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February 13, 1914.

AA B. Whore, 3sq., Chairman,
Wo. 63 Cedar Street,
Nov TOW, W. Y.

Dear Sir:raving received -)art 1 of counsels* Draft of the Proposed Revision
of the Banking Law on Wednesday, there Imo not time forme to read carefully the

entire Merl so

will omit Articles 4 and 6 relating respectively to private bankers
and saving' bunks, and I now respoctfnily submit the following suggestions in regard to

the other motions of the report.

Page 8.
The definition of aggregate demand deposits would exclude from deduction balanaes carried in foreign banks or bills held by foreign banks for account of
New York State institutions under arrangements which enable the New York inatitutions

to draw Elainst such bills without mall advice. Balances in foreign banks and bills
thiab are subject to immediate discount are in some respects a more important and

available form of reserve than are balances in banks in this country, the value of
such balances and bills being the ability in time of need to convert them into gold for
import.
I believe, therefore, that arsante due on foreip exchange, foreign balance's
and foreign bills Which are nubjeat to check by New York City institutions, should be
allowed as a deduction from gross deposits In computing aggregate demand deposit°, and
in order to a000mplish this I suggest the following addition to the language of the
first paragraph on Page 6 - "All balances with foreign banks, including time bills of
exchange or moneys on special deposit Where the arrangements with the foreign banks
enable demand drafts to be drawn against them" The enclosed *my of a letter ad&reseed to the State Bank Naomi:nor of this district explains in came detail the object
of the change suggested above.
Page 16. The paragraph at the top of the page provides for an annual pension
to retired employees of the banking department.
As I read the Bill this will be
charged against banks and is not payable by the State Treasury. The question oesura to
no as to Whether it is desirable that any employee of the State should be retired on a
-melon the cost of whieh is assessed asinet any one class of corporations.
*
Peg, 26.

The word "given" in the eleventh line is misspelled.

Pew 27. 7,713 provision eontemplated for licensing foreign corporations to do

business in Via state, =Neat to the supervision of the Department, makes no reference
to the terms upon which such license may be iesued. Instanoes may twice Whore other




A. B. Repburn, Esq. Chairman.

-p

Peb. 13, 1914.

states moy impose burdens and reatrictione upon New York institutions that deoire to open

offices for Ur transaction of business within th000 etatee. This nAy be particularly
true of foreign countries and ao we are entering upon a new develowent of our banking

busineoe %Mich may load to a considerable extension of our banking machinery into foreign

countries, it maws to me that it may be wise to erevide by this Act that sudh licenses
Shall be issued to the corporations of other States and countries with equal privileges

and upon like terms 910 oorporetions of this State.

Page 29. Should the above suggestion be considered, paragraph 29 might be

enlarged so thet the Superintendent will be authorised to eithdrav such licenses should
adveese legislation by her States or foreign eountries impose burdens upon New Yolk
State institutions which we do not impose upon the institutions of those States or
eountries.
Page 29. I suggeot the use of the 'word "deficienoys in place of "eneroaehment"
in sub-paragraphs At Be 0 and D of pnraeraph 30*
Peep 31. There are a number or priorities now ootabliohed In this State
by law. Paragraph 32 on page 00 makes no refewence to other priorities mob as the

deposits of savings banke, trust funds, etc* tlignt it not be well to /lake clear that
all deposits entitled to legal priority rank equally as between different classes
ouch priorities?
Pane 34. Paragraph 37 - the words "If such oorporstion or banker" in the
middle of this paragraeh to not quite clear to me. Io there not some word omitted?
Page 36. Revs you connidered that the effect of this paragon* will be to
restrict the larger trust companies in New 'fork City, and spa:lineally the Guaranty and
the Bankers, to diotributing their reserve deposits among two or three inotitutions?
At the present time the Bankers 7rust Companyhee on deposit with Ito various depesiterleo
390500,000. ofwhioh 42.000,000. Is principally in foreign banks. If we are permitted
to carry our reserve deposits only with the banks which comply with the provisions of
this parten'arele we would be obliged to divide ::27,000,000. between the National City
Sank, the National Bank of Conferee and tho First National Bank. Those three institutions alone have vent:dent oapital to qualify them as a reserve depositary (Or
the Guaranty Trust Company and the Bankers Trust Company.

After the rederal Act bosoms operative the amount of cash reserves
held in vault by member banks will be nO materially reduced that we night thereafter be
restricted fro o earning our reserve accounts with one or more of the inotitutions named.
This be an exceedingly important provision of the Law and I cannot help but feel that
it would be a serious mistake to have it adopted in its preeent form.
Page 36* In the sixteenth line - 'Should not the word "Its" be "theirs. In
*his Gams peragrank, I emegeet thrt the Committee consider Whether it miht not be vise
to provide that such institutions shall be subject to no other examinations than these
of the Barking Department.

Page 39. rourth line from the top - is it vise to serve notice upon a clerk
in the employ of a bank or banker?
Page 39. 'earagranis 43, oontemplates publishing :separately a report of con..



A. Belrepburn, Esq. Ohairean.

-3.

Pete 13, 1914.

dition of each beak, trust eameany or private or individual beaker in Albeny, although
the word "eery" is used which would indloate that it is a fors similar to the one
published in pamphlet form by the Department. If it is a summary that is oontemplated,
ehtould this sentence not reed "within thirty days after the receipt of quarterly
reports of banks, trust compenies, private et individual hmikers, the Superintendolt.
eto."
Page 40. The leet eentence Of peregraph 469 createe another priority which
like comment to the ebove applies.
?AO 47. .Perggreph 569 sovonth line - the word "by" le omitted after the
word "lioensedt.
Peep 50. Sule-poregraith 0, the number tf the oection to which reference is
made to omitted.

'age 50. eeneranh 59, I megest a slight one in tile lenguage ao that

it will road as followed "never the Superintendent is entitled to take possession
of any such oorporation for Ley remon aet forth In Election 57".

eage 57. earegraph 70, the same remarks regarding priorities apply to this
pereel'aPh*

Page 58. In second nonteree I suegest that the word "leases" be included
so that the Su.porinterelent may lease real estate eending Bele.

eage 60. I al;gest the followine change of lengeage commencine eighth

lire

free bottom of page - "but accepted (slain shell be presented to the Suprmxo Court

eureuent to section 78 of this Article for determinetion es to their priority of

pent.

eage 61. Second raragraph, the eixteinths time :within ehiCh action etty be
ooenenced egainst the Saperintondent, impresees no as being too thort. 1 ouggest a
year.
roe. 73. The word "specie, fourth line from bottom might exclude other
lawful money. Sheuld this not reed "specie and lewful money" or meld not the eords
lawful money include specie end all forms of reserve money?

eaeo 71. SUb..paraertaril 5, Mild it not be admirable for the Superintendent
Many Of the mo-

to reoommend cemmeteents covering the bedeting lteand the Penal Code?

lded*, of the eenel Code apply neecifloally to the benting corporatiotse.
Page 76. Subeperegrall 80 there seems to be no limit mentioned as to the
maxinglinmeber of direction auteoriced for a State bank alteough in the Trust Company
seotieft the diractore aro limited in number to 30.

we 78. The word "corporation" in the first line is misspelled.
''age 89. Sub-paragraph 2 of paregreph 109, eompole the emortieetion of
investments b a fixed rule from which I cannot find that the Superintendent of Terke
has any authority to Oepart by rallev or stherwise. This impresaes me as being a very



Pob. 13, 1914.

e B. Repburn, Req. Chairman.

dangerous practice end one which would seriously interfere with institutions which
hello bond depertnente and which must be ?omitted a certain degree of latitude in the
wore of marrying their investments on their becks. It would re uired two soto of
books end a Large amount of extra work and sane confusion. eerthermors, it seems to
oonflict with the rules as new developed by the Treasury Department under the Federal
Iowa, Tax low, It might, in fact, reeuire the writing down sf necurities purehened at
prealemeweich had actually increased in market value. The amortisation is made applicable also to stoeks which have no maturity date, and the rule of amortisation
provided in this paragrephmuld not apply to any security which did not/I:eve a fixed
date of payment. Furthermore, many securities have more than one dete of payment or
optional det.::s of payment, et'. Thin paragraeh, as I read it, would net permit a
conservatively menaeed institution to figure its undivided profits upon the basis st
This may be remedied If the lommittee so desires
the actual value of its assets.

by two methods:

One - by, giving the Sueerintendent of Peeks authority by regulation to
permit amortization cmd the other by the addition of the words luarket value or their"
beteeen the words "their " and "present" in the seventh line of the second sub-eeraereph.
The latter ouggention I believe Is preferable, Lnd I earnestly recomeend that further
(molder:lion be given to this matter before the Report is submitted in thie form.

ego 91. SO-paragraph B - the Iest three lines seem to contain a retroactive provision. / have not naked for a leeel ()Union upon this eoiet but sueCeet
that there may be objection to this language on the aonstitutional grounds.

-nge 92. Paraeraph 112, banks in New .:oek City which become members of tle
Pedoeal 1100erve votom would Boom to be repaired to maintain eneh reserves In their
vaults of 12%, but under the Federal Reeerve Act they weld be obliged In addition to
carry a deposit swerve with the Federal Reserve Beek of 7%, so that State baits becoming
members of' the Federal Reueree eystem would carry 1% greater reserve than are required
Of national banks. This is not an important matter, of course, but to Obtain line
exact equality between State national beaks would require a slight Purther modification

of this paraeraph. I have already °Omitted a memorialize on the subject ed reserves
which I will not repeat here.

eage 93. The last two lines of the first pnraereph - "or eny other form
of currency authorised by the laws of the United !Antoci" would seen to incluee Federal
Reserve notes. I have already submitted a memorandum in respect of this feature of the
law to uhich I would like once more to refer. This well form the baelsoed a most
Insidious one, for inflation in my opinion, and I
permit Or encourage a toneenoy ln-uuis direction. would regret to Or, our State Law
Page 106. Perggranh 1284 provides

statement
the collateral to loans as of the date of thefor the submission of ainstitutiondesaribing
meeting. In a lures
almost a physical ippoesibility if such record is to be reels a perm/lent record this is
ad'
contemplated by the etatute.

I hope the Oommittee

this so that the record of collateral can be that ofwill BOO the wisdom of the
the clone of business modifying
second
previous to the day of the meeting, allowing ono business der In which to prepare
_e report°.

Page 107. Paragraph 129 containe a provision the wisdom or Allah I believe le




A. B. Hepburn, Esq. Chairman

-5-

Feb. 13, 1914.

undoubted. It does, however, make it the duty of the Examining Committee to detain
hnowledge or information about matters which may not be disclosed at all by the
:;ompany's records, and I have some doubt as to whether it is safe to place such a
Would the
responsibility upon a Committee under the language of this paragraph.
object to be acoonplished not be made just as certain by requiring the directors to
make special inquiry as to loans or collateral there the records of the Company dieAnd then, make it the duty of
closed that the officers or directors had interests?
-

the

officers or directors of a trust caapany who apply for a loan or receive a

loan, to disclose his interest in ease it is one which would affect the judgment of the
officers of the Company in making the loan.
Page 106. A somewhat similar comment would apply to the first complete
aaragraph on this page. How may the officers 9r directors of a bank or trust company
now anything about the atm& ownership of directors or officers unless it is voluntarily
disclosed in most cases. The use of th14., word "known" in the fourth line possibly
meets the criticism.
Page 109. Paragraph 132, the reports to the Superintendent in their
complete form contain many long schedules which it has not been necessary to publish,
and waioh it is, undoubtedly, not the intention of the Committee to require. If my

surmise is correct, should not the words" a summary of"be inserted before the word
"everal an the third line from the bottom.
Page 113. The number of the section is omitted,

top.

second line from the

Page 113. Paragraph 136, might not the provision at the foot of this page
be in conflict with the statute of limitations as to certain causes of action?
.

Page 116. Last paragraph, this proviiion of the law has been discussed
by a Committee of the Trust Companies Association of this State, Of which I am a
member, and we learn that strong objection has been made to a general prohibition
of loans to officers by the trust companies and banks in the smaller cities and
towns. The majority who have considered the matter feel that it was a mistake to
permit loans by banks and trust companies to their own officers and I share that view.
It is particularly objectionable in the smaller institutions where credits are more
likely to be extended upon the authority of one officer who is the one directly
affected by the transaction. I therefore wish to submit to the Committee the persoaal
view whioh I hold that the law should prohibit loans by banking institutions to
salaried officers of the institution but that it should permit loans to directors
In this I;ame
who are not salaried officers upon the approval of the directors.
ownership or control of a majority of the stock
paragraph, reference is made to the
of another corporation, and this is information it is difficult to obtain' and would

aot be disclosed in many transactions =leen the burden of disclosing it were placed
The word "control" is indefinite and broallyeenstrued g might

upon the borrower.

apply to a moral dottrel rather than to a money control, and leaves this whole watter

open to wide

and various interpretation which I cannot help but feel is unwise.

Page 120. I suggest the addition of sub-paragraph "E" - to provide any such
language as tie commission may deem wise that licenses to foreign banking corporations



tl 3. Renburn, Seq. Chairman.

rob. 13, 1914.'

be eztentea idlere similar licenses upon equal terms are =tended to New York

inetitutiene.

Page 120 The last paragraph of noetion 143, would restrict banking
inotitutionsfrom rtaitinc-- time loans for oorreepondents and from making any loans far
corporations who were not engaged in the husinees of banking. 1 presume this has
boon oarefully coneldered by the Oommiseion. This is the kind of proVision which

is liable to be violated or avoided by subterfage, and I doubt if the prtctice of
making loane for menufteturing, commoroial or transportation commies, would be

controlled by this provision, and an the whole I am not mere thet it is vie..
Page 120. The first line Of paragraph 144, refers to the "applicant".
Should this not describe more particularly the foreign corporations or else refer
to the previous paragraph?

Page 122, The right of emaranation vested in be Suporinteneent of Barks, as
oleeWhere described in the law, °Notifies that he shall examine Personally or by his
deputies or examinere4 Shoull thin not bo the language employed in this loemgraph?
Page 166. Sub-paragraph 8; similar comments in respoot of loans to officers
and direction apply as above to this paragraph and the sieilar cement in regard to
the majority of the stook or the interest of officers and employees in a corporation
boermAingeomey.

