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1 7 1914




Dee' ber 16th, 1914.

Mr deep Mr. Mackenzie:

Your very kind Utter of :iovember 27th reached me just as I
was leaving for

ashingfOn to attend the first mooting of the 0ouncil o

Governors of the 12 Federal Beserve 3anks, but I had time to arrange to

sand you a book on the banking system, which I think may prove of some
terest and gill certainly clear un your mind as to a good nany of the
doubtful points in the a.,T)lication or the new banking law.

It is writ

by two very capable men connected with the University of Pannsylvtnia.
am Also going to send you a book just published giving a collc,ction of

dresses and articles by

taturg on the samo subject.

ever, -,ore 17;repared before this net was possd by the Damocrats.

you lot me know if there is any prtioular line of inquiry that you



like as the literature on this subject is enlar3ing daily almost, nzd I
could seed you a:: unlimited supply of material.

lease accept also my hearty thenks for your congratu17.tions
and good wishee.

It really affords ne a ke-n pleasure to recrll the f

that our friendship has existed from the time I was in knickerbockers,

I hope for many yea:e this occasional correspondence of ours will be con


,ino of us in this country have witnessed with admiration an

respect, the masterful way in 4lich your Government his dealt wit:: an

Dec. 15, 1914.

:Seckenzie, Zeq.



economic crisis unparalelled in the history of the world.

7;oe want the bank-

ers of your side to got our point of view, at the same time thst they are naturally considering their onn intereots

end your letter is an assurance


OUT own point of view is appreciated, at least, by some of the thoughtful

Te must not overlook the fact that While the American indebtedness

to :;lurope at the outbreak of the war was enormous, the first effect of the

breakdown of intornatienal exchanges deprived as of the first resources avail-

able to pay these debts, viz:- accumulated exchange in bills snd bank balances
scattered throughout the world.
to offset.


were asked to pay but erre not permitted

This threw us back unon gold pnyment et a time then the exporta-

tion of gold was either accomranied by great risks or prohibitive ereense. Fur

the demand occurred lust prior to our embarking nsn a new banking

system which demanded a conservative use of our store of gold hold in the
banks, and still further, the reaction from the crisis Abroad' was at once
felt through the tendency to hoard gold in this country.

As evidence, hors.

ever, of the moral resronsibility of the American debtor, please bear in mind
that we have shipped this year between $Z25,000,00C and 42:309000,000 of gold

to our foreign creditors, of which over 4125,00090GO was shipped since the
outbreak of the war.

Beyond the amount actually shipped, American bankers

engaged themselves to furnish 445,000,000 on account of the New York City indebtedness and ;4%90,000,000 on :account of the Gold 2und, which it has not been

necessary to ship.

Personally, I look back with groat satisfaction upon these

evidences of our willingness and ability to ay our debts When they became due
aad believe it has enhanced our credit in all parts of the world, and should

particularly do so in bland.

Dec. 15, 1914.

William Illackenzie, Esq.

I noticed references to Lord Leith's sreech in the House of

Lords and only last Saturday road the account of his further loss by
death of his grandson in this war.
such an old gentleman.

It is hard to realize that he is

When I last saw him, he was full of vigor.

Chen you see him again, I hope you will give him my cordial regards and

Vith many good wishes, and expressing the hope farther that
you may continue the great confidence you have always shown in the affairs of this country and in our securities vilich will give a good ac-

count of themselves, I remain, very sincerely,
Your friend,

William Lckonzie, :so.,
22 l'eadowside,


April 12, 1915.

Dear Mr. MacKenzie:
Our old habit of exchanging letters seems to have been abandoned,
and I am vriting now in an effort to revive it.

':;ould it be imposing upon

your Good nature to send me a general letter now and then in rec-ard to conditions?

I will be more than glad to reciprocate, with the u Iderstanding in

both cases, that our correspondence is personal and confidential, if you so desire.

One of my -nglish friends, with whom I keep a desultory correspondence,
recently sent me some very interesting data, in regard to the English position,
and I quote the following from letter I are writing him to-day:
"Tho over - shadowing: development in our financial position is, of
course, the vast increase in our credit power by reason of reserves,
released throurh the operation of the 2ederal Reserve Act and the newly created lending power in the Federal reserve banks. The re-assuring results from this development are:
The arparent dicinclinaton of national banks throughout the country to at once absorb these released reserves b- the creation of new credits, and
Second: The conservative management of the reserve banks and
their willingness to hold their own credit powers in

I an glad to be able to advise you that father and mother are both
v-r7 well indeed.
';.ith kindest regards and very good wishes, I beg to remain,

faithfully yours,

William MacKenzie, Esq.,
% Alliance Trust Company,
Dundee, Scotland.
Federal Reserve Bank of St. Louis

July 1st, 1915,

Dear Mr. Mackenzie:

I wish I could give you a full and quite frank answer to
your letter of June 13th.

It would not be dis

just now, however, and yet, to so warm a friend, it seems a downright

not to write you fully and frankly.

much talk in this country of an unoleasant and critical character
about these matters, and so many people laboring under the mistaken

notion that I occupy a sort of Government nsition, that I am-sure
you will understand my reluctance to .rrite anything that night be con-

strued as showing lack of good judgement.
There is, however, one thing that I think your friends in
London particularly should have in mind, and which I feel perfectly
free to express quite forcibly;

The foreign co

States, in and out, amounts to about .;4,000,000,000 annually,


this amount for the fiscal year ending Juno, 1914, (this year's figures are not yet published), '.'834,000,000 of this trade was with Central

and South America.

/lot only our direct trade with Europe but this

trade with South America is financed very largely in London under com-

mercial letters of credit, under which drafts are dram and discounted
by the London banks and discount houses.

Ny best judgement is that

evcx: available means for establishing credits in this country must be
employed if our exchanges are to be correct,: or continue at anything
like a normal level.
:_merican securities
Federal Reserve Bank of St. Louis

The most effective means will be the return of
,s the volume doubtless is still lar

and the

Jag 1, 1915.




present prices of exchange are beginning to offer some premium to English


The second most effective means and the one thdhh would

be welcomed in this country, is the gradual transfer of some part of the
vast commercial banking heretofore done in London, which can just as well
be done in New York, if :nglish importers would learn to draw dollar drafts
under american lettcrs of credit. and

2 English banks and acceptance

houses wunad take a broad enough view of the home situation to relinquish
some part of this business to the American benkeq it would gradually transfer from the London market to our market, a vast volume of bills which
would be equivalent to a prxmanent loan.
Your answer, naturally, is that this means relinquishing London's
position as the commercial banker for a considerable part of the world's
commerce, but after all, that is one of the penalties of war, and unless
something of that sort is done, I am afraid that our trade with each other
mew languish.

Personally, I do not look upon it as a matter which is open to
much discussion.

If the war continues, this course will likely be forced

upon the English money market anyway, but it would be better to encourage
that form of relief at the present time before the strain becomes a dangerous one, rather than permit a repetition of such a deadlock in exchange
as rose this last August.

At that time, the interruption of the exchanges

VMS due to London's insistent demand for payment, but just as largely to
sentiment and panic.

That situation aas bound to correct itself and

Shortly did; the present situation is quite different.

It is not based

upon sentiment, but upon the development of exchange conditions, Which
will not improve this sentiment but will grow worse as the trade balance

against you




July 1, 1915.

illiam Mackenzie, Esq,

American institutions can and should prepare themselves to
finance the country's export business, and if necess'ry, the import
business, as well.

