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Reproduced from the Unclassified / Declassified Holdings of the National Archives
BEFORE THE FEDERAL RESERVE BOARD.
In th e M a tter o f the
DESIGNATION OF THE FEDERAL RESERVE CITY
IN THE FIFTH FEDERAL RESERVE DISTRICT.
BRIEF ON BEHALF OF THE CITIZENS
OF BALTIMORE.
^
EDGAR H. GANS
AND
CHARLES MARKELL
(O f Gans & Haman),
Counsel for Regional Reserve Bank
Committee of Baltimore.
K i n g B b o s ., P b i n t e b s , 413 E . L e x i n g t o n S t ., B a i / fo ., Md.
Citizens* Committee
Hon. James H. Preston,
C h a ir m a n .
Hon. Phillips Lee Goldsborough.
F. J. LaMotte.
Albert H. Wehr.
Dr. A. R. L. Dohme.
Samuel Rosenthal.
Charles A. Webb.
Asia B. Gardiner, Jr.
W. W. Cloud.
Eugene Blackford.
H. A. Orrick.
F. A. Torsch.
S. F. Miller.
Ridgaway Merryman.
B. Howard Richards.
E. K. Pattison.
F. H. Gottliebi.
Charles H. Snow, Jr.
W. H. Fehsenfeld.
H. Findlay French.
J. Barry Mahool.
Wm. B. Hurst.
E. Stanley Gary.
Frank N. Hoen.
Franklin P. Cator.
Randolph Barton.
Col. C, Wilbur Miller.
W. C. Robinson.
E. J. Clark.
Frank A. Furst.
Clinton Summers.
James L. Sellman.
Charles H. Grasty.
Stuart Olivier.
James Cardinal Gibbons.
Rev. M. H. Lichliter.
Rev. Julius Hofmann.
Robert Garrett.
Gustavus Ober.
T. Edward Hambleton.
Douglas H. Gordon.
S. Davies Warfield.
Van Lear Black.
John T. Stone.
Fred G, Boyce, Jr.
H. S. King.
E. G. Miller, Jr.
Michael Jenkins.
Edgar H. Gans.
Robert Crain.
Albert D. Graham.
Charles T. Crane.
Martin Meyerdirck.
John B. Ramsay.
T. Rowland Thomas.
George Cator.
John M. Hood, Jr.
W. M. McCormick.
Capt. Isaac El Emerson.
W. E. Jones,
Walter B. Brooks.
James M. Easter.
Gen. Henry M. Warfield.
Waldo Newcomer.
W. H. Morrow.
Siegmund B. Sonneborn.
Col. William A. Boykin.
Thomas O’Neill.
Col. Jacob W. Hook.
Charles H. Dickey.
D. C. Ammidon.
E. Allen Lycett.
Judge Morris A. Soper.
Wm. C. Page.
Gen. James A. Gary.
Henry F. Baker.
Summerfield Baldwin.
Wm. H. Matthai.
Jacob Epstein.
Gen. Wm. D. Gill.
George N. Numsen.
,
Q rj LI B ft *1
V'
iv
CITIZENS’ COMMITTEE— Continued.
Gen. A. C. Trippe.
Rignal W. Baldwin.
Layton F. Smith.
J. M. Dennis.
John H. Ferguson.
Gen. Felix Agnus.
Paul G. L. Hilken.
Right Rev. John Gardner Murray.
Rev. Alfred H. Barr.
Rev. H. A. Griesemer.
Wm). G. Baker, Jr.
J. S. Wilson, Jr.
John M. Nelson.
L. T. Appold.
Hon. Edwin Warfield.
John R. Bland.
L. Si. Zimmerman.
E. L. Norton.
George Blackiston.
J. J. Nelligan.
Omer F. Hershey.
Edwin G. Baetjer.
Randolph Barton, Jr.
James Ri Wheeler.
Col. Henry B. Wilcox.
Wm. Ingle.
Douglas H. Thomas.
Eugene Levering.
E. A. Heinz.
C. C. Homer.
Alexander Brown.
George W. Albaugh.
Westminster, Md.
Charles England.
F. de Sales Mudd.
W. B. Copper.
Chestertown, Md.
Orlando Harrison.
Berlin, Md.
Martin Higgins.
Easton, Md.
Wm. T. Warburton.
Elkton, Md.
Arthur P. Gorman.
Allen Farquhar.
Sandy Springs, Md.
R, Brent Keyser.
Joseph D. Baker.
Frederick, Md.
Hon. James McC. Trippe.
Robert B. Dixon.
Easton, Md.
F. W. Mish.
Hagerstown, Md.
Simon Dalsheimer.
Henry Keidel.
A. A. Brager.
Jas. Carey Martien.
Charles E. Ford.
John M. Littig.
Charles E. Rieman.
Owen Daly.
W. McCulloh Brown.
Blanchard Randall.
Hon. Thomas Parran.
St. Leonard, Calvert Co., Md.
Charles Y. Hayden.
Leonardtown, Md.
Hon. J. Frank Harper.
Centreville, Md.
George W. Woolford.
Cambridge, Md.
Wm. B. Spiva.
Princess Anne, Md.
Hon. Murray Vandiver.
Annapolis, Md.
J. Enos Ray, Jr.
Wm. A. House.
W. H. Pierce.
Hon. Jesse D. Price.
Salisbury, Md.
Hon. Oarville D. Benson.
Hon. George L. Wellington.
Cumberland, Md.
Benj. W. Corkran, Jr.
George L. Irvin.
David Hutzler.
Eli Oppenheim.
Walter Hopkins.
S Y N O P S IS O F BRIEF.
PA G E
I jn t t e o d t j c t o e y S t a t e m e n t ...............................................................................
I.
1
(a) Baltimore is the natural commercial,
financial and industrial capital of the
Fifth District, the point at which and to
which business in the Fifth District nor
mally converges, and is in every essential
respect, so far as commerce, finance and
industry in the District are concerned,
about five times as important as Rich
mond
Manufactures. .......................................
Agriculture............................................
Jobbing..................................................
Transportation— Railroads...................
— Boat Lines.................
Shipping................................................
Mining...................................................
Fisheries............................ ....................
Foreign Commerce................................
Banking.................................................
Economic Development.........................
Government recognition of Baltimore
as a financial center..........................
General..................................................
24
25
(b) A due regard to the convenience and cus
tomary course of business, within the con
templation of the Federal Reserve Act,
means a due regard to the convenience
and customary course of all business,
commercial, financial and industrial, and
requires that the natural commercial cap
ital of a District be designated as the
Federal Reserve City in such District . .
27
4
7
8
10
12
12
14
15
15
16
18
22
vi
SYNOPSIS OF BJJIEF— Cordinued,
PAGE
II.
B a l t im o r e
L
is
o c a t io n
for
F
D
the
if t h
G e o g r a p h ic a l l y
the
is t r ic t
F
ederal
R
the
eserve
N
atural
Bank
of
...............................................
41
(a) The customary course of business in the
Fifth District is towards the north and
towards the coast, i. e., towards Baltimore
as the largest, most important, and also
the most northern, seaport in the Fifth
District, and the point towards which
commercial payments, liquidation of busi
ness transactions and exchange normally
move...........................................................
41
(b) Baltimore, though near the northern end
of the District, is accessible to all parts
of the District, and is within seventeen
hours by mail of practically every city in
the District, so that business transacted
by mail from any part of the District
can be consummated on the next business
day after it is begun. Richmond is far
ther distant than Baltimore from the
most distant city in the District............
50
(c) Baltimore, though farther from the geo
metrical center of the District than Rich
mond, is at the center of greatest density
of population and business in the Dis
trict, and is, therefore, nearer than Rich
mond to the greater volume of the busi
ness transacted in the District, and to the
greater part of the banking capital and
resources of the District, and is directly
in the course of all business, near or dis
tant; Richmond is not only more distant
from most of the business in the District,
but is out of the general course of such
business......................................................
54
SYNOPSIS OF BRIEF— Continued.
vii
PAGE
III.
B a l t im o r e
of
B
is
u s in e s s
not
only
G enerally
the
in
N
the
C a p it a l
atural
F
if t h
D
is t r ic t ,
BUT IS ALSO THE NATURAL CENTER OF BUSINESS
A
c t iv it ie s
B
u s in e s s
of
H
a v in g
F
S p e c ia l
ederal
R
e l a t io n
R eserve B a n k
s
to
the
................
60
(a) Baltimore is a natural reserve city; Rich
mond, in the banking world, is a country
town and the location of country banks...
60
(b) Baltimore is not only the principal bank
ing center in the District, but is also the
center of the greatest volume of commer
cial credits extending through the Dis
trict. In these two respects it presents
the largest opportunities in the District
for the development of the rediscounting
business of the new Federal Reserve
Bank..........................................................
66
(c) As the principal Atlantic seaport of the
South;, with direct and easy means of
communication by land with New York,
Philadelphia, Chicago, Boston, Cleveland,
and generally all other Federal Reserve
'Cities, Baltimore is the natural location
of the Federal Reserve Bank for the
Fifth District, if such bank is success
fully to perform its broadest, and in times
of stress most important, functions in (1)
keeping in close touch with and influenc
ing general money and credit conditions;
(2) co-operating with the other Federal
Reserve Banks for these purposes, and
also in developing the collection facilities
of the new system and making possi
ble practically free domestic exchange
throughout the United States; (3) in suc
cessfully competing in the market for the
purchase and sale of foreign exchange,
with the control over general market con
ditions resulting from the establishment
viii
SYNOPSIS OF BRIEF— Concluded.
PAGE
of such a business; in developing the use
and sale of American acceptances, with
consequent increased facilities for the de
velopment of American foreign trade;
and generally in developing, and aiding
the development of, foreign connections
of the Reserve Bank and of the member
banks in the District................................
IV.
M
69
........................................................
78
National Banks and Other Banks..........
78
The Per Capita Theory..........................
79
80
States and Cities.......................................
Loans in the South...................................
81
Poll of Banks............................................
82
Inconsistency of Committee’s Reasoning
in Fourth and Fifth Districts............
87
Increase
89
Branch Theory..........................................
91
Effect of Actual Establishment of Bank
at Richmond..........................................
94
Conclusion..................................................101
is c e l l a n e o u s
A
p p e n d ix
A
...................................................................... 105
A
p p e n d ix
B
121
BEFORE THE FEDERAL RESERVE BOARD.
In
the
M
atter
of
the
DESIGNATION OF THE FED
ERAL RESERVE CITY IN THE
FIFTH FEDERAL RESERVE
DISTRICT.
BRIEF ON BEHALF OF THE CITIZENS
OF BALTIMORE.
Siection 2 of the Federal Reserve Act provides that the
Reserve Bank Organization Committee “ shall designate not
less than eight nor more than twelve cities to be known as
Federal Reserve Cities, and shall divide the Continental
United States, excluding Alaska, into districts, each district
to contain only one of such Federal Reserve cities. * * *
Provided, that the districts shall be apportioned with due
regard to the convenience and customary course of business,
and shall not necessarily be conterminous with any State or
States.” The determination of the Organization Committee
is subject to review by the Federal Reserve Board.
The Organization Committee designated Richmond, Vir
ginia, as the Federal Reserve city in the Fifth Federal Re
serve District, to comprise the States of Maryland, Virginia,
North and South Carolina, the District of Columbia, and the
State of West Virginia, except the four “ Panhandle Coun
ties.” The most important step in apportioning the dis
tricts— the first step mentioned in the Act.—is the designa
tion of the reserve cities. In this feature of the apportion
ment of the Fifth Reserve District, the Committee disre
garded the convenience and attempted to reverse the cush
tomary course of business.
2
For each and all of the following reasons we submit that
a due regard to the convenience and customary course of busi
ness requires that Baltimore be designated as the Federal
Reserve City in the Fifth Federal Reserve District:
I. (a) Baltimore is the natural commercial, financial and
industrial capital of the Fifth District, the point at which
and to which business in the Fifth District normally con
verges, and is in every essential respect, so far as commerce,
finance and industry in the District are concerned, about
five times as important as Richmond.
(5) A due regard to the convenience and customary course
of business, within the contemplation of the Federal Reserve
Act, means a due regard to the convenience and customary
course of alt business, commercial, financial and industrial,
and requires that the natural commercial capital of a district
be designated as the Federal Reserve city in such district.
II. Baltimore is geographically the natural location for
the Federal Reserve Bank of the Fifth District:
(a) The customary course of business in the Fifth Dis
trict is towards the north and towards the coast, i. e., towards
Baltimore as the largest, most important, and also the most
northern, seaport in the Fifth District, and the point to
wards which commercial payments, liquidation of business
transactions and exchange normally move.
(b) Baltimore, though near the northern end of the Dis
trict, is accessible to all parts of the District, and is within
seventeen hours by mail of practically every city in the Dis
trict, so that business transacted with Baltimore by mail
from any part of the District can be consummated on the
next business day after it is begun. Richmond is farther
distant than Baltimore from the most distant city in the
District.
3
(c)
Baltimore, though farther from the geometrical center
of the District than Richmond, is at the center of greatest
density of population and business in the District, and is,
therefore, nearer than Richmond to the greater volume of the
business transacted in the District, and to the greater part of
the banking capital and resources' of the District, and is di
rectly in the course of all business, near or distant; Richmond
is not only more distant from most of the business in the Dis
trict, but is out of the general course of such business.
III.
Baltimore is not only the natural capital of business
generally in the Fifth District, but is also the natural center
of business activities having special relation to the business
of Federal Reserve Banks,
(a) Baltimore is a natural reserve city; Richmond, in the
banking world, is a country town and the location of country
banks.
( b) Baltimore is not only the principal banking center in
the District, but is also the center of the greatest volume of
commercial credits extending through the District. In these
two respects it presents the largest opportunities in the Dis
trict for the development of the rediscounting business of
the new Federal Reserve Bank.
(c) As the principal Atlantic seaport of the South, with
direct and easy means of communication by land with ITew
York, Philadelphia, Chicago, Boston, Cleveland, and gen
erally all other Federal Reserve cities, Baltimore is the natu
ral location of the Federal Reserve Bank for the Fifth Dis
trict, if such bank is successfully to perform its broadest, and
in times of stress most important, functions in (1) keeping
in close touch with and influencing general money and credit
conditions; (2) cooperating with the other Federal Reserve
Banks for these purposes and also in developing the colleo-
4
tion facilities of the new system and making possible prac
tically free domestic exchange throughout the United States;
(3) in successfully competing in the market for the purchase
and sale of foreign exchange, with the control over general
market conditions resulting from the establishment of such a
business; in developing the use and sale of American accept
ances, with consequent increased facilities for the develop
ment of American foreign trade; and generally in develop
ing, and aiding the development of, foreign connections of the
Reserve Bank and of the member banks in the District.
L
(a)
B a l t im o r e
and
is t h e
N
atural
I n d u s t r ia l C a p i t a l
P o in t
W
at
F if t h
h ic h
D is t r ic t
E very E
s s e n t ia l
F
and
in a n c e
cerned,
A
and
N
F
to
W
orm ally
R espect,
I nd u stry
bout
iv e
C o m m e r c ia l , F
of t h e
in
T im e s
h ic h
B
u s in e s s
Converges,
So Far
the
as
in a n c ia l
F if t h D is t r ic t ,
as
the
in
and
the
is
in
C om m erce,
D is t r ic t A
I m portant
re
as
Con
R
ic h
mond.
The population of Baltimore (Census 1910) was 558,485;
that of Richmond 127,658, The figures for Richmond in
clude Manchester, which was annexed to Richmond just
before the last census. The figures for Baltimore include
none of the thickly populated suburbs of Baltimore, a large
part of which is commercially and in every respect, except
legally, a part of Baltimore City. The population of the
Baltimore Metropolitan District (as defined in the United
States Census for 1910) was 658,715.
The City having the largest population in a District should,
other things being equal, be designated as the Federal Reserve
city of that District. This stands to reason. Large poptila-
5
tion in a limited area, such as a city, always means large
trade and business, and necessitates bank f aeilities. Whether
the large trade follows upon the large population, or the large
population is brought about by a large and growing trade,
makes no difference. They are found together, mutually
interact on each other, and both are affected by geographical
location favorable to the development of the trade, whether
domestic or domestic and foreign.
This clear and evident principle was recognized by the
Committee as a matter of course in the location of most of
the other cities, but was abandoned without reason in the case
of Baltimore.
Thus the Committee say in their published report of their
decision designating reserve cities (page 2 4 ):
“ The Committee named as cities for the location of
Federal reserve banks New York, Chicago, Philadel
phia, St. Louis, Boston and Cleveland, In population
these are the six largest cities in the United S-tates. Their
geographical situation and all other considerations fully
justified their selection.”
Baltimore is the seventh largest city in the United States,
considering strictly only its population as included within
present city limits, amounting to 558,485 (only 2,178 lees
than the sixth city, Cleveland, which has a much greater
area). I f you consider, in addition, Baltimore’s densely
populated suburbs (within the Metropolitan District), con
tinuously built up from the city, the total population would
be 658,715 (that of the Cleveland Metropolitan District be
ing 613,270).
Richmond has a population of 127,628, and is the thirtyninth largest city in the country. The Committee, there
fore, after giving regional banks to the da? largest cities, sud
denly balks and stops at the seventh largest city in favor of
the thirty-ninth largest city, even passing over Washington,
which is the sixteenth largest city, with a population of
331,069.
'f t
FOR
Baltimore- - Blue
BALTIMORE AND RICHMOND
R tc h m o M d -R c i
See page 19 of Brief for Baltimore
MILLIONS OF DOLLARS
200
Loans and Discounts
Investments, Bonds,
Securities, etc.
Cash on Hand and due from
Banks and Bankers
All other Resources
Total Resources
Capital Stock
Surplus and Undivided
Profits
Individual Deposits
United States and Postal
Deposits
Due Bank and Bankers
All Other Liabilities
Reproduced from the Unclassified I Declassified Holdings of the National Archives
BANKING STATISTICS
6
In tabulated form the comparison shows as follows:
Baltimore— Population 558,485— Seventh largest city.
Washington— Population 331,069— 'Sixteenth largest city.
Richmond —Population 127,628— Thirty-ninth largest city.
The Committee also say, referring to the population of the
six largest cities, “ their geographical situation and all other
considerations fully justified their selection.”
It would seem that the thirty-ninth largest city, with a
population of 127,628, would have to show commanding ad
vantage in geographical and other considerations to secure a
designation for a regional bank over the seventh largest city,
with a population of 558,485.
As a plain and simple matter of fact, all these advantages
are in favor of Baltimore and against Richmond, as will be
shown in detail in this brief. Thus the designation of Rich
mond over Baltimore is not only contrary to the principles
of the new Banking law, but is so strange and unaccountable
as to have aroused a general adverse criticism of the action
of the Committee.
How practical and compelling is this relation between the
largest population in a restricted area, like a city, and volume
of trade is shown by the action of the committee. They
designated twelve cities., and out of these twelve, ten cities
have the largest population in their respective districts, and
of all the twelve there are only two exceptions, to wit, Balti
more and New Orleans, from both of which come vigorous
protests. (The difference between Dallas and San Antonio
is too small to make a real exception).
Why should they
be singled out and passed by, against the common rule
adopted by the Committee itself? Both are important sea
ports, and in all other respects furnish the best locations in
their respective districts (or, in case of New Orleans, a dif
ferently apportioned district) for regional banks.
The assessed valuation, for the purposes of taxation, of
property in Baltimore City in 1914 is $781,691,094; the
T
present assessed valuation of property in Richmond is $148,768,790 (World Almanac, 1914, pages 686, 687).
In business done Baltimore and Richmond compare about
as they do in population and in value of property. Neces
sarily, with respect to many kinds of business there are
available no such precise figures as exist with respect to
population and value of property. The figures which do
exist show substantially the same relation between the two
cities. The fact is generally recognized even where precise
figures are not obtainable.
M
anufactures,
Manufactures constitute one of the largest and most im
portant fields of business activity, and also one of those for
which the most complete figures are available. As shown
by the 1910 census, the City of Baltimore had 2502 manu
facturing establishments; the Baltimore Metropolitan Dis
trict had 2668 such establishments; Richmond, 380. The
amount of capital employed in these establishments in Balti
more City was $164,436,758; in the Baltimore Metropolitan
District, $199,735,181; in Richmond, $31,659,687. The
total value of the manufactured productsi in Baltimore City
was $186,977,710; in Baltimore Metropolitan District, $260,213,324; in Richmond, $47,357,985. The number of wage
earners employed in these establishments was 71,444 in Bal
timore City; 81,825 in Baltimore Metropolitan District, and
14,849 in Richmond.
Baltimore is the leading city in the United States in the
manufacture of men’s clothing, copper, tin and sheet iron
products, fertilizers, cotton duck, straw hats and in canning
and preserving. The value of clothing manufactured in Bal
timore (Metropolitan District) in 1909 was over $40,000,000, almost as much as the total value of all manufactured
products in Richmond for that year. The total value of
a
i
clothing, plus any one of eight other classes of manufactures
in Baltimore, exceeds the total of all manufactures in Rich
mond. The value of clothing manufactured in Baltimore
in 1909 showed an increase of 73.9% over the same product
in 1899. For copper, tin and sheet iron products the in
crease during the same period was 141.9%. For slaughter
ing and meat packing the increase was 110.8%. The total
value of the products of the two last mentioned classes in
1909 was over $28,000,000.
Manufactures in Baltimore are not only much greater in
amount, but also much more diversified than in Richmond.
