form Resolution - as presented to our member banks
today.

Very truly yours,

:Gel)

*ernor.
Theis.

).01

FEDERAL RESERVE BANK OF CHICAGO
79 WEST MON ROE STREET

0




CE PS
B. Mc DOUGAL GOVERNOR
McKAfe,,,OEPUTY GOvERNOR
CV. F.

M.

L

LEN SECRETARY
QUO cAsHig.ft

DI RECTORS
C. H. BOSWORTH
CHAIRMAN AND FEDERAL RESERVE AGENT

J B. FORGAN, CHICAGO, ILLINOIS

W. F. Mc LALLE N
DEPUTY FEDERAL RESERVE AGENT

M. B. H UTCH !SON, OTTU MWA,ICANA

E.T. MEN EDITH.oEs mOINES.10wA
S.M.REYNOLDS CHICAGO,ILLINOIS

E L.JOHNSON,wATERLOO, IOWA

A.H.VOGEL,MILWAuKEE.WIScONSIN

H.B JOY, DETROIT, MICHIGAN

January 28t

16.

-Y

Mr. Strong:

4Pca'
,OP

The introduction which you gave me to Yr.
lty
in November, through which I was able to reach President
Wilson for a few moments, has resulted - added to other important influences at work meanwhile - in the success of
that which I sought. There has been an immense amount of
energy expended meanwhile by these other influences to the
same end, yet you made it possible to plant the seed out of
which has grown a successful outcome.
President 7911son will address, under the auspices
of our club - The Industrial Club of Chicago - an audience
of five thousand people on Monday evening next, D. V. Forty
thousand people are clamoring for seats, where we have only
I think one hundred thousand
about five thousand to dispose of.
would be on hand with an adequate seating capacity.

This is written to sincerely thank you again for your
The occasion is non-partisan and it would be diffiassistance.
cult to have you understand that which we, on the spot, are
barely able to grasp ourselves - the widespread desire by the
public, irrespective of party, to hear what President 17ilson
wishes to say. Every class of citizenship in the city is included, I do not except one. The desire to pay honor to the
President seems universal. In the greatest year of history,
his appearance here on Monday night promises to be one of the
most notable events in the history of the city.
So you are going away; you say for pleasure and study.
do not think you will either seek or secure any pleasure except that which results from diligent investigation, study and
the hardest kind of mental labor. No pleasure matches that of
personal attainment. I believe I know in a general way what you
are after and earnestly wish you success.

Take best care of yourself and may Providence look
after you and always have you and yours in safe keeping.
Yours faithfully,

Mr. Benj. Strong, Jr.,
New York, N. Y.

)

-7

--

4




January 31st, 1916.
Dear Mr. McDougal:

Thank you very warmly for your letter of Janu-

ary 28th, for your good wishesyour interest in my trip
and 71y safe return.

I really deserve no credit for your success with
President Wilson, but it was ynur own influence and engaging

personality.

I

like to be here and make you a visit

wo7ld

and hear his address, but of course, you will tell me about
it when I get back.
-:ith every good wish and again thanking you for

your thoughtfulness in writing me, I am,
Very truly yours,

James B. Me:ougal, "Rsq
Yederal Reserve Bank,
Chicago,
132 Jr/VCM

Societe Anonyme Internationale de Telegraphie sans Fil

13, Rue Brederode, BRUXELLES
Ce,radiotelegramme a eh; transmis conformement .x conditions imprimees an verso,

onditions dont Fexpediteur a eu connaissance.

S'il a des doutes quant a Fesactitude du texte de ce racliotelegramme, le destinataire
mat, moyennant paiement des taxes regulierement dues, en obtenir, si cela est possible,
a repetiiiu ar les diverscs stations elm en out successivement assure la transmission, en
ant que ce
Ltions dependent de la Compagnie de Telegraphic sans Filet des Compagnies
tssoczees; si une erre, eel constatee, les taxes payees pour la repetition soot remhoursees.

N. B.
La presente formule dolt etre jointe a toute demande se
^apgortant au radiotelegramme dont le texte se trouve ci-dessous.

To tny'
1

This message has been transmitted subject to
the conditions printed overleaf which have been
agreed to by the sender.
If the accuracy of this message be doubted, the Addressee, on paying the necessary
charges, may have it repeated from station to station over the Company's system whenever
possible, and should any error be shown to exist, all charges for such repetition will be
refunded.

N. B.

telegram.

This form must accompany any enquiry respecting this

(Date) 2

STATION

Ta.A, 4 Myer

Dehose a

Reps 4 bord 4

!landed in at

FEB.1'F--

Received here at

_DRESSE
TO




g',77

;
LA-771,1:4,

"Iiisrpots

Conditions d'acceptation des radiotelegrammes

Aux termes de l'Article 17 de la Convention Radiotelegraphique internationale et de l'Article 3 de la Convention Telegraphique de Saint-Petersbourg, la Societe Anonyme Internationale de Telegraphie sans Fil ainsi que toutes autres Compagnf.es privees ou Administrations publiques telegraphiques
ne sent soumises a aucune responsabilite a raison de la transmission les radioteleg-rammes.
La Societe Anonyme Internationale de Telegraphie sans Fil
se reserve expressement le droit de refuser la transmission
de toot message radiotelegraphique.




Conditions under which Messages are accepted

According to Article 17 of the International Radiotelegraphic Convention and Article 3 of the International Telegraphic Convention, the Societe Anonyme Internationale de Telegraphic sans Fil as well as every other private telegraph company or public telegraph administration is in no wise responthe transmission of radiotelegrams.
The Societe Anonyme Internationale de Telegraphie sans Fil
expressly reserves the right to refuse the transmission of any
radiotelegram.




FEDERAL RESERVE BANK OF CHICAGO
79 WEST MONROE STREET
OF,CERS
JAMES 9MVOOUGAL GOVERNOR
C. R. Mc KAY DEPUTY GOVERNOR
W. F. MSLALLEN SECRETARY
B. G. MSCLOUD CAS HER

DI RECTORS
C. H. BOSWORTH

W. F. MSLALLE N

CHAIRMAN AND FEDERAL RESERVE AGENT

J. B. FORGAN. CHICAGO, ILLINOIS
M.B. HUTCHISON,OTTUMWA.IOWA
E. L. JOHN SON.wATERLOO, IOWA
H. B. J OY, OETROrr, MICHIGAN

Er. Benj. Strong, Jr.,
Care of The Lewiston,
Estes Park, Colorado.

DEPUTY FEDERAL RESERVE AGENT

E.T. MEREDITH, DES molHEs,LowA

G.M.REYNOLDS.cHicAGo,ILLNois
A.H.VOGE L, mILWAUKEE.WISCONSIN

94

Dear Mr. Strong:

We have thought of you many times since your departure for Colorado, and I have been wanting to write you
a line but before doing so thought best to communicate with
Mr. Curtis and ascertain whether or not you cared to be
annoyed by correspondence. I am very glad to learn from
Mr. Curtisin his reply of the good reports they are receiving and that you have been steadily improving under the
invigorating and delightful surroundings.
It was not my purpose in this letter to make any
reference to the affairs of the Federal Reserve Banks or to
business, as you doubtless are kept informed through your
own office, insofar as you care to be, concerning the status
of affairs. I will only say that matters are progressing as
satisfactorily as could be expected under existing circumstances.
Governor Wold was in this morning enroute to Washington as an
uninvited guest to attend a hearing granted to certain of the
Wisconsin bankers, who are still praying for release from the
Minneapolis district and admission to the Chicago fold. He
asks to be remembered to you and sends his very best wishes.

You will please
to this note. You are on
know that you are getting
that ere long you will be

not feel obliged to make any reply
your vacation, and I ant very glad to
along so nicely and sincerely hope
strong and well again.

With warmest personal regards, believe me
Sincerely and truly,
K.

4.

i)




FEDERAL RESERVE BANK OF CHICAGO
79 WEST MONROE STREET
OFFICERS
JAMES B. MS DOUGAL GOVERNOR
C. R. Me KAY DEPUTY GOVERNOR

W. F. Mc LALLEN SECRETARY
S.G.MVCLOUO CASHIER

DIRECTORS
C. H. BOSWORTH
CHPORMANANDFEDER,R

J. B. FO ROAN. CHICAGO,

M. B. H UTCHISONorrrumwA.
C. L. JOHN SON,

ELOO, o

H. B. JOY, DETROIT.,

W. F. MSLALLEN

ENT

DEPUTY FEDERAL RESERVE AGENT

E.T. MEREDITH, DES MOINES,10WA
G.M.R EYN 0 LDS,CHICAGO,LINOS
A.H.VOGEL,m1LWAUKEE,WISCONSIN

September 9, 1916.

Dear Mr. Strong:
It was not al all necessary for you to make reply
to my letter, nevertheless I was delighted to receive your
personal of the first instant and to learn therefrom of your
continued improvement. 'What you say regarding the delightful
climate in and about Estes Park only confirms that Which we
have heard through other good authorities, and the climate
and surroundings must indeed be wonderful.

Your reference to the acquaintance which has sprung
up between your son and my brother Ed's boy reminds me of
David having told me soon after vacation began that he was
expecting to see Benjamin, Jr. here in Chicago, and I made a
special request of my nephew that he not fail to brine your
son out to Riverside. In fact, I was much disappointed that
this could not have been arranged.

At the recent Conference of Governors, concerning
which I do not propose to say much here, it developed that the
Federal Reserve Barbs will not be tally represented at the
Kansas City Convention.
However, I am planning to be in a
dance for a day or two.
Mr. McKay is off on his vacation, luckily for him,
as there is still much to contend with in connection with the
operation of this new collection system. The point that gives
us the most trouble comes from the general use of the term
"
"Collectible at par through the Federal Reserve Bank of
It causes much confusion and much dissatiSfaction owing to the
fact that notwithstanding this statement printed on the check
the same meets with a charge whenever presented.
Your pleasant message to our group of "Highlanders"
was promptly delivered and was well received, and as indicated
above, your letter was most welcome.With best wishes and warmest personal regards,
believe me
Sincerely and truly,

Mr. Benj. Strong, Jr.,
Estes 2ark, Colo.
P. S.

My brother, Robert, requests me to give you his verybest
regards.




Estes Park, Colo.,
eeptember 15th, 1916.
eear Mr. EcDougal:

Thank you for your kind letter of September 9th.
Pull reports of the Conference of Governcrs have
been received and nrturmlly made me feel homesick and conecious

of a loss in misoang this meeting, which is the first time
have not attended.

All the letters received out here emphasize the
&ecee variety of difficulties growing out of the new collection
system, which I suppose were inevitable. They will straighten
out with time, as all these matters do, end meantime, the cooler
weather will alleviate the distress of long hours.
1 would very much appreciate an expression of the

VieWS of your bank in regard to the errangments for foreign bus-

iness, so far as they have been discussed. There are a great
many puzzling features of this matter wnich will have to be carefully considered, and I would particularly aporeciate an exorese
eion of the views which you and your aseciates entertain.
Won't you give me warmest regarde to your brother,

and the Gem() to yourself and your associates in the bank?
Very sincerely yours,

J. B. McDougal, Esq.,
Governor, Federal Reserve Bank,

Chicago, Ill.

6




FEDERAL RESERVE BANK OF CHICAGO
79 WEST MONROE STREET
OFFICERS
JAMES B. Mc DOUGAL GOVERNOR
C. R. Mg KAY DEPUTY GOVERNOR

W.F.MELALLEN SECRETARY
B. G. M,C. LOUD CASHIER

DI RECTORS
C. H. BOSWORTH
CHAIRMAN AND FEDERAL RESERVE AGENT

J. B. FORGAN, CHICAGO, ILLINOIS
M.B. HUTCHISON, OTTUMWA,I0WA
E. L. JOHNSON,WATERLOO, IOWA

W. F. Mc LALLE N
DEPUTY FEDERAL RESERVE AGENT

E.T. MEREDITH,oEs MOINE5,10WA
G.M.R EYN OLD S,C1-11CAG0,1 LLI NOtS

A.H.VOGEL,miLWAUKEE,WISCONSIN

H.B. JOY, DETROIT, MICHIGAN

September 20,

'51D,Y/9116.
Mt. Benj. Strong, Jr.,
Estes Park, Colo.
Dear Mr. Strong:

Your personal of the fifteenth instant was duly
received, and was very welcome. I note therefrom your request for an expression of the views of the Chicago Bank in
regard to the arrangements for foreign business insofar as
they had been discussed, and am pleased to advise you as
follows:
Our Executive Committee and also our Board of
Directors have on several occasions discussed informally the
advisability of undertaking foreign exchange business, and the
consensus of opinion has been unfavorable to doing so until
such a time as it can be done satisfactorily and with safety.
Subsequent to the April Conference of Governors
I brought the matter up for discussion at a regular meeting of
our Board, and reported as best I could on your trip abroad.
You will remember, hcwever, that at-the time of the Conference
referred to above, in reporting on your trip abroad, you indicated that you had a plan in mind but that the attending
circumstances were such as to make it impossible for you to
disclose the details then. Our Directors were much interested
and expressed the hope that we might in the near future have
the benefit of a more complete report, and the question naturally
arises as to whether you would now feel at liberty to divulge
that which you could not disclose last April. If so, I will be
much interested in having furtLer light on the subject, and am
very sure such a report might and probably would be of great
assistance to our Board of Directors in determining the policy
of this bank.

