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-

December 23, 1914.

Dear Governor akens

am arceedingly- grateful to you for

Christmas greetings and hasten to wish the sane

to your good self.
Please be aspired that I waxmly appre-

ciate yuux co-operation with us in all the problems you mention, and want to givo you apple evi-

dence that we desire to co..orerate with you in the
same way.

With best regards, believe me,
Sincerely yours,

Alfred 1,..Itifobitsiqs,

Governor,Pederal Reserve 3auk,
Boston, Mass.
W.TriVOM.,24




July 28th,

1915,
dear Liken:

Thank you for your nice note of the 24th.
I use passing through your town yesterday, but unfortunately my train connections did not allow me enough time

to stop off aal have a visit with you.
Our relations in the new banking system have been a

great pleasure- 7nd satisfaction to me lad I hope they will last
a good many years.

Sincerely yours,

Alfred L.

Governor, Pedern1 Reserve Lank,
Boston, Xass.

BS Jriirm




Copy sent to each of the Governors.

e6:j

arch 24th, 1915.

Dear Sir:

Enclosed please find copy of a
letter written to Mr. Strong by Governor Ham-

lin, which Mr. 3trong wishes you to see.
Very truly yours,

ecretary to Mr. Strong.
Alfred L. Aiken, Esq.,

Governor, Federal Reserve Bank,
Boston, Mass.
VCM




PERSON:1.

September 2nd, 1915.

My dear Jr. Aiken:
OPP1

It really.is impossible to give a very satisfactory
answer to yours of the 1st on account of our having at the
present time no knowledge whatever of

hat may develop from

this visit of the committee of iltglish and French bankers.

They should be here shortly and disclose what plan they are
considering, or would considere

I am absolutibey clear, how-

ever, that this matter should not interfere with your vacation.

to run over to New York some day next

-hy can't you arrange

reek and then we can exdhange

vie.

s very much better personally

than by correspondence2

There are many matters

in the present situation which

have led me to abandon tamporarily my plan for getting away, but
some of these are personal, having to do with my boy's college

plans.
tioni

Others, I am frank

to s. y relate to this exchange situa-

If you find it impossible to come over next week, Je might

have a little chat on Tuesday or ednesday by telephone and I
think I can make it perfectly clear that vacation plans come first.
Very truly yours,

Alfred L. Aiken, Esq.,
Federal Reserve Bank,
Boston, :lass.




BENJ, rT7ONG, Jr.
PERS --NAL.

October 14th, 19M

Dear Mr, Aiken:

Thank you very much for sending Mr. Stone

in to see me.

I had a. most interesting chat with

him and am glad to have m,de his acquaintance.
Very truly yours,

Alfred L. Aiken Esq.,
k,
Federal Reserve
Boston, Maus.
VCM

/1

December 23rd, 1915.

Alfred L. Aiken,
Governor, Federal Reserve Bank,
Boston, Yass.

Congratulations upon the past year's work, good wishes for next year
and ferry Christmas.

Benj. Strong, Jr.

Charge to Benj. 'trong, Jr.,
62 Cedar -:.treet.

The above telegram sent to the Governors of all Federal Reserve Balks.







December 24th, 1915.

y dear Mr. Aiken:

cannot thank you enough for your nice letter of
eeember 23rd.

Looking back ov r the past year's work, I can truth-

fully sny that the greatest petisfaction it has afforded me, has
been the asuociatio, aith the Governors of the reeerve banks and
the feeling that after all we were accompliehine something by es-

tablishing relations of confidence and friendship.

Your influ-

ence in develoeing a harmonious relatioeship at these reaetines
has been felt by all of those who have attended them, but by none
any more than the writer.

lease accept from me may th'nks for your letter and

the friendly sentiment that inspired you to write it
Cordially yours,

Mr. Alfred L. Aiken,
Care The Federal eserve Benk4
Beaten, Mass.




January 5th. 1916.

Ify dear Mr. AikaLs......,
I hope you will be able to get ever
next weqk Qn6 77o shall be de7ighted to see you.

killdest nersonsl r,T.ards, I am,

Very truly yeurs,

'red L. Aikm. Hag.,
ederal Reserve rink,
3osten,
V ONT,




PERSONAL and CONPILENTI L.

January 11th, 1916.
Dear Governor Aiken:

At the first Conference of Jovernors held in Washington
on fecember 10th, 1914,1

year, and

of

was appointed

course, my term of office has expired.

:Jr. Curtis' apnointment was for
It is

ceed with its

Chairmin to serve for one

a

I think

like period of one year.

hiTly important that this organization should

pro-

;.ork without the slightest possibility of 'iny personal

feeling being permitted

to interfere with perfect

harmony.

therefore, writing you to suggest the desirability of

I am,

appointing

another Chairmn at the meeting on the 19th.

'chile I have enjoyed the work very
deal of a burden in many ways,

relieved me of a great

a
much, it has been, good

notwithstanding

part of it.

that Mr. Curtis has

It was inevitable that during

the first year a certain amount of eressure would be required to develop orderly procedure nd a systematic discussion of the program.
That eart of the work has now been done and it seems to me that some

one else can take over the responsibility of conducting the meetings

and give the impression that should prevail, that there is rotation
in office and that these Governors Conferences are not being run
from the New York bank.




Jan. 11, 1916.

To

Alfred L. Aiken, eq.

I am writing you personally and confidentially about this
because, as I rec..11, you were responsible for proposing My name,

and am, also, sending a copy of this letter to Governor McDougal because he is the Chairman of the _%ecutive Committee.

I would ap-

preciat, it if you would have a word with him about it and do the
needful.

Thanking you in anticipation, I am,
Very truly yours,

.red L. Aiken, 78q.,

'.;overnor, Federal Reserve Bank,
Boston, Lass.
BS Jr/VOM -1




1913.

I

very gratofIll to you indeeci for sending me

Oliver's 1st bock and frnnkness compels re to admit that

I have already red it,

fact,

so absorbod in it one

night that It was throe 0'010037 in t.j.:enorninE.: before I

felt willing to lay it down. ClvInge a fewwords liere and
there, and it applies with evual force to this country.
There is E!..nother book, which you mpy h-ve read,

but if not, which every .,nexiacn should road vnd that is
Fagnet's "Cult of Incorniletece".

I am seudin!:

P copy

I on locate it.

It Jo rther

rd to get.

SuA as soon

:!:;

Am sorry not to soo you again before 1ving for
%rope,

Thank you heartily for your good wishes E4nd your

interest in my experiences,whioh Twill recount to you immediately on returning, if you vul.t give me the opportunity,

'ith: best
'incerely yours:

Alfrel L. Aiken, Esq.,
Federal reserve tiank,
Foston, rase.
BO Jr/70:1

Misc.

34

FE,

L RESERVE BANK

Sent by

NEW XI

(SEND TO FILES)

4Z

COPY OF TELEGRAM

(t.

<`"\

AS)
N

1\

AA>

c's"

Nov YJr-e, Aril 14, iv16
devernn.., redoral Resorve Bank,
Boston, Maao.

iieart;,, thanks for your wire "ion is most oharnotoristIO and gmatly
approolAtcd. Am feeling Inv' fit awl looking formird to our :ueeting
In Teehincton

nday
i,rong, Jr.

Charge to
7ed,./ral 'Asnrvo

62 Cedar Street.
B-5






!Jay 29th, 1916.

Dear Aiken:

Thank you for your note of the 25th.
If I carry out my plan of going to Maine,

I shall certainly try and arrange to stop over in
Boston.

If I go away in June, it will seem like
desertion during the time when I should be here on
account of the inauguration of the collection plan,

but, as a matter of fact, it is only the preliminary
work that will occupy that month and I suppose I will

be here when the battle really begine.
What would suit me best 'scald be to get
you to go to-the woods with me.

Faithfully yours,

Alfred L. Aiken, Esq.,
federal Reserve Bank,
Boston, li:az;s.
BS JR/VCM




Personal.

ine 8th, 1916.
.lar Aiken:

It was might goo' of you to send me thqt book

called "The Tent -yellers" and i ar going to read it
with n rood deal o interest and p/eneure.

-here are some mntters that I am anxious tn eiscuss with you personally nt the earliest possible moment

even if it make it nr,cessnry for you to run over here especially. I am writing from ny apartment at 903 "ark
Avenue, where I am lnid up in bed with little prospect
of b ing around for some tine.

ill you kindly keep
this information in confidence and telez-ranh me on receipt
this whether there is any chance of my st,eing you in
the near future?
Best regards and mnny thanks.

inceroly yours,

Alfred
Aken, Req..
Care The Fede l neserve BnA,
Boston, Vass.
jr/VOM




Estes Park, Colo., July 19, 1916.
Mr. Alfred L. Aiken,
% Federal Reserve Bank, of Boston,

53 State Bt.,
Dear Aiken:

It is mighty good of you to write me and I enjoyed
your letter of the 14th almost as much as a visit with you
at the office. Just now I am engaged in organizing a little office up here in Estes Park myself and will be able
to keep up correspondence with you and others Who are good
enough to write me. My address will bett f the Lewis-

ton and in all liklihood I will be h re-all

ter.

In some wa:s you fellows in B ton beat
in New
York and now that I m away from the office, It:seems only
good natured to admit it. year-eRrangements/fer re-discounts
strikes me as admirable
so 00
uil of the New
England Banks to remit at/ 1, inc$ntaTI gobbling up the
Boston Ulearing House, stir kes me a
real aohievment.
You are to he congratulat for hav*ng set the pace.
/
I read the .Gua nctoe\ .
,ompany's report, which
really struck me as a apr affair, so many of the answers
being noncommittal.
\got replies from 20,; of the banks
of the United Btat ,arid. .,f. that
about one-third expressed no opinio f vq,de, the other two-thirds were
:
equallr
t w /about as much of a fiasco as the
3 corn \campaig.k,t t'eaected Mr. Wilson. On the other
hand, I 1,q4ediot that the Guarantee Trust Co. will he a
member ofthi:System in due time and a very loyal one.
20T-i

I a 4igging out literature to read and will try

Mrs. O'Bhaughnessy's book, which I saw very favorably reviewed. Ifou would enjoy this wonderful place; it is as
beautifultks any I have ever visited and the air is fine.
We are surrounded with mountain peeks, some of them with
lots of snow; every night is cool and, fortunately, the
hotel is very comfortable.

I am,

With warmest regards an many thanks for your letter,

Faithfully yours,




Estes Park, Colo., July 27, 1916.

W. Alfred L. Aiken,

% Federal Reserve Bank,
Boston, Mass.

the
I have just read the interview you gaveanswer
Boston News Bureau and congratulate yokli on the
"canvass".
to the Guaranty Trust Company's-aor!oalledbut was reto do the same-thingL
I was much tempted
strained by possible ill effect, on some\*gotiations
which, confidentially, are,uhde* way, wit.h\a view to
their taking membership" /It 14 )impossible to say

Whether anything will c me o

now there are three or
four of the larger-TrIpt 0 ôpanies and State Banks in
nd that are giving very
New York, ChiCaglis-aiid,Ale,
th matter and I am hopeful
serious consideration
It happens thatN 4

that by fall, Ike will s e some new members and important
ones; this hO'ever is A#ite confidential.
you
et/rIanCh news I can
/here\ikg-o-o-d--dea.1 better, sendfind it about
but
dismybelf. I am a

the, bank of
tressing to o7 living onto cast a fly. a good trout
be able
s zieam and
'warmest regards,
Sincerely yours,




Estes 1:ark, Colo., August 7, 1916.

Alfred L. Aikens, Esq.,
Federal Reserve Bank,
Boston, Mass.
Dear Aikons:

It was a great pleasure to rec4ive your letter
of August 2nd and get all of the news, and let me tell
you, as I recently have Warburg inea_10ter, that I think
you have beaten all of us in yeter-Diatript in almost
every department. If you sueceed in rot04ing up the
Trust Companies, it will efea roe be fuJ,Nther evidence
of the soundness of our,Nirk to ate, but'Ytrthermore
I would consider it a ' sona
ibute to yaur'own_influence and standing
You
-twelfth of the 2yetem.
You express MC t my views about the postmaster businees.--Ittl oorest kind of an effort
on the part or/our Was eto riends and I am sorry
they ettempteei it. Curl ueinees should be developed
on the basis oW service/41nd not force. A letter from
Governor_liam14kjust ' 91eived intimates that at the
end/pf_a.eiotheze
fter the postmasters have been
bondett and the detal a worked out, the order will be
rev ved; I would like to make a little wager that the
ord r will ,n t be revived, at any rate until after the

fi

t week

1) november.

1

/

N--__23,padking of fishing, I have been out twice.
The first time with no success, but yesterday we managed
to 3et some very nice trout.
I have completed some work here on the matter
of our foreign arrangements, with which you are familiar.
A little later this will be submitted to all of the-2.eserve Banks, and I am anxious to get your views about it.

Write me whenever you have a chance and you

may be sure that your batters will be very gratefully
received by your friend in exile.
Paithfullf yours,




Estes Park, Col.,
September 2nd, 1916.

My dear Aiken:

Yours of the 29th reached me just aftini I had mailed
a letter to you

so this gives me

the excuse

for another one.

I was delighted to get yo4r. account O-NtiRe Conference.
a
N,\

They wrote me from New York

tha,te' 4u

got the prograIerthrough
///

in great shape, as I knew you
deeming feature of the

41 layerid

meeting weatAhe

so you see the reacvifin in ea

Kains says that the re-

dinner at

the aahant Club,

\a_
ea0\116-s characteristic of the
\-

actor.

/

YrIL-Pr.

a ----___--

/ ,----

e ort of the meeting, I

you and/hg managed to hold down the

judge that

development of that same old

,.

i

heresy fib ut

that this

checkfln Federal Reserve Banks.

,'

Nattece

give immediate

Don't you think

direct routing, combined with the scheme to

credit for drafts on Federal Reserve Banks, will

result in breaking down the whole plan of deferred credit?

I

am afraid of it and likewise afraid of the possibility of kiting
to which you refer.

About the foreign business, I hope the memorandum was
clear.

Kass objects to the New York bank acting, as I had sug-

gested in the memorandum, and prefers to have an independent
agent there.

This I do not agree with at all.

To

illustrate




-2To

Alfred Aiken, Esq.

my objections:

Sept. 2, 1916.

How would you feel if

an agent of the

other

eleven reserve banks had office room in your bank and occuiled
his time, not only in handling these

foreign

transactions, but

in making investments for the other eleven banks in your market?
Personally, I don't care a rap about the compensation so long as
the New York bank is not losing money and takingla whole lot of
responsibility for nothing.

I do, however, seriously object to

the idea that the New York market, botle-ta, bill8,

etc., and in rates for foreign exonange,

will b

arrants,

bject to the

uncontrolled influence of the 2Unds of 'tqhe twelve reserve banks.

We have avoided a serious
ment, which would

i

vanl-sh-it--once".4
-- o
,

ed.

dang$'4Ite

I am writingiy u frank' \15,
!

I

is bound to come up
------

nd some

the others --7of.te,,m
/ Another

no auth

/4
1

by the existing arrange-

this agency scheme was adoptc\i

ctions because the question

'

should be prepared to diocuss

hen the time comes.

oint is that the Yederal Reserve Act contains

for-A/ ncies of that character.
)ty

Alualt-the fiscal agency matter, I have asked :A.. Treman

to furnish the Committee with copy of a memorandum prepared some
time ago when Elliott's suggestion was first received.

The fis-

cal agency arrangement has so far not been develoned as it should
be and I hope your Committee will be able to work something out.
It occurs to me that this may provide opportunity for showing

the

Treasury Department that the whole scheme of note issue is wrong:
and if corrected, the Government can be r lieved of a good deal

of expense of the

present Issue of gold certificates and consequently,




To

Sept. 2, 1916.

AlfVed L. Aiken, Esq.

Incidental-

can afford to assume the expense of our note iv-9u°.

ly, an your work on that Committee will take you to Washingion a
good deal, be sure and give my best regards to 1718 H Street, of

which organization, by the way, I am now a full-fledged member
and proprietor.

I have already answered your comments about

the Kansas

If you get there, as I hope you will decide

City Convention.

to do, block out enough time to run up here.

Tiee chances are
I

I

N

that Warburg will come and if you two f0114$71ieuld spend i few
the purpose

days with me here,(or in Denver/pherwr\would go''b

\
I am improving out il'er*
,
always/tddi-tex

if you prefer)0iyou would be lrig m

back, and it

hear that you

Ifotwithstanding a recent seton to hurry and get well to

\\

//

%

100 really t,4es me and would like
fe1117

Ae_I

to have me

.

.

back.

great favor,

eatedly,s id to you, the moot gratifying

e

result ythe last tviyear* work is the relationship which has
been

44bliehed

I

th the men in the different banks.

It is

worth a 1-4.11tj, put together.
Should you by chance be able to spare the time and
reach Estes Park before the fishing is over in September, I
have some tackle here for fly fishing and we can take a crack
the trout and you would not have to bring your own.

When I

get back home, if you are still of the same mind, we will try
some of the tuna together.

at

0




4
To

Alfred L. Aiken, Esq.

Sept. 2, 1916.

Many thanks again for your letters. I hope you do
not get discourgged by my not answering them promptly and from

now on I will be a better correspondent, se please keep them up.
With warmest regards,

Faithfully yours,

;0(red.

-4kFrio

Fedi-ma Reserve -flank*
Bosotn,

BOCH




stee Park, Colo.,
September 13th, 1916.
Dear Aikeza.
____--

I was delighted to receive your letter of the 0th.
It was so full of news and Just the kind of letter I like to
get.
Warburg expects to reach Denver on the 25th or 26th

and to save traveling time, I am going down to Denver and
spend a oc)uple of days with him.

Of course, you realized that when I wrote you thed

I had no knowledge of your plan for a trip to laine or would
never have thought of suggesting Kaneae City and Denver.

Just

the seme, you know how giald I will be to see you.

Warburg is covering Cineinnati, St. Louis and Kansas

City, sandwiching in these two days here betwPon, and it is
I am also expecting a visit from
mighty goo of him to come,
Frank Vanderlip and Frank Trumbull around the first of the month.
About the Committee on fiscal agencies:

This is the

second Committee of Governors appointed and the work which was

done in our office before was in connection with the earlier Committee, of which I was the Chairman. Inasmuch ac this is a brand
new Committee, there is not the slighteot reson in the world why
you should not act as Chairman of it. You know Treman well enough

by now to realize that he will place everything in the office at
your disposal.

There will be some adventages in your eating as




To

Alfred L. Aiken, Esq..

Sept. 13, 1916.

Chairman, because Mr. Treman does not expect to continue permae

nently in New York and if this is a standing Committee, as
imagine it will be, his retirement would neceeeitate a change
in the Chairmanship.

You car be ver y sure that he and Mr, Cur-

tis will do all tho work possible in this connection and that
they will always stand ready to run over to Washington with you

to attend meetings. Why don't you write Treman about it, ask.ing him how he feels, and at the same time ask him to get out
all the material on the subjectt We have quite a mass at the
bank, some of which you will find or value. The above is
ten frankly, as you asked, and wita full knowledge of what I
know is Mr. Treman's feelings in thee matters.
Kains and I have exchanged letters about the foreign
arrangements. HQ is dead againitthe idea of the hew York bank
assuming too much management of the account and would rather have

a special representative appointed who would act under the direction of the Goveenor or Deputy Governor of the New York bank

This is as near tweedledee and tweedledum as one could get, and

argued to a logical conclusion, simply means that the accounts of
salaries and expenses are kept a little differently by one method
than by the other. To be quite frank with you, so far as the
New York bark is concerned, we are going to exercise the most cam..
piste control possible over our own share of the transactions The

business is too important to leave it to some sort of joint control
such as is suggested, and your letter again emphasizes in my mind
the extent of the misunderstanding that exists in the minds of




To

Alfred L. Aiken, Eee.,

Sept. 13, 1916.

most of the Governors a e to whaJ kind of businese we are going
to do. The margin of profit will be very much greater than on
any class of investment we are now reeking.

Were we dealing in

exchange Tee would realize a profit on each turnover of anywhere

from one-quarter to onoesixtyfourth. in this account, we will
simply buy exchange whenever it is below the gold import point,

remit it to London and invest the proceeds in bills which will
%,
pay, not 2i as in the case of New York bills, but 5 to
which ic now the current -London rate, r:hese bills will be discounted and reported exactly as our other bills are, except, of
couree, they willbbe reported in sterling and the amount of discount realized on the fund invested will be more than double what
we are now getting on American bills. / am Most anxious that
all of the Governors dismiss from their minds absolutely the idea

that we are going to deal in exchunge as the exchange houses do,

or buy long bills in this country as the large institutions do.
As a matter of fact, I do not care a rap about this mate
ter of compensation so long as the New York bank is not both di-

viding its own field of the butiness with the other eleven banks
and at the same time paying the expenses of conducting the business. There is enough profit in the account for everybody and
a sufficient margin to pay a reasonable cost and comething for
the responsibility and supervision
The commission at present charged by the liew York bank

for handling local investments would probably be double xhat would

be required to cover a fair allowance of expense and compensation




To

Alfred L. Aiken, Iscle

Sept. 13, 1916.

for handling the foreign account for the simple reason that the
rate of discount would be twice as big ae under present conditions
and it would have the effect of doubling our cemmission. I have
always agreed,At you knowithat whenever the eiecoutt rates in New
York advanced materially, our compensation should not advance eith

it and the same rule would apply to foreign business. The really
important thing is that the account be operated, not for the pure
pope of scalping profits in exchange or for the purpose of purchase
of documentary bills in this country, discounting them and selling
demand exchange against them, but really for the purpose of-stabilizing exchange und getting, ne they say on the other side, "a
position counter to the market." To do this successfully will
require the employment of as much money ae we can safely afford

and uee it ac that it will have the greatest possiVle effect on

exchange; in other words, in one account instead of twelve.
I have been contemplating out here preparing a detniled
statement of exactly how the business would be done, describing
each variety of transaction and making an assumed calculation of

profits.

I have already prepared a memorendum of

a

scheme for

managing the account and when this is all coecluded I ill take

the liberty of sending it to you in ordee to get an expreesion of
your on viewe.
enjoy your letters and hope you keep them up.

With best regards and hoping that you hada bully holiday,
I am,

Faithfully yours,

.1fred L. Aiken, Esq.,

Yedenal Reserve Bank,

Boston, liass.




Pets Park, Colo.,
Octoller 6th, 1916.

Dear Aiken:

was delighted to have your letter or the 2nd.
The Convention dovelOsed about as 1 thought it would,
provided you follo-ze turned out in a good body to exercise simply the rstraininj; influence of your presence. Had the Ndoral Reserve Sy tem not been well repro7snted, it would have run
1 can cos this clearly from the accounts receivrburg, YeDougal and yourself, as well ae the newspaper

lit: us.
ed from

account of 'hat transpired.
EM glad Tarburg's spach went off so sell.

he is ex-

codingly senetive about the ores or criticism, Find if he kept
his voice up so that they hoard him, ac he eeere to have done, I
know that his speech was enjoyed and appreciated,
Your let4rs give me a gr,et deal of pleasure and your

visit although too short, an a delight.
After the TWI of this month, my address will be 4100
Vontview Boulevard, Denver.

The ,Aronicle is literally daft on this subject of our
note issue. I am getting up some material to publish but will
probably not Use it until after election. It may do a little
good if it can be properly circulated.
With warmest regards,

Sincerely yours,
Alfred L. Aiken, Esq.,
Governor, Federal Reserve Bank,

4100 Moutview Boulevard.




Denver, Colorado,

October 24th, 1916.

Dear eeken:

You may be sure teat I wae none
vieit last month.

It

was

altogeth4Ltaaella

orse for your
r

.1,,

but fine as

long as it laoted.

The first inetallme

f th

office and I presume Jay we

some one of the hew York apers

rticie hae gone to the
to have it published in

t I have net heardfrom him

about it.

You are s(u sly rjht a out the Governor's Conferences.
They must nct be di
come topi

,eeritinu

d I will write 6urtts about

Just now,--ia-lat the System neede is the develop

ment of(g eatet uniformity in a lot of our metheds rind tefuse

meetins

assi

meeting pro

n bringing

that

about, besides that, every

euggestions feom one or more of the Governors

about various metters of weich advantage ean be taken by the
other banks for the improvement of their own work.

It is very good of you to write me franly about the
personal mRtter mentioned in your letter and I am glad that you
turned !Jr. Wing down, at any rate, for the preeent.

He will

be around again and then I hope you will do the same thing.

It

is a choice between a public service and making more mcney.

I

believe your personal inclination favors the former if it does

tkx




To

Oct. 24, 1916.

Alfred L. Aiken, Esq.

broaches the subject again, I hope you will feel that it is
worth while to write me about it before coming to a decision,
or if you o n make it the excuse for coming out hers, so much
There are a great many things in connection with

the better.

the proposal

mat

we could discuss with more satisfaction per-

sonally than by letter.

uiie recnttly, one of our Govern°
vary tempting offer from a largo ir titution
mnletion o

to decline it, believing that th

0 and

work is of much more im)orta

\

has received a
d ha 7 decided

present

I give him more satis-

faction than malang more

il
Xad

somewhat the same ex-

penance myself within the pas

ar,

One of the large bankome a partner and i sup-

ing houses in New Y
ten tim

pose it meant fiv

the income that I will ever

get from the hesetBank, b t I doubt if I would ever
back in t e,arilna ap,alm

be happy

I have equal doubts as to whether

wou d be.

am glid t

(you

I ence.

fie -is_

learn th t Mr. Wing is no longer on the

ays a strong partisan and will do us 0.9 much

good working with us as he would do harm working against us.
Thank you for the auggetion about Lord fledesdale's
book.

if this Winter is a drying one in memy ways, it

will

Ri least give me opportunity to do some rending *doh I am going to enjoy.

So far the treaiment out here is doirrg every-

thirg I could expect.

"j




-3
To

Alfred L. Aiken, Esq.

Oct. 24, 1916.

he Board is lust putting itF foot into it, I an afraid'
in regard to those new French credits. I hope Mr. Jay succeeds
in persuading them not to make public the telegram they sent to
the Reserve Agents yesterday.

I hope you can get out here again some time,
With warmest regards,

Faithfully yours,

Alfred L. Aiken, Esq.,

Governor, Federal Reserve Ban
Boston,
as/vcm

;




November Gth, 1916.

Dear Aikent

various reYours of November 1st just reaches me and

ports from the office of your doings while in
Am glad the government 3s are being

N w York.
1

o

d.

The System

OVVS too rany long time government bon

or you fel vs to get
/ tter aid I am relieved to find
next to that French credi
wn attitude. You know
that Curtis w,e misinformed au
nly say in brief that p0,the facts better than I do aid
a

it was also an excellent

<*rigat

eonally I do

net agree

h th
is nature

couragirg credits of

ard\&all in any policy die\
long as they are not ultra
))s

At some pers1 risk 3/prophecy thet in years to come
financial rather than
these credit,/,' artieularly-fse which are
Tires.

commercial

ill save Our own situation.
e

toV and, the bankers made a terrible blunder

in sending out'4"-ci

cular assuming

to commit the reserve banks

acted hartily
without consulting them end I feel that the Board
taking more time to invesin sending out their telegram without
I
The matter seems to have been straightened out and

tigate.

headlines.
hope the incident Images without any newspaper
I am amused at what you say about the meetings.
not let any possible embarrassment

with continuing them.

get together.

Do

of that character interfere

Something is gained every time you fellows

-2o

Nov. 6, 1916.

A. L. Aiken, Esq.

Also, 1(1 hope when the next Governors Conference is
held that the program can be cleared Jp, particvlprly on the

collection matter. Do not let too great haste in making Federal reserve Bank checks par for immediate credit and do not
let any outburst of enthusiasm suggest that it is wise for us
Parring
to do all of this collecting business fs,r not
Federal reserve bank chocks can be done later
strong enough and experienced enough teLwipnd

lecting checks for nothing is somew At

n we are

acket. Col-

par witivkransport-

er things for nothing.
ing mail for nothing and doing 1cof
bli 0 in the Reserve System,
If we once get that principle
d upon to do for noth-

there is no telling what we may b

ing, and it is surely
as the fruit.




l'any thanks

ing".".40

your

it h full 17-6urq

Alfred L. Aiken, 4

Covornor, Federal Reserve Bank,
2oston, Rase.

th
e .

bear lots of trouble




December 2nd, 1916.

Dear Aiken:

I was delighted to have your let
with so much news and will answer it by par

of the 28th ult.,
aphs.

Those meetings in New

fee

I hope you

deal of good.

ve of a great
t tht time is

About a different

wal bills, I recommended

that our Board establish

in rate, not because I

believed in the principle b

y to show deference to

expressed in Washin

wishes

that it is a departure

from every known

There can be no dif-

ference in the

bills accepted by the save

acceptor that wo
discrimi

spent.

ference in rate.

When London

ills issued by any accepting house,

again

it d'

iminates against all bills of that house on the theory

that

is straining

bill

the

credit.

same ac

tor is

but I d

To distinguish between two

really

anomalous, as I view it,

views ex)ressed by Warburg and his aoco-

ciates.

That press statement issued by the Reserve Board gave
me a great

shock.

but really I cannot

I

do not want to appear to criticize them,

agree

with the statement itself or the method

of putting it out and possibly I had better say no more.

-2To

Dec. 2, 1916.

Mr. Aiken.

It certainly looks like more active work for the
The with-

reserve banks while the flurry in money continues.

drawal of offerings of short government obligations of England
and France will cause heavy gold shipments to New York and unee money cheelper

less I aim mistaken, early in January, we wilt

than ever.

At the Washington meeting,

bunch,will be

I know can control that




e
energies

which

s clearing

directed t

llection

whole

me is the

The most important

subject

udied by a Committee and

of domestic exchange which s
.

o

tion with the

up the many unsettled matters i
system.

o

some uniform arrangement effects

possible.

If you can de-

--

further advanc

exchange problem i

and we have more experience

achievementth accomplishing.

in it, it will be

Treman to

e

foreign

until the domestic

rve bank

fer making Federal r

angements at

cussed

the greateet

it over

ith TreMan and

in, up the question of our

t Governors' meeting to be disonfidence and would suggeot your talking
urtis before the meeting.
hose Boston trust companies in your sys-

tem, come ove

ew York and see what you can do with our timid

ones.

Don't worry about the future of the Federal Reserve System.
It has come to stay'.

What it needs is sane, courageous and con-

structive management during the period of formation, which happens

To

Dec. 2, 1016.

Mr. Aiken.

to be the period when our greatest responsibilities are falling
on us. If there is any way by which you can get our here to
see me, just send
and will be

me a wire and come.

I

need no advance

notice

delighted to see you here.

Withers' books are old friends of ni

sonally a very warm friend.
be in London together and

e and he is

Some day, you an

I promise yo a trea

are going

perto

n meeting him.

came out here is still satisfact

s when I first
of this
the irksomen

banishment when I am feeling

er sometdmes gives me

Dr. Sewall says

is more of a problem

My progress while of course not as rapi

the dumps.

than my lungs.

ter and warmest re-

Thank you
garde.

Alfred

overno
Boston
BS/VCM




Aiken, 1",sq.,

Federal Reser

ass.

Bank,




Denver, Colorado,
December 24, 1916.

