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

[January 15 (from Anderson)]
January 18
January 24
February 10
February 26
March 9
(March 18)
[April 3 from Osborne, with clipping and
Monthly Review of Midland Bank]
(April 6)
April 8
April 8
April 15
April 15, with February 5, 1925 draft of "Report
of Committee on the Currency and Bank of
England Note Issues"
April 20
April 22
April 24
(April 27)
April 30
May 5
May 8
May 11, with memo on Cooperation between
Central Banks
May 13
May 15 [copies of Report with Norman's
compliments]
May 19
May 26
(May 28, with clipping)
May 28, with copy of May 13, 1925 Gold
Standard Act
June 4
June 5
[July 28]
August 15
August 16
August 17
(August 17)
August 19C
August 20C
August 21
August 22C
September 19, w/ September 8 German
communiqué, September 14 cable to Schacht,
and latter's September 15 reply
September 21

[September 25 (from Anderson)]
October 18
October 19
October 21
October 25
(October 30)
November 1
November 8
(Undated page 2 & 3)
November 12
November 18
November 23
November 28
(December 2)
(December 3)
[December 10]
[December 22 (from Anderson)]
[December 29 (from Anderson), w/ 2 cables to
Norman]
December 19C

Strong Papers Key:
06/01/04
] = 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 PAPERS,

Norman to Strong, 1925 - 1926

Jan.15 (from Anderson)'

11.44 0-4.,Q

116:25

1926
Jan. 21
Jan.29 (from Anderson)
Feb.2
Feb.5, with letters to Letreux
Dec.8 and Hautlin's reply

Jan. 24
Feb. 10
Feb. 26
Mar.9
Dec.15,Jan.30-PRq-,;=1Asse33's
Apr.3 from Osborne, with clipping and Montlly
lettepyFebv3y1926-Review of Midland Bank
Feb.5, with Janssen's letter,F
Apr.8
Feb.11, Belgium, General Surma
Apr.8
Feb. 11(from Anderson)
Apr.15
Feb. 19, with memo on Belgian L
Apr.15, with draft Report of Committee
Mar.4 (.eepy?)
Feb. 5, 1925
Mar.5
Apr.20
Mar.9, with memo on Belgium
Apr. 22
Mar.9
Apr. 24
Mar.11
Apr. 30
Mar.18 (3 cables)
May 5
Mar.23, more on Belgium, with
May 8
letter to Norman,Mar.16
May 11, with memo on Cooperation between Central
Mar.24, with questions for Amer
Banks
witnesses
May 13
Mar.30 C(from Anderson)
May 15, Copies of Report with Norman's Compliments
Apr.1 C(from Anderson)
(Tot in this file)
Apr.1(from Anderson)with memo
May 19
Norman's and Addis' evident
May 26, with clipping
May 10(from Harvey( with Rytit
May 28, with 2 copies of Gold Standard Act,May 13,1
925
letter,May 4,Norman to
June 4
Aautain,May8,10 +12 and
June 5
Hautain's cable May 10
July 28
May 19 (from Harvey)
Aug. 15
May 19(from Harvey)
Aug.16
May 20
Aug. 17
May 31
Aug. 19 C
May 31(from Harvey)
Aug.20 C
June 8
Aug. 21
June 12,with A.Miller's letter
Aug.22 C
June 3
Sept.19, with German communique,Sept.8, and cable to July 3(from Harvey)
Schacht Sept.14 and latter's reply,Sept.15 July 19
Sept. 21
Aug.19 C(to Harrison)
Sept.25 (from Anderson)
Aug.30,with letter to Harriso
Oct.18
Aug.23 ,and Harvey to Byt
27
Oct.19
Oct.10
amilmer
Oct.25
Oct.17,with note to Harrison
Nov. 1
Oct.21,with clipping
Ty
Nov. 8
-e-ttrPS-r7cr')"'
Nov. 12
Nov.17
Nov. 13
Nov.23
Nov. 23
Dec.12
Nov. 27
Dec.15(from Lubboc
14610h4-

Dec.10
Dec.22 (from Anderson)
Dec.29(from Anderson),with 2 cables to Norman

Dec.19 C


Also. Hautain to Norman,Dec.1

4iaT4444eveile
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(Handwritten letter)

9. France le 18 Jan 1925 ack by hand 2/18/25 TSS
B rd
French Line

sy

My dear Ben

You wont be expecting me to write you e letter? This beast of a shop rolls so
much that I can hardly sit on a chair - much less write at a table. But
whatever this year may bring forth for us 7 I am glad to have begun it with
I certainly e m
you: it is always true to say that we dont meet often enough.
not blessed with a "machine" which so far runs itself that I am free to be away
from London as much as I would like, whether with you in N.Y. or on a vacation.
indeed to get together once a quarter if we are to keep together all
We ought
the year: that much we shall hardly manage: I guess once in 6 months is more pro
Pt least we h.ve made a Iglod beginning for 1925.
I am glad to have seen something of Phil & with time there had been time to
have some talk with Ben. I think Phil had better keep house with you (for the
sake of both of you ) rather than pack up now & go abroad. Remember it is
not good for man to be alone of an evening! I have tried it & can speak! 1.nd
if you are writing to thtt girl or woman out in Minnesota, wont you give her
affectionate greetings from me? I have to often thought of her since the day
she plunged into the stream of Life- I wis h you joy down in Florida & a store
of health.
I will cable you in a week or so, if our a Ubject begins to show a
definite course. tnd you know Ben, I am grateful for all your welcome & hospitality: & for all you do for me & are to me.
Gld bless you
MN







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Thorpe Lodge, rlampden Hill, W. 24 Jan 25

Dear Ben
The second
evening I was home, as usual I changed clothes in the evening & on going
downstairs discovered myself in the disguise of a gentleman if not a dude!
This was due to a velvet jacket of good style, fit & finish: In other words,
Ben, I can only look respectable with the help of your wardrobe!

lintSince I wrote on the steamer a further crime has been discovered.

Whit .m I to say to you. I will keep the jacket - at any rate until you come
again -& I will wear it whenever I want to look nice or to recall 270 Park
Avenue. Further I am thankful, as you know.

The last 3 or 4 days have shown here at the Bank a general approval in principle but a s trange opposition in detail to the scheme you & I disnussed.
It is so easy for them to be critics of any scheme - as they are not called
upon to produce another - & to cry for the best of both worlds! Fut with or
without concessions I begin to feel that they will be worn down... & then will
begin the real tug of war... parliamentary & political.
I hope the sun shines at Everglades: Perhaps you will gather as many fish
s tories as most tr; velers seem to do when they take to a boat in Florifla
instead of e golf links?
Ever yours
MN




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CONFI;IENTIAL.

100 01)

a
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CONFIDENTIAL.
zlitit

of Ohtgland,

Sutton,

(sib

E.C.2.

26th February, 1925.

4SP'1si
My dear Strong,

Farrer is
In the course of a few days, Gabpard
stay there, or thereabouts, for
sailing for New York and plans to
and you ca
I have asked him to call upon you
a couple of weeks.
perfectly frankly and safel
discuss any matters you like with him
Committee which for months pas
He has been a member of the Secret
gold policy, and any action that
has been considering our future
(on the lines, for instance, which
may be taken by our Government
would be on the advice of this
I have already cabled to you)
Committee.

for a vacation
I hope you are all the better
Florida:

you needed it badly when I came away.

That infernal.

of "perpet
French boat I came home on gave me such an experience
couple of days I am goin
motion" that I am still tired, and in a
15th parch.
to the South of France until the
complete that
Our cables have lately been so

add to this letter.
there is nothing which I can usefully
With kindest regards,
Yours

Benjamin Strong, Esq.



t sincerely,

9 March 1925
LE BOCAGO,
COSTEBELLE,

It

ifft,RES.

Lcknowledged:

Mar. 21, 1925 B,

My dear Ben, You see from this
that I am in the Riviera. I was so weary and done up last
month that I had to go to bed for 8 days and then came here.
ana cannot stay away
On the 14th, I shall be in London again:
longer because the dhange from Lubbock to Anderson is so near.

