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PER 30NAL: August 8, 1927. My dear Governor Inouye: It seems desirable that I should write you something of the reason for our recent change in discount rate, specially as your representative in Newmade personal inquiry on the subject. York Las Under ordinary circimet.nces et this season in the yesr when demands upon us for credit for crop moving and other businees purposes are generally rather heavy, we wo ild not Lave reduced the rste, and cert-inly not in the fEe e of a very active speculation in securities which is taking place in New York and 'Filch is employing a very large amount of credit. Outweighing these argu- mente, however, were the two prificipcd ones of the need for easing the movement of the crop this year with as moderate credit charges as po :sable, ane more especially of the need for easing the strain which seems to have been developing upon European exchanges which, if allowed to continue through the fall and early winter when such heavy payments have to re made to us for our exports, might have imposed a very heavy strain upon European sank reserves and been .ccompanied by a very heavy movement of gold to this country. In a word, it seemed better to let the speculator profit as he would, and poesibly later pay as he likely muet, for speculative excesses, and develop such s rclationehip between the level of money rates in this country ana in Blrop,; .n m-rkets as would insure comparative ease in meeting payments in this country over the next few months. For a time this spring and e,irly summer there appeared in different Governor Inouye Bank of Japan. 2 sections and various industries in the United States some alight receesion or hesitation in Wetness. It may well be that this reduction in discount rates which is now effective in five of our Reserve Banks will prove to he some etimuletion to business. crop And as the /proepecte non seem to be favoreble, we are hopeful thet the business reaction which has been prophesied off and on for some time may not occur. Barring the epecul-.tion in stocks above referred to, the business situa- tion and our money merkets, and particularly our Government financee, are all in most comfortable position and we felt that ali -htly lo ,er money rates would be some contribution towards continuance of these conditions. I shall be most ple'.sed inde, d to Leer from you of developments in Japan. 'le re-d what is sent to us and what is published in the press with greet interest and are encouraged to believe that your recent difficulties are vorkine out net' efactorily. ie certainly hop.: 60. lath assurances of my eateem and best wishes to your associetee, believe e Faithfully yours, Mr. Jurcosuke Inouye, Governor, The bunk of Japan, Tokyo, Javn. Tokio ent _ay 11, 1927. Rec'd 'ay 11, 1927. York, Federal reserve Bank. of New TTew York City, Y. For Strong kind message Deeply touched by your Please accept my sincerest thanks. Junnosuke Inouye. ' December 4, 1524. Dear kr. Inouye: I am today giving spy friend, Mr. Jerome D. Greene, letter of introduction ddreseed to you, a copy of which is enclosed with thie. dr. Greene ie a pa.rtner in the Am:::rican banking firm of Lae, Higc;ineon Company, one of tte leading firma in thie country 4th a large responeibility, and bears a very successful and honorable record in the handling of security issues and a general barikin6 business. They have offices, 48 you nu doubt know, in Boston, New Tors, London anc elsewhere. kr. Greene, I understand, is visiting Japan for the purpose of invoetigating business enterprizes, and I commend him to our consideration and courtesy. He is a warm personal friend whom I have kuoun for many years, and you may deal with him with confidence. Aseuring you of my appreciation of e.nythirig you .may be able to do to further the object of his trip, which indeed may prove to be equally in the interests of your country, I be to remain Very tvuly yours, Honorable Junnosuke Inouye, 31 kikawaidai - mach', Azabu Tokyo, Jepan. Enc. Jctoter 31, 1924. My dear Mr. Inouye; I sa._ just, i'afored with a call from Yr. Takashi Aoki, who preeentec your letter of introduction of September.29. I assured hoki that if there was anything I could do to facilitate his do rk in London, it would inateci be a pied.s.lre, both on your account and hie, own. I was unable to show him our bank personally hut some of our other officers did so, .rIc I telieve he 11a8 greatly pleased. Hoping that you keep well, ni with warmest regards, I am Yours sincerely, dY) J. Inouye, Esq., Ma4awadai-machi, Azabu, Tokyo, Japan. B5/12 4 October 2F3, 1924. My dear Yr. Inouye: It was a great pleasure on my return to the office yesterday after a month's holidky, to receive your very kind letter of Pertembor 29. Your visit here see alto ether too :tort to effort me vin opportunity wti.ch I resTly desired to return, sit any r,,..te in prt, some of the any courtesies which you extended to s: w.b.!le I wi,e in Japftn. You surely mutt it us again. It will interest me very 'such to levrn eomfIttling of your pltms ts soon as you art e :J., write Te. I `11ye T,ondren whetter your stort pJliTiCal career migut subject us to tte misfortune of our not having tray further aysuciation or contct with you in connection with our bank matters, which would he a source of grief to all of us. Pith kindest persons' regards, believe me, Most sincerely yours, Mr. J. Inouye, 51, Mikaiadai-machl, Alabu, Tokyo, Jwpftra. ACKNOW LEDOED 31, Makawadai-machi, Azabu, Tokyo, Japan. OCT 3 1 1924 11 St September 29th, 1924. Dear Governor Strong, I venture to introduce to you Mr. Takashi Aoki of the Bank of Japan who is just leaving here for London as superientendent of its agency there. I wish you would kindly receive him when he will call on you, and whatever courtesy you may extend to him will be greatly appreciated by me. Yours sincerely, Benjamin Strong,, Esq., Federal Reserve Bank of :'ew York, 15 Nassau Street, New YorK. 401 31, Mikawadai-machi, Azabu, Tokyo, Japan. September 29th, 1924. My dear Governor Strong, I am glad to tell you that I returned home safely on the 25th of August via Canada, and take this opportunity of expressing to you my sincerest thanks for all your courtesies extended to me while staying in New York. In this short note telling you of my safe voyage home, I cannot allow it to pass without adding a line to say what a pleasant time I had enjoyed with you in New York. Indeed, the time which had been spent with you has been the most enjoyable and interesting one in my present visit to America and Europe, that I never forget and will cherish long in my life, and I am exceedingly grateful to you for the best opportunity afforded to me to renew my friendship with you and to have had such a nice time to enjoy with you. With kindest regards, Believe me Yours sincerely, Benjamin Strong, Esq., Federal Reserve Bank of New York, 15 Nassau Street, New York. S ZI3e Tofiofjama. Apecie cant, 7, i3ightips4Tate, 19th liaroh, 1924. LV dear Lir.strong, Your very kind letter of the 20th ultimo was handed to me immediately after my arrival in London and i am extremely obliged for the very comprehensive personal views you have furnished to me in respect of the negotiations in the matter of the recent Japanese tiovernment Loan so successfully issued. Lir. Longo iviori and ilr. L'ono,lo iatsumi have also acquainted me with the invaluable advice you tendered and the help you afforded, and i would wish to express to you my most sincere thanks. According to my present plans i propose to stay in