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F.D. 12A.3

'6

oa.././

No

Federal Reserve Bank
District No. 2
Correspondence Files Division

SUBJECT




October 27, 1927.

Ify dear Fenator Glass:

Moe the receipt of your kind 1,Ater of October 20
have your telegram advising thatEiSob Allen stood thu operation

successfully and that YOU are hopeN1 of the outccon.
&Alighted.

I sm 80

it takes a great deal of courage indeed to face that

most serious redy, but when it succeeds T. am told the sum,sa
in marvelous, so I am hoping with you and with tie
will enjoy t speedy and complete recovery.
With kindest regards,
Eincerlgy yours,

Fonorable Cartor GleaS,
Lynchburg, Virginia.




if that he

WIRE TRANSFER
DIVISION

W. T. 11. 1 50M R-27

TELEGRAM

FEDERAL RESERVE SANK

OP NW YORK

DECODED

COMMERCIAL WIRE-INCOMING

CHECKED

TRANSLATION COPY

ATTENTIO

COMPANY

11WU M 42 NL
R WASHINGTON DC OCTOBER

25 1927

BENJAMIN STRONG

FEDERAL RESERVE BANK NEWYORK NY
GUS ASKS ME TO THANK YOU CORDIALLY FOR YOUR KIND
TO WHICH

I

DESIRE TO

ADD MY OWN EXPRESSION OF

MESSAGE

APPRECIATION

STOOD
BOB WAS OPERATED ON TODAY AT NOON PHYSICIANS SAY HE
DISTURBED OVER THE RESULT
OPERATION SPLENDIDLY AND ARE NOT




CARTER GLASS

902A OCT 26 CC-4.s-

Misc. 24. 1

40 M 6-25

FFDERAL RESERVE BANK
OF NEW YORK

SENT BY

SaND TO 12,,Is LES

COPY OF TELEGRAM
-LA

October 7, 1927

Carter Glaas
Lynchbu rg

Virginia

I shall probably need to be in iteahington on Wednesday and could include Tuesday
al so if there ia any chance that you will be there either day
Shall wait
your reply before deciding.




I+

STRONG

-4

W. T. 11. 1 60M 11-26

FEDEPAL RESERVE BANK
OF NEW YORK

WIRE TRANSFER
DIVISION

TELEGRAM

DECODED

COMMERCIAL WIRE-INCOMMO

TRANSLATION COPY

ATTENT ;ON

CHECKED
COMPANY

41WU D #8 GOVT LYNCHBURG VA OCT 8 1057A
FRB

BENJAMIN STRONG.

SHALL HOPE TO SEE YOU IN WASH I NGTON ,'.EDNESDAY




CARTER GLASS
1 120 A

C

Misc. 24. 1

40 M 5-25

1-EDERAL RESERVE BANK
OF NEW YORK

i'!A2L..44)

Feder 1 fteuer*.kiz
?4,4

SENT BY

SE g 1fp/7ILES

X
19,2?

COPY OF TELEGRAM

Oft,

s

,/ /0.
4/11

CA ,

/;'

Hon. Carter Gt.isa
Lynchburg, Virginia.
Thank you for




Me6V6,414

I will be there.
k enj.

t rong

C

63

FRANCIS E. WARREN, WYO.. CHAIRMAN
LEE S. OVERMAN, N. C.
REED SMOOT, UTAH
WES,
WILLIAM J. HARRIS...
JONES, WASH.
CHAR
CARTER GLASS. VA.
JURTIS. KANS.
ANDRI CUD A. JONES, N. MEX.
FREI.
.5 HALE, ME.
KENNETH MC KELLAR, TENN.
LAW,
-E C. PHIPPS, COLO.
EDWIN S. BROUSSARD, LA.
11351
NROOT, WIS.
THOMAS F. BAYARD, DEL.
HEN.
EYES, N. H.
JOHN D. KENDRICK, WYO.
BALE
AMER°, ARIZ.
SHAM. CONN.
HIRAM

9-Anifeb ,Stafez Zenctle
COMMITTEE ON APPROPRIATIONS

KENNEDY F. RCA. CLERK




Lynchburg, Vii.ginia.

October 20, 1927.

Dear Governor Strong:
Thank you very much for sending me the
statistical material on the acceptance policy pursued by our
American banks.

It is a subject which I have felt considerably

interested ever since the hearings on Federal Reserve legislation
in 1913.

I have no doubt I shall examine the material sent by

you with great profit to myself.

Bob Allen stood the trip from Asheville to
Baltimore unexpectedly well, attended by his wife. Mrs. Glass
and I intercepted the train at Washington and went over to Johns
Hopkins with them.

The doctors say Mr. Allen is in good shape for

the operation, which is set for next Tuesday morning at 10:30.
All of us deeply appreciate your interest in Mr. Allen's case.

Cordially yours,

Benj. Strong, Esq.,
Federal Reserve Bank,
New York City, New York.

8eptember 16, icier.
My dear Senator!

The news conteined in your letter about Mr. Allen concerns me very
muoh indeed.

*hen I left it seemed to me that he as improving and that he

felt rather cheerful about the outlook. Dr. Miner, who hed just returned
from Europe, had not yet seen him when I last called at the hospital, and I,
therefore, had no opportunity to learn of Dr. Miner's opinion.

From your letter / gather that he is to have the operaeion techniesily komsn as a eurgicel collapse, and not simply the pneuio-thorex, that
the much more common treatment of collapsing the lung by introducing air under

pressure between the wall of the lung end the pleure.
It does not ;semi to me that you need be hopelese of his recovery

even though it is necessary for him to undergo this really deeperetely severe

operation, one of the most extensive sod difficult ones that I know da.
have a friend in Ooloreuo who was in the hospital there when I

was a patient who had been ill for at leaet four years, and this treatment
was finally resorted to.. The oper6tics took piece in 1.923 end my friend is
sow practically cured and able to do lmost anything except very violent.
forms of exeroise.

Of course, younger people heve a much more difficult fight with this

terrible disekee than older people have.

For eome rebtkson resistance is less,

and old folks have the ecivantage of the natural tendency to fibrocie which

helps the process of healing the lungs.
I aro not cure that you are aware that Mr. Allen sod sty older eon

were comrades together in France. It hat; added grettly to my int,Ireet in his




.7

Honorable Carter GI abs

-

4/ UV a .

recovery as you will realite, and I am writing at once to esnd you and your
aughter my earnest wishes for a succeneful operation and hie complete recovery.

/ am sorry also to learn that you hare been naming your troubles.
had exactly the eame occurrence in London ae the result of k light motor
accident when I caui,ht my foot in a, car end it w. a somewhat injured. Frankly,

It did not get efl until I w,,,a senaible enough to keep off of my root, for
time, end I hope that you will do the same, and would not have suggested a

vibit h t. I known that you were lain up.
There is a chance of my being in -4,althilvton next week or the week

folloring. If it twaterialiles I shall take the liberty or telegraphong you
and poseitly we can then arrange e, meeting either in aaanineton, if you are
fully recovered, or / snail inde;ad be glad to go co Lynchburg.

I tan grateful

to you for this kind suggestion.
Air, with many good wielea for Mr. AIlenis recovery, P:nd my kindeet regr,rds to your good elf, I am,
Very sincerely yours,

lonortble Carter Gla:s,
Lynchburg, Virginia.
BS/HAli




October *, 1927.

PERSONAL

Deer Senator:

Tour kind letter of September 30 is before me, and I have read the enclosure which accompanied it.

I sw utterly unable to fathom what Dr. Willis is driving at in his

editoriels. Many of them are based upon mistaken notions and frequently upon
very flimsy ideas Le to the operation of the Federal Reserve System.

while I do not re.eard the matter as of any serious consequence, it has

rather off'ended my sense of the fitness of things that one so closely aeeocieted
with the preparation of the bill and with the subsequent inauguration of the
System should now be engaged in these persistent and frequently ill-founded
criti ci ems.

I an quite unable to understand why the action of the Federel Advisory

Council was not published, unless they feared it wad add to the feelings aroused
over this :wetter. I was told that one or two metecere of the Council were opposed
to reeking any record of action whatever. The action taken wae moderate and dig-

nified. I presume by now you have had a reply from lir. Wetmore with a copy of
the resolution.

