View PDF

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

120
, Mar.-Apt.
to Siam.
-

Shanghai

1 Far East,
tingumhed

govt.. and
,

Chapman

C. of C.,
Research

iii Phi. Beta
nma Delta.
me: Tucson

,,
'°,,z77,,se;''

Y- "c;
siren-John"
-

restras and
(ca, Mexico.
00 conce.
rts

.

with N.Y.
T ose.

Pn-

..e. harmony,.

R.I. Coll. Pharmacy and Allied Scis., 1953; LLD..
W.Va.

Wesieyan

University. 1954.

College.

1954,

Northeastern

'lulls University. 1955. Temple

University. Brandeis University. Pratt Inst.. 1961.
Pasadena Coll., 1964: Ed.D., Franklin Pierce Coll.,
196o; m. Phyllis Elizabeth Kirk. June 27. 1927:
children-Harold Robert, Phyllis Rosanna (Mrs. Victor

Ka...). David (dec.). Ordained to ministry Meth.

Ch.; instr. Southwestern Coll., 1927-26; pastor N. Snore

Ch., Glencoe. Ill.. 1928-33, First Meth. Ch.. Topeka.
1933-38. Elm Park Ch.. Scranton, Pa., 1938-45, Firs;
Meth. Ch., Pasadena. Cal.. 1945-51: Pre, Boston C.(
1951-67, pres. emeritus. 1967-72. Dir. Sterling Drug
Inc.: dirs, adv. bd. State Street Bank & Trust Co. Mem.
Univ. Senate. Meth. Ch. Co-founder Religion in Higher
Edo. Found.. 1946. Trustee N.E. Deaconess Hosp.;
chnin. bd. Council on Religion and internat. Affairs. bd.
dirs. Giochei Mountain Rehab. Center. 1967-72. Hon.
di, Alexander Graham Bell Assn. for Deaf. Inc. Mem.
Am. Acad. Arts and Stir.. Phi Beta Kappa. Delta Tau
Delta. Pi Kappa Delta. Beta Gamma Sigma. Pi Gamma

Mu. Mason. Clubs: Algonquin, University (Boston).
Author: A Year of Special Parties. 1927: The Prophet
Jeremiah. 1953. Home: Annisquam MA Died Feb. 20,
1972: buried Mt. Adnah. Anmsquam MA

- of Leopold
0c41: comch . V CASE, J(AMES) HERBERT. banker: b. Elizabeth.
gold medal
NJ.. Aug. 20.1872; s. Samuel Pyart and Susan (Thorn)
al, Hamburg.
C.: educated Lansiev (Elizabeth) School: LL.D.. Elmira
s
concertos.
College. 1931, Colgate Univ.. 1942: married Alice
for piano: 7
Needham. Sept. 28. 1898: children-Everett Needham.
1972.
James H. (dec.), Elizabeth Parker (Mrs. Hamilton
Robinson) (dec.). Successively sec. and vice ores.
ng engr.; b.
Plainfield Trust Co.. 1902-17; v.p. Farmers Loan &
MC 1, 1875; s.

B.S. in Mech.
D.Eng., 1945:
rary), Tampa
cry. August 14,

0 phir. Utah,
s since 1907, as

er Mining Co..
S. A. Gold &
.hern Ry. Co.,
Can., Alaska,

ipa Univ. Dir.
.tenement, Col.

ing and Metall.
Beta Pi, Sigma
32 deg.). Club:
Rugby

Rd.,

I.*. b. Kansas
mencer and Julia
93: M.S.. Cornell

i. Mary Margaret
lite 24,
1899:
:odore Johnston.




Trust Co., N.Y. City. 1912-17: dep. pox. Federal
Reserve Bank. N.Y. City, 1917-1930. chmn.

1930-36; partner R. W. Pressprich & Co.. N.Y. City.
1936-40: cons. to pres. City Bank Farmers Trust Co.,
1941-54: dir. City Bank Farmers Trust Co.. Lehman
Corp. of N.Y.. Witherbee Sherman Corp.. until 1957.
American mem. of Netherlands Purchasing Commn.,
1940-42. Trustee. chmn. finance corn.. Ministers and
Missionaries Benefit. Bd. of Northern Baptist Cons.,
1922-47, financial cons., from 1947. Director of
National War Fund. 1942-46. Pres.. Assn. Community
Chests Am.. 1930-33. treas.. 1936-46: trustee and chmn.
com, on finance and Investment. Elmira Coll.. 1929-31:
mem. Sch. Bd.. Pub. Library and Sinking Fund Commn.

of City of Plainfield. Decorated Medal of Merit.
Comdrs. Cross with Siars. Order of Polonia Restituta.
1924. Republican. Baptist. Clubs: Union League (bd.
goys.), Downtown Assn. (N.Y. City). Author.
Desirability of Commercial Paper as Banking
Investment: Report to U.S. Treasury on British
Short-term Financing. Home: Plainfield NJ Died Aug.
4. 1972.

CASE,

LORENZO DOW, ciergym.;

b.

at

Watertown, N.Y.. Jan. 25. 1872: s. odward E. and
Lorain (Weese) C.; Si, Lawrence C., Canton. N.Y.,
Fat_ 1906; (D.D.. Lombard

1929-30; M.D.. Boston U.. 1934: m. Rose Grumman(

Dec. Ii. 1936; children- Mane. lames. Rotating in
St. Elizabeth's Hosp., Boston, $34-35. gen prac
medicine. Bklyn., 1935-42: med. officer VA Faciln
Vi arcs, Tex.. 1442-44, VA Hosp., Columbia. S.C.. 19
med. officer, chief outpatient serviCes VA Hosp.. Br

N.Y., 1946-47. asst. chief med. officer. chief

officer VA Outpatient Clinic, VA Regional ofr
Bklyn., 1947-56: mgr. VA Outpatient Clinic. Bki
1956-60: dlr. VA Hosp., Bklyn. 1960-73: chief
con. bur, disability dererminations N.Y. State

Social Services: adj. prof. biology, cons. in med.
C.W. Post Coll.. Greenvale. N.Y. Mem subcomm g
community relations Fed. Exec, Bd.. 1965: pres. Bette
Bklyn. Corn., Bklyn. Hall of Fame. Served to mai.. M.C.

AUS, 1944-46. kecipient award for dedicated merit,
service to vets. Italian Hist. Soc. Am.. 1961. Fellow Aiy.

Coll. Chest Physicians. Am. Coll. Hosp. Adrrunstrs,
mem. A.M.A., N.Y. State, Kings County (hosp. an
profl. relations corn.) med. sacs.. Ant.. N.Y. Star,'
Bklyn. socs. internal medicine, Am. Legion. Addresd
Brooklyn NY Died Mar. 18. 1973.
CASEY, DANIEL
VINCENT, journalist: k
Crawfordsville. Ind.. March 14. 1874: grad. Univ. N..,
Dame, 1895; Instr. English composition. Univ. NOT.
Dame, 1895-6; subsequently entered journalism mm
held various positions as reporter and corr.: sp'l corr. 6
the field during Spanish-Am. war for Chicago Record
Residence: Crawfordsville IN;

CASHIN, JOHN MARTIN, judge; b. Kingston. N.VJ
Aug. 31. 1892:n. Martin J. and Catherine (Kelliher) C
LL.B., Cornell U.. 1915; m. Carolyn Markle. Dec. 9
1928. Admitted to N.Y. bar. 1916; city treas., Kingston
1922: asst. U.S. arty.. 1922-25: counsel Fed. Prohibizior

Adminstrn.. N.Y.C., 1925-26; corp. counsel. City
Kingston. 1935-41: county judge Ulster County. N.Y.
1943-55; U.S. judge Southern Dist_ of N.Y.. 1955-65
Mem. N.Y. State. Ulster Co. bar assns.. Phi Delta Pli
Home: Kingston NY Died Oct. 21, 1970.

CASHMAN, EDWIN JAMES. carp.

exec.: t

Owatonna. Minn.. Oct. 26, 1904: s. Thomas Eciwan
and Margaret (Laughlin) C.; student Georgetown L.
1922-24, U. Minn.. 1925-27; m. Mary McNally. Secs
27, 1930 (dec. 1961); children-Marilyn (Mrs. Gabrk
Nahas). Edwin, Tyrone. Kathleen. Victoria: m. 24
Lorraine Dale. Apr. 30, 1963. Sales exec George A
Hormel & Co.. Austin, Minn., 1928-35: pres. DoughboIndustries. Inc., New Richmond, Wis.. 1936-66. chmi
1966-67; chmn. Combustion Products Corp.. 1965-7I

Energy Transmission Corp.. 1965-70: vice president
director Cashman Nurseries. Owatonna, Mint,
1940-70. Midwest Radio & TV. Inc.. Mph.. 1952-7(
dir. Mid Continent Broadcasting. Mum. Tribune Cm.
former treas.. dir. Minn. Wis. Dairy Queen. Inc. MGM
exec. corn. Si. Paul region Boy SCOLICS Am. Meat. CI

Psi. Home: Deming NM Died Mar. 16. 1970

CascA Or,.

_T,/117C A on ,,, office-

f.

February 17, 1921.

To the Officers of the Bank.

It has just come to my attention that 33 of the 36 officers
of the Federal Reserve Bank are Sustaining Members of the American
Institute of Banking, and the President of the Institute advises us
that vs stand at the top

of the list in respect to membership.

I hope it is an indication of interest by those who joined
the Institute in developing wider knovledge of the problems vith
which the officers of this bank have to deal, and especially at a time
ihen they are becoming exceedingly complicated and correspondingly
important.




Benj. Strong
Gnvernor

FEDERAL RESERVE BANK
OF NEW YORK

MISC..1.1 OM 10-21

Or ]CE CORRESPONDENCE
.

FROM

DATE

Case

Sept. 30, 1922

SUBJECT

Governor Strong
The attached note from Mr. Lewisohn explains

itself.

I am very

much interested in the work of the National 3udget.Committee, and
believe it has accomplished a great deal towards giving us a budget
system.

The dinner to which Mr. Lewisohn refers will be interesting.

In fact, it is always a treat to hear General Dawes speak.

If you

would care to act as my substitute, I would like to subscribe for a
table for this dinner for such of our officers and directors as would
care to go.

But of course-- must
I

cannot attend myself.

If you get together a

be in Washington at the conference and

Mr. Jay and

list of names,

r. Harrison will also be in Washington.
in case the idea appeals to you, rr.

Beyer will do the needful in arranging for
BS.MM

att.




he table.

192_




--1111




CLASS

Day ).etter

Blue

Ninht Message

Nite

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

Form 12W

WESI

SERVICE SYMBOL

3

JAN

UNIION

CLASS OF SERVICE SYMBOL
Telegram
Blue

Night Message

T

Day Letter

Nite

NL
If none of these three symbols
Night Letter

NEWCOMB CARLTON. wrtretc/rifilip_

ATKINS. FIRST VICE-PRESIDENT

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

RECEIVED AT COTTON EXCHANGE BUILDING, NEWYORiNtr

105AN CBH 20

STV'T,N. Y.

BRINSON CA 1035A JAN 31 1923
CASE

372
FEDERAL RESERVE BANK NEwYORK NY

SHALL DELAY RETURN FEW DAYS

IF NO OBJECTION PLEASE REPLY

FRIDAY CARE STATION AGENT .4INTERPARK

FLORIDA HOLD MAIL NOTIFY FAMILY

BENJ STRONG
1220P

,

CLASS OF SERVICE

r

CLASS OF SERVICE SYMBOL
Telegram

.,-.er

i

i
.

Blu

Day Letter

Night Message

1

i

SYM7

- ,-gram

!

Ni

Night Message

Blue
Nite

N'.ht Letter

NL

Night Letter
none of these three

N

If none of these three symbols

sf

,pears after the check (nu'
f words) this is a telegram.
I wIseits character is indicat

appears after the check (number of

words) this is a telegram.

Other.
wiseits character is indicated by the
symbol appearing after the check.

1 symbol appearing after the

RECEIVED AT




'3 FEB

.

PM

BAN E NET.VYOR:1 NY

RA TH ER HOARSE ?YEA
.

-

4

L ABOUT TT TI-[

3:.-11LL

ORT

TIRE

SLJGGE LT

ULLY

---,R RECEIVING JA 13 LETTER AND CAN 370:- OVER AT

DES IRABLE BT TO YOU ALL AND I LiA RE YO 'R
t

OUT L.ALARIES
BA NJ

-

"

10

42

I FEDERAL- RESERVE BANK

OF NEW YORK

""CE. COOZREE, DNIDENCE

DATE

Feb. 21

1923

SUBJECT._

Mr _ Case
Miss l'avidson

FROM

Miss Bleecker telephoned the following memoranda from Governor Strong:

Governor Strong thinks you should give the newspaper men this information this
afternoon:
"

the discount rate of the Federal Reserve bank brings
the rate at which we loan our funds into better relation to the market
rates, which have recently advanced and are reflected in increased
borrowings by our members."

The increase in

thm.)1 A-tsMuch'decends

all

upon how this is done, and it is my suggestion that you have

of tnem(the newspaper men) there, delay a bit until thev all come int then

say that we have no formal statement Lo make which they are authorized to 4uote,
but for their personal information you are glad to give them the facts given
above.

I think it is vary important that we do not give an authori4ed statement

to the press when we give none to our members.

How would you like to drop in here sometime soon

and discuss the letter of Reynolds

of the First National, telllng aim where they get off.
my pencil, about other things.
rgan, Kenzel and Snyder




Also

if they

We could chat, me with

t mht be good business to ask Sailer,

r1e

propose for the press.

)2

FEDERAL RESERVE BANK
OF NEW YORK
February 27, 1923.

Dear ir. Case:

As Ir. Coaklevts exmina-Uor yesterday was conclusive as to my throat,
I must at once report what he says, and ask you to convey it to the Directors of

You and they nil respect my desire to have this held in confidence,

tie bank.

es the members of my family, some of whom are a.ay, have not been advised.
It seems that the inflaalation of the vocal cords caused by the severe
cold T. contracted in

January, afforded means for

which has caused a. lesion on one cord.

tubercular infiltration to occur,

This has not ulcerated and so far as can

nov, be forecast, is capable of being absorbed if

promptly dealt -;,ith.

On the

othor hand, it cannot he overlooed that these tubercular throat lesions

frequently

are most serious, and not infreuontly fatal.
I have been_examined by Dr. James A. n/lor of 379 Park Avenue, and. by
1Th. Cornelius C. Co1(1ay of 57, lest 5C-ft Street, both leadin7 men in
throat m.s.

ters, and their

reports to me I

tubercular aod

ould. suluri?e as follo7:s:

Dr. .7tiller. aya thst these lesions, then not ulcerated., are successfully. treded, especially by Sr. -;:eb, Colorado S.::rin52, and a :.)od,

handliw:: in nine out
baokjrcunc].
.7:cessful.

e ten c,es is successful, if the patient has a favorable

In my on case, ho fools
?::v/

four years ago.

ild be enough.

viorous

asured tt:lat rest End proper care

ili be

luivs are probably better and certini:, no :;orse than thran or
He thou:zht a fev. months (I ,,athered three or

four)

in Colorado

In general he -;;E.s encouraging.

Dr. Coakle,, says if I All spend six months, , hich he thought was safest,

at Dr.

';,ebhts,.I v.puld have many yos:rs of:.ork ahead of me.

It must, hoevr, be borne in 1.1nd, as to both these views that these
oases are



serious, and

that the Doctor does not alays tell the ,Plole story to the

1

Mr. Case

2

(I)

victim.

2.17.23.

y suggestion is that some one or acre of our directors see Dr. Miller

or Dr. Coakley, or 'both, if they can spare the time., and get a first hand opinion.

The Directors of the bank have been so forbearing with these health
troubles of mire in the past, that I now hesitate to make this report without
sending my resignation with it.

On the other hrld, it yould possibly be better

to await the result of some conference with the doctors before discussing any plans
from the bank's standpoint, and you may, therefore, coreici®r that this is prelimincry to hearing further fro'3 me after a conference T 9'1 to have Lith Dr.

:Alier at 10:00 o'clock tomerrot.
Faithfully yours,

ES.,

J. H. Case,
.Demputy C;vernor, Federal Reserve 72. nk of New York,

.15 Nassau Street, Kew York City.

BS.MS8




FEDERAL RESERVE BANK
OF NEW YORK

March 8, 1923.

Dear Mr. Case:

The action which you advise me was taken by our Board of Directors on
Wedne6day, February Z. respecting my illness and possible absence, is of
The leave

course most gratifying indeed, to ma, and I deeply ancreciate it.

of absence, I am assured by both Doctors can be relied upon to completely
clear up the trouble.

Only on that basis would I feel justified in ac-

cepting an absence of that length.
But I am sure that all of the members of the Board will understand my inability to accept my full salary during this period, as I have
already explained to you.

Board that I am still very
their generous

action,

Vion't you be good enough to

clearly of

nor, indeed,

the

to the

the opinion that I could not accept

anything

beyond what was voted during

my absence some years ago, which was half pay.
a rap about

explain

Indeed I don't care

salary anytay, and cm only anxious, as you know, to get

well and back to tork.

All

of

this I explained personally to

Dr,

Miller yesterday.

Please say to the members of our Board that I am leaving

with

nothing but grateful and hopeful feelings, as a result of the evidence
they give me of their confidence and esteem.
Sincerely,

4

0`"
,..?
,

Mr. J. H. Case,
Deputy Govei:nor, Federal Reserve Bank of New York,
15 Nassau Street, New York City.



r
/1

4

March 8 1923.

There

are a number of things I'd like to "talk" about, but my hand is about

used up with unaccustomed work:




Please make clear to our directors

how grateful

I am for their friend-

It makes the job worth wanting end keeping.

ship.

they were very kind,

Of course the salary matter is of no consequence;

but it is better to lean beck in those matters any way.

I'd be happy

with none.

The matter of first importance is the System policy, and of course our
own.

Dontlt let any one persuade you

that we can

We can and must regulate credit:

prices.

-

and by

or should

regulate

doing so avoid or

reduce the harmful influence of inflation and contraction, upon prices.

There are too many

influences which operate upon the price level for us

to assume the whole job of price regulation - but the course of prices

should influence

our policy.

It looks to me as though the crux

Reserve banks decide to do

be

in

the

of the matter
open market.

I would guess, of less importance

in

lies in whet the other

The discount rate will

other districts -

and of

major

importance With us.
London is

since

sureto send us a lot more gold, unless their plans change

Norman was here.

bare poles, so

While we cannot sail the Reeerve banks under

as to off-set gold

imports, we

can run closer tt hqving

earnings for tax payment than we did last year,
if we

(

or some of

us) didn't

I'll write you from Colorado
a story for now.
me

and I would not mind

entirely earn our dividends.
about your memo.

on gold, its too long

But Shepard L4crgan ( or Snyder) has a document

from

n that already.

Say good bye te the boys and tell Jay I was sorry to

- ;.:ss him.

Also

-e.

get him to

stir up

the

out some literature.

Now is when it

adjourned and our rPtes going

As I haverrpeated

till hoarse,

of groups!

cost and the

is

get

needed while Congress is

up.

and as you seem to have done. no one

is going to be given the job of fixing
or group

to

Agents Committee on Public Relations

prices

They have r:fven

us power to

We should exercise

volume of credit.

individual

no group or

to atoil being a disturbirw, influonce ,xoon prices.

influence the

that power so as
;,,e should, there-

fore, keep the volume of credit as nearly steady as possible.

Prices

cF,nnot go

up (much) without more credit.

That c.n

be

supplied by:

Gold imports
Feder' heserve blnk lor3ns.
As to the gold, we can do as heretofcre.
As to loans

put up our rates!

Setting aside .9o1c) will

not

obscure thing to explain to
the

whole story.

doing.

Memo. from




B. S.

to J. H. C.

alter

tIlefects,

the dear public.

That is what

it merely .-,eans one more
_et's

the Federal Reserve

explain

the

Board should be

11M1111161M1

telegram
Day Letter

t.,esage

Blue.

TT 'Gila 1 Kroleps,A Li11-11%011

Nite

Ilkny,

N

TE L :

If none Of these three symbols
appears after the check (number of

14
....,

words) this is a telegram.

Otherwiseits character is indicated by the
symbol appearing after the check.

NEWCOMB CARLTON, PRESIRENT

RrSEIVED A

--

AM

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

-14W .45,

Day Letter

Blue

Night Message

WESTERN UNION

Nite

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

words) this is a telegram. Otherwiseits character is indicated by the
symbol appearing after the check,

AR 13;

2923

trz

KSB129 19 NITE

rOitt

irr4)

FY COLORADOSPRINGS COLO 12

J E CASE
FEDERAL RESERVE BANK NEWYORK NY

COMFORTABLE TRIP OUT AND VERY SATISFACTORY ARRANGEMENTS HERE MY

BEST TO ALL AT THE BANK DONT EXPECT LETTERS YET




STRONG.




Form 1206A
Cc

I°LASS OF '1ERVICE DESIRED
.'

atter

I--

Receivers No.

WESTERN UNION

TEL

Night Message
Night Letter

,

3

WESTEOASENKI

Tp sgran ,

1_

tress should mark an X ami:e the class of service desired;
OTHERWISE THE MESSAGE
WILL BE TRANSMITTED AS A
FULL-RATE TELEGRAM

owale

Time Filed

GEORGE W. E. ATKINS, FIRST VICEPRESIDENT

NEWCOMB CARLTON, PRESIDENT

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

Check

ik\LION

,e(Kto
erws

cLuzeGe

ilf,t.y*74?

-214 de-w6-4(06s2,*

nu. dtht

çkgatf-

47-e-tte

avyl

17-14/r) Ct

vyettli.kL2n,1Z auC

FeArivo

ct,

((Ea

611

stu-c_Q
11-191"C.- Q

91Le)
C.A

ail /7/01-- `771ake

)zr?

eoarz.,()

6Wrz a/C1

(AO

ml

vik)




Form 1206A
SERVIOE DESIRED

Letter

.

Receiver'. No.

WESTERNUNION

Night Message
1

W ESTE7,p/aNi UNE, i 1
w
TEL
AM

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

NEWCOMB CARLTON, PRESIDENT

Check

Time Flied

GEORGE W. E. ATKINS, FIRST VICE-PRESIDENT

E.;nd the following message, subject to the terms
on back hereof, which are hereby agreed to

C41 cttta
Wt

oll&vti-to

&7w 7J1L, 66716-

1i'

alteca

ad-tn.fic

/-0-6(-0/64,

1671' j,,

ag-0714, omAt

61.44

0.4)-0-teL

yzcii
elA.1--

Pal ( ff tIX)

L'elaj

tqc araite

C

atA-6,-t

7rxif'

a

13
-

-

al

544;

a
cr

%

-

o

k.;

T,

V.9-1

0

5.

"s5:-.

a

15,-?A;

r'31

tit

t

51, a
0.
?.0

OSQ

m 1206A
ERVIOE DESIRED

Receiver's No.

'64
etter

Check

c,t.4

Night Message

'

NigIlt Letter
.trons should mark an X opposite the class of service desired;
OTHERWISE THE MESSAGE
WILL BE TRANSMITTED AS A
FULL-RATE TELEGRAM

Time Filed

NEWCOMB CARLTON, PRESIDENT

GEORGE W. E. ATKINS, FIRST VICE-PRESIDENT

E.ond the following message, subject to the terms
on back hereof, which are hereby agreed to

vc--

'71

ard

a/rt..

Dcto-con

46
64/ ECI-Pry

redid

ft_curz_44-

act iitiikate

Ka6

p.ittictictAe
1,1t-




Oka,

qit6-1441Sa/mo

E

Oka,..2.7

77"C7M-v-i?

C 0 P-

[Aki,..14111143>41

Collect
Case, Federal Reserve Bank, New York City
Have no doubt credit is perfectly good stop. Suggest you have following
in mind.

First. Explain Schnyder Reserve Act limitations
Second. Be sure no old Board regulations still in force to embarrass us.
Third. Might make cautious inquiry of Alexander to learn if generally well retarded
in town.
Fourth. Better advise Washington in such way as to avoid any possible complaint but
also avoid delay.

Fifth. Offer other partners participation without slightest suggestion need take it.
Sixth. Be sure avoid publicity when appears in statement if loan is made.
Seventh.
I see no ground for objecting especially upon security suggested.
Eighth But think sale Treasury bills in market is preferable.
Ninth We should charge bank rate on ground same charge to our members.




(signed) Strong

Dear Mr. Case:

I've read the Investment Committee's minutes and the Conference
Only two things occur to me.

minutes.

The Federal Reserve Board had no right to discharge the committee

1st.

and wouldn't have done so had I had a crack at them.

The committee was

appointed by the Governors' Conference a year ago at request of the Treasury
and I'd see them damned before I'd be dismissed by that timid bunch.

But

forget it!!

We really need to do more, or the other Reserve banks do, -

2nd.

to offset gold imports, and "Earning Assets" should go down correspondingly
through investment sales and smaller bill holdings.
the selling in New York so far!

The others sell and then buy back!

Will write again when I go into the figures more closely.
Yours,

B. S.

My best to you




!

We hav

MISC. 3.1 60M-4-22

FEDERAL RESERVE BANK

OF NEW YORK

OFFICE CORRESPONDENCE
Z,14-.ccia-e .
O

DATE
SUBJECT:

FROM

tth

-

VaAcLe

(06-

-12,ur-rv

"`--C

et,r,

c9cLo

dIA,`";

7,8

14

61-Ca

Ceri-xx

elc/iIvn.Q.

clt

trat e

ftfrA;

qeeco(

.

orr.ia.raeco

ea,,

i C7OA c"-A"-

6169

ceirr-r

af.,_d

f,tt.
4atu

P

1

z d1A-c-e

Cau

filt4

de-kt,t-

Cur-

60,
17)7

go\

tke

j4Loucc-,7Tl7USFA
C2/16s




Oet/

a/rta?i

i/A-Or61)7-iJmp

dte

C7a-

-Pc(

/t(

C/1

4e-A

ro-v-z-c

rf et_tkei/ii

,gtX;
roCre

6242,1/

(6C:(1-6114G7-

h-14;

0&/0

thr-C-9

'ACV- a471 C7-W701

11,

2.cltp-orvzoclyzi,ciS

c(

/Ma If- Ircd

ft,9

We,IRICX_k
Coc
19-A_Cc
ck.

12k,




0 Calk
61Accir--

Dear Mr. Case:

We seem to be earning about $3,500,000 per annum over expenses and

dividends, out of which "chargeoffs" etc. must come.

I suggest figuring how

other Reserve banks are earning and for those now short, let them have more of

our bills and get them to reduce, as they can, their holdings of Governments.
And don't let money get too easy on the "board". It's bad for the situation to
have the impression of easy roney get about.

This situation will require some delicate handling and I'd put on my

desk, if I were you, a legend like this:
Earning Assets (System)

0000000000

Less Gold Imports

0000002000

Net Amount Allowed

0000030000

which equals our responsibility for prices !




what gold we "pay out" does not alter this equation one iota !
Only so can we and the Treasury escape being inflationists.
My best as always,

B. S.

Dear Mr. Case:

We seem to be earning about $3,500,000 per annum over expenses and

dividends, out of which "chargeoffs" etc. must come.

other Reserve banks are earning and for those now short, let them have more of

our bills and get them to reduce, as they can, their holdings of Governments.
And don't let money get too easy on the "board". It's bad for the situation to
have the impression of easy money get about.

This situation will require some delicate handling and I'd put on my

desk, if I were you, a legend like this:
Earning Assets (System)

0000000000

Less G)ld Imports

m00297000

Net Amount Allowed

000'..)000000

which equals our responsibility for prices !




that gold we "pay out" does not alter this equation one iota !
Only so can we and the Treasury escape being inflationists.
My best as lways,

B. S.

I su

OFFICE CORRESPONDENCE
T.

07:

-

actfat

DATE_geet'Y

1 92_

-

SUBJECT:

FROM

ac,44

oeti&,

ctut
Pretpog_cte

ahtlac4-

I.

0-"gf crzht
I

otOEC

If 4t

/212-e-111-&

frict jeGJ 6

F1,

Arr,r,
aza.94

tt-fi=dbio cke

eV

rtvt

"al

a-bin

PrattC_e

61)0(6-e4 167

o'lk-e

kttA,




Ceea-e a
cif/AA

-eoccc,

a

/6i rudvraukt3 tadattAa,"Ac-c

7TJ/ -Titct

CuLet,

qicuic

t cf ITNA.t,

0tcti
CY-

Pal(

e0-A1IA7

0-Pti---

bouiree

(A

Cce.46x

ec,rr

cA;

4azul4
re-e/i7./0 ti)

X444.1

ój ti
457

1-01057? a444,

"dri/Y11CUA45,zuz

/eft Id 7"-e

1414/f

a vv-c5

6L,hr-r,6;_k___)

Dear Mr. Case:

Schnyder's cables put quite a different aspect on the proposal
it comes very close to a loan on the German gold.

The loan will doubtless,

in fact I feel without the slightest doubt, be good and cause no trouble, but
it has two possible objections.

One is that we might be advertised unpleasantly by either Germany
or France.

The other is possible political objection.
But in these matters cion't always let us ba guided by our fears.

The fact is that this particular loan, instead of simply being a credit to
our correspondent seems to be part of the German exchange program, a very
silly and futile one.




Keep me advised.
Yours,

B. S.

Form 1206A
OLABJF SERVICE DESIRED

'

WESTE

r.

kreASNI.

Telegram

Day Letter

WESTERN UNION

TEL wtl

Night Message

Night Letter

--cons should mark an X opposite the class of service desired;
OTHERWISE THE MESSAGE
WILL BE TRANSMITTED AS A
FULL-RATE TELEGRAM

NEWCOMB CARLTON. PRESIDENT

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

UNION
M

Receiver's No.

Check

Time Filed

GEORGE W. E. ATKINS, FIRST VICE-PRESIDENT

.

-6L,58
er,5e.,ri-tft

(*d.,Eft

air\./

0 6-60-

ick_ a_ cL, 77 L. ,ts.

r cL 7-neiro cr-rcv)-NcLai

gad.

p c--CI,C/6
0-71

1,07

c(L,

&O.

z'--

t70,1"-e

C..,

5i6/71m,i

619

.)6

ao-n

c--ekEcAt9A,

PODD 0

to ci-rA Ito



iec ttE,

it..act,t141,6-4

cs'

Cr29b

OFEA)

/ eC(1- ro
("7) OLQA

cvn

11_

'coy

0
S
Its

A

c'''oc?

7+
.2.

"

'314

TP

-

,

STE

SERVIOE DESIRED

01811EN.

,:g"m

Al Jay Letter

% Ics

;r6

cvl

'I's

UNION

Receiver's Na.

WESTERN UNION

Et,

A 5,

Form 1206A

ffi

TEL

Night Message

Night Letter
Patrons should mark an X opposite the class of service desired:

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

NEWCOMB CARLTON,

Check

hei

Time Flied

GEORGE W. E. ATKINS, FIRST VICEPRESIDENT

PRESIDENT

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

)cr_ 9

q eir

C74.77A."

742 6

0'11.

k

Pit da.

trivo
9)-IxAit

fa-

tit.trimai --trucLt5

tint.,67%,

cr)
(64-

icbteiwytt

A.41-1e'
Co-71;F 6-e.

atAiTtgim
./e--r-FA.341,/

cvrt

97-k-mage -

esriutetiate

etrikri/n
4./6 eL

Cvmey-cLe a 1%,




aLwa.

014-c-3

R.tiw

PA C:1V071

4

CriLc

A

0
ck

"

n

0
c*
0
0

6

c,o
52"

batter

51.1s-iJF SERVIOE DESIRED
0,7,4r

Ielegram

kght

Day Letter

P

viESTEaglENA UNION
AM
TEL
WESTERN UNION

Night Message
UL

Night Letter

I--atrons should mark an X opposite the class of service desired;
OTHERWISE THE MESSAGE
WILL BE TRANSMITTED AS A
FULL-RATE TELEGRAM

NEWCOMB CARLTON, PRESIDENT

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

etrfAv

/./,',

CAA &W

LC4-C7Vt/Yv1-tvyvt

tuitc-m, 1/LI

111.0747-

IUket

Pa/9- pnvo-

61-7,14-1.40-7 6t,6-6

.

GEORGE W. E. ATKINS. FIRST VICE-PRESIDENT

(

c25W1-7-k

)r,ket

Form 1206A

Oke

&Put:

koi5e,--A4c6-4._

vaiyvvt;a10:vrAticlio 16 Cc:7461-m,

e0-7) 14.7% ern,/

--Petult

aiak.

771 a te.)

CL jarEori ageliciy
5-4/ 4ecvn..x,t, (si



lo-i

ihc-

ItYf -"61/7-Lgy:4--

e"-46,tAit,

catau,..e

1710-A6-J17
71157

'n-674,66

s

wet( 0-L
tea

9710,01,trtfrn

/19(14,

r
A
0

'`'; 5
A
Ck

V° 46
0*.
V.

I.

<5
?, 5.-4,

(9

41

3.:(1,

'3m

141

9:"

11:',

SS

C'

sc)
QC,P

o
,A

ERVIOE DESIRED

Receiver's No.

A,

0

0 tO

tpoicroVty.

jay Letter
Check

Night Message

Ts,

I,

Form 1206A

VA

A -c;

;

%I!

5

Night Letter
Patrons should mark an X opposite the class of service desired:

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

Time Flied

NEWCOMB CARLTON.

