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Les Gouverneurs,
Federal Reserve Bank of St. Louis

Sous Gouverneurs, Regents et Censeurs de la B nque de France

Governors of the Bank of France, 1898-1945
Georges Pallain, 1859J-August, 1920

Georges Robineau, August, 1920 -

June, 1926

Emile Moreau, June, 1926 - September, 1930
Clement Moret, September, 1930- January,1935
Jean Tannery, January, 1935 -

June, 1936

Emile Labeyrie, June, 1936 - July, 1937
Pierre Fournier, July, 1937 - [November, 1940]

Yves Breart de Boisanger, [November, 1940] - October, 1944
Emmanuel Monick, Octaaber, 1944-

Sources: Banque de France, Compte Rendu,[generally in January for the preceding year]
Compte Rendu, Jan., 1921, states that Georges Pallain was governor from 1898 to
August, 1920.
Compte Rendu, Jan.01927, states that Robineau was governor for zix years, from 1920.
Compte Rendu, Jan.,1931 states that Moreau was governor from June,1926 to Sept.,1930.
Compte Rendu, Jan.,1935 states that Moret was governor for 4 years from Sept.?5,1930
and Jean Tannery was the new governor by the decree of Jan. 4, 1935.
Compte Rendu, Oct. 15, 1936 and Jan. 28, 1937, states that Tannery became governor
January, 1935 and Labeyrie succeeded him June 6, 1936.
Compte Rendu, Jan., 1938 states that Pierre Fournier became governor July 20, 1937
There was a decree on
Compte Rendu, Mar. 27, 1941 has de Boisanger as governor.
Nov. 24, 1940 which may have changed the gavernship.
Compte Rendu, Jan., 1945, Emmanual Movick became governor, Oct. 7, 1944.

E.H.Knowlton
April 10, 1963




t,*

4 ,LIA
do'

461.114""luillftwo

2rance, February 26,1916.

Dear ::onsieur Fallain:

With this letter I hand you a
memorandum in respect of the matters we discussed,
and which is not more in detail owing to the short
time at my disposal to prepare it.

If thee are any points in tic
memorandum not entirely clear to you, I would be
grateful for an opportunity to discuss them with you.




Very truly yours,



.t
e

S

64

in c)nformitz; with the statute shall consist possibly of a personal

representative with necessary staff of clerks and assistants.

such

an agency, however, would not conduct a general banking business
such as openinF credits or receiving deposits.

It is therefore

important to emphasize the language of the Act which uses the word
"Agency" instead of "Branch".

The motif for making the present investigation of the
feasibility of appointing correspondents and opening bank accounts
is in order to anticipate occurrences which may possibly arise after
the war, and which might result in a derangei_ent of the exchanges to

the disadvantage of the finaneiel position both in the United States
and in those countries with which the United States has close
coL_L:ercial relations.

TLe experiences of the laet eighteen months demonstrate that
abnormal exchnge r tes elid violent flucuation of exchenge are
detrimental to the interest of both countries affected.

Greater

stability to the exch nges during tho period of readjustment
following the conclusion of the war (end if circumatvnoes permit,

possibly prior tereto,) would bo maintained if some part of the
resources of the Federal Reserve Banks were emidoyed in the purchilse

of commercial bills in foreign markets as authorized by Section 14
of the statute above referred to.

The steps necesoary for the accomrlishment of this programme,
accordini, to the writer's view would be:
1




In the case of France, to establish a close relationship
-ith the Banque de

nee for the object of mutual

exchani7e of information.

The arrangement of terms for the establishment of deposit,

3

or current account with the B:.nque de :re.nce.
3

The arrangement of terms for the establishment of
similar accounts witi certain important ireneh banks
and bankers to be selected.

4

The establishment of arrangeleents with banks or bankers

to be selected, for the purchase of bills such as
Federal deserve Banks are authorized to buy.
5

The establishment of arrangfeents for procuring
information in respect of the credit and standing of
the drawers, acceptors and endorsers of any bills
purchased.

Anticipating the development of even closer cce-mereial end
bankin e. relations between Frence and the United States than have

heretofore existed, and of a large commerce between these countries,
and with the possibility of many uncertain factors arising as a
consequence of the war, it has seemed desirable that plans for the
accomplishment of the purposes above suggested should be perfected
in the near future, and emphasis is ledd upon the desirability of
close cooperation with the Banque de France.

It is auggosted that

the Federal Reserve Bank of New York may also be of service to the
Banque de France in American affairs as the telationship developed.




8, 1916.

:4 dear ::onsieur Pallain:
.

.

Your very kind letter of April 17th was

presented to me

by M. de Neuflize i=ediately upon his arrival and I hasten to assure you of

te

good will with which we are prepared to receive him

and to discuss wit.. him the various mat Lers with which he is intrust-

by the Chamber of Commerce of Paris and the Bank of France.
We have already outlined informally various suggestions
for his consideration and th &se, I a7 sure from

my knowledge of

him will be pursued intelligently and diligently.
.

Since returning to New Y rk, it seems to me we have had con-

vincing evidence of the necessity for developing the use of comarcial credits as one of the means of :stabilizing exchanges between

France and the United States, and you may be sure that every effort
to facilitate tne promotion of tee impurtant work which

will to
r. de

euflize has undertaken.

visit to Paris afforded me not only very great pleasure
but, also, I trust laid tho foundation for future relationships which
will be of mutual value to our respective institutions.
Once more, permit me to express my warm appreciation of yo r
many courtesies to me while 1 was in Paris.
warm regards and good wishes, and believe me,
Faithfully ye rs,
!exisieur G. Pallain,

The Bank of France,
Paris, France.,

BS Jr/VT:



Please accept my very

4

April 15th, 1916.

7,:y dear :..onsieur Pallain:

71y visit in England was unexpectedly prolonged, so

that I only reached home 7esterday and hasten now to advise
you of my sa:A arrival and once more thank you for your many
courtesies to me while I was in Paris.
:.:essa7,es received on tie steamer ocauainted me with

the fact that a meeting had been deferred pending my return
and T am now obliged to be in 7as);ington for some time and,

consequently, will be unable to write you at length, Which I
had hoped to do, until I return again to 'Jew York.

Will you not, however, in the meantime accept this
expre::sion of my warm regards and convey the some to your
good associates?

ith best wishes for success in your many responsibilities, I beg to remain, dear :onsieur Pallain,
::ost cordially yours,

::onsieur Georges Pallain,
anque de "Prhrle.,

Paris, France

BS Jr/VGI










BENJAMIN STRONG
Estes Park, Colorado.

November 3, 1916.

Dear Sir:

At the request of Governor Strong, who is, as you know, absent from the bank for rest and reouperation for a few months, we are
forwarding to you by mail books, pamphlets, etc., in connection with.
and explaining the operation of the Federal Reserve Banking System;
also of the clearing house and chock collection methods at ?resent bcin; employed in the United States.




This data comprises the following:

A copy of the Federal Reserve Banking Act of the United
States with the recent amendments.
A copy of the last edition of the regulations issued by
the Nederal Reserve Board (the official authority in
directing the affairs of the Federal Reserve Banking
System).
Cordes of circulars and forms used in connection with
our discounts and collections.
A statement of the operation of the Gold Settlement Fund
an6 the forms used in connection therewith by the
twelve Federal reserve banks.
A copy of the constitution, by-laws and rules of the New
York Clearing House Association.
A copy of a book on the methods and oferation of clearing houses by James G. Cannon.
A cony of a book on clearing houses, especially the operation of the New York Clearing Rouse, by Jerome Thralls.

Statistics relating to the number of checks handled by
(a)
(b)
(c)

The New York Clearing House Association,
The Federal Reserve Bank of New York,
The twelve reserve banks in the system.




#2

L. Georges Pallain,

11/3/16.

A description of the operation of the Transit Department

Denver, Col!? redo,

November '1...4th,

1916.

ti
onsieur Pallain:

Dear

absence from Hew York which will

r bably continue

for the rest of this linter, and the unavoidable
for exchanging views with my associatesW-iiifrrily

deferred a reply to your kind 1,r9Ar

this time.

elny required
V'eneceseari-

August 25 h until

/

Your remarks in regar

ods now being employed

t

for d:veloping the use of ,he
as the lamphlets which TO
rend with a great deal

e

of bank notes, as well

were g
interest

enough to send me have been
)

Of course, talccess in your

(

-

efforts to introduAw t)44\uee_o_L-,14 checks will necessaril.) re,

/'

suit in a con

...rable enlargement of bank deposit liabilities

e erne requ 3ements on the note account, will he

and reduced

partly offset

the

c)hoity for increased reserves ageinat

deposits.

I apprehend also that difficulties will be encountered
in promoting the use of chocks, until a system for th,:ir collection throu,-,11 clearing houses, etc., and for the settlement of

resulting balances, has hrid considerable development.

reliev-

ing that literature bearing on these matters may prove of service in your new program, I am taking the liberty of having a
collection sent to you, some of which you have already seen.




To

tonsieur G. Pallain.

Nov. 14, 1916.

Cur own plans for dcveloping a nation -wine system of

check clearance are progressing lost favorably as will be indicated by these documents.

rurther questions may be suggested

after reading the papers and I hope you will not hesitate to send
them to se and I will soe that cem;dete answers are promptly prepared.

It we!, a pleasure to learn of

oreieur de Reufliee.

continu

He seems to h

favorable reception in New York and th
discussed his plans all exereseed

.ndly and

a gentlemen wi
llingness to c

eelom I

perate GO

far as they were able.

The further sugg

your letter have

been the subject of our :1,o

ation and corsider-

able correspondence.

was in Paris, plans

for co- operation between

institutions must natural-

1: await their fullest d

until after the distractions

and relvdonsibilities o

to estab
specific

shing new mon

no longer prove an obstacle
rations.
The suggeetion

for a

action aggregating, say, $20,000,000, preliminary

to a more gene
by some of my

nding must await a fine]. consideration
cietes in 'sashington of the whole subject of

our foreign role lone, but pen ling their decision, I am writing
to point out one

two difficulties in adopting exactly the nlan

you suggest which I fear cannot be overcome, at any rate, just now.
The puria;ase in this country of

on

foreign bills

domiciled in Paris and London, has always been a profitable department of the business of American bankers.




The Federal Reserve

l'ov. 14, 1916.

olnsieur 0. Pallain.

1-4)

Fistem, no you know, is a co-operative orgnmization of twelve reowned by the member banks 1,nd which derive

serve bunks rrisich

their resources

ron deposits of reservceby those b-

rest on their accounts with us, whereas, the member

low no i

sits all psy interest

auks who contribute our calit11 and our d

f, therefore, the

to their depositors, averaging possibly 2

ith their funds

iederal Reserve B-,nks should enter t e market

which are obtained witnout interes

cost, in co

ition with

their own member banks whose at them *4
der this department of the b
able.

'h-- could not soon

rise to friclion wn

would give

ould ren-

ur on membere unprofitan

our transactions

&genius.

That is one of tee

bly confine their pur-

reasons why the res
chases of foreign

r of policy, to those which

have already reac

and after they have been

accepted by the d

those with documents ni-.

county

tech

their acceptance.

You alno und ubtedly realise the necessity for an understa
your i

ing

tution an

serve banks

ions which ce-Ay he undertaken betwePn

s shall be upon a geld basis.

The re-

custodians of the gold reserves of the na-

tional banks of the United States and the enployment of their
funds in foreign markets can only be undertaken under such
arrangements as will ensure liquidation of accounts is gold
when a reversul of exchange rates or other causes, necessitate




..4_

Nov. 14, 1916.

=,:oneieur 0. Pellain.

All

the withdrawal of these credits.

I believe that your proposal

for guarantees of rates of exchange c:.n be avoided by a more

general understanding between the two institutions that balances
carried by one with the other, or investments movie by one throL01

the agency of the other, will always be liquidated by shipment of
gold or,

at any rate, by earmarking gold

the property of the creditor instituti,r.

tent can be effected and the necescar

it aside as
If such n

authorities are

from our directors and the Federal Reserve Board, our
how such an account should b
could purchas

;,

arrant -;e -

btained
Jews of
follows:

xchange as we

might

deterine to be prudent f

is under present

conditions, remittin

cable transfer.

This amount, less a rca
you in current account,

bills of the highest g
not of financial origi
Federal

rve Act.

ceods would b

ion to be carried with
ask you to invest for us in
or comrerciil purposes and
o comply with Section 14 of the

s ills natured and wore paid, the proested and this account, barring unex-

pected develo

s necessitating its conclusion, would con-

tinue until exc

-0 on Paris turned against this country and

possibly eeipmen

of fold to :'aria or London became possible.

ilen such conditions arose, the account, of course, would heve

to be liquidated in whole or in part and the Federal Reserve
Bank of New York could do so by selling checks on the Pen- of




446

To

ow. 14, 1916.

:onsieur 1. Pallain.

:ranee no long as exchange on Paris as Lt a premium and until
All

the account :'as exhausted.

Also, if exchange became adveroe to this country and
continued in that situation for any length of time, we would
naturally entertain suggestions from the

of France for con-

ducting the account current and for purcha

of bills in CAA

market upon terms identical to tho e which

applied to our

ac,:ount and to our investments in ?aria, we u
account in

the same obligation to liqui
had undertaken with us in

that you

4stunce.

4

e

taking with you

uctance to eatabli'h an un-

can underata

limited general understanding

his character under present

in turn would no doubt

conditions 'Ild'sfol

expect us, to p

wanes by exchange of cables,

upon the anount

willing to receive for inse in each instance it right

vest r-lont

f on ti

involv

living or

=

,g

to the full extent of the

ucco

One udvant
rattle

han a guar

in the p
long au the rrit

of

41-1 understanding of this character,

ow.: rate of exchange, would probably lie

with which the account would be continued so
of exchange and rate:: of interest muds it

profitable for one institution to continue the account on
the books of the other.

A continuance of our account with

you, if conditions justified, until the exchanges returned to




70

onsieur G. Pallain.




Nov. 14, 1916.

-7%0

onsieur g. Pallain.

Lov. 14, 1916.

he appointment of correspondents in foreign countries,
however, as you will observe by the floction of the Act referred
to, requires the consent of the Federn.1 Reserve Board.

Deter-

mination of the policy of the Federal Reserve System in opening
accounts in Europe, therefore, rents finally with the Federal
Reserve Board and while the nntter is no
sideration, they hevr not as yet give

,

a their deci

n.

s decision bef

negotiations must, of course, await

for conOur

any-

thing can be concluded.

