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Clelug,7

Translation of Incoming

FEDERAL RESERVE BANK
OF NEW YORK

CABLEGRAM
From

Nn 1'

(-2124

TRANSLATION OF CABLEGRAM

DATED

PARIS FRTGE

REM DEC. 15, 1920

Federal Reserve Bank,
New York City.

#11

(Testword O.K.)

Your 7

received will be delayed here until

Saturday and go direct to London to visit Norman before he leaves
end of December.

Shall visit Holland from there after Zeilinga

arrives unless delaying my date of sailinp; until January 5th will
cause inconvenience at office.
and information from bArik here.

Am awaiting some definite proposal

Referring Java proposalbelieVe

reciprocal guarantee of bills essential to successful plan particularly for our own protection as acceptorsin Tava are usually merchants
and not bankers
credits.

making I t di ffi

lt for ns to

incipe n f fro otir egg of

Reply promptly here.) Leaving noon on Saturday.

Strong

Translation of Incoming

FEDE3AL REsE 'VE BANK

of NEW

CABLEGRAM

RK

From

No. c

Date

,

2 (7

TRANSLATION OF CABLEGRAM
Paris
Received Dec. 46, 1970

Federal Reserva Bank
New York
1?

(Testword OK)

packages

Hereafter send mail for Ben and Kendall separate

Care Grenfell
Strong
."*"...6"....11111.1111.111.1.11111111%,

is

r'llir

nIMIP.
0m E3Z
°r

.

POST OFFICE TELEGRAPHS.
FOR INWARD FOREIGN AND COLONIAL TELEGRAMS.
Uthee of Origin.

=

PARIS 5009E 55

Service Instructions.

Recd at

FIIIP111111111111111

30

16t110

No.of
Telegram.

-

()dice Stamp.

Sent or

Sent out at

From.

To
By

T0
=

BEIYJAMIN STRONG MORGAN GRENFELL OLD BROAD

STREET

IfriI

ppLONDON

ARRIVED PARIS !1EFNESrAY MAIL RECEIVED SUGGEST YOU CABLE
PHIL TO JOIN US HERE AND MAKE FRONT TRIP COMING DIRECT T(
MORGAN
FRANCE STOP IF YOU AGREL_ HAVE HIM COME RIGHT TO
10 CABLE ME DATE OF ARRIVAL ViE COULD POSTPONE,.
ARJES AND
STRONK Negrau,
=
LEAVING PARIS IF NECESSARY

FEDERAL. RESERVE BANK
OF NEW YORK

Translation of Incoming
Date

7CA13j.,EGRAM
t.1040610eisauncr.

No. C-

SG
Received Docamber 20th 1920.
London

26 words

Case care Federal Reserve Bank,
New York, N. Y.

Shall visit Amsterdam about twenty ninth meantime with Norman
please wire my con7xatulations and hearty good wishes to Bride and Groom.

Strong.

Translation of Incoming

FEDERAL RESERVE BANK
OF NEW YORK

CABLEGRAM

A

Date

No. C

r

TRANSLATION OF CABLEGMAY

Received December 21, 1920.
London, England.

Federal Reserve Bank,
New York, N. Y.

Confidential for Case number 14 (Testword OK) My number 13 not coded.
Referring to your number 9 and qovernors cables of today recommends
doing transactions as you propose account Bank of England.
visitin

lifter

imsterdam last of December shall sail Adriatic January 7th or 5th

Strong.

Bank of England.

underlined words mutilated:

ITAC we read ITLAS January 5th or 7th

22rr1 Deo3;abar,

20.

