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FEDERAL RESERVE BANK OF NEW YORK

NEW YORK CITY

62 CEDAR STREET




MEMORANDUM
Regarding proposed_ issue of
$6,000,000. State of New York Revenue Warrants.

---oo0oo---

1915
June 2

Mr. W. S. Fanshaw called and in the absence of Mr. Strong stated to the writer that the State of New York proposed to issue $6,000,000,
of warrants against taxes. The warrants would be issued WM time early
In June and mature on October 15, 1915.
He stated that the State had
been Offered the money at 2 7/8%, and he thought they would be desirable
investment for this bank.
We asked Mr. Fanshaw what his interest in them
was, and he said that he had brought them to our attention at the request
of Mr, Wendell, Deputy Comptroller of the State of New York, who had endeavored to communicate directly with Yr. Jay in regard to them, but was
advised that Mr. Jay was out of town, and therefore requested Mr, Fanshaw to bring them to our attention.
He said it would be entirely agreeable to him to have our negotiations and transactions, if any, made direct
with the Comptroller's Department.
When pressed for a statement of what
he expected to get out of it, he said that if we cared to give him anything for his services, he would be glad to receive anything that we
thought proper.
He was told that the matter would be referred to Mr.
Strong and Mr. Jay.

June 5

The above having been referred to Mr. Strong and Mr. Jay, we
communicated with Mr. Sabin of the Guaranty Trust Company, who confirmed
that their company had offered the money to the State at 2 7/8%, but that
their negotiations were now off, and suggested that we Should obtain our
counsel's opinion of the issue if we were to consider taking it.
We
already decided that we would require opinion of competent counsel in regard to the issue in view of taxpayers' slit for an injunction restraining the State from this borrowing, Which we understood had been dismissed
by the Court of Appeals.
We had consulted with Mr, Geo. Case, of White
& Case, in regard to the best counsel in the city to furnish such an opinion, and he suggested Spooner & Cotton, Mr. J. P. Cotton, o which firm,
is well known to us.

June 3

Mr. Fanshaw called bathe morning and we told him that we would
require an opinion by Spooner & Cotton regarding the issue before we could
consider the purchase, and such information -would have to be furnished at
no expense to us. He stated that he would* have such information provided.

June 3

In conversation with Mr, Fanshaw over the telephone, we stated
that in the event of our purchasing these warrants through him that we
would be willing to pay him the sum of $500 as full compensation for his
services and expenses, if any, for this bank in the matter. He replied
that $500 seemed a small sum for a transaction of 46,00p,0o0, and asked
how we would consider 1/32 of ]:%. Our reply was that We would not consider a commission of 1/32 of 1% at all, as it was entirely too much.
$500 was all that we thought this bank should pay, to which he replied
that anything we thought right would be entirely satisfactory to him,




Memorandum of conversation between
Mr. Strong, Governor of the Federal Reserve Bank of New York,
and Mr. W. S. Fanshaw,
held in Mr. Strong's office on the afternoon of June 8, 1915,
at which the writer was present.

---oo0oo---

w
Mr. Strong stated to Jr. Fanshaw that there had been a misunderstanding
in regard to the proposed issue of

6,000,000. State of New York Warrants proposed

to be issued by the State of New York and oensidered by this bank for possible purchase;

that we had understood from Er. Fanshaw that the warrants would be issued

to bear interest at the rate of 2 7/8% and that the matter of this bank's purchase
of such warrants had been under negotiation with the state officials prior to Mr.
Fanshaw having brought it to our attention;

that When klx. Fanshaw did bring the

matter to our attention it was Ar. Strong's suggestion that in consideration of services which Mr. Fanshaw might render for this bank in the matter, that we Should pay

him 000 in the event of our purchasing the warrants.
Referred also to the later development that on June 7, 1915, Er. Fanshaw
called and stated (to Mr. Jay) that he wished to correct one statement he had made

in regard to the proposed issue, ie., that they would be issued to bear interest
at the rate of 3% but would be sold to this bank to net 2 7/8%.

This was not in

accordance with our understanding, and hence the Whole transaction with Mr. Fanshaw
is declared null and void.

Mr. Fanehaw acquiesced in this unconditionally and stated

that he wished Mr. Strong to distinctly understand that the suggestion that the warrants be issued at the rate of 3% instead of 2 7/8% was made by the Comptroller of
the State of New York, (the difference being to cover the expenses involved for which
the State had no fund provided) and not by Mr. Fanshaw;

that he,.,Mr. Fanshaw, had no

desire to make a profit out of the transaction.


ERE/LCE


Ass istan.t Cashier.

-2-

1915
June 5

Mr. Jay has taken up with Mr, Wendell, Deputy Comptroller, the
requirements of this bank in regard Co warrants eligible for purchase by
Over the telephone the Deputy
this bank, both by telephone and writing,
Comptroller stated to Ir. Jay that he had no doubt as to the legality of
the issue.

June 7

Mr, Fanshaw called in the afternoon, accompanied by Mr. Judson,
in regard to the proposed issue of State warrants, and stated to the writer and Mr. Jay that the opinion of Spooner and Cotton would be ready the
next morning, and also stated that if there were any questions which we
wished to ask regarding the issue, Mr. Judson was in position to answer
them,
Mk, Jay replied that we would have no questions to ask until our
counsel had examined the opinion of Spooner and Cotton. Mr. Fanshaw then
stated that he wished to correct one statement Which he had made regarding
the proposed issue; that is, he had stated to us that the warrants would
be issued to bear interest at the rate of 2 7/8% per annum, but that in
view of the fact that the State had no fund from Which it nould pay for
outside legal services or opinions, or any other expenses in connection
with the issue of warrants, that the warrants would be issued to bear interest at the rate of $%, and would be sold by Er, Fans:haw to this bank
to net 2 7/8%.
Whereupon Mr. Jay told him we had understood that the
warrants would be issued at 2 7/8% interest and that our whole understanding in regard to the issue was based on that assumption, and if there was
a change in the rate of interest that the warrants would bear, the Whole
matter would have to be reconsidered as new business.

Assistant Cashier.

ERKACE







Estes Park, Colo., August 5, 1916.

Dir. E. h. Kenzel,
% Federal 2eserve Bank,
Lew York City.
Dear Mr. Kenzel:

The net time my friend Mr. IN man of the
Journal of Commerce stops at th.2-e-f-ft tell him that
his paper is no good. There_ eems-1-6 something
the matter in their .-1.ai1lo:_,
rtment. ast night's
mail brought me copies 9f the urnal of ' mmerce of
both July 29th and J11;34i 61st,
d by the same mail
1 received the Evening ost
August 1st and the
Times of August 2nd.
ts the five days behind

the times and glyea_the lap - that they sent me a

rather ancient'

/

nter sted in yourweekly
reports of Or nsaction in bills. Between now and
much)
the end of t year iji 4s going to require a lot
of skIllgto i
t
st of the market, iii which
1 is' "ii think 4t-she1.d be the leader.
(/
Pbeqp give my best regards to all the boys
my syrnpL1y that they have been so hard pushed
u
the/ ,weather.
Sincerely yours,
1

arrl tery

3




10)

Park, Coll,
September 2nd, 1916.
Dear Mr. Kensel:

I have your two very interesting letters of August
10th and 29th and regret the delay in answerinkithem.
Tell Mr. Hoffman that the Journaio5 ommerce is do--ing better. The papers arrive much more rigiN y and I think
1

(

I

they have now caught up with/the Po8t14!the Times,#till beats
,

them a bit.

The dotaWeIxirt m about the various credits,
etc., are just w
posted.

I wan te \and

good of you to keep me

-

The change_ n the/Brown credit, it seems to me, sh uld

very possfble objection and I am glad they took our advice,
pay]. C.ff the'o'L credit and establishing a new one.
makes one feel optimistic to hear of the develppment
of the various credits to which you refer in yours of the 29th.

meet

,

r

Don't ever forget that the real influence at the present time is
rates. Our rates are just about one-half of the London rates,
and that influence is irresistible. Beyond and behind that, however, is the question of gold payment. Bills that come to us
from all over the world for discount create bank balances against
which,ordinarily,fsveign banters draw checks. 'Once the exchanges

go against us, however, it becomes more profitable to withdraw




-2-

Sept. 2, 1916.

E. R. Kenzel, Esq.

gold and we must be prepared to ship the gold or all confidence
in our new banking system and in dollar bills will vanish like
That is one reAlon why I am so keen to see the
Summer snow.
Federal Reserve Bank of New York accumulate a large amount of

gold which can be furnished for export whenever exchange turns

against us, as it is bound to some day.
I suggest that you get a little book cg

ed *Money

Changing", written by Hartley Withers, where you

11 find a

good deal of interesting material on thtivsulal
I hope you keep up your lottok when it tnot too
t
))
great a burden.
f the boys, I am,
With watmest regards i
6 ntiiSlx

\7

R. Kspzel, Esq.
Assistaat Cashier, deral Reserve Bank,
EquitabLf Building'
E.

New York \S:44,..____9
BS/VCH




Uovember.@th, 1916.

Dear Mr. Kenzel:

J-n reading over your address, I am
that both you and Dr. Miller (in his in

fallen

apolis nd

s), have

into the same error in figuring The amount of f e

gold

held by the-.:eederal Reserve system.

You state that the res

90,000,000, of Which over

capital

0,000,0O0

the gold holdings of the re

.

preeented by

-t, allowing for 35%

reserve on deposits, the f
banks to

now

t to

enable ihe reserve

rediszount

Pederal reserve notes

to the extent of about 150
figure it th
about

The deposit liabilities a. e

550,000,000, g 1

what les

0,060,000, earnings, some-

than 3 % on th

therefore,

i.

he. omount of

our earnings u
penses :and a rea
-1,000,000 is t'

on the

cld

The firut allov:ance to make,
hich

sapitra;

Will

be 1os1 when we

bring

fcllouing for increased ex-

neble amortization for accrued dividends,
least that

300,000,000 of gold.

35

should be alloyed.

hia leaves

reserve on f550,000,000 of deposits

is t187,800,000 ane a/lowing a trifling m-argin, say $200,000,000,

is the minimum to which or gold reserves could be allowed to fall.




To

Nov. 6, 1916.

Jr. Kernel.

This leaves the f,oe gold at about i100,000,000 which would sup;)ont an isue of ;!1250,000,000 of note, s leoving out of consideration of course something over i.200,00U,000 of gold held by the
Reerve Agents.

Antiher importent aepect of this ratter le that under
coneno consideration should the managers of
centage as th Linimum
template permitting any ouch reserve
allowed by the statute. 7,e need an nwexist safety fl or be-

yond the legal minimun and it is for that reason that

have

esues and

been 70 urgent about accumula

will count as rewe will do, hut in
serve. n a crisis, there s no knowing w
kr first t safety f,Ictor'and
normal t%mes we ough to co
.timistic on that point.
it strikes me your view
are thing, I am afraid, without
We have all been guilty
to the portance of the situation.
giving sufficient thou
get-,ing the statute amended

think your

thnt it

quoted in full
Wi

a mighty good one and glad

drs8

the Chronicle.
en,

Sncorely yours,

E. R. Kenzel, Esq.,
Assistant Cashier, Federal Reserve Bank,
Equitable Building,
Lev York City.

BS/VC/




November

15th, 1916.

r. Kenzel:

Dear

Yours of the 11th with enclosures
Your inquiry about the City fian
very

just received.
espondence is not
view the

definite, but I think I can

in its applica

meaning of the statute as amend

to

finance

retations of the Reserve

drafts according to the var
Seard.

eeferring only to

drafts as

f

s,i

drafts drawn ageing

,

awn against importation and. ex-

Firet,

eligible, must be of a cnarac-

portation of goo

evide

imeo t or
be co

e, or by collateral documentary

,roo
,

that the proceeds are or vill be actually applied to
The French credits, therefore, can
export tran
this evidence because they bear marks

rued as afro

of ident

usually with documents
ition:

attaehed, I thin

ter to a

distinguished from

dicating that

they

are drawn

under a specific

commercial credit agreement, P. copy of which his been
Therefore, under

the original provisions of

furnished us.

the Act, be-

fore the amendment was adopted, these French drafts would be eli-

gible beceuee of their affording complete evidence of their characnot be
ter, but drafts otherwise drawn without tnie evidence, would
eligible.




-2
Nov. 15, 1916.

Mr. Kenzel.
The amendment to the Act

Second,

provides that drafts

furnish
drawn to borsivaxamxi dollar exchange will also be
can be shown that the usages of the country where

eligible if it
they are drawn

are such that the drawing of long bills for the purpose of settling imports and exports is a well esta

With this class of drafts,

shed

evi

therefore,

CO2

marks or inscriptions on
01 written agreement as in the c
do not consist of

rather of evidence which must b

that the bills are drawn
the country where

business

of eligibility

he drafts

submitted to

custom.

nor even

..ch drafts, but

t

serve noard

e with business usage in

they o

Considering

theee

eligibility,

definitions of

hat the bills described by

within which class
Fr. Cardine wil

do not fall wit

first class be

tion on the bills and because

no document exi

e evidence of how the proceeds

chec

cons

in the

e may go to settle for travelers
or for investment purchases or for any other teing.
within the first category, can they be
If not fall
ued as coming
one

-

thin the second!

-sry

only, and that is

It seems to me that

if business custom is

established by one or possibly by a few transactions.
a

never would by
action were

tax

business custom or usage if the

There

initial trans-

It reminds me of the Irishman who, beaccidents arose from one train smashing into

prohibited.

cause all railway
the rear car of

another

last car, suggested

that

take off the last car.

train and killing the passengers in the

it would

be much better for

them to




To

ir. Knzel.

Nov. /5, 1916.

Another theory which might be advanced to justify

eligibility in the case of the draft referred to is the fact
that American banks have long made it a practice to draw 90 day
bills on London banks which have establish a a business custom
on one side of the account and, consequen
on general grounds

of mutuality, the custom could be recogniz
the other way around. I think t

as being justified
,

however, is a

little thin.
,

The law leaves us

nfortunate pos tion.

technically today in the

peon nations by reason of
same position that South
They must have credit in

ountries have formerly been in.
finance their imports. They

would like to ado

hey have employed in fi-

nancing their °

-We heve no machinery to

enable them to
usage.

ave established a custom

ley must arrange finance

orde

credi s in some way
pro
Ame

you

ilted by law fr

Euro-

r
s

with

or

acceptance

American institutions that are

extending credits in that way.

If all

an aceeptipg h see wore members of the Reserve System,
A see tha

ne Act instead of being an

authorization

to

would really operate as a prohibition, except as
to those countries which had already established the custom with
their foreign bankers.
do the bus

I think the best way out of the difficulty is for these
English and Continental bankers to establish the cueto by opening




To

Yr. Ken20..

Nov. 15, 1916.

credits with banks and bankers not members of the System. That
means that we are promoting the business of nonmember banks at

the expense of member banks, but I do not see any other way to

reach the difficulty.
Does this answer the inquiry con ined in your letter?
5ircerely yours,

E. R. KenTel, Esq.,
Aseistant Caehier, Federal
Equitable Building,
New fork City.
BS/VCM

WM

11 r
SYMBOL

UNIC

Mr-

ge

Ater
a

Blue

Message

Nite

TEL

NL
none of these three symbols
ears after the check number of
.ds) this is a day message. Other° its charar
indicated by the

INL

EIVED AT

SYMBOL

Day Message

Day Letter

AM'

Venver,

.ov

Blue

Night Message

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

after the check.

Form 1201

CLASS OF SERVICE

WESTERN UNION

Night Letter

thol apnea.

v

Rite

Night Letter
NL
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.

!er 2

1

.

Kenzsl,

7-77111edera1. eserve Banc,
rprX

i.;.1V(.3

1,1

still triirt jfSiOL illy t.tt pro)osed jifVerential is i--

E

f-ke.
1r.}1

y cause tro.able wentioned by Alexander as well ac,at ctr.
letter to r:re!:an now,ver recoumenied effort to weibt Ver!

lositive vieva neserve Board beoupe of tteir actien l!si Frenen credt:
-,ra to avoid issue. FJtop. If Reserve Borq decided beea.ue of our utti4ude to rule t1-i renewal bills act. inelij.ble or if jomptrolle.:' rule.;
creuitr.! ultra vires for tionul ha:As as ne tar._'.tened, it would'
craie in my odnion a eerious !Ind deolor-Jde situation. !:ton. There-foc, tuink it mr,:y be Rise to try to restrict our puroaarser t'cfclilit
r. r rate eF a coaeaegio
10 loarl
tewnorary exleriment.
lenj. Stronq!,.
ChArge "mid,

Renj. Strong,
4100 "onivie w loulavnrd.

le1en'nons

nrk 130S.




11/




I-I

LiJ




FEDERAL RESERVE BOARD
WASHINGTON

December 4, 1916.

My dear Mr. Kenzel:

Assistant Secretary Peters has asked me for some
information about Mr. W. L. Sanders, President of the
Ingersol-Rand Company of New York City.

Would you be good enough to find out for me what
you can hear about the man?
With many thanks in advance,
Very:truly yours,

E. R. Kenzel, Esq.,
Assistant Cishier,
Federal Reserve Dank,
New York.

4,,ir

(:2,-..

(7,

Se_e_
A.-c

-




FEDERAL RESERVE BOARD
WASHINGTON

December 7, 191e. -Mt.&

afa
Dear Mr. Kenzel:

Thank you for your letter giving ne the information concerning Mr. Saunders which is just what I
wanted.

If my friend should require any further information, I shall not fail to avail myself of your kind
offer.

Very truly yours,

E. R. Kenzel, Esq.,
Assistant Cashier,
Federal Reserve Bank,
New York,

IP

December 6, 1916.

My dear Mr. Warburg:

I have your inquiry of December 4th regarding a 1W. W. L. Sanders,
president of the Ingersoll-Rand Company of New York.

I have no doubt that

4

the gentleman who is the subject of your inquiry is Mr. William L. Saunders,
chairman of the Ingersoll-Rand Company.

There is a

W. L. Saunders in New

York who is vies presidert and director of the Actual Appraisal Company at
152 areadasy, but he has no connection with the Ingerooll..Rand Company.

Saunders' home is in Washington Park, North Plainfield, N. J.
I learned from and through

where he has lived for upwards of twenty years.

residents of Plainfield that he is very highly thought of in that town, reputed to be a man of wealth but one who has worked up from the ranks in his

profession as a mining and civil engineer and is regarded as an authority,
particularly in the mining branch of engineering.

In politics he is a

democrat and has been a firm and ardent admirer of the president and local

report in Plainfield has it that he might become a member of the cabinet.




The Directory of Directors states him as
Director

A. S. Cameron Stearn Pump tVorks,
Edison-Saanders Compressed Air Company,
International Harvester Company of New Jersey,
International Harvester Corporation,

International Pneumatic

be Company,

Peoples Bank & ?rust Co. of Westfield, N. J.
Presideht- American Institute of Mining Engineers,
Ingersoll-Sargent arill Company,
and
Director - Rand Drill Company,

Chairman of the board of Inaersoll-Rand Company.
"Who's dho in America, 1916-1917" states: "William Lawrence Saunders,

2

12(6/16

engineer, born at Collaabus, Ga., November 19

1856.

He is the son of W. T.

and Eliza Saunders; holds the degree of B. S. of the University of
Pennsyl-

vania, 1876; married Bertha Louis Gaston, August 4, 1886, who died in 1916;
in charge of hydrographic work 1878, sub-aqueous rock

excavation 1879-81; was

twice elected mayor of North Plainfield, N. J., was a member of New York

-

New Jersey Herber Commission, Board of Commerce and Navigation, vice chair-

man of the Naval consulting Board U. S., chairman for Nicaragua International Pan-American Commission; president of the American Institute of Mining

Engiteers; member of American Society of Civil Engineers, American Society
of Mechanical Engineers, National Civic 2ederation, New

York Chamber of Com-

merce; trustee of the New Jersey State Chamber of Commerce, New York Southern
Society and member of various clubs.
a democrat.

Be is an

Episcopalian;

He is author of "Compressed Air Information"

politically,

"Compressed Air

Production" and co-author of "Subways and funnels of New York" and "Rock

Drilling".

His home is at Plainfield, New Jersey,

office at 11 Broadway,

New York City, which is the address of Ingersoll-Rand Company, he

being Chair-

man of the board of directors of that company.

The president atone of our large local banks who is a co-director
with him an the board of directors of the

Peeples Beak &

Trust

Company of

Westfield states that he has known Mr. Saunders in a persoaal way for sane
time and knows him to be a man of high integrity.

'His

moral

and financial

responsibility are above question and while he believes him to have considerable means cannot say haw much he is worth.

He further states that every-

body regards him very highly.
The vice president of one of our largest trust companies states:
"I have known

Mr. Saunders for

at least twenty-five years and think very

highly of him and his attainments.

with home at




Plainfield, N. J.

He is a man of about sixty years of age
As to his parentage, I am

linable

to say,

14/6/16

3
Li

neither can I give you any idea of his wealth, outside of "ring that he may
be worth from 000,000. to 01,000,000.

He is what I consider a top notch

man, being in close touch with all the business affairs of the country at
the present time, thoroughly understanding all details and absolutely sure of
where he gets on and where he gets off.

BB has been very successful in

business and is interested, with V. A. Grace, in a number of different lines.

His responsibility, moral and financial, is not to be questioned.
"Mr. Saunders is very close to 7oodrow Wilson, in fact, as close as
any man, I think, can be.

He worked very hard for Mr. Wilson's reelection

and it has been said that he is being considered as a possible cabinet member.

I onnnot say definitely, but it is my impression that be is spoken of

as the successor to i*ir. dedfield who is Secretary of Commerce and Labor.

He

is a college man and, I believe, holds several degrees but just what they are
Me. Saunders is the proper type of American business

I am unable to say.
man who is successful.

He is held in high esteem by all who know him and

he never undertakes anything which he cannot thoroughly falfull."
Throunh another source I have obtained an estimate of him by the

president of a large State bank in this city with whom the Ingersoll-Rand
Company keep their principal account and who has known Mr. Saunders for a

This gentleman states that Mr. Saunders is not now active in

long time.

that comenny but that formerly he was very active in it and successfel in
building up the business of the company.

He judges his age as probably

betees4a* and 65 years but does not consider him flan old mant, but one whose

faculties are thoroughly acute and whose mind and judgment are absolutely unimpaired by work or years.

He regards him as an A No. 1 man in every respect.

I have some farther inquiries on the way from which I may not hear
for a few days.



They are made through other than banking channels and may

41
41

ZIY

4

41

b.
4!

4

12/6/16

develop some side lights that will be of interest to you.
As so much of the inforMation that is not a matter of public record
has come to me in confidence, I am passing it on to you practically in tote in
order that you may be thoronjIly advised.

If there are any particular lines that you would like further investigated, I shall be glad to do my best for you.
Very truly yours,

orable Paul IL Warburg
eito Federal Reserve Board,
Washington, D. C.

.33,4Eis




47.IL'LIAM L. SAUNDERS

Office - 11 Broadway, N. Y. C.
House - Plainfield, N. J.
12/5/16

Mr. Rollin P. Grant, President, Irving National Bank, states:
"I have known Mr. Saunders in a personal way for some time and know
him to be a man of high integrity. His moral and financial reponsibility are above question and while he has considerable means I cannot say
how much he is worth.
He is about sixty years of age and is a home man. I meet him
at the board meetings of the Peoples Bank & Trust Company of Westfield
Everybody regards him very highly. He
of which we both are members.
has a number of large business interests but I cannot say offhand just
what they are."
The Directory of :drectors gives; William L. Saunders Director - A. S. Cameron Stearn Pump Works
Edison-Saunders Compressed Air Company
International Harvester Co. of New Jersey
International Harvester Corporation
International Pneumatic Tube Company
Peoples 3ank & Trust Co. of Westfield, N. J.
President and Director American Institute of Mining Engineers
Ingersoll-argent Drill Company
Rand Drill Company
Chairman of the 3oard of Ingersoll-Rand Company.