Dear Aiken:

I was delighted to

15th

have your letters-of

h have

to get the report of doings in Washington,
me in rather frag:nentary shape.

have said

o get back, but
ersonally, 1

you underrate your own success at these meetings

o follow rota ion in office

think it has coon a gra,ld thi

's work was in danger of being

in a job Vhere the import

s for what you may.

thank you n

-a preliminary meeting with

The practice est

,,ht at first create

thin

the Board

with

result at all, - it will mean a

thin
n o

better

the

f the Board to crack the whip

appearance of a

but I don't

so far reached

that you and others

The kind thi

abccutZ my absence make ma

exaggerated, but

19th and

fforts and

a

better understanding

e Board as to general policies, etc.
ala much ariposo

serv

KS

country

the plan of making checks on Pederal Re-

par exchange, and at

the first opportunity

ough Seay's report and send a memorandum which

I am h

you fellows may want to use at the

Committee Meeting.

and tact in the appointment of that committee will
action and we are all to be congratulated.
Confidentially,

Your own skill

insure no hasty

:a.rburg has sent me drafts of the proposed

amendments and I confess I am not as much shocked as you are except
in one respect.

I think the amendment to the Reserve Provisions of




2.

To -

the

r. Aiken.

Act, the

December 24, 1916.

amendment in regard to the retiring of greenbacks

in

and the amendment

regard to retiring National bank notes, also

the one in regard to Associate members, are
guess work

and too

d upon too mach

little accurate study of t

situation, and have so written 7arburg very f

facts of the present
tidy.

I think I eould favor all but one or

In principle,

Lendments, provided

thorough investigations disclosed that they would

weaken our re-

serve position throughout the

In brief, the amendme

o impressed ma as follows;

The associate membership re

probably not effect the attitude

of the large state in

large cities one way or the

other; they prob

does have this advantage:

if this more t

s not bring any response, it seems

to me the way 1
to Lida.,
by t

Le

some very strong measures, not

r

o enforce it, either by

discrimination,

tion or by some o aer kind of legislation which they canuot rebut the qaesti'. is - will it be safe to open the door in this way

is

e

t further stUd.
-.

the c

.f the

effect on the country's reserves.

01

1ed reserve provisions, I am sure after reading the

Minutes of the conference of agents that sufficient study has not been
given to the figures.

Some are claiming that it will increase the re-

serve requirements of country banks, others, whose ability to guess is
just as good, claie, that it will dangerously reduce reserve requirements,

it

hale I believe in the principle of this amendment, I don't think
shoula be based

on guesses.

The greatest danger is that the bi

in the Federal Reserve cities, particularly New York ghich always

banks

To - Mr. Aiken.

December 24, 1916.

carries a great deal more vault cash than is needed for counter
purposes, will gradually take advantage of this provision and the

effect will be a considerable release of cash reserves in the big

cities. They wont need so much vault cash w.

they feel they can

get it right around the corner on a moments n ice. You are quite

right about its necessitating big money depart nts for all of us and
that we would imiertake to establis
The supertax proposed on gat"

think has been sufficiently
handled under broader dis
Reserve Board, but by all ma

should be accelerat

v

t once.

1 Bank note cl

ation I don't

would rather see this matter

ers to be exorcised by the
etirement of National bank notes

ofsible, as they now ipterfere

with our Fedora

'sit to discuss these various

Don't

matters:

Maybe

oMe way or other Lnd, if you can,

.tis' plans as he is talkin

find

of making

dismay about that announcement of the Board's.

e out only a few days after Mr. Masson of the

d paid me a social visit here of a few days, at
which he told me of all their financing plans, 'ditch struc -ne as being
ver well considered. 1 almost had a relapse when that announcement
came out.
Success to your efforts with the Trust Companies.

We might have

landed some of the big ones in New York last spring had it not




been for

December 24, 1916.

To - Mr. Aiken.

the Clayton Act, but I fear all hope of success in that line has
been spoiled by this announcement about international loans.
A great mtlry thanks for your greetings
Christmas and the New Year.

I rejoice to thi

good wishes for

that you are on

hand all the time, with unimpaired strength, 1 sy for any emergency
and with that sound, level head of
With ever7 good wish for C

and the New

y yours,

Alfred L. Aiken, Esq.
Governor, Federal 1
Boston, Mass.

Bs/cc




I am,




Denver, Colorado,
December 24, 1916.

Dear Aiken:

This is replying to yours of the 19th ab

the foreign ar-

rangements, and please hold it in personal con

ence.

I am glad Curtis submitted the
to the governors and wish you
the

this matter
itten me a litt

re-action of the meeti

e as to

ement is one of such con-

siderable scope and impo_

Word was conveyed to me

that the Board will approve

le plan and that

existed as to its accomplish-

ment, but that t

milertaking any

to

transactions

without their f

s is a perfectly unworkable scheme

and I wrote

ivately to Warburg, that I was un-

willi
tha
the

able

New

lly to the embarassment and criticism

subject

ould be sure to result if we went ahead with the plan and
oard's final con
ad dignified

t was withheld.

then

It does not really seem honor-

a deal with a matter of this importance in such

cavalie
This letter is

particularl..; about that

trip to London. You may

be sure that I would not go unless it was absolutely all
to do so.

right for me

Dr. Sewall is careful beyond description and, in fact,

wits

an autocrat, but encourages me to believe that I will be able to do it
without possibility of harm.
without

you if you could

In that case I

arrange the trip.

certainly would not go
It is a matter
utmost




2.

To Mr. Aiken.

December 24, 1916.

importance to the Whole system and, personally, I do

not care to take

all the responsibility alone of reaching final conclusions.

It has occurred to me that you would be willing in a preliminary
way to do a little study that would help us

n we got down to work-

ing on details, and for that purpose let me

the following sugges-

tions:

Read Hartley -;dthers' two boo

The Meaning of loney", Alexan

Sinascou
'oyes' new boo

Chapters of the ?Xr" and Go

inancial

n Foreign Exchange; get the

figures in relation to th
gold coins; the exact cost in

'

American, English and French
times of Shipping gold between

London and New Yo

our mint; the circular

Issued by the A

o

he charges for treating

precious metal

of the Treasury Department made

in July I

regard to United States bonds,

pap°

renal/ and c

The one open qu stion to be dealt with of real importance is
th

thod of dealii
e of an a

kno'

while de

with gold shipments; it really requires the
to make the figures Lnd if you think it worth

will send you later an exact statement of the problem,

Which I confess I have not yet worked out to my awn satisfaction, and
you might be interested in taking a crack at it.
I have said nothing in regard to the situation with the Bank of
France.

This is equally important, and, to use a vulgar expression -

is just as ripe.

I have been in correspondence with Pallain, the




3.
To Mr. Aiken.

December 24, 1916.

Governor, ever since my return, and the docks are all cleared for
discussing more exact terms as to an arrangement with them, just as

soon as it can be taken up on the ground.

to find anti take

with me a comnetent Secretary who speaks Fre
fluently. If you
know of such a man, keep an eye on him for fut e Use.
So much for the present. i am
d already to

makin; the trip, particularly if you can go along.

Alfred L. Aiken, Leg
Governor, Federal
Boston, Mass.

BS .CC

Denver, Colorado,

January 3, 1917.

It was a great delight to have a few we

tough strange to say

voice over the telephone on New Year's day,

the telephone connection was a rather poor one
December I talked with Curtis from e

with your real
On the 26th of

in up on top of

the Rocky Mountains and heard him as clearly as tho':

e were in

u to call me- up and I wish

the same room. It was mighty

I might have been able to

boy of yours about some of

Our experiences In the mounta

Yours of the 28

me on my return.

If you

will keep an eye

aks French, it will cer-

tainly be a area

s, however, that he should be a

first-class sten

had occasion to take a man abroad
both cases needed a man Who could

get

a pile of stenographic work.
ometime when 'ye)

confW rice my variou

re in New York ask Treman to show you in
mmoranda on the subject of amendments.

I think

ost of them.

Curtis I hope will be out this month. If you can join him, don't

hesitate to do so and we will find means of housing the parti either
in the house or in the neighborhood.

Your letter of the 26th was also awaiting my return from the
mountains and I cannot thank you enough for writing it. These letters
Cheer me up a lot. My temperament was not meant for this sort of



111

2.

January 3, 1917.

To - Mr. Aiken.

treatment and keeping in touch with you fellows is my greatest
pleasure.
Tell that boy that some day I will send h'm an account of the
Christmas meek spent on to

of the great 2oc

What you say about that announcementid
oi mind, but I really ought not to

Mountain divide.
tes my own state

e abo

with the nossibility

of doing injustice to those fellows in Washington
touch with the office on the u

gest that at the first opp
Curtis.

In the meantime do

may be a little more di

My warmest

kte1ephone right




Alfred
Gave
Bos

35/CC

ea,

Federal Rose
, Mass.

long and sug-

t particulars from Treaan and

bout those negotiations; they
can put them over just the same.
for the New Year.
incerely yours,

e

have been in

Denver, Colorado,
January 18, 1917.

Dear Aiken:

It was fine to read your letter of the 12th

d the enclosure

th, it is pro-

Which accompanied it. As for the ace

gressing very favorably. I am still gaining weight an

Sewall is

most optimistic about my conditio

ess. He says

a good thing for me to get a 1

so 1 have arranged to meet

Arizona about the 29th of

Jim Curtis and Jerome Green

stay dawn there, but you

this month. I don't know

sit.

can imagine haw kee

probably go d

e you, and have just now received the first

ose proposed

Some of

I do net
improvemen

a few days before that.
ad amendments to the Act, as 1

ha
Lecently

I only wish you

th you. Curtis plans to leave

could join the part
on the 26th but I wi

will be

rovements over

the original

printed bill.
drafts, but

the proposed Reserve requirements is

nk the chant,.

an

rather makes matters worse, but what aan you and

I do when the Board closes its ears to suggestions from the bank managers

and apparently is not willing that bankers generally, or even those of
the system, be encouraged to offer suggestions to Congress, or even be
heard.

I do not altogether agree with you about the Associate membership
. cheme as finally modified.

I wrote Warburg that I did not think it would

effect the State bank problem one way or the other very materially, but



2.

if it was a first step in the program of ultimate coercion, I thought
it might be advantageous.

Personally I am coming to

the view that by

tax on checks, or some other similar method, State banks should be driven
tate charters.

to take membership, but permitted to retain their

is in

encountered the saLet difficulty in Boston that I

believe that if it were not for the Clayton Act, w

some of the large companies to take xnembD.
Ban,: did.

auld have coaxed

the Corn ;xchange

s

rieties" is vp y much to
ential to the development

The work of the go

the System and they

of

ed by a lot of machinery and

should not be

restrictions, but I hope

tee

edure Will not be stifled

by having members of

cussion.

New York, and

1 wish you greater success than we accctxxpli

What you say about the"fif
the point.

You

restrain freedom of dis-

I hope yo

ccess in your Washington con-

ferences.
ng the United

Which I

unfair
thing

longer found interesting and which
some matters.
known of t

States Investor,

struck me as being very

article in the copy you sent me is

the best

printing.
on and many thanks for keeping no in mind.

prospects of that trip to Europe brighten daily, providing of course
some of our friends in Washington don't step on me.

Yours

Alfred L. Aiken, 4:sq.,
Federal Reserve Bank,
Boston, laass.




very sincerely,

The




Denver, Colorado,
January 25, 1917.

My dear Aiken:

As yo e doubtless know, Mr. Treman, When 1

to accent the office of Deputy Governor of the D

taken ill, arranged

Reserve eank of NOW

York at great personal sacrifice to himself in ore to avoid the necessity
of the imuediate election of a suceesso n my offic
to afford me opportenity to recover good health

a
an stronday in

ted by the

doctors was nuite to be exnected
It is unfair that he sh

to continue the present ar-

rangement any loneer than is absolut
business of of the bank

for us to have a ne

cessare and, furthermore, the

as to mate it necessary

ha
ent Deputy Gov

or

in any event and

generally to

strengthen our offic

i organization,

that the wore will bear less

heavily on those who

e really be

ly overworked ever since the

fall of 19

matter-has bee
of our B

for sometime in the

a, consisting o

now writt
our own bank

hands of

a Committee

essrs. Woodward and Peabody, and they have
t they have condleded that the interests of

test as a ehole would be best served if you can

be persuaded to accent the position which

r. Treman now holds tempora-

rily and join our organization.

It now looks as though

I would be able to return sometime in June,

but 1 am frank to say that it would be highly inadvisable for me to return
at all, if it should involve such long hours of wore and each continued
pressure as characterized the first two years of our work.

therefore, be my

It would,

own wish that as much of the burden as possible be carried

2.
V° - Mr. Aiken.

January 25, 1917.

by you and that we should so shape our organization that the pressure
would not bear unduly hard on any one of us. I
Iiot authorized to maze

any suggestion at all in regard to salary, and t
the liberty of suggesting that if this arrangement makes any appeal t you at all that it
night be a good plan for you to have a
Peabody. Who stand ready to make an e

convenient

time.

I am selfish enough to

this arrangenent appeals

to me personally very strongly inde

will give me a feeling of great

confidence as to the date

future of the bank whether

I am able to stay or

If this sugge
profitable for both n
a visit with
Wit

,

are the time to run out here for
only stay a day or two.

rmest,regards and hoping to hear very shortly the result

of your d iberations,
ithfully yours,
Alfred L. Aiken, Esq.,

Federal Reserve Bank,
Boston, Mass.

BB/CC.




I am sure that it would be




Denver, Colorado,
January 25, 1917.
? MSONAL.

Dear Aiken:

My separate letter of this date you may con

this is quite personal for your own eye ale. Y
just what my situation is and what the
me, also somewhat of my own plans fo

that I can return around June

e reasonably short

a short visit out here.

those of the 1
and break down

tters being

a ITIX)

fairly aas

really ha

much my

A,4

He

tions, involving continuous

sume a

my return dope

ve in store for
t place,
ture. In the

ure seems

go immediately to Europe.

He thinks I may on returning need to
work and pressure 1

e entitled to know

ly well and he is hopeful

my doctor says that I am going t

says, however, that if

er official and

six r eiett years, I will last

in. In fact, the permanence of
arranged that I can take things

ight of the work without doing too

to tie myself down with too many resolutions

s to the future if that can be avoided, but I have it generally
7/years' of good work left in me, but that the
there are
in mind t
and plan

uncertainties

health really

make it necessary that

permanent plans

for the strengthening of our organization should be merle at once.

I have

even considered the desirability that later on when the bank is in applepie order, it might be a good plan for me to go abroad for a year, or even
more, in some capacity to represent the Reserve System and organize its
foreign business in good shape. All of these are very indefinite plans and

of course subject to the views and wishes of my associates. You are ex-

actly qualified to step into the bank and do most all of the things that




Aiken.

To - Mr.

January 25, 1917.

I have been doing, if not all of them, and I can assure

you that all

of those who are in our confidences as to this plan, welcaw it most
heartily.

It involves relinquishing, at any rate for
chief position in one of the banks for a

e time being, the

e ut

felt upon considering this phase of the matter that 7
important work being done in New Yo
of title or position, and

that

the office were such that that

Needless to say that I await
word from you as to y
Nith warmest

Alfred L.
Federal
BOston,

BS/co

en, Esq.,
erve Bank,

iss.

orship, but I have

nterest in the

eater than any
relations

with

onsideration
all of ns at

tter would present no obstacle.
test interest; even anxiety, some




Phoenix, Arizona.
February 10, 1917.
Dear Aiken:

Yours of January 30th has reached me here where

-Curtis and I are spending a week or ten days, and in order
:that you may make plans for trip west, I am telegraphing
you today as per inclosed confirmation.
If, after seeing Mr. Woodward and Mr. Peabody,

you are still inclined to come to Denver, I am onfidett
that the time will not be wasted, and
it will
afford me no end of pleasure to have a visit with you.
We have plenty of room to put you up at the house.

I will be delighted to learn that there is a

possibility of the proposed plan appealing to you.
With warmest regards, in which Curtis joins me,
I am

Faithfully yours,

Denver, Colorado,
February 20, 1917.

Dear Aiken:

41ipart

your letter of the 14th is answere

letter on the subject of the New York position,
particularly with regard to the decision

y my separate
I

the

am writing now
Board, Which

has been apparent to me for sometime past, to take th
own hands.

Nothing has caused me

ns into their

h concern as

e repeated

evidence of this decision, Whi

me from many quarters.

wont review them here, but they

ble and convincing.

greatly appreciate your wri

as I shall as

hold your letter in confidence,

since the Rese

ject has been debate

refully by th

decided to ac

Board was reorganized, this sub-

mbers of the Board and they have
instead of supervising them.

elude simpressing-The activities of the Governors' Conferences.
impression on
the very c

member
as

I

you to

I believe tha

This will

I

mind that I can hardly describe.

In the first

ement of our work it has been apparent to some
a.

the Reserve Board, high-minded and conscientious

y are, were almost all of them profoundly i6morant of banking matters

and such knowledge as they had was highly theoretical and in many cases

im-

411.

liallh
_




praeticable.

In illustration I will only recite the two years of /*angling

over collection matters.

Had the Board's wishes been carried out, we would

today be carrying between 4100,000,000 and .A50,000,000 of float and be shy
just that much gold.
to me.

The Annual Report to which you refer was a great shock

At first I was inclined to feel that it was distinctly dishonest to




ir
TV- Mr.

rI

Aiken.

February 20, 1917.

state the history of the collection matter in that way, but I have come
to believe that it is more ignorance and sort of an intellectual autointoxication, rather than any intention to mislead
law undoubtedly intended that the twelve

The fact is that the

s should be reasonably

eserve

autonomous, with supervision from ashington, and
consciously doing

e Board is now unlty of doing - grasp-

at every Federal Col,

ing for increased powers - and I dread and fear the co
big men are generall:; willing to d

are the men who accomplish
everything themselves.

uences.

Really

thority to oth

a

kind that feel they must do

MUD

greatly fear are not men of that

Our supe

type.

ed and the Reserve Banks

If the Govern()

are put under such

that their business is really run

from Washington, I a
work is done
I am not

1 result in a situation where my

Mo. .uld

f I did not say that by temperament

ified for that kind of a

members

the Board are

trusted

h actually

Washington,

position, and

I am convinced that the

yet experienced enough as bankers to be en, these twelve banks

and to accept orders from

result, would be absolutely intollerablo

for me.

Don't think that I say this in a spirit of

complaint.

The Reserve

Systea is drifting towards centralization and towards a central bank in fact
though not in form.

I could not possibly be satisfied to run a branch of

such a system, although I confess to a certain amount of sympathy with the
development, which is a logical one and almost a necessary one, but it

Mitld not come yet.




3.

To - Mr. Aiken.

February 20, 1917.

My belief is that the wisest course now would be for SOITO

of the

governors at the first opportunity to have a frank discussion of these
matters with the members of the Board,

and endeavo

u/e unwisdom of interfering with the status quo.

to convince them of
ur governors' meetings

have in a great measure made the system, although

Reserve Board has

gotten all the

t the:: let well

credit for it as they sho

alone until the

subject of

centralization can be dealt

to face and in such a way that we

enough

face

squarely,

erstand each ether and avoid

dispute and dissention?
In conclusion, let me say
talk With the Board about
being made.

were home I would have a frank
try

Being a

personal letter to Fred

Delano, not referrin

d tell him just how I feel.

Board adopts and per

B

?.,s described in a. separate letter,
t.

ween ourselves,

authorit

work needs to be

t is needed in Washington is a stronger
of the Reserve Board, and a more liberal policy

in dealing

f autonomy with Reserve Banks

more centralized and authoritative and

encouraged to develop independence and self reliance.
will deal with the matter as you think best.

believe it is wise, and

The Board's own

the

banks

_lfred L. Aiken,
Boston, Mass.

should

be

I hope you and Rhodes

Show this letter to him if you

then tear it up.

Best regards to you, old man, from a very restless partner.

BS/CC

If the

I shell hore to get in shape to

return home,

and then

convince them that a mistake was

bh)
Denver, Colorado
February 20, 1917
PERSONAL
Dear Aiken:
In part your letter of the 14th is answered by my separate
letter of the subject of the New York position, and I am writing now
particularly with regard to the decision of the Reserve Board, which
has been apparent to me for some time past, to take the reins into
their own hands. Nothing has caused me quite so much concern as the
repeated evidence of this decision, which has reached me from many
quarters. I won't review them here, but they are unmistakable and
*Q0Vrinciaag_.
I greatly appreciate your writing me and will hold your
letter in confidence, as I shall ask you to hold this reply.
I believe that since the Reserve Board was reorganized, this subject has been debated carefully by the members-of the Board and they
have decided to actually run the Reserve Banks instead of supervising
them.
This will include suppressing the activities of the Governors'
Conferences.
It makes an impression on my mind that I can hardly
describe. In the first place, from the very commencement of our work
it has been apparent to some of us that the members of the Reserve Board,
high-minded and conscientious as they are, were almost all of them profoundly ignorant of banking: _mat-tett, and such knowledge as they had
was highly theoretical and in many cases impracticable.
In illustration
I will only recite the two years of wrangling over collection matters.
Had the Board' s wishes been carried out, we would today be carrying
between $100,000,000 and $150,000,000 of float and be shy just that much
gold.
The Annual Report to which you refer was a great shock to me. At
first I was inclined to feel that it was distinctly dishonest to state
the history of the collection matter in that way, but I have come to believe that it is more ignorance and sort of an intellectual autointoxication, rather than any intention to mislead. The fact is that
the law undoubtedly intended that the twelve Reserve Banks should be
reasonably autonomous, with supervision from Washington, and the Board
is now unconsciously doing what every Federal Commission is guilty of
doing -- grasping for increased powers -- and I dread and fear the consequences. Really big men are generally willing to delegate authority
to others, and those are the men who accomplish much more than the
kind that feel they must do everything themselves. Our supervisors I
greatly fear are not men of that type.
If the Governors'Conferences are abandoned and the Reserve Banks
are put under such directory supervision that their business is really
run from Washington, I am afraid that it will result in a situation
where my work is done. I would not be honest if I did not say that by
temperament I am not qualified for that kind of a position, and I am
convinced that the members of the Board are not yet experienced enough as
bankers to be entrusted with actually running these twelve Banks and to
accept orders from Washington, as will undoubredly result, would be absolutely intolerable for me.




c

Mr. Aiken

Page 2

February 20, 1917

Don't think I say this in a spirit of complaint. The Reserve
System is drifting towards centralization and towards a'central bank in
fact though not in form. I could not possibly be satisfied to run a
branch of such a system, although I confess to a certain amount of sympathy with the development, which is a logical one and almost a necessary
one, but it should not come yet.

My belief is that the wisest course now would be for some of the
Governors at the first opportunity to have a frank discussion of
these matters with the members of the Board, and endeavor to convince
them of the unwisdom of interfering with the status quo. Our Governors'
meetings have in a great measure made the System, although the Reserve
Board has gotten all the credit for it as they should. Why can't they
let well enough alone until the subject of centralization can be dealt
with squarely, face to face and in such a way that we will all understand
each other and avoid dispute and dissension?
In conclusion, let me say that if I were home I would have a frank
talk with the Board about this and try and convince them that a mistake
was being made. Being away, I am going to write a personal letter to
Fred Delano, not referring to your letter, and tell him just how I feel.
If the Board adopts and persists in this policy, I shall hope to get in
shape to return home, finish my part of the job, as described in a separate letter, and then quit.

Between ourselves, what is needed in Washington is a stronger authority
in directing work of the Reserve Board, and a more liberal policy in dealing
with questions of autonomy with Reserve Banks. The Board's own work needs
to be more centralized and authoritative and the banks should be encouraged
to develop independence and self-reliance. I hope you and Rhoads will
deal with the matter as you think best. Show this letter to him if you
believe it is wise, and then tear it up.
Best regards to you, old man, from a very restless partner.

[unsigned
Benjamin Strong]

Mr. Alfred L. Aiken,
Boston, Mass.
BS/CC




Denver, Colorado,

February 20, 1917.

Pats CEAL.

Dear Aiken:

When your letter of the 9th reached me I

-Iso

appointed that I was tempted at first to telegraph

u and urge a recon-

sideration of your decision, but after

municate in such matters and I feared

grievously dis-

s no way to corn-

at it might be

in the

office and cause trouble.

I cannot advance much

respecting personal and

family reasons for your remaining
if they prove to be a b

as very deep regret.

ideraone, possibly I

other hand, as to all
in writing you again

y uncertain.

e resto

ly so that I can return to the office

chances are tha

to Europ

d I hope wit*

duration, bu

am justified

Dr. Sewall thinks

but neve ve such strenuous work as the last few years.
think t

On the

ust how I feel.

My own future

mg health

; those are beyond my ken and

Personally,

will get back some time this summer, then go
ou, then put in a period at the bank of indefiniee

ot very long and then quit.

When I say pit I mean

specifically as Governor of the Bank, although it may develop that I will

want to try and arrange to go to Europe for a year or two to represent the
bank there and work out to a reasonable perfection our foreign banking arrangements.

These are matters, somewhat indefinite but nevertheless important,

which all bear on your decision and which I had hoped to discuss with you
out here.




In other words, I should think the chances would be almost nine

February 20, 1917.

To - Mr. Aiken.

Out of ten that in a year or two you would step fully into my awes.

You will never realize as fully as I do, until you are in the
New York office, that it is in a way the biggest banking position in the
country.

It is, of course,

desirable that the man Who occupies it should
not know what your

be reasonably independant outside of his aa
situation in that regard would be, but
cannot help but feel that it is a mist

for you net to

ependende, I

barring the

me to New York,

and

unless the personal and family reasons present a definit
If, upon receipt of thi
way to a change of mind, ma
ing a possibility

P-d then

u can by

absolute bar.

ossibility see your

call up Woodward, Intimaton the train and come out

here to see me.
. would accept your decision

If this was sol
without demur.

It is not

however, but much more than that, for I
-Id in that matter I know you will take

regard it as a matter
off your hat to nobod
very keen to

you in New York, and you are the one man in

.spuld pick as an associate and successor; this I say

the thole

with the utmo t franknegs in the hope that it may influence your decision.
Telegraph me I

'ou see any possibility of a change.
:;'aithfully yours,

Alfred L. Aiken, Esq.,
Federal Reserve Bank,
Boston, Lass.

BS/C0




Denver, Colorado,
March 15, 1917.

Ma dear Aiken:

Disappointed though I am at the outcome o

nevertheless hardly
you in

Chicago.

detracted from the keen enj

too

It was, however, only

our discussion, it

ent of my visit with

brief.

While this jotter is particular

or making the

trip, which I do most heartily, I a

:nt to say the

your position and feelings abou+
them.

New York and sympathize with

I have about determin

run along

in

orstand

ssociates there to let matters

their present shano

as there seems to oe such

an excellent possibill

ew York in a couple of months

and it would be a

stil

also hold your own

eyance, merely to the extent of

keeping yourself in

ich would enable me to have another

n Jais

bout with

Let me suggest that you

get home.

ve a long letter from Montague Norman today, in Which he expresso
trip to

is conviction t

aon before

arrangemen ,

it would be necessary for me to maee another
an finally close no the detail of our English

ve all along considered to be likely.

Best regards and once more

many thanks for a bully visit.

Faithfully yours,

Alfred L. Aiken, Esq.,
Pederal leserve Bank,
Boston, Mass.




Denver, Colorado,
March 27, 1917.

Dear Aiken:

Many thanks for your telegram and letter of

the 21st. I am now

satisfied that no changes will Je made in New York before my return, which
is almost certain to be June 1st, or thereabouts.

It has been a

help and comfort to me to feel that you have been able to take a little
hand in this matter and help along.

I

am

not going

Exchange from here.

to attempt

any agency about the Federal Reserve

/t would not be fair for it is a complicated matter

and needs discussion rather than academic
Now as to the Federal

treatment from a

Reserve Board

situation.

distance.

I think possibly

that some of my correspondence with Mr. Delano has helped; he has just
been here and I have had a most satisfactory visit with him for two days.

Things did get stirred up for awhile; in fact the whole atmosphere was

lectrical. and I believe what appeared to be the
the

Board added sense of responsibility.

The

approaching crises gave

crises was more

imagination

than actual and I am sure things will lot up so far as tension is concerned and
Chicago.

you find it possible, carry out the plan we discussed in
The meeting in Washington on April 4th will provide the oppor-

tunity.

I have a pretty heavy mail today and won't attempt a detailed account of my doings with Delano, but i had a

delightful visit.

Once more, many thanks for that fine visit at Chicago.
it tremendously and it did me a world of good.
Faithfully yours,

Alfred Aiken, Esq.,
Boston, Mass.



2.

March 27, 1917.

To - Mr. Aiken.

P. S.

On giving further thought to the subject of your meeting in Wash-

ington on the 4th and before any private discussion with the Board on the

subject of friction, etc., I

thinic it might be a good plan for you and

Delano to have a quiet discussion along this line.
believer in the

principle of

management of each

Reserve

in bringing about what

to your efforts.

BS/CC




He is a thorough

developing autonomy and responsibility in the

Bank and his

suggestions

you and 1 discussed,

will be of great value

viz.- better relations.

Success




Denver, Colorado,
April 4, 1917.

Dear Aiken:

I an very much obliged to you for your nice letter of

march 30th

and for sending me copy of your letter to the Reserve Board on the subject of the Treasury bills.

Quite confidentially, I have just written

Curtis on this subject as follows:
"About the 2%. certificates of indebtedness, i agree entirely
with the attitude of the Board as to the way this matter was handled
by the Secretary, but think had I been there I might have recommended that no resolution be prepared, at any rate in exactly the
form as finally drafted. Personally, I would like to have talked
this over with LicAdoo to get his point of view before taking action.
In the first place, he is under great nressure r'id in the second
place I think he is not very well posted on transactions of this
character and rossibly has not had time to get information from
those who might be of assistance to him.

The British Government borrows immense suns of money even in
times of peace on short bills of various kinds. Sometimes those
are placed in the market on tenders, in fact I think that is the
usual procedure. Announcement is made by the Bank of England that

they will receive tenders for so many millions at 30 days, so many
at 90 days, so many at 6 months. Bids are made on the basis of a
rate of discount and allotments are made by the Bank of Lngland to
bidders, according to the rates bid. The other type of borrowing
conducted by the British Government is directly from the Bank of
England. This in an operation that is constantly taking place
and insteaa of reqpiring in each instance a protracted negotiation
by custom, the Government always pays the 3ank of England 1/2 of 1;4
less than the bank's minimum discount rate. Our minimum discount
:ate is 2,, our maximum 4, consequently our arrangement would be
a/2 of 1% below the mean rate. The mean rate being 3, would make
the rate on these borrowings 2-1/2;1, and, as the rate for bills is
uniform with all Reserve Banks, it would apply equally to each lender."

The Reserve banks In the middle west may have been courting favor
or displaying ignorance and lack of

experience. I

really think

best patriotism just now will be displayed by doing business
conservative lines,

rather

for some unsound financing.

that the

on sound and

than 'laying the foundation by excessive zeal




To

April 4, 1917.

Mr. Aiken.

The subject of the Fiscal Agency of the Reserve Banks is just
now one of very great importance with the Government about to embark

upon some huge financial operations. I wish we might agree upon a

sound, conservative program with the Secretary of the Treasury, so as
to avoid airy difficulties which may

otherwise mann. There is noth-

ing I can do from here because, it means a lot of discussion and inquiry
-but I hope that you and the others have it in mind that our money market
may have some bad jolts if arrangements for

government loans are not

ii

very skillfully handled.

