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HEAD OFFICE HAMILTON NATIONAL BANK: C HATTANOOGA,TE ISTVE S SEE February 7, 1938 T. R. PRESTON, PRESIDENT Hon. Marriner S. Eccles, Chairman, Federal Reserve Eoard, Washington, D. C. Dear Gov. Eecles: We hope you will take tine to read the enclosed copy of letter to Senator Glass with reference to abolishing bank holding companies. We are identified with a small holding company, and in this letter have tried to state our situation. We believe if these were abolished it would be extremely hurtful and would do nobody any good. There is no public demand for the abolishment of holding companies in this section except from a few who are probably interested otherwise. If these companies are abolished all over the country it is going to further depress business. With regards, we are, Yours ver HAMILTON NATIONAL BANK CHATTANOOGA, TENNESSEE February 7, 1938 Senator Carter Glass, Washington, 0. C. Dear Senator Glass: Referring to the contemplated bank holding company bill which you are preparing, aided by the Treasury, the P. D. I. C , and other Administration agencies. Youfcavesponsored many constructive measures along financial and banking lines, and no one has a liner reputation than you for fairness and being able to see both sides of a question, and 1 beg to present our situation. 9e have a natter by stating our saying that I ha all of that tins nooga, which President of served on tiding coapany and ean best present our side of the Ltion. Permit me first to identify myself by ting business for more than forty-five years, tion, - the Hamilton National Bank of Chetta$on Trust and Savings Bank* In 1928 1 was atlon, and for nearly thirty years have ous Important committees. 1st. as the Hamilton national Asaonumber seventeen, all loeated dates, is locally tion of Chattanooga* Knoxin Bast Tennessee and ir total resources are villa and Johnson City Everyone of these sore than ninety million were failing all batiks came through the lthout restrlcaround. All were allowed to r£ of the depression, tlons. In ten towns ours were the the ing authority be* le have never heard the slightest we beeause of the fact that our banks were identlfi th a for the lleve we ean positively state there is no public demand are person* abolishment of holding companies: this comes entirely ally interested otherwise* The claim is often made that holding companies or branch banks siphon money from the small communities to the largeV ones, this is not true in our experience, As an example, - Our group of banks has agreed to take commodity cotton loans from the farmers of this area to the extent of three millions of dollars, a large percentage of which loans have already been made. We do not believe this would be possible if they were all independent units. During 1938 the matter of marketing the tobacco crop in Morristown, Tennessee, where we had a bank, was a rather serious matter. It required loans to the extent of 1290,000.00 to the dealers of that section in order to start the movement. This sum could not be secured at that time anywhere except from our affiliated banks, and it so happened that our bank at Itorrlstown was the only one left in the county after the depression, all others having failed* Our group of banks furnished the entire amount, the crop was marketed in an orderly way, and the community of course greatly benefltted. He could give many similar ex amples. HAMILTON NATIONAL BANK Senator Carter Glass 2 CHATTANOOGA, TENNESSEE 3rd. the public is always criticising Wall Street, partly because of the large concentration of financial resources in Rev York, the best way we can see to offset this condition to some extent is to build up large financial in* stitutions elsewhere. Many Manufacturing and mercantile establishments throu&iout the country oust go to $all Street for a large percentage of their banking business* The local banks as a rule are not large enough to handle seas* Ve have never heard of any community being injured by having a branch of a large, sound bank in its midst, or by being Identified with a sound holding company* nould not abolishing holding companies have a tendency to further concentrate great banking resources in Sail street? 4th* This country at one time had approximately thirty-one thousand Independent banks* Between sixteen and seventeen thousand of them disappeared* moat of them by failure, with great loss and demoralisation t» their respective i ii ISM ml 11 in The representatives of banks of this type are the ones that are now so bitter against branches and holding companies. If holding toapanies are destroyed not only will business be further disturbed and stocks of these banks depressed, but will not the country revert to the old days, when we had a Multiplicity of these small unit banks? It is estimated that ve now have mare than three thousand ssmll unit banks that have not sufficient earning capacity to Justify their existence. s^ ^^ \ \ \ 5th. Holding companies in this section have been extremely helpful to the public. Ve believe our company is typical of many throughout the country* Does a set-up of this kind deserve destruction? If holding companies have an evil influence why could not some legislation be passed to correct sane, either by automatically converting the units Into branches within their respective States, without waiting for conforming laws of the various State legislatures, or in some way supewl&lng them, so that the pftollc cannot be harmed* If they should be allowed five years to liquidate, and another depression should come during that period, It simply could not be done without great injury to the public* What people need now above everything else is a rest from too much legislation, and they should be given an opportunity to adjust themselves to the new conditions. Yours very truly, (Signed:) T. B. PRBSTON, President February 10, Mr* T. a. Pre: ton, Hamilton fiationfcl B&nk, Chattanooga, lenneesee. Dear Mr« Pre&toai I acknowledge receipt of your l e t t e r or the 7th finfriftaiTi£a copy of a l e t t e r to &m**U* (ii&»&> relative to aboli&ain£ book holding companies* Ala joii p o e a i o l j Know, I ai3t &01* &t «JJL li* mXth sucli a propOiSal* I am thoroogtJL^ it^ailiar with tiie aet-up a±* barik iioldi.jig com^nies throughout tfe* United States| M the federal Kaserv© JBoara, lit ccwajtiii&^c© wX.tk the Beuakinv Act of 19SS, has had a good deal to do witii this entire a a t t e r . In ay opinion, there has oeen altogetaer too much misinTorBatioii, and apparently up to this time no tiae or trouble has been taken fay tiioae expressing a uesir-e to iiquiQate btak holding caap&aies to ascertain the f&cta ana effects r@la.tive to tills very eonstractive purpose. What i s true relative to tae operation ol your molding coapauy i s largely true oi all other iiolding coaipanies tiirougriout trie United Stit—• 1'hey have served and are BtHl serving a very great public £>iocerely yours,