this country and on the continent until August. i hope, therefore, to be in New xork in the early autumn, when I am anticipating with much pleasure, accepting your kind invitation. in the meantime, with best wishes, believe me, lours very sincerely, Benj.trong, .eederal reserve Bank, NEV IORK. WESTE CLASS OF SERVICE SYMBOL Te gram D er Message NI ht Letter -V none 4,1 Blue Nite UNION 1NA WESTERN UNION NL TEL these three symbols appears after the check (number of ds) this is a telegram. Otherts character is indicated by the of NEWCOMB CARLTON, PRESIDENT I appearing after the check. WXZW, Telegram Day Letter Blue Night Message Nite NihtLeee 7 GEORGE CLASS OF SERVICE SYMBOL t*ATKINS. FIRST VICE-PRESIDENT NL It none of these three symbols appears after the check (number s *ads) this is a telegram. RECEIVED AT FA43 WIRELESS F TOKIO 47/43 is BENJAMIN STRONG FEDERAL REgERVE BANK NEWYORK PLEASE ACCEPT MY igaARTFEILV THANKS FOR YOUR KIND ASSISTANCE RE FORMATION OF LONGW I SHEDFOR POWERFUL AND INFLUFN, T I AL GROUP LOOKING FORWARD TO RENEMING OUR ACQUAINTANCE ERE LONG AS I START TODAY ON WORLDS TOUR VIA SUEZ JUNNOSUKE INOUYE,. -J iJ Other nisei is character is indicated by to symbol appearing after the check. Mr. Strong 4111 Mr. Hoehino says that CovernmLinout. is on the Ocean at the present time, and he does n-ot know his cable address or the name of the he is travelling on. ilpamer Governor Inouye is expected in London about March 20th, and mania addressed to him c/o Yokohama Specie Bank will reach him. Mc. ACkNOWLEDOED FEB 2 0 1924 31, Mikawadai-machi, Azabu-ku, Tokyo, Japan. ri Janua My dear Governor Strong, I write these lines to infor shortly leaving here on a tour round visit London first via the Indian Oce I am availing myself of the the resignation on the 7th !met. of t in which I was Minister of Finance, o lese-majesty on the part of a certain His Highness the Prince Regent who wa House of Peers to open the Diet. My experience as Minister of the short duration of only four month however, that a fairly good result wa endeavour for framing the policy of r important juncture immediately after I feel I am quite satisfied with the to undertake even for so short a time I am gratified to learn that kind to Mr. Tatsumi of the Yokohama S the pleasure of introducing to you, a so much assistance, for which you wil 2 sincere thanks. Further, information reached me later on that as a result of your valuable advice being given to our financial attache, Mr. Mori, and the Vice-President Mr. Ichinomiya of the Yokohama Specie Bank, when you kindly received them for an interview, negotiations for our Government loan are in progress favourably, and I wish to take this opportunity of expressing my heartfelt thanks to you. In the early fall I shall be in your country and look forward to the pleasure of being able to see you. With kindest regards, Believe me Yours sincerely, Benjamin Strong, Esq., Governor, Federal Reserve Bank of New York, New York. December flip 1923. My dear Mr. Inouye: This morning I have had the pleasure of meeting Mr. Tateumi, who brinFe ith him your kind note of introduction of November 29. He will .dvise you, I understand, by cable of the result of our discussion, and I am sure you must realize that this whole subject is one to which we have been giving a good deal of thought since last September, and I do not need to assure you that the very best !,deice end information at my command will he available for you and for Mr. Thtsumi in connection with his mission. Considering the importance of the matter, I have taken th liberty of sending you a cable, a confirmation of which is enclosed, 5nd which, while rather cryptic, will I hope convey to you promptly my desire to be of service in every manner possible. You are most kind to send Mr. Tatsumi to me, and I appreciate this further evidence of your confidence and friendship. Faithfull Honorable Junnosuke Inouye, Minister of Finance, Tokyo, Japan. 132.MM enc. yours, COPY OF OUTGOING CABLEGRAM December 28, 193 Inouye Finance Department Tokyo Your note of introduction of November 29 was presented by Mr. Tatsumi today and I a.- now cabling to assure you that every assistance and advice possible will be gladly furnished him for the furtherance of the matter which we have discussed Strong The Department of Finance, Tokyo, Japan. AI December 13th, 1923. My dear Governor Strong, Your kind letter of November let reached me some days ago, and, in the first instance, let me congratulate you upon your restored health. My writing to you personally is long overdue, and I regret that every chance of doing so has slipped away, although I often wanted to do; but I feel quite sure that you will not much mind it. Now I need hardly tell you how anxious we have been about your illness, and indeed, it is quite a relief to me to hear from you that your improved health has enabled you to be et your office, for I feel I have cause more than anyone else to rejoice over your having become yourself again. I appreciate very much your sentiments felt at the time of my new appointment which I had to accept, and wish to thank you for your kind sympathy with me in what you say is the tremendous undertaking that confronts me. My only desideratum at the present moment is that the outside assistance of my friends will enable me to emerge from the dire ordeal, so as to be able to serve my country successfully. Disastrous and indeed appalling as the 40 calamity that befell my country is, the silver lining to the cloud consists in the universal expression of sympathy it has evoked. In particular, the sympathy of every section of your countrymen so promptly and so generously extended to our suffering people is really most gratifying. My countrymen were deeply touched to witness every day the actual activities of your Red Cross here, which have been a subject of much admiration and esteem among us, and I need hardly assure you that profound gratitude is being felt by all here. It is very kind of you to give me your important suggestions as to financing. At this stage, I am not quite certain to what extent financing will be done in the foreign market, as it should be done as a matter of course. My plan is that the money required for reconstruction purposes would be found in the home market as far as possible, while the foreign purchases of all kinds of material not obtainable in this country should be financed abroad. The fundamental point is that, on the one hand, a check may be put on the danger of inflation inevitably to be involved in the direct introduction of foreign capital, while, on the other, the home market should not be strained unnecessarily too much. when the time comes, as it should come, I shall not fail - 3 - to avail myself of your good offices in the way that you suggest to me. In the meantime, I trust that you will be so good as to advise me from time to time on the question that will engross all my thoughts. I sincerely hope that my severance of connection with the Bank of Japan will in no way affect the friendship that we have ever cherished between us. With all good wishes, and with the greetings of the Season, Believe me Yours sincerely, Benjamin Strong, Esq., Federal Reserve Bank of New York, New York. Finance Department. Tokyo, 29th November, 1923. My Dear Mr, Strong, This is to introduce to you Mr. K. Tatsumi, Director of the Yokohama Specie Bank, who is now on the way to London in connection with the Bank's business arising from the financial side of the reconstruction plan now contemplated here. I shall thank you very much if you will grant him an interview and give him such information and advice as will be useful in furtherance of the business with which he is entrusted. Yours faithfully, Benj. Strong, Esq., Gov. of the Federal Reserve Bank, N. Y. City. a To ii1a Excellency, The Honorable Mr. Inouye November 1, 1923. emurce, your cane V:13 reccivrd ftsslly, after I had F,Icceedd in getting sord through our Department. of Stte in regard to the fete of a number of my friends, concerning, whom I asked them to make inquiry for me, and I expect I should thank your Ambssssdor, who is also my friend, Vs. Hanihsr, for hie kindnees in facilitating my getting this prompt advice. 