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FILING DIP'''. - APr 43 Ma FEDEliAL ESERVE BANK April 10, 1915. dear Mr. Van Zandt: Permit me to extend to you me:A hearty congratulations opon your .Fpi)ointment to the office of Governor of the Federal Reserve B:Ink of Dallas. e felt the loss of Governor ells when he tesignod, and now that it is our pleasure and privilege to welcome you into the service, we hope you will find the meetings of the Governors, which have heretofore been attended by Governor Te11a, as interesting and profitable as we have. ith cordial regyrds, and wishing you success, I beg to remain, Very truly yours, Governor. Hon. R. L. Van Zandt, Governor, Federal Reserve Bank, Dn11e, Texas. BS Jr/VOM-9 every possible G DRPIr FEDERAL RESERVE BANK OF DALLAS 5 April 13,1915. 1-tOr1AL RESERVE BANK My dear Mr. Strong: Your very kind letter af the tenth instant, extending congratulaTs to me upon ia having been elected Governor o this bank, is much appreciated, and is also accepted largely in the nature of a welcome the association of Governors. I am looking fOrward with a great deal of pleasure to thinext meeting, in order that I may have ahlopportunity of becoming personally acquaintecith you, about whom I have heard so many lomplimentary remarks. Being y ung in the ranks, I am somewhat impatient r the date of the next meeting to came around as, of course, it will be more profitable to e than to any of you, all of whom are by w "Old Timers." welcome, gain thanking you for your words of Ind with best personal regards, I am Yours very truly, Honorable Benj.Strong, Jr., Governor, Federal Reserve Bank, New 7ork, N. Y. RLVZ/MSK ,-; -4,- .../ r> . ,) s......., C... , .., , J,.. NVIA8 3N/Fia2351 JA513C39 CAJJAC 10 . o.i7X001 Pr-NSONAL. - 1 1W August 51st, 1915. dear Governor Van Zandt: You nay be sure that anything we can do for 'rs. Van7.andt, or that I can do personally, will be a great pleasure. I was out of tonn when your letter reached the office, so my secretary end,avored to get into communication with Mrs. VanZandt to make sure that she understood that I wou1d be very glad to attend to any matters in which I could be of service. I had a delightful visit with r. Tenison when de was in the city a day or two ago. He is much too good to lose and I hope by no possibility that you will >emit him to slip away from us. Very truly yours, R. L. Governo, .:ral Reserve Bank, D has, Tex;Is. BS Jr/Vall FEDERAL RESERVE BANK OF DALLA S: PICC. ID L. VAN ZAN DT GOVERN OR September 9, 1915. My dear Governor Strong: The original outline which I submitted to the Governors of Mr. Talley's plan for a system of clearings was not entirely clear to me, and, of course, could not be to one who had not had an opportunity to discuss the plan fully with Mr. Talley. Having that in mind I have taken his ideas and rearranged them in a form which will be much more readily understoodh and a copy of this revised outline is handed you herein, for your consideration before the next conference of Governors is held. In the meantime if you have any suggestions to offer in connection with this plan, I will appreciate it if you wdll submit them to me, in order that I may take them up with Mr. Talley and get his views in that connection. With personal regards, I am, Yours very truly, Mr. Benj. Strong, Jr., Governor, Federal Reserve Bank of Hew York, Hew York City, N. Y. FEDERAL RESERVE BANK OF DALLAS R. L. AN ZANDT. GOVERNOR J. W. HOOPES. VCE-GOyERNoR LYNN P. TALLEY. CAsHIER SAM R LAWDER. Ass, CASHIER December 6, 1916. Er. Benj. Strong, Jr., "The Hut", Eontview Boulevard, Denver, Colo. My dear L. Strong: As you will probably recall, we were so firmly convinced of the merits of the clearing principle as applied to collection of miscellaneous checks by a Federal Reserve 3ank for its member banks and for other Federal Reserve Banks that, about a year ago, we inaugurated what we term a RESERVE CITY CLEARING HOUSE. The operation of this RESERVE OL2Y CLEARING HOUSE was so satisfactory that it is still continued by us for the reserve city member banks in this district, and the experience which we gained in its operation was of imense benefit to us in the development of our District Clearing House, which is being used in this district instead of the deferred debit and credit collection department being operated by the other Federal Reserve Bunks. Thinking that you might be interested in the plan and the opinion of the participating members, I have had prepared the enclosed outline, with extracts from letters from the participating members, giving their opinion of same. Enclosed you will also find a list of the participating banks, which will serve as a key to the letters. If there is any further information which you desire relative to the operation of our AESERVE OM CLEARING HOUSE, I will be very glad, indeed, to furnish you with same. I trust that you are improving in health and that, before long, you will be back with us to preside at our conferences. With kindest personal regards, I am, Yours very truly, VZ -RS FORM M1SC L. 14 FEDERAL RESERVE BANK OF DALLAS OPERATIONS OF 2Hq ELSDRV: CITY jLEARING HOUS: Qi 2EFEDZIAL RER B.0.1T1: OF D6TI,A3 That the RESEINE CITY CLEARING HOUSE of the Federal Reserve Bank of Dallas has fulfilled the expectations of its author and is serving the commercial and banking interests of the Eleventh District more expeditiously and economically in the settlement of trade balances than could have been done under conditions existing before ts installation is, in the opinion of those most vitally interested, admittedly a matter of fact, as shown by the appended extracts fro:1 letters received from the ofZicers of the participating banks. In order that the experience gaindd in the Eleventh District through the operations of this department may be made known, a review of its development seems appropriate. During the month of November, 1915, the Cashier of the Federal Reserve Bank of Dallas, who for many years had been in daily touch with the unscientific and unsatisfactory methods employed in settling balances between the banks in the reserve cities of this district, offered to the reserve city member banks a plan for settling balances .irita each other daily through the Federal Reserve Bank which would not entail the float of ler& amounts in transit between these banks, nor the incidental expense, and which would m4e unnecessary the waste of time and energy by the officers of the banks. Following this proposal, on December 21, 1915, about- twenty -2-- representativepipf the banks met in Dallas ariplafter a4dtscussion of the merits of decided that, with slight modifications, it be given a thirty-day trial. The :trial period was subsequently extended theyplan., to Narch 1st, and the department thereafter became one of.thp.perma- nent facilities of the Federal. Reserve Bank. However, at the time that general clearing operations were undertaken between all member banks, on July 5, 1916. the RESERVE CITY CLEARING HOUSE was discontinued, be- cause it was thoucht that the general clearing plan would have the effect-of making :it Superfluous. Those banks which had.participated in the plan speedily made it known, however, by means of a post-card vote onthe question, that it was their desire that the RESERVE CITY CLEARING HOUSE be continued, and it was resumed on July lath. Under its Operations the advantages, are seven extended to twenty-, banks in the cities -of Dallas, Fort Worth, Galveston, HOUStOrl, San Antonia ani taco, only five banks in those cities not availing .themselves of itvbenefits. By mutual consent one other member, though nat located in a reserve city, has been added. The members of the RESERVE CITY CLEARING HOUSE continue to send the actual checks and drafts which they., receive on each other direct:th.the drawee banks for credit, and against these sendings, in 'round amounts, they draw in favor of the Federal Reserve Bank and forward it to that bank for their credit. in the RESERVE CITY-CLEARING; HOUSE, ?he aggregate amount of all drafts,Ssavgbled against each bank . -is debit4.41n a.clearing sheet and the ampuntAlf. their letters, whiah Igue matieT!iiplatjtems-Oh,optAer-lpembersi_Am orgaite4, leaving either a -3- debit or a credit balance to be settled by each bank, In this way the amount of float is reduced-materially by offsets, and at times certain banks, through cancellation of debits against credits, come out exactly even, and frequently banks settle hundreds of thousands of dollars with the actual transfer of a few thousand. The results of the clearings are telegraphed to the manager of the local clearing house in each city by Special code each day at 11:45 a.m., and the separate banks are notified by him. Settle- ments must be made on the same date that the clearings are effected and the or, in Federal SUMO Reserve Bank advised in specie/ code by telegraph, instances, by telephone, of the manner of settlement, not later than 3:00 p.m. Debit balances may be covered in any of the following ways: Debited to the reserve account of the debtor bank; Remittance by mail to any other Federal Reserve Bank, for the credit of the Federal Reserve Bank of Dallas, at the prevailing rate of exchange; Arrangement with any other bank to deposit funds with the Federal Reserve Bank for that purpose; and Remittance of currency by registered mail insured. In the event that the latter option is chosen, the cost of ship- ment is assessed ratably against the banks which forwarded the items causing the debit balance. In the absence of advice, debit balances in the RESERVE CITY CLEARING HOUSE are charged to the reserve account. Disposition of credit balances is subject to the instructions of the credit banks, and, in the absence of advice, they are credited to the -4- reserve accounts. Quite often the credit balances received by banks in one of the cities are traded to debtor banks in the same city, thereby making transfers or currency movements needless, and obviating the attendant expense. Participating banks may, if they prefer, send the items direct to each other, taking a carbon copy of the cash letter, which, when certified by an authorized officer or employe of the sending bank, May be sent to us and becomes, in effect, a draft against the bank to which the items were sent, the amcunt of which is creditee_ to the sending bank in the RESERVE CITY CLIIALING HOUSE. Since general clearing operations have become effective, the members of the RESERVE OWY CLEARING HOUSE have found this department a distinct benefit to them, in that it makes the drafts which their country correspondents draw on them eligible for immediate credit with the Federal Reserve Bank. Drafts of this character are, by ar- rangement with the drawee bank, stamped by the issuing bank, "Charge (drawee bank) in RESERVE CITY CLEARING HOUSE". This method of cover- tag items handled for deferred credit and sent to members not in reserve cities has been used extensively, as the following figures testify: Total July 5th Month of Month of Month of November to August 1st - - August September - October 1st to 25th, inc. -^ 14,; 985,772.74 4,436,643.67 9,825,467.47 12,051,242.65 9 855 469.16 37,150.795,a; Average Daily 49,283.63 164,668.4C, 392,938.6'.) 502,135.12 469,212.81 81,598,445.73 -5- Items handled under this arrangement must be listed on a separate letter and sent to the Federal Reserve Bank, and are cleared . against the drawee banks, with a resultant credit of the entire amount to the Federal Reserve Bank of Dallas, which participates in the clearings to that extent and receives acceptable funds in payment from the other participating banks. It may be interesting to note that, on the opening day, December 26, 1915, the total clearings were 0.,175,00O, with ensuing balances of only 484,OOO, showing offsets of .-,691,000, 'while on October 18, 1916, the total clearings were, in round figures, ensuing balances of only ;1,109,000, showing offsets of 05,691,000. The aggregate amount cleared through the RESERVE CITY CLEARING HOUSE from the opening day, December 26, 1915, to November 5 11ó, inclusive, was, roundly, :;466,000,000, which was settled with balances of only 1.41,000,000. The settlement of these balances entailed only the shipment of currency in the aggregate of 06,300,000. The bookkeeping method employed is simple, and each account is closed at the end of the day's business. Drafts cleared against the banks are stamped, "Cleared through the RESERVE CITY CLEARING HOUSE (date)", snd become debits to an account with the bank on which drawn, termed,-"RESERVE CITY CLEARING HOUSE Account", and are credited to the bank from which received, the difference being settled in one of the ways indicated above. Statements are rendered each day and are accompanied by the drafts which have been cleared. An abstract of-the whole clearing operation is each day forwarded to all of the members of 7,000,000, -6- the RESERVE CITY CLEARING HOUSE, which shows the results of the clearings by banks, debits, credits and balances. It is, therefore, apparent from the foregoing that what was termed, at its inception, an experiment, has proven to be a permanent betterment. In response to inquiries addressed to each of the twentyeight banks which are members of the RESERVE CITY CLEARING HOUSE, replies were received from all except two, and are as follows: 1 "We have always been in favor of the Reserve City Clearing House system, as adopted by the Federal Reserve Bank, and the more we see of its operations the better we like it, as it enables the member banks to concentrate and dispose of their funds in other reserve cities with maximum dispatch, minimum expense, and at a uniform rate. "As our balances with reserve banks in this district are purely of a reciprocal nature, the system which will accomplish the above results is, to our mind, of the greatest benefit, and should be maintained." 