PRESIDENT

Es-)nd the following message, subject to the terms
on back hereof, which are hereby agreed to

GEORGE W. E. ATKINS. FIRST VICEPRESIDENT

if

ectilt.0 omuck
A06 ovo
äA1c.,,ciez3 fri-rere;-t7L r
havez., 771-Lit72.. evmJ
.3a rA,
K 6,/ ox24.4._e, ZiAAL
6\--tu-7
cv-&-ten,rAtivof-lo-affvn- cwvt_ein
ak.efrn, 04,0 icd-c-E4L
6-e4A

6

-

49,0 6.6et
FW)-1/_&w 16 6g
4CtK,
4Ocg riti\




Xach

Act,u-rA

a.(r7)71-

cCe d Omer')
um- edt,6)

39)/-

a /71

al.

to"-- (1-71 ALcal"

.0
G.--

101,

SI, 0
A
ecr4

A
A

"..S
'°0

Any

0

%

T."

s"

'

A

9,::,

S

(4,

tf,

vv
71

-.3

53.

o

s

q"

"<1;

AVIDE DESIRED

Receiver's Na.

^

74'

ccc vq.etter

Check

t Message

5.7

Night Letter

trons Should mark an X app.
7i

,

the class of service desired;

.,".0 OTHERWISE THE MESSAGE
WILL BE TRANSMITTED AS A
FULL-RATE TELEGRAM

Time Flied

GEORGE W. E. ATKINS, FIRST VICE-PRESIDENT

NEWCOMB CARLTON, PRESIDENT

Ez:nd the following message, subject to the terms
on back hereof, which are hereby agreed to

,1

r ck

),

afa

6-o

Orkt..C;4,

-aktKm,

lc/rens

17:7-11.C.

0771,42-t CC72

iecirstyre-yv
(ra a-Te7N

)

/




/'

t7)6Lt&D

quite

t2Levr.- ita/o

746

a)

E,,g)

1

C 0-P Y
rOM

Collect

ivaj

Case

Federal Reserve Bank, New York City
Your telegram. First read my letters and memoranda relating to both
former proposals by our member bank.
Second Get Jay's recollection of circumstances.
Third. Personally obdOct to plan of appointing correspondent for reasons then stated.
Fourth Assuming by your message present plan is own agency following objections
appear.
First. Probably ultra vires ask Mason's opinion
Second. Subjects assets and management to control foreign legislature and courts.
Third Rottility always shown there to American bankers likely to be greater even
with us awing to Government relationship.
Fourth. Expense and responsibility will be considerable with benefit to no one for
whom we are responsible.
Fifth. Unwillingness to conform to methods now common there will make for trouble.
Sixth. A foreign agency absolutely unheard of by banks of issue which before war
were even unwilling to maintain deposit accounts in foreign banks much less open
agencies for obvious reasons stated.
Seventh. They should have their own bank of issue but if our Government wants
currency clean up would see less objection to having one such operation expenses
to be refunded and then quit.
Eighth It seems rather unusual for Boston to open an office to conduct business
practically all of which is for New York.
Ninth. You should ask time for our Directors to consider.
Tenth. Common liability on notes gives us clear position to object if plan has
possibilities of ultra vires.
[signed] STrong

[No date]




CLASS OF SERVICE SYMBOL
Telegram
DP}, Letter

Blue

Pii t Message

Nite

ASTE

WESTER! UNION

NL
Letter
It none of these three symbols

TkL

appears after the cneck (number of

words) this is a telegram.

Other-

'tits character is indicated by the
....tbol appearing after the check.

UNION

WILVaig:

AM

NEWCOMB CARLTON. PR iA.igtessa,REoRGE W. E. ATKINS. FIRST VICE-PRESIDENT

CLASS OF SERVICE SYMBOL
Telegram
Day Letter

Blue

Night Message

Nite

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

words) this is a telegram.

e 003

RECEIVED AT

Other;

ccount

vA4 40 COLLECT NL

"

2-3 APr 25 PM

5 06

COLORADOSPRINGS COLO 25
CA SE

FIDERAL RESERVE BANeNEwyaRK NY
REFERRING YOUR WIRE CERTAIN CONSI
BOSTON PARTY AND

0

.4* IMF SUGGES

REFERRED TO ME PLEASE r

TIONS RATHER PERSONAL BETWEEN

T BE NOT KNOWN THAT THIS

' TEMMIT CONFIDENTIALLY FROM HARRISON

Vii0 KNOWS STORY BEFORE APPEARING BEFORE BOARD BUT HOLD

arRICTLY CONFIDENTIAL




STRONG..

Other-

wiseits character is indicated by the
symbol appearing after the check.

rct2

oNr- 11 der, - Co-2 e
af)7,4)

Col

txrfrilt

_reeccAttcf

09

tift/d----

e3 5_

clte4

euIrm

itfc ciwyw)--rfl /h -

fte
Cr

tx:

ee_A h

o)rejtutc

ettA

-

Goa/

Ca(

c/lcut.4

rth 716.; r

(Oita'

f&d.

s

OAcy-it.t-t)

Cruvt /Kt

gc,:zu-ro
4:41




Co-z44,67.4

5--Yo

6ret49. t

71t7 -

41 hie

celkozi/Ivy

S C&iL

-6-ciL,

9

7Leki iff-- a Xci ucz

attlanurcnte:

likac'ccu

-

cor6-1-7-

er-PXY-F cx__)

ite-ci

Ava01

os'w

ofcce

Catrx-8. 7kev7vi,c,

Ykr-Ltc)

(0;111.

J

-

Atre-

th,CIA

CyzArr

to oif1.

te°T

X( &AAA.

"9 1^ otef/7-it/0 re;

)(At -VW-E.C4

"17A-.1

rke

CamoR )xe

Po
TiJ., 'Atari?
coa-k-kea49-K4,7,
ee.-a

~efietp

ro

.(2495

ro-- a

-

cutCT

Ccv,vz/ Ice-V/C4--er

Drecivo

Cr.

ft-r_

P777(4,14eAA

1 lk.(

C/Y C-CXJ
c(.47. 1/0 a ify40,

atrit-t-)

jcii

thcc-e.A Ake'
Ct4v

oficffict-d

;

f---

aLe,

crit/I

Ob.

eA-0

Cd&cul-- kak) kce_PIPA/A.4_,)
k5 6'c9

toz; "taut cirucr rc7--

Plieftma-e
.ekccaro

ere)

fzetts---0

r A1a/2112,_,

del

-77ia

ttizo

"nla-17

60-co-z

uncastvto
"et )t_b
anti4 14telft)

do-cri

aut

á'i av r6 tial/a
iftt &tr.. uta-e-g4%-i

-;

IfAhtc-0;;-.'Lit,Let (7

-

(7201

Ait..e

376. 2 (

to

cilecei 17

2J-4

?

I6I
,fr0f64--CA1

Cen4n4lAfz-i-i

74-l1

dite-zo #1,

h.ut

Ce

a-g2 jazi.tAA-- fr;
Za.t.01-0
eo,a!A_1- 14r-vk
(1461-eAA.2-e

(07
ttirn,4

NA-

ai
041-

Corzo zA'

azat.

Cy

cilL(J7J1

Co4-4

/6=

7-Atorn,-0

1.1

ro-

etex..,)-A-/

6.,t_cuct4ALe

(6-17-Itt

(A)

107 it-070V au.,

t-uk,e_c,..--.1

ctr

01.

614_;)

f1t Itrutra. f
27t-KA atcfrito

ettc-1 thivew 1-7A41,44;-: hite: 6-AA etut-




,

cky-

6-At-

-7..v243

"inktia-V

tqa

emu°

.C(

tYrri-9,

awl

6L1)1001,1-1-)

'huitc.,),-

Coati-0

itrtfitt
MArk- f

07-.61A4

eie_57--

9--

a_FectgAitr.,
ceeml-A,

Ck_

6t,4-

grAxc

FuE:

),-/-f)L

"intituint

_

ae 06(4

ace

12 -3-1 7 7

eant-6-int

ti4A-7

Ptatt-i

RA (-Ott

t'i(Mai- ?
!!

ZJ evw

fl

Q

OV

eactA-e
a_

_<

0-prite_

fore e14. aheaviilks),(A

10-5,

ost- 7Acctwof
av7aiiL4q 4i

Oiektei
V-

ilk_Co4I

7/ 0-4

64.-1 Tft-4-

jytkekicts

/G- mewp)

74 a2

Ceozt4cr-fc inti

deckurbi
/tau_
ALCATcaf mto _

euvi ct:

61

Witt,

Erkj- A--?
T-

Ka_of.

/16"ti-",;

a3)-/A--C-6-4_

fitX---j,

-Truce,

Wc14




r

tiP (0-0)ijit- to&y-le

/dir

110A9-Y

..401,41,)

6G---

4

ACct

a
&co

fl:r

Cwt

14i,

4

railugcr-

utail

sr-

v

6-c

6-s

a/rne
letuA4

kuLf

tat

aft
iterx_A

r,
fir

4.411.4k7"--

Otett^....,

Colorado Springs, April 26, 1923.

Dear Mr. Case:

Yours of' the 21st has just come as I am reading the stenographic reports

of the March conference.

Please show this letter also to Jay.

The situation is beginning to cause me concern in certain respects.

It

seems to be the watched pot that never boils, - no action but lots of looking.
Now my own idea of a program - for what it is worth, - is to first have
an authoritative and simple statement by the board along the lines I wrote Jay.
It should be well spread over the country.
5 per cent.

A little later New York should go to

The other reserve banks, except possibly New York and Boston, should

hold off *till discounting indicates clearly need for a raise.

Meantime our bills should run off - to a considerable extent and not
be replaced - and Government securities should be gradually reduced - but faster
than at present.

This puts market rates up; forces borrowing and gives clear

demonstration our rates can be raised:
Now see what has happened No statement by board.
Without it we are reluctant to increase rates.
Chicago and possibly others may do 80 before we do.

Board may approve increases and make no statement (the worst that
could happen) and as to investments, our bill holdings are still increasing and
in Governments the record is as follows;
Total reduction May 17 to Feb. 21 is
May 17

millions 515

Feb 21

354

161 reduction

of which New York contributed 123 million and the others combined 38 million a grand showing.



Chicago has bought back all she sold and McDougal on the

April 26, 1923

-

Philadelphia no change;

COmmittee;

Atlanta increased 8 million;

Chic

k2).'

but 13 million;

Minneapolis, Kansas City and Dallas

St. Louis up 4 million;

all larger.

Were I called into Court and put on oath, I'd say it was "creeping
The fault is not ours, we have done our part handsomely, but it

suicide".

means, and I want you and Jay to realize it, that influence must accomplish
something with the Board, or (A) we must submit our increase without any statement
in order to make a record as we did in 1919, or (B) abandon the whole job to

and let the Board mal-e all our loans, and investments, hire our clerks

Washington

and buy our stationery.

What I mean is that the managers of the banks should

agree on a plan, at least as to Sec. 14 affairs, and observe it - or we should
frankly tell the Board it won't work and have them impose a policy.

That means

the end of it !

I sympathize with the Board's position, that they get the slamming and
have little power to make their views observed
Have not concluded reading the record and may get some comfort out of it
later.

But clearly, there is no need for

rate increase now - there is certain

to be later - we cannot tell just when, and that statement should be made now
and not deferred until rate increases must be made and we set up a scare by
having rates and statement come all at once.
What is being dome about it?
Best to you.




B. S.

ctvzit4;

e

ewcueyro 1),)/

fix
ervan70

pty!_cei

Lc'

eetevau 49-cceert/a-f CithaW-00
Kcc#sit ("fake d-o As"

dAYttiC
71141-1114

etir

R?

6,0

-two

kte amt,

74.0te

C0-4(Idatucc

_

cckT

loko.

$.0

o-Vke,f9aitet1t4yy-

0-tA4Cfalvt

Wow a,/

,

attc-k_,Cff awa
Gue,x(0.4.) (A'

jute,/77.

1ttA40Ci1t1ti'

ka,01,42v700.11147

CCF-1 ctiAti

zutE4e

,
fo-niut.

y4j),

for eirnia_tk 4 Ct.

cotA_

1Lt//)
PIttL)

411

(A2

_4?

71,
10-1




4

- 71/i

c77LCe_

tin ?Ikea",

laff-Wd1.6-GCt.Cs-

btic4L kvix,

44,

tv-vtot4-co- of4,A-

w-1'0-

--"Ak

tub

a

16-,talk Q

eJkitJ
0.41-CtAgy)L,R

ec

0461A-c,r4

/AN

011,e7ct,0

oitc..

,

-

-

Catt 16

ay-40,1
1-i}t
kr/ rgtA
0/4.--/PAAA--elLtti /rent- tilLtJ "
7/tyL ik

J9--fkitu4-

c6441t




órt4ra

I.

Corfka.

jitcr

May 1, 1923.

Dear Mr. Case:

A suggestion follows for a cable in reply to Norman's No. 2.
"Yours etc. - as usual
"First.

-

Nhile of course there are considerations moving you in

this matter which do not reach us so closely I have personally felt unwilling
to recommend such loans here because so wholly lacking in confidence in

outcome of Reparation plan now or at any time since treaty was signed

stop

Do not see how you can escape some inflation if loans are for considerable
amount.

Second.

Might not such a move be wholesome in view of possibility

we may need to go to 5 per cent. before very long.

Third.

We regret not being able to help more actively but what

you propose seems best method of approach.
to discuss details.

Let us know if we should see them

Strong."

This might be worked over and shortened and sent as personal from
me or from any of us.

I think we should keep the personal contact in this

private correspondence just as close as possible.




Hurriedly,
B. S.

__I notth Int/f'airio raj:
that,

IL-Icrit9-va el-4k(
t---antA)

9-

I 42'

07-

7xt a lid- at
a _ecif-v)

Alai..

I

C/try-t-t_c

_

af.:1)

_a_Ata-uri

7710y-i

fp

D11440

,w-ALts

trot_

pci-Arvn,v; Ike

40-zu)
(141/0

etalevvo

dttr= Pe-ojr

*a-Slid-

kib-0).0-

Ov-th-er

oilltoc- Cern

WAs-4
q

-7714/x;

9-

09 afaie

cet/a-v

a

ata

*aro

ate eft-

eghlri/tec

to-rfe-

stiAgrfer,

ater-

_

Wtetiti,aft.ci

09-Att

,

fo

rt.---7Acutet_Ai

_aftAilvni alltca- --49

_an 174-

_f/f._

ace,_ roa_s

Aro-v-za,&4

Gza

cti

wazo

.

knirvi

acra,uz

a-A1P-4"6-0--elk

)

(eta

106(11-c

fCckt:

(-9Nfecet,--

4,; etivi

1414K

thC-r)

Nth&

cificuul-

Gee-u

Mot?
anOrvuftit-

cuu,f5

eh 7vui,




et

InnIA

17y
ata-6,--0

4 to

titty, cticl vpok--1Q
(9r LA.

ivd

6-crLIvt-

--

f_c
utty-7-_--7-ftfruij

(tract AR.

JkititA,0
toci4

/Air

40164. cciem-j-

Det

_9itah

cikt

eAete

XivoiLecel-vms----&-----

Activt-

-

da$

(in.

yeerks-eter

caa

actitu?,c,

Grtjevumfi-e
Coottas2 ctAlica-r- actAkTt

_61-1ltuk otkaA 1A41

2

la(4)

Ara/ii-

66(V-14/Wc

-it No

71A-A-A-e-f 74-

t

cia)-43-

ffsttsk_x/I1/43

-

&LP

_q.

71.a -1-

tavu oWicoet-faccs
forate; A6.,(1 an etc)
a

6744-

WILL titul
datift:/'

juittra_4

AAA) . 091--zo-cw fovr_geo2<, 4;rkig2'
ItAkit4cL5 eun effor-6- ,
etke-

t

ktuift_c

yam'

AIM--

i4a-1
-2(0

f-(,11/01144

a/6(42 ei5Ttt_ti.fG-47

&nu°

tie
_A(44,_(

-6_ --rkr

dun/b.:

czt

elho

Art,e-tuce

-7A0,0

_cetti,9-G

9aciix _ ;Wulf fu

coat' cckecx Ifftec
ki; fax;:cctea4 or, axe) 61h ic,t;
auct.tctc,7
CoLeirRocc.e

got ft_ Ito-A

avri-

_

q

PD2?)k-iVIY cti:0

h Lw_u4-0
64)-t,

&Lei

a 44.

Lacs

(0-tetik-a14




---

Xf(A_

/9t4-4-

7it- q

etto "°7

4

ACLIt

anati4

_

(AP-4i t&- eel
- _zar- aceN,1-4 al cut a_-)

vt

-frcI

.e2

t4,;_

4Yr/

4

aui 14

AK/4w ma; _Pa
tiroiA".

/6-A./Y

(4.-

hlos

cam_ iaAti------tecer
4Afti

4-14/v-

fetetti,:)

Corp

Wutiieuf Cva
Aryl
/G lgo-coz_J _Kaat;li kil-maca tufo
(Crtta

eitt.L

1!

_

7

A

crou,

phi

(444e 74- AA()
et,R4

'

*pa'

c5

keet.
(La

0.-(fivat

t owf

44

12fam---a

_f

06oti

ck-fAtif

o
(c6-6(47)

40 90

_aAstatati4

r

09

ceet.r-

07-r-

r09,4 (filreA,7

Wet('

gyro

Liet.I
Laut44,e

04

Azi,)

ji471

tW

13-=- 4i-v)

g

tat),

ity

90c)

71,4Wft.

dr
"JaLtx.

t

Ci9e0r49---ctiCc-

r

T UL

At) hut'

crir-rt ,P?

atztX,

7140f--

Cil'711

77kattl4 4-44 Atirrmi;

-1,7)/4ñiItto - dour
_

Aiva tc

5Tteudetia

dixsi

arl f

7111A4

160-4

Atiiter

tr-A_

060-ict-

td 4/StAr

icto-q _a

A-

13-414-44.;

K6-141,-024,
ept,,ek

Azti

tmr)4J-1 (dit.,

Y4-1741




bith0

_e+tel

-

atqaataiv5-

trka

Itcui

f). teract

_

4,0

ka

46-

ka-ifike~

avaift) Ni

,

do so.

7nuaA-

ituect-ix-) Aoir

ct191,-944t-s7

(

7ternt.itut ie-") "iitAkccAtturt
aitaz42,0
578iyjikt--#)
tiehtiz_c,

41% IN-terFile,
Vrf-4/

64% Mtn

-

furvu _Cauxr

t-

cite-A,thu-o-cAZ

,

Wu./

-

6-tuu

ttfacit
ari-evo

it low

fittwai

104.4 &do
kutrz citus.

Aus h44 ftc

et-loiritAA

A407

_

if

ax; t)is ceztvA;

LtI-L-1 71

77tke; fixt
164,,9

Aftiltt.-01;

7tztm

afiA_

co-1441A;

itca-i-7

(9/L

elah

0Al21,t,a-a

itri
//OF/EA.:mote

prif

64 at e;L-e

4 11-4,11- _triLfft,

vr4

10-awo

ClAxcK1Cf

ty cerivuLsz.

tg :74

Okc

a;f:4(Arze

69cLi,

,kamzur

Atat

71-ce9t 051')

itcoaayite

Cfo
(1473

Arr fAs

>nwait

094:

o

ole,st

-

>211/4,1

tin tittittiz,st-itaJ

At,vf- o
Kee-zo-tA,Zs-

,

Cee---VA,

'---

19rt4494ANA

iiA-6,-,a

CtiVid9 Ck.-k I-407AL -7kLaf' staelk-4( 4 cortiia;i
cJK4t-,vi afigarrAzevr
or.(à ifereR
a48-tecti5 "nr f
Pi/matt-cc .

64

1

9x,f9,0-7;

(6-

4G---

Pra-ctc:

77-0

tuceiAtjo Ock.R "ftrovr-

ct Mete

64A\

ara,a144 tei;;

)zuzyzeAvt,t,

61(07

lititro

likv162-Qe

efiew_?_

Nit; ctv; co/44L-6-ç0 44-0
act

7Lo

Cul 7-kt

al-wek_et et

,00- At-ekA
6etAna;s _vica-xgte
-)

aNA

cc,

omiArti- 61- (14:

auk

Mv

1ttctrl

44-ea !

&Alt at 110

OA- A IVA' korai,
)k-tcti4,0
-Mau le-L1(

ft

tTAAA_ (No 1-rif

aut.(

414044I-Lw
ftaccia

key f,1

116711A




("Vettio- 77k(ki.c
Ihnr `77ut7
"WV?
-IkaArZ_

71,04 attA givr

6(4 lrer/ltib

av--e4.1 fqyq

atm ALIJ
-1C,
- M-e ARA
(AA

("lac




ALc'. Oli 'Num,
vit.tit
ka_1(--

tx,

&pc
467_4 4(4

tro

,

(Very Private but show Jay)
May 1, 1923
Dear Mr. Case:

Yours of the 28th did me a lot of good.
letter. How I need a voice and a secretary:
jects and returning the letters.

It was more of a talk than a
Let me reply b
Saves much writing.

My point is this.
That committee was a product of Gilbert's and
of mine and I appointed it to carry out a Treasury program. The way to accomplish
what the Board desired, with which I am in accord, was to make an arrangement with
the Chairman (McDougal) or suggest it to the conference.
Ev
assumes some arbitrary power like this, we approach nearer to actual management
(instead of supervision) by a political body. And the Board will be wholly political
within two years!
Now that they have discharged the old committee and reappointdd
it, the whole affair is surrendered to the Board, - it's too late to save the
This comment arises from no thirst for power on my part, or no
precedent.
antagonism to the board.
I'm simply looking ahead to the day, near at h
the banks are rubber stamps, - if we permit it!

The Government security account reported to the Conference was as
of February, and, of course, a great change has since occurred, of which I had no
figures when I wrote you. But please recall that the policy was to keep "earning
assets" from increasing and rather to reduce the total (by selling Govdrnments) to
the extent required to offset gold imports.
It was not adop
Conference but we were still working to that end.
Until sinc
about all the selling, as the figures you sand me show.
It was largely Chicago,
Minneapolis end Kansas City that nullified our efrorts.
Sorry not to like the "renting out" scheme.
It seems a bit beneath
us, - and I hope we won't make a practice of it. No gain by it, and the game
isn't /forth the candle.

I'm glad you will deal face to face with Gilbert on his financing.
He will be guilty of a colossal blunder if he fails to meet the market for prompt
distribution. The banks will be hung up, - our loans will go up, - we then put
up our rates, and the whole Government market goes to pot with a lot hanging over
the market. As I wrote Jay, the Board having passed up the statement idea, I'm willing to put a 5% rate up to the Board, and if it is done it should be ahead
of the May financing. I can just hear Gilbert say that this is to refund and the
money paid to Victory holders will go into the new issue, - but it won't. It will
be like the last to some extant.

The wire advising you had decided not to oppose the plan, surprised
I know it would be disagreeable, but if the plan is bad it should be
me a bit.
blocked though it were disagreeable to do so.
Please tell the directors we must
make no commitment without a full understanding, - top to bottom.
is pushing this is of the impulsive and I don't care to assume 40% of the cost of
the now currency. Let him!
The argument about the gold is not valid. The
Federal Reserve Notes are already in Cuba and this would simply be exchanging new
lamps for old. Besides that, we have enough burden on our backs now with too much
gold. Don't let's add to it.




Mr. ease

5.1.25.

It is very discouraging and makes clear the point I make in No. 1.
Corry not to have a good man, with his bag all packed. You and P. J. must find him!
If
And in this connection, don't surrender too in the matter of the Swiss Bank.
there is something there to do, don't ask permission!

Pd privately ask Norman how much they advance on gold. 96 is too
much! unless the gold is in our hands. My advice about the Swiss loan until your
Crane seems to have dug out the reason
letter came, was under a misapprehension.
Just now, I would do nothing
In my correspondence regarding the Reichsbank loan.
and deal with each case as it arises.
You don't miss me as much as I miss all of you!
I'm busting with it.

Talk about pep -

There is one thing you must never forget about rates. An increase,
An increase
when our discounts are not increasing, puts pressure on tO liquidate.
The
in rates when our loans are increasing tends, of course, to check the increase.
Therefore, if we increase
euide is the market rate, - the facts are the loan account.
rates without real borrowing pressure on us, we do so in anticipation of something
Neither argument is tenable. Hence my
not yet arisen, or to force liquidation.
urgency for a clear exposition to the public, and no rate increase 'till discounts
Should we submit an increase, a clear unequivocal record should go to
go up!
Washington, tactful but plain, that our rate increase represents our best views,
Don't be influenced by Clearing House
in the absence of a statement of our policy!
We can, and in fact are committed to ignore them!
rates.

The fact of a disparity of 1% between our rate and the market means nothine
until the banks begin to use us for the profit or any other reason.
Won't you have a copy of this made and handed to Beyer, with your letter,
for my files. It's a good thing to have old thoughts to refer back to now and then Possibly Beyer had better return the copy and your letter to me.
as in 1919!
I'm feeling fine, old man!
today, and feel like a two year old.

Had half an hour in the hot sun, tout ensemble,

My best to you and all the boys,
Yours,

B. S.

(copied from manuscript)
MSB




Form 1206A
1

CLASS OF SERVIOE DESIRED

'elegram

4 Letter

WESTE

TEL

Night Message

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

UNION

Receiver's No.

Check

AM

Time Filed

GEORGE W. E. ATKINS, FIRST VICE-PRESIDENT

NEWCOMB CARLTON, PRESIDENT

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

Ctak

7)

,

6

(-,,fFd. u7ca

4ttrrLii-

.4)-c.,

to-

,

PcotA.,..-

cpx-17-9 021/2,7a4(1),1,0411

11,7)--0/.(11,-z.,

afu .t-tam iteiA,L6)r-igmx,- tt
77;i-7-Le

CDAL Fil-ro

onAf 4,/f1451 EAA..,

fAlo riki tiA
Aak
71:1/0




(

A

,

et,

(EU

(It (if

ta4)441/430.

derl,,?
1v

ics

7430.,,r- aitk Li,,,z_
..,---L,\
i
4..

L,%2

1

(

/

:_.,

)

1
(Kr

._
,

E

.

ALL MESSAGES TAKEN BY THIS COMPANYARE SUBJECT TO THE FOLLOWING TERMS:
To guard against mistakes or delays, the sender of a message should order it repeated, that is, telegraphed back to the originating office for comparison. For t
it
e unrepeated message rate ii charged in addition. Unless otherwise indicated on its face, this is an umepeated message and paid for as such, in consideration d between the sender of the message and this company as follows:
The company shall not be liable for mistakes or delays in the transmission of delivery, br for non-delivery, of any message received for transmission atthe unrepeatetiessage rate beyond the sum of five hundred dollars; not for mistakes or delays in the transtnissibh or delivery, Or for non-delivery, of any message received for trausmissit
, repeated-message rate beyond the sum of five thousand dollars, mdess speriath/ talued; nor in any case for delays arising from unavoidable interruption in the working o
a.; nor for errors in cipher or obscure messages.
In any event the company shall not be liable for damages for mistakes or delays in the transmission or delivery, or for the non-deliverY, of any message, whether
aimed by the negligence of its servants or otherwise, beyond the sum of five thousand dollars, at which amount each message is deemed to be Valued, unless a greater value is
tated in writing by the sender thereof at the time the message is tendered for transmission, and unless the repeated-message rate is paid or agreed to be paid, and an additional
ge equal to one-tenth of one per cent of the iiiittaint by *bleb such valuation shall exceed five thousand dollars.
.. 3.
The company is hereby made the agent of the sender, without liability, to forward this message over the lines of any other company when necessary to reach its des,
4. Messages will be delivered free within one-half mile of the company's office in towns of 5,000 population or less, and within one mile of such office in other cities or
Beyond these limits the company does not undertake to make delivery, but will, without liability, at the sender's request, as his agent and at his expense, endeavor to
wns.
111061,
oontract for him for such delivery at a reasonable price.
No responsibility attaches to this company concerning messages until the same are accepted at one of its transmitting offices; and if a message is sent to such office
by one of the company's messengers, he acts for that purpose as the agent of the sender.
The company will not be liable for damages or statutory penalties in any case where the claim is not presented in writing within sixty days after the message is filed
with the Company for transmission.
It is agreed that in any action by the Company to recover the tolls for any message or messages the prompt and correct transmission and delivery thereof shall be presumed, subject to rebuttal by competent evidence.
Special terms governing the transmission of messages under the classes of messages enumerated below shall apply to messages in each of such respective classes in addition to all the foregoing terms.
No employee of the company is authorized to vary the foregoing.
.

.

.

THE WESTERN UNION TELEGRAPH COMPANY
INCORPORATED

NEVVCOMB CARLTON, PRESIDENT

CLASSES OF SERVICE
ELEGRAMS

A full-rate expedited service.
NIGHT MESSAGES

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

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

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

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

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

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

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

SPECIAL TERMS APPLYING TO DAY LETTERS:

SPECIAL TERMS APPLYING TO NIGHT LETTERS:

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

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

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

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



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

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

Code language

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

W. T. 11.

1-15M-11-22

FEDERAL RESERVE BANK
OF NEW YORK

TELEGRAM

WIRE TRANSFER
DIVISION
DECODED

COMMERCIAL WIREINCOMING

CHECKED

idtAktigktUitgOt co py

Colorado Springs Colo
May 4, 1923.

Cas
Fe

tiM

COMPANY

ATTENTION

ral Reserve Bank
New York NY

Your telegram gives too few details to enable me to understand situation if purpose is to
clean up currency fail to see why either Boston or system should incur expense which ehoull
be borne by Cuban Govertment or local banks and wholly inconsistent with proposals
to reduce free services for members now being discussed. If to enable agency to
discount for local branches tImeric-an Banks it applies only to one of cur members stop
tc discount generally for all banks in Cuba appears to be clearly ultra Virea and I
doubt advisability of our joining any system plan. If to deal in exchange is an
it/If
unwarranted interference and competition with member banks especially ours .1\ I cannot
understand Harding's urgency in this matter and think some one should explain situation
fully to Gilbert so that Secretary will know just what it involves. Does Harding
propose discounting in Cuba for our member after we declined plan.




Strong

06107

W.,,

FEDERAL RESERVE BANK

OF NEW YORK

OFFICE CORRESPONDENCE
ToMiss Bleeker

:lay 10,

DATE

1924.

192_

SUBJECT:

FRomUr. Jusen, Wire Transfer Division.

The following is a copy of a telegram received from Governor Strong, Colorado Springs
Colorado, May 8, 1923.
Pt

Mr. Case
F. R. B. 7.f.

Suggest Board be asked to withhold decision Cuban matter until we submit figures
showing enormous preponderance New York in sugar Tobacco shipping banking
transportation hotels finance exchange transactions and almost every other Cuban
industry and trade. How can we be expected to always forego advantages of our
position of Central market to other districts if such an invasion of our territory
as now proposed is permitted in Washington. The figures suggested will make affair
look silly.
Brief just received fine so far as it goes but does not cover this point.




(signed) strong.

Vt

WIRE TRANSFER
DIVISION

W. T. II. 1-15M-11-22

FEDERAL RESERVE BA K
OF NEW YORK

,V--(1
Ar-

TELEGRAM

...0000frg'-

DECODED

COMMERCIAL WIREINCOMING /

ATTENTION

VIAL

CHECKED
COMPANY

TRANS:1=00N COPY

WU

Colorado springs Colo

Case

May 8, 1923
Federal Reserve Bank
Nov/York EY

Suggest Board be asked to withhold decision Cuban matter until we submit
figures showing enormous preponderance New York in sugar Tobacco shipping
banking transportation hotels finance exchange transactions and almost
every other cuban industry and Trade. HOW can we be expected to always
forego advantages of our position of Central market to other districts
if such an invasion of our territory as now proposed is permitted in
Brief
Washington. The figures suggested will make affair look silly.
just received fine so far as it goes but does not cover this point




strong

07407

Form 1206A
CLASS OF SERVICE DESIRED
,egram

Day Letter

WESTE

TEL

Night Message

Night Letter

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

NEWCOMB CARLTON, PRESIDENT

UNION

Receiver's No.

wEsTERNutflon

wvvizz..

--

Check

AM

Time Filed

GEORGE W. E. ATKINS, FIRST VICE-PRESIDENT

Said the following message, subject to the terms

on back hereof, which are hereby agreed to

<CL) 67,tric

k47/71,1c-,

;Lao //4-71-Q e
kkGIA-e

Ecep.1.0,7-;i

721-tp- 6,6-K2-e/T1

?11;Q/9 (/
4/n1

hstrd

64-)

kvyr

ttto.)-ttl, cette4a7-6,-)

(f.tk 1,u7s(itg-

hui Cattirle

9(10,7-4.A,b

7n/ty fitt_
-1

t

f?

yttc.i

-Sro

6±r}tr

91-1dt2,"

//n/trt




411

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

THE WESTERN UNION TELEGRAPH COMPANY
I NCORPORATED

NEWCOMB CARLTON, PRESIDENT

CLASSES OF SERVICE
TELEGRAMS

A full-rate expedited service.
NIGHT MESSAGES

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

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

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

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

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

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

SPECIAL TERMS APPLYING TO DAY LETTERS:

SPECIAL TERMS APPLYING TO NIGHT LETTERS:

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

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

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

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



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

to delivery by mailing such Night Letters at destination, postage
prepaid.
e. Night Letters shall be written in plain English. Code language
is not permissible.
No employee of the Company is authorized to vary the foregoing.

Colorado Springs,Colo.,
May 11, 1923.

Dear Mr. Case:

I'm reminded by a note in the May 7th Council minutes that I've
long been intending to asked the leased wire Committee to investigate all
( Done

chances of fraud in the use of our wires for making payments,
"inside" and "outsiue".

both from

It is not yet safeguarded as I'd like it to be,

any more than "direct sendings" is.