Tobacco comprised over 43% of the total value of manu
factured products in Richmond for the year 1909. Cloth
ing, the largest single item in Baltimore, comprised but 15 %
of the Baltimore total— though almost twice the amount of
the tobacco products in Richmond. Seventeen classes of
manufactured products in Baltimore for the year 1909
amounted to more than $2,000,000 each; in Richmond but
two classes (one of which was tobacco) reached that amount.
For some months the Industrial Survey of Baltimore has
been at work on a thorough survey of the present condition
of each of the industries of Baltimore. This survey, when
completed, will present an accurate, comprehensive, detailed
view, based on an actual personal canvass of the entire city
(and Metropolitan District), of Baltimore’s industries. The
report of the Industrial Survey has not yet been published,
but much of the work has been completed. The Industrial
Survey finds the total value of the products manufactured
in Baltimore (Metropolitan District) during the year 1913
to be $353,319,086. This is an increase of $93,105,762—
35.7%— over the Census figures for 1909.
A
g r ic u l t u r e .
Agriculture is obviously a most important business in the
Fifth District. The dose relations between Baltimore and
the agricultural interests of the Fifth District are illustrated
9
by the size of the fertilizer business. The value of fertilizers
manufactured in Baltimore during the year 1909 was (1910
Census), $8,469,856, an increase of 117.4% over the figures
for 1899. The value of Richmond’s output in 1909 was less
than $500,000. Baltimore had sixteen fertilizer manufac
turing plants. Richmond had two.
During the calendar year 1913 there was imported at the
Port of Baltimore (as the records of the Collector of the
Port show) fertilizers and fertilizer material amounting to
$3,032,195.
The Industrial Survey finds the total value of acids and
fertilizers manufactured in Baltimore in 1913 to be $15,976,306, an increase of $7,506,450— 88.6%—over the Cen
sus figures for 1909. The Industrial Survey finds that about
60% of these products go to the South and that the increase
in the business is almost ■wholly in the South.
Dealing in live stock is also a business closely associated
with agriculture. The volume of this business in Baltimore
is almost ten times the volume of the business in Richmond.
The amount and value of live stock received in Baltimore
and Richmond respectively during the year 1913 were as
follows (figures obtained by Mr. S. Greenwald, Secretary
of the Greenwald Packing Company, from officials of the
Baltimore and Richmond Stock Yards) :
Number
Balti
Rich
more.
mond.
Cattle. . 17,223 129,425
19,889
Calves.. 2,800
Hogs. . . 89,157 884,387
Sheep. . 12,579 375,582
1,455
Horses..
848
Mules.. .
Value.
BichrmoTid.
$1,515,624.00
38,220.00
1,203,619.50
90,568.80
Balti
more.
$11,389,400.00
271,484.85
11,939,224.50
2,704,190.40
291.000.00
212 000.00
.
$2,848,032.30
$26,807,299.75
10
One-third of the cattle and sheep handled in Baltimore
come from Virginia and West Virginia.
J o b b in g .
As a center of the jobbing trade, Baltimore is recognized
as one of the principal cities in the United States. The lead
ing items in the Baltimore jobbing trade are dry goods, no
tions, millinery, groceries, food products, lumber and
mill-work, drugs and tobacco, all of which are steadily
growing. The Industrial Survey finds the total amount of
the jobbing trade in Baltimore during the year 1913 to be
$235,685,290. These figures do not include retail business
or purchases, but are limited to sales by jobbing houses alone.
Among the items, as classified by the Industrial Survey,
are the following:
Cottons and Prints.........................................$24,527,940
Boots and Shoes..............................................
9,671,122
Millinery and Lace......................................... 9,151,811
Hosiery & Knit Goods (including ^Notions) 5,597,000
15,883,269
Preserved and Canned Foods..........
Cereals, Spices, Teas and Coffee................ 15,382,000
Lumber and Mill-Work................................. 11,164,000
Drugs and Preparations................................
3,338,762
Spirituous Liquors........................................ 25,785,658
Tobacco............................................................
6,605,633
Of the total of $235,685,290, sales outside of Baltimore
amounted to $162,203,340.
The trend of distribution, by States, of the products of
Baltimore manufacturers and the goods of Baltimore job
bers, is indicated, probably as nearly as is possible, by a
memorandum, filed as Exhibit Not 15 with the brief filed
for Baltimore with the Organization Committee, showing
the results (necessarily incomplete) of a special canvass by
11
mail among the manufacturers and jobbers in Baltimore
City, and of returns made by one hundred and eighty-four
manufacturers and jobbers, who had distributed, in the year
1913, business aggregating over $135,000,000 (constituting,
as the Industrial Survey has since shown, about 23% of the
total distribution of manufacturers and jobbers in Balti
more, and a smaller fraction of the total number of man
ufacturers and jobbers). [This canvass was not made by the
Industrial Survey, and the figures in this brief quoted from
the Industrial Survey had not been ascertained when the
Baltimore brief was filed with the Organization Committee.]
That memorandum [Exhibit No. 15] shows (out of $111,666,000 of goods distributed by one hundred and thirty-two
manufacturers and jobbers in the year 1913), $27,414,000,
i. e., 24.55% , distributed in Maryland; $51,503,000, i. e„,
46.12%, distributed in Virginia, West Virginia, the Dis
trict of Columbia, North and South Carolina; making a total
of $88,917,000, i. e., 70.67% , distributed in the Fifth Disr
trict (plus the “Panhandle” counties of West Virginia);
$11,836,000, i. e., 10.60% , in Georgia, Florida and Ala
bama, and $20,913,000, i. e.} 18.72%, elsewhere.
It thus appears that over seventy per cent of the products
of Baltimore manufacturers and the goods of Baltimore job
bers are distributed in the Fifth District, another ten per
cent go farther south, and less than nineteen per cent else
where. That is to say, Baltimore not only does a much larger
business than any other city in the Fifth District, but does
most of this business in the Fifth District,— the boundaries
of which to a remarkable extent coincide with the boundaries
of the field of Baltimore’s commercial predominance. The
magnitude, as well as the geographical extent, of Baltimore’s
jobbing trade is illustrated by the fact that Mr. Jacob Epstein
alone carries 75,000 accounts throughout the South, and
John E. Hurst and Company carry 10,000 such accounts.
As we shall hereafter have occasion to point out, these ac
13
counts represent not only business done, but also credit fur
nished from Baltimore to the South, principally in the Fifth
District
In the brief filed for Richmond, it is said that Richmond’s
jobbing business is $80,000,000. No explanation is given of
how these figures are arrived at. To a considerable extent
the principal branches of the Baltimore jobbing trade are the
same or similar to the principal manufacturers, e. g., clothing,
food products, drugs and tobacco. It is fair to suppose that
the ratio between Baltimore’s jobbing business and that of
Richmond is not greatly different from the ratio between
their respective manufactures.
T
r a n s p o r t a t io n —
R a il r o a d s .
The facts are so well known that it is hardly necessary to
mention the respective transportation facilities of Baltimore
and Richmond. The three North, and South trunk lines
through Richmond all run through Baltimore. Baltimore
also has the three western trunk lines, the Pennsylvania, the
Baltimore & Ohio, and the Western Maryland (which con
nects with the New York Central System, and of which Bal
timore is the terminus). Through its connection with the
Pennsylvania and the Southern, the Chesapeake and Ohio
also runs direct trains through Baltimore. Through the
Baltimore & Ohio and the Western Maryland, Baltimore
connects with the Norfolk and Western, and thereby has
direct communication with the Shenandoah Valley in Vir
ginia itself, with which region Richmond has no direct com
munication.
B o a t L in e s .
In water transportation, the only comparison between Bal
timore and Richmond is the comparison between a great
13
Atlantic seaport and an inland city, on a stream of great
historic interest, but of no commercial consequence since the
seventeenth century. Baltimore has eighteen miles of water
front suitable for docking purposes (including 6% miles in
the main inner harbor, 3% miles on the Middle Branch
within technical city limits, and at least 8 miles more adja
cent to the city limits, i. e., on the North Shore of the Par
tapsco down to Point Breeze and on the South Shore to Haw
kins Point; not including Sparrow’s Point— actually so used
— or any other non-contiguous parts of the 22% miles of
water front, in the river approach to the city limits, under
the jurisdiction of the city authorities and open to still
greater development). It has 160 wharves in the main har
bor, with 145,700 feet— say 27% miles— of frontage of
wharf room. Adding this amount of wharf frontage to the
other water front of the Patapsco River and its tributaries,
the total is 120 miles of water front— developed and unde
veloped. [Annual Report of Harbor Board for year 1913.]
Of this wharfage the City owns 13 piers with a wharf front
age of 26,385 feet,— 5 miles.. Baltimore has spent $6,161,000 on municipal docks, and has available $5,000,000 more
for extending the system.
Baltimore has seventeen foreign steamship lines, with
regular sailings to more than that number of different ports
throughout Europe, the British Isles and the West Indies.
[Annual Report, Chief of Engineers, 1913:, Report of CoL
Lansing H. Beach, page 1803.] The number of foreign pas
sengers at the Port of Baltimore increased from 19,720 in
1911 to 29,675 in 1912 and 43,611 in 1913.
The Merchants and Miners Transportation Company, the
Baltimore Steam Packet Company (the “ Old Bay Line” ),
the Chesapeake Steamship Company, the Baltimore and
Carolina Steamship Company, the New York and Baltimore
Transportation Line, and other steamship lines, connect Bal
14
timore with Virginia, South. Carolina and other southern
ports, and also with New York, Philadelphia, Providence
and Boston. So far as tidewater Virginia is concerned, Bal
timore is thus in direct communication with both the Eastern,
and Western Shores, while Richmond has practically no
facilities for prompt communication with the Eastern Shore
and relatively none with the Western Shore.
S h ip p in g .
In the Chesapeake Bay and coastwise trade are engaged
942 vessels documented (June 30th, 1913,) at the Port of
Baltimore,— more than the number of vessels documented at
any other Atlantic seaport, except New York. Adding the
number of vessels documented at the Ports of Annapolis and
Crisfield, the total number documented at Chesapeake Bay
Ports (including Baltimore) is 1,792. In addition to these
vessels, nearly all the vessels documented at Virginia and
North Carolina ports trade on the Chesapeake Bay, making
a total (estimated by the Collector of the Port of Baltimore)
of about 4,000 documented vessels trading on the Chesapeake
Bay. Most of these vessels, of course, trade at Baltimore.
The total net registered tonnage of vessels entered and
cleared, in foreign and coastwise trade, at the Port of Bal
timore in the year 1913 was 9,700,075 tons,— an increase of
1,081,219 tons over 1912. The number of vessels, foreign
and American, which entered, cleared, arrived or departed,
[including vessels not entered or cleared] at the Port of
Baltimore during the year 1913, was 26,168; their aggre
gate net tonnage wasi 17,383,214; the number of passengers
carried, 748,943. [Report, 1914, not yet published, of Col.
Lansing H. Beach.]
The commerce, foreign, domestic and coastwise, of the
Port of Baltimore during the year 1913 amounted, in
freight carried, to a total of 14,781,548 tons, and an aggre
gate value of $439,906,468. [Col. Beach, 1914 Report.]
35
M
in in g .
Mining is of vast importance in West Virginia, Western
Maryland, and elsewhere in the Fifth District. The inti
mate relation of Baltimore to the mining industry is illus
trated, among other ways, by the fact that more than 5,000,000 tons of coal are shipped (in coastwise and foreign trade)
from Baltimore annually. [Figures received February 6th,
1911, from the Bureau of Statistics of the Department of
Commerce and Labor show a total of 4,875,609 long tons
(i. e., 5,460,682 short tons) for the year 1910. We under
stand that the Department has not continued similar sta
tistics as to coastwise shipments for subsequent years. Dur
ing the same year (1910), according to the records of the
Western Maryland, Pennsylvania and Baltimore and Ohio
Railroads, the total coal tonnage into Baltimore was 6,576,672 tons,— indicating consumption of more than 1,000,000
tons in Baltimore. As the above total of shipments for 1910
includes only 496,664 long tons (i. e.} 556,263 short tons)
of exports, while the exports for 1913 amounted to 873,413
short tons, the increase in exports alone, without any allow
ance for increase in coastwise shipments, would bring the
total shipments in 1913 up to 5,777,832 tons.] Almost all
of this coal is shipped by companies managed and largely
owned in Baltimore, including the Consolidation Coal Com
pany, one of the largest coal companies in the United States,
which has its principal mines in Maryland and West Vir
ginia, and makes shipments from Baltimore all along the At
lantic Coast, and also to Europe, Africa, South and Central
America. Exports of coal from the Port of Baltimore in
the calendar1 year 1913 amounted1 to $2,350,275 (873,413
tons).
F
is h e r ie s .
Baltimore is the natural center of distribution of the pro
ducts of the Chesapeake Bay fisheries, not only those in Mary
16
land, but largely those in Virginia. It is the leading city
in this country in the oyster packing industry. Richmond
has no business of this kind.
F
o r e ig n
C om m erce.
During the calendar year 1913 the domestic exports from
the port of Baltimore amounted to $117,269,378, imports
$35,553,514. Richmond has no exports or imports at all.
Exports from Baltimore amount to fifty per cent more than
exports from Philadelphia.
Almost twice as much com is exported from Baltimore as
from Boston, New York and Philadelphia combined. The
total amount of wheat, com and oats exported from Balti
more is over three-fourths of that exported from New York
and substantially equal to the total amount exported from
Boston and Philadelphia combined.
[See detailed figures
(1913), Annual Report of Baltimore Chamber of Commerce,
for year ending December 31st, 1913, pages 120-121.] The
value of exports from Baltimore of grain, hay and mill feed
alone for the calendar year 1913 amounted to $43,384,356
(including $12,956,706 of Canadian products shipped to
Baltimore in bond for export). [Records of Collector of
Port.] This represents just so much foreign exchange cre
ated in Baltimore for these items alone. It also represents
principally business done, not only through Baltimore but
in Baltimore. Fully 80 per cent of this grain business is
bandied by Baltimore merchants and commission men, who
either as purchasers or factors practically have to finance
payment to the interior shippers for all the grain handled
by them, and who then ship from Baltimore on their own
account the grain thus purchased, and exported or otherwise
disposed of. All these exports of grain from Baltimore thus
represent not only exports from Baltimore, but two separate
business transactions in and from Baltimore, viz, the pur
17
chase of the grain from the inland shipper and the sale of
grain to the foreign buyer. Both of these transactions have
to be financed in or from Baltimore. They naturally are or
should be financed in Baltimore.
Baltimore has large terminal elevators which can put
aboard vessels more than 1,000,000 bushels of grain in a day.
For the calendar year 1913, there were received in Balti
more, 70,915,824 bushels of grain (including 12,815,484
bushels shipped in bond and exported), and 2,086,097 bar
rels of flour (including 82,516 bushels in bond for ex
port), which, together with hay, straw and mill-feed
handled, aggregated a value of $68,000,000. Taking into
consideration other branches of the commission business not
reflected in any of these figures (such as the handling of
truck and fruits from the Atlantic seaboard and the West
Indies, including, for instance, bananas, for which Baltimore
is the largest market in this country), $100,000,000 would
be a conservative estimate of the annual volume of grain and
commission business in Baltimore.
The opening of the Panama Canal will necessarily greatly
increase Baltimore’s foreign commerce. The recent, still
progressing, growth of trade between the United States and
South America will, both before and after the opening of the
canal, have the same effect. Baltimore’s geographical posi
tion is, with respect to trade through the canal or with any
part of South America, more favorable than that of any other
city on the Atlantic Coast. Baltimore has a double advan
tage over New York, Philadelphia and Boston alike. The
distance by sea to the canal or to South America is shorter
from Baltimore than from any of these other cities. The
distance by rail is similarly shorter (with correspondingly
lower freight rates) from Baltimore to the West, to the Great
Lakes,— Chicago, Cleveland, Buffalo and other Lake Ports,—
and to the whole great coal, iron and steel region from West
Virginia and Pittsburg to the Lakes. Baltimore is thus the
Atlantic Seaport—the junction point for transshipment—
18
on the shortest rail-and-water lines of communication be
tween the Middle West and South and Central America, as
well as the Pacific Coast and the Orient.
B anking.
The relative volume of banking transactions, as indicated
in clearing house exchanges, in Richmond and in Baltimore
is as follows:
Baltimore.
Richmond.
Clearings for year ended September 30th, 1913............ $2,011,447,000 $411,507,000
Clearings for year ended Sep
tember 30th, 1912............ $1,878,324,000 $424,316,000
Increase..................... $133,123,000
Decrease................ .
$12^809,000
(Report of Comptroller of Currency, 1913, page 788.)
Deposits and banking resources in Baltimore not only bear
substantially the same relation to deposits and total resources
in Richmond, but actually exceed the total of deposits and
resources in the whole State of Virginia. This is shown by
the following condensed statement of resources and liabilities
of all reporting banks in Baltimore, Richmond and the whole
State of Virginia (including Richmond), respectively, on
October 21st, 1913 (the latest date for which published fig
ures as to Virginia State banks are available). The figures
for Virginia are published in the 1914 Report of the Bank
ing Division of the State Corporation Commission (includ
ing abstract published by the Comptroller of the Currency as
to National banks). The figures for Richmond were obtained
from the same report (as to State banks) and from the Comp
troller’s office and statements published in Richmond news-
19
papers as required by law (as to National banks). The
Baltimore figures were taken from the Comptroller’s pub
lished abstract and the Maryland State Bank Commissioner’s
office (all published in newspapers as required by law) :
Resources.
*Baltimore.
Richmond.
Virginia.
Loans and discounts.........$113,869,125 $47,574,477 $169,851,246
Investments, bonds, securi
ties, etc........................... 128,031,937
8,730,538 29,864,312
Cash on hand and due from
banks and bankers........ 39,929,973 14,815,997 42,527,987
All other resources............ 16,033,542
3,743,015 12,791,471
Total resources.............. $297,864,577 $74,864,027 $255,035,016
Liabilities—
Capital stock .................... $23,492,300 $10,250,437
Surplus and undivided
profits ...........................
32,929,507
8,383,971
Individual deposits.......... 185,901,434 35,704,121
United States deposits. . . .
3,983,772
874,698
Postal savings deposits. . . .
34,755
11,069
Due to banks and bankers . 37,861,201 12,634,413
All other liabilities............
13,661,608
7,005,318
$31,395,417
25,389,599
151,526,522
2,593,143
116,019
19,176,614
24,837,702
$297,864,577 $74,864,027 $255,035,016
* [Including 16 mutual savings institutions as of December 31st,
L913, the nearest date obtainable.]
The general ratio of about five to one thus prevails with
respect to deposits, and a ratio of four to one with respect
to total resources. Capital surplus and undivided profits
of Baltimore banks amount to three times the same item for
Richmond banks. The smaller ratio between capital, sur
plus and undivided profits but illustrates the fact that the
business of banking is transacted primarily with the money
of depositors, not with the money of stockholders. Capital
and surplus are practically only a margin of safety to depos-
20
itors. When a bank has reached a certain size and strength
it is no longer necessary to increase capital and surplus in
proportion to increase of business. Baltimore banks are
on an average larger than Richmond banks. This condition
indicates the basis of the statement by the Honorable Carter
Glass that “ in capital and surplus of national banks per
capita Richmond exceeded ISTew York, Chicago, St. Louis,
Boston and every other applicant city having a population
of as much as 80,000, except the City of San Francsico and
one other” (Congressional Record, page 7728). That is
tc say, proportionately capital and surplus is a larger item
with country banks than with banks in large cities. Thus
Table F, appended to the decision of the Organization Com
mittee, shows that the average capital and surplus of each
of the fifty-five banks and trust companies in Baltimore
was about fifty per cent more than the average capital and
surplus of each of the twenty-six banks and trust companies
in Richmond, but the per capita capital and surplus of the
Richmond banks and trust companies was $131 against $85
for Baltimore. On the other hand, the per capita individual
deposits in Baltimore were $341 against $277 in Richmond.
The distribution of banking resources among various kinds
of banks is also different in large cities from the distribution
among country banks. Greater specialization prevails in
the larger cities. In Richmond there are no mutual savings
banks, but national banks, like most country banks, do a
savings bank business. ^National banks dominate the bank
ing business in Richmond. In Baltimore the mutual sav
ings banks occupy a strong position and the trust companies
play a much more important part than they do in Rich
mond.
The following figures, showing capital, surplus and undi
vided profits, individual deposits and total banking resources,
indicate the different distribution of banking business and
resources in Baltimore and Richmond and the greater special
ization in Baltimore:
21
C a p i t a l ., S u r p l u s
and
U
n d iv id e d
P
Baltimore.
r o f it s .
Richmond.
National banks.......................... $22,243,508
State banks, trust companies and
stock savings banks................ 25,906,341
Mutual savings banks................
8,271,958
7,630,812
..................
Total........................................ $56,421,807
$18,634,408
I n d iv id u a l D
e p o s it s .
Baltimore.
National banks.......................... $43,701,142
State banks, trust companies and
stock savings banks................ 47,771,901
Mutual savings banks................ 94,428,390
Total........................................ $185,901,433
T
otal
$11,003,596
B a n k in g R
Richmond.
$26,957,490
8,746,630
..................
$35,704,120
esources.
Baltimore.
National banks ......................... $114,973,461
State banks, trust companies and
stock savings banks................ 80,183,110
Mutual savings banks................ 102,708,005
Richmond.
$57,056,235
17,807,791
..................
