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BEFORE THE FEDERAL RESERVE BOARD.
In t h e M a t t e r o f t h e

DESIGNATION OF THE FEDERAL RESERVE
BANK IN DISTRICT No. 5.

REPLY BRIEF ON BEHALF OF THE RICHMOND
MEMBER BANKS OF FEDERAL RESERVE
BANK OF DISTRICT No. S.

EPPA HUNTON, J r .
AND

LEGH R. PAGE,

Counsel of Respondents.
■VIRBTTW
ADDIV60. IICHM
ONDW
L

BEFORE THE FEDERAL RESERVE BOARD.
In th e M a tte r o f th e

DESIGNATION OF THE FEDERAL
RESERVE BANK IN DISTRICT No. 5.

REPLY BRIEF ON BEHALF OF THE RICHMOND MEMBER BANKS OF FEDERAL
RESERVE BANK OF DISTRICT No. 5.
Before replying to the Brief filed by the petitioners in behalf
of the City of Baltimore, we respectfully direct the attention of this
honorable body to the fact that the Brief in behalf of Baltimore is
in disregard of Regulation No. 1 of the Federal Reserve Board in the
matter of procedure in appeals from the Reserve Bank Organization
Committee; first, it is filed “ on behalf of the citizens of Baltimore,”
whereas, Regulation No. 1 makes the majority of member banks
located in the city requesting a review the petitioners; and, second,
the Brief is filled with matter wholly new and not contained in the record
before the Organization Committee, whereas the said Regulation No.
1 provides that “ The Board will not hear testimony, but the parties
will be limited to the record before the Organization Committee.”
The Brief for Baltimore is in point of fact a presentation of her
claims on entirely different grounds from those originally relied upon.
While we do not make objection to consideration by this
honorable body of any new matter which Baltimore may desire to
present in the attempt to strengthen her case, it is manifestly
impracticable to reply fully within the time allotted to us, even if
permitted, to any new contentions, statements or statistics which
require on our part research, verification and the preparation of
counter statistics.
We respectfully submit, however, that we decline to be parties
to such violation of the rules of procedure laid down by this Board
and feel that it is expected of us that we reply to those parts of the
Brief only which refer to matters in the record before the Organiza

tion Committee. We submit to the Board what consideration it will
give to those parts of the Brief not in the record and will ourselves
cite certain instances only to show how unreliable are the statistics
contained therein.
In the statement of the RESERVE BANK ORGANIZATION
COMMITTEE relative to its decision determining the Federal Reserve
Districts and the location of the Federal Reserve Banks under the
Federal Reserve Act, the Committee gave its reasons at some length
for designating Richmond instead of Baltimore as the Federal Reserve
City for District No. 5.
The Committee’s reasons given in said statement are alternately
attacked in the Brief filed on behalf of the citizens of Baltimore as
based upon a misconception of the purposes of the act, or as inconsist
ent with the grounds upon which the selection of other Reserve Cities
was made, and finally inference is made unmistakably that the Com
mittee was actuated in designating Richmond by motives other than
those disclosed in its statement.
While we shall undertake to amplify the several positions taken
by the Committee in its designation of Richmond as a Federal Reserve
City of District No. 5, by giving additional facts in the record, we
deem it unnecessary to defend the Organization Committee from the
criticisms made against it.
As a preface to our reply, we respectfully call attention to the
fact that the Organization Committee named by Congress to perform
the difficult task of designating “ not less than eight nor more than
twelve cities to be known as Federal Reserve Cities * * # and shall
divide Continental United States, excluding Alaska, into districts, etc.,
etc.,” was made to consist of the Secretary of the Treasury, Secretary
of Agriculture, and the Comptroller of the Currency; that Congress
entrusted this work to this Committee knowing at least the incumbents
of two of such offices, and that the determination of this Committee
was reached after “ Every reasonable opportunity had been afforded
applicant cities to furnish evidence to support their claims for Federal
Reserve Banks; and that the majority of the Organization Committee,
including its Chairman and the Secretary of Agriculture, were present
at all hearings, and stenographic reports of the proceedings were made
for their deliberate consideration. Independent investigations were,
in addition, made through the Treasury Department, and the prefer-

enee of each bank as to the location of the Federal Reserve Bank with
which it desired to be connected was ascertained by independent card
ballot addressed to each of the 7,441 national banks throughout the
country which had formally assented to the provisions of the Federal
Reserve A c t; ’’ and, ‘‘Following its policy declared at the very outset,
the Committee refused to be influenced by the purely local and selfish
claims of cities or individuals, and discharged the duty imposed upon
it by Congress after exhaustive investigation and study of the entire
country, with unbiased minds and according to its best judgm ent.”
E xtracts from Statem ent of Federal Reserve Board, pages 361 and 365
of the record.
I t is a rule of law, generally followed in both State and Federal
practice, th at great weight should be given to the conclusions of trial
courts and m asters who have the opportunity of hearing the witnesses
testify, observing their capacity and acquainting themselves with
circumstances and surroundings not open to appellate courts, and that
such conclusions should not be set aside or modified except in cases
of palpable error and mistake.
F o r which reasons, and because of the character and qualifications
of the members of the Organization Committee to perform the task in
question, we confidently submit th at their decision should be affirmed
unless plainly wrong.
The contentions of Baltimore, as set forth in the Brief, are divided
under four principal heads, with an infinite number of subdivisions.
Baltimore has had several months to prepare this Brief. The
time, seven days, allowed the member banks of Richmond, within which
to prepare a brief in reply is too limited to admit of answer in detail
to the many theories and contentions advanced by Baltimore.
Reference to the synopsis of these contentions, which appears at
length in both the petition and the B rief of Baltimore, shows that they
are all variations of the same general idea. I t will be seen by inspec
tion of this synopsis that it is impracticable to reply to these conten
tions seriatim with any continuity of argument. They are too closely
inter-related, going back and forth from one heading to auother. ex
pressing but one central idea in different forms, all growing out of the
size of Baltimore. In reply, we shall, therefore, treat them as a whole.

4
At the outset, Baltimore takes exception to the fact tliat the Com
mittee did not first designate the Reserve cities and then proceed to
arrange the districts.
This position seems to be taken by Baltimore because the designa
tion of Reserve Cities is mentioned first in the act and upon the as
sumption that Baltimore would have, under such a course of procedure,
stood a better chance of being selected.
In taking this position, Baltimore arrays herself against what
must be admitted as the controlling purpose of the act, viz: that the
traditions, habits and common understandings of the people, as well as
the character and growth of industry and the banking connections of
the different sections of the country, to be divided into sections, re
quired the most careful consideration.
It is perfectly evident that the division of the country into districts
was far more important and complex than the designation of Reserve
Cities. The fact that certain large cities might be clearly marked out
in advance as proper locations for Reserve Banks in nowise modifies
this.
It is one of the admitted purposes of the act, a purpose admitted
in debate, to bring about financial local self-government as far as may
be consistent with stability and the general safety, to restore to normal
conditions financial movements and relations which have been artifi
cially built up by the old National Bank System.
To illustrate Baltimore’s conception of the purposes of the act,
we quote from its Brief, on page 70, as follows:
“ The principal purpose of Congress, however, in devising the addi
tion to an existing system was evidently not so much to improve con
ditions at ordinary times, as to provide a more satisfactory system in
times of stress.”
In the Brief of Baltimore, paramount importance is given to the
size of her population and the magnitude of her resources, without
taking into account the unfamiliarity of her people and her failure to
employ her resources with the balance of the district.
Incontestably, Baltimore is the largest city in population in the
district, and her banking resources greatly exceed those of any other
city, but it does not, therefore, follow, as Baltimore assumes, that she
is the natural commercial, industrial and banking center of the fifth