Er. Strong

42.

FEDERAL RESERVE DANK OF CHICAGO




Personally, I have not been disposed up to the
present time to compete with our local member banks for such
bills as originate in Chicago and vicinity, although we may
do so at some future time. There is another class of business,
however, and I believe that is what you have personally had in
mind going after. I refer to the purchase and sale of accepted
bills in the London market for instance, concerning which you
were of the opinion that favorable arrangements could be made,
although you pointed out two very important questions which
should be considered. To quote from your remarks at the Seventh
Conference of Governors:'The first is: is it safe to buy bills in London
when you don't know whether you are going to get
back your balance on a gold basis; the other
question is whether with this war going on we are
justified in doing business in a belligerent country
and whether Are would not be subject to criticism."
Until a definite plan is offered for consideration,
I can only express in a general way the opinion that the best
interests of the Federal Reserve Bunks and of the country at
large would be served by arranging proper machinery for buying
and selling bills in the London market, provided sufficient
safeguards onn be established to insure re-payment in mold of
the funds invested and further, provided, the question of the
propriety of our engaging in such operations in a belligerent
country during the continuation of the war can be answered
affirmatively to the satisfaction of those interested.

I have purposely refrained from communicating with
you an business matters, in the belief that the object sought
in your visit to Colorado could be the better attained by casting
aside everything of this sort. However, since you have introduced
this subject, I am pleased to have stated in response to your request the situation as it is with us, and would be very glad to
hear further from you at such a time as you may feel disposed to
write.
I hope you are still improving and that ere long you
may again be as good as new.

With kindest personal regards, I am
Very truly yours,

K.

771/4 ft"--7P-A...
Governor.

0




FEDERAL RESERVE BANK OF CHICAGO
79 WEST MON ROE STREET
OFFICERS
JAMES B. ME DOLIGAL GOVERNOR
C. R. ME KAY DEPUTY GOVERNOR

W. F. ME LAL LEN SECRETARY
B.G. MECLOULD CASHIER

DI RECTORS
C.H.BOSWORTH
CHAIRMAN AND FEDERAL RESERVE AGENT

J. B. FORGAN, CHICAGO, ILLINOIS

M.B.HUTCHISON,orTumw....WA
E. L. JOH NSON,wATERLoo, IOWA

W. F. Mc LALLE N
DEPUTY FEDERAL RESERVE AGENT

E.T. MEREDITH,DES MOINES.10WA
G.M.REYNOLDS,CHICAGO,ILLINOIS
A.H.VOGEL,MILWAUKEE,WISCONSIN

H. B. JOY, DETROIT, MICHIGAN

September 246;. 1916.

Mr. Benj. Strong, Jr.,
Estes Park, Color&do.
Dear Er. Strong:

In further reference to the subject matter of your
letter of the first instant, I am pleased to advise you that
since replying to the same I have heard from Governor Faucher,
Who states that he is now planning to attend the Kansas City
Convention. Moreover, I have written to Governor Wold urging
that he too accompany us, and have strong hopes that he will
do so.
You may have noticed through press dispatches
reports of the disturbances affecting a number of the private
banks and bankers operating in the outlying district within the
limits of Chicago. Unfortunately, the Illinois banking lays
are such as to make it possible for any individual or set of
individuals, who may desire to embark in the banking business,
to do so. They may put up a sign "George Washington Bank,"
"Abraham Lincoln Bank," "Benjamin Strong Bank," or may use any
title, provided it does not contain the words "National" or
"State." No capital is required. Several of these so-called
banks have closed their doors here within the last few days,
and this afternoon's paper reports three others having followed
The situation is much aggravated through the sensuit today.
sational press reports, and it would not be at all strange if
the trouble should extend to some of the small State and National
Banks in the outskirts, although I believe with scarcely an exception, such institutions located within the City of Chicago
are in sound condition and are under efficient management.
Mt. McKay, who has just returned from a month's
vacation, wishes to be remembered to you, and has asked me to
extend his very best wishes.
Very truly yours,

c7:11:4
K.

Governor.




ketes Park, Colo.,
September 23rd, 1916.

Dear Mr. EcDougal:

Your two letters of the 20th are received and I am delighted to hear from the Scotch contingency. Please give my
warmest regards to McKay and the others at the bank.
I had noticed the newspaper account of that little bankyour way, but had not felt that the matter was of
ing flurry
any importance. If you fellows would only get together and revise the state banking law, which, has long needed improvement,

you would get rid of a lot of those ,aildcat banks which are a mendee.
ace to the strong banks. They are like bad tree tops in n forest;
Once they catch fire, they burn up good timber.
I am writing separately about the foreign arrangements.
With best regards, I am,
Sincerely yours,

J. B. McDougal, Esq.,
Governor, Federal Reserve Bank,

ehicago, Ill.
BS/VOM

Ustes Psrk,,Colo.,
Ceptember 23rd, 1916.
Dear Governor iscDougal:

I am very glad to get the statement contained in your
letter of the 20th in regard to the discussions at your Directors
meetings on the subject of the foreign business.
There seems to be a good deal of misunderstanding as to
the proper function of the reserve banks in thgs matter, some of
the Governors and I imagine the Directors of s good many reserve
banks), considering that the law contemplates 0.1f undertaking a
regular foreign business.
Mr. Forgan will realize how impossible it would be for
the reserve banks to undertake any such business. They would
have to open commercisl credits, developea considerable private
clientele, make loans and advances which the law does not permit
them to make, and generally do a bsnking business over a wide
far beyond our present powers.

It will also he perfectly apparent to him that if the
reserve banks undertake to compete with heir member banks in

buying long bills in the open market, it would drive the member
banks ot4 of business. Our money costs us nothing; member banks
pay at least 2 % on sn average for all the money they employ. At
this differential in rates, we could always underbid the mesber




-2To

J, B. PcDougal, Esq.

Sept. 23, 1916.

banks in buying bills and naturally always undersell them in
furnishing demand exchange. There is another serious obstacle in the way of eur undertaking a general exchange business
and that is the lack of proper machinery. It takes years to
develop an organization with adequate information about cred-

its, etc., so as to safely purchase documentary bills before
acceptance. I do not think the reoerve banks should undertake that business, or that they were organised for that purpoes.

The oimplest line of proceedure will be the safest
and best and I believe, the most profitable. The plan 1 had
in mind as to accumulate sterling whenever it could be pur-

onaued at ratee below the gold import rate, which is to-day
somewhere between $4.75 and ;;t4.76.

As balances were accumu-

lated in London, they would be invested in the highest grade
of bills current in the London market, principally those accepted by the clearing bankers. It would probably be stipulated that preference be given to bills made by American drawers and bearing American endorsement and, in addition, we would

endeavor in each instance to get the endorsement of the very
best bill houses, such as The Union Discount Co., The National
Discount Co., Alexander and othere. These bills would be carried in portfolio for our own account in London and new purchases
meet) as bine natured until posoiblyeachange re-ched a level
whore we might be losing gold from this country.




Net until

To

Sept. 23, 1916.

J. B. McDougal, Yeti.

this would we undertake to let our bills rut off and sell oxchance and withdraw the credit. You can realize that the account would be simply an investment account in sterling which

aiat continue for months, even years, at a fairly constant
Level until exchange turned adverse to this country and then
for the time being, the account would be liquidated.
The questions which you quote from the record of the
seventh Conference of Governors ere really the most important
questions.

As to the first, all that

can now say without

violating confidences, is that the reserve banks would have
the benefit of guaranties in connection wih their operation
of such undoubted goodness that they could not be questioned
and the account would be conducted on a gold basis, ao thit
gold would either be earmarked or brought to this country in

settlement upon order and at a rate for fine gold to be established and determined in

advance.

As to the second question, it is up to the Fathers
at Washington, and I have not yet heard from them.
Personally, I have never had any doubt as to the propriety of our engaging in these operations
Our purpose would

at the present time.

he to promote our own exnort trade and protect

it by stabilizing exchange

and,

the purpose of extending loans

of course, it would not be for
to

any belligerent,

of our business and should not be a consideration.




which is none

-4To

r,ept. 23, 1916.

J. B. McDougal, Esq.

The matter has to be dealt with confidentially for
the present and I hope you will ex Jain this to your associates
and advise them that I hope at an early date to be able to submit a complete written report covering the whole situation.
I hope you will write me now and then.

It is a great

pleasure to hoar from you fellows and makes me feel that I an

not forgotten out here.
Very truly yours,

3. B. UoDougal seq.,
Governor, Federal lieserve Bank,
Chicago, Ill.







FEDERAL RESERVE BANK OF CHICAGO
79 WEST MONROE STREET
OFFICERS
JAMES B. Mg DOUGAL GOVERNOR

DIRECTORS
C. H. BOSWORTH
CHAIRMAN AND FEDERAL RESERVE AGENT

W. F. Mc LALLE N
DEPUTY FEDERAL RESERVE AGENT

C. R. Mc KAY DEPUTY GOVERNOR

J. B. FORGAN, CHICAGO, ILLINOIS

E.T. M ER E DITH,DEs MOINES,I0WA

W. F. Mg LAL LEN SECRETARY

M. B. H UTCH ISON, OTTuMWA.10WA
E. L. JOHN SON,wATERLoO, IOWA

G.M.R EYNOLOS,CHicAGo,ILL.ols

B. G. MSCLOUD CASHIER

A.H.VOG EL,MILWAUKEE ,WISCONSIN

H. B. JOY, DETROIT, MICHIGAN

October 2, 1916.

c
Dear Mr. Strong:

Is

Since you had plainly indicated to me by letter
your interest in the meeting of the American Bankers Association
held at KanSas City last week, and had expressed your views regarding the importance of the several Federal Reserve Banks
being represented, I had intended to write apprising you of the
However, beProceedings and accomplishiments of the meeting.
fore leaving Eansas City Mr. Hendricks told me of his intention
to visit you before returning East, and therefore I assume that
you have received through him a more complete report than it
would have been possible for me to present in the form of a
letter. Under these circumstances, I shall deal with the subject but briefly.
Upon arriving in Kansas City itionday morning there
was much comment current concerning a meeting which had been
held the previous night attended by the so-called country
bankers, in which a number of individuals - the majority I
believe from the South, - had expressed themselves as strongly
opposed to the continuation or further development of the new
collection system. Later on another meeting of the country
bankers was held, with the result that a set of resolutions
was passed demanding an amendment to section 16, and furthermore that unless steps were quickly taken to secure the same
suit would be started for the purpose of testing the constitutionality of certain clauses of the section. These resolutions,
later on, were to have been presented to the general convention
but before coming up there,through the influence of some of the
cooler, and wiser heads, the text of the resolutions had been so
I will enmodified and subdued as to be scarcely recognisable.
close hurewith a copy of the resolutions as finally passed by
the Convention.

The presence of Mr. Warburg at the Convention, and
also of Governor Harding, whose appearnace there was somewhat of
a surprise, was most fortunate. My personal impression is that
the Kansas City Convention accomplished much toward overcoming
dissatisfaction with the check collection plan, and in securing
in behalf of the Federal Reserve Board and the Federal Reserve

4

FEDERAL RESERVE BANK OF CHICAGO




Mr. Strong #2.

Banks the co-operation of a certain class of member banks
which heretofore have not been friendly in their attitude.
Mr. Warburg's speech was intently listened to. I regard it
as a masterly effort. Its educational advantages cannot be
over estimated.
I was greatly pleased with the encouraging reports
of your physical condition received directly from Mr. Warburg
and Mr. Aiken.

With warmest personal regards, I am
Very truly yours,

K.

Enclosure.

Mr. Benj. Strong, Jr.,
Estes Park, Colorado.

Governor.

