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STRONG PAPERS, Strong to Norman, 1925 (List redone 5/2004, to include all materials)

January 15
January 15
February 24
(February 27)
March 9
March 9
March 20
March 21 (not sent)
March 24
(March 26)
March 30
April 15
April 21
April 27
April 27
April 30
May 4
May 4
[May 9 (from secretary)]
May 9
May 11
May 14
(May 15)
May 18
May 18
May 21
(May 25)
(May 26)
(May 26)
June 1
June 6
June 12
June 12
June 13
June 13
(June 16)
(June 16)
(June 16)
(June 18)
(June 18)
[August 1 (to Anderson)]
(August 16)
August 19
August 20
August 23
[September 19]
September 26
October 2
October 2
[October 3]
(October 6)
November 7
November 10

November 20
November 27
December 3
[December 7 (to Anderson)]
[Misc. J.C. Robold & Co. to Strong;
Nov 28 & Dec 2 on shipment of statuette]
Note from original list:

C = Cables

Letters and cables with deputy governors also
included in Strong's files with a few others, such
as that to Osborne. Also letters to ER Peacock, a
director of the Bank of England, which were
marked private for BS alone

Strong Papers Key:
] = At earlier date, item was listed as present but no original or copy is now in Papers
( ) = At earlier date, item was not on list but original is in Papers and was copied if no copy existed


Strong to Norman, 1925 - 1926


Wilk 24
Mar.21(not sent)
May s+
May s+

May 8 (fromsecy.)
May 9
May 11
May 14
May 18
May 18
May 21
June 1
June 6
June 12
June 12
June 13
June 13
Aug.1 (to Anderson
Aug. 19
Aug. 23
Dec.7(to Anderson)

Jan.6 (to Anderson)
Jan. 10(to Anderson)
Jan. 15 (to Anderson)
Mar.17 C
Mar.18 C
Mar.26 C
Mar.29 C
Mar.30 C
May 15 (to Harvey)r;
May 15
May 15
May 25
May 27(to Harvey)
June 5
June 5 (to Harvey)
June 6
July 5 (to Harvey)
July 22
Aug.10(Harrison to Trotter, with letter to
Prof' Harr and letter of introduction)
Aug.18 (from Harrison)
Aug. 20 (from Harrison)
Aug. 21
Aug. 27
Aug. 28 (to Osborn)
rov. 8
Nov. 26
Nov. 26
Dec. 28C
ison to Peacock
o Feacoc


Now.2,4-e24--Dee:1-eal-..1142Lnent of

C -Cables

Note: Letters and cables with deputy governors also included in Strong's files with
a director of the
a few others, such as that to Osborn. Also letters to E.R.Feacoc
t(.'1 (s-u-;Bank of England, which were marked private for B.S. alone. X

January 15, 125.

PL.I L.:011AL

My dear Norman:

It seems as though our conversations had left nothing further to be
said or written, the ground having been so thorou6hly covered, and our opportunity
for quiet talks having been unusually favorable.

There are, however, two or three matters which afterthought leans me to
refer to, simply to meet: sure than they remain in your own mina.

One is the question %hich I once touched upon; in fact, as I recall,
somewhat because you h a made a similar inquiry of me, - and that is ,s to continuity of munegelent in the Bank.
is a delicate subject.

I do not need to elabo

But I uo hope that you and your associates will have in

mind that this is one of the elements which cannot be overlooked during the next
year or two in striving for a successful conclusion to Whatever plans may be under
taken, which, indeed, concern your institution and this one co vitally.
Another matter is the currency note issue.

I can only express the hope,

which I cannot but feel, that your Government hill find means for placing an effective limit upon fiduciary issues of currency notes.

Possibly, it is wholly needless

for me to express this hope at all.

But you were good e

cuesiug i,heee mactere from the standpoint of both countries, and it was on that
account that I took the liberty o! enlarging somewhet u?on this subject, and of m e tioning it now.

The third matter is the need f_r some sort of an arrengement or unaereteneing as to which of the two proposed revolving credits shall be used in this naeket
from time to time, should they be put into operation.

Right Honorable Montagu C. Norman



I think you understand my point of view fully enough without any repetition
in this letter, wau am writing nc.w only that you may have in mind these three points

which cootinue in my own as having an important bearing upon the success of whatever
is done.

I am leaving this evening

or she South, but have arrangements made so that

my secretary will to there, and messages will be re-coded at the bank und transmitted
if needed.

With best wishes, I am
Faithfully yours,

Right Honorable Montagu C. Norman,
Thorpe Lodge,
Campden Hill,
London, Englund.


Januacy 15, 1..)25.

*f rrl**Af


:4 dear Yormaa:
It UeilM6 as though our convereations
said or written, the ground h:.ving


left nothing further to be


o thoroughly covered, and cur opportunity

for quiet tdks having becn'unueually favorable.

houcver, to or throe matters Olich afterthought leads ne to


':hich I once t.-....iched upon; in :act, as I rec:11,

Cac ie to

,ini1 r in'!uiry of me, -

bccana-: you h d

they ria in yo.r o.a

Lure LL

p1y to

r,for to,

of 71,3.1.c-li, in

ia a (ielie_te tubject.




that le -.3 to cot,tin-

!o not no-1 to el:.bor,.to 0,1


in net, it,

Eut I eo hope tt...t you tard your ,Lceaci,Itee rill h-ve in

caarlot be ovarlooked uurinL; tbc next

this is one of the oie7onts or t:o 1(1 otrivint; for

LuccotJful conelueion to whF.tever piFma '3ty be Lnder-

ccncern your inoGitution.and this one eo


Lnother iu.tter Ia the currency note ist.uo.

unon fiduciary itioUCS of currency nete5.
P.ut you

for ne to express this hope F..t z-11.1

it is

he hope,


ro good cnouLL to join Lie in ois-

vatters frogt the etann?oint oE' both c.;untrie5, ,:ad it



find me:,ns for pla.cing an iffeut-

7Inich I cannot but feel, that your Goverment


I can only

on thlt

);nd of
tteconnt that I teas the liberty or eale.rin,; aorqe.,Lirit uun tail subject,

tioning it now.

uns.r.:tcndTile third matter is the need f,r tiome .-,ort of en errangeTent or



tilts; t-)

revolving,credite eh all be ueed ir this

from tif7:c to tic, thould tnc]y be put




JaawAry 15, 1)25.

Dear Monty:
This 16 juut a line to le:, you know that a great pleasure
you gave all of us, e_na especially me, by making s visit fl, -c at
this time.

but beyona the pleasure, it has been of the greatest
possible value. So much do, indeed, that I fear at times I Vis an
inconsiderate host on tte one hand, in keeping you too busy, alla on
the other hand, in giving, you no opportunity
little recreltion
while here.
Some time when you uave a
me a line giving sornethin:;, of your
I will be glua to have it. Possibly
you the °other.
It might be useful

minute to spare, if you can drop
impre:Aons of our crnizt:tion,
Anderson would do it !,.nci Lave
to me.

Once more, every possible good wish to you and every possible success to your plans.
Sincerely your rrifna,

Right Honorable Vontgu O. norm%,n,
Thorpe Lodge,
Campoen Rill,

London, Englan.



February 24, 1925.


My dear Norman:

This is to acknowledge and thank you l'or your personal letter
of February 10, which I have read with much interest.

It makes clear that our views are quite in harmony in the

diecuesed, and I am very glad, indeed, to feel that that is


The parenthesis in the last paragraph of your letter is rather
cryptic, and I assume that in due course some explanation will reach me.

You will, I am sure, not overlook ti.-,at our program here, so far as it has

a bearing u,on your on hopes ana plane, rill need to take account of

prospecte ana pouuibilitiea just as much a.s it will of certaintiee, so I
am relying on you to keep me advised.

absence in Florida ana the need for a trip to Washington, for
which place I am leaving today, have made it dirIcult to write you very
Wily, which I hope to do on my return.
In the meantime, with warmest regards, I beg to remain,
Sincerely yours,

Right Honorable fiontagu C. Norman,
Governor, Bank of Eng lanu,
London, England.


Since dictating the above, your citlee 71 and 72 have been
received and throw much light on the eituution.







Detr Norman:

If the statements made to the Commerce Committee of
the House of Commons have been printed and c: re available to
the public, I would like very sell to hove t copy.

So far

prece reporte indicate that the Commerce Committee tee heard
etatemente from McKenna, Leaf and Keynes.

Doubtless others

have been made, and, Ps you have mentioned, it would be
interesting reading for me.
With beat regsfrds, I hm

Very sincerely yours,

The Right Honorable Mont%cu C. Norman,
Governor, The Hank of England,
Threadneedle Street, London.








