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Al7NO AOC 44

Form 2138





















APril 2, 1919,

Dear :Jr.


I am anxious to get an expression of your views as to the possibility of

our getting Mr. P. B. Saunders of the Commercial Trust and Savings Bank to do some

work. in Louisiana in connection with a proposal now being shaped for federal


tion designed to establish a financial budget for our Government.

The work required will not be very onerous, but it will need the services
of a man who uan develop an organization for the purpose of some little educational
and publicity work to bring about a better understanding of this
be necessary to raise a small amount of

It will


money, and, generally, to carry

out the

program which will be laid out by the organization at the New York Headquarters.
It needs the services of a man who is interested in tlie economic aspects

of the Government's finance, and who is sufficiently interested in the subject to be
willing to devote some time and energy to bringing about an improvement.
be preferable to have some one who would be capable of

on this subject, and


making an occasional address

who would be willing himself to study and understand it by an

examination of literature which will later be furnished.

Do you think

Mr. Saunders could undertake this work successfully?

J. H. Yulton, Esq.,
c/o The Lational City Bank,
55 Wall street. New York.





My dear Governor Strong:
I just want you to know

how much I enjoyed your delightful dinner
last night and your very interesting talk
as well as that of Dr. Schacht.

It was

good of you to include me in your party which
proved such a happy occasion for everyone.
With kind personal
regards, believe me to be,
Yours sincerely,
Gov. Benjamin Strong,
33 Liberty Street,
New York City.







copy of cablegram

July 16


(Addressed to Mr. Mitchell)

From Mr. Durrell

National City Bank of New York Havana Cuba (Received July 17,1923)

Federal heserve Boston Mass. U.S.A. has accepted First National offers

quarter in their local office and latter through Harding trying to secure
Atlanta Ga. agency also


Have offered Atlanta,,Ga. vault and office space gratis


McCrary favorably impressed and will recommend acceptance to his board
next Thursday although he considers our vault undesirable


Have assured him we will have new quarters and modern vault within 18months

and will place same at Atlanta, Ga. disposition


Suggest your cabling Atlanta, Ga. confirming my offer and expressing hopes
of its acceptance


copy of telegram

New York,

July 17, 1923.

M. B. Welloorn,
Governor, Federal Reserve Board,
Atlanta, Georgia.

We are advised by our Vice President Durrell resident in Havana that
Federal Reserve Bank of Boston contemplates locating in offices First
National Bank of Boston Havana and that through Mr. McCrary Durrell has
invited your bank use our offices and vault space gratis stop This
We contemplate new building
confirms Durrell's invitation stop
in Havana in near future and if you conclude join with us will make
special accommodation for you when we build stop While above arrangement most agreeable to us we raise the ouestion whether under all the
circumstances it is not more logical and dignified for Federal Reserve
Agencies to have joint offices and vaults in a building of their own
Of course if
rather than affiliate with any other institution
Boston joins with First National it is more than logical that Atlanta
should join with us.
C. E. Mitchell,
President4 The National City Bank of New fork.


of New York

New York, July 17, 1923.

My dear Mr. Case:

I enclose herewith copies of a cable received this morning
from our Vice President Durrell resident in Havana, and of a telegram
I have sent this day to Governor Wellborn of the Federal Reserve Bank
of Atlanta.

We are at resent the agents of the Federal Reserve Bank of
New York in Guba, and that fact is generally known throughout the Island.
We assume that the entry of the Federal Reserve Bank of Boston and the
Federal Reserve Bank of Atlanta in Cuba will mean the withdrawal of the
.Agency arrangement we now have with you.
While that is to be regretted,
we can be philosophical regarding it provided that when the new agencies
are made active they set up their own cuarters, independent of any other
commercial and deposit bank operating in Cuba.
To have our Agency
arrangement withdrawn and have the new agepcies established with the First
National Bank of Boston, thus giving to that ban1 . a. wholly unjustifiable
prestige, is an unthinkable injustice to us.
The new Agencies should
unquestionably be independent, but if the Federal Reserve Bank of Boston
elects to use the offices of the First National Bank of Boston, it is only
fair and just that the Federal Reserve Bank of Atlanta should locate with
us, and as suggested in Mr. Durrell's cablegram, we would be delighted to
give them office and vault space gratis.

If you see this situation in the same light as I do, I would
very much appreciate your using your influence, first, to have independent
quarters for the joint agencies of the Boston and Atlanta Banks, or, in
the event that that seems impractical, that you will use your influence
with the Federal Reserve Bank of Atlanta to have them accept our invitation.
May I add for your consideration the thought that with the Federal
Reserve Banks becoming active in Cuba for the first time, and looking to
deal with all banking interests in the Island, it is most to be desired that
they present themselves before the public as an independent entity rather
than as directly affiliated with any American bank, but if they do affiliate
with any, it is to their greatest interest to affiliate with a bank which
is not new in its operations in Cuba, but whose prestige is recognized
everywhere, and which has been a part and parcel of the Cuban financial
structure long enough to have obtained the complete confidence of this
rather timid and skeptical people.

Mr. J. H. Case,
 Deputy Governor, F.R.Bank of N.Y.,
15 Nassau St., New York, N. Y.

Yours very truly,

(Signed) Charles E. Mitchell.

July 19, 1923.

Charles E. Mitchell, Esq.,
President, National City Bank,
New York, N. Y.

Dear Yr. Mitchell:
Some days ago in the course

of our conversation relating to the

deposit of

the Benkovni urad Ministerstva Financi of Prague, ycu ex2ressed an interest in the

reasons warranting the establiehment of

relations between the Federal Reserve Bank

and foreign banks of issue; and at the same time asked what benefits
Balk derives from its membership in the Federal Reserve System.

I shall attempt to

the National City

These two queetions


7elations of the Federal

Reserve Bank with Foreign Banks of Issue.

In accordance with the terms of
Bank of New York has

the federal aeserve Act the Federal Reserve

entered into reciprocal relations

portant foreign banks of issue. In so doing it


several of the more im-

acts in the position of manager for all

twelve Federal Reserve Banks, or such of them es desire to participate, rather than

in a purely individual capacity.

At present such relations are

effective between

this bank and
Bank of England
Bank of France
Bank of Japan

Bank of Italy

Swiss National Bank
Banrovni urad

Netherlands Bank
Java Bank
Nationel Bank of Belgium
Sveriges Riksbank
Ministerstva Financi in Prague-.

Agreements with these banks have been entered into at intervals during 4
period of about seven years.
only occasionally active;

six are utilized almost exclusively for

and one, whice may be regarded
lection account.

Some of the aeccunts are now inactive;

others are

investment purposes;

as still in a transitional stage, is utilized as a col-

From these relatively dormant accounts we frequently observe



Nationel City Banke


New York City.

transfers are made to more active accounts maintained by foreign benks of iesue with
member banks.

In forming relationships with foreign banks of Jesus end in tarrying on

business under the agreements made, the Federal Reserve dank of New York has been fully

aware that it is undesirable for it to compete with its member banks in foreign exchange
business, even though such business is permitted by the Act. The volume of the trans-

actions carried on by us is limited by the terms of the agreements, or is subject to
our control.
The free belanses to the credit of eight foreign banks of leaus on June 50
lest amounted to $2,465,696.37 which comperes with ebout le450,000,0C° of balances

held in New York City for foreign clients by a limited number of banks and benkers

who recently reported to us. On these belances we pay no interest. The bulk of the

transactions carried on by us for these banks relatee to the purchase and holding for
their account of United States Trensury certificates of indebtedness, which on June SO
amounted to t15,515,000, and bankers asceptences, which on the seme date emountea to


This aggregate of about $50,00C,000 compares with about $9CC,0'e,0'0

of loans and securities held in Nee York City for the account of foreign clients by a
'Imited number of banks end ben'iers who recently reported to us.
Under the inventment arrangements no obtaining we charge commissions of

1/4 of 1 per cent, per annum en bankers acceptances purchased for the account of

foreign banks, and in return therefor we guarantee payment at maturity an Agree to

repurchase such bills at the market prior to msturity upon reesonable notIce. Benkers
acceptances so hendled by us are of the acme character as those we purchase for our
account, and bear e banking endorsement.

Upon purchases of certificates of in-

debtedness se charge a commiesion of e/e of I per cent. per annum, and in return

therefor agree to repurchase at the shrket prior to maturity upon reasonable notice.
Also, we have from time to time held gold under earmark for the account of certain

foreign banks of issue, but at this time no gold is so held.

The foreign banks of

are prepered to act for us in their markets under similar conditions, when re-



National City _peak,
New York City.

The foregoing gives very briefly the neture of our present relations with

foreign banks of issue. The principles underlying the establishment of such relations

relate entirely to the steadying of credit and
tion of the flow of gold.
for many years.

the foreign exchanges, and to the regula-

They follow the traditional lines laid down by banks of issue

Inasmuch as operations under them are in the interest of international

commerce and finance, they are also of direct benefit to the

bunks having international

relations and of indirect benefit to financial institutions of all kinds.
It is recognized


under present conditions international banking ar-

rangements cannot exercise the seme stabilizing

effect to be exeected under conditions

in which there are free international movements of geld.
was passed it

Indeed, when theFeserve Act

was assumed that the Peserve Banks would exercise the powers granted to

them in meeting ordinary rather than present extraordinary conditions.

of such powers by foreign banks of issue

toward the sueport of their

The exercise

under pre-war conditions was often directed

exchanges and the partial control, at least, of gold

movements; and when the exchanges were at levels requiring adjustment banks of issue

sought to effect such adjustments teroughthe medium of their portfolios of foreign

bills on gold countries. Sterling bins were formerly extensively eceuired for
purpose and London was the erincipal center for such operations.

more effective

control over movements of gold and exchange (and


It is believed that

hence credit) can be

brought about through cooperation between the various banks of issue, and that such
a procedure is preferable to one where we would transact business in England, for
exempla, through

private banks, and the

through private banks. The principle of

Bank of England transact its business hare
cooperation between banks of issue was recog-

nized as most desirable by the Genoa conference and has been followed by

the sank of

England as well as by a large number of other banks of issue, which are now-establish-

ing relationships with each other.


Today this country, because of its free gold market, has assumed an lever-tent
position in connection with such operations as the foregoing, and in consequence it hes
been to the advantage of the various foreign banks of issue referred to above to con

National City Bank,


New York City.

duct in this market the kind of operations which banks of issue normally transact

But the Federal Reserve Bank of New York has had practically no

occasion as

yet to use its foreign correspondents for the transaction of such operations, though
they are provided for in the reciprocal agreements now ineffect.


doubt, how-

ever, the time will come when it will be desirable for us to make use of them; but we
cannot expect the

foreign banks of issue to perform

for us in future such operations

unless we are ready to perform similar operations for them in this country at times
when conditions melee such transactions

desirable or necessary here.

Furthermore, as

the aim of most, if not all, of the banks of issue is to create steadier currency and
credit conditions in their respective countries, and as such steadier conditions in

foreign countries are very much in the

public interest in this country

interest of American business, it is to

that we perform here for foreign


banks of issue such

proper operations as they, in endeavoring to steady their conditions, find it desirable
or necessary to


thronge the goderal Reserve Banks.

This country did in fact derive

finance from the reistionships we

material benefits

established with


the period of war

certain foreign banks of issue.

Some of these transactions, carried on by them for the benefit of this country may be
enumerated as follows:
In 1916, at the request of the
Holland, Sweden and Norway. United States Treasury Department, the Federal Reserve Bank
of New York opened current accounts with de Nederlandsehe
Bank, Sveriges Riksbank and the Norges Dank for the purpose
of receiving therein funds for the use of the Treasury Department and disbursing officers of the War Department.
and India. - During the same year, important arrangements
*ere entered into between the United States and the Governments
of Argentina and India to stabilize the exchanges between those
countries and the United States. Under these arrangements New.


York banks deposited dollars with the Federal Reserve 3ank of
New York, which in turn gave instructions to the respective
governments to pay out the equivalent in peas or rupees to the
beneficiary designated by the purchaser of the exchange. Up. to

the end of 1918 the equivaleet of $59,00,000 in pesos (of which
the National City Bank transferred to its Buenos Aires office
$9,000,000) and rupees 202,500,000(of which the National City
Bank and its affiliate, the International Banking Corporation
took rupees 26,000,000) were sold and transferred with a moot
satisfactory result in the stabilization of exchange between

the United States and those countries.


National City Rank,


New York City.

Bolivia and Peru. - Similar arrangements with the governments of

entered into. Under the Bolivian agreement, which provided for a maximum of $5,000,000, we received
deposits totaling $4,500,000. No operations were carried on through

Bolivia and Peru were

this bank under the Peruvian agreement.