12/6/16

J. Herbert Case, Vice 'resident, Farmers Loan & Trust Company
states; "I have known r. Saunders for at least twenty-five years and
think very highly of him and his attainments. He is a man of about
sixty years of age, with home at Plainfield, N. J. As to his parentage,
I am unable to say, neither can I give you any idea of his wealth, outside of saying that he may be worth from 4300,000.00 to 41,000,000.
He is what I consider a top notch man, being in close touch with all the
business affairs of the country at the present time, thoroughly understanding all details and absolutely sure of where he gets on and where he
He has been very successful in business and is interested, with
gets off.
William R. Grace, in a number of different lines. His responsibility,
moral and financial, is not to be questioned.
Mr. Saunders is very close to Woodrow Wilson, in fact, as close
as any man, I think, can be. He worked very hard for Mr. Wilson's reelection and it has been said that he is being considered as a possible cabinet
I cannot say definitely, but it is my impression that he is spokmember.
en of as the successor to r. edfield who is Secretary of Commerce and
Labor.

He is a college man and, I believe, holds several degrees but
just what they are I am unable to say.
Mr. Saunders is the proper type of American business man who is
successful. He is held in high esteem by all who know him and he never
undertakes anything which he cannot thoroughly fulfill..
Taken from Who's Who in America 1916-1917;
"William Lawrence Saunders, Engineer, born at Columbus, Ga., November 1,
He is the son of W. T. and Eliza Saunders; holds the degree of
1856.
3. S. of the University of Pennsylvania, 1876; married Bertha Louis Gas-




-2-

WILLIAM L. SAUNDERS

12/6/16

ton August 4, 1886, who died in 1916; in charge of hydrographic work
1878, sub-aqueous rock excavation 1879-81; was twice elected mayor of
North Plainfield, N. Ji was a member of New.York - Ne:: Jersey Harbor
Commission, Board of Commerce and Navigation, vice chairman of the
Naval Consulting Board U. S., chairman for Nicaragua International PanAmerican Commission; president of the American Institute of Mining Engineers; member of American Society of Civil Engineers, American Society
of Mechanical Engineers, National Civic Federation, New York Chamber of
Commerce; trustee of the New Jersey State Chamber of Commerce, New York
Southern Society, and member of various clubs. He is an Episcopalian,
politically, a democrat. He is author of "compressed Ai Information"
"compressed Air Production" and co-author of "Subways and Tunnels of
New York" and 1q-lock Drilling". His home is at Plainfield, New Jersey,
office at 11 Broadway, New York City, which is the address of IngersollRand Co., he being Chairman of the Beard of Directors of that company.
740/1153.

12/6/16

.

Geiieft-i-a-1 National Bank advise that Mr. Frew, president of
the Corn Exchange Bank with whom the Ingersoll-Rand Company keep their
principal account has known Mr. Saunders for many years and speaks in the
hist terms of him. Zais gentleman states that Mr. Saunders is not
now active in that company but that formerly he was very active in it
and successful in building up the business of the company.
He judges
his age as probably between 60 and 65 years but does not consider him
"an old man" but one whose faculties are thoroughly acute. and whose mind
and judgment are absolutely unimpaired by work or years.
He regards
him as an A. No. 1 man in every respect. (

Mr.A6pper is also checking up through J. P.
Company
of which firm Mr. Lamont is codirector with Er. Saunders in the International Harvester.
Mr. Henry
Tome is making some inquiries which he will report to us in a few days.
.0
Mr. Saunders' home is in lashington Park, North Plainfield,
N. J., where he has lived for upwards of twenty years.
I learned from
and through residents of Plainfield that he is very highly thought of in
that town, reputed to be a man of wealth but one who has worked up from
the ranks in his profession as a mining and civil engineer and is regarded as an authority, particularly in the mining branch of engineering.
In
politics he is a democrat and has been a firm and ardenf,admirer of the
President and local report in Plainfield has it that he might become a member of the cabinet. S4WC.

CLA44,1.

Mr. H. H. Lowery of the CWk+4410-±134 National Bank whe has been
a resident of Plainfield for many years while not well acquainted with Mr.
Saunders has known him by repute very favorably for many years and an intimate friend of his who is also an intimate friend and close neighbor of
Mr. Saunders informs him that he knows him to be a man of high integrity.
His moral and financial responsibility are above question. andwhile he
believes him to have considerable means cannot say how much he is worth.



,ILLIAM L. SAUNDERS

He further states that everybody regards him very highly, and further suggests
that the American Institute of Lining Engineers of which Lr. Salnders was the
organizer and president should be able to give full particulars as to his
professional career.

74,4 1-,s

.

4,

at._

-

4_,,




Z,J
6"-

e,6

Rivw

hArkar

J

/IAA

.

MISC. 41

AFTER 5 DAY, RETURN TO

CORNER PINE & NASSAU STREETS

FEDERAL RESERVE BANK OF NEW YORK
NEW YORK CITY







December 13th, 1916.

Dear Mr

This is in reply to the Weekly R

t of December 9th.

The arrangement about gove

excellent

and if Chicago fails to come into
invited to handle the matter accord

t they be
g to their own

will find 11 irate competitorsing on them in

It will be an excellent

th

.

este. They
short tine.

'nicago and to the

Federal Reerve Board.
About the pur4

prepared for

so of hills a

s an excellent

Mr.

in every way.

the memorandum you

The

hi4

rat

keeping a steady cour

showing

stify the Reserve Bank in

ering opportunity for its members

to get money if the

d purchases of bills

in a large

doubtedly delve

e situation ex ctly as it should

snou

way

drift into a continued period of high

have d

rates, the o
ered

in conn

.Reserve Bank

y possible radical change of policy to be consid-

ion with

rate adjustments is the attitude of the

o ard non-member institutions.

Under certain con-

ditions, we ought to consider (although I am not yet ready to
recommend it),

dealing

directly only with member banks or

with

has not arrived,

how-

member banks through brokers.

The time

ever to take such a radical step and it would lead inevitably




2
To

Mr. Kenzel.

Dec. 13, 1916.

to serious embarrassment in
barAers

who are not

dealing with

the bills of

This is simply

eligible for membership.

a suggestion for debate among the officers.
I notice Lazard Freres down on the
Are these bills endorsed or have
t850,000.

private

list

for about

zard Freres fur-

nished a statement and is it thoroughly satis a tory!
Thank you for such excellen
ii one.

Very sincer,,-ly

E. R. Kenzel, Esq.,

Assistant Cashier,
Equitable Building
Ner York City.
BS/VCM




details

f your transac-

Denver, Colorado,
January 10, 1917.

Dear Mr.

Commenting on the Weekly report of December 22nd.

my

to accomplish anything towards arrange

The only

cater facilities

,

for carrying bills will be to submit a ,, .ful stateme. ' of this mat-

ter to the Reserve Board, or to persu, the bill house

4r

to effect arrangements with member b

under the 15 day collateral no

can use us for their

benef'

thin that I can do from
with.

R. Kenzel,
ssis
lew
City.

BS/CC




Esu,
F

to carry their
n , so tha

t they want
srtfolios

e member banks

°nit elieve there is anycertainly should be dealt

0

11--,frg/I

'

FEDERAL RESERVE BOARD

0




WASHINGTON

7th, 1017.
'

Mr. B. P.,. Kenze1,
C/o
ioa'i ieerve Bank,
Hoy: York
I,ry door Mr. Kenzel:

Could you have letters prepared introducing mu son, Benj. Strong, Jr., to the following:

Herman H. Har es,
Messrs. :Torgan, Haves

Co.

ic.<5.14,5gait

Georges Pa Hain,
C/o Bank of France,

Major loan,
'American 'Embassy,

Captain Saulas,
American Embassy, laris,
.

Ambassador Wm. C.

Iaris,

Charles E;.

Ave. du Bois
de Boulogne,
Sir Ed:ward H. 7oldon,
5 Threadne

Iondon,

1.Tontb.ut C.elormen,
an:: of 'England,

,,

Gronfet.l,

Messrs. Morgan. OrenfXela ,!): Co.
Bro,_. St.
Iondon.
,

Hon. w. H.
American Amtassador, 1ondon.a.




Meco I 7:L2.nt to deliver to him imedic'..tel:?
on kI
L.,.

retiarn TaeLdau cfternoon,

icl

I

form ,J1:1c1i can be ILL-ed for each leiter.
ver

onelosin

0
Lear
,Der :;:on>,tu:P
,Dear .7.ajer._..

0

..Der

v-Deax CuI)tain sales,
...--:Dea-,' Lir
/Dear I.hilliy.s,
v-DearcYormon,
,--'Dcar jranfell-

vDear :L.- Rzibassador.
Ter ift,..--/

This letter viill be yresented bv my oldest son,
Benj. Strong, jr., who is proceedin to laris to tahe u..p
his duties in the Allerican Ambulance service \:ith the rrench
He has been a student of Irinceton and is oins
Ykrmy.
with a number of his Triends from there.
Ben has been in the Yational Guard for about a
Ve*
-has.beon Liu;:tored out of the sery;:60,
much to hi 2 rezret he
.,.'ecL,use his es,yes failod to riect.the re:lufred stiLadro, aE:
year L,nd .v,.as mustered into the United States Lriny.

_
he 12 oblized to v:ear i:Jaues_evenen on dut
----tilvally, 1 do not V:nt'hiL: to yu.sE 'Cl-irouh
ondon (or Iaris as the case lay be) without ta:7ing the

oortunity, if yossible, of lieeting you.
T have told him not to hesitate to call upon you
any time t:or advice.
Thankins you in Edvance for anythin
.

that

be able to do for him, 1 am,




Very sincerely -yours,

you may

:C.;

_h7 I V Li; D

AUG

11.

3 1025

FEDERAL RESERVE BANK
OF NEW YORK

Spa, Belgium,
July 21, 1925.

Dear Mr. Kenzel:

I am very much obliged to you for your confidential
report of July 8, with attached clippings, concerning the failure
of Dean, Onativia

Company;

I have read it with a great deal

of interest, but it needs no comment.
I am writing separately to all of you at the bank
about various matters requiring attention.
Very truly yours,

E. R. Kenzel, Esq.,
Deputy Governor, Federal Reserve Bank,
33 Liberty Street, New York.




Royal Hotel,
Evian-les-Bains, July 5, 1928.

Dear Mr. Kenzel:

Mile Dr. Stewart was with me, we had quite a talk about the
recent expansion of European acceptance credits by New York City bankers;

possibly he had a similar talk with
has been watching it from this

side,

and expressed some concern lest the

growth of the business was not somewhat at the expense of safety.
ferred especially
action of the

to the type of

Federal

He

Mr. Harrison, but I am not sure.

He re-

credit recently made possible by the

Reserve Board in liberalizing the rulings so that we

are now able to finance the movement of goods within or

between European

countries.

Of course you realize that this type of bill, that is, a bill to
fasilitate a movement of goods in which we are not directly interested financially, has never been accepted by the Bank of France, and only as exceptions to the rule by the Bank of England.

It is generally

here as a "domiciliary bill*, that is, in this case a bill

which is domiciled in New York though it

described over

the payment of

relates wholly to foreign

transac-

tions and goods.
I am not willing to say that we should change our practice.
credits have

degree.

had an indirect influence in

The difficulty we

one than a technical one.

banks have not yet




maintaining our exports

Those

in no small

would experience in New York is more a credit
Dr.

Stewart

feels, as I do, that many of our

developed the knowledge or

gained

the experience to enable

7/5/28.

Mr. Kenzel.

2.

them to thoroughly understand all the credit risks involved, and it is
a business which even the London bankers, with their experience, handle
very gingerly.
It occurs to

me that it might be a good plan for us to pick out

some of the institutions which are developing this business in a rather
large way and make some careful and particular inquiries as to just what
the business is, what the credits are and how carefully
I should think two good avenues of inquiry would

be the

it

is being handled.

International Ac-

ceptance Bank and the Equitable Trust Co., just as a start, and possibly
later the National City Bank.
large port

My impression in the past has been that a

of this business done in London is

arrangement by which the London bankers are

done under some joint

reasonably

account

protected by the

local knowledge and frequently the actual obligation of the large banks in
the country where the business is done - for

instance, Germany.

It may be that later in the year it would be feasible for you to
come over here and look into some of these matters on the ground.

The

developing a

money

people in the Bank of France are

facing

the need for

market along the lines of our development, and I think they would be grateful for a little help on that subject

also.

We can talk it

over when I

get back to New York.

Please give my best to everybody in the Bank, and the same to
your goodself.
Sincerely yours,

Mr. E. R. Kenzel,
33 Liberty Street,
New York.




Office Correspondence
T.

Wt"

S-71-

From

Subject:

0-t-0-45

Date

_

el-C-4-,Zezie-e

--

CTL

(MX

FEDERAL RESERVE
BANK OF NEW YORK

7-L

14e.

ILL

&,_674c4Lc




5L.

kW-19-POU4S

(UV
SiaALIC)

tl;,'

,crA-ed,eir




No. D340677

tatro 3Intrntat 'Itruritur,

°I'e-#6.-

OFFICE OF COLLECTOR,

Form No. 1.

(Revised May 5, 1913.)

2nd

District of

New York.

MAY 22, 191

191

or7gt

Err iurb

)--.---Dollars,

on account of

A INCOME TAX /01g
(En er heti on what account paid and period of liability, e. g.,

"Special excise tax, 1913," "50 per cent penalty, It. L. D., 6 months June 30, 1913," "Offer in compromise," etc.)

Five per cent penalty

Interest at f per cent per month for
Total amount pajd

months

576, Collector.

-

**"--.<

allstfa

71701841.614

10 301R10
. egg..

P

-

irmo-r.

--(




out --

\

MAY
111(14::

b. bin

(.ale ",e&iLITONEEIOCI ill w110"

k.64.

jaiv,

,08 Dant ottluom 8

.11 ,vInaoq /non loq

",81(11 ,x.n1 0813X0 I"

toIztv5q
zAistom

-

Airtom .m inn .mq
irsuorris Isto't

15t skra
it, its.r5isil

ge,e4.
OW. I,

No. C

438651

3ttifr

ta1r 3rttrrnal Eturttur,
OFFICE OF COLLECTOR.

Form No. 1.

(Revised May 5, 1913.)

211d District ofNEW

YORK,
JUN 3

1915

, 191

Eyriurb
INDIVIDUAL

,00

Igi

Dollars,

(Enter here on what account paid and period of liability, e. g.,

n accoun of

/

0

"Special excise tax, 1913," "50 per cent penalty, B. L. D., 6 months Jima 30, 1913," "Offer in compromise," etc.)

Five per cent penalty

Interest at 1 per cent per month for




months

y

Total amount paid

i9
,

Collector.
2-602




,

W YORK CITY

ODAR STREET

FEDERAL RESEIRVE BANK OF NEW YORK

62

4,4




Form 1042.

UNITED STATES INTERNAL REVENUE.

ANNUAL LIST RETURN OF AMOUNT OF NORMAL INCOME TAX WITHHELD AT THE SOURCE
ON SALARIES, WAGES, RENT, INTEREST, OR OTHER FIXED AND DETERMINABLE ANNUAL GAINS, PROFITS, AND INCOME EXCEEDING $3,000 FOR THE TAXABLE YEAR.

The income to be made the subject of this return does not include dividends on capital stock or net earnings of corporations, jointstock companies, etc., subject to like tax or income derived from interest upon bonds or mortgages, or deeds of trusts, or other similar
obligations of corporations, joint-stock companies, etc., or from interest upon bonds, mortgages, or dividends of foreign corporations.

Filed by

for the year 191 6

(Name of debtor or withho irtg agent.)

To be made in duplicate to the Collector of Internal Revenue for the District in which the debtor or his duly appointed withholding agent,
as the case may be, is located, on or before the first day of March, showing the names and addresses of persons who have received salaries,
wages, rent, etc., as above described, in excess of $3,000, on which the normal tax of 1 per cent has been deducted and withheld during the
preceding calendar year.
I (we),

of
(Address in full.)

(N a

the dv---J17

of

(State official title.)

/e-c-d-e-2-vc

located at

(Debtor or withholding agent.)

(Address in full.)

do solemnly swear (or affirm) that the following is a true and complete return of all salaries, wages, rent, and other fixed and determinable
annual gains, profits, and income in excess of $3,000 as above described, which were paid (or were payable) to each of the persons listed herein,

and on which the normal tax of 1 per cent was deducted and withheld during the year stated, and there are herewith inclosed all certificates
claiming exemptions and deductions with respect to said income.
NAME.

ADDRESS 1N FULL.

CHARACTER OF INCOME.

(State whether Rent,
Wages, etc.)

AGENT IS LIABLE

FOE Tex.

000.

e24,-C

AMOUNT OF INCOME ON
WHICH WITHHOLDING

AMOUNT OF
EXEMPTION

AMOUNT OF INCOME.

AMOUNT OF Tex
WITHHELD.

Xtrz-i-C

O00

/2... .0

cr,...s,73,4_

cf.#11-(f

ge, a 0

ae.-4--v-1,.-4-

C".../3ar/

ortot

r-

e

Totals for calendar year

$`ri

ZT

Amount of tax remitted herewith (if any) to Collector
Sworn to and subscribed before me this
District of
(Address.)

day of t7Ze--4.4.A

, 191
Axe, CASIO*

Ze7-7Y

NOTE A.Withholding agents may, if they so desire, pay at the time this list is file
during the year for which the list is made.




Signed:

(Capacity in which acting.)

o the Collector of Internal Revenue with whom the list is filed, the amount of tax withheld
2-7358

1

AFTER 5 DAYS. RETURN TO

FEDERAL RESERVE BANK OF NEW YORK
YORK CITY

62 CEDAR STREET

t-vi

1
4.

r




0.1.4.

EXEMPTION CERTIFICATE

Form

02d

(For claiming exemption at the source as provided in paragraph C of the Federal Income Tax Law of October 3, 1913.)

To FEZEIAL ESEEVE BANK OF NEW YOU.
(Give name of withholding agent.)

(Full post-office address.)

I hereby serve you with notice that 1 anadiaimplemarried, with my; (wifebisiminowi) living

with me, and that I now claim the benefit of the exemption of $ /I C, c, c:,
, as allowed
in paragraph C of the Federal Income Tax Law of October 3, 1913 (my total exemption under
)
paragraph being $
Date,

OCT 2 9 1915

,191

'' 41(i

#said

Signed:

Address:

/

ull post-office address.)

/

Seirv.W.
P-

NormClaim for exemption on Form 1007 can be filed with the debtor or withholding agent at any time, not lest than 30 days prior to March first next

succeeding the year for which exemption is claimed.
http://fraser.stlouisfed.org/
(SIGNATURES MUST BE CLEARLY AND LEGIBLY WRITTEN.)
Federal Reserve Bank of St. Louis

EXEMPTION CERTIFICATE

Form
1007.

(For claiming exemption at the source as provided in paragraph C of the Federal Income Tax Law of October 3, 1913.)

Revised.

(Give name of withholding agent.)

x.cal-t-/

L4f2,(1/
(Full post-office a

ess.)

I hereby serve you with notice that I am isi1-married, with i9ay (wife
o,
with me, and that I now claim the benefit of the exemption of $ /74ru -

living
, as allowed
in paragraph C of the Fe eral Income Tax Law of October 3, 1913 (my total exemption under
).
said, paragraph being $ 000 .c--'
,..,cl,..,

Date,

aGC

X-----

,19th

Signed:
Address: 'f-t e-2-W-Y1.44,

NOTE.-Claim for exemption on Form 1007 can baffled with the debtor or withholding agent at any time, not less t

succeeding the year for which exemption is claimed.
http://fraser.stlouisfed.org/
(SIGNATURES MUST BE CLEARLY AND LEGIBLY WRITTEN.)
Federal Reserve Bank of St. Louis

laaaa.babaire})

Form
1007.

Revised.

i

T

i

EXEMPTION CERTIFICATE

(For claiming exemption at the source as provided in paragraph C of the Federal Income Tax Law of October 3, 1913.)

,e-----A...,,c
--

-

/r..11.-A-ar,A-444.--4-4--aI

1,, IlraE: of withholding agent.) -

-

-

(Full post-office address.)

I hereby serve you with notice that I am singlemarried, with my (wifehusband) living
, as allowed
with me, and. that I now claim the benefit of the exemption of qi.cr.et.ct
in paragraph C of the Federal Income Tax Law of October 3, 1913 (my total exemption under
said paragraph being
Date

1916

Sign

Ad.dress:.2..207,-JTe.-4*C-a cf,

(Full post-office address.)

NarmClalm for exemption on Form 1007 can be Med with the debtor or withholding agent at any time, not less than 30 days prior to March first next
succeeding the year for which exemption is claimed.




(SIGNATURES MUST BE CLEARLY AND LEGIBLY WRITTEN.)

EXEMPTION CERTIFICATE

Form
1007

(For claiming exemption at the source as provided in paragraph C of the Federal Income Tax Law of October 3, 1913.)

Revised.

To FEDERAL RESERVi BANK OF NEW YORK,
(Give name of withholding agent.)

g
(Full post-office address.)
P-1 4

H
I

a, 14

A

I hereby serve you with notf that I am iditilemarred, with my (wifehiwitsmecl) Jiving
D.
, as allowed
with me, and that I now claim t e benefit of the exemption of $
in paragraph C of the Federal Income Tax Law of October 3, 19'3 (my total exem tion under
v 0. ).
said para raph being $

19t5---

g

Signed

C"k"1/4-A-AA-A.4-4.-/-

ykrt.v-X--

Address

r4

nil

ddress.)

NOTE. Claim for exemption on Form 1007 can be filed with the debtor or withholding agent at any time, not less than 30 days prior to March first




year for which exemption is claimed.

(SIGNATURES MUST BE CLEARLY AND LEGIBLY WRITTEN.)

e

succeeding the

_g

Exemption CertificateFIRMS, ORGANIZATIONS, OR FIDUCIARIES.

Form
1063.

Pkte,

(For use of firms, organizations, or fiduciaries entitled to receive income other than from interest on bonds, to establish their identity and nem/liability to
withholding at the source.)

_Oef

64-0'
(Give name of

tor.)

(Character of income, other than interest on bonds, as, rent, dividends from foreign corporations, etc.)

I do solemnly declare that the firm, organization, or person named below is entitled to receive the above-described income,
and that under the provisions of the income tax law and regulations said income is exempt from having the tax withheld at the
source, and that all the information given herein is true and correct.
Date,




Ofr',GE BEi

, 191

r fiduciary,)'

EAc., 'Rfirt

By

(Signature of person duly authorized to sign for firm or organization and
his official position, or name of trust.)

Address:
(Give full post-office address of firm or organiation or fiduc

/

Exemption CertificateFIRMS, ORGANIZATIONS, OR FIDUCIARIES.

Form
1063.

(For use of firms, organizations, or fiduciaries entitled to receive income other than from interest on bonds, to establish their identity and nonliability to
will
"ng at the source.)

(Give name of debtor.)

(Character of income, other than interest on bonds, as, rent, dividends from foreign corporations, etc.)

I do solemnly declare that the firm, organization, or person named below is entitled to receive the above-described income,
xempt from having the tax withhold at the
and that under the provisions of the income tax law and regulations said inco
source, and that al
formation given herein is true and correct.
Date,




, 191
(Name of

m, organization,

ciary.)

alifax_A

By

(Signature of p son duly authorized to sign for firm or organizatio
official position,or name pf trust.)

Address:

....

ait/

07*/

(Give full post-office address of firm or organization or fiduciat

rtc,14
(/`wi'

2--

4AIJA4Y LIST

A,EST1VE aaix OF .7E4 YORK
OFFICERS

WSITION

SALARY

Benjamin Strong, Jr.:

Governor

430,000

Pierre Jay

Federal Reserve Agent

16,000

J. F. Curtis
L. F. Sailer

Secretary and Counsel

12,000

Cashier

10,000

E. R. Kenzel

Assistant Cashier

L, H, Hendricks

"

4,200
6,000

??

ELIPLOYEES:




Arthur W. Gilbart

Discount Dept.

A. B. Fletcher

i,

2,400

il

1,500

Walter B. Matteson

Securities Dept.

2,400

I. Ward Waters

Paying Teller

2,700

Roderick P. Fisher

Receiving Teller

1,500

n

George Hoehn

Wh. M. Kettner
*Nan Raaseh

"

Dept.

Note Teller
"

IS

1,200
1,500

Dept.

1,140

Thomas M. Day, 3d

Clerk

600

Ralph G. Wills

Clerk

450

Michael A. Hanson

Clerk

480

G. V. 21. Veghte

Transit Dept.