March 24, 1925.

Deer hormen:

Your cables Nos. 87 end 88 came yeetereey, but my talk with
Morgan and hie partnere was too late in the day to enable me to send
They have now been dispatched (my Nos. 48 end 49).
replies until today.
shell try to write you in some detail a little later in
In the meantime, this ie to advice you that McGarreh is
the week.
ie planning to stop in London for a. day or two
sailing tomorrow
He will tell you something of the cry I feel
before going on to Berlin.
in Tigard to the ereoeneement of euch e decision as is made, and is
eoeething which I believe should receive careful voneideretion.
Also you will be interested to knoe that Vineton of the Treasury
It will be hie vecetion, but he ie
is aeiling for EUJ*116 on April E.
anxious to hove a cent with you and I as propouing also to give him some
which I will send
letters of introduction to friends in London, a list
you before he arrives.
Finally, one of the young men from the bank, Mr. Edward O.
Douglas, who is in Mr. Keneelle Department, is :eiling for Europe with his
wife on the 18th of April, and be is proeosing to spend the second week
of May in London, tnd while teere he would like to gein vome first -hand
If it is all right
knowledge of the die-count market and like matters.
for him to do so, nos would like to knob eomethir; o' your eetUede in handling
market trensactione, especially the discount market, the issuing eld handling
of Trefeury bills, cieariuge and bettlementa of clearings for the eletring
banks, and the money market in :elation to stock exchange settlements and

Douglas wee a eehool-wete end college-1,-.te of Fen's, ens is his
most intimate friend. he is e fine fellow and entirely dependable. If it
is suite proper, eoseibly one of your young men could give him all that he
needs in a few days, and you may be sure thet he and we will appreciate it
very much.

I hope my cables going to you today are in every way setiefectory
and will be helpful.
My beet es always.

Ancerely yours,

Right Bonoreble Montagu C. &omen,

 Governor, Bank of
London, England.
Federal Reserve Bank of St. Louis


March SO, lga

Lear Monty:

eenng you an addition to

Under cover

the batch of eo-c1:11ed Prooldaritiel Medals whicb sent to you beck
in July of 1924.

It is not, howavor, the likenosa of any of

our Preoldents, but r%thor t:iat of our first Secretary of the
TreL,sury, - Alexandsr Ohmilton.
The recent obLierv.:,nce of the one hundredth ennivereery

of the deito of Hamilton promoted the iseue of these medals, p,nd
I thought T would :send one f1onc for ouch interest es it may have

it your collection of each thing


Alwaye. sincerely yours,

The Right Honorable Montagu C. Norman,
Governor., Henk of 6ngland,
Threat.Incelle Arest, Lon6on.


MISC. II. 1-200M-1-24


Mr. o




Apt' 15, 1925.


ly dear Borman:

I am cabling you toclay na per enclosed copy of my meebege, but feel that

the cable Dy itself may not be sufriciently explanatory to give you quite the
point of view thich I hold personally as to the wetter referred to.

You have observed the care with which es he urged that our proposed
gold transaction should be entirely seperete and distinct from any credit or bar -

rowing conducted by the British Government in this mertet in conneetion with the
resumption of gold payment.

It hes deemed to me that our disceeeioas end communi-

cations have moat carefully observed this point, but now comae tne question of whet

announcement Anil be mnde, how it shall be made,

ale:: when.

Thera appear to be three points to be especielly obeerved when the first
announcement to the public is made.

That the treneectelon in which W3 are interested is s purely
bank treneection between two banks of issue, relsting to the
monetary problem with which we are confronted.

net any credit issued to the British Goeerneent in this
mtrket is quite a eeperete affair arranged by the British
Ooveenment through their fiecal agents in thie eeuntry, end

That no statement should be made which could Le interpreted
by the public as indicating that understandings, or commitment,
have been made as to policy in the future which would in any
wee '_e rive you or 141:1 of entire freedom of action in dealiee
with our local credit situations or markets.

I have elwaya felt that the suceeaeful conduct of this mutter depends
upon the spirit of cooperation which can be

and has been developed, end that that

spirit, which ia so obviously present in this matter, is ell that ie needed.

Right Honorable Montagu C. Norman



There have been e number of dispatches in our press recently indicating


of some opinion in Eng lend that a resumption of gold peyment by the

Bank of England (especially if fortified by
etle Get ti1C. London market in acme vay to
likewise from time to time



in this country) must necceserilyy

York control or management.

There have

appeared statements here which would indicate that there

is some possibility of the opinion being held in some suarters that key arrangement
which we might have would necessarily imply obligatione ed to our coiestic policy,
which might prove to be dangerous or burdeneome. Neither feeling ie justified, as we

both fully unceretend, but certainly no encouragement should be Given on your side or

on this side in any public statement as support for this unfortunate view.
I am also quite in the dark is to your wishes in revere: to any statement
which might be made

April 28.

It will se very difficult indeed to prevent

the character and

here either at this bank or at Messrs. J. P. MOrgral 14.. Co. efter


iiergen ee Co.

of the credit arreneed for


the public becoming of


'i'oo army benke will be intereeted in it.


by Messrs.

To t, eowee hat lesser

extent, the same will be true here, after the er:engement is concluded and the announcement is made by the Chancellor.
the other Reserve Bulks, by the

Many of the other Reserve Banks, and ?oesibly ell of
usual interbank errengeament, will to some extent, and

in sole way participate with us en the account.

I am enxioue to beet: your v-ito.6 as to

what, if taty, etetement enouici be made here, assuming of course, that tiessre. J. P.
Morgan & io. *lit also

sdvieed as to any statement which they shouic make, and we

should agree pretty exactly as to the form of the etetement awl the extent to which
details should be made known to the public.

With all this in mind, I ea cabling you tooay ee per :inclosed confirmation, and
you shoule receive my letter (which goes by Yr. TIP rkec hand) some days in edvence of

the 28th, and in

time for

further exchange or cables, if that is necessary before




Right Honorable Montagu C. 14orm,=n


An announcement, followed by fairly complete news coqiwant which is neither

4Weleading nor prejudiced, would were to be helpful.

I fear that no tnrouncement

would lead to mfny mibleading ane. possibly exaggerated btories which night eventually
force 4 btatoilient for tLe purpoee of correction, but ribking in tre meantime. some

Litb beet regards, I am
Finccrely yours,

The Right Honorable Montagu C. horwan,
Governor, BtAilc of Englelid,

London, Englhnd.
R5. LS



Right Honorable Montagu C. Norman


The letter which I sent you by Tierke was inspired by fear of Just what
4Ikeeils to be occurring, that ie, the Chancellor's reluctance to state the character
and amount of the credits arranged in this country.

When in the micet of active

cable correspondence, letters sometimes become a bit confusing, and I shall only comment to tee following extent:
You have lard years of tradition in doing things of thi3 sort without any
publicity at all.

We have

bOLLI:=; yeere of tru,lition in which we are expected to

keep the public fairly well informed.

The resumption of a free gold market in

London will be a matter of world-wide comment, and will be discussed in the press here
searchingly and poeeibly controversially.

If it is not disclosed st the outset that

we have any participation in your program, it will undoubtedly become known later; in
fact, very shortly after the budget address is made.

In the meantime, the newespapere

will be filled with surmise and misleading utatemente, which will force us to correct

We will be charged *ith lack of frankness and en effort to conceal.

In general,

people on this side will cleim that they have e right to know something About en undertaking of that sort, of such great consequence to the country's affairs.

realize that under our scheme of thine

Then you

e share of this undertaking must be offered to

each of the other Federal Reserve Banks, their directors must neceeserily know &bout it.
It would be, of course, known in detail by our aaeociatee in Weehington and in the

Under these circumstances, I am sure it is impossible

o keep the fact of

our participation from disclosure, end the minute it is disclosed, wa will be llooded
We cannot deny participation, and if we cannot

with inquiries.

admit it, we are

placed in the uncomfortable position of simply declining to give any information.


we take that position we will invite adverse criticism by a large section of the press,
and likely some sort of inquiry later in Waehington.

On tee other hand, I don't went you to feel that we are unmindful of your

My cables and letter :elee referred to some of the press comment, and I


Right Honorable Vontegu C. Norman

01 25.

ve even reed private lettere from London, indicating considerable opinion over

0there that any arrangement for credits in this country when resumption is effected,
must have the effect of subordinating the London market end the Bank of England to
control from New York.

We, on the other hand, are in a position where some of our

critics may claim that we have surrendered our freedom of action in domestic policy
in order to further your plans.