Best regards to you and success to your Washington meeting.

Very sincerely yours,
:\1\

Alfred L. Aiken, 12;sq.,
Federal eserve Bank,
Boston, Mass.




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on back hereof, which are hereby agreod to

Denver, Colorado,

April 5, 1917.
Alfred L. Aiken, Chairmany
Shoreham Hotel,
Washington, D. C.

Hearty thanks for your message aa affectionate greetings to you and
your comrades. I confidently

expect to be with you at the next mooting

and wish you complete success with your program.
Benjamin Strong,

Chg. Benj. Strong,
4100 Montview Blvd.

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Denver, Colorado,
1917.
April

le,

My dear Aiken:

I am vore sorry there has been delay in answering your telegram

of the 14th and your letter of the 9th, but I have jeet Deem off on a short
trip to Trinidad eith so ee friends which explains the delay.

.eany thanks for your letter and the interesting aocount of your

activities. Both the Boston

and New York Banks too e the correct position

in regard to the snort note issues of the Government and I am sure it has
done

MD

harm.

Of course alcAdoo is under great pressure.

As you say, the actual placing of the large loan by the Government,
say $1,000,000.000, is a mechanical matter so far as gettine subscriptions

is concerned, but the handling of the payments will require great sill to
avoid disturbance to business and i have yet to hear froi anybody that the
people in Washington are alive to the importance of that feature of the

matter. On that and other

points covered by

no memerandue you send the

following comnents seen justified:
Ag3Uil2e

it is

essential

that the first

issue should at once

sell at a premium, I.thina the amount should be limited to say ;1,000,000,000.

In my opinion he bonds should be exempt from all tax except the inheritance
tax or the Federal Government and income tax, or possibly only the surtax.
I realize the impossibility of getting an agreemeret as to the income tax
liability,

but

nevertheless in my Vielff tee exemption of the bonus of the

Government froa taxation is an unsound and mi,ht
a dangerous principle.

in

time of war prove to be

It creates a preferred class of richer people who,

theoretically, might represent billions of the country's wealth, but who




2.
To - Ur. Aiken.

April 16, 1917e

would pay no taxes whatever if all their pronerty were invested in Government bonds. Federal Reserfe.banks should be allowed to convert their

3's and some steps should be taken to protect the National Banks i their
ownership of the 2's. It would be a sad blow to the National banks to

have the value of their 2's rarked down to 90, or oven below that, and
some plan should be devised for protecting them. I would prefer to see
an arreneement by Whichtheycould convert a proportion of their holdings into the new bonds which would not have the currency privileges. and make

that the means to reduce the amount of outstanding National ban- notes.
EAU: 3-1/2, is the minimum. Bonds should be convertible into eny
now bonds issued at a higher rate during the period of the war.
PRICE: By all means they should be sold at par and accrued interest.

TillAS: It is difficult to arrive at ane determination on this point
without knowing more of the Government's program.

1 do not think we should

borrow for any long neriod but should rely upon teeation to clean up the

whole war debt in e short tine. Provision for sinking fund, or for retirement by annua.L drawinns, should I believe be modified so that the Government
could make purchases privately at the discretion of the Secretary of the

Treasury. It would strengthen the Government's credit if sinking fund pro-

visions were made mandatory in regard to all the old outstanding issues of
the Government.
DMJUIIATIONS: 4100.00 bonds ar e the smallest that can be

economically issued, but I believe it would be well in a popular loan to
provide for some of a smaller denomination.




To - Mr. Aiken.

April 16, 1917.

SUBSCRIPTIONS: Much as I would lice to see the Reserve Banks

handle the Whole job, I cannot help but feel that we are ss yet not very
well equipped to do so and to maae certain of success, accuracy and a

It will be neceseara to solicit
the assistance of the best bond houses. They can assist in a publicity

intaxm of Inconvenience to the public

campaign and cooperate in obtaining large advance subecriptions from big

institutions and bond buyers, /ike the Savings banks, Insuaanue cmpaaies,

etc.; that always helps a bond sale.
aaTH0a ea PariaaffT: I would not like to exprese an opinion on this

point without the data as to number of subscriptions and =mats received

for the Saanish aar loan. It night be dangerous to have all amounts of
e1000 or leas paid in full at one time. On this point of avoiding disturbance to the money maraet the analish and arench sastea is andeubtedly

the best. The Government borrows on short obligations la anticipation of
day

the taxes and proceeds of bondsaales, short loans are iaseed every/throuah

the Bank of Lagland so that the maturities are saread daily over a wide
period and whoa a big loan is made, to a great extent, ore band washes the

other, the loan being payable in installments and the ahora borreainas repayable from day to day. The larger, of course, the amount of the short

borrowings. the less the disturbance resaltina fram the collection of
sebscriptions.
DISPOSITICU OR PROCEEDg OP SUBSCRIPTIONS: The plan suggested strikea

me as being allright, except nothina is said about security. The Reserve
barge

shoull have ample security and a good deal of latitude should be per-

mited as to the kind of security which they might accept. Of course this

To - hr. Aiken.

April 16, 1917.

raises the questioe of interest, also the question as to whether or not
we are interferine with the discount operationc of the aeeerve banes. On
the laole, I am inclined to thine the deposiearies should be required to
allow say 2% interest. If that plan is adopted, the records of the Treasury
Department and Comptroller's office should ee made available to the Reserve

banks in order that We may be protected as to any shakey or nsound banks.
ArVISORY COMXIle This is, of course, ae excellent suegestion.
rieferring to the comeents attached to your memorandum, of whose

authorship I am not advised, the following occurs to Xe: I agree with

everything on the first page exceet as to the possibility of 42,000,000,000
of bohds selline readily at 3-1/2;1.. That is tee kind of an opinion which

would naturally develop in the east Aeon) there is a reat deal mere enthusiasm than there Is throleffieout the West. It would be resa4

better finencine to offer only $1,000,000,000 at first for

safer and

the following

reasons;
'ee'e

(2)

facilities.

it will test the market.
It will-bc eaelar to handle eith our present inadequate

(30 it will reduce the preportion of ben& subscriptions.
(4)

It will minimize money

(b)

It will aesist the development of the plan of temporary

borrowing.

market disturbances.

(60 It will assist in creating a premium on the first issue,

eich is most important.
(7)

procedure.

Generally speaking, it is a more conservative plan of

?RICA:: I do not agree to the plan of 120 maximum limit.

prevent there being a good



premium from

It will

the outset, unless allotments are




To - .4r. Aiken.

April 16, 1917.

very greatly reduced in case of a heavy subsovAotion, and it does destroy
some enthusiasm, everybody feeling that they can get all the bonds they
want.

tr.w bids can be dealt with by the exercise of care in making al-

lotments, for Whioh absolute dlscretion should be retained.

,77E77-:3- la general.

I would agree to this content.

:41.TB07). OP

I have covered most of this above. it will be

dangerous to provide that payment of subscriptions of WOG and over be
made at one time. It is not at all unlikel!7 that 2,000,000 subscriptions,

not exceeding ,11000 each and averaging possibly WO each, be received for

this loan. That would be 11,000,000,000 to be paid at one time and bring
about the very condition we seek to avoid. In other words, whoever prepared

the comment is still thinking in terms of hundreds of millions instead of
thousands of millions. I am inclined to think qnarterly distributions of

payment of larger subscriptions, or possibly five payments sixt days apart,
would fir the case. But again, it is absolutely necessary that this scheme
be combined with the plan for short borrowing which is of suorene impor-

ce. The elaboration of the scheme of deposits with member banks and
oroopective member banks imoresses me favorably.

WorWing along the lines

su6gested in this memorandum, I doubt if any serious disturbance would re-

sult from the handling of $1,000,000,000, but would be less certain of
avoiding disturbasces were the amount doubled at the outset and at a time
when the Governoent's short borrowings had not been extended to a very
large sum.

Very sincerely yours,

lfred L. Aiken, Lsq.,

Wore' Reserve BanY,
Boston, Mass.




April 16, 1917.

To - Mr. Aiken,

P.S.

Since dictating the above, letters from the office indicate much

discussion an0 some uneasiness as to the position of State banks and Trust
Companies, if they are not made depositaries of the proceeds

of the loan.

I have given this much thought and, frankly, while it is a close question,
am inclined against the plan of making State banks depositaries for the
following reasons:
The

are not and never have been fiscal agents of the eovern-

ment and it would mean a

departure from a 50 year precedent to make any

change at this time. If they want the proceeds deposited with them, let
them come forth and dhow good reasons, the best reason being membership in
the Federal Reserve

System.

We cannot, however, discriminate against State banks that are

members of the Reserve System, who should act as depositaries just as
tional banks would. This presents a difficulty in that any legal grounds
of objection to State institutions acting as depositaries would, I believe,

apply to both member and non-member state institutions.
The chief objection is the great number of

state

institutions

of little known responsibility who will be most clamorous for deposits.
Vie have power of supervision and examination of member banks

and, therefore, means of getting information Which

would justify making or

declining to make a depositary of each one of them in detail.
be the case with State banks Who are not members

of the Reserve System.

National banks and Federal Reserve banks have a
a certain monopoly of fiscal agency relations with the
State banks do not and should not have.

This cannot

right to enjoy

Government which

i do not see Why the

State banks




7.

Awl]. 16, 1917.

To - Mr. Aiken.

should erect this appointment now, any more than they would in ordinary
times, exeept a national emergency made it impossible to handle Government

finances without their cooperation and assistance. 1 do not believe that
their cooperation and

assistance is absolutely essential because i think

the Government loans ean be handled smoothly and effectively through the
Reserve and member banks alone and it would seem unfortunate to have the
Government admit any necessity for their cooperation in the matter of government deposits.

It would look as though their allegiance was

being pur-

chased, because they have never had government deposits in the past.

The only argument in favor of having them appointed is the

that they are

constructively American citizens just

fact

as much as National

banks are and in time of war discrimination between the various business

agencies of the country should be avoided to ever, extent possible. I

only wish it wore possible to put the matter on strictly legal grounds so
as to avoid any antagonisms. The best thing, of course, would be to have
them take membership.

Summarising therefore, on the whole I favor limiting deposits to
member banks, but think it is a very close question and am open to convictim on the subject.

85/0C

P.S.

Please refer to page

14 of the publication of the Treasury Department of JUL, 1915, entitled "Information Hespactin,: United Statc:,
bonds etc." for data in regard to tie 4200,900,000 loan of 1898.




hay 1, 1917.

Dear Aiken:

Nothing could give ne more pleasure than

our nice note of April 29th.

I can't tell you how mach I miss our rep-

ular meetings, nor do I need also to tell you that
these past two and one-half years have developed a

personal affection as well as a feeling of partnership with you which nothing can alter.

I am looking forward to a little meeting
with you before returning to Colorado for another
month or six weeks of golf.

Faithfully yours,

Alfred L. Aiken, Esq.,
Federal Reserve Bank of Boston,
Boston, Mee.

13.9,41AB

September 15, 1917.

PRIVAIT AND ODFFIDENTIAk

Dear Aiken:

I have been thinking over our talk in regard to those

offers you have, and the first thing that occurs to fle is to take
your own directors into your confidence just as soon as possible;

next, to see that the Federal Reserve Board is advised also;

and

last, that you decline them both.
I do not say this without consideration.

This war is

going to last some time, and the after-effects will last longer.
During all of that period you may be suro no change in the political

status of the Reserve banks will occur, and you will be in a position when the Isar is over and your war service in completed to get

many a bank presidency just as attraccive as either of those offered.
In general, I think you would be sheathing your sword in the middle

of the fight.
-

This is stating it vary frankly and bluntly, but I know

that is what you prefer.
I highly appreciate your taking me into your confideKce.
Very truly yours,

Alfred L. Aiken, Zee.,
Federal Reeerve Bank of Bewton,

Boston, Pass.
BS/RAH







it
11

rr.F.

sit
!I, I

4,

November 14, 1917.

Mr. Aired L. Aiken
Federal Reserve Bank
Boston, Mass.
My dear Piknn:

This is my first opportunity to
reply to yours of the 3d.

It is really a privilege to pro-

pose you for membership in the Metropolitan Club
but do you wish to becemo a resident or non-resident
If the former it will take somerehat more
member?
time and the latter I think could be arranged without much delay. Then, 1 think there is an arrangement by which you could be posted for transfer to

resident membership if you desired to do so later.
I won't write to the Club until I hear from you, and
please write me here.

am taking good care of myself down here,

loafing mornings and playing golf after lunch. I hope
to return to Now York some time next month better than
ever.
Mr. Winser turned up here yesterday and
I was tempted to reproach him for defection. Noone
will miss you from the ranks more than I will and I
do hope that when you become 'Irosident of that great
bank you won't let it in anyway interfere with our
regular meetings whenever opportunity for them arises.

OtheriAse I am going to miss you very much indeed.
You will maim a great success of the work

and I will watch your progress not only with satisfaction
but with pride.




Mr. Alfred L. Aiken

ANS ,a1

With every good wish

Very sincerely yOurs




December 7th, 1917.
Dear Aiken:

I know you will understand my not replying sooner

to your letters of the 12th and 16th.

I just allowed mail

to accumulate while I was away because that seemed wiser than

struggling every day with a mass of mail.
I missed the Washington meeting very much but hone

to see you there next week.
Also, I am putting your name up for non-resident mem-

bership in the Metropolitan nub and will attend to the neces-

sary details in Ingard to a seconder, letters, etc.

I wish you

would send me the full particulars - the institutions which which

you have been corrected in the oast, your class at college, fra-

tennities and clubs, etc. This will enable me to send a full
and irtelligent letter to the governors and I want to he the first
to welccne you to membership as soon as you are elected.

It is a sad blow to me to hnve you leave the System.

The association has been the bright spot in the work because I
have been conscious that amidst all MI@ jealousies and pulling
and hauling in a new thing where New York was naturally and in-

evitably at a discount, you have been the one man in the whole

bunch to see that thing straight and to impress straight views
upon the others, not only in the reserve banks, but in Washington.

Don't let us let this friendship drift backwards.

I have it in




-2-

To

12:7:17.

Governor Aiken.

mind that some day we are going to have some weeks in the woods
with fishing rods and no business cares to think
that, I don't

think you can divorce yourself

System entirely when you are

President of

bout.

Besides

from the Reserve

the Shawmut Bank, and

will expect to see you at the office every time you are in New
York and I will expect you to reserve a night for me whenever (you
come over.

or a big one

We will have some sort of a party, either a tyro-some
a5: you prefer.
of
can only close this letter with another expression

and
my regards coupled with wishes for your success, prosperity

happiness much warmer and more cordial than you realize.
Faithfully yours,

Alfred 1.,Aike41, 11341.,

Federal Reserve Bank,
Boston, C,ass.

B31VCV




U
PER3ONAI;

January 24, 1918.

Dear Alfred:

Thanks for yours of the 21st instant.

I can only answer

it with one word and that is "courage"!

erom first to last, the banks of the second eederal reserve

dittrict have managed, one way or another, to take and pay for over
43,500,000,000 of short loans of the Government and nearly 42,000,000,000
of the long loans, or, roughly, $5,50o,000,000 and they are a long way
from being "broke" yet.

Don't forget that there is a circulation of

credit taking place which will not, permanently, deplete bank deposits.

And the banks of New

agland, or even the banks of Boston, are not go-

ing to lose 43,000,000 a week in deposits, even if they lend 43,000,000
a week to Uncle Jam.

We must talk this over in the near future and I hope you can
get down to New York and let me introduce you to the Metropolitan Club.
Best regards and once again "courage":
Paithfully your friend,

Alfred L. Aiken, Esq.,
President, National Shawmut Bank,
Boston, M465.

BS/M3B

June 17, 1918.
Dear Alfred:

I find your note of the sixteenth on my desk this morning and

hasten to tell you how very greatly I appreciate what you say and your

thoughtfulness in writing it.
The meeting at Princeton was delightful in every way, but very
serious.

Out of nearly 1,700 under graduates, Princeton has about 1,000

In the service and this year they are undertaking a very extensive and

thorough military course for all under graduates who elect to go into the
services

Commencement this year was, therefore, more war than university

and I was tremendously impressed, as was every one else who attended.

I wish you had been there, not as a spectator but as a partici-

pant, and, to tell you the truth, I felt very guilty in receiving the
honor when you, more than any other, deserve it just as much as I do.
I am going to make I a point while at Woods Role this summer

to have some Good visits from you, fishing or loafing, or doing anything
that fits your humor at the moment.
With a thousand thanks and best wishes, I am,

faithfully your friend,
411E2114

Am44,4;pq.,

Piiiiaefit, National Shawmut Bank,

Boston, lass.

BS/MSB




June 21, 1918.

My dear Alfred:

I was delighted to learn of your having' been honored
by Yale at commencement this year and wish that 1 might have

been there to witness the ceremony.

I shall never cease to regret your lelving us, not
withstanding that your successor seems to be quite equal to
the job,
With waruest congratulations, I am,
Very sincerely yours,

Pireiiident,UationarShawmut Bank,
Boston, Ness.,

I




BSIMSB

NO 1-1919
CONF1 -

111111fr

FEDERAL RESERVE BANK

November 5, 191.

ALA

ter elfred:
Thank you for your letter of the fourt..
I think I an ju '.efied in ldvising you Liu:te confidentially

that Ir. Leffingwell h

at

:

not determined upon a roiicy ie regere to let.

th e moment, and I believe will not do ::.o without tbe fuileEt posAble

con.ultation wail the officere of the Reserve Banke.
11111°
-

u.

ryin

..

-

iCE

rolicy.

That hau been hie;

Further, taet Lne rate of 4-1/4%, which

a6

you know

to only about'106,0e, jCi of certefice,te_ now lergely hold by

taweeyere, was eAabliehed simply for the ur,oe?, of mainteinine that

rate, - althoueh it will not-be an effective one, - eo that the Tree:Airy
is not foreclobad entirely in borrowine, at that rate in ease circumetances

should develop to make it desirable.'ee far as this bank is concerned,
,

I have definitely ,.tet d to Secretary Glees an- to Mr. Leffinovell, 38 well
,

to the Federal heaerve-loerd, ter,t our hands mut be free in mte mak-

ing,

although ,ve, eieee,

;:rc,

0 e, es heretofore, to consult freely with the

Treeeury in all of these mattere.

I am optiMirtic that we are etertie;,: in the

ri,ht direction

and can exct rood reeults in due time.
on't you dro, in to see me the next te
Sincerely yoLe

L. Ain:, EL.,

,et, Natiopel Zhawmut Lank,
I-.

er-1, Mass.




gia'-)

you are is'eew York?

Novembor 5, ig19.

CONFIEShTIA-i:

Der Alfred:

Thank you for your fetter of the fourth.'
think I412 juatifiod in advising you .,4uAe confidentially
.

t Ir. Leffingwell 114-1

not determined upon a ioiicy in rogrd, to nass

at the moent, :Aid Ibelieve aill not do

o

ithout trio fuilest pozAble

conulttion with the officers of the Reeerve Eanke.
uhvaryin policy.

That has been his

Further, that the rate of 4-1/4%, which az you know

apt:lies to only about

of certific-te now largely heid ty

taxpayers, was stablished aimply for the .uri,ose of miliztaip.ini; 0.1A,

rtAe, - although it will not be an effective one, - o that the Irou:ury
L, not foreclosed entirely in borrowing at that

in c':e circumetanoes

.o far au this bank it, concerned,

311ou1d develop to make it denirablo

have definitely stat d to Secretary Gls,ss &tic', to Mr. Leffingwell, as well

t,o the Federal hesrve Board, that our hands mutA, be free in rate ma.k-

.,

altho.igh we, also, propwre, as heretofon2, to consult freely with the
in 611 or thosb matters.

am optimietic that we are stLrting in the right eirecticq.
and can expect good results in due time.




Won't you dro, in to aee me the next time you are in Now York?

incereiy yours,
:i.fred L. Aikon, Esq.,
Shawmut Eank,

'6osten, Mans.




CONFIDEO21AL:

November 7, 1919.

My dear Alfr000

Won't you write ma your test of.ioion k4,on tho cholooter
and ability of Tom F croon?

I just heard that ho is foot-l000e

and I know of an impottant ond attrootive poaitioo which ho might.

be qualified to fill, but will need to h,vo; the test poboible information.

First, would ha do for thio boak in ony coLocityl
!:eoond, if not, would no do as a vico presidant of ono
of the oldoot, most conoarvotive and best monagod

comi.:onies

in New iork/

Thio letter is most confidentiol; your reply will be
Led 46 such, ond I would be glad to have you write me ae fully

as poesible.
r",incarely your),

Alfred L.

ikon Es,

Notional-rr];-- o.o.ox!,
mu tank,
Booton, Moos.

BS.MSB




October 21, 1921.

Dear Alfred#

I have your letter of

October 18

before me for acknowledgment,

which is somewhat delayed owing to absence for a few days.

I am entirely in accord with your suggestion that a meeting

should be

arranged of the

original Governors of the

Federal Reserve

Banks, to be held either in New York or some other place
agreeable.

thaj: may be

Such a meeting should surely prove most pleasant and

enjoyable, and be the means of bringing closely together those who
so ably conducted the affairs of the Federal Reserve Banks during
the early days of

their inception.

I note from your letter ef October 20 that the report of the

Hearing before the

Joint Commission on Agricultural Incuiry was re-

ceived, and hope you will find it
With my best

interesting

wishes, believe me,
Yeurs sincerely,

Alfrei L. Aiken, Fee.,

c/o National Sbawmut Bank,
Boston, Mass.
GB:MM

reading.

November 22, lS22.

Dear Alfred:

accent your
please ma very much indeed if I could
It would

already arrantpd with
I nave a half-ay invitation
invitation, but
day train, and
with him in oa:le I go over on the Monday
torso to stop
that I must go on the nilht train
besides that, I think the chances are




anyway.

and I regret very much
It is mi ti) good of you to ask 74e,
visit and
However,we shall have a little

that I cannot accept.
chat.
possibly have time for a little i:rivate
lith best regards, I am,

Yours sincerely,

Alfred L. Aiken, Esq.,
?x,a-eidant-r-Ittil5T11

lioston, Mass.

Snawmut Sank,

{Th

FEDERAL RESERVE BANK
OF BOSTON
ALF

:I) L. AIKEN
GOVERNOR

December, 21, 1914

04(Xe

Jr.
BENJ. STRoNG-,

1

4. ijiG

PERSONAL.

8,

194

Dear Governor 'Strong:
I am sending this short personal note just to

wish for you and yours a very merry Christmas and my
best wishes for a happy and prosperous New Year, which
I trust will result in great progress toward the working out of problems that we all have in hand.

best

7ith

wishes and warm personal regards, believe me to be,
Yours very truly,
-N

2

Benjamin Strong, jr., Esq.,
Governor, Federal Reserve Bank,
New York, New York.




ofititioA-c°

FEDERAL RESERVE BANK
OF BOSTON
ALFRED L. AIKE N
DOVER NO R

April 6, 1915.
MY dear Governor Strong;

/

Thank you very/Much for
your letter of the 6th instant.
I am sorry to say that/1' have had to
change my plans as to going to,Vew York, and
shall not be able to get over/there until next
week.
I shall be gla to lunch with you if
possible, though I have /a sort of half promise
to Mr. Woodward, over At the Hanover Bank, that
I should impose on hjth the next time I had a
free day in New Yor. I certainly should not
be in New York, hoWever, without coming to pay
my respects.
I h
Hot Springs.

that you had a good rest at

W th warm personal regards, I am
Very sincerely yours,

Benjamin Strong Jr., Esq., Governor,
Federal Reserve Bank,




New York, New York.

0




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FEDERAL RESERVE BANK

'ED L. AIKEN
GOVERNOR

OF BOSTON

FLORRIMON M. HOWE
CASHIER

DIRECTORS
FREDERIC H. CURTISS, CHAIRMAN
AND FEDERAL RESERVE AGENT

WALTER S. HACKNEY. VICE-CHAIRMAN
AND DEPUTY FEDERAL RESERVE AGENT

ERNEST M. LEAVITT

THOMAS P. BEAL, BOSTON, MASS.
CHARLES G. SANFORD. BRIDGEPORT. CONN.
ARTHUR M. HEARD. MANCHESTER. N. H.
CHARLES A. MORSS. POET°, MASS.
EDMUND R. MORSE, PROCTOR. VT.
CHARLES G. WASHBURN. WORCESTER, MASS.
ALLEN HOLLIS. CONCORD. N. H.

ASST. CASHIER

gor

PERiI
F

A

utucRq nhititt ember 1, 1915.
14

Dear Mr. strong;

I have been planning to go to Maine with Mrs.
Aiken for a fishing trip the 9th or 10th of this month, to
be gone two or three weeks, but have been talked to so much
about the foreign exchange situation that the prospect of
being absent at this time for such a length of time has rather
gotten on my nerves, and I am writing this to ash you what
you think will be the future course of development in the situation.

Do you think it probable that any conditions
would arise in the course of the next two or three weeks to
create any demand on the Federal Reserve Banks?
I do not see
myself how they should, because I should suppose that the effect
of a continued fall in sterling would be to check our ammunition and supply business for the allies, thus making for a
sharp reduction in the activities of our industries engaged
in filling such orders.
Are the commitments of our manufacturers such
in your judgment that they would be obliged to borrow heavily to take care of obligations they had already incurred,from
which they would not be relieved in the case of a cessation
of orders or cancellation of contracts?
Is it possible that
as a result of the Conference to be held in New York with
the English and 2rench bankers, the balance due .us will be
financed in such form. that a large amount of the obligations
created might come to the federal Reserve Banks?
I should greatly appreciate it if you would
write me your views of the situation, because you are in the
thick of it and we are not, and I do not care to go very far
from home if from your point of view it seems as though we
would be called upon for an very active operations in the
course of the next month.
I hope that the situation is not such that
it will prevent your going on the vacation that you have
planned yourself, for certainly if anyone is entitled to a
respite from business activities, you are.
Witn warm personal regards,

Benjamin Strong, Jr.Esq.,Verw
Governor,Federal Reserve Banl,
New York, New York.




am

:74,0
Governor.




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WAWBEEK,

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L
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A

ti
A

''34)
GOVERNOR

FEDERAL RESERVE BANK
OF BOSTON

./N M. HOWE
CASHIER

FREDERIC H. CURTISS. CHAIRMAN
AND FEDERAL RESERVE AGENT

WALTER S. HACKNEY. VICE-CHAIRMAN
AND DEPUTY FEDERAL RESERVE AGENT

THOMAS P. SEAL, BOSTON. MASS.
CHARLES G. SANFORD, BRIDGEPORT, CONN.
ARTHUR M. HEARD. MANCHESTER. N. H.
CHARLES A. MORS, BOSTON. MASS.
EDMUND R. MORSE, PROCTOR. VT.
CHARLES G. WASHBURN. WORCESTER, MASS.
ALLEN HOLLIS. CONCORD, N. H.

_RNEST

ItIVLITTFNO DEPT.
NOV't; 0 1,1)10.
PEDERly.111g

DIRECTORS

44r o ng

,

Jr .

,

vern r, FLettal Reserve Bank,
New York City.
ttill A

Dear Mr. Strong:

Novemb2, 1915.

4/°//;.

I find on my desk this morning a leer from
the Federal Reserve Board enclosing a buy of a letter
from the Secretary of the Treasury advising them of his
intention to designate the Federal reserve banks as fiscal agents for the Government, beginning January 1, 1916.
May I inquire as to whether or not this is
the result of the conference of your Committee with the
Secretary, and if it is, as to the scope of the Federal
reserve banks activities when the transfers of Government
deposits have been made.

The handling of the larger

Government accounts in the Government. depositories here

involves a great deal of detailed clerical labor for which
we have at the present time no organization, and I am
anxious to get all the requirements before me at as early
a date as possible in order that we may get the matter in
hand.

The question arises at once as to the method

which we shall pursue in collecting checks which we may
receive for deposit

collecting officers of the United

States in this district, and I shall be glad to have more
light on the whole matters than I have at the present writing, and shall be grateful for any that you can shed on it.



Governor.

EN
GOVERNOR

FEDERAL RESERVE BANK

AND FEDERAL RESERVE AGENT

OF BOSTON

.ION M. HOWE
CASHIER

DIRECTORS
FREDERIC H. CURTISS, CHAIRMAN
WALTER S. HACKNEY. VICE-CHAIRMAN
AND DEPUTY FEDERAL RESERVE AGENT

_RNEST M. LEAVITT
ASST. CASHIER

December 29, 1915.

THOMAS P. BEAL, BOSTON, MASS.
CHARLES G. SANFORD, BRIDGEPORT. CONN.
ARTHUR M. HEARD. MANCHESTER. N. H.
CHARLES A. MORS, BOSTON. MASS.
EDMUND R. MORSE. PROCTOR, VT.
CHARLES G. WASHBURN. WORCESTER. MASS.
ALLEN HOLLIS. CONCORD. N. H.

ATTENDED TO
DEC 3 1 1915

1#"

Benjamin Strong, Jr., Esq., Governor,
\,Pederal Reserve Bank,
New York.

CLIRTIS.

Remarks below

My dear Mr. Strong:

I enclose herewith copy of letter received
today from Assistant Secretary Malburn.
I judge from this letter that he has come to
the conclusion that the Federal Reserve Banks should bear whatever exchange charges may arise through the acceptance
Collectors of checks drawn an non-par points.

from

You will note

from his letter that Mr. Malburn deals with this subject as a
matter of extediency, apparently based on the profit which he
seems to assume will arise to us from having government deposits.
It seems to me, however, that it is a matter of principle and
we feel here that it is a matter that should not be allowed to
go by default.

we are disposed to carry in a susnense account

any such charges that may arise in the first few weeks of handling these deposits.

I feel that this is a problem to take up at
the conference of the Governors next month and see if they cannot arrive at a unanimous opinion in the matter and then present
it to the Treasury Department.

I should be glad to know your

feelings in the matter.

 ALA
JJJ


V_e

sincerely

oursu/s.




Hilltig

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FEDERAL RESERVE BANK
OF BOSTON
ALFRED L. AIKEN
GOVERNOR

itef

,

1915.

0,c9

Benjamin Strong, Jr., Esq.,
Federal Reserve Bank,
New York.

Go4cgar,

My dear Mr. Strong:

I am sending this note just
to express my hopes for a merry 3hristmas and
a happy New Year for you and your household,

and, so far as the New Year is concerned, for
the organization which we have upon our hands.
Perhaps this is an opportune time for me to express to you, as I have before, my sense of obligation for all that you have done in the last
year to lighten the burdens and anxieties that
have gone with the starting of the Federal Reserve Banks, and I am sure that I am voicing
the sentiments of all those with whom you have
been associated, in telling you what a pleasure
our association

with you has been and how we

realize the imrortance of your efforts in the
organization of the whole Federal reserve system.




Witli warm personal regards, believe
me to be

Faithfully yours




FEDERAL RESERVE BANK
OF Ei3do

TON

4144

1(

ALFRED L. AIKEN
GOVERNOR

January 26, 1916.
49/6,

My dear Strong,-

I have asked Putnam & Co.
to send you a copy of Oliver's "Ordeal
by Battle," which I think you may find
interesting reading on shipboard.
I have read it with much interest,
and it seems to me one of the most readable
and interesting expositions of the English
point of view as to war, that I have ever
seen.

