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HOTELS ST JAMES 211, RUE ST Hoio 9114%4

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& D'ALBANY 202, RUE DE RIVOL'1
TELEPHONE: CENTRAL 3897
TELEGRANUSI ES II OTEL STJANIES-PAR IS

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CABLEGRAM

w yr". 01
3073 t

2012

"VIA COMMERCIAL",
RECEIVED AT

20 BROAD STREET,

M. SUBJECT TO TERMS AND CONDITIONS ON BACK HEREOF. WHICH ARE RATIFIED AND AGREED TO

TELEPHONE: RECTOR 360

BN RKI

GENOA

644
33

STRONG FEDERAL RESERVE BANK NY
NEWSPAPERS HERE REPORT TREASURY CONSIDERING CALLING EXCHANGE

STABWZATION CONFERENCE STOP IF REPORT CORRECT DESIRE
WRITE OR CABLE YOU REASONS AGAINST SUCH CONFERER:XE PLEASE
CABLE GRAND HOTEL VENICE
JAY

No inquiry respecting this message can be attended to without the production
through the Company's olffices, and not by applying directly to the sender.




a

this paper. _Repetitions of doubtful words should be obtained _

-T HE COMMERCIAL CABLE COMPANY.
AMERICAN

EUROPEAN OFFICES

OFFICES

TELEPHONE
Rector 380

NEW YORK
Commercial Cable Building, 20 Broad St..
(Principal Office, Always Open)
Stock Exchange
Cotton Exchange
2 Beaver Street (Produce Exchange)
Postal Telegraph Building
83 Gold Street, cor. Spruce
442 Broome Street
944 Broadway
4 West 37th Street

LONDON, (Principal Office, Always Open), 63-64 Gracechurch Street, E. C,
LtvimpooL, F 7 Exchange Building and Cotton Exchange.
MANCHESTER, 18 Moult Street, Cross Street (Opposite Royal Exchange).

Rector 380
Rector 380
Broad 427
Barclay 6700
Beekman 4416
Spring 1108
Gramercy 2891 and 2892
Greeley 3025

BOSTON
100 State Street
155 Federal Street (
HALIFAX, N. S.
Granville Street

BRADFORD, 8 Forster SquareNEWCASTLE-ON-TYNE, 29 Sandhill.

BRISTOL, Backhall Chambers, Baldwin Street.
GLASGOW, 11/5 Hope Street.
EDINBURGH, 18c George Street..
DUNDEE, 50 Bell Street.

Pams, 49 Avenue de l'Opera (New York Herald Office).

Main 180

HAVRE, 112 Boulevard de Strasbourg.

St. Paul 345

HORTA, FAYAL, Azores Islands.
CABLEGRAMS FOR TRANSMISSION BY COMMERCIAL. COMMERCIAL PACIFIC, HALIFAX & BERMUDAS, DIRECT WEST INDIA
AND COMMERCIAL OF CUBA CABLES ARE ACCEPTED AT ALL POSTAL TELEGRAPH AND
CANADIAN PACIFIC RAILWAY TELEGRAPH OFFICES.

TERMS AND CONDITIONS.
THE COMMERCIAL CABLE COMPANY may decline to forward any message, though it has been accepted for transmission, but in case of so doing, shall
refund to the sender the amount paid for its transmission.
THIS COMPANY WILL NOT ASSUME ANY RESPONSIBILITY IN RESPECT TO ANY MESSAGE BEYOND THE TERMINUS OF ITS OWN
LINES.
To guard against mistakes or delays, the sender of a message should WRITE IT LEGIBLY and order it REPEATED; that is, telegraphed back to the
sending station for comparison. For such repeating an additional charge of one-quarter the regular rate will be made.
It is agreed between the sender of the message on the face hereof, and this Company, that said Company shall not be liable for mistakes or delays
in transmission or delivery, or for non-delivery, or mis-delivery, of any unrepeated message beyond the amount of that portion of the charge which may or
shall accrue to this Company out of the amount received from the sender for this, and the other companies, by whose lines such message may pass to reach
its destination; and that this Company shall not be liable fot mistakes in the transmission or delivery, or for non-delivery, or /is-delivery of any repeated
message beyond fifty times the extra sum received by this company from the sender for repeating such message over its own lines.
This Company is hereby made the agent of the sender without liability to forward any message by the lines of any other company to reach its
destination.
,
This Company shall not be responsible for messages until they are presented and atmepted at one of its transmitting offices; if a meSsagel he sent to
such office by one of the Company's messengers, the messenger acts for that purpose as the agent of the sender ; if by telephone, the person recetvmg the
I

message acts therein as the agent of the sender, and is authorised to assent to these conditions on behalf of the sender.
This Company shall not be liable in any case, where the claim is not Presented in writing within sixty days after the filing of the message.
It is agreed that prompt and corrept transmigsion and delivery of this message shall be presumed in any action for recovery of the tolls therefor,
emlt,Iect, however, to rebuttal by competent evidence
This Company shall not be liable in any case for delays arising from interruptions to the working of its lines, nor for errors in cipher or obscure
messages.
In any event this Company shall not be held liable for any loss or damage, or for delay or detention, or errors caused by storms or the action of
the elements, or other acts of God, or by civil or military authority, or by insurrections, riots, rebellions, or dangers incident to the time of war, or by the
unlawful acts of individuals.
This is an UNREPEATED message and is transmitted and delivered by request of the sender under the conditions named above.
No employe of this Company is authorized to vary the foregoing.
CLARENCE H. MACKAY, PFASIDENT.
GEO. G. WARD, VICE-PRES'T AND GEN'L MANAGER.




7-

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ADIOGRAM
n
WORLD WIDE

CONTI N E NT

SHORE

TO
CONTINENT

TO

an,

I44 VIA

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WIRELESS

SHIP

,...1

TO

SHIP

S H i P7-t"---.,-,3-

RAD K) CORPORATION OF AMERICA
ity,k,R9

"VIA RCA

FORM No. lit

RECEIVED AF 64:BROAD STREET NEW YORK, AT

.

DATE

PARIS 42

:JC:i 24

723

STRONG FEDERAL RESERVE BANK

NEWYORK.

THANKS FOR MESSAGE FAMILY SAIL SEPTEMBER 21 STOP IF COMMITTEES SUGGESTION
IS AGREEABLE TO HARDING WILL PROBABLY REMAIN ABROAD FROM TWO TO FOUR
WEEXS THEREAFTER STOP I N CA BLI NG ANSWER PLEASE ALSO GI VE eHUX I iw TE:
DATE AGENTS CONFERENCE

JAY
S. S. George Washington is die to arrive on Saturday,
August 27, 10:00 A.M., Pier (1), Hoboken.

(Telephoned over private wire
from New York.)

The following cable from Mr. Jay, from London, was telephoned
over by Mr. Shepard Morgan this morning:

*71




STRTCTLY CONFIDENTIAL FOR GOVERNOR:

Austrian situationhas become nrogressively more acute since I
_
.

was in Vienna September 4 to September 8.

31, 5e,000,000,000 kronen

$1.00 on August 31

Currency on

against 20,000,000,000 a

August

year ago.

purchased 1,080 kronen against 240 a year ago.

Since May, however, exchange has fallen much faster than currency volume has risen, indicating decrease of confidence in
paper currency.

The returns of Austrian

Paris and London without securing aid last week was followed by
sensational further drop in kronen exchange.

Austria now

intense.

Discouragement in

The longer assistance or the hope of

assistance tkex is withheld, the greater will be:
First:

The difficulty of organizing assistance and
amounts required.

crisis when

Second:

The

Third:

The period of depression affecting our direct and
indirect trade with Austria.

prices fall

Norman is cabling you, but I want to express my views also
JAY

<,

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04$
<4

,b

(25
27th September ,1921.

tpiv /




Dear Ben,
I was ever so much obliged for your letter,
written while Norman was still in the United States and dealing very largely with Austrian matters, which reached me at
Geneva September 10th.

I didn't write you from there because

I thought I might have more to write after reaching London.
On arriving here and discussing the situation and reading the
exchange cablegrams everything appears to hang so heavily on
action by our Government that there is not very much to say
from this side.

In Vienna the attitude of the Bankers and others
was primararily one of discouragement at the constant postponement of help; also of being a little bored at being asked so
frequently to tell their story.

Perhaps this was due to my

following so closely on the heels of Vanderlip, who was there
the preceding week.

The reason why I wanted to go to Vienna, outsidel
the general interest of seeing the place, was to find out jus.

how the League of Nations plan was expected to work.

On arrival

there I received a copy of the printed plan which I had not
seen before and which told me much of what I wanted to know.
The

The Bankers I saw generally favoured the plan .4...4/4^"
if




°--

question whether the Government would have the
courage to effect the economies the plan contemplated.

Personally, I feel that to balance the trade of the country
greater efforts will be required in industry and agriculture
than the population now composing Austria has ever before
put forth.

Both of these difficulties might be overcome

under the leadership of a foreign controller)

if the

controller's personality were such as to enable him economically to assume leadership-

I am enclosing some figures given me by
Mr .Rapp, Secretary of the Austro-Hungarian Bank.

These

figures show the amount of Krone outstanding at the end of
ZAA/1/-

each of the ffrot 14 or 15 months, as well as the amount of
Krone for,which one dollar would exchange.
I have been informed that the Krone has been as low as 1600
for one dollar.

If

you put these figures on a chart you

will see that the first 3 or 4 months the decline in exchange

has been outstripping the currency inflation, indicating
decreased confidence in the Krone.
In Geneva I met Monet twice; once at dinner
and once at a little conference which I had with him and
Avenol and Nixon, the latter being Director of the Financial
and Economic Section of the League.

They were anxious to

post

/Post off an Austrian delegation promptly to the United States,




but I prevailed upon them to hold off until I could learn what

Norman had to say, being careful not to give them any inklint
of what you had written me.

I was in Paris Seprember 17th to

19th147,6 saw D.Jay pff who showed me a copy of the cablegram
Lamont had sent him, adtising postponement of the Austrian
visit.

He had sent a copy of this at once to Monet.

Shortly

after arriving here on September 19th and meeting Norman, I
wrote Monet along the same lines as Lamont's telegram.

Since

then one or two cables have been exchanged with you which are
far from encouraging as regards the prospect of getting anything
on the way.

I am fully sensible of the last paragraph of Your

cablegram of to-.day, in which you warn of the danger of stimulating false hopes.

But if further investigation is the pre-

requisite to a development of a plan, it seems to me we are bound
to run this risk, for such an investigation as has been discussed
cannot fail to arouse hopes.
I am having a very interesting time here and J

think a very worthwhile one, seeing a number to whom you gave me
letters as well as others to whom Norman has introduced me.
According to the cables from New York, the unemployment burden
is becoming rather acute in the United States.

Here it is

sharing the stage with Ireland and the enclosed cutting from
to-day's "Times", proposing to have the Government guarantee
credits

redits to set industr y going, will I am sure have a familiar
dund to you.

f======...1//"g




/12 to conditions here I don't feel in a position

yet to say anything worth saying, except to reflect the feeling
which I hear on all sides that the coal strike and its final
settlement produced a profound impression on labour and
opened the way for adjustments in other industries.

But(most

countries sem to be getting less, rather than more, balanced,
and in England the drain which the coal strike made on the
Treasury seems likely to be aggravated by the demand for
unempthyment relief.

I had a very pleasant and illiminating lunch
with your friend Masson in Paris.

His troubles seem to be

increased by the distressing illness of his Wife; but possibly
this is an old matter which you know about.
I am in t.bi,/, hopesthat you have been able to

get a week off after your labours with the Congressional Committee
in respect

which I decline to taketthe grain of salt you pres-

cribe but rather to believe all that Harrison and Morgan have

written.

You are having a great life, but don't get weakened.

Vissering has been communicated with concerning
a visit but no reply has come as yet.

As I cabled a few days ago

I am planning to leave here on the 7th or 8th of October and
with any kind of luck should be in the Office an the 17th.
This




This isn't much of a letter but you have gone so much
the

further into Austrian situation than I have that I have not
really very much to say.

time here and

I am, however, having a first-rate

as you know, Norman has taken me to stay

,

with him which is very delightful.
With my kindest regards to all,
I am
Faithfully yours,

_Governor Strong.




Re toe of exchence
for Do11er-,Nctev

r'

1.2e,t1

r

31, 1920

r

.15 ,797 ,805 .198

140

.9711747.054
18.721 ,494586

145

3 1. ,

20.059,280.965

240

Sept .30,

22 .271 ,686 ,342

270

25.120 ,785

405

Hey

ft

'June 70

July 71
Lug .

ff

Oct. 31,

If

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Nov

,

28 .072 ,330 .610

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Dec .

.

30.645,658.090

654

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652

38.352 ,647 .599

720

ft

41.067,299 .471

674

ft

45.036,722.777
45 .583 493.912

659

49 ,685 ,139 .857

718

54 .107 ,281 .148

949

58 .573 ,765 .679

1079

ESI or

31, 1921

Feb. 28,
oh. 31 ,
44)1

30

31,
June 30

le

July 1,
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$

ft

fV

1921

602

770,r6C(0..ki_k5"'144't
'14

4th Septeiaber,1921.

4-1-71.6

"t

Dear Ben,
On returning from Amsterdam I find your bully letter
of the 15th September and only wish I had received it before going as
it has some suggestions that we might have developed over there.

ag-aa
as

I won't attempt to answer it in any wa

this is Tuesday afternoon

and I am at present planning to sail on Friday and so haven't a great
deal of time.

I want to say, however, that I am thoroughly in sym-

pathy with the three general points to which you refer on page 2 of
your letter; also that I shall endeavour to find out all I can about
AAA414,

the

-kfte-T'60g_

situation here in London.

As to our meeting with Vissering.

We went over to

Holland on Thursday night and spent all of Friday with him, as well
as Saturday morning and Monday morning.

The general suggestion

of

a closer relation between the Central Banks was very sympathetically
received by him,he 'having already had in mind the desirability of
having a general meeting of the Heads of the Central Banks,.

This

however we told him we thought impracticable at the present time

when the questions to be dealt with were so largely and primarily
political.

He was anxious to discuss with us some of his hobbies

such as -




his plan of rationing credit and keeping his rate low;
the desirability of doing something to prevent the value of
gold being governed

by the fluctuations of the American

dollar; and
the

441

(c) th-&-fa-ct that they had not had inflation in Holland since the
Armistice alit+ t1-at since then the Notes of the Netherlands Bank

had not increased in volume.

We discovered however

that he had during this period developed a Giro System which
had the effect of economising greatly the use of Notes.
The net result of the conference was that, after giving us his views as tc

the composition of the Management of a number of the European central
Banks, he expressed himself as entirely ready to co-operate towards a
better understanding between the Central Banks, such understanding to be
brought about by private and informal visits in small groups such as
the initial one I am describing.

It was understood that some time

during the nejtweelohe would arrange to visit the Head of the Swiss
'-

National Bank to break the ice with him, such visit to be followed by
another conference later, at which perhaps one or two of the others
would be represented.

Meanwhile the way is being prepared this week

for a meeting between the ReichsBank and the Bank of England, through
an informal conference between two Directors of the respective institutions in Hamburg.

I.have not time to write more at this moment and
catch the Olympic mail, as I have two conferences this afternoon, one
with Baron Schroder and the other with Mr.Bell, which will take the rest
of the day.

On our return we found your two cablegrams about
rates and Austria, to which yOu will doubtless receive replies before
you get this letter.
IA.o not need to tell you that I shall be mighty
glad to get back again and at work with you, but I have had a splendid



vacation

vacation and a most interesting time in London.
.

I am

Faithfully yours
(CZAL_LA--

Governor Strong.







November 15, 1921.

I assume that your question refers primarily to the confidential
memorandum on reparations payments attached to Norman's letter.
to this the following thoughts




With regard

occur to me:

I assume that it has been ascertained that the Reparations
Commission to which the payments must be made is authori2ed to
accept such securities in payment.
It is a most ingenious method of resurrecting dead assets.

It would not interfere with France getting coal and other
paymentsin kind, which are likely for the next three or four
years to absorb pretty much her entire share of the reparations
payments.

It would in the long run prevent France from coming into

possession of those current resources to which she is looking to
balance her budget.

To the extent tc which England is entitled to cash payments
instead of payments in kind she would recover a considerable portion of the French and Italian Treasury bills which she had furnished
to Germany.

If persisted in as a fixed policy it would make a farce of the
reparations payments and, I should say, split the entente wide open
and stir up in France an intense hatred of England.

But as a trump card to force France to a revision of the
reparations programme it is A-1.

I think, however, that frankness

would require this matter to be discussed on its merits and the
trum-,2 card kept at the background.

As to the attitude of our Administration upon this idea I, of
course, have no thoughts, having not been in touch with the Administration
on any of these subjects.
I am much interested in the relation of the visit, and I should
like very much to see Norman's confidential cable No. 90.
As to the visit of the Germans remaining practically unknown, I
think you probably saw reference to it several times in our papers here.




FEDERAL RESERVE BANK
OF NEW YORK

MISC. 4.1100M 11-21

:;1=FICE CORRESPONDENCE
To

Mr. StronA

DATE

February 3/

SUBJECT'

FROm Mr. Jay

This chart is the basis of the view I expressed to you in Atlantic
City, that we were extremely unlikely in the absence of another war to have
a recurrence of the rise in pricesvhich we experienced in 1917-20.




1922

PRICES
U.S. AND ENGLAND

WHOLESALE
PER CENT.

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FEDERAL RESERVE SANK
OF NEW YORK

RRES

DENCE

Governor Strong

November 29, 1921.

ATE

S UBJ ECM__

Mr. Jay

I am delighted to hear from both Miss Orlich and Ben that you got
through the operation in good shape and are feeling fine,

I hope to see you

before long, and in the meantime wish you the best of luck.

I stopped in

this morning to see Miss Or/ich and find out what the news was and had quite
a chat with her.

What an unusually niCe person he is.

In Washington I was able to see both Wadsworth and Mellon.

The

atter took the attitude that the plan seemed to him workable but that he did
ot know why the views of the Administration should be reouested, and that they
ould be unwilling to express any views about it b4cause the fixed policy was
o have nothing to do with reparations.
e in the

Wadsworth said he would talk with some-

tate Department, although the Secretary said he did not see much

se in doing so as he knew very well what their attitude was.

I have not yet

eard from 'Adsworth but hope to before the end of the day, and then propose
o cable Norman accordingly which, in fact, will merely confirm the, surmise in

his regard which you put in ycur letter now on its way across.

a--

'

With regard to Class C directors a committee has been appointed consisting of Platt, Mitchell and Crissinger to report to the Board in respect to
all the twelve Class C directors whose terms expire this year.
Mitchell and they both are favorable to Milliken.

I s

I understand that Orissinger

has some question about it because he is a director of the City Bank.

I under-

stand, also, that the Secretary rather favors Leffingwell.
I learned that Crissinger was disturbed about our practice of assisting

bili houses from time to time and we have invited him to spend Thursday with us
here looking over the bank and attending the annual luncheon and meeting of the

Jriericarl


Acceptance Council so as to get him a bit educated on acceptance practices.

FEDERAL RESERVE BANK
OF NEW YORK
.

ICE CORRESPONDENCE
SUBJECT:

FROM

_

-2-

Wills is going

to be here Wednesday and Thursday and Harding iE coming

over on Thursday to talk with us about public relations work.

I am very hopeful

of our getting him interested in having the Federal reserve banks undertake this
work.

If so, there is no doubt that the work will go forward.
Mr. Beyer has just given me a mass of papers which you have sent'down,

which I\have

glanced over hastily and will try to attend to at the earliest possi-

ble moment, including trying to get off a cable

ing your suggestion

regarding

I am trying

the

to have a

to

Norman

this

afternoon contain-

reparations matter.

letter

prepared in answer to some of these

for submission to you in the course of a day or two.




With best of luck to you, and hoping to see you
Faithfully yours,

soon, I am,

things

AFTER 5 DAYS. RETURN TO

FEDERAL RESERVE BANK OF NEW YORK
CORNER PINE AND NASSAU STREET
NEW YORK CITY

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- MISC. 34 .1 60M
1

1-1

FEDERAL RESERVE BANK
OF NEW YORK

SENT BY

Federal Reserve Bank, 15 Nassau St.

SEND TO FILES

COPY OF TELEGRAM,

July 27, 1922.

Strong
re/0.3h.arles Smith

Onennta fieo Lrk

(Please de/iver at kr. Smith's home)

end.on cable recuesting 5rompt elsmer arrived after you

/ill telehone you between eight and eight thirty tamormw

morning




.

Jay

PUlait 1204
CLASS OF SERVICE SYMBOL
Telegram

Vey Letter

Blue

Vir ESTEoisLs,

Is.,.(x Letter

NL

If none of these three symbols
appears after the check (number of
words) this is a telegram. Otherwise its character is indicated by the
symbol appearing after the check.

Telegram

Day Letter

TEL

NEWCOMB CARLTON, PRESIDENT

Blue

Night Message

WESTERN UNION

Nile

Message

CLASS OF SERVICE SYMBOL

N ite

Night Letter

NL
If none of these three symbols
appears after the check (number of
words) this is a telegram. Other-

GEORGE W. E. ATKINS, FIRST VICE-PRESIDENT

wise its character is indicated by the

symbol appearing after the check.

diN I A, N. Y. 20 UROAD-51.
RECEIVED AT

87NY AC 25 6 EXTRA

NEW YORK NY 457P JULY 27 1922

BENJ STRONG

/

CARE CHARLES St IT H "PLEASE DELIVER AT MR SMITHS HOME"ONEONTA NY

LONDON CABLE REQUESTING PROMPT ANSWER ARRIVED AFTER YOU LEFT WILL TELEPHOrE

YOU BETWEEN EIGHT AND AIGHT THIRTY TOMORROW MORNING




JAY

528P

MISC. 34.1 40M

4-5-22

FEDERAL RESERVE BANK

SENT BY

SEND TO FILES

OF NEW YORK




FEBtiOPY OF
VIDERAL RESERVE

&P.IAH

LtEGRAM

131

SA7 tik,W 'bast

February 1, 1923.

71nterpark, Florida

Crt, you indicate address where letter ,Tritten you fomorrof,
sedond wou dresoh you. r..)051re to write concerning Tutter you
discur::,ed fully at recen' directors meeting and ebout bf you

wrote lone letter to Miller.

Pierre Jay

CLASS OF SERVICE SYMBOL
Telegram
_

Letter

Blue

At Message

,
WESTE424M4 UNION

Night Letter
NL
If none of these three symbols
appears after the check (number of
words) this is a telegram. Otherwise its character is indicated by the
symbol appearing after the check.

E

NEWCOMB CARLTON, PRESIDENT

CLASS OF SERVICE SYMBOL
Telegram

M

GEORGE W. E. ATKINS, FIRST VICE-PRESIDENT

Day Letter

Blue

Night Message

NIHON UNION

Nite

Form 1204

Nita

Night Letter

NL

If none of these three symbols
appears after the check (number of
words) this is a telegram. Otherwise its character is indicated by the
symbol appearing after the check.

RECEIVED AT

40KX .D 35
Q NEWYORK NY 540P FEB 1

1923

BENJAMIN STRONG
\Al "TER PARK FLO

WRITTEN YOU TOMORROW FEBRUARY
CAM YOU INDICATE ADDRESS WHERE LETTER
YOU DESIRE TO WRITE CONCERNING MATTER YOU DI SUSSEDSECOND WOULD REACH

YOU WROTE LONG LETTER
FULLY AT RECENT DI RECTORS MEETING AND ABOUT WHICH

TO MILLER




PIERRE JAY
616P

FEDERAL RESERVE BANK
OF NEW YORK

February 3, 1923.

Dear Mr. Strong:

When I telegraphed you on January 31 I wanted to inquire whether,
in your opinion in view of the acceptance by the British of the debt terms,

we should not postpone considering the subject you discussed with our directors just before you left until the attitude of Congress in regard to the
British matter became crystallized.

Later I asked Mr. Gilbert if he had

any views on this subject and he said he felt quite strongly that unless it
was considered necessary here to make some change it might have an unfortunate effect on the consideration of the British t3rms in Congress.

I wanted

to get your view on this matter, and we should still like to have it, although

Mr. Case and I have reached the conclusion that,in view of Mr. Gilbert's
feeling and in the absence of any pressing consideration just now, we should certainly

not make any recommendation at the meeting next Wednesday, February

8.
I hope you are having a fine rest and that the extra days you are
contemplating taking will finish up the job well.

I am planning to go off

with Mrs. Jay on the 17th to Bermuda for a couple of weeks unless you see
some reason to the contrary.

Case, I believe, has telegraphed you about the salaries, the news
of which was received with the greatest satisfaction here.

Jefferson is going

off to Eogota for six or eight months with Kemmerer, and we have given him a
leave of absence for the necessary period.

As Mrs. Case is to be operated on this afternoon I am going over to
Boston for the meeting of the bond committee on Monday, February 5, in his



#2
_RESERVE BANK OF NEW YORK

place.

Benj. Strong,Esq.,

I understand that Mitchell of the Board is probably going over.

Wills is going in place of Fancher.
Hoping you are enjoying yourself thoroughly,
Faithfully yours,

Benjamin Strong, Esq.,
Desota Hotel,
Savannah, Georgia.




2/3/23

Form 1204
CLASS OF SERVICE SYMBOL
Telegram

v Letter

Blue

...gtt Message

Nite

NI
Night Letter
If none of these three symbols
1

appears after the check (number of
words) this is a telegram. Otherwise 0 character is indicated by the
symbol appearing after the check.

WESTEaSEX UNION
s.
AM
TEL
WESTERN UNION

ziptit

NEWCOMB CARLTON, PRESIDENT

GEORGE W. E. ATKINS, FIRST VICE-PRESIDENT

CLASS OF SERVICE SYMBOL
Telegram

Day Letter

Blue

Night Message

Nite

Night Letter

NL

If none of these three symbols
appears after the check number of
words) this is a telegram. Otherwise its character is indicated by the
symbol appearing after the check.

RECEIVED AT

45AZ KO 91
P BOSTON MASS 500P FEB 5.1923
BENJAMIN STRONG

BUN AIR AUGUSTA GA

0

SORRY THROUGH MISUNDERSTAND I NG LETTER NOT MA ILED

in.

IT

FF

SUGGESTED A8

ILL SUNDAY STOP

I

SIMPLY WANTED TO SAY THAT OWING TO STATE OF DEBT NEGOT I Al I ONs WE THOUGHT
INOPPORTUNE TIME TO MAKE RECOMMENDAI IONS TO OUR BOARD ALONG L I NE YOU

IT MIGHT POSSIBLY ADD TO DIFFICULT IES OF SECUR ING RAT IF ICAT ION

SUP HAVE. JUST ATTENDED MEET I NG OF SECUR IT Y, COMM IT TEE IN BOSTON IN PL/10E
OF CASE AND SUGGESTED.THIS ASPECT AND FOUND ALL IN EMPHATIC AGREEMENT
I NOLUL I NG MI TCHELL WILL WRITE YOU WEDNESDAY 0 AUGUST A AM NOW I NCL I NED TO
TH INK NOT NECESSARY FOR YOU TO STOP I N WASHI NGTON

P JAY
750P

1111111111111111111111




CABLE ADDRESS -COPLAZA" BOSTON

ONE BLOCK FROM BACK BAY STATIONS

TELEPHONE BACK BAY 5600

THE

ti)OPLEYPLAVZ A
DARTMOUTH STREET-TRINITY PLACE- COPLEY SQUARE

BOSTON MASSACHUSETTS
EDWARD C. FOGS

MANAOING DIRCCTOR

(e)c

CT

,
Gkr(At-e-7---- 4.




}I

_

L

VA




ONE BLOCK FROM BACK *BAY STATIONS




CABLE ADDRESS "COPLAZA" BOSTON
TELEPHONE BACK BAY 5600

THE
(1) OPIAZY-PLAW, A
DARTMOUTH STREET-TRINITY PLACE- COPLEY SQUARE

BOSTON MASSACHUSETTS
EDWARD C_ FOGG

MANAel NG DIRECTOR

&/3

-




CABLE ADDRESS "COPLAZA" BOSTON

ONE BLOCK FROM BACK BAY STATIONS




TELEPHONE BACK BAY 5600

THE
C OPLEYA-PLA
DARTMOUTH STREET-TRINITY PLACE- COPLEY SQUARE

BOSTON MASSACHUSETTS
-

-

.

EDWARD C FOGG

G DIRECTOR

r




if

MOO

Form 1204

CLASS OF SERVICE

SYMBOL

CLASS OF SERVICE SYMBOL

Telegram

-y Letter
Night Massada

Telegram

M.

Day Letter

Blue

Mte

Night Message

Nite

Night Letter

NL

NL
these three symbols

Night Letter

If none of

appears after the check (number of
words) this is a telegram. Otherwise its character is indicated by the
symbol appearing after the check.

If none of these three symbols

NEWCOMB CARLTON, PRESIDENT

GEORGE W. E. ATKINS, FIRST VICE-PRESIDENT

appears after the check number of
words) this is a telegram. Otherwise its character is indicated by the
symbol appearing after the check.

RECEIVED AT

21 AZ (4 94
Q NEWYORK N Y 149PM FEB 7 1923
BEN) STRONG

HOTEL BON AIR AUGUSTA GA

GILBERT WRI1ES YOU HE WOULD LIKE TO SEE YOU IN WASHINGTON ON WAY
NORTH TO DISCUSS TWO WAY EXCHANGE STABILIZATION IN FINAL DEBT AGREEMENT

TWELFTH IS HOLIDAY HERE OUR BOARD LOOK NO ACTION THIS MORNING PLODGERITE

TELeAPHS
AND

REGARDING TWELVE MONTH AUSTRIAN BILLS SOON TO BE ISSUED

ASKS YOU IF POSSIBLE TO LEND A HAND WITH PUBLICITY AND SUPRRORT

SUGGESTS CONSULTING BANKING HOUSE HERE THIS HAS BEEN DONE BUT HOUSE

CONSIDERS THAT UNDER PRESENT CIRCUMSTANCES AND IN VIEW OF LIMITED
.GUARANTY

NEWYORK BANKS COULD NOT BE INIERESIED SHALL WE MAKE ANY
222PM
PIERRE JAY


REELY FOR YOU


MISC.34J 40W 4,,2
FEDERAL RESERVE BANK

SEND TO FILES

SENT BY

OF NEW YORK

COPY OF TELEGRAM
!WRAF!

,

February 7, 1925.

Benj. Strong, Neg.,
Hotel 80nair-Vanderbilt
Augusta, Georgia

Gilbert writes you he scuid like to 'see you in Aashington on way north to
twe way exchange

stabilizp.tion in final !ebt agroemnnt, Txelfth is

holiday here. Our board took no action this morning.

Plodgerite telegraphs
regling teenve month Austrian bills soon to be issued and asks you if
possible to lend hand with publicity and support. Suggests o:11sulting
bnkln house here. This has been done but house considers that under 2:rent
circumet noes and in view of limited guaranty Nc:tT York banks could not be
intorested. Shall t*e meike any reply for you..



Pierre Jul

Form 1204
CLASS OF SERVICE SYMBOL

CLASS OF 'SERVICE SYMBOL

Telegram

Telegram

w Letter

Blue

Day Letter

Blue

,ht Messaae

Nile

Night Message

Nile

fe.iht Letter
NL
If none of these three symbols
appears after the check (number of
words) this is a telegram. Otherwise its character is indicated by the
symbol appearing after the cheek.

Night Letter

NL
If none of these three symbols

NEWCOMB CARLTON. PRESIDENT

GEORGE W. E. ATKINS, FIRST VICE-PRESIDENT

appears after the check number of
words) this is a telegram. Otherwise its character is indicated by the
symbol appearing after the check.

RECEIVED AT

23AZ LI 54
IV NEWYORK N Y 1221PM FEB 8 1923
BENJ STRONG

HOTEL BONAIR vANDERBILT AUGUSTA GA
TELEGRAM RECEIVED WE SEE NO PREANT REASON FOR YOUR EARLY RETURN
MRS JAY AND

I

ARE PLANNING A FORTNIGHTS

TRIP TO BERMUDA BEGINNING

SEVENTEENTH IF NOT IN CONFLICT WITH YoUR PLANS HARRISON PROGRESSING

WELL bUT SLOWLY LIKELY TO BE IN HOSPITAL THREE OR NUR WEEKS LONGER
MRS CASE PROGREsSING ENTIRELY NORMALLY WIRING PLODGERITE TODAY




PIERRE JAY
102PM

e)

FEDERAL RESERVE BANK

OF NEW YORK
March 14, 1923.
A

Dear Governor Strong:

Mr. Case tells me that he showed you his memorandum regarding
his ideas of indicating on the statement of the twelve Federal
Reserve Banks that perhaps $500,000,000 of gold
might return to foreign countries, and

of presenting two reserve percentages, one on the
present basis and the other with the $500,000,000
of gold subtracted.
At the present time the two
percentages would be 77% and 65% respectively.
You will note that he has changed his suggestion from $1,000,000,000
to $500,000,000.

This suggestion was discussed at our directors' meeting

last week, March 7, at which Mr. Miller was present, and M. Miller has
written Mr. Case asking for a copy of his draft in order that it may be
considered by the Board.

Mr. Case tells me that he lunched today with

Mr. Alexander, Mr. Chandler and Mr. Catchings, all of whom felt favorable
to his plan.

On the other hand, Mr. Warburg and Mr. Miller are favorable

to a plan of putting 100 per cent. gold behind the Federal Reserve notes.

This 1444-1eave us a reserve on deposits at the present time of about 49
cent.
per cent.

The following objections to Mr. Case's plan have occurred to me.
Very likely there are others.




The figure of $500,000,000 is arbitrary and is not
susceptible of being even closely estimated.
The law does not contemplate the setting aside, even
by implication, of any such reserve.

F.

If $500,000,000 more gold were imported and the reserve figure went back to 77%, would people be
justified in considering 77% the normal basis,
or would we set aside the new gold that came in?

,/

/MSERVEBANKOFNEWYORK

Benjamin Strong, Esq.,

#2

3/14/23.

rR
4.

65%, the adjusted percentage, would not normally justify
a higher rate than 4 1/2%.

Nevertheless, I am impressed with the value of using the Federal
Reserve statement each week as the place to educate people to the idea that
gold will go out and that the reserve percentage is not to be considered as
the index of credit conditions.

If this idea, which we are all keen to

have spread, is expressed only through speeches, pamphlets, etc.,
Many people will not see it,
Most people who do see it will forget it.

But, on the other hand, if some statement can be devised which can be published at the foot of the Federal Reserve statement each week as an integral
part of the statement, then everyone who reads the statement and looks at its
figures will get this caveat.

That is the best rostrum in the world from

which to proclaim it.

I have an alternate suggestion, prepared yesterday and therefore
not very well matured, which is embodied on the enclosed Federal Reserve statement, marked "Jay plan."

There is also enclosed an Federal Reserve statement

marked "Case plan."

These two suggestions of Case and myself were discussed by our directors yesterday morning, and there was some feeling that it would be well if our
directors at our meeting on March 21 should recommend one or the other, or a
combination of the two, to the Federal Reserve Board for their consideration.

I should like very much to get your view as to the desirability or practicability
of either or both of them; in order that, when we discuss the matter at our meeting next week, I may have your view to present.

Of course, this is provided

you feel up to giving any attention to such matters.

My suggestion would be

that if you feel like replying at all you will send me a good long night letter
which I think you could do without anybody's knowing what you are talking about.



GSERVE BANK OF NEW YORK

#3

Benjamin Strong, Esq.,

3/14/23.

I suggest that if you do this you refer to Mr. Case's plan as primus and to
mine as secundus.

We were mighty glad to learn of your safe arrival through your
telegram to Case.

Mr. Woolley also had a telegram from his friend out there

which not only spoke of your safe arrival but of how favorable a case yours
seemed to be.

I also want to acknowledge your letter from Chicago, and at

your request will endeavor some time to ponder deeply over the question you
raise, though I don't think I can do it with any openness of mind.

The ex-

perience of the past has only confirmed the conviction I have had on every
other one of your leaves, that the only course to pursue was to get you back
on the job as soon as possible.
With best regards,
Faithfully yours,

Benjamin Strong, Esq.,
Care Cragmore Sanatorium,
Colorado Springs, Col.




UrTII, FRIDAY WRY. INC! P 1.F ER8, MARCH 2, 1923

MT AR ATTU: STTPE1T OF CONDITION
11;TEL1TE FEDERAL RESERVE EP_NK s COMBINED

AT THE CLOSE OF BUSINESS

1923

FEB . 21 , 1923

MARCH 1 _19:22

302,611 ,000
604_,LOILLCLO
906,619 ,000

307,668,000

380 ,406,000

877,525,000

901 ,679 1000

2,108,767,000

2 ,142, ,076,000

1 ,98? ,061 ,000

FEB .

2R

RESOURCES
Gold and gold certificates
Gold settlement fund. - F.R. Board
Total gold held by banks
Gold with Federal Reserve Arents
Gold redemption fund
Total gold reserves

.

