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010.0 No V.-R. ONG Federal Reserve Bank PAPkieS District No. 2 Correspondence Files Division SUBJECT #.S. ReE5IDEAJTS sPEclicu_ gssis-rhAns a.) coL. e. m. Hoas b) .3-64056,u , C. wELL-wEg_ ,.s.s is that the lh,s4 photo tocertify bears the sigre, and jI raph a likene3s of, the., ,n to who his mawas X:oin dale, 600ei o94A? emless meted 4va dWomaiie or consulter onii.ey: is isauti, itnAss w reofpassport the seal of rtment of Stateis impree the photograph. , /4 e eiert/ ;et/4944 iti0o9e.,;:itie_e7 ii4,44.- }0,110/(,toh,e(jeoefivx iliewr"gJa4,14gociirwrkke]d,4~. e,d/e/ w A,9 -wwie -Z, 41/1/77,7d - 4," erme bfootent5y/ heir Ine ofootenky,/ _fob/eel oivz:sit" Mame ofeote.,:by/ /Iran,* ofeetel rb;xi /o0ject OeiliehddAide44e./1;,,ro(1Aw;d' ,ear00, wereddwikadede//o5eei49/a4),eowekiii geame4io.94;wield ,wv--19eeree.a/ie_O 4VONee676i% Gig0r.ee; eff6cineidrif yAv: nr6 4/ .4/,/z1449/0( i-Kffiy,,4744/ / V.4,i0e/eafrit 1/ c grz 7. 7 .4 (4,w/ 9/ y/i/% ave%413z1 w7,60/ /4/41-erie)6(1474714.\94,7~eg/.1,/ A/4 (4e; Z19 _ J,(--/744Vd wyee(lAr. iyiKrid,Axr466i _976 ferAi /---. y(671 fr 49'0 7,4y y weat,/, //e YfdiAe4 ce,i1)*.4", (77 tte-e-V; ,1/1 4444e,w,,, Y/r/.e2e7ea/YAI , ..._ree/we A I r, I Ft*, 0.0AL De4, 0AALD4 let 1`7,- 'V 7 AI Col'istent General JA N 25 ;916, 1 i;or. sr! Clmeral et Travelling to the UNITED KINGDOM. SEEN AT THE BRITTSR CONSULATI ORNERAT.1 NEW YORK U.S.A. G DAY OF ,.401,01,EGenerat 411/ and counter. 40. IO - York,. "V4 9. - ,itili sptcri 1 it ,...,,,0.--.....;-______ .......... ::4* Agent of e rtrnent of E R I S. - -BEAR-ER .IS Pr 1 7 FEV. 19/6 ) °I ' , a 40 ,....._____. 1...... r 4' FOR PURPOSE OF -).... "'sent add* VOIWIlille gal ' COMMISSARIAT spEcIAN DIEPPE H4 MIPS 1916 MBARQUEMENT/ U4(de4 /01rldy7 y yfy ff,,,e4(4riageyfreio,A X:47 /44,1feineitXue.44e, 'te 7A/f4). ffry,e(o#4,__J/;w}A- 4.i jo60 /e 4;61W./ j r7./riwel}6/4/y-464)>/,erwcri-iece4r - - d(yer , Sleio ( I 2 ire,efed(----/ ger 7(% 41011 0714 -- ( 141/46e ,/ ,aa/ /,r11(e11(.1; air,M? C_(__7,01e/ ( 741 1,/, *71 ad. fil/f,c0 (Ay,/ -0-4/re cO' 0fea,"/AbN/(14/10/e-e-W,6 4/Wel, 4/4 fef /riff 711,t.e/4 et, APITR *WWII _ / .tmegi :21777:7C, /,.., , :(41.44 Gezien op het Consulaat Generaal der Nederlanden voor legalisatie van de hand teekening van e - New-York, den De Consul Generaal der Nederlanden ..S OF ALiERMA, 19 ei3O/1.44brg -d # 4,:fieeJger 1 1111/1 ieed ytoe ti 1 49,/, 41})7 %yid, v /7/ley /4- 6 ,(ed;fy 74e4iire, 1,4,f %WS y 41,106V4ice,/ (249gelA/M9 /dal /// /77e(f /7 A LS OF AUDI-GA, 19/I , 141s is to certify that flats raph bears the re, and 81R4n to whom his likoness of the is issuil tiAss w er. passpor.t -taient of - State heisseal or t',3 impre 41104 photo i,a eootion.4iforsirmonas 4.one &de, le9e/ess meezeied .Tez e/O/omezifr or consztleerohie.e2: v*te% phbtograph. et/ eadj farodoseeeji&azi- /ie4,%e,,Cit/)eed,eay/4/ioemdlee.;:doee /ePwir./7/Z, te*-i,r- }-1-14eee, 4 (name efootemSy) nfvt. /grez,A, ofavelm/ ) -st,e;ret ofot.iet S. ofewtenr>y,/ a/ligit) /,terwe of roreleby, /./net ev'e7f/t) ,14)4740e),/eol0.4,,,,4(4Car / 7,1.,70040 ,etrei#09-weredda7%r ieZ+,0".110/1/4e0(01/4 .0109-M41(//04,~0a7/ A9t/Aioiene00-1/1'/ NW/14 0/701/7 (WIGO' 40/61(/,Id2/W1/'/ c_ 70jg4/01,d09,/7/Ideeipe_/frae%74441/1 k7,, e4/6 60 /feeAl.V eye, ,74 //yee37, 0/, / /27/9, ConitOnt General 1r44 ce.AN 25 ',91K -otilr et W.,- 7,- eantrall Travelling to the UNITED KINGDOM. SEEN AT THE BRITISH COMSULATX OBNERAIi NEW YORK U.S.A. 11 DAY OF 'General and counter -nv York, at the daunt of E 1 1VZZ:1"6 FALVO kl R I S. I E rL 40/..f.G T?...... !-BEAR-ER .1"-.:1 Pr 1 17 FEV. 1916 , .v*.....--- * fN E iiiiifillf-TED / ViA 1-3C0.1 f 1 FOR PURPOSE CF ;--- This _ua British he bzareP prOCe* din to ourpose 1 ibt tat al P411 b, tion et 'tor the Thi noun Mist COMMISSARIAT slit= DIEPPE MIPS 1916 fi) EMBARQUEMENT 0 9161 ARA L r 's I 7Vt2 1V\ILI d g. 110s' thrl V d 90C13" OIJAO SX4'3 15 AS.8.1 101.Ittl00 OT11- ilAtattoolrop* ftNi.6 ' .7 'HT d10 AVG 311101 -:-711-7tS:1,11 !Malin arrinftwo kI11IU 'KW DAILY ag,LIg.a. im VNaSS will 0/ 6upizaav.ty 1.Sia e ,e (MS -WO Of 430d Nkfr7r114-°/-4"-; irty .l104,ainsuo Gezien op het Consulaat Generaal der Nederlanden voor legalisatie van We-Pi 04-1.-z, de handteekening van x\sikhAL 04 New-York, \ y den 3/ , De Consul Generaal der Nederlanden \ Z' PP, Je - AtJ., , E3 ----TGOIrernpr-Benjaztlin Strong9 62 Cedar Street, New Governor Strong: 'forDear Tii.anlc you for your letter of August 14th/giving your opinion in regard to the exchange situation, sincerely hope sore way out may be found and I believe there will bee McAdoo is a1J:4 to the situation and believe he will cooperate with you in / every way possible° 7akthful3.y yours, I. Manchester, Massachusetts August 16.411, ' 1915. 4,q7A4-e_ Form 260 - G EORGE W. E. ATKINS. VICE, RECEIV5 No. NL CA RLTON, F TIME FILED _ BELVIDERE BROOKS, VICE-PRESIDENT CHECK * SEMI) mc following Telegram, subject to the terms Oa back hereof, which 4 are hereby agreed to 9L5 .") J:Tf.'211 ,2a 7.f:: 62 7:tr ELt 0 (-1 7 . o cp,Ccy2J.d.a7.20.D 0,72 ':-,to c .10 -7 1.7 o 07,1a- oonvo:2 t 04:73.7-1. CLAS.S OF stmvicE SYGIE,'C Day r,ge Day Lett Blue I9i7411 tyle3saga Nita iuIr NL L. o! number rn,.. , day messt.ge. 0:hertrecter in(I:eat,dhy the caring atar too check. F. NEWCOMB CARL-I-C.)1st, pr:L.iovr, !BELVIDERE BROOKS. vicr..; GEORGE W. E. ATKINS, VICE-PRE5IDENT A MANCHESTER MASS GOV 1 P3 .1.-3Ei'Hj STRONG UP FEDERAL RESERVE BANK I i,EW YORK SHAL,.. H. DELIGHTED TO SE YOU FRIDAY NL three symbol. appektrs after the check 'number of wertts)thts is aday messaw. Othrr- three symbols 4 Latter If none of E M HOUSE, these wke its character io ifr.E..atod by the rymbol appearing after the clink. l'orr, 260 I W. E. ATKINS. VICE-PRESIDENT tt'S No. SEND L ti- NEWCOMB CARLT0i TIME FILED BELVIDERE EsROOKS. VICE-PRESIDENT j CHECK following Telegram, subject to the terms hereof, which arc hereby agreed to - 2 7:110 120.7.7)0 t77at; 13 1:o fox. ' **.e.. 01. 'Ml. U.S.Senate, 74th Cong.,2nd sess.,Special Committee investi gating the munitions Industry, Hearings pursuant to S. Res. 206, part 26, p.7861 (washington, MUNITIONS INDUSTRY 1537)7861 loan here. I have reluctantly approved of delegation going your side if only to let authorities and joint stock banks appreciate at first hand real conditions United States. I am tired of explaining difference between your market and -ours. Only remedy seemed to me to let them go and see for themselves. Chancellor was grateful for your offer of issue of 1-year notes, but had evidently been persuaded to accept joint stock banks' advice which I hope may turn out to be wise policy. Authorities absent till Monday evening. That plan they talk about with the Allies undoubtedly refers to a cable that he sent us on August 18th, 6867: For J. P. Morgan. For your information only. Exchange situation. No definite steps have yet been taken but as far as I can gather, last proposal is to arrange shipment up to 1100,000.000 from Allies. This is not authentic, and sent only to keep you posted as to rumors. That is gold, of course. Senator CLARK. I call attention to a letter from the files of Mr. I Benjamin Strong, dated Aupst 14, 1915, indicating that he was getting into the situation, directed to Colonel E. M. House, Manchester, Mass. [reading "Exhibit No. 2217'] MY DEAR COLON HOUSE: Referring to our conversation of a week ago. You have doubtless observed that matters are developing along the lines of our discussion. Sterling exchange sold yesterday below 4.71. This was the 14th. That was the very day that you stood out from under, was it not? Mr. WHITNEY. The day after. Senator CLARK (continuing reading) : The newspapers are reporting very considerably cancelations of foreign contracts for wheat and other commodities. The cancelation of contracts for grain is reported to be due to military developments at the Dardanelles, which may shortly release large quantities of Russian wheat. This seems hardly probable and, if rumors now appearing in the newspapers are well-grounded (although I suppose they are considerably exaggerated) I am inclined to believe that the cause is inability to get remittances. It is a striking illustration of the possible effect upon our trade growing out of inability to arrange credits in this country. If exchange declines very sharply so that all the profit on a purchase o'f goods contracted for in this country is gone before the goods are exported, and the purchaser is in a position to cancel the contract, he will, of course, cancel in every instance even thoinzla he has to buy again later, possibly after -contracting for his exchange in advance. The situation is undoubtedly growing increasingly difficult with each day's decline in exchange and while I don't see anything yet to be alarmed about, I still believe that at present rates, with the prospect of still lower rates, the influence is gradually growing stronger to curtail our export business. With kindest regards, I beg to remain, Very truly yours, The document referred to was marked "Exhibit No. 2217" and appears in full in the text.) Senator CLARK. Do you know anything about Governor Strong's writing this letter to Colonel House? Mr. LA.MONT. What is the date of it? Senator CLARK. Dated August 14. Mr. LAMONT. I could not know anything about it. Senator CLARK. Did you, so far as you know, or any member of Your firm, discuss the matter with Governor Strong? Al h.3L Siwr OCrernOR5Fenjamin Strong, '15 62 Cedar Street, Ntm York, Dear Governor Strong: if Thank you for your letter of August 14t giving your opinion in regard to the exc ange situation, I sincerely hope some way out may be found and I believe there will be. McAdoo is ali e to the situation and I believe he will cooperate with you in //--- every way Fa4hfully yours, 6P6441,c Manchester, Massachusetts, August 1tIh, 1915, _ [Copy] JULY 7TH, 1917. MY DEAR COLONEL HOUSE: In preparing a memorandum of our conversation of Tuesday, I find we covered so much ground that to do so with necessary brevity may impair its usefulness. The paper enclosed, however, will suggest the detail of our discussion and I hope will be of service. As to certain difficulties which have developed: What I stated to you was with a desire to be helpful, as every consideration is due to those who are trying to carry too heavy a burden of work to do it justice. The trouble was primarily due to failure to develop and conclude a program in advance of transactions actually taking place; such a program not having been developed, both sides apparently failed to realize that without it misunderstandings were inevitable. Besides that, as I stated to you quite frankly, the Department is underorganized and badly needs skilled help with such division of responsibility and authority as will relieve the Secretary from the necessity of too detailed an examination of matters requiring final decision. On the other hand, some of the representatives of our Allies have failed to consider that they are dealing with subjects with which they have had three years', and we only three months', experience and they have doubtless expected too much in the way of co-operation in these early stages of our participation in the war. A misunderstanding of a rather serious character has developed in regard to the method of repayment of loans of the British Government negotiated through Messrs. J. P. Morgan & Company, aggregating $400,000,000 which is carried by 67 banks and may be called for payment at any time. If it is paid out of advances being made by our Government to the British Government, it would by so much expand the program of advances and shorten the period which can be covered by available credits. I have come to the conclusion, however, that it is absolutely necessary that these loans, or at least the greater part of them, must be paid off in cash and it should be done at exactly the right time. In fact, this payment can be utilized to our advantage in connection with future financing. If it could be arranged to repay these loans in installments of $100,000,000 each, timed so as to anticipate large further borrowings by our Government, the effect would be to create easy money all over the country as it would at once reduce interest rates in New York both time and demand, which would be reflected in every other money market in the United States. The money, at least in part, could be drawn from Government deposits in other Reserve districts. My recommendation, therefore, would be to have the Treasury face this matter squarely, include the payment of the $400,000,000 as a part of the program of the next few weeks or months, and let that be the means of preparing the market for future operations. Admitting that this will necessitate application to Congress for further legisation, might not the President make this the opportunity of bringing the country to realize the gravity of the war situation, the immense demands to be made upon use if the war is to be won, and frankly ask Congress for the financial support necessary? Hesitation in regard to this course has been expressed for fear of giving comfort to Germany. My own feeling is that whatever comfort they may get out of it is a small price to pay for the many advantages of being able to rush all of our resources to the front at the earliest possible moment. The enclosed memorandum was dictated immediately on my return but I was obliged to go to Washington and its completion has been delayed until today. I understand the tentative program suggested on the first page is now being considered by Secretary McAdoo but he is very much hampered by the knowledge that the credits and cash at his disposal are inadequate to meet all demands. My visit with you was a most enjoyable one and I hope you will give me opportunity to repeat it. I am leaving for Denver on Sunday. With kindest regards, I remain, Sincerely yours, BENJAMIN STRONG, Jr. Colonel E. M. HOUSE. MUNITIONS INDUSTRY 9561 MEMORANDUM Advances to Allies.-A constructive program reaching certainly six months into the future, or, still better, a year, should be developed as soon as possible. As that will take time, our Treasury might well determine what advances could be made for, say, the next two months and within that limit credits could then be apportioned among our Allies according to a tentative program laid out in conference with them which would not commit us or them as to a further period until the comprehensive program was developed. I should suppose that from $1S0,000,000 to $200,000,000 a month for Great Britain and about $100,000,000 for France would cover their needs for the next two months. As to Russia and Italy, the need is not so pressing nor for so large amounts at present. Announcernents.-The policy of announcing each advance as made strikes me as liable to cause embarrassment to us and to our Allies. If the Secretary would announce total advances to the Allies, say once a week, it would overcome this difficulty. Financial legislation.-I am convinced that the amount provided by Congress for advances to our Allies will be inadequate for even a six months' program, that generous financial support promptly accorded at this time will be of greater value than later, and I hope that our Government will find it possible to secure all necessary legislation at this session of Congress to enable our Treasury to give our Allies the fullest possible support. General organization.