As to the last part of your letter, you need harbor no doubts ea to ay
own position in this and like matters. I have no hesitation in sovising you
confidentially that when I learned by telephone from Washington that the Board

proposed to take this ection I did whet I could to persuade some of the Board not

to do so and, felling that, to defer action for a period, as I felt sure that but
a short time was needed before the rate in Chicago would be redueee.




Knowing something of the legislative history of the Act in regard to the

2

10/5/27

hon. Gar ter Giese.

rate provitions, I have never felt that Congreee into:Wed the Board ahould exercise this power but, of course, you know mmoh Dettor of what the law intended in

that regerd then I do. It gay well be claimed that it is somewhat embieuoue.
Whether the law intends that the Reserve

oare ehould initiate chan6es or not.. I

feel very certain that an attempt to exerciee that power by the board will, in the

end, be fatal to the regional cheracter of the Seaton and will result in progreesive deterioration in character of management of the various Reserve banks.

The fact is, that in recent yetre, feeling the development of the tendency to
centralise authority in the ?edema RGserve Board and at times to underteke too

many of the functions of an operating body, I may heee gone too far in the other

extreme in reeisting the development so far as I had any influeooe to do to.

I think I ell warranted in stating that all of our directoes and all of
my asLociate officers in the Federal reserve bank feel as I do that thia teedency
the

to centralize the direction of operatione,and/euthority to execute policies; undertaken by the Eoard in rashington is a si a talc e aci will be detrimental to the
System..

iie certainly should be able by discussion, elbange of viewe had egreement

to arrive at underetandings there doubtful clueetione ariee without ite being neeeeeary for the Board to invoke mandatory powere which are of very doubtful legelity anyway, and which simply erouee controversy and cause bad feeliag.

I am very hppeful of an improvement in thee matters eince the appointment of Ar. Young.

Re has bad a long service in the Reserve System end under-

stands thoroughly the varioue operating problems. lie is e man of eourage, of very

high character, and what to me is most important, he enjoys the respect and affection of all of the officers of the Reserve banks who know him.

It eeeme to me that it Aould be a calamity to heve an overhauling of
this matter by Congress.

I feel quite certain that there is not likely to be a

recurrence of this sort of an effort by the Board. If the Act needs clarification



10/5/27

Hon. Carter Giese.

on this or any other point might it not be better to wait a few years until any
changes which are felt to be really eedentiel can be underteken in better t5111Der

than is likely to prevail at the next seseion of Congress?
This whole affair has distressed me terribly. It was so unneceseary
and the coneequenoes present the possibility of 80 such harm.

But please do not

misunderstand my own position. It has never changed as to the necessity for

maintaining the regional system 4- s intended by Congress, and I can assure you

that it won't.
I have sometimes Peered that you and others who have been watching the

development of the System might not always understand just hoe it was functioning

I think the enseer in a
word is to say that it is functioning excellently in every respect. The feeling
as to the relations between the several Reserve banks.

is good. There are no local or eectional jealousies euch as might incorrectly be

inferred from this recent episode and, on the other hand, the method of bringing

about uniformity of operation, both as to policies an details through frequent
meetings, committees, etc., has worked admirably and has welded the twelve banks

into a real system without in any way destroying the regional principbb of local
autonomy.

You do not refer to Captain Allen in your letter, and I do hope that
things are progressing favorably with him es well as with your own trouble.

With many thanks again for your letter, and warmest resards, I beg to
remain,

Sincerely yours,
honorable Carter Glass,
Lynchburg, Virginia.
BS/RAH




FRANCIS E. WARREN, WYO., CHAIRMAN
REED SMOOT, UTAH
LEES. OVERMAN. N.C.
WESLEY / ,NES. WASH.
WILLIAM J. HARRIS...
CHAR,
ris. KANS.
CARTER GLASS. VA.
FREDE
HALE, ME.
ANDRIEUS A .JONES, N. MEX.
LAWRENuE C. PHIPPS, COLO.
KENNETH MC KELLAR.TENN.
WILLIAM B. MC KINLEY. ILL.
EDWIN S. BROUSSARD .LA .
IRVINE L. LENROOT, WIS.
THOMAS F. BAYARD. DEL.
HENRY "
EYES. N. H.
JOHN B. KENDRICK, WYO.
RALPH F.
MESON, ARIZ.

-Rieniteb ,Sfatez Zenale
COMMITTEE ON APPROPRIATIONS

KENNEDY F. REA, CLERK




Lynchburg, Virginia.
September 14, 1927.
PERSONAL.

My dear Mr. Strong:

Acknowledging yours of September 12th, I had
expected to be in New York the latter part of August and again the
first week in September; but an infected "big toe" has kept me confined at my home for nearly three weeks. I did manage, with the
consent of my physician to get up to Washington for two days; but
it did me no good..

/ very much want to talk over matters with you.
They certainly need to be talked over with somebody who has a real
desire to preserve the Federal Reserve System in all its integrity.
If you have an occasion any time soon to go to Washington and would
let me know in advance I will make a special effort to meet you
there. Better still, we would be delighted if you would run down to
Lynchburg and see us for a day or two.

Perhaps you would be interested to know that I have
a letter from my daughter, Mrs. Allen, at Asheville, telling me that
Dr. Haman of Johns Hopkins, in consultation with
ninor last Sunday,
hail decided to operate on Mr. Allen by collapsing his lunga. They
seem to think that this grave operation is the only remaining chance
of saving his life.

rr.

Always with cordial regards and best wishes, believe
me

Sincer3ly yours,

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

kNCIS E. WARREN. WYO., CHAIRMAN
REED SHOOT, UTAH
LEE B. OVERMAN, N. C.
WESLEY L. JONES. WASH.
WILLIAM J. HARRIS...
CHARLE- RTIS. KANS.
CARTER CLASS. VA.
ALE, ME.
FRE0e
ANDRIEUS A. JONES. N. MEX.
LAWRENA C. PHIPPS, COLO.
KENNETH MC KELLAR, TENN.
WILLIAM B. MC KINLEY. ILL.
EDWIN S. BROUSSARD LA .
IRVINE L. LENROOT, WIS.
THOMAS F. BAYARD, DEL.
HENRY w KEYES, N. H.
JOHN B. KENDRICK, WYO.
AMERON, ARIL
RALPH

3.1Cnifeb Zfatez Zenate
COMMITTEE ON APPROPRIATIONS

KENNEDY F. REA. CLERK




Lynchburg, Virginia.
May 2, 1927.

My dear Governor Strong:
I have

apprising

yours of April

29th,

me of your contemplated visit to Washington.

Very likely I shall take occasion to run up there before you return to New

York on

the 13th, in which event

I shall certainly call you up.
Sincerely yours,

Benjamin Strong, Esq.,
1718 H Street, N. W.,
Washington, D. C.

,
A-ril

, 1q27.

'41y de^r FenstcYr:

Pfkrr1

to our teleplobe eonve,-sation,

my present pizz I

T sh!7.1 ;_robetly be there until P. oout tbe

kitLy 3re.,

'..'th.

to ;V:s to Zeettingtor neif, Tueedey,

If you sivad b, ir Ite,shVgton during that time,

wruld you be 1..00d encr.:4h to let me know at my tom.-

there, No

111S

treet.

L.

Frstukttn 'ADZ" .

1

The tole: tone nur+ber is

ex. very CIAXIOUS to heve tt'3

1,a5sure of gweirq yo.
Sinecirel7

EbiOp rter 01. nee,
LytItIburg,

ens







FRANCIS E. WARREN, WYO., CHAIRMAN
REED SMOOT, UTAH
LEE S. OVERMAN. M. C.
WESLEY L. JONES. WASH.
WILLIAM J. HARRIS...
CHARLEP-RTIS. KANS.
CARTER GLASS. VA.
FREDC
IALE. ME.
ANDRIEUS A. JONES. N. MEX.
LAWS
_ 0. PHIPPS. COLO.
KENNETH 1,10 KELLAR. TENN.
WILLIAM B. MC 'ORLEY. ILL.
EDWIN S. BROUSSARD , LA .
IRVINE L. LENROOT. WIS.
THOMAS F. BAYARD. DEL.
HENRY v KEYES. N. H.
JOHN B. KENDRICK. WYO.
RALPH
1MERON. ARIZ.

