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FLATPTIS C. DAL-VMS
leres HARRiS T1TJSP 131C711.13XN0

enl WEST MONA4.0E STREET

CHICAGO
September 29. 1925.

0
Mr. Benjamin Strong,
Federal Reserve Bank,

New York City.

My dear Mr. Strong:
The Commercial Club of Chicago expects to hold a
dinner on the 13th of November, and believing that Dr. Schacht

may be

in

the city. at that time they sent him a cable in the

name of Mr.. Melvin A. Traylor, its Secretary, inviting him to

be the guest of and to make

an

address to the Commercial Club

on that date.

At the same time General Dawes wired Dr. Schacht
stating, in effect, that the Commercial'Club was an organization

of representative business men, and in his judgment a suitable
audience through which the business elements of the central west
might be reached; and stating that it would be a personal gratification to him if Dr. Schacht could accept this invitation.

General Dawes has just received a message as follows:
"Many thanks your telegram regarding Commercial Club. Date
of my journey still uncertain. Have arranged with Benjamin
Strong that my arrangements on your side shall pass through
him. Please kindly inform Commercial Club to communicate
with Strong and give my best thanks for invitation.
I am
looking forward with great pleasure to meet you again.
Signed

Schacht".

I am addressing you as President of the Commercial
Club, and I earnestly request you to use your good offices to secure as soon as possible the consent of Dr. Schacht to come to




-2-

Chicago and address us at that time.

You will appreciate how much

of a favor it would be to us also to make the engagement definitely
as early as possible.

We are extremely anxious to have this op-

portunity of entertaining Dr. Schacht, and I do believe that it
would be the best audience he could have in the west.

We will ap-

preciate more than I can tell you your co-operation in this effort.




Yours very truly

Oc-A-Ati

j-

71.

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RU FUS C. DAWES




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R U FU S C. DAWES
11,..ARRIS TRUST BUILDING

CHICAGO




40.

September 30, 1925.

Mr. Benjamin Strong,
New York City.

My dear Mr. Strong:
I have had an opportunity, since the receipt of
the cablegram from Dr. Schacht and the writing of my letter to

you Of yesterday, to discuss the matter with some of the members of the Commercial Club.
The suggestion has been made that it would be most
agreeable if you could come to Chicago with Dr. Schacht, and you,
yourself, address the club on the same evening that he does.
I think I need

not

speak about the membership of

the Commercial Club, or the relation which it sustains to the
city of Chicago and the central West.

I believe you know that

it will be a very good audience, and a good opportunity for the
presentation of ideas.
I do wish to say for the club that it would afford

us all the greatest pleasure

in

the world if you could so ad-

just yoUr engagements so as to come with Dr. Schacht, and to
speak to the Commercial Club on that seine date.

Sincerely yours,

October 2, 1925.

EATACIA0

My dear Mr. Dawes:

I have received your letters of September 29 and September 30

and am sorry not to be able to send you more than a tentative reply it this
time.

Dr. Schacht has advised me that he will be somewhat delayed in

carrying out his plan for visiting me this Fall. :ust how long a delay he
expects I am not yet advised, so it will be necessary for me to defer a reply to any invitations which have been sent to me of a character similar to
that of the Commercial Club of Chicago until I know more definitely about

his plans.

I think I should advise you, however, that his trip must be a
very hurriee one, and the time at his disposal may make it quite impocsible
for him to go to Chicago at all. 'Then I last saw him in London, he had
determined to make no public addresses whilecin this country, and, in view
of that decision, I have advised some of my friends in New York who have
sent him similar invitations that he would not find itpossible to accept
them.

This is all, of course, by way of posting you as to the situation,
because after all Dr. Schacht will decide whether he is able to go to Chicago
and whether he will feel able to make any exception to the decision of which
he advised me when I saw him.

The delay in his sailing, however, will enable me to write him

fully, and I shall do so at once.

With kindest regards, I am
Sincerely yours,

Mr. Rufus C. Dawes,

Harris Trust Building,
Chicago, Illinois.




0

nTJJTT

C. DAWES

1615 ITA_FCRI TRUST BUILDING
ni 17M ST MONI20 SPREET

CHICAD 0
October 7, 1925.

ACkiMiWi,E1)(1e.D
Mr. Benjamin Strong,
New York City.

OCT

9 1925

(4

My dear Mr. Strong:

I appreciate very much your letter of October 2nd
about the invitation of the Commercial Club to Dr. Schacht.
The elements of uncertainty seem discouraging to

a person in my position, who is responsible for a meeting early
in November.

