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London,T%O., Dear 11.r. February 13th, 1916. Jay: This is Sunday afternoon and a convenient opportunity for We arrived so late Friday night (really Saturday morning at two o'clock A.".) that Saturday was about spent before : was out. But, nevertheless, I had a ver- nice visit for about one hour with 'ter. Blackett who was delighted to see me and gave an excellent account He is a charming chap and his of how things are going on over hc,re. two recent trips to liew York have given him, I think., a more correct understanding of affairs in our city than almost anyone with whom T have come in contact of were. a letter. London is a very busy place and I imagine the same is true One of the consequences will be the ex2enditure of a great In deal moze time in covering the ground than I at first imagined. laying out a program, which I am now attempting to do, I am convinced that it will be difficult --if not im:occible-to count ucon getting back home much before *Jo first of April and even then I fear a good deal of the ground will have to be very hastily covered, or else all Of course, I had a bully rest holiday thoughts entirely abandoned. an the boat but picked up a wretched cold that I hole to be able to subdue in a day or two. of saris. Blackett te_ls me that Lord Reading is most anxious to I am also expecting to lunch with Ambassaior Pam in a day or two. see me' as soon as possible. London makes two impressions upon your mind which are One is, the darkness of the city at unmistakable and convincing. night all windows being shaded and the street lamps not _such more that The other. the number of boys in uniform on the streets, a glow worm. Our rooms in the 2itz overlook e in the theatres and restaurants. Yesterday aftcrncan I court in which drilling is going on every day. took en auto ride out to Aldershot which is little lees than a military city, araarently v:st in extent although not much of it could be keen Also passed a large plant where aereoplann3 fram the public road. are being manufactured, and many of them were in the air being tried. out as ye passed. We were too late yesterday to get mail from Morgan, Grenfel & Company. Will do so tomorrow morning and hope to find a ca)le from the office as there was none at Falmouth, Please ive my best regards to all at the office and the Will try and have some -wore interesting letterr srlme to your good self. to send you later. Sincerely yours, Hotel Ritz, Paris February 18th, 1916 Dear Jay: Here we are in Paris after a trip such as one does not care to make more than once in a lifetime. I am without a typewriter just now (this being the hotel mgchine and the French arrangement of type decidedly reversed from the American machines) so will save particulgrs for later on, We left London we,Inesday morning on an 8:50 train and upon arrival at Falmouth legrned that no boat would leave until the weather moderated as a violent storm was raging. We spent that day and night at Falmouth finally getting away Thursday morning at seven o'clock. The crossing was the roughest I have ever experienced; in fact the waves swept over the boat at times, baggage and trunks got loose and passengers occasionally were in the scuppers. Mr. Harris was thrown to the deck and had rather a had fall, smashed his glasses and cut his nose but he is all right again this morning. One o4' our fellow passengers, Captain Sailer. Javal Attache at the .Lmbassy here in Paris, caught sight of the periscope of a submarine which he took to be an ZnjiSsh craft. I h9d retired, with a certain elementary feeling of discretion, for which I was very grIteful: to the dining room and spent The remainder of the trip dozing, mid the rattle of broken china and groans of passengers who were hoping for instant death. It took five and one-half hours to make the crossing and a more bedraggled looking party you never saw when we finall' reached the train. There is a good deal of red tape involved an the matter of passports etc., although when we reached Dieppe the Captain of the General Staff, in charge of the arrangements,for landing passengers, legrned who I was and gave me a Jine hustle through all the red tape for which I was exceedingly grateful,:' finally reached Paris last evening about seven o'clock--the trip rom London taking about thirty-six hours as against five or six ours in ordinary times by way of Dover--Calais. While in London I had a nice visit with Ambgssador Page, took luncheon with Lord Reading in his chambers and afterwards listened to a trial over which he was presiding, and then Holden took dinner with me the night before we left. I also had a visit with Blackett. It consumed the better part of one day; however, to get passports in shape to come to Paris and you will appreciate that the di, ficulties of travel and the time consumed in making arrangements together with the irregulgrities of trains and boats makes it exceedingly difficult to accomplish much without plenty of time. As an evidence of how things are in Paris, there were just thirteen men, including ourselves, in the dining room of the Ritz last night of whom seven were Znglish officers. a So far as it is possible to make plans, my itinery fir. Harris and I leave for Cannes will be about as follows: to spend a day or two with kr. Stillman returning to Paris I shall spend at least the rest of the week here Tuesday. and may go to Havre to see the Belgium Minister of Finance. Fro, there to Dieppe and London spending the rest of my time The difficulties of getting into Holland I am in London. informed are considerable and, on the whole, I believe I would not be repaid for attempting to make the trip, particularly gs it would not be possible for me to get back to New York until I Aall be guided entirely by progress some time in April. made in London. I am counting upon your keeping me informed by cable how things are going in the oifice so thqt I can have a guide when making plans. .I learned from Sir Edward Holden that there are a One number of plans laid out for my entertainment in London. is a dinner with all of t e Clearing House hankers. or obvious reasons, not Lo lay out a I have decided, schedule or description of inquiries regarding .our banking arrangements over here but may possibly do so leaving for home or on the steamer. .: Zy best reggrds to all at the office. Sincerely yours, Rita hotel, Paris, France February 19th, 191j. ly dear Mr. Jay: I am afraid that my letters will be rather uninteresting but I shall do my best to keep notes so that I can give you and our associates an intelligent account here must progress Such work as I have to of our trip. very