2 "17e have not made use of the facilities of the Reserve City' Clearing House, as we do not think our business is of large enough volume for us to join the Reserve City Clearing Hbuse plan. "From what I understand of it though, I think it would be an advantage to banks whose volume of clearings justifies them being a -7- member of the Reserve City Clearing House plan." 3 "That function performed by your bank fills a long felt want. "I have heard it said that this facility which you offer the Reserve City Banks benefits only the said Reserve City Banks, but, inasmuch as practically all the business between such banks in Texas is created by drafts of the country banks, it can be readily:observed that the system redounds to thg benefit, indirectly, of all the banks in Texas." 4 "Our clearing arrangements are such that up to the present time we have had very little occasion to use this system, except in the handling of items on "In this instance;--however, the establishment of this system has been of considerable benefit to us, in that we are enabled to items without the loss of three or four days handle-these time, as was originally the case, and we are very much gratified now at the prompt service that we obtain in this manner." 5 "116 are well pleased and delighted with the services rendered -by the Federal House. Reserve Bank in conducting the Reserve City Clearing We favor an .extension of the service to such cities in the dis- trict as Sherman, Texarkana, Beaumont, Austin, Abilene, Brownwood, Wichita Falls, -Amarillo, provided the member banks in said cities cai? be induced to-came.in. ' 468- Tle far this plan mainly because it has enabled us, withe::change, out any inconvenience, to cm.vert into cash or convenient ecess credit balances it has enabled us to our with our various correspondents, in othel words; get what we wanted -when we wanted it, something we aould not always do before the service was inaugurated. we 7e have many .other minor reasons for favoring the plan, and earnestly hope you will continue it.A 6 'q an very decidedly in favoi of the Reserve City Clearing House. "It enables me to transfer on the daily sendings the balances of this bank, based to the vaiious reserve city banks, in about thirty minutes time, whereas it formerly took from two hours to two weeks. rIn addition to the time saved, we effect a big saving in telegraph and telephone toll's and in interest on idle balances. all these considerations, however, I have a personal 731easure in -operation of the aeserve City Clearing House, in go home to my served. that it Above the enables me to fireside at night with my mental equilibrium fully con- Under.the. old rule this was dealing ,aith one or two tovins w.dich I utterly im3ossibla on account of sh,..,11 ITIhhgveh..4 a delight in writing one :takt 4: nu:, clinintp.send aim our business and telling 'InLJ POstiO4,:.for the- friends th.at today, de- we are now ta.A first time since I graced the banking business with - .My presence, to get our balances out of his town without bsg2;tag, plead- lug, cajoling or bribing. "You can put me down as a friend of the Reserve City Clearing House." 7 "We are very much pleased with the service you render through the Reserve City Clearing House, and would regret to see the serviCe discontinued, for the folooWing reasons: "It enables our country correspondents to get immediate Credit in their reserve account for their drafts on us and without the necessity of our making 'phone transfers. "It enables us to convert our and sendings into Northern or Eastern exchange on the following day, and eliminates the former method of forced settlements by 'phone each day with individual banks. "Briefly, these are some of the advantages that accrue to us from the operation of the Reserve City Clearing House, and, as stated above, we should regret its discontinuance." 8 "lie are satisfied with the workings and benefits derived from the Reserve City Clearing House. "It appears to us that we get quicker action on our items and the settlements therefor are more satisfactory than under our old arrange- ment, whereby we had to have numerous telephone calls and in some cases accept exchanges not desirable. "As far as this bank is concerned, a continuation of this Clearing House will be pleasing." -109 "The services rendered by you through the Reserve° City Clearing House have been perfectly satisfactory in every way and have filled a needed place in the settlement of business between the reserve banks of the Eleventh District. "MY reason for approving of your services in this connection is that it makes settlement of all business transactions between the several reserve banks at one place, either giving us a debit or credit in the settlement. Previous to the present arrangement, we found different views among the reserve banks in Texas regarding the value of exchanges, and in selling against balances with other reserve banks in Texas, according to our books, we very often found that the following day they had made substantial remittances to cover their debit, and we, without attempting to be so, became their debtor. had found it necessary, in order not to unconsciously We mistreat our re- serve city correspondents in Texas, to call them over 'phone to make settlements, which, considering the number of reserve banks in Texas and the number of our correspondents, was an added expense and also quite a good deal of trouble. "For the above reasons, I feel that the Reserve City Clearing House has been of great benefit to us and that your good office has given us splendid service in that department." 10 wt7e are exceedingly pleased with the workings of the Reserve City Clearing House. -11- "In the first place, through its workings we are able to settle our balances with our correspondents cities as easily as we settle our is, that it places us on an equal in other Texas reserve local clearings; and another reason footing with the Dallas banks, in that our interior correspondents may send you, for immediate credit in their reserve account, drafts on this bank. tates business by eliminating Briefly, it facili- time and expense. "Notwithstanding the fact that we have been a 'debit, bank almost daily since the ReServe City Clearing Rouse began operation, we should dislike to see it discontinued." 11 "We have found the Reserve City Clearing House gives us a most excellent service. Originally I was doubtful of its value per- sonally, but after its operation for a few months we are enthusiastic regarding the facilities it affords us. Primarily, it gives us the opportunity to clear up each day all slow balances, and since the District Clearing House plan was inaugurated, it also affords our corre- spondents the opportunity of replenishing the reserves by sending the Federal Reserve Bank direct drafts on this bank, which, through the special arrangement with you, are payable immediately in the Reserve City Clearings. "I have observed, also, that it causes us to carry a some- what larger balance in our reserve account otherwise, in order to anticipate payments, than would be necessary and we have been wonderfeag if this has not been of some benefit to the Federal Reserve Bank, pre- -12- vided, of course, that other reserve city banks are likewise incline& to keep their balances in excess of actual reserve requirements. believe it Wves nro the fairest opportunity that could be offered to re- serve city 'bank::: outs:de of the city of Dallas to maintain their former connect ions without incom,enience to the interior member banks.. 1rUe hLpe that no one is dissatisfied with the arrangement,, and trust that tie Federal Reserve Bank does not contemplate its discontinuance." 12 "We are very well pleased with the service rendered by yourselves in the conducting of the Reserve City Clearing House." 15 No reply. 14 "We have no hesitancy in saying that we are pleased with the service and Would regret very much to see it discontinued. We have found it a most direct and satisfactory method of clearing :Items drawn on reserve city banks in this district, and if there are any disadvafttages connected with the plan we have not observed. thou. "Not only do we approve of the plan, but we take pleasure in you in connection therewith hi' saying that the service rendered by been 11.1 that could be desired. 15 "We are very much pleosed with the servxces rendered by bank in conducting that deDartment, and sincere tlult, that it will be your desire to continue same. "Cur maim rcason for being in favor of it is that it helps -lear at 2ne the plincil'al cities of Texas, thus enabling all reserve city and larger ba-,aks to get quick action on our daily sendings." 16 aWe are very much pleased with "Firzt: It concentrates all the result3 az obtained: reserve city balances with onlg one day's delay, giving us available funds against which De can obtain immediate action, 4 "Second: been It does away with details which subjected by reason of having to deal we have hcretofcre with some ten or twelve banks daily. "In the opinion of the writer, it was indeed a happy thought that created this facility for the reserve city banks of this city. While there might be a slight objection at this time by some, the per cent, is small, and we believe it is almost negligible. 17 "We are pleased with Reserve Bank in conducting the service rendered by tha Federal the Reserve City Clearing House. "While the Reserve City Clearing Rouse works a hardship o'L& us, for the reason stated below, still we believe it is a good thing, as,it enables the reserve city bonlcs to dispose of their State exchange at a minimum cost, whereby "The "1st. it might otherwise be a burden to thau. arguments that we could use z:gpinst it Cost of the telograph expense* are: -14u2nd. rIe believe it gives Dallas the control of the exchange rates for the district, "3rd. as all rates are arbitrarily fixed. Inasmuch as we are almost invariably a debit bank in the Reserve City Clearinzs, it sometimes places a burden on us on ac- count of having to settle the debit in the manner presciAbed by you," 18 "We are at the present time pleased with the operation of the Reserve City Clearing House, some of the advantages -which acc-mie there- under to the participating members being. "(1- savings of time effected by converting th,eugh this gedium rather than through the District Clearing House. The elimination of unnecessary correspondence, telegraphing and telephoning in order to effects the daily settlements with several correspondents, and the facility of bejng able to concentrate balances and adjust settlements with the principal cities of the State in one transaction. The operation of the Reserve City Clearing 1-1. use places those member banks in the Texas reserve cities outside uf I,alIas on practically the same basis as the Dallas banks, in so far ae enabling the interior correspondents to use their balances with us on the sat16 basis as those accumulated with their Dallas correspon'lents. "About the only criticism of the plan that occurs tc me at this time is the fact that it practically places the Federal Reserve Bank in a position to dictate the exchange rates of the State which, owing to local conditions, differ widely at sJme seasons of the yE../3. -15- although in this respect the burden is largely removed by reason of the nrivilege of shipping the currency at the expense of the other fel. 19 "The service we are receiving from the Reserve .city ()learing House represents a facility that eliminates a great deal of unnecessary work and expense through the transfer tween reserve cities. . of excess balances be- It causes a check on any other reserve city to be as acceptable in this city practically as a local draft. "Before the operation of the Reserve City Clearing House, at least an hour a day was required for telephoning and telegraphing and writing, in order to move