Page 166. Paragraph 192; I presume the Commission's attention has been
drawn to the feet that the Federal ROOM! Act will undoubtedly result in a withdrawal of the deposit of Postal aevings funds from all depositaries whioh do not
become membore of the Federal Reserve Syetem. There is nothing, hemmer, In the
New York State law to prevent Sevings Batiks in this State from depositing their funds

with national banks that become members of the Pedorel Remove System,

Page 167. Sub-paragraph 2 of paragraph 194; the remarks mods above in
regard to amortisation apply equally to this pemeginhh.

Page 168.*Subeparagraph 4; the last eentence contains a misprint. Should
it net read "any trust company which refuses, etc."?
loge 170. Sub-paragraph one; Trust aompanies in the City of row York whidh
become members of the Poderal Reserve System wadi be required to keep Woe& in
vault and 7%) with the redoeal Reserve Ba4ke plus 1% 'ehicoh would be optional. This
would be °lightly different Pran that required of trust oompanion vihich do not become
!Nabors of the roderal Renerve Syutem.

Pace 173.eelmilar remarks in regard to the use of Vederal Reserve notes, Old

we carves apply to snas paragraph.

Pace 182. earagramh 20St 1 meld otrongly reeommend the minimue number of

eirectore for a trust carepaay be reduced.- In feet I can Gee no reason Why the mlnimen
ohould not be five an revived for otate banks.

Togo 186. Similar remarks in regard to the record of collateral to be submitted
to a meeting of the Board, apply to this paragraph.



A. B. Rborn, Req. Chalrman.
Pogo 190. ninotoenth
added before the wore "every"?

-7-

Fob. IS* 1914.

- should not the words "a summary of" be

rage 193. 11sot paragraph - similar mare* in regard to loano to officers and
dirootore apply hero.
Page 194. PeragraTik 233

in this paragraph as Amohore in the Law, it

seem* to NO that the terms upon Shift foreign corporations may open offices In this

state &build be substantially equal to inotitutions in this tate desiring to open
offices in other 3tatos or foreign °gantries.

Part 1 of tot^ :lorvimittoe'S report does not include that portion of the

Reeking low apPlying tO the merger of trust companies. There are a mimeo of

Jorortant modifications of the law in that particular respect Which should be con'sidered* and I trust to have opportunity to read What it rososod by the Commission.
In ccnoluelon* permit me to exproos my very strong admiration of
the chareter of wort that ha n boon done by the commissioo A revision of tbn whole

banking Law has long boon neOesoary and only by mach perlonal sacrifice of time by

busy 'men could it have boon accomplished, and I feel that every institution in the
State is under a great obligation to those gentlemn who have boon willing to undertake

the office.

Yours wiry truly*
81.4

Referring a;ain to paragraph 192, Page 166 -thr 1)fto-se& Wtthlrawal of Posta
Savings deresits from State institutions which do not become members of the Federal
Reserve system is simply a mans of coercion applied by the Federal Act. mmv institutions have qualified by purchasing large amounts of bonds and will find it
possible to become member banks until 3tnte laws are modified. It seems as though
this might be the opportunity by amendments to the State law to bring a little pressure
upon our Washington frionde to withhold a radical treatment of State institutions Which
teL have Postal Savings fund accounts.




i2":111* (EtTarte National -Cant;

New

A.Barlon Hepburn.
CHAIRMAN OF THY. 140-AltI).




August 5th, 1914

Benjamin Strong, Jr., Esq.,

c/o Bankers Trust Company,
14.7;a11 Street,
I. ew York City.

dear Ben:

enclose two telegrams from Johr Litchell.
1 have wired him that I

legislation

was

did not think any

j/&)

additional

,ecessary, but he thinks it

Trust Companies to score, and I
him I would put the matter up to you.
time for the

Very truly yours,

a good
told




COPY

Aug. 5th,

A. B. Hepburn,
CHASE

We have been in telephonic communication with Secretary
7e asked if the limit could not be
McAdoo this AM.
taken off of nmount Vreeland currency Banks could take
out subject to Secretary's consent so as to enable
Trust Companies and State Banks whose deposits are
greater than the Lational Bank; the Banks to get
currency through the National Banks. He an
rest assured if the occasion demands the limit will
Better follow it up
This is important.
be removed.
in hew York through Trust Companies.
J.

J. Mitch

AUG 2 1 1914
COPY

COPY

Aug. 5th,

c.

A. B. hepburn
CHASE

how does the general financial situatioh look to'yola
I was in hopes Congress would not make
this morning?
a limitation to Aldrich-Vreeland currency leaving the
amount discretionary with secretary of the Treasury,
in doing this it -\.rould enable Trust Companies and
State banks to get what they needed through their
Do you think this could be put up
national banks.
I think
to McAdoo by the hew York Trust Companies.
it most important.




J.

COPY

J. Mitchell.




iO Li"

/
/ L)

(:-Ottrti
f--

(441.4

joitir44447.

r

GOLD FUND COMMITTEE
NEW YORK CLEARING HOUSE BUILDING
ALBERT H. WIGGIN, CHAIRMAN.
WILLIAM WOODWARD.
JAMES S. ALEXANDER.

77 CEDAR STREET

',NCIS L. MINE.
Be.,.JAMIN STRONG, JR.
FRANK A. VANDERLIP.
JAMES N. WALLACE.

NEW YORK, November 13, 1914.

W. P. HOLLY.




SECRETARY.

Benjamin Strong, Jr., sq.,
cjo Federal ReserXe Bank,
62 Cedar treet,
Hew York City.
Dear Sir:

At the call of the

Committee will be held to-day
P. M. at the New York

hairmln,a meeting of the Gold Fund
Friday, November 13, 1914, at 3:30

Clearing Fouso.
Yours

ery truly,
,

Secretary.

GOLD FUND COMMITTEE
NEW YORK CLEARING HOUSE BUILDING
ALBERT H. WIGGIN, CHAIRMAN.
WILLIAM WOODWARD.
J " MES S. ALEXANDER.
I

77 CEDAR STREET

NCIS L. HINE.

BLNJAMIN STRONG, JR.
FRANK A. VANDERLIP.
JAMES N. WALLACE.

NEW YORK, November 16, 1914.

W. P. HOLLY,




SECRETARY.

Benjamin Strong, Jr., Esq.,
c/o Federal Reserve Bark,
62 Cedar Street,
New York City.
Dear Sir:

At the call of the Chairman, a meeting of the Gold "And Committee will be held to-day, Llonday, November 16, 1914, r):i-3:30-r. ft.
at the New York Clearing house.
Yours very truly,

Secretary.

r2;,,

Q

GOLD FUND COMMITTEE
NEW YORK CLEARING HOUSE BUILDING

ALBERT H. WIGGIN, CHAIRMAN.
WILLIAM WOODWARD.
'
1ES S. ALEXANDER.

77 CEDAR STREET

,,,ANCIS L. HINE.
BENJAMIN STRONG. JR
FRANK A. VANDERLIP.
JAMES N. WALLACE.

NEW YORK, November 17th, 1914.

W. P. HOLLY.




SECRETARY.

Benjamin Strong, Jr., Esq.,
c/o Federal Reserve Bank,
62 Cedar Street,
New York City
Dear Sir:

At the call of the Chairman a meeting of
will be held at the New York
Clearing Souse at 3:30 P.M., Wednesday, November 18th,
the

Goa4 WW;w9444A

1914.

Yours very truly,

Secretary.

GOLD FUND COMMITTEE
NEW YORK CLEARING HOUSE BUILDING
ALBERT H. WIGGIN, CHAIRMAN.
WILLIAM WOODWARD.
JAMES S. ALEXANDER.

77 CEDAR STREET

\NCIS L. HINE.
BENJAMIN STRONG, JR.
FRANK A. VAN DERLIP.
JAMES N. WALLACE.

NEW YORK, November 24, 1314.

W P. HOLLY,




SECRETARY.

Benjamin Strong, Jr. ,Esq.,
c/o Federal Reserve Bank,
52 Cedar Street,
'

New York City":

Dear Sir:

At the call of the Cha94ian, a meeting of the Gold Fund
Committee will be held at the c ice of the Chase National Bank,
83 Cedar Street, to-day, Tuesdr, November 24, 1914, at 3:00 P. M.
',burs very truly,

Secretary.

COTTON LOAN FUND
CENTRAL COMMITTEE.
W. G. McADOO. CHAIRMAN. WASHINGTON, D C.
J. S. WILLIAMS. WASHINGTON. D. C.
CHARLES S. HAMLIN. WASHINGTON, D. C.
NUL M. WARBURG, WASHINGTON. D. C.
A. DELANO. WASHINGTON, D. C.
W. P. G. HARDING, WASHINGTON, D. C.
A. C. MILLER. WASHINGTON, D. C.




NEW YORK CLEARING HOUSE

COTTON LOAN COMMITTEE.

77 CEDAR STREET

W. P. G. HARDING, CHAIRMAN. WASHINGTON
PAUL M. WARBURG, WASHINGTON. D. C.
ALBERT H. WIGGIN, NEW YORK N. Y.
JAMES S. ALEXANDER, NEW YORK. N. Y.
JAMES B. FORGAN, CHICAGO. ILL,
FESTUS J. WADE, ST. LOUIS, MO.
LEVI L. RUE, PHILADELPHIA. PA.
WILLIAM A. GASTON, BOSTON., MASS.

W. P. HOLLY,
SECRETARY.

NEW YORK,

November 24, 1914.

Benjamin Strong, Jr., Esq.,
/o Federal Reserve Bank
52 Cedar Street,

New York City.
Dear Sir:

Please find enclosed copy of minutes of meeting of
Cotton Loan Committee held at the Federal Reserve Bank on
November 20th, 1914.
You will receive, under separate cover, a loose-leaf
Please be good enough to
portfolio marked with your name.
Minutes of the various meetings of the
advise its receipt.
Committee, prepared for insertion in this portfolio, will be
forwarded to you from time to time.
Yours very truly,

Secretary.

C

It is proposed to create a fund of approximately $133,333,000.
to be divided into subscrintions of two classes:
Class "Ar subscr
extent of $100,000,000, to consist of banks, firms, corporations or individuals
located in states other than cotton producing states, and Class "B" subscribers
to the extent of approximately $33,333,000. to consist of banks and bankers located in the cotton producing states of Alabama, Arkansas, Florida, Georgia,
Louisiana, Mississippi, North Carolina, Oklahoma, South Carolina, Texas and,
Tennessee,
Class "Ar subscribers shall receive a participation certificate
for monies paid into the fund entitling such subscriber to share in the distribution of the proceeds of such fund; the certificate to be a first lien on all
monies or assets of the fund including the monies received from the Guarantee
Fund hereinafter provided, and to be retired in full before any of the Class "B"
certificates shall be retired.
Class "B" subscribers shall consist of those who forward applications for loans and are prepared to provide 25% of the amount of such loans and
shall receive a participation certificate entitling them to share in the distribution of funds and assets of the Fund after the claims of Class "Ar subscribers
have been paid and satisfied.
All certificates shall bear interest at the rate of six per cent
per annum, payable quarterly.

The Fund shall be administered under the direction of a committee
to be known as the Central Committee which shall be composed of the members of the
Federal Reserve Board. The Central Committee shall appoint a sub-committee for
the general administration Of the Fund, to be known as the Administration Committee,
to consist of the following:
W. P. G. Harding, Chairman, Washington, D. C.
Paul M. Warburg, Washington, D, C.
Col. E. M, House, Austin, Texas.
R. H. Stewart, Dallas, Texas,
Henry Walters, Wilmington, N. C.
Albert H. Viggin, New York
James S. Alexander, New York,
James B. Forgan, Chicago,
Foetus J. Wade, St, Louis, Mo.
Levi L. Rue, Philadelphia, Pa,
a, A. Gaston, Bostoni Mass.
Gunby Jordan, Columbus, Ga.
The Administration Committee shall appoint committees froniaaoh of
the cotton producing states above named to be known as the State Committees, and
each State Committee shall appoint local committees in sufficient number to safeguard the interests of the plan,

Applications for loans shall be made through bankers (mho will subscribe to Class "B" certificates to the extent of 25% of the amount of such applications) and shall be approved by the Local Committee and by the State Committee,
and by two members of either the Central or the Administration Committee.



No. 2.

After applications have been approved as above, loans will be
forwarded to the New York depositary of the Fund with instructions as to disposition of proceeds. 75% of the amount of each loan shall be provided by Class
"A" subscribers, and 25% by Class "BM subscribers. Each loan shall be accompanied by a New York draft of the bank through which application is made to order of
the New York depositary in the amount of 25% of the loan, to be evidenced by the
issue of a Class "B" certificate.
All sisa loans are to be against notes in form approved by the Administration Committee and secured by cotton; and for an amount not to exceed the value
of such cotton on the basis of six cents per pound, middling, accompanied by receipts
of approved warehouses and proper insurance policies.

At the making of each loan the borrower shall (in addition to providthe security as above specified) pay to the Administration Committee a sum
equal to two per cent of the face value of the loan; such sum to be used as a mule-,
ual borrowers Guarantee Fund in the manner hereinafter specified.
The Guarantee Ftimd so created shall be used for the following purposes (1) to
defray the expenses of administration; (2) to pay losses sustained, if any; (3)
any balance shall be returned to the borrowers in the proportion of their contributions to the Guarantee Fund.

ing

4

All cotton accepted as security for loans must be deposited in warehouses or buildings under the ownership and control of some firm, person or corporation other than the borrower; such cotton shall be properly insured and the Local
and State Committees hereinbef ore referred to, in approving such loans, shall pass
upon the sufficiency et the warehouse recelpts and the insurance, and shall be satefied that such cotton is free from all liens except that created by the loans
ierein specified, and is of the grade or quality specified in the application. All
warehouse charges and insurance premiums shall be borne by the borrower.
The Central Committee shall have full power to make such rules and
regulations as it, in its judgment, ma deem necessar; for the carrying out of the
purposes and the administration of the Fund, includine the rejection of any application for loans.

Bankers eligible to subscribe for Class "B" certificates shall sive
nify their intention to avail themselves of the privileges of this Fund and forward loan applications not later than January 15th 1915. Al]. loans shall mature
on or before January 15th 1916, provided, however, upon application of the original
applicant, on behalf of the original borrower, such loans may be extended by the
Central Committee for a further period not to exceed six months.
Calls for payment of subscriptions shall be made upon subscribers
as nearly pro rata as possible, and in the event of application for the full amount
not being received by January 15th 1915, the Fund shall be closed at the amount applied for and grated, and subscribers shall be released from further calls ozi account of their original subscriptions.
It is definitely understood that the subscriptions for $100,000,000.
to be represented by Class *A" certificates are contingent on the entire amount of
$100,000,000 being pledged.