,

I thought it possible that I might
get to New York on Friday and have a
glimpse of you before you left, but I now
find that I shall be unable to do so, consequently this takes by very best wishes
I
for a successful trip and safe return.
shall often think of you with some envy
because of your interesting experiences
that I should like to have shared.
With warm personal regards, believe
me to be,
Sincerely yours,

Benjamin Strong, sq.,
62 Cedar St.,
New York, N. Y.

,MME,

YORK

No. A

Copy

1016

TELEGRAM
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Check

Code used

O. K.

To

File Clerk

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DIRECTORS

"RED L. AIKEN

FREDERIC H. CURTISS, CHAIRMAN

GOVERNOR

Fl ,RRIMON M. HOWE
CASHIER

ERNEST M. LEAVITT
ASST. CASHIER

AND FEDERAL RESERVE AGENT

FEDERAL RESERVE BANK
OF BOSTON
53 STATE STREET

WALTER S. HACKNEY, VICE-CHAIRMAN
AND DEPUTY FEDERAL RESERVE AGENT

THOMAS P. BEAL, BosToN, MASS,
CHARLES G. SANFORD, BRIDGEPORT, CONN.
ARTHUR M. HEARD. MANCHESTER. N. H.
CHARLES A. MORSS, BOSTON, MASS.
EDMUND R. MORSE, PROCTOR, VT.
CHARLES G. WASHBURN, WORCESTER, MASS.
ALLEN HOLLIS, CONCORD. N. H.

May 25, 1916.
Benjamin Strong, Jr., Esq.,
Governor, Federal Reserve B
New York, N. Y.
Dear Strong,-

4k9
If by any chance you9 ay&going through

Boston on your proposed fishing trip to Maine, I wish
that you could arrange to have dinner with me.

I suppose

the chances are remote that we should be fortunate enough
to have you have some time on your hands between trains,
but if you do I should greatly enjoy having you have a
non-business dinner with me.

Check collection matters are so pressing with
us that I cannot get away for any length of time myself,
because of course our organization is small, and I have
to be on hand, but I am thinking of going to Maine the
first week in June for three or four days, over a week-end,
just to get under canvas out in the woods.




With warm personal regards, I am,
Faithfully yours,

LIWG/




4




ALF

53-,

STREET

Set T N

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ASS OF SERVICE

SYMBOL

v Message

Letter
it Message

Blue

WESTE

CLms OF SERVICE
Day Letter

hght Letter
NL
If none of these three symbols

TELIND

appears after the check number of
words) this is a day message, Otherwise its character is indicated by the

symbol appearing after the check.

NEWCOMB CARLTON. PRESIDENT
BELVIDERE BROOKS. VICE-PRESIDENT
GEORGE W. E. ATKINS, VICE-PRESIDENT

Blue

Night Message

WESTERN UNION

Nite

Mite

N L'
Night Letter
If none of these three symbols
appears after the check number of
words) this is a day message. Otherwise Its character is indicated by the

symbol appearing after the check.

RECEIVED AT

F

30 NY rG

24

AB BOSTON MASS 1018 Am JUNE9/16
BENJAMIN STRONG

UR

903 PARK AVE NYC
I

CAN GO To NEWYORK

APARTMENT

AND SEE YOU AT YOUR

TUESDAY OR WEDNESDAY NEXT

WEEK AS IS MORE CONVENIENT

FOR YOU AM WRITING




SYMBOL

Day Message

ALFRED L AIKt,
10 35 AM







ALFRED L. AIKEN
53 STATE STREET
BOSTO N, MASSAC HUSETTS

June 9, 1916.

Benjamin Strong Jr., Esq.,
903 Park Ave.,
New York, N. Y.
Dear Strong,-

I was very sorry indeed to learn from
your letter of the 8th that the trouble with your
back was going to incap&citate you for some time.
I have telegraphed you that I could be in New York
either Tuesday or Wednesday of next week, and shall
be glad to have you telegraph me as to which day
would be more convenient for you.
I had expected to leave for Maine
tonight for four or five days in the real woods, with
my two guides, but my small son has been sick all the
week, and has developed a serious case of measles,
making me feel that I should not be comfortable out of
immediate contact 'with home, but I should be very
glad to go to New York and see you.

If I hear from you some time tomorrow
that will be ample time for me to arrange my plans.
I cannot tell you how sorry I am for your mishap, and
its interference with your plans for a vacation.
Faithfully your

DIRECTORS

ALFRED L. AIKEN

FREDERIC H. CURTISS. CHAIRMAN

GOVERNOR

RRIMON M. HOWE
CASHIER

ERNESTM.LEAVITT
ASST. CASHIER

AND FEDERAL RESERVE AGENT

FEDERAL RESERVE BANK
OF BOSTON
53 STATE STREET

WALTER S. HACKNEY, VICE-CHAIRMAN
AND DEPUTY FEDERAL RESERVE AGENT

THOMAS P. REAL. BOSTON. MASS.
CHARLES G. SANFORD. BRIDGEPORT. CONN.
ARTHUR M. HEARD. MANCHESTER. N. H.
CHARLES A. MORSS, BOSTON. MASS.
EDMUND R. MORSE. PROCTOR, VT.
CHARLES G. WASHBURN, WORCESTER, Mass
ALLEN HOLLIS, CONCORD. N. H.

July 14, 1916.

Benjamin Strong, Jr., Esq.,
c/o Rev. F. W. Oakes,
2825 W. 32nd Ave.,
Denver, Colo.
Dear Strong,-

I suppose that before this you have gotten comfortably located in Colorado, and I was glad to learn from
the men in New York that you had had a comfortable journey.
I am not going to tell you how much I miss you on my trips
to the New York bank, but though everybody there is courtesy
itself it resembles a good deal the omission of Hamlet
from the show.
As you know, I spent the Sunday before you went
West with Warburg, and was glad to find him entirely sympathic with out ideas as to continuing the conferences of
I hope that we shall not have one, before
the Governors.
October because I do not want to go to Washington in August,
and am very anxious to go away for three or four weeks in
September for a vacation which has been waiting me now
for three years, and which I think is about due.
Things are developing interestingly here with the
hardening of money. We have put up our acceptances rate to
2i% for bankers' acceptances with differential of 1/8 for
such acceptances with member bank endorsement.
I like our
differential of 1/8 better than the one that is maintained
in your bank of 1/4,*and think on the whole it works more
satisfactorily in this market at any rate than in the larger
districts.
We have practically cleaned up the holdings of the
local banks on acceptances, and from now on shall only get
such acceptances as are made from time to time, as there will
probably be no accumulation in the banks' portfolloS here with
the increased commercial demand for money at advanOing rates.
I have arranged to take rediscounts for the First
National, the Shawmut, Old Colony Trust Co., Second National,
Merchants National, and probably two of the smaller baialdn
Monday, acamea this is the initial transaction with themwe
will probably have in the neighborhood of 0,000,000. All
of our banks have been (mite hard up for some time but none
of them wanted to be the first one to rediscount, and so they



Benjamin Strong, Jr., Esq., #2.
?)
() -

are all coming in together, which seems to me somewhat amusing.

We are all ready to begin the check collection
game tomorrow, and have gotten all the banks in New England,
with the exception of seven small Vermont Trust Companies,to
I have found a way to compel these banks to remit
remit at par.
at par, and before the first of August all the banks in this
district will be on a par basis.
Our clearing house has stuck to the plan of making
all points that are collectible at par through the Federal
Reserve Bank discretionary with the clearing house banks, and
the clearing house banks are going to absorb the service charge.
This plan was engineered by Wing primarily to get the business
coming through his bank, rather than direct to the Federal
Reserve Banks, and I think we shall have a very small volume
of business except the normal country clearings.
I do not know whether or not you have seen the press
reports of the Guaranty Trust Company's activities as to the
attitude of the banks in the country toward the Federal Reserve
System, but assuming that you have not I will send you a copy
of it tomorrow with some newspaper comments thereon, and also
an article that I wrote for the Boston News Bureau for their
Saturday issue.
It seems hardly fair to burden you with all this
"shop talk," but I am assuming that you would probably rather
hear What we are doing than not.
I hope that you are getting
a really fine rest, and are putting on weight and gaining
strength.
I quite envy you the prospect of your stay in
Estes Park. This suOmer like most of my summers is domestically
very much mixed. We are theoretically spending the early
part of the summer at Marblehead, but Mrs. Aiken divides her
time between our house in New Hampshire, Marblehead and
Worcester, while I am of necessatilysomewhat nomadic in my
habits.

If somewhat disconnected letters of this sort do
not bore you I shall inflict them upon you from time to time.
If you are looking for books to read by way of diversion I would
like to suggest "A Diplomat's Wife in Mexico," by Mrs. O'Shaughnessy, which I ha7e found one of the most readable and delightful
books that I have struck for some time.
Do not bother to answer my letters.
I shall take it
for granted that they reach you safely, and do not wish you to
be burdened with acknowledging them.
With best wishes, I am,
Faithfully yours,

ALA/M



..+CerEWPCTITe,r-r

Benjamin Strong, Jr., Esq., #2.

are all coming in together, which seems to me somewhat amusing.
We are all ready to begin the check collection
game tomorrow, and have gotten all the banks in New England,
with the exception of seven small Vermont Trust Companies,to
I have found a way to compel these banks to remit
remit at par.
at par, and before the first of August all the banks in this
district will be on a par basis.
Our clearing house has stuck to the plan of making
all points that are collectible at par through the Federal
Reserve Bank discretionary with the clearing house banks, and
the clearing house banks are going to absorb the service charge.
This plan was engineered by Wing primarily to get the business
coming through his bank, rather than direct to the Federal
Reserve Banks, and I think we shall have a very small volume
of business except the normal country clearings.
I do not know whether or not you have seen the press
reports of the Guaranty Trust Company's activities as to the
attitude of the banks in the country toward the Federal Reserve
System, but assuming that you have not I will send you a copy
of it tomorrow with some newspaper comments thereon, and also
an article that I wrote for the Boston News Bureau for their
Saturday issue.
It seems hardly fair to burden you with all this
"shop ta"k," but I am assuming that you would probably rather
hear What we are doing than not.
I hope that you are getting
a really fine rest, and are putting on weight and gaining
strength.
I quite envy you the prospect of your stay in
Estes Park. This suOmer like most of my summers is domestically
very much mixed. We are theoretically spending the early
part of the summer at Marblehead, but Mrs. Aiken divides her
time between our house in New Hampshire, Marblehead and
Worcester, while I am of necessa±ilYsomewhat nomadic in my
habits.

If somewhat.disconnected letters of this sort do
not bore you I shall inflict them upon you from time to time.
If you are looking for books to read by way of diversion I would
like to suggest "A Diplomat's Wife in Mexico," by Mrs. O'Shaughnessy, which I ha-e found one of the most readable and delightful
books that I have struck for some time.
Do not bother to answer my letters.
I shall take it
for granted that they reach you safely, and do not wish you to
be burdened with acknowledging them.
With best wishes, I am,
Faithfully yours,

ALA/M



ALFRED L. AIKEN

)iRIMON M. HOWE

GOVERNOR

F

CASHIER

FEDERAL RESERVE BANK
OF BOSTON

ERNEST M. LEAVITT
ASSISTANT CASHIER

53 STATE STREET

CHARLES A. RUGGLES
MGR. COLLECTION DEPT.

DIRECTORS
FREDERIC H. CURTISS, CHAIRMAN
AND FEDERAL RESERVE AGENT

WALTER S. HACKNEY. VICE-CHAIRMAN
AND DEPUTY FEDERAL RESERVE AGENT

THOMAS P. BEAL. BOSTON. MASS.
CHARLES G. SANFORD. BRIDGEPORT. CONN.
ARTHUR M. HEARD, MANCHESTER, N. H.
CHARLES A. MORSS, BOSTON. MASS.
EDMUND R. MORSE. PROCTOR, VT.
CHARLES G. VVASHBURN. WORCESTER, MASS
ALLEN HOLLIS, CONCORD. N. H.

August 2, 1916.

Benjamin Strong, Jr., Esq.,
The Lewiston,
Estes Park, Col.
Dear Strong,-

Thank you very much for your letter of the 27th
ult., which I find waiting for me on my_return from New York
this morning, also for what you say about my article an the
Guaranty Trust Company's canvas. After it had gotten into
print it occurred to me that it was possible that negotiations
might be under way with the Guaranty Trust Co., looking to
their joining the system, and that it would have been just as
well for me to have let the whole matter go by without any
answer, but I think on the whole no harm was done by it, and
that an analysis of their figures might safely be made by us
without having any effect upon any negotiations that you
had under way.
be interested to know that I have been
You
negotiating for some time now with the American Trust looking
to their coming in, and they have been discussing the matter with
the State Street Trust Company and the Commonwealth Trust Company,
and I have great hopes that we will get all three of them in
I have been in almost daily confersome time during this month.
ence with Russell Fessenden, President of the American Trust Co.,
and he is negotiating with the other two in the hope that they
Frank Hart of the Old Colony Trust
will all come in together.
Company is a member of the Executive Committee of the American
Trust Company, and he told me confidentially this morning that
the prospects there were first-class.
Our little meeting in New York yesterday evolved
itself largely into a discussion of the check collection situation, and was a very interesting experience meeting. The
expressions in regard to the authorization of the collection of
checks through postmasters were somewhat heated to put it
I think that was about the worst break that has been
mildly.
made, both from a banking point of view, and viewed entirely
as a politbal matter, The best evidence of it was the alacrity
with which it was taken up by both Kitchen and Carter Glass
in the House, and made the basis of political speeches.
There
was no demand for any such radical step from anybody, and nothing
at all was gained by the promulgation of any such plan, and a
great deal of animosity was instantly aroused. Fortunately for
us in our small corner of the country we have not had to resort
to either the express company or the postmaster to get all our
non-member banks in, but I should have been loath to have used



Hon. Paul M. darburg,

2.

the latter at any rate under any circumstances.
As a result of our conference .-esterday we decided
that it is desirable to have a meeting of the Governors some
time this month, and I have been consulting with Mr. Harding
and Mr. Delano by telephone today, and I think we shall arrange
for a meeting either in New York or here for the week beginning
the 21st.
I think it will be devoted almost entirely to the
matter of check collections, and should result in a very interesting discussion.
These parties without you are N.G., and the
mental attitude of all of us toward them is very different, but
we are counting on having you back to preside over them in the
near future.

I understand that they send you a weekly report from
New York as to what is going on in the Federal Reserve world,
consequently I shall not bore you with any general information.
We are getting a good demand for money here, and to celebrate
my return from New York I rediscounted 02,600,000. for our
member banks today, and have bought about 0500,000. acceptances.
The latter we are distributing among other Federal Reserve banks.
If I can get the three trust companies that I referred
to above into the system this month, I shall really feel as
though, taking everything into consideration, I am entitled
to a real vacation in September, and what is more I propose to
take it.
I only wish that it was going to take me for a few
days out to Estes Park.
I saw some pictures in New York yesterday that you had sent them, and it certainly looks wonderfully
attractive.
I cannot tell you how much I hope that it is doing
for you all that all of us want it to.
hot

We have been having beastlykweather here for the
last week or ten days, but it has been much more comfortable
for the last day or two.
I am going to try to get away for
a week-end next week to go to Block Island and see if I cannot
catch a tuna.
I have just this morning received word that they
caught fifteen there yesterday, and it quite whets my appetite,
because they run up to a size that almost staggers one's
imagination, and I have seen many taken in seines in that neighborhood wha' I was a youngster that were over 500 lbs.
If I
can get fast to one on my week-end expedition I shall be glad to
report details.
The political situation here in the east waxes
warmer with the Hughes' formal speech of acceptance $ accomplished,
and I think the general feeling around New England is that Wilson
will have a hard time beating Highes, though apparently this
feeling is not as strong through the middle west, judging from
many talks that I have had with men there.
I hope that my occasional letters do not impose unduly
on your time, either because of their length or because of their
somewhat garrulous characteristics, and if you do not mind I
shall continue to send them time to time, or until you advise me
that your patience is exhausted.




With best wish

believe me to be

phAl21
6

-

CI)
AL FRED L. AIKEN
GOVERNOR

FLORRIMON M. HOWE
CASHIER

FEDERAL RESERVE BANK
OF BOSTON

ERNEST M. LEAVITT

53 STATE STREET

ASSISTANT CASHIER

CHARLES A. RUGGLES
MGR. COLLECTION DEPT

DIRECTORS
FREDERIC H. CURTISS, CHAIRMAN
AND FEDERAL RESERVE AGENT

WALTER S. HACKNEY, VICE-CHAIRMAN
AND DEPUTY FEDERAL RESERVE AGENT

THOMAS P. BEAL, BOSTON. MASS.
CHARLES G. SANFORD, BRIDGEPORT. CONN.
ARTHUR M. HEARD, MANCHESTER, N. H.
CHARLES A. MORSS, BOSTON, MASS.
EDMUND R. MORSE, PROCTOR. VT.
CHARLES G. WASHBURN, WORCESTER, MASS
ALLEN HOLLIS, CONCORD, N H.

Aug. 11, 1916.

Benjamin Strong, Jr., Esq.,
The Lewiston,
Estes Park, Col.

°77

Dear Strong,-

Thank you very much for your letter of the 7th
inst., which reminds me that I started to write you yesterday,
but had to postpne it under pressure of other work.

I am

much more interested to hear that you are doing a little

fishing and getting a little fan, than that you are devoting
much time to Federal Reserve Banks, because it is plain that
the more time you devote to out-door things now the sooner you

will be able to devote your energies once more to us, to
which we are all looking forward.

I am frankly looking forward with some dread to
our meeting of the Governors here the week after next, for it
will be at best a pretty hollow affair with you in Colorado.
I am sure I do not need to assure you that you will be constantly
missed by all of us.
Of course you have seen of the appointment of Mr.

Harding az Governor of the Board, and Mr. Warburg as Vice-Governor,
a change that has caused some comment hereabouts.

much that is new or exciting here in the bank.

There is not

I feel as though

we now had a fairly well rounded institution, that is, we are
doing something in most of our normal activities.




I greatly appreciate what you say in regard to our

-2-

operations here, but I do not forget the fact that our situation
here was in many ways a peculiarly favorable one, and that while
we had a good many pretty hard-shelled bankers, (or so-called
bankers) that were entirely out of sympathy with us and opposed
to us, most of these men were broad-minded enough to be open to
argument, and I think many of them are being gradually converted.
As I wrote you, I think that this particular baby is
growing strong enough now to be left alone for a while, and
barring an attack of measles or something of the sort in my own
household, I expect to be away practically all of September in
Maine with Mrs. Aiken, going up to Jackman first for some fishing,
and then taking a short canoe trip into Moosehead.

Fishing in

the streams is closed after the 15th of September, so we shall
have to devote the rest of the time to fishing in the big lake,
but primarily it is a matter of being out of doors, and getting
away from the detail of work.
I should be very much interested to hear the status
of the foreign negotiations.

My interest in the matter is some-

what selfish, because frankly I had looked forward to imposing
myself upon you for a trip abroad one of these days, to get in
personal touch with this business, and my Directors were
sufficiently interested in it to be very anxious to have me go.
However, I shall look forward to this if you will let me, until
a later date.

I hope that the plans outlined and developed by

you can be carried through, for it seemed to me

a

most

remarkable piece of financial diplomacy, and it certainly ought
not to be allowed to go by default.
I had a very characteristic and entertaining letter
from Kains a day or two ago, in which he stated that he thought



-3-

this meeting of the Governors on check collections was somewhat
premature, and that it reminded him of the child who had just
planted a garden the week before, and could not resist the
temptation to dig up the seeds to see if they had begun to sprout.
In spite of that, I think it is a good plan to have the meeting,
and of course we are glad to have it here.

Speaking about trips abroad - I am in hopes that one
of these days we can take a little vacation together, that will
be devoted to something besides business, and some time when
you are back on the street in New York, and we can get away
for a week for some fishing or shooting, and temporarily leave
the Reserve Banks and their various problems behind, let's see
if we can't do it.

I hope that every week puts on a pound or two of
flesh, and that you are gaining faster than your highest
hopes led you to believe.
With warm personal regards, and renewed thanks for
your letter, believe me to be,




Faithfully yours,

HOTEL SOMERSET
0011INONWSALTH AVENUE, BOSTON

FRANK 0. HALL

a:ity

MANAGES

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FEDERAL RESERVE BANK
OF BOSTON

I. FRED L. AIKEN
GOVERNOR

.PRIMON M. HOWE
CASHIER

ERNEST M. LEAVITT

AND FEDERAL RESERVE AGENT

WALTER S. HACKNEY, VICE-CHAIRMAN
AND DEPUTY FEDERAL RESERVE AGENT

THOMAS P. BEAL, BOSTON. MASS,
CHARLES G. SANFORD. BRIDGEPORT, CONN.
ARTHUR M. HEARD, MANCHESTER, N. H.
CHARLES A. MORSS, BOSTON. MASS.
EDMUND R. MORSE, PROCTOR. VT.

53 STATE STREET

ASSISTANT CASHIER

DIRECTORS
FREDERIC H. CURTISS. CHAIRMAN

CHARLES A. RUGGLES
MANAGER COLLECTION DEPT.

kf*

CHARLES G. WASHBURN, WORCESTER. mAsS
ALLEN HOLLIS, CONCORD, N. H.

Aug. 29, 1916.

Benjamin Strong, Jr., Esq.,
Estes Park,
Colo.

Dear Strong,-

No doubt Mr. Treman has given you reports of our
Governors' Conference here, so this will be by way of supplement.
As you know, the program was devoted largely to the matter of
check collections, and as I saw it the meeting was valuable more
as an interchange of ideas than because of anything very definite
that was done.

The real truth of the matter was that it sadly

lacked the guiding hand that has overcome the inertia of past
meetings, and forced a dozen tired and perplexed governors to
come to an understanding and conclusion.

From our own point of

view here the meeting was valuable because I felt that we got a
good deal closer to Mr. Harding than we ever had before, for which
I was very glad.

I greatly enjoyed having him for a neighbor at

the meetings for most of the time, and I think he enjoyed and
found interesting his stay here.

The meeting was devoted entirely

to business, and I headed off any suggestions of entertainment
locally, and the result was that we cleaned up our program in
two days and everyone got away by Thursday afternoon.

We went down the

harborto the Nahant Club for dinner one night, and I think all found

it a relief from the tremendously hot weather that we had for the
two days that the meeting was on.



min Strong, Jr., Eso., #2.

One of the most important things on the program was the
matter of immediate availability of drafts on Federal Reserve Banks.
I went to the meeting with a very definite opinion, gathered from
correspondence and conversation, that it was the opinion of some of
the members of the Board that such checks should be available anywhere
at par.

The discussion of this question developed some very definite

opposition, and the whole subject was left for further consideration
and discussion,

47b4,41A

was agreed that such drafts should only be

available at the Federal Reserve Bank as designated on the draft, a
very different proposition from that originally made.
I am not at all enthusiastic about the practice that is
apparently growing up of making drafts drawn on member banks located
outside Federal Reserve cities immediate available in Federal Reserve
cities, and I think that it is certain to result in experiences
very similar in the matter of overdrafts to those experiences under
the first check collection plan, and were it to become general would
lead to most unsatisfactory results.
I read and re-read with much interest your very remarkable
memorandum in regard to foreign relations, and our committee discussed
this at length with Mr. Harding and Mr. Delano, and were all of the
opinion that the relations 'outlined in your plan should be established

as soon as possible, though there are some minor details in it that
will have to be taken up for adjustment.

Of course some skillful

diplomatic handling will be necessary to convert some members of the
Board to the belief that this is the proper time to begin such undertakings, but certainly there is going to be very strong pressure
looking toward it.

I have not had a chance to see Mr. Warburg for

some weeks, but I am going to try to arrange to see him in New York
next week, and will talk with him about this matter at that time.



jamin Strong, Jr., Esq., #3.

We appointed a committee to investigate and report on the
Federal Reserve Banks' acting as real fiscal agencies for the govern-

ment, a matter which has got to be worked out in connection with the
treasury department, and is of course extremely complicated because
of its relations with the sub treasury system.

Unfortunately I had

the chairmanship of this committee wished upon me, and I can see some
hard work ahead.

You of course will be furnished stenographic report

of the meeting, and can gather from it how desultory a good deal of
the discussion was.

It was practically agreed that the next conference

of Governors should be held in Washington late in November before
Congress reconvenes.

I have been disappointed in the way Congress

has handled some of the amendments, and wish that more of them had
gotten through as outlined.

I imagine that with the pressure for

adjournment and the very perplexing situation as regards the railroads

nothing more can be done at this session.
So far as our local situation is concerned things are
pretty quiet with us, and the banks have more money than they had a
few weeks ago, consequently our rediscounts are running off rapidly,
and I have had to appeal to your associates in Pew York once more
to put us on the list for distribution of acceptances.

Our market

is very bare of city and town notes, and I am advised that taxes are
being paid in advance to a much greater extent than is normal.

My conscience pricks me somewhat as to the Kansas City
A. B. A. Convention.

I have been very anxious to get away for a

vacation in September, and have made up my mind to go to Maine about
the 10th, and stay there until the first of October for some fishing
and bird shooting, but I do not like to have anyone feel that I am
shirking my responsibilities in not going to Kansas City on behalf
of the Federal Reserve Banks.



If you think that I really ought to go

min Strong, Jr., Esq.,

/-

wish
)(//11

44.

you would frankly write to me to that effect, though I won't

promise tb cancel my vacation plans, even though you counsel it.
I was delighted to hear from Mr. Treman of your reported
improvement, and hope that a winter in the open will put you right
on your feet again.

I am sure that you would have been touched as

well as gratified by all the expressions of affectionate solicitude
from the men who were here last week as to your health and your early
return to New York.

While it is a great piece of work to have done

what you have in the Federal Reserve system, I cannot but think that
it must be almost as gratifying to you to know the relationship of
confidence and affection that you have established in this group
of men who were practically all of them entire strangers to you less
than two years ago.

I note that you are doing a little fishing, and you may
therefore be interested to know that we are having some real tuna
fishing at Block Island, wherKhave gotten up a little club that

we hope some day will be as attractive as the Tuna Club at Catalena,
and I think that we have better fishing than they have out there.
I killed a 24* pounder on light tackle two weeks ago Sunday, and
had about an hour of very strenuous work in a very heavy sea, which
made some fishing that I had out at Catalena three or four years ago
seem like a parlor game by comparison.

Some time when we all get

back on the job I think it would be a good plan for us to take a
week-end off, and try them out.
Don't be paralyzed at the length of this letter.

1,Iy only

apology for it is that I do not have the opportunities to talk things
over with you that I used to have, and consequently take it out of you
in this way.




With warm personal regards, and very best wishes, I am,
111
Fa

T. W. GILBERT

H. C. 8c A. COMBS

The West Outlet Camps I
T. WILLIAM GILBERT, Manager

One of the Many Camp.

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West Outlet, Maine,

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T. W. GILBERT

H. C. & A. COMBS

The West Outlet Camps
T. WILLIAM GILBERT, Manager

One of the Many Camps

West Outlet, Maine,

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0

FEDERAL RESERVE BANK
OF BOSTON

LFRED L. AIKEN
GOVERNOR

ORRIMON M. HOWE
CASHIER

ERNEST M. LEAVITT

53 STATE STREET

ASSISTANT CASHIER

CHARLES A. RUGGLES
MANAGER COLLECTION DEPT.

DIRECTORS

AND FEDERAL RESERVE AGENT

WALTER S. HACKNEY. VICE-CHAIRMAN
AND DEPUTY FEDERAL RESERVE AGENT

THOMAS P. BEAL, BOSTON. MASS.
CHARLES G. SANFORD. BRIDGEPORT, CONN.
ARTHUR M. HEARD, MANCHESTER, N. H.
CHARLES A. MORS, BOSTON, MASS.
EDMUND R. MORSE. PROCTOR. VT.
CHARLES G. WASHBURN, WORCESTER, MASS
ALLEN HOLLIS. CONCORD, N. H.

Benjamin Strong, Jr., Esq.,
Estes Park,
Colo.

Dear Strong,-

Thank you very much indeed for your very interesting letter of the 2nd inst.

I am delighted to hear that you

have gotten by the set-back that you had.

I suppose that such

an experience is inevitable, and that if the general trend
of the curve is upward that is the really important thing.
I was much interested in all of your letter, but

particularly in your suggestion that I join Mr. Iarburg and
go out with him from Kansas City to Estes Park to see you.
To.be perfectly frank, I debated as to whether for a vacation
I should choose a trip to Maine, or a trip to Colorado, incidentally inflicting myself upon you for a few days, not to
talk shop primarily, but just because it seemed such a long
time since I had seen you, but I decided in favor of Maine
because I was a little afraid that it might not be best for
you to see me, and that with your customary Chesterfieldian
politeness you would not tell me so, and save yourself this
infliction.

At present I am pretty well committed to a couple
of weeks in Maine, but your plan is tempting enough so that
I am writing to Mr. Warburg to find out just what his plans
are, thinking that I might perhaps get a week or ten days



//

FREDERIC H. CURTISS. CHAIRMAN

Benjamin Strong, Jr.,

ESQ., +2.

in Maine, and still get home in time to go out to Kansas City
and from there to Estes Park.

Frankly, 1 do not want to go

to the Convention, though I am willing to do it if it is my
plain duty.

I have gotten temporarily tired of meeting the

assualts of our friends the enemy, and I rather dread the
necessity that may arise of getting on my hind legs, and into
a strenuous controversy at Kansas City.

I may, however, feel

differently about it after a week's fishing in Maine.

As soon as I hear from Warburg as to his plans, I
will write to you definitely in regard to it.

I am sure that

you know without my telling you that nothing would be a greater
pleasure to me than to have a few days with you, and I Should
certainly try to go to Estes Park a day or two before the law
shut down on fishing.

In your letter you spoke of the matter of a committee
on fiscal agencies.

I find myself somewhat embarrassed in this

connection, and wish you would advise me about it.

At the

Conference of Governors, Mr. Miller of Kansas City, moved the
appointment of this Committee, which should consist of the
chairman of the conference and two others, and I very stupidly
misunderstood him, and thought that his motion created

the

chairman of the conference not only a member of the Committee
but the chairman of it.
not the case.

I see from the records that this was

The Committee that I appointed consisted of

Mr. Treman, Mr. Fancher and myself.

I am now disposed for

obvious reasons to change the chairmanship, and am disposed to
appoint Mr. Treman chairman, instead of myself.

Your bank has

made investigation of this matter, and as it is a matter that
will require much consultation in Washington, and as you are



Benjamin Strong, Jr., Esq.; #3.

only half as far away from Washington as we are, and that
further Mr. Curtis is so familiar with the governmental
machinery, it seemed to me that the chairmanship might much
better be lodged in the New York Bank.

I wish you would let

me know how you feel about it.
I have assumed that you will write me with perfect

frankness, understanding fully that I have no personal feelings
in the matter, in fact I take for granted that you will do this
in all matters pertaining to the bank, because I have no
purpose in mind except to work these things out as effectively
and rapidly as possible, and in this particular instance

I

think that lodging the responsibility of this matter with your
bank would work to this end.