Spain. - In 1919, at the re,uest of the

United States Treasury, we
Opened an account with the Bank of Spain to receive the pesetas
which we purchesed es fiscal agents of the United States to retire
peseta certificates of indebtedness issued by the Treasury in
connection with the Z50,000,000 peseta credit which was established on behalf of the Treasury in 1918 for the purpose of
purchasing war supplies in Spain.

Germany. - In May 1919 we purchased from the United States Grain Corpoin gold (approximately 730,000,000 gold marks)
which it had received from the German Government in payment of
fod stuffs bought in the United States. A deposit of 290,000,000
marks of this gold was made with the National Bank of Belgium,
Brussels, an& the balance, 440,000,000 marks, with de Yederlandsche
At our request these banks examined and weighed
Bank, Amsterdam.

ration *173,000,000

the gold coin as it was received by them. The Bank. of England

V,6 transfer of this eold from the continent to London
and as it arrived at the Bank of England, it was reduced to bars.
Of this gold, $61,800,000 was sold to New York banks for exportation to the Far East, and would have been withdrawn from this
country if it had not been available in London. Of this latter
amount the National City Bank and its affiliate, the International
During 1920, the
Banking Corporation, purchased $3,,00,000.
balance of the gold, namely *111,200,000, was shipped to New York
by the Bank of England.


Similar operations carried on by us for the benefit of foreign banks of issue,

include the following:
lagland. - In June 1917 the

federal Reserve Bank of New York paid
to the National City Bank for account of certain English banks
*52,000,000 representing a loan with interest maturing in New
York, and accepted in return earmarked sovereigns of equivalent
value in the Bank or England. During 1218 all hut . small amount
of this gold was either shipped to New York or furnished to the
Treasury ne,artment for the use of the United States Government
or its allies in Europe.

France. - In November 1920 we advanced $3,000,000 to the Bank of France
against a like amount of gold which they earmarked for our account.
This gold was shipeed to us in March 1921 in liquidation of the

In swam ry of the foregoing it may be said that the transactions which
we carry :n for foreign banks of issue involve comparatively small free balances upon which we pay no interest;

that occasionally we earmark gold for

National City Bank,



N3W York City.
their account;

making investments

that the main oprations are those connected with

for foreign banks of issue in the open discount market, for which we charge commiesions;
and that unless we stand ready to perform such operations for them at times when

it is

advantageous to them to make investments or have gold held under earmark in this coun-

try, we can scarcely expect them to act for us at timee when it may be advantageous
for us to make investments or have gold held under earmark abroad.

The present effect

is to encourage foreign investment by banks of issue in

market, thereby

broadening its support and

our discount

strengthening its position in world finance, and to add

some measure of stability to international finance operations, now necessarily disordered.

Benefits derived from Membership.

The second questien you

raised is whether the National City

Bank is getting

any compensatory advantages from its membership in the system and for the large
kept with us

without interest, at present about $56,000,000.

interested in making the following analysis of the way in which


I have been much
it seems to me the

system has effected the business of the City Bunk, especially because we hey° not had
occasion heretofore

to leeks so detailed a study of


relations with a vetropolitan


The National City Bank's last report of condition, June 30, 1923, shows
on $461,000,000 net demand and time deposits, subject to reeerve,
keep and was keeping, reserves of about $56,000,0e0.



it was required to

These reserves are figured at

rate of 13 per cent. on demend deposits and 3 per cert. on time4eposits.

If the reserve
in effect, namely 25

now be


requirements prior to the Feelers' Reserve System were now

per cent. on both time and demand depocits, the City Bank would

on its present deposits

reserves of

about $120,000,000 in the


of cash in its vaults.
On these figures membershin in
in reduced reserves elone.

$2,500,000 per


the System shows a saving of about $64,000,000

Figured at 4 per cent, this amounts to a. saving of over

Nationsl'City Bank,



New York City.

To put the matter in another way, we have looked up the tAty Bank's condition

report of October 31, 1914, just prior to the inaoguration of the rederal Beserve

We find that its net deposits subject to reserve were then 1217,000,000

against which it was reeuired to carry reserves of about $54,000,000, and was actually
carrying about $67,000,000.

In other sords, by reason of the exietence of the feders1 neserve System and

theCity Banks membership in it, it has not been obliged to set aside any additional
unproductive reserves to support its vastly expanded busines ,, but is condueting it on
substantially the same reserves as were !aeld before the system opened.

It is interesting tc note the changes which have occurred from 1914 to 1923
in two classes, of t"..

ty Bank's deposits:

Time Deposits.

$62,000,000 are reported.

In 1914 no time deposits were reported, whereas now

The development of this olass of depoeits



due to the reduction of the reserve on such deposits from 25 per cent, to 3 per cent.
Deposits of Banks and Bunkers.

On the date of these two reports the

City Bank's deposits from banes sod bankers were as follows:
Oct. 31, 1914

Due to national banks

June 30, 1923.





Due to other }Jenksbsnkers


As the 1914 report does not show hether deposits from foreign banks are

included emong those reported as "other banks and bankers," comparieon between the

figures in this group is impossible. But wit.b respect to the deposits of nstional
banks, comparison is possible.

It will be sec-ailed that when the rederel Reserve Act

was passed it was anticipated that the city banks would lose a very

of their

large oroportion

out-of-town bank accounts, particularly those of the national banks, because

all of these had to join the system.

The figures of the 4ationa1 City sank, showing

substantially no change in the volume of out-of-town nationsl bank balances, conform
generslly with the experience of other New York City national banks.



National City Pank,


New York City.

if the Bystem were not in existence end if the war had in some way brought ebout an
expansion of bank deposits equivalent to that which has actually occurred, the City
Bank's out-of-town-natioael bane balauces would now be considerebly larger. But the

point I want te make iE teet the greet redection of these deposits, which was anticipated
when the Federel heuerve Act was passed, did not occur.

Judging from whet other city banks tell us, out-of-town bank deposits are now

on a more profitable and satisfactory basis than they wore prior to 1914. The Federal
Reserve Bank hae relieved the city hank e ofmany mechanical and expensive services which

they formerly ead to perfcrm for their out-of-town banke, such ae shleping currency,

collecting checks and collecting notes and drafts. On the other berel, its rediscount

and other facilities nave enabled the city banks to give better service to out-of-town

Currency end Coin.

e. adequate supply of currency and eoin is now elweys aveilable at a moment's


It is notlanger neceesery for the Sat1en41 City ?enk to carry more than is
required for till money, ely four or five million dolltre. Furthermore the bank is

relieved of the labor, expense and responsibility formerly involved in shipping currency and coin to out-of-town banks. On the City Rank's inotructions and at our expense
we make e great many such shIcmnte to banks in this district.

Shiements of coin end

currency to banks in other districts are made by the fieserve Bank e of those districts,

also at their expense. de and other te)serve Banks also handle the hulk of the large
incoming shipments of currency which were fcrmerly sent tc roe TOrk City banks, thereby

saving these banks further labor, expense end responsibility.
lire Transfers.

Th5 'lational City Bank uses, to the extent of several millions of dollars

daily, our wire transfer system, which is carried on at cur ex
of this system fun es are transferred anywhere in the

without the shipment of currency.

Througe'the use

country, ecroee district lines,

This is a facility whice is highly regarded not

only by the banks themselvee, but by their customers.


Netionel City Sank,
kOw Iork eity.


Collection of Checke.

The Netienel City 3auk collects through the eederel Reserve Sretem delly
:I the neighborhoed ef $5,0'0,000 IA checks,. Of these about #5,er,W),OCC aro direet send

in gs to other districts.

The Syetee reduces the time of collection of meet of then)

checks by about one telt'. This is if great importance) to the Nationel City Peink and to

its ousters.

Furthermore, routing practically everything through the. yetem !les

doubtless relieved the City Bank of a considerable emoent of 1b-r, expert and other,

Our collection facilitiec have eleo enabled it to 'loo
elmoet entirely the many collection account it used formerly te eerry .t.h cetefe
in its treneit department.
town correepondente.

In the two condition reeerte above referred to it eneeers thet

now, with greelly increeeed bUeineee, the City 3en. has ease then t1,0CO300..e due free
other banks, wherean in 1914 it had $14,000,000 due from other banks.

The ability to rediscount eseures Lae Netionel City Bank at all time of u
dependable seeely of credit and currency which eermits it to conduct its beeineee eitb
mucb greater eesuranee then formerly and to keep its funds inveeted much more closely.

It has used this privilege freely when neceeeary. For a eerine of two yeere, from the
fall Of 1919 to the fall of 1921, it was t oontinuous borrower end in January, 1921,
owed ue as much as t165,000,000.

Foreign b-ins.
The eedorel }serve Act permitted national Osaike to open branches in foreign

countries and to inveet in share*: of foreigu trade beaks, slice as the Intern -tionel
Banking Corporeticn.


4.thile such leeisletion might have teen enacted independently of

the l'ederel hesseva Act, aa was the case in flax York State, nevertheleee this was part and

parcel of the whole conception of a laror, safer and more effective benkingbuelneas
for the United. States which the Federal Reserve Act contempleted.

The Act a7ao firet

gave national banks authority to accept time drafts. This would have been of little
value had the Reeerve banks not been reedy frem the outset to meke e market for the

bills and to make forward quotations for them, to be cabled to foreign countries.


Netionml City Bank,
New Icrk City.


great benefit to the commerce of the country, end the
privil eges have been of
then by the Netionel City Benk haa made its name and position
proaeit and wide l*e ° of


Irnown the

eghout the world.

It seems probable thet the ability to exercise these privileges has also been
instrumental to the eity Bunk in holding old foreign a'counts and in attracting new

Of couree, L

chent:e in the internetional finanoial position of the United

States in s 1914 has been the melor influence in attracting more foreign aecouets to the
United States; but the exictence ef the Reeerve System, providing an instant means

for converting baleneee and other oblieatione into gold, hes furnished a background of
confidence hion feraerly we leeline.

In this uoeriection, a very concrete edventaee which the cteserve System is

about to brine


the businesa of tee% City Pank is the saviaj of some $400,000 per

annum which ycu tell us rill result from carrying lower reeervee in Cuba when the Boston
and Atlanta resorva banks aetehlish their eeency there.
I neve meds no re'erenee to the very gr?at added factor of safety waieh the
mere sxistence of the eeeerve ystem /Inc injected into American banking. That its

benefits to tankine and buelness ere large, nearly all will admit. But you have asked
for e statement of the tangible benefits to member banks which can be figured in dollars and cents. le have often had to figure thin for country bankers and it has sometim s been hard to bring the balance into thoeredit column. But as I go over the debits
and credits for a :eeis York City bank I em astonished at the showire- it makes, and I em

inclined to think that the National City Bank, although a few millions of its depcsite
from foreige banks of issue say have been transferred to s, has profited from the
Reserve 3yatem relttively more than any otber member beeeuseit has intelligently taken
edvantege of all the opportunitiec fee- expansion and for wider service to American
business whie, the Act and the System provide.

Very truly yours,


Deputy Governor.




Office of Governor

July 19, 1923.

Dear Mr. Mitchell:

I have your letter of July 17th with the three enclosures, concerning the
Cuban Agency of Boston and Atlanta.
I have had the
of Boston, and from investigation made I find that the boston Federal Reserve Bank
is proposing to go into the same building that is to be occupied by the First National
The First National Bank of Boston is to have the ground floor of
Bank of Boston.
an eight story fireproof building, and the Boston Federal Reserve Bank is to occupy
Access to this room is not through the First National
a room on the third floor.
The vault to be used by the Bostan
Bank's room, but through an outside entrance.
Bank is to be independent of the First National Bank - in other words, while it is in
the same building, the agency will be entirely detached from the First National Bank,
and it would seem that this would protect your bank from the theory that you have that
it would be advancing the interests of the First National Bank of Boston to the
detriment of the National City.
I am advised, further, that this arrangement will only be made for the term
of one year so that if the agencies are a success and it is thought advisable to continue them, the banks themselves would likely want independent quarters, and I am
confident if the agencies are a success that the Board would likewise insist that the
You can see by
agencies be entirely detached from any other balking institution.
the above arrangement that the Boston Bank is in no way attached to the First Ratinal
Bank of Boston.
I am further advised that there is no other suitable place in Havana that
can properly take care of the Federal Reserve Notes that will be necessary to be
carried in that City in order to accommodate the agencies and the banks operating
through them.
Governor Harding appreciates the situation, but feels that there is no
You will understand that the Board has no
other alternative at the present time.
intention whatever of favoring one bank as against another and has every desire to
have these agencies operate independent of the influence of any bank and for the PUrpose of being helpful in the situation as it now exists in Cuba.
Assuring you of my appreciation, I am,
Very truly yours,

D. R. Crissinger,

Mr. C. E. Mitchell,
President, National City Bank,
New York, N. Y.