The :]nglish banks can co-operate by joint ac-

counts and ot-ner arrangements so that the change can be effected

promptly and in an orderly taghion,

I should think the big joint

st,ck banks of London would begin to realize the need of some such
course and enter into arrangements with their American correspondents
to take the business in some way for their joint account.
It in difficult to write a letter 166 this sort without laying

one's self open to the charge of taking a selfish point of view.


answer to that, lot ms sny you have as7c.ed the question of"what can be

done?" and in answer, I think it is fair to say that this is one of the
things that can be cone promptly and effectively and in a very large way.
We are burdened bore just now with a tremendous surplus of creci-

it and our position would be sounder if it wereemployed in that kind of
finance, rather than in exploitatthn.

I n glad to sny the family kern very well indeed.

They are

now away at the beach, and Father despite his infirmities is enjoying

his holiday very =eh indeed,

I am expecting to see him in a Levi days

and will then give him your vary kind message,
Sincerely yours,

7:ackenzie, Esq.,

22 Meadowside,
Dundee, 'cotland,


Personal and Confidentiel.

September 7th, 1915.

7:_y dear :Jr. lisakenzies

Your kind letter of

:ueust 2 /th has just reached me and

with much chagrin I acknowledge having put your letter of eueust 23
aside for a time, and then failed to ackneAedce at* anreer it, as I

should have done a month ago.

Since both your letters were written considerable changes
have taken place.

Te have seen demand sterling drafts sell in flew

York at N.50 to tho pound, and. i think your letter justifies me in
saying frankly that it is no more than I expected on account of the
inexcusable delay in dealing with this exchange matter, which appears
to have characterized the attitude If your bankers, and poe ibly
some of your government officials.

This ie not meant L.s critically

as it sounds, however, for I can well appreciate .at tremendous burdens they have been carrying and that everything cannot be done at
A Gommittoe of bankers and government officials is now re-



to be on its way to New York for the eurpose of discussing

this particular problem of exchange and doubtless the results will
be good.

he magnitude of our expurts to ;3ngland, Franco, Russia

It!Lly and the enormous increase in export balance of the past

-2Sept, 7, 1915,

Mackenzie, Fee..

seven months over a similar period last year, would seem to indicate that all available means of arranging credits in this country must be promptly undertaken and upon such lines as .ill appeal with favor to the emerican bankers anet investors, and at the

same time avoid any justice of the char
tude by this country.

of an eeeeutral atti-

;e are simply producers end fabricators of

goods upon a tremendous scale


present time have special demend.

hich foreign markets at the
Our market is open to the whole

world as h-s unnistakablfr been enunciated by our State Department,

and if our commerce is to continue successfully through the period
of the war, our bankers and investors have got to extend credit. It
ought not to be difficult for ua to get together in arranging Lhese
credits ie the right men are put to the task.
I canaot oretene to express any opinion as to the success
of offering government obligations in this country, but I do know
that very lerge cre'its can be arranged by transferring some part
of the acceptance business to American institutions.

If drafts

covering merchandise exports are drawn in dollars on Ner York and
discounted in this market and if the volume of such drafts can be
sustained at a large amount, say, :7;500,000,000 constantly,

the equivalent of a permanent loan.

it is

Every exchange bankersevith

whom I have discussed the matter, even some of the English bankers
ehe have been in this country recently, agree that this is so, but
the :r objection is the one which you have frequently heard, that it

the loss of prestige by the London market.

Tht argument


To -'.1111am Mackenzie, "sq.

is hardly sound.

Sept, 7, 1915,

In the first place, if the war continues,

London inevitably must lose some part of this om3tige to _Taut

In the second place, credits of the character referred

toapplied to our exeorts are always within the control of the
English banker, because when war conditions are over, he can simply
simply arrange with his customer to c,ncel his :Iew York credit

and reonen it again in sterling.

I vie;; it -s beins7 one of the

noce2,sary sf:.crifices imposed unon one class of citizens by war



government certainly dealt with the London

money market with wonderful courage and notable success last
August and Sentember.

It seems

s though this was the opportm-

nity for the London money market to reciprocate in kind to the

The thing that is needed is courage to antici; ate such

developments as the existing disarrangement of exchanges and that
sometimes take real courage, because if the steps taken are efficacious, there may be no actual demonstration of the necessity
for taking them, and fribeequent criticism ma.,


That is

one reason why i rather criticise 14e, Hartle;,- 'ithere, admirable

little book.

It seems almost as if ho expected too much of hu-

m-n bankers.

Thether it was a question of ability or willing-

ness cannot be demonstrated, but in the emergency, the government
stood between the ban7.:ers and whatever difficulties they feared

and the


astonishing promptness


and ease.



Sept, 7, 1915.

171 ::aCkOrIlLift

Something of that sort should be done in regard to

international exchange and, as stated in my former let',:er,


have no hesitancy in advocating the transfer of ordinsy commercial credits to New York from London for the purpose of fi-


the export trade of this hemisphere.

You will bo interested to learn that mu younger
brother, Arch, who is a physician, has just returned from Serbia
where he anent a couple of months, nrior to that time having been
with the Ferman harjes ambulance hospital in :lontdidier.

only a year older than

hen he left

years older and I think ctn put it down

lie is

, but he looks at least five
his experience.

The family all keep well and father, considering his
conditior, is really wonderful.
;:ith kindest regards and thanking you for your friedd-

ly letters which I appreciate very hairtily, I am,
Sincerely yours,

1:ackonzie, 2sq.,

22 Meadowside,
Dundee, Scotland,



:7() one has n greater reaNact than I have for

the Bank of ngland, but sometimes I think they are a bit hidebound by tradition,
They out to remember that ,11liam and
teary lived a long time ago under conditions vastly different
from the present ones w ieh sometimes move a little faster.

Priv-te and Confidanti4.

'3eptember 14th, 1915.

Mew Ur. Mackenzie:
Your letter of September 3rd just received crosses one

Which I wrote you a few days ace - by this time doubtless in your

Since you wrote, the Committee of which Lord reading is

Chairman, has reached this country and I have hnd the pleasure of
a number of visits with them.

This is one of those situat ens

where a visit of this character by men of aminene such as compose
this Committee, will be a very great advantage both on your side
of the water and on this side.

I think our noole rocognine just

as yours do, that the negotiation of commercial credits in this

country, no matter that form

those credits take, is of mutual ad-

in foreig

It is just as important that we should contin

markets as it is that you should he able to borrow in

these markets to enable you to continue buying.

But we must not

forget that our market, both. for commodities and for credit, are

to-day open to the world and that negotiations of tle character
now land rtaken must be concluded as business transactions and not
an the basis of sympathy.

On the latter p1-n4 we would be IAA

far astray and more harm than good

ould result.




William Mckenzie, Esq,

Sept, 14, 1915.