slowly. I have sent he letters of introduction to .ions. Ribot qnd to the Deputy Governor of the Bank of France asking for an appointment upon my return from Cannes. Saw our Ambassador yesterday and some bank men tut I shall not be able to make the calls I anticipated We ,.re leaving making here until I return from Cannes. this evening, returning in a day or two. Paris is very quiet, dark at night, course the hotels are withoutthe usual American tourists. One is much impressed with the quiet of the city and the air It of seriousness--the only topic of discussion is the war. is a pleasure to realize the care and thoroughness with which every interest and energy is made subordinate to the demands Passports are most carefully examined and must the war. be visaed at every turn, for which of course we cannot complain. The Zmbassies both here and in London are tremendously driven with work--.r. Sharp and D.. Page both look tired out. 1 am glad to say that the cold I picked up on the steamer and which bothered me a good deal for a few days Please Jive my best regards to all at the is much better. office. Sincerely yours, Feb. 25, 1916 2 a reaching New York before tee first of ipril unless you cable ee that I am needed. Unfortunately it is impossible to obtain a typewriter in Paris for love or money this one is borrowed for an hour) so I am finding it imposible to write you quite as fully as 1 would like to do, and in any event I cannot make a very satisfactory report until after my calls are completed. ;e get news that a terrible battle is raging around ierdun with a very large number of men engaged, and with possibly very severe losses to the Cer-cans who are aggressors. Twice since we have been in Paris notices were sent around of possible zeppelin visitors and all lights were extinceished for a short period. .owever, in both cases snow appeared on the scene which it appears makes zeppelin o)erations difficult or impossible. 1 Do not hesitate to cable me if it looks as thourh were needed at home. y best to all the boys at the bank. 7aithfully yours, Paris, France-Hotel Ritz February "9th, 1916. Dear Er. Jay: Thank you for yours of the eleventh instant with which was enclosed a proof copy of the Board's first annual report to Congress. Except in a few places it struck me as being colorless which is only too apt to be the case when a reiort is composed by seven different people. I am glad to hear about the examination progressing satisfactorily, also the progress on furniture for the new banking room --the figure strikes me as moderate. I am bringing home with me the annual report of the Bank of France which you will find interesting. For your sake I am sorry about the group dinner, speeches, etc. It gave me an immense feeling of satisfaction to learn about it for those brute dinners and speeches are the bane of my life. I stopped in at ft Neuflize Company this afternoon to see Baron do Neuflize by appointment, and he was just in the midst of signing up a big batch of the drafts arranged through Dsssrs Bonbright & Company and Bankers Trust Company. I 11xe not, and probably will not write you fully in regard to my visits etc., but will get it all up in the form of a report when I return home. Had rather a nice clear day yesterday and spent most of it with Mr. Lewandouski of the Comptoir. Today, it has been raining most of the dv. I am held up making calls on some of the peonle I want to see awaiting word about certain matters from the Bank of France, and also awaiting Herman Harjes return to Paris. He was called out to Verdun with his hospital outfit last week and only got back late today. Had a most interest lunch Party today, in a small group of .Jiterican business men located in Paris who lunch together every Monday. Many of them who find business dull here just now are giving much of their spare time to relief work such as the american Clearing House, :American Hospital, etc. During my spare moments I am occupying myself with my collection of war souveniors and have picked up a few interesting things. Some of the French posters are very good. Paris, France-Hotel Ritz February 29th, 1916. Dear Lr. Jay: Thank you for yours of the eleventh instant with which was enclosed a proof copy of the Board's first annual report to Congress. Excert in a few places it struck me as being colorless which is only too apt to be the case when a report is composed by seven different people. I am glad to hear about the examination progressing satisfactorily, also the progress on furniture for the new banking room --the figure strikes me as moderate. I am bringing home with me the annual report of the Bank of France which you will find interesting. For your sake I am sorry about the group dinner, speeches, etc. It gave me an immense feeling of satisfaction to learn about it for those brute dinners and speeches are the bane of my life. I stopped in at Du Neuflize Company this afternoon to see Baron do Neuflize by appointment, and he was just in the midst of signing up a big batch of the drafts arranged through 1essrs Bonbright & Company and Bankers Trust Company. I have not, and probably will not write you fully in regard to my visits etc., but will get it all up in the form of a report when I return home. Had rather a nice clear day yesterday and spent most of it with rr. Lewandouski of the Comptoir. Today, it has been raining most of the day. I am held up making calls on some of the peole I want to see awaiting word about certain matters from the Bank of France, and also awaiting Herman Harjes return to Paris. He was called out to Verdun with his hospital outfit last week and only got back Lt to today. Had a most interest lunch party today, in a small group of .merican business men located in Paris who lunch Many of them who find business dull here together every ronday. just now are giving much of their spare time to relief work such as the jomerican Clearing House, ..merican Hospital, etc. During my spare moments I am occupying myself with my collection of war souveniers and picked up a few interesting things. Some of the French posters are very good. 2 Everyone here, just now, is in a stute of expectancy awaiting some news from Verdun. Apparently the German attack has failed to do more than make an impression at vnrious points on the French advanced positions, but at such cost to the Germans that they are gradually reducing the length of their operation. So much for now--I am sorry not to be able to give you details of the business part of the trip. Sincerely yours, Taxe Mots p principale Taxes Indication de Tranan TtLEGRAMME p6ttr Aeeessoires? Mentions de Service non taxees a transmettre an rreambule h. Feb. 