I heartily concur with you in the matter of agency
in connection with our foreign operation, and I think that the
arrangement that Kains suggested would be intolerable from
your point of view, and would be impracticable as a working
basis, entirely aside from the legal rights of the banks to
establish such an agency.

I think that a different basis of

compensation from that suggested by you would have to be arranged
because it seemed plain to me that most of the governors felt
that in view of the narrow margin of profit on which all foreign

business is done, 1/8 would be too large a commission, and that
a large part of the profit d of the operations in this connection

would be absorbed in commissions by the Federal Reserve Bank of
New York, but this is a minor matter, and one in which I know
that you are disposed to deal generously.

I quite sympathize

with you in the theory that the control of the New York market
in this matter should be in the hands of the New York bank, and



Benjamin Strong, Jr., Esq., #4.
this bn-nk would entire7y concur in operations on this basis.

In your letter you mention delays in answering my
letters.

As I have written you before, I want you to feel that

there is no obligation on your part to answer any of them except
so far as it is convenient for you to do so.

I should not feel

free to write to you as I do if I felt that it would inflict
a burden on you, and one of the conditions of my doing so is
that you will not permit it to be a burden to you.

nothing would please me more than to have my plans
work out so that I can see you the last of the month.
With best wishes for your continued improvement,
believe me to be,
Faithfully yours,

AIA/M




ALFRED L. AIKEN
F

2RIMON M. HOWE
CASHIER

'FEDERAL RESERVE BANK
OF BOSTON

ERNEST M. LEAVITT
ASSISTANT CASHIER

53 STATE STREET

CHARLES A. RUGGLES
MANAGER COLLECTION DEPT.

DIRECTORS
FREDERIC H. CURTISS, CHAIRMAN
AND FEDERAL RESERVE AGENT

WALTER S. HACKNEY. VicE-CHAIRMAN
AND DEPUTY FEDERAL RESERVE AGENT

THOMAS P. BEAL, BOSTON. MASS,
CHARLES G. SANFORD, BRIDGERORT. CONN.
ARTHUR M. HEARD. MANCHESTER. N. H.
CHARLES A. MORSS, BOSTON. MASS.
EDMUND R. MORSE, PROCTOR, VT.
CHARLES G. WASHBURN, WORCESTER, MASS
ALLEN HOLLIS. CONCORD, N. H.

Oct. 2, 19
Benjamin .Strong, Jr., Esq.,
The Lewiston,
Estes Park, Colo.

Dear Strong,-

I greatly enjoyed my little visit with you and
Mr. Warburg in Denver, and was only sorry that I had to depart
after such a short stay, particularly as it involved breaking
.away from the Ruth St.Denis party.
When I got to Kansas City I found that the most
strenuous meeting in opposition to the Federal Reserve system
occurred on Tuesday, at which time the meeting of the country
bankers largely from the South and West was held,with a great
deal of very loose talk in regard to the Federal Reserve Collection
Mr. Fancher and Mr. Caull-ins were both present, and
system.
told me that the country bankerspassed a resolution at that
meeting agreeing to take whatever steps they could through
Congress to so modify Section 16 of the Federal Reserve Act
that they could retain their collection charges, and failing
in that committing the American Bankers' Association to:suit
As a result of a
to test the constitutionality of the Act.
good deal of missionary work by all the representatives of the
Reserve Banks and their friends, all the teeth of this resolution
were drawn, and I enclose you a copy of the final resulution
which was presented to the Convention and passed.
The following men from the Reserve Banks were in
attendance:
McDougal
Fancher
Wold
Caulkins
Hendricks
Hardt
and myself.
I am very glad indeed that we were all there, because
the Federal Reserve system was by far the most engrossing
topic of conversation, and it would have been the greatest mistake
possible to have had the matter go by default so far as the
Federal Reserve Banks themselves were concerned.
All the speeches that were made in the Convention were
it seemed to me distinctly favorable on the whole toward the
Federal Reserve Banks. Mr. Warburg's speech WES a very great
success.
He spoke so that everybody could hear him, and ought



Benjamin Strong, Jr., Esq., #2.

to have been flattered by the universal expressions ofapproval
of what he had to say.
On Thursday afternoon Joe Chapman
also made an excellent speech, which was followed by a little
informal speech by Governor Harding, which was really quite a
masterpiece, it was so friendly and conciliatory and so completely
free from any official formality.
When we left, I think we were all agreed that if the
Convention WPS a waste of time from most points of view, it
certainly had been worth while from the point of view of the
Federal Reserve Banks, because the attitude of the country banks
was much more conciliatory at the end of the week than when
the Convention began.
Thanks to Mr. Hoops, of Dallas, I
with the southwestern bankers, who were the
exchange proposition, and found that it was
sit right down and go over the whole matter
and a good many of them were disposed to be

spent most of my time
keenest on the
well worth while to
with them frankly,
reasonable.

The most exasperating thing of the whole meeting was
the apparent entire lack of capacity of most of the men present
to see anything in the Federal Reserve system beyond a check
collection scheme. Mr. Warburg's speech was particularly
opportune in overcoming this idea.
It is needless to say that the pleasantest part of
my trip was the twenty-four hours I spent with you and Mr.
Warburg, and I only wish that my stay might have been longer,
and that we need not have been obliged to confine ourselves
to talking shop all the time. I found things pretty quiet
here, with no change in rates, and in general conditions.
I am going to continue to write you every week or ten days
as to conditions as I see them here.
I hope that you will have a fine winter, and that
the spring will see you restored to your usual health and
activity.




With warm personal regards, believe me to be,
Faithfully yours,

z4
,

09

RESOLUTION.

WHEREAS, The purposes of the Federal Reserve Act are to mobilize the reserves and to

unify the National Banking System, thereby providing an elastic currency and a system of rediscounts, and

WHEREAS, The Act has in it the possibilities of preventing the suspension of cash payments by banks, thereby making the country safe from currency panics, and

WHEREAS, Section 16 of said Act providing for the so-called par collection of checks is
not a feature necessary to the attainment of the objects sought by the Federal Reserve Act, and

the system of collecting checks now in operation under the law, as interpreted and applied by

the Federal Reserve Board, works serious hardships upon and heavy losses to thousands of
country banks, and

WHEREAS, It is the belief of the majority of bankers that Congress did not intend to de-

prive the banks of legitimate profit, therefore
BE IT RESOLVED, That the American Bankers Association, while approving the funda-

mental principles of the Federal Reserve Act and expressing loyalty to the Federal Reserve
System, protests against the provisions of the Act relating to the collection of checks, and instructs the Committee on Federal Legislation of the American Bankers Association to endeavor

to secure amendments to the Federal Reserve Act, providing for the establishment of a collec-

tion system which is fair and equitable to all Banks and to the general public.
BE IT FURTHER RESOLVED, That the President of the American Bankers Association
be authorized and directed to appoint a Committee of twenty-five bankers, fifteen of whom shall

be country bankers, and ten of whom shall be reserve city bankers, and that this Committee
co-operate with the Committee on Federal Legislation of the American Bankers Association in

bringing about the enactment of the desired amendment.




FEDERAL RESERVE BANK
OF BOSTON

INCA, FRED L. AIKEN
GOVERNOR

RRIMON M. HOWE
CASHIER

ERNEST M. LEAVITT

53 STATE STREET

ASSISTANT CASHIER

4,,

CHARLES A. RUGGLES
MANAGER COLLECTION DEPT.

4,;(,-;:.

4

le

Benjamin Strong, Jr., Esq.,
4100 Mount View Blvd.,
Denver, Colo.

615;

DIRECTORS
FREDERIC H. CURTIBB,CHAIRMAN
AND FEDERAL RESERVE AGENT

WALTER S. HACKNEY, VICE-CHAIRMAN
AND DEPUTY FEDERAL RESERVE AGENT

THOMAS P. BEAL. BOSTON. MASS.
CHARLES G. SANFORD. BRIDGEPORT, CONN.
ARTHUR M. HEARD. MANCHESTER, N. H.
CHARLES A. MORSS. BOSTON, MASS.
EDMUND R. MORSE, PROCTOR. VT.
CHARLES G. WASHBURN, WORCESTER, MASS
ALLEN HOLLIS, CONCORD, N. H.

October 16, 1916.

1%

Dear Strong,-

I was glad to receive your letter of the 6th, and
to learn that you were none the worse for our visit with you
the last of last month.

I am glad to know that you are busy

writing something to publicly combat the absurd arguments of
the Chronicle in the matter of our note issued.
I was in Washington lest week, and while there
talked with Mr. Harding and Mr. Warburg about a meeting of the
in November, and I am writing this to ask you to
suggest to Mr. Curtis such topics for discussion as may occur
to you.

As I told you when in Denver, I felt that the last

meeting here was more remarkable for what it side-stepped

\\Governors

than for what it aceomplished, but in spite of that 1 think
a year
it is very important that three or four timesove should get
together for an exchange of ideas on the general operations
of the bank, for it seems to me that the effect is to dampen
some of the wild ideas of some of the more radical Governors

from whom we get an outbreak Every little while, like the
disinclination of two of our associates to issue

Federal

Reserve notes because of the expense.

My feeling is that it would be a good plan to have a

meeting in Washington the last part of next month, and I think



2

0

that Mr. Harding and Mr. Warburg agree with this.

These meetings

will be much more interesting gatherings When we get you back again
to put a little real life into them.

Since I saw you in Denver, I have been almost tempted
to go out and see you again to consult with you about a matter that
has troubled me a good deal, and as to which I have been in a great
deal of doubt.

Our friend Mr. Wing has been trying diligently for

some weeks to get me to go into the First National Bank, as VicePresident, next to him in command, and of course at a salary
much larger than the Federal Reserve Bank could ever afford to
pay.

I have been much disturbed about it, because while I am sure

that I shall enjoy and find interesting a future in the Federal
Reserve Banks, yet I feel that the comfort of my family and their
future prospects because of a largely increased income, is a matter
that is entitled to very serious consideration.
As a matter of fact I told Mr. Wing on Saturday that
I had decided to stay where I am, but I must confess that I did
it with some slight misgivings as to the wisdom of my decision,
leaving out of account the personal satisfaction that 1 derive
from the interesting and constructive work, and the pleasure
that I have derived froM-my association with you.

Mr. Wing told

me on Saturday that he was not going to go any further in the
matter for the present.

Some time in the near future I shall

hope to have an opportunity to see you and to talk over the whole
future of the system.

Of course the above is confidential, but I knew that
you would be interested.

Incidentally, you will I am sure be

interested to know of Mr. Wing's complete reversal of attitude
in the matter of the reserle system, and of this bank.



He has

rttalked with me a good deal about it in the course of the last week,
and I think he is disposed to do all that he can to further the
development of the activities of the banks, and is on the whole very
well satisfied with the developments of the last two years.

His

attitude is certainly distinctly favorable.
By way of amusement I would like to commend to you, if
you have not read it, Lord Redesdale's "Memories."

It looks

like a rather ponderous two volume book, but is one of the most

deligtful ones that I have seen in many a day, and I am sure that
you would enjoy reading it as much as I have.
I hope you will have a good winter, and that you will make
real progress in the way of increasing health and strength.




With warm personal regards, I am,
Very sincerely yours,

AeED
FL

INKENGOVERNOR

RIMON M. HOWE
CASHIER

FEDERAL RESERVE BANK
OF BOSTON

ERNEST M. LEAVITT
ASSISTANT CASHIER

53 STATE STREET

CHARLES A. RUGGLES
MANAGER COLLECTION DEPT.

DIRECTORS

AND FEDERAL RESERVE AGENT

WALTER S. HACKNEY. VICE-CHAIRMAN
AND DEPUTY FEDERAL RESERVE AGENT

THOMAS P. BEAL. BOSTON. MASS.
CHARLES G. SANFORD. BRIDGEPORT, CONN.
ARTHUR M. HEARD. MANCHESTER. N. H.
CHARLES A. MORSS, BOSTON. MASS.
EDMUND R. MORSE. PROCTOR. VT.
CHARLES G. WASHBURN, WORCESTER. MASS.
ALLEN HOLLIS, CONCORD, N. H.

November 1, 1916.

Benjamin Strong, Jr., Esq.,
4100 Mount View Blvd.,
Denver, Colo.
My dear Governor,-

Thank you very much for your good
letter of the 24th ult.
I spent yesterday in New York with
Messrs. McDougal, Fancher and Seay. While %There we arranged
to sell $5,500,000. 3% Governments at 1013- & interest, which
seemed to me a very good price, and spent the rest of the
time in a somewhat animated
discussion in regard to the
French credit, during which we had a most interesting hour
or more with Mr. Kent.

Judge Curtis showed me a letter that he had sent
you, in which he, without malice, absolutely misstated the
position of our bank here in regard to these French acceptances.
We have never told anybody that these acceptances would not be
eligible, nor that we would decline to buy them, in fact, we
have pursued quite the opposite course, and 1 have told all
the banks that have inquired of me that if the bills were
eligible, and 1 saw no reason why they were not, we should
be entirely willing to buy them, simply using ordinary
business discretion as to amounts and rates, but I did not
want the banks to get the idea that we should be prepared
to have them go in to an indefinite amount on this credit,
on the assumption that they could immediately turn over all
their acceptances to the Federal Reserve Bank at the present
rate for such bills.
Apparently the misunderstanding about our position
arose through the fact that the telegram of the Board reached
here one afternoon after I had left.
I had that day been
talking with Mr. Farnum, Vice-President of the New Haven Bank,
in regard to this matter, and had been so liberal in my
attitude with him that when Mr. Howe, our cashier, reported
to me by telephone the receipt of this telegram, I hold Mr.
Howe to call Mr. Farnum up, and suggest to him that he pursue
a conservative policy in the matter, and that I would talk
with him the next morning by telephone, which I did, and during
this conversation I told him just what I have written above
as to our attitude.
There was no foundation of fact at all
for Curtis' statement in regard to our attitude.




II

FREDERIC H. CURTISS, CHAIRMAN

Benjamin Strong, Jr., Esq., #2.

I did not know until yesterday that the Chicago
bank had taken formal action in this matter, but I did hear
from Mr. Wold that his barillrad done so, and wrote him quite
on as tothe irdesirability of such
frankly, expressing my op
formal action in the matter. I left New York yesterday with
the feeling that this situation is pretty hopelessly mixed
up now, though Mr. Kent seemed to be fairly optimistic that
they might be able to arrange for a $50,000,000. credit, instead
of $100,000,000. as originally planned.
Our meeting in New York suggested the old days of
our executive committee. The perfectly informal meetings of
Mr. Rhoads, Mr. Fancher and I, which / talked over with you
last June before you went West, were arranged to avoid entirely
Just exactly
any suggestion of a formal committee meeting.
how Mr. Seay and Mr. McDougal were annexed to the meeting
yesterday I do not know. They were both on hand, and it
looked very much like the old executive committee which was
anathema to the Federal Reserve Board.
I was somewhat embarrassed by the situation, and
made as adequate explanation as I could to Mr. McDougal
and Mr. Seay that Messrs. Rhoads, Fancher and I were not
trying to put anything over on them by having little quiet
meetings of our own without saying anything to anyone about
it, but I am not sure that our Scotch friend from Chicago
was fully convinced.
I think that we shall have a Governors' meeting
in Washington either the last of this month or the first
of next, and before that time I will write you definitely
as to when it will be, and as to what questions of real
interest are coming up.
I hope that you continue to mend, and that you are
enjoying your winter in Denver.
With kind regards, believe me to be,
Faithfully yours

.a'

ALA/11




.

//

DIRECTORS

AFRED L. AIKEN

FREDERIC H. CURTISS, cHAIRmAN

GOVERNOR

F,

AND FEDERAL RESERVE AGENT

FEDERAL RESERVE BANK
OF BOSTON

.2RIMON M. HOWE
CASHIER

ERNEST M. LEAVITT
ASST. CASHIER

53 STATE STREET

CHARLES A. RUGGLES
MANAGER COLLECTION DEPT.

4.4e

WALTER S. HACKNEY. VICE-CHAIRMAN
AND DEPUTY FEDERAL RESERVE AGENT

THOMAS P. DEAL. BOSTON. MARS.
CHARLES G. SANFORD, BRIDGEPORT, CONN.
ARTHUR M. HEARD. MANCHESTER. N. H.
CHARLES A. MORSS, BOSTON. MASS,
EDMUND R. MORSE, PROCTOR, VT.
CHARLES G. WASHBURN, WORCESTER. MASS
ALLEN HOLLIS, CONCORD. N. H.

Nov. 28, 1916.

Benjamin Strong, Jr., Esq.,
4100 Mount View Blvd.,
Denver, Colo.
Dear Strong,-

I am sorry to have let such a long time go by
since my last letter to you, though nothing very important
has happened in the meantime.

I spent a very pleasant day in New York a week
ago Friday, with Mr. Treman and Mr. Rhoads, discussing largely
the matter of acceptances drawn under the various French credits
that have been established here, particularly as to the difference
in rate between them and the ordinary foreign acceptances drawn
in the normal way.
With no intention of straddling between the position
of the New York bank that there should be no discrimination
agains't these bills,and of some members of the Board that there
should be a very distinct discrimination, I do feel that we
should get perhaps 1/4 of lc'7, higher rate on these renewal bills
than on the ordinary commercial bill.
I have had several
discussions with the presidents of some of the larger banks here
in regard to the matter, and I think they concur in my feeling.
I think, however, that it would be a great mistake to make any
formal announcement that might give the impression that there
was a disposition in the Federal Reserve Board or the Federal
Reserve Banks to seriOusly discourage the establishment of such
credits, for I fully recognize the great importance of them
under existing circumstances.
In this connection I suppose that before you receive
this you will have seen the statement of the Federal Reserve
Board through the 21ssociated Press in regard to the policy of the
national banks in buying British exchequer bills that Morgan
Co.
is trying to iilace and create a market for. This statement has
in a teapot" here, in both the larger and the

LaZIP:n

.the feeling seeming to be very general that the national banks

"t714'41

were quite competent to deal with this matter discreetly, and did
not appreciate even a semblance of dictation as to policy from the
Federal Reserve Board.

My personal feeling is that the banks can deal with this
situation just as discreetly as they can deal with the matter of
handling increased gold imports.
I think that the p
in the Press notice that they could deal with the latter discreetly



..,enjamin Strong, Jr., Esq., §2.
41t4r(:,

but not with exchequer bills is entirely untenable.
I think I
The money situation here is distinctly firm.
wrote you that we had bought all the bills that the First rational
Bank had in its portfolio, and are buying from day to day such
bills as they come along. We are also making contracts for arrival
bills in considerable amounts both with them and and the National
Shawmut, at 1/4 of 1% higher than our spot rate. We are getting a
pretty fair demand for rediscounts, principally from the Boston
banks, who are practically all loaned up close. The rediscounts are
most all for short time, and at consequently low rates, but we
are making very good earnings, and I expect that we shall pay a
dividend at the rate of 6% for the first full year of operations,
and perhaps up to Jan. 1, 1916. We have had about 50 of our
banks rediscount with us at one time or another, and at the
present time one or two new ones are coming in every week. We
have been considering quite seriously advancing our short time
discount rates, but I do not think we shall do so at once.

Our check collection system grows slowly, but I think that
we are developing a very much better feeling among our member
I have had one of our junior officers
banks in regard to it.
go out and visit a good many of the more important country banks
to talk over with them the check collection operations of the
Reserve Bank, and find that it has proven very effective missionary
work.

I look forward with the usual dread because of your absence,
to the Governors' Conference in Washington, and everybody will be
much relieved when you get back on the job, toward which I hope
I will see to it
that you are making real and rapid progress.
this time that some of the ouestions that were left unsettled at
our meeting here in August are brought to a definite issue.
I must confess that it worries me more or less to find so much
feeling as to making checks of the Federal Reserve Banks good for
I
immediate credit at par at any other Federal Reserve Bank.
judge that Hr. Delano feels very strongly in favor of this, and I
think that he is vigorously supported by Mr. Seay. I keep writing
Mr. Delano that it seems to us that we have been making about as
rapid progress as we .could expect, and that I think we had better
digest what we have already undertaken before we try any additional
developments of our collection system.
The New York bank have doubtless advised you that there is
to be a meeting of the auditors and transit men before our Governors'
meeting, and I imagine that with the subjects that they will turn
over to us in addition to our own program, we shall have a long
I wish there was something that could be done to
and busy time.
press the carrying out of the tentative arrangement that you made
That seems to be pigeon-holed somewhere between the
in London.
State Department and the Federal Reserve Board. I have talked with
Mr.Jaebuiza number of times about getting busy on it, but you know
without my writing you what his consistent attitude is in this
If you can suggest to me any way that we can press this,
matter.
and get some action on it, I should be delighted to see that it is
carried out.




,jamin Strong, Jr., Esq.,

43.

°N
kv=-I am very busy at the present time trying to get some of our
,

larger trust companies into the system, and have been working on
the Clearing House Committee to get them to bring pressure to bear
to effect this, and am conservatively optimistic as to the future.
I really feel as if we might acomplish something on this line in
the course of the next month or six weeks.
four of the larger trust companies here to apply for membership
I am sure that most of our larger and more important country
trust companies will almost at once follow suit.
Things have been pretty busy with us on the whole, and the
result has been that I have been pretty close on the job, though
I took one day off early in the month for a day's shooting up in
the country, but only got two birds, and last Saturday I took my
small boy and his Mother to Lew Haven for a week-end, to see
a demonstration of the shortcomings of the "Haughton System"
as applied to Harvard football, and I must confess to a large
amount of middle-age satisfaction at the result of the game,
althongh the score really did not show the superiority of the Yale
team that actually existed.
I wish that circumstances were such that I could get to
Denver for two or three days, to talk over w7th you many things
that are coming up from day to day in our operations, and that
would make too bulky a letter if I included them all.
I think
on the whole that the system is making friends, and is making slow
but sure progress.
4e certainly see an increasingly friendly
attitude aMong the more important banks in this district.
I hope that you are continuing to gain, and are thoroughly
enjoying your stay in Denver, and shall hope to hear continuing
good reports from you when you find time to write.
With best wishes, and warm personal regards, believe me
to be,

Faithfully yours,

P..S.Have you read Hartley Withers' "Poverty and Waste?"
If not,
I wish you would let me send you a copy, for it is well
worth reading.




If we

DIRECTORS

ALFRED L. AIKEN

FREDER/C H. CURTISS. CHAIRMAN

GOVERNOR

RRIMON M. HOWE
CASHIER

ERNEST M. LEAVITT
ASST. CASHIER

FEDERAL RESERVE BANK
OF BOSTON

CHARLES A. RUGGLES

53 STATE STREET

MANAGER COLLECTION DEFT.

A LP.
4

AND FEDERAL RESERVE AGENT

WALTER S. HACKNEY, VICE-CHAIRMAN
AND DEPUTY FEDERAL RESERVE AGENT

THOMAS P. BEAL, BOSTON. MASS.
CHARLES G. SANFORD, BRIDGEPORT. CONN.
ARTHUR M. HEARD. MANCHESTER. N. H.
CHARLES A. MORSS, BOsToN, MASS.
EDMUND R. MORSE, PROCTOR. vi.
CHARLES G. WASHBURN, WORCESTER. MASS.
ALLEN HOLLIS, CONCORD, N. H.

December 18, 1916.
4

Benjamin Strong, Jr., Esq.,
4100 Mount View Blvd.,
Denver, Col.
Dear Strong,-

Doubtless you have already heard from Mr.
Treman of our conference in Washington. Every time we
have one of these meetings I am more than ever impressed
by what you have contributed to their success, and feel
more keenly the lack of your advice and leadership. I
hope that before we have many more you will be back with
us again.

The Board established a new practice in asking us
to meet with them before we began our own meetings, in order
that they might advise us of matters that they had pressingly
in mind, and which they would like us to consider. This
seemed to me on the whole a good thing, as it saves a good
deal of possible lost motion.
I was very much i
at this first meeting with the apparent disposition of the
Board to take a much more
active part in the activities of
the banks themselves than in the past, in fact, Mr. Harding
stated quite frankly that they and some members of Congress,
including Mr. Glass recognize the Federal Reserve system
as a central bank, with the Federal Reserve Board as the
real power in its conduct and operation.
Mr. Harding advised us of a number of amendments
that the Board is urging as matters of principal interest
at the present time; The matter of making drafts of Federal
Reserve Banks immediately available at par anywhere, was
discussed, and the necessity of taking some action to
expedite this matter was presented somewhat forcefully.
I suggested because of the large size of the Conference
and of the Board that it would probably be best to have
a Committee deal with the Board's Committee on Clearances
upon this subject. Mx. Harding acquiesced in this, and
said that while he did not wish to interfere at all with
the appointment of committees, it seemed very important
that the Committee of Governors should be made up in such
a way that its members should be easily accessible to
Washington, and repeating that he did not wish to interfere
in any way suggested that the Committee might consist of Mr.
Seay, Mr. Fancher and Ur. McDougal.
As Mr. Seay and Yr. Fancher
are the strongest advocates of the plan making drafts of Federal
Reserve Banks immediately available, this did not look good



Benjamin Strong, Jr., Esq.,

2.

to me, so I at once said that Ogt it seemed to me the Committee
ought to be larger than three, and while I welcomed his suggestion, and was very glad to appoint the three men that he
named, I would take the liberty of adding two more, and appointed
Mr. Treman, as Chairman of the Committee, and Mr. Rhoads as
associate, both being strongly opposed to the par proposition,
and thereby changing the complexion of the majority. MT. Treman
asked me if I would not take his place on the Committee, but
it seemed to me that he had better stay on, because I can keep
in very close touch with the Committee, and if they go to
Washington will arrange to have a meeting of some other
Committee of which I am a member at the same time, so that
I am very sure that some of the Board feel
I will be there.
that I am a reactionary in this whole matter, and that if I
put myself on the Committee I would be rather stacking it to
the prejudice of the development of their plans.

You will learn of the disposal of the items on the
program from the minutes which will be sent you in due course.
Some of the proposed amendments submitted by the Board were a
good deal of a shock to me, particularly the provision for
associate membership in the Federal Reserve system, the plan
being to bermit state banks and trust companies to become
associate members, they agreeing to keep their reserve
deposits with us, but not being obliged to hold any stock,
and apparently being outside the scrutiny of the comptroller,
and of the Federal Reserve Banks.
In return for
they would have the privilege of rediscou_ting with us with
the endorsement of a member bank on their paper.
It seemed to me that this plan would be entirely
ineffective in attracting satisfactory membership. The best
of the trust companies would hot be willing to go to their
depository banks and ask for their endorsement, and the poorer
ones that would be willing to are the ones that we do not want
Further than this, I think that we have gone far
as members.
enough in offering inducements to state banks and trust companies
to come in, and I feel that the trust companies themselves
would feel that we arp sacrificing principles to expediency,
and I also think that the member banks would be dissatisfied
with any further apparent laying down on the members. It seems
to me that such an arrangement would lower the prestige of the
Board in the minds of the best state banks and trust companies,
and that we would not attract any desirable membership under
it.

A few weeks of fairly firm money will do more to
interest the outsiders than the plan proposed could possibly
do. There is another amendment proposed to change the reserve
requirements of the member banks, eliminating all requirements
for vault reserve, and simply making mandatory the reserve
in the Federal Reserve Banks. No satisfactory basis for the
establishmentof the percentage of such reserves has apparently
been arrived at, though there have been suggestions of 6% or 7%
for the country banks, 12% to 14% for central reserve city
banks, and 9% or 10% for reserve city banks. The proposed
change in reserves for country banks would probably result in



enjamin Strong, Jr.,

Esq., #3.

reserve requirements in the country banks, and would
alienate them still farther from the Federal Reserve system.
(Ziincreased
Further than that, if they were allowed to reduce their cash
reserves to the irreducible minimum, a considerable part of
the hoped-for increase in resources of the Federal Reserve
Banks would in my judgment be used in more or less chronic
This change is so radical
rediscounts with the country banks.
and its erfects would be so far-reaching, that I should be
very loath to undertake it at the present time. It would
certainly require the setting up at once of a large and active
money department in all the Federal Reserve Banks, to take
care of their varying cash needs, and I think that this subject
should be very carefully worked out before we plunge into it
to such an extent that we cannot extricate ourselves.
As you may remember, I am somewhat radical in my
ideas about reserve requirements anyway, and it seems to me
that as an academic propbeition if banks were competent
to operate in that way that there should be no required reserves,
but I do not believe that any such ideal condition is possible
In this country with the banks operated as they are. Apparently
the real underlying motive for the proposed amendment is the
desire to make Federal Reserve notes good vault reserve for
banks. Almost everybody seems to be in favor of this now,
but we were told in Washington that Mr. Glass was opposed to
it, and was not willing to change his position in this matter,
but that he was probably willing to work for the proposed
amendment, which accomplishes the same thing in an indirect
way, plus a great many complications that apparently have
not been very carefully worked out.
Personally, I should prefer to see continued
missionary work in the matter of an amendment making Federal
Reserve notes good reserve, until I had very much more data
on which to base the necessary percentages of reserve requirements. I am afraid that it w,s a good deal of a shock to
P. W. to find unanimous opposition on the part of the Governors
to both these plans.
The Board also submitted a plan for a super-tax
on national bank note circulation to force its retirement.
I am not clear in my mind that the country is prepared for any
such coercion as this heavy super-tax suggests.
I wish tremendously that I could go out to Denver
for two or three days to talk over with you the whole situation,
which is full of interesting problems. These meetings in
Washington always depress me a little, and I think it would
do me good to get some of your views on the matters in hand.
We are still getting a very savage reaction about
here in connection with the Board's attitude on the exchequer
bills, and when I was in New York Friday I was jumped upon
by all my old friends there. It seems a great pity that
this whole situation was not handled differently.
The general
situation here has eased somewhat since last week, and the
week before, but money is still fairly close, and we are doing
a good deal of rediscounting.



Benjamin Strong, Jr.,

Esq., #4.

We are pressing the matter of getting some of our trust
companies in, and I think are making some progress, but it is
slow.

This will reach you just before Christmas, and it is
needless to say that it takes my hearty greetings to you and
your household, and the hope that the new year is going to
bring you renewed health and strength, and bring to us your
most welcome return for active participation in what we are
doing.

With best wishes, I am,
Faithfully yours,

ALA/M




L. AIKEN

DI R ECTORS
FREDERIC H. CURTISS, CHAIRMAN

GOVERNOR
F

RIMON M. HOWE
CASHIER

ERNEST M. LEAVITT
ASST. CASHIER

AND FEDERAL RESERVE AGENT

FEDERAL RESERVE BANK
OF BOSTON

WALTER S. HACKNEY, VICE-CHAIRMAN

53 STATE STREET

CHARLES A. MORS, BOSTON, HAS,

CHARLES A. RUGGLES

AND DEPUTY FEDERAL RESERVE AGENT

THOMAS P. REAL. BOSTON. MASS.
CHARLES G. SANFORD, BRIDGEPORT. CONN.
ARTHUR M. HEARD. MANCHESTER. N. H.
EDMUND Ft. MORSE, PROCTOR. VT.
CHARLES G. WASHBURN. WORCESTER. MASS
ALLEN HOLLIS, CONCORD, N H.

MANAGER COLLECTION DEPT.

liag

December 19, 1916.

