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Reproduced from the Unclassified I Declassified Holdings of the National Archives N e w J e r s e y B a n k e r s A s s o c ia t io n B a n k in g and C u r r e n c y C o m m it t e e P. O. BOX 5 8 9 NEWARK, N E W JE R S E Y W A L T E R M. V A N D E U S E N , N e w a r k , C R O B E R T D. F O O T E , M O R R IS T O W N B L O O M F IE L D H. M IN C H , B R ID G E T O N H E N R Y G . P A R K E R , N E W B R U N S W IC K EDW ARD C. ST O K E S, T r e n t o n Sept 25, 1914. Federal Reserve Board, Washington, D. C. Gentlemen: We beg to transmit herewith, petition duly signed by one hundred and twenty three member banks in northern lew Jersey, asking that the northern part of new Jersey be trans ferred from Federal Reserve District number 3, (Philadelphia) to Federal Reserve District number 2,(lew York), The aggregate capital and surplus of these banks amount to *31,226,427 . Their deposits to $156,456,000. Hine banks in northern new Jersey with a capital and surplus of #1,177,500, and with deposits of $5,310,000, have not signed the petition. We append herewith a list of the banks not signing, and their reasons therefor. Farmers national Bank, Allentown, H. J., located in the Southern corner of Monmouth County, and somewhat nearer Philadelphia than new York City. Belvidere national Bank, Belvidere, n. J. This town is in the extreme Western part of the State, and has direct train service to Philadelphia, and is the only town in Warren County which does not have direct train service to new York City. Hunterdon County national Bank, Flemington, n. J. "It is immaterial to us whether we are in the Philadelphia Reserve District or the new York Reserve District. We are within 50 miles of both cities, and it makes no particular difference to us one way or the other." Union national Bank, Frenchtown, n. J ., located on the Delaware River, in the Western part of the State. Train service to Philadelphia is more direct than to new York.Lambertville national Bank, lambertville, ,N. J., located about one-half way between Hew York City and Phil adelphia, it is immaterial to them which district they are in. Manasqusn National Bank, Manaso/uan, n. J., located in the lower part of Monmouth County, about equally distant h a ir m a n Reproduced from the Unclassified / Declassified Holdings of the National Archives 2- from New York City and Philadelphia. . When the vote was taken by the organization Committee they voted in favor of Philadel phia . First lational Bank, Milford, I. J., located on the Delaware Biver with more direct service to Philadelphia than to lew York City. Second National Bank, Phillipsburg, N. J., located on the Delaware River in the extreme Western part of the State somewhat more convenient to Philadelphia. National Bank of North Hudson, West Hoboken, IT. J. They say they would much prefer to be affiliated with the New York District, but fear signing a petition would embar rass your Eoborable body. We also transmit herewith twenty copies of a brief setting forth our reasons for desiring to have the change made, and are accompanying it with copies of a map of New Jersey showing the division line which we suggest. We would appreciate your consideration of our peti tion at your convenience, and request an opportunity to be heard orally in the matter. Respectfully yours, Banking and Currency Committee New Jersey Bankers Association Reproduced from the Unclassified I Declassified Holdings of the National Archives BRIEF o f the Banks of Northern New Jersey to the Federal Reserve Board To the Federal Reserve Board: The Banking and Currency Committee of the New Jersey Bankers’ Association, acting under authority conferred by that Association, and at the request of the national banks of Northern New Jersey, respect fully petition your honorable body to review the assignment of the banks of Northern New Jersey to the Federal Reserve District No. 3 (Philadelphia) and to alter the district lines so that the banks in New Jersey North of the Northerly line of the Counties of Ocean and Mercer shall be included in Federal Reserve District No. 2 (New York). This would involve transferring the banks in the Counties of Monmouth, Somerset, Passaic, Morris, Middlesex, Union, Hudson, Sussex, Hunterdon, Essex, Bergen, Warren, in the State of New Jersey, from the Federal Reserve District No. 3 (Philadelphia) to Federal Reserve Dis trict No. 2 (New York). W e present to you herewith petitions signed by 123 member banks in the counties above mentioned asking for this change and authorizing us to represent them. The capital and surplus of the banks signing these petitions is 131,226,427, their deposits $156,465,000. Nine banks did not sign petitions, the capital and sur plus of those not signing being $1,177,500, and their deposits $5,310,000. These figures are taken from the 1 published report of the Comptroller of the Currency for 1913 ,those being the latest official figures avail able to us. Northern New Jersey is allied so closely with New York, both commercially and financially, that the banks of that section should be assigned to the New York District in compliance with the Federal Reserve Act, Section 2, which says: “ That the districts shall be apportioned with due regard to the convenience and customary course of business, and shall not necessarily be co-terminous with any State or States.” The volume of checks drawn on any particular city which are received on deposit by a bank show very accurately the amount of business which is done by the community in which the bank is located with the community on which the checks are drawn. Taking this method as a basis, we find that the commercial business of Northern New Jersey with New York is fully ten times as much as the commercial business of that section with Philadelphia, and throughout that section of the State the ties, both commercial, financial and social are almost entirely with New York City. The industrial enterprises of North ern New Jersey, especially those located in the large cities of Hudson, Passaic, Essex, Union and Middle sex Counties, do a very much greater volume of busi ness with New York than with Philadelphia. Most of these concerns have offices in New York City, while 2 but few of them have offices in Philadelphia. We append tables showing the population and industrial importance of Northern New Jersey. We are advised by the banks of Northern New Jersey that of the checks which they receive on deposit drawn on the cities of New York and Phila delphia from 85% to almost 100% are drawn on New York City, and on account of the large volume and amount of these checks payable in New York City it is essential that they be sent directly there in order to insure prompt presentation and prompt notice in case of non-payment. It is impracticable to send these checks to New York by way of the Philadelphia Reserve Bank. This very same question will arise in connection with the very heavy volume of checks pay able in Northern New Jersey which are received on