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OFFICERS DIRECTORS ROLLA WELLS, W. McC.MARTIN, .ERNOR CHAIRMAN OF THE BOARD AND FEDERAL RESERVE AGENT FEDERAL RESERVE BANK 10XTON, UST GOVERNOR JOHN W. BOEHNE, EVANSVILLE, IND. JAMES G. McCONKEY, DEPUTY CHAIRMAN OF THE BOARO COUNSEL AND SECRETARY D. C. BIGGS, sr. Louis, Mo. OF OLIN M. ATTEBERY, CASHIER WALKER HILL, ST. LOUIS MO. C. P. ,I. MOON KY, MEMPHIS, TENN. W. B. PLU N KETT, LITTLE ROCK, ARK. LE ROY PERCY, GREENVILLE, MISS, R. R. CLABAUGH, ASSISTANT CASHIER ST.LOITIS. A. H, HAILL, ASSISTANT CASHIER FRANK 0. WATTS, ST. Louis, Mo. S. A. ZIEGLErLBION, ILL. .J. W. WHITE, ASSISTANT CASHIER J. W. RINKLEFF, AssisrArvr CASHIER 0 April 25, 1918. (33 4t* 41% 7 Mr. B. J. Strong, Governor, Federal Reserve Bank of New York, New York, N. Y. My dear Governor Strong: Governor Harding of the Federal Reserve Board advises that your institution has forwarded to the Treasury Department the report of an examination, made by a special committee, of the collateral pledged by various institutions which have received Government deposits, and that the Department is so well pleased with the report that it has requested the Board to suggest to all other Federal Reserve Banks that they have similar examinations made. Will you be good enough to hare the proper officer of your bank provide me with an outline of your report? I feel that it would be well for us to follow a plan which has already had the approval of the Department. Thanking you in anticipation, we are Very truly yours, Governor. FflNfl OFFICERS P0 WELLS, DIRECTORS '.: CHAIRIAAN OF THE BOAR 111" W. McC.MARTIN, SNOR W. w. Hax-roni, DERUTY GOi/ERNOR iFE JAMES G. McCON KEY, COUNSEL AND SECRETARY OLIN M. ATTEBERY, DE RAL li E SE RATX,111,14rk ' DERLITy CHAIRMAN OF THE BOARD OF CASHIER R. R. CLABAUGH, ASSISTANT CASHIER ST.LOUIS. A. H, HAILL, ASSISTANT CASHIER J. W. WHITE, ASSISTANT CASHIER FEDERAL RESERvE AGENT JOHN W. EIOEHNE, EVANSVILLE, IND. ALD. C. BIGGS, ST. LOUIS, MO. WALKER HILL, ST. LOUIS, NIO. C. P MOONEY, MEMPHIS, TENN. W. B. PLUNKETT, LITTLE ROCK. ARK. LE ROY PERCY, GREENVILLE, NI,SS, FRANK 0. WATTS, ST, LOUIS, MO S. A, ZIEGLER, ALGION, ILL. August 7, 1918. J. W. PIN KLEE F, ASSISTANT CASHIER Mr. Benjamin Strong, Governor, Federal Reserve Bank, New York, N. Y. Dear Governor Strong: Since independent meetings of the Governors have been discontinued by the Federal Reserve Board it seems to me that the Governors have not been able to get certain detailled information frcm each her which would be rautually beneficial. Now that the topics for the Governors conferences are prescribed by the Federal Reserve Board we all miss many things viiich, in the interest of our respective dis- tricts, we should discuss. In this connection I might mention that a member bai in one district, having identically the same business as a neighbor number bank situated in another district, might very possibly be placed at a serious disadvantage as compared to its neighbor on accoint of a lack of uniform practice on the part of the Federal Reserve Bank:Sconcerned. Especially has this matter been running through my mind in connection with rates, mad the following questions are prompted by the thought outlined. .. above. Assuming that yeur rate is 44% for fifteen dai term rediscouits, or agreements to repurchase, 'diet rate do you charge for a renewal of such term rediscounts? Assuming that your rate is 4% for a member banks, fifteen day collateral note, secured by bills receivable, what is your rate for renewals of this kind of . obligation? Assuming that your rate for mantel, banks, collateral notes secured by Government securities is 4%, would you over feel justified in raising this rate for subsequent renewals? Do you not think that it would be better to discontinue altogether fifteen day tern rediscounts, or agreements to repurchase, and, in lieu thereof, discount the paper to its full maturity, permitting the member bank to withdraw it at any time before maturity, charging only for the time the money is used. aid rebating the balance? I diatike to bother you with these questions during this hot weather, but I do feel that there should be some uniformity in these matters, and that this bank should be guided by the practice of the other Federal Reserve Banks rather than take En independent and arbitrary position. Very truly yours, Deputy Governor. ao4s Hole, M*88., Auenst 12 1918. -er Governor Heston.: I bevel read yours of the 1th instant with a great deal of intereet and wish I might send you a