COPY

RESOLUTION
WHEREAS, The purposes of the Feder, Reserve Act are to mobilize the reserves and to

vify the National Banking System, thereby providing an elastic currency and a system
of rediscounts

and

WHEREAS, The Act has in it the possibilities of preventing the suspension of cash
payments by banks, thereby making the country safe from currency panics, and

WHEREAS, Section 16 of said Act providing for the so-called par collection of checks
is not a feature

necessary

to the attainment of the objects sought by the Federal

Reserve Act, and the system of collecting checks now in operation under the law, as interpreted and applied by the Federal Reserve Board works serious hardships upon and
heavy losses to thousands of country banks,

and

WHEREAS, It is the belief of the majority of bankers that Congress did not intend
to deprive the banks of legitmate profit, therefore

BE IT RESOLitaD, That tke American Bankers Association, while approving the funda-

mental principles of the Federal Reserve Act and expressing loyalty to the Federal
neserve System, protests against the provisions of the Act relatihg to the collection
of checks, and instructs the Committee on Federal Legislation of the American Bankers

Association to endeavor to secure amendments to the Federal Reserve Act, providing for
the establishment of a collection system which
to

is fair and

equitable to all Banks and

the general public.

BE IT FURTHER TXSOLVED, That the President of the American Bankers Association be
authorised and directed to appoint a Committee of twenty-five bankers, fifteen of whom
shall be country bankers, and ten of whom shall be reserve city bankers, and that this

Committee co-operate with the Committee on Federal Legislation of the American Bankers
Association




in bringing

about the enactment of the desired amendment.




FEDERAL RESERVE BANK OF CHICAGO
79 WEST MONROE STREET
OFFICERS
JAMES EL MS DOUGAL GOVERNOR
C. R. Me KAY DEPUTY GOVERNOR

W. F. MC LALLE N SECRETARY
B. G. MSCLOUD CASHIER

DIRECTORS
C. H. BOSWORTH

W. F. Mc LALLEN

CHAIRMAN AND FEDERAL RESERVE AGENT

DEPUTY FEDERAL RESERVE AGENT

J.B. FORGAN, CHICAGO, ILLINOIS
M. B. HUTCH SON, oTTuMWA.10WA

E.T. MEREDITH, DES MOINES,10WA
G. MR EYNO LDS,CHICAGO,ILLINOIS

E. L. JOH NSON,WATERLOO, IOWA

A.H.VOGE L, MILWAUKEE ,WISCONSIN

H. B. JOY, DETROIT, MICHIGAN

034,r 3, 1916.

Xev.
Mr. Benj. Strong, Jr.,
Estes Park, Colo.
Dear :dr. Strong:

The delay on my part in personally acknowledging
your valued letter of the 23rd ultimo was occasioned by my
absence from the city in attendance at the Kansas City
Convention.
I have read very carefully and with much interest
and satisfaction the expression of your views as to the procedure on the part of the Federal Reserve Banks in developing
the foreign exchange business, and also the scope of the
Your plan
activities which you believe should be undertaken.
of accumulating sterling exchange ,when this can be done advantageously, investing the same in high grade bills accepted
by responsible bankers, and carrying then until conditions are
such as to justify their liquidation, appeals to me as a sound
and desirable course to pursue. I am much interested in this
and also other matters touched upon in your letter, and have
taken the liberty of having copies of the same sent to each of
our Directors in order that they may have the benefit of your
views in the premises.
Beyond the foregoing, I note with particular interest
your statement that matters have yet to be dealt with eonfiden-4tially, but that you hope in the near future to be able to submit a complete written report covering the whole situation. I
am sure our directors will be much pleased to receive such a
report whenever you feel at liberty to go into the matter.
dith kindest personal regards and best wishes,
Very truly yours,

K.

Governor:'--i/ -




Xstes Park, Colo.,
October 6th, 1916.
Dear Governor McDougal:

Your letter of the 2nd has just reached me and I am
delighted to receive the encouraging account of what transpired
at Kansas city.

The resolutions oaseed b:y the COnvention

really innocuous; if that is the worst they can say of our per-

fors to date, I think all danor of a revolt on the part of
Let us, therefore, consider we have a
year
athing space during which time we can develop a little
more friendiy feeling with our co,untry banks, cossibl:i encouraging
the admission of more state banks and next year go to the Convention prepared to receive some praise rather than criticism.
member banks has passed.

had a delightful visit with Narburg and Aiken.

It

felt like old times.
After the 15th of this month, my addreus will be 4100
Montvisw Boulevard, Denver.

Very sincerely yours,

J. B. McDougal, Esq.,
Governor, federal Reservellank,

Chicago, Ill.
BS/VCM

Dictated by Mr. Strong but
signed in his absence.




Estes Park, Cabo.,
October 6th, 1916.
Dear Governor UcDougalt

Thank you very much for yours of the 3rd.

I am dictating this hurriedly before leaving for
D,,:nverwit

Yr. Vnnderlip and Mr. Trumbull who have beon vie-

Iting me here for a week, but will try und write move fully

later on.
In the meantime, if you heve opportunity to discuss
thiG mc.ttor with Mr. Vorgan, I would very much appreciate your

asking him to writc me quite fully his views so far as he has
fOrmed them from the rather brief explanation contained in my

letter of Ceptembar 23rd.
With warmest regards, I am,
Very truly yours,

J. B. McDougal, Eeq.,
Govznor, Federal Reserve T3ank,
ChiA4go,

Dictated by Mr. Strong but
sii7ned in his absence.




FEDERAL RESERVE BANK OF CHICAGO
79 WEST MONROE STREET
OFFICERS
JAMES ELMS DOUGAL GOVERNOR
C. R. MC KAY DEPUTY GOVERNOR
W. F. MF LAL LE N SECRETARY

B. G. McCLOut, CASHIER

DI RECTORS
C. H. BOSWORTH

W. F. Me LALLE N

CHAIRMAN AND FEDERAL RESERVE AGENT

J.13. FORGAN, CHICAGO, ILLINOIS

DEPUTY FEDERAL RESERVE AGENT

M. B. H UTCH !SON , OTTLAUNA.10WA

E.T. MEREDITH, oEs MOINES.I0wA
G.M.REYNOLOS,cHicAGo,H_LIHols

E. L. JOH NSON,wATERLoo, IOWA

A. H.VOGEL, MILWAUHEE.WISCONSI N

H. B. JOY, DETROIT. MICHIGAN

Ootober 9, 1916.

My dear Mr. Strong:
I am pleased to receive your
the sixth instant.

-personals of

le

I believe in a former let* I told you of having
received very encouraging reports Oncerning you from both
Mr. Warburg and 'Lir. Aiken as the result of their visit with

you, and I now notice that you he been entertaining other
distinguished visitors, namelyi/Mr. Vanderlip and Mr. Trumbull.
In keeping with yo_ suggestion, I have today discussed with Mr. Forgan the p,lUbject matter of your letter of the
jr.
23rd ultimo, bearing upon fOreign exchange activities.
and I believe favorably impressed
Forgan was much
with the suggestions you 41
offer, and I think will write you with
intereste1
to the matter e'ther today or in the near future.
iirespect

this afternoon for a few days outing.
obert and myself will endeavor to renew
our youth by going ' ck shooting together, the first time in
more than twenty yefars. Knowing your fondness for this class
of sport, I wish y u might go along with us.
I am leavin

My brothers, :Edward,

With w rmest regards, I am
Very truly yours,

Governor.V'

K.

Mr. Benj.

trong,
Estes Park, Colorado.

cJ




FEDERAL RESERVE BANK OF CHICAGO
79 WEST MONROE STREET
OFFICERS
JAMES B. MC DOUGAL GOVERNOR

c rgasswotswtrEirATTNoR
W. F. Mc LALLEN SECRETARY
B.G,MCCLOUD CASHIER

DIRECTORS
C. H. BOSWORTH
CHAIRMAN AND FEDERAL RESERVE AGENT

J. B. FORGAN. CHICAGO, ILLINOIS
M. B. HUTCHISON,OTTUMWA,10WA
E. L.JOHNSON,WATERLOO, IOWA
H. B. JOY, DETROIT. MICHIGAN

W. F. McLALLEN

DEPUTY FEDERAL RESERVE AGENT

E.T. M ER EDITH, oEs MOINES,I0WA

G.M.REYNOLDS,CHIcAGo.ILLinois
A.H.VOGEL,MILWAUKEE,WISCONSIN

November 20, 1916.

Benjamin Strong,
4100 Viontview Boulevard,
Denver, Colorado.

gitMr.
4-'4947

Dear Mr. Strong:

,01

Since the receipt of your letter of Septeier 23rd
we have been giving some consideration to the advisability of
proceeding in the matter of undertaking a plan, such as you outlined, for accumulating sterling and investing the same in the
London market through the purchase of high-grade bills, such as
you have indicated were available on sound and safe terms. Would
not such a procedure, if indulged in to a considerable extent by
the Reserve Banks, be a substantial factor in controlling the flow
of gold later on?
It is probable that these questions will be discussed
at the coming Conference of Governors, and therefore, I would much
appreciate the receipt from you of just as comprehensive a statement as you feel at liberty to make at the present time.
In making
this request I have in mind that no doubt you still feel obliged to
withhold some of the confidential information of which you are
possessed.
It has been some time since I have heard direct from
you, but I was much pleased with the highly satisfactory reports
secured through your associates in New York, upon the occasion of
my last visit there two or three weeks asp. We missed you and the
benefits of your counsel at the last Conference of Governors, and
as I understand that you are settled for the winter at Denver,
therefore assume that we will again have to proceed without you
at the next Conference, which, as you no doubt are aware, is called
for the eleventh proximo. It is under these circumstances that
am prompted to ask for an expression of your opinion as to whether*
or not the present wild be an opportune tine to begin activities
in London exchange.
Very truly yours,

rno




November 25th, 1916.

CONFIDENTIAL.

Dear Mr. McDougal:

Your favor of the 20th insl.
might give you a more definite reply

received and
an now seems.

The whole question of appointment of foreign
ents was taken up wiih the Ye

mat-

owe:

and submitted to the

Reserve Board a definite

1 in some detail for the appoint-

ment of the Bank of E

espondent in London of the

Federal Reserve Bank o

Accompanying this

applica-

g a method by which other reserve

memoranda out

afforded oppor

rrespond-

status of the

About two mont

tanks which

sible.

was dropped t-mpora-

rily on account of my'illn

tion,

I

e Boar.

on my rcturn from Europe.

ter is briefly as 10

wish

conduct foreign operations would be
nity to participate in all transactions and a

statement of th

views of the management of the Reserve Bank of

New York in res

t of questions of neutrality, etc. involved.

In submitting this matter for consideration, we took
the view teat the Federal Reserve Board would be required to de-.
termine, first, as to the feasibility of the plan as a business
proposition; second, its legality unddr the terms of the

Reserve

Act;- third, as to its legality or pro,riety at this time

in view

of tne attitude of neutrality

which had been maintained by the

Government of the United States.




-2To

Mr. McDougal.

_

Nov. 25, 1916.

The Yederal Reserve Board has approved the application
in

/31-2

_Lncapie,

ect to similar approval being given b y the

Department of State and subject to final approval by the

Board

before any actual transactions are undertaken.
In discussing the arrangements which it seemed to
were the only ones feasible under prose
ficers 2nd directors of the Bank of

me

es with of-

gland, it wa

nder stood

that no announcement or publicity wutd be allowed

connection

with the negotiations until the approval of both p

es had

been obtained and ratificati
by the Court

of the Bank

lly be had

11 as our own resaec-

tive organizations.
You will,. t erefo

first, to obtain the
to obtain the consent of
auguration of transac
the Court

of the Ba

arran:.,H nt in detail

their appr v

t is still necessary,
e Department; second,

Federal Reserve Board to the into obtain ratification by
d and, fourth, to submit the

twelve reeerve banks to secure

brief, is the status of the matter

at the preen time.
Answe

g your inquiry as to my own views of the ef-

fect of our un e taking transactions at the ';resent time, I

am perfectly frank to say that I do not believe that they
could or should be undertaken upon a scale large enough,to

materially affect the present rate of exchange or contrOl the
present gold movement.

I do believe, however, that if an ar-

rangement of the character which has already been outlined

4




-3-

To

Nov. 25, 1916.

Mr. McDougal.

quite fully to the Reserve-Board could be put into operation

in a small way at the preent time, it would be a very simple
matter later on to enlarge the scope of operations to such a
degree that it wo,_ld prove to be a most

controlling and regulating within safe

mport ant factor in

ilts, an adverse gold

movement.
his respect

I would not feel so opt

he establi sh-

it not that there now seems every prospect

Bank of Franc

ment of similr relations

were

just as

coneluded with

soon as a preliminary u

the

Bank of England.

n much more detail that at

I have writt

e reserve banks and feel

any time to an
obliged on a

mely confidential character of

the negotiati

hold this letter in confidence.
hat the matter will come up far

is
di;

..sion at the m

g in Washington on the 11th inst. and

ight be tacit

once which we
who

to avoid reference to any personal corresy have had prior to the submission of the

matter

would 1
'

to

1 of the reserve banks.

