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http://fraser.stlouisfed.org/ Les Gouverneurs, Federal Reserve Bank of St. Louis Sous Gouverneurs, Regents et Censeurs de la B nque de France Governors of the Bank of France, 1898-1945 Georges Pallain, 1859J-August, 1920 Georges Robineau, August, 1920 - June, 1926 Emile Moreau, June, 1926 - September, 1930 Clement Moret, September, 1930- January,1935 Jean Tannery, January, 1935 - June, 1936 Emile Labeyrie, June, 1936 - July, 1937 Pierre Fournier, July, 1937 - [November, 1940] Yves Breart de Boisanger, [November, 1940] - October, 1944 Emmanuel Monick, Octaaber, 1944- Sources: Banque de France, Compte Rendu,[generally in January for the preceding year] Compte Rendu, Jan., 1921, states that Georges Pallain was governor from 1898 to August, 1920. Compte Rendu, Jan.01927, states that Robineau was governor for zix years, from 1920. Compte Rendu, Jan.,1931 states that Moreau was governor from June,1926 to Sept.,1930. Compte Rendu, Jan.,1935 states that Moret was governor for 4 years from Sept.?5,1930 and Jean Tannery was the new governor by the decree of Jan. 4, 1935. Compte Rendu, Oct. 15, 1936 and Jan. 28, 1937, states that Tannery became governor January, 1935 and Labeyrie succeeded him June 6, 1936. Compte Rendu, Jan., 1938 states that Pierre Fournier became governor July 20, 1937 There was a decree on Compte Rendu, Mar. 27, 1941 has de Boisanger as governor. Nov. 24, 1940 which may have changed the gavernship. Compte Rendu, Jan., 1945, Emmanual Movick became governor, Oct. 7, 1944. E.H.Knowlton April 10, 1963 t,* 4 ,LIA do' 461.114""luillftwo 2rance, February 26,1916. Dear ::onsieur Fallain: With this letter I hand you a memorandum in respect of the matters we discussed, and which is not more in detail owing to the short time at my disposal to prepare it. If thee are any points in tic memorandum not entirely clear to you, I would be grateful for an opportunity to discuss them with you. Very truly yours, http://fraser.stlouisfed.org/ Federal Bank of St. Louis .t Reserve e S 64 in c)nformitz; with the statute shall consist possibly of a personal representative with necessary staff of clerks and assistants. such an agency, however, would not conduct a general banking business such as openinF credits or receiving deposits. It is therefore important to emphasize the language of the Act which uses the word "Agency" instead of "Branch". The motif for making the present investigation of the feasibility of appointing correspondents and opening bank accounts is in order to anticipate occurrences which may possibly arise after the war, and which might result in a derangei_ent of the exchanges to the disadvantage of the finaneiel position both in the United States and in those countries with which the United States has close coL_L:ercial relations. TLe experiences of the laet eighteen months demonstrate that abnormal exchnge r tes elid violent flucuation of exchenge are detrimental to the interest of both countries affected. Greater stability to the exch nges during tho period of readjustment following the conclusion of the war (end if circumatvnoes permit, possibly prior tereto,) would bo maintained if some part of the resources of the Federal Reserve Banks were emidoyed in the purchilse of commercial bills in foreign markets as authorized by Section 14 of the statute above referred to. The steps necesoary for the accomrlishment of this programme, accordini, to the writer's view would be: 1 In the case of France, to establish a close relationship -ith the Banque de nee for the object of mutual exchani7e of information. The arrangement of terms for the establishment of deposit, 3 or current account with the B:.nque de :re.nce. 3 The arrangement of terms for the establishment of similar accounts witi certain important ireneh banks and bankers to be selected. 4 The establishment of arrangeleents with banks or bankers to be selected, for the purchase of bills such as Federal deserve Banks are authorized to buy. 5 The establishment of arrangfeents for procuring information in respect of the credit and standing of the drawers, acceptors and endorsers of any bills purchased. Anticipating the development of even closer cce-mereial end bankin e. relations between Frence and the United States than have heretofore existed, and of a large commerce between these countries, and with the possibility of many uncertain factors arising as a consequence of the war, it has seemed desirable that plans for the accomplishment of the purposes above suggested should be perfected in the near future, and emphasis is ledd upon the desirability of close cooperation with the Banque de France. It is auggosted that the Federal Reserve Bank of New York may also be of service to the Banque de France in American affairs as the telationship developed. 8, 1916. :4 dear ::onsieur Pallain: . . Your very kind letter of April 17th was presented to me by M. de Neuflize i=ediately upon his arrival and I hasten to assure you of te good will with which we are prepared to receive him and to discuss wit.. him the various mat Lers with which he is intrust- by the Chamber of Commerce of Paris and the Bank of France. We have already outlined informally various suggestions for his consideration and th &se, I a7 sure from my knowledge of him will be pursued intelligently and diligently. . Since returning to New Y rk, it seems to me we have had con- vincing evidence of the necessity for developing the use of comarcial credits as one of the means of :stabilizing exchanges between France and the United States, and you may be sure that every effort to facilitate tne promotion of tee impurtant work which will to r. de euflize has undertaken. visit to Paris afforded me not only very great pleasure but, also, I trust laid tho foundation for future relationships which will be of mutual value to our respective institutions. Once more, permit me to express my warm appreciation of yo r many courtesies to me while 1 was in Paris. warm regards and good wishes, and believe me, Faithfully ye rs, !exisieur G. Pallain, The Bank of France, Paris, France., BS Jr/VT: Please accept my very 4 April 15th, 1916. 7,:y dear :..onsieur Pallain: 71y visit in England was unexpectedly prolonged, so that I only reached home 7esterday and hasten now to advise you of my sa:A arrival and once more thank you for your many courtesies to me while I was in Paris. :.:essa7,es received on tie steamer ocauainted me with the fact that a meeting had been deferred pending my return and T am now obliged to be in 7as);ington for some time and, consequently, will be unable to write you at length, Which I had hoped to do, until I return again to 'Jew York. Will you not, however, in the meantime accept this expre::sion of my warm regards and convey the some to your good associates? ith best wishes for success in your many responsibilities, I beg to remain, dear :onsieur Pallain, ::ost cordially yours, ::onsieur Georges Pallain, anque de "Prhrle., Paris, France BS Jr/VGI BENJAMIN STRONG Estes Park, Colorado. November 3, 1916. Dear Sir: At the request of Governor Strong, who is, as you know, absent from the bank for rest and reouperation for a few months, we are forwarding to you by mail books, pamphlets, etc., in connection with. and explaining the operation of the Federal Reserve Banking System; also of the clearing house and chock collection methods at ?resent bcin; employed in the United States. This data comprises the following: A copy of the Federal Reserve Banking Act of the United States with the recent amendments. A copy of the last edition of the regulations issued by the Nederal Reserve Board (the official authority in directing the affairs of the Federal Reserve Banking System). Cordes of circulars and forms used in connection with our discounts and collections. A statement of the operation of the Gold Settlement Fund an6 the forms used in connection therewith by the twelve Federal reserve banks. A copy of the constitution, by-laws and rules of the New York Clearing House Association. A copy of a book on the methods and oferation of clearing houses by James G. Cannon. A cony of a book on clearing houses, especially the operation of the New York Clearing Rouse, by Jerome Thralls. Statistics relating to the number of checks handled by (a) (b) (c) The New York Clearing House Association, The Federal Reserve Bank of New York, The twelve reserve banks in the system. #2 L. Georges Pallain, 11/3/16. A description of the operation of the Transit Department Denver, Col!? redo, November '1...4th, 1916. ti onsieur Pallain: Dear absence from Hew York which will r bably continue for the rest of this linter, and the unavoidable for exchanging views with my associatesW-iiifrrily deferred a reply to your kind 1,r9Ar this time. elny required V'eneceseari- August 25 h until / Your remarks in regar ods now being employed t for d:veloping the use of ,he as the lamphlets which TO rend with a great deal e of bank notes, as well were g interest enough to send me have been ) Of course, talccess in your ( - efforts to introduAw t)44\uee_o_L-,14 checks will necessaril.) re, /' suit in a con ...rable enlargement of bank deposit liabilities e erne requ 3ements on the note account, will he and reduced partly offset the c)hoity for increased reserves ageinat deposits. I apprehend also that difficulties will be encountered in promoting the use of chocks, until a system for th,:ir collection throu,-,11 clearing houses, etc., and for the settlement of resulting balances, has hrid considerable development. reliev- ing that literature bearing on these matters may prove of service in your new program, I am taking the liberty of having a collection sent to you, some of which you have already seen. To tonsieur G. Pallain. Nov. 14, 1916. Cur own plans for dcveloping a nation -wine system of check clearance are progressing lost favorably as will be indicated by these documents. rurther questions may be suggested after reading the papers and I hope you will not hesitate to send them to se and I will soe that cem;dete answers are promptly prepared. It we!, a pleasure to learn of oreieur de Reufliee. He seems to h favorable reception in New York and th discussed his plans all exereseed continu success of met with n f .ndly and a gentlemen wi eelom I llingness to c perate GO far as they were able. The further sugg your letter have been the subject of our :1,o ation and corsider- able correspondence. was in Paris, plans for co- operation between institutions must natural- 1: await their fullest d until after the distractions and relvdonsibilities o to estab specific shing new mon no longer prove an obstacle rations. The suggeetion for a action aggregating, say, $20,000,000, preliminary to a more gene by some of my nding must await a fine]. consideration cietes in 'sashington of the whole subject of our foreign role lone, but pen ling their decision, I am writing to point out one two difficulties in adopting exactly the nlan you suggest which I fear cannot be overcome, at any rate, just now. The puria;ase in this country of on foreign bills domiciled in Paris and London, has always been a profitable department of the business of American bankers. The Federal Reserve l'ov. 14, 1916. olnsieur 0. Pallain. 1-4) Fistem, no you know, is a co-operative orgnmization of twelve reowned by the member banks 1,nd which derive serve bunks rrisich their resources ron deposits of reservceby those b- rest on their accounts with us, whereas, the member low no i sits all psy interest auks who contribute our calit11 and our d f, therefore, the to their depositors, averaging possibly 2 ith their funds iederal Reserve B-,nks should enter t e market which are obtained witnout interes cost, in co ition with their own member banks whose at them *4 der this department of the b able. 'h-- could not soon rise to friclion wn would give ould ren- ur on membere unprofitan our transactions &genius. That is one of tee bly confine their pur- reasons why the res chases of foreign r of policy, to those which have already reac and after they have been accepted by the d those with documents ni-. county tech their acceptance. You alno und ubtedly realise the necessity for an understa your i ing tution an serve banks ions which ce-Ay he undertaken betwePn s shall be upon a geld basis. The re- custodians of the gold reserves of the na- tional banks of the United States and the enployment of their funds in foreign markets can only be undertaken under such arrangements as will ensure liquidation of accounts is gold when a reversul of exchange rates or other causes, necessitate ..4_ Nov. 14, 1916. =,:oneieur 0. Pellain. All the withdrawal of these credits. I believe that your proposal for guarantees of rates of exchange c:.n be avoided by a more general understanding between the two institutions that balances carried by one with the other, or investments movie by one throL01 the agency of the other, will always be liquidated by shipment of gold or, at any rate, by earmarking gold the property of the creditor instituti,r. tent can be effected and the necescar it aside as If such n authorities are from our directors and the Federal Reserve Board, our how such an account should b could purchas ;, arrant -;e - btained Jews of follows: xchange as we might deterine to be prudent f is under present conditions, remittin cable transfer. This amount, less a rca you in current account, bills of the highest g not of financial origi Federal rve Act. ceods would b ion to be carried with ask you to invest for us in or comrerciil purposes and o comply with Section 14 of the s ills natured and wore paid, the proested and this account, barring unex- pected develo s necessitating its conclusion, would con- tinue until exc -0 on Paris turned against this country and possibly eeipmen of fold to :'aria or London became possible. ilen such conditions arose, the account, of course, would heve to be liquidated in whole or in part and the Federal Reserve Bank of New York could do so by selling checks on the Pen- of 446 To ow. 14, 1916. :onsieur 1. Pallain. :ranee no long as exchange on Paris as Lt a premium and until All the account :'as exhausted. Also, if exchange became adveroe to this country and continued in that situation for any length of time, we would naturally entertain suggestions from the of France for con- ducting the account current and for purcha of bills in CAA market upon terms identical to tho e which applied to our ac,:ount and to our investments in ?aria, we u account in the same obligation to liqui had undertaken with us in that you 4stunce. 