Benjamin Strong Jr. to Elihu Root
Title
Benjamin Strong Jr. to Elihu Root
Creator
Strong, Benjamin, 1872-1928
Identifier
WWP18431
Date
1913 December 16
Description
Benjamin Strong Jr. writes Senator Elihu Root about cash reserves during the panic of 1907.
Source
Benjamin Strong Jr. Papers, New York Federal Reserve Bank
Language
English
Text
My dear Senator:
In addition to the enclosed statement, which was dictated before I discovered among my papers the figures now to be considered, can be added the followed:
August 17, 1907, the cash in the Clearing House banks in New York City was $274,000,000. By November 30 this cash had been reduced to $217,000,000.,- this including the worst period of the panic. The greatest reduction occurred in the week at the height of the panic, from October 26 to November 7, when the cash reserve of the New York banks was reduced $30,000,000. The total reduction from August 17 to November 30 was $57,000,000. This represents the net reduction in cash, after figuring in all receipts by the New York banks during that period from every source, including gold from Europe. On such a showing, who can honorably say that New York banks were hoarding money during this period?
Five years later, in 1912, during which the business of the country had increased tremendously, the reduction in cash of the New York banks, from August 15 to December 30, was only $60,000,000., that is, from $379,000,000. to $319,000,000.; that is, such reduction of cash is a natural seasonal movement that occurs in the fall of every year. The banks of New York City lived up to their every responsibility in 1907, and went far beyond what could reasonably be expected of them, as they not only paid tremendous premiums for bringing gold into the United States for the purpose of supplying it to the country, but paid out $25,000,000. in actual cash from
In addition to the enclosed statement, which was dictated before I discovered among my papers the figures now to be considered, can be added the followed:
August 17, 1907, the cash in the Clearing House banks in New York City was $274,000,000. By November 30 this cash had been reduced to $217,000,000.,- this including the worst period of the panic. The greatest reduction occurred in the week at the height of the panic, from October 26 to November 7, when the cash reserve of the New York banks was reduced $30,000,000. The total reduction from August 17 to November 30 was $57,000,000. This represents the net reduction in cash, after figuring in all receipts by the New York banks during that period from every source, including gold from Europe. On such a showing, who can honorably say that New York banks were hoarding money during this period?
Five years later, in 1912, during which the business of the country had increased tremendously, the reduction in cash of the New York banks, from August 15 to December 30, was only $60,000,000., that is, from $379,000,000. to $319,000,000.; that is, such reduction of cash is a natural seasonal movement that occurs in the fall of every year. The banks of New York City lived up to their every responsibility in 1907, and went far beyond what could reasonably be expected of them, as they not only paid tremendous premiums for bringing gold into the United States for the purpose of supplying it to the country, but paid out $25,000,000. in actual cash from
Original Format
Letter
To
Root, Elihu, 1845-1937
Files
Collection
Citation
Strong, Benjamin, 1872-1928, “Benjamin Strong Jr. to Elihu Root,” 1913 December 16, WWP18431, Benjamin Strong Jr. Papers, Woodrow Wilson Presidential Library & Museum, Staunton, Virginia.