satisfactory reply. First, may it not be proper now for us to endeavor to arrange for regular conferences of governors, "old Sty/e"1 I VA sure they will be produutive of bene- ficial results and help to harmonize e lit of inconsistenCies such as the ene you mention. ' These boarder line questions do not affect us as msch as they do the -western reserve beaks, nor, in fact, are they likely to 80 long ao our rate level i.e somewhat lower than that scaintainad by the other reserve benko. Notwithstanaing the epparent ineonsistency, we have imposed no restrictions or limits upon renewale of fifteen-day discounts and we believe thet that policy in New York is sound, where it might not belie some other districts. Nei York kn the central money market must submit to enormous fluctuation* in the loan account and huge transfers which flow in and out from week to week and occasion, at times heavy borrowings, and at other times heavy repaymer e at the reserve bank. The Now York banks are- entitled to and must bore the facilities that we give them and I -believe that peealizing renewals by higher rates, etc., will simply have the effect of a general mark-up of interest rates, cense diesatisfection, and, to some extent, possibly slight, limper the Government's borrowing progras. as to rates. I think this answers all three of your questions If we raise the rate for renewals of fifteen-day discounts, V. W. Boxton, Req. 8.12.18. we might just as well either discontinue the fifteen-day rate entirely, or put it at the same level as the ninety-day rate. The suggestion in the next to the last paragrnph of your letter would not alter the facts, although it would put the transactions in somewhat different form and cause a good deal more bother in bookkeeping. We must not overloak the fact that the New York bank is now lending about $500,000,000 and that the bar account as a. whole fluctuates nearly $100,n-0,000 above and below that figure. If we undertook to raise rates, or by any other measure to restrict this accommodation, we would be influencing rates to a higher level and, I feel, without effecting any materiel reduction in our loan account and without any effect other than to restrict melee of certificates, or force the Government to pay a higher rate. I hope this answers your inquiry of the 7th instant. Very truly yours, Governor. W. W. Hoaton, Deputy Governor, Vfederal Reserve Rank of St. Louis, St. Louis, laS.VSB /11 PERSONAL AND CONFIDENTIAL. !.!arch 6, 1919. My dear Governor Biggs: For some time I have been interested with some friends in a study of some of the problems of our national financial system and particularly to the possibilities of a reform movement which might result in the establishment of a scientific; plan for a Federal budget. The need for this has been made apparent so me during the past two years and as a result of contact with the financial machinery in Washington. Some of my friends believe the time is now opportune for a general attempt to interest the people of the country in national financial reform. The campaign for saving, thrift and sensible spending, incident to the flo.. tation of Government loans has put many of our people in a receptive mood for further suggestions in these matters. The national debt must be reduced and can be rediced if both individuals and the Government prantise sensible spending. is particularly true with the Government but cannot be made fic sachinery is installed to possible until only It scienti- accomplish it. Stsdents of this subject seem to be in general agreement that a scientific budget system is the only solution. To persuade our people that such a system shoald be installed, a nonpartisan orgasization should be built up and a wise and sane campaign Of publicity inauganated. It is a plan of that sort in which some of my friends are interested with a view to activity after the next loan is placed. In the meantime, steps must be taken to prepare the publicity, and the personnel of the organization must be developed in advance. It is, of course, out of the question to utilize the Liberty Loan orangliaLions as such for an enterprise of this character. It does not, however, seem proper for me to ask you if in your experience with the Liberty Loan, War Savings, or other oganizationt in connection with the war, you have cone in contact with individualp in your district who would be likely to be interested in this movement and mho would March 6, 1919. 