Total........................................ $297,864,576
$74,864,026
In the effort to find a comparison between Baltimore and
Richmond unfavorable to Baltimore, the Honorable Carter
Glass and the Organization Committee compared certain
figures, not for all banks in Richmond and Baltimore, but for
national banks alone in Virginia and Maryland} thus ignor
22
ing all tlie banks and trust companies in Baltimore except
national banks and apparently assuming that Richmond in
cludes the whole State of Virginia. As a matter of fact, as
we have already pointed out, the total banking r e s o u r c e s and
the deposits of all kinds in Baltimore banks exceed the re
sources and deposit® of all the banks in the State of Virginia.
E
c o n o m ic
D
evelopm ent.
Besides its ordinary current banking business, Baltimore
is the most important reservoir from which is supplied cap
ital for permanent investments in the economic development
of the South, including especially the portions of the South
included in the Fifth District. The relation, of Baltimore
to the South and to the District in this respect is almost too
well known to admit of discussion. The Baltimore trust, com
panies (which the Organization Committee and the defenders
of its action would ignore in comparing the banking resources
and activities of Baltimore and Richmond) have been de
veloped largely to provide a channel for this regular flow
of capital from Baltimore seeking investment in the South.
Of the three railway trunk lines through Richmond two, as
is well known, were developed mainly through Baltimore
capital, and Baltimore is still the principal seat, of the fiscal
operations of the Atlantic Coast Line and to a lesser extent
a seat of such operations of the Seaboard Air Line. Parts
of the Southern Railway system were also originally financed
in Baltimore, and the fiscal agency for the payment of inter
est on some of its underlying securities is in Baltimore.
There are still owned in Baltimore very large interests in all
three of these railroad properties.
The cotton milling industry itself has been largely devel
oped in the South through Baltimore capital. In the North
and South Carolina cotton mills particularly is invested a
large amount of Baltimore capital.
This flow of capital from Baltimore to the South is a
constant flow. Many of the Southern enterprises, like its
trunk lines, which have since, with the trend towards con
solidation, passed more under the influence of New York con
trol, were originally financed from Baltimore. After con
trol of Southern enterprises has passed from Baltimore to
New York, new Southern enterprises are being developed by
Baltimore capital when New York capital is not readily ob
tainable in the early stages of such industries.
The “Manufactuiers Record/’ in a carefully prepared arti
cle, filed as “Exhibit No. 9” with the brief for Baltimore with
the Organization Committee, says that a fair minimum esti
mate of the amount of Baltimore capital invested below the
Potomac is $200,000,000, and shows $23,167,016 invested
by three Baltimore savings banks alone in ten southern States,
not including Maryland, but including all the other States in
the Fifth District, and also Kentucky, Georgia, Florida,
Alabama, Tennessee and Mississippi. The greater part of
this amount undoubtedly represents investments in the Fifth
District.
Just as the commercial business done by Baltimore through
the Fifth District and the South in the distribution of its
manufactured products and the goods sold by its jobbing
houses creates a uniform flow of business (so far as payments
and liquidation of credits is concerned), from the South to
Baltimore as a center, so the permanent investments of Balti
more capital in the economic development of the South create
a similar flow of payments from the South to Baltimore,
comprising regular disbursements of interest and dividends
from Southern enterprises which have their fiscal agencies in
Baltimore, where they were originally financed. Three Bialtimore trust companies alone act as fiscal agents in the payment
of interest on about $200,000,000 of securities of corpora
tions in the Fifth District, making annual interest payments
aggregating about $10,000,000 per year. Of this amount
only about one-fourth represents local companies operating
in Maryland alone.
24
This flow of capital from Baltimore for permanent invest
ment in the South, with the resulting smaller flow of inter
est and dividend payments through Baltimore, has no parallel
in Richmond, as there is no accumulation in Richmond of
capital seeking permanent investment in the Southern states.
The Richmond banks no doubt satisfactorily handle the ordihary routine banking business of their immediate locality
and to some extent of the Carolinas. It is to Baltimore,
however, that the region, including Virginia itself, very
largely looks for permanent outlay of capital in new economic
development.
G o v e r n m e n t R e c o g n it io n
of
B a l t im o r e
as a
F
in a n c ia l
Center.
There were created by statute ten subtreasuries of the
United States, all of which still exist except that at Charles
ton, which was discontinued in 1876.
These are at the following cities, in most of which regional
banks have been designated by the Committee (6 Fed Stat.
Anno. 541) :
1.
2.
3.
4.
5.
6.
Boston
New York
Philadelphia
St. Louis
San Francisco
Chicago
Regional Bank.
“
“
“
“
“
“
“
“
“
“
Thus there are six cities where subtreasuriee were located
and regional banks designated.
7.
8.
9.
Baltimore
New Orleans
Cincinnati
No Regional Bank.
i(
u
a
a
ii
(c
25
The remaining three cities where subtreasnries are located
have no regional banks, and among these cities we again
have Baltimore and New Orleans discriminated against.
G e n e e a x ..
^Necessarily it is impossible to give definite figures for
many branches of business which go to make up the total
business in a large city, especially the more localized branches
of business. Baltimore, in its department stores, as well as
its older and other more specialized stores, does a large retail
business, not only with the residents of Baltimore and its
suburbs, but with shoppers from adjoining cities and States.
Doubtless Richmond also has similar business sufficient to
meet its local needs. There is at least nothing to indicate
that in such branches of business the ratio between Rich
mond and Baltimore is less than the prevailing ratio of five
to one which exists with respect to population and other
branches of business.
It cannot be too strongly stated that before the action of
the Organization Committee no one ever thought of compar
ing Richmond with Baltimore, or questioning the commer
cial and financial pre-eminence of Baltimore in what has
now been made the Fifth District. On the contrary, at the
public hearings before the Organization Committee, Mr.
Seay, the principal spokesman for Richmond, and the author1
of the Richmond brief, as well as others selected from the
throng to voice their preferences for Richmond, when pressed
first by the Secretary of Agriculture and later by the Secre
tary of the Treasury to compare figures for Richmond and
Baltimore, admitted their inability to do so. (Testimony,
pages 860, 86.1, 871.)
If Richmond ever suggested that it be made the reserve
city in a district including Baltimore, the suggestion was
not made publicly, or through any channels equally open to
Baltimore. The remarks of the Honorable Carter Glass
(copied by the Organization Committee, or vice versa) are
pure afterthought, in defence of a preference of Richmond
over Baltimore so gross and indefensible that before this
preference was given by the Organization Committee, Rich
mond itself did not dare ask it,— at least not publicly.
The astute and energetic public campaign conducted for
Richmond displayed a constant recognition of two facts,
first, that in a district including Maryland and Virginia,
Baltimore is the natural reserve city; second, that in a
district not including Maryland, but including Virginia and
southern states as far as Georgia, Richmond and Atlanta,
two enterprising cities (which were not reserve cities) of
about the same size, would be natural rivals for designation.
These two facts were thus dealt with :
1. The natural pre-eminence of Baltimore over Richmond
was met by a detei mined effort for the apportionment of a
district lying entirely south of the Potomac River. Through
out the Richmond brief and the statements at the public
hearing by the advocates of Richmond, emphasis is laid on
the assertion that “ Nature had mapped out” a district with
the Potomac River as a natural northern boundary.
2. The claims of Atlanta, (which was principally feared
by Richmond) were met by the argument that the course of
business is from the south northward, and that for this
reason Richmond could serve, not only Virginia, but even
South Carolina better than could Atlanta, which is geograph
ically nearer. This second argument is so obviously an argu
ment for Baltimore that it but emphasizes the recognition by
Richmond of the pre-eminence of Baltimore over Richmond.
In a word, Richmond recognized that, without an utter
disregard of the convenience and customary course of busi
ness, it was impossible to subordinate Baltimore to Richmond.
27
Concluding, therefore, that Baltimore could not be so subor
dinated, Richmond sought to iexclude Baltimore, putting it
in a district with Philadelphia or New York as the reserve
city. This was Mr. Seay’s method of dealing with Balti
more (Testimony pages 862-3). Other direct or indirect
references to Baltimore in the Richmond brief are made
merely in support of Richmond’s fundamental proposition
that Nature had laid off a district bounded on the north by
the Potomac River.
( b)
A
D u e R e g a r d t o t h e C o n v e n ie n c e a n d C u sto m a ry
C o u r se o f B u sin e ss, W i t h i n t h e C o n t e m p la t io n o f
th e F e d e r a l R eserve A c t, M ean s a D ue R egard to
th e
C o n v e n ie n c e
B u s in e s s .,
and
C o m m e r c ia l,
C u sto m a ry
F in a n c ia l
C ou rse
and
of
All
In d u s tr ia l,
a n d R e q u ir e s t h a t t h e N a t u r a l C o m m e r c ia l C ap
ita l
o f a D i s t r i c t be D e s ig n a te d as t h e
F ederal
R e s e r v e C i t y in S u c h D i s t r i c t .
In its statement under date of April 10th, the Organiza
tion Committee said:
“ The committee realized that the division of the
country into districts was far more important and com
plex than the designation of the reserve cities, and that
the latter duty was subsidiary and relatively simple,
waiving considerations of local pride or prestige. In ar
ranging the districts the consideration of the character
and growth of industry, trade and banking, no less than
the traditions', habits and common understandings of
the people was much more intimately involved.” (page
17.)
The Committee then proceeded to announce that “ com
paratively few people realized, or seemed to realize, what
the Act was intended to accomplish; what the nature and
28
functions of the reserve banks were to be; and how little
change would occur in the ordinary financial relations of
the communities., the business establishments and the indi
vidual banks ;” and that critics of the decision of the Com
mittee do not know “ that the Federal reserve banks are
bankers’ banks and not ordinary commercial banks;” and
that “ the ordinary every-day banking relations of the com
munity, of business men and of banks will not be greatly
modified or altered.” (Pages 17-18.)
If by all this the Committee merely means that no act
of the Organization Committee— or of Congress itself— can
make Richmond the commercial equal of Baltimore, or
reverse the natural positions which Richmond and Baltimore
occupy in the commercial world, we fully agree with the
Committee. Undoubtedly, “ every city can continue to do
business with individuals, firms or corporations, within its
own limits, or in its own region, or in any part of the
Union or the world in which it has heretofore done business.”
If, on the other hand, the Organization Committee is of the
opinion that it is immaterial to the accomplishment of the
purposes of the Act and the performance of the functions
which the Federal reserve banks are designed to perform,
what city in a given district is designated as the Federal
reserve city,— then we respectfully submit that the Committee
itself does not understand what the Act was intended to
accomplish and has wasted the time and money which has
been consumed under the authority from Congress “ to em
ploy counsel and expert aid, to take testimony, to send for
persons and papers, to* administer oaths, and to make such
investigation as may be deemed necessary by the said Com
mittee in determining the reserve districts, and in designat
ing the cities within such districts where such Federal reserve
banks shall be severally located
Banks are located and business is done not in districts,
but in cities. The designation of Federal reserve cities is
29
mentioned in the Act, before the division of the country into
districts, as obviously the fact of prime importance in the
apportionment of the districts themselves.
Banking is essentially an ancillary business— “ the servant
of commerce.” It occupies substantially the same relation
to other business which money and currency occupy to other
commodities. Money (except for the limited commercial
uses of gold and silver) is of no value in itself. It is an
indispensable medium in the distribution of all other com
modities. Banking (except certain historic but practically
obsolete functions) cannot exist apart from other business.
At the same time practically no other business can exist
without the aid of banking. This is commonplace.
What is true of banking generally is equally true (though
apparently not equally obvious) with respect to the Federal
reserve banks. The Federal reserve bank system is pre
eminently not a system complete in itself apart from our
existing banking system. On the contrary, it is superim
posed upon the whole existing system, presupposes the con
tinued existence of the present system, and especially seeks,
as far as possible, to unify into one system all existing banks,
both state and national, together with the new Federal re
serve banks, which are intended to constitute the nucleus,
or, more properly speaking, the governing part of the unified
system. With this determination to unite the Federal re
serve banks with existing banks in an integral whole, Con
gress combined a second purpose (clearly manifested through
out the Federal Reserve Act), not to disturb existing condi
tions more than is absolutely necessary. Throughout the Act,
Congress repeatedly displays (1) its determination to com
pel the establishment of the new system and such changes in
the present system as are necessary for that purpose, and
(2) its determination not to disturb existing conditions un
necessarily.
30
Without undertaking a minute review of the provisions
of the Federal Reserve Act, with, which this Board is famil
iar, it may be said that a cardinal feature— if not the cardinal
feature— of the new system is its comprehensiveness. The
present banking system had been found inadequate. It had
been found to create an artificial concentration of the money
of the whole country in New York City (and to a lesser
extent in Chicago). This concentration, it has been thought,
made the banking system too dependent upon speculation in
the stock market and too little adapted to meet the more
strictly commercial and agricultural needs of the country.
Congress set out to correct these conditions, not, however,
primarily by forbidding the practices which had been deemed
undesirable, or unduly prominent in our banking system, but
mainly by expanding the system and providing new (and sup
posedly more efficient) channels by which the money and
banking resources of the country might naturally flow to
wards commercial transactions, as distinguished from specu
lation in stocks.
Besides compulsory membership in the new system, the
Federal Reserve Act makes but one compulsory change from
existing conditions. Banks can no longer (after the expira
tion of three years) keep part of their reserve® with other
banks as reserve agents, but must keep such reserves as are
not kept in their own vaults with the Federal reserve banks
alone. With this exception (and the further exception of
changes in administrative details), the not infrequent changes
made by the Federal Reserve Act in the existing status of
banks, state and national, are all in the nature of enabling
provisions giving to existing banks greater powers and a
broader field of possible business than they now possess. The
development of these new fields of activity, or the expansion
of existing business in directions now not fully developed,
is necessarily expected to result, to a considerable extent,
in a deflection, into these new* fields, of part of the money
31
and banking credit now employed in stock exchange deal
ings. The important fact is, however, that these expected
changes Congress has left (with the single exception above
referred to) entirely to the course which business will natur
ally take when new channels have been opened and artificial
barriers have been removed, and not to prohibitions of exist
ing business or to compulsion in the development of the new
activities. Thus the exercise of the facilities for re-discount
ing and for the issuance of Federal reserve notes— the two
features of the Act which have attracted most attention on
the part of the general public—is optional with the banks.
Congress has trusted the natural course of business to flow
into the channels thus opened, hitherto unopened or ob
structed by artificial barriers. The same is true of the other
features, great and small, of the Act. The possibilities of
the new system in handling domestic exchange and collec
tions, the new powers of acceptance on the part of member
banks in connection with exports and imports, the establish
ment of foreign branches of existing banks or of Federal
reserve banks, the power to loan on farm land— are all in
stances of permission of what is now prohibited, or of the
removal of existing barriers, and not of compulsory deflec
tion of business into any particular channel or channels.
The intimate relation between the Federal reserve banks
and every other part of the banking system is illustrated by
the treatment of State banks and trust companies in the
Federal Reserve Act. This treatment strikingly illustrates
the comprehensiveness of the Act. In practice State banks
and trust companies already bear a rather loosely defined
relation to the national banks as parts of one general system.
This relationship is, however, mainly extra-legal. The new
Act deals directly with State banks and trust companies,
authorizes them formally to become members of the new
system, and recognizes that, whether members or not, all the
banking institutions in the country are to a certain extent
32
to be regarded as parts of one system. The comprehensive
ness of the Act in this respect is well illustrated by the pro
vision in Section 20 that “ no member bank shall act as the
medium or agent of a non-member bank in applying for or
receiving discounts from a Federal reserve bank under the
provisions of this Act, except by permission of the Federal
Reserve Board/’ Instead, therefore, of a flat prohibition
even against non-member banks availing themselves of the
peculiar advantages which the new system is expected to pro
vide for its members, Congress leaves this matter to the dis
cretion of the Federal Reserve Board, so that, if the Board
in its discretion shall see fit to permit, those legally non
members of the new system may practically occupy a sort of
subordinate or associate membership in the system, some
what analogous to the relations which now exist between a
clearing house and non-member banks and trust companies.
In view of the comprehensiveness of the new system, of
the predominance in this new system of the Federal reserve
banks, and of the necessarily intimate relations between the
Federal reserve banks and all other parts of the unified sys
tem, it is impossible that the designation of the Federal
reserve cities., i. e., the location of the Federal reserve banks,
can be unimportant. As well might it be said that the banks
of New York City might be moved to Syracuse, those of
Philadelphia to Harrisburg, those of Baltimore to Hagers^
town, without inconvenience or disturbance of the customary
course of business. Banks must be located where the com
merce to which banking is an ancillary aid is located. In
the case of the Federal reserve banks, this is equally im
portant (1) where the Federal reserve bank deals with the
public first hand as its customers (e. g. in “ open-market oper
ations” ) and (2) where it deals with the public second hand
through existing banks (e. g. in rediscounting). The natural
course of business has located existing banks where existing
business is and goes. A due regard to the natural course of
33
business requires that the Federal reserve banks be located by
law where Nature has already located both the business and
the banks.
The Organization Committee observes “ that the Federal
Reserve Banks are bankers’ banks and not ordinary commer
cial banks.” To a limited extent this is true; not, however,
in the sense that the Federal reserve banks are a peculiar
kind of banks set apart from the other banks to do a peculiar
kind of banking business. The Organization Committee con
tinues (speaking of the Federal reserve banks) that “ they
are to hold the reserves and to clear the checks of member
banks, make rediscounts for them and engage in certain openr
market operations
With, perhaps, a more accurate sense of proportion, it
might fairly be said that the Federal Reserve Banks are
banks vested (1) with special powers of great importance not
vested in other banks, and (2) with general power to conduct
all branches of the business of banking, except that, in trans
actions with the public, they may not perform certain import
ant but routine functions of ordinary banking, which are
expressly or by implication reserved to the member banks
belonging to the same united system.
Consciously or unconsciously, the Organization Committee
in no case, except in the Fifth and Sixth Districts, has failed
to locate the Federal reserve bank in the principal city in
the district. In every other case it has shown due regard
to the convenience and customary course of business by
designating the principal city in the district— the natural
commercial capital of the district— as the Federal Reserve
City. Boston, New York, Philadelphia, Cleveland, Chicago,
St. Louis, Minneapolis, Kansas City and San Francisco,
are each the largest city and the natural commercial capital
of their respective districts,— though in so designating Kansas
City, New York and San Francisco, the Committee cast to
the winds the supposed geographical considerations upon
34
which afterthought has laid so much stress in the defence
of the selection of Richmond, and in so designating Cleveland
both the objection to a city on the edge of a district and the
alleged wishes of member banks (not mentioned in the Act
but much discussed by the Organization Committee), are
alike ignored. [In the Eleventh District, the difference m
population between Dallas (92,104) and San Antonio (96,416) is negligible. Dallas is, therefore, no exception to the
rule of selecting the largest city in each district. As a reason
for the selection of Cleveland, the Committee itself says that
Cleveland is the sixth largest city in the United States.
Whether this is substantially true (i. e., whether, allowing
for suburbs, etc., Cleveland is really a larger city than Pitts
burg) , we do not, of course, undertake to say. We call atten
tion to the standard,— in this instance expressly recognized
by the Committee; with mere accuracy or inaccuracy of
detail in there applying the recognized standard we have no
concern.]
In the Sixth District (where, the Committee says, “ the
course of business is not fiom the Atlantic Seaboard towards
New Orleans” [page 19]), New Orleans (population 339.075) is passed over in favor of Atlanta (population 154,839), which is a little less than half the size of ISTew Or
leans. Nothing in the circumstances with respect to the
Sixth District can, however, compare with the Committee’s
titanic effort in the Fifth District to reverse the customary
course of business and subordinate not one but two large
cities (in the northern part of a district in which the course
of business is from the south northward) to a smaller city
which is a mere way station on the customary course of busi
ness towards its natural center at Baltimore.
In the Fifth District the Committee has undertaken to turn
the course of business backward to a comparatively small inte
rior city from two large cities, one about three times, the
other about five times the size of the city designated, either of
35
these much more convenient to both than Richmond is.
There need be no wonder that Richmond never uttered aloud
a request that the Committee (required by law to pay due re
gard to the customary course of business) subordinate both
Baltimore and Washington to Richmond.
The Committee say that “ it seemed undesirable to place a
bank in the extreme northeastern comer or at Baltimore.”
(Page 24.) This, however, is the rule and not the exception
in the Committee’s own action. Trade tends towards the
oceans, the lakes and the great rivers, and the large cities,
therefore, grow up there. The Committee gave regional banks
to the following cities, although they were on or near the edge
of the district and not geometrically at or near its center:
Boston, New York and Philadelphia, on the Atlantic, or
rivers running into it.
San Francisco, on the Pacific.
Cleveland and Chicago, on the lakes.
St. Louis, on the Mississippi River.
Here are seven cities of the twelve (besides Kansas City,
which makes eight) on the very edge of the districts in which
they are placed.
Practically on the edge of its district is also Minneapolis!.
There are only three cities that are at all near the geo
metrical center of their respective districts:
1. Atlanta.
2. Richmond.
3. Dallas.
In the book of Thomas Conway, Jr., and Ernest M. Paoterson, of the School of Finance and Commerce of the Uni
versity of Pennsylvania, on “ The Operation of the ISTew
Bank Act,” written before the action of the Reserve Bank
Organization Committee, the authors discuss the claims of
various cities for reserve banks, and give the then current
opinion. They say (page 33) :
36
“ Perhaps a few words should be said concerning the
present rivalry between the cities that are eager for
reserve banks. It seems to be generally conceded that
New York and Chicago will be on the list because of
their location and their financial prominence. San
Francisco and New Orleans come next, but upon the
rest of the number there is no consensus of opinion.