All of these circumetanees lead us in

lie bank to believe that the safest

course is to make a brief statement at the outset, end then privately to explain to
the press just sufficient to insure fair discussion of the fncts.
sure, be impatient of ftete to they ere.

You will not, I am

We have different ways of doing things in

our country than in yours, and I em eneee/oring only to meet the conditions here without doing harm on your tide.

For some Lime I have been endeevoring tc write you newa of tne family, and
will do so in e

f or two.


r.,le news is gsoc.

You may be amused by the enclosed slip, which appeared in the Dow, Jones
Bulletin this morning.

Now, i hope that your troubles will soon be over, and you know how gladly we
will do anything that is poesible to further the plan which we believe is so greatly in
tae interests of both countries.
sincerely yours,

The Right honorable Montagu C. iiormen,
Governor, Bank of England,
London, inglano.


Nnil Z7,

ky deer Norman:

The Committee Report which you were good enough
to send me ie certeinly e moat orthodox .1nci comforting document
for those who believe in the gold etande rd.

Poebibly the only point where I tould like to see a
little ctirterent slept given to the ergument ie in the price

On tee other hand, that lea6b to the upper and

rerified atmcephere of economic Oibeaucion, whict it may be just
ae well to evoid et the present time.
When the final Cocument is iesued, I no.,Je you till
bend me a copy for my tilee.
Very sincerely youre,

Right Honorable Montagu C. Noreen,
Governer, Eenk of England,
London, England.


April 27, 1925.

My dear Norman:

Tour letter of April 15 reminds me that I have not written you recently of my plans for the summer and fell.
Tney will fit in very well with the tentative program you outline.

If possible, I hope to sail in time to enable me to do the visiting I wrote you
about and to eachpe bad weather - this means sailing sometime during August.


is possible that I may ask Dr. Stewart to accom-,)any me for Ft least a part of the

He wishes to acquaint himeelf more intimately with the foreign money

markets, and would much prefer to do so while I hM there than to go alone.
How extensive a trip I shall take depends upon circumstances, but if
it happened also to fit in with your plans, I might for the first time in some
years deliberately take two weeks' "European" holiday, hoping that you could spend
it somewhere with me.

Confidentially, I have received an intimation that Dr. Schacht might
like to come to this country this summer for s short visit, but would prefer, as I
understand it, to receive the suggestion from us.

If this is arranged, I would

probably propose that he come before I sell for Europe rather than await the uncertainties of my return.

This is tte best prognosis that I can now give.

As to the bank meeting, a feeling has been growing upon me for some time
that the most important meetings of this kind have already been held and have had
their results in the understandings between the Bank of England and this bank, and
that the only question now to determine is the extent to which the same sort of
Federal Reserve Bank of St. Louis

shell be furthered in other directions.

I would agree without much


Right Honorable Montagu C. Norman


hesitation as to Holland, Sweden and Switzerland.

If the mee

fortuitous "happenchance without publicity and without commitments, it might be
possible to confine it to those three countries with the addition of, any, Germany.
Once the field is enlarged beyond that, the meeting would be so large, indeed, as
to unescepably attract public attention and lead to much wondering as to whet it
is all about.

Also it has been going through my mind that much of the object

o be

eccomplished could be even better done if I were able to stay long enough abroad to
meet some of the gentlemen (outside of those in the countries above named) separately
in London or at some convenient point on ,-e continent, provided always, of course,
that you were able to be there.
As you express it, this is only thinking aloud.

If we do not have e

meeting but just happen to meet, then there would be no difficulty in drawing the

If we have a meeting and invitations are sent out, I can see some difficulties
There is ample time for further thought and correspondence, and this is

my offhand retction to your letter.
and the data largely depends upon you.
My best to you as always.
Very since3ely yours,

Right Honorable Montagu C. Norman,
Governor, Bank of England,
London, England.

But in any event, you may c

April 30, 1925.

My dear Norman:

Your note of April 20 has Just reached me.

I have felt since rending the portion of the Chencellor's address
relating to the re- establishment of a free gold market, that the matter had

been dealt with so comprehensively and in terms of such definiteness that
little, indeed, was left to be said.
My inquiry about the currency notes was not merle in disregard of

the difficulties generally presented by that subject, which are referred to
in your letter; and I agree with what I recall to he your own feeling, and
what others have expressed, thet an arbitrary treatment of the limit to the
fiduciary issue at the present time might involve dangers which can better be
appraised end escaped by waiting until experience indicates the wise course.

But, of course, you and I both agree that the security of the
British currency position for the long nuture (end under its present currency
system) will ultimately be assured only when a definite limit has been fixed.

The report of the Currency Committee ie reessuring on this point, and the
Chancellor's etetament that the recommendations of that Committee have been
adopted in toto and will be the policy of the Government, should be satisfying
to you who are principally concerned, end therefore to us who are indirectly
concerned, but nevertheless greatly interested.

I cannot conclude thin letter without expressing my great admiration


Right Honorable Montagu C. Norman


for what I feel is a brilliant achievement, for which you pre yourself responsible, and which I hope gives you as great satisfaction
pith evory good wish,
Since:uly yours,

Right honorable Montagu C. Norman,
Governor, Bank of England,
London, England.


h es

it does ua.


Vey 4, 1925.


My dear Normans

Your letter of April 24 see received too late to reply by Saturday's

It happens, to be almost entirely answered by my letter of April 21,

which crossed yours; dud in fact, eoth lettere, es evente Lave diecloued, provec
to h,ve boon ouneceac6,1y bacauoe 01 the most admirable way in which the Chancell

dealt with the subject of reeumption of gola payment in hid budget ecVrees, end
the moat autieractory reception which the announcement received in this country.
The reference in my cable No. 7b to the need for eothe further enlight

enment e6 to tLe character of our titneaction, relatee particulaay to the doubt
expressed by both the preaa

60US of cur banking Iiienae as to whether there

will be an eCtuta shipment or eeliveiy o3 gclO to you or 4, we propose to
make 80.55 inveetAente in uterling bids,.

niter the Act of F.iiament, to whi

you refer, axe been peeeed, it wiL be poseiole :or us Lc quietly clear up


on this point, after which we believe toot this nine-day wonder will be succeed
in public interest by other events, S6,] no further discussion of conee(,uence ui
take place.

I think we may congratulate ourselvee upon the ftvoreble reception o
this important roma f.n this country.
With kinclest regards,
V _. ry sincerely yours,

Right Honorable Montagu C. Norman,
Governor, Br.nk of England,
London, England.


May 9, 1925.

My dear Norm.Lu:

lour note of the thirtieth duly ro:.1ched me,

bud very opportunely, as Pr. Stewart hae been most anxious
to have t,

copy or the report rdlich you nor aunt ace.

I have passed it 4i on to hila, !Ind you will from him in due course.

I think he will probably

eared you & very interehting comment on the report.
Sincerely yours,

Xontagu C. Dorman,
Goveirioi, Sank of England,
Luftc:on, England.


May 11, 19k5.

My deer ?torment

Thank you for you's of the twenty-seventh,
containing copies of the final Report of the Committee

on the Currency Lnd &nk of England Note IFbueb, together
with E. draft of the bill knoen te the Gold Standard Act,

which I now understend has passed the House of COMMOIlb end
ie before the House of Lords.
Tours very sincerely,

'tight Honorable Montage C. hormEn,
Governor, Bulk of England,
LonCon, England.



RECEIVr_": 'zit(


Right Honorable Montagu C. Norman


letters, but I shall hope before very long to write you something of what has
been occurring here, and hope that you also will find it possible to write me.
Mr. Harrison will take you the lust word of our own affairs.
With best regards, believe me,
Sincerely yours,

Right Honorable Montagu C. Norman,
Governor, Bank of England,
London, England.


Mly 18, 1925.

My dear Norman:

I have just read an article on the gold etanderd by
J. M. Keynes in the May Zd issue of "The Nation find The Lthenaeum."
It raises R question in regard to the obligation of '-he

Bank of England to purchase gold at a fixed price (71s. 9d. per
standard ounce, if former practices continue) and I am writing to

ask you if you will be good enough to give me some information as

to both te legal position of the bank and its policy, if you feel
free to do so.

Of course, the question et once arises *ith the new limitations in operation, *hether a free `old mbrket in London will be
affected by eny change of policy on the buying side, just as it is

somewhat effected by te changed condtione on the paying side.
With beet regards,
Very sincerely yours,

Right Honorable Montagu C. Norman,
Governor, Bank of England,
London, England.


ley 1S, 192.5.

Dear Monty:

This is to advise you something of ey plans for the
I shell remain in New York taking as ouch time as
poatnie f'er golf.