1916 Total P. Jay, Federal Reserve Bank, Cable received. New York City About finished here. London via. Dieppe Folkestone. Leave Saturday for Well. Benj. Strong. N. W .else de l'expediteur : HOTEL RITZ, Wee Ind leafless se nowt taxee et transolkes que sue la demande expreame de l'expedltenr, 15. PLAC Cablegram via Western Union: Taxi, Indication de Trans' TtLEGRAMME prinvipale PO It 1 Taxes Aceessoires? Mentions do Service non taxees a transmettre an preambine Total Jay, Federal Reserve Bank, Leave Saturday for London via Dieppe. rl channel. Q ',.arch 2, 1816 New York City Possibility delay crosring Urged go to Holland but believe two weeks required in London will make Holland trip imItiaxxikIs ExAmisIxaJaig inadvisable; stop. Omitting Holland should reach NewYork about April first sailings regular. S top. if Is this gajtirfactory, Strong 51, HOTEL RITZ, Noin (Padresse de 1'expediteur : (Celt ladieations ne howl t a iiie s et oran.nekeft que.ruir la 4 lemande exprehse de l'exptlditeur 15. PLA POST OFFICE TELEGRAPHS. H Counter Number (1 THE WESTERN UNION TELECRAPH-CABLE SYSTEM. ill FOR TELEGRAMS AT DEFERRED RATES (EXTRA-EUROPEAN ONLY). 4ok Words Code Charge 2 Date Stamp. To To be affixed by the Sender. Any stamp for which there is not room here should be affixed at the back of this form. By be obtained, price One Penny). At Office of Origin and Service Instructions. VIA WESTERN UNION. According to the language used FOR POSTAGE STAMPS. sent d. Uarch 5, 1916 (A receipt for the Charges en this telegram can NOTICE.-The following Telegram cannot be accepted unless the Declaration at the foot of the Telegram is previously filled in TOand signed by the sender. 0, D or F must be added to "LC" Pierre Jay, 62 Cedar Street, (see back). ThaHLT New York City cb317775;;;;714.T.7.11Liihely that :ii,yht sail by rushing on twentieth (stop) better (stop) (stop) OrAtting i.iore time woulO be Do you recommend retu:ning then (stop) very satisfactory but everything takes time (stop) Paris trip How about rouulations? Strong I hereby declare that the text of the above Telegram is entirely in plain language (the language used being t Eivlish .) and that it does not bear any meaning other than that which appears on the face of it. U son the faith of the foregoing declaration and subject to the conditions u Ifequest that the Telegram may be forwarded via " W E8T printed on .tae back hereof by which I swig, _Ito. bektund. Signature and Address of Sender "" I" ro,ic Jr., Hotel TAtz, London. NOTE.-The Sender's Name and Address, or either of them, if to be telegraphed, must be written at the end of the text of the telegram. t State here the language need. - n'm No. ) THE WESTERN UNION TELEGRAPH COMPANY. FORM FOR CABLEGRAM (TRANSATLANTIC.) NORTH, CENTRAL AND SOUTH AME WEST INDIES, AUSTRALIA AND NEW ZEALAND. DIRTICT ROUTE Prefix. Words, FOR ALL PARTS OF Sent. Charges. Code. s. d. TO ilin,--gauI-14.07-1.. Pierre Jay, Ceble just ecei -ved. At 'r )44,4)-raL-1 To Office of Origin and Service Instructions 2z FOR STAMPS. By ........ Federal Reserve Bank, THIS FORM WILL BE ACCEPTED AT ALL POST OFFICE TELEGRAPH STATIONS. New York City Believe important I remain to complete present work even _thoilch reach home Refter _April first, dould rely your ruivininf: me dcfinitely-arri-o-omiitions-making-earlier return desirable,- Stop. fl-shingtori nw:fe published fairly complete. _Believe I understana sitnati obtain information requested. Stop. I request that the above Telegram may be forwarded be bound. Digitized FRASER at backforhereof, and by which I agree to http://fraser.stlouisfed.org/ Signature and Address of Sender Federal Reserve Bank of St. Louis Information department Dank VIA WESTERN UNION " subject to the conditions printed A-Wets .k.f? ?-7goqz , 8.-°,. 4', ,p e 4.' .....,- i,.,c:,174z.r.7 06, ., ' ... ap E,-S' n) CD 0 .Cs o0 Za,. 4 ta-AZ' ', .f 1112-6s -7/4it f,P?...,i. eq. :,, - o , et,(1-2 1 I ' -Z' e" ''' "" k. ;" 4treq;-q.?, ' 114w, ' p4) si ,-.f47=5,,;140a> .'' ,S. 4' t, Z" v Q. ey to / , . b 49:04t# effit;110 11). s cf. 's .7://Ffpc741 4 4, 04 a) 4*$ Otr4> hy /71' 10 ;,t7.4/' 7 0 a, -43",cb e ado I /77 kZ7 20 # - a,1., a o -co .0 . el;e? /Pt, -#41R- "4 4:71,7 ..?41.***0 / 1 C' 1? 4 444 ,4", " litcV- tY.t74.- . 4 qc .4, a) tv, 4 ".;14, "Z O °4/ **-1 tay , &. 4,, 4/ AA, k f16.01:,-*4°0 O ) tv t41 0 cc 4 ^ 0r 0 % 00 e 4,04:4 ;a? z,? 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Dear Mr. Jay: ao,kukk"'" The windup of my stay in Paris, the trip to London and getting settled in the hotel, the procuring of a typewriter etc., made it impossible for me to get off,a letter but I have cabled you twice and today have your long cablEy advising of dear old Paul's uneasiness. He spoke this way to e before I sailed, but I am not sure that it is any more than his disposition which led him to speak as he did. I am mighty glad that Kains went with the party--he is just the man for that sort of an exnedition and will help them a lot. It is rather important that I should be able to rely upon your advising me promptly if developments at the office or in 7ashington seem to indicate the necessity for my return. The English newspapers pretty good Washington news but, of course, not such news as '. ;e would get at the office as to what is really going on. It would only require a definite cable from you to bring me home by first steamer. I had a wonderful time at Cannes. The weather was delightful and I spent all three days there motoring with _:r.Stillman. The bankers in Paris are all pretty busy, particularly at the Bancue de Prance, nevertheless I had opportunity for some good visits with them, and without going into detail think the foundations are laid for perfecting all of the arrangements that we will require there whenever the time arises. r. Harjes was exceedingly kind, giving me a good deal of help and advice. As a matter of fact, the time I spent in Paris was all too short to enable me to cover the ground as thoroughly as it should be, and I fear that the same will be the case in London. I have only been here two days but so much time is lost in arranging appointments etc -- people are so busy in their offices that one should be here a month or two in order to accomplish anything. I had long talk yesterday with Jack Morgan and Grenfell, and another visit this morning with Jack. He is sailing for home on Saturday, having been here for four weeks and as he says, he really feels that to make progress upon an important matter here one should allow more time. Just to give you an idea of my programme: I had lunch today with Hartley Withers. Spent an hour or two this afternoon cleaning up mail which has accumulated. At five o'clock Fred ,olcott was to come in and take tea with me bnt just telephoned that he would have to defer it a bit--he is going to tell me something of his trip through Germany and Poland. At eight o'clock I am dining with Lord Fairfax and a number of bankers. Tomorrow morning I am going to make some calls in the city. At 2:15 James Simpson of the Bank of Liverpool will call. After he leaves I am going to look into the euestion of steamer reservations for the trip home. At five o'clock Lord Churston, who represents Hallgarten Company here, will call and take tea with me. At eight o'clock I am dining with Jack Morgan, and some of his friends and associates. Thursday I have set aside to make calls, and at eight o'clock Iam dining with Lord Reading and IleZenna. 