5'

,

55 64]. ,S)00

'V''7

3 ,075,242 ,000

3,072 ,813 ,000

Reserves other than gold
Total reserve

000

2 ,951 ,434 ,000

LOST_

120L.L...).7_,221

129_,25:',_,ST 0

3 ,201 ,600 ,000

,cre

3 ,080 ,793 ,000

2_8_

Non-reserve cash ..
Bills discounted:
Secured by U .S .Gov t obligations

3 ,2,03 ,609

45 , 824 ,000

68,108,000

356,039 ,000
239,721 ,000

368,241 ,000
259,682 ,000

207,670 000
803,438,000

182 ,353_,000

810,276,000:

803 ,221 1000

173,975 ,000

167 ,420 ,000

,oro

186,614,000

163,322 ,000
249 ,716,000

1 ,166,512 ,000

,1647,71-0-,000

1 ,216 , 421 ,000

47,863 ,000

47 ,042 ,000

37 ,P,32 ,000

311 ,000

311 ,000

8,362 )0(70

608,167,000
16 799 000

606,009 ,000

505,782 ,000

16,566 000

15259,000

`<, 5,087 ,075 ,000

106,75_5)000

$4,864_,349 ,.000

108,874,000
218,369,000

103,736,000

43,401 ,000

46,306,000

1,837,552,000

1 ,897,685 ,000

60,770 ,000
1 ,725,069 ,000
32 607 ,000

Other bills discounted
Bills bought in open market
Total bills on hand

U. S. bonds and notes
U. S. certificates of indebtedness
Municipal warrants
Total earning assets

189,099

422 ,175 ,000
95 ,

102. 000

Bank premises
Redemp *fund against F.R .Bk <notes

Uncollected items
All other resources
TUTU., RESOURCES. .

205,376 ,000

LI kBILITIES
Capital paid in
Surplus
Deposits
Government
Member bank - reserve account
Other deposits

$

218,369 ,000

... .

;;)

21 ,364_,001

21 ,917 ,000

1,965,900,000

2,246,943,000.
2,645,000

2 ,260 ,497,000

546,254 ,000

520 ,329 ,000

1,810,446 ,000
2 496,983 ,000
80 ,095,000
432,241 ,000

11 t581 ,000

_11_2712 ,000

1. 7_,(_2_ cif_

,076 000

F.R.notes in actual circulation
F'.R . Bank 'notes in cir. - net liab
Deferred availability items
All other liabilities ..

$5 406,755 000

p4_ P64_,349 COO

TOTAL LIABILITIES
Ratio of total reserves to deposit
and F.R.. note liabilities combined

76 .2ro

3,066,000

75 .8%

shown separately prior to January 1923

R-rtrrt-tlrir-T.retrraor
Assuming th
sum of t500,200,')00. were
to be dediu,Aed from "Total Peserves',
and set ai ide for future export, the
',Reserve ',atiot, would be reduced by
approximi
1,2 points to

tfy




215 ,398,000.

1 ,952 ,317 ,000

Total den°. sits

-t

108,867,000

sre

76.7%

:VE STATEMLNT OF CONDITION
]RAL RESERVE BANKS CnBINED

nELVE

LOSE OF BUSINESS

Al THE

MAR. 14, 1922

-AR. 7, 1923

MAR. 15, 1922

RESOURCES
313,211,000
638,208,000
951,419,000

311;550,000
645,285,000
956,835,000

321;283,000
484,180,000
805,463,000

cold with Federal Reserve Agents
Gold redemption fund
Total gold reserves

2,068,613,000
58,262,000
3,078,294,000

2,074,043,000
52,763,000
3,083,641,000

2,090,124,000
80,435,000
2,976,022,000

Reserves other than gold
Total reserves

118,275,000
3,196,569,000

117,633,000
3,201,274,000

125,375,000
3,101,397,000

67,917,000

'70,144,000

361,286,000
251,773,000
225,416,000
838,475,000

330,093,000
241,394,000
218,886,000
790,373,000

229,068,000
362,662,000
87,311,000
679,041,000

Cold and gold certificates
Gold settlement fund - F.R. Board
Total gold held by banks

Non-reserve cash
Bills discounted:
Secured by U.S. Gov't obligations
Other bills discounted
Bills bought in open market
Total bills on hand
U.S. bonds and notes
U.S. certificates of indebtedness:.
'Municipal warrants
Total earning assets

160,679,000
184,034,000

157,976,000
186,911,000

1,183,188,000

1,135,260,000

215,093,000
383,274,000
102,000
1,277,510,000

Bank premises
5% Redemp.fund against F.R.Bk,notes
Uncollected items
All other resources

48,108,000
291,000
689,039,000
17,348,000

47,937,000
311,000
618,956,000
17,113,000

38,005,000
8,005,000
607,795,000
15,310,000

5,2)2,460,000

5,090,995)000

5O48,O22,0O0

TOTAL RESOURCES

-

LIABILITIES
Capital paid in
Surplus'

$ 108,483,000
218,369,000

108;852,000 3
218,369,000

103,948,000
215,398,000

Deposits':

Government
Member bank - reserve account
Other deposits
Total deposits
F.R. notes in actual circulation
F.R. Bank notes in cir. - net liab
Deferred availability items
All other liabilities

TOTAL LIABILITIES
(1)

Ratio of total reserves to deposit
and F.R. note liabilities combined

621,433,000
12,885.000

38,773,000
1,879,697,000
24,392,000
1,942,362,000
2,256,302,000
2,788,000
549,513,000
12,309,000

16,789,000
1,845,493,000
51,181,000
1,913,463,000
2,188,593,000
78,029,000
529,912,000
18,679,000

35,202 460,000

35,090,995,000

5,048,022,000

42,442,000
1,932,714,000
20,633,000
1,995,789,000
2,242,902,000
2,599,000

75.4%

76.2%

75.6%

* Not shown separately prior to January 1923
441.1-cerepd--13.5=-44,' olirrat'afteirlt-roe--ifeliks4-44.604,-Yrrir

(1)

The high level of the present reserve ratio should not be regarded as an
the volume of credit available for ord-nary uses.
it is largely
due to the volume of gold now held by the Reserve Banks, vilich has increased
t1,024 000 000 since January 1 1921. This gold, received mainly from foreign
countries, not now on a gold basis, is liable to flow out again in whole or in
part as conditions abroad become more stable, tLereby reducing the reserves to
a level more moderate but still ample for credit requirements.

Note:-

indication of




1,o-/A/s

t
1\-iitc"a

4,v-e.14

Twice

Ti ESTE47rASEINI

SYMBOL

,ram
Day Letter

Blue

Night Message

Nite

CLASS OF SERVICE SYMBOL
Telegram
Day Letter

NI
Night Letter
If none of these thr e symbols

TEL

appears after the check (number of
words) this is a telegra m. Other.
wiseits character is indi ated by the
symbol appearing after t e check.

vs.

NEVVCOMB CARLTON, PRESIDENT

Hite

NL
Night Letter
If none of these three symbols

rev

appears after the check (number of

words) this is a telegram. Otherwiseits character is indicated by the

GEORGE W. E. ATKINS, FIRST V10E-PRESIDEN7

RECEIVED AT 17 E. PIKES PEAK AVE., COLORADO SPRINGS, COLO.

VA6,277 NL,.+ 3/70

Blue

Night Message

WESTERN UNION

symbol appearing after the cheek,

i923 MAR 24 AM 7

28

OLIPLICATr
BALT I MORE MD, 23

PHC:vrzo
n..,77:c. nit

BENJAMIN. STRONG

34

CRA GMOR

SA NI TA R I UM, COLORA DOS PR I NGS COLO

HAVE JUST ATTENDED TWO DAY DISCUSSION BY: PROFESSOR AND COLLEAGUES

IN ADDITION TO

REGARD I N G. PROFESSORS I PLAN TO RESTATE RESERVES

COMBINED PERCENTAGE HE PROPOSES TO. PRINT TWO NEW PERCENTAGE FIRST
,

AGENTS GOLD TO NOTES, SECOND BANKS GOLD AND LAWFUL MONEY TO DEPOSITS

TO RESPECTIVE FIGURES NOW WOULD BE NINETY FOUR AND FIFTY SE VEN
.

STOP THEN PROFESSOR AND COLLEAGUES WOULD AT PRESENT . ISSUE NO FURT HEP
NOTES AGA I NST




,

PAPER THEREBY THROWING BURDEN




ACE SYMBOL

.tter
CLASS r
P

t Letter

Blue

Nite

NI

If none of these three symbols
appears after the check (number of
words) this is a telegram. Otherwiseits character is indicated by the
symbol appearing after the check.

WESTE

CLASS OF SERVICE SYMBOL

ow 3 ,,

Telegram
Day Letter

N..... TEL
CARLTON, PRESIDENT

Blue

Night Message

WESTERN UNION

Mite

NL
Night Letter
It none of these three symbols
appears after the check (number of

words) this is a telegram. Otherwiseits character is indicated by the

GEORGE W. E. ATKINS, FIRST VICE-PRESIDENT

symbol appearing after the check.

RECEIVED AT 17 E. PIKES PEAK AVE., COLORADO SPRINGS, COLO.

CF
vA 6

923 MAR

24 AM 7 28

SHEET, V/100

OF FURTHER NOTES;. ISSUES. ON DEPOSIT RESERVE STOP HAVE APPLIED, PLAN

BACK TO JULY' 1920 TO ACTUAL FIGURES, OF BANKS AND. FIND DEPOSIT
JRAT 10 GIVES No SATISFACTORY BASIS. FOR. RATE ACTION- HI GHEST .RATIOT. 63, IN
NOVEN,BER1.1921, LOWEST 46, IN. JANUARY' 1923 . PRESENT .57 STOP
.

OF COURSE, IN. PAST .THESE. RATIOS EXCEPT.. FOR HEAVY INCREASE: IN NOTE
RATIOS ARE LARGELY .,FORTUI TOUS. STOP. If

MY. OPI NI ON PROPOSAL TO HAVE

PROFESSOR AND COLLEAGUE'S MANI,PULATE. THEM. Fl RST,, ONE. WAY AND THEN

ANOTHER TO: LEND, SUPPORT .TO. Poll CI ES, I NOI CATED BY, OTHER. FACTORS.

018SEN, UNION

In OF SERVICE SYMBOL

et,

ID

Nig'nt Message

CLASS OF SERVICE SYMBOL

NVESTEM

Tefear r'
Blue

Nite

Day Letter

1 il&Nti fir fir
NEwcomB.CARLTON, PRESIDENT

Blue

Night Message

WESTERN UNION

NL
Night Leiter
If none of these three symbols
appears after the check (number of
words) this is a telegram. Otherwiseits character is indicated by the
symbol appearing after the check.

Telegram
Nite

NL
Night Letter
If none of these three symbols

AM

appears after the check (number of

words) this is a telegram. Otherwiseits character is indicated by the

GEORGE W. E. ATKiNS, FIRST \WIT-PRESIDENT

symbol appearing after the check.

RECEIVED AT 17 E. PIKES PEAK AVE., COLORADO SPRINGS, COLO.

,

-4923 vim

VA6' SHEET

24 AM 7 28

AS DESIRABLE: SI MPLY INVITES CHARGES OF THEIR BEING ARBITRARY AND
DISINGENUOUS TO. SAY NOTHING OF DI FFI CULTY. OF EXPLAINING PLAN AND
OPERATIONS UNDER 1T..TO1PERSONALLY, FEEL T HAT ,. SI TUAT I ON CALLS. FOR

FRANKNESS AND EDUCAT I ON THAT OTHER FACTORS BESIDES THE RATIO ARE

ALWAYS CONSIDERED

ONFERENCE NEXT WEEK WOULD AFFORD OPPORTUNITY

FOR SUCH STATEMENT STOP AS YOUR TELEGRAM. INDICATED YOU FAVORED
PROFESSORS PLAN SHOULD APPRECIATE DAYLETTER TOMORROW SATURDA

A RIE

LAFAYETTE WASHINGTON GI VI NG' YOUR VI EWS SHALL SEE CASE .AND. PROFESSOR

THERE SUNDAY STOP',PROFESSOR AND COLLEAGUES HAVE WAN, WOUSLY ADOPTED

.FOR SUBMISSION TO GOVERNORS AND ADMIRABLE MEMORANDUM REGARDING SECTION
FOURTEEN OPERAT IONS STOP JUST FOUND HARRI SON, PROGRESSING EXCELLENTLY

HOPE YOU ARE ALSO




,

PIERRE.

FEDERAL RESERVE BANK

IN REPLY PLEASE REFER
TO

Dear Governor:

I am greatly obliged for the two long telegrams you have sent me in the
last week in reply to my request for your views.

Our directors in their anxiety

to have something done to educate people away from our high reserve ratio seemed

of
to lean toward the suggestionfollowing commercial practice and indicating the
setting aside of some gold for a reserve against exports.

They finally agreed,

however, to recommend some redraft of my plan, with which Case was also entirely
satisfied, but they felt that they were so anxious for the Board to do something
they were not very much concerned as to just what the form should be.
Miller invited inc to come over to attend the sessions of the Board last

Thursday and Friday, March 22 and 23 respectively, when he was going to present
his two resolutions;

one on open market operations and the other on his method

of restating the reserves.

Things were very quiet i

Case was in Hot Springs for the week I felt that going to Washington was more
important than staying here.

On Thursday the Board discussed the open market matter and finally came
to the conclusion, unanimously, of which I enclose a copy.

The understanding

was that they would submit it to the Governors t Conference this week.

The

remarkable thing about it is that the Board unanimously struck out all reference
to earning and dividend requirements which Miller had in his original memorandum,




Governor Strong

2

March 28, 1923.

7///tlinking that the Board would insist on something on that point.

Apparently they

not
are all willing to think of the question of earnings and dividends.
was not there,is as you know,

one of the strongest on this point.

Mitchell who

He by the way

is out in the northwest talking to the farmers about the desirability of planting
flax instead of wheat.

It is a three weeks trip which is keeping him away from

Washington this week.
Thursday afternoon, as you have read in the papers, Mr. Campbell, the
farmer member, died while playing golf with Senator Townsend at the Columbia. Links.

He had been at the meeting Thursday morning and I gained the same impression of
him that his colleagues had already formed - that he was sound and conservative
and, from the human point of view as well, a most acceptable member of the Board.

Though he only served one week, every one felt that his loss was very great and
leaves us in the same state of uncertainty as regards to his successor in which we
have been At in the last ten months.

Friday morning the Board was to discuss Miller's proposal for restating
the reserves, about which I telegraphed you Friday night.

The Board adjourned

at once out of respect to Mr. Campbell, but several of them stayed and discussed
informally Miller's proposal.
Platt and Crissinger were non-commital.

Wi
I was opposed to it.

Of course, we

came to no conclusions.

Saturday I attended the usual monthly meeting in Philadelphia of the

committee which gets out the monthly summary of business conditions, and went back
that evening to Washington, where I received your day letter answering mine, and
the next morning - Sunday - met Case who had come up from Hot Springs.
just as you and I feel.
feels the same way.




He felt

Harrison, whom I saw in Baltimore on Friday night, also

Case and I worked quite a bit on Sunday over a suggested

RESERVE BANK OF NEW YORK

Governor Strong

3

March 28, 1923.

.10

iletatement for the Board to make at the close of the Conference which would intimate

to the public what other considerations, beside the reserve ratio, were taken into
account in determining credit policy.

-

In the afternoon we went out to call on

Miller and while we were there Hoover stopped in, who fell in at once with Mr. Cases
idea of making a rough guess at the amount of gold that might go out and indicating
it in some way in the statement.

Miller and I both opposed this idea.

I came

back Sunday evening, and on Monday talked with Alexander and Warburg about the
Miller plan, both of whom were opposed. to it.

Well, the net of it all is that I have written Miller a letter about his
plan, copy of which I enclose, and Case and I prepared a suggested statement for the
Board to make at the close of the conference which has been adopted with slight

changes by the conference and is going to be presented to the Board tomorrow.
Xhether they will make it or not, of course, I have no idea.
copy of that.

I am also enclosing a

I submitted it to our directors this morning and they approved it

heartily, as did also Alexander and your friend Sidney Anderson to whom I showed it
confidentially yesterday.

By the way, I showed him your letter to Mr. Young which
I also met with

he was delighted to read and wanted me to send you his best regards.

him at lunch Mr. Howard of the Farm Bureau and another Chicago man who was out at the
farmers conference.

They all sent their best regards to you and wanted me to tell

you what a wonderful hit you made with the farmers and how helpful your presence was.
Anderson said that he would drive over on Sunday and see Harrison.
way, seems in good health and good spirits.
was expected.

Harrison, by the

The bones are knitting slowly, but that

He hopes to leave the hospital in three or four weeks and then to

spend a month in Washington.

His only difficulty is that he has to sleep on his back

and his back is tired out by the process so that he seldom can sleep more than an hour
without his muscles hurting so that he has to sit up and have them massaged.
i suppose Case has written you about Norman wanting to send tro men over
here to spend a couple of weeks




with

us seeing what they can pick up, particularly

RESERVE BANK OF NEW YORK

-1

Governor Strong

61th regard to the relations of central banks
work that is being done in

the

March 28, 1923.

to one another and the statistical

Reserve System.

These two men, Mr. Osborne the

assistant cashier, and Dalton, the statistician, arrived yesterday.

delightful

fellows and we have them in tow and are going to do everything we can

to make their stay pleasant and profitable.
Mr. Trotterts last day in the bank.
place;

They are both

Mr. Osborne tells me that to-day is

He is retiring and Lubbock is taking his

also that Norman is now down at Nice and expects to get back the 22nd of

April.

I could write you lots more, but as you are wanting to simulate the potato I don't want to give you indigestion.

I was extremely sorry to bother you to

send me the two telegrams above referred to, but I felt most keen to get your reactions on the matters under discussion.

Hoping that everything continues to go most favorablywith you, and with
very best regards, I am,

Faithfully

Benj. Strong, Esq.,
Cragmore Sanitorium,
Colorado Springy, Colo.




yours,

do

FEDERAL RESERVE BANK
OF NEW YORK

March 30, 1923.

Dear Governor Strong:

I received your letter yesterday or the day before and am glad to
knol, that

you are getting along all right and have gotten over your cold.

Sailer says they already have in mind the question of always carrying reserves
of currency, bonds, etc., on more than one level in the new vault.
The Senate

as far as I know.

print of the

lay,

1920, conference was not circulated,

It was printed in the Congressional Record and I have seen

refcrences to it in a number of clippings, but I believe no reprint was made
of it.

I will ask Harding seme time next week about the row in the American

Cotton Growers Association, of which you speak.

I had not heard about it.

The governors'conference is over and Case is coming back this afternoon but will not be in the office until Monday.
plan of re-stating reserves he considers is dead.
with both feet.

He tells me that the Miller
The governors landed on it

I enclose copy of the statement made by the Board.

You will

note that they omitted the footnote idea, Miller, I understand, being very much
oi.osed to it.

You will also note in the clipping enclosed that in the second

paragraph of their statement they omitted several important words recommended
by the conference, to the effect that open market rates, gold movements, etc.,
were factors considered in determining credit policy.

This, of cours

the whole point out of the statement and leaves us just where we were before
without any statement which would profoke discussion of this important point.

Case did not feel he could discuss the matter over the telephone, but I gathered
there was no meeting of minds anywhere.

It is most discouraging and leaves us

just where we were, the Board having missed this wonderful chance for a bit of
education with respect to wklch, if the Board does not take the lead, it is



,VE BANK OF NEW YORK

#2

Benj. Strong, Esq.,

......... .

imoet im _ssible for the banks or outsiders to initiate it.

6/3j 23.

Jell, I am

suspending judgment and waiting to hear Case's story on Monday.

The resolutions regarding open market operations were approved by
the conference and were adopted in joint session with the Board, with the

exception that the first two paragraphs of the preamble were cut out, thereby
removing the idea that the Board had the right to limit such purchases.
Things are pretty -uiet here.

about

building

satisfied

I have no doubt Sailer is writing you

matters so I do not touch on them.

I think that all hands feel

that better progress is now being made in the arChitect's office.

Several of the directors have read your letter to Mr. Young and were
much delighted with it.

of
I

have Mr. a copy
it to sent Norman to-day.

Hoping that ev,xything goes well, I am,
Faithfully yours,

Benj. Strong, Esq.,
Cragmore 2anitorium,
Colorado Springs, Colo.




FEDERAL RESERVE BANK
OF NEW YORK
April 7, 1923.

Dear Ben:

This is Saturday morning.
days in

Washington

I have

just come

back from a couple of

and Miss Holmes is here with me cleaning up some wolik.

The first letter she brings me is your letter and memo. of April 2 giving me
the outline of a statement which, curiously enough - and yet not at all

curiously - is almost the identical duplicate of a statement I wrote out on
the train yesterday afternoon

which Case and I are hoping to get Crissinger

to make in the near future.
It happened this way.

The day after the governors' conference ad-

journed Case lunched with Miller and Crissinger.

Crissinger would probably soon

take

Miller suggested that as

office as governor it might be well for

him to come over and make a statement at the New York Chamber of Commerce.

Case suggested that perhaps some other part of the country would be a better
place to make the statement in but they both felt that New York was-the best
place.

Accordingly, Case saw Bush Thursday morning and he readily agreed to

get up a lunch on three or four days' notice at any time Criesinger could come
over after he became governor..

I conveyed this invitation to Crissinger at

lunch that day - the day before yesterday - and he said that he would be very
glad to do so and asked me to write him any suggestions I had about what he
should say.

I had already talked with Wills on the subject and told him our

plan, and said that we felt that we would be justified if Crissinger would mal,e
the right kind of a statement

20g0 to 3000 word's) in having it printed in very

large numbers, perhaps a couple of million, and offering it to our member banks

free for distribution to

their

customers.

I think we could get it done for

somewhere between one and. three quarters of a cent a copy.



Of course, I haven't

FEDERAL RESERVE BANK
OF NEW YORK

any idea whether he will be willing to say what you and I would like to have
him say, and he may want to have Welliver

write it.

There is one compliea,

tion in the situation, and that is Miller, who would like to have him say just
about what we want - at least he thinks he mould - but he may back away from
it when he sees it an paper.

The complication is that Miller has the idea that

included in the speech should be a 300 or 400 word statement in the form of a
minute adopted by the Federal Reserve Board.
difficult thing to embody in a speech.

This I believe would be a very

However, we shall see.

I may have to

go over to Washington again and try to get it arranged, but remembering the
psychology of Miller, an you indicated it to me, I fear difficulties there.

With regard to Miller's plan I wrote you that we all thought it was
dead.

I now have to tell you that it is not dead but very much alive.

what happened.

Osborne of the Bank of

spend last week-end with an uncle.

Here is

:ngland was going down to Virginia to

I told him he should.stop off on his way

back and talk with Miller as the head of the Board's statistical surveys, and
also meet Stewart.

I arranged with Miller that he would see him.

When Osborne

returned to the bank on Tuesday he told me that he had seen Miller and had also

went two hours with the Board on Monday afternoon dieoussing the Bank of England's method of separating note and deposit reserves.
about his plan but did not ask his views.

Miller told Osborne

Platt told inc that on Tuesday and

Wednesdaythe Board had spent its entire sessions discussing the Miller plan, and
that Miller was pressing very hard for a favorable vote.
seemed to be the only one opposed to it.

Platt said that he

I went to Washington Wednesday after-

noon, primarily about the Crisoinger speech matter, but also to see what I could
do to head off action on the Miller plan.




I talked with him and he agreed that

FEDERAL RESERVE BANK
OF NEW YORK

if they decided to do anything about it it would be sent out to all the Federal
Reserve Banks for their views, following past precedent.

Crissinger about it

and he said that nothing would be done about

it

anyhow until

the Board was full, and that every opportunity would be given to the banks to
exprese

their views on it. Of course,

the difficulty is that there is no one on

the Board to combat Miller who knows so much more about the theory of these
things than any one
these lines.

else, and

Criesinger, of lourse, is particularly weak along

But I think the thing is now in shape where if they decide to
Tkait

consider it seriously we giree+d all be given a crack at it, and I

that we

can knock it

am satisfied

out.

Apparently, Dawes is

likely to be

appointed Comptroller early next weak

and to qualify at once, whereupon CriRRiager will become governor.

pressed the desire as soon as he becomes governor
spend three or four days with us,

studying

workings of the money market, etc., etc.

the

to go over

operations of

He has ex-

to New York and
the bank and

the

This will be a splendid opportunity

for us.

Miller told me that Case handled himself extremely well at the conference and made a very favorable impression on the Board which, I am sure, you will

be glad to hear.
I am very distressed that you have had such a beastly time with
antrim and your tooth.
these little side shows.

It

seems as

your

though you had enough to attend to witlout

The one comforting thing you report is that your larynx

was going strong and that you had gotten it in control for the sun treatment.
Keep it up!



FEDERAL RESERVE BANK
OF NEW YORK

-4Don't worry about my not keeping after the statement matter.
haven't done anything else for the last two or three weeks and do not intend
to stop till we get some results from somewhere.

This is just a line that I am writing through Miss Holmes from my
house.

I will have your outline copied and sent to you on Monday.

Faithfully yours,j.

SAL-6-7

7Q

7Z

a
74,

Benj. Strong, Esq.,
Cragcaore Sanitorium,
Colorado prings,




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.4

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FEDERAL RESERVE BANK
OF NEW YORK

1-ACE CORRESPONDENCE

DATE

SUBJECT

FROM

Conference discussed usual routine program of technical matters

-

also

This time gave -articular consideration to credit and discount policies - and
state why (danger of inflation).

Impossible to now state rate action, which originates in several boards of
directors.

Can however express views of conference as to conditions and explain considerations
governing rate making, which are

(Conditions)

Production about maximum.
Railroad transportation about maximum.
Labor fully employed at good wages.
Building at record.
Prices up
per cent.

Bank deposits and loans up
Production up
Etc.

(Rate Policy)

Federal

Reserve System does not and cannot undertake to fix or regulate any
prices or general price level.

Prices are the result of many influences in combination;
war or political uncertainty;
selling mood;

such as good or bad crops;

state of mind of public - i.e. buying or

gold imports and exports;

and the volume of credit, etc.

Reserve System directly influences one factor, to wit - volume of credit, largely
through rate action;
directly.




other factors in price level it does not reach

FEDERAL RESERVE BANK
OF NEW YORK

1

DATE_

CORRESPONDENCE
SUBJECT

-2-

FROM

In fixing rates it takes all these factors into consideration,

and

expects to

fix rates so as to enable all legitimate enterprise to be adequately
supplied with credit.

Its instrument in doing so is eligible paper.

When enterprise is at full speed, as now seems true, further supply of credit will
increase neither production nor consumption, but simply advancesprices

and promotes unsound business exploitation and speculation, causes
labor, and political or social unrest, and great injustice to the
greater number of people.
Where abnormally high prices or price advances seem to benefit people as producers,

it equally harms them as consumers - or the great mass who are chiefly
consumers.

While we growl about high price

of sugar (as consumers) we also protest against

low price of wheat (as producers).
Stable prices is our aim.

So far as credit is one of the influences on prices, we aim to keep volume adequate
but not excessive.

Ordinarilly, with gold naturally distributed and gold payment universal, reserve
percentage would be chief guide to policy and check upon excess supply
of credit.

Present conditions make reserve percentage most deceptive and dangerous guide - and
no check, rather the reverse.

Were we to run System on say 50 per cent, reserve as working basis, bank loans and
deposits generally might expand $




and prices go sky high.

41111111111111F

FEDERAL RESERVE BANK

I' OF NEW YORK
ICE CORRESPONDENCE

DATE

SUBJ EC,

-

FROM

Ordinarily this would cause gold exports and force rates up, prices down, trade
readjustments, etc.

Now gold payment not working we must give larger consideration to other factor
named.

Irrespective of complaints of ignorant and wilful critics, System will be guided
by regard for real welfare of country and not selfish interests of any
particular class;

either producer or consumer;

employer or employe.

To accomplish that aim, our endeavor will be to keep volume of credit adequate and
not excessive.




FEDERAL RESERVE BANK
OF NEW YORK
DATE

tCE CORRESPONDENCE
SUBJECT

To

FROM

Ordinarily this would cause gold exports and force rates up, prices down, trade
readjustments, etc.

Now gold payment not working we must give larger consideration to other factor
named.

Irrespective of complaints of ignorant and wilful critics, System wil7 be guided
by regard for real welfare of country and not selfish interests of any
particular class;

either producer or consumer;

employer or employe.

To accomplish that aim, our endeavor will be to keep volume of credit adequate and
not excessive.




( COPY of TELEGRAM)

April 11, 1923.
Benj. Strong
Cargmora Sanitarium,

Colorado 0prings, 001.

Thanks for telegram which we regret was not
adjournment.

Stop.

No conclusion was reached to-day.

received till aft:r
Stop.

Am on way

to see what can be done to expedite issuance of such educationel matter
as we all ddsire.




stop.

May telegraph you Friday
Pierre Jay

or

3aturday.

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x,

COPY of handwritten letter
The Washington, Washington D.C.
Ap1.12-

Dear Ben
I wish to thunder Id kept a copy of that postscript I scribbled on my
letter of last Saturday! Your telegram of yesterday referred largely to it +
I couldn't remember what Id said. I'm keeping a copy of this, worse luck:
Yr. telegram arrived just after our meeting adjourned
Case + I recommended 5%. The vote was 3 for it (Treman, Smith,Jay) +
Those who were against were influenced mainly by (a) the fact that rediscounting was light and not increasing (b) fear lest action might chill business,
(c) fear lest action without clearer justification might lead to heavy criticism by
business men and farmers.

6 against.

Case + I were influenced by (a) general situation - on verge of
time loans 5- 5 1/4 - 5 1/2%. We
inflation (b) market rates on comm'l paper
also feel that peoples minds in N.Y. are pretty well prepared + even expectant.
The same is true in other large centres also.
It will come up again next week, 18th. As you know, all of May +
June are taken up with Gov't financing so if we don't act next Wednesday - or by
squeezing things uncomfortably close, on 25th we are shut out till about mid-July.

I have talked with both Mellon + Crissinger today + they are both
The
keen for the latter to become governor at once, + both are to see the Presit.
But that isn't any
hitch is that Dawes wont be ready to take office till May 1st.
reason why C. shouldn't leave things to Deputies for a fortnight + become Governor.
If he does, then we expect him to make 4statement (which we hope will be along our
lines) in N.Y. next week. This would prepare the way (in case our Bd shd act + the
This I assume wd accompli* the
FRBd approve), for rate action a few days later.
education you have in mind.
the speech
Now even if we don't get this programme of the governor
put through, do you think there wd be serious reason wny the F.R.B. of N.Y. shd
The plan wd
refrain from 5% based on open mkt. rates, + we in the open mkt. centre?
On this point would you
be that the other F.R.Bks wd hold off till July at least.
please wire your views fully (to N.Y.) It might be possible if the governor + speech
plan fell through, to have brief statement from either N.Y. or Wash. accompany the
announcement of change of rate (if made!), assigning cause to the higher leVel of
open mkt. rates. You may be interested to know that Mellon has had his views rather
shaken by the steel co. Wage increases + I believe would not now oppose action by us,
Mot not positively advocating it.
In wiring about these things, to avoid possible leaks, may we not
adopt the following code words
Miller Almeria
Santander
Mellon
Ronda
Platt
Vigo
Crissinger
Madrid
Mitchell Tarragona
F.R.Bd
McGarrah Corunna
F.R.Bk ofN.Y.Sevilla
Granada
Case
Malaga
Jay
rate increase Cadiz
rate or rates Barcelona
Faithfully yrs [sOgned]p.J.

Monday or on Tuesday A.M.?
http://fraser.stlouisfed.org/convenient may we hear on
P.S. If
Federal Reserve Bank of St. Louis

FERAL RESERVE BANK
OF NEW YoRK

IN REPLY PLEASE REFER
TO

April 20, 1923.

Debi. Governor Strong:

I am ever 90 much obliged for your long telegram in reply to my letter
in regard to the rate situation.

It served very much to clarify my own mind

and made me feel that while a rate increase is justified by present market rates,
I had rather slipped a cog in not giving enough consideration to the preparation

of the public mind for it.

I was in Washington on Wednesday, so was not at

the meeting, but I understood from Mr. Case that no change was made at the
meeting.

Having failed in an effort to accelerate Crissinger's installation as

Governor, there seems to be no opportunity for preparation of the public mind
before our next meeting on the 25th, and I think that consideration of the
matter is now definitely postponed until after the May operations are over.
Therefore, I will not go into any further discussion of it at present.

It now

looks as though Orissinger will become Governor on or about the first of May, when
presumably Dawes is to take office as Comptroller.

Mr. Sailer is writing you today about the bids on the interior stone
and marble work which were put before the Building Committee yesterday and
accepted unanimously, with two or three reservations to be determined in the
near future.

One of these is a question of whether they should mix some sand-

stone with the buff limestone in the first floor interior in order to give a
warmer tone to the room.




We are planning to go up and look at the Bowery

Governor Strong

2

_ RESERVE SANK OF NEW YORK

April 20, 1923.

Savings Bank interior in the near future to see what we think of that.

That

is straight buff limestone.

The second question which arose was in regard to the material for the
floors on the first floor.

You will remember that we had alternative bids be-

tween travertine and gray marble.
as I remember;
material.

Travertine is 07,000 and marble about 05,000,

so there is not much difference in cost.

The Question came on

There was a general feeling against the marble on the ground that

it is too cold in appearance.

At this stage of the discussion Sawyer injected

a new element by suggesting that we should use some rather large - what he calls
heather tiles.

They are a brownish color with rather a tendency towards reddish

about 15 inches square.

We would use these for the entire floor in the public

space of the banking mom, and possibly in the entrance lobby, with a border of
travertine.

We might also have a few intersecting strips of travertine so as

to break the whole floor up into several large panels, perhaps corresponding
with the intersections of the piers.

The understanding was that Yr. SaVer would
conclusions
think more about this suggestion and present hiVet our next meeting of the
committee next gednesday.

Sawyer had some sample of these b

and I must say that they made a very pleasing contrast with the limestone.
cost would be somewhat less than either travertine or marble;
esthetic rather than
really comes

financial

down to a

considerations should govern

in

The

but I think that
this matter.

It

choice between a light floor which, if we decide upon it,

will be travertine, or a dark floor.

Sawyer maintains that a dark floor makes

all the rest of the room look lighter.

This is so entirely a matter of taste,

and you are so much more interested than anyone else in the outcome of this

building, that I think any feeling you have in regard to this suggestion ought
to be given great weight by the committee.
ask

I told the committee that I would

you to express your views if you had any.

Sawyer pointed to the fact that

many Italian palaces had these dark tile floors in their rooms and they looked
extremely well.



_ RESERVE BANK OF NEW YORK

Governor Strong

April 20, 1923.

Another thing he is suggestingiand which we are hoping to see at the
Bowery Savings Bank before long,is to place in the first floor banking room and
in the large officers' room on the tenth floor, instead of the ordinary glass,
a slightly ribbed yellowish glass which is translucent, of course, but not transIn suggesting this he has two purposes:

parent.

(1) to throw a warmer color

of light into the room; (2) to shut cut from one's view, as one stands in the
room, the odds and ends of buildings which one would see if there were clear lights

This would have the effect, like windows in a Cathedral, of

in the windows.

keeping the design of the room as a whole without any interference or interjection
of outside objects into it to distract from the entity of the design.
He is using some windows of this glass in the new Bowery Savings Bank

which will be ready for inspection in a few days, and we are going up to take a
look at it.

Sailer and I are cuite impressed with this idea.

how the others feel about it.

Have you any thoughts?
Yours sincerely,

Mr. Benj. Strong,

c/O CragmoleSanatorium,

Colorado Springs, Colorado.
PJ.NN




I don't know

April 20, 1926.

My dear Governor:

1 encloge

co?y of tt rticle 'ron the Tribune., The

history of t is is thf,t the Tribune report,T rar.r in crd

.

.vt

Morgan, Sallqr add Trowbridge, al"! ,f whom in r,ccordenre 4th

your written injunction :leclinad to
way wriatevor;

hence the artioLo.

eiPCUS. 4,11,7; building in any

of th ft

In

building ie .ipproaching completion, on the outside

don's you f-.11 thPt it is Limo

t.:1

* our

it least,

r,1*x. thole instructione.

is impoe9ib1e to k-ep the peptl,r from

It

"iting ,,nytbing .bout

building, and if me don't ei-to the iomo accurate date to use I
far a-e likely to g.t oroerticle:1 lite +.14 -Prom time to
time.

T strongly recomui:md that we adoot 1 mora corotrucLive

attitude.
!lincerly your

Benj. Strong, Zeq.,

c/o Cragmors Sanitarium,

oicroSprings, 0,01.

:J/RAH

enc.




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COPY of handwritten letter

FUTEEN NASSAU STREET
NEW YORK

evAlk

Apl. 26th.

