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June 18, 191904 4y dear Dr. Vissering: 1y plans have now sufficiently matured to enable me to advise you that I am expecting to sail for :'.larope about the first of July and that I shall hope to give myself the pleasure of a visit wits you during my stay abroad. 4y arrangements are as yet a little indefinite, but I shall probably be in London for a while. and then go either directly to Holland, or, possibly, first to ?ranee and later to Holland via 3elgium. I shall look forward with great pleasure to meeting you at that time, and hope to have the good Fortuna of finding you at home. With cordial regards, believe me, Sincerely yours, Dr. G. Vissering, President, The Netherlands Sank, Amsterdam, Holland. 3.; Li 13RA" JU L 5 1919 pitikiy.sER;; 'NW Dear Dr. Vissoring: :Ty depurture for Europe, uhich was fixed for Cle 1st of July, has boon postponed to the 12th instant, on account of derrInmment in the sailing sohed.alo of Cie '.7hite Star 71ns enused by labor Aisturb:inces at Liverpool. I now expect to sail on the Baltic on the latter date and am rntioipating with pleasure seeing you egz in t !n early date. kindest regards, I am, Sincerely yours, Dr. G. Vissering, The 'Tetherlrnds Bank, `Insterasm, Holland. COPY OF CABLMRAY Amsterdam, Holland July 15, 1919 Federal Reserve Bank New York Teceived via Hoover your cable quote Federal Reserve Bank requires that all gold shall be weighed in conformity with formula in paragraph one and expects to make payments as rapidly as lots approximating twenty million marks are completed and cable advices are received in compliance with terms your cable unquote We state that alternative given in your cable directly to us on July second is caLclled by this instruction Stop We execute your last instructions nrit have undertaken the weighing; which will probably last three days for the first lot of twenty million marks We understand you agree Hoover will be via Brown got informed of this Gobi., Nederlandsche Bank COPY LW CABLEGRAM New York, July 16, 1919. Yederlandsche Bank Amsterdam rie regret that Hoovers advice to you whi,lh is evidently only part of our cable to American Mission Paris caused you to consider same as cancellation of alternative given in our cable July second Stop Please do not interpret the advice from Hoover as changing in any respect the instructions in our direct cable to you of July second which we hereby confirm Federal :Reserve Bank July :! 171) liLDLRLAliaXHE DANK, Amsterdam New York repeated Your cables seventeenth and nineteenth instant to to me here sto will Suggect continue cabling reports to New York which be re.)eated to me by FEDERAL RESERVE BANK stop Planning to reach Brussels early next week and Amsterdam shortly thereafter stop Friday Ritz Rotel PARIS STRONG BENJAMIN STRONG, Numero i2, Address until August 6, 1919. 4 Dr. G. Visserint., NederLindsche Bank Ameterdm Am arriving bit AmeteroLm tomorrow afternoon by mAdor and hove telegraphed for rooms ut .he Brkteke Doelen ShAll hope to have the pleasure of calling upon you Friciay morning if convenient for you. 3EILJANIIi SIWAG, Governor Feuerta or New York Reserve an.1.: Brack's Doelen Hotel, Amsterdam, August 11,1919. My dear Dr. Viseering: It is quite possible that some mail and telegrams will come to the Bunk for me after I have left Amster:km, and I am writing to ask if you will be good enough to have your secretary re:eat telegrams to me in care of the stational Bank of Belijun, Brussels, until Friday of this week and thereafter in care of Vergan, Harjee Y Company, Place Vendome, Paris. ,'my mail, I believe it wouA be safer to forward direct to 14ortah., Earjes Comlny, as I e;,all only be in Brussels a day or two and might miss it. It has been a great privilege to have this visit with you and with your ascociatee, and I value greatly the opportunity to become personally accualnted and to have these discussions. May I express the hope that your institution and mine rill succeed in establishing a close relationship to our mutual advantage. With warmest appreciation of your courtesy and hoping that you will not fail to command me in New York in any nattera in which we can be of sorvce to you or to your fine institution, I be to remain, Faithfully yours; Dr. G. Vissering, Nederlandsche Bank, Amsterdam 35/V HotA. 71tz, uGust 16, 1919. Gentlemen: Owlet; to my proposed absence of a few weeks I find it necessary to entrust to Li'. rent, who will present this letter, all armIgements in regard to the shipment of gold to the Bank of :ngland. It is of course understood thet the Prank of :rigland is to actually take charge of the shipments, end I do not wish in any way to alter the arrangement in that regard. Nevertheless, Yr. rent will be in communication with the Federal 7eserve Bank of 7-ew York, of which he is still acting as Deputy Governor, and I would greatly appreciate your enabling him to facilitate in every way the carrying out of the arrangements covered by my written instructions to you of this date. Mr. rent has his own code and check words to the Federal Bank to enable him to conduct cable corresondence exactly as I have done and he is li,:ewise thoroughly familiar with the details of the transaction. 7eithfUlly yours, The Yederlandsche Bank, kmsterdam, Folland. Bs/v Hotel Ritz, Faris, August 16, 1919. Dear Dr. Viscering: Quite unexpectedly Y AM called to ConstaltinoLle, the trip seemingly taking about four weeks. In the meantime I have asked Mr. Kent to caJ.., at the Bank of Englund and effect detailed arrangements in regard to the ani..Iment of the gold rhich we discus:sod. 7n order that the neceseary payments may :;rom.tly ,Toceed I am going to ask if you will be good enough to observe the foliowin plan: Comjete the exact count and examination of ten lots of -, each, as is now being done, and re.;ort the results by the present method to the Federal Reserve Banker few York. 1. 2. Examine the remaining marks by the method which we diecussed, to wit, weigh the small begs without o.ening them, allowing for the weight of the bags and reporting the result as accurately as can be estimated to the Federal Reserve Bank of New York by the same method as is now being sued in reporting the reJulte of the accurate counting and weighing of the first ten lots. The cables should be both direct in code and through the American Legation for purposes of check. The Bank of England 11....s been good enough to handle the Shipment of the gold to London and Mr. F. I. Kent, whoucookanied me to Amsterdam's, is leaving tomorre4 for London and there will discuss the arrangement of detai.s with the Bank of England. I u furnishing him with the necessary letter of authority to handle the matter in my absence and am giving him a copy of this letter. A cable just received from New York indicates that not over I4,---,-'- in any one Shipment Gun be covered by insurance payable in dollars. Of course, all the gold should be insured, and the Bank of England is being asked to accommodate their plane to this limitationif it proves tobe final. It ia our resent intentiyh to ship a total of marks to London and Isbell await my return and further advice* from the Feder-i Reserve Ban aa to the disposition of the remaining 7 marks, being the amount accurately examined. With many thanks for your courtesy and looking forward to - further visit with you on my return from Constantino,-le, I beg to remain, 3incerelyyours, Dr. G. Vissering, Nederlandsche Bank, Amsterdam, Holland. Hate_ Ritz, Paris, August 16, 1919. PERSONAL y dear Dr. Vi_vsering: Much my regret it seems desirable that I should accom.any an offlciai -rty t Constantinople and I find myself with only time to send you the enclosed official letter with these very warn thanks for your many courtesies to me whiie in Amsterdam, which I deeply appreciate. It was grout pleasure to visit you and become -,-.:erzonally ac.,uainted -nd to find such great harmamyin our views. Your co)peration wit. the Burr of England and with Mr. Kent in arranging this gold mutter is very greatly a,preciated, and I can aosure you that the Federal Reserve Bank of New York will reci,rocate by every