balances to available points. This is en- tirely done away with, and we know at the close of the business day here, after receipt of your telegram, just how we stand everywhere. The offsetting of drafts drawn against our sendings by drafts drawn against the sendings bf other reserve city banks to Us eliminates a great amount of work, and the settlement of the difference is cert%/11:y a very easy process. I believe that the Reserve City Clearing House is indispensable, and I believe that the facility indirectly benefi'zs every bank in the State. "It has been customary with our best regulated banks to deduct outstanding time on miscellaneous items received for conversion frym the time the item was received until payment was made in local exchange. "If a bank at the payment point enclosed in payment, as many of them did, a draft on some other reserve city which presented diffi- -16- clilties in its ability to cover in convenient exchange, a further period of three to four days was necessarily added to the transit time. This is done away with7by the method which you have perfected, and the bonefits to all arc apparent at once. "The operation of the Reserve City Clearng House independently from the District Clearing House permits the drafts of correspondents of any reserve city bank in the district being immediately available upon receiot at Dallas either for transactions with the Federal R:se:'ve Bank, such as the Covering of District Clearing House debits, the shipment of currency, transfera:xe of balances, or similar conveniences, and is another actual benefit both from a labor saving standpoint, mobility of funds, and resulting in greater economy. "The feature inaugurated by you of prorating the expense of .currency shipments among the banks whose drafts necessitated shipping to cover is wise and proper, and prevents objections being raised by banks which run consistently debit in the Clearing House. "The balance sheet which you send every day gives concise, understandable figures of the position of each bank and each town after the day's clearing, and they have provell of marked usefulness to u,. "Vie are heartily-in favor of the continuance of the system as at present conducted, and believe that every Federal Re7,er,re 7an7,-. in the country would better serve their districts by the inauguration of a similar method." 20 "The service which we are getting out of the Reserve Cit,). Clearings at the present time is benefici;,1 to this bank, as we are able to concentrate our Te::as reserves with you and make one settlement 3overing all the balances. "It is true that we have at times, through circumstances, aar- ried considerably larger balances with you than required by law, in order to offset debits from day to day. "We have, further, not been favored with the discount on our purchases of eastern m.change that we were able to receive in former years. "As a whole, however, we are pleased with the service of the Reserve City Clearings, and would not like to see this service discontinued." 21 No reply. 22 "The service rendered under the Reserve City Clearing House plan has been quite satisfactory to us, and we have no special criticisms to make." 23 "Vie have no suggestion to make relative to service rendered by your brlik in conducting the Reserve city Clearing House. "Will say, however, that we really do not see the necessity of it, as the Federal Reserve District Clearing House seems to answer the purpose." 24 "We are very well pleased with the operation and benefits derive& from the Reserve City Clearing House, excepting that our mail from Dallas is almost invariably not received until the second day after clearing, and that by reason of this delay our reserve city accounts are showing excess debits and credits, as the case may be. "I am of the opinion that the Reserve City Clearing House is entirely practicable for the benefit of reserve city banks in the matter of their drawings as against each other for credits of their reserve account with the Federal Reserve Bank, and its continuation will be entirely agreeable to us." 25 "This bank is strongly in favor of continuing same, as we find it a very acceptable means of converting our exchange on other Texas reserve cities into available cash or New York funds, which, of course, are much more acceptable to us than to have our money lying around in other Texas cities." 26 "We are very well pleased with the services rendered, but we are not in for of the system. In fact, we only went into it rather than appear contrary." 27 "I have no objection nor criticism to raise as to the manner in which it is being handled by the Federal Reserve Bank of Dallas. plan Ly objection is that the does not operate to c--.11. 7.',Ivont?4;e here, the objection that I raise waa3.1 probalOy hay', no Tbearing LI_ other reserve cities. into the arrangement in orler to give T7e have gone the plan a thorough test and to show our disposition nDt to be contrary. but as it has been in operation some time and there appears to be no decided advantage in our favor, it occurs to we that it would be U961635 -Dr us to remain in the system. 28 "The service rendered by your bank in conducting this department is all that could be desired, and in fact before joining vie saw the advantages that were to be gained by being a member, ari:1 while we were riot a reserve city, through the kindness of the majority of the reserve city banks, they permitted us to become a member of the Reserve City Clearing House, and we find that it works to a very great advantage to us and we feel satisfied to every other member. One of the greatest benefits to be derived is that it places us in position where we can compete with the Tianks at Dallas by having drafts of our interior correspondents paid -iit.hout any deduction being made for the outstanding, and these or other Dallas banks. We do tion Of the Clearing House, available the same as if drawn on you funds aie Lot E1.14 know of anything against the opera- V.-ust that same will be continued."- igats -*. .10- 100,979.10 A/4ot mount Ant.WNW / * 302,f,15.2Zi 467, 310 .53 $111D.W1 1111114010.71 3,o38,6ao,82 1911,0411.63 ISI2 5,25d, 885 .02 2,t4s..17.5 .31 'Mae 3,1(1,411.* Novalbor ti 19.550 4,,:zoo,a04.40 2,ØX$? -3(4.01 2,4* 422.4G Abefriber 4 . 17.9i2 4, 743, 134 .34 757.31 4353 36/.03 MC, 314-12,009.bb - Sagardier 4 114.1,: f)o teber _ 361.2 113, /3 13,104,41r4.:4 462 uptitibir turiar iNaisaiesita.35 au,iabows.a4 mom 7Z, 33, ULM 3 OS AA) 34 141.06 318.111B ALJAAOMA_ 111#4 $404,940,01/in Zut trADINI guitcv isatcy,4 of a drrot flint INMin tea :n tc. And dillairrel or wv-ant Azepolvill6 211,914,311.0 4111,1k4,901 W7,613 1136,A1 -116111ALAt 41116,11/11,63n.45 $11111,11111,41444 amitouttos of th* oloarind debit smjoreat pita We realistic* of the mount of Aso vr 47,2%' . LETT.ERS FROM RESERVE CITY CLEARING HOUSE MEMBERS Number Bank Location 1 American Exchange National Bank Da:Llas, Texas 2 Central State Bank Da7las, Texas 3 City National Bank Da.das, Texas 4 First State Bank DaJlas, Texas 5 National an of Commerce Dalas, Texas 6 Security National Bank Dallas, Texas National Bank 7 8 Farmers & Mechanics National Bank Fort Worth, Texas 9 First National Bank Fort Worth. Texas 10 . American Fort Worth National Bank Fort Worth, Texas 11 Stockyards National Bank Fort Worth, Teac 12 City National Bank Galveston, Texas 13 First National Bank Galveston, 14 First National Bank Houston, Texas 15 Houston National Exchange Bank Houston, Texas 16 Lumbermans National Bank Houston, Texas 17 National Bank of Commerce Houston, Texas 18 South Texas Commercial National Bank Houston, Texas 19 Union National Houston, 20 Alamo National Bank San Antonio, Texas 21 City National Bank San Antonio, Texas 22 Frost National Bank san Antonio. Texas 23 National Bank of Commerce San Antonio, TeXas 24 State National Bank San Antonio, Texas, 25 Central Texas Exchange National Bank Waco, Texas 26 Citizens National Bank waco, Texas 27 First National Bank Waco, Texas Commercial National Bank Shreveport, La. 28 Bank Fort V:Orth, Texas Texas Texas December 9th, 1916. My dear Governor Van Zandt: It was very good of you to writ e and send me the description of the reserve city clea g system, which I want to take time to stud greeable to you send it on to the bank. ur way to Washing By this time yo' ton to attend the Govern° and I am grievously disappointed to miss another. The res airily doing me a lot of good and I h eet again before they get tired With ndest reagrd nd thanking you for your letter Sincerely yours, R. L. Va overnor, Dallas, Texas. 13S/VCM erve Bank, Denver, Colorado, January 26, 1917. Dear Governor Van Zandt: That bani< building certainly look,/fine, b fear you may shortly outgrow it and certainly hope so. This is, as you say, a dang a transient and coming from are trifling. Richard L. Van Z Governor, F8deral Dallas, Texa Bs/oc hborhood, but only dangers of this District FORM M1SCL. 14 FEDERAL RESERVE BANK OF DALLAS January 30, 1917. Hon. VI. P. G. Harding, Governor, Federal Reserve Board, Washington, D. C. Dear Sir: At the meeting in Washington l&st month the Governors adopted the following ',rota, "That it is the sense of the Conference that when conditions in a Federal Reserve District appear to necessitate the establishment of additional facilities in cities other than that in which the Federal Reserve Bank is located, such facilities should be provided through the means of Agencies, rather than through Branches, as contemplated by the Federal Reserve Act." The Committee appointed to submit this reconmendation to the Federal Reserve Board begs to report that the dimussion of the topic by the Governors brought out the following reasons on which the vote was based: The establishment of branches would involve large expense which, in the event several were necesnot quite prohibitive. sary, would be almost if The establishment of agencies would be much less expensive, the difference being sufficient to be of vital importance. The establishment of agencies would permit of more uniformity of operation, all being under the direction of the Federal Reserve Bank. The establishment of branches with their semi-independent operation would undoubtedly tend to arouse conflict in policy and rivalry between sections. -2- The estab)ishment of eD'encies would permit of the discontinuance of any agency or office which experience proved to be unnecessary or unprofitable, while there is no provision in the Federal eserve Act for the discontinuance of a branch once established, regardless of how unprofitable or unnecessary that branch may prove to be.. The establishment of agencies would permit of the expansion of any one or all of them into te.17,organized branches whenever experience demonstrated the expediency of such a course. Respectfully submitted, R. Z. VAN ZAI1DT, JOS, A. McCORD, JNO. U, CAIKTI1S, Committee. 1, FEDERAL B.ESMIVE BANE: OF DALLAS --COPY-February 9, 1917. Dear Mr. Traman: I beg to aci-mowledge receipt of your letter of the 3rd instant with enclosures as stated, and I am also in receipt of a copy of McKay's memorandum on the Seay plan. alqat reply prevents me from givYour request for a ing this abject the careful thought and study which I would like to give it before writing you, but a few suggestions have occurred to me as being appropriate at this time. There is much merit in the McKay memorandum, and First. with most of it I am in full accord. We can not avoid the physical settlement of some part of the net trade balances of the different sections of the country at some time, and the Federal Reserve Banks should find some way of reimbursing themselves far the cost of necessary shipments. As a solution of this question I believe the Federal Reserve Banks should make a nominal charge, of say five cents per thousand dollars, against the member bank's issuance of so-called Federal Reserve :axchange. This charge, which could be figured up and assessed monthly against each member bank, would create a fund probably sufficient to pay the transportation cost of the net balance which might have to be shipped. Second. The Gidney plan should be installed at the time of, or immediately after, the inauguration of the immediate availability plan, in order to obviate the necessity of shipping funds from one district to another or to Washington when it will be only a short time until a reversed shipment will be called for. The uniform drafts referred to should be obtainThird. able only from a Federal Reserve Bank, w:aich could obtain them in large quantities at a minimum cost, and whenever a member bank ap- plied for a supply, the Federal Reserve Bank would be put on notice that such bank intended to avail itself of the privilege of using them, and the necessary credit investigation of the member bank could be made. Fourth. The uniform draft should be in such form that an advice to the Federal Reserve Bank drawn