Dear Ben Snyder has showed me your letter + the article for Lorimer.
I have not
had time more than to glance at the latter, but as to the former I can only say,
patience, + don't shoot just yet.
Thru the combination of Mitchell's resignation
with Dawes unwillingness to take office till May 1, the Pres. was not ready to
anticipate this date in commissioning Crissinger. He is fully expecting, he tells
me, coming over here + making a talk.
I believe it will be before May 15. But I may be
all wrong, at least for the present, then, I feel the F.R.Bks - should wait + give him
the chance to take the lead; and that would apply to your article.
The fact is, we
are now in the closed season regarding rate changes till June 1 anyway - I gave Cris.
your outline of a statement which I see has now blossomed into the article, + I
don't know how much of it he will use. So, please hold off for the present.

As to Mitchell's successor, Scott of Houston was tried but without success.
They are after a southerner. Elting of Florence, Ala., has been suggested.
Case has
not been able to gather from Gilbert exactly what the situation is - a bit mixed, I
expect.

I have batches of your letters to answer, + will do so some of these days.

As to the Cuban agency we discussed it today + feel the correct position
is for us to present some of the various considerations you have suggested, to the
Board, but for us not to oppose the application. We think it would be resented in
many quarters. Case is going down + expects to suggest (1) that it would be advisable
to have a direct invitation from the Cuban gov't before granting application; and (2)
that permit be limited to say 5 yrs. Case will write you more fully tomorrow he
says.
It has become a pet idea of Harding's and I guess he'll have a chance to put
it through.
I haven't seen Foster yet but am writing him to get in touch with him
Saturday.

Durant is probably applying for Nat. charter.
Rounds becomes acting gen'l auditor, Tuesday - glad you agree.

Glad you are feeling




full

of so much pep as yr. letters indicate. Keep it up.
Yrs.[signed] P.J.

MISC. 34.1

40M-12-22

FEDERAL RESERVE BANK

CONFIRMATION OF TELEGRAM

(". NEW YORK

TO BE MAILED

WE HAVE TODAY TELEGRAPHED YOU AS FOLLOWS:

April 30,1923.
hIGHT--LTTER

April 30, 1923.
Benj. Strong
Cragmore 6anitarium

Colorado Si:rings, Col.

I have learned from ittr. Hine and Mr. Warburg t!as learned from a friend
that James of Memphis the new member of Federal Reserv Board is able drygoodo
merchant of considerable means with experience in banking. Sounds like ,1 good
appointment. Dawes tuked office tomorrow and ,;rissinger becomes governor.



Pierre Jay

FEDERAL RESERVE BANK
OF NEW YORK
April 30, 1923.

Dear Governor Strong:

Amplifying somewhat my telegram of today regarding James, Hine
says he is a man of 55-60, a good deal of a spellbinder and rather longwinded;

nevertheless talks pretty well.

He has been a customer of the First

National Bank for many years. He is head of the W. R. Moore Drygoods Co. which
he put on its feet and made profitable.

He also assisted very much in putting

the bank of which he is now vice president on its feet after it had lost a
good deal of money.

He is vice president of the

Central-State National Bank,

and M. Hine thinks that his banking is a side issue with him.

He thinks he

has doubtless learned considerable about banking, though there is doubtless
much more for him to learn.

Hine

says that he knows James' family who come

from the same place in Connecticut Hine

comes from;

namely, New Milford.

Warburg heard someone speak very enthusiastically about him and also heard that
he was worth $2,000,000 or $3,000,000.

Kenzel has heard that the particular

end of the War Industries Board work which James had charge of was not very
satisfactorily done.

Hine says that James is a "Harding democrat."

Case saw Dawes in Washington to-day and was very favorably impressed
with him.

Rameay, the Federal reserve agent at Kansas City has resigned, I
understand to go into a bank at Tulsa.

I. L. McClure, now a class B director

of the Federal Reserve Bank of Kansas City is Federal reserve agent.

He is a

cattle man and had charge, for that section at least, of the cattle loan pool
which you were interested in.




Dr. Forster has spent quite a bit of the day with us, and we have all

Benj. Strong.

ERVE BANK OF NEW YORK

4/30-25.

been delighted to hear from him of your very satisfactory progress and behavior out there, and of his hopes in regard to sending you back in good
form in the autumn.

He

ask;;Us

particularly with regard to the likelihood

of your being needed for a few weeks in June or July, and we all joined
unanimously in telling him that we did not see anything special at the present
time which would make this at all necessary.
had this personal contact with your doctor.
very agreeable a person to be under:




It is most satisfactory to have

Incidentally, I may remark how

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FEDERAL RESERVE BANK
OF NEW YOR K

IN REPLY PLEASE REFER
TO

May 7, 1923.

Dear Governor Strong:

I have your two letters of Monday, April 30 and Thursday, May 3, in the

first of which you repeat your view as to the undesirability of a rate increase
without explanation provided we are not expanding our loans, and in the second of
which you substantially favor a rate increase on the assumption that an ordinary
editorial in the Federal Reserve Bulletin was the statement we have all been
waiting for, which of course it was not at all.

It was merely one of a series

of three or four rather long and involved editorials, written by Stewart and
approved by Miller, dealing with various asnects of the credit situation.
Whether or not the Board will make a real statement is of course impossible to say.

Everything has conspired to delay.

office; Campbell's death; Mitchell's resignation.
to take office next week.

Dawes' delay in taking

We understand that James is

When Cunningham will do so we have not heard.

Naturally, Crissinger, with so great a change in the composition of the Board, does
not feel like raking a statement until the Board is full or practically so, and
until what he says can be agreed upon by his colleagues.

In the meantime,

fortunately, all the talk which arose about rates out of the Governors' Conference,

and all of the manifold cautions which have been uttered in every part of the
country during the past month against overexpansion and inflation have had some
little effect and for the time being there is a slackening in business and in the
rate at which member bank




loans are increasing.

May 7, 1923.

Governor Strong

-RAL RESERVE SANK OF NEW YORK

Case was in Washington last week and came back decidedly discouraged
about the prospects of a Crissinger statement.

He is there again to-day and

has been asking Crissinger to come over and visit us here, as he said he would
immediately after taking office.

If this can be brought about in the near

future we Shall have an opportunity for talking the whole subject over at leisure
which is very difficult in Washington.

Of course, if no statement can be gotten

out of the Board, then we shall have to act without one.

I hope I am not too

optimistic in believing that one can be arranged.
In the meantime, money has eased somewhat and to-day the new 4 3/4 per

cent. notes have been offered and are apparently being very well received.

We

have had subscriptions for our entire quota to-day (the first day).

1:4at-

together with
cent. notes are selling in the market at about 4.65, so that thi4s

the book credit seem3quite attractive.

There is no reason to think that they

won't gat pretty satisfactory distribution, especially in view of the small size
of the issue.

As to the tenth paragraph of your letter of April 30, suggesting that the
Treasury consideration should be dismissed, I do not really think that is practicable
for the next three or four weeks unless some crisis should arise.

As you say, the

financing is done and it would be a great injustice to everyone buying the new
securities to put up the rates.
You will notice that the discounts of the System shot up last week.

We

have been inclined to feel that it was due largely to end of the month movements of
funds.

Our discounts, after taking a sharp rise, are down about $30 millions from

the middle of last week.

I note what you say about the copies of your letters, and am asking Miss
Holmes to go over and send

you carbons of everything you have written, as well

as to put them in your files.




I will ask Mr. Case if he will do the same thing.

-SERVE BANK OF NEW YORK

Governor Strong

May 7, 1923.

We are all of course delighted to hear that you are still doing so well
with your throat.
Sincerely yours,

(gLL1
/t

(LLZZ7

gr
14)

()/(-

Mr. Benj. Strong,
Cragmor Sanatorium,

Colorado Springs, Colo.
PJ.MM




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COPY of handwritten letter

49 EAST SIOY-FOURTH STREET

May loth

Dear Ben -

In the stress of working over the Cuban branch matter I haven't found an
opportunity of sitting down to congratulate you on your boy's engagement. It sounds
very nice indeed + I hope you are pleased + happy about it.
Tiarks lunched with me in 3717 today + we had a good talk till 4.30 with
a few intermissions. He is here to look over the ground for the acquisition of the
Ultramaris[?] Co., a relic of Amsinck[?], + later for the formation of a finance co.
with $5 millions capital to be called J.H.Schrbder + Co., Inc. to finance Amer.
exports + imports + possibly a little accepting. This, of course, quite confidential.
He told me that Ben had returned a week ago which I was surprised to hear. I met
Tiarks at the dock, + also there encountered Masson, over to address the Chamber of
Commerce of U.S. here. He wanted to know about you of course. He's coming to dinner
here Monday. He seems in deep mourning, so I presume his wife must have died.
I am going up to Ithaca tomorrow to speak for Tremanat Cornell, + hate
going when there's so much to do here, but it was arranged long ago.
Now as to rates; I must say I was amazed at your last letter recommending
an immediate increase. I was impressed with your arguments aginst doing so without
preparing the ground - enough so to change my vote in the Board. So were several of
the other directors. I must say that I think the "record" you are anxious to make
regarding rates isn't a very enviable one. All the arguments you made against a
change in April apply with even greater force now as rates, prices, credit volume,
etc., are all, for the time being at least, receding.
I am still strong for some official statement from C. But I wrote you the
factors which delay that. And today comes out the usual Tuesday statement from Mellon
implying that rate changes are not under consideration. The advisory council meets
on the 21st, + it may be possible to get some spurring b cr[?ll from them. or possibly
they might make some statement themselves. Did you know that Mrs. P.M.W. had been
operated on last week + a tumor remov9d. Goodhue told me that they had feared it might
be cancer but that it wasn't. She is going well.

I presume that Sailer is writing you regularly abt. Bd. so I don't say
anS;thing, except that I'm keen about straw-colored glass, 20% of sandstone mixed with
interior limestone, and the heather-bloom tiles for the big banking room floor. We
voted unanimously for all 3 yesterday.
Prosser is getting busy on a successor to Williams. He is suggesting
Woodin, of Am.Car + Fdry. So you know him. Saunders suggested Julius Barnes. If
you have thoughts on either please send them along.
Hoping that everything goes well with you,
P.S. Case saw Harrison a few days ago.
for a month.




Yrs [signed] P.J.
H. plans to go to Washington, Conn. abt. June 1.

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FEDERAL RESERVE BANK

OF NEW YORK

OFFICE CORRESPONDENCE

DATE

May 51

192 3

SUBJECT:

No evidence can be found in the files of the bank or in my own files

that written instructions were given by Mr. Strong to the effect that he should
be the sole spokesman on any natters relating to the new building.

I have a

pretty vivid reoorection, though, which was my authority for telling you that
written instructions existed.

Last September, Mr. Beyer brought in to me a man from the Wall Street
Journal who wanted to know the facts on a statement of Senator Heflin's to the
effect that 60 per cent. of the cost of the new building was paid out of funds
belonging to the Federal Government.

I pointed out to him in Senate Document

No. 75 a quotation from Governor Harding which refuted this statement.

Some

days later, when I was at home writing a piece- Mr. Strong called me on the
telephone and asked me if I had seen a Wall Street Journal men on this subject.

I told him that I had, and he then said that it was a mistake to have done so
inasmuch as there were written instructions making him the sole spokesman for
the bank on the new building.

I was not aware of any such instructions other than the general prohibition against dealing with anyone with respect to the Montauk Building.

I

recall asking Mr. Sailer later if he knew of any such instructions and he also
was unaware of them.

But I supposed that Mr. Strong had reference either to

some memorandum which I had not seen or to his comments, both written and oral,
on specific inquiries for information about the building.

Since my conversation with Mr. Strong on the telephone I have thought
that any discussion of the new building was restricted to him, or if written,
should be approved by him prior to making it publiC.




I have acted accordingly

FEDERAL RESERVE BANK

OF NEW YORK

OFFICE CORRESPONDENCE
To
FROM

Mr. Jay

DATE

May 31

192 3

SUBJECT:

-

2 -

Shepard _Morgan

and have assumed that even matter which had previously appeared in print was not,
as they say, privileged.
I suggest that if a little latitude can be given, such articles as that
which appeared a few weeks ago in the Tribune can be avoided.

AR-0-4B-4-40.11440--1"

SM/EK




c;

FEDERAL RESERVE BANK
OF NEW YORK
May 31, 1925.

Dear Governor Strong:

I have quite a few letters from you to answer, especially those of
May 11 and May 15, together with occasional notes here and there in addition.

As it is a little late I may not get to the question of rates, on which I
want to write you at some length and will try to do so to-morrow.

moment this

At the

isn't very urgent, and there are a number of minor matters which

I should like to *rite you about.
1.

The suggestion of the Board that some of the Auditor's work
This was a letter from

could be combined with the Comptroller of Accounts:

Hoxton which I am told he sent at the suggestion of Herson.
with the idea.

None of us agree

Rounds thinks, however, that possibly the Auditor's staff

might be somewhat reduced.

He is not ready to make any recommendations until

he has studied the situation for two or three months.
I enclose report of a speech by Mr. Cunningham which will interest you in case you haven't seen it.

I enclose clipping of Mr. Crissinger's first utterance which
I think will probably impress you as it impressed Case and me.

I am asking

him for a copy of it so that I may see what he really did say.
As to the question of his much-talked-of speech in New York:

I went over there about ten days ago with the purpose of trying to bring him
to a definite decision in regard to making a speech before the Chamber of
Commerce here of the kind we have been hoping for.
talked for a couple of hours.

We lunched together and

He told me that he had been declining all

speeches, desiring to make his first speech in New York;




that he had written

FEDERAL RESERVE BANK OF NEW YORK

-12.

Governor Strong

5/31/23.

out a draft of it but that it was much too long, and he hoped to send me over
a revised draft early last week.

He said he saw no reason why he should not

come over in the near future and make a speech.

I suggested some topics to

him, and when I left I felt the date was all but booked.

On coming back we

found that June 7 was the next monthly meeting of the Chamber of Commerce, and
the secretary wrote over suggesting this date to Mr. L;rissinger to which, after

two or three days he received a reply saying that inasmuch as the time had passed
for saying what he wanted to say six weeks ago he did not think there was much
chance of his getting over in the near future.

Aboyt the same time Mr. Case

went over to Washington with the open market committee of governors, and Mr.
Crissinger told him that he did not think he cared to make any speech over here.
My impression is that Miller has killed the idea.

The foregoing leaves me extremely discourged as to how to open up the
educational programme that you wrote about some weeks ago, and which I have
worked fairly hard to get Crissinger to start.
to make next.

I do not know just what move

Perhaps by Monday I shall have some thought upon it.

you may have some thought to send me.

It seems to me that this is the very

time in wbieh some good educational work could be done and when it would not be
considered as having any direct application to immediate conditions such as an

educational speech might be considered to have if it were put out at a time when
credit and business were boiling.

But it is hard to persuade a man who has his

eye on the election of 1924 to make any move.

His remarks in the clipping about

the pale pink radicals, by which I presume he may mean the farm bloc, seem to be
just exactly the wrong way to go at it.
5.

The piece which you sent Snyder or me in regard to prices and credit

will be a mighty good piece when you have dressed it up, as one of your recent
letters indicate you have done.




As I have failed in getting Crissinger to take

FEDERAL RESERVE BANK OF NEW YORK

#3

Governor Strong

5/31/23.

the start in our educational campaign, I admit the justice of your chafing
at my plea for patience and withdraw any further suggestion that you should
not publish it wherever they wil1 take it.
Tiarks has been here for about three weeks and made good headway on his plans about which young Ben has probably by this time told you.
I met him at the steamer and he came to lunch with me the next day.
long talk.

We had a

Also he had a long talk with Kenzel and gave him a lot of finan-

cial background here which he wanted to absorb, and suggested his consulting
White and Case, which he has done and whom he told Case and me the day before
yesterday he liked very much indeed.
sails to say good-bye.

He is coming in to-morrow before he

There real]y hasn't been much we could do for him,

although we offered to do anything in our power.
M. Masson was here for about a week with one of his associates.
I had them to dinner and had a nice talk with Masson.

Be said he was going to

write you a letter.

The last time I was in Washington I went over to see Harrison
and spent an evening with him.

He was going out to motor the next day, his

first exit from the hospital since his operation.

I heard afterwards that his

drive had gone well, and the day before yesterday Bowers told me that Harrison
had gone off for a picnic recently with some friends.

His neck pains seemed

much better following the removal of the adenoids, and altogether he was in a
cheerful and encouraged frame of mind, expecting to leave the hospital early
in June and to get back to work early in July.

He says that the doctor con-

siders the operation to have been an excellent job.

His knee is not completely

rigid yet, and it may be perhaps two or three months before this occurs, but in
the meantime the doctor thinks he can get a out on crutches with his knee in
some sort of a brace to keep it from getting knocked.



#4

Governor Strong

5/31/23.

FEDERAL RESERVE BANK OF NEW YORK

I had quite a talk with both James and Dawes, the new members of
the Board, and like them both.

I understand, however, that Dawes does not

come to meetings very often.
Governor Crissinger told me that you had some method to get the
small state bankers in, and asked me if I knew what it was.

7

that I didn't.
,.

I had to confess

His only idea was to pass a law preventing checks on non-

member banks from passing through the Federal Reserve System, which, of course,

I opposed as we have always done since it was suggested early in the days of
the system.

I am not mentioning Cuba because Case is keeping you fully advised
on that, and we are naturally working together on it.
As to the new director to take Mr. Williams's place.

In view of

the fact that a new committee will be appointed by the New York State Bankers
Association on June 12 we have finally decided that the best thing to do is
to wait until then, but to get the committee into action at once.

I will keep

in mind your suggestions.

I am enclosing Morgan's memorandum in regard to the instructions
about giving out information about the building.

I do not find that it makes

out a very strong case for "written instructions," but that was the way it was
presented to me at the time I wrote you after the Tribune article.

I do not

SLA-c-1

think tiig will occur again and he and Sailer and I now have an understanding
about it.

With best regards,
Faithfully yours,

Benj. Strong, Esq.,
Cragmore. Sanitarium,
Colorado Springs, Col.



FEDERAL RESERVE BANK
OF NEW YORK
June 5, 1923.

Dear Governor Strong:

This is a very late answer to your letter of May 15 in reply to a

letter of mine expressing surprise at yours of May 3 in which you advocate
submitting a rate increase.

In the letter of May 15 you suggest that if I

would look over the correspondence my amazement would be dispelled.

We have

been pretty busy on the Cuban and other situations in the meantime and a little
hiatus has just occurred which permits me to look over the record a bit.

It

seems to be as follows:
April 11:

Your telegram was received just after our board meeting

in which you said,




"We should do nothing until statement has been made and widely
circulated.
Then our action has chance to be understood.
Cannot believe our people would deliberately adopt the more
hazardous po3icy indicated your letter."
April 15:

After receiving my letter of the 12,

"Believe you are more influenced by price movement than by
facts of our own position, which is only one of many influences affecting prices, and that your proposal comes too
soon.
In any event what you and Case recommend is not now
justified by total system 13 and 14 assets combined which
have remained substantially unaltered for over a year, and
a disparity in rates alone does not justify what you propose
until evidence is convincing that the disparity is causing
abuses. Do not overlook that rate disparity of itself does
no harm unless advantage is taken of it."
April 26;

You wrote to A. C. Miller,

"A rate increase before borrowing pressure developes is simply
a move to force contraction, of which there is no need."
April 25:

You wrote,

"Frankly I think a change of rate now with no preparation and
no affirmative action from conference and no increase to
speak of in our loans to members would be little short of
folly.
Sorry to feel so strongly."

RESERVE BANK OF NEW YORK

April 30:

#2

Benj. Strong, Esq.,

5/5/23.

You wrote, paragraph 5,

"If we are not expanding our loans - another rate increase
without explanation would be a threat and hard to justify.
All the comments on our position I read in the outpouring
of literature I get here show that it would be instantly
misunderstood and cause greater or less uneasiness if not
alarm."
Paragraph 7 -

"Failing earlier action along this line (a period of real
education) then I say we should, submit a 5 per cent, rate
as the next best and only way left in which to make our
record clear."
May 3:

You wrote,

"I am getting convinced that the only thing for us to do now
is to submit a rate increase."

My feeling when I wrote you expressing surprise was that there had
been no important change in conditions since April 11, when you first expressed
yourself so strongly against a rate increase, and May 3, when you recommended
an increase as to justify our doing what even a week or ten days before in the
interim correspondence you had considered as foolish, reckless and hazardous.
In the interim conditions became easier rather than harder.
I was so much impressed with your earlier arguments against action
that, as I told you, I reversed my position.

I am inclined to believe that if

I had voted in favor of an increase on April 25, the last time an increase was

possible before the May financing, we should have had a 5 to 3 vote in favor of
a. rate increase instead of a 5 to 3 vote the other way.

At least Treman and

Case told me they thought I had assumed a pretty heavy responsibility at the
meeting.

During the three weeks from April 11 to May 3 credit was getting

easier instead of tighter, and prices were inclining to turn downwards.

In view

of the accentuation of these tendencies during the past thirty days I think it
is now a very good thing for our record that we did not recommend a rate increase.



Benj. Strong, Esq.,

,ERVE BANK OF NEW YORK

6/5/23.

As to My views on rates which you ask me for in yours of May 11, I

have not any programme for immediate adoption since with credit easing, prices
falling and a general hesitation in business, your arguments prior to May 3
apply with even greater force at present.
have any present rate policy.

Therefore, I do not see how one can

The only thing I think we can do at the present

time is to try to lay the ground of understanding which will make possible a
rate increase later on should one be needed.
I wrote you last week that after having my hopes of Crissinger renewed
I have now about given up hopes in that direction.

The best thought I have on

the subject now is to have same1212y short statements made about some of these

economic relationships and put out by the A. B. A. authorities over their name.
Morgan and I had a long talk with Puelicher after the May meeting of the A. B. A.

executive committee on the general subject of economic education, in which as
you know he is tremendously interested.

It appears that the A. B. A. has for

some months been spending a considerable amount of money in putting out sound
economic doctrine in various newspapers of the country, including many country
papers in agricultural sections.

As I understand it this is not in any way

paid kdvertising but simply such articles or statements as any similar organization would issue.

I think we could offer them some material which, if they

approve of it, they might like to use.

I am thinking of calling a meeting of

our committee on public relations in. the near future in view of the failure of

my negotiations with Crissinger, to discuss the situation.
We discussed at the officers' meeting this morning the possibility of
a slight increase in our bill rate as a means of bringing about a reduction of
the bill portfolio and of reducing the spread between our bill rate and our
than at present.
discount rate which would make the latter even more out of line




-

RESERVE BANK OF NEW YORK

4

Benj. Strong, Esq.,

6/5/23.

As there seemed to be disadvantages as well as advantages in this course we
decided to postpone final consideration of it for a few days.

In this con-

nection I recollect that you suggested some time ago the desirability of reducing the bill portfolio and "be bold about it."

If you have any thoughts

on the subject of being bold at the present time let me know.
I have no doubt Case advised you of the decision of his committee
to sell $50,000,000 Governments if the various banks can be persuaded to let
them go at the present time.

There is also a round amount of December certdf-

icates in the system which he thinks Gilbert is likely to retire on June 15,

so that it is probable that during June the Government holdings will decline
in the neighborhood of $60,000,000 to $80,000,000, which seems a fairly round
sum for a month.
Sincerely yours,

7177(.-0-1-3A--t

Benj. Strong, Esq.,

Cragmon Sanatorium,
Colorado Springs, Col.




(The above was dictated and corrected by
left the office before signing.)
g.

Mr. Jay,

but he

FIFTEEN NASSAU STREET
N E W YO R K

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C OPY of handwritten letter
June

FIFTEEN NASSAU STREET
NEW YORK

19-

Dear Ben,

Just a line at twilight to acknowledge your last two letters + to
There is to be a conference of the Open Mkt. Inv. Corn.
enclose the par decisions.
in Wash. Monday (June 25) to discuss this, inter alia. I am going to Atl.City
tomorrow to talk it all over with Harrison, who may possibly to to Wash. for the
There are many
conference. He is getting on famously, as he has written you.
things popping here in F.R.circles. You will have gathered much from Case's
the gov. isn't showing much common
letters. The fact is the Bd is all at sea, and
the pilot of thship is more and more
sense,particularly in human relations and
A.C.M. who of the three elder statesmen is naturally the one to whom D.R.C. turns
as he is the most vocal, positive + plausible. The development of the Open Mkt
admittedly so,)
Corn. into an Ex. Corn. with monthly meetings (in fact, monthly but not
out.(But in the interim the emissions + eruptions
is of course the way out, - or one way
are sulphurous, all right.
Glad to have your suggestions on collections + services. I hope to plan
including the
out with Harrison Thursday some comprehensive programme for check coiling
congressional committee hearings in the autumn.
Don't get discouraged about it all, way out there'. We feel a bit down
01 evenings, at times, but wake up in the A.M. pretty strong again.
Eidlitz is getting ready to quit fighting the bricklayers + sign up for
This of course
+ Hylan) are too great.
2 yrs at $12. It's a crime, but the odds
is graveyard.
(

Durant is in the system. Bought control of (new) Liberty Nat. Bk, which
Dt a charter a few months ago. Is now applying for Trust powers'.'.: Has he lost his
The Federation Bank is knocking for
nerve? Well he wont get 'em, yet a while.
admission + I guess they are O.K.
The 22d convention of supervisors of State Bks in Denver July 17-19
rather tempts me to make a combination week there + in Colo. Spr. I don't much
want to be away but the temptation to see you (if you like to be seen in silence)
might
+ the thought that as a former state supervippr, + pres. of the association, I
do some good with those men vis+a+vis the F. .S., have set my imagination going.
It was fine to see Ben + hear good news of you + see pictures, yesterday.
Keep up the good work.
Very hastily




[signed] P.J.

Form 1222

' DO

WESTE

r LASSES OF

TIC SERVICE

Telegram
Night Message

TELEGRAMS

Day Letter

Night Letter

UNION

CLASSES OF

CABLE SERVICE

Full Rate

CABLEGRAMS

BY TELEPHONE FROM THE WESTERN UNION MAIN OFFICE

Charges (if any) $

NEWCOMB CARLTON, PRESIDENT

GEORGE W. E. ATKINS, FIRST VICE-PRESIDENT

Half Rate Deferred
Cable Letter
Week End Letter
Charges (if any) $

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To




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Dated

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CLASSES OF DOMESTIC SERVICE
Telegrams
The regular fast service for all purp.oses. , Code language permitted. Minimum of 10 words charged for.

Night Messages
Over-night service for 6ort messages at reduced

rates. Accepted up to r A.M. Due for de--..rery the
following morning. Code' luarentro, permitted. Mini-

mum of 10 words charged for.

Night Letters

Day Letters
For longer communications not requiring the faster
service. Subordinated to Telegrams on hand. Must
be in plain English. Code language not permitted.
Fifty words for the price of an 18-word Telegram.

Over-night service for longer communications. Accepted up to 2 A.M. Due for delivery the following
morning. Must be in plain English. Code language
not permitted. Fifty words for the price of a 10-word
Telegram.

CLASSES OF CABLE SERVICE
Full-Rate Cablegrams
A fast cable service to all parts of the world at

Cable Letters
Over-night cable service to certain countries at

regular rates. Code language permitted.

greatly reduced rates. Due for delivery the following
noon. Code language not permitted. Minimum of 13
words (including necessary prefix) charged for.

Half-Rate Deferred Cablegrams
Subordinated to Full-Rate Cablegrams on hand.
Must be in plain language of country of origin or
destination or in French. Code language not per-

Week-End Letters

mitted.




The cheapest cable service of all. Accepted at any
time.
Due for delivery Monday morning. Code
language not permitted. Minimum of 25 words
(including necessary prefix) charged for.




Form 1222

WESTE

NION

WESTERN UNION

C A BLEGRAIMS

cP,
Night Letter
A

Charges (if any) $

LEEN-IONE FROM THE WESTERN UNION MAIN OFFICE

NEWCOMB CARLTON, PRESIDENT

GEORGE W. E. ATKINS, FIRST VICE-PRESIDENT

Dated

CLASSES OF

CABLE SERVICE

Full Rate
Half Rate Deferred
Cable Letter
Week End Letter
Charges (if any) $

191

To

1

CLASSES OF DOMESTIC SERVICE
The regular fast service for all purposes. Code language permitted. Minimum of 10 words charged for.

Night Messages
Over-night service for s,
rates. Accepted up to 2

Day Letters

Night Letters

For longer communications not requiring the faster
service. Subordinated to Telegrams on hand. Must
be in plain English. Code language not permitted.
Fifty words for the price of an 18-word Telegram.

Over-night service for longer communications. Accepted. up to 2 A.M. Due for delivery the following
morning. Must be in plain English. Code language
not permitted. Fifty words for the price of a 10-word
Telegram.

Telegrams

Li very the
following morning. Code languase permitted. Minimum of 10 words charged for.

CLASSES OF CABLE SERVICE
Full-Rate Cablegrams
A fast cable service to all parts of the world at

Cable Letters
Over-night cable service to certain countries at

regular rates.

greatly reduced rates. Due for delivery the following
noon. Code language not permitted. Minimum of 13
words (including necessary prefix) charged for.

Code language permitted.

Half-Rate Deferred Cablegrams
Subordinated to Full-Rate Cablegrams on hand.
Must be in plain language of country of origin or
destination or in French. Code language not permitted.




Week-End Letters
The cheapest cable service of all. Accepted at any
time.
Due for delivery Monday morning. Code
language not permitted. Minimum of 25 words
(including necessary prefix) charged for.

Form 1206 A
CLASS OF SERVICE DESIRED

Telegram

stter

WESTE

UNION

WESTON-UNION

.issage

TEL

04.. Letter

Patrons should mark an X mumsite the class of service desired:

OTHERWISE THE MESSAGE
WILL BE TRANSMITTED AS A
FULL-RATE TELEGRAM

1:4

NEWCOMB CARLTON, PRESIDENT

Send the following message, subject to the terms
on back hereof, which are hereby agreed to

Check

EA,

AM

Time Filed

GEORGE W. E. ATKINS, FIRST VICE-PRESIDENT

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ALL MESSAGES TAKEN BY THIS COMPANY ARE SUBJECT TO THE FOLLOWING TERMS:
To guard against mistakes or delays, the sender of a message should order it repeated, that is, telegraphed back to the originating office for comparison
aalf the unrepeated message rate is charged in addition. Unless otherwise indicated on its face, this is an unrepeated message and paid for as such, in consider,
hereof it
is agreed between the sender of the message and this company as follows:
The company shall not be liable for mistakes or delays in the transmission or delivery, or for non-delivery, of any message received for transmission at the unrepeatedmessage rate beyond the sum of five hundred dollars; nor for mistakes or delays in the transmission or delivery, or for non-delivery, of any message received f or transmission at
the repeated-message rate beyond the sum of five thousand dollars, unless specially valued; nor in any case for delays arising from unavoidable interruption in the working of its
lines; nor for errors in cipher or obscure messages.
In any event the company shall not be liable for damages for mistakes or delays in the transmission or delivery, or for the non-delivery, of any message, whether
caused by the negligence of its servants or otherwise, beyond the sum of five thousand dollars at which amount each message is deemed to be valued, unless a greater value is
stated in writing by the sender thereof at the time the message is tendered for transmission, and unless the repeated-message rate is paid or agreed to be paid, and an additional
charge equal to one-tenth of one per cent of the amount by which such valuation shall exceed five thousand dollars.
The company is hereby made the agent of the sender, without liability, to forward this message over the lines of any other company when necessary to reach its destination.
Messages will be delivered free within one-half mile of the company's office in towns of 5.000 population or less, and within one mile of such office in other cities or
towns. Beyond these limits the company does not undertake to make delivery, but will, without liability, at the sender's request, as his agent and at his expense, endeavor to
contract f or him for such delivery at a reasonable price.
No responsibility attaches to this company concerning messages until the same are accepted at one of its transmitting offices; and if a message is sent to such office
by one of the company's messengers, he acts for that purpose as the agent of the sender.
The company will not be liable for damages or statutory penalties in any case where the claim is not presented in writing within sixty days after the message is filed
with the Company for transmission.
It is agreed that in any action by the Company to recover the tolls for any message or messages the prompt and correct transmission and delivery thereof shall be presumed, subject to rebuttal by competent evidence.
Special terms governing the transmission of messages under the classes of messages enumerated below shall apply to messages in each of such respective classes in adEdon to all the foregoing terms.
No employee of the company is authorized to vary the foregoing.

THE WESTERN UNION TELEGRAPH COMPANY
INCORPORATED

NEVVCOMB CARLTON, PRESIDENT

CLASSES OF SERVICE
TELEGRAMS

A full-rate expedited service.
NIGHT MESSAGES

Accepted up to 2.00 A.M. at reduced rates to be sent during the night
and delivered not earlier than the morning of the ensuing business day.

Letter shall be delivered on the day of its date absolutely and at all
events; but that the Company's obligation in this respect is subject
to the condition that there shall remain sufficient time for the transmission and delivery of such Day Letter on the day of its date during
regular office hours, subject to the priority of the transmission of regular telegrams under the conditions named above.
No employee of the Company is authorized to vary the foregoing.

Night Messages may at the option of the Telegraph Company be
mailed at destination to the addressees, and the Company shall be
deemed to have discharged its obligation in such cases with respect to

NIGHT LETTERS

DAY LETTERS

Accepted up to 2.00 A.M. for delivery on the morning of the ensuing
business day, at rates still lower than standard night message rates, as

delivery by mailing such Night Messages at destination, postage prepaid.

A deferred day service at rates lower than the standard telegram rates as follows: One and one-half times the standard Night
Letter rate for the transmission of 50 words or less and one-fifth of
the initial rates for each additional 10 words or less.

follows: The standard telegram rate for 10 words shall be charged for the
transmission of 50 words or less, and one-fifth of such standard telegram
rate-for 10 words shall be charged for each additional 10 words or less.

SPECIAL TERMS APPLYING TO DAY LETTERS:

SPECIAL TERMS APPLYING TO NIGHT LETTERS:

In further consideration of the reduced rate for this special Day
Letter service, the following special terms in addition to those enumerated above are hereby agreed to:

In further consideration of the reduced rate for this special Night
Letter service, the following special terms in addition to those enumerated above are hereby agreed to:
A. Night Letters may at the option of the Telegraph Company
be mailed at destination to the addressees, and the Company shall

Day Letters may be forwarded by the Telegraph Company as a
deferred service and the transmission and delivery of such Day Letters

is, in all respects, subordinate to the priority of transmission and

delivery of regular telegrams.
Day Letters shall be written in' plain English., Code language
is not permissible.
c. This Day Letter is received subject to the express understanding and agreement that the Company does not undertake that a Day



be deemed to have discharged its obligation in such cases with respect

to delivery by mailing such Night Letters at destination, postage
prepaid.
Et.
Night Letters shall be written in plain English.
is not permissible.

Code language

No employee of the Company is authorized to vary the foregoing.

1

FEDERAL RESERVE BANK
OF NEW YORK
June 30, 1923.

Dear Governor Strong:

I said that I would write you in a couple of days about the Cuban matter
but unfortunately Mr. Case and I have been playing box and cox with one another
and, as he has had this in charge, I do not know just what he has heard about it.
He was in Washington on Monday and Tuesday with the Advisory Committee
They
of Governors to which were added pro tern Messrs. Seay, Wills and Martin.
discussed the par clearance situation all day and reached the unanimous conclusion
Mr. Case telephoned me Tuesday morning in
embodied in the enclosed clipping.
I suggested quite a different course which Mr.
regard to the recommendation.
Harrison and I had discussed at Atlantic City last week, namely that we should
make no move at the present ourselves; particularly not an offensive move, as
I conceived the committee's proposal to be, and let the situation develop -If any fighting was to be done as a result of the Supreme Court decision let the
He said, however, that the
non-par banks take the offensive rather than we.
committee was unanimous in its recommendation and that the Board apparently was
delighted with it.
Mr. Harrison happened to be passing through New York on Wednesday and,
together with Mason who felt as I did on the subject, I spent an hour with him.
We all felt that this was a new form of coercion and was a great tactical mistake.
Mr. Case was not in the office on liednesday but I talked the matter
over with him Thursday and though he disagreed with our point of view he said
that the committee had made its recommendation subject to the approval of Mr.
I said that while I hated extremely to disagree with him I felt so
Davis.
strongly on the matter that I should not feel comfortable unless I expressed my
views to the Federal Reserve Board, although I realized that there was very
litt]e likelihood of their making any change after such a strong recommendation
Nevertheless, on permission
from an important group of Rederve bank officers.
from Governor Crissinger I went over yesterday and spent an hour and a half with
the Board, during which it became quite evident that several of them, particularly
the newer members, did not understand much about check collections. Mr. James,
however, while not having technical knowledge on the subject has a banking
background and easily grasps a situation if it is clearly put to him.
The
Board disclaimed any desire to exercise any pressure or coercion but I had learned
from Mr. Case that it was the opinion of the Governors Committee that this would
be effective in bringing all of the non-par banks into the collection system
I gave some little thought to this aspect of it on
before Congress assembled.
the train going over and satisfied myself that the proposed measure would not
exercise anything like the pressure unpon these banks which the committee anticipated,
since I believe that about 50% of their checks could be collected easily without.
their passing through the System. Furthermore, the charge takes no account of the
profit they get from deposits by remitting only once a week or once a fortnight;
nor does it take into consideration the element of human nature and of the resisting
qualities of these small bankers.

credit men and the clearing houses



My thought was that if we could get the
and others to take up the whole par situation

-SERVE BANK OF NEW YORK

2

Governer Strong

6.30.23.