July 23, 1923.

Dear Mr. Case:

I enclose herewith a copy of a cable that has come in to me today from our
Vice President Durrell, resident in Havana, in which he challenges and comments upon
the statements made by Governor Crissinger in his letter of July 19 to me, copy of
which I sent you under date of July 20.
I have gained an impression that there is going to be a discussion of this
subject in Washington tomorrow, Tuesday, and if you can get these facts before the
Board in a formal manner, by telephone or telegraph, I will appreciate it very much

I am mailing tonight to Governor Crissinger, under confidential and personal cover, a copy of Durrell's cable.
Incidentally, I understand that the Atlanta
Board has adopted a resolution setting forth t
that both banks should be
located in the same building, but in a building in which no other banking institution
is located.
Their position, as I understand it is that the banks should join in an
independent location if Boston will " play ball", and if not, the sentiment is in
favor of accepting our invitation.
Yours very truly,

C. E. Mitchell.

Mr. J. H. Case,
Deputy Governor, Federal Reserve Bank of New York,
15 Nassau Street,
N. Y.
New York,

Mr. C. E. Mitchell,
President, National City Bank of New York.

July 23, 1923.

Contention that First National Bank Boston Mass, quarters only suitable ones available
for Federal Reserve use absurd.
Royal Bank of Canada Havana will have representative
in Washington Tuesday to offer all or any part Trust Company property which is very
well adapted for purpose.
Present quarters Canadian Bankcf Commerce in Barraque
building with modern vault available October first.
Believe suitable space including
vault can be obtained Mendoza y Cia building available at once.
If necessary we offer
gratis space sufficient for requirements with vault facility(ies) combined Boston
and Atlanta agency.
Maryl nd Casualty Company advises cost insurance our use and
that of First National Bank/
We feel position these agencies will be much stronger
if they jointly occupy independent quarters as it will serve to dispell opinion that
prevails locally that primary object Federal Reserve Bank of Boston Boston decision to
enter this field is to advertise First "ational Bank Boston. Have so advised Bullen


Copy of cablegram.

C. T. Mitchell.

July 23, 1923

Federal Reserve Bank of Boston, Boston representative now here and have urged him to
advise taking independent quarters.
Should Federal Reserve Bank of Boston Boston
persist intention to use First National Bank Boston quarters urge using every
means to secure Atlanta agency for our building.



July 24, 1923.


r. Mitchell:
I ac, in receipt of your letter of July 25, with

,hich you enclosed



lice President Jurrell's

gram of the same date.

For your information,the following telegram was

sent by me to Governor Crissircer today:
" Pursuant to your instructionr we h7Tve notified
the National City bank oftliew rork that their
designatiAl as agent and correspondent of this
bank in Cuba will terminate u7;.on the opening
of Cuban arencies by the Federal Reserve banks
of Atlanta and Boston. In view 71'' thid proposed
cancelation of this designation City Bant now
expresses the belief that Cuban agencies of the
AtInta and Boston bnk7s should by all mens
have sepatate independent quarters of their own
and should riot be located in a building occupied
by agency of other American bank. We heartily
concur in this view and believe it most imortaht
that Reserve agencies in Cuba have quarters of

their on wAch will be so located that their
relationship of independence of say other bank
will be unquestioned."

Very truly yours,


i. CAST,

Deputy Governor.

Charles E. kitehell, Esq.,
President, The Nrtional City 13,,,.nk of N.

55 Nall Street,
New York,

N. Y.



August 11, 195, in the Office
of J. H. Case.

Yesterday evening Mr. Mitchell telephoned me that he was negotiating with

Dr. Schacht of the Reichsbenk for the flotation in this country of an initial offer-

ing of Rentenbenk mortgage bonds ef a substantial amount, and that, in the course of
the negotiations, the City Bank had insisted that the mortgage seourity be deposited
with the Reichsbank as trustee; that Dr. Sfhacht had elbled that lest January he
had taken up with Mr. Jay, of the Federal Reserve Bea of New York, the general question of the propriety of the Feichsbank's serving as trustee; that Mr. Jay had
cabled Dr. Schacht advising Against it;
and that, under those circumst
Schacht was loath to adopt Mr. Mitchell's suggestion.

I looked up the correspondence here relating to the subject and found that
Dr. Schacht's inquiry related to an iesue of public utility eecurities; end I telephoned Mr. Mitchell that if he would come over here to the bank I would be glad to
show him the


I also told him that, so long ac he was in process of

negotiating with Dr. Schacht for an issue of hentenbenk securities, and so long as
he was going abroad Saturday of this week, I would give him en opportunity to read a
confidential letter on this subjectewhich Governor Strong had written to Mr. Jay
under date of July PO, 1925. (Mr. Harrison and I reviewed that letter end concluded
that there would be no impropriety in showing it, in its entirety, to Mr. Mitchell.)
Mr. Mitchell was extremely its contents and exeressed his cordial ap-

preciation of our courteay in permitting him to see it.

Mr. Mitchell stated that, in addition to having one or two of their senior
officers abroad at this time,conduoting negotiations with Dr. Schacht, the City Hank
had also sent over some of their counsel to consult with the German attorneys in

order that all

the essential points might be carefully covered, es this offering would
undoubtedly be followed from time to time by others, and they proposed to start off

Mr. Mitchell furthel' stated that the City stink

w.s ineistent upon herring the
bonds deposited with some trustee, and expreseed the opinion that, oeing to the close

relationship existing between the Reichabenh ead the Rentenbenk, it did not seem

proper to have the securities deposited with one of the joint stock banks.

I ed-

vised him that on that point we were inclined to Agree with his view, and that if the

Reichsbank should care to make further inquiry, we would say in substance that, while
we were governed by the information expressed by Mr. Jay lest January, we did feel
offering Was in e special category and entirely different from

that this particular

miscellaneous public utility securities.
At the conclusion of our talk on this eubjeet, I told Mr. Mitchell that

only a day or two previous I had received a communication from the Treasury Depertment
to the effect that the State Department desired information as to our relationship
with the Benkovni urtd Ministeretve at Prague, the basis of which inquiry, I underetoo4
was a protest made by Mr. Mitchell to the State Department about our taking that account.

Mr. Mitchell stated that this was not so, end thereupon gave me a full state,

ment of the facts, vie.'


- Me. elecnelipaity Bank,
and Mr. Case, Federal Reserve Bank.

Several days ago he received a direct coreanicatioe from the 3tate Department
in which they claimed that they had been advised that the National City Bank was extending
a bank credit of .:12,000,000 to the Bankovni and vas about to offer a 50,0100,000 Czecho'ovakian bond issue in this country, upon which procedure the atate Department did not
eeok with favor, kr, aitchell tnereupon wrote the 3tate Department that his institution

had not been considering a flotation

of a bond issue nor did they have a .1'12,000,000 (or
any other amount) bank credit extenaed to the Baakovni, but merely made the statement that
the City Bank had, a year or two ago, made the Bankovni a loan against gold deaosited an
Belgium (Brussels)) that subsequently the loan was taken over by the Federal aeserve
Bank nf 'ew York, and that he understood we now haksuch advance to the Bankorni in the
amount of -40,500,000.

Under date of August 10, Mr, Winston sent me the following quotation from
ler, Mitchell's letter to the itate Department;
" It is true that the National Oita Company has taken a prominent
part in the flotation, of the two issues of Czoonoalovakian aonds which
have peen lilaced In this market, The Government of Czechoslovakia has
also ie the ea,t rtaci besinees traiisaotioas with the Lateonal City Bank,
The latest tranlaction wee a loan aeainet the deposit of gold in Brussels
rude ba the Bank in April 1924 in the amount of 310,000,000, whieh had
been decreasee by the end of October 1924 to $6,0a0,000, This vas repaid
in November 1934, tae 4overtrnai1;, ne underetvaa,
tore partially used in connection with 8,ch repayment by borrowing
$5,000;000 feom the Federal Reserve eaaks, waioh leen we believe Lo have
been seaseventla inereasea by the Fedeeal Beseave eanks to 10,500,000
and to be still on their bolts,"

which seems fully to bear out the forenvinns

In thie connection Mr, Mitchell eitca a vora iatenestina episoae. He said
that when their loan to the Bankovni was Dula off he was advised that the lean had been
taken elsewhere, and he had the lepress!on, that tac loea hit bsen aede by aueclay's lank

As he had a close encrust understanding with Mr. Goodenoueh of the latter
bank, to enable them to "alay ball" together, he cabled Goodenough, exlressing surprise
at his (Gooaenoueh's) taaing over that loan that the aity Bank had been carrying; and was
of London.

very muCh chagrined to have aoceenorna eehle bean that Le

lie net aave the loan, and that,

upon inquiry, he haa learned that the loan was taken over by the aederal aeserve 3ank
of New fork,

Mr, Mitchell then expressed his conviction that our making this loan at all
ana especially at a lower rate than that Charged by the City Beak, was a highly improper
proceediralend that he aen praviousla expre3sea his views on that subject to Governor 3tron
1 informed him that our foreign accounts were limited excaasively to beaks of 13 sue or, as
in this case, to a arovisional bank of issue; that tae business had come to us entirely
'seat, after making careful inquiry as co the status of the '.ezikovrii and
taking into consideraticn the fact that it planned presently to become a bank of issue,
we had taken on the account in regular course, Further, that when we were asked to make
the aankovni a lean secured by a deposit of gold lodnod in Brussels for our aceouet, we
had carefully considered the matter, concluded that ette4 la loan wae ealasaane (siace ve
were fully authorized under the law to do so,) we had made the loan in qUestien,

I further stated that, as a matter of fact, the loan of the City Bank had heel
paid off and the City Bank's claim against the gold in Brussels released before our advanc
had been made,



and Mr. Case, Federal Reserve Bank.

that this was only

mr. Mitchell then took ocoasion to say
one of a number of
4140100weinswhida had oome to his attention and in whieh we were working
eee interests of our member banks; that he, for one, did not like it and had been aeked
ey several New York bankers,who felt as he didito take the initiative with a view to
showing up the unfairnees of the competition Whieh the Federal Reserve 3aak of New York

directly against

I told Len ITitchell that I was amazed that the president of the lergest bank
in this country took gaon a limited view with regard to the value of mutual relatioes
beteeen sae Federal Reserve Bank of New York and the important central banks of issue
abroad; that these relatioes have already proved their value an,: erouslee to be of great
public benefit in future,anu that it was most gurprisine to find himoarticularlyi, and
the City BankAgonorallyyso critical o: our action in this ani other ivgards. I 4entione,
membership in the 4stem was unquestionably a very valuable as3et to the
City Bank that it had enabled all city banks to make larger profits by reason of the
reduced reservesiand
et without such a wystem at this time he and other institutions
would undoubtedly be carrying much larger idle reserves.
I stated frankly
was a matter of wonder to many of us here that he, personally, appeared to assume so
critical en attitude toward the Federal Reserve Bank and its officers in practically
everything we did;
that we had reason to know he was in the minority in such an
opinion, and that of course his criticism of the bank and its management from time to

the tact that

thFt it

time naturally sifted in to us.

I then expressed the view that in the usual course of events certain of
our transactions might appear to run counter to the interests of our member banks, but
that the System was organized primarily for the benefit of commerce and industry, and
that in benefittingcommerce and industry the banks were the largest participants.
assured him that we here in the bank looked upon ourselves as a service
and that, so far as consistent, our whole policy, was designed with a view to giving
the utmost service to our member banks;
lso, that with one or two exceptions this
policy was thoroughly understood and appreciated by the important larger banks.


Mr. Mitchell then stated that we went ahead and consummated important
transactions without consultation with our banking associates here in the city. I
told him that, in the very nature of things, that would frequently be true, but the

facts were

that all

transactions were carefully reviewed with the elected representative
benksithAt the banks have always had competent representation on
our board, and that it seemed to me he might have a bit. more confidence in the judgment
of the men whom he and his essociates elected to represent them.

of the New York City

Mr. Mitchell spent approximately one and one-half hours with me; and while
he did not make any definite statement of "repentance," he did say that he had enjoyed
the discussion and that he would give some thought to the statements I had made. .1

told him that

the reason I hed not previously discussed with him the substance of
Governor Strong's letter of July 20 regarding the Rentenbank was because I had understood
Mr. Winston to say, last week, that he (Mitchell) whs leevine. immediately for Europe,
when, as a matter of fact, Mr. Mitchell now states that he does not leave until Saturday,
August 15.