4 e taking with you uctance to eatabli'h an un- can underata limited general understanding his character under present in turn would no doubt conditions 'Ild'sfol expect us, to p wanes by exchange of cables, upon the anount willing to receive for inse in each instance it right vest r-lont f on ti involv living or = ,g to the full extent of the ucco One udvant rattle han a guar in the p long au the rrit of 41-1 understanding of this character, ow.: rate of exchange, would probably lie with which the account would be continued so of exchange and rate:: of interest muds it profitable for one institution to continue the account on the books of the other. A continuance of our account with you, if conditions justified, until the exchanges returned to 70 onsieur G. Pallain. Nov. 14, 1916. -7%0 onsieur g. Pallain. Lov. 14, 1916. he appointment of correspondents in foreign countries, however, as you will observe by the floction of the Act referred to, requires the consent of the Federn.1 Reserve Board. Deter- mination of the policy of the Federal Reserve System in opening accounts in Europe, therefore, rents finally with the Federal Reserve Board and while the nntter is no sideration, they hevr not as yet give , a their deci n. s decision bef negotiations must, of course, await for conOur any- thing can be concluded. Please be as ured t preciate the further evide our letter of your desire to promote the osta ze relationship be- tween our respective aim be nstit n the interest of the you is, according to ou commerce and finance of b May I warmest c. ntries. me most kindly to your asso- ask ye ciates end to you, my eur Pallain, I beg to convey my e.. rds, and rema y yours, 'fonsieur 1eorges Ban- of France, Paris, France. BS/VCM allain, to aseure WESTE47,41NA ONION TEL AM E F,ra, 260 WESTERN UNION IR\ '47KINS. NEWCOMB CARLTON. PRESIDENT V16;6PREZIDILNT TIME FILED BELVIDERE BROOKS, VICEPRIMIDENT CHECK D the following Telegram, subject to the terms on back hereof, which are hereby agreed to Denvev, Colorado, Januar...), 2, 191¢. EL24-2221Ar"---Bank of Prance, Paris, 111-1.nce. nanj thanks for your good wishes lohieh are heartily reciprocated. I await your letter with interest :Ind will rapid promptly with reiri to our nesotlations and respecting recent announcemont of possible arransements in London. Stop. Benjamin ::trout;. Ben:. Strong, 4100 Montviow Blvd., City. decz,_ Q/. /9/1y, -.4114. 24.4.-L WSTE E , -4-n,.... Le N1 UNION Form 2689 WESTERN UNION DAY GEORGE W. E. ATKINS, VICE-PRESIDENT RECEIVER'S No. 114ZIL-4 TER NEWCOMB CARLTON. PRESIDENT TIME. FILED BELVIDERE BROOKS VICE-PRESIDENT CHECi: SEND the following Day Letter, subject to the terms on back hereof, which are hereby agreed to G. :)allain, CABLARALI. 7onvor, Colorado, ebruarj 15, 1317. o7 'ranee, 'saris, 'ranee. anlyinc; your cablo fifteonth your lottor tTiont7 sovonth Decombor has boon rocoivod aftor sore delay stun. Havo nroparod subaestion for reply ihich In no-3 boinG considorod in NOW York. track; Chg. Benj. Strom;, 41.30 Lontview Blvd., Denver, Colo. Form 2903 e Filed Number of Words WEST CAB UNION RAM THEO.N.VAIL., PRESIDENT following Cablegram, subject to the terms ck hereof, which are hereby agreed to ;. CLASS OF SERVICE DESIRED Fug Rate Half Rate Deferred Cable Letter Week End Letter Patrons should mark an X opposite the class of service desired; otherwise FULL RATES will he charged SEE BACK OF THIS BLANK New York, February 21, 1917. -allain, Governor, Bank of France, Paris, France. Your letter December twenty-seventh received stop Before sending reply outlining our final and lefinite :7,roposals we propose to make application to Federal Reserve Board for its consent to our anointing Bank of France our agent and correspondent stop If consent is granted announcement would be published in newspapers similar to that made in December concerning appointment of Bank of England stop Will it be agreeable to you to have such announcement-made prior to our arriving at « definite understanding of actual terms stop Please reply Federal Reserve Bark New York Benjamin Strong ti Mge. Fed. Res. Bank, Equitable Building Mist. 34 U. Cablegram 6!00 m- FEDERAL RESERVE BANK OF NEW YORK CONFIRMATION OF TELEGRAM We have today telegraphed you as follows: New York, ,A,Idr:z. -11ain, Governor, Bank of r'ranee, Paris, Fral,ce Your letter December twenty seventh received stop Before sending reply our final and definite prelosals we irocce to make aiplication to Feder Board for its consent to our appointing Bank of !ranee our agent and cor stop If eonsent is grant-d announcement thereof without stating propose would be made promAly in newspapers similar to announcement made of aut appoint Bank of ::ngland atop 11 it be agreealae to you to have such made prior to our arriving at a definite understanding of actual terms reply Federal Reserve Bank Toxic -unSvamin :Arena 7(3. Fed. Res. &Im- itable Building MISC. 34 FEDERAL RESERVE BANK of NEW YORK CONFIRMATION OF TELEGRAM We have today telegraphed you as follows : Nom Yor%, ieb. 27, 1 Georges Pallain, Governor, Sank of France, ?aria, Fr.inle. Irestly to recoil% your message twoultisesond. .top. re h frog rederul ReserveRomrd authority to Elp.,loint Rank of France our Their uctior covers only formal authority ti.. 404)oint loaning all tern* to bo zgresd ullon between us. stop. views Rod oroosal qgreltAnnt ms V.rward by nal. probably this week. `top. This bank mnnouncnmont until terms hive been agreed upon between us but nes will =flaunt* in norspapers March first ttat our 41:3plication for anpoint you as agent hen boon approved and will quote paragraph R 7ourtoon of 'Ioderal Res-rvo Aot Aneoeting buoiree permitted to suer agorcy and will *tato that other i'edoral roverve banks.su.7 throujh us in :agency relationship when *established. S-2 Trams, ilaftwelsw Mf 44 Denver, Colorado, itch. 3, 1917. First (rough.) copy of the letter and memorandum sent to Lonsieur 2allain. 1. The following points confidentially and tentatively agreed upon for submission and ratification by the respective institutions with a view to being-. put into operation as soon as the necessary authorizations are made. 2. The Federal Reserve Bank of New York to act for itself and for such of the other eleven(11) Federal Reserve Banks as join the account. 3. The Federal Reserve Bank of New Ycrk to maintain a current account with the Bank of France, and the Bank of France to maintain a similar account with the Federal Reserve Bank of New York, the balances carried in such accounts to be subject to withdrawal by check ana to be free of interest. 4. The Bank of France to purchase as and when so requested prime commercial bills for account of the Federal Reserve Bank of New York for the payment of which at maturity the Bank of France will be responsible, such bills to be of a character to comply with paragraph "F", Sectin 14 of the Federal Reserve Act, which requires that they shall arise out of actual commercial transactions, have no more than ninety (90) days to run exclusive of days -04e` (09i: dev, of graoe and bear the signature of two or more responsible 2arties. The Federal Reserve Bank of New York likewise to purchase prime commoroial bir.e of a similar nature for the Bank of France, and to be responsible for their payment at maturity. such bills to be at the absolute disposal of the owner in either tease. 5. Bills purchased by the Bank of France it the Federal Reserve Bank of New York to be of a character eligible for discount at the Bank of France, and to consist, so far as possible, of those tearing the names of American drawers, or endorsers, so long as tLis requirement 'ices not involve the acceptexa_ott a ance of other than prime bills. ik,siTiler policy to be pursued A by the Federal Reserve Bank of New York in purchasing bills for the Bank of France, should it be cossible to do so. 6. The accounts respectively, to be kept free of cherges and commissions- except as regards actual out -of- pocket expenses. 7. In case, as the result of change in custom or in the lae, the Bank of France and the Federal Reserve sank of New York should adopt the practice of allowing intereet on current accounts, the balances carried shall be put on an interest basis. 8. The debtor institttion, at the request of the oreditcr institution, to set aside and ear-mark gold on a bullion basis representing balances due, hen.- a9 elAAgliinge-wilIonit-$tllcw-ithdrawals without abee-to the creakto.r.izieTtittuttem, and upon like request, to ship gold in settlement of balances due all as set out belcw. In ..Crt VI 0,0.7\cl the case of gold ear-marked, the same to be separately 0 gE tonot?,...t lr of co-t titettitc a q tef Ave d to fo n atereultd !Kai- 0/tea.) afivitxtle.t.9ke areLe tc te-» 70 1.:=^ Cr,. )4% #e ta,,, 4r Adrelot c r t;u2iFr 40.; r ti'voilietrip7, lt.'s tA 7 Oct et( ttlavz f pet cctriti-G. am et 4L ftmut( Al -.4.;,,,,,,441-144a+o-frt44.444 evratra4:1 packed and stored and clearly identified as to ownership. 9. 11-tf.*Ierkri,_ Shipments of gold by the debtor institution 6.671" P646$6. aL to the creditor institution on the latter's request as in Ftei. 1440i paragraph (S) to be at the cost and risk of the creditor 4,f)c4 art 64..) 61;;; inst itut ice. eg There gold is shipped by one institution 10. iegt fibs 03.4. to the other for the purese of making exchan,ge, however, th. yee,44.4V /1/4 e , and not for the purpose of settling balances, such shipment to be at the risk ct 6;w:A and expense of the shipping in- stitution. gf The method to be pursued in ear -marking 11. and shipping gold by one institution for the other to be - in detail as follows: (a) The Bai k gf France to ear-mark and set aside . r : refined -old bars, for the Federal Reserve Bank of New York wat-1,0441; 4o the e A cibtk (7)1)\c,, 310 7 per kilograff of` gold A ' illea-e-trefitate-f-iete or (b) When refined gold bare are not available (f) the Ra:-.k of France to ear-mark and set asidejnited States gold coins for account of the Federal Reserve Bank of New pro Ik irettA 4/ York at their bullion value, at tAle rate A AL' f" toir 314 i'7),L4.1,-)iti)/"fr 11.12:a qtae?444'4. per kilogram , 17 or 4-04----T4e-neak01-gr....24-ter---ewr-rfte-rk-late.-;--se t (2-` ag.irtie French gold coin at its bullion value at tie rate eiq4.0"r. lb Kelso (6) trgt.w.t.,:. per kilogram/a( Au eickeri. Gold bars or gold coin so ear-marked but not shipped, to be taken by the rank of France (if returned et 14: t 130;4 to the credit of the Nev York Bank) at the same values at which they were ear-marked in the first instance. (k) It should be understood that the Federal Reserve Bank of New Yerk cannot require the Bank of France to ear-mark United States gold coins at bullion value in order to import them and realize the profit between the bullion value and face value of United States coin. The right to determine in the event of shipment whether United States coins shall be shipped or not to rest with the Bank of France. United States gold coins which are abraided below the United States limit of tolerance of one-half of one per cent net to be ear-marked or shipped if other gold or coin is available. 12. The Federal Reserve Bank of New York to ear-mark and set aside cold for the Bank of France and charge its account on the following bases: (a) Refined gold bars at the rate of $18.604651 per United States standard ounce of gold nine-tenths fine, plus the assay office charge of 50/' per $1,000 in value, or (b) French gold coins at their bullion value of ,fF18.604651 for each ounce of gold of the United States standard, nineetenths fine, or (c) Eagles at their bullion value of $18.604651 (d) Geld bare, or gold coin, so ear-marked but per ounce. not shipped, to be taken by the Federal Reserve Bank (if returned to the credit of the Rank of France) at the same 5 value at which they were ear-marked in the first instance, excluding the Assay Office charge above mentioned which will be borne by the Bank of France. (If gold bare are returned, they may be aubjedt to a further Assay Oflice charge for remelting amounting to one dollar per thousand The Federal Reserve ounces, which is the existing charge. Bank of New York, however, will endeavor to have this charge abrogated by the Assay Office and if succeeaful will immediately notify the Bank of France). (e) It should be understood that the Bank of France cannot require the Federal Reserve Bank of New York to ear-mark French gold coins at bullion value in order to import them and realize the profit between the bus :lion value and face value of French coin. The right to determine, in the event of shipment, whether French coins shall be shipped cr not tc rest with the Federal Reserve Bank of 'r:ew York. French gold coins which are abraided below the French limit of tolerance not to be shipped if otner gold or gold coin is available. 13. Gold bars ear-marked or shipped by either institution to the other must be suitable for coinage pur- poses, alloy to be copper, and an allowance made for any variations in gold contents above or below the standards specified above. 14. The ear-marking and shipment of the gold 4 L7iA41, 14.,70.tit4r. fo 4 0-4(th ooins of any other nation to be undertaken upon the basis *601 of the value of the fine gold c-intained in such cL,ina, with deduction of an allowance to cover the cost of conversion into gold bars of French or United Statea mint standard respectively. 15. In general, the terms to apply to all trans- actions in gold to be such that the effect of the arrangements will be to make all shipments of gold between the two institutions upon exactly equl terms as to each. 16. The amount of balances which one institution is willing to receive from the other or the amount of bills which one institution is willing to purchase for the other to be arranged in each instance in advance by exchange of letters or cables. 17. It is expected that information will be exchanged by correspondence respecting credit matters and financial conditions. 18. It is proposed that the Federal Reserve Bank of Fe% Y;rk will endeavor to promptly conclude an arranoement of similar character with the Bank of England and that the terms of the understanding between all three Institutions shall be known to each. 19. The approval of the French Government to be furnished to the Federal Reserve Bank of New York insofar as such approval is necessary to enable the Bank of France to comply with the terms of this memorandum with respect to shipments of gold. 20. The arrangement to be subject to cancel- n7 lation by either institution in whole or in part except as to transactions in process, on notice by letter or cable, it being understood that any unliquidated balance either way will be settled in gold, if desired, under the terms of the understanding. 21. No announcement directly or indirectly to be made regarding the contents of this memorandum, which is confidential between the institutions concerned, without the explicit consent of both institutions. The -:: lia- nouncement of the appointment of the Bank of France as correspondent and agent of the Federal Reserve Bank of New York only to be made when the consent of the Bank of France has,.been obtained and in language which will not diaZIose the contents of thin -memorandum. rt./ 141° Monsieur G. Pallain, tdtk Governor of The Bank ot France,. . Paris, France. Dear Monsieur Pallain: After the usual delay in the mails, I have received your most kind letter of December 27th, and it has been read with great interest both by my associates and by myself. As I explained to you when) in Paris the various Cilt.tallri:Ali formalities involved in cannaa.t.tan.