upon, an advice to the Federal Reserve Bank at which payable, a retadned stub, and the original draft, could all be made at one writing on the typewriter. This would insure legibility and would also avoid the liability of any discrepancy between the draft and the advices and stubs. -2 The advice sent to the bank at which payable should be signed by the officer signing the original draft (and the advice should so state), and this vould obviate the necessity of filing signatures with other Federal Reserve Banks. The reasons for all of the above suggestions are very obvious to me, and I regret that my time is so limited that I am not able to elaborate on same for the information of the Committee. At any rate, I believe the matters to be of sufficient importance to be considered by all of the Governors, even if it is necessary to have a conference with nothing on the program except "Federal Reserve Exchange" and collateral subjects. Yours very truly, (signed) R. L. VAN ZAEDT Governor. Mr. R. H. Treman, Deputy Governor, Federal Reserve Bank of New York, New York City, N. Y. FEDERAL RESERVE BANK OF DALLAS Dallas. May b, 1917. Mr. R. H. Treman, Deputy Governor, Federal Reserve Bank of New York, New York City, N. Y. Dear Mr. Treman: At our directors' meeting on Tuesday, after I had read to the Board such data as was in my possession relative to "Foreign Arrangements," the following motion was made, duly seconded and carried: "It was moved by Director Sansom and seconded by Yr. Smith, that the bank express its appreciation of the offer ofthe Federal Reserve Bank of New York inviting us to join in the arrangements effected with the Bank of England and the Bank of France and such other arrangements as have been or may hereafter be effected with other foreign banks, that we appreciate the advantage and pri)fit to be derived from such arrangements, and that the Governor of this bank be instructed and authorized to prosecute further negotiations with the Federal Reserve Bank of New York, and as soon as reasonably practicable to report to the Directors, in as much detail as possible, what eentribution of capital will be expected to be made by this ban, and also the facts in respect to possible liability of the banks, and generally to report in detail all such information as will enable this bank to intelligently consider this matter." In this connection I will appreciate it if you will furnish me with such details as are available, in order that I may communicate same to our directors. They are especially anxious to know the amount of funds to be set aside as operating capital for the foreign department, what proportion of same the Federal Reserve Bank of Dallas will be expected to furnish, whether that proportion is to be based upon the amount of, our capital stock or the amount of our total resources, and what character of business will probably be engaged in under present conditions. As the officers of this bank, as well as its directors, are not very well schooled along foreign banking lines, what may seem you to be unnecessary details will probably be of great importance to us, and I hope, therefore, you will make the information furnished us as full as possible. to Thanking you in advance, I am, with kind personal regards, Yours very truly, (Signedf R. L. Van Zandt, Governor. FEDERAL RESERVE BANK OF DALLAS 'RICHARD L.VAN ZANDT L.; GOVERNOR May 16, 1917. &LP. MAY 2 2 1917 Dear Governor Strong: I don't know of anything that has given me greater pleasure recently than to have received a let- ter from New York with your signature attached showing that you have recovered sufficiently to be back on the job. Replying to your letter of the loth instant, I beg to state that I have received three bulletins and two telegrams from Mr. Page, and have written him thanking him for same and asking him to continue for- warding such data as he thought might prove interesting or instructive to us. Thanking you, and with best wishes for your continued improvement, I am, with kind personal regards, Yours very truly, M. Benjamin Strong, c/o Federal Reserve Bank of New York, New York City. Denver, Colorado, Ma:i 22, 1917. Dear Governor Van Zandt: I have just returned from a short trip east and bring with me copy of your letter of May 5th, addressed to Treman. It can hardly be answered satisfactorily by letter for the proposed arrangements with the Bank of England really involve the whole fundamental position between this country and England. of the exchange I shall try, however, to ex- press the principles of the arrangement and What it may involve in financial commitments, just as we understand the matter in New York. The Vederal Reserve Act in brief authorizes Reserve Banks to appoint correspondents or agents Or open branches in foreign countries, and through these branches or agencies they are authorized to do a very limited banking business, confined simply to opening deposit accounts, buying bills of commercial origin, bearing two obligations and having not more than 90 days and grace to run, to open similar accounts on their awn books for their foreign correspondents and to deal in gold in foreign markets. The object of this provision in the Act was not and cannot be construed to give Federal Reserve banks tho right to do a general commercial foreign exchange business, such as opening commercial and travlers credits, receiving deposits in foreign countries, buying and selling securities, drawing long bills and handling Shipments of goods and securities. Those functions have always been and should be exorcised by comer-* cial banks and private bankerpt The object of the provisions of the Act 2. To - Mr. Van Zandt. May 18, 1917. is really to enable the Reserve Banks, in cooperation with similar benies in foreign countries such as the Bank of England, to stabilize rates of exchange between this country and those countries with which we establish these relations, and to avoid excessive and uncontrolled shipments of gold. To illustrate the way this matter works, I will describe transac- normal times when exchange rates are tions such as would be undertaken in normal and international transactions are net subject to the influence of war trade and war borrowings. Let us sae that there are large offerings of cotton bills in New York in the Fall which drives exchange on Great Britain as low as 4.84 and that the cost of shipping eold from London to Vew York is 2i on the pound sterling. The difference between 'rant parity, which is 4.8665, and the rate for demand as above amounting to as much as 2.65 on the pound, It is possible for American exchange buyers to import gold Cram London when exchange is welling at 4.84, pay all the expense of freight, packing, insurance, abrasion, incidentals, melting charges at the assay office and loss of interest, and still have a profit of .65 on each puund starling. Therefore, whenever sterling declined in our market saj beloa 4.8465, the Reserve banks Could buy sterling exchange and be insured against any lees, because the cost of withdrawing gold from London and laying it down in New York would be no gneater than the cost of the sterling which it purchased. The funds so accumulated in London would be invested in bills at the market discount rate and some part of the funds doubtless left in balance with thb Bank of ;;;Iagland. So long as sterling remained at or below the level at To - Mr. Van Zandt. May 18, 1917. Which gold could be imported, the Reserve Banks, within limits to be fixed, would be buyers of exchange, and they could do so with assurance on account of the guarantee of liquidation in gold at rates fixed in advance. The normal courseo/xcbange in time would be above the gold importing point wheregold might leave this country, say 4.89. The Reserve Banks would then liquidate their accounts in Landon and sell exchange in order to avoid gold shipments. You will observe by the arrangement outlined that it is contemnlated that if the cost of exchange continued long in one direction or the other. so that the Reserve banks had made purchases up to their limit, instead of allowing gold to move as it otherwise might we could still continue to buy exchange, or to sell it as the case might be, and against our purchases the Bank of England would actually ear-mark gold and hold it in safekeeping for us instead of shipping it to this side; and in the other case of continued high rates, we would actually ear-mark gold on this side and hold it for the Bank of England. It goes without saying that the enormous trade of our country at the present time, together with the enormous loan transactions now being embarked upon by the allied governments and by our government, over-shadows every other influence in the foreign exchange market and makes it impossible for us to conduct anything more than nominal transactions with the Bank of England, except possibly that we may agree to take the ownership of gold to be ear-marked by the Bank of England for account of the British government and held without shipment to this country until shipping conditions improve. We see no prospect of large purchases of exchange at the present moment, 4. To - Mr. Van may 18, 1917. Zandt. nor opportunity or occasion to purchase bills in large quantity in London. The foreign exchange market is really in the hands of the respective governments, more than the bankers, and we must wait until peace and of normal conditions make it desirable a restoration to develop these new functions. As to the probable amount of money to be employed, it seemed desir- able to affect authorizations in New York sufficient to meet unexpected emergencies and our directors have placed a limit of 425,000,000 upon our transactions of that character for the present. I, see no immediate ores- nect of any such limit being employed., The above read in connection with the paers ia your hands I hope will throw some light on the contemplated arrangement. You will, I am sure, make clear to the officers and directors of your bank the necessity for treating this rangement as of a most confidential character, that being the obligation which we have entered into with the Bank of England. Very sincerely yours, R. L. Van Zandt, Esq., Federal Reserve Bank, Dallas, Texas. BS/CC Denver, Colorado, May 22, 1917. Dear Mr. Van Zandt: Yanrs of the 16th has been forwarded to me here and 1 hasten to thank you for your nice letter. I came back to Denver for a couple of weeks only and expect to leave aain on Sunday or Monday to return to New York for an indefinite stay. Tlany thanks for your good wishes. Very sincerely yours, Ik L. 7a4,..iiandt, Federal Reserve 3ank, Dallas, 2exas. BS/CC RESEiNE BANK OF NEW YORK (SEND TO FILES) Sent by Wii1V8 4. COPY OF TELEGRAM Vala ,andt, ;Nog., 1616 ...ard4.44fifttilteet November 29 1918 sort mrth learti with the cieelieet recret of the, terrible loos that ;mu have Juet sufi'ereci. 1181tell t,E) pond you °very Avssible expeire*ion teympathy. rfS9 eeds R03. 34. of N. 'I, March 6, 1919. PER'ONAL AND CONFIDENTIAL My dear Governor Van Zandtt Per 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 nest two years and as a result of contact with the financial machinery in ',Vashington. 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 saving, 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 Government 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 t be installed, a nonpartisan organization should be built up and a wise and sane campaign of publicity inaugurated. It is a plan of that sort 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 im- 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 March 6, 1919. 