deposit by the New York City banks. An analysis of figures which were received by the Comptroller of the Currency from banks of Northern New Jersey during the month of June last will demonstrate the close relationship existing between New York City and Northern New Jersey, and will show that this rela tionship is much more active and close than that existing between Northern New Jersey and Phila delphia. In taking these figures into consideration it must be borne in mind that the Comptroller’s figures separate New York City from New York State, but do not separate Philadelphia from the State of Pennsylvania. We give below figures cov ering the month of June furnished by five representa tive institutions in Newark, New Jersey, showing 3 the volume of checks on Newark received from New York City and from Philadelphia, and the currency shipments between Newark and New York, there being none with Philadelphia : On local banks, received from New York City ............................................................. $19,096,489 On local banks, received from Philadel phia ................... .......................................... 2,351,506 Currency shipments to and from New York City ..................................................... ........ 2,034,000 At present many of the banks in Northern New Jer sey maintain accounts with Philadelphia banks, but these accounts are not maintained by reason of the natural flow of business there, but are due entirely to the fact that New York City banks have for many years charged exchange for the collection of country checks, whereas Philadelphia banks have been willing to collect these checks at par. Prior to the time when the New York Clearing House adopted the rule requiring its member banks to charge exchange on country checks the banks of Northern New Jersey, with very few exceptions, carried no accounts in Philadelphia, and the figures will demonstrate that immediately after the imposition of this exchange charge by the New York Clearing House the deposits of country banks with Philadelphia banks increased very materially. With equal facilities provided by the banks of the two cities, practically all of these accounts kept in Philadelphia by the banks of North ern New Jersey’ would be eliminated, as there is not a sufficient volume of business on the territory natur ally covered by Philadelphia to warrant the main tenance of these accounts. These facts will also account for the considerable volume of business received by the banks of Northern New Jersey from the banks of Philadelphia, as checks on Northern New Jersey from all over the country are by reason of the exchange charge imposed by the New York Clearing House diverted to Philadelphia rather than through tlieir natural course by way of New York. The relations existing between the banking institu tions of Northern New Jersey and the banks of New York City have always been most intimate, and the transactions between that section of New Jersey and New York City are carried on in a very large degree Through personal contact, resulting in mutual advan tage. On account of this close relationship no arti ficial barriers should be erected, and if erected, will prove injurious to the banks of Northern New Jersey. A considerable number of the banks in Northern New Jersey at certain times in the year purchase com mercial paper. This is all purchased through New York brokers, and is usually passed upon by New York banks before being purchased. The bankers of New York City are in very close touch with the credit standing of Northern New Jer sey corporations, and are thus in much better posi tion to advise with the directors of the Federal Reserve Bank of New York City regarding conditions in Northern New Jersey than are the bankers of Philadelphia. Many of the industries of Northern New Jersey maintain bank accounts in New York City as well as in New Jersey, sell their paper in the New York markets, and are otherwise financed there. This fur ther results in very close and accurate knowledge by the bankers of New York City of the credits and needs of the industries of Northern New Jersey. The very large commuting element in the popula tion of Northern New Jersey alone causes a very con siderable flow of business to and from New York City. Many considerable towns in Northern New Jersey are inhabited almost entirely by people who are in busi ness in New York City. We are advised by the Penn sylvania Railroad Company that during the past year on their lines east of, and including New Brunswick, 11,051,715 passengers were carried to and from New York City. The Central Railroad Company advise us that on their lines in Northern New Jersey they have at least 12,000 commuters from points in North ern New Jersey to New York City, and in addition they carry about 35,000 passengers to and from New York City and New Jersey points each day. The Delaware, Lackawanna & Western Railroad Company advise us that the number of passengers carried between stations in Northern New Jersey and New York City during the month of June, 1914, was 1,421,537. The Erie Railroad Company advise us that in June, 1914, they carried 1,555,314 passengers between stations in Northern New Jersey and New York City. These figures show that over 60,000,000 passengers per year are carried between New York City and Northern New Jersey points, and this does not include the traffic from points in Hudson County which reaches New York City by other means than the railroads. The retail purchases of a large portion of the commuting element of the population are made in New York City, and much of the wholesale and retail business throughout Northern New Jersey follows the same course. A large proportion of the business of many banks located in the commuting cities and towns of North ern New Jersey are accounts of New York business men residing in those towns and cities. A recent agreement, which has been entered into by many of the country banks located near New York City, provides that the New York Clearing House banks will take checks on these banks at par, the local bank agreeing to remit for them in New York Clearing House funds at par on receipt. These checks are therefore readily received in New York, but if Northern New Jersey were in another Federal Reserve District than New York City this arrangement would probably be terminated, and it is unlikely that New York City banks would receive these checks freely if they had to collect them through the Federal Reserve Bank in New York City, and from that bank through the Federal Reserve Bank in Phila delphia. This would result in the transfer of many of 7 these accounts of New York men in the local banks to banks in New York City. Efforts are already being made by New York City banks to secure the accounts of business men and industrial concerns located in Northern New Jersey, the New York banks using the argument that the New Jersey banks being attached to the Philadelphia Reserve Bank District will interfere with the avail ability of deposit accounts in New