01
.
A-actively in view of the Supreme Court decision it would be very much better
than for the Federal Reserve Banks to take a new offensive immediately following
the Supreme Court decisions.
The Board disclaimed any desire to attempt to
bring these non-remitting banks to a par remittance basis, end when I pressed
them for their own reason for this action, aside from the fact that the Governors
had recommended it, it seemed to come down to a desire to do something to
clarify the situation as a result of the Supreme Court decision.
Ar'

I won't go into a lengthy argument on the subject.
While the Board
were very polite and we had, I think, an interesting discussion and I am sure
one that from an educational point of view was not time lost, nevertheless, as
Mr. James announced at the outset, the matter was entirely settled and I should
bear that in mind.
Immediately following the discussion the Board voted to
go ahead with their recommendation, making but one change which you will see in
the last line, where it provides that the collection charge is not to be in
excess of 1/10 of 1% whereas the Governors recommended that the collection
charge be based on the rate of exchange charged by the indorsing bank.
At
least we got rid of that admission that we were basing our fee on somebody's
else collection charge.
I may say that Mr. Davis, both orally and by letter, advised the Board
not to take this action at this time, but that seemed to have no weight with them
whatever.
I had a chat afterwards with Mr. Cunningham who seems like a very
sensible man. He was one of the group of twenty-one farmers in Chicago with
whom you talked and he has a most friendly recollection of your actions there.

The Board has appointed a number of committees and has really gotten
itself into a very good working order. The committee on the New York bank is
composed of Messrs. Platt and Miller.
The Governor is a member ex-officio of
all committees.
I am leaving now and am asking Miss Bleecker, who is taking this down,
if she will please sign it and send it for me.
I am also sending a copy to
Mr. Harrison, who is down at Jamestown with his sister for a couple of months.
Hoping that all continues to go well with you, I am,
Faithfully yours,

Benj. Strong, Esq.,
Cragmor Sanitorium,
Colorado Springs,
Coloradc.

Enc.




July 12, 1925.

Dear Governor Strong:
When I sugeested in a letter to you a fortnight or

might possibly come out to the Supervisors
:1iy

mini that we sere going to be so

meeting in Denver,

shorthanded this

I reflected on it I saw, of course, that with

80 ago that I
it slipped

eummer, and the moment

you, warrieon and Sailer away

the rest of us should not be eway unnecessarily. I do not need to tell you

that it would have teen a great pleasure to Sea you.
Mr. Eillietin is going out to attend this meeting ss he did last

year, and should you or any reason wish to see
Brown Palace Hotalfterom Tuesday to Thursday,

him you can reach him

at the

July 17 to 19, and he will

te

kla d to go down to sec you, but he will not call unless you send for him.
Your last letter

telling us

that you had gotten off the reservation

far enough to se- e priee right was the best news you sent us yet.
I fear there is practically no news to send you outside of the
routine which Trowtridge,and others are sendiL, you.
Very truly yours,

Benj. Ctrong, Esq.,
Cragmor San!Aorium,

Colorado Springs, Col.

S. :A the building meting last Tuesdey we zer. diecuseing your
some builtin book cases in your room. lir. Sawyer feels that
book cases set beck into the eall when the well is plaster would look quite
b.dly, but that this could be cured if the room were eanelled throughout. I
told him that we both felt strongly againet having our rooms panelled. He then
suggested that the book cases be not sot into the -v-al but be a builtin structure just like a piece of furniture except for the fact hat they would run
.

6U, geetion of




#2

Ee

-vA Esq.,
strong,

7/12/23.

dlft
across one end or side cif thq,A4om and not be movable. This sounds to me a
evitisfactory solution, butl told Mr. Sawyer to go no further in the matter
until I learned your views on his sug6estion.




MISC. 34.1

40M-12-22

FEDERAL RESERVE BANK

CONFIRMATION OF TELEGRAM

NEW YORK

TO BE MAILED

WE HAVE TODAY TELEGRAPHED YOU AS FOLLOWS:

August 2, .1g23.

Eenj. Strong, Esq.,
Cragmor-Oanatorium,

Colorado Springs, Col.
The 130ard yesterday decided to refer both propose-:: collection amen:Jaen ta to




Adv sory Council at Soptembr meting.

Pierre Jay

MISC. ..

,

FEDERAL RE§ERVE BANK

CONFIRMATION OF TELEGRAM

,- NEW YORK

TO BE MAILED

WE HAVE TODAY TELEGRAPHED YOU AS FOLLOWS:

DAY

LETT':: R

Au.Net 2, 1928.

Benj. Strong, Esq.,

Cragmor Sanatorium,

Colorado %.,rings, Col.

As Denv.::r papers may reort Claiborne's oroponed collection Jan you
should know th t alvisory committee of governors me WaAlington yesterday
and recomfoended unanimously first disa?proval of Claiborne's olan, second
indefinite postponemcnt of ,1-an Board promulgated last month concerning
which ,se corrAD,Donded. Stop. hiL, rite tomorrow. No advice yet
concerning Board's action.



Jay

Form 1206 A
CLASS OF SERVICE DESIRED
Telegram

'

'

f ter

WESTE

UNIO

Receiver's No.

WESTERKUMON

.... ,ilessage

Night Letter
Patrons should mark an X oppo.
site the class of service desired:
OTHERWISE THE MESSAGE
WILL BE TRANSMITTED AS A
FULL-RATE TELEGRAM

TEL
NEWCOMB CARLTON, PRESIDENT

All
'74

Check

AM

Time Filed

GEORGE W. E. ATKINS, FIRST VICE-PRESIDENT

Send the following message, subject to the terms
on back hereof, which are hereby agreed to

)3

3

Li
I

4

e*.LA.17,t

ri/L2

t pi(IL

AAA.,
,




--) L

(aft

1

A-0

L

ALL MESSAGES TAKEN BY THIS COMPANY ARE SUBJECT TO THE FOLLOWING TERMS:
To guard against mistakes or delays, the sender of a message should order it repeated, that is, telegraphed back to the originating office for comparison,
his, oneaalf the unrepeated message rate is charged in addition. Unless otherwise indicated on its face, this is an unrepeated message and paid for as such, in considera..
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THE WESTERN UNION TELEGRAPH COMPANY
INCORPORATED

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Code language

No employee of the Company is authorized to vary the foregoing,

FEDERAL RESERVE BANK
OF NEW YORK
August 9, 1923.

PERSONAL

Dear Governor Strong:

This is to confirm the following telegram which I sent you day before yesterday:

"Replying your telegram 5th regarding Claiborne's
I will write you further
plan Case wrote you fully yesterday
to-morrow
In the meantime have not transmitted your views to
Crissinger for reasons to be explained in to-morrow's letter
Crissinger and several
Board does not meet again
14th
others absent."

until

I was away

on Monday when your long telegram about par matters arrived.

ir. Case

and I _ent over it on Tuesday and he showed me a copy of the letter which he had
written.

Case and I are in entire agreement as to the desirability of showing every

consideration to Claiborne and his committee, and we believe that they received every
such consideration at the hands of both the Board and the Governors Committee.

Case and I are also Agreed that it would be unwise for the Board to send out any
questionaire on the subject.

The plan isn't really worth so much consideration.

Claiborne brought with him to Washington the idea that the banks should be allowed
to charge exchange against the Federal reserve bank as collecting agent, which is the
contention they started with and never changed.

He got the idea of immediate credit

for intra district items from members of the Federal Reserve Board.

in a com-

bination of two ideas, each of which is wholly impossible for us to accept, but
I agree that we should make some study here and probably in other districts of the
data you suggest, with the exception of the attitude of state banks regarding membership and the attitude of merchants and the public, neither of which could be

ascer-

tained without a questionaire, and even then it is doubtful whether much cculd be
learned by this method.



Messrs. Gilbart and Coe are working on the other data and

Governor Strong.

FEDERAL RESERVE BANK OF NEW YORK

8/9/23.

"Zr
when we get ours in some shape, we will submit them to the Board and suggest that
they get other reserve banks to studying their situations, but I don't think the plan
should be given too serious consideration.

As to transmitting your views to Crissinger, Case and I both fe:l that it
would be best if these views could be transmitted orally, as a confirmation by you
of our own views rather than by letter.

If we transmit them in writing to him,

it means getting you and him into a correspondence which is bound to make our day to
day dealing3with him on the subject more difficult.

Frankly, no one on the Board

has much judgment about these par matters these days and there is no telling what
tack they may take.

I am expecting to go to Washington to spend a couple of days

next week, and unless I hear from you to the contrary, would like to be given the opportunity of telling Governor Crissinger of your views on that occasion.

Case and I are not at all hopeful of the possibility of ending the controANIENNIIM11.1111,

varsy, which you refer to and which the Board is very keen to do; also ticFadden.

There seems to me no middle ground--it is either par or not par.

We must either
44,41.

word towards par or abandon it.
towards par.

We cannot believe that we should do anything *,,e work

There need be no hurry, however.

If there is to be any aggressive

action, I would favor letting the opponents of par be the aggressors.

You will see

that any such action on their part will bring the friends of par into action.
Personally, whiLe I don't see any chance of !tending the controversy," I do

think the System is rather asleep on the subject and should be aroused into some
activity along the line of improving its collection facilities and reducing the time
of collecting checks.

We have done something in this district through our county

clearing arrangements and through our wire settlements of clearing house balances in
Elmira, binghampton, Syracuse and one or two other places.
made such an arrangement with Atlantic City.
familiar with.
introduced.



Philadelphia has recently

The Talley plan in Dallas you are

All of these are evidencea of what can be done if some energy is

Governor Strong.

ERAL RESERVE BANK OF NEW YORK

We learned a lot from our conversations with Claiborne.

8/9/23.

One of the things

we learned was that one of the real grievances the country banks felt they had was
that they were being deprived of their charges while the city banks, through their
clearing houses, were insisting on retaining their charges.

he said that if the

clearing houses would do away with their charges, a considerable part of the grievance

of the country banks, as well as of their appeal to the public sentiment, would be
lost.

This in fact was one of the ideas Crissinger and James had in suggesting

immediate credit.

Their feeling was that if the Federal reserve banks received

checks for immediate credit, there would then be no justification whatever for the

clearing houses to make any charge for interest on the deferred time, since there
would be no deferred time.

With this idea in mind we got the Board to assemble data

from all of the districts in regard to clearing house charges.

It appears there are

299 clearing houses in the country, of which only 25 make charges and over half of
those are in the Atlanta district.

Some of the charges are at preposterous rates.

It simply means that the city banks there are just as greedy as the country banks.

It also means that the city banks do business in a general atmosphere of exchange
charges.

I have in mind suggesting to Mr. James, as the southern member Of the

Board and one very much interested in this question, that he should consider the ad-

visability of trying to get the clearing houses in the South to follow New York's lead
and put on their discretionary list checks on all two_day (or possibly three_day)
points where checks can be collected at par.

This would keep up the barrier against

the nonremitting bank but show him the way to a wider acceptability of checks drawn
on him if he would forego exchange.

It would also bring about par clearing within

the district for country bank checks collectible at par.
accomplish this, but I think it is worth trying.

Both these suggestions are natural developments along the lire of obtaining
a wider acceptability for out-of-town bank checks, which 1 think was the real purpose
behind the par collection provision of the Act.



It seems to me that instead of

Governor Strong.

CRAL RESERVE BANK OF NEW YORK

8/9/23.

trying to find some fancy, complicated, and almost inevitably unsound plan for "ending the controversy," our course should be to work steadily and as rapidly as possible
along natural lines, by the removal of clearing house barriers and by speeding up
the actual collection of checks, to give checks a wider acceptability in effecting
settlements of debt.

As I said before, there is no hurry, the developments will

probably come slowly, but we should not be asleep.

his crowd may at_ack the System, may cause some withdrawls from the par collection
system, and may attempt to get remedial legislation, but I am satisfied that the
par col action system has very widespread, though not very vocal, sup ort and that
if it appears to be in danger, such support will come into activity.

The credit

men, I am told, are getting ready to take a leading part in any activity in defense
of tht System which may seem necessary.
uation.

They are thoroughly aroused over the sit-

The Chamber of Commerce of the United States of America, which had an

extraordinary referendum a year ago, in which the vote of their members was 1,759 1/2

in favor and 72 1/2 opposed to making par remittance in payment of checks universal
throughout the United States: is also watching the situation with interest.

I have been at work for a few days on a brief statement of the whole situation, which I hope may be so clear and conclusive that when published, either under
my own name or someone else's, may serve as a working document for the supporters of
par collections.

I am proposing to inflict a draft on you for any suggestions you

may care to make.

I hope the foregoing will give you an intimation that here at least we are
not asleep on the subject.

In regard to the last sentence in your telegram, in

which you expressed the hope that all necessary time will be taken to get all the
facts before a decision is made, I believe that this will be done and I am in hopes
of getting an intelligent report out of the Federal Advisory Council.
away at present but




will

be home early in September.

Warburg is

The next meeting of the

_RAL RESERVE BANK OF NEW YORK

5.

Governor Strong.

8/9/23.

dit7-i

Council will be about September

4.

incidentally I may say that the press release

of the Federal Reserve Board on the subject was wade the day before the President
died, so that it got almost no publicity in the press.
Faithfully yours,

Benjamin Strong, Esq.,
Cragmor Sanatorium,
Colorado Springs, Colo.




FEDERAL RESERVE BANK
OF NEW YORK

August 9, 1923.

IN REPLY PLEASE REFER
TO

Dear Ben:

I have your letter of August 3 reporting the progress of your health,
which I read to our executive committee to-day and they were all delighted to
learn how satisfactorily you are progressing.
Answering your question about the expiration of your leave, the date
is September 1.

It is the feeling of the comfnittee that our directors would be

willing to grant you any reasonable extension of leave, also that the attitude
of the Federal. Reeerve Board would probably be the same.

I expect to be in

Washington next Tuesday and Wedneeday and will sound out some of the members
of the Board.

In' the meantime, the suggestion of our committee, in which Case

and I concur, is that you should not apply for a definite extension of your
leave for another fortnight until you have perhaps tried your voice and find
It may possibly be necessary for you to stay away some

out what the result is.

weeks longer than you new think necessary, and it would be a much simpler matter
to make one extension of it than to make two.
the soundness of this point of vies.
regard to your leave.

I am sure that you will realize

But we will do whatever you suggest with

May I say that much as you may, and naturally do feel

to whether
that you want to be at the October conference, I have grave doubts as
of work. One thing,
you ought to undertake it as practically your first piece
about is
folly for you to attempt
however, I am perfectly certain/that it would be simply

to act as chairman of it.

If it works around so that it seems wise for you to

go at all you should certainly plan to sit on the side lines and let McDougal



.. RESERVE BANK OF NEW YORK

and Harrison run it.

it2

Benj.

Strong, Esq.,

8/9/23

If you will confess to your doctor what a strain such a

conference is, even to one sitting on the side lines, I am sure that he will
agree with my view.

I have been pretty bad about writing you recently as we have been

pretty much engrossed with par collection discussions and also it's a fact that
tflie absence of yourself, Harrison and Sailer takes three pretty active pairs of

shoulders away from the office.

Many things thereby are left undone.

We are facing having another absentee in our staff; namely, Shepard
Morgan.

For some time he has been feeling not at par and he and his wife have

decided that the best thing for him to do is to take a year off in which he hopes
to redover his health.

Therefore, he is leaving on. a year's leave of absence,

without pay, on October 1, and going abroad with the entire family.

This means

the appointment of Burgess as another assistant Federal reserve agent, and of
George Roberts as manager of the Reports Department.

The member bank relations

work Mr. Chapin will take under his arm and take in his stride.

I am also pro-

posing to give Mr: Dillistin the additional title of assistant Federal reserve
agent in addition to manager of examinations department.

All this is subject to

the approval of the Board whom I expect to see on the subject next week.
Case ,rent away on

Labor Day.

his

vacation this afternoon and will be away until

Sailer returns frOffaliS trip abroad on Monday.

About a fortnight ago McFadden came in and spent a couple of hours
with me., Three important members of his committee have dropped out as far as
their circuit of hearings goes;

Senator McLean and Congressman Dale (Vermont)

and. Senator Glass,probably,on account of ill-health.

McFadden is anxious to

make the hearings an opportunity to do constructive work, and we are going to
try to help him here. He did not, however, seem to want us to get up much data
for him, although I offered him all of our facilities as you did to Anderson a




couple of years ago.

Benj. Strong, Esq.,

#3

AL RESERVE BANK OF NEW YORK

8/9/23.

The hearings start about September 15 in New England.

have not decided whether to make the hearing

They

in this district an early or a late

one. They intend toward the end of September starting out to the Pacific Northwest
and returning through the Central West to Washington and later to make a tour in
the South and Southwest.

If you have any thoughts in regard to how the herings

might be made useful you might pass them along and I will see that McFadden gets
them.

With regard to your telegram of August 3 suggesting that this may be the
time to carry out the suggestions you made us some time ago under Section 14 Case

has had that matter distinctly in mind during the latter part of July and the
first few days of August when money was pretty tight.

The Treasury c

bought quite a volume of short certificates, and we ourselves bought two or three
millions one day supplying all the money which was needed.
eased off again and it seems (Aliet.

Now the ktuati4as

I am wondering whether you had in mind some-

thing broader and more fundamental than merely a temporary purchase to tide over
a tight moment;

whether you meant that you thought the time an appropriate one

for the system to go in and Yurchase securities on a large scale with a view to
stimulating business activity and prices.

If so, won't you please indicate

briefly your views?

Don't let that pile of correspondence worry you.

You ought not to feel

it on your back at all when you are working so hard to recover your health. Just
let it sit and gather dust.

With best regards,
Sincerely yours,

Benj. Strong, Esq.,
Cragmor Sanatorium,
Colorado .Spring Col.




MISC.34.1

40M-12-22

FEDERAL RESERVE BANK

CONFIRMATION OF TELEGRAM

OF NEW YORK

TO BE MAILED

WE HAVE TODAY TELEVAPHED YOU AS FOLLOWS:

hiGHT LETT'Ji

AU,Nst 16, 1S#23.

Benj. Strong, Esq.,
Craionor

Colorado L,rings, Col.

Letters received. Wive not had time. to digeet them yet Lilt
arite you as -oon
praet1oble T:nd ill transmit your vi ew3 to Crissinger mho is .till aleent
ricm .:,-)Lting to wife's illness and wiL not return until som-, time next week. James
away. Date, :I" Governors Conference fixed for November eleventh. kioard
oc.,,nourred with view ex, reseed first ..ge my letter ninth regrding extension of
your leave.
11180




rirre Jay

FEDERAL RESERVE BAN K
OF NEW YORK

IN REPLY PLEASE REFER
TO

August 17, 1923.

Dear Mr. Strong:

I have been reading over your three letter's of August 13 this morning,

which Miss Holmes has just transcribed for me.

We are watching the business

situation pretty closely and I was glad to learn from Curtiss in Boston yesterday that the sentiment is distinctly improving there.

I think they have been a

most depressed part of the country.
I am sorry that I was cryptic about Morgan.
The fact is simply this.

I did not mean to be so.

During the past two winters he has been subject to

getting rather heavy chest colds and did not throw them off very easily.
always a bit delicate and has not very great resistance.

He is

Both he and his wife

got a li.ttle alarmed about the recurrence of these colds, and I think about

three or four weeks ago she took the bit in her teeth and made up her mind that
the thing to do was to take him and the whole family abroad for a year of complete rest, in which he acquiesced.

I notice you ask, "Why without pay?"

I

really don't think there is anything in his condition which would justify our
continuing his salary in whole or in part.

There are probably a good many people

in the bank, perhaps some of the officers, who are no more robust than Morgan,
but yet who have nothing specific the matter with them.
will be able to finance the year all right.

I think the Morgans

I think also that during this year

he will give much consideration to the question of whether he should continue
in the Reserve bank or plan to take up some other work on his return.




The last sentence in your letter is, "Am

distressed to be away when

FEDERAL RESERVE BANK OF NEW YORK

needed."

#2

Benj. Strong, Esq.,

8/17/23.

I wonder if this was in response to my saying that through the

absence of you, Harrison and Sailer some things had to be left undone?

I did

not mean to give you any other impression than that with three such active
officers away there was plenty to do for those who were left, which of course
you understand without its being said.
I am glad to hear the continued good news about your condition.

I

spoke to three members of the Board, (Platt, Miller and Cunningham) and Gilbert,
who were having a little conference on open market operations and who inquired
about you, about an extension of your leave of absence.

They agreed

tia

the

suggestion made in my recent letter that you should put it off until the end of
August when you might know more definitely and accurately, and that there would
then be no difficulty in having such extension as then was necessary.
The notice is out to-day setting the date of the conference as November
12, which

will

give you quite a bit of leeway.

are not going to persist on presiding.

I am delighted to hear that you

Harrison expects to be back September 1

and no doubt will become active at once in preparing a programme.

Now as to your long memorandum of August 3 about par collections (not
so long either when it gets typewritten) the disadvantage of writing seems to be
apparent when you say that yoji "radically disagree with you and Case in this
matter,"

whereas I do not think we disagree at all.

Case and I thought from

your first telegram that you felt that we should give some real weight to the
Claiborne plan.

I now gather that you

idea was merely to show it up in all its

folly, and with this, of course, I am in fullest accord.

You also had a thought,

which had not occurred to us, which was to use it as a pretext for discussing
the whole subject before the McFaaden committee.

Harrison and I have been

talking for some time about plans for dealing with par collections before this
committee.




But

I haj not thought of the Claiborne plan in that connection.

I

a BANK OF NEW YORK

./t3

Benj. Strong, Esq.,

believe it is a very good idea and the information, which we are busily at work

getting in accordance with your telegram of August 5, together with other ideas
which Gilbart is working on and which Harrison will take up actively on his
return, all gives an opportunity to make a thoroiiigh presentation.

Unfortunately,

I have just missed McFadden in Washington and here this week, but hope to
him again before long.

see

I understand they have rather changed their plans and

are now proposing to begin with a meeting in Washington early in October and
then to proceed west.

I am convinced that we ought to get in our whole case

on par at that first meeting before they start off into the non-par districts.

Just how to arrange it I have not worked out, but somehow it will have to be
done.

I note also that you have a different definition of "ending the controversy" from that which I had, and that, I think, has also led to a difference of understanding as to what we were respectively driving at.

McFadden and

Crissinger would like to end the controversy by some stroke that would leave
both sides perfectly happy.
can be produced.

That is the kind of an ending that I do not think

Your idea of ending it by showing its absurdity, etc., is

one which is very sympathetic to me, but which, unfortunately, I do not think
will "end" it.

I fear that,Claiborne et al are never-ending.

If we can show

it to be absurd that will heir.); but I am convinced that nothing will end it -

that is, by getting all banks on the par list - but Father Time.
I will see that your views get before Crissinger in due course in

writing, and along with them will go my own, which I think will prove to be
identical.




This writing of letters is a bad business.

Miss Holmes will have to sign this as I am just going off for the week

AiRVE BANK OF NEW YORK

Benj. Strong, Esq.,

8/17/23.

end.

I have just joined Hendricks oE one of the grandfathers in the bank,
as Ellen had a daughter born a couple of days ago.
Sincerely yours,

L.C11-71-t

Benj. Strong, Esq.,
Cragmor Sanatorium,
Colorado Springs, Col.




FEDERAL RESERVE BANK
OF NEW YORK

IN REPLY PLEASE REFER

August 22, 1923.

TO

Dear Governor Strong:

At our directors meeting on August 29 we shall want to take up
the question of an extension of your leave so perhaps by that time, with
the knowledge of the date on which the Governors Conference will be held,
you will let me have a line from you giving your up to date views as to
the extension of your leave.

My own suggestion would be that you make

it November 1 so as to give you a month's leeway beyond October 1 in case
you find at the last moment you need to stay away longer.

If you come

back earlier it will be all to the good.

A few days ago I had an opportunity to show to Dr. J. A. Miller
your letter of August 3 with regard to how matters are progressing with your
health.

He said that he had not been at his office for some time and that

doubtless there was a letter there from Dr. ?!ebb making a report, but that

everything in your letter seemed to him both good and all right.

Mr. Peacock was in inquiring for you on Monday but I did not
see him.

He will be in again in a few weeks on his return from Mexico.
Mr. Gilbert has postponed his sailing until September 1 and will

not be back until about November 1.

He will not resign until shortly

after his return.
Sincerely,

MAA.C.

Benj. Strong, Esq.,
Colorado Springs, Colo.



(see P.S. attached)

. RESERVE BANK OF NEW YORK

P. S.

........

Governor Strong

8.22.23

Since writing the foregoing your note of August 19 has been received,

saying that you have heard that the conference is to be November 12 and
suggesting that you had better stay on until the middle of October.

All of

this is good but does not change the recommendation I have made in the
above that you take your leave until November 1.

If you will send me a

wire confirming this care of the Federal Reserve Board, 4Nashington, where

I expect to be on the 27th and 28th it will give me an opportunity to take
it up informally with members of the Board and formally with our directofs
next Wednesday.




Pj.

FEDERAL RESERVE BANK
OF NEW YORK

IN REPLY PLEASE REFER

August 31, 1923.

TO

Dear Governor Strong:

I have been in Washington this week and have been so fearfully tied
up that I have not had a moment to write you satisfactorily.
In regard to the fiscal agency matter, all I want to say is that we

discussed the matter again at our meeting of the directors on Wednesday, at
which time your views were thoroughly explained.

While the directors have

not changed their views, - feeling that we should present our claim for
reimbursement to the Secretary of the Treasury, - they feel that before
making application we should seek the advice of the Federal Reserve board as to
expediency, the Board having in mind the interest of the System as a whole.
The matter will go forward to the Reserve Board in such a way as to preserve
your position.

There is going to be no hurry about this matter, and it

will come un at the Governors Conference.

With regard to par matters, I think I have persuaded the Board to
invite Harrison to go over there for a month or two and be their expert on
everything relating to "par."

we won't know until next aednesday when they

get a quorum for the first time in two weeks.

Harrison has informally agreed

to do this, subject to taking proper care of his health, and I really hope
that it may be the way out of our difficulties.

The Board seems to be

entirely at sea on the whole matter.
Regretting very much to write you such a scrap, I am,

Benj. Strong,
Cragmor Sanitorium,

http://fraser.stlouisfed.org/
Colorado Springs, Colo.
Federal Reserve Bank of St. Louis

Sincerel

ours,

pAVRL




Form 1206 A
CLASS OF SERVICE DESIRED
Telegram

V- Letter

.

lessage

Night Letter
Patrons should mark an X opposite the class of service desired:
OTHERWISE THE MESSAGE
WILL BE TRANSMITTED AS A
FULL-RATE TELEGRAM

WESTE

UNION

Receiver's No.

Check

TEL
NEWCOMB CARLTON, PRESIDENT

Send the following message, subject to the terms
on back hereof, which are hereby agreed to

AM
GEORGE W. E. ATKINS, FIRST VICE-PRESIDENT

Time Filed




ALL MESSAGES TAKEN BY THIS COMPANY ARE SUBJECT TO THE FOLLOWING TERMS:
To guard against mistakes or delays, the sender of a message should order it repeated, that is, telegraphed back to the originating office for comparison.
trim, onehalf the unrepeated message rate is charged in addition. Unless otherwise indicated on its face, this is an unrepeated message and paid for as such, in consider.
'eof it
is agreed between the sender of the message and this company as follows:
The company shall not be liable for mistakes or delays i ii the transmission or delivery, or for non-delivery, of any message received for transmission at the unrepeatedmessage rate beyond the sum of five hundred dollars; nor for mistakes or delays in the transmission or delivery, or for non-delivery, of any messagereceived for transmission at
the repeated-message rate beyond the sum of five thousand dollars, unless specially valued; nor in any case for delays arising from unavoidable interruption in the working of its
lines; nor for errors in cipher or obscure messages.
In any event the company shall not be liable for damages for mistakes or delays in the transmission or delivery, or for the non-delivery, of any message, whether
caused by the negligence of its servants or otherwise, beyond the sum of five thousand dollars, at which amount each message is deemed to be valued, unless a greater value is
stated in writing by the sender thereof at the time the message is tendered for transmission, and unless the repeated-message rate is paid or agreed to be paid, and an additional
charge equal to one-tenth of one per cent of the amount by which such valuation shall exceed five thousand dollars.
The company is hereby made the agent of the sender, without liability, to forward this message over the lines of any other company when necessaryto reach its destination.
Messages will be delivered free within one-half mile of the company's office in towns of 5,000 population or less, and within one mile of such office in other cities or
towns. Beyond these limits the company does not undertake to make delivery, but will, without liability, at the sender's request, as his agent and at his expense, endeavor to
contract for him for such delivery at a reasonable price.
No responsibility attaches to this company concerning messages until the same are accepted at one of its transmitting offices; and if a message is sent to such office
by one of the company's messengers, he acts for that purpose as the agent of the sender.
The company will not be liable for damages or statutory penalties in any case where the claim is not presented in writing within sixty days after the message is filed
with the Company for transmission.
It is agreed that in any action by the Company to recover the tolls for any message or messages the prompt and correct transmission and delivery thereof shall be presumed, subject to rebuttal by competent evidence.
Special terms governing the transmission of messages under the classes of messages enumerated below shall apply to messages in each of such respective classes in addition to all the foregoing terms.
No employee of the company is authorized to vary the foregoing.

THE WESTERN UNION TELEGRAPH COMPANY
INCORPORATED

NEVVCOMB CARLTON, PRESIDENT

CLASSES OF SERVICE
Letter shall be delivered on the day of its date absolutely and at all
A full-rate expedited service.
events; but that the Company's obligation in this respect is subject
NIGHT MESSAGES
to the condition that there shall remain sufficient time for the transmission and delivery of such Day Letter on the day of its date during
Accepted up to 2.00 A.M. at reduced rates to be sent during the night
regular office hours, subject to the priority of the transmission of regand delivered not earlier than the morning of the ensuing business day.
ular telegrams under the conditions named above.
Night Messages may at the option of the Telegraph Company be
No employee of the Company is authorized to vary the foregoing.
mailed at destination to the addressees, and the Company shall be
deemed to have discharged its obligation in such cases with respect to
NIGHT LETTERS
TELEGRAMS

delivery by mailing such Night Messages at destination, postage prepaid.
DAY LETTERS

A deferred day service at rates lower than the standard tele-

gram rates as follows: One and one-half times the standard Night
Letter rate for the transmission of 50 words or less and one-fifth of
the initial rates for each additional 10 words or less.

Accepted up to 2.00 A.M. for delivery on the morning of the ensuing
business day, at rates still lower than standard night message rates, as
follows: The standard telegram rate for 10 words shall be charged for the
transmission of 50 words or less, and one-fifth of such standard telegrani
rate fol. 10 words shall be charged for each additional 10 words or less.

SPECIAL TERMS APPLYING TO DAY LETTERS:

SPECIAL TERMS APPLYING TO NIGHT LETTERS:

In further consideration of the reduced rate for this special Day
Letter service, the following special terms in addition to those enu-

In further consideration of the reduced rate for this special Night
Letter service, the following special terms in addition to those enumerated above are hereby agreed to :
Night Letters may at the option of the Telegraph Company
be mailed at destination to the addressees, and the Company shall

merated above are hereby agreed to :
Day Letters may be forwarded by the Telegraph Company as a
deferred service and the transmission and delivery of such Day Letters

is, in all respects, subordinate to the priority a transmission and

delivery of regular telegrams.
Day Letters shall be written in plain English. Code language
is not permissible.
c. This Day Letter is received subject to the express understanding and agreement that the Company does not undertake that a Day

be deemed to have discharged its obligation in such cases with respect

to delivery by mailing such Night Letters at destination, postage
prepaid.
Night Letters shall be written in plain English.
is not permissible.

Code language

No employee of the Company is authorized to vary the foregoing.

MISC.34.1

40,4 4,,2

FEDERAL RESERVE BANK

SENT BY

OF NEW YORK

4.Sres

Benjtmin Strong,

SEND TO FILES

-7;e

COPY LtiFWELlkGRAM

S pteeber 4, 1925.

se., Cragmor Sanatorium, Colorado Springs, Colo.

Authentic detailed reports from Jan meagre. Communicetions through °seem only.
Called on Hoehino, Bank's representative Lew York who believes Shibusewa probably safe
as his home Witfi out of gone. Also as Inouye wes announced as Finance elinister in new
While extent of
Government formed after disaster hoshino believes him certainly safe.
damage may be eYaggerated in first reports end will not be really known for severel days
it is without doubt very severe end e eetional oelemity. The Bank and eany other modern

buildings in Tokyo and Yokohama oere demolished by severe quake which lasted one hour
end later recurred. quake wee up and down shake which caused stone buildings to

disintegrate end collapse. Coast elections soutt end east of cities including resorts
where many 'Dena officials were with
tidal weves. Aeerican foreign banks
froe Shanghai to Yokohama and exkect
in destroyed area unesually light at

their families entirely engulfed and owept away by
also without direct news. Sending their !tanagers
cables end of week. They believe stocks of goods
,e
this time and that firms will probebiy survive.

offered eondolences end fullest possible help to Bank.




Jay

CLASS OF SR,IIVICE SYMBOL
Tel

Im
Blue

Illgt:t Message
Mite
NL
NI ht Letter
If none of these three symbols

NV ESTEkilSNA

TEL

words) this is a telegram.

symbol appearing after the check.

Telegram
Day Letter

NEWCOMB CARLTON, PRESIDENT

Blue

Night Message

WESTERN UNION

appears after the check (number of
Otherwise i ts character is indicated by the

CLASS OF SERVICE SYMBOL

ea,

Nite

NL
Night Letter
If none of these three symbols
appears after the check (number of

words) this is a telegram. Otherwisel ts character is indicated by the
symbol appearing after the check.

GEORGE W. E. ATKINS, FIRST V10E-PRESIDENT

RECEIVED AT 17 E. PIKES PEAK AVE., COLORADO SPRINGS, COLO.

VA48n 186 BLUE' 1/76
1923 SEP

-4.

NEWYORK NY' 4 1224P

BENJAMIN STRONG
t,

PM 3 53

474

CR AG MOR SAN ATOR I UM I COLOR ADOSPR I NGS COLO

AUTHENTIC DETAILED REPORTS FROM JAPAN MEAGRE COMMUNICATIONS THROUGH
OSAKA ONLY CALLED ON HOSH I NO BANKS REPRESENTATIVE NEWYORK
WHO

BELIEVE SHI BUSAV9A PROBABLY SAFE AS HIS HOME WAS OUT OF ZONE

ALSO AS

iNoyyE

WAS ANNOUNCED AS FINANCE MINISTER, IN NEW GOVERNMENT

FORMED AFTER DISASTER HOSHI NO BELIEVES HIM CERTAINLY SAFE, WHILE

EXTENT OF DAMAGE MAY BE EXAGGERATED

IN FIRST REPORTS AND WI LL

NOT BE REALLY KNOWN FOR SEVERAL DAIS IT

IS WITHOUT DOUBT, VERY

SEVERE AND A NATIONAL CALAMITY

http://fraser.stlouisfed.org/
Federal Reserve Bank of e CV1.
.151/1ft St. Louis

'

ikLE.PHONED \TE:

IPPIMPPM.M.IPPPIPPOMSNININIFININ=




::.j> SF SE NICE SYMBOL
/-

Telegram
Day Letter

Blue

Night Message

N Re

WESTE0,seN UNION
Ce,

symbol appearing after the check.

TEL

THE

NEWCOMB CARLTON, PRESIDENT

GEORGE W. E. ATKINS. FIRST VICE-PRESIDENT

nv

BANK AND MANY 'OTHER MODERN BUILDINGS; IN

WERE DEMOLISHED

Day Letter

Blue

Night Message

Nite

NL
Night Letter
It none of these three symbols

AM

RECEIVED AT 17 E. PIKES PEAK AVE., COLORADO SPRINGS, COLO.

EA460 SHEET 2/

Telegram

WESTERN UNION

NL
Night Letter
If none of these three symbols
appears after the check (number of
words) this is a telegram. Other.
wiseits character is indicated by the

CLASS OF SERVICE SYMBOL

appears after the check (number of
words) this is a telegram. Otherwiseits character is indicated by the
symbol appearing after the check.