American papers, I think you will be convinced that the general

attitude of our peoole has been to extend a friendly welcome to
these- gentlemen, to encourage them in their work and, if possi-

ble, to send them home with their errand successfully concluded.
7:ou realize, of course, that in no way, sh-pe or manner

can our government have anything to do with the business.


may be assured, howover, that most, of the thoughtful b: nkors

business men here are thoroughly convinced to-day that at the
presen",; atage of the war, a real crisis 13

to arise in

connection with sane part of our exert trade, unless the English
and Continental exch:%ng2s are restored to something like normal

condition, and I an sure that our people will cooperate heartily
with the representatives of your country and Franco in bringing
this about.
I -:.ould like very much indeed to read the boo:: written

bz, your uncle, Mr. Robert MPeRenzie, if you are able to got a
of it for


-Clad you, also, mind advising me how you and those

occupying similr important positions with respect to American
securities, would now feel about making a contribution, either
by a s...71e or by a loan of American securities in order to af-

ford the government moans of obtaining a larger credit than might
otheraiso be possible?
cordial regards, believe me,
Sincerely yours,

-illiam l'.7.ackonzie, 'sq.,
22 :::eadowside,

Dundee, Scotland.

January 4th, 1915.

Dear `Sr. Uackenzie:

Your kind letter of December 16th, as well as the History of America which you were good enough to send, have both
reached me, and I hasten to thank you and to send, also, my
warmest good wishes for the New Year.

There is little change in our domestic situation; money
continues abundantly plentiful for all our roquirements, notwithstanding the great activity in almost all lines of business.
There is some chance (though probably 1_ remote one),

that I shall occupy my quota of last year's vacation in making

a very hurri d trip to London, and possibly, to -xis.

If, by

ang chance I should do so, I will send you word in advance, so

that you my if you are willing, in making your rogular trips to
London adjust them a little

with a view to have a meeting there.

You doubtless know that
of mine dOr a number of years.

it Edward Holden has been a friend
I am really very fond of him and

possibly a!Treciate the peculiarities of his temperament and his way
of doing things a little better than some of the merit:3one who have

not had the relations with him for a good many years that I have.
'Te is, as we say, rather "sot in his ways".

Looking back now to


January 11th, 1916.


Dear Ur. 1.1ckenzie:

Your kind letter of December 16th, as well as the History

of America which you were good enough to send, have both reacid
me, and I hasten to thank you and to send, also, ay warmest good
wishes for the 1,Tew Year,

There is little change in our domestic situation;


continues abundantly plentiful for all our reouiroments, notwithstanding the great activity in almost ail lines of business.
I have just concluded arras events to take as my vacation
a very hurrie

trip to London and possibly to 2ris, sailing on the

"Rotterdam" on the first of Februiry.
in London any time be

If by chance, you should be

the 10th and 20th of February, I hope you

.111 certainly let me know at the Rits-Carlton Hotel, or c:Ire of
':organ, :;renfell Pc Co.

As you doubtless know, 'sir Edward Holden has boon a friend

of mine for a number of years.

I have always boon very fond of him

and considered him one of the most active and aggressive of the ":ng-

lia b nkors, notwithstanding his age, and have also possibly appreciated the peculiarities of his temper ament somewhat better than

others on this side, who have not

relations with him.

He is,

as we say, rather "sot in his ways" but after all, in our business



relations, particularly in transactions of the difficult character

*which the Commission had to arrange here, it is just as dell to
overlook personal peculiarities :aid deal with the matter entirely
on its merits.

I think aunderbetter mistake was made ih not getting

While the position of

t few dajs,from your standpoint it

t sell promptly and not hang on the
It was not a case for making a bar-

rrectly sou.lding public opinion.

or the -Jew Year and again thanking

end with much interest, I beg to


December 2nd, 1916.

Dear Mr. Mackenzie:

ur letter of

It was a great pleasure to redeive
November 16th and I heartily wish that we mig

have another

afternoon and evening at the Ritz Hot

bly we will

sooner than you expect.


First, a few words a

ter re-

f pleurisy and was

turhigg from Europe, I hId

Most people


shortly informed thrit I also

not know why they should

conceal troubles of this
and there is n


1 you the facts. =f-


ter a mont'i or so

here to Colorado early in

July, where 1 ape

the mountains and have now

rented a f

engaging myself in the mo-



ccupation of

me I au succeeding and

been her

ear, possibly
a entir

o choke out the bugs.

They tell

ill be as well as ever, but it means at
onger, in banishment.

My secretary has

ime, however, and I am in touch with much

that is going on and am also not allowed to resign from the bank,
at any rate, until it is d finitely known that I cannot return,
which they say just as definitely, is not the case.
he news you send me of Mr. Blackett and Lord F,eadillg

is most interesting and of course the services of so able and
well-known a financier as Yr. Fleming should be of great value
in this ver, difficult situation.

His close connections in this

country should also serve to facilitate his work.


Dec. 2, 1916.

Mr. K. ckenziei

I am not at all surprised at the rates being paid
for government loans, nor surprised at the continued difficulties in handling international trade and the financial situation.

sentiment, fear of the unknown gcvorns to

In finance

urately measured.

the exclusion of known factors that can be

The present conflict is so stupendous that n u rls admit the
impossibility of guaging the results in finan

1 matters and
am not at

borrowings are correspondingly mo
all in agreement with what has b
me by some English bankers,
the government should borr
course, they could borrow cheap




t in doing so, the govern-

then a government faces

whnt may be the n

f fcur, five or six billions

the possibility

d be a serious thing indeed to

s yours d

n overlarge c ass of caoit-ilists whose income° could not

be diii isned by taxat

your letters, that

ment bonds, no matter

reduce the amount


d to

th itu creditor not to

ment enters into a



n of taxes

comes woul

n and impose a corresponding
the huge mass of les- wealthy whose in-

protected against tax burdens.
There are, of course, middle grounds such as m7--ki.g

a limited tax or a tax for a limited period of years or an exemption up to a certain point with super taxes in excess of that
point, etc., etc.

But it seems to me that the principle of




rec. 2, 1916.

Mr. = -ickenzie.

[finking a governmnt bond liable to taxes is the greatest safeguard

of the nation's credit that is possible in the present situation
and on no account should be abandoned.
Canada gets money in New York because it is right at our
door; our people know the weal-L. of the country and possibilities
a have an immense

of its development; it is outside the war area,

trade with Canada, our railroads connect with t


rs; we have the
have been

same monetary unit and the most iniiLa
developed between Canada and American banks.



se, it

moy be s9id that Americans regar

s ohysic'311y, although

not politically, a part of th

wick and I think that

is the enitre explanation.
It is interest

our daughter's attitude,
ther lady, or

for it is the same a

They are all working

might s y family,

and it is a grand t
I have re;;retted not being

w my old acquaintance with Lord Leith.

able to r
see him,

on't you be goo

and expr

my regret th



.then ncxt you

enough to give him my warmest rgards
I did not see him wh,:n abroad!

to be able to send some word

about Jan

He ws in chare of the New Yor!c Assay Office, but

resizned some time ago and I hay, not learned jusi what he is

You doubtless say that he wee nominated as one or the

executors and trustees of Yr. 9owdoir's will and the estate being
a large one, I presume that has given him a good deal to do.



Mr. liackenzie.

Dec. 2, 1916.

re have had endless discussion in this country as to
the possibility of FAirope remaining on a gold basis,

some even

suggetting that gold will be demonetized as a result of the war
and because

England will have been denuded o

This I regard as utterly impossible.