Jersey banks. This will probably result in the diversion of considerable business from New Jersey banks to the banks of New York City if the present assignment of the Northern New Jersey banks is continued. Access to New York City from Northern New Jer sey is rapid and easy, and to Philadelphia is much longer, and frequently more difficult, as few portions of the Northern part of the State have direct train service to Philadelphia, while all have direct train service to New York City. Prom certain sections in the Northern part of New Jersey it is impossible to reach Philadelphia, transact business and return the same day, whereas New York City can be reached from every part of Northern New Jersey with time for the transaction of business and return within con venient hours of the same day. Thus from Newton, the county seat of Sussex County, a trip to Phila delphia by way of New York, which is the quickest route, would involve leaving Newton at 9:10 A. M., reaching Philadelphia at 3 P. M. The only other route to Philadelphia without going through New York City involves leaving Newton at 9:10 A. M., reaching Philadelphia at 4 :17 P. M., with three changes of cars. On account of the large number of commuters living throughout Northern New Jer sey the train service to New York is very frequent and good, making a trip to that city practically as convenient as going from one part of New York City to another. Hudson County, and to a lesser extent, Essex County, on account of the tube connec tions with New York City, are practically a part of New York City for banking and business purposes, fully as much so as is Brooklyn, and the same condi tion is to a very large extent true as regards the other nearby counties. Six banks in Hudson County are associate mem bers of the New York Clearing House and clear their checks there every day. We give below several ex amples of the time of transit from down town in New York City to points in New Jersey, as contrasted with the time of transit to points within the city limits of New York City. Newark, 20 minutes by Hudson & Manhattan R. R. Exchange Place, Jersey City, 3 minutes by Hud son & Manhattan R. R. Hoboken, 9 minutes by Hudson & Manhattan R. R. Bayonne, 26 minutes by Central R. R. from Lib erty Street. Elizabeth, 30 minutes by Central R. R. from Lib erty Street. 9 Passaic, 35 minutes by Erie Railroad from Cham bers Street. Paterson, 45 minutes by Erie Railroad from Cham bers Street. Ninety-sixth Street, New York City, 16 minutes from City Hall by Subway. Two Hundred and Forty-second Street and Broad way, 42 minutes from City Hall by Subway. One Hundred and Eighty-first Street and Boston road, 40 minutes from City Hall by Subway. One Hundred and Twenty-fifth Street and Broad way, 22 minutes from City Hall by Subway. St. George, Staten Island, 20 minutes from White hall Ferry. Mariner’s Harbor, Staten Island, 43 minutes from Whitehall Ferry. Tottenville, Staten Island, 78 minutes from White hall Ferry. Jamaica, Borough of Queens, 20 minutes from Pennsylvania Station, Thirty-third Street. Jamaica, Borough of Queens, 40 minutes from down town New York City. Flushing, Borough of Queens, 22 minutes from Pennsylvania Station, Thirty-third Street. Flushing, Borough of Queens, 42 minutes from down town New York City. 10 Far Rockaway, Borough of Queens, 65 minutes from down town New York City. The matter of telephone service also enters into this question of convenience, as connections with New York City are much quicker, more satisfactory and cheaper than telephone connections with Philadelphia. The members of your honorable body fully realize that the money transactions in our section, especially those running into large figures, necessitate the use of checks payable in New York City, resulting in our banks being constantly called upon for New York certifications. Checks which are not made payable through the New York Clearing House will not fulfill the requirements. As a consequence, if our reserve is kept elsewhere than in New York City, large balances will have to be maintained by us in New York banks, not only at a loss in earnings, but also to the detri ment of all the manufacturing communities in this section, because of the diminished loaning power of the banks. Accounts will also have to be kept in New York City to cover currency transactions, most of which are now handled by messenger, and which run into very large amounts. Many of our banks have cur rency transactions with New York City aggregating in the neighborhood of $500,000 a month, and the currency shipments of at least two of the banks in 11 Reproduced from the Unclassified / Declassified Holdings of the National Archives Far Rockaway, Borough of Queens, 45 minutes from Pennsylvania Station, Thirty-third Street. Jersey City average over $1,000,000 a month, all handled by messenger. A great bulk of the coupons are payable in New York City, including those of a large number of the municipalities and corporations located in Northern New Jersey, and the collection of these coupons by our banks will necessitate accounts in New York City if we are not connected with that reserve district. A very considerable amount of foreign exchange is dealt in, both buying and selling, by the banks of our section of New Jersey, and this business has all been done through New York on account of the better facili ties and closer rates that can be obtained there, and it would be a serious disadvantage to our banks to inter fere in any way with the trend of this business to its natural centre. If it has been thought to obviate the difficulties which we anticipate will arise through our being put in another than our natural district by some method of clearing checks, why should you not adopt the simpler and surer method of putting us in the district in which we belong through common association, natural trend of business, both banking and commer cial, and by physical contiguity? It should not be necessary to devise means of overcoming the difficul ties created by our being placed in a district artifici ally created in direct opposition to the natural flow of trade. The recent election of directors for the Federal Reserve Bank of Philadelphia demonstrates the im 12 possibility of electing any representative banker from New Jersey as a member of the Board of that bank. This is a serious condition for the bankers of North ern New Jersey, as the bankers of Philadelphia and Pennsylvania are not closely in touch with the needs and credits of Northern New Jersey, whereas lack of such representation, if we were affiliated with the New York Reserve Bank, would not be material, owing to the close knowledge of our locality and of its needs and credits by the bankers representing New York City on the Board of the Federal Reserve Bank of New York. It is most desirable for the success of the Federal Reserve System that the state institutions should become affiliated as members. If the present handi cap, due to the assignment of Northern New Jersey banks, continues, it is very improbable