Benjamin Strong, Jr., Esq.,°w-4100 Mount View Blvd.,
Denver, Colo.
Dear Strong,-

It is a good deal like riding a willing horse to
death to inflict another letter on you in addition to my
rambling and desultory one that I wrote you yesterday, but I
find that I have omitted from it any mention of the development of the foreign relations matter.
As you doubtless know, Curtis submitted this for the
confidential information of the Governors present, not to be
transmitted by them to their banks until the matter had
We were given to understand that this
developed further.
had been released from the limbo of the State Department, and
Governor Harding
was now up to the Federal Reserve Board.
advised us that they felt they ought not to commit themselves
on it until they had had an opportunity to confer with Secretary
McAdoo, and they hoped to have that conference on Saturday, when
he was expected in Washington.
We impressed on the Board with all the force that
we cou144Ihe impossibility of endeavoring to close this arrangement aneZdo any business under it until after the war, and I
told Governor Harding and Mr. Warburg quite frankly that it
seemed to me that asximatter of common courtesy and honorable
dealing between such institutions, that we could not make any
such suggestion to your British friends - that I did not think
the volume of business was of as much importance as the immediate
setting up of an active relationship under the agreement that you
arranged.
If such an arrangement could be made now, and we entered
into active business relations with your friends abroad, it seems
to me that it would do as much as anything could to soften the
impression made by the announcement of the Board in regard to
foreign loans, and to dispel the idea that their position was
taken because of any international prejudices.
Mr. Curtis showed me your letter to him in regard to
the proposed trip to London if this plan should be approved. I
think that you should not only for your own sake, but for the sake
of all of us, go very slowly in undertaking any such expedition,
unless you have the most complete approval from your doctors, but



Benjamin Strong, Jr., Esq., #2.

0

if you do have, and are disposed to go, and would like to have
me go wit- you to learn the ropes, I see no reason why I could
not arrange it, and of course would count it a wonderful opportunity and privilege.
Entirely aside from any personal interest in the matter,
it seems to me that it is of the greatest importance that the
Governor of one of the banks should go with you, in order that
more than one officer of the Reserve Banks should be personally
known to the bankers abroad, and should have learned at first
hand some of the business conditions and methods existing there.
With kind regards, I am,

Faithfully

ALA/M




yours,




RESERVE BANK

FE

ALFRED L. Al KEN

.03

OF-06105TO N

GOVERNOR

December 26, 1916.

Dear Strong,-

Thank you ever so much for
the very charming card that I received
from you this morning. I doubt if you
know to what extent I reciprocate the good
wishes contained therein.
I had a bully Christmas yesterday,
as my Father and Mother (Father is 84,
and Mother is 80) with one of my
sisters came and spent Christmas with us,
and as it was the first Christmas that
I have had with them for over twenty
years, it gave an unusual flavor to the
day.
Mrs. Aiken's family had dinner
with us, so that with a family of twelve
we had a real old-fashioned Christmas
party.

I had just one disappointment in
the day;
I had promised myself a Christmas

present of a talk with you by telephone,
and had a call in for over seven hours,
but when they finally told me at about
eleven o'clock that they thought they
could get a connection through in the
course of the next hour, it seemed to
me that there was a chance that you
might have gone to bed, and that it would
be a crime to disturb you.
My whole family were lined up with
the hope of having a talk with you to
express their best wishes for a very
happy New Year. The last thing that my
small boy of nine said when I went up to




r_ay good-night to him was "Wish Mr. Strong
lappy New Year for me." He was as much
dlJappointed as I, and he had been hovering
around the house most of the afternoon in
hopes that he might add his good wishes to
mine.

You must accept the intention in
lieu of the reality, but I am not going
to give it up, and will see if on New Year's
Day I cannot have better luck, because I
should like to hear the sound of your voice.
This isn't a business letter, and I'm
not going to put any business in it, but
in the course of the week will write you
about some matters that are of interest
locally.

I do not know of anything that I
hope for more in the New Year than a complete restoration of health to you, and
I hope that before 1917 has gone we shall
have you back with us again.
With affectionate good wishes,
believe me to be,
Faithfully yours,

Benjamin Strong, Jr., Esq.,
4100 Mount View Blvd.,
Denver, Colo.

pay go(
'48,PR.

diJappc
around
hopes 1
mine.

lieu o:
(

to giv
Day I
should

not go

in the
about
locall:
hope fl
plete
I hope
have

believ,

Ben jam




cRED L. AIKEN

FEDERAL RESERVE BANK
OF BOSTON

GOVERNOR

ORRIMON M. HOWE
CASHIER

ERNEST M. LEAVITT
ASSISTANT CASHIER

NTATE

CHARLES A. RUGGLES
MANAGER COLLECTION DEPT.




a

STREET

kg

DIRECTORS
FREDERIC H. CURTISS, CHAIRMAN
AND FEDERAL RESERVE AGEN

WALTER S. HACKNEY. VICE-CHAIRMAN
AND DEPUTY FEDERAL RESERVE AGENT

THOMAS P. BEAL, BOSTON, MASS,
CHARLES G. SANFORD, BRIDGEPORT. CONN.
ARTHUR M. HEARD, MANCHESTER, N. H.
CHARLES A. MORSS. BOSTON. MASS.
EDMUND R. MORSE, PROCTOR. VT.
CHARLES G. WASHBURN, WORCESTER. MASS
ALLEN HOLLIS, CONCORD, N. H.

December 28, 1916.

Benjamin Strong, Jr., Esq.,
4100 Mount View Blvd.,
Denver, Col.
Dear Strong,-

Thank you for your two very interesting
letters under date of the 24th inst.
As to the first one in regard to a possible
trip abroad, it is needless to say that I should look
forward to it as a wonderful privilege, and should
certainly arrange my plans to go with you at any time
that you could get away.
I am ever so much obliged to you for the
suggested books as to which you call my attention. I
have all of them in my library, but have only nibbled
at Noyes' book "The Financial Chapters of the War,"
and have not read Withers' "The Meaning of Money" at
all.

I should be very much obliged to you if you
would send me as you suggest an exact statement of the
problems involved in gold shipments. My efforts to
solve it would probably be entirely futile, but I
should learn something in the process.
I note what you say about a competent
secretary who speaks French fluently. If later on the
plan takes definite enough shape, and you care to have
me, I would be glad to look around to see if I can get
on the track of such a man. There is a man whom I know
of here at present employed as bookkeeper in the Old
Colony Trust Company, who is about 32 years old, was
brought up in the Old Colony, and six or seven years
ago went to France in the employ of the American Express
Company, and was I think for five years in Paris, coming
home some time after the war broke out. I understand
that he sneaks French well and easily.
There is also
the son of the treasurer of the Old Colony Trust Company,
a boy of about 25, a Harvard graduate, who was I think
for about two years in the employ of the American Express
Company in France.
This boy is a gentleman by birth and
breeding, and comes of good, old Salem stock. How good
his French is I do not know.

Benjamin Strong, Jr., Esq., #2.

0

Speaking of French reminds me of the efforts
I have been making, having the future in mind, to acquire
some speaking knowledge of French myself. I can read it
mildly, and prevailed upon Mrs. Aiken to let me join her
in sessions that she has been in the habit of having
I was
every Wednesday evening with her French teacher.
morals were as bad as my
informed last night that if my
French, I would be hopeless, and I confess that I have
become discouraged, and have come to the conclusion
that I am too old to acquire a foreign tongue. However,
I am struggling with it, and shall continue to struggle
with it in the hope of at least being able to keep fed
on my next trip to Paris.
Please keep me posted as to your plans in this
matter as they develop, as there will be a good many
preliminary arrangements to make before departure.
Your other letter, bearing upon various amendments, also interested me greatly. I think the disposition
on the part of the Governors to oppose most of the amendments was because of their natural disinclination to
commit themselves upon snap judgment, to a proposition
that dealt with fundamentals rather than because of any
well settled ground for objection to most of the amendments
proposed.




As you say in your letter, there was distinct
disagreement as to how an amendment changing the reserve
requirements of member banks would work out, and hardly
any two men were of the same mind as to the percentages
of required reserves, and upon any given percentage one
man felt that it was too little and the next man that it
was altogether too large, with the consequent result
that everybody felt that we were not favorably disposed toward the
change until we had a great deal mor'e light upon it.
I think that the plan proposed
This is exactly my feeling.
is a much better and more scientific one than anything
we have had in this country, and I would like to see it
made effective, 'but not until we get a great deal more
information as to the effect upon bank reserves than we
now have. This same mental attitude applied to matters
of retirement of national bank notes, and T think we
were all agreed that this matter should be expedited
I think, however that we ought
as rapidly as possible.
to have something a good deal more definite than we were
told in Washington before we give definite and formal
axproval to these amendments that were suggested.
In the matter of associate membership for
trust companies, I frankly do not see anything in it,
except perhaps as you suggest a preliminary step to
force the trust companies and state banks in by coercion.
I recognize the fact that it is absolutely essential that
the trust companies in some way should be gotten in, and

Benjamin Strong, Jr., Esq., 13.

I think that the longer they stay out, the more firmly
fixed will be their disinclination to come it, and their
determination to herd by themselves, and leave the burden
on the rational Banks. Perhaps the associate membership
plan is a necessary step to their coercion, but I need
some showing in the matter before I should feel favorably
disposed toward it.

I only wish that I could arrange matters here
so that I could join Curtis and go out and makeyon a little
visit, and talk over some of the nuestions under immediate
discussion, but I am sorry to say that I see no itmediate
prospect of its being possible for me.
If our trip abroad
materializes we will doubtless have plenty of time to talk
them over on the way over and back.
With warm personal regards, and thanking you
again for your good letters, believe me to be,




Faithfully yours,




ALFRED L. AI KEN
53 STATE STREET
BOSTON, MASSACHUSETTS

January 50, 1917.

Benjamin Strong, Jr., Esq.,
4100 Montview Blvd.,
Denver, Colo.,

Dear Strong,It goes without ,saying that I was very
much interested in the two letters that you sent me
just received.
The matter is of such serious importance
that I think in fairness to all concerned I should
talk this matter over with you, rather than try to
discuss it by correspondence. I shall see if I
cannot arrange to go to New York some day next week,
to talk with Mr. Woodward and Mr. Peabody, and shall
try to arrange to go put to Denver to see you as soon
after that as is posSible.
I understazid from the office in New York
that you have give; up the Arizona expedition. Please
let me know whethst or not you expect to be in Denver
for the next three or four weeks, so that I may make
my plans fit intq yours.

I want to tell you how much I appreciate your
courtesy in thiS matter, and the confidence that you
show in me.
Looking forward to seeing you in the comparatively near future, I am,
Faithfully yours,

'ED L. AIKEN
.,-,..-,....a.se1FeKNo
F

FEDERAL RESERVE BANK

IRIMON M. HOWE
CASMER

ERNEST M. LEAVITT
AssT.cAsHIER
CHESTER C. SULLEN
ASST. CASHIER

CHARLES A. RUGGLES
MANAGER COLLECTION DEPT

OF BOSTON

DIRECTORS
FREDERIC H. CURTISS, CHAIRMAN
AGO FEDERAL RESERVE AGENT

WALTER S. HACKNEY, VICE-CHAIRMAN
AND DEPUTY FEDERAL RESERVE AGENT

THOMAS P. SEAL, BOSTON, MASS.
THOMAS W. FARNAM. NEW HAVEN, CONN.
ARTHUR M. HEARD. MANCHESTER. N. H.
CHARLES A. MORSS. BOSTON, MASS.
EDMUND R. MORSE, PROCTOR. VT.
CHARLES G. WASHBURN, WORCESTER, MASS.
ALLEN HOLLIS, CONCORD. N. H.

January 12; 1917.
Ben;lamin Strong, Jr., Ese.,
Denver, Colo.

Dear Strong,Thank you very much for your cheerful letter of last week.
I hope that every week brings its reasonable accumulation of health and
strength.
I am somewhat selfish in this expression, because I greatly miss
the opportunity to discuss with you matters that are pressing in the development of the Federal Reserve Banks. We recently received, as doubtless
you did, a copy of the proposed amendments to the Act, and I enclose herewith a copy of letter that I am sending to Mr. Warburg discussing them
separately - also discussing them temperately. As a matter of fact, the
amendments in regard to changes in reserves and giving the Board power to
increase the reserve requirements are going to raise particular "hell" in
tr.'s district, and I am (mite ready to take to the Rocky Mountains or any
other place to escape the situation that will arise.
I wish the mountain might be moved to Mahomet - a courteous way
of saying that I wish Warburg and I could go to Denver again, and inflict
ourselves upon you, and discuss this whole trust company, non-member bank
matter.
I do not agree with you and Warburg about the associate membership
plan, and think that it would be entirely ineffective, but Heaven knows I
am anxious to find a loop-hole through which we can get them in, and if you
and Warburg can show me that this is the way, the plan will have no more
ehthusistic supporter than myself. I think that the proposed plan for
clearing membership of non-member banks is "punk" and will amount to
nothing, and I cannot escape the feeling that this sort of groping around
gives an impression of indecision and weakness in dealing with this whole
matter.
As T wrote you, we have been pressing the matter of state bank
and trust company membership, but have gotten no results yet. The American
Trust Company, one of the most important of the middle size institutions
tell me that their Board'of Offiders would be unanimously in favor of
coming in were it not for the fact that the operations of the Clayton Act
made necessary the elimination of Mr. Saltonstall, a partner. in Tucker,
Anthony & Co., from their Board and Executive Committee. Mr. S. has been
one of their most active and interested directors, and they are not willing
to give him up. This is very disappointing as it has taken a great deal
of time and talk to get these people to acquiesce in the general proposition, and I fear now that the matter is indefinitely delayed. With two
of the other middle size trust companies I think we are still making progress, and I understood a day or two ago that the Commonwealth Trust Company had definitely decided to come in.
I understand that these amendments have been introduced into Congress.
I may be presuming in feeling that it would have been better had they been
discussed by the Board with the operating officers of the barks, and perhaps
with the Advisory Council, before they wereintroduced, for after all is
said and done the operating officers and the members



Benjamin Strong, Jr., Esq., #2.

of the Council have had a good deal more practical banking
experience than most of the members of the Federal Reserve
Board, and contribution of advice based upon this experience
ought to be valuable and save mistakes.
Mr. Delano was here on Monday, and I had a talk
with him in regard to a consolidation of the "57 varieties"
of committees of the Governors, made up of various arrangements
of about the same men, and suggested the desirability from
the point of efficiency of some kind of single committee, call
It what you may, to deal with these things in a systematic
It is plain enough that the present plan is
and orderly way.
ineffective. We have to use the men who are
wasteful an
geographically available for these Committees, and the result
is that they are made up of the same men who constituted our
original Executive Committee, and the present distribution of
responsibility seems to me perfect child's play.
Mr. Delano acquiesced in my general proposition,
and seemed to think that it might be a goad plan to have
some sort of a standing committee, and suggested that one
member of the Board be made a member of this committee, a
suggestion which if carried out would to my mind greatly interfere with the frank interchange of views and effectiveness of
I am going to talk this matter
the action of the Committee.
over with the Board when in Washington the week after next,
and hope that we will get somewhere on it in the interests
of progress. I think that if a member of the Board was on
this Committee, as a practical matter most of the Committee
meetings would be held at the lunch table, and in the mens'
rooms outside the formal meetings.
We are going to have quite a meeting in Washington
on the 22nd, and I expect that Treman, Rhoads, Seay, Fancher
and McDougal will all be there for meetings of different
I only wish that you were to be one of the party.
Committees.
Do not trouble yourself to answer the rather
rambling letters that I send you covering conditions as I see
them, unless there is some specific matter in them upon which
you want to comment. It is needless to say that I am always
glad to hear from you, but there is no reason why you should
be burdened with letter-writing by way of mere acknowledgment.

-

With kind regards, and best wishes, I am,
Faithfully yours,

,

I am sending you today a copy of the United States
Investor, containing an article in which you may be interested..
P.

S.




Jan. 12, 1917.

Hon. Paul M. Warburg,
Vice-Governor, Federal Reserve Board,
Washington, D. C.

Dear Mr. Warburg,-

beg to acImowledge receipt of your
letter of the 3rd inst., and must apologize for my delay
in answering it. I was anxious to give the amendments
proposed by the Federal Reserve Board, as reoited in
2, 1917, careful
your letter p944, under date of January them, which
consideration, before writing you about
accounts for my delay.

I am very sorry indeed to learn that your

Christmas vacation was so unsuccessful, and particularly
that it should have been made se by the illness of various
members of your family. I hope that cause has long since
been removed.

In regard to the trust company matters here,
*I am sending to the Board today under separate cover a
copy of letter received from the American Trust Company,
advising us of their decision not to come In at the present
time. As stated in my letter to the Board enclosing this
letter, the realsreason for their decision was the fact
that coming in necessitated the retirement of Mr. Philip
3altonstall, of Tucker, Anthony & Co., from their Board
of Directors, and Executive Committee. All the objections
on other grounds had been overcome, but Mr. Fessenden told
me that the oast member of their Executive Committee had
been converted, and that they no doubt would have come in
had it not been for the operatIon of the Clayton Act in
Mr. Saltonstall's case. I shall Itee this matter alive,far
but I am afraid that things have come to an impasse so
as this Company Is concerned. It is a source of very
real regret, as I have spent a great deal of time with
them, and think that their coming in would do more to help
than that of almost any other trust company inttown. The
Commonwealth Trust Company tatter Is, I think, working
are
favorably. The International crust Companytheyalso still
fact that
would
favorably disposed in spite of the
partner in Hornblower &
lose one of their active directors, a
Weeks, under the Clayton Act limitations.
I note what you say about Mr. Strong's attitude




Hon. Paul M. Rarbul-g, #2,

In the matter of associate membership trust companies,
and the matter of reduction of capital. I had a letter
from Mr. Strong myself expressing the same opinion as
you suggest. I know of no two men with whom I would
prefer to be in perfect agreement than with you and
Strong, and regret that it still seems to me that the
Proposed associate membership would be ineffective so
far as getting the trust companies to come in is
concerned, though I admit its possible usefulness as
a step toward coercive measures later on.
To take up the amendments as recited in #944,
of January 2, 1917:
648-A. Amendment to Section 16, in the matter
of circulation for Federal Reserve Rotes, and counting of

gold held by the ngent as part of the bank's reserves.
I think this is admirable.

945. Amendment to Section 19, changing the
reserve requirements of member banks. I still feel that

I at any rate have not sufficient statistical information
to pass intelligently upon the percentages recited in this
amendment. I suppose because of the fact that my experience
in legislative matters has been confined largely to our
State legislature, t db not appreciate the difficulties of
legislation on a larger scale, and because of tkls I cannot
help harking back to the idea that the way to deal with
this question at present is simply to make Federal Reserve
Notes good reserve money for member banks. I cannot escape
the feeling though I amhot in position to support it by

figures that the changes suggested in this amendment, plus
vault requirements, will mean an added burden to the country
banks, and that we shall have a perfect storm of protest
from them on this point. If any figures have been prepared
controverting my feelings in the matter, I should be very
much interested to see them.
As you know, 1 have been in favor of fixed
reserve in the Federal Reserve 3anks as the only reserve
requirements of member banks, but I am in grave doubt as to
the wisdom or practicability of such a plan at the esent
time for the very reason that you suggest, namely the danger
of undue expansion. That being so, I should much prefer
allowing the reserve requirements to remain as they are,
and making Federal Reserve Eotes good reserve money, and 1
cannot quite understand the aeparent objection to this an the
( part of some members of Congress, because this proposed
amendment effects the same thing in a roundabout way with
some additions which I think undesirable, the principal one
being the counting of national bank notes as levet' reserve
money. It seems to me that these are the poorest reserve
money that we have because of the small actual cash reserve
behind them, and that they are not in the same class at
all with Federal Reserve notes, and I cannot quite see how
one can consistently oppose an Act making Federal Reserve
notes good reserve money, and at the same time favor an



.

Hon.

Paul M. Warburg, #3.

amendment which has the same result, and In addition makes
national bank notes good reserve. Of course I can only
speak from experience in this district, but here I am
satisfied that our banks are getting well accustomed to
the present reserve reeuirements, and are bearing them with
I am sure that practically all of
increasing complacency.
them would welcome making Federal Reserve notes good reserve
money, and would look upon it as a most effective measure
for the concentration of gold in the Federal Reserve Banks.
That be'ng so I dread any upheaval that will inevitably
arise from a change in the reserve requirements, particularly
because I am confident that it will mean increased reserves
for the country banks, and will act as a stimulus to conAth
versions from national charters to state charters.
the ez:oeption of the bank oommissionets office here in Massachusetts, which I think is an the whole favorable disposed

toward us, most of the other states are doing all in their

power to encourage conversion from national to state charters.
We get confirmatory reports of this constantly from our
member banks in the various states other than liassachusetts.
It is an extremely difficult thing to point out to the
satisfaction of member banks the advantage to be derived
from the concession made in time deposit reserves, and I am
Quite positive that most of them will not believe 14 the
wisdom of counting national bank notes as reserve at all.
If this amendment Is pressed I hope very strongly that your
suggestion of a reduction of I% in the country bank reserves
will be included. I am sure that a great row will result
from the percentages as stated in the text of the amendment
that we have.
As a matter of technical wording I would suggest
that on Page 3, #945, first paragraph, the words "for till
money" in the second line, be stricken out, as I do not
think they add anything to the force of the amendment.
906-B. Amendment to Section 11, giving the
Reserve Board power to increase reserves. Theoretically it
seems to me that this is enti-rely logical authority. Os the
other hand I think there is a very essential difference
between the actual result of the Board's authority to
decrease the reserve requirements, and its authority to
increase the reserve requirements.
With the reserve requirements
decreased the member banks would expand their loan slowly at
best, and further than that it would be entirely optional
with the officers and directors of the individual banks
whether they should avail themselves of the reduction or not,
and create expansion in credit resulting therefrom.
On the
other hand, under a mandatory increase In discretionmwould
be left with the member bank, and the contraction would
become effective immediately upon the order of the Board.
simply suggest this not by way of criticism, but because
it seeme.to me that this must be taken into consideration
innoonnection with the possible changes in the personnel and

the character of the Federal Reserve Board.



-%111.1011

////,.

,

Hon. Paul !:. Warburg, 4.
947. Amendment to Section 13. Collection of
checks for non-member banks. I think perhaps I had better
of the Board
talk this over with you and the other membersfor I do not
next,
when I am in Waehington the week after
clearing membership is going
believe that this proposed non-members in this part of the
to be effective. What the
what they

country want is the opportunity to rediscount, and definitely
are worrying about is the threat that we have veryir the
made that we will find some way of discriminating loaning
*mount of credit we grant to member banks that are
leavily to non-member state banks and trust companies. As
I see it they are perfectly content to collect their checks
In the present way, and would rather collect them through
is being passed
member banks paying our service charge which same time getting
the
at
back to them by the member banks, andwith their depository
balance
interest on their supporting charge is passed back by the
member banks,- If that service
member bank te the non-member bank as is being done here the
be :Boston with local trust companies at the present time, a
large
non-member bank will not be required to maintain as of cost
supporting balance as heretofore, becauee.thefactor
of check collection Which was included in the analysis of of
because
this account by member banks will be eliminated, this service.
for
the direct charge being made to non-members
I wish I could sit down for an evening with you
and some of the other members of the Board, and Mr. trong,
and devote the time to a frank discussion of this whole
persuasion and conversubject. My own feeling, subject to in on the present
cannot get them
sion, is that if we
by some
liberal basis, the only way that we can do so IsNational Bank
coercive legislation, as was the case when the
Act proved ineffective until a tax was levied upon circu-

lation of state banks.

Amendment to Section 22. This needs
me excellent. Also
no comment, and seems to minimum holdings of Amendment to
United States
Section 17, in regard to
905-A.

Bonds by national banks; also 026, branch banks, and 5,
amendment to Section 25; also 950, Amendment to Section
Gold I;otes available
making United States. One-Year 3%Federal Reserve Banks; for
also
circulation in the hands ef -net,
to
951, Membership of Mutual Savings Banks, Amendment rules
of this is in the
Section 9. Of course the essence Federal Reserve Board.
and regulations proscribed by the best expert In the country 7it4,ee-eetthink that '1,1r. Jay is probably the regulations, and I am
in the development of such rules and
This is
sure that he wcaild be much interested. because a matter in
which I take a great personal interest, with one of my intimate
of the largest
connections as Treasurer and 12resident State, and my very
and oldest mutual savings banks in the
friendly personal relations with the officers and directors
of tho-secO4d largebt in Connecticut.
regard to
949. Amendment to Section 4, in This needs no
assistants to the Federal Reserve Agent.

cement.




?lease accept my apologies for the length of this

on. Paul M. Warburg, #5.

All of these matters I should be most interested
epistle.
to discuss with you at your convenience the week after next.
I expect now to get to Washington on the evening of Sunday
the 21st, and to be there for probably two days, and hope
we will have time for an intimate discussion of matters
other than the specific committee meetings for which I am
going down.
lith warm personal regards, I am,
Very sincerely yours,

Governor.

ALA/fl




If

ALFRED L. _AIKEN
53
BOSTON, MASSACHUSETTS
MASSACHUSETTS

Benjamin Strong, Jr., Esq.,
4100 Montview Blvd.,
Denver, Colo.

kif.k

February 14, 1917.

FEB,!, 0

Dear Strong,-

I am in receipt of your telegram from Phoenix, and
am ever so much obliged to you for your invitation to come to
Denver.
I am very anxious to do this, because I should like
to relieve my mind upon many Federal Reserve Bank questions which
are perplexing me. I cannot, however, get so far away from
Boston until we know a little more definitely how the international
situation is going to work out.

As I wrote you, I had a very pleasant day in New
York with Messrs. Woodward and Peabody, and I also spent Monday
in Washington talking over matters with the Federal Reserve Board,
and I told them as I did your directors that I did not feel that
I could accept the proposition to go to New York. I imagine that
this whole matter has caused me as much perplexity and anxiety
as it has you, and I only wish that it were possible for us to
get together and talk it all out.
I hope very strongly indeed
that the present temporary arrangement in New York can be maintairEd
until you can get back on to the job, and we can discuss the matter
on the ground.
I fully appreciate the fact that it would be most
unwise for you to tie yourself domn to any such strenuous work as
you have been undertaking in the past few years, and I think that
it is of the greatest importance to the Federal Reserve System
that you should not do so, and that you should conserve your
health and energy to the fullest possible extent, and it ssems as
though some working arrangement should be possible by which this
could be done with satisfaction to everybody.

When in Washington I had a talk with Governor Harding
the result and impressions of which are perhaps best conveyed to you
by the enclosed copy of letter that I am sending today to Er.
Rhoads.
I am quite disturbed by the apparent disposition of the
Board to take upon itself the initiative in even small operating
matters in these banks. I feel very strongly that the organization
of the Board is not and will not in the future be of such a
character as to make them competent to deal with this detail, and
with such a policy once established it seems to me quite c nceivVe
that with a radical change in the personnel of the Board.flal4ay
filled with the very gravest dangers to the whole system:
I wish on teceipt of this that you would write me
whether or not you think it would be discreet for me to talk quite
frankly with Mr. Warburg about my feelings in this matter, and
whether or not this would be the most effective way to get to the
Board on it. Certainly if a governmental board made up of appointees



/7

Benjamin Strong, Jr., Esq., #2.

by the President is to handle even the minute operating details
of the Federal Reserve Banks, the tendency would be to encourage
the Governors of the banks to ultimately accept situations
where they can exercise wider responsibilities than under such
control, and will make increasingly difficult obtaining firstclass men for the heads of the various Reserve Banks.
I think that this is a matter of the utmost importance
in the development of the Federal Reserve System, because as
a matter of fact the confidence of the member banks in the
system is largely inspired by the impressions they have of
their own Federal Reserve Bank, and their confidence in that
is largely a matter of confidence and satisfactory personal
relationship with the Governor of the bank.

We are seeing evidences here of gradual hardening
of money.
Our excess reserves in the Boston clearing house
banks was reduced 40% last week, and we have been buying
large amounts of acceptances from the portfolios of the various
large banks.
The Old Colony Trust Company is practically
baled out, and I think that they may rediscount at any time.
The Commonwealth Trust Company which has just come into our
bank celebrated its arrival by a considerable rediscount, and
the First National Bank has been selling us acceptances from
their awn portfolio in very large volume. We have put up
our buying rate to 3-i% for 90 day prime member bank bills,
less 1/4 of 1% for additional endorsement.
I do not get anything definite for plans for government
financing, but hope that when it is undertaken itwill be done
on such a basis as will make an investment that will appeal to
the public, and that the bonds will be lodged in the public's
hands.
I am fearful, however, that the Federal Reserve Banks
will be relied upon to absorb a largerproportion of government
financial issues than I feel they should absorb in these
parlous times.
Forgive me for boring you with such a long letter. I
shall be glad to go to Denver for a little visit with you as
soon as circumstance b make it possible. Meantime I hope that
you will continue to gain in healthand strength, and that
nothing will happen to interfere with our anticipated trip
to London some time in the summer, to which I am looking
forward not only because of the pleasure it will be to me to
go with you, but from an educational point of view as well.




With warm personal regards, believe me to be,
Faithfully yours,

Yebreary

CCrIPTDENTTAL.

1917.

ries J. rhoaes, Esq.,

Governor, Federal reserve
Philade/ph4a, ra.
Dear rheads,2pent the day in ,rehington an Voneay discusning
bus mattere with the 7edoral Y.e.serve Board, among then the
stion nnCcested by ;/,. 7:reel= at to the desirahllite of having
another Governors' 'Ionference some Clue in March. Governor Harding
Deemed to think that this was herd17 necessary, and proceeded to
elaborate his viers on the whole eubject of the Governors' Conferences. He said that he felt that there wad no necorsity for
wing them more than teice a year, thns putting them on the same

as the Conferences of the 7ederal eserve egente, and the
al Advisery :ouncll, and then went on to say that it seemed to
him best that matters of operation should be handled more and more
by the Federal Reserve Board, On the theory of the concentration
of w rh as well as authority in that Board. He told me that they
hoped to add to their staff an expert transit man to whom all
transit problems could be referred, oe that the: corld be nettled
Th. the Board, apparently with the idea that this would meh
unnecessary diccuscion of these problems by the Governors in comeronce. I was somewhat disturbed by the apparent very definite eolicy
t his talk suggested, for
feel that it is. neiter w7se nor
0 to have the operations of these banks settled In such a ray.
all know that a transit expert in like a goof many other
specialists - not always sufficient17 broad-minded to see his
problems from all points Of view.

.

The beat illustration of this is a pert of the report

of the Organisation Committee bearing an clearances and collections
by the Federal F.eeerre Banks, whinh was I understand preeared by
7.1r. 7olfe, whose services were enlisted in the matter because he
was looked upon as an expert transit man. My errerience has been
that almost all the transit men develop a one-track mind, and
evolve a god eany fantastic elms because of this. -:;ith a
specialist of this sort as an advisory man ' having in mind that,
there probably will never be at any time more than two men an the
Board Who have had the practical bonMng experience acquired by
c)ming up through the ranks in the ordleary eorreercial bank, it
seems to me that we are certain to get much less satisfactory and
sound solution of the perplexities that will constantly arise
than we would If these questions were thoroughly discussed by all



les J. Rhoads,

753n.
011111

the Governors of the banks, representing as they do the point of
view of all the chief sections of the country, and applying to
,

the questions the experience seined i- commercial banking by most
of the Governors themselves.
It has seemed to me in the Conferences of Governors
that the soundness of the suggestions and criticisms of trahsit
matters has varied directly with theamountof practical experience
that these men have had in commercial banking operations, and I

think it Of great imp rtauce that all of these questions should be
subjected to the scrutiny and criticism of the Governors in joint
session before they are put in force as .operating policies of the
banks. Naturally the criticisms and suggestions of individual Governors to the Federal I:eserve Board upon these matters 8.1- not and
will not in the frtmee prove nearleyfas effective as an expression
from the Governors as a whole.

