View PDF

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

UNITED STATES DEPOSITARY

hi 6ank rif 6alifornia
aable Abbreos:

NatiottallOs.lortation

3ANK-SAN, NCISCO
frilrate
i.c. a

&

SAN FRANCISCO

EDITIONS

BROOMHALL

LIEBER

MOREING S NE._
WESTERN UNION




AUG

4 1913

July 22, 1913

Mr Benj. Strong, Jr.,
C/o Bankers Trust Company
New York, N.Y.
My dear Ben:

I enclose herewith copy of letter
and enclosure referred to therein which I am
sending to

Hon. Robert L. Owen, Senator
Cater Glass, Congressman
Jno, Skelton Williams,Asst Secty of Treasury
W. J. Fowler, Deputy Controller
at their request.

I would thank you for your frank criticism
of my views on the subject.
With kind regards, I remain,

Yours very truly

UNITED STATES DEPOSITARY

br

aink iii(California
National .11

(Table ,A1*brz-go.:

CALBANK-SAN FRANCISCO

eroZ
A B.0

ri atirm

SAN FRANCISCO

.15eZt

, EDITIONS
ROOM HALL

LI EBER

MOREING & NEIL
WESTERN UNION




atk
OCT 1 6 1914

October 10, 1914

Mr Benjamin Strong, Jr.,
C/o Bankers Trust Company
New York, N.Y.
My dear Ben:

If not betraying a confidence, would
you mind telling me what rate was arranged with
the Bank of England or with Ottawa for the American
gold which you are shipping.

In other words, what

rate will they use in order to reduce your shipments
to Sterling.

With very kindest regards, I remain,
Yours very truly

San Francisco, July 22,1913

I submit herewith some thoughts in relation to the
proposed Bankinp; and Currenty bill, written after my visit to
Waehington, and on the theory that those dominating the Democratic party were set in their opinion that the Government
should issue the bank notes (which for some reason they seem
to regard as eloney) and that they were also set in their opinion
that the banking business Should be forcibly taken from the
National Bakers hands and placed in those of a politically

appointed board, one member of which should have banking experience.
I believe it both unwise and unsound that the Government
should assume the reseonsibility of maintaining the gold reserve
against the proposed issue of notes or that it should aESUMO anything more than regulatory powers. The initiative and adminis-

trative features should be left to the banks and the Government
should reserve its -rlestige and credit for its own use in troublesome times, and as a reserve force to aid in restoring stable conditions should unforeseen conditions bring about undue strain on
the bank.
The suggestion in regard to the Treasury acting as the central institution, is made in order to direct thought to the position in which the Government will be placed. I do not believe
that the authorities would adopt such a plan as it would threw
the direct Yesponsibility of th banking business and thc note
issues on the Covernment, yet the proposed elan does place the
Government in a position where its prestige and credit will be
so affected by the ups and downs of .general business and world
conditions that it cannot escape the effect of the responsibil-

ities which will be directly and indirectly ::laced on its shoulders.




Yourc very truly

S.

Ten per cent, of the capital of the National Banking Aseociations
would make a.bank of such size au to give great power and command great
respect inside and outside of the United States - divided amongst twelve
regional asseciations would make them smell institutions even when compared with the capital of the great banks which would be oming to them

One institution with branches could deal with international questions more intelligently than would be possible under the
regional plan. One institution could defend the gold supply mph more

to seAt relief.

intelligently and effectively.

If it is found to be impossible to es-

tablish one bank at Voashington with branches at the points Where region-

al associations are to be established, I would respectfully suggest that
the controlling institution oentemplated under the regional plan, be run
by two 'Beards of Directors - the bankers board to have the powers of administration and initiative and the government board with power of supervision and veto; and that this institution issue the currency instead
of the government.

The government board's power will give it absolute

control - the credit of the government will be held in reserve and free
from criticism in emergencies. If this 13 Impossible and the theory is
to keep the government in the banking business, in fact to put it into

the banking business to a greater extent than it over has boon and to
place the government in a position where its credit and the credit of
its banking institutions must stand of fall together then it would be
more intelligent to have the Treasury of the United States act as the
greet ┬░antral institution with its Sub-Treasuries as branches, selecting

bankers of the several localities to act as advisory committees.