means in its power. Very sincerely yours, Dr. G. Viscering, The Nederlandsche Bank, Amsterdam, Rolland. Hotel nits, Tarts, August 17, 1919. Yy dear nr. Vissering: In my letter of yesterday I omitted to refer to the question of exerts° in connection with the handling of the gold. It is uederstood of course that we will reimburse you for all expense and outlay in connection with the verification and shipment of the gold, which I understand will include the compensation paid to your men for overtire work. It Is impossible for me to advise you definitely of the amount to be left with the Nelerlandsche Temk for safekeeping, until my return, when sh:-.11 have heard from the Federal Reserve Bank, but it is understood I that if the Bnk authorizes, as I shall recommend, the reimbursement of all charges which rn have made for the custody of gold held for the accollet of the 77ederlardsehe Bank at !:ew York, the Nederlandsche Bank will than be willing to take the custody of this gold without commission charge. Tor purposes of a:'counting,to cover the period when our books have bac_ cloned, we may ask that the amount of the fee to be reimbursed be charged back to the Federal Reserve Errik as a custody fee In connection with this transaction. You ma be assured, my dear Dr. Vissering, that it is my desire, and sure that of my associates, that the relations between the two instiI tutions shall be established upon a basis free of commission charge, if that is quite agreeable to you. Again with assurance of ray esteem and many thanks, I am, Sincerely yours, Dr. G' Vissering, resident the Vederlendsche Bank, t_msterdam, Holland. (Following cable received at Paris August 18th) Amsterdam 59296 55 14 11 BENJAMIN STRONG Care of National Bank of Belgium Brussels Received following telegram begins Terms unknown to Learn from New York insurance can be arranged ends Governor Bank of England Bank but understood cabled you direct NEDERLANDSCHE BANK (Following cable received at Paris '.ugust 18th) Amsterdam 5982 44 #5/8 9 , 59 M BENJAMIN STRONG Care of Morgan Hrjes & Company, *Place Vendome, Paris Received following telegram begins We are ready to send to take delivery at both centres as soon as Governor We await terms upon which to insure with Chubb authorized Ends Bank of England NEDERLANDSCRE BANK TELEGRAM Paris, August le, 1919 Doctor G. Viceerinz Nederlandsche Bank Amsterd...m Rave abandoned trip to my telegraphic OonstLtinodlci of wlich I have written you stop address Qontluaes care Aorgan Harjes and company Paris BENJAMIN STRONG NEDERLANDSCHE BANK. SECRETARIE.T AMSTERDAM, My dear Mr. Strong 21At August 1919 , From your letter of August 16th we noted your wishes about the further examination of the gold deposited with us by the German Reichsbank for the account of the Federal Reserve Bank of Newyork , and about snipping of 240 million Marks to the Bank of England . We are awaiting further instructions either from you or on your authorization from the Bank of England about the shipments and about the question if insurance will be covered by the Bank of England . I suppose that your suggestion to solve the question of the commission , paid by the Netherlands Bank on the deposit of gold in Newyork , will be very attractive . We from our side will be happy to come to an understanding that both parties will store up the gold in the shape of earmarking for the fa account of one another without any commission of weighing , counting , , the extra expenses etc. only to be reimbursed . Very sincerely y President of the Netherlands Bank Benjamin Strong Esq. Governor of the Federal Reserve Bank of Newyork http://fraser.stlouisfed.org/ 551. Federal Reserve Bank of St. Louis Hotel Ritz PARIS. 111 D,,.G.VISSERING AMSTERDAM. My dear Mr. Strong , I received your two letters of August 16th and your letter of August 17th and only yesterday your wire of probably 16 August reached me . I see from your wire that you have abandone your plan to make a trip to Constantinopel OM. . I sincerely hope therefore that we may have again the pleasure to see you in Amsterdam , for I would highly appreciate to have still a talk with you on several of the extremely delicate questions that are to be solved in the next time . I had the advantage in th meantime to see Mr. Paul Warburg on his way to his family . He also is very much impressed by the serious situation everywher in Europe , and in the end no less in America for of course various difficulties in Europe must finally have their repercussion in America special . Would it not be possible to use the very opportunity that several so very prominent men from America are just now staying in Europe of course quite informally to have a discussion - on all these problems , and would it be possible for you to spend some days especially for this purpose ? I should highly appreciate if such a meeting could take place in Holland ; we may then have also the opportunity to change views with some of the prominent men here the first place with mr. Ter Meulen from Hope & eo Benjamin Strong Esq. Governor of the Federal Reserve Bank of Newyork Hotel Ritz f.i. in . Of course DR.G. VISSERING AMSTERDAM. Amsterdam , 2 ( lst August 1919 ) I would be ready to go abroad if it would be more convenient to you and the other gentlemen that might be present to meet at anoth place . I get the impression from all serious men of business I have seen in the last months that they want to co-operate to any practicable solution and that they all see the necessity of coming to some understanding in these intricate matters of international exchange ; so I feel that it is the duty of all of us to do the utmost each in his own sphere to come to the rescue of the European comrunity . Would you be so kind to inform me if it would If you could inform be possible for you to come back to Holland ? us some time before , we will try to arrange another trip for you to some interesting parts of our own country . Very sincerely yours President of the Netherlands Bank Benjamin Strong Esq. Governor of the Federal Reserve Bank of Newyor4 Hotel Kite P A R I S. a GeV.- * of gradual improvement, not only in a material way but in general in the state of mind of the war-weary population of Europe. Just as soon as the business which now detains me in Paris is completed I sh-11 telegrajh you of my intention to visit Aaterdam with sufficient notice so that you may not be inconvenienced. Again with kindest regards and many thanks for your courtesies, I beg to remain, Sincerely yours, Dr. G. Viccering, The Nederlandsche Bank, Ameterdan, Holland. Hotel Ritz, Paris, August 25, 1919. My dear Dr. Viseering: Your favor of the 21st instant Net reaches me and by now you will have doubtless heard free the Bank of England in regard to the arrangements for a:LAI:ping 240,000,000 marks gold to the Bank of England. I am informed by the Governor of the Bank of Englund that re)reeentatives of the Bank are to be in Ansterday this week to arrange the matter. Since my return to Paris I have obtained more precise information In regard to the amount of the payment to be made in connection with the matter we discussed, and have decided that it will not be necessary to leave more than marks for safekeeping with your good institution. I am therefore writing to advise you that instructions are being sent to the Bank of England to shit a total of 564,000,000 marks, the amount to be left with you being four lots of German which have been exactly verified, the weight, quality and value of each therefore being already reported. May I trouble you to inform the rc2resentutives of the Bunk of England to this effect and that I 4M writing to the Governor of the Bank in order that they may receive their Instructions direct from him. I may say that I am still without final authorization from the Federal Reserve Bank in regard to this matter, as cables seam to be greatly delayed, but I have no doubt that thin arrunocient, together with the arrangement which I proposed in regard to comaissions, will be entirely satisfactory to my associates in New York and I um grateful to you for your kind coo'eration. Very sincerely yours, Dr. G. Visoering, President, De Nsderlandeche Bank, Amsterdam, Holland. BS/V p S Hotel Ritz, Paris, August 26, 1919. My dear Dr. Viseerings With this I am enclosing copy of a note of introduction which I have taken the liberty of handing to Mr. Dean Jay, of Mensrs. MorzAn, !, cork um,y,, Has' Mr. Jay is a personal friend for whom I have a very high regard, and I need not unsure you of his reliability and trustworthiness. Then I learned th the nature of his errand to Amsterdam, it occurred to me that it might be to his advantage and yours to meet and discuss the plans which he has in mind, and it well may be that I can reach Amsterdam before he leaves and discuss thematter in person. Any advice which you find it possible to givehin will be much appreciated by me. I an looking forward to reaching Amsterdam the latter part of this week, or early next week, and will telegraph you a few days in advance of my arrival. With kindest regards, I beg to remain, Sincerely yours, Dr. G. Vioserinz, De Nederlandache Bank, Amsterdam, Holland. 