that any state institutions will become members. Positive state ments to this effect have been made to us by a con siderable number of the more important state insti tutions in the Northern part of the State, and these statements carry all the more weight as their reserves are freed by legislation from restriction to any one locality and follow the natural channels of business. If the state institutions of Northern New Jersey re main out of the system the member banks will at a serious disadvantage in competition with them under present conditions. At the time the Organization Committee was hold ing hearings in New York we took a poll of the 13 banks o f New Jersey and reported to that ’Committee that the banks of the counties mentioned above desired to be affiliated with the New York City District, and the poll which the Committee later took will confirm the facts which we laid before them at that hearing. The figures of the banks of Northern New Jersey in accordance with their report to the Comptroller of the Currency on June 30, 1.914, are as follow s: Capital ......................................... $ 16,307,000 Surplus ............... ..... .................. 16,183,500 Undivided Profits ................ ....... 7,938,239 Individual Deposits ................... 157,522,332 Bank D eposits............................. 17,115,557 If the Northern New Jersey Banks are continued in the Philadelphia District it will very seriously interfere with the smooth conduct of their business under the Federal Reserve Act, will take from them many of the advantages which they would otherwise gain through membership in the Federal Reserve System, and will prevent the fullest possible develop ment of the system in this part of the State. It is directly contrary to the currents of trade and bank ing, and as such cannot help being injurious to the state and its industries. The banking business of a section does not originate with the banks themselves, but arises out of the commerce of their section and follows the course of trade, and anything which tends to disturb the flow of banking business along with the natural flow of general business cannot but be injur14 ions. Any action which places the national institu tions at a disadvantage in their competition with the State institutions should not be continued, as it is wise to encourage the greatest possible development of banks under national charters. Respectfully submitted, BANKING AND CURRENCY COMMITTEE NEW JERSEY BAN KERS’ ASSOCIATION. W ALTER M. VAN DEUSEN, Chairman, National Newark Banking Company, Newark, New Jersey. ROBERT D. FOOTE, National Iron Bank, Morristown. BLOOMFIELD H. MINCH, Bridgeton National Bank, Bridgeton. H ENRY G. PARKER, National Bank of New Jersey, New Brunswick. ED W ARD C. STOKES, Mechanics’ National Bank, Trenton. 15 Unclassified / Declassified Holdings of the National Archives MANUFACTURES NEW JERSEY. Statement Showing Number of W age Earners and Value of Products for the Years 1899-1904-1909 in the Principal Manufacturing Centres of Northern New Jersey. C ity, Town Average Number of Wage Earners 1909 Newark ................. Jersey City............ Bayonne ............... Perth Amboy...... Paterson .............. Passaic ................. Elizabeth .............. Hoboken ............. Harrison .............. New Brunswick..... West New York.... Orange ...... .......... Phillipsburg ........ Garfield ..... ........... Kearny ................. Union ..................... Bloomfield ............ West Hoboken..... East Orange........ Plainfield .............. Irvington .............. Hackensack .......... Long Branch........ Montclair ............. West Orange........ Morristown .......... Asbury Park........ t Figures not 1904 Value of Products 1899 1909 1899 1904 59,955 25,454 7,519 5,866 32,004 15,086 12,737 8,100 6,500 5,264 1,508 4,383 3,432 2,530 2,820 2,894 2,957 2,782 1,386 1,758 540 738 415 252 476 50,697 42,878 $202,511,520 20,368 17,391 128,774,978 4,670 7,057 73,640,900 2,005 73,092,703 3,950 69,584,351 28,509 28,542 11,000 6,399 41,729,257 12,335 9,498 29,147,334 5,712 7,227 20,413,015 2,859 4,040 13,142,377 3,836 4,590 10,004,802 9,273,717 t t 2,450 1,640 9,175,910 2,216 3,148 9,150,227 8,893,710 t t 986 1,303 8,306,276 1,376 1,856 7,941,047 1,612 1,893 5,894,710 5,577,439 3,562 2,733 854 690 3,724,879 1,986 1,384 3,648,745 3,017,824 t t 812 487 1,977,966 96 1,116,663 294 169 151 1,006,586 747,684 t t 201 252 724,233 307 602,194 264 t t $150,055,227 $112,728,045 75,740,934 72,929,690 60,633,761 38,601,429 34,800,402 14,061,072 54,673,083 48,502,044 22,782,725 12,804,805 29,300,801 22,861,375 14,077,305 10,483,079 8,408,924 6,086,477 8,916,983 6,791,321 t t 2,995,688 6,150,635 6,684,173 4,584,886 t t 4,427,904 1,607,002 3,512,451 3,403,136 4,645,483 3,370,924 5,947,267 4,769,436 2,320,552 2,086,910 3,572,134 2,437,434 t t 1,488,358 782,232 677,268 280,590 621,145 663,592 t t 704,412 595,592 t t available. POPULATION NEW JERSEY. Statement Giving the Population for 1900-1910 o f 32 Incor porated Places Having a Population o f Over 10,000, Located in Northern New Jersey. City, Town or Borough Newark ............. Jersey City....... Paterson ......... Elizabeth ......... Hoboken ......... Bayonne ........... Passaic ............. West Hoboken. East Orange.... Perth Amboy... Orange ............. New Brunswick. M ontclair_____ U nion................ City, Town 1910 1900 or 1910 1900 Borough 347,469 267,779 ,600 ,409 ,324 ,545 ,773 ,408 ,371 ,121 246,070 206,433 105,171 52,130 59,m 32,722 27,777 23,004 21,506 17,699 24,14il 20,006 13,962 15,187 Plainfield ______ Kearny .............. Bloomfield......... Harrison ........... Hackensack ___ Phillipsburg ..... West New Tork. Long Branch..... Morristown____ Irvington ______ West Orange..__ Garfield............... Asbury Park___ 16 20,550 15,369 18,659 10,890 15,070 9,668 14,498 10,596 14,050 9,443 13,903 10,052 13,560 5,267 13,298 8,872 12,507 11,267 11,877 5,255 10,980 6,889 10,213 3,504 10,150 4,148 by Rep Visits by Rep Commerci al Visits resentatives resentatives with New York to New York to Phil’d’lphia Character of Population COUNTY Popula tion Time to New York Time to Philadelphia Banking with New York Bergen................................... 138,002 10 to 50 minutes direct 2y2 to 4 hours, not direct over 90% p actically 100% 2 to 6 times a week hardly ever manufacturing commuting Essex ... ................................. 512,886 20 to 40 minutes direct ly2 to 2ya hours, not direct, except Newark 90% over 80% 2 to 6 times a week never to twice a year manufacturing commuting Hudson .................................. 537,231 3 to 35 minutes direct 2 to 2% hours, not direct, except Jersey City and Bayonne over 95% over 90% 3 times a day rarely manufacturing Hunterdon .......................... 33,569 1y2 to 2 hours direct iy2 to 2% hours, half direct 50 to 90% 50 to 90% twice a week seldom farming lt o i y 2 hours direct ly2 to 2% hours, five towns direct 75 to 90% 80% twice a week rarely manufacturing farming l t o 2 hours direct 2 to 4 hours, half direct 90% 90% twice a week rarely summer resort farming except three towns Middlesex .... ....................... 