--wItla the appointment A of our correspondents abroad have necessitated the exercise of patience and caused considerable delay. In this connection I think it desirable to mention that the anncuncement made by the Federal Reserve Board regarding our negotiations with the Bank of England was merely to the effect that the Board had given its consent to our making the appointment and the -8144.110144X4441A was published some- what in advance of the final arrangement of all details. In order that the procOdure in these matters may be understood, I suggest your reading paragraph "Eft of Section 14, of the Federal Reserve Act. In view of the announcement respecting the appointment of the Bank of England, it seemed desirable that application for like consent as to the Bank of France be Se made as promptly as possible, a my associates have cabled you as per confirmation inclosed herewith to which Our application has been favorably acted upon and the necessary consent Ittrte ha s Abe en given by the Federal Reserve Board, http://fraser.stlouisfed.org/ eLtA52,10 e i2 ti471 03P-, Federal Reserve Bank of St. Louis a.4 ahrtAu- *Ito S "2" Yra we are now woia444.1ill reply (7.444AkaAti geotp 6(1Apj A The comments contained in your letter are so completely in accord with our own views of the terms which should govern the relationsof our respective institutions, that I am now taking the liberty of reducing what I understandtbADe the substance and intention of our conversktions and correspondence to the form of a memorandum in which I have endeavored to cover all the WC( aid/ toil 11111W,4 MA) principal points to be dealt with. Your4+3 appreciatt44r the importance of uniformity in the ch-i.racter of the relations which the Federal Reserve Bank of New York will establish with all of its principal correspondents IX att1 the memorandum inclosed 44:43-pe4e-ii* embodies the same principles which we hope to apply in our other relationships. With regard to the volume of transactions to be undertaken by our respective institutions, I find ig difficult at the present time, to give any indications. Fixfact The Federal Reserve Bank of New York w act not only in its own behalf, but also in behalf of such of the other eleven Federal Reserve Banks as desire to participate in the account. Under present conditions, I otoctd consider it unlikely that at the outset so considerable an investment in bills as that which you name, say $30,000,000 or $40,000,000 would be feasible, and the extent to which the account might develop would depend upon many indefinite conditions such as rates of exchanFe, ;1'0 Paragraph 11 of the memorandum states our understanding of the value at which gold is taken for coinage purnoses by the French Lint and we further understand that French coins consist of 900 parts fine gold and 100 parts copper alloy, which is the same standard as American gold coins. If this is not correct, the memorandum should be changed to conform to the French mint standard. In paragraph 12 of the agreement reference is made to a charge of D 11010mQ rmirgle,, 50¢ per c-,;1000 in value imposed by the United States Assay Office or refined, A gold bars and, likewise, to a charge of ,1.00 per 1000 ounces imposed by the United States Assay Office for remelting gold which is deposited 4.41-44r 01-10-7 to be exchanged for gold coin or gold certificates. iego- tiations between the Federal Reserve Bank of New York and the Treasury Department of the United States are noa being conducted in an effort to ob- tain a modification of these charges and you may regard the reservations contained in paragraph 12 on this subject as tentative and dependent upon the outcome of the negotiations referred to. S a3 relative rates of discount in your market and ours, and of course, political and other developments which just now seem to be exceedingly uncertain. I am obliged to ask for information on one point which -1051k.971aet attar 4".."..."1".. as being covered only tentatively in --r egftod sal the memorandum inclosed. It is our understandini that the French Government has established a prohibition either by statute or decree, against any exportations of gold, ex- cepting those which may be made by the Bank of France with the Government's consent. It would, therefore, if our skirt- -70A is correct, require the assent of your government to A. the proposed arrangement, which contemplates settlement of the account by exportations of gold under certain contingencies, unless indeed, the Bank of France is quite free to make such exportations without governmental assent being required. According to my view, it is important that the principles applying to our relations should be set out and understood as promptly as possible; it being expected, however, that future experience will assist in furnishing a guide to the development and enlargement of the scope of our transaotions. The most important principle, of course, is the reciprocal character of the arrangement by which the transactions to be conducted and the obliTationa to be assumed by each institution for and to the other shall be identical on both sides. With this principle governing our operations, I am confident that the relation ship will prove to be one of great value to the commerce - 4 t-tel and finance of the VOW countries. Asking the favor of a cable acknowledgment of this letter and of the inclosure; sad assuring you of my deep appreciation of your letter and of your hearty cooperation and with warmest expressions of my esteem, bey to remain Faithfully yours, I copy FEDERAL RESERVE BANK 0F NEW YORK New York City, Larch 5, 1917. REGISM1ED. Dear Lionsieur Pallain: After the usual delay in the mails, I have received with satisfaction your most kind letter of December 27th, and it has been read with great interest both by my associates and by myself. As I explained to you when in Paris, the various formalities involved in arranging for the appointment of our correspondents abroad have necessitated the exercise of patience and caused considerable delay. In this connection I think it desirable to mention that the announcement made by the Federal Reserve Board regarding our negotiations with the Bank of England was merely to the effect that the Board had given its consent to our making the appointment and the auhtorization was published somewhat in advance of the final arrangement of all details. In order that the procedure in these matters may be understood, I suggest your reading Paragraph (e) of Section 14 of the Federal Reserve Act. In view of the announcement respecting the appointment of the Bank of England, it seemed desirable that application for like consent as to the Bank of France be made as promptly as possible, so my associates have cabled you as per confirmation enclosed herewith, to which we now have your reply as per copy also enclosed. Our application has been favorably acted upon and the necessary consent has now been given by the Federal Reserve Board, as advised to you by cable, of which copy is also enclosed. develop would depend upon many indefinite conditions such as rates of exFEDERAL RESERVE BANK OF NEW YORK change, relative rates of discount in your market and ours, and, of course, political and other developments which just now seem to be exceedingly uncertain. I am obliged to ask for information on one point which you may regard as being covered only tentatively in the memorandum enclosed. It is our understanding that the French Government has established a prohibition, either by statute or decree, against any exportations of gold, ex- FEDERAL RESERVE BANK OF NEW YORK 3. Lonaieur Pallain /5/14t, 46, copy cepting those which may be made by the Bank of France with the Government's 0 rA, consent. It would, therefore, if our information is correct, require the assent of your Government to the proposed arrangement, which contemplates settlement of the account by exportation of gold under certain contingencies, unless indeed, the Bank of France is quite free to make such exportations without governmental assent being required. Paragraph 11 of the memorandum states our understanding of the value at which gold is taken for coinage purposes by the French Lint and we further understand that French coins consist of nine hundred (900) parts fine gold and one hundred (100) parts copper alloy, which is the same standard as American gold coins. If this is not correct, the memo- randum should be changed to conform to the French Lint standard. In paragraph 12 of the agreement reference is made to a charge of fifty cents (50f) per thousand dollars (1000) in value imposed by the United States Assay Office for furnishing refined gold bars and, likewise, to a charge of one dollar(1.00) per thousand (1000) ounces imposed by the United States Assay Office for remelting gold which is deposited in order to be exchange.L for gold coin or gold certificates. Negotiations between the Federal Reserve Bank of New York and the Treasury Department of the United States are now being conducted in an effort to obtain a modification of these charges and you may regard the reservations contained in paragraph 12 on this subject as tentative and dependent upon the outcome of the negotiations referred to. According to my view, it is important that the principles applying to our relations should be sot out and understood as promptly as possible; it being expected, however, that future experience will assist in furnish, FEDERAL RESERVE BANK OF NEW YORK 4. Lonsieur Pallain. 3/5/17, Jo* ing a guide to the development and enlargement of the scope of our transactions. The most important principle, of course, is the reciprocal character of the arrangement by which the transactions to be conducteLL and the obligations to be assumed by each institution for and to the other shall be identical on both sides. -,;ith this principle governing our operations, I am confident that the relationship will prove to be one of great value to the commerce and finance of the citizens of our countries. Asking the favor of a cable acknowleJ.gment of this letter and of the enclosure, pending formal reply; also assuring you of my deep appreciation of your letter and of your hearty cooperation and with warmest expressions of my esteem, I beg to remain, Faithfully yours, Governor. monsieur GeorgesPallain, Governor, The Banque de Franco, Paris, France. BS/CC -11cs. P.3. We are advised that the French limit of tolerance upon abraded French coins is 1/10 of 1% for one hundred franc pieces and fifty franc pieces, 2/10 of Ve for twenty franc pieces and ten franc nieces, and 3/10 of 1% for five franc pieces. If our advices are incorrect, paragraph 12 (e) should be changed in order to include a correct statement of what the limit of tolerance is. C EAT: AL. 11411 rtunria :'LY T) .?}I ,V . B .1-ii-LATI I trID 1i .7 C--)N.1 'a 57j r2,z, T.) :IL BAB:. ',MANCE. 'ho following; points oonfidentiihlly and ten 1. upon for submission and ratification 1)4 (;lie respective 'rely agreed s itutions, oesarj author- with a now to boind put into isations are medo. 2. The k to act for itself and fodoral :;ewe for each of the other elov count. York to maintain a current he :ederal 3. a000unt wit; 1 and the Bank of the Bank of ranco to maintain a rve Bonk of New lork, the balances similar account with t foot to withdrawal by Oheor and to be carriod in such 800 Lowest. fro() 4. e to purchase as and when so requestod prime commercial bi for account of the Federal 2.esorvo Sank of New York, for the payment of idh at maturit7 the Bank of ranee will be responsible, such bills to b of a character to comply with paragraph (o) of Section 14 of the :Odoral Reserve Aot which requires that they shall ariso out of actual commeroial transactions, have no ED1'0 than ninety (JO) days to run, exclusive of days of grace, ankI boar the si.jnature of two or more rosponsi- blo parties. :he Federal _osorve ::tonic of ;yew Yor4 likewise to purchase prim commercial bills of a similar nature for the Bank of ranco, and to http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis be resnonsible -)age Two. for their payment at eaturity. Such bills to be at the age 7hroo. institution On Lai: latter's request as i cost and riac of the creditor institutio ..bore gold is Shipped by on 10. puroose of making exchange, however, and balances, sun shipment to be at the ris tution. method to be pursued in 11. one institution for the other to be in (a) r:11(.. Barak of "ranee to oa bars nano- tenths fine, for t :ranch Lint rate, Aida puro gold, or (b) then to er-mar-c and set (1) United Federal Resorve rate e,uivalont pure gold, or - (2) valent to the (o) gold co York a fra at i franca 3 .r gold coin, to be taken the 3an4 of Franco (if Yorz Bank) he SWO values at which instance. (d) it should b- understood tha .New York cannot require the Ban.: of ., .old coins at bullion value in ordor t orofit bot'oen the bullion value and f ?age our. ?age Five. 0 te :'edoral reserve Bank of New 'tor: to ear -::ter:; .renc gold coins at bullion value la order to import them ann realize tie :wont batman tho bullion value an41 face value of French coin. right to dotonntno, in the event of shipment, Whether 'reach coins shall be shipped or not to rest with the Federal .::esorve Beak Of N French gold coins office) "earmarked or" Which are abredod below the French 1 L of tole t to be/anipped If other gold or gold ooin is avail 13. Gold bars ear-marked or shi by oithor other meet be suitable for oo tution to the coppor, and an allowance uado for any vaxi tents WO or bolos the standards soecifiod above. 14. gold coins of any other ear-r nation to be undertak of the value of the fine an allowance to cover t United States :Ant s t the eff its of gold ontainod in such coin, with deduction of oral= into gold bare of French or Lively. In general, to be such for the other upon the basis to apply to all transactions in gold, of the arranger:ants will be to mao.se all ship- Limon the two institutions upon exactly equal terms as to each. 16. Th t of balancos which one institution is willing to receive from the other, or the amount of bills which ono institution is willing to ourchaso for the other to be arranged io each instance it vane° by oxchange of loLters or cables. 17. It is oxpeoted that inforoation will be exchanged by corr3s- poudanco respecting credit matters and financial conditions. ,:eservo 3ank of 3aw York it is proposed that L.he :edema arra:140cent of similar charactor 'will endeavor to promptly conclude an of the understandina between of nzland end that the tarns 18. 4410;th the Ban::: known to eseb. all three institutions shall be Jovernmen t t The sonroval of the :'ranch 19. insofar as moan Todoral -leserve ;;ask of Now York be furnished to the val is necessary to is memorandum wi =able the Bank of i.Vonce to oamply 4ith res7)oct to shipments of gold. Ile arrangement to 20. cancellation Ir.; either insti- xtneactions in procese, on notice Whole or in part, tution i by letter or cable, it bein and way will be settled in t any unliuidated balance either er the terms of the undoretand- indirectly, to be made rejardin6; the contente of this s confidential between the inatitu- consent of both inslatutions. _tides co Ifew York Ci i(21°u) Arch 5, 191 mver, Colorado, _rch 7, 1917. Lear '-oasieur Pallain: been dul Your note of .:ebruary 23d has and tine you have been advised by cable = vod and in the mean- er of the e arrival of 27th la your wmmanication of December 1 am glad to confirm L. Delieufli, the past few health, :chic h has been most rap nov: beginning to look fo report of im o ice before many o the a return months elapse. rds which 1 be With most cord' al ou will also convey to your associates, 1 am, Sincerely yours, Georges lionsiPal eGovorno Banque e Ivranse, 2arls, CC ent in my the, and I am Federal Reserve Bank of New York. leorges which Pallain. Are deeply touched by the sentiments of cordial sympathy telegram brings us. It is with pride that we see the great Am, Democracy fighting on our side in order to assure the coming tri of the cause of the people's right and of their liberty. 7-16 175 II COMPAGNIE FRANCAISE DES CABLES TELEGRAPHIQUES PARIS. NEW YORK. (.) ROYAL EXCHANGE, E. C. 2 MINCING LANE. 1624BOULEVARD MONTMARTRE. 63 RUE VIVIENNE. NEW BRIDGE AA E. C. BALTIC, MERCANTILE AND 94 SOUTHWARA STLONDON. S. E. SHIPP' G EXCHANGE. E. C. 36 VICTORIA , WE MINSTER. TaLernoft. 441 402 M.A. Taummene. 2000 OM... GER BUILDING. PARK 7513,10AD ST.. ACER STREET. 11 . 1 WORTH STREET. . . Be! BROADWAY. 65 FIFTH AVENUE. 261 FIFTH AVENUE. . TaLsow.eros. 12.111Aw.. . Tin.sro...2 Tal.E.90 *94 eras. num... 207 lilAsuNie i7 ORLEANS, M HAVRE: BREST: ANTWER .