Personally, I

see operations inaugurated at once.

Thank you very much for what you ea; about my progress.

It has been to date most satisfactory and while I have no prom-

ises as when I may return, yet my doctor here is hopeful of
complete recovery.

With personal regards, believe me,
lic

Very truly yours,

J. B. McDougal, Esq.,
Governor, Federal Reserve Bank,
New York City.




FEDERAL RESERVE BANK OF CHICAGO
79 WEST MON ROE STREET
OFFICERS
JAMES B. MT DOUGAL GOVERNOR
C. R. Mc KAY DEPUTY GOVERNOR
W. F. Me LAL LE N SECRETARY

B. G. Mc CLOU 0 CASHIER

DIRECTORS
C.H. BOSWORTH

W. F. ME LALLEN
DEPUTY FEDERAL RESERVE AGENT

CHAIRMAN AND FEDERAL RESERVE AGENT

U. S. FORGAN, CHICAGO, ILLINOIS
M. IS_ H UTCH ISON, OrTumwaJowA
E. L.JOHNSON,wATERLoo, IOWA

E.T. M ER EDITH, oEs MOINES,I0WA
G.M. N EYN 0 LDS,CHICAGO.ILLINOIS
A.H.VOG EL, MILWAUKEE ,WISCONSIN

H.B.JOY, DETROIT, MICHIGAN

December 1, 1916.

Mr. Benj.

Strong,

4100 Montview Boulevard,
Denver,
Dear Mr.

Colorado.

Strong:

Ar

I am in receipt of your c
the twenty-fifth ultimo, written

reply to my letter addressed
have noted with a great deal of

to you an November twentieth.

interest all you have writte

fidential letter of

and wish to thank you for the

pains you have taken to co 7r all important points involved.

What you have written wilt, of course, be held in confidence,
in accordance with

yo9i

request.

With besVpersonal regards, I am
Very truly yours,

K.

e




FEDERAL RESERVE BANK OF CHICAGO
79 WEST MON ROE STREET
OFFICERS

DIRECTORS

JAMES B. Mc OOUGAL GOVERNOR
C. R. Mc KAY DEPUTY GOVERNOR
W. F. Mc LAL LE fI SECRETARY

B. G. MSCLOUD CASHIER

C. H. BOSWORTH
CHAIRMMANDFEDERALRESEWEAGENT

J. B. FORGAN, CHICAGO. ILLINOIS
M. B. H UTC H !SON, orTu MWA,I0WA
E. L. JOHNSON,ATERLoO, IOWA

W. F. Mc LALLE N
DEPUTY FEDERAL RESERVE AGENT

E.T. M ER EDITH, oEs MOI NES.10W A
G.M.R EYN 0 LIDS,CHICAGO,ILLI NOIS
A. H. VOG E L, MI LWAUKEE,WISCONSIN

H.B.JOY, DETROIT, MICHIGAN

AO.

December 19, 1916.

Dear Er. Strong:
I. -presume ere this that you have been fully advised
concerning the proceedings and accomplishments of the Governors
at their Conference last week. We were much pleased to receive
your telegram containing the suggestion that our next meeting
be held at or near Denver, and while I believe the suggestion
was heartily concurred in by all present, the date and place
of holding the next Conference were not definitely decided upon.

We were fortunate enough to have Er. Vanderlip as the
guest of the Bankers Club of Chigago at our dinner on Saturday
evening, and doubtless his presence explains the unusual attendance.
Practically all of the prominent Chicago bankers were present, and
also the Presidents of most of the larger banks located in the
principal cities throughout the Central West. I wish you might
have been present. Thinking that it may be of some interest to
you, I will enclose herewith a copy of Er. Vanderlip's speech.
I find that I am digressing from the object in mind
when I began this note. That I wanted to say first of all was
that we missed you and missed you very much at the Conference of
Governors. We all hope that we may have the pleasure of seeing
you at the next meeting.

With best wishes, I am
Very truly yours,
K.

Enclosure.

Er. Benj. Strong,
4100 Ebntview Blvd.,
Denver, Colorado.




Denver, Colorado,
December 22, 1916.

Dear

ful of.you to send

It'was nice to hear from you and very tho
a copy of lir. Vanderlip's address, which I have re

and

Frank Trumbull spent

with interest.

He

ark earlier in the

a week with me

summer and I aia. expecting to see him again after the

ys, as ho has

promised to stop over on his way'Ia.
I feel that it is a mis

to be missing those

meeting* of the governors during

mportant stage of the develop-

ment of the Reserve 3yst

be helped and I try nma keep

pace with

you as wel

Wishing you
successful New Year,

J. B. Mc
Care Fede
Chicago, Ill.

35/CC

Merry Christmas and a most




FEDERAL RESERVE BANK OF CHICAGO
79 WEST MONROE STREET
OFFICERS

DI RECTORS
C. H. BOSWORTH

W. F. ME LALLEN

J. B. FORGAN. CHICAGO. ILLINOIS

JAMES B. Mc DOUGAL GOVERNOR
C. R. McKAY DEPUTY GOVERNOR

E.T.MEREDITH,DEs MOINES.10WA
G.M.REYNOLDS,CHICAGO,ILLINOIS

CHAIRMAN AND FEDERAL RESERVE AGENT

M. B. H UTCH ISON , OTTUMWA,I0WA

W. F. Mc LAL LEN SECRETARY
B. G. MSCLOU D CASHIER

E. L. JOHNSON,ATEPLoo, IOWA
N.B. JOY, DETROIT, MICHIGAN

DEPUTY FEDERAL RESERVE AGENT

A.H.VOGEL,MILWAUKEE,WISCONSIN

January 8, 1917

Mr. Benjamin Strong,
4100 Montview Boulevard,

Denver, Colorado

My dear Mr. Strong:

Your brief but very
instant was duly received an

elcome note of the third
am pleased to have this

congratulatory expression f am you with respect to the showing
made in our Second Annual

,eTort.

It is high praise from good

authority.

The last pa

rah in your letter reading, "You

are making so much mo ey that I am afraid we will have to
look into it," woul
excepting for the

have detracted from the savor of your note
act that we have long since become quite

accustomed to sugestions of this sort.
With/best wishes,

I am

very truly yours,
///1




FEDERAL RESERVE BANK OF CHICAGO
79 WEST MON ROE STREET
OFFICERS
JAM ES B. 5D0 GAL GOVERNOR
C_H. MCKAV-FEPUTY GOVERNOR
W.F. MCLALLEN SECRETARY
B.G. M,CLOUD CASHIER
S. B. CRAM ER ASST. CASHIER

DI RECTORS
W. F. Mg LALLEN

WA. H EATH
CHAIRMAN AND FEDERAL RESERVEAGENT

J.W. BLODGETT GRAND RAPIDS. M ICH.
J. B. FORGAN CHICAGO. I LLINOIS
M. B. HUTCH ISON OTTUMWA IOWA

DEPUTY FEDERAL RESERVE AGENT

E.L.JOHNSON WATERLOO. IOWA
E .T. MEREDITH DES MOINES. IOWA
G. M. REYNOLDS CH ICAGO.ILLINOIS

A. H. VOGEL MILWAUKEE. WISCONSIN

March 7, 1917.

Dear Mr. Strong:
I have just received your telegram inviting me to

dine with you at the Blackstone on Sunday evening, and have
wired you that I am delighted to receive and to accept.

I have purposely refrained from writing you very
frequently, but wish to assure you of the pleasure Which your
message gives me from two points of view - first, in the opportunity afforded to have a visit with you, and second, as I take
it,your ability to come on to Chicago seems satisfactory evidence
of your much improved physical condition.
Very truly yours,
K.

Mr. Benj. Strong,
4100 Montview Blvd.,
Denver, Colorado.




Form 1217
CLASS OF SERVICE DESIRED
Fast Day Message

Day Letter

WESTEk-a;ENA UNION
ca" E

WESTERN UNION

-ror _yr

Night Message

Night Letter

Patrons should mark an X opposite the class of service desired;
OTHERWISE THE TELEGRAM
WILL BE TRANSMITTED AS A
FAST DAY MESSAGE.

TEL111

NEWCOMB CARLTON, PRESIDENT

Check

M

Send the following telegram, subject to the terms
on back hereof, which are hereby agreed to

Denver, Colorado,
March 7, 1917.
J. B. MoDougalt,
Fedora]: Reserve Bank,
Chicago,

ConfidentiallyI am arriving Chicago two thirty Sunday

afternoon for brief stay. Can you dine with me Blackstone Hotel
Sunday night. Telegraph reply.
Benjamin Strong.

Chg. Benj. Strong,
4100 liontview Blvd.

11111116mm

Receiver's No.

Time Filed




ALL TELEGRAMS TAKEN BY THIS COMPANY ARE SUBJECT TO THE FOLLOWING TERMS:
To guard against mistakes or delays, the sender of a telegram should order it REPEATED, that is, telegraphed back to the originating office or comparison. FL
s,
ne-half the unrepeated telegram rate is charged in addition. Unless otherwise indicated on its face, THIS IS AN UNREPEATED TELEGRAM AND PAID FOR AS Sconsideration whereof it is agreed between the sender of the telegram and this Company as follows:
I. The Company shall not be liable for mistakes or delays in the transmission or delivery, or for non-delivery, of any UNREPEATED telegram, beyond the amount
.eeived for sending the same; nor for mistakes or delays in the transmission or delivery, or for non-delivery, of any REPEATED telegram, beyond fifty times the sum received
,r sending the same, unless specially valued; nor in any case for delays arising from unavoidable interruption in the working of its lines; nor for errors in cipher or obscure
legrams.
In any event the Company shall not be liable for damages for any mistakes or delays in the transmission or delivery, or for the non-delivery, of this telegram, whethe,
rused by the negligence of its servants or otherwise, beyond the suns of FIFTY DOLLARS, at which amount this telegram is hereby valued, unless a greater value is stated ../
riting hereon at the time the telegram is offered to the Company for transmission, and an additional sum paid or agreed to be paid based on such value equal to one-tent
ire per cent. thereof.
The Company is hereby made the mrent of the sender, without liability, to forward this telegram over the lines of any other Company when necessary to reach its
estination.
Telegrams will be delivered free within one-half mile of the Company's office in towns of 5,000 population or less, and within one mile of such office in other cities or
'wee. Heyond these limits the Company does not undertake to make delivery, but will, without liability, at the sender's request, as his agent and at his expense, endeavor to
mtract for him for such delivery at a reasonable price.
No responsibility attaches to this Compa,y concerning telegrams until the same are accepted at one Cif its transmitting offices; and if a telegram is sent to such office
y one of the Company's messengers, he acts for that purpose as the agent of the sender.
The Company will not be liable for damages or statutory penalties in any case where the claim is not presented in writing within sixty days after the telegram is
led with the Company for transmission.
1

,

Special terms governing the transmission of messages under the classes of messages enumerated below 'shall apply to messages in each of such respective classes in addition to all

:e foregoing terms.
No employee of the Company is authorised to vary the foregoing.

THE WESTERN UN ION TELEGRAPH COMPANY
INCORPORATED

NEWCOMB CARLTON, PRESIDENT

CLASSES OF SERVICE
'AST DAY MESSAGES
A full-rate expedited service.
I I GHT MESSAGES

Accepted up to 2.00 A.M. at reduced rates to be sent during the night
nd delivered not earlier than the morning of the ensuing business day.
)AY LETTERS

A deferred day service at rates lower than the standard day mes,ge rates as follows: One and one-half times the standard Night
,etter rate for the transmission of 50 words or less and one-fifth of
he initial rate for each additional 10 words or less.

SPECIAL TERMS APPLYING TO DAY LETTERS:

In further consideration of the reduced rate for this special "Day
aetter" service, the following special terms in addition to those enulerated above are hereby agreed to:
A. Day Letters may be forwarded by the Telegraph Company as a
er r ed service and the transmission and delivery of such Day Letters
t, in all respects, subordinate to the priority of transmission and
elivery of regular telegrams.
B. Day Letters shall be written in plain English.
Code language
; not permissible_

c. This Day Letter may be delivered by the Telegraph Company
y telephoning the same to the addressee, and such delivery shall be a

omplete discharge of the obligation of the Telegraph Company to
eliver.

This Day Letter is received subject to the express understandag and agreement that the Company does not undertake that a Day
D.

Letter shall be delivered on the day of its date absolutely and at all
events; but that the Company's obligation in this respect is subject
to the condition that there shall remain sufficient time for the transmission and delivery of such Day Letter on the day of its date during
regular office hours, subject to the priority of the transmission of regular telegrams under the conditions named above.

No employee of the Company is authorized to vary the foregoing.