October 29, 1925.

My dear Ben:

Thank you for arranging Dr. Schacht's
luncheon engagement.

It would be a great pleasure

if you too could join me and some of my associates
on that occasion.

May I expect you with Dr. Schacht at
one o'clock tomorrow, Friday, October thirtieth.
Cordially yours,

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


October W, 1925

My Oe'.r Charlie:

Much Es I should like to come to
luncheon with you and Dr. Schacht tod;i4,

in fact as I ha.d planed to ao, I now rind
that I must return to shington agsin this
morning. So it ic unforturvItely quite out
of the question. But I am eure you will

My secretry te1l8 me thst she ha8
dredy sent tenLative word that I might find
it impoe.sibie on this account, 80 I hope no
inconvenience retiults from the tardiness of

this note.

sincerely yours,
Mr. C. E. Mitchull,
55 Wall Strt;et,
New York.




April 25th, 1916.

My dear Mr. gtAi/man:

This is my first opportunity to write you since my arrival home, as I was obliged to go to Washington at once and have
been there until to-day.

My stay in Paris and London was of the greatest possible interest and value to me.

Without reviewing the matter in

detail, I may say that our affairs in Paris were left in a most
satisfactory condition, although no definite arrangements were

made or were desirable at

that time, but in London everything we

wanted done has been tentatively arranged, subject to completion

on being

reported and approved here.

iTow that I am back home

careful inquiry into the
situation abroad and I shall never regret having made the trip.
it is possible to realize the value of a

The situation here seems to be rather complicated:


Atlantic Seaboard is rather bellicose, this feeling shading off
as one gets beyond the Alleghanies and into the prosperous


There are some evidences that Abundant crops sold at high

prices constitute the greatest

peace propoganda in the world.

New York is just as stated by a friend who wrote me while I was
in Paris - crowded by visitors so
hotels, hor seats in the theatres.

that rooms cannot

be obtained, in

This influx of visitors is

well-furnished with money which it is spending with both hamds.


April 25, 1916.



James Ctillman,


On the whole, it seems to me that the banker

have kept

their heads pretty well, however, and that the so-called war stock
speculation has not inflated bank loans as much as one would imagine.
Our surplus reserves are declining, standing now at *7100,000,000 for

the Clearing House btnks, but that


not unnatural at this season

of the gear and there is still a good deal of "stretch" in case any
pressure develops.

Of course, the resourues of the Federal Reserve

Banks are hardly touched.

Feeling in Washington in regard to the President's message is.a curious mixture.

Those who think we ought to fight are


with the


Those who believe in peace under any provocation think

message because it is not more definite and

that the message has developed an impasse from which neither side
can extricate itself.

Outside of official circles, there seem to

be none who adopt a conservative mid,le course in expressing their
Having kept a careful record of weather durin,:: #j trip,

I find that I had five days of sunshine between the 2nd of Febru-


when I sailed in a snowstorm, and the 14th of April,

arrived home in a heavy rainstorm.

when I

It has since cleared up, how-

ever, and we are enjoying most magnificent Spring weather which I
wish you were here to absorb.

Jim Woodward has just been in the bank
particularly after you.

and inquired very

He seemed greatly pleased when I told him

April 25, 1916.



James Stillman, Esq.

of my few days visit with you.

Jack :organ expressed very keen

regret at having missed you when you were in paris and I delivered
your message immediately on my return

to London.

So far, I have

not seen him since returning to New York but understand he is well.
If, as I hope will be the case, you are able to get home

this aammer, you will I am sure give me opportunity to see you and
possibly I can coax you up to the country to visit us.
With kindest regards, believe me,
Faithfully yours,

James Stillman, Esq.,

Cannes, France.





oril 25th, 191'
my dear ur. *A-417ATI:

This is my first opportunity to write you since my arrival home, as I was obliged to go to Washington at °ace and have
been there until to-day.

My stay in Paris and London was of the greatest possible-interest and value to me. . .Without roviewinF..; the matter in
detail, I may say that our affairs in Paris were left in a most
satisfactory condition, although no definite arrangements wore

made or were desirable at that time, but in London everything we

mated done has been tentatively arranged
on being reported and approved here.

subject to Completion

Now that I aM back home

it is possible to realize the value of a careful inquiry into the
situation abroad and 1 shall never regret having made the trip.
The situation here seams to be rather complicated:

-L-lantic Seaboard is


rather bellicose, this feeling shading off

as one gets beyond the Alleghenies. and into the prosperous :liddle


',There are some evidencea that P.bUndant crone sold at hish

pries constitute the Greatest peace .propoganda in the viorld.

New York is just as stated by a friend vho wrote me while I was
in Paris - crowded by visitors so that rdoms cannot be obtainedkin
hotels, her seats in the theatres.

This influx of visitors i

well-furnished with money which it is suendin with both hands.

April 25th, 1916.

:Ay dear Mr.


This is my first opportunity to write you since my arrival home, as I was obliged to go to V;ashington at oace and have

been there until to-day.

My stay in Paris and London was of the greatest possible interest and value to me.

Without reviewing the natter in

detail, I may say that our affairs in Paris were left in a most
satisfactory condition,

although no

made or were desirable at that time,

definite arrangements were

but in

London everything we

wanted done has been tentatively arronged ,subject to Completion
on being reported and approved here.

Now that I &a back home

it is possible to realize the value of a careful inquiry into the
situation abroad and I shall never regret having bade the trip.
The situation here seanls to be rather comnlicated:


Atlantic Seaboard is rather bellicose, this feeling shading off
as one gets beyond the Alleghanies and into the prosperous :Tiddle

There are some evidences that Abundant cro,.)s sold at high

prices constitute the Greatest peace propaganda in the world.
17ew York is just as stated by a friend who wrote me while I was

in Paris - crowded by visitors so that rdoms cannot be obtainethin
hotels, hor seats in the theatres.

This influx of visitors is

well-furnished with money which it is soendingwith both hands.



April 25, 1916.

James Stillman, Esq.

On the whole, it seems to me that the bankers, have kept

their heads pretty well

however, and that the so-called war stock

speculation has not inflated bank loans as much as one would imagine.
Our surplus reserves are declining, standing now at ::100,000,000 for

the Clearing House banks, but that is not unnatural at this season

of the gear and there is still a good deal of "stretch" in case any
Pressure develops.

Of course

the resources of the Federal Reserve

Banks are hardly touched.
Feeling in "ashington in regard to the President's message is'a Curious mixture.

Those who think we ought to fight are

disappointed with the message because it is not more definite and

Those who believe in peace under any provocation think

that the message

hasdeveloped an impasse from which

can extricate itself.

neither side

Outside of official circles, there

seem to

be none who adopt a conservative mid'le course in expressing their

Raving kept a careful record of weather during r,.5y trip,

I find that I had five days of sunShine between the 2nd of February, when I sailed in a snowstorm, and the lilth of April, when I

arrived home in a heavy rainstorm.

It has since cleared up, how-

ever, and we are enjoying most magnificent ?pring

weather which I

wish you were here to absorb.

Jim 7:oodward has just been in the bank

and inquired very

particularly after you. He seemed greatly pleased when I tolehim




April 25, 1916.

James Stillman, Esq.

of mg few days visit with you.

Jack 2,:organ expressed very keen

regret at having missed you when you were in paris and I delivered
your message immediately on my return

to London.

So far, I have

not seen hir. since returning to New York but understand he is well.
If, as I hope will be

he case, you are able to get home

this Summer, you will I am sure give me opportunity to see you and
possibly I can coax you up to the country to visit us.



regards, believe me,

Faithfully yours,.

James Stillman, Esq.,





November 6, 1917

. andum for Mr. James Stillmaa, Chairman:


Refervlag to my memorandum of Oatot:er 20th (supplementary to

,rsndum of the 59th) showing the percentacs rhish th,, estimated subscriptions to the Liberty Loon, by Federil Reserve diAtriets, bore to,the.1912
-12th of those districts respectively, 1 am now able to hand you a SimiiLr statamqnt based

or firs aplearing in to-day's jourarl of Commerce,

'shish are apprxestly Official stateviate of the mounts manor:Med within
the various Fedora heserve district*.








2. New York
5. Phildelphia
4. Cleveland



3t. Louis

Knsa3 City

5au FvAselesc

lth la

,?, -(0easna,


2d 'Liberty
Lona 3ub-



Percentage whieh
Oetober 1917

subscriptiona boar

19 wealth of 1912,


44 a.















being here -- although they would doubtless
have done the same eventually, but time in
every way counts for so much at present.

I am trying to impress upon every
one I can the importanoe of speedily getting
all the national and state banks, as well as
the trust companies -- even if they do not
open accounts or join the Federal Reserve
system -- to take their pro rata share of
Treasury Notes and to have a market for them
as commercial paper, which is practically
what they are now that the Government is such
an enormous factor in almost every kind of
Albusiness in connection with the war.
though you write you are loafing, I know
perfectly well that you are using your great
influence to accomplish this result.
means, and
should be brought about by
then the Government can take its time as to
when it is advisable to bring out another
The longer that this can be put off
One of the depresprudently, the better.
sing factors in the situation is the talk
and apprehension about another Government
loan in a short time at a higher rate of
All talk of this kind should
not be indulged in and, if possible, should
be squelched.

Governor Benjamin Strong, Jr.,
The Homestead,
Hot Springs, Virginia.
My dear Governor:

I was delighted to receive your
letter of Tuesday evening, especially as I
infer from it you are simply taking a well
deserved rest.


I had a long conference this morning with Mr. Morgan at his library, and
have urged him to take a more active part
in financial matters here as his father did
because they both occupy a unique position
of not being directly connected with any one
financial institution.
It is very difficult to manage an
institution of any size without daily

Nothing would give me more
pleasure than to accept your kind invitation to share your loafing with you. I
fear, however, that I will not be able to
avail myself of your kind invitation.
There seems to be something of importance
,Ip pass upon every day.
Now that Vanderlip
ig away and McRoberts expects also to go
to Washington for an indefinite period, I
feel as if I should be on deck.

If you have not already heard
you will be pleased to know that
thegkiited States Trust Company has opened

-an apdount with the Federal Reserve Bank,
-gnd tiro Marston, after a talk with me toddy,
decided to do the same, and is
-1 sending nine millions of gold to the Bank.
So you see there is some little use of my








personal attention and I am going to
remain on this job as long as I can.
unless it should become sheer folly
to 4o so on account of my weak heart.
I think, however, that in a month or
two it will be so organized that I
can feel free to turn the management
over to others.
I envy you your rest but am
delighted that you were wise enough
to take it.
I trust you will return
greatly refreshed in mind and body.
Yours sincerely,


December 7th, 1917.

My dear Yr. Stillman:

went to Hot Springs with a firm resolutien not
to lot mail get ahead of me or worry me. The first four
deys I spent erincipally in bed and those four days proved
tea much for ma eo I not only did not answer mail but I did

not even read it.

Noe I am eack in New York until :;uneey

an., want to thank you for your letter of the 8th of November.

You will doebelees lauea at receiving advice from
one who is =eel° to practice his own ereachings but I cannot help thinking th,et yo e are overworking, stickine too
close to that bank and imposine ueon yourself too violent

a &lenge of habit after these in yeare ef reet and freedon feom direct buziness and rezoonsibility.

If you had ry

good heert and I had yeei geed lungs we might make a Whole
man between us and accomplish something, but 1 feel terribly
handicepped,ae you doubtleee do, limping along on one lee,

so to speae.
The admiceio Of tee
iled State -ruot f;onrene
was an achieverert of the first order for the Federal Reserve
I ',thee eafeetly eoll what inrlueeced the 'Iceleion
from a conversation I had with Mr. Sheldon. As he expressed
it to me, 'it wat, a eeeice between the 7ebte,': tatee neeern-

ment and the United States '"rust Company" and once that war

plainly in els rind I never had ary doubt as ta the decieior.

tondee and TheLdae 1 eeeeel ie
the financial program and expect to be there all next week. I
have urged (and i teink witA CGMQ euccess), tee ereert carrying
out of sore of the suggestions which you and I have frequently
dcuseed and 1 will gt,: or eo you either thrbegh ZJr. -Jarerlip or directly by letter just how thin, s develop next week.
The load now beieg carried by Utw York is not more than it can
successfully handle and what we need beyohd everything else is

courage and this even more than money.




Dec. 7, 1917.

Mr. Stillman.