- 1 1917 1kESTERNAGCN AG ST. HSNORTHLASALLESTREET. qmicaco,nol, UK 30- 2 CHILOU. Ut DE CHATEAU. Y, 14 RUE VENUS. ICUEL0111. 1 EDWARD C. SWEENEY. ---s"'" Tim ,1 1:14 I The following MESSAGE is received via FRENCH TEI, GRAPH CAREX, subject to the d and agreed to. and conditions printed on the back hereof, which are ra Y F 772 PARIS 53 FEDERAL RESERVE BANK OF NY SOVES PROFONDEMENT TOUCHES PAR LfS SENT/MENTS Dbil CORDIALS SYMPATHIE *'-gjlig:;'NOUS APPORTE VOTRE TELEGRAMNE STOP C EST AVEC FIERTE QUE NOUS, rt-:;c7._IvED '7.:110-;§$ A NOS COBS POUR LA GRANDE DEMOCRATIE AMERICAINE COMBATTRE ACCOUNTANT t:IASPRTRR LE TRIOMPHE PROCHATN DE LA CAUSE DU DROIT DES PET4PLES ET DE, P LELTA:ItIBERTE GEqRGES PALLAIN P .'7714tit, 15 6 F. R. S. N.Y. seeToreduce the risk of errors or delays, please file any agli7rVtitis message at one of the Comuaany's own offices.Messengers may be summoned by Telephone for Cablegrams FREE OF CIIARGE. IRED Form WESTER essage WESTERN UNION Letter s should mark an X oppohe class of service d sired; HERWISE THE TELEGRAM TRANSMITTED AS A DAY MESSAGE. TEL UNION ...trie NEWCOMB CARLTON AM PRESIDENT d the following telegram, subject to the n back hereof, which are hereby agreedterms to Denver, Colorado, April 3, 1917. / Georges Pa. Ban,: of rance, Paris, Ifsrance Affectionate greetings to yo. and your associates eilloot from an enthusiastic friend and ally. Strong. Chg. Benj. Strong, 4100 Montviea Blv. Receiver's N Check Time Filed Form 290 WEST CAB Number Time Filed Number of Words WESTERN UNION THEO. N . VA I . UNION RAM 14 PRESIDENT CLASS OF SERVICE DESIRED Full Rate Half Rate Deterred Cable Letter Week End Letter Patrons should mark an X opposite the class of service desired: otherwise FULL RATES will be charged SEE BACK OF THIS BLANK Send the following Cablegram, subject to the terms on back hereof, which are hereby agreed to ray 31, 1917. Georges Pallain, Ittthr-a-f- c e, Paris. Accept deepest appreciatior of your kind messaoabout my son. Benjamin Strong. BS/VCv. Charge Menjsmin ftrong, ieederal Reserve Katik, City. May 31st, 1917. Dear eonsieur Pallain: You will, I am sure, understand the great appreciation thet 1 feel in the interest which you displayed in my son's arrival in France. He sailed on Saturday on the "Rochambeau" with about forty students of Princeton University to take up his work in the ambulance service in France. He had previously been in training in the army but oeing to his eye-sight which is somewhat defective, he was obliged to accept his discharge and of all the other various forms of service this seemed to appeal to him as the most useful and one which he could undertake immeditely. I am sure that if he calls upon you, (as he certainly will if time permits after reaching Paris), you will find him all that i reoresent him to be, and that is a splendid boy. At the first opportunity I shall hope to write you a personal letter, telling something of develoements hcre and particularly of the reception which was accorded to your countrymen who were recently here on such an important mission. 7'y return to flew York is now more or less permanent, as I hove closed my Denver home. I regret to sey that the preisure in- cident to ranking arrangements for placing the new government loan has unavoidably etlayed consideration of your last letter about which I -2- To ! :onsieur Pallain. stay 31, 1917. 4 Tatriz Gin, If. Tee t7t47 1, 1917. 3aw lierdow ae I WM m1 see, atom tie SO4 '! or low last lidag bettor, the promsere or oink aeldeala Caw* egos the Mood aeoerve essroodies dth the Aleidag of Our lonmemente MA, taw, ads it lotolliNhe Mir as 10 f1 1 thy arm ties to otiliy tho aemoortia *kWh yema own gout rem to Traria,* Iii z' lm to the aspolatreat of lho Nollt lhat, K leissura as the Agent in Mao of the Wesel Beaersa ledo the osallilia of i health Imagall whoa Illittationi via >4 tountrer bran atd may now sloe vatuvalar to Amor for a conthoe oat I able to lane son fts117. 2n craw to fielbor illustrate NW poeItioa I ac ailsoing this a asaorasiass, aotth opt In stew duo teill the patsy of the Naeofflo Omar ant the iressens ter time* atoptlas. It =WI bo a West aselinpeblallemi uet IMO INI MOW& lbw meat popoosi ilth Iry pat Isietl- tatIon; In Mt Oor ocoilinistiese aid eorraeseeelome That as tip holism to 1111 be alto to oonaumato thla sorsomgmit ad, If nosoy, 2 mill plea Task, is older to Wait Moo wig jot as moo as I am ipt may MR is mellow ow oolromatlone in paws point to be dealt with It sow to :35 to this:Sue The asialllialmat or a went on t*:o bow= or us nem of reams bz tho Agora lemerso fit, or tho parobase of bill. throuTh Sho Mk of Paw le in Wan, tho ogolgrami In st foreign ootetitzt of a owsoopludillg allot or the roseamoo or the Mr* Immo Fork ea, as tho law maim woo 21ear TTalaina Slo i111.: 2, 1917. to maw reeersee is mil, ear bralliSag arraggeramis Ansi Non be of =oh daseetur as gal motto m to omit isle' ~tabs* won the liquilution of these Morse In MK' if seat therefor Maws 74 do not cortomplate ilisiblIdeac yea efodite in somas of meth easest on Vlo Ian:: or ;Vows would be to xeseilie awl road he at ail liese matt, to liquidate la elli Mead It Mae lamessibls for as to ileifitato the mesa* bf &ego glee* l sear daps lamb It weed sot be or expeetatisa to Gnaw this eseerast elipir for the pewee of elthilmstir ^p2 t nee the as* of Nom for the awe ce soh profit as es ail* realise. I fast, at the Mena Una there would, be so wont in. ctoinz so, oertaliol,7 not eaftloiout to jestiti smoke r the :lila broolvei shipeente nolo further, le road net upset let the osseant would be as aetliro oar largo one, bat mother a sealast Gas &Arc poslol of the eery it= 1111116.110 conditions eve so ebossual aid meartabe am at present. If the eirdilleie of the mama as Metal In soar amollatia ast appear is poi to to Irsetlseble at the Dreamt linos le alght suggest in lieu thereof mai poilirc the omoluelea at the wan that the Dads of reinoo opera as asseseet In dollars with the 1114111111 Ilistins INS et away for the porperes ae lcinc per node in PM AM eat for the wpm ouch United bariasse aro wadi MAW the 3solc at Paso ear Allad am" oarre*Ilenleuto eith the appuleal of the IhAmel - menses BONK, in the hope aril ozpootatiOr that a are oemprehustee seregoolent raoMdi bo senoludai Lator. July M., 1917. - lemelear ;14.11d.23. ly3 assure," & ear lea ro io neat yon vi alt Alomeserk e &oar linotear Palletise I bee is nents arneidar mak aummarn. liatilaer 0. Pallas. Perk et Prase% Perin, VienVe in even- Treq Form 2903 CLASS OF SERVICE DESIRED Fu te Half Rate Deferred Cable Letter Week End Letter Pat ,,,,,rk an X opposite ,i service desired; OTHERthe WIIE CABLEGRAM WILL BE TR '".TTED AT FULL RATES WEST CAB NEWCOMB CARLTON, PRESIDENT Send the following Cablegram, subject to the terms on back hereof, which are hereby agreed to UNION RAM GEORGE W. E. ATKINS, FIRST VICE.PKEsiDENT Dec. 22, 1937. Pallain, Bank of France, Pais. warmest Chri3tras Greetings to you and your associates. DO; Charge Benjamin strong, Federhl Reserva Banic,IFEDEri.4- 15 Nassau St. 13Si IVO/ S'-rong. 1VitlIK4 "\ January 21, 1918. Dear Mr. Pallain: I have taken the liberty of giving a note of intro- duction addressed to you, to my friend, Mr. John T. Pratt, who L.-; sailing for France this week. ex. Pratt is a well known New Yorker, son of Mr. Chas. Pratt whom you doubtless know as one time connected with the Standard Oil Company. Since the outbreak of the war he has been ent;a3ed in some inTportant work in the Department of Labor in Walfhington and has now resigned to take up work in France. Ste is a very warm personal friend of mine and a de- lightful fellow in every way, and I hope his engagements abroad permit him opportunity to meet you. Anything that you can do to facilitate the objects of his trip will be warmly appreciated. :ith kindest remembrances for the New Year, and thanking you in advance, I beg to remain Sincerely yours, M._Georges Pallain, C/o Bank of France, Paris, France. :January 21, 1918. Dear Sir: This note will be presented to you by my friend, Mr. John T. Pratt, who is just leaving this country to accept a position of importance in the Amorican Red Cross, Field Service, in France. I hope that Mr. Pratt's duties will permit him op- portunity to present this letter to you, as he is a very warm friend of nine and I am sure you will be glad to know him. Anything that you can do to facilitate his work or his trip will be greatly appreciated by me. Faithfully yours, M. Georges Pallain, C/o Bank of France, Paris, France. BS/FIAB copy FEDERAL RESERVE SANK OF NEW YORK Woods Hole, Lassachusetts. August 12, 1918. Alt THE GOVERNOR OF THE FEDERAL RESERVE BANK OF NEU YORK, TO THE GOVERNOR OF THE BANK OF FRANCE. My dear Monsieur Pallain: Your kind letter of June 22d reached my office the latter part of last month, during my absence, and, while I am still away, I take this first opportunity of replying to your letter in the hope that we may at once conclude the more limited arrangement which we are discussing, and, later, establish it upon a wider and moreexplicit basis. Unfortunately I am unable to visit France this year, but I hope that this letter will cover the ground which I had hoped to discuss with you in person and will be found to be entirely satisfactory. With this I am enclosing to you a resolution of the Board of Directors of the Federal Reserve Bank of New York, duly certified under seal, authorizing the officers of the bank, as occasion may require, to open an account with the Bank of France, and, accompanying this, you will find instructions in regard to the drawing of checks on the account, together with specimens of the signatures of the present officers of the bank in duplicate. May I likewise ask that you be good enough to furnish us with a similar explicit authority for the opening of an account by the Bank of France with the Federal Reserve Bank of New York, together with specimens of the signatures of your officers and the usual authorities for signing drafts upon the account. MKDKRAL RESERVE BANK 017 NEW YORK 42 The Governor of the Bank of France 8.12.16 copy We will prepare a form of check to use in drawing upon our ac- AO count with you, whenever it is established, and presume that you, likewise, will prepare your own form of check for use in drawing upon your account with US. As to the opening of our account with the Bank of France, let me explain that up to the present time we have had no occasion to open any account abroad other than in connection with some special transactions with the Bank of England, because, as I have previously advised you, the Federal Reserve Bank has undertaken no commercial banking business and will likely require the facilities of such an account only in connection with transactions for the stabilization of exchange, or, possibly, those to be conducted for the account of the United States Government. We at one time expected to handle funds in connection with our military operations in France but finally other arrangements were made, and, therefore, the account we had in contemplation with the Bank of France was not opened. In order, however, that all details may be arranged, against the possibility of such transactions, which will enable us to enjoy the facilities of your bank, we propose shortly to remit francs for our credit, for a nominal amount, in order that an account may in fact be established and maintainea. We do not expect an allowance of interest upon this balance as we, in turn, are unable to allow interest upon balances which may be maintained with us by your institution. As to the account which you propose to open with us, we will be very glad to receive from you the deposit of any funds which you may desire to carry with us and hold it, subject to your direction or check. Vie will also be able to receive and hold for your account negotiable paper or other free assets which you now have or may acquire in Lew York, and place at your dis FEDERAL RESERVE HANK OP NEW YORK #3 The Govelpr of the Ban OPY qf France 8/12/16C vo posal the facilities of our institution for your ordinary operations of collection and payment. Should you desire to have us make purchases of paper eligible for discount at the Federal Reserve to conduct these operations for ew York, we All be very glad indeed sing the same care that we use in purchasing paper for our own account. Under our practice at the present time, we will make no charge for the collection of checks and drafts payable within the United States, which you may deposit with us for credit, the avails of such drafts being made in accordance with a schedule of time, which is stated in the enclosed pamphlet. Responding to your request for information as to the terms of the understanding between the Federal Reserve Bank of New York and the Bank of Ehgland, I am to-day in correspondence with the Governor of the Bank of Ehgland in order to arrive at an understanding which will enable me to comply with your request, the actual document being subject to an explicit agreement that its contents will not be made known without prior agreement by both institutions. Permit me, in conclusion, to express to you and to your associates the intense satisfaction which is felt by everyone in this country that we are at last able, by the presence of a great army-on your soil, to repay at least in part the great debt which the United States owes to France. You may rely with confidence upon the determination of all of our people to relax no effort necessary to bring the war to a victorious conclusion, and we hope with you that when that time comes bonds will --Jaye been established between the two countries which can never be severed. I shall indeed feel the greatest possible satisfaction if these bonds may be strengthened by a close alliance FEDERAL RESERVE NANA OK NEW YORK #4 The Governor of the Bank of France 8/12/16. copy between our two institutions under which the conditions arising at the conclusion of the war may be dealt with for our mutual protection and profit. With assurances of may high regard, believe me, Faithfully yours, Governor. BS/L3B anc. 2 Monsieur Georges Pallain 10/29/18. I shall hope at the earliest possible moment to again visit France and once more enjoy the opportunity of renewing our friendship. :;ith cordial regards, believe me, Faithfully yours, Monsieur Georges Pallain, Bank of France, Paris, France. BS/MBB -'... \11-- ' R June 18, 1919. Dear :.lonsieur Much to my delight I am sailing for urope by the Baltic on or about July 13t, and am, therefore, looking forward to the pleasure of a visit with you in the near future. faithfully yours, Monsieur Georges Pallain, Governor, Bank of trance, Paris, trance. B._;/ 1.1313 Hotel Ritz, Paris, July 28, 1919. dear Monsieur 7allain: It is with great :deasure that I advise you of my safe arrival in Paris, where I shall be for a few days at the Hotel Ritz, and shall ho.e to learn that it will be convenient for you to see me. Trusting that you kee ;. well and fee_ some relief from the heavy burden which I realize you have been carrying for so long, and with the assurance of my resect, I beg to remain, Faithfully yours, Monsieur Georges Pallain, Rue Croix-des-Petits-Champs, 3 Paris. -BS/V 000 Hotel Ritz, Paris, August 19, 1919. Dear Monsieur Pallain: Contrary to my expectation I shall not leave Paris as planned, and an now writing to ask your assistance in carrying out a transaction desired by the Treasury Des,,artment of the United States. I understand the French government has expressed a willingness to furnish up to110,000,000 in napoleons in exchange for which there shall be delivered the equivalent in German gold coin, in Paris, on a basis of 999.4 of fineness. Will it be possible for you to ascertain and advise me of the following: 1. The probable cost of shi:ing the gold coin from Brussels to Paris. 