Boston, Philadelphia, Baltimore and Washington are
asking for recognition in the East.; Atlanta and Hous
ton (Texas) are mentioned for the South; St. Louis,
Kansas City, Memphis, Cincinnati, Cleveland and Min
neapolis in the Middle West, with Denver, Los Angeles
and Portland (Oregon) in the West. Still others have
been suggested, but most of the discussion centers around
the ones named. Only the most careful sifting and
weighing of the mass of evidence that will be presented
will make a proper choice possible. The Committee is
authorized to employ counsel and expert aid, to take tes^
timony and in other ways to conduct, such investigations
as may be deemed necessary.”
In this forecast are ten of the cities actually chosen, to
wit, Boston, New York, Philadelphia, Cleveland, Atlanta;,
Chicago, St. Louis, Minneapolis, Kansas City and San Fran
cisco, whilst the other two actually designated by the com
mittee, to wit, Richmond, which was designated in place of
Baltimore, and Dallas, which was designated in place of
New Orleans, are not even mentioned. So far as there was
any serious discussion representing the trend of public opin
ion prior to the action of the Committee, it was in favor of
Baltimore or Washington, as against Richmond, and New
Orleans, decidedly as against Dallas.
It is very significant that in this expression of public opin
ion prior to the action of the Committee, Richmond and
Dallas are not even mentioned, whilst both Baltimore and
New Orleans are placed among the possibilities. This, of
course, was because if the Districts were formed as they are
now, the public well knew that Baltimore would be the finan
37
cial and trade center of the district, its dominating commer
cial city.
The New York Journal of Commerce, edited by Dr. H.
Parker Willis, the reputed author of the new Federal Re
serve Act, in an editorial on April 17th, 1914, thus tersely
stated why Baltimore and not Richmond should have been
designated as the Federal Reserve City in the Fifth District:
“ T he
B a l t im o r e
P rotest.
The bankers and business men of Baltimore are en
tirely justified in their vigorous protest against being
tagged upon one corner of a reserve district with Rich
mond as the seat of its reserve bank. They show by
figures that in population, in manufacturing industry,
in trade and in banking resources and operations, Balti
more is just about five times as important as Richmond.
The location of a reserve bank should be determined by
these factors and not by territorial position. In one
comer of the district as Baltimore is, just as New York
is in one corner of its district, its means of ready and
rapid communication for purposes of exchange and bank
ing facilities throughout the district are far better than
those cf Richmond. What the Federal Reserve Act abso
lutely requires is that ‘the districts shall be apportioned
with due regard to the convenience and customary course
of business,’ and that has obviously not been done in the
case of the Fifth District. It certainly has not been
observed in locating the reserve city.
It was contended at the Baltimore meeting of protest,
apparently upon good evidence, that the Organization
Committee in its defensive statement did not fairly
represent the facts. The claims made in behalf of Rich
mond, in regard to the number of banks and means of
communication, had reference to rivalry in a district of
which Atlanta was to be the reserve center. Baltimore
was virtually left out of the account, At the time the
hearing was given and the alleged vote was taken nobody
knew what the division of districts in the South was to
38
be or how many of them there were to be. Baltimore
evidently never dreamed of being tagged upon one with
its reserve bank at Richmond or it would have made
itself heard then.
The resolutions adopted at the Baltimore meeting call
for a rehearing by the Organization Committee and;, fail
ing that, for an appeal to* the Federal Reserve Board, yet
to be appointed. Fortunately that board will have power
to readjust the districts, though the committee has taken
care to give it no chance to change the number, having
already fixed it at the maximum. There will be need of
a good deal of readjustment before the reapportionment
will have due regard to the convenience and customary
course of business, which the law requires.’7
Thereafter, the Richmond Committee put their case be*
fore the Journal of Commerce in a letter which evoked the
following editorial reply, on April 24th:
“ C u s t o m a r y C ourse
of
B
a n k in g
B
u s in e s s .
We have received from the Richmond Committee,
which worked so energetically and successfully for the
location of a Federal Reserve Bank in that city, a com
munication contesting our view that ‘the convenience
and customary course of business’ would have been bet
ter served by locating that institution at Baltimore for
the district as it was laid out, on account of the superior
banking connections and facilities of that city and the
greater flow of exchange transactions to and from it.
The committee submits certain maps and diagrams as
well as figures to sustain its contention that Baltimore,
at one corner of the district as designated, has not better
‘means of ready and rapid communication for purposes
of exchange and banking facility throughout the dis
trict’ than Richmond. These illustrations relate in part
to a district which was originally proposed to the Organ
ization Committee, and which included Georgia and
Florida. It gives lines of distance and time for mail
communication and figures relating to the number of
banks in the region, to show how much more conven
iently located Richmond is for banking purposes.
89
“ A large part of the argument seems to us quite irrel
evant to the main point in controversy, and it would require more space to go into a close analysis than is
worth while. There is a tendency to ignore the dis
tinction between ordinary banking operations and the
real functions of the reserve banks. The former are
likeiy to take their customary course in spite of some
inconvenience, while the latter may be subject to some
unnecessary inconvenience if it proves that the reserve
bank is not located with due regard to the convenience
and customary course of business. It is not so much a
question of area and distances as of distribution and con
centration of the actual currents of trade. The Rich
mond Committee says that in the middle and southern
portion of its district as designated, the three States of
Virginia, North Carolina and South Carolina have near
ly 6,000,000 population and 1,223 banking institutions,
while the northern part, in which Baltimore is situated,
has less than 3,000,000 population and only 494 banks.
It also shows how much more convenient for railroad
and mail communication Richmond is than Baltimore to
this large portion of the district.
‘‘To our mind this has very little to do with the case.
It is not a question of area and distances, or of popu
lation and number of banks so much as of density of
population within certain areas, volume and character
of transactions and number of daily communications to
be made. A limited area might be marked out in this
city containing a greater population than any one of the
three States named, and another in which more commer
cial and financial business is transacted in a day than
in all three of them,, while there is only a fraction as
many banks in the whole city as in the States which
constitute the southern part of the Richmond district.
Number of banks has scarcely any relation to the ques
tion. A national bank may be organized in most of
this district with a capital of $25,000, and there are
few outside of Baltimore having more than $50,000,
with corresponding resources. There are single banks
in this city with capital and resources equal to a thou
sand of the former or five hundred of the latter. The
40
matter of mail communication is not determined by
distance or time of transmission, but by demand for
the communication on account of the volume of busi
ness served by it.
“ However, as we have already said, most of these con
siderations are apart from the real question, on account
of the distinction so often ignored in the discussions be
tween ordinary banking operations and the special func
tion of the Federal Reserve Banks. In the daily trans
actions of domestic exchange, the drawings and trans
fers upon deposit accounts and the settling of balances,
business will take its customary course regardless of
district lines. So far as it is normally drawn to Balti
more, it will go there, and so far as it can be attracted
to Richmond it will be diverted to its banks. In that
regard the districting is not likely to make much differ
ence. I f there is inconvenience or added expense, it
will be due chiefly to the requirement for keeping a
large part of the reserve of the member banks with the
Federal Reserve Bank of the district, and to making
them dependent upon that institution for the redis
count of commercial paper.
“ It will certainly not be convenient or economical for
Baltimore banks to keep the required proportion of re
serves against their own deposits in Richmond any more
than for those of Jersey City to keep theirs in Phila
delphia. There is probably more commercial paper of
the kind ‘eligible for discount’ by the reserve banks
handled by the banking institutions of Baltimore than
in all that southern part of the district below Rich
mond and above the district of which Atlanta is made
the centre. It seems to us that the location of the re
serve bank of this Fifth District at Richmond, how
ever little it may interfere with the convenience and
customary course of general banking operations, is like
ly to exert considerable restraint upon the rediscounting
of commercial paper. This may, however, be done for
most practical purposes, where its object is not to draw
the treasury reserve notes into1circulation, without re
sorting to the reserve banks; and our chief objection
to what seems to us to be mistakes of location, is that
41
they are liable to hamper the working of the new system
and deter banking institutions which are not organized
under the National law from entering it.”
In the May? 1914, issue of the Journal of Political Econ
omy, published by the University of Chicago, it is said,
(page 487) :
“By making Baltimore, for example, tributary to
Richmond, and New Orleans to Atlanta, an injury was
done not only to local pride, but also to the convenience
and customary development of trade relations.”
II.
BALTIMORE IS GEOGRAPHICALLY THE NATU
RAL LOCATION FOR THE FEDERAL RESERVE
BANK OF THE FIFTH DISTRICT.
(a)
T h e C u s t o m a r y C o u r s e o f B u s in e s s i n t h e F i f t h
D i s t r i c t is T o w a r d s t h e N o r t h a n d T o w a r d s t h e
C o a st,
i. e.,
T ow ard s B a ltim o r e as t h e
L a r g e st,
M o s t Im p o r ta n t, and A ls o t h e M o st N o r th e r n , S ea
port
in
th e
w ard s W h ic h
F ifth
D is tr ic t, and th e
P o i n t T o
C o m m e r c ia l P a y m e n t s , L i q u id a tio n
o f B u s in e s s T r a n s a c t i o n s a n d E x c h a n g e N o r m a l l y
M ove.
The one fact as to the customary course of business in the
Fifth District, and, indeed, along the whole southern sea
board concerning which at the public hearings there seemed
to be entire unanimity of opinion on the part of representa
tives of Baltimore and Richmond, advocates of Richmond
from North and South Carolina, and apparently the Organ
ization Committee itself, was that the customary course of
42
business in this region is from the South northward. So
far as the relations between Richmond and Baltimore are
concerned, the logical consequence of this admitted fact is so
obvious that (as we have already remarked) it became a
cardinal point in Richmond’s case to establish the Potomac
River as the northern boundary of the district which should
include Richmond. With Mason and Dixon’s line as the
northern boundary of the district, this conceded fact (on
which Richmond properly laid so. much stress), irresistibly
points to Baltimore as the natural Federal Reserve City of
the Fifth District. Mr. Seay, in his testimony before the
Organization Committee, before the Committee had ques
tioned him as to the availability of Baltimore, spoke of “ an
incontestable advantage as the Federal Reserve Bank loca
tion” which he said Richmond “ being situated at the north
ern limit of the district” possessed. (Testimony, page 852.)
In the Richmond brief it was properly said:
“ It is a fact, certainly applicable to the Atlantic
Coast States, that the trend of business, the course of
commercial transactions, and the currents of exchange
are Northward, or, in other words, from the outside
towards the centers of finance and manufacture. This
is the natural course of exchanges. * * *
“ No act or rule will, however, reverse the natural
course of settlements—where the money is due, there
it must be paid.
“ Virginia, occupying the position of head of the
Southern States, places Richmond in direct line with
this natural trend, on the principal avenues of travel
and transportation.
“ The railway lines from the South come into' Vir
ginia as into a funnel, Richmond being at the apex—
the one line of railway being the tube leading to Wash
ington and points north. She is a natural converging
point.
“ The overwhelming volume of travel and transporta
tion must go through this point.” (Page 7.)
43
In truth, the overwhelming volume of travel and transpor
tation south of Richmond must go through Richmond to Bal
timore. In addition to the transportation from the district
which Richmond sought to have apportioned> the vast volume
of business from West Virginia and Maryland (as well as
business from tidewater Virginia and from the western parts
of Virginia and North Carolina) comes direct to Baltimore
without even passing through Richmond.
The facts hitherto mentioned concerning the amount and
distribution of Baltimore’s manufactures and jobbing trade,
the volume of credits carried both by the banks and the com
mercial houses of Baltimore in the other parts of the Fifth
District, the relation of Baltimore 'and Baltimore capital
to the mining industry in West Virginia and Western Mary
land, and the constant permanent investment of Baltimore
capital in the district, with the resultant regular flow of
interest payments from other parts of the district to and in
Baltimore— all combine to produce that natural customary
course of business, from the south northward, and from the
inland points coastward, to Baltimore, which at once explains
and is explained by the fact that Baltimore is so predomi
nantly the commercial and financial capital of this district.
What doubtless is true in a smiall local sense of the course
of business from the Carolina® to Richmond (so far as there
is any course of business between Richmond and these
points), is true in a much larger and more general sense with
respect to the course of the great volume of business from
all parts of the district to Baltimore. Baltimore is a cred
itor city. The remainder of the district is, with respect to
Baltimore, debtor territory. This situation is in no sense
confined to the relations of the Baltimore banks with the
other parts of the district, much less of the national banks
alone. The great jobbing houses in Baltimore, with their
thousands of southern accounts, regularly finance (as Mr.
Hurst explained in his testimony before the Organization
44
Committee [Testimony, pages 765-766-, 768-773]) the small
southern business men, whose accounts are carried by these
Baltimore houses sometimes for the greater part of the year,
until with the disposition of the cotton crop these southern
buyers are able to liquidate in Baltimore the accounts thus
owing and to make the payments thus due in Baltimore. As
Mr. Ingle suggested in his testimony (page 805), it is likely
that these thousands of southern accounts will, under the
new system, form the basis of two and three name paper,
discounted with the Baltimore banks, and rediscounted with
the Federal reserve bank, instead of being financed (as
they now are) directly by the Baltimore merchants—who in
turn finance their own operations, either with their own
capital or by their own individual credit through loans from
their own banks in Baltimore or from New York. Be this
as it may, the fact, (which no Federal reserve bank can
change), is that these thousands of southern accounts mean
thousands of checks flowing from the South to Baltimore in
payment and liquidation of accounts owing from the South
in Baltimore, and thus constitute the customary northern
course of business in the district.
Under the present system, these southern accounts may be
paid by checks of the southern debtors, drawn on their local
banks (in which event in most cases the checks are sent south
from Baltimore for collection and are then paid by the
southern banks in New York Exchange), or the southern
debtors may in the first instance pay their accounts in Balti
more in New York exchange in the form of checks drawn
by the southern banks on their New York correspondents.
Under the new system, this condition will be materially
changed. Collections within a district will probably be
made through the Federal reserve bank and collections be
tween districts will largely be made between the several
Federal reserve banks. When a Baltimore merchant re
ceives a check from a southern customer, drawn on a south-
45
em bank), and deposits it with his Baltimore bank, it will no
longer be necessary for the Baltimore bank to send this check
south for collection, and probably afterwards receive a New
York check which will require a second collection to liqui
date the one transaction. Instead, the Baltimore bank will
deposit the original check in the Federal reserve bank and
collection will be made immediately by charging the account
against the southern member bank.
To remove the Federal reserve bank from its natural loca
tion in Baltimore to Richmond involves no mere question of
distance, but an attempt to turn backward the existing course
of business. Not only is there in Baltimore five times the
volume of local banking transactions that there is in Rich
mond, but there is flowing to Baltimore a constant stream
of payments from other parts of the district, which normally
should be liquidated through the Federal reserve bank, and
which conveniently can be so liquidated only if the bank is
located at the center to which this business moves. To con
summate these transactions through a Federal reserve bank
at Richmond means that the whole course of this business
must be turned backward, that a business day must be lost
in mailing to Richmond, from the Bialtimore banks, these
very checks, many of which on their way to Baltimore have
already passed Richmond.
I f the Federal reserve bank is located at the natural com
mercial capital of the district, where in the customary course
of business the greatest volume of payments flow, and where
also by far the largest volume of local transactions occur,
manifestly the convenience of business is best subserved.
Thus, and only thus, can be made possible the consummation,
on the same business day, of the receipt, deposit and collec
tion of a larger volume of out of town business than flows
into any smaller place in the district, as well as the handling
of local business five times larger than exists at Richmond
or at any other place in the district. Necessarily, wherever
46
a Federal reserve bank is located, practically one business
day will be consumed in all cases (with one important excep
tion in the Fifth District) of transactions between such
bank and banks situated anywhere in the district outside of
the Federal Reserve City. This cannot be avoided. Ordi
narily, only business in or very near the Federal Reserve
City itself can be begun and consummated on the same day.
Common sense and convenience, therefore, dictate the loca
tion of Federal reserve banks at natural commercial cap
itals, so that the greatest volume of business may enjoy this
saving of time resulting from the proximity of the Federal
reserve bank to the business. With a Federal reserve bank
located at Richmond, all Richmond local business, and also
the comparatively small out-of-town business coming to Rich
mond, could be transacted, by customers with the local banks
and by the local banks with the Federal reserve bank, on,
the same day. With respect to all other business in the
district, practically a day would be consumed in communica
tion by mail between the member bank and the reserve bank.
With the Federal reserve bank in Baltimore, fully five
times this volume of business would be immediately liqui
dated without the loss of this day, and (except only the busi
ness going to Richmond itself), all other business in the dis>trict could be handled just as conveniently as if the Federal
reserve bank were at Richmond.
The proximity of Baltimore and Washington multiplies
the convenience of locating a Federal reserve bank at Balti
more. These two cities are so situated geographically and
have such abundant means of communication by railroad
and such frequent mail service that they constitute a unique
and important exception to the general rule that only the busi
ness in a Federal reserve city itself can be transacted with a
Federal reserve bank without the loss of a day. Geograph
ically, Baltimore and Washington are practically suburbs of
each other, with almost as easy communication as Manhattan
47
and Brooklyn. With respect to the relative convenience of
business, therefore, the difference between locating a Federal
reserve bank in Baltimore and locating it at Richmond is
practically not merely the difference between locating it in
the commercial capital of the district, and locating it in
another place one-fifth the size of such capital. The real
difference is the difference between locating the bank in a
community of a million people and locating it in a place of
on&seventh that size.
The practical importance of a due regard to the customary
course of business and the inconvenience necessarily result
ing from a disregard of the course of business were well
stated in the testimony of Mr. Levi L. Rue, President of
the Philadelphia National Bank and Chairman of the Clear
ing House Committee of Philadelphia, before the Organiza
tion Committee. Mr. Rue’s remarks were addressed to the
^suggestion that a Federal Reserve Bank be located at Pitts
burg, although the customary course of business is from
Pittsburg to the east”and northeast, i. e., to Philadelphia and
New York. What Mr. Rue said on this point is so* mani
festly applicable to any proposal to turn backward the course
of business, as from Baltimore to Richmond, that we may
well quote Mr. Rue’s exact words:
“ T h e S e c r e t a r y o f A g r i c u l t u r e — * * * What
would the banks do, do you think, if Pittsburg were
made the head ?
M r. Rue — I think Pittsburg would be an unnatural
location, for this reason. The course of trade is to the
east and northeast. The best evidence as to what is the
real course of trade is the demand for exchange. That
shows the course of trade, where a merchant has to make
his settlements. Now Pittsburg exchange is never
sought. The fact is it is shunned by—
T h e S e c r e t a r y o f t h e T r e a s u r y — It does not pass
a t par? ,
M r. Rue — You make that comment, sir. I simply
said shunned. And why is it shunned ? Because it is
not needed, and no settlements are made in Pittsburg.
48
T h e S e c r e t a r y o f t h e T r e a s u r y — But under this
situation the exchange will be at par, and so the parring
of exchange everywhere will correct that situation.
Mr. R u e — But what would be the result, if a Federal
Reserve Bank was put in Pittsburg, and the demand for
the exchange, if the Philadelphia banks had to throw
into Pittsburg, we will say, and all this section towards
the west, the business which they get which produces
their exchange. Now as I say, the trend of trade is
east and northeast.
T h e S e c r e t a r y o f t h e T r e a s u r y — It would get
down to a question of clearance, that is all.
M r. Rue— Exactly. The result would be from a prac
tical standpoint that the banks of this territory which
I have outlined there in Section 3, would send their
business of that description out to Pittsburg with the
loss of a night or a day’s mail, to that bank to create
reserve in their Federal Reserve Bank. Now what
would that Federal Reserve Bank do with it? It would
have to send it for collection eastward again, either to
a Federal Reserve Bank in New York, or Atlanta or
Boston, or wherever you gentlemen may, in your wisdom,
locate them. And the merchants of Philadelphia, our
reserves being in Pittsburg, say, would have an
exchange, which while you say it would pass at par
through these other Federal Reserve Banks, would be
unnatural, and it would create such a preponderance
of exchange against the Federal Reserve Bank at Pitts
burg, that it would be a continual debtor to the Fed
eral Reserve Banks of the east, and would require a
constant shifting of balances of currency. I do not care
how you locate these banks, you cannot overcome the
laws of trade.
T h e S e c r e t a r y o f t h e T r e a s u r y — That is exactly
what we do not want to do.
M r . R ue— I know that, I am sure you do not, but
you cannot overcome the laws of trade.
T h e S e c r e t a r y o f t i i e T r e a s u r y — That is the rea
son this is the kind of information we want.
M r. Rue — I understand, and I am trying to explain
that you cannot overcome the laws of trade. If you
should place a Federal Reserve Bank in Pittsburg to rep
49
resent this eastern district, the balance of exchange is
always eastward, because there is always the great
density of population, and the great consuming powers,
and there are the important ports, and settlements have
to be made in the east. Now the Federal Reserve
Bank in Pittsburg would be a continual debtor to the
Federal Reserve Banks on the Atlantic Coast, and
would require continual shifting of money to off-set
that debit balance.
T h e S e c r e t a r y o f A g r i c u l t u r e — Suppose you
took exactly the same area, and put it in Pittsburg, in
stead of in Philadelphia.
M r. R uei— T he same situation exists.
T h e S e c r e t a r y o p A g r i c u l t u r e — You would have
exactly the same amount of banking power ?