The time of his visit is uncertain, and he may not

be willing to speak at all after be comes.
can well understand his ireluctance in this res-

pect, and of course I realize he must be left free to make this
decision.

When I recall how tactfully he expressed himself under

very embarrassing circumstances in Paris and in Berlin in 1924,

and realize how helpful the right word from him might be at the
present time, I cannot help thinking that he may change his determination expressed in London not to make public addresses in
this country.

In the hope that you may hear from him soon, I shall
refrain from making any other engagements, and shall notify you
when, in my judgment, it becomes necessary. to withdraw
vitation.




the in-

Benjamin Strong-2-

I am sorry that his visit must be so short, for I

know of no one who has earned so fully a respite from his work
and responsibility.




Yours very truly,
itS

RU FUS C. DAWES

ULA 5 1?25

RECEIVED

30VERNOR'S OFFICE




A

October 9, 1925.

My dear VT. Dee:

I have just received your letter of October 7, ent it
seeme to me I have done all I could do in radard to your desire to
have Dr. Schacht at end the Commercial Club Dinner.

Be at first advised me that he would be here on the
19th, then that he rould be delayed. 2 or 3 weeks, and the day I wrote

you he cabled me that he would be here on the 19th after all.
Yhile he had thought of going to Chicago the last time I
sew him, iem under the impreesion thst he has now abandoned that plan,

but he failed to edviee me.

He h.o now &ailed, and I ehall probably

have no more particulars as to his plane until he errives here.

He has replied to all invitations, hoeever, that his visit
is a private one, and that he feels constrained to make no public addresses.

I am sorry not to be able to eend a more eatiefactory reply.
Very truly yours,

i)
Rufus C. Dswee, Esq.,

1815 Harris Truet Building,

Chicego, Ill.




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Hotel Ritz,
July 30, 1919.
Dear Sir:

Your note was handed to Mr. Strong just as he was going out for
dinner.

He regrets very much that a prior engagement will not permit

him to accept your invitation to luncheon tomorrow, but wishes me to

express to you hib sincere appreciation of your courtesy.
Very truly yours,

Secretary.

John R. MacArthur, Esq.,
City.







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April 3, 1919.
Dear Jack;

Your note of the 2Tth ultimo just reaches me, and I think I can

answer it satisfactorily.

We only expect to have one meeting of State

Chairmen,

unless something very unexpected develops, and that may tot take place until
next summer or fall.

Our thought was to hold such a meeting at some central

point, like Chicago,

for the purpose of discussion and exchange of views and to

make perfectly

be carried out.

clear to everyone just

what is in mind, and how the

program should

Seyond that the 2tute Chairmen would have great local autonomy

in all matters of organization, and the material relating to propaganda, educational

work, etc., would largely be furnished by the organization

in New York

or Washington.

have already telephoned John Pratt.

he understands the situation

-

and urges me most strongly to secure your acceptance, which I hereby do with
my own indorsement.

2aithfully yours,

Chairman, Southern Jalifornia Wison Jompany,
Los Angeles, California.

B3/1.16:13




April 11, 1919.
Dear Jaolt;

was greatly disappointed to receive your telegram
about the budget appointment, but thoroughly understand how you

feel.

,The suggestion of All Jrocker is a good one.

71e have

also had Requa, fuel Administrator, suggested by some one, and

I would appreciate an expression of your views in regard to
him.

You will hear from Pratt in response to the inquiries
contained in your telegram.

We will miss you, but that can hardly be avoided,
suppose.

faithfully yours,

John B. Miller, 1..f.sq.,
3outhern California lidison Company,




Los Angeles, California.




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COPY
WILLIAM C. REDFIELD
165 BROADWAY

NEW YORK

May 25, 1926.

Mr. Benjamin Strong, Governor,
Federal Reserve Bank of New York,
33 Liberty Street,
New. York,'N. Y.

My dear Er. Strong:
The within I assume to be a circular letter but it occurs
to me that it may be helpful to you if a response is sent.

I shall,

8

therefore, be glad to receive any suggestion h you may care to have

made looking toward a possible reply to Honorable James G. Strang.




Yours very truly,

(Signed.) William C. Redfield.

FEDERAL RESERVE BANK

COPY
OF NEW YURI(

June 8, 1926.