2 On Friday evening the London Clearing Bankers are giving me a dinner at the Savoy Hotel. Saturday afternoon and Sunday I hope to get in a ittle play with some of the men at the Embassy. By the way, last night I had dinner with 1:r. and Irs. Page and spent a most delightful evening. lir. Page is a "corker". Lionday I am dining with them again. Tuesday night Sir Edward Holden is going to give me a little dinner at which he expects to have the principal men, Paish and others, connected with some of the financial publications of London. The disposition here, naturally, with everybody busy, is to make evening engagements. I will be sure and get the information asked for in your cable, and am quite certain that it would justify the course we contemplate pursuing in regard to our information department. You will, I fear, find my letters rather bare and uninteresting but it is the best I can do just now. I -ould not let the Equitable people delay the completion of our of-Axe, except for good cause shown, as we have lived up to our part of the contract most scrupulously. Horawitz will do everything in human power to see us in on time I am sure. The arrangement about the Investment Account strikes me as being most satisfactory from our standpoint. Mr. Kenzel has sent me a copy of the memorandum. Sorry to learn of the repeated reductions in Surplus Reserve, and presume it is the usual spring movement commencing If so, it does :lot indicate very much but if it is due to expansion in the Loan Account it would be unfortunate at this time. With best regarils to all in the office, including your good self, Sincerely yours, N 0. DIRECT UNITED STATES WEST RN UNION Larch 9th, 1916. 74 dear i.Ir. Jay: Yours of the 18th ultimo has just reached me and I am grateful to you for such a nice long letter, and for the figures enclosed. lirs. LIcLaren writes me, and sends clippings as well as general data collected from the office which is comforting and relieves me of an.T:iety, and makes me feel a little easier about staying away. Your letter is most reassuring that I am not trespassing upon your good nature. About the statistics and information. While I did not have time to go through that department in Paris, from my talks with the officers of banks I believe it to be pretty comrlete. Not so much as to foreign matters but as to France. The bill department is an immense organization, and the men Who run it are posted as to conditions all over France with a thoroughness probably unecualled by any bank in the United States. :lore tile would have enabled me to look into it thoroughly, but I rarely get any spare time. I will do so here, however, and bring back all the information you need on the subject, as well as the information you wanted about rates. We must give the domestic trade acceptance propaganda a "boost" in our district. When one realizes the extent to which it is used in France and England, it makes us seem very provincial. I was surprised to learn that both Warburg and ::cAdoo went to South America. The rest will do both of them a lot of good, for they have outrageously overworked. I pray for you when I read about your talks to the bankers up state. Tomorrow night the London Clearing Bankers are giving me a dinner at the London Savoy Hotel,and at which about twenty of the leading London bankers will be present, so I have to make a little talk myself and invite a few little prayers from you. Glad to hear of Broderick's good re-)ort--if he does not file a copy with us, tell him that I will knock his head off. The chances are that if it is a very good report, with many complimentary things in it, they will try not to let us see it for we sure are getting spoiled at the "PRBofNY". *, I cabled you today as per enclaied copy. That I am doing here is most interesting, and. I am sure when the report is made, if as successful here as in Paris, it will be gratifying to you and to the Directors. Of course, everything is tentative but is working to the arrangement which you and I have frecuently discussed, and which would be the most dignified that is possible under the circumstances. Jack I.:organ is here, and I have seen quite a little of him--dined at his house last night and met Lord and Lady Bryce. It really does your heart good to sit down in front of a fire and have a chat with that perfectly delightful man. He certainly does love America and Americans. At times I could not help but feel that in 2 No. UNION AI kNGLO -AMERICAN DIRECT UNITED STATES RA M ..,-a SEN T FOR STAMPS Ac Code WORDS _.larch 14th, 1916 By To CHARGE VIA WESTERN UNION THIS FORM WILL BE ACCEPTED AT ALt POST OFFICE TELEGRAPH STATIONS. TO PREVENT MISTAKES PLEASE WRITE DISTINCTLY. TO{ Pierre Jay, Cable received. Ju t Believe can mak more time (stoP) Hew York City. :federal _eserve tarti d. i 'cues 0 t)entative arrangements of great value here by taking Ask Hamlin if clearing Man can wait my xx±mix report methods here anejilrance (stop) \ Will delay return cause inconvenience? c-ble frankly. Strong. iAO BE PHED. Having read the conditions printed on the back hereof, 1 request that the above telegram be forwarded by the Western Union Telegraph-Cable System, subject to the said conditions to which I agree. Signature Address 2 p although the details '=.re not yet agreed upon -- simply the principles. That is -:hat I want to accomplish here but it takes time, particularly as the officers of the banks are all so busy with many important matters. I have had opportunity to look into the check collection matter both in France and here, but want to pursue my inquiries here a little further. I am also arranging to go through the portfolios of some of the banks here, if time peinits, including The Union Discount Bank, and get a little better understanding as to the method of dealing in bills, endorsing them, etc.,etc. As a vacation trip, this is a complete failure, but I enjoy meeting the people over