district; that all business in the fifth district naturally converges at
Baltim ore; and that in every essential respect, in commerce, finance
and industry, she is about five times as im portant as Richmond to
the F ifth District.
Upon this point, and upon the question of due regard to the custo
m ary course of business in the fifth district, the testimony establishes
Richmond’s superior importance to the district.
The determination of the location of the Reserve City of any dis
trict we deem to be prim arily a banking problem. This is not ad
mitted in terms in B altim ore’s Brief, but her argument is directed
chiefly toward this point of view as is indicated by the Synopsis of
P a rts 1, 2 and 3, which, as stated, is reviewed by us as a whole, having
regard only for those facts and principles set forth in, or germane to,
the record.
The Organization Committee states, on page 368 of the record,
that “ it should be borne in mind that the Committee could consider
prim arily only the statistics with reference to assenting banks. In this
section of the country, as in most others, the assenting banks were the
national banks.”
Baltimore, page 79 of Brief, also takes exception to this position,
and complains th at in determining the Reserve Cities all banking power
outside of the national banks was ignored by the Committee, and ad
vances the theory th at “ the new system is, on the contrary, intended
to constitute but the governing or regulating p a rt of a comprehensive
system embracing all banks.”
It is new doctrine th at the “ system ” will seek to regulate any
thing outside of itself.
Baltimore furnishes no proof whatever, and there is none, that
the Organization Committee in making its decision ignored all banking
power outside of national banks, and due consideration of that portion
of bank resources of the district, outside of the national banks,
entitled to most consideration, namely, State banks, would inevitably
lead to a decision in favor of Richmond.
In considering the power, operation and development of the sys
tem as a whole, it was natural, logical and essential to consider pri
m arily the present component parts, and, second, the banks likely to
come in it.

6
On page 21 of the Baltimore Brief, the division of her banking
power is given as follows :
Resources.
National banks ....................................... $114,973,000
State banks, trust companies and stock
savings banks .................................. 80,183,000
Mutual savings banks.............................. 102,708,000
Total .........................................$297,864,000
In the Comptroller’s annual reports the resources of the trust
companies of Maryland are given as $74,000,000, statistics for Balti
more not being separately given. It may be reasonably and safely
assumed that the trust company resources of Maryland are centered
in Baltimore, there being only three other cities in Maryland of more
than 10,000 inhabitants. It is certainly fair to Baltimore to assign
$70,000,000 or more to the trust company resources of Baltimore. The
limited time at our command does not enable us to ascertain the exact
figures.
The combined resources of mutual savings banks and trust com
panies are, therefore, approximately $172,000,000, or 58 per cent, of
the local banking resources.
Trust companies have a field of their own and it is hardly within
the limits of probability that many, if any, of them, considering the
regulations imposed upon commercial banks, will enter the system as
trust companies.
Mutual savings banks would not, of course, in the nature of their
business, become members.
In considering Baltimore’s banking resources with reference to the
Federal Reserve System, therefore, only the national banks primarily,
and the few State banks, secondarily, could reasonably be taken into
account, and, with these facts in mind, it is clear that the commercial
banking resources of Baltimore, particularly in relation to the fifth
district, are not of the potentiality which is claimed.
As a further fact illustrating the usefulness of this great portion
of Baltimore’s financial resources to the banking interests of the rest
of the fifth district, we call attention to the itemized statement of
resources on page 19 of the Brief, showing $128,000,000, or 43 per cent,
of the whole in “ investments, bonds, securities, etc.”

Therefore, since, in fact and theory, the location of. the Reserve
Bank is, in its essence, prim arily a banking problem, we shall proceed
to analyze the banking conditions and resources of the fifth district
and present evidence to show which city is in a position to perform
and is performing the greatest service to the district, with the maxi
mum of economy, and further showing that within a feiv years there
have grown up relations between Richmond and the larger portion of
the territory, so intimate and wide-spread, that the decision of the
Organisation Committee, after defining the area of District No. 5, could
not have been otherwise than it was without violating the economics,
as well as the physical and financial facts of the situation, and the con
venience and desires of those most intimately affected, as appears in
the statement of the Organisation Committee.
Baltimore contends, pages 89 and 90 of Brief, that the Organiza
tion Committee had absolutely nothing to do with the increase in the
growth of Richmond, and particularly with the ratio of increase. This
opinion is expressed in this language:
‘‘The Committee, however, properly had absolutely nothing to do
with increases as such. ’ ’
“ The Committee has to do with the present, not with the past,
or with dreams of the future. ’’
While it is proposed to refute the contentions of Baltimore with
the presentation of facts which relate to the present, this view is so
unsound th at it cannot go unnoticed and unchallenged.
In considering the operation of the system, it is futile to contend
that there must not be taken into consideration the vitality and growth
of certain component parts, and of outside interests most likely to be
come component parts, when such p arts have been progressing at a
rate which, if continued for a reasonable time, will completely overlap
Baltimore and Maryland. There is no other factor so strongly indic
ative of the trend of trade.
Analysis of the Banking Situation in the Fifth District.
In the fifth district there are, approxim ately:
National b a n k s ....................................................... 484
State banks .............................................................1,122

Total number of banks

1,606

8
Distributed as follows:
National Banks State Banks Total
Maryland ...................... 103
65
168
District of Columbia... 12
24
36
West Virginia ............. 117
162
279
Virginia ........................ 132
228
360
North C arolina............. 72
353
425
South C arolina............. 48
290
338
1,606
1,122
484
For convenience, and because of limited time to determine ac
curately, this includes the whole State of West Virginia, although a
very small part of that State is not in this district.
Of the number of banks, both State and national, there are in the
three States, Virginia, North and South Carolina, 1,123, against the
number in the rest of the territory, 483.
It is, perhaps, more than fair to Baltimore to assume that onethird or ninety-three of the West Virginia banks are in what may be
claimed as Richmond’s territory. As a matter of fact, out of 144 banks
voting in a poll taken by Richmond, seventy-five voted for Richmond
first and second choice, Baltimore not being the first choice of but four
of them. See Richmond Brief, page 46.
Therefore, it is obviously fair, and will answer every purpose of
the comparison, to say that in the territory which Richmond can serve
more quickly, coveniently, efficiently, and with greater satisfaction to
those served, there are 1,216 banks, as against “ Baltimore territory”
390 banks.
See Richmond’s Brief, page 46, and evidence hereafter adduced.
The ratio of 5 to 1 which Baltimore continually proclaims against
Richmond is nearly reversed here.
With due consideration to not only “ dreams of the future,” but to
reasonable probability of future development, it is not illogical to sug
gest that self-interest will in the near future incline Washington to
that field which offers the best prospect of profit in the use of her re
sources, which field certainly lies south of her and. with, which field she
is not at present familiar.
It is fair to treat Washington as neutral territory, but it will not
materially affect either the figures or the purposes of the comparison