Ketterinu 1Ls heel here visiting me, ::'ellotiee, quite
en extended trip with her husband who hes just been leid up as
the result of two operetions and faund it
ry to take
long rest. She is well and happy and now proposes (if her father
cee erreuos it) to elcompeny him wnon he ioee to Europe thie
She can go et any time.
ike you know, Dr. Stewart is thinking of making a trip
to &Arne, eed would lire to be theare iher I to.
fore sty consist of !Catherine, Dr. Stewart and myself, end I shell
Probmbly teke Ernest with me; enz- eith the proe,ect of Tette t
little correspondence end in order that Dr. Stewart and I may both
!.:e free of the ourcen of letter-oriting, I may decide to take
Mia& Bleocker.

The important thing now is to decide when we shall go.
I would like to go es early ea poseible and fat back .pretty early.
This is partly because of the advantage of goof, weather for treveling; h130 pertly heee_uee there
of e politicl
attack upon the System this fall, and if it does develop, I shell
Nhrlt tO be hue/ for a couple of months, at leLet iu preparing for
Concerning all of this Mr. Herrieon will make explanations.
then you are
therefore, won't you please write me in more
detail of your plane.
You mill be glad to know that Ben and his wife 'and my
grandson are flourishing and well ad happy.
My beet to you, bb always.
Sincerely your.,

Night Honorable Montagu C. Norman,
Bank of England,
London, England.

The p


May 21, 1g25.

My clear Aorman:

Your letter of May 8 gives ma aome neede0. information ena furnishes

an opportunity to adviae you aemething of our own developments.
Publicity here has brought out three points:

Some confusion t rose ae to the exact nature of our
transaction with you.


There waa some questioning of our powers foliowinc
tho eppeerance of a etetement by Mr. Oscar T. Crosby,
formerly Aaaiatant Lecrettry of the Treasury, e copy
of phich I ex encloeing, end



one complaint ht6 made by e few bankers that our er,rungement with you deprived them of e. 'profitable
piece or buaineee.

Ab to the first, it illay oe neceeaery e little later for us to give the

public xore to tee we

tne account will operate, if it is ever used.

AS to the second, es are wholly satisfied, havinr,, ts you know, taken

good advice beroro

areangeiJeut Ott s concieded.

to tee thIrd, ii
Owe) why I

1L, one of the reasons (although poseibly a minor

regretted that the bankers credit was reduced.
sir. Eerrieon will explain to you, veen te arrives, more in r!etail then

aciewe neceesary to write, es ne is fully conversant with all that has developed.
het. you write 'about the transition is most reassuring.

It might help

116 eomethat here if you found meant, to civert some part of your drain of gold, if

it continued, how London to New York;

but that, after ell, is purely a problem

of exchange so long Lb you continue not to use your facilities here.

Riaht Honorable Montagu C. Women



We are still living under the menece of a rather buoyant stock mtrket,

410-but at the same time there have been evidences here tnd there of t slackening of

This ie true especially in the eteel business, whilb building construc-

Thee is

tion, autoiiobile production and other manuft cturinc ere still active.

some small reduction in wholesale prices.

Pig iron lb today b:Aling et ;:bout cost

of production.

I am anxious to see you as soon 5s our arrangemente can be concluded for
te to take my trip abroad, concerning which I will trite you ,,eperately.


complication grows out of the fact that I have learned that DI. Schacht would like
to come to this country

r-,d is awaiting dOlj


from me about it.

The rutumn

will probably be the best time for hill, which :All rather laad me to advance the
&tam of my trip is much se is possible without inoorou,ntencin;J you,

Some word from

you at an ,!t,rly date will be appreciated.

saw glad to h

i s

you aaG. your .rienCs feel thLt our attAtude towards

resumction tte sympathetic and helpfulL the only rota fly is the ointment is the
linsttisfention arsons. nose of cur cmn NcY York.


cpe. A.311, belic,re

Yours moot Gince:.ely,

Right Honorable Montagu C. Woman,
Governor, Bank of England,
London, England.
BS. L8


in Chief Cashier's
Private Cafe.



0 2 i;;;;1

_ay 25, 19.5.

DeL,r 1:r.Covernor,

I be

to acknowleego the receipt of your

favor o? :"ay 14, with which you enclosod, in original, a

letter 17.6535 of the sumo date, signed by Ur Otto laemeyor,
the Controller of Finance to His ::ajesty's Treaeury, and a

certified copy of the Treasury Minute civing the guarantee
of tho Lords Commissioners of His
:section 2 (1) of the Cold Standard

ajosty's Treasury undor
1925 to tho princiral

aid interest of the credit of V200,0,000 gold cranted to
the Rani: of ngland by the Federal neservo 3unk of ;low York.

This is tho juarantee referred to in (2) of the conditions
mcnresOod in your letter of April. 8 laot.
Thanking you, I bac; to remain,
Lly dear :.r.Covernor,

Yours most faithfully,



:sight Honorable .!:.ontag-,u


Bank of England,





May 26, 19 25.

Dear Norman:

One of our directors, Mr. Samuel W. Reyburn, is sailing
for England on the sixth of June, and, while you met him here
earlier this year, I am takik; the liberty of giving him a note to
you, of which the enclosed is a copy.
Mr Rayburn is one of our Class B directors; that is, one
appointed to our board as a representative of the business interests
of the community.

He is President of the Associated Dry Goods

Company and the head of Lord and Taylor, one of our larger department

While Mr. Reyburn is one of our newer board members, he is

an actively interested one.

Anything that you may do for Mr. Reyburn will be very
greatly appreciated, as I am sure you know.
Faithfully yours,

a 1

The Right Honorable 'Montagu C. Norman,
Governor, The dank of England,
LonIon, B. C. 2, England.





01, NEW yoRK


Rty 23, 1925.

Dt-:r Govtraor Vorz;n:

Thio cote .A11 be preonntcd to yeu by my friend and
tf.e3uoibto, iir. 1.3mucl W. 1.yrourall ono Of tbo directore of our

foubtlec,e you yin

b:Lnk ;:ho in si.ortly eeilin5 for :241;1541d.

bim (it the time of your recent, viAt, vnd


hopc th:.t tbio rtnelloll of ac;uaintance on your rice ns?_y ,rove
o. pletetnt nn

1;rofitble occasion.

Any courte6iev which you may be sable to extend to

very greAtly spprocitcd.

Xr. Fcyburn

'4th kind poreonLa re4;arde, I


Sincerely .youro,

The Eibt Fonorablo Llontogu G. Lomen,
Governor, Brlig. of En,:land,

London, Inland.

June 1, 1925.

ce:er Normen:

It ecome e ehame thet I hove not bean eble to eUviee you
wore definitely about vieiting Furore, but et lest I begin to see

The ?recant plun 13 for me to Jail on the Homeric on
June 27, taking eith se, ae I ce.bled you, Katharine ea0 he.' maid,
The first thing will bt to get
Dr. eteAart end Miee Eleecker.
some clothes in Paris; Bo I thought of going directly there
erne etee a week or id66, it poeeible, going right to Loncon.
could cantle Dr. eitewtrt end rice Eleecker to go on to London and he
eoul etert leyieg out e little pork in hit money meriet studies.
It struck me ba better that I should go to England after
short etay in Pe.rie, and not tmeeel until later, because that would
lergely etwolli the crowd and eifficultio of laccommoestion aud also
avoid the worst of tLe continental hest which, ae 1 recall, is bed
in July ernJ early Auguet.
I em in some doubt te to mhero we should step in London.
Formerly T. always stopped at the
but it hes chnnged chErecter
since those duel, an
I am not sure that I Should core for it 6b
se either Cleridges or possibly BerKler0. Your advice will be 'wet

helpful end your help will to met tecepteble because I fear me we
arrive when the hotels ere very crowded.
I shall leave deteile of the trip to the continent until later.
I nctice thet this dose not f.juite fit in with the edvice in your letter
of Vey 16, end if you think better that I nhould go from Paris to
Brueeele tcd ;..metereiem COr:' even Berne before going to London, I kill do
so, end then decide Teter whether I should go into middle Ourope at 811.
For some reasons it might be more convenient if we let eons of thoee
gentlemen do a bit of the trrveling themeelvee anal save me come rather
long journeys.
eo th,. ie ee Per te I can develog plans not,
it fits in with your own.

With but regards to you, as elweys,
Feithfully yours,

Right Honorable Montagu C. Norma n,
Bunk of Zbglead, London, 6nglend.
Federal Reserve Bank of St. Louis



io hope that

June 6, 1925.