NIGHT LETTERS
Accepted up to 2.00 A.M. for delivery on the morning of the ensuing
business day, at rates still lower than standard night message rates, as
follows: The standard day rate for 10 words shall be charged for the transmission of 50 words or less, and one-fifth of such standard day rate for 10
words_ shall be charged for each additional 10 words or less.
SPECIAL TERMS APPLYING TO NIGHT LETTERS:

In further consideration of the reduced rate for this special "Night
Letter" service, the following special terms in addition to those
enumerated above are hereby agreed to:

Night Letters may at the option of the Telegraph Company
be mailed at destination to the addressees, and the Company shall
be deemed to have discharged its obligation in such cases with respect

to delivery by mailing such Night Letters at destination, postage
prepaid.

Night Letters shall be written in plain English. Code language
is not permissible.
No employee the Company is authorized to vary the foregoing.
of

POSTAL TELEGRAPH

COMMERCIAL CABLES

CLARENCE H. MACKAY, PRESIDENT.

TELEGRAM

RF-c:EIVED AT MAIN OFFICE
NEST 4, CRAMMER BUILDING

920 17TH STREET

ENVER, COLO.

TLLEPHONE: MAIN 4500

DELIVERY NO.

The Postal Telegraph-Cable Company(Incorporated)transmits and delivers this message subject to the terms and conditions printed on the back of this blank.
160-29018

DESIGN PATENT Ns. 40529

1247?

159KST J 15
FX

CHICAGO MAR 7 17

TEL

1.

To__________

'BENJ STRONG
4100 MONTVIEW BLVD DENVER C OLO
TELEGRAM

RE CD I AM DELIGHTED TO RECEIVE AND TO ACCEPT YOUR

INVITATION F OR SUNDAY EVENING




J B.215DDLIJaiet-

POSTAL TELEGRAPH-COMMERCIAL CABLES

THE GREATEST TELEGRAPH AND CABLE SYSTEM IN THE WORLD.

EXTENDS OVER TWO-THIRDS OF THE WAY AROUND THE EARTH.

THE POSTAL TELEGRAPH-CABLE COMPANY

(INCORPORATED)

TRANSMITS AND DELIVERS THE WITHIN TELEGRAM SUBJECT TO THE FOLLOWING TERMS AND CONDITIONS:
To guard against mistakes or delays the sender of a telegram should order it REPEATED; that is, telegraphed back to the originating office for
,omparison. For this, one-half the unrepeated telegram rate is charged in addition. Unless otherwise indicated on its face, THIS IS AN UNREPEATED

TELEGRAM AND PAID FOR AS SUCH, in consideration whereof it is agreed between the sender of the telegram -and this Company as follows:
I. The Company shall not be liable for mistakes or delays in the transmission or delivery, or for non-delivery, of any UNREPEATED telegram, beyond the
amount received for sending the same; nor for mistakes or delays in the transmission or delivery, or for non-delivery, of any REPEATED telegram, beyond
fifty times the sum received for sending the same, UNLESS SPECIALLY VALUED; nor in any case for delays arising from unavoidable interruption hi the
working of its lines; NOR FOR ERRORS IN CIPHER OR OBSCURE TELEGRAMS.
2. In any event the COmpany shall not be liable for damages for any mistakes or delays in the transmission or delivery, 'or for the non-delivery of this
telegram, whether caused by the negligence of its servants or otherwise, beyond fifty times the REPEATED telegram rate, at Which amount this telegram, if
sent as a REPEATED telegram, is hereby valued, unless a greater value is stated in writing hereon at the time the telegram is offered to the Company for

ansmission, and an additional sum paid or agreed to be paid based on such value equal to one-tenth of one per cent, thereof.
a.

The Company is hereby made the agent of the sender, without liability, to forward this telegram over the lines of any other Company when necessary

:o reach its destination.
4.
lessages will be delivered free within the established free delivery limits of the terminal office. For delivery at a greater distance a special charge will be
nad )cover the cost of such delivery.
6. ., 4 responsibility regarding messages attaches to thietompany until the same are presented and: accepted at one of its transmitting offices; and if any
nesia-ge is sent to such office by one of this Company's messengers, he acts as the agent of the'seildeffdr,the purpose of delivering the message and any notice or
nstructions regarding it to the Company's agent in its said office.
The Company shall not be liable for damages or statutory penalties in any case where the claim is not presented in writing Within sixty days after the
:elegram is filed with the Company for transmission.
The above terms and conditions shall be binding upon the receiver as well as the sender of this telegram.
S. NO ,'MPLOYEE OF THIS COMPANY IS AUTHORIZED TO VARY THE FOREGOING,

.

CLARENCE H. MACKAY, PRESIDENT.
CHAR'L

IC. ADAMS,
VICE-PRESIDENT.

EDWARD REYNOLDS, VICE-PREST. AND GENERAL MANAGER.

CHARLES P. BRUCH,
VICE-PRESIDENT.

THE FASTEST TELEGRAPH SERVICE IN THE WORLD



OPERATOR'S NOTATIONS,

TIME SENT, ETC,




FEDERAL RESERVE BANK OF CH ICAGO

MAR 15 1917

Chicago, Illinois,
March 13, 1917.

Dear Mr. Strong:

Thile I was very sorry not to
see you, at least for a moment, before
your departure today, Mr. Aiken fully explained matters.
I know that it is unnecessary for
me to again assure you of the pleasure your
visit gave us here in Chicago, and I earnestly hope that you may have a safe journey
back to Denver, and that there may be nothing
but good results ensuing from your little excursion.
I wish you could be with us in New
York next Monday.
1.7ith best wishes, believe me

Sincerely and truly,
K.

Mr. Benj. Strong,
4100 Mentview Blvd.
Denver, Colorado.




Denver, Colorado,
March 16, 1917.

Dear Mr. McDougal:

It gave me the greatest possible pleasure t

ave a visit with
had to leave so

you and Aiken and Matiay and my only

soon and on such short notice.

S

the Tuesday morning train and

back in their company than

I got back in good shape aft

or friends we

turning on

was more orudent to come
uesday.

very comfortable trip and now

I am looking forward

another visit if, as I hone,

I can arrange a me

e of the men from the 1;ew

York bank later o
Best wi hes,

ithfully yours,

J. B.

"ugal, Esq.,

Federal .

Chicago, 11

BS/CC




Denver, Colorado,
March 16, 1917.

Dear Mr. 1.2122,24,11.1.4--

Thank you for your unfailiag th
card to the Chicago Club.
in Chicago being so short.

I had no opportunity to

It

evening, but having opport
by

taking the ten o'clock tra

and hence missed my op
Best regards,

Robert
-2edera

Chica o

1
Esq.,
eserve Bank,
ill.

ending me a

my

stay

ectation to leave Tuesday
to Denver mith friends
a day earlier than expected
you.




FEDERAL RESERVE BANK OF CHICAGO
79 WEST MON ROE STREET
DIRECTORS

OFFICERS

W.F. MS LALLEN

W.A. H EATH
JAM ES B. IN_OOUGAL GOVERNOR
C. R. MSKAY DEPUTY GOVERNOR

W.F. MC LALLEN SECRETARY

B.G. M,CLOUD CASHIER
5. B. CRAM ER ASST. CASHIER

DEPUTY FEDERAL RESERVE AGENT

crimiremANANDFEDERALRESERVEAGENT

J.W. BLODGETT GRAND RAPIDS. m rCH.
J. B. FORGAN CHICAGO. ILL! NOIS
M.B. HUTCH I SO N OTTUMWA.10WA

E.L. JOH NSON WATERLOO, IOWA
E.T. MEREDITH DES MOINES. IOWA
G.M. REYNOLDS CHICAGO.ILLINOIS

A. H.VOGE L M 1 LWAUKEE.WIECONSiN

March 21, 1917.

Dear Mr. Strong:

Your personal of the sixteenth instant is received
this morning upon my return from New York. I am glad. to know
little exthat your return trip was a comfortable one and
1/
cursion was not followed by any bad effects.

:Mi

I note with much interest the possibility of your
returning to Chicago later on fortthe purpose of meeting some
of the men from your bank, and wish you would bear in mind
our readiness at all times to make any preliminary arrangements at the hotel or elsewhere which will be necessary for
your comfort.
The meeting of the Federal Reserve/Exchange Committee
was held in New York on Monday. Aiken, Rhoads, Seay and Fancher
were there. We had quite an interesting meeting and a long discussion, and finally reaffirmed, with some minor modifications,
the original report and recommendations16f the Committee, with
the understanding that the matter will/be brought up for final
consideration at the Governors' Confeience, which has now been
set for April fourth. This date was/determined upon while we
were in New York. Governor Harding/Was present, and in view of
his request that a meeting be called for a date prior to the
convening of Congress, this date was set and I understand notices
were to be sent out by Mr. Curti..

7ith very best vas*, believe me
/7

//

Sincerely and truly,

IC.

Mr. Benj. Strong,
4100 Mbntview
Denver, Zolorado.
Our
Money rates here are firmer than they were one week ago.
local banks are having a strong demand from their best borrowers
minimum rate 41-10.

P. S.

. BANK

FEDERAL RESERVE BANK

OF CHICAGO

79 West Monroe Street.

April 10, 1917.

Mr. R. H. Treman, Deputy Governor,
Federal Reserve Bank of New York,
New fork, N. Y.
Dear Mr. Treman:

In reply to your inquiry of the seventh instant, I am pleased
to inform you that Mr. Arnold has been in charge of the Foreign Exchange
Department of the First National Bank of Chicago for a number of years.
I am confident that his employers have a high regard for his ability in
this field of banking.
He is about 46 years of age, and I understand
receives a salary of $10,000 per year.

We have here in Chicago another Foreign Exchange banker of unusual ability.
I refer to Mr. H. G. P. Deans, Vice President and Manager
of the Foreign Exchange Department of the Merchants Loan & Trust Company.
Mr. Deans, I would say, is about 40 years of age.
Both of the men referred to, in addition to having knowledge of
the Foreign Exchange business gained through years of experience, are well
informed with regard to international affairs.
I have no reason to believe, however, that either is desirous of making a change, my impression
being that they have progressed steadily and will continue to do so in
their present fields.
While your letter does not suggest my going so far as to mention
a second name, nevertheless I have done so in the belief that it.will meet
with your approval.
Very truly yours,
(Signed)

K.




James B. McDougal.
Governor.
4,

XWLTEc

UNION

Form 2289

WESThRN UNION

NIGH
TIME FILED

RECEIVER'S No.

the followinAnigicL ,

on back hereof whielia

Fade

TTER

BELVIDERE BROOKS, VICE-PRESIDENT

NEWCOMB CARLTON. PRESIDENT

GE W. E. ATKINS. VICE-PRESIDENT

Colorado,

April 26,
r:lenver, 1917.

gay° the terms

aileed-to
eservre Bank,

Chicago, Ill.

Will be at Blackstone Sunday morning.

Can you breakfast with

me about eight thirty. Bring Foroan if possible. Telegraph reply.
Benjamin Strong.

Chg. Benj. Strong,
4100 Montview.




ALL NIGHT LETTERS TAKEN BY THIS COMPANY ARE SUBJECT TO THE FaLLowt

TERMS,

in the morn
The Western Union Telegraph Company will receive not later than midnight NIGHT LETTERS, to be transmitted only for deli
the next ensuing business day, at rates still lower than its standard night telegram rates, as follows: The standard day rates for ten words
e charged
transmission of fifty words or less, and one-fifth of such standard day rate for ten words shall be charged for each additional ten words or
cc for comps,.
To guard against mistakes or delays, the sender of a night letter should order it REPEATED, that is, telegraphed back to the originating
For this, one-half the unrepeated night letter rate is charged in addition. Unless otherwise indicated on its face, THIS IS AN UNREPEATELiNIGHT
AND PAID FOR AS SUCH, in consideration whereof it is agreed between the sender of the night letter and this Company as follows:
The Company shall not be liable for mistakes or delays in the transmission or delivery, or for non-delivery, Of any UNREPEATED night leiter, beyond
ission
the amount received for sending the,same; nor for mistakes or delays in the transmission or delivery, or for non-delivery, of any REPEATED night letter, beyond
fifty times the sum received for 'Sending the same, unless specially valued; nor in any ease for delays arising from uuavoidable interruption in the working of its lines:
nor for errors in obscure night letters.
In any event the Company shall not be liable for damages for any mistakes or delay in the transmission or delivery, or for the non-delivery, of this nir

letter, whether caused by the negligence of its servants or otherwise, beyond the sum of FIFTY DOLLARS, at Nrhieh armunt this night letter is hereby visit.
unless a greater value is stated in writing hereon at the time the night letter is offered to the Company for transmission, md an aticiitionca aura -paid Or agreed to be
paid based on such value equal to one-tenth of one per cent. thereof.
The Company is hereby made the agent of the sender, without liability, to forward this night letter over the lines of any other Company when necessary
to reach its d,stination.
Ni,,ht. letters will he delivered free within one-half Mlle of the Company's office in towns of 5.000 pMmlation sr less, and within one mile of such office
in othrr cif l. r towns. Beyond these limits the Company does not undertake to make delivery, but still, witimut liability, at die sender's request, as his agent
and at
ex,emse, endeavor to contract for bins for such delivery at a reasonable price.
:-sponsihility attaches to this Cempany concerning niOst letters until the same are accepted at one of its transmitting offices, and if a night letter is
br one if the Company's inessengers, he acts for that purpose Its the agent of the settler.
sent
,r1 pan y will not be liable for damages or statutory penalties in any ease where the claim is not presented in writiag within sixty days after the 'night
kite:'
; i.e Company for transmission.
.,asideration of the redueed rate for this special " NIGHT LETTER" service, the following special terms are hereby agreed to:
LETTERS may at the option of the Telegraph Company be mailed at destination to the addressees, an,1 the Company shall be deemed to
olsligation in such cases with respect to delivery by, mailing surds NIGHT LETTERS at destination, postage prepaid.
has' ,
-,:f.:: .
Vi.:-ST LETTERS-shall be written in plain English. -Code language is nut permissible.
'

'

Y., ,,,,Myee of the Company is authorized to vary -the foregoing.