If the

banking busineee is to be taken out of the bankers hands and placed in
the hands of a politically appointed board we believe that more sonfidonee would be engendered by having it taken over by the Treasury Department and ye know that it would be more efficiently handled by the Treasury .epartment with Sub-Treasuries as branches, than it could be under
the proposed regional plan.
The dividends proposed on page 11 of the .;enate bill should be made
six per cent - five per cent is a reasonable return for the banks in the
large centers but is unfair to the great mass of banks which are located




in the so-called country district.
Tt is unfair to say to the National banks that they must join the
regional aeeoeiations and. to the State banks iand Trust Companies that
they may join: Why not say that the National banks joining the aseociations would have the right to do all of the several classes of legitimate
banking businese which is now done by the State banks, segregating each
class of businese naming the reserve required for each class - beaks
of each department to be kept separate - public reports to be made showing the exact condition of each department, State banks are doing departmental business - commercial and cavinas; Trust Companies are doina
commercial, trust and savings; National banks are now do1n a large
savings b' Ines and why should State banks and Trust Companies be placed

in a bettor position to compete for what As recognized as legitimate
banking business, than are the'Dational banks. lake your law so that
all this business can be done in one room under one supervision and you
will have a stampede of both National and State banks into your associations. At present the National banks, in order to keep their clients
and to meet the competition of the State banks and Trust Companies, are
obliged to become interested through their stockholders or directors in
Trust and Savings banks organized under the 3tate laws and under State
supervision, often with the same board OD directors and officers. Zhy
Is it not better from a moral and from a practical standpoint to have
this busines: done by one institution under one set of laws and under
lational supervision, than to have part of it done under the State laws,
part under National - part under State supervision and pert under National. If the kind of business done by the State banks and Trupt Companies
is not legitimate banking business, why should they be accepted as members af the regional aeaociations.
The anetions on page 90 of the Senate Bill, referring to the power

to accept drafts or bills of exchange and the right of the Pederal Reserve bank to discount such acceataaceo should be broadened so as to include transactions growing out of the movement of goods inside of the
United States. It seems ridiculous that a box of salmon moving to
South Africa or 'ana point outside of the United States should be virtually cash the minute the bill of lading is in the bankers hands and




-2_

hat he same box of salmon bound for any port of the Uniteel States means

a lockup of the bank's funds until it arrives at its destination and is
delivered to the purchaser. On Page 19 of Jenate -ill, you allow the
Federal Reserve Bank to discount notes and bills of exchange arising out

of commercial transtiona but on Page 20, a member bank can only accept drfts and bills of exchange growing out of transact ins involving
the 4912ortation or exportation of goods, and I am unable to find any

authority to accept drafts or bills of exchange arising out of commercial
transactions within the United ;Antes. Acceptances should be allowed
to the full amount of paid-up capital instead of to extent of one-half
of paid-up capital.
On Page 22 Senate 3111, suggest that you strike out that :art of
line 6 reading "payable in foreign count-ies."
Suggest that you strike out the clause on Page 23 '2,enatc Jill, reLating to the payment of interest on government deposits. All of the
lurplus profits go to the government and the bank should not pay Interest
)n an deposits.

On Page 24, line 0 - Senate 31.11 - I sugaest striking out the words
'purport on their faces to" particularly if the notes are to be issued

I also suggest that the limit
by the government and not by the bank.
3f 500,000,000. be stricken out. The tax should be based on the amount
of reserve held and not on amount of notes out.
The number of examinations provideCL for are excessive and unncoe, sary. Two examinations; are sufficient for well conducted banks;
and additional examinations should only be imposed when it is found

that banks are being improperly run. The incentive of escaping extra
examinations will help to inOtce all bank officers to run their banks




In a prt,eor manner.
The banks should be allowed to keep their reserves with any regional
reserve bank that is convonie.xit to themifrom an exchange standpoint, or

any branch of any central institution if the Treasury Department with its
3ub-Treasuries should replace the proposed regional association plan.




-3-




June 13, 1921.

PNRSONAL

My. dear Mr. Frew:

be have only ithin the last few reeks been able to conclude the

final accounting Of the expenses of the various Liberty loans, and determine
to what extent, if any, expenditures made by the organization could not be
reimbursed by the Treasury under existing law, or rules of the Department.

be find that the total amount of such items that cannot be reimbursed is
*2,555.97.

Of this sum, the Federal Reserve Bank is able to absorb $2,2?9.74.

rhe remainder, ,$06.23, I have paid personally.
The Liberty Loan Committee passed a resolution, agreeing personally

to asoume certain charees, up to a limited amount, which as I recall was $1,000.

If the members of the committee care to pay their respective shares of this sum,
the amount of each committeeman's proportion will be

..2.75-55.

Had these operations been conducted since the passage of the Volstead

Act, it would not have been necessary to as the committee to make any contribu-

tion.
Tourss very truly,

salter E. Frew, Esq.,
13 William St.,
New York, N. Y.



if

gr,cr4,

05-te actrxtVxdrattv '4;6 auk,
NEW YORK.

'JUN

5 1921

June 14,121.

WALTER E. FREW, Pacsroewr.

Yy dear Gov. Strong:

Referring to your favor of
the 13th inst. it gives me pleasure to en
close to you my check for

23.55-

I think I

had my share of this.

Yours sincerely,

Rom. Benjamin Strong,
Federal Reserve Bank,
New York City.







June 15, 1921.

My dear Ur. ?re:
thank you for the rem1tt4.ince of t2.3.55

enclosed in your favor of June
Yours very truly,

Walter E. Frew,
15 William St.,
Ne% fon, A. Y.

.1;]sq.,







PRINCETON BANK
PRINCETON, N.J.