-The development of a program (financial, food, munitions, shipping, etc.), based upon existing legislation cannot be concluded satisfactorily without a better understanding of the requirements. To accomplish this, possibly the following principles might be helpful. The whole subject of furnishing food, military supplies, transportation, and credit should be governed by considerations of military necessity. These considerations can only be weighed at the seat of war. The general policy might, therefore, be worked out by an international commission on which all of the Allies would be represented (United States, France, Great Britain, Russia, Italy), which would sit permanently in Paris the membership of which should be composed of the ablest men available to deal with commercial, industrial, and transportation questions, as well as finance. The members of such a commission should be supported by an adequate staff of experts. It would determine priorities between the Allies, each nation retaining priority for its own needs, out of its own resources. If such a commission were created, this country would shortly occupy its natural position toward the war. We must organize as an immense farm to produce food, an immense factory to produce military and other supplies, an immense transportation system to furnish rail and water transportation, and an immense bank to finance the purchase and transportation of material. The organization in this country would properly direct its efforts to furnishing those things and in such quantities to the respective allied powers as recommended by the commission sitting in Paris. The local organization in this country might consist of: First. A purchasing board: This board would distribute and execute orders and its technical staff would see that quantity, quality, and deliveries were as required. Second. A price fixing body or board: Such an organization would stand between the country's regular commerce and industries and our Government in its war requirements and settle questions of prices. Third. A priority board: This organization would settle all questions of priority of delivery as between our Government and its Allies on the one hand; and other customers on the other. It should co-operate with the commission sitting in Paris. Fourth. Foreign representation: Each of the Allied Governments must, of course, be represented here by competent commissions with full authorities, whose functions should be exercised in co-operation with the purchasing board and would include making contracts, including financial arrangements with our Treasury, paying for goods purchased, inspection before shipment, etc. Fifth. The Treasury: The function of our Treasury in such a scheme of organization would be the normal one of raising funds, apportioning credits according to the agreed needs, and paying the bills, being governed by representations made by our representatives on the commission sitting in Paris 9562 MUNITIONS INDUSTRY The organizations subordinate to the purchasing board would have a useful place in such a scheme but would be controlled in their activities, first, by the purchasing board; second, by the board fixing prices; and third, by the priority board, all of which would co-ordinate through the purchasing board as the central organization. This general plan is based entirely upon the principle that our participation in the war and all activities growing out of it must be governed by military necessity which can only be determined at the seat of war. Government Loans.The experiences of the past three months convince me that a much larger credit will be needed than that now provided by Congress. A per- manent, Nation-wide organization must be created at once in order to facilitate Government borrowing. Congress should, I believe, authorize a large issue of short-term notes with a greater variety of character so as to meet the needs of different classes of investors and savers and it should confer greater authority upon the Secretary of the Treasury in fixing rates of interest. A permanent paid organization should be promptly developed by the twelve Reserve banks which could be expended and contracted as new loans were placed. At the same time a separate organization should be provided at once to develop saving in detail among all classes of people. These savings should be segregated, temporarily invested in the Government's short obligations, and then converted into permanent loans when issues are made. Only such a plan, which anticipates and earmarks in advance, will avoid increasing pressure upon our banking system and possibly its dislocation. Currency.Our participation in the war makes a certain expansion of bank credit necessary and inevitable. This can be sound or unsound according to the skill with which it is managed. All necessary legislation has now been enacted with the passage of the amendments to the Reserve Act and a perfectly sound expansion of vast proportions is possible, provided the Reserve banks are able to assemble a much greater proportion of the country's gold supply even than the amount already held, about 51,300,000,000. This requires large issues of Federal Reserve notes, to take the place, dollar for dollar, of small denomination gold certificates, but if successfully conducted will place an immense burden of expense upon the Reserve banks. I would strongly urge that the Secretary of the Treasury immediately discontinue issues of gold certificates in denominations of ten and twenty dollars and that the Federal Reserve Board instruct Federal Reserve banks to furnish all requirements for currency in their respective districts by issues of Federal Reserve notes on which they should pay the shipping charges. Congress could then be asked to make an appropriation to enable the Bureau of Engraving and Printing to defray the cost of preparing Federal Reserve notes. The saving to the Government on other currency, the cost of which it now bears, will largely offset this added expense. We are facing the possibility of a great shortage of bills of one and two dollar denomination. This can be met in advance of the fall demands, which will be heavy, by reissuing large denomination silver certificates and United States notes in one and two dollar denominations. Each Reserve bank should be instructed now to accumulate these bills against the fall demand. This will increase the vacuum to be filled by further issues of Federal Reserve notes, and the simultaneous withdrawal of gold certificates above suggested would automatically draw gold into the Reserve banks without causing comment or possible alarm. This accumulation of gold will offer a basis for credit expansion which can be controlled within safe limits by the discount rates of the Reserve banks. Trade with the enemy.House Resolution No. 4960, introduced by Mr. Adamson, covers transactions in goods, but fails adequately to impose restraint upon foreign exchange transactions and shipments of gold and provides no organization for supervising such transactions. A body should be created for the purpose of supervising all possible enemy exchange operations and gold shipments, and this body should have power to require reports and production of papers and records. A letter covering this matter has been sent to Mr. Frank L. Polk, of the State Department. Gold.At the present time we are importing gold from England which is being re-exported to Spain, Cuba, Japan, Canada, and South American countries. The unwisdom of this development is apparent. The demand upon our credit system will shortly be so great that we must not only preserve but augment our gold base, even if it involves curtailing trade and credit transactions with neutral countries. Whatever organization is developed to deal with foreign exchange should have authority to deal with this matter. .41.443 AUG 1 6191:' r Governor Benj. Strong, Federal Reserve Bank, Dear Gov. Strong: New York. I want to thank you for your letter of July 7th with its enclosed memorandum which will be very helpful. I am sorry you will be so far away during the next few weeks and I shall look forward to your return. Sincerely y Magnolia, Mass. July 9, 1917. Exhibit No. 3161 strong to House, july 7, 1917, personal file, St:"Iigl(P:I4()) xhibit No. 'U61 Strong to House, July 7, 1917, Personal file, Strong (n.9500 U.S.Congress 74th Cong., 2nd Sess., Special Committee Investigating the Munitions Industry, Hearings pursuant t4o(SRes. 206 (Washington, 1937) Exhibit No. 3161 [Cory] July 7th, 1917 mY DRAT? COLONEL HOUSE: In Preparing a memorandum of our conversation of Tuesday, T find we covered so much ground that to do so with necessary brevity may impair its usefulness. The paper enclosed, however, will suggest the detail of our conversation and T hope will be of service. As to certain difficulties which have develoned; Vhat T stated to you was with a desire to be helpful, as every consideration is due to those who are trying to carry too heavy a burden of work to do it justice. The trouble was primarily due to failure to develop and conclude a program in advance of transactions actually taking place; such a proglyam not having been developed, both sides apparently failed to realize that without it misunderstandings were inevitable Besides that, as T stated to you quite frankly, the DePartment is underorganized and badly needs skilled help with such division of responsibility and authority as will relieve the Secretary from the necessity of too detailed an examination of natters requiring final decision. . On the other hand, some of the representatives of our Allies have failed to consider that they are dealing with subjects with which they have had three years', and we only three months', experience and they have doubtless expected far too much in the way of co-operation in these early stages of our narticipatiOn in the war. A misunderstatding of a rather serious character has developed in regard to the method of repayment of loans of the British Government negotiated through Messrs. J. P. Morgan + Company, aggregating Wo,000,000 which is carried by 67 banks and may be called for payment at any time. If it is paid out of advances being made by our Government to the British Government, it would by so much expand the program of advances and shorten the period which can be covered by available credits. I have come to the conclusion, however, that it is absolutely necessary that these loans, or at least the greater part of them, must be paid off in cash and it should be done at exactly the right time. In fact, this payment can be utilized to our advantage in connection with future financing. If it could be arranged to repay these loans in installments of $100,000,000 each, timed so as to anticipate large further borrowings by our Government, the effect would be to create easy money all over the country as it would at once reduce interest rates in New York both time and demand, which would be reflected in every other money market in the United States. The money, at least in part, could be drawn from Government deposits in other Reserve districts. My recommendation, therefore, would be to have the Treasury face this matter squarely, include the payment of the $400,000,000 as a part of the program of the next few weeks or months, and let that be the means of preparing the market for future operations. Admitting that this will necessitate application to Congress for further legislation, might not the President make this the opportunity of bringing the country to realize the gravity of the war situation, the immense demands to be made won use if the war is to be won, and frankly ask Congress for the financial support necessarr Hesitation in regard to this course has been expressed for fear of giving comfort to Germany. My own feeling is that whatever comfort they may get out of it is small price to pay for the many advantages of being able to rush all of our resources to the front at the earliest possible moment. - 2 - [Exhibit 3161 continued] The enclosed memorandum was dictated immediately on my return but 17 was obliged to go to Washington and its completion has been delayed until today. I understand the tentative program suggested on the first page is now being considered by Secretary McAdoo but he is very much hampered by the knowledge that the credits and cash at his disposal are inadequate to meet all demands. My visit with you was a most enjoyable one and I hope you will give me opportunity to repeat it. I am leaving for Denver on Sunday. With kindest regards, I remain, Sincerely yours, BENJAMIN STRONG, Colonel E. M. HOUSE. R. 1p.9560] MEMORANDUM Advances to Allies.- A constructive program reaching certainly six months into the future, or, still better, a year, should be developed as soon as possible. As that will take time, our Treasury might well determine what advances could be made for, say, the next two months and within that limit credits could then be apportioned among our Allies according to a tentative program laid out in conference with them which would not commit us or them as to a further period until the comprehensive program was developed. I should suppose that from $180,000,000 to $200,000,000 a month for Great Britain and about $100,000,000 for France would cover their needs for the next two months. As to Russia and Italy, the need is not so pressing nor for so large amowits at present. Announcements.- The policy of announcing each advance as made strikes me as liable to cause eFbarrassment to us and to our Allies. If the Secretary would announce total advances to the Allies, say once a week, it would overcome this difficulty. Financial legislation.- IT am convinced that the amount provided by Congress for advances to our Allies will be inadequate for even a six months' program, that generous financial support promptly accorded at this time will be of greater value than later, and 17 hope that our Government will find it possible to secure all necessary legislation at this session of Congress to enable our Treasury to give our Allies the fullest possible support. General Organization.