114,426 except two towns Monmouth ... ...................... 94,734 Morris ........ ........................ 74,704 60 to 90 minutes 3 to 3% hours, not direct direct over 90% over 90% daily rarely commuting Passaic ................................. 215,902 40 to 60 minutes 2y2 to 4 hours, not direct direct over 90% over 95% daily rarely manufacturing commuting Somerset ............................. 38,820 One hour direct iy2 to 3 hours, part direct 90% 90% daily seldom commuting farming Sussex ................................. 26,781 2to2y2 hours direct 6 hours, not direct 90% 90% twice a week rarely farming Union ............................... 140,197 30 to 45 minutes direct 2 hours, direct 90 to 100% 90 to 100% daily rarely manufacturing commuting Warren ........ ........................ 43,187 Two hours direct 3 to 4 hours, 2 places direct over 95% 95 to 100% weekly rarely farming except one town Reproduced from the Unclassified I Declassified Holdings of the National Archives Table compiled from information furnished by the banks of northern New Jersey, showing time of travel to New York City and Philadelphia, proportion of banking and commercial business as between New York City and Philadelphia, frequency of visits by bank representatives to New York City and Philadelphia, and character of population of the various Counties. R ep rod uced from the U n cla ssified I D ecla ssified H oldings o f the N ational A rchives R562 .D 7 N 5 " BRIEF i o f the Banks of Northern New Jersey to the | Federal Reserve Board . j n .< vj Af / 'j - To the Federal Reserve Board: The Banking and Currency Committee of the New Jersey Bankers’ Association, acting under authority conferred by that Association, and at the request of the national banks of Northern New Jersey, respect fully petition your honorable body to review the assignment of the banks of Northern New Jersey to the Federal Reserve District No. 3 (Philadelphia) and to alter the district lines so that the banks in New Jersey North of the Northerly line of the Counties of Ocean and Mercer shall be included in Federal Reserve District No. 2 (New York). This would involve transferring the banks in the Counties of Monmouth, Somerset, Passaic, Morris, Middlesex, Union, Hudson, Sussex, Hunterdon, Essex, Bergen, Warren, in the State of New Jersey, from the Federal Reserve District No. 3 (Philadelphia) to Federal Reserve Dis trict No. 2 (New York). We present to you herewith petitions signed by 123 member banks in the counties above mentioned asking for this change and authorizing us to represent them. The capital and surplus of the banks signing these petitions is $31,226,427, their deposits $156,465,000. Nine banks did not sign petitions, the capital and sur plus of those not signing being $1,177,500, and their deposits $5,310,000. These figures are taken from the 1 Reproduced from the Unclassified IDeclassified Holdings of the National Archives i published report of the Comptroller of the Currency for 1913 ,those being the latest official figures avail able to us. Northern New Jersey is allied so closely with New York, both commercially and financially, that the banks of that section should be assigned to the New York District in compliance with the Federal Reserve Act, Section 2, wThich says: “ That the districts shall be apportioned with due regard to the convenience and customary course of business, and shall not necessarily be co-terminous with any State or States.” The volume of checks drawn on any particular city which are received on deposit by a bank show very accurately the amount of business which is done by the community in which the bank is located with the community on which the checks are drawn. Taking this method as a basis, we find that the commercial business of Northern New Jersey with New York is fully ten times as much as the commercial business of that section with Philadelphia, and throughout that section of the State the ties, both commercial, financial and social are almost entirely with New York City. The industrial enterprises of North ern New Jersey, especially those located in the large cities of Hudson, Passaic, Essex, Union and Middle sex Counties, do a very much greater volume of busi ness with New York than with Philadelphia. Most of these concerns have offices in New York City, while 2 but few of them have offices in Philadelphia. We append tables showing the population and industrial importance of Northern New Jersey. We are advised by the banks of Northern New Jersey that of the checks which they receive on deposit drawn on the cities of New York and Phila delphia from 85% to almost 100% are drawn on New York City, and on account of the large volume and amount of these checks payable in New York City it is essential that they be sent directly there in order to insure prompt presentation and prompt notice in case of non-payment. It is impracticable to send these checks to New York by way of the Philadelphia Reserve Bank. This very same question will arise in connection with the very heavy volume of checks pay able in Northern New Jersey which are received on deposit by the New York City banks. An analysis of figures which were received by the Comptroller o f the Currency from banks of Northern New Jersey during the month of June last will demonstrate the close relationship existing between New York City and Northern New Jersey, and will show that this rela tionship is much more active and close than that existing between Northern New Jersey and Phila delphia. In taking these figures into consideration it must be borne in mind that the Comptroller’s figures separate New York City from New York State, but do not separate Philadelphia from the State of Pennsylvania. We give below figures cov ering the month of June furnished by five representa tive institutions in Newark, New Jersey, showing 3 the volume of checks on Newark received from New York City and from Philadelphia, and the currency shipments between Newark and New York, there being none with Philadelphia : On local banks, received from New York City ................................. ............................$19,096,489 On local banks, received from Philadel phia ................... .......................................... 2,351,506 Currency shipments to and from New York City ......................... .................................... 