M r. Rue — You would have exactly the same amount
of banking power, but you would be going contrary to
the law and trend of trade. The trend of trade is
eastward and northeastward, towards the density of
population, and the Pittsburg bank, even if you make
the district as it is, would be a continual debtor to the
east, as it is now, and you would put a great expense
on that bank in making credit balance against the tre
mendous debit that would be coming from the other
Federal Reserve Banks in the east, which gets the vast
volume of exchange.
T h e S e c r e t a r y o p t h e T r e a s u r y — Would the diffi
culty be lessened if Baltimore were made the headquar
ters, I mean as against Pittsburg?
M r . R ue— Surely.
T h e S e c r e t a r y o f t h e T r e a s u r y — And so far as
Washington is concerned, you think it would not be
lessened anything like the same degree as if Baltimore
were chosen ?
M r. Rue— I think Baltimore and Washington are on
a par as far as exchange goes.
T
he
Secretary
of t h e
T
reasury—
B a ltim o re h a s a
v e r y la r g e fo r e ig n e x c h a n g e ?
M r . R ue— Comparatively, sir.
that later on.
I will touch upon
50
T h e S e c r e t a r y o f t h e T r e a s u r y —We do not want
to interrupt your argument, but sometimes it elucidates
the matter to bring out points as you touch upon them.
M r . R u e — I understand. Banking is the servant of
commerce, hence banking facilities must follow com
mercial transactions. * * *”
(Testimony, pages 1036-1040.)
(6 )
B
a l t i m o r e ,,
D
the
D
T
hough
is t r ic t ,
i s t r i c t , a n d is
of
A
is
W
P r a c t ic a l l y
that
B
of th e.
u s in e s s
D
B
u s in e s s
F
arther
D
is t a n t
D
ay
A
in
the
to
N
orth ern
P
all
it h in
Seventeen H
very
C it y
Can
fter
is t a n t
C it y
ear
T ran sacted
is t r ic t
D
E
N
c c e s s ib l e
be
the
M
the
a il
is
B
B
egun.
a l t im o r e
E
D
nd
of
of
the
M
a il
is t r ic t ,
so
ours b y
from
C on su m m ated
it
than
in
by
arts
any
on th e
P art
N
ext
R ic h m o n d
from
the
M
is
ost
D is t r ic t .
A bank does not bear the relation to business which a road
house bears to travel. I f it did, Trenton and Wilmington
would be greater banking centers than New York, Philadel
phia or Baltimore, the Bank of England might have its
headquarters at Oxford, and the Bank of France somewhere
in the chateau country. A bank should naturally be located
where the greatest volume of business is, and where conse
quently the greatest volume of business can be handled with
the greatest convenience, not at some point where business
can come with the least inconvenience or loss of time. I f
the selection of a Federal Reserve City in a Federal Reserve
District were a mere problem in geometry,— like the location
of the center of population— Congress would doubtless have
turned this matter over to the statisticians in the Census
Department instead of authorizing the Organization Com
mittee “ to employ counsel and expert aid, to take testimony,
to send for persons and papers, to administer’ oaths, and
51
to make such investigation as may be deemed necessary by
the said committee * * * in designating the cities within such
reserve districts where such Federal reserve banks shall be
severally located.”
When the committee located a Federal reserve bank at
Kansas City, on the very edge of a district, a thousand miles
from the other end of the district, it apparently realized
that mere distance is a subsidiary consideration, and that
the location of the commercial and financial center of a dis
trict is very different from the location of the geometrical
center. When Congress directed the Committee to pay “ due
regard to the customary course of business,” it was evidently
not ignorant of the difference (well known to every country
justice or scrivener), between courses and distances. In
other words, the direction in which business naturally flows
is more important than the distance it goes.
The consideration of distance is wholly irrelevant in the
Fifth District, for the simple reason that Baltimore is
within seventeen hours, i. e., within one business day, of prac
tically every city in the district. That is to say, business
sent by mail to the Federal reserve bank at Baltimore can
be consummated on the next succeeding day. Business from
Baltimore with a Federal reserve bank in Baltimore can
be consummated on the same day. On the other hand, only
Richmond business itself, and no business from points out
side of Richmond, can be transacted with a Federal reserve
bank in Richmond before the next succeeding day. In the
case of Baltimore there is not only the greater volume of
business in Baltimore, but (as we have already pointed out)
the peculiar opportunity for consummating Washington busi
ness on the same day. 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 con
summated is unimportant. The relative convenience of loca
52
tion in such a district (though this would by no means be
equally true in a district like the Kansas City district, where
days have to be counted) depends, therefore, not only pri
marily, but solely, upon the volume of business at the Fed
eral Reserve City itself, or (in the case of Baltimore) upon
the volume of business of the twin cities of Baltimore and
Washington.
Charleston, South Carolina, is the most distant from Bal
timore of all the more important cities in the Fifth District.
The actual mailing time between Charleston and Baltimore
is seventeen hours. Charleston and Baltimore are thus well
within one business day of each other. For practical pur
poses, this is exactly the same situation as exists with resepct
to Richmond and Charleston, though the mailing time be
tween Richmond and Charleston is only twelve hours (See
Appendix A ).
As a matter of fact, Baltimore is actually nearer than
Richmond to the most distant point in the district,— as well
as to the greater volume of banking capital, resources and
business and general business in the Fifth District. The
erroneous assumption that Baltimore is farther distant than
Richmond from the distant portions of the Fifth District is a
not unnatural result of a superficial view of a map of the
district. The assumption is, however, erroneous in at least
two respects. First, it confuse® geometrical distance with
geographical distance, air lines with' practical means of
communication; in other words, distance in miles with dis
tance in days and hours, which is the business way of measr
uring distance. Secondly, this assumption overlooks the
fact that the greatest distance (in time, by actual means of
communication) in the Fifth District is not from north to
south, but from east to west. Distance from: north to south
is greater on the map. This distance is, however, traversed
by trunk line railroads which bring Baltimore, at the north,
and Charleston, at the south of the district, well within one
business day. The western parts of the district are, however,
53
not only separated from, the east by mountains, but, with re
spect to Richmond at least, have not such direct communica
tion as exists between Baltimore and the south of the district.
The most distant place in the Fifth District which has a
national bank is the town of Jonesville, in Virginia, which
is reached by mail only by a star route. The actual mailing
time between Richmond and Jonesville is 34 hours and 40
minutes. Between Baltimore and Jonesville the mailing
time is 31 hours. Jonesville has one bank, with $32,500
capital and surplus, and total resources less than $150,000.
Needless to say, it is a small and relatively unimportant
place. The same is true of almost every place in the dis
trict which is more than seventeen hours from either Balti
more or Richmond.
No place of 5,000 or more inhabitants, no place with more
than one national bank, no place with aggregate national
banking resources of $250,000 or more, is more than 24
hours distant from either Baltimore or Richmond. The
only places of 5,000 or more inhabitants more than 17 hours
distant from Baltimore or Richmond are Asheville, N. C.
(population, 18,762), 18 hours; Union, S. C. (population,
5,623), 18 hours; Sumter, S. C. (population, 8,109), 19
hours; Anderson, S. C. (population, 9,654), 20 hours 20
minutes, and Newberry, S. C. (population, 5,028), 21 hours
30 minutes, from Baltimore; and Newberry, S. C., 17 hours
30 minutes; Anderson, S. C., 18 hours 20 minutes, and
Cambridge, Md. (population, 6,407), 20 hours from Rich
mond.
On the other hand, Parkersburg, West Virginia, with five
national banks (which have total resources amounting to
about two-thirds of the total resources of the national banks
of Charleston, South Carolina), is 16 hours and 30 minutes
by mail from Richmond, and thirteen hours and thirty
minutes from Baltimore. The distance from Baltimore and
from Richmond, respectively, to the most distant of the
more important cities in the district is thus almost the same.
#4
(c)
B a l t i m o r e ,,
cal
th e
Though
F a rth er
fr o m
C e n te r o f th e D is tr ic t th a n
C en ter
of
G re a test
a n d B u s in e s s in
N earer
o f th e
th a n
th e
th e
Density
of
D is tr ic t, and
R ic h m o n d
to
th e
B u s in e s s T r a n s a c t e d in
Geometri
R i c h m o n d , is a t
P o p u la tio n
is , T h e r e f o r e ,
G re a te r
th e
Volume
D is tr ic t, and
t o t h e G r e a t e r P a r t o f t h e B a n k in g C a p it a l a n d
R e s o u r c e s o f t h e D i s t r i c t , a n d is D i r e c t l y i n t h e
Course
OF
all
B u s in e s s ,
N ear
or
D is ta n t;
R ic h
m o n d is N o t O n l y M o r e D i s t a n t f r o m M o s t o p t h e
B u sin e ss in t h e
D i s t r i c t , B u t is O u t o f t h e G e n
e r a l C o u r s e o f S u c h B u s in e s s .
As a matter of fact, Richmond, though somewhat nearer
the geometrical center of the district, is not actually as near
the geographical center of the business of the district. In the
business world distance is measured in days not in miles.
As we have already pointed out, days— rather than hours or
fractions of a day— are important. Even in hours, how
ever, Baltimore is nearer the greater volume and density of
business in the Fifth District than Richmond.
Filed as an appendix to this brief, marked “ Appendix A,”
is a complete list of every city and town in the Fifth District
which has a national bank, with the number of national
banks, the total capital and surplus, and the total resources of
such national banks, and also the actual mailing time, calcu
lated by the Chief Clerk of the Bureau of Information and
the Asistant Chief Clerk, Railway Mail Service, at the Balti
more Postoffice, between each place and Baltimore and Rich
mond, respectively. This list was limited to national banks,
only for the reason that complete statistics for all banks were
not readibly obtainable, and would moreover make the list
still more voluminous. The inclusion of complete statistics
for all banks would bring out more clearly the proximity of
Baltimore to the greater volume of banking capital and re
55
sources in the district, for the reason that in Virginia (most
of which is nearer to Richmond than to Baltimore) national
banks are relatively more important and represent a rela
tively larger part of the total banking resources and business
than in any other part of the district, while in Maryland
(all of which is nearer to Baltimore than to Richmond)
national banks represent a relatively smaller part of the total
banking resources and business than in any other part of
the district. For example, taking the Comptroller’s pub
lished figures for June 4th, 1913, the total resources of all
banks in Maryland, Virginia, District of Columbia, North
and South Carolina and West Virginia (without deducting
for the Panhandle counties) was $1,203,247,617, of which
the total for Maryland, District of Columbia and West Vir
ginia was $694,989,798, i. e., 57% of the total for the five
States and the District (Comptroller’s Report 1913, page
47). On the same date the total resources of national banks
in the five States and the District was $579,582,490, of
which the total for Maryland, District of Columbia and West
Virginia was $314,397,468, i. e., only 54%. As. the com
plete list in “ Appendix A” shows, all of Maryland and the
District of Columbia and most of West Virginia is nearer to
Baltimore than to Richmond, while all of North and South
Carolina, and most of Virginia, is nearer to Richmond.
The list set out in “ Appendix A” shows that out of 478
national banks in the Fifth District (on August 9th, 1913),
212 national banks, having an aggregate capital and surplus
of $51,573,570, and resources of $293,770,622, are nearer
by actual mailing time to Baltimore than to Richmond, while
250 banks, with an aggregate capital and surplus of $49,699,130, and total resources of $258,518,775, are nearer
to Richmond than to Baltimore. Sixteen banks, with an
aggregate capital and surplus of $2,787,000 and total re
sources of $14,837,975, are distant the same number of
hours and minutes from Baltimore as from Richmond. The
56
greater number of banks nearer Richmond, with much iess
capital, surplus and resources, is made up largely of very
small country banks in the remote parts of Virginia and
the Carolinas.
“ Appendix B” shows, from the same figures, that the
average distance in hours from Baltimore to all the national
banking resources of the district is less than the average dis
tance from Richmond. In “ Appendix B” all of the national
banking resources in the Fifth District are twice grouped
by hours; first by the number of hours from Baltimore; and,
second, by the number of hours from Richmond. In each
case all of the national banks in the Fifth District fall into
thirty-one groups. The first comprises only the resources at
a distance of zero from Baltimore to Richmond, respectively,
i. e., the resources of the national banks at Baltimore and
Richmond, respectively (including those at Canton, Catonaville, Pikesville and Towson, in the Baltimore suburbs, con
stituting a part of Baltimore itself so far as mail service is
concerned). The next group (there being no places between
zero and one hour from either Baltimore or Richmond) in
cludes all places not less than one hour nor more than one
hour and fifty-nine minutes from Baltimore and Richmond,
respectively. The next group includes those places between
two hours and two hours and fifty-nine minutes, and so on
up to the last groups. In the case of Baltimore the last group
(from SI hours to 31 hours and 59 minutes) comprises Jonesr
ville, Virginia, alone; in the case of Richmond, also, the last
group comprises Jonesville only, but is the group from 34hours to 34 hours and 59 minutes.
Taking the mean distance (of i y 2, 2% and 3% hours,
etc.) for each group as applicable to all the resources in that
group, multiplying the total resources in each group by such
mean distance, adding the products thus obtained, and divid
ing this total by the total resources in the whole district,
gives the average distance in hours of all the resources (ocf
07
national banks) in the District from Baltimore and from
Richmond, respectively. From Baltimore this distance is
7.3 hours; from Richmond, 8.1 hours.
The natural course of business is all-important; mere dis
tance is relatively unimportant. This was forcibly illus
trated in the testimony before the Organization Committee
of those persons from North and South Carolina whom Rich
mond so cleverly enlisted in its campaign for a Federal
Reserve Bank at Richmond. South Carolina is nearer At
lanta than Richmond; most of North Carolina is as near or
nearer Atlanta. Nevertheless Richmond succeeded in enlist
ing the aid of bankers and business men of North and South
Carolina. Their reason (which they frankly avowed) for
aiding Richmond was that the course of business is from the
south north; they wanted to be connected with a bank north
of them, not with Atlanta, They greatly feared that Atlanta
might be made the Federal Reserve City in a district includ
ing North and South Carolina. They looked to Richmond
to save them from Atlanta ; naturally, they remained loyal
to Richmond, when Baltimore was suggested to them. For
example, Mr. Rhett, of Charleston, South Carolina, replied
that he thought it would be inconvenient to have the bank
at a comer of the district. As a matter of fact, Charleston
is more distant from Richmond than from Atlanta, but Mr.
Rhett and the South Carolina bankers wanted the bank at
Richmond for the very reason that they were alarmed at the
prospect of being put in the Atlanta district (Testimony,
pages 924, 931). Mr. Rhett did not, however, undertake to
say that even in South Carolina (where the supposed disad
vantage of distance should be most felt) there was a uniform
preference for Richmond as against Baltimore. He merely
expressed a belief that from 60 to 80 per cent of the banks of
South Carolina would prefer Richmond (Testimony, page
928). This estimate (though made by a Richmond partisan)
doubtless comes nearer expressing the real business judgment
58
of South Carolina bankers than any mere vote, at a later
stage of such a campaign, reflecting, as such a vote must do,
sentimental considerations and other considerations evoked
by campaigning methods.
Mr. Rhett, however, like Mr. Seay and others from Rich
mond itself, evidently realized that Baltimore is the natural
capital of any district in which Maryland is the most northern
State. In advocating Richmond as the Federal Reserve City,
he, therefore, left Maryland out of his proposed district.
Indeed, his remark (above referred to) as to the inconven
ience of having a reserve bank at a comer of a district, was
made in reply, not to any mention of Baltimore by name,
but to a suggestion from the Secretary of the Treasury: “ Sup
pose you put in Maryland?’7 That, to Mr. Rhett’s mind,
meant that Baltimore, not Richmond, must necessarily be
the Federal Reserve City.
The following resolution of the South Carolina bankers
clearly expresses (1) their fear of being placed in an Atlanta
district, though Atlanta is nearer South Carolina than Rich
mond is; (2) their realization that a district with Richmond
as the Federal Reserve City must lie wholly south of Mary
land; and (3) the importance of the course of business and
the unimportance of mere distance:
“ That the banks of South Carolina favor the forma
tion of a north and south district along the Atlantic
coast, beginning with the southern boundary of Mary
land as its northern limits, and extending from thence,
southward. That the banks of South Carolina deem
it exceedingly detrimental to their interest and the
interests of the State for them to be placed in a dis
trict running east and west, with a reserve city located
to the west of them, such being inconvenient to them
and entirely out of the customary course of their busi
ness.” (Testimony, page 927.)
The President of the North Carolina Bankers Association
said frankly that the North Carolina bankers feared being
placed in an Atlanta district
59
“ I will tell you frankly what we feared. * * * We
wished to be connected north of us, as the entire trend
of our trade is toward the north. We feel as if it
would be almost a calamity to be connected with the
points south of us.” (Testimony, page 912.)
He added that if “ after co-operation with the City of
Richmond” it is found impracticable to secure the location
of a Federal reserve bank in Richmond, the North Carolina
hankers would prefer some other city north of them as second
choice, and that personally his second choice was Baltimore.
(^Testimony, page 913.) This notwithstanding the fact that
Atlanta is, of course, nearer most of North Carolina than
Baltimore is.
One of the North Carolina bankers thus abruptly expressed
his views on the possibility of being connected with Atlanta:
“ Should we be connected with a point south of us,
we would be connected with a dead end * *
(Testi
mony, page 919.)
Another North Carolina banker (who said he spoke for
the bankers of the entire State) , said that “ such a thing as
going south of us to borrow money never occurs to any
bankers in North Carolina,” Whereupon the Secretary of the
Treasury remarked: “ That perhaps shows you are intelligent
bankers in North Carolina.” (Testimony, page 918.)
The Organization Committee (apparently trying to save
the country banks of North and South Carolina from what
they considered the calamity of being connected with a “ dead
end” south of them, and at the same time to gratify the
wishes of the Richmond campaigners), has inflicted upon the
business interests of the commercial metropolis of the entire
district the very calamity which the Carolina bankers have
succeeded in averting, and has attempted to turn back the
natural course of business by making the bankers of Baltimore
do what the Secretary of the Treasury says the North Caro
lina bankers show their intelligence by not trying to do.
60
III.
BALTIMORE IS NOT ONLY THE NATURAL CAP
ITAL OF BUSINESS GENERALLY IN THE
FIFTH DISTRICT, BUT IS ALSO THE NATU
RAL CENTER OF BUSINESS ACTIVITIES HAV
ING SPECIAL RELATION TO THE BUSINESS
OF FEDERAL RESERVE BANKS.
(a)
B a l t i m o r e is a N a t u r a l R e s e r v e C i t y ; R i c h m o n d ,
i n t h e B a n k i n g W o r l d , is a C o u n t r y T o w n a n d t h e
L o c a tio n o f C o u n tr y B a n k s.
The only compulsory relation (other than stock ownership)
established by law between the Federal reserve banks and
the member banks is the deposit of part of the reserves of
the member banks. The only business which these new
banks must have from the time they are established is the
keeping on deposit of reserves in an amount gradually increas
ing up to the permanent amount which will prevail after
three years. One of the many causes for astonishment at
the selection of Richmond as a Federal Reserve City is that,
in a district containing two important reserve cities,, Balti
more and Washington, a country town (to use official bank
ing parlance) should be selected as the Federal Reserve City.
In this case, the place selected had for almost half a century
elected to remain a country town, and not to take advantage
of the opportunity to become a reserve city, with the priv
ileges of a reserve city and the corresponding obligation, on
the part of Richmond’s national banks, to keep a larger reserve
than is required of country banks.
By the Act of 1864, ch. 106 (Rev. Stat., sec. 5191) the
following sixteen cities were made reserve cities under the
National Banking Law:
61
1.
2.
3.
Boston
Chicago
Cleveland
4.
JSTew York
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
Philadelphia
St. Louis
San Francisco
Albany
Baltimore
Cincinnati
Detroit
Louisville
Milwaukee
E"ew Orleans
Pittsburg
Washington
Federal Reserve City under new law.
Not a reserve city under new law.
It is to be observed that Baltimore and JSTew Orleans were
made reserve cities by the Act of 1864 and have been such
ever since, and yet they are ignored in favor of Richmond
and Atlanta, which were not, reserve cities under the old Act
of 1864 at all.
It is further to be observed that by the Act of March 3,
1887, ch. 378, any other city of 50,000 people [changed to
25,000 by Act of March 3, 1903] could on application of
three-fourths of the national banks located in said city, be
designated a reserve city. Tinder this Act a number of other
cities applied until now there are forty-seven reserve cities.
Among them are:
Dallas
Kansas City
Minneapolis
Federal Reserve City under new law.
“
“
“
“
“
“
“
“
“
“
“
“
The only two cities designated as Federal Reserve Cities
under the new law that were not reserve cities under the old
law are Atlanta and Richmond.
62
So here again Baltimore is discriminated against. It has
been a reserve city since 1864.
Richmond was mentioned in the Act of 1864, ch. 106, sec.
31, as being a city that could be added to the reserve cities
whenever in the opinion of the Comptroller of the Currency
the condition of the Southern States would warrant it.
The time for this condition has long since passed, but
Richmond has always failed to make application to become
a reserve city, until after her designation as a Federal Re
serve City under the new law.
In the work of Conway and Patterson on The Operation
of the New Bank Act, published in February, 1914, the
authors expressed what was evidently a universal opinion,
thus:
“ Looked at from another point of view, the prob
lem of the shifting of the reserves of the reserve city
banks is not so serious as would be indicated by the
preceding general comparison. It is practically cer
tain that the three central reserve cities will be selected
for the establishment of Federal reserve banks; and
it is equally certain that the remaining reserve banks
— five in number, if eight are established, and nine in
number if the maximum of twelve are established— will
be located in the reserve cities. In other words, from
five to nine of the forty-seven reserve cities will be the
homes of the Federal reserve banks, and the fortu
nate cities will probably be numbered among the larger
of the forty- seven.” (page 265.)