1,200

Miss 3elle Furstenberg

Transit )ept.

900

Wm. A. Ehm

Clerk

720

Arthur M. Kesses

Clerk

500

E. D. Hassard

Clerk

540

Salary List continued:
Federal Reserve Bank of new York:
POS/TION

E4PLOXELES:




ZA.4_41.

$97,930

AmOunt carried forward

E. G. Blackford

Debiting Dept.

Rudolph E. F. Wiese

Harry W. Dennington, Jr.

1,400
700

Bookkeeper

Frank J. Ramsden,

720

1,000

Pedro L. Schellens

Statement Clerk

John A. May

General Bookkeeper

H. V. Cana

Credit Dept. and
Federal Reserve Agent's
work

800

2,000

/1,000

Fred. W. Opper

Asst. Credit Dept.

Miss E. E. Bushnell

Caief

Miss L. C. Elliott

Stenograpuer

1,200

Miss R. A. Holmes

Stenographer

1,200

Miss Jean Miller

Stenographer

936

Miss H. H. Reynolds

Stenograther

936.

Miss I. W. Banks

Stenographer

936.

Miss E. E. 'Burrell

Addressograph

624.

Miss Justine Miller

Typist

520.

Miss Mary C. Parker

Files

1,500

Miss Hilda W. nese

Files

900

John MeAlevey

Files

466

Harvey B. Prescott

Stationery

520

Miss Elizabeth Bruce

Telephone Operator

820

MTS. V. C. McLaren

Governor's Secretary

James Hood Scott

Watchman at Vault

Edward J. McCabe

Floorman

1,500

tenographer
1,500

1,500
900

1,040

List continued:
?ederal Reserve Bank of New York:
;POSITION

EMPLOYEES




IAR

$125,548

Amount carried forward

James J. Delahanty

Floorman

900

Jean A. Sullivan

Messenger

360

Francis SoraCco

Messenger

360

Walter 11, Riedel

Messenger

260

F. F. Goodman

Messenger

260

J. J. Parnan

Paying Teller's Messenger 1,200

Geo. S. McNair

Watobnan

John J. Phelan

Watchman

900

900

Harry P. Aumadk

Assists in Fed. Res.

Jos. D. Biggins

Chief Clerk

3,000

Adolph J. Line

Officers' Clerk

1,800

Howard U. Jefferson

Auditor

3,500

W. D. Goodwin

Auditor's Assistant

1,800

D. A. ReintoreCht

Agts. Dept. & Credits

"

900

--...14.4.22

4 142,388




Al_44
/.

6 v

SAURUS An, DIN os OF OFFICERS An 1PLOYERS
AJD THEIR SECURITY BOCeS.

DEPT.

Loans and

Secur4ties

EePLOYEIa
Custody of bills discounted, Arthur W. Gilbert
loans pee collateral thereto, deposited with Federal
Reserve Agent, to secure
Aaron B. Fletcher
circulation, substitutions

and withdrawals;

accep-

IVA
Chief of
Loans &
Discounts
Asslstant
Loans &
Disceunts

SAIARX

4 2,400
1,200

BOND

410,000 v'
45.0 0

5,000'

tances, loan and discount
records.

Custody of securities purohased for our own account

Walter B. Matteson

and for others, in cenjenc-

Chief of
Securities

2,400

10,00

tion with an officer. Details arri records thereof.

Paying
Teller

Custody of cash, vault record I. Ward ,aters
Of cash held at Clearing
House and Subtreaaury, signatures, Clearing House
balance, clerks' payroll.

Teller

2,250

Receiviemg

Receipt of counter deposits, Roderick P. Fisher
verification of checks, etc.,
and preparation of cash for George Hoehn
Paying teller.

Teller

1,500

1,000

5,000

Teller

1,200

10,000

Asst.
(Clearing
House
Settling
Clerk)
Credit
Books
Asst.

1,000

5,000

Teller

Note
Teller

City and Country Collections Wm. X. Kettner
Incoming Mail
John Flaasch
Clearing :louse Lack

Registered :Lail and Express
(Valuable)

Preparation of Credit Books
Preparation of Expense Vouchers
Return and Protest Items
Thomas M. Day, 3d.
Ralph G. Wills
Lichael A.
Transit

Hanson

Collection of out of town cash L. H. Hendricks
items
Oatgoing mail
G. V. N. Veghte
Securities Correspondence

Asst.

360
4f.0

Debiting

Preparation of Debit
Books

Manager

6,000

changes
(Wiese assists on outdoing mall

ir'e

//1462

20,000 -/

let Asst.

1,200

5,000 /

Miss Belle Sur-

Asst.

780

5,000

stenberg
WM. A. Ehm

Asst.

600

5,000

Asst.

500.

5,000'

Asst.

540.

5,000 -/

E. 0. Blackford

Chief

1,400

5, 000

Aset.

700

5,000

?roof of incoming ex-Rudolph E.F.Wiese

V

5,000 '

E. B. Hassard

(L. H. Hendricks)

1200

5,000-

480

v

5, 000-

ArthurM. Kesses

(L. H. Hendricks)
Parolees° of Supplies

p.

v

20000

Asst.

cO

25,000v

VI




(21

DMA
SISOkkea4

444=
Members

Ramadan,

Statement
Keening

General
Bookkeeper

Member Banks' Stateneute

Pedro L. 2chellone Statement

Cleft

General ledger
Other Aderal Beserve :Unit

John A. -:4sy

General

5,t2poo

1,000.

Prank J.

Federal Aeserre danks'
Statements

=Q.

* 600.

Barry W. Dennington,

Jr.

SAT.A.,fox

5,000

410.

5,000

1,500

7143

V

5,000

BookLndgers(temporary assign-keeper
ment)

Capital Stock edger
Proiaration of general
statements.

Credit

In Charge

s,cetpt, analysis, and filth& R. V. caw
of borrowers' statvsentit
and other credit information.

(Cann Part ttme Credit Dept.., Fred. W. Omer
bal9nce with Pea. ;.Ziad4 Agt.)

Asst.

to E. E. Bushnell Steve.
"

"

L. C. _Elliott Steno.

R. A. IOlmes
Joan 4111er

are. t.Battereon

It

Mist; 5. 3. itaynolds
"
I. Banka
FL. lurreli Typist

Justine Uiller

Piltn

latter Piles

5,000

Chief

Dictation
Itmeariting
Copying and duplicating
Addressograph

Stcnogranhie

Inc.In

F.S.Ate
Dent.
1,500.

Ules anry C. Parker pus

1,200
1,040
2,040
640
936
936
700
624
540

1,000
1,000
1,000
1,000
1,000
1,000

Stationery

Purchase and distribution
of stationery amd sup.

1,500

1,000

Mies 51,11a7ff. Einne Asst.

900

1,000

Jeha MeAlevey

General Piles
Librar,

466

1,000

520

5,000

Cleric

Anat.

Harvey 5. Prescott Asst.
(1111.4an_

plies

Telephone

Operator

Coveraor's

ocrE:tary.

Vault
Keeper

?loom=

dricks
In oh00.)

Tetilbone &witeldiesisi

Mine Elizabeth

aperator

728

Laren Cire'y to

1200,

4000

900

5,000

14040

5,000

700

5,000

300
260
260
260

1,000
1,000
1,000
1,000
5,900

Bruce

Dtctit Ion, etc.
Watchman at vault

Auditor's Transfer tiles

V. C.

Goer.

James 400d Scott

Vault

atar o J. LcCabe

Ploorman

is

Relief et Mora
Guard on floor

Officer for laying Tellies
Messenger

Direction of Pages
Jar.les J. Dolahanty
Lessencors

Uesseneers for officers un-Jean A. Sullivan
der direction of floorman

Frannie Serrano

ilesencer

Walter t. Riedel
F. F. Goodman

3. Parnan
charge of allJ.ship-(Relieves

PAying Tellers 4eassager

ments of currency and securities
Incoming Registered.
also Clearing House Balances)

flOorman
when 2101cessary)

1,200

)1,00

0..-0

V




Pierre jay

Fele:cal Reserve Agent

416,000

4 10,000

250,000 to U. 5.
Charles Starek

Depuiq Federal Reserve Agent

10,000

Govt.

150,000 to U. S.
Benjamin Strong,
William Woorlward

Deputy Governor

J. P. Curtis

Secretary of Board
Counsel to aank

G. E. Gregory

r

Governor

Acting Cashier

E. R. Kenzel

Assistant Cashier

B. W. Jones

Acting Aassistant Cashier

10,000

R. H. Giles

Acting Aassistant Cashier

10,000

30000

12,000

10,000

10,000
10,000

4,200

no,

20,000

Govt.




i3)

Iiii-

g1220

Patrol of

2atdbeen

r hora

.

Geo. S. raNalr

AUK

P44'411.

Watchman

4 900

John J. Ebel=
Federal Re-

Joint custody off. R. Notes U. V. Cann

received frot Po R. Board
Joint custody of notes, etc., Harry P. Aumack

serve AaN2,2,4 a

Department

rediscounted

Joint euetody of gold deposited
Records and reports
Zeubors of Agent's Staff:

900.

Chief
Asst

(Assists

4, 000
700




25,000 Te0. 3. Oft

5,000

10,000 t°.-"-- Govt.
10,000
10,000

Direction of staff, dernrtmental
developmst, etc.
Jos.. 23. amine
Adolph J. !4n6

Capital stock records exiI
cept ledger

Auditing

5,000

credits)

k. Jefferson

Officer' Clerk Special investigations for
officers

t 5.000

en

BA Reseal
H. Hene.ric4s

Chief Clerk

Zlig,

Chief'
Cie&

3,000

Officers'

1,5,30

10,000

3,500

20,000

Asst.

4200

5,000

Asst.

4000

54000

Clerk

General auditing of bank and Seward U. Jefferson Auditor

agent's securities, records
etc.
f. D. Goodwin
kuditer also on agent** Earl
anI sabstitutoe as officer D.. A Reinbrscht
on vanit control

/

00
/ -WU




Arbi&
oztv.

MattAIRMSRA-12,ALI Pli_g0.2_17
_InApjjazzu.

fikunpF MEP WM'S 014

JAILL

The following adjustments are recommended by your Committee after careful considera-

tion and in recognition of ability that has been developed and the attention and devotion to
duties at all times displayed.
Here follows the names of the employees, the date of their
employment, the salary at which they were employed, their present salary, and the salary reaommended, together with a brief comment in each case:

Initial
alltla 12,1am,

Pre-

Pro-

Palare

pOsed
*Alqry.

Nov.16/14 Assistant $1,200

41,200

Date

of

MAE.

A. B. Fletcher

ftlelment

sent

gagagatt
41,500 Is the expert machine operator who prepares the
records of each day's
transactions for Washington.
He was hired for
this purpose, but he has
developed ability in the
Discount Department, and

has displayed willingness

and capacity in assist in

a number of other departments in the bank.
I. W. Vetere

Nov.13/14 Paying

Teller

42,250

42,250

$2,700 Mr. Waters has displayed

the ability essential

to handle the large sums
of money which pass

through his hands in a
thoroughly efficient manner. We consider him to
be a valuable man for the
work he is doing. We thlMt

the responsibility of his
position justifies the
proposed increase.
Geo. Hoehn

Jan.11/15 Assistant 01,000
Receiving

41,000

Teller

41,200 He was employed as a bookkeeper.
He is a good

all around man and each an
expert money counter that
we propose creating a
Money Department under
his charge. We feel

that the added responsi-

bilities justify the increase.

1.

R. Hettner

Jan.4/15

Note

Teller

$1,200

01,200

41,500 He has had abundant ex-

parlance in his line and
in addition is doing the
work of the city and
country collections. He
handles all receipts and
shipments of currency.




(2)

Initial

Date

Ewa

of

Bmplwamt,

Pre-

Pro-

Posit lan Salary

sent

posed

SalarY

aaleaa.

#1,000

#1,000

ed,140 Has acted as our settling
clerk at the Clearing
House;
bundles all transfers of funds, and is responsible for the preparation of all expense vouchers. He is a good Mall.

360

4 360

4

General
Clerk

John Raasch

Nov.11/14

Thomas U. Day, 3rd

Dec. 5/14 Clerk

CnNmQL.A.N.a

600 A graduate of Princeton.;
without former tanking
experience; is a man of
intelligence and has developed into a very capa-

ble clerk.

Miss B. Farstenberg

Nov.16/14 Transit
Dept.

#

780

43

900

780

Is remarkably efficient
in her line of work and

we have found her capa-

ble of carrying respon,

sibility.

William A. Ehm

Nov.17/14 Clank

4

600

600

4

720 Assists in Transit DeHe is acpartment.
curate and willing and

we expect to advance him
to more important work.

H. W. Dennington, Jr.,Ap1.28/15 Bookkeeper* 600

# 600

4 720 Although only recently
employed this man has

Shown ability and willingness to work. He is

a son of one of the directors of the Union

National Bank of Schenectady and was anxious

to get in here even at a

nominal salary for the
experience. He is a
student in the School of
Commerce , New York Uni-

verbity, and is earning
far in excess of his present salary.
John A. May

jan.15/15 General

$1,500

Bookkeeper

$1,500

42,000 He was cashier of the

Peoples National Bare: of
Potsdam, and came to us

at a reduced salary on
account of greater op-

portunity for advancement.
He is a thoroughly capable and efficient man of
excellent exnerience and
we expect to use him an
one of our examiners of
state tanks; his acquaintance and experience
in amen banks up the

state will doubtless render lam of great value
in that capacity. His

training. L :fLtted him
for important responsibilities and for develop-

ing the various depart-

ments.

We consider him

the best all around man

in the force.




(3)

Initial

Date

Ifgar
Miss E. E. Bushnell

of
bEgjayaitat

4sition. lalla

Nov.13/14 Stenog-

rapher

41,040

Present

Proposed

;alary

Salary.

41,200

41,500 Liss Bushnell undertook

Comment

the difficult task of

organizing the work in
the Stenographic Department, and has displayed

ability, earnestness in

her work and devotion to

the interests of the baerl

at all times.

We feel

that this department is
under excellent supervision, and that her wort
should be recognized by
the adjustment proposed.

L. C. Elliott(Mess)

Dec. 7/14 8tenographer
R. A. Holmes (-Miss) Nov. 23/14 Stenographer
Jean Miller (Miss) Jan.15/15 Stenographer
Miss Elizabeth Bruce
Switch-

41,200) The quality of the work
) of these employees is

41,040

41,040

4 950

41,040

4

840

4 840

4

936) made.

4

728

4 728

4

340

41,200) such that we feel this
) adjustment should be

board

Has given satisfactory
service and her ability

justified the increase,

operator

Mrs. McLaren

Nov 13/14 Secretary 41,200

41,200

41,500

James Delahanty

Jan. 28/15

4 780

4

to Goversor
4

780

900

Was emploYed on trial

with the promise that
if satisfactory he would
be paid 475. per month.

His wort justifies the
increase.

Jean A. Sullivan

Jan. 4/15 Page

4 300

Prank Soracco

Oct .16/14 Page

4

260

$ 300
4 260

510) These boys were pages
) and have developed into
Will be
* 360) messengers.
$

useful in junior clerical
work.

Harry Aumack

Oct.14/14 Clerk

4;

700

4 700

4

900

He has assisted Ur. Gann
in the Federal Reserve
Agent's work; also in
the Credit Department.
He is an exceedingly
capable and willing
worker, and has handled
his complex duties to the

entire satisfaction of

Mr. Cann.

A. J. Line

Oct.4/14 Officers' 41,500
Clerk

41,500

41,800 Mr. eLins has had entire
charge of the stock ledger and the subscription
records regarding capital

stock, also of increases

anti decreases and has con-

ducted practically all of
the correspondence re-

lating thereto, and has
had charge of the printing and issuing of all
circulars.
He is one
of the most useful
in the bank.
to this inentitlee
crease.




(4)

Initial

Date

of

Ewa.
W. D. Goodwin

lapjammt

PosilLaa SalarY

Jan.11/15 Assists
,Auditor

41,200

Present

PTO-

posed

aak.a.aIgsimsag.
41,200

#1,800 He has had seventeen years

of practical banking ex-

perience and is a little
older than the average
employee of the bank.

He was practically the
manager of the affairs of
the Fowler Estate. He
has been the Auditor's

first assistant ever

since he came with the
bank, and has been a

faithful, capab1e and efficient employee.

The

Auditor relies on him for

the care of the details

of his department. He
came to us at a very much
reduced salary, in view
of the unexpected ter-

mination of the trust of

the Fowler Estate. He
deserves the proposed ad-

justment as only a fair
recognition of the value
Of his services. We recommend that he be made

Assistant Auditor,
Downing A. Reinbrecht Apl. 5/15

$1,000
;-1:- 0

t.

$1,000

41,200 Was employed as a bockkaoper.
By reason of

his superior ability has

1-7 14

17,d t. been made an assistant
to the Auditor.




,

?he relieving

usiossata aft reememes4 by your Committee after WOW

SOMAdOlii-

tion and to rvcocnitlea of ability that itilliMM0140Yrcioped snd the atteuties ad *Motion
to
duties at aLi times displayed.
Mere fellows as MOWN Of the employees', the date
of

their

aftploymeat, the salary at unleh they wart: evloyed, their present 6.1111W$ end the
eA.iery res14,mondal, tocotharsIth a-brier elinehil In each cam&

tat
Akt,,,XX

A; e; 014Wher

Nov18/14 Alatetent 3141490

Pre.

lost

Pree,

loped

WW2 Aka=
44.800

GaiMai
elt#00 is the =pile usahlaiope
rater WM prozArfs*

recasts et mob. 4W*

truassealaas for ztashixoton.
Re was hired for
this purpose, but he has
developed ability in the

Disct

ppartemut, and

.44yei villinenms

Tof14.53

AtY in assist la

411, or other depart-

la the basks

Le J. liters

hor.liVit Paying

teller

01,

Am at,

_Ago has Alepl*Fea

the abiliti

to handle the large ewe
low which pore

his heads in a

offialsal ossnNo eaustler him to
a Ira.Leabie am for the
is tiolass lie *him

sr.

Jansil/ILS Amestant 4.1.000
toscsirthe

41,00,(X)

toiler

osaibility at his
,lition justifies the
repeat& twesse.
#1,20q Sawa emPlInratatITkeepers
01 round naa oa1 math au
t money coaater that
ooSsathe a
;- 'toast under
his Sharon. ',4a yeal
Vat the so,del osavosaiA

baliOisa justify the ism
creases
lioto

IsLiar

*1000

03040 ill.) has had abundant 06.

perigee, is his line Oad
in witilLioa is doing the
weft of the eity and
4001s1M1 collect/One.

Rs

ismalso all recelpte and
Ohdreate of earremir.




tel
UAW* akiliZ

4raIcleat

7,650

General
Clerk

$10000

sent
5,650
$16000

21*plowed

imam,

ii0/41Z
6,700
#1,140

Has motet no our settling
clerk a* the Clearing
nouve;
hamdies ell tuts*

fore of Mods and is re*
sponsible for the prepara-

tion of ail ervease voudh..
WO.

/home O4 Day, 3rd

Lies 3.

bor

360

# 360

# 101

Peeo 11116 Clerk

TOO

*

16/14 Ilanatt
Catt.4.

a good MIII4

all A Phduats of Itetneetoni
elthent termer ban4ler
ost,rtenee, is a loan of
intelLicanoe and ban dew
'eloped in
It:1y caw.
ble clerks
* 900 Is Ineoricably efficient

Ss kor line or work and

so Iwo fotoj nor gape-

Us or carrylsw! mesas-

Otittlity
/Mime A. Ate

alowelf/201

Clerk

#

600

* 600

# ?to OSOiliS is TimMOMM DoisfliSs4. MO lo seOurate amd
tura

1116 wont to advance hint
to morn boportant work.

* 600

WO WO Pennine:ton, 44,4,Aplii2e/15

TAO Although only recently
employed thle man has

shown ability and will-

itwolese to works He le

a son of om or the di-

victors of, the Union
*Atonal aloft et 3cheneotedy and 'one ansiese
to cot to hove even at $I
nominal salary tor tho
experiemee.
3e. is a
etuaent to the School of
Commerce , new fork Uni-

versity, and is essoise
tar in excess of his ure.
coat salary's
Joirs A. 'zieW

Jan.13/18 GesteNil

64000

allOMMNIPer

434500

"000 Monne °ashler of the

-

36,tional 3aW of
reinana, and arZIO to us
at reduced ol:Ary on

amount of greater op..
tmattr for adranSineas
to a thoro4Ohly 6$106.,

We an0 offlotent mum Of
excellent ompertenoe and
we expect to ere him ea

one or our seeniners of
state beide; his ae-

qftiatenee sed foxparleMee

in feel' boast ap the
state will doubtless rem.
der is of groat Value
Ls
ososoilw.iii
training has fitted him
for itportant responsi-

bilities
1,t-tp
.

3nd ter (1011,10p.

veriees

0560:1411.0P

the beet 341 anew nen

in the tones




lett-

Doti

MIL
MANI Eik Sit SmOblill

of

24374.4-41*.

Presant

10,490
411040

1r,1_90

tag

'44i.ahklzu

nov.13114 Stench-

ra her

t1,200

Prow
Pose&

44,44z,

.411291111,

1;:1,780

04010 ti4e Bushnell umocrtook

the difficult task of

organising thw work Lw

the Oterogruphic Dap"sent* sal has displayed

ability, earnestness In

her we* Ane tievotisa to
the interests of the bunk

at all times

wit fool

that this delartwest Is
under eminent sever-

vision, and Vlat her Oork
Should be reloNmised bw

the adjustment proposed.

L. 0. Elltott(Litee)

Deo* ,/44 Asses*

A. A. MUMS (Mbee)

am 23/14

Jew Mbar WINO

$4040

#1,040

930

44040

840

0$40

72S

$ Tie

nav.14/16 Vecrotagy 01000
I. Gortunsol
Jans19/15
Tao

1, SOO

rsphQr

Ja$115/16 Nome -

also Elisabeth armee 0043/14
Mrs. Oa fAran

Zee De4abantw

robs,
Mophar

1114tch-

board
spemator

6 Irso

41,200) The totality at the work
) of tamps smplOVess la

44,2001 $eek that as Ossi thls
isijosessmi shssld be

# 954) rade.
4

84n Has givem satisfastort
service sed her ability
justified the luereasei

4 BOO

6 too Was employed on trial
with the premise that

if satisfootogy be 'Mai

be paid ON per month.

Ale wort justifies the
Luerease.

lean A* btAtn

J. 4/15 ftge

Prank Sairases)

Ost.16/14 Paps

# 11$0) these boys Imre pope

eel hare develOped into
# 360,moseencers. W111 14

useful in junior clerical

out
Ram Aiwa*

# 000 4e has assisted Z. Num

OCU14/21 CierR

is the fedora/ Reserve
Adsmes work; ease in
1010 Credit 'eArtmont,
AO to an exceadluel7

eapable ono willies

worker, end hae handled
h1e complex duties to the

entire satisfaction of

lir. Calm.
A. 41, 4tme

Octal/id °Mee
Clerk

Otorxi

i1,50O

$1,900

Lies halt h

ftttro

*horse of the stoci, ledger and the oubscripttce
roamed

ree-Ardiag 3%1'4341

stock, *leo of teareases

and /leers/sees eat he* sea,
praet1oall7 oat of
oCorres; ordenae re-

lig thereto, ana bac
bud whereto Of the prise-

tms and, Iseutes of all
eirculAre.
me to see

of the -oet useful Ma
la W., bank,
Ma Aram
tlim to this i
crease.




(4)

Init-

Date

Lai

St

boa
IN De 406.1611

POO.
*ems

POW.

possi

Supet

Wan Alm Waft
20,070
19 8PS

lalowted.
Jan.11/14

mistes ol:210

#10110

allfloo as his %as twormsess

oressisat %Oft OSpowileihit End ie UM*
older than the eifeinfi

Anditef

implepee of the bank.

no Oas piestietaly the
manager!f the aftairs Cf
the Puffier Rotate.
bus been the Auditor's

first asoietaat ever

since he care with the
bank, and hos b.qaft
letitistal. capable eat Ob.

ft tent explwee

'Che

/Mater relive on him for
the nave of tato &static
or Me afitif&rtrent«

Lie

serbs to um at a yew auft
reduce& 04377, in view
of the uneereeted to*m

ablation of the trust of
the ?awls, '.4tate.