here given, to allow Baltim ore’s claims to W ashington’s resources, al
though said claims are not supported by a single line of evidence.
In comparison with the ratio of growth of her own State as well
as with that of the city of Richmond and every State in District No. 5,
the national bank resources of Baltimore show a retarded growth, the
causes of which may well give her anxiety.
The fitness and the preparedness of Baltimore to become the Re
serve city of D istrict No. 5 is the vital point of issue raised by that
city.
If Baltimore desires this tribunal to know the volume and growth
of Baltimore banking capital and other m atters pertaining thereto as
the same are known to Baltimore lierself, we especially refer this
honorable board to the report of the Commission for the Revision of
the Taxation System of the State of M aryland and City of Baltimore,
pages 287 and 288, from which the following is tak en :
“ The Banking Conditions in Maryland.
“ Ten years ago the total capital in Maryland of national banks
was $17,050,000; in 1912 it was $17,607,000. This was an increase of
only $557,000, or 3 per cent., which compares most unfavorably with
other States.
“ Baltimore city has over two-thirds of the banking capital of the
State.
“ The following shows the changes that have taken place in the
amounts of capital, surplus and undivided profits in ten years in Bal
timore :
1903
1912
Capital ..............
$12,403,260
$11,790,710
Surplus ..............
6,514,400
7,970,010
1,532,060
2,082,787
Undivided profits
“ Compared with the increases of banking capital that have oc
curred in other States, the Maryland increase is far from satisfactory.
“ Innumerable requests have been made by the commercial inter
ests in Baltimore for increased credits and for a development of bank
ing facilities. Any person interested can receive sufficient assurances
that the business interests have not sufficient banking funds to success
fully carry on their business. This complaint is not exceptional, but

S)
general, and nearly all classes of business men who are large borrow
ers must have either Philadelphia or New York financial connections. ’’
The geographical relation of Baltimore to the banking resources
of the district is elaborately treated in the Appendix to the Baltimore
Brief.
The following statement will show in illuminating comparison the
real position which Richmond occupies to the banking resources now
in the system, and to those banks which may with reason be counted
upon as most likely to come into the system. The relative geograph
ical positions of Baltimore and Richmond on the map will be readily
carried in mind in examining these statements.
COMBINED STATEMENT OF NATIONAL AND S T A T E BANKS.
(As classified in the Comptroller’s Reports.)
I n t h e F i f t h D i s t r i c t , S h o w i n g C o m p a r a t iv e R e s o u r c e s
in

1902 a n d 1913.

This statement is made to show the concentration of resources of those banks in the
fifth district which now enter into and are likely to become apart of the Federal Reserve
System. Statistics of "State Banks” in the District of Columbia are not accessible.

Aggregate Resources.
1902
1913

Increase Per Cent.
Virginia (including
Richmond) ....... $ 94,728,000 $218,211,000 $123,483,000 130
North Carolina . . .
33,322,000 117,316,000
83.994.000 252
South Carolina ...
28,138,000
95,185,000
67.047.000 238
$156,188,000 $430,712,000 $274,524,000

176

West Virginia . . . . $ 73,454,000 $153,766,000 $ 80,312,000

109

Maryland (includ
ing Baltimore).. $123,613,000 $199,525,000 $ 75,912,000

Resources of national and State banks in Virginia, North
Carolina and South Carolina as above........................ $430,712,000
Add banks of West Virginia which voted for Richmond as
the location of Reserve Bank (see record).................
43,392;000

11
Total resources of national and State banks in the fifth
district of which Richmond is the natural and most
convenient Reserve City ............................................... ... 474,104,000
All other banks in W est Virginia (including that portion
not in the District, about one-eighth)......................... ... 110,374,000
Maryland (including Baltimore) ......................................... ... 199,525,000
W ashington and the District of Columbia being counted as neutral
territory.
When it is called to mind that within the area of resources desig
nated as Richmond territory there are, as hereinbefore sta ted :
National and State banks in num ber.................. 1,216
And in Baltimore territory only.........................
390
it is plain to see where, in the present operation of the system and in
its future development, violation would be done to the convenience and
customary course of business which are required to be regarded by the
act, if the Reserve Bank were located in Baltimore.
When to the foregoing are added the further facts that, even not
including that portion of West Virginia in which relations with Rich
mond are more close and convenient than with Baltimore, there are
in the three States—Virginia, North Carolina and South Carolina—
5,920,000 inhabitants in an area comprising 119,000 square miles,
against 2,950,000 inhabitants in the rest of the district in an area
covering only 30,000 square miles, it is easily seen that without indulg
ing in ‘‘dreams of the future, ’’ the inevitable development in the Rich
mond territory, possessing in overwhelming proportions all the factors
essential to any development—population, area, natural and financial
resources, number of banking institutions, all the factors which enter
into the transactions of mankind—it is easily seen how greatly Rich
mond is superior to Baltimore as the location of the Reserve Bank.
The following statements show the growth of banking resources
of Baltimore and the State of Maryland, as compared to the other
principal cities and States in District No. 5:
We do not think the figures need any comment, but will merely
direct the attention of your honorable body to Baltimore and Mary
land and Richmond and Virginia.

STATEMENT OF NATIONAL BANKS OF THE COUNTRY FROM
THE COMPTROLLER’S REPORTS.
S h o w in g R a t i o o f G r o w t h in C o m p a r is o n w i t h B a n k s i n t h e F i f t h
D is t r ic t , in

1902 a n d 1913.

Aggregate Resources.
n a t io n a l b a n k s in t h e w h o le c o u n t r y .

1902
1913
Increase Per Cent.
$6,114,000,000 $11,037,000,000 $4,923,000,000
80
n a t io n a l b a n k s i n

Maryland ................
Baltimore ................
Washington ............
District of Columbia
West Virginia (all)..
Virginia ..................
Richmond ................
North C arolina.......
South C arolina.......

1902
$30,575,000
82,019,000
27,661,000
1,975,000
33,751,000
38,220,000
16,730,000
18,865,000
13,724,000

t h e f i f t h d is t r ic t .

1913Increase Per Cent.
$ 56,989,000$26,414,000
86
110,896,00028,877,000
35
58,191,000 30,530,000
114
2,140,000
165,000
8.5
88,611,000 54,860,000
162
100,295,000 62,075,000
162
56,576,000 39,846,000
238
62,459,000 43,594,000
231
42,082,000 28,358,000
207

Capital, Surplus and Undivided Profits.
n a t io n a l b a n k s in t h e w h o le c o u n t r y .

1902
1913
Increase Per Cent.
$1,201,000,000 $2,046,000,000 $845,000,000
70
n a t io n a l b a n k s i n

1902
$ 7,474,000
20,415,000
5,111,000
577,000
6,792,000
8,238,000
3,725,000
5,021,000
3,436,000

t h e f if t h d is t r ic t .

1913
Increase P er Cent.
$10,277,000 $ 2,803,000
38
21,901,000
1,486,000
7.;
11,855,000
6,744,000 132
679,000
102,000
18
17,908,000 11,116,000 163
22,396,000 14,158,000 172
10,365,000
6,640,000 178
12,988,000
7,967,000 158
9,883,000
6,447,000 188

13
C o m b in e d S t a t e m e n t o f N a t i o n a l B a n k s a n d
C o u n tb y , as C la s s ifie d

R a tio

C o m p a r is o n

G row th

D is tr ic t fr o m

th e

STA TE

B anks o f th e

C o m p t r o lle r ’s R e p o r t, S h o w in g
w ith

B anks

th e

5 th

1902 t o 1913.
Aggregate Resources.