'Jay I take the liberty of writing you just e few personal words :bout the sentiment which hue resulted in this country from your osn disaatsr and the suffering which has come from it. On every hmnd we hear expressions of friendship, sympathy and of desire to be of seeistanoe. It was really a great tribute to the Japanese people when the Red Cross seked for subscriptions of 0,000,'").00 to have $10,000,000 subscribed in a few days - in fact, almost in a few hours call beins m(4,s. from the This is but one of many evidences shish I have received of the univers-1 Baling of sarm friendship. Nos cf course I know that financing, sill be required, and it is most natural that you should turn to this market. Without the slightest knowledge of your plans or of any proposals stitch may be under discussion - because 1 hays co far met none of my bankins friends - I can only 7enture to suggest tao things: One is that to the greatest extent pocaible cny financing done in this country be done in the nature of a nstional movement for Japanese rehabilitation, squarely stated, to he based upon the known -Tv! intimate ralationship and inter- dependence which we have upon each other in oommerce and trade and in the sympathy which we both wish to cultivate between the people o' the two countries. Mile sf coarse It would he a bLnkers' transsotion, T should 'lope that it would be eo arranged that praotically our entire banking organization would take part. I know that you will understand that this suggestion ie inssired entirely by my friendship and a desire to see the utmost success in slay financing th,FA is eons in this country. I Novembor 1 3 1923. The c'her and even more personpl one ie to aeeure you that any edvioe or information which you need from me or from our organization will he furnished promptly =r3c1 effectively by cable and you must not heel:Ate at any time to cell It will be disintereeted end upon us. frank and I should bone th t. it might Drove useful. At a later tine!. i 'hall write you something of business conditions, and especially the financial and investment situation in this country, but such a letter just now would De premature xa I Aeve only been at the office once and feel myself very much out of touch with what haa been going on. I 2.al glad to be r.ole to advise you that my health seems to be very sutiefactorily restored. itti every goon wish, believe me, Sincerely, your friend, To Hie Fzoellency, The Honorable Mr. Junnosuke Inouye, Minister of Finance, Tokyo, Japan. 55. MM COPY OF CABLEGRA OUTGOING September 8, 1923. Inouye, Bank of Japan, Tokio. Greatly relieved to learn of your safety and delighted that you have treasury portfolio. Am shocked and distressed by the terrible calamity your country has suffered and will be anxious about my friends especially your associates until I hear of their safety. know if I can be of any service in this country. Strong. Please let me -111777,!!!!!MI Charge to the account of SERVICE DESIRED Jegram F;:deral Reecirve Bank of New York WESTE r's aglig7 NA Day Letter UNION WESTERN UNION TEL Night Message Night Letter Patrons should mark an X opposite the class of service desired: OTHERWISE THE MESSAGE WILL BE TRANSMITTED AS A FULLRATE TELEGRAM NEWCOMB CARLTON. PRESIDENT Receiver's No. Check AM Time Filed GEORGE W. E. ATKINS. FIRST VICE-PRESIDENT Send the following message, subject to the terms on back hereof, which are hereby agreed to October 6 192j, Day Letter Benj. Strong, Es,., Broadmoor, Colorado Sprin s , Colorado. Followins wireless from Inouye dated Tokio October fifth Please accept my sincere th:like for your kind message for my country and myself hest assured that, my old assocites were all safe whenever needed. G. BETER Shall ask your assist:: Form 1201 CLASS OF SERVICE SYMBOL Telegram Da" 1 Blue WESTE AeNI UNION If r app worn Nite TEL ir A M three symbols .ar the cheek (number of cats is a telegram. Other- wise its character is indicated by the symbcppearing after the check. NEWCOMB CARLTON. PRESIDENT B126F HN 34 JG RCA WIRELESS V I A Stong Z1170 N L three symbols air the check (number of words) Ildi is a telegram. Oth erwisnits character is indicated by the ALWAYS Federal Reserve 8. of NY 120 Broadway FEDRESERVE N&YORK LEASE ACCEPT MY SINCERE THANKS FOR YOUR KIND MESSAGE FOR MY OUNTRY AND MYSELF BE REST ASSURED THAT MY OLD ASSOCIATES WERE ateirbig-thesa app TOK 10 OCT 5 1923 INOUYE Nite keit Letter I SANFR ANC I SCO LL SAFE SHALL ASK YOUR ASSISTANCE WHENEVER NEEDED Blue ' GEORGE W. E. ATKINS. FIRST VICEPRESIDENT RECEIVED AT 40 BROAD STREET, (CENTRAL CABLE OFFICE,) NEW YORK, N. Y. OPEN STONG Day Lettor,_ , Night Writs* Pi la:z;4t, these SYMBOL Telegram WESTERN UNION NL .ssage CLASS OF SERVICE . aptiiihing attar the check. WESTE Sr BOL aS OF SERVICE TELEGRAM NITE ESSAGE LETTER UNION N of these three symbols rs fter the check SYMBOL TELEGRAM number of 5 ,--, a telegram. 'Other- c: wise ija.alivragter is i hdicated bythe syrnb .poearing after the check. NEW COMB CARLTON. PRESIDENT GEORGE W. E. ATKINS FIRST VICE-PRESIDENT DAY LETTER BLUE NIGHT MESSAGE NITE NIGHT LETTER BLUE DAY LETTER CLASS OF SERVICE NL If none of these three symbols appears after the check number of words) this is a telegram. Other. wise its character is indicated by the symbol appearing after the check. The!...filing time as shown in the date lipe on full-rate telegrams and day letters, and the time of receipt at destination as shown on all messages, is STANDARD TIME RECEIVED AT itN r) FB7i , e, 11C;;NOWLEDOED RCA WIRELESVIA SANFRANCISCC) TOKIG 5 STRONG JO 4% Reserve Anita' 1 ) .// NOV 1 - 1923 R. S. FEDRESERVE NEWYORK (NY)- PLEASE ACCEPT FY SINCERE THANKS FOR YOUR KIND MESSAGE FOR MY COUNTRY AND MYSELF BE REST ASSURED THAT MY OLD ASSOCIATES WERE ALL SAFE SHALL ASK YOUR ASSISTANCE WHENEVER NEEDED V IOUYE recember 19, 122Z. #2 Governer Inouye necember 19, 1922. 