1923 SEP 4 PM 3

TOKYO

55

AND' YOKOHAMA

BY SEVERE QUAKE WHICH LASTED ONE HOUR AND LATER

RECURRED, QUAKE WAS UP AND DOWN, SHAKE WHICH CAUSED STONE BUILDINGS

TO D1S INTEGRATE AND COLLAPSE 4 COAST SECTIONS SOUTH AND EAST OF

CIT IES,L INCI_UD I NG RESORTS WHERE MANY BANK OFFICIALS WERE WITH THEIR.

FAMILIES ENTIRELY ENGULFED AND SWEPT AWAY BY TIDAL WAVES AMERICAN
FOREIGN BANKS, ALSO WITHOUT DIRECT NEWS SENDING THEIR, MANAGERS FROM
SHANGHAI TO' YOKOHAMA AND EXPECT CABLES, END OF WEEK, THEY BELIEVE

STOCKS OF GOODS; IN DESTROYED AREA )UNUSUALLY. LIGHT AT THIS TIME AND
THAT FIRMS WI LL PROBABLY SURV I Vc, WE OFFERED CONDOLENCES AND FULLEST

POSSI6LE HELP TO BANK

JAY.

CLASS OF SERVICE SYMBOL
Telegram
Blue

Day Letter

ir
,.

Nite

Message

III

Ater
If none of these three symbols
.

appears after the check (number of

words) this is a telegram.

Other-

wiseits character is indicated by the
symbol appearing after the check.

VITESTE47basx1 UNION

CLASS OF SERVICE SYMBOL
Telegram
Day Letter

TEL

NEWCOMB CARLTON, PRESIDENT

*X 411!
tit

IND

Blue

Night Message

WESTERN UNION

Nite

NL
Night Letter
It none of these three symbols

AM

,fter the check (number of
words) this is a telegram.
wise its character is indicated by the
symbol appearing after the check.
aptieti

GEORGE W. E. ATKINS. FIRST VICE-PRESIDENT

RECEIVED AT 17 E. PIKES PEAK AVE., COLORADO SPRINGS, COLO.

023 SEP

VA350 51

PM F 06

z!.

relzpilo
NEWYORK NY 4 224P
4.

re

BANJ AM IN STRONG

"4-GRA1/4
CR AG MOR SAN ATOtifil9t,COLORADO SP R I NG S. CO LO

STATE DEPARTMENT ADVISE RECEIVED ONLY ONE MEAGER MESSEGE FROM JAPAN
THROUGH SHANGHAI ALL WIRES AND CABLES BROKEN ENDEAVOR IN G TO

ESTABLISH WIRELESS VIA HONOLULU AND PHILIPPINES THEY WI LL MAKE
EVERY EFFORT TO GET; INFORMATION INOYE AND SHI B USAW A MAY TAKE

TWENTY FOUR HOURS OR LONGER DAYLETTER WITH 80E; INFORMATION FROM
OTHER SOURCES FORWARDED




JAY.

Other-

FEDERAL RESERVE BANK
OF NEW YORK
September 6, 1923.
Dear Governor Strong:

Harrison came back on Tuesday and looks fine, although I am sorry to say
that his neck bothers him from time to time.
par collections.

We have since talked nothing else but

I was very delighted to receive a letter from Governor Crissinger

this morning saying that the Board had yesterday voted to invite Mr. Harrison to come
over to Washington to consult with the General Counsel of the Board on all matters
relating to par collections.
of next week.

"7742,0

A Harrisor if planning to go over on ".onday or Tuesd j

In the meantime, Warburg is coming back to New York on Saturday morn-

ing and he and Harrison will talk over the program for the consideration of this subject by the Advisory Council on September 17.

If we can get a good report out of the

Federal Advisory Council along the line we have all been discussing, I think it will
go a long way towards making up the Board's mind.

I am glad to say that Mr. Platt,
lg

who is chairman of the transit committee of the Board, was very pleased with the idea'
of Harrison's coming over, so the thing seems to have gone through without opposition.
Harrison will have all of your data with regard to the presentation of our case be-

fore the McFadden committee, and when he is able to work out a program with the Board
as to what should be done and how it should be handled, we will of course give him
every assistance in preparing the data.
committee is to be on October 2.

I understand the first meeting of this

As I told you, I read last week to Governor

Orissinger, Mr. James and Mr. Dawes such parts of your correspondence with me on the
subject as I thought pertinent.

Harrison will have all of your correspondence, and

if it seems desirable to make a written synopsis of your views he will do so, but I

think that really having him over there is much more effective than merely writing
Crissinger a letter.




L.

2

Governor Strong

September 6, 1923.

RESERVE BANK OF NEW YORK

With regard to your telegram concerning Japan, Sailer is endeavoring to get
you the information you desire.

In the meantime we have cabled the Bank of Japan,

have called on their agency here, and have passed a resolution of sympathy and offer
of assistance by our board of directors.
I was dreadfully:lorry to hear a few minutes ago about Harry Davison's
illness, and presume you know of his advent to Colorado Springs with his mother and
sister.

They say here that he is expected to throw it off and recover.
I am very much obliged for your suggestions and criticisms regarding the

par collection article.
collection

It is now about

to be written

n more popular style by

Morgan for publication by the Credit Yen under their own name.
Sailer is keeping you advised about the building.
his trip abroad.

He seems very wel3 after

Case is back to-day after three and a half weeks vacation.

going away to-morrow morning, up to Keene Valley to

I am

44- with some friends for a week.

Gilbert sailed Saturday and expected to be gone about five or six weeks.
We gave him letters to the Bank of France and the De Nederlandsche Bank.

As I under-

stand it he is going largely on pleasure.
As far as I know things are pretty quiet in the bank, but this may be only
because I have been rather submerged by par collection matters.
I hope everything is continuing to go finely with you.
I am enclosing copy of a letter which was sent yesterday to the Board in
regard to Fiscal Agency expenses, together with copy of letter I am writing to-day to
Governor Crissinger on the subject, which I think will leave the matter in .th

for you to express your views after you return to the east.

Ke considered at our

directors meeting very carefully the way the transmittal of these
worded, and the letter is the result of this discussion.

open

should be

The question was whether we

should abandon our own decision in the matter to the Federal Reserve Board, or retain
our right to decide the matter ourselves but ask the Board for their advice.

The

latter course was decided upon as the appropriate procedure.

Mr. Benj. Strong,
Cragmor Sanatorium,

Colorado Springs, Col.
http://fraser.stlouisfed.org/

Rnno.
Federal Reserve Bank of St. Louis

Faithfully yours,

Form 1206 A
OF SERVICE DESIRED
Telegram
"

letter

WESTELIZN1 UNION
TEL EA AM

Receiver's No.

WESTERN UNION

14itt Message

'Mitt

Night Letter

Patrons should mark an X opposite the class of service desired:
OTHERWISE THE MESSAGE
WILL BE TRANSMITTED AS A
FULL-RATE TELEGRAM

NEWCOMB CARLTON, PRESIDENT

Check

,475

Time Filed

GEORGE W. E. ATKINS, FIRST VICE-PRESIDENT

Send the following message, subject to the terms
on back hereof, which are hereby agreed to

?

(-)

ulicut

tut

Tic?4L,

eiLvi

M a ei

tial4u\tr3i-14.




07)-4-k-c.

ad7k

n4

611.5-vifr\A,

4),-- CI

IRS

Akuut.41,
aAk1

701;1 110. .)/ 646--L1

et-cCA:1 k,t)._,LA,17

Jj

rt_at

csie-vK

Le_a&L.

Pteivue.

ALL MESSAGES TAKEN BY THIS COMPANY ARE SUBJECT TO THE FOLLOWING TERMS: To guard against mistakes or delays, the sender of a message should order it repeated, that is, telegraphed back to the originating office for comparison.
sins, onehalf the unrepeated message rate is charged in addition. Unless otherwise indicated on its face, this is an unrepeated message and paid for as such, in consideration hereof it
is agreed between the sender of the message and this company as follows:
The company shall not be liable for mistakes or delays in the transmission or delivery, or for non-delivery, of any message received for transmission at the unrepeatedmessage rate beyond the sum of five hundred dollars; nor for mistakes or delays in the transmission or delivery, or for non-delivery, of any messagereceived for transmission at
the repeated-message rate beyond the sum of five thousand dollars, unless specially valued; nor in any case for delays arising from unavoidable interruption in the working of its
lines; nor for errors in cipher or obscure messages.
In any event the company shall not be liable for damages for mistakes or delays in the transmission or delivery, or for the non-delivery, of any message, whether
caused by the negligence of its servants or otherwise, beyond the sum of five thousand dollars, at which amount each message is deemed to be valued, unless a greater value is
stated in writing by the sender thereof at the time the message is tendered for transmission, and unless the repeated-message rate is paid or agreed to be paid, and an additional
charge equal to one-tenth of one per cent of the amount by which such valuation shall exceed five thousand dollars.
The company is hereby made the agent of the sender, without liability, to forward this message over the lines of any other company when necessaryto reach its destination.
Messages will be delivered free within one-half mile of the:company's office in towns of 5,000 population or lees, and within one mile of such officein other cities or
towns. Beyond these limits the company does not undertake to make delivery, but will, without liability, at the sender's request, as his agent and at his expense, endeavor to
contract f or him f or such delivery at a reasonable price.
No responsibility attaches to this company concerning messages until the same are accepted at one of its transmitting offices; and if a message is sent to such office
by one of the company's messengers, he acts for that purpose as the agent of the sender.
The company will not be liable for damages or statutory penalties in any case where the claim is not presented in writing within sixty days after the message is filed
with the Company for transmission.
It is agreed that in any action by the Company to recover the tolls for any message or messages the prompt and correct transmission and delivery thereof shall be presumed, subject to rebuttal by competent evidence.
Special terms governing the transmission of messages under the classes of messages enumerated below shall apply to messages in each of such respective classes in addition to all the foregoing terms.
No employee of the company is authorized to vary the foregoing.

THE WESTERN UNION TELEGRAPH COMPANY
INCORPORATED

NEVVCOMB CARLTON, PRESIDENT

CLASSES OF SERViCE
Letter shall be delivered on the day of its date absolutely and at all
events; but that the Company's obligation in this respect is subject
A full-rate expedited service.
to the condition that there shall remain sufficient time for the transNIGHT MESSAGES
mission and delivery of such Day Letter on the day of its date during
Accepted iip to 2.00 A.M. at reduced rates to be sent during the night
regular office hours, subject to the priority of the transmission oi regand delivered not earlier than the morning of the ensuing business day.
ular telegrams under the conditions named above.
Night Messages may at the option of the Telegraph Company be
No employee of the Company is authorized to vary the foregoing.
mailed at destination to the addressees, and the Company shall be
deemed to have discharged its obligation in such cases with respect to
NIGHT LETTERS
TELEGRAMS

delivery by mailing such Night Messages at destination, postage prepaid.
DAY LETTERS

A deferred day service at rates lower than the standard tele-

gram rates as follows: One and one-half times the standard Night
Letter rate for the transmission of 50 words or less and one-fifth of
the initial rates for each additional 10 words or less.

.
Accepted up to 2.00 A.M. for delivery on the morning of the ensuing
business day, at rates still lower than standard night message rates, as

follows: The standard telegram rate for 10 words shall be charged for the
transmission of 50 words or less, and one-fifth of such standard telegram
rate for 10 words shall be charged for each additional 10 words or less.

SPECIAL TERMS APPLYING TO DAY LETTERS:

SPECIAL TERMS APPLYING TO NIGHT LETTERS;

In further consideration of the reduced rate for this special Day
Letter service, the following special terms in addition to those enumerated above are hereby agreed to:

In further consideration of the reduced rate for this special Night
Letter service, the following special terms in addition to those enumerated above are hereby agreed to:
A. Night Letters may at the option of the Telegraph Company
be mailed at destination to the addressees, and the Company shall

Day Letters may be forwarded by the Telegraph Company as a
deferred service and the transmission and delivery of such Day Letters

is, in all respects, subordinate to the priority of transmission and
delivery of regular telegrams.
Day Letters shall be written in plain English. Code language
is not permissible.
c. This Day Letter is received subject to the express understanding and agreement that the Company does not undertake that a Day



be deemed to have discharged its obligation in such cases with respect

to delivery by mailing such Night Letters at destination, postage
prepaid.
D.
Night Letters shall be written in plain English.
is not permissible.

Code language

No employee of the Company is authorized to vary the foregoing.

""c"...ezee

/^76?'

FEDERAL RESERVE BANK
OF NEW YORK
October 15, 1923.

Dear Governor Strong:
Your Health.

I have, I think, only one letter from you to acknowledge, plus one or

two small notes.

The letter is a memorandum which you sent me about the middle

of September in regard to your condition as a result of the
consultation, which we were all delighted to receive.
an inquiry

by our

staying longer.
V/

Dennis-Foster-Chapman

This led, as you know, to

executive committee with regard to the desirability of your

Your reply to

this

inquiry was most satisfactory and reassuring.

Recently, acting on your suggestion, I had a talk

with

Dr. Miller, and was de-

lighted to have his enthusiastic confirmation of everything you had said;

also

an even more reassuring statement about your voice and the use of it than you
yourself had indicated.

Our directors and officers are all delighted at the

thought that you are coining back se soon, and I have kept Governor Crissinger

and the other members of the Board advised.
Shepard Morgan,

v7

Morgan left

written from the steamer.

on September 29, and today

Burgess

I had

a letter from him

and Dillistin have both been appointed

Assistant Federal Reserve Agents, and Burgess is very much on the job.
Washington Conference

November 12.

Ten days ago McDougal and I met in Washington

and fixed up a program, much of which was suggested by the Board.
been approved by the Federal Reserve Board;
Mr. Beyer today.
it.

a copy

of

It has since

it goes to you through

You may not agree with all of the propositions contained in

Some of them were suggested by the newer members of the Board.

#yatt's Sales Contract
to this.

wan.

Mr. Case

has given

me your memorandum in regard

Governor Crissinger was over here a week ago today, and while he was

here Mr. Case and Mr. Kenzel discussed this matter at length with him.



In the

FEDERAL RESERVE BANK OF NEW YORK

afternoon he spent an hour with
him that

occasional

October 15, 1923.

Governor Strong

2

five or six of

the leading bill dealers, who told

advances from us ware sine qua non of their continuing in the

Governor Crissinger was much impressed and inclined to agree

bill business.

Our Officers! Council discussed it this morning and referred the

with them.

matter to Messrs. Harrison, Kenzel and Mason to prepare a program which would be
Since then Harrison has received a

both practicable and unquestionably legal.

message from Mr. Wyatt that Governor Crissinger has asked him to come

./telephone
up here and
a day

or

study the situation on the spot, and Mr. Wyatt will be here within

two.

In any case, nothing will be done before the Governors! Conference,

at which the Board has asked to have the matter

discussed.

We hear that several

members of the Board were disturbed at the action taken by San Francisco some
three or four weeks ago in notifying the dealers there that they would cease to
do business on sales contract basis.

actio
This,quipckly got back to New York and the

National City Company, who talked with P.M.W. on the subject.
got busy with some one out in San

Francisco

who got the Reserve Bank to withdraw

its announcement until after the Governors' Conference.
reason to worry unduly over this matter.

He immediately

I think there is no

Some way simply must be fixed up to

enable the business to be done.
Peacock's Visit.

Peacock of the Bank of England paid Case and me a call two or three

weeks ado and inquired very particularly for you on behalf of both himself and
Norman.

I gave him copy of

your memorandum of September 14, referred to in the

first paragraph of this letter, which he was very glad indeed to take over to
Norman.

He said that the latter was now in good form, although in the late

summer he had been pretty well run down.

I

showed him some London

in our papers about the inflationist party in England.
think the

He said that he did

not

movement was a really serious or important one.

Directors of this Bank.

The committee of the Bankers Associations hada meeting a

week ago and selected as a successor to Mr. Williams, Mr. Theodore
head of Leggett & Company, wholesale grocers.



dispatches

F.

Whitmarsh,

The indications are that he will

'ERA, RESERVE SANK OF NEW YORK

Governor Strong

3

October 15, 1923.

accept the nomination by tomorrow, although it is not definite yet.
will remember, he is an important director of the Irving Bank.

As you

McGarrah knows

I have never met him.

him well and thinks he will be an excellent director.

The committee is also going to recommend Mr. Treman's name for another term.
Par Collections.

The reason I have not written you more frequently, in addition to

there being very little to write about, has been that for the last two months I
have been devoting most of my time and energy to the par collection situation,
and have worked out a program which I think is gaining headway with the Board.
It involves eliminating that paragraph of regulation J which required us to
charge on checks indorsed by non-remitting banks.

It involves leaving in

regulation J, for the present, the paragraph which says that we will not collect
can

on banks except where we

collect directly or through other banks.

we will not collect over the counter for the present.

This, as I

That is,

have indicated

to you, takes us out of the controversy and leaves it up to the business men and
the bankers.

It seems to me that under this program, as we have ceased trying

to extend par collections by attacking

non-remitting banks,

we should endeavor to

ing
devote our energies to expresSrappreciation of the banks which remit at par and

to seeffat their checks are given a preference over non-par checks in business
settlements.

To effect this two separate actions were necessary:

bankers should receive cheCks on par banks for collection
tion cost.

at the minimum collec-

This means heavy reductions in the Clearing House charges of a

number of cities, mainly in the Atlanta district.

this

(a) that the

up with vigor.

(b)

Mr. James is already taking

That the business men should in some concrete way

recognize the greater acceptability of par checks.

To bring this about I

suggested to the Credit Men here that they should inaugurate a campaign to get
business men to express

a willingness to

accept in settlement of their invoices

any check payable at par through the Federal Reserve System.
what the great majority of business houses are now doing.
minority, who are



insisting

This in fact is
In the case of the

on settlement in New Yorl, funds, Chicago funds, etc..

October 15, 1923.

Governor Strong

e it will
is

mean a broadening of their terms.

But this is a concession which it

felt they should be willing to make in view of the fact that the country

banks have made the concession of giving up their exchange.

The Credit Men

have taken hold of this idea enthusiastically and are preparing to raise a
special fund from buEiness houses to put it across.

They have adopted a

standard symbol, copy of which is enclosed, which they hope to get business

houses to use, with suitable preceding words, on their invoices and statements
of account.

They are also getting out a brief pamphlet based on the original

one I wrote and sent you sometime ago.
suggestions you made regarding my draft.

Thank you very much for the helpful

I wont go into the details of this

program except to say that they are being worked out very carefully and effective-

ly.

One reason the Credit Yen have taken it up so enthusiastically is that it is

a sweet rather than a sour movement; a campaign of friendliness to remitting

banks 'either than unfriendliness to the non-remittin anks.

Furthermore, it

does not commit anybody to retur4 as unacceptable,a non-par check, but it will,

if successful, put into the minds of thousands of business people all over the
country the superior acceptability of a par check.

If the superior acceptability

of such checks can be demonstrated, it is not impoesible that some, if not many,

of the non-remitting banks may in time be willing to remit on the merits of par
rather than by compulsion.
Mr. Tregoe4=exibVesolebuomeemeedettee( and Mr. Orr went down before the

McFadden committee lest week and found them most sympathetic to par.

They say

that their reception was in quite marked contrast to the reception to the non-par
people a day or two previous who, they say, were treated rather roughly by the
committee.

McFadden at Atlantic City assured me that he felt that the business

world would not

tand for the reversion to the old conditions which prevailed

when exchange was being charged.

Governor Crissinger gave us the impression,

when he was here last week, that the attitude of the committee was in every way
Harrison has been writing you, I believe,
most friendly to the Reserve System.



ERVE BANK OF NEW YORK

something

Governor Strong

5

about his adventures in Washington.

pessimistic about the

situation

October 15, 1923.

I think he is a little unduly

in the Board, however.

get my revised par memorandum into the hands of the
to read it before

the

committee in

Claiborne people had their day in Court.

it to them with enough copies for each
not I cannot say.

I was very anxious to

member to

time for them
Hamlin presented

Whether they read it or

read.

I am sending you a copy of it in case you would care to look

it over again in its revised form.

I hope you will find it improved.

It went

before the committee as a memorandum prepared by several of the Federal Reserve
Bank officers.

This was entirely true because practically all of them made

suggestions and recorimendations whick were embodied in the final draft.

I still have before me as not fully answered some of your earlier
letters as to the details which should be put before McFadden's committee with
regard to the savings to the public of the par system;
Claiborne's float-buying plan.

also an attack on

I duly advised Messrs. Crissinger, James and

Dawes of your ideas in this respect but Harrison has written you how utterly
impracticable it proved to get any agreement or action out of the Board in regard
to this or any other matier for presentation to the McFadden committee.

What the

hearing really amounted to was an expression of individual views on the part of
different members of the Board.
Japanese Guests.,

Last week we bad at lunch Mr. Asoh one of the active directors of the

Bank of Japan, together witl, Mr. Hoshino end Mr. Kashiwagi.

ing from Europe having lost his second son in the earthquake.
ing you and wants to be remembered most cordially.
returned from Japan and was in the earthquake.

Mr. Asoh is returnHe remembers meet-

Mr. Fashiwagi has just
He says that when Mr. Inouye

became Finance Minister, the Minister whom he succeeded, Mr. Ichiki (I think)
e'

became Governor of the Bank of Japan.

Mr. Kashiwagi was just about to start out

when the quake came.
to play golf with Mr. Nagaike at Miyanoshita, A They were in a little hotel on
the side of a valley.

The earthquake was so severe that they ran out and

hardly had they done so when the whole hotel slipped off its foundation into
the valley below.




6

E.:SERVE BANK OF NEW YORK

York Clearing_fOuse.

October 15, 1923.

Go verno r Strong

No doubt you have seen in

the papers that Alexander has

been elected president of the Clearing House and Woodward chairman of the Clear-

ing House Committee.

The prospect

in the

of your return during

the

next fortnight makes everybody

bank very happy, and I hope most sincerely that nothing will occur to

prevent your carrying out your plans and that you will find the return to sea
level does not in any way put you back.
Please give my kindest regards and
son.

I an delighted

that you

sympathy to Mrs. Davison and her

are getting relief from institutional life and

cooking even before returning.
Faithfully yours,

%.

Mr. Benj. Strong,
0/0 Mrs. H. P. Davison,
Broadmoor,
Colorado Springs, Colorado.

Encs.

AYABLE AT PA

through Federal Reserve System




FEDERAL RESERVE BAN K
OF NEW YORK

IN REPLY PLEASE REFER
TO

October 18, 1923.

Dear Governor Strong:

I have just received your letter o
Sewall's visit.
return

and all

of taking no

I am delighted that all tse fellows agree about your
unite in giving you most eelemn

warnings.

Your programme

chances, never getting tired, etc., is one which we would

all agree with, and it is going to be
not.

the 14th telling about Dr.

No one has ever yet succeeded

4)

to you whether you follow it or

making you stick

to such a programme,

and I hope the chorus of western dofttors viil do what no

one in

the East has

ever been able to do in this reel) c .

As for the

officers,

4ere is no doubt that they will be entirely

satisfied with your schedule p ovided it is effective in keeping your health
good.

I have asked Snyd

to look over your thought on the surplus wheat

and have something for yob/when you return.
Yesterday we ha4 a very pleasant and cooperative lunch with

Woodward with regard

to/revising

the clearing house statement and general

relations with the cleEiring house committee.

are Wiggin, Reynolds
officio.




The members of the committee

Perkins and Fulton, plus Alexander, president, ex

FEDERAL RESERVE BANK
OF NEW YO R K

IN REPLY PLEASE REFER

December 6, 1923.

TO

PERSONAL
Dear Governor Strong:

There are two or three matters on which I want to write you a line:
(1)

It appears that about ten days ago Dr. Miller, at a board meet-

ing, brought up the Clayton Act situation and got the Board to ask each Federal
reserve agent to make a review of conditions in his district and to send his
recommendations as to what permits should be revoked in the case of trust companies which have become more competitive than they were when the permits in
' question were granted in 1916.

I recommended last May that this should be done, but that it should

be done during the first half of the year and that if any permits were revoked
the banks should be given six months' notice so as to make their readjustments
at the coming election of directors in January, 1924.
tee and Assistant
no revocations.

The Clayton Act commit-

Counsel Freeman told me that the Board had decided to make
I stand by my recommendation which, as I recollect it, you

were in favor of early last spring, but I think that for them to make any revo-

cations only a week or two before the coming January elections would be most
inconsiderate bo the banks concerned.

Of course, the Board may do nothing after the agents have made their
respective reviews, but the point I thought you might say a word about when you
were over there is the necessity of giving the banks reasonable notice if any
revocations are planned.




You probably have heard that the Board has created a new office

RESERVE BANK OF NEW YORK

2

called "assistant to the governor."

Governor Strong

12/6/23.

There seems to be some mystery about this

but the indication is that it is to be filled by a publicity man who will give
out lots of publicity regarding the system.

I gather that it is an idea of

Governor Crissinger's and the suggestion has been made that se may find it occupied by Mr. Welliver.

Personally, I think it is a most dangerous idea that the

Board should have a publicity agent, and possibly, if you have not yet become
aware of this situation you may like to look into it while you are over there.

With respect to publicity,the information which the Journal of Commerce
published on Tuesday morning which it is said to have received from the Federal
Reserve Board, in regard to the open market programme seemed to me a particularly
unfortunate way of giving out the itformation and starting the discussion. Quite
a number of the other papers have commented upon it without seeming to understand

much about it, and the enclosed editorial in the Journal of Commerce yesterday
morning keeps up the discussion.

All this seems to bear on the questi

Young brought up at our last meeting as to whether there should not be some wellthought-of statement on the subject which would present the matter in comprehensive

shape for the public mind to understand.

At our meeting yesterday, as possibly Mr. Case may have intimated to
you over the telephone Mr. Young again brought up the question and felt that
whether the policy were wise or unwise the idea of its being operated by a small
group of five governors, as he felt that in effect it would be operated, was
in the public mind,
extremely dangerous and likely to lead to disaster, Harrison and I maintained

that in the last analysis the directors of each Federal reserve bank were res-

ponsible for the policies of their banks, and that they did not delegate their
authorities to the committee of five except to operate under a policy which the
directors might agree upon from time to time or, say, month to month, with the




AL RESERVE BANK OF NEW YORK

#3

Governor Strong

12/6/23.

Federal Reserve Board exercising its discretion at the final end of the chain.
It seems to me that if the matter could be set up, not only in theory but in
fact, along the same line as the decision on rates;

namely,

Governor recommends to his board,
The board agrees upon a policy, and
* The Federal Reserve Board reviews and determines the policy.
We should then have a perfectly logical approach to open market operations.

Of course, the recommendations of the governors to their respective boards would
be largely governed by the recommendations which the committee of five made to
the twelve reserve banks.

I agree with Mr. Young that the delegation of author-

ity, either in substance or form, to a small committee of five governors to deal
with an important element in the control of credit is full of dangers, and in
arranging this whole matter we should be careful to see that in substance as
well as in form the powers delegated to this committee are pretty circumscribed,
I cannot now suggest just how this is to be done but am merely giving you the
results of our discussion yesterday and my own views on it.

Mr. Woolley agreed

very strongly with Mr. Young in this matter.
(3)

Another subject you may possibly have a chance to say a word

about is Ir. Saunderstreappointment.

I have not heard anything further from 2r.

Platt on the matter since he. called me up a couple of weeks ago.

I believe that

Mr. James is a member of the nominating committee
Sincerely yours,

P. S.

Bullock has just been in to inquire about the

ubli ity above

referred to concerning the purcirase of government securities, and I have dis-

oussed the matter in a general way with him.

Of course, with this link in thb chain one has to deal carefully
*
with the rights of Federal reserve banks under Section 14 to purchase Government
securities without much supervision by the Board.



4.)

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COPY of handwritten letter
Sunday afternoon
Dec. 9,1923
[stamped]

ACKNOWLEDGED
DEC 10 1923

BS
Dear Ben -

Your apprehensions regarding the credit men's plan have naturally
awakened apprehensions in me for I am of an apprehensive nature.
But I am glad
to say that Harrison who has been familiar with the plan at every step doesn't share
these apprehensions to any considerable degree.

You are to be with several governors in Wsh. this week + I hope you
wont get them stirred up on the plan at this late date. Your concern is along 2
lines as I understand it;
Have other F.R.Bks shared in the approval of this plan
The attitude of the N.Y.bank, + principally myself towards it; from
the point of view of complaint on the part of the opponents of par payments.
Id like to give you merely in a line, the facts in regard to these 2 points.

With regard to (1).
Idea first broached by me to Wills + Martin at a meeting here in late
Aug. or early Sept. They were among the 7 who recommended Reg. J. to F.R.Bd + were
still strong for it. Both favored this idea, Wills enthusiastically
Case + Harrison
were at the discussion I feel quite sure.
Idea suggested soon after to Mx. Orr of credit men as a "thank you"
programme for the par banks. He + Tryoe[?] liked it + their directors at their annual
meeting Sept 19 adopted the idea enthusiastically
Before this I had told Crissinger + James,

If-

I

think Dawes, of the

idea.

Also I had explained it to Davis who said it was O.K. + nothing
illegal or objectionable to it.
Sept. 25 at Atlantic City
convention I gave a lunch to Orr to
meet Platt, Austin, Norris, Blair(Chgo) Attlebury (St. Louis), Strater(Cleveland) +
2 or 3 from N.Y. Orr explained the plan + all present approved it, as far as could be
seen. Wellborn was invited but didn't come. McKinney left the day before but I
explained the plan + my general attitude + he approved both, + gave me some suggestions
about the pamphlet I was preparing for the credit men, final copy of which I sent you a
few days ago.
Early in October I got into touch with Seay + he approved plan + made
some suggestions about pamphlet.
Late in October at Cleveland Wills, Fancher, Curtiss, Martin, Heath
+ I discussed the plan very fully + + we had 4 or 5 Cleveland business men in to lunch
with us to find out how they liked it + whether they would use it.
They were all for
it but thought it too mild.
(G) The following week Heath wired that McDougal + McKay raised two
technical questions (1) whether "T6ollectible at Par"Tasn't better than "payable at par"
and (2) whether the statement "any check collectible through the F.R.System" wouldn't
stir up the non-par branks less. Neither proved practicable + Heath wired that they
were
 mere17- suggestions.


- 2 -

(H)The credit men advised McFadden + sent him copy of 1st proof of pamphlet,
also 1 doz copies the day it come off press.

I showed Davis proof of the pamphlet to get him to pass on the reference
to the decisions, and explained the plan fully to him again. He said it was "good stuff."
Nov.12 I got Curtiss Fancher Wills, Perrin, McDougal + perhaps 1 or 2
others to read the proof of the pamphlet + make suggestions.
Nov. 15 I read an outline of the plan to the Joint Conference + while
there was, I regretted extremely, no discussion; at least there was no dissent.
Thus, prior to conference all banks but S.F., Atlanta, Kan.City, +
Minneapolis were fully advised + apparently all approved.
Then as to (2)

June 29 I appeared before Bd + protested against coercive aspect of
Reg. J. + sent written memo to James + Platt giving outline of my views.
Sometime in July I went to Wash + talked with James; also got Peple
up and found him friendly to my view of stopping attacking the non par banks and
spending our energies on helping the par banks. 'Wrote James letter embodying these
views.
Got him to ask each F.R.Bk. to report on C.H.charges in their districts with
view to getting excessive C.H.charges reduced with respect to par checks.

I talked with Case + our directors regarding my general idea +
helped to convert Case against Reg. J. He succeeded in getting the Gov's Adv. Com.
to reverse itself + recommend suspension.
Aug. 8 got J.L.Morris to write to Credit men resigning from their
Banking committee because of aggressive nature of their anticipated activities
regarding par matters.

Talked with Warburg about getting Fed. Adv. Council to recommend
against Regulation J.
Wrote Par Memo (which I sent you in Colo) which advises against
aggresive action.
Wrote credit men's pamphlet which is not only not aggressive but asys
nothing against non-par banks.

-P

Have advised with Orr + Tregoe frequently + have finally converted
them against their program of aiming at "Universal Par Clearance", and in favor of
trying to preserve what they have by getting business to recognize par checks. Have
attended several meetings of business men called by them to explain F.R. attitude
+ to ascertain the reactions of business to the plan. These are uniformly favorable
but they want to be more aggre ssive than the plan intends. I have constantly pointed
out to Orr + Tregoe that there should be nothing in the plan contrary to the continued
o acceptance of non-par checks by business houses which now accept them; and have written
m
In other words, to make the plan
ri or revised their form letters with this end in view.
4 pro-par but not antt-ion par.
-p

The plan is now about to go out to the 30,000 members of the credit men +
P my activities are about at an end, I am glad, for many reasons, to say. But I am quite
E)
8.8 sure they will make a good story if ever reviewed, + one that will be creditable.This
week I'll get them up in form, with supporting evidence, of which there's more than I
thought when :you first :mentioned your all4PrAilqnsions.

Excuse so long a

http://fraser.stlouisfed.org/
rest a possible Yrs.[signed]
Federal Reserve Bank of St. Louis

long nand7reuuer. But I want to set your mind at much at

Form 1204
CLASS OF SERVICE SYMBOL

CLASS OF SERVICE SYMBOL

Tdegram

Telegram

' tter

'

,age
N.5..

_after

Blue

Day Letter

Nite

Night Message

NL

If none of these three symbols

symbol appearing after the check.

RECEIVED AT

NEWCOMB CARLTON, PRESIDENT

GEORGE W. E. ATKINS, FIRST VICE-PRESIDENT

iviUjÔ(jr AL11JI




Nits

NL
If none of these three symbols
Night Letter

appears after the check (number of
words) this is a telegram. Otherwise its character is indicated by the

Blue

..0

P

47

CK TH,

16 1

AVE IAEA' 0 RK N Y

ILL

SEE YOU'AT H ST
THERE

AS

ETTER TO

I

appears after the check number of
words) this is a telegram. Otherwise its character is indicated by the
symbol appearing after the check.

February ?5, 19P1

Dear Mr. Jay:

was distressed to learn of your illness. I have kept
in touch with how you were getting along, through Mr. Morgan, and

hope when you get back, that you do nut run any risk:, by coming to

the office if the weather le had, or if you do not feel first-rate.
Please take advice.
The attached is a meirv,randum 'which explains itself and

on which I am anxious to have your views, when 1 get back from

Washington, where I as proceeding to-day to try and pave thc, way

for our building oceration.
Sincerely youre,

1-ierre Jay, Esq.,
49 Easi-e4th St.,
New York, N.
En c.
BS:W}V




Y.

WWI

41111111411

A COPY OP THE FOLDOWIEG LETTER' WAS SEM TO EACH OF THE ITTAC ILL LIST




or

21.

June 21, 1921.

Dear 3ir:

This letter will be presen led to you by my friend and

associate, Mr. Pierre Jay, corcerning whose visit to

.

I

am writing by separate letter.

I feel very sure that you will find pleasure in having
a chat with Mr. Jay, and he is looking forward to the pleasure of
meeting you during his stay in

have not hesitated to assure him that he will receive
rdlal welcome from my friends in Antwerp.

Assuring you in anticipation of n7 appreciation .of any
courtesy you may show Mr. Jay, I beg to remain,

Faithfully yours,

A CCPT QF TME.ATTACNED LETTER WAS SENT TO EACH OF TEM FOLLOW.M.

liaLemjamm=nasai_of:L Intmluction
I beg to enclose copy of a note of introduction which I am giving
to my friend and associate, Mr. Pierre Jay, who is sailing for Europe on the
Celtic on Saturday of this week.

As you are doubtless aware, Mr. Jay

Directors of

the Federal Reserve Bank of New

is

Chairman of the Board of

York and holds the position of

Federal Reserve Agent.
While his trip to Europe is primarily for pleasure, and he will be
accompanied by members of his family, he will, I hope, take the opportunity,
if time affords, to oall upon you.

Ur. Jay and I were associated originally in Us organization of
this bank and in its management.

We have in fact had a close

I esteem him one of the best in-

ever since that association was formed.

formed and soundest men in the councils of
American bankers.

a chat with

partnership

the system, and, generally, of the

You will, I am sure, appreciate the

opportunity of having

him, and I will greatly appreciate anything you are able to do

to make his visit an agreeable and profitable one.




With kindest regards and best

wishes, I beg to

Faithfully yours,

remain,

A COPY OF THE ATTACHED LETTER 17.71.3 SENT TO EACH OP THE FOLLOWING:

Sir Robert Y. Kindersley,
Lazard Brothers and Company,
40 Threadneedle Street,
London, England.

Dr. G. Vissering,
Nederlandsche Bank,
Amsterdar, Holland.

Gaspard Farrer, Esq.,
Baring Brother & Co. Limited,
8 Bishopsgate,
London, England.

Monsieur L. Van der Rest,
Banque rationale de Belgique,
Brussels, Belgium.

Hartley Withers, Esq,,
The Economist,
3 Arundel Street,
London, England.

Monsieur Albert E. Janssen,
Banque Nationale de Belgique,
Brussels, Belgium.

Sir R.

V. Vassar-Smith,

Lloyds BPInk Limited,

Monsieur Ed. Bunco,
Antwerp, Belgium.