It woold be a notable service if both you and
Yr. Yorgan as well as Yr. Baker could make it a rractice
to be in 7ashinoton once every few weeks to discuse natters with members of the Reserve %aro and the Treasury
Department officers. They welcome calls of thAt nature
and will talk freely and will not hesitate to 1114 advice.
The tire has lono pant Then cuestions of coorteoy or pride
end prejLoUoe can be permitted to interfere in bringing
our minds toeether in the nation's problems. I am just
one of the yonnFLoInt renruits and yor and fr. taker have
vestly more exnerience than I and cen do the nation a service by placing thlt experience at tha disposal of the
Treasury Department.

I nide some uma of the figures that you were good
onovh to eon.' ma3 in nriti,17 rha' n Clerk. He has not roelied an rrobably evill not do SO. Nmong ()nor roeults of
th- exnerienre of *he re-+ three !Jeers in the corviction, and
a very etrong one in my mind, that every time a demagogue or
Polii:ce3 sh:,-+er hrimk et ew York, Yew or should
throw it back rromrtly. I hone vou did not disarprove of
what I said

My oln rlens are a little indefinite.

I am pro-

posing to go to Aiken for a few weeks after finishin, in 'oe.ehington e.od if iryl, any eh-nee yoon nlens take you South, won't
you let Te know so that I can join yru somewhere for a litLle
7Vith kindeo:t regards end again urging that you have

some regard for your on health in which your friends are
interestod oven thopgh you Tee, nemlect it, I ant
rpliehfolly yonra,

James Stillman, Esq.,
55 nall rAreet,
Eew York City.


g 414'4








Governor Benjamin Strong, Jr.,
The Hopostead,
Het Springs, Virginia.
My dear Governor:

I was delighted to receive your
letter of Tuesday evening, especially as I
infer from it you arc simply taking a well
deserved rest.
Nothing would give me more

pleasure than to 'accept your kind invitation to share your loafing with you. I
fear, however, that I will not be able to
avail myself of your kind invitation.
There seems to be something of importance
to pass upon every day. Now that Vanderlip
iS away and McRoberts expects also to go
to Washington for an indefinite period, I
fool as if I should be on dock.
If you have not already heard
of it, you will ho pleased to know that

the',Pnited States Trust Company has opcIned
an apeount with the Federal Reserve Bank,

nd Mr'i, Marston, after a talk with me toady, ha',.s decided to do the same, and Is
sending nine millions of gold to the Bank.

So you see there is some little use of my



being hero -- although they would doubtless
have done the same eventually, but time in
every way counts for so much at present.

am trying to impress upon every
one I can the importance of speedily getting
all the national and state banks, as well as
the trust companies -- even if they do not
open accounts or join the Federal Reserve
system -- to take their pro rata share of
Treasury Notes and to have a markot for them
as commercial paper, which is practically
what they are now that the Government is such
an enormous factor in almost every kind of
Albusiness in connection with the war.
though you write you are loafing, I know.
perfectly well that you are using your great
influence to accomplish this result.
should be brought about by all means, and
then the Government can take its time as to
when it is advisable to bring out another
The longer that this can be put off
One of the depresprudently, the better.
sing factors in the situation is the talk
and apprehension about another Government
loan in a short time at a higher rate of
All talk of this kind should
not be indulged in and, if possible, should
be squelched.
I had a long conference this morning with Mr. Morgan at his library, and
have urged him to take a more active part

in financial matters here as his father did

because they both occupy a unique position
of not being directly connected 'with any one
financial institution.
it Is is very difficult to manage an

institution of any size without daily




personal attention, and I am going to
remain on this job as long as I can
unless it should become sheer folly
to do so on account of my weak heart.
think, however, that in a month or
two it will be so organized that I
can feel free to turn the management
over to others.
envy you your rest but am
delighted that you were wise enough
to take it.
I trust you will return
greatly refreshed in mind and body.

Yours sincerely,

2-1A,ern 6
Novz::::Vmi 0, 1917

n::::,:x4=1,-:.4,1=.,r1 for


to my

of the

f ec.,,tot-or


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t I Or49 to thtO 1,1barrt 7.0sa, by Fo.letir 1 :flovIrvo diltriotq,horn to tha 1:112

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Z(5 1.'01 s

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Ved,Krill-,:e3ervo c1.1;t1-Iota.








ri 1912 0?




Zealth 14

now Yoy%

3. 1-11.1.114.)hia


5. 1;;3,,.33mni
6. ;`,0:ta.
7. Ohlonc..o

9. Iiia01113


Z)6 0OCO








g op,





50o c0

Sr.,x; FrLuoIza

nul-alr5pLiow b,a,zr










fotbor :017


7 t Y,-i,Ei2.0



c:v. 1312


December 7th, 1917.-

My dear Vr. 9tillman:




'I'vent't6 LO.CS:6rings with

a firm resolution not
to let
Of me or worry ma. The first four
dy I sp,tilt .TYrincipally in bed and thoee four days proved

too much for"me co I not only did not ansrer mail but I did
Now- I am back it.: New York until 1,untay
and want'to thank you for your letter of the 8th of November.

not even read it.

You will doubtless lawril at receiving advice from
one who is unable to practice his o'zn breathings but I cannot help thinking th, you are overvfork:41g, stickinr: too
close to that bank and imposing u-on yourself too violent
a change of habit after theaa long yPare of rest and
den from direct business and resensibility.
If you httd ry
good heart and I had your p:.00d lun;cs 17:1
mal:e a thole

an betraen us and accomplish toroething, but I feel terribly
hendicappod,as you doubtleue do, Li-ping along on one lc,

co to speak.
Tnu admicsioe of the iJ. I LffnI States -ru:it Con7_.,n7

as an achieverent of the first order for the Federal Reserve
Syetoa,.,4, Oefr4etlY woll what inlua,.p.;-2d the ?..icisien
from a conversation I had with rr. Shelden. As he exbressed

it to re, "i;

w,tt, a
:,icb between the ,:nite4 :rtstas C'oiernneat and the United States '-'rust Contany° and once that wao
plainly in 'ii a rind I never had ary Out
tp the dccleion.
Lbnday end

in Vahinten diSerssing

the financial program and expect to be there all next week. I
have urged (and I ti nk witn tome tusoase), t'he proTTt carrying
out of sore of the suggestions which you and I have frequently
discussed and I will get worU to you either through rr. Vaner-

lip or directly by letter just hothings develop next
The load no-,,t,.1wing


carritd by i.ew York is not more then it can:
succest-Sully handle and that we need bayhd everything else is
courage and this even more than money.


Dec. 7, 1917.

Vr. Stillman.


It v.),21d be a notable serlice if boVA you and
Vr. Yorgan as rell as Yr. Baker could make it a practice
to be in 7ashington once every fo. - weeks to discuss mattors with members of the Reserve Board and the Treasury
Depertment officern*. They relcomo calls of that nature

and will talk freely and will not hesitate to n131or cri(3e
her questions of courte6y
The tins has long past
en(; prejuiice can be peripitted to interfere in bringing


Our minds to.7.ther in the nation's 7robIem3. I F.71 just
one of the youni:n-it recruits an yvu and Yr. ?pker huvc


ves'Ay nere sxnerience than I and can do the nation a service by placing that exnerience at the disposal of the
Treasury ePartr-lent.
made sme uss of the figures that you were good
anouirh to son, me, in nritins! Ohanp Clerk. Re has not remrld orobably will not do so. kiong ethor reoults of

experiencs of the pa-t three years i3 the corvicticn, and
very stroncr, one in ny mind, that every time a demagoF;Po or
shytar thror a brick et I:ow York, New York should
throw it back Pronntly. I howl you did not disapprove of
rhet I sai:1
I an proNy cm ;,:f; are a little indefinite.
after finishing
posing to go to Aiken'for a few weekstake you South,in 'ishvon,t
ington P.u6 if by any ch-nce yorr rlsns
for a lkttle
you let ic.) know so that I can join you sonevhere
7'att kinds :-t regards snd again urging that you have

.some regard for your on health in which your friends
:let...ay irterestA :Wel though you rf:.ry recrlect it I an,


James Stillmsn, Eel.,
55 171ll Street,
Vow York City.

r 17 .1919.-


My dear kr. Stillwell:

At the last meeting which Jr.

nd 1

Committee, you will recall we had some discussion of

tt the



e provision of he con-

etiLution of the Clerine Hu. e Association governine rates of interest allowed
by members of the Clearin liou,e upon out-of-town bank deeosits.

Since the

I have learned of no proposal for a recon,iberation of this matter along

the lines of our discuion and am writing to aek if there is arypossibliity of
a review of the !iltject being made.

Of course you undrretand tht, it is ime ssible for Us to forecast what
may from time to time be tne ci1oy of the Reserve bank as to rates, but it has

long :eemed to me to be undesirable that the rates allowed upon these balances by
New York banks should be automatically associated with the discount rate of the
Federl Reserve Lank.

Should our policy nccessit te further cilvnces in rates

the conc:eeunce would be an autematic increase in rates foe out-of-ten deposits,
fear thet once such advances are made by Now lurk tanks competitive rate

es will take place in other cities and the whole ,arbject of competition for
1N3mk deposits at constantly increasing rates will again coma up to Luther u..
There may be a number of methods of dealing with this matter, SOR6 01

them, posj.bly, better than the one which was sue, ested at our meting, but perhaps
may repeat that suggeetion which certainly is based ueon the useful exAerienc&
of many years by the London banks.

Whenever the bank rate changes in Ldneon, tle /

clearing bankers' committee meets, and, in the light of the change in the bank mte
-fixes the rate to be alIo,ed upon bankers' 'balances.

The char) i. , hoeever, not

d the only thine thet is automatic is the review of the situation whici0

Jane b A. ftiliman, Esq.
-de by

e bankers' committee.


Might it not to i_ossible for our Clerin


gouse to adopt some sini1r lvl, or a bettor one if it can be found, and, before

in it the subject of a chance in constitution, ascertain in detail

from the members of the CLi.-rinc Hou e whether the ;in will not meet with their \\I



I believe you undoubtedly realize, the officers and director e of

the 4darl1 Reserve bank consider it a part of their duty to their members to
promote in every way the eetablishment of deunder banking :i..acticas in this dis-


Our pro:o,als in this matter are designed to that end, and I believe,

meet with the hearty.a44reval of the Federal Re6erve Eoerd.

I will 'b, glr,d to learn from you hat are the views of the .members of
the Ce&riag 'louse Committee and whether it is likely that ar4thin will be done
in the matter.
Very truly yours,

James `Ailiman, Esq.,
The -National City Bunk,

55 Wail Ftreet, New fork.









$ 25.000.000.



December 11th, 1913.

Mr. Benjamin Strong, jr., Vice-Presdt.,
The Bankers Trnt Company,
No. 16 Wall Street,
New York City.
Dear Er. Strong:

Answering the four questions submitted to me this morning, I regret to say that the time at our disposal is so brief
that we cannot run down all authorities. But I believe that the
answers here given are as trustworthy as the nature of the information desired makes possible.
1. Estimate of amount of Aperican securities held in
Europe and authorities for same.
Articles by Sir George Paish in the London Statist of
June 19, 1909, and December 24, 1910. He uses the returns of
the Excise Commissioners of England as a basis for his estimates,
which were at that time that the total investment of British capital in the United States and Canada were c5,000,000,000. In view
of the fact that large holdings of American secUrities by British
investors are kept in this country, the statistics of which are
not available, it is safe to assume that these holdings are very
much larger.
This does not take into consideration the investments of Prance, Gelmany, Holland or other European countries,
which in the aggreeate probably are nearly as great as those of
Great Britain.

2* How much in short-time notes is now outstanding by the
various railroads and industrial corporations, and if possible, how
much of that is held in Europe?
I enclose a portion of the weekly financial section (pp
2 to 6) of the Journal of Commerce, NeW York, November 19, 1913,
which contains complete answers to this question, giving in detail
all maturities under three years of railroads, traction and iyidustrial corporations.
The information is very complete. This paper
has been taken from our files and is the only copy that we have. I
should be glad if you would return it when you have finished .ith



The amount of annual expenditures by foreign travelers in Europe.

About five years ago, after careful estimates based
upon payments made under travelers' /etters of credit by the
principal banks abroad, the amount spent by American tourists
was placed at E 80,000,000 annually. Since that time American
travel has increased perhaps fifty per-cent, owing to faster
steamers and better accomodations.
But it would be perfectly
safe to place this estimate now at an annual expenditure of
This is exclusive of the incomes of many wealthy
American families who live permanently abroad, and of the incomes
of wealthy American girls who have married abroad.
this there can be no accurate or authoritative data procured e::ce.ot eventually by the Government when the income tax is in operation.
These figures do not include remittances made by foreiHners laboring here:, which in the aggregate are very large. In
1911 the Post.Off ice Department records showed that remittances in
small amounts of, say, less than $100, showed the aggregate to be
above $70,000,000 of international post office money-orders.
The amount paid by Americans to foreigners for freight
on imports and exports per annum.
I am unable to lay my hands on any authoritative statistics,
but the in-and-out commerce of the United States nnnually is around
$3,000,000,000. It is safe to estimate the amount of freights paid,
exclusive of fire and marine insurance, Would be at least ten percent, or, say, $300,000,000.
This is under, rather than over, the

For further information in reply to these four questions,
I would suggest that you commicate with Lr. Bailey.
Yours fait



$ 25.000.000.