- The development of a poogram (financial, food, munitions, shipping, etc.), based unon existing legislation cannot be concluded satisfactorily without a better understanding of the requirements. To accomplish this, possibly the following principles might be helpful. The whole subject of furnishing food, military supplies, transportation, and credit should be governed by considerations of military necessity. These The general policy might, considerations can only be weighed at the seat of war. therefore, be worked out by an international commission on which all of the Allies would be represented (United States, France, Great Britain, Russia, Italy), which would sit permanently in Paris, the membership of which should be composed of the ablest men available to deal with commercial, industrial, and transportation iqueetions, as well as finance. The members of such a. commission should be It would determine priorities besupported by an adequate staff of experts. tween the Allies, http://fraser.stlouisfed.org/awn resources. Federal Reserve Bank of St. Louis each nation retaining priority for its own needs, out of its -3[Exhibit 3161 continued] If such a commission were created, this country would shortly occupy its natural position toward the war. We must organize as an immense farm to troduce fobdi-.attimmente factory to produce military and other supplies, an immense transportation system to furnish rail and water transportation, and an immense bank to finance the Purchase and transportation of material. The organization in this country would properly direct its efforts to furnishing those things and in such quantities to the respective allied powers as recommended by the commission sitting in Paris. The local organization in this country might consist of: First. A purchasin board: This boa2d-wotiddistrilatte':and'7 oxecute orders and its technical staff would see that quantity, quality, and deliveries were as required. Such an organization Second. A price fixing body or board: would stand between the country's regular commerce and industries and our Government in its war requirements and settle questions of prices. This organization would settle all Third. A priority board: questions of priority of delivery as between our Government and its Allies on the one hand, and other customers on the other. It should co-operate with the commission sitting in Paris. Fourth. Foreign representation: Each of the Allied Governments must, of course, be represented here by competent commissions with full authorities, whose functions should be exercised in co-operation with the purchasing board and would include making contracts, including financial arrangements with our Treasury, paying for goods purchased, inspection before shipment, etc. Fifth. The Treasury: The function of our Treasury in such a scheme of organization would be the normal one of raising funds, apportioning credits according to the agreed needs, and paying the bills, being governed by representations made by our representatives on the commission sitting in Paris 1'0.9561] The organizations-subordinate to the purchasing board would have a useful place in such a scheme bout would be controlled in their activities, first, by the purchasing board; second, by the board fixing prices; and of which would co-ordinate through .third, by the priority board, the purchasing board as the central organization. nll This general plan is based entirely upon the principle that our participation in the war and all activities growing out of it must be governed by military necessity which can only be determined at the seat of war. that Government Loans.-- The experience of the past three months convince me a much larger credit will be needed than that now provided by Congress. A permanent, Nation-wide organization must be created at once in order to facilarge litate Government borrowing. Congress should, I believe, authorize a issue of short-term notes with a greater variety of character so as to meet the needs of different classes of investors and savers and it should confer greater authority upon the Secretary of the Treasury in fixing rates of interest. A letter from the files of mr. Benjamin Strong: FExhibit 2217] [August 14, 1915] MY nEAR COLONEL 'ROUSE: Referring to our conversation of a week ago. You have doubtless observed that matters are developing along the lines of our discussion. Sterling exchange sold yesterday below 4.71. The newspapers are reporting very considerably cancelations of foreign contracts for wheat and other commodities. The cancelation of contracts for grain is reported to be due to military developments at the Dardanelles, which may shortly release large quantities of Russian wheat. This seems hardly probable and, if rumors now appearing in the newspapers are well-grounded (although I suppose they are considerably exaggerated) I am inclined to believe that the cause is flability to arrange credits in this country. If exchange declines very sharply so that all the profit on a purchase f goods contracted for in this country is gone before the goods are exported, and the purchaser is in a position to cancel the contract, he will, of course, cancel in every instance even though he has to buy again later, possibly after contracting for his exchange in advance. The situation is undoubtedly growing increasingly difficult with each day's decline in exchange and while I don't see anything yet to be alarmed about, I still believe that at present rates, with the prosPect of still lower rates, the influence is gradually growing stronger to curtail our export business. With kindest regards, I beg to remain, Very truly yours, [Benjamin Strong] U.S.Congress,74th Cong., 2nd Sess, Special Committee Investigating the Munitions Industry, wearings pursuant to S. Res. 206(73d Cong.) Part 26, Jan. 9 and 10, D.7861. 196, COPY F Letter from the personal files of Benjamin Strong, July 7, 1917 to Colonel E. M House (..Thich has not been located at the Bank or in the papers of Benjamin Strong, Jr., which he acquired after his father's death in 1928).1 July 7, 1917 My Dear Colonel House: In preparing a memorandum of our conversation of Tuesday, I find we covered so much ground that to do so with necessary brevity may impair its usefullness. The paper enclosed, however, will suggest the detail of our discussion and I hope will be of service. As to certain difficulties which have developed- What I stated to you was with a desire to be helpful, as every condideration is due to those who are trying to carry too heavy a burden of work to do it justice The trouble was primarily due to failure to develop and conclude a program in advance of trans actions actually taking place such a program hot having been developed, both sides apparently failed to realize that without it misunderstandings were inevitable. Besides that, as I stated to you quite frankly, the Department is under organized and badly needs skilled help with such dividion of responsibility and authority as will relieve the Secretary from the necessity of too detailed an el animation of matters requiring final decision On the other hand, some of the representatives of our Allies have failed to consider that they are dealing with subjects with which they have had three years', and we only three months', e perience and they have doubtless expected too much in the way of co operation in these early stages of our participation in the war. A misunderstanding of a rather serious character has developed in regard to the method of repayment of loans of the British Government negotiated through Messrs. J P. Morgan + Company, aggregating $400,000,000 which is carried by 67 banks and may be called for payment at any time. If it is paid out of acvances being made by our Government to the British Government, it would by so much epand the program of advances and shorten the period which can be covered by available credits. I have come to the conclusion, however, that it is ab solutely necessary that these loans, or at least the greater part of them, must In fact, this be paidroff in cash and it should be done at e actly the right time. If payment can be utilized to our advantage in connection with future financing. it could be arranged to repay these loans in installments of $100,000,000 each, timed so as to anticipate large further borrowings by our Government, the effect would be to create easy money all over the country as it would at once reduce interest rates in New York both time and demand which would be reflected in every other money market in the United States. The money, at least in part, could be drawn from Government deposits in other Reserve districts. My recommendation, therefore, would be to have the Treasury face this matter squarely, include the payment of the $400,000,000 as a part of the program of the ne,t few weekb-lor months, and let that be the means of preparing the market for future operations. Admitting that this will necessitate application to Congress for further legislation, might not the President make this the opportunity of bringing the country to realize the gravity of the war situation, the immense demands to be made upon use(sic) if the war is to be won, and frankly ask Congress for the financial support necessary? Hesitation in regard to this course has been e, pressed for fear of giving comfort to Germany. My own feeling is that whatever comfort they may get out of it is a small price to pay for the many advantages of being able tb rush all of our resources to the front at the earliest possible http://fraser.stlouisfed.org/ moment. Federal Reserve Bank of St. Louis The enclosed memorandum was dictated immediately on my return but I was obliged to go to Washington and its completion has been delayed until today. I understand the tentative program suggested on the first page is now being considered by Secretary McAdoo but he is very much hampered by the knowledge that the credits and cash at his disposal are inadequate to meet all demands My visit with you was a most enjoyable one and I hope you will give me opportunity to repeat it. I am leaving for Denver on Sunday. With kindest regards, I remain, Colonel E. M House. [signed Benjamin Strong,Jr. United States Congress, 74th, 2nd Sess., Senate, Special Committee Inves5igating the Munitions Industry, Hearings on S.R 206, Part 30, p.9560) Golotal lo A miaueimrotandirg of a rat?;or d In regard to t1=0, vtrratt mottod of repayv4.1"1 thro,401:' Vfasta July 7th, 1917. its My dear Colonel Housa.:, In preparing a memorandum of our conversation of Tuesday, I find we covered so much ground that to do ry brevity may impair its usefulness. so with necessa- The paper enclosed, how- ever, will suggest the detail of our discussion and I hope will be of service. mmrt As to certain difficulties whicti have developed:- 'hat _ stated to you was with a desire to be helpful, as every considerat4on is due to those who are trying to carry too heavy a burden _ of work to do it justice. The trouble was primarily due to fail- ure to develop and conclude a program in advance of transactions actually taking place; such a program not having been developed both sides apparently failed to realize that without it misunderstandingewere inevitable. Besides that, as I stated to you quite t frankly, the Department. is underorganized and badly needs skilled help with such division of responsibility and authority as will relieve the Secretary from the necessity of too detailed an examine.. tion of matters requiring final decision. On the other hand, some of the representatives of our Allies have failed to consider that they are dealing with subjects with which they hnve had three years', and we only three Months', experience and they have doubtless expected too much in the way of co-operation in these early stages of our pnrticipation in the war. -2- To Colonel house, 7/7/17/ A misunderstanding of a rather serious character has develo .ed in regard to the method of repayment of loans of the British Government negotiated through Y.essrs. J. P. Morgan & Company, aggregating $400,000,000 which is carried by 67 banks and may be called for payment at any time. If it is paid out of advancettaat being made by our government to the British Government, it would by so much expand the program of advances and shorten the period whic# can be covered by available credits. I have come to the con- clusion, however, that it is absolutely necessary that these loans, or at least the greater part of them, must be paid off in cash and it should be done at exactly the right time. In fact, this pay- ment can be utilized to our advantage in connection with future financing. If it could be arranged to repay these loans in install- Lents of $100,000,000 each, timed so as to anticipate large further borrowings by our government, the effect would be to create easy money all over the country as it would at once reduce interest rates In New York, both time and demand, which would be reflected in every other money market in the United States. The money, at least in pert, could bedrawn from government deposits in other reserve districts. My recommendation,tierefore, tould be to have the Treasury face this matter squarely, include the payment of the $400,000,000 as a part of the program of the next few weeks or months and let that be the means of preparing the market for future operations. Admitting that this will necessitate application to Congress for further legislation, might not the President make this the -3- opportunity of To bringing the 7/7/17. Colonel house. country to realize the gravity of the war situation, the immense demands to be made upon us if the war is to be won and frankly ask Congress for the financial support necessary? Hesitation in regard to this course ha; been express- ed for fear of giving comfort to Germany. My own feeling is that whatexer comfort they may get out of it is a small price to pay for of our resources the many advantages of being able to rush all to the front at the earliest possible moment. The enclose(i mcmoranaum was dictated immediately on my return but I was obliged to go to lashington and its completion has been delayed until to-day. I understand the tentative program suggestei on the first page is now being considered by Secretary :. cAdoo, but he is very much hampered by the knowledge that the credits and cash at his disposal Ifi are inadequate to meet all demands. My visit with you was a most enjoyable will give me opportunity to repeat it. Sunday. I one and I hope you am leaving for Denver on r,15. With kindest revrds, I remain, Sincerely yours, A id V. ter4 Z 6 of our 16-4r .4 Benj. Strong, Govern Federal Reserve Bank, Dear Gov. Strong: New York. I want to thank you for your letter of July 7th with its enclosed memorandum which will be very helpful. I an sorry you will be so far away during the next few weeks andI shall look forward to your return, Sincerely yourii? Magnolia, Mass. July 9, 1917. Avast 13, 1917. _Jeer Colonel HOUSE): Nearly every day's mail brings a variety of suggestions, really criticisms, etc., that is I have, however, received a letter from a very serve attention. wise and influential man up worth while the state, which is so much in line to me While in the West last month, that with what became apparent I think it is Few of these de- beyond belief. sending it to you. Extract from the let- ter is enclosed. The gentleman who writes this discriminating years ), is a very the letter ( a man well along in observer of public opinion. If right kind of publicity is employed just now, it will popularize if news is stifled the reaction to a state of indifference the war; is bound to come until our armies are actually fighting. England went through this same experience and finally met a demand for pub- licity hich I believe brought good results. I knew nothing trol this matter but news about our men is of the methods or machinery amployed to con- feel quite satisfied having a bad effect that the entire absence of on our country. I send you this with considerable reluctance realizing that it is none of my business whatever. Faithfully yours, Colonel E. M. House, Magnolia, Mass. BS/VCM . laloust 139 1917. Dear Colonel IT.oum Yearly every ezly's mail brlus a variety of suestions, crit1cisu:39 etc., that is really boyond belief. serve attention. Fc7; of those de- I haves however, received a letter fromavery wise and influential man up the state, which is so much in line with what become aoarent to me while in the 7,est last month, that thiua. it is worth while sending it to you. :ztract from the let- ter is enclosed. The z;entle'zan who writes this letter ( a man well alongin years ), is a very discriminating observer of public minion. If the ric,ht kdni of publicity is caloyed just nai9 it will polularize thow,;.r; if nsaa iii tifled the reaction to a state of indifference in becald to co:-.2e trAtil our armies are actually fijhtirc. 7.,n:aand went through this same eperiehco and finally net a tic-Jana for rub- licIty ,hich j believe brou:;ht sool results. mow nothing of the methods or machinery employed to con- ti this matter but feel quite satisfied that the entire absence of mis about our men is having a bad effect on our cowitry. 1 sand you 'C.