.NP COMMITTEE
NEW YORK CLEARING HOUSE BUILDING
ALBERT H. WIGGIN, CHAIRMAN.
WILLIAM WOODWARD.
JAMES S. ALEXANDER.

77 CEDAR STREET

ANCIS L. HINE.
BrNJAMIN STRONG, JR.
FRANK A. VANDERLIP.
JAMES N. WALLACE.

NEW YORK, November 30, 1914.

W. P. HOLLY.




SECRETARY.

Benjamin Strong,

Jr., Esq.,
c/o Federal Reserve Bank,
62 Cedar Street,

New York City.
Dear

Sir:

At the call of the Chairmar, a meeting of the Gold Fund
Committee will be held at the New York 4aari.ng_House to-day,
Monday, November 30th, 1914, at 4:30 o'clock.
Yours very truly,

Secretary.




Uovombor ZOth, 19146

Dear 3ir:
beg to acknowledge receipt

of looce-lef portfolio in connection 71th
the lotton Lon
Pleaoe
cpt my
thanks Yor

Very traly ;lours,
Governor.

W. P. Holly, Esq.,
SecrctGr7, Cotton on Yana,
7? Cecb,.,r

B.S.Jr./VOM-2

5ow York City.

GOLD FUND COMMITTEE
NEW YORK CLEARING HOUSE BUILDING
ALBERT H. WIGGIN, CHAIRMAN.
WILLIAM WOODWARD.
ALEXANDER.
JAMES

77 CEDAR STREET

FRANCIS L. HINE.
BENJAMIN STRONG, JR.
FRANK A. VANDERLIP.
JAMES N. WALLACE.

NEW YORK, December 3d, 1914.

W. P. HOLLY,
SECRETARY.




Benjamin. Strong, Jr., Esq.,
c/o Federal Reserve Bank,
62 Cedar Street,
Now York City.
Dear Sir:

At the call of the Chairman, a
ColdWee will be held at the

house at 3:30 P. M.; to-day, 'Tpursday,

meeting of the
New York Clear ing
December 3d, 1914.

Yours very truly,

Secretary.

COTTON LOAN FUND

1

NEW YORK CLEARING HOUSE

CENTRAL COMMITTEE.
W. G. McADOO. CHAIRMAN. WASHINGTON. D. C.
J. S. WILLIAMS, WASHINGTON. D. C.
CHARL
S. HAMLIN, WASHINGTON. D. C.
PAUL IC. WARBURG, WASHINGTON, D. C.
F. A. DELANO. WASHINGTON, D. C.
W. P. G. HARDING, WASHINGTON. D. C.
A. C. MILLER, WASHINGTON, D. C.




COTTON LOAN COMMITTEE.

77 CEDAR STREET

W. P. G. HARDING, CHAIRMAN. WASHINGTON D. C.
PAUL M. WARBURG, WASHINGTON, D. C.
ALBERT H. WIGGIN, NEW YORK. N. Y.
JAMES S. ALEXANDER, NEW YORK. N. Y.
JAMES B. FORGAN, CHICAGO, ILL.
FESTUS J. WADE, ST. LOUIS, Mo.
LEVI L. RUE, PHILADELPHIA. PA.
WILLIAM A. GASTON, BOSTON. MASS.

W. P. HOLLY.
SECRETARY.

NEW YORK,

December 5th, 1914.

Benjamin Strong, Jr., Esq.,
0/0 Federal Reserve Bank,
New York City.
Dear Sir:

For your information I take the liberty of enclosing

herewith copy of call for meeting of the Coti9,60.Lamittee
.

In Washington on December 14, 1914; also copy of letter, under
date of December 4th, 1914, sent byar. Larding to the Chairman of each State Committee.
Yours very truly,

Secretary.

COPY OF A LEER

salT TO THE CHAIRMIN OF THE STATE LOAN COI ITTEES

COTTON LLOAN FUND

33Y.,1,1

COPY

5

PEStS

07g

i.

WASHINGTON, D. C.

December 4, 1914.

My dear Sir:
A conference will be held in Washington on Monday, December 14th,

between the members of the Cotton Loan Committee and the chairmen of the
State Loan Committees.

Your attendance at this conference is earnestly

desired, but in case you should be unable to come you are requested to
designate some member of your committee to represent you.

It is the wish

of the Central Committee that the plan be put into operation as speedily

as possible, and it is suggested that you call your committee together at once
and appoint such number of local committees as you may deem necessary to

represent your committee in the different towns of your state. It is hoped
that this can be done before you come to Washington, as the object of the
conference here is to bring about a discussion and thorough understanding

of all the details deemed essential for the safe and efficient administration
of the fund.




Very truly yours,
Chairman, Cotton Loan Committee.

COPY OF CALL SIVT TO nWBERS OF THE COTTON LOAN COWITTEE

New York, Dec. 5th, 1914.

Lear Sir:

At the call of the Chairmem, a meeting of the Cotton Loan
Committee will be held at the Treasury Building, Washington, D. U.,
on Moaday, December 14th, 1914, at which meeting the Chairman of
the respective State Committees have been requested to be pre9ent.
It 36 earnestly requested that you be present at this meeting either
in person or by a duly authorized representative. In order that
you may nave definitely before you tne imrertance of this meeting,
I take the liberty of enclosing copy of letter, under date of
December 4th, whieh Mr. Harding sent to the Chairmen of each State
Committee.




Yours very truly,

Secretary.

The hour of the meeting will be advised to you later.




zct
4_;'T13,07,1

1;ec,mber 7th,

Dear
.

sir,
.

gnelosed horoulth please find Jotter
from XX* V. T. ',;rurap, Cashier
of tho 3mk of
Wegram, thioh is roforrod to you for
answer.

Tory truly

:fotuoo.

Governor.

Mr. Lt. P.
Chase NetIonal 3a1k4
Now 7ork City.
varm5

291440




..,

,..)

,
Decombcr 7th, 1914.

,..

Pear Sir:

Your favor of tn. Ward inst, is
received.

Wr. W. P. Holley of the Chase

tional Bank of New York is Secretary of the
Cotton Loan Committee and your letter has been

referred to him for reply.
Very truly

GOVernOrs

W. T. Crump,
Care Bnek of Wagram,

Vagram, North Carolina.
BSJr/VON.3

COTTON LOAN FUND
CENTRAL COMMITTEE.

NEW YORK CLEARING HOUSE

77 CEDAR STREET

W. S. MCADOO, CHAIRMAN. WASHINGTON. D. C.
J. S. WILLIAMS, WASHINGTON, D. C.
CHAR, Fs S. HAMLIN. WASHINGTON. D. C.
PAUL
WARBURG, WASHINGTON, D. C.
F. A. DELANO, WASHINGTON. D. C.
W. P. G. HARDING, WASHINGTON, D. C.
A. C. MILLER, WASHINGTON. D. C.




STROICI-G-,
PZILSONA.L.

COTTON LOAN COMMITTEE.
W. P. G. HARDING, CHAIRMAN, WASHINGTON, D. C.
PAUL M. WARBURG, WASHINGTON. D. C.
ALBERT H. WIGGIN, NEW YORE, N. Y.
JAMES S. ALEXANDER, NEW YoRK, N. Y.
JAMES B. FORGAN, CHICAGO. ILL.

FESTUS J. WADE, ST. Louis, Mo.
LEVI L. RUE. PHILADELPHIA. PA.
WILLIAM A. GASTON, BOSTON. MASS. .

Jr.

W. P. HOLLY.
SECRETARY.

NEW YORK. December 7th, 1914.

Benjaiiiiin Strong, Jr.,

Esq.

c/o Federal Reserve Bank,
New York City
Dear Sir:

Enclosed please find copy of completed Plan
for the Cotton Loan Fund containing approval of the Central
Committee, and form of subscription, - the same having been
duly prepared for insertion in the loose leaf fclder previously sent you.
Also please find enci,osed, prepared as above,
copy of minutes of meeting of the Central.Committee"of the
Cotton Loan Fund held in Washington on December 4th, 1914,
together with list of names of State Cotton Loan Committees
referred to in the said minutes.
Yours very truly,

0/ c)--/Q.
Secretary.

GOLD FUND COMMITTEE
NEW YORK CLEARING HOUSE BUILDING
ALBERT H. WIGGIN, CHAIRMAN.
WILLIAM WOODWARD.
JAMES
ALEXANDER.

77 CEDAR STREET

FRANCIS L. HINE.
BENJAMIN STRONG, JR.
FRANK A. VANDERLIP.
JAMES N. WALLACE.

NEW YORK, December 8th

W. P. HOLLY,
SECRETARY.




Strong, Jr.,
c/o Federal Reserve Bark,
New York City

Benjal:ii

Dear Sir:

Please find enclosed, prepared for insertion in minute
book, copies of form letters and receipts used in connection with the
repayment, under date of December 7th, 1914, of a third 10% of the first
instalment to the respective subscribers to the Gold Fund.
Yours very truly,
-

Secretary.

1914.

COTTON kOAN FUND
.

CENTRAL COMMITTEE.
W. G. MCADOO, CHAIRMAN, WASHINGTON. D. C.
J. S. WILLIAMS, WASHINGTON, D. C.
CHARLES S. HAMLIN, WASHINGTON. D. C.
WARBURG. WASHINGTON, D. C.
PAUL
F. A. DELANO. WASHINGTON, D. C.
W. P. G. HARDING, WASHINGTON. D. C.
A. C. MILLER. WASHINGTON, D. C.




NEW YORK CLEARING HOUSE

77 CEDAR STREET

COTTON LOAN COMMITTEE.
W. P. G. HARDING. CHAIRMAN, WASHINGTON
PAUL M. WARBURG, WASHINGTON. D. C.

D. C.

ALBERT H. WIGGIN, NEW YORK. N. Y.
JAMES S. ALEXANDER, NEW YORK. N. Y.
JAMES B. FORGAN. CHICAGO. ILL,
FESTUS J. WADE. ST. LOUIS. MO.
LEVI L. RUE, PHILADELpHIA, PA.
WILLIAM A. GASTON, BOSTON. MASS.

,

W. P. HOLLY,
SECRETARY.

NEW YORK, December 8th, 1914.

Benjan:, Str3n6, Jr., ,Lsq.,
C1,, Federal Reserve aank,

62 Cedar Street,
New York City.
Dear Sir:

Referring further to my letter of the 5th instant,
I beg to advise you that the meetire of theCotton Loan Committee at the Treasury 'Building, "ashingten, D. C., or Monday,
December 14th, 1914, will be held at Chairman Larding's office
at 11:00 A.
Yours very truly,

Secretary.


th*


D000mbor atit, 1914,

Door 14re:

';l000lpt is hereby uatnowloderid of copy of

cal/ for meeting of the Jottoa LOaa

ttoo In

Wishiagtou oa .Docqmber 14th, also, oory of later
soot by Ur* Harding to tae CWArman of ooh State

Comattee.
ThaakIng you for sAno I um,

Very truly yourli,
Gororaor.
Cotton Loma iPuad,

Nor: tort Ulearina goals*,

77 Oodr Otrot,

New York A.ty.
VC.L1

COTTON LOAN FUND
CENTRAL COMMITTEE.
W. G. MCADOO, CHAIRMAN. WASHINGTON. D. C.
S. WILLIAMS, WASHINGTON. D. C.
RLES S. HAMLIN, WASHINGTON, D. C.
_ M. WARBURG, WASHINGTON, D. C.
P
K. A. DELANO, WASHINGTON. D. C.
W. P. G. HARDING, WASHINGTON, D. C.
A. C. MILLER, WAsHINGTON, D. C.




NEW YORK CLEARING ROUSE

COTTON LOAN COMMITTEE.

77 CEDAR STREET

W. P. G. HARDING, CHAIRMAN. WASHINGTON. D. C.
PAUL M. WARBURG, WASHINGTON, D. C.
ALBERT H. WIGGIN, NEW YORK. N. Y.
JAMES S. ALEXANDER. NEW YORK. N. Y.
JAMES B. FORGAN, CHICAGO. ILL,

FESTUS J. WADE, ST. Louts. MO.
LEVI L. RUE, PHILADELPHIA, PA.
WILLIAM A. GASTON, BOSTON, MASS..
W. P. HOLLY,
SECRETARY.

NE7' YORK, December 8th, 1914.

/

,

Benjamin Strong, Jr., Esq.,
Governor, Federal Reserv
New York City.,

Bank,

Dear Sir:

I beg to ackrioledLe yours of the 7th instant enclosing a letter from Mr. T. T. Crump, Cashier of the Bank of Wagram,
Wagram, N. C., and in ace° dance with your request we have to-

day written that instituti n innswer to their inquiry.
Ycfr's respectfully,

Secretary.

a
1

\\ 0

\-);:,e30

\,.\ \Ok\k

I \\.,

\7-_

-0)k_V\

$(3

,.V.\\/\

,
0

;




a

BrT.T. STRONG, Jr.
PERSONAL.

COTTON LOAN FUND
NEW YORK CLEARING HOUSE

CENTRAL COMMITTEE.
W. G. McADOO, CHAIRMAN. WASHINGToN. 0, C.
J. S. WILLIAMS, WASHINGTON, D. C.
CHARLES S. HAMLIN, WASHINGTON, D. C.
P.
M. WARBURG, WASHINGTON, D. C.
F. A. DELANO. WASHINGTON, D. C.
W. P. G. HARDING, WASHINGTON. D. C.
A. C. MILLER, WASHINGTON. D. C.

77 CEDAR STREET

COTTON LOAN COMMITTEE.
W. P. G. HARDING, CHAIRMAN. WASHINGTON
PAUL M. WARBURG, WASHINGTON. D. C.

ALBERT H. WIGGIN, NOW YORK N. Y.
JAMES S. ALEXANDER. NEW YORK. N. Y.
JAMES B. FORGAN, CHICAGO, ILL.
FESTUS J. WADE, ST. LOUIS. MO.
LEVI L. RUE, PHILADELRHIA. PA.
WILLIAM A. GASTON, BOSTON, MASS.

W. P. HOLLY,
SECRETARY.

NEW YORK,

December 11th, 1914.

Benjamin Strong,.Jr.,
c/o ,Federal Reserve Bank,
New York City
Dear Sir:

Please find enclosed the following documents prepared
for insertion in Cotton Loan Fund loose-leaf portfolio previously
sent you:

EinuteEi of meeting of Central Committee held on December
9th, 1914.

Minutes of meeting of C ontral Committee held on December
10th, 1914.
In a single binding, copies of the following: form of
application for loan; form of agreement ard Class "B" subscription
for bank or barker through whom application is forwarded; form for
approval of Local and State Committees; and form of completed Plan
for Cotton Loan Fund.