9.1Cnife

tafez Zenate

COMMITTEE ON APPROPRIATIONS

KENNEDY F. REA. CLERK

Lynchburg, Virginia,
April 15, 1927.

My dear Governor Strong:
I need not assure you that I greatly

appreciate your letter of April 14th and likewise your statement made to the publishers of my book.

Such expressions from

you and other men of your discriminating judgment lead me to
believe that the labor expended on "An Adventure in Constructive Finance" was at least worth. while.

I carried your copy of the book with me to Asheville

last week when I visited my daughter and son-in-law there;
but was disappointed to find that you had left a few days
before.

I sincerely hope you are mending rapidly and will

soon be beyond the necessity of watching your step.
Always with cordial regards,
Sincerely yours,

Benjamin Strong, Esq.,
Hotel Brighton,
Atlantic City, N. J.




c

BENJ. STRONG

Stuyvesant Road,
Biltmore Forest,
Biltmore, N. C.,
March 21, 1927.

P7RSONAL AND
CONFID7NTIAL
My dear Senator:

I hope you will not feel burdened by my letters.

This

one, which is quite personal and private, may indeed require no
reply, and is rather intended to prepare your mind for a talk when
opportunity occurs rather than to ask for a reply now.

It is

written with great hesitation, and would not be justified had I any
personal interest to serve, - in fact any interest other than the

welfare of the Federal Reserve 4stem.
The recent resignation of our Mr. Jay, and Mr. McGarrahls
appointment in his place, has afforded the opportunity for some
inspired public discussion of the whole scheme of management of
the Federal reserve banks.

Some of this, in the form of news

articles, notably in the Wall Street Journal, and recently in the
Whaley-Eaton Service, is of a general tenor to indicate that in
the minds of some of my associates in Washington it is intended,
now that the charters of the Federal reserve banks have been extended, to make a gencral change in the method of control and management of the Reserve system in the direction of a great centralization of authority in the Federal Reserve Board and a more centralized direction of the operations and policies of the Federal
reserve banks through the Federal reserve agents.
This troubles me a great deal.

I am able to view it

freed from any possible personal interest, because i cannot escape
the conclusion that my own connection with the System is approaching
its end, if for no other reason than because of the hazard to my
health which I do not feel will be justified for much longer.



Bon. Carter Glass.

2

We are the only country which has a system of banks of

1,0

issue where a central management and direction is not located in
the country's political capital.

In every instance in other coun-

tries, the management is in the financial capital and in the center
of its economic activities.

To meet various requirements of our

own situation, such as the size of the country, its varied economic

characteristics in the different sections, and in order to avoid
too great concentration in New York, a regional system was adopted.
The reasons for this are obvious and have,. as you know, become com-

pletely convincing to me.

In order that these twelve banks might

operate with reasonable harmony and with a common purpose and policy,
a supervisory body was created with carefully defined powers, just
as the.powers of the Reserve banks themselves are carefully defined.
But, of course, the most exact definition would still leave a considerable debatable ground for differences of view as to the extent
to which centralized authority was intended in the Board and as to
the extent to which the Reserve banks should be autonomous and their
directors responsible.

The present situation, I believe, is oartly

the outgrowth of circumetances which could not be avoided, that

is,4

the difficulties of definition to which I have referred, the difficulties of supervision at a distance by a body which conducts no
business and must rely upon reports from a distance, etc.

But to a

very large extent our difficulties, if such exist, are due to the
fact that the Federal Reserve Act was written without any possibility
that its authors could anticipate that a world war would give rise
to a situation unique in the history oi

the world;

where, in fact,

responsibilities would be thrown upon the Reserve banks far beyond




Hon. Carter Glass

- 3 -

anything imagined twelve years ago.

As I stated before the House Committee on Banking and
Currency last year, it

i2 astonishing that the provisions of the

Federal Reserve Act, written without

anticipation of war, should
itKa f-1

have been so nearly adapted to meet the present complicated system
as they are.

Of course, one of the greatest of the responsibilities
directly growing out of the war relates to the reestablishment and
maintenance of the gold standard.

No nation enjoying the position

which we now do, with Our wealth and prestige, with our prompt
recovery from the shOck of the war, and with one half of

the world's

monetary gold in its possession, and being the creditor of most of
the world, can avoid the discharge of these responsibilities without,

on the one hand, meriting the odium of our fellow sufferers in the
war, and on the other hand, being chargeable with neglect of the
best interests of our own countrymen who are dependent upon stable
conditions abroad for the development and maintenance of the markets
where we sell most of our surplus produce.

The question in my mind,

and a very serious one,' is whether if any such development as seems

to be forecast by these articles should occur, can we expect under
such conditions to satisfactorily discharge these obligations?

Will

the people of our country be contented with a gradual centralization,

not only of the powers of supervision but of the executive management
and operation of the System in any body located in Washington, so far
from the scene of actual operations.

Frankly, I can sympathize a good deal with the position of
these gentlemen.

It would indeed require men of most unusual breadth

of vision who would be willing to confine their activities under the



Hon. Carter Glass

- 4

conditions which have existed in recent years strictly to supervision
and advice, without endeavoring to extend their authority to the
point of requiring that their approval be obtained to an increasing
extent in

all

undertakimzs both great and small in which the System

as a whole is engaged.

After all, they have a responsibility and

they cannot sit by inactive and unresponsive to the development of
these unusual conditions and of programs devised to meet them.

It

would require men of unusual perspicacity to be able to sit in review
and pass upon these questions, difficult, technical and complicated
as they are, as advisers rather than as deciders.

other hand, the need for prompt and wise decisions, for a forwardlooking policy and for a willingness to take responsibility courageously ,is more apparent in the System to-day than it ever has been
since its organization.

-My conception of the way the system should function in

the broader fields of policy has always been rather different from
that of the Federal Reserve Board.

It has seemed to me possible

that frequent meetings and exchanges of views should be had, and

policies arrived at asthe result of conference and agreement. Once
those policies are adopted, their execution should be entrusted

absolutely to the Reserve banks and to their reponsible directors
and officers.

Frequent reports and interchange of views will always

be necessary.

But I cannot see anything but disaster for the system

if such cooperation should evolve into an absolute centralization
of authority.

While I have endeavored to keep in touch with this development as well as I could during recent months it has not been possible




And

7on. Carter Glass

- 5 -

for me to discuss matters with the Federal Reserve Board.

My general

impression is that.there are differences of opinion in the Board,

possibly as many opinions as there are members of tne Board.

My

outstanding reaction, however, is one of alarm lest this development

might indeed end in a situation for the Federal Reserve System
exactly the reverse from that which was intended by Congress.

Cer-

tainly it was not intended that we should have a central bank, nor
was it intended that we should have a politically-managed system of
central banks.

It is fair to say that it was even more distinctly

not intended that the Federal Reserve 7ank of New York should run
the System.

On the other hand there seems, to be clear intention ex-

pressed in the Act that in certain of the activities of the Reserve
banks there is need for a certain amount of central management of
operations, such as the business conducted in Europe and probably
open market transactions in the country's central money market.

These functions have been performed satisfactorily by the banks, as
should be the case.

Apprehending the development of a feeling that

there was too much centralization in New York it has been my effort
from the beginning to dispel this fear by having all transactions
undertaken by the New York bank in behalf of other Reserve banks
supervised by committees of the governors of the Reserve banks, Not
one transaction is ever

undertaken unless every Reserve bank which

participates in it has first an opportunity to pass upon it after
it has been discussed and approved by a committee of five governare.
No purchase ,or sale of securities, no transaction abroad, no new

connection with a foreign bank, no transactions in bills, are undertaken except under the supervision of that committee and after submission to all Reserve banks.



The issue which will arise in the

Hon. Carter Glass

-

6

System, probably when I am no longer connected with it, will not be
as between the Federal Reserve

Bank of New York and other Reserve

banks, for it is my conviction that there is complete harmony between
all the Reserve banks as the result of the procedure which we have
pursued.