71 Lombard Street,
London, England.
Henry Bell,Esq.,
Lloyds Bank Limited,
71 Lombard Street,
London, England.

Arthur W. Kiddy, Esq.,
Morning Post,
168-170 Palmerston House,.
Old Broad Street,
London,

Monsieur C. E. Terkeulen,
Hope and Company,
579 Keizersgracht,
Amsterdam, Holland.
The Right Honorable Reginald McKenna,
London Joint City and Midland Bank, 'Au.,
5 Threadneedle Street,
London, England.

England.

Sir Brien Cokayne,
Cokayne Bros. & Company,
London, England.

Captain

Robert Masson,
Credit Lyonnais,
19 Boulevard des Italiens,
Paris, France.

Monsieur Joseph Simon,
Societe Generale Pour Favoriser Le Deve/oppment
du Owl-farce et de L'Industrieen France,
29 Boulevard Haussmann,
Paris, France.
Monsieur Georges Robineau,
Bank of France,
Paris, France.
Monsieur Maurice Lewandawski,
Comptoir National d'Escompte de Paris,
14 Rue Bergere,
Paris, France.



FEDERAL RESERVE BANK
OF NEW YORK
June 22, 1921.
To

Mr. Jay

From Governor Strong
I shall return from Atlantic City probably on Friday and call you

on the

telephone on arrival, although I may not see you if I don't come down to the bank,
as I am likely to go right out of town.

Of course, you do not need to have me deliver my good wishes in person you know that you have them anyway, and I sincerely hope that you have a grand trip.
A few general words about the people you are going to see.
without hesitation to Mr. Norman, and without reserve.

First, talk

I would a little prefer

your not stating definitely that you read all of his letters to me, although I
gather that he will assume that to be the case.

I think that all of the letters

of introduction you should send in advance with a note asking for an appointment.
As to the various people addressed:
Henry Bell.

head, of Lloyds Bank.

He is the active head

and Sir Vassar-Smith the titular

Henry Bell is one of the best bankers in London, was a

delegate to the Brussels Conference of 1920, and is rather pessimistic about
European affairs.

He has recently become infected with the idea of government

insurance against political risks involved in selling goods in Central Europe.
Sir Robert M. Kindersley.

He is a director in the Bank of England,

He is the head of the War

a close friend of Norman's, and a very fine fellow.
Savings Society.
Gaspard Ferrer.

I visited him before leaving London, and got much

better acquainted with him than I had in former years.
at the bank
Lord Revelstokemwhere he is one of the directors.
men in London.




You will meet his partner,

Farrer is one of the soundest

rf
Mr. Jay

#2

Hartley Withers.
to see him.

June 22, 1921.

He needs no description.

I hope you are able

He is an exceedingly busy fellow, but can generally arrange to lunch

with an American visitor.
Sir R. V. Vassar-Smith.
as a matter of courtesy.

I have given you this letter more especially

He is an old friend of mine, and a very charming man.

But you should take particular pains to see Mr. Bell.

As you know, he succeeded

Lord St. Albans as head of Lloyds Bank.
Monsieur Joseph Simon.

He was one of the French representatives in

financial matters in Washington and New York during the war; was made head of the
Societe Generale on his return, and has made a splendid record in putting that institution on its feet.

You will find him a good sound fellow, and he speaks fair

English.

Sir Brien Cokayne.

I sincerely hope you see him.

He is one of

the "wheel-horses" in the bank.
Monsieur Maurice Lewandowski.

It was Lewandowski who came to this

country to work out the arrangement with the Bank of Commerce for the establishment
of their French institution.

He occupies a somewhat junior po

Comptoir National d'Escompte de Paris, but is 'a very active fellow, and is one of

the few men in the bank who speaks good English.
Monsieur George S Robinesvu.

Here an appointment should certainly be

made in advance, as none of the officers of the Bank of France speaks English, but
-

they have a very good interpreter there.

I have sent word privately to Robineau

that the arrangement we discussed, when I was in Paris, should not be pressed to
a decision at once, that times would be a little more propitious later, but that
the matter is not being overlooked.

I think it would be difficult to conclude

the arrangement with the Reserve Board just now.

Miller has been opposed to it,

and the new members of the Board are too uninformed on these matters.
I am still anxious to make an arrangement with the Bank of France along these lines,
and see no reason why they should not be encouraged to believe that later it will

be possible.


111

Mr. Jay

#8

June 22, 1921.

Monsieur Jean Parmentier speaks English well.

He succeeded my

old friend Celier in the Treasury, and his office is in the office of the Minister
of Finance.

It is difficult to find a better fellow.

a good man from the hotel with you unless you

It might

can rely on your French.

I do not

know Farmentier very well but Morgan's people do, and if you feel that it is desirable, it would be easy to arrange an appointment with Mr. Harjes, of MorganHarjes & Company.
Captain Masson.

He is an old friend who visited me in Colorado.

I have known him for many years and regard him as one of the ablest men in the
Credit Lyonnais.

He has a very important position and speaks English perfectly.

Arthur W. Kiddy.

It would be well to ask Norman about arrange-

ments to have a chat with Kiddy.

He is as reliable as any new

ent in London, and an exceedingly nice fellow.
Reginald McKenna.

If you see him, won't you give him my regards,

as of course to all of the others to

whom I am giving you

letters, but especially

to McKenna, as he may feel that our last visit had a little sting in it.

He is

very aggressive and rather bulldozing, but exceedingly well informed and a very
interesting man, and filled with good sense.
Monsieur L. Van der Rest.

An old gentleman, is not very active in

the bank just now, Janssen and the juniors carrying most of the load.

Speaks

very little English and cannot understand it, but Janssen speaks English perfectly.
Dr. G. Vissering is an exceedingly able and well informed man, who
in recent yearshas gotten to be a little over-developed on the theoretical side,
and likes to see his name in print a good deal.

Some of his utterances, particular-

ly at the Brussels Conference, were uninteresting and prosaic to the limit, and I
think rather unsound; - I find others agree with me.
most important men in Holland, although not very popular there.




He is con

Mr. Jay

#4

C. E. Ter Meulen.

June 22, 1921.

He is the last surviving partner in the old

firm of Hope & Company, a bachelor, speaks English perfectly, a man of great
opinion, both in banking and financial matters pertaining to the Dutch Government.
You

will like him very much.
Ed Runge.

I hope you have a chance to see him.

I have

only

met Mr. Bunge once or twice while in Holland,

but he was for many years a resident of New York, speaks English perfectly, and
is filled with ideas and inforration.

He is a typical old Flemish merchant.

I

fear, however, that he has gone astray a-bit on inflationary schemes.
Albert E. Janssen.

You met Janssen when he was in New York, and

will undoubtedly see him at the bank if you will call there at all while in
Belgium.

I believe ordinarly be was trained as an economist and teacher, and

that he still lectures in the University of Louvain.

Let me know if you need any more letters.

Mr. Kenzel suggests the importance of stopping at the Amsterdam office
of De Javasche Bank, as suggested by Mr. Zeilinger when he was here.




July 11, 1921.

Dear Pierre:

had hoped to ex-it° you before this giving such news as has developed
since you sailed over two weeks ago, but I have been commuting back and forth to
Washington and have had two week ends out of town, so have been rather busy keeping up with my regular mail.

The most important development possibly has been the continued, and even
more exaggerated nervousness over banking conditions in New York until the early
part of last week when distinct signs of subsidence developed, and now I think we
can say that the worst is behind us, unless we have some developments to revive
the talk and uncertainty.
The cattle loan arrangement which was discussed before you left, was
finally completed last week, and I believe loans have been made.
It will be
handled exactly as I laid out, the loan papers being lodged with the Federal
Reserve Beak of Chicago, and arrangements made by which they shall not leave the
custody of that bank, but can neverthelest be ueed for rediscount by such participants as may require accommodation.
We are
The next victim for similar treatment will be old king cotton.
now discussing plane for a cotton pool, with New York, as usual, called upon to
provide the major part of the funds, but it is too early yet to say whether such
a loan can be arranged here.
Our reserve is running between 65 and 70%, and repayments have been pretty general by all the large borrowers.
banks borrowings got down very close to $400 millions,
60
there is no

credit if ee can only freme ue e cotton loan so that it will appeal to the New
York bankers as safe and convince them that it is needed.

Morgan, and possibly Mr. Alexander and one other banieliill

I am hopeful that Mr.
handle the matter for U6.

Last eeek I finally had opportunity for a fine talk

with

Secretary Weeks

th regard to Governor Harding's position in future, and especially the attitude

of the Administration towards him and his work.
the Presidentat once and endeavor to arrange for

He promised to

have a talk with

the President to send for
'Harding, and at that meeting to develop an accord. I have tipped off Harding of

what eight happen, and think that he is feeling very much happier even at the
prospect. Weeks said at once that for us to lose Harding would be a national
calamity, that he could not think of seeing any such thing happen. He regarded him
ite the driving force of the whole system and a great asset; in fact, the matter

was left exactly as you hoped it sight be.

A cable reached me to-day that Norman and Addis will

be here during

a part.of August, and I am hoping to be able to take a week off so as to have a
nice Visit with them. Norman suggests Bar Harbor, about which I am not particularly eathUsiastic, but I am certain that. he will wish to be there a part of the time
to starwith some old friends.



July 11, 1921

#2

Money is dietinctly easing, short treasury certificates are at about 5%,
long ones at about 5 1/0, the three-year notes selling at a premium, bankers

bills 5 3/8%, stock exchange call loans varying between 5% minimum and 8% maximum,

with a reasonable average at, say, 5 1/2%, and commercial paper reaching C 1/4 to
8 3/4%.

The pressure for reducing rates seems to have disappeared in Washington,
but is somewhat in evidence here in New York. My inclination is to do nothing at
the moment, but if commercial paper rates move down another 1/.4 or 112 of 1%, I
might then be inclined to recommend a reduction to 5 1/2%. Much depends, however,

upon the success of the Treasury in distributing their regular borrowings. Up to
the moment they have been so completely successful, that I think the day is coming
when we can risk coming don another 1/2 of 1%.

I had a talk uith Mellon about the two pending changes in officers'
salaries, and he seams to be in accord. I hope they will be approved.

There is no news in building matters, except a further reduction in cement
prices, of which we get the benefit, and indications of further reductions in labor
costs here and there. I saw Seay last week in Washington, and learned from him
that in some parts of hiE district they have very eerioue conditions, and it may be
a number of years before they are able to get the banks bank into anything like
sound shape. This applies to the Carolinas especially. I nuppoce there may be
25 to 50 banks there etich will be closed; some of them canr,Ii6et their checks, but
by one expedient or another they have been kept going. Seay thinks that the
situation is really improving, but that the improvement will not be substantial
until the new crop is made. he says ttere is a very large amount of hoarding of

currency in the district.

The thing vhich is most worrying sore ef our Nev York banking friends

just now is tha perplexing pitnation in sugar, and Cuban affairs generally. It
will take some courage and quite a lot of money to get the Cuban situation straightened out but I an glad to say thrt our State Department seems prepared to do everything needful. The routine work of the bank in not very heavy. Things are
Quiet, and I Aetice that the boys are getting klmy earlier, which is a good sign.
We have been suffering for the last week or ten days, however, with some most depressing and very hot weather, and Washington, when I wes there
literally a furnace.

last week, ras

I am enclosing our last statement, and as asking Mr. Morgan to put in
any matter which he feels may be cf interest to you.

Pleave give my warmest regards to my friends in London, particularly at
the bank, and my best to you and Mrs. Jay, end the daughters as well.

Pierre Jay, Esq.,
c/b Meesrs. Morgan,
22 Old Broad St.,
London, England.

http://fraser.stlouisfed.org/
BS:MM
Federal Reserve Bank of St. Louis

Yours sincerely.

Grenfell & Co.,

MISC. 34.1-50M-7-20

FEDERAL RESERVE BANK
OF NEW YORK

Cable tra

1

TO BE MAILED

CONFIRMATION OF TELEGRAM
WE HAVE TODAY TELEGRAPHED YOU AS FOLLOWS:

August 24, 1921

Pismo Jay
Grand Hotel

Venice

Strong in eashington advises Mellon denies reort Treasury consiOering
&tents conference begins
exchange statilization conference to

October twenty fifth etop

Moraan racnes London about $eptember twentieth
MARRISON

Charge federal Reserve bank of Ae* Tort,
Aow icrk City.
15 Nassau



MISC. 34.1-50M-7-20

FEDERAL RESERVE BANK

TO BE MAILED

OF NEW YORK

CONFIRMATION OF T-E6E-GRAM
WE HAVE TODAY TELEGRAPHED YOU AS FOLLOWS:

Ausuet 24, 1921

Pierro Jly
Grand Hotel

Venioe

Strong in lashindton advises Mellon denies mart Treasury considering
Agents conference begins
xasage stabilization conference fAoi,

October twenty fifth

to

Noralan reacnes London about September twentieth
KAAISON

Charge Federal Reserve Eank of Mow York,
15 Nassau ;:tre,..A., Now iork City.




August 29, 1921.

Dear Pierre:

I wieh it Lad been possible for we to write you fully ,and freuently,

but it has been literally out of the iuestion on account of the pressure of a
multitude of things to do, ;largely on ...ccount of the hearings in Washington
and somewhat becauee of our visit from Norman & Addis.

but still further be-

cause 1 neve been pretty tired and have skimped on my work :As much as possible.

I no* have your letter of August 11 and two cables from Italy tout

your plane, to whicn 1 am sending b. cable reply to-day stating definitely that
Governor Harding approves of your remaining until the mile of October.

He

is most anxious tnut you should be here for the conference October 25, anu, as
t)robubly

!s.

week should be re:iuired to get h:OCilikate(4 and get the programme in

your mind, I should judge that if you are back by the middle of October you
would have no more than enbugh time to cover the ground.

The situation in regard to Austria is, briefly and very confidentially,
as follows:
Their finances are going from bad to worse. The plan considered lust

May was defeated, first, because France was hanging out with political consider-

ations in mind to some extent, and, second, because the officers of our Government hud no power to subordinate the claim of the grain corporation or any other

claims to new credits.

This situation will continue until Congrese passes a

bill now pending giving the Secretary of the Treasury full powers. There is

opposition to the bill and it may not pass for some months.
I would be sorry to have ,=,venol come over until better progress had been

made along lines that we art now diecuasing, to which I will refer later.

In the

first place, as you say, he represents the League and k, more political view of
Austria and diddle Zuropean affairs than would be desir his in discussing tdie



s/E9/ki.

Pierre Jay, Esq.,

matter pith our friends in Washington. In the second place no one is at-yet
prepared or any diecussions, and this latter objection reletee es well to the

euetrian repreaentetive whom I La informed is now on hie wtki over here.

If he

arrives we will endeavor to keep him busy in getting informetion from him until

we know juet what is to transpire.
Pa to plans, Norman, Addis and I have had a number of meetings with

various members of the cabinet and with the president for the, purpose of diseuesing, among other thins, some arrangement by ehich the eUstrien and Middle

Luropean eituetion can be dealt with strictly along economic rather than polit-

ical lines and more under the tutelage of the principal backs of i6Elle, including the Federal Reserve Bank of hew York.

This very indefinite suggestion was

considered at a cebinet,. meeting last week, the ground for coneideretion being

the protection of our export trade.

What we proposed, ulthoughtmost general

in scope, was favorably received, and kr. Hoover- is now engeeed in preparing a
memorandum indicating the attitude of the Administretion.

Alatever es do or

consider will be wholly unofficial and in the first place only by tiu.y of investigation without eommitment.

Later on, if some plan cen be evolved it will

then be considered rather as u banking matter than es 4 political matter.
have not one into details, and Norman eiil be in London by the 18th or 20th

and you hill

e two or three eeeka for e full discussion eith him and oppor-

tunity, I hope, for a, similar discussion with Vissering who 1.8 equally *ell
posted.

I hope before you return you will have an opportunity to meet Menet.

He is one of the League of Nations organieation, representing France, but is O.
very unusual man with a world point of view rather than e strictly French

political point of view.

So much for eustrie,

As to the inveetigetion, I shall only eay that Morgan ec Harrison, one

or both, were to erite you fully. I was too ewheusted to attempt a letter, and
if they have ,ritten you, take SOAO of their enthusiastic statements about my




a

//'
P. Jay, Esq.,

-3-,

8/29/21.

owa performance with 4 grain of salt. I do think, however, that we completely

got away with it, and the only thing no left to be done la to take u fe. more
patches off of John Skelton ';:illiums by introducing some ,ritten st,tements
into Lhe record v,hich ure now being studied and will shortly be prepared.

The

reeord will be printed very shortly und I will GOO that a copy is mailed you.
I do hope you have had h splendid trip.

Don't count on me for further

letters for u time as I shall be exceedingly busy and possibly go_te Bur Harbor
for u short visit with Norman and 44dis.

?lease give my best regards to the family and the same to yourself,

and especially consider the contents of this letter as strictly confidential.
Sincerely yours,

r.erre Juy, Esq.,
C/0 Morgan, Hal-Jae & Co.,

Paris, France.
BS/RAH




FEDERAL RESERVE BANK
OF NEW YORK

September 15, 1921.

Dear Pierre:

My remissness in writing - nothing unusual, I fear - has really been
due to absence from the office first, and later to a great accumulation of work,
which made it difficult for me to write such a decent letter as you were entitled to receive.
The Congressional Investigation:
The have concluded the main statement for the Commission, which was not
a direct reply to Williams.
It is being printed, and I am told is in good
shape.
Harrison or Shepard Morgan wrote you fully on the subject.
We are
now engaged in preparing a plan for dealing with agricultural credits, which I
shall not enlarge upon, but will send you a copy when it is ready.
We are also
preparing detailed replies to Williams' charges, which we do not propose to submit verbally as in the case of the first hearings, but will submit to the
Commission in writing with sufficient copies for them to study and then appear
simply to answer questions.
I have no feeling of concern about the Commission's
report 80 far as it relates to this bank.
There may be some criticism of the
Reserve Board, and possibly of some of the interior reserve banks, but even that
I think is uncertain and is not likely to be severe if it does appear.
We are
obliged to give the best picture we can of the management of this institution,
and rely upon the other reserve banks to do the same, and, of course, upon the
Reserve Board's making their own statement. Unfortunately, for some reason only
Miller of Kansas City and the assistant federal reserve agent of Minneapolis
appeared before the Commission, and while Miller made a very good statement so
far as I could judge, I think in view of the criticism of the System as a whole,
it was a great mistake that the other reserve banks did not appear and do just
as we did.
Somebody lacked imagination, or else lacked courage which is worse.
The Banking Situation:
Things are really improving.
Case and I have just made a sort of unofficial report following a very careful examinationof certain of the assets of
one of our largest members which has been criticised, appearing for the purpose
before a meeting of the executive committee and a few of the directors of the
board of that institution.
The effect of it has been salutary, and I think will
go a long ways toward quieting so much of the criticism and disturbed mental
condition still existing.
I shall not send particulars for obvious reasons.
The Affairs of the Bank:

Morgan is just
Vacations have kept quite a few of our officers away.
now away because of a little upset, which I gather is not at all serious.
Things have been very quiet at the office and the pressure that has been chronic
here for so long seems to be behind. us.



Pierre Jay, Esq.

#2

ct

September 15, 1921

01111S

Our Condition:

Enclosed is a copy of the usual weekly statement, which will indicate
the extent of the liquidation.
This is reflected in further easing of money
rates and the tremendous success opPw.the-rsumuetwer of the current offering of

Treasury obligations, which is a combined issue of three-year 5 1/2% notes, oneyear 5 1/4% certificates and six }menthe 5% certificates.
Our subscriptions are
$620 millions against a quota- of $220 millions, or $30 millions exclusive of the
Japanese renewal subscription of about t40 millions. I think it is likely that
the total subscription combined will exceed $1,200 millions, and may reach
$1,500 millions for the whole country.
This indicates the way money is easing
up.
New issues of bonds are selling like hot cakes, and there seems a very
urgent demand for high grade investment securities.
Cotton:

The government crop report, indicating the crop at about 7 1/4 million
bales sent both futures and spot sky high.
Everybody at once became convinced
that there would be a real cotton shortage, and spot cotton to-day is selling
for 20 cents.
It has put a quietus On the agitator in the South.
Buildj.pg:

We are making fine progress.
Thirteen caissons are on their way to
rock, one of them within a few feet of the bottom.
Conditions appear to be just
about as anticipated, and the work is only a few days behind the schedule, and
will be up to schedule in a week or two.
We let the steel conNTact yesterday
to Post & McCord at about $69 a ton.
The saving in price iAeAain structural
changes, which eliminates material, represents a total saving over the March
estimate of $780,000.
The work seems to be so well organized that it is not
taking very much time, and I feel more certain than ever that our whole program
was a sound and advisable one.

Now a few words as to the delightful visit that we had from Norman and
Addis.
They will tell you just what we did so I shall not repeat.
The result
of their visit, however, was to establish in the minds of our own officers and
directors here, as well as in the Reserve Board and some of the officers of our
government, a very much better .understanding of the present situation abroad than
has heretofore prevailed.
I think it brought the Bank of England and this bank,
and the System generally, closer together more effectively than by any other means
that could have been adopted.
I have three general thoughts in mind in connection with their visit:

That we must aggressively pursue the policy of bringing about better
understandings between the banks of issue than has heretofore been possible.
We must begin to consider among ourselves some means of studying
and understanding the foreign exchange problem better than it is now understood.
I do not mean by this suggestion that we will be capable of correcting the present
unfortunate situation, which may indeed be well beyond the power of any one or any
group of institutions or governments to correct, but OD the other hand we may be
able to prevent some foolish things being attempted which might have disastrous
results.




#3

Pierre Jay, Esq.

Sep ember lb, 1921

(5) Some of us have become convinced, as the result of our discussions,
that bankers, possibly under the leadership cf the banks of issue, must undertake some non-political program of assistance to middle Europe in order to avoid
a complete collapse, financially and economically, and a serious setback in the
world's trade and general development.

As to this last, I thought we had concluded an understanding with the
Cabinet, which would be expressed in a letter to me, that would enable us to join
with others in carrying on a study of the situation in Austria and the adjoining
I have just received word, however, that there is a hitch somewhere
countries.
in Washington, and cannot tell exactly what has happened until I go over there
I think it possibly originates more on the political than on the
next Monday.
After reading this
economical side of our government, but this is surmise.
letter, will you not say to Norman that while I cannot count at the present time
upon the receipt of a letter such as was contemplated, I still have hopes of
laying the foundation for a program of some such character as we discussed, and
If you
I hope sufficiently soon, to cable you fully about it before you sail.
do not hear from me, you will understand that delays have been unavoidable.
This letter has been delayed a few days in dictation, quite unavoidably,
but not too late for me to suggest to you the desirability of seeing Dr. Vissering
if you can spare the time, and if it should just so happen that Norman could go
with you, and that you would also be able to have a talk with Dr. Havenstein of the
Should you have a
It might proove most enlightening and helpful.
Reichabank.
talk with Havenstein, please be sure and urge him to give you the very best
opinion that he can on the subject of the foreign exchanges, Germany's official
attitude toward the position of the mark and the general bearing of reparation
We shouldknow a little more about
payments upon the future value of the mark.
I wish I had time to write you fully my own views
the speculation in marks.
about the reparation situation, but in a word, they are as follows;
I believe that in order to make the first payment of one billion marks,
as the
the German Government exhausted all the foreigr currencies available
result cf the German trade which has so far developed, all the foreign currencis
which could be acquistul through the normal operation of the exchange market, if
you pleaserivut-they exhauste6 their borrowing possibilities among the bankers of
tin other words, they anticipated future sources of supply of
friendly nations.
foreign currencies by borrowing for short oerioda for the repayment of which loans,
And even with all that,
future supplies of exchange must be applied for a time.
it was still necessary for the Reichebank to part with some 13 million dollars in
Roughly expressed, it strikes me that
gold in order to meet the first payment.
they exhausted all accumulated exchange, exhausted possibilities of short banking
credits, anticipated future supplies of exchange, and even dipped into their gold
reserves in order to make the first payment, so that the next payment seems to me
almost impossible.
If
If this is the case, matters might reach a crises before next May.
it is not the case, it will be because speculators in Germany have accumulated
supplies of exchange to enormous totals that can be made available only at higher
prices than Germany has already been paying for those currencies which she has
been able to acquire.

My thought about the future is that reparation payments should be
largely made in kind, especially in raw materials, such as coal, lumber, pot ash,
sugar, &c., &c., and that the payments which must be made in cash should be




September 15, 1921.

#4

regulated in amount by careful consideration of the normal production of exchange by German trade in excess of that amount which is required for the purchase
of raw materials, in order to enable her industrial population to keep employed.
This is hardly more than a. surmise, or suggestion, but if there is anything in it, the method of dealing with reparation payments should be altogether
changed, and one essential.kequirement would be, on the one hand, a study of the
trade situation in Germany by an impartial organization representing the Allied
nations, and on the other hand, a greater degree of control of the trade, at
least of the exchange which the trade froduces, by the German Government than now
exists, so as to get the speculators off of the back of the German Government.

I realize that this is not a well thought out suggestion; it is passed
on to you very hastily and sketchily, merely to give you something to think about
in connection with any conversations you might have with Havenstein or Vissering.
I shall be intensely interested in the result of your visits and discussions.
Let me suggest that if you can locate a good stenographer that is thoroughly
reliable, and no doubt Norman can supply you with one, it would be a good scheme
to take off an hour every day and write it down, as I should have done during my
visits abroad but never have done much to my regret.
I hope that you are having a bully trip and feel well repaid for staying
over a few weeks longer.
With best regards from all at the office,
Yours sincerely,

.

Pierre Jay, Esq.,
ojo Messrs. Morgan, Harjes & Co.,
Paris, France.

Enc.




FEDERAL RESERVE SANK
OF NEW YORK

MISC. 4.1-120 M-1-20

0 r ICE CORRESPONDENCE
To

Mr. Jay

FROM

DATE

Nov. 18, i21

Governor Strong

SUBJECT.

I think I have sent you all of the correspondence and cables
exchanged with Norman since your return, excepting possibly a few that
came while I was in Washington and were forwarded to me there.

file is with this letter.

Will you please make sure that no one sees

it excepting yourself.
F-7
BS:MM

Enc.




The

i921

192

RAL- RESERVE BANK
NEW YORK

MISC. 4.1-120 M-1-20

PON

OF-VICE
To

nd Harrison

Messrs. Jay.

Governor S
FROM

DATE

you mould read it, and pass

SUBJECT:

it back

Zandt is very

Enc.




confidential.

to me, and have in

to find a good position for Van Zandt if anything

13S.MM

192

ong

The attached letter from Van

him.

Jan. 70, 19??

I -wish that

mind that I mould like

turns up mhich is suitable for

FEOERAlt,
OF OW VO

MISC. 4. 1120 M-1-20

)FFICE CORRESPONDENCE
r. Jay

To
FROM

DATE

Feb_

1097

192_

1--

SUBJECT.

Governor Strong

Referring to the attached chart, I agree with you that there is no likelihood of a. recurrence of such peaks in the curve as shown.

On the other hand, that

curve represents the course of prices throughout a period !filen we had a rigid, in-

flexible currency system, except to the extent that money
Congress.

No one I think Olin deny that

VI

as freely printed by

ere s e so foolish as to encourage credit

expansion by unlimited lending of money we could bring -about another peak in the
curve similar to the other three.
of degree, or extent to

All that I am thinking about is the question

,thic1-2 we may contribute to some such development, and es-

pecially of our responsibility to be forehanded and far sighted enough to a.nticipate
coming events and to move quickly enough in changing our rates.
BS.MM
att.



Ovi,(44.04, ?Atia--e-0
U.C. 4

fr4 -/f

MIS

ROOM

°

F'EDERAL.FeESERVE BANK
OF NEW YORK

Feb. 23, 1922

ICE CORRESPONDENCE
Mr. Jay

UINJECT:

Governor Strong
PPt0,1

I have just finished reading the attached letter which Mr. Snyder

has drafted for Mr. Nallace of "Ullace's Farmer," who, as I understand, is
a twutinw of the present Secretary of Agriculture.

Please recall that

Mallacs's Farmer has consistently attacked the Federal Reserve System, and
especially the Federal Reserve Eoard, and that Secretary iallace has disclaimed
any control of the editorial policy of the

publication.

Mr. Snyder's letter impresses me as excellent, but from my point of
view

deficient in

4100. one pe440504mlew, that is, that we do know of wide-

spread distress among farmers in certain sections of the country, we do know

that on the averagethe income of the farmer is deplorably small at the present
time, and I think we have further
progress can be arrived at

4

lammed

that better understandings and better

a somewhat more sympathetic attitude towards

this problem than characterizes Mr. Snyder's draft.
If you feel that the letter should go
sociated from the New York Reserve Bank, and

it should certainly be dis-

possibly some

thought given to

the changes which I have indicated, end others which I have not referred to in
detail.

att.




LBS.161

.

fli..._\.114110,JJ,...,1-1:3141011E11111




FEDERAL RESERVE BOARD
WAS
May 8, 1922

Dear Jay:

The enclosed is a pencil draft of a cable Which
Norman would like to have sent_as promptly as possible
and which explains itself. -1-will try to get you by
telephone this afternowfi; give further details. Will
you have the cable pu'in code and sent in the customary
form, so they wil,VUnderstand that it is from Norman'?
As it is subje 'to the rules for handling these confidential cab s, possibly you might hand it to Mr. Beyers
ent.
for arrVery truly yours,

Mr. Pierre Jay, Federal Reserve Agent,
Federal Reserve Bank,
New York, Y. Y.

ROSTAL TELEG APH -,COMMERCIAL CABLE

TELEGRAM

RECEIVED AT

DELIVERY NO.

This i s a feet Tete, -.2 unieeeatherreireindieated be stone:after the number of worcle:-..Blue"(Day Letter)N.L."(NightLetter)or"Nite"(Night Telegram
STANDARD TIME INDICATED ON THIS MESSAGE.
-4

R102RE1210A 22 NL
''ASHN DC MAY 8
GEORGE BEYER

FEDERAL RESERVE BANK,

TELL MISS HOLMES NOT TO
LETTER OF TODAY TO MR
FROM ME

BENJ STRO




S

J

i

NASSAU ST NYC

CABLE ENCLOSED IN MY

UNTIL.SHE HEARS FURTHER

Form 16

FEDERAL RESERVE BANK
'
OF NEW YORK

MISC. 1.1.90M 10-21

CP-710E CORRESPONDENCE
Mr. Jay

To

DATE

July 10, 19??

SUBJECT:

Governor Strong

FROM

Please read this first draft of a letter to Dr. Miller, in reply

to his of July 6, and let me knot how it strikes you.
really belongs

if anything?

ES. MM

att.




on your desk, but the question

no

is

This whole subject
ghat shall we do about _

192_

CLASS OF SERVICE SYMBOL
1

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Blue

Night Message

Night Letter
NL
If nono,of these three symbols

4.01..x. after the check (number of
words) tip, is a telegram. Otherwise its character Is indicated by the
symbol appearing after the check.

WESTEj., UNION
11c:;40!
T E ,tir AM
PM 5

08

NE1NCOMB CARLTON, PRESIDENT

WESTER UNION

GEORGE W. E. ATKINS, FIRST VICE-PRESIDENT

CLASS OF SERVICE SYMBOL
Telegram

Day Letter

Blue

Night Message

Nite

NL
If none of these three symbols
Night Letter

appears after the check number of
words) this is a telegram. Otherwise its character is indicated by the
symbol appearing after the check.

RECEIVED AT COTTON EXCHANGE BUILDING, NEW YORK

250A N CBH 16
W INT ERPARK FLU 440P FEB
PIERRE %JAY

2 13

SS5
FEDERAL RESERVE BANK NEWYOHK NY

Aft L LETT ER CARE BESOT 0 HOTEL

THANK CASE FOR HIS TWO




SAVANNAH SHALL BE THERE MONDAY

WIRES

BEM., STRONG

456P




x

CLASS OF SERVICE SYMBOL

l e'
Day

UNIUN

n

a

Nicht Message

Blue

Nite (I

Night Letter
NL
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_
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, a telegram.
Otherwords) i
wise its character Is indicated by the

appea

symbol appearing after the check.

TEL

AM

GEORGE W. E. ATKINS, FIRST VICE-PRESIDENT

NEWCOMB CARLTON. PRESIDENT

Day Letter

glue

Night Message

WESTERN UNION

NEW YORE

Telegram

Nile

NL
If none of these three symbols
Night Letter

appears after the check number of
words) this is a telegram. Otherwise its character is indicated by the
symbol appearing after the check.

RMEMALCOT11)N EXCHANGE BUILDING, NEW YORK
PINE STREET,

P I ERRE JAY

1923

V AN NA H uA 1241P FE i3

'456
EJER AL RESERVE BANK NEWYORK NY

ABSTRAeT TO ME HOTEL BONAIR

LETTER NOT ARRIVED SUGGEST WIRING
AUGUSTA WHERE




SHALL

N SI TUiT I ON AND SHALL

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ANDERBCHANGE

I

I

SPEND FE w DAYS IS THERE ANY

STOP OVER AT YdASH fiLiTON

BENJ STRONG

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(Copy of Telegram)

Colorado Spring, Col.
March 19, 1923.
Pierre Jay

Federal Reserve Bank, New York N. Y.
Yours fourteenth reply as follows.
First, read .fiy memoranium to Cass on this subject maje before
leaving.

Second, have always opposed setti%; up arbitrary
yuu

te and because further believe that

figure on grounds

To bookkeeping manipulation can

alter facts or strengthen our purpose to prevent abuses.
Third,

feel

strongly that no such addition to statement should

be made until sole sound educational work had prepLred way for it.
memo. to Morgan.

Otherwise

explanations required would be in

See my

nature of

defense a:_Laint any criticism which arises.
Fourth,

Objection to Narburg Miller

its departure from generally understood

plan which is

soundest is mainly

intention of reserve act and therefore

greater possibility of attek.
Fifth, my bectopinion is

that after way is prepared by F. R.

Board say in bulletin and by banks in monthly reviews

that suggested by

the soundest plan is

rburg Miller but if Board is unwilling to fce probable

attack and -tand firm then your proposal is next best with possibly some
refinement of language.
Sixth,

there is ample time before say Lecember to do all the edu-

cational work required if
Seventh,

pushed energetically.

Uonferenee this month is our lct

understanding and policy.




th,

wire if above is clear.
Benj. Strong

chance to gat a system

P21._




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Cragmore,

Colorado

Springs

March 26, 1923.

Dear Pierre:

This is just a. line to let you know that I am getting along 0. K.

but shall not do any mail for a week or two more until the first period of
strenuous rest is concluded.
but

lea

Had a cold for a time thet made me feel mean

about gone.

Won't you ask ;eailer to eensider whether, in view of our new type

of untried doors, etc., it may rot be wise to provide for

temporarily

and

possibly always carrying reserve suppliee of such things as currency, unissued bonds, gold, etc., on more than one level, as precaution against
double lock out.

It might save us 8 serious time.

Better read my memoranda re monkeying with the weekly statement
already on file.

I think it is poisonous and should be scotched.

will shortly think we belong at Coney Island!
tell the people what we think, do it now!

I feared I was outvoted and

People

"Marry-go-round" etc. Let's

And leave the statement alone!

outtalked on this when your letter and Cese's

arrived.

Some more lster.

Bast to 511 at the bank.
Yours,

B. S.

P. S. Wes the Senate

point of the May 1920 conference

circulated

et all?

Has anyone investigated whet is behind the row in American Cotton

lewers AsGociation (Wannamuker) and Dr. Hutchinson (or Huntington).
be



worth knowing.

Harding could

learn!

Might




(co?Y of TELEGRAM)

March 61, 1923.

Pierre Jay

Federal Reserve Bank,
New York, N.

Y.

Both Dalton and Osborne known to me by reputation and

fine fellows.

Stop.

Konit you expreuti my regrets not seeing them

and personally make sure their visit gives them maximum profit.
Benj. Strong.

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(Copy of Telegram)

April 11, 1923.

Pierre Jay
15 Nassau Street, New York, N. Y.

Your satisfactory letter seventh convinces me Chicago proposal
fully unnecessary and unwise and that we should do nothing until statement
we have in mind has been made and widely circulated.

action has chance to
would deliberately

be understood.

Stop.

Stop.

Then our

Cannot believe our people

adopt the more hazardous policy indicated
Benjamin Strong.

your letter.

Colorado Springs, Col.

Pierre Jay
Federal Reserve Bank, New York, N. Y.
Yours tivelfth personally believe you are more influenced by price

movement than by facts of our own position which is only one of many
influences affecting prices and that your proposal comes too soon.
Stop.