December 13th, 1913.

Dear Hr. Strong:

Replying to your letter of December thirteenth, I beg to say that the average cash reserves of

the National City Bank during the period of panic in
the year 1907 were as follows:
For the month of September,
January (1908)


26 %



The lowest point reached by this Bank in its
reserves was on October 26th, 1907, when the reserve was

Yours very truly,

1r. Benjamin Strong, Jr., Vice-Presdt.,
The Bankers Trust Company,
New York City



ettc 44'

/gift` /if/


c /92,- 2/



t 25. 000. 000.

25. 000000.



March 2, 1911.

H. Giles,
.C/o Bankers Trust Company,
7 Wall Street,
New York City.
Dear Sir:

I enclose herewith copies of letters

which you forwarded to me at Hr. Strong's

Will you kindly thiank Mr. Strong

for me and tell him that I heartily endorse
his attitude in the matter.

Yours very truly,

Ms -W


October 17th, 1913.


Mr. Benjamin Strong, Jr.,
Bankers Trust Company,
New York, N. Y.
My dear Mr. Strong:
I enclose copy of a confidential letter from Senator Weeks.

I will

be greatly obliged if you will turn the matter over in your mind, for I
would 1iie the advantage of having yours judgment before I answer him.

You will, of course, treat the letter as confidential.
Yours very truly,

Dictated but not signed by Mr. Vanderlip,
as he had to leave the office before it could be


(c o r Y)

Washington, D. C.


October 16, 1913.

F. A. Vanderlip, Esq., President,
National City Bank,

New York, N. Y.

Dear Mr. Vanderlip:
I am very much

your notations and
consideration by

obliged to you for the copy of the currency bill

It will be of muoh service to me


during its

the committee.

I have an impression that the practical thing for the committee to do
is to report in favor of four reserve banks Which probably would be located
at New York, Chicago, San Francisco and 7Tew Orleans.

That would seem to

take reasonable care of each section of the country.

If this is done and

assuming that all National banks come in;on a ten per cent assessment that

would mean a capitalization of C100,000,000.

your bank to contribute


two and a half

It would be necessary for

million dollars.

What would you

of dividing this contribution to the capital among the four banks

In proportion to their-

tal capital rather than having all of it applied

to the capitalization of the New York bank?

If this were done, you would

have the some relative interest in all of the banks and naturally would have

one vote in the

election of the banks'


At the same tire it

occurs to me that it would remove to some degree at least the objedtion Which
rests against requiring

one bank, owned by one set of men, to core to the

assistance of another bank owned by another set.

This has occurred to Me.

as a possible course to follow and I would like your


Sincerely yours,

John W. Weeks.

opinion of it.

P 07



JAMES S. ALEXAN GE R, PrestNat.Bank of Commerce in N.Y
STEPHEN BAKER. President Bank orthe Manhattan Co.
SAMUEL G. BAYNE, President Seaboard Nat.Bank.

EDWIN M. BULKLEY, Spencer Trask & Co.Bankers
JAMES G. CANNON, President Fourth Net Bank.

E. C. CONVERSE. President.
THOMAS DEWITT CUTLER, Prest.CommercialTrustCo.Phila.
1-1,"RY P DAVISON, J. P. Morgan & Co., Bankers.

ULPH ELLI S, President Fidelity Trust Co. Phila.

E.11AYWARD FERRY Vice President Hanover Nat Bank.
WALTER E. FR EW, President Corn Exchange Bank.
F RE WI, T. HASKELL.V.Prest.III.Trust&Savings Bank Chicago.

E.C.CONVERSE, President.


$ 10,000.000


A. BARTON HE PB URN, ChairMarahase Nat.Bank.


THOMAS W. LAMONT. J. P Morgan & Co. Bankers.
EDGAR L. MARSTON. Blair & Co Bankers.
JOSEPH B. MARTIN DALE, President Chemical NatBank.


FRANCIS L. HIM E.President First NatBank.

GATES W. MC GARRAH, PrestMechanics'& Metals Nat Bank.

CHARLES D. NORTON, Vice Prest.First NatBank,

WILLIAM C.P01 LLON. Vice President.

DANIEL E. PO MEROY, Vice President.
WILLIAM H. PORTER., P Morgan &Co. Bankers.


WILLIAM C. POI LLON, Vice President.
D. E. PO M E R OY, Vice President

W . N DUAN E, Vice President.
F. I. KENT, Vice President.
HAROLD B. THORNE, Vice President.
F. N. B.CLOSE.Vice President.
GEO. G. THOMSON, Secretary.
GEORGE W. BENTON, Treasurer-.
GUY RICHARDS, Asst. Secretary.
H.W.DONOVAN, Asst.Treasurer.
BETHUNE W. JONES, Asst Secretary.
F. WI LSON, J R., Asst.Secretary.

R. H.G I LES, Asst.Treasurec
PERRY D. BOGUE. Asst.Secretary
HARRY N. DUNHAM, Asst,Treasurer
M1C HAELS, Trust Officer.

---,SEWARD PROSS ER. Prest Liberty Nat.Bank
DANIEL G. REID, Vice President Liberty Nat Bank.
BENJ. STRONG, JR.Vice President.

EDWARD F SWIN N EY, PrestFirSt Nat Bank,KansaS City.
GILBERT G. THO R NE, Vice President Nat Park Bank.

N E W Yo R K

EDWARD TOWNSEND. Prestimp& Traders' NatBank.
ALBERT H.WIGGIN, President Chase NatBank.
SAMUEL WOOLVERTON, Vice President Hanover Nat Bank

October 20, 1913.

My dear nr. Vanderlipte.

Referring farther to yours of the 17th, the saggested

prorate ownerehlp of ?edera/ neserre 3anhe must be considered upon one of two Nwootheeee>. One: Thet all =libel,
batke would perticipate in the manhgement of all Federal
Reserve Banks; the other, that they would own stock In all
Federal Reserve Be/Ike, but have no Voice in the manegement

of any outside of the One in their ,vat district.
Ae to the first hype:.heris 4' jib preeent bill would require titorou.0 revieion in respea of boards of directors,
federal reserve board, and adviserr beerd, to to the chenge
feeeible. To give proper reprasentetion and administration
euld require a general board, elettted by all member banks,
:ith a central office end eanagemett. It would net be a
lone flop to the creation in the 1, f oee certral benk, as
teese would develop to be it fact.J rould eo a lone way
differennes arisieg
toward harmonizing poesEhle secti
betreen the renagererte el* redevel veserve Banks, but would
open the door to differencee of-eepinien within the Joeal

boards of the vnrious Federal Reserve Bank's: one or two direc-

tors representing outside distriatiaxlight have interests at
variance with the intereete,of the-districts within rhich the
particular bank was loceted; It is hard to tee haw a plan of
a plan of ownership,
management can be devised tO emit
.- with branches.
eitheut °mating in the end 'out one

ro is may OMB sound
As to the second hvpotSe a
principle unen ehAch eneitel le aefely employed erd bnoinoss
is profitably conducted. The owner who has capital at rish
must and will always insist upon velicipation In the management. l'ven the management of our,Orve corporations, with
the vast powers delegated to direbtors, is in the end governed
by this ftuelanental relatiow,hlp between ovner and reneger.
But where does the suggestion 11 us in tilde case, upon the
e econd hypoesise not only wa1t nr institution and mina
have no WICO in the policy and materement adopted at an


Francisco or new Orleans, but it is possible - in fact well



F. A. Vandorlip, Eeq.

nigh certain - that interests and policies radieally different from and seriously conflicting with those of our

DVTL district would at tlmos prevail, and. the oapital furniShed by our on stoCkholders would then be applied to

furthering intereets other than those- of its owners.
The injurious effects of leek of harmony of operation of
the Pei:lora), Reserve Lanka 'would be Intensified by the
financial interests of the etodkholding banke of foreign
districts, and would neoessitate the cxerolso of even
greater mandatory pwaers by the federal reserve board.

I do not feel willing to state that the idea could not

be developed in some way 60 that it rould prove superior
to the plan ts; now prepared. he diffIcaltios above tmcmated might be net by changing the Character of the advisory board &nd enlarging its powere. If, for instanoe,
representation of Federal Reserve Banks on the advisory
board ware mule somewhat it the proportion of faze of the
various Pederal Reserve Bunke, and thefederal reeerve
board's power to rpouire discount made oubjoct to the approval or disapproval of the advisory board, it would
possibly meet the difficulties outzected - but the pevor
of veto alone would accomplish most that is needed, rithgat
the pror.4a ownership.
Thesuggeution, however, is encouraging. One member
of Via Cenate Committee seems to realize the T.-Gal:noes of
the proposed plan of oontrol. I b6ple it :lay prove to Tx)
the beginning of a bettor understanding by the Committee
of the desire that you and I arid mery others here have

always felt to assist and not hinder this important work.
Very truly youre,



c/o The liational City Be,nk
New York City..





November 6 1913.

Mr. Benj. Strong, Jr.,
Bankers Trust Company,
16 Wall Street,
New York City.

My dear Mr. Strong:Your letter of November 5th has been received.

I am much obliged,to you for suggesting

to Mr. Kent that he send me his testimony before
the Committee.

I shall be very glad to read it,

as I have the greatest respect for the financial

knowledge of the Bankers Trust staff, with more
particular reference to your good self.
Very truly yours,



ror n 2 89B




is Company TRANSMITS and DELIVERS messages only on conditions limiting its liability. which have been assented to by the sender of the following Night Letter.
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This Is an UNREPEATED raGirr LE ER, and is delivered by request of the sender, under the conditions named above.













NEW YORK, November, 1913.

Sa result of questions and suggestions addressed to him by members of the Senate Cornon Banking and Currency during his first hearing on the currency bill, President
Vanderlip of The National City Bank of New York has presented to the Committee
the following suggestions for a Federal Reserve Bank:
The Government shall grant a charter to the Federal Reserve Bank of the


United States with capital stock of $100,000,000, the charter to extend for a period of fifty

The head office to be located in Washington and twelve branches to be located in the cities
selected by an organization committee, and sub-branches wherever designated by the Board of
the Federal Reserve Bank.

As soon as practicable after the passage of the act the President is to appoint a committee of five

to be designated as the "Federal Reserve Bank Organization Committee." This committee will
divide the country into twelve commercial districts, and designate one city in each district as the
seat of a branch of the Federal Reserve Bank, and generally be charged with the responsibility of

The stock of the Federal Reserve Bank may either he subscribed for entirely by the Government
with funds raised by the sale of bonds, or offered for public subscription, the success of such subscription to be insured by requiring all national banks to be liable for the purchase of their pro rata

proportion of any stock not taken by the public.
The stock shall have no voting power and no rights of any kind shall attach to it except to

receive dividends. There need, therefore, be no restriction on its purchase or sale or accumulation,
either by banks or individuals.

The Federal Reserve Bank will be wholly under the management of a board of seven directors
to be appointed by the President with the advice and consent of the Senate, with terms of fourteen
years, but the first board to be classified and the term of one director to expire every two years.
The bill should provide that the President will select men qualified by experience and training
for the proper discharge of the duties imposed and make no appointments in order to confer political
rewards. At least three of the members should be recognized to have had wide financial and banking

Appointments are to be distributed geographically so as to give due weight to the commercial
sections of the country.
The President, with the advice and consent of the Senate, will designate one director as governor
and another as deputy governor, and the governor, or in his absence the deputy governor, shall act as
chairman of the board and be the chief executive officer of the bank.
Members of the Board to retire automatically at the age of seventy.
The Board of the Federal Reserve Bank shall appoint for each branch an Executive 'Committee
of seven members. The bill will contain the same general directive clauses as to their character as
in the case of the Board itself, including the provision that at least three of the members of the Executive Committee shall be recognized to have had wide banking and financial experience. The term of
office of the members of the Executive Committee will be seven years, but in the case of the first
Those desiring this circular sent to them regularly will receive it without charge upon application.



members appointed they shall be classified so that one director shall retire each year. One member of
the Executive Committee will be designated chairman and one vice-chairman and the chairman, or,
in his absence, the vice-chairman, wirl act as chairman of the committee.