THE WE

INCORPORATED

NEWCOMB CARLTON, PRESIDENT

CLASSES- OF SERVICE TELEGRAMS
A full-rate expedited service.
NIGHT TELEGRAMS
Accepted up to 2.00 A.M. at reduced rates to be sent during the

night, and delivered not earlier than the morning of the next ensuing
business day.

DAY LETTERS
A deferred day service at rates lower than the standard telegram
rate, its f01107,'S: One and one-half tittles the standard night letter
roth" for the transm issjon of 50 words or less and one-fifth of the
initial rate for each additional 10 words dr less. Subordinate
to the priority of transmission and delivery of regular telegrams.
Must be written in plain English. Code language not permissible.




Telephonic delivery permissible. Day Letters received subject to
express umlerstanding that the Company Only undertakes delivery of
the same on the day of their date subject to conditions that sufficient
time remains for such transmission and delivery during regular office
hours, subject to priority of the transmission of regular telegrams.
N IGH-T' LETTERS
Accepted up to midnight for delivery on the morning of the next

ensuing business day, at rates still lower than standard night telegram rates, as follows: The standard day rate for 10 words shall he
charged for the transmission of !i0 words or less, and one-fifth of such
Standard day rate for 10 wor, is-shall he charged for each addition:11
10 words or less. Most be written in plain English. Code language
not permissible. Mail delivery, postage prepaid, permissible.

-

POSTAL TELEGRAPH - COMMERCIAL CABLES
CLAF1ENcL FI. MACKAY

P,S,.ENT

TELEGRAM

riAt..tivc.IJ Al MAIN OFFICE
NNNNNN L CRAWLER UILDIN
920 17114 STREET

'NVER, COLO-

TC,.140N1 : MAIN 4000

The PostalTelegraoh Cable Ccmr,7)(1,-.-oorated)transrurs and delivers this message subject to tle terms arvi

IV -10690

FX CHICAGO AFk 27

',IiJLk

P4W
:ri:(If/
/o

17

4100 MONTVIEW BL'/fl

Mk F0kGAN REGkETS EXCEEDINGLY THAT

HIS PHYSICIAL CONDITION wILL NOT

PahMa HIM To T11- LikEAKFAST WITH YOU SUNDAY MOmNING BUT
HAPPY TO DO SO




DnfIt'd

DLS4GA PITENT Ii406211

I45CH 0 27 830A

BENJ STkONG

/

DELIVCRY NO.

j

8 MCDOUGAL

I

SHALL bE

hi

fil




POSTAL TELEGRAPH-COMMERCIAL CABLES
Cial

,_,_-..-/-111

`At7.51b4fti.0."...1.1*-,

_.. --r.

AZORES

mjapalaNri341 ' "
4.....W
BEFIN.J.
I
ATLANTIC

OCEAN

HONOLULU

at

tr- 41

VrI.C6N

GUAM
PANAMA

SOUTH

AMERICA

THE GREATEST TELEGRAPH AND GABLE SYSTEM IN THE WORLD.

EXTENDS OVER TWO-THIRDS OF THE WAY AROUND THE EARTH.

THE POSTAL TELEGRAPH-CABLE COMPANY (INCORPORATED)
TRANSMITS AND DELIVERS THE WITHIN TELEGRAM SUBJECT TO THE-FOLLOWING TERMS AND CONDITIONS:
To guard against mistakes or delays, the sender of a telegram should order it REPEATED; that is, telegraphed back to the originating office for
comparison. For this, one-half the tinrepeated telegram rate is charged in addition. Unlessotherwise indicated on its face, THIS IS AN UNREFEATED

TELEGRAM AND PAID FOR AS SUCH, in consideration whereof it is agreed between the sender of the telegram and this Company as follows:
The Company shall not be liable for mistakes or delays in the transmission or delivery, or for non-delivery, of any TJNREPEATED telegram, beyond the
amount received for sending the same, nor for mistakes or delays in the transmission or delivery, or for non-delivery, of any REPEATED telegram, beyond
fifty times the sum received for sending the same, UNLESS SPECIALLY VALUED; nor in any case for delays arising from unavoidable interruption in the
working of its lines: NOR FOR ERRORS IN CIPHER OR OBSCURE TELEGRAMS.
In any event the Company shall not be liable for damages for any mistakes or delays in the transmission or delivery, or for the non-delivery of this
telegram, whether caused by the negligence of its servants or otherwise, beyond fifty times the REPEATED telegram rate, at which amount this telegram, if
sent as a REPEATED telegram, is hereby valued, unless a greater value is stated in writing hereon at the time the telegram is offered to the Company for

transmission, and an additional sum paid or agreed to be paid based on such value equal to one-tenth of one per cent. thereof.

I. The Company is hereby made the agent of the sender, without liability, to forward this telegram over the lines of any other Company when necessary
to reach its destination.
4. Messages will be delivered free within the established free delivery limits of the terminal office. For delivery at a greater distance a special charge will be
made to cover the cost of such delivery.
\responsibility regarding messages attaches to this Company until the same are presented and accepted at one of its transmitting offices; and if any
7
6.
messak., is sent to such office by one of this Company's messengers, he acts as the agent of the sender for the purpose of delivering the message and any notice or
instructions regarding it to the Company's agent in its said office.
The Company shall not be liable for damages or statutory penalties in any case where the claim is not presented in writing within sixty daysafter the
telegram is filed with the Company for transmission.
The above terms and conditions shall be binding upon the receiver as well as the sender of this telegram.
Ng IPLOYEE OF THIS COMPANY IS AUTHORIZED TO VARY THE FOREGOING.

CHARLES C. ADAMS,
VICE-PRESIDENT.

CLARENCE H. MACKAY, PRESIDENT.
EDWARD REYNOLDS, VICE-PREST. AND GENERAL MANAGER.

CHARLES R. BRUCH,
VICE-PRESIDENT.

THE FASTEST TELEGRAPH SERVICE IN THE WORLD

OPERATOR'S NOTATIONS,
TIME SENT, ETC.




POSTAL TELEGRAPH-COMMERCIAL CABLES
,,7
a
tp4-4-HAMA

111Wet

UFO...Di/vs

PACIFIC

J A PA N

OCEAN

et=44,A---

SAN FRAN

----

'Azoki.;11

Alt...14128

MIDWAY

ATLANTIC
OCEAN

HONOLULU

m vrtAcensr

GUAM
PANAMA

(

SOUTH

AMERICA

THE GREATEST TELEGRAPH AND CABLE SYSTEM IN THE WORLD.

EXTENDS OVER TWOTHIRDS OF THE WAY AROUND THE EARTH.

THE POSTAL TELEGRAPH-CABLE COMPANY (INCORPORATED)
TRANSMITS AND DELIVERS THE WITHIN TELEGRAM SUBJECT TO THE FOLLOWING TERMS AND CONDITIONS:
To guard against mistakes or delays, the sender of a telegram should order it REPEATED; that is, telegraphed back to the originating office for
comparison. For this, one-half the dnrepeated telegram rate is charged in addition. Unless-otherwise indicated on its face, THIS IS AN UNREPEATED

TELEGRAM AND PAID FOR AS SUCH, in consideration whereof it is agreed between the sender of the telegram and this Company as follows:
I. The Company shall not be liable for mistakes or delays in the transmission or delivery, or for non-delivery, of any UNREPEATED telegram, beyond the
amount received for sending the same; nor for mistakes or delays in the transmission or delivery, or for non-delivery, of any REPEATED telegram, beyond
fifty times the sum received for sending the same, UNLESS SPECIALLY VALUED; nor in any case for delays arising from unavoidable interruption in the
working of its lines; NOR FOR ERRORS IN CIPHER OR OBSCURE TELEGRAMS.
2. In any event the Company shall not be liable for damages for any mistakes or 'delays in the transmission or delivery, or for the non-delivery of this
telegram, whether caused by the negligence of its servants or otherwise, beyond fifty times the REPEATED telegram rate, at which amount this telegram, if
sent as a REPEATED telegram, is hereby valued, unless a greater value is stated in writing hereon at the time the telegram is offered to the Company for

transmission, and an additional sum paid or agreed to be paid based on such value equal to one-tenth of one per cent. thereof.

I. The Company is hereby made the agent of the sender, without liability, to forward this telegram over the lines of any other Company when necessary
to reach its destination.
4. Messages will be delivered free within the established free delivery limits of the terminal office. For delivery at a greater distance a special charge will be
made to cover the cost of such delivery.
7
'responsibility regarding messages attaches to this Company until the same are presented and accepted at one of its transmitting offices: and if any
messaj, is sent to such office by one of this Company's messengers, he acts as the agent of the Sender for thepurpose of delivering the message and any notice or
instructions regarding It to the Company's agent in its said office.
IL
The Company shall not be liable for damages or statutory penalties in any case where the claim is not presented in writing within sixty daysafter the
telegram is filed with the Company for transmission.
The above terms and conditions shall be binding upon the receiver as well as the sender of this telegram.
NC -IPLOYEE OF THIS COMPANY IS AUTHORIZED TO VARY THE FOREGOING.

CHARLES C. ADAMS.
VICE-PRESIDENT,

CLARENCE H. MACKAY, PRESIDENT.
EDWARD REYNOLDS, VICE-PREST. AND GENERAL MANAGER.

CHARLES P. BRUCH.
VICE-PRESIDENT.

THE FASTEST TELEGRAPH SERVICE IN THE WORLD

OPERATOR'S NOTATIONS

TIME SENT, Ere.

FEDERAL RESERVE BANK
OF CHICAGO

40

CONFIRMATION OF TELEGRAM

tELOW IS A FACSIMILE COPY OF TELEGRAM SENT YOU TODAY,

14'1

( THISVOPY TO
k

\oe-

4*.

Chloa,p, Illinois, April 27, 1917.
3enj. Strong,

4100 Lentview Blvd.,
Denver, Colorado.

A. Forgan regrets e;toeniingly that his physical condition will not licrmit
him to take breakfast with:you Sunday morning but I shall be happy to do eo
J. B. gOLCUGAL

Prepay and charge
?adorn' Leserve 3ank of Chicago

POSTAL

http://fraser.stlouisfed.org/
MISC. 3CC 2M SETS 1.9.16 2014
Federal Reserve Bank of St. Louis

BE

A LED

Form 1206
CLASS OF SERVICE DESIRED
Fast Day Messago

'ay Letter

WESTE
UNION
TEL 7- AM
105TERNUNION

.,:ght Message

Night Letter
X.
Patrons should mark an X opposite thy class of service desired;
f
.WISE THE TELEGRAM
. BE TRANSMITTED AS A
FAST DAY MESSAGE.
'

Receiver's No.

Check

Time Filed

NEWCOMB CARLTON, PRESIDENT
GEORGE W. E. ATKINS, VICE-PRESIDENT
BELVIDERE BROOKS. VICE-PRESIDENT

Send the following telegram, subject to the terms
on back hereof, which are hereby agreed to

Denver, Colorado,
May 24, 1917.

J. B. McDondal,

FederalRnerve Bank,

Chicago, In.

Will see you Tuesday morning for short visit before taking

twelve forty train.
Benjamin Strong.