Re

deserves the ProVon44 md-

justroat as only Wit
rooemitiela of the value
o Woo
Of hie aenieee
Omani that be be role
Asoietent Auditor,

Owning As oeinbrocht Apl. 0/15

#4000

04000244 400 employed so a beakkeeper.

Ay mason of

hle waportorebilltY

been made an aeoletant

to the Audits!.

22,028
7ncrease

22,278

27,475
-5,T9E3

Office Correspondence
Governor Strong

To

Fro'

FEDERAL RESERVE
BANK OF NEW YORK

Date

July 1A, 1915.

Subject: 1144/4&t.:0,111-e

Kenzel
-

'4;r4st31::Ze23'"'r

The attached marked copies of the Industrial News, issues of

61

%44 '7

e4VVbotA

and July 10th, were received by the undersigned on the 15th instant, having been
delivered at the bank to Mr. McCabe for me by Mr. Delahunty, the editor of the
publication.

In each issue there is an article relating to the Federal reserve banks

and the action of ex-Representative H. R. Fowler of Illinois in bringing certain
matters to the attention of the Federal Reserve Board.
It may be well to note for reference that Mr. Delahunty, the editor of
this publication, has called at the bank a number of times soliciting the patronage of the bank on behalf of the Knickerbocker Lithographing Co., 18 Oak Street,
this city, in the matter of printing and providing our stationery.
Mr. Delahunty has made representations to the undersigned and also to

Mr. Hendricks, who has charge of our purchases, that he is on very intimate terms
with the President of the United States, the Secretary of the Treasury, the Comptroller of the Currency, and the Secretary of the Federal Reserve Board, and that

he rendered valuable political services for Mr. Wilson in his campaign for governorship in New Jersey and that he also rendered valuable services for some of the above

named gentlemen in the last presidential campaign.
Mr. Delahunt9-, on each occasion that he solicited the bank's work in the

matter Of stationery, was told that we had no present need for their services but

we would keep the matter in mind should occasion arise when we needed some lithograph work.

IMK/LCE




Mis,37

Pffice Correspondence

FEDERAL RESERVE
BANK OF NEW YORK

Date

lir. Jay

-m

June 23, 1916.

Acceptances under Brown Bros.
Federal Reserve Bank of New York and the
other Federal reserve banks at the close
of business June 22, 1916.

Sulakrt:
and-Bbnbrighttrediteheld by the

E.ii. Kenzel.

Held by
Federal Reserve Bink
of New York

American Exchange National Bank
Bank of New York
Chase National Bank
Irving National Bank
Mechanics & Netals National Bank
National Bank of Commerce
Broadway Trust Co.

Bank of America
Bankers Trust Co.
Brawn Bros.
Columbia Trust Co.
J. P. Morgan & Co.
J. & W. Seligman & Co.

Brown Bros.
4

287,500
268,750
750,000

Bonbright
4 297,778.73
628,333.34
425,000.00

547,500
1,170,000
249,999.96
185,000
867,500
578,750
331,250
818,750
500,000

339,522.27

12,500.00

46,305,000

41,953,134.35

565,000
125,000

674,722.24
1,033,333.36

20,000

921,666.64

Held by

other Federal reserve banks
American Exchange National Bank
Chase 14ational Bank

Irving

National Bank

Bank of New York
Mechanics & Metals National Bank
National Bank of Commerce

608,250
327,500
560,000

Bankers Trust Co.
Bank of America
Columbia Trust Co.

260,000
268,015
444,750

Brown Bros.

151,250
850.940

J. P. Morgan & Co.

04,179,765

GRAND TOTAL

410,484,765.00

1,049,055.61

43,728,777.85

$5,681,912.20

5,681.912.20

416,166,677.20

This is less than half of the acceptances outstanding under these

three credits, which now amount to 45,000,000.

ERN/ PE




FEDERAL RESERVE BANK
OF NEW YORK
414

Benjamin Strong, Jr., Esq.,
The Lewiston,
Estes .'ark, Colo.

Dear Ir. Strong,

I was exceedingly glad to receive your letter of August 5th and

-ieiately took up with our friend Ir. Hoffman their ailing mailing department.

He promised to have an adjustment made at once so that you will get

your papers promptly.

He seemed to stand being five days behind the "Times"

well but your reference to their not keeping up with the ,ost seemed
Ppretty

to get under his skin.

I am glad that my little weekly bulletins on bills interest you.
. James Brown had luncheon yesterday with kir. Treman and 14r. Curtis in the

course of which he told them that their Bank of 2rance ' 20,000,000. credit
would not be renewed but that,after a lapse of one week from the first maturities of the last renewal bills under that credit, bills drawn under a
new credit would be available.

He did not state the amount of the new

credit but lir. Treman inferred it would be about

20,000,000.

Mr. Brown also told them that, while he was not in a position to

make any definite stateent, plans were maturing for another and much larger
2rench credit, the details of which he would give us in due course.
These and the numerous other smaller credits all providing for
several renewals and constituting by far the greater bulk of the new acceptance business and



r. darburg's attitude with regard to finance bills, make

FEDERAL RESERVE BANK OF NEW YORK

a

,Anjamin Strong, Jr.

3

.

8/lo/16.

me rather apprehensive of what attitude the Board might take if a large volume
of it should come on the market through offerings and sales by member banks of
their own acceptances under these credits.
A few weeks ago when Li'. Warburg last discussed these bills with us,

he was of the opinion that the Federal reserve banks had gone about far enough
in the purchase of this class of paper especially if the Brown credit was to be
extended or renewed in any way although he expressed himself as realizing that,
if the prime member banks offered their bills accepted under such credits, we
could not draw the line too fine.

I sincerely wish that you could be with us this fall to give a little
adjusting touch that I feel will be required and will appreciate very much any
suggestion from you as to the best way to meet such emergency, if one should
arise.

In one of your letters to LIT. Sailer, you referred to the possible

I am very certain that

accumulation of gold by our friends down the street.

your surmise is correct and that the new gold which showed in the bank statement
after the bulge in money a month ago came from their vaults.

I have since been

confirmed in my belief by :Li'. Joyce's reply when I suggested to him that we

might use more of their bullion receipts.

He told me that he would be very glad

to let us have some after their own supply of gold had been replenished.
2reman is a trump and is working like a major.

He is keenly in-

terested in the application of the new collection system and the "Short analysis"
to country bankers and has had some good heart-to-heart talks from the standpoint
of a country member banker with some of the kickers who have visited us and he
has written a great many first-class letters to others.




I shall reserve a little news for my space

in the bulletin to-night

<ESERVE BANK OF NEW YORK

3enjamin Strong, Jr., Esq.

8/10/16.

and so, with best regards, I shall close this epistle and remain,




Sincerely yours,

S.

FEDERAL RESERVE BANK
OF NEW YORK
August 29, 1916.

My dear Governor Strong:
Since the last weekly bulletin I have talked with

lary

if
Bollinger of the Guaranty Trust Company regarding their credit to
the Banque Russo-Asiatique,which I mentioned in the bulletin to
you the week before last.

Owing to Er. Bollinger's absence on

vacation we were not correctly nor fully informed regarding this
credit which, he tells me, was negotiated for by them during May and
June of 1915 in a series of letters and cables.

Under the terms arranged, the Trust Company agreed to loan
to the Banque Russo-Asiatique five million dollars to cover exports
of cotton and other merchandise, to be repaid within eighteen months
from date of original acceptances under the credit, the Trust Company
to control the documents.

Owing to various causes, chief among them

being the lack of bottoms for export during 1915, the credit was not
availed of until January 3, 1916, after the cotton shipping time had
gone by, and the bills then drawn covered exports of powder.
The bills which we bought in the market are the second renewals of the January acceptances.

I discussed with NT. Bollinger

the eligibility of renewal bills under regulation "S", and he explained
that their arrangement with the Banque Russo-Asiatique antedated the
Board's regulation regarding renewal bills; also that the period up to




c'EDERAL RESERVE BANK OF NEW YORK

2

Governor Strong

8/29/16

1A111-6

eighteen months provided for the repayment of the loanAto enable the
Banque Russo-Asiatique to repay within that time, when the conditions
of exchange should make it convenient.
Both Er. Treman and Er. Jay have given consideration to these

bills, and we are all of the opinion that they are eligible inasmuch as
the limit of eighteen months within which they must be paid is not an
indefinite period and such period was agreed upon at the time of the
opening of the credit as a condition incidental to the exportations involved; also, in view of the exchange situation, that period was reasonable.

The credit has not been fully availed of, and I think that we
and the other Federal reserve banks have about all the bills under it
that the Guaranty Trust Company has sold.

You will be interested, I am sure, in the following which was
told to me by Mr. Farrell of Smithers & Company yesterday,in confidence
but with permission to advise you.
Brown Bros. are arranging to have the Egyptian cotton crop
financed by dollar credits, and Smithers is to quote rates good for
five days for the bills to arrive.

Brown will cable this quotation to

the Bank of Egypt which, I understand, will draw the bills.
I understand that the whole list of eligible American acceptors has been forwarded and that the bills will be drawn on a great
variety of names; also that there will be no renewals, just straight
bills.

The crop exported from Egypt during the past several years,
up to and including 1915, was valued at from one hundred million to
one hundred and twenty-five million dollars, or from nineteen million
to twenty-five million pounds, Egyptian.



.0ERAL RESERVE BANK OF NEW YORK

.....

Governor Strong

8/29/16

Plans are also making for the financing of practically the entire exports of American cotton on dollar credits this year, so that it

would seem that we shall have plenty of bills a little later.
The first lot against Egyptian cotton is expected to arrive
in September, their cotton shipping season being about the same as
ours.

Er. Treman read us the paragraph from your letter received
yesterday morning, and I am glad indeed to hear of your improvement and
to learn that you will soon be able to get about more actively and enjoy
the sports for which there must be such abundant facilities in the
beautiful region in which you are staying.
Very truly yours,

stant Cashier.

Benjamin Strong, Esq.,
"The Lewiston,"
Estes Park, Colorado.




411:,.._:Appor
EQUITABLE BUILDING
NEW YORK

September 11, 1916.
Dear Er. Strong:

I was very glad to receive your letter of September 2d, and

have delayed replying to it until I could send you a copy of the memorandum I prepared for Mr. Jay on the operation of the Gold Settlement
Fund as applied to this bank.

He is in Washington to-day, and has

taken with him a copy of the memorandum, and is going to take the question up with the board.

I prepared as forceful an argument as I could

in the limited time I had to work, and purposely avoided discussing the

larger question of the distribution of the new gold that has been brought
into the country since the inauguration of the Gold Settlement Fund, as

from data and statistics available in that regard large items would have
to be estimated with no probability of accuracy, and the result might be
very misleading and open up endless argument.
concrete

position of New York as a center.

I, therefore, kept to the
The following figures which

I dug out may interest you.

From May 21, 1915, to August 18, 1916, excess of imports over
exports of gold was 4549,000,000.

The increase of gold in circulation

from May 1, 1915, to August 1, 1916, was 4445,000,000.

Increase in

gold held by Federal reserve agents against notes from May 21, 1915, to

September 2, 1916, was 4126,000,000; and the increase in gold held by
the Federal reserve banks on May 19, 1915, to September 1, 1916, was
i0.08,000,000.

The estimated increase in amount of gold held by all

national banks from May 1, 1915, to June 30, 1916, was 4154,000,000.




-2-

Mr. Strong

9/11/16.

This amount has to be estimated because the Comptroller's report groups

0

all clearing house certificates as one total and does not separate those
representing gold and those representing silver and legals.

We have

estimated that 50% of the clearing house certificates represent gold,
but that is arbitrary and may be altogether wrong.
The estimated figures of 4154,000,000. held by all of the
national banks is an increase of approximately 50% within the period.
If the amount held by'State banks has increased proportionately during
the same period their increase would equal about one hundred and forty
million to one hundred and ,fifty million dollars.

You will see that

these known and estimated increases would amount from five hundred and
thirty to five hundred and forty million dollars, which is more than the
increased gold in circulation, and almost as much as the total increase

through importations, and I think there must be something radically wrong
in the estimates.

The two factors that have not been considered in the above are
the domestic production of new gold, and how much foreign gold coin held

by banks figures in their increased gold holdings in the statement to the
Comptroller of June 30, 1916.

The situation outlined in my memorandum

to Er. Jay seems very serious indeed, and I hope that you will approve
what I have said.

The new Brown Brothers' French credit will become operative

tomorrow, and Er. Curtis is in communication with Er. James Brown and
will ask them for a copy of the new agreement for our confidential files.
I learned from other sources that there are four new acceptors, i. e.,
the National City Bank, Lazard Freres, Alexander Brown & Sons of Baltimore, and the Ti. S. Mortgage & Trust Company, New York.



The latter,

-3-

Mr. Strong

I understand, will take up their own bills.

9/11/16.

Lazard has filed a letter

with us so that their bills are now eligible if indorsed by a member
bank, and they are considering filing a statement with us to make their
bills fully eligible.

Smithers thinks they will do so when Blumenthal

gets back.

We had a letter from the Federal Reserve Board dated the 8th
instant advising that the President had signed the amendments on September 7th and that they are, therefore, law, but that through error the
Conference Committee omitted the following words:
"Except by authority of the Federal Reserve Board,
under such general regulations as said board may
prescribe, but not to exceed the capital stock and
surplus of such bank, and such regulations shall apply to all banks alike, regardless of the amount of
capital stock and surplus,"

which are the last six lines of the second paragraph appearing on page
440 of the Bulletin of September 1st.

This error was discovered by the

board and it endeavored to have it corrected but the time was too short,

and they, therefore, advise that pending correction by next Congress the
board cannot grant new requests from member banks for permission to accept 100% under the power now eliminated

from the law.

I am much obliged for the suggestion about Hartley Withers'

book "Money Changing", and have sent for it and will take it with me when
I leave to-morrow for a vacation.

with much interest and profit.
matter

I have read some of his other works

He has a way of presenting his

that is much more intelligible to the average reader than many

writers on technical subjects, which I think is probably due to his early
training as a newspaper man.




-4-

Mr. Strong

9/11/16.

I enclose also a little pamphlet on the "Credit of Austria-

Hungary, France, Germany, Great Britain and Russia During Two Years of
War," which was issued in great numbers the day after the 4250,000,000.
British loan was announced.

I do not know that copy of it has pene-

trated yet to Colorado but it demonstrates thelatiduous nature of the
work of the propaganda.

I am leaving to-morrow for a motor trip up through the White
Mountains.

I dislike to be away from the bank very much at this time,

but they all seem to think I must take a vacation.

I shall not be far

away at any time and will be available for the recall, which I hope will
be put into operation should there be the slightest occasion for it.
hope that when I return there will be a whole sheaf

I

of good news from

you.

With kindest regards to you, and remembrance to Mrs. McLaren,
I am,

Sincerely yours,

Benjamin Strong, Esq.,
Estes Park,
Colorado.

ERK/I0.
Enos.




'ALIMICAN EXCHANGE

OPTIONAL NOTE SCHEME.

The British government to offer to, sell Optional Notes in lots up to
a total of 41,000,0,D0 00Qat an exchange of not less than 4-:76 for

LI, and having a currency of not more than 2 years
The rate of Exchange for the present to be 4.78,at which, with higher
insurance and freight, it about pays you to take sovereigns from the Bank
of England. The rate of Ecahange may however be raised but not lowered
Sal

Te denomination of the Notes to beidby 4I0,000,or

at Exchange 4,78

L2.092. The purpose of the Note,viz. to maintain exchange, is shown
on its face.

The buyer would have the option to subscribe either in dollars or Sterling
nd the holder to ask for payment either in Dollars or Sterling. If at the
time of purchase Exchange were above 4.78 the Note would be paid for in

Dollars; if below 4.78 in Sterling. If at Maturity Exchange were below
4.78 payment would be asked for in Dollars. if above 4.78 in Sterling_

Vohile the note would be a Dollar Note payable in Dollars, it could, by

sale as an Exchange instrument, at any moment be turned into a Sterling
Note payable in Sterling, thus adding greatly to its negotiability.
The first lot to be offered might be for 4300,000,000. It could be

divided into two categories,short and long,-4150,000,000 of each,
In the "short" category would be

50,000,000

3 months at say 3%

450,000,000

6 ditto

3e%

450,000,000

9 ditto

3Z%

And in the "long",
12 ditto

4%

450,000,000

16 ditto

4i%

450,000,000

24 ditto

5%

450,000,000




Any one line of the "short" to be sold only with an equal amount of the
"long";

but the "long" could be sold independently;

The Notes would be offered on a discount basis, and at rates approximating
to the value of money in New York.

Full power would, however, be taken

to alter the rates of discount when considered desirable.

The Notes would

be on sale daily.

An additional profit to buyers would be provided in the rate of Exchange.

When Exchange was below 4.78 buyers would of course elect to pay in
Sterling.

The profit would increase with every fall in Exchange, which

would stimulate the demand for the Notes, and therefore for Sterling to
buy them, and thus tend to again raise Exchange.

Any fall in Exchange would have more effect on the yield of a short Note
than on a long.

On the other hand the long Note stands a better chance

of maturing when the War is over, by when the Gold point will presumably
have reverted to 4.84.

The discount in hand also increases the yield of

the long Note.

The British Treasury to appoint an Agent or Agents in New York for the
issue and payment of the Notes,

But to facilitate business Sterling

would be received by the Bank of England, which would cable to the
indicated Agent to deliver the Notes in New York.

Against maturity of the Notes a reserve of about one third of the Notes
outstanding would be maintained in New York,to consist of a proportion
of gold, a proportion of money at call, and a proportion of American
securities to be sold as required.

A weekly statement to be published in New York showing the amount and
usance of the Notes outstanding, and the amount and composition of the
reserve.



-3-

The proceeds of the Notes sold for Sterling could be used
for the purchase
of American securities to be placed in the reserve in New York.

As the

Notes are issued at New York money rates there should be no loss
in
interest in holding the securities pending sale.

During the next few months we have to meet in

America

liabilities of several hundred millions Sterling on balance.
we can pay in Gold and by the sale of American securities,
some extent been done.

Ultimately

as has to

Apart from the gold contributions of the Allies

and our own reserves, the British Empire now produces W0,000,000 of gold
per annum;

while our holding of American securities is still very large.

What we require is time to mobilize our Gold and American securities.
This we can gain by
let.

Borrowing in America on Bonds, which has already been dcbne

and probably cannot, anyhow for some time, be repeated.

2nd,

Borrowing for short periods on Bills or Notes in New York, where
there is a large field, which the imports of Gold are steadily
making larger.

3rd.

Borrowing, or receiving on deposit, in LondonlAmerican funds totbe
attracted by the higher rate of interest, provided there is confidence in the future of Exchange.

The Scheme is an attempt to deql with the situation as a
comprehensive whole, and on a scale calculated to produce confidence, which
is of the utmost importance.

With the knowledge that one billion Dollars of Optional
Notes are available at an Exchange of not less than 4.78, confidence in the
future of Exchange should be assured for some time to come.

With confidence

restored the means would be afforded for the rapid and safe flow of money




-4-

from New York to London, from where it is relatively cheap to where it is
relatively dear, and its equally safe return.
Through this issue of Optional Notes, a machine for adjusting
Exchange would be set up.

It would operate openly and automatically,

always tending to produce equilibrium.

We would have complete control of the

brakes on the machine, represented by changes in the rate of discount,

in the

classification of the Notes, and in the upward movement in Exchange.

But

it is America that would really drive the machine.
the Notes;

We only offer to sell

her desire to do business would compel America to buy them, as

otherwise she would find her exports restricted through lack of cover.

The amount and composition of the reserve in New York would
indicate the means by which the Notes would be liquidated.

This and the

adaptability of the Notes for Exchange purposes at any moment should make
them popular in New York, where money is very cheap and where gold imports
are making it still cheaper.

The provisions of the Federal Reserve Act have also given
Banks which are Agents for other Banks large temporary deposits.

To a

certain extent within twelve months, and wholly within two years, these
deposits must under the Act be transferred to the Federal Bank Reserve,
or to the Banks' own vaults.

Thus there is a great deal of money looking

out for short liquid employment such as our Notes would afford.

A recent ruling by the Comptroller of Currency is to the effect
that National Banks are not restricted in making loans under the National

Bank Act to a maximum of 107 of their capital and surplus when the borrower
is a Government.

This is all in favor of a direct Government Note such as the

Scheme proposes.

The annexed table shows the approximate yield of the Notes with
Exchange at, for example, 4.74.

Written Sept. Oct. 1915




JFD

-4-

from New York to London, from where it is relatively cheap to where it is
relatively dear, and its equally safe return.
Through this issue of Optional Notes, a machine for adjusting
Exchange would be set up.

It would operate openly and automatically,

always tending to produce equilibrium.

We would have complete control of the

brakes on the machine, represented by changes in the rate of discount, in the
classification of the Notes, and in the upward movement in Exchange.
it is America that would really drive the machine.
the Notes;

But

We only offer to sell

her desire to do business would compel America to buy them, as

otherwise she would find her exports restricted through lack of cover.

The amount and composition of the reserve in New York would
indicate the means by which the Notes would be liquidated.

This and the

adaptability of the Notes for Exchange purposes at any moment should make
them popular in New York, where money is very cheap and where gold imports
are making it still cheaper.

The provisions of the Federal Reserve Act have also given
Banks which are Agents for other Banks large temporary deposits.

To a

certain extent within twelve months, and wholly within two years, these
deposits mast under the Act be transferred to the Federal Bank Reserve,
or to the Banks' own vaults.
out for short

liquid

Thus there is a great deal of money looking

employment such as our Notes would afford.

A recent ruling by the Comptroller of Currency is to the effect
that National Banks are not restricted in making loans under the National

Bank Act to a maximum of 10% of their capital and surplus when the borrower
is a Government.

This is all in favor of a direct Government Note such as the

Scheme proposes.

The annexed table shows the approximate yield of the Notes with
Exchange at, for example, 4.74.

Written Sept. Oct. 1915




JED

-5-

If Exchange were at 4.74, the difference between that rate and 4.78 is
.84%, which would make the actual yield on Optional Notes at the discount
rates suggested in the Scheme as follows:
Difference in Exchange.

Discount

Yield.

Short
.84 x 4

3 mos.

3.3E6 p.a.

3%

6.36% p.a.

6

-

.84 x 2

1.68% p.a.

3%

5.18% p.a.

9

-

.84 x l

1.26% p.a.

3%

3% p.a.

12 mos.

.84 x 1

.84% p.a.

4%

4.84% p.a.

18

-

.84 xl--2

.63% p.a.

24

-

.84 x

.42% p.a.

Long

5.10% p.a.

5.42% p.a.

5%

(It is a question whether the 3 mos discount rate might not be 2i%)
The yield, especially on the long Notes, is really more
than the above, as, the Notes being on a discount hasis, the interest is
paid in advance.

It is however only the discount rate that would be

borne by the Government.

The long Notes, and particularly the two year Note,

have an additional attraction in that they may mature after the War is
over, when Exchange would likely have risen to about the

t.' ;';e=War

point of 4.84, thus giving an additional profit of over 1%.




Gold

for Governor strong.

-

FEDERAL RESERVE

Correspondence

BANK OF NEW YORK"

Date

Sept. q, 1q16.

Subject:_gseration of the Geld Settle-

.Jay

ment Fund as Applied to the

. B.Kenzel,

;

:

-

The operation of the Gold Settlement Fund as applied to this bank
requires us to settle in gold, balanoes due to other Federal reserve

barks

built up with us by their remittances of New York exchange, in payment for

which we receive practically-nothing but silver and legal tender note.

Since

the inauguration of the Gold 4ettlement Fund in May, 1916, up through the settlement of Wednesday, September 6th, we have lost to the fund $182,000,000. of

gold, And at the cloue of business that day held legal and silver certificates
amounting to 424,000,000.
It has been possible for us to provide the

gold

Wherewith to make

settlement without depleting our own gold only through the courtesy and cooperation of some of our large member banks and others in New York who have given us
of their gold in exchange for silver and legals or our cashier's checks,

which,

when settled through the clearing house, we were able to pay in silver or beindefinitely
gals, but it is obvious that we cennot continue/to get more in this way or depend upon it even for a short period.