4401tveii eeriods of years is likely to show a normal rite of increase of about 8 or 7 per cent. V If, therefore, we are considering 1913 conditions as a normal base for calculation, certainly at least that base should be corrected by due ellewance for annual growth end development of the country's business and resourcee, for the influence of eftvines, new conetruetion, traneportetion, and enlarged population. Further than th+, even though an effort to eetsblish a corrected 1913 normal might be fetsible, we have a feeling that any move in that direction would result in injustice to one or another class; end ceuee social end political disPatiefection. have on unsettling effect, I think my personal feelings may be expressed in a eenerel way es follows: T'.ere are n great many influences which affect prices. The relation between the quantity of goods eroduced and the effective demand for those goods. The extent to which foreign narkets are impaired as the result of the ear. relation between good or had crops at home and good or bad crops abroad; in a very important eay. the general frame of mind of the public, is in a mood to hue or in a mood to sell. The and whether it And finally, of course, is the influence upon prices of the volume of credit whiec;1 is so largely under the control of the Federal Reserve Syst©m here and of your bank in Japen. So fer es credit, therefore, Is a factor in the price level and in the general business movement and development, I can net help but feel that -ir policy Ehould be addressed ae carefully ae possible towards maintaining a stable volume of credit, varying only to the extent that increases and decreases in the volume of business, either seasonal or because of the annual increment,neceeeitatee variations in cr?x:it, volume. One of the difficulties of the situation is now exhibited by agriculture. The period of liquidation resulted in r greeter depression in prices of agricultural commodities than in many others; it left production costs still Governor Inouye Lecember 19, 1922. a.tairly high level and the value of the articles produced in many cases Ailk#3 below costs of production. Most of the things that the farmers employ to make their crops are those whose prices are very largely fixed by domestic donditione, AP such, for instance, as fertilizer, building materials, seed, transportation costs and labor. Gn the other hand, what he produces is much more subject to influence by %orld prices because we have so large a surplus of agricultural production for export. Our problem, therefore, is to agriculture seems to be not only to facilitate the maintenance of stable values as to the general price level, but to facilitate a readjustment in the relative values of what the farmer consumes and of what he produces. His margin of profit has been too greatly impaired. he are here confronted with that inexorable law that where domestic prices are fixed by world prices we must, on the one hand, either find enlarged world markets for what is produced or contract :ur production; end therefore some fears are expressed as to the outlook for the farming industry because of what appears to be an impaired purchasing power, especially in western and middle Europe, which is in need of our foodstuffs but which may not be able to pay for them. There is a great clamor in this country for more credit for the farmers. of course, that is but the superficial manifestation of the difficulties which I have described above, inspired somewhat by the fact that we seem to have produced more foodstuffs than the world can consume, That fact coupled with a bad breakdown in our transportation system because of the strike, and for other left reasons,/considerable quantities of farm products, and especially of wheat, unmarketed on the farms, in the warehouses and in the elevators. In general, conditions here seem to be developing with a certain clarity in some respects. the country at present. Certainly, there is no unemployment to speak of in We find that facilities for transportation are taxed A ' le4 Governor Inouye FJecember to the uttermost. 19, 1922. 40IP eomewhat below the h lir of 1921. We find t which are regarded a be almost as rapia p send you the incex nu also advanced conside period prior to the we get back to the Ci of that war. There are m between various price wee not only did not declines in commodit six months or more t the burden of this in 7ie are also feeling I do not think is rea All of what greet renewal of busi industry end commerce suffering being agric as the small cereals enable almost any far true of hogs and of m It is, of c tnlicy which is liabl also change very rapi AP fr .45 If " G.:vernor Inouye to feel that our discount rates are pretty low. December !.9, 1922. Most of the rates for crodit in the market are stove our rete, end there is en increAsing tendancy for cur members to borrow from UP. Without being able to indicate with any definiteness AP to that the future boles in store for us, I shauld ety in a general way that burinees is really prospering, thet there 1E e possibility of its developing unsoundly if the country becomes engage! in thtt pleasant paFtime tf simply marking pricer without any real increase in pror:uction, and apt :a must watch the situation very carefully end be reedy to interpose a check whenever the necessity for it becomes clear. :;o wish you Gll the e-reetest SUCCePP in the management of your own sltuationohich I have no doubt presents as many c:ifficultig(- AF does o:re, but I hole 1;.le Ziew Year hap in et.:rs for could wish. every good thing that vnur friends It aill he a. pleasure to hear from you whenever you have opportunity to writ; me. Yours sincerely, F)enj. Strnv, Governor. J. Inouye, req., Governor, Bank of Japan, Jap7in. BS.V1i 4 No vember 3, 1922. Dear Governor Inouye: Your note dated uctober 5 introducing your friend Mr. Osamu atsumoto was presented by him to-day and I had the pleasure of cuite a nice chat with him. It is very kind of you to recommend your friends to thebank and to me personally. I am glad to have them co as in to see us. e may at times be able to furnish them with information which will serve their interests and as you know I am &lad at any time to be of any service in any direction which may be of advantage to you. Should you have occasion to write to Vr. Matsumoto, I hope you will assure him of the cordial welcome which he will always receive here. ?dth kindest regw.de, believe me, our very truly, 3enj. Strong, Governor. J.1=144 Esq., Governor, Bank of Jaoan, 'Tokyo, Japan. THE BANK OF JAPAN To ie. Yo October 5th, 1922. Benjamin Strong, Esq., Governor, The Federal Reserve Bank of New York, New York. My dear Mr. Strong, I am giving myself the pleasure of introducing to you my friend Mr. Osamu Matsumoto who takes up his duties in New York as Financial Commissioner of the Imperial Japanese Government. Ir. Matsumoto was until recently a high official in the Department of Finance and is now transferred to his important post. In course of discharging his duties in such capacity, it is most likely that there will be many occasions for him to come into contact with the leading men of business in your City, and I am sure that Any courtesy and you will be interested to meet him. assistance that you are able to extend to him I shall esteem a personal favour. Such attention as you may give to this letter will be greatly appreciated by me. With kind regards, Believe me Yours sincerely, THE BANK OF JAPAN CV, NOWt .EDGED 20 i,a72 TOKYO August 25th, 1922. a Ey dear Governor Strong, /ti P -1 I haiVe received your letter of July 19th enclosing copies of a note of introduction for Mr. Frank B. Noyes who is taking a trip to this country with his wife, and also I have just received a word from our representative in New York, Er. Hoshino, conveying yo.r message to me as to his intending visit. I had visits from many of the American journalists, but need hardly say what an interesting acquaintance would I make with such prominent representative of the American Press as your friend Mr. Noyes, nor need I assure you that he will equally be welcome here by your Japanese friends. I have shewn your etter to 1,1r. Fukai who was back with us just two weeks ag and so you need not trouble yourself to write him in the matter. , These few lines are only to acknowledge receipt of your letter and to assure you that I shall not fail to make the visit of :a". and Mrs. Noyes in this country as agreeable as possiule. With kindest personal reE,*ards, Yours sincerely, Benjamin Strong, Esq., Governor, Federal Reserve Bank of New York, New York. Ago July 19, 19?.?. My dear