-21s with coneidorable reluctance rcalicin;. that it is mono of my basins,s whatever. Faithfully yours, Colonel :T.ouse, araoiic. ::ass. B170071 "There is very little enthusiasm for the war. I see in some towns in this state every man drawn claims eemption. On the street, in the offices, in the smoking-room of the sloe-per, the war is not the 'prine subject of conversation. There are :early thoughtful men who have it constantly in mind and say nothirn about it, but even their mental attitude towards it is all er:{presaed by the phrase of Anthony Trollope, doo;ed that ,Joes it." I attribute this condition very largely, to the childish censorship in..Jashington and secondly, - to the distrust of T.LI.ker and Daniels. The latter evil seems beyond removal, but the other ought to be remedied. It is well nough to say nothing about what troops are ombarkin on a certain day for ;,'rance, but when they are once landed no amount of inform.etion regarding the number or names of the reJ:ments can by any possibility hurt the cause or help the enemy. All of our papers Ethould be full of things accomplished. The knowledge that we h:d throe hundred thousand men in training over there would wake "It's first - up our people and discourage Jer:::any. ..1,s things are, you will find you will not get the same effort from the ban:,rs that you did before. that That effort enteiled an immense amount of work ohich is far from complete. It ent:-.1.1ed in the agregate a large cost whiOh the banks will hesitte to gain meet. Instead of being dragged for:/ard by the bans, the ordinary a .a le have got to be brought for;7ard voluntarily and, to do this, the.' to be interested far more deeply than they are to-day in the great effort. If pose of :-_;reel sad all the uould use his influence- with the -President to dis- vee,ty nonsense of his de-nartment, take the aeoie into his confidence sod 1-,:a7::e them realize that it is their fight, your wof:: would go very differently from the w.ay it seems likely to go to an outsider. "I take it that the men of area i wealth have secured about all the -tends theye and when you come to distribute such on issue in units of less ti-aim ten thoaean,-: dollar's, you have ,:t;ot to reach a tremEnso number .of buyers. -%ictorTi would do it. defeat night do it. In the absence of either victory or defeat, the only thing which I can see, which is lia:ely to -pro,:uce the result is' fall and free and constant ;1-.aon a regiment _or division. is orered to 0 there should be great 7,ublia domcnstrations Which need 11t reveal the day or line of de:arture, :.ut would wake code up,,, and so with all the o!.,her things. qive us news! Let the news.:_ info=tion. '..capers orLat a:lything they want and :amplify all they will and lot der;:.any :.ake the best of it." 5) "There is very little enthusiasm for the war. I see in some towns in this state every man drawn claims exemption. On the street, in the offices, in the smoking-room of the sleeper, the war is not the prime subject of conversation. There are many thoughtful men who have it constantly in mind and say nothing about it, but even their mental attitude towards it is all expressed by the phrase Of Anthony Trollope, "It's dogged that does it." I attribute this condition very Largely, first, - to the childish censorship in.Washington and secondly, - to the -distrust of Baker and Daniels. The latter evil seems beyond removal, but the other ought to be remedied. It is well enough to say nothing about what troops are embarking on a certain day for France, but when they are once landed no amount of information regarding the number or names of the regiments can by any possibility hurt the cause or help the enemy. All of our papers should be full of things accomplished. The knowledge that we had three hundred thousand men in training over there would wake up our people and discourage Germany. As things are, you will find that you will not get the same effort from the hanks that you did before. That effort entailed an immense amount of work which is far from coMplete. It entailed in the aggregate a large cost which the banks will hesitate to again meet. Instead of being dragged forward by the banks, the ordinary people have got to be brought forward voluntarily and, to do this, they have got to be interested far more deeply than they are to-day in the great effort. "If Mr. McAdoo would use his influence with the President to dispose of Creel and all the petty nonsense of his department, take the people into his confidence and make them realize that it is their fight, your workwould go very differently from the way it seems likely to go to an outsider. "I take it that the men of great wealth have secured about all the bonds they want, and when you come to distribute such an issue in units of less than ten thousand dollar's, you have got to reach a tremendous number of buyers. A victory would do it. A defeat might do it. In the absence of either victory or defeat, the only thing which I can see, which is likely to produce the result is full and free and constant information. When a regiment, or division is' ordered to co there should be great public demonstrations Which need not reveal the day or line of departure, but would wake people up, and so with all the other things. Give us news! Let the newspapers print anything they want and amplify all they will and let Germany make the best of it." August 13th, 1017. Dear Colonel House: ry holiday in the Vest is now over and 1 n1 glad to say I vas able to stay avIly long enouvh to eseqpa the not veathcr. good friend, Mr. Curtls, ha o aol:od mr to stand codfv.ther for h!,f, boy and as they are to have a eiristening party on the 25th of tl/is zonth, I 'All be in your iruediate heighborhood for a day or -1.vo and cm rritirg to in:olire if it will be entirely convenient for me to call. Hoping that yoTheap ve11 and with kindest regards to you and Nrs. Houso, I am, Very truly yours, Colonel E. L. House, - ra?-yolia, rase. 133/1TCY. August 13th, 1917. Dear Colonel House: Yy holiday in the rest is now over and 1 RM glad to say was able to stay away long enough to escape not weather. he My good friend, Pr. Curtis, has ashod me tn stand godfs.ther for hie boy and am they ars to have a christening party or the 25th of this month, I 111 be in your immediste heighborhood for a day or uwv nne am writing tn inquire if it will be entirely eonvenient for re to call. Hoping that you keep well RC(' with kindest regards to you and Mrs. House, I am, Very truly yours, Colonel E. M. House, Yagnolia, Mass. BVITCY: Governor Benj. Strong, Equitable Building, New York. Dear Governor Strong: I shall be de- lighted to see you when you come to the :North Shore. My telephone number is Manchester 640 and, if you wi4call me up, we will make an engagement convenient to us both. Sincerely youri-", Magnolia, August 1 / MOsachusetts. 44, 1917. elvu44__ 27km, 6 August 31st, 1917. Dear Colonel House: A ratter has come up which may be of interest te the War Department but which I feel unable to deal with without your advice. A warn personal friend and forner business associate, ?:r. Ambrose ronell, who is President of the Internaional el Company is very anxious to undertake some work for the government end has made a suggestion to me uhich impresees me as being well worth Secretary Baker's consideraion. Lr. ronell would like to go to France and take entire charge of organizing and constructing a plant and machinery far all types of repair work for our an-ly. In this he wo,ld include repairs to artil- lery, machine guns, rifles, transfort equipment, aeroplanes in fact everything which re:lu;red the application of mechanical ability. No better man to place in charge of this vork could in my opinion be found. r.Yonell is a technical engineer, his earlier experience having been with the CarneTie Company where I believe he *-2=s classed as metallurgical chenist. and speaks French. He is a university graduate Then the Steel Cortoration was formed, ha beca:e 7rer,ident of the international nieLel company end devel- oved that organization with the present success. He has been 1 - 2- interested it a very important tay in oi-ganizing the Yddystone plant '1.1,5.61 is about to begin the manufacture cf rifles for the United States Army and during the period of the i:;ar has been engaged in various enterprises, including th6 manufacture of gvna and shells. He has also had advisory direction in cne of the largest autemobfle true?: enterprises in the country. I regard him as one of the most akillful and intelligent organizers of manufacturing enterprises in the country. He is a younr; man - only a little over forty, has magnificent health, independent morns and yould expect to vork for the government for i;:thing. or twelve or fifteen years past rr. ronell has had a good deal of business in France and direct contact vith many :In- nortant French mnufacturers. He also knows the countryvell. It would be difficult to find a man who is better equipped for taking charge and direction of plants and their operation. He tells me that the nickel Company, the Iddystone plan and the Reminton .rms Company, as tell as the International 7uotcr:, Company, in all of vhich he has been apoving spirit, are now so organized that they can run ssloothly and sixcessfully without his giving -Clem any per- sonal attention and he could f,..c to France at once preared to t-Ae up the tork. He also informs me that he would h ve a; his con,:and the necessary force of experts, aould be able to organize them and tnderte:e the work vhenever the government wished him to and that he could also command a nucleus of skilled labor famili-x with 'Imer- ican rr-.chincry so that ihere .:ould be no delay in starting the work. (3) Will you Advise me how best this matter could be placed before the proper people in Washington? Digitized for Colonel FRASER E M.House http://fraser.stlouisfed.org/ Magnolia, Mass. Federal Reserve Bank of St. Louis With kind regards, I am, Sincerely yours, leeflorteetati ie t va. Ayttone tertecet 4tar August 31st, 1917. be Dear Colonel House: A matter has come up which may be of interest te the War Department but which I feel unable to deal with without your advice. A warm personal friend and former business associate, Mr. Ambrose feonell, who is Presidont of the international Nick- el Company is very anxious to undertake some work for the government and has made a suggestion to me which impresses me as hr. eonell being well worth Secretary Baker's consideraeion. would like to go to France and take entire charge of organizing and constructing a plant and machinery ler all types of repair In this he weld include repairs to artillery, machine guns, rifles, transport equipment, aeroplanes work for our army. in fact everything which required the application of mechanical ability. No better man to place in charge of this work could in my opinion be found. Monell is a technical engineer, his earlier experience having been with the earne ie Company where classed as metallurgical chemist. and speaks French.' 1 believe he was He is a university graduate 41Rhen the Steel Cornoration was formed, he beeeee 'resident of the International Pickel company and devel°rod that organization with the present success. He has been -2- interacted in a very important way in organizing the Fddystone plant which is about to begin the manufacture cf rifles for the linited States Army and during the period of the war hac been engaged in various enterprises, including the manufacture of gune and shells. He has also had advisory direction in one of the largest automobile truck regard him as one of the enterprises in the country. most akillful and intelligent organizers of manufacturing enterprises in the country. He is a young man - only a little over forty, has magnificent health, independent means and would expect to work for the government for or twelve or eething. fifteen years past Mr. Yonell has had a good deal of business in France and direct portant French I manufacturers. contact with many im- He also knows the countrytell. It would be difficult to find a man who is better equipped for taking charge and direction of plants and that their operation. the Nickel Company, the Eddystone plan and the He tells me Remington Arms Company, as well as the international totors Company, in all of which he has been a moving spirit, are now so organized that they can run smoothly and seccessfully . sonal attention and he could up the work. without his giving then any per- go to Trance at once He also informs me that he would h-ve at his command the necessary force of exnerts, would be able undertake the work prenared to take to organize them and whenever the government wished him to and thret he could also command a nucleus of skilled labor familiar with American machinery so that there would be no delay in starting the work! 2 you advise me hov! best this matter could be placed before the proner people ir '%shington? With kind regards, I ara, Sincerely your, Colonel 7. House, P,ass. 119/101" * 00.17 2- COPY Letter from the files of Mr. Benjamin Strong, Aug. 14, 1915, to Colonel E. M House (which has not been located at the Bank of in the papers of Benjamin Strong, Jr., which he acquired after his father's death in 1928) My Dear Colonel House: Referring to our conversation of a week ago. You have doubtless observed that matters are developing along the lines of our discussion. Sterling exchange sold yesterday below 4.71. The newspapers are reporting very considerably cancelations of foreign contracts for wheat and other commodities. The cancelation of contracts for grain is reported to be due to military developments at the Dardanelles, which may shortly release large quantities of Russian wheat. This seems hardly probable and, if rumors now appearing in the newspapers are well grounded (although I suppose they are considerably exaggerated) I am inclined to believe that the cause is inability to get remittances It is a:striking illustration of the possible effect upon our trade growing out of inability to arrange credits in this country. If e:change declines very sharply so that all the profit on a purchase of goods contracted for in this country is gone before the goods are e ported, and the purchaser is in a position to cancel the contract, he will, of course, cancel in every instance even though he has to buy again later, possibly after dontracting for his e hange in advance. The situation is undoubtedly growing increasingly difficult with each day's decline in e change and while I don't see anything yet to be alarmed about, I still believe that at present rates, with the prospect of still lower rates, the influence is gradually growing stronger to curtail our export business With kindest regards, I beg to remain, Very truly yours, iBenjamin trongl United States Congress, 74th, 2nd Sess., Senate, Special Committee Investigating the Munitions Industry, Her2I1-13ga_on_Sj*art 26, p.7861 (Washington, 1937) Aug. 14 1915. dear Colonel House: Referring to our conversation of a week agog You have doubtIees observed that matters are developing: along the lines of our discussion. Sterling exchange sold yesterday below 4.71. The newseepers are reporting very consider- able cancellations of fereign oontracts for theet and other commodities. The -cancellation of contracts for grain is re- ported to be due to military developments at the Dardanelles, which may Shortly release large quantities or Russian wheat. This hardly seems probable and, if rumors now appearing in the newspapers are well-grounded (although I suppose they are considerably exaggerated;, I am inclined to believe that the cense is inability to get remittanees. It