All official consideration of a gold programme was deliberately pushed over to this month, so that nothing about it should
come out until your Congress shall have adjourned. Once the programme is taken up for consideration, I don't think it will take
long to reach a Cabinet decision in principle, but it may take 2
or 3 weeks to have the administrative details settled. So I told
you (from London) that if we begin consideration next week (as I
expect), we cannot expect a final decision before early, or middle,
Lpril. Meanwhile I shall hope to have it all kept secret, and of
course out of Parliament till the end.

I hope you are the better for Florida:
you needed
I was distressed to see your greater trouble in walking about
(partly, as I believe, due to Camelet) On the other hand, your
organisation is wonderful -- well ahead of ours:
For we are hampered by a tradition which helps us only to do what has become
less than we need to do and beyond that, hampers us.
I enjoyed
every hour with you and am the better for it. Also I was glad to
come closer to Phil:
let me know what line he decides to follow.
And give my love to that girl in Minnesota, although she has gone
away and left Park Ave. the poorert Morea, was here for half an
hour a couple of days ago on his way back to Paris:
he needs
longer.




Ever yours,

MN

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loth March, 1025.

3°E

ry dear Strong,

ITany thanks for your noto o

tho

27th robruary, for tho Roport of your 3a k, and
for your nromiso to send tho Ilerort of the 7oderal

Recervo Board for tho same period.
I

sorry vg) cannot reciprocate.

S I thoucht you Toro aware, wo publish nothing
ourselvos beyond tho weeIay .o turn.

Dolievo me,
Your:3 cincoroly,

Benjamin strong,

::1.7.(1.




CONFIDENTIAL
xtt

*CKNOWI,EL,

Soncion,

IIINA APR 2 1 1925
T.t

of 6itgland,
E.C.2.

8th Apri1,1925.

ft';

My dear Strong,

Referring to

our recent exchange of cables and

especially to your 58 and 61 and to my 3, I now enclose a formal

letter addressed to yourself as Governor on the lines of your
draft of the 13th January as subsequently amended.
I assume you will reply to this enclosure in
accordance with the letter drafted for this purpose on the 13th
it is important to us to have the statement that

January last:

the discount earned on any sterling Commercial Bills is to reduce
the interest on amounts outstanding in New York.
I am grateful to

you for all the trouble which

you have so kindly and willingly taken in connection with these
So far as concerns the arrangements between our

arrangements.

two Banks, there is not really any difference of opinion worth
speaking about:

but when it comes to the arrangements between the

British Government and J.P.Morgan & Co., then I find myself
between the devil

and the deep sea.

I think the trouble really

arises from the difference between the business and the official
mind.

The former (J.P.Morgan & Co., or you, or me) thinks it fair

and reasonable to
an advance:



pay some commission for the right to call for

the latter (in this case a Minister, an Official or
a













rnth

CONFIDENTIAL.

of angina,
Joann',

E.C. 2.

15th April, 1925.

My dear Strong,

I send for your own private eyes a draft
Report of the Committee mentioned in

my letter of the 26th

February which was set up in effect to settle about a free
gold market.

This draft you will see has the appearance of

being final - signed and dated.

But as a matter of fact the

Report never has been signed and is still in process of
alteration:

it will probably be completed and issued by about

the 28th of this month.
Yours

Benjamin Strong, Esq.




sincerely,

(C/

)t4AA.c4,..4

\t

18

0-SECRET.

REPORT OF THE COMMITTEE
ON THE

CURRENCY AND BANK OF
ENGLAND NOTE ISSUES.




/







4

7. The former need not, now that the current exchange rate.
are already within a small percentage of the pre-war parity, be
seriously considered. It was never, in our opinion, a policy which
the United Kingdom could have adopted.

8. The latter, in the form of proposals for substituting the priee

level of commodities in general for gold as the regulating principle
of the currency, has been fully and carefully explained in evidence
before us. We need not here set out the arguments by which it is
supported, which have been published and are now well known.

We need only say that, as a practical present-day policy for this
country, there is, in our opinion, no alternative comparable with
a return to the former gold parity of the sovereign. In this conclusion we are supported by the overwhelming majority of opinion,
both financial and industrial, represented in evidence before us.
9. Starting from this fundamental position, we propose to confine
ourselves to answering the questions when and how this restoration
is to be brought about.

10. When we first began to consider our Report in September
last, the ruling rates of exchange on New York were still 10 to 12
per cent. below gold parity, and there was some anxiety whether
the normal autumn pressure would not result in a renewed
depreciation of the pound, and whether the limitation on the amount
of the fiduciary issue of currency notes prescribed by the Treasury
Minute of the 15th December, 1919, could be maintained over
Christmas without giving rise to conditions necessitating a sharp
rise of money rates.
11. We entertained no doubt, however, even at that time, of

the ability of Great Britain, notwithstanding the fact that her
international financial situation is in some respects less satisfactory

than it was before the war, to restore and maintain the gold
standard at the pre-war parity, at any time it might be thought
prudent to do so.
12. In spite of the special influences which have, during the last

few years, exercised an adverse influence (of which the principal
are industrial stagnation and the disturbance of international trade
resulting from post-war conditions, and the fact that we are paying
interest and sinking fund on our war debt to America without as
yet receiving an adequate counterpart from our Continental debtors),
our existing volume of exports, visible and invisible, together with
the income we derive from foreign investments is still undoubtedly

sufficient to meet our foreign debts and pay for our necessary
imports, and even to supply a moderate balance for new foreign
investment.
13. In these circumstances a free gold market could readily be
established and maintained at the pre-war parity, provided that by

control of credit we adjusted the internal purchasing power of the
pound to its exchange parity, and restricted our foreign investments
to our normal export surplus.
14. Further, we were satisfied that the mere announcement that
the power to prohibit the export of gold would not be continued
beyond the 31st December, 1925, would automatically and rapidly




,

5

airing about the credit conditions necessary to effect these adjustments, and that the effective gold standard could thus be restored
without further danger or inconvenience than that which is
,..:mevitable in any period of credit restriction and falling prices.

ap- 15. At that time the British and American price levels appeared

on the surface-though it is not safe to attempt to draw precise
conclusions from a comparison of index figures compiled on
different bases-to be fairly well adjusted to the current rate of
exchange; and it was, therefore, to be expected that a fall iii sterling
prices of some 10 or 12 per cent., or a similar rise in dollar prices,
would have had to take place before equilibrium could be secured
with the exchanges at the pre-war parity.

16. The problem as it then presented itself was whether the
undoubted advantages of an immediate return to parity were a
sufficient compensation for the inconveniences-temporary though
possibly severe while they lasted-of the measure of " deflation "
necessary to bring about the adjustment, or whether it would not be
more prudent to pursue, at least for a few months longer, a waiting

policy in the hope that the disparity would disappear through a
use in American prices (of the probability of which there appeared
to be indications).

17. Our provisional conclusion was that the return to parity
and resumption of the free gold market, though it ought not to be
much longer deferred, could not be regarded as a matter of such
extreme urgency as to justify a credit policy calculated to bring
down domestic prices if the same practical result could reasonably
be expected to be attained within a very few months by a policy
designed merely to prevent them from rising concurrently with a rise
elsewhere.
18. The favourable course since September of the dollar
exchange (which now stands only 11- per cent. below gold parity)
and the fact that the restrictions on the fiduciary issue of currency
notes have been maintained without inconvenience have, however,
altered the situation. Indeed, if British domestic prices had

already adjusted themselves to the improved exchange value of
sterling, the problem would have been solved and we are satisfied

that the free export of gold could have been resumed forthwith

without danger either of appreciable depletion of on- existing gold
reserves or of making recourse necessary to any special measures in
restriction of credit.
19. The discrepancy between British and American gold prices
which existed in September has not, however, disappeared, though
ii has been reduced. We must still be prepared to face a fall in the
final price level here of a significant, though not very large, amount,

unless it should happen that a corresponding rise takes place in
America, if the rate of exchange is to be restored to and held at the
pre-war parity.