Governor Inouye: Nith this I have taken tt.7. enclosing a copy of a the liberty of giving to my vise a copy of p. Eimilar note Mr. Noyer is next few '.onthe, and I to mtkke the beet friend note of introduction which I Mr. Prank E. Noyes, and like- addrersed to Mr. Fukai. visiting ja.,:pan mith his .wife in the course of the Ex. most ;Lnxious th_lt, he shi-..11 of the comparatively short stay have full opportunity till make that he there. ;fr. Noyes is the proprietor of the "iashin3ton Star", of ,;ashington, Le being president of the Associated Fress, 41sioh is the D. C., as tell important press and he 'will mutually association in this country. I s; very sure that both you profit by the opportunity- to discuss matters in thicb you will be interested. Should Ir. Fukai feel villia. to live ?hr. Noyes opportunity of reeting !.,arquis Matzukata,I feel sure that greatly most t,1- e L:r. Noyes will very appreciate it. I ask you to shot this letter to Fukai, and i will Atr. then not write him separately. I enjoyed very mush the opportunity to see New York, but very much regret that I ias unable to to in his stay there on account of illness, so more infrequent than I had r. Fukai then he vas in that my visits lashington with during him were much hoped they would be. "iith cordial regards to you and to him and to my other friends in the tank, I beg to remain, Junnosuke Inouye, Esq., Governor, Ban'.- of Japan, Tokyo, Japan. $S. MM. Faithfully yours, fi July 19, Dear Governor Inouye: This note vill be presented to you by my friend lir. Frank F. Noyes of Yeshington, who is vorld Taking a trip :tround the somewhat similar to the one which I made two years e7o. I have assured both Vr. and Yrs. Noyes that they will receive a warm welcome from my friends in Japan, to vho I have given them letters of introduction. Anything that you are able to do to facilitate their trip, or add to its enjoyment, I shell esteerand you know hov great a pleasure it will to to reciprocate at any time. nth cordial reverds, believe *re, Faithfully yours, Junnocuke Inouye, Esq., Governor, Bank of Japan, Tokyo, Japan. PS .W4 varsonal favor, 0 January 16, 19Th Dear Governor Inouye: I have been array from my desk for nearly to months on account of illness and only to-day have been able to give your kind letter of November 30, as *ell other accumulated mail, some attention. Although I am feeling quite sell again, my physician adviEes that I take a little recreation for a 4eek ten days at Atlantic City, Ihich he believes mill :rove most beneficial to me. t the end that time I should be well enough to resume my duties at the bank. It 4'as a very keen disappointment to me that I had to be in- capacitated practically the entire time during the recent visit of your business men to this country. I ha; the pleasure of meeting a number of the gentlemen before i silo taken ill, but unfortunately vas prevented after that from extending to them many of the courtesies that I had hoped to. I sincerely regret that I could not have been of greater assistance, but I know you will appreciate the circumstances. With marm regards, believe me, /ours sincerely, J. Inouye, Fsq., Governor, Bank of Japan, Tokyo, Japan. GB .1111 THE BANK OF JAPAN TOKYO Yovember 29th, rear Governor Strong, I have duly received your letter of October 24th together with a copy of the report on agricultural inquiry, which you were so kind as to send to me, and for which I wish to thank you very much. I have not had enough time to go through the volume as yet, out so far as I go over it, I have noticed with greatest pleasure that you took so prominent and energetic a part in the discussions before the Joint :2ommission of Agricultural Inquiry on the Federal Reserve System. Indeed, the report must be very interesting and instructive as well, and I shall try to find time to read it and .Take myself acquaint with your views of the question at issue. Again thanking you for your courtesy in this matter, With kind regards, Yours sincerely, 3enjamin Strong, Esq., Governor, Federal Reserve Sank of New York, ew York. November 17, 1921. Dear Mr. Inouye: Your note of October 10 introducing ivtr. Kadono was only received by me yesterday, and, unfortunately, my absence from New York has so far prevented my I learned from anther Letter which he enjoying the eleaeure of meeting him. sent, me the!, he is the son-in-law of my old friend iiaroa Megaea. Thle afternoon I am hoping to have the pleeeure of calling on him at the Pleza Fiotel, and if I GM unfortunate in missing him, I shall hope nevertheless to have the eleacere Geeing him next week. 1\K/A Ae I cabled you, we learned with horror of the shocking attack upon Premier Hart, which resulted in his death. It w fortune but naverthelees I al glad to find this the occasion for sending my good wishes to his successor Barue Takahesei. I heee he has a most successful admin- istretion as Premier, and thet in turn his successor in office will be all that you would desire to promote the relations between your bank and the finance department of the government. So far I have not been in ashiugton to ueet Mr. Fukai, nor hes ho been in New York, but I ehall hope to have the pleasure of seeing him shortly. Really notable prograes ie being made tJuard the solution ef the problems of armaments. We are all greatly encouraged and heartened by the eathusiastic responses which we hear on all sides to the rather definite t.ropoeals made by Secretary Hughes. I am now hoping and wishing most earnestly that similar enlightened progreso will be established between your representatives and ours toward a eound,workable,and, still more importaat,cooporative understanding as to all Pacific questions. Behind the public discussions and the newspaper accounts which we all read from Mr. Inouye b2 November 17, 19?1. time to time, I can assure you that there is a splendid good spirit developing !Fr itt toward your representatives here. The opportunity seems to be at hand for a great achievement, and if the conference adjourns with a definite program accomplished it will then be much easier for us to turn our attention to constructive efforts to assist economically in European recovery. This leads me to report, very confidentially, upon some recent developments in which I am sure you will be interested. You know that I have long felt the need, as we so often discussed when I was in Tukyo, for a better understanding between the principal banks of issue. My friend, Governor Norman of the Bank of England, made me a short visit this summer with Sir Charles Addis, when the general idea was discussed at considerable length. Similar confidential discussions have been conducted in Amsterdam by both Governor Norman and by our Mr. Jay with Dr. Vissering of De Nederlandeche Bank. One preliminary meeting has been held with the President of the National Bank of Switzerland, and a similar meeting with the officers of the National Bank of Belgium. I are expecting to recount these matters in greater detail to Mr. FuKai at the first opportunity, but take this occasion to ask you if you would be willing to express to ae, quits frankly, your own views of the wisdom of continuing those discussions to the point of a better understanding between all banks of importance of that character, in the expectation that it will lead to mutual representation of each other in our respective countries, and the ultimate development, if possible, of exclusive representation. hhile I am not yet prepared to propose this definitely, it has been in my mind that if our discussions reach a point where