My views in detail are as follows

First proposal regarding

VIGO is very important because of committal involved and for reasons
you name and wish you would convey my views to Sactander Secocd our Cadiz
should follow his statement and not precede third Madrid should agree
if possible to hold back similar general Cadiz by others fourth in any
event what you and Case recommend is not now justified by total system
1 'It ik--4.,,,

's ti--i,

Ji..., AL- 4 .

ii.

thirteen anciapfstiem,sesets combined which have remained substantially
unalt

for oger a yeax and a disparity in Barcelona alone does not

ifigBEAL itEaftlek P

,4,

justify what you propose until evidence is convincing that the disparity
is causing abuses fifth Cadix in absence of this development must con-

template pressure to reduce which can be applied under fourteen just now
better than under thirteen if Ineed called for at all beyond off setting
new gold sixth a month or two of systematic reductions under fourteen
beyond what has already been accomplished will develop the situation so
that no one can justly question Cadiz when made and meantime proposals
first and second with subsequent widespread educational work will go far
to prepare the way seventh do not overlook that Barcelona disparity of

itself does no harm unless advantage is taken of it and we seem to have only
one important case of that kindwhich should be dealt with tactfully but
definitely eighth Santander should be willing to take his changes about
Barcelona Ninth I hope you delay and


http://fraser.stlouisfed.org/
copies
Federal Reserve Bank of St. Louis

my letters requested.

recommend doing so Tenth Please send

Strong.

(Copy of Telegram)

April 15, 1923.

Pierre Jay
Federal Reserve Bank, New York, N.

Y.

lours twelfth personally believe you are more influenced by
price movement than by facts of our own position which is only one of
many influences affecting prices and that your proposal comes too soon.
Stop.

Ay views in detail are as follows:
(Oriosinge4)
First, proposal regarding Vigo is very important because of

committal involved and for reasons you name and wish you would convey
(Mellon)

my views to Sactander.
(rate increase)
Second, our Cadiz should follow his statement and not precede.
(F.R.Bd.)

Third, Madrid should agree if possible to hold back similar
(rate increase)
general Cadiz by others.
Fourth,

In any event what you and Case recommend is not now

justified by total system thirteen and fourteen assets combined which have
remained substantially unaltered for over a year and a disparity in
(rate or rates)
Barcelona alone does not justify what you propose until evidence is convincing that the disparity is causing abuses.
(rate ection)
Cadiz in absence of this development must contemplate
Fifth,

pressure to reduce which can be applied under fourteen just now better than
under thirteen if need called for at all beyond offsetting new gold.
Sicth,

A month or two of' systematic reductions under fourteen

beyond what has already been accomplished will develop the situation so that
(rate action)
no one can justly question Cadiz when made and meantime proposals first and
second with subsequent widespread educational work will go far to prepare the
way.




-2-

Seventh,

April 15, 1923.

(rate)
Do not overlook that Barcelona disparity of itself does

no harm unless advantage is taken of it and we seem to have only one impor-

tsnt case of that kind wlich should be dealt with tactfully but definitely.
(Mellon)

(rate)

Eighth,

Santander should be willing to take his chances abodt

Barcelona.




Ninth,

I hope you delay and recommend doing so.

Tenth,

Please send copies my letters requested.
Strong.

.

(About April 25, 1923.

Dear P. J.

I'm returning yours of the 20th to save longhand.
Frankly I think a change of rate now, with no preparation,
and no affirmative action from conference, and no increase to speak of in
our loans to members, would be little short of folly.
strongly.

Sorry to feel so

It will be so easy to get this before the country or would have

been when conference was held.

I'm going: to shoot something on my Own hook

pretty soon and take the consequences.

Gilbert must meet the market or force us up, in May.

If

banks don't distribute this issue, at once, then up go our loans, and to get
them or keep them down our rate must then go up.

I'm having an eye on this

and you will hear somehowl from out hes::e if Gilb-rt cuts too close.

him earnestly!

Warn

It's rising rates that cause Treasury difficulties, - fall-

ing rates are easyt
I can't form opinion without a. look but

I like this point Sawyer makes of a dark floor and lighter
walls, etc.
tiles."

Have a very faint but agreeable recollection of seeing "heather

This is best I can do from here - except to suggest a plain unbroken

expanse of floor would' not look well.
I agree.

Sounds good if it does not too much reduce precious light.
But one needs to see it.
Finally.
here.

This part (building) of your letteria hard to answer from

Must leave it to you.

But am sure you will get it right.

Please refresh your memory re my position on rates by reading what
I have written from here and my memorandum, etc. and letters in New York. It
seems irry clear to me, from here, what we should do!




Hurriedly,

B. S.

P. J.

-2-

P. S.

(About Apr. 25, 1923)

My separate blast about the Tribune article is for you.

They are bully fellows and I would not make them feel I was sore for anything.

But it was




d

stupid, no far es evidence I have goes.

April 30, 1923.

Dear Pierre:

"Patience" is all right, but don't forget that the word patience has
been the shield and buckler for timid and lazy souls since first the word was
invented, - and some of those are within 250 miles of New York.

For at least

eight months I have felt as though I were holding off Snyder with one hand and
my own impatience with the other.

In the fall I really became convince

a sleekening did not occur after the holiday peak, - some action w s due.
one has watched all available data more carefully than I have.
indicates the need for restraining influences.

No

Every symptom

But please have in mind that

so far as rates go we have taken the first indicated move - and our earning
assets symptom does not yet show need for another increase.

Please lay aside

some of those other matters and reason through the following and see where it
lands.
1st.

There are no surplus reserves in the country.

They are

as fast as they arise.
2nd.

If there are no surplus reserves, then increases in loans and

deposits must 80 far have been based upon gold imports, and those have already
worked their mischief.
3rd.

Yet prices and wages still go up.

4th.

So far as credit is a factor, it cannot be due to our loan and

investment account as that has varied but little.

(See figures.)

The low point

August 9, 1922, was $1,025,000,000, recent high January 3, 1923, $1,339,000,000.
Average $1,186,D00,000. Present April 18, 1925, is $1,159,000,000.

The variation

no greater than would be caused by Treasury temporary borrowing and reasonal
changes.

Thereforewe have made no contribution of credit toward price change

really for a year or so.



Even allowing for the lag - the period prior to August

-2,o.9, 1922, was one of reduction in our earning assets and still prices were rising
then due to gold imports.
5th.

If we are not expanding our loans - another rate increase, without

explanation,wou7d be a threat, and hard to justify.

All the nom:vents on our posi-

tion that I read in the outpouring of literature I get here, show that it would be
instantly misunderstood and cause greater or less uneasiness, if not alarm.
6th.

If we are not expanding our loans (and thereby bank reserves) how

is the price movement being financed?

By some of those processes that Snyder will

not give proper weight to in his phllosophy - but I won't elaborate now (will
later).

The

point

is that price advances are going on, especially in wages, and

are being financed, and our loans and investments are not increasing.
shall we do?

Why tell the country all about it!

So what

Then, after a period of real

education, put rates up if needed.
7th.

Failing early action along this line, then I say we should submit

a 6 per cent. rate as the next best and only way left in which to make our record
clear.
8th.

And those foolish political _Polka at Washington cannot or will

not see that only by timely action now will the structure be prevented toppling
over « unless indeed political pressure induce the system to finance another orgy
till after election.

If we don't finance we may have an election in a period of

unemijoyment that will make this present crowd sick - and send them home!

It

would be very likely to bring about an overhauling of the whole system - in which
I'd like to have a hand!
9th.

by Jove - for it would need and deserve it.

Also recall that there are folks who always need more convincing -

who will dissect to the bone and marrow and still want convincing - and whose

desire to get all the facts and evidence and more becomes such an obsession that
they finally become incapable of any action - they just think and talk about it.




'-3-

10th.

And finally if I were you I'd dismiss the Treasury consideration;

because if we do put our rate up as the only resort - after the financing - we
do injustice to everyone who buys the securities.

Better before than after.

But

sound education now may avoid the need for increasing for some time.

Won't you get together my various letters and memo, on this matter and
have copies made for my files.

I'm not going

to

be

caught

without a clear records

Then if our Washington friends will not make a constructive move - if they still
find one excuse after another for delay - tell the directors I favor going to 5
per cent.

It may hurt us, but also may save many a heartburn later.

be timid ourselves about making a record either.
This air - good weather - and

makes me want to arm
a lot

of dressing up.

for a frays

thankful

general uplift from good

later.

behavior

Itll write Snyder about the article

.

It needs

Take my advice and put other matters of less moment aside,

and c4mp on the trail of this affair.




We will be

Don't let's

Yours,

B. S.

Colorado Springs,
Thursday, May 3, 1925.

Dear Pierre:

Reading no end of literature, and especially the Reserve Boardts
statement, as in the New York papers, about investment policy.

I am getting

convinced that the only thing for us to do now is submit a rate increaee.

Probably they will not approve it, or if they do, most of the other banks
will do likewise.

And I regret coming to this opinion yet see no other course.

The statement was so long and so indirect that people will not know
what it is all about, and it said nothing about rate policy or prices!

rills

is the sort of situation which needs very thorough discussion and exchange of

views

but the above is my best, all things

considered.

If we do increase our rate, or apply to, we should try to get the
Board to hold up a general increase for a time;

and certainly should keep in

touch with Gilbert, but not be finally controlled by his views.,,

present

danger, as I wrote you, is to make too low a rate and cause increases in our
loans which from past and bitter experience we know will not come down without
much pressure.

Also I am concerned at the discussion in Washington which hints at

a return to the "direct action " doctrine, which has great possibility for hem!
Will you have copy of this made for my files - as of others I send
you.

The next time this subject is overhauled, it is likely to be "for blood."

And I cannot urge too strongly that you and Case and Barrows and Morgul keep
the fullest kind of records.

Memory grows dim - and my absence makes me a bit

cautious on this score, for I am more given to that than the rest of you.
My best to all at the bank.

Still doing famously.

proving daily and I still hold the record:




Yours,

B. S.

My throat im-

Colorado Springs, May 11, 1923.
Dear Pierre:

Yours of the 7th has just come.
rate situation.

Let me have your own views about the

My objection to the increase without explanation, is that 1920

shoved how easy it is to "back" this huge machine, when all it needs is to "slow
it down."

Successive increase at New York to 5% without prior period of "thought"
But the country is "thinking,"

by the public might cause alarm,- not now warranted.

it remembers 1920-1921 and that is a hopeful sign.

Also Gilbert has helped us by

4 3/4% rate - although I will not be surprised to see some heavy borrowing as de_
posits are withdrawn.

Much depends upon how fast the Victorys come in!

I have

been especially disheartened by the entire lack of leadership in the System.
The Virst National is borrowing too much and are riding us.

They know

how to ran the shop without borrowing so heavily and should be shown if they don't
play the game!

I don't agree about the rate change awaiting the financing.
the thing to avoid - seems to me.

more consideration than the banks

The investing public is entitled to as much and
are,- because they are helpless (the investors).

Where are the "written instructions" I gave on which the
got out that Tribune article.

That is just

galaxy of talent

I'd like darned well to see them!

Harding has stirred up a mess over his "happy thought" and I'm anxious we
should go slow about embarking on the venture till we know what he intends to do and
how!

If the hearings are printed do send me a copy!
Am feeling very fit.

Up for breakfast now - but "retire" again after van

bath.




My best to you and all at the office.
Sincerely
B. S.

Colorado Springs,
May 15, 1923.

Dear Pierre:

Thank you for your note about Phil's engagement.

I'm eure it is

all right - though they are both very young and must go slow a bit!

About

rates, again, you should read my letters aEain and your emazement will be
dispelled.

For some months efforts have been made to gat an educational

statement, but finally both you and Case admitted it was hopeless;

then the

bulletin article appeared - then I wrote you that all ether efforts failing
I was reluctantly forced to the view that a rate of 5 per cent - submitted
now, - was the only way for us to have a clear record.
original ergumBnt sound!

I ?till think my

I have no doubt it would have been disapproved.

You seem to feel that failing a statement, nothing should be dcne.
disagree!

There I

And new Mellon's statement slams the door and this opportunity is

passed - because of the new issue, etc.

Meantime the First rides us for 70

to 75 millions on which I have no doubt they are getting from $750,000 to
$1,000,000 a year profit (and a good
you or any of you at the bank.

between the governors

laugh0

I have no word of reproach for

It's the rotten system.

Put our chance passed

conference and this issue of securities.

Now let us

hope that the leadership of our affairs which has been undertaken by Hoover,
the Labor Organizations, Chambers of Commerce and the Press will educate the
country - we having wholly failed to do so ourselves.
While I don't like to see the First dipping in so deep, I also hate
to see our bill a/c piling up.
them?

Why not be bold and force the mirket to take

Someone should make our Mr. K. step along a bit.

The two hopeful

levelopments are Mellon's willingness to pay 4 3/4 per cent. which I had
doubted, and the general uneasiness about prices.

I long ago wrote Snyder

that he and his inflation pals were wrong and still think so - but I would




-2-

like to see the Federal Reserve System in the steersman's position instead
of being towed along in the dingy.

Look at my letters again and you will see the above, in brief, but
I thought unmistakable.

Looks as though you and Case and P. M. W. had handed one to W. P. G.
anent Cuba and it did me good
write him just DOW.

to

read the papers.

Please tell Case.

I won't

Too lazy!

Best to you and the others.
Yours,

B. S.

How about Bob Perkins of the Carpet Co. for board?
Barnes - but that means Hoover.

thinks

very well of

ment tho!




him.

Don't

Don't

know Woodin so well but Stettinius

like the way he plays

with

the City govern-

Also I l

Form 1228A

Ch..

to the account of

I cuss

',VICE DESIRED




WESTE*sm.. UNION
AM
TEL

Receiver's No.

4.-ksaNA

uay Letter
Night Message

Night Letter

Patrons should mark an X opposite the class of service desired;

OTHERWISE THE MESSAGE
WILL BE TRANSMITTED AS A

NEWCOMB CARLTON. PRESIDENT

FULL-RATE TELEGRAM

Check

Time Filed ;

GEORGE W. E. ATKINS. FIRST VICE-PRESIDENT

Send the following message, subject to the terms
on back hereof, which are hereby agreed to

a

ke&trz,,,u
Girc:o 'It tr-r-K

03

Seyt-t--c(f.

cil 6t( t

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P. id aix
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upend ct

ciAzio




ALL MESSAGES TAKEN BY THIS COMPANY ARE SUBJECT TO THE FOLLOWtir; TERMS:
To guard against mistakes or delays, the sender of a message should order it repeated, that is, telegraphed back to the originating office for mparison For this ,
.
one-half the unrepeated message rate is charged in addition. Unless otherwise indicated on its face, this is an unrepeated message and paid for as suscon iciracioz
whereof it is agreed between the sender of the message and this company as follows:
k
_ me_
The company shall not be liable for mistakes or delays in the transmission or delivery, or for non-delivery, of any message received for transmNir"
peated-message rate beyond the sum of five hundred dollars; nor for mistakes or delays in the transmission or delivery, or for non-delivery, of any inexun,
for
transmission at the repeated-message rate beyond. the sum of fiye thousand dollars, unless specially valued; nor in any case for delays arising from unavt11
Lion in the working of its lines; nor for errors in cipher or obscure messages.
In any event the company shall not be liable for damages for mistakes or delays in the transmission or delivery, or for the non-delivery, of any message, ik-hether
caused by the negligence of its servants or otherwise, beyond the sum of five thousand dollars, at which amount cacti message is deemed to be valued, unless a greater value
is stated in writing by the sender thereof at the time the message is tendered for transmission, and unless the repeated-message rate is paid or agreed to be paid, and an
additional charge equal to one-tenth of one per cent of the amount by which such valuation shall exceed five thousand dollars.
The company is hereby made the agent of the sender, without liability, to forward this message over the lines of any other company when necessary to reach its
destination.
Messages will be delivered free within one-half mile of the company's office in towns of 5,000 population or less, and within one mile of such office in other Chi.
or towns. Beyond these limits the company does not undertake to make delivery, but will, without liability, at the sender's request, as his agent and at his expense, endeavor to contract for him for such delivery at a reasonable price.
No responsibility attaches to this company concerning messages until the same are accepted at one of its transmitting offices; and if a message is sent to such
office by one of the company's messengers, he acts for that purpose as the agent of the sender.
The company will not be liable-for damages or statutory penalties in any case where the claim is not presented in writing within sixty days afterthe message is
Sled with the company for transmission.
Special terms governing the transmission of messages under the classes of messages enumerated below shall apply to messages in each of such respective classes
in addition to all the foregoing terms.
No employee of the company is authorized to vary the foregoing.
THE WESTERN UNION TELEGRAPH COMPANY
INCORPORATED

NEWCOMB CARLTON, PRESIDENT

CLASSES OF SERVICE
TELEGRAMS
A full-rate expedited service.

NIGHT M ESSAGES
Accepted up to 2:00 A.M. at reduced rates to be sent during the

night and delivered not earlier than the morning of the ensuing business day.
Night Messages may at the option of the Telegraph Company be
mailed at destination to the addressees, and the Company shall be
deemed to have discharged its obligation in such cases with respect
to delivery by mailing such Night Messages at destination, postage
prepaid.

DAY LETTERS
A deferred day service at rates lower than the standard telegram
rates as follows: One and one-half times the standard Night Letter
rate for the transmission of 50 words or less and one-fifth of the initial
rates for each additional 10 words or less.
SPECIAL TERMS APPLYING TO DAY LETTERS:

In further consideration of the reduced rate for this special Day
Letter service, the following special terms in addition to those enumerated above are hereby agreed to:
Day' Letters may be forwarded by the Telegraph Company as
a deferred service and the transmission and delivery of such Day
Letters is, in all respects, subordinate to the priority of transmission
and delivery of regular telegrams.
Day Letters shall be written in plain English. Code language
is not permissible.
c. This Day Letter is received subject to the express understand-

ing and agreement that the Company does not undertake that a
Day Letter shall be delivered on the day of its date absolutely, and
at all events; but that the Company's obligation in this respect is
subject to the condition that there shall remain sufficient time for
the transmission and delivery of such Day Letter on the day of its
date during regular office hours, subject to the priority of the transmission of regular telegrams under the conditions named above.
No employee of the Company is authorized to vary the foregoing.

NIGHT LETTERS
Accepted up to 2:00 A.m. for delivery on the morning of the ensuing business day, at rates still lower than standard night message
rates, as follows: The standard telegram rate for 10 words shall be
charged for the transmission of 50 words or less, and one-fifth of
such standard telegram rate for 10 words shall be charged for each
additional 10 words or less.
SPECIAL TERMS APPLYING TO NIGHT LETTERS:

In further consideration of the reduced rates for this special Night
Letter service, the following special terms in addition to those mumerated above are hereby agreed to:

Night Letters may at the option of the Telegraph Company
be mailed at destination to the addressees, and the Company shall
be deemed to have discharged its obligation in such cases with respect to delivery by mailing such Night Letters at destination, postage prepaid.
Night Letters shall be written in plain English. Code language
is not permissible.
No employee of the Company is authorized to vary the foregoing.

Form 1228A

,ccount of
(ICE DESIRED

Day Letter

WESTEklASNA
3

.

Receiver's No.

WESTERNUNION

Night Message

Night Letter

Patrons should mark an X opposite the class of service desired:

OTHERWISE THE MESSAGE
WILL BE TRANSMITTED AS A
FULL-RATE TELEGRAM

Check

TEL
NEWCOMB CARLTON. PRESIDENT

Time Filed

GEORGE W. E. ATKINS, FIRST VICE-PRESIDENT

Send the following message, subject to the terms
on back hereof, which are hereby agreed to




Ac

e

eti

0-0-1

AP;
:(1ho

Catt 6

ALL MESSAGES TAKEN BY THIS COMPANY ARE SUBJECT TO THE FOLLOWIh,
To guard against mistakes or delays, the sender of a message should order it repeated, that is, telegraphed back to the originating office for cot_
one-half the unrepeated message rate is charged in addition. Unless otherwise indicated on its face, this is an unrepeated message and paid for as such, s.
whereof it is agreed between the sender of the message and this company as follows:
The company shall not be liable for mistakes or delays in the transmission or delivery, or for non-delivery, of any message received for transmission
peated-message rate beyond the Sum of five hundred dollars: nor for mistakes or delays in the transmission or delivery, or for non-delivery, of any message r
transmission at the repeated-message rate beyond the sum of five thousand dollars, unless specially valued; nor in any case for delays arising from unavoidable in,
tion in the working of its lines; nor for errors in cipher or obscure messages.
In any event the company shall not be liable for damages for mistakes or delays in the transmission or delivery, or for the non-delivery, of any message, whether
caused by the negligence of its servants or otherwise, beyond the sum of five thousand dollars, at which amount cacti message is deemed to be valued, unless a greater value
stated in writing by the sender thereof at the time the message is tendered for transmission, and unless the repeated-message rate is paid or agreed to be paid, and an
additional charge equal to one-tenth of one per cent of the amount by which such valuation shall exceed five thousand dollars.
i-'
The company is hereby made the agent of the sender, without liability, to forward this message over the lines of any other company when necessary to reach its
destination.
Messages will be delivered free within one-half mile of the company's office in towns of 5,000 population or less, and within one mile of such office in other cities
or towns, Beyond these limits the company does not undertake to make delivery, but will, without liability, at the sender's request, as his agent and at his expense, endeavor to contract for him for such delivery at a reasonable price.
No responsibility attaches to this company concerning messages until the same are accepted at one of its transmitting offices; and if a message is sent to such
office by one of the company's messengers, he acts for that purpose as the agent of the sender.
The company will not be liable for damages or statutory penalties in any case where the claim is not presented in writing within sixty days after the message is
filed with the company for transmission.
Special terms governing the transmission of messages under the classes of messages enumerated. below shall apply to messages in each of such respective classes
in addition to all the foregoing terms.
No employee of the company is authorized to vary the foregoing.
THE WESTERN UNION TELEGRAPH COMPANY

,v-

INCORPORATED

NEWCOMB CARLTON, PRESIDENT

CLASSES OF SERVICE
TELEGRAMS

ing and agreement that the Company does not undertake that a
Day Letter shall be delivered on the day of its date absolutely, and
at all events; but that the Company's obligation in this respect is
NIGHT MESSAGES
subject to the condition that there shall remain sufficient time for
the
Accepted up to 2:00 A.M. at reduced rates to be sent during the transmission and delivery of such Day Letter on the day of its
A full-rate expedited service.

night and delivered not earlier than the morning of the ensuing business day.
Night Messages may at the option of the Telegraph Company be
mailed at destination to the addressees, and the Company shall be
deemed to have discharged its obligation in such cases with respect
to delivery by mailing such Night Messages at destination, postage
prepaid.

DAY LETTERS
A deferred day service at rates lower than the standard telegram
rates as follows: One and one-half times the standard Night Letter
rate for the transmission of 50 words or less and one-fifth of the initial
rates for each additional 10 words or less.
SPECIAL TERMS APPLYING TO DAY LETTERS:

In further consideration of the reduced rate for this special Day
Letter service, the following special terms in addition to those enumerated above are hereby agreed to:
Day Letters inn,y be forwarded by the Telegraph Company as
a deferred service and the transmission and delivery of such Day
Letters is, in all respects, subordinate to the priority of transmission
and delivery of regular telegrams.
Day Letters shall be written in plain English. Code language
is not permissible.
c. This Day Letter is received subject to the express understand-




date during regular office hours, subject to the priority of the transmission of regular telegrams under the conditions named above.
No employee of the Company is authorized to vary the foregoing.

NIGHT LETTERS
Accepted up to 2:00 A.M. for delivery on the morning of the ensuing business day, at rates still lower than standard night message
rates, as follows: The standard telegram rate for 10 words shall be
charged for the 'transmission of 50 words or less, and one-fifth of
such standard telegram rate for 10 words shall be charged for each
additional 10 words or less.
SPECIAL TERMS APPLYING TO NIGHT LETTERS:

In further consideration of the reduced rates for this special Night
Letter service, the following special terms in addition to those enumerated above are hereby agreed to:

Night Letters may at the option of the Telegraph Company
be mailed at destination to the addressees, and the Company shall
be deethed to have diseharged its obligation in such cases with respect to delivery by mailing such Night Letters at destination, postage prepaid.
Night Letters shall be written in plain English. Code language
is not permissible.
No employee of the Company is authorized to vary the foregoing.

444

(COPY of TELEGRAM)
May 24, 1923.

Pierre Jay
Hotel LaFayette,
Washington, D. C.
telegram w,..ts intended to repeat what I have always held that

it will be a mistake to change sttement.

in(Licate officers

Stop.

Your letter and Case's

and directors now favor doing so.

Stop.

If not.ithstand-

ing my memos. to Case and Morgan you all now agree that change should be
made I would decidedly oppose any arbitrary figure.

Stop.

Therefore think

only possible plan is to put one hundred percent behind notes.

As

Stop.

las does not contemplate this it will invite attack and require much ex-

planation.
must rely

Stop.

If

plan to alter figures in

upon educational program.

Stop.

st,temunt is dropped than we

A part of that program might

include a warning such as you propose for statement foot note but no figures
should appear as stated your letter

because

of coniuulon which could

from changes in quality of paying out gold.
reason I have instinctive

of statement now changed.
statement

Stop.

public reaction can be understood.

any oth,r
figures

Why not rely upon straight forward simple

now leaving

Stop.

figures alone anyway until

I dread the possibility of some

treatment of this mstter rather than simple frank

publicity.




Aside from

feeling we would get very bad publicity if

to public and get right at it

obscure and complicated

Stop.

arise

Benjamin Strong

Cragmor, June 9, 1925.

Dear P. J.:

Our correspondence exhibits the weakness of the written word, and
possibly the explanation of my volts

face

is simpler than it seems to you.

The argument against increasing rates, provided the Board made a statement,
was sufficiently convincing to you to satisfy you to make no increase even
if the Board made no statement.
time until since May 20.

I'm not sure that it has been to me at any

New and rather unexpected events have made a change

in the situation, as I wrote you.

One is the Treasury's willingness to pay

a rate which insured immediate distribution of the May issue, without bank
buying or borrowing.

I had greatly feared that as I wrote Case, - and please

bear in mind that our only protection against that was a prior advance.

Had

the loan gone to the banks, a subsequent increase by us would have been cruel,
and probably out of the question.

The other development has been rather humil-

iating, the Board having failed to tell the story, - about everyone else has
done so,- Hoover, the Labor Organization, Chamber of Commerce, Republican

National Convention, all the economic writers and organizations, are making
explanations of our policy or what it should be for us, and I'm bound to admit,
coming on top of our rate increase, and reaching very tender spots, has had an
influence.

Finally Mr. Mellon slammed the door for the time being.
Also bear in mind that had the Treasury fallen down on the issue,

and the country have failed to come to its senses we would now be in a nice
pickle with no statement and no chance for a rate change.
been partly good fortune and partly good sense by the Treasury more than by
our Federal Reserve System.

But in any event the Board would have disapproved an increase, as
is now clear!




As to the future, you have repeatedly heard me - or Snyder has -

The outc

9

urging that we would

likely

continue to get gold and that the cry about heavy

gold exports in the near future should be viewed with distrust.
rect the gold imports are likely to do one of two things.
which I doubt, - it will start up our stock speculation.
ease, it will liquidate our loan account.

If I am cor-

If money eases,

If money does not

In either case it is likely to

prevent the pendulum from swinging back into a real business recession.
On the other hand, if gold does not continue to come in, and a busi-

ness recession does set in, then again we will see our loans go down and again
we must go into the open market.

An actual outward flow of gold would call for a decision as to
whether we should put our rates up - to arrest it, - down - to facilitate it or - what may be wiser - leave our rates alone for a time and restore bank
reserves by buying in the open market.

It needs study and I wish you

would give me your views.

Now as to the remainder of your letter, in preference to polishing
up the article on prices I may a bit later write a few very short articles on
gold, how we make rates, and such subjects as are collateral to prices, letting
that come later.

Have not wanted to muddy the water - while the Board is as

yet untested.

About bills - just let the market find its own level.

It will make

our discount rate look silly - but that can't be helped, and the harm only
arises when discounting grows.

What you write about selling Governments is all right, at the moment
possibly - but any day may be a aistake to press down any harder on the market.
It depends on the gold movement so largely - as well as upon the extent to

which changed sentiment may continue to slow down business - if at all.

In a

word the situation needs close watching, with reliable figures for the whole




-5-

system, the gold

movement etc.,

constantly in mind and kept up to date.

business begins to turn bad, don't hesitate to quit

selling

and buy.

If

It will

start the wheels going again:
So much for now.

hours in

the sun.

I'm writing before breakfast, so as to have daylight

My best to all at the bank.

Yours,

B. S.

Copy for my files as usual, please:

To Mr. Pierre Jay,
15 Nassau Street, New York City.







Form 1206A
SEA WOE DESIRED
am

.dtter

Night Message

Night Letter
Patrons should mark an X opposite the class of service desired;
OTHERWISE THE MESSAGE
WILL BE TRANSMITTED AS A
FULL-RATE TELEGRAM

WESTEOANI, UNION
TEL!ie AM

Receiver's No.

WESTERN UNION

NEWCOMB CARLTON.

Check

Time Filed

GEORGE
GEORGEW. E. ATKINS, FIRST VICE-PRESIDENT

PRESIDENT

Send the following message, subject to the terms
on back hereof, which are hereby agreed to

c"
au

,

.

it

-1;)

rEw-

air di

TAS:
/GI

sidt

( CurA).11-14,,t

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09-t-1,215

7n Cif.,?.'1

ilre s i

ciAiryi.,

Ai-

.

_.,t ''r* ie"

ITAA CIL,

au

ALL MESSAGES TAKEN BY THIS COMPANY ARE SUBJECT TO THE FOLLOWING TERMS:
To guard against mistakes or delays, the sender of a message should order it repeated, that is, telegraphed back to the originating office for comparison.
half the unrepeated message rate is charged in addition. Unless otherwise indicated on its face, this is an unrepeated message and paid for as such, in consideration
is agreed between the sender of the message and this company as f ollows:
The company shall not be liable for mistakes or delays in the transmission or delivery, or for non-delivery, of any message received for transmission at the unrepeatedmessage rate beyond the sum of five hundred dollars; nor for mistakes or delays in the transmission or delivery, or for non-delivery, of any messagereceived for transmission at
the repeated-message rate beyond the sum of five thousand dollars, unless specially valued; nor in any case for delays arising from unavoidable interruption in the working of its
lines; nor for errors in cipher or obscure messages.
In any event the company shall not be liable for damages for mistakes or delays in the transmission or delivery, or for the non-delivery, of any message, whether
caused by the negligence of its servants or otherwise, beyond the sum of five thousand dollars, at which amount each message is deemed to be valued, unless a greater value is
stated in writing by the sender thereof at the time the message is tendered for transmission, and unless the repeated-message rate is paid or agreed to be paid, and an additional
charge equal to one-tenth of one per cent of the amount by which such valuation shall exceed five thousand dollars.
The companyis hereby made the agent of the sender, without liability, to forward this message over the lines of any other company when necessary to reach its destination.
Messages will be delivered free within one-half mile of the company's office in towns of 5,000 population or less, and within one mile of such office in other cities or
towns. Beyond these limits the company does not undertake to make delivery, but will, without liability, at the sender's request, as his agent and at his expense, endeavor to
contract for him for such delivery at a reasonable price.
,5.
No responsibility attaches to this company concerning messages until the same are accepted at one of its transmitting offices; and if a message is sent to such office
by one of the company's messengers, he acts for that purpose as the agent of the sender.
The company will not be liable for damages or statutory penalties in any case where the claim is not presented in writing within sixty days after the message is filed
with the Company for transmission.
It is agreed that in any action by the Company to recover the tolls for any message or messages the prompt and correct transmission and delivery thereof shall be presumed, subject to rebuttal by competent evidence.
Special terms governing the transmission of messages under the classes of messages enumerated below shall apply to messages in each of such respective classes in addition to all the foregoing terms,
P. No employee of the company is authorized to vary the foregoing.

THE WESTERN UNION TELEGRAPH COMPANY
INCORPORATED

NEWCOMB CARLTON, PRESIDENT

CLASSES OF SERVICE
TELEGRAMS

A full-rate expedited service.
NIGHT MESSAGES

Accepted up to 2.00 A.M. at reduced rates to be sent during the night
and delivered not earlier than the morning of the ensuing business day.

Night Messages may at the option of the Telegraph Company be
mailed at destination to the addressees, and the Company shall be
deemed to have discharged its obligation in such cases with respect to

delivery by mailing such Night Messages at destination, postage prepaid..
DAY LETTERS

A deferred day service at rates lower than the standard tele-

: grain rates as follows: One and one-'half times the standard Night
Letter rate for the transmission of 50 words or less and one-fifth of
the initial rates for each additional 10 words or less.
SPECIAL TERMS APPLYING TO DAY LETTERS:

In further consideration of the reduced rate for this special Day
Letter service, the following special terms in addition to those enumerated above are hereby agreed to:
Day Letters may be forwarded by the Telegraph Company as a
deferred service and the transmission and delivery of such Day Letters

is, in all respects, subordinate to the priority of transmission and
delivery of regular telegrams.
Day Letters shall be written in plain English. Code language
is not permissible.
c. This Day Letter is received subject to the express understandbig and agreement that the Company does not undertake that a Day




Letter shall be delivered on the day of its date absolutely and at all
events; but that the Company's obligation in this respect is subject
to the condition that there shall remain sufficient time for the transmission and delivery of such Day Letter on the day of its date during
regular office hours, subject to the priority of the transmission of regular telegrams under the conditions named above.
No employee of the Company is authorized to vary the foregoing.
NIGHT LETTERS

Accepted up to 2.00 A.M. for delivery on the morning of the ensuing
business day, at rates still lower than standard night message rates, as
follows: The standard telegram rate for 10 words shall be charged for the
transmission of 50 words or less, and one-fifth of such standard telegram
rate for 10.words shall be charged for each additional 10 words or less.
SPECIAL TERMS APPLYING TO NIGHT LETTERS:

In further consideration of the reduced rate for this special Night
Letter service, the following special terms in addition to those enumerated above are hereby agreed to:
Night Letters may at the option of the Telegraph Company
be mailed at destination to the addressees, and the Company shall
be deemed to have discharged its obligation in such cases with respect
to delivery by mailing such Night Letters at destination, postage

prepaid.
Night Letters shall be written in plain English.
is not permissible.

Code language

No employee of the Company is authorized to vary the foregoing.




/
Form 1206A

WESTE

131-"33 OF SERVIOE DESIRED

47A$ENA

',gram
.dy Letter

UNION

WESTERN UNION

TEL

Night Message

Night Letter
Patrons should mark an X opposite the class of service desired;

OTHERWISE THE MESSAGE
WILL BE TRANSMITTED AS A

NEWCOMB CARLTON. PRESIDENT

FULL-RATE TELEGRAM

AM

111---Vir

Receiver's Na.

Check

Time Filed

GEORGE W. E. ATKINS, FIRST VICE-PRESIDENT

Send the following message, subject to the terms
on,back hereof, which are hereby agreed to
t4-(

r ,n,L tkr, -n Erru

(.1f,,..Aet

bat

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6-4 6.4 oh.14

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Form 1206A
OLAPis

fr

SERVICE DESIRED

'sf,ram

WESTEit7PISEN'2'

Letter

Receiver's Na.

WESTERN UNION

TEL

Night Message

Night Letter

P.trons should mark an X oppos,te the class of service desired;

JTHERWISE THE MESSAGE
WILL BE TRANSMITTED AS A
FULL-RATE TELEGRAM

NEWCOMB CARLTON,

PRESIDENT

F27, Of.

trim

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tt 111 t

(4)



(41-64,1f1

111,7)

c

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Time Filed

GEORGE W. E. ATKINS, FIRST VICEPRESIDENT

"6
rtt t

Check

AM

e.,

Send the following message, subject to the terms
DIllack hereof, which are hereby agreed to

rfr

UNION

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61

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Form 1206A
OLAFis

or

w:AVIOE DESIRED

Letter

WESTE




Receiver's Na.

WESTERN UNION

TEL

Night Message

fir,a

UNION

Night Letter

Patrons should mark an X opposite the class of service desired;
OTHERWISE THE MESSAGE
WILL BE TRANSMITTED AS A
FULL-RATE TELEGRAM

NEWCOMB CARLTON. PRESIDENT

_
vk

Check

AM

Time Filed

GEORGE W. E. ATKINS, FIRST VICEPRESIDENT

Send the following message, subject to the tettatt
on
hereof, which are hereby agreed to

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Form 1206A
OLAF3s ne .1-.R.VIOE

DESIRED

'am

Day Letter

WESTE
TEL -re
ce.

UNION

E

Receiver's Na.