Please be as ured t
preciate the further evide

our letter of your

desire to promote the osta

ze relationship be-

tween our respective

aim be

nstit

n the interest of the

you is, according to ou
commerce and finance of b
May I

warmest

c. ntries.

me most kindly to your asso-

ask ye

ciates end to you, my

eur Pallain, I beg to convey my

e.. rds, and rema

y yours,

'fonsieur 1eorges

Ban- of France,
Paris, France.
BS/VCM




allain,

to aseure

WESTE47,41NA ONION
TEL
AM
E

F,ra,

260

WESTERN UNION

IR\

'47KINS.

NEWCOMB CARLTON. PRESIDENT

V16;6PREZIDILNT

TIME FILED

BELVIDERE BROOKS, VICEPRIMIDENT

CHECK

D the following Telegram, subject to the terms
on back hereof, which are hereby agreed to
Denvev,

Colorado, Januar...), 2, 191¢.

EL24-2221Ar"---Bank of Prance,
Paris, 111-1.nce.

nanj thanks for your good wishes lohieh are heartily reciprocated.
I await your letter with interest :Ind will rapid promptly with
reiri to our nesotlations and respecting recent announcemont of
possible arransements in London.
Stop.

Benjamin ::trout;.

Ben:. Strong,
4100 Montviow Blvd., City.




decz,_

Q/. /9/1y,
-.4114.




24.4.-L

WSTE
E

,
-4-n,....

Le

N1

UNION

Form 2689

WESTERN UNION

DAY

GEORGE W. E. ATKINS, VICE-PRESIDENT
RECEIVER'S No.

114ZIL-4

TER

NEWCOMB CARLTON. PRESIDENT

TIME. FILED

BELVIDERE BROOKS VICE-PRESIDENT

CHECi:

SEND the following Day Letter, subject to the terms
on back hereof, which are hereby agreed to

G. :)allain,

CABLARALI.

7onvor, Colorado,
ebruarj 15, 1317.

o7 'ranee,
'saris,

'ranee.

anlyinc; your cablo fifteonth your lottor tTiont7 sovonth Decombor has boon

rocoivod aftor sore delay stun. Havo nroparod subaestion for reply ihich In no-3
boinG considorod in

NOW

York.

track;
Chg. Benj. Strom;,
41.30 Lontview Blvd.,
Denver, Colo.




Form 2903

e Filed

Number of Words

WEST
CAB

UNION
RAM

THEO.N.VAIL., PRESIDENT

following Cablegram, subject to the terms
ck hereof, which are hereby agreed to

;.

CLASS OF SERVICE DESIRED
Fug Rate

Half Rate Deferred
Cable Letter

Week End Letter

Patrons should mark an X opposite
the class of service desired; otherwise FULL RATES will he charged

SEE BACK OF THIS BLANK

New York, February 21, 1917.

-allain, Governor,
Bank of France,
Paris, France.

Your letter December twenty-seventh received stop
Before sending reply outlining
our final and lefinite :7,roposals we propose to make application to Federal Reserve
Board for its consent to our anointing Bank of France our agent and correspondent
stop If consent is granted announcement would be published in newspapers similar
to that made in December concerning appointment of Bank of England stop
Will it
be agreeable to you to have such announcement-made prior to our arriving at « definite
understanding of actual terms stop
Please reply Federal Reserve Bark New York
Benjamin Strong

ti
Mge. Fed. Res. Bank,
Equitable Building




Mist. 34

U. Cablegram
6!00
m-

FEDERAL RESERVE BANK

OF NEW YORK




CONFIRMATION OF TELEGRAM
We have today telegraphed you as follows:

New York, ,A,Idr:z.

-11ain, Governor,
Bank of r'ranee,
Paris, Fral,ce

Your letter December twenty seventh received stop
Before sending reply
our final and definite prelosals we irocce to make aiplication to Feder
Board for its consent to our appointing Bank of !ranee our agent and cor
stop If eonsent is grant-d announcement thereof without stating propose
would be made promAly in newspapers similar to announcement made of aut
appoint Bank of ::ngland atop
11 it be agreealae to you to have such
made prior to our arriving at a definite understanding of actual terms
reply Federal Reserve Bank
Toxic
-unSvamin :Arena

7(3. Fed. Res. &Im-

itable Building

MISC. 34

FEDERAL RESERVE BANK
of NEW YORK




CONFIRMATION OF TELEGRAM
We have today telegraphed you as follows :

Nom Yor%, ieb. 27, 1

Georges Pallain, Governor,
Sank of France,
?aria, Fr.inle.

Irestly
to recoil% your message twoultisesond. .top. re h
frog rederul ReserveRomrd authority to Elp.,loint Rank of France our
Their uctior covers only formal authority ti.. 404)oint loaning all
tern* to bo zgresd ullon between us. stop.
views Rod oroosal
qgreltAnnt ms V.rward by nal. probably this week. `top. This bank
mnnouncnmont until terms hive been agreed upon between us but nes
will =flaunt* in norspapers March first ttat our 41:3plication for
anpoint you as agent hen boon approved and will quote paragraph R
7ourtoon of 'Ioderal Res-rvo Aot Aneoeting buoiree permitted to
suer agorcy and will *tato that other i'edoral roverve banks.su.7
throujh us in :agency relationship when *established.
S-2

Trams,

ilaftwelsw Mf

44

Denver, Colorado, itch. 3, 1917.

First (rough.) copy of the letter and memorandum sent to Lonsieur 2allain.

1.

The following points confidentially and

tentatively agreed upon for submission and ratification
by the respective institutions with

a

view to being-. put

into operation as soon as the necessary authorizations are
made.
2.

The Federal Reserve Bank of New York to act

for itself and for such of the other eleven(11) Federal
Reserve Banks as join the account.
3.

The Federal Reserve Bank of New Ycrk to

maintain a current account with the Bank of France, and
the Bank of France to maintain a similar account with the
Federal Reserve Bank of New York, the balances carried in
such accounts to be subject to withdrawal by check ana to
be free of interest.
4.

The Bank of France to purchase as and when

so requested prime commercial bills for account of the
Federal Reserve Bank of New York for the payment of which
at maturity the Bank of France will be responsible, such
bills to be of a character to comply with paragraph "F",

Sectin 14 of the Federal Reserve Act, which requires
that they shall arise out of actual commercial transactions,
have no more than ninety (90) days to run exclusive of days






-04e`

(09i: dev,
of graoe and bear the signature of two or more responsible
2arties.

The Federal Reserve Bank of New York likewise to

purchase prime commoroial bir.e of a similar nature for the
Bank of France, and to be responsible for their payment at
maturity.

such bills to be at the absolute disposal of the

owner in either tease.
5.

Bills purchased by the Bank of France it the

Federal Reserve Bank of New York to be of a character eligible
for discount at the Bank of France, and to consist, so far as
possible, of those tearing the names of American drawers, or endorsers, so long as tLis requirement 'ices not involve the acceptexa_ott a

ance of other than prime bills.

ik,siTiler policy to be pursued

A
by the Federal Reserve Bank of New York in purchasing bills for
the Bank of France, should it be cossible to do so.
6.

The accounts respectively, to be kept free of

cherges and commissions- except as regards actual out -of- pocket
expenses.
7.

In case, as the result of change in custom or in

the lae, the Bank of France and the Federal Reserve sank of New
York should adopt the practice of allowing intereet on current
accounts, the balances carried shall be put on an interest basis.
8.

The debtor institttion, at the request of

the oreditcr institution, to set aside and ear-mark gold

on a bullion basis representing balances due, hen.-

a9

elAAgliinge-wilIonit-$tllcw-ithdrawals without abee-to
the creakto.r.izieTtittuttem, and upon like request, to ship

gold in settlement of balances due all as set out belcw.

In


..Crt VI 0,0.7\cl

the case of gold ear-marked, the same to be separately

0
gE

tonot?,...t lr of co-t
titettitc a q tef Ave d to fo n atereultd
!Kai-

0/tea.) afivitxtle.t.9ke

areLe

tc te-» 70

1.:=^

Cr,.

)4%

#e
ta,,, 4r Adrelot c
r t;u2iFr 40.;
r ti'voilietrip7, lt.'s tA 7
Oct et(
ttlavz f pet cctriti-G. am et 4L ftmut( Al -.4.;,,,,,,441-144a+o-frt44.444 evratra4:1
packed and stored and clearly identified as to ownership.

9.

11-tf.*Ierkri,_

Shipments of gold by the debtor institution 6.671"
P646$6. aL

to the creditor institution on the latter's request as in

Ftei. 1440i

paragraph (S) to be at the cost and risk of the creditor

4,f)c4 art

64..)

61;;;

inst itut ice.

eg

There gold is shipped by one institution

10.

iegt fibs

03.4.

to the other for the purese of making exchan,ge, however,

th.

yee,44.4V
/1/4

e

,

and not for the purpose of settling balances, such shipment to be at the

risk

ct 6;w:A

and expense of the shipping in-

stitution.

gf

The method to be pursued in ear -marking

11.

and shipping gold by one institution for the other to be

-

in detail as follows:
(a)

The Bai k gf France to ear-mark and set aside
.

r

:

refined -old bars, for the Federal Reserve Bank of New York
wat-1,0441; 4o

the

e

A

cibtk

(7)1)\c,,

310 7

per kilograff

of` gold

A

'

illea-e-trefitate-f-iete or

(b)

When refined gold bare are not available

(f)
the Ra:-.k of France to ear-mark and set asidejnited States

gold coins for account of the Federal Reserve Bank of New
pro Ik irettA
4/
York at their bullion value, at tAle rate A AL'
f" toir 314
i'7),L4.1,-)iti)/"fr

11.12:a qtae?444'4.

per kilogram

,

17

or

4-04----T4e-neak01-gr....24-ter---ewr-rfte-rk-late.-;--se t

(2-`
ag.irtie French gold coin at its bullion value at tie rate

eiq4.0"r.

lb

Kelso

(6)

trgt.w.t.,:.

per kilogram/a(

Au eickeri.

Gold bars or gold coin so ear-marked but

not shipped, to be taken by the rank of France (if returned



et

14:

t 130;4

to the credit of the Nev York Bank) at the same values at
which they were ear-marked in the first instance.
(k)

It should be understood that the Federal

Reserve Bank of New Yerk cannot require the Bank of France
to ear-mark United States gold coins at bullion value in
order to import them and realize the profit between the
bullion value and face value of United States coin.

The

right to determine in the event of shipment whether United
States coins shall be shipped or not to rest with the
Bank of France.

United States gold coins which are abraided

below the United States limit of tolerance of one-half of
one per cent net to be ear-marked or shipped if other gold
or coin is available.
12.

The Federal Reserve Bank of New York to

ear-mark and set aside cold for the Bank of France and
charge its account on the following bases:
(a)

Refined gold bars at the rate of $18.604651

per United States standard ounce of gold nine-tenths fine,
plus the assay office charge of 50/' per $1,000 in value, or
(b)

French gold coins at their bullion value of

,fF18.604651 for each ounce of gold of the United States

standard, nineetenths fine, or
(c)

Eagles at their bullion value of $18.604651

(d)

Geld bare, or gold coin, so ear-marked but

per ounce.

not shipped, to be taken by the Federal Reserve Bank (if
returned to the credit of the Rank of France) at the same



5

value at which they were ear-marked in the first instance,
excluding the Assay Office charge above mentioned which
will be borne by the Bank of France.

(If gold bare are

returned, they may be aubjedt to a further Assay Oflice
charge for remelting amounting to one dollar per thousand
The Federal Reserve

ounces, which is the existing charge.

Bank of New York, however, will endeavor to have this
charge abrogated by the Assay Office and if succeeaful will
immediately notify the Bank of France).
(e)

It should be understood that the Bank of

France cannot require the Federal Reserve Bank of New York
to ear-mark French gold coins at bullion value in order to
import them and realize the profit between the bus :lion

value and face value of French coin.

The right to determine,

in the event of shipment, whether French coins shall be
shipped cr not tc rest with the Federal Reserve Bank of
'r:ew York.

French gold coins which are abraided below the

French limit of tolerance not to be shipped if otner gold
or gold coin is available.
13.

Gold bars ear-marked or shipped by either

institution to the other must be suitable for coinage pur-

poses, alloy to be copper, and an allowance made for any
variations in gold contents above or below the standards
specified above.
14.

The ear-marking and shipment of the gold
4

L7iA41, 14.,70.tit4r. fo 4 0-4(th

ooins of any other nation to be undertaken upon the basis



*601

of the value of the fine gold c-intained in such cL,ina, with

deduction of an allowance to cover the cost of conversion
into gold bars of French or United Statea mint standard
respectively.
15.

In general, the terms to apply to all trans-

actions in gold to be such that the effect of the arrangements will be to make all shipments of gold between the two

institutions upon exactly equl terms as to each.
16.

The amount of balances which one institution

is willing to receive from the other or the amount of bills
which one institution is willing to purchase for the other
to be arranged in each instance in advance by exchange of
letters or cables.
17.

It is expected that information will be

exchanged by correspondence respecting credit matters and
financial conditions.
18.

It is proposed that the Federal Reserve

Bank of Fe% Y;rk will endeavor to promptly conclude an
arranoement of similar character with the Bank of England
and that the terms of the understanding between all three
Institutions shall be known to each.
19.

The approval of the French Government to

be furnished to the Federal Reserve Bank of New York insofar
as such approval is necessary to enable the Bank of France
to comply with

the terms of this memorandum with respect

to shipments of gold.




20.

The arrangement to be subject to cancel-

n7

lation by either institution in whole or in part except as
to transactions in process, on notice by letter or cable,
it being understood that any unliquidated balance either
way will be settled in gold, if desired, under the terms
of the understanding.
21.

No announcement directly or indirectly to

be made regarding the contents of this memorandum, which
is confidential between the institutions concerned, without the explicit consent of both institutions.

The -:: lia-

nouncement of the appointment of the Bank of France as
correspondent and agent of the Federal Reserve Bank of
New York only to be made when the consent of the Bank of
France has,.been obtained and in language which will not
diaZIose the contents of thin -memorandum.




rt./
141°

Monsieur G.

Pallain,

tdtk

Governor of The Bank ot France,.

.

Paris, France.

Dear Monsieur Pallain:

After the usual delay in the mails, I have

received your most kind letter of December 27th, and it
has been read with great interest both by my associates
and by myself.

As I explained to you when) in Paris the various

Cilt.tallri:Ali

formalities involved in cannaa.t.tan.--wItla the appointment
A

of our correspondents abroad have necessitated the exercise of patience and caused considerable delay.

In this

connection I think it desirable to mention that the anncuncement made by the Federal Reserve Board regarding our
negotiations with the Bank of England was merely to the
effect that the Board had given its consent to our making
the appointment and the -8144.110144X4441A was published some-

what in advance of the final arrangement of all details.