The issue is certain to be between the Reserve banks as a

whole on the one hand and the Reserve Board on the other.

Nor do I

believe that there will ever be an issue between the Reserve System
and the Treasury Department.

While there have been differences of

view, the Treasury Department does
serve System in any matter.

not

undertake to control the Re-

I should .say that the Secretary of the

Treasury is open to the charge that he is influenced in his
operations more by the advice of the Reserve banks

financial

than the Reserve

banks are liable to the charge that they are influenced by any action
or wish of the Secretary.

The precedents which have now been estab-

lished in fiscal agency matters are to my mind admirable in every
respect.

The test of thE Reserve System and the countryte continued.

satisfaction with it will, I believe, lie at the point which I have
mentioned, in a gradually growing tension between the Board and the
Banks, resulting from the drift towards centralization in conflict
with the maintenance of the status of autonomy contemplated by the
statute.

The charters ol the Federal reserve banks have now been
extended.

The organizations have been pretty well perfected.

The

only important organization matter yet to be dealt with is the passage
of the bill authorizing the establishment of a pension system for the
employes which, as you know, is designed to protect the banks from
deterioration of personnel which has
last few years.



been a growing tendency in the

The only special operations of importance as a

11on. Carter Glass

C)

-

7

matter of policy still to be accomplished will relate to the resumption of gold payment in Prance, Italy and Poland in case we are
asked to render assistance.

The conduct of the fiscal agency business of the country has
been perfected to a point where, I believe, the Treasury is served
as well as it is possible to be,

the beat evidence of that being the

operations of March 15 just passed which were about as complicated
and of as great magnitude as any which we have yet handled.

On the

whole, I feel that Congress is well satisfied with what the Reserve
System is doing.

It is perfectly natural with this record that those

of us who have been associated with the System since the start would
wish to see the present scheme continued and no radical changes undertaken.

This letter is, therefore, written frankly with a desire to
obtain an expression of your personal views, not only as to the

fro tm

si.tfl-

ations which have appeared in the press with which you are doubtless
familiar, but more particularly with my personal attitude.

I cannot expect and do not desire to continue with theBank
in New York any longer than is reasonably necessary to feel that I
can safely hand it over as a sacred trust to my successor, whoever
he may be.

But I should be greatly disturbed in doing so if I felt

that it was to be at a turning point in the affairs of the System,

*wt,

when new schemes of operation were to be attempted, when 4r tegien-cy
towards centralization is to be undert,,o.ken, and when possibly the

results of the work of the past twelve years may be placed in jeopardy.
Do you feel willing to give me the benefit of your views
and advice?

Of course, I must ask you to hold this letter as a con-

fidential and personal communication.



Hon. Carter Glass

8

With kindest regards, believe me,
Sincerely yours,

Honorable Carter Glass,
Lynchburg, Virginia.




FRANCIS E. WARREN. WYO., CHAIRMAN
REED SMOOT, UTAH
LEE S. OVERMAN, N. 0.
WESLEY L. JONES. WASH.
WILLIAM J. HARRIS...
CHARL,
CARTER GLASS. VA.
RTIS. KANS.
FREDER
.4ALE. ME.
ANDRIEUS A.JONES. N. MEX.
LAWRE
T. PHIPPS. COLO.
KENNETH MC KELLAR. TENN.
W1LLIAI,N.- MC KINLEY. ILL.
EDWIN S. BROUSSARD . LA .
-NROOT, WIS.
IRVINE
THOMAS F. BAYARD, DEL.
HENRY
.EYES. N.14.
JOHNS. KENDR/OK, WYO.
RALPH ii.. MESON. ARIZ.

Cniteti Zicutes Zenate
COMMITTEE ON APPROPRIATIONS

KENNEDY F. REA. CLERK

March 7, 1927.

My dear Mr. Strong:

Acknowledging yours of February 27th, my son-inlaw is Mr. Robert L. Allen and he is a patient at Saint Joseph's
Sanitgrium at Asheville.

I am sure he would be glad to see you at

any fiime you might find it convenient to,eall at the sanitarium.

Mrq. Allen, who may be found at the sanitarium at almost any time




in the forenoon, would be glad to tell you when it would be convenient
for you to see her husband.

Meanwhile I am going to take the liberty

to caution you not to put yourself at any inconvenience or exertion to
engage in such civilities.

Always with cordial regards,
Sincerely yours,

kke,
Benjamin Strong, Esq.,
Stuyvesant Road,
Biltmore Forest,
Biltmore, N. C.

/

A




Stuyvesant Road,

Biltmore Forest,
Biltmore, N.C., February 27, 1927.
MRSONAL

My dear Senator*

Thank you for your note of the 25th.

4

your son-in-law was here.

I was not aware that

If he is well enough to receive callers,

may I not have the p1 sure of seeing him.

Possibly you weuld give

me the name of his phsician, when I could ask advice.

It will be necessary for me to remain here, ar you suggest,

until T have passed the "safety line*.

I am now beginning to take a

little exercise, which is most oncouraging
with best regards, believe me
Yours sincerely,

Hon. Carter Glass,
United States Senate,
Washington, D. C.

BS OA




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FRANCIS E. WARREN, WYO., CHAIRMAN
LEER. OVERMAN. N.D.
REED SMOOT. UTAH
WESLEY L. JONES, WASH.
WILLIAM J. HARRIS...
CHAR LE'
'RTIS. KANS.
CARTER GLASS. VA.
FRED...
HALE. ME.
ANDRIEUS A . JONES. N. MEX.
LAWRE
KENNETH MC KELLAR. TENN.
C. PHIPPS. COLO.
WILLIA... -. MC KINLEY. ILL. EDWIN S. BROUSSARD .LA
IRVINE
SNROOT, WIS.
THOMAS F. BAYARD. DEL.
EYES, N. H.
HENRY '
JOHN R. KENDRICK. WYO.
RALPH H. CAMERON. ARIZ.

9.1Cnifeb Zfatez Zenctie
COMMITTEE ON APPROPRIATIONS

KENNEDY F. RCA, CLERK




February 25, 1927.

dear 14X. Strong:

I am much pleased to be assured that you are
on the road to recovery.

Let me venture to urge you not to make

the mistake of trying to get back to work until you have well passed
the safety line.

I have a son-in-law at Saint Joseph's Sanitarium

at Asheville who has been there for more than six months, and I am

constantly urging him to remain until the attending p:_ysicians give
him a clean bill of health.
Sincerely yours,

Benjamin Strong, Esq.,
Stuyvesant Road,
Biltmore Forest,
Biltmore, N. C.




t191irt3
P..14

,";

'

,14.111.

0

-

Stuyvesant Road,
Riltew re Forest,

Biltmore, N.C., February 22. 1927.
My dear Senator:

It was most kind of you to writ() me so fully en January 13th.

I have not attempted any mail since then until the last few days, when I

have felt equal to doing a little quiet work and catching up with a great
accumulation of mail.

It may be that later I shall attempt such a book as is really
needed, such as I wrote you about, but I would mach prefer not to do so

while I am an active official of the System, and not until after you have
published your own book.

I am so glad that the tic Fadden Bill has passed with the provision
for extending the charters of the Federal Reserve Banks and without the Hull
amendment.

Much of this result, I am certain, ie due to your own influence

and advocacy of the bill in this form.

It relieved me of anxiety lest the

charter renewal become a matter of political controversy, and possibly at a
time when important elections were about to occur.
My convalescence is progressing slowly, but encourages ma to believe

that I will be able to return to New York some time in April.

But it has been

a mean business and I hope never to have another experience like it.

Permit me to say in conclusion that I read the entire series of articles in the "Post", enjoyed every word of them, and am very glad that they
were published.