here and getting information in a way that is really of value. Everyone is most kind, and I am so swamped with invitations that it is difficult.for me to cover the ground. Sir Felix Schuster has given me a good deal of his time,and to great advantage for I feel that he is so well posted and experienced that an hour with him is a real asset. For various reasons it will be impossible for me to go to Holl nd, even if I stay until April first. I am mighty regretful about the possibility of delay in return which will not be decided until I receive reply to todays cable. Now that I am here I might as well get the job done. It will not be possible to make tentative banking arrangements with the Joint Stock Banks until after discussions are completed with the Bank of England. I wish, on receipt of this letter, you would drop He will give you, personally, some information in and see Jack Morgan. that I am sure you will regard as of value, and will indicate my desire to wait here until the work is done. He and his partner, Grenfell, have been most helpftl. best regards to all in the office, and the same to your good self. Sincerely yours, WEST N, UNION ANGLO -AMERICAN DIRECT Prefix WORDS TO{ Code CH Biom Planning to methods (sto he has my de T TO BE Havi subject to :GRAPHED. Signatur Hotel 2,itz, London .larch 17th, 1916. -aer Jay: What with engagements in the ctity, and engagements every day for luncheon and dinner, I still find it difficult to find sufficient time in which to send you a comprehensive letter with respect to how affairs are getting along, but it is needle-s to say that I would be on my way home by this time were it not that I feel the information gained from this trip will be of greatest possible value to me, and to our banks generally, and on that account I am tempted to stay on. I am not writing you fully in regard to my conversations with the Bank of England as they have not yet progressed to a conclusion-and will not for a few days. So far everything is going along most satisfactorily. I was greatly relieved to receive your messages about my It may not save the necessity for another trip later, remaining. (which will be desirable in any case) but it will enable me to spend the time required to get a thorough understanding of the bill business as well as of the check system here, and particularly to become better and more intimately acquainted with most of the important bankers of this city who have extended to me the most generous hospitality v Your last cable, received yesterday, informs me of the of the office, the purchase of Government bonds, of your request amlin for delay in the check collection matter, and of "rs. Cann's I was terribly shocked to hear of Cann's loss --won't you h. se give him my warm sympathy. p4fIt4, V V 2nclosed is a rather hastily dictated memorandum which, I gives the essentials in regard to the French system of handling ticks, and a rather rough statement of the English system. Later, I shall elaborate as soon as my investigations are coalleted. The important thing to bear in mind, in connection with the 2nglish system, is that it does not create false balances in the Joint Stock Banks nor does it create false balances in their 2eserve Accounts at the Bank of This is really the crux of the whole matter. Three days time England. on checks payable in the Provinces is invariably sufficient to enable checks to reach destination, and advices to be returned before balances are transferred. It is also rather important to bear in mind that almost all of this business is conducted -- not for nothing but for a slight collection charge. This is not the invariable rule, but it may be I am going to get particulars about this regarded as a general practice. in some detail as it bears on our own problem. 'r , Enclosed you will find copy of cables sent yesterday and today. This is all that I can write just now, but will try and write more fully again this week if time permits. With kind regards, Sincerely yours, collections asencies, or even the officers of other banks. Lr. 2obineau, head of the discount department at the Bancue de France informed me that he had collected in Paris alone as many as 100,000 bills in one day, recutring the services of over 1,000 messengers for the purpose. This custom, of course, has a tendency to reduce the use of checks. I was informed by so .0 of the bankers in Taxis, the use of checks was so little understood that a man could not even induce his wife to take a check when she wanted money, did not understand about endorsing it, and had doubts as to whether she might be able to get the money for it. hold money. French oden are accustomed to holdinr: the houseIt is their prerogative and they are scrupulously carefal to avoid informing their husbands and relatives as to how much of the money entrusted to their care has been spent and how mach they have saved. 11 check book and bank account would disclose the condition of their cash account, and this they seriously object to. hen the Bancue de France made its appeal for gold, one dif-iculty encountered was the necessity which was then imposed upon the French families of disclosing how much gold they had hoarded. Baron de ITeuflize told me that near his village, Chantilly, a little 'hamlet of a few hundred people and of which he is !layer, in order to get the gold he had to hold a public meeting in the town, take bank notes personally with him and have the Certificate of Lierit in blank (which he was authorized to fill out and sign on the spot) filled out by himself personally as he had no clerks to assist. .110 village people were convinced that no one would know how muoh flo money they had given up, and out of this little settlement, in a very few days, he collected 125,000 francs in gold. Under such circumstances it will be sr:en that the check problem in France is not important, The Banque de France has made efforts to induce a greater use of checks believing that it would reduce their note issue, as well as increase their gold percentage and gold holdings. So far these efforts have been without success. At a meeting of the officers of the bani :, however, and which I attended, this matter was discussed. They all agreed that it would be a great achievement if they could bring about this practice at the nresent time, as they estimated that there were five billion francs of French bank notes now hoarded in France, largely by people who had given up gold or who had always hoarded notes in preference to gold. Under the above circumstances no co-operative effort in the natter of check clearing and collection has been undertaken by French banks until in recent years ashen a Clearing House