40 Hotel Ritz, Paris, August 26, 1919. gy dear Dr. Vissering: This note will be presented to you by !T. Dean Jay, of New York, who is a valued friend and was formerly associated with ue in the Liberty Loan organization of New York. 21r. Jay has been for aome years connected with the Guaranty Trust Com2any, but has recently associated himself in an important capacity with the firm of 4L: P. Morgan & Company, of New York, and Morgan, Harjes & Company, of Paria. mr. Jay is about to proceod to Amsterdam an an important mission for his firm and I have taken the liberty of suggesting that he call upon you and seek your advice in regard to the business in which he is interested. You may be sure of my appreciation of anything Which you may be able to do to facilitate Mr. Jay. With assurance of my esteem, I'beg to remain, Sincerely yours, Dr. G. Vissering, President, De Nederlandsche Bank Amsterdam, Holland. BS /'l di Hotel Hitt, Paris, Au-,not 1919. ry d4c.r Dr. Yinseringt k cab' n just received frer. tho Fedoshl Reonne Bank of Newiork oclviaee of a casange in the :-.Togrury. in regard to the handlity: of our gold, ..,hick w1.tt. nale....e i.t rocesrst.-.ry t.7N tbn entiro Amami. nor hold 1): your institution to London. This T. regret, but, I feel obliged to oarry out thee() inefructl.-ms ltnlosts the sho..ild be altered. 'Dofore Alastere..o- -,1),Jut VI'tdnend.L.y or Thured.-...y of next week. . Advice of this change of progre2ra in being vent to thn lank t..11 f3 request that t''.eir re:-Ires&ntativen rxntifled. :)1.. nrkg1:4:ost ;0 I arj !Jed that the tot,-,.1 .Noun; which Lucy be insured in any one cenveyJnce is r;6,,er),e,,,;', thin ...,nour.t tc... Include the value of the gold plus onr, .,er cent. allowance !..*--dr cost )2 shipmer..t. I am planning to leave here on Tuesday, e2twid one day in BruJsels, and tarn ;:roceed to Aasterdaili, whero 7 d!, 11 hope to k-,-end. but I very ranch Tear that it will not be possible for ;:x to t1.c.2:e trip :ua Holland *nich I la,1 conteaplated. If wo There arc many m4Atera which I an Tel cluito 're-; tho latter :.!art opportunity the diccues with you, and, nagt wank, wo will I hope have Jek;:i-3uria to for a furt%er kiiLdeLt roe; a:, ii4d..t..h.441-,.ii4g, you. fc.r ,y.)ur courtesy in handling vino ,;.22.c1 it. 1)el.i.lf, 7 bez to :maim, Faithfully yours, =7,r. G. VitiserirL,;, :'resident, Be liederl.andsche kuterdat,;.; for Wr.Strong. 6 September 1919 Secretarie FE DRFSF.RVE NEWYORK Remaining germangold consists of Marks hundredtwentymillion grossweights Kilograms fortyseventhousand fiveeightyfive grams nineninetyfourhalf.Roubles fivemillionfivehundredthousand Kilograms fourthousandsevenhundredthirteen grams sixninetyeight-Austriancrowns eighteenmillionthreehundredthousand Kilograms sixthousandoneninetythree grams eightninetythrechalf,Sovereigns onemillionfivehundredfiftyfourthousand fivehundred Kilograms twelve thousandfourthirteen grams sixhundredseven. Bars onethousandsevenhundredninetynine Kilograms twentyonet_ousandnineseventyfour grams twothirtytwohalf.Nettweight bars according to germanstatement Kilogrammes twentyonethousandeightthirtyseven grams threehundredfortycommafour total grossweight Kilograms ninetytwothousand eighthundredeightyone grams fourtwentyfivehald 8244541 HANOTEEKENING NIET MEESEINEN. Ned,rlandsche Bank 1:otel Ritz, London, September C 191:. My dear Dr. Vissering: My visit with you was most delightful and I am writing at once to express my warm a:Treciation of your courtesy. Later in the day I hope to learn definitely about my steamer accommodations and will telegraph you the possibility of a hurried visit to Amsterdam to meet Mr. Warburg, but, as I notice the Baltic is scheduled to sail on the 19th which would necessitate my leaving London on the 18th, it would so curtail my time here that I fear another trip to Amsterdam will be difficult if not impossible. On going over the various cable advices from New York giving the results of the examination of the gold, I find that in a few cases the fractions are incomplete by reason of mutilated cables and am writing to ask if a cornlete statement maarizing all re-2orts sent by cable could be made up and sent to me here. May I reoeat the hope ex.xessed to you verbally that you make the ciportunity before very long to visit us in America. It has always seemed to me that these visits are ,,roductive of excellent results, and I shall never regret having taken this occasion to visit you in Amster- With kindest regards, I beg to relaain, Sincerely yours, Dr. G. Vissering, De Nederlandsche Bank, Amsterdam. BS/V copy RESERVE BANK i FEDERAL NEW YORK OF London, September 8, 1919. TELEGRAM DR. G. VISSERING De Nederlandsche Bank Amsterdam Must leave London on eighteenth to catch steamer sailing nineteenth so regret impossibility meeting with Warburg as proposed stop Have telegraphed him Sarvetta House St. Moritz to this effect stop Beet regards 410 MENJAMIN STRONG mittockii LEUultU `c, TELEGRAM TELtGRAMME ADN i NISTIORT98 ELS II est intcrdit aux DDS TEltGRA Scheer van Telegrafen en Teletonen portcurs d'accepter aucune gratification. ambassade sta;sunis bruxetdes (2. be.ctellers mo- gen geese belooning, hoe ,Yekk-,41.1.A tit-1 a ook genaamd, aanvaarden. h Indications de service les plus usitees inscrites eventuellement en tete de l'adresse, en toutes lettrcs ou en abrege : Aleest vonrkomende dienstaanwikingen die, als er Tijn, voluit of verkort poor het adres norden geschreven : Teleg. avec accuse de recep- n Teleg. urgent LI Dringend teleg. v Di Expres pave RP# Antwourd betaald A I I Bode betaald Reponse payee pc n tion postal tion telegraphigle releg, met teiegrcfische ken- pCr Teleg. met kennisgeving van ortvang per post nisgeving van ontvang 1.'litat nest sot:tills a aucune rcsporsabilite a raison du service de la coircsrenclarce Trivee par vole telegrarhque (I.oi du I" mars 1651, art. 6). Luidrns art. 6 der wet ran I' OlaaJt 1-51. is de Staat geensi. ins verantwoordehjk l'cor den dienst der bikondere telegrammen, M5P A A fzc amsurdam 8012 4 12.7 a = Priers demander monsieur benlamin stron0 probablevot a DruxeuGes mercredl de vouLoir nous AetePrapPicr si pus ine dilZe exaota de, sa visit qr a, amsterdam en Fenaapeuats presidPmt visarinP redprLandsche bang He d autres i CI a.; DR. G. VISSERING AMSTERDAM. Amsterdam , 11th September 1919 Benjamin Strong Esq. LOr DON. My dear Mr. Strong , I received your letter of September dth from London and your telegram reached me already before will sail on the 19th inst. per S. S. Baltic , mentionthat you . I regret very much that we will not have the pleasure again to see you here in Amsterdam and especially that it will be now impossible for you to have a conference with Mr. Paul Warburg, for I fully agree with you that such conferences wiWihave very good results , mind and are throwing a new light on as they clear up these very difficult problems that can be solved only after very mature considerations . I thank you again for the trouble you have given yourselves/ to come to Amsterdam , and we all have highly appreciated that you have given so much time to discuss these problems with us . I send you enclosed two copies of the memorandum which , as I told you , I have made up about these questions . I request you to see in this memorandum only the utterance of some ideas which have come up in my mind during the several discussions is not a plan ; so it but it contents only some renArks about the possibility of taking some measures as have been suggested during these conversations . Will you be so kind to hand one of these copies to Mr. rent with my best greetings . Wishing you a very good journey and hoping tat DR. G. VISSERING AMSTERDAM. 