All actions of the executive committees will be subject to the approval of the Board of the
Bank. Each executive committee will elect a president and other executive officers to conduct the
business of the branch, the men filling these offices to have no official or financial relation with
any other bank.

The earnings of the Bank shall, in case the Government subscribes to all the stock, be first
devoted to an accumulation of a surplus of twenty per cent and :thereafter one-half of the earnings

will be devoted to a further increase of the surplus until it reaches fifty per cent and the other
one-half to go to the Government.
go to the Government.

After the surplus has reached fifty per cent all the earnings will

In case the public subscribes to the stock the net earnings will first be devoted to paying a six per

cent cumulative dividend, then to an accumulation of a surplus equal to twenty per cent of the
capital, after which one-half of the earnings will go to the government and one-half be devoted to
the accumulation of a further surplus until the surplus reaches fifty per cent of the capital, and
thereafter all the earnings beyond the dividend requirement will go to the government.

All earnings received by the Government will be devoted to the retirement of the government debt.

The customers of the Bank shall be the Government and qualified member banks, which will
include all national banks and may include state banks and trust companies.
The Government shall deposit all of its general fund with the Bank and constitute the Bank its
fiscal agent.
The reserve requirement for national banks will be so changed as gradually to transfer all reserves
away from correspondent banks now acting as reserve agents and after this gradual transfer has been
fully accomplished all reserves will be held in the vaults of the banks and with the Federal Reserve
Bank. The reserve requirement will be the same for all member banks and shall be ultimately
twelve per cent.

The reserve to be held by the Federal Reserve Bank shall never be less than fifty per cent of its
demand liabilities, including note issue, in gold or lawful money.
The Board of the Federal Reserve Bank may, in an emergency, suspend all reserve requirements
for thirty days and continue such suspension for periods of fifteen days.

The Federal Reserve Bank may rediscount for member banks paper self-liquidating in character
to be defined by the act. It shall not rediscount for any one bank an amount exceeding the capital
and surplus of such bank.



creasing rate upon discounts, until said discounts shall have amounted to a maximum, permitted by
the act, fully equal to the capital and surplus of said bank.

As fiscal agent of the Government the Federal Reserve Bank shall be charged with the duties
now imposed upon the Treasurer of the United States and the Bureau of Redemption in the office of
the Comptroller of the United States in respect to the custody of bonds securing national bank notes
and the redemption of such notes. The five per cent redemption fund now in the general fund of
the Treasury shall be transferred to the Federal Reserve Bank as a special trust fund and shall be
held intact and shall not count as a part of the reserve of the bank.
The Federal Reserve Bank shall be authorized to issue its circulating notes. Such notes shall
be secured by the segregation of rediscounted paper as described in the act equal to one hundred
per cent of such notes outstanding and or one year exchequer notes of the United States Government
hereinafter provided for and by a reserve in gold equal to fifty per cent. The notes shall have the
same qualities as the present national bank notes, shall be redeemable at any branch on demand in
gold and shall be the obligation of the Bank. There shall be no restriction upon the issue of notes
by the Bank when the notes are fully covered by gold coin or bullion, it being intended that to the
extent that the outstanding notes of the bank are not fully covered by gold they shall be secured by
one hundred per cent in rediscounted paper and or exchequer notes and by a reserve in gold equal to
fifty per cent.

Gradually and over such period as the Federal Reserve Board may decide upon, the Federal
Reserve Bank shall offer to purchase 2 per cent bonds of the United States deposited to secure circulating notes of national banks at par and up to an amount equal to one-half of such bonds deposited
with the Treasurer of the United States as security for national bank note circulation. It shall pay
for these bonds by assuming the responsibility for the redemption and retirement of the national
bank notes secured by them. Upon acquiring these bonds the Federal Reserve Bank shall receive
from the Government of the United States in exchange for the 2 per cent bonds an equal amount of
one-year exchequer notes bearing 3 per cent interest. The Federal Reserve Bank shall give an undertaking to the United States Government that it will renew such one-year exchequer notes each
year at maturity for twenty years. These notes shall be made to mature at various periods during a
calendar year. So long as these notes are outstanding, the Federal Reserve Bank shall pay to the
United States out of its earnings, and before any dividends are paid upon the stock, a tax of 154 per
cent on an amount of circulating notes equal to the amount of exchequer notes outstanding.
The bill should provide for a national clearing house.

The charter rights of national banks should be so enlarged as to permit banks to have branches
within the city in which they are located, to establish branches abroad and to exercise general trust
company functions to be defined in the act.
National banks shall have the right to accept drafts, of a character to be defined, up to an amount
equal to one-half of their capital.

The Bank may buy in the domestic market from member banks, non-member banks, and individ,
uals self-liquidating paper under conditions to be defined in the act, bearing the endorsement of a
member bank, and may buy in the foreign markets prime banker's bills.

State banks and trust companies may be admitted to membership by conforming to the same capital, reserve and inspection requirements that national banks are obliged to meet in similar localities.
The Federal Reserve Board shall have power to examine any member bank.

The Bank may also deal in gold coin and bullion, and in obligations of the United States

The circulating notes of the Federal Reserve Bank shall be a first lien on all the assets of the Bank.

Government and its insular possessions.

The Board of the Federal Reserve Bank shall establish a minimum rate of discount, which shall
be uniform at all branches and sub-branches and which shall be changed from time to time as conditions demand.

While the minimum discount rate shall be the same at all branches and to all banks, that
minimum rate will only apply to the rediscounts of a bank up to an amount equal to a fixed percentage of its capital and surplus, thereafter such bank shall be charged a uniformly progressively in-

The Federal Reserve Bank shall have a first lien upon the assets of member banks for any indebtedness due from them.

As far as feasible the Federal Reserve Bank shall be exempt from the payment of all Federal and
State taxes, except taxes upon real estate.
As far as feasible the stock of the Federal R
and the dividends thereon shall likewise be free from all Federal and State taxes.








February 28 1914-

Mr. Benj. Strong, Jr.,
Bhnkers Trust Company,
16 Wall Street,
New York City.

Dear Mr. Strong:Your letter of February 27th h7s been

I certainly appreciate yOur courtesy in

taking the time to give me,the bene it of your

It is of great value



personal way,

Mr. Curtis as I do so closely in
and having this relation with


Vanderlip, it

ake a perfectly

has been rather hard for me to

equitable analysis of the mat er.
I have, however, just written Mr. Curtis

suggesting that a reasonablO fee would be $1000.00
and expenses.

Of course, I have not brought you

into the matter.

With deep aptreciltion of the trouble which
you have taken, I am,
Very truly yours,


Park, Oolo.,
October 5th, 1916.

Dear lir. Vanderlip:

he following, I believe, ummerizes our discussion in regard to currency

legislation but I must ask you to have in mind that no suggestion of a plan of legislation
to cover this difficult subject can be considered comelete without a much more careful
study of the experience to date in the adjustment of denomAngtions of our various kinds

of currency as well as other feetures of the subject for which data is not cvailable to
me here:

The title of the TNederel Reserve eot states that one of its objects Is to
furnish an elastic currency and by inference it does not attempt a complete reform of the
2Ailting currency.

It does authorize an "elastiO'" note - the Pederal Reserve Note, but

except for the purchase of 45,000,000 4% bonds every year by the Reserve Banks in order

at the end of 20 years to retire approminntely ;A500,000,000 of the present National 'Sank

note currency it leaves the currency of the past untouched.

As a meesure of safety, the

privilege of iseuing National Dank notes was eetended to the Federal Reserve banks on

subetentially the ea= terns as now enjoyed by Sationel BanXs so that they mieht not be
too heavily oomnitted in the ownership of Government bonds without means of issuing notes
against them.

Assuming that the Federal Reserve Banks availed of this .9 ivilege of

issuing bond secured notes, the currency situation would. remain unaltered save or the

fact that the Pederal Reserve extem could in time of need issue Feeeral Reserve Notes

secured by contnercial paper in addition to all ex:sting issues of notes in oiroulation.
This would mean that nearly SAxteen Hundred Million Dollars of currency would remain

indefinitely In circulation in the Vetted Ltates without adesuete gold reserve or adequate
machinery for prompt redemption in gold when demanded.

This currency consists oft


A - Greenbacks, that is, United States Notes - $346,000,000
B - Silver Certificates
- Treasury Notes
D - National Bank Notes

Total about


The real currency problem is, therefore, to transform the character of this
4,567,000,000 of currency so that it will have an adequate gold backing and be capable

of expansion and contraction; or, stated differently, the problem is to eliminate existing inflation in the form of our variegated currency already in circulation.
Viewed collectively, National Bank Notes, greenbacks and silver certificates

should all be classed as fiat money issued by the Government, as the gold reserve for
its redemption consists simply of $153,000,000 in the trust fund and the small amount
of gold commonly held in the general fund (which includes the 5 redemption fund) - the

silver bullion having no value for rederartion purposes since the Act of 1900.
The following general method of dealingtwith this currency might, upon closer

study, be found feasible:

An act might be passed providing that these should no lenger be raid out when
receiVed by the United Aates Government in collecting its revenues or by Federal Reserve
Banks when received on deposit.

As rapidly as received through either channel there

should be issued in substitution a like amount of Federal Reserve Notes anti simultaneously
the Government turn over to the Reserve Banks upon nome pro rata basis, ratable proportions
of the 453,000,000 of gold and of a new issue of low interest-bearing Government Bonds to
cover the difference between the

face of the United States notes retired and the amount of

the gold received.
The apportionment between the Reserve Banks of the amount of Federal Reserve

Notes to be issued in exchange for United States Notes Should be fixed by statute probably based upon the capital or capital and resources of the twelve Reserve Lanka, each

bank thereby receiving its pro rata of the gold out of the trust fund and of the new issue

-3-4 United Letates Bonds.

As this operetion would nitimately result in a holding of nearly

f200,000,000 of United States Bonds by the Reserve Banks, it would be necessary that a

conversion privilege at a higher rate of Interest be embodied in the plan so that the
Reserve Banks could divest themselves of a part or all of their holdings of these bonds in th
course of time.
Objection may be made that even at the rate of 2% this would put a large interest
charge, totalling near/y 44,000,000, on the Treasury

Against that it may be said that

the Government would save all of the expense of printing
a considerable item.


sisuing greenbacks, which is

The Treasury would also be relieved of the menace which the green-

backs have always caused in time of currency difficulties, particulerly when gold

is wanted

for export.

Another important object which vouid be gained by the retirement of the green-

backs is to accustom the people of the country to the use of notes Which can be immediately
redeemed in gold upon presentation.


has. not been the case with the greenbacks.

It is also

'95, 1907 and 1914 redemptions In gold were not glob.


important that the

Government should finally pay the non-interest bearing debts incnrred during the Civil

some concern has already been expressed in England that unlimited issues of fiat

money in the form of present currency notes will create
cheap money" by the Government.

the temptation will at times


demand for the "manufacture of

As long as greenbacks remain in circulation Ir this country

arise to enlarge the isnun. so as to "t,Inufacture cheap money".

The country must be taught to regard those as subsidiary coins issued for convenience in the form of paper notes but in fact having the same position in our citculating
medium that 25 and 50-cent pieces have.
find their way into bank reserves.

Too large a

The obligation

proportion of these silver certificates

of the Government to redeem them in gold

is too indirect to have practical value in times when gold is in


that the necretary of the Treasury must keep all our currency on

a parity with gold gives

The requirement

him e certain discretion in determining Whether a situation exists which calls for exchanges



An. silver certificates zo that the Art lips no practical force.

If, therefore,

the issue of large denomination silver oertifleatee can be gradually discontinued, in time

the groat bulk of this part of our ourreney will be carried in people's pockets and no
considerable amount be held by banks az reserves.

In order to accomplish this, the

denominations of our various kinds of currency must be Changed and a vacuum created by the

4thdrawal from circulation of other feinm of currency now issued in small denominations -

rincipally ten dollar cold certificates, five and ten dollar Eational Bank Notes and five
dollar greenbacks or ..eederal Reserve otee iseued in exChanee therefor.

The Federal Reserve Aot now provides that the Reserve Banks shall buy not less
than 25,000,000 of 2's every year and these they may convert into 3% 30-year bonds and


one-year notes - the latter subject to renewal upon demand of the Secretary of

the Treasury for e period of 20 years.