With kindest regards as always, I beg to remain
Sincerely yours,
Hon. Corter Glass,
United States Senate,
Washington, D.C.
B3711



FRANCIS E. WARREN. WYO.. CHAIRMAN
REED SHOOT. UTAH
LEE S. OVERMAN. N. C.
WESLEY L. JONES. WASH.
WILLIAM J. HARRIS. GA.
CHAR, URTIS. KANS.
CARTER GLASS. VA.
FREDE.
. HALE, ME.
ANDRIEUS A. JONES. N. MEX.
LAWRr ¶C. PHIPPS, COLO.
KENNETH MC KELLAR. TENN.
WILLI.
MC KINLEY. ILL.
EDWIN S. BROUSSARD LA .
IRVINE
LENROOT, WIS.
THOMAS F. BAYARD, DEL.
HENRY
'EYES, N. H.
JOHN B. KENDRICK. WY0
RALPH 11. CAMERON, ARIZ.

?Anita) Ziatez Zenate
COMMITTEE ON APPROPRIATIONS

KENNEDY F. REA. CLERK

January 13, 1927.

My dear Governor Strong:

I cannot tell you how much gratified I was to get your letter
to-day telling me of your whereabouts and, better still, of the good progress in
your fight for recovery. I was sorely disappointed not to have seen you at the
dinner to Jay and even more distressed to learn that you had been compelled to
grapple again with your old enemy. God grant that you may trip him this time and
put him completely out of business.
It was exceedingly good, but I fear somewhat indiscreet, of you to write
me such a long letter in the circumstances. I may say that I frequently have hoped
that somebody would undertake to write such a work on the federal reserve system as
you seem to have in mind. Doctor Willis' book was rather too voluminous and documentary to engage the interest even of those who understand the philosophy and technique of banking and currency. Then, as you say, it is too renlete with bias and
personal animosity. Against this offense I very earnestly warned him and succeeded
I understood
in having him eliminate a great many of the things originally written.
he was to expunge many of those that appear in his work; but, for reasons which apparently appealed to his judgment, he let them remain.
In the constructive part of my narrative of federal reserve legislation, to
be issued soon in book form by Doubleday, Page and Company, I devote one chapter to
a summary of the accomplishments of the federal reserve system, notably its great
service in the war period, its gold settlement agency, its exchange and pax collections system, the relation of its open market transactions to rates, its nart in
I
helping to restore foreign exchanges and quite a few other outstanding things.
also devote a chapter to the widespread misrepresentations of politicians with
respect to an alleged "deflation conspiracy" in the post-war period and show that
no such thing was ever contemplated or ever happened.

Of course these toPics could not, in a book like that I have written, be
I could Well wish that you had the health, and I the time and
treated completely.
capability to heln you to produce a notable work on the subject of the federal reserve system which would be accepted as a text book and an authoritative compendium.
But such a thing would tax you beyond human endurance and, from a literary point of
view, I could never convince muself that I EM adequately furnished. As to the
history of the legislation, its origin, the philosophy of it, with the many dramatic
episodes which attended its consideration and enactment, these are fairly well
traversed in the book I have written.
Very likely you and other compet
will think that I have sacrificed some detail in my ever present purpose to make.
the work intelligible to persons of average sense. The story itself is engaging
enough, but whether I have told it in an engaging way is a verdict that I shall
have to await.
Wishing you a prompt and permanent restoration to health, believe me always

enjamin Strong, Esq.,
Carpenter Cottage,

Biltmore Forest, N. C.


Sincerely yours,

(-6

-4
FRANCIS E. WARREN. WYO.. CHAIRMAN
REED SMOOT, UTAH
LEE S. OVERMAN. N. C.
WESLEY L. JONES. WASH.
WILLIAM J. HARRIS, GA.
CHARLES '."/S KANS.
CARTER GLASS. VA.
FRED.,
ANDRIEUS A. JONES. N. MEX.
kLE, ME.
LAWR'YE 3. PHIPPS, COLO. KENNETH MC CELLAR. TENN.
WILL
EDWIN S. BROUSSARD. B. MC KINLEY. ILL.
LA.
IRVIN. I-. LENROOT. WIS.
THOMAS F. BAYARD. DEL.
HENR'
KEYES. N. H.
JOHN S. KENDRICK. WYO.

fzjii,AA/

CniIc

Mcdcz Zenctle

COMMITTEE ON APPROPRIATIONS
KENNEDYF.REA.0

e

Lynchburg, Virginia,
October 16, 1925.

My dear Governor Strong:

Absence from home has prevented an
earlier acknowledgment of your kind note of October 10th.
I am writing now to express my pleasure at noting your safe
return from abroad and to assure you of my appreciation of
your kind invitation to visit the Federal Reserve: Bank at
New York before the convening of Congress in December.

This

I shall endeavor to do, perhaps sometime next month, when I
will notify you of my coming.
Always with cordial regards,
Sincerely yours,

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







S25 GI ir.lo

el
of

.

0-3N-3073

0,f000;1\0',

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October 10, 1925.

My dear Senator:

When you wrote me that you were planning to be in Europe

this summer, I had counted upon it as the opportunity to arrange

for you to visit ue at the bank here either on your way over or on
your return.

But as this plan we not poesible, I 1,m pondering

*tether you *ill be able to awke ue such e visit before Congress
aesembles in December end you become so buay.

Nothing short of a visit at the bank conveys any idea of
the magnitude of the work, the character of the organization, and the
way in which we deal with the various problems that have to be handled

here on 60 large E scale.
I do hope you can arrange to do it.

lath kindest regards, believe me,
Sincerely yours,

Honorable

trter Glass,

Lynchburg, Virginia.
BL,.LS




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June 16, 1925.

Lear Senator Gl&tika

hope you have not abandoned the idea of b.
European holiday, and that before you leave we mty neve the
pleasure of eeeing you here at the Federal Reserve Bank.

My plans have rather unexpectedly matured, so that
I am sailing for Europe on the 27th of June mytelf, and anal'
be accompanied by my daughter.

Is it poesible that you will be leaving before then,
ao that I xay hive opportunity to see you ia New York, or

possibly we might have the good fortune to rile;61-, abroad.

Jr any event, I hope you will advie.s (46 something of
your plans and let me cerry out the suggestion of sending you
some letters to banking friande who, I am sure, would enjoy
the privilege of meeting you.
With kindest regards, believe me,
Sincerely yours,

Fonorable Carter Glees,
Lynchburg, Virginia.







sorll 26, 19L.S.

My deer Senator Mesa:

Just a$3 soon ts the date of your trip hes

been i.lacided, won't you be good enough to let me know.

There is a bars pos,ibility of my being in

London towsra th letter flart of your stay ebroed, but

in any event, I should 1r! moon appreciste it it my
friende, (3overnor Non, r Chrles Addle of the
Fongkeng
enhiBankin Corromtion, and
Lord Revelstoke of Baring Brothers, might he the opportunity of meeting you, and poseibly some others if you
feel willinp to te burdened with additional letters.
And then if you could arrange to spend some time
with Us at the bank before sailing, I should te even more
pleased.

With kindest regards, believe me,
Sincerely yours,

Honorable Carter Glees,
Lynchburg, Virginia..

FRANCIS E. WARREN, WYO., CHAIRMAN
LEE S. OVERMAN. N. O.
WILLIAM J. HARRIS. GA.
CARTER GLASS, VA.
ANDRIEUS A. JONES. N. MEX.
KENNETH D. MC KELLAR. TEN N,
EDWIN S. BROUSSARD. LA.
THOMAS F. BAYARD.DEL.

REED SMOOT. UTAH
JONES, WASH.
WESLE,
'RI IS. KA NS.
CHARL
HALE. ME.
FREDEL
SELCE
SPENCER. MO.
LAWRENCE C. P HIPPS. COLO.
MC K I NLEY, ILL.
WILLI.
IRVINE.
NROOT. WIS.

Ziatez --Senate

M. M. NEELY. W.VA.

COMMITTEE ON APPROPRIATIONS

HENRY W. KEYES. N.H.
KENNEDY F. REA. OLERK

rdx,

Lynchburg, Virginia,

$A°

April 22, 1925,

Ve,\

ik*
tk?%

My dear Mr. Strong:

It was exceedingly kind of you to

offer to make my contemplated trip to Europe interesting
and agreeable.

Mrs. Glass and I are thinking of going

over sometime in June for two months.

However, our

arrangements are not quite definite yet.

Should we go

I would be very glad to avail myself of such invaluable
information as I am sure Mr. Norman could give me.