1 ( ) Amsterdam , 11th September 1919 Benjamin Strong Esq. LONDON. not too distant to have the great advantage to meet you again in a future , I beg to remain Very sincerely yours,/,_ S President of the Netherlands Bank 2 enclosures S S he opinion is gaining ground on every hand that America in the first plaoe, but also the neutral stltes, should now join in oo-operating towards the improvement in the conditions provailim; in the countries which participated in th e war, and one of the most urIent steps will be planning a oredit system in °connection with the terrible and unpreoedented depreciation of the various currencies and of ti-.0 dislocation of the universal' bill and money traffio. the enormous differimees which have eons about during and sines the war in the relation of the imports and exports of various countries to each other, and the terrific increase in the circulation of fiduciary paper, have created differenoos in the rates of exchange of the various cIuntries whidh are so wide that they can no longer be oontrolled by the application of the old method of .-..ending gold or drawing a cheque on a balance abroad. :)ther measures of a much more radical nature will therefore have to be adopted for the time being, amongst which we must in the first place oanoider the granting of credit to the countries which have been so sewer# ely visited by the war. the population of these countries must be enabled to return to work so that the willingness to work is not frustrated by the impossibility of obtaining raw products, rolling stock, coal and so many other goods indispensable to bringing society into its working stride again. It has already been premised that there must here bo no question of affording aid to a single oountry or even a single group of countries which were allied durins the A.m.; the inter- ests of the whole of 2urope are here at stake and, if well-oonsidered, even of the whole world. If therefore an organisation were formed for this purpose, snob en organisation would eventually have to take measures applieable to all countries which have suffered in oonew7uonee of the ar, on whatever side they fought, and which of courne can be considered to be in need of such aid towards reconstruction. In view of subsequent discussion one could divide the variouP countries into two parties: IP (0 on the one hand the lending countries*, i.e. ;'ho are prepared to oo-oporate in furnishing the means of reconstruction to the countries mentioned sub (b); (b) on the other hand the nborrowing ceeuntrieee, i.e. the countries Which are to reoeive the assistanee. The lending countries would in the first place have to inOlude the United States, of North America, one or more of the south American States and, of the neutral ceYuntries in 4uropet the Netherlands, Switserland, the three soandinavian countries and perhaps also Spain, although the last7tioned would be very Behind the Netherlands the Netherlands Nast Indies. bable that. eurtner, it is moat pro- 2ngland oould also partloipate to a certain allount on this ei4). The object of this assistance ream be to came to the help of the borrowing countries at as favourable conditions as possible. The lending countries at not terefore cherish the intention of making a financialljerofitable buainees of it. On the other hand the lending countries will have the right, one might even say the duty, to demane that absolutely first oleos security should be furnished by the borrowing countries in return for the funds advanced to .hers, either in the form of money or in the e. Corm of merchandise. c Ave first rate guarantees eill, besides, (preeliselyibo a good reason for rlaing the finmcial terms an easy as possible for the borrowing countries. moth for the reasons aboveriontioned, ant also in order to avoid any further froinsement, as great a dee7ee of uniformity a as possible will have to be reined, at in the terms to be submit- ted to the borrowing countries. A differentiative arrangement f'r any single ani senarate state might perhaps eauee a erievInce and act eonerhat a' a repellant. If it is clearly the in- teetiol to make the oonditione as equal as possible for all countries together, this element of a less apprectiative nature oan be omitted. Above all, therefore, excellent guarant--)ee for the payment of interest and for the regular anausl azortlz IP rs. 411 11 ation of the funds placed at the disposal of the borrowin4. count ries will have to he looked for. ;enerally speaking thia credit could be granted in thmlo different ways: 1. by the creation or a newsraece2ting busineade 2. by lending money for longer periods, so that the grantinj of suah credit would have to take place more in the form of an investment; by taking over large going oonoerna with foreign capital and to render it possible for the exploitation of these con°erns to be oantinuod under the new oirou7mtancee. Re 1. -she oacoepting business" will, from the very nature of it, have to be created for transactions which would have to be financially oompleted in a oar.paratively abort wpaco of time. i'or this purpose a now body would have to be established having as ita sp.Aaal objoot the acceptance of bills for thoue transactions Li h, after mature consideration, are entitled to such weer:twice. Let us assume that ouch a body had a capital of 2L) ml.11icn, anti that the greatest part of the capital were taken up by America; that the rest should be distribwAd over a number of neutral states, for whiCh purpose the Netherlands, C;witzerlanU, the ;_icandinavian oauntries per haps a few of the .r:-:ariean States and possibly .:2ain would in the first place oome into aonsidaration. The possibility' of ong6ing i_:agland in the arran;;enent mu.3t certainly not bo exoluded, in spite of the fact t a ::ngland was involved in the war. this wacoeptanoe bank" would on.11 aeon the co-operation of the woentral be.nkew in the variouo osuntrica ao that the latter would be prepared to discount anoo bank. billa accepted by the acoopt- this would simultaneous17 create an official die - count .1;:arket for these bills std they would almost certainly be generally plc ood on the open market. lie acceptance bank could Ahem be authorised to aooept bills to the suitor four or at most six times its own capital. This. would thus Greats a oredit faoility of z 11 123 to A 175 oi/lion. It goes without saying 4. 41 that the further limaturee tc t:A) bills must be well secured, 110 that one should be able to oonei-der those bills as being amens the best co:z2)roial bills obtainahle at that monent, and a strict oontrol.would have to be maintained on the :7antin1 of the mew:Ito:use by the aceeetanoe bank on these bills. Seeing that these aoceptance credits are exclusively ;7;ranted for trane- actione *hid!: must be financially oonoleted within a short spaoe of time, such an aocieptim facility by this bark alreoly nfford a oonsiAerable wgpport to the international market; for if these mature in three menthe, the acceptance facility con be run up to four tines t'.e areount in one year, and if the bills should have a =money of six months, to twioe this amount. Moreover the action of this aoceptanoe bank night also induce the private banks to join in working in thOdirestion, and also to interest tliemselves in really mound oommeroial transeotiono, whioh would naturally still further extend the grnnting or credit by way of aeoepting. business. This idea will still here to be worked out as to whioll oountries will be able to join in this form of credit wanting and also as to shat anounts they are eventwIlly prepared to ooseerate. IP 411 41 5. attained in the value of the