May 16, 1913.

Personal

Mr. Benjamin Strong, Jr.,
c/o Bankers Trust Co.,

New York, N. Y.
My dear Mr. Strong:

I have had hard w k to get
in touch with Mr. Willis and o

y succeeded

in doing so late thismornin .
arranged to have him meet

I have

at the St.

Regis, Fifth Ave. & 55th S. at 1.15 tomorrow, Saturday.

I sha 1 hope to see

you and Mr. Vanderlip at that time.

There

is just a possibility t at I may be able
to get in to your offiie for a few miTates
late this afternoon a
have a word with you

Your

I should like to
efore the lunch.

faithfully

POSTAL TELEGRAPH-CABLE COMPANY

NIGHT LETTERGRAM

THE POSTAL TELEGRAOH-CABLE COMPANY ,INCORPORATED) TRANSMITS AND DELIVLRS THIS NIGHT LETTERGRAM SUBJECT TO THE
CLARENCE H. MACKAY, PRESIDENT
TERMS AND CONDITIONS PRINTED ON THE BACK OF THIS BLANK.

!VERA 611JIN IBER

t,

COMPETITIVE

PROGRESSIVE

4478

16AC fq

49 NL

AtlanticCity NJ June 19-13

B Strong Jr,
Bankers Trust Co,

Confer with

NewYork.

Vanderlip and if possible

Till's friday

arrange for

conference

with

afternoon or evening:. I telephoned him today that I would

arrange meeting but am unable to cio

so. Arthur Reynold, Perrin and

Talbot reach NewYork at noon with copies of .answers to questions

of Senate Sub Committee.




Edw. L. Howe.

4145am

1t

alt
t

I

alt

POSTAL TELEGRAPH-CABLE COMPANY COON THE COMMERCIAL CABLE COMPANY

THE GREATEST TELEGRAPH AND CABLE SYSTEM IN THE WORLD.

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

THE POSTAL TELEGRAPH-CABLE COMPANY (INCORPORATED)

TRANSMITS AND DELIVERS THE WITHIN NIGHT LETTERGRAM SUBJECT TO THE FOLLOWING TERMS AND CONDITIONS:
The Company will receive, not later than midnight, NIGHT LETTERGRAMS, written in plain English, to be transmitted only for delivery not earlier

than the morning of the next ensuing business day, at rates as follows: The standard day rate for a ten-word day message shall be charged fqr the transmission
of a NIGHT LETTERGRAM containing fifty words or less, and one-fifth of the standard day rate for a ten-word day message shall be charged for each additional
ten words or less in such NIGHT LETTERGRAM.
To guard against mistakes or delays,
the sender of a NIGHT LETTERGRAM should order it REPEATED, that is,
telegraphed back to the originating office
for comparison. For this, one-half the unrepeated NIGHT LETTERGRAM rate is charged in addition. Unless otherwise indicated on the face of this blank, THIS IS

AN UNREPEATED NIGHT LETTERGRAM, AND IS PAID FOR, OR AGREED TO BE PAID FOR, AS SUCH, in consideration whereof it is agreed between the sender
of the NIGHT LETTERGRAM 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 UNREPEATED NIGHT LETTERGRAM, beyond
the amount received for sending the same; nor for mistakes qr delays in the transmission or delivery, or for non-delivery of any' REPEATED NIGHT LETTERGRAM,
beyond fifty times the sum received for sending the same, UNLESS SPECIALLY VALUED AND INSURED (in which case, conditions 3 to 8, given below, shall apply to
such repeated message); nor in any ease for delays arising from unavoidable interruption in the ,mriting of its lines; nor for errors in obscure Night Lettergrams.
2. Correctness in the transmission of NIGHT LETTERGRAMS,.to any point on the lines of the Company can be INSURED by contract in writing, stating agreed
amount of risk, and payment of premium thereon, at the following ;ates, in addition to the usual charge for REPEATED NIGHT LETTERGRAMS, viz.: one per cent.
for any distance not exceeding 1,000 miles and twO per cent. for any greater distance.
3. This Cornpany is hereby made the agent of the sender, without liability, to forward this NIGHT LETTERGRAM over the lines of any other company when
necessary to reach its destination.
4. NIGHT LETTERGRAMS 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. Beyo.nd: these limits the Company does not undertake to make delivery, but will, without liability, at the sender's request, as his
agent and at his expense, endeavor to contract for him for such delivery at a reasonable Price.
5. No responsibility attaches to this Company concerning NIGHT LETTERGRAMS until the same are accepted at one of its transmitting offices, and if such a
NIGHT LETTERGRAM is sent to such office by one of the Company's messengers, the latter acts for that purpose as the agent of the sender.
6.

