862.51/2873
Mr. W. Randolph
Burgess, Assistant Federal Reserve Agent of the
Federal Reserve Bank of New York, to the Acting
Secretary of State
[New
York,] March 31, 1930.
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,
[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.