is a striking illustration of the possible effect upon -our trade growing oust of inability to arrange credite in this coiettry. If exchange declines very Sharply so that all the profit on a purdhase of geode contracted for in this country Is gaaa before the goods are exported and the purchaser is in Colonel E4 U. House, 8/14/16, evoeition to cannel the contract, he will, of course, cancel in every instance even though he has to buy again later, voesibly after contracting for his exchange in advance. The situation is undoubtedly growing Increasingly difficult with each day's decline in exchange and, while I don't see anything yet to be aIarmed about, I still believe that at present rates, with the prospect of still lower rates, the influence is gradually growing stronger to curtail our export business, th kindest regards,. I beg to remain, Very truly yours, .Colonel E. U. House, Mancheeter, Mass. InariPE 'r FEDERAL RESERVE BANK. OF NEW YORK d11 Sent by COPY OF TELEGRAM (SEND TO FILES) estr.siila .t Governor Benj. Strong, 013rn /Sr rt) #1 Federal Reserve Bank,.' New York. A ' Dear Governor Strong: irk, l ii I will see what I can do towards furthering the desires of your friend Mr._AMbrose Monell. At the moment, I cannot think of more efficient service that the one he proposes. I take it that the plant which he desires to construct and operate is to be wholly Government owned and controlled. I know Mr. Monell and share your high opinion of his ability-. Sincerely yours, Magnolia, Massachusetts. September 2, 1917. SEP- 4 1917 2riF011 )22 Governor Benj. Strong, Federal Reserve Bank, New York. Dear Governor Strong: I will see what I can do towards furthering the desires of your - friend Mr. Anbrose Monell. At the moment, I cannot think of more efficient service that the one he proposes. I take it that the plant which he desires to construct and operate is to be wholly Government owned and controlled. I know Er. Yonel) and share your high opinion of his ability. Sincerely yours, Magnolia, Massachusetts. September 2, 191,7.) I SEP- 4 1'.31 )ex. 4,1917. Dear Colonel Hauee. Than:c you for your note of September 2nd. Jr. Lonell desires to place his services and his experience at the Govermentts disposal in any caracity whore ho niz;ht be found'of use, and I think his idea was sir:ply to take charge of the construction and operation of such plant or plants as the Government miaht desire to construct in Prance. Very truly yours, Colonel ::,.. Houses Eaz;nolia, Lass. September 4, 1917. Dear Golonel.y5s#4,m,,,,, Thank you for your note of September 2nd. Mr. Motion desires to place his services and his experience at the Government's disposal in apy capacity where he might be found of use, and I think his idea was simply to take charge of the construction and operation of such plant or plants as the Government might desire to construct in France. Very truly yours, Colonel 3. M. House, Magnolia, Mass. B3/11.411 September 8, 1917. Dear Colonel IDUSO: I know you will be in erected in ro,dir, the enclosed, which will be sent out by the Federal Eeserve Sank when 1.)praV.0.1 by the Liberty Loon Committee. The 1st, 2nd and 3rd will Jicclose what our d;ner- ous liabilities are. The 4th and 5th will disclose what available reourcos we have to meet tier. Oar underta%-ins mast be to convert these resources so that the: can be rode availalae to met the liabilities. I am confident that it can be done. Eay I ask you to return the enclosed after read1n3; Very truly yours, Col. E. LI. Housee. Lasnolia, riass. BS/IiAH September 8, 1917. Dear Colonel House: I know you will be inlerested in reading the enclosed, which will be sent out by the Federal Reserve 3ank when approved by the Liberty Loan Committee. The 1st, 2nd and 3rd will dieclose what Jar danger- ous liabilities are. The 4th and 5th will disclose what available resources we have to meet them. Our undertaking must be to convert these resources so that the- can be made available to meet the liabilities. I am confident that it can be done. May I ask you to return the enclosed after reading? Very truly yours, Col. E. M. Housee, Magnolia, Mass. BS/ RAH Encs. October 18th, 1917. Dear Colonel House: With further reference to the printed plan regarding control of security issues, this is to advise that the copy which I sent you was ohly a draft of the report and that the committee is still working- on it. No doubt a number of changes will be made and when it is finally com pleted I will have a copy forwarded to you. This matter seemed of sufficient importance to send you this note of explanation. Very truly yours, Colonel 4.4.01ouse, 115tricot 53rd Street, New York City. VCk ant4a SitT,Z12,11t-1,7-: Dear Sir: transfers In order to oomplete arrangements for handling the large of cash and credit which will be necessary at the tine of payment for the next certain information issue of Liberty Loan bonds, this bank desires to obtain enable it to daily from the banks and trust companies of New York City to deal with the matter intelligently. FIRST The information desired is as follows: Total amount of balances carried with the reporting institution by banks, trust companies and savings banks located outside of the City Of New York. carried by the rencollp Total amount of strict calltheloans account Of out-of-town porting institution for banks, bankers, firms and corporations. THIRD Total amount of strict call loans carried by saoh re(Call loans porting bank for its awn account. classified as strict specified in 2 and 3 to be be those made to brokcall loses should generally dealers, payment of which may be ers and security required an the day Galled, in accordance with stock exchange practice, or an at least not more than three days' notice.) United FOURTH The amount of (a) unpledged obligations of the warrants, (c) comStates Government, (b) munioipal owned by the remercial paper and (d) acceptances porting bank, which are eligible either for discount or as collateral for loans at the Federal re(Definitions of eligibility of these serve bank. classes of securities as specified by the Federal Reserve Act or by the regulations of the Federal Reserve Board are attached.) Pim bank in addition to Seouritiis owned by the reporting end not included in those reported under No0 4, arid which may be accepted by the Federal reserve bank as collateral to secure Government deposits as prescribed by Treasury Department circular Bo. 81 and by subsequent rulinge of the Department modifying the (A statement of the securities define& by the same. This circular and rulings referred to is attached. is subject to changes as and when made by the Treasury :Department, of Which you will be kept ad- visd.) It is requested thr*- r7rrIrt.? railed. to the TWerrl reoerve bank oFw Ce-nv-n-erevyt.e 41, IPA close Or business meinees d: 4 A the figures to include the .2report is made, and to be furnished upon. transactions of the day on which the by this bank. forms which will be provided classes eligibility of may securities of the If doubt exists as to the information bank will be glad to furnish any referred to, the °filters of this required. to plans which are being developed by This request is made pursuant of this disLiberty Loan General Committee cooperation with the this bank in Goverment the financing of the next object of facilitating trict, with the A special disturbance to the money market° avoid =emissary Loan so as to Io. Baker, Walter B. Frewg Gates Wo committee consisting of Messrs. George Wallace9and Benjamin A. Vanderlip, James W. MoGarrah, Charles H. Sabin, Frank of dealing with this has been appointed for the purpose Strang, Chairman, tor. that a prompt response to this reIt is the belief of the committee in the banks to whom it is addressed will be cooperation of the quest and the ratioulll interest. The committee will appreciate a response to this letter. (Copy) Dear Sir: In order to complete arrangements for handling the large transfers of cash and credit which will be necessary at the time of payment for the next issue of Liberty Loan bonds, this bank desires to obtain certain information daily from the banks and trust companies of New York City to enable it to deal with the matter intelligently. The information desired is as follows! FIRST Total amount of balances carried with the reporting institutions by banks, trust companies and savings banks located outside of the City of New York. SECOND Total amount of strict call loans carried by the reporting institution for the account of the out of town banks, bankers, fixms and corporations. THIRD Total amount of strict call loans carried by each reporting bank for its own account.(Call loans specified in 2 and to be classi' fied as strict call loans should generally be those made to brokers and security dealers, payment of which may be required on the day called, in accordance with stock exchange practice, or on at least not more than three days' notice.) FnURTH The amount of (a) unpledged obligations of the United States Government, (b) municipal warrants, (c) commercial paper and (d) acceptances owned by the reporting bank, which are eligible either for discount or as collateral for loans at the Federal reserve bank, fDefinitionS.:_oftlfgibility of these classes of securities as speci fied by the Federal Reserve Act or by the regulations of the Federal Reserve Board are attached.) FIFTH Securities owned by the reporting bank in addition to and not included in those reported under No.4, and which may be accepted by the Federal reserve bank as collateral to secure Government deposits as prescribed by Treasury Department circular No.61 and by subsequent rulings of the Department modifying the same. (A statemenitof the securities defined by the circular and rulings referred to is attached. This is subject to changes as and when made by the Treasury Department of which you will be kept advised.) It is requested that reports be mailed to the Federal reserve bank close commencing... Sept. of business day each business day,/ the figures to include the ELIGIBLE FOR DISOCUNT OR RESERVE BANK. MENTIONED lg AS OOLLATRRAL AT in:MAL PARAORAFR METE. IMORIPTIOff Of ssamens, ETC., (A) UNITED STATES GO-MtENYIN71'EON2§__AnD These may include any bonds, notes or certificates cf indebtedzei:e issued by the Government of the United States. (B)11211=thiraaanc. litznicipel warrants must consist of bills, notes, revenue bonds ane_ wcrrantr with u naturity from date of purchase by ths Federal reserve bank of not exceeding six months, issued in anticipation of the collection of taxes or cf the receipt of assured revenues by any State, County, district, po1it!c,.11 eul)divi,slon or muniotpality in the continental United States, including irriga- tion, drainage and reclamation districte. For further details us to eligibility of munioipal warrente, nee Regulation "E", Series of 1917, of the Federal Reserve Board, (C) =amnia rAmpo 3ligible commefeial paper naat consist of a note, draft or bill of r.rohanaehaving a maturity of not more thAn ninety days9 exclusive Cf days of grace, except parer drawn,or issued for mripultural purposes or based on live of dr.ys ston;c, which may hate a matUiity of not rore than six mouths, exclusive The paper must be a note, draft or bill of exchange, the proceeds of rre been used er are to be nee In an actual commereial transaction,in one or more of the stay; 71 purch;-,elm7, cnrryins or markettnp goods, cess of production, mannfacture, or distribution; and rust not be 1-,oat or fed IntwvAmen`n of any 171nd, ouch us Llna, builtangE 'or invastrifInt F "' rCtv anecul at lye clin.raeter, The ell!dbility of the peper is not affeeted tho pledge of .epods or other collateral. its beine cee! The agereeate of notes. dr-ftc bills bearieg the signature or indoreement of any one borrower rediscount,: any one member banks shall be no tine sceed surelts of welsh bane: lop% of the unineuirod but this restriction does not nnply to the rediscouet of bille.of exchange drumn in geod faith against aotually existing velues, ?or a ftrther detailed description of eligible commercial paper. seo Regulation eA", Series of 1917, of the Federal peseree Bourd, Sectioee 2 for notes, drefte and bills of exchanee; Section 5 for traet acceptances aM Section 6 for agrioeltural paper. (D) agelaagEe An acceptance (other than a trade acceptance) It be a draft or bill of exchange of which the accepter is a bunk sr trust company, or a firm, person, company or corporation engaged in the bueiness of greeting blnors ecooptunce credits. rediacount by the The bill must have a naturity at time of purohnee or Federel reserve bank of not Tv:me than t)tree months, exclu- niee of deyo of grace, and must have been drawn under a credit arened for the purpoee of conductinz or eettling accounts resulting from a tmnseotion or trensactions involving - The shipmett of goods between the rhited States and any foreign country, or between the United States end eay of its dependent:tee or insular peseessions, or between foreign °sentries, or The shipment of eede within the United States, provided the b1/1 at the tine of itc acceptenee is eccompanted by shipping documents, or reef steraeo elthin the meltetiblegokls, rated States of readili nrovided the acee0,11 of is secured by wo.rebouee, terminal r other ceipt, or (.1) The storage within the rbited Stutee of geode whih here nrovided the accepter ef the bill' been a0t3a1l7 in severed 'by the pledre of sudh goode ;ir it 1U &rave - it 4 r. .4Afvendimay sr tnoniar ;sonstzoion of the Mite, States for the ptrpece of fuT- aiehing dollar exdbmge ta this latter case the badl: or banker drawimr ths 'All mist 1)0 in a cctmtry, aovendency, or possession whose tzagos of trade 71Rve 1-i en determined. by the Federal Feserve Boae to require the drumine of billn of this Character. For further detailed description of eligible tocoptances, use Ft,bulatton '1E", Series of 1917, of the Federal Reserve Po ard, Section 4 jel2nign0lfaLeb: (1.) Bonds and Cortifloates of Indebtedness of the United State' Governmemt of any tL) Batas issued under the Dated States Farm Loan Act and bonds of the Philippine Islamise Porto Rico and the District of Columbia; all (C) Botds of any State of the United States: at market value not exceeding pare, CD) Territory of Hawailv 3 1/4 bonds at 90% of par. Other bonds of said territory at market value not exceeding parn Bomds of the Manila Railroad Oompalys at 90% of market value not exceeding issue, including bonds of the Liberty, loan and interim certificates for p47ments therefor; all at par. at ear, 90% of ear 4) Dollar bards and obligations of foreign Goverements (and of the dependenoioe thereof) ergaged in war against Germany and issued since July 30, 1914s at 90* of the market value thereof not exceeding 90% of par. .4; CoUnty or City bonds of any County or City in the United States which are direct obligation' of the County or City as a whole; at 75% of the merket value thereof not exceeding 75% of par- Railroed mortgage bonds secured by direct mortgage upon lines of railroad within the United 2tates, but not including any such bonds Which OL L147 £3, 1917, wore at e market price to yield more than 8 1/4 if held to maturity acoording to standard tables of bond valuess at 75% of the aarket value thereof_ not exceeding earn thi,J Commercial paper which it eligible for rediscount or eurohaee by Federal Reserve Beek.; end which has been approved by the Federal Reserve Bare of the district in leech the depositary bank is located eper mast bear the indorseplent of the depositary bank (I; A.31 sunh TotesD certificates of indebtedness and Torrents issued by any State of the United. States 0 00;: of their maxicat va1t riot 'rrceoding rar REnroad equipment and trust obligatioes at 75% of their marltet vaino. exceeding par. but not including any such obligutions Which or Lay 0.7-. 