This enormous

drain of gold

through

us from the banks and bankers in New York City gives rise to serious thought
as to where a continuance

of

this procees will lead us, and what conditions

will confront us when gold may be required in volume for export.
City is the principal reserve center of the country.
amount of recent importations of gold have come.

New York

To it naturally a great

Foreign balances have been

built up in New York both through credits and oollections.

When the time

comes for those balances to be withdrawn the banks in New York and the reserve
bank particularly must be in a position to furnish gold freely, otherwise our
position as an important

world

financial center will be seriously impaired and

the confidence that has been created by the establishment of the Federal Reserve System will be dissipated.



Co-

0.'hice Correspondence

FEDERAL RESERVE
BANK OF NEW YORK

Date

To

Subject:

From
-2 -

During the period from May 15, 1915, to September 2, 1916, the
clearing house banks of the City of New York have gained in gold 435,000,000.,
their total holdings September 2d amounting to 4315,000,000.

During the same

period silver and legal tender notes have decreased only 46,000,000, their
holdings of these kinds of money on September 2, 1916, being $130,000,000.
During the same period their net deposits have grown from 42,000,000,000. to

43,0004000,000, an increase in net deposits of 4910,000,000, and excess reserves have decreased 455,000,000. to a total held on September 2, 1916, of

$113,000,000., and to -day's clearing house

statement shows actual excess

re-

serve of only 469,000,000.

The increased net deposits in

clearing house banks of New York ap-

proximate one half of the increase in gross deposits of all the national

in

the United States during the same period.

The figures

of all the national banks are not readily available.

of the

banks

net deposits

The increase during the

same period in gold held by all of the national banks, estimated from the
Comptroller's reports, is 4154,000,000.

The combined figures on all of the state banks in the country for
June, 1916, are not yet available for comparison with their figures of June,

1915, but it is clear from the above that the increase in gold holdings by

the national

banks throughout the country is mach greater in proportion to

their increased deposits than the increase in gold

held

by the New York Clear-

ing House banks in proportion to their increased net deposits.

The Federal reserve bank in New York during the period from May
21, 1915, to September 2, 1916, has increased its gold holdings by $58,000,000.

againstincrease of net deposits due member banks and the United States Govern-




Office Correspondence

FEDERAL RESERVE
BANK OF NEW YORK

Date
Subject

Tc
From
.00,

-3-

ment during the same period of 4i165,000,000.,

and the gold held by the Feder-

al reserve agent in New York against Federal reserve notes has increased
during the same period by $43,000,000.

Of course the Federal reserve bank

cannot impound gold in excess

of 102% of its reserves except through the issue of Federal reserve notes,

but if it had not settled in gold for the balances of exchange created in
favor of other Federal reserve banks, or. if the Federal reserve banks had

not accumulated those balances for settlement by withdrawals of currency
from New York to the interior, the gold position of all of the banks in

Sew York might have

been much stronger,and if transfers of currency to the

Interior had been required in volume equal to

the

New York through the Gold Settlement Fund, I.

e., *182,000,000., every dol-

transfers of gold from

lar of legal tender and silver notes held by the New York Clearing House

banks might

have been shipped and the New York bank's reserves in vault

would have been all gold and still

leave a

margin of *52,000,000. of gold

that could have been impounded against Federal

reserve

notes by the Feder-

al reserve bank in New York.

You will remember that the Executive Committee of the Conference
of Governors on August 10, 1915, adopted

the following resolutions

"RESOLVED that should any Federal reserve beak accumulate
a large amount of silver certificates through dealings in
domestic exchange by other Federal reserve banks, on notice,
such beak or banks shall cease such dealings in exchange."
On last Saturday, and Tuesday and Wednesday of this

week we were

paid credit balances at the clearing house amounting to approximately
4;40,000,000., of which about iig8,000,000. were silver and legal tenders,

and on Wednesday of this



week showed net balance due to the

other Federal

sc-37

Office Correspondence

FEDERAL RESERVE
BANK OF NEW YORK

Date
Subject:

To

From

-4-

reserve banks of over *30,000,000. ,largely accamaipted through their dealings

in exchange, and although we withheld from settlement, by transfers to investment accounts and otherwise, more than 410,000,000., we lost in gold on
settlement and through transfers more than 425,000,000.

Aside from the fundamental unsoundness economically of our position
in being required to pay in gold for items that we cannot collect in gold our
situation is further aggravated by the practice of other Federal reserve banks
in purchasing New York exchange or taking New York exchange for immediate
credit at par, which is equivalent to a purchase, when we could not purchase

exchange on them if we wished it because it is not available in New York, and

while we,

conforming to sound banking practice, do not take items on other

cities for Immediate credit.
It may be argued that in buying or in taking New York exchange from
their members for immediate credit that they are only granting to their members
the facilities of the system in providing them an easy means of effecting needed

transfers of currency to'the interior without the risk and expense of currency
shipments.

But the ordinary need for currency in the interior is not for

gold but for small bills for general circulation, payroll and similar purposes.

This has been

demonstrated within the past few weeks by requests for shipment

of small bills to other Federal reserve bAnkR, and the large demand that we

have had in our district from our member banks for shipment of bills of small
denominations.

During this period practically all of the large banks in this

city with out-of-town correspondents have also shipped their available supply
of small bills and have come to us for additional supplies of small silver and
legals as well as Pederal reserve notes.



This small currency has been actually

fice correspondence

FEDERAL RESERVE
BANK OF NEW YORK

Date

Subject:

-5-

eshipped by us and other New York banks, but the balence in the Gold Settlement Fend September lot was ',104,000,000., a decrease of only $6,0eu-000.

from the previous week, but an increase over the month previous, i. e.,

July e8th, when the balance was

0102,000,000., which month has covered prac-

tically the entire seasonal movement of currency to the interior.

It does not seem that the comparatively trifling advantage to individual banks in the interior Should be alloeed to outweigh the great dis-

advantage to the banks en

the principal reserve

center of the country and

through weakening their position to the system as a whole.

Primarily I believe that we should not be required to settle exchange balances in gold,

Secondly, I believe that other Federal reserve banks should net
be permitted to create balames with us arising from purchases of exchange
on New York unless those balences be left with us until withdrawn through
_

like process, i. e., salp-of their drafts on us, and farther, that they
should not be permittee to 'receive or accept for deposit or otherwise exchange on New York excepting on a deferred time of credit basis not less
than the deferred time of credit basis upon which we would accept items

payable in the principal cities of their

ERK/IWB.




districts.

FEDERAL RESERVE BANK
OF NEW YORK
.

ovember 11, 1916.

Dear Mr. Strong:

I am enclosing copy of the correspondence which passed
between the National City Bank and the Federal Reserve Board in regard to finance bills and the interpretation of the law and regulations regarding bankers' acceptances which Mr. Wall of the National
City Company handed to me late last night.

I wonder if it will occur to you that Governor Harding's
letter of October 9th accepts in principle the contention of Mr.
Gardine that a credit extended by a national bank in New York to a
foreign bank, the proceeds of -which would be used only in financing

exports from the United States, is really based upon transactions
involving the importation or exportation of goods and therefore need
not be considered as finance credit extended for the purpose of furnishing dollar exchange.

It seems to me that in principle such a transaction would

be substantially the same as those approved by the Board on the French
renewal 'credits where credit was granted to bankers who drew bills

under them, the proceeds of which were disbursed in this country in
payment for American exports and would be free of the renewal feature
which has caused so much recent discussion.
The new regulation B, series of 1916, does not specify who
or what shall draw bills and Mr. Harding's letter seems to indicate
that it was not the intention of the Board in that regulation to take



,ERAL RESERVE BANK OF NEW YORK

2-

11/11/16.

away from national banks the iprivilege of accepting bills drawn by
bankers.

We should all be glad to learn how you interpret this
correspondence as so far I am the only one in the office who has
given it more than a casual glance.
With kindest regards, I am,
Very truly yours,

stant Cashier.

Benjamin Strong, Esq.,
4100 likIntview Boulevard,

Denver, Colorado.

EYWELS
acs.




FEDERAL RESERVE BANK
OF NEW YORK

November 14, 1916.

Dear Mr. Strong:

I have your letter of November 8th and have studied with interest
and profit your criticism of the estimate stated in my talk to the exporters
as to the amount of credit that the system could extend through the issue of
The figure

Federal reserve notes based on the free gold/ held at that time.

urely theoretical and my own feel-

named (about ,00,000,000) was, of course,
1)

ing in stating it was to indicate the greatest possible limit to which the
system could go in time of extreme necesiity and to invite a comparison between that ability and the frozen cond'tion of credit that had existed during
the more recent panics under our old

ystem and to emphasize the fact that

Federal reserve note issue is limite

by the amount of free gold held by the

banks, realizing, of course, that i

ordinary practice we should not even con-*

template approaching such an,expa sion of note issue and that in time of stress
every effort would have to be ma '.e to accumulate additional gold to provide the

base for a large increase of n te issue.

crease inour gold holdings b

I hope that there will be some in-

the voluntary transfer by member banks of a

portion of their vault rese eves to the Federal reserve banks, but I do not

really believe that we sha 1 get much gold in that way unless some of our big
banks in New York coopera e
I am glad, in

ed, that on the whole you

0
liked my address and was,

naturally, gratified, vnough surprised, that it got so much space in the papers.




//".
RESERVE BANK OF NEW YORK

Benjamin Strong, Esq.,

2

11/14/16.

The payments to Morgan last Friday on account of the last 400,000,000.
British loan were cleared Saturday and doubtless had great effect on the bank

statement last week, which was reflected in a firmer call money market on
:Ionday.

To-day the renewal rate was 2 1/4 and money immediately dropped to 2%

and was very easy for a time at the middle of the day but closed at 2 1/2, and
I look for a poor statement this week on account of the transfers of reserves to
the Federal reserve banks due for Thursday.

Some of the quiet talk downtown

indicates apprehension of a flurry in the money market if nothing more, and I
think it is rather significant that this afternoon the National Bank of Commerce

sold us practically their entire portfolio of eligible bills (about 4,000,000)
with their full indorsement, the greater portion of which was member banks' acceptances under the various French credits having from 40 to 60 days to run.
I expect that to-morrow our directors will consider rates, both academically as
to the differentials between bills arising out of different kinds of transactions and also practically with regard to the outlook.

Mr. Aiken over the telephone to-day told me that money was tight in

e 4A-L.

Boston, that they had had no -goi-d market for the last few weeks, and that their

discounts and purchases from member banks had recently been quite heavy, the
National Shawmut Bank having discounted twice within ten days.
With best regards; I am,
Sincerely yours,

Benjamin Strong, Esq.,
4100 Montview Boulevard,
Denver, Colo.

ERK/PE




(05

FEDERAL RESERVE BANK
OF NEW YORK

CONFIDENTIAL:

November 16, 1916.

Dear Er. Strong:
You have doubtless seen recent press references to forthcoming sales
of British Exchequer bills of short maturities in this country and the reprint
in last week's "Chronicle" of the Chicago Herald's story about the Davidson
dinner in Chicago and what it is alleged Mr. Davidson said at that time.
I am enclosing herewith a copy of a memorandum that was written

during September and October of 1915, by Er. J. F. Darling, Deputy Manager
of the London Joint Stock Bank, who is now in this country and who gave Charlie

Smithers a copy of the memorandum as an interesting document in view of
recent developments.

Mr. Smithers showed it to me in confidence but very

willingly agreed with me in my suggestion that it was a unique contribution to
the financial thought of the time, which it would interest you to see; therefore, I am enabled to send you this copy.

With kindest regards, I am
Very truly yours,

istant Cashier.

Benjamin Strong, Esq.,
4100 Montview Boulevard,
Denver, Colorado.

ERK/HAB
Enc.



FEDERAL RESERVE BANK
OF NEW YORK

November 18, 1916.

Dear Er. Strong;

Following Er. Darling's memorandum on British Treasury
bills, I

sure you will be interested to know that yesterday

am

,morning Er. Darling called at the bank and saw Er. Curtis and me
and told us a little something of the-history of his plan.
It seems that his memorandum 1VaS the final summing up

of long discussions and considerations of various modifications
of the scheme, and was presented
some of the leading bankers.

a year ago to the Treasury and

It was generally approved by the

Treasury officials and advisors, particularly by Sir John Bradbury, who then occupied a position 'somewhat similar to that of
-

our Treasurer of the United States; by Sir Samuel Montagu0 and

Hartley Withers, but was opposed by the Bank of England as not
necessary and inexpedient at that time, and for the further reason
that their inquiries in this country had led them to believe that
the time had not yet arrived when the scheme

would be well re-

ceived over here.

Kr. Darling was so convinced that the matter was dead
that he did not bring a copy of his memorandum to this country

but during his stay here the question of issuing short bills on
this side was revived and he was consulted and sent home for a




FEDERAL RESERVE BANK
OF NEW YORK

November 18, 1916.

Dear Mr. Strong:

Following Mr. Darling's memorandum on British Treasury
bills, I

am

sure you will be interested to know that yesterday

,morning Mr. Darling called at the bank and saw Mr. Curtis and me
and told us a little something of the -history Of his plan.
It seems that his 'memorandum 1VaS the final summing up

of long discussions and considerations of various modifications
of the scheme, and was presented a year ago to the Treasury and
some of the leading bankers.

It was generally approved by the

Treasury officials and advisors, particularly by Sir John Bradbury, who then occupied a position somewhat similar to that of
our Treasurer of the United States; by Sir Samuel Montagu0 and
Hartley Withers, but'was opposed by the Bank of England as not

necessary and inexpedient at that time, and for the further reason
that their inquiries in this country had led them to believe that
the time had not yet arrived when the scheme

would be well re-

ceived over here.

Mr. Darling was so convinced that the matter was dead
that he did not bring a copy of his memorandum to this country
but during his stay here the question of issuing short bills on
this side was revived and he was consulted and sent home for a




EDERAL RESERVE BANK OF NEW YORK

2.

Mr. Strong

11/18/16.

copy of his plan which he received only very recently.

He tells us

that he talked it over with the City Bank people, who think well of
it, and also with Er. Otto Rahn of Kuhn, Loeb & Company, who favors it,
and he was expecteglyesterday afternoon to see Ir. Davison

in regard

to it, but up to a late hour, I am advised, he had not seen Mr. Davi-son.

Mr. Darling said that while he expected to sail this morning if this thing was really to materialize that he might defer sailing for another week.

He said that so far as he knew nothing had

been definitely done by any one in regard to the placing of short bills
here, and it would, therefore, seem that all the talk in the press articles on the subject so far, has been merely in the way of propaganda.
I shall keep you advised of any developments that come to my
knowledge.

You will see in to-day's Times that Kuhn, Loeb & Company
are about to bring out some more French municipal issues.
Very truly yours,

Benjamin Strong, Esq.,
4100 liontview Boulevard,
Denver, Colorado.

ERIOWB.







FEDERAL RESERVE BANK
OF NEW YORK

November 27, 1916.

Benjamin Strong, Esq.,
4100 Montview Boulevarde,
Denver, Colorado.
Dear Mr. Strong:

I enclose copy of our letter of November 24th to
Governor Seay outlining a new plan suggested for determining
the allotment of investments among Federal reserve banks.
We have sent copies also to Governor Aiken and
Governor, members of Governor Seay's committee and expect
that the matter will be discussed at the conference of governors
on December 11th.
Very truly yours,

Assis

KIK/JGC
Enc.

nt Cashier.




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_

dence

BANK OF

NE-v7(761V:

Date

LECTORS,

Subject LIELIO-AEDIM 2

MARCH 14TH RE CONVERSION OF U. S. BONDS.

DUPLIC 'TE

MAR 1 9-19p

on and hold in suspense account in Washineton 2 .bonds

LWe

entiecto - - - - - - - -------- _ - ----- -

70,550.

WM

ihich may be converted into 3% thirty-year bonds and one-year 3% treesone-half each, as of April 1, 1917.

lirnotes,

At the same time there may be converted the proportion of bonds

15,000,000 offered to the Treasurer of the United States by member
under section 18 of the act that the board will require this bank
relies° this quarter.

If the entire

15,000,000 is offered by mm-

emits, our alleteent would be apereeimately

3,206,450

INID

added to the 10,550 of bonds on hand, would c';ive an apeeoxieate

for conversion on April 1st of

_,277,000

This bank has the privilege of converting thie year
nls, and, all Federal reserve banks

1

5,370,900

;7-coneert durine the remain-

f the year- -- ----

11,402,800

diference between that sum and :7;30,000,000'havine been converted

he system in Januery, 1917.

Heretofore the applicetions of Federal reserve banks to coneort,
h resolution of the directors authorizine the application and agroeine
purchase one- Dar notes have been reouired by the Treasury Depart ent
in their bends, in Washington, ten days before the end of any guarIt is not practicable this quarter to furnish by that time the

cations and resolutions for the exact amount of bonds to be converted
reaso

that member banks may filo their applications to sell bonds

and including March 21st.

T.

devise a moans of overco

ine; this

'lenity, the Federal -Aserve Board on February 28th wrote, in reply to




,UE.KAL ItE5EliV
BANK OF NEW YORK

Date

is

Mr.-tnth q 1917.

Subject: BIERMODULI ?OT Z DZMOTORS W,P4P

1Correspondence
3!4 14 genzel

ileROH 14TH

lee CONVEIVION OF TT.S. 2% HMI

eem

PLICITE
re "ehoads1 letter of February 27th:
"The Treasury Deperteent desires to beve the
resolutions frolA the bemee ceverine anticipated conversions of bonds promptle on Enrch 20, and would prefer that thez- be filled In for the maximumamounl.;'or
any part thereof, When you are advised of the amunt
ee boues ehich you will be eeleired to take throeeh
offerines to the Treasurer of the United Stntes, you
can 'ire the Borrd and we eill have the necessary'
adjuet ent made in your resolution,"

-and, on Terreh 3rd, they

further wrote to

r,

Rhoads, in reply to his let-

.

ter of March 2nd, as follows:




"I have again taken the eatter up with the
IvIsiou of Loues eed aurrenc:, fro: which the bonds aro-

issued, end am in recpipt of a MOAYMalatIM free the Ghief

of teet division readine es follows:

rehet the.proseut situttion differs free
eecifted, for now for :the first time eppliAcne throuJi the Treasurer to retire emueioe will receive ettention; an,1 so I thine

le)e situation at any previous conversion Is

under all the c/rouastanoos it would be well
to advise the benkc that the depart. out viehes

affirmative information at the earliest poesible
'e, ani that if it is not feasible to have the
lications in the eecretar 's office by'eerob

, ane,bank intonlin to corvert will alvise
the Secretary of its intention awl then send
:Inite aavice concernin_; the applications to
aeivert, which will include the denominations

of the notes end bonls, at the earlieet posciele
_element, but, of dourso, they must actually be

received net later than the close of business
Saturday, March 31, and the bonds must be in

eand not later than the openta of business on
e-e-lay A, ril 2d,/

a

21, r.

sure that this will be satisfactory, and sue-

t in view of the concession which is beine made, you
bankn to submit their resolutions promptlron March

Are the eeounts to be inserted in the resolutions as
soon after as possible upon receipt of advice free the Board
ef the elloteent made,"
It will, therefore, be necessary to pass resolutions at the meeting

/Correspondence

JiAINkS ur PIC.W 1UIU

Date'TLiareh 9. 1917.

Curtis

Subject 422,10RANDIN
_IA T107 14T/

E. R. Kenzel

ETIN

FOR DIRECTO Eir)

fl1n r17,17,1r T OTT OP TTS, ROTITIFt

-3U P L-I C
0

-

TE

..-rch 111t1i to include any conversions that we may wish to malce as of

April lot.

The maximum amount of bonls that we mny have to con7ort would
A

be our full proportion of the 015,000,000

0,205,450

-.--.

and the bonds owned at proseut,
or a total of

WO

WO

70,55,

3,277,00'

11.4,

and wo should nort1; thereafter advise the 2veas7:17:-

Depart-ent of the

maximum ar]ount thot vie wish to convert in ancorgance iith the Foderal Ro-

servo Board's letter of arch 3rd.
Tlie resolutions roquirf.d are attached hereto, viz:
2qpyi 903:

"RESOLUTION OF FEDERAL RESERVU BAIM AUT1i02IZING
AWL IOAT I OTT

'CP 'COT= 101I OF TET12.; D

gm

2% BON-C."
905:

"RFSC-

um

OP FTOERAL r3ESERV1 BANK OBLIGATING
TO PITICHASE 0D
1R TZE40URY NOTES."

March 10, 1917.

Since writing,the above we are advised br the Federal Reserve Board
)ur allotment, computed

on a basis of

offerings of15,000,000.1,

will
3081,70:

ad of the annroximate amount heretofore advised, which added to our

7055(

ake a possible maximum

for conversion on April 1st of

3,252,PF'

1 VB.



1011.111M

4111111.

Correspondence
To
From

FEDERAL RESERVE
BANK OF NEW YORK

Date

Subject

_Nr.--.Tay

E. B. Xenzel

Apri 1 4-, 1917.

SUGGESTION FOR AMENDMENT: FEDERAL

RESERVE ACT PERMITTING FEDERAL RESERVE
BANKS TO MATM LOANS OTHER THAN TO DINMBEI

HAM OF ELIGIBLE BANKERS ACCEPTANCES

AND U. S. GOMM= SECURITIES.'

Consideration at this time of the situation and money market conditions
that may shortly develop attendant upon any extensive financing by the Government,

suggestOthat immediate attention be given to putting the Federal Reserve System in

a bettor position to stabilize and regulate both discount and open mailaet rates.
An open market requires discount houses and dealers that will buy bills

at all times.

Banks with their varied interests pTidoustomers requirements are

occasional and not constant buyers.

They buy only when it suits than to do so

and sell at the first advance in money rates.

They have shown no disposition

the rediscount facilities of the Federal reserve banks for the accommoda-

f discount houses and dealers but prefer to hold their lines at Federal rebanks open for their den saergency.

Diesunt ' Ieunes and dealers in bankers acceptances carry their portfolios
on money borrowed from the beaks on call at current rates.

In times of flurry

rates on these loans are maered up along with rates eel other collateral loans

end

the result is a general and sadden advance in no open market rates for bills and
a great contraction of buying even at advanced rates. These coerlitious developed
in July and again to a greater degree in December, 1916, and were discussed at those
times.

A somewhat similar condition has operated against our getting best re-

sults on sales of U. S. conversion 3% bonds as dealers have had to take into con-

sideration the unstable rates for call money When figuring to carry their pur-

chases until resold.



varrespondence
0

FEDERAL RESERVE
BANK OF NEW YORK

Date April 4. 1917.

Mr. 'kV

Subject

iromZ. B Kenna

-2--

amendment to the Federal Reserve Act that would. permit Fedora/ reserve banks

to make direct loans to approved houses dealing in bankers acceptances and Government bonds secured by bprIkers acceptances eligible for purchase under seotion 14

and or Government securities would reileve these conditions, and further would

eve the Federal reserve banks a better and needed control aver rates both up and
dawn without unduly competing with member banks.

I would suggest tale that would give a reasonable discretion to the banks

as to time and rate on such loans, say up to 15 or 30 days as to time and
n the rates established for open market purchases.




Misc-37

Office Correspondence
To

FEDERAL RESERVE
BANK OF NEW YORK

Date April_51,_ 1917,
Inquiries made in New York re
Subject :Government Bend -Issues-,- -synopsis
of which was telephoned. to Air.

.Lieference_

--Tremn-at-Washingtort, -13- C. to-day.

From E. R. 'Cense)._

Er. Treman telephoned Mr..Jny asking him to ascertain the prevailing opinions
in well informed quarters in New York as to what form of Government issue the

4500,000,000 or 01,000,000,000 should take at this time, with particular regard to the
maturities, sinking fund, and rate of interest.
Later in the day, after inquiries had been made the following summary of replies was telephoned to Mr. Trelan by Mr.