I feel justified in going to Europe early next year, it will be most helpful, and I believe most important, if you could arrange to join me there. You must know, my goad friend, that the time has arrived, or is approaching, when some constructive and helpful program is going to be needed to mitigate 4 Noverber 17, 1921. Mr. Inouye #3 the distressing consequences of the war. I must say quite frankly that I dread the point of view of politicians in these matters, and if i must say se, without discourtesy to people of such importance, I dread their blunders in economic matters. Almost equally, I am beginning to fear the consequences of efforts by various people to furnish wholly unworkable solutions of problems that can only be dealt with over a long period of years and by a gradual healing process, rather than by a capital This very generalsuggestion is for your thought and frank comment, operation. which I shall welcome most heartily. You will be glad to know that conditions with us at the moment seem to be improving gradually but steadily. Our money markets are easing; there is a splendid market for sound issues of good securities, especially bonds; there is a more hopeful sentiment prevailing throughout the country; and the banking and financial situation has settled into a condition of mental calm and steady recovery from deThe darkest ?art of the picture is middle Europe, where Germany is pression. struggling hopelessly with the reparation demands, and her neighbors, especially to toe south and west, are in the midst of a hoileless strug6le against uncontrolled Our bank now holds 80% gold reserves against all liabilities. inflation. Our discounts have been reduced from the high point of about $i billion a year azo to lees than $200 millions. The reduction in our discount rate to 4 1/2%, and re- ductions of varying amounts in the other reserve banks were arranged as the result of the Conference of Governors of all of the banks with the Federal reserve Board, and I believe the policy is justified by events, and sound as to the immediate future. Would you care to be informed by cable of changes in our rates, and when possible (although this will not be very often) some warning in advance: In conclusion, I am referring especially to the earlier part of this letter, and hope that you and your associates feel wholly satisfied with the businsce which we are uow conducting for you in Now York. It is a matter of satisfaction to us that we have been able to form such an alliance, and I hope that it may be http://fraser.stlouisfed.org/ extended and Federal Reserve Bank of St. Louis promoted. 4 November 17, '921. 44 With cordial regards to you and your associates, believe me, Very sincerely yours, J. Inouye, Esc., 3overnor, Bank of Japan, Tokyo, Japan. FtS:bR4 For Charge to the account of WESTEol,sky\ UNION FAift SERVICE DESIRED ?'.grarn Day Letter WESTERN UNION Night Message TEL Night Letter Patrons should mark an X opposite the class of service desired: OTHERWISE THE MESSAGE WILL BE TRANSMITTED AS A FULL-RATE TELEGRAM NEWCOMB CARLTON, PRESIDENT Send the following message, subject to the terms on back hereof, which are hereby agreed to Check AM GEORGE W. E. ATKINS, FIRST VICE-PRESIDENT CABLE November .1, 1921 Bank of Japan Tokyo, Japan he are deeply shocked by news of crime which caused your Premier's death and send our sympathy Receiver's N Benj. Strong. Time Filed THE BANK OF JAPAN TOKYO di Dctober 10th, 1921. Benjamin Strong, Esq., Governor, The Federal Reserve Bank of New York, New York. Dear Lir. Strong, I venture to introduce to you :.1r. Chokuro Kadono, Vice-President of the Okura & CO., who will shortly be leaving for your country as member of the Japanese Business 1Tission to the United States of America and the United Kingdom. Ur. Kadono is close friend of mine, and though he may be introduced publicly to the leading men of business in your country, I wish his contact to be more personal, and so I take much pleasure in presenting him in person to you as one who can best impart the views that he seeks. what- ever courtesy and assistance you may extend to him will be very gratefully appreciated by me. with kind regards, Believe me Yours sincerely, THE BANK OF JAPAN 111: pe 0(` -°s' TOKYO )ct "ber 10th, 1;21. Benjamin Strong, Esq., Governor, The Federal Reserve Bank of hew York, New York. Dear Ir. Strong, I venture to introduce to you ..-.r. Kushida4 Chairman of the ,iitsubishi Bank, who will shortly be leaving for your country as member of the Japanese Business Mission to the United States of America and the United Kingdom. Mr. Kushida is a close friend of mine, and though he may be introduced publicly to the leading men of business in your country, I wish his contact to be more personal, and so I take much pleasure in presenting him in person to you as one who can best impart the views that he seeks. Valtever courtesy and assistance you may extend to him will be very gratefully appreciated by rue. With kind regards, Believe me Yours sincerely, 8/1.9/Li. J. Inouye, Esq., trade, both in quantity and in valuee, because of the reduce;; prices. c feel 411 that Ln obstacle even greater than the difficulties of foreign credits lies in the wide and erratic fluctuation in the values of the various currencies. Taist of course, is partly .sue to the reparation payments, but is A.eo partly due to the fact that there is no atabiliwing factor in the exchanges us weulo be the chat) if ;;old shipments uele free and unrestricted and could be made in the volume required. Of course, ae do not want this flood of gold, but it is, never- theless, better to it come th-n it 4011:i be to nave even more violent fluctuations of elchange. The me.cnant expects to encounter the two major risks of credit and of price fluctuations in every transaction in goods, out when the third speculetive elementAises in the gre_t fluctLe,tion in the rate of eichunge, foreign trade inevitably must suffer, and I expect taut you are feeling it somewhat as k,e do. Our money market tends toward greeter ease es people continue to liquidate inventories and pay their debts. Cuite a number of the large banks have entirely repaid their lines of discount -i.hich they have carriA with us for many years past, so that there is some real competition in the money market on the lendiLL side. This development is, of course, making it easier for our Govemament to continue theconaiderable amount of flcAting debt still unfunded at more reasonable rates of interest, and I anticipate no difficulty from now on in taking care of all of the maturities as they approach. warring cotton, of which we have a conAderable carry over, it seems that Vas will h.:_ve an abundant crop this year, and the 'sheet harvest is muring to market very rapidly. This year's crop nes been made at vary low coat and will Lre.ltly assist general lituidution through agricultural sections as we eApect the crop to be reasonably profitable to the growers. 