In order that the procOdure in these matters
may be understood,

I suggest your reading paragraph "Eft

of Section 14, of the Federal Reserve Act.

In view of the announcement respecting the appointment of the Bank of England, it seemed desirable that
application for like consent as to the Bank of France be

Se
made as promptly as possible, a

my associates have

cabled you as per confirmation inclosed herewith to which




Our application has been favorably acted upon and the necessary consent
Ittrte ha s Abe en given by the Federal Reserve Board,
http://fraser.stlouisfed.org/
eLtA52,10 e
i2
ti471 03P-,
Federal Reserve Bank of St. Louis

a.4

ahrtAu-

*Ito

S

"2"

Yra

we are now woia444.1ill reply

(7.444AkaAti geotp

6(1Apj

A
The comments contained in your letter are so

completely in accord with our own views of the terms
which should govern the relationsof our respective institutions, that I am now taking the liberty of reducing
what I understandtbADe the substance and intention of
our conversktions and correspondence to the form of a
memorandum in which I have endeavored to cover all the
WC( aid/ toil 11111W,4 MA)

principal points to be dealt with.

Your4+3 appreciatt44r

the importance of uniformity in the ch-i.racter of the

relations which the Federal Reserve Bank of New York
will establish with all of its principal correspondents IX
att1 the memorandum inclosed 44:43-pe4e-ii* embodies the same

principles which we hope to apply in our other relationships.

With regard to the volume of transactions to
be undertaken by our respective institutions,

I find ig

difficult at the present time, to give any indications.
Fixfact

The Federal Reserve Bank of New York w

act not only

in its own behalf, but also in behalf of such of the
other eleven Federal Reserve Banks as desire to participate in the account.

Under present conditions,

I otoctd

consider it unlikely that at the outset so considerable
an investment in bills as that which you name, say
$30,000,000 or $40,000,000 would be feasible, and the
extent to which the account might develop would depend
upon many indefinite conditions such as rates of exchanFe,



;1'0

Paragraph 11 of the memorandum states our understanding of the
value at which gold is taken for coinage purnoses by the French Lint and

we further understand that French coins consist of 900 parts fine gold

and 100 parts copper alloy, which is the same standard as American gold

coins.

If this is not correct, the memorandum should be changed to conform to

the French mint standard.

In paragraph 12 of the agreement reference is made to a charge of
D

11010mQ rmirgle,,

50¢ per c-,;1000 in value imposed by the United States Assay Office

or refined,
A

gold bars and, likewise, to a charge of ,1.00 per 1000 ounces imposed by

the United States Assay Office for remelting gold which is deposited

4.41-44r

01-10-7
to be exchanged for gold coin or gold certificates.

iego-

tiations between the Federal Reserve Bank of New York and the Treasury

Department of the United States are noa being conducted in an effort to ob-

tain a modification of these charges and you may regard the reservations

contained in paragraph 12 on this subject as tentative and dependent upon

the outcome of the negotiations referred to.




S

a3

relative rates of discount in your market and ours, and of
course, political and other developments which just now
seem to be exceedingly uncertain.

I am obliged to ask for information on one point
which

-1051k.971aet

attar

4".."..."1"..

--r egftod as being covered only tentatively in
sal

the memorandum inclosed.

It is our understandini that the

French Government has established a prohibition either by
statute or decree, against any exportations of gold, ex-

cepting those which may be made by the Bank of France with
the Government's consent.

It would, therefore, if our skirt-

-70A

is correct, require the assent of your government to
A.

the proposed arrangement, which contemplates settlement of
the account by exportations of gold under certain contingencies, unless indeed, the Bank of France is quite free
to make such exportations without governmental assent being required.

According to my view, it is important that the
principles applying to our relations should be set out
and understood as promptly as possible; it being expected,

however, that future experience will assist in furnishing
a guide to the development and enlargement of the scope
of our transaotions.

The most important principle, of

course, is the reciprocal character of the arrangement by
which the transactions to be conducted and the obliTationa
to be assumed by each institution for and to the other
shall be identical on both sides.

governing our operations,



With this principle

I am confident that the rel

ship will prove to be one of great value to the commerce
-

4 t-tel

and finance of the VOW countries.

Asking the favor of a cable acknowledgment of
this letter and of the inclosure; sad assuring you of my
deep appreciation of your letter and of your hearty cooperation and with warmest expressions of my esteem,
bey to remain




Faithfully yours,

I

copy

FEDERAL RESERVE BANK

0F NEW YORK

New York City,
Larch 5, 1917.

REGISM1ED.

Dear Lionsieur Pallain:

After the usual delay in the mails, I have received with satisfaction your most kind letter of December 27th, and it has been read
with great interest both by my associates and by myself.
As I explained to you when in Paris, the various formalities involved in arranging for the appointment of our correspondents abroad have
necessitated the exercise of patience and caused considerable delay.
In this connection I think it desirable to mention that the announcement
made by the Federal Reserve Board regarding our negotiations with the
Bank of England was merely to the effect that the Board had given its
consent to our making the appointment and the auhtorization was published
somewhat in advance of the final arrangement of all details.
In order that the procedure in these matters may be understood,
I suggest your reading Paragraph (e) of Section 14 of the Federal Reserve
Act.

In view of the announcement respecting the appointment of the Bank
of England, it seemed desirable that application for like consent as to
the Bank of France be made as promptly as possible, so my associates have
cabled you as per confirmation enclosed herewith, to which we now have
your reply as per copy also enclosed.

Our application has been favorably

acted upon and the necessary consent has now been given by the Federal
Reserve Board, as advised to you by cable, of which copy is also enclosed.




develop would depend upon many indefinite conditions such as rates of exFEDERAL RESERVE BANK
OF NEW YORK




change, relative rates of discount in your market and ours, and, of course,
political and other developments which just now seem to be exceedingly
uncertain.

I am obliged to ask for information on one point which you may
regard as being covered only tentatively in the memorandum enclosed.

It

is our understanding that the French Government has established a prohibition, either by statute or decree, against any exportations of gold, ex-

FEDERAL RESERVE BANK
OF NEW YORK

3.

Lonaieur Pallain

/5/14t,

46,

copy

cepting those which may be made by the Bank of France with the Government's

0

rA,

consent.

It would, therefore, if our information is correct, require

the assent of your Government to the proposed arrangement, which contemplates settlement of the account by exportation of gold under certain
contingencies, unless indeed, the Bank of France is quite free to make
such exportations without governmental assent being required.
Paragraph 11 of the memorandum states our understanding of the
value at which gold is taken for coinage purposes by the French Lint and
we further understand that French coins consist of nine hundred (900)
parts fine gold and one hundred (100) parts copper alloy, which is the
same standard as American gold coins.

If this is not correct, the memo-

randum should be changed to conform to the French Lint standard.
In paragraph 12 of the agreement reference is made to a charge

of fifty cents (50f) per thousand dollars (1000) in value imposed by the
United States Assay Office for furnishing refined gold bars and, likewise,

to a charge of one dollar(1.00)

per thousand (1000) ounces imposed by

the United States Assay Office for remelting gold which is deposited in
order to be exchange.L for gold coin or gold certificates.

Negotiations

between the Federal Reserve Bank of New York and the Treasury Department
of the United States are now being conducted in an effort to obtain a
modification of these charges and you may regard the reservations contained in paragraph 12 on this subject as tentative and dependent upon
the outcome of the negotiations referred to.

According to my view, it is important that the principles applying
to our relations should be sot out and understood as promptly as possible;
it being expected, however, that future experience will assist in furnish,



FEDERAL RESERVE BANK
OF NEW YORK

4.

Lonsieur Pallain.

3/5/17,

Jo*
ing a guide to the development and enlargement of the scope of our transactions.

The most important principle, of course, is the reciprocal character

of the arrangement by which the transactions to be conducteLL and the

obligations to be assumed by each institution for and to the other shall
be identical on both sides.

-,;ith this principle governing our operations,

I am confident that the relationship will prove to be one of great value
to the commerce and finance of the citizens of our countries.
Asking the favor of a cable acknowleJ.gment of this letter and of

the enclosure, pending formal reply; also assuring you of my deep appreciation of your letter and of your hearty cooperation and with warmest
expressions of my esteem, I beg to remain,
Faithfully yours,

Governor.

monsieur GeorgesPallain,
Governor, The Banque de Franco,
Paris, France.

BS/CC
-11cs.

P.3. We are advised that the French limit of tolerance upon
abraded French coins is 1/10 of 1% for one hundred franc pieces and fifty
franc pieces, 2/10 of Ve for twenty franc pieces and ten franc nieces, and
3/10 of 1% for five franc pieces.

If our advices are incorrect, paragraph

12 (e) should be changed in order to include a correct statement of what
the limit of tolerance is.




C EAT:

AL.

11411 rtunria
:'LY

T) .?}I ,V

.

B

.1-ii-LATI

I

trID

1i

.7

C--)N.1

'a

57j

r2,z, T.)

:IL

BAB:.

',MANCE.

'ho following; points oonfidentiihlly and ten

1.

upon for submission and ratification 1)4 (;lie respective

'rely agreed

s itutions,

oesarj author-

with a now to boind put into
isations are medo.
2.

The

k to act for itself and

fodoral :;ewe

for each of the other elov

count.
York to maintain a current

he :ederal

3.
a000unt wit; 1

and the Bank of

the Bank of

ranco to maintain a

rve Bonk of New lork, the balances

similar account with t

foot to withdrawal by Oheor and to be

carriod in such 800

Lowest.

fro()

4.

e to purchase as and when so requestod prime

commercial bi

for account of the Federal 2.esorvo Sank of New York, for

the payment of

idh at maturit7 the Bank of

ranee will be responsible,

such bills to b of a character to comply with paragraph (o) of Section
14 of the :Odoral Reserve Aot

which requires that they shall ariso out of

actual commeroial transactions, have no ED1'0 than ninety (JO) days to run,
exclusive of days of grace, ankI boar the si.jnature of two or more rosponsi-

blo parties.

:he Federal _osorve ::tonic of ;yew Yor4 likewise to purchase

prim commercial bills of a similar nature for the Bank of




ranco, and to



be resnonsible

-)age Two.

for their payment at eaturity.

Such bills to be at the




age

7hroo.

institution On Lai: latter's request as i

cost and riac of the creditor institutio

..bore gold is Shipped by on

10.

puroose of making exchange, however, and

balances, sun shipment to be at the ris
tution.

method to be pursued in

11.

one institution for the other to be in
(a)

r:11(.. Barak of "ranee to oa

bars nano- tenths fine, for t

:ranch Lint rate, Aida
puro gold, or
(b)

then

to er-mar-c and set
(1)
United
Federal Resorve
rate e,uivalont
pure gold, or
-

(2)

valent to the

(o)

gold co
York a
fra

at i
franca 3

.r gold coin,

to be taken

the 3an4 of Franco (if

Yorz Bank)

he SWO values at which

instance.
(d)

it should b- understood tha

.New York cannot require the Ban.: of .,

.old coins at bullion value in ordor t

orofit bot'oen the bullion value and f




?age

our.

?age Five.

0
te :'edoral reserve Bank of New 'tor: to ear -::ter:; .renc

gold coins

at bullion value la order to import them ann realize tie :wont batman
tho bullion value an41 face value of French coin.

right to dotonntno,

in the event of shipment, Whether 'reach coins shall be shipped or not
to rest with the Federal .::esorve Beak Of N

French gold coins
office) "earmarked or"

Which are abredod below the French 1

L of tole

t to be/anipped

If other gold or gold ooin is avail
13.

Gold bars ear-marked or shi

by oithor

other meet be suitable for oo

tution to the

coppor, and an

allowance uado for any vaxi

tents

WO or bolos the

standards soecifiod above.
14.

gold coins of any other

ear-r

nation to be undertak
of the value of the fine
an allowance to cover t

United States :Ant s

t the eff

its of gold

ontainod in such coin, with deduction of

oral= into gold bare of French or
Lively.

In general,
to be such

for the other upon the basis

to apply to all transactions in gold,
of the arranger:ants will be to mao.se all ship-

Limon the two institutions upon exactly equal terms as to

each.
16.

Th

t of balancos which one institution is willing to

receive from the other, or the amount of bills which ono institution is
willing to ourchaso for the other to be arranged io each instance it
vane° by oxchange of loLters or cables.
17.

It is oxpeoted that inforoation

poudanco respecting credit matters and financial conditions.




will be exchanged by co

,:eservo 3ank of 3aw York
it is proposed that L.he :edema
arra:140cent of similar charactor
'will endeavor to promptly conclude an
of the understandina between
of nzland end that the tarns
18.

4410;th the Ban:::

known to eseb.
all three institutions shall be
Jovernmen t t
The sonroval of the :'ranch

19.

insofar as moan
Todoral -leserve ;;ask of Now York

be furnished to the

val is necessary to
is memorandum

wi
=able the Bank of i.Vonce to oamply
4ith res7)oct to

shipments of gold.

Ile arrangement to

20.

cancellation Ir.; either insti-

xtneactions in procese, on notice
Whole or in part,

tution i

by letter or cable, it bein

and

way will be settled in

t any unliuidated balance either
er the terms of the undoretand-

indirectly, to be made rejardin6;

the contente of this

s confidential

between the inatitu-

consent of both inslatutions.
_tides co

Ifew York Ci

i(21°u)

Arch 5, 191




mver, Colorado,
_rch 7, 1917.

Lear '-oasieur Pallain:

been dul
Your note of .:ebruary 23d has
and
tine you have been advised by cable

= vod and in the mean-

er of the

e arrival of

27th la
your wmmanication of December

1 am glad to confirm L. Delieufli,

the past few

health, :chic h has been most rap

nov: beginning to look fo

report of im

o the o ice before many
a return

months elapse.
rds al
With most cord'which 1 be

ou will also convey to

your associates, 1 am,
Sincerely yours,

Georges Pal
lionsi
e Banque
Govorno

e Ivranse,

2arls,

CC




ent in my
the, and I am

Federal Reserve Bank of New York.
leorges Pallain.
Are deeply touched by the sentiments of cordial sympathy which

telegram brings us.

It is with pride that we see the great Am,

Democracy fighting on our side in order to assure the coming tri
of the cause of the people's right and of their liberty.
7-16 175 II

COMPAGNIE FRANCAISE DES CABLES TELEGRAPHIQUES
PARIS.

NEW YORK.

(.)

24 ROYAL EXCHANGE, E. C.
16 BOULEVARD MONTMARTRE. 2 MINCING LANE.
63 RUE VIVIENNE.
NEW BRIDGE AA
E. C. BALTIC, MERCANTILE AND
94 SOUTHWARA STLONDON. SHIPP' G EXCHANGE. E. C.
S. E.
36 VICTORIA
, WE MINSTER.