was estab- lished in Paris,comosed of about twelve to fifteen members an consisting only of the most important and influential banks. The operations of this Clearing House were entirely abandoned when the war broke out, and are not to be resumed until about the first of The Clearing House makes two clearings daily, and the average turnover through the institution by the two largest banks.i.e., ,exit Lyonnais the Cor7ptoir national D':]scompte do Iiris will An from 700,000,000 to 850,000,000 francs per month--a trifling amount compared with the volume going through the Nov: York City Clearing The custom is much the same as ours. House. Checks are sent twice a day to the Clearing House, and the balances are settled, not in cash but by a Special Order on the Banque de France which results in the debit or credit to the respective accounts of the institutions that were either debtor or creditor at the Clearing They have only admitted very strong institutions to House. clearing as instances have arisen where sonic of the weaker banks h :7e iven orders on the Banque de Frimce which htive not been promptly honored. It is customary to send bank cheeks found to be prior to a fixed hour, along lines similar to the New York practice. It is the general belief in France that the laws of the Sttte are inadequate and not sufficiently severe to enable prompt prosecution of individuals who use checks improperly, and that has also been a deterrent in the development of the check system. At the present time all the banks and bankers of the City of Paris are collecting checks by hand. at considerable expense c,..nd inconvenience, particularly at a V:le when their clerical forces live been depleted by the war and temporary staffs of women employed. Countr:7 checks: The practice in handling country checks is somewhat similar to that in vogue in London with certain variations. Allow- ing for various exceptions to fixed rules or customs, it may be said that country checks are handled by the banks in :aris by one of Ar different methods, and these these four methods cover the vast 7eajority of check transactions. 4/ First, by giving immediate credit to a customer whose standing is undoubted, in which case the customer is chared interest at bank rate plus, say, 1 to for the estimated period required for collection, which varies from one to three days. This applies to a very small proportion of the checks handled. Second, by giving deferred credit, in which case the account is credited with the amount of the check, but if the customer draws any part of the credit he is charged with interest on the amount drawn at bank rate plus a commission cha.cre, or a little additional interest upon the amount drawn if it impinges upon the amount of uncollected checks. This is similar to our system of "holdout". Third, by giving credit only upon "advice of payment" which means that the customer is not permitted to draw, and if he does his' check will not be paid until "advice of payment" is received. In none of these three cases does the customer receive interest on the amount of the balance until after collection time, or transit time has elapsed, and only in the first instance is he expected to draw before the transit time has elapsed. In he second instance he is penalized for drawing, but his check would not necessarily be refused. Fourth, by giving immediate credit, or by making imdiedlato payment by "red check" on the Banque de France for a check which the customer does not expect will be paid until the following day, in which case the check dermcited by the customer is a "white check'. 2ed checks used by the banks are drawn upon .-Le Banque. de France and are payable on the day drawn. 7:mite checks are not payable until the following day. These white checks, which are drawn in anticipation of the receipt of Hinds are cshed by the big banks, at times, for their customers, by the uoe of these red checks, and this is simply another method of extending credit the custotaer being invariably chl,r7ed hank rate for one day plus a small commission for collectioil charge. The first method, as stated above, is very little used. The second snd third methods cover the great volume of checks. The fourth method has reference solely to aettlerneate in the City of Paris and suburbs. The operation of rediscounting bills withtthe B.7meue de France is apnarently intimately associated Tith the general system of settlements bet 7een banks-only a few of the larger banks ap.parently not availing of the facilities of the Ban(Ae de France for converting their portfolios when needed, and even those institutions almost invriably discount bills when within five days of maturity, in order to save the trouble of expense snd collection. The big ?Tench banks rely upon their balances -its: the Banr:ue de France as reserve to a much greater e:ttent than I had realized, and the ilmediate convertibility of their portfolios gives them a feeling of assurance as to their cash position. thiak it may be generally said that so far as checks nre used in Pram)°, it is only in rare eases, and only for the wealthiest customers of French banks that immediate credit is given on checks deposited, and in those cases not ocly is no interest allowed on the balance during the transit time, but iAerest is charged at bank rate--and in most instances a small commission in addition. CHECZ COLIECTIO:IS DI LONDON: I have not completed my inquiries on this subject in London, but am expecting shortly to go through the London Clearing House with :r. H. Martin Hollrqad of 1:artin's Bank Limited (Honorable Secretary of the London Clearing Ban-;:ers Association) who is regarded as an expert on this subject. Pending a complete report, I can make the following general statement in regard to the custom: The clearings through the London Clearing House are continuous during the day, and the balances settled by an order on the Bank of :ling:land. All checks, -ithout exception, go through the Clearing House on one of three basis. known as ''City checks The first class for which immediate debit or credit is made as in the case of clearings through the :Jew York Clearing House .ssociation. These are checks ar yn on banks in %.hat is generally understood to be the City of London; which, for the pur,,ose of clearings however, is described by an arbitrary line that takes in some of the parts of the Greater City of London, outside of the old city, such as a portion of '-qestminster, etc. The secohd class of checks cle-red, consisti:Ig of those drawn on banks or branches of banks in the Metropolitan District (which is that part of the City of London immediately surrounding the central area) and