1 am looking forward with confidence towards the development of much improved understanding between your country and ours as the result of the a/,.d/41. j. Inouie, khg., -3- conference to bi hell in November. The Gentlemen in our Government who ire working on this matter -re men of broad ii,31.011 ono the right disposition to deal with mutters as they should be dealt with. I was rather sorry to observe by a newspaper interview (although I um elweys chary of accepting these es authentic) that Marquis Okuma had become so'ewhat disturbed by tae proposal and apparently Jdeunderstood the general temper with which the matter is being discusse=d here. rut you awl we need is more freiuent a.nJ intimexte uisoussions of these matters than eseew to have been possible over the period of u general election and cnake of Government in this country. ours will sit uroand the tble that great Now teat your friende and na uiscuss matters frank/y, I feel aopeful results slay come of it ani that we may settle down towards construc- tive work with u common rurpose in view. This is the first oppottuaity I have bad to orite you for some time, principally due to my long Absence in iostington, but herfter I hope to he les:. remiss. My friend, Mr. Joon T. Har_ds, is sail,nglbr Jupan next month,t.w.1 I have taken the liberty of giving him some letters of introduction to you and other friends in Japan. But as his plans are vcry uncertain I have also hansled ia the letters of uavice to be mailed only and in case he finds it possible to call. in QttA3 one of these letters reach you and he does call, I am sure you will oe mucn interested in heart% whet he has to say ano will find him a moot agreeaoie person indeed. !3ith cordial regards to you and to my good friends with whom you are easociated, I bee, to remain, 6incerely yours, Juxino-uae Inouye, Esq., Governor, bank of Japan, Tokio, japan. 'z:41-1,11 .4411 CONFIDENTIAL July 1, 1921. Dear Governor Inouye: Your kind note of June 4, acknowledging receipt of our annual report, has just reached me, and I hasten to thank you for the kind expressions contained in your letter. Yesterday I had the pleasure of a call from Mr. Tsukasaki. He tells me that he is sailing on Saturday for Europe, and I am furnishing him with a few letters of introduction to friends in London, who may be able to render him some service in connection with his work. It so happens that our own statistician, Mr. Carl Snyder, is visiting London at this time, and I hope that Mr. Tsukasaki may be able to meet him and get the benefit of SOME of his experience along similar lines of work. From time to time recently, I have received inquiries from your Mr. Nagaike, in regard to banking conditions in New York, and have no doubt that he has written you suite fully what I told him. This city has been filled with wholly unwarranted rumors of some banking difficulties which might develop here. I am sorry to say that they have attached especially to one of our largest and most important institutions, the Guaranty Trust Company, which is a member of the Federal Reserve System. The gossip kad its origin in the affairs of the Mercantile Bank of the Americas, a foreign trade company, organized especially to finance movements of goods in Central and South America, although doing some business in the East. As with many institutions of that character, the sudden decline in commodity values and many cancellations of orders left them with a rather unmanageable volume of merchandise on their hands; and because of that fact the large stockholders, which are important banking firms and institutions, furnished the Mercantile Bank with about t20 millions of new capital, and a group of New York banking institutions undertook to furnish them with a credit, if required, for $35 millions additional. This, in our opinion, will enable the bank to go ahead without any embarrassment from its creditors, and continue as a going and earning concern, with time for the liquidation of these merchandise accounts and for the collection of the obligations of such of its debtors as may temporarily have been embarrassed. The Guaranty Trust Company had a considerable interest in the Mercantile Bank, which gave rise to these unfortunate rumors that that institution had sustained heavy losses. As I explained to you when in Japan, we keep a very close watch upon the condition of all of the member banks and trust companies. ae receive the detailed reports. of their regular semi-annual examinations made by the federal and state authorities; in fact, at the present time, due to pressure of work in the office of the Comptroller of the Currency and of the Superintendent of Banks of the State of New York, we are furnishing men to assist in these regular examinations. We are, therefore, fully informed of the condition of all member banks, and especially of those concerning which any gossip has arisen, and I have no hesitation in assuring #4 0 July 1, 1921 you that the rumors are unfounded and any be disregarded. The Guaranty Trust Company has sustained some losses; nothing, however, of a nature to impair their 7" credit or sound condition. They have a capital of $25 millions, a surplus of e25 millions, and large undivided profits in addition. Such lessee as they have encountered can be written off without the slightest embarrassment. Ai Generally speaking, the banking situation in New York is excellent. The proportion of slow leans held by our banks is nothing beyond what would be usual under present conditions, and not such as could cause embarrassment to any of them. We feel that with pricer at present low levels,with our large industrial and business corporations readjusted, or readjusting to these conditions, without insolvencies, that the banking position has shown a strength and stability even beyond what might have been expected, and with the large resources of this institution available for immediate use, the effects of this idle gossip will pass away and shortly be forgotten; in fact, it has now practically disappeared. We have been passing through a 2eriod which combines liquidation of loans through the liquidation of stocks of goods at the same time that we have been importing large amounts of gold. The result is apparent in the statements of the Federal Reserve Bamks,and especially of this bank. Our loans have been constantly declining and our reserves increasing, so that to-day we hold in New York over 70% cash reserves against all of our note and deposit liabilities. aoney is slowing a considerably easier tendency right along. Triers is no bull speculation on the stock exchange but rather a liquidating market, and in general, the outlook seems to be for a cuiet and dull summer with a tendency toward greater easing of money. Of course, our export trade has fallen off sharply and difficulties have been encountered in dealing rlth the over-sueplies of copper, cotton, sugar, and wool, especially. In a small way there has been some difficulty in financing the breeding and fattening of cattle on the !astern ranges, but one at a time these matters are being taken up anddealt with intelligently by our bankers, and I an hopeful that the fall will see an improvement in the general outlook for business recovery. The exchanges have suffered some disorder, according to my personal opinion, directly because of the German purchases of dollars throughout the world, in order to effect reparation payments. hope that the matter hereafter will be handled a little more intelligently and ekilfully than were the first transactions. As you have doubtless been advised by my associates, the decline in money rates has caused a reduction in the return upon the investments which we make for your good institution, as well as for all of the other institutions for which This will doubtless he the case from now on, and we act in a similar capacity. until some revival of business takes place. Since my return from abroad, 1 find the pressure of the work at the bank very much reduced, my hours are shorter, and I have more time for rest and recreation. I have added 25 or 30 pounds to my weight, and am really now enjoying the benefit I sincerely hope that all ,Nee well with