I

would particularly like to learn something first hand
of the English system of internal taxation.
Always with cordial regards,
Sincerely yours,

kfrf_ei. (54,24

Benjamin Strong, Esq.,
33 Liberty Street,
New York City.







OFFICE

fiL..CEIVED

30VERNOrn

/925
tvimp

April 17, 1925.

My dear Senator Girse:

A news item appetred in the papers yesterday to the
effect thet you wore plenning to esil for Europe st ,n early date.
This suggests that you may be in Now Tork loi enough to
see the Federal Reserve Bank. I am exceedingly snxious that you
should do 80, for whrt we do 15 60 much better exhf.b1ted by e look

at the orrsnization one its operatdona than In ony other way, that
I have long been hoping for an opportunity to show you throutb the
building.

It olso suErests that if you em going to London, there

, one or two of my friends there whom T am pvticularly anxious
tort you should meet. I don't wwnt to 'burden you with eociel or
other obligations, but I would eepecially appreciate this opportunity
to make you acquainted with Mr. Monteku Norman kho, aa you krow, has

been Governor of the Ba!nk of England for tte paot five ysers, and if
you cen spare tie time to have a visit with him, T. am sure that he
will make you acquainted with much of what 13 trFnspirinE in London
which would not be available from any other source.

If there is anything else that I can do to make yoor trip
interesting or agreeable, it rill be a very groat pleasure.
With kindest regards, believe me,
Eincerely yours,

Honortble Ctrter Glass,
Lynchburg, Virginia.
BS.1.8







411

February 20, 1925.

Dear Senator Glass:

This note will be presented to you by my bon ,
Philip G. Strong, vino i a bp ending th e week- end in Wd ehing ton
4coompailied by his friend, 14r. Hamilton,

m anxious that he should have the privilege of
meeting you, and he may also desire a pass to the Sene,te

gallery.

shall indeed appreciate any courtesy you feel
able to shop him, and beg to remain, with warmest regards,
Sincerely yours,

Hodorble Cb rt er G1 f,(2 8,

United States Senate,
gt,LA a i

, D. C.

April 23, 1223.

ky dear Senator Glass:
Through an inadvertence the oorreapondence had. with

was not sent with my

1

Lter of April 9, alld I trust you will pardos the

oareight.
our 6incere1y,

Honorable Cart,:.,,.;r (71h. b,

1ynchburV.




r. Raneolph

01.3

A?ril 9, 1923.
My dear Senetort

My old trouble has laid me low for a hit; but Iaw proeised a speedy
reconditioning, and given the jivilege or ElDre6, NOderkto work.

Thie letter, hottever, will 'reve to be a 2oor substitute for t talk
which 1 voe7d much ..,rer to have hed 4 ith y (u regrdinz, the hesringe soon to be

held, on tha

8ubjmat c)

State banks join

re,

the Federal Reserve Sp-J:0m.

as eell as I am able, suet e .!sey obnervatione whieh are beeed ueon the exeere

iences of the lest eight years.

First. The need for 9nlarged eeebershi is, 1 believe, obvioua, and I
ehell net reieat the stetement on that subject ehleb I made before the Joint
Commission of Agricultural Iaeuiry, which you have already read.
Seeind.

The reluctaace tn join the 46

weich haa tept aeo.A 8,000

it 5ri$es
g °there eocorling to the lection

banks. from eemberkhip, eannot :be laid to any eee outstendine CaLUEI.
frout

r lety or objectiens;

OD ErZ

u t aw.A, g

and circuestaacer of the ;eirticular Etate bank.
Third. Soess or thoeo nee connected with the 3yetem snd sots stuente

its affoire sincerely beliezu that Le /AM' and lett ret;,ce,sibls

!eAnks

should not be encouraed to Join; but I o not trzenally hold telim view.
Fourth.

Tte objeetione o'fored by Etate banks, whi: -Z1 seem to me of

greater influeece with /h. thn any others,
importare:e, as follows:




zoLlIa list, in order of relative

2

Senator Glees

April 9,

21

(a)

Sincere conviction that it will cause e reduction of ;fitv

(o)

25.

Seecific lose of interest on reserve bularces.

generally.

Seecific lose or so-called "exchange" on checks aid by mail., due

to the ;ar collection servicc of tte System.
Foesibae further regulation, supervision, exeisination reiortE, or
interference by Federal. 9uthori tiAs, in addition to present State supervieion,
which they fear would be irkeome and expensive.
(ft)

Uncertainty as to hether the Federal Reserve Bank will afford eeual

ccommodation tend et eetisfeetory eervi re in various nattere Ite old ertabl 4 ehed

corresoedents heve rurnished.

(f) Reluctance to eubmit to the "entrenee examination" in case

where

elow or doubtful ansete elOt be criticieed end applioei.ion to join be declined.
Other objectiene I believe to oe of minor influence with one exowetion,

the relative iv ortence of which 1 shall not attempt tc fix; but it ie coneiderable.
'''or over a year the banker of the country Leve been heering :any groundleee, but

eevertheleee entre charges, come of them inceed ridiccloue and fanteetic, ee to the
intelligence, honesty, integrity and good feith of the management or the $yetee and

of indivl duels in authority in the Eystev.

publicity, in fact have exhibited
Ihey 1-give

Theee ()bargee have been given tide

the churecterirtiee of organized propagenda.

44D/16 Much to create a wideerreed and dangerous public opinion that the

System is excoeed to rollticel attack and will in due time be the object of political
CO ntrol.

Now ae to these verious objections, the views of any State benkere in our
district, whose institutions joined and heve enjoyed tembership since about 1917,

confirm our belief that none of the objections above expressed, ere valid or would
be urged were membership in the System ziven u fair trial.

#ithout burdening

you with details, we do not find that merelerebip causee State banks reduced 1,roqte,



Senator Glass

April 9, 1923.

eee

e......her generally, or as to interest or exchange, - where earnings are reduced in

eome directione they are increesed in others.

There is but slight expense end

trouble caused by the reporte and eupervision reeuired, the servinee wo render,
witb but few exceptions, 3.1."3 equal to and in many reseects far exoeeein value

what reserve agents wore able to extend under the old eyetee of reeervee;

and of

course the objection as to entrance examinetion needs no cement.
having in mind tbo influeace with nohwesuber eanke (euch aa it nay ee) of

recent attacks upon the management of' the Federel Reeerve 7.yetee, it has seemed

tc mo that the problo

f Ets.te 'beak. membership i

*bout em follows:

There is no doubt that larger eemberehi.p in the System will benefit the
ebuntrys

There is r0 doubt that it will p,ive protectioe to the State banks which
they do not rc e joy.
There is no cuht that membershie will. impose none of the burdens,

financial er otherwise, Oich Stete bane apprehend.
There lE no doubt thet Cont berfAhip by the eligible /Alta eanke genera/Iy

nould reeult, ine more n 1.1.1_,1 dittribUtiOn 0r credit where eost

ered and be of

eepecial benefit, to rural. disericte.
rherefore, the ore'elem bear:lees one of method, of which there seeme to he

a choice of three.

Firet. To compel memberwhip, and undergo the teet of the Courts, us wee
doee when 7*,ee eionel Banking System tele established, and Siete bank currency

taxed out o'f existence.

Such a. plan which hee been advanced in various forme,

eauld, I fear, lead to endless contreverey and cause long ciels,y .1n

eoluticn cf.'

the prObleZi.
533eond.

TO Tiltke membership ecre ittractive ririial1y.

ueually proposed in two for
reeerve accounts.



His is

- larger dividends on our etoc.k and intereet on

The arfirtMelltS agNinSt any suet; procaale I believe are conclusive.

a

a

Senator Glass.

4

April V, 19215.

To introduce simply an incentive to make I.-,rotite would be a disaster to the System,

but to maxe profit earning obligatory eould literally undermine, if not destroy,
the accompliehmeat of the true purpoces of the Syetem.

Nor cioes this take into

account the disastrous inflation which euch a?roves, would literally iee:ccee upen
Third.

To educaee systematically, all eligible nonmember banks, to tre

value or membership and appeal bath to their best intereetP and to their public

spirit.