Cony of circular of advice to State and Local Committees.
Cody of fora of note prescribed by the Cotton Loan Committee.
Yours very truly,

OFOT-1
Secretary.

D. C.

ST RON
BEIT 3.

CT, J 1.

(-VERSON

COTTON LOAN FUND

CENTRAL COMMITTEE.
W. G. McADOO, CHAIRMAN. WASHINGTON. o. C.
J. S. WILLIAMS, WASHINGTON, D. C.
CHARLES S. HAMLIN. WASHINGTON, D. C.
PAW M. WARBURG, WASHINGTON. D. C.
F.
JELANO. WASHINGTON, D. C.
W. P. 0. HARDING, WASHINGTON. D. C
A. C. MILLER. WASHINGTON, D. C.

COTTON LOAN COMMITTEE.

NEW YORK CLEARING HOUSE BUILDING

77 CEDAR STREET

W. P. G. HARDING, CHAIRMAN. WASHINGTON
PAUL M. WARBURG, WASHINGTON. D. C.
ALBERT H. WIGGIN, NEW YORK. N. Y.
JAMES S. ALEXANDER, NEW YORK, N. Y.
JAMES B. FORGAN, CHICAGO, ILL.

FESTUS J. WADE, ST. Lows. Mo.
LEVI L. RUE, PHILADELPHIA. PA.
WILLIAM A. GASTON. BOSTON, MASS.
W. P. HOLLY. SECRETARY.
RUSHMORE. BISBEE & STERN. COUNSEL

NEW YORK,

December 18th, 1914.

Benjamln Strong; Jr., Esq.,
.c/o Federal Reserve Bank,
New York City.
Dear Sir:

o.

Please find enclosed, duly prepared for insertion in
portfolici previously sent you, copy of minutes of meetinr of the
Cotton Loan Committee held at Washington, D,C. on December 14th,
1914, together with copies of exhibits referred to therein.
Please also find enclosed copies of minutes of meeting
of the Central Committee held in Washington on December 16th,
1914, tc!.-cether with copy of list of the various Local Colamii:tees

therein approved.




Yours very truly,

aFT
Secretary.

P.S. We also enclose cony of minutes of meeting of Certral
Comittee held at Washington on Decerber 18th, 1911.
.

D. C.

COTTON LOAN FUND
CENTRAL COMMITTEE.

NEW YORK CLEARING HOUSE BUILDING

77 CEDAR STREET

W. G. MCADOO, CHAIRMAN. WASHINGTON. D. C.
J. S. WILLIAMS, WASHINGTON, D. C.
CHARLES S. HAMLIN. WASHINGTON, D. C.
PAUL M. WARBURG, WASHINGTON, D. C.
F.
DELANO, WASHINGTON, D. C.
W. P. G. HARDING, WASHINGTON. D. C
A. C. MILLER, WASHINGTON. D. C.




COTTON LOAN COMMITTEE.
W. P. G. HARDING, CHAIRMAN, WASHINGTON D. C
PAUL M. WAF2BURG, WASHINGTON. D. C.
ALBERT H. WIGGIN, NEW YORE, N. Y.
JAMES S. ALEXANDER, NEW YORK, N. Y.
JAMES B. FORGAN. CHICAGO, ILL.
FESTUS J. WADE. ST. LOUIS. MO.
LEVI L. RUE. PHILADELPHIA. PA.
WILLIAM A. GASTON. BOSTON. MASS.
W. P. HOLLY, SECRETARY.
RUSHMORE. BISBEE A STERN. COUNSEL

BENJ.

.1.,04 L.7, .S1

PERSONAL.

NEW YORK, December 22d, 1914.

Benjamin Strong, Jr., Esq.,
c/o Asaeral Reserve Bank;
62 Cedar Street,
Hew York City.
Dear Sir:
Please find enclosed, dui,' prepRred for Insertion In
your portfolio, copy of supplemental circular of advice to State
and Local Committees; also copy of delegation of authority from
the Central Committee to the Cotton Loan Committee.

Yours very truly,

Secretary.

r-

BENj. STRONG, Jr.
'PERSOltAL,
ALBERT H. WIGGIN, CHAIRMAN.
WILLIAM WOODWARD.
JA,,ES S. ALEXANDER.
FF

GOLD FUND COMMITTEE
NEW YORK CLEARING HOUSE BUILDING

77 CEDAR STREET

CIS L. HINE.

BENJAMIN STRONG. JR.
FRANK A. VANDERLIP.
JAMES N. WALLACE.

NEW YORK,

December 28th, 1114.

W. P. HOLLY,
SECRETARY.




Beni am in Strong, Jr., Esq. ,
c/ o Federal Reserve Bank,
New York City.

Dear Si r:

At the call of the Chairman, a meeting of the Gold Fund.
Committee will be held at the New York Clearing liouse at 3:00 P.
Tuesday, December 29th, 1914.

Yours very truly,
Secretary.
3t CY

COTTON LOAN FUND
TREASURY BUILDING

CENTRAL COMMITTEE.
W. G. MCADOO, CHAIRMAN, WASHINGTON, D C.
J. S. WILLIAMS, WASHINGTON, D. C.
CHARLES S. HAMLIN, WASHINGTON, D. C.
P
M. WARBURG, WASHiNGTON, D. C.
F. A. DELANO. WASHINGTON. D. C.
W. P. G. HARDING, WASHINGTON. D. C.
A. C. MILLER. WASHINGTON. D. C.

COTTON LOAN COMMITTEE.
W. P. G. HARDING, CHAIRMAN. WASHINGTON. D C.
PAUL M. WARBURG, WASHINGTON. D. C.
ALBERT H. WIGGIN, NEW YORK. N. Y.
JAMES S. ALEXANDER, NEW YORK, N. Y.
JAMES B. FORGAN. CHICAGO. ILL.
FESTUS J. WADE, ST. LOUIS. MO.
LEVI L. RUE, PHILADELPHIA. PA.
WILLIAM A. GASTON, BOSTON, MASS.

a,

W. P. HOLLY,

-

SECRETARY.

WASHINGTON, D. C.

14i0C,

December 29, 1914.

- 1914
l'eeze,

Dear Sir:
I enclose herewith W. W. P. G. Harding's delegation of yourself
to act as proxy for him in connection with the administration of the Cotoalowomogga).-1003i4

ton Loan Fund in New York.
,z,6,w46.131,4vwgta5k4,

Very

ruly yours,

Assistant Sec

Mr. Benjamin Strong, Jr.,
62 Cedar Street,
New York City.




tary.

COTTON LOAN FUND
CENTRAL COMMITTEE.

NEW YORK CLEARING HOUSE BUILDING

COTTON LOAN COMMITTEE.

77 CEDAR STREET

W. P. G. HARDING, CHAIRMAN, WASHINGTON. D. C.
PAUL M. WARBURG, WASHINGTON. D. C.
ALBERT H. WIGGIN, NEW YORK. N. Y.
JAMES S. ALEXANDER, NEW YORK. N. Y.
JAMES B. FORGAN. CHICAGO, ILL.
FESTUS J. WADE, ST. LOUIS. Mo.
LEVI L. RUE, PHILADELPHIA. PA.
WILLIAM A. GASTON, BOSTON, MASS.

W. G. MCADOO. CHAIRMAN, WASHINGTON. D. C.
J. S. WILLIAMS. WASHINGTON. D. C.
CHARLES S. HAMLIN. WASHINGTON. D. C.
PA
M. WARBURG, WASHINGTON, D. C.
F.
DELANO, WASHINGTON, D. C.
W. P. G. HARDING, WASHINGTON, D. C
A. C. MILLER. WASHINGTON. D. C.

W. P. HOLLY. SECRETARY.
RUSHMORE. BISBEE & STERN. COUNSEL.

BENJ. STRONG! Jr,
NEW YORK, December 30th, 1914.

PERSONAL.




Benjamin Strong, Jr., Esq.,
c/o Federal Reserve Bank,
New York City..
Dear Sir:

Please find enclosed, duly prepared for insertion in
your portfolio, copy of minutes, of meeting of the Central Committee held at Washington, D. C., on December 28th, 1914, together with
of Local Committees approved at the said
meeting.
We also enclose copy of minutes of meeting of the
Central Committee held at Washington, December 29th, 19141 at
which meeting the Committee approved the designation of certain
!lanks to act as custodians of warehouse receipts and insurance
certificates in their respective States.

list

Yours very truly,

Secretary.

COTTON LOAN FUND
NEW YORK CLEARING HOUSE BUILDING

W. G. McADOO, CHAIRMAN, WASHINGTON. D. C.
J. S. WILLIAMS, WASHINGTON, D. C.
CHARLES S. HAMLIN. WASHINGTON. D. C.
M. WARBURG, WASHINGTON. D. C.
PA
F. .,. DELANO, WASHINGTON. D C.
W. P. G. HARDING. WASHINGTON. D. C
A. C. MILLER. WASHINGTON, D. C.




COTTON LOAN COMMITTEE.

77 CEDAR STREET

CENTRAL COMMITTEE.

W. P. G. HARDING, CHAIRMAN. WASHINGTON. D. C.
PAUL M. WARBURG, WASHINGTON. D. C.
ALBERT H. W1GGIN, NEW YORK. N. Y.
JAMES S. ALEXANDER, NEW YORK. N. Y.
JAMES B. FORGAN, CHICAGO. ILL.
FESTUS J. WADE, ST. LOUIS. Mo.
LEVI L. RUE, PHILADELPHIA. PA.
WILLIAM A. GASTON, BosTON, MASS.
W. P. HOLLY. SECRETARY.
RUSHMORE. BISBEE & STERN. COUNSEL

NEW YORK, January 2nd, 1915.

Benjamin Strong,

Jr., Esq.,

c/o Federal Reserve Bank,
New

York City

Dear Sir://
.

7:e have to ac3vise you -to.t
Class "A" subscriptions now in theXands

the total of signed
of the CottonL an

Committee exceeds ,,1CO3000,COG.,
q
the Fund ..s :.c..re 01.6
Tele,.rphic advice has been forwarded
bnen declared operative.
to the Chairman of each State /Committee advising him of the fact
that the Cotton Loan Committy6 is in a nositiOn to male loans upon
receipts of applications iy/confermity with the provisions of the
.

A detailed list ming up the total of Class "A" subscripPlan.
tions will be sent. you.f r your records as soon as the Committee
is in receipt of formal subscriptiors
still outstanding.

covering

Yours very ,truly,
/

I

Secretary.

the small balance

0

COTTON LOAN FUND
CENTRAL COMMITTEE.

W. G. McADOO. CHAIRMAN. WASHINGTON, D, C.
.1. S. WILLIAMS, WASHINGTON. D. C.
CHARLES S. HAMLIN, WASHINGTON. D. C.
PAI
M. WARBURG, WASHINGTON, D. C.
F.
DELANO, WASHINGTON, 0 C.
W. P. G. HARDING. WASHINGTON, D. C
A. C. MILLER, WASHINGTON, D. C.

NEW YORK CLEARING HOUSE BUILDING

COTTON LOAN COMMITTEE.

77 CEDAR STREET

W. P. G. HARDING, CHAIRMAN, WASHINGTON. D. C.
PAUL M. WARBURG, WASHINGTON. D. C.

ALBERT H. WIGGIN, NEW Yon, N. Y.
JAMES S. ALEXANDER. NEW YORK, N. Y.
JAMES B. FORGAN, CHICAGO.
FESTUS J. WADE, ST. LOUIS, Mo.
LEVI L. RUE, PHILADELPHIA, PA.
WILLIAM A. GASTON. BOSTON, MASS.
W. P. HOLLY. SECRETARy.
RUSHMORE. BISBEE & STERN, COUNSEL

NEW YORK, January 23rd, 1915.

s,*.

v.Y.>

henjamin Strong, Jr., Esq.,
c/o Federal Reserve Bark,
C2 Cedar Street,
Ile:, York City

Dear Sir:

Please find enclosed, duly prepared for insertion in your
portfolio, cony of minutes of meetin- of the Central Corittee held
Washington, D.C. on JaPuary Gth, at wLich Illeting the CbtmAttee
approved certain additions and changes in regard to Local Committees
for the State of Arkansas.
We also enclose, prepared as above, specimen of Class "A"
u.nd Class "h" certificates, together vdth a complete list of Class "A"
subscriptions to the Fund, making uçr the total of $101,036,100.
Yours ve.r,l/ truly,

Secretary.

We also enclose copy of minutes of meeting of the Central Committee
held at Washington, D.C. on January 7th, at which mueting the substitumembur of the Local Committee
tion of J. R. Scurlock for Joseph Wolf as
was approved.
for Piggott,
P.6.




GOLD FUND COMMITTEE
-..-,014.4"'WEW YORK CLEARING HOUSE BUILDING

ALBERT H. WIGGIN. CHAIRMAN.
WILLIAM WOODWARD.
JA -.S S. ALEXANDER.
FR,..1,:CIS L. HINE.
BENJAMIN STRONG, JR.
FRANK A. VANDERLIP.
JAMES N. WALLACE.

77 CEDAR STREET

NEW YORK, January 11th, 1915.

W. P. HOLLY,
SECRETARY.




Benjamin Strong, Jr., Esq.,

c/o Federal iieserve Bank,
flew York City

Dear Sir:

At the call of the Chairl.an, a, meetilT of the Gold

Fund (;ommittee will be held at the lew York Clearing House
W6dnes.day, January 13th, 1915, at 3:30

Respectfully,

Secretary.

on

iDA

GOLD FUND COMMITTEE

sTo:Ta,

NEW YORK CLEARING HOUSE BUILDING
ALBERT H. WIGGIN, CHAIRMAN.
WILLIAM WOODWARD.
JAM"
S. ALEXANDER.

77 CEDAR STREET

PERSONAL.

FRA...IS L. HINE.
BENJAMIN STRONG, JR.
FRANK A. VAN DERLIP.
JAMES N. WALLACE.

NEW YORK.

January 20th, 1915.

W. P. HOLLY,
SECRETARY.




Benjamin Strong, Jr., Esq. ,
c/o Federal Reserve Bank,
New York city.

Dear Si r:

At the call of the Chairman, a meeting of the Cold Fund

Committee will 1..)e held at the New York Clearing house, Fr iday,

January 22d, 1913, at 3:00 P.

:A.

Yours very truly,
Secretary.