2 in your district who would be likely to be interested in this movement and who would be qualified for service in such an organization and who would do so as a matter of public duty. What is first needed is a representative in every State, competent to take charge of the movement and direct it in the State. He should have qualifica- tions to enable him to become a leader of the State movement, some ability as an organizer, should be public spirited, able to it, and should be rega-ded locally as without the people of the confidence in general of grasp the subject and willing to study political prejudice or purpose, and have the State. In addition to state directors, similar organizers must be appointed in the various counties and principal cities. indebtedeto you I shall be greatly if you can let me have suggestions and names of men in your district for this work without, however, mentioning the matter You may know them well enough to make definite recommendations not only to them. because you came in contact with them in Liberty Loan matters, but other public spirited activities with which you are acquainted or connected. This is a matter in greteful for your assistance. which I have a strong personal interest and will be At our meeting in Washington on the 20th, I hope to have an opportunity to refer to this matter more specifically. Sincerely yours, Governor. req.. R. L. Van Zandt, Governor, Federal Reserve Bank of Dallas, Dallas, Texas. as April 3, 1919. Dear Mr. Van Zandt: I am anxious to get suggestions from you as to some one to do some work in New .1exico in connection with a proposal now being shaped for Federal legislation designed to establish a finaneial budget for our Government. The work required will not be very onerous, but it will need the services of a man who can develop an organization for the purpose of some little education- al and publicity work to bring about a better understanding of this subject. It will be necessary to raise a small amount of money, and, generally, to carry out the program which will be laid out by the organization at the New York headquarters. It needs the serviaes of a man who is interested in the economic aspects of the Government's finance, and who is sugficiently be willing to devote some time and energy would be preferable to interested in the subject to bringing about an improvement. It to have some one who would be capable of making an occasional address on this subject, and who would be willing himself to study and understand it by an examination of literature which will later be furnished. I will greatly appreciate any help you can give me in this connection, by suggesting anyone you think could undertake this work iaithfully yours, R. L. Van Zandt, 3sq.. Governor, Federal Reserve 3ank of Dallas, Dallas, Texas. BV111615 successfully. LIBRARY APR 2 2 1919 FEDERAL RESERVE BANK April 13, 1919, Dear ar. Van ;:;andt: Thank you for your further le er of the fourteenth in regard to.laaa.t.zuusentation in hew ;dextoo. It is very good Of both you and hr. Lawder to make these helpful sug- gestions. 61ncerely 'yours, )4 R. L. Van'.;andt, Esq., i;overnor, Eederal Reserve Bank of Dallas, Dallas, Texas. Lt6'13 a FEDERAL RESERVE BANK OF DALLAS April 29, 1921 OPTIC! OF THE GOVERNOR ;106-As MAY 3 1921 Dear Governor Strong: I am very anxious to have, for the walls of my office in tills splendid new building, a photograph of each of tne 4overnors of the Federal Beserve Banks. Therefore, if you do not consider my request too presumptious, I will greatly appreciate your sending me one of your most recent photographs, Woich i would especially like to have autographed across the front where it will show in the frame. If you do not consider that any immediately available photograph does you justice, you can me know and I will explain to my Visitors that toe wartime and "deflation" problems have wrought the change. let Jeriously, I am exceedingly anxious for the picture, and also want you to avail yourself of the first opportunity to cone down and see our quarters before the new wears off. With warm personal regards, I am, tours very sincerely, Mr. Benj. Strong, Liovernor, Federal Reserve Bank of iNew York, New lork, N. Y. 1921. Dear Governor Van Zandt: I am sending you ft picture as re^ueeted in yours of April 29, and feel very much honored that you should wish it. it Inv not be a very good picture, but it will certainly be improved when it is hanging with the pictures of the other Governors. glad indeed to vend it. Sincerely yours, L. Van _4n41, Esq., Governbi.;-Federal Reserve Bank of Dallas, Dallas, Texas. ri. I am very r FEDIRAL RESERVE BANK OF DALLAS R. L. VAN ZAN DT GOVERNOR May 7th,1921. CD Dear Governor atrongl I am just in receipt of your letter of the 3rd instant, together with copy of your photograph, and I want to thank you for your courtesy in forwarding the same to me. With kind personal regards, and again thArking you, I am, 'Sincerely yours, Hon.Benj.Strong, Govurnor, Federal Reserve bank of ',haw York, New York, N. Y. May 24, 1921, rear Governor Van Zandt: This will serve to introduce to you Mr. K. ahshima, -Assistant Agent of the Sumitomo Bank, Ltd. of Nev, York, who is visiting the South and will give some thought and study to the financing of cotton. Such courtesies that may be extended to Mr. Ohshima will be greatly appreciated by, Yours very truly, BENJ. STRONG, Governor. R. L. Van Zandt, Esq., Governor, Federal Reserve dank of Dallas, Iallas, Texas. BS/EMS. May 24, 1921. Dear Governor Van Zandt: The enclosed is a copy of a letter of introduction, which will be presented to you by Mr. K. Ohshima, Assistant Adent of the Sumitomo Bank, Ltd., 3f New rork, who contemplates visiting the South in the near future. I shall appreciate it if you courtesies as may be consistent with will extend such the object of ir. Ohshimass visit. With many thanks, and kindest regards, Yours very truly, Benj. Strong, Governor. R. L. Van_Zsadt, Eec., Governor, Federal Reserve Bank of Dallas, Dallas, Texas. En c. GW%. The Sumitomo Bank, as you doubtless know, is one of the most responsible banks in Japan. B.S. September 14, 1921. Dear Governor Van Zaddt: You will recall that about two years ago we had some correspondence in regard to the work of the National Budget Committee. In part, at least, passage of the budget legislation by the Congress was due to the work conducted by that Now that the basis of the budget system has been adopted by Congress, comoittee. our organization is endeavoring to cryetallize public sentiment for the support of the program of governoent economy and thereby to insure ;srmaneot success for the now national budoet system. are seeking to extend this work by selecting, so far at oossible, bankers to accept active chairmanships in various of the more important cities, simply to carry on work which will be laid out flor them by the national committee. The scope of the work is described in the enclosed memorandum. Can you suggest representative men, preferably bankers, who might be willing to accept such appointments in the cities of Dallas and Fort Worth. At the present time I shall only ask you to suggest names, but later on possibly you would be willing to oomunictte with them directly and further our object of having thew accept these appointments. If for any reason you think it unwise to make these suggestions, will you not write me quite frankly and, if you are willing to do so, give me your reasons. With beet regards, and thanking you very cordially, I am, Yours very truly, R. L. Van Zandt, Eto., Governor, Federal Reserve Bank of Dallas, Dallas, Texas. BS: Mg en c. RICHARD L_VAN ZAN DT 0 DALLAS TEXAS 2417 MdKinney Avenue. ' *---" Lk: D JAN! 3 0 1922 B.. s, January 21, 1922. Dear Governor Strong: Ever since January 7th, on which date I was ousted from the position of Governor of the Federal Reserve Bank of Dallas, I've wanted to write and tell you of its cause but was reluctant to burden any of my friends with my troubles. Having heard that the affair is being misrepresented by others I have concluded to write you. As you have doubtless heard, considerable friction has long existed between the Chairman and myself, brought about through his mistaken opinion that he was the chief executive officer of the Bank as well as the representative of the Board. He had an exalted idea of his power because he was an intimate personal friend of E.EHouse, T.W.Gregory, Albert Burleson, John Skelton Williams and Thomas B. Love, and through the last tyro, of McAdoo. This friction was the cause of much concern with the Federal Reserve Board and certain of our dire were called to Washington about it as well as the Board having sent various representatives here at different times to investigate the matter. The result of all these investigations was practically the same and last July Ramsey was called to Washington and told, in MD uncertain terms, just where his authority began and ended. The Republican party was then in power and, with all of his Washington "pull" gone, he was much disturbed over his tenure of office. Consequently after his return to Dallas everything worked, apparently, as smoothly as it does in the Federal Reserve Bank of New York. About that time the leading Republicans in Texas began to lay plans to get rid of Ramsey and I was approached by several of them and urged to accept his place when they succeeded in getting him out. To each and every one of these I gave the same answer, which was to the effect that I considered my position a higher one and that, further, I did not like to see politics play any part in the operation of the Federal Reserve When Ramsey's re-appointment was being conSystem. sidered by the Federal Reserve Board I wrote to Governor Harding and told him that there was absolutely no existing friction between Ramsey and myself, and that we could work harmoniously together. Shortly after this Ramsey was re-designated Chairman and Federal Reserve Agent for the year 1922. Upon receipt of advice to this effect, early in December, Ransey's entire demeanor abruptly charged. He no longer cam my office and whenever he had any operating matters to discuss he went to Emerson with them. Our Directors met on Saturday, January 7th, and at the morning session my report was read and disposed of, all of my recommendations were acted upon and then the Board adjourned for lunch. After lunch they went into executive session for the purpose of electing officers, and at half past two Directors Scott and Sansom came to my office to inform me that B.A.McKinney had been elected Governor over me by a vote of four to three. The three directors who voted for me, (Scott, Sansom and Newsome), were as much surprised as I was over the result, and then noted that,for the first time since the Bank was organized, Ramsey had required a secaet ballot. It appears that the whole thing had been worked out in secret by Ramsey and the directors that he controls. Mr. Kell, who took the leading part in the meeting, has evidently been given misleading information as , after the vote, he stated that I had spent an hour and a half begging Mralitchell to prevent the re-appointment of Ramsey, which statement was absolutely false. A few days ago one of my most intimate friends called on UcKinney, the new Governor, and asked him what the directors had against me. the effect that there was absolutely nothing except that "Judge Ramsey heard that Dick was after his scalp so he went after Dick and got him". As a matter of fact there was no truth in the statement that I was "after his scalp", the real reason beingbecause he could not influence me to concur in granting special favors to banks awned or controlled by his personal or political friends and that, with due consideration for his opinions, I insisted on thinking for myself and on acting according to my best judgement. Ramsey has always been a politician, his only banking experience having been as president of the National Bank of Cleburne, Texas, which failed a few months ago when his successor, who was his personal friend and whom he had selected, absconded, short over a million dollars and with all of the Liberty Bonds which had been left with the bank for safe- His reply was 0 keeping. Ramsey had stated to me many times that he had rather see any bank in the United States fail than the National Bank of Cleburne, and my reluctance to extend to it unwarranted lines of credit was one of the principal causes for friction between us. Just a few nights before President Norwood skipped out, while we were having a conference in my office to see whether anything further could be done toward saving the bank, I made the statement that the matter could be easily handled if we were certain that we were dealing with an honest man, whereupon Ramsey started at me with an open knife, with the remark that I could not call his friend dishonest, and that Norwood was just as honest as I was. McKinney, Emerson and others were present when the above incident occurred. ed that the files of the Comptroller's Office inlWashington will show that Ramsey blocked criminal prosecution of Norwood over a year before the bank failed, and if that had been allowed to proceed the creditors of the National Bank of Cleburne would have been saved hundreds of thousands of dollars afterward stolen by Norwood. I did not mind losing the position, for at any time during the last three years I would gladly have resigned had I had any intimation that such action mould not have been looked upon as the shirking of duty and responsibility in time of unusual stress. over the dirty underhanded manner in which my retirement was brought about. I have made no plans for the future, and am really not in a big hurry to make any, but as I have saved very littletand have mat with some recent reverses, and must live, it is imperative that I find something to do which does not require a substantial investment, and if there comes to your attention any opportunity of which you think I maght be able to take advantage, I will greatly appreciate it if you will call it to my notice and will speak a word in my behalf. No doubt my friends, the other