2,034,000 At present many of the banks in Northern New Jer sey maintain accounts with Philadelphia banks, but these accounts are not maintained by reason of the natural flow of business there, but are due entirely to the fact that New York City banks have for many years charged exchange for the collection of country checks, whereas Philadelphia banks have been willing to collect these checks at par. Prior to the time when the New York Clearing House adopted the rule requiring its member banks to charge exchange on country checks the banks of Northern New Jersey, with very few exceptions, carried no accounts in Philadelphia, and the figures will demonstrate that immediately after the imposition of this exchange charge by the New York Clearing House the deposits of country banks with Philadelphia banks increased very materially. With equal facilities provided by the banks of the two cities, practically all of these accounts kept in Philadelphia by the banks of North- orn New Jersey would be eliminated, as there is not a sufficient volume of business on the territory natur ally covered by Philadelphia to warrant the main tenance of these accounts. These facts will also account for the considerable volume of business received by the banks of Northern New Jersey from the banks of Philadelphia, as checks on Northern New Jersey from all over the country are by reason of the exchange charge imposed by the New York Clearing House diverted to Philadelphia rather than through their natural course by way of New York. The relations existing between the banking institu tions of Northern New Jersey and the banks of New York City have always been most intimate, and the transactions between that section of New Jersey and New York City are carried on in a very large degree Through personal contact, resulting in mutual advan tage. On account of this close relationship no arti ficial barriers should be erected, and if erected, will prove injurious to the banks of Northern New Jersey. A considerable number of the banks in Northern New Jersey at certain times in the year purchase com mercial paper. This is all purchased through New York brokers, and is usually passed upon by New York banks before being purchased. The bankers of New York City are in very close touch with the credit standing of Northern New Jer sey corporations, and are thus in much better posi tion to advise with the directors of the Federal Reserve Bank of New York City regarding conditions in Northern New Jersey than are the bankers of Philadelphia. Many of the industries of Northern New Jersey maintain bank accounts in New York City as well as in New Jersey, sell their paper in the New York markets, and are otherwise financed there. This fur ther results in very close and accurate knowledge by the bankers of New York City of the credits and needs of the industries of Northern New Jersey. The very large commuting element in the popula tion of Northern New Jersey alone causes a very con siderable flow of business to and from New York City. Many considerable towns in Northern New Jersey are inhabited almost entirely by people who are in busi ness in New York City. We are advised by the Penn sylvania Railroad Company that during the past year on their lines east of, and including New Brunswick, 11,051,715 passengers were carried to and from New York City. The Central Railroad Company advise us that on their lines in Northern New Jersey they have at least 12,000 commuters from points in North ern New Jersey to New York City, and in addition they carry about 35,000 passengers to and from New York City and New Jersey points each day. The Delaware, Lackawanna & Western Railroad Company advise us that the number of passengers carried between stations in Northern New Jersey and New York City during the month of June, 1914, was 1,421,537. The Erie Railroad Company advise us that in June, 1914, they carried 1,555,314 passengers between stations in Northern New Jersey and New York City. These figures show that over 60,000,000 passengers per year are carried between New York City and Northern New Jersey points, and this does not include the traffic from points in Hudson County which reaches New York City by other means than the railroads. The retail purchases of a large portion of the commuting element of the population are made in New York City, and much of the wholesale and retail business throughout Northern New Jersey follows the same course. A large proportion of the business of many banks located in the commuting cities and towns of North ern New Jersey are accounts of New York business men residing in those towns and cities. A recent agreement, which has been entered into by many of the country banks located near New York City, provides that the New York Clearing House banks will take checks on these banks at par, the local bank agreeing to remit for them in New York Clearing House funds at par on receipt. These checks are therefore readily received in New York, but if Northern New Jersey were in another Federal Reserve District than New York City this arrangement would probably be terminated, and it is unlikely that New York City banks would receive these checks freely if they had to collect them through the Federal Reserve Bank in New York City, and from that bank through the Federal Reserve Bank in Phila delphia. This would result in the transfer of many of 7 these accounts of New York men in the local banks to banks in New York City. Efforts are already being- made by New York City banks to secure the accounts of business men and industrial concerns located in Northern New Jersey, the New York banks using the argument that the New Jersey banks being attached to the Philadelphia Reserve Bank District wTill interfere with the avail ability of deposit accounts in New Jersey banks. This will probably result in the diversion of considerable business from New Jersey banks to the banks of New York City if the present assignment of the Northern New Jersey banks is continued. Access to New York City from Northern New Jer sey is rapid and easy, and to Philadelphia is much longer, and frequently more difficult, as few portions of the Northern part of the State have direct train service to Philadelphia, while all have direct train service to New York City. From certain sections in the Northern part of New Jersey it is impossible to reach Philadelphia, transact business and return the same day, whereas New York City can be reached from every part of Northern New Jersey with time for the transaction of business and return within con venient hours of the same day. Thus from Newton, the county seat of Sussex County, a trip to Phila delphia by way of New York, which is the quickest route, would involve leaving Newton at 9 :10 A. M., reaching Philadelphia at 3 P. M. The only other route to Philadelphia without going through New York City involves leaving Newton at 9 :10 A. M., reaching Philadelphia at 4 :17 P. M., with three changes of cars. On account of the large number of commuters living throughout Northern New Jer sey the train service to New York is very frequent and good, making a trip to that city practically as convenient as going from one part of New York City to another. Hudson County, and to a lesser extent, Essex County, on account of the tube connec tions with New York City, are practically a part of New York City for banking and business purposes, fully as much so as is Brooklyn, and the same condi tion is to a very large extent true as regards the other nearby counties. Six banks in Hudson County are associate mem bers of the New York Clearing House and clear their checks there every day. We give below several ex amples of the time of transit from down town in New York City to points in New Jersey, as contrasted with the time of transit to points within the city limits of New York City. Newark, 20 minutes by Hudson & Manhattan R. R. Exchange Place, Jersey City, 3 minutes by Hud son & Manhattan R. R. Hoboken, 9 minutes by Hudson & Manhattan R. R. Bayonne, 26 minutes by Central R. R. from Lib erty Street. Elizabeth, 30 minutes by Central R. R. from Lib erty Street. 