Jay

and Ur. Kenzel:

ER. WOODWAaD thought that the immediate or temporary requirement for
4500,000,000 or 41,000,000,000 could be met by the issue of 3% bonds at par, running
not more than five years and with privilege to convert into
out during that time.

any higher rate issue put

This to provide for immediate needs, leaving the mode of the

major borrowing to be determined at leisure.

Iga_0. E. MITCHELL. PRESIDENT OF THE NAT/OWL CITY COLTANY, who had issued
a statement published in the press this morning, thought the immediate issue of

01,000,000,000 3% thirty-year bonds, convertible at par within one year into any
higher rate issue that might be put out, could be sold at par after a strong advertising campaign and thorough arrangements for general distribution, emphasizes the neces-

advantage of the first flood of patriotism.

sity of taking

221. HARRY SACHS OF GOLDMAN. SACHS & COMPAITY stated that his company had

given careful consideration to this question during the past few days, and that it was

their belief
amount in 0%

that if only 4500,000,000 to 01,000,000,000 were to be borrowed that that

bonds running twenty to thirty years, with conversion privilege, would

sell at a premium, but that if a much larger amount is to be needed, it would be better to make the rate 4% on the initial, as well as subsequent issues, as the success
of the initial issue would be essential to the success of future issues, and that the

4% rate would bring a big premium and be sufficient to attract funds from every quer..
ter.



e4c Correspondence
To
From

FEDERAL RESERVE
BANK OF NEW YORK

Dee

April 5, 1917..

Subject :

Reference
E. R. Eenzel,

LIR. FELIX WARBURG OF EUEHE. LOB COMPANY, having consulted with several of
his partners, stated that in their opinion 0500,000,000 of 3*% twenty-five or thirty
year bonds offered at par could be successfully sold, even without conversion privilege, but suggested a redemption

feature

for the protection of the Government. so

that they might be retired after three or five years.

He was not sure that the above would be equally true as to an issue of
He thought it hard to judge the patrioticpeople,
enthusiasm of the

01,000,000,000.

but is not unmind!t1 of the beneficial effect on such an issue that the current remarks regarding heavy taxation might exert.

He emphasized a

first issue be a "howling" success.
FABRELL OF F. S. SLITHERS & COMPANY thinks 0500,000,000 the limit of
3%s at par, but that 01,000,000,000 or more 3-06, would go at par or better and that
any amount, even $5,000,000,000 or $10,000,000,000 at 4% mould be well taken.

If

the lower rates were adopted on the first issues, they should contain the privilege
for conversion at par into higher rate issues.

He considers maturities of ten to

thirty years preferable.
Later, after the above .had. been communicated to Mr. Treman,

A.

WESTERVELT OF HARVEY FISK & SONS stated that he had discussed the

same question with Mr. Pliny Fisk this morning and that Mr. Fisk was of the opinion
that $500,000,000

3Z

thirty-year bonds, with privilege to convert into higher rate

Issue, could be sold at par, but that if larger future

needs

were to be considered,

it would be better to make the rate 4% for ten to thirty-year bonds, with conversion
privilege up to five years.

This rate would insure a world demand for the bonds and

the increased interest cost would be offset by the premium realized.
He also suggested that prepayments on account of subscriptions should not



_ Ace

Correspondence

FEDERAL RESERVE

BANK OF NEW YORK

Date
Subject :

7.T,:aference
FromE K. Kenffel,

-43

take the full interest rate of the bond as discount, but that discount only at a
lower rate, say 3%, be allowed, as otherwise there would be an incentive to pull
too much money from the banks at one time,

ERKPOSB.




Form 1201
CLASS OF SERVICE

fl
fe

Letter

WESTEALLM UNION
TEL
AM

Message

Nit m Letter

Blue

Day Message

Day Letter

111.,

NL

If none of these three symbols
wise Its character is indicated by the

NEWCOMB CARLTON. PRESIDENT

symbol appearing after the check.

36

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

symbol appearing after the check.

t: t AV

DikLEAIL

L1,414,B

Q NEWYORK NY 345P MAY 24 1917
BENJAMIN STRONG

to be

1150
4100 MOUNTVIEW BLVD

DENVER COLO

OPEN AND RENEWED TWO AND ONE HALF HIGH THREE
ONE HALF CLOSE THREE AND

ONE

Bite

Night Letter
NL
If none of these three symbols

GEORGE W. E. ATKINS. FIRST VICE-PRESIDENT

RECEIVED AT 915-919 SEVENTEENTH ST., DENVER, COLO. A igar

Blue

Night Message

WESTERN UNION

Nite

appears after the check (number of
words)this Is a day message. Other-

196NY SQ

CLASS OF SERVICE SYMBOL

E

SYMBOL

Day Message

AND

ONE HALF LOW TWO AND

QUARTER WITH BIDDING FAIRLY

STRONG

STOP LOOKS LIKE PREPARATION FOR PAYMENT TOMORROW CERTIFICATES OF
INDEBTEDNESS




E R KENZEL
216PM

Form 1201
,ERVICE

&moo

SYMB-1

,,r
ght Letter ,
le of these

Blue

WESTE

x

UNION

CLASS OF SERVICE SYMBOL
Day Message

Day Letter

TEL

1.,

ars after the check (nun u
fwords)th is is a day message. CAW,.
, wise its character is indicated l'"of
Lsymbol appearing after the ',thorn thu

rieck.
_

cIEWCOM El CA RLTON, PRESIDENT

11117-Zzfil

AM

Blue

Night Message

WESTERN UNION

el,te

Bite

NL
If none of these three symbols
Night Letter

appears after the check number of
words)thisisaday message.Otherwise its character is indicated by the
symbol appearing after the check.

GEORGE W. E. ATKINS, FIRST VICE-PRESIDENT

RECEIVED AT 91

104NY HO 5-913 SEVENTEENTH ST., DENVER, COLO. At;grr

22

--PAliFfri3

0724inlitiTat A 11

4

Q NEWYORK NY 442P MAY 25 1917

3ENJ AM I

+4 STRONG

No

1116
4100 MOUNTVIEW BLVD DENVER COLO

OPEN AND RENEWED AND CLOSED
ONEHAL F LOW TWO AND

hLL DAY
E R KENZEL




7,

317PM

THREE PERCENT HIGH THREE AND

THREE QUARTERS EASY AND ACTIVE

-

tO

11..,

--_____to be

-

POSTAL TELEGrMrrl
W7-RECEIVED AT MAIN OFFICE
,...3"..ERNEST

CRANNIER BUILDING

920 17TH STREET

C.InNVER, COLO.

TEL' ,HONE : MAIN 4600

evi ERCIAL CABLES

CLARENCE H. MACKAY, PRESIDENT.

TELEGRAM

The Pos al Telegraph-Cable Company(Incorporated)transmits and delivers this message subject to the terms and conditions printed on the hack of this Wan'
8-32352

DESIGN PATENT No. 40529

429CH 0 21 230P
CB NEWYOF-sK MAY 23

1'7

BENJ STRONG

4100 MOUNT VIEW BLVD DENVER

OPEN RENEWED AND HIGH TWO AND ONE HALF LOW TWO AND ONE QUARTER CLOSE
TWO AND ONE HALF EASY ALL WELL




E h KENSEEL

POSTAL TELEGRAPH-COMMERCIAL CABLEB
IAL

THE GREATEST TELEGRAPH AND CABLE SYSTEM IN THE WORLD.

EXTENDS OVER TWO-THIRDS OF THE WAY AROUND THE EARTH.

THE POSTAL TELEGRAPH-CABLE COMPANY (

,INCORPO RATED)

,
TRANSMITS AND DELIVERS THE WITHIN TELEGRAM SUBJECT-T(5 THE FOLLOWING TERMS AND
CONDITIONS:
To guard against mistakes or delays, the sender of
.

a telegram should order it
comparison. Tor tlds,.cineAutlf the unrepeated telegram rate is charged in addition. REPEATED: that is, telegraphed back to the originating office for
indicated on its
IS AN UNREPEATED
TF,LEGRAM' AS!) 'PAID
AS SUCH, in possideration whereof it is agreed between Unless otherwisetelegram and thisface, THIS as follows:
the sender of the
Company
L The Company shall not be liable for mistakes or delays in the
amount received for sending the same; nor for mistakes or delaystransmission or delivery, or for non-delivery, of any UNREPEATED telegram, beyond the
in the transmission or delivery, or for non-delivery, of any REPEATED telegram, beyond
fifty tithes-the sum reritred fey sentltOgithe
e,
working of its litteS NOR FOR ERRORS IN' PHUrsLESS SPECIALLY VALUED: nor in any case for delays arising from unavoidable interruption in the
'1,70R OBSCURE TELEGRAMS.
2. In aisy event the Company shall, not be liable for
damages for any mistakes or delays in the transmission or delivery, or for the non-delivery of this
telegram, whether caused by ths.negligence of its servants
sent as a IIEPEATIA telegranW is hereby. valued, unless or otherwise, beyond fifty times the REPEATED telegram rate, at which amount this telegram, If
a greater value is stated in Writing
transmission, and an additional sum paid or agreed to be paid based on such value equal to hereon at the time the telegmm is offered to the Company for
one-tenth of one per cent. thereof.
8. The Company is hereby made the agent of
the sender, without liability, to forward this telegram over the lines of any other Company when necessary
to reach its destination.
4. Messages will be delivered free within the established free
delivery limits of the terminal office. For delivery at a greater distance a special charge will be
made to cover the cost of such delivery.
6. No responsibility regarding messages attaches to
this Company until the same are presented and accepted at one of its transmitting offices; and if any
message is sent to such office by one of this Company's
messengers,
t
regarding it to the Company's agent in its said office. he acts as the agent of the sender for the purpose of delivering the message and any notice or
IructionsCompany shall not be liable for damages or statntory penalties in any case where the claim is not
The
telegram is filed with the Company for transmission.
presented in writing within sixty days after the
7. The ilt,,ve terms and conditions Shall be binding
upon the receiver as well as the sender of this telegram.
8. NO FU LOYEE OF THIS COMPANY IS AUTHORIZED TO VAY,THE
R
FOREGOING.
,

I
'

.

.

'-'10iRLES C. ADAMS.
VICE-PRESIDENT.

IrIDI
Cl CE: H. MACKAY. PRESIDENT.

EDWARD REY

S,I

THE FASTEST TELEGRA



P/ICE,REST. AND GENERAL MANAGER.
V

CHARLES P. BRUCH,
VICE-PRESIDENT.

OPERATOR'S NOTATIO

TIME SENT, Ere.

POSTAL TELEGRAPH - COMMERCIAL. LiAlliLt
'ECEIVED AT MAIN OFFICE
touit-5,4. a RANMER BUILDING
.114:04WYN STREET

D4NVER, COLO.

TELEPHONE: MAIN 4800

CLARENCE H. MACKAY PRESIDE?,

TELEGRAM

DELIVERY NO.

*Posfal Telegraph-Cable Company(Incorporated)transmits and delivers this message subject to the terms and conditions prfr,te',
18-32352

DESIGN PATENT No. 40529

49 CR TN

241 pm 18
-

B 211j

zzin Strong

CB New York May ` 2 17

4100 Mount View Boulevard 0,s,irtrfr

Open renew and high two and oneltalf low two

close two and one quarter easy all clay.




E R Kenzel.

un the back of flits blank.

TELEGRAPH-COMMERCIAL CA L
Nliff

NEWFOUNDLAND

O

-4-4-"Vaa-2,
4111,pattr

THE GREATEST TEEEtRAPH AND CABLE SYSTEM IN THE WORLD.

--

EXTENDS OVER TWO-THIRDS OF THE WAY MOND THE EARTH.

THE POSTAL. TEL'EGRAPH-CABtE dalVIPANY

(INCORPORATED)

TRANSMITS AND DELIVERS THE WITHIN TELEGRAM SUBJECT TO THE FOLLOWING TERMS AND CONDITIONS:
To guard against mistakes or delays, the send4

comparison.

REPOinjr; ,that. ip, telegraphed pack,to.the originating office for

Foi,t1, .ene-haif the sweated tele, am rate

charged in ad 'lion. -Unless oti rwise indicated on its tace,'PHIS IS AN UNREPEATED
Mi.f,dirsideration whereof It is agreed between the sender of the telegram and this Company as toklowS:
The Company ffall not-be liablefor mistakes or, delays in the transmission or delipel,y, or for non-delivery, of any UNREPEATED telegram, beyond the
amount received for sending the sante; nor for mistakes or delays in the transmission or delivery, or for non-delivery, of any REPEATED telegram, beyond
fifty times the sum received .for sending the same, UNLESS SPECIALLY VALUED; Or in any case for delays arising from unavoidable interruption in the
working of its lines; NOR FOR ERRORS IN CIPHER OR OBSCURE TEIAGRAMg,
2. In any event the Company shall not be liable for damages fotiay Tstftte *Milts -in ffeasVansmIsion cir ,delivery, or for the non-delivery of this
telegram, whether caused by the negligence of its servants or otherwise, beyond fifty times the' REPEATED telegram rate, at which amount this telegram, if
sent as a REPEATED telegram, is hereby valued, unless a greater value is stated in writing hereon at the time the telegram is offered to the Company for
TELEGRAM ANT4117F7R StS
D

transmission, and an additional sum paid or agreed to be 'paid based

on

such value equal to one-tenth of one per cent. thereof.

S. The Company Is Irreby made the .044, of4,3se,sen4er,fadthout liability, to forward this telegram over the lines of any other Company wlimi necessary
to reach its destination:.
4. Messages will be delivered free Within the established free delivery limits Of the terminal office.
For delivery at a greater distance a special charge will be
_
made to cover the cost of such delivery.
I. No responsibility regarding messages attaches td this company until the same are presented and accepted at one of its transmitting offices; and if any
message is sent to such office by one of this Company'amessengers, he acts as the agent of the sender for the purpose of delivering the message and any notice or
kistructions regarding It to the Company's agent in its itaid office.
aThe Company shall not be liable tor damages or statutory penalties in any case where the claim is not presented In writing within sixty daysafter the
am is filed with the Company for trAnsmission.
The above terms and conditions shall he binding upon the receiver as well as the sender of this telegram.
NO EMPLOYEE OF THIS COMPANY IS AUTHORIZED TO VARY THE FOREGOING.

Cn7LES,C. ADAMS,
VICE-PRESIDENT.




CLARENCE H. MACKAY, PRESIDENT.
EDWARD REYNOLDS, VICE-PREST. AND GENERAL MANAGER.

CHARLES P. BRUCH,
VICE-PRESIDENT.

A
.

TIME SENT, ETC

.;

POSTAL TELEGRAPH - COMMERCIAL CABLES
RECEIVED AT MAIN OFFICE
IFINSBY

CRAMMER BUILDING

-020 17TH STREET

I ENVER, COLO.

TELEPHONE: MAIN 4800

CLARENCE H. MACKAY, PRESIDENT.

TELEGRAM

KiheYostalTelegraph-Cable Company(Incorporated)transmits and delivers this message subject to the terms and conditions printed on the back of this blank.
32352

DESJGN PATENT No. 40529

147 db kb 20 227p

77/

db Newyork may 18 17

Benjamin Strong
4100

Nount Vi3W

Money opened and renewed two
two and one quarter afternoon




Blvd

Denver

-----

and one half plentiful at

closed two and one quarter.

E.R. Kenzel

POSTAL-TELEGRAPH-COMMERCIAL CABLES

THE GREATEST TELEGRAPH AND CABLE SYSTEM IN THE WORLD.

EXTENDS OVER TWO-THIRDS OF THE WAY AROUND THE EARTH.

THE POSTAL TELEGRAPH-CABLE COMPANY

TRANSMITS AND DELIVERS THE WITHIN TELEGRAM SUBjEt

(INCORPORATED)

p:-.? THE FOLLOWiNG, TERMS AND CONDITIONS:
To guard against mistakes or delays, the
a 'telegram should order it
comparison. For this, one-half the .unrepeated sender ofrate is charged In addition. REPEATED; that is, telegraphed back to the originating
telegram
office for
TELEGRAM AND PAID FOR AS SUCH, in Consiffdation whereof it is agreed between Unless otherwise indicated on hi face, THIS IS AN UNREPEATED
I. The Company shall not be liable ioemistakes
the sender cf the telegram and this Company as follows:
or delays
amount received for 'sending the same; nor for mistakes orin the transmission or delivery, or for eon-delivery, of any UNREPEATED
delays in the
telegram, beyond the
fifty times.the sum received for Sepding the same, UNLESS SPECIALLY transmission or delivery, or for non-delivery, of any REPEATED
VALUED;
telegram, beyond
working of its lines; NOR FOR ERRORS IN
CIPHER OR OBSCURE TELEGRAMS.'nor in any case for delays arising from nnaVoidable interruption in the
2. In any event the Company shall not
'
be liable for damages for any mistakes or delays in the transmission
telegram, whether caused by the negligence of its servants
sent as a REPEATED irjeg ram,
or otherwise, beyond fifty times the REPEATED or delivery, or for the non-delivery of this
. is
transmission, and an affffitional Sumhereby valued, miless a greater value is stated in writing hereon at the telegram rate, at which amount this telegram, if
paid or agreed to be paid based on Bach value etjual to one-tenth oftime the telegram is offered to the Company for
S. The Company is hereby ,maile
one Per cent. thereof.
the agent of the sender, without liability,
to reach its destination.
to forward this telegram over the lines of any other Company when necessary

4.
Messages will be delivered free-within the
established free delivery limits of the terminal office. For delivery at a greater
made to cover the cost of such delivery.
distance a special charge will be
S. No responsibility regarding
messages
age is sent to such office by one of this attaches to this Company until the same are presented and accepted
Company's messengers, he acts as the agent of the sender for the purpose of of its transmitting offices; and if any
stone
ructions regarding it to the Company's agent in its said office.
delivering the message and any notice or
The Company shall not be liable for damages
telegram is filed with the Company for transmission. or statutory penalties in any case where the claim is not presented In
writing within sixty days after the
The above terms and conditions shall be
binding upon the receiver as welt as the sender of this
NO,MPLOYEE OF THIS COMPANY IS AUTHORIZED TO VARY THE FOREGOING, telegram,'
L,

ARLES C. ADAMS,
VICE-PRESIDENT.

CLARENCE H. MACKAY, PRESIDENT.

EDWARD REYNOLDS. VICE-PREST, AND GENERAL MANAGER.

CHARLES P. BRUCH,
VICE-PRESIDENT.

"THE FASTEST TELEGRAPH SERVICE

IN THE WORLD


OPERATOR'S
NOTATION',TIME
SENT, Erc.

POSTAL TELEGRAPH

TELEGRAM

RECEIVED AT MAIN OFFICE

...... 17TH STREET
CRAMMER BUILDING
-b20
*NVER, COLO.

TELKPMONt

COMMERCIAL CABLES

CLARENCE H. MACKAY, PRESIDENT.

MAIN 41100

DELIVERY N .

The Postal Telegraph-Cable Company(Incorporated)tiansmits and delivers this message subject to the terms and conditions printed on the hack of
111-321"")

110cb ja

DESIGN PATENT No. 40529

14

CB NewYork may 17 17

Benj amine strong,
4100 yountyiew B1Yd,nenver
Money renewed two and one

half easy all day closed

and one quarter
1f25p




R Kenzee

two

blank.

POSTAL TELEGRAPH-COMMERCIAL CABLES
ALASKA

a

JAPAN

ENGLAND
VANCOUVER

PACIFIC

OCEAN

CO ,

SAN FRAN ISCO

YOKOHAMA

MIDWAY

CANADA

NEWFOUNDLAND

ktirlit. ,044k,

"11100725910
41h3OWF.
k

AZORES

'ORK
BERMUDA

ATLANTIC
OCEAN

AT,MCENT

GUAM

t`i
THE GREATEST TELEGRAPH AND CABLE SYSTEM IN THE WORLD.

TH
_

EXTENDS OVER TWO-THIRDS QF THE WAY AROUND THE EARTH.

e FF8fRil fet_Eaihm4.26-AdEi 6131oFTANIC

TRANSMITS AND DELIVERS THE VilJT,J-1.11)1 TEL,EGR 4§.U.J3,JEC..T,T THE_TOhifyING TERMS AND CONDITIONS:
k
To guard against mistakes or delays, the sed
of a teleg.ram lona OriTer ftl'AVE
71'..11: tans. Yeregraphed back to the originating office for
comparison. For this, one-half the unrepei ed telegram rate is charged in addition. Unless (410/,ViSe indicated on i,... face; THIS IS AN UNREPEATED
al
TELEGRAM AND PAID Ff AS SUClk consideration whereof it is agreed between the smiler of the telegram and this Company as follows:
.

,fler

.?I'lielConstatnyiSliall.:not be:lasgro4
takes or delays in the transmission or delivery, or for non-delivery, of any UNREPE.A.TED telegram, beyond the
amount received for sending the same; nor for mistakes or delays in the transmission or delivery, or for non-delivery, of any REPEATED telegram, beyond
fifty times the SUM received for sending the same, UNLESS SPECIALLY VALUED; nor in miy case for delays arising from unavoidable interruption in the
work
of its lines; '01.FOR,ERORri eta. OR OBSCURE TELEGRAMS.
.
In'any evdsitthe'ech liwnyestiali"not alab
damages for any mistakes or 'delays in the transmission or delivery, or for the non-delivery of this
telegram, whether caused art the negligence of its servants or otherwise, beyond fifty times the REPEATED telegram rate, at which amount this telegram, if
sent as a REPEATED telegram, is hereby valued, unless a greater value is stated in writing hereon at the timethe telegram is offered to the Company for
tranemisp, gild anAtdditioisalstnn paid or agreed to be paid based on such value equal to one-tenth of one per cent. thereof.
8. -: The .Company' it herebst Made the agent of the, sender, without liability, to forward this telegram over the lines of any other Company when necessary
to reach its destination.
4. Messages will be delivered free within the established free delivery limits of the terminal office. For delivery at a greater distance a special charge will be
made tr-qqver the cost of such delivery.
-

6.

sponsibility regarding messages attaches to this Company until the same are presented and accepted at one of its transmitting offices; and if any
message is Sent to Bitch office by one of this Company's messengers,, lie acts as the agent of the sender for the purpose of deliveringthe message and any notice or
instructions regarding it to the Company's agent in its said office.
1..

6. The Company shall not be liable for damages or statutory penalties in any case where the claim is not presented In writing within sixty days
after the
telegram is tiled with the Company for transmission.
The above terms and conditions shall be binding upon the receiver as well as the send, of this telegram.
-N(3)..KMPLOYEE OF THIS COMPANY IS AUTHORIZED TO VARY THE FOREGoING.

CHARLES C. ADAMS,
VICE-PRESIDENT.

CLARENCE H. MACKAY, PRESIDENT.
EDWARD REYNOLDS, VICE-PREST. AND GENERAL MANAGER.

CHARLES P. BRUCH,
V ICE-PRESIDENT.

THE FASTEST TELEGRAPH SERVICE IN THE WORLD




OPERATOR'S NOTATIONS,

TIME SENT, Ere,

POSTAL TELEGRAPH
RECEIVED AT MAIN OFFICE
EN1117 & CRARY. IWILIP4*0
40 17.04 STREET

NI V g.11, COLO.

fira.,-orat: MAIN 44041

COMMERCIAL CABLES

CLARENCE ri. MACKAY, PiEssoEm-r.

"TELEGRAM

DELIVERY NO.

The Postal Ielegraph-Cabha Company( Incorporeed)transmits and delivers this message subject to the terms and conditions printed
on the hack of ff,s tlank.
DESIGN PATENT N. 40529

112 cb q

16

221pm

CB New York May 16 17

Governor Strong
4100 1.2ountv ew Blvd Denver Col

Call two and one half all day stop Time loaning more freely at five
p er-c ent mixed




E P Kenz el

-POSTAL TELEGRAPK-COMMERCIAL CABLES
'oRic
BERMUDA

ATLANTIC
OCEAN
157. VINCENT

THE GREATEST TELEGRIC1311 AND CABLE SYSTEM IN THE WORLD.

EXTENDS OVER TWO-THIRDS OF THE WAY AROUND THE EARTH.