TaLernoft. 441 402 M.A.
Taummene. 2000 OM...
GER BUILDING. PARK

7513,10AD ST..

ACER STREET.
11
.
1 WORTH STREET.
.
Be! BROADWAY.

65 FIFTH AVENUE.
261 FIFTH AVENUE.

.

TaLsow.eros. 12.111Aw..

.

Tin.sro...2 *94 num...
Tal.E.90 eras. 207 lilAsuNie

i7
ORLEANS, M

HAVRE:
BREST:
ANTWER

.

.- 1 1917

1kESTERNAGCN

AG

ST.

HSNORTHLASALLESTREET.
qmicaco,nol,

UK

30- 2

CHILOU.

Ut DE CHATEAU.
Y, 14 RUE VENUS.
ICUEL0111.

1

EDWARD C. SWEENEY. ---s"'"

Tim

,1

1:14

I

The following MESSAGE is received via FRENCH TEI, GRAPH CAREX, subject to the
d and agreed to.
and conditions printed on the back hereof, which are ra
Y F 772 PARIS 53
FEDERAL RESERVE BANK OF NY
SOVES PROFONDEMENT TOUCHES PAR LfS SENT/MENTS Dbil CORDIALS SYMPATHIE
*'-gjlig:;'NOUS APPORTE VOTRE TELEGRAMNE STOP C EST AVEC FIERTE QUE NOUS,
rt-:;c7._IvED

'7.:110-;§$

LA GRANDE DEMOCRATIE AMERICAINE COMBATTRE A NOS COBS POUR
ACCOUNTANT

t:IASPRTRR LE TRIOMPHE PROCHATN DE LA CAUSE DU DROIT DES PET4PLES ET DE,
P

LELTA:ItIBERTE
GEqRGES PALLAIN




P

.'7714tit,

15

6

F. R. S. N.Y.

seeToreduce the risk of errors or delays, please file any agli7rVtitis message at one of the Comuaany's own offices.Messengers may be summoned by Telephone for Cablegrams FREE OF CIIARGE.

IRED

Form

WESTER
essage

WESTERN UNION

Letter

s should mark an X oppohe class of service d sired;
HERWISE THE TELEGRAM
TRANSMITTED AS A
DAY MESSAGE.

TEL

UNION

...trie

NEWCOMB CARLTON

AM

PRESIDENT

d the following telegram, subject to the
n back hereof, which are hereby agreedterms
to

Denver, Colorado,
April 3, 1917.

/

Georges Pa.
Ban,: of rance,

Paris, Ifsrance

Affectionate greetings to yo. and your
associates eilloot from
an enthusiastic friend and ally.
Strong.

Chg. Benj. Strong,
4100 Montviea Blv.




Receiver's N

Check

Time Filed

Form 290

WEST
CAB

Number

Time Filed

Number of Words

WESTERN UNION

THEO. N . VA I

.

UNION
RAM 14

PRESIDENT

CLASS OF SERVICE DESIRED

Full Rate

Half Rate Deterred
Cable Letter
Week End Letter
Patrons should mark an X opposite
the class of service desired: otherwise FULL RATES will be charged

SEE BACK OF THIS BLANK

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

ray 31, 1917.
Georges Pallain,

Ittthr-a-f-

c e,

Paris.

Accept deepest appreciatior of your kind messaoabout my son.
Benjamin Strong.
BS/VCv.

Charge




Menjsmin ftrong,
ieederal Reserve Katik,
City.

May 31st, 1917.

Dear eonsieur Pallain:

You will, I am sure, understand the great appreciation
thet 1 feel in the interest which you displayed in my son's arrival in France.

He sailed on Saturday on the "Rochambeau"

with about forty students of Princeton University to take up his
work in the ambulance service in France.

He had previously been

in training in the army but oeing to his eye-sight which is somewhat defective, he was obliged to accept his discharge and of all
the other various forms of service this seemed to appeal to him

as the most useful and one which he could undertake immeditely.
I am sure that if he calls upon you, (as he certainly will if time
permits after reaching Paris), you will find him all that i reoresent him to be, and that is a splendid boy.

At the first opportunity I shall hope to write you a personal letter, telling something of develoements hcre and particularly of the reception which was accorded to your countrymen who were
recently here on such an important mission.
7'y return to flew York is now more or less permanent, as I

hove closed my Denver home.

I regret to sey that the preisure in-

cident to ranking arrangements for placing the new government loan has

unavoidably etlayed consideration of your last letter about which I







-2-

To

! :onsieur Pallain.

stay 31, 1917.




4

Tatriz Gin, If. Tee

t7t47 1, 1917.

3aw lierdow
ae I WM m1

see, atom tie SO4 '! or low last lidag

bettor, the promsere or oink aeldeala Caw* egos the Mood aeoerve

essroodies dth the Aleidag of Our lonmemente MA, taw, ads it
lotolliNhe Mir as 10 f1 1 thy arm ties to otiliy tho aemoortia *kWh
yema own gout rem to Traria,* Iii z'

lm to the aspolatreat of lho Nollt

lhat,
K leissura as the Agent in Mao of the Wesel Beaersa ledo
the osallilia of i health Imagall whoa Illittationi via >4 tountrer bran
atd may now sloe vatuvalar to Amor for a conthoe oat I able to lane
son fts117.

2n craw to fielbor illustrate NW poeItioa I ac ailsoing
this a asaorasiass, aotth opt In stew duo teill the patsy of the Naeofflo Omar

ant the iressens ter time* atoptlas. It =WI bo a West aselinpeblallemi
uet

IMO INI MOW&

lbw meat popoosi ilth Iry pat Isietl-

tatIon; In Mt Oor ocoilinistiese aid eorraeseeelome That as tip holism to

1111 be alto to oonaumato thla sorsomgmit ad, If nosoy, 2 mill plea
Task, is older
to Wait Moo wig jot as moo as I am ipt may MR

is mellow ow oolromatlone in paws
point to be dealt with It sow to :35 to this:Sue
The asialllialmat or a went on t*:o bow= or us nem of reams bz tho

Agora lemerso fit, or tho parobase of bill. throuTh Sho Mk of Paw
le in Wan, tho ogolgrami In st foreign ootetitzt of a owsoopludillg allot

or the roseamoo or the Mr* Immo Fork ea, as tho law maim woo



21ear TTalaina

Slo

i111.: 2, 1917.

to maw reeersee is mil, ear bralliSag arraggeramis Ansi Non be of =oh

daseetur as gal motto m to omit isle' ~tabs* won the liquilution of
these Morse In MK' if seat therefor Maws 74 do not cortomplate
ilisiblIdeac yea efodite in somas of meth easest on Vlo Ian:: or ;Vows
would be

to xeseilie awl road he at ail liese matt, to liquidate la

elli Mead It Mae lamessibls for as to ileifitato the mesa* bf
&ego glee* l sear daps lamb It weed sot be or expeetatisa to Gnaw
this eseerast elipir for the pewee of elthilmstir ^p2 t nee the as* of

Nom for the awe ce soh profit as es ail* realise. I fast, at the
Mena Una there would, be so wont in. ctoinz so, oertaliol,7 not eaftloiout

to jestiti smoke r the :lila broolvei

shipeente nolo further, le

road net upset let the osseant would be as aetliro oar largo one, bat
mother a sealast Gas &Arc

poslol of the eery it= 1111116.110 conditions

eve so ebossual aid meartabe am at present.

If the eirdilleie of the mama as Metal In soar amollatia
ast appear is poi to to Irsetlseble at the Dreamt linos le alght suggest
in lieu thereof mai poilirc the omoluelea at the wan that the Dads of
reinoo opera as asseseet In dollars with the 1114111111 Ilistins INS et

away for the porperes ae lcinc per node in PM AM eat for the wpm
ouch United bariasse aro wadi MAW the 3solc at Paso ear Allad am"
oarre*Ilenleuto eith the appuleal of the IhAmel - menses BONK, in the hope
aril ozpootatiOr that a are oemprehustee seregoolent raoMdi bo senoludai
Lator.




July M., 1917.

- lemelear ;14.11d.23.

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Perin, VienVe

in even- Treq

Form 2903
CLASS OF SERVICE DESIRED

Fu te
Half Rate Deferred
Cable Letter

Week End Letter
Pat
,,,,,rk an X opposite
,i service desired; OTHERthe
WIIE CABLEGRAM WILL BE
TR
'".TTED AT FULL RATES

WEST
CAB

NEWCOMB CARLTON, PRESIDENT

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




UNION
RAM

GEORGE W. E. ATKINS, FIRST VICE.PKEsiDENT

Dec. 22, 1937.

Pallain,

Bank of France,

Pais.

warmest Chri3tras Greetings to you and your associates.
DO;
Charge

Benjamin strong,
Federhl Reserva Banic,IFEDEri.4-

15 Nassau St.
13Si IVO/

S'-rong.
1VitlIK4

"\

January 21, 1918.

Dear Mr. Pallain:

I have taken the liberty of giving a note of intro-

duction addressed to you, to my friend, Mr. John T. Pratt, who
L.-; sailing for France this week.

ex. Pratt is a well known New Yorker, son of Mr.

Chas. Pratt whom you doubtless know as one time connected with
the Standard Oil Company.

Since the outbreak of the war he

has been ent;a3ed in some inTportant work in the Department of

Labor in Walfhington and has now resigned to take up work in
France.
Ste is a very warm personal friend of mine and a de-

lightful fellow in every way, and I hope his engagements abroad
permit him opportunity to meet you.

Anything that you can do

to facilitate the objects of his trip will be warmly appreciated.

:ith kindest remembrances for the New Year, and thanking you in advance, I beg to remain
Sincerely yours,

M._Georges Pallain,
C/o Bank of France,
Paris, France.




:January 21, 1918.

Dear Sir:

This note will be presented to you by my friend, Mr.

John T. Pratt, who is just leaving this country to accept a
position of importance in the Amorican Red Cross, Field
Service, in France.

I hope that Mr. Pratt's duties will permit him op-

portunity to present this letter to you, as he is a very warm
friend of nine and I am sure you will be glad to know him.

Anything that you can do to facilitate his work or
his trip will be greatly appreciated by me.
Faithfully yours,

M. Georges Pallain,
C/o Bank of France,
Paris, France.

BS/FIAB







copy

FEDERAL RESERVE SANK
OF NEW YORK

Woods Hole, Lassachusetts.
August 12, 1918.
Alt

THE GOVERNOR OF THE FEDERAL RESERVE BANK OF NEU YORK,
TO THE GOVERNOR OF THE BANK OF FRANCE.

My dear Monsieur Pallain:

Your kind letter of June 22d reached my office the latter part
of last month, during my absence, and, while I am still away, I take this
first opportunity of replying to your letter in the hope that we may at
once conclude the more limited arrangement which we are discussing, and,
later, establish it upon a wider and moreexplicit basis.

Unfortunately

I am unable to visit France this year, but I hope that this letter will
cover the ground which I had hoped to discuss with you in person and will
be found to be entirely satisfactory.

With this I am enclosing to you a resolution of the Board of
Directors of the Federal Reserve Bank of New York, duly certified under
seal, authorizing the officers of the bank, as occasion may require, to
open an account with the Bank of France, and, accompanying this, you will
find instructions in regard to the drawing of checks on the account, together with specimens of the signatures of the present officers of the
bank in duplicate.

May I likewise ask that you be good enough to furnish us with
a similar explicit authority for the opening of an account by the Bank
of France with the Federal Reserve Bank of New York, together with specimens
of the signatures of your officers and the usual authorities for signing
drafts upon the account.




MKDKRAL RESERVE BANK
017 NEW YORK

42

The Governor of the Bank of France

8.12.16

copy

We will prepare a form of check to use in drawing upon our ac-

AO
count with you, whenever it is established, and presume that you, likewise,
will prepare your own form of check for use in drawing upon your account with

US.
As to the opening of our account with the Bank of France, let me
explain that up to the present time we have had no occasion to open any
account abroad other than in connection with some special transactions with
the Bank of England, because, as I have previously advised you, the Federal

Reserve Bank has undertaken no commercial banking business and will likely
require the facilities of such an account only in connection with transactions
for the stabilization of exchange, or, possibly, those to be conducted for
the account of the United States Government.

We at one time expected to

handle funds in connection with our military operations in France but finally
other arrangements were made, and, therefore, the account we had in contemplation with the Bank of France was not opened.

In order, however,

that all details may be arranged, against the possibility of such transactions,
which will enable us to enjoy the facilities of your bank, we propose shortly
to remit francs for our credit, for a nominal amount, in order that an account
may in fact be established and maintainea.

We do not expect an allowance of

interest upon this balance as we, in turn, are unable to allow interest upon
balances which may be maintained with us by your institution.
As to the account which you propose to open with us, we will be very
glad to receive from you the deposit of any funds which you may desire to
carry with us and hold it, subject to your direction or check.

Vie will also

be able to receive and hold for your account negotiable paper or other free
assets which you now have or may acquire in Lew York, and place at your dis


FEDERAL RESERVE HANK
OP NEW YORK

#3

The Govelpr of the Ban

OPY

qf France 8/12/16C
vo

posal the facilities of our institution for your ordinary operations of
collection and payment.

Should you desire to have us make purchases of paper eligible for
discount at the Federal Reserve
to conduct these operations for

ew York, we All be very glad indeed
sing the same care that we use in

purchasing paper for our own account.

Under our practice at the present time, we will make no charge
for the collection of checks and drafts payable within the United States,
which you may deposit with us for credit, the avails of such drafts being
made in accordance with a schedule of time, which is stated in the enclosed
pamphlet.

Responding to your request for information as to the terms of the
understanding between the Federal Reserve Bank of New York and the Bank of

Ehgland, I am to-day in correspondence with the Governor of the Bank of
Ehgland in order to arrive at an understanding which will enable me to comply
with your request, the actual document being subject to an explicit agreement
that its contents will not be made known without prior agreement by both
institutions.

Permit me, in conclusion, to express to you and to your associates
the intense satisfaction which is felt by everyone in this country that we
are at last able, by the presence of a great army-on your soil, to repay at
least in part the great debt which the United States owes to France.

You may

rely with confidence upon the determination of all of our people to relax
no effort necessary to bring the war to a victorious conclusion, and we hope
with you that when that time comes bonds will --Jaye been established between

the two countries which can never be severed.

I shall indeed feel the greatest

possible satisfaction if these bonds may be strengthened by a close alliance




FEDERAL RESERVE NANA
OK NEW YORK

#4

The Governor of the Bank of France 8/12/16.

copy

between our two institutions under which the conditions arising at
the conclusion of the war may be dealt with for our mutual protection
and profit.

With assurances of may high regard, believe me,
Faithfully yours,

Governor.