This, SOOTSS to ale to he the eost feeeible plan and the one promising most

eatisfactory results.

it 18 the one eursued in our district with such striking

succese, as we have the largest eembership, both in percentage of members and in
peroentrize of resources, of any istrict, and practical y no complaint aboet cost

or services or eupervision.

there is of course the ever present possibility that this move
toward larger membership might become the opportunity for unwiee amendmente to the

Federal Reserve Act, and especially for undoing the par system.

Att to the lettte,r,

I am taking the liberty of enclosine eopy of e. letter which I recently sent to
er. John W. Davis, and which as intended to emphasize what I believe is the view

,ve hold in New York on this subject.

As nothing can poesibly be gained by inviting further oontnaversy about

matters touched upon in this letter, i air. vending it to you Te3reonally, simply to
supplement our various coeverse.tions of last: year.

Hoeing that you keep well and with cordial regards, I al,
Sincerely yours,

coGefi'd
Honoreble Carter :31ess,
Lynchburg, Va.
ce

-

7

P. 5. The Davis letter is one written eome eonthe ago ati raeult of correspondence with
Randolph of Atlanta, and -pointed out
Yee ia.in eurose of 2ar collection eyetem
should be put before Supreee Court, or we ...sieht have case decided on triviel issues
erowine out of over zeal by SO Me stupid folks.



Eeptember 30, 1922.
ce

Dear Senator Glaes:

°-

la0-

I have just dictated the first draft of a letter which I hope to
be able to send to you early next week, together with data in reply to your
inquiry.

In dictating it, it occurred to me that no one can really

visualize the enormous cperntione of this institution, which give such amele

evidence of the need fcr adequate quarter, without going through it.
I hesitate to even suggest- your making a trip to New York for

that purpose, but it occurs to we that before Congress reassembles you may
be somewhere in cur neighborhood, possibly in Washington, and might Peel

tempted to take the opportunity to make us a visit for that purpose.
The developmentaof more activity in business during the past

few months is now being strikingly reflected in the activity of the businese
of the bank in its various serwioe departments, that ia, the money department,

the various cheek and collection departments, etc., etc.

After the

temporary reductions which we were able to make in our force lest year and

early this year, we now, unfortunately, find that we are again undermanned,

and the demand for clerical labor hae grown to such an extent that we are

really encountering considerable difficulty in building un our force again
to a point where we can handle the vast volume of our bueinees.

I suppose,

also, you understand the problem with which we are confronted in having

one-half of the outstanding Victory notes fall due Decsaber 15, which will
probably necessitate the payment of hundreds of thousands of bonds which

are still held by small investors.

Than on the first of January we must

devise means, in cooperation with the Post Office Department, for paying



September 50, 1922.

2

our proportion of over t800 millions of War Savings and Thrift Stampa,

which mature at that time; and again on the following .ay 15, we must be

prepared to pay off the other half of the maturing Victory notes.
I would roughly estimate that in New York City alone, without
regard

to

the rest of our district, 4ar Savings and Thrift Stamps are

to-day held by somewhere between a million and a million and a half eeople.

I wonder if anyoee stops to reflect what would happen if these operations
had to be conducted with the old machinery - befare the eetablishment of the

Federal Reserve Banks - one little Subtreaeury Building, forty Post Office
offices in New York, and an unorganized banking community.

not be done.

It just could

And these are the things ',hie require us to have an adequate

organization, and lead us to expect that we will always require such an
organization.

So

I do wish that sometime you can get in and see it all.
Yours very truly,

Honorable Carter Glass,
Lynchburg, Va.
BS.Di




November 15, 1922..

My dear Senator:

Your note has relieved my mind of the fear I had preceding

your secretary's letter that you were in danger of suffering a very

distressing loss.

I rejoice with you that the misfortune is no

greater, although truly it is bad enough to lose any part of one's
sight.
With kindest regards and best wishes for Major Glass' prompt
recovery, I am,
Very sincerely yours,

Honorable Garter Glass,
Lynchburg,
BS.MM




FRANCIS E. WARREN, WYO., CHAIRMAN.
REED SMOOT. UTAH.
LEE S. OVERMAN, N. C.
WESLEY L. JONES. WASH.
CRADLE
TIS, KANS.
CHARLES A. CULEIERSON, TEX.
WILLIA
"RYON. IOWA.
WILLIAM J. HARRIS, GA.
FREDERIC
.ALE. ME.
CARTER GLASS, VA.
ANDRIEUS A. JONES, N. MEX.
SELDEN
,ENCER. MO.
PHIPPS, COLO.
LAWREN
EWBERRY, MICH.
TRUMAN

ROBERT L. OWEN, OKLA.

'AlCnifett Ztatez Zonate,
COMMITTEE ON APPROPRIATIONS.

WILLIAM A. MC KINLEY. ILL.
KENNEDY F. SEA. CLERIC.

Lynchburg, Virginia,

A.

5

Nov. 13, 1922.

My dear Governor:




I am very grateful for your kind telegram
and letter of sympathy.

For a while we feared that the

life of Major Glass was in the balance; but we are happy
now to be assured by attending physicians that he will recover with no greater damage than the loss of his left eye.
This is, to be sure, very distressing; but we are so thankful that his life is spared that we hesitate to grieve too
much over the lesser misfortune.
With cordial regards and best wishes,
Sincerely yours,

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




It.
17\

,11140

November 10, 1922.

zy dear r.fliss Wallace:
Your note

the 9th is ,just received, md I have

learned with great distr6se tlat Senator class' on ha.8 suffered
a desperate accident.

This is 'most unfortun:.te, and I car, well

understand ttSenator Glass is unable to give attentior_ to his
co rraspon dance.

I have ,.ust te1egra7hed ry re6rets, and hope you will
be good enough, if you have c):. ortunity, to convey then to him
personally.

Ycurs very truly,

Miss Mary Wallace,

Secretary to Senator Glass,
Lynchburg, V a.
IS.VM




Form 1228A

Charge to the account of
CLA'

,F SERVICE DESIRED

enj.§_taamg41_5 Nassau

Letter

WESTE AS NA UNION
TELIttei AM

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

M

Receiver's No.

WESTERN UNION

.gram

Check

GEORGE W. E. ATKINS. FIRST VICEPRESIDENT

NEWCOMB CARLTON. PRESIDENT

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




Honorable

Time Filed

November 10, 1922

Carter Glass

Lynchburg, Va.
Am deeply distressed to learn of

your son's

accident and earnestly hope for his prompt recovery
3enj Strong

c

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 this.
one-half 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 consh' acion
whereof it is agreed between the sender of the message and this company as follows:
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
arepeated-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 message rec
kt for
transmission at the repeated-message rate beyond the sum of five thousand dollars, unless specially valued; nor in any case for delays arising from unavoidable
Tuption in the working of its lines; 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, N. _ether
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.
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 towne. 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 reaspnable 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.
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

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 busi-

ness 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.
SPECIAL TERMS APPLYING TO DAY LETTERS:

In further consideration of the reduced rate for this special Day
Letter service, the following special terms in addition to those enuaerated above are hereby agreed to:
A. Day Letters may be forwarded by the Telegraph Company as
t deferred service and the transmission and delivery of such Day
1.etters is, in all respects, subordinate to the priority of transmission
)nd 'delivery of regular telegrams.
R. Day Letters shall be written in plain English. Code language
.s not permissible.
c. This Day Letter is received subject to the express understand-




ing and agreement that the Company does not undertake that a
Day 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 NIGHT LETTERS:

In further consideration of the reduced rates 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
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. Code language
is not permissible.
No employee of the Company is authorized to vary the foregoing.

FRANCIS E. WARREN, WYO.. CHAIRMAN.
LEE S. OVERMAN, N. C.
ROBERT L. OWEN. OKLA.
CHARLES A. CULBERSON. TEX.

REED SMOOT. UTAH.
WESLEY L. JONES. WASH.
CHARLES
.TIS, KANS.
1LE, ME.
FREER
SEI.
INCER, MO.
'MIFFS. COLO.
NBERRY. MICH.
TRUMAN

WILLIAM
CARTER GLASS. VA.
ANDRIEUS A. JONES, N. MEX.