Gold h

of international payment, partly as a result o
tual understaading, but for Other an
which oannot b

gold reserves.

become the money
custom !nd mu-

mportant reasons

avoided or destroyed by legislatio

ties as a metal, its commercia
ty through freedom from corr

to beauty, it

is qualidurabili-

eat value in proportion

to its weight, its distinguish

r and feeling and more im-

portant than all, its

macy ac a precious metal

will, it seems to m

d monetization.

the other hand, i


belligerent nations have

to-day in varying

the gold basis - England lees
the gold we are constantly re-

than the o
cei ving


art- much

iluted for do

banks to

likely to see the worlu's currencies
stic uses, gold concentrated in central
known before and used principally for

balancing international exchanges, than we arc to see any pemanent or even long-continued suspension of gold payment au a result of the war.

!A least, this is the way it impresses me now

although a long-continued war might necessitate changing these


Dec. 2, 1916.

Mr. Lackenzie.

Your problem just now lies between very much larger
borrowings in this country on +he one hInd, and a very considerable curtailment of imports of those articles not required
for war purposes on the other.

Personally, I hope the latter

will not prove necessary for it would be a st

ering misfor-

tune to have the merchants who deal in goods o

er than muniwhile the

tions suffer all the penalties of cur
powder and shell manufacturers are making huge f
This raibling letter
thoughts expressed in your o
of you and that this horrible
brought to a conclusion.
'Uth warms


enzie, Es . ,


i de,

22 :.'ead






f the

better days are ahead
some way or other be








Dec. 8, 1916.

It so happens, as you are doubtless aware, that the

coinage units of most of the South American republics are fusceptible to readjustment into a unit which would be the equivalent of twenty cents gold, American, resulting in the South

Americn coinage consisting in some o

0 franc gold

pieces, in other cases, 20 franc gold pieces

.d in the case

of Argentina, a 25 franc gold piece.

Thin subject in also being studied by
American economists, including

r Krmerer o

who has written some intere
I am rather hop eful

umber of

phs on +he subject, and

that f

proceedure will `,E) taken

which will have the effect of s


coinage of the

whole North and Sou
The nex

important one, would be for

your ovrn govenme

me similar reform of curren-





th America, Canada, Crept

,ld p

irse, many c untries in the Fast,

d ultimately

identical gold standard, the velue of which to our com-

uld really be
this sub



to hnve had


If you would like some lit-

I will be more than glad to get it.

our let"er was written, loans to the Allies seem
a bit of a jolt but I am hoping the situation will

be worked out all right.

We have a great capacity, as you say,

to absorb securities, but our capacity is out of proportion to
our knowledge and experience.
ticularly private investors.

Our people need educating, par-


1!r. Lackenzie.

Dec. 8, 1916.

I am glad to say that my mother and sister are both
very well and I will convey your kind messages by letter.
:d_th warmest regards, believe me,

Faithfully yours,

William Eackenzie, Esq.,
22, Leadowside,
Dundee, Scotland.

December 8th, 1916.

pear Ur. Mackenzie:

Your favor of November 23rd just t

ches me and I

am sorry not to have available all the papers ,oaring on the
subject to which you refer which ar

t my office

in liew York.

1 the South

The situation in re



rly in the Argentine,

coinage is rather complicat

where they have the dual eta

his matter was discuss-

ed at greet length at

commissioners with !Muth
nerrly two years

American republics
ago, and recommen

that an international joint

commission be app

subject and make suggestcommission, of which 'r. re-


star:, of the Treasury, was Cheirmer, end of which my




countries to

The m

visited tYe principel Fouth
a member,

souse this and other subjects of mutucl

gs in Uruguay


Argentina and Chili result-

ed in unanimous recommendations to the respective governments

to adopt a standard of coinage, the unit of which would be a
franc having a gold value equal to 1/20th of our t5 piece.


e that the r wort to which you referred in which the word

"franc" was used originated in the report of this commission.

Denver, Colorado,
April 26, 1917.


Dear ISr. MacLenzie:

,.).f course I realize that the delay in reply to my letters was

entirely due to the pressure of many affairs that I know must be occupying you and I regret also that illness has overtaken you as well.
I am glad to be able to report most excellent progress in my

While the doctors would prefer to have me remain here for a

couple of months longer, matters at home are really becoming pressing
and I have arranged to return to Now York this week for a brief visit;

will likely return here then for a few weeks' golfing and then back
home more or less permanently.

As evidence of progress in my restora-

tion to health, I have put an 27 or 28 pounds' weight since coming Nest
and really feel more vigorous and stronger than at any time during the
past two and a half years.

Incidentally, I have been playing golf

regularly and with considerable success for i find my game is coming
back in good shape.
:4-.hat can I say to convey the satisfaction that I feel in having

this great country of ours standing alongside of Lngland and France in
the fight for democracy and freedom?

It seems to me that the world has

not yet waked up to the true significance of this momentous step.


on your side know our country as well as you do and I am glad to assure
you of the many evidences that i

see on every side of the determination

of this country to pour out millions of its resources in money, materials
and men to bring this great war to a prompt and decisive and successful


April 26, 1917.

opil To - Mr. kacKenzie.


My oldest son has boen having military training for a year and
was mustered into the Federal service about a month ago.

He has been

engaged u2 to now in guard duty, looking after a few hundred interned
German sailors, but today I have a telegram advisin,; that on account of

his eyesight, Which necessitates his wearing glasses, he has been discharged.

It is a sad blow to him for he has been most enthusiastic about

the service and I suppose would have boon among the first to embark for
Europe with an7 expeditionary force.

The chances are I will decide to send

him to France as an ambulance driver for he is determined to do his part
in some branch of the service.

The Commissioners now in Washinton have

made a most delightful and favorable impression.

It .vas so fortunate that

Mr. 3alfour could come, for his great charm of manner, as well as a traditional friendship for this country Which he has always evidenced, has
been and will be a groat asset in connection with our many important

My return to New York is largely to see Lord Cunliffe, with whom
the negotiations Which I inaugurated a year ago in London are now about

I hope to entertain him and introduce him to the New York

bankers next week.
I am sorry indeed not to agree with you, wise sisei that you are,

in your proposal about tax exemption bonds.


ar.. definitely opposed to

creating a preferred class of rich investors who escape taxation by investments in the Government's obligations,but our administration has
not and probably will not heed my urging.



(William Liackenzie, Esq.)
22 Meadowside,



Dundee, Scotland

March 26, 1918.

my dear Mr. Mackenzie:

Many thanks for your kind letter of February 21st, which
I have just received after a short absence in the south.
Since my secretary wrote you on the 8th instant, Ben's
address has been changed and is now:
Prov. Co. "C"., American Mission,
M. T. D., A. E. F.,
Convois Autos, Par. B. C. U.,

The annual report of the Federal Reserve 3ystem has not

yet been published in pamphlet form, but I am instructing our mail
department to put you on the list for a copy.
On the whole, the system has proved to be a great success;

a very necessary instrument for enabling our Government to conduct
its war finance operations, and, possibly, of even greater importance,

a reassurance to the whole country that we have a stable and workable
financial system.

The bank's operations are now of tremendous mag-

nitude and the whole system has resources considerably in excess of


Our gold reserves, including a small amount of

:diver and legal tender notes, now approaches ,;12,000,000,000 and, of

course, this is a great bulwark for the protection of our system.

My health is not so bad but I have to take care of
m;, self.

Hoping that you keep well and with warmest regards, I am,
Sincerely yours,


/2 9

1Wy 10, 1918.

My dear Mr. Mckenzie:
Many thmths for your letter of. Arril 1Rth, -thich I T941 linable to Pcknorfledc-e my=1.14' before this.