COTTON LOAN FUND
CENTRAL COMMITTEE.
W. G. McADOO. CHAIRMAN. WASHINGTON, D. C.
.1. S. WILLIAMS, WASHINGTON. D. C.
CHAr,ES S. HAMLIN, WASHINGTON, D. C.
PA1
WARBURG, WASHINGTON, 0. C.
F. A. DELANO. WASHINGTON. 0 C.
W. P. G. HARDING. WASHINGTON. D. C
A. C. MILLER. WASHINGTON. D. C.




NEW YORK CLEARING HOUSE BUILDING

COTTON LOAN COMMITTEE.

77 CEDAR STREET

W. P. G. HARDING. CHAIRMAN, WASHINGTON. D C.
PAUL M. WARBURG, WASHINGTON. D. C.
ALBERT H. WIGGIN, NEW YORE N. Y.
JAMES S. ALEXANDER. NEW YORE, N. Y.
JAMES B. FORGAN, CHICAGO. ILL.
FESTUS J. WADE, ST. Louis, MO.
LEVI L. RUE. PHILADELPHIA. PA.
WILLIAM A. GASTON. BOSTON, MASS.
W. P. HOLLY, SECRETARY.
RUSHMORE. BISBEE a STERN, COUNSEL

NEW YORK,

January 28th,

1915.

31-

Benjamin Strong, Jr., Esq.,
c/o Federal Reserve Bank,
flew York City

Dear Sir:

Please find enclosed, duly prepared for insertion
in your portfolio, copy of minutes of meeting of the Central
Comittee held at rashington, D.C. January 2flth, Pt which meeting
the uommittee approved the appointment of the Local Committee for
Shelbyville, Tenn.
Yours very truly.,
_

Secretary.




BENJ. ST
PERSON ALL

jenuory 29, 1915.

Holly, Log., 3eoretory,
'Aton Lona Fund,

17 leder Street, New York.
Door
1

yrite to acknowledge roceipt or your letter of Jan.

uery 20th with enclocure as stated, end also of your letter of
January 23rd and Om opotimem certificates) which come under

separate cover.
Yours very truly,
Secretory.

JrciLVI

Xi I

...COTTON LOAN FUND
CENTRAL COMMITTEE.

NEW YORK CLEARING HOUSE BUILDING

COTTON LOAN COMMITTEE.

W. G. MCADOO. CHAIRMAN. WASHINGTON, D. C.
.3. S. WILLIAMS, WASHINGTON, D. C.
CHARLES S. HAMLIN, WASHINGTON, D. C.
PAL
M. WARBURG, WASHINGTON. D. C.
F. A
7LANO. WASHINGTON. 0 C.
W. P. G. HARDING, WASHINGTON. D. C
A. C. MILLER, WASHINGTON, D. C.

77 CEDAR STREET

W. P. G. HARDING, CHAIRMAN, WASHINGTON, D. C.
PAUL M. WARBURG. WASHINGTON, D. C.

ALBERT H. WIGGIN, NEW YORK N. Y.
JAMES S. ALEXANDER. NEW YORK. N. Y.
JAMES B. FORGAN, CHICAGO, ILL.
FESTUS J. WADE, ST. LOUIS, MO.
LEVI L. RUE. PHILADELPHIA, PA.
WILLIAM A. GASTON, BOSTON, MASS.
W. P. HOLLY. SECRETARY.
RUSHMORE. BISBEE & STERN, COUNSEL

NEW YORK,

February

24th, 151,5.

Benjamin Strong, Jr., Esq.,
c/o Federal heserve Bank,
Vew York City
Dear Sir:

I beg to encloce ;nefewith copy of a memorandum of
minutes adopted by the Cotton Loan Committee in correction
wit. the closing of the Cotton Loar Fund; also
to the effect that the form of approval incorporated in the
said memorandum has been duly signed by all members of the

certification

Cotton Loan Committee.
Yours very

Enc.




truly,
Secretary.

COTTON LQAN
CENTRAL COMMITTEE.
W. G. McADOO, CHAIRMAN, WASHINGTON. D. C.
J. S. WILLIAMS, WASHINGTON, D. C.
CHARLES S. HAMLIN. WASHINGTON. D. C.
Pt " M. WARBURG. WASHINGTON, D. C.
F.
JELANO. WASHINGTON. D C.
W. P. G. HARDING. WASHINGTON, D. C
A. C. MIL'LER, WASHINGTON, D. C.

'eOTTON LOAN COMMITTEE.

NEW YORK CLEARING HOUSE BUILDING

77 CEDAR STREET

W. P. G. HARDING. CHAIRMAN. WASHINGTON
PAUL M. WARBURG. WASHINGTON. D. C.

ALBERT H. WIGGIN, NEW YORK. N. Y.
JAMES S. ALEXANDER. NEW YORK. N. Y.
JAMES B. FORGAN. CHICAGO, ILL.
FESTUS J. WADE. ST. Louis. Mo.
LEVI L. RUE. PHILADELPHIA. PA.
WILLIAM A. GASTON, BOSTON, MASS.
W. P. HOLLY, SECRETARY.
RUSHMORE. BISBEE & STERN, COUNSEL

NEW YORK, April 5th, 1915.

Benjamin Strong, Jr., Esq.,
c/o Federal Reserve Bank,
New York City.
Dear Sir:

For the

completion of your records, I enclose herewith a

copy of communication under date of :April

4th, 1916,

addressed by

the Central Committee to Class "A" :subscribers to the Cotton Loan

Fund, notifyinz

the latter

that all of

the Cotton Loans had. been

paid and that liability under suVscriptions

to the.Fund'had ter-

minated.




Yours sincerely,

Secretary.

D. C.

4




-

BENJ.

PERSONAL. 2,

01)

°Flew Utorh CEeetring
77-83 CEDAR STREET,

March 2d, 1914.

Dear Sir:
For your information please find copy of Correspondence between the Reserve
Bank Organization. Committee and the New York Clearing House Committee.
Respectfully,

A. H. WIGGIN,

WILLIAM SHERER,
Manager.

Chairman Clearing House Committee.

RESERVE BANK ORGANIZATION COMMITTEE
Washington, D. C.

Sir:

February 6th, 1914.

Section 13, page 14, orthe Federal Reserve Act pro vides, among other things, as follows:

"Upon he indorsement of any of its member banks, with a waiver of demand, notice and protest
by such bank, any Federal reserve bank may discount notes, drafts, and bills of exchange arising out of
actual commercial transactions; that is, notes, drafts, and bills of exchange issued or drawn for agricultural,
industrial or commercial purposes, or the proceeds of which have been used, or are to be used, for such
purposes, the Federal Reserve Board to have the right to determine or define the character of the paper
thus eligible for discount, within the meaning of this Act."
It will be observed that the paper thus made eligible for rediscount is defined as that arising out of "actual
commercial transactions * * * the proceeds of which have been used, or are to be used, for such purposes."
The true definition of "commercial paper" or "commercial transactions" gives rise to a great difference of
opinion on the part of bankers generally, and is susceptible of a very broad or very narrow interpretation. The
point has been frequently raised, and insisted upon, that "commercial paper" in a purely technical sense should
be construed to mean obligations which represent the purchase price of some commodity sold.
Attention has been called to the fact, however, that trade customs in the United States have developed along
lines which would limit such paper to a proportionately small amount if this strict and technical interpretation were
adopted.

In other words the established practice now appears to be that instead of the purchaser executing his note
to the vendor for the whole or any part of the purchase price of the commodity sold, it has become customary,
in order to obtain the benefit of cash discounts, for the purchaser to borrow directly from the banks and to
use the proceeds of such loans to make the payment due the vendor. This being true, the question of identification of Commercial Paper presents some practical difficulties.

-In the exercise of the power vested in the Federal Reserve Board to determine or define what shall be
treated as "commercial paper" the Committee is of the opinion that the Board will desire to have before it the
views of practical bankers so that the matter may be considered from all important standpoints.
With this in view, I am directed by the Committee to ask your Clearing House to give consideration to
this provision of the law, and to submit on or before the first of March, 1914, a suggested definition of "commercial paper" and also to submit such suggestions or recommendations as to standard forms of Notes, Drafts,
and Bills of Exchange covering the various kinds of commercial transactions as may seem to you advisable, to
the end that there may be established, as far as possible, a uniform practice among all Federal Reserve and member
banks with respect to the creation of the eligible paper provided for in the Federal Reserve Act.
The Bill furthermore provides, in section 16, page 19, as follows:
"The Federal Reserve Board shall make and promulgate from time to time regulations governing

the transfer of funds and charges therefor among Federal reserve banks and their branches, and may
at its discretion exercise the functions of a clearing house for such Federal reserve banks, or may designate a Federal reserve bank to exercise such functions, and may also require each such bank to exerCise
the functions of a clearing house for its member banks."
The Committee also directs me to request that you give consideration to this provision of the Act, and submit
for its consideration suggested regulations governing the transfer of funds, and the charges therefor, among the
Federal reserve banks and their branches, and also submit your views and suggestions as to how the Federal
Reserve Banks themselves could best perform the clearing house functions contemplated in the Act.
Any suggestions that you may deem advisable to make in connection with these two provisions will receive
consideration and be appreciated by the Federal Reserve Board.
Respectfully,
(Signed)

M. C. ELLIOTT,
Secretary, Reserve Bank Organization Committee.

President, New York Clearing House Ass'n, New York, N. Y.




(

'Pew

Cts,

von Clearing bouu.
February 27, 1914.

M. C. ELLIOTT, ESQ.,
Secretary, Reserve Bank Organization. Committee,
Washington, D. C.

Dear Sir :
Your letter of the 6th instant, addressed to the President of the New York Clearing House
Association, was submitted by him to the Clearing House Committee for their attention.
We have given careful consideration to the inquiries put by the Reserve Bank Organization Committee as set forth in your letter, and duly appreciate the importance of arriving at such definition
of the character of paper eligible for discount by the Federal reserve banks as shall meet the requirements of the business of the country in respect of providing an elastic and stable currency, and, at
the same time, provide a definite measure of security.
It is obvious that what the Organization Committee desires is not so much a technical, however
accurate, definition of "commercial paper," or "commercial transactions," or "commercial purposes,"
as the same may be understood in the general sense by bankers or lawyers, but an expression of
views as to how the Federal Reserve Board, acting within the powers conferred upon it by the
Federal Reserve Act, shall "determine or define what shall be treated as commercial paper," eligible
to discount, in order to carry out the true purpose of the Act.
The terms "commercial transactions" and "commercial purposes," in their broadest sense,
would cover any transaction and any purpose connected with commerce. Commerce is not confined
to the buying, selling or bartering of commodities, but is a term of large significance and, as was said
by Mr. Justice Harlan, of the United States Supreme Court, "comprehends traffic, intercourse, trade,
navigation, communication, the transit of persons, and the transmission of messages by telegraph
indeed every species of commercial intercourse * * which is carried on between man and man."
The purpose of the Federal Reserve Act is primarily "to furnish an elastic currency, to afford
means of rediscounting commercial paper." That it was not intended that all paper that might 1?),
strict construction come within the general definition of commercial paper should be eligible for
discount at a Federal reserve bank is made clear by the provisions of Section 13 of the Act, and especially by the clause excluding "notes, drafts or bills covering merely investments, or issued or drawn
for the purpose of carrying or trading in stocks, bonds or other investment securities, except bonds
and notes of the Government of the United States." It is unnecessary, therefore, to attempt to
define commercial paper in its broadest sense. A fundamental requirement is that the paper shall be
used not only in connection with the commerce of the country, but that it shall be either directly
used in the purchase of commodities or that the proceeds shall be intended to be so used, so that
it will have the presumptive security of the commodities, or the avails of a resale thereof, back of it.
The custom in this country of sellers of commodities granting discounts for what are known as cash
payments has resulted in the practical adandonment of former trade methods whereby the purchaser
gave his note to the order of the seller in completion of the transaction, and in the establishment of
the practice of bank borrowings by purchasers for the procurement of funds with which to discount
their bills. Although such practice could not well be discontinued abruptly, nevertheless we deem
it a matter of the utmost importance that there should be a general restoration of the former conditions in this respect. The use of acceptances abroad is a prime factor in the open discount market
and a similar system should prevail in this country. The purpose of issue of that class of paper is
apparent on its face; and as it retires itself automatically it is an efficient aid in making an elastic
circulation. It is evident from the language of the Federal Reserve Act that the advantages of this
system were appreciated, and we urge that every legitimate effort be made to encourage its general
adoption. One aid to that end that suggests itself is the establishment of a difference in rates by
the Federal reserve banks which would favor commercial paper of the class referred to. In the
meantime, we realize that existing conditions must govern in the determination by the Federal Reserve Board of the character of paper that shall be eligible to discount by the Federal reserve banks.
Having in mind the essential requirement of approximately liquid, or quickly marketable assets,




presumptively back of the paper, and the limitations expressed in the Act and its general purposes,
we would suggest that promissory notes of each o the above mentioned classes, toThe so eligible for
discount, may be defined as follows :
A' written instrument, negotiable in form, made by a merchant or manufacturer, or a corporation engaged in either of such occupations, whereby the maker contracts toT pay, at some fixed or determinable future time, a definite sum of money stated therein, for the procurement of funds to be used
in payment for goods, wares or merchandise intended for resale in some form, but not in the form of
real property, and not merely for investment; and which shall bear the endorsement of the payee; and
which has not been issued for the purpose of carrying or trading in stocks, bonds or other investment
securities; and which shall have a ma.turity in conformity with the requirements of the Federal Reserve
Act.

A written instrument, negotiable in form, whereby the maker contracts to pay, at some fixed
or determinable future .time, to the order of some merchant, manufacturer, farmer, dealer in live stock or
agricultural products, or mine owner, or a corporation engaged in any such occupation, a definite sum

of money stated therein, representing in whole or in part the purchase price of goods, wares or merchandise purchased by the maker from the payee, and intended for resale in some forth, but not in the
form of real property, and not merely for investment; and which shall bear the endorsement of the
payee; and which shall not have been issued for the purpose of carrying or trading in -stocks, bonds or
other investment securities; and which shall have a maturity in conformity with the requirements of the
Federal Reserve Act.