1917, were at a market price to yield. more than 5 114 e'er annum if held +o maturity acoording to standard tables of bond veltes. cf electric railroad on4 traction companies= telephone end teleeraeh comeatiee ene nleotec light, power and as comories, aecured direct mortgavz ul.f.in their*physical properties it the TinitV ..'-tea and listed on soma recognized atodk exobarge, taken at 'eel ee eerket ralua thereof. mt exoveding par, but not incJudincl bonds 1917,_uer at a merest price to th:71 F annurl If teld to materity according tr. :ireillreseisaerame (N AI. it E 0w A Close of business on (date) isalances of out-of-town oorresrondentE , o Call loans for out-of-town'oorrespondents Gall loans of this bank THIRD 6YRTE Iligible at Federal Reserve Bank iirsible (excluding Fourth) for Government Deposits 4 Cashier, Federal Reserve L- VetW York, October 18th, 1917. Dear Colonel House: Vith further reference to the printed plan re- garding control of security issues, this is to advise that the copy which I sent you was only a draft of the report and that the committee i8 still workin,7 on it. No doubt a number of changes will be made and when it is finally com- pleted I will have a copy forwarded to you. This matter seemed of sufficient importance to send you this note. of explanation. Very truly yours, Colo."' F. .4a0, 115g50 4,1i rd ^, New"rect City. Ne A MEMORANDUM. ADVANCES TO ALLIES: bettsr ur At A constructive program reaching certainly six months into the future or, still better, a year, should be developed as As that will take time, our Treasury might well soon as possible. determine what advances could be made for, say, the next two months and within that limit credits could then be apportioned among our Allies according to a tentative program laid out in conference with them which would not commit us or them as to a further period until :. ,o the comprehensive program was developed. I should suppose that from $180,000,000 to $200,000,000 a month for Great Britain and about 'sri $100,000,000 for France would cover their needs for the next two months. As to Russia and Italy, the need is not so pressing nor for so large amounts at present. ANNOUNCEMENTS: The policy of announcing each advance as made strikes me as liable to cause embarrassment to us and to our Allies. If the Secretary would announce total advances to the Allies, say once a week, it would overcome this difficulty. FINANCIAL LEGISLATION: I am convinced that the amount provided by Con- gress for advances to our Allies will be inadequate for even a six :WS AFT months' program, that generous financial support promptly accorded at this time will be of greater value than later and I hope that our government will find it possible to secure all necessary legislation at this session of Congress to enable our Treasury to give our Allies the fullest possible support. 0' GENERAL ORGANIZATION: The development of a program (financial, food, mu- nitions, shipping, etc.), based upon existing legillation cannot be concluded satisfactorily without a better understanding of the requirements. To accomplish this, possibly the following principles might be helpful: The whole subject of furnishing food, military supplies, transportation and credit should be governed by considerations of military necessity. the seat of war. Those considerations can only be weighed at The general policy might, therefore, be worked out by an international commission on which all of the Allies would be represented, (United States, France, Great Britain, Russia, Italy), which would sit permanently in Paris, the membership of whichzispuld be composed of the ablestmen available to deal with commercial, industrial and transportation questions, as well as finance. The mem- bers of such a commission should be ssupported by an adequate staff of experts. nation It would determine priorities between the Allies, each retaining priority for its own needs, out of its own resources. If such a commission were created, this country would shortly occupy its natural position toward the war. We must organize as an immense farm to produce food, an immense factory to produce military and other supplies, an immense transportation system to furnish rail and water transportation and an immense bank to finance the pur- chase and transportation of material. The organization in this country would properly direct its efforts to fur4ishing those things and in such quantities to the respective allied powers as recommended by the commission sitting in Paris. The local organization in this country might consist of: First. A Purchasing Board: This Board would distribute and execute orders md its technical stati would see that quantity quality and deliveries were as required. -3she: Second. A Price Fixing Body or Board: Such an oreanizationwould stand between the country's regular commerce and industries and our government in its war requirements and settle questions of prices. eve. Third. A Priority Board: This organization would settle all questions of priority of delivery as between our government and its Allies on the one hand, and other customers on the other. It should co-operate with the Commission sitting in Paris. 4U Q.C$': A Fourth. Foreign Representation: Each of the Allied governments must, of course, be represented here by competent commissions with full authorities, whose functions should be exercised in co-operation with the Purchasing Board and would include making contracts, anoluding financial arrangements with our Treasury, paying for goods purchased, inspection before shipment, eta. Fifth. in such a The Treasury: The function of echeme of organization would be the 1 raising funds, apportioning credits according needs and paying the bills, being governed by made by our reprosentativen on the commission our 'Treasury normal one of to the agreed representations sitting in Paris. The organizations subordinate to the Purchasing Board would have a useful place in such a scheme but would be controlled in their activities, first, by the Purchasing Board; second, by the Board fixing prices and, third, by the Priority Board, all of which would coordinate through the Purchasing Board as the central organization. This general plan is based entirely upien the principle that our participation, in the war and all qctivities growing out of it must be governed by military necessity which can only be deter- mined at the seat of war. GOVERNMENT LOANS: The experiences of the past three months convince me that a much larger credit will be needed than that now provided by Congress. A perganent, nation-wide organization must be created at once in order to facilitate government borrowing. Congresq,, -4- should, I believe, authorize a large issue of short term notes with a greater variety of character so as ts meet the needs of different elases of iimestors and savers and it should confer greater authority upon the Secretary of the Treasury in fixing rates of irterest. 14' A permanent paid organization should be promptly developed by the twelve reserve banks which could be expanded and contracted ae new loans were placed. At the same time, a sepa- rate organization should be provided at, once to develop saving in detail among all classes of people. ' These savings should be seggregated, temporarily invested in the government's short obliga,ione and then converted into permanent loans when issues are Only such a plan, which anticipates and earmarks in admade. vance, will avoid increasing pressure upon our bankihg system and possibly its dislocation. Our participation in the war makes a certain expansion of bank credit necessary and inevitable. This can be sound or un- CURRENCY: sound according to the skill with Which it is managed. Al]. necessary legislation has now been enacted with the passage of the amendments to the Reserve Act and a perfectly sound empansion of vast proportions is possible, provided the reserve banks are able to assemble a much greater proportion of the country's gold supply even than the amount already held about l,300,000,000. This reeuires large issues of Federal reserve notes, to take the place, dollar for dollar, of small denomination gold certificates, but if successfully conducted will place an immense burden of expense upon the reserve banks. I would strongly urge that the Secretary of the Treasury immediately discontinue issues of gold certificates in denominations of ten and twenty dollars and that the Federal Reserve Board ments for instruct Federal reserve banks to furnish all require- currency in their respective districts by issues of Fed- eral reserve notes on which they should pay the shipping charges. Congress could then be asked to make the Bureau of Engraving and ing Federel reserve notes. currency, the cent of which an appropriation to enable Printing to defray the cost of preparThe sovirg to the government on other it now bears, will largely offset this added expense. To are fecirg the possibility of a great shortage of bills of one and two dollar denomination. This can be met in advance of the Fall demands, which will be heavy, by reissuing large denomination silver certificates and United States notes in one and two dollar denominations. Each reserve bank should be instructed now bills to This will increase the vacuum to be filled by further issues of Federal reserve notes and the simultaneous withdrawal of gold certificates above suggested would automatically draw gold into the reserve banks without causing accumulate these comment or possible against the Fall demand. alarm. This accumulation of gold will offer a basis for credit expansion which can be controlled within safe limits by the discount rates of the reserve banks. TRADE WITH THE ENEMY: House Resolution No. 4960, introduced by Mr. Adam- goods, but fails adequately to impose restraint upon foreign exchange transactions and shipments of gold A and provides no organization for supervising such transactions. son, covers transactions ir body should be created for the purpose of supervising all possible -6enemy exchange operations and gold shipments, and this body should have power to require reports and production of papers and records. A letter covering this mmtter has been sent to Mr. Frank L. Polk of the State Depkrtment. At the present time we are importing gold from England which is COLD: being re-exported to Spain, Cuba, japan, Canada and South American countries. The unwisdom of this development is apparent. The demmd upon our credit system will shortly be so great that we must not only preserve but augrert our gold base, even if it irvolvss curtailing trade and credit transactions with neutral countries. Whatever organization is developed to deal with foreign exchange should have authority to deal with this matter. WELLIVER, Judson Churchill (wEl'i-vEr), corp. exec.; -b. Aledo, Ill., Aug. 13, 1870; 0. Morrison and Alum (Ilarroun) W.; di. pub. schs., Fort Dodge, Ia., Cornell Coll., Ia.; m. Jane Douglas Hutchins, July 3, 1899; childrenEdward M., Allan J., Sarah H. Jane Douglas_ Newspaper work, Sioux City Journal, Sioux City Tribune, Des Moines Leader; later pont, editor and editorial writes Washrngtoo Times, and Frank A. Munsey newspaper.; sent to Europe by President Roosevelt, 1907, to report upon waterway systems of Europe and Great Britain, the companies' laws of Great Britain, and railroad situation in Europe, report pub. in Report Inland Waterways Commn., 1908; London corr. and European mgr. N.Y. Sun, 1917-18; In charge publicity at Harding hdqrs., Marion, 0., Miring 1920 campaign, and attached to the White House organization atter Mar. 4, 1921, occupying a confidential relation to Presidents Harding. and Coolidge until Nov. 1. 1925, resigned; dir, public relations with Am. Petroleum Inst., 1925-27; editor The Herald, Washington, D.C., 1928; asst. to ores. of Pullman Co., 1928-31; di, public relations Sun Oil Co.. Phila. Clubs: Players (New York); NAIL Press (Washington); Pen and Pencil, Penn Athletic (Phila.). Conlin. to mugs. Address: 1605 Walnut St., Philadelphia, Pa. Died Apr. 14, 1943. January 17, 1S)23 Dear Jud: A guess have to hand it to you as the boy what knew vot's wot and why. But if he can understand the wave of banking expansion now under way, and do what he may to keep it within bounds, he will surely deserve well of his country. With warmest regards, Always yours, Judson C. Welliver, T4sq., TNecutive Mansion, Washington, D. C. TH WH I YE HOUSE WASHINGTON January 22, 1927:. Dear Carl: I do not kn w whether anybody in authority will agree with m views, but personally I think you are pain lly correct in your information that another in ation is under way and that there is danger t at it might have disastrous consesuence. 1 you are in this town any time soon I would lik a Chance to talk with you abo I thi , the administrahave need t tive author exercise a good deal of wis t a time when atever they .t may be is certain to be a in of violet Vcriticism. It was my personal i41-f-epme1444aLJOIA__ 'E. cV-, the big inflation or 1919 might have been discouraged by timely effort to enforce moderation; but instead the screws were applied after it was too late. We all know the serious results. I an certainly hoping that a re-Ai:ion of that experience can be anci7ould be mighty glad to have your avoided/ information about what ought to be done about it. SLLoerely yours, 1,r. Carl ,-.;:hyder, 15 Nassau Street, New York City. I THE WHITE HOUSE WASHINGTON January 22, 192:',4 Dear Carl: I do not kn w whether anybody in authority - will agree -with \views, but personally I think you are pain -11y correct ih your informa-tion that another in at ion is under way and that there is danger t at it might have disastrous consequence. 'f you are in this town any time soon I would lik a chance to talk with you abo I thi the administrative author have need t exercise a good . deal of wisdwt a time when may be is certain to be a atever they -t n of violet VL--- criticism. It was my personal 1-R-geiftWN2_1112I____ ' cVL-._ the big inflation of 1919 might have been discouraged by timely effort to enforce moderation; but instead the screws were applied after it was too late. We alltknow the serious results. I an certainly hoping that a repetion of that experience ban be avoided and would be mighty glad to have your inforation about what ought to be done about it. Sincerely yours, rl Snyder, ssau Street, ew York City. Mr. 15 .LIkette.t.t.t2,1 C No Federal Reserve Bank STRO IUG P PP ER S District No. 2 Correspondence Files Division SUBJECT S PRes/DEAri-S /7/4 - - (/. ot, ' /71 Form OF SERVICE SYMBOL Day Message ICLASS Day Letter Blue Night Message Nile Night Letter NL If none of these three symbols appears after the check number of words) this is a day message. Otherwise its character is indicated by the symbol appearing after the check. WESTE0,sm UNION TEL AM WESTERN UNION NEWCOMB CARLTON, PRESIDENT GEORGE W. E. ATKINS, VICE-PRESIDENT BELVIDERE BROOKS, VICE-PRESIDENT RECEIVED AT CLASS OF SERVICE Day Letter Blue Night Message Nite Night Letter NL If none of these three symbols appears after the check number of words) this is a day message. Otherwise its character is indicated by the symbol appearing after the check. -)enver, Colorado, December 21, 1916. Honorable Joseph P. Tumulty, The "Alite House, Washington, D. C. All you kindly convey to the President my conviction that his efforts to restore peace in Europe will be rewarded with success and with the enduring gratitude of the world. His determination that our awn country shall share in the obligations and benefits of some arrangemont between the nations to prevent future warfare cannot fail to remove the chief obstacles to success :.Ind I believe will receive the support of public opinion hare and abroad. Benjamin Strong. Chg..