My dear Mr. Redfield:
In Governor Strong's absence abroad, I want to thank you for your very

kind letter of May 25 concerning Congressman Strong's circular letter to you on
the subject of price stabilization.

As you may perhaps have heard, Governor Strong appeared before the
Rouse Banking and Currency Committee, to testify concerning Congressman Strong's
original bill.

I have delayed replying to your letter hoping that it might be

possible to send you some sort of extract of his testimony, but, unfortunately,
none is yet available.

You may be interested, however, in the summary of his

discussion on this subject, which a-ppears in tile June Bulletin issued by the

National City Bank, a marked copy of which I am taking the liberty of enclosing.
This may give you what information you want, upon which to base a reply to the
Congressman's letter, although the proposal contained in that letter is very

much more detailed and far-reaching than the original bill which Governor Strong
had before him at the time he gave his testimony.
Very truly yours,

GEORGE L. HARRISON,
Deputy Governor.
142.. Wm. C. Redfield,

165 Broadway,
New York City.

GLH.UM




0 2Y

WILLIAM O. REDFIELD
165 BROADWAY
NEW YORK

Jude 10, 1926.

At. George L. Harrison, Deputy ,d-overnor,

!ederal Reserve Bank of New York,
33 Liberty Street,
New York, N. Y.
My dear MI'. Harrison:

Thanks for your note of the 8th with its enclosure.

I

wonder what you will think of the letter sent Congressman Strong




today, as per enclosed copy.
Yours very truly,

(Signed) William C. Redfield.

June 10, 1926.

Hon. James G. Strong,
House of Representatives,
Washington, D. C.
hy dear Sir:

I have been obliged, partly through absence, to delay my response to
your favor of May 21st asking my consideration of and frank ,omments on the
suggestions made respecting the granting of added powers to the Federal Reserve
I
System and the consequent devolvement upon them of added responsibilities.
have in mind particularly the suggestion i perhaps i may say the purpose, to
direct the Federal Reserve Board to use its powers for what may be called the
stabilizing of prices.
I note the qualification that this stabilizing, though it is declared
to be "the primary function", is limited, or rather is supposed to be limited
by the phraseology "so far as may be possible consistent with sound economic
Pointing out that not only thoughtful men but many men who volprinciples".
ubly claim to be thoughtful differ as to what sound economic principles are,
I venture to add that the general suggestion seems to me to impose upon the
Federal Reserve System a duty which, upon the one hand, it will be quite tm,possible for them, or anybody like them, either adequately or permanently to
perform, and one which, being imposed and being impossible of performance, is
certain to bring upon them the denunciation of those who assume that imposition
I think, therefore, the passage
means the power to carry out the duty imposed.
of the Act as proposed would place the Federal Reserve System in a very dangerous position, would involve it in hazards that should never be permitted.

If it be assumed that the rigid stabilization of the dollar is in every
respect permanently desirable, about which there is some possible question, I
still think the measure omits from consideration the major forces which act in
the premises. No country lives to itself, not even as respects its currency
The great economic forces which affect values are world-wide. Their
values.
power is such that when they are once in action no single nation is able to
if it were feasible to
avoid yielding in some measure to their influence.
unite the productive powers of all mankind to the regulative powers of all nations
acting in permanent harmony, then and not till then would it be possible ever'
for any one nation to insure its currency from rise and fall in obedience to
economic forces too powerful for the greatest country to resist.
I am, Sir,

Yours very truly,

(Signed)

Copy sent Yr. Harrison.




William C. Redfield.

M.1EFRVt BANK'

OPY

June 11, 1926.

2FRSOnt.

Dear 'fr. Redfield:

I want to thenk you for your very kind note of June 10 sending me a
cer- of your letter to Congreeeman Strong on the subject of his proposal rela-

tive to the etabilizetioa of tie price level.
Your letter eeeae to me a muet aappy uziacoaiae expoeition of the

rieks which are iavolved in the ?rent propoaaI. While ia sympathy with tha
aucral purpese which *e believe Congresesan Strone his in mind, nevertheleee

7a cennot but fear, ea you do, th-t through mieundereeaudiag or ignorance, the

-eeendoeot in its preeent form might be eonetreed as a legislative mandate to

the Federal Recerve System to maintain a stable price level without regard to

the feet thet fluctuations in the price level very frequently may result from
the eperetion of economic laie or other factors entirely beyond the influence
or control of the Federal reserve banks.
It may xell be thet Oengrees could formulate some language that would

indicate its iatereet in the stability of prices as well as its desire to have
the Federel Seeerve management keep price Stability in mind in the exercise of

the 9yetem's functions In relation to the volume endeost of credit as distinguished frem the many other factors upon which the 'rice level depends.