you and with your of the year's rest. Will you not give them all my kindest regards, associates and my friends in the bank. and the same to your good self. Very sincerely yours, Junnocuke Inouye, Esq., Governor, Bank of Japan, Tokyo, Japan. http://fraser.stlouisfed.org/ BSsitif Federal Reserve Bank of St. Louis May 6, '921. Oonfidential cable for Governor Inouye, Bank of Japan. Our action in reducing commercial paper discount rate from 7% to 8 1/2% was inspired partly by growing ease of money rates, ,ms recognition of extent to which liquidation' of commodity prices had progressed, but especially was designed to afford,some sentimental 61(--Z f621- a4 (449w/4- relief to agricultural classes where great hardship has been caused by low prices of cotton, cereals and cattle stop We hope it will neither encourage speculation nor arrest the orderly readjustment of wholesale and retail prices and wages of labor, now proceeding in all parts of country Strong 3632 LONDON WALL Toeuno, Tel. Address:-.." SIGNALLY, AVE," 1.0Nr)4iN, TELEGRAM W. & S. Ltd. A N HOUSE, FINSBURY PAVEMENT. ISSUED FROM CHIEF CABLE STATION, ELECTRA A S1OULt.) XPIII-ft.LOFIEPRE31:1 )P I C1- 22i451 64r, /' (.1) !ALLY ;epeed. See Rule- Book. Doubtful words 'should be tatVo without production of this lot Dor- No inquiry lespeetim; this t.4t.t.rr 1')"? '- Examples, PW=3.45 . < HL=411.115 sae a (AC Rt.,,eAt a Mo. / / c Cop: . 1.4t1 !Ind TeiPphrne See back of form for Hs' Y;9 4.7 ) UA 83 A 19 TOKIO 3 MR to STRONG C/O J P 1 p MORGAN CO LN = aI. 3 0 0 REc I pROCATE HEARTILY WITH THANKS YOUR E C Is es c CL o o CORDIAL E0 d L.= cc vt) o 11 c 4.6 0 cc cc Cr (g4:2" 0 C GREETINGS OF NEW C YEAR INOUYE 0 3 fecenber 3D, IVO. Junnosuke Inouye, Lao., Governor, Rank of Japen, Tokyo, Japan. Dear Sir: Governor Strong has written us of his delightful visit in Japan and of the grecioue honpitality shown him by the officers of the Rank of Japan. Raney- ine that year research department mould tied to add to its collection a wet of boots on American financial suhjeots, Governor Strong has naked me to rend you a number of such hooks AT !! token of hie appreointion and friendahip. ie are forwarding these books to you under eepar5.te cover nnd "nve also collected A numr of ieephlots on banking And the Federal Reserve System which are now being bound, and these latter, together with some Additional books which we hove ex;erienced some delay in obtaining, will be eent to you shortly. Governor Strong ie now in London and is expected home about the middle of January. The very cordial reception rich you and your aesocil.tes have Accorded to Lim in Japan ie n source of the utmost gratification to the directors and officers of ttle bank, And we earnestly hope that it may be our privilege in Use near future to reci;srocste your kindness And hospitality. With renewed expressione of 7.y hiLliest regard, I nave the honor to remain, Very truly yours, J. R. CASE Acting Governor. IMPERIAL GOVEgNMENT TELEGRAPHS. (Delivery Form) Adtkeits _Office No Received $4. Date By - (emarl;A 'OriginalOffice No-N2 1.94-0 Time . / -N C-C.' t --:.-k-k-.L.-,0 t I ! ci-e-cdi. (1, IMPERIAL GOVERNMENT TELEGRAPHS. (Delivery Form) j .Addtess Office No. Received .1 By _ Class__ Office No_ te.7. Remark.: Original Worda. 1 Time 0. IMPERIAL GOVERNMENT TELEGRAPHS. (Delivery Form, 'Ikon t .0ifice Received Time Address No-. __ _Date .19 . By. . Original Remarks Office Clasa , . . a me ...3 . . m . . . _ . . . , ( . , IP a is IL ...-aw..Ji.,...- Governor Inouye's Speaoh at the Reception of Mr. B. Strong. (Ginko-Club, Tokio, May 24,1920) Gentlemen:- I am very happy to receive Mr. Benjamin Strong here this evening, who has recently come to visit our country, and I am also grateful that his Excellency Baron Takahashi Minister of Finance, and other gentlemen have been good enough to accept my invitation. I need hardly say that the new system of the Federal Reserve Bank in the United States, which was the fruit of many Years of investigation, was put in practice in November 1914, when Mr. Strong, who had been president of the Bankers Trust Company, was appointed Governor of the New York Federal Reserve Bank, the moe important of all the Reserve Banks in the United States and sino then he has been in the same office. The establishment of the Federal Reserve System in the United States means, indeed, a great revolutionary i'siiprovement on the monetary organisation of that country. Concerning this New system several different views seem to have been in !fogy(' at the outset and it was not long after the outbreak of the great War, when this system was carried into effect. Hence the authorities of the Federal Reserve Panka had on one hand to exert themselves to harmonize the new system with the practical ' conditions of the market, and on the other hand to deal with important financial and monetary questions arising from the War fore. The great pains they took at that juncture will be much more than outsiders can guess. very much desirable that we shall have a still closer relation between us. Mr. Strong's present journey, I am told, is mainly for the good of his health and at the same time for making obeuVations about real affairs of Japan, China and other Oriental countries. So we have luckily hit upon an excellent opportunity to receive and listen to the Governor of the central monetary institution of the American market. Now, in America, the Federal Reserve Banks are planing and endeavoring to deal with the various afterwar problems of the financing circles, while, in Japan, a hard time has already come, when measures must be argently taken to meet with the postwar economic conditions. At such a time, it will immensely benefit and delight us to listen to a speach of such a great AAbanker of the World full of knowledge and exberience as Mr. Stroll. and especially to that regarding the practice of the Federal Reserve System and the actual relations of the Reserve Banks with the money market, etc. I hope that Mr. Strong will accomplish the object of his preisent journey and on returning to America, contribute with his recovered 4eal and vigour much to the monetary circles of the pest-war World. .) I have the honour to propose to toast for the health of Mr. Strong. WI nTVflTIJ INHICNUHA0f) *SlIdATITOHrIaLL uom: LiaAllaa) ssaippv A.le* "MIVW0 a3O °N T paApo 61 U3 A .0 Tuul2p0 -aDmo _de "`y 477 g s}1.13u1azi (7- s y PJOA s ...- 0111[2 f-) Z vi _ V ("um tit FILING DEPT V7T7Z . 171.1- 6 1,,.rch 9, 1923. 3' Sir Mr. Benjamin Strom-, Governor of this bank, eximacte to leave in April of this year on a journey through the East, and is locking forws,rd with such plet,sure to the opportunity thus afforded him of visiting your institution. Hie eon, Sen.:amin Strong, Junior, and Vr. Btoi1 Miler, formerly o± our State Department, will se ompany Governor Strong, and we shall deeply p,)recir.te any courtesies atich you may extend to Governor Strong and his party. With renewed expression cr cur estee71 and regard, *e beg to remain, Respectful J. H. Case, Actine Governor. The Governor, Bank of Japan, Tokio, J.-_pan. FILING DEPT. March 9, 1920. I ",-) FEDERAL r b?I'q Sir : ?lo take tlensure in in+roduting to you the terser cf this letter, Nr. 'Benjamin Strong, Governor cf the Fe:ieral Reserve Bank cf N . York, his son, Mr. Renjtmin Strong, Junior, end Mr. Tiesil formrly of our Stete DeT;e_rtment. Asturing you agein of our leen aryrecietion of any courtesies which you may extend to Governor Strong tr.1 hie :erty, we beg to remain, Res: lly, J. H.' Cade, Acting Governor. The Governor, of Japan, Tokio, Japan.