Governors, will be at a loss to understand why or how I was not re-elected to the position which I have held for seven years, and therefore, I will appreciate it if you will tell any of them you chance to see, a little of my side of the case. I h I do fee As an evidence of the fact that I still stand pretty well with some of the people down here in this Democratic stronghold, the Fort Worth Clearing House, (my old home town), gave me a complimentary dinner on the same night the Dallas Clearing House gave McKinney a dinner, and to that dinner several of our most prominent Republicans were invited. It was a private affair and speech was somewhat unbridled, and all present were vehement in their denunciation of the manner of my deposal. At the conclusion of the dinner they presented me with a very handsome match and chain as a memento of the occasion. When you next see "Jimmy"Wadsworth please tell him of my removal and request him to write to our mutual friends, C.C.Littleton of Fort Worth and W.H.Patrick of Clarendon,Texas, for particulars. Governor Strong, if you had not written me such an inspiring and friendly letter during my troubles, some three years ago, I would not have presumed to burden you with my affairs now, so you have only yourself to blame for this rather lengthy effusion. I am attempting to do my own type-writing, therefore, you must not lay the blame for incorrect spelling, grammar or punctuation, on any secretary or stenographer. When you have the opportunity I shall appreciate your writing to me, and in the meantime I hope you will not forget to keep your 'weather eye peeled" for any opening which, in your opinion, I might be able to acceptably fill, it makes no difference in what part of the world. With sincere regret at the occurrence which has brought about a termination of my work with you in the upbuilding of the Federal Reserve System, (for I am, still deeply interested in its development), and with the warmest personal regards, I am Sincerely your friend, Benjamin Strong, Esq., O Federal Reserve Bank, New York. 4 $ t. srs ' 4111%W:4k/ January 30, 191?,. My dear Van Zandt: It was good of you to write me about that happened at the lest electim in your bank. As you may not have heard, I have been laid up in the hoepital for a couple of months, had heard none of the news, and had not the slightest intimation, no more apparently that you ha, that any Oen 4a3 contemplated to put in some one to take your place. Co long as I an a meobor of the Eyeter, I must not of course be guilty of passing judgment in a matter of this kind, especially when, as you realize, the only statement of the situation which I have is that received from you. On the otter band, I want you to know that the or:intents of your letter filled me with amazement. During our years of association, which have been cc agreeable to me, I can think of nothing in your attitude toward the System, or toward your associates, and especially toward me, which would give me ground for feeling that you had either incautiously, ignorantly, or deliberately been guilty of any act which would justify such a cavalier and summary dismissal from the service as you seem to have received. If you have been guilty of anything of that sort, which I cannot conceive to be the case, I have very much misjudged you indeed. The reason why I write this so explicitly is because while I had once or twice beard that some friction did exist between you and one of your aseeciates, which all of us that heard regretted, so far as I can recall I am not conscious of hearing one word from you on that subject. At least so far as our relations are concerned, I cannot help but feel that you have been discreet, and if in another direction you have been less discreet, I am indeed very sorry. B. L. Van Zandt, Esq. Jan. 30, 1922. That now occurs to me especially is to answer in some fty the last part of your letter, in a Nay which mill be satisfactory to you. I cannot see an old pal go down as the result of this unfortunate occurrence without making an effort to the extent of my ability to see him comfortably fixed. To-day is my first day at the office, where I could only spend the morning, and I am still unable to put out any feelers in your behalf. in this district for an experienced banker. There are always opportunities The thing is to find him, and the right one. On recaITt of this letter, won't you be good enough to *rite me as explicitly as you can, juot iht you have in mind as to position, work, etc. Also whether if an attractive opening arose, would you feel like going out to Manila? I am not sure what the situation is now, but some months ago General Nod ranted a good man very badly. Once more, let me repeat my very earnest regret that this unfortunate development took place, that it has affected you BO adversely, and my sincere hope that you sill soon rind a satisfactory and profitable berth, where you will be happy and make good progress. You may count upon my having an eye and an ear wide open for something for you right along. associates at the bank about it. Tours sincerely, Richard L. Van Zandt, Esq., 2417 McKinney Ave., Dallas, Texas. BS.Mit I have already spoken to my AC:KNOW% nEtfsee-P RICHARD L_VAN ZANDT DALLAS. TEXAS [11713 c9 1922 2417 MOKinney Avenue. February 6, 1922. Dear Governor Strong: Your letter of the 30th ultimo was a great comfort to me, and I want to thank you for it and for the kindly interest expressed therein. I was much surprised and very sorry to hear that you have been laid up, and sincerely hope that you are now rapidly regaining your health and strength. It seems to me that you always try to get back to your full capacity in too big a hurry, without taking up your work gradually, and along this line you should attempt to follow the good advice which you would give to others whpb might be in your own position. Big financial minds, such as yours and Paul Warburg's, are too rare and too valuable to this Country for us to permit the owners of them to overtax their physical capacities without, in some manner voicing our protests. In other words, we want them held in reserve for use in cases of emergency, just as banks should lookup= the rediscount facilities of the Federal Reserve Banks. In reply to that part of your letter which has reference to a position for me, it might be well for me to give you a brief outline of my past experience. Am fifty years old, and at present single, although have planned to take unto myself an helpmeet sometime in April, and this is the principal reason why I am so anxious to get into something out of which .1 can make a comfortable living for two. Graduated in civil engineering in 1890, and after one post graduate year at Rensselaer in Troy, began work as a messenger in the Fort Worth National Bank of Fort Worth, Texas, of which bank my father was, and still is, the active president. After ten years in that bank I spent two and a half years in the Treasury Department of the Philippines, under Mr.Taft, returning to the States in 1903 on account of the health of my wife. Was appointed by Comptroller Ridgely as Receiver of the Farmers National Bank of Henrietta, Texas, and later as Receiver of the American National Bank of Abilene, Texas, and in May 1905, without solicitation or application, was given -2- commission as National Bank Examiner, which position I held, working in Arkansas, Louisiana, Texas, Tennessee, and Oklahoma, until I was elected Deputy Governor of the Federal Reserve Bank of Dallas on October 29, 1914. Appointed Acting Governor in February 1915, and elected Governer on 6,1915. Having lived for two and a half years in Manila, that is not an unknown country to me, and on the attractiveness of the position, the character of the work, and the possibility of taking a vacation in the United States occasionally, would depend my decision with reference to the matter mentioned by you. I have nothing definite in mind, but so many New York banks and other financial institutions have large interests throughout the South and West that it occurred to me that some of them might want a man who had practically first-hand information concerning While I conditions in thoseparts of the country. have had a lot of banking experience it is what the New York banker would term "country banking", as I am practically ignorant on such matters as Foreign Banking and Foreign Exchange and international matters. Again, the thought has come to me that in the re-organization and resumption of business of some of the large Copper or other mining companies, there might be positions to fill where a technical knowledge of the game was not necessary, but where my general experience might enable me to fill the requirements. In other words, I am rather in the dark It would probably be a comas to anything specific. paratively easy matter for me to get lined up with some bank in Dallas, but I could never be happy here and am anxious to get away from the place. While, as stated, I am anxious to get my definite arrangements made as soon as possible, it would best suit me not to have to assume mg regular duties until about the first of May or later, because the lady who has promised to become my wife has never been East and I had promised her that we would see New York and Washington on our honeymoon. However, she is a very sensible woman and has my interests at heart, and would be willing to release me from that promise and post-pone a visit to those places if it were in any way necessary or desirable. -3- I forgot to state, when talking about Manila, that as it was not necessary at the time, I did not learn the Spanish language. I tell you this because it might be inferred that a person who lived in Manila for nearly three years would know the tongue. Again I thank you, Governor Strong, for your very kindly interest in my behalf, and for the expressions of confidence contained in your comforting letter. With sincere good wishes for a rapid and permanent improvement in your health, and with warm personal regards, I am Sincerely yours, Benjamin Strong, Esq., cio Federal Reserve Bank of New York, New York City. February 9, 1922. My dear Van 7andt: Thank you for your nice letter of February 6. I am really taking care of myself, and it is good of you to be interested In my doing so. I shall put out some feelers right away, with a view of a possible position, and I an inquiring also in regard to the Philippine matter, advising you of anything I learn. In the mean- time, good luck to you. I am greatly interested in 'that you firite about the other venture which you plan for April, and send my sarmert congratulations and good :Ashes for your happiness. Sincerely yours, L. Van Zandt, Esq., 2417 McKinney Ave., Lallas, Texas. February 18, 19 dear Van Ze.rdt: The Prerident of rne cur banks i.n Neer York, vho ecrae time er.c advirsd fre that he -ight, need mar. familiar mith country banking, bar just ,fritten me that his staff is full. Cir the (.-.-ther hand, I learned that ineuirier 2..re being made as to "bather there may nr.,t be atme imperta.nt do. I 'rill advips ycu cr in th Philipeinee '.1Thich you could the result. my c.esuciates have the' situation in mind as yell. as 1, and i-P -,nythin,g devel; ps y:s.0 may count upon hearing from me. S,;T, Yrs,urs P ne r R. L. Va.n Zandt, Esq., 41.7 kicKinney Ave., Da.11a.s, Texas. BSACY y, RICHARD L_VAN ZANDT DALLAS_TEXAS 2417 McKinney Avenue 0 A ['JAR 4 1922 February 27, 1922. My dear Governor Strong: I have just returned from a little trip to Kansas City and find your letter of the 18th, and want to assure you of my appreciation of the interest you are taking in my behalf. A group meeting was held in Kansas City on the 23rd and Governor Harding advised me that he would like to see me there at that time, so of course I went. Had a very satisfactory and gratifying talk with him during which he informed me, confidgntially. that all of the members of the Board, and especially the Comptroller, were "sore" at Judge Ramsey and that with anything tangible on which to base it, they mould request his resignation and immediately appoint me Federal Reserve Agent to succeed him. Please consider this as being strictly confidential, but the next time you see Governor Harding ask him about the Dallas situation and I feel sure that he will give you some interesting information with reference to it. He also told me that the Comptroller was trying to work out some plan to appoint a "resident chief national bank examiner", who would be located in Washington and whose duties would include the close supervision of the examinations of all banks on the so-called "sick list", and that he hoped to be able to make the position one which might prove attractive to me. If you have any thoughts or suggestions along this line I hope you will talk them over with L. Crissinger the next time you are in Washington. Governor Harding also spoke about the probability of a man being wanted to head the Philipine National Bank, but I wouldn't want to go there unless, as previously stated, the position was made very attractive to me. The four directors who voted for McKinney for Governor of the Dallas bank, signed a statement and had it spread on the minutes and furnished me with a cony. Its wording is, in my opinion, very weak and only 0 states that, so far as they kno-74 I am not a crook. I am enclosing a copy; what do you think of it? With the present unsettled financial conditions, lack of earnings of the rail-roads, etc., it occurs to me that some well paying receivership might develop such as the one now held by Delano. Do you think there would be any chance for MB in that direction? I hope you will be certain to talk over the Dallas situation with Governor Harding as he told me many things which I do not feel at liberty to write you about, and yet I am anxious for you to know them. It was a disappointment to me to be in the same town with Fancier and Wills and not be able to see them, but as they were in a conference and as my visit was a secret, it was not possible. Again thanking you for your efforts in my behalf, and with warm personal regards, I am Sincerely yours, Benjamin Strong, Esq., cio Federal Reserve Bank, New York. ZUJIMUG, WARP 012 DILMORS, JX0...R2T iW4 =Ma 1.Z.IlialLid.21,4 WOK OF WW1. PJOIWY 12. 