20. In present conditions, however, this argument against

immediate action has not, in our opinion, great weight. For the
adjustment of price levels required to restore and maintain pre-war




6

parity needs to be only some 11 per cent. larger than that require

to hold the exchange at its present rate. If the adjustment of',
price levels necessary to this end is long deferred, the exchange

will inevitably fall back to the rate justified by the comparative

price levels-or below it, since the psychological causes which have

operated to force it up will tend to act in the other direction-and lir
a period of fluctuating values is likely to ensue. To allow the
exchange to fall back now with the certainty of having later on
to raise it again would be a short-sighted policy, injurious td
trade and industry. But, if this yew is accepted and we and
prepared to face any price adjustment which may be necessary to
maintain the present exchange rate, there is nothing to be said
for refusing to accept the very small (11 per cent.) extra adjustment
involved in the re-establishment of an effective gold standard.
21. The attitude of the Dominions and foreign countries
towards the question of an early return to the gold standard is also
a material consideration. The Union of South Africa has already
decided to take the step in the course of this summer. Other
Dominions will undoubtedly follow our lead and may if we delay
precede us. The same is true of Holland and Switzerland and
possibly other European countries. Although the convertibility of

the new German currency into gold is under existing legislation
suspended, a high degree of stability has been attained and the
establishment of the full gold standard-effectively and even
formally-may take place in the early future.
22. Economic conditions in America give promise of a pried
of financial stability, thus reducing the risk of dangerous reactions

during the initial months of a free gold market ; and prevailing
sentiment there would be likely to be helpful.
23. We therefore recommend that the early return to the gold
basis should forthwith be declared to be the irrevocable policy of
His Majesty's Government and that it should be definitely stated

that the existing restrictions on the export of gold, which expire
on the 31st December next, will not be renewed. A general
licence should at the same time be given to export gold sold by the
Bank for export and the Bank should between now and the date of
expiry of the export prohibition avail themselves freely of it whenever
the exchange is below the normal export specie point, making good
any consequential drafts upon the reserve in the Banking Department
in accordance with traditional practice.
24. We are satisfied that this policy can, given the loyal
co-operation of the principq British Institutions which control the

supply of credit, be carried through without risk by the Bank of
England without external assistance. Indeed such assistance, if it
took the form of foreign credits to be used on any considerable scale

to mitigate the effect of the policy upon credit conditions in the
United Kingdom, would really serve to counteract the very forces on
the operation of which we rely for its success.
25. On the other hand, the existence of a substantial American
credit known to be available for use in sudden emergencies would

tend to discourage speculation and contribute to the creation of a




_

7

& general atmosphere of confidence favourable to the smooth working

7 of the operation.
26. The appreciation of sterling which has taken place since
4111

November, 1924, has been due partly to the belief that an effective
illoigold standard will shortly be restored in this country, and only
partly to a lessening of the difference between the purchasing power
of sterling and of gold.

27. Insofar as this confidence in the future of sterling has
allowed the resumption of those normal operations between New
York and London which had been interrupted by political
uncertainty and distrust in the preceding 12 months, no reactionary
consequences are to be feared.

28. There has, however, undoubtedly been

a considerable

element of speculation in connection with that movement, the extent
of which cannot be exactly determined. To this unknown extent

there may be a tendency, when parity has been reached, for
realisation of the speculative positions to throw a concentrated strain
on the exchange.
29. The proper safeguard against such a danger is in the size of

the gold reserves and in the resolute use of these reserves

(if

required) for the purposes for which they have been accumulated.
30. We believe that the existing gold reserves are amply
sufficient for this purpose, and that a conviction that there will be no
hesitation in using them, even though this may involve a temporary
increase in Bank Rate, will go far to obviate the danger we refer to.
If, however, it is thought necessary to make assurance doubly sure

by the provision of a gold credit, we feel strongly that recourse
should not be made to it unless and until substantial gold exports
have taken place and are already producing their normal effects on
the monetary situation at home, and in the event of the credit being
actually drawn upon, the amount drawn should, until it has been
repaid, be treated from the point of view of the Bank of England's
monetary policy as equivalent to a corresponding loss from its own
reserves.

31. Unless these precautions are taken, borrowing abroad will,
as has again and again happened when it has been resorted to as a
remedy for exchange difficulties, merely aggravate the mischief which
it hes been applied to cure.
-

32. In making these observations and suggesting these pre-

cautions, we must not be understood as anticipating that either the
steps which we propose should be taken at once to prepare the way

for the return to a free gold market at the end of the year or the
actual return on that date may be expected to lead either to a.heavy
loss of gold or to a serious consequential restriction of domestic credit.

British experience of the restoration of the gold standard after the
French wars, 100 years ago, and the recent experience of continental
countries which have taken steps, under far more difficult

conditions, to rehabilitate their currencies, have shown that a
courageous policy in currency matters surmounts apparently
formidable obstacles with surprising ease. We believe that on this
point history will repeat jtself. It is possible that some temporary




8

increase in money rates will be necessary to bring about the necessary

adjustment of sterling prices to the gold level. We are satisfied,

however, that the assimilation of British currency to the gold
Currencies of the world is so necessary for the ultimate prosperity
of British trade that any temporary disadvantage, if such arise, from 410

the measures necessary to maintain parity will be many times
outweighed.

33. Indeed, such credit restriction as may become necessary to
adjust the general level of sterling prices to a free gold market may
Well be less drastic than that which would be required in order to

Maintain a " managed "' pound in the neighbourhood of parity.
If the gold standard is firmly re-established, the danger at appre-

hensions as to the future of exchange leading to sudden withdrawals
of foreign balances or foreign investment money will be eliminated,

and the risk-inevitable under the present regime-of excessive
l3ritish lending to foreign countries will be reduced.
34. With a free gold market, any tendency to lend abroad more
than we can afford leads to a drain of gold, which, unless redressed
by the sale of existing foreign investments, reacts on the general

credit situation in London in such a way as to put a stop to new
foreign borrowing.

35. Under existing conditions the result of excessive lending to

foreign countries, instead of giving an immediate danger signal
through its effect on the gold reserves, is more obscurely reflected
in the general disturbance of the exchanges.
36. We are of opinion that unless a free gold market is restored,
the danger of such overlending on foreign account in the near future
will be considerable and a situation may easily develop in which the
pressure on our foreign exchanges, resulting from overlending to
foreign countries, will necessitate a restriction of general credit.

The Amalgamation of the Note Issues.

37. We return now to the recommendation of the Cunliffe
Committee with respect to the amalgamation of the note issues.

We have to consider whether the assumption by the Bank of
England of the Currency Note Issue must await the experience
of the problem of maintaining a minimum gold reserve, whether of
12150,000,000 as recommended by the Cunliffe Committee, or of
some other figure.
38. It is clear that throughout their Report the Cunliffe
Committee contemplated a much earlier removal of the prohibition

of gold exports than has actually been deemed expedient, and
suggestions have been made to us that the amalgamation of the
issues should precede instead of following the restoration of the
free gold market, with a view to indicating that the policy of the
Government is to restore parity and for the sake of the effect of
such an indication upon the foreign exchanges.

39. If our recommendation in regard to the non-renewal of
the prohibition of gold exports is adopted, the arguments for
altering the sequence of events proposed by the Cunliffe Committee




9

cease to operate and the precise date of amalg
its importance. We associate ourselves with th

expressed by the Cunliffe Committee for the
issue, and it is as true to-day as fiv

lefiduciary fiduciary issue cannot be fixed, e
permanent

to the actual conditions of a free gold market
feasible to legislate for a progressive reduction
definite stages, at any of which the process
unforeseen disturbances. The Treasury can
responsibility for the existing issue ; we dou
would accept it, until the time when effectiv
given to them.
40. In this connection we think it necessa
ultimate dimensions both of the central gol
fiduciary issue must be to some extent depend
the restoration of the gold standard, gold is o
for internal circulation.
41. The figure of .i150,000,000 suggested
by the Cunliffe Committee is based on the as
not be so used. If it were, a lower figure w

being had to the value of gold in circulatio
reserve, as was demonstrated in 1914. On

total note circulation would be pro Canto redu
portion would have to be smaller, both absolute
than if there were no gold in circulation.
42. Any considerable flow of gold into dome

thus necessitate imports of the metal whi

unnecessary burden on our foreign exchang
period.