7111 you take it up with McDougal?
Yours,
B. S.

P.S.

Don't you think it important to hold frequent meetings of the

(done
J.H.C.)

"Investment Committee," then we can not be charged with running the whole show!

P.P.S.




The

irst is borrowing altogether too much.

(Is being followed)

Form 1206A
nI ASS OF SERVICE DESIRED

Receiver's No.

,elegram

Day Letter
Check

Night Message

Night Letter
Patrons should mark an X opposite the class of service desired;

Time Filed

OTHERWISE THE MESSAGE
WILL BE TRANSMITTED AS A

NEWCOMB CARLTON, PRESIDENT

FULL-RATE TELEGRAM

GEORGE W. E. ATKINS. FIRST VICE-PRESIDENT

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

) c_o

.60A14,

c9EctotL pe.bgleiLin

oitn,QT.4

ád

,17('-2

#2,tN iYao
eirat-rt) evm go-r-rerwf d
c..-Aeur
uanito ierv c-r,ctov
tuota..6Prvria ao
ar-r 0-74)-tf)
OA_ tC-7-vect,

tm,d,

071)-yi Yv
(IRE,

aitt-




5c

utcru

CL

Alv Cdt.k q Luiz, tu-r)d %fit cdcte e-hete
-101 etei-acv7,0
Ayostn fizttrj-L,

of.CM/7) CY a
1ct

Ct-7if
(1-

likat

Ct

L

Co(4,

t(S17,<..))4-

.01

Form 1206A

WESTEkasaNwi UNION
mt. 3

ni ASS OF SERVICE DESIRE
Telegram

Day Letter

Receiver's No.

WESTERN UNION

TEL

Night Message

Night Letter
Patron',h should mark an X oppo-

site the class of service desired;
OTHERWISE THE MESSAGE
WILL BE TRANSMITTED AS A
FULL-RATE TELEGRAM

1k

...tt Wen

NEWCOMB CARLTON, PRESIDENT,

Check

AM

Time Filed

GEORGE W. E. ATKINS, FIRST VICE-PRESIDENT

6.,-)nd the following message, subject to the terms
on back hereof, which are hereby agreed to

,L0-7.141)-ek,

'.ift,rtu?

(EtrAd

firiplitAtt

1/44

et4e-ix'

cto-ketty_ a-P071,./

&a,t-E or'iv &Lis. art- y-zacl

accro,411-0,_

auxinA44, 11

6s to

,

a*°&. 6,410

a-Pia rki7 ro- 640

adt-O-uLet
(AS7

0,AA. az

jAtitiet CAG/PriE

OW7 U2tLtL'

et.9

Ct

kek ck J-a,(71/k .7"))(tt-7./

dtiLQ I/at



p(e)

do *towzJ

tT.4.014 do riot- Am:tate.
vo-i-ma/yv-a7,444,,at
uf; ctd

a lee-4

CAW)

4t.

Prvi'vra

/40.,L

Form 1228A

Charge to the account of
CLASS OF SERVICE DESIRED
Telegram

f

Day Letter

WESTEklANA UNI
E.,

N

7

WESTERN UNIOIN

Night Message

TE L

Night Letter

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

NEWCOMB CARLTON.

_

Check

AM

ePbe

c(it

0 6,6,-(141C.J.-.113 etct

(yr\

,!Qcy

;1/43Q

ifirt
r-

Time Filed

GEORGE W. E. ATKINS. FIRST VICE-PRESIDENT

PRESIDENT

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

''241/1

11.

Receiver's No.

)/774)..,

4--( (to 147,

'La-Ft,r70

Jr-A.

(Go tA
r-

1.,./rt-roN (1) 1/1-4




1:it

t

a
f

r700-A.Q

Form .1228A

Charge to the account of
1CLASS OF SERVICE DESIRED
--Telegram

Day Letter
Night Message

Night Letter

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

WESTE
NEWCOMB CARL.TON. PRVSIDENT




041

Receiver's No.

Check

TEL

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

/kat-

UNION

AM

Time Filed

GEORGE W. E. ATKINS. FIRST VICE,RESIDENT

44tie3

(ft/9 -0-;

0,66c,to cull.,

II

COPY
Collect
Colo Spr.

May 18th 1923

Case

Federal Reserve Bank New York City
First. If Norman borrowed in New York
and sold dollars in London the result
would be the same as borrowing in
London and Norman of Exchequer would
have
additional advantage of gaining dollars
so your letter should be changed on
that point as first part of
second paragraph is wrong.
Second. Would prefer to buy bills
in London with payment and exchange
rather than lend directly upon gold
guaranteed
although we should not hesitate to do
at Norman's request.
either
Third. Rate on bills would be to
their advantage.
Fourth. It would not appear to associate
transaction with Reichbank matter if
that way and do not think
done
we should change our attitude in that
Fifth. If advances are made be sure and
respect as yet.
handle so that
in system holdings of bills or certificates
corresponding reductions
take place simultaneously as that
will correct inflationary tendency.
Sixth. Handled this way will postpone and
possibly avoid gold imports in part and
is desirable anyway.
(signed) Strong




FIFTEEN
SSAU STREET
NEW
RK

got_c/77u50-C

-tat; ga /923
du

De3ta.71

aAst-e

,tLz6-atte, eats. 4.

cLefc_ot

A2xtice):5

11-----/-4

kci-u; nt-eni/o

c;ty/raLe

,

kfaut)

4/

ha-04

18-XA-4)

CUA/f attE S/twi) e-co;k-Q

Ctt" do";

/1714-

C44

-

ct---larer-a--fA-e

G-0

C07t,45-v
CekA

611&faa'a-e.tx-f),

9r- LoAx

tfctA4-4

42w-

Or

R. foctiz,i 971tositfaiq
fiW

6LIA:(7

ALL(

64-th-e.ct,f- st

.)co-uc_--v- tiA-

(QA4




a

cccey itex_t"

S40--A-LA

hi an-114 /

CUC// 6057

et

0/3-- u.staxo2 , ox.f-

IvaititAiL( riC

-6/m)

41 Ari4)

a--Kicv-zo

emOol-

kato-4

17

7t4Lf-- fEct

7totAro

g-rA41-71-41--I

?-zetwIl

9kL_-cc,

AR

05. .

&Ly.fAz

4.

Crsgmor,

Colorcdo

Springs,

May 22,

1923,

Dear Mr. Case:
Your bully letter of the 17th gives me a grand budget

I




of news, not all of it very

comforting, but

Washinp:ton is, as usual, our danger

point.

at least I knowl

Direct

action, and

of the variety indicated, is as poisonous, inquisitorial a
proposal as I hcve heard.

Should anything on those lines

be urged, be sure and inform our

Federal lieservi=, Board must
consequences, and

our

directors fully.

The

take full responsibility for the

record should be clear as crystal and

unequivocal in opposition.

Am doing finely, and hope you all keep well at the
bank.

Glad to see # 85 reducing.
Best to you,
B. S.

Form 1228A

Charge to the account of
[IA--

WESTE

OF SERVICE DESIRED
Telegram

Day Letter

TEL.,

Night Letter

NEWCOMB CARLTON. PRESHDENT

wv.

I)
(7,7-t

led,




-r

Check

AM

Time Filed

GEORGE W. E. ATKINS. FIRST VICE-PRESIDENT

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

Pap re)vo

Receiver', No.

WESTERNUNION

Night Message

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

UNION
OkAt*

\v-1,0\

kcaulAre idcvyw../
circut

IOW Z%-igtiz
(9,Avt,6

6.1--

at

1/ EC

&at/0
a ca(ie

(

Form 1228A

Charge to the account of
C..

OF SERVICE DESIRED

Vir ESTE1;hilzkNA

Telegram

Day Letter

TEL

Night Message
Night Letter

Patrons should mark an X opposite the class of service desired:
OTHERWISE THE MESSAGE

WILL BE TRANSMITTED AS A
FULL-RATE TELEGRAM

YlISTERN UNION

AM

NEWCOMB CARLTON. PRESIDENT

GEORGE W. E. ATKINS. FIRST VICE-PRESIDENT

("2

Send the following message, subject to the terms
on back hereof, which are hereby agreed to
41.4is-

.746

UNION

Qui ce rt--11 eLFirta-it. at cif;

7K-at JL ath,f64:1

Crutz

r,
(170

C-W-71--"
-6

7.;":

Ci/P-)

r63-10--/
Fc-.)

P
-th:

?nor! 6:74--)

0-0

/6e

(A)

r)7L,4_2( c6u7 4LAq

f

dk-

;#.

'22 az.




6-2)07A,

07, ,v2,

Form 1206A

WESTE

CLASS OF SERVICE DESIRED
Telegram

Day Letter

TEL

Night Letter

FULL-RATE TELEGRAM

16aNA

UNION

Receiver's No.

WESTERN UNION

Night Message

Patrons should mark an X opposite the class of service desired;
OTHERWISE THE MESSAGE
WILL BE TRANSMITTED AS A

E

NEWCOMB CARLTON. PRESIDENT

Check

AM

Time Filed

GEORGE W. E. ATKINS, FIRST VICE-PRESIDENT

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

feL6-77u.7 aeQ1?-7:17T-

r

(14,/c:Ar)

,

(i4,11-(rtki

I 4'
-7V),

alin% k?rvrri,

allivikwurt
(1w,CiLt: //cup Ax.)




iat-Gt

vt

Ctaxito..4

,
eiTLeC.

COPY

bok.1

Colo Spr

5/29

Case

Federal Reserve Bank
New York
Papers from Warburg not yet received Stpp. There are many ways by which every
proper assistance can be rendered Cuba without authorizing the monstrous plan
and Cuba should stand the cost Stop Please be sure and make clear to our
directors that if suitable steps are not taken promptly to protect our own
members the opportunity to do so will be lost Stop I an seriously considering
telegraphing Hughes personally on my own responsibility asking opportunity to
submit a statement before he asks for final decision Stop. Am most reluctant
t o do anything direct of course and await your report.
(signed) Strong







Form 1206A
OLASS OF SERVICE DESIRED
Telegram

Day Letter

WESTE... UNION
,7,4,NA

Receiver's No.

WESTERN UNION

N2741,
:Pt
.m

Night Message

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

TELTF1k

Check

AM

Time Filed

GEORGE W. E. ATKINS, FIRST VICE-PRESIDENT

NEWCOMB CARLTON, PRESIDENT

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

tc-ch

tc6ostit.c_ci-

rNa#6'4

,;:-.)F-ccoa,(

iikk<st.tri et.

Ainmg

arid At2.41vo

liffw-ttoLizez,

otti):71/orit/
t letc.FF,7

7 a/Y1
Cc-F2

67an,

eti

avtiz..e.4-16,11

a-rSivyir'4
CALvellio

a-04V

6yrir a_

/7:Re

4-ervi,tr_e_e-c
warm.

61A17

erkirllt1,71J-In,641:1)

alufr

(Wir)

4o

Form 1206A
CLASS OF SERVIOE DESIRED
Telegram

WESTE47,1772EN

Day Letter

UNION

WESTERN UNION

TEL

Night Message

Night Letter

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

NEWCOMB CARLTON, PRESIDENT

IIV:c27,

Receiver's No.

Check

AM

Time Filed

GEORGE W. E. ATKINS, FIRST VICE-PRESIDENT

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

A.

I&&
i

,t4,07_,E4
Ctm-tt,

cvi4,4-4t,t;

.44-

8-4(

ik--0

6.07

ON

6c-fryk.k/o
litt"ItIveiv.A)

OS
414

14,11

614771.,

t
(ff))

L

r




Ciriest/Tr:

Ica(
-647,

4/

gra

r
424,0--zu2,:j

(air c Au?

d

9,Ce iiLLA
C:144411\.4:71

0i4

12/11/11,12/1.04,

azer-iL

Form 1206A

4.

WESTE

UNION
TEL SYX- AM.

CLASS OF SERVICE DESIRED
Telegram

Receiver's Na.

7XTEEN

Day Letter

WESTERN UNION

Night Message

Night Letter

Patrons should mark an X opposite the class of service desired;
OTHERWISE THE MESSAGE
WILL BE TRANSMITTED AS A

NEWCOMB CARLTON. PRESIDENT

FULL-RATE TELEGRAM

Check

Time Filed

GEORGE W. E. ATKINS, FIRST VICEPRESIDENT

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

il/Y"aivr\

6-at7t.

YSt,Ttt,..ft-v.

-r

tc

j/, '

A

arai
6 g4r\AL--- QA-eriptLA

1171,0-71,

tr-r a 63-tivim2fetli
0:4.,Lic

ate;

'MK)

taate
14,4114-w&I,5
driliw

(410 t




Ctrrf\-/aLrRrFT--o-INIVA4

fATIU,

PO

AO-

t7)

ettr'1.

ci:721414,1"'




Form 1206A
CLASS OF SERVICE DESIRED
Telegram

Day Letter

WESTE444Nis, UNION
TEL 111-2"m AM
E

Receiver's No.

WESTERN UNION

Night Message

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

NEWCOMB CARLTON, PRESIDENT

Check

Time Filed

GEORGE W. E. ATKINS, FIRST VICE-PRESIDENT

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

alkA t/tin-nta/:,bCetnitfr.
(u\c"-tAl_

rittkai7P.).1

to

C
ch(45:11-1

t,/, .s
narxwestrawier,

C.0 P
Colo Spr.

5/30

Collect
Case,

Federal Reserve Bank, New York
Warburgs plan seems satisfactory except for anomaly of Reserve System assuming
cost of currency for a foreign country at sane time that charges for services are to
be imposed opon our awn members. Stop. Believe any plan should observe following
fundamentals.
First. Cost borne by Cuba
Second. No depot of currency or assets in foreign country
Third. Branches member banks should not be forced to do business with other than
their own Reserve Bank if they prefer and should not suffer competition in
exchange business.
Fourth Reserve Bank should not maintain own establishment in foreign country
Fifth. Any correepondent or agent should not secure monopoly or advantage over
competitors in case like this where there is no bank of issue for us to deal
with.

Finally Warburgs plan closely approximates this and while T think the whole
project unsound and unnecessary would greatly prefer this to the serious precedent
suggested by Harding




(signed) Strong

FIFTEEN NASSAU

k7nNeui

421),)
:frau;
ettf-ih

61_1)

-771c,f-e--) omade-m

0Actica,i

/1st?

f(i &nth et-ow7/La/A Calt-Vu-ii A
e/a-a-Et 1,64 aw;
4 'MU/Cf. 6°c,71,14Z-J
iticuO7UQcL-efe-0-i4-;

arc(

4vifrti.x.

6t,t

covii,
ct4Aett:e

Ike

(Leh/

wait,

cC(.- 614C-e-7:

imAiLiy,,:f

-ro_

Rke

Nowa-

ax/24-voicycti:



aw---Xeva

oelect:e4k,

-M2A,

&Lc etto(`,ti_f

09

0Lew/RI-- &lite& cOmf,0a6L-

1640-6-

cf,(a)t hcif&Ar

te&joaxA4,

to' yct9tt_c_4

, clue-J

ccia-424-0-okax

tate;

tAi

"tt-v,tu

aotv

oaf'

_

/4 Law- climu

28

01--c&wiac-4p,

Gi- --rfttwg

Iroca,c
ogri

3

47104. went(

atixt&mto 1-us-AN'
-tr-icut7actig
`710_9'

clith

0

01 0

& aiaire a

Cet/rA JO

clatqati.

imam, tAx9;eit

dkt4itutie4-6
er6iLettifl
a) not()

r&A

tr,A

0-tth eldvk Wittal'irvo

017 E:t42

7-4.ax.etvwo

gif-eaa,t4gx folk-Awl aee_

Writ'

c1izciz

eatRA-0;

er áI?atJt 6f cat
athfitiAteNT h&ut
0-

cw toegt) ifah4144 att

c_.r
01,(114

OA

oqd sirurzo- ettc:A

(aura /1-- cle,_c(4,--orehruccfl

tsifitR

istfou.

ee'w-re;

odz etesLtek__

74-- &to.

tgkoice_4
-

ti 1tte4 00(4 £ai 6f prus---froat; ci.dAt416
etk4ealec-;1tISit,v elth
-ne-1-1-;; eivr 4
044

ogiitTpa 4pfta

At?? ecep,,verai




.

c4c-c.

ea.6_,4

s71to-A.0 IøiC4

/6"440`e

004

Railja_tt,

Cooitt,er

ooxgc..

gcf.

6191-74-

Ac14)

Wort((77A4-----d6,--ALe.

71444_;

cfz4

tkvee_d v)A,

Vke &put -

el-W611/iji0,3 -

tfead-a
(vfx_e

ix/T-411

nu-14 jorre_d -re

agout-VdAt

go'

ktal4t1

nt"0

frX4rtY Aail)

07Aattit

.0Le-

6Y

KtileaLf adio-Air 1/4-e4
6ltio:v)%

Gra,f

4w; reit4f

ake,i

cte

itecia

17

X;46frei-eA7qii

Egvr. dagviet

fetteRml

iUtikv-;

6,

7itA,e2A-

cAftbaxwie.,

at\ Waco,:

1

toire fid6:14A1.

ftliz,o_

fiiiku

ert

.

vo-0-4

Afieuv cazimk

Ca- n

Cuitito 7ttfa,
e tit

ccuAl

09- iti<;_

e-MAA,

lemitize-t

torte` axe.t4A-41

-nu_if co-itAtLeti7 cc-Iitt?
ettit 61.5K0.1; wtawh

Yet&

c

Yfur----tie

7ute-o

,-3Y0 ax)
- CA- (Qat' /Oil) 77te /a06
frrt-e1461 (bit- 7Air Acizat: eittIAArYntie.:

&LA

,)

ot41A--014-- gattio9t4) (QAtOcc-07 itrzurtia4
,o

ofett",
61m4C.


totw.,K

AceArti

1412

031Abz

/criev-?

aft-tut?. -1

-1(Z4

acti

6-f-aftvilat 74
ittirKLI at-o--mAr

ta

97Lea4

twiltiA.tJAh

&tie- tluk4---

kectiE_d

etypt oti,AA" 6fA----ftexdo

k cut

Kket4Airt4t,7

ak' ay-cun

et/RAI,43

ockeicLI

ootxte.

154,-( ettrtf.az

au/

ifitte

ax-r/A--e-7tAr

(61.1,cal;

&tvi

cate-c'

-(4- /909,eirit:gt44-

eito-ititv; aidLo

(A;

etu;"

(9-tcric

chr-7-1L4

W. W.

ral/et/r1

Cragmor, June 15, 1923.

Dear Mr. Case:

A period of coughing and of course some strain on that vocal cordled
me to shut down on letter writing.
It's: better and I shall send a brief reply to
your letters.
May 15th.
This is really covered by my telegram.
It must be borne in
mind that in none of these transactions are we required to have the approval of
the F. R. Board, and I am sure that none of you will accept such approval or disapproval without our directors being first fully advised.
The best way is to
avoid the situation by not inviting it.
The reports of the action of the F. R.
Board on this matter indicate that they assume a right to approve or disapprove
" transactions".
That right the law does not give them, they can " regulate".
June 1st.
Thank you for keeping me so well posted.
The situation seems
to be improving, but we simply must insure that our own members are protected
against being forced to do business in Boston,- or else forced out of the Exchange
business.
The time to make sure is now.
Ofcourse you have all had your heads
together and will work out some plan.
Were I at home mine would be simple enough.
I'd go to Hughes, tell him N. Y. or Atlanta or all of us would furnish all currency
required if Cuba would pay cost of prinling and shipping.
Then I'd show him how
monstrous it was to go into Exchange business and open an office there, and should
he listen I'd also see the President, and then if such plan could be put through
I'd ship gold certificates and get our dirty notes out of Cuba.
If there was kicking about gold I'd ship greenbacks or silver!
June 11th. This tells the story.
Once such a direction is accepted and
acted upon - good-bye Reserve System and some other things!
You seem alive to
it and Norris also.
Don't take the responsibility in taking a position without
full support by our directors and then stick to it through thick and thin.

Our attitude must certainly be to help Mr. Crissinger by all means in our
power - but not to surrender the bank!
Of course this is very bad news.
I want to think about it. Possibly
good legal advice is in order, in which case the other reserve banks represented
on the Committee will want to be heard from.
You might consider a talk with
G'lbert and Mellon.
Again many thanks.
I like to get the news, even when bad
it will keep me posted so as to be oriented on my return.
Meantime I regret
having no share of the burden.
Best to all at the bank.




Sincerely,

B. S.




SYMBOL

.

Night Letter
Vese

WESTE

UNION

WESTERN UNION

to

Is
er of

e

n.WeisMI (n
_s) t is a telegram.

U

Other-

wisei ts character is indicated by the
symbol appearing after the check.

TEL

NENVCOMB CARLTON. PRESIDENT

Telegram
Day Letter

Blue

Night Message

N ite

NL
Night Letter
If none of these three symbols

AM

GEORGE W. E. ATKINS, FIRST VICE-PRESIDENT

RECEIVED

CLASS OF SERVICE SYMBOL

appearo after the check (number of
words) this is a telegram. Otherwisei ts character is indicated by the
symbol appearing after the check.

-1():23 JUN 22

I

I

COLLECT 1/7
CO DORADO SPRINGS CO LD

59
L RE SLR VE ELIsTK NE W YO RK NY

LGHTEENTH SUGGEST CONFERRING WITH WARBURG '4FF 0 P

EING ST.0 P

LL TiANGE..7.71.EPLTS REFERRED TO CARRY OUT POLICY FREULNTLY DISCUSSED
T., BOARD AND HERE-7' 9.0 FORE THOROUGHLY APPROVED S TO P THEY ARE INTENDED

) lAY THE FO UN DAT ION FOR FUTURE REGULATION. OF EXCHANGES AND GOLD
AS 'HARDING WE LL ENO WS slop JAPANESE AGREEMENT WAS TILDE AT

'CIAL - RE QUES T OF OUR GO VERNMENT AND HUGHES HAS EXPRESSED THE VIEW

IS

IRABLE Slop THE TERMS ARE A D151 TTE DLY

(90

22

ifs) this is a telegrath.
wiseits character is indicated by the
symbol appearing after the check.

Lr-1:::44111K .14,11V1
NEWCOMB CARLTON. PRESIDENT

GEORGE W. E. ATKINS. FIRST VICE-PRESIDENT

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

RECEIVED AT

923 JUN 22
-1; DED tii BE BUT IN EVERY CASE ARE, RECIPROCAL AND THOSE
1,0".

SUCH INSTITUTIONS STOP THE ABILITY OF BANES OF

ATE TO DC) THIS BUSINESS "CITH US IS AN IMPORTANT ELOkENT IN THE
RIDUAL EXCHANGE RECOVERY AID STABILIZATION E017 LIKELY TO TAKE
TO DISCONTINUE OR KO DIY THEE \-1016TLD CERTAINLY BE DISCOURAGING

.

AND DF11-TPLY RESENTED STOP AS THESE HAVE BEEN OPERATING; WITHOUT

PLAINT FOR SOLE 3ARS UNTIL HA.RDING MD APPROVED THEE AS GOVERNOR
SUDDtaiLY. AND ALONE DISAPPROVES IT SEEKS AN -UNWARRANTED




....ens character ir, Indicated by the i
symbol appearing after the check.

am ear or am", -111iIrr a16-41r,11.a VA
NEWCOMB CARLTON, PRESIDENT

GEORGE W. E. ATKINS, FIRST VICMPRESIDENT

this Is a telegram. Otherwiscits character is indicated by the
symbol appearing after the check.
[WOOS/

RECEIVED AT

JUN 22
'




5/33
-

'TO-

DO ANYTHING ABO UT THE ARRA-J. A.,

1_

ULCTT_L M

'RETURN VIC P.

LLL THE ARRANGErENTS MYSELF AND 1110 7; THE PLO ?LE PERSO
7.0 ULD I:0 S TPONE CONSIDERING THE 3 "LT r2ER UNTIL FALL

STRONG.

LLY

June 22, 1923

Case

Federal Reserve Bank of New York
Yours eighteenth suggest conferring with Warburg before meeting

stop

All

the arrangements referred to carry out policy frecuently discussed with Board
and heretofore thoroughly approved

stop

They are intended to lay the

foundation for future regulation of exchanges and gold movement as Harding well

knows

stop

Japanese agreement was made at especial request of our Governrent

and Hughes has expressed the view it is desirable

stop

The terms are

admittedly liberal and intended to be but in every case are reciprocal and those
customary now between such institutions

stop

The ability of banks of issue

to do this business with us is an important element in the gradual exchange
recovery and stabilimition now likely to take place and to discontinue or modify
them would certainly be discouraging abroad and deeply resented

stop

As these have

been operating without complaint for some years until Rarding who apriloved them

as Governor now suddenly and alone disapproves it seems an unwarranted procedure
to do anything about the arrangements until my return

stop

As I made all the

arrangements myself and know the people personally believe they should postpone
considering the matter until fall conference




Strong




WESTE F.-, 3
0A4\:

CLAcS OF SERVICE SYMBOL
Letter

t Message

Blue
Nite

' Letter
If none of these threeI30u .

UNION

5

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

P"

UN

T E Ivrj. AM

NEWCOMB CARLTON, PRESIDENT

'al appearing otter the check.

Telegram
Day Letter

Blue
Nite
NL
Night Letter
If none of these three symbols
Night Message

WESTERN UNION

appears after the check (number of

CLASS OF SERVICE SYMBOL

appears after the check (number of

words) this is a telegram.

GEORGE W. E. ATKINS. FIRST VICE-PRESIDENT

Q ITZW YORK

RECEIVED AT

/923 JUN

22 pm

LT_LC T

CO LOR:kr0 E'11. H.

S COED

10.541.-

NEW YURI,: 'TY;
._

I0

BUT TEL= SO ILE WHAT JFIC "ENT IN NOT srpi-LsiziNG

.

PUBLIC THAT VTE VILL GQ FORWARD AND NOT BAC ITARD

.LDP ALSO AS

WARBURG TO PREPARE TECHNICAL STATDa.z;NT

RT.id,iCE OF THESE UN DERS TAN D ING-S IN FUTURE RESTORATION OF

ST±J3ALIZING EXCHANGE
STRONG.

Other-

wiseits character is indicated by the
symbol appearing after the check.

Telegram

June 22, 1923.

Case

Federal Reserve Bank

Like statement but think somewhat deficient in not emphasizing expectation by
public that we will go forward and not backward in this matter stop

Also ask

Warburg to prepare technical statement showing importance of these understandings
in future restoration of gold payment and stabilizing exchange




Strong

Fi

STREET

FTEENNNE,d/X:::

Jab, el/723.

c kw

entah

Wikatt4 074-py

eith. gcorwo

ciat4

trtt,
oae

etac

41474aube

lox tfccogi lad

.10-7-

_

(fr-Catc& evu, fitiafrit-t

Cern-vry,tAIA--

ike

axa_ce,4: 6-ciE-urvo

PiaaitrEz

Ilettnt.

&kr Ileac(

kalif

Cett Cet/ieuAk
Pu/g/a
iLeA
07Avice

ata al) faltecto



oeeti

ettrink4t9j ?na/ru,
to rz r

/roil

(.4zinatt

°V incor/Af

tertAci

e
P71/7-Aite

&tit

a,o cof

gccownWA ikt4 Warr?
etyvy

coe3'la-d-

(VLtLC
7-145-rAA4

WV-S I

.642.er

dfiff,atgiva avoc;&).

au, kvu

.

10- wut az-r3M--

ettLera

dexe

thra_e

1910u4649oniv

au-4" den

(0-5fle-t-cri;

ate/m.

(*elk

tortxe-4

tO2taItA,?

kutaia,614
v- ??1,4 6-(0-fAJ414

Yirrti Øj4/0

Colorado Springs, Coi,
Cragmor,

July 9, 1923.

Dear Mr. Case.

for the Conference minutes *bleb Mr. Barrows sent me.

Thank yo
I am sorry

you nave had a dose of poison ivy, it can be very painful

and troublesome.

The Only (Mment wich. occurs to me about

the Conference is the possible

unwisdom of moving'from one 7)1.,t1 of coercion to anothr, whic
have done.

has been the 'undoing of many

go:6d intention in ttlis world of

human beings, and as we are certain to encounter ttiefft.ir
winter, I ,ronld have

is lftet we seem to

in Congress tnthe

liced to see the appeavance of "7:..rr, Sure avoided.

There is nothing new here. Weather gorgeous and a.9petite good!
Remeillber mr: to sli. the felkS at the bank, and my best to you.

Sincerely,

B. S.

/



,JM-4-22

FEDERAL RESERVE BANK

OF NEW YORK

OFF ,CE CORRESPONDENCE

1.7

DATE

1923

SUBJECT:
FROM

Ofet),

`Cct/7

.

/*al
Itut,1

Coaft,

to rric.aq

culcfr

_

.AYta4).

Q

(07 t.

(amt_ F,c;,

Ccfi-cr-f-cAsc

t)ae

ccfr3cfLeti.
AcWiTr034/1-

tu

Oa- R-t_ e_c_cucts-

4-rvitim&-ir)

catAir

_eteatowo kukt

r

601/-r-

avnvutylf
c-

/4'

firi-----ftt

4,;

iNsaix-4

ecy-

4 z tr-;0-1/4,

Ltc7

'

(4;

It: 7141

Pa/14-

IvA--t 19 airy

66,1tit-




&fru). (Co vk

tigt;

rk,

rct_e.f

MA4_61tecc_0*,

attA

eah,c4KA
3-oLs

(24176r--

1)

Ettre

si-rvtA4 ZIA(

1
cut

on_

OW,

6-ev1,6-04(

ec4

0

24-1
citALeAli

dv7

air-a-h.:

I

ht(Lf,
ktat.

prytc

pa,e7

etv

&fat&

till-s&t

171114

tXxl

fo-c

detia442-4

0-;

621.0 .

't4

10- cAt4/

444e4

bv-a

lasA- 1Th

fget-Ltet'g ,Cc#C-;-

Fr;1.,)

(co-fre-

Verce_v

PcA.A-

,(6t4,

4-y;;AA-

.evrt;

ael,k

ceo-74,r-

afe

cto

cl,,71/1/

iciv
47-atwx.;

C,;

Ptt/Q-3-tCYVIL

4:7-0

Iva",

gfrazi

no-aJzA
OCUr-1

40-CiAct4

attitz

tkui

httAAv_4

447




-

AtaN

Or7e_

Ittr;

afk

taz"c

cp\A)

Colorado Springs, Col.
Oragmor,

July 11, 1923.

Dear Mr. Case:

Yours of the 7th and enclosures have been read with great interest.
I like the way the Committee is working, especially in its seeming cooperation
what you write of Harding's assault upon the foreign account9

with the Board.

proving abortive, is also good.

Of course you will discontinue sending him

I can't stand for many of those affairst

all reports.

The increase in borrowing is New York is without question due in part
to the sale of our investments.

be very careful not to overdo it.

That puts pressure on the market and we must
I've written Jay a line on that, also Miller.

Don't ever overlook that the discount the borrowing banks pay us is like a tax
whidh they do not pay when we supply funds to the market under Sec. 14.

Banks

like to get out of debt ( with exceptions) and the pressure they put on borrowers
and to sell bonds, is what causes liquidation all along the line.
overdo it anddon't

So don't

hesitate to shift position and buy when evidence of pressure

is too strong.

I am sorry the Board cut Harrison in pay during illness.

his work that banged up his knee.




My best to all at the bank.
Yours,

B. S.

It was

OP

MISk

FEDERAL RESERVE BANK

OF NEW YORK

OFFICE CORRESPONDENCE
44

ag_

F

DATE

92

SI

SUBJECT:

FROM

L1

citE,.

gaki

.

074a0A

ffrv

atm -elitu(Af_

441.00,f-invnir

C(4)

f &AN -rivv-vo

'nut

Twfvwcr
arkti




cv6Licuti

ertu

AALL-ciAk,15-1A.

71,1-44

/if

co-afe-444.cs,
6t40-)k

ILlaW
((Ulf

/- 17 4e427-9-tet4

cutuv",-ei

7Let

aitf

f(/AA/O
ectilzvx/v)

P-/iit,e4L

teal°

htkAr

'77u;t4 fra4

it4

tru9

kcautA

atx4s

atct-t

d'4

etio,Qx kitYi

ecuiruy
CdittAi

, /tritkir)

Aff tu)a

aitc_-&11

calAk_

Oio




Oolondo Sprihgs, Colorado.

July 17, 1923.

Cragmor,

Dear Mr. Oases
Thanks
statement.

Investment

Please have in mind that we must not

policy too far.
just now -

for yours of the 11th and the

It

carry our

could do much harm - too much

and as fall approaches

pressure

the money market will

need

watching.

Why not sell

our own bills to any of the Reserve

banks that are shy on earnings just now?

Remember me to all

at the office.

Yours,

B. S.

FIFTEEN NEEAUSTREET

atetet45zitt949-)

ler? co7 d

-

a,at
()vacA^ &,
iteAtro (xi`

6,0491,3-

arfrce-IA-J

((CI

ciL.A

(Sake,

-Itug:tra

yee-f

ttuz




ctt

6.4- ca,r-Le.

vvicf-a-c

Ped-

771 cYA

paA4,0-

4fanx.07Atfc

02,a_t_iLtp s.

k/-dkJL go-Left;c_A.