But

T do not believe that the propoesle which have been eubmitted would accomplish

this purpoee rithout at the seme time imposing upon the Byte m some measure of

public reeponsibility for all the fluctuatione Cast occur, whatever the cause.
You have very clearly pictured the hazards which thie might involve.




June 11, lien.

I want again to thank you for sending me zi copy of your most interestin and helpful letter.
Very truly yours,

GEORGE L. HARRISON,

Deputy Governor.

Mr. William C. Redfield,
165 BroLdway,

Nes York City.
GLH.MM







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AMERICAN TELEPHONE AND TELEGRAPH COMPANY
TELEPHONE AND TELEGRAPH BUILDING

195 BROADWAY
W. S. GIFFORD

NEW YORK

VICE PRESIDENT

M. C. RORTY

November 8, 1922.

ASSISTANT VICE PRESIDENT

CR1:

-'

71/ elm °.

riga.

Mr. Carl Snyder,
Federal Reserve Bank,
New York City.

tar

gi4-t

4.tt-'-f%; 014-/1,11;;I

Dear Snyder:-

I,have just been rending over your memorandum on foreign
debts, and have practically no comments.

I assume that, while you

say "commandeer exports", you really mean that such exports would
have to be purchased out of the proceeds of taxation.

.

If so, the

deficits due to price differences wosuld not have to be separately
met.

The same thing would be true if the commandeering took the

form of taxation in kind.

If, on the other hand, your thought is that there will be
no actual commandeering or taxation in kind, but simply the establishment by the government of export prices low enough to force
the development of foreign trade, it

would probably, as you indicate,

be necessary to cover the differences between
prices by taxation.

domestic

and export

The credits resulting from these exports

would,

however, be private and not governmental credits, and the government

would have to reacquire such

credits)presumably

by

taxation7for

reparations our

In spite of the above comments, I think that your suggestion is a thoroughly good theoretical answer, from which it is not



2

C)

impossible to derive a practical answer to the arguments ordinarily
set up to prove Germany's inability to pay.
As to the second part of your memorandum, I should be inclined not to bring into the argument the percentage or the national
income that represents annual savings. A large part of such savings
is necessary for continued industrial activity, and cannot be
looked upon as a surplus. The real point, as I see it, is the
capacity of a nation to expand its production above normal when
working under forced draft. As to this factor, we have much evidence
that any industrial nation can readily add 10 or even 15% to its
normal production. However, as you indirectly indicate, the final
and controlling problem is that of raising taxes. As to this, I
believe with you that 5% of the national income is a thoroughly
practicable figure.
As to the third part of your argument, I should criticize
your statement that an impost on Germany of two billion gold marks
per annum would seriously affect her industrial growth. As I see it,
the sad thing from thestandpoint of France and the Allies generally
will be that no such amounts could be collected from Germany without
stimulating on her part a very high degree of industrial activity.
and of industrial progress. As Bismarck said, after the FrancoPrussian war, "The next time we defeat France, we shall pay the
indemnity".




Sincerely yours,

RITZ CARLTON HOTELS ORGANISATION
LONDON-PARIS-NEW YORK
GENERAL MANAGER-PIERRE GAVUZZI
TELEPHONE 3060 AVENIDA
TEL

ADDREssPLAZOTEL-

September 26th. 1923.
Dear Mr. Strong:

Before leaving New York for a long
country I. had. practically completed_ arrangements,
through the National Bureau of Economic Research,
of which I am President, for the establishment of a
novel institution to be known as "The Economic Founda-

trip through this very interesting South American

tion".

The pleasure of my present trip has
been somewhat marred by the feeling that, in absenting myself from the United States, I have neglected
a duty to this new organization - and. I am, therefore, trying to discharge a portion of this duty at
long range by asking you to look over the papers
which will be sent to you in a few days describing
the plan and purposes off the Foundation.

I an quite certain that you will

not regret a few minutes spent in examining a unique
and. thoroughly constructive proposal for the upbuilding of a safer, saner and more thoughtfully
progressive United States.
Yours very truly,

Mr. Benjamin Strong,
Federal Reserve Bank.

Equitable Building,
NEW YORX CITY.




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