Richmond bankers themselves evidently realize the incon
gruity of locating a Federal reserve bank among country
banks. They have shown their appreciation of this incon
gruity by the remarkable course of applying to be made a
reserve city since the Committee announced its decision desig
nating Richmond as a Federal Reserve City. This applica
tion the Comptroller of the Currency, with at least doubtful
legality [Federal Reserve Act, sec. 11(e)] granted. By the
63
advertising which they expect to get from the Organization
Committee’s extraordinary decision, and by their own recog
nition of the incongruity of locating a Federal reserve bank
among country banks, the Richmond banks have thus been
induced to ask to be made a reserve city,—which they consist
ently omitted to ask during all the years when the status of
reserve city carried with it advantages as well as responsi
bility. Now this status means (except to a limited extent
for three years) only a permanent increase in the required
reserve of all Richmond national banks, without any 'perma
nent privilege of holding the reserve of other banks or any
other permanent privilege whatever, This belated applica
tion to be made a reserve city displays the sharp contrast
between a natural reserve city like Baltimore (which has
exercised the privileges and borne the burdens of a reserve
city for half a century), and the artificial advantages which
a smaller city, such as Richmond, may expect to get from its
selection as a Federal Reserve City in disregard of the con
venience and customary course of business.
Strange to say, the Honorable Carter Glass and the Organ
ization Committee profess to find, in the fact that Baltimore
was by law a reserve city, an artificial advantage which
Baltimore possessed over Richmond, Just how Baltimore
could get any artificial advantage out of being a reserve city,
a privilege which Richmond or any other city of its size could
have had for the asking!, and which forty-seven cities as a
matter of fact have so obtained, the Honorable Carter Glass
find the Committee do not explain.
We had supposed that the artificiality of the present sys
tem lay, not in drawing reserves to the reserve cities, but in
drawing them from the reserve cities to the central reserve
cities, almost entirely to New York City. The reserve re
quirements exacted of central reserve cities are such that
other cities could not successfully compete as central reserve
cities with New York. Thus the existing system operated
64
still further to concentrate the money of the country in New
York, where there was already the greatest previous concen
tration. The number of reserve cities, originally sixteen, in
creased steadily to forty-seven. The number of central re
serve cities, originally three, has remained unchanged, with
increasing concentration in New York as compared with Chi
cago and St. Louis. This contrast is sufficient to show that
(whatever artificial concentration the present system may
have produced in central reserve cities, particularly in New
York as compared with cities not so well equipped to compete
for the burdensome and somewhat dangerous opportunities of
central reserve cities), the law has produced no such artificial
concentration in reserve cities. Rather has it concentrated
into New York from the reserve cities the resources which
otherwise might naturally have accumulated in a consider
able number of large cities. Indeed, the purpose of the
Federal Reserve Act would seem to be, on the one hand to
decentralize artificial concentration in New York City, and
on the other hand to concentrate, in not more than twelve
places, under unified control by the Federal Reserve Board,
the reserves which naturally (not artificially) had to a very
limited extent been centralized (without any unified control)
in forty-seven reserve cities.
With respect to artificial methods, the truth is that the
Richmond banks have, and the Baltimore banks have not,
regularly employed the most efficient artificial method known
for getting bankers’ deposits, i. e., the payment of interest
on such deposits. The very fact that Richmond has not
been a reserve city, and Richmond banks, as country banks,
have, therefore, been required to keep a reserve of only fif
teen per cent against their deposits, has, of course, made it
easier for them to pay a high rate of interest on deposits
than if they had been subject to the twenty-five per cent
requirement applicable in reserve cities. This is undoubtedly
the reason why Richmond so long omitted to ask for the
65
“ artificial advantage” of being a reserve city. The payment
of interest on deposits kept by other banks is so efficient a
method of getting such deposits that it has generally been
regarded as an efficient method employed by the New York
banks to utilize their opportunities for concentrating the
money of the country in New York City. Baltimore is not
an exception to what has now become a general rule of pay
ing interest on bankers’ deposits. Baltimore banks, however,
generally pay but two per cent, while the Richmond banks
customarily pay three per cent on such deposits. [Testimony,
Mr, Newcomer, pages 738, 741; Mr. Ingle, page 804; Mr.
Sands, page 845.] This unusual rate of interest is mani
festly a most important artificial inducement of deposits by
other banks with Richmond banks.
The fact is, Baltimore is a reserve city because it is a
natural place for country banks to keep accounts under the
existing sytsem. Being a reserve city is the result, not the
cause of other banks keeping accounts in Baltimore. On
October 21st, 1913, the national banks of Baltimore held
bankers’ deposits from the Fifth District amounting to $18,730,000, of which only $7,887,000 were deposits kept by
national banks. [Figures obtained by Mr. Wm. Ingle from
each of the national banks in Baltimore.] That is to say,
less than half of the total bank deposits from the Fifth
District kept with Baltimore national banks were so kept
by banks which could, under the National Bank Act, count
these deposits as reserves. As a matter of fact, doubtless
only a comparatively small part of even this $7,887,000 of
balances of national banks actually represented necessary
reserve of the depositing banks. Accounts kept with reserve
agents are usually, for purposes of exchange and other busi
ness purposes, considerably larger than the minimum re
serve requirements of the law. In other words, country
banks keep their reserve where for business reasons they keep
accounts. They do not keep accounts simply because they
count as reserve. On October 21st, 1913, the 7143 country
banks in the United States had on deposit with approved re
66
serve agents $533,837,506. Of this only $320,138,407 could
be counted as reserve under the law. There was thus on de
posit with reserve agents $213,699,099 which could not be
counted as reserve. The same country banks then held cash
$56,921,542 in excess of the 6% cash reserve required by
law. They, therefore, had $56,921,542 more on deposit
which legally could be counted as reserve, but actually was
not needed to meet reserve requirements. This makes a
total of $270,610,641 either not available or not needed for
reserve /requirements. The actual balances with reserve
agents were thus more than twice the minimum, reserve re
quirements of the National Bank Act.
On October 21st, 1913, the total bank deposits with all
the banks and trust companies in Baltimore was $37,861,201.
In Richmond the corresponding figure was $12,634,413. The
fruit of the efforts of the Richmond banks to get bank de
posits by paying an unusually high rate of interest would
seem to be that, while the individual deposits of Richmond
banks are less than one-fifth the individual deposits of Bal
timore banks, the bank deposits are one-third the amount of
such deposits kept with Baltimore banks without such in
ducements.
(& )
B a l t im o r e
C enter
the
in
the
T
espects
in
D
the
D
it
ank
P
the
P r in c ip a l
is t r ic t , b u t is a l s o t h e
the
resents
is t r ic t
B
only
olum e
hrough
d is c o u n t in g
B
wot
G reatest V
t e n d in g
R
is
for
op
D
C
In
is t r ic t .
L ar g est
the
the
o m m e r c ia l
D
N
ew
F
a n k in g
C enter
of
C r e d it s E x
T
hese
T
wo
O p p o r t u n it ie s
evelopm ent
u s in e s s o f t h e
B
of
ederal
the
R
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eserve
.
We repeat, the Federal reserve banks constitute not an
independent system but a very important addition, super
imposed upon our present banking system, and intended to
render service, directly or indirectly, to all existing banks
and all existing business. The natural location of such
banks is, therefore, primarily where business is concentrated
67
and where business from other points flows,— without special
reference to the particular kinds of business or the particular
kinds of banking most prominent at such, a point. The new
system is not designed to prohibit or compulsorily to restrict
existing current banking transactions of any kind. It is in
tended to put (to a much greater extent than heretofore)
in the class of liquid assets (and, therefore, in the class of
assets that can be most freely and most widely dealt in)
commercial paper, which under the present system and pre
vailing customs is at a disadvantage in this respect. In open
ing a channel for the general rediscounting of commercial
paper, the new law should undoubtedly make it easier for
banks to extend their loans on commercial paper where the
needs of business call for such extension. The primary
effect, however, of extending the liquid character of com
mercial paper is essentially to aid all banking and to aid all
business, even where further extensions of commercial credit
are not needed.
Banking itself is essentially a liquid businiess. Whatever
makes more easy the current of any part of the business cor
respondingly eases the flow of the whole business. For ex
ample, in a given locality the banks may already be extend
ing substantially all the credit needed on commercial paper.
In the same locality there may be actual need for increased
collateral loans, in form similar to the stock exchange loans
in New York, but; in fact (particularly in Baltimore and in
the South) often representing bona fide industrial advances.
These industrial advances take the form of loans to a cor
poration secured by its own bonds; actually they could not
easily be quickly liquidated, and are likely to run for several
years, in fact for a much longer period than ordinary com
mercial paper. In such a region there would be practically
no ocasion for an extension of loans on commercial paper, in
the sense in which such loans are generally now made. On
the other hand, there would be actual need, for substantial
industrial purposes, of further advances by collateral loans
similar in fonn to mere speculative stock transactions. The
68
new law would, however, doubtless benefit such a locality in
either of two ways. By making existing commercial paper
a more liquid asset, the banks would to that extent be made
more free to extend their loans of the kind that practically
are not liquid assets. Moreover, many of the advances for
industrial purposes which now take the form of collateral
loans might, under the new system, doubtless be financed by
commercial paper. Mr. Warburg stated before the Congres
sional Committee that commercial paper will., because of this
change [the power of rediscount] largely take the place of the
call loans upon collateral securities as the secondary reserve
of our banks, thus making available for the business com
munity a large amount of money which up to the present
time, because of the inherent defects in our banking system,
has necessarily been denied them. [Conway & Patterson,
pages 99-100.]
It is, therefore, essentially fallacious to undertake to ig
nore the totality of business in a city or region, and to pick
out a particular class or classes of business as the kind of
business to be affected by the new Federal reserve system.
This is true for two reasons : (1) Because the increased
fluidity of commercial paper means increased banking facili
ties in every city that has any commercial paper at all,
whether it is necessary to extend that line of business or not;
and (2) because it is impossible to tell how much business
which the necessities of the present system cause to be financed
in other ways will hereafter come to be financed through commercal paper.
Necessarily, therefore, the importance of all business,
rather than any single part; of the commercial business of a
city, is to be emphasized. It is, however, to be said, for what
it is worth, that Baltimore is the center of the greatest vol
ume of the commercial credits which may at least be assumed
to constitute a basis of need for expansion in the handling of
commercial paper by banks, and for1the development of the
rediscounting business by the reserve banks. It is unneces
sary to repeat at this point what has already been said as to
69
the jabbing business and manufactures in Baltimore, and the
thousands of accounts kept in the south. These accounts con
stitute a great mass of commercial credit, which is now
financed through Baltimore merchants on their own credit,
but may possibly in the future be financed through the
rediscounting functions of the Federal reserve banks.
(c )
As
W
P
the
D
it h
Land W
ton,
R
D
N
of
the
is t r ic t ,
ork,
Su c h
W
F
it h
B
ederal
of
N
the
F
cally
U
the
M
E
M
A
I
ncr eased
m e r ic a n
F
C o n n e c t io n s
of
M
em ber
B
P
it h
K
B
u s in e s s
F
a k in g
urchase
A
the
er
ost
C lose
in
oney and
W
it h
the
urposes,
a c il it ie s
P
o s s ib l e
T
hroughout
P
T
;
in
F
r a c t i
the
D
of
E
for
the
D
B
the
se
evelopm ent
G enerally
ank
U
C o n se
it h
evelo pm en t of,
eserve
or
s t a b l is h
D e v e l o p in g
W
F
in
G eneral
ver
rom t h e
r a d e ;; a n d
R
Sale
and
cceptances,
a c il it ie s
the
if t h
P
to
T h ese P
C ontrol O
the
id in g t h e
a n k s in
M
xchange
L oca
F
Stress M
of
e e p in g
for
ederal
the
C o l l e c t io n F
e s u l t in g
o r e ig n
A
atural
for
F
os
S u c c e s s f u l l y C o m p e t in g
m e r ic a n
v e l o p in g , a n d
N
C o- o p e r a t i n g
E
in
the
W
a
A
im e s
B anks
and
C o n d it io n s R
of
quent
of
for
Such
ther
B ank
(1 )
(2 )
o m e s t ic
xchange,
of
T
in
in
eserve
Sy s t e m
Sale
m ent
and
the
O
S uccessfully
is
e v e l o p in g t h e ,
D
arket
arket
and
R
S t a t e s; (3 )
n it e d
e ig n
D
ew
ree
ank
ll
by
C h ic a g o , B
I n f l u e n c in g G e n e r a l M
and
C o n d it io n s ;
lso in
C o m m u n ic a t io n
eans of
is
S outh ,
of t h e
h il a d e l p h ia ,
eserve
u n c t io n s
C r e d it
A
R
ederal
O ther F
and
P
G enerally A
and
B roadest,
it s
ouch
F
if
m portant,
T
Y
ew
C it ie s , B a l t im o r e
eserve
form
I
it h
S eaport
t l a n t ic
E! a s y M
ir e c t a n d
C leveland,
t io n
A
r in c ip a l
and
F
in
D
e
o r e ig n
of
the
D is t r ic t .
The Federal reserve banks are expected to be always
with us, to constitute an integral part of the unified bank
ing system which is to be in operation day in and day out
70
and year in and year out. The principal purpose of Con
gress, however, in devising this addition to our existing sys
tem, was evidently not so much to improve conditions at
ordinary times as to provide a more satisfactory system in
times of stress. The occurrence of panics and the inadequacy
of the present system to deal with panics were undoubtedly
foremost in the minds of Congress, as they have been in the
minds of all who have interested themselves in banking and
financial reform in this country. Except for certain so-called
seasonal strains (which have not been greatly felt since the
panic of 1907), our existing system has been fairly satis
factory in ordinary times. It is in times of stress that the
weaknesses of the present system become manifest. These
weaknesses it was the prime purpose of Congress to cure.
The shifting of reserves from present reserve agents to the
Federal reserve banks, the development of the business of
rediscounting, and the issuance of a new form of currency,
are the features of the new system that have received the
greatest public attention. Of these three features, necessarily
the first, probably to a considerable extent the second, and
perhaps to some extent the third, will characterize the routine
conduct of the business of the reserve banks, and may, there
fore, constitute the greatest volume of their transactions.
In times of stress, however, to perform successfully the
functions required of them, the Federal reserve banks must
go beyond their mere routine business; they must have, and
be able to exercise, broader powers. Primarily, they must be
able to act in unison and to act not only with a comprehensive
grasp of internal conditions in this country, but also with
full knowledge of and as great control as possible over, gen
eral market and money conditions abroad and in the world
markets. Congress has fully recognized these needs and has
provided for them (1) by both the permissive and the compul
sory powers granted to the Federal Reserve Board, and to
the Federal reserve banks themselves, with reference to redis-
n
counting between districts, domestic exchange, collections
and clearances [Section 11 (b), Section 16. (last two para
graphs), Section 13], and (2) by the broad powers, conferred
upon the Federal reserve banks, to engage in so-called “ openmarket operations” of practically every kind, so far as foreign
business is concerned [Section 14], and also by the extension
of the powers of existing national banks with reference to
foreign transactions [Section 13 (paragraph 5) ; Section 25].
Manifestly, Baltimore is, and Richmond is not, naturally
adapted (1) to efficient communication and co-operation with
the other Federal reserve banks, and (2) to the establish
ment and furtherance of foreign relations and connections (on
the part of both the reserve banks and member banks), and
to dealing in foreign exchange and developing the business
of American acceptances in connection with export and im
port business.
With respect to relations between the different reserve
banks, Baltimore obviously not only is geographically nearer,
but already has much more intimate business relations than
Richmond has with Boston, New York, Philadelphia and Chi
cago,— which are the reserve banks with which the reserve
bank of the Fifth District would naturally have the most im
portant. relations. In the matter of mere distance and means
of communication, Baltimore is in direct line of communica
tion with every other Federal Reserve City yet designated.
Baltimore is nearer than Richmond to every other city, ex
cept Atlanta and Dallas. Concerning existing relations be
tween the cities, it; is safe to say that. Baltimore’s relations
are much more intimate than Richmond’s with every other
Federal Reserve City, not excepting Atlanta. Even At
lanta is in direct communication with Baltimore without
going through Richmond.
The fear so strongly expressed
by North and South Carolina bankers of being connected
with the Atlanta district, the emphasis which they lay on
the total absence of banking transactions between Atlanta
72
and the Carolinas, and the fact (readily recognized by the
Secretary of the Treasury) that Atlanta is in a borrowing,
not a lending; district,— all go to show that the relations be
tween the Fifth District and the Sixth District will be much
less important and less intimate than the relations between
most other adjoining districts. These considerations suggest
that, when special interdistrict transactions become neces
sary, both the Fifth District and the Sixth District banks are
much more likely to have business transactions with the more
northern banks at Philadelphia or New York than they are
to have transactions with each other.
Existing relations between Baltimore and the other large
cities of the United States are also important with respect
to the development of the collection and clearance facilities
of the new system. The development of these facilities pre
sent great possibilities— practically free domestic exchange
throughout the United States. The realization of these pos
sibilities depends upon the practical efficiency with which the
Federal reserve banks exercise their powers with respect to
collections and clearance. Their legal powers are ample for
these purposes. Prompt and efficient existing facilities will
not, however, be supplanted, even by nominally free exchange
and collection through the new banks, unless such free service
is also actually efficient. Nothing could be more calculated
to thwart the performance of these functions by the new
system than the designation of Federal reserve cities which
are situated out of the natural current of collections and ex
change.
An illustration of the possibilities of the new system to
effect changes in existing banking arrangements, and also of
the fact that most businesses concentrate in large cities, is
afforded by the bonding companies and by the insurance
business. Baltimore is the place of origin of bonding com
panies. In the year 1913 the three leading Baltimore bond
ing companies paid in losses $8,614,306, had total expenses
78
aggregating $18,784,941, and total income amounting to
$21,254,365, and total assets worth. $25,571,120. [The
Handy Chart of casualty, surety and miscellaneous insurance
companies in America, published by the Spectator Company.]
These companies do business in almost every part of the
world. The nature of the business is such that most of it is
done in or from large cities. Necessarily both in the collec
tion of income and in the payment of expenses such a busi
ness requires frequent- transfers of funds from one place to
another. The transfers most frequent and greatest in amount
are naturally those between the larger cities. The payment
of losses involves not only the same frequency of payments
over almost unlimited area but also (unlike transfers by a
company to itself from one point to another) the additional
element of providing exchange which will be worth par to all
these numerous* payees. Under existing conditions most of
such payments made at distant points in the United States
have to be made in New York exchange. I f the collection
facilities of the new system prove efficient, the bonding com
panies (and similarly all other insurance companies) can
make pay losses anywhere in the United States from ac
counts kept with any member bank, instead of paying by a
New York check or draft simply to make payment at par.
In the case of the Baltimore companies the natural result,
in such event, would be an increased use of Baltimore bank
accounts and consequently increased deposits with Baltimore
banks.
Manifestly the chance of supplanting existing facilities
by the new system would be small if such exchange with
Baltimore and collections at or from Baltimore had to be
made through Richmond. The home office business of the
Baltimore bonding companies and the business of insurance
companies generally are but illustrations of businesses to be
found in a large city like Baltimore, which require banking
facilities, but which, in a smaller city like Richmond, either
u
do not exist at all, or are conducted and use banking facilities
(including collection and domestic exchange) to an extent
at most not relatively greater than the ratio between popula
tion or that between local clearing-house exchanges. In this
case either ratio is, of course, one to five.
With respect to foreign relations, there is simply no room
for comparison between Baltimore and Richmond. Balti
more is one of the most important seaports in this country.
With the opening of the Panama Canal and the growth of
South American trade it will become more important. It
is the most important seaport south of Philadelphia. It
has, and for years has had a large and growing export
and import trade. It is well known in foreign commercial
cities. It has existing relations abroad, which should form
the natural nucleus, through the opportunities afforded by
the new banking system, for the development of increased
banking relations. Baltimore has a very large foreign ex
change. [Testimony, pages 1039, 752. Secretary of the
Treasury; Mr. Levi L. Rue; Mr. Newcomer.] It today
creates foreign exchange, in connection with its exports of
grain and similar products alone, amounting to over $40,000,000 a year. [Supra, page 16.] With the present con
centration of money in New York, this foreign exchange
has to be sold through New York. The natural course of
such foreign exchange would be to follow the goods
from Baltimore. A Federal reserve bank at Baltimore
should be the natural purchaser of any foreign exchange
now created in Baltimore, but now sold through New York.
With the new powers conferred upon member banks to accept
drafts drawn upon them based on the importation or exporta
tion of goods, and the powers conferred upon the reserve
banks to discount such acceptances and to deal in foreign ex
change, each stage of the financing of exports of grain and
other commodities from Baltimore should naturally be con
summated in Baltimore instead of being transacted in New
York as most of it now is. The power of the local banks to
accept drafts drawn by the inland shippers of grain upon the
local commission men who buy (for export) or finance the
sale of this grain, and the opportunity to sell these accept
ances to or have them rediscounted by a Federal reserve
bank, would enable the local banks to extend through accept
ances much larger credit than they can now extend when act
ual money or direct bank credit must be given. The ability
to sell foreign exchange to a Federal reserve bank in Balti
more, or to local banks which could handle such foreign ex
change directly through the local Federal reserve bank,
would remove the need, on the part of Baltimore commisfsion men, to sell or discount their drafts on European pur
chasers in New York. This consequently would remove the
incentive for making their original loans or getting their ac
ceptances in New York rather than from Baltimore banks.