A draft or bill of exchange, for the purposes of the Act, may be defined as :
An unconditional order in writing addressed by a merchant, manufacturer, farmer, dealer in live stock

or agricultural products, or a mine owner, or a corporation engaged in any such occupation, to another
person or corporation, signed by the person or corporation giving it, requiring the person or corporation
to whom it is addressed to pay, at a fixed or determinable future time, a sum certain in money to order,
and which shall haye been accepted by the drawee, and shall have been drawn for the purchase price of
goods, wares or merchandise sold by the drawer to the drawee and intended for resale in some form, but
not in the form of real property, and not merely for investment; and shall not have been issued, drawn, or
accepted for the purpose of carrying or trading in stocks, bonds or other investment securities; and which
shall have a maturity in conformity with the requirements of the Federal Reserve Act.
(d) The usual and customary form of notes, drafts and bills of exchange which are directly secured
by staple agricultural products, or other goods, wares or merchandise; and such as have been issued or
drawn for the purpose of purchasing or of carrying or trading in bonds or notes of the Government of
the United States, and which shall have a maturity in conformity, with the requirements of the Federal
Reserve Act.

The next question to consider is as to how the banker is to determine :the qualification of the
maker of the note, or the drawer of the draft or bill of exchange, and as to whether or not the paper
is to be used for the purposes hereinabove specified. Although the requirement of endorsement by
member banks seeking rediscount carries with it a contingent liability measured by the amount
loaned thereon by the Federal reserve bank, nevertheless, it would obviously, be placing too great
a burden upon the Member bgnks to require them to assume any other responsibility for all of these
facts. We suggest, therefore, that a standard form of promissory note and draft .or bill of exchange
should be prepared which will contain representations on the part of the maker, and in some cases
also of the payee, of the note, and of the drawer of the draft or bill of exchange, to cover these

requirements, and that some penalty shall be provided by law for any false statement in these
particulars.

We would suggest, merely by way of illustration, the following forms :
Form No. 1.
New York,

191

after date, the undersigned, for value received, promise to pay to
or order, at
Dollars.

The undersigned represents that (he, she or it) is a (merchant, or manufacturer, as the case may be) and
that this promissory note is given for the procurement of funds to be used in payment for goods, wares
or merchandise intended for resale in some form, but not in the form of real property, and not for investment nor for the purpose of carrying or trading in stocks, bonds or other investment securities.

Form No. 2.
New York,

s..191

after date, the undersigned, for value received, promise to pay to
or order, at
Dollars.

The undersigned and the above-named payee each represents that the said payee is a (merchant, or
manufacturer, or farmer, etc., as the case may be), and that this promissory note is given for goods, wares
or merchandise purchased by the maker from the payee, and intended for resale in some form, but not in

the form of real property, and not for investment nor for the purpose of carrying or trading in stocks,
bonds or other investment securities.

Form No. 3.
New York,
days after

191
,

pay

to the order of
Dollars,

value received, and charge the same to account of the undersigned who represents that (he, she or it) is a
(merchant, or manufacturer, or farmer, etc., as the case may be), and that this bill of exchange has been
drawn for the purchase price of goods, wares, or merchandise, sold by the drawer to the drawee and
intended for resale in some form, but not in the form of real property, and not for investment nor for
the purpose of carrying or trading in stocks, bonds or other investment securities.
To Messrs.

It may be urged that borrowers mingle their funds and ought not to be held accountable, therefore, for the strict application to the purpose specified of the particular moneys borrowed upon paper
of the character designated. There are three answers to this : One, that the provision for penalties
may be directed towards the intent at the time of the issuance of the paper ; two, that inasmuch as
it is necessary, in order to carry out the true purposes oi the law, that commodities or their avails
should actually be back of the rediscounted paper, merchants, manufacturers, etc., should be required
to limit their use of paper of this character to the strict application to the purposes therein set forth,
and should make a division of their funds and accounts accordingly ; because, three, they can borrow
for other legitimate purposes without making the representations required.
The subject of the exercise by the Federal Reserve Board of the functions of a clearing house for
Federal reserve banks, and the exercise of like functions by the Federal reserve banks for their member banks, is one requiring careful study. The practical questions that enter into its solution are
manifold. The necessity for prompt notice of dishonor of repudiated items in order that the parties
interested may not suffer by delay, the tremendous amount of business cleared every day, and the fact
that many State institutions are not and may never become members of the Federal reserve system,

point to the necessity of the retention of the existing local clearing houses. Whether or not in the
future conditions should so change that these instStutions could be made departments of the Federal
reserve banks is something that must await devebpments for its determination.
Very truly yours,
ALBERT H. WIGGIN,




Chairman, Clearing House Committee,
New York Clearing House Association.

Itte Q74,t% National, -1,6auk
Albert H.Wiggin,PREs.F.,rr




Now Vorft

September 15, 1914.

05-

Benjamin Strong, Jr., Esq.,
C/o Bankers Trust Company,
New York City.
Dear Ben:

Yours of even date at hand.
I will do my best to get in touch with you tomorrow.
Confidentially, the New York Committee is already appointed.
It is the one that I suggested to you.
In regard to the methOd of procedure I shouldn't think of reducing the amount.
I
think $150,000,000, should be the minimum.
Speaking without
authority, I am satisfied the New York banks will do whatever
their fair share is and I think this could be safely promised,
the prorating of the fair share
to be fixed after the Reserve Board posted itself as to the holding of gold of the reserve cities of the whole country.
In other words, I would
make it a matter entirely independent of the municipal financing and proceed on the basis that New York would take its full
proportion.
The foreign exchange figures have changed somewhat
since I saw you because of reports received from other banks.
They are substantially all in now.
I will show them to you
in confidence if you find time to stop in the office.
I am perfectly willing to go to Washington, but it
would be a little indelicate for the Chairman of the Clesring
House Committee to go there unless the authorities ask him to.
His visit might be misunderstood.
I think, for you and for
me, it is most important that the New York Clearing House maintain this position.
All in the strictest of confidence.
Yours sincerely,

(51-Tas.e NatirrxtaricSanit
NEW YORK

CBERT H_WIGGIN, Presideni-

September 2d, 1914.

Bear Ben:
T. have just received your letter of MonT will have the figures in
day this morning.
I suggest you and T
hand Thursday afternoon.
get together here et the bank, say at about four
T am planning to take the
o'clock, Thursday.
night train, as I cannot get away early enoug)1 In
Please
the afternoon to get a decent train.
advise.
I will try to get such figures as T think
of use, and will appreciate it if you will
will (3
let me know in advance that figures you think it
would be well for us to have.
1.

Yours sincerely,

Benjamin Strong, Jr., Esq.,

OBankers Trust Company,




New YorkCity.

jr--

011- (apse Naticata0ganit
NEW YORK

ALBERT H.WIGGIN, Presider,

September 19, 1914.

Benjamin Strong, Jr., Esq.,
c/o Bankers Trust Co..,
New York City.
Dear Ben:

I submit the enclosed for your approval.

I have confidence that yours will be better.




Yours sincerely,

ir./

/

9199z

77 rf3

Pjf

September 19th, 1914.

iya nay e,

,




Benjamin Strong, Jr., Esq.,
C/O Bankers Trust Company,
New York City.
Dear Sir:

Acting for the Clearing House Association, and at the request
of the Federal Reserve Board, the Clearing House Committee has appointed a Committee to represent the New York banks and trust companies and
to co-operpte with Committees from various other cities of the country
in securing a pledge of a gold funa, and to assist in assembling and
managing this fund for the purpose of relieving the present foreign
You are earnestly requested to serve on such
exchange situation.
Your associates will be:
committee.
Albert U.

Wiggin,'

William Woodward,
Francis L.
J. S. Alexander,
Frank A. Vanderlip.

I shall appreciate it if you will attend a meeting for organization
and general discussion on Monday, September 21st, 3:30 P. M. at the
New York Clearing House.
Yours sincerel

Chairman, Clearing Hous

ommittee.

SUGGESTED FORL OF LETTER TO NEW YORK BANKS AND TRUST COMPANIES.

September

,

1914.

At the repeat of the Federal Reserve Board, the New York Clearing
House Committee has appointed a Committee to represent the banks and trust
companies of New York in securing the pledge of a gold fund of kid00,000,000.

(

to relieve the present foreign exchange situation, and to aid in the assembling
and adMinistration of this fund. The undersigned, acting as such Committee,
request your approval of the plan and your assistance.
The banking and commercial interests of this country are suffering
from the Chaotic condition of our international trade and banking arrangements.
European credits are curtailed and foreign exchange in volume is
unobtainable. It is of fundamental importance that the credit of the banks,
corporations, firms and individuals of this country be maintained.

atilea kelawt to-oj

The Directqrs_g_t4a_Federal Reserve Bank of the United States
recognizeSthe serious situation and askSthe-co-opel'ilia of the entire
country. The members of thdt1e*T4,4--Pme Board are Government Officers,
and the membership of the Board includes the Secretary of the Treasury of
the United States and the Comptroller of the Currency. The Federal Reserve
Board, owing_ to the authori7t3a...Aeastexi-in-i,t

,

is t+te---argani-z-ertiron best able to

cope with this national situation, and proposes to,requestlirthe_banka-in
all the central reserve cities and reserve cities of-file- Country/tOon,
tributageto this gold fund, if it is evident that the banks of New York,
Chicago, St. Louis, Boston and Philadelphia, where the largest supplies of
e held, will co-operate.

,Aold

,The,pTlem is a nationa/one. The amount to be raised will be
e.pportioned.es t e holdings of gold in the central reserve cities and reserve cities,o,ore to the whole , and the apportionment in New York will be
made on_a-basis equitable to all. The success of the plan depends upon
New York, and the ability of New York to do its share depends upon the

willingness of each 41444-4241-6X.y institution to 4e-lp. a_tp$4,077,:,

The proportion of the $100,000,000 fund to be contributed by
Your share of this contribution based upon
your holding of gold in proportion to the total holding of gold of the
banks/of this (dity will be 0
. Will you advise this Committee
promptly if we may count upon your co-operation and contribution in this
matter. It will be provided that no bank will have more than 25% of its
c. tribution in the fund at one time. As soon as the success of the plan
New York is i45,000,000.

s assured, we will post you further as to details.




Yours sincerely,

109110C-

SUMMED FO..%1 OF LETT at TO NEW YOIC: ;31.22M3 AND TRUST CIAPANIM.

, 1914.
A plan for securing the pledge Of a glad fund of .t100,000,000 to relieve the preeen
Ierelepi exehange situation has been formulated by a committee appointed at trashineton
September ath, at the oceaferenoe of deleentes from Clearing House associations of the
various reserve and central reserve cities. This plan has received the approval of the
September

Seoretary of the Trepanned- and the unanimous approval of the '.eedered Reserve Board. In
accordance with the recommenciaLions so approved, the Cleating House Committee of the
New 0 Pk Clearing Rouse Ass ociation, has appointed the undersiened a committee to repre-

sent the banks and trust °cm/anise of New York in seouring the pleden of the airount pro-

portioned to the institutiens of this city, and to menage the trare action.

The 'banking and commercial interests of this °country are suffering from the chaotic
condition of our international trade and banking arrangenents. Nit/wean credits are
curtailed kern foreigL exchange in volume Is unobtainable. It is of fundamental important
that the credit of the banks, ooxporations, firms and individeals of thie ::enintry be
maintained. It is alto imperative that our merchants E, nd manufacturers be relieved of
the expense and embsteressment now imposed upon them in settling their foreign. accounts.

The Federal :asserre Board ref:we:mixes the serious situation and t4sks the O.-Operation

of the entire. country. The 1,embere of that SA'd are aovernment Officers, ant the membership of the Board includes the Secretary of the Treasury of the United States Ind the
Comptroller of the Currency. The Federal ReserVe Board is best able to cope wit this
national situation, and proposes to submit this request, with the& r en.do.reeeent and
recom endation, to the banks and trunt cempanies in all the central reserve cities and

reserve cities of the country to contribute to this gold fund, if it is evident th.f.it the

banks Of New York, Chicago, St. Louis, Boston and Philadelphia, vhere the lareert supplies
Of gold are held, will co-operate.
The problem is a national one.

he arnaarit to be raised will be arportioned to each

oity ix the proportion that the holdings of gold in the central reierve oities ere" reserve cities bear to the whole, and the apportionment in New York will be made on a

basis equitable to aL.

The 110.0001111 of the plan depends upon New York, and the a b DAV

of New York to do its share depends upon the willingness of eilech institution to oo-orerets
The proportion of the .1.00,000,000 fund. to be contritneted by New York is ;!45,000,000

Your share of this contribution based upon your holding of gold in proportion to the total
holding of gold of the banks and trust aoripanies of this City will be

pun advise this Gormoittee promptly if we may count upon your co-operation and contribution

in this matter. It will be provided that no bank will have are t an 25% of its.contribution in the fund at one time. An soon as the success of the plan is assured,we will post
you further as to details.




Yours awe:rely,




41/1E-

e

11111011k1
lir
EMI wirviivIN 9-C. L. irgrt rni
ritin
I
CAN
1

IG, 011

INCOR POP ATE

25,000 OFFICES IN AMERICA.

reinrnist

m ri

r-m

T

CABLE SERVICE TO ALL THE WORLD

pans' TRANSMITS and DELIVERS messages only on conditions limiting its I iab.lity. which have been assented to by the sender of the following message
can be guarded against only by repeatu, a inesske, back to the se ding station fore,
rison. and the Company will not hold itself liable for errors or delays in
,ielivery of UnrepeatOd MPS8IrgeS. beyond the amount of tolls pai4 thereof nor is a.
beyond the sum of Fifty Dollars,
sea, nas been valued by the spider thereof, nor in reny ease where the Claim i. not pre nted lii anti,within sixty days after the message is filed witphe Company for transmission.
This is an UNREPEATED MESSAGE, and is delivered by request o the sen er, nier the ond itions named above.

THEO. N. VkIL, PRESIDENT

RECEIVED AT
\14

125 If7-

BELVIDERE BROOKS, GENERAL MANAGER

711
19

114 DII KT IN

1.1

11

25

BENJAMIN STRONG ES0 JR

CARE NEW WILLARD HOTEL WASHINGTON DC
1-I kM .CALLING MEETING OF.. FOREIGY EXCHkNGE COMMTEE AT NEW7-

,ORK CLE1tRING -HOUSE MOND4YSEPTEMBER TWpITY FIRST AT THREE THIRTY
PLEASE -PLAN TO BE:THERE-MOST IMPORTANT THAT YOU SHOULD IT WILL
KELP-.TREMENDOUSLY:IF WE HAVE l'LETTER READY TO SUBMIT TO THIS
COMMITTEE FOR TiltrR APPROVAL -ADDRESSING EAtH BANK EXPLAINING

THE:SUBJECT AND ASKING THEIRCONSENT IMPORTANT THAT LANGUAGE

OF OUR LETTER FOLLOW LANGUAGE OF REPORT OF

DORGAN COMMITTEE

AND ALSO LANGUAGE OF LENEthAT.FEDERAL'RESERVE BOARD WILL SEF,D
_

111

TO-OTHER CITIES WONT YOU

WORK

OUT SUCH LETTER .I.WILL-




IP

WESTE

GEORGE W. E. ATKINS, VICE-PRESIDENT

_

,N,

UNION

),

Form 168

WESTERN UNION

71t

to,

4xP.Ira-- 3

TEL

WV

:PI er:9'

NEWCO MB CARLTON, PRE

"NT M
BELVIDERE BROOKS, VICE-PRESIDENT

RECEIVED AT Wyatt Building, Cor. 14th and F Sts., Washington, D. C.