THE POSTAL TELEGRAPH-CABLE COMPANY (

.INCORPORATED)

TRANSMITS AND DELIVERS THE WITHIN TELEGRAM SUBJECT TO THE FOLLOWING
TERMS AND CONDITIONS:
To guard against mistakes or delays, the sender of
-..,.

a telegram should order.
comparison. For this, one-half the unrepeated telegram rate,is charged in addition:it REPEATED; that is, telegraphed back to the originating office for
Unless 'otherwise
on
TELEGRAM AND PAID FOR AS SUCH, in consideration whereof it is agreed between the sender of the indicated and it, face, THIS IS AN UNREPEATED
telegram
I. The Company shall not be liable for &stakes
this Company as-follows:
or delays
ampunt ,weeerved ler sending the same; nor for mistakes orin the transmission or delivery, or for non-delivery, of any UNREPEATED telegram, beyond the
delays in the transmission or delivery,

fifty thnes the Mirk- feceived for sending the same, UNLESS SPECIALLY VALUED;
or for non-delivery, of any REPEATED telegram, beyond
Working of its lines; NOR FOR ERRORS IN CIPHER OR OBSCURE TELEGRAMS. nor in any case for delays arising from -unavoidable interruption in the
2. In any event the Company shall not be
liable
for any mistakes or delays In the transmission or delivery, or for the
telegra.in,14.__,ietr eMismkby'the negligence of its for damagesotherwise, beyond fifty
non-delivery of this
Servants or
Belem; a REP :ATEDtaggram; IS
times the REPEATED telegram rate, at which amount this telegram. if
hereby valued, 'sinless a greater value Is stated in writing hereon at the time the telegram is offered
transmission, and an 4domonai
to the Company for
sum paid or agreed to be paid based on such

value equal toone-teeth of one per cent, thereof.
?he.,
to reacii ItsCO_.....4mY jo hereby made the agent of the sender, without liability, to forward thls telegram over the lines of any other Company when necessary
dlislfilmatitm.
.
4. Messages Will
be delivered f,ree within the
made to
established free delivery limits of the terminal office. delivery at a greater distance a special charge will Le
g[. the cost of such delivery.
For
.
S. No , onsibility regarding
messages
thesiage Sent to Erich office by one of this attaches to this Company until the same are presented and accepted at one of its transmitting offices; and if any
Company's messengers,
Instruction. regarding it to the Company's agent in its said office. he acts as the agent of the sender for the purpose of delivering the message and any nofice or
8. Th. Company shall not be liable for
damages
telegram is flied with the Company for transmission. or statutory penalties in any case where the claim Is not presented In writing within party days after the
The skboFe terms and conditions shall be
NO f*,pLoYlilli OF nus COMPANY binding upon the receiver its well as the ,sender of this telegram..
18 AUTHORIZED To VARY THE FOREGOING.

),

.

.

(. ,,'

CHARLES C. ADAMS,
VICE-PRESIDENT.

CLARENCE H. MACKAY, PRESIDENT.
EDWARD REYNOLDS, VICE-PREST. AND GENERAL MANAGER.

CHARLES P. BRUcH,
VICE-PRESIDENT.

THE FASTEST TELEGRAPH SERVICE IN THE WORLD



OPERATOR'S NOTATION&

TIME SENT, Ero.

POSTAL TELEGRAPH - COMMERCIAL CABLES
CLARENCE H. MACKAY, PRESIDENT.

TELEGRAM

RECEIVED AT MAIN OFFICE
ERNEST

CRANMER BUILDING

0 17TH STREET

,VER, COLO.

TELEOHONE: MAIN 4600

DELIVERY NO.

5-?)

The Postal Telegraph-Cable Company(Incorporated)transmits and delivers this message subject to the terms and conditions printed on the bazg

16--323r-)

DESIGN

2I91C.ST11 21
Ca3

PAIENTLTEpH

3411)

ToZ.7ARlz

07ifY OR K -MAY 15 17

BY

-------

------

BENJAMIN STRONG
4 I 0 0 MOTJNTVIEW BLVD DENWM C OLO
MONEY YESTERDAY THREE XSIXXX PERCENT

HALY HIGH THREE LOW TWO




TODAY RENEWAL TWO AND ONE

CLOSED TWO AND THREE VARTERS TENDENCY EASY

E R KEN SEM,

PL:zi l'AL TELEGRAPH-COMMERCIAL CABLES

THE GREATEST. trPEGRAIYH AND CABLE SYSTEM IN THE WORLD.

OPERATOR'S NOTATIONS,

TIME SENT, ETC.

EXTENDS OVER TWO-THIRDS OF THE WAYfAROUND THEIARTH:' ,J42,,,,r

.THE:,-POSTAL-5glitPKT.CAB. LE co. NI P./4.NY itNAORPORATiED)ter olv
TRANSMITS AND DELIVERS THE WITHIN TELEGRAM SUBJECT TO THE FOLLOWING TERMS AND CONDITIONS:
To guard against mistakes oredelays, the,,asenolv of a telegram ,§0,1114 oider 1-t, N.T.zp,; that* telegraphed back to the originating office for
comp arison. F or this, one-half the, witepeitea,110314 11/11 rate' chp,rgesl In ladJiition.:elotiierwise
teh on its face, THIS IS AN UNREPEATED
TELEGRAM AND PAID FOR A$ SUCH, in consideration whereof it is agreed between the sender of the telegram and this Company as follows:
The Company shell not be liable for mistakes or delays in the transmission or delivery, or for non-delivery, of any UNREPEATED telegram, beyond the
amount receiviit tor, ekettslisig-thio same; nor fast mistakes or delays in the transmission or delivery, or for nomdelivery, of any REPEATED telegram, beyond
fifty times the 'sum reasstied for sending the 'est:ffeWN LESS SPECIALLY VALUED; nor in any case for delays arising from unavoidable interruption in the
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In any event the Company shall not be liable for damages for any mistakes or delays in the transmission or delivery, or for the non-delivery of this
telegram, whether caused. by the negligence of Itg serAnts or"Otherwise, beyond fifty times the REPEATED telegram rate, at which afnount this -telegram, if
sent as a REPEATED telegram, is hereby valued, unless a greater value Is stated in writing hereon at the time the telegram is offered to the Company for

transmission, and an additional sum paid or agreed to be paid based on such value equal to one-tenth of one per cent. thereof.

8. The Company is hereby made the agent of the sender, without liability, to forward this telegram over the lines of any other Company when necessary
to reach its destInittion,.;.
Messages will be-611,7;4d free Within the established free delivery limits of the terminal office. For delivery at a greater distance a special charge will be
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N6-jponsibility regarding messages attaches to this Company until the same are presented and accepted Al one of Its transmitting offices; and if any
message is sent to such office by one of this Company's messengers, he acts as the agent of the sender for the purpose of delivering the message and any notice or
instruction.. regarding it to the Company's agent in its said office.
8. The Company shall not be liable for damages or statutory penalties in any case where the claim is not presented in writing within sixty daysafter the
telegram is filed with the Company for transmission.
"7. The above terms and conditions shall be binding upon the receiver as well as the sender of this telegram.
8. NO rtpLOYEE OF THIS COMPANY IS AUTHORIZED TO VARY THE FOREGOING.

CHARLES C. ADAMS,
VICE-PRESIDENT.

CLARENCE H. MACKAY, PRESIDENT.
EDWARD REYNOLDS, VICE-PREST. AND GENERAL MANAGER.

CHARLES P. BRUCH,
SIDE-PRESIDENT.

THE FASTEST TELEGRAPH SERVICE IN THE WORLD



,(-90,41-20

---A-19-1

5.

FEDERAL RESERVE BANK
OF NEW YORK

DFFICE CORRESPONDENCE
TO

ROM

Governor Strong

DATE

SUBJECT

JIlly

1, 1920.

Discount Market Developments

E. R. Kenzel

Early in April, the bill market was very much disturbed by

indications

reason

of

that the Federal Reserve Board, or some of its members, were inclined

to the feeling that bills purchased by Federal reserve banks, bearing the indorsement of member banks, whether taken direct from the indorsers or through dealers,
should be considered as part of the rediscount line of such members.
This suggestion came about in the consideration given to the application
of progressive rates of discount.

Governor Harding had an informal meeting with

prominent dealers and bankers at our office, who represented to him that if such a

plan were inaugurated, it would effectually kill the discount market, as no member
bank could then consider bills bought in the market strictly liquid assets which they
might dispose of at any time in the market without its affecting their discount
facilities at the reserve bank, and it was the consensus of opinion that under such
conditions, member banks would cease to buy bills in the open market.
Governor Harding thereupon arranged that these gentlemen and others should
visit Washington and discuss the whole matter with the full Board, and delegations
from New York and Boston visfted 1.Nashington for that purpose very shortly thereafter.

The discussion developed that there was an inclination on the part of some
members of the Board to regard the bankers acceptance credit as an important element
in inflation and, in fact, rehash

all the old arguments that were so thoroughly dis-

cussed in 1914 and 1915.

The time allotted by the Board for discussion)one morning/was entirely inadequate and was consumed in a large part by a monologue by the Comptroller.

Feeling

that the outcome was unsatisfactory and that few of the visiting bankers had had an
opportunity to be heard at all, and none at length, Governor Harding invited them to
submit their views in writing for the further consideration of the Board, in the form



M19C.3.1-901.11-20

FEDERAL RESERVE BANK
OF NEW YORK

OFFICE CORRESPONDENCE

DATE

Governor Strong

TO

FROM

SUBJECT:

July 1, 1920.

Discount Market Developments

R
R. Kenzel
-2-

of replies to a questionnaire which would be promulgated by the Board.

This they all

agreed to do, and the meeting adjourned.
The development of the questionnaire centered in this bank and was later

adopted and put out by-the Board, whereupon Mr. Warburg and the American Acceptance
Council got busy and, with the Board's approval, prepared answers to and discussion
of the points raised, which were discussed very fully at a meeting of the Executive
Committee of the Council on May 20, and adopted as the

unanimous views of the Council.

These appear in the little pamphlet "Practical Problems in the Development of Bankers
Acceptances," copy of which is enclosed herewith, and they have been considered by the
Board, who has sanctioned the wide distribution of the pamphlet by the Acceptance
Council.

I think the danger is over, at least for the present.
A further important development, which will be felt

in

the market, but relates

more particularly to the operations of Federal reserve banks, is that the governors

in

conference have agreed that the support and helpful assistance in the developing and
broadening of the market is a problem of the whole System rather than of a few banks,

and a Committee was appointed at the last conference to prepare recommendations as to
the procedure by all the banks to this end.

Governor Fancher is chairman of the com-

mittee and the other members are Governor Morss and myself.

We have had one meeting

and I am now preparing a report for submission to the other members.
It will include recommendations reflecting in some degree the views of the
American Acceptance Council, which we all share, with regard to district banks' purchases from their members in their own district, urging that they not take from members,
the members' own acceptances, but restrict themselves to the purchase of prime bills
which members will have taken for their investment through the usual channels, and that



mi8C.3.1-90144-20

FEDERAL RESERVE BANK
OF NEW YORK
DATE--4-111-Y-1-4-4-9211.-

L;FPICE CORRESPONDENCE
TO

FROM

Governor Strong

SUBJECT.

Discount Market Developments.

E. R. Kenzel

-3-

they buy such bills freely at all times with the indorsement of the member bank;

that they exert their influence, each in its own district, with their members to
the end that member banks normally will hold for investment, as secondary reserve,
a reasonable amount of prime bills; that the district banks encourage and assist
in the development of local markets in Federal reserve bank and branch cities,
using their influence and, on occasion, their funds, to foster a call money market
or its equivalent, that would permit local dealers and branches of discount houses

to carry moderate portfolios locally; that each Federal reserve bank should normally
carry a portfolio of bills purchased in proportion to the total amount held in the
System, relative to their resources, as compared to the resources of the whole Sys-

tem, and that, to this end, where local purchases do not provide this volume, they
should participate in the purchases of those banks in the larger markets who acquire
in their daily operations an excess of bills over their proportion.
It is the hope of the committee that this will have the effect of practically re-establishing a general distribution, such as we had a few years ago, without
setting up a hard and fast rule that any bank, at all times, irrespective of the condition of their own reserve or local conditions, must receive allotments from any
other bank's open market purchases, when to pay for them they might have to immediately
rediscount.

Both Governor Mores and Governor Fancher felt that they could not get

such an iron-clad commitment as to their own banks past their directors and, therefore,
would not agree to recommend it.

I am also enclosing copy of the first installment of the so-called "Primer"
on Bankers Acceptance Credit, which is published by the Council rather than by the banks.
I assume that you will recognize the voice of Jacob under the hand of Esau.



FEDERAL RESERVE BANK
OF NEW YORK
C
December 16, 1920.
Dear Mr. Strong:

Some of the others have doubtless advised you that we had a delightful visit
here with Mr. Zeilinga.

We had a series of very agreeable and useful conversations with him and more
particularly he discussed with me the subject of refusals of bills drawn under confirmed
credits of American bankers.

He told me that they themselves, up to the time that he

left Java, had suffered no inconvenience on this account, and from our own knowledge,
there has been no refusal on any bill remitted by them to us for collection.

The whole subject is a most distressing one and has been an acute aggravation
in our banking situation since the price of sugars began to decline rapidly in the late
summer.

I have gone pretty carefully into the whole matter with Mr. Warburg and Fred Kent

on behalf of the American Acceptance Council, and am enclosing a copy of an editorial
written for the Acceptance Council Bulletin for last month by Mr. Kent, dealing with the
subject so far as we dared to at that time, and it will be followed up editorially this

month in the light of subsequent developments, since the cases have become more numerous
and a number of important court decisions have been given, the most important of which is
that of the Appellate Division, Supreme Court of this state, written by Justice Greenbaum,
copy of which I also enclose, in which is affirmed definitely the principle that the contract of letter of credit is distinct from the contract of purchase and sale of the commodity.

What happened was that in many cases importers seeking to avoid loss, if not
bankruptcy, through receiving sugars which they had contracted for at,high prices, sought
by injunction to restrain the banks from making payment under the terms of their credits,
most of which were irrevocable, and setting up in such attempts every technical question
in respect to the shipments that they could devise.



After the Greenbaum de

FEDERAL RESERVE BANK OF NEW YORK

2a

Benjamin Strong, Esq.

12/16/20.

apparently in the effort to avoid its effects, other tactics were pursued, i. e., seeking

enjoin

the beneficiaries under credits from availing of them.

A very important case

was yesterday decided adversely to the applicants by Justice Cohalen in the Supreme Court
of this state.

The printed record is not yet available but I am enclosing copy of the

ticker announcement of the decision, which is quite self-explanatory.

The main difficulty as to imports has been with respect to sight credits issued
to local customers by interior banks on the faith of which our large banks at the ports,
particularly in New York, issued their sight credits for the importers.

When prices fell

and the local customers of the interior banks were faced with ruin or severe loss, they
sought to escape from their liabilities by obtaining injunctions in their local courts, restraining their local banks from honoring the sight bills drawn on them which had been ne-

gotiated by the banks at the ports, who, of course, had the bills as holders in due course
for value.

In many cases, the interior banks, not understanding their obligation as issuers

of credit, appeared to connive with their local customers in these regards, but also in a
great many cases such local banks were brought to see the error of their ways by their New
York correspondents.

New Orleans is a sore spot and at least one of the important banks

there appears, from the one aide of the story that we have heard, to have placed itself in
a very unenviable position by declining to pay bills drawn under its confirmed credits which

were negotiated by one of our best local institutions who had issued its letters to the importers on the faith of the New Orleans letters.

The great majority of all of the cases

that have come to my attention have been sight credits, so that the trouble is not to any
material degree coupled up with acceptances.

There have been many abuses and sharp practices on the part of shippers against
our importers and some cases where refusals were absolutely justified and necessary, and
lack of experience and prudence in the issuing of credits and lack of understanding of the

nature of the obligations assumed by the issuer of irrevocable credits are at the root of
the whole thing, emphasized and accentuated by the conditions which prevailed in the commodity markets before the break in prices.



FEDERAL RESERVE BANK OF NEW YORK 3

Benjamin Strong, Esq.

12/16/20.

I had a most interesting talk just before he sailed a day or so ago on the

Aquitania with Sir Frederick Huth Jackson, who hopes to see you in London, and I learned
from him that the situation was not entirely unique with us or without precedent, as

even the joint stock banks in London had not sufficiently appreciated the nature of their
obligation under letters or credit and a London High Court had even issued orders designed
to prohibit the payment of an accepted draft.

If you have an opportunity, he will, I

am sure, be glad to relate some of his experiences to you as he did to me, hut they are
of such a nature that I should not care to enlarge upon them in correspondence.
Our exporters and banks have been experiencing also great difficulty with respect
to cancellations of confirmed credits issued by banks abroad, available to our customers.
Again, these are generally sight credits.

Curtis had a case for a client in respect of coal to France, in which, after the
coal was on the water, the correspondent bank here of the foreign bank declined to make payment under instructions received from the other side, asserting that they were acting merely
as agents.

I am enclosing a recent newspaper clipping, the statements in which I do not
think are exaggerated.
Paris.

Curtis advised me that his client finally compromised the thing in

I am also enclosing another clipping from tonight's "Post" which refers to the

wholesale cancellations in respect to coal exports and other matters which may interest you.

I have written you the above rather fully believing that you would be interested
in having some definite information at hand while you were on the other side, and trust that
it reaches you in time.

There is one other matter I would like to call to your attention, i. e., the
present status of prominent international firms, such as Balfour, Williamson & Company,

Huth & Company, and others which are established in this country through partnerships with
the English principals.

Huth & Company here is, I understand, a partnership betneen the London firm and
a resident in this country, Mr. Sonn, who is not a partner in the London house.

I am in-

formed that they have transferred substantial capital to this country and will make a full




FEDERAL RESERVE BANK OF NEW YORK

4a

Benjamin Strong, Esq.

12/18/20.

statement to us of the American firm, but prefer that that firm be accredited on the

xtent of its assets in this country, rather than through their relationship to the
London house, which does not care to make a statement here.
In respect of Balfour, Williamson & Company, the situation is just about
the same

as it was when we had luncheon here with Sir Robert.

We have a combined bal-

ance sheet of all of the houses, with the supporting schedules of investments, etc.,

with respect to each house, and a rather informally drawn general guarantee of the London
house in respect of all paper and indebtedness of the American house, in which we might
be interested, and San Francisco has the same, but we have not separate statements as

to the individual firms in this country and it is explained to us that it is impracticable
to furnish such individual statements.

I do not think it is material with us whether we

have statement of the New York firm, which we know employs no assets in this country.

They are not borrowers in this market and their paper which we see consists exclusively of
commercial bills drawn on them against imports of staples which, if they come to us at all,
bear very strong banking indorsements, but in San Francisco it is different.

Balfour, Guthrie & Company there are large borrowers, and the San Francisco bank
feels very strongly that the time is rapidly approaching when they must require a statement
of the San Francisco house or decline the paper.

Calkins has been in communication with

me regarding the various aspectsof the whole matter and I feel that if you could pick up
some definite information regarcingtheir present status, it would be helpful in the whole
situation here.

As is usual with these international houses, their combined balance sheets

are always prepared as of a date that is stale.

For instance, our last statements,

am as of December 31, 1919, but were not received until September of this year, so that up
to that date our information was as of December 31, 1918, almost two years old.

Calkins feels that it would be the part of wisdom for Balfour to incorporate in
this country-their American interests, and since the Gibbs interests have incorporated here

with transfer of capital to this country, I know that Sir Robert has been giving further
thought along that line, and Mr. Blyth, one of the New York partners, is now in London, and



FEDERAL RESERVE BANK OF NEW YORK

5.

12/16/20.

was drected to tnke with him general information as to the application of tax laws,

0

etc., as to British capital invested here.

Without burdening you with further details of business, I shall cut this
-hort, but want to tell you how we all look forward to seeing you again in the office
tnd how we confidently hope that you will come back in fine fettle and, by not undertaking to do ten mens' work every day, keep fit.
I have received your very kind messages via Mr. Jay, and your postcard,
which are much appreciated.
With best wishes for a Merry Christmas and a great many very happy New Years,
I am,

Sincerely yours,

nzel,
E. R.
Depute Governor.

Benjamin Strong, Eso.,
c/o Morgan, Grenfell & Company,
22 0 Broad Street, E. C. 2,
London,England.
Enos.

P. S. I also enclose copy of Mr. Warburg's annual report, as chairman of the Executive

Committee of the American Acceptance Council, in which he deals rather vigorously with
the subject of defaulted credits but in which he has, perhaps unfortunately, linked it
up with acceptances rather than stressing the point that it is the obligation under the
letter of credit that controls.




copy

FEDERAL RESERVE BANK
OF NEW YORK

TTOKER ANNOUNCEMENT

Fall in price no bar to contract Justice Cohalen in Supreme
Court denied a7plication of 24 sugar buyers in Baltimore and other cities
for a court order prohibiting A. H. Lamborn & Company from negotiating
Letters of credit obtained

on a

contract to deliver a cargo of Java sugar

to the plaintiffs.

Consignment was valued at
was made for delivery

approximately t1,100,000 and contract

at 220 a lb. shipments

Taiho Maru in August last.

to be made by the Steamer

Defendants however

said

they were able to ship

two weeks earlier by the vessel Texas Maru and did so.
c,?..rgo consignees refused to acept delivery.

plaintiffs contended

in

their

applic-,tion

On arrival of the

Market price had fallen and

for the injunction that Lamborn

& Company had no right to substitute another vessel for the one named in
the contract.

Justice Cohalen

however held

that to

enjoin

Lamborn & Company from

negotiating the letters of credit received in consee_uenee of the contract

would be in

effect making of a new contract through the court; something the

court did not feel called upon to do.




Applic'Ition was therefore denied.

(Business at l!ints and Assay Offices)

.

Sec. 1.

3. -- ADVANCES ON PARTIAL PATIENTS ON DEPOSITS.

In case of deposits, the fineness of which may be readily deter-

mined approxinately by inspection, payment nay, at the discretion of the superintendents of the coinage mints and the assay office at New York, be made within
10 per cent of their value, or within 2 per cent when already closely determined
by assay and awaiting renelting or reassay for exact determination:
No partial payment shall be made on a deposit containing less than

PROVIDED,

5,000 in gold

or 5,000 ounces of silver.
Sec. 2.

In case of deposits of foreign coin of known value where the de-

posit is not less than ::a,000,000. an advance of 99% of the value of such deposit
may be made.

PROVIDED, that the depositor, a bank of unquestioned standing, gives

a written guarantee as to the weight, count and value of the gold.




)119C. 3.1 6:44-4.22

FEDERAL RESERVE BANK

OF NEW YORK

OFFICE: CORRESPONDENCE
To

Mr. Case

DATE April 26,
SUBJECT:

1Q23'

Cuba: Its currency and finances.

With respect to proposal to establish branch
of Federal Reserve Bank.

F-Rofvra. R. Kenzel

Before 1920, but particularly during that year and subsequently, the project
of establishing a Government bank of issue in Cuba has had serious consideration by

the Cuban Government and foreign banks operating in Cuba, and our Government. The
support of the project by the foreign banks, which are largely American and Canadian,
was lukewarm, particularly the National City Bank, which operates several branches,
has considered that the establishment of a branch of the Federal Reserve Bank of New

York in the Island would be the best thing that could possibly be done in the interests of banking in the Island.
addressed to Governor Strong.)

(See George E. Roberts! letter of August 15, 1921,

Governor Strong's reply, dated April 17, 1921, indi-

cates his general objections to the plan and particularly he states that the law,
under its then present terms, would not permit.

He further states that his own opin-

ion has remained unchanged from the beginning "that Cuba should have a central bank

of issue, but that it should be under American supervision," andthat "whe_
ther that is feasible or not remains to be seen."

He further

I

not believe

in our own bank of issue establishing offices and performing its normal banking
functions

outside of continental United States, and especially outside of our own

country; that is, that p
and direct sovereignty.

of the United States over which we exercise complete
He refers to some suggestion that we had theretofore made

of a means by which the greatly mutilated and worn out currency in circulation in
Cuba might be retired and fresh supplies issued without involving our doing a banking
business in Havana.