My dear Norman:

Thank you for your two lettere of the 28th, one
enclosing copies of the "Gold Act, 1925" and the other

a copy of Keynes' letter to

the Times.

I am




both of them, though for differing reasons!
There is little to write

because of

and the prospect of an early visit, to which I

recent c.1.'cles


forward the more ket:;nly because our thermometer has reach

a fairly hi 3h ,oint and remained there nor a number of days.

Ath kindest regards, believe me



The right Honorable dontagu G. Norman,
uovernor, Bank of England,
London, E. C. 2, Enjland.


June 12, 1925.

My dear Borman:

I h,ve your cable No. 33, tut htis not yet received
the letter of June 5.

Iz view of your ceble, wt shell ;cc directly to London

E8 you auggeot, tnd then on to Berlin.

In the; met.ntime, if you

will be good enough to get acccmmodatione for Er. Etewtrt and
Mies: Bleceker4


3111,11 to very greteful.

It will be ao ©t helpful to 11.!:ve Dr. :tetrt with uc.


ie interawted in doing some work in connection with the London

coney market, but. yin also relieve me cf =ome of the work which
I otherwise might feel obliged to do, and enable me to have a
little run 6ith I&tharine.
Vi:ry sincerely yours,

Bight honorable Montegu C. 'brain,
Governor, Lenk of England,
London, Englond.


June 12, 1 g25.


My dear Aorman:

Since the receipt of your letter of the 28th Uay, tie
situation 'nab changed from day to day to eueh en extent tt:&1. I have

hardly known what to write in reply.
The account you give of the developments of the iset tea

weexo is most enlightening, out uppareutly the gold you are ghtting
is not 4outb African gold after all, but principally from the Continent.

Since our cables in regard to American balances in kondon, we have seen
e little evidence of

ithdrawala of accounts which hove matured.


extensive it has been it is im2oesible to say, but rumors reach ue that
e number or inetitutions are not getting returns for extensions of their
deposits which satiefy them, and are bringing the funds home and putting
them out hare.

Possibly that explains the weakening of sterling which yesterday and today has been below 4.36.

you say, the test will come

in the Fall, but I hope our faith in the outcome will not he put to too
severe a test.

All that I might add 1: this letter will be deferred until I
see you.

Since ely yours,

Right Honorable Montagu C. Moment
Governor, Sank of England,
London, England.

June i3, 1925.
My dear Norman:
On itay 29 I

received a packet of 24 copies of the Report of

the Goarnitter on the Liirrenoy and Bank of England Note Ibsues, which
but an acknowledgwere forwarded with your compliments on May lbtn.
ment or thm 4aa dele.yed Nonniu., rixei,)t of the other .locumeats :hics
I had requested in connection with the return of
gold st,:.nac.rd.


L-eitain to the

I now ...aye your setter of Juue 4, advising me thLAt the foidocumeate are on their ray
1Z copies Gold 6tanaara


i2 copies

Report of the Committee on the Currency
ana Bank of England Note Issues.

18 copies

Official Report Parliamentary
18th April


12 copies ditto 4th May
11 copies ditto `5th May


all of Lhich I
to thank you.
I scarcely believe there will
be need for more copies then those which you have so generously sent,
but if occasion arises, I shall take advantage of your offer to procure
additional ones.

Each Federal Reserve Lank will

be furnished with



set. of the documents, insomuch as they will participate with us in

credit arrangement between the bank of England and ourselves.

with ,ind personal regards, I am
Very sincerely yours,

The Right Honorable tiontogu C. Norman,

Governor, bank or Engler)°,
London, E. C. 2, En6land.



June 13,. lia.
My dear Norman:

Yeur eenfidential note of the 5th June leachec no today after
cabled you yesterday about going directly to London.

I am nct taking Frneet.

Ketharine's meld will perfoem the dual role of maid and velet, and as she is an

old family attachment, I em sure Le will be more comforteble then if we were
lumbered up with too many peolle and the coneequent addition of luggage.


then Phil will be at home alone, and I Pm klad to leave trnett to have an eye an

Frankly, I e.& clweye e bit anxious about.

dr. Harrison.

He it. so 5M-

titioue to be helpful, especially to Te personally, he disregards proper
precautions about his health.

One reason why I an glad that he returns home

before I leave is so that I may give him a serious lecture on this subject and
insure that he gets away for a long rest.

I can tell you more about his history

when I see you.

Of course, now that Ps shell go directly to Thorpe Lodge (and I do hope
that we are nct putting at greet burden on you)

whenever it is desirable.
a good time.

I can arrange to go to the Continent

i;erly in July, if you say so.

I want to Five Katharine

It is probably the oniy trip of the the ratter that we shall have to-

gether, and it will do her good to have a fling at some of the milder dissipations
of Europe.

All of this we can elaborate when I see you, ant I will be glad of your

advice as to what we &lull do.

If we happen to meet any of those central bankers when we go to Berlin,
there are meay reeeons why it will be helpful and desirable to have Etewert with me.
He may dimply be known as a elember of our organization.

Then Miss Bleecker will be

Right Honorable MonteEu C. Nomn



long to do mail, etc., and Miss Bleecker being %ith lib sill make it easier for me
IPto leave Katharine et tinee for business neetinge, etc.

hilh beet regarde,
Sincerely yours,

Right Honorable Montagu C. Norsmn,
Governor, Bank of intland,
London, 648111au.

Jpno 16, 1925.



Dear Norman:

Supplementing the Tenth Annual Report of this bank which we
sent you some weeks ago, it gives us pleasure to send you at this time

a copy of the Federal Reserve Board's full report reviewing operations
of the Federal Reserve System in 1924 and giving complete statistics
for the year.

Data for the 2ederal Reserve sank of ,;ew York are shown

on paces 323 to 333.
Very truly yours,

Benj. strong,

The Right Honorable 1.Aontagu C. 1%orman,
Governor, Bank of _-.nzland,

Threadneedle Streot,
London, E. C. 2, Pncland,









Juno 10, 1X.5.

Dear Ur. Governor:

This note till be preoented to you by
iionorable Robert L. Chian, who is vioiting London this aunmor

end who advisee no thvt ho will be interested in discussing
t%o principles of the Fodorel Reserve Act with some of my
frionds in London.

You till, I an cure, rceall that

Owen wee for

many years United States Senator from the Mate of Ohlahona
and was Chairman of the Lent:to Committee on Banking and Currency

which formulated the bill known t.6 the Federal Reoorve Act, under
which the Fodoral Reserve Banks were established.
em cure you will enjoy the opportunity of mooting

Faithfully yours,

Right Honorable t!ontagu C. 1;orman,

Governor, Eunk of Eneland,
London, Lagland.




01' NJ AV 1.0111.1

June 18, 102.5

Dear Ur. Governor:

This note

be presented to you by 1r. George A

Coulton, a member of the Fedoral Advisory Council from the
Cleveland Fedarill Rooerve District, Who is commended to your

kind considoration at the request of Ur. D. C.


of the Recorve Bank of that district, and e valued friend of

I cairn be deeply grateful for Eny courtesies you

may extend to Mr. Coulton, and beg to remain
Sincerely yours,

The Richt Honorable nntegu C. Lormtn,
Governor, B3nk of England,
London, Z. C. t,




,c_iuftitek ILtk

Sit A-(74,-Itc,

ot. otkky

4..01/44 jorc




4-I IL 704k 4Ltngi
IttY14" "e/U2444




Hotel Majestic,
Paris, France,
August 19, 1925.

Dear Nor _ 1:

Your telegram in code, as below, arrived too late
last night to send any reply, but this morning I have sent you
a reply, which, together with my hand written note, will, I
believe, enable you to go ahead with the arrangements.

Whatever arrangements you make will be satisfactory
to me, but I feel obliged to sail for home on September 9
unlo173 something very urgent prevents my doing so.
The messages exchanged decode an follows:
"Strong, Hotel Majestic, Paris:
Before I can arrange date for the Pole
and Schacht to come here you must tell me
Visserings date and place of meeting. Shall
expect you here on Aug. 27 or Aug. 28, but
suggest Olympic on September 9 is too early
for above three visitors."
"Bank of England, London - For Governor:
Just advised that Vice President
Bank Polski sails from New York Saturday
this week expecting to meet me in London.
I shall arrive there Aug. 28 and leave
arrangements for meetings with Vissering
and German to you but suggest about
September 3 which will enable me to sail on
September 9, as I am anxious to do. Wrote
Vissering fifteenth advising length of
stay in London but hope you will communicate
with both and fix dates. Till thin suit
Very sincerely yours,

The Right Honorable Montagu C. Norman,
Bank of England, London.