By putting itself in the market for the foreign exchange
that is now regularly for sale in Baltimore, the new reserve
bank would begin business with an important line of foreign
business of this kind, which should moreover constitute the
nucleus of a growing general foreign business. In fact,
primarily by such dealing in foreign exchange can the
regional banks establish balances in Europe, which in times
of stress may give them a much needed control over general
market conditions and may measurably help them to prevent
exports of gold from the United States, or even to bring about
imports of gold.
The existence of present business relations between Balti
more and foreign countries not only offers an immediate field
for existing banking business (i. e., foreign exchange) which
might be availed of by a regional bank in Baltimore. The
fact that Baltimore is already well known commercially in
England and in Europe, should also make it relatively easy
for a Federal reserve bank at Baltimore to establish broader
and more general relations abroad. Baltimore always has been
76
known, and necessarily is now known, throughout England
and Europe, as one of the great American seaports, and a
point to and from which a great part of the European im
ports and exports go. In the last few years Baltimore has
become even better and more intimately known abroad, and
still closer relations have been established between Baltimore
and Europe. Today the majority of the stock of the Con
solidated Gas Electric Light and Power Company of Balti
more is owned in England and in Europe, not by stock
gamblers, but by English investors, who buy these securities
for the income they yield, not to turn them over at a profit of
a point or two above what they pay for them. In this way,
Baltimore is already well known to a multitude of small in
vestors, in England and throughout Europe, not only as a
seaport and trading center, but as the site of important
European investments. Only a year ago' this same Company
made an issue of debenture stock (a form of security popular
in England but previously wholly unknown in this country),
in an authorized amount of $60,000,000, of which $5,000,000
has already been issued and disposed of, principally in Eng
land and in Europe. Baltimore bonding companies, likewise,
are well known abroad, and should, moreover, in their neces
sary transfers of funds in connection with their foreign busi
ness furnish foreign banking transactions which might be
cared for through a Federal reserve bank. When existing
artificial concentration of money in New York is removed,
a Federal reserve bank at Baltimore should enter upon the
exercise of its important open-market operations with a fair
prospect of developing, like the New York, Philadelphia and
Boston banks, its fair share of foreign business. Thus might
it do its part towards establishing potential control (together
with the other Federal reserve banks), over general money
and credit conditions, which would make itself felt in times
of stress.
77
The development of foreign connections, to an appreciable
extent, by a bank with headquarters at Richmond would be
simply out of the question. Richmond is not a seaport. It
has no exports or imports. It is generally unknown abroad.
The only foreign exchange which can be said to originate from
Richmond is exchange in connection with exports of tobacco.
As these goods are actually exported from the port, of Balti
more, or other seaports, Richmond is not generally known
abroad even in connection with the tobacco trade. There is
no opportunity for the establishment of actual business rela
tions between Richmond and Europe, and little even to make
Richmond known in Europe, in the circumstance that Rich
mond is an inland city, which happens to be the headquarters
of a number of tobacco buyers, who buy from Richmond (and
other points in Virginia, North and South Carolina and Ken
tucky), tobacco grown in the fields of Virginia, North Caro
lina or Kentucky, shipped from Baltimore or other seaports,
and paid for in New York exchange.
Mr. Warburg, in an article in the North American Review
[October, 1913, page 540], said:
“ The Owen-Glass Bill contains elaborate provisions
for the development of bank acceptances and for deal
ing in foreign exchange. Both provisions are most
appropriate, for without creating an effective machinery
covering these two items the law would not achieve its
aims.5’
In the same article Mr. Warburg urged that the number of
regional banks be limited to four or six. Without entering
debated territory, on this much debated question of the num
ber of regional banks, it can certainly be said that the inherent
difficulty of maintaining uniform policy and harmonious
action among a large number of regional banks,— especially
with respect to just such matters as the development of bank
acceptances and dealing in foreign exchange— enhances the
importance of locating twelve banks with a due regard to
the customary course of business, including existing relations
between the several cities designated.
78
IV.
M
is c e l l a n e o u s .
The Organization Committee., in a statement issued under
date of April 10th, 1914, undertook to givei reasons in defence
of its action in designating Richmond rather than Baltimore
as the Federal Reserve City in the Fifth District. In the
speech of Honorable Carter Glass on April 8th, 1914, prac
tically the same reasons were stated. Most of these reasons
we have already referred to. Some which we have thus re
ferred to, and others which we have not yet specifically men
tioned, may be considered at this point.
The reasons relied on by the Committee are inconsistent
with the only test prescribed by Congress. Moreover, except
in the cases of Baltimore and New Orleans, these alleged rea
sons were completely ignored by the Committee whenever they
would have led to the selection of a city other than the busi
ness capital of a district.
N
a t io n a l
B anks
and
O
ther
B
anks.
On June 4th, 1913, there were in the United States 29,254
banks, of which 7,473 were national banks. On the same
date the capital, surplus and profits of all banks in the United
State® was $4,448,689,221, and of national banks was $2,045,667,547. The deposits of all banks amounted to $18,010,731,188, and of national banks to $6,021,848,465. In other
words, the national banks constituted in number barely onefourth, in capital surplus and profits less than one-half,
and in deposits one-third of the total banking power of the
United States. (Report of Comptroller of Currency, 1913,
page 46.)
79
All this banking power outside of the national banks was
ignored by the Organization Committee in the figures offered
in support of its designation of reserve cities. In its state
ment of April 10th, the Committee said:
“ It should be borne in mind that the Committee could
consider primarily only the statistics with reference to
assenting banks. In this section of the country [re
ferring to the New Orleans District] as in most others
the assenting banks were the national banks.” (Page
19.)
As we have already pointed out, the new banking system
was not created solely to handle the business now passing
through national banks. The new system is, on the contrary ,
intended to constitute but the governing or regulating part
of one comprehensive system embracing all banks.
The Act requires all national banksi to signify their assent
within a short time. This assent has already been expressed
by practically all the national banks. The Act, however,
carefully avoids imposing any absolute limit of time within
which other banks may become members of the system. It
was certainly never anticipated that State banks and trust
companies would generally, or to any large extent, become
members of the new system within the sixty days prescribed
by the Act. It would be manifestly opposed to the purposes
of Congress to organize the new system on the assumption
that only those banks which have already signified their
assent will ultimately be technically members of the new
system, and that in organizing the new system all the enor
mous banking power outside of the national banks shall be
disregarded.
T
he
P
er
C a p it a T h e o r y .
It is urged by the Committee in justification of their
action that on March 4th, 1914, the capital and surplus of
the national banks of Richmond were twice as much as the
80
capital and surplus per capita of the national banks of
either Baltimore or Washington; the individual deposits in
Richmond national banks $201 per capita as against Balti
more $76, and loans and discounts in Richmond national
banks $279 per capita as against Baltimore $108. (See
page 26, Committee’s Report of Decision).
This is simply juggling with figures. I f it means any
thing, it means that when the per capita of individual de
posits, capital and surplus, or loans and discounts is greater,
by so much is the city having the greater per capita a better
city for a Federal Reserve City. This proves too much. It
proves that Richmond is better entitled to be a Federal
Reserve City than New York, Philadelphia, Chicago or
Cleveland.
Capital and
Individual
Loans and
Surplus per Deposits per Discounts per
Capita
Capita
Capita
Mch. 4, 1914. Mch, 4,1914. Mch, 4, 1914.
$201
Richmond.......... . . $73
$279
New York.........
52
161
227
Philadelphia. . . . . 40
119
153
Cleveland.......... ... 25
72
112
Chicago..............
31
97
154
(Committee’s Report, page 15.)
Thus the per capita theory has nothing to do with the
case. A small town with few banks may show better on a
par capita basis than a very large city with many times the
trade, business and banking resources of the small town.
S tates
and
C it i e s .
Most strangely at variance alike with the Act of Con*
gress, and with the other reasons relied on by the Organiza
tion Committee, and the Honorable Carter Glass, is the
81
curious citation of comparative national bank statistics for
the States of Maryland and Virginia ( Statement of Commit
tee, page 21). This use of figures ignores alike (1) the fact
that cities, not states, are to be designated; (2) the express
authority of the Act to disregard State lines (which author
ity has actually been exercised in the case of the Fifth Dis
trict, as well as in every other district except the First and
the Second) ; (3) the existence of banks other than national
banks; and (4) the Committee’s own favorite per capita
theory. We have already pointed out that the resources of
all banks in Baltimore City alone exceed the resources of all
banks not only in Richmond but in the whole State of Virginia. The Committee limits its comparison to national
banks. Richmond, however, does not embrace the whole
State of Virginia. Even geographically it is not as near as
Baltimore to a great part of the State of Virginia. The per
capita theory is, however, most curiously ignored in this most
curious comparison. Although the State of Maryland has
about one-fourth the area and one-half the population of the
State of Virginia, the Committee’s figures show the capital
and surplus, individual deposits and loans and discounts of
national banks alone to be almost the same in the two States,
i f all banks are considered, the figures for Baltimore exceed
those for the whole State of Virginia
Loans In
t h e
S o u th .
Perhaps the most startling use of figures by the Committee
isi its comparison (page 25) of loans and discounts made by
the national banks of Richmond and Baltimore, respectively,
in “ the thirteen southern States,” — showing a total of over
$33,000,000 for Richmond, and less than $7,000,000 for
Baltimore. At first blush, these figures certainly seem im
posing. On examination, it appears, however, that these
82
thirteen southern (States include nine States south of the Fifth
District, and include Virginia, hut do not include Maryland.
In other words, this imposing comparison really means only
this, and nothing more,— that the Richmond hanks lend more
money in Richmond than the Baltimore hanks do.
These figures are followed by the statement that “ The
figures also show that in these portions of district No. 5 out
side of the States of Virginia and Maryland, the Richmond
national banks are lending twice as much money as all the
national banks in Baltimore and Washington combined.”
This is a good illustration of the utterly fanciful comparisons
resorted to to defend the designation of Richmond instead of
Baltimore. The Act requires the Committee to pay due re
gard to the customary course of business in the whole dis
trict. The district comprises five States, and the District of
Columbia. To compare, therefore, the relative claims of Bal
timore and Richmond, the Committee ignores the three prin
cipal cities in the district (including Baltimore and Rich
mond themselves), and three out of the six territorial divis
ions (including the two principal States, so far as the bank
ing business is concerned). It is difficult to characterize such
a comparison. I f the reserve city for the Fifth District were
to be located on the Pacific Coast, and the choice of a re
serve city for the Twelfth District lay between Baltimore and
Richmond, some such comparison might be very important.
As it is, we fail to understand what possible significance this
comparison can have.
P
oll of
B anks.
Of all the subjects which received elaborate discussion and
consideration in Congress prior to the enactment of the Fed
eral Reserve Act, probably none was more fully discussed
tfian the question how and to what extent the wishes of mem
ber banks are to control the operation of the new system. It
83
is impossible to suppose that anything on this subject which
is either included or omitted in the Act has, been so included
or omitted by inadvertence. It must be assumed that the
elaborate provisions in the Act prescribing and limiting the
powers of member banks as such and the method by which
they may cast their votes measure the full extent to which
Congress intended the operation of the new system to be con
trolled by the votes of member banks.
With 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 matter 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.
This stands to reason. The committee was dealing with the
whole country, and its action as to each city and each district
was to be for the good of the whole system. The wishes of
individual banks might represent their individual interests,
but ignore the interest of others whether in the same or in an
adjoining district. Therefore, the law wisely placed the
determination of the city and district in the hands of a
central committee, whose outlook extended over the whole
country, and even made their action subject to review by an
independent board fairly representing the different commer
cial industrial and geographical divisions of the country. The
proper relation of the parts to the whole was most import
ant, and, therefore, individual preferences; of banks and
financial institutions were to be ignored, and full authority
placed in a central body.
The Committee, without regard to the customary course of
business, has apparently been guided almost entirely by the
supposed wishes of member banks, and directly and indirectly
by consideration of State lines. The Committee not only
ascribes great, indeed controlling, importance to the poll of
84
the national banks in District No. 5; it also1discusses this
poll of banks largely with reference to State lines, concluding
that the wishes of Virginia, North and South Carolina should
outweigh the wishes of Maryland, District of Columbia and
West Virginia. The poll itself and the circumstances under
which it was taken, moreover, demonstrate that sentimental
considerations and other considerations quite apart from the
customary course of business principally determined the re
sult of the poll. In the first place, Richmond, as the senti
mental capital of the South, undoubtedly got a great many
votes entirely regardless of all business considerations. For
similar reasons, the States of North and South Carolina, hav
ing looked to Richmond to save them from Atlanta, doubtless
to a considerable extent would feel constrained by loyalty to
vote for Richmond even as against Baltimore. As a matter
of fact, however, the North and South Carolina bankers evi
dently believed that the contest lay between Richmond and
Atlanta, and did not contemplate the creation of a district
which would include Baltimore. Accordingly only one vote
from these two- States was cast for Baltimore, and three for
Washington, as against fifty-five for Richmond, although Mr.
Rhett, one of Richmond’s advocates from South Carolina,
only ventured the estimate that from 60 to 80% of the South
Carolina banks would prefer Richmond as against Baltimore.
The remaining forty-seven votes from the Carolinas were cast
for Carolina cities.
On the Committee’s own basis of consideration by States,
the State of Maryland was practically unanimous for Balti
more ; the District of Columbia was unanimous for Washing
ton, but, as against Richmond, of course, desired either Bal
timore or Washington, as the Committee itself recognizes
(page 24). West Virginia cast five more votes for Baltimore
than for Richmond, and more votes, each for Pittsburg and
for Cincinnati than for Baltimore, illustrating the fact that
the vote was cast without knowing what would be the boun
85
daries of the District. Unquestionably, as between Balti
more and Richmond, the Committee’s poll shows that Mary
land and the District of Columbia would unanimously and
West Virginia overwhelmingly prefer Baltimore. Except for
sentimental and similar considerations, a large part of Vir
ginia itself and both the Carolinas would prefer Baltimore to
Richmond. The Committee’s own figures (page 25) show that
for the national banks alone in the Fifth District the totals,
both of individual deposits ($174,159,561) and also of capital,
surplus and undivided profits ($62,284,814), of the national
banks (in the Fifth District) in Maryland, West Virginia
and the District of Columbia exceed such totals for Virginia,
North and South Carolina combined (deposits, $150,269,928 ;
capital, etc, $57,404,156). If all banks were included, the dis
parity as against Virginia and the Carolinas would be greater.
(Total capital, surplus and profits, June 4th, 1913, for all
banks in Virginia, North and South Carolina, $115,974,629.30; Maryland, District of Columbia and West Virginia,
$142,353,380.75. [Comptroller’s report, 1913, page 49.]
Deducting one-sixth of West Virginia total, to allow for Pan
handle- banks, leaves over $137,000,000 for Maryland, Dis
trict of Columbia and remainder of West Virginia. National
bank figures for August 9th, 1913, show barely one-eighth of
West Virginia totals in Panhandle counties. Total individ
ual deposits, June 4th, 1913, for all banks in Virginia, North
and South 'Carolina, $299,204,951.43; Maryland and Dis
trict of Columbia alone, $332,928,118.63; Maryland, Dis
trict of Columbia and West Virginia, $458,515,093.13;
Maryland, District of Columbia and five-sixths of West Vir
ginia total, over $437,000,000).
The total vote, regardless of State lines, shows not only
the same effect of sentimental considerations and of the fact
that the voters did not know that the choice lay between Rich
mond and Baltimore, but also' the disparity between the num
ber of banks and banking power. Virginia and North and
South Carolina had two hundred and twenty-four votes;
Maryland, the District of Columbia and West Virginia only
two hundred and seven. This disproportion between the num
ber of votes and the amount of business of all kinds (includ
ing banking) done in these respective parts of the District
results not only (1) from the large number of small country
banks in the Carolinas and Virginia, as compared with the
relatively smaller number of much larger banks in Baltimore
and Washington, but also (2) from the fact that the State
banks and trust companies, which have no vote at all, are
relatively much less important in Virginia than in Baltimore.
Notwithstanding the sentimental and other considerations
not proper to be considered by the Committee, which, how
ever, undoubtedly swelled the Richmond vote, and the in
equality of the whole scheme of voting,— which gave the same
weight to a country bank with $25,000 capital as to the
largest bank in Baltimore and which gave no weight at all
to the trust companies in Baltimore and elsewhere in the
district,— the total vote for Richmond was but thirty-nine in
excess of the vote for Bialtimore, while twenty-five votes
were cast for Washington, thirty-five for Pittsburg, twentyseven for Cincinnati, and two for New York. So far as
business considerations are concerned, any bank which voted
for Pittsburg, Washington or New York should prefer Balti
more to Richmond, to say nothing of the fact that, if business
considerations alone governed, undoubtedly a large number
of the banks in both the Carolinas, as well as a larger number
from Virginia, would vote for Baltimore.
The real facts, therefore, are: (1) That even the vote
taken by the committee fails to show that Richmond would
have received a larger vote than Baltimore had the voters
known that the choice lay between Richmond and Baltimore;
(2) that many of the votes for Richmond were cast for senti
mental and other reasons quite foreign to business considera
tions; (3) that, in professing to follow a vote of member
banks, i. e., national banks, the committee did not follow
the wishes of the banking interests— or even of the national
87
banking interests— in the district, or of the customers of the
banks in the district, i. e., the commercial, industrial and
agricultural public. The wishes of the banking interests of
the district—of the stockholders, depositors and customers—
are in favor of Baltimore, if such wishes are to be ascertained
by any method which makes allowance for the difference
between a small country bank, with few stockholders, few
customers and little business, and a large city bank, with
many stockholders and customers and a very large business.
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 alsoi subordinates
to the wishes of the bankers in the district (i. e., the national
bank officers and directors), the wishes of the owners of the
banks (i. e.} the stockholders) and the customers {%, e., the
general commercial, industrial and agricultural public which
deals with the banks).
The Committee itself, however, has not really been gov
erned to any substantial extent by the votes of member banks
either in dividing the districts or in designating the reserve
cities. If it had been so influenced, Connecticut and New
Jersey would have been put in the New York District, and
West Virginia would have been put in the Fourth District,
with Pittsburg, instead of Cleveland, as the reserve city.
(Congressional Record, pages 7731-7733.)
I n c o n s is t e n c y
of
C o m m it t e e ' s R
F
if t h
D
e a s o n in g in
F
ourth and
is t r ic t s .
The choice of Cleveland in the Fourth District strongly
shows how little real weight the arguments urged by the
Committee as controlling in the Fifth District had in the
Fourth District. The choice of Cleveland is justified by the
following single paragraph:
88
“ The Committee named as cities for the location of
Federal reserve banks New York, Chicago, Philadel
phia, St. Louis, Boston and Cleveland. In population
these are the six largest cities in the United States;
their geographical situation and all other considerations
fully justified their selection.” (Page 24.)
So far as geographical situation is concerned, it will be
observed that Cleveland is on the northern edge of the dis
trict, and is at least no more accessible than Pittsburg to the
other parts of the district. The only other consideration
mentioned is that Cleveland is the sixth largest city in the
United States. That is to say, Cleveland, the sixth city,
with 560,663 persons, is slightly larger than Pittsburg, the
eighth city, with 533,905. Baltimore, the seventh city, with
558,485 (practically the same as Cleveland), is, however,
subordinated to Richmond, the thirty-ninth city, with 127,628 persons—for the alleged reasons which we have already
discussed. It is interesting to note what force these reasons
had in the selection of Cleveland rather than Pittsburg,
which has a population over 95% of that of Cleveland.
District No. 4 comprises the State of Ohio and parts of
Pennsylvania, Kentucky and West Virginia. In Pennsyl
vania the vote was 256 for Pittsburg and 3 for Cleveland.
In Kentucky and West Virginia, Cleveland did not receive
a single vote, and in Ohio itself the vote was 150 for Cin
cinnati to 107 for Cleveland. In the whole district Pittsn
burg received 291 votesi, Cincinnati 194, and Cleveland 110,
out of a total of 685. In capital and surplus the Committee’s
figures for national banks show a total of $14,400,000 for
Cleveland as against $46',714,000 for Pittsburg; individual
deposits, for Cleveland $40,479,025, for Pittsburg $120,260,088; loans and discounts, Cleveland, $62,588\,735, Pittsr
burg $124,568,231. On the per capita basis, the comparison
is, capital and surplus, Cleveland $25, Pittsburg $88; indi
89
vidual deposits, Cleveland $72, Pittsburg $225; loans and
discounts, Cleveland $112, Pittsburg $233.
Of so little consequence to subordinate tbe sixth city to
the eighth city where the reasons now urged to defend the
subordination of the seventh city to the thirty-ninth.
[We, of course, intimate no opinion on the question
whether in fact Cleveland is (when allowance is made for
suburbs or metropolitan district) larger than Pittsburg. We
are not concerned with the accuracy or inaccuracy of the
application by the Committee of the reasons, assigned by it
for its choice of the Federal reserve city in the Fourth Dis
trict. The point we make is that the reasons—whether prop
erly applied or misapplied— relied on by the Committee to
justify its action in the Fourth District, have been ignored
in the Fifth District.]
I stcrease .