,ter

Cerncrtta

tt4

ked-ct,

kauktiii

get,624144
hr each

ca42_c

joycezd tifaLte

nut

1-cw-c-ityLa4_fe

do latiLefi-

elf-Cieut.k 4ôLtw

et

orcRnlit-W;

ittszt/ILA-

7ILAT

ire"

irrzo rk 9(011

tro-#74A

(# 1,co att-J

pitira_prci.i

Ctifet

Kice-743

c

eiGg7

)

Cr.r. a/25_

voc&

ag Xa'atA ;

ahee tei
ifit;014,1

ôik

tt

4-ma,

.

Cug-%giut

ecN2-7z-?

F942kette.(9,

toCvtiw4,
74.6T7 Ara./o

tiferikrzAt-erc7,

(ILL-)

60-taucc;

ILL 6-s-vvoct-tp-

O

,

Pail

0.)

ce-o_e_ct

gucid,4,aieaJç

%Xclice

ilue49-0-111

C.-/Pi91-v-i-

111W

(3*-0-u,r

64,61vo
1007-A

141441'1(
,

arzio:k

#62140_44

1611-1

I

_WU/W-7

Ct

r

IL5 t a

&./0

72(C----6'49-43-

/e ccaca tat

erri_fte,,

144

ii4,70J,

/1/ca.a.(4.1",

-&,z414 66-4-- 7G

-atiAtilizaAre-7" ___170z14.4n

,e2AALE

Pail?

tOciti

4-ee1314,11

crtzt.

46;14

64_<tertz.-,

q

_

4

cear
Alrtr

41,41-

tiwY

kt4vo Aug:

CAL07

dr 'r

kjk,

kgth ALL'. eat"




'KO

daat/ILft_J

.gzt` ick; Ay;

ksrAtAt/If

aiRi;cco--.4" (;464vii

711-111.151

CAICALO

Colorado Springs, Col.
October 2, 1923.

Dear Mr. Case:

You certainly know how to give a fellow all the news in
tabloid form with exhibits in extenso attached.
and refreshed!

I feel posted, oriented,

My thanks and my blessing.

On the whole, my recent prognosis of our affairs in prospect
is favorable.

These views from a distance sometimes put more accurate

values on the various parts of the landscape than do the "close-ups".
The Congress will hardly be able to do US harm;
integration of the forces which bothered us.

I see evidences of disIf only the Board will

perform as they should, - especially as to the LaFadden inquiry.

Certainly

the Atlantic City meeting was encouraging, and the Advisory Council has
helped stiffen the Board on par collections.
Sailer's building reports indicate that we shall recover a
profit, rather than pay a loss, on our leases.

Wonit you ask Yr. Rounds

to work up a memo, for me as to what good accounting practice, which we
can defend to Congress, Treasury and Board, will permit us to do -in applying

both the lease cancellation reserve fund and these profits, as, when, and
If realized, upon the cost of our building.
doing" - he's so damned honest

,

I fear he will say "nothing

bless him! - but I'd like his opinion

just the same.




Vy best to you all, and many thanks for your fine letter.
Yours,
B. S.




MM, 4. 1MM,3

FEDERAL RESERVE SANK

OF NEW YORK

0.

_

CE CORRESPONDENCE
Irs

Mr. Case

To

DATE

Oct. 16, 1923

1 92_

SUBJECT:

Governor Strong

FROM

ct

Dear Mr. Case:

P

CI
This is about tie I had expecte B o

especially as

the chickens

to report, and of course I agree,

to the F & L a/c, and stiokin to our program.

We can do nothing until

hatch.

Glad to hear
Think it was

'7413

of the Governor's call, and hope

handled just

right.

he does it regularly.

Fear he is in a hole OD the "Branch,' question.
Yours,
B. S.

MEMORANDUM RESPECTING
EFFICIENCY AND ECONOMY IN THE
OPERATION -OF THE FEDERAL RESERVE BANK OF NEW YORK

January 13, 1922.

The purpose of this memorandum is, first, to define the problem of incroas
ing efficiency and of reducing the cost of operation; second, to report the progress
alreq.dy made, and, third, to outline the steps that are yet to be taken, toward
solving this problem.

STATEMENT OF THE PROBLEM.

Perhaps the first requisite to clear thinking respecting the subject that
has been raised is a recognition of the differences between the responsibilities
that confront the management of a Federal Reserve Bank and those with which the
management of a commercial enterprise is commonly charged.
In the first place, Federal Reserve Banks are great service organizations

established primarily to render certain services to member banks and to the United
States Government.

Nearly all these services are required by law or by the policy

established by the Federal Reserve Board, and must be performed whether general
business is good or bad, and do not vary in volume in direct proportion to the increases or decreases in commercial business.

To illustrate this, it may be pointed

out that during the recent decline in general business activity, the volume of
transactions in the two largest functions of the bank, namely, the Cash and Collection functions, materially increased.
In the second place, in a commercial enterprise there is really only one
class of expense over which the management has no control, namely - the taxes paid;




- 2 .

decision as to every other expenditure rests solely in the hands of the management.

!.,0

In a Federal Reserve Bank, on the other hand, there are comparatively few items of
expenditure the incurrence of which is solely within the responsibility of the management.

The following summary shows to what extent the expenses of the Bank are
subject to the control of the management.

Estimated
f or

1920
1.

Subject to complete control:
(Activities which the management
may establish or abolish)

1921

1922

585.319.62

4,894,405.39
1,521,164.40
148,006.06

5,425,845.02
698,351.96
141 224.92

5,086,961.61

1 375 350 .04

1 ,719,490 .73

1y)80,932.00

7 938 925,89

7 984 912.63

6 683 384.84

Grand Total

3.

.$ 599,036.88

Total of items 2 and 3

2.

469,748 .41

8 428,674.30

8,583,949.51

7,268,704.E

Subject to control limited to the
enLorcement of efficint and
economical operation:
Inherent in banking operations
Incurred as Fiscal Agt. of U. S.
Incurred as Depositary of U. S.

376,857 .13
138 , 614.10

Not subject to control:
(Assessment of Federal Reserve
Board, Cost of Currency, Gold
Shipments, etc..)

It is clear from the foregoing that the problem of increasing the
efficiency and economy of operation of the Federal Reserve Bank of New York requires
that the following steps be taken:




1.

A review of the various activities wholly under the control
of the management f or the purpose of determining Whether each activity is desirable and necessary
in order to safeguard the resources of the bank
and to render satisfactory service to member
banks and the U. S. Government.
Whether the scope or extent of each activity is
inadequate, adequate or developed beyond the
needs of the service.

2.

To examine in detail the methods and procedure carried on
in every department, for the purpose of establishing and
maintaining the most economical and efficient operation.

Since the bank has no control over the volume of transactions in the
operating departments, the problem becomes one of reducing the unit cost of operation to the minimum that is consistent with safety.

The economy of operation

of these activities can only be shown on the unit cost basis, as it is conceivable
that even on a lowered unit cost the total expense might increase due to an increased volume.

PROGRESS ALREADY MADE.

Early

in

September, 1920, the question of making an intensive study of

the operations oi the bank with a view to increasing efficiency and obtaining
further economy was

discussed

informally at a ranaging Committee meeting, and on

September 28, 1920, a definite program for undertaking this work was prepared.
as result of this proposal, the Managing Committee appointed three officers to
constitute a Committee on Procedure, which began work in December, 1920, and has
completed the following surveys:

Methods of Handling and Accounting for Securities
Discount Department
Standardization of Positions, Grades and Salaries
Or

Certificates of Indebtedness Department
Government Bond Department
Country Collection Division
In addition to the above, ths following miscellaneous work has been
finished:




Special Analysis of the Expenses, prepared for the use of the
Governor at a hearing in Washington before the Joint Committee
on Agriculture.
Preparation of a plan for the establishment of a reasonable book
value for' thenew building and also for providing, for depreciation.

As

)

At the present time the following surveys are in progress:
Cash Department
Mail Teller's Division
Statistics Department
Examination of various departmental andgeneral reports
for the purpose of (1) standardizing those that are
essential and (2) eliminating those that are unnecessary.
In every survey made, it, has been found that material savings could be

made in operating expenses without reducing necessary safeguards; in fact, in a
number of cases it has been possible to establish a more economical procedure,
The following schedule

which at the same time increased the safety of operation.

is presented, showing those departments in which surveys have been completed and
the expenditures for 1921 compared with the estimated expenditures for 1922.

1922

1921

Securities Custody Division
Securities Department
Bills Discounted Division
C. of I. Department
Government Bond Department
Country Collection Division

$145,787.62*
62,313.37
101,567.57
74,265.35
233,446.87
269,409.35
886,790.13

1.14,729.28

74,375.64
134,003.77
114,324.31
457,553.19

303410.79
198,396.98

311,606.85

Net Decrease

It must not be inferred that the large savings shown in the schedule are
due solely to improvements in procedure; as a matter of fact, the greater part of
it is due to a reduced volume of work in certain Fiscal Agency divisions and
in the Bills Discounted Division.

Moreover, the improved procedure was not in

operation in any of the departments for the full year 1921.
It should also be stated that important additional savings in the oper-

ation of the above departments can be made if and when certain additional recommendations made have been adopted and put into effect.

For example, important

improvements have been proposed relating to the operation of the Government Bond
Department which are




*This increase resulted from this division taking over the receipt and
delivery of securities formerly handled by Bills Discounted Division
and the Securities and C. of.I. departments.

5

awaiting the approval of the Treasury before they can be put into operation.
In many cases the operating officers in charge of those departments
under survey have taken a leading part in reducing expenses of operation.

The

most notable example of this effort occurred in the Government Bond Department.
During the year 19213 the payroll was reduced $200,899.52.

This reduction was

made possible by a reduction in activity and volume of work, but could not have
been effected unless the operating officer in charge had accomplished important
constructive results consisting chiefly of consolidating 14 sections into 8
sections, and a reduction in personnel amounting to 143 persons.
There have also been numerous cases of reduction in expenses through
more economical operation effected by operating officers in departments that
have not yet been surveyed by the Committee on Procedure.

The most notable

example of this has occurred in the Check Department, in which in the face of
increasing volume of work the total cost has been reduced as follows:

Estimate for
1920

Check Department

Transit Division
Total number of items
Cost per item

1921

$985,953.22

$961,372.73

55,839,481
.0095

63,394,784
.0086

1922

$879,161.06

Other departments in which similar results have been obtained are:
Estimate for
1920

Collection Department
Accounting Department
Auditing Department




$497,942.70
345,327.11
298,747.29

1921

$535,501,42
332,204,33
254,864.94

1922

$493,901.94
314,356.29
221,093.71

wf)

0
-6-

Standardization of Positions

Grad s and Salaries.

A standardization of positions, grades and salaries of the employes of the
bank has been approved by the officers and by the board of directors and is now in
effect, having been used during the month of December as a guide in connection with
the adjustment of salaries for the year 1922.

The main results that have been

accomplished by this standardization may be briefly enumerated as follows:
The appraisal of every position in the bank on the basis of
its responsibilities and requirements in the light of market
rates for clerical labor.
The disallowance of suggested increases in salaries which are
already at or above the maximum established for the position.
The adoption of a comprehensive method of consideration of
salaries for the whole bank once a year and the facilitation
of the work of the Salary and Promotion Committee.
,4.

The establishment of detailed specifications for the duties and
qualifications required for each position, which serve not only
as an aid in hiring, transferring and promoting employes,. but
also give tne employes specific information as to the requirements
that must be met for promotion.

Organization.

During the past year certain important imprevements in the organization
of the bank have been adopted which should make for greater efficiency namely:




Executive management has been established throughout the
whole bank, that is, the principle of departments reporting to the Managing Committee has been discontinued, and
in its place the principle substituted of each department
reporting to a Deputy Governor.
The departments are now grouped under the four deputy governors
according to the relationship of their operations.
The Administration and Accounts functions have been placed under
one Deputy Governor who has sole responsibility for the control
of expenses.
(Mr. Sailer)

4_

V.

-7-

Meetinas of Officers in respect to the Control of Expenses.

On

June 13, 1921,

Governor Strong called a special meeting of officers

for the purpose of considering the reduction of expenses.

a second

On September 16, 1921,

meeting was held for the purpose of reporting as to the progress made End

for formulating further plans. toward economy.

Every department of the bank was

represented and each officer made a report stating what had been done and what it
Early in Decem-

was proposed to do in the department for which he was responsible.

ber, each operating officer was required to prepare an estimate of expenditures for
These estimates tare reviewed by Mr. Sailer.

the calendar year 1922.

It is planne,'

that, in the light of actual experience, revised estimates will be made at stated
intervals during the calender year 1922.

On December 19, 1921, a third meeting

was held to consider theE&imatasof expenses for the year 1922.

Each officer was

impressed with the importance of not merely keeping within his departmental estimates
but of effecting further savings, and was directed to make a specific report on
Feb. 1,

1922, of what plans he proposed for reducing expenses in his

function or

department,

STEPS THAT REMAIN TO BE TAKEN.

In order to

bring

the constructive work to a successful conclusion, the

following steps remain to be taken:

The completion by the Committee on Procedure of the surveys of departments

and divisions of

the bank.

The elimination of unnecessary and inefficient employes as fast as the
full facts are determined.

The continuation of periodical officers' meetings for the purpose of
considering the control of expense and the elimination of waste.




ta.

-CP

- 8 -

4,

April,

The preparation of new estimates for the calendar year 1922,

in the light of the experience of the first quarter, and again in

in

July

,in the light of the experience of the first half year,
5.

The review of the monthly statement of expenses so as -to compare

the actual expenses with the respective proportion of the estimates for the
year.

Finally, it is the purpose of the Deputy Governor in charge of
Administration and Accounts not only to pass upon the daily requisitions for
labor and supplies but to review with the controllers and managers their
monthly expense accounts with special reference to the estimates for the year.
PLANS ADOPTED FOR EFFECTING COOPERATION BETWEEN
THE TWELVE FEDERAL RESERVE BANKS
In November of last year, the Federal Reserve Board appointed a Com-

mittee on Efficiency and aonomy consisting of two members, namely, Messrs. Miller
and Mitchell, and formed a supplementary committee consisting of Mr. Wills,
Chairman and Federal Reserve Agent of the Federal Reserve Bank of Cleveland, and
Governors Norris and Calkins.

The Board also directed that each Federal reserve

bank appoint a committee of its own to undertake the work of establishing more

economical and efficient operation, and also that each bank appoint a representative charged with the duty of effecting cooperation with the other eleven banks.
It is understood that these twelve representatives will meet periodically for the
purpose of discussing the progress and plans of the work.

In taking this action,

one of the chief purposes of the Board was to establish a standard expense analysis
throughout the System so that comparative information could be produced.




FEDERAL RESERVE BANK
OF NEW YORK
January 23, 1922.

Dear Governor Strong:

I take pleasure in enclosing for

cur use six copies of the

seventh annual statement (circular No. 432) of condition of this bank
at the close of its fiscal year, December 31, 1921, and of the Profit
and Loss account for that year, showing the disposition of net profits.

Copies of the statement have been forwarded to our directors and the
governors of the other Federal reserve banks; also to the members of
the Federal Reserve Board, Mr. Gilbert of the Treasury, and gr. Paul
M. Vvarburg.

As have given the matter of its arrangement a good deal

of thought, and I trust it will meet with your approval.

I am also enclosing a memorandum respecting efficiency and
economy in the operation of the Federal Reserve Rank of New York, which
was submitted to our directors at their meeting on January 13.

After

going over it our board, I am sure, was satisfied that the officers
were doing everything they reasonably could to bring about efficiency
and economy in the cost of operation.

You are, I hope, rapidly recovering from your recent indisposition and I trust that you may soon be back on the job with a large
amount of "pep."

If you have not already seen them, you may be interested

in the enclosed cartoon taken from yesterday's"Time4and the Harriman Rank
advertisement which appeared in thenTimesnto-day.
Cordially yours,

Benj. Strong, Esq.,
Mar1bcrou6h..:Elenheim Hotel,
Atlantic City, N. J.

Encs. (9)


116 fr'

"

HARRIMAN NATIONAL BANK
Fifth Avenue and 44th Street
NEW YORK

Excursions In Finance
We recently commented upon the inviting mark
offered by prosperous organizations for the shafts
of the unsuccessful. To anybody familiar with the
A B C of finance, it is perfectly clear why the Federal

Reserve Banks have prospered through our recent'
distress. Now, this is no time to ridicule the efforts
of the agricultural community, or any other special
class of citizens to force recognition through representation upon the Federal Reserve Board, but we
cannot refrain from comparing their demand for the
distribution of Federal Reserve surpluses to an attack
by a bunch of political burglars.

Why not appoint a "dirt" farmer to the Board
for the distribution of the surpluses to the greedy
He will undergo no criminal risk, and
politicians?

his sensibilities will be quickened by the opportunities presented or which he could create. But mark,
if such a wedge be driven into the Board in favor of
a particular form of industry, there will be no limit
to the extent of such class representation. If a "dirt"
farmer, why not a fishmonger, an ice manand particularly a politician, who is honest agreeably to his
Thereafter, our railroad and industrial
standards.
corporations might consider the desirability of rep-

resentation upon their Boards of Directors of the
"short" interest in their securities. Why not?

There are, however, limitations to the patience
of the practical business man, who is called upon
to observe assault upon an organization that should
be as free from politics as the Supreme Court of the
United States, and in the name of its shareholders,

depositors, and business
National Bank protests.

the

Harriman
friends,

RANKING HOURS FROM 8 D'OLOOK A. M. TO 8 O'CLOCK P.M.
$AFE DEPOSIT VAULTS OPEN FROM 8 A. M. TO MIDNIGHT
OWINMEMEM




01111VMMINMENPRIIMIMMIIPCNILUILOCUS7.1721P.:3-311111..71Ilr..,

g111111r I IMM111110
,Tr.rwer

died)

5.25

"""I

-

6.75 Pair

11111111

:heon & Co.
and 33d Streets

The end-

=EVEVANNEOMMelill
.

ance of dlc
offered no

to the mc
Light or

Top Shoe
PEOPLE

the most popular

mixtures;
models. .A.]
standards.
markable

s the women's Wide
ras designed to meet
pf unsightly gaping
is accomplished in

er. Women appree or semi-wide top
xtension heel.

ere Else

Coward

Street, New York
n Street)




HERALD SQL

eAtmEn2armgmarstrdmvini

Readers of The New Yo
Exchange columns clean by

4

xx 111r1W11111.!

41111.111MinmMlir TAFFNEW YORK

WAY° KOHLER
WHO CA

Kohler had issued a warning that 4

taking office he would eliminate all Jo1

and employes not irom .d'-*.ly requir,

for the operation of c.

.-viees.

I

had issued a warning also that all 4-11

BACK

employes would be expected to be
their posts at 8:80 each Morning at
that they would be expecf<sd to keE
busy till 9:30 each evenly
ostead
quitting' at 4130 as they hai been a
lowed to do under pre.*Qus Admini
trations.

Jan.
leveland's Chief Executive Still Upsetting Predic- was a 1, the day Kohler was sworn t
Sunday. Monday was a leg
Tuesday morning Kohler a
rived promptly at 8:30 to begin re,
tions and Precedents in Conduct of His
work, and it was a tribute to Holder
reputation for keeping his word that a
most without exception the rank and fi
Office FulfillingPromises
of city employes arrived at City Ha
that morning before he did. Holder
holiday.

serial/1g the gaining strength of the man. the city to aid him in choosing a. Cabi- first act was to give department as
hours to srr
less than nine Years sanctioned his nomination for County net, a procedure hitherto unheard of in division chiefs forty-eightthey believe
pare lists of all employes
ago, March 18, 1913, Fred Koh- Commissioner. Even with this backing Cleveland politics.
dispensable, and by Thursday events
ler walked out of Cleveland's he was defeated, but he ran so strongly
been ellm
*kLITTLE repudiated as a public that his place as a candidate to be reck- With the 'co-operation of the Bar more than 700 employes hadKohler t]
City Hall,
official. He had fallen from the oned with was assured. In 1918, Kohler Association he obtained T. Paul Lamb, nated from the payroll.
called for further reductions by
101 position he won in ten years' was elected County Commissioner, and an attorney of more than usual promirVice as Cleveland's "Golden Rule" in 1920 he was re-elected, in the latter nence, for Law Director. With the ap- process of consolidating Jobs within d
lief of Police; " the best POlice Chia case polling a plurality far beyond that proval of the Bankers' Club he named partments.
America," Theodore Roosevelt had polled even by/the rest of the Republican G. A. Gesell, Secretary of the Civic In the incantime, hosts of jobseeli e
ticket in the landslide of that year.
Meg him once.
League, and a leading critic of financial were storming City Hall in the firm co.
This man, whose efficiency and hon- But when, in the Summer of 1921, policies under previous Administrations viction that Kohler was firing cerir
ty in poll& administration had con- Kohler intim eted that the logical time for Finance Director. Ile appointed John people only to make room for
ibuted much to the success of Tom L. had come ftir him to make good his F. Maline, manufAturer, a man with friends. They were destined to diss
pointment.
for
ohnson's administrations as Mayor had nine-year-old declaration to run
By W. M. TIJCIMAN.

1

engineering training, Director of Public
3en broken on grave charges involving Mayor, he found the Republican lead- Service, and Arthur B. Roberts, another
S persona/ conduct. Johnson had died ers skeptical and elusive.
business man with a technical training,
'Id Newton D. Bakej was Mayor of " Kohler may get by as a Commis- Director of Public Utilities. And all his
leveland in 1913. Baker, although ex- eioner, yes, but as a Mayor? Well, other appointments sar. re made after an
ressing admiration for Kohler as a Po- that's a different proposition." So ran examination of the 'training and themece Chief, had felt compelled at last to the talk among the shrewdegt ,eaders.
:quiesce in the charges.
Besides, they already had a candidate
So there was a long-drawn-out trial in Wiliam S. FitzGerald, then Mayor.
Bfore the Civil Service Commission.
And then Kohler announced that he
aarges and elaborate specifications now was going. to run anyhow.
He added
anost forgotten were aired publicly in to this the startling announcement that
tie court and warmed over daily in the he did not propose to make a single
mspapers. And in the end Kohler was campaign speech or promise, except

und guilty and dismissed from the the promise that he would be as effi>lice force, compelled to surrender his cient a Mayor as he had been a Police
tdge of authority and retire into pri- Chief, and that his campaign would be
tte life.

a personal house-to-house canvass of the

Kohler had declared all through his men and women of the city.
ial that he had been " jobbed " by his As usual, Kohler adhered strictly to
temies, but even so, he caused a good
aany people in Cleveland to gasp by cle- his word. His activities during Sepprecedaring within an hour after his 'dis- tember, October and the week mystery.
aissal that he would seek vindication ing Nov. 8 were more OP. less a the sub" Still ringing dOorbells," was
er going into politics.
" Some day," said Kohler, "the people
ill elect me Mayor."
That declaration sounded a bit too excnie at the time. Every one in Clevend knew Kohler for a man of unusual
:termination, but it is doubtful if even

stance of his daily bulletin. But scouts
of the two major parties began to report
Kohler gains of alarming proportions.

And almoat in unison the fire of the

two major party candidates and the
four minor independent candidates was

s most sympathetic friends believed, turned on Kohler, and it was a galling
fire of ridicule and vituperation. Kohever could make good.

ler made no answer.
Ills Prediction Caine True.
On Jan. 1, 1922, Fred Kohler walked At midnight, Nov. 8, the derisive
into Cleveland's City Hall and took smiles with vitch old-line political lead:.ck
e oath of office as Mayor.
ers had watched the Kohler campaign
Aside from all questions as to the were turned to wry expressions of chaficial and personal merits of the man grin. Kohler had a clear lead of 4,500
rid these questions are being debated votes over FitzGerald, the nearest canCleveland now more than ever), didate, and Ids election was conceded.
ohler's title to fame as a fighter is In analysis it might be determined that
sured. Whether
snts either as Police

achieve- Kohler's victory was not the result of
Kohler's
Chief or as his Own popularity so much. as the deayor. are long remembered or not, his sire of Cleveland voters for a complete
come-back" will remain one of the change from the hapitazard methods of

sst interesting and in some ways elle administration under either major parthe niost inspiring events in Cleve- ty which had plunged the city heavily
into debt, demoralized all city services,
His dominating personality will not particularly police protection., BLit the
on be forgotten, and therefore it is fact remains that Kohler was elected.
artinent to consider
 briefly who he is His last pre-election rernark had been:
nd what were his origins.
Fred Kohler
http://fraser.stlouisfed.org/
_as horn May 2, 1614 in Cleveland of " The morning of Nov. 9, the police of
Federal Reserve Bank of St. Louis

el she's

gimps aol keen

Kohler personally talked with ever
applicant, listening patiently and kind
to each recital, but directed each ap
cant to " see the proper departme
head " with the reniinder, however, t

,

JANUARY 22,




xx

1922.

4 49.1,

'10

3

FEDERAL RESERVE BANK
OF NEW YORK

IISC. 4.1-30M 10-21

October 15, 1922.

Or -ICE CORRESPONDENCE
T

DATE

air. Strong,
SUBJECT:

FROM

102

DINNER TO GENERAL DAWES.

J. H. Case.

We have to thank you for e most enjoyable party last Friday night, and our
While I had hope

only regret was that you were not with us.
directors present, the party finally resolved
myself, the following were at your table:

itsOlf




into one of officers only.

Besides

Messra. Kenzel, Oakey, Hendricks, Mason,

Bowers, Higgins, Barrows, Crane, Gidney and Dodge!.
could not come.

to have three of the

At the last minute Mr. Morris

RESE VE 'SANK

00" NEW YORK

ON

NCE

Governor Strong
FROM




TEJanuary_224_192.3

SUBJECT

Payment of Extra Compensation

J. H. Case

-

I am sorry that you could not have been here on Saturday to
witness the good effect of the payment of the extra compensation.

Everyone in the bank was wearing a huge smile, and you will be in
terested to know thai-there were many favorable comments all along
the line with regard to the good work you have done in getting this
extra compensation for the employees.

Now that the Federal Reserve Board is taking a more liberal

view of these matters, I am wondering if this might not be the psy chological moment in which to take up and pursue the matter of establishing the pension plan, which was up for discussion about two years ago,
and which was deferred until a more opportune time?

I really believe

that if something of this sort could presently be put across it would
be very desirable.
assume you will be having.a. meetinf of the Governors Committee on Centralized. Execution of Purchases & Sales in a. week or so,

and perhaps you might like to discuss this matter with them in advance
of the Washington Conference.

FOTIYI 12ut
CLASS OF SERVICE

SYMBOL

Telsgrarn
_etter

Blue

Night Message

WESTE

UNION

CLASS OF SERVICE SYMBOL
Telegram

Nite

NL
of these three symbols

If
nu,-

3 after the check (number at
woms) this is a telegram. Otherw
ts character is indicated by the
symbol appearing after the check.

TEL

NEWCOMB CARLTON, PRESIDENT

AM

GEORGE W. E. ATKINS, FIRST VICE-FRESIDENT

Blue

Night Message

Night Letter

Day Letter

Nite

NL
If none of these three symbols
Night Letter

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

symbol appearing after the check.

RECEIVED AT

30 KA D 32
Q NEWYORK MY 338P JAM 31 1923
BENJAMIN STRONG

CARE OF STATION AGENT WINTERPARK FLO
YOU SHOULD NOT REMAIN NEWSPAPER
TELEGRAM RECEIVED WE SEE NO REASON WHY
TERMS STOP iN OFFICIAL
IEPORTS STATE ENGLAND HAS ACCEPTED OUR DEBT

BEEN RECEIVED
CIRCLES NO MORE DETAILED INFORMATION HAS YET




CASE
41413'

lir
CLASS OF SERVICE SYMBOL

Form 1204

Blue

Vir E STEkkrENI UNION

Night Message

Nite

WESTERN UNION

Night Letter

NL

Telegram

Iter

C

If n

TEL

1 these three symbols

appe , after the check (number of

word.) this is a telegram. Otherwis

'

character is indicated by the

symoul appearing after the check.

ttit

NEWCOMB CARLTON, PRESIDENT

CLASS OF SERVICE SYMBOL
Telegram

Day Letter
Night Message

AM

GEORGE W. E. ATKINS, FIRST VICE-PRESIDENT

' Blue
N ite

NL
If none of these three symbols
Night Letter

appears after the check (number of
words) this is a telegram. Otherwise its character is ind icated by the

symbol appearing after the check.

RECEIVED AT

5AZ KU 23 BLUE
(.4

NEWYORK NY 1050A FEB 9 1923

BENJ STRONG

BON AIR AJ GUST A GA
THANKS FOR TELEGRAM MRS CASE MORE COMFORT ABLE MAKING STEADY PROGRESS

TOWARDS RECOVERY EVERYTHING QUIET HERE HOPE YOU WILL DEFER RETURN
UNI IL HOARSENESS D I SAPPEARS




CASE

1130AM

FEDERAL RESERVE BANK

z7;401 AAA=071Q-1

OF NEW YORK

February 28, 1923.

CONFIDENTIAL
Dear Goernor Etron:
1 pret-ente

to our boare of direct;x6 at its meeting

toc:E,y your letter to ve dated February 27

suilff.ari2,51

the report

of your physicians. After a careful conFiderati(n the directors
unenimouEly vctec thEt, subject to the awcroval of the Fer'eral
Re5erve hoard, you be granted a, Lec.ve of absence for six months,

or such part tlereof as may be neces.ary, with ful3 pay, to
enhb]e you to follc,7 the LOVIC3 of your ihysicians.

Very truly ycurs,
1,6

j. H. Case,
Deputy Governor.

.

Benjamin Stron,

470 Park Avenue,
:*.:ew York,




Y.

FIFTEEN NASSAU STREET
NEW YORK
March 15, 1923.

Dear Governor Strong:

Glad to have your telegram telling us of your safe arrival and comfortable
surroundings.

I hope you will continue to like it and feel sure you will rapidly

recuperate there.

Following are some of the high lights of last week:

At the meeting of the board of directors yesterday there was a continuation
of the discussion in which Dr. Miller participated at last week's meeting regarding
the advisability of earmarking some part of the gold reserve as likely to be withdrawn.

There seems to be a unanimity of opinion as to the desirability of doing something to
indicate that at present the reserve percentage does not reflect the volume of available credit.

The only difference of opinion is as regards the means to be employed.

The directors have authorized raising the maximum policy under the employes
group insurance to $5,000.

The amount of the additional insurance on the lives of the

112 employes, including officers, receiving at the present time more than $3,000 a
year will be approximately $145,000, and based on last year's experience when the
premium refunds amounted to 36% of the gross premiums of about $32,000, the additional
net annual premium is estimated at approximately $715.76.
The Federal Reserve Board has returned to us the Glass speech list we sent
down in response to the Senate resolution.

The Board did not submit the lists but

wrote the President of the Senate on March 3 pointing out the difficulties in the way
of submitting them.

This is an encouraging bit of news.

New issue of Treasury certificates.

Our quota, $1

subscribed lest night by about $70,000,000, of which exchanges amounted to $15,000,000.
A majority of the subscriptio ns and exchanges are for the year maturity.



Subscriptions

-2-

Governor Strong

5/15/23

4ilieed last night.

The last Clearing House statement showed a decrease in loans and
investments of about $60,000,000 and a substantially similar fall in deposits.
Money rates continued to display a firming tendency.
Trading on the stock exchange was in a smaller volume than in recent
weeks, with a tendency towards lower prices.
After reconsideration of the method of paying officers' salaries, it
was decided to continue the new practice of paying by cash.

Mr. Schneckenburger visited the bank last week and reported that affairs
were going along smoothly at the Branch.
Mr. Oakey has tendered his resignation as auditor, effective May 1,
and the choice of his successor is now being considered.
thought of in this connection.

Mr. Hounds is being

He is perhaps our one best bet.

I am planning to take Mrs. Case down to Virginia Hot Springs tomorrow

and spend a few days there with her so as to be in good shape for the Governors
Conference.

All send kindest regards and best wishes.
Cordially yours,

Mr. Benjamin Strong,
Cragmore Sanatorium,
Colorado Springs, Col.




April 4, 132$.
Dear Governor Stronr:

tiers I am beck on the job a.ain ,fter a very dellehtf

wee

spent at

Virfinia Hot Springs, and the following so-ewhat strenuous week eoent in iteshingt-n
ettendiag the Governors Conference.

Everythiag rent off fairly smoothly, Governor

cDougal serving very ecceptably as chairhan, and .1.r. Barroye serving eost efficiently

as secretery of the confereice.

kr. Berress will endoebtedly, within tee c-urse of

e few days, send you a copy of h;s einutes, which will teIl you nretty mnch the whole

story.

The followinr, however, were one or two of the hi h spots:




citau PUhICY es_ AATES

Owing to the ebeence of ,i4r. Plett, weo wax away tittending the
funeral of er. Campbell, the new Blerd eeeber, the Bomrd iteelf
did not meet with the cenference entil Thurseiey, end vrried from

their usual custom in failing to tale up end discuss with us the
question of credit policy or rates of scount.
The conference
appointed N committee to deel with these subjects for it, plIci I
am enclosing, herewith, copy of the cumeitteels reeort, bearine

the date of ;=srch ZS. It wau trueritted to the Ford in the
hope that they would ive euee publicity to the sehgestionm and
recoemend.tione of the -overnors Conference.
Whet they did do
wes merely to publish the fir perehreeh, cad deleted seme of
ehet.
OiEl

OPEhATIONS.

The Federal Reserve Board trenseitted to the conferenee copy of
the rosoittion merked '.h.-3675, dealing with epn earket oeerttle,ne,
and startiag off with the following pareerehh:

Whers the Federal Reserve Board, unler the powers hiven it
In Sections 13 and 14 of the Federal Reserve Act, has authority
to limit !_eid othorkise detcr-ine the securities .snd investmente
purchaaed by Federal Reserve Beaks."