WESTERN UNION

Night Message

Night Letter

Patrons should mark an X opposite the class of service desired;
OTHERWISE THE MESSAGE
WILL BE TRANSMITTED AS A
FULL-RATE TELEGRAM

NEWCOMB CARLTON, PRESIDENT

AM

Check

Time Flied

GEORGE W. E. ATKINS, FIRST VICE-PRESIDENT

Send the following message, subject to the terms
oulack hereof, which are hereby agreed to

kd

,t17,
CA_ 6t,

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Form 1206A
OLAF:is nt-

-,,riv,dE DESIRED

'ern

WESTEki17511

Day :-ettsf
I

UNION

WESTERN UNION

TEL

Ni.ght Message

Night Letter

should mark an X oppoe the
rsitttrons class of service desired;
! OTHERWISE THE MESSAGE
WILL BE TRANSMITTED AS A
FULL-RATE TELEGRAM

NEWCOMB CARLTON. PRITSIDENT

Check

AM

Time Filed

GEORGE W. E. ATKINS. FIRST VICEPRESIDENT

Send the following message, subject to the terms
on back hereof, which are hereby agreed to

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UNION

Receiver's Na.

WESTERN UNION

Message

tight Letter

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should
X oppo[ F.teOns class ofmark andesired;
the
service

/OTHERWISE THE MESSAGE
WILL BE TRANSMITTED AS A
FULL-RATE TELEGRAM

NEWCOMB CARLTON. PRESIDENT

Check

AM

Time Filed

GEORGE W. E. ATKINS. FIRST VICE-PRESIDENT

Send the following message, subject to the terms
onlack hereof, which are hereby agreed to

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Form 1206A
OF SERVIOE DESIRED
T.I ',gra in

...y Letter

WESTEkAMENI UNION
AM
TEL
E

Receiver's No.

WESTERN UNION

Night Message

Night Letter
Patrons should mark an X opposite the class of service desired;
OTHERWISE THE MESSAGE
WILL BE TRANSMITTED AS A
FULL-RATE TELEGRAM

NEWCOMB CARLTON, PRESIDENT

Check

Time Filed

GEORGE W. E. ATKINS, FIRST VICEPRESIDENT

Send the following message, subject to the terms
onlack hereof, which are hereby agreed to

,a,

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ALL MESSAGES TAKEN BY THIS COMPANY ARE SUBJECT TO THE FOLLOWING TERMS:
us, oneTo guard against mistakes or delays, the sender of a message should order it repeated, that is, telegraphed back to the originating office for comparison. .
tali the unrepeated message rate is charged in addition. Unless otherwise indicated on its, face, this is an unrepeated message and paid for as such, in consideration
'of it
agreed between the sender of the message and this company as follows:
The company shall not be liable for mistakes or delays in the transmission or delivery, or for non-delivery, of any message received for transmission at the unrepeatedsmessage rate beyond the suns of five hundred dollars; nor for mistakes or delays in the transmission or delivery, or for non-delivery, of any message received for transmission at
the repeated-message late beyond the stun of five thousand dollars, unless specially valued; nor in any case for delays arising from unavoidable interruption in the working of its
es; nor for errors in cipher or obscure messages.,
In any event the company shall not be liable for damages for mistakes or delays in the transmission or delivery, or for the non-delivery, of any message, whether
aused bY the negligence of its servants or otherwise, beyond the sum of five thousand dollars, at which amount each message is deemed to be valued, unless a greater value is
tated in writing by the sender thereof at the time the message is tendered for transmission, and unless the repeated-message rate is paid or agreed to be paid, and an additional
-charge equal to one-tenth of one per cent of the amount by which such valuation shall exceed five thousand dollars.
The company is hereby made the agent of the sender, without liability, to forward this message over the lines of any other company when necessaryto reach its destination.
Messages will be delivered free within one-half mile of the company's office in towns of 5,000 population or less, and within one mile of such office in other cities or
towns. Beyond these limits the company does not undertake to make delivery, but will, without liability, at the sender's request, as his agent and at his expense, endeavor to
contract for him for such delivery at a reasonable price.
No responsibility attaches to this company concerning messages until the same are accepted at one of its transmitting offices; and if a message is sent to such office
by one of the company's messengers, he acts for that purpose as the agent of the sender.
The company will not be liable for damages or statutory penalties in any case where the claim is not presented in writing within sixty days after the message is filed
with the Company for transmission.
It is agreed that in any action by the Company to recover the tolls for any message or messages the prompt and correct transmission and delivery thereof shall be presumed, subject to rebuttal by competent evidence.
Special terms governing the transmission of messages under the classes of messages enumerated below shall apply to messages in each of such respective classes in addition to all the foregoing terms.
No employee of the company is authorized to vary the foregoing.

THE WESTERN UNION TELEGRAPH COMPANY
INCORPORATED

NEWCOMB CARLTON, PRESIDENT

CLASSES OF SERVICE
TELEGRAMS

A full-rate expedited service.
NIGHT MESSAGES

Accepted up to 2.00 A.M. at reduced rates to be sent during the night
nd delivered not earlier than the morning of the ensuing business day.

Night Messages may at the option of the Telegraph Company be
mailed at destination to the addressees, and the Company shall be
corned to have discharged its obligation in such cases with respect to
delivery by mailing such Night Messages at destination, postage prepaid.
DAY LETTERS

A deferred day service at rates lower than the standard tele-

gram rates as follows: One and one-half times the standard Night
Letter rate for the transmission of 50 words or less and one-fifth of
the initial rates for each additional 10 words or less.

Letter shall be delivered on the day of its date absolutely and at all
events; but that the Company's obligation in this respect is subject
to the condition that there shall remain sufficient time for the transmission and delivery of such Day Letter on the day of its date during
regular office hours, subject to the priority of the transmission of regular telegrams under the conditions named above.
No employee of the Company is authorized to vary the foregoing.
NIGHT LETTERS

Accepted up to 2.00 A.M. for delivery on the morning of the ensuing
business day, at rates still lower than standard night message rates, as
follows: The standard telegram rate for 10 words shall be charged for the
transmission of 50 words or less, and one-fifth of such standard telegram
rate for 10 words shall be charged for each additional 10 words or less.

SPECIAL TERMS APPLYING TO DAY LETTERS:

SPECIAL TERMS APPLYING TO NIGHT LETTERS:

In further consideration of the reduced rate for this special Day
Letter service, the following special terms in addition to those enu-

In further consideration of the reduced rate for this special Night
Letter service, the following special terms in addition to those enumerated above are hereby agreed to:
Night Letters may at the option of the Telegraph Company
be mailed at destination to the addressees, and the Company shall
be deemed to have discharged its obligation in such cases with respect
to delivery by mailing such Night Letters at destination, postage

,merated above are hereby agreed to:
Day Letters may be forwarded by the Telegraph Company as a
deferred service and the tiansmission and delivery of such Day Letters

is, in all respects, subordinate to the priority of transmission and
delivery of regular telegrams.
Day Letters shall be written in plain English. Code language
is not permissible.
c. This Day Letter is received subject to the express understanding and agreement that the Company does not undertake that a Day




prepaid.
Night Letters shall be written in plain English. Code language
is not permissible.
No employee of the Company is authorized to vary the foregoing.

Form 1206A
CLASS OF SERVICE DESIRED
Tp.egram

v/

.

.; Letter
Night Message

Night Letter

Patrons should mark an X opposite the class of service desired;
OTHERWISE THE MESSAGE
WILL BE TRANSMITTED AS A
FULL-RATE TELEGRAM

WESTE. UNION
kaaNT3
TEL_ AM
WESTERN UNION

11\771,22,

NEWCOMB CARLTON. PRESIDIENT

GEORGE W. E. ATKINS, FIRST VICEPRESIDENT

Send the following message, subject to the terms
on.back hereof, which are hereby agreed to

dx--74_1
CY4tAiek

477_ (

.(14): "




tj
SOK,

(47 ?Al
.33*.

Receiver's Na.

Check

Time Filed

ALL MESSAGES TAKEN BY THIS COMPANY ARE SUBJECT TO THE FOLLOWING TERMS:
To guard against mistakes or delays, the sender of a message should order it repeated, that is, telegraphed back to the originating office for comparison. .
us, onehalf the unrepeated message rate is charged in addition. Unless otherwise indicated on its face, this is an unrepeated message and paid for as such, in consideration
of it
is agreed between the sender of the message and this company as follows:
The company shall not be liable for mistakes or delays in the transmission or delivery, or for non-delivery, of any message received for transmission at the unrep(atedmessage rate beyond the sum of five hundred dollars; nor for mistakes or delays in the transmission or delivery, or for non-delivery, of any message received for transmission at
the repeated-message rate beyond the sum of five thousand dollars, unless specially valued; nor in any case for delays arising from unavoidable interruption in the working of its
lines; nor for errors in cipher or obscure messages.
In any event the company shall not be liable for damages for mistakes or delays in the transmission or delivery, or for the non-delivery, of any message, whether
caused by the negligence of its servants or otherwise, beyond the sum of five thousand dollars, at which amount each message is deemed to be valued, unless a greater value is
stated in writing by the sender thereof at the time the message is tendered for transmission, and unless the repeated-message rate is paid or agreed to be paid, and an additional
charge equal to one-tenth of one per cent of the amount by which such valuation shall exceed five thousand dollars.
The company is hereby made the agent of the sender, without liability, to forward this message over the lines of any other company when necessary to reach its destination.
Messages will be delivered free within one-half mile of the company's office in towns of 5,000 population or less, and within one mile of such office in other cities or
towns. Beyond these limits the company does not undertake to make delivery, but will, without liability, at the sender's request, as his agent and at his expense, endeavor to
contract for him for such delivery at a reasonable price.
No responsibility attaches to this company concerning messages until the same are accepted at one of its transmitting offices; and if a message is sent to such office
by one of the company's messengers, he acts for that purpose as the agent of the sender.
The company will not be liable for damages or statutory penalties in any case where the claim is not presented in writing within sixty days after the message is filed
with the Company for transmission.
It is agreed that in any action by the Company to recover the tolls for any message or messages the prompt and correct transmission and delivery thereof shall be presumed, subject to rebuttal by competent evidence.
Special terms governing the transmission of messages under the classes of messages enumerated below shall apply to messages in each of such respective classes in addition to all the foregoing terms.
No employee of the company is authorized to vary the foregoing.
.

THE WESTERN UNION TELEGRAPH COMPANY
I NC ORPO RATED

NEWCOMB CARLTON, PRESIDENT

CLASSES OF SERVICE
TELEGRAMS

A full-rate expedited service.
NIGHT MESSAGES

Accepted up to 2.00 A.M. at reduced rates to be sent during the night
and delivered not earlier than the morning of the ensuing business day.

Night Messages may at the option of the Telegraph Company be
mailed at destination to the addressees, and the Company shall be
deemed to have discharged its obligation in such cases with respect to

delivery by mailing such Night Messages at destination, postage prepaid.
DAY LETTERS

A deferred day service at rates lower than the standard tele-

gram rates as follows: One and one-half times the standard Night
Letter rate for the transmission of 50 words or less and one-fifth of
the initial rates for each additional 10 words or less.

Letter shall be delivered on the day of its date absolutely and at all
events; but that the Company's obligation in this respect is subject
to the condition that there shall remain sufficient time for the transmission and delivery of such Day Letter on the day of its date during
regular office hours, subject to the priority of the transmission of regular telegrams under the conditions named above.
No employee of the Company is authorized to vary the foregoing.
NIGHT LETTERS

Accepted up to 2.00 A.M. for delivery on the morning of the ensuing
business day, at rates still lower than standard night message rates, as

follows: The standard telegram rate for 10 words shall be charged for the
transmission of 50 words or less, and one-fifth of such standard telegram
rate for 10 words shall be charged for each additional 10 words or less.

SPECIAL TERMS APPLYING TO DAY LETTERS:

SPECIAL TERMS APPLYING TO NIGHT LETTERS:

In further consideration of the reduced rate for this special Day
Letter service, the following special terms in addition to those enumerated above are hereby agreed to:

In further consideration of the reduced rate for this special Night
Letter service, the following special terms in addition to those enumerated above are hereby agreed to:
Night Letters may at the option of the Telegraph Company
be mailed at destination to the addressees, and the Company shall
be deemed to have discharged its obligation in such cases with respect
to delivery by mailing such Night Letters at destination, postage

Day Letters may be forwarded by the Telegraph Company as a
.deferred service and the tiansmission and delivery of such Day Letters

is, in all respects, subordinate to the priority of transmission and
delivery of regular telegrams.
Day Letters shall be written in plain English. Code language
is not permissible.
c. This Day Letter is received subject to the express understanding and agreement that the Company does not undertake that a Day




prepaid.
Night Letters shall be written in plain English. Code language
is not permissible
No employee of the Company is authorized to vary the foregoing.

copy of telegram
Aug. 5 PM

Colorado Liorings, Colo.

10 3$

Jay
Federal heeerve 73ank New York

NY

Pleaee consider and transmit to Criseinger the followieg which are my beet vie of
Claiborne'a clearing plan which I have just read. First, this may be the opeortunity
ror a solution or. the 1,.roblee of which advantage should be taken therefore every
consideration be shown these gent7emen by withholding deoision until fulleet possible
exeetination of plan is oomeleted. Second, if as I believe the plan is iniorteible

the data aseembled should be conclusive and convincing to banker, to the public,

and if eoseible to Claiborne's committee. Third, the inveetigetion would'. probably
require queetionneire to k,.em r end nonrdember bane to dieclose following and

possibly other information:
(a) Volute of checks and amount both within and outside ,iietrict;

amount of imeediate credit float we would carry;
public would pay on eonpe.r checks;

(b)

bable

(o) propable 5.Akount of exchanee

(d) whether nane would avail of plan and

whether they would charge exchenge or not; (e) .ro:;3able expenee involved to

reserve banks and eublic;

(f) probable amount of inflation resulting from credit
extended on uncollected checks; (g) probable increase in clerical force, space

and other facilities required if plan universally sdoiAed and
required to cover cost with cone - uent inflation;

amount of earninge____-.

(h) attitude of state banks

regarding esabership if plan is feasible; (1) attitude of merchanto and eublic.
Fourth, as you know / as inalterably o-peoeed to any imeedinte credit plan :ditch

cannot be fair unlese univers1 and cannot be universel without disastrous inflation.
Therefore this feature of plan should be shown as dangerous but ovortunity taken
to make determined effort to roach an agreement.

Fifth, no agreement will be

worth considering which does not substantially end coatrovorsy and greatly enlarge
member:Ale of desirable state banks. Sixth, the present investigating comeittee



(telegram)
.August 5, ii?2$

-2-

on state bank membership should be advised of our investigation and asked to con-

sider results when available.
to plan which are obvious.

Seventh, sh11 not refer to various minor objections
Eighth,beyond everything I hope all necessary tire

is taken to get all the facts before any decision is made.




STRONG.

COPIED FBOM MMS
(Aug. 18, 1923)

Dear P. J.

About my return - Of course my throat has made a really spectacular recovery and my lungs are much better.
It will be closely watched when
should show definitely.
It (the cord) looks
and a

yea

I do

It's

hard

return.

to guess just when a throat is "safe".

The Throat man here says a few weeks

What is now taking place is simply the hardening or fibrosis.

good and

strong and healthy save for a very slight

little irregularity on the edge.

sometime before October 1st will be O.K.

pink

tinge

In my own mind I am figuring that
If our conference could be held last

of October it would suit me best.

I shall not preside unless absolutely safe, and

probably not anyway - but count on

stopping

at Chicago for a visit with McDougal.

Hope the program is all sketched out by then and I'll go over it with him.
Awfully sorry to hear about Shop. Morgan;
without pay?

what is

Your letter is cryptic to say the least:

away when needed:




Yours
13. S.

wrong, and why leave

Am distressed to be

;

,OPIFD FROM MMS
August 13, 1925.

Dear F.J.

My wire about Sec.14 had to do only with the chance of some alarm arising
from the Presidentts death.

Am gradually coming to the view however that we shall

need to give things a boost - sooner or later - but one needs more data and basis for
study than I have cut here before saying whent
we must not underestimate the "lag".
T.B.

Cur operations are something like

An indiscretion or exertion today may set up a little or big inflammation, which

after two weeks or a month will start a temperature, etc.

I could easily show how

selling 50 or 100 million of our secutities mild have its real reaction some weeks
or months later.
factor.

should be watching everybase som
At

So in the reverse case!

Is anyone?

We will be remiss if we permit a wave of unjustified pessimism

upset the business situation.




a

Yours,
B.S.

wrough

el,c-

mgmy otber
Living Imitiatfie

L. thei.
tee'

tart

t
?es t4c w.

e viviated,

a-ved, in case-trine(dit
baluce ie created, it Is an "act
law,.

Ivan if:the tmlatoe:

.

This_wpait uc

*ater.

'et t,alance" so lonp as we are
our

OWP

UltrS-Virea

oeuftses money and

Co&

/

e.e

,erIED FROM MMS

Aug. 13, 1923.

To:

From:

a

Jay and Case

Subject:

w,

Par Collections

B.S.
4

Case's letter of August 6th and Jay's of 9th clear up some uncertainty

Lin my mind, but hardly change my views as to What should be done.

The brief report

of the Claiborne plan I saw in the press was enough to convince me of its folly - but
f the full text sent by Case is conclusive.

Please consider the following points:

In the past the Board has sometimes dealt with "kickers" in true
1. Bureaucratic style and always with tad results.
plan;

Having Claiborne over was a good

my suggestion however is to take up the matter de nova, and make a. serious,

thorough study of the entire problem, and keep Claiborne happy thereby.
If a questionnarie is unwise, employ other methods.

I think you

both overlook that our Fabian policy has all along been due to the need of awaiting
the Supreme Court decision.

These men are sure to go to Congress, the present

-

Committee on State Bank membership is sure to get their case, and we can unhorse the
whole troop by a thorough treatment of the matter which will show the facts along
line of my wire and many other points.

Now let's beat them to it.

Had we followed

f, the course of leaving initiative to the other side in 1921 (as some urged) Anderson's

Commission would have put us in the ditch!

This controversy can be ended now by our

showing its absurdity, costliness and selfishness.

Harding's legal point (with due respect to the approval you seem to
have given it) strikes me as absurd.

He claims that the Reserve provisions under

Sec. 19 (which uses the words "actual net balance") will be violated by the member
',bank, or not observed, in case immediate credit is given.

This won lt nold water.

et

No matter how the balance is created, it is an "actual net balance" so long as we are
obliged to meet it on demand.

Even if the balance arises from our own ultra vires act,

the member has the balance and does not violate 19.

Harding confuses money and credit.

If we tell our members we will give immediate credit - of course their balance is
maintained effectively.

are ultra vires


4er

I doubt whether it makes a scrap of difference whether we

in advancing

on

uncollected check which we hold as agent,

or in

-2-

.11

HA

lilinja them and paying the face of them to our members as a principal.

recallany.

Nor do I

provision of the Act which would make even either such procedures on

our part ultra vires anyway:

Could any different rule apply to such a balance if it

arose from any other ultra_vires act of ours - such as discounting ineligible paper lending on collateral, etc?

Nowhere in Congress has the true inwardness of the "par" matter been
fully laid bare.

I mean the economic cost, the operating costs, the possible in-

flation, the check kiting, the false reserve basis, etc. etc.

This fall is going

to be the trial as to new legislation and we will be missing our chance if we fail
to firM to the teeth.

new well afford.

Also a questionnaire will make it an issue and that we can

Why fear it?

You say we should minimize this movement and not make it important;
It has been important all along.

Claiborne's ridiculous presentation of their wishes

gives us the best chance we have had to handle them, and the fear of inflation now
so general is the best background we could have.

The attitude of both the Board and of McF. convinces me of the wisdom
of pressing the matter now for the next Congress.

Don't let's suffer defection in

our own ranks:

The Clearing House move, as to "collection" charges, is a good one.
But where immediate credit is given, that charge (int.) is the one legitimate one
now imposed:
E.

You will find no intimation of any "fancy" plan in my wire.

of that sort never appeals to me as it does to Harding.

I'm 100% for going to the

mat now and the Southern banks will prepare the way for us by their own efforts to get
the Act amended:

Don't let Harding's sophistry befog the question in Washington.

Cater-

ing to the tastes of "legalistic minds" won't help anyone!
I disagree with the Governors in their recommendation about agents other
than banks.

The methods used in Atlanta were approved by the Supreme Court.


keep mouths shut


on the subject.

Best

,
11.

r

The only danger I now see is in the silly rule of the Court that

checks may be redeemed or paid by an endless chain of other checks.

That point

should be reargued someway, as it leaves check payment in legal tender (so far as
state law goes) in bad shape.
So much for now.

I so radically disagree with you and Case in this matter

that I would like the Board to be fully informed of the way I do feel - and in
writing.

You can rake up a

memorandum of my views from this and my wire.

not write C. direct as that only causes confusion.




Yours,
B. S.

I shall

COPIED FROM IMS
August 19, 1923.

Dear Pierre:

A fine letter from Miller says they have set the conference for Nov. 11
so that I need not hurry my return, which is fine - relieves my mind a Jot:

finishing off process with that vocal cord is rather slow.

The

It is the manufacture

of hard tissue, "fibrosis," by which the infection is finally eliminated - is
progressing wonderfully well and iiebb tells me that the next two months are the
best of all 12 for my cure.

Should I remain into October it will be only to make

assurance doubly sure.

My routine is of course exacting as well as exasperating - good for
body and soul no doubt - but hard on the patience.

I'll be quite a stranger to

you on my return, as I have grown a bit fatter, greyer and yet they say I look
younger:

You have all been most good, toting my load and your own and keeping
me well posted also.

Sorry you have had such organization problems to meet.
About the hearings, you will find my few thoughts in a letter sent you
some time ago - p11,19 remarks re par collections.

Glancing thru your'letter, I see you want something definite from me.
In view of Miller's letter it may be wiser for me to try and stay on until the
middle of Oct.

It's hard to tell definitely.

say I can leave, you may be sure!

I'll be back on the jump when they

Just depends on that d--- cord: and it looks

good now.




Have alre:.dy replied as to the Sec. 14

operations I wired about.

Best to you all.
Yours
B. S.




Form 1206A

WESTE

CLASS OF SERVICE DESIRED

,egram

_

...0 Letter

UNION

Receiver's No.

WESTERN UNION

TEL

Night Message

Night Letter
Patrons should mark an X opposite the class of service desired;

OTHERWISE THE MESSAGE
WILL BE TRANSMITTED AS A

NEWCOMB CARLTON. PRESIDENT

FULL-RATE TELEGRAM

Check

AM

Time Filed

GEORGE W. E. ATKINS. FIRST VICE-PRESIDENT

Send the following message, subject to the terms
onlack hereof, which are hereby agreed to

a

A-1.0 IA/-2

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1

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SERVICE SYMBOL

CPAS

.ey, am

Jay Letter

,

Night MessigeC,NttcL
Night Letter

It

51

NYWr ESTE7

TEL

If none of these thrSe" symbols
appears after the check (number of
symbol appearing after the check,

CLASS OF SERVICE SYMBOL
Telegram
Day Letter

cr,in

WESTERN UNION

N

words) this is a telegram. Otherwiseits character is indicated by the

..,,,

NEWCoMB CARLTON, PRESIDENT

I 1.V.10 Iii,

...7k.
ilme

....;,..
_....

.

GEORGE W. E. ATKINS, FIRST VICE-PRESIDENT

Blue

Night Message

Nite

NL
Night Letter
If none of these three symbols
appears after the check number of
words) this is a telegram. Otherwiseits character is indicated by the
symbol appearing after the check.

RECEIVED AT

Ii

VA 35 26 COLLECT

COLORADOSPRINO COLO 3 841A
JAY

,

L-=

/('

CARE FEDERAL RESERVE BANK NEWYORK EY

CAN YOU GET TEE ANY WORD ABOUT MY FRIENDSIN JAPAN ESPECIALLY

BANK AND VICOUN1 AND SHIBUSATA

POSSIBLY JTARRISOI OF STATE

DEPARTMENT HAS REPORT

STRONG.

AN

15

AN4eitY

V

WESTE

CLASS OF SERVICE DESIRED
'egram

Form 1206A

E

47,2411ENA

.ay Letter

WESTERN UNION

UNION

Check

TEL SPX- AM

Night Message

Night Letter

Patrons should mark an X opposite the class of service desired;
OTHERWISE THE MESSAGE
WILL BE TRANSMITTED AS A

NEWCOMB CARLTON, PRESIDENT

FULL-RATE TELEGRAM

Time Filed

GEORGE W. E. ATKINS. FIRST VICEPRESIDENT

Send the following message, subject to the terms
on back hereof, which are hereby agreed to

_

"

Vett Qt.

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(,)

rf (--t..k..C#eitti,,

tt'it




61.tt

4..e.c4

A"t_

Receiver's Na.

ALL MESSAGES TAKEN BY THIS COMPANY ARE SUBJECT TO THE FOLLOWING TERMS:
iis, oneTo guard against mistakes or delays, the sender of a message should order it repeated, that is, telegraphed back to the originating office for comparison. I
half the unrepeated message rate is charged in addition.
Unless otherwise indicated on its face, this is an unrepeated message and paid for as such, in consideration whereof it
is agreed between the sender of the message and this company as follows:
The company shall not be liable for mistakes or delays in the transmission or delivery, or for non-delivery, of any message received for transmission at the unrepcatedmessage rate beyond the sum of five hundred dollars; nor for mistakes or delays in the transmission or delivery, or for non-delivery, of any message received for transmission at
the repeated-message rate beyond the sum of five thousand dollars, unless specially yrdarid; nor in any case for delays arising from unavoidable interruption in the working of its
lines; nor for errors in cipher or obscure messages.
In any event the company shall not be liable for damages for mistakes or delays in the transmission or delivery, or for the non-delivery, of any message, whether
caused by the negligence of its servants or otherwise, beyond the sum of five thousand dollars, at which amount each message is deemed to be valued, unless a greater value is
stated in 'writing by the sender thereof at. the time the message is tendered for transmission, and unless the repeated-message rate is paid or agreed to be paid, and an additional
charge equal to one-tenth of one per cent of the amount by which such valuation shall-exceed five thousand dollars.
The company is hereby made the agent of the sender, without liability, to forward this message over the lines of any Other company when necessary to reach its destination.

Messages will be delivered free within one-half mile of the company's office in towns of 5,000 population or less, and within one mile of such office in other cities or
Beyond these limits the company does not undertake to make delivery, but will, without liability, at the sender's request, as his agent and at his expense, endeavor to
contract for him for such delivery at a reasonable price.
No responsibility attaches to this company concerning messages until the same are accepted at one of its transmitting offices; and if a message is sent to such office
by one of the company's messengers, he acts for that purpose as the agent of the sender.
The company will not be liable for damages or statutory penalties in any case where the claim is not presented in writing within sixty days after the message is filed
with the Company for transmission.
It is agreed that in any action by the Company to recover the tolls for any message or messages the prompt and correct transmission and delivery thereof shall he presumed, subject to rebuttal by competent evidence.
S. Special terms governing the transmission of messages under the, classes of messages enumerated below shall apply to messages in each of such respective classes in addition to all the foregoing terms.
9. No employee of the company is authorized to vary the foregoing.
towns.

THE WESTERN UNION TELEGRAPH COMPANY
INCORPORATED

NEWCOMB CARLTON, PRESIDENT

CLASSES OF SERVICE
TELEGRAMS

A full-rate expedited service.
NIGHT MESSAGES

Accepted up to 2.00 A.M. at reduced rates to be sent during the night
and delivered not earlier than the morning of the ensuing business day.

Night Messages may at the option of the Telegraph Company be
mailed at destination to the addressees, and the Company shall be
deemed to have discharged its obligation in such cases with respect to
delivery by mailing such Night Messages at destination, postage prepaid.
DAY LETTERS

A deferred day service at rates lower than the standard tele-

, grain rates as follows: One and one-half times, the standard Night
Letter rate for the transmission of 50 words or less and/one-fifth of
initial rates for each additional 10 words or less.

Letter shall be delivered on the day of its date absolutely and at all
events; but that the Company's obligation in this respect is subject
to the condition that there shall remain sufficient time for the transmission and delivery of such Day Letter on the day of its date during

regular office hours, subject to the priority of the transmission of regular telegrams under the conditions named above.
No employee of the Company is authorized to vary the foregoing.
NIGHT LETTERS

Accepted up to 2.00 A.M. for delivery on the morning of the ensuing
business day, at rates still lower than standard night message rates, as
follows: The standard telegram rate for 10 words shall be charged for the
transmission of 50 words or less, and one-fifth of such standard telegram
rate for 10 words shall be charged for each additional 10 words or less.

SPECIAL TERMS APPLYING TO DAY LETTERS:

SPECIAL TERMS APPLYING TO NIGHT LETTERS:

In further consideration of the reduced rate for this special Day
Letter service., the following special terms in addition to those enumerated above are hereby agreed to:

In further consideration of the reduced rate for this special Night
Letter service, the following special terms in addition to those enumerated above are hereby agreed to:
Night Letters may at the option of the Telegraph Company
be mailed at destination to the addressees, and the Company shall
be deemed to have discharged its obligation in such cases with respect
to delivery by mailing such Night Letters at destination, postage

Day Letters may be forwarded by the Telegraph Company as a
deferred service and the transmission and delivery of such Day Letters

is, in all respects, subordinate to the priority of transmission and

delivery of regular telegrams.
Day Letters shall be written in plain English. Code language
is not permissible.
c. This Day Letter is received subject to the express understanding and agreement that the Company does not undertake that a Day



prepaid.
Night Letters shall be written in plain English.
is not permissible.

Code language

No employee of the Company is authorized to vary the foregoing.

To

Mr. Pierre Jay

From

B. S.

Here is the situation about my throat, etc.

Yesterday we had the leading throat man in Colorado Springs, Dr. Frank
L. Dennis, come out for consultation with Dr. Forster and Dr. Webb's throat man,
a Dr. Chapman, who treats my throat every day.

The result is satisfactory and

I'll summarize my understanding of it as follows:
1st.

There are various types of laryngeal T.B., and mine is the least

dangerous, or serious.
etc.

In other types, the tissues soften, break down, ulcerate,

In my ease, fibrosis simply hardens and enclosed the lesion in a compact

mass of scar tissue.

This has now progressed to a point where Dr. Dennis said

that he could hardly have diagnosed it as tuberculosis, looking at it in its
present condition, had he not been given the history beforehand.
2nd.

Such cases are of the "chronic" type, rather than the sharp

"flareup", with rapid extension.

It will on that account be a long time before

my voice can be fully used, and entirely free from hoarseness.

The process of

hardening the tissue, especially in the vocal cord, is a slow one.
3rd.

I have probably passed the point where there could be any "flareup"

except as the result of a brand new "invasion".
4th.

I am to gradually begin using my voice - very cautiously at first.

5th.

It will be all right for me to return next month, but everyone

must be patient with me for some months, as to voice, and office hours, and
strain of work.
6th.

The outlook is that I shall fully regain normal voice and cords -

provided I do nothing foolish and watch conditions carefully and constantly.




7th.

All the doctors agree.

-28th.

All think it will be better not to attempt office duties until

November first.
9th.

The improvement in the last three weeks has been unusually

pronounced.

As to lungs.

Dr. Forster has just made a careful examination for com-

parison with previous ones.

I had the misfortune to pick up a mild streptacoccue

Infection in my trachea which gave me quite a cough and some temperature; - and
he wanted to be sure that no clinical change had taken place in my lungs on that
The examination showed that there had been constant and progressive

account.

improvement in both lungs, since my arrival.

When Dr. Sewall went over me he

said I was better than he had ever seen me.

A very eminent man (a Dutchman) from

Vienna, was here, and after an unusually careful overhauling, he said I was in
good shape, had many active years ahead of me, but of course a pair of badly

a
scarred lungs and7More or less chronic condition.

My heart had not been touched

by these years of struggle with impaired lung area.

So barring accident, you may expect to see me sometime in October.
may find things so favorable as to anticipate November first, but possibly it
will be wiser not to mount on it just yet.

Mrs. Davison has asked me to move over to the house she has taken, and
if Dr. Webb approves, I shall probably do so sometime after his return on the 18th.

copies from
original MSS
Sept. 14, 1923
MtleC




MISC. 3.1 60M-4,2

FEDERAL RESERVE BANK

OF NEW YORK

OFFICE CORRESPONDENCE
To

DATE

192

SUBJECT:

FROM

Dear Pierre:

Herewith is a nonprofessional report on my case.
should get it and of course Governor Crissinger.

The directors

Also will you have it copied

on receipt and send one to Ben Jr. soon as you can, to save my repeating the story.
Could you also get for me, two copies of Dr. Rollier's new book on
Heliotherapy, printed in English, and give one of them to Harrison with my urgent
recommendation that he read it and then under oroper expert advice, use the Alpine

(actinic ray) lamp for his knee'

Ranier has done wonderful things in Switzerland

and is revolutionizing the treatment of extrapulmonary infections, including
bone,

with the possible exception of the gastric type.

The other 0,o), Dr.

Crawford should study!

Pm feeling tip top now.

That infection was a bother but has about

Shall nolish off soml mail in a few days.

cleared up.

My best to you and all at the office.
Yours,

B. S.

copied from
original MSS

Sept. 14, 1923

MMcO







CLASS OF SERVICE

COPT Or

Telegram

Letter
,

.

Message

Night Letter

If no class of service is desig-

WESTERN 'UNION TIRLIEGRAM

nated the message will be trans-

mitted as a full-rate telegram.

12 ,

.71((...4,?4(1,

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t

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Jay

Sept. 19, 1923
B. S.

Dear Mr. Jay;

Thank you for your wire about my return.

I could hardly send a satis-

factory reply by telegraph but hope this will be sufficient.

Since my earlier

letter I see no reason to modify what I wrote;

in fact am convinced that it is

quite all right for me to return next month.

Here are my reasons:

let.

Since writing, Dr. Webb has returned.

He went over Dr. Dennis'

report with the other doctors and tells me that there is no doubt at all that I
can do so.

Further _ he says that Dr. Dennis is the best man to give an opinion

that he knows.
2nd.

A T.B. larynx is not like typhoid, or pneumonia, where one has a

distinct condition for a definite time, and when it clears up the condition is
ended and one is well.

Such cases as mine are chronic, in the sense that long

periods are sometimes required for restoring a wholly normal situation, (if that
ever is completely

accomplished)

but once activity ceases, as with me, and after

a reasonable period of watching, the larynx gradually resumes its normal function.

My vocal cords having been involved, it will mean sparing my voice and gradually
training them to function so aS to overcome the hoarseness.
ing rapidly.

That is now progress_

By November first I shall never notice any change in my voice from

its normal condition.

Dr. Dennis says that a few months of care are necessary.

It would be necessary just the same no matter how long I delayed my return.

So

that is really more a case of asking indulgence from family and associates, for a
short period, than anything else.
3rd.

I am no longer willing to continue these recurrent absences on

account of my health.




Home cooking and surroundings are also overdue!

All the doctors say I may return.

It will be easy enough

"qerre Jay

Sept. 19, 1923

B. S.

-2-

to detect immediately any evidence that they are wrong, before damage is done.

Should that happen, though I do not think it is possible, then it will be time for
me to quit and be an invalid!

But by that time we will be in our new building,

and I shall not feel so badly at leaving my job partly done.
4th.

I'll bet you or any or all of our directors 10 to 1 - that I

never have any return of trouble with my larynx, and that I shall be in better
health than for the past eight or ten years!
5th.

Even if some New York doctor die not feel satisfiel with my throat,

which I cannot believe possible, what further treatment is needed would only be
the restricted use of my voice, which is what I propose for a time anyway!
3th.

In this and my earlier letter I have endeavored to give you an

exact picture as I see it.

But the important opinion is the one given by Dennis

and Webb and I shall be safe in following that.




Hope this is satisfactory!

Again many thanks for the wire.

Yours,
B. S.

'

C,

AZZPSWER, ED
OCT 4

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WT, 15 60M-5.,.3

FEDERAL RESERVE BANK
OF NEW YORK

TELEGRAM

WIRE TRANSFER
DIVISION

PRIVATE WIREINCOMING

IFiEC6Live.:Q
144fbo

OCT 29 1923

icago 1110a 26th

11
/9

J.

Jay and Case

Here we are safe and sound. Greetings to you all at the bank.

Please advise family shall arrive Grand Central nine foilyunday morning.




Strong,
TELFGRAPM
SPr-rfoN

3.224p

ocr
41%

December 10, 1923.

Dear Pierre:

Re - Par Collection Plan.

Credit Association.

Eeplying to your letter, it confirms me in the belief that we could
be charged with instigating the plan;
head off more drustic measures.

but can reply the,t it was designed to

My point is really this.

With a conference

coming on, with special committees of the Governors dealing with this perplexing matter, with the Board jumpy about regulation J, - failure on our part to
ge through the usual procedure exposes us to the charge of lack of team play.
If the plan has e kick, -we, and possibly Cleveland, are in th
Atlanta once was.

Individual conference in this matter does not take the

place ef a meeting in Washington..
what

position that

I doubt if the Board grasps the plan and

tsill or might do.
Therefore, whileyou are the best one to do tht jo1,

nd while it is

well done, I would infinitely prefer to have had it formally considered for
cur and your protection.

Let's confer on these matters before going too far.
Tours sincerely,

Pierre Jay,
15 Nassau St.,
New York, N. Y.
.

BS.V7




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