43. We are of opinion that the use of gold
tion is a luxury which can well be dispensed
are in fact, at any rate during the next few y
able to afford.

44. The payment of notes in gold coin up

itself essential to the maintenance of the g
modern conditions. An obligation upon the

and sell gold at a fixed price is all that is nec
specie payments had been suspended during
not have recommended their resumption.
45. As, however, the right to obtain gol
subsists, we hesitate-though mainly for histo
reasons-to propose its abrogation.
46. We think, however, that in future all B
(including the £1 and 10s. notes ultimately
currency notes) should be exchangeable for
Head Office of the Bank, and that the Joint
abstain from asking for gold coin in exchang

themselves or for their customers, and from hol
0';
445-tive-ao-aaaileAtokittg-to4Ititreffeelt

/0. 487 This, coupled with the national habit of using paper




10

currency, which is now firmly established, should suffice to prevent

gold into domestic

f-sovereigns should

d that the policy
ssue to the Bank

by the

Cunliffe

nery of issue by

and notes cannot

that if the Bank
equired to set up

in mind in order
As soon as parity
ised to begin the
lso be required to
make those notes

et is restored at

the amount of the
n obtained by the

take place early
ate these dates in

URY.

RD FARRER.

EMEYER.

IGOU,













CONFIDENTIAL

CONFIDENTIAL

Page 2

Benjamin Strong, Esq.

20th April, 1925.

terms of your answer (cable No.53, paragraph 2).

But I may add that I have been trying and am still
hoping to have a definite recommendation of the above limit to
the fiduciary issue included in the Report of the Currency
Committee, of which I sent you, confidentially, a draft in my
letter of the 15th April.

As this Report is most likely to be

adopted by our Government as a whole and as their policy, we should

I think, be wall satisfied with this method of ensuring the limitation(which in itself is obviously desirable, for the next two or
three years.

With kindest regards,
Yours most sincerely,
OVrIA-41t/tA

Benjamin Strong, Esq.

I write this because your letter of 15th January contained
certain points (including the above) which though treated as
personal were raised in connection with the arrangements for
the Revolving Credit.

P.S.




PRIVATE
Atoll of If ogiand,

CV NOW LEDOED
MAY

1925

3[Dana, E.C. 2.

22nd April, 1925.

My dear Strong,

In order that you may be assured of my having
observed one of your important requirements (if, indeed, it
was not a promise on my part) in connection with our Revolving
Credit,

I beg you to refer to my cable, No.15, despatched from

New York on the 6th January last, of which paragraph 9 reads
as follows:-

"In deciding whether from time to time to use former
"portion of $200 million provided by Central Bank or latter
"portion of $300 million provided by market it is expected
"that Federal Reserve Bank would be consulted regarding
"state of New York money market."
On the 8th April I wrote to the Treasury on this
subject as follows -

"In the event of recourse being desired to either of
"the Credits established in America, the Treasury or the Bank
"of England shall use the particular Credit which the
"Governor of the Federal Reserve Bank shall from time to
"time select."
I have now received intimation from the Treasury
that they agree to this course.
Yours most sincerely,

11114A-a4A,

Benjamin Strong, Esq.



CONFIDENTIAL

of angland,
ondon,

E.G. 2.

ACK Nf ANI LEE_
MAY - 4, 1925

24th April, 1925.

My dear Strong,

I was greatly relieved to receive your cable,

No.70, which arrived yesterday morning.

It told me that the

arrangements for the statements to be made by the Chancellor in
Parliament on the 28th April, and by Messrs.J.P.Morgan & Co. and

yourself on the 29th April, are quite satisfactory to you.
I am afraid you think that in this connection

there has been a good deal of backing and filling: perhaps you
do not understand our preference for secrecy?

Of this I can

give you some explanation even if you will not accept it as an
excuse.

First of all I am only a go-between and have

been trying right along to find a mean between the wishes of
the Treasury and of yourself.

No one of my acquaintance is

more anxious to use publicity for his own purposes or more
fearful of others using it for other purposes than the
Chancellor: and no one, as I have had good occasion to find out,
is more suspicious of information being disclosed at one moment
which he intended to disclose at another.

Now according to

the procedure which will, and perhaps must, be followed here
when the Chancellor comes to make his Budget Statement on the




28th

CONFIDENTIAL
24th April, 1925.

Benjamin Strong, Esq.

28th April, he will do no more than announce the gold standard as
one of a great many announcements which he will have to make in
the course of the evening and he will, as briefly as possible, and
for the psychological effect, announce the magnitude of his
Resources and Credits in your Country.

While this is the

intention for the 28th you understand that (see my cable, No.100)
a Bill has to be introduced at once for the purpose of
(a)

authorising both Revolving Credits

(b)

making optional the payment of Notes in coin in order
to avoid internal circulation

(c)

closing the Mint to the Public.

On the second reading of this Bill, some statement
must be made and some debate may take place: but when during next

week that second reading will come along, no one to-day can say
with any certainty.

The Chancellor's wish, you will therefore

see, is that any statement to be made between the 28th April and
the second reading of the Bill (by Messrs.J.P.Morgan & Co. or
yourself) shall be in such form as will not force his hand at the
second reading in Parliament.

The briefness and bareness of the

statement which 7ou have now kindly agreed to make on the 29th,

giving as it does but little beyond the outline of the statement

which he will have made in Parliament on the 28th, satisfactorily
arranges for this: and I am, as so often happens, grateful to you



for

CONFIDENTIAL
Benjamin Strong, Esq.

ge 3.

24th April, 1925.

for the trouble you have taken to meet the position here.
Of course there is no doubt that the attitude
towards publicity with us and with you is very different.
The present RevolvincT Credits are to some extent political

and, not only because of their magnitude, important: but your
experience seems to lead you to make public statements in
order to protect yourself against the Press, whereas ours
leads us to refrain from such statements and to ignore the
curiosity of the Press regarding the private affairs of the
Bank!

With kindest regards,
Yours

e

t sincerely,

VOIKVAAJXtik.
.------

Benjamin Strong, Esq.







CONFIDENTIAL

COPY

27th April, 1925.

My dear Strong,
With reference to my letter ofi:the

15th April, I now send you a copy of the final Report

of the Committee on the Currency and Bank of England
Note Issues (which is to be made public on the 29th),
together with a draft of the Bill to be introduced
into Parliament in connection with the re-establishment
of the Gold Standard.

Yours most sincerely,
(sd)

Benjamin Strong, Esq.

M.NORMAN.

it

ACKNOWLEDGED

bank of Mt#1anb

MA Y i.ci 1925

71,-1010011,

TI

F.

.

2

S'

30th April, 1925.

My dear Ben,

I don't know if you will remember a
particular conversation which I had with Dr.Stewart
at your home in Park Avenue, but I think he will not
have forgotten it as we seemed then to touch the spot
very happily.

Anyhow, if you think it prudent on my
part thus gently to pull his leg, perhaps you will be
good enough to forvard the enclosed letter to
:13.shington witho

in any way showing your hand in the

matter.
-

Yours very si c rely,

Benjamin Strong, Esq.



'271

JI

PERSONAL

11L

xttk of &gland,
Soodon, E.C. 2.

fICtio-

5th n3.y,1925.

0:741 t,.05




14- dear Strong,

The Labour Party's motion - introduced by
flowden - to reject the Gold Standard Bill on the

grounds of "undue precipitancy" was debated in the House
yesterday but was not pressed to a division.

I thought you

might like to see the enclosed official report of the
proceedings.

Mr.Snowden, whom you will remember last
year as Chancellor, took this line of action in order to
prevent his Party moving a more damaging amendment;

in

this manner he helped us substantially without breaking with
his followers.

Yours v ry sincerely,

I

IIVIAlielL4tAX,

Benjamin Strong,Esq.,




co-o

152TviiRLOSITEIL JAM.

eoints for lorisideratift.

1.

