Mr. W. Randolph Burgess, Assistant Federal Reserve Agent of the Federal Reserve Bank of New York, to the Acting Secretary of State

Dear Mr. Secretary: Confirming my telephone conversation I am enclosing a copy of a cable we have just received from Governor Harrison dated March 29, together with a copy of our cable to him dated March 28.

[Page 104]

In view of your suggestion that the date of Governor Harrison’s return, which we expect to be about April 6, may be too late for his further views on this question to be of value, we are to-day cabling him suggesting that he send any further amplification he wishes by cable.

Very truly yours,

W. Randolph Burgess
[Enclosure 1—Telegram]

The Federal Reserve Bank of New York to the Governor of the Bank (Harrison)

No. 15. J. P. Cotton would like your opinion concerning amount of American participation which would be desirable in any early reparation bond issue either as to absolute amount or proportion of total. He is desirous of getting your views before your return. For your guidance our opinion follows:

“There are evidently two questions involved first, the amount of such bonds our market will take, and second, the question of public and political reaction. As to the first we believe our market could now absorb not more than $100,000,000 if the issue is made attractive. The second point has been accentuated by recent speeches of Louis T. McFadden22 and there is undoubtedly considerable suspicion and opposition by reason of which it would appear desirable that our participation should be not over one-third of the total and should be well within the absorptive power of our market. On the other hand it would seem that for us to take too small a participation would cause unfavorable European reaction.”

[Enclosure 2—Telegram]

The Governor of the Federal Reserve Bank of New York (Harrison) to the Bank

No. 14. For Crane. Your No. 15. My views definitely expressed to Emile Moreau,23 Gates W. McGarrah,24 S. Parker Gilbert, N. Dean Jay25 and others in light of all aspects of situation are briefly that American participation should not exceed ⅓ of total, should not exceed $100,000,000 in any event and if possible should be no greater than French participation. In general Gates W. McGarrah and N. Dean Jay agree with this formula as does even Emile Moreau in principle though latter feels it not possible for French to take more than $80,000,000. Anxious to amplify these views on my return.

  1. Representative Louis T. McFadden, of Pennsylvania, Chairman of the House Banking and Currency Committee.
  2. French banker and statesman, later Governor of the Bank of France.
  3. President of the Bank for International Settlements.
  4. Partner of Morgan & Cie, Paris.