2. Likewise the robable cost of shi,:ping the German gold coin from Amsterdam to Paris. 3. The probable cost of shi, ing napoleons Cram 72aris to Madrid. 4. The length of time which will be required to effect a delivery of napoleons in iladrid when shipped from Paris. The Federal Reserve Bank has a sufficient supply of German gold marks, both in Brussels and in Amsterdam, to make the deliveries in Paris an soon as shipping arrangements can be comjeted, and I would also like to know whether, in C480 the arrangements for transport from either of these places could not be prom,..tly effected, the Bunk of France would be willing to make the shirzaent of the equivalent of $10,000,000 in napoleons to the Bank of Spain in !sadrid, against which I would propose to place at the order of the Bank of France an equivalent amount of German gold coin, either at Brussels with the Banque Nationale de Belgique or at Amsterdam with the Nederlandsche Bank. Assuring you of my a preciation of any assistance you may be able to render in -amiling this transaction I beg to remain, Faithfully yours, onsieur G. Pallain, Governor, The Bank of France, Paris. http://fraser.stlouisfed.org/ Federal Reserve Bank BS/V of St. Louis Hotel Ritz, Paris; August 28, 1919. Dear Monsieur Pallain: I am just in receipt of advices that it will not be necessary to make the shipment of gold from Paris to 71adrid, concerning which I have recently had some conversation and correspondence with you. I wish to assure you of my sincere aiTreciation of your courtesy and good will in this matter, and with assurance of my esteem-remain, Faithfully yours, Monsieur Georges Pallain, Govornor, The Bank of France, Paris. :Utz Hotel, London, September 12, 1919. Dear I:onsieur 2allain: it was with great regret that I found myself obliged to leave .saris for .ondon on very short notice and on that so- cont a was unnble to sr/tinge for another visit with you, as had hoped to do. As it became unnecessary to make the gold shipment which we were discussing, hnd hooed that on our next visit we could spend some time in the discussion of matters in which we are both very much interested, but this, however, i must defer, fear, until another visit to Prince. I hope you will not mind my saying that I was distressed to observe the evidence of your recent illness, and to express the hope that you will now find leisure to make your own health your first responsibility. ,ith cordial regards and every good main, PaithfUlly yours, nce, ish, I beg to re- CI) I Q.11.3 telt (70 ej Olive/C/1A Cu/Z. De- Ca. 4:)atti tte Dea¢, rLc,40 liGite I , V,,ot 6,41f. fcDita_Cc BANQUE DE FRANCE VERSEMENT. D'OR -POUR-LA.DEFENSE NATIONALE, LA BA.11QUE :p E FRANCE c9IDNISTAT A.W1,' S c 7/e , c QUE CE -JOUR EN 7/ s R 6/e-tbez EC H7s0`4G E DE BI, LETS LE / 9 40- .1.,\ AF.F._;; BANQ,UE -DE-FRANCE VERSEMENT.D1OR.POURLA.DEFENSE,.NATIONALE, LA BAN QUE DE FR.73.3ICE CONSTATE QUE M CEJOUR EN OR LA SOMME DE EN ECF-17kM4G E DEBILLETS DE BANQUE LE 1715.73. 1915 LE. G 0 UVERN EL/ R BANQUE -DE.FRANCE VERSEMENT.IYOR.POURLA.DEFENSENATIONALE, LA BA.N QUE DE FRAT,ICE CON STATE QUE VERSE CE JOU Ft EN 0 R LA SOMME DE EN ECHAT4GE DE BI LLETS DE 13,2kr-4 QLJE ICE - 1915 LE GOUVERNI EUR POST OFFICE TELEGRAPHS. tf the accuracy of this Telegram be doubted, a part, or the whole, be v.,peated under special conditions, particulars of which can be rained oi, application at the Office from which it was delivered. I This form must accompany any inquiry made respecting this Telegram. Office of Origin and Service Instructions. to pay -- Received here ot PAR I S 21 400 35: 92 I Ot450= tr4, 42.Pm M STRONG JUNIOR HOTEL RITZ PICCADILLY LONDON' AANGLETERRE NOUS SOMMES TRES SENSIBLES A VOTRE SI CORDIAL SOUVENIR & NOUS N OUBLIERONS PAS' LES MOMENTS GREABLES & UTILES PASSES AVEC' VOU$ -r' ROB INEAU &` MO I L. 29. Agr2.11,A IN SUUE DE FRANCE a /11414 14.4,%4 rWft 1,444,1"4 C,44 444 r:61 so. 4, 1,1447Z" lkhiL eu o " 6'6% 11 '14 IA. c/L, 1.44.0.1 LLs401 144 4 A BRIEF TRANSLATION OF THE OPERATIONS CF THE BAWJE DE FRANCE During the year 1 9 1 5 Gentlemen, After eighteen months of war, with the same calm as last year, with a faith always greater in the glorious destiny of France, on the day fixed by our statutes, I declare our general Assembly is open. Before giving you lecture, in the name of the Conseil Gen6ral, of the report of our operations during 115, let me address to the Country an expression of our gratefulness for the confidence it places on us. In the incessant labour imposed on us, this confidence is a precious comfort. Cur initiatives have a double aim: to help the energy and patient effort of the Nation to adapt her economy to the conditions of a war which necessitates the aid of all resources and activities; to give to the state, for the needs of the National Defense, compatible help with the credit of the bank note. The year which has just past was marked by a renewal of progressive activity in the various manifestations of our financial and economical life. The circulation of capitals, paralysed by the declaration of war, has recommenced little by little after the decision taken by the .:stablishments of credit and most of the Banks to renounce to the moratorium of deposits anu current accounts. The Bourse is pursuing gradually the liquidation of engagements of a term prior to July 31st 1914; the tarh transactions are proceeding under satisfactory conditions- Our agricultural industry surprised by the abrupt occurrence of the war and in spite of later difficulties organised itself toireserve one of the essential elements of our I;ational wealth, thanks to the mutual aid which the rural have The works of the field kat been effected populations lent. everywhere up to the firing line, nevertheless, our cereal crops in 1915 are not inferior to the average. For wheat and sugar we have been obliged to go Abroad and for some of the most important of our provisions. Industry and Commerce have enjoyed renewed activity and many signs indicate progress. Railway lines have realized a rise of commercial trafec which is gragually approaching the figures prior to the war. The particular inquiries of the 7 inister of Work develop a marked reduction of the number of manufacturing and commercial houses which have not yet commencedi busine'ss operations. ew factories have been founded replacing those closed at the time of the war due primarily to the demand for war material, ammunition, etc, of which an abundance is one of the conditions of victory and one can also notice happy efforts to make up for the difficulties of the lack of hands and transportation facilities and to augment as much as possible the production of other industries. 3. 14, Also, a part of the activity shown in the industries of war contributes Dy the development and improvement of the material, to prepare the economic future follow the conclusion of peace. which will Thus, new hydraulic instal- lations assure a more complete use of coal, and that the industry of chemical products is undertaking to fight the German concurrence. The improvement of the general economic situation and a step towards a more normal regime of commercial transactions are attested by the diminution of our portfolio of prolonged bills and by the progressive reopening of discounts. The reimbursements operated, as well by the principal debitors as by transfeirees have reduced our portfolio of moratorised bills, during the year 1915, from 3 milliards 478 millions to 1 milliard 838 millions. Cur new discounts have not been affected, in the same proportion, by the larger activity of affairs; these continue to be settled, mostly by payments in cash, which the disponibilities created by the expenses of the state, favour. However, the presentations mark an appreciable progresvion; our portfolio of bills regularly payable at maturity, after coming down to about 200 millions, approach today 400 millions. It is a sign of the renewal of commercial credit which we are trying to develop. This renewal of credit is beginning to show also in the domain of the international commerce. have registered the abandoning; by certain american houses of exportation, 5. rose to over parity with our money. At first it was a case of exchange on Spain and New York, some days later, on London, and in the first fortnight of 1:ay, on Switzerland and rcandinavian countries. This crisis is one of the inevitable consequences of the actual tragic events. suffer it. All the belligerants have to Our enemies, although they chose the hour of egression, have been the first to be affected.by it. As soon as lovember 1.314 the mark registered a loss of near 10(ii; on the place of New York; the depreciation attained 12 to 13 ;i; in February and Larch 1915; after a lapse of time it surpassed, in July, 1'40; it was, at the end of 191b, of was about 20 At no time, nor in any neutral plaee,/the com- parison of the French exchange with that of the belligerents unfavorable to us, although our enormous purchases abroad made us debtors in a considerable sum. In the year l'H15, our importations exceeded our exportations by 5 -illiards 52 millions. This cases the unique difference in our economic balance; and is the cause of the momentous alteration of our exchange, which a renewal of our nx usual exportations would suffice to restore to the normal. The importance of these figures, the impossibility of reducing them materially by reason of the needs of the National Lefense, have not allowed us to treat the crisis of the exchange by the usual methods. Neither raising the amount of the discount nor gold sent to creditor countries, to cover 6 the balance of our engagements, were remedies to apply without serious inconvenience. Considering the circumstances and the state of the capitals market, a rise of the amount of the discount would have been impracticable, wkwrwais It risked oncroachment upon the renewal of affairs and the re-establishment of commecial credits which we had the ability to encourage; the sending of gold without limit, would have led us to reduce imprudently the metallic security of the circulation, without any other res=ult than to possibly precipitate a crisis instead of retarding it. It has been shown that such exportation of gold would have been an unsatisfactory method. Therefore we could only try to attenuate the effects, without compromising the big national interests of which we have charge and without weakening the possibilities of the aid we are lending to the `rate_ and to the Allies. From October 1914, we have applied ourselves to reestablish and extend our relations with our foreign correspondents, so as to afford to the international commerce, means of recoverment and payment as complete as possible. pres- at cribed to our Directors to receive/the paying and the discount departments the bills drawn on most of the Allied and neutral countries. We informed them at the same time that we would furnish them, on demand, and at the most favorale rates, all remittances on England and the United States. During the first weeks cf war, when by the disorder of the market, the 7 exportatdus could not realize their exchange but with great loss, we came as buyers, so as to allow the re-establishment of more regular rates. At the beginning of 1915, we had thus constituted an important provision of exchange, With a view to the needs of our customers. The general tendency to a rise, which was affirmed in the first fortnight of Larch, led us to extend the circle of our intervention. ;after getting the certitude that the exchange operations, treated at our desks, could not sufficiently influence the rates, we judged it useful to refer to the direct sale on the same market where the quote is made. The means we of did not permit us to bring back and maintain the estimates at a price near par; at least could we, to a certain extent, straighten the movements of the market and help it to adapt itself progressively to a state of thiggs which were so new to it. In the first days of June, we began to subordinate our sales of exchange to the justification of the commercial needs, so as only to proceed to a good end. This decision was inspired both by the desire to reserve for the French Industry and Commerce the limited resources which we could deliver to the market, and by the care 11:)t, to contribute to exaggerate on our place the arbitrage operations over which we had not control. However, we only advanced the psactice of resolutions sanctioned in a conference of Bankers, held 14 Operations for account of the Treasurer: Fr 42,717,d00.000 Credit 42,765.900.000 Debit Toyal In 1914 it had attained 85,483,100.000 31,089.800.000 These figures include the payments and recovery ents of the accountants of the Treasury, the turnover of the funds by the Banque de France in Paris and in the Provinces for account of the Treasury, the remittance of bills to the Receiving Teller, the recoverment of postal orders, payments by the Treasurer and the payments of coupons of the Treasurer over hie desk. All these moveIents of funds are by virtue of the law od November 17, 1897 effected by the bank without remuneration. The $54; Natlonal Defense Loan In conformity of article V of the same law the Bank opened without remuneration nor commission of any kind its paying teller cage for payment of renter and French Treasury values. Circumstances made it the banks duty to give to the state it Defense bills. help to coperate in the payment of National The mann,r in which the bank fulfilled its duty is clearly established by the results obtained. About one fifth of the total subscriptions to the National Defense loan has been hamaed through the Banque of France for a nominal capital of nearly 3 lilliards-exactly 2.963.568580 Francs in 300.798 subscri tions. 16 The balance of our current accounts of depoeite bas ben reduced of: Ir. That of Mille in circulation, of: 657.(.)66.000 1.077.313.000 In convidering the bills reentering the circulation during the Period of the Loan, we may consider that the total entry of bills has attaJned more than: PR. 1.500.000.000 In confomity with the disporitions of the article 3 of the Convention of the 21st Fept. lca, by which the state undertakes to reimburse, in the shortest delay possible, the advances made by the Eank, either by means of the ordinary resources of the budget, or on the firet laans, or one the extraordinary resources, which it may have, Pheeireasure reimbursed us: 2.400.000.000 And the ba2ance of its account presented, on the 23rd Dec. , and augmentation of PH. 319.992.000 National Defense Obligations and Bonds. The amount of Ob3igatione pubeeribed through the interrqediary of the Bank isI Paris: Fr. 249.601.600 310.73.300 Branch offices: Total: ... 560.324.900 17 The rank agrees to advances on these Obligations up to a concurrence of 80;; of their value. .)Hrt-ng 1915, the fr-lount of Nonds subscribed or renewed throurh the intermediary of the Banque de France 'as: Iaris: 1'R. Branch offices 882.113.600 1,01::.082.900 Total: 1.901.196.500 retallic Reserves. This year our metallic reserves show an augmentation particularly remakkable, only with our gold stock. 24th Dec. 1914, cash in had amounted to: PR. 24th Dec. 1915, it amounts to: ray an augmentation of: Gold in hand is passed froir.: 4.514.400.000 5 431.400.000 R. 917.000.000 17/1. 