The maintenance at "Gold Centres" (i.e. those
Countries which Lava an entirely free market in
gold) of 7.eserves of approved liquid assets mmd

the employment of such Nmerves to aeot.re economy
in the uee and movement of gold.
2.

The extent to which Noah Reeerves ehould be in the
form of cold deposits and/or free balances in order
to secure an equitable distribution of the oost
of maintaining gold Reserves.

The complete concentration of Reserves, and co far

as may be possible busines, in a foreign Country
with the Central Tank of that i!ountry.

4.

7I-.e extension to one another, without undue regard on

either side to the question of immediate =akofit, of

the fullest possible banking feoilitios ooncistent
with the varying regulations and practice of the
several lianks.

S.

As between Countries having a balanced Budget and a

moderate 7losting Debt (if any), the granting of
credit to another ..7entrel

Fan'.. to meet temporary

monetery rirteeure due to seasonal (reuses.

6.

The oo.ordination of lredit 4oliey and of tt,e demand

for gold so as to avoid wide fluotuations in the
purchasing power of 'old and in the relative values
of different currencies.
7.

'ssistanoe










PERSONAL.













anh of an gland,




PERSONAL

Ruth. of

Tani

15th May,1925.

With the Governor's Compliments.

c-12;u2A

RcL,t,j, brat
G`ut




ID

PERSONAL

Vank of 60410
ilionbon,E.c. 2
19th :'13,y,1925.

dear Strong,
I' have your note and enclosure of the

2nd Lay,and am accordingly for:tarding to you a

further two dozen copies of the Currency Committee's
Report for the use of Professor Kemmerer and his
students at Princetown University.
Believe me,
Your

Benjamin Strong,Esq.




sincerely,










CONPIDENTIAL




flitit

of (Nlancl,




'TEM TIMES

6th I.:ay

25

PERSONAL

a

Wank of 6404ne

OK

wLeouu-:b

JUN - 1

7f1471091t,E.C. 2

1925

28th 1ay,1925.

R Sk
1y dear Strong,

with reference to my letter of
the 27th April when I sent
you a draft of the Bill
to be introduced in connection with
the re-estL.blishment of the Gold Standard, I think you
may like to
have the enclosed copies of the Act
for your File.

6

Yours '

st sincerely,

/$444.A.44,

Benjamin Strong,Esq.,




[15 & 16 GEO. 5.]

Gold Standard Act, 1925.

[CH. 29.]

a

CHAPTER 29.
An Act to facilitate the return to a gold standard

A.D. 1925.

and for purposes connected therewith.[13th May 1925.]
BE it enacted by the King's most Excellent Majesty,
by and with the advice and consent of the Lords
Spiritual and Temporal, and Commons, in this present
Parliament assembled, and by the authority of the same,
as follows :1.-(1) Unless and until His Majesty by Proclama- Issue of
gold coin
tion otherwise directssuspended
(a) The Bank of England, notwithstanding anything and right
in any Act, shall not be bound to pay any note to purchase
of the Bank (in this Act referred to as " a bank gold bullion.

note ") in legal coin within the meaning of
section six of the Bank of England Act, 1833,

and bank notes shall not cease to be legal tender
by reason that the Bank do not continue to pay
bank notes in such legal coin :

3 & 4 Will. 4.

c. 98.

(b) Subsection (3) of section one of the Currency
and Bank Notes Act, 1914 (which provides that
the holder of a currency note shall be entitled
to obtain payment for the note at its face value
in gold coin) shall cease to have effect :
(c) Section eight of the Coinage Act, 1870 (which
entitles any person bringing gold bullion to the
Mint to have it assayed, coined and delivered

to him) shall, except as respects gold bullion
brought to the Mint by the Bank of England,
cease to have effect.
[Price ld. Net.]




1

4 & 5 Geo.5.
c. 14.

33 & 34 Viet.
o. 10.

[Cu. 29.J
A.D. 1925.

Gold Standard Act, 1925. [15 & 16 GEo. 5.]

(2) So long as the preceding subsection remainikri
force, the Bank of England shall be bound to sell to any
person who makes a demand in that behalf at the he
Offiee of the Bank during the office hours of the Ba ,

and pays the purchase price in any legal tender, gold
bullion at the price of three pounds, seventeen shillings
and tenpence halfpenny per ounce troy of gold of the
standard of fineness prescribed for gold coin by the
Coinage Act, 1870, but only in the form of bars containing approximately four hundred ounces troy of fine
gold.
Power for
Treasury to
borrow for
exchange
operations

2.-(1) Any money required for the purpose of
exchange operations in connection with the return to
a gold standard may be raised within two years after
the passing of this Act in such manner as the Treasury
think fit, and for that purpose they may create and
issue, either within or without the United Kingdom and
either in British or in any other currency, such securities
bearing such rate of interest and subject to such
conditions as to repayment, redemption or otherwise as

they think fit, and may guarantee in such manner and
on such terms and conditions as they think proper the

payment of interest and principal of any loan which may
be raised for such purpose as aforesaid :
Provided that any securities created or issued under

this section shall be redeemed within two years of the

date of their issue, and no guarantee shall be given under
this section so as to be in force after two years from the
date upon which it is given.
(2) The principal and interest of any money raised

under this Act, and any sums payable by the Treasury
in fulfilling any guarantee given under this Act, together

with any expenses incurred by the Treasury in connection with, or with a view to the exercise of, their
powers under this section shall be charged on the
Consolidated Fund of the United Kingdom or the
growing produce thereof.

(3) Where by any Appropriation Act passed atter

the commencement of this Act power is conferred on the

Treasury to borrow money up to a specified amount,
any sums which may at the time of the passing of that
Act have been borrowed or guaranteed by the Treasury
in pursuance of this section and are then outstanding




2

[15 & 16 GEO. 5.]

Gold Standard Act, 1925.

[CH. 29.]

Iftl be treated as having been raised in exercise of the A.D. 1925.

power conferred by the said Appropriation Act and the
ount which may be borrowed under that Act shall be
rc,duced accordingly.

3. This Act may be cited as the Gold Standard Short title.

Act, 1925.

Printed by EYRE and SPOTTISWOODE, LTD.,
FOR

WILLIAM RICHARD CODLING, Esq., C.V.O., C.B.E., the King's Printer of

Acts of Parliament.
To be purchased directly from H.M. STATIONERY OFFICE at the following addresses :
Adastral House, Kingsway, London, W.C. 2; 28, Abingdon Street, London, S.W. 1;
York Street, Manchester; 1, St. Andrew's Crescent, Cardiff :
or 120, George Street, Edinburgh;
or through any Bookseller.







[15 & 16 GEO. 5.]




Gold Standard Act, 1925.

[CH. 29.]

CHAPT
An Act to facilitate the

and for purposes conn

BE it enacted by the Kin
by and with the advi
Spiritual and Temporal, an
Parliament assembled, and
as follows :1.-(1) Unless and unti
tion otherwise directs(a) The Bank of Englan
in any Act, shall n
of the Bank (in thi

note ") in legal c
section six of the

and bank notes sha
by reason that the
bank notes in such

(b) Subsection (3) of

and Bank Notes A

the holder of a cu
to obtain payment

in gold coin) shall c

(c) Section eight of the
entitles any person
Mint to have it as
to him) shall, exc
brought to the Mi

cease to have effect
[Price ld. Net.]

[CH. 29.]

Gold Standard Act, 1925.

[15 & 16 GEO. 5.]

(2) So long as the preceding subsection remain.