Tha 1,.orlaral iieslrva IAA. of New Yorl...
".aw Yor': .

virito to acknowledge tha racoi t yest,Irds..y of
your cabla raading as follows Por your information following cable renaived Cro!A.
rt antioi.tlt
"Rai-Aral 11 Cori L4. SU zln
availabla
"?-2.-......7.-nant about 15 ,ftillion dollars b.lfora 2 5t1
act fortillisit s no ti.0 <1
" for invest:malt for two nonths
arranc.xa.:nt for holding ona mil lion
fl 'Would you considar
ti ton lalvsit yrritout, int, ',mist
balanca in sliort tine
'loans undar yclur guarantao iritarast b.)ine; carrial to our account.
plar-sa &Iv:41a Cc-1
'Also what intarast
ations impose:I by
On account
Our reply follows
' rax is
on
for foraian f?...Grunt arran[yments for
11invastment our oporatic,ns your cabla 17th Decenbar would hay.) to
fund su,vested
qlracai:ra
a_. royal bot7-. . our Fic,nr0 rf
oonsidaration
"'Directors and -,'.'arlaral Reslr-e board at .:asiiinatoo, intr-lving
"'some d ,lay. No sun difficultios prise BUY'S,
" (autilat '.on) asguraA i f aithar of our a,ctiv,3 a silts and
:ranoz1 or Panb. of :n: ;land should reuast
"cors'aspondantr,
"'us to do the business, for thatr account,. We c.-_)uld raCalva
"Illposit and ',1aPe su ,:asted invastilont for Lho.l. in r1,-r.lar
"'co:II-so without special con.sidaratioi If 1-wsinass .rd -Ira
l'proposarl in this way a would suggest inV:3steiant in ,'.3.1ra.sur:
.1)fts5.s with
"tC3rtificatas of Indeltadness due 15th P.iarch on
"Ia7rea!aant on our part, to r !purchase on 15 day:, nctice and/or
" invastraant, in rz-__en rankers bills under similar repurchase
4.

i.'or your infonlation GOV3I'llOr
and j7uarantaa at,
of F.:n.7_1E1 'd until 23th Dans-111,:ar. Cas)I.11
"IGtron:.; now visit,in
roply in t,h follovrinLr, terms a,11 to confiria
No.L3 not coded.
"No.14 Lily. Confidantial. for Cr,.s.).
"k starring t,o 7our No.9 and Govarnor's cabla o to-day rancy.a.laIrl.
"doing t.ransaction as you pro.. oso fo-.±- account 'bait. of '-',114;1and.
Anstarri.a.1 lirtst, of D.1c.-1 lmr Shall sail 'Adriatic'
Aftor
1Jamlar.r 5th. Strong."

Translation of Incoming

FEDERAL RESERVE BANK
OF NEW YORK

CABLEGRAM

Date

237z-f--

From

No. C

1V
SG
Dated London,
Received December 23, 1920.

eserve Bank,
w York, N. Y.

(Testword OK) Love and Merry Christmas to all at bank
legraph same to the board and governors.

Strong.

DEC

2

Iti41,,

Cl

BANK OF ENGLAND, LONDON, E.G.

23rd Dacz...._ber,

Federal Reserve Bank

of

New York,

Nevi York

pie e
c

41-1

ig 20.

v

1920

JAN

p. j.

.y,1.

I write to confirm my telegram despatched last

night reading as

follov,z -

For Chairman and Governor.
The Bank of
"England perplexed by outlook over next few months.
They
"consider general rate policy has so far been wonderfully
"successful although the position here flight be better to-day
'had they bean more drastic 6 months earlier.
The fact
''remains that world deflation has been started and while this
"bound to continue they as we wish it to operate slowly
"rather than quickly.
They do not believe such deflation
"can now be stopped but think possibly its rate of progress
"might with advantage be slowed
If you sharo these views
"I would be glad to learn your intentions as ,to rate policy
"for discussion here. Your letters Sac.17th Nov.26th
"indicate no intention to change present policy but rather
"possible increase of rates later.
Are you still of this
"view?
Strong''.
"No .15 Incur.

