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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