Oar llsn has beer a ewleFs ss rrobEhly three and on4lalf
billions of bonds All. be taken, notwithstanding tilat we ara collecting three billions of taxes ,lurin

the acme period.

The number

of subscribers may equal, or even exceed, seventeen million.


country wss swept with a gust of patriotism and enthusiasm that was
more responsible than anything else for mAking this loan such a success.

with -curmest regards. believe me,

Sincerely yours,

lillian Mackenzie, E3Q.,
2L Meaftaside,
Dundee, 3oot1and.


Federal Reserve Bank 2. St. Louis

William Mackenzie,



nilliam .4ckensie, Esq.



id will improve with experience.

Ben has written me of tobacco which he has received from you,

which really was a great boon, as I am prevented by any regulations from sending
him any just now, and sometimes cigarettes are very hard to get.

He is an appreci-

ative boy and will never forget this attention from one of my friends.
Possibly, I have not written you the story of Ben's entrance
He was in a New Jersey militia regiment;

into the army.
April 1917;

went to guard same German


given honorable discharge on account of his eyes.

was mobolized in

an internment camp, and was then
He imisedisnely went to France

and enlisted in the French Army as a private, where he was assigned to the motor
munition transport service;

was ma& a sergeant and sent to the officers' training

Before completing his traininrershing arrived, and he with the other

Aaerican boys were transferred to the American forces, and again his eyesight was
not up to the standard and he was nearly sant home.

By a little insistence he was

able to demonstrate that he Itnuld make a useful member of the force, so they aga_n

made him a sergeant and he was finally

ut in command of a train of munition trucks.

His last letter advises that after an attack of influenza, in which he was laid up
in a hospital for a while,

he nas again been sent to an officers' training school,

and I expect by now he is probably receiving his commission as a second lieutenant.
Ben is a

very earnest and industrious boy, having had experience from the bottom up,

and I am ours he will make a most useful officer.

Unfortunately, he lost all of

his belongings in the early days of the German offensive, and while his letters give
no details, I gather he had a pretty lively time of it.
About my own health, it is better than nt was, but still needs
nursing a bit,


consequence of which I have been away from the office this Sumner

almost constantly preparing for a hard w nter's work.

I cannot expect to get my

health completely back until T am able to quit work for a mnch longer period than
Digitized foris now possible.


William Mackenzie, _eq.


You and I will differ, I fear, about tax free bonds as long as


governments issue bonds.

To my mind, it is not solely the question of money, but

underlying it is a greet social question which is sure to come up ani baffle us in
later years.

Tax free b)nds gives the greatest advantage to the invidival with

the largest income.

There aria a time in Zug/and when &wave of social unrest

and political antagonism developed under the slogan
holding class."

she privileges of

2:e had the same thing in this country.

_ere it conceival:le to

have all t'e security investments of the citizens of the nation in the form of tax
free bonds, those who live by daily labor would in great part be paying the taxes
amp at

which would provide the funds to meet the interact,




orinciaal of

these tax exempt bonds, and that clear of poople would, in fact, be suffering a
financial serfdom.

How much batter, from a social and political standpoint, to

have the bonds fres only of a nominal aax so that the tax exemption is equally enjoyed by rich and poor alike, and the burden of taxation is thereby more equitably

I hope you keep well;

that you and your Company are prospering,

and that you are all a bit happier than seems to have been the case six or eight
montna ago.

v;ry warmest eegards, I am,
Faithfully yours,

Williaa Mackenzie,
The Alliance gust Co., Lt.,
22 Meadowside, Dundee, 'frIgland.


November 22. 1918.

Lear 1,Ir. ;huokenzies

.leply to yours of the 30th ultimo has been delayed by my absence in

I think the enclosed circular describing the tax exemption features of
oar various loaud will throw some light on the question raised by your letter.
The principle of tax exemption whioh has been apalied to these loans by

recent legislation Je, of course, an effort to remeanize the fact that the establishment of a graduated income tax justifies what might be described as a graduated exemption from taxation.

Tao diftioulty in this country of high
aapareut to everyone.

If our Government undertook to most competitive market con-

ditions, it would require the issue of bonds at very high rates, and sound finance
would require that they have a fairly lone naturity in order to avoid too great a
congestion of refunding operations.

If the Government, either by high interest

rates on bond issues, or by permanent contractual tax exemptions, should commit
itself, for periods from ten to thirty years, to the direct payment, or the indirect
payment of such rutee as would compare favorably with other investments, it eould
load us with a stupendous interest obligation on a debt which will probably not be
lees than twenty-four billions of dollars, for many years to come.

The eovernment

has, therefore, issued its bonds at fairly low rates (so far not in exooss of 4 1/14'.
that being the maximum contractual obligation) and then, by act of Congress, it has
given a limited tax exemption, simply for the period of the war and for two years
thereafter, upon a limited holding of bonds.

his will leave Congress free in later

years to continue, discontinue, or increase the amount of the exemption, and the

7m. Lackeazie, 31e.

11/ 22/ 18.

mount upon which exemption is Granted somewhat in accordance with the conditions
WW1 prevail at the time.

As indicating the difficulty of dealing with this matter, you should understand that under our proposes'. Eederal lucerne Tux Bill the holder of a five-year
bond, subject to all income taxes, who has a taxable income of -:12,b00 :could realize

4.94'; net return, whereas an investor with an income of a million dollars and over

would realize but 1.2

Jontrasted with this, the holder of a

bond, *holly ex-

empt from iederal income tax, with an income of .,2,500 would realize the equivalein,

of a yield from his investment of

whereas an investor vith an income of a

million dollars and over would realize from suon bonds the equivalent of an income
of 16.630.

Jn the "hole, however, I think that the broader question, which is a social
and political one, has controlled in deciding whether we should establish a preferre;.

class of 4overnment creditors to mhom the Government gives apeoial benefaction in
time of need.

.loch a policy of exemption would, I think, be unsound and dangerous.

and create difficulties
political unrest.

hinh, in future years, weuld give riae to social and

england experinnood such a situation at one period in her history,

I believe after the Napoleonic.: wars, and it will ho neoeseary for u! to give greater

consideration now than ever before to these social questions beoause of the gnngerous
menace of political disorder with which the whole world Is faced.

he day has arrived when we must scrntinize our methods in these matters
to make sure that they are not too much the product of Bourboniem.

Jur Government

financing has been conducted with great courage, and, as you realize, with groat

We may have to grant further, more generous tax exemptions on oar bond

issue: ;, but if me do I hope it will be for limited periods so that the amounts issued

fay be largely dealt with by taxation if nongres is willin4; to continue a strong tax

suggested, one answer to your questions in regard to tax exemit bonds
might be "..hat would great Britain do to-day had the entire debt of the nation been



,m. Ackenzie,

sued entirely free of income taxes?"


You would, in that event, have disregarded

the most important of all principles govi:rning finance, because you would thereby

abandon, forego, surrender completelF for the benefit of rich people and corporations

the right to tax the great, or in fact, the principal part of their incmes, thereby
throwing the entire burden of taxation either upon the pporer classes, or uron
systems of indirect taxation, the effect of which is such the oamo as the direct
taxation of the ppor.