The Company will not be liable for damages or statutory penalties in any case where the claim is not presented in writing within thirty days after the

NIGHT LETTERGRAM is filed with the Company for transmission.
In further consideration of the reduced rate for this special `WIGHT LETTERGRAM" service, the following special terms are hereby agreed to:
NIGHT LETTERGRAMS 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 LETTERGRAM at destination, postage prepaid.
NIGHT LETTERGRAMS shall be written in plain English. 'Cipher or code language is not permitted.
7. The above terms and conditions shall be binding upon the receiver as well as 'the sender of this NIGHT LETTERGRAM.
8. No employee of the Company is authorized' to vary the foregoing.
This is an UNREPEATED NIGHT LETTERGRAM and is transmitted and delivered by request of the sender under the conditions named above. Errors can be
guarded against only by repeating the NIGHT LETTERGRAM back to the sending station for comparison.
CLARENCE H. MACKAY, PRESIDENT
CHARLES P. BRUCH, THIRD VICE-PREST.
EDWARD J. NALLY, VICE-PREST. AND GENERAL MANAGER
CHARLES C. ADAMS, SECOND VICE-PREST.




POSTAL TELEGRAPH-FASTEST SERVICE IN THE WORO




4-2 71..71,7

Extracts referring to the action of the Federal Reserve Board in
banning foreign securities.
From an Address delivered by President Elliott C. McDougal at a special meeting of
Tha Association of The State Banks of the State of New York, held at the Onondaga Hotel,
Syracuse, N. Y., December 5, 1916.

**###,,,A********

These foreign governments are not asking from us permanent capital.
They are
asking only credit for goods purchased from us at very profitable prices.
Messrs. J. P.
Morgan & Company tell us that they expected to pay, when due, the treasury bills recently offered and withdrawn.
These credits are perfectly legitimate and are just as liquid
in theory and practice as the great bulk of the credits granted to its customers by any
commercial bank.
You bankers know that the notes given by your customers which you hold
are liquid not in the sense that as a matter of daily practice they are paid when due only a small proportion of them is so paid - but because, if loans are carefully made, payment can be enforced if necessary.
Not only is it true that we do not need gold.
We are better off without it.
At present, there is too mudh,inflation of home credit, due partly to our unusual imports
of gold, and partly to the expansion inseparable from the inauguration of the Federal Reserve System and the cheap credits which it induced.
Nothing is more dangerous than
credit which is too cheap.
With or without this unusual expansion, which is beyond reasonable bounds, there
will be a period of readjustment after the war.
Nifiiilsoll+thiewbititairitietteett4-4.v4-1-1.-be.
How violent that readjustment will be, no one knows.
No one condition will do more to
stabilize credits at that time and to prevent violent fluctuations in foreign exchange with
consequent inevitable disturbance to domestic business than an adequate supply of foreign
treasury bills or other short time securities in the hands of our bankers.
There is
credit enough in this country for all of our legitimate needs, including even the enormous
needs of our railroads, for credits to all foreign purchasers of our goods, and for a reasonable amount of credit in addition.
In fact, there is an over-supply of credit.
Contraction of credit is needed to-day.
For these reasons, if
We are blind to that need.
for no other, absorption of part of this over-supply by a round amount of foreign .credits
would he not a danger, but a safeguard.

What I have said is unimportant as compared with a real danger which faces us,
about which the Federal Reserve Board says nothing.
That danger arises from the speculation now under way in this country, plus the desire of excessive quick and easy profits in
legitimate business, both encouraged by an over-supply of credit; and the growing discontent with normal profits and hard work. The country has gone crazy.
It would be better
for us to supply even permanent capital for legitimate purposes to foreign countries than
to encourage speculation and inflation at home.
In our amateurish, theoretical discussions not only have we considered only one
very small part of a complete whole, but have been blind to a real danger.
As President
Cleveland once said, - "It is a condition and not a theory that confronts us." Our home
expansion to-day is most dangerous.
Unless checked, it promises greater dangers.
This
actual danger, rather than a theoretical one, should command the attention of bankers today.




THE ASSOCIATION OF THE STATE BANKS OF THE STATE OF NEV YORK

Buffalo, N. Y.,

February 9th, 1917.
Office of the President.

Deer Sir:

A country banker in

9

neighboring village has just shown me

a letter from the Federal Reserve Bank

of New York to a notary pub-

lic in that village, which indicates that it is the purpose of the
Federal Reserve Bank. of New York to collect checks upon state banks

by express.

from the

The letter asked the notary public if he would receive

express company and protest any such checks which were

dishonored.

The country banker told me that he was perfectly wil-

ling to remit to the Federal Reserve nank at from one-tenth of one
per cent. to one-twentieth of one percent.

depending on the size

of the items, but that he saw no good reason why he should do busia
nese for nothing, nor why he should be forced to do so by a threat
thnt otherwise checks upon his bank would be collected by express.
Providing country banks are willing to remit at such reasonable rates, any such

arrangement

as that proposed in the above

mentioned circular savors of coercion.
that

You doubtless remember

not long ago, it was proposed to present through the post

office department check upon state harks and trust companies although
the charges of

the post office

department would hove been much higher

than the charges of the very state banks and trust companies upon
which the checks were drawn.