WILLIA

9JCniteti Zfatez Zenale)
C KINLEY. ILL.

COMMITTEE ON APPROPRIATIONS.

KENNEDY F. REA. CLERK.




Lynchburg, Virginia,

Nov. 9, 1922

My dear Governor Strong:

Owing to a desperate accident
to Senator Glass' elder son, Major Powell Glass, who
was badly shot while hunting with a friend some days
ago, Mr. Class has been unable to give attention to
correspondence of any description, but will write you
in a short while.

Very truly,

Secretary to Senator Glass.

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




October 17, 1922.

My dear Senator:

I am mortified that there has been delay in sendingyou
the data which I promised two weeks ago.

It took more time to

get the figures out than I had anticipated, and besides that I
was engaged in Washington all of last week at our reserve bank
conference and unable to conclude the preparation of my letter.
You will be somewhat amused I believe by the enclosed
letter from my mother and the article to which she refers.
I told you in Washington,

As

I have maintained and expect to con-

tinue to maintain silence in regard to attacks of this character.

They will doubtless become more active and violent if Governor

Harding is not reappointed, but as yet I have seen nothing to be
gained by becoming engaged in personal controvere-y which will

simply afford added opportunity for misrepresentation.
Yours sincerely,

Honorable Garter
Lynchburg, Va.
3S.YAM




Glass,

beetember 25, 1922.

PERSONAL

Dear Senator Glass:

at()

-se'

n-ea

Your letter of September 21 reached the office after I left
last week for the week-end, and wes only received this morning.

The figures end a ctetement of the facts relating to the wet
of our bank building are being put in shape, and I hope to send them to

you in a day or two, together with s full statement IL respect of salaries.
We much appreciate the continued interest you have shown in

eeese matters, and I shall see that ootplete Inforeation is In your hands
as promptly es possible.
The contention that a single bulk in New York

in

e larger

business than ours is successfully conducted with 200 employees is perfectly
ridiculous.

He, of couree, refers to the First Sational Sank, which can

in no sense ee compared to this bank, as every intelligent portion must
know.

What you have heard from Senator Keed and Senator New is rest
encouraging.

The President has never stated to me positively thee he would

nominate Governor Harding, but I had a clear intimation that he was likely
to do co end that his hesitation had been somewhat induced or increased by

advices that he bad received that Governor Harding'e confirmation in the
Seeete SSE impossible, partly because of the plea which. Senator H flin
might advance that Governor Harding SAE personally obnoxious to him.

how

could such a /gee possibly prevail as to an appointment of this character

say more than it could in the case of a Cabinet officer?



September 26, 1922

2

Nevertheless, I have no doubt that Senator Heflin is liable to
make exactly that opposition to the confirmation, but I have full confidence that your own influence and that of others who feel we you do will
av.orcome eventhat difficulty.

With warmest re4ard8, believe le,

Faithfully pours,

Honorable Carter Glaze,
United Stntes Senate,
Washington, D. C.
KAM

(copy to Lynchburg, Va.)




February 18, 19'n.
Dear Senator lass:

YJur letter f February 16 tas given me s great deal of pleasure,
eepeclally as it removes from my mind any remote lingering doubt as to your

attitude tovards any mutter concerning vhich our views might have differed
in ..L'ast years.

one thin,' you may be assured; no amount of critinis oT the

character eiiCh se have recently experienced sill
continue to

ma in my determination

4hatI can to rote a eund development of the business of

thie bank 4nd of the Federal Reserve System.

It is the last piuce of scrk

that I expect to do, and the only circumetance.vhich Jould lead me to abandon
it would be my _summary dismissal on the one hand, or failure of my health on

the other.

At the present moment I see no likelihood of oither circumstance

arising, and 1 can assure you that these malicious and indecent misr,presunta-

tions have nut lessened my enthusiasm a particle wr sill they On so.
shall certainly give myaalf the pleasure of seeing you then I am
next in lashington, and meantime believe me sith sincare respect,
Yours faithfully,

Honorable Carter

United Uates Senate,
fashington, D. C.
ES.




FRANCIS E. WARREN, WYO., CHAIRMAN .
REED SMOOT, UTAH.
LEES. OVERMAN, N. C.
ROBERT L. OWEN. OKLA.
WESLEY L. JONES. WASH.
CHARLF
CHARLES A. CULBERSON, TEX.
TIS. KANS.
ENYON, IOWA.
WILLIAM J. HA RRIS.OA.
WILLt
FRE
HALE, ME.
CARTER GLASS, VA.
ANDRIEUS A. JONES, N MEX.
SELDEN . SPENCER, MO.

- -. PHIPPS, COLO.
LA wRE
TRUMAN
EWBERRY, MICH.

WILLIAI

RE KINLEY. ILL.
KENNEDY F. SEA. CLERK.

11Cnifeb Zfatez Zenate/
COMMITTEE ON APPROPRIATIONS.

At-FEB 18 1922

February 16, 1922.

R Ft

PERSONAL

My dear Governor strong:
I have yours of February 15th and deeply appreciate
your commendation of my speecn in the Senate in defense of the Federal
Reserve Banking System. It is full compensation for the work involved
to realize that so many persons who have an understanding of the problem
approve wnat I said on the subject.
While I would have been glad to receive your longer letter, I
beg to assure you that you do not need to explain to me any of the personal
aspects of the matter in controversy. I am sure you have always been
On this
guided by honest conviction, wnether dead rignt or dead wrong.
score you and I once had a difference which was cleared up and adjusted,
leaving me with an unbiased appreciation of the able service performed
by you under difficult circumstances in trying times.
Senator Ileflin
was indecent enough to make a passing reference to this incident in the
Senate not long ago, naving obviously received the suggestion from another
source; but there is nothing too contemptiole for some people to do.
I have pleasure in assuring you that my health is good enough;
but my strength has been right much taxed, if not almost exhausted, by
failure to take a relaxation from puolic life since I begun work in
April 1912 on Federal Reserve legislation. My energies are getting
burnt out; out I am glad I had enougn left to say some tnings to and
about some people in the Senate the other day.

I hope very much your health is fully restored and that your
labors will not ever again be interrupted b; illness.
Be sure to come
to see me when next you are in Washington.
Sincerely yours,

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




February 15, 1922.

PERSONAL

My dear Senator:

Yesterday's mail brought me

in pamphlet

form a copy of the epeech ehich

you delivered in the Senate on January 16 and 17.

I had al

appeared in the Congressional Record some time after it was delivered, and at once
prepared a long

letter to you

expressing just what I felt about the speech, about

your attitude, and explaining in more detail than I have ever had opportunity to
do, some of the more personal aspects of these matters which are being so misrepresented.

Upon reflection I did not send the letter because it hardly eeemed fair
to inflict you with such a document when you are so busy, and I am to-day writing
instead to express to you what a very deep feeling of pleasare and satisfaction
it gave me to read your statement.

I hope you will pardon my attempting to ex-

press,quite inadequetely,the respect and

admirstion which

I felt for you after

reading it, and appreciating what it means to be able to present the truth in
such vigorous and convincing fashion as you did

to

your colleagues in the Senate.

In some ways I can not but feel that your speech is of service to the country
second only in importance to the service which you originally performed when you
secured

the

passsge of the Federal Reserve Act.

There were a few words at the end of what you said which caused me some

There was just a hint that you were feeling some anxiety about your own

distress.
health.

This is a subject which would naturally arouse my anxiety because of my

own experience in past years.

trust that the anxieties and the
I sincerely

arduous

labor, of which I fear you make yourself the victim, are not proving too great a




February 15, 1922.

tax upon your strength.
Some day soon when the business of the bank takes me to Washington, I

hope that you will give me opportunity to say to you in person what I have now

expressed so inadequately In this letter.
You

ilLI hope, understand. my also saying that I feel that I reco6ni7e

your own handwriting on the envelope which contained the pamphlet that reached me

yesterday, and that indeed pleased me very much alit the evidence of your personal

thoughtfulness in sending it to Ilse.:

Fith kindest regards, believe me,
Faithfully yours,

Honorable Carter Class,
United States Senate,
tashington, 77 C.
BS.W1







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