Pronely, evory influence which I have in these matters will

be brought to bear to protect our flIture yriara against Cho i.:onace of any such
I at

glad to hear that ,.ord leith is well, and hope to same may be said

for your good self.
7hat a glorious thins it is that the -,,rar le over;

that ,-ieri.%.1.4 is "licked"

and that we may hope in the couree of tine to ,set back to peaceful pursuits.
Tith warmest regards, believe me,
Faithfully yours,

illiam Jackenzie,
Managing Dirooter, The Alliance Trust Uompaay, Ltd.,
22 :ileadowside,

Dundee, Scotland.



Lake George, N. Y.,
February 19, 1919.

r. "ackenzie:

I am sorry to hear, by yours of January nrc, that the doctors have
also found it necessary to take you in hand.
to you that you

At any rate,

I can say one thing

ere quite unable to say to me, - and that is that you are old

enough to know better.

i hone that you take care of yourself.

have been under has been hard enough, I know.

As for myself, I seem to get along

fairly 'ell so long as I cen get away at intervals and rest IAD.

I em having another copy of Professor Kemmerer's book mailed to you,
end, in addition, I en sending under generate cover E. copy of the report of the
Committee on 'Tar Finance of the hmerican .:conomic Aesociation, the latter dealing

in some places with the questions referred to in your letter.

Article iV,

"Public Creoit" is y very unfortunate presentation of that subject and I wouldn't
pay too much attention to it.

Bust some of the others are rather interesting.

The nuoetion of the inequity of tax-exempt bonds can be dealt with
(ignoring minor considerations) by discuseina simply two points:

Is tax-exempt bond is incompatible with a graduated progressive

income tax en

ives rise to gee injustices to poor people when funds for rem

paying them,

er a costly war, must be largely raised by indirect taxation, con-

gumption taxes, etc., etc.

This noint I will illustrate by acsuming that a graduated income tax
takes a maximum of ft% of incomes in the cases of individuLls who are prosperous
enough to enjoy incomes as large as a million dollars or more, and J.E. graduated
down to r normal tee of, say,

apnlying to mini .um incomes of



man with an income exceeding :11,000010 would realize in the hitThest bracket (that

rr. Eackenzie



0 is on that pert of his income Which paid the lar est taxes) 4% net on an investments
Vhich prid him, gross 164.

This, of course, is a rough and reedy calculation, and

essum-s e schedule of tnxetion which is not exact.

That man, however, realizes on

a 4% tax -exempt bond just as much at he would realize on a 16:; taxable bond.

other hand, e poor man, who neye no texet, realizes but 4%.

On the

in fact, by the com-

bination of s graduated progressive income tax end en iF8U8 of tax-exempt bonds, the
Government says to the rich man,

on a part of your income I propose to tax you 75%,"

and then, by another legislative act, the Government says, "on En much of your
pronerty as you invest in my bonds, I do not propose to tax you at all."

That is

obviously en inequitable arrengement te between the very rich capitalist or business
men end the poor clerk or wege earner.

Indirect taxation end consumption taxes:

Such taxes, apnlied to the

staples of life, or any taxes that increase the cost of living, such as customs, taxes
on seles or transportation, or public services, etc., etc., are principally paid by
the poor.

Again, eimnly by ray of illustration, if the effect of indirect taxation

should be to raise the cost of bread by a smell Percentage, inasmuch as rich and poor
alike consume substantially the reme &mount of bread per capita, one might say that
85'4! or 9^-: of the tax was naid by the poor, and only 1:V: or 15% by rich people.

Those texas, and others of like character, would be collected in order to pay the
interest and retire the principal of a tax-exempt debt which had been accumulated
by a small class of rich people.

The conclusion is obvious that a tax-exempt debt,

retired by taxation of that character, results in the bulk of the taxes being exacted
from the Poor in order to pay interest and principal to the rich.

Of course you may

'say that that argument applies to Government bonds anyway, and so it does, but it

applies more particularly to a tax-exempt bond, Which is accumulated, by reason of
its especirl value to tax -pryers, by the richer classes of individuals and corporations.

The nna'er to What you say about the

others at a discount,


bonds selling at per and the

is just the point of Ty argument.

The rich buy the tax-exempt

bond because that bond pays them net a very much greater return than does a t

bond, Whereas the poor man, rho pays no income taxes, reell'es net eimply the
that the bend reye.

Times are changing and some of the old principles vhich re have bli

worshipped, of the sacredness of property rights, irrespective of hor those r
When so scrupulously safeguarded may effect the eylfure of poor people, must
surrendered if vy are goine to preserve a oteble society in the world.
is simply a form of confiscation.


The minute a government says to its peopl

"the rich must pay a larger proportion of taxes than the poor," (that is in p

portion to meens,) it abandons one of the old cardinal principles of equality
property riehte in favor of the poor men.
many years ago.

The Eritich Government recognized

re have been rather sloe in coming to it, but now that our

hive approved c conetitutiontl amendment, giving Gongraos the right to levy d

taxes, -ithout apportionment among the states, to the extent of this graduate

come tax, I think we must recognize that it would he rather poor judgment, if

contrary to public policy, to brush this erinciple aside, or susnend its oper
in time If war by cresting a favored class of Government bond orners *he are

exempt from the provisions of the grrduated income tax law, end at a tir- whe

taxation should bear as lightly as possible upon the poor because of the incr
coat of living.

This is e big subject.

I don't ersume to have

but even if there is a doubt, I believe in resolving it in fever of the class
need the benefit of the doubt every tine.

"e may, and nrobebly will be forced toeomerhat enlar e the tax-exem

in our next big loan, but it will be duo to no failure to r cognize the justic
the principle that I have above referred to, but rather to the necetaities of

case Which may not ()ruble us to realize 101: perfection in respect of economi

It is very good of you indeed to keep in touch with that bay of mina


r. "aokenzie



has 'written me of having hoard from you, end I shall never forget your thou
ness and kindness to him.

Just now he is br_ instructor et e. training scho

DeCi29, Pnd writes me that there seems little prospect of an early return ho
But he keeps veil, and neither he nor I would have had

"itth rermost ragerds, believe me,
Sincerely yours,

William VackenIde,
!aneging Director, Th, Alliance Trust Cow-laxly, Ltd.,
Dundee, Scotland.


miss the Service

14+ p3

7 1919

May 26, 1919 RESERN
-?17, DY,RNt



Dear Mr. Mackenzie:

I have just received the circular relating to your retirement as managin[7. director of the Alliance Trust company, and read it

with mixed feelings of satisfaction and regret - my satisfaction is
that you are doing the wise thing in laying down a position of responsibility which you have held for so long and which must be overtaxing your
strength - my regret comes from the intimation that your doctor has found
it necessary to require you to give up active work.

I hope that it means

nothing more than recognition of the fact that you are nlder than you were
when as a boy in knickerbockers I first met you, and that you are now about
to enjoy a well earned rest free of all responsibility and with opportunity
to play all the golf that you want to.

You certainly deserve congratulations of the first order for
the magnificent management of that great company.
Sincerely your friend,

111..Wi.111aan7ia+ -c/o The Alliance Trust company, Ltd.,
Dundee, Scotland.



the Alliance 'Trust tItompaitp, fintittb.




Extract from Report of Proceedings of annual Meen:DY;

Company, held on 25th April /9/9.