That, if I remember correctly, was

the suggestion of the Federal Reserve Board at Washington.

'or

reasons best known to themselves, the authorities in Weshington
did not see fit to uses that method of coercion.

Apparently,

the present action is the action of the Federal Reserve Bank of
New York.

The Directors of the Federal Reserve Bank of New York

are estimable gentlemen.

Were

not

the evidence before us, it

would be almost inconceivable that they should

approve of such

action.
State banks and trust companies simply ask to be left
alone.

They have no desire to interfere with the eederal

they ask that it shall not improperly interfere with

System.
them.

Reserve

The subject of collection

charges is a vital one to

The backers of the Federal Reserve

System have

repeatedly been

guilty of attempted coercion, and in more ways than have
on the surface or cou1d be proven in acourt of law.
attack upon our state

time.

banking system has

them.

appeared

A systematic

been under way for some

So far as is possi-

We are compelled to defend ourselves.

ble, state banks and trust companies should forget their differ-

ences and stand

be beaten in

together

detail.

against these unfair

The average state banker is asleep.

we stand, divided we fall."
tional banks.
ation exists..

with the

It is net
The

attacks or they may
"United

St te banks have no quarrel with na-

the fault of either that the present situ-

fault lies

with the Federal Reserve Board and

Comptroller of the Currency.

bank, if left to themselves, would live
mony as would two state banks.

A state

together

bankand a national
in the s'me har-

It is not their fault that they

ere not allowed to do so.

am not in favor of a nation-wide system of state institutions, which would be a rival of the Federal Reserve System. State




-3.
banks are not jealous of the Federal Reserve System.
perfectly content to allow it to become

They are

the dominant system in

this country but not the only system. If every state has its own
independent system, each can be adjusted to suit the business requirements of its own locality. Without in any way interfering
with the Federal Reserve System, state systems can take care of
much business for which the Federal Reserve System is not so well
equipped.

It is hardly possible to design a national system which

Al meet all of the needs of all localities.
fornia may not suit Massachusetts.

What will Suit Cali-

Were it possible to unite all

stnte institutions in one nation-wide system, it mieht be just as

unwieldy and as

unrosponeive in local business meeds as is the Fed-

eral Reserve System.

Were the wish of the Federal Reserve8oard accomplished,

were all the banks in this coentry,
bers of

both state and national, mem-

the Federal Reserve System, we should have a monopoly in

banking which wculd be harmful rather than helpful.

With monopoly

probably would come arbitrary methods and more coercion.
be remembered that even the very best men with the

It must

very best inten-

tions ascome arbitrary in the absence of all competition.
I will be extremely obliged to you if you will advise me
whether you know of

any such

proposition or suggestion as

the

one

mentioned in the first paragraph of this letter being made to any
notary in your vicinity.
is most important.

Please do not fail to do so as the matter

Not only is it necessary to know that such cir-

cular e have been received; it is necessary to know every case, no
matter how many.




YOurs very truly,
E. C. McDougal

President.

THE ASSOCIATION OF 71E STATX BANKS OY THE
STATE OF NEW YORK.

Preeidont
cDougal, Preoident Deno, of Buffalo, N. le
Vicee.Preeident
Johr 14. .Gregory, P
.reeident eentral Bank, Rocheeter, X. Y.

eeeretery end Treneurer
Paul X. ronnor, Precident le;rth Side Bank of Brooklyn, N. Y.
. * 4.0 ** * * 4... * * * * 4. **
Executive Committee
N.
Vico President City Benk of Syrecuoo, Syreemee, N. Y.
John A Potter, President Petchogue Bank, Patchogue, N. Y.
V. Vellington, Vice Preeideet e. W. Wellington & Co.'s Corning.
Walter E. rrow, Provident, Corn Texchenge Bank, New York.
F. A. Sawyer, Pre:cadent, Citizens Bonk, Yteverly, N. Y.
Stephee. "evter, President Bent of the Manhattan Company, New York.
welter N. Bennet, Vice President Bank of America, New iork.

Hobert CIA:tette Cashier Mechanics & Farmers Bank, Albnny, N. Y.

Buffalo, N. Y., Tebruary 24th, 1917.
Referring to my circular letter of February 9th, which
was vent to all state banks outside of clearine houee eitiee, concorning the poseible collection through exeremo companies by the
Federal Heeerve Bank of New York oftcheoke on state benke and
trust eoepaniee *Teich refuse to remit at 'par, it has been suggested that state bane, and trunt companise have checks upon thomeelves
Doer Sir:

stamped "PAYABLE IN NEW YORK TICHANGP AT CURRErT RATES".

Should

checko be so stamped, the Pederel Reeervo Bank could not demand
ceee, nor Noe York eechanee et par.

It erobnbly would be wise for each benk to explain to
its; ouotomers the object of the etemp. There could be no reesoneble doubt thet its customers would co...operate. If any ordinary
holder ehould present such n check over your counter, there would
bo nothing to prevent you from nying it iv ceoh, if you chose to
do eo, but no holder of ouch N check could compel you to pey cesh.