2 be qualified for service in such an organization and who would do so as a matter of public duty. That is first needed is a representative in every State, competent to take charge of the movement and direct it in the State. He should have qualifications to enable him to become a leader of the State movement, some ability as an organizer, should be public spirited, able to grasp the subject and willing to Study it, and should be regarded locally as without political prejudice or purpose, and have the confidence in general of the people of the State. In addition to state directors, similar organizers must be appointed in the various counties and principal cities. T shall be greatly indebted to you if you can let me have suggestions and names of men in your district for this work without, however, mentioning the matter to them. You may know them weld enough to make definite recommendations not only because you came in contact with them in Liberty Loan matters, but other public spirited activities with which you are acquainted or connected. This is a matter in which 1 have a strong personal interest and will be grateful for your assistance. At our meeting in Washington on the 2ath I hope to have an opportunity to refer to this matter more specifically. Singerely yours, Governor. leaiAta,,,,E4MiaaragtA aoveraor, Alderal Reserve Bank of St. Louis, St. Louis, Mo. irt L Zril 2, 1919. Dear mr. Biggs; am anxious to get suggestions from you as to some one to do some work in Arkansas in connection with a proposal no being shaped for iederal legisla- tion designed to establish a financial budget for our Government. The work required will not be very onerous, but it will neee the services of a man who can develop ar organization for the purpose of some little educational and publicity work to bring about a better understaniinfe of ject. this sub- It will be necessary to raise a small amount of money, and, generally, to carry out the program which will be laid out by the organization at the llew York Headquarters. It needs the serviees of a man who is interested in the economic aspects of the Government'u finance, andwwho in sufficiently interested in the subject to be willing to devote some tire and energy to bringing about an improvement. It would be preferable to have zome one who would be capable of making an occasional address on this subject, and who would be willing hinself to study awl understand it by an examination of literature which will leter be furnished. I will greatly appreciate any help you can give me in this connection by suggesting anyone you think could undertake this work successfully. Eaithfully yours, David C. Biggs, Esq., Governor, iederal Resorve Beak of it. Louis, 3t. Louis, Lb. BS/MSB April 11, 1919. Dear Governor Biggs; Thank, you very much indeed for the suggestions contained in your letter of the seventh and for your offer of further assistance in connection with securing a representative in the State of Arkansas for the proposed budget work. Very truly yours, D. J. Biggs, .sq., Governor, Eederal Reserve 3ank of St. Louis, Bt. Louis, .4.o. 246/2JB Su- 6 September 14, 192. Dear Governor Biege: You will recall that but two yeare ago ee had wee correspondence in regard to the work of the Netional Budget Committee. In part, at least, passade of the budget leeislation by the Congrese was due to the work conducted by that Now that the besis of the budget system has been adopted by Congress, committee. our organization is eadeevoring to crystallize public sentiment for the support of the program of government economy and thereby to insure eermenent success for the new national budget system. We are seeking to extend this work by eelecting, so far as possible, bankere to accept active chairmanships in various of the more important cities, simply to carry on or which will be laid out for them by the national committee. The scope of the work is described in the encloeed memorandum. Can you suggest representative een, ereferably bankers, who might be willing to accept cuch appointments in the cities of Louisville, Mem his and St. Louie. At the present time I shall only ask you to suggest naees, but later on poesibly you would be willing to compunicate with them directly and further our object of havine thee accept thee e appointments. If for any reason you think it uneiee to eake these suggentione, will you not write me quite frankly and, if you are willing to do so, give me your reaeone. With best regards, and thanking you very cordially, I am, Yours very truly, D. C. Bides, Esq., Governor, Federal Reserve Bank of St. Louis, St. Louis, Mo. NM BS: enc.