Chg. Benj. Strong,
4100 Montview,




1

ALL TELEGRAMS TAKEN BY THIS COMPANY ARE SUBJECT TO THE FOLLOWING TERMS:
this,
To guard against mistakes or delays, the sender of a telegram should order it REPEATED, that is, telegraphed back to the originating office for comparison,
'H.
ane-half the unrepeated telegram rate is charged in addition. Unless otherwise indicated on its face, THIS IS AN UNREPEATED TELEGRAM AND PAID FOR P
n consideration whereof it is agreed between the sender of the telegram and this Company as follows:
amount
The Company shall not be liable f or mistakes or delays in the transmission or delivery, or for non-delivery, of any UNREPEATED telegram, beyond the
received for sending the same; nor for mistakes or delays in the transmission or delivery, or for non-delivery, of any REPEATED telegram, beyond fifty times the sum received
or sending the same, unless specially valued; nor in any case for delays arising from unavoidable interruption in the working of its lines; nor for errors in cipher or obscure
'elegrams.
In any event the Company shall not be liable for damages for any mistakes Or delays in the transmission or delivery, or for the non-delivery, of this telegram w' ether
I in
2aused by the negligence of its servants or otherwise, beyond the sum of FIFTY DOLLARS, at which amount this telegram is hereby valued, unless a greater value is
writing hereon at the time the telegram is offered to the Company for transmission, and an additional sum paid or agreed to be paid based on such value equal to one-, n of
ane per cent. thereof.
The Company is hereby made the agent of the sender, without liability, to forward this telegram over the lines of any other Company when necessary to react_ its
lestination.
Telegrams will be delivered free within one-half mile of the Company's office in towns of 5,000 population or less, and within one mile of such office in other cities or
towns. Beyond these limits the Company does not undertake to make delivery, but will, without liability, at the sender's request, as his agent and at his expense, endeavor to
mntract for him for such delivery at a reasonable price.
No responsibility attaches to tins Company concerning telegrams until the same are accepted at one of its transmitting offices; and if a telegram is sent to such office
ay ohe of the Company's messengers, he acts for that purpose as the agent of the sender.
The Company will not be liable for damages or statutory penalties in any case where the claim is not presented in writing within sixty days after the telegram is
lied with the Company for transmission.
Special terms governing the transmission of messages under the classes of messages enumerated below shall apply to messages in each of such respective classes in addition to all
he foregoing terms.
No employee of the Company is authorized to vary the foregoing.

THE WESTERN UNION TELEGRAPH COMPANY
INCORPORATED

NEWCOMB CARLTON, PRESIDENT

CLASSES OF SERVICE
FAST DAY MESSAGES
A full-rate expedited service.
NIGHT MESSAGES

Accepted up to 2.00 A.m. at reduced rates to be sent during the night
and delivered not earlier than the morning of the ensuing business day.
DAY LETTERS

A deferred day service at rates lower than the standard day mesige rates as follows: One and one-half times the standard Night
etter rate for the transmission of 50 words or less and one-fifth of
ne initial rate for each additional 10 words or less.

SPECIAL TERMS APPLYING TO DAY LETTERS:

In further consideration of the reduced rate for this special "Day
Letter" service, the following special terms in addition to those enu-

Letter shall be delivered on the day of its date absolutely and at all
events; but that the Company's obligation in this respect is subject
to the condition that there shall remain sufficient time for the transmission and delivery of such Day Letter on the day of its date during
regular office hours, subject to the priority of the transmission of regular telegrams under the conditions named above.

No employee of the Company is authorized to vary the foregoing.

NIGHT LETTERS
Accepted up to midnight for delivery on the morning of the next
ensuing business day, at rates still lower than standard night message
rates, as follows: The standard day rate for 10 words shall be charged
for the transmission of 50 words or less, and one-fifth of such standard
day rate for 10 words shall be charged for each additional 10 words or
less.

merated above are hereby agreed to:

Day Letters may be forwarded by the Telegraph Company as a
deferred service and the transmission and delivery of such Day Letters
is, in all respects, subordinate to the priority of transmission and
delivery of regular telegrams:

Day Letters shall be written in plain English. Code language

is not permissible,

c. This Day Letter may be delivered by the Telegraph Company
by telephoni g the same to the addressee, and such delivery shall be a
complete discharge of the obligatipn of the Telegraph Company to

deliver.

This Day Letter is received subject to the express understanding and agreement that the Company does not undertake that a Day
D.




SPECIAL TERMS APPLYING TO NIGHT LETTERS:

In further consideration of the reduced rate for this special "Night
Letter" service, the following special terms in addition to those

, enumerated above are hereby agreed to:

Night Letters may at the option of the Telegraph Company
be mailed at destination to the addressees, and the Company shall
be deemed to have discharged its obligation in such cases with respect

to delivery by mailing such Night Letters at destination, postage
prepaid.

Night Letters shall be written in plain English. Code language
is not permissible.
No employee of the Company is authorized to vary the foregoing.




June 6th, 1917.

'y dear Governor McDougal:

Your letter of the 4th introducing Mr. Evans
was handed me thie morning. Unfortunately, the morning was filled with a series of committee meetings
which mnde it impossible for me to see Mr. Evans, but
hope to have the plelsure of doing so to*morrow morn-

ing when he is to call at the bank.
Very truly yore,

8410,41DirwIlinTEsq.

:1110.4,446firal Reserve Bank,

'.,hicago, 111.

4

FEDERAL RESERVE BANK

THIS COPY TO
BE MAILED

CONFIRMATION OF TELEGRAM

OF CHICAGO

BELOW IS A FACSIMILE COPY OF TELEGRAM SENT YOU TODAY

fULJ

Chr,

a

1917

ts

ft

,r-etz..44 qt1

If,

D-op

tit

JUL 1 0 1917
,IPHICAGO0 JUNE Y. 2917.

Benlamin Strone,

Care Plaza Hotel,

-4

1;02..V.;,.

le.;"-v°." air

New York, N.Y.

sc 4 'AialtEVE DACI.

. 4.4111.111114.

Burlincton have sold all drawing rooms and compartmonts on five-thirty train
Londaj but have promised to put on another oar giving you drawing room on

our assurance you rill take that train.

....-10N,

\

JALS3 B. masgw4_.
._

PREPAY AND CHARGE TO THE
FEDERAL RESERVE II441. aw CHICAGO

POSTAL


Misc. 30IBM Sets 6-647-544


.

,s, \
-1311. 4

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Misc. 34

FEDERAL RESERVE BANK
OF NEW YORK

(FOR BINDER)

Sent by
X/HAB

1

-5:3 p. m.

W. U.

COPY OF TELEGRAM

Ally 7, 1917.
Jas. B. NoDonee', ,overn
Federal Reserve Bank of 44.24,24
,Thieago, Illinois.

Please resyrve for Ar. Btreng an Eonday not afternolu or eveninc train drawing
ruksa to Denver

una .Avise him st nags Rotel

New York

Mr. strong will arrivo

iu Oaiougo Ltonday nilie forty five a m.
Charge

Mr. Strong's account


http://fraser.stlouisfed.org/
8.4
Federal Reserve Bank of St. Louis

Federal Reserve Bank of New York

FEDERAL RESERVE BANK OFCHICAGO
December 31, 1917.

SS

CIVW15.11
9;1 114

Dear Governor Strong:
Please be assupid that your

good wishes for a Prosperous and Happy
New Year are most cordially reciprocate it1001,,,,01-Very truly yours,

K.

:;,:v-46t6tiibr .

Ir. Benj. strong, Governor,




'Vederal Heserve Bank of New York,

New York, N. Y.

PERSONAL AND ODNFIDENTIAL:

parch 6, 1919.

Ey dear Governor McDougal:

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 possibilities of a reform movement which might result in the establishment of a scientific
plan for a Federal budget.

The need for this has been made apparent to me during the

past to years and as a result of contact with the financial machinery in Washington.
Some of my friends believe the time is now opportune for a general attempt to interest the people of the country in national financial reform.

The campaign for savings, thrift and sensible spending, incident to the flotation of Government loans has put many of our people in a receptive mood for further suggestions in these matters.

The national debt must be reduced and can only

be reduced if both individuals and the Goveniment practice sensible spending.

It

is particularly true with the Government but cannot be made possible until scientific machinery is installed to accomplish it.

Students of this subject seem to be in general agreement that a scientific
budget system is the only solution.

To persuade our people that such a system should

be installed, a nonpartisan organization should be built up and a wise and sane campaign or publicity inaugurated.

It is a plan of that sort in which some of my friends

are interested with a view to activity after the next loan

is placed.

in the meantime,

steps must be taken to prepare the publicity, and the personnel of the organization
must be developed in advance.

It is, of course, out of the question to utilize the Liberty Loan organizations as such for an enterprise of this character.

It does not, however, seem ire-

proper for me to ask you if in your experience with the Liberty Loan, War Savings, or
other organizations in connection with the war, you have come in contact with individuals
in your district who would be likely to be interested in this movement and *ha would



Yarch 6, 1919.

#2.

be qualifiedfor service in such an organization and who would do so as a matter of

public duty. what is first needed is a representative in every
take charge of the movement anu

direct it in

the State.

State, competent to

He should have qualifications

to enable him to become a leader of the State movement, some ability as an organizer,

should be public spirited, able to grasp

the subject and 'swilling to study it, and

should be regarded locally as without politionl 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 verious counties and principal cities.

shall be greatly indebted to you if you can let me have suggestions and

names of men in your district for this work without, hover, mentioning the matter
to them.

You may know them well enough to make definite recommendations not only

because you came in contact arith them in Liberty Loan matters, but other public

spirited

activities with Which you are acepainted'or connected,
.1111s is a matter in which I have a strong personal

grateful Per your assistance.

interest and will

At our meeting in Washington on

be

the 20th I hope to

have an opportunity to refer to this matter more specifically.
Sincerely yours,

Governor.

James B. McDougal, Esq.',
Governor, Federal Reserve Bank of Chicago,
Chicago, Ill.

BE/NB




Seytaber 14, 1g21.
Dear Governor MoDougal:

Lou ,ill recall that about two years asu ee nad oe ma.res ondence in
regard to the work of the litAional Budget Comeattee.

in ,urt, ot lehst, phssage

of the budget legislation by the Congress was due to the work conducted by tht

cox-ittee.

ow that the bb6iE of the uo4tet syst* v. i.em oemn r_lopted b7 Congress,

our orgaciratio% ie endenvcric to crystalliyA uhi1csenti,-ent for the euort
of the pro6mr, of ::overnment economy and tnereby VI insure permanent eucosi,s for

the now nsAllnel budget syrtes.
6e :rr.: penkine to el-tend thie or by seiacting,

far te

banierF to nocept aoave, chairmanWcis !a VfiTiVJU of the .1-E imFortant citJecl

Eimply to carry on vcri which will be laid cut for them by the netional oomittee.
The scope of the mrk is deecribea in the encloael Irenorsnduri.

Gtn you angject rryrereatative re, rfert1y barvmri;, tho might be
1.rid Rapids,

willing to t,c.nept to0a epointi.eLitE L.Lbc,
Indianapolis and gilwauKee.

Ai. Lhe preent time I tiLtil o4ly avi p;t: to auest tit:17,4es, but later on
seibiy you would be williug to eow;unicato with theq.: dirsctly Lad further our
ohjeLt of having them accept these appoinW:nts.

If fur any reseon you think it unviee to Lake tho6c rugfeetione, will you

not write ae quite frankly .nd, if you are willing to do se, give me your reasons.
With best reyards, and thznking you very cordially, I am,
Yours very truly,
James B. McDougal,

Governor, Federal Reserve Bank of Chioazo,
C1iChig0, ill.
BS:KU

eno.




.

FEDERAL RESERVE BANK OF CHICAGO
79 WEST MONROE STREET

June 29, 1922.

Mr. Benj. Strong, Governor,
Federal Reserve Bank of New York,
New York, N. Y.
Dear Governor Strong:
frx
On receipt of your letter of June 21st, I promptly advised by wire that the subject discussed therein would be given
careful consideration, and that we would telegraph our decision
as soon as possible, and in accordance therewith, I have today
wired you as follows:

"Subject your letter twenty-first instant. After carefully considering the matter as presented in your letter and also other
attending circumstances, we are not inclined to concur in your
recommendations, at least for the.first half of the new fiscal
year. This decision is based on Understanding that funds are
now available probably for the entire fiscal year. Consequently,
there will be no occasion to go before Congress at this time."

While we were much impressed with the reasons advanced
in your letter for not accepting reimbursement, we felt that, in
view of the understanding that funds were available for the purpose and in consideration of the fact that the Under Secretary
of the Treasury had voluntarily offered to again reimburse us for
the fiscal agency expenses, we might properly accept the same for
the present. If, on the other hand, it had been necessary at this
time to ask for a special appropriation from Congress, we would
have fully.concurred in your views as to the inadvisability of
so doing.




Very truly yours,

Governor.




t
91)111"iofi'4

n[cErrill

C FEDERAL RESERVE BANK OF CHICAGO




230 SOUTH LA SALLE STREET

August 14, 1922.