this class of checks is described as checks on the .detropolitan District. For these, debit and credit is made the following day. giving one day within which to get settlements from the outlying districts of the city. The third class or checks are those drawn on the Provinces. That is to say, all of England, Scotland, Jales and Ireland outside of districts set forth in the first and second classes. For these cheeks three days deferred debit and credit is allowed. The golume of checks in 3ngland is immensely larger than in France, but of course not so large as in the United. States. The system of branches emintained by the large English and Scotch banke enable settlements to be made very promptly. I shall not now describe in detail the method of settleeent, which is very simnle end effective, as I hope to get a complete set of all the forms used. In general, however, it may be se id that all checks, "City", "netropolitan" and "Provincial" handled by the London banks are settled through the Clearing House upon the terms above described, and that the adjustment of the reserve balances with the Bank of ISnglend, resulting from these three methods, in effect, eliminates all "float" in the English banking system. There may be exceptions to this, but in general the statement holds true. The system is so much sounder than our own that I feel sure, even under the most ilifficalt circumstances the domeetic exchanges throughout Enr,:land, Scotland, .:ales and Ireland would never brenec down under strain, as has so frecuently happened with us. WEST b ANGLO -AMERICAN CA B 14 UNION DIRECT UNITED STATES II EtRAM WESTERN UNION SENT FOR STAMPS At WORDS CHARGE To ,arc._ 17-Lti, 1916 By VIA WESTERN UNION THIS FORM WILL BE ACCEPTED AT ALL POST OFFICE TELEGRAPH STATIONS. TO PREVENT MISTAKES PLEASE WRITE DISTINCTLY. TO{ Pierre Jay, Cable received. Federal Reserve Bank. Nev York City. Sailing deifnitely April first steamer Saint :Lana (stop) Cri complete everything before then. (stop) Advise family. Strong. Having read the conditions printed on the back hereof, I request that the above telegram be forwarded by the Western Unlon Telegraph-Cable System, subject to the said conditions to which I agree. NOT TO BE TELEGRAPHED. I Signature Address _Utz Hotel, London, March L2nd, 1916. Dear Mr. Jay: I am enclosing a rather brief memorandum of my talk with Lir. R.Liartin Holland, HonoraAalt'Secretary of the London Clearing Bankers Association, on 'Ale subjedt of the London Clearing House, aria check collections. It is the best I can do in the short time at my disposal just now, and supplements what I sent you last week. It is hardly necessary to elaborate it with a detail which is considerably complicated by reason of the immense system of branch banks, but the principle underlying the whole scheme is clear enough, and of course substantially what the Governors of the Federal :Reserve Banks recommended to the Federal Reserve Board. I an sorry not to be able to write you fully about other matters, but they will keep until I reach hew York, No change in my plan about sailing April first. The weather here is beastly--rain every day without exception, and as the principal part of my work has now been Cone I am taking it a bit easier, putting in a little time -4ith Captain Symington at squash, etc. Willard Straight turned up yesterday together with Jim Perkins's brother. I Oined Monday night with Grenfell of Morgan, Grenfell Company; Mr. Farrar of Baring Brothers, and :Jr. Norman who is now giving about all of his time to the Bank of England, having retired from Brown,Shipley (;: Company. It was a nice party, and you would have enjoyed meeting these charming men. Last night I dined with Sir Felix Schuster, and so it goes for I have had dinner engagements every night this week and more in prospect. Yesterday I lunched at the Bank of England with Lord Cunliffe and the Directors. It was most enjoyable, and afterwards Lord Cunliffe took me all over the bank. spent about an hour discussing our plans, with which Jack Morgan is fully familiar, and with which Lord Cunliffe is now in accord. Without going into details (tuaneceesary at this time) I think you are safe in telling Jack that, subject to some discussion with the directors of the bank, and of course subject to our own consideration of the matter at home, Lord Cunliffe agrees on all the points which Jack and I discussed when he was in London. Of course, the actual conduct of any transactions must await our determination as to whether it is feasible to undertake any business abroad until after the conclusion of the war. ;e will talk that over when I get home. I have been exceedingly interested in many discussions of the bill business, and without reviewing it let me say that, generally speaking, our various monographs on that subject to :ashington are borne out in every particular by result of my inquiries here--I refer particularly to the question of finance bills. eyes are beginning to develop a strong habit of turning to the Jest for I am longing to get home. It would have been a mistake, however, to shorten my trip by sailing even on the 24th. Best regards to all in the office, and I am greatly indebted to ou for your cables. I sent you a brief cable last evening as per attached opy. With kindest regards, believe me, Sincerely :ours, UNION WEST ANGLO -AMERICAN WESTERN UNION CAB WORDS SENT RAM FOR STAM At (Le Preli:r W.,. I, DIRECT UNITED S To CHARGE Sp VIA WESTERN UNION THIS FORM WILL BE AC POST OFFICE TELEGRA TO PREVENT MISTAKES PLEASE WRITE DISTINCTLY. TO{ Pierre Jay, Federal Reserve Bank, New York Cite Anticipate governor's conference will not agree upon transit involving 'may i:Imediate debit end credit feature before my re Am unalterably opposed to that plan in any form. (strap) 21e advise Jefferson CouAty National Bank will be unable to atten anniversary owing to delayed return (stop, next Thursday advising if family all well. T TO BE Would like cable z per._ di nq 2ridunIs T Having read the conditions printed on the back hereof, 1 request that the above telegram be forwarded by be Western subject to the said conditions to which I agree. St -n GRAPHED, Signature Address WEST IS1 UNION AdieLo -AMERICAN DIRECT UNITED STATES SEN T Prefix WORDS FOR ,STAMPS At Code Ia-:reh 24, 1916 To CHARGE THIS FORM WILL BE ACCEPTED AT ALL POST OFFICE TELEGRAPH STATIONS. VIA WESTERN UNION TO PREVENT MISTAKES PLEASE WRITE DISTINCTLY. TO{ Pierre Federal deserve Bank ro ply jOur. C-ble rugut lag Nethur1 ids (Stop) liCT7 Yolk City .. j-7TE..2.. Or st_r.)