-

1

061R.ccti

ymmossomildiltmWt...,

Td

1,.30.3ral ri3sar v%) bani: of *ow Yor;

I write to oonfir

tolatim desDatchad

For (*.,lairJan ft Govarnor. Th..) Bari T of
xerl bj outlook ovir next raw il.priths
1. rata policy has en far be.a:,t v,:citlart.131:7
...t;)) the :::;43 sition EST 9 '11:1,ght "1.1 be" 'tier to-4v

7...O drastio

earliar.

Tif) fact

rld ,t; )flat 'on has L. on started alet wle_31) t
t 11,3:" an wa w loll it to ol,:zate

Tle.y do not holieva suol darlrtion

ved but think .;.-ioarribly 1.to rate of -or ocresc
tztaip be slovrad
:r_f
u shay.) thoioviaws
d. to tarn your lAt.antions as to rate iv:fairly
are. Your int ',aro ;42: 2r7V1 7 ;0'4..3..1,
nt 'on to ornitq rxr,-)431nt pol!ciy but rather

er,oa of rat ,s lalr.

Are yon still of this

to is the pencil draft of a cable prepared by
ng, Out never sent (this took its place) because
man hau a rather different point of view than
d in Governor Strong's Craft.
The araft,
aluable as indicative of the state of Governor
at the time.

shoule be carefully preserves.
t.3.

-

dune 22,1J2b

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*it. NOT SENT, as Strong said
COPY OF CABLE PREPARED BY GOVERNOR STRONG
"because Governor Norman had a r w,er different point of view"
than that indicated in strong's draft below. Strong
app_aded a note saying this was valuable and indicative of
Felra -1 Reserve
these pa ers
his state of mind at the time, an hen
C
New York
should be preserved.
92,7No. 15--No. 15--For Chairman and Governor. Please consider following

and reply promptly care Bank [of England].

Firkt Paragraphs of Jay's letters regarding credit control
and rate policy indicate intention to maintain rates
next year.

Our rate policy was designed to check expansion but not

Second.

to precipitate too rapid price reductions.

We must now consider possible dangers from too great momentum
of present movement if not checked.

I regard following as chief dangers:

Folgtht,
('

Impairment

.1: capital margins between inventory values

and borrowed money with resulting unnecessary failures
in Europe and possibly at home.
(b)

If our goods markets get much below Europe's, difficulties
of paying debte to America will be greatly increased 2
exchange rates on New York will surfer further advance with
corresponding currency difficulties on Continent.

(c)

We may face considerable unemployment at home and even
more serious abroad.

(d)

Fifth.

We risk extreme legislative interference with our program.

Our friends here feel some concern lest these developments may
materialize.

Sixth.

They and I believe a moderate rate reduction here for a limited
period might relieve anxiety without much risk to present
healthy process of orderly debt liquidation.

Rate reduction here might cause shifting of loans from New

venth.

York unless our rates also reduced.

Also if later increases found desirable, respective Treasuries

LIILAI.

might be reluctant to increase their rates.
Ninth.

If situation at home justifies revision of our views, a whole-

some sentiment might result from iaentical rate action.
Tenth.

Without better knowledge of conditions at home, I cannot make

definite recommendations but urge consideration of above and early
reply.
Z140111111.

Bear in mind that present depression is worldwide and seems to

show no sign of check.

STRONG

('
44, DECODE OF TELEGRAM RECEIVED FROM FEDERAL RESERVE BANK OF NEW YORK ,,c(-1
25th DECEMBER, 1920

11. RHYAE.

f 1)1d

This answers message 15 regarding outlook.

First:as to commodity deflatioOur index of 12 basic commodities namal

cotton, aides, hogs,

rubber, copper, sugar, wheat, corn, iron, lead, lumber, and

petrol u.d shows following decline from peak expressed in per cent.
may

1

June

2

July

3

August

4

September

6

October

14

:lovember

13

First three weeks of December

4

First 6 commodities near or below pro-war prices.