bond, expressed in the various ourrenoiess ?he war has rendered this method exceedingly dif- fioult, if not ineoesible, for during and owing to the ear vitreous oeuntriee oould or would not maintain the gold basis or their oen curenoies. ee have seen that the benieerent oountries have been forced to reeall gold iron circulation, and to euepend the export of *fold, in other words to give up maintaining the rate of exohange via -& -vis of foreign countries. eels has brought about fluotuations between the rattel of exchange to a degree formerly unknown. In :'woolen, the remarkable cir- ourstanoo has even occurred that this country, in no way oblig- ated but of its on free will, made its currency free from the :fold basis, she coneequenoe was an absolutely incalculable rise of the Swedish Orown as a medium of payment in Sweden. To make these notes payable 11 the currency of a nurbor of different countries will therefore not be aeain poaPible before all his these oountries have returned to the strictly gold beets, is at present not yet the case and it is quite uncertain if will in be the case in the future and if no, when. tht Under these oirouestanoes one must naturally oonclude that it would be an impoveibility to creete a note that .lould be payable on really the sane basis ie United Staeae eeelise 2aunds, Dutch guilders, floandinevian crowns and Swiss francs on the one hand, or the liabilities of which, by the borrowing oountrien on the other hand, could be fixed on the same footing in Prench or DOlelan eranoss German -arks, Austrian orowns, Italian lire, or in Polish or iielenian currency. If notwithstendine this an a tenet in made to is-ue a uniform note for all the lending oountries, this will not be pew:Able otherwise than by making out the note in the currency of the country which will take up the bulk of these note., so that the note will necessarily have to be nade out in United :Mates Dollars. Perhape one could lino try, -ide by side with this, to meece the note payable in enelish pounds, on the express condition that this should be taken mean cold sovereigns. The quection, however, then still re- mains as to how far it will be poneible to really w to the gum of so many milliards in the long run pee-3131e in enelieh gold. http://fraser.stlouisfed.org/ If however Federal Reserve Bank of St. Louis the notes are made out In one ourrenoy, e.g. United 7. The great puzzle in therefore in the construction of these plans http://fraser.stlouisfed.org/ When Federal Reserve Bank of St. Louis organizing the unieerral note for the lending countries. 8. These 1 3 milliard would be distributed among the borrowing http://fraser.stlouisfed.org/ countries Federal Reserve Bank of St. Louis as fol./owe: 9. tribution of the funds lent and oolleot the money to be devoted to the eaynent of interent and amortization to the I. u. on be- 10. had paid into the ouaranteo fund. ing countries If therefore all the borrow- have e*Aually ailfilled all their obligation() 12. IP Ye cannot deny that many problons will still arise on plan- ning nuah an orgenisetion; on most difficult point indsodowill for instance be to what extant the notes of ono borrowing country 'then dosed in the lenlin; c'suntriee can bi3 niamed on the sane level as tho notes of anotiler borrowing oauntry, eM, especially, bow they can be kept there. The guarantee fluid under the nanaaoment of the I.G. will however undoubtedly have con:siJarable influence to7mrds bringing and keeping the estimation and monetary value of thee° notes as much an ponable on the same level. Purther, it will naturally be of preponderant importanoe that the committees in the borroTini; countries should furnish guaranteea which are adequate in every sense of the word bo rsufficiantly and that tho levies for the service of the aeeured. should such a sohene be 'serried out, eloh lenAing country will than receive notes nado out in its on ourrmoy, no that the alrortisation can also be guarentrJed in that currency, the queetion or the rates of exohan.ss of the borrowing conntriec vin-h-vim of the lending countries, \lhenever t' tomer receive ,;oods *'rot: the latter, can also be solved in this mannor. Re S. A third method t:lat right be applied is, as remarked above, that capital mhould be ocllected in foreisn countries to tnke over gam: concerns in various oountries Which onuld not continue or not properly oontinue their exploiLation owing to the bush of capital. All kinds of (*neer= could be selected flor thie purpono, either aGrieultura/ or industrial, lapse hotel ooncerne and even /Arlo baths, such as existing watering places, wbieh in view of their medical value must eventually ba re-opened to large numbera of foreign visitors. ?recinaly the fa ©t that moh 7aterin7; nieces are finaneed by an intornatianal eyndictate, rill do much towards bringing baok fornor propperity to these places, (here !lationalistie prejudioes need no longer prevent visitors from Jta7ing thore, and whereby medical science throughout the wholo would ba ;Teatly benafited, Another poo3ibility is for itz.tanoe the ex:Ilittatio-1 of elect ric power from the rivers; and mkterfalls in Austria. 13. 14. Ritz hotel, London, .3eptember 17, Ly dear Doctor Vissering: Your letter of 6eptember llth with the enclosures has just reached me, and I look forward to reading to e memorandum with Freat interest and profit. One copy I are sending to r. Kent with tine suggestion that, if it is possible for rim to oe in Amsterlpm again to meet you and Mr. 4arburF, it would be highly desi:able for nim to arrange it. I am most regretful to oe obliged to return without attending such a meeting myself, but matters at home stem to u,ake it necessary for me to return. it has been a very great pleasure to me to meet you and I have profited much by our discussions. You may count upon hearing from me as soon as any matters of interest tae form at home. .oith kindest regards and many thanks for your courtesies to me, I bfg to remain, jincere1y yours, Doctor D. Vissering, liederlandsche Bank, Amsterdam, holland. BS/PE eMSTEPDAM. Amsterdam , January 26th , Benjamin Strong E 1920 Governor of NEW YU My dear Mr. Strong , of which the last of Jan I hearty regret that you and you had the intentio hand I have noted with v intention to make abraWA a very great pleasure to your trip over Java an , of the most interesting I will introduce you ent the Governor-Ge 1. Stirum , residing at Bui 2. my friends of t 3. Dr. Bosscha , r plantations in the neigh 4. Mr. David Birri part of Java ( especiall and then I should m to the Idjen -Plateau you hospitality . , w The if not the most wonderfu ' M TE M. benjamin Strong Esq. / 0 NEW YORK. banker and financier from Belgium , went there on my recommendation and and after having travelled throughhout nearly the whole world especially after a trip over British-Iia , he exclaimed that the most beautiful thing he had ever seen was the Idjen-Plateau with its incomparable crater-lake of the Kawah-idjen . Several times I have visited South-Italy and Sicily in order that I could compare these two wonders of nature , but my impression of the Idjen-Platea was that it was still muk, more interesting and still more magnific then the Italian crater-regions . I will write directly to all these gentlemen so that you can be sure that at the moment you will be arrived at Java , you will find every assistance if you will have only the precaution to wire to the Javasche Bank the day of your arrival . I think that it will be better to send the letters of introducalrectly to Java , in order to avoid further perils of these letters being lost in sending them to a remote spot in America You will have heard of course that our memorand has now been published in the eight countries who were represented at the preparing cilferencea in Amsterdam countries , , and still in some other and uptil now the impression has been very good . I expect that the book of Mr. Keynes will have a very sound influence on the public mind all over the world ; it is really a splendid book In order to prepare the public opinion also in our country for the e:x.pected publication of the memorandum , gY/ I have . ..... MSTERDAM. Amsterdam ( 3 , Januarl 26th , 1920 ) Benjamin Strong Esq. NEW YORK. written a series of articles in one of the leading papers here ( the Algemeen Handeisblad . ) These articles have been reprinted and published as a pamphlet in Holland , and a trarilation of it will appear in English with the support of Messrs Macmillan xc Cy as editors . I will send you as soon as possible a copy of this brochure in Englioh . I have had the pleasure to see :.1r, Kent not only on the both conferences held at Amaterdiia him in Paris during the last days of the year but also to meet . I thank you very much for your kind wishes at the occasion of the New-Year , and I reciprocate them most hearty. With kindest regards and very respectfully yours 4M,T Amsterdam , March 6th a , 1920 Benjamin Strong Esq. Governor of the Federal Reserve Bank of Newyork NEW YORK. My dear Mr. Strong , I received your letter of February 6th , and I read with very great pleasure that you are on the point to come to the execution of your project to make a long journey through the Great East , and it was a specially(great satisfaction to me that you have the intention to go also to Java , and possibly to Sumatra and Borneo . A journey to Borneo is rather troublesome ; I think it will be best to get informations about the possibility of going there during your stay at Java . Some parts of Sumatra are very interesting , and especially would be very interesting to make a trip from Padang through the interior of Sumatra , either to Palembang via the rapids of the Kampar-river , the plateau of Central Sumatra to Medan or otherwi Also such a trip could be organized best in Java I have informed His Excellency the GovernorGeneral , Count van Limburg Stirum ; my good friends President and Directors of the " Javasche Bank " most prominent tea-planters Idjen-plateau ( East Java ) ; Mr. R. Bosccha , one of the ; Mr. Couvreur , residing at the splendid , and Mx. D. Birnie , one of the first planters , at Djember , of your arrival in Java , and I have asked them to give you all the assistance and facilities that you should want or like , and I am sure that they all will do their utmost to 7-7 .AMSTERDAM. Amsterdam 2 ) , March 6th , 1920 . Benjamin Str NEW YO make the trip as pleasa Therefore I will not se American Ambassy at Tok directly to Java , but " Javasche Bank " in ti harbour of Batavia ) . platform to receive you Tandjong-Priok . I wi Office in Newyork , to the American Ambassador one of these letters wi I have written to Java will not only be a plea you will be able to get activities of our beaut an opportunity to retur have the pleasure of se Phoenix, Arizona, March:1:::::11111111ill SA 11 -Dr, G. Vissering, Amsterdam, Holland. my dear Dr. Vissering: It vas a very great pleasure to receive your kind letter of January 26th, w'ioh has only now reached me because I have been wandering over the desert of Arizona, and even into Mexico since early in February. Ue have had a most enjoyable and interesting trip which has done me a great deal of good, and now we are prepL.ring to sail for Japan from San Francisco on April 10th. The letters of introduction which you were good enough to forward to Java will indeed give us the opportunity for a most interesting and instructive visit for which we must thank you. Pceeibly you recall my telling you when I w= in Amsterdam last summer that Lone day I expected to visit Java, but I little realized then how soon I wculd be there. We shall visit the places recommended in your letter, and I shall also take the precaution of wiring in advF:Iice to the Javaoche Bank, notifying them of the day of our expected arrival. Mr. Kent has written me frequently and fully of the good work which you and others have been doing toward a reoonetruction program, and I have read the memonrandum lahmitted to the various governments with a groat deal of interest and-hearty approval. You have, of course, learned that it received the signatures of some of the root imrortast men in the United States, and I should have been delighted to sign it myself had not my relations with our treasury departr,ent been of such an intimate character that I feared the popaibliity of its being misunderstood and er_usin7 emf barrasement, which would, of ecuToes have done harm rather than help the effott. A recent Mail brngs me a full report of the ooeclusion of the gold account with Germany and I g.ther that our account with your good institution Is also settled. Let me take this oprortunity to express to you the groat al:reoiation which I have; and whicr my aseociated share for the splendid help which you gave us in handling that matter. Possibly you have already received a letter from the bankvith the request that those of your men who had char7e of this matter receive a statement of our appreciation and thanks. I cannot conclude this letter'without Once ore .01 Dr. G. VioserinA 117s Amsterdar Holland thanking yogi for the splendid time which you gave me during my visit with you last summer. If posnible shall make another short visit to Holland on my way home fron the Ortint, advioing you well in advance. With warmest regards and again with many thanks, I am Sincerely yours, ei R. G. VISSERING 11, AMSTEDAM, 21st December 1920. TERDAM. Benjamin Strong, Esq., c/o The Bank of England L ONDO N Dear Mr. Strong, I have received your cable informing us that you could arrange to spend one or two days in Amsterdam before your departlre to the States. I need not tell you that we highly appreciate your kind intention and that we should be delighted to see you here. On the other hand I fully realize that your time must be very limited and that this trip might be rather inconvenient to you. If this should really be the case, I would kindly ask you to frankly tell us so and to postpone your visit until a more favourable occasion presents itself, the more so, since, at least as far as we are concerned, no questionsof importance have to be particularly discussed at present. If however you prefer to carry out your plan all the same you will of course be heartily welcome and in that case the 29th December would be the most converient day for us to receive you. With kindest regards and best wishes of the season, Very sincerely yours, 47: POST OFFICE r TELEGRAPHS. Charges 1 This form must accompany any inquiry made to pay By respecting this Telegram. To By Receiv.eW; Office of Origin, Foreign Number, No. of Words, Date, Time handed in, and Service Instructions. 8011 AMSTERDAM BENJAMIN STRONG COMPLIMENTS OF l )tile Sent from f = No. of Telegram C 50 319 100 M = gV. BANK OF ENGLAND LONDON THE SEASON AND PLEASANT JOURNEY TO UNITED STATES WE THOROUGHLY UNDERSTAND THAT TROUBLESOME FOR YOU TO MAKE TRIP TO HOLLAND SURE WHEN YOU A BUT WE. HOPE OCCASION ARISES TO HAVE THE FAVOUR TO GIVE CORDIAL RECEPTION IT WILL BE = VISSERING = TELEGRAPHS. No. of Telegram I his form must accom- pany any inquiry made respecting this Telegram. Office of Origin, Foreign Number, No. of Words, Date, Time handed in, and Service Instructions. AMSTERDAM 8087. 54 239_ 11.45 M RJeeived here at = BENJAMIN STRONG BANK OF ENGLAND LONDON = SHALL BE DELIGHTED TO SEE YOU HERE PROVIDED THIS TRIP NOT INCONVENIENT TO YOU STOP INCONVENIENT WE SUGGEST IF POSTPONE VISIT AMSTERDAM THE MORE SO SINGE WE HAVE AT PRESENT NO SPECIAL QUESTIONS TOIDISCUSS STOP IF HOWEVER YOU COME MOST CONVENIET DAY FOR US DECEMBER TWENTYNINE = V ISSERING 23n December 1920. don Ire(ddent SThONG SHALL BAIR 02d L1ALARD D:ZIGITT TO LONDON -!.)111-.Di.P.D THIS TRIP NOT YOU INCr rrIn T..