BS/L3B
anc.







2

Monsieur Georges Pallain

10/29/18.

I shall hope at the earliest possible moment to again visit France and
once more enjoy the opportunity of renewing our friendship.
:;ith cordial regards, believe me,

Faithfully yours,

Monsieur Georges Pallain,
Bank of France,
Paris, France.

BS/MBB







-'...
\11--

'

R
June 18, 1919.

Dear :.lonsieur

Much to my delight I am sailing for

urope by the

Baltic on or about July 13t, and am, therefore, looking
forward to the pleasure of a visit with you in the near
future.

faithfully yours,

Monsieur Georges Pallain,
Governor, Bank of trance,
Paris, trance.

B._;/ 1.1313

Hotel Ritz, Paris,
July 28, 1919.

dear Monsieur 7allain:

It is with great :deasure that I advise you of my safe arrival
in Paris, where I shall be for a few days at the Hotel Ritz, and
shall ho.e to learn that it will be convenient for you to see me.
Trusting that you kee ;. well and fee_ some relief from the
heavy burden which I realize you have been carrying for so long,
and with the assurance of my resect, I beg to remain,

Faithfully yours,

Monsieur Georges Pallain,
Rue Croix-des-Petits-Champs,
3
Paris.

-BS/V







000
Hotel Ritz, Paris,
August 19, 1919.

Dear Monsieur Pallain:

Contrary to my expectation I shall not leave Paris as planned, and an
now writing to ask your assistance in carrying out a transaction desired by
the Treasury Des,,artment of the United States.

I understand the French government has expressed a willingness to furnish up to110,000,000 in napoleons in exchange for which there shall be delivered the equivalent in German gold coin, in Paris, on a basis of 999.4 of
fineness.
Will it be possible for you to ascertain and advise me of the following:
1.

The probable cost of shi:ing the gold coin from Brussels to Paris.

2.
Likewise the robable cost of shi,:ping the German gold coin from
Amsterdam to Paris.
3.

The probable cost of shi,

ing napoleons Cram 72aris to Madrid.

4.
The length of time which will be required to effect a delivery of
napoleons in iladrid when shipped from Paris.

The Federal Reserve Bank has a sufficient supply of German gold marks,
both in Brussels and in Amsterdam, to make the deliveries in Paris an soon
as shipping arrangements can be comjeted, and I would also like to know
whether, in C480 the arrangements for transport from either of these places
could not be prom,..tly effected, the Bunk of France would be willing to make
the shirzaent of the equivalent of $10,000,000 in napoleons to the Bank of Spain
in !sadrid, against which I would propose to place at the order of the Bank of
France an equivalent amount of German gold coin, either at Brussels with the
Banque Nationale de Belgique or at Amsterdam with the Nederlandsche Bank.
Assuring you of my a preciation of any assistance you may be able to render
in -amiling this transaction I beg to remain,
Faithfully yours,

onsieur G. Pallain, Governor,
The Bank of France,
Paris.

http://fraser.stlouisfed.org/
Federal Reserve Bank BS/VLouis
of St.

Hotel Ritz, Paris;
August 28, 1919.

Dear Monsieur Pallain:

I am just in receipt of advices that it will not be necessary to
make the shipment of gold from Paris to 71adrid, concerning which I have

recently had some conversation and correspondence with you.

I wish to

assure you of my sincere aiTreciation of your courtesy and good will in
this matter, and with assurance of my esteem-remain,
Faithfully yours,

Monsieur Georges Pallain, Govornor,
The Bank of France,
Paris.




:Utz Hotel, London,
September 12, 1919.

Dear I:onsieur 2allain:

it was with great regret that I found myself obliged
to leave .saris for .ondon on very short notice and on that so-

cont a was unnble to sr/tinge for another visit with you, as
had hoped to do.

As it became unnecessary to make the gold shipment
which we were discussing,

hnd hooed that on our next visit we

could spend some time in the discussion of matters in which we
are both very much interested, but this, however, i must defer,
fear, until another visit to Prince.

I hope you will not mind my saying that I was distressed to observe the evidence of your recent illness, and to

express the hope that you will now find leisure to make your own
health your first responsibility.

,ith cordial regards and every good
main,

PaithfUlly yours,

nce,




ish, I beg to re-




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A BRIEF TRANSLATION OF THE OPERATIONS

CF THE BAWJE DE FRANCE
During the year

1 9 1 5

Gentlemen,

After eighteen months of war, with the same calm as
last year, with a faith always greater in the glorious
destiny of France, on the day fixed by our statutes,

I declare

our general Assembly is open.

Before giving you lecture, in the name of the Conseil

Gen6ral, of the report of our operations during 115, let
me address to the Country an expression of our gratefulness
for the confidence it places on us.

In the incessant labour

imposed on us, this confidence is a precious comfort. Cur
initiatives have a double aim: to help the energy and patient
effort of the Nation to adapt her economy to the conditions of
a war which necessitates the aid of all resources and activities;

to give to the state, for the needs of the National

Defense, compatible help with the credit of the bank note.
The year which has just past was marked by a renewal
of progressive activity in the various manifestations of our
financial and economical life.

The circulation of capitals,

paralysed by the declaration of war, has recommenced little
by little after the decision taken by the .:stablishments of

credit and most of the Banks to renounce to the moratorium
of deposits anu current accounts.

The Bourse is pursuing




gradually the liquidation of engagements of a term prior
to July 31st 1914; the tarh transactions are proceeding under
satisfactory conditions-

Our agricultural industry surprised by the abrupt occurrence of the war and in spite of later difficulties organised
itself toireserve one of the essential elements of our
I;ational wealth, thanks to the mutual aid which the rural
have
The works of the field kat been effected
populations lent.

everywhere up to the firing line, nevertheless, our cereal
crops in 1915 are not inferior to the average.

For wheat

and sugar we have been obliged to go Abroad and for some
of the most important of our provisions.

Industry and Commerce have enjoyed renewed activity
and many signs indicate progress.

Railway lines have realized

a rise of commercial trafec which is gragually approaching
the figures prior to the war.

The particular inquiries of

the 7 inister of Work develop a marked reduction of the number

of manufacturing and commercial houses which have not yet
commencedi busine'ss operations.

ew factories have been founded replacing those closed
at the time of the war due primarily to the demand for war
material, ammunition, etc, of which an abundance is one

of

the conditions of victory and one can also notice happy
efforts to make up for the difficulties of the lack of hands
and transportation facilities and to augment as much as possible the production of other industries.

3.

14,




Also, a part of the activity shown in the industries
of war contributes Dy the development and improvement of
the material, to prepare the economic future
follow the conclusion of peace.

which will

Thus, new hydraulic instal-

lations assure a more complete use of

coal,

and

that the industry of chemical products is undertaking to
fight the German concurrence.

The improvement of the general economic situation and
a step towards a more normal regime of commercial transactions are attested by the diminution of our portfolio of
prolonged bills and by the progressive reopening of discounts.
The reimbursements operated, as well by the principal
debitors as by transfeirees have reduced our portfolio of

moratorised bills, during the year 1915, from 3 milliards
478 millions to 1 milliard 838 millions.

C

have not been affected, in the same proportion, by the larger
activity of affairs; these continue to be settled, mostly

by payments in cash, which the disponibilities created by the
expenses of the state, favour.

However, the presentations

mark an appreciable progresvion; our portfolio of bills
regularly payable at maturity, after coming down to about
200 millions, approach today 400 millions.

It is a sign of

the renewal of commercial credit which we are trying to
develop.

This renewal of credit is beginning to show also in
the domain of the international commerce.

have registered

the abandoning; by certain american houses of exportation,







5.

rose to over parity with our money.

At first it was a case

of exchange on Spain and New York, some days later, on London,
and in the first fortnight of 1:ay, on Switzerland and rcandinavian countries.

This crisis is one of the inevitable consequences
of the actual tragic events.
suffer it.

All the belligerants have to

Our enemies, although they chose the hour of

egression, have been the first to be affected.by it. As
soon as lovember 1.314 the mark registered a loss of near
10(ii; on the place of New York; the depreciation attained 12
to 13 ;i;

in February and Larch 1915; after a lapse of time

it surpassed, in July, 1'40;

it was, at the end of 191b, of
was

about 20

At no time, nor in any neutral plaee,/the com-

parison of the French exchange with that of the belligerents

unfavorable to us, although our enormous purchases abroad
made us debtors in a considerable sum.
In the year l'H15, our importations exceeded our

exportations by 5 -illiards 52 millions. This cases the
unique difference in our economic balance; and is the cause
of the momentous alteration of our exchange, which a renewal
of our nx usual exportations would suffice to restore to the
normal.

The importance of these figures, the impossibility
of reducing them materially by reason of the needs of the
National Lefense, have not allowed us to treat the crisis of
the exchange by the usual methods.

Neither raising the amount

of the discount nor gold sent to creditor countries, to cover




6

the balance of our engagements, were remedies to apply without serious inconvenience.

Considering the circumstances and the state of the
capitals market, a rise of the amount of the discount would
have been impracticable, wkwrwais It risked oncroachment upon

the renewal of affairs and the re-establishment of commecial
credits which we had the ability to encourage; the sending
of gold without limit, would have led us to reduce imprudently
the metallic security of the circulation, without any other
res=ult than to possibly precipitate a crisis instead of retarding it.

It has been shown that such exportation of gold

would have been an unsatisfactory method. Therefore we could
only try to attenuate the effects, without compromising the
big national interests of which we have charge and without
weakening the possibilities of the aid we are lending to the
`rate_ and to the Allies.

From October 1914, we have applied ourselves to reestablish and extend our relations with our foreign correspondents, so as to afford to the international commerce, means
of recoverment and payment as complete as possible.

pres-

at

cribed to our Directors to receive/the paying and the discount
departments the bills drawn on most of the Allied and neutral
countries.

We informed them at the same time that we would

furnish them, on demand, and at the most favorale rates,
all remittances on England and the United States.

During the

first weeks cf war, when by the disorder of the market, the




7

exportatdus could not realize their exchange but with great
loss, we came as buyers, so as to allow the re-establishment
of more regular rates.

At the beginning of 1915, we had thus constituted
an important provision of exchange, With a view to the
needs of our customers.

The general tendency to a rise, which was affirmed
in the first fortnight of Larch, led us to extend the circle
of our intervention.

;after getting the certitude that the

exchange operations, treated at our desks, could not sufficiently influence the rates, we judged it useful to refer
to the direct sale on the same market where the quote is made.
The means we

of did not permit us to bring back and

maintain the estimates at a price near par; at least could
we, to a certain extent, straighten the movements of the
market and help it to adapt itself progressively to a state
of thiggs which were so new to it.

In the first days of June, we began to subordinate
our sales of exchange to the justification of the commercial
needs, so as only to proceed to a good end.

This decision

was inspired both by the desire to reserve for the French
Industry and Commerce the limited resources which we could
deliver to the market, and by the care 11:)t, to contribute to

exaggerate on our place the arbitrage operations over which
we had not control.

However, we only advanced the psactice

of resolutions sanctioned in a conference of Bankers, held






















14

Operations for account of the Treasurer:
Fr 42,717,d00.000

Credit

42,765.900.000

Debit
Toyal

In 1914 it had attained

85,483,100.000
31,089.800.000

These figures include the payments and recovery ents of the

accountants of the Treasury, the turnover of the funds by
the Banque de France in Paris and in the Provinces for account of the Treasury, the remittance of bills to the
Receiving Teller, the recoverment of postal orders, payments
by the Treasurer and the payments of coupons of the Treasurer
over hie desk.

All these moveIents of funds are by virtue

of the law od November 17, 1897 effected by the bank without
remuneration.
The $54; Natlonal Defense Loan

In conformity of article V of the same law the Bank
opened without remuneration nor commission of any kind its
paying teller cage for payment of renter and French Treasury
values.

Circumstances made it the banks duty to give to

the state it
Defense bills.

help to coperate in the payment of National
The mann,r in which the bank fulfilled

its duty is clearly established by the results obtained.

About one fifth of the total subscriptions to the

National Defense loan has been hamaed through the Banque
of France for a nominal capital of nearly 3 lilliards-exactly 2.963.568580 Francs in 300.798 subscri tions.




16

The balance of our current accounts

of depoeite bas ben reduced of:

Ir.

That of Mille in circulation, of:

657.(.)66.000

1.077.313.000

In convidering the bills reentering
the circulation during the Period of
the Loan, we may consider that the total
entry of bills has attaJned more than:

PR. 1.500.000.000

In confomity with the disporitions of
the article 3 of the Convention of the

21st Fept. lca, by which the state undertakes to reimburse, in the shortest delay
possible, the advances made by the Eank,

either by means of the ordinary resources
of the budget, or on the firet laans, or one
the extraordinary resources, which it may have,

Pheeireasure reimbursed us:

2.400.000.000

And the ba2ance of its account presented, on
the 23rd Dec.

,

and augmentation of

PH.

319.992.000

National Defense Obligations and Bonds.

The amount of Ob3igatione pubeeribed through the
interrqediary of the Bank isI




Paris:

Fr. 249.601.600

310.73.300

Branch offices:
Total:

...

560.324.900

17

The rank agrees to advances on these Obligations up to a concurrence of 80;; of their value.
.)Hrt-ng 1915, the fr-lount of Nonds subscribed or renewed throurh

the intermediary of the Banque de France 'as:
Iaris:

1'R.

Branch offices

882.113.600
1,01::.082.900

Total:

1.901.196.500

retallic Reserves.

This year our metallic reserves show an augmentation particularly
remakkable, only with our gold stock.

24th Dec. 1914, cash in had amounted to:

PR.

24th Dec. 1915, it amounts to:
ray an augmentation of:

Gold in hand is passed froir.:

4.514.400.000
5 431.400.000

R.

917.000.000

17/1.

4.15E.500.000

to

5.079.700.000
Say a net alTrentati on of

whereas the money in hand has become from;
to:

921.200.000
Fr.

355.900.000
351.700.000

Say a diminution

The augmentation net of

f:

4.200.000

1 millions of the gold in hand, shown

by the two tables of the year ends of 114 and 1915, represents
the overplus of the entries on the

rive total entries of

gold hare been considerably more important; trey attained



:

13

1.467.20C.00C frF. and thet of the

e66 millions,of which

the coenter-Tarty was found among our disponibilities and credit
abroad, which figured at the end of 1915, for 988.127.089 fr on
our balance-sheet.