It is only fair to the other members of our Executive
Committee to zey that the circuler letter of Februery 9th, end
this lettere ere sent out on my on responsibility without waiting
for a meetivg of the Committee. My reaeon is the neceesity for
immolieto action. Replies which I heve received to my letter of
Fobruery 9th ineivele that e goodly number of letters has been
sent out by the Federal Resort* Bank to notaries public in different part of the tate. A reerevettetive of the Federel Reeerve
Bank in travelling through the Etete tedenvering to induce otete
benke end trust companies to remit at par.
It is poevible that this movement of the Federal Aeoerve
Anne io irieneed as an entering eodge and that the final reielt mny
be the absorption end reprovable abolieement of our state benking
system. The only safe thing to do is to rosiest the first encronchment.
A men *ennui walk ten colloo without tekine the first atop.
The iederel eeserve System cannot absorb our state banking eystem
if we prevent it from tekine the first step.
Yours very truly,



Elliott C. McDougal,
Propiesnt.

rixtracts from Address of

Ur. raliott n. L000ugal,

(President, Bank of Balta1o4
(Baffalo, X. Y.)
on

"State Banns and the Federal leserve Cystam'
before
Inonp III, New ronk State Banxtrs' Aosociation,

at amira, N.

Saturday, Febrnary 24th, 1917.

It io urged that tho Federal Roserve an of Bow York has a perfect
right to present chodks on any batik, aL the coanter of that bank, and to demand
payment in cash at par. That is perfectly tr. Naa the Federal Reserve Bank
no other cUrpOne than to procure cash, there could be no valid criticiem of its
aotion. Tho trouble is that such Is nut its real putkoss. That plartosa clearly is to farce banks -anon &la Checks are drawn to remit New York exchange at
per. At a conference 3X country bankers in Rochester, an Assistant s.ashier of
the Federal Rostrve Bann Of Lew York stated that the lurniSaing of New York ox-

Ohre, anii the transfer of and fram ono city to another, were uervicea for

which no t..111.: had any right to mske a change.

nny man-with ordluary common

uh service costs money. It presupposes
sense knows that this is nonzense.
the proeuring and the maintaining of banking connections and thekeepinn of balances in other cities. It nresapposes clerk hire, stationery and rent. A bank
furniah14g GUOil facilitios at tar does so at a loss. 4 bank has a perfoot right
to make a charge oovering cost, plus a fair profit.
,'hen the Federal Reserve Bank of New qbric takes the position that this
service taust be furnished not on for nothing Lt at an setae' loss, it takes an
untenable and an unjust position. It is porfsetin true that, in the past, some
osuntry banks have charged exorbitant rates. It may be true that, to-day, some
Of them are Charging exorbitant rates. The Federal Reserve Bank is perfectly
justified in collecting chocks upon such banks in any way it ohooses. nhen country banks are willing to remit small amounts at one-tenth of one per cant., and
modernte sized amounts at one-twentieth of one per cent., such banks are asking
no more than fair compensation far their serviees. To attempt to coerce suoh bunts
lc unjust. The statnment that they are not entitled to oharge for &doh services
is untrue. To tine the teChnioal argument that they should not objeot to redeamIng at tar, ovsr their own counter, cheeks drawn upon them, when those oheoks are

presented, not simply to get cash, but to coerce than, is insincene.
It hss been stated that the Federal Reserve, ioard intends to make every
bank check:north par in every part of the United States. The Board might just as
easily decree that two and two shall make five. L. check upon 'Jan Francisco is
worth or to a man it San Francisco. To a man in Denver, it is worth n little
less than par. To a man in Si.. Lonia, a little loss than that. To a man in New
York or Boston, a little loss than ,hat. The $=0 is true of a check on Linnoapolls in the hands of a man in Minneapolis as comnartd with the same chodk in the

sans of .1 IP= in Jt. Intris o- in the ands of a man in New Otqoans, aonulne
oountry-wide rarity for local checks is a theoretical dream. Unnatural, enforced
parity, under unjust :Wes, mittht le possible, just ao it might bo possible to pass
a law that a shipper of oranges in ralifornia should receive for a box of orangee

which he as shipped to Laine, and upon which he has taid freight, the same price

that AO would receive for the tame box of oranges in California.




extrect from addrces of E. C. UeDougal.
Nage 2.