It is quite conceivable that under the policy that

'

Governor Harding has inmind that the plan as to soundness of
which the Governors were in grave deubte would be made operative,
and the responsibility In each district would be placed upon the
Governor of the bank of that district, and eculd not be passed
back to the :ederal reserve Bank0 so far as the judgment of the
. banking public in each locality is concerned.
I should like to have you write me quite frankly
of your feelings in this matter, and if you agree with me I should
be glad to take it up with some of the other Governors with, the
idea of a frank expression to the Board of our feelings in the
matter. My personal feeling is that it is one of great importance,
and that we should courteously and yore frankly state our feelngs

in the matter.
As evidence of the disposition of the Board to appear
as te operating power in the Feeerve eyetem, I would call ;our
attention to Page 9, of the Annual Report of the Federal Reserre
Board, under the head of Clearances and Collection, in which the
Board stated that they left the actual initiative in the establishrent or the &eel,- collection buslaeos to the Ieseree Banks, and
that "with their instance i.e., at the banks' instance the Board
authorized a voluntary system. They point out that this system
which you will note was started under the initiative of the banks
was not a cuceess. in this 1.aragra'h it stated that for this
reason "the Board decided in April 1916 to establish a uniform
and more comprehensive system, and it formulated a plan of
clearance and collection system whi."-cT it directed the Federal
Eeserve Banks to put into effect." I simply cite this quotation

because it seems to me a very definite reflection on the mental
attitude of the Board.
I think it highly proable that with the Board appointed as it
is,it is not likely to be in position to develop the purely operating problems of the hanks as satisfactorily as it could be done
by the Governors themselves, and I for one should like to go on
record as to my feelings in the matter.
I am sending a copy of this letter to r. Strong to
get his opin5on, which I shall be glad to report to you.



Tharles J. Rhoads, Esq., P.
0010

I expect tobe in flew York on Saturday morning, March
I do not know whether Saturday is a convenient day for you
to be in town or not, but if it is I should be glad to meet you
that mern!ng, and to ta7k over some of these matters with you.
With warm personal regards, I am,
Very sincerely yours,
2n1.




Governor.

44710-ED L. AIKEN
GOVERNOR

lettRiMON

M. HOWE
CASmER

FEDERAL RESERVE BANK

DIRECTORS
FREDERIC H. CURTISS, CHAIRMAN
AND FEDERAL RESERVE AGENT

OF BOSTON

WALTER S. HACKNEY. VICECHAIRMAN
AND DEPUTY FEDERAL RESERVE AGENT

THOMAS P. REAL, BOSTON. MASS.
THOMAS W. FARNAM, NEW HAVEN, CONN.
ARTHUR M. HEARD, MANCHESTER. N. H.
CHARLES A. MORSS, BOSTON. MASS.
EDMUND R. MORSE, PROCTOR. VT.
CHARLES G. WASHBURN, WORCESTER, MASS,
ALLEN HOLLIS, CONCORD. N. H.

ERNEST M, LEAVITT
ASST. CASHIER

CHESTER C. BULLEN
ASST. CASHIER

CHARLES A. RUGGLES
MANAGER COLLECTION DEPT

March 5, 1917.

Benjamin Strong, Jr., Esq.,
4100 Montview Boulevard,
Denver, Col.
Dear Strong,-

Your clipping from "Punch" passed on from Kains is a

very delightful reminder of the fact that spring is coming, and
that I can once more resume my normal evocation.

I wish we could

go on a little fishing trip together, and get some of the cobwebs
out of my head that have been accumulating there for two years.

Yours should be swept clean by this time, and consequently you
should be a most inspiring companion.
To get down to business, I enclose herewith confirmation
of a somewhat long letter I have sent by wire tonight.

I had an

interesting meeting in New York Saturday with Messrs. Woodward,
Jay, Treman and Curtis, and I left with a very distinct impression
that we were all agree'd that it was not practicable for me to go

over to New York as Deputy Governor, and that the thing to do was to
make some temporary arrangement until we could get you back in the
harness for a while on the ground to look it over.

I have a good

many ideas on this whole matter that I would like to express to you
first-hand, and I am also anxious to tell you something of my own
circumstances as they affect the matter, so that you may have no
misunderstanding as to my feelings

in

regard to your proposal, nor

shall think that I am unappreciative of what it offers.

Consequently

I am anxious to talk the matter over face to face, and at the earliest



Benjamin Strong, Jr., Esq., #2.

possible date.

I would not think of asking you to come East from Denver
at all if you had not suggested it in your telegram, and was not the
international political situation such that I am really afraid

to get more than twenty-four hours away from my post, because our
banks here in I:ew England are very well loaned up, and it is quite

/ conceivable that we may have precipitated upon us overnight a demand

for credit such as has never arisen in New England before, and I
have to be within hailing distance.
In case there is any risk involved in your coming to
Chicago, of course you must not consider it, and I will do the best
I can by correspondence at present, until things straighten out

enough for me to go to Denver, but if you can come to Chicago I

will write to our friends the Drake's at the Blackstone, and arrange
for comfortable quarters for you and me to have a conference of a day
or two.

My idea would be to get away next Sunday on the "Century"

and get to Chicago on Monday morning, and then we could stay as
long as was wise.

I am afraid that you will find me a dull companion, as
I am a reformed man, and neither smoke nor do any of the other things
that make life worth while, but we will try to have a good visit
together in spite of it.

I went to New York Friday for a Class

Dinner, and almost died because of my abstemious

habits.

As a matter

of fact it was an almost equally great shock to a good many of my
friends.

There are so many things that I want to talk to you
about in connection with the Federal Reserve Bank

that I think we

shall find our time pretty well occupied, and I hope that it will



i(

Benjamin Strong, Jr., Esq., #3.
CI not seem imprudent, but will seem practicable for you to meet me

as I suggest. It is needless to tell you with what pleasure I
look forward to the possibility of a little visit with you.




With warm regards, I am,

Faithfully yours,

erRED L. AIKEN

FEDERAL RESERVE BANK

GOVERNOR

IRRIMON M. HOWE

AND FEDERAL RESERVE AGENT

OF BOSTON

CASHIER

DIRECTORS
FREDEMCMCURTMS,CHAMMAN
WALTER S. HACKNEY. VICE-CHAIRMAN
AND DEPUTY FEDERAL RESERVE AGENT

ERNEST M. LEAVITT

THOMAS P. BEAL, BOSTON, MASS.
THOMAS W. FARNAM. NEW HAVEN. CONN.
ARTHUR M. HEARD, MANCHESTER, N. H.
CHARLES A. MORSS, BOSTON, MASS.
EDMUND R. MORSE, PROCTOR. VT.
CHARLES G. WASHBURN. WORCESTER, mAss,
ALLEN HOLLIS. CONCORD, N. H.

ASST.CASMER

CHESTER C. BULLEN
ASST. CASHIER

CHARLES A. RUGGLES
MANAGER COLLECTION DEPT

MAR2 7 1911

March 21, 1917.

Benjamin Strng, Jr., Esq.,
4100 Montview Blvd.,
Denver, Colo.
Dear Strong,Thank you

very much

for your letter of the 15th inst.,

and the positive evidence that it gave me of your safe return to
Denver, I hope none the worse for

our

little outing in Chicago.

I hope I made plain to you while we were there, better than I can
do so by writing, my feelings in regard to your proposal to me.
My little visit with you was a very stimulating respite from the
routine of the office here, and I enjoyed every minute of it.
I have just gotten back this morning

from

two

days in

New York, where I attended a meeting of the committee on Federal
Reserve Exchange.

Your office will no doubt report to you the

results, which werejaot entirely satisfactory to me, but were I
think about the best we could do.

I was the only one who was

insistent upon making such exchange payable at a designated bank
and subject to advice, but as I was not a member of the committee,
and had no vote, my expression

of

opinion was not particularly

effective.

I had quite Otalk with Mr. Woodward and Mr. Peabody,

also with Governor Harding, about the New York situation, and
emphasized as much as I could the great desirability of letting
things remain in statu quo until such time as you could get back,
and I think that they were all agreed as to the desirability of it.



o61-uti6,

_4.1111il

I do not know whether you have succeeded in sending the
personal letter which you spoke of to Mr. Delano or not, but I
suspect that you have because of the apparent complete change of the

attitude of the Board toward the Governors, as evidenced by Governor
Harding's attitude at our meeting.

I think that he enjoyed being

there, and we enjoyed having him, and everybody took an active and
strenuous part in the discussion of this Federal Reserve exchange
matter.

He told us that they were anxious to have a meeting of the

Governors before the special session of Congress, and to have a
full discussion of the proposed amendments that they expect to put
in, and I thought his whole attitude bespoke a distinct change of

heart from that which was in evidence when I last talked with him
in Washington, and I know that my impression

as to his friendly

attitude and desire for co-operation was also felt by all the
Governors there, as it was a matter of general comment.
We are going to have our meeting in Washington on
April 4th, and you may be sure that you will be greatly missed,
and that we are all looking forward to the time when you will be
back to preside again.

Things seem to be very quiet indeed, both in New York
and here. The international situation has developed quite fast in
the last few days, and it really looks as if we were going to find
ourselves at war with Germany, and I hope in alliance with England
and France.

I am watching with much interest to see how the

treasury department handles its loans to take care of its financial
needs.

It seems to me inevitable that if we ally ourselves definite.

ly with the allies and begin borrowing heavily that we are going to
see our rates for government loans gradually approximate those abroad,
for after all there will be a common gold base under all these



_,---

,/Strng,

Jr., Esq., #3.

I would therefore like to see a practically simul-

borrowings.

taneous offering of a large government loan with the declaration
on the part of Congress that we are at war with Germany, and for

a large amount, say a billion dollars, and I should not be greatly
surprised if in the first flush of excitement and patriotic enthusi-

asm a loan of this size could be placed on a 3% basis by popular
subscription.

lain a little fearful that if the borrowings are made

piecemeal, in a comparatively short time the government will be
confronted with very much higher rate for such loans, and the
temptation to draw upon the resources of the Federal Reserve Banks
will be almost irresistible.

No one in Washington seems to have any definite idea
as to what the Secretary contemplates in the way of financing.
I am much interested in what you wrote about Montague
Norman's letter to you, in regard to the proposed trip to London.

I think you want to be sure that you are not hasty about making
plans for such an expedition, and that your health is reasonably
assured before you undertake it.

Thank you again for coming to Chicago to meet me.

It

was the greatest sort of pleasure to me, and did me a lot of good.




'Faithfully yours,

March 28, 1917.

Hon. W. P. G. Harding,
Governor, Federal Reserve Board,
Washington, D. C.
Dear Sir,In connection with the issue of 050,000,000.

90 day Treasury bills, in discussion of the matter with the
members of our Executive Committee, it was the feeling of the

members of the Committee that the rate of 2% was lower than
the present market for even such a desirable issue justified.
It is our feeling that had these bills been issued
at

ai%, $50,0,30,000. of them would have been readily absorbed

by the commercial banks of the country, and that in view of
the existing state of affairs in the country it would have been
-better to have had these bills placed in the commercial banks
rather than to have 050 000,000. of the resources of the Federal
Reserve Banks absorbed

even for a period of 90 days.

We feel that it is of the utmost importance that at
the present time the resources of the Reserve Banks should be

available so far as is possible for the benefit of their member
banks, and we should have preferred had the taking of this issue
by member banks been burdensome to them to have rediscounted
for them to meet their reouirements, rather than to have taken
the issue direct, and our Committee are in hopes that should
future financing of this sort become necessary that it will be
dealt with in this way, and the loans placed at a rate that
will induce the commercial banks to absorb the issue.



e cannot quite agree with the suggestion that
investment on the part of the Reserve Banks in these notes
demonstrates the Federal Reserve Banks' usefulness as fiscal
agents of the Government.

Such agency functions would have

existed had we placed these notes with our constituent banks
for the Government's account, but it does not seem to us that
it is an agency function for us to invest in them.
In this connection I would call your attention to
my expression of views on this aspect of Government financing,
in relation to the Federal Reserve Banks, in my letter of
March 24th.

Very truly youIs,

Governor.
ALA /M




FEDERAL RESERVE BANK

CCIFED L. AIKEN
GOVERNOR

FLORRIMON M. HOWE

AND FEDERAL. RESERVE AGENT

OF BOSTON

CASHIER

DIRECTORS
FREDERIC H. CURTISS, CHAIRMAN
WALTER S. HACKNEY. VICE-CHAIRMAN
AND DEPUTY FEDERAL RESERVE AGENT

THOMAS P. BEAL, BOSTON, MASS,
THOMAS W. FARNAM, NEW HAVE, CONN.
ARTHUR M. HEARD. MANCHESTER. N. H.
CHARLES A. MORSS, BOST°, MASS.
EDMUND R. MORSE. PROCTOR, VT.
CHARLES G. WASHBURN, WORCESTER. MASS.
ALLEN HOLLIS, CONCORD, N. H.

ERNEST M. LEAVITT
ASST. CASHIER

CHESTER C. SULLEN
ASST. CASHIER

CHARLES A. RUGGLES
MANAGER COLLECTION DEPT

ppilb

1917

March 30, 1917.

Benjamin Strong, Jr., Esq.,
4100 Montview Boulevard,
Denver, Colo.
Dear Strong,-

I suppose that Mr. Treman has written you about
the attitude of the New York bank in the matter of the purchase of
$50,000,000. Treasury bills, 90 days, 2% interest to follow, direct
from the Treasury.

This proposition developed a feeling of con-

siderable warmth in our Board, and I found some difficulty in
restraining our Board from expressing in a formal and quite savage
way their emotions.

It seemed to me that nothing would be accom-

plished by formal action regarding the matter, but I did write the

Board our feelings in regard to the matter, and enclose herewith a
copy of my letter.

I was interested to see in the papers the Secretary's
comments upon the enthusiastic reception with which thye issue was
received by the Reserve Banks, resulting in aver-subscription of the
issue of bills, and when I also read that a similar issue was
probable the first of July, I promptly called up Mr. Warburg on the
telephone and told him that he could countus out on any repeat
on this operation an the same basis as the first one.

I found Mr.

Warburg entirely sympathetic with our feelings in the matter.
I was rather interested to see the difference in attitude
between the Reserve Bank's in the Middle West and West and those in



71

in Strong, Jr., Esq., ff2.

the northeastern section of the country.

I understand that our

friends in Kansas City and Cleveland could not get to the wire

Quick enough to offer to take amounts considerably in excess of
their pro rata share, which is interesting in view of the fact
that if they get sewed up tight they are going to come down on
New York, Boston and Philadelphia to carry the load.

It is easy

to be full of patriotic enthusiasm if you know that when it
becomes expensive the expense will be borne by somebodyelse.

We are going to have our Conference in Washington
as

on Wednesday of next week, and while the program is notAlong in
the number of items as some we have had, there is a field for
endless discussion along the lines provided.

I am sorry to say

that I have done nothing worth while in the matter of a resort for
the Committee on Reserve Banks as Fiscal Agents of the Government.
I wish that you would contribute some ideas from your fertile
brain in this matter.

I have reams of memoranda both from your

bank and from various officials in Washington, and I have had
several interviews with Mr. Malburn in regard to this whole subject, but I confess that I have not developed any new lines of
activity for the banks.'

The essential thing is the taking over

of the money departments of the subtreasuries, and with the present

temper of the Secretary, and the present facilities of the Reserve
Banks, this seems to be out of the question.

As a preliminary

step to the proper development of the plan by this Committee, there
should be a careful investigation made of the operations of the

money department of the government, and this should be laid out
in clear and comprehensive form, as a basis for the development
of the plan that will ultimately take over this work, but such



an investigation and report involves more time both here and in
Washington in conferences with officials there than I have had
to give to it, or will have to give to it in the immediate future,
so far as I can see.

General conditions here are very quiet, everybody marking
time until Congress takes some action next week.

The people's

ideas as to the activities of this country as a belligerent are so

vague and hazy no one seems to have the slightest idea of what
will develop in the immediate future, and an atmosphere of uncertain-

ty and consequent anxiety is very much in evidence.
I wish it were possible for you to be with us in Washington
next week, as T am sure that it would result in a much more

effective and interesting meeting than we can have under other
circumstances.

I hope that you are making steady progress, and

are none the worse for your kindness in coming on to join me in
Chicago.




6/72,

Ath warm personal regards, believe me to be,
Faithfully yours,

-

L-4.--

9(7

17/

a7

A--1-4-4/6




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4

53 STATE STREET
BOSTON, MASSACHUSETTS

April 9, 1917.

ai4r.

Benjamin Strong, Jr., Esq.a
4100 Montview Blv .
Denver, Colo. APR1 61917

.

.
10.

W4

Dear Strong,-

Thank you very much for your letter of the 4th
Inst., and for the interesting comments from your letter to
Jim Curtis.

I have not time at the present moment to write you

in regard to the general doings of our Conference in Washington.

The most important things were the discussions with the Secretary
of the Treasury in regard to the temporary financing that he is

doing, which I think will result in his giving us a chance to
discuss with him or with the Federal Reserve Board the matter of
the rate at which he should borrow.

He will no doubt be in the

market for $50,000,000. more some time during May.

We had one

or two interesting conferences with him, particularly one on
Friday afternoon, discuseing the prospective ouestion of loans.
I enclose herewith ramorandum that I drew up, which was submitted to the Governors of the banks, and approved by them, and
then submitted to Mr: McAdoo by us as a basis for discussion,

and he asked me if I would elaborate it somewhat and send him
a new copy of it, which I am doing.
I think there is no question but that the country and

the Government expect that the Federal Reserve Banks will be used
as fiscal agents for handling this coming loan, and the reason
that I put in no report for the Committee on Fiscal Agencies was

because of the fact that this idea seemed to be very definitely
established, and it did not seem worth while to discuss other
activities, such as a money department of the banks in their



njamin Strong, Jr., Esq., #2.

relations to the Government at the present time.

Really, the

most difficult question in dealing with this loan is the method

/71/4

of handling the transfers of balances that will result from
the payments on the loan, and this is an aspect of it that is

not thought of at all by the country generally, or by most of
the country bankers, but must be worked out with the greatest
care.

I wish you would comment on the somewhat haphazard
suggestions made bearing on this in my memorandum.
The matter of getting subscriptions and issuing
bonds of course is mechanical, and the publicity of the business
is psychological, but it seems to me that there is a wonderful
opportunity for the Reserve Banks to show their usefulness in

the ultimate payments, and if a plan can be devised by which
we can carry the loan of several billion dollars without any
serious financial disturbance it will be the best advertisement
that the Federal Reserve system could have.

I do not believe that

the Government is going to go Into the market for this money as
soon as some people expect, because there is sure to be a long
discussion in Congreas both as to the bond issue, and as to
taxes to take care of it, though I think that these two matters
will be dealt with as separate measures in order to expedite
the plans for the bond issue.

Income tax returns suggest

I am told that the preliminary
a very much larger revenue from

this source than has been anticipated, and this coupled with
the issues of Treasury bills already made and proposed, will,
I think probably carry the Treasury through into July, and of
course in addition to this the mechanical details of starting such
a bond offering and of organizing a publicity campaign that

must precede it are matters that will have a good deal to do with
issue of the loan.


http://fraser.stlouisfed.org/
the actual
Federal Reserve Bank of St. Louis

_denjamin Strong, Jr., Esq., #3.

Washington was interesting and very serious, but with
no trace of any expressed excitement.

I cannot tell you how

much I wish that you were here on the job to handle this whole
situation, because I know how much you would enjoy it, and I
know how well it would be done, but we are
to seeing you in June.

forward

Doubtless the New York bank keeps you

posted as to the detail of what
I shall not inflict it

all looking

upon you,

is going on,

and consequently

though I will write you later

in regard to specific matters discussed at our Conference.




With warm personal regards, I am,

Faithfully yours,

474

11/1114011ANDUP CONCIIRNING 1302ID ILISURS OF VI% MIT=
STATICS GOYERITIMT Ill CONIMCTION
VAR

Amount.

31,000,000,000 or more without maxinum limit, free frms all
taxes (except inheritance taxes) with privilege of conversion
into subsequent ioue of higher rate bondrs irsoued during the
period of the war or within none specified time. lie would
.11.1gge3t that a provision should ra so be riacie for the convertiom of United States 30-year 3% Conversion Bonds aoquired
by the Federal lionerve Banks under the provisions of !.:,ection
3.8 of the :ederal Eeserve. Act. TM o seem only fair to the
purchaser's of such bonds. The new issue of bonds should not
be avail abl e for circulati on privil egos.

Rate should be EU fficiently high to insure the
,sorption of the issue by ultimate investers, DO that the
i'undo of the banking, institutions should not be absorbed..
Zi% minimum.

Price.

Par and accrued interest.

Terms.

Redf.homable at par and interest five yearn from date of

issue; to be retired annually thereafter at the rate of five
per cent of the total loan per year - retiring the whole
issue in twenty-five yearn. Bonds to be drawn by lot for
retirement; provision to be made by taxation for the payment
of bowie so retired.
Kr
Denomi-

I

nation. Coupon or registered, 13100" $500., $1000.
Regietered only in excess of 411000.

Subscription..
To be handled by Federal reserve banks as fiscal agents of




the government; subscriptions to be received 'by all nations,
banks, state hanks, trust companies, caving ri banks and designated

privete bankers and post officers, acting for the account
of the 2ederal Reserve Bank of the district in which such
subooription agencies are located. Methods of publicity
to be worked out. de woule eugvest that a publicity
campaign 'should be ntarted at once, and that a committee
of fireteclase publicity men be assembled who shall be
aeeigned to the work of handling the whole question of ma-

terial and distribution. The actual expenses to be paid by
the government. We feel that this i a question of the utmirot
importance, and should be developed an fast and to an wide
an extent as nessible.
Method of
payment. As the full proceeds of the inane will not be needed

at

once it is proposed to isaue to et becribern:
For amounte of $1000. or less in negotiable
reacipto or bondn, the full meonnt of their
Bub scriptions.

For subscriber or mounts in excesn of
41000. negotiable reeeipte oalling for
quarterly paymentn, date of such peyments
to correepond with intereet date of ouch
bonds, reeeipte to onrry interest on the
payments on merle, finnl delivery of bonds
to be made on delivery of fullepaid receipts.
Interim neede of the government between payment to be
financed, by iseue of short time Tretteury bills.
Di opo

ti on

of proceedo

of eubecriptione. In order that there may be ao little disturbance as




oesible of the money market at the time of pfkra ...1.1t of

aubmeription, it is ennential that so far au poseible
paynente be left on deposit in inntitotions receiving
mibscriptione. It in suggested that legisletion be
obtained authorizing the Federel Reeerve Banks for the
purpose of aceieting ow% financing, to maintain baloncea
in member banks to an oriount not tO 4,'XOCCICI the capital

of such member bank, or perhaps it would be more conni stent

with various sections of the Federal Xteeerve Act to limit
such depneit balance V51 cf the eapital and wurplus
of eember banks.

-41111111111/1




Such a credit to the Treasurer of the United
States upon the books of the Federal Reserve Banke will
seriously affect the reserve situation of the Federal
Reserve Banks and exemption from reserve requirements applicable to Government special detosito dhould be made.

Failing such a provision, the servo position of the
Federal Reeerve Banks will be seriously affected, a
matter that should have most ooriounconsideration because

of its relations to the commercial interests of the
country.

It is suggested that the cervices of the Federal Advisory
Council should be availed of to "set am definite information
possible as to the local conditions in the different
sections of the country represented by the Federal Reserve
janks, and probably the opinion* of the members of the
Advisory Council would accurately reflect such conditions
both as to the general public c attitude, and more
ont
ally the effeot upon the money situation in each dic'crict.

GOMENTS
FiDF.RAL
PINANGING.

sUGGESTIONS OP TM GOVNBNOR3 OP THE
BANKS IN REGARD TO GOURNAnT

***** 04100414.11**.p.

Amount.

The suggeetion of no maximum limit of the amount of the

issue would eliminate the factor of straw bids, an If
there was no maximum limit the bonds would not sell at
a premium, and no profit oould be derived by the sale
of accepted bid upon which no payment had been made.
it might also be possible for the Government to receive

the full benefit of all the patriotic intereet nnd
enthusiasm created by the publicity campaign. If I
am not mistaken this practice has prevailed in both
England aid rranoe in connection with their war loans

and it has prored eatiefactory.
Rate.




I belteve that a rate of 3,?.4 would float a loan of
'probably up to apLroximately 02,000,000,000. Hy opinion

is based an interviews that I have had with partners
in large distributing houses here and In flew York during
the last month, as well se on my mn judgment. While I
had not oontemplated a loan exceeding in amount

10,000,000,000 I feel that to insure subscriptions in
C7C0C8 of this nnount we would require a rate of 4%,
though I have no supporting opinion of experts as to the
latter auggestion. The eesential thing SOOMB to me to
be a rate that is high enough to insure immeVate and
overwhelming success of the issue, both because of its
effect on our feelings at home, and Ito impresslons abroad
both with our allies and with our enemies. I feel that
It would be a mistake to make a rate so low that the
bonds would not be readily absorbed by the investing
public, and aouceouently would be lodged in the banks,

ind that the impression might arise that the patriotic
impulses of the Feorae are being traded upon unduly.
I should count an additional 1/2 of 1% in rate r, not

undue price to be paid for the inin'ance of the success
of the loan.
mmunii/ Price.

Terms.




Par and aocrued taterest. It ceeme to me that in a loan
the size of the proposed loan it would be imposnible to
haedle competitive bids at a price not less than par,
and the difficulties of ellotment would be almost
insuperable. Tia my informal talk with representative
bond houses during the course of the last month, Falax
this has always been a subject of discussion, and the
feeling has been uniform as to this basis of sale and
that it would be dentrable that there be no maximum
limit set on the loan. This has been the uniform
practice 30 far as I 7/31ow in connection with such
bane abroad.
The redemption feature suggested would be useful to
the government in ease the mo4e7 market at the end of

five years made it desirable to refUnd the issue. I
1nlaid a very general feeling among the
find in
public that so far as in practicable taxes should be
levied to pay the expense of the war during the
current generation. Upon this is based the reoommendation that bonds be retired in twenty voila installments, the money to be used for such retirement to
be raised by taxation. I personally am in favor of
a large direct tax to accomplish this end. A reduotion of the exemption from income taxes to the

level at which such taxes will be profitable to the
government, and heavy taxes upon 1u7uries such as

alcoholic liquors, cigars, cigarettes, motor vehicles
other than those used for commercial purposes, gasoline,
and ouch stamp taxes an could be practically and
profitably established.




The suggeotion that small subeoriptions be paid in

in full an the first payment Is in order, that what
one might cal/ the small change of the loan might
be cleared up and gotten out of the way. It seeme

to me that a quarterly dietribution of payments of
the larger subsoriptions would probably fit into
the financial needs of the government 'Wren eonstdered
in connection with Issues of short time Treasury
bills between euarterly payments,.
As to the disposition of the proceeds of
the subeeriptioso, I should like to see the deposit
of the proceeds for the account of the Federal
Reserve 3anke limited to deposit in member banks
with the proviso that such deposit would be made In
state banks and truet companies that had applied
for membership in the Polders' Reserve system, the
deposits to be maintained pending the approval or
disapproval of their applioation, and to be ooa-

tinued if the application was approved, and withdrawn if the application was rejected. It seems to
ma that this plan, while it provides faollities that
will cause the erne/leet possible disturbasce to the
,oaey market also provides en opportunity at once
1a solidify and. unify the Federal Reserve syetem,
Jad to do It not by coercive measures or by the
Aavytng of taxes, but by an appeal to both the

patriotism and financial interests of the non-member
banks, for no state bank or trast company of any
impertanoe would be will
to have it known that
this depoeit was withheld from them because of their
unwillingeesa to join the Adorel heserve n;paitom.




The effect of this arrangemetit au the deposits
and the consequent reserve position of the 1Pederel
Eoser7e llanks and their availability for the earneroial needs of their districts Is fto groat that
careful study should be given to the matter, end I
would suggest that the opinion of tIe members of
the Federal Advisory Counoil representing both the
Federal lieserre ?anks, the important member brinks,

and indirectly the commerolal interests of thl,
country would be moat valuable In this connection.
would eageest that deposits with member
banks be penured by collateral approved by the
Federal Reserve Bank of the di3trict in vhich the

depositary is located; such collateral should
ceelsist of bonds or commercial paper eligible for
rediscount except as to time of maturity which
for thia purpose might be ewtended to sly months.

ALFRED L. AIKEN
40 ELM STREET
WORCESTER. MASSACHUSETTS

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FEDERAL RESERVE BANK

'RED L. AIKEN
GOVERNOR
F

RRIMON M. HOWE

AND FEDERAL RESERVE AGENT

OF BOSTON

CASHIER

ERNEST M. LEAVITT

ilOWOONliWPW'

DIRECTORS
FREDERIC H. CURTISS, CHAIRMAN
ANDREW J. PETERS. VICE-CHAIRMAN
AND DEPUTY FEDERAL RESERVE AGENT

,

THOMAS P. BEAL, BOSTON. MASS.
THOMAS W. FARNAM. NEW HAVEN. CONN.
ARTHUR M. HEARD, MANCHESTER. N. H.
CHARLES A. MORSS. BOSTON. MASS
EDMUND R. MORSE. PROCTORVI.
CHARLES G. WASHBURN,WORCESTER, MASS,
ALLEN HOLLIS. COHDORD. N. H.

ASSISTANT CASHIER

CHESTER C. SULLEN
ASSISTANT CASHIER

CHARLES A. RUGGLES
MANAGER COLLECTION DEPT.

May 10, 1917.
Benjamin Strong,

RE.00IVED-

Jr.,,,

----Governor,
Federal

MAY

Reserve Bank,
New York,N.Y,
Dear Strong,-

rr

1917

t
=.2

I feel most apologetic because of my hurrie

411,L

A.
Pew

departure of Tuesday afternoon without saying "Good-b$6411
you were busy and I was in a hurry and I felt sure
understand.

Mortara*
SERVEbut

I want to express to you once more what I did by

telephone, that I think your,.. coming East and getting into the

present situation has inspired all the Reserve Banks with new
confidence and I only hope that the trip has not been too great a
tax on your strength.
I will

develops

kbep you posted of anything new that

here,and hope by the time that you get back in the

summer that the worst/ of our Present troubles will be behind us
and our bond organizlttions all running smoothly.

I am sure that

A

you know without my :telling you how much I hope that the added
stay in the West will complete your cure.

Wit4 cordial best wishes, believe me to be,
Faithfully yours,

AL

F




Governor.