NATIONAL AND STATE BANKS OF THE WHOLE COUNTRY.

1902
1913
Increase
P er cent.
$8,423,000,000 $15,180,000,000 $6,757,000,000
80
NATIONAL AND STATE BANKS OF THE FIFTH DISTRICT.

M aryland (including B altim ore). $123,613,000 $199,525,000 $ 75,912,000
W est Virginia (all)
73,454,000 153,766,000
80,312,000
Virginia, (includ
ing Richmond).
94,728,000
218,211,000
123,483,000
N orth Carolina ..
117,316,000
83,994,000
33,322,000
South Carolina ..
95,185,000
67,047,000
28,138,000

61
109
130
252
238

Witli respect to the wishes of the banks of the district as to the
location of the Reserve City, Baltimore is satisfied neither that the
decision be left to the banks nor to the Organization Committee.
On page 83 of the Baltimore B rief the following ap pears:
“ W ith respect to the division of the country into districts
and the designation of Federal Reserve Cities, the act leaves
nothing whatever to the decision or vote of the member banks.
On the contrary, it leaves the m atter to be determined by the
Committee and the Federal Reserve Board, with due regard to
the customary course of business and without regard to State
lines. ’’
and on page 87, the following a p p ears:
“ The ‘one bank one vote’ method, which Congress refrained
from applying to the designation of Federal Reserve Cities, but
which the Committee professes so to have applied in the fifth
district, not only subordinates the interests of the country as a
whole to local interests, but also subordinates to the wishes of the
bankers in the district (i. e., the natioiial bank officers and
directors) the wishes of the owners of the banks (i. e.. the
stockholders) and the customers, (i. e., the general commercial,
industrial and agricultural public which deals with the banks).

14
The Committee itself, however, has not really been governed
to any substantial extent by the votes of the member banks either
in dividing the districts or in designating the reserve cities.”
In presenting the claims of Baltimore before the Organization
Committee at the hearing at Washington, Mr. Waldo Newcomber took
a different view of the value of the opinions of the banks in the district
concerned, as did Mr. Ingle who followed him on the stand. Great
importance was then attached to the views of bankers and merchants
in the argument made before the Organization Committee, and ten and
one-half of the fifteen pages of the Brief, afterwards printed in the
record, is taken up with extracts from letters from merchants and
bankers from Virginia, North and South Carolina, Georgia, Alabama,
West Virginia, and points as far west as Ohio, Illinois, Missouri, and
northwest to Minnesota.
Mr. Newcomber testified:
“ We have had a large number of letters sent to us, and within
as brief a time as a week ago today we sent out letters asking the
different banks and merchants in the South whether they cared
to express a preference for Baltimore. We have with us, actually
filed with our Secretary, some ten hundred and fifty letters which
are entirely irrespective of a very large number received from
various banks which have not been sent to the Secretary of the
Association, and which I personally know amount to four or five
hundred more, and they are coming in at the rate of one hundred
and one hundred and fifty a day. I just want to mention the fact,
which I think is interesting, that of the ten hundred and fifty-two
letters filed with the Secretary of the Association, seven hundred
and fifty-two express a decided preference for Baltimore as their
first choice, and two hundred and eighty-two state that they have
committeed themselves to some town in their locality, presumably
for patriotic reasons, and if they cannot get it there they would
like to see it in Baltimore.”
Mr. Ingle, following Mr. Newcomber on the stand, went at great
length into the preference that bad been expressed by various com
munities from Florida on the south to Maryland on the north for
Baltimore as a Federal Reserve Bank.
As long as Baltimore thought the bankers and merchants preferred
her, it was a convincing reason why she should be named, but when
the duly authorized agents of the banks and banking associations of

15
these sta te s spoke, and after the poll had been taken by the Federal
Reserve Board, the preference of bankers is no longer worth consider
ing, and their choice, which Baltimore had striven unsuccessfully to
gain, is belittled, and declared to be of a “ sentimental character, and
evoked by campaigning methods. ”
Baltimore contends that she is nearer, in point of time, to the
greatest volume of national bank resources in the fifth district, and
gives the result of computations to prove this in Appendix B, Page 121
of the Brief.
We have been unable in the time at our disposal to test the accuracy
of these tabulations except in one or two instances, which do not agree
with the information at our command.
The principle upon which the final result is computed we believe
to be wholly fallacious.
In considering which of two places is nearer to the centre of
resources of a district with the purpose of determining which is more
conveniently located with reference to the rest of the district, it would
appear that the resources of each city itself, in turn, should be excluded
from the computation.
In other words, the issue would properly seem to be whether
Baltimore is nearer to the centre of resources of the rest of the terri
tory including Richmond, or whether Richmond is more accessible to
the rest of the territory, including Baltimore.
The Brief for Baltimore, however, takes into account Baltimore's
proximity to her own resources, which are placed at zero in point of
time, and while the same rule is applied to Richmond, Baltim ore’s
whole resources being larger than those of Richmond, ap p aren tly turn
the scale in her favor.
Deducting in the case of each city the resources of that city, which
obviously is the correct method, would reverse the result.
Baltimore would then stand, according to her tabulation, at some
average point of time between one-half hour and thirty-four and onehalf hours within reach of $453,000,000 resources, while Richmond
would within the same time be in reach of $516,000,000.
Again,— Richmond is within V. hour to 14V« hours of $473,000,000
resources, while Baltimore can reach only $380,000,000 resources within
these periods.

16
On the other hand, when it comes to distant points, Baltimore is
15V2 to 34Vo hours from $72,000,000 resources, while Richmond is thus
distant from only $42,000,000 resources.
The mean distance (hours) of Richmond from $122,000,000
resources which must take in Baltimore is stated by Baltimore as 5%
hours, and her distance from $66,000,000 resources which must include
the District of Columbia, is set down at 4V2 hours.
The actual average time of six trains daily carrying mail from
Richmond to Washington is three hours seven minutes. This is an
error in computation on the part of Baltimore of one hour and twentythree minutes, or 44 per cent.
In the case of Baltimore, apparently 5% hours mean distance
in the tables, taking the time from Washington to Baltimore at one
hour thirty minutes, as given by Baltimore, the actual average time
from Richmond to Baltimore would appear to be four hours thirtyseven minutes, an apparent error on the part of Baltimore of 53
minutes, or 19 per cent. These corrections would operate on at least
$170,000,000 resources in favor of Richmond against $51,000,000 in
favor of Baltimore.
In the same manner Baltimore lays claim to being nearer than
Richmond to $18,000,000 national bank resources in Virginia, but
gives Richmond a closer proximity to $30,000,000 national bank
resources in West Virginia, and of course to all the bank resources
of North and South Carolina,—Appendix A.
These tabulations comprise 17 pages of the Baltimore Brief, and
are therefore treated here at length because of the importance which
is apparently attached to them.
In their bearing upon the questions at issue these tables, even if
correct, and not arbitrary and fallacious in method of computation,
are not comparable in value to the statements presented by us
indicating the distribution of bank resources by States of the district,
the number of institutions, comparisons in growth, area, population,
material resources, etc., and the relative position of Baltimore and
Richmond to all these factors.
In this connection, the Brief for Baltimore, page 51, makes this
surprising statement:

17
“ Practically the whole district being within one business day
of either Baltimore or Richmond, the question of distance
obviously becomes immaterial. ’’
“ The exact hour in the day at which a mail transaction is
consummated is unim portant.”
I t is well known among bankers th at if mail arrives, or transactions
are consummated after Clearing-House hours, which usually occur early
in the day, it means the frequent loss of a banking day.
The mean distances, measured in time, in the Baltimore tables,
cannot, therefore, be given the value assigned them. The hours of
arrival of mails enter into the question in a vital way.
The overwhelming volume of bank mail is dispatched after banking
hours, and in the case of the smaller banks particularly, usually at a
very late hour in the day.
A difference of a very few hours in the arrival of mail at any
point will and does often make the difference of a banking day.
The course of the mails is not alone to be considered in this con
nection, for it is to be assumed that representatives of the member
banks will be compelled in the ordinary course of business to make
frequent visits to the Reserve Bank. I t would be a m atter of great
consequence to many bankers to lose the ten hours of time between
Richmond and Baltimore and return. Upon the point of convenience
and time in consummating bank transactions, we respectfully refer to
the testimony of the witnesses from North and South Carolina at the
hearing before the Organization Committee in Washington, to which
reference is made, in another connection, hereafter. Reference is also
made to the two maps accompanying this Brief, one showing the centre
of the national bank resources, the centre of production and the centre
of population of D istrict No. 5, and the other the mail advantages of
Richmond over Baltimore.
Having due regard, therefore, to the convenience of those who
transact the business, as well as to the customary course of business,
we maintain th at Richmond is the most convenient and suitable place
for the Reserve Bank of District No. 5.
On page 16 of the Baltimore B rief the statement is made that
“ Richmond has no exports or im ports at all,” and on page 74 the

18
statement is made that Baltimore “ creates foreign exchange from the
export of grain and similar products alone amounting to over
$40,000,000,” and reference back to page 16 is made.
The inference appears to us to be made that Richmond handles
no foreign exchange. While there is no direct evidence in the record
on this point as to Richmond, we could, if permitted, readily present
evidence to show that a very large volume of business is transacted in
Richmond which creates foreign exchange, which exchange is now
being handled by Richmond member banks.
This foreign exchange is relied upon to furnish a considerable part
of the business of the Reserve Bank, if located in Baltimore.
Practically all of the foreign exchange made in Baltimore, as
testified by witnesses at the Washington hearing, page 787, is sold in
New York, where it can continue to be sold.
Among other inaccurate statements in the Baltimore Brief there
are two under the heading “ Agriculture,” pages 8 and 9. These give
statistics not in the record. In refuting these statements without
violating the rules laid down by this honorable body, we refer to a
letter from Smyth Bros.-McCleary-McClellan Co., submitted with
hundreds of other documents accompanying the Brief for Richmond,
a part of the record, showing that of two items, horses and mules, in
which she is credited by Baltimore with no business, Richmond handles
more in a month than Baltimore handles in a year.
With reference to Richmond as a distributing point involving
railroad communications, we respectfully refer to page 17 of the
Richmond Brief showing the selection of Richmond as the best
distributing point on the Atlantic Seaboard next to New York.
This brings us to one of the most important factors in determining
the supremacy of any city in a given district,—the m atter of freight
rates.
Mr. Waldo Newcomber, at the hearing in Washington, made the
following statement:
“ Baltimore is unequalled among the eastern and southern
cities of the country. Freight rates are the prime factors in the
purchase and sale of commodities, and in shaping the normal flow
of trade in commemal and manufacturing centres enjoying the

19
advantages of freight rates lower than those established. * * *
Lower freight rates are granted Baltimore, not arbitrarily, but by
virtue of her position in the apex of that favoring curve of the
Atlantic Coast which reduces to a m aterial extent the distances to
and from other eastern p a rts.” Pages 721 and 722 of testimony
taken before the Organization Committee.
In a statement prepared by Mr. W. T. Reed, President of the
Chamber of Commerce, of Richmond, filed as p a rt of the Brief on
behalf of the Committee representing Richmond before the Organiza
tion Committee, the following a p p ears:
“ The railroads serving the above-mentioned territory years
ago recognized Richmond as the proper distributing point, and the
above as the natural territory to Richmond, owing to the fact that
they were enabled to give quick service, and from one to four days
quicker delivery than Baltimore, or any city north of us. In view
of this fact the rates into this territory were fixed at an average
approximately of thirteen per cent, lower than Baltimore. The
average first-class rate in the territo ry designated by the railroads
as the natural territory to Richmond is 75.2 cents per hundred
pounds, while the average first-class rate to the same territory
from Baltimore is 86.4 cents per hundred pounds, giving Richmond
as advantage on the first-class rate of 11.2 cents per hundred
pounds, or approximately 13 per cent. This relative proportion
in favor of Richmond applies to class and commodity rates, and,
in some instances it is greater in favor of Richmond.”
We also refer to the map, page 41, of the Richmond Brief, showing
Richmond’s “ Preferential Freight Rate T errito ry ,” embracing the
greater portion of the area now in the fifth district.
It is significant that in the Brief filed on behalf of the citizens of
Baltimore no further mention is made of the fact that “ Freight rates
are prime factors in the purchase and sale of commodities, and in
shaping the normal flow of trad e.” In this respect, therefore,
Baltimore must be considered as having abandoned her claim.
The Brief of Baltimore makes the repeated statement that
Richmond recognized the preeminence of Baltimore in any territory
including both cities, page 26 of the Brief, and that “ others from
Richmond itself evidently realized that Baltimore is the natural capital
of any district in which Maryland is the most northern State.” Page
58 of Brief.

The letter of the Richmond Committee, transmitting its Brief to
the Reserve Bank Organization Committee, clearly sets forth Rich
mond ’s position as to the inclusion of Baltimore and Maryland in the
district. This letter, doubtless through oversight, is not printed in the
record and it is, therefore, appended to this Brief.
Again, it is claimed that the banks of the district in voting did not
understand that the district to be determined upon might include Bal
timore as well as Richmond.
For a complete refutation of these unfounded claims, we respect
fully refer this honorable body to the Brief filed on behalf of the North
Carolina Bankers’ Association, by George A. Holderness, president,
page 315 of the record, laid before the Senate by the Reserve Bank
Organization Committee, to the testimony of various witnesses who
appeared before the Reserve Bank Organization Committee at Wash
ington and to the poll of votes on page 46 of the Richmond Brief. The
following are extracts taken from the Brief of North Carolina:
“ When before the Committee in Washington on the fifteenth
of January, Mr. J. W. Norwood, of Greenville, S. C., and Mr. R. G.
Rhett, of Columbia, S. C., stated that Maryland should be added
to the district outlined by the Richmond Committee, and from
further study of the question it appears that this should be done,
as well as all of West Virginia. And it is believed that this can be
done without in any way interfering with the natural territory of
any other district, since it appears to us that the North Atlantic
States should be divided as follows:
“ Maine, New Hampshire, Vermont, Massachusetts, Rhode
Island, and the eastern part of Connecticut, with Boston as the
Reserve City.
“ New York, western Connecticut, northern New Jersey, with
New York as the Reserve City.
“ Pennsylvania, southern New Jersey, and Delaware with
Philadelphia as the Reserve City.
“ This leaves Maryland in the nature of a ‘floater.’
“ With this added territory our district would embrace the
following States: Maryland, Virginia, West Virginia, North
Carolina, South Carolina, Georgia, Florida, the eastern part of
Tennessee, the eastern part of eastern Kentucky, and the District
of Columbia. This territory, with its diversified interests and
banking capital, would be entirely independent and amply selfsustaining under not only normal conditions, but under almost any
conditions.