Governor Harding took issue with the Board on this steteeent, and
etter a short verbal battle with Dr. ',liner succeeded in cenvincing
the Board thet the Act did not specificelly iive the authority to
"limit end otherwise letereine open market operations".

April 4, le23

-2-

The resoT-tion wns accordingly modified end W513 approved by the
conference in the fore as shown by the enclosed cony.

Tau will observe that the Coemittee

f Governore on the Centrelized Eeecu-

tie(' of Purchases and Sales goee into the discere, rnd thmt e nee comnittee was formed
to be known es the °Open kerket inveetment Coneittee for the Federei Reserve Syytem",

the personnel to reeein the same.

We ere n'ennine te neve e meeting of the committee

st the Cleveland bni on April 1, se if you hewe eny eeseFeee or eugneetione to

convey te the :c.,,,bers of the coneittee, end will ediise me, I shell be eltd to be the
nedium throneh whom they ere transmitted.

te had an interesting discussion about the importence to the country on
the Ae4 York Call on eterket.

Durine the distession nr. Crieeinner coeteeted upon

the enesunl utility aftown by Cleveland in cleening up nnd improvinn their poeition so
much in edvance of the other beaks. It men- hsve been e bit eeen in me, but I sunnested

that the -ay to °leen up the cone:unity we not to dump your rubbish in your nest door
neighborie yard.

I think Fancher ceunnt the point.

The report of the Pension Committee was egain unaninously approved by the

contereace, I do not know that the Board will tete tny different !action in regard to it.
Dr.

iLier discussed with the conference his new plan for etating the

reserve poeition of the Federal eserve
the conference.

nis, which did not receive tny eympsthy from

kr. Jay, t think, bed really dampened Miller's enthusiesm by 6

rather strong letter writtee to Miller the n :ht before.
In addition to the redemntion of opeo,00,000. March 16 securities from the

Federal Reserve 1:snks, 4r. Gilbert appeared before the conference end stated thtt
owing to the new system of tee receipts they were over in money, end tbet they would
be gl,r,c1 to redeem

now, the $52,000,000. June 15 securities.

exception,egreed te this enggeetien and turned them in

,

The benks, without

so that the holdinne of

Government eecurities have been reduced by about $110,000,000. n the last three weeks.
Thegroes emoent is down to !t2Z0,000,000.



The Treenury hes written us a letter

.or Strong

2

April 4, 192t!.

offering to redeem at the mbrket $10,DCO3000. 4 1/e TroReory notes of 1928 which
we now hold.

te those were obtained on a4:10 basis, end the nsrket tod..y is

spproxigAtely 4:-5

we decided not to flecect the Trew,ry's offer, because in doing

so we would h've q lose of something like $190,000.

There ws k bully editorial in the Aew York Evening Poet of lest night
which I m enclosing for your perusal,

and I

elso sending a Aler,orandum showing

the increase in tax receipts which took place in this city, distr'ot aind country.
I enjoyed very much looking over your letter to kr.Young, cnd expect you

will be % reEl'radio fan" betort long.
With best regnrds, I ,m
Faltlifully yours,

BenjaTin Strong, Esq.,
c/o Crai:,more Sanqtorium,

Color,Ao Springs,
Colorado.




FEDERAL RESERVE BANK
OF NEW YORK

April 17, 1923.

loose in

f ile

4*.

Dear Governor Strong:

The first meeting of

new Open Market Investment Committee

was held at the Federal Reser36 Bank of Philadelphia last Friday and we
had a very interesting
in brief by the minu

ference.

The story can probably best be told

s of the meeting, a copy of which I am enclosing.

I hope you will find them interesting and that the action taken will generally meet with your approval.

It seems to me that the idea of having

a committee whose business it will be to keep an eye on all open market
transactions for the System as a whole is a step in the right direction,
and I am hoping that it may be possible to operate it to the satisfaction
and benefit of all concerned.

Jay is down in Washington trying to stir along the Crissinger
matter but from what he just told me over the telephone, it is slow in
developing.

I shall hope to write you more fully in a day or two.
Faithfully yours,

olex/0*--,
J. H. CASE.

Benjamin Strong, Esq.,
C/o Cragmore Sanatorium,
Colorado Springs, Colo.
En c.




Telegram

Blue
.wessage

-NI ht Letter
If

no

appea.

CLASS OF SERVICE SYMBOL

WESTE4,sNA UNION

CLASS OF SERVICE SYMBOL

Nite

Telegram
Day Letter

II\

TEL t ;ji AM

NL

of these three symbols

fter the check (number of

wo,-) this is a telegram.

Others,'
5 character is indicated by the
symbol appearing after the check.

NEWCOMB CARLTON,

PRESIDENT.

GEORGE W. E. ATKINS,

Nite

NL
Night Letter
If none of these three symbols

appears after the check (number of

words) this is a telegram. Otherwiseits character is indicated by the
symbol appearing after the check.

FIRST VICE-PRESIDENT

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

Blue

Night Message

WESTERN UNION

J
1923APR 19 PM 4

VA 2P2 g5 1/70
CO NEWYORK NY' 19 514pp
EENJAMIN STRONG
CARE CRAGMOP

244
SANATORI UM, COLORA DOSPR I NGS COLO

SCHNYDER OF BERNE WIRES HE MAY NEED CREDIT HERE OF FOUR MILLION
.

COLLARS TO. BE USED BY HIM IN STEADYING HS EXCHANGE SHOULD THIS BE
tECESSARY AS RESULT

.. OF

USE OF THE CREDIT RECENTLY GRANTED BY HIM

TO HIS NE I GH BOR ON THE NORTH STOP HE INQUIRES IF WE WOULD MAKE
THIS ADVANCE. PRESUMABLY A GA I NST GOLD ALSO WHETHER AS ALTERNATIVE
.

HE COULD SE LL SHORT .TREAthIPEL4EEt



P RA CT I CA BLE

10

_
Nite
ore r

NI

If I0' of these three symbols

!.;
I

ie..'

.ter the check (number of
this is a telegram. Other-

character is indicated by the
symbol appearing after the check.

./ES Asx, UNION
TEL
AM
WESTERN UNION

WV*11:447

NEWCOMB CARLTON. PRESIDENT

GEORGE W. E. ATKINS, FIRST VICE-PRESIDENT

CLASS OF SERVICE SYMBOL
Telegram

Day Letter

Night Message

Blue
Nite

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

words) this is a telegram. Otherwiseits character is indicated by the
symbol appearing after the check.

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

J
1923 APR 19

VA 242 SHEET ;2

RJT WOULD. Li IT' YOUR VIEWS. 01\ QUESTION. OF, POLICY AND DESIRABILITY
OF OUR MA gl NG LOAN




CASE.

PM 4

10

FEDERAL RESERVE BANK
OF N EW YORK"

April 20, 1925.

Dear Governor Strong:

Referring to my telegram yesterday regarding the cablegram from Mr. Schnyder of the Swiss National Bank, I was forced to

make it rather vague and omit some of the details because I desired
to keep it quite private and confidential.

Accordingly, I am

sending you a copy of the cables from Mr. Schnyder, together with
a copy of our cable reply to the Swiss Bank, which was sent out
to-day after consultation with Mr. Jay and Mr. McCarrah.

I also

spoke to Mr. Platt about it over the telephone and a copy of the
letter which I have written to him to-day on the subject is enclosed.
Faithfully yours,

t'

tiN,

J. H. CASE,
Deputy Governor.

Benjamin Strong, Esq.,
C/0 Cragmore Sanatorium,
Colorado Springs, Colo.

Enos.




REVIEW OF PERIODICALsS
Federal Reserve Bank of New York, Reports Department
April 19, 1923.-

'ol. IV: No. 20

Inquiries and suggestions regarding Review, phone Miss Rose, Autom. 341 - Bell 214
Periodicals may be obtained from Reference Library, phone Autom. 230 - Bell 343

FEDERAL RESERVE SYSTEM

What the Reserve Board meeting accomplished
MacTazine of Wall Street, 31: pp. 1063-5, 1110-11, 1114, April 14, 1923
The conference between the Federal Reserve Board and the governors of
Federal Reserve banks did not lead to advances in rates, or to any announcement of rate policy. The fact that the present growth of commercial loans has
proceeded without much recourse to the Federal Reserve banks would have rendered a rate increase ineffective, but now that many member banks are nearly loaned up and market rates are advancing, it is likely that advances in Federal
Reserve rates will not be long deferred.
It is to be regretted that no announcement of policy was made. The
Federal Reserve Board ought not to make a mystery- of its intentions or to postpone their execution until the last minute. "It is a public system, ond its
acts are acts in which the public is deeply interested, and as to which the
rank and file of the community have a right to be informed." Only by reasonable
and proper publicity can the System regain the public confidence which has bed
partly lost through the attacks of demvogic Congressmen and ex-officeholders.
The future policy of the Reserve System is of great importance to the country
and it is to be hoped that a definite announcement will not be long delayed.
It has been suggested that a super-reserve of approximately 100 per
cent, gold be placed behind Federal Reserve notes, leaving the remaining gold
to protect deposits. .Then.when the occasion arises for the redistribution of
gold, the super-reserve could be released. The legality, wisdom and success
The only proper protection against the inof this scheme seem doubtful.
flationary dangers of our gold holdings is a courageous and prompt policy of
credit control by the Federal Reserve Board, or a policy of self-restraint
on the'part of banks and all users of credit, or, even better, a combination
of both, resulting in1;.eeping advances down to a level easily supported by
our normal supply of gold.

ECONOMIC AND FINANCIAL CONDITIONS

Security issues in France and in various countries, M. Galmiche
Bulletin de la Statistique Generale de la France, XII: pp. 197-221,
January, 1923.
At the conclusion of a comprehensive study of security issues in
France and in other countries since 1907, the writer combines the results of
his investigations in a comparative table, converting into gold francs the value of stocks issued in nine different countries between 1907 and 1922.
The United Kingdom, in spite of its importance, is not included in this table
(Continued)




FEDERAL RESERVE BANK
OF NEW YORK
April 21, 1923.

Dear Governor Strong:

It is Saturday afternoon, and I just want to send you a few lines before
beating it for the golf course.
Your telegram giving your view on the Swiss National Bank proposal just
filled the bill.

I sent you yesterday copies of the cables exchanged with Mr.

Schnyder, and I am now enclosing a copy of the cable received from him this morning,
which completes the picture.

I brought this matter before the E

Thursday in an informal way, and found some reservations in the minds of Messrs. Young
and McGarrah as to the desirability of our making such an advance as that suggested by
Mr. Schnyder.

I think the deterrent factor in their minds was that credit was being

extended to Germany by the Swiss Bank.

As a result of this inquiry I have asked Jay

Crane to give this matter some further thought, and to prepare for me a little
on the general subject of advances to foreign banks of issue.

brief

The formal arrangement

which we have entered into with these banks does not allude to this subject in any way.
When Crane has prepared this I
ject.

will

send it along to you to get your ideas on the sub-

My own thought is that perhaps it will be well for us to have a bit of corre-

spondence with the Bank of England about it, and , after we have agreed on a suitable
program to then recommend a course to the Federal Reserve Board so that if future proposals of this sort come to us we will be in a position to deal with them promptly.

Jay has doubtless written you fully with regard to discussions we have had
with our Directors on rate policy.

I have been one of a limited number , that, during

the past few weeks has had a pretty firm conviction that our rate should be advanced to
5%, but apparently I am in the minority and the view-point of our Directors is that
business has one foot on firstba.se and that they are not likely to be caught off again



April 24, 1923.

-2-

.rong

o
in the immediate future, a. view to which I do not subscribe.

My feeling is expressed in the accompanying memorandum on credit policy
which I submitted to the Directors at the meeting last Wednesday.

that the present Clearing House rule which automatically requires our banks to pay a

higher rate of interestondeposits, is a very bad factor, and unfortunately tends to
affect the judgment of some of our city bankers in this regard.

For instance, George

Roberts of the City Bank told Mr. Snyder a, few days ago that he felt that a slight

increase in our rate here was over-due, but that, confidentially, some of his associates
down stairs were opposed to such an advance on account of the additional cost to the
bank in the way of interest on deposits.

Gilbert has been spending the past week in Asheville, but expects to be
back at his office on Monday.

I think you will be interested in the exchange of

telegrams which I had with him on the 17th with respect to further liquidation of
Federal Reserve bank holdings of Government securities, and am, therefore, enclosing
copies of them together with a

copy of my letter of April 18th.

Onthe 19th I received

a wire from Gilbert stating that he was prepared to redeem, on Tuesday next, all September certificates now held by Federal Reserve banks;

so that his withdrawals of de-

posits from banks should be more rapid from now on.

The situation in the Federal Reserve Board is to be further complicated by
John R. Mitchell's retirement in the near future.

Governor Harding was in this morn-

ing and seems to think that the President would appoint some banker from the south,
preferably from the state of Texas.
I hope everything

Verily the plot thickens!

continues

to go well with you, I certainly detected IL

good deal of "pep and punch" in your prompt reply to my telegram about the Swiss cable.
With best regards, I am,
Very cordially yours,

Benjamin Strong, Esq.,


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

MMC,IMA 40M 4-5,2

&DERAL RESERVE BANK

TO BE MAILED

OF NEW YORK

CONFIRMATION OF TELEGRAM
111.'

HAVE TODAY TELEGRAPHED YOU AS FOLLOWS:

April 24, 1923

Benjamin Strong

Crgmore Sanatorium
Colorado Springs,
Colorado.

Have just leRrned from Platt that Boston bank has applied to Board for
permission to estPb'ish agency in Cuba and that State and Treasury departments
interpose no objection stop
UnderstEnd Board proposes to h&.ve hearing next
Monday to which representatives from New York Philadelphia and Atlanta will
be invited stop
W.P.G. had one for day when I tried to reFch him on telephone for further information stop
Will write but meanwhile would appreciate
expression of your views.
CASE

Chg. to Fed. Res. Bank.




c>

DERAL RESERVE BANK
OF NEW YORK
April 26, 1923.

Dear Governor:

I have been trying to find time these last couple of days to sit down
and write you a gossipy little note about some of the things that are going on
I have enjoyed very much the little notes from you which
here in the bank.
keep popping up on my desk every little while because I am sure that they mean
you are beginning to feel much better and need some outlet for some of your pent
up energy.
To begin with - In a recent note you expressed regret that the Board
Mr. Jay and I
had discharged the committee on centralized execution of orders.
If I understand the attitude of
have both felt that this was a constructive move.
the Board, it was that this committee had been most useful in accomplishing a good
piece of work in bringing about a gradual reduction of Federal Reserve Bank holdings of Government securities, and that, therefore, it should be equally helpful
to put their other outside investments, - principally the bill holdings, - under
You, no doubt, will read in the stenographic record of the
the same umbrella.
discussion at the Governors Conference at the time that this was brought up.
As a result of that talk, one point was made perfectly clear, and that is that the
law does not give the Board express authority to limit and otherwise dictate the
amount of such investments, although undoubtedly if the issue were ever put to a
test the Board could prescribe regulations that would pretty effectually determine
the amount of such investments.

7

9

(I

21,

With respect to the selling of securities to offset gold imports, the
record is quite clear that we sold very much in excess of the gold that has come
In this connection I wrote you a few days ago about Mr. Gilbert's request that
In.
eederalReserve Banks to sell their $36,000,000 of September
we undertake to get the
I countered on this by suggesting that as the Treasury as in funds
certificates.
and as there was an excessive amount of September certificates outstanding, they
This Mr. Gilbert agreed to do and
take up this $36,000,000 for redemption.
redeemed the total amount on Tuesday.
This puts the Government holdings of all Federal Reserve Banks down to
approximately $200,000,000, against the high point of $630,000,000 a year or so ago.
The remaining $200,000,000 are all Treasury notes, with the exception of about
The market on short-term certificates has
$55,000,000 of December certificates.
been quite buoyant for the past week and the December 4s have risen in price from
say 99-1/2 to 99-15/16. The recent purchases of the dealers, I am told, have been
If, as and when the December 4s reach par
quite generally for European account.
I think I can prevail upon the six banks which hold the December certificates to
sell thel, although in some instances in order to accomplish this it may be necessary
to offer them a further supply of bills.
As you know, our own holdings are reduced to one block of $10,000,000
These having been exchanged for Victories,
4-1/4% Treasury notes due in 1926.
If they were to be sold at the
they stand on our books at about a 4.10 basis.
present market (4.65 basis) it would involve an apparent loss of about $160,000




"fERVE BANK OF NEW YORK

2

Governor Strong

4.28.25.

eoi
and our officers, as well as the members of the executive committee, have felt that
A/ we should not be in too much of a haste to consummate a sale.
Yesterday, however,
I received an offer from Salomon Brot'aers and Hutzler to rent them out for thirty days
from next Monday on a 4% basis, which, after conferring with Mr. Jay, I have agreed
to do.
You doubtless understand that we make no commitment of any sort, but put
this in the form of a forward purchase which we agree to make at a date mutually
agreed upon.
I merely mention all this to show that we are steadily working along the
lines that you have in mind, and I think this is progressing just as fast as it
should.
I am enclosing some memoranda Mr. Matteson has prepared for me, which
will give you a picture of what is going on.
As you know, there will be some new Treasury financing announced the early
part of May, and, as I am planning to be in Washington on Monday to attend the
Cuba hearing as suggested by the Board, I have arranged to go over the matter of
terms in the new issue very carefully with Mr. Gilbert.
At the present time we
are in substantial agreement that a three or four year Treasury note carrying the
same coupon rate as the maturing Victories will just about fill the bill.
On
account of the substantial cash balance now on hand in the Treasury, it is likely
that the new issue will be limited to not more than $500,000,000.
In regard to the Cuban situation, since telegraphing you on Tuesday I
have reviewed our files in this matter, and, in the light of your telegraphic reply,
Messrs Jay, Fenzel and I have been giving this subject a good deal of thought with
the result that a memorandum has been prepared which cites the terms of the Act in
regard to establishing agencies and sets up some twelve points that seem to us
worthy of careful consideration. I am sending a copy of this memorandum to Mr.
Platt, suggesting that, among other things, these are some points which we feel
should be considered at the hearing.
In other words,I have felt that it might
expedite matters if, instead of having a discussion at random, we could confine
consideration of the subject to a number of definite and important points.
There is One important angle that should not be lost sight of, and that is that
if
(i:5the one bank were to establish an agency and, in the course of time, put out, say,
$100,000,000 of its own Federal Reserve notes, it would, in effect, constitute a
loan of that amount by Cuba without interest and would give the issuing bank, say,
$60,0en,000 of free gold.
Dallas under existing conditions, for instance, might
very well like opportunity of participating in such an arrangement with a view to
getting out some additional FederalReserve notes that would be likely to stick.
Moreover, if the principle which we have adopted with regard to giving the other
eleven banks opportunity to participate in foreign accounts on our books is sound,
it seems to me that in this instance it is not unreasonable that Boston should
follow this course.

I had a little chat with Mr. Gilbert yesterday morning, which was most
disheartening. He told me that the Secretary had been asked by the powers that be
to suggest a banker from the South to succeed Mr. Mitchell, and that if the Secretary
found a good man he would be appointed.
Mr. Gilbert told me that following the
President's recent visit to New York he had made an offer of the position to a
banker from Tennessee, and that the other appointment would be a dirt farmer from
Kansas.
Mr. Gilbert was feeling pretty blue about this, but called me up later
in the afternoon to say that the Tennessee fellow had declined the offer so that
the post is still open.
Mr. Gilbert has asked that we think up the name of some
banker in the South who would fill the bill.
This Cuban matter, and the very
fact that we are constantly having up questions of foreign policy, clearly indicates
the desirability of a banker with an international mind. It is quite a drop from a
warburg or a Strauss to a banker from Tennessee!

Now that the matter is still epen,


SERVE BANK OF NEW YORK

a3

Governor Strong

4.2F.23.

hope that you will put on your thinking cap and make some suggestions.
Following our discussion about the Swiss Bank loan, Mr. Crane has prepared
for me the accompanying memorandum dealing with the subject of loans to foreign
correspondents, which I wish you would look over and make such auggestions as
occur to you.

5)

I am impressed from time to time with the fact that there are many important
I can only restate
questions coming up, and I greatly miss your advice and counsel.
what 1 have said before, that I will continue to give all of these matters the
very best consideration of which I am capable.
I am sorry that my mind does not run along with yours on the subject of
Of course I agree with the principle of having the public mind educated
rates.
by means of a statement from the new Governor, particularly if I felt that the
The simple fact is that I, personalstatement would be of a constructive character.
ly, very much doubt whether a statement that is censored by his Washington friends
I hold very strongly to the opinion that
will be constructive or of any real value.
a rate advance should have been made two or three weeks ago, and my honest opinion is
You know that you
that we will very much regret that such an advance was not made.
have preached to me pretty strongly that our discount rate is a language that the
In my judgment I think you are wholly right about this, and
public can understand.
I believe that such an advance was justified, and would have been understood in the
(2) the condition of the commercial banks
light of - (1) existing open market rates;
of the country which are pretty well loaned up; and (3) our swollen gold basis (which
There is a good deal of talk about
I think may be largely drawn upon this autumn).
the Federal Reserve ratio being up and that the loan account of the Federa1Reserve
I have felt that in such a complex
Banks does not show the need of an advance.
situation as exists New York should take the initiative and, if need be, provide the
My
red flash which should be a mild warning that we ought not to go too fast.
thought is that the present wage increases will presently be translated into higher
prices for commodities, which, in turn, will call for additions to our credit
There are no reserve supplies of funds anywhere abouts ether than by
structure.
recourse to the System, and my own feeling is that now that we have let the matter
go on account of Government financing we cannot do anything for the next two months,
and I fear that when it does become necessary to raise our rate we will find ourselves in the same relative position that we were in in 1919, - that is we will be
I may be
charged with not having the foresight to act in advance of the flood.
wholly wrong about this whole matter; but this is the way it appears to me.

The wheels have been movingrather rapidly here in the office during the
past week. Mr. Sailer has been out to Cleveland and Yorke, and will doubtless write
Mr. Kenzel leaves today for New Orleans to attend the meeting
you about his trip.
Mr. Sailer saw Mr. Harrison on Thursday and
of the Foreign Trades Council.
The nurses at the hospital gave him a real party
found him in excellent spirits.
I am sure
the night before in memory of his one hundredth day at the hospital.
that we will all be delighted when you and Mr. Harrison have recovered your health
and can rejoin our family here.
My very best to you.

P.S. I understand Mr. Barrows has wired you
We are all
about Mr. Williams, death.
 terribly distressed about it.


Sincerely your

A

If

FEDERAL RESERVE BANK
OF NEW YORK
Saturday Afternoonolv%30.,1,

Dear Governor:

Since dispatching my long screed this morning, I

have just received a cable from the Bank of England, copy
of which I am transmittinr with this, believing that it will
be of interest to you.
As you probably know, Mr. Lan.ont, of J. P. Morgan

& Co. is leaving for England to-day, with the view of dealing
with the Austrian loan.
Cordially,

Benjamin Strong, Esq.,
Cragmoor Sanatorium,
Colorado Springs,
Colorado.

P. S.




/
t

Rudolph Hecht of New Orleans is being considered to replace

Mitchell on the Federal Reserve Board

/4

CONFIRMATION OF TELEGRAM
We have today telegraphed you as follows:

Apr.

19:.1..

Mr. Benjamin Strong,
Orag000r Sanitorium,
Colorado Springs, Colcra6o.

h. H. Williams died this morning.

base of tbe

in

A week ago he ourfered a hemorrhage at the

induced by high blood preseure and grew progressivsly wea4er

reisining coneciousnese towards end.




J.

Cftee

FEDERAL RESERVE BANK
OF NEW YORK

May 2, 1923.

Benj. Strong, Esq.,
C/o Cragmoor Sanitoritun,
Colorado Springs, Colorado.

Dear Governor Strong:

I am enclosing a letter from Mr. Schnyder of the Swiss Bank

which refers to his recent cable about borrowing here to steady his
exchange.

Thinking that you would 1i1

to see his letter and yet not

be troubled with making a reply, I am sending it to you together with
a proposed answer which I will sigl and transmit if you have no ob-

jections.

You will also find enclosed a cable from :Ir. Schnyder about

the Swiss Federal Railway loan.




Very truly yours,

a (1\\

J. H. CASE,
Deputy Governor.

FEDERAL RESERVE BANK
OF NEW YORK

(TO BE MAILED)

CONFIRMATION OF TELEGRAM
We have today telegraphed you as follows:

%,y 1, 1,r7.
Benjalin Strong,
Cresmere Sanitarium,

Cc1or&d £ring, Colorade.

WashingtCn authorities appear favorably impreseed with application of

Harding to establish agency in Havana. Further hearing on subject at Waehieg_
ton Menday, next. Several of our member banks invited to attend. They do not

favor Idea cf System going into exchange business.

While the primary purposes of application appear to be redemption of cur-

rency and ,r-viding through agency sufficient reserve currency to enable banks

in Ielend to release present high reserves and lend cut !aoney, it it in form
an application for agency ts deal ineschange. Granting of application would
therefore appe?er to be, as indicated by you, plainly in excees of power given
by Feder 3.1 Reserve Act to establish agencies.
Do you deeire to add




to

views already expreseed?
Case.

FEDERAL RESERVE BANK
OF NEW YORK
May 5, 1923.

Dear Governor:

Thanks for your telegram concerning Cuba.

A further

hearing is to be held by the Federal Reserve Board in Washington on
Monday, for which Jay and I have prepared a little brief, copy of
which is enclosed, as representing the views of this bank.
Mr. MdGarrah, Mr. .Mitchell of the City Bank, Mr. Potter

of the Guaranty, and Mr. Allen of the American Foreign Banking

Corporation are to attend the hearing and

oppose the establishment

of a direct agency for the purpose of dealing in exchange, on the

ground that it is an unwarranted interference and competition with
other banks.

I am sending George Harrison a copy of this brief, and hope

to stop off in Baltimore to see him tomorrow, and get an expression of
his views.

I am sending you a clipping from Atlanta
Boston which

will

show you how seriously this matter is being taken.
Cordially,

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




and one from

The Federto, Reserve Bank of Now rork desires to ,l'asent, its claws and

v)nsiderations in regarl to the ap;,lication to the Federal Reuerve

the following

Board by the Federal Reserve Sank of floator for permission to establibb ar agency

in }Iacono, Cubs, under

Section 14-E of the Federal Reserve Act.

ArilTULa OF FaZRAL RESERVE BOK WNEW r
If the Fedoral Reserve .ord reaches the detarm nation that on -Taney

L.

of 4 Federal reserve bank should be established in Ravens, the Federal ReAsrve Bank

of New York hving no dire to establish such an agency would be very glad to see

it

tanlished by the Re,wvo bank of 6caton or Any

other Reaerve bans desiring to

do so, eubject to the provisions of law in tverations udder Section 14-i under shioh

ell Federal reserve bank* sre given sn opportunity, if they deuire, to participate
in

the business undertaken.
PU"

-3E OF A??

ATIJN

At the tearing on this subject before the Federal Reserve Board on

2.

April

1E3, it a;:yeared that the 424141)s

quality of tha paper money now in circulation in Cube.Italso appeareddatbranchee
other banks operating there might, if the

of ;merican bants in Okiba, as a 11

agency were established, feel Justin d in carrying a much smaller supply of currency than at i,resent.

thereby

Our Lmformation loads

us to believe thlt the banks could

S4V8 many hundreds of thouavmde of dol1ryear.

It further appeared that it tight be ultra vireo for the Ftdaral Aeservo
Boar:i to irant
;await alon

411

application fin'

since Section 14-E

the

establishment

of an 4.gency for curreney

out not include carrythg. a. reserve of currency,

and the leaulmg and radoeming of currency asung tba iurposoe for which
reae

bank may setablisb an agenoY

in

foreiin ocuntri

The h,,liw2tion therefore takes the form of

coney in Rave
ressons:




a Federal

prol,osal to establish

for the pure of d ding in exchange, ,,resumably for thcia two

It order that it 112Aty cceyly with th
.5*Loti4 14-1 on _ler which lute:,e

*stabil steq,

rvi1ne of
enoy may be

In order that by oaling th foreign elnhenge the
consta.rabie expsnoe

Amin aiming the agency

say he set,

AI ES IN FOREIGN gcRAt4Gt4:,
.

FEDZRAL RESERVE BARKS

lie have always been ci.,osed, And %e believe the Federal Reserve

siailar view, to 'Vie ids. that a. Federal reserve b.,,zt should d

itottrd has hold

in exchange in the United States:
(

becedee the number of dealers and theupp1y of

)

eng4ged 1r4foreien exchente

ae.e ample,

lieosus it Afoul I put the Federal reservo baniieth
direct c:sity0tiUor WIth.member bqext in ell
"rtof the country who have highly developed

(b)

exohtnge de,-,artments,

Beceupe of the riske involved.

(a)

Sith resiect to dealing,o in foreign exehan,a, by Fodwral roe ref:, banks in

foreica countries, it hAts beon our belief that Section, I -192, intendeitt rovide
not for the establistenent or independent

o1e

th foreign countriee but for

U he ap,vintraent of banXs in foreign countriee as oorreriondents uniagente of

Federal reeerve bane. "through thee e.coneles tho' rerlerve tteite, when euch
course seemed desirable ou,i4poroh6se bills in foreign ocuntriA; for the rearpoe

of assisting in

thi,

stabili tion of Intern, tional gold noveteentE.

hove,

therefore, vitt th* ei.,.,roval of the Board, entered into a,,enoy agreements with w

winner of foreien bn

t I swo ehrreby on order they will kurotese for ti B with

their guaranty rine bills in their m.rkete, and likewise, on onIer, 7,e will pur-

chase for then

'ur guaranty ,rie bilis in our sep4rkets. In eaoh of these

Agreements all othor Federal reeerve banks, in *A ccordance

been invited to

wit;i1A 3 octicn idE, Wye

rticite and h,:ort done so*

Nis are or ,osed genorellyto the idea that a. Feioral reserro bank should
oond-oct




foreign e40.!-Inge 'bosincv,e in tt foreie.n country oil) roiy for the krofit

-3involved.

No are -cosod m)ectificall/ to the idna that a Federal reserve bank:

should conduct a foreign exch,Ange business in Cuba merely for the profit Involved;

Because there is no imiortant international

credit MOVMGUA. between Cobs, and the United

3tates to be stabilised, Tald if we fixa correctly advised, exce,:t in times of crisis,
the fluctuations in exchange are limited to

the cost of chiing currency to or trot

the United Stqtea, say 1/8 of 110
(b)

Becous auch husinee;s could be done only in ez...
tive ow,etition with member and other to,n:es
with am.,,lo resourcos, now engaged in it,

(0)

Seem" c of the risk involved,
Because. the ?Apar or th,f; contracts ,urchased would
not 11,-,ve the number of names equivalent tO

those to Which in the United States we restrict
our c)en sirket Archw,:es of bills,

Bec5utlie it is a prodoc4ing for which *a

there in uo irce.Uent in the excri,ance of
other im,,ortant banks of issue.

?1,11NCIPLE

4,

'Re are

E$TAALI56I4G A DIRWT SOUCY

:owed to the riesiple of the establishment of e, direct

agency of a Federal re&erve bank in Oubs if any other me,_ims 0411 be found

of c-

coml.lishing the desired reculte;

Becaune it rend re some of our asseto subject to
the i6ATS end the. courts of a foreign country,
Because of the .0.X4DPAS involved it) AL 4ndertaking

which is not thc rseponsibility of the Federal

ResGrve System,

(e)

Because it creates a A,scedent for the establishment of direct asenoies in Porto qco and
alsewtere.

(d)

It raiE4se the question of the rekionsibility of a
Federal reAerve har,

notea in gold in

ft

to redeem Feisral reeerv
forAgn country.

SUOGUT19/0 po4 .1,4;QMPIA.3ipti PilAP03L OF APPLICATIA
5.

ke are in symothy with the idoa of improving the ,.;mality of the

pm4,0r money circulating in Cubs and Wer the following sugeestions:






It is the responsibility of the Cuban Government
or tho banks operating in Cuba to provide a
currency rhicb shall be 71.e-uate in both i.us, 1-

tity and 'uality. Accordingly any plan under

which a Federal reserve bank aaaists in bringing about this end should be at the exense
of those directly benefittef2 tl-sreby.,

If this ?rimary condition can be aet we believe

that some idan could be drNised whereby through
the Lgency of member bank hviire branches in

Cuba, worn out currency could be redeemed and

new curremcy 7ut in circulation dthout the
exense and reejonsibilitis involved in maintaining an indelerv]ent :ency. a,4oh plan
would also eliminate all question of exchange
deelirs. The letter 4rIA.en by the Federal

Reserve Bank of Eew Yoft to tbe Federal Reserve
January 19, 1Te2b, and

discuses such a plan with r:spect to Porto A.co.

May 5, 1923.

To:

Yr. J. H. Case

From:

Messrs. Higgins and Gilbart.

Subject;

Condition and supply of American
currency in Cuba.

As you requested yesterday afternoon, we have made a hurried study of the
means of improving the physical condition of American currency circulating, and of
the practicability of maintaining a supply sufficient for emergencies in Cuba.
Not having had the tine to refer to our Legal Department, we are in some
doubt concerning one or two points included in the following suggestions, but we
believe that the establishment of a Federal reserve branch in Cuba as an instrument
for the purpose, is not warranted by authority of law.

As we understand the problem, it is to provide for a sufficient stock of
American currency in Cuba at all times and a means for maintaining a reasonable
standard of cleanliness.

',1b, believe it may be possible to accomplish this end by

one or more methods.