4.15E.500.000 to 5.079.700.000 Say a net alTrentati on of whereas the money in hand has become from; to: 921.200.000 Fr. 355.900.000 351.700.000 Say a diminution The augmentation net of f: 4.200.000 1 millions of the gold in hand, shown by the two tables of the year ends of 114 and 1915, represents the overplus of the entries on the rive total entries of gold hare been considerably more important; trey attained : 13 1.467.20C.00C frF. and thet of the e66 millions,of which the coenter-Tarty was found among our disponibilities and credit abroad, which figured at the end of 1915, for 988.127.089 fr on our balance-sheet. Nearly the whole totality of these 1.487.200.000 francs in gold - exactly 1.Z40.725.00C fr. - have been brought voluntarily, without any pressin6, by the Country itself, at the first appeal that the :;inister of Finance made, on the 2nd July. immediately opened, in saris and it The Bank branch Officee, special bureaux to receilie the gold. The Individual reserves of gold money a.rc so considerable, and the patriotism of the owners showed itself with such continuity that the ,;old paid down, surpassed at one moment 1G0 millions in one week, and after various changes, again attained, from Dec. 9 to 15, 24 weeks after the opening of t'ie first bureaux, upwards of 90 millions. In some regions, on the example cf !'arseilles, special committees were created endei the name of Comit4s de l'Or et des 'Eons de la D4fenee Nationale, and contributed upeerfully to increase the Subs paying down of gold. Cur silver cush in hand shows a diminution of e.2°C.000 frs. To atLenuate the crisis provoked by increased cash trensactions, and the undesirability of dividionary eoney, not only did we immediately put into circulation as soon RF it cerne into up, all meneyn recciece:, but we ured ue ell of our cenetituted stocks of reserve before the war at the Central flank RF well as our Lgenc$es It is thus that a sum of 55 millions divisionary money was given out eeele,. 17 ind 7;e have the assurance that the 1:int will be sufficient to answef the needs of the transactions, which it was often impossible to face without the initiative of the Chamber of Commerce. Incoihg cash the movement of cash as folloow: kax 0 on 079 700 U00 Xs Dec kin 3 906 300 000 on Ef'ly 15 4 :,40 Gold: Average Silver Lax 306 00U 378 200 000 on March *0 700 000 Lain 351, i.&vg 368 600 000 " Deo 84th Total incoming cash in hand: Page 43: ;.:ax 5 431 400 000 on Dec 04th win 4 28L 600 000 Avg 4 709 500 000 " 1 4y lb Interest rates - aiscouts and advances emained fixed respectiveby at 5/? and C;0 DIFCOUNTF: Commeccial portfolio The discounts in Paris, at branches and aurilfsry bi'reau brought 2 903 000 for 2 823 80(1 000 The portfolio discounts have attained a mf,,mimum on The minimum 212 7C .0 COO on Feb. Dec. got 1915 of 394 800 000 F. 10th. Notes have rixIsput been discounted in Paris during 1915 as follows: Notes of 5 and 10 France 10 " 50 g 38 982 155 21,4 18 Notes at $0 and 100 Prance 121 925 I. t 329 260 a17ove 100 frp..ncs The proportions of small notes of lees, denomination than 100 francs was 49% Bureau of direct accounts: Page 44 Tc render our services more directly acceispill.e at Paris we r.,..ve opened to commerce and industry a bank central in one of our Yuildings Ye. V rue Daillif, where are treated discount adva.nee 0!icin is of assitance nnd interest to industrial and business people. Total operations of this 17lrea during 1915 was 278 367 000 Fr. On Dec. $4 1914 the portfolio of TWIDI Yoraterium Notes which hed atteined 4 476 000 000 was reduced to 3 477 683 300 On Dec 24 1915 it was reduced to 1 838 376 500. Page 46 treats upon love of tradition in handling the methods of business transactions according to legal degrees issued from time to time. Pcge 47 At Paris only ( the Paris Bureaus only) our port- folio contained at the beginning, of the year 538 538 Notes for a total of 2 078 982 215 francs with more than $00 000 debtors This work has all been handled expeditiouely. As soon as the public powers ennounce the cessation of the moratorium the Banque will be able to face without difficulty the task which has been demanded of it, because she will have premeditated measures to face the liquidation of this portfolio. le have received over the counter from holders of accounts in payable paper either in towns orbranches or abroad 439 700 notes for 806 500 000 francs. (obligations-notes) Advances on accounts/amounted to 3 238 000 000 19 The portfolio avances on these notes has ander,40ne t e ind variations: Max Dec. 22 Min Nov 24 It vas on Dec. Pr 1 156 800 000 562 000 000 24 1915 1 L52 800 000 Inx/01 1914 the extreme figures had been as follows: Lax 937 000 000 Min 697 GOO 000 Circulation of Bal:k Notes: The variation of the circulation of bank notes have been as follows: 2L6 400 000 Loc 24 1915 Max Dec. 1 1:115 14 291 000 000 Min Dec 30 1914 10 LGL 600 000 Detailed description of the denominations in circulation on page 50. Page 51 refer,: to the delays in zettinr Bonk notes printed and show cities in France where this delay was helped to be overcome. The lank has purchased a piece of ground 11:Ion which will be erected a plant for printing tills gnd a new 10 frnce note is soon to to issued which will be slightly heavier in weight but the same size. Paris, April 17, 1916. t*.t41% Dear :r. Strong: I very much regret not having been able to reply earlier to the kind letter which you addressed to me from London. Knowing that you were to stay there only a little while, I have awaited your return to America before telling you of the pleasant remembrance which I keep of your visit. In the course of the negotiations which I bud the pleasure of having with you, I imparted to you our desire to ameliorate the state of the exchanges. remains the object of our This question still onsiderations and so in order to ef .// prepare a solution of it, the Chamber of Commerce of Lane and the Bank of France have directed M. Jacques de Neuflize to go to Now York where he will endeavor to find means to facilitate the commercial intercourse between the United States and France. M. do Neuflize has already had the honor of being presented to you at the time of an earlier mission which the Chamber of Commerce delegated to him. I have no doubt that he will find again a very welcome reception and assistance which will greatly facilitate the accomplIshent of his work. I would be much obliged to you if you would be so good as to acquaint the persons to whom M. de Neuflize desires to become accredited with the contents of this letter. Please accept, dear Mr. Strong, the expression of my devoted sentiments. G. Pallain. \w`\ 94:arteitie +-- .-rai/Ce Cher Monsieur STRONG Je vous remercie de votre airnable lettre du lb ay.ril et tiens a vous redire tout le plaisir que j 'ai eu it Caire connaissance avec vous fors de votre voyage a Paris. respere que lee relations que nous avons nouees se resserreront encore dans l'avenir et je serai heureux si l'occasion m'est offerte de vous temoigner ma vine sympathie Votre lettre s'est croisee avec celle par laquelle j'accreditais aupres de vous M.Jacques de nuflize. Je profite de cie nouveau a votre bien cette occasion pour le veillant accueil et pour vous remercier cie l'aide que vous voudrez bien lui preter Bans l'accomplissement cie sa mission Veuillez trouver ici, cher Monsieur STRONG, l'assurance de saes sentirrwnts bien cor dialement devoues 2 Monsieur Benjamin STRONG, Gouverneur ciq ],a BanquE de Reserve Federale de New-York TRANSLATION BASQUE DE FRANCE Paris, /Jay 12, 1916. Dear ar. Strong; I thank you for your kind letter of Anril 15th, and take this opportunity of telling you all the nleasure which I had in making your acquaintance during your trip to Paris. I hope that the re- lations which have been established will grow closer still in the future, and I shall be happy if the occasion offers itself to re to give you testimony of my active sympathy. Your letter crossed that of mine by which I introduced to you M. Jacques de Neuflize. I take this occasion to recommend him again to your kind reception and to thank you for the aid which you may be good enough to give him in the accomplishment of his mission. Please accept, dear Mr. Strong, the assurance of my very cordial devotion. Faithfully, (Signed) JFC/LCE G. Pallain. BANQUE DE FRANCE Pos 1AL TieLEGRAPH - COMMERCIAL CABLES CLARENCE N MI0ZA/50 AT 920111111M 011rIrtat, oCNivEt, ti 1 th St., Frcest Q Cranmer PI is TELEWH, The Postal Te'eprac .45(Dr: sAaCKAY, oPet-,-toEnr CABLEGRAM DUN= No. CAle Company (Incorcoratnritranrqs and delivers this cablegram &inject to the terms and ccnditicns printer,: an the back of this blank. DEMOS PATENT Ile. um 55Chp 24 638am Paris Dec 24 1916 strong Penjamin Gouverneur Federal Reserve yank Newyork A .nenvercolo Ai repondu par dernier courrier a votre derriere lettre stop rille bons souhaits G Pallain No Inquiry respeatial this niessage can be attended to without the production of this paper. through the Company's offices, and not by DIRECT application to the sender. Repetitions of doidifful tUde$011Npeld be obtained 11- ti TRANSLATION OF LETTER DATED DECEEBER 27, 1916, FROM MONSIEUR G. P.M,LATN, GOVERNOR THE BANK 02 FRANCE, TO MR. STRONG, GOVERNOR FEDERAL RESERVE BANK 0.1,' NEW YORK. Dear Mr. Strong: I have received with satisfaction your very interesting letter of November 14th. Its dispatch to me had already been announced by a communication from Mr. R. H. Treman, accamoanying the series of documents for Aaich I thank you for havin.2. them sent to me. I have had a translation made and studied it and, since you are willing to authorize me, I shall nerhaps make use of your kindness to make clear at the proper time certain points which leave some obscurity in 112 mind, but today I wish to discuss with you the question on the subject of which I have formerly written to you, as follows: tirr e recinrocal cooperation of our two institutions er the initial development of most intimate financial relations between our two countries. Ls you remarked 'in your letter, the state of war does not permit us to allow for the moment a complete development of these relations. At least can we attempt the establishment from now some basis of experience which will render easier in the future extensions justified for our resnective interests. Also the time seems to be favorable, if I can believe the information in the newspapers which reaches me even today, the Federal Reserve 3oard has already authorized the Federal Reserve 'Banks to appoint foreign correspondents, and your establishment would have selected the Bank of England as corresioondent for the United Kingdom. 1 scarcely need to remind you hoa agreeable it '.could be if the Federal Reserve Bank of New York would negotiate an arrangement of the same character with the Bank of France. 2. Liunderstand the two objections which you make to my first proposition. -2he scruples which the Federal Reserve Bank has,not to com- pete in the American Llarket with affiliated banks for the direct purchase of foreign bills is absolutely justified. I had only looked at this com- bination as a means of transfer of your funds, but there is no obstacle that this transfer take place in the form which you indicate, that is to say by chec or cable purchases on the exchange market, and of which we would take care of the proceeds. ,e shall likewise accept charge, as l have offered to you, of the investment as soon as put to the credit of your account in bills of trle first t order (prime) at 90 days maximum, created for commercial purposes, duly accepted, and of which we would guarantee the payment at maturity. Ls rapidly as these bills are naid, their proceeds would be reinvested in the same terms as long as we have not received your instructions to the contrary. Then when you feel that you have to proceed to a partial or total liquidation of your current account with us, we would pay your orders on the Bank of France, negotiated on the American 1,_arket,until your credit is exhuasted. It should be understood that the Federal Reserve Bank of New York will apply to us an analogous treatment and that our account with it would function under the sane conditions and with the same guarantees. ';e would then be readily in accordance on this first point concerning the opening and the functioning of our reciprocal accounts current. Your second objection is on the necessity of an understanding in order that all transactions which shall be undertaken between our two institutions be based on the gold standard. The balances held by one with the other, or the investments made by one, thanks to the intermediary of the other, should 3. always be able to be liquidated either by means of normal exchange or by shipments of ,old or by setting aside of gold deposited as the property of the creditor institution. Here again 1 think I am able to tell you that such proposition would have a chance to be accepted by the Board of the Sank of i'rance, at ithich I ought eventually to take the initiative, if you believe it possible to be in the way of realization. Nevertheless, as you have al- ready remarked, an engagement like this should be limited at the outset for example to 30,000,000 or ,A0,000,000. This limit could be fixed by cable. Let ine hope that we are no longer very far from complete under- standing and that the few objectionS all of detail, which this new proposition may suggest to you, will not retard the conclusion of a practical understanding between our two institutions. In the hope that your health will soon be entirely reestablished, please believe dear Lir. Strong in most co.-dial sentiments. (Sg.) G. Pal lain. Paris', le 2.r.:th August, 1)13. Dear Mr. Stron:: Year letter of August let just reced r.e or the 22nd leprn t':-.at your health is I am very zird t after a great delay. a litle better and I hope tl-t soon you will be col::-letely recovere-. Let me thank you again for the very kind reception you extende to par delggate in New York ant for the cid you secured for him, not only through the Fe:eral Reserve Bark, but also through Your cooperation with him has frierds. your nLulerous been extremely helpful, and you are res-onsible to a gront extent for the re-'ts gained by .r. do 1:euflize. Your leter referre:, to our efforts toward developing -L::e have effectiveuse cf cecks for the settleert of accounts. It has already given ly undertaken a campain for that purpose. still are very far from those we us el-Icouraging results, but It is ver:- difficult to change the cus.tos of desire to obt-ur.. '-he bank note is so corvorco'.intry ir cuch ntterF... as t:lecc. cr...etoed to it, after .::ore than a o iert -_-hd our 1-):1-.)le are it is neeees..rily very slow, century of use, that the is necessr to eke many 2recautions. At hole, it i2 not suiteble to talk ill of oar old toms; they are a racial charact:_ristic and a prodet of our evolu'te ou7ht to be abl:T to carry, in crises, e total tion in history. per erled of ftducirry circul,ttion noetary relon Ilowever serious t'le is oftrn lost 51. :ht of it t'ne --precia'ior. ore hold.. fOr the presCoraider the fact that ir liFe of peace, we f.ve ent situation. already a monetary resource of abouttillial,000,000,009, nearly },4. 6,0')0,000,000 in hills and ore t:.:ar. 5,010,7.70,On The aiti lee. in the Americ_n lvIpers Jive rle to 1-elieve :71-atly I :ve met difficulties of the sr -re kind. .:tes to intnro:24ed i7 your efforts to accustom the Nnited ail wool hill of each; age and the acceptance I take the Federal Peerve.Bank to give more complete results. sedring you several copies of a little pamphlet of reel 6.1.. we hr,"-..e edited, and I will 75% you to send whenever you wish, a copy of your general rules, _..mended to no inportance whiz:: 1.2.test of sf,:Tte, !7.5 w,_11 as the mwisur.7..L for ±.fle devele sy5tc7.7 For the cooperation of our two houses, r. de i!euf1.