21
“ Now, with this territory fixed upon, the next question is which
city within this territory could best serve the whole territory, On
this point we respectfully submit that Richmond is unquestionably
the city. Ninety-one per cent, of the banks in North Carolina,
including all of the national banks except six, have already
expressed themselves in favor of Richmond, and the banks so
desiring Richmond represent 89 per cent, of the capital, surplus
and profits of all the banks in North Carolina, and 98 per cent, of
their deposits. Of the said 91 per cent, of the banks voting for
Richmond, 373 of them are expressly for Richmond as first choice,
and the balance of 69 (except three for Baltimore) are equivalent
to a first choice, as they name Charlotte or blank as their first
choice.
“ Not one of the North Carolina banks has expressed a first
preference for A tlanta or Washington, and only three for
Baltimore. South Carolina has expressed its preference for
Richmond almost as strongly as North Carolina, and has given
A tlanta only two first choice votes and Baltimore one.
“ The States of Virginia, North Carolina and South Carolina,
with national banking capital and surplus of $48,000,000, are as
unanimous for Richmond as the same number of institutions can
be for any one thing. * * *
“ As stated by Colonel Bruton when before you in Washington,
it is important to have a sufficient amount of currency within easy
reach of the tobacco, cotton and peanut sections of North Carolina,
and this may be said of South Carolina and the more distant
southern points. As shown by the time-table filed with the
Richmond Brief, currency wired for from Richmond in the
evening can reach the greater portions of this territory by business
hours the next morning.
“ Richmond, as stated by Mr. Norwood when before you in
Washington, is practically one business day nearer the m ajority
of this territory than Baltimore is. ’’
W itnesses appearing before the Reserve Bank Organization Com
mittee at W ashington testified as follows:
Mr. Geo. A. Holderness, of Tarboro, N. C .:
Secretary of the Treasury: “ I may have missed something
you said while I was reading. Is it your observation that the
course of trade is with Richmond, instead of Baltimore?”
Mr. Holderness: “ Absolutely, sir. About, twenty years ago
I was a traveling man from Baltimore. I noticed that there were
a great many lines of goods that Baltimore sold at that time

almost entirely. Now they have no representative in that line.
Heavy groceries, heavy drygoods and domestics. Richmond has
almost shut them out.”
Mr. J. Elwood Cox, of High Point, North Carolina, testified:
“ I think Richmond is the only city that could be familiar with
the three great lines in North Carolina,—cotton, peanuts, and
tobacco.”
He testified fu rth er:
“ I simply want to emphasize the fact that the bankers of
North Carolina, as I see it, very much prefer Richmond, because
all of our trade, or practically all of it, is with Richmond. We have
accounts with other northern cities, but 95 per cent, of the banks
of North Carolina, I think, keep accounts with Richmond. I doubt
if 25 per cent, keep accounts with Baltimore. ’’
Secretary of the Treasury: “ To what extent would you have
to keep accounts with otL -r cities assuming that Richmond was the
Reserve Bank of this district! To what extent, after the establish
ment of such a bank, would you have to keep balances in other
cities, like New York, Philadelphia and Baltimore?”
Mr. Cox: ‘‘Naturally we would keep some in New York. ’’
Col. John F. Bruton, of Wilson, N. C., testified:
“ Our banks in the eastern part of the State deal almost
exclusively with the producers, the farmers, and speaking for
Wilson, N. C., Rocky Mount, Kinston, Greenville, and two or three
other points, we handle quite a large volume of tobacco, and have
to pay for a great deal of it with money—currency— and on that
account a convenient point from which to get the currency is
extremely important with us. If we cannot get the currency it
would close up our institutions and destroy our markets. F or
tbat reason our people are intense in their desire to have their
Regional Reserve Bank located in Richmond.”
Secretary of the Treasury: “ Where do you get most of your
currency now?”
Mr. Bruton: “ We get it from Richmond and Norfolk.” * * *
Secretary of Agriculture: “ Is it your impression that the
business in North Carolina, the banking business, is related to
Richmond more than to any other place?”

23
Mr. B ruton: “ Yes, sir, I feel so, Mr. Secretary, and I feel
like we would be a little away from home to take us to Baltim ore.”
Mr. J . C. Brown, of Raleigh, N. C., testified:
“ I came really representing the State of North Carolina
rath er than Raleigh, Mr. Secretary. * * * The best I can do, I
think, is to reaffirm what has already been stated about Richmond,
its ideal location, midway between the North and South, and its
intim ate relations with both sections. The fact that Richmond,
already known to our people, knows their needs, knows the condi
tion of our crops, knows the character of our people, so that there
need be no delay, not only in the shipping of currency back to us,
but in the passing on our paper. They are thoroughly familiar with
th at because they have been lending money to North Carolina for
a long time, and we believe that they would be able to serve our
people more advantageously than any other point which could be
nam ed.”
We feel that in no way can our Brief be better strengthened than
by annexing to it the statement made by the Reserve Bank Organization
Committee, accompanying its designation of the Federal Reserve
D istricts and the Federal Reserve Banks, so far as it deals with the
fifth district.
I t is earnestly maintained that the decision of the Reserve Bank
Organization Committee is in accordance with the terms an<i spirit of
the act, and is sustained by the record, and that its decision should be
affirmed by this Board.
T he F ir s t N a tio n a l B a n k ,
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24
F rom

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2 d , 191 4 , P age 367

eport

S en ate.

“National Bank Statistics.
“ For States of Texas, Virginia, Maryland, Georgia, Louisiana and
Mississippi as of March 4, 1914, according to sworn reports made to
the Comptroller of the Currency:
Area
Population
sq. miles.
Census 1910.
Texas, including Dallas................ 265,780
3,896,542
Virginia, including Richmond__ 42,450
2,061,612
Maryland, including Baltimore... 12,210
1,295,346
Georgia, including Atlanta.......... 59,475
2,609,121
Louisiana, including New Orleans 48,720
1,656,388
Mississippi .................................. 46,810
1,787,114
Capital and
Surplus.

Individual
Deposits.

Loans and
Discounts,

State of Texas, including
Dallas ................................ $76,785,584 $197,663,338 $215,114,326
Virginia, including Richmond 29,732,696
90,887,858 107,410,063
Maryland, including Balti
more .................................. 28,267,876
83,217,876
91,136,942
Georgia, including A tlanta... 24,479,345
51,382,061
61,852,579
Louisiana, including New Or
leans ................................. 12,128,866
32,000,521
34,804,354
Mississippi ............................
5,168,192
17,045,324
18,669,200
“ From the above statement it will be seen that in each item, capital
and surplus, individual deposits, and loans and discounts, the national
banks of Virginia, including Richmond, largely surpass the national
banks of Maryland, including Baltimore.
“ The capital and surplus of the national banks of the State of Vir
ginia are 60 per cent, greater than the capital and surplus of the na
tional banks of the States of Louisiana and Mississippi combined,
including the city of New Orleans, while the loans and discounts by the
national banks of Virginia are more than three times as great as the
loans and discounts in the national banks of Louisiana, including New
Orleans.