Two plans occur to us at the present time:

One, the establishment of an

agency of a Federal reserve bank in Cuba; two, the appointment by the Treasury Depart-

imummumm.

AP

ment of a bank to act as fiscal agent of the United States Government.
T

n respect of the first proposal, we are not sure that the establishment of
an agency would legally include a representative of a Federal Reserve Agent.

If, how-

ever, it were possible to legally establish a representative of a Pederal :Reserve Agent,

the problem of carrying a stock of unissued Federal reserve notes would be solved.

If,

on the other hand, the hone office would be obliged to show all notes issued to the
agency as a liability for outstanding notes, it might sometime become embarrassing because
of the lack of sufficient collateral or gold cover.

In either case, except for unfore-

seen conditions, this would provide an emergency stock, and the presence of a sufficient
supply of bills in Cuba would permit American branches, and possibly, the Cuban banks to
operate with smaller cash reserves.

It appears to us that under Section 14, Sub-section a, any Federal reserve
bank has the power to deal in gold at home or abroad and we believe that this could



- 2 -

be construed to mean that it could

do so

through its agency, and therefore, the problem

of circulating the stock on hand in Cuba, proposed in this plan, would be simple.

If

we are in error in assuming that this could be done through an agency, there is still
another method or circulating the notes.

Sub-section e, of Section 14, empowers a Federal

reserve bank, through its agency, to buy and sell bills of exchange, and presumably, to
pay or receive gold or currency therefor, and assuming that the transactions would be
too small to permit of circulating the necessary quantity of currency, the method used
,

by

Federal reserve banks in 1915, to place Federal reserve notes in circulation,

ommonly known as the "pump" method, could be resorted to.

As to the method of maintaining a reasonable standard of cleanliness, an
authority similar to that given to the Federal reserve banks and branches by the Treasur
Department, would be necessary.

This would permit the agency to cancel and to forward

mutilated notes to the United States for destruction at greatly reduced transportation
rates.

le

believe this would cover the requirements of the problem under the plan of

establishing an agency.
The second plan, namely, that of the Treasury "Department authorizing an es-

tablished American bank or branch to act as its fiscal agent in Cuba, eliminates the
idea of a 7ederal reserve bank agency.

This plan would burden the United States

Government with both the supply of clean currency in Cuba and the redemption of mutilated currency.

It comprehends the appointment, as a fiscal agent, of some such cor-

poration as the American Foreign Banking Corporation organized under Section 25 of the

Federal Reserve Act, or the branch of the National City Bank of New York, and the use
of either or both as a depositary of the United States Government.

It would necessarily

mean that the Treasury Department would be obliged to carry large balances in these banks
and that they in turn would be required to carry unusually large reserves in order that
the reserve supply of currency would be adequate.

The Treasury Department would also

authorize them to cancel cut and forward mutilated currency under the same regulations
now in force with the Federal reserve banks and branches.




- 3-

;--

An alternative of the requirement to carry Large reserves on the government deposits in these American banks in Cuba, would be a plan to have the United
States Government carry this supply as a custody and kept intact rather than as a
deposit.

Although it is estimated that approximately 0.00,000,000 of American money
is in current circulation in Cuba, we feel that in this report, it is difficult to approximate the expense of printing and transportation, for the reason that we have had
no time to examine data, if indeed it be readily obtainable, concerning the amounts of
the various denominations in

circulation and the average life of each.

However, as you requested our opinion on the matter, we venture the suggestion
that the figures for Cuba would probably bear a similar proportionality to those of Porto
Rico.

Rased on our recent studies of immediate replacements and subsequent annual re-

newals of paper currency in Porto Rico in relation to the respective circulations of

those countries, the cost for Cuba, including printing, insurance and shipping, vuld
be, roughly estimated, as follows:

For immediate replacements, 000,000 to .t400,000;

for annual replacements, (500,000 to c!,600,000.

It is also estimated that the cost to

the United States Government for United States currency should approximate one-half of
these totals.

EN




MISC. 3-I 60M-4-22

FEDERAL RESERVE BANK
(1)-"P

OF NEW YORK

OFFICE CORRESPONDENCE
Er. Case

SUBJECT:

May 5,

19.

Redemption of Federal Reserve Notes

by Branches or Agencies.

J. H. Philbin.

FROM

DATE

I think;
.1

(1)

Each Federal reserve bank is obligated to redeem,in gold or
lawful money, its Federal reserve notes;

Each Federal reserve bank may, and, probably, is obligated
to redeem such notes at its branch bank;
Any Federal reserve bank may, with the approval or by direc-,
tion of the Board, establish agencies in foreign countries
for the purposes specified in Section 14 of the Act and
other purp4es reasonabld incidental and necessary thereto;
Such agencies would probably not have the power, and,
a fortiori, could not be compelled to redeem Federal reserve notes of the principal reserve bank.

The Act provides;

That Federal reserve "notes shall be obligations of the United
States"; that "they shall be redeemed in gold on demand at the Treasury
Department of the United States or in gold or lawful money at any Federal
(Section 16)
reserve bank."
.

moom""...0

That "the Federal Reserve Board may permit or require any Federal reserve bank to establish branch banks within the Federal reserve district in which it is located or within the district of any Federal reserve
Such branches, subject to such rules
bank which may have been suspended.
and regulations as the Federal Reserve Board may prescribe, shall be
(Section 3)
operated under the ,supervision of a board of directors" etc.
That nThe term 'reserve bank' shall be held to mean Federal re(Section 1)
serve bank".

The only comment made by the Board regarding the operations of the
'

o

bank is that contained in 4 Reserve Bulletin '456, and is to the followreserve ba

ing effect:
[cbranch



FEDERAL RESERVE BANK

OF NEW YORK

OFFICE CORRESPONDENCE
lo

DATE

Mr. Case

SUBJECT

192

3.

Redemption of Federal Reserve Notes

by Branches or Agencies.

J. H. Philbin.

FROM

May 5,

-2-in

ilL

anc
branch
reT:rdifferences
bl.:e clor: ./a.reicise=ins laosrn=te
corporate entity and its operations are in effect the operations of the
Federal reserve bank.

i7tiOneonreedeM

This statement would seem to indicate that a branch is, to all intents

and purposes, a projection of the main bank, and seems to demonstrate the right of a
reserve bank to perform its operations) including the redemption of notes through its
branches.

This right would, of course, seem to be quite obvious.

While there appears to oe no authority on the question of whether a
reserve bank may be required to redeem its notes through its branches there is, to some

extent, an analogy in the case of an obligation of a bank to pay its checks, notes or
other paper.

The general rule is, of course, that an instrument for the payment of
money must be presented for payment at the place therein expressly or impliedly designated.
So the courts of this State have held that a presentment for payment of a note at the
principal office of a trust company is insufficient to hold an indorser where the note is
payable at a designated branch office of such company - Ironclad Mfg. Co.
App. Div. 555.

V. Sackin, 129

To the same effect is the case of Chrzanowsza v. Corn Exchange Bank,

173 App. Div. 285.

Of course, this analogy is not exact,inasmuch as one case involves the
coxttruction of an agreement and the other the interpretation of a statute.
The Act specifically provides places at which reserve notes are redeem-

able and the only question is whether under a reasonable interpretation the words "Federal
reserve bank" may include " or branch




thereof".

These words may be fairly implied upon a consideration of the general

FEDERAL RESERVE BANK

OF NEW YORK -

e,

/7

OFFICE: CORRESPONDENCE
10

DATE

Mr. Case

SUBJECT

J. H. philbin.

FROM

1923.

Redemption of Federal T3eserve rotes

by Branches or Agencies.

-3-

.

purposes of the Act

May 5,

It is fair to assume that the intent in authorizing the establishment

of reserve bank branches was to provide additional facilities for the performance of the
services assumed by the reserve banks. To adopt a construction which might tend to hamper

the redemption of the currency created by the Act
conflict with the spirit of the Act.

would probabl:i be regarded as in

In this connection attention might be called to

the official inetl'action issued by the Federal Reserve Board on Fovember 27, 1919 in con-

nection with the redemption of unfit Federal reserve notes.

This communication refers

to the plan theretofore obtaining, under which the subtreasuries were instructed to redeem
all unfit notes at the Federal reserve bank or branch
cities.

Federal reserve bank in their

While this may have been more a matter of compliance than compulsion, it indicates

the adoption of the suggested construction.

However, this question is probably an academic one for the reason that
it is inconceivable that reserve banks would refuse to redeem their notes for the reason
that they were presented at their branches.
The authority for the establishment of foreign agencies or correspondents
is as contained in Section 14 of the Act.
There can oe no question but that the reserve oanks may, in proper case,
establish foreign agencies for the purposes specified in this section.

While the Federal reserve banks would undoubtedly have the right to
redeem their notes through such agencies or correspondents, the question whether they could

be compelled to do so would depend upon whether such redemption is reasonably incidental
to the purposes for which such agencies were established.




An Agency differs from a branch in that it is created for one or more

FEDERAL RESERVE BANK

OF NEW YORK

OFFICE CORRESPONDENCE
Yr. Case
FROM

DATE
SUBJECT.

specified purposes.

191_2%

Redemption of Federal Reserve Notes

by Branches

J. H. Philbin.

rraY E.

or

Agencies.

4
A branch, on the other hand, is usually regarded as endowed with

the general powers of its main office.

In other words, it is an alter ego.

The agencies authorized by Section 14 of the Act were, it has been
said, authorized for one purpose, merely to effect a stabilization in foreign exchange.
If such was the intent and purpose of the statute, it is extremely doubtful whether the

reserve banks could be compelled to redeem their notes through such agencies on the ground
that it was reasonably incidental to the purpose of this section.




cQ

This article is protected by copyright and has been removed.
The citation for the original is:
“Cuban Federal Reserve Agency.” The Wall Street Journal (New York, NY), May 5, 1923.




This article is protected by copyright and has been removed.
The citation for the original is:
“Boston to Press Cuban Bank Plan.” Journal of Commerce (New York, NY), May 4, [1923].




FEDERAL RESERVE BANK
OF NEW YORK
May 9, 1923,

Dear Governor:
It
I have read with a great deal of interest your letter of May 1.
fist so much, but, on the
is too had to impose upon you the task of using your
other hand, it is always interesting and illuminating to have your views.

The new Treasury financing is out and is going well. Our quota of.the
$400,000,000 offering is $135,000,000. Our subscriptions to date total about
$270,000,000, $250,000,000 in cash and $20,000,000 in the form of exchanges.
Gilbert's idea is to take about $400,000,000 in cash, plus such additional amount
I think it
as may be epresented by exchanges for Victory notes tendered.
likely that this latter amount may run to, say. $150,000,000 to $200,000,000.

is Cuba.
four days.

The principal subject I have on my mind to write you about at the moment
I have been eating, sleeping and dreaming Cuba for the past three or

Mr. Platt sent me last week a draft of the proposed resolution to be
In
adopted by the Federal Reserve Board, which I am now enclosing, marked #1.
talking with him Thursday afternoon on the telephone, it developed that the Board
was in session and, for some unknown reason, was proposing to pass this resolution
We finally prevailed upon them to defer action
within the next fifteen minutes.
I think this was
file a brief on the subject.
so as to give us an opportunity to
last week.
the only thing that prevented the Board taking action
The hearing before the Federal Reserve Board in Washington on Monday
last was an interesting affair and I must say that the new Governor handled himself
To begin with, he limited the discussions to
in a very business-like manner.
not more than ten minutes for any one speaker, end, in view of the fact that there
was a delegation of some fifteen or twenty bankers, such a course was absolutely
necessary.
Governor Harding led off by stating that Boaton had large unused cash
resources and was "looking towards the sea" for a development of their manufacturthat as a result of his recent visit to Cuba he was very familiar
ing business;
with its needs; and that he had proposed to his directors the idea of sstablishing
He pointed
a branch in Havana, - a plan which they had cordially approved.
out that Section 14(e) made provision for the establishment of such agencies
and that if given the power to buy and sell cable transfers and bills of exchange
he could, incidentally, go a long way in clearing up the very bad currency situation that existed there.
Harding was followed by Adelson of the Atlanta Bank, who handled the
situation much more effectively than did Wellborn and McCord the week before.
I was then called upon to present the views of the New York Bank,
In sending you a
which I did by reading the memorandum enclosed, marked #2.
draft of this memorandum on Saturday, I also sent Harrison a copy, suggesting
that I would stop off and see him Sunday afternoon and would like to have the
benefit of his views.
You will observe that paragraphs 1 and 4 have been



,..XL RESERVE BANK OF NEW Y,IRK

2

Governor Strong

5.9.23.

-7 materially changed as the result of Harrison's suggestion to tighten them up.
This is the form in which our views went into the record.

Governor Crissinger then called upon Messrs Otley, Lane and Hoke Smith
of the Atlanta district; then on Bancroft, Aiken and Wing from Boston; and
upon McGarrah, Mitchell and Allen of the American Foreign Banking Corporation
While Otley earnestly pleaded for an agency for the Atlanta
from New York.
Bank (instead of giving it to Boston) practically all of the other speakers
opposed the idea of any Federal Reserve Bank entering the field of foreign exchange
in competition with member banks.
Mitchell
I really believe that this was an eye-opener to the Board.
of the City Bank, while stating that the establishment of such an agency would
probably save him $300,000 or $400,000 a year, in that he could materially reduce
the amount of cash reserve carried in Havana, said that notwithstanding that fact
he was unalterably opposed to the /'ederal Reserve Banks going out in competition
with their members for business of this character; that their exchange profits
in Havana averaged $200,000 a year and that he calculated a 50% reduction would
follow if this application of the Boston Bank was granted.

It is apparent from your telegram of May 4 that it was pretty difficult
for you to understand just what this application was all about, and your telegram
of May 8 rather implies that we should present the advantages of our position as
a central market Over the other districts. (enclosures marked 3 and 4 respectively)
Messrs Jay, Harrison and I all feel that under existing circumstances the position
of the New York Bank was a most fortunate one. Briefly it was that we were asking
nothing for ourselves; were not suggesting the preference of one Federal Reserve
but, in principle, were opposed to the idea of having the
Bank over another;
Federal Reserve Banks engaged in exchange business and if anything beyond existing
arrangements was necessary it could be met by an agency agreement rather than by
I took occasion to gat into the record the fact that
opening a direct agency.
80% of the Cuban sugar business, and probably as much of their tobacco and other
products, was with the New York market, so that this point, which you raised in
your telegram, was not overlooked.

Paul Warburg provided a knock-out in the form of a letter which he
On account of the illness of his wife, Warburg was not
had written to Harding.
able to go to Washington, but he sent me a copy of his letter to Harding and
I
said that with Harding's consent I might make use of it at the hearing.
obtained Harding's consent priVately, and when I felt the psychological moment ha d
It was certainly a knock-out so
arrived, I had Crissinger call for a reading of it.
far as Harding was concerned, and I honestly think his Boston banking friends were
very much chargined to find just what Harding's previous position had been in this
I have just called Warburg to obtain another copy of this letter, which
regard.
I will enclose for your amusement, - marked 5.

The hearing adjourned at one o'clock but I learned from Gilbert that at
three o'clock, when the Board reconvened, they were presented with a strong cable
from Crowder urging the Board to grant Boston's application; and Crowder's
position was concurred in and indorsed by the State Department.
I, thereupon,
got vary busy with Gilbert and asked him to undertake to flag prompt action until
he had sufficient time to examine into the whole subject, particularly the question
of redeeming Federal Reserve Notes.
I also got Warburg to
a copy of which (larked #6) is enclosed.
Everyone present seemed to feel that the Board was pre-disposed to grant
the application, but Alfred Aiken came to me after the hearing and said privately
that he was going to have a heart to heart talk with Dan Wing with a view to



RESERVE BANK OF NEW YORK

5

5.9.25

Governor Strong

finding out what his honest-to-goodness opinion really is with respect to
It was plain to see that Aiken himself felt a bit
Harding's proposition.
humiliated.

The Dow Jones news sheets of today carried a little account of the
It is not a very
meeting which is fairly accurate. (enclosure. marked #7)
edifying spectacle to find two banks scrapping for a bone, - and such a poor
bone as this is.
There are three other memoranda (marked
be interested in looking over.

b, and c)which you may

This, I hope, will give you an outline of the situation as it now
My own personal reaction is that in view of the testimony produced at
the hearing I don't see how the Board consistently can grant Boston's application.
exists.

If you see any important sins of omission or comission in this, will
you please point them out.
I know that you will be interested to learn about Harrison's condition.
Frankly I was just a bit discouraged when I saw him the Sunday before. He had
some new appliance on his leg which pained him a good deal and altogether he
seemed, I thought, quite unhappy. But this Sunday he was most optimistio;, the
He really hopes
pain had left him; and he seemed to be in the best of
When
now to get away from the hospital within the next ten days or two weeks.
he leaves he is planning to go up to Washington, Conn., where it is quiet and he
It is perfectly apparent
can spend a good deal of his time in the open air.
that he has got to be careful for some time to come, and, as far as I could
judge, I don't see how he can get back to the bank before the first of August.

spirits.

With very kind personal regards,
Sincerely yours,

;77,4.(101_,/
Benj. Strong, Esq.,
Cragmor Sanitorium,
Colorado Springs, Colo.

Encs.
(Dictated by Mr. Case
but signed in his absence - MSB)




FEDERAL RESERVE BANK
OF NEW YORK

14.47 14, 1923.

Benj. Strong, Esq.
Cio Cragmoor Sanitoriurn,
Colorado Springs, Colorado.

Dear Governor Strong:
.1 noticed in this morning's newspaper a dispatch from

Paris dated yesterday announcing the death of Georges Pallain,
Honorary Governor of the Bank of France.

I have cableci to the Bank

of France expressing our sympathy, and am writing to you as .1 know
you were personally acquainted with Governor Pallain.




Verv truly yours,

J. H. CASE,
Deputy Governor.

FEDERAL RESERVE BANK
OF NEW YORK

May 15, 1923.

Benj. Strong, Esq.,

0/0 Cragmoor Sanitarium,
Colorado Springs, Colorado.
Dear Governor Strong:

I enclose copy of a letter received from Governor Norman which is
self-explanatory, together with a proposed reply.

.1t struck me that Governor

Norman was very adroitly sounding us out on the question of a loan and in
case that was his purpose in writing, I wanted to indicate in

tcr,,,r

reply that

we would be favorably disposed toward a request from the Bank of England for
an advance.

I assume that your objection to loans which vould assist in

prolonging the present Reparation muddle would not apply should the Bank of
England presently ask us to make then an advance against gold on account of
the conditions outlined in Norman's letter.

I have not discussed this letter with the Executive Committee but
should

liAe

to do so before dispatching our reply.

Could you wire me your

views on the proposed 'letter as I should like to send off our reply at the
earliest possible moment.




Faithfully yours,

tN
J. H. CASE,
Deputy Governor.

FEDERAL RESERVE BAN K
OF NEW YORK
May 17, 1923.

Dear Governor:

The following are a few matters that may interest you:
Mr. Jay is down in Washington conferring again with Mr. Crissinger about the
I have just had a little chat
idea of coming up to New York and making an address.
with him over the telephone, and he tells me that in addition to talking with Mr.
Crissinger he has met Mr. Janes and the new Comptroller, and that Mr. Cunningham had
merely qualified a day or two ago and had returned to the West for a couple of weeks.
Mr. Jay is leaving there tomorrow to go down to Atlantic City to attend the banquet
of the New Jersey Bankers Association.

There is not much further to report on the Cuban situation other than to
say that I understand that Secretary Hughes brought the matter up in a cabinet meeting
a week ago, and that he and Hoover strongly advocated the appointment and that the
President acquiesced in the proposal and said that he would do the necessary with the
new Governor.
It is very evident that the Secretary of the Treasury is not very
Rue,of the Advisory
vocal in a meeting where he has strong advocates opposed to him.
Council requested Crissinger to postpone a decision until the Federal Advisory Council
meets Monday, as they went on record against the idea back in 1916 when the South
American agencies were up, and feel that the matter should not be passed upon without
giving the Advisory Council an opportunity to be heard.
In the interest of economy and efficiency the Officers Council has agreed
to the proposal to consolidate the work of the Procedure Committee with that of Methods
and Supplies.
The latest Treasury refunding program was most successful.
Subscriptions
totaled about $1,000,000,000 04 a cash basis and probably $300,000,000 in exchanges.
Gilbert has accepted $300,000,000 in cash and a little less than $300,000,000 in exchanges.
No further borrowing will be required before June 15, then probably only
a moderate amount, and from that point I think the chances are very good for riding
until September 15.
The one big bug-a-boo in Treasury financing is the possibility of a soldiers
bonus early in 1924.
Congress will surely pass such a measure, and I am not at all
certain that the 7eto power will be exercised.
I wish you would think up some plan
as to how this may be stopped.
Money conditions are working easier.
The stock market has been greatly
depressed, and upwards of $100,000,000 of street loans have been released as a result.
Money today worked as low as 4% on call, with a corresponding enhancement in the prices
of short term Governments.
Your suggestion about more frequent meetings of the Investment Committee is
a good one - a conclusion I had reached several days ago.
A further meeting is to
be held in Washington next Wednesday, with a preliminary meeting of an informal
character here in the bank on Tuesday afternoon.
The aggregate holdings of Government securities have been reduced to
$177,000,000, and I am hoping to have the members of the
committee agree as to their




FEDERAL RESERVE BANK OF NEW YORK

5/17/23

2

own banks and recommend to the others not on the committee that they re-sell to the
market the $32,609,500 December 4t certificates, which I think the market will absorb
at par - in fact, I have just sold to it $2,500,000 from St. Louis at this price.
Gilbert mill probably have about $100,000,000 of surplus for reinvestment between now
and June 30, and as the Sinking Fund provisions have noi been extended to Treasury
notes as well as to the outstanding Government bonds,it may be possible for him to
In
take up some of the lower rate Treasury notes which can be procured under par.
this connection, I am arranging to sell him on May 31 next, the date upon which they
will be returned to us, $10,000,000 4 1J4s, March 1926.
CLO-cAL.R.,4 -6t27(7-

t,40.4eJ1,4,

The Federal Advisory Council is
the topics to be discussed are:
7.

to meet in Washington next Monday, Among

Cuban Agency
General Economio Situation
Voluntary Services to Member Banks
Direct Action
The last two items appear to be very live subjects, and as the personnel of the
Governors Conference Committee on Services to Member Banks is substantially the same
as that of the Open Market Investment Committee the Board has suggested that the
meeting of that Committee also be held in Washington next Wednesday.
Direct Action seems to have the front of the stage for the moment,
so
far as the Federal Reserve Board is concerned.
We had a little discussion on this
at our Directors meeting yesterday; and they were all opposed to the application of
that principle here.
Mr. Warburg, however, who was in attendance at the meeting
feels that there is something to be said in favor of the idea.
As an illustration of
how it might work according to the Federal Reserve Board's idea, they have suggested
that some of our big banks may even now be lending to " sugar speculators", and if
that is so-it is our business to know about it, and if necessary take steps to discourage it.
Could anything be more silly! Sugar, of course, is a political bug-bear
in Washington, while the idea of the Southern banks lending to cotton speculators, or
the Chicago banks to grain speculators is apparently an entirely different matter.
In Washington the situation is certainly a discouraging one.
I was interested to find that last week the Guaranty Trust Company withdrew
$500,000 Federal Reserve notes for shipment to Russia, and that today they withdrew
$350,000 for shipment to Germany.
What is going to happen when the Russians and
Germans taste blood in the form of good money?
Are we to be called upon to supply
them with a circulating medium?
8.

9.
I had quite a long talk this morning with Mr. J. F. Sartori, President
of the Security Trust and Savings Bank, Los Angeles, who is on his way to Europe.
He had a long tale of woe and some criticism of the System which he apparently wanted
to work off on someone, and in your absence turned it loose on me.
Boiled down, his
criticism , as I told him, was against the Comptroller's office more than against the
System.
He said that in several instances, recent/y, he has gone in a city and
bought up the " First Ilational Bank" of that town, merged it with his Security Trust
and Savings, and that almost over night the Comptroller has granted a charter to
another group for the "First National Bank" in the same town.
In addition to the
question of ethics involved in the granting of such a charter, Sartori said it had
actually led to checks drawn on the " First National Bank" being returned "no fundsP
when in reality they were from an old check book and really represented the original
institutianwhich was merged.
Sartori said that he has written the Comptroller and



5/11/23

AL RESERVE BANK OF NEW YORK

and various members of the Board protesting against this and threatening to withdraw
from the System, - a threat which he says he is prepared to make good if he does not
get satisfaction.

I also had a nice little visit this morning from Mr. Masson, Director of
He merely called to pay his respects and wished to be
the Credit Lyonnais, Paris.
remembered very kindly to you.
He said he had written you, so no doubt you are
fully informed of his visit.
In line with your suggestion,' have passed on to McDougal, Chairman of
the Leased Wire Committee, your thought on the chance of fraud in the use of our wires
for making payments, and asked him to have a study made.

The First National borrowings are now down under $50,000,000, and I learned
to-day that they were selling $13,000,000of short Governments in the market, which
doubtless means that a further reduction will take place in their account.
There was a red-hot editorial in the New York Evening Post last night on
the subject of "Politics and the Federal Reserve System".
"Washington" is long
I am
overdue in having someone state just what was well stated in this editorial.
enclosing a copy for your edification.
Things are running along here at the bank in fairly satisfactory fashion.
The boys are planning their annual golf party some time early in June,and Barrows
and I are arranging to have them out in Plainfield.
I am sorry that you will not
be there to lead off with one of your good long wallops, I certainly hope you can
show us the way next year.

Trusting that everything

i9

going well with you, I am, with best regards,

Very cordially yours,

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







Politics and the Federal Reserve System
For the second tirne in feent weeks the,_,Segetary

of the Treasury has been reported as indulging in
coma-ant on Federal Reserve Board policy. He is
now

fedited with saying that the Board has no pres-

ent intention of raising discount rates and that it
as not even discussed the question of rates at its
ecent meetings. If Mr. Mellon is correctly quoted
he has been guilty of a breach of propriety. If he

oken as a member of the Board he has violated
the well-known and well-founded principle that individual members shall not speak for the Board or
reveal what goes on in board meetings. Certainly
if any one is to interpret the Board to the country
it should be the Governor, and then only after due
' consultation with the Board. To permit individual
members to give out their views of the Board's attitude would be to encourage "leaks" and to foster misunderstanding and uncertainty.
But if Mr. Mellon has been speaking as a memhas

__.

With the Administration claiming credit for reducing official rediscount rates, with the Secretary
of the Treasury announcing what the Board will or
will not do, and with the President's protégé appointed Governor of ra hand-picked Board, it is
abundantly clear that the latter is regarded as a
convenient instrument for carrying out the Administration's policies. The theory of an independent
Board supervising the nation's banking system in
a scientific and impartial manner, and without regard to political pressure, has been discarded. Both
the prestige and personnel of the Board have
suffered sadly. It is a discouraging chapter in
American finance.

.

Under the circumstances it is not surprising that
the Board has lent itself to a cheap money policy.
The record here is bad. Not only were the official
ates reduced in advance of those in the open mar-

ket but large open market purchases of Treasury
certificates and acceptances were made during the

ber of the Cabinet the matter is even worse. It summer of 1922, when the money market was at the
.would indicate the low estate to which the Board has bottom. In other words, although the member banks
I/fallen with respect to political domination. Both did not care to take the Reserve system's credit at
in respect to corporate independence and personnel 4 per cent, the Reserve banks created large addithe Board has suffered severely at the hands of the tional amounts of credit at a time when prices
present Administration. To begin with, the Admin- already were on the upgrade. The inflationary charistration announced its intention of reducing official acter of such an operation is evident. Subsequently,
discount rates and putting Liberty bonds up to par, as open market rates moved up, the official rates
a programme which ran exactly counter to the cor- were kept down.
To-day, with prod/lotion, at its maximum, the offirect theory of an autonomous Board. The President's fail-tire to reappoint the Governor of the cial rates are still below the market arid hardly ally
Board, not because he was not a good Governor but higher than during the depth of the depression.
because of the ill-founded opposition of partisan Business has developed a form of colic due to its
politicians, was the next step in undermining the extraordinarily rapid expansion. Prices and wages
Board's prestige. The long delay which ensued in have risen too fast. It is the sad record of the Fednaming a new Governor was disgraceful and was eral Reserve system that it did nothing to restrain
aggravated by similar delays in filling other vacan- the rapidity of the expansion, but rather encourcies and by the celebrated "dirt farmer" episode. aged it with low discount rates. That it should
Finally the President named as the new Governor have d. ne so is not surprising in view of the Ad-

an individual whose chief qualification was not his ministration's inflationary policy. And a grim retristanding as a banker, financier, or statesman, but bution is now a possibility. Having rushed things
the fact that he had been an intimate of the up so fast, the Administration is in danger of having the boom kill itself off before the Presidential
President in his home town.
-election can take place. The sacrifice of sound
-principles may turn out to have extremely unhappy
results, even from the narrow standpoint of political
expediency.

FEDERAL RESERVE BANK
OF NEW YORK

Mw 22, 1923.

Benj. Strong, Esq.
Cio Cragrnoor Sanitorium,
Colorado Springs, Colorado.

Dear Governor Strong:

Referring to the letters from

Schnyder de Wartensee which

you have returned to the bank with a memorandum requesting me to write to

Schnyder, I have sent a letter to him along the lines indicated in
your memorandum and an) enclosing a copy of it. A short time ago you sug-

gested that ,iIr. Schnyder was entitled to an informative letter occasionally
and with that in mind I wrote to him several days ago and I am also enclos-

ing a copy of that letter for your information.

I will see that he is taken

care of during your absence.




Very truly yours,

LAN
J. R. CASE,
Deputy Governor.

FEDERAL RESERVE BANK
OF NEW YORK
june 1, 1923.

Dear Governor:

Mr. Jay told me yesterday that he was busy getting out a letter to you
reviewing some of the operations which have been going on during the past two
weeks, but that he was leaving to me the question of keeping you advised on the
Cuban situation.
I received your two telegrams of yesterday, and sent you a long message
yesterday afternoon which I think will bring you well up to date.
Mr. Warburg
has been communicating almost daily with Dr. Miller, both by correspondence and
over the telephone, and he has now sent me, for transmission to you, copies of
some recent correspondence with Miller.
I have marked them A,
being Warburg's letters, and B being Miller's reply.
As stated in my telegram of yesterday, Mr. Hamlin is at work trying to
define a joint agency between Boston and Atlanta.
Atlanta has apparently sent a
steady stream of emissaries to Washington to work on the Board.
The very fact
that the Board is giving a joint arrangement any consideration is, to my mind, a
pretty clear indication that they are being hard pressed and are looking for some
solution outside of granting Boston's original application.
Warburg's scheme Seems to me to be a good one in that it has the advantage of tying in jointly all the banking institutions in Cuba and would do away
with the idea of any Federal Reserve Bank establishing a branch or agency there.
When I was in Washington last week the Board read to me a proposed
regulation to cover exchange transactions which impressed me as being quite rigid.
I obtained a copy of it from Mr. Hoxton and am now enclosing it herewith.
Warburg told me last night that Dan Wing does not approve the idea of
the joint agency and will do what he can to stop that.
I have not talked with- Mitchell of the City Bank during the past few
weeks for the reason that he has expressed his own view to the Board in vary clear
fashion, namely, that while an agency of any Federal Reserve Bank would enable the
City Bank and all other banks operating in Cuba to out their reserves in two, he
is, nevertheless, as a matter of principle,opposeltoany Federal Reserve Bank
establishing a direct agency and entering into ca;mpetition for the purpose of
dealing, in bills and the purchase and sale of cable transfers.

I have had prepared a list, as of the close of business May 25, of our
They are, with but one minor exception, all sugar bills.
Cuban bills.
The statement showsthat out of a total of $4,932,000 drawn to finance the importation of
sugar more than 80% were drawn on institutions in this district, while some of
the bills accepted by Boston institutions were drawn by companies domiciled here.
The bills drawn to finance the storage of sugar amount to $940,000 and $655,000
for the New York and Boston districts respectively.
studying the statement further, so I am enclosing a copy for your information.




You may

OFNEWYORK

2

Governor Strong

6.1.23.

I know how difficult it must be for you to be so far away and not
able to take a personal hand in dealing with this matter in your own vigorous way.
In view of the fact that Boston and Atlanta have locked horns, I have considered
very carefully the position we occupy and think the document which we filed with
the Board is a strong one and leaves us in a rather enviable position.
Kenzel has been away sick for the past week, although he tells me he
hopes to be back next Monday.
Trusting that you continue to improve, I am, with best regards,
Sincerely yours,

07k-\
Benj. Strong, Be.,
Cragmor Sanitorium,
Colorado Springs, Colorado.

JHC.MSB (signed in Mr. Case's absence)
Encs.




CeA9--

Cony.

It 11.s occurred to me tht, ross.ibly,
troubles might b4 found in

solution of your

m,knner tht wovld ,:ccomplish everything

tht the Bord rd the Administrtitm or-Int to se.# dne nld still nct
So slcred to mend the members of the Couneil, If something like ,the following !71.nn would be

trnecerd thel-Ines of snfety th-t

- ,11d only give you the r:-Tighest
tried. I will put it ir very erude
outline. If the thought 5prels to the Bord, we might go into more

minute development of the detile, which do not eenm to me to offer
ava)y difficulties.
My th-fucht is simply this:
Let the bnrks th9t belong t the Clenring House in Havnnri.
(.1. think Hording sid there were eight) jointly organize 6. smIll bnuk,
for 'fetich they would uply the oritiped which you enn csll the

"Federl l'tserve P.-rnk Currency 4ssocintion", or if you do not clre to
r.me to suit themselves. Thst
mute used, let them tke
Ivore such
is entirely RS the Ford prefers..
Let the Clenripg House 7-.Ty-Ant F7'Ime directors 7nd let them
request the Feder41 8erve ?or:1rd t ço nt. few 711itiorl nes.
ru desire. If you
It rests with you how much of the power 711d
cre, let them n,7print m,Ftnnger, subject to your ,7*rovnl.