Hotel Majestic,
Faris, France,
August 20, 1925.

Dear horman,
Last night, after my wire had gone forward

Vissering, which, with
you, I roceived the enclosed from
what I have done.
my reply, will fully acquaint you with
entirely to you, and
I shall leave the final arrangements
be held in London.
nm very glad that the meeting can

I sent you a wire this morning, but believe
for your
it is as well to forward the correspondence

If the arrangements are concluded before I
the plan is.
reach London, I shall bo glad to know what

14 best to you always.
Sincerely yours,

The Right Honorable Montagu C. Noric,an,
Bank of 3ngland, London.



Hotel Majestic,
Paris, France,
August 20, 1925.


My dear. Norman:

Of course I remember Sir Edward Cook very

He was Hailey's right-hand man when I visited

him in Simla in 1920, and not 1921.
Cook's letter is exceedingly interesting.

I cannot write him very hopefully just now, and shall
await opportunity to discuss this matter with you in

But I will certainly be glad to give Cook

the best advice I can.
Believe me,

most sincerely yours,

. VO111el\-1Y7

The Right Honorable Montagu C. Norman,
Bank of England, London.

Hotel Majestic,
Paris, France.
August 23, 1925.


My dear Norman:

I' have your telegrams of the 20th and 22nd on returning

And the arrangements all suit me very well indeed.

from Switzerland.

As our Polish friend reaches London Friday or Saturday of this week,
we may be able to dispatch him at once.

They have kept you advised from New York as to the arrangement with them.

Apparently they are a bit pressed with their exchange,

and we have agreed to assume our share of the yellow man's burden and
make them a loan on gold, which we are bothering them to ship to ycu,
and bothering you to receive.

I an not sure of all of the particulars

and leave it to Wrw York to advise you.
There will be much for us to discuss, and I hope you will
not become so involved in Caillaux's visit that you will be worn out
with it all.

I am troubled about the rate situation.

It would be dif-

ficult indeed for us to make any reduction, and if we do not reduce it
may be difficul

for us to take care of all the gold that we get.


there you are.

Dwight Morrow is here this morning, and Gilbert reaches
Paris this evening.

I shall have a good talk with them before seeing


My beat regards, as always



September 26, 1925

My dear Norman:

I am spending,

Saturday afternoon at the bank to clean up some mail, and

could well spend s number of them before I would free myself from the accumulation.
It is most difficult to

write you an

account of affairs while we are

cabling eo actively, and I shall ask you to read this letter as of its date of dictation rather taan the date of receipt.

On my return
consideraple change


of business

home I fount., as I cabled you, that there had been a very

in our



the entire country.

in fact, rather the reverse.

had long felt eoncern, seems
result oi


year' b

There is taking place a conaiderable expanI cannot, say that it ie


The whole farming community, as to whose situation we

have e been lifted out of the slough of despond

gooa crop and good

pricee, and, of course,

this gives rise

to optimism both with the farmers and with those who realize that the spending power
of the farmers has teen greatly increased, and who see that as the foundation for

increasine:, rneir

°trainees and commitments.



business, and the effect is shorn in their earnings.

are doing almost a record

This is also true of many of

our industrial establishments, notably the motor com-anies, and all of the contributory

And it is nom being felt by the steel


which, until rc:cently, had

teen lagging behind the others.

The best judgment that I can get convinces me that the development is not

that traders are not over-extending;

that inventories are not pilint,

But in this country good business is always discounted by certain classes of


,..nd the reflection of this development is largely in


stock market,

an active speculation

Mere there has been


a spotty speculation in real

but in ?, smaller

wr,y in

with rising prices and a considerable

Theonly other unsatisfactory development

nlergement of the loan account.


Governor Norman



estate, principally

some other




the Atlantic seaboard,

is still going on at a fever-

ish rate.
I found that Lome of my associates had

increeee in the discount

been seriously



neve theleee, under some tacit obligation

rate to 4)b, but,

not to make the chenge immediately after the

Treasury operations of September 15,

which meant awaiting the firet of October.


of e similar sentiment

was also adviseu of the

in t;ashiagton, and further that the

Boston was contemplating

Federal Reserve Eank of

increeeing its rate.

I did not feel willing to wait the Open

Market Investment Committee

meeting echedulen for eeetember 22 in taehington before eeudice, you icy

best I could do

picture which I

ecrd, and

t' HZ. my cable No. 51, which releeted simply that part of :,he

could see in New York.

to you


and a

It as not

intended to be more than

bare indication of pos8ibilitieti.

Your No. 18, paragraphs 2 end 3 lanceted to me that you felt, as La
our position, that a reduction of your

in ours.

This is meteurin_; the

rate eould be the equivalent of an increase

situation solely from

the standpoint

without 7c1Z,arki to domestic matters, and my reply, No. 53, indicated


in your


sug5ested that a reduction by

tendency of money rates here
in a domestic
send word

way it would

until after
Now it

you might be

that while the

appropriate, the

and this speculative dittidLiOrl might indicate that

be appropriate for us to increase,



but that I could not


develops that my own point of view is really held by elmoet

all of my associates,

and I should explain briefly

what this view is:

feel that the Stock Exchange speculation may reach a

need to be taken, but, on the other hand, that

of the exchange

must neceeeari-i be followed by at lees-re

we all

point where some action will

a rate increase by this bank, .which

similar increase in Boston,



Governor Norman


,411eveland and San Francisco, and possibly other increasea by those benka now having
rate, would reeer-it in a general and censidereble revision of interest rates
throughout the eouatry rand for all classes of loans.


is net only in the foreign exchange.

The danger of arch a result

"Zile it might have the effect of checking

speculeton to some extent, and would be regarded as directed at that if it 4ere not
effective in eneewin6 iL, it 4oula likely be neceuee:e for ki: to make another increase.

But the refl danger in this first etep, and in the conseeuences described, is that it
might at least temporarily neve Eu ch an effect upon the negotieLion of foreign loans

in Chia market as to 63riously intarfeee with the normal movement of the crops and
create eifficultiee in eupplyint6 the exchange to enable them to t o e eic for.

development migbt, indeed, have euite an unetttiefacLory reaction
situation, which ie no

LA:U. :if -.C1.0.17

1 il .70 Et respects.


Such a

upon the business

acid, I still feel

that it is wiser to take some risk ae Lo the upeculative market and to reduce the
risk as to this internAtional cite Alen to the very minimum, end that means postponing
,14n anve.nce in our discount rate for e0Ne 1: eriod longer.

Alt this conclusion could not be arrived Lt

ithout deLey and discussion

with e lumber of eeople.

This is a vary large counery and ee Lave a very conk liceted

central tankine eyetem.

I eoula not have cabled you is I clic in my No. 58 had I not

had the beeefit of the viers: of meny others than myself, end, fortunately, of thobe
most able to express eolend opinions.

I Was ebarrapeed to find that you had concluded your plane for the

of the conversion loan in the light of my earlier cables, and can only beg

that when use are cabline in this fashion, you warn me of such a development 60 that

I may have that especielly in mind and take steps to avoid embarn.saing you, which
I certainly will endeavor to co.

There can be no certainty as to the continence of our 3-1/2% rate more
than from week to week, or fortnight to fortnight.
poetpone an inereaso ,just as lone as possible. es wall
Federal Reserve Bank of St. Louis

It ie our earnest desire to

-,e believe it is

ml in the general interest, and I


in our on

endeavor to give you as

Governor Norman


9. ?6. ?5

fly werning as possible 'of any indication of a change, but you will not take my

ligables, sent

o long in advance of a dwte of action, ts in this instance, he

Ainore thin hn ender,vor to keep you posted until the time comes for me to z:ive you

definite ford.

May I hek you to keep in touch with Gilbert about his plans.

He may

be coming to :hi a country later and if you could r.rrmge your visit so as to be
hare at the sine time, I think it would be adviinttgeous for all of us.

Please write me suite fully, and relieve my mind of any feeling of
reeponeibility 8d to the cunlersion le in, if you feel able to do so.

My best regards to you as always.

The Right donorable Montagu O. Norman,
of Eiag17.nd,
Threadneedle trcet, Loocon, E. C. 2.

P. S.

As all of the unconfirmed confidential cables relate to this mbtter, I
am attaching copies hereto of:
Your t 24 - September 25





,Y 54







October 2, un.