Nearly the whole totality of these 1.487.200.000 francs in
gold - exactly 1.Z40.725.00C fr. - have been brought voluntarily,

without any pressin6, by the Country itself, at the first appeal
that the :;inister of Finance made, on the 2nd July.

immediately opened, in saris and it

The Bank

branch Officee, special

bureaux to receilie the gold.
The Individual reserves of gold money a.rc

so considerable,

and the patriotism of the owners showed itself with such continuity
that the ,;old paid down, surpassed at one moment 1G0 millions

in one week, and after various changes, again attained, from Dec.
9 to 15, 24 weeks after the opening of t'ie first bureaux, upwards
of 90 millions.

In some regions, on the example cf !'arseilles, special

committees were created endei the name of Comit4s de l'Or et des
'Eons de la D4fenee Nationale, and contributed upeerfully to increase
the Subs paying down of gold.

Cur silver cush in hand shows a diminution of e.2°C.000 frs.
To atLenuate the crisis provoked by increased cash trensactions, and the undesirability of dividionary eoney, not only did
we immediately put into circulation as soon RF it cerne into up,
all meneyn recciece:, but we ured ue ell of our cenetituted stocks
of reserve before the war at the Central flank RF well as our Lgenc$es

It is thus that a sum of 55 millions divisionary money was given out

eeele,.


17
ind

7;e have the assurance that the 1:int will be sufficient

to answef the needs of the transactions, which it was often impossible to face without the initiative of the Chamber of Commerce.

Incoihg cash the movement of cash as folloow:
kax

0

on
079 700 U00 Xs Dec

kin

3

906 300 000 on Ef'ly 15

4

:,40

Gold:

Average
Silver
Lax

306 00U

378 200 000 on March *0
700 000

Lain

351,

i.&vg

Deo 84th

368 600 000

"

Total incoming cash in hand:
;.:ax

431 400 000 on Dec 04th

win

4

28L 600 000

Avg
Page 43:

5

4

709 500 000

"

1 4y lb

Interest rates - aiscouts and advances
emained fixed respectiveby at 5/? and C;0

DIFCOUNTF:

Commeccial portfolio
The discounts in Paris, at branches and aurilfsry bi'reau

brought 2 903 000 for 2 823 80(1 000
The portfolio discounts have attained a mf,,mimum on
The minimum 212 7C .0 COO on Feb.

Dec. got 1915 of 394 800 000 F.
10th.

Notes



have
rixIsput been discounted in Paris during 1915 as follows:

Notes of 5 and 10 France
10

"

50

g

38 982
155 21,4

18

Notes at $0 and

100

Prance

121 925

I.

t

329 260

a17ove 100 frp..ncs

The proportions of small notes of lees, denomination than 100

francs was 49%
Bureau of direct accounts:

Page 44

Tc render our services more directly acceispill.e at Paris
we r.,..ve opened to commerce and industry a bank central in one of

our Yuildings Ye. V rue Daillif, where are treated discount
adva.nee 0!icin is of assitance nnd interest to industrial and
business people.

Total operations of this 17lrea during 1915

was 278 367 000 Fr.

On Dec. $4 1914 the portfolio of TWIDI Yoraterium Notes
which hed atteined 4 476 000 000 was reduced to 3 477 683 300
On Dec 24 1915 it was reduced to 1 838 376 500.

Page 46 treats upon love of tradition in handling the methods
of business transactions according to legal degrees issued from
time to time.

Pcge 47

At Paris only

(

the Paris Bureaus only)

our port-

folio contained at the beginning, of the year 538 538 Notes

for a total of 2 078 982 215 francs with more than $00 000 debtors
This work has all been handled expeditiouely.

As soon as the

public powers ennounce the cessation of the moratorium the Banque
will be able to face without difficulty the task which has been
demanded of it, because she will have premeditated measures to
face the liquidation of this portfolio.
le have received over the counter from holders of accounts

in payable paper either in towns orbranches or abroad 439 700
notes for 806 500 000 francs.
(obligations-notes)
Advances on accounts/amounted to 3 238 000 000



19

The portfolio avances on these notes has ander,40ne t e
ind variations:

Max
Min

Pr 1 156 800 000

Dec. 22
Nov 24

It vas on Dec.

562 000 000

24 1915

1 L52 800 000

Inx/01 1914 the extreme figures had been as follows:
Lax

937 000 000

Min

697 GOO 000

Circulation of Bal:k Notes:

The variation of the circulation of bank notes have been
as follows:
2L6 400 000

Loc 24 1915

Max

Dec. 1

1:115

14 291 000 000

Min

Dec 30 1914

10 LGL 600 000

Detailed description of the denominations in circulation on page
50.

Page 51 refer,: to the delays in zettinr Bonk notes printed and
show cities in France where this delay was helped to be overcome.
The lank has purchased a piece of ground 11:Ion which will be

erected a plant for printing tills gnd a new 10 frnce note is
soon to to issued which will be slightly heavier in weight but the
same size.







Paris, April 17, 1916.
t*.t41%

Dear :r. Strong:

I very much regret not having been able to reply

earlier to the kind letter which you addressed to me from
London.

Knowing that you were to stay there only a little

while, I have awaited your return to America before telling
you of the pleasant remembrance which I keep of your visit.
In the course of the negotiations which I bud the

pleasure of having with you, I imparted to you our desire to
ameliorate the state of the exchanges.
remains the object of our

This question still

onsiderations and so in order to

ef

.//
prepare a solution of it, the Chamber of Commerce of Lane and

the Bank of France have directed M. Jacques de Neuflize to go
to Now York where he will endeavor to find means to facilitate
the commercial intercourse between the United States and France.

M. do Neuflize has already had the honor of being
presented to you at the time of an earlier mission which the
Chamber of Commerce delegated to him.

I have no doubt that he

will find again a very welcome reception and assistance which

will greatly facilitate the accomplIshent of his work.
I would be much obliged to you if you would be so good

as to acquaint the persons to whom M. de Neuflize desires to
become accredited with the contents of this letter.

Please accept, dear Mr. Strong, the expression of my
devoted sentiments.
G. Pallain.

\w`\

94:arteitie

+--

.-rai/Ce

Cher Monsieur STRONG

Je vous remercie de votre airnable lettre du lb ay.ril

et tiens a vous redire tout le plaisir que j 'ai eu it Caire
connaissance avec vous fors de votre voyage a Paris. respere
que lee relations que nous avons nouees se resserreront encore

dans l'avenir et je serai heureux si l'occasion m'est offerte
de vous temoigner ma vine sympathie

Votre lettre s'est croisee avec celle par laquelle j'accreditais aupres de vous M.Jacques de nuflize. Je profite de
cie nouveau a votre bien cette occasion pour le
veillant accueil et pour vous remercier cie l'aide que vous
voudrez bien lui preter Bans l'accomplissement cie sa mission
Veuillez trouver ici, cher Monsieur STRONG, l'assurance
de saes sentirrwnts bien cor dialement devoues

2

Monsieur Benjamin STRONG, Gouverneur ciq ],a BanquE de Reserve




Federale de New-York

TRANSLATION

BASQUE DE FRANCE

Paris, /Jay 12, 1916.

Dear ar. Strong;

I thank you for your kind letter of Anril 15th, and take
this opportunity of telling you all the nleasure which I had in making your acquaintance during your trip to Paris.

I hope that the re-

lations which have been established will grow closer still in the future, and I shall be happy if the occasion offers itself to re to give
you testimony of my active sympathy.
Your letter crossed that of mine by which I introduced to you
M. Jacques de Neuflize.

I take this occasion to recommend him again to

your kind reception and to thank you for the aid which you may be good
enough to give him in the accomplishment of his mission.

Please accept, dear Mr. Strong, the assurance of my very cordial devotion.
Faithfully,

(Signed)

JFC/LCE



G. Pallain.




BANQUE DE FRANCE

Pos 1AL TieLEGRAPH - COMMERCIAL CABLES
CLARENCE N

MI0ZA/50 AT
920111111M 011rIrtat, oCNivEt,
ti

1

th St., Frcest Q Cranmer PI is

TELEWH,
The Postal Te'eprac

.45(Dr:

sAaCKAY, oPet-,-toEnr

CABLEGRAM

DUN= No.

CAle Company (Incorcoratnritranrqs and delivers this cablegram &inject to the terms and ccnditicns printer,: an the back of this blank.
DEMOS PATENT Ile. um

55Chp 24 638am
Paris Dec 24 1916
strong Penjamin Gouverneur
Federal Reserve yank Newyork A .nenvercolo

Ai repondu par dernier courrier a votre derriere lettre stop
rille bons souhaits
G Pallain

No Inquiry respeatial this niessage can be attended to without the production of this paper.
through the
 Company's offices, and not by DIRECT application to the sender.


Repetitions of doidifful tUde$011Npeld be obtained
11-

ti

TRANSLATION OF LETTER DATED DECEEBER
MONSIEUR G. P.M,LATN, GOVERNOR THE BANK 02 FRANCE, TO MR. STRONG,

27, 1916, FROM

GOVERNOR FEDERAL RESERVE BANK 0.1,' NEW YORK.

Dear Mr. Strong:

I have received with satisfaction your very interesting letter
of November 14th.

Its dispatch to me had already been announced by a

communication from Mr. R. H. Treman, accamoanying the series of documents for Aaich I thank you for havin.2. them sent to me.

I have had a translation made and studied it and, since you are
willing to authorize me,

I shall nerhaps make use of your kindness to

make clear at the proper time certain points which leave some obscurity
in 112

mind, but today I wish to discuss with you the question on the

subject of which I have formerly written to you, as follows:
tirr

e recinrocal cooperation of our two institutions

er

the

initial development of most intimate financial relations between our
two countries.

Ls you remarked 'in your letter, the state of war does

not permit us to allow for the moment a complete development of these
relations.

At least can we attempt the establishment from now some basis

of experience which will render easier in the future extensions justified
for our resnective interests.

Also the time seems to be favorable, if I

can believe the information in the newspapers which reaches me even today,
the Federal Reserve 3oard has already authorized the Federal Reserve 'Banks

to appoint foreign correspondents, and your establishment would have
selected the Bank of England as corresioondent for the United Kingdom.

1

scarcely need to remind you hoa agreeable it '.could be if the Federal Reserve

Bank of New York would negotiate an arrangement of the same character with
the Bank of France.




2.

Liunderstand the two objections which you make to my first
proposition.

-2he scruples which the Federal Reserve Bank has,not to com-

pete in the American Llarket with affiliated banks for the direct purchase

of foreign bills is absolutely justified.

I had only looked at this com-

bination as a means of transfer of your funds, but there is no obstacle
that this transfer take place in the form which you indicate, that is to
say by chec

or cable purchases on the exchange market, and of which we

would take care of the proceeds.
,e shall likewise accept charge, as l have offered to you, of the
investment as soon as put to the credit of your account in bills of trle first
t

order (prime) at 90 days maximum, created for commercial purposes, duly accepted, and of which we would guarantee the payment at maturity.

Ls rapidly

as these bills are naid, their proceeds would be reinvested in the same
terms as long as we have not received your instructions to the contrary.

Then when you feel that you have to proceed to a partial or total liquidation of your current account with us, we would pay your orders on the Bank
of France, negotiated on the American 1,_arket,until your credit is exhuasted.

It should be understood that the Federal Reserve Bank of New York will
apply to us an analogous treatment and that our account with it would function
under the sane conditions and with the same guarantees.
';e would then be readily in accordance on this first point concerning

the opening and the functioning of our reciprocal accounts current.

Your second objection is on the necessity of an understanding in order
that all transactions which shall be undertaken between our two institutions
be based on the gold standard.

The balances held by one with the other, or

the investments made by one, thanks to the intermediary of the other, should




3.

always be able to be liquidated either by means of normal exchange or by
shipments of ,old or by setting aside of gold deposited as the property of
the creditor institution.

Here again 1 think I am able to tell you that such proposition
would have a chance to be accepted by the Board of the Sank of

i'rance,

at ithich I ought eventually to take the initiative, if you believe it

possible to be in the way of realization.

Nevertheless, as you have al-

ready remarked, an engagement like this should be limited at the outset

for example to 30,000,000 or ,A0,000,000.

This limit could be fixed by

cable.

Let ine hope that we are no longer very far from complete under-

standing and that the few objectionS all of detail, which this new proposition may suggest to you, will not retard the conclusion of a practical
understanding between our two institutions.
In the hope that your health will soon be entirely reestablished,
please believe dear Lir. Strong in




most co.-dial sentiments.
(Sg.) G. Pal lain.

Paris', le 2.r.:th

August, 1)13.

Dear Mr. Stron::

Year letter of August let just reced r.e or the 22nd
leprn t':-.at your health is
I am very zird t
after a great delay.
a litle better and I hope tl-t soon you will be col::-letely recovere-.
Let me thank you again for the very kind reception you
extende to par delggate in New York ant for the cid you secured
for him, not only through the Fe:eral Reserve Bark, but also through
Your cooperation with him has
frierds.
your nLulerous
been extremely helpful, and you are res-onsible to a gront extent

for the re-'ts gained by

.r.

do 1:euflize.

Your leter referre:, to our efforts toward developing -L::e

have effectiveuse cf cecks for the settleert of accounts.
It has already given
ly undertaken a campain for that purpose.
still are very far from those we
us el-Icouraging results, but
It is ver:- difficult to change the cus.tos of
desire to obt-ur..
'-he bank note is so corvorco'.intry ir cuch ntterF... as t:lecc.
cr...etoed to it, after .::ore than a
o
iert -_-hd our 1-):1-.)le are
it
is neeees..rily very slow,
century of use, that the

is necessr

to eke many 2recautions.

At hole, it i2 not suiteble to talk ill of oar old
toms; they are a racial charact:_ristic and a prodet of our evolu'te ou7ht to be abl:T to carry, in crises, e total
tion in history.
per
erled
of ftducirry circul,ttion

noetary

relon

Ilowever serious t'le

is oftrn lost 51. :ht of it t'ne --precia'ior. ore hold.. fOr the presCoraider the fact that ir liFe of peace, we f.ve
ent situation.
already a monetary resource of abouttillial,000,000,009, nearly
},4. 6,0')0,000,000 in hills and
ore t:.:ar.
5,010,7.70,On
The aiti lee. in the Americ_n lvIpers Jive rle to 1-elieve
:71-atly
I
:ve met difficulties of the sr -re kind.
.:tes to
intnro:24ed i7 your efforts to accustom the Nnited
ail
wool
hill of each; age and the acceptance
I take
the Federal Peerve.Bank to give more complete results.
sedring you several copies of a little pamphlet of
reel

6.1..

we hr,"-..e edited, and I will 75% you to send
whenever you wish, a copy of your general rules, _..mended to
no inportance whiz::
1.2.test

of

sf,:Tte,

!7.5

w,_11 as the mwisur.7..L

for ±.fle devele

sy5tc7.7

For the cooperation of our two houses, r. de i!euf1.-1.z
with you on
he
has :iven me p' rt of the ,:c!-vrs,14cs
Pari5,
eo--te] toce
this subject,
i teas
er:: interestin
oijit of
I
1r.st ':inter.
which you hel at th t time, and I realize Flit. satisfaction
develert.
progress




.6. 9

....