All of this cull 04'ht,rdled so thnt the 71e-r!r7 H use
briks submit this rrorosnl tO,you nnd tht it shc:u'd rot c.me from
you

s s denmnd.

I sm sure,.Cererl Crowder could ftrunge th!A end,

if the plsn pnenls to you Nt all, it is just the kind of thing thA,
Hording could hnndle very /well wt the other end.




-2-

Appoint this new bank as your agent and give it all the
sdvertising thet is necessary in order to have the FelerAl Reserve
bank pestige keep down any plan kf aniildependalt central bank In
Cubs.

,Al] that would be ncessary for the Federrl Reserve bnk
or banks to do would be to agree to open an account with this new

to maintain r certAr deposit with it umier the Io!nt resuorsibility of the ClerIng House b-:nks. They would cr::on t#is 71ccount by shiping new currency to this, let me cal' It, "Cur--ency
agency

,n(.1

Ascociatin" or "Federal Reserve Currency Bank of Cuba", and leve it
t.7 this currency bank to redeposit these furls with the Cleexing
b%nks in somo fair proportion, - t the 5eginring, Ifis:lume, in the
same proportion in which they would subscribe the c-tpitn1 rnd later
on, .roselbly, in yroportion to the degree of cooperAion rndhelpfulness that ech bank would show.
,

You would then expect er,:tch Cleftring Huse bnnk t cooperate

in turning in soiled currency, by whih action they woOld reduce the
;

deposit which the currency bank would have n7ith them and th7, currency

bank, it turn, would, -nce more, build up that deposit by giving them
curroncy.

You could give to this new currency brk the .rower to
incrA)le tr-nafers. You could also provide thit it r11!7ht del In paon the7ines that you hr.(' Ir mind; but I rather thlonk tht the
titer tii complicate amtters for the rrepent, and 1 think it wculd
better to le,%Afe t lter developments whethr the exercise of such
powers loruld be necesr ry or not.




think

c.:heme speak s f(,r itelf.

You can paint

just v,u little or ,..amuch as
you like, and you would be getting ts much reatige ut of the trans"Federal Restorve 1.ystem"

OV4r Cub

mqlon 68 you wish, While you are getting these rAvangages, you ,re,
not estabishirg an orgr,n17%tion of yourown; but are dealing )4th whnt

will be a foreign corresrndent, even
own (3ntro1.

iough it rill be :ne under yrur

You are gettng tha goodwill of the Cle.-,rinw,

b-nks

and thrugh that the goodwiL of CubN, end, at there time, you h. ..ve
managed to keep thCub-n Toliticiane out. Moreover, the majoHty of
thenesring HOU30 bnks, T assume, would be non-Cub91.




Cony.

to your suggestion e.bout the Cub. n Agency: It is very
Ingenious and has given me something tothink bout, and I shall, when

the moment is fvor-.ble and after I have theroughly thought it eut,
It on to the Bon.rd.
There rre one or twe questiens I would 'Ake to ask you
cencernIng it: Suvesing it were th:ught neceae ry to have a stock of,
se.y, two million new Federe.1 Reserve currncy on hand at the ency in
Cube, how wuld the Federl Reerve Rerk supplying t' is currency be
adequately protected ageinst lose?
You c ntemplete that the proposed Currency Aseociation sheuld
heve 5 capitel. What would be the minumim carIt-1 necessry ..nd how
should the capitel be invested?
It is obvious the-t if the ce.pital were V7,000,000 (which T
hsve no doubt would be regarded e.s gretly exceseive) ind invested in

United St tee Tre:,ury Certlficetee, these being :led7ci with the FeR-eserve

deral/Penk supplying Federe.1 Reserve notes to the Curr,mcy Associstion
in Cul)!=), the protection of the Reserve Perk would be complete, but how

ff,r short f this it would be sete for the Boerd to euthoriee the Federe.? Reserve Bank te go in Insuring the sr.fety of rotes to the es.sociation I can eeslly see might give rise to tt differelce of opinien.




Cory.

glad that my sugF.estion strikes you as being worth
further considerEtion, .zn,d I am only toe happy to arswer your ques-

tins.

'177,u

ask: " 'What wr)uld be the minimum clpitFL1 recesry, And

ho % should the capit1 he invested?"
der which,

If you on adopt

!.,lan, un-

I pro7osed, the Cubn.01*nring 1-Luse bnnks would be

jointly ,:rd everl y1:11.)le for their trneactions with the Currency
Assoeiwtion, you need, not bother much

hout the cital of the Asso-

elation itFelf. .4ssuming that you h4 n mini a deit of
$2,0ot000 with the Currency Aspodhtion, and assuming for simplicity's

sake tht the eight barks cntributed in equ-1 parts f,- the ck7itl
of the Associstion, I should sey that the Aseccie.tion ruld deposit
Its funds ir equal part with es& -f the Clearing House member
banks at

r, rte of ftterest to be

1xed from time

f.,

time. Fs.ch mem-

ber bank woulJ denosit with the Assoc'etien ndequate corsteral to secure tha depot. This collatertki would be stipul-ted by the Cie' ring House berkr themselves for their mutual rrotection, 7J14 th_le co)laterl In turn culd be held ,E,,-Ir by the Currency Assoc1at5n for
the protectien of the deposit of the Feiemi Reserve Bank. If you
could proceNi on there lines, the ca ital. of the Currency Associen
would be r.ut in Tore to est'h7Hsh it 'egn1 frt4,ty.11 to rovide an
fi.dditionnl mr,rgin, than for the ::Tur7ose of crit,ng 1,..rge cerit:A
resrnsibil:ty. This i_s only en e !,ny of kifl:'ng the ct,t, ' think it
is the .,Ilost obvious,..'.nd sfest ,Ale.

If there ie 6ny ,A,1Iticl
,

question that you woull like to hve answered, I will try my best o do
SO.







CL'

Nif ESTEkASELSA UNION
M
TEL

,F SERVICE SYMBOL

E

Telegram
Day Letter

Night Message

Blue
Ite

WESTERN UNION

L
ht Letter
If imie of these three symbols

ord,t,

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

NEWCOMB CARLTON, PRESIDENT

GEORGE W. E. ATKINS. FIRST VICEPRESIDIENT

CLASS OF SERVICE SYMBOL
Telegram
Day Letter

Night Message

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

words) this is a telegram. Otherwiseits character is indicated by the
symbol appearing after the check.

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

VA291., 214 1/7C
I 4.

WYORK NY 31' 455P

C, 27,/i

BENJAMIN ! STRONG

CRAGMORE SANA410RI UM; COLORA DOS PRI NGS COLO

RECE I VE . YOUR TWO T ELE GRA MS OF. TODA Y 'APE

.

SENT BEFORE AND. ONE

AFTE.R YOU RE CE VED WARDURGS: PLAN. STOP, PRE:St/ilk T,tIAT THE LATER ONE
di?

CHANGED THE, VIEW

EXPRESSED; IN THE EARLIER. STOP DISCUSSED WHOLE MATTER

WITH JAY AND WA RBURG ATLENGTH THIS MORNING. STOP WARBURG

; IS KEEPING; IN CLOSEST .TOUCH' WITH MILLER. ON SUBJECT AND
TELEPHONED. HIM WWILE! WE WERE THERE: STOP MILLER SAYS THAT HAML IN
NOW WORKING: ON A' SCHEME.

Blue
Nite

IS




OF SERME SYMBOL

-

Day Letter

Night Message

Nita

Night Letter
I

Blue

WESTE,,,

P.,

ML

le

of these three symbols
Other-

wiseitS character is indicated by the
symbol appearing after the check.

UNION

N.,

CLASS OF SERVICE SYMBOL
Telegram
Day Letter

TEL

NEWCOMB CARLTON, PRESIDENT

wvittif.

AM

-

Mite

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

GEORGE W. E. ATKINS, FIRST VICIPPREielito,

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

Blue

Night Message

WESTERN UNION

appears after the check (number of

words) this Is a telegram.

3

words) this is a telegram.

P4f >
.5.(9

VAP91

SHEET; 2.111:-

FOR A JO INT AGENCY BETWEEN BOSTON AND ATLANTA WH ICH: IS DELAYING
v<AN

MATTERS WARBURG TOLD MILLER THAT: SUCH JO IN'tCVENCY WAS
;

IMPRACTICABLE: STOr MILLER SAID. HE HOPED TO

8E44'1.44

NEvvYORK SOON TO

DISCUS WITH" WARBURG. THE WARBURG. PLAN AND EXPRESSED THE OP IN ION
.

THAT THE TIME TO SUGGEST

11 .10 THE BOARD. HAS NOT ..YET

ARR I VED STOP; IT; IS, OUR, 01? I N ION THAT THIS. PLAN

,

Other-

wiselts character is indicated by the
symbol appearing after the check.

PROVIDES THE REAL

SOLUTION FOR. THE SITUATION AND, IF: SOMETHING: OF THIS KIND CAN BE
WORKED, OUT .WE SHOULD WAIVE THE. QUEST:ION. OF BEARING THE COST OF
SH IV. PING CURRENCY: SINCE ATLANTA AND L OTHER RESERVE BANKS ARE QUITE




.4LASS OF SERVICE SYMBOL
tram
Day Letter

Night Message

Mite

NI ht Letter
If

Blue

WESTE

NL

Telegram
Day Letter

NEVVCOME CARLTON, PRESIDENT

Nite

Night Letter

NL

If none of

1M

app, s after the check (number of
words) this is a telegram. Other-

Blue

Night Message

WESTERN UNION

of these three symbols

wiseits character is indicated by the
symbol appearing after the check.

tihsTEN UNION
v. eiff
M
TEL

CLASS OF SERVICE SYMBOL

m, 3

words) this is a telegram.
wiseits character is indicated by the
_symbol appearing after the check.

GEORGE W. E. ATKINS, FIRST VI Ciglii,Eh

!)I

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

VA 2.1i

SHEET 3/44

READY TO ASSUME; IT STOP; IN. V IEW. (101°.fiT HESE DE VELOr MENTS SUGGEST YOU
#1>:,

DO NOT TAKE: PROPOSED COURSE OF TELEGPKIK-I ING HUGHES

OR ANY S I M ILA MOVE STOP WE ARE KEEP I NG' likCLOSE TOUCH WITH

SITUATION AND ARE HOPEFUL THAT;. IT WILL NOT

FRO(VI US

Gt191.04 'HAY

Nidp.

-4/4

these three symbols

appears after the check (number of

CASE.

MISC. 34.1 40M 4-5,2

FEDERAL RESERVE BANK

TO BE MAILED

OF NEW YORK

1

CONFIRMATION OF TELEGRAM
WF HAVE TODAY TELEGRAPHED YOU AS FOLLOWS:

Benjnmin Strong,
Crngmor Sanatotium
Colorado Springs, Colorado.

kay 29 1923

Have just held joint conference Warburg Jny nd;Tiason denling with your letter
and telegr.,m stop Understand W-rburg has sent you copy of memorndum dated May 21 & 22
on last two pages of which alternate plans ,,re suggested stop He :r1(1
are carryinE on thily correspondence about this plan xhich is delaying and possibly
tending to check action on orirr_inal proposal stop In vie, of fore_oing will
write you fully Thured-y tednesday a holiday stop leeanwhile if you have coy

reactions on Warburg's pin plese




1,1.re

CASE

them.




FEDERAL RESERVE BANK
OF NEW YORK

June 11, 1923

Ir. Benjamin Strong,
Cragmor Sanatorium,
Colorado Springs, Colorado
Dear Governor Strong:

Just to add to the "gaiety of nations," you may
be interested in perusing the correspondence exchanged
between Governor Crissinger of the Federal Reserve Board
and the Open Market Investment Committee.

I am, therefore,

enclosing with this the following:

Letter of Governor Crissinger dated Lay 31, 1923
Copy of my reply dated June 11, 1923
Copy of Governor Norris' letter bearing date of
Jane 8, 1923
Statement showing holdings of Government securities
as of Lay 23, 1923, with subsequent
sales aggregating 453,190,400.
Very truly 4ours,

J. H. CASE
Deputy Governor

Enclosure (4)

-V*.*

3IJgRIfl-JTI0H O S G BILLS H LD BY TH FE E A RESERVE BAIg OF HO' YIRg
F U riiK
E
E DRL
AS O TrE CLOSE OF BJ5ISESS -AY 25. 1523
F
BILLS DL Y T FELICE TEE I2IFCRTASILH CF SU A
EA,!-.' O
GR
AD RESS
D

RAWER'3 ;;ame
Earner S gar Ref ining Company

P D J O ORIGIH & DESTINATION CF IM
O ST F
PORTATIOH

Hew York

Cuba to J. S.

E. Atkins & Company
Sugar Estate of Griente
Beatties Isabel Sugar Co.
Barahona Company
Cuban Dominican Sugar Company
Warner Sugar Refining Company
Philippine national Bank
Central "Santa Isabel" S. A.
West India 3ngar Finance Corp.
E. Atkins S Company
c

H York
ew
H York •
ew
Manianilla,Cuba
lew York
Hew Yoik
Hew Yoik
H York
ew
Santa Clara, Cuba
Hew York
Hew York

Cuba to G. S.
Cuba to (j/ S.
Ci*a to U. S.
Cuba & Santo Domingo to U. s.
Cuba to U. S.
Cuba to U. S.
Philippines to U. S.
Cuba to U. S.
Cuba S 3anto Domingo to U. S.
s
Cuba to U. S.

American Sugar Refining Company
Warner Sugar Refining Company
Federal Sugar Refining Conpany
Caledonia Sugar Company

Hew York
Hew York
Hew Yoik
Boston

Cuba
Cuba
Cuba
Cuba

Cuban Dominican Sugar Company
E. Atkina & Company
Federico Almeida
Caledonia Sugar Company
E. Atkins & Company
American Sugar Refining Company
E. Atkins S Company
s
West India Sugar Finance Corp.
Comp. Gral de Taboos de Fillpinas
Caldonla Sugar Company

Hew Yoik
Hew York
Santiago, Cuba
Hew York
Hew Yoik
Hew Yoik
Hew York
Hew York
Manila
Boston

S C N F’ D A RESERVE DISTRICB
EOD
SR L
Acceotor
Amount
Horthwestern H/B
$100,000
(Payable In Hew York)
In tn at'l Accept. Bank
55,000
Guarssity Trust Co.
230,000
Rpyal Bk of Canada
70,000
Intnat'l Accept. Bank
73,000
Intnat'l Accept. Bank
50,000
Ghase national Bank
250,000
Cbase national Baik
450,000
Royal Bank of Canada
100,000
Intnat*l Accept. Bank
325,000
Kidder Peabody
185,000
( Payable in Hew York)
Hatl Bank of Comncrce
100,000
In tn at'l Accept. Bank
100,000

Cuba S Santo Domingo to U S.
c
«
Cuba to U. S.
Cub a to U, 3*
Cuba to U. S.
Ctfca to U. 3.
Cuba to U. 3.
Cuba to U. S.
Cuba to IT 3.
.
Manila to U. S.
Cuba to U. 3.

T

to
to
to
to

U.
U.
U.
U.

3.
S.
3.
S.

FIRST FTD IIAL RESTATE DISTRICT
E
Acceptor
Am at
o

First Hatl Bank Boston $100,000
Intnat'l Accept.Bank
(Payable Boston)

75,000
First Hatl Bank Boston

Guaranty Trust Compmy 395,000
Royal Bank o f Canada
254,050
Guaranty Trust Company 925,000
Chase national Batik
25,000
Mechanic 3 t 14atala h/b
50,000

Hatl 3havmut Bk Boston

300,000

First H^tl Bank Boston

100,000

Guaranty Trust Company 215,000
Intnat'l Banking Corp. 100,000
Jf*

„L

$4,127,050
Second Federal Reserve D istrict
Fir at Federal Reserve D istrict

275,000

$eo5,ooo

-$4,127,050
"

8 0 5 -0 0 0

$4,952,050
Credit arranged b; the Intarnat ional
Acceptance Bank, New York City,
ft t

m

m

' 3

AD
DRESS

o

p m -?

to

F n ii^ c E .

Q f S'-ffftilffi?
J

Cuba Cane Sugar Corporation
Caleuonla Sugar Company
Cuban Dominican Sug.r Company
Cuba Cane Sugar Company
H Yoxk & Havana Finance Corp.
aw
Sugar Estates of Oriente.Inc.
Cuba Cane S i ^ r Corporation
Punta Alegre Sugar Co.

Hew York
Hew York
Hew York
Hew York
Hew York
Hew York
H m Yoik
Boston

Cuba
Cuba
Santo D lingo
o
Ouba
Cuba
Cuba & Santo Domingo
Cuba _
Cuba

Punta Alegre Sugar Co.

Boston

Cuba

Cuban Dominican Sugar Company

Hew York

Santo Domingo




p .e .m

m

SECCH FED L STARTS
D
ERA
Acceptor
national Bank o f ComnBroe
Guaranty Trust Company

DISIRI T
A.:tount
^150,000
115,000

First Hat ional Bank,Bo staa $125,000
E<suitable Ti*ust Company
Bankers Trust Co :pany
Guaran ty Trust Company
Hew York Trust Compmy
(Payable in Boston)
Eq iltable Trust Company
{Payable In Boston
French American Banking Corp,

150.000
100.000

125 #> 0
G
50.000

------- #940,000
-------------- 6 5 5 , Q Q p

41,595,000

First national Bank,Boston

530,000

50.000
.M

mS S S L

#940,000
Second Federal Reserve DStrict
First Federal Reserve D itrict

FIRST FED A RESERVE DISTRICT
ER L
Acoeptor
Ajaoiint

$655,000

STA M N O H
TE E T F OLDIN O G V R M N SECURITIES M Y 23, 1923
GS F O E N E T
A
SH W G Q O A A D A O N SO O SU G ST D SALE O 150,000,000, ALSO T E
O IN U T N M U T LD F G E E
F
H
A TM N O B K
LLO E T F AN ERS ACCEPTAN
CES F O N W Y R PORTFOLIO IN R PL C M N
RM E OK
E AE ET
Dec.15. 1923 Mar. 15.19 24 June 15.1924
Boston

-0“

•0*

♦New York

-0 -

-0~

Philadelphia

| 1,100,000
—
0“

Sept.15.1924 Mar.15.1925
♦ 1,002,000
- 0-

June 15.1925

Dec*15,1925 Mar. 15.19 26

Sept.15.3926
♦

920,600

-0 -

♦ 1 , 008,100

-0 -

-0 -

♦

-C«

-0 -

-0 -

-0 -

♦ 4,830,700

-0 -

-0 -

-0 -

-0 -

2,000

46,000

168,500

8,685,200

194,700

10,607,500

2,525,000

68,400

269,500

6,154,500

2,337,000

300

499,100

557,000

32,500

1,775,800

355,coo
«o**

♦Riciaoond

-O

-0 -

- 0-

-0 -

—
0"

-0“

- 0-

-0 -

♦Atlanta

-0 -

•Q
•m

- 0-

-0 -

- 0-

215,000

-0 -

-0 -

•♦Chicago

17,790,000

-0 -

■0*

-0 -

-0 -

16,800

693,100

1,063,400

850,600

1,245,900

‘ 1,018,300

1,555,900

892,500

238,900

1,069,300

50,000

3 , 017,000

11,909,100

1,723,500

2,412,200

188,800

55,500

Minneapolis

-o -

Kansas City

m
Qm

171,500

♦Dallas

6,000,000
•o»

San Francisco

♦29, 509,500

TOTAL
*
**

c
>




'

• 1,368,100

6,000
300

-0 -

7,000

1,154,000

1,285,900

20,000

487,900

2,000

11,307,300

-O

-0 10,000
-0 -

-0 -

-0 -

-0“

«o**

-0 -

-0 -

«•
0“

4,525,000

27,425,000

12,400

-0 -

■o*

1,850,000

3, 667,000

#13,200,600

♦22, 108,500

♦22,699,600

♦4,793,200

♦26, 913,200

♦8,451,600

♦11 , 358,600

♦

277,800

Investment holdings of Government securities entirely disposed of*
Sold for delivery June 15, 1923

«o**

Total

-o »

5,147,000

St. Louis

Dec.15.1927

800,000

345,500

♦^Cleveland

Mar.15.1927

—
0“

"0*»
-0 -

25,700

Sale8 Quota
£>0,000.000
♦ 3,060,400
-0 -

Actually
Sold
♦ 1 , 800,000
> -0 -

253,100 23,250,900

7,422,800

7,422,800

29,500 16,802,200

6,990,000

8,646,800^

-0 -

-0 -

-0 -

283,300

283,300

59,000 19,648,000

-0 -

Allotment o f Bankers Ac­
ceptances from N.Y. P ortfolio
in Replacement
-0 - 05,000,000
-0 -

283,300

-0 -

8,124,400

8,124,400^

1,924,400

8,783,400

3,381,200

3,381,200

2, 764,600

1,905, 200

1,880,400

-0 -

209,800 30,948,500

7,292,000

7 , 100,000

-0 -

58,300

249,200
- 0-

931,200

—
o»*

•0
•“

6,000,000

2,962,150

6,000,000

5,000,000

-o »

-0 -

27 , 479 , 400

8,431,550

8,551. *J 0
0

3,181,500

♦ 858,900 fwq.791,000

♦49,853,000

♦53,190,400

♦16,037,100

♦619,500

on 6/15/23

on 6/15/23

FEDERAL RESERVE BANK
OF NEW YORK

IN REPLY PLEASE REFER
TO

June 15, 1923.

Dear Governor Strong:

I am enclosing copy of a letter received to-day from
Governor Harding, as well as a copy of my reply, in which you will

note that Boston has withdrawn from its participation in our
foreign bank accounts.

There were indications that this might

happen before Harding went to Boston, and evidently the Cuban
controversy has led them to take the bull by the horns and withdraw.
You will note from my reply that we have shown no desire to force
a participation upon them against their wishes, and immediately
undertook to assume their share for our own account.
I had luncheon on Monday with Jackson Reynolds, and took
the opportunity of calling to his

attention

that the First National

Sank owed us $47,000,000, and that we were beginning to look upon
them as rather steady boarders.

Apparently he took the hint because

they have begun to dispose of some of their Treasury notes, and to-day
paid down to $7,000,000.
Very truly yours,

Mr. Benj. Strong,
Cragmor Sanatorium,
Colorado Springs, Colo.




FEDERAL RESERVE BANK
OF NEW YORK

June 18, 1923.
Dear Governor Strong:

Referring to my recent letter enclosing copies of correspondence with
Boston regarding their withdrawal from further participation in our foreign bank
accounts, I am enclosing copy of a letter just received from Governor Crissinger
in this connection.

You will note that the Board is of the opinion that the

whole matter should be discussed at the next meeting of the Open Market Investment Committee, which will be held in Washington on June 25.

te-401---4-74"0

I telephoned Governor Crissinger to-day that I thought we should be

given an opportunity to present our statement of the case for distribution among
the governors of the other Federal reserve banks before they gave their views on
Governor Crissinger agreed

the question raised by Governor Harding's letter.

to send a telegram to the other governors to the effect that he had requested us

to file a statement on the importance of carrying on these transactions for
foreign banks and that he would send a copy of this statement for their consideration before submitting their views to the Board.

Our statement

now in the

course of preparation, and I will mail you a copy of it to-morrow.
As this whole question is one in which you are vitally interested, i

should like to have the benefit of your views, if possible before the meeting of
the Open Market Investment Committee.
Faithfully yours,

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



FEDERAL RESERVE BANK
OF NEW YORK

June 19, 1923.

Benj. strong, Esq. ,

0/0 Cragmor Sanitorium,
Colorado springs, Colorado.

Dear Governor strong:

Referring to

Iry

letter of yesterday regarding Boston's withdrawal

from participation in our foreign bank accounts, I am enclosing copy of a
statement which we have prepared and sent to the governors of the other Federal

reserve banks on the importance of our carrying on these transactions for foreign banks. As this whole question will be discussed at the nae t i ng of the
Open Market Investment Committee in Washington on June 25, I would be glad if

you would wire to im at the bank any special comments which you rx:i..y care to

Faithfully yours,

euN
ASE,

J H.

Deputy Governor.

Enc.




STATEMENT BY FEDERAL RESERVE BANK OF NEW YORK OF

REASONS FOR ENTERING INTO RATIONS WITH FOREIGN
CENTRAL BANKS AND OFFERING PARTICIPATIONS IN SUCH
ACCOUNTS TO OTHER FEDERAL RESERVE BANKS

June 19, 1923.

Before the war the policies of central banks were materially influenced
by the course of the principal foreign exchanges.

In or der to exercise a stabiliz-

ing influence upon foreign exchange, the flow of gold and the volume of credit, a
central bang would usually acquire a portfolio of foreign bills on gold countries
when the foreign exchanges were at low levels.

When the foreign exchanges moved

against the central bank it would usually dispose of its holdings of foreign bills
and thereby support its exchange and prevent or retard gold exports.

Sterling

bills were extensively acquired for that purpose and London was the principal centre

for such

operations.

Today this country has assumed an important position in this

regard because of its free gold market and in order that this position may be maintained we believe that the Federal reserve banks should continue to promote close
and cordial relations with the important foreign central banks.
For the purpose of permitting Federal reserve banks to act along the well
established lines indicated above the Federal Reserve Act empowers them to buy bills
abroad, and carry on certain other operations in foreign exchange.

It was, of

course, contemplated that the Federal reserve banks would exercise these powers in
normal times when there were free international movements of gold, and consequently
the Federal reserve banks have not yet used them except to a very limited extent.
However, the purpose for which they were granted is clear and in considering the
means by which they should be exercised, the officers and directors of this bank
have felt that the most effective means is through the establishment of
relations with the central banks of issue.

reciprocal

It is believed that a more effective

control over movements of gold and exchange can be brought about through cooperation between the various central banks and that such a procedure is preferable to one where we would transact business in England, for example, through



2

private banks, and the Bank of England transact its business here through private
banks.

This principle has been recognized as most desirable by the Bank of

England as well as other central banks of issue which are now establishing close
relationships with each other.
Since the war governments have recognized more clearly the important
influence which central banks may exercise on gold movements and the credit volume
and in stabilizing currency.

In recognition of this the Genoa conference proposed

a conference of central banks to be convened by the Bank of England which should
provide f or continued cooperation between the various central banks.

The Treasury

Department and the Federal Reserve Board approved of Governor Strong's attendance
at such a conference if it were held, and presumably in doing so approved the

principle of cooperation between central banks, which was the leading topic on the
agenda f or consideration.

Acting upon this principle we have entered into relations with several
of the more important foreign central banks namely:

Bank of England
Bank of France
Bank of Japan
Bank of Italy
Swiss National Bank
Netherlands Bank
Java Bank
National Bank of Belgium
R ei chsbank

Sveriges Riksbank
Bankovni in Prague

and in many cases have agreed upon the terms which will govern the carrying of accounts, making of investments and transactions in gold.

This policy was

inaugurated six or seven years ago when the first reciprocal agreement with the
Bank of England was arranged.
Owing to the conditions prevailing in international exchange and the
suspension of free gold markets, the Federal Reserve Bank of New York has had




- 3 -

practically no occasion as yet to use its foreign correspondents for the transaction of such foreign exchange operations as were contemplated by the .framers of
the Federal Reserve Act.

However, it has been deemed advisable to establish

these foreign connections against the time when it may be desirable for us to
utilize them.

We cannot expect the foreign central banks to perform f or us in

the future the operations contemplated in the Act, unless we are ready to perform
similar transactions for them at times when conditions make such transactions
desirable or necessary in this country.

Under present conditions with a free gold market here, several of the
foreign central banks have had occasion to conduct in this market the kind of
operations which central banks normally transact abroad, and we have undertaken
the performance f or them in this market of the services which they require.

The

services thus far performed for these banks consist princioally of :

the investment of their funds in short dated obligations such as
banker s bill s or Tr easury certificates and

the earmarking or purchase of gold.
If it is in the public interest of this country that the Federal reserve
banks should at times conduct in foreign countries the operations which the Act
contemplates, in order to exert an influence on the volume of credit in the United
States and on gold movements, and if these operations may be most safely and
satisfactorily transacted through the central banks of foreign countries, we in
the United States cannot expect to enjoy the services of these central banks unless
we are ready, when their public interest requires it, to perform similar services
for them.

Furthermore, as the aim of most, if not all, of the central banks is to

create steadier currency and credit conditions in their respective countries, and
as such steadier conditions in foreign countries are very much in the interest of
American industry, commerce and agriculture, it is therefore to the public interest
in this country that we should perform here, for foreign central banks, such proper



operations as they, in endeavoring to steady their conditions, find it desirable
or necessary to transact through the Federal reserve banks.
of course, be conducted through private banks.

Such operations might,

But, undoubtedly, many foreign

central banks feel much safer and better satisfied to send funds to the United
States to be handled by Federal reserve banks than they would if the funds were to
be handled by private banks; just as we, in turn would feel much safer and better
satisfied, if necessity arose for us to send funds abroad, to entrust them to
foreign central banks.

The development of relations between the Federal reserve banks and
foreign central banks has been given much consideration during the past seven years
by both the Federal Reserve Board and the conferences of governors of Federal reserve banks.

The arrangements have, as a rule, been negotiated by the Federal

Reserve Bank of New York on behalf of all the Federal reserve banks.

But at times,

particularly during the war, the arrangements were undertaken at the instance of the
State Department or the Treasury Department, and ir at least

Bank of Japan, by the Federal Reserve Board itself.

one case, that of the

All of the individual arrange-

ments, as well as the general programme of relationships with foreign central banks,
have received the approval of the Federal Reserve Board; and the project already
referred to for a conference in London during 1922 of representatives of all important central banks, in which an official of a Federal reserve bank should par-

ticipate, received the official endorsement of ?resident Harding.
From the outset it has been the view of the Federal Reserve Bank of New
York that inasmuch as these arrangements were entered into not primarily as a matter
of profit but as an integral part of the functioning of the Federal Reserve System

in the public interest, they should be participated in, as far as practicable, by
all Federal reserve banks.

dith this vie," the records of Governors' conferences

show the other Federal reserve banks were in hey agreement, and the amendment to

Section 14-E of the Act, permitting other Federal reserve banks to participate in



such arrangements, was made at the recommendation of the Federal Reserve Board.
While the Federal Reserve 3ank of New York has offered participation in these arrangements to all other Federal reserve banks any such participation has been entirely voluntary on their part.

There has been no intention or desire on the part

of the New York bank to urge upon any other reserve bank participation in business
which because of the largeness of the risk, the smallness of the commission, or for
any other reason such other bank felt unwilling, unjustified or uncomfortable in
assuming.

The Federal Reserve Bank of New York has never felt that the profit to
be derived from transactions with foreign central banks was a consideration in entering into such relationships.

In fact, in the arrangement with the Bank of

England and some of the other earlier arrangements it was provided that all transactions, including the guaranteeing of bills purchased, should be undertaken by the
respective banks without any charge whatever except for out-of-pocket expenses.
The later change to a commission basis for guaranteeing bills and agreeing at any
time to purchase Treasury certificates, was due not to the desire of the Federal
reserve banks to derive an income from these transactions, but to the disinclination which some of the foreign central banks felt at keeping substantial balances
with the Federal reserve banks without interest.

The adoption of a scale of

commissions accompanied by reduced balances was devised to meet their views.
The risk involved in guaranteeing bills which already have ti,o banking
names is obviously almost neg14,ible.

But in the opinion of the Federal Reserve

Bank of New York, whether or not these transactions are sufficiently productive of
income for the risks involved should be given little weight in considering the value
of our relationships with foreign central banks.

These relationships should be

considered now, as they always hitherto have been considered, on the basis of their
broader value to the Federal Reserve System and to the public interests which are
committed to it.



FEDERAL RESERVE BANK
OF NEW YORK
or.

Open Market Investment Committee

June 19, 1923.

Dear Governor:

Referring to my letter to Governor Crissinger under date of
June 11, accompanied by a copy of the letter written by Governor Norris,

you may be interested to know that on Friday, the 15th Dr. Miller called
me up and stated that the letters had been turned over to him, and that
while the Board felt that they had all the power necessary to carry out
the program suggested, he indicated that he felt that nothing was to be
gained by a series of letter writing.

To this staiement

I very cor-

dially acquiesced.

Yesterday I received a letter from Governor Crissinger, copy
of which is enclosed.

I am strongly inclined to let the record stand

and not have the subject reopened at the conference to be held in Washington on Monday, June 25.

.

Very cordially yours,

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




July 3, 1923.

Dear Governor Strong:

At the request of M-. Cse, I am enclosing the minutes
of the meetings of the Adviscvy Committee of Feoeral

Governors, held in

liashington on June 25 wed 25.

eserve Bank

be thought you

might be interested in looking them over to see what is trenspiring.
Mr. Case has been home under the weather for a fee days but expects
to get around Again Thursday.

He had an attack of poison ivy,

nothing serious, but very painful.
We are all so happy to learn of the splendid strides you
are making and are looking forward to having you back eith us very
soon.

All send kindest regards.
Sincerely yours,

Mr. 'Benjamin Strong,
Cragmor Sanitorium,
Colorado Springs, Colcrado.

144i4:04.0.1.