I have not found in the files any copy of the suggested plan

referred to.

lr. Roberts, replying under date of August 20, states:
"I would not favor the establishment of reserve bank branches around
the orld, but, in view of the Platt amendment, which establishes a degree
of control over the finances of Cuba, it has occurred to me that possibly




1111SC. 3.1 .M.442

FEDERAL RESERVE BANK

OF NEW YORK

OFFICE CORRESPONDENCE

DATE April 28,

ToMr. Case
FROM

SUBJECT:

Cuba:

192

Itz_ourrenay_and_finances

E. R. Lanza'
-2-

an excuse might be found for the establishment of a branch in Havana, provided the policy was agreeable to the Cubans, and the Cuban Government would
pass legislation making it the bank of deposit for the Cuban Government.
The branch doubtless would have deposits enough to provide it with capital
for its business there, so that there would be little or no investment of
American funds outside the country."
Incidentally, about that time the National City Bank was invited by the Cuban
Government to confer and recommend banking and financial reforms in the Island.
A memorandum in the files, dated September 28, 1921, unsigned, but apparently
ted by Governor Strong, is as follows:
"Mr. Roberts called, and in verbal reply to the inquiry contained in
the attached letter I told him that we would urgently oppose any plan to
have the Federal Reserve Bank of New York open a branch in Cuba, as it would
be an extension to extra territorial administration of the Federal Reserve
System, subject possibly to legislation and control by a foreign country,
which we could not contemplate. I pointed out that if the treaty with
Cuba could be further amended so as, in effect, to write the charter of
a central bank of issue into the treaty, under such terms as would give it
substantially American control and supervision, and the basis for a thoroughgoing revision of banking control in Cuba generally, I should regard it
the most satisfactory method of dealing with the Cuban situation.

/di

"He said this thought had not occurred to him.
lent and said he would see what could be done about it."

It struck him a
itas

Under date of September 29, 1921, letter of Mr. Case, addressed to Mr. Peabody
advised the action taken by our Executive Committee that day, with the approval ofthe

Federal Reserve Board, in appointing the National City Bank of New York our correspondent and agent in Cuba, with the understanding that no actual transactions would be en-

gaged in until regulations should have been prescribed by the Federal Reserve Board, and
recited
Lthe occasion for the action, namely, the moral support publicity of the appointment
would give in Cuba where the reserve bank is highly regarded.

It was hoped that it

would end the runs on the branches in Cuba, brought about by organized propoganda.
apparently had that effect.



It

MISC. 3.1 60M-4-22

FEDERAL RESERVE BANK
OF NEW YORK

OFFICE CORRESPONDENCE
To

DATE April 26,

Mr. Case

1Q2

sueJEcT,Cuba: Its currency_and_finannea

-3-

Under date of February 8, 1923, Mr. Case's memorandum to Governor Strong commented on the conversation had with Mr. Dwight Morrow with regard to the question of
supplying Cuba with fit paper money, and Mr. Morrow's inquiry if we had given consideratio

o the idea of circulating gold notes on the Island.

of F

Governor Strong's reply

ary 19, follows:

"This whole question hinges upon the larger question of whether Cuba shall
have a Cuban Banking or Currency System, or be nursed by the United States
Government or the Federal Reserve System. General Crowder, Governor Harding
and the Department of State all agree, at last reports, that they should have
their own system. If they fail to adopt one (and one is now pending designed
by Harding) then maybe the American Government might wish to attempt some plan
for introducing clean money. I am positively opposed to our undertaking any
expense, duty or responsibility in the matter unless our Congress directs us to
do so. We are novoriticised for the large services performed gratis for American banks, not to mention the Treasury, and
cannot see the logic of doing as
much as is proposed for Cuba, also gratis
thoughts" of which the crop if perennial
abundant."

March 15, 1923, Dr. Burgess' letter

the Federal Reserve Boardeaclosed

table showing $97,000,000 currency transferred by this bank to Cuba during the years
192
1921,b,

192 and through February, 1923, which, with transfers and shipments by

other banks, was increased within the period to $101,000,000, as compared with
16,000,000 received from Cuba, these figures exclusive of direct shipments by the
National City Bank prior to 1923

.

Their shipments to Cuba during 1922 were

4'6,137,000.

Governor Strong, in a letter dated June 13, 1921, addressed to Mr. Prather
of the State Department, opposed the idea of a Cuban central bank, noting that the
Cubans were lacking in skill in banking and currency matters and that the American
currency circulating the Island in effect constituted a loan without interest by Cuba
to the United States.



MISC. 3.1 60M-4-22

FEDERAL RESERVE BANK

OF NEW YORK

OFFICE CORRESPONDENCE
To
FROM

DATE

1g2

suBJEcT:Cuba: Its currency and finances

Mr. Case

F.

April 26,

_4_

R. Eenzel

The pertinent facts as to CubaEre that the investment3of American capital

in the sugar and tobacco industries which were made before 1920 were tremendously
augmented as the result of the crisis following the collapse of sugar prices in
1920 when the Island was reduced from the extreme of prosperity to' the opposite
extreme of adversity.

American and Canadian banks operating in the Island had

made very substantial advances to centrals which, following the collapse, became
rather permanent investments, so that today American interests control a very large
majority of plantations, centrals, sugar railroads and warehouses.

The excessive

imports of the Island during its flush time, many of which were not actually re_
ceived in the Island until after the collapse, were the immediate cause of the greatest distress through the inability of importers to take up their bills.

Important

failures among the native banks followed quickly and the losses to American shippers
and to the American and Canadian banks which resulted were enormous.

Inspired by

blackmailing newspapers, runs on the American and Canadian banks which operate
branches not only in Havana but throughout the Island, made it necessary for them
to import very large amounts of American currency to meet withdrawals of deposits.
75% of deposits held as cash in vaults was not considered too large for safety.
The only currency (in addition to gold, which quickly went into hiding) is U. S.
currency and its

physical condition quickly becomes deplorabl

unclean habits of the population.

The expense of its redemption and rep

with new currency has hot been calculated but is sufficient to operate quite effectively against exporting the old and importing the new.
The difficulties of American banks with respect to collections in the
Island, which are always slow, adds another difficulty and expense in conducting
trade with



the Island.

The moratorium declared in October, 1920, added materially

MISC. 3.1 50M-4-22

FEDERAL RESERVE BANK

OF NEW YORK

OFFICE CORRESPONDENCE

DATE

To Mr. Case
FROM

April 26,

ig2

SUBJECT: Cuba: Its currency and finances

E. R_Kenzel
-5-

to that difficulty and I underst
from two causes: one, the reduc

that severe losses
on of goods after the moratorium which had deteriorated

during it and through thefts of goods which just disappeared from the wharves and warehouses where they were placed on arrival.

Also, the practice or law of the Island

which permits delivery by the carrier to the consignee without surrender of shipping
documents caused great loss to American shippers.

Practically the only native bank of

any importance that survived the cataclysm was Gelets & Company and that is a Spanish
firm rather than Cuban.

The Cubans, being all mixed blood, more or less black, are regarded by bankers
in the Island as an unstable people, in whom are emphasized the bad qualities of their
origins.

The American banks operating in the Island are:

The American Foreign Banking

Corporation, the Bank of Central and South America, the National City Bank of New fork,

aneT-a-iderstand that the First National Bank of Boston is about to establish itself
in the Island.

The American Trading Company is also classed as a bank.

The Royal Bank

of Canada preceded the American banks and operates many branches throughout the Island,
the Canadian Bank of Commerce and the Bank of Nova Scotia also have branches in Havana.

It would seem that a very great service could be rendered to American as well
as Cuban interests in the Island by the Federal Reserve System if the law would permit

an agency to be established there which could facilitate the business of collections in
the Island for reserve banks and their members, the redemption of unfit Federal reserve

aote issues in the Island, and to maintain there a reserve supply of currency sufficient
to relieve the American banks there established from the burden of carrying excessive

cash reserves; also, it is conceivable that the strong influence of such an agency might
correcting
have the effect of argatimg -some of the malpractices of busi ness as conducted in the




MISC. 3.1 60M-4-22

FEDERAL RESERVE BANK

OF NEW YORK

OFFICE CORRESPONDENCE

DATE April

Tn Mr. Case
FROM

SUBJECT.

28,

92_

nuba: Its currency and finances

I. R. Kenzel
-6-

Island and establishing a better relation toward, if not better moral control over,
the finances of the Island, whose securities are held almost entirely in this country.

Whether or not it would be either safe or desirable for them to rediscount in the
Island is a subject for careful study.
I would suggest that the views of Mr. Albert Straus on the whole proosition would probably be as enlightened and as valuable as any that we could have.




I LA I -4 .tin VIMAW! =1 II
CLARENCE H. MACKAY, PRESIDENT.

TELEGRAM

RECEIVED AT MAIN OFFICE
225 CLEMATIS AVENUE,

WEST
TELL

M BEACH. FLA
NE CALL

POSTAL'

DELIVERY NO.

This is a fast Telegram unless otherwise indicated by signalalter the nunsberof words:..Blue"(Day Letter). W .L.'"(Night Letter)er"Nite" (Night Telegram)

60b1SS 109

STANDARD TIME INDICATED ON THIS MESSAGE.

27JRM ZP 58
CB NEWYORK NY JAY 16'44
BENJAMIN STRAONG
BREAKERS

HOTEL

HEAD OFFICE CABLED HOSHINO SHAKE
TOTKIO RESULTHIG TEMPORARY

PALIBEACH FLO

ON FIFTEENTH QUITE STRONG IN VICINITY

OBSTRUCTIONS TO

FEW CASUALTIES MOSTLY RESULT CONFISTON DAMAGE
SLIGHT

NOT COMPARED

TPANSPORTATION AND COMMUNCATI4

IN

GENERAL

TO SEPT CATASTROPHE BUSINESS CIRCLES NOT

AFFECTED AND STOCK MARKET QUIET HOSHINO ALSO ADVISED CENTER OF DISTURBANCE

ABOUT SIXTY MILES SOUTH OF TOKIO AND POSSIBLY RESULT SEPT




KENZEL

DISTURBANCE

CONFIDENTIAL MEMORANDUM

July 8, 1925.

'id:

B. S.
FROM: E.R.K.

Sublect: Failure of DeaqL_Onativia & Co.

You have probably heard something of the failure of the Stock Exchange

house of Dean, Onativia & Co., which was suspended on Friday, July 3, with liabilities of about $35,000,000, said to be the largest failure ever made by an Exchange
house.

Their loans in New York were well-margined and those that were sold out
realized very well in a rising market.

The size of their commitments was a surprise to almost everybody and the
fact that it has not disturbed the market at all is probably due to the peculiar
position of the house and the nature and occasion for its suspension.

It relates back to Chicago and the effort inaugurated a year ago to combine
the Rosenbaum Grain Company, the Armour Grain Company and others into the Grain Marketing Corporation.

The gossip, as I hear it from friends quite conversant with the grain trade
in Chicago, is that the Rosenbaums incorporated their interests and that Dean, Onativia
& Co., which had become somewhat of an issuing house, had underwritten the stock.

The

success of this issue if it had advanced in the market might have helped the sale to
the farmers of stock of the Grain Marketing Corporation.

Then two of the Rosenbaums became partners in Dean, Onativia & Co., contributing as capital 50,000 shares of the Rosenbaum stock as at $50 a share.

The effort

of the firm to advance the market so that they could liquidate this block and convert
that capital into cash resulted in their having to support the market and take in large
amounts of the stock that had previously been placed, so increasing rather than decreasing their position in the stock.

It seems that this stock was borrowed on in Chicago at $50 a share and that
very recently the Chicago banks marked the loan value of it down to $5 a share, with

the result that


bankruptcy proceedings promptly ensued.

-2-

The papers now state that friends, customers and creditors of Dean,
Onativia & Co. will save the firm by putting up $2,500,000, and take over their
slow assets, including this stock.

Simultaneously it is announced that the Grain

Marketing Corporation will be dissolved.
It seems that the Chicago banks loaned the Grain Marketing Corporation

$4,000,000 for one year as working capital, the loans to be repaid prospectively
from the proceeds of sale of the company's stock to the farmers, but the farmers

have not bought, the $4,000,000 obligations mature on July 28, and the Rosenbaum
interests having received this black eye, it looks as if the effort will be abandoned.

Various middle-western states, including Illinois and Indiana, have invoked

the operation of their Blue Sky Laws against the sale of Grain Marketing Corporation
stock and it looks as if the jig was up with thatventure.
Also off the record I hear that the Grain Marketing Corporation did not
behave very well in the collapse of wheat prices in the spring; that the practical

managers of it, who have long been regarded as speculators, did not remove their
hedges when they sold the farmers' cash wheat at from $1.40 to

ti.ao

a bushel, this

resulting in a large short position on a rising market, and it is hinted in some well
informed quarters that it was through them, in the effort to retrieve their position,

that some rather notorious bear operators were brought into the picture and that this
was probably brought out in the recent Jardin investigation and is a possible if not
probable explanation of the attitude taken by the Chicago banks in respect of the Dean,
Onativia loans against Rosenbaum stock.
I am attaching for your ready reference two clippings containing the announcements above referred to.




W3C.3.i40M-424

FEDERAL RESERVE BANK
.

OF NEW YORK

OFFICE CORRESPONDENCE
To

DATE

Augmet

1926

217'

SUBJECT:

24 M. Kenai",
_

Before the advance in the discount rate at New York on Auguet 13,
These mtes

unindweed 90-day bankers bills eere quoted at 8-5/8 de 8-1/2%.

*ere su, orted by the =vier:A& demtud of foreign leek buying and Federal Re-

serve Banks taking the shorter meturitiee freely.

L e modest; cell money we 4 - 4-1/2%;

The supply of new bills

time money 4-3/4%;

commercial piper

4 - 4-1/4 - 4-1/2% firming during August as the seLeon adv,nced.

New York

Pill dealers'

banks were lending, good commercial customers et 4-1/4 - 44/2.

portfolios averaged eroure' $30,000,000 and they were paying, 3-1/2 - 3-8/4 for
their moderate money revirements.

their general desire
market.

WKS

None wished to mere as portfolio, and

to avoid taking bills unless buyers were in the

There we little ere dth to the mtrket, end higher retee were in

view Whenever the sueply of new paper ehold Meterielly increace.

Following the advance in diecount rate, all money ratee firmed
about 1/4%.

Federal buying rates were advanced in two stages 1/4 of 1% for

the active msturities. And the carrying rate advanced from 3-1/2 to 3-3/4%.
Inthe discount market rates immediately followed upward so that the relation

of the merket to Federal rates

Wt6

restored.

This resulted in dealers -uoting

unindoreed 90-&y bine at 3-1/8% bid; offered at 3-3/4% with

E

tendency to

advance a further 1/8 or 1/4% ae eeesonel bueinets eroueht incre,sed

flu

elY.

The eueely be not incrweed as yet for two ;, riacipel reteeons,
1. e., some banks would not sell freely at 3-7/8% bills which they were accepting, end the cost of credit and discount combined he prevented some bills




192

FEDERAL RESERVE BANK

MISC. 3. 54014-4-24

OF NEW YORK

OFFICE CORRESPONDENCE
To__

DATE

192_

SUBJECT

FROM

being dram where the domestie customer had the option of borrowing.

For

inetGnce bank 1.Lne et 4-3/4 on grain, cotton, etc., bEve been available and
taken rather than accepttnee credit Which with discount would cost at least

4-7/t - 51.
Distribution he not improved A 3-3/4 Nad dealers expect 'Vat
when cotton bills begin tobe drawn in volume that 4% or even a higher rate

will be reluired to attr ct general buying.

Government issues do not

cam,Aste so strongly now because of the reduced Imount of short meturities, but

call riid time money rtes at from 1/2 - 11 above 4% does prevent distribution.

Also short Municipals of pratty fair quality are offered at 4-1/4 It appetra to me that with the undoubted bullish sentiment that
exiAs on money, that presently the bill rates will be pushing the 4% discount
rate, but that until baik ratee for commodity tonne exceed 5% the volume of

bills will be below the uaual eeaonal proportion of bills u comp red with
bank

.

This will have a tendency to fcrce rediscounts rtther then

sales of bills to Reeerve Bnks.
System statement of August 23.




This was a. feature of the Feder 1. Reserve

July BD, 1028.
Dear Governor Strong:

I was delighted to learn from Mr. Harrison upon his recent return after
seeing you of the great improvement that you have enjoyed during the past few
weeks, and your letter from Evian on July 5 was another welcome evidence of your
recovery.

Mr. Harrison tells me that Dr. Stewart had spoken to him only very
briefly of his apprehensione over the volume of credit that American banks are
extending for foreign account and probably does not understand the business that
has been and is being accommodated or the transactions which are permitted under
the Board's new ruling of last autumn.
From my frequent and almost constant contacts with the men who are

doing the bulk of this bueineas, I am convinced that there is very little undertaken for foreign traders, mills or industries, without the intervention of foreign banks and the business as it is done in New York for foreign banks is identical with the very large volume of similar business that is
and also in Paris.

being done in London

American banks make available to their foreign bank friends lines of
acceptance credit which the foreign bailee parcel out to their customers, advising
the American bank in each case that under their errangeraent they have opened a
credit in dollars on the American bank in favor of some designated shipper against
goods to be shipped to a designated customer of the foreign bank. The American
name for these is reimbursement credits and the foreign banks are directly debtors
to the American banks. I believe that more than 90% of credits given by American
banks to foreign takers is to banks.

The new ruling of the Board did not inaugurate thie business but it
permitted it to be extended in respect of certain transactions in imported goods
In practice, it applies particularly
after they had reached the country of import.
to the sale of American cotton, ex-warehouse or steamship in Germany.
Before the
although many bills were drawn in such transactions they were ineligible,
ruling
now they are eligible providing that the usance of the bills does not exceed the
You will recall that the Reserve Act as
credit time customary in the trade.

originally drafted specifically permitted financing movements of goods between the
United States and foreign countries and between two foreign countries and we have
always regarded ae eligible also bills secured by staple goods stored in foreign

countries.

I am quoting below the most recent figures as

Acceptance Council on the volume of bills outstanding at
compared with the previous month and the year previous:

bled by the American
the end of June 30 lest,

Totals a year ago were $751,000,000

At the end of May,

At the end of June,

The ciaseification according to



4,040,000,000
0,026,000,000
the

nature of the busineee shows that ooepered

with

July 20, 1928.

-2-

a year ago imeose credits have increased *156,0'0,000, export credits have increased *99,000,000 and in this claseification is included credits given for the

purchase of cotton by spinners in Germany from stocks of cotton held in Germany.
The domestic storage credits have increased *17,000,001, dollar exchange

7,000,000 and the largest increase, 1. e., *114,000,000 was in credits based on
goods stored in or shipped between foreign countries. This includee credite to
American cotton houses that carry large supplies of cotton abroad, and also a
great variety of goods moving between foreign countries. Prineipal among these
are Swedish ore going into the Ruhr district, coffee from Brazil to France, copper
drom Chile to all of Europe, the export of Swedish matches in world trtde, lumber
end cellulose from Finland and Scandinavien countries to England and other Turopean
countries.
I have been informed repeatedly by prominent English benkers, includ-

ing the Pertngs, Schroder, Huth and Samuels, that they have eilvya done these types
of transactions and that it was regarded as entirely desirable that they should extend British credit in the movement of goods of British origin or osnerehip through
every channel of trade in foreign countries up to but not including consumers' credit.
De Neuflize has told ale that before the war French bankers did a good, deal of foreign
sort and / have understood from the many conversations 4ith our
recent visitors from the Bank of France that such bills were eligible for discount
at the Bank of France.
financing of tne same

From the very important sampling which our purchases for the System so-

count and for foreign clients gives us the opportunity to make, the bills which we
have recently taken have been principally in the following transactions: exports of
cotton, atorase of tobacco, imports of silk, imports of coffee and storage of sugar.
The domiciled bills discriminated against by the Bank of England and by

the Bank of France I have understood to be bills accepted in sterling or francs by
foreign banks or merchants who generally kept no considerable assets in England or
France and who would have to be sued abroad in case of trouble.

The big complaint in Sew York on the part of the banks is the competition
on the part of the London clearing banks for the reimbursement credit business of
the strong German and other foreign

barites, the

acceptance commissions way below the 1%

competition taking the form of cutting

per annum regarded oy American /Asks as a

The Midland Bank has been the worst
Quite recently, on account of the higher discount rate

competitor in this regard.
in New York, a little businese
has been going to London and some to France, but in all of the cases. I have heard
proper minimum.

the tskers of credit in this transfered business have been Alerican shippers.

Also

recently there have been considerable amounts of old time finance bills drawn by
American banks and firma on London and Paris. A good deal of teis has been just plain
berrowing but some has

been joint account to permit the foreign banks and firms to
take advantage of the
here.
Much of that money has been loaned
on the Stock Exchange, as it used to be years ego. American banks with foreign
branches have drawn quite heavily at ninety days on those branches and the bills are

higher interest rates

discounted in Paris and London.

Our two French friends, Messrs. Brevet and Guitard, sailed for home, the
former about the middle of June and Guitard last week, and two more from the Bank of
France, Messrs. Rousseau and Guerin, are due here on the 28th for a study period of

three months.

I should be glad to go over this autumn or any time if / could be of

assist-

ance to the bank of France in setting up a more important money and discount market
there. From conversations that I have had with Messrs. Quesmayand Reist, I judge



July 20, 1928.

-3-

that they are anxious to encourage the granting. of a substantial amount of
foreign commercial credita by French banks and bankers and to make the Paris
discount market much more important. The difficulty so far as this program
would apply to American takers of credit lies in the limited lines granted
by French acceptors, 500,000 to 1,000,000 francs seems to be about their
limit and that doesn't go far with a cotton shipper like Anderson ,Pc Clayton.

I shall be glad to discuss these affairs more fully with you when
you return and in the meantime I will have some Lore definite aguree lined
up as to what our more -,rominent acceptors are doing for foreign clients.
Sincerely yours,

E. R. NEN2F,L.

Eenj. Strong, EN.,

c/0 Messrs. Morgant& Company,
14 Place Vendomey

Faris, France.

FROEX




AMERICAN ACCEPTANCE COUNCIL

Monthly Acceptance Survey, Advance Report
TOTAL OF BANKERS ACCEPTANCE'S OUTSTANDING FOR ENTIRE COUNTRY CLASSIFIED ACCORD-

ING TO NATURE OF CREDIT

June 50 1928

May 31, 1928

June 50, 1927

Imports

1-329, 486, 311

017, 929, 635

t 293, 902, 299

Ex,crts

500, 682, 829

383, 562, 435

261,412,053

19,898,724

18,910, 222

19, 233,513

117, 277, 473

133, 114, 546

100,065, 651

25, 204, 602

25, 434,516

18, 684, 602

175, 615, 356

161, 983,822

57,972,055

Domestic Shipments

Domestic Warehouse credits
Dollar Exchange

Based on g,00de, stored in or
shipped between foreign
countries




.,




THE FEDERALIST

MR. EDWIN R. KENZEL
Mr. Edwin R. Kenzel died on August 9, 1933. He had gone
to St. Andrews, New Brunswick, to spend his vacation and the
end came suddenly soon after his arrival.
Mr. Kenzel had been associated with the Federal Reserve Bank

throughout its entire history.
He joined the staff as Assist
Cashier in November, 1914, and was its first appointive Officer.
Later he was made Controller of Investments, and in 1920 he
was made Deputy Governor, which position he held at the time
of his death. Prior to his association with the Federal Reserve
Bank, he had been a member of the staff of the Chemical National Bank. He was in charge of acceptance operations at the
Federal Reserve Bank. Mr. Kenzel was a member of the Ameri-

can Acceptance Council, and he was a pioneer in the development of the acceptance market in this country.

Because of his position in the Federal Reserve Bank, and
because of his knowledge of investments, he was widely known
to the bankers of New York City, whose esteem and respect were
a sincere tribute to his character and ability. His home was in
New Rochelle, where he was senior warden in St. Paul's Episcopal
Church. He was fond of golf and was a member of the Green
Meadow Country Club of Harrison, N. Y. He was also interested
in painting and was a member of the Salmagundi Club in New
York City.
The Federal Reserve Club has lost a valued friend. Mr. Kenzel

always stood ready to aid the Club by advice and help, and the
officials of the Systematic Fund particularly owe much to his
knowledge of investments. No move was made without consulting him, and his advice, based on sound judgment and knowledge,
was always of the best.

To Mrs. Kenzel the Federal Reserve Club extends its deepest
sympathy.

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