Unfortunately, the v: r, with the obliEaticns and responsibilities lArich it 1.poses on ue, does not allow us the liberty of
trying your plan of union and coordination.in the efforts
our
two banks toward assuring mere stability in the mutual financial
accounts between our two countries.
Besides, your Federal Reserve
Act does 1.11- allow it, I believe; at any rate, not the actual application (*).
Perhaps, however, we can beZin immediately a preliminary step, limited in size and purpose, but elieh will allow us
in one way or another to estimte results that are practically
possible.
You could bvy in the American market, for exa::nle, as
much ae twenty Iilliono of drafts on Frsnce, the redenpton of wich
we will assure.
The pro.:ue if it would he carried to the credit
of an ac cunt we could open with the Fe,er,1 Reserve Bank of New
York, W. 11e waitir,..; to use it for discount of paper of te first
quality.
If it z:.ould be.co7-c necessary for yclA to pl,ce on your

credit an amount greater than the actual balance, we would rediscount a part of the port-folio eetablis,ed for our needs, in order
to complete the sun intended to honor your drafts.
For this first ,-)cration, and heir. :7. inthe present cir-

custances, wc. would be inclined to assure you guarantee of ex-

chage.

71-lis guarantee being susceptible of undergoing ::c1J remittance, there would be ns opposition on cur ..)art to having this
old denosite in the
of Fr,-.nce in the name of the Federl
Reserve 13f-:r
of New York.




G. Pallain.

,ar Mr. strong:

Your letter of August 1st reached me only on the 22nd after a considerable delay.

I am very glad to learn that your health is improving little by

)III.

ittle and I pray that you may sooner or later recover it completely.
Allow me to thank you again for the kind reception which you have j.ven
to our delegate to New York, and the opportunities which you have secured for him
as well with the Federal reserve bank as among your various friends in the financial world.

Your help to him has been very valuable and we owe to you in great

part the results which Mr. De Neuflize has obtained.
Your letter speaks of our effort to develop the use of checks for the
payment of accounts.

Vie have, in fact, undertaken a campaign with this object.

It is already yielding encouraging results but very far from those which we should
like to see.

It is very hard to change the customs of a country in such matters.

The bank bill is such a convenient instrument and our public is so accustomed to
it after more than a century of use that the change is necessarily very slow and
we mist work at it with much care.
After all, one should not criticize too much our old customs.
characteristic of the race and a product of our historical evolution.

They are

To them

we owe our ability in times of crisis to carry a very large amount of bank note
circulation without our monetary health being seriously involved.

This question

of proportion is often too mach disregarded in comments which are passed on the
present situation.

Do not forget that even in times of peace we were using

about eleven billions of money: namely nearly six billions of notes and more than
five billions of coin.

Reading your American papers gives Le the impression that you are meeting with the same kind of difficulties.

I follow with much interest your efforts

to introduce in the United States the commercial draft and acceptances, which

would permit the Federal Reserve System to give a more complete service.



-2-

I am giving myself the pleasure of sending you some copies of the little propagandist pamphlet which we have issued, and since you are good enough to
offer it, I will ask you to get for me your general laws brought down to the most
recent date as well as the last plan for developing your clearing system.
In regard to the cooperation of our two institutions, Mr. De Neuflize
has told me of the conversations which he has had with you on this subject and
which are the seauence of those which we had together in Paris last winter.

I

have not lost sight of the very interesting views which you then presented to me
and I note with satisfaction the progress which they have already made in their
development.

Unfortunately the war and the obligations and reeLonsibilities which it
brings us do not leave us free

to experiment in its entirety with your plan of

cooperation and of coordination of the efforts of our two banks with the object of
assuring more stability in the monetary relations of our two countries.

Besides,

your Federal reserve law actually would not permit, I believe, the working of the
whole plan.

However, perhaps we could immediately begin a preliminary operation

limited in its e::tent and in its object which would enable us on both sides to

judge of the results which would be practically obtainable.
You could buy in the American market, say up to 820,000,000. of drafts
on France which we would collect for your account.

The proceeds would be carried

to the credit of an account which we would open for the Federal Reserve Bank of
New York, awaiting the employment of it in the discount of prime paper.

If it

should become necessary for you to draw upon your credit for an amount in excess
of the balance available, we would rediscount a part of the portfolio established
through our efforts in order to complete the sum necessary to honor your drafts.




For this operation and in view of the present circumstances, we should

-3-

be disposed to guarantee the exchange for you.

As the result of this guaranty

might be gold exports we would have no objection on our part to having this gold
left on deposit at the Bank Of France earmarked to the Federal Reserve Bank of
New York.




:pith best regards, etc.
(Signed)

G. Pallain

7)

do

Dear er,

T

Strong:
Your letter of iLuguat 1st reached me only on-the 22nd after a cons''

erabl delay.

I em very glad to learn that your health is improving little by

little and I pray that youy sooner or later recover it completely.
Allow me to thank you again for the kind r000ption which you havo given
to our delegate to New York, and the opportunities which you have scoured for him
as well with tho Federal reserve bank as among your various friends in the finan,
cial world.

Your help to him has been very valuable and we owe to you in ;;rest

part the results which kr. .0e Neuflize has obtained.

Your lettor speaks of our effort to develop the use of oheogs for the
payment o.1: accounts.

have, in fact, un ortaken a oatrezic,-11 with this ol400t.

It is already yiolding encouraging results but very far from those which we should
like to see.

It is very hard to change the customs of a country in ouch matters.

The bank Mil is such a convenient instrument and our publio is so accustomed to
it after more than a century of nse that the change is necesearily very slow and
we mast work at it wither...toll care.

After all, one mho id not criticize too mudh our old customs.

They are

oharooteristio of the race and a product of our historical evolution.
we owe our ability in times of crisis to carry a very large amount of bang note
circulation without our monetary health Leing seriously irrvolvod.

This :election

of proportion is often too mach disregarded in comments which are paroled on the
present situation.

Jo not foiet that even in times of los= we were usine

about eleven billions of money naiely nearly six billions of notos and more Can
five billions of coin.
aeading your :mei-Joan le.pers gives ce the imkression that you are meet-

ing with the same kind of difficulties.

I follow with moth interest your efforts

to introduce In the United States the oomerciol draft and aoceptunces, which
would permit the Federal Reserve ::estem to give a more complete eory



4)

ti
4o

0
I am giving myself the pleaouro of sending you some copios of t::e lit-

tle propagandist pamphlet which we have leaned, and since you are good enough to
ofrer it, I will ask you to oot for me your general laws brooght down to the moot
rocont date as well as the last plan for developing your clearIng system.
In retard to the 000perition of our two institutions, Mr. De Reuflise
has told me of the conversations which h, has had with yon on this subject an6.
which are th,

soluence 01 thovo which we had together in I-arse lc..et winter.

I

have not lost F.ii3ht of the very interesting views which you teen presentod to mo

and I note with satisfaction the j.rogress which they have already mado in their
development.
linfortunately the war and the obligations and roslonsibilities

brings us do not loavo us free

which

it

to experiment in its ontkroty with your plan of

000peration and of coordination of the efforts of our two banks with the object of
assuring more stability in the monetary relations et our two countries.

Besides,

your Federal reserve law actually would not permit, I believe, the workino of the
whole plan,

However, oerhaou wo could itsoodiately begin a oreliminary oocration

limited in its extent and in its object which would enable tics on both eidos to

jud4oe of the reeults which wouio be 'emetically obtainable.

You could buy in the awerican markot, say up to 420,000,000. of Orafte
on irmnce which we would coil et for oour account.

The pr0000ds would bo carried

to the credit of an account which we would open for the Federal Reserve Lank of
New York, awaiting the ompl000ent of it in the discount of erime paper.

If it

should become necessary for you to draw upon your credit for an amount in exoetok
oho 4)

of the uaiance available. we would redi!loount a part of the portfolio ottedal-leked
6--;)

thr-iigh-car-erforts




in order to complete the sum noceseary to honor your drafts.

For this operation and in viow of the present circumstances, oe should

0
be disposed, to anarntee the exchange for you.

An tho result of this duaranty

mi. ht be gold exports we would hae no objection on our part to having tLie

.:101c1

left on decOsit at the Bank c)- France eurmarkod to the Federal Reserve Bank of

Xew York.




Ath best re4;ards, etc.

(A4ned)

s. ;allaie

COPY.

BANQUE DE FRANCE.

Paris, le 27 DECEUB.E 1916.

Le Gouverneur de la Banque de France
a Monsieur Strong,
Gouverneur de la Banque do deserve Federale de New York.

Cher monsieur Strong,

J'ai bien recu votre tres interessante lettre du 14 Novembre.

L'envoi

m'en await d'ailleurs ete annonce par une communication de L. 2.H. Treman
accomnagnee d'une serie de documents que jo vous remercie de m'avoir
adresses.

J'en fais faire la traduction et l'etude et, puisque vous voulez
m'y autoriser, j'userai peutetre de votre obligeance pour eclairer,

le cas echeant, certains points qui laisseraient quelque obscurite dans mon
Lais aujourd'hui, je voudrais m'entretenir avec vous de la question

esprit.

au sujet de laquelle je vous avais ecrit precedemment, a savoir: le contours
reciproque de nos deuxinstitutions au developpement do relations financieres
plus etroites entre nos deux pays.

Come vous le remarluez dans votre lettre, l'etat de guerre no nous
permet pas d'escomnter, nour le moment, un developnement comnlet de ces relations.

Du moires pouvons-nous essayer d'etablir des maintenant des bases

d'exerience cui rendront plus faciles, dans l'avenir, lee extensions justifiees nar nos interets resnectifs.
car, si

Aussi bien l'heure earait -elle favorable

crois les informations de presse qui me parviennent aujourd'hui

meme, le Conseil de -eserve federale aurait autorise les Banques de reserve a
»rendre des correspondants a l'etranger et votre etablissement aurait choisi




2.
la Banque d'Angleterre come correspondalt pour le

..,oyaume-Uni.

J'ai a peine besoin de vous rapneler combien it nous serait
agreable si la. Banque de _-,eserve federale de New-York negociait tti arrangement

du meme ordre avec la Banque de irance.

Je comnrends les deux objections que vous faites a ma proposition
premiere.

Le scrupule que mettent les Banques de reserve federale a ne pas

concurrencer sur le marche americai_ les -oanques affilioes par l'achat direct

d'effets etrangers est absolument justifie.

Je n'avais d'aillenrs envisage

cette combinaison que comme moyen de transfert de vos disponibilites.

Lais

rien ne s'opposerait, a ce cue co transfert ait lieu dans la forme que vous
indiquez, c'est-a-dire par cheques ou cables achetes sur le marche du change
et dont nous soignerions l'encaissement.

nous accepterions egalement de nous charger, ainsi que je vous
l'avais offert, de l'investissement des sommes portees an credit de votre
compte

effets de premier ordre a 90 jours au maximum croes pour des

besoins commerciaux, dument acceptes et dont nous garantirions le paiement
al'echeance.

Au fur et .a mesure de l'encaissement de ces effets, leur produit

serait reinvesti dans les memos conditions, tant que nous n'aurions pas recu
de votre nart d'instructions contraires.

fin, lorsque vous croiriez devoir

proceder a une liquidation partielle on totale de votre compte-courant chez
nous, nous acquitterions vos dispositions

ur la Banque de France negociees

sur le marche americaLl jusqu'a ce que votre credit soit epuise.
serait entendu que la Banque de ..,,eserve federale de New-York nous

appliquerait un traitement analogue et que notre compte chez elle fonctionnerait dans les memes conditions et avec les memos garanties.
Pious serions donc facilement d'accord sur ce premier DOLIt concernant

l'ouverture etle fonctionnement de notre compte courant reciproque.




S
3.

Votre second° objection Porte sur la necessite dune entente
pour quo toutes transactions qui seraient entranrises entre nos deux institutions soient basees sur l'etalon d'or.

Les soldes posseses par

l'une chez l'autre, on ice placements faits nar l'une grace a l'intermediaire de l'autre devraient toujours pouvoir etre liquides soit nar des moyens
do change non=d: ou par des envois d'or, soit nar uric mise de cote do l'or

depose come propriete de l'institution creditrice.
lei encore, je crois pouvoir vons dire qu'une semblable proposition
aurait chance d'etre acceptee nar le Conseil ,eneral de la Banque de France,
dont je devrais eventuellement prendre l'attache si vous croyiez possible
d'entrer dans la vole des realisations.

Toutefois, ainsi que

remarluer, etant donnees les conditions actuelles, un semblable engagement
devrait etrc limite au debut,

exemple a

or 40 mi1lions de dollars.

Cette limite pourrait etre fixee par cablodramme.

Laissez-moi esnerer que nousne sommes plus tres loin d'un accord
comnlet et

Ltle lee quelques objections, toutes de detail,

ine vous suggererait

cette nouvelle proposition, ne retarderont pas la conclusion d'u: accord
pratique entre nos deux institutions.
..1)ans l'espoir que votre sante sera bientot tout a fair retablie,

veuillezcroire, cher Lonsieur Stron,, a mes sentiments cordialement devoues.




(3g.) G. Pallain.

POSTAL TELEGRAPH - COMMERCIAL CABLES
CLARENCE H. MACKAY, PRESIDENT

RECEIVED AT

DCLIVCRT NO.

VIA I P. OFFICE, DENVER
20 -17th St., F;inest St Crannmer Bidg

The Poiti.LTelegraph-Cable Company (Incorporated transmits and delivers this cablegram subject to the terms and conditions printed on the back of this blank.
DESIGN PATENT Na 4052

32chp 43 612km

Paris Feb

15 1917

y

Time

Benjamin Strong Gouvenor

Federal ,eserve Bank Newyork, 4100 iontview Blv3
- ,
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4.40-77) 0

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vous est elle ravenue0)stop envoyoris duplicata Newyork

palla in

No inquiry respecting this message can be attended to without the production of this paper.

through the Company's offices, and not by DIRECT application to the sender.