The CHAIRMAN, Mr JAMES GUTHRIE, at the end of his speech, s
Acting on m
Mr Mackenzie has resigned his office of Managing Director. He is not

have to make an intimation, which I do with great regret.

because ho has left town for a prolonged holiday, from which our ho
shall see him back to join us with a seat at the Board. It is not therefo
of final severance, and I am not dealing with it in that sense, but Mr
services to the Company have been so great and have been rendered ov

period that it is only fitting that I should make some reference to them at
is now more than forty-five years since Mr Mackenzie took office as Se

Oregon and Washington Trust Investment Company, which with its four sis
combined to form the Alliance Trust Company in 1889. He brought to
mental capacity, and his natural strength of character and an inherited se
him to devote his intellectual powers with absolute singleness of aim to th
of the Companies. In working for them and in thinking and planning f

he has been quite indefatigable, and I may sum up the matter in a sente
that those who know the business of the Company most intimately w

highly of the part he has played in the problems solved, the difficulties ove
success won. Meeting here to-day, and congratulating ourselves, as we are

on the splendid position of our Company, we should be graceless indee
recognise the splendid part which Mr Mackenzie has played in its achiev
sure I may send him from this meeting an expression of our warmest th
hat done, and our earnest. hope for his speedy return amongst us refreshed
complete health. And our message will not go alone. It is not always gi
and successful worker to earn the regard of his associates, but Mr Mackenz
-his sterling character and his real goodness of heart-have attracted in


the loyalty and affection of those with whom he has worked. This is especially true of
those at home here, but it is also true of those in America, where he has troops of friends oft
who regard him with warm affection and esteem. His leisure, as you know, has been
largely devoted to the duties of a good citizen-to works of public and private beneficence
-and this part of his life has also won him the friendship and esteem he deserves. I
said our good wishes would not go alone. I am sure they will be accompanied by those
of numberless friends diverse in many respects, but united in this. Mr Mackenzie, in
resigning, referred in terms of the warmest regard and confidence to his colleague and
successor, Mr W. D. Macdougall ; and I would like to say in regard to Mr Macdougall
that he has come up to, and far exceeded, the highest expectations of every one of the
Directors since his appointment as Secretary of your Company ; and further, he has
approved himself to the shareholders and to the office staff by his affability as well as
his capability. (Applause).

Mr J. C. BIIIST, in moving the re-election of the retiring Directors, said-Mr
Chairman and gentlemen, I rise for a different purpose, but I am quite certain that those
present would wish that some reference should be made to the announcement that we
have just heard from our Chairman, that Mr William Mackenzie has decided to retire
from the post of Managing Director. There is no need to add to what you, sir, have
told us regarding Mr Mackenzie's long connection with the Trust and how much both
Directors and shareholders owe to the way in which he has identified himself with it,
and to the unceasing care and attention which he has bestowed on its affairs, and also
his great business ability and his attention to its service ; but I am quite certain we should
wish to associate ourselves with your expression of sincere regret that in his opinion the
moment has now arrived for his more strenuous activity coming to an end. We regret
the decision, but we will not contest it. For you, sir, if I may say so, the passage of
time has no particular meaning-(laughter)-but unhappily in the case of others it is not
so. We may be sure that Mr Mackenzie has come to no hasty decision. He is a man
of many interests, and he may be trusted not to vegetate in his comparative retirement.
Now that he is free from business cares, we, his friends-and we are all his friends-wish
him many years of enjoyment and well-earned retirement, while hoping, sir, as you have
indicated, that Dundee may still count him among her most useful citizens. (Applause).
Mr J. C. ROBERTSON, one of the Auditors, in acknowledging the appointment of
Auditors, said-I cannot sit down, gentlemen, to-day without saying to you that this is
the forty-fourth Report of this Company, and its predecessors, that I have discussed with
my friend Mr Mackenzie before it saw the light and was submitted to the consideration
of the shareholders. Mr Mackenzie had been barely a year Secretary of the Oregon and
Washington Trust Investment Company when I first made his acquaintance in returning
from Glasgow to Dundee, and was at once set to the auditing of that Company. Since



the Et Mance 'Ernst Company,



April 7, 1921.


Dear Mr. kackentiet
A few days ago my friend kir. Arthur Copeell, eantiened haNied, received

a letter from you in which you were goad enough to in2uire after me.
time since I have written you, end that is because of my long absence.

It is a long

over a year ago I wee net very well, ece granted y yeer'e leave of absence, and

only last January returned from a trip around the world, which kept me away ever
a year.

1 am now very much better indeed, in full harness again at the bank,

and with every prospect of remaining there, and in good health.
spent Christmas in Lenden visiting my friend Mr. Montagu Norman, of the
Bank of Englend, emd for t few days Mr. Gaeparc: Ferrer.
privilege to have seen you, but my vieit *F.6

It eould have been e ezeat

eheit, and I had so much to de, that

there was ae prospect of eaking the trip to Dundee.
l%e all keep well at home, and you will be glad to know that both my mother
and sister are enjoying good heelth.

Mete are difficult timem, requiring eourlige and foresight by our tankers,
and certelnly ty yeure.

1 here we shell rase through the pericd in which we pey the

penalties e`' this destructive war without tnything in the nature of e real breakt1ewn.

Conditions here in busineve generally are somewhat improving and 1 am Bled to say
that our financial and banking cituetion, both as to business generelly and Ks to
the gevernment, are thoroughly sound.

1 knew that correspondence must be a burden to you,


do not trouble to

answer this letter except in some mowent of leieure when you feel wholly disposed
to d


%th cordial regard!, believe me,
Very eincerely yours,

Wm. %.1eken,ief Esq.,
Dundee, Scotland,



May 9, 19P'.

My dear Mr. Mackenzie:

It was very nice to have your letter of April 75 this morning, but
I must surmise
I wish It had contained something in regard to your own health.
from the letter, however, without your direct at:laurel:co, that you continue well,
and that delights me very much.
Many thanks for your kindness in sending me a copy of the portrait,
It comes at an opportune time, as I am
which I shall indeed value highly.
just fitting up a new apartment in which I hope to have the pictures of some of
my old and valued friends.
My mother and sister continue in good health, and when I last saw them
a few days ago, they were looking forward to the usual early summer migration to
Cape Cod, where we shall all spend the summer off and on.
My eldest son is now hard at work at the National Bank of Commerce,
and if the present plans materialiae, within another year he will be located in
London, where I want him to go for the value of the banking training and experience that can only be had there.
I wish I could write you something fairly definite about the PennsylAlmost none of the American railroads have been
vania Railroad Company etock.
This is due to a combination
able in recent months to earn their fixed charges.
of causes, which I think may he principally summarized by, first, very high
operating costs; second, the present industrial depression, and third, freight
rates, which I fear under present conditions have passed the point of productivity.
They seem to have reached a level, where they ol,erate to restrain the movement of

On the other hand, I have always felt, and still believe, that the
Pennsylvania Railroad property is intrinsically the most valuable, and maintained
In the long run, it
in the best condition of f.ny of the great American lines.
In general, one may be more optimistic about the
will show its great value.
American railroads because of the more constructive attitude of our government
For many years the Inter-State Commerce
toward this great national asset.
Commission imposed unprofitable rates, driving the railroads to finance ty
bond issues rather than stock issues, and bringing them gradually to their pre:,:ent
But this is really a thing of the past, according to the
difficult position.
notions of many people, and I strongly hope that a better future is in prospect
for the strong and well managed properties.

May 9, 1921.


I hope you understand that this is the expression of an amateur
I am unable to follow railroad earnings and finances in
detail and must give you, therefore, a very general view of the situation.
avid on-looker.