ALWAYS
OPEN

sty
)0 TEE S.

'LI., BE. TN TOWN SUNDAY :NI.

IN TOWN PLEASE .TELEPHONE
.LBEBT .11 WI.GGIN.

)1 b 51)-

n

:is CASE YOU

AT 'MY 'APARTMENT

4

Coy of letter , original
A' which was sent to C. C. Hamlin,

COPY

3-overnor, Federal Reserve Board
on October 27th, 1914.




d

COMMITTEE

A4,7/7110/F

rk, October 27th, 1914.

1

rd,

eaenington, D. C.
Dear Governor:

The call for payment of the first instalment of
subscription to capital stock of the Federallieserve Lank of New
York, which we received today from the Federal Reserve Board,
issued by you as Governor, has been called to my attention, and
it occurs to me, in behalf of the Gold Fund Committee, I should
rite you in regard to it.
In the paragraph instructing us as to the remittance,
your circular letter makes the plain suggestion that if checks of
drafts are to be used, arrangements should be mac.e with the banks
on which such drafts are drawn fort the payment of the gold or gold
You will recall clearly 1 think that, when the Gold
certificates'
Fund plan was made up and the question as to whether to ask bvnks
in cities other than Reserve Cities to contribute was discussed, it
was agreed that it was wise to stop with reserve cities, for the
reason that all bunks would be expected to make their gold payments
In fact, if
to the Reserve Banks out of their own gold holdings.
you will review the letter sent out at the time the Gold Fund was
see that this suggestion was put into words.
arranged, you
I write at this time because we believe that the banks in many of
the cities that contribute the Gold Fund are gAng to be greatly
embarrassed,by requests that payments be made and the gold supplied
As we read the instructions,
for the account of out of town banks.
it is directly contrary to the understanding that we had when we used
our efforts in the Gold Fund, which has resulted so successfully and.
been so beneficial to the interests of the country.
I should very much appreciate a word from you and the
Board that will enable the Gold Fund Committee to appreciate the
have many diffidelties,
We
situation and the reason for tne change.
but being chairman of the Gold Fund Committee is not the lightest of my
I should very much appreciate your co-operation.
duties at the moment.

eill

hll

e-

Yours sincerely,

qd

#110,11Wu,
ChairMan.




'11
COPY

GOLD

FUND

COMMITTEE

New York, October 27th, 1914.

Hon. Charles E. Hamlin, Governor,
Federal
Reserve Board,
Washington, D. C.
Dear Governor:

The call for payment of the first instalment of
eubecriptionto capital stock of the Federal Reserve Bank of New
Yorkehich we received today from the Federal Reserve Board,
ieuued by you as Governor, has been called to my attention, and
it occurs to me, in behalf of the Gold Fund Committee, I should
write you in regard to it.
In the paragraph instructing us as to the remittance,
your circular letter makes the plain suggestion that if checks of
drafts are to be used, arrangements should be maa,e with the banks
,n which such drafts are drawn for the payment of the gold or gold
You will recall clitarly I think that, when the Gold
certificates;
Fund plan was made up and the question as to whether to ask banks
in cities other than Reserve Cities to contribute was discussed, it
was agreed that it was wise to stop with reserve cities, for the
reason that all banks would be expected to make their gold payments
In fact, if
to the Reserve Banks out of their OAM gold holdings.
you will review the letter sent out at the time the Gold Fund was
arranged, you will see that this suggestion was put into words.
I write at this time because we believe that the banks in many of
the cities that contribute the Gold Fund are going to be greatly
embarrassed,by requests that payments be made and the gold suplied
As we reed the instructions,
for the account of out of town banks.
it is directly contrary to the understanding that we had when we used
our efforts in tne Gold Fund, which has resulted so successfully and
been so beneficial to the interests of the country.
I should very much appreciate a word from you and the
Board that will enable the Gold Fund Committee to appreciate the
We all have many difficulties,
situation and the reason for tne change.
but being chairman of the Gold Fund Committee is not the lightest of my
I should very much appreciate your co-operation.
duties at the moment.
Yours sincerely,

gld 6,Ctrak-

f?'(

ChairMan.

GOLD FUND COMMITTEE
NEW YORK CLEARING HOUSE BUILDING
ALBERT H. WIGGIN, CHAIRMAN.
WILLIAM WOODWARD.
S. ALEXANDER.
JA T

77 CEDAR STREET

FR",,CIS L. NINE.
BENJAMIN STRONG, JR.
FRANK A. VANDERLIP.
JAMES N. WALLACE.

NEW YORK, Nov. 24th, 1914.

W. P. HOLLY.
SECRETARY.




Benjamin Strong,

Jr., Esq.,

2

c/o Federal Reserve Bark of New York,
62 Cedar Street New York City.
Dear Ben:

Yours of the.23 d in regard

properly

exchange

to the Gold Fund

pose this is a matrerlirirrtinld
be handled tziY t e Sub-Committee in charge of the
purchases aid 7ties.
I will
it over to them.

Committee received.

I

s

Yours sincerely,

Chairman.

turn

GOLD FUND COMMITTEE
NEW YORK CLEARING HOUSE BUILDING

77 CEDAR STREET

ALBERT H. WIGGIN, CHAIRMAN.
WILLIAM WOODWARD.

JAS S. ALEXANDER.
FR CIS L. NINE.
BENJAMIN STRONG, JR.
FRANK A. VANDERLIP.
JAMES N. WALLACE.

sTRoNG,

W. P. HOLLY,
SECRETARY.




NEW YORK, January 6th, 1915.

bE,Arf.
Pzi-isoikrAz.

Benjamin Strong, Jr., Esq.,
c/o Federal Reserve Bank of New York,
62 Cedar Street,
New York City.
,

Dear Ben:

think it is evident that in the near future
I
the Gold Fund Committee will conclude that it is advisable
to make some statement to the various participants as to
the status of the Gold Fund and possibly give some reason
should vqry much appreciate it
I
for keeping it alive.
if you would draw up some such statement as you think it
would be advisable to send out. We spoke of this some
I am only putting it before you in writing so
days ago.
that it will not escape your memory.
With thanks in anticipation,
Yours

sincersly,




Jaauary 9th, 1915.

Dear Albert:
The enolosod memoraadam may sug:;est a

few ideas for the circular letter to be sent to
the contributors to the Gold; ?aad. This is a
very hasty dictation an4 possibly le Should dis-

cuss it before making WO of any part of it.
Very truly yours,

Albort H. Wiggin, Esq.,

Chairman, 12,11Lapd 0,ommittr,
Chase National iiatik,
Jew York City.
1154/VCM-3




BENJ. STRONG, Jr,
PERSONAL.
January 9th, 1915.

Dear Albert:
I wrote Mr. Warburg following my

conversation wit,h you and his reply is az follows:

"Let me add that 1 am entirely in
accord with your suggestion of keeping the
Latinos
SILL144.144.44,tolika,,,tafilawiter.

like these, it is noora,lvisablo to lot

any fire engine get out of commission. Nobody can toll in advance how many we shell

need and at that time."

Very truly yours,

.Jert H. Viggin,

.;hairman, Gold Fund Arrmittee,
Chase National Bank,
New York City.
li3Jr/VC4.1

7:4

0

-BENJ.

Ct

;

JP."

r

RtRSON-11:1,

There is enclosed hero-ith an account of the transactions of the
Gold Fund Committee to and including

date. You will ob-

serve that against the original c.11 for a pledge of 0.0000,000 of gold,
roe pledged by

contributions from

Inotitutions representing
cities throughout the United Fitates,

The Comitten's plan contemplated calling in the first instance
25 % of the total anount pledged and adjusting the amount pledged in
CO38 of

Ox.-

100,000,000 by reducing the percentage of the last call, in case

the entire fund was required.
As was stated at the time the plan was recon-eaded and adopted,

the Comlaittee was of the opinion that the entire anount of the pledged gold

would not be shipped and that, in fact, the influence of the creation fund
would prove to be of greater volue to the country as a whole than the immediate shipment of any considerable Pqrtion of the fund. The Committee

was, also, of the opinion that the object of the fund would be better
served if sales of exchange could be so made as to effect a prompt re-

duction in the rate-1 then prevailing for foreign arafts and table Lrausfern and that the nucoels of the Committee in bringing this about would

naturally reduce the profits resulttnK from the sales of exchange and

possibly result in little if ant profit at the tinn of the final account.
The statement enclosed herewith indicates that the Committee's

anticipations in these matters have been verified.
Pledges by contributors to this fund were made in conformity

with the terns of the report d,ted September 7, 1914, aderessed to the
secretary of the Treasury and the Fe"eral Resery

o-Ird by a Connittee

of bankers, a copy of which has been sent to each contributor.

y the

terms of that report, this Comittee is authorized "to arrange for shipment of gold to other countries, as well ne exchange and cable transfers



against such shipments at such prices as they may fix to detomine to

-

.2-

what conditions foreign exchange may be sad, to diotribute the proceedr, of such sales among the contributing IrInks'in New

York and to fix a date for the final settlement de the fund."
In conformity rith this authority, the Got_ littee has shipped
of gold ageinst which it has sold
a total of
0

.of exch-mgo of rhich amount

. .was

sold to the United Sates Government at cost and paid for by tho rovernysent in gold which is now held by the Committee.

Rates of exchange have nor reached a ooint where in normal

times it might be expected that gold would be imported to this country.
The absence of any such movement indicates to the ComAttee the dosir-

ability of continuing the gold fund in operation for th,,, present, although it is not expected that the Committee will !Is called upon to

undertake any further transactions at the present time.




a

Jan. 18th, 1915.

4 dear Albert:
In conneotioh with the pesoible distribution of funds held
ev the Gold Puna Committee, I would like to submit the suggestion that

distribution be effected as largely as posAble through the Federal 130serve Bank of New York.

We are now creditor with moot of the other Federal Reserve

Banks and I have no doubt they will be wry glad to extend their facilities for the distribution of the fund among the members 7iho have contrib-

uted by direct credit to the accounts of member banks on the books of the
Federal Reserve Banks, making the necesuary distribution in their various

districts as may be directed by the contributors.
This will avoid shipping a large amount of caah and will automatically effect an adjustment of Federal Deserve Bank balances. Will
you be good enough to advise me how thiu suggestion appeals to you and your

'sociates, and oblige,
Yours very truly,

Albert U,

iggin, 380,41
Chairman, Gold Fund Committee,

Chase Natio=lraT,

trootttotootatmetatraftttlond.40t

New York City.




GOLD FUND COMMITTEE
NEW YORK CLEARING HOUSE BUILDING
ALBERT H. WIGGIN, CHAIRMAN.
WILLIAM WOODWARD.
J/ TS S. ALEXANDER.

77 CEDAR STREET

FRANCIS L. HINE.
BENJAMIN STRONG, JR.
FRANK A. VANDERLIP.
JAMES N. WALLACE.

NEW YORK,January 19th, 1915..

W. P. HOLLY.
SECRETARY.

7BEN3, STRONG-,
I'VRSONAL.
Benjamin Strong, Jr., Esq.,

-

c/o Federal Reserve Bank,
New York City

Dear Ben:

Yours of the 18th Astant in regard to a method of distri-

bution of the Fund now in tye hands of the Gold Fund Committee
received.
Your suggeagon is entirely in order. In fact, Mr.
Alexander made this same 'suggestion at the last meeting of the
Committee.

It is the simnlest way of handling the transaction, and

means economy in bot




labor and expense.

Yours sincerely,

J.

June

S(10r.

3, 1921.

lAy dear Mr.

le have only within taa last few weeks been able to conclude the
final accounting of the expenses of the various Liberty loans, and determine

at extent, if aay, expenditures made by the organization could not be

to

reimbursed by the Treasury under existing law, or rules of the Department.

We find that the total amount of such items that cannot be reimbursed is
4;2,535.27.

Of this sum, the Federal Reserve Bank is able to absorb $2,229.74.

The remainder, 43Oe.23, I have paid personally.
The Liberty Loan Committee passed a resolution, agreeing personally

to assume certain charges, up to a limited amount, which as I recall was *1,000.
If the members of the committee care to pay their respective shares of this sum,
the amount of eaon committeeman's proportion will be

Had these operations been conducted since the passage of the Volstead

:tot, it would not have been neceseary to as the committee to make any contribu-

tion.
Yours very truly,

Albert H. Tiggin, Esq.,

r.
MM




Cs

FIFTY-SEVEN BROADWAY
NEW YORK

t

k,"/

C.)
'')\ 1°,4"1

6

JUN 15 19?1

Hon. Benjamin Strong,

c/o Federal Reserve Bank,

15 Nassau Street,
New York City.
PERSONAL.




FIFTY-SEVEN BROADWAY-

C c)

Nzw- Yonic

JUN 15 19?1

r*ItYr\i'vj

0:11'
fi
Hon. Benjamin Strong,

c/o Federal Reserve Bank,

15 Nassau Street,
New York City.
PERSONAL.







June 15, 1921.

My dear Mr. Wig,in:

I thank you for the remittance of 03.65
enclosed in your favor of June 34.
Yours very truly,

Albert H. Wiggin, Esq.,
57 Broadway,

Nev York, N. Y.
MOM

May 27, 1925.

Dear Ur. Wiggint

At the meeting of the Clearing House Committee on April 13, 1925, at
which you were good enough to have Ur. Harrison and ma preeent, there were four

matters diecueeed which, one way or another, concerned relations of this bank
with 'Bambara of the Clearing Houee Aseocittion.

nm writing now to mention each of them and what is my understanding

of the status in which they were left.
Beearate Sort or Checks Drown on Branch Betakes

As you remember, the Clearing House had asked us to consider the pbasi-

bility of eliminating or reducing the number or sorte of checke drawn upon breaches
of banks that are on whet we Gall our Manhattan, Bronx end Brooklyn Clearing Are,

raneement list.