9 Passaic, 35 minutes by Erie Railroad from Cham bers Street. Paterson, 45 minutes by Erie Railroad from Cham bers Street. Ninety-sixth Street, New York City, 16 minutes from City Hall by Subway. Two Hundred and Forty-second Street and Broad way, 42 minutes from City Hall by Subway. One Hundred and Eighty-first Street and Boston road, 40 minutes from City Hall by Subway. One Hundred and Twenty-fifth Street and Broad way, 22 minutes from City Hall by Subway. St. George, Staten Island, 20 minutes from White hall Ferry. Mariner’s Harbor, Staten Island, 43 minutes from Whitehall Ferry. Tottenville, Staten Island, 78 minutes from White hall Ferry. Jamaica, Borough of Queens, 20 minutes from Pennsylvania Station, Thirty-third Street. Jamaica, Borough of Queens, 40 minutes from down town New York City. Flushing, Borough of Queens, 22 minutes from Pennsylvania Station, Thirty-third Street. Flushing, Borough of Queens, 42 minutes from down town New York City. 10 Far Rockaway, Borough of Queens, 45 minutes from Pennsylvania Station, Thirty-third Street. Far Rockaway, Borough of Queens, 65 minutes from down town New York City. The matter of telephone service also enters into this question of convenience, as connections with New York City are much quicker, more satisfactory and cheaper than telephone connections with Philadelphia. The members of your honorable body fully realize that the money transactions in our section, especially those running into large figures, necessitate the use of checks payable in New York City, resulting in our banks being constantly called upon for New York certifications. Checks which are not made payable through the New York Clearing House will not fulfill the requirements. As a consequence, if our reserve is kept elsewhere than in New York City, large balances will have to be maintained by us in New York banks, not only at a loss in earnings, but also to the detri ment of all the manufacturing communities in this section, because of the diminished loaning power of the banks. Accounts will also have to be kept in New York City to cover currency transactions, most of which are now handled by messenger, and which run into very large amounts. Many of our banks have cur rency transactions with New York City aggiegating in the neighborhood of $500,000 a month, and the currency shipments of at least two of the banks in 11 Jersey City average over $1,000,000 a month, all handled by messenger. A great bulk of the coupons are payable in New York City, including those of a large number of the municipalities and corporations located in Northern New Jersey, and the collection of these coupons by our banks will necessitate accounts in New York City if we are not connected with that reserve district. A very considerable amount of foreign exchange is dealt in, both buying and selling, by the banks of our section of New Jersey, and this business has all been done through New York on account of the better facili ties and closer rates that can be obtained there, and it would be a serious disadvantage to our banks to inter fere in any way with the trend of this business to its natural centre. If it has been thought to obviate the difficulties which we anticipate will arise through our being put in another than our natural district by some method of clearing checks, why should you not adopt the simpler and surer method of putting us in the district in which we belong through common association, natural trend of business, both banking and commer cial, and by physical contiguity? It should not be necessary to devise means of overcoming the difficul ties created by our being placed in a district artifici ally created in direct opposition to the natural flow of trade. The recent election of directors for the Federal Reserve Bank of Philadelphia demonstrates the im 12 possibility of electing any representative banker from New Jersey as a member of the Board of that bank. This is a serious condition for the bankers of North ern New Jersey, as the bankers of Philadelphia and Pennsylvania are not closely in touch with the needs and credits of Northern New Jersey, whereas lack of such representation, if we were affiliated with the New York Reserve Bank, would not be material, owing to the close knowledge of our locality and of its needs and credits by the bankers representing New York City on the Board of the Federal Reserve Bank of New York. It is most desirable for the success of the Federal Reserve System that the state institutions should become affiliated as members. If the present handi cap, due to the assignment of Northern New Jersey banks, continues, it is very improbable that any state institutions will become members. Positive state ments to this effect have been made to us by a con siderable number of the more important state insti tutions in the Northern part of the State, and these statements carry all the more weight as their reserves are freed by legislation from restriction to any one locality and follow the natural channels of business. If the state institutions of Northern New Jersey re main out of the system the member banks will b *1 at a serious disadvantage in competition with them under present conditions. At the time the Organization Committee was hold ing hearings in New York we took a poll of the 13 banks of New Jersey and reported to that Committee that the banks of the counties mentioned above desired to be affiliated with the New York City District, and the poll which the Committee later took will confirm the facts which we laid before them at that hearing. The figures of the banks of Northern New Jersey in accordance with their report to the Comptroller of the Currency on June 30, 1.914, are as follows: Capital ................... .