-17T TO Y^T.1 STOP T."' T.:Cr,nrv.NT VISIT AYSTZIMAr. THE '.ORE SC :INCE 7117; MCCEST POSTIONE 1 HAW: AT I;RE3f.:1T 110 OUF,STIONS TO DISCUSS STOP IF HO.'I'W4R YOU C.:01172. YOST coliw.2alor DAY FOR US DECEPTTI VISS;,;RING I Hotel de l'Europe, Amsterdam, August 11, 1926. Gentlemen: This will authorize you to claim any registered mail coming for me in your care from the pootoffice department, and to sign the receipt for any such mail for me. Very truly yours, De Nederlandsdhe Bank, AISTERDAM. Hotel de l'Xurope, Amsterdam, August 11, 1926. Gentleman: Enclosed is a letter authorizing you to claim any registered mail which may come to me addressed in care of the Nederlandsdho Bank. I am now writing to ask if you will forward telegramo received by you for me, until and including next Monday, to: 0/o Hotel Grand et Euler Basle, Switzerland and any mail which may come for me to the same address, until and including Saturday of this week. Mail received subsequent to Saturday can be forwarded to me in care of Messrs. Morgan, Harjes & Company, 14 Place Vendome, Paris, unless I telegraph you otherwise in the meantime. This will also apply to some photographs which Dr. Vissering is good enough to send me Shortly. Thanking you for all the trouble you have taken in connection with my correspondence, I beg to remain Very sincerely yours, Do Ne6orlandoChe Bank, AMSTERDAM. anal Pr' Mir fEr 1111, r August 18, 1927. My dear Dr. Viseerin: for Europe My friend, Mr. Garrard B. in ton, is w fling I 17.!-sve taken the lib,,,,rty of , in b. fevi days, tii11 be in teinEterdors, flea/ring bin that yo Netherlands Dank. You w :;.ec:ret,-..ry of noIr T wesociate of mine. Sterling, llo LIT 1 fe.ct Mr. dnErton i the Preeictent of t Anston. I hav hardly sec.,.med n..c 1.1.th Dr. G. ViEsering, President. deNede Amsterd,..m r.n ,73)c7,1 440 Ai-tAte-44/4-i /1'73 /9(c P SoVikt_ he Currency Question as Viewed by a Foreign Banker By Mr. I. deBruyn, of the firm of Amsterdam, Holland Messrs. Adolph Boissevain & Co., Bankers We take a real interest in the banking and currency question in the United States, because we regret that a great country, like yours, should be so badly equipped in this respect, also believing that a change for the better will intensively industry and the money- affect trade, Of course, the imperfect knowledge of local conditions may hamper us considerably in giving a sound judgment, market. but, as we understand it, the people of your country do not take kindly to the private management of a Central Bank, and, therefore, it is the intention to confer that authority upon the Treasury Department. Stating it otherwise, they propose a Central Bank owned by the local banks and controlled and governed by the United States authorities at Washington. Twenty years ago the writer spent some years in the East and at that time every- body agreed that the Chinese were the most conservative nation of the earth and that they never would consent to have their hairtails cut. And now, this wonder lb has arrived and conservatism has le these 400 millions without disturbing world to any great extent. Does this not show that everywhere people have become more openminded, more willing to try new ideas, more inclined to accept 0provements, not gradually, but at once, having departed from the old custom of refusing what was offered them because it was new. Therefore, we believe that the innova- tion of a central bank, being a bank of rediscount and centralizing the banking reserves of the country may be safely established at once. As soon as it works, its benefactions will be felt and its antagonists will disappear faster than melting snow. Who should own the capital of a central bank, and who should be its governors? Experience tells us that a central bank must be powerful but independent, in the first place, independent from the Government because in case of war or internal disturbances, the first duty of the bank is to assist trade and industry, as well as the Government, but not the Government in the first place. If its capital belongs to the Government, its reserve power will be used by and on behalf of the Government only and its credit will suffer as much as the nation's defense. Specially in the case finance of a nation want a strong central bank, and not a bank whose reserves are depleted by the Government and whose action was never influenced by an inde!Went board of governors whose principal aim was maintaining the credit of the nation, which is different from the credit of the Government. And if the governors are functionaries of the Government, they cannot refuse to hold the reserves ready for the Army and Navy Departments, for they have to obey orders. Even in years of peace a Government is unable to run a central bank. Everywhere central banks have started as Government establishments and history shows that their relation to the Governments never had any beneficial influence. Ministers come and go, the governors are their inferiors and may be appointed not because they are first rate bankers or merchants, they have to obey orders, they have more regard to the approbation of their superiors than to the money-market, and bankers and merchants will decline a share in the Government because their atmosphere is not red tape but fresh air. Moreover, every new Minister may have ideas of his own which he wants to try, a policy based on long practiced principl becomes impossible and consequently mill) takes follow each other, disturb business and shake the confidence of the people and its financial advisers, the bankers. Nothing so shy as credit, it wants to stay wee stability reigns, but it is very loath to enter into volcanic regions. These reasons count for any country. As to the United States of America, so far their Government is not superior to those of England, Germany, France or Holland. You have many politicians, but few statesmen, economic principals are seldom fully understood, though every politician has his own ideas about banking, currency and the Stock Exchange. How then can one expect that the leaders of your Treasury Bank will be superior to their European colleagues. Your minis- ters and secretaries are wont to shape their policies according to what the people want, while in Europe the Government is entrusted to men who have ideas of their own, the result of long years of study and practice, who teach these ideas to the people, instead of asking what they can do to oblige them. Here similar questions are decided on their merit and no political party would ever include an economic measure as the Aldrich-plan or a Treasury bank in a platform declaration, because c ilhese are things for experts to decide and not for the common people, who are totally ignorant on such questions. Here we feel that the people must be led, being themselves unable to lead, and it will be same with you in spite of all the "coquetting" of politicians. We know that the Democrats and many Republicans believe in the existence of a money-trust, of a combination of big bankers, not averse to creating or assisting depressions in order to enrich themselves. We believe that such men existed in former times, but that such a conspiracy at the present time is impossible as it ought to show its hand quickly. In any case it will be impossible when a central bank is established and we refuse to believe that it is impossible to find in the II. S. of A., capable, private bankers, public spirited citizens, who can conduct a central bank as it ought to be conducted in the interest of the nation. In our opinion there is not the slightest doubt that these bankers can govern a central bank much better than government officials, who seldom have had sufficient training and seldom have learned to act on their own initiative, acting quickly without being unduly harassed by their own feeling of responsibility. In 1890, some months before the Barin4 crisis, many financial bills-acceptations o bankers-began to appear in our country, being offered for discount on attractive terms. The president of our central bank, Mr. N. G. Pierson, at once felt that sc. unknown danger was near, he refused to rediscount these bills, and when the crisis came our country was only slightly hurt, thanks to his foresight and quick action. Our present president, having noticed that real estate owners, being unable to get their loans at the usual rate of 41/2-5% from mortgage companies, a consequence of the higher level of credit, were getting their credits from small country bankers who accepted their bills which were thereupon rediscounted with the central bank, in his last report published a warning, reminding the public that the facility for rediscount only belongs to commercial bills, while real estate long term credit has to apply directly to the money