Tho towing

up in December indicates deflation of group raw materials fairly well
accomplished but not yet apparently reflected in wholesale prices of
manufactured goods and still less in retail prices.
in commodities is greatly reduced.

S,eculation

Apparently we are reaching end

of first phase of deflation in which babiu commodities fall acutely
and entering into a second slower phase in which un- employment

increases and wage reduction becomes effective thus permitting lower
prices for consuranrs' goods.

generally instituted 2a

New :]nEland textiles Mills have

wages reductions which are being accepted

with but few strikes by employees.

Movement, graduall: spreading

to other industries but as yet only very small percentage of wage
earners affected.

From observations British indices we conclude

our acute raw materials deflation is somewhat ahead of England.
Second:as to credit deflation
While American price indices have fallen 25% to 35% since
May the volume commercial Bank Loans has decreased about 5% and
currency

Alk

currency none.

Various elements have kept credit volume high.

Anticipate some January liquidation due to drawing on us business
and post holiday reduction of currency.

In 13 :aoliths volume of

call loans declined 1/3 and prices of 30 industrials 43%.

But

in spite of high ratescredit has always been kept elastic.
Third :as to Rate policy

Our present view is that we should not consider reducing rates at
least until Market rates have fallen below ours and appear likely
to reinain lower.

Under present inflated conditions should we now

reduce our rata and later be obliged by more active business or
speculation to raise it again the affect would be more discouraging
than if we maintained present rates but kept credit elastic.

Only

motives for reducing rates in January would seem to be to deflect
natural course of prices or encourage resumption business.

This

seems somewhat akin to various schemes proposed in Gongress to raise
agricultural prices or stimulate exports.

Purchasing power in

agricultural sections is badly damaged but that of wage earners is
but little affected yet.

People will probably begin buying again

when retail prices are substantially reduced.

Statistical history

of post-war readjustments showsr bounds after acute declines and
though there are no precedents for present world -wide inflation

already many lines of merchandise stocks here are low and inquiries
are slightly improving.

It may possibly be that at some point a

decrease in our rates if entirely jusified by credit conditfons
would be just the thing needed to complete the resumption normal
purchasing and production but at present we think it would be
unjustified premature and ineffective.
only to conditions here.

Case.

Jay.

Foregoing refers of course

(20.

2c t7 "? Dece:iber,

Mr.Pierre jay,

Federal Rese2.-ve Bank of :-ew York,
New York.

Pear 7.rLr.JaY,

Your various letters arci enclosures have I
believe all reached 1:10, and I o..rnot toll you how helpful they
P;r)c)1 pic,:are of i.,he situation at hone
have been in riving
ana in the Bank. You will not ex,-iect an answer in detail to all
the ratters discussed as I shT.,..11 be hone within a week of your

having this letter.
I n.:1-Triting you especially to thank you for

the little book you sent no rich I agree is very rcadable and
whiCh I have just finished; also I want to thank you and Case for
your Christ:-Els 7lessage.

othing could be bettor than your plan for the
sir I .er.

You will find a 7alln web:wile awaiting you here a7id else-

where and I hope nothing interferes with the success of the
prograne,
AoceTt my regrets for having d.ravin such a

huge eitertainnent draft upon you in bo:lalf of :1:,Zeilinga: it
was to pay a real debt, however, and I an glad that you paid it
in rw behalf.
I have read the copy of the Act n.eampanying
yours of Dec.13th arending the Federal Reserve Act. What it
oontains

contains is not 3s startling to ne as the source fron which it
e-ianates, and I only wish that its sronsors 7'91(1-It 1-.ave been a hit
ell

or -.-orescr-ctative of the constructive views in the louse of Senate.