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

Your letter of the 26th ultimo was before
me on my return to the bank today after several weeks'
absence.
I think it is important that we reach some
satisfactory decision with respect to the matter of expense involved, as well as safeguarding the uses to which
the national bank examiners' reports are put, and, consequently, am pleased to note that theComptroller anticipates
calling a meeting of representatives of some of the reserve
banks for this purpose.
Thanking you for your advice in the premises,
I am

Very truly yours,

Governor.

4




0

0

copy

FEDERAL RESERVE BANK OF CHICAGO

MEMORANDUM FOR
January 12, 1924.

Mr. McDougal
FROM

Mr. McKa

With regard to the Investment Committee's -program of purchasing
treasury certificates and notes for the special investment account of the
system, inasmuch as there is a strong demand for investments in these
-, securities by member banks and others, it does not seem to be advisable
to follow the market and continue these purchases, as this would mean
competition with member banks and further stimulate a market which
\direct
is already very strong.

0

,

Last summer and fall the market for these securities was very
soft and dealers were carrying large portfolios, and in many cases they
suffered a loss.
If the Federal Reserve Banks had bought at that time
it would have helped stabilize the market and we would now be in a
position to sell to the market, at mkime when the market is short of
Purchases under the present condition of the market
securities.
1
therefore defeat the very object we are trying to attain,
that is
to be able to supply the market with securities when money is cheap.
There
Iwould may be some reaction to the market later on when the usual spring
demand for money occurs and possibly at that time we could then enter
It certainly does not seem wise
the market and increase our holdings.
to increase them at present.
1

ti

r

With regard to the market for bankers acceptances, the dealers
yesterday reduced their bid rates from 4 1/4% to 4 1/8% for 90's. There
is a good demand for bills from member banks and others in the open
This gives us a splendid
market and they are moving freely at 4%.
opportunity to get greater distribution of bills as new buyers are
coming into the market.
If the buying rates of the Federal Reserve
Banks are not reduced below 4% for 30'5 and 4 1/8% for 90's, member
banks will have an opportunity of laying up a supply of bills, which
they can use to good advantage when the usual spring demand for money
occurs, by turning them into the Federal Reserve Banks at thikttime.
I feel that the attitude of the Federal Reserve Banks should be the
same towards the bill market as the short term government security
market.
When there is a demand for either class of investments,
we should stay out of the market and encourage our member banks to
buy, going back into the market again when conditions are reversed.




KAI '

With regard to the plan of allotment to the participating Federal
reserve banks, of bills purchased for the 3ystem; this plan seems to be satisfactory, with the exception that special allotments under present conditions
(when some of the Federal reserve banks earnings are now less than their expenses and dividends) should not be made to any individual Federal reserve
bank, as an illustration, special orders have been executed, in the amounts
of ten million dollars at times for the Federal Reserve Bank of Cleveland, and
in amounts of five million dollars on occasions, for the Federal Reserve Bank
of Dallas.

1(''

With regard to the purchases for the Dallas bank, it would appear
that the amount of 448,000,000 of bills purchased in the open market, shown
by its statement of January 9, 1924, is much too large a portion of the holdings of the system. The Dallas bank has been a continuous purchaser of large
amounts of bills for a long time. If the system is to be a unit in the policy
of getting distribution of bills in the open market at the present time, the
Dallas bank should join in this police.
The strong turn towards easier money rates also gives the Federal
,reserve banks an excellent opportunity to keep their rates equal to or
above the rates for commercial paper. It is the first time since we entered
the war in 1917, that our rediscount rates have been on a level with comercial paper rates for money. It is highly important that the Federal reserve
e\
banks continue to maintain this position and that if an increase in the rates
for commercial paper should occur, the Federal reserve banks Should increase
their rates accordingly. It would be well for, the system if the redisCount
rates were a quarter to one-half percent. hie-her than the rates for commercial
paper.

If the present condition of the money market should continue throughe
( out the year, it ma be difficult for the Federal reserve bank to earn their
expenses and dividends. I think it is essential that they should earn enough
to pay their expenses and dividends, and that much criticism would result if
they did not - that surplus accounts should not be drawn upon to pay diviaends
to member banks, and that if dividends are not earned and paid to member banks,
there will be much dissatisfaction, especially on the part of the small member
banks.
'

/

Mel suggestion would be that for the purpose of earning expenses and dividends, such federal reserve banks as are in need of investments for this purpose, could invest an amount not exceeding their capital and surplus, possibly
in Treasury notes of longer maturities. such purchases, however, to be made
irednly when it would not result in stimulating the market, and that this ameuet
could be carried continuously az a back log in order to insure at least a
considerable amount of earnings as against expenses and dividends. In addition to
this it might be advisable to purchase Third Liberty Loan bonds, which mature iq
less than five years - these bonds to be turred over from time to tine td the
Treasury Department, provided such an arrangement could be made with the
4
Treasury; the idea being that if the probable requirements of the sinking fund
operations of the Treasury could be known in advance, these bonds: could be
picked up whenever the market is favorable for theii purchase, and should result in cheaper buyine; for the Treasury, as well as avoiding fluctuations in




-

-3
the price and giving the Federal reserve banks additional earnings while they
carried the bonds as an investment, pending the time when they would naturally
be turned over to the Treasury Department.




(Jigned)

C. P. noKay.

copy

FEDERAL RESERVE BANK OF CHICAGO

January 15, 1924.

Mr. J. H. Case, Deputy Governor,
Federal Reserve Bank of New York,
New York City, New York.
Dear Mr. Case:

I am sending herewith for your perusal and for
submission to Governor Strong a memorandum, prepared by Mr.
McKay, expressing his convictions with respect to several
features of our open market activities.
The views as expressed are the result of deliberate
and very careful consideration of the subject.
I consider
them sound and worthy of consideration by the Investment
Market Committee, and am submitting them to you in the hope
that we may have an expression of your own views in relation
to the points involved, and furthrmore that the same be
submitted to Governor Strong for consideration.
Very truly yours,

(Signed) J. B. McDougal

Governor

HS




CO '

AT/AL

,enunry 17, 19ee,

Dear Governor McDougal:
I am in receipt of your commueication of January 15, accompanied by a copy
of a eemerendue erepered by Ur.

cKey, which eas supelemeneed by the interesting talk

I had with you over the telephone this morning.

Wo really hed a most interestine meeting of the Oeen Werket Investment Coe-

mittee here on tonday, :a:wiry 14, and each of the members individually oxpressed his
regret at your inability to be present.

Al you eill see

ceedines (copy atteehed) there were also present at that.
and Miller of the Federel

by the mlnutee of our promeeting 'Aeuere. 'riesinger

Roearve Board, and keeere. iills end Curtise,

of the Cleveland

and Ooston banks, respectively.
The best reply I can &eke to ir.
for consideretien of It is to direct yo

.cKey's eemorendum and to yoer own request

to a careful reading of our proceedings.

I

think you will find from a perusal of the minetee thtt all' the eexbers of the committee

and of the Eoerd were in complete aereement

with the

principle

htated in 'eciey's eemorendum,

namely, that we should not follow the Covernment security aerkee don ead continue purchases at contineouely lower prices but ratter hold to the prices estebilehed on January
and take only such paper as ray be offered to us at these rates.
for the moment that we shall

add eery

This probably means

little to our levestment account.

As a wetter of

fact, our market 'iere is subject to rather rapid char:seta, and while on Uonday our buying

price leve was very much out of line with market conditions, the market shifted on Tuesday
(cell money going to 5%) to such an extent that wom were enabled to quietly pick up some

five or six millions in chort-term paper that wee offered to Us

at the prices fixed by the

committee on January 9.
In

referenee to Malay's comments regarding the change in rates for bankers ac-




2.

Governor McDougal.

1/17%24.

eeptanees, as you undoubtedly appreciate, the dealers lowered their bid rates from 1/5 to 1/4
(down to 41) on imnday.

This condition lasted only one day, butonder the pressure of

high money rates, on Teesday they put back their bids to the old rates.
I have noted with interest kcitayle commente ebout special allotmenta of bIlle to

other banks beyond the emount of their participations, and believe that this is a subject
which moy well eageee the Gttentiou of the members of the oomeittee at their next meeting.

So far es this bank is concerned, it has, as you know, been our policy frequently to supply
such orders from other bank* from our own portfolio*.

Pereonelly, I hope the coniect of

the peeiel Investment Account will be entirely divorced from the consideration of buying

for the purpose of payiag expenses and dividends, and I do not agree with Matey that it would

he a matter of criticism If one or more of the Federel reserve banes here and there failed
to cover the full amount of their expenses and dividends. ky belief is that if this ehoulu
occur now hnd then it would do more to educate the weneral public, both within and without

the System, to the fact that we ere not organised merely for profit bet rather for

a much

bigger end broader purpose.
Covernor Strong is apending the remainder of the month down at Palm each

and will undoubtedly stop over at tnehington en his return.

I shale be very Fled to send

him a copy of your letter and 'McKay', weborenden, so es to give hit an opportunity of

eixine n little businese with his golf.
am sorry thet Governor Young Is having such e serious time at certeln points

In his district, but as gratified to 'cern from you today that ehile there still are
several weak spots which aeed watching, you believe he has the situation pretty well in hand.

Governor Strong will be back here early in Februery and, I should imaeine, would be elad to
have a eeetiog of the committee shortly after his return. Insley event, I hope we will hew'

the pleasere of seeing you before long.
Cordially yours,

J. B. McDougal, tae.,
Iovernor, Federel Reserve Bank of Chicago,
11hiottoo, Ill.
JUG liA8




Tncs.

J. a. GABE,
Deputy Governor.

COPY

July 9, 1925.

McDougal
Chicago

Confirming telephone conversation we believe paper of parent company is

not eligible unless first the borrower's financial statement is accompanied by
separate financial statement of each affiliated company or unless second the state-

ment of the borrower itself clearly indicates that the note is both eligible and
desirable.

In case under consideration only statement we have been able to procure

does not purport to be separate statement of borrower but admittedly includes assets
of some ofits subsidiaries.

Under circumstances we believe it is clear that the

statement does not comply with either feature of Board's regulations.

If, however,

you have been able to procure a separate statement of the borrower exclusive of
assets and liabilities of any affiliated companies, and if such statement in your
judgment indicates both eligibility and desirability, we shall be glad to take

paper at least until we have received a copy of the separate statement which I hope
111

you will send us.

Regarding our method of handling this paper since May 1, we have

taken it from a number of banks in each case the first time offered with understanding that we would be provided with separate statement before second offer by same
bank.

Only one bank has offered second time and immediately withdrew it upon our

reminding them of original conversation.

We are sorry there has been any conflict

of opinion or procedure in this matter.




Harrison.

COPY

TELL'GRAM

212F D CHICAGO

428P JUL 9
HAT

ISON.

Telegram confirming your telephone conversation is roc, d and makes

perfectly clear your position. Company advises its that they have no objection
to furnishing us with the required statement and that they will proceed to do so
without delay.




on receipt of the same we will advise you and supply copy.
mCDOUGAL

532 PM

FORM 4646

msErs

n-l-n

1,1o.

FEDERAL RESERVE BANK OF CHICAGO

CONFIRMATION

TELEGRAM

OUTGOING

October 30, 1925.

Strong
New York
Ne will take good care of

with

Dr. Schacht on arrival and dur ng his stay in Chicago
expressed in

due consideration to his wishes a

and
s.

reserved double.

6ipgle room with s

until Sunday eveting.

ill communicate




lon at

If this is not sa

B1

our telegram.

Have

kstone available WedmOdw

ctory, please advise at once.

With your Buffalo branch in due time.
McDougal.

CON RVA ON

We




FEDERAL RESERVE BANK OF CHICAGO[?-230 SOUTH LA SALLE STREET

OFFICE OF THE GOVERNOR

October 7, 1927.

CONFIDENTIAL

Mr. Benj. Strong, Governor,
Federal Reserve Bank of New York,
New York, N. Y.
Dear Governor Strong:
I am greatly indebted -t,p you for your letter
of the 4th instant, accompanied by copi,es of letters which you
have recently exchanged with Mr. John'. Mitchell of Chicago, all
I a , of course, interested in
of which I have read carefully.
both yours and Mt. Mitchell's viewsjbrl the subject involved, and
want you to know that I highly app ciate the attention on your
part in permitting me to review t0 correspondence.

There has not 1en the slightest doubt in my mind
as to the views which you would' hold relating to the manner in which
the Chicago discount rate wasAteduced, but even so I was very glad
to see the reference thereto ontained in your letter to Mr. Mitchell.

Thanking y
personal regards, I am

for your letter and with warmest

Very truly yours,

Governor.

HS.




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