Repetitions of doubtful words

FRENCH BANK LIKES PLAN
iancij Mobilization with America Fore-

en - Exchanges of Views Proceeding
ery Favorably
uris, Dec. 29-Georges Paliain, governor
the Bank of France, gave the following
cement to the Associated Press yester-, in renard to the report that the Bank
Prance was, like the Bank of England,

ALFRED L_ AIKEN

53 STATE STREET
BOSTON, MASSACHUSETTS

,e mace a correspondent of the Fed Reserve Bank in New York:

I

have read In the papers a despatch

I

in Washington concerning the deslgna-

of the Bank of England as a cor-

pondent of the Federal Reserve Bank
'ew York, and the allusion in the same
gram to the conclusion of an analogous
angement with the Bank of France. So
as we are concerned all that I can say
you at the moment is that in Februa,-y
t, when Mr. Benjamin Strong, governor
the New York bank, made a trip to Eue I had occasion to talk with him at
Igth about the possibility of closer relans between the French and American
arkets under the auspices of his organtion.

',Mr. Strong is a broadminded financier,

o seeks not only to organize for the
,.nt, but who knows, as Is befitting to
good financier, how to prepare for
.uture. I had a very clear impression
while we on our side were thinking
all of the situation of our finances
'd by the war, Mr. Strong was think1th good reason of the situation that
he created for his country when the
1 of liquidation comes, with perhaps
erse of the present state of things.
,-

.

nterest, like the interest of the United
is evidently to prove the maximum

ability in our financial markets and
,nt, by a combination adapted for that
,se, a too sudden change of equllin In international monetary opera"iat is why

I

was glad to engage in

,rsa,tions tending to a consideration ot
tions most .favorable

'

of the two countries in the period
exchanges of views are proceeding
,,nomic transition from war to peace.

515

1- the best conditions and we may hope
..hey will soon end in the mobilization
en,11 and American sympathies on the
!Trance."




pping from Boston Daily Advertiser.

Form 2903
Number

)me Filed
of Words

WEST
CAB

UNION
RAM

THEO. N.VAIL. PRESIDENT

CLASS OF SERVICE DESIRED
Full Rate
Half Rate Deferred
Cable Letter

Week End Letter
Patrons should mark an X opposite
the class of service desired; otherwise FULL RATES will be charged

SEE BACK OF THIS BLANK

d the following Cablegram, subject to the terms
on back hereof, which are hereby agreed to

C 0 P

Paris 25.

Benjamin Strong,Gouverneur,
Feder-:.1 Reserve Bnnk, N. Y.

Vous remercions de votre aimable lettre cinq mars et annexes. Stop.
Etudions memorandum repondrons trey prochainement.




Georges Pallain.

POSTAL TELEGRAPH
RECEIVED AT
420-1

,

Ernest oc Graumer

p.00 N E. MAIN *Rae

TEL
The Pet,

COMMERCIAL CABLES

CLARENCE H. MACKAY. PRESIDENT

CABLEGRAM

OILIVISNY NO.

-,,leRraph-Cable Compan tlncorporateditransmits and deoers this caolegram subject to the terms and conditions printed on the bac? of this blank.
DESIGN PATENT No. 40529

23 CHIT 1023E1. 69

IS APR 7 17
BENJAMIN STRONG GOUVERN1UR 1.EDFRAL PESERVE BANK OF =YORK 4100
MONTVIFW BLVD DENWIRCOLORADO
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PROFONDFXENT TOUCHE DE VOTRE EF,SSAGF van FIPRIME NOTRE JOIE DE
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VOIR L AMI IE SECULAIRE QUI LIE LES FUTSUNIS TT LA FRANCE ABOUTIR
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A
TAGQt Co-el.a.
kwA ci4et0
bill /16u,
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k,. i 4 -6:11.4AFN CORDIAL
DE JUSTICE ET DE LIBERTE STOP.VEUILLEZ CROIRE A MOST
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au c:clitt eau ei -9 (07771-t 1
fa efv,y,t4,..t cu. I . (
ATTACHFITNT PT AUX VOFUX SINCERES qUE JP FORME POUR VOUS
GEORCTTS PALLAIN

No Inquiry
 respecting this message can be attended to without the production of this paper.
through the Company's offices, and not by DIRECT application to the sender.


Repetitions of doubtful words shou

PV.

17SIN

COMPAGNIE FRANCAISE DES CABLES TELiGRAPHIQL14
PARIS.
BOULEVARD MONTMARTRE.

25 BROAD ST.. (ALWAYS o9.)

TIALAROMIR 441 442 Snow.
PULITZER BUILDING. PARK ROW. TALC/ROAM. 2049 4224.4..

LONDON.

3 MEPCER STREET.
12110 1319100
.

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24 ROYAL EXCHANGE. E. C. 2 MINCING LANE.
NEW BRIDGE S RECT, E. O. BALTIC MERCANTILE AND
24 SOUTHWARK ST , S. C.
SHIPPING EXCHANGE, E. C.
38 VICTORIA STREET
ESTMI NETER.
HAV
46 4,U
CHILOU.
BRE T:
f 30-3 2 RUE DE CHATEAU.
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ORLEANS, MASS.
WESTERN AGENCY.

9ST. PIERRE. MIQUELON.

NORTH LA SALLE STREET,
CHICAGO. ILL.

WEENEY,

TIME

DATE

1,l3GRAP11 CA BLR.
ollowing MESSAGE is received via 1-71
snhjstoit to the
°auditions printod ou tl back hereof, which are satified and agBeed to.

89" PARIS

29
E

ASSURE;

k;T: TTABLii;

R ,

NOUS

S I H.F:URI.TX

R,

D C F FRI R

S

BLDG 17

AU F IL S L A CCM.; IL

AU Fri:Fill,

7.TOUS

STOP B IF; s CC RD TALiCiP1\11

PALLAIN

Digitized
ce the for FRASERerrors or delays, please file any answer to this message at one of the Comrisk of
http://fraser.stlouisfed.org/
offices.Messengers Louis be summoned by Telephone for Cablegrams FREE OF CHARGE.
may
Federal Reserve Bank of St.

7.

FEDERAL RESERVE
Office Correspondence BANK OF NEW YORK
Date

May 31, 1917.

AP'

To

Mr. Strong

Fr

Mrs. Robinson

Subject

Cable to Mr. Strong from

1111111F

"Rest

M. Pallain

reception

we should have been so happy to offer to the father.




Very cordially,

Georges Pallain.'

that

*OAafivue
-

dt.4-*4"---4^




a

104.0

4Z--/

X44-47'

Litat.i, yea

+

Cher Monedeur Strong

J 'ai recta avec grand plai sir

vi si te du Major MURPHY, qui m ' a remi s v

aimable letre du Ier Juin
Comore offici;:r

americain et comm

representant de la Croix Rouge des £ta
a qui nos eoldats doivent tant de grat
it a droit k toute notre sympathie ma
a un titre de plus, puisqu'il est votre

et VDUs pouvez e' t re assure que nous no

efforcerons de lui rendre le sej our de
aussi agreable que possible ,

Veuillez agreer, crier Monsieur ST

1 ' as SU ran ce de me s sentiments bi en co

merit devoues

gonsieur Benjamin STRONG

Gouverneur de la Banque de Reserve lec

de New

BANK OF FRANCE
Secretary of the Conseil

Extract from the minutes Conseil General
Session of the 26th of September 1918

Recalling the previous conversations with M. Strong, Governor
of the Federal Reserve Bank of New York, concerning the conclusion of
direct relations between that Institution and the Bank of France, M. le
Gouverneur communicated to the Conseil the resolutions of the meeting of
the directors of the Federal Reserve Bank of New York tending to the opening of a reciprocal account-current between the Bank of France and the Federal Reserve Bank of New York.

By reason of the interest which attaches to the establishment of
financial relations between the American Federal Reserve System and the
Bank of France, M. le Gouverneur thinks that the Conseil would certainly be
disposed to receive favorably the request of M. Strong and would be willing
to authorize the opening of an account of the same nature for the Bank of
France on the books of the Federal Reserve Bank of New York.

M. the Gouverneur proposed the adoption by the Conseil of the
following resolutions:

The Conseil General of the Bank of France:
"Being in possession of the proposition of the Federal Reserve Bank of

New York tending to the opening of a reciprocal account-current is happy to
give its authorization to the establishment of business relations between
the two Institutions and to thus bind more closely the Franco-American ties
in international financial affairs."
The Conseil fully agrees to the Governor's propositions and adopts
the above resolution,






Paris, Octobe
General secretary,
1110

BALI: Oi FRAECi,

GICTSONak

0/'0'011100
Dear Lir. Jtrong:

'

Llsewhere I reply officially to the letter in which you
kindly sent me a copy of the resolutions of your directors on the
subject of opening a reciprocal account-current between our two
oanks.

But, I wish to tell you personally how happy I am at the

ueginning of a realization of the ideals which you and I have held
since 1V16.

While the American Republic was still outside the great
..tlropean conflict you had a very clear idea of tLe community of

iueals and of the solidarity of interests existing between our tr.o

countries, ana you nave hoped that this solidarity might oe confirmed
in the financial world.

I know with what perseverance you have

devoted yourself to the lursuit of this aim.
Believe me, on my part, every effort will be made that

arrangements of which we have laid the foundations shall develoE
and end in the establishment of closest bonds.
We will consider with the greatest care all suggestions
wnich you were good enough to make us, when circumstances permit us
to take up again the pledged negotations.

In the mean-tine I will make a study of the text of your
agreement with the Bank of .Lnglanu., which Sir Brien Cokayne has sent

me at your request.




(2)

General Secretary to :dr. Strong.

Oct. 1, 191.)

I regret that your health has not permitted you to come to
Paris this summer, but hope that it is i :proving more and more.

It

would have ,,een a pleasure for me to take up with
you again the talks

which I treasure as a pleasant memory.

You are, yourselZ, i am sure,

experiencing a lively interest in seeing France at this time.

You say

that at such a distance it is difficult for us to comprehend
the enthusiasm which animates the American nation.

dust the same, I douot if

you are able to entirely calculate the feeling which exists here
in
regard to the United States.
army Ueveloi

The glorious exploits of your valiant

more each day that cordial sympathy towards our generous

Ally.

Very cordially yours,

G. rallain.

1:11{1/AL.p







-ran-ce

-3,e.anytte..

29 Jan v

/QZ

4111

ae r Monsieur Strong,
s'N,-;?491
Vo txr- slealkte1 VIC 3 I De cerabrie m est
bie:i parvenue,

ainsi qu'fi),\1' ouv rage du

Pro fesseu r KEuriENBIt, dorykeNW'ra' a ,::ongai t
,aAt

1 envoi

Je viens deja de lire la. remarquable preface dia-i s laqu el le vous presen tez au

puLli c cet expose du eye teme de reserve
f ede rale . L'ipiorance (3,11 1 'on est gene ralement

- en =,'u rope su rtou t

- de

evoiu -

ti on du regime ban cad re des :;tats ii,iis,
m' a comme vous souvent f rap pe

L' ou v rage

vierit a point pour eclai rer
cette question si importante

de M

Je vous reme rcie u'avoi r pense am

le faire connal tre et je vous prie de croiie
cher monsieur STRONG a rues sentiments bien
co nil al e men t de you e a
a 1 1 NB 111641 NI 1

Monsieur STRONG

l'Yer)

TRANSLATION of Memorandum delivered to Mr. Strong by Mr. Pallainle secretary
August 20, 1919:
We are lacking precise details which would enable us to determine exactly
the expense of the shipment of the gold.

In fact, we have no knowledge of the

10

present railroad rates abroad.

Besides, the cost of trans ortation is the

smallest part of the total expense, into which enters above all the cost of
insurance.

advance.

That, however, is variable and it is difficult to find it out in
Nevertheless, taking as a basis the expense of previous shipments

to Spain, we suppose that the expense for the equivalent of 10,000,000 would
not exceed the following amounts:
1.

2.
3.

From Brussels to Paris,
From Amsterdam to Paris,
From Paris to Madrid (insurance Paris to Madrid,
transportation Paris-Irun),

50,000
70,000
125,000

The shipment from Paris would be made by the Bank of France when it had
received the order from the Ministay of Finance.

It is calculated that it

would take about ten days to arrive at Madrid.
As soon as the Bank of France should make known the date when the shipment
would be made, it would be necessary that steps should be taken at the Ministry
of Finance to notify the Bank of Spain through diplomatic channels of anectv
and hour of the arrival at Irun, where delivery will be taken over by the
agents of the Bank of Spain.




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I 9 Sept emb re

9

Cher Monsieur STRONG,

'Dien recu vo tre le tt re m'annongaat
J
Lai pro -moi re tour en
vth tresee z chain vous dire Ame rique

your vo tae
n 'avoi r pas eu le plaisi r deavant re voi rdepart pour Lond re s car j 'eusse vivemen t
ra 'entre tenir a nouveau, ave c vous, des qu( s tions qui n
tiennent a coeur dans l'intert!t reciproque de nos deu




et denos deux institutions Je veux e ape re r que les

con stan ce s vous rameneron t biantot a Paris et que nou

ce sujet
Je vous remercie ue l'interet que
portez a mon e tat de sahte Je vais main te nan t beau c
rons reprendre nos conversations

4.

mieux et suis en voie de complet re tabli sseicient

Veuille7 agreer, cher Monsieur STR

l'expression de :nes meilleurs sentiments

Monsieu r EiElTJAMIN STRONG

Gouve xneu r pie la Federal Re 8-e rye Bank de New-York

,

4,



Form 2875

UNION
WESTE ECT UNITED STATES
S/GL6-AMERICAN ,141
CABL
Tiz

WESTVwERN UNION

NEWCOMB CARLTON, PRESIDENT

GEORGE W. E. ATKINS. FIRST VICEPRESIDENT

at 16 BROAD STREET, NEW YORK

2z

PARIS A693/24 34

I

STRONG GOUVERNEUR FEDERAL RESERVE BANK NE WORK

OLE ADDRESSE POUR IDEL ET NOUVEL AN 7,ES VOEUX LE S PLUS CiiAL-

ET VDUS PRIE DE CROIRE A :ES SEMI:EMS DE BIEIT CORDIALE

THIE

GEORGES PALLAIN.




79

abt,Fer-

)1( los uye_

FEDERAL RESERVE BANK
F NEW YORK

a

# /1

COPY

Paris, Cctober 1, 1920.

Dear Mr. Case:

Upon my return from the country, where I had been resting for
several days, I found the courteous telegram which you were so kind as to
send me upon the occasion of my retirement.

Permit me to express to you

my very sincere thanks and to ask you to convey them to your colleagues
and associates of the Federal Reserve Bank.
This expression of sympathy has touched me deeply.

I have been

particularly alive to the strength of the cordial relations which I have
been so fortunate as to hold with your institution and of which I retain
the most pleasant memories.

I am convinced that these relations

but grow closer and closer, considering the mutual interest of the banks
of issue of America and of France.
Please accept, dear Mr. Case, the assurance of my highest regard and of my most cordial sentiments.
(Signed)

Mr. J. Herbert Case,
Federal i'.eserve bank,

New York.




G. Pallain.

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