The following general cements occur to me:

(1) The texas is too short - 7 years perilts of a ec7-iplete
cl-.ange of oolitical conplexion if such a thing could
exist in the Bo-'!.rd vrit'hin the tern of one President and is obleotiona7)1e,

(2) If both the Secretary of the Treasury and the Controller of
the Currency are to be drooped from the loard, I fear that
contact between t,,e, Treasury Depart-lent c.nd

Iteserve

System will be ton corraetely brohen and niht in future
years reFr:lt in a r.eaction to the other extrecae. It would
be batter to have an Ass ant Secretor:- set in the
meet:321ml in an ex offictio capacity anl I still believe that
rxy pion

of havino. the Governor of the 'Reserve Flanks serve

in rotation for terns of one month each i^ 7reforable to
enlarging' the number of permnent members of the Board.
(3) The a"..nunt pro7-o 8 ed for bit-1132;11g, 141.11.3.0 sonewhat blurred in

the carbon copy sent rie, I read as ,'2,000,17100 which strikes

ne as too snall.
(4) It appears to ne, although possibly not with foundation,
that some of the lutios of the Controller of the Currency
specified by statute are not dealt with in this Bill. I
such as :Intini7" as Treasurer
dirty recall oertain
of the 'Tational Red Cross, which are conferred upon him not
by appointment by the t-refliClOrt, but by Act of Congress which
are

I

conducted and exercised by the aoserve IIa, i a, then no
doubt the new 'aohirto v7:.11 rort: smoothly as between the
1--tesexvo Dnarcl and ourselves.

(7) I do not understr.-ind the object of repealinrr that part of
Section 2.7 which leaves the cost of exartimtions upon
the Bank examined. Does it mean that the aeserve Sywteri
shall bear all examining costs? If so, I should think
we would lcse
iml.ortant hold over -Alezaber 3a-1 s and at
the 5rirle; tine the :.!staber Banks would lose the benefit of

a certain restinint

the Controller has heretofore

felt 1n the amount of money which he 3-pent in ;.-kak.in.g
exa

t ions

poirticularly
more data as to existing statutes the above oo:i ants are doubtless inocriplete, text, I seed t'ileri for %/hat the;; are worth.
With best re:;ards to all at t'-te Dank,
Slncerely yours,
`.,:ithout more infornatio:k

29th Dor:amber

a

':0.

Thl ;3dara.1 1,13sn'va 11-.211- of ''Tow Yorl

Yor,..

hava your

this

instaalt

as fo3.1ows 411 J7T1.

This answarn :13s-s.3 3 rajardinc, out loo . iiTt
of 32 basio coriloclit:tas
"as to com.rylity daflati.()n. (.11a,
st.kc:ar whaat, oorn iron
rubb,Yr oo
"nmasly cotton *,.(3S
"lead luaber r,oet pltrolatha sl-ovrs fo-1-3owLu daolim
1ay
Tune 2 t %ay 3 AuLirt
"ay-.7-rassad in par oant.
"0 Octol).-Ir 14 7.1ova.r 1 First, throe waaks of Deowinar

,s lieu' or Inlow prior 2.irj.vas. Tha s3owin47 u
"Daoa:nbar irriloatas dlflatl.on of ,..roz.-41)A-Ta2. tarif,zis fairly wa1 3
"

:I.

"anoo..vlishal but it ;rat a ,,rooiably raflaotad in wholasal.)
a,x, still 1-.)ss in ratan prioas.
"1--icas of lanufaoturld
Ap_arantizi."
cu1tin Ii cor.,...ioditias is otaatly
in whioh 1asi0
"ara ro±i ani o-r first Ithasa of
phasa
"oora.;oditias fall aoutaly ayri antarini: into a saoore
"in which Linerk)loy;:nAt, inoraasi38 anO. Virk)",3