A.D. 1925.

force, the Bank of England shall be bound to sell to any
person who makes a demand in that behalf at the he
offiue of the Bank during the office hours of the Ra

and pays the purchase price in any legal tender, gold
bullion at the price of three pounds, seventeen shillings
and tenpence halfpenny per ounce troy of gold of the
standard of fineness prescribed for gold coin by the
Coinage Act, 1870, but only in the form of bars containing approximately four hundred ounces troy of fine

gold.
Power for
Treasury to
borrow for
exchange
operations

2.-(1) Any money required for the purpose of
exchange operations in connection with the return to
a gold standard may be raised within two years after
the passing of this Act in such manner as the Treasury
think fit, and for that purpose they may create and
issue, either within or without the United Kingdom and
either in British or in any other currency, such securities
bearing such rate of interest and subject to such
conditions as to repayment, redemption or otherwise as

they think fit, and may guarantee in such manner and
on such terms and conditions as they think proper the
payment of interest and principal of any loan which may
be raised for such purpose as aforesaid :
Provided that any securities created or issued under

this section shall be redeemed within two years of the
date of their issue, and no guarantee shall be given under
this section so as to be in force after two years from the
date upon which it is given.
(2) The principal and interest of any money raised

under this Act, and any sums payable by the Treasury
in fulfilling any guarantee given under this Act, together

with any expenses incurred by the Treasury in connection with, or with a view to the exercise of, their
powers under this section shall be charged on the
Consolidated Fund of the United Kingdom or the

growing produce thereof.

(3) Where by any Appropriation Act passed after
the commencement of this Act power is conferred on the

Treasury to borrow money up to a specified amount,
any sums which may at the time of the passing of that
Act have been borrowed or guaranteed by the Treasury
in pursuance of this section and are then outstanding




2

[15 & 16 GEO. 5.]

Gold Standard Act, 1925.

[CH. 29.]

Al be treated as having been raised in exercise of the A.D. 1925.
power conferred by the said Appropriation Act and the
ount which may be borrowed under that Act shall be
deed accordingly.

3. This Act may be cited as the Gold Standard Short title.
Act, 1925.
Printed by EYRE and SrarnswooDE, LTD.,
FOR

WI1 LIAM1RICHARD CODLING, Esq., C.V.O., C.B.E., the King's Printer of

Acts of Parliament.

To be purchased directly from H.M. STATIONERY OFFICE at the following addressee:
Adastral House, Khigsway, London, W.C. 2; 28, Abingdon Street, London, S.W. 1;
York Street, Manchester ;
1, St. Andrew's Crescent, Cardiff:
or 120, George Street, Edinburgh;
or through any Bookseller.










Vault of england,
Per s.s."Berengaria".

Sonclon,

ACCsAtiiwtp::
JUN 13 1925

E.C. 2.

4th June, 1925.

is

My dear Strong,

I am sending you, under separate cover, copies
of the undermentioned papers for which you ash in your letter
of the 21st May 12 copies

Gold Standard Act

12 copies

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

18 copies

Official Report Parliamentary Debates 28th April

12 copies

Official Report Parliamentary Debates

4th May

11 copies

Official Report Parliamentary Debates

5th May

If you want any further copies of any of the
above, please do not hesitate to let me know.
Believe me,
Yours zinc erely,

Benjamin Strong, Esq.







CONFIDENTIAL




rti

2/147

Page 2.

Benjamin Strong, Esq.

will ready at any time, though I shall not really expect you
for ten days or a fortnight.

Then I shall expect you in

earnest.

I am too strange to-day to say anything

about conditions here but will write again next week if, after
I have settled down, there seems to be anything worth saying.

Meanwhile, will you please write to me about September plans.
With warmest retards,
Yours very sincerely,

th7r-Let.44

Benjamin Strong, Esq.




-

(copy of handwtitten letter)
Sljrorpe Lodge, Campden Hill, W.S., August 16, 1925
.

.s.

I am obliged to write & tell you a few things which otherwise you might never find
out. First of all you're a perfect old dear, though you may not know it & from
every standpoint its good that you and I should go about the world together (good
for me & good for Ce ntral Banking & much else) Then you are in fine health &
Further you have done
that ple aces me: I have never seen you looking so well.
a great deal of good =especially by going to Be rlin- which is something you
ought to realise with satisfaction & pleasure. And you have a pe rfect Kat to
go along with in a way which has, I am sure, added joy to your & my vacation.
I may be able to tell you more when we meet but I must now repeat that your 3 rooms
(as before ) are ready any day & awaiting you.
With great thanks
I am MN




cLusgt,aTHORPE LODGE,
CNMPDEN HILL. W.8.

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61plancl.
Son don,

E.C. 2

17th August,1925.
1:y dear Strong,

I am enclosing a rough translation of an
Article which appeared in the "Frankfurter Zeitung" on the
1st instant.

This has been sent to me by President Schacht

who says it was written by the Paper's Berlin Correspondent

"after having asked me a few questions, which I have answered
"to him.

I think it's worth while to have the article

"translated into English, because the gold question is one
"which few people in Germany understand and therefore it seems
"to me rather important that a paper of the standing of the
"Frankfurter Zeitung is backing my policy to a great extent."
I think we shall both agree with this
and I guess it will give more help to the TZeichsbank's
(

policy than a (political) speech at Cologne.
Believe me,

L

Yours ve

Benjamin Strong,Esq.,




Olvvet4/1.

sincerely,




0,10.

REPUBLIQUE FRANcTISE.

Tcations do service
.1r

POSIES ET TELEGI1APIIES.

TEL

STIC

STRONG HOTE.I)M

st

L1! PORT EST

0

Le facteer dolt .divrer on reeepisse a souche
loisqu'il est chargé de 150000 or 'e tare.
k

LONDON

01433. 30. 203

U_G_GCEASSWE

IT

T tin bre
a date.

MENTIONS DISSI:P.VIrE.

GERM'

717 S

SUITS VERY

'i\ELL

ANT)

I

WRILV:UKMYH POLE

MPETIASHLE

YOU ON ASURICALAVK FVEVI:JUSIP NEOZNRAMYN AFTEF
[IR .ANSWER WILL ANVOFGULRO
WHO CAN FIT IN EASILY
NOR
Referring to your telegram of August 19, it suits very well and I have:I.:written the

Pole to attend you on August 31 and Dutchman on September 3,
will_arrange_with German who can fit in easily.




After their_answer

gmh of angland,
2

ondOIT, E.C.

21st August, 1925.

My dear Strong,

As I told you in a telegram sent off last
evening,

I have invited M. Karpinski to come and see you here on

Monday, the 31st August, and his stay can be continued over the
Tuesday if necessary.

I have also invited Vissering to meet you

here on the Thursday and Friday of the same week (3rd and 4th
September).

Schacht,

I have no doubt, could come here anytime

without trouble, and we can arrange something with him by
telegram at the last minute.

I have not much of interest to tell you from
here.

You will have seen that a settlement has been made with

the Belgians in Washington, which I hope will allow them to carry
out the plans about which Hautain spoke to us in Brussels.

You

will also have seen that Caillaux is tc be in London on Monday
and Tuesday of next week, when I shall doubtless be meeting him:
I have no idea what the result of his visit will be, or what is
hoped for, but in Washington the Belgian terms probably forecast
the fate of the French - don't you think?

We shall perhaps be

able to judge better of the immediate future of Europe after the
delivery of the French Note to Germany which seems to be fixed
for Monday next.




An

Page 2.

Benjamin Strong, Esq.

21st August, 1925.

An optimistic feeling pervades the City of
London, perhaps because finance flourishes at the cost of
industry - the short as against the long view.

But the fact

remains that money continues abundant and rates are easier, so
that it will be difficult under these conditions to maintain our
present rate of 42%.

On this point I am anxious to know from

you the prospects of a rate change in New York a month or so
hence, as this prospect must have a very important effect on our
action in the near future.
With warmest regards,
Yours ve

Benjamin Strong, Esq.




sincerely,

Indications de service.

STRON'

HOTEL

P,4JESTJC

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TRANSLATION FROM T1

13-,RLIN PAPERS OF 8th J:2T-MBER, 1925.

Communique issued by Ministry of Finance of the Reich.

'In order to carry out the contemplated measures to

lower prices, the Government of the Reich recently decided to
administer the public funds of the Reich in such manner that not
only no danger of un increase in private rates for money should
occur, but that, on the contrary, the stimulus for their
lowerine should be Fiven.