The 30-year bonds and one-year notes have no

circulation privilege. The interest limitation of 3e on the 30-year bonds Is likely
during long periods to prevent their being marketed by the Reserve Banks at or above their
cost and the Act should be amended so that larger amounts may be purchased annually by the
eeserve Banks and larger amounts converted annually by the Reserve Banks and when necessary

higher rates of interest allowed on the new bonds so that the Reserve Banks may be able to

sell them without loss, otherwise the effeet of the present law may be distinctly unfortunate.
If the 30-year bonds cannot be sold on a 3% basis, the investments of the 'eeserve Banks in

the course of 20 years eay consist principally or wholly of United etates Bonds.


danger of that occurrence would result in failure of the Reserve Banks to convert their
bonds and their being obliged to issue National Bank Notes in order to carry them; 'they
would thereby simply perpetuate the present bond secured currency.

qeserve Banks are put in position to

If, however, lie

liquidate these bond holdings as rapidly as they

accumulate, it becomes exceedingly important that means be created for issues of notes to
take the place of the retired National Dank Notes. Federal
to issue
Federal Reserve Bank of St. Louis

Uerein is afforded the opportunity

Reserve Notes in large amounts to fill the vaeuum caused by the withdrawal



Aational 3ank Notea.


Thee() issues should nave fur their redemption a very large gold

as the law now stands, if the Federal neserve Banks should retire 4500,000,030

of National Bank Notes, without reissuing them against the same

bonds, there would be a

currency famine in the United States which could only be met by issues of 2ederal Reserve
Notes ueon the security of commercial paper.

The time will come when the amount of

National Bank Notes retired (provided, of course, the Reserve Ranks are successful in
marketing their 3's) will cause an actual shortage of currency and there being no machinery

for issues of currency other than Federal Reserve Notes - the amount of
must be secured by commercial paper, will become unwieldy.

the issue which

This can be met by dealing

with the fourth problem; namely, -

0ur present currency laws provide that one-third of the total issue of gold
oortificates may be made in denominations of ten,'teenty end fifty dollars.

There ia in

circulation at present. 1 should judge in round figures, about Vie% Hundred Million of

gold eertificates of these denominations.

They are carried largely in people's pockets.

If the Government discontinues the Josue of gold certificates of these
the large denomination notes issued in their place will

small denominations,

drift into bank reserves inevitably,

thereby affording opportunity not only for the :National Banke to increase their gold hold-

ings and reduce their holdings of greenbacks and silver certificates eut for the Reserve
Banks, when the law is properly amended, to make large issues of Reserve Notes against gold.

The enlargement of the note reserve by that method would later on justify issues of IA)deral
Reserve Notes to fill the vacuum caused by the withdrawal of National Bank Notes.-


similar vacuum will be created by readjusting denominations of silver certificates.
With these changes in our laws, the ability of sederal Reserve Banks in cooperation with the Treasury Department to regulate the proportion of money of different

kinds in bank reserves end the proportion in general circulation, by adjustment of the
denominations of the various issues, can be exercised to bring about a result that would be

satisfactory to every orltic of the elan

eith Two and a half billions of gold in the

a(14!ary, no eoEsible objection eoule be ,lede to the eccumnlation of s total fund of, say,
One Thousand Million Dollers in bsnk reeervee by the plan proposed, ehiell would leave, as

at present, Recut Three Hurered 'Zillions en the genera] fund of the United States, (if we
include the Truet Fund) and %.hut Twelvo gunired Millione eivided between the reserves of

flational and state Banks End In current circulation.
To summerize, therefore, whet is required is.

Firet:- To retire the greenbecks.
eecond:- To reduce the denominetion of silver eertificetes.

2hird:- 7o eccelerate the retirement of National Benk


Fourth:- To discontinue iBS1108 of small denomination cold certifieL-tes

Fifth:- To make Federal Reserve Notes reserve money for member banks.

If the 'leserve Banks ere ermitte

to cediee a lerge enough fund or eold behind

their note issees to make the .esue coemarable in quality with the gold certificate or with
the notes of, say, the Bank of 'Trance in normal times, there is no sound objection that can
be raided to having Iliederal ?emery° otee count as reserves from member banks.

It is admitted that the above plan is imeossible, hover, unless we are willing
to accert the erinciple that 'Pederel Reserve Notes can be made satisfactory for tee cash
reserves of National 11,anks.

The ler as at present drawn is anomalous.

tiember banks may

count balances with Reserve Banks as a part of their reserve and under regulation of the
Reserve board may deoposit their entire reserve with a Reserve Bank, including all of their

vault cash, all of which will teen count as reserve.

vederal eserve Notes, however, do

not count as reserves although they are eeeured by the segregation of nolleteral for 100%

of their face value.
of 40%.

The eeserve Banks muet in addition carry a minimum reserve ef gold

The Notes are a prior lien on all of the sweets of the bank and must be paid

before the deposits are paid.

Every Reserve :lank must redeem the notes of every other

Reeerve Bane and, lastly, they are the obligation of the United etatos Government.


whe.e theory of giving a bank deposit a different reserve quality from a Wall& note is
wrong and iniqne in banYing history, exoept in our National Lank Act.

The real objaation

and nraotioally the only one whieh may be advanced to their counting as reserve liee la the

possibility or inflation.

If the ,leserve Leaks acquire, say, Five nundredaillions

additional gold by the issue of nye Hundred leillione of otee, as the law now etaads it
might be claimed that they could expand their loans and note issues combine by about Two

Billion Dollars.

This sounds dangerous and inflationary,

In the last analysis, the only protection against expansion of tnat aort rests
In the character and. qualitY of the management of the banks.

required, however, it muet be

if some;a6ory eheck is

at the point where the expansion Originates.

on the note issue would be of no value with the Reserve Banks on such an expended basis.
The ,Reserve Bank e would at such e time pay large profits to the Government and it reuld

exorcise no reetraint on the weneeement if some p,art of these profits were paid to the
Government in the form of a tax in nlace of being paid as eurplus earnings.


must, therefore, be applied upon the borrower Who is the cause of inflation and it eilit
be Wise to incorporate a provieion in the Vederal Revere.° 'Act which would necessitate an

increase in the rate of dleconet whenever the reserve got below a certain minimum.


system of minimem reserves M1V have protected the country against reckless banking.


has had the seeendary effect of deferring tne educetion of bankers.

They do not rely

upon pod judoment nor do the people of the country demand the exeroiee oE good judgment

such az ia exercised in other countries where statutory minimum recorvou de not exist.

No statutory restraint can be mede to work perfectly but if one must be Applied, it should

be In connection eith the discount rate rather then In the form of a tax. ,ftderal Reserve
Notes under the proroued conditions, with a large gold reserve, will be a much sounder
reserve for !;ational Banks then Are National BPra: Neter for state banks or greenbacks or

silver certificates for National 'Zemke, particularly if the reserve is customarily carried
at 75 or 8, as might be the ease, if the gold holdings of the Reserve Banks were

substantially larger.

By Way of illuetration of the faulty structure of the Pederal

-3Reserve Act in this eetoct, - the greet 0 etrEl ben-es of Marcie aceulre from 75 to almost
100',4 of their eola holdings throeeh ISM'S of notes rather than from the denosits of

ouetomers, who furnish vhe central tanke with only 21 or lens of their gold holdings.
veieeal Reeerve eystem todey ecgairee only 7% of it general reserve of gold from
issues of notes and W. from the deposite of member banke.

Theoretically, the member

banks might withdraw practioelly every (Lollar of ,old from the Reserve Benks In one day
by drawing cheeks on ehom - a situation vihich oannot &Hee when the gold is held against

a note cirouletion ehieh is aceepaele to the people

All the notee of the bank will

not be nresentel at one time.for redomntion, in fact, tn time of trouble, exnerience shows

that the notes of the central bariee ire hoarded.

Coelarison minht be made of the situation

which would arise in this country in case of war and that which exists in the belligerent
nations today velem the concentration of gold behind the note issues of the central banks
has afforded some of the belligerent governments the means of protecting the foreign
exchanges to an extent whioh otherwise would heve been impossible.
Another change in our law Which I am not as yet prepared to recommend without
eeservation relates to the practice of the Treezery Department in purchasing imported gold

bullion end coin.

By VOA present methods, practioelly all gold imported from elurope and

erOdueed by our domestic refiners is sold to thr, essay Office; payment is made in gold
oertificates, that is to say, by check on the Sub-Treasery An payment for the gold feeefetieenil
certificates oen be demanded End subeequently thrennh the mecl-inery of the banks end clear-

ing houses these old certificates get into general circulation.
adonted the raiglieh system or some modification of it.

It would be better if we

Gold imported or produced from

domestie mines should, if eoseible, be hadlod by the Reserve Inanke or the heser/e Banks
ohould be afforded some advantage so that the Reserve Bulks might, if they desired, acquire

this gold before it eot into


The simplest plan rveld be to discontinue

ineuing checks In immediate nayment for 99% of the arsumed value of the gold and mate the

depositor wait until the actual cold was coined.

This would eneble the Reeerve Banks to

make epot payment es the Bank of England now does and give them some control of the new

Other envIndments to the Poserve Ant not relating to the currency but which would

imnrovn the Act end 'tet the system tn its nolitioal fektnres are urinoinally two.


,..L.cicer of the lovermment shon/A be pn ex-officlo nember o! the r'edorel lbaerve Boari and,
consequently, the office of OTIP4''Mar should TIP held by the qovernor of the 3oard And the

2ecretar7 or the Trevsury should not be R member of the Board.
Comptroller of the Currency.

TheSA,111 would 73oly to the

Sulervisten and examination of member banks should be

conducted under the supervision of the wederal *Rannive Board. -,ctual examinations being

alade by the twelv,: Nerve banks.

A Bien of the Aeard should do ftll the business of

the Colsptrollor's office, excnnt that having to do wtth the currency and the bank

exauiners should be subject to tho direction of the vederal Reserve aents.
The other amendment should make it mandatory 'croon the reoretary of the Trepsury

to deposit all of the Government's rev.nues in the Reserve 3Fnk, except a fixed ouergency
fund :of gold.

If two vacancies should occur in the Bo4rd by the with-drawal of ex-officio
weg,bers, they should be filled by rotation from the twelve Reserve Banks, two of the

Governors serving in rotatIon for A nortion of each year.

An eaternative plan would be to

Lave two exnerienceJ 1,ankers apnointed PS medbors of the Board either by nomination of the
,fer banats or b;s, direct election by the member banks.

The above Is Grade but I believe includes the imuortant features of our
discus ion.
Very truly yoars,

2r. F. A. Vanderlip,
The Leviston.,

Estes Park, Colo.


Denver, Colorado,

January 4, 1917.

Dear Prank:

This is to thank you very heartily for t

: wonderful Christmas

gift which you sent me and which I can :ssure yo

use out here in this mountainous coun ry, also for
and good wishes.

.-11 be put to good
Christmas card

You will be interested

my two boys, Katherine and

I spent the holiday week wit

t Hewes-Kirkwood, Where we took

possession of the Whole place and

icking once or twice in the

o the

experience. We got

a wonderful tine. It was a novel

snow, by automobil and from there

we to the Hewes' with a 4-horse

team, part of the t me hanging on t

he side of the rig to keep it from

turnin6 over n the

ow banks, b

people prepa

got there safely and found those

week of real mountain hospitality.


of you a great

y times and believe you would have enjoyed it


much as the boy

id. The Hewes wanted to be remembered very



forward to a visit from George Roberts in a'few days

and you can understand the keen pleasure it will give me. Now for you dear
frank, I wish every good thing for the New Year - success and ha,rpiness and

lots of other things. Wont you give my warmest good wishes to Ur. Stillman?
Faithfully yours,
VanderlIps-, Esq.
National City Bank,
New York City.
Federal Reserve Bank of St. Louis


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Aine 3,


My dear Mr. Vandsrlips
fe have only within the last few- weeks been able to conclude the

inal accounting of the expenses of the various Liberty loans, and determine
to what extent, if any, expendituree made by the organization could not be
reimbursed by the Treasury under existing law, or rules of the Department.

We find

that the total

amount of such items that cannot be reimbursed is

Of this sum, the Federal Reserve Bank is able to absorb $2,%29.74.


The remainder,4308.23, I have paid personally.
The Liberty Loan Committee passed a resolution, agreeing personally
to assume certain charges, up to a limited amount, which as I recall was 10,000.

If the members of the committee

care to pay their respective shares of this sum,

the amount of each committeeman's proportion will be W.55.
Had these operations been
Act, it


nducted since the passage of the Voletead

not have been necessary to ask the committee to make any contribu-


Tours very truly,

Frank A. Vanderlip, Esq.,
111 Broadway,
iew fork, .4. T.


June 18, 1921.

My dear Mr. Vanderlip:

I thank you for the remittance of . .23.55,
which was received to-day.

Yours very truly,

Frank A. Vanderlic, Esq.,
111 Lroadway,

York, A. T.


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