- Benjamin Strong, 4100 Montviaw Blvd., Denver, Colo. SYI Day Message Form CLASS OF SERVICE SYMBOL Day Message Day Letter Blue Night Message Nile Night Letter NL If none of these three symbols appears after the check number of words) this is a day message. Otherwise its character is indicated by the symbol appearing after the check. WESTE 47ASKNA WESTERN UNION TEL IRLNWIN UNION AM NEWCOMB CARLTON, PRESIDENT GEORGE W. E. ATKINS, VICE-PRESIDENT BELVIDERE BROOKS, VICE-PRESIDENT RECEIVED AT CLASS OF SERVICE Day Letter Blue Night Message N ite Night Letter NL If none of these three symbols appears after the check number of words) this is a day message. Otherwise its character is indicated by the symbol appearing after the check. Denver, Colorado, December 21, 1916. Honorable Joseph P. Tumulty, The White House, ';iashington, D. C. Will you kindly convey to the President my conviction that his efforts to restore peace in Europe will be rewarded with success and with the enduring gratitude of the world. His determination that our awn country shall share in the obligations and benefits of some arrangement between the nations to prevent future warfare cannot fall to remove the chief obstacles to success and I believe will receive the support of public opinion here and abroad. Benjamin Strong. Chg. Benjamin Strong, 4100 Montview Blvd., Denver, Colo. SYI Day Message THE WHITE HOUSE WASHINGTON Dear Mr. Strong: I aril sending you herewith a letter of introduction to our Ambassador at Paris, which I hope will be of service to you. With best wishes for an enjoyable and safe trip, Cordially yours, SecretEry to the President. Hon. Benjamin Strong, Jr., 62 Cedar Street, New York City. enclosure. January 24th, 1916. dear Mr. Tunulty: Your favor of the 22nd, enclosing a letter of Intl-eduction to our Anbassador at Paris is just received and greatly appreciatea. Please accept my thPrks and believe me, Cordially yours, J. P. Tunulty, Esq., The White Aouse, Washington, D. C. VCI'd Denver, Coloradov. karCh $0, 1917, Dear!. President: have just received the following'telegram fram my son; 'Regiment mobilized. 11ay leave today. Destination 7 uncertain." - He is twenty years Old and. a Sophomore at ',11.*cOoton University. .0 He joined the National Guard about a year aSo_pf hisiorn volitim, and .. 4..._ -----:------1 i - solely from sense of duty. He is one ofmanythousands of boys who ----.., are doing the same thing, from the ati;Tiabtives. Esving cls;erfully al- V /,/ lowed him to volunteer for the,:Conntry's service, I feel justified in /7/ ,,,, , 1 3 unoise and dangerous expressing my protest against the ndowooratle, ,..' - 4" astem of volunteer military-Berne°, -,\ 7anyhich our country must now 1/7 depend unless our laws are _ i 4 -- \s \ Any system for I should say 1' oul _c . - - of system, which encourqges -\ boys of his;.t.ge to spade what kind Iofi duty they shall perform in time _hi of Nat1 onal peril is wronzsp---Censideration cannot be given under this syst // -----''' \\.' to special qualifications of the individual. Those whose trainin3. 1-\\ i miz;h make thorn of greater value elsewhere than in the army or the DaVj, ..\ // arc aft rded no opoor_tunity or encouragement to give their best service. The great raid-OT those who voluntarily enlist, possibly to go to the front and lose their lives in the ranks, are those who can least be spared and, generally spvIcirtg, I believe they arc the ones whose enthusiasm for public service would enable the to qualify most promptly as efficient officers. am letting this boy leave college for military duty in the 2. conviction that ho vill be doing a large share of the service Which should be done by men viilo stay at home, who are glad to stay at bone, who are glad to escape risk and hardship by taking advantage of his patriotism, and all because our Government does not see fit to equire a fair and equal distribution of service of this kind 0302%:.; its cit 'seas. i(// Should our country depend for its prrection in time of war upon the gift of the lives of the best youth of ha country any mbpe than it 1 should depend for its revenues 1;91.ra-of-tease upon dona ons of money by those who are patriotic elle) gh tO give itf Mot respectfully 1 4141 writing to urge grass and the resIonke oA at it is tine that Con- ars of our GovArnment undertook to remedy this Matter. There are man-fathei's-of-boys who, like the writer, believe - that their sons are lik/ ely o ome the victims of a perilous weakness in our Country's affaira, and rtho,'are looking to you, as I am, to urge Cong4to wet a .114pOr dlitary service law. Resnactfully yours, Hon. Woodrow ?resident of he United States, Washington, . C. BS/CC. THE WHITE HOUSE WA S H I N GTO N April 3, 1917. My dear Mr. Strong: For the President I beg to acknowledge the receipt of your letter of the 30th of March. I shall be glad to call it to his attention at the earliest possible moment. Sincerely yours, - Secretary to the President. _ Mr. Benjamin Strong, 4100 Montview Doulevard, Denver, Colorado. Misc. 34 1DERAL RESERVE BANK OF NEW YORK Sent by morem (SEND TO FILES) IPAT DAY MESSAGE COPY oT13917tttGRAM rilLJUNCI K1, JUN -11917 ZulLre May 31, 1917. Joseph P. Tumulty, White House, Washington, D. C. Would it be possible for me to have an appointment to see the President for a few minutes at any time to meet his convenience? Stop. Ulm go to Washington any time. Stop. Would appreciate re- ply by telegram. Charge Digitized B - 5 for FRASER LibsstyxLetn, Treasury Dept. Benj. Strong. 120xlitilkarty4 Official business. Government state. CLASS OF SERVICE CLASS OF SERVICE SYMBOL SYMBOL Day Message Day Message Day Letter light Message Blue Day Letter Blue Nita Night Message Nits Night Letter NL Night Letter NL If none of these three symbols If none of appears after the check number of words) this is a day menage. Otherwise its character is indicated by the appears after the check number of worde)th is isaday message. Otherwise Its character Is Indicated by the symbol appearing after the check. GEORGE W. E. ATKINS, FIRT VICE-PRESIDENT NEWCOM B CARLTON, PRESIDENT RECEIVED AT r' B147W 20 GOVT AN ANS THE WHITE HOUSE A SHINGTON DC 12461' 1 BENJAMIN STRONG NEWYORK TELEGRAM RECEIVED THE PRES I D NOW WOULD APPRECIATE A LETT these three symbols REGRETS HEbANNOT SEE YOU J P TUMULTY. symbol app acing after the check. 1 JUN --41917 arA2ri lb/J.2 Jane 2, 1917. Dear Mr. Trtmulty: have received your telegram with regard to an appointment with the President and, of course, realize the bxtent of demands of this character upon his time. .A statement outlining the matter with regard to whioh I wish to see him will be prepared and sent to him as soon as possible, and if arrangements can later be made for re to have the interview I will greatly aRre- elate it. Very truly yours-, Oovernor. Honorable Joseph Tumulty, Seeretary 60 the President, 'Washington, 1.). C. BS/ RAI 'DERAL RESERVE BANK OF NEW YORK (FOR BINDER) SentbellS:VDM FAST DAY MESV.'i ,ESTER UNION flg(77. COPY OF TELEGRAM October 8, 1917. Joe. P. Tumulty. TrirlIntteiriftW Warhingtcn, D. C. Tried to roach you On Saturday and Sunday in endeavor to find if you could hold out any encouragement regarding subject of our conversation in connection with meeting at Carnegie Hell on eighteenth. Stop. Have discussed matter with associates here and they think it exdeediegly important that thiu plan be carried out if possible along lines of What is at stake in the war. Stop. We all feel this would stimulate the whole country as well as Liberty Loan Organizations to greater effort, which is much needed,as returns re somewhat discouraging. Stop. Have arranged to hive Committee go over to aehington if you can offer any encouragement but pressure of work on Liberty Loon is so great they await word from you before doi,g no. Stop. Will be glad to go over again myself if necessary and you think it advisable. Stop. Am anxiously awaiting an ewer. http://fraser.stlouisfed.org/ 5-4 Federal Reserve Bank ofcherre St. Louis Stronr, Governor. .3,MOIllI1 V ...los L-ara WASHINGTON 9 October 1917. , emit el Ihit cr4 Dear Governor Strong: Your telegram of yie ninth of October is before me, and I hive taken its contents He does not feel up with the PresideXt. P that the time is pportune for him to speak in behalf of thi Liberty Loan; but as there are several mcke campaigns of this sort to come, he th ks he ought to reserve himself , for a late should p effort in case the subsequent loans ve more sluggish than this one. am sure/you will appreciate the situation. Sincerely yours, Secretary to the President. foil. Benjamin Strong, 11:' S. leedere.Reserve Bank, . New York City. I October 10, 1917. Dear 1r. uraralty: Your note of yesterday has just reachdd me and naturally is disappointing. It seems to be necessary that I should explain the exact situation in retard to the Liberty Loan, as it will meke clear why I have felt so urgently the need for assistance from the President at this time. war. The people of this country do not yet realize the issues of the The object of the meeting in earnetie Mall, when Lord Reading ie to make an address, is to submit to the peoele of the country the fact that the issue in this war is constitutional government. The president alone can give the meeting exactly the character and influence desired. But there are other considerations bearing on the success of the loan which are causing us much anxiety. The burden of taxation to be imposed by the new revenue bill will necessarily be very heavy. It partic- ularly applies to corporations which, while they have wade large profits, have at the same time so increased investments in plant and inventory that they must borrow heavily in order to pay their taxes. And to add to the difficulties of a very complicated situation, many of the large railroad systems of the country and the holders of their securities are also beginning to have gravd anxiety as to their ability to raise money or absolutely necessary purposes, including refunding, and to make heavy tax payments, during the period that such enormous demands are being madd by the Government upon the money makkets. It is no exaggeration to say that the country's money center has Joseph P. Tumulty, Esq., #2 12/107. developed a desperately gloomy view of the outlook, which is seriously af- fecting the results of our labor of placing the Government's bonds. I believe this can all be sweet away and the last weak of our campaign be made a stampede if the President could arrange to make an address in New York and make it one of confidence and reassurance. It is probably unnecessary for me to state in detail what is being done here to insure stable monetary conditions in the Government's interest. This bank Is lending its resources just as freely as may be demanded of it. The banks of the city are taking hundreds of millions of the Government' obligetions every weak or two in order that temporary finencing may be successful pending the bond issue. sixty seven of the largest New York City banks and trust companies have undertaken to lend generally in the money markets a total of 4231,000,000., which amount they will firms end institutions increase if necessary. The represented on the Liberty Loan Committee, of Which I am chairman, heve just entered into an obligation to purchase up to 4100,000,000 of the outstanding 3 1/2% bonds and the new 4% bonds in order that they may not sell below par while the new issue is being placed. with total resources of e1,600,000,000. have Reserve System. Trust companies been brought into the Federal Other things of less importance are being done as needed, but it is nevertheless a feet that e ereat deal of concern exists in financial circles as to the outlook for the railroads and corporations that must soon be heavy borrowers. and nothing will change this situation so positively as an address by the President. I also want to point out one important feature of this loan. minimum of 0,000,000,000. must be greatly exceeded. The If this loan is very heavily over-subscribed, succeeding loans will be undertaken with a degree of confidence that will not exist if this one is barely sold and no more. Tumulty, Esq., 10/10/17. In other words, I believe, to make this loan a success will have a greater effect upon subsequent loans than anything else that can be done, and it is most important that we should not approach the spring, when even larger borrowings must be effected, with a feeling that the financial situation mast be rescued, but rather that it does not need rescue. You will be interested to know that we have now, according to the best estimate, about one hundred thousand people in this district working on the loan. They themselves today need encourarTement. I regret very much feeling the necessity for writing so urgently on this matter, but feel sure that the President realizes that the men who are associated with me in this work are devoting evc;ty energy and resource at their command to make the loan a success, and I am convinced that nothing will be so encouraging and contribute so greatly to making their labor a success as the support of the President's well known courage, publicly stated at this time. Very truly yours, Governor. Joseph -5?. Tumulty, Esq., Secretary to the President, Washington, D. C. Bs/Titin September 21, 1916. My dear Mr. President: Your kind letter of 3eptember 1011 is received this morning, and makes me feel rather guilty in possibly having appeared a little insistent about our invitation. You must, I am sure, understand the earnestness with which this great entreprise is undertaken by our entire organization, and it may be on that account that we do not always consult the convenience of others as fully as we should. really hesitated to send you an invitation at all. ly inspired by I It -vas particular- the fact that after a year an a half, during which the people of this city, and particularly the bankers, have submitted themselves in wonderful fashion to the views all matters pertaining to the war, any at this time would be the greatest and wishes of the Government in recognition which could be made possible assistance in connection with the loan, and, if I may say it, to me, personally, in a very arduous task. We all wish for you the greatest possible freedom from anxieties, in these days when it seems as though new anxieties developed every day, and, particularly, health and strength to complete your great work. Cordially. To the President, The ';,:hite House, Washington, D. O. BS/1433 Governor. THE WHITE HOUSE WASHINGTON 2 October, 1918. dear Governor Strong: That wee certainly a most generous letter you wrote me on Monday, and I thank you for it very warmly. You may be sure I rendered such service as I did render with the best will in the world and most gladly. Cordially and sincerely yours, Hon. Benjamin 2trong, Governor, Federal lieserve Bank, New York, N.Y. THE WHITE HOUSE, WASH I NGTON. To the President: Cables from France today indicate a continuous advance of the American forces over a front of twenty (20) miles from the Argonne Forest to the Valley of the Meuse, North of Verdun, passing beyond the Hindenburg line on the entire front and gaining back one hundred square