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,e,/f/7 catie-v ;,4 Esq., Argentina, De Iriondo, Banco do la Manion Argentina, Manuel 7T., " President, "tienos 4''res, which My dear Sir: of the interesting conversations Ajres, and stay at Buenos during his with you the inof having undertake nleasure to have us to you he had the for an would be agreeable that it have been waiting we since learning relations, into a reciprocal of entering in establishing the pleasure itiative ourselves between of giving such relations opnortunity appropriate of establishing for the purpose with you Bank of Mew York. corresnondenee Federal Reserve and the in interested Nacion Argentina de la is very nuch the Banco Warburg aware, Mr, between our doubtless As you are relations intimate Anil with a basis for friendly with hin nrepare a conferred having us frequently and we have be the neans trust nay institutions, which no respective with you, this negotiations to enter upon entering upon opnortunity view to A favorable the passage relations such awaiting postponed of establishing been has necessarily finally however, amendnents Act, which correspondence, reserve to the -2edaral anendnents of certain upon nenart of last year. to enter law the latter in a m:sition became it are non fortunately result we relationsrhic!1 As a banking certain nutual developing as follows: with you for gotiations for your consideration, account, tentatively to nronose to open a current pleasure is our Bank of 7ew York Reserve and the Banco %Nsderal in pesos The (1) Argentina Banco de la 'Marion with the with the without interest, interest, without account, subject to to open a current to be 7acion Argentina both accounts de la in dollars, Bank of Mew York neserve ?ederql transfer. check or by cable deposits either by other in receiving ivithdrawals to act for the and in nuking institution (2) Bach and bullion of coin purchases In this connecin making and bullion, nay suggest. of coin circumstances and bullion as of coin shipments Mr. '7arburg has informed us -2- tion we own to be pleased to be our mutual interests would be best served our having an would the effect that advisee whether your views coincide with by understanding that all balandes between the two banks be settled in Fold, if so desired by the creditor inotitution, (3) The natco de la '7acion Argentina to rurchase for account of tho Aderal Reserve Bank of row York prime bills payable in the Argentine, such as it buys for its own account, for the purpose of employing at interest such funds as the Federal Reserve Bank of Uew York might desire tanporarily to invest in the '. rgentine; and the :.'edern1 Reserve Bank of !:ew York. to !our- chnise for account of the Banco do la 7acion Argentina in like manner prime Inerican Ulla whenever the latter desired to nuke tenporary investments in the united Itates (4) nhe Banco de la 7acion __rgentina to purchase for account of the Federal Reserve lank of ::env York in Argentina long bills payable in the United States, and the ?ederal 7eserve Bank of "ew York to purchase for account of the Banco de la 7acion Argentina in the Unitel States long bills eayable in the Argentine, all of course drawn on responsible drawees. ?or this purpose forward rates of discount for bills "to arrive" to be quoted as may be required The occasion for and amount of such nurchases to be deternined by the institution for which the bills are to be purchased. The object of this suggestion is to provide a nedium through which, -:henever necessary, such bills nay be dealt with pronptly and effectively at fair and reasonable rates, taking care, however, that such cperations shall not discourage t o establishment of intimate banking connections between the connercial tanks of your country and lf ours, and the opening of branches of commercial banks of one country in the other, whose business it is our desire to foster, eommenting unon the tentative proposals which we have nade, eve are -3- pleasedin the order maned above. to the following suggestions bearing on them to invite your attention Paragraph 7o0 (1) , The Federal eeserve Bank of 7ew York, would, no doubt, act in respect of these relationships not only for itself, bet for such of the other eleven of our eneeral reserve banks as night desire to join in the account, the eederal reserve banks are not authorized by law to allow interest on balances and do not do no even on the account of the United 3tatea eovernment, or of their member banes, we have sugeested that both accounts be free of interest at least at the outset- It is also suggested that the aocounts be free of charges and commissiono, except actual out-ofpocket expenses earagranh serve .'oet and beg to (4) 7e enclose herewith a copy of the Federal le- nvite eonr attention to sub-section (e) of section 1 which authorizes eederel ...eserve banks to rurchase lore tills parable in the rnited etates in dollars through their foreign agencies or correspondents, so long as such bills are drawn for commercial purposes, bear the obligations of two or nore responsible partieu eeclesive of days of grace and have not store than ninety clays to run, eo the extent that such purchases night be made by one institution for the other, as well as those nee under paragraph (3), we believe the bills should be indorsed without restriction by the in- stitution iskinr the purchase for account of the other so that the bank ectine as purchasing -agent for the other would be fully liable for their pgyment in case the acceptor fails to neer parent at naturitaa ''e have endeavored above to outline in a tentative and preliminary way the noesible scope of an arrangement for a close relationship between our respective institutions which we believe would be of value to the cornerce and finance of the two countries in stabilizing rates of exchange and in oremoting commercial and finencial intercourse In order farther to eromote these 'De- fects, we relieve it to be highly Oesireele that there shoule ee between us a -4- free eachange of views and Information with respect to general financial conditione and of commercial and banking credits in the two countries, In adO.ition to the popesals above made, we are f?.rmer pleased to inquire whether we night not be of considorable help to exporters of roods from the Argentine if we could :lake mutually satinfectory arrangements by which we could undertake to receive Feld coin or bars for you aad keep them earmarked and as your property. 7e have made Ruch arraneenente for another government bank to facilitate its merchants in exporting. We would undertake to saferuard this gold with the sane care as err am, without being liable, however, for acts of superior force or consequences of fire or burglary,. Please understand that we shall be extremely gratified to receive your comrlents on the tentative proposals we have made above and would appre- ciate a very full and free expression of your views as to any additional activities which you think would be mutually advantageous to have included in the proposed arrangements, or to be developed at a later time 70 do not need to assure yor of the very great interest which is felt in this country in all efforts to promote closer and 'lore intimate rela- tions in commercial and banking matters between your country and ours, and we hope that these ereliminary suggestions nay open the way to an arraneement whic:Iwill he ruttally orofitable and satisfactory. 7ith assurances of our esteem and regard, and looking forward to the favor of an early reply, we beg to remain, Faithfully yours, Governor, 7 tr_Z...4*43e* sr ?A /( ?//1 flifi . Ti.fit ek. 2/01/4f 3, el I etre 2>; I /,zz ) deA--c-7 c?6, 4-7 WZ,a7.474 1-7';'e - / iT-/e=r kbf a-e-er-e--c---c-r--- t7-4 z-cl" ,f"' /71-t- 1 2Z r Hotel Ritz, Paris,