25
“ While the capital and surplus of the national banks of Georgia
largely exceed the combined capital and surplus of the national banks
of the States of both Mississippi and Louisiana, the loans and discounts
made by the national banks of Georgia exceed by $13,000,000 the loans
and discounts of all the national banks of Louisiana and Mississippi
combined, including the city of New Orleans.
‘ ‘The capital and surplus of the national banks of Texas amount to
four times as much as the capital and surplus of the national banks of
the States of Louisiana and Mississippi combined, and the individual
deposits in the national banks of Texas also amount to about four times
as much as the individual deposits of all the national banks in Louisi
ana and Mississippi, the only States from which New Orleans received
as much as half a dozen votes as first choice as the location for a Fed
eral Reserve Bank.
“ In the poll of banks made directly by the Comptroller’s office,
Richmond received more first choice ballots than any other city in the
district—167, against 128 for Baltimore, 35 for Pittsburg, 28 for Colum
bia, S. C., 37 for Cincinnati, and 25 for Washington. Of the remaining
21,19 were for Charlotte, N. C., and 2 for New York. Leaving out the
States of Maryland and Virginia, Richmond received from the rest of
the district three times as many first choice votes as were cast for
Baltimore.
“ D istrict No. 5 is composed of the States of Maryland, Virginia,
W est Virginia (except four counties), North and South Carolina, and
the D istrict of Columbia. These States have always been closely bound
together commercially and financially, and their business dealings
are large and intimate. The reports made to the Comptroller of the
Currency on March 4, 1914, by all the national banks in each of these
States, show in every essential respect that the business of the national
banks of Virginia, including Richmond, is greater than the national
banks of Maryland, including Baltimore, or any other of the five States
embraced in D istrict No. 5, as appears in the following table:

26
Capital, Surplus and Loans and Total IndividUndivided Profits. Discounts, ual Deposits.
Virginia .......................... $33,544,631
$107,410,063
$90,887,858
Maryland ......................... 32,390,057
91,326,942
83,217,376
West V irginia.................. 18,209,326
56,789,538
61,421,332
North C arolina................ 13,527,086
44,051,033
36,051,154
South C arolina................ 10,332,439
28,860,456
23,330,916
District of Columbia........ 12,685,411
26,253,432
29,520,053
1‘Advocates of New Orleans have criticized the decision of the
Organization Committee, and have given out comparative figures as to
New Orleans, Richmond, and other cities which are incorrect and mis
leading. An analysis and study of the actual figures will be found
instructive and can lend no support to the claims of New Orleans.
“ From the sworn special reports recently submitted to the Comp
troller of the Currency, it appears that the national banks in Richmond
were lending in the thirteen Southern States, on January 13,1914, more
money than was being loaned in those States by the national banks of
any other city in the country except New York. The total loans and
discounts in the thirteen Southern States by the four cities referred to
are as follows:
Richmond ............................................... $33,473,000
Baltimore ...............................................
6,891,000
New O rleans........................................... 19,477,000
Washington ............................................
915,000
“ The figures also show that in those portions of District No. 5, outhide of the .States of Virginia and Maryland, the Richmond national
banks art* lending twice as much money as all the national banks in
Baltimore and Washington combined. They also show that, although
Richmond is not a reserve city, the banks and trust companies in the
thirteen Southern States had on deposit in the national banks in Rich
mond on February 14,1914, $9,876,000, or slightly more than the banks
in this section had on deposit in the city of Baltimore, and four tiroes
as much as they carried in Washington, although these two cities have

27
long enjoyed the benefits of being reserve cities. That southern hanlm
should carry larger balances in Bichmond, where they could not be
counted in their reserves, rather than in Baltimore or Washington,
where they conld be counted, is suggestive.
“ The figures show that the capital and surplus of all reporting
banks—national, State and savings and trust companies—per capita
in Bichmond as of June 4,1913, was $131; in Baltimore, $85; in Wash
ington, $88, and in New Orleans, $60, while the loans and discounts
made by all banks and trust companies in Bichmond, on the same date,
amounted to $393 per capita, against $190 in Washington, $213 in Bal
timore, Mid $194 in New Orleans.
“ The amount of money which banks and trust companies in the
various parts of the country carried on deposit with Richmond—a non
reserve city—on February 14,1914, amounted to $10,970,000, or nearly
twice as much as the balances carried by outside banks with the na
tional banks of Washington, which on the same day amounted to $5,516,000, and one and a half times as mucb as they carried on the sain*day with the national banks of New Orleans, a reserve city.
“ The statistics furnished the Organization Committee show* that
on March 4,1914, the capital and surplus of the national hanks of Rich
mond, per capita, amounted to more than twice as much as the capital
and surplus, per capita, of the national banks of either Baltimore or
Washington, and three and a half times as much as New Orleans, while
the individual deposits of the national banks of Richmond amounted to
$201 per capita, against $86 for Washington, and $76 for Baltimore,
and $50 for New Orleans. The loans and discounts in the national
banks of Bichmond on the same day were reported at $279 per capita,
against $77 for Washington, and $108 for Baltimore, and $51 for X»*w
Orleans.
“ Especially significant art' the following statistics showing t! i>
growth in capital and surplus, loans and discounts and individual de
posits of national banks in the three cities named :
Capital and Surplus.

Bichmond ..
Washington
Baltimore ..
New Orleans

September,
1904.
$ 3.115.000
<>,215.000
18,2*2,900

6,250,000

March. Increase
1914. Per Cent,
$ 9,914.392
199
11.365.000
19,205,900
5
6.773.000
8

28
Loans and Discounts.
Richmond................................... $12,946,000
W ashington.................................15,018,000
B altim ore................................. ...48,755,000
New O rlean s........... ................ ...20,088,000

$35,593,000
25,405,000
60,312,000
17,285,000

175
69
23
*13

Individual Deposits.
Richmond................................... .$11,257,000
W ashington.................................20,017,000
Baltimore ....................................40,910,000
New O rlean s...............................19,425,000

$25,705,000
28,491,000
42,553,000
16,857,000

128
42
4
*13

“ In other words, the figures show that the national banks of
Richmond were lending on March 4, 1914, twice as much money as all
the national banks in the City of New Orleans, and 40 per cent, more
than all the national banks in Washington.
“ In the original decision of the Committee the various economic
and other factors which entered into and determined the Committee’s
action were enumerated and need not be repeated here. This state
ment is made for the purpose of disclosing some of the details which
influenced the Committee^ findings.”
* Decrease.

COMMITTEE ON LOCATING FEDERAL
R ESERV E BANK IN RICHMOND
R ic h m o n d ,

Va., February 17,1914.

COPY.