uperficielly coneidered, it may eeem that thin question of collection charges, while important as a matter of justice to our entire state banking community, is important as e matter of selfish interest to country
benkern only. Considered from the point of their selfish interests, and
looking no further than their noses, Buffalo banke are undoubtedly indifferent to the action of the Tederel Reserve Bank of New York in its endeavor to coerce etnte bunks. The probability is thet banks in Rochester, 5yracuse, Albany and other cleeeing house cities, *re eimilerly indifferent.
Nevertheless, all etete inetitutions, not even excepting those of Lew fork
City, should realize that yeif..ereservation requires united opposition to
the eedern/ Reeerve Bank or to eny other power which endeavors unjustly to
coerce even e small pert of our state banking institutions.
The solidarity of the bnnking system of New York is et stake.
It must be perfectly nlain to anyone who is no/ willfully blind that it is
the intention of the Yederel Reserve fq)mrd to force into the Feder 1 Reserve
that ouch
Syetem ell eteto institutions. The Yederel leeeerve Boerd nays terms, end
institutions will be received into the oyster on very favoreble
that they will be allowed to remnin, eech under thP supervision of its own
stete banking department. Probably such an arrengement could not long con(W..
tinue. There would be conflict of authority and discord between theLew York.
thoritieo of the United States and the authorities of the State of
-ehile no man con prophesy exactly whet eoel6 heppen, the probability is that
the powers of the Federal eserve Board gradually would encroach upon the
powers of the 'Amin banking department, until, the powers of the latter wore
practically extinguished, while the state banks members of the iederel henerve eerocietion ldoked helplessly on. This in the mein dWAger, competed
with which the question of collection %hargee einke into insignificance.
To anticipate and prevent this danger, state bunko of diecount and trust
companies ehoeld join in N state ┬░leering house association, with powers
to do everything for a memeer that the Federal Reserve Wyetem con do, except the power to ireue currency. To meet thet lack, the executive committee of the association should be authorized to procure currency for any
member in ORSO of n04, paying a premium for it if necessary.
Years of experience covering eeverel panics heve proven the

clearing house eseocietion to be the quickest, the ieceet expensive end

lith such an ROSOCi4..,
the best method of meeting unforeeen emergenciee.
expensive than membership
tion, membership in which would be much lens
in the federal Reserve Aesociation, our state system would be entirely
independent of the nntionel system. %eh independence iv desired net
for attack upon the national system, but for mutual protection of members
in times of financial etreee, and for defence against such attack on the
part of the Federal Reserveriystem av exist to-day.







/




c, sLAA
LiArtftALIAn

rt4

CLIC A

CettAr

1 04
t

J

ajAAA!t"LIIN

014,

U LLEVN

"

Q.9440 L,0

k
PRESIDEN
EMIGRANT INDUSTRIAL SAVINGS BANK

JOHN J. PuLLEi
_
".0
EM GRANT IN

PRESIDENT
SAVINGS BANK

0

0,6000 --,
stv3cw

,*&

(

0)?ra
.

edz4,,iwne,
/at/aY

tY-&/,W Me/yr/99

,Y0, 025

,oivYreehted-chr,

/ertiaPtad4o-ezvev/v,e)eke/h

e

\\bi .61

.0/4e,ma2.L/0,.,,))it4"4i/
SO, 1850

44,44A9,-,okr,/+,id ,,
d e/t

<

5/ A44Ii /ty e 4




,er.,eottee/

*,94

Nh)*-1

September 29, 125.

My dear Ni. Pulleyn:

Very much to my regret it iil not be possible for me
to attend the dinner at the Hotel Biltmore tomorrow night, at
mhih1.;. be celebrated the seventy-fifth annivereary of the
establiehment of the Emigrant Industrial Savings Bank.
Tour wonderful inntitution haa an almout unexampled

It is not the kind of suocese wnich is
record of OUCCO5b.
meseured in earnings or profits, but in the promotion of thrift

au ,7 ssviage by poor people, where benefits accrue not only to the

individual epositor, but to the nation at large.

Furnishing fac4ities tor the custody of what poor
,eople can save enc employing thm in Wilding up ale nation belpe
to make good citiwens on the one hand, and a prosperous and happy
people s well; so that I know that you and your colleagues will
in more from tha celebration of this anaiversc.ry then will your
:ueata, because of the consciousness that you must have of the
splendid piece of work wal done.
Wishing you a continuance of the growth of your institution which is based upon fine traditions, I am,
Sincerely yours,

John J. Pulleyn, Esq.,

Emigrant Induetrial Savinga Bank,
New York, N. Y.







NEW YORK CHAPTER, INC.

AMERICAN INSTITUTE OF BANKING
SECTION AMERICAN BANKERS ASSOCIATION

CHARLES C. WHEELOCK, PRESIDENT
/ITH THE CORN EXCHANGE BANK

EDWIN C. ESTES, laT VICE-PRESIDENT

15 WEST 37 STREET

WITH THE SOUTH BROOKLYN SAVINGS INSTITUTION

LOUIS R. OHLROGGE, 2N0 VICE-PRESIDENT
WITH THE NATIONAL PARK BANK




TELEPHONE, FITS

Roy

NEW YORK

1544

NELSON M. McKERNAN, TREASURER

WITH THE IRVING BANK -COLUMBIA TRUST COMPANY

J. MARTIN TELLEEN, SECRETARY

BIRDSEY H. SNIFFER, ASS/STANT SECRETARY
15 WEST ST STREET

ALFRED E. SCHNEIDER, CHIEF CONSUL

WITH THE AMERICAN EXCHANGE-PACIFIC NATIONAL BANK

November 17, 1225

Mr. Benjamin Strong, Jr.
Federal Reserve bank
Liberty & Nassau Str,eets
New York City

Dear Mr. Strong:
The Chapter officers appreciate your
continued interest in our work.
Your sui,pprt with that
of our other sustaining members is most anoouraging.
Enclosed is receipt #2707.
Yours sincerely,

(7t
a
President

ZDB/MED

41,

tlov .16
92:".5

-2nvz-t-ci

9
11




0




NEW YORK CHAPTER, INC.