-ag Having read the conditions printed on the back hereof, I request that the above telegram be forwarded by the Western Union Telegraph-Cable System, subject to the said conditions to which I agree. BE HED. http://fraser.stlouisfed.org/ Signature Federal Reserve Bank of St. Louis I Address Ritz Hotel, London, Llarch 24th, 1916. Dear Jazla Yours of the 11th reached me yesterday, and I was very glad indeed to hear what had been going on at home. Do not worry about Paul--he is a nervous little fellow, and now that he is off for South America with the party he will forget all about his troubles. Besides that, it is a good thing to get him out of the habit of mind of thinking that is that he can wag that finger at me and that I must always jump. really in his mind I thoroughly understand---he did not want to be away at the same time I was, but there are lots of grown up people in the world and ho does not realize that everything would go on just the same if both he and I should drop dead at the same time. As I understand you are doing nothing about the Bank of Netherlands gold, I am not writing fully on the subject and there seems no occasion to cable. It was really impossible for me to go to Holland on this trip. I have been watching the declining reserves in the Clearing House banks which is normal for this season of the year. These bankers like Lir. Rowe, and others from the reserve cities cannot, and will not, give an unprejudiced recommendation about 7e have tried the experiment of an immediate debit a collection plan. and credit--it has certainly failed and developed where the unsoundness lies. In my opinion it ought to be abandoned, and the whole country gradually put on a time basis and then we can shorten the time by such agreements as Rowe and any others think feasible. I an terribly sorry to gather by your letter and cable that the Board still insists I will be back before April 10th so upon the old heresy in some form. I am hoping the plan will not crystallize without my having a chance to take a "lick" at it. I am cabling you, today, as per enclosed copy, just a few words on this subject, and also about the meeting at ,7atertown. I promised the president of the Jefferson County National Bank to -ttend. It really seems impossible for me to keel that engagement so soon after my return. I learned of the transfer of the Fairfield County, Connecticut banks by the same mail as your letter. This interests me a good deal for now I am living in my own district. Things are progressing here just about as I 'expected them to, and I hope to return with a pretty definite understanding of what we can do when the time comes to do it. Allard Straight and Jim Peter's brother arrived this week, and they will likely tramp over a good deal of the ground that I have covered. They are here on business for the American International Corporation. would you mind asking Firs. LIaLaren to be sure and notify Dudley :ialone of what boat I am on, and also to ascertain from :Ass Andrews whether there is any chance of anyone meeting me on arrival. If she and little Zatherine come down to the dock they will have to secure the necessary dock pass which 'Jr. .lone will furnish. In any event, I wish I: No. WEST UNION WEST UNION ANGLO -AMERICAN WESTERN UNION CAB Prefix WORDS NoWvSENT DIRECT UNITED STATES RAM FOR STAMPS At Code CHARGE By To VIA WESTERN UNION TO{ THIS FORM WILL BE ACCEPTED AT ALL POST OFFICE TELEGRAPH STATIONS. TO PREVENT MISTAKES PLEASE WRITE DISTINCTLY. kierre Jay, Federal Replying last tv;o cables. Reserve Bank New York C aould prefer awaiting, my return be Netherlands bank matter. Stop. If that impossible which I dou chargeCharge suggested fair in view if of exchanges five percebt premium Dutch ex could be reduced became normal. Stop hold and ship gold for their account and risk. Stop. ae responsible for difference between nominal and bullion v NOT TO BE TELEGRAPHED. Having read the conditions printed on the back hereof, 1 request that the above telegram be forwarded subject to the said conditions to which I agree. JI Signature Address No. WEST 1111 ANJLO -AMERICAN I!! UNION WESTERN UNION DIRECT UNITED STATES RA M FOR STAMPS SENT Prefix Code WORDS By To CHARGE VIA WESTERN UNION THIS FORM WILL BE ACCEPTED AT ALL POST OFFICE TELEGRAPH STATIONS. TO PREVENT MISTAKES PLEASE WRITE DISTINCTLY. TIC)1 Pierre Jai.._ Jew York Hone motter eau await atter. Stop. r (seoond page - continued) rn- Stop. Loolri ng into trnslo aeCAptartO Spend Friday Liverpool with Simpson. Sailing Saturday nteamstdia_ Saint_ Paul.. Strong. Having read the conditions printed on the back hereof, I request that the above telegram be forwarded by the Western Union TelegraphCable System, subject to the said conditions to which I agree. NOT TO BE TELEGRAPHED. ( Signature. Address N o. WEST UNION WEST I ANGLO -AMERICAN CAB Prefix WORDS N UNION WESTERN UNION V1V SENT No. DIRECT UNITED STATES RAM FOR 'STAMPS .47711 At Code To CHARGE iiarch 29th, 1916 eY- VIA WESTERN UNION THIS FORM WILL BE ACCEPTED AT ALL POST OFFICE TELEGRAPH STATIONS. TO PREVENT MISTAKES PLEASE WRITE DISTINCTLY. TO{ Pierre Jaz, Pederal aesorve Bar." No', York City ImporttInt my reports be coasidered cbsolutcly coilfi4cn,tial. do a airact anderctc.nd. Strong. Having read the conditions printed on the back hereof, I request that the above telegram be forwarded by the Western Union TelegraphCable System, subject to the said conditions to which I agree. NOT TO BE TELEGRAPHED. I Signature Address No. WEST UNION ARGLO -AMERICAN DIRECT UNITED STATES RAM CA B SEN T Prefix WORDS FOR STAMPS Cade 30, 1016 By To CHARGE VIA WESTERN UNION THIS FORM WILL BE ACCEPTED AT ALL POST OFFICE TELEGRAPH STATIONS. TO PREVENT MISTAKES PLEASE WRITE DISTINCTLY., TO{ ..,cnr=c Br az_ z.. T 1:0I7 .1 c r City J " .1c7A. vttu aY Dinner 13z.:)ends oft atm NOT TO BE TELEGRAPHED, i Having read the conditions printed on the back hereof, I request that the above telegram be forwarded by the Western Unlon TelegraphCable System, subject to the said conditions to which I agree. Signature Address No. WEST ANGLO -AMERICAN 4.1 UNION WESTERN UNION CA B SENT DIRECT UNITED STATES RAM FOR STAMPS At Prefix WORDS Code To CHARGE By VIA WESTERN UNION THIS FORM WILL BE ACCEPTED AT ALL POST OFFICE TELEGRAPH STATIONS. TO PREVENT MISTAKES PLEASE WRITE DISTINCTLY. TO Pierre Jay Federal Reserve Bank New York City Saint Paul will be delayed sailing one or two days. London. Remaining dill advise when leaving. Strong. NOT TO BE Having read the conditions printed on the back hereof, I request that the above telegram be forwarded by the Western Union TelegraphCable System, subject to the said conditions to which I agree. TELEGRAPHED. Signature Address 4, 1916 Pierre Joig,_ Federal Reserve Bank Nev. York City Sailing definitely Saint Paul 7ednesday afternoon. Strong