market, stating that further assistance would be refused, thereby readjusting the credit market. You will share our conviction that similar practical action cannot be expected from government officials. In practice the Central Bank President has to look out for two things only, viz. - that only real commercial bills are accepted for rediscount and that the gold pply is always adequate to allow the suden exportation of a relatively big amount, should the trade of his country demand it, without disturbing the home money market. These duties are not very diffi- to fulfill for an insider, but an outsider-and a government official never will be anything else-will always be surprised by a debacle instead of foreseeing and circumventing it. A few words about the big European central banks. In Germany the Reichsbank is a private company, but strongly tied to the Government. A few years ago exchanges went against Germany, the Dutch guilder rate for 100 Marks i.e. falling to the gold importation rate of 58.70. Still no gold came from Berlin, as political danger seemed ahead, so that the Government did not wish to have the Reichsbank part with Thereupon the exchange fell under the gold point, to 58.60 and even At once the whole commercial 58.50. world noticed that German international credit was impaired. In a fortnight the Reichsbank had to give the gold and exits gold. changes rose again, but considerable harm had been done, for every merchant knew from that moment that the full gold value of his bills on Germany could not be relied upon. No bankers are more capable and intelp ligent than the French. The Banque de France is a private institution, governed privately, but also in this case politics are not wholly separated from the government of the bank's affairs. Only a few moI ago the Bank refused gold to its clients, thereby shaking the confidence of the people and encouraging hoarding of money. Exchanges were not low, no ex- portation of gold was imminent, only the political horizon was clouded, war with Germany became a possibility and the Bank wanted to support the Government as much as possible. Who can estimate the losses suffered by the public caused by this policy of restraining confidence? In England the Bank is very independ- ent, but the Board of Governors is not composed of bankers, but of merchants. Very seldom a banker is admitted to that circle. Of course, it is a good thing that merchants are admitted to the board, because they often know more about the con- ditions of the trade and industry than bankers do, so that their advices should always enjoy a full hearing, but the action of the Bank of England is often rightly criticised because its merchant-governors are not sufficiently in touch with the money-market and consequently perceive late often where and when danger is ing to appear. 41,:o In our country conditions are of the best. p The Bankindependent, its president and ate and of the Netherlands is g rnors are selected by the Queen, acting on a proposition from the board of directors. Always an experienced banker has been chosen as President and of the gov- ernors 3 or 4 are bankers and 1 or 2 Any undue request or pressure from the Government would at once merchants. be met by a decisive refusal, and never has the bank shown any objection to part- ing with its gold if the exchanges demanded it. At present the Bank of England and our Bank are the only banks of issue in the world, who freely supply gold if the trade requests it. As you know, these two countries are the only nations who maintain free-trade. We take great pride in our Central Bank, as its organization is much better than those of Germany, France and England. Being a small country, we often escape unnoticed, but new countries cannot do better than study our banking laws and central bank charter and imitate them. We hope that the foregoing makes it clear to you why we prefer private management of a central bank to official gov ernors and that even the private banks mi1lli issue in Europe have been liable to 111F takes whenever the Government's interests were safeguarded above those of the Nation. Though assisting the Government in its task, a bank of issue is and remes a commercial bank and cannot follow too closely the principles of commerce, although making profit not being its principal aim. S S 4,7t-ti-st/ tt ( TRANSLATION: Cannes, Jan. 22, 1927 Dear Mr. Strong: It was most kind of you to remember us in ycur New Year wishes. We hope it will bring you good health and happiness. We were very sorry to miss the pleasure of meeting you again when Dr. Vissering asked us to join his Zuidsrzee party; if you should happen to come to Holland, please let us know. We now live at Ysselvliedt, Wezep (Gla) and should be delighted to see you there. I presume you are also following with interest and a certain anxiety the events in China. They are due to affect us all as does the loss of face at Hankow. Who could have believed a few years ago that British marines and assively when the Union Jack was hauled down ss to understand the attitude of the Chinese g the foreign devils out or will Christianity Dr. Mott (?) told me there had never been ers in China as there was today. ss Stirm (?). Yours very sincerely, -- What does I 2-- Y A". %,$i t er L,t_ dot --17 " c9"-ylt-j ,--z,-,.., d.f 44_,Z, a.,..-1,4, .}7 a_ C e.A., c,a_,; Digitized for oz--,--4FRASER c-ckl-- 1,-... b-eL-rV2- 44 S S .0 E V Lere ,A._; ,-.1-- d-,_,___t_., ( Ayt_ K4 .-J--0 - 9-, -,A, t w.-. -a- 9-, V---J 4I 3k_ A k- 1-, 52- Ar i-C-11C A)--;7 -'4--41 4!" )---+--3 <,- ,- -, - El g ot t ,,y... t: iA 6.. I-- 1,4-rac - a Z-17-1114 ,g_4_7 0/. 4*-44-`1 X . af. /-y-.A.7 4, Cam:., iztrc (37-4.4 4,-, '1- c 4L 47C-e---t/oZ <47- tri-4L 64V.; A-4 42--.-5 . 2 A.-1 1-44(f-,, e-t oc,(e-L c74-4-4, 914-e, Avg,-, 2-kc cl-to 166-; 'mA2 (0. t- A-,c, Stuyvesant Biltmore :crest, Biltmore, :4C., February U, 192V. My dear Count: You are very good indeed to Lna. Tear's wishes. hoe are not intended au ackneeledgment of flow eive you sense cf responsibil- ity as to en acknowledgmenL, but rather more to ma:le cure that you and Countess Otirum ut least once a year are reminded of the visitor who found such great pleasure in ciecting you in Java and who has ever since been grateful for your wonderful hcepitality to him. I wars indeed greatly disappointed to miss seeing you when I ':pas in Holland lent Sumecr. Since then, Dr. Vieweria6 has married and he is now premising to make us a visit in this country, probably next month. Since my return in September, I am Sorry to say that I have had a very desperate illness. I was emiLten with pneumonia almost ime,ediately after arriving, and it almost finished me. Bank in April. I am now here :couperating, and hope to be lack at the But I shall still look forward to a trip to iurope this Sum- mer, and tf you are at home then I may be able to have the pleasure of seeing you again. Your anxiety as to what is developiag in China is no greater than my own. This restlessness which has manifested itself in Africa, in India, in the Near East, and now in China and, for a time, in Java, is certainly a manifestation of some development in the Oriental mind of which we Westerners have only too little comprehension. The idea of a Communist uprising in Java would strike one as almost comic, had it not also these more serious end deplorable aspects. The explanation may be that the dominant races, after hundreds of years of exploitation of &stern peoples, are now paying 2. Count Van Liwburg Stirum. 2/22/2?. fit the penalty for the lack of understanding of the Crientel wind during all of the long poriod when selfish exploitation was tne cowwon rule. Now that that period is past and more genarus ideas prevnil, the Lraditions and the long wamoriee of the Lust snow thewuelves in ;:he outburst, of this latent resentment. It seeLis kb though Kipling were right aster 411: Zon't you pardon this dictated letter, which ie just now all that I UM able to accowpliah. With kindest regards to Countess Stirum and my best withes to your gooduelf, I can Sincerely yours, Count Van Limburg Stirum, o/o Dr. G. Viseering, De Naderlunducha AUSTIADA-1.1.