-1.z with you on he has :iven me p' rt of the ,:c!-vrs,14cs Pari5, eo--te] toce this subject, i teas er:: interestin oijit of I 1r.st ':inter. which you hel at th t time, and I realize Flit. satisfaction develert. progress .6. 9 .... Unfortunately, the v: r, with the obliEaticns and responsibilities lArich it 1.poses on ue, does not allow us the liberty of trying your plan of union and coordination.in the efforts our two banks toward assuring mere stability in the mutual financial accounts between our two countries. Besides, your Federal Reserve Act does 1.11- allow it, I believe; at any rate, not the actual application (*). Perhaps, however, we can beZin immediately a preliminary step, limited in size and purpose, but elieh will allow us in one way or another to estimte results that are practically possible. You could bvy in the American market, for exa::nle, as much ae twenty Iilliono of drafts on Frsnce, the redenpton of wich we will assure. The pro.:ue if it would he carried to the credit of an ac cunt we could open with the Fe,er,1 Reserve Bank of New York, W. 11e waitir,..; to use it for discount of paper of te first quality. If it z:.ould be.co7-c necessary for yclA to pl,ce on your credit an amount greater than the actual balance, we would rediscount a part of the port-folio eetablis,ed for our needs, in order to complete the sun intended to honor your drafts. For this first ,-)cration, and heir. :7. inthe present cir- custances, wc. would be inclined to assure you guarantee of ex- chage. 71-lis guarantee being susceptible of undergoing ::c1J remittance, there would be ns opposition on cur ..)art to having this old denosite in the of Fr,-.nce in the name of the Federl Reserve 13f-:r of New York. G. Pallain. ,ar Mr. strong: Your letter of August 1st reached me only on the 22nd after a considerable delay. I am very glad to learn that your health is improving little by )III. ittle and I pray that you may sooner or later recover it completely. Allow me to thank you again for the kind reception which you have j.ven to our delegate to New York, and the opportunities which you have secured for him as well with the Federal reserve bank as among your various friends in the financial world. Your help to him has been very valuable and we owe to you in great part the results which Mr. De Neuflize has obtained. Your letter speaks of our effort to develop the use of checks for the payment of accounts. Vie have, in fact, undertaken a campaign with this object. It is already yielding encouraging results but very far from those which we should like to see. It is very hard to change the customs of a country in such matters. The bank bill is such a convenient instrument and our public is so accustomed to it after more than a century of use that the change is necessarily very slow and we mist work at it with much care. After all, one should not criticize too much our old customs. characteristic of the race and a product of our historical evolution. They are To them we owe our ability in times of crisis to carry a very large amount of bank note circulation without our monetary health being seriously involved. This question of proportion is often too mach disregarded in comments which are passed on the present situation. Do not forget that even in times of peace we were using about eleven billions of money: namely nearly six billions of notes and more than five billions of coin. Reading your American papers gives Le the impression that you are meeting with the same kind of difficulties. I follow with much interest your efforts to introduce in the United States the commercial draft and acceptances, which would permit the Federal Reserve System to give a more complete service. -2- I am giving myself the pleasure of sending you some copies of the little propagandist pamphlet which we have issued, and since you are good enough to offer it, I will ask you to get for me your general laws brought down to the most recent date as well as the last plan for developing your clearing system. In regard to the cooperation of our two institutions, Mr. De Neuflize has told me of the conversations which he has had with you on this subject and which are the seauence of those which we had together in Paris last winter. I have not lost sight of the very interesting views which you then presented to me and I note with satisfaction the progress which they have already made in their development. Unfortunately the war and the obligations and reeLonsibilities which it brings us do not leave us free to experiment in its entirety with your plan of cooperation and of coordination of the efforts of our two banks with the object of assuring more stability in the monetary relations of our two countries. Besides, your Federal reserve law actually would not permit, I believe, the working of the whole plan. However, perhaps we could immediately begin a preliminary operation limited in its e::tent and in its object which would enable us on both sides to judge of the results which would be practically obtainable. You could buy in the American market, say up to 820,000,000. of drafts on France which we would collect for your account. The proceeds would be carried to the credit of an account which we would open for the Federal Reserve Bank of New York, awaiting the employment of it in the discount of prime paper. If it should become necessary for you to draw upon your credit for an amount in excess of the balance available, we would rediscount a part of the portfolio established through our efforts in order to complete the sum necessary to honor your drafts. For this operation and in view of the present circumstances, we should -3- be disposed to guarantee the exchange for you. As the result of this guaranty might be gold exports we would have no objection on our part to having this gold left on deposit at the Bank Of France earmarked to the Federal Reserve Bank of New York. :pith best regards, etc. (Signed) G. Pallain 7) do Dear er, T Strong: Your letter of iLuguat 1st reached me only on-the 22nd after a cons'' erabl delay. I em very glad to learn that your health is improving little by little and I pray that youy sooner or later recover it completely. Allow me to thank you again for the kind r000ption which you havo given to our delegate to New York, and the opportunities which you have scoured for him as well with tho Federal reserve bank as among your various friends in the finan, cial world. Your help to him has been very valuable and we owe to you in ;;rest part the results which kr. .0e Neuflize has obtained. Your lettor speaks of our effort to develop the use of oheogs for the payment o.1: accounts. have, in fact, un ortaken a oatrezic,-11 with this ol400t. It is already yiolding encouraging results but very far from those which we should like to see. It is very hard to change the customs of a country in ouch matters. The bank Mil is such a convenient instrument and our publio is so accustomed to it after more than a century of nse that the change is necesearily very slow and we mast work at it wither...toll care. After all, one mho id not criticize too mudh our old customs. oharooteristio of the race and a product of our historical evolution. They are To them we owe our ability in times of crisis to carry a very large amount of bang note circulation without our monetary health Leing seriously irrvolvod. This :election of proportion is often too mach disregarded in comments which are paroled on the present situation. Jo not foiet that even in times of los= we were usine about eleven billions of money naiely nearly six billions of notos and more Can five billions of coin. aeading your :mei-Joan le.pers gives ce the imkression that you are meet- ing with the same kind of difficulties. I follow with moth interest your efforts to introduce In the United States the oomerciol draft and aoceptunces, which would permit the Federal Reserve ::estem to give a more complete eory 4) ti 4o 0 I am giving myself the pleaouro of sending you some copios of t::e lit- tle propagandist pamphlet which we have leaned, and since you are good enough to ofrer it, I will ask you to oot for me your general laws brooght down to the moot rocont date as well as the last plan for developing your clearIng system. In retard to the 000perition of our two institutions, Mr. De Reuflise has told me of the conversations which h, has had with yon on this subject an6. which are th, soluence 01 thovo which we had together in I-arse lc..et winter. I have not lost F.ii3ht of the very interesting views which you teen presentod to mo and I note with satisfaction the j.rogress which they have already mado in their development. linfortunately the war and the obligations and roslonsibilities brings us do not loavo us free which it to experiment in its ontkroty with your plan of 000peration and of coordination of the efforts of our two banks with the object of assuring more stability in the monetary relations et our two countries. Besides, your Federal reserve law actually would not permit, I believe, the workino of the whole plan, However, oerhaou wo could itsoodiately begin a oreliminary oocration limited in its extent and in its object which would enable tics on both eidos to jud4oe of the reeults which wouio be 'emetically obtainable. You could buy in the awerican markot, say up to 420,000,000. of Orafte on irmnce which we would coil et for oour account. The pr0000ds would bo carried to the credit of an account which we would open for the Federal Reserve Lank of New York, awaiting the ompl000ent of it in the discount of erime paper. If it should become necessary for you to draw upon your credit for an amount in exoetok oho 4) of the uaiance available. we would redi!loount a part of the portfolio ottedal-leked 6--;) thr-iigh-car-erforts in order to complete the sum noceseary to honor your drafts. For this operation and in viow of the present circumstances, oe should 0 be disposed, to anarntee the exchange for you. An tho result of this duaranty mi. ht be gold exports we would hae no objection on our part to having tLie .:101c1 left on decOsit at the Bank c)- France eurmarkod to the Federal Reserve Bank of Xew York. Ath best re4;ards, etc. (A4ned) s. ;allaie COPY. BANQUE DE FRANCE. Paris, le 27 DECEUB.E 1916. Le Gouverneur de la Banque de France a Monsieur Strong, Gouverneur de la Banque do deserve Federale de New York. Cher monsieur Strong, J'ai bien recu votre tres interessante lettre du 14 Novembre. L'envoi m'en await d'ailleurs ete annonce par une communication de L. 2.H. Treman accomnagnee d'une serie de documents que jo vous remercie de m'avoir adresses. J'en fais faire la traduction et l'etude et, puisque vous voulez m'y autoriser, j'userai peutetre de votre obligeance pour eclairer, le cas echeant, certains points qui laisseraient quelque obscurite dans mon Lais aujourd'hui, je voudrais m'entretenir avec vous de la question esprit. au sujet de laquelle je vous avais ecrit precedemment, a savoir: le contours reciproque de nos deuxinstitutions au developpement do relations financieres plus etroites entre nos deux pays. Come vous le remarluez dans votre lettre, l'etat de guerre no nous permet pas d'escomnter, nour le moment, un developnement comnlet de ces relations. Du moires pouvons-nous essayer d'etablir des maintenant des bases d'exerience cui rendront plus faciles, dans l'avenir, lee extensions justifiees nar nos interets resnectifs. car, si Aussi bien l'heure earait -elle favorable crois les informations de presse qui me parviennent aujourd'hui meme, le Conseil de -eserve federale aurait autorise les Banques de reserve a »rendre des correspondants a l'etranger et votre etablissement aurait choisi 2. la Banque d'Angleterre come correspondalt pour le ..,oyaume-Uni. J'ai a peine besoin de vous rapneler combien it nous serait agreable si la. Banque de _-,eserve federale de New-York negociait tti arrangement du meme ordre avec la Banque de irance. Je comnrends les deux objections que vous faites a ma proposition premiere. Le scrupule que mettent les Banques de reserve federale a ne pas concurrencer sur le marche americai_ les -oanques affilioes par l'achat direct d'effets etrangers est absolument justifie. Je n'avais d'aillenrs envisage cette combinaison que comme moyen de transfert de vos disponibilites. Lais rien ne s'opposerait, a ce cue co transfert ait lieu dans la forme que vous indiquez, c'est-a-dire par cheques ou cables achetes sur le marche du change et dont nous soignerions l'encaissement. nous accepterions egalement de nous charger, ainsi que je vous l'avais offert, de l'investissement des sommes portees an credit de votre compte effets de premier ordre a 90 jours au maximum croes pour des besoins commerciaux, dument acceptes et dont nous garantirions le paiement al'echeance. Au fur et .a mesure de l'encaissement de ces effets, leur produit serait reinvesti dans les memos conditions, tant que nous n'aurions pas recu de votre nart d'instructions contraires. fin, lorsque vous croiriez devoir proceder a une liquidation partielle on totale de votre compte-courant chez nous, nous acquitterions vos dispositions ur la Banque de France negociees sur le marche americaLl jusqu'a ce que votre credit soit epuise. serait entendu que la Banque de ..,,eserve federale de New-York nous appliquerait un traitement analogue et que notre compte chez elle fonctionnerait dans les memes conditions et avec les memos garanties. Pious serions donc facilement d'accord sur ce premier DOLIt concernant l'ouverture etle fonctionnement de notre compte courant reciproque. S 3. Votre second° objection Porte sur la necessite dune entente pour quo toutes transactions qui seraient entranrises entre nos deux institutions soient basees sur l'etalon d'or. Les soldes posseses par l'une chez l'autre, on ice placements faits nar l'une grace a l'intermediaire de l'autre devraient toujours pouvoir etre liquides soit nar des moyens do change non=d: ou par des envois d'or, soit nar uric mise de cote do l'or depose come propriete de l'institution creditrice. lei encore, je crois pouvoir vons dire qu'une semblable proposition aurait chance d'etre acceptee nar le Conseil ,eneral de la Banque de France, dont je devrais eventuellement prendre l'attache si vous croyiez possible d'entrer dans la vole des realisations. Toutefois, ainsi que vousle faites remarluer, etant donnees les conditions actuelles, un semblable engagement devrait etrc limite au debut, exemple a or 40 mi1lions de dollars. Cette limite pourrait etre fixee par cablodramme. Laissez-moi esnerer que nousne sommes plus tres loin d'un accord comnlet et Ltle lee quelques objections, toutes de detail, ine vous suggererait cette nouvelle proposition, ne retarderont pas la conclusion d'u: accord pratique entre nos deux institutions. ..1)ans l'espoir que votre sante sera bientot tout a fair retablie, veuillezcroire, cher Lonsieur Stron,, a mes sentiments cordialement devoues. (3g.) G. Pallain. POSTAL TELEGRAPH - COMMERCIAL CABLES CLARENCE H. MACKAY, PRESIDENT RECEIVED AT DCLIVCRT NO. VIA I P. OFFICE, DENVER 20 -17th St., F;inest St Crannmer Bidg The Poiti.LTelegraph-Cable Company (Incorporated transmits and delivers this cablegram subject to the terms and conditions printed on the back of this blank. DESIGN PATENT Na 4052 32chp 43 612km Paris Feb 15 1917 y Time Benjamin Strong Gouvenor Federal ,eserve Bank Newyork, 4100 iontview Blv3 - , tt 4.40-77) 0 19.1.f Sommes informs 7,- ,..A r.r).4.1!