My (tear horoan:

Tour letter of S.ei:temaber

.-nd the enclosuree reitched
at litter I Lt.d elreeey r_earci from (Albert 1.nd Mc Carr h in regaro
tai e3 nee develo-ment in the eff iro of tho Relohabank.
emt ae suite k budget Of kaperb to rcqci, including copieu ot' Air leel,
to you of :':".tf..-mber 10 ald 13. Ana I hove els° rand fA co,-.4 of bruins'
letter to Addle of 5,Qtf:saber

In view of ell of to ciro_leetlnoee, I heve replied to
Gilbertte invitation by writint, biu .suite ft:11y, ft r) :er the enclosed
I hope yo, cio not think it too pedegogio.
It would be dietueoin3 indeed if thie development resulted
en le not iimpoesible, in the dpre.3.I of e feeling of dieeA1:4faction
and distrust as to the Germqn eit,..4.ttion throughout our teulkina3 coramunity.
The consequences reluire ao elehorstion.


I hive alreaoy eritten to Dr. Schacht, trout FttteikpLiai,
to ex2reee .ny "roar views, but inc,uiring as to the C1 rcumNt rice.. u
expreesire; the deer that it ge.y indinate ri development in connection
with the policy or the heicuebcink which miiht impede or nefeet the
progress of reconetr,ction.

The 1 .1 St fe7 thlye have had t'eir full ae,-_eure of !loom, the failure of the French negotiatione ZZict the ciroumetencee eseeeiuted
ith it., this development in the F.eichat..nk, %no some other things of
lees COQ b it. etc e.
It sometimes mekee re vancor whether the gene is
...orth the candle.
But et ny rte our frit.Inds from Belgium seem to have the
coura-e of Lteir oonvictione, ..nci I
uwaltine cable advice from you

'se VI the not stop.

In view of tne fact thet both .eearn. J. F. Morgan &
and the Guaranty Trust Comperay are fieoal dents o' the liel.gian Uov,trnmeat rand the ma.tters have been diecuseed with them, I nave takcAi hbe

liberty, very uon'identifily, of advising theit of the possibility of
a visit from Ileutain !,nd poettibly L115

CLI Oct Mini eters .inc of amply
eakik; them to let me keoe .,;romptly if they have any uo,6eetione to

able which

Mr. Norman


Ilkmake which eould have bearing upon


All of these


your plan for a

their visit


to this country.

matters make me

more anxious thee. you do not
visit here at the end of this year or early next

Now e. very conilidential suggestion to you as to h poeeible
the terms of the London protocol
plan in case dispute arises. The
papers are not before me, but, .s I
certain questions are to be
referred to the Reparation Commission and otters to areitretore, une the
proceaa of &electing arbitrators is all provided is the protocol.

Ly Dr. uchacht.
Ae I recall,
provide a method for interpreting the


personally, believe that the else course for Gilbert ,ould be
to prepare the minds of those vith %born he is eesociated for action direotli
in eccordance with the terme of the protocol.
If be is satisfied that he
rill en4oy the support of his colleeguee, eared if
that the propose' of the kinistay of Finance violetee either the
plan :end of the protocol, then, instead of erguing the
matter with the officials of the iteich, he should Amply notify them that he
has invoked the remedies provided in the protocol end will do so et once.
Of course he must be sure of his ground. :huch a course would be
in the line of procedure indicated by the ai,,,reements ano treatise, eud eould
make the German Government conscious of the fact that the coueequancea of
evasion or violation of the plain might be even more eerious than NOU10 be
the unf'ortunate coneequencee of the propubal which they now advence.

he is :urther

or the spirit of the



I Lyme reason to believe that this arte:;ention will be conveyed to
orii;inel idea of my on at all,
ri ant to assume responsibility for it when I feel so little ecquaintea
with the situation beyond the papers sent to me. Thda reserve ie pertly due
teledram you received from Dr. Echacht.
Of course you know without
word from me that he his my entire :_yrepathy in any ;a:0gram
seeks to
the Dawes Plan and of the heichebank.

nor do I

In fact I ers not advancing it es an

to the

maintain the integrity of

Gincerely yours,

The Right

Honorable Liontegu C. Norman,

Governor, Bank of England,

October 2, 1925.

Lear Norm

.since the receipt of your letter of eeeptteaber 2.1 I have

been ',zombie to cee Mr. Simmons, the President of our Stock Exchange,

but I expect tc do 6C+ on Mondey end at--4 be p.b1Y to make some suggettione
to him /Alia ..ill be useful to him in connection eith hie visit abroad.
I think you doubtleas understand that in

recent years the

policy of the New York StOCIC Exchange has undergone a considerable

change au the result of the introduction in the mums :event of its effeire of some of the younger element with more progressive ideas
had prevailed formerly.
Yr. .:eyelour Cromwell, who preceded Mr. :Ammons as President,

reccetly killed in a regretteble &colt:lune, uneertook 5 series
of reforms in the policy of management or the affairs of the Exchenge
and eho

which had met with public.: support and approval and ehich some of us
believe hove very much improved the general standards and pr,ctivee
of the Exchenge. This hes not only to do with the mechaniaa of tracing

end settling, but had much to do 4th the general standards of ethics
A determined wax has been waged against
applying to ceclings in atocks.
the so-called "bucket shop" traders. Anything savoring of sharp practice
or violetion of the rules of the q.xchtinge had been investigated eno, in

many instances, rather severe ciiedipline hf1.3 been administered to
offenders. Generally speaking, I think for the lest five or six yeere
the whole etmospherc of the Stock Exchang-e has developed
under the newer management in h etrikinz; ens conmendable

Something over e year Et-F;(3 Cromwell retired in favor of Simone,
who is one of the younger members t-TICI a member of Rutter and Gross. I
He is a man of integrity end, I believe,
have knoen his a goo° m:etly years.

of considerable ability, who enjoys the respect of the members of Lhe

chile his house is not one of the lerger ones, it is in every


way well regarded. Mr. Simmone is, I should imagine, a man not yet fifty,
and 1...ossibly without the energy and imagination of his predecessor, but
nevertheless I believe he has proved to be a eetief%ctory _nd progressive

I shall have a talk with :Mr. Simmons on Monday, and possibly

If you are able to
promote the object of his visit in any eay, I shall appreciate it.
ask him to call to see you while he is in Lonuon.
The Right
Federal Reserve Bank of St. Louis

Very sincerely yours,
Honorable Mont Age C. Norman,


Ootob,Ir Z,

My deer Norman:
Supplementing my letter of October E, I h!ve ju =t
haci a talk with Mr. .:iliumons, and he tells ma


mattera hve Lriu,n will necessitate d6ferling nib trip
to London until next e; ring.

I shell probably give him a not of introCucii.:n vc,

you, and kou16 to glad if yo3 wuld give him a few :Ainutea to
enlighten him about the general stock exchenge position in
::incerely yours,

Right Honorable W.onLegu C. Aormen,
Governor, Bank of Snglhnd,
London, Engltnd.

November 7, ain
My deer Jona In:


.,okno-::ledz,e your typeiiritten. Oa



-2. 0 1.


jut sencluGeti our 1,11 con,-rence %4'1.-h

.The itu/f-.tien
developli.t.lit h


up 33

o.41:iot4y uLii..


tiTtJ tap:C.11-!_ti
s Y1ia, in :Ale

Pti0p16. is not going to be shtislico by
turn its utt.nti on L'3
isot un_ier winy it. ouin t:e ve,ry nifficult

ie io2.t important

-took cw.-kzt, sac
1.-.e in cY:ry
for once

11r.v...oubGt'diy the iispt...iculettion or the pre..ent

the belief


t.E.-wp....r o:

of m1o, 3riin.t1y fms.aetin2,, posiiibly, from broxor:2
spred tbr3u,..1out, the e-::...tutry.

Ootob if' 1g.

iterf recent.


tr intoack trom ww.shintiton I


1: u.




tt.,e improivement in
that ther t ...ill

ich 1.: ri.ri, :tan,

i. r

pt.>. LIbly .8
rituch as SZ.30,303,000 next yetr.
A thirt.-, r.311 i th:it z.t2F.:re i..t feeline
there is ample.. moo y
ti.t. ou:.


onenrecluc..c.:1 to 44 &ad

No ...v the speculator ii.
.:.)re I
1uened y
h/Ippen t,h..h he it by the hap?nninLs, henos,
our rsr.e to 4%, ht:
iould be inclin:.A to ely, as he no oft-in (joist, Ca-t. th't
then, !. lul;
Altrch en.i April, he
et his o1
iot ?i6.opted, hih dli commence on
TuesOay (hoT.
1 thou...,tt -.then 1 etlt_d you)
at the Foet.on trine to
ere,ite the ts.pprc.h;.,nrion th-...t se
vfve,nce our 'Ate.
i:hen F'rict,y moraine, it is discovered thnt
not, the

upicard me4e mrj oegin .in,



encoumer tt. rate ?..t.ivance oy,
(..1--Areland Ind S9.0 Fr,neisco.
Damoolem All be PI/ :'end cki over their

i.o.l.ty or TLve:i.:..y


Amr! the !...aste thin, ?gill Le

In other '.orde, the riio?..1

for time.