miles of French territory. The movement was sharp and rapid. casualties were light. MARCH Our November 26, 1918. Dear Ur. Zumulty: I am to-day addressing a letter to the President, of which a copy is enclosed, and am anxious that it should reach him at the earliest possible moment. If you find opportunity to also convey a message to the president from me, I would greatly appreciate your say- ing to him that if there is anything bearing upon this important matter concerning which I am writing him, which could be in any way elucidated by my going to Washington to see him, I will go instantly that I get word, which could be conveyed to me over the Treasury Department private telephone line. With kindest regards, I am, bincerely yours, Honorable J. P. Tumulty, Secretary to the President, The White House, Washington, 0, a,, B3/USB Enc. November Z6, 1918. ,;ear Ir. President: My only justification for writing you thls personal letter is tbo sonosrn which I oar. UJLhelp feeling As to the Goverament's fi- nauoial program fol1owini3 Secretary MCAdoo's resignation, and I venture to write yau this frank letter containing au ailression o: my osn views with the hope that you will realise that it Is dictated solely by a destrs to be of some slidht survise in this matter. iisoretary loAdoo has acoomviishad, in his administration of the Treasury, a most wonderful achievement, largely because of his sourage nld Liz full appresiation of Vas sound monetary And financial principles union mast govern the finanoing of t4e war if 0122 country io to escape suan disastrous oonsequences as nross through the raiz-handling of cur finances during the Oivil War, and snah au I fear will be encountered by some of the belligerent nations of Zurope in futuro years. He is leaving hia office I am sure from nesessity which is santrolling, at a ticsv'ren our problams ars inoreasinz in difficulty, rather than the reverse, and when it will require a strong band and sound judgment to ie U.3 from the undoing of much of hi a good woric of the past. The Im- portance of the program of tax legislation he 4as Pally realized. I am :pot so sure that his ouoseasor will. The future borrowino of LLe Government for at least six months, and possibly longer, will probably be of larger amount than at any period, and the difficulty of placing these loans will now be vastly greater than the diffiaulties encountered during the perio4 of ,, ative hostilities. Thero is owirs.; to us eight billion dollars by foreign governments, the terms for the adjustment of which indcbtadseas hnvo not .;, ot ,bosit rettlol, end, upon tho settleyent of these terms very much of our future prosperity will depend. Problems will shortly arise in the international exchanges growin out of the trellondoas otlatv,Ti in our International trade, waioh 044 only be dealt with by one uf the fully familiar with the ieloji hiJtory 32 tho Treasury Jepartmeht up to the present time. As a result of the elections. We 41'0 . 41.1:rozturvately, Q.'Jaroated with the deporable situation where an adverse, and possibly hnstil° politleal party will be in control of dongress aad will not sontinuo a symnathetio-..upport of Use policies or -She admi.nistration. We may L,e threatened by a revival of demands for a protective tariffi which would mermaoe j1.22' futnre prosperity aed finhnaial security. It is not impossible that, strive as you may to avoid such a development, the results of she peace conference will not protect the world Against a reversion to a speoies uf commercial barbarism in the strife which may be sr.:nested to arise in the effort of the crippled nations of urope to reestablioh and rehabilitate their foreign business. Sheet No. 2 Henorable oodrow 411son 11/26/18. All of the various difficulties reach into And effect aur demestic finanoial position, and in an important way our international fir-ncial relatieos. Probably you unleretarl elate fully thet my or relations with eecretary licAdoo and his associates and, generally, with the nreasurs Derartmeat, heve affoedel me a knowleege of the worleini;s of the department, of the men in the organization, and of the prebleme with whie, it ha e ieelt, of more intimate a nature than almest aayone outside or the department itself. The object of ttis letter le, teorefore, meet respectfully to urese upon your Attention the grave noeeesity that Secretary e:cedoo,e suocesser shar be a men of the greateee thet oen bo found, who would un6ertake the work still unfinished in the e,pirit of patriotism and with no other purpose tnen to cc the eeuntry -t,t1,1f4 ansi fertifted ageinet the piny dengere which menace arAlvea and the thole world. I am fully aware, Xr. Preeident, that a situation He grave an that eitak whleen 4e are Low eonfronted eonid 8602 to demend the apnointment of aome one who would commnnd the oonfidence of everyone by reason Of a reeerLI with whie everyone le tally acquainted. It is probably a fact that 7ecretary cedoo has been able to aommand, to a degree never aajeyed by ley of hie 17redecessora, the oonfidence and respect of the benkere of the country. This haz been due to his courage. ability and resoarcefulnees, end, in pert, to the admirable selection of associates and assistants that be hns !le. I know all of them, and know of the un- eelfisil, patriotic epirit in ei.ice they have undertaken their duties. Dolieving as l do that no consideration will be allowed to enter into this matter except that of the public welfare, I have become convinced that the interests of the netion will be best served if ciroumstances permit of the akpointmert of e7r. Leffingwell to sueceed Seeretary UcAdoo. lie has carried a very large share of the burden of that office during the period wher. necretery Kcloe has been in charge of the railroads. Aecesearilye he has had a very intimate and direct contact with the Eederal reserve ben:es and generally with the benlecre of the country. He commands their reepect and confidenoe. The advantage of appointing eomeone Of hie experience and irtinate kuoeledere of the vane-tie problems, to which I or outweighs, I believe, every consideration that might be advanced in favor of eome other avointment, such, for Inetance, as the advantage of ap- pointing someone who is better known as a financier and statesmen. The chancee are that he hts not the remotest thought of such an appointment, and were it suggested to him I an inclined to believe that he would not feel ::eeltfied to accept it. I am oonfident, hover, that ha is fully capable of filling the office; that he will do so with credit to himuelf and to tha Jepartment and to the entire satisfaction of the country generally and particularly of the bankers who must be relied upon still for many months to come for unreserved support of the Treasury 3heet No, 3 Honorable Toodrow Wilson 11/L6/18. :Afepartment. - You will, I am sure, understand the object of this letter. :::tve never before fell; justified. it addressing si:loh a letter to you, , do so only '000aase of vau onoloqs-les of tho imlort,ine of matter and of Lly intkmate familiarity with the voec of the ,asury Dekartment. With aesuranles of m4 esteem, bcz to ramain, Respectfully youl%-,, o tho Present, The "vhi.te 1101148, c. THE WHITE HOUSE WASHINGTON November 27, 1918. lay dear Governor Strong: I have received your letter of ovan 26th, and, in accordance with your request, have brought the communication to Whi h you refer to the attention of the Presiptent. Sincerely yours, Secretary to President. IftemMMOKSEINIINMOWTOMPAPia. Hon. Benj. Strong, 15 Nassau Street, rew York City. THE WHITE HOUSE WASHINGTON Novenber 27, 1916. lay dear Governor Strong: // I have received your letter of Novem 26th, and, in accordance with your recilrt, have brought the communication to Whi,Ch you refer to the attention of the kresiAent. Sincerely yours, '4e Secretary to Hon. Benj. Strong, 15 Nassau Street, Eew York City. 4 President. cc Cs. THE WHITE HOUSE WASHINGTON 28 November, 1918. My dear Mr. Strong: Thank you sincerely for your 26th. etter of November This is a very brief acknowledgement, because of the hurry of the day, but you may be sur14 that your advice will not receive brief consideration. / and sincer ly yours, /Cordially Hon. Benjamin Strong, 15 Nassau Street, New York, II Y. THE WHITE HOUSE WASHINGTON 28 November, 1918. Ly dear Er. strong: Thank you sincerely for your rter of November 26th. This is a very brief acknowledgement, because of the hurry of the day, but you may be sulè that your advice will not receive brief consideration. / Cordially and sincer i(ly yours, Hon. Benjamin Strong, 15 Nassau Street, New York, N Y. Form 1220 iMBOL CLASS OF SERVIC : SYMBOL Telegram i.4111fr Blue Nite Blue Night Message Nite NL If none of these three symbols NL -bree symbols the check (number of Night Letter ,.. is a telegram. Otheraracterit Indloatedbythe appearing after the check. Day Letter appears after the check number of words) this is a telegram. Other- NEWCOMB CARLTON, PRESIDENT GEORGE W. E. ATKINS, FIRST VICE-PRESIDENT wise its character is indicated by the symbol appearing after the check. &COVED AT 40 BROAD STREET, NEW YORK CITY 47:; AON 102 GOVT TH 4UITE HOUSE WASHINGTON DC 345P 16 Sti3 BENJAMIN STRONG FEDERAL RESERVE BANK 15 NASSAU ST NEWYORK NY AM DESIROUS OF INCLUDING YOUR NAME IN THE FORTHCOMING CONFOlitfl ON UNEMPLOYMENT TO BE HELD IN WASHINGTON IN ABOUT TEN DAYS ST',. OBJECT OF THE CONFERENCE IS TO INQUIRE INTO THE VOLUME AND DISTRIBUTION OF UNEMPLOYMENT TO ADVISE UPON EMERGENCY MEASURES CAN BE PROPERLY TAKEN BY EMPLOYERS AND LOCAL AUTHORITIES AND BODIES AND TO CONSIDER SUCH MEASURES AS WOULD TEND TO GIVE IMftL_ TO THE RECOVERY OF BUSINESS AND COMMERCE TO NORMAL STOP GLAD IF I COULD HAVE YOUR ACCEPTANCE STOP I I W01.11-1= DO NOT PROPOSE TO MAKE. ANY PUBLIC ANNOUNCEMENT UNTIL THE LIST IS COMPLETE WARREN G HARDING 403P 11 4a. ./ Ytt THE WHITE HOUSE WA SHIN GTO N September 26, 1921. My dear Governor Strong: I had your note of September 20th and very much appreciate the spirit of helpfulness which is given expression therein. I have told Mr. Hoover of its contents,and have no doubt he will welcome the helpfulness which I know you will be able to afford him. Please know of my awn appreciation. Very truly yours, Hon. Benj. Strong, 1718 H Street, Washington, D. C. çJ I-' /1 IN VCTHE WHITE HOUSE WASHINGTON September 26, 1921. My dear Governor Strong: I had your note of September 20th and very much appreciate the spirit of helpfulness which is given expression therein. I have told Mr. Hoover of its contents,and have no doubt he will welcome the helpfulness which I know you will be able to afford him. Please know of my awn appreciation. Very truly yours, Hon. Benj. Strong, 1718 H Street, Washington, D. C. May 26, 1922. My dear Mr. President: With considerable' reluctance I am asking for sufficient of your time to read the following comments, which I em taking the liberty of addressing to you, in regard to the bill which has just passed the Congress, providing for an additional member of the Federal Reserve Board, and containing in addition a provision that no building shall be constructed by a Federal reserve bank at an expense in excess of *250,000 except with the approval of Congress. The latter provision I understand does not apply to buildings now in course of construction. As to the provision regret its necessity. enlarging the membership of the Board, I deeply It appears, however, to afford the opportunity, if you should think it wise to do so, to reappoint Governor Harding as a member of the Board and Governor of the This I believe is essential to the welfare Board. of the System. As to the limitation upon building operations of the reserve banks, that this is the first step by Congress in the direction of a political and legislative control of the affairs of the permit me to respectfully maggart banking system, which, if extended as may indeed be impair its usefulness hereafter legislative restriction, which and to subject the case, is liable to it to repeated and progressive in the long run will be dangerous if not fatal. Executive assent to this first step would appear to me to be encouraging to those who are now criticizing legislative supervision. the Syetem,towerd the extension of this sort of May 26, 1922. 2 You will, I am sure, understand, my dear Mr. President, that I am submitting this personal expression of views to you most respectfully from the most disinterested motives and because I believe it to be in the interest of the Federal Reserve System and of the country that the bill should be vetoed. as to the bank buildings were If the provision omitted I would not feel this way - in fact, in my last talk with Secretary Mellon I took the liberty of expressing the view to him that I thought the enlargement of the Board by the addition of one member, as proposed by the bill, was the only method by which the subject of agricultural representation ma the Board could be dealt with se as to avoid sacrificing Governor Harding. If it might appear to you that I am guilty of any impropriety in writing to you directly on this subject, I hope that you will ascribe it to the deep interest which I feel in the welfare of the Federsl Reserve System, with which I have been connected since its organization, and in the service of which I have given some years of hard work and anxious thought. With g-.seurance of my esteem, believe me, Respectfully your, Benj. Strong, Governor. To the President, The White House, Washington, D. C. BS.Mik - WHITE HOUSE WASHINGTON FILES JUN 9 ADERAL 1.4."'' Riii, RyyjifikV, 1922. ,JF My dear Mt. Strong: I am writing to acknowledge yours of May 26th, which came to me through the Secretary of the Treasury, expressing certain Objections to the amended Federal Reserve Act as presented to me for signature. I recognize the force of some of the objections offered, but I very much question the wisdom of returning the act without approval an that account. I trust we shall be quite able to maintain a helpful and dependable course under the modified provisions of the act. Very truly yours, Mr. Benj. Strong, Federal Reserve Bank of New York, New York City, N. Y. E VVH ITE HOUSE FILES 0 WASHINGTON JUN 9 ELEAL - P_FZ-t R \iTjt*V) 1922. Nzvi My dear Mr. Strong: I am writing to acknowledge yours of May 26th, which came to me through the Secretary of the Treasury, expressing certain objections to the amended Federal Reserve Act as presented to me for signature. I recognize the force of some of the objections offered, but I very much question the wisdom of returning the act without approval an that account. I trust we shall be quite able to maintain a helpful and dependable course under the modified provisions of the act. Very truly yours, Mr. Benj. Strong, Federal Reserve Bank of New York, New York City, N. Y. jek4,43 rHE WHITE HOUSE WAS SHIN GTO N September 12, 1922. My dear Mr. Strong: I am grateful to you for your message of September 11th. It has been comforting and encouraging to know of the interest and good wisheswhich your message conveyed. Gratefully yours, Er. Benjamin Strong, 15 Nassau Street, New York City. 30 Ce`_,--'1-HE WHITE HOUSE WASH IN GTO N September 12, 1922. Lay dear Ir. Strong: I am grateful to you for your message of September 11th. It has been comforting and encouraging to know of the interest and good wishes which your message conveyed. Gratefully yours, Mr. Benjamin Strong, 15 Nassau Street, New York City. ft F./ (La Whom he it itncitun that b rrnt 1ritt tome irtuz of autkoritR intresteb in nme lierrtp caimtitute a a.a.ciate Itteratv of tile HARDING _MEMORIAL ASSOCIATION PRESIDENT.