$ 16,307,000 Surplus ............... ... Undivided Profits ... . Individual Deposits 16,183,500 7,938,239 157,522,332 Bank Deposits 17,115,557 If the Northern New Jersey Banks are continued in the Philadelphia District it will very seriously interfere with the smooth conduct of their business under the Federal Reserve Act, will take from them many of the advantages which they would otherwise gain through membership in the Federal Reserve System, and will prevent the fullest possible develop ment of the system in this part of the State. It is directly contrary to the currents of trade and bank ing, and as such cannot help being injurious to the state and its industries. The banking business of a section does not originate with the banks themselves, but arises out of the commerce of their section and follows the course of trade, and anything which tends to disturb the flow of banking business along with the natural flow of general business cannot but be injur 14 ious. Any action which places the national institu tions at a disadvantage in their competition with the State institutions should not be continued, as it is wise to encourage the greatest possible development of banks under national charters. Respectfully submitted, BANKING AND CURRENCY COMMITTEE N EW JE RSE Y BAN KERS’ ASSOCIATION. W ALTER M. VAN DEUSEN, Chairman, National Newark Banking Company, Newark, New Jersey. ROBERT D. FOOTE, National Iron Bank, Morristown. BLOOMFIELD H. MINCH, Bridgeton National Bank, Bridgeton. H ENRY G. PARK ER, National Bank of New Jersey, New Brunswick. ED W A RD C. STOKES, Mechanics’ National Bank, Trenton. 15 L _Ija.I. .J, 1 ') l classified / Declassified Holdings ot the National Archives MANUFACTURES NEW JERSEY. Statement Showing Number o f W age Earners and Value of Products for the Years 1899-1904-1909 in the Principal Manufacturing Centres o f Northern New Jersey. City, Town or Borough Average Number of Wage Earners 1909 Newark ................. Jersey City............ Bayonne ............... Perth Amboy...... Paterson .............. Passaic ................. Elizabeth .............. Hoboken ............. Harrison ............. New Brunswick..... West New York.... Orange ................. Phillipsburg ........ Garfield ................. Kearny ................. Union ..................... Bloomfield ............ West Hoboken..... East Orange........ Plainfield .............. Irvington ......... Hackensack .......... Long Branch........ Montclair ............. West Orange........ Morristown .......... Asbury Park........ 1904 Value of Products 1899 59,965 50,697 25,454 20,353 7,519 7,057 5,866 3,950 32,004 28,509 15,086 11,000 12,737 12,335 8,100 7,227 6,500 4,040 5,264 4,590 1,508 t 4,383 2,450 3,432 3,148 2,530 t 2,820 1,303 2,894 1,856 2,957 1,893 2,782 3,562 1,386 854 1,758 1,986 540 t 738 812 415 294 252 151 476 t 201 307 264 t 1909 42,878 $202,511,520 17,391 128,774,978 4,670 73,640,900 2,005 73,092,703 28,542 69,584,351 6,399 41,729,257 9,498 29,147,334 5,712 20,413,015 2,859 13,142,377 3,838 10,004,802 9,273,717 t 1,640 9,175,910 2,216 9,150,227 8,803,710 t 986 8,306,276 1,376 7,941,047 1,612 5,894,710 2,733 5,577,439 690 3,724,879 1,384 3,648,745 3,017,824 t 487 1,977,966 96 1,116,660 169 1,026,586 747,684 t 252 724,233 602,194 t 1904 1899 $150,055,227 $112,728,045 75,740,934 72,929,690 60,633,761 38,601,429 34,800,402 14,061,072 04,673,083 48,502,044 12,804,805 22,782,725 29,300,801 22,861,375 14,077,306 10,483,079 8,408,924 6,086,477 8,906,983 6,791,321 t t 2,995,688 6,150,635 6,684,173 4,584,886 t t 4,427,904 1,607,002 3,512,451 3,403,136 4,645,483 3,370,924 4,769,436 5,947,267 2,326,552 2,066,910 3,572,134 2,437,434 t t 1,488,358 782,232 577,268 280,590 621,145 663,592 t t 704,412 595,592 t t t F ig u r e s n o t available. POPULATION NEW JERSEY. Statement Giving the Population for 1900-1910 of 32 Incor porated Places Having a Population of Over 10,000, Located in Northern New Jersey. City, Town or Borough 1910 Newark .......................... 347,469 Jersey City..................... 267,779 Paterson ....................... 126,600 Elizabeth ....................... 73,409 Hoboken ....................... 70,324 55,545 Bayonne ........................ 54,773 Passaic .......................... West Hoboken.............. 36,403 East Orange.............— 34,371 32,121 Perth Amboy----- ------29,630 Orange .......................... 23,388 New Brunswick___ ___ M ontclair....................... 21,550 Union .............................. 21,023 City, Town or Borough 1900 246,070 206,433 105,171 52,130 59,361 32,722 27,777 23,004 21,506 17,699 24,141 20,008 13,962 15,187 Plainfield .......................... Kearny .............................. Bloomfield ......................... Harrison .......................... Hackensack ....... ............. Phillipsburg ..................... West New Tork................ Long Branch___________ Morristown ____________ Irvington ______________ West Orange.___________ Garfield .............................. Asbury Park..................... 16 1910 1900 20,650 16,360 18,659 10,898 15,070 9,068 14,498 10,596 14,050 9,443 13,903 10,062 13,560 5,267 13,298 8,872 12,507 11,267 11,877 6,255 10,980 6,889 10,213 3,504 10,150 4,148 COUNT ST 1 i Popula tion i Time to New York Time to Philadelphia Banking with New York Visits by Rep Visits by Rep Commercial resentatives resentatives with New York to New York to Phil’d’lphia Character of Population BergeD............. -.................... 138,002 10 to 50 minutes direct 2y2 to 4 hours, not direct over 90% p actically 100% 2 to 6 times a week hardly ever manufacturing commuting Essex .................................... 512,886 20 to 40 minutes direct 1y2 to 2 \/2 hours, not direct, except Newark 90% over 80% 2 to 6 times a week never to twice a year manufacturingcommuting Hudson ............................... 537,231 3 to 35 minutes direct 2 to 2ya hours, not direct, except Jersey City and Bayonne over 95% over 90% 3 times a day rarely manufacturing Hunterdon .......................... 33,569 iy2 to 2 hours direct iy2 to 2% hours, half direct 50 to 90% 50 to 90% twice a week seldom farming 1 to 1y2 hours direct iy2 to 2y2 hours, five towns direct 75 to 90% 80% twice a week rarely manufacturing farming 1 to 2 hours direct 2 to 4 hours, half direct 90% 90% twice a week rarely summer resort farming except three towns Middlesex ............................ 114,426 except two towns Monmouth .......................... 94,734 Morris .................................. 74,704 60 to 90 minutes 3 to 3y2 hours, not direct direct over 90% over 90% daily rarely commuting Passaic ................................. 215,902 40 to 60 minutes 2y2 to 4 hours, not direct direct over 90% over 95% daily rarely manufacturing commuting Somerset .............................. 38,820 One hour direct ly2 to 3 hours, part direct 90% 90% daily seldom commuting farming Sussex .........._..................... 26,781 2 to 2% hours direct 6 hours, not direct 90% 90% twice a week rarely farming Union .................................. 140,197 30 to 45 minutes direct 2 hours, direct 90 to 100% 90 to 100% daily rarely manufacturing commuting Two hours direct 3 to 4 hours, 2 places direct over 95% 95 to 100% weekly rarely farming Warren .............................. 43,187 except one town Reproduced from the Unclassified I Declassified Holdings ot tne National Archives Table compiled from information furnished by the banks of northern New Jersey, showing time of travel to New York City and Philadelphia, proportion of banking and commercial business as between New York City and Philadelphia, frequency of visits by bank representatives to New York City and Philadelphia, and character of population of the various Counties.
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