292C. tho pevormao of tho veL:tiona of forno.. GOVUIMOr ,-;.) L. Tatiana tha $2odora1 ii0DOM DOW. of Dallas, tho dirOOtorp victim for ,z0 Mbar: IS tho ououassor to r. Van ::andt, rh000 tom of offioo 1104 ozA.roti,o iootocir.f.e 04 193, horobj doolaro thog iISSo1o3.y t4) OA that 16111 latorocto of oar Institution zicht bo Wet sorvDd nnd stah notion vmm not intondo& amurroflootion on r. irun ndt or M p Intocrity, honooty or Want/0 Tho Dowd hao for that cotlaomn tho Unaopt folincs, on4 riphop for lam tho lama mommaro of momomp that ablittp warestan," brolv ourtify that tho abovo 1p m truo amit 411001441 J. J. mare$ otstnnt aced by lbws. Rpm* Roll, ' ILlIburlionon, M. 0e ootan mna Lovoll 44t14, appoorinG in tho 2intttos o tho ::.lootinc of tho Nord of Dirootoro,-,2otiorm4 Sitoorvo " of Dallas, hula robraar7 It, taaL. acaoft) SAL OV DAUK 00 Hail aoormUrys .3 March 4, 1922. My dear Van Zandt: YoLr note of the 27th ultimo as on my desk this morning on my return from dashington. Governor Harding mentioned having seen you in Kansas City, but 'le were exceedingly busy on some Federal reserve bank matters and the conversation vent no further than that. I de hope you sill get a good position and one ISich will enable you to employ your experience and ability which is a great asset. I shall have it in mind and have a weather-eye open for anything that turns up; so keep me informed if you make any arrangements yourself. 7ith beet regards, Yours sincerely, Richard L. Van Zandt, Esq., 2417 McKinney Ave.'; Dallas, Texas. BS.MM RICHARD L_VAN ZANDT DALLAS. TEXAS 2417 McKinney Ave. ACKNOWI,EDOED JUL 1 2 1922 June 28, 1922. Dear Governor Strong: I am just in receipt of a letter from my brother in the City of Mexico, from which I quote the following paragraph: "The Morgans and Speyers of New York, in conjunction with financiers of England and France, all of whom are holders of Mexican Bonds and State securities, are working on a scheme to have Mexico institute a Banking System similar to the Federal Reserve System of the United States, and the idea is well received. My opinion is that such arrangement will be amicably concluded during the present visit of the Secretary of Treasury of Mexico, in New York. Naturally the organization as well as the initial financing of such an organization, will be under the control of the financiers mentioned, and will so continue until Mexico is in position to assume all control and responsibility of the Institution. I will appreciate it if you will let me know whether or not you have any definite information with regard to the foregoing, and if so, whether the plans being considered provide for a representative, or representatives, with knowledge of our own Federal Reserve System. Also, if such be the case, whether in your opinion I could obtain a position with the organization. 0 My brother, who is now connected with the Sinclair Oil Corporation, has lived in Mexico for nearly thirty years and is thoroughly familiar with banking and business practices, as well as with the laws of that country, and could render me valuable assistance in my efforts to discharge any duties which might be assigned to me. Assuring you of my appreciation of your many courtesies, and trusting that I am not imposing too much of a burden upon you in asking you to look into this matter for me, I am, with warm personal regards, Sincerely yours, Cc_ Benj. Strong, 2sq. care Federal Reserve Bank, New York City. 4 July 12, 1922- Dear Van Zandt: I am only now able to reply to your note of June 2, because it took some time to make the inquiries you something of the facts. necessary in order to advise lithout going into a long story, I am told that there is nothing in the suggestion of which you have had an account from your brother; that the people in Neil York who have been quoted as interested in the System in Mexico that they sill are be. scheme to establish a really not interested: One of mation direct; and the Federal Reserve and that it ie not likely the firms ycd mulled gives me Vas infor- other firm, I am advised, is already interested in the Sank of Mexico, which is largely controlled abroad. I doubt very much whether but if you get more definite there is arrithing, tc fo rd and want further assistance here, please do not hesitate to write me. Yours sinc-rely, Richard L. van ,Landt, Esq., 2417 McKinney- lye., Dallas. Texas. BS.MM come of this matter, 0- RICHARD L_VAN ZAN DT 1301 Penn. Avenue, Fort Worth, Texas. N0V3 19 22 T") 2- October 31, 1922. Dear Governor Strong: The death of Judge Ramsey on last Friday creates a vacancy in the position of Federal Reserve Agent at Dallas and I would like very much to have that appointment. I realize the fact that you do not want to take any part in the affairs of other Federal Reserve Banks, but I'm hoping that you will not consider it unseeming or out of place for you to incidentally say a personal word in my behalf to Secretary Mellon at your earliest opportunity. The Secretary does not know me, having only met me once or twice at conferences, and then in connection with meeting a lot of the other Federal Reserve officials. I can get the endorsement of most of the prominent Republicans in this State, but was led to believe, while on my last visit to Washington, that such endorsements would not have much weight with the Board. I have been told, that now that Governor Harding was not on the Board, a suggestion from Secretary Mellon would swing the votes of the members, but unless you will consent to speak to him for me, I have no means of getting my name before him. It should be borne in mind that the death of Judge Ramsey removes the so-ealled "friction" which was used as a basis for my removal when McKinney was elected Governor last January. I will certainly consider it a very great favor if you can see your way clear to do this for me. Mr. Platt has publicly announced that the vacancy will be filled as soon as Congress convenes'; thezefore, anything that is done must be done quickly. Can you offer me any suggestions which 'might prove helpful to me under the circumstances? With warm personal regards, I am Sincerely y our s /731C dr( lion. Benjamin Strong, c/o Federal Reserve Bank, New York City. S November 3, 1922. My dear Van Zandt: Your note of October 31 is just received. to write directly to Governor Platt. My advice would be i do not think I should write a other letter in regard to an appointment in anyjederal Reserve Bank. You know how scrupulously-carefUl I have always tried to he in such matters, and 1 do not want to be guilty of any infringement of this rule. I may, however, have opportunity for a word with Mr. Mellon the next time I am in Washington, and if so I will be glad to speak to him about it. In the meantiwe take my advice and get right at it by writing directly to Mr. Platt. Of course, if Governor McKinney desires such an appointment made that would be most helpful! With best regards, believe me, Yours very truly, Richard L. Vm_Zandt, Esq., 1301 Penn Ave., Fort Worth, Texas. '4 ,:jaNit RICHARD L_VAN ZANI" 1301 Iennati Ft.Worth, Texa .4444. February lb -/923. Dear Governor Strong: On yesterday I heard that Grace & Company of New York were contemplating increasing the export financing part of their business, paying some attention to the cotton and grain exports of the West, .South and Southwest, and that they were quietly looking for a man from this section of the country to add I'm wondering if you are acquainted to their force. with any of the members of that firm, and if so whether or not you could ascertain the correctness of the report. I do not know very much about the character or standing of Grace & Company, but if, in your opinion, these people are all right, I would like to have a chance at the place. If they are after such a man, could you suggest my name to them in such a way that would not make it appear that I was making an application for Of course, I would not want you to even suggest it? me for a position in which you did not feel sure that I could make good, bearing in mind that my knowledge of the details and modus operandi of handling foreign bills is very limited. However, I am pretty well, acquainted with the banks, bankers, and business of this entire section of the country, and that knowledge might offset the other and qualify me for the position they are contemplating filling. I have not yet succeeded in obtaining a position, as every opportunity presenting itself has required a substantial investment which I am not in position to make. If you can do anything for me along the above lines, it will be greatly appreciated, and I trust that I am not imposing too much on friendship., . By the way, on the suggestion of friends I withdrew my application for the position with the Dallas bank made vacant by the death of Judge Ramsey, C) and joined the Republican leaders in Texas in recommending W. W. Collier, former State Bank Commissioner, The Federal Reserve Board has not yet' for the place. appointed him and may not do so. I believe Mr.klatt and Governor Criesinger, (both friends of mine) could get me appointed if they were properly apiroached. Could you do anything for me there? The objection offered to my name was that I could not get along with the directors who voted against me for governor, but one of them is now dead, and two others are no longer directors. Ir. Kell is the only one of the present board with whom I am "non persona grata", and that is.because he handled Ramsey's frame-up in putting me out. Under the circumstances I do not feel that my work there would be in any way handicapped, but I am not in position to personally bring the situation to the attention of the Reserve Board. I trust that your health has greatly improved since I last saw you. Mrs. Ian Zandt joins me in kindest regards and beet wishes, Sincerely yours, Benjamin Strong, Esq., c/o Federal Reserve Bank, New York City. G34 0 February 20, 1923. 