Duria::; this perioc, with :foul m-rket open to f'orei;n loeas, you
may be forced to vncc your rite,
thA ..suld, indeed, (io much
stop the
margin trader.
The Leer: for this particular type of tre.ttmen7,
adses from
the fPct that the Stock. Exchare to L.ccount
wier 53,1 above the
previous high tater mark in an advancing g stock mc.rt
tsothirds of
the money emplovd in this specul!ttion comin from outside of
New York, - or certi..ialy from other thw New York City L,Anks.

The feet th!-..t the pro,,r.m

spread over

erioc of tire::



Governor Norman

_progressive .itrJ cumultive in
fect and be guided accordingly.


all of this rod



ivee us opportunity to observe its

attomp:. to winipul

rt:ry :!;,,ch like

1.,:: the

I confees tbat I h.Le it.
It is repun..nt to ME in .s.7:-y poa1111111V
eitle aLp,:.t.
1,, it the sort o!' thin
tht could not Le nece:?Gary .1-, Il if
t4enerl remunption of :,,old p4m:lit lad been effected throughout the ;;. ,.: and
we h,:.d beet at1t7 to effect zone diAributioc of our eAce
,7;u:-. *.''',6.. v.f.
etock ref.rkeL.

0Q5Mi; a St.%2B7 tiut tbe h -3t sort of -,-,1,n3 cin 't's h.:nii.:, .1),)'.! ty a 00,c(il,Itive

orgies snd yat the temperamat of the people of thii coun.:
eitustiona o,!.nnot be


ilion that these



tot' iievelopav,at


C.C7-71.-.e in ;:.ri cef-

is partly

reasonLble one to




corretpon-..ia,, iO


16vol, chic..:, 13 .koother



t,he depreoi,,tt.d durr.-ency 1, no I:air:4 c,:.-frie.4 out into 01,- industries
c tnoed
which product nxid on.rry the cuirtrio4.1.1:,iet,.
It i.







to ail of


your l't


cotfortec, is

thc jcU 117- f:.,:10!
scf.x.c. to






24. Lt4,1-:

in ttc.


:-rLgrs,ph o:

i L'AC L3 you in July



!d6ht Hoctle_ YeLt.,L.,u C.
Covcrnor, Thee r,

P. S.

i.noe the
I must ask you co take into account Lhe 15pe.e of time
in,lec,d make
dictation of this :.Jor its re,.dir,

d ifercnce.


s:,..414ement 01 vac:,

MISC. 140 8
(MISC. 14013 1-IBM-7.661)

November 10, 1925

My dear Norman:

I hope you will pardon the delay in replying to
yours of the 21st ultimo.
I think you may have been misled by a correspondence of figures, which is a happenchance.

Our advances

on gold to foreign correspondents have increased in some
cases and decreased in others, so that the net difference,
ZI. 2,800,000 is really no more than a coincidence.

The change in the figures of the Bank Folski
which is significant is the increase in the item 'Liabilities
in Foreign Exchange" between September 10 and October 10


from ZI. 24,643,000 to zi. 41,684,000.

This just about

offsets the total advances on gold of $3,400,000 which we
made in that period.

The increase in "Foreign balances, bills and money"
and the increase in gold are doubtless due to other causes,

except that the item "Foreign balances, bills and money"
may reflect unused amounts of the credit which we have given

I hope this explains the matter.
Sincerely yours,

Right Honorable Montagu C. Norman
Governor, B nk of England
London, England

270 Park Avenue,
New York, N. Y.
November 20, 1925.

Dear Monty:
I am just pYepari ng to leave for Chicago, but
felt I must answer yours of November 8 at once, for I h,ve
been most dilatory in replyi ng to your Plodge letters.

You don't mind, I -m sure, a few comments passing
through Miss Bleecker.
In some ways I like the arrangements for the future;
in others I don't.
In the first place, I have a great real
of confidence in Trotter. If there is any reserve, it is
what I once expressed to you, th t, after all, responsibility
will have much to do with remedying what is probably more a
deficiency of manner than of fact.

The thing that is not as clear to me as I would
like to have it, is
First, whether this is anything less than a
tempor&zing solution of the whole bank problem;
Second, whether it ever will be possible, after
seven years as Governor, for you to occupy a rather anamolous
position, where you are neither a-foot or a-horse back.
But, of course, two years hence is two years hence,
and the immediate future I believe is disposed of as well as
it can be.
And all of this I am looking forward to discussing with you when you come in December.
Of course I am expecting you to sail on the sixteenth, and to stay with me at 270.
Ns for Christmas. Phil and I will be alone, and we
would like to have you stay here with us.
So there is no
question of going out of the way.
ith my mother and sister
absent, our Christmas will be a slender affair anyway.

Now about your health:
It troubles me that you
should have these outbreaks of one or another sort, really
indicating that something needs attention, thou(;h it may be
obscure, but, nevertheless, lurking; in the background, ready
to pounce whenever you get below par.
I know all about those
thinfs, and how necess.ry it is to get at them fundamentally
nd not superficially.

Nbout my own plans:
They are still as unformed as
So lon;; as my health remains reasonably satisfactory,



A great many th-nks to you for your help for my
Mother. I have written to your Mother, prld to mine, and suggested direct communication between them.
It will be fine to
have those two ladies meet.
I am not only obliged to dictate this letter, but to
ask Miss Bleecker to sign it for me.
Now take care of yourself, and accept my blessing.
Faithfully yours,

The Right Honorable Montagu C. Norman,
Thorpe Loge, Campden Hill,

London England.

&ovember E7, rokb.

My dear Governor Norman:

ro:r kind latter of Soveadhes bus: rescued me on
my rsturn fron: an absence, and I t,a rettlly suite st 6 loss to adequately express the great pleasure ai eatisfaction rehicb this ect
of courtesy by you snd your associates he..s ciien me.

Of course, you, better

anyone, E

rts el te the

sentiments of respect and affection which I feel for your great
orgaLizstion, ct d the honor 1r


I hold all of thove breve com-

rades o yours trao croszert til3 dark atter to the further shore.

I shell cherish tnie

or our association end friendship Ea

one of my most i)riceletio posts*abionei.


'tamest ELLitiumnce of my orstitude, I beg to remain,

60110 rno

Tours (sincerely,

Right Honorable Monte gu C. Norma n,
Bank of Englraid,
London, angland.

December 3, 1925.
My dear Monty:

First, my apologies once more


typewritten letter, which

is the best I can do with the time at my eiepoeal.
This acknowledgee yours of November 23, Croke Harrogate.
it *ea written we have agreed upon an arrangement for Belgium, and anything
that I might write would be out of date anyway.
You will have heard from me, by letter and oeble, in regard to
I am defin tely expecting you; have your room reserved;
But I shall not attempt to meet you
am free of any engagements whatever.
down the bay, as the weather at that season is too bad ante the trip down on
the boat and waiting arouna without decent shelter on the Revenue Cutter is
So I shall see you on the dock.
too great a haaard.
your visit.

If the
This time you may, I fear, encounter .tome publicity.
reporters don't catch you on the boat, they may do 80 on the dock.
are caught on the boat, I think I would be inclined to tell the newspa7er
is more a holiday than
men that your trip has no special significance;

anything; but thee, you are coming over to make us a vi sit as you plan to
d that if you have any statement to make you will mete it
do every year;

after going to

the Dank.

Our bank


position will, I
It woulu be awkwara for

hope, work

out better than


us to advance to four on the eve
cables suggest.
of an issue of $400,000,000 of Treasury oblis,atione which ere being figured
very close to the market, and which must be offered on the eighth, - the may
It would necessitate a difference of
following next week's meeting.
one-quarter of one per cent at least to the Treasury, and I think with the
exception of one or two people we are all generally ::greed that the really

fundamental conditions here do not well require an advance.
announcement of
has tempered doen a hit, but still needs watching.
your advance today hee had a little dampening effect, and now the market will
or early in the morning of a change by us.
await word
As we will not advance, they will still have the feeling that the sword of

late this afternoon

Demooles is suspended over

their heath,.

I am mighty glad

You will
that your rest did the business.
boat, and, I hope, a more restful time here with

have another week on the
me that you did lest time.

Possibly lie could get e.eay somewhere for a few

day s .

If the four per sent rate has helped, as you suggest, far be it


Mr. Norman


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