1)4300::08

t,hul parnit Una lowar "Tinos for none 107' S 0,) 0 CIS
as 1' Ti le hava senora 1:- inst., iti It;y1 22
"m F,
'oy
"r A.uotL'.,ns whio ar bailie aor;antail with -Jut fay;
L,Taduallu s-,roadiyk-1, to othar ireustrios
3..rnars affootod.
"but as y.)t, only vat':,- sAall par,.,ani,k2a
"Proll obr.;arvat,i.ons irlt.ith irwliom w. oonchlda our aout,a ri
"matarials daflation is somewhat ahtlad of M.-L.:1an1. 33oond as to
Vihilo 41.,aorloan .r1O) liUcas hraa fU 13n
on "ora'Ut,
ta:i t 13 voluiao oo,laarcial Ban3-; loans has
"2:-7,./., to 35:, sinca
ourranoy nom. Various ala.aants hay°
"docroasad about
on
so;.1.1 t Tanuar,y lioui(1
orldi t vo au. n ).iigh. Afltic
or
r
US busimso alld post
"duo to arawl.A.,r; o ;
"ourroncv -

1

1'

nnths vo lu,aa of cal l loans (10°31113d o /10-t drd

But in s_ ita of high rotas
"and pri..0.3s of 30 Lrlustrials
iir 0. as to rat 0 polioy .
al:t, 3 3 actin
oradit has always loan
viav; is that wo shoi.ld not, oons.Vlar ra(liloing ratoc
"our -La-;
ours ate aor
"at least u t 1 ri:at ratar, trio fa31a31
ooriditions
1.1ritor ivasant
131,11,,y to rai.,..t.mn lowar.
"ohnuld vir) now raduoe our rata at latar ba obli,:i:ad by riora aot.t_va
"businass or s-:),3oule.tion to rais..) it a..aLl tin offooL wu3d ha
i2inacl 2,-2..)sant ratos but It aL:t
"..3ora di0OouraLiY1S than if Vie
tTaaluarz.iaotivas for roduat n7.tas
"oradit alastic
"would sa:m to in t (1.af1ant natura3 00111'SO 0 r: primes or 321001.17:W
a: in to various
"rasurrot .7 on busirtass. This saa.ts
n ConL,Tess to raiso a;rioultural yr:.oas or
"soharies -)roposed.
asing powar in a rinUl tAirai S3 Ot 1_01111
"stimulats3 aXpOrt,,S .
"is bad1 y. cla,..180.0 bu t. that of warfa lam rc is but littla affootarl.
7'301)11 will -,zobabiy bazin buzil.n;:3 again whon ratail
?Iv:A ,
"1-rioas ara substantially raeluoad. Statistical irl_story of
nix= r Thowylo aft t-T aouto clooli.nc at
"pct,-war raadjust.
thara arc no rrocadants for prasont wcIrld-w.'_do inflation
.

et_

nalraady maw linos of aaarcluldiaa ntoas bra ara to all.
triroving. It ;ay roasiblu b that at
"anquirias axa
ro:aa mint a elacroaso in ova' paths if ontiraly justificel
ramtaption th
lorldIt conditions wn.ad 'b Just th tIth noa1.50 to oolaplata noroa
1(1

"t hink it ta,,
"ForeaDirvz, r.;.f
a 1 tr.v) t,r non.1.11r
o .2.: IREONY.
1..

;;ivas

1

"and I -oat, yath

"upon tsql wor
"Oonaultlik, Viosa
'can 1>a acco,.iplia
St
139,nuary St .
-

Translation of Incoming

I'FEDERAL RESERVE BANK
OF NEW YORK

CABLEGRAM

Date

From

t

0.(ke, A,44,41

No. C---(-b-°-.

TRANSIATION OF CABLPGRAM

DATED London England
REC'D nee. 28, 1920

Federal Reserve Bank
New York City.
Number 17 (Testwcrd OK)

La. Chairman and Governor - your able

reply my nutber 15 gives precisely information desired for Which

Norman and I most grateful.

Consideration of effect of our policies

upon the world generally can be nostnoned till, my return. After
consulting Vissering have decided not to visit Amsterdam.