Therefore, with the co-operation of

the Roichsbank, an agreement hes been reached between those

offices which loan public funds - i.e., between the Ministry of
Finance of the Reich, the 7'ostal Authorities, the German Railway

Company and the Insurance Office of the Reich - that when funds
are loaned to those banks which are entrusted with the further
distribution of public funds the interest rate may not exceed
at present

The interest rate for long term funds of the

Postal Administration has been reduced to 8:J.

entrusted with the further distribution of public funds have
undertaken to cause the benefit of this reduction of interest
rate to be passed on in full degree to their customers, and,

furthermore, to restrict their interest margin to the lowest
possible measure.
point.1



Afinite agreements have been made on this




COPY
CONFIDENTIAL.

Decode of cablegram from :DR.SCHACHT,

BERLIN,

Despatched

8 p.m.

time

Received ifr-(31:(71.-EA-:

8 a.7i.

( time )

Tues .15th Sept .192Z=

( date )

eds .16 th Sept .1925 ( date)

(7489) 7/24-3080

Referring to your telegram of to-day matter is very




complicated and not quite so as Government's announcement
seems to state.

Government funds are all under Ieichsbank

control: it is otherwise with Post Office and similar
funds not depending directly from Government.

In

accordance with me, Bruins writes to-day to Addis about

matter and I am endeavouring to clear matter until
General Board Lleeting 30th September.

SCHACHT.







(Copy of handwritten letter)
18.0ct 1925
4010141

Amir Thorpe Lodge, Cempdell Hill, V.
"IlikMy dear Ben.
Dont judge me haray; I am doing my best these days though there may not appear mur.:1-1
to show for it!
I hope Addis will have talked freely 7:ith you r.s I
ked him to do.
Put though he knows much & is helpful, he is not easily forthcoming.
c

The pressure, since you left, has been persistent, especially on me.
This is partly ,lue to things from without - CermEny, France, Greece, Belgium,
market position & so on: & partly to things within.

By the latter I mean not only inadecuate personnel (which we ere seriously trying t o
remedy) but also our private arrangements for next year.
And-rson threw a bombshell:
(just peter tddis left).
The trouble is not that he is not clever & courageous &
good fellow but that his wishes are conthry to our ideas & the whole of our traditio
& while we admit they may perhaps be suitable for a shipping business we are mot sure
they rre not suitable for a Ce ntral Bank. I will write of this when the future is
settled: of course you wont allude to it in addressing me at the Bank.
My Mother & I are studying the hotel question & will soon make a suggestion for your
Mothers stay in comfort next spring.
My little friend Twinkle was buried last week in the garden & I havent got over it.
There is no doubt in my mind - none whatever - that you were dead right about your
Rate policy: first in August & then again 3 weeks ago. All the rest were wrong' rr.
Stewart, the Board in Wnshington & the professors! But ite no use crying over
spilled milk & we shall soon fix something up & all will be well again.
I hope to come across with S.F.G. in Decr. & have to1:1 him Fo.
roes well with K & her man.




I hope too that all

Got' bless you.

MN

PC

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(Copy of handrwitten letter
Sunday: October 25 1925.

Thorpe Lodge,Cpmpden Hill, V.8.

y dear Ben.

I wrote to you like this a week ago. Icent do so easily at the Bank, & on othe r
matters, cables for the moment have replaced letters. I guess you have been through
a worrying time about rate policy & I cent quite grasp the ins & outs of it - nor t he
various views: perhaps Addis will be able to explain, but I'm not sure.
I too have
somewhat perplexed from day to day - though I know the fundamental trouble arises
from the Government & Bank position or opposition.

I am not yet able to tell you of our future arrangements but it seems pretty well
certain that I shall go on for another year as Governor, from next March: that is
likely to be the list. But it is still uncertain who will be Deputy fot this next
year & who will succeed me in 1927. There are several possibilities - as you must
know - & various pros & cons & the decision is not easy eescially wnen you remember
the troubles of the present & the traditions of the past.
My Mother has written to you about Hotels.
In a couple of weeks I 4tall be obliged to go away for 10 days to Harrogate or some
other bath-place because my arm has been troublesome.
Its not actually pain, but a
s ort of twitching which they say comes from the nerves. I had a touch of it a year
ago but less than now. I have really no choice but to go & this I want you to
understand - Do You? I am planning to visit you in December if you are willing




Meanwhile I am
Yr affy MN

4N-2.10RPE LODGE,
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COTIFT77TAL

LOth October

19:x.

Dear 1:r.Goven.er,
I

t,:iin2r. it well to

na you a

7,51/4.

decode of cable L:o.,15, which was despatched by the

Federal aeserve BanI: at the request of Sir Charles
Aaais on the 2/1th October.

Eelieve me,

dear 1,x. Goveror,

Yours most faithfully,

Eenjanin Strong, Esq.

(Copy of handwitten letter)
Si nday 1 Nov 1925

'

Thorpe Lodge, Cempden Hill, W.8.

My dear Ben
I write again this week-end to keep you posted.
The arrangements for April 1926-27
will be settled on Thursday the 12th when I expect to be ',selected" again as
Governor.
Anderson wishes to drop out. He has his own ideas as to our problems & their soluti
and he also hankers after his own business.

Trotter will be "selected" I expect as Deputy Governor - which you will remember was
his position 5 or 6 years ago.
The idea is that he shall become Governor in April 1927. for the old period of 2
years: but this no more than an idea & quite vague at present.
There is also an idea that after April 1927 I shall be asked to continue to devote
all my time to the Bank - as a s ort of adviser for Foreign affair. But this too
is quite vague & is not mentione d: nor would there be any formal position for me.
As to the business of today I hive nothing to add to my cables.
Addis tomorrow & may then have something to cable.

But I hope to see

I cm going to Harrogate - because you know I have not been very well - on Friday the
13th for 2 weeks. And I have hopes of sailing with the Gilbert:; for New York about
Dec. 16th if quite convenient to you.
Vith love MN







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(Copy of handwritten

letter)

8.Nov.1925. Sundry
Thorpe Lodge, Camden Hill, U.8.
My dear Ben.

Our 1926/7 arrangements will be settled next Thursday the 12th, I expect, Es my
lest letter tol' you. ThatE to say I shall be ,elected as Governor & Trotter as
repy. Gov. (It will be my seventh year & his third year, with a break of course)
It has all been difficult, partly of course because Anderson takes a different &
separate view of his own, which oes not seem to he shared by any of his colleEEues:
therefore I have not written to you on these subjects from the hank: (you understand?)

-or 1927/8 I think the plan is - vaguely- that Trotter shall become Governor: that as
far Es it has progressed except that there is a wish to keep me somehow as e
timer Et the Bank. I dont know if this= is possible as a workable plan even if
everyone approved it: I don't even know if Trotter would wish it - or if I should.
Ell thi of course is only between you & me.
I BM planning you know to sail with the Gilberts on the Leviathan - retth.
that
would be convenient to you. As to ^hristmes I E hould be able to get out of your
way & go to the Delanos or Mrs: Markoe of Llbany.
Meanwhile on ?Friday the 13th I am planning to go for 2. weeks to Hcrrogate (es I
must already h :ve tol:' you). Its a pl:ce where you drink smelly water & wash in
dirty water: but I hove had several little troubles of late to which I must pay
attention before they grow big. For instance my arm is full of pins & needles:
my tail is sore & in pieces I have a sort of ,light exema (how is it spelit ?) Now
you know all about poor me!

ts these days & weeks have passed the difficulties about our Rates h ve not got any
less? I am still a good deal perplexed & :.:hall be more than perplexed if the? oston
Rate shoulc:: rise to 40 on the 10th. I guess the Board in 7aehington have bee n
Living you c deal of trouble - for political reasons - on thi subject.

'

¶'ooner or l: ter we Till htve

to work out some kind of a gold scheme for the next
few years, as part of Central Brnking arrangements.

You will let us know about arrangements in London for your Mother? & you can
:"ecide anything.

Fver yours Effy
MN

I vas glad to hear from your cable that you understood the first Plodge 'letter I wrote.




7tAN

THORPE LODGE,
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PROSPECT HOTEL,

TELEPHONE

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H ARROGATE.

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----(-A.V1A.V

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Cam)

37-

ACKNOWLEDGED
NOV 2 7 1925

B. S.

iirlitnit

of Oin_olan

12th November, 1925.
My dear Mr.aovernor,

You will remember the Memorial which was erected
in the Bank Carden in memory of those members of the Bank who lost
The Memorial, as you may recall,

their lives in the Great 'Jar.

is in the form of a Statue of St.Christopher, the Patron Saint of
the Church, the graveyard of which occupied the site now covered
by the garden.