AMERICAN INSTITUTE OF BANKING
SECTION AMERICAN BANKERS ASSOCIATION

EDWIN C. ESTES, PRESIDENT

WITH THE SOUTH BROOKLYN SAVINGS INSTITUTION

NELSON M. McKERNAN, 151 VICE PRESIDENT

WITH THE IRVING BANK-COLUMBIA TRUST COMPANY

15 WEST 37 STREET
TELEPHONE, wIscoirsnir 1420

NEW YORK

WALTER MONSEES. 2N0 VICE PRESIDENT

WITH THE FARMERS. LOAN AND TRUST COMPANY




ALFRED E. SCHNEIDER, TREASURER
WITH THE AMERICAN EXCHANGE-PACIFIC NATIONAL BANK

NIARTIN_TELLEEN, SECRETARY
ALFRED E. H ENDER sorq, ASSISTANT SECRETARY

CLIFFORD L. LUNDGREN, CHIEF CONSUL
WITH THE CHASE NATIONAL BANK

June 15, 1926.

Er. Benjamin Strong, Governor,
Feaeral Reserve Bank,
33 Liberty Street,
New York City.
Dear Er. Strong:

New York Chapter hats been fortunate in

having you serve as a member of the Honorary
Committee of the Baricers Forum.

May we have the

honor of having you continue in this capacity
during the coming year?
Respect

fly yours,

--a4(
C ha irman,

Bankers Forum.

GWW.OEW




June 18, 1i28.

Dee r

r.

right:

This le to 4cknow1edge the mceipt of your letter
of yeeter&y,
Mr. trons- to crw.tnue to er4cf
member of the HODDIS ry Committee of the btlalters Forum.

ti

UnfortunEtely Governor 6troug is t:bruE.o now, end

th-te or bit return ie unoerUin oa yet.
But if th$
committee iibt will not be atde up immediwtely, I shell be
tc oottmuni;:zte tith

you 1,A Me know- how eccn you v.i.12
'LA& V e deflnite advice?

to

Very truly yours,

oecretry to the Governor.

:gr. George W. Wrigl.t,
Cheirmi,n, Etsnitera Forum,

Americun inbtitute of Beakin6,
16 west Zilth E,Treet, Rev "fork.

TH E BOWERY SAVI N GS BANK
CHARTERED 1634

130 BOWERY
NEW YORK
GEORGE W. WRIGHT
ASSISTANT SECRETARY




June 19, 1926.

Mr. M. S. Bleecker, Secretary,
Federal Reserve Bank,
Federal Reserve P.O. Station,
New York City.
Dear Er. Bleecker:

I wish to thank you for the
prompt reply to my letter oftJune 15th to Yr.
Strong.

Whenever convenient, I will be pleased

to receive a reply.
Very truly yours,

oI
Chairman,

Bankers Forum.
WAT.OEW

ar

a,
Hotel du Cap d'Antibes,
Antibes, July 8, 1926.

My dear Mr. Tright:

Your favor of June 15th has been forwarded to me here.

I am afraid my services to the American Institute---------- have
cf Banking

been very slight indeed, and it may well be possible for you to got someone
who is more time to devote to the work.

to make another selection.

If so, I know you will not hesitate

As you know, I am much interested in the Institute

and wish I might be of more service.

If you find that the very lame partici-

pation which I give it is of any value, I shall of course be delighted to continue.
Very sincerely yours,

Mr. George W. Vright,
ahairman, Bankers Forum,

American Institute of Banking,
15 West 37th Street,
New York.
TIS:M




0-

THE BOWERY SAVINGS BANK
CHARTERED 1834

130 BOWERY
NEW YORK
GEORGE W. WRIGHT
ASSISTANT SECRETARY




July 27, 1926.

Yr. Benj. Strong, Governor,
Federal Reserve Bank,
33 Liberty Street,
New York City.
Dear Mr. Strong:

Your letter of July
was received with considerable satisfaction, as I have
been waiting to hear from you to complete the
list of the members of the H9norary Committee.
The fact that you are so deeply
interested in the A.I.B. is the very reason that
the Committee is desirous of continuing you as a
member of that Committee, and on behalf of the
Bankers Forum, and also as Chairman, I wish to
thank you for your willingness to continue on the
Honorary Committee for the season of 1926-1927.

Chairman,

Bankers Forum.

GWW.OEW




0
(1)

v

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