Honorable Reserve Bank Organization Committee,
Washington, D. C.
Sibs : We respectfully transm it to you herewith our argument for
a certain territory as a Reserve District with Richmond as the location
of a Federal Reserve Bank.
In preparing our brief it has been our purpose to outline a well
defined natural division of country as a logical zone requiring few
branch banks, which we hold to be desirable.
We are fully aware that the location of the Federal Reserve Banks
demands consideration of the various zones in their relation to each
other, and that final determination must be in the interest of the coun
try as a whole, and that in respect to the situation as a whole, the
Committee is now in possession of more complete information and a
fuller comprehension than we can possibly have. Therefore, we recog
nize that this consideration may involve some modification or enlarge
ment of the zone which we have presented, and that it is the problem
and the province of the Committee to make such adjustments. But we
are convinced that no zone can be formed having the headquarters of a
bank in the South Atlantic States which does not include all or a large
p a rt of the proposed territory.
We also believe that it must and will be recognized that the Fed
eral Reserve System is essentially a branch banking system, with sev
eral heads instead of one, the whole co-ordinated by the Federal
Reserve Board, a fact which apparently is not generally or fully under
stood at the present time.

30
The law demands a territorial distribution of the parent banks,
and the exigencies of the situation will necessarily leave many impor
tant sections, and many important cities in those sections, to be served
by branch banks.
We have, as we believe, conclusively shown that Richmond can
best serve the whole zone mapped out by us better than any other city
in it or any city north of it, and that Richmond is the decided choice
of the banks in the larger portion of this zone.
It would not impair the integrity of our argument to have certain
territory added to it either at the north or at the south.
It is difficult, we believe, to establish a strong zone in the South
outside of the zone we have mapped out, with due regard to conveni
ence and trade relations, and yet the South is such a rapidly developing
section that within a few years, if not at present, it can justly claim and
its interests may demand another Federal Bank.
The State of Alabama, with its iron and steel interests, must within
a few years become second only to Pennsylvania in those industries.
The northern half of West Virginia, the District of Columbia, and
Maryland might, we believe, with benefit and in the general interest be
included in the zone, to be served by a branch bank in Baltimore, since
the Baltimore & Ohio Railroad ties that section intimately with Balti
more, just as the railroads in the zone presented tie together the States
in that zone.
Transactions of banks in that section with the parent bank might
be carried on entirely through the Baltimore Branch, which could, be
yond question, serve that city and section with complete efficiency and
to advantage, although the whole section is within twelve hours’ com
munication with Richmond.
The zone as a whole would, of course, be greatly strengthened
financially.
About $3,000,000 of capital and $9,000,000 in deposits would be
added to the Federal Bank.
The banks in the entire zone mapped out by us would, we believe,
be overwhelmingly in favor of it, with Richmond as the location of the
Federal Reserve Bank.

31
P a rt of the minority of banks in the zone which did not vote for
Richmond appeared to favor Baltimore only because they believed that
the inclusion of that region would strengthen the zone financially, while
they recognized the superior advantages and convenience of Richmond
as a location, and the more intimate and extensive relation of Richmond
to the zone, Richmond also having the great additional advantage of
being one banking day nearer to a large majority of the banks in the
zone, an economic consideration in itself of such importance as to be
conclusive.
Respectfully submitted,
G e o k g e J. S e a t ,
In behalf of the Committee
representing Richmond.

ir>

RICHMOND POLL OF BANKS
Choice; Va.

Richmond

Columbia

N.C. S.C. W.Va.jTenn. Ky.

1st
2d

' 415
J

373
69

:..........................

1st
2d

82
122

49 i 25
26
10
3
II

Ga.
4
56
12

Fla. j Totals
4 952
12 ; 305 1335
5 1 78

.... :......i 102'

102

111

3d
Atlanta

Savannah

liirrmnshain

112)

1st
2d

1st

25)
41

2d
3d

1st
2d

3d
Baltimore

1st
2d

.........
4

...

3d
1st
2d
3d

1
6

55
I
10

11
1

...

---------- -----Ciiicinimii

1st
2d

3d
Louisville

1st
2d

6 :

.... 93

ft
fi

2
1

............
............ ...; 42

31
14 ........

1st
2d

3d
Nashville

1st
2d

.................................
j ........................

3d
Pittsburg

1st
2d

104

3d
Jacksonville

163

3
1

.............................

,
“

102

5fi

^ ... -S
POLton d n w * ph.4t t ;nc
Ricwmcnd v»
47

c ™

, s ™

1TS OK BANKS

, PROFITS ANO =
VOTING FOR RICHMOND

STATIC

t ’lmiw

( aintal

_____

* „, pl»s ami '
Profits

l)(,posits

Virginia

1st

*30.011.IW7

S23.151.500

S163.645.126

Nuitli <':H"liri:i

1st
2d

$14,542,770
2.203.1«i

s 7.S44.000
1.252.HOO

S SI .<106,050
8.100,000

Smith Carolina

1st
2d

s +.;Hivi.sfKi
5.20'.1.71-1

X 2.900.000
2.753.800

S 18,743.000
8.058,000

( Icni 'ii.i

1st
2.1
3*1

730.300
5.334.00O
570.000

278,000
3.482.2IX)
653.000

538,000
19,147,500
1,412.000

Florida

1st
2.1
3.1

320,000
1.895,000
245.000

74.000
586.000
262.000

1,690,000
5,676,000
2,353,000

W.-st Virginia
. n; c v . .

1st
•'.1
3d

§ 2.561.000
2,90(1,175
350,000

S 1,041,000
1.85(1.000
35,000

$ 4,084,000
12,775,000
597,000

•I',.,,,,,.,,.,.
'10 f'os.)

1st
2.1
3<l

908,350
547,500
1.075.000

423,300
234,000
350,000

8 6,041.000
2,379,000
5,664,000

Krntuckv
i.% Cw.)

2.1
3«1

450,000

5,725,000

118,000
3,113,372

$80,587,700

$52,085,172

Total <'a|>it:il. Surplus and Profits.
Total Deposits.................................

1,502.000
17,140.000

*361,631,276

$132,672,878
361.631,276

MMUBM*
r^*»
o

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Cantar of A/ofions/ Bank r^e sources
Certs r o f f^roducfion

Wore
tf •■:■? . ryip

Cerfter of Pb/DC/lotion
K?

r? -cea
* o - occc. ~t o* F*,n *v-idle. no-'
te/rtj rc/uded m >£’* E/slnct

Note !
/n each case centers y o r 5 rates ~ere toKen orMnr,/y.
/e Aterf/ortc/ a/ Bo'timore
2 ? 'S / n e t o f C o / « m b / Q
tfe stV /ry w a
V /rjw e
M rtoC art/ina
South Carolina

a / Waaib/srpto/r

+ 0 w / & s M E . * C A a r/ssStn
3£ ~tvi/es W

o f K /c b m o rrS

3 0 m ,le i 3W . o f f?a le ,# 4
m t/es M S

^ o m th e e e o e s u m a j

o f-C o fa m b /a .

centers, M e V / e t r / c t c & f e r a

nrcre worked o u t £>y <j-r op/ 7 ,c 'S t a t i c s

B Q LTO N j C L A t? K E :$ ~PRATT
~F?IC/7I770/7C{
Vi,rg/m a .
■Sept.S+JQ/j.

Full text of Records of the Federal Reserve System, Record Group 82 : #116 Reply Brief on Behalf of the Richmond Member Banks of the 5th District, Box 2662, Folder 3

FRASER