We reported to you tt the meeting that we had carefully considered

this question end that, in our opinion, it Would not be wise or entirely fair to all
concerned, Arbitrarily to eliminate the present branch bank sorts if only beceuee

of the fact that such sorts were a part of our understanding with those banks which
have agreed with us to collect their items at this bank each morning.

e feel,

however, as you do, that the increase in the number of branch bunk aorta, especially
if continued, mey become unduly burdeneome to other banks in New York City generally.

We proposed, therefore, in order to meintein the number of these eorta as low as is

practicable in all the present circumstances, not,to require in future epparateeorte
for new branch banks that may be established except in unusual cases, such, for instance, 816 the consolidation of two or more going institutions which are now sorted.

separately, or perhaps in a ass. where a branch may grow large enough to justify



a

Albert S. tiggin, Eaa.
oparIte bort on ground* Of

COAVOOlOUOO

to all.

Vo outlined to the co=lttee our

vies* on cal tho various asi4ecte of thie 14ueetion, rind it iv our untleretenini thect

0 some discueolon your committee eus entirely in Lgrement with tho po61tion which
ikttr
we proposed to take.

Collection or Non-Ckeh Items PsrAhl 10 NIT lax* Cttys

At the v.rubent time Wi tio not hsudle for Few Tort City b6uke sty noc-caeh 1t2ms

'.44t arc pap,blo ire New York City except ebovo lath Ztroot or iu the outlying dUtriote.
nettioned to your committee that w* b.
our city member bank* that they, would
even

it

for thel/et 4 Obtrge, if roc:ogee

retelted tn informal ouggeotion to 4=0 Or
11A to COL41,:lor tits collection of ell city

thtt would (paver the coot of bersice.

so raslista tit oortoin city bank* would prob%hly not ce.re to. :mks uso or each m 4orficu
for all of their non-cosh ittme, Nevertheless, because 104 elrettAy bort, an catenoive
megioonger clrvias in VIVIC Iork City to hcndle non-cash iteme for 611 out-of-town zio*I:er
L&CRO 44 ev.11

cash it

for mll teaMmtr ttenks, city cLd country *like, it but. ac-

urred to ug that there sight AO, 110

ufrieleuttecagat en the part or

juatify our toseileration of an extension of t

vity bttoke t

oio oAb to z1,040 it c,vailable to

them for non-obeh item* payable anywhere in MA York City, just co it ia now streilatac

to to for items payable throughout :the coun.try or la tho outl

city.

diatricto or thic

My purpoae in mantioniag this; =Atter to tho committee woe aisply to ascertain

ether there le ouch a denand.
The preoent policy of taw. rulers). Sammy* Systole, ea you pkatapt Imov,

landlitt for any member bank tree or charge Amour service, all eon-caul) items tetich

arit isysble outaide ef.tbe city to *Moil the meabor hank l* locate&

TD* only exacplAo

to tbtt goneral rule I. the oae I huom just xentioned relstive to non(-cssh itome.pubbas
in the outlying dietriete or *ow TotirCity. But it would probably not bi . fetleibid for
us to extend the exception te tide general pollorby handling for Xaw Tork-aty btema bli
vioa-mish items poyoblo in




w' YorkCity unloi4 tfe take a per item cherge sufficient to.

Vi:7/4b.

1burt M. Victin, Zaq.
offeot onroximately the *wet of that unuaual aervioe.

4* I remember, wow* Of the meez.ero of your oozzittee *44,1 that U..ey *avid

to thint weer the qui:lotion:In over to dotoreino abothaT th* aervine tha,t sa,
alLbt

ablo to offer would to of asco;,e ttd ohamoior thshuu4 ju4tify ita bolas
by tht t1e44Att Bouee bvnito.

T t*aute ttat If theAr io any doairt on thtlr

port to tx,ve ua **toad to them tto tarvica In tha empnor whiah I diuoueg4W, v*

Ncifital of it.
YOrk ra0r/41.03-*4041

tit* alanaaaa4 with tho comoittee the protest toet to thia tnnk of olaring item* through tho Noe York fatutliAg Howe.

Our teouoameut for ttal ..:A4'rY;k0 ia

booed 14;4021 the propOttlon bh&t the total dollar azoklut of iteme that V4 eamil to the

HOU44 heNro to tho taiga dollotr amount of all item* oleared.

to coAt*quant-

ly pay proitortionNtely tho av,an atount of the total amp-44*4I of opurotAaa the Clearing (_

House ae Amy other somber of that ;gavot:lotion pep, with the extof:t!outtwo do not
iu any wq. contribute to t1.4* oxpeaae of eanduoting the C1* ti
it* *44 member*.

It bee been ~feeling, aa

A014,10 OXOntatSO,M

oontioned to yoo,r,00maitt000. that the

preaaat bola* of ***twain aettere of th* Cloarin$ Ii0,446

*AVOA$44 (ot1ier thNu

02l4atIono) ,or*tao lertely to the 41**Ovantala of thie hank.
Aa ywa reaeoerp I told your mosomittos that Istny of the other Fudera1 lide4,,orva

U4nka *n4 ,OrF,notes (inoludlAs our brtaz4 lu 2uff.a10 orkko to ooatributton ohp.tevor to

the local Clearini House* in whoaa olanrings they porticIpate.

The Fedarta Ilmearra

&ail. of *a* York plkya a rolatirelyUrger amount th,sa *ay othor Fodorx1 fh)aeryt

1u tke oircumet*mces, I aokod, end youotated timt your eowtIttoa

ho 61.ad to

i..)n-

ei4or tho whole iuzation, With * "low to eloteraining whether at= othor ba*io of kelptlnt
oitht be mbru *vital:Ai, to oil aoncetned.

You will recoil that oae of to oorr&-

tion* which2 wntione44.justit)kng 4 review it tho 2rovortion of mpenao tome by tho
Federal Reearye Bglu4 v*41 the taatthet elemat 411 aelAbere of tb4 Cletriag Roue* ba*0014tioa nos d4pnait with ua uogit or tø iteR4o drawa U;on 146 luatemd. 0f oon4ine thta



tiogin,

04

im

thoroby radueins; tbs tgount ohlch tboy othervis

.throui:.41

Nand likevisQ the :proportionof oxponoe which ttity p*y.

We ura unn.blis to propose soy eptelel esount or elqspecie:. plan,
ncuire aport.iaformatioa thsa so row 40,vo 41;to lOtTi014 BOUo.o exponova,;

therei

,A.-zt

it V u.

but if

ty !Unbar inforsation or 0,ts in .eoz4nection with tte .- usetton wash you

any oars to )4ave tree usi Tissue 6o not hesitate to lot uor know..

Our onl/. ttlrught

is to have our siessesent fixed upon ooze btel that Will aors fAkirly ropmsant tte
rolativo hdvnnteges to us st4 our privilege of boln4

sissring menbor,. o 4 to you

ia the sovarti advaintsges 014 result hoosnse of our secborstip

tha privilege of

aottling,byaenoeS upon our hooks sMout All the itLbor vald oxpen*,s that wee inrident

to tte previous sethode of settlement.
tveroiefina Reaervto At ts tnd of_Vooh riatiT Poriolir

fwesre to be A' growintupreeties by somt or ttl la.reer nomber bealko to
borrow heavily from ths Fodervl Reserve Data. on Friday in ordorto.note 000d Lny da1

?latency in their reservoe of tho olz previous 6yo, and thou re2ty all ors Icrzo

port of thees borrowiao s4tordiv.

Ai s hibitin4 this teneenoy, the attenhed

fleares stow ttup Amount borrowed on ?

t7 end repaid on Soturdel fro jAnuery 1- to

tieto.

Tbia bee various offeote which we believe mre ondo*imbls.

Ono.i

thAt the

st.staAvent of tho Federal 4sort, Dtaik, wbica4 is Swilled on FridAy es orthe eloos of

busipees gednesday, d000 not ,raflootli trwpicture or aaounts borrowid. from this
bll.nk.

Another is thhte th. Olonriag Roust, aUtowout of member bviek oondition iseuod

Zaturdey noon dosu. notlelsot ths true *vireo or (kotual row:try. kot4tion of tbs.
tierinz rouse mombors.

A ttir4

that in -some o&ses (sithouLh not ell, by

ao.1,ts) it resulto in 4 nasibiar of mitster benks frequently being under tho PDAW.Irat Of vtrikquirod

it is inpOisiblo for us AO. detsrmite to shot extent'tbli situAtion tkrisom



Albtirt 114 Whisfir,

e5

0:: air* tr.:meters made tree

tork to other FeOcrwl AC44rV4 cistrifta In

order to brine up tt-os 4vomgs rtigtIrrao of bohke In other large *Wee where tte

,/.

of aver4ging 4*Iia JaS practised &I, it i iu hoe Iotit.
Thar* appear to be two,nothoda of dealing with this matter ia orer thht
th,* obj;otious c;bors shethrstsd usrbe oliothatod..

One le ciaply to escura tbtls 044-

opNr40,o4 or the aentar bank* ia Ces 'fork so 44 to at,eati a, greater err:OA to

their reserves throughout the sash mors evehly,thas iasione st present.

Tho *t1'.er iv

to rasrrhage the period in *hick t,114 ra»ervo 4vemgee ere flinred la the different

ao that uas/pentedviro transt,ore will aot be coi:seatrats4 at the

Ducerre

end of ths =sok sad so remelt in unxpeoted lapairaeat of re4ervoa+
We

oc;*oisliy aoncerned with the second eethod, cc it av Int thut tto

votial or altsrgaios no* practised by the 7e4srel hoer** Baas agM b0.00dillAd
.

.

.

'Aid in oTerfoulag ttlio diffiaulty.

'

In order to &guanine to loltat eataut these trame-

.fie sre ros2sncible fior rteeres-looairochts late la the week, it oili b* hesseery to
sek fart:aid of the **Aber* of the C1434411.14 &AVIA VO keel?i.reciord'of transfer* :ze..0.o ror

vidual bs4ke With keep N440 York sofouata tor * foriad of a' to*. upatise.

thet'Uo refurrenhe oftreas.:eta by indivi4usl tanks *111

h retartagtiesnt of t

tod

Vs believe

uS to dsterukhe utoAbo:

lr. whioli t4i$ reeorya WittiTt440 16 rit4rOd ia other Raservo

distristo emy not result in 4 mor* even distribution *f these transfers thmughout
the weei in De* York.:

iPor sumple, it it meld. ho arranged tbAt thisezo would

their aversio es of ilondty, Boston ta of TUsigisy, 1hi1a4e4h1s, o.o or Voduwid4, Clvtola
aad fish Proafie** tui of Thursday,. end all of the other 'Federal Rectory's liltUkAW 40 of

Priday, it air,ht be poeoiblo toe* *operate the trehsfers'throughoUt thc:neek that. Olo
Xes York gegor beeke *vivid escape this- unetpetted roasrea tapsIrmett,

satterefere enelosing.e4Oro, shish-ie Avroly a sugzection upon uhCch ..5u*h
r000rd Uki b* kopt, kva &t. tie* std of three or four weeks whoh the 61&ta iw colAZLe=,

will be glad to atedyit voltb"Our oskrecords and ascertain whether this say hot bo

A solution of the difficulty!



-

41bert a, :Atilicia,,Ssi.
lie "0 -4141417

;4:i

5/::7A5.

t001.00,Viir0 Ot tho Olinierottor, ot tho Molfring 9cz

itb,44o

1.:614A, Ad :!)011 that you will: WA hooltato to mor31 tsArq Parther AumioAttom* **

thbo4 a*ttti.ra An* otmr aorvivois in Wool oo *7.* Tututlly irAero4ted.
di*cuott tbofk it 4r4 USA.
t...4;

romtn,

trar yviarb,
SEV. rTmsa
Govorno

Alburt V. iig4in#
ridan, Clclariag fIVIA04 C*Mmitt00,
0/0 CWY*4 YrAtioa*1

3ev York.
7,004.

.SiS*4




*r* .g1*:1 to

N1M 441=478 BOTACTS3 CR PAID :21,1 BY /11,.."$ YORT CITY LW4117Z uvr3

2.013111/..;V:L4 Batlf

116 of

N147.1 YORK

Parimis
1425

In milllors of dalars;
Thuroday
Teox .;,,td

4a4.

1,2,3
0,4,10

15,16,17
.22,23,24

2400,31

Fob.

5.6,7

12,13,14
14,20,21
26,27,26

2213,14

Holiday
12.0

.

44.4
35.4

.

214
-lio-.
4,1031

14.1

224,24,28
:oial

W,1,2
14,15,16

21.2;,23
l'ot41




.
26.3
-

.
2.1
Holiday
.
30.2
.
O*6
11.2
12.2

14,17,18

Paid

Borrvbed

14,20,21
26,27,20
Apr.

krldaw

3**

.
7.0

17.4
28.6

8orrowo4

.
.

23.1
41.0
61.1

.

60.4

.

4.4

.
.

21.41

..

32.7

.
23.'4

.
.
w

10.6

.
.
1,1
.
.

57.6
..

14.1

126.6

612.7

21.7

7.3

12.7
8

64.5
61.3

.:.1attrday

Paid

borrond

15.5

13.2

8.6

.

..

-

.
...

Ptaid

.

0.6

-

70.8

-

44.0

17.4

.

..

2i).8

..

.

12.6
4.3
...

.

51.5

-

0.3

-

16.1

13.6

12.7

.

4.0

..
107.0

3.5

.

.
7.5

10.8

V.3

-

.
.

48.5

-

-

40.1

2./
...

34.6

0.1

W.:

Piny 29, 1.9Z5.

tlakrft.,Viggint
I rowet to find that ttaro in a. alight error in the
lottor which ont to pu on gmy 27th.

rentioning the rientribution ade to 'a*
hou

a by other FWeral reoarve hAr4. *rut bmtachee,

thekt our own Buffalo brood* to Inoludoci with-Wes whIoh

contribution,

ito

olet.r.
find
ao

otattortlf. fwet, I tow rindi that theutriele

or the lee York rederei Reserve AlAnk aoAtritutee

ftnatt to Itt lova

pox'

houto.-'--

Wnilw tittle le not

very lo,rge 10, ttert Ioo eailtioming it,

thtthere roy. bib no ialetatesent to the 000twri. of tLe Cleurlog
Wta. Ammitteatt.

lerhape, you s1fl

fit to cal/ it to- their

attention.
Very truly youre,

Onw4.3vora
I

Abvtrnox.

"Abort R. ligllni Wtle,
Chairlun, CloArlag NOU40 COAVAitt$0,

c!;/G' Cu liktion41 Ziank,

4roa4emy, teetkVtty.

te0741.$




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