.,.he Memorial was the work of a British Sculptor,

Mr.R.R.aoulden and was unveiled on Armistice Day 1921.
Mr.aoulden has, at the Bank's suggestion, made
some bronze Statuettes, replicas of the Memorial, the number being
strictly limited to twelve in all, each of which has been
finished and signed by himself.

It will afford my colleagues and myself very much
pleasure if you will accept one of these Statuettes and, in the
hope that you will be willing to do so,

I have ventured already

to give instructions for it to be despatched to you.
I am addressing siLilar requests to Mr.J.P.Morgan
and the Chairman of the New York Clearing House Committee.
Believe me to be,
Dear Mr.Governor,
Yours

cerely,

oVVIA.-414/1
Benjamin Strong, Esq.




(?opy of harrlwritten letter)

18 Nov 1925
Prospect Hotel,Harroga.te

Pep/. :en.

You know from a letter as well ;.s cables that I am Lway from London: my Erm has
lately been so full of pins & needles that I had no choice but to go away somewhere
for treatment. The thing i., nothing in itself but just c ..iympton of "Fatigue" just Es it was dome 18 months ago.
I shall be in Lon Son gEi.1 on the 28th - wh!ch gives me two week:- here. I cvmeavai
lest week because the pr .,sure of the Fall .seemed ( as far E..s I coulc: judge) to have

pawed its height so far CIE we ire concerned - & to depend (for us) on your movements of rate &c.
You know I am (awaiting, word from you as to my promised vis it. lam provisionally
booked to sail along with the Gilbert. on rec. 16 per Leviathan - but if you will
be absent over nristmas & N. Year I can postpone my sailing for 2 or 4 weeks. No
doltt you have written be about this.




rear Ben, yr..., ever

MN

2' iiov 1925

(copy of handwritten letter)

Prospect Hotel,Aarrogate.
lit!
My dear 2en.

I wrote you from here L A week & only write again because I keep on thinking about
you ll the time. This is no plice for a white man who hr:_ nothing, to do - at least
at thi- time of year - but for all that it has done me good & I think the pins &
I shell be going back to London at the end of
needles have cleared out of my arm.
the week (on the 28th) & shall be at the Bank as usual next reek (the 30th).What I
Ps
do after that depends on what you write & cable me about your plans & wishes.
you lready know I am free to sail with the Gilberts) p Leviation on rec. 16t h.
but if the date does not -uit you I can 'cite easily postpone it, without any inconvenience. Of course I realise you may have made engagement: over mhriAmas & the
Ne w Year (perhaps Hibbing ?) which would leave us very little time togethsr ''ter
you got back to N.Y. & anyway I could not stay longer than a couple o' weeks. Pe rhaps
there is Elfeady some word from you at the Bank - I know they -r, trying to keep as
much (in the way of business) away from me as possible these drye.(knd they mean
well!)

see all the other Banks have now gone up from 3 1/2 t o 4% leaving you alone at the
lower rate & I am wondering what you zre going to do. perhaps be forced to do...
I

On the whole & in spite of.wrious changes of plan 1 chances I reckon (looking back)
that the Fall has been very successful. No one here believed we could carry a 41
Rate so long Lt this time o- year: few believed we were br ve enough to try it: but
this
nothing else could have teken the wind out of the sales or McKenna & Co. se_
has done or could do more to Silence criticism of the gold .tandard.
an Example of the
J.dd to this too the position in France. Sc long held up (to us)
advantages of not being tied to tit, tail of the F.R. System - or indeed to gold!
It makes me smile!!
I have much to tell you some time.




Fo long, Ben, Es eer
MN

3,

ags
TELEPHONE

TELEPHONE

PROSPECT HOTEL,

1035.

PROSPECT

1035.

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Catonomp die ComiDAATY

PROMPT SERVICE

e.1

(311TftrrOln INCOLTEMISIMILIBIIS
VIIEIfiHT COATMACMClitS

RELIABILITY

PRIECIGIIT Tramm.--mtubliziam
11-19 MOORE STREET

LOW EST RATES

TELEPHONES

BOWLING GREEN 054 I
0540

NErevAbwei

CABLE ADDRESS

"GROVVRO" NEW YORK
CODES USED

A 5 C 5T. EDITION
LIE BERG

BENTLEYS

IN REPLYING
REFER TO

9379

November 28th 1925.

**

AGENCIES
PHILADELPHIA, PA.

BALTIMORE. MD.

NEW ORLEANS, LA
SAN FRANCIS CO. CAL

NIAGARA FALLS. N Y
CLEVELAND. O.

CHICAGO. ILL.

Mr. Benjamin strong,

Federal Reserve Bank,

DETROIT. MICH.

BOSTON, MASS.

New

York.

BUFFALO, N.Y
NEW HAVEN, CONN.

Dear Sir:

WASHINGTON. D.C.

We have received advice of one case of

LONDON

LIVERPOOL

MANCHESTER

bronze statuette arriving on the 6A Minnewaska,

PARIS
HAVRE

have instructions

shipped by the B,E,Ink of rngland.

BORDEAUX
GENOA

to deliver this to you free of all charges, and

NAPLES
ROTTERDAM

are arranging accordingly,

0.4\e
o\

AMSTERDAM

Attached affidavit which kindly execute

ANTWERP

ZURICH
FLORENCE

A0---"

and return.

SEVILLE
HAMBURG

Yours very truly,

BERLIN
BREMEN

ROBOLD &

PJG/MM.

0

COPENHAGEN

STOCKHOLM
CHRISTIANIA




14-

yco elew,v(bLePlyi

Ur
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kit
V'Q'

cohLlmt.p
'71/1

` ^NS SU BLI E T TO IMMEDIATE ACCEr .rANCE

9- (iLa---J2

J C ROB OLD

P. J. GROWNEY

A P.SCH ROEDER

1. CIttonimi) & ()OmpAxy

PROMPT SERVICE

CITST0111I101L7OCE
Fltlatinir

RELIABILITY

EFFICIENL
O

144011.11IGINT

17011LWAJFILIII.C.11114

44

11-19

LOWEST RATES

CoNTRACTonfi
TELEPHONES

BOWLING GREEN 054 I
0540

MOORE STREET

1%agsw`irtmutic

CABLE ADDRESS

11GROWRO" NEW YONK
CODES USED

A B.0 ST. EDITION
LIE BE RS

BENTLEYS

IN R EPLY I NG

REFER TO

*9379

**

December 2nd l925

AGENCIES
PHILADELPHIA, PA.

BALTIMORE, MD.

NEW ORLEANS, LA
SAN FRANCISCO. CAL.
NIAGARA FALLS, N.Y.
CLEVE LAND, 0

Mr. Benjamin strong,
Federal Reserve Bank,
New York.

CHIC AGO. ILL.

DETROIT, MICH.

BOSTON, MASS
BUFFALO, N.Y.
NEW HAVEN, CONN.
WASHINGTON. D.C.
LONDON

LIVERPOOL

MANCHESTER
PARIS
HAVRE
BORDEAUX
GENOA

NAPLES

Dear Sir:

Referring to the shipment of bronze
statuette from the 4=1: of En land kindly
nevi regulations the
note that in accordance
attached affidavit must be filed, ther7fore
we would thank you to execute same. and return
The steamer has now arrived and entry
to us.
has been made, and we will do everything possible
to have delivery made inm-,ediately, sending you
delivery order promptly when relecised.

ROTTERDAM

Yours very truly,

AMSTERDAM
ANTWERP

PJVMM.

ZURICH
FLORENCE

SEVILLE
HAMBURG

BERLIN
BREM EN
COPENHAGEN

STOCKHOLM
CHRISTIANIA

SPECIAL ATTENTION GIVEN TO FRUIT-SEED & CHEMICAL TRADE.




ALL QUOTATIONS SUBJECT TO IMMEDIATE ACCEPTANCE

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