5r. R. L. Van7audt, 1101 Penna. Av., Fort Xorth2 laxas. Dear Cir: Mr. Strong has asked me to let you no thnt he has received your letter of February 15 and is only sorry that he is not, at the present time, able to do anything in connection with the matter cziti mention, such as te would like to. Unfortunately, he has not been feeling very well recently and has been away from the bank for several weeks, having just returned to the city. He is still, however, unable to be at the office, and he wonders if there is not someone else who might undertake the matter in his absence. Very truly yours, Secretary to the Governor. sB RICHARD L_VAN ZANDT Mft n,r5,1"E/CMS 1301 Penna. avenue, Fort Worth, Texas. February 26, 1923. Mr. George Beyer, Secretary to the C-overnor, Federal Reserve Bank, New York city. My dear Mr. Beyer: est regretPlease convey to Gover,rfOr Strong my best at learning of his tilnese, and my sincer- wishes for a speedy and complite recovery. I would certainly never a moment of bothering him with anyhave thought for of my affairs I known that he was not in good health. Will youhad kindly inform him of that fact? Thanking you for your letter, I am Yours very truly, LIVE STOCK NATIONAL BANK OF SOUTH OMAHA OMAHA, NEBRASKA Sept. 13, 1924 C.L.VAN ZANDT PRESIDENT L Benjamin Strong, Esq. Federal Reserve Bank, New York City, Dear Governor Strong : This will introduce to you M Vn Zn t, Jr., who is making a ort visit to your city and I am anxious to have my broth him meet you. He has lived in the City of Mexico for some twenty five or thirty years and is possibly unacquainted with the manners and customs of our great American metropolis, so don't let him get deported. Any courtesies you may be able to extend to him will be greatly appreciated by me. With all good wishes for your health and happiness, I am Sincerely yo urs Ca-te( ere_ 11-r5-1-,A. kke"Lter Vt- 0+ 4, A, Cse °---aire_ or- ---rttjs ±t) M. VAN ZANDT, JR. FORT WORTH. TEXAS RICHARD L.VAN ZANDT Forth Werth, Tex. Na: eh 31, 1927. Hon. Benjamin Strong, care Federal eserve Bank of No7 New York City. _York, Dear Governor Strong: Upon returning to Texas I am greatly impressed with the rapid and substail6tial development that is taking place throughout this entire state, and I find that out-ofstate Trust -Companies, Mortgage Companies and Insurance Companies are being called upon to furnish a large proThe field for this class portion of the building capital. of sound, conservative loans is great and, as you perhaps know, most of the large life insurance companies are prohibited by law from writing insurance in this state and they are therefore without the convenient machinery for soliciting these most desirable loans. A ibw of them have loan agencies in the state but most of them have not, and included in the latter class is that big, middle-western comoany,.the Northwestern Mutual In talking °vet the matter with a very Life of Milwaukee. prominent lawyer who has had many years of experience in examining and passing on titles in this state for both local and foreign clients, he has expressed the thought that possibly the Northwestern MUtual management could be shown the desirability of having a loan agency in Texas and, if so, that with proper recommendations and credentials I might obtain the position of state representative of the company for loan purposes. Be has further offered to accompany me to Milwaukee to discuss the matter with the officials of the company, to explain to them the legal features in connection therewith, and to do what he can to assist me in obtaining the position bought. I have decided to accept his kind offer of assistance, but before making the trip I want to get, if possible some strong letters of recommendation to take with me. With that in view I'm writing to ask you the great favor of sending me such a letter as you can consistently write in my behalf, addressed to Er. W.D. an Dyke, President of the Northwestern Mutual Life Insurance Company of Milwaukee. I assure you that your kindness in this connecWith warm personal tion will be greatly appreciated. regards, I am Sincerely yours, P.. Please address me in For aare of the tit 0 V 4 7,1(4" Hotel Jrighton, itlantic City, N. J. April 13, 1927. My dear Van Zandt: Your letter of March 31 has reached me after some delay because of my absence. When you see Mr. Van Dyke you might tell him of our long association, and if he wishes comething from me about you to please write me. I shall be deli4hted to write him. I hdpe things are going well with you. Unfortunately, illness has kept me away from the bank for a good while, and I am still taking it a bit easy. Sincerely yours, Mr. R. L. Van Zandt, 0/0 Fort worth National Bank, Port Worth, Texas. 4)- RICHARD L_VAN ZAN DT Fort Worth, Texas. April 25, 1927. Mr. Benjamin Strong, c/o Federal Reserve Bank, New York City. My dear Governor: Mrs. Van Zandt and I were both exceedingly sorry to learn that illness hadteen your lot and we hope that springtime and rest will bring you renewed health and vigor. On account of the business erIggements of the lawyer who is to accompany me to Milwaukee, I have not yet called on Mt. Van Dyke nor arranged for a conference with him, but when I do so will ask him to write you about me. Some years agoi on the enactment of the socalled "Robertson Law", about sixteen of the largest life insurance companies in the United States withdrew from Texas with the avowed intention of not returning until the repeal of that law, the objectional feature of which being that it required the investment in Texas securities of seventy-five percent of the legal reserve on Texas One or two of them have unostentatiously policies. returned and with the marvelous growth and development of the State, are finding it no hardship to comply with the requirements of the law, though most of them, including the New York Life, Equitable, Prudential, Mutual Life, Northwestern Mutual, etc., have let Texas severely Meanwhile some local companies have grown to alone. sizeable proportions with highly remunerative business. It was my idea that if I could get one of these big companies to come into the State on a strictly investment basis, which has no bearing on the Robertsbn Law, that it wouldn't be long before that Company would find that it could enter the underwriting business with no further requirement than to apply for anlobtain its permit. Good, sound, conservative building loans can with adequate sinking fund requirements to promade/ vide for and maintain a substantial margin of safety even in the event of deterioration or possible slump be RICHARD L_VAN ZANDT DALLAS_TEXAS #2- in values, at rates which would prove attractive to the large insurance companies as well as to the borrowers. A loan agency such as I have in mind would certainly prove a big money maker for the Company and give it a desirable outlet for some of its investment funds. If you, or some of your friends, are interested in any one of the companies not now operating in Texas, and that company would care to enter this field on an investment basis as outlined, I would be pleased to cone up and go over the situation with them and would bring with me Judge Leroy A. Smith, who is a very prominent lawyer here, an acknowledged authority on Texas land loans and titles, and he could explain the legal aspects to them. I have assurances of cooperation and assistance from prominent bankers and business men from all parts of Texas and know that I can build up for the Company which 1 do take on a splendid investment business. Please advise me if you know of such a company. Thanking you for your letter and with my best wishes and warmest personal regards, I am Sincerely your friend, My dof,r Van 7?,..mdt! Your letter of the 25th 11.-..;3 just rched am, Pa d T quite see the poi nt that you e..ro voring on. for tne to trk3 up fe. . u1d be very di ffi cult f th.! s sort *irk. nono" leth Priy of the big proposFa untce. 118111' anoe Of ours, t T have never slap-oared voIunt eer in giving advice. of the sort you have in mind to irly of these big compesti-...,e, ex-- J.:opt th,A during the tar we did prm then pr.etey herd to eubsoribe to Govorniac;nt loans. 17! you fino .1..ny of than F..re intorested, you sight refer them to rem for info -ton !rid on rem/sot frort them of enured could vary pro.aerly teil thewn what I know. / shall be away for about two weeks attending meetings Washington. Barring that, I expect to be in Now York right along. With best reg,ards, I ROI Sincerely yours. Vr. Ri chard L. Van 7andt, Fbrt 1.11 rth, Texas. 31:'01 ( FEDERAL RESERVE BANK OF DALLAS FILING DEPT. Fa9 45 Av February 2, 1 9 1 5. 0 i915 FEDERAL RESERVE BANK Mr. Benj. Strong, Jr., Governor, Federal Reserve Bank, New York, N. Y. My 'dear Mr. Strong: I beg to acknouled-:e receipt of your communication of January thirtieth, as well as the set of circular letters and forms issued by the "Gold Fund Committee" advising contributors of the distribution of the funds left in their hands from the 'Gold I presume it became necessar7 to abandon the idea which I thought would be followed when we were in Washington, of asking member banks of the various districts to accept credit in their own Federal Reserve j3ank. This might have resulted in a reduction of the balances of western and southern banks on your books. I am rather of the opinion, however, that the member banks of this section, because of existing conditions, would elect to have the money placed to their credit in New York and have it handled through the correspondent already designated in connection with the raising of the fund. With best personal regards, I am 17P 6 1.-.AL.) ,C5Sai g Febraa- 9th, 1915. de ,ar Governor Wells: Thank you for yours of the 2nd in regard to tha gold. -And Com- mittee matter. ,.Tho Committee decided that it would be most unwise to doprivo the contributors of the onportunity of oonverting their contributions Into New York (=change hould they profer tat form of distribu- tion, honco, tho arranGement az disclosed in the paper sent you. Notice of your possiblo dofeCtion reached no through the nftsprae papers and wasvaxtically confirmod in lashington last welt. i am lin'y :Sorry Indeed to learn of this occurrence and realize that your docision :was doubtless based u0n sound considerations of your on fixture, and of that we cannot possibly complain. We will certainly slice you at the meetings in Washington or elsewhere and I talcs thie first opportunity to extend to you every possibla felloitation for your prosperity and happiness in airmingham. With best regards, believe me, Very truly yours, Governor. Oscar Voids, 3sq.. Governor, Federal Reserve Rank, Dallas, Texoz. ,.',5jr/VC1,14 top 0 (Sent to all Federal reserve wJents except Richmond.) November 1, 1916. William F. Ramsey, Esq., Federal Reserve Agent, Federal Reserve Bank of Dallas, Jallas, Texas. Dear Ur. Ramsey: At the meeting of our board had quite a little discussion acceptances. of directors this morning we on the subject of rates for bankers' The question came up in the natural course of busi- ness as to whether we Should buy domestic acceptances and acceptances made for the purpose of furnishing dollar exchange at any different rate from that at which we are buying the import and export acceptances of the same institutions. cussion it was the sense of our After thorough dis- board that as the purchases were made largely on the strength of the credit of the parties to the transaction and primarily that of the acceptors no rates should be made, at least difference in for the present, in purchasing the various classes of acceptances of the same institution. Our directors also considered the letter from the Federal Reserve Board dated October 31st, a letter similar to which I presume you have also received, suggesting that Federal reserve banks had the power by differentiation of rates of regulating transactiens in acceptances of the kind which we have been purchasing during the past'year. William-F. Ramsey, Bilq. drawn under spacial credits arranged between banks in and banks or other drawers in European countries. of our board that tor 11/1/16. s country It was the sense the present and while such purchases are being Offered in moderate volume we should expect to continue to buy them at the 94M0 rates as we would buy other acceptances or the same institutions. I am writing you arter consultation with our other officers as I thought you might be interested in knowing the views of our board. Very truly yours, Chairman. ; - sa oO DERAL RESERVE BANK OF DALLAS - ° MAY 2 3 1922 B.A. MCKINNEY GOVERNOR KTA May 18th, 1922. Dear Governor Strong: The Chief Examiner of this district today presented me with a bill covering copies of reports of examination furnished this bank during the month of April. As you will recall, the report of our special committee which waited upon Comptroller Crissinger made its report just as we were adjourning, and although the Governors, when they met at different tines after the Conference adjourned, had infotmal discussions, I do not have clear idea in my mind as to what course the several banks intend to pursue in connection with paying the Comptroller for these reports on the basis heretofore charged. I assume that since your return hone you have had opportunity to discuss the matter with the other officers of your bank, and Perhaps with your Board, and if you have arrived at a definite determination in this connection I should be greatly pleased if you would advise me in regard to it. ce ely yours, 4911I° , Mr. Benjamin Strong, GOvernor, Federal Reserve Bank, New York City, IT. Y. Gov 00 0 0 WAY z2 flECEIVED BY GOVERNOR'S SEGI FEDERAL RESERVE BANK OF DALLAS OFFICE gF THE GOVERNOR July 29, 1922 Dear Governor Strong: I have your letter of the 26th instant, in which you advise me of the talk which you had with the Comptroller of the Currency regarding the expense of reports of examination of National banks now being furnished by the Chief Exami- ners, as well as to the method of custody and safeguarding of these reports. It is noted that the Comptroller is contemplating arranging for a personal conference at which he would ask the Governors of some of the nearby reserve banks to be present. Assuring you that I should be glad to give consideration to the conclusions reached by this conference, and with kind personal regards, I am cerely yours, Mr. Benj. Strong, Governor, Federal Reserve Bank of New York, New York, N.Y.