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February 7, 1938

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
With regards, we are,
Yours ver


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.

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
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,
the community of course greatly benefltted. He could give many similar examples.




Senator Carter Glass 2


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 i 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
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

Yours very truly,


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* (i » > relative
i& &
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© 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
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,