Eno.




FEDERAL RESERVE BANK
OF NEW YORK
July 7, 1923.

Dear Governor:

I was laid up for a few days with a bad attack of ivy poisoning which
necessitated my keeping pretty quiet.

I asked Dudley Barrows to send you a

copy of the minutes of the recent meeting of the open market investment committee,
which when in session resolved itself into a meeting of the advisory committee
of Governors.

The minutes will give you the unanimous views of the six Governors

and two Chairmen who attended the meeting, as well as the views of the Board,
dealing with the par collection matter.

There is to be held on Monday in

Chicago a meeting of the standing committee on collections to arrange for the
method of handling items endorsed by non-par remitting banks.
You have heard of the Board's action regarding the joint Cuban agency
of Boston and Atlanta.

I think Mr. Jay either wrote or wired you following our

last interview with Mitchell of the City Bank, that he agreed that if this
application was granted in this fashion he had no comments or suggestions of any
character to make to us.

He understood our position thoroughly and said that

so far as he was concerned he fully recognized that we had done everything possible
to prevent any Federal reserve bank from establishing its own agency in a foreign
country, the principle to which he was unalterably opposed.
Governor Harding did not get far in what I regard as an attempt on his

part to weaken the interest of the other Federal reserve banks in our arrangement
with foreign central banks.

After getting the memorandum we sent the other banks,

they all wrote to Governor Crissinger stating that they believed these arrangements were desirable and wanted to participate.

St. Louis, however, felt that

they should receive further particulars regarding the investment, to which
suggestion I cordially acquiesced




and agreed to send complete information regarding

_RVE BANK OF NEW YORK

2

Governor Stmlg

July 7, 1923.

the investments made for foreign banks to all of the participating banks.

I

enclose a copy of my letter to the other banks in this regard, and also a copy of
the report of the open market investment committee as rendered on June 25.

You

will observe that the total remaining investment in government securities is but
$50 millions in the System, distributed among eight banks, four banks, namely,
New York, Richmond, Atlanta and Dallas, being entirely out of any government paper
whatever.

I am glad to hear that you are continuing to do well and increasing
your sun treatment.
you.

I certainly hope everything will continue to go well with

Our directors have extended Harrison's vacation to September first with

full pay, but the Federal Reserve Board approved full pay to July 15 only, a
period of six months, and half pay from that point on.
all he

has

It seems a pity after

done for the System that the Beard did not take a broader view.

Sailer started off on his European trip today to be gone for five weeks, so
the senior ofricers have narrowed down to Mr. Jay, Mr. Kenzel and myself.
You have doubtless observed the increase in the London bank rata from
3 to 4 per cent.

Things are very comfortable here in our market.

There is

always a little window dressing toward the end of June and the end of December.
We had a bit of that to deal with a week or so ago.

Fortunately, the Treasury

was buying substantial amounts of government securities for retirement, which
enabled us to. pick up the floating supply and keep the government security
market fairly stable.

cordially your

,

AVery

Mr. Benj. Strong,
Cragmor Sanatorium,
Colorado Springs, Colorado.
JBC.NA
encs.




FEDERAL RESERVE BANK
OF NEW YORK
July 11, 1923.

Dear Governor:

It occurs to me that yau may be interested in looking over a
comparison of the Government security holdings of the Federal Reserve banks
as at the close of business July 3, 1923, with various other periods during
the past year.
You will note that the free investments in Government securities
are down to $53,000,000., Miscellaneous holdings,covering various funds,
are $24,000,000., and Sales Contracts $16,000,000., the aggregate of the
three amounting to but $94,000,000.
The last sheet makes a comparison of the items comprising the
earning assets of the System, July 3, 1923 and April 4, 1923.

The in-

teresting comparison to be made there is that there has been a reduction of
$204,000,000. in holdings of acceptances and Government securities, and an

increase in direct borrowings of $234,000,000., so that while the total
earning assets in the System are up to $1,223,000,000., 75 per cent or more
is in the form of direct loans to member banks.

This, I thin

in a much better position if it should seem desirable this Autumn to recommend an increase in our discount rate.

Glad to hear of your continued improvement.
Very truly your
/ft,

Benjamin Strong, Esq.,

 Cragmor Sanatorium,
http://fraser.stlouisfed.org/
Colorado SprinEs. Colorado.
Federal Reserve Bank of St. Louis

COMPARISON OF THE GOVERNMENT SECURITY HOLDINGS

BY MATURITIES OF ALL RESERVE BANKS COMBINED AS OF
JUNE 14 1922 APRIL 4 MAY 16 JUNE 2 AND my 3 1923

* Holdings on
June 141_1922

** Holdings on
April 4,_1923

*** Holdings on
May 16, 1923

Certificates and Victory
Notes matured 1922

Victory Notes,

5/20/23

$323,513,000

Holdings on

July 3, 1923

-.0.

-0.*

17,350

17,350

.10»

Holdings on
June 27, 1923

-0,

-0-

46,385,500

-o-

...0.-

-0-

-0-

15, 1923

-O..,

-,0.-

1,535,000

-o-

-0-

Sept. 15, 1923

es0,-

35.953,500

230,000

15, 1923

-0-

34,011,000

31,909,500

March 15, 1924

-00.

2,062,500

1,967,000

321,500

346,500

Treasury Notes

1.:20:2.2A00

11750j500

110*6449600
---......----

65,883,100

52,823,100

$490,498,100

$189,594,850

$146,283,450

$66,230,600

$53,296,600

39,082,910

31,979,060

24,859,580

24,391,630

March 15, 1923
Julie

Dec.

T OTAL
Misc. Gov't Bonds

45,792,000

26,000

127,030

-0-

_

Pittman Act Certificates

75,500,000

-o-

-0-,

wes Contracts

--1212.8-11.75.2

1044714350

10,626,800

42,949,950

16,976,630

AGGREGATE

$629,774,850

$239,149,110

$188,889,310

$134,040,14

$94,664,860




* Peak of Government security holdings
** Date when new Committee was organized

*** Figures used at meeting held at Washington, May 23, 1923

GOVERNMENT SECURITY HOLDINGS OF FEDERAL RESERVE BANKS (EXCLUSIVE OF SALES CONTRACTS)
AS REPORTED TO THE OPEN MARKET INVESTMENT COMMITTEE
AT THE CLOSE OF BUSINESS JULY 3 1

Boston

New York

Philadelphia

Sept. 15 1923 - 4-6

-0-

-o-

-o-

Dec.

-0-

-0-

-0-

15, 1923 - 4%

March 15, 1924 - 44%

Cleveland
$

127,000

Richmond

Chicago

St. Louis

Dallas

San Francisco

-o-

-o-

-0-

-0-

-0-

Minneapolis Kansas City

-0-

Total

-0321,500

-o-

-0-

-0-

-o-

-o-

-0_

-0-

-0-

-o-

-0-

Atlanta

-o-

-o-

-0-

-o-

-c-

-o-

-o- -0-

-o-

-25,000

-0-

-o-

6,000

7,000

-0-

10,000

2,000

-0-

506,000

5,792,300

-0-

-0-

10,986,400

-0-

-o-

11,308,700

3,017,000

-0.,

-0-

3,033,800#

-0-

-o-

5,064,100

-o-

-0-

-0-

2,152,400

-0-

4

127,000

-o346,500

lallIEL.WIE
5i%

1,100,000

-0-

-0.4

6,354,500

-0-

sept.15, 1924 - 50

1,002,000

-0-

-0-

2,337,000

-0-

-0-

-0-

920,600

-0-

3,685,200

-0-

-0-

-0-

-.0...

8,100

-0-

10,607,500

-0-

June 15, 1924 -

March 15,1925 -

44%

Dec.

15,1925 - 4 3/8%

June

15,1925 -

4i%

-0-

-0.-

March 15,1926 - 4i%

....0-

-0-

Sept. 15,1926 - 46

-0-

-0-

-0-

.March 15,1927 - 4%

-0-

-o-

-G.-.

-0...

-0-0-

-0.-

Dec.

15,1927 -

4i%

..0.-

2,525,000

82,300

-0-

693,100

-0-

-o-

-C-

-0-

1,018,300

238,900

218,500

-o-

-0-

-0.

-0-

16,800

-o-

-o-

-o-

1,063,400

-o-

-o-

-o-

-0-

-o-

-o-

-0-

-0-

-.0...

-0-

-0-

.-Co-

-0.-

59.000

-0-

-0-

-0-

49,483,200
$1,832,300
-0-

41,100,600

343,200
..0.-

T OT AL

43,030,700

Miscellaneous

529,000

1.148.750

549,300

918,400

1.34000

218 410

4,425.600

6,150000

Grand Total

$3,559,700

$1,148,750

$17,367,000

$10,401,600

$1,340,900

$218,430

$6,257,900

$7,250,600




416,817,700

4,525,000 11,992,500
-0-

-0-

-0-

4,660,400

8,011,400

1,809,200

-0-

4 800

--0-

1.-1-_

4760,900 411,085,800

-0-

49,185,400 453,296,600

23

781)1522,

1.779.500

$7,310,800 $11,867,650

$1,779,500

6.549.900

-0,

271.800

24.391_.630

$9,185,400 07,688,230

14,

EARNING ASSETS OF FEDERAL RESERVE BANKS AT awn OF BUSINESS JULY 3, 1923
AS =PARED MTH HOLDINGS AT THE CLOSE OF BUSINESS APRIL 4 1923

Boston

Bills discounted

- April 4
July

3

Net change

$47,354
55,207

$210,603
259,723

7,853+

Acceptances Purchased - April 4
July 3
Net change

Government Securities

New York

17,065
19,166
2,101+

April 4
July

3

10,137
3,832

1'

Net change




$60,551
77,983

April 4
July

3

74,556
78,205
3,649+

Cleveland

Richmond

438,731
86,535

452,063
65,676

Atlanta
$20,665
44,125

Chicago,

4112,22
91,023

St. Louis
$28,028
55,779

Minneapolis Kansas City
29,545

49,120+

17,432+

47,804+

13,613+

23,460+

21,179.1

27,751+

9,079+

27,462
40,101

28,169
19,310

51,506
25,103

1,026
2,253

26,117
8,144

32,696
44,144

12,455
5,979

2,275

26,403..

1,227+

17,973-

11,448+

21,346
10,402

1,341
1,341

2,542

23,870

220

43,508
11,217

2,322-.

32,291-

16,619-

12,639+

18,826
4,827

8,859-

25,417
17,381

10,944.

13,999..

Net change

Total Earning Assets

Phi..__,L.adel.p...L_Iia

256,891
304,651
47,760+

114,137
114,674
537+

111,583
122,040
10,457+

54,430
69,270
14,840+

49,324
52,489
3,165+

188,406
146,384

42,022-

-0-

64,353
69,009

4,656+

25,248+

225
26

199-

6,476-

7,251.

$28,157
53,405

15,135
13,377

1,758-

37,876
42,922
5,046+

37,906
13,088

24,018-

66,288
67,319
1,031+

Dallas San Francisco
$19,533
33,935

Total

$ 695,271
$56,918 $20,466
76,928
92,064

14,402+

20,010+

234,593+

20,130
12,071

40,753
22,615

259,879
198,912

8,059-

11,504
1,779

9,725-

51,167
47,785

3,382

18,138..

60,967-

27,617
9,186

239,149

18,431..

144,448-

125,288
108,729

16,559-

94,701

1,194,299
1,223,477
29,178+

2,275-

FEDERAL RESERVE BANK
OF N E W YORK
July 23, 1923.

Dear Governor:

We are running into a rather dull midsummer period when a good many of
our important bankers are away.

While it is a fair statement that matters here at

the bank are fairly quiet, there is, of course, a good deal of grist continually
going through the mill which takes quite a bit of time and attention.
I am glad to observe from your notes of July 9 and 11 that you are continuing to improve and that your appetite is good, and also that you are enjoying
the gorgeous weather.
With regard to the operations of the Open Market Investment Committee, the
Committee and the Federal Reserve Board are mutually agreed that our portfolios are
low enough, and that no further pressure should be exerted towards disposing of the
remaining small amount of Government securities held.

I fully agree with your views

that in the event of material change in market conditions we should not hesitate to
shift our position and buy again when evidence of pressure is too strong.
I had a very pleasant all day visit last Friday with Mr. Garrard B. Winstoq,
the new Assistant Secretary of the Treasury.
Chicago.

Mr. Winston is a lawyer, and comes from

He is a bully chap, and I am sure we shall have no difficulty in continuing

the very good relationship that exists between this bank and the Treasury.

Winston

impresses me as having a good mind and plenty of background, he is well informed and
I am sure will always be ready to listen to our views on the Treasury program.
CUBA

The Federal Reserve Board has gone ahead and issued their regulations

the subject of Cuban agencies.

I am enclosing with this copy marked X-3779 which is

in the form adopted by the Board at the meeting on June 27;



on

this I procured from

FEDERAL RESERVE BANK OF NEW YORK

Governor Strong

2

7/23/23.

Paul Warburg who got it from Mr. Rue, of the Advisory Council, a copy having been
sent Mr. Rue to obtain the Council's views.
I also

enclose copy of a letter sent me by Mr. Mitchell of the City Bank,

under date of July 17, accompanied by a copy of a cablegram from his man, Durrell,

dated July 16, and a copy of Mitchell's telegram to Wellborn, of Atlanta, dated
July 17.

Mr. Mitchell informed me at that time that he was sending copies of this

correspondence to Governor Crissinger, and in the light of subsequent events I am
rather glad that he dealt with Crissinger.

Mr. Mitchell has furnished me with a

copy of Governor Crissinger's reply, under date of July 19, which is also enclosed.

I took the liberty of talking with Mr. Adelson, of Atlanta, over the telephone about
the importance of their Directors insisting upon an independent banking office rather
than having the office established either with the First of Boston or the National
City of New York.

Adelson said he was strong for this himself, but he did not know

just what the views of his Board would be.

Mitchell is perfectly satisfied that we

have done everything possible in his behalf, and I have been scrupulously careful to

check up on this to make sure that he did not think that me were leaving any stone
unturned in looking after his interests.

S-e-r

RELATIONS OF FEDERAL RESERVE BANKS WITH FOREIGN BANKS OF ISSUE.
During a recent talk which Mr. Jay and I had with Mr. Mitchell on the
subject of Cuba, Mitchell referred to the fact that he had that day turned over some
$5,000,000. to us for the Gzecho SIo,-takian bank and expressed his disapproval of

our competition with member banks.

I told him that I felt sure that he had an

erroneous impression of what we were doing in this regard, and that we would like
to talk this matter out with him at a little later date.

Last Thursday he came

over here at 11 o'clock and stayed until 12:30 when we talked this matter over, and
the benefits accruing to the National City Bank from its membership in the System.
Mr. Jay and I had prepared a very careful resume of the relations between the Federal



7/23/23

Governor Strong

vE BANK OF NEW YORK

Reserve bank and the Foreign Banks of issue and some interesting information as to
the benefits the City Bank derives from its membership.

Instead of sending him the

letter we discussed it in an informal way with Mitchell and let him take it away

He seemed pretty well satisfied except on one point, and that was - in

with him.

buying bankers' bills, at say, 4% to 4 1/8% and then for 1/4% of 1% commission
guaranteeing payment and agreeing to melt them down at any time really amounted to
buying them at 3 3/4% on a demand deposit.

In view of what we have subsequently

learned - that the City Bank buying bills at 4 1/8% for the Foreign Banks correspondents
indorses them for 1/8 of 1% and holding them subject to their correspondents future
orders, they are giving the Foreign Banks as good terms as the Federal Reserve banks.
I shall be glad to have you look over the letter furnished Mitchell and have your
reaction on it.

Crissinger appears to have stirred up a good deal of adverse comment.
Among banking organizations generally the feeling is growing that too much politics is
being injected in the affairs of the Federal Reserve System.

It certainly is a

great pity that this is all too true.
Faithfully yours,

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




4/79'
IL

4,tzeto
dv&Eil
e.,e7z,7

c,,*?

FEDERAL RESERVE BANK
OF N E W YO R K

August 6, 1923.

Dear Governor:
Your night letter of the 5th addressed to Mr. Jay dealing with. the so-

called Claiborne-Adams check

collection plan

was received this morning.

Mr. Jay

is away for the day undertaking to finish up some work which has accumulated, but
as I attended the conference of the Advisory Committee of Governors with the Federal
Reserve Board last week I agreed with him on Friday to write you a little resume
of what has taken place.
During the week beginning July 22 Mr. Claiborne spent several days in
Washington with the Federal Reserve Board discussing a program that would tend to
bring into a closer relationship his committee and the management of the Federal
Reserve System on the subject of check collection.

During the course of his talk

with Messrs. Crissinger and James they apparently developed the happy thought of
having the

Federal Reserve banks buy a certain amount of float, that is by giving

immediate credit and availability for all intra-district checks.
naturally

Claiborne

took to this like a.trout to a fly, and then had the impudence

gest that all banks be allowed to charge exchange on inter-district items.

Messrs.

Crissinger and James apparently thought so well of his suggestion that they sent
to the Governor of each Federal Reserve bank a suggested revision of Regulation J
embodying these ideas (See Exhibit A).

The governors, however, were not advised

of the Board's discussion with Claiborne, or given any idea as to where the plan
originated.

In talking with Governor Crissinger over the telephone during thqt period
I inadvertently learned that Claiborne was in Washington and was to appear before
the Board that day, whereupon I suggested to Crissinger that if the Board wanted to




SERVE BANK OF NEW YORK

Aug. 6, 1923.

Governor Strong

2

obtain the views of the members of the Advisory Committee of Governors on any

plan that Claiborne proposed our services were at its disposal.

.

Meanghile,

at the suggestion of Messrs. Crissinger and James, Claiborne came to New York to
discuss the matter with me, the Board in the meantime having called a meeting
of the Advisory Committee to be held in Washington on Wednesday, August 1.
borne reached here on Friday and I gave up most of the day to him.

Clai-

Monday he

called again, when Jay and I extended him every courtesy,- giving him practically
two days of our time, and called in a few of our bankers to enable him to discuss
his plan with them.

No one here could see any merit in it because it was simply

a rethrashing of old straw, the proposition, as you know, having been up time and
again in the early days of the system and disposed of as being impractical.

The

Advisory Committee met with the Board last Wednesday, and after the Board had given
Messrs. Claiborne and Adams all morning to discuss

their proposal they requested

the Advisory Committee to submit a statement of its views in writing.

A copy of

the report which we made is enclosed ( Exhibit B), to this is appended a statement
for the press given out by the Board Friday, August 3rd, and a complete copy of
the check clearing collection plan submitted by Claiborne.

From our report you

will observe that the committee recommended to the Board that it promptly announce
its rejection of the proposed Plan.

This, however, the Board failed to do, con-

tenting itself with adopting our recommendation that they continue to postpone the
effective date of Regulation J (now suspended) and that the banks discontinue the
use of agents (other than banks) for the purpose of making collections at par on
non-par remitting banks.

The Board then referred to the Federal Advisory

Council for consideration and report at its next meeting in September,Claibornets
proposal and the Committee's report thereon.

This, of course, defers the ruling

of the Board for some six weeks, giving Claiborne and his committee
in which to do a good deal of campaigning.



this period

It is perfectly clear that on its

Vr

ANK OF NEW YORK

3.

Aug. 5, 1925.

Governor Strong

face the plan will appeal to a group of unthoughtful bankers, the same group that
has always clamored for interest on their reserve balances.

In effect, the

Claiborne plan enables the country member banks to practically do away with the
carrying of any real reserve whatever, and materially reduces the actual reserves
of city banks.

Jay and I will confer tomorrow about the program set out in

your telegram.

Personally I doubt the wisdom of a questionnaire to our banks,

it opens up the matter too broadly, I would much prefer to see information
assembled by Federal Reserve banks and furnished to McFadden Committee.

Statis-

ticians of the Federal Reserve Board furnished it with figures estimating that
about 75% of the $600,000,000. of deferred items consist of intra-district checks.
But this proposal of Claiborne's, if adopted, would entirely upset present banking
arrangements,- the large commercial concerns could merely open twelve accounts,
one in each district, and their deposits would then consist solely of intra-district
This would also make it possible for member banks in one district to

checks.

send checks payable in another Federal Reserve district to some correspondent bank

in

that district so that in practice the major part of all check transactions

might ultimately be of an intra-district character.

One thing is certain, if the

plan were adopted it would certainly sew up the system with a permanent investment
of anywhere from $400,000,000. to $600,000,000. in"frozen assets."

Harding has written Crissinger raising the question as to the legality of
the Claiborne-Adams scheme.

We have a somewhat different view from Harding as to

the wisdom of making a fight on the ground of legality.

I am enclosing our

correspondence with him dated August 2 - 5 inclusive.
From the foregoing I think you will agree that every consideration has
been shown Claiborne and his committee, and that no final decision will be reached
until the fullest possible examination of his plan is completed.

I believe the

plan is wholly impossible, and that the data assembled will be conclusive and




./.7.7S ERVE BANK OF NEW YORK

Gvernor Strong

Aug. 6, 1923.

.

and convincing to the bankers, the public and I hope to Claiborne's committee.

This occasion is being used to make every effort to end the par check collection
controversy, with the view of bringing about an enlarged membership of desirable
state banks.

Cordially yours,

/la
Benjamin Strong, Esq.,
Cragmor Sanatorium,
Colorado Springs,
Colorado.




FEDERAL RESERVE BANK
OF NEW YO R K
September 28, 1923.

Dear Governor Strong:

Mr. Jay has been writing you from time to time during my absence on vacation
keeping you informed on current events.

He is today in Washington discussing with

the Board the future program for dealing with the par clearance matter, and the sub-

Mr. Harrison, as you

ject of the Federal Reserve banks handling non cash items.

know, has been domiciled there for the last few weeks preparing material for the
Board for their use in appearing before the Congressional committee next week.
Shepard

Kenzel is away on vacation, so Mr. Sailer and I are kept pretty busy.

I have just returned from

Morgan sails tomorrow on his one year's leave of absence.

a most enjoyable luncheon tended him by the officers of the bank and a few outside
friends, including Arthur Anderson and Guy Emerson, to wish him God-speed.
BANKERS' CONVENTION

ATLANTIC CITY.

I went down to Atlantic City Wednesday afternoon to spend twenty-four hours
at this convention, particularly for the purpose of sitting in and listening to the
discussions at the open forum dealing with the merits and defects of the Federal Reserve System .

Mr. Platt,of the Board, also came on from Washington.

We were all

delighted and most favorably impressed with the general atmosphere and feeling of
confidence that seemed to prevail with regard to the management and operation of the
System.

I am quite confident that the tide has definitely turned in our favor,

and that the bankers of the country begin to appreciate that this is theirlDartyn
and if they don't watch their step

there is great danger

which may make the System less effective.




of

adverse legislation

I am enclosing with this just a few

ERAL RESERVE BANK OF NEW YORK

2

9/28/23.

Governor Strong

brief comments which appeared today regarding the convention.
TREASURY DEPARTMENT
Garrard Winston, the new Assistant Secretary of the Treasury is "carrying on"
most effectively, and seems to have the situation well in hand.

He has a good mind

and appears to be perfectly reasonable to deal with.

The September 15 issue of Treasury certificates was a great success although
both Mr. Mellon and Mr. Winston seemed to feel that our recommendation of 4 1/4%
for six months was about 1/4% too high.

As we have subsequently purchased, on their

order for various Government agencies, about $40,000,000. of these same certificates
at par and interest, I think their original opinion has been modified.
I had an exchange of letters with Gilbert during August with regard to the outstanding 4% circulation bonds of 1925.

My letter of August 6, and his reply of

August 11 are enclosed for your information.
FOREIGN
pieJay Crane spoke to me this morning about a conversation which he had with Mr.

O'Hara a day or two ago regarding the Nederlandsch Indische Handelsbank, and has
given me a confidential memorandum of his talk as it deals with the subject of the
Java Bank and the retirement of Mr. Zeilinga, its president.

I am enclosing it

herewith.

TAX ON FEDERAL RESERVE NOTES
At the last Governors Conference there was an animated discussion about substituting an interest charge on the uncovered portion of Federal Reserve notes, instead
of paying the Government the balance of our net earnings as a franchise tax.

Gov-

ernor Norris and I were appointed a committee to consider this and report back to the
Governors Conference.

Knowing your great interest in this subject, I am handing you

all the correspondence that has passed between Governor Norris and me.

Harrison

and Mr.




Mason all

approve of the suggested change.

Mr. Jay, Mr.

<AL RESERVE BANK OF NEW YORK

Governor Strong

9/23/25

LETTER TO BOARD FOR MCFADDEN'S COolimITTEE

A short time ago the Federal Reserve Board wrote the various Federal Reserve

bank officials calling their attention to the hearing before McFadden's Committee
on October 2, and reauested these officials to express their individual views on the
questions raised.

After considering the matter carefully I sent off my reply under

date of September 22, and enclose a copy herewith for your lye.

JOU2-e-er-

Mr. Jay has kept me fully informed regarding correspondence he has had with
you on the subject of your health.
is, practically
ber 1.

I am very glad to know that your throat trouble

healed,. and that you anticipate returning to the bank about Novem-

I hope you will return prepared to take it easy during the winter months

and not run the risk of any further breakdown.

I think you will find matters in the

bank in good shape, and the organization functioning smoothly.
Government Bond Department have quieted down somewhat

Things in the

so that we have a little sur-

plus help there which we are trying to place in other parts of the bank.
I am not sure whether you have had sent you copies of the recent "Recommendatione of the Federal Advisory Council to the Federal Reserve Board" of September 17,
so I am including a copy with this.
Looking forward to seeing you back in New York during the next few weeks,
I am,

Faithfully yours,

Benjamin Strong, Esq.,
C/o Mrs. H. P. Davison,
Broadmoor,
Colorado Springs, Colorado.







DOW, JONES

8(

CO.

THE WALL STREET JOURNAL
NEWS BliLiTINI
ELECTRIC PAGE NEWS TICKER
'4 BROAD ST., NEW YORK
Telephone One Bron&-,-.

Friday, September 28, 1923

No. 65

IN AND OUT OF THE BANKS
What promised to be a lively session of the A. B. A.'s

open forum for discussion of merits and defects of the
Federal Reserve system apparently turned out to be a
rather tame affair. Initial praise given the system in the
earlier stage of the convention, as well as the report of
the Economic Policy Commission, seem to have taken the
wind out of the opponents' sails. At the open discussion

there was an array of defenders with impressive arguments to show the great service the system had perfoimed during its nine years of operation. The country
banker who went to Atlantic City to air his grievance of
lost exchange charges must have received cold comfort
from his surroundings.

Local bankers praised the report of the Economic
Policy Commission advocating measures to prevent deterioration of the Federal Reserve Board. They thought
it was the most fearless exposition yet presented of the
dangerous encroachment of politics on the efficiency of
the Federal Reserve system: Criticism as to the mannez
of appointment to the Reserve Board, especially the
elim:nation of banking qualifications and the subordination of the board to the influence of the farming element,
was something that New York- bankers had felt for some
time. Whether the views expressed by the American
Bankers Association will have any weight in Washington
is another matter. It is considered doubtful.
Bankers approve of the-suggestion that the Secretary of the Treasury should not be a member of the Federal Reserve Board. It has been obvious that his duties
in the Treasury Department prevent him from giving the
proper attention to the affairs of the Reserve Board. It
is suggested that his place should be taken by the UnderSecretary of the Treasury, and that the governor should
be chairman of the board.
Presentation of prizes to the winners in the public and
parochial schools in the prize essay competition this year
will be held in the hall of the Chamber of Commerce, October 2, at 11 a. m. The subject of the essay is "The Practice of Thrift; a Test of Character and an Essential Factor in the Devepolment of the Nation." Addresses will be
made by President Irving T. Bush and others.
James P. Warburg, vice president of the International
Acceptance Bank, has returned after three months abroad.

He visited the various banks of England and on the
Continent where the International Acceptance Bank haS
its own stockholding correspondents, and looked into busiWILL NASSAU.
ness and financial conditions.
No. CIS

NEWSPAPOR REVIEW
Federal Reserve Bank of New York, Reports Department, LibrarySentember 28, 1923

Friday

Vol. 4: No. 210

AMERICAN BANKERS ASSOCIATION CONVENTION
Favorable criticism. Craig B. Hazlewood, vice-president of -the Union Trust Company of Chicago, defended the System as the greatest central banking achievement
in history, and outlined under five heads what had been accomplished. (W.S.J.,p.1)
Federal Reserve System.
A resolution reaffirming confidence in the Federal Reserve System and pledging aid in repelling the attacks of those who seek to
destroy its effectiveness was adopted by the national bank division. (J. of C.,
p.8.)
3.

Par clearance. Objections by the country bankers to the Federal Reserve Board's
construction of the law as to par clearances were voiced by George H. Bell of
the Planters Bank and Trust Company, Nashville, Arkansas, who declared that the
Board has to the extent of' its power "energetically inaugurated a par clearance
system with no regard whatever f or the individual opinion of the non-member banks
affected." (W. S. J. p .1 . )
,

4.

Praise f or Federal Reserve System. Although there were a number of mild criticisms against details of operation of the system, the apparently overwhelmingly
favorable sentiment of the convention was expressed by Howard Shepherd who declared that the Federal Reserve Act itself "plays along with the Constitution
of the United States as one of the institutions that the rank and file of this
country should stand by." The convention arose en masse and cheered..(J.of C.,p.2)

FEDERAL RESERVE SYSTEM
5.

i
1

A

Discount rate. The American Banker's Association calls attention to the notable
lack of pyramiding of credit during last year. Overflowing bank reserves do not
necessarily bring over-exploited credit. The latter depends upon the character
of the business situation itself which explains why the Reserve banks rightly
base changes in the bank rate not on theory or general principles, but on visible
signs of' expansion or reduction in the actual use of credit. (Times, Ed., p.6.)

Federal Reserve Board. It has been indicated that Secretary Mellon is in sympathy
with most of the recommendations of the American Bankers Association relative to
the form of re-organization of the Federal Reserve Board. (N.Y. Com.,p.1.)
a

UNITED STATES

t

Doubt of' the further continuance of the coalition in Congress
Agricultural bloc.
known as the "farm bloc" has been expressed by Senator Glass. The Senator declared that Secretary Wallace's criticism of the Federal Reserve Board's
"deflation policy of 1920" was entirely without justification and that he proba(Fin. Amer., p.1.)
'brwould issue a reply.
Agriculture. Plans f or relief of the farmers, including the revival of the United
States Grain Corporation in order to stabilize wheat prices, a reduction of
freight rates on export wheat and flour and a special session of Congress to
enact legislation to aid the farmer, were urged upon President Coolidge yesterday
by a delegation of bankers, farmers and members of Congress in the Ninth Federal
Reserve District. (Times, p.1.)

Federal trade commission. A general movement among trade associations to join in
a demand f or definite amendments to the Federal trade commission act "to obviate
the manifest injustice which has characterized its application" was announced at
the convention of the American Specialty Manufacturers' Association, (J.of C., p.2.
FOREIGN
Germany. Dictatorial power has been vested in the Minister of National Defense,
Dr. Gessler, and a state of siege over all Germany has been proclaimed by
President Ebert as an emergency measure in view of the appointment in Bavaria
of a military dictator, Dr. von Kahr. The Bavarian Government, however, has
given assurances of loyalty to the Berlin Government. (Times, p.1.)

Extension of a loan to Germany by the Allied nations is regarded at the Treasury
as the first practical step toward that c ountry s rehabilitation to follow an
(d.of C., p.1.)
adjustment of the reparations question.



---r-

(cit.tv.A.

tatt)
kik/R.7m t.)

FEDERAL RESERVE BANK
F.
0 F N

EW Yo R

K

alcr

1922

1,1441
October 9, 1923.

ol
Dear Governor:

Acknow3edging your
tter of October 2, I have had Mr. Sailer take up
with Mr. Hounds the question ou raised of having Rounds work up a memorandum as to
a good accounting practice fhat we may make use of in applying the lease cancelation
fund, as,, if and when realized, upon the cost of our new building.
Mr. Rounds
has prepared such a memorandum, which I am handing you herewith.
You will observe
that Rounds goes back to his original idea of "replacement valuation," which is on
tirely sound and was approved, in principle, by the Federal. Reserve Board some two
or three years ago.
he thinks that possibly the best way would be to cover into
the Profit and Loss account any profits on the Equitable Building leases, and then
have our charges for d.%)reciation synchronize with such credits.
We had an all day visit from Governor Crissinger yesterday.
It gave Mr.
Jay and me an opportunity to discuss many current questions with him.
At noon we
had a number of bankers in to luncheon, the conversation being given up pretty much
to the subject of "branch banking."
It seemed to be the general opinion of all
present that we should encourage branch banks within city limits, and discourage the
idea of branch banking on a state wide basis.
During the afternoon we had repre_
sentatives from seven or eight of the discount houses in to meet Governor Crissinger,.
during the course of which they enlightened him a good bit as to the need of having
the Federal Reserve banks ready and willing at all times to render support to the
market.
Later in the afternoon I had all the Controllers and Managers meet Governor
Crissinger for a few moments in your office; the Governor quite warmed up to this-was most cordial--and I am sure the officers were vary appreciative of the opportunity
to meat him.
He seemed to think he had spent a very profitable day with us, and
returned to Washington last night.

I presume that we may hear of your landing in this neck of the woods any
time during the course of the next two weeks.
If you are not careful, it seems to
me as though you may presently be tipping the scales at 200.
Look out

Very cordially yours,

Benjamin Strong, Esq.,
C/o Mrs. H. P. Davison,
Broadmoor, Colorado Springs,
Colorado.




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