There is no prospect of my being in England this year, but possibly
next year, if things are c,uiet, I may be able to run over for a short visit,
and certainly hope to have the pleasure of seeing you.
With kindest regards, and many thanks for ypur letter, i az
Faithfully yours,

William Mackenzie, Esq.,
22 Meadowaide,
Dundee, Scotland.


April 11, 1921.

My dear Yr. Mackenzie:
Your note of March :*:1

is just received, and I am knissing your

daughter's letter along to my eieter,

whose addrees is still 251

neat 8t.:1.11


4e all keep coil I am glad to say, and my on health is better
than it has been for some tiro!).

Lou may be intecested to know that mi

oldest son, who was in the army in France, is leaving in .1 !iloth or so
for London vhere he expects to enter the banking house of J. H. Schroder,
in order to get some experience of English wanking.
Hoping that you keep well, and 4ith warmest regards, I am
Very sincerely yours,

4illiam Ma6enzie, Esq.,
21 Meadowsice,
Dundee, Scotland.

December 11, 1922.

My dear Mr. Mackenzie:

It was indeed a pleasure to have your note of November 21,
and my reply has been delayed because of my absence from the office
It ie good to hear
for n short period taking a bit of a rest.
from you and have that evidence that you 9re vell, although you do
Mile I have had a couple of
not speak definitely on that point.
little too much work to do, I em nevertheless
pretty hard years with
in good shape, and there is a chance that sometime next year I ill
be in England, and if time permits I would like very much to run up
to Scotland to sec you.

ky mother and sister continue very well.
You would be
You know she is now
surprised how lightly mother feels her age.
in her eikhtieth year.
De Witt Cuyler's death %as a shock to UE all. I had seen
him but a few days before his death hnd last summer I hnd the good
fortune to have a nice visit with him in Bar harbor where I wee
spending a few days with my friend kontagu Mermen, of the Ban!. of
He did a great service, and I feel very sure that the
whole business community and especially his associates in railroad
matters will miss him very much.
We are rocking along here on the whole pretty well so far
as one can judge, with a little too much politics possibly for our
wellbeing, but with a growing business, very little unemployment, and
n better spirit as to the outlook.
kith warmest regards, and lay best vishee for Chrietlae and
for the New °ear, I sin,
`fours sincerely,

Mr. William Mackenzie,
22 MoadoAside,
Dundee, 9cotland.


Beyer -

Will you please write by hand the following letter to be signed by
Mr. Strong.

January 31, 1924.

Dear Mr. Mackenzie:

With most profound regret I learn on my return from a short
absence South that you have suffered the supreme loss of losing your life

This is indeed a sad blow, and I am writing at once to let you

know that you have my most profound sympathy.
Very sincerely, your friend,

Mr. William Mackenzie,
22, Meadowside,
Dundee, Scotland.


January 12, 14125.

My dear Mr. Mackenzie:
It Va.8 a great pleasure this loraing to fine your letter of
Decemter O, enu I thenk you moat cordially for the Boor. wishes /Mai it

So far as family matters are concerned, I can send you a very
good report. My mother ene eieter are Loth well, although unfortunetely,
last eummer mother uUffered a very aevere illness which at the time caused
ue great elem.
when she reached 'Epode Hole to spend the summer,
he was
taken sick and shortly developed a ecvere case of pmaumonia bhich kept her
in the hands of doctors and nurses all summer. Moe, hoecver, both mother
area sister are perfectly well.
My eldest on is merrier; ane living in he tork. He, you will
recall, %,itis in France ouring the ear.
pr daughter, Katharine, ie also
married and living ie Minneeote, shore oho is very happy, having; just com-

pleted e new house. Her husband ie a mining engineer in the employ of the
Hume Ore linine Comea4y.
As to myself, I keep pretty well, ulthough I heve been exceedingly busy for some time past.
kith my family eo cuch reeucea, my younger boy
?hilip ane I are living in e little aparLment at 270 Pt.rx Avenue, end I
find it :ore comfortuble mad lees bother to give up housekeeping, so we are
living in 1 comeined hotel ty:.nmeut it,hout the bother of a housekeeper meld
servants. This im .bout all the family news.
What you say about the exchange is interesting, indeed.
I h've
always felt that a gooc many of our morriee would he relieved when the gold
standard zee restored to something like normal operation; but, en you say, it
is a matter requiring a gooc deal of thought nc.; care, ene I find from my
contact with your own people, that they ere just as conscious of all the
difficulties as we are.
I am elec. to gain such convincing evidence in your letter that you
erg well mUG vigorous.
The next time I em in London, which may indeed be
Lhi3 summer, I em going to try and save time for a quick run up to Dundee to
see you.

kith many good wiehee for the New Tear, I am
Sincerely yours,

Allies Mackenzie, Esew,
64 Reform Street,
Dundee, Scotland.
eSe Le

September 17, 1925.

My dear Mr. Mackenzie:

It seems ungrateful, indeed, for as to answer your kind letter
of iguat 28 after such a delay, especially as the delay was caused by
my tctually being abroad for a large pert of the summer.
It was much in my mind tast, had time permitted, I would rom
up to Scotland for a visit with you, especially as I ha also promised
fey days
Lord Grey to visit him in F&llodon. Unfortunately I hies or,l
in London on my arrival,
then a very Ehort stay tfter returning there
from a longer trip on the Continent, and I never left the city or London
during the 'leek or ten days I wt.s
My aother and sister are both well and are still at Foods hole
where they always !rend tts nummem. On retumirk; the virtt of October
they propose to sail icrueelately on the second for Italy, where they


spend hc, winter, and some timf; next year they a e i,ropo:dng to visit
both France ant' England. This may be the occasion for your seein8 them,
which I know they will both greatly enjoy.

As I only e_rrived hoot 1it ni.Eht and have !, mtba of work rweitim; attention, I can send you but s. short letter yhich carries with it
many good. wishes.
You aay be sure tent I sill pass your leer.zeo on to

my mother and mater et once.
With warmest regarde, believe me,
Very cincerely youre,

Mr. Ailliam Mackenzie,
64 Reform Street,
Dundee, Sbotln-2..


Nov;:mber 12, 1925


ds, r

but I h...v3

Your letLer of October S rolohed me in du eourz.e,
unt,b1,1 to r,a?ly up to nor!.

ti f Eeoret!.ry,
Nibs L.t,e6, and just


clay is over.


7-1secker, h,-.6 been in touch with

I have L free evening I as

fr.! my 1-)u Philip, when the


Voti2erts addrear in It.!:ly is
c/a Dr. Agostino Mattoli,
80 Via Sietina,


hay not jr-t, decided where She .ill be in E.o1,,nd nor,
i.hon it
bc possible for her to .,et there. But
(At mewing her ycur letter, E'-nCi it sell to ,-.y be you ill

hee.r from her.

I wish th-Lt it ),ere
for me to do somethine;
for Visa Lena,, but unfortunl,tely one of my ciEtere-in-luv hsa
juLt lost her ff.ther and le very much proctr. teO,
brother Archtp wife hew two tc.h.if:, on her h
ju .t non, n'ither
hsa been vfry wen.
xith my Vother an 9.:-Iter in
Tidy, it le-ve me rather short of ladies in my family to .chow
her Piny hospitality.

pith kinde8t regards, bdicve me

Sincerely your,
1111,3 IfAckenzit,
34, Reform Street,
Dundee, Scotl-no.

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