OF BOSTON
ALFRED L._ AIKEN

s/-. /f/7

GOVERNOR

c

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CP,,,/

/

ED L. AIKEN

FEDERAL RESERVE BANK

GOVERNOR

F

ZRIMON M. HOWE

AND FEDERAL RESERVE AGENT

OF BOSTON

CASHIER

ERNEST M. LEAVITT

DIRECTORS
FREDERIC H. CURTISS, CHAIRMAN
ANDREW J. PETERS. VICE-CHAIRMAN
AND DEPUTY FEDERAL RESERVE AGENT

ASSISTANT CASHIER

THOMAS P. BEAL, BOSTON. MASS.
THOMAS W. FARNAM, NEW HAVEN. CONN.
ARTHUR M. HEARD, MANCHESTER, N H
CHARLES A. MORSS, BOSTON. MASS.
EDMUND R. MORSE, PROCTOR. VT.
CHARLES G. WASHBURN. WORCESTER
ASS
ALLEN HOLLIS, CONCORD. N. H.

CHESTER C SULLEN
ASSISTANT CASHIER

WILLIAM WILLETT
ASSISTANT CASHIER

HARRY A. SAUNDERS
ASSISTANT CASHIER

fr;

September 17, 1917.

14/171

3o '1l

,,enj amin Strong

Reserve Bank,
__Gov
mrw,,mrew York, New York.

PERSONAL
Dear Strong:

Thank you very much for your letter in regard
to the personal matter about which we talked at breakfast.

I have just about come to the conclusion to

stick here, although in my case patriotism comes pretty

high, to the extent of probably about 035,000 a year.
I shall not make up my mind definitely until I have an
opportunity to speak to one of my intimate friends on our
Board of Directors, but I think probably I ought to see
this job through.
Thanks 'very much for your frankness.

I shall

be sorry if you did not feel that you could always write
in that way.

Faithfully yours,

AL/VD




\

/
RED L. AIKEN
GOVERNOR

ORRIMON M. HOWE
CASHIER

DIRECTORS

FEDERAL RESERVE BANK

FREDERIC H. CURTISS. CHAIRMAN
AND FEDERAL RESERVE AGENT

OF BOSTON

ANDREW J. PETERS, VICE-CHAIRMAN
AND DEPUTY FEDERAL RESERVE AGENT

ERNEST M. LEAVITT

THOMAS P. BEAL, BOSTON. MASS.
THOMAS W. FARNAM. NEW HAVEN. CONN.
ARTHUR M. HEARD. MANCHESTER. N. H.
CHARLES A. MORSS, BOSTON. MASS.
EDMUND R. MORSE, PROCTOR, yr.
CHARLES G. WASHBURN. WORCESTER, MASS.
ALLEN HOLLIS. CONCORD, N. H.

ASSISTANT CASHIER

CHESTER C. SULLEN
ASSISTANT CASHIER

WILLIAM WILLETT
ASSISTANT CASHIER

HARRY A. SAUNDERS
ASSISTANT CASHIER

c

Octiiber 22, 191/.

Benjamin Strong, Jr., Esq.,
President, Federal Reserve
New York, New York.

A.

Bank,

..04*

My dear Governor Strong:

I return herewith letter of Alfred D.44444.1,
ed ;7777/71etter
under date of October 19th, forw
have not had time to
Frankly,
of the 20th inst.
read the letter, but, from glaring it through, see it
dler has said to me many
is a repitition of what Mr. C
times.

Mr. Chandler is a lawyer here, in good standing,
who has interested himself for a long time in municipal
and government financing nd has for a long time been a
very active and aggresspie exponent of serial bond issues,
and I think, had a good/deal to do with the enactment of a
lax in this State requiting issues upon this basis by
Like
both the Commonwealth and our cities and towns.
a good many men whose minds work along one channel, he
cannot see much outside of his own particular hobby,
but his intentions are of the best and he has given a long
I know
and very intelligent study to this question.
Mr. Chandler quite well personally, as he is a neighbor
of mine in the summer, up in the country, and I have
of purpose and a good
perfect confidenee in his sincerity
deal of resp 't for the tremendous amount of work that he
has put in u on this subject.

Very truly yours,

Governo

Enc.




AED L. AIKEN
GOVERNOR
F

FEDERAL RESERVE BANK

RRIMON M. HOWE

DIRECTORS
FREDERIC H. CURTISS. CHAIRMAN
AND FEDERAL RESERVE AGENT

OF BOSTON

CASHIER

ERNEST M. LEAVITT

ANDREW J. PETERS. VICE-CHAIRMAN
AND DEPUTY FEDERAL RESERVE AGENT

ASSISTANT CASHIER

CHESTER C. DULLER
ASSISTANT CASHIER

WILLIAM WILLETT
ASSISTANT CASHIER

HARRY A. SAUNDERS
ASSISTANT CASHIER




Li

Personal

10
1C) 1917

FZDzP41,Rs

BANK

THOMAS P. HEAL, BOSTON. MASS.
THOMAS W. FARRAH. NEW HAVEN. CONN.
ARTHUR M. HEARD, MANCHESTER. N. H.
CHARLES A. MORSS, BOSTON. MASS.
EDMUND R. MORSE. PROCTOR. VT.
CHARLES G. WASHBURN. WORCESTER. MASS
ALLEN HOLLIS, CONCORD. N. H.

Nov. 3,19327.

Dear Strong,Mrs. Mac Lar en has written me that she has
sent me the Year Book of the Metropolitan Club, and adds
a postscript to her letter saying that you would be glad
to propose me for membership.
Thank you ever so much for your kindness,
which simply adds one more to the many obligations under
which I am to you.
I am more sorry that I calk tell y oil that

you hale been laid up since my visit. Do take care of
yourself, and take life as easily as you can, though
I know with your temperament such suggestions are
somewhat futile, but please remember that not only
the Federal Reserve Bank but the whole country needs
your wisdom and ability in these strenuous days, and
in justice to the whole situation you should safeguard
your health in every way that you can.
We shall be very sorry indeed not to have
you at our meeting in Washington next week, but I think
you are wise to sidestep it, and I shall think of you
as having a real rest in some quieter and less harassing
environment.

Faithfully your

9FRED L. AIKEN
GOVERNOR

DIRECTORS

FEDERAL RESERVE BANK

,RRIMON M. HOWE
CASHIER

ERNEST M. LEAVITT

FREDERIC H. CURTISS. CHAIRMAN
AND FEDERAL RESERVE AGENT

OF BOSTON

ANDREW .1. PETERS. VICE-CHAIRMAN
AND DEPUTY FEDERAL RESERVE AGENT
THOMAS P. REAL, BOSTON. MASS.

ASSISTANT CASHIER

THOMAS W. FARNAM. NEW HAVEN. CONN.
ARTHUR M. HEARO, MANCHESTER. N. H.
CHARLES A. MORSS, BOSTON. MASS.
EDMUND R. MORSE, PROCTOR. VT.
CHARLES G. WASHBURN. WORCESTER, MARS.
ALLEN HOLL/S. CONCORD, N. H.

CHESTER C. BULLEN
ASSISTANT CASHIER

WILLIAM WILLETT
ASSISTANT CASHIER

HARRY A. SAUNDERS
ASSISTANT CASHIER

November 1,p, 191T;

Benjamin Strong, Esq.,
The Homestead,
Hot Springs, Va.

AV
kA't;

Dear Strong;

YSV16

,a.1431

41.

I know that you would hare been much gratified
could you have heard the universal expressions of regret
that you were not able to attend our meeting in Washington
last week. As a matter of fact, I doubt if you would
have enjoyed it very much except for the association with
your associates in the Reserve banks, for, while the
meeting was a very pleasant and friendly one, it resulted
in nothing except an interchange of views, with no
definite conclusions.
We had our meetings in the Board
Room with the Board on Thursday morning and afternoon,
and informally Thursday night at the Metropolitan Club
and on Friday afternoon, and had a little meeting of our
own on Friday morning, but as we had no secretary and no
program that had been previously arranged, most of the
talk was futile.
Treman will undoubtedly report to you the
difference of opinion between your bank and myself
in the matter of open market rates for bankers'
acceptances, which I have expressed to you.
Your
bank was confronted with a very heavy debit amounting,
I believe, to about 4100,000,000 in last week's gold
settlement, and the different Reserve banks bought
of you 455,000,000-of bills at your rate.
I telephoned
this over to our bank, where our directors happened to
be in session, and it raised something of a riot, in
yiew of the fact that our banks were losing acceptance
business to New York because of the fact that the New
York Reserve Bank would not buy our bankers' acceptances
except at a hdgher rate than bills of similar quality
made in New York, and with this discrimination against
our bills we were taking 45,000,000 of New York bills at
your rate.
I tried to impress on Treman our full appreciation of all that New York had done in the whole acceptance matter and that we were only too glad to take these bills.
I also told him that I thought either there should be no
discrimination against buying Philadelphia or Boston bills
or else the New York buying rate Should be put up.
Far be it from me to suggest what the New York policy

should be, but I cannot escape the feeling




that




Benjamin Streng, Esq.

a higher buying rate woiild do no harm to the whole
situation.

I feel quite strongly that after the 15th of
November our discount rate should go up somewhat,
including the rate for carrying Liberty Loan loans,
as it seems to me absolutely essential that the loans
created by Liberty Loan bonds should be liquidated as
rapidly as possible, and the most effective measure for
bringing this about is an increase in the carrying
It seems to me, in view of
charge on these loans.
the enormous amount of financing ahead of us, it is
absolutely essential that the Liberty Loan loans be
liquidated as rapidly as possible, and that it Will be
impossible for us to go on simply increasing the pyramid
of credit as these loans succeed one another.

I did not mean to devote this letter to
business, and so I am not going to discuss Reserve bank
I hope that you are having a
matters further with you.
real rest,with good company, and that by Christmas time
you will feel more like your old self again..
Mrs. McLaren was good enough to send me the
Metropolitan Club book, and some time, when you get a
chance, I should be ever so much obliged to you if you
will be willing to propose me for membership and look
I have marked in the book a
after my offences.
number of Men whom I know well, and who, I am sure,
A number of them
would be glad to second my nomination.
are college friends of mine and some simply business
I shall, however, be quite content
acquaintances.
I am sending the book
to leave my fate in your hands.
back to Mrs. McLaren.

I am going to write to you from time to time
keep you advised as to how things seen to be
going from our point of view. Do not bother to answer
the letters or to burden yourself with any unnecessary
correspondence inspired by them.

just to

With warm personal regards and best wishes,
believe me to be
Faithfully yours,

Governor.

'RED L. AIKEN
GOVERNOR
F

%RIMON M. HOWE

FEDERAL RESERVE BANK
OF BOSTON

CASHIER

ERNEST M. LEAVITT

DIRECTORS
FREDERIC H. CURTISS. CHAIRMAN
AND FEDERAL RESERVE AGENT

ANDREW J. PETERS. VICE-CHAIRMAN
AND DEPUTY FEDERAL RESERVE AGENT

ASSISTANT CASHIER

THOMAS P. SEAL. BOSTON. MASS.
THOMAS W. FARNAM. NEW HAVEN. CONN.
ARTHUR M. HEARD, MANCHESTER. N H.
CHARLES A. MORSS. BOSTON. MASs
EDMUND R. MORSE. PROCTOR. VT
CHARLES G. WASHBURN. WORCESTEn, MASS
ALLEN HOLLIS, CONCORD. N. H.

CHESTER C. SULLEN
ASSISTANT CASHIER

WILLIAM WILLETT
ASSISTANT CASHIER

HARRY A. SAUNDERS
ASSISTANT CASHIER

Ae Nov. 16, 1917.
44:
1:94A
77)1,

Benjamin Strong, Jr., Esq.,

,

0

4311

The Homestead,

Hot Springs, Va.

Dear Strong,-

Thank you ever so much for your letter of the
14th inst . I should like to be put up for non-resident
membership in the Metropolitan Club if that is possible,
which I understand is the case because of the remoteness
of Boston from New York. I am more obliged to you than
I can tell you. for your kindness in this connection.
I am glad. to know that you are really getting a
rest, and. hope that you will continue to take the best
of care of yourself, and not overdo in the matter of
golf.
I am going' to try and. get a little vacation
myself before taking up my new job, and I received a
letter from Mother this morning insisting with all the

force of a very energetic old lady of eighty that I
should pack my grip and go to Hot Springs for a vacation

that she prescribes. I should like nothing better in
view of the fact that you are there, but I am sorry to
say that I see no immediate prospect of such a pleasant
experience, though it is possible that Mrs. Aiken and I
may run down there far perhaps a week the last part



of December.

You may rest assured that I am going to keep
in the closest sort of touch with the whole Federal Reserve

situation, and particularly with you personally, because I
am going to repeat what I have already told you, that
my acquaintance with you in the last three years has developed
into what has been to me about the most delightful aril
;P
stimulating friendship that I en49yOirol- sbtould not be
WI I
willing to take any position
l'that 4.-nimaved as
a ny
a necessity the termination of it. I .aof course tremendously
interested in the whole future of the Federal Reserve System
and I told Mr. Warburg when in Washington malt seemed to
meet his sympathetic interest and approval, that I proposed
to be in Washington frequently, to keep closely in touch
with what was happening.

One of these days I want to talk over with you
some things that I would like to see charged in the Federal
Reserve Act, because I believe that they would help to
insure its future. They probably camot be taken up
however until after the war is over, and we begin to get
straightened out again, but I am inclined to think that
I can do quite as effective work along these lines as
president of one of our large banks as if I were governor
of a Federal Reserve Bank.
We had a very satisfactory day yesterday in
dealing with the initial payment on the loan, a rd had only
about $25,000,000. rediscounts, and everything went with
perfect smoothness. Our oath reserves this morning are
56% and 60% reserves on our outstanding notes. We have



gained very heavily at the clearing house today, and undoubtedly
shall have some heavy rediscounts, but I think that our
total loans for these two days will probably not exceed
p40,000,000. or $50,000,000. I am looking forward with interest
to hearing how the -payments went off in your bank.
With very best wishes, and renewed thanks for
your kind offices in my behalf, believe me to be,
Faithfully your s ,




RED L. AIKEN

FEDERAL RESERVE BANK

GOVERNOR

./RRIMON M. HOWE

AND FEDERAL RESERVE AGENT

OF BOSTON

CASHIER

ERNEST M. LEAVITT

I

DIRECTORS
FREDERIC H. CURTISS. CHAIRMAN
ANDREW J. PETERS. VICE-CHAIRHAN

AND DEPUTY FEDERAL RESERVE AGENT

ASSISTANT CASHIER

THOMAS P. BEAL, BOSTON. MASS.
THOMAS W. FARNAM, NEW HAVEN, CONN.
ARTHUR N. HEARD, MANCHESTER, N. N.

CHESTER C. BULLEN
ASSISTANT CASHIER

CHARLES A. MORSS, BOSTON, MA.

WILLIAM WILLETT

EDMUND R. MORSE, PROCTOR, VT.

ASSISTANT CASHIER

CHARLES G. WASHBURN, woRc ..... MARE.
ALLEN HOLLIS, coNcoRO. NIU:

HARRY A. SAUNDERS
ASSISTANT CASHIER

'

Deoemb1344p17.
FZDhkill, PP
Dear Ben,-

I do not know whether it is the traditional
reserve of the New England Yankee that males it impossible
for me to say to you
answer to your
letter of the 7th. Certainly I cannot reduce it to
writing, and must trust to a loosening of my tongue
the next time we meet. It was a lovely letter, and gave
me a very great deal of pleasure, and I want to assure
you that you say nothing in it in regard to our relations
that I cannot sa4to myself many fold. I need not tell
you that the growing intimacy with you has been to me
a help and an inspiration in the work that we have been
engaged in together in the last three years.

all that I would in

I have just been talking with Mrs. MacLaren
over the telephone, inquiring as to your whereabouts,
and she tells me that you are to be in Washington for
the Liberty Loan Conference next week. I expect to go
to

Washington with my successor, Yr.

Charles A. :Morse,

on Wednesday afternoon from New York, and shall be at
the Shoreham Wednesday night, and in Washington all day
Thursday. I have asked the members of the Federal
Reserve Board to lunch with me at the Metropolitan
Club on Thursday at 1 o'clock to meet Mr. Mbrss, and
it would be a great pleasure to both Mr. Mores and
me if you could join us at luncheon on that day. Will
you be good enough to wire me
me know whether
or not it is possible for you to be with us.

letting

I am ever so much obliged to you for your
kind offices in the matter of the Metropolitan Club,
and I enclose obituary notice which gives a summary
of all the commonplaces in my experience.
Hoping to surely see you in Washington on
Thursday, I an,
Faithfully yours

Benjamin




Strong, Jr., Esq.,
New York,
N. Y.

h

A.

RED L. AIKEN
GOVERNOR

FEDERAL RESERVE BANK

.,RRIMON M. HOWE

OF BOSTON

CASHIER

ERNEST M. LEAVITT

DIRECTORS
FREDERIC H. CURTISS, CHAIRMAN
AND FEDERAL RESERVE AGENT

ANDREW .1. PETERS. VICE-CHAIRMAN
AND DEPUTY FEDERAL RESERVE AGENT

THOMAS P. DEAL, BOSTON. MASS.
THOMAS W. FARNAM. NEW HAVEN. CONN.
ARTHUR M. HEARD, MANCHESTER. N. N.
CHARLES A. MORSS, BOSTON, MASS.
EDMUND R. MORSE, PROCTOR. VT.

ASSISTANT CASHIER

CHESTER C. BULLEN
ASSISTANTCASWER

WILLIAM WILLETT
ASSISTANT CASHIER

CHARES G. WASHBURN. woRcEirraN. NABS.
ALLEN HOLLIS, coNcoRo.

HARRY A. SAUNDERS
ASSISTANT CASHIER

Dezt%3ZiNic
Dear Ben,-

I do not know whether it is the traditional
reserve of the New England Yankee that makes it impossible
for me to say to you all that I would in answer to your
letter of the 7th. Certainly I cannot reduce it to
writing, and must trust to a loosening of my tongue
the next, time we meet.
It was a lovely letter, and gave
me a very great deal of pleasure, and I want to assure
you that you say nothing in it in regard to our relations
that I cannot sa4to myself many fold. I need not tell
you that the growing intimacy with you has been to me
a help and an inspiration in the work that we have been
engaged in together in the last three years.
I have just been talking with Mrs. McLaren
over the telephone, inquiring as to your whereabouts,
and she tells me that you are to be in Washington for
the Liberty Loan Conference next week. I expect to go
to Washington with my successor, Mr. Charles A. Morss,
on Wednesday afternoon from New York, and shall be at
the Shoreham Wednesday night, and in Washington all day
Thursday. I have asked the members of the Federal
Reserve Board to lunch with me at the Metropolitan
Club on Thursday at 1 o'clock to meet Mr. Morss, and
it would be a great pleasure to both Mr. Morss and
me if you could join US at luncheon on that day. Will
you be good enough to wire me letting me know whether
or not it is possible for you to be with us.

am ever so much obliged to you for your
kind offices in the matter of the Metropolitan Club,
and I enclose obituary notice which gives a summary
of all the commonplaces in my experience.
Hoping to surely see you in Washington on
Thursday, I al,
Faithfully yours

C7D
Strong, Jr., Esq.,

Benjamin
New York,
N. Y.




Alfred L. Aiken.

Born Norwich, Conn. July 6, 1870
Graduated Yale 1891
Connected with State Mutual Life Assurance
Company, Worcester, until July 1, 1894
Assistant Manager New England Department
New York Life Ins. 'Coo until October 1, 1899

Assistant Cashier National Hide & Leather
Bank, Boston, until January 1, 1901

Assistant Cashier State National
Boston, until July 1, 1904

Bank,

Treasurer Worcester County Institution for
Savings, Worcester, until January 1, 1908
President of same, until Jan. 1, 1913
President Worcester National Bank, Worcester,
Jan. 1, 1913 to Nov. 15, 1914
Governor Federal Reserve Bank of Boston since that time.

Have been elected President of the National Shawmut Bank
of Boston to take effect January 1, 1918.
Have been a director in a number of banks and
business corporations, all of which I gave up
when taking the position of Governor of the
Federal Reserve Bank.

Member of Union Club of Boston
Worcester Club of Worcester
Graduates' Club, New Haven
Yale Club of New York
Metropolitan Club, Washington, D. C.
besides numerous country clubs.

My most interesting

outside activity is my trusteeship of the Worcester Art

museum, an institution of very high standing in its
In college was a member of D.K.E.




ccel

line.

THE NATIONAL SHAWMUT BANK
CAPITAL, SURPLUS AND PROFITS

418.500, 000
At

BOSTON
ALFRED L. AIKEN

2

PRESIDENT




January 21, 1918.

Dear Ben -

Thank you very much for your letter of the 18thwinstant and for the list of men that you sent me to whom
I am writing today.
1

I am much interested in what you write as to the
question of priority of securities issues and shall try to
get to New York in the course of the next ten days or two
weeks to see you and talk this whole matter over. Frankly,
I am somewhat anxious about the immediate financial plans
of the Government and would like to get more information
from you than I can obtain here.
I understand from Mr. Morss that the Government
expects to issue certificates of indebtedness to the extent
of about $300,000,000 a week; that our share of this in New
England will be about ten per cent, which means about thirty
millions a week for our banks, pro-rating this amount among our
commercial banks on the basis of resources. Our share here
would be about 0,000,000 a week. Speaking for ourselves,
and I know that the position of some of the other large banks
here is the same, we would have to practically pass the zihole
of this burden back to the Federal Reserve Bank as we are all
loaned up here very closely.

We have had extraordinary demands from our cotton
mills, most of which are engaged to a large extent on Government work, and from our wool dealers and woolen manufacturers, with the result that in all of our banks our commercial
loan is at a very much higher point than it is normally at
this time.
I fully appreciate the fact that whatever the Government necessities are, they must be met and, of course, we
are only too glad to do our share, but I want to get a little
more definite information thcn I have at present as to what
the Government's necessities are really going to be and I

THE NATIONAL SHAWMUT BANK OF BOSTON.

know of no such satisfactory source of information as
yourself.
I hope that the cold has disappeared before
this and that you are feeling much better than when I
was last in New York.
With warm personal regards, and looking forward to seeing you in the near future, I am

Faithfully yours,

Hon. Benjamin Strong,
Care Federal Reserve Bank,
New York City.







40 WATER STREET
BOSTON

June 24, 1918.

him the atmosphere of the whole
Commencement.

Thanking you once more for
Dear Be

your letter and with warm personal
Thank you very much for your

regards, I am

kind letter of the 21st.
Faithfully yours,

I imagine

that my experience at New Haven was
akin to yours at Princeton.

re"

I had a wonderfully interesting
and inspiring day under most impressive conditions.

One of the greatest

pleasures to me was the pleasure that
Hon. Benjamin Strong,
Care Federal Reserve Ban
New York City, New Yor

my Father and Mother, both of whom
were in New Haven, derived from my
degree, not to mention my small son

who, I think, will always carry with

.IN1 71918

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THE NATIONAL SHAWMUT BANK

OF BOSTON

CAPITAL, SURPLUS AND PROFITS $ 1 9,5 0 0, 0 0 0

BOSTON
ALFRED L. AIKEN

DEPT.

PRESIDENT




P(91Ye !he 9
FEDERAL

RESERVE

1919.
BANli

Hon. Benjamin Strong,
Care Federal Reserve Bank,
New York City, New York.

Dear Ben:

As you doubtless know, our Federal Reserve
Bank here raised their discount rates yesterday a step which meets with my hearty approval with one
exception, namely, a preferential rate of 4-1/4 per
cent on notes secured entirely by certificates of
indebtedness bearing a 4-1/4 per cent rate.
There is a plain inference from this that
Leffingwell proposes to put out his coming issue
at this rate and depends on the artificial stimulus of a preferential rate at the Reserve Bank to
get it across.

I do not believe that this is spund and I
wish some influence could be brought to bear on Leffingwell to meet what seems to me plainly the market for even such good loans as our Treasury bills,
which I feel to be 4-1/2 per cent.
I understand that in Washington they feel
very strongly that there is going to be a very great
recession in business soon after the first of the
year and money is to be a drug. We cannot see that
here although I recognize the fact that things are
gradually slowing down, and fortunately so, but
whether the assumption is correct or not, it seems
to me that with rates as they are and with the Federal Reserve Banks putting up their rates to restrain
the situation, it is hardly the time within the next




THE NATIONAL SHAWMUT BANK OF BOSTON

Hon.Benj.Strong-2.

11-4-1919.

few week d for the Treasury Department to come out
with a 4-1/4 per cent issue and insure it by this
low preferential rate Which seems to me out of step
with the general money situation.

I am not at all sure that you will be sympathetic with my viewpoint in this matter, but if
you are I hope that you can influence Leffingwell
to see the light as we see it.

With kind regards, believe me to be,

Faithfully yours,

ALA:R

THE NATIONAL SHAWMUT BANK
DAPITAL. SURPLUS AND PROFITS

OF BOSTON

19. 5 0 0, 0 0 0

BC S TO N
ALFR ED L. AIKEN
PRESIDENT




November 7, 1919.

Dear Ben Thank you very much for your good letter
of the 6th.

I expect to be in New York on WOdnes-

day and shall certainly find time to drop i
you.

to see

I had been planning to see if you co id not

arrange to dine with me Tuesday night, bu /my small
boy told me this morning that Tuesday was/a holiday
and that he had plans for some joint operations that

would necessitate my taking the sleeper to New York
that night as he did not propose to hav
any of the day on the train.

In view f this, I

must postpone the anticipated pleasur
date but shall certainly hope to see

Very sincerely your/,

To Hon. Benjamin Strong,
Care Federal Reserve Bank,
New York City, New York.

me spend

until a later
ou next week.




40 WATER STREET
BOSTON

November 8, 1919.

Dear

Ben Confirmiir OUT

telephone con-

versation this morning,

I

am look-

ing forward to breakfasting with

you on Wednesday morning at eight
o'clock at which time we cpn take
up the Farnam matter.
I hope that I am not impos-

ing on your hospitality but in
view of your engagements on Wed-

nesday and of my own, and my very
short stay in New York, it seems

a

to me that this is the simplest
solution

the

matte(01224

Looking forward to seeing you,
believe me to be,

Very sincerely yours,

To -

Hon. Benjamin Strong,
Care Federal Reserve Bank,
New York City, New York.




Ponm(11.

No.

ANGLO - AMERICAN

DIRECT UNITED STATES

Via Western

w wr

RECEIVED AT 22, GREAT WINCHESTER STREET, LONDON,

E.C.2.

DEC

24

42

A 5021/24 BOSTON 11
BEltAMIN STEONC CARE MORGAN LONDON
BESTWISHES FORMERRY XMAS AND=HAFPY NEWYEAR

AIKEN

DATED 24


No inquiry respecting


this Message can be attended to without the production of this paper.

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Telephone

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Mark Lane, E.G.
Royal Exchange, E.C.
Donington House, Norfolk Stre-,t, W.C.
48, Tooley Street, S.E.
Also Regent 3073.

London Wall
800

..

Telephone Non.

LIVERPOOL: C ,I. & 5, Exchange Buildings (corner C en.tralB2274
of Chapel Street and Rumford Street) (Private
Exchranchanon)
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BRADFORD: 10. Forster Square ...
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400
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City 1455
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{ Central 1174
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YP

PP

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City 3717
Hop 5275

General Offices . WESTERN UNION HOUSE, 22, GREAT WINCHESTER STREET, LONDON, E. C. 2.
TELEPHONE No.: LONDON WALL 800 (Private Branch Exchange).

PRINCIPAL CONTINENTAL OFFICES AND AGENCIESAMSTERDAM:
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Via San Lorenzo 11-14
118, Boulevard
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Juan de Mena 15

GENOA:
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MARSEILLES:
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5a, Rue Beauvau
Via Marina Nuova 14/19
1, Rue Auber
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THE

NATIONAL SHAWM UT BANK
OF BOSTON
CAPITAL, SURPLUS AND PROFITS

ALFRED L. AI KE N
PRESIDENT




22.500,000

ACKNOWLEDOEE

BOSTON

OCT 211921

October eighteen.

Dear Ben -

Sometime ago, in corresponding with
rancher, we developed the idea that it would be
pleasant if it could be arranged to have a meeting, perhaps in New York, of the original governors of the heserve banks - having dinner together
and having a chance to talk things over.
I know how busy you are but venture to
submit such a suggestion. Some of us who have
wandered from the fold of the elect would welcome
such a meeting with a great deal of pleasure and
I wish you would let me know if
satisfaction.
you think such a scheme is practicable.
I would also like to remind you of your
generous suggestion that you would send me a copy
of the report of the hearings before the Congressional Committee at which you appeared on behalf
I am very anxious to have
of the heserve banks.
this and shall appreciate it if you send me a copy
when it is ready for distribution.
faithfully yours,

To Hon. Benjamin Strong
Care Pederal Reserve Bank
New York, New York.




3HT

TU WAR JAHOITAII
1206
0,1

40 WATER STREET

Ci%)

BOSTON

192

November seventeen.

Dear Ben I am terribly disappointed to find that I am going
to lose an opportunity to dine
with you at Andrew Peters' on Saturday night, but another engagement makes it impossible for me
to be on hand.

I assume that you
are coming over for the game and
will be here all day Saturday. If
that is so, can't you find time
enough to come in for a few minutes in the morning to see me? I
shall be in the bank until about
quarter before twelve and should
like very much indeed to have a
chance to have a few minutes' talk
with you.
With renewed regrets
that I am not to dine with you and
with warm personal regards, I am,
Pai hfully yours,
To Hon.

New



BenjamiStron
York, New York.

40 WATER STREET
BOSTON

4

()"'l

April twenty-five.

Dear Ben Governor Morss has been
kind enough to ask me to dine with
you at his house tomorrow, Wednesday evening, but unfortunately I
find that it will be impossible for
me to get back from New York in time
to do so.
I tried to arrange my plans
to come over on the one o'clock train
with you but cannot manage it very
well.

Would it not be possible
for you Thursday afternoon to motor
up to Worcester with me and spend
the night with us? I could have my
car come into town and pick us up at
any time that would suit your convenience and nothing would please I:rs.
Aiken and me more than to have you
with us for dinner and overnight and
as much longer as you can stay.




Do not bother to answer
this as I shall see you undoubtedly for a few moments on Thursday.
I am greatly disappointed
that I cannot dine with you at the
Morssl.
Faithfully yours

To -

Hon. Benjamin Strong
Federal Reserve Bank
New York, New York.




THE

NATIONAL SHAWMUT BANK

NOV 22

OF BOSTON
ALFRED L . AIKEN
PRESIDENT




November 21, 1922.

Dear Ben -

I am looking forward with a great deal
of pleasure to meeting you at luncheon in Cambridge
a week from to-day at the Colonial Club, and I am
writing to ask if it will not be possible for you
to come over by way of Worcester, spending the night
with me on Monday night, the 27th. You could come
over on the Boston train via Springfield, leaving
New York at 12:00, which would land you in Worcester
at 5:00, giving you time for dinner and the night
with me.
It is so long since I have really had a
chance to sit down with you that I would welcome
such an opportunity and I hope that it will be possible for you to arrange it.
You could come in to town in the morning
at any hour suiting your convenience, getting here
in time to meet any early engagements.
Hoping that we may have the pleasure of
seeing you, and looking forward at any rate to meeting you at luncheon, believe me to be
thfully yours,

To -

Honorable Benjamin Strong,
Care Federal Reserve Bank,
New York City.

c,

a 4.4




"t

tA40"

A.)
11N

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