More

can be accomplished by remaining here until Adriatic sails JanOth.
Strong

Underlined words mutilated:
GIOFA we read GIMFA "for"
OGBEJ we read OGBP2 "postponed till"

EOM we read '.1.1 "decided not to"

-

Bank of England

BANK OF ENGLAND. LONDON. E.C. 2
-

r

29th rieez..ar,

/9 M.

The Federal Reserve Bank of New York,
New York.

I have your telegram of the 24th instant reading
as follows This answers mesrlk]p 15 regarding outlook.
First
Our index of 12 basic commodities
"as to commoditT deflation.
"namely cot on ?rldeS-bogs rubber copper sugar wheat corn iron
"lead lumber and petroleum shows following decline froa peak
May 1 June 2 July 3 August 4 September
"expressed in per cant.
"6 October 14 November 13 First three weeks of December 4. First
The slowing up in
"5 comilodities near or below pre-war prApas.
"December indicates deflation of groupYttmaterials fairly well
"accomplished but not yet ap,-reciably reflected in wholesale
"prices of manufactured goods and still lass in retail prices.
Apparently we
"Speculation in commodities is greatly reduced.
"are reaching and of first phase of deflation in which basic
"commodities fall acutely and entering into a second slower phase
"in which unemployment increases and wage reduction becomes
?effective thus permitting lower prices for consumers' goods.
"New England textiles Mills have generally instituted
wages
"reductions whici-. are being acoepted with but few strikes by
'Tovement gradually spreading to other industries
"employees.
"but as yet only very small percentage of wage earners affected.
"From observations British indices we conclude our acute raw
Second as to
"materials deflation is somewhat ahead of England.
While American price indices have fallen
"credit deflatjon.
"11 RHYTTE.

"25,g. 1-6-3-5% suite May the volume coy iaercial Bank loans has

Various elements have
"decreased about 5% and currency none.
Anticieate some January liquidation
"kept credit volume high.
"due to drawing on us business and post holiday induction of
I r 13 months volume of call loans declined one-third
"currency.
But in spite of high rates
"and prices of 30 industrials 43.
Third as to Rata policy.
credit has always been kept elastic.
"Our present view is that we should not consider reducing rates
"at least untll Market rates have fallen below ours and appear
Under present inflated conditions
"likely to remain lower.
"should we now reduce our rata and later be obliged by more active
nr speculation to raise it again the effect would be
"mon; discouraging than if we maintained present rates but kept
Only motives for reducing rates in January
"credit elastic.
"would seem to be to deflect natural course of prices or encourao
This seems somewhat akin to various
"resumption business.
"schemes proposed in Congress to raise agricultural prices or
Purchasing power in agrlcult,ural sections
"stimulate exports.
"is badly damaged but that of wage earners is but little affected
People will probably begin buying again when retail
"yet.
"prices are substantially reduced.
Statistical history of
"post-war readjustments show rebounds after acute declines and
"though there are no precedents for present world-wide inflation
"alrealtr

already many lines of merchandise stocks hero are low and
"(Inquiries are slightly improving.
It may possibly ba that at
"some point .a decrease in our rates if entirely justified by
credit conditions would be just the thing needed to complete the
"resumption normal purchasing and production but at present we
"think it would ba unjustified premature and ineffective.
"Foregoing refers of course only to conditions here.
Casa.
Jay.
tt

It

and have to confirm ix.y teleEram to you of the 28th instant as follows
"No.17.IREONY. For Chairman and Governor.
Your able reply my
"number 15 gives precisely information desired for which Norman
Consideration of effect of our policy
"and I most grateful.
"upon the world generally can be postponed until my return.
After
"consulting Vissering have decided not to visit Amsterdam.
More
"can be accomplished by regaining hare until"Adriatic" sails
Strong.'
?January 5th.

7'aE

I

omi11411

r

From

p71.-r.D

L. RESERVE BANK
F NEW Y R K

O,

No. C

ti

CABLE,GRAI.!

Southaripton

Received January 5th, 1921
Federal Reserve Bank,
New York City
SAILING

TODAY

Strong

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