(r. it , tun stop At C, -4. ii i...- ha 4AAAA, 4 .. T4 que notre lettre 27 Decembre A ete pre#.antee a 11,14/C-- el,/.4 4,71,1 agent consulaire.1rancais do,e-a- 3' etIlVt- Denvercolo 401.4-1-i- 1406e . stop DenverA 1 f k_.-. Ao Y iitt,, itaw-,..4_) ;le nous.a pas ete retournee '`.ii.,,,e- i_.,teaca -Auer,i-r-Ac. vous est elle ravenue0)stop envoyoris duplicata Newyork palla in Nofor inquiry respecting this message can be attended to without the production of this paper. Digitized FRASER through the Company's offices, and not by DIRECT application to the sender. Repetitions of doubtful words should be obtained FRENCH BANK LIKES PLAN iancij Mobilization with America Fore- en - Exchanges of Views Proceeding ery Favorably uris, Dec. 29-Georges Paliain, governor the Bank of France, gave the following cement to the Associated Press yester-, in renard to the report that the Bank Prance was, like the Bank of England, ALFRED L_ AIKEN 53 STATE STREET BOSTON, MASSACHUSETTS ,e mace a correspondent of the Fed Reserve Bank in New York: I have read In the papers a despatch I in Washington concerning the deslgna- of the Bank of England as a cor- pondent of the Federal Reserve Bank 'ew York, and the allusion in the same gram to the conclusion of an analogous angement with the Bank of France. So as we are concerned all that I can say you at the moment is that in Februa,-y t, when Mr. Benjamin Strong, governor the New York bank, made a trip to Eue I had occasion to talk with him at Igth about the possibility of closer relans between the French and American arkets under the auspices of his organtion. ',Mr. Strong is a broadminded financier, o seeks not only to organize for the ,.nt, but who knows, as Is befitting to good financier, how to prepare for .uture. I had a very clear impression while we on our side were thinking all of the situation of our finances 'd by the war, Mr. Strong was think1th good reason of the situation that he created for his country when the 1 of liquidation comes, with perhaps erse of the present state of things. ,- . nterest, like the interest of the United is evidently to prove the maximum ability in our financial markets and ,nt, by a combination adapted for that ,se, a too sudden change of equllin In international monetary opera"iat is why I was glad to engage in ,rsa,tions tending to a consideration ot tions most .favorable ' of the two countries in the period proceeding exchanges of views ,,nomic transition fromare war to peace. 515 1- the best conditions and we may hope ..hey will soon end in the mobilization en,11 and American sympathies on the !Trance." pping from Boston Daily Advertiser. Form 2903 Number )me Filed of Words WEST CAB UNION RAM THEO. N.VAIL. PRESIDENT CLASS OF SERVICE DESIRED Full Rate Half Rate Deferred Cable Letter Week End Letter Patrons should mark an X opposite the class of service desired; otherwise FULL RATES will be charged SEE BACK OF THIS BLANK d the following Cablegram, subject to the terms on back hereof, which are hereby agreed to C 0 P Paris 25. Benjamin Strong,Gouverneur, Feder-:.1 Reserve Bnnk, N. Y. Vous remercions de votre aimable lettre cinq mars et annexes. Stop. Etudions memorandum repondrons trey prochainement. Georges Pallain. POSTAL TELEGRAPH RECEIVED AT 420-1 , Ernest oc Graumer p.00 N E. MAIN *Rae TEL The Pet, COMMERCIAL CABLES CLARENCE H. MACKAY. PRESIDENT CABLEGRAM OILIVISNY NO. -,,leRraph-Cable Compan tlncorporateditransmits and deoers this caolegram subject to the terms and conditions printed on the bac? of this blank. DESIGN PATENT No. 40529 23 CHIT 1023E1. 69 IS APR 7 17 BENJAMIN STRONG GOUVERN1UR 1.EDFRAL PESERVE BANK OF =YORK 4100 MONTVIFW BLVD DENWIRCOLORADO P firoku(td-G, louckt) e? flolAh 77t &Wert N-h-- 5;r-PCM4m 6 Ca7 is al' PROFONDFXENT TOUCHE DE VOTRE EF,SSAGF van FIPRIME NOTRE JOIE DE th- idw (er) 9.10.11C. 1 /ca "P-o ee4e.rk elid -1. (on -iu.s,Jitit, 1kt !,:',ict-w-: VOIR L AMI IE SECULAIRE QUI LIE LES FUTSUNIS TT LA FRANCE ABOUTIR 7(.Lt emt_ C.,,DAILAA._rt--tn- 1, 6' kl...c If? a k a., et&R WU1 /t-af44114K- CF et-4-J-, el-J11,vV` er-f-L4)) C a.....e-1 , COOPERATION DEVANT ASSURER LR TRIOMPHE DE NOTRE cammuu IDEAL A TAGQt Co-el.a. kwA ci4et0 bill /16u, riD.<9xi c-i k,. i 4 -6:11.4AFN CORDIAL DE JUSTICE ET DE LIBERTE STOP.VEUILLEZ CROIRE A MOST gce ,.. ae au c:clitt eau ei -9 (07771-t 1 fa efv,y,t4,..t cu. I . ( ATTACHFITNT PT AUX VOFUX SINCERES qUE JP FORME POUR VOUS GEORCTTS PALLAIN Inquiry respecting this message can be attended to without the production of this paper. Digitized forNo FRASER through the Company's offices, and not by DIRECT application to the sender. Repetitions of doubtful words should be obtained c4.4. PV. 17SIN COMPAGNIE FRANCAISE DES CABLES TELiGRAPHIQL14 PARIS. BOULEVARD MONTMARTRE. 25 BROAD ST.. (ALWAYS o9.) TIALAROMIR 441 442 Snow. PULITZER BUILDING. PARK ROW. TALC/ROAM. 2049 4224.4.. LONDON. 3 MEPCER STREET. 12110 1319100 . T. TIL4,44.4 394 mmmmm u. TALIAHOAIL 1338 !Immo , . E. 21922040112. 1004 47u1vE*411r1 TRLAROAIC. at? 11114044.2. 44_ 113 RUE VIVIENNE. 24 ROYAL EXCHANGE. E. C. 2 MINCING LANE. NEW BRIDGE S RECT, E. O. BALTIC MERCANTILE AND 24 SOUTHWARK ST , S. C. SHIPPING EXCHANGE, E. C. 38 VICTORIA STREET ESTMI NETER. HAV 46 4,U CHILOU. BRE T: f 30-3 2 RUE DE CHATEAU. AN WE AGENCY, 14 RUE VENUS. ) ORLEANS, MASS. WESTERN AGENCY. 9ST. PIERRE. MIQUELON. NORTH LA SALLE STREET, CHICAGO. ILL. WEENEY, TIME DATE 1,l3GRAP11 CA BLR. ollowing MESSAGE is received via 1-71 snhjstoit to the °auditions printod ou tl back hereof, which are satified and agBeed to. 89" PARIS 29 E ASSURE; k;T: TTABLii; R , NOUS S I H.F:URI.TX R, D C F FRI R S BLDG 17 AU F IL S L A CCM.; IL AU Fri:Fill, 7.TOUS STOP B IF; s CC RD TALiCiP1\11 PALLAIN ce the risk of errors or delays, please file any answer to this message at one of the Comhttp://fraser.stlouisfed.org/ offices.Messengers may be summoned by Telephone for Cablegrams FREE OF CHARGE. Federal Reserve Bank of St. Louis 7. FEDERAL RESERVE Office Correspondence BANK OF NEW YORK Date May 31, 1917. AP' To Mr. Strong Fr Mrs. Robinson Subject Cable to Mr. Strong from 1111111F "Rest M. Pallain reception we should have been so happy to offer to the father. Very cordially, Georges Pallain.' that *OAafivue - dt.4-*4"---4^ a 104.0 4Z--/ X44-47' Litat.i, yea + Cher Monedeur Strong J 'ai recta avec grand plai sir vi si te du Major MURPHY, qui m ' a remi s v aimable letre du Ier Juin Comore offici;:r americain et comm representant de la Croix Rouge des £ta a qui nos eoldats doivent tant de grat it a droit k toute notre sympathie ma a un titre de plus, puisqu'il est votre et VDUs pouvez e' t re assure que nous no efforcerons de lui rendre le sej our de aussi agreable que possible , Veuillez agreer, crier Monsieur ST 1 ' as SU ran ce de me s sentiments bi en co merit devoues gonsieur Benjamin STRONG Gouverneur de la Banque de Reserve lec de New BANK OF FRANCE Secretary of the Conseil Extract from the minutes Conseil General Session of the 26th of September 1918 Recalling the previous conversations with M. Strong, Governor of the Federal Reserve Bank of New York, concerning the conclusion of direct relations between that Institution and the Bank of France, M. le Gouverneur communicated to the Conseil the resolutions of the meeting of the directors of the Federal Reserve Bank of New York tending to the opening of a reciprocal account-current between the Bank of France and the Federal Reserve Bank of New York. By reason of the interest which attaches to the establishment of financial relations between the American Federal Reserve System and the Bank of France, M. le Gouverneur thinks that the Conseil would certainly be disposed to receive favorably the request of M. Strong and would be willing to authorize the opening of an account of the same nature for the Bank of France on the books of the Federal Reserve Bank of New York. M. the Gouverneur proposed the adoption by the Conseil of the following resolutions: The Conseil General of the Bank of France: "Being in possession of the proposition of the Federal Reserve Bank of New York tending to the opening of a reciprocal account-current is happy to give its authorization to the establishment of business relations between the two Institutions and to thus bind more closely the Franco-American ties in international financial affairs." The Conseil fully agrees to the Governor's propositions and adopts the above resolution, Paris, Octobe General secretary, 1110 BALI: Oi FRAECi, GICTSONak 0/'0'011100 Dear Lir. Jtrong: ' Llsewhere I reply officially to the letter in which you kindly sent me a copy of the resolutions of your directors on the subject of opening a reciprocal account-current between our two oanks. But, I wish to tell you personally how happy I am at the ueginning of a realization of the ideals which you and I have held since 1V16. While the American Republic was still outside the great ..tlropean conflict you had a very clear idea of tLe community of iueals and of the solidarity of interests existing between our tr.o countries, ana you nave hoped that this solidarity might oe confirmed in the financial world. I know with what perseverance you have devoted yourself to the lursuit of this aim. Believe me, on my part, every effort will be made that arrangements of which we have laid the foundations shall develoE and end in the establishment of closest bonds. We will consider with the greatest care all suggestions wnich you were good enough to make us, when circumstances permit us to take up again the pledged negotations. In the mean-tine I will make a study of the text of your agreement with the Bank of .Lnglanu., which Sir Brien Cokayne has sent me at your request. (2) General Secretary to :dr. Strong. Oct. 1, 191.) I regret that your health has not permitted you to come to Paris this summer, but hope that it is i :proving more and more. It would have ,,een a pleasure for me to take up with you again the talks which I treasure as a pleasant memory. You are, yourselZ, i am sure, experiencing a lively interest in seeing France at this time. You say that at such a distance it is difficult for us to comprehend the enthusiasm which animates the American nation. dust the same, I douot if you are able to entirely calculate the feeling which exists here in regard to the United States. army Ueveloi The glorious exploits of your valiant more each day that cordial sympathy towards our generous Ally. Very cordially yours, G. rallain. 1:11{1/AL.p -ran-ce -3,e.anytte.. 29 Jan v /QZ 4111 ae r Monsieur Strong,s'N,-;?491 Vo txr- slealkte1 VIC 3 I De cerabrie m est bie:i parvenue, ainsi qu'fi),\1' ouv rage du Pro fesseu r KEuriENBIt, dorykeNW'ra' a ,::ongai t ,aAt 1 envoi Je viens deja de lire la. remarquable preface dia-i s laqu el le vous presen tez au puLli c cet expose du eye teme de reserve f ede rale . L'ipiorance (3,11 1 'on est gene ralement - en =,'u rope su rtou t - de evoiu - ti on du regime ban cad re des :;tats ii,iis, m' a comme vous souvent f rap pe L' ou v rage vierit a point pour eclai rer cette question si importante de M Je vous reme rcie u'avoi r pense am le faire connal tre et je vous prie de croiie cher monsieur STRONG a rues sentiments bien co nil al e men t de you e a a 1 1 NB 111641 NI 1 Monsieur STRONG l'Yer) TRANSLATION of Memorandum delivered to Mr. Strong by Mr. Pallainle secretary August 20, 1919: We are lacking precise details which would enable us to determine exactly the expense of the shipment of the gold. In fact, we have no knowledge of the 10 present railroad rates abroad. Besides, the cost of trans ortation is the smallest part of the total expense, into which enters above all the cost of insurance. advance. That, however, is variable and it is difficult to find it out in Nevertheless, taking as a basis the expense of previous shipments to Spain, we suppose that the expense for the equivalent of 10,000,000 would not exceed the following amounts: 1. 2. 3. From Brussels to Paris, From Amsterdam to Paris, From Paris to Madrid (insurance Paris to Madrid, transportation Paris-Irun), 50,000 70,000 125,000 The shipment from Paris would be made by the Bank of France when it had received the order from the Ministay of Finance. It is calculated that it would take about ten days to arrive at Madrid. As soon as the Bank of France should make known the date when the shipment would be made, it would be necessary that steps should be taken at the Ministry of Finance to notify the Bank of Spain through diplomatic channels of anectv and hour of the arrival at Irun, where delivery will be taken over by the agents of the Bank of Spain. 4.4 1116A4 AmouultunkA 0181AAAAti (k ,; t-tAAA-45WI- wAr crt:(.4 cm I otiLat c t)P dADAA,:u oL et,0 do,k oG 4.4 eciaudu td;A-1- Ftri,o1 cu `cA)..uitcu.t vaAADNito (} OL\ CAN DkActst. t-t sat d olk,klm.tr tariktQl (;41.1A,. HatQAA,8 c,ux\fi u IAAAAA Lutfro-44uu 10.1 Cu ,AA. ik0A14 JkAA__ oLk (3 10 IAAACIVP 114,U 4A VUL tkitNithaAidl 4-6.wtAA-uk 1AijAr NA,Luta7 A °: c1/4- kAAAA-eAA, 31; Lim kAA,uu ta-4-ctA,4. kruuwouk,Guu' GIL lAck,W), NAM' Podk;A Sso.000 '1 0. 6-u-0 Akuutown_ tukit,L14 TaAii.ThutkAA) I2S'Auo, it .14 wkiii6.t 6,41t04) klitAL kOWW, PoAil oUtotj- r O ttx d eik.A CkJ,t as_ cki. m eLbAAL HAOLA-Af tv_A_Sfts w (-0.; ors Ct-4 cr-LLA4 Ita-1.1A ellikikk;AL t a cta 0,tuilucji ate, t IV-AA CvAi okit (1\-& AAAA 0.1:a k;,k,k4uti alpkA CUM \ 111)- ),04- u d c; Prt-a- cAA,v;t 4-4n;41 or uku. c(vik.ciA ct), sAf9A-0 CkA.utIA CIAAA_ I 9 Sept emb re 9 Cher Monsieur STRONG, 'Dien recu vo tre le tt re m'annongaat J -moi vous dire vthLai tresee proz chain re tour en Ame rique vovoi taerdepart pour Lond re s car j 'eusse vivemen t your re n 'avoi r pas eu le plaisi r deavant ra 'entre tenir a nouveau, ave c vous, des qu( s tions qui n tiennent a coeur dans l'intert!t reciproque de nos deu et denos deux institutions Je veux e ape re r que les con stan ce s vous rameneron t biantot a Paris et que nou ce sujet Je vous remercie ue l'interet que portez a mon e tat de sahte Je vais main te nan t beau c rons reprendre nos conversations 4. mieux et suis en voie de complet re tabli sseicient Veuille7 agreer, cher Monsieur STR l'expression de :nes meilleurs sentiments Monsieu r EiElTJAMIN STRONG Gouve xneu r pie la Federal Re 8-e rye Bank de New-York , 4, Form 2875 UNION WESTE ECT UNITED STATES S/GL6-AMERICAN ,141 CABL Tiz WESTVwERN UNION NEWCOMB CARLTON, PRESIDENT GEORGE W. E. ATKINS. FIRST VICEPRESIDENT at 16 BROAD STREET, NEW YORK 2z PARIS A693/24 34 I STRONG GOUVERNEUR FEDERAL RESERVE BANK NE WORK OLE ADDRESSE POUR IDEL ET NOUVEL AN 7,ES VOEUX LE S PLUS CiiAL- ET VDUS PRIE DE CROIRE A :ES SEMI:EMS DE BIEIT CORDIALE THIE GEORGES PALLAIN. 79 abt,Fer- )1( los uye_ FEDERAL RESERVE BANK F NEW YORK a # /1 COPY Paris, Cctober 1, 1920. Dear Mr. Case: Upon my return from the country, where I had been resting for several days, I found the courteous telegram which you were so kind as to send me upon the occasion of my retirement. Permit me to express to you my very sincere thanks and to ask you to convey them to your colleagues and associates of the Federal Reserve Bank. This expression of sympathy has touched me deeply. I have been particularly alive to the strength of the cordial relations which I have been so fortunate as to hold with your institution and of which I retain the most pleasant memories. I am convinced that these relations but grow closer and closer, considering the mutual interest of the banks of issue of America and of France. Please accept, dear Mr. Case, the assurance of my highest regard and of my most cordial sentiments. (Signed) Mr. J. Herbert Case, Federal i'.eserve bank, New York. G. Pallain.