Memorandum of Conversation, by the Assistant Secretary of State (Berle)

I lunched with Mr. Richard Law,53 at his invitation. In a couple of hours, we ranged over a considerable field.

Mr. Law inquired about monetary stabilization. He said he had been lunching with the Guaranty Trust Company people and was very much impressed at their view. I said that, fundamentally, the New York banks really wanted to go back to the days when Ben Strong54 and Montagu Norman55 settled things secretly in the Federal Reserve Bank of New York. Mr. Law said he thought that day was over. I said I thought so, too. I said that the task of monetary stabilization was difficult, not because of any insoluble difficulty between governments, but because we had to feel for the kind of arrangement which our public opinion would accept. Mr. Law asked whether they would accept anything. I said I thought they would, though it required some handling. I understood the Treasury planned to accelerate their conferences next week and that shortly after that we should be headed for more intensive conversations to resolve, if possible, any differences between the British and ourselves. I observed that the positions of Britain and the United States had substantially reversed; in earlier times, they were arguing for a tight, hard money policy, when we were arguing for expansion; now it seems to be the other way around.

A. A. B[erle], Jr.
  1. British Parliamentary Under Secretary of State for Foreign Affairs.
  2. Benjamin Strong, Governor of the Federal Reserve Bank of New York from 1914 until his death in 1928.
  3. Montagu Norman, Governor of the Bank of England since 1920.