The last excuse offered by the Committee for selecting
Richmond instead of Baltimore is that the capital and sur
plus, loans and discounts and individual deposits of the
national banks of Richmond show a greater percentage of
increase in ten years than the same figures for the national
banks of Baltimore. Fundamentally, such a comparison is
unjust to Baltimore, being limited to national banks alone,
thus leaving out of consideration the trust companies, which,
largely for the purpose of financing the development of the
South, have been brought to their present condition in Balti
more. The figures filed as Exhibits ISTos. 4 and 5 with the
brief for Baltimore before the Organization Committee show
an increase in clearings of 72% in the ten year period from
1903 to 1913, and an increase in individual deposits from
April, 1909, to June, 1913, for all banks and trust com
panies in Baltimore of 24%.
90
The Committee, however, properly had absolutely nothing
to do with increases as such. Its own figures show that the
national banks alone in Baltimore have shown a steady in
crease in deposits and resources in the past ten years.
Whether this increase amounts to the same, a greater or a
less percentage of increasle than the corresponding increase
in Richmond is wholly immaterial. The Committee has to do
with the present, not with the past, or with dreams of the
future. It is to be guided by a due regard for the customary
course of business. If, in the remote future, Richmond— or
any other now relatively insignificant city in the district—
should grow larger than Baltimore in population or in busi
ness, so that the customary course of business should be differ
ent from what it now isi, this board may then, under its
powers to readjust districts, change the Federal Reserve City
in the Fifth District to meet the change in the customary
course of business. At present such a future is too remote
even to speculate about.
It is peculiarly idle to compare rates of increase in a large
city and in a city of one-fifth its size. It is a trite and
obvious, but nevertheless adequate, answer to such com
parison, to say that the smaller city has so much more room
to grow that a larger percentage of increase may fairly be
expected. I f percentage of increase were to be accepted as a
criterion, probably most of the twelve Federal Reserve Cities
would be in Oklahoma. Even in the Fifth District doubtless
some boom towns can be found which would stand ahead of
either Richmond or Baltimore. Richmond is by no means
a boom town, either in age or characteristics. It is, how
ever, but the simple truth to say that, as Baltimore began
earlier to recover from the effects of the Civil War, while
Richmond was late in making such beginning, it would be
but natural that Richmond’s recovery thus longer deferred,
should now, for a time at least, proceed at a relatively
higher rate than the increase of Baltimore, which has
91
proceeded along more even and normal lines for many years.
However this may be, it is futile to speculate on the oblitera
tion— within any time that could now be remotely foreseen
— of the difference in population and business which now
exists between Richmond and a place five times as important.
This test, moreover, is a purely accidental one, which
proves nothing, and which, the Committee’s figures show, in
no sense influenced its decisions. Of the twelve cities desig
nated as Federal Reserve Cities, the capital and surplus of
the national banks of San Francisco show an increase from
1903 to 1913 of 300%. The same figures for Cleveland show
a decrease of 6.5%, and for Boston an increase of 2.7% ; for
Baltimore the increase was 4.4%. In loans and discounts
the increase for San Francisco was 313%; for Cleveland,
24% ; Boston, 21% ; St. Louis, 22%, and for Baltimore,
35%. In individual deposits the increase for San Fran
cisco was 308% ; for St. Louis, 32% ; Philadelphia, 33% ;
for Baltimore, 38%, and for New York City, 41%. (State
ment of Committee, page 12.)
B
ranch
T
heory.
In the examination of witnesses who testified before the
Organization Committee in favor, respectively, of Washing
ton, Baltimore, Richmond and Philadelphia, the witnesses
were frequently asked by the Secretary of the Treasury, or
by the Secretary of Agriculture, whether the particular city
then being urged before them as a Federal Reserve City
would not be as well served by a branch bank, the idea seem
ing to be that if a city could be served by a branch bank, it
did not make much, if any difference, where the “ headquar
ters” or “ parent” bank was located in the district.
This view contains, of course, a very transparent fallacy.
Branch banks are provided for by Sec. 3 of the A ct:
92
“ Each Federal reserve bank shall establish branch
banks within the Federal reserve district in which it is
located * * *. Such branches shall be operated by a
board of directors under rules and regulations ap
proved by the Federal Reserve Board * * *. Four of said
directors shall be selected by the reserve bank and three
by the Federal Reserve Board * *
It seems mandatory for the reserve bank to establish
branches in its district, although no time is fixed for this,
nor is the selection of the places where the branches shall be
established governed by any rules other than the judgment
or discretion of the reserve bank of the district.
The question of the location of branch banks does not come
before the Organization Committee at all. They have no
power to designate them. Their only concern is with the
location of the Federal Reserve Bank in the district and to
accomplish this duty they are enabled by the Act to employ
experts and take testimony.
I f this were not so, the purposes of the Act could be frus
trated, and Federal reserve cities be selected from personal,
sentimental or political reasons under the specious plea that
the real city of the district entitled to the parent bank could
fairly well be served by a branch bank. For example,—
Albany, Harrisburg and Richmond, could be selected as the
homes of the parent regional banks, whilst New York, Phila
delphia and Baltimore could be served by branch banks.
In this way, and under this theory, the commercial metrop
olis of the district, where the greatest amount of trade and
commerce centers, could be ignored.
This is, of course, not only contrary to the meaning of the
Act, but contrary to reason. The branch is always inferior
to the main thing of which it is the branch. This is clearly
perceived by the bankers who testified before the Committee.
Thus, Levi L. Rue, President of Philadelphia National
Bank and Chairman of the Clearing House Committee of
Philadelphia, in substance says on this point:
93
a* * *
question you have got to solve,—where
is the logical and best place to establish the head office.
The head office ought to be where trade is concentrated,
and where the vast amount of trade passes, because there
a bank can more properly fulfill its functions.” (Page
1070.)
“ The management of the head bank have got such
tremendous problems to deal with in extending credit to
any section which belongs to them. They must be men
that are in touch with the great flow of trade and com
merce. They must be men that have broad knowledge;
men who are, I say, in touch with things and where the
great commerce of that district concentrates. They
must be. Now that naturally is true of the metropolis
of the District.” (Page 1075.)
Even after Mr. Seay, who testified for Richmond, and
wrote the Richmond brief, had admitted in his testimony
that Richmond might be as well served by a branch bank,
though the country tributary thereto might not (page 866),
the Richmond advocates felt that a mistake had been made
and put up Mr. Oliver J. Sands, President of American
National Bank, Richmond, to counteract this idea. He says
that “ a branch bank would only operate and care for the par
ticular location in which it served, and its lines of influence
would be more or less limited” (page 899). “ Those of us in
practical business here who have had to deal with branches,
know that it is not possible under the ordinary operations of
business, to operate branches with the same facility and dis
patch in handling business that you can with the head office,
because that is the court of last resort.” (page 898.) Mr.
Sands thought Richmond better for a headquarters bank, as
he claimed that Baltimore was four and a half to five hours
further from all the southern points, and meant the loss of a
day’s business to the bankers of the south, an argument which
might have had some little force in it when the northern edge
of the district was proposed to be the Potomac River, but of
94
no force at all with; the district as now constituted. (Page
898.)
There is no logic or reason in making Richmond the head
quarters. and Baltimore the branch. It would be like the tail
wagging the dog.
E
ffect
of
A
ctual
E
s t a b l is h m e n t
of
B
ank
at
R ic h m o n d .
Ooqi this review, the fact of the actual establishment of the
bank at Richmond, of course, should have no effect. The
review of the decision of the Reserve Bank Organization Com
mittee by the Federal Reserve Board was intended to be a
real review. In the absence of any rules of procedure it is
not specified whether the method of review shall be by appli
cation to the Committee or to the Federal Reserve Board when
constituted. Pending, however, the appointment and organ
ization of this latter Board no rights of review can be lost or
impaired by any proceeding of the Committee.
All this is fully set forth in the protest of the Banks of
Baltimore to the Reserve Bank Organization Committee of
April 29th, 1914, in which they were asked not to organize
the Federal Reserve Bank for the Fifth District at Rich
mond, nor to proceed to collect subscriptions on the stock.
The Committee replied that the statute made it mandatory
for them to proceed with the organization of the bank at Rich
mond, basing their contention on the use of the word “ when.”
“ When the minimum amount * * * shall have been subscribed
and allotted, the Organization Committee shall designate any
five banks * * * to execute a certificate of organization,” etc.
[Section 4].
The word “ when,” however, in this context does not mean
“ at the very moment.” The word fixes a time before which
the bank cannot be organized. It cannot be organized until
95
the minimum amount prescribed by the Act shall have been
subscribed and allotted. When this is done, it shall be the
duty of the Organization Committee to appoint the five banks
to execute the certificate of organization; but not that this
duty must be exercised on the very day the minimum amount
is subscribed. In other words the subscription of the mini
mum amount is a condition without which they cannot organ
ize the bank.
The word “ when” frequently has this meaning in statutes.
40 Cyc. 921.
However this may be, it is quite certain under the statute
that the Organization Committee had in their hands the ques
tion of the time when the first one-half of the subscription
should be paid. There was no reason for making a call pend
ing this application for review.
The correspondence referred to is herewith inserted.
A
p r il
29 t h , 1914.
To the “ Reserve BanJc Organization Committee
Gentlemen:—
The Regional Reserve Bank Committee of Baltimore, rep
resenting all the citizens of Baltimore, respectfully pray for
a review of your decision designating the City of Richmond,
instead of the City of Baltimore as the Federal Reserve City
in the Fifth Federal Reserve District, under the Federal
Reserve Act; and hereby also give notice that a similar
application for Review will be made to the Federal Reserve
Board as soon as it is constituted and organized, and under
such form of procedure as it may provide.
The Baltimore Committee calls attention to the fact that
ihe proposed bank at Richmond is using every effort to per-
96
feet an organization so that it will be the more difficult for
the Federal Reserve Board to effectively review your decision.
The Baltimore Committee suggests that this is an injustice
which should not be allowed, and its prevention lies in your
hands.
When the Act of Congress gives a right of review from
your decision to the Federal Reserve Board, which will be
one of the most powerful, and it is expected, most highly
efficient organizations in this Country after the Supreme
Court of the United States, and, perhaps, the Interstate
Commerce Commission, it means a real bona fide right of
review, unobstructed and unhampered,— it means that, the
Board of Review shall approach the examination of the
question submitted with the view of deciding, under circum
stances free from all embarrassment, whether the Reserve
Bank Organization Committee has designated the Federal
Reserve city in question, in accordance with the spirit and
letter of the Act of Congress, and in such a way as toi sub
serve and not partially to frustrate the real objects of the1Act.
The Baltimore Committee suggests that it is not respon
sible for any delay in starting proceedings for review, but
that such delay is occasioned solely by the fact that the
Federal Reserve Board, which is to hear and decide the
application for review, has not yet been constituted.
It would seem, therefore, grossly unjust that pending the
period of waiting for the appointment and organization of
the Federal Reserve Board, the projected bank at Richmond
should with your official help and assistance be allowed to
perfect an organization under the Act of Congress as if the
decision of the Reserve Bank Organization Committee was
final. This method treats the application for review, which
it was well known would be formally made, as amounting to
nothing,— and really helps to prejudge the case.
97
Up to the present time, subscriptions to stock in the Fed
eral Reserve Bank of Richmond have been made. This is
really no obstruction to a review, as the bank is really the
Federal Reserve Bank of the Fifth District, and would be
the same bank, except in name, even if Baltimore were desig
nated as the result of the Review as the Federal Reserve City
of the Fifth District. In the contemplation of the Act, the
bank would be the same, the only change being the change of
came from “ The Federal Reserve Bank of Richmond” to
“ The Federal Reserve Bank of Baltimore.”
But the Act of Congress puts the collection of the sub
scription and the Organization of the Bank as a corporation
in your hands
The Act provides:—
“ One-sixth of the subscription to be payable on call of
the Organization Committee or of the Federal Reserve
Board, one-sixth within three months and one-sixth within
six months thereafter, and the remainder of the subscrip
tion, or any part thereof, shall be subject to call when
deemed necesary by the Federal Reserve Board, said pay
ment to be in gold or gold certificates.”
So that you have in yooir hands the question of the time
when the first one-half of the subscription shall be paid.
Yon have further in your hands the time when the Bank
shall be allowed to organize and become a corporation, cap
able of enforcing its subscriptions to stock.
The Act of Congress gives you the right to select five banks
to execute a certificate of organization therein fully described,
and it is only on the due execution of this certificate and on
its being filed with the Comptroller of the Currency that said
Federal Reserve Bank becomes a corporation. This is what
we meant by stating that it was only by your official help
and assistance that the projected bank at Richmond could
perfect its organization.
98
So the question comes to this: Is it just to Baltimore to
officially assist the organization of the projected bank at
Richmond, thereby giving matters a set and apparent con
clusiveness, pending the hearing of the application for Review
before a Board not yet constituted ?
We respectfully suggest that it is not just nor right.
The application of Baltimore for a review is bona fide and
earnest. She is fully convinced that the spirit and letter of
the Act of Congress have not been followed in the designation
of Richmond; that it amounts to an official attempt to* turn
back the ordinary and usual course of trade and business,
that it is taking from Baltimore that to which her pre-emi
nence as the financial and trade center of the Fifth District
entitle her; and she only asks that she be allowed to present
her case fully and completely before the Federal Reserve
Board, unembarrassed and unhampered by any further organ
ization of the Bank of Richmond.
The Baltimore Committee, therefore, respectfully requests,
in view of the aforegoing statement, that the “ Reserve Bank
Organization Committee” shall do nothing further toward
officially assisting in the organization of the bank at Rich
mond until the application for review be fully heard and
decided.
E dgar H . Gans,
AND
Charles M ar k ell,
of Gans & Haman,
Counsel to Baltimore Committee.
99
R
eserve
Bank
W
O r g a n iz a t io n
a s h in g t o n ,
C o m m it t e e .
D. C.,
M
ay
1, 1914.
Messrs. Gans & Haman,
Counsel to Baltimore Committee,
1137 Calvert Building,
Baltimore, Maryland.
Sirs:—
On behalf of the Reserve Bank Organization Committee,
I beg to acknowledge the receipt of your letter of April 29 th,
and to advise yon that the same has been submitted to and
considered by the Committee.
You request on behalf of the Regional Reserve Bank Com
mittee of Baltimore:
First: That the decision of the Reserve Bank Organization
Committee designating Richmond as the Federal Re
serve City for District No. 5, be reviewed by the Com
mittee.
'
Second: That pending an application to be made by your
Committee to the Federal Reserve Board when organ
ized for a review of the Committee’s decision that no
steps be taken by the Committee in the matter of the
organization of the Federal Reserve Bank of Rich
mond.
In response to your first request, your attention is directed
to that part of Section 2 of the Federal Reserve Act, which
provides that:
«* * * ‘The Reserve Bank Organization Committee’
shall designate not less than eight nor more than twelve
cities to be known as Federal Reserve Cities, and shall
divide the continental United States, excluding Alaska,
into districts, each district to contain only one of such
Federal Reserve Cities. The determination of said Or
ganization Committee shall not be subject to review except
by the Federal Reserve Board when organized
100
The Committee has already filed the certificate required by
law with the Comptroller of the Currency designating the
several Federal reserve cities and defining the geographical
limits of the districts to be served. Accordingly the matter is
no longer in its hands, and under the clear provisions of the
Act its determination is reviewable only by the Federal
Reserve Board when organized.
In response to your second request that the Organization
Committee defer the organization of the Federal Reserve
Bank of Richmond until Baltimore has submitted its appeal
to the Federal Reserve Board when organized, I am in
structed to direct your attention to that part of Section 4 of
the Federal Reserve Act, which reads as follows:
“ When the minimum amount of capital stock prescribed
by this Act for the organization of any Federal Reserve
Bank shall have been subscribed and allotted, the Organ
ization Committee shall designate any five banks of those
whose applications have been received, to execute a certifi
cate of organization, and thereupon the banks so designated
shall, under their seals, make an organization certificate
which shall specifically state,” etc.
I am also instructed to direct your attention to that part
of Section 2 of the Federal Reserve Act, which reads as
follows:
“ When the Organization Committee shall have desig
nated the cities in which Federal Reserve Banks are to be
organized, and fixed the geographical limits of the Federal
Reserve Districts, every national banking association with
in that district shall be required within thirty days after
notice from the Organization Committee, to subscribe to
the capital stock of such Federal Reserve Bank in a sum
equal to six per centum of the paid-up capital stock and
surplus of such bank, one-sixth of the subscription to be
payable on call of the Organization Committee or of the
Federal Reserve Board, one-sixth within three months,”
etc.
101
Pursuant to this provision of Section 2, the Organization
Committee gave notice on April 8th to all national banks
which had signified their intention of entering the Federal
reserve system that the applications provided for stock in
the banks of their respective districts should be filed with
the Committee within thirty days as prescribed by law. The
time limit will accordingly expire on May 8th, and accord
ing to the mandatory provision of Section 4, above referred
to, the Committee is required to> designate five banks
exe
cute the organization certificate and is not empowered by any
provision of the Federal Reserve Act to waive or disregard
this obligation at the request of the representatives of any
city.
Your petition for review will be called to the attention of
the Federal Reserve Bloard as soon as that body has been
organized. It is not probable that the Committee will call
for the payment of any installments of the subscriptions to
stock of any Federal Reserve Bank before the organization of
the Federal Reserve Board, but under its interpretation of
the sections referred to its duty to proceed with the organiza
tion of all Federal Reserve Banks is mandatory and not dis
cretionary, and accordingly your request must be denied.
Respectfully,
M . C. E
l l io t t ,
Secretary, Reserve Bank Organization Committee.
C o n c l u s io n .
The people of Baltimore (as well as great numbers of
people throughout the United States) feel that a great mis
take has been made. They are seeking in manner prescribed
by law to have this mistake rectified. How the mistake was
made is immaterial. The important thing is that it be cor
102
rected. Justice to Baltimore demands this. The success of
the new system requires it, in order that the people of the
United States may be assured that the new system is to be
administered with a strict impartial adherence to the letter
and spirit of the law, and is not, at the very outset, to be
controlled by considerations (even though they may be enter
tained in good faith) utterly inconsistent with the law.
We respectfully submit that this Board, reviewing the
decision of the Organization Committee, should designate
Baltimore as the Federal Reserve City in the Fifth Federal
Reserve District.
EDGAR H. GANS,
AND
CHARLES MARKELL,
of
Gans & H
am an,
Counsel for the Regional Re
serve Bank Committee of
Baltimore.
Appendix.
Droduced from the Unclassified I Declassified Holdings of the National Archives
‘APPEN DIX A.”
LIST OF ALL CITIES IN THE FIFTH FEDERAL RESERVE DISTRICT IN WHICH A NATIONAL BANK IS LOCATED, W ITH NUMBER OF
NATIONAL BANKS, AGGREGATE CAPITAL AND SURPLUS AND TOTAL RESOURCES OF ALL NATIONAL BANKS IN THE FIFTH
DISTRICT, W ITH ACTUAL MAILING TIME BETWEEN EACH PLACE AND BALTIMORE AND RICHMOND, RESPECTIVELY.
( A l l F i g u r e s , a s o f A u g u s t 9tii , 1913, f r o m 1913 R e p o e t o f C o m p t r o l l e r o f t h e C u r r e n c y .)
BANKS EQUIDISTANT FROM
BALTIMORE AND RICHMOND.
C a p it a l a n d
Su rplus.
T otal
R eso urces.
9*x
3
trl S'®
P-l rl
Oo
be 9 g
■9*2 1
a
3
^PQPh
BANKS NEARER TO RICHMOND.
BANKS NEARER TO BALTIMORE.
® .
C a p it a l an d
Su bplus.
EHS
a
•§
P
3S p0q
3
T otal
R esources.
hrs. min.
C it ie s
in
F if t h
F ederal R eserve
be
C a p it a l a n d
T otal
•fH
C3
a
Su rplus.
R esources.
ar
D is t r i c t .
hrs. min.
hrs. min.
M aryland.
60,000
378,000
19,760,720
40,000
199,200
28,500
35,000
272,000
105,500
100,000
255,000
37,500
80,000
30,000
61,000
1,115,000
252,500
435.000
210.000
130,000
$ 330,683
1,561,050
110,896,349
261,521
1,416,242
85,424
363,189
2,029,464
1,077,912
643,331
1,205,696
237,127
820,593
174,072
452,357
7,701.407
1,271,903
2,036,011
1,723,123
870,251
1
1
16
1
3
1
1
3
1
1
2
1
1
1
1
4
2
2
2
1
$23,584,920
$135,157,705
46
$
1.30
1.50
0.00
7.00
1.50
6.30
3.00
8.00
0.00
0.00
3.30
3.30
6.00
4.00
1.00
6.00
4.00
5.00
200
1.00
. . . . A berdeen ---. . . Annapolis . . .
. . . Baltimore . . .
___ Bel A i r ____
. . . Brunswick . . .
... Cambridge ...
. . . . Canton . . . .
... Catonsville ...
... Centreville ...
.Chesapeake City.
... Chestertown ...
.. .Clear Spring...
.. Cockeysville ..
... Cumberland ...
. . . . Denton . . . .
....... Elkton ....
.. .Ellicott City...
.Carried Forward.
9.00
11.00
5.00
14.00
13.00
16.00
5.30
20.00
5.00
5.00
12.00
13.00
15.00
12.00
8.50
8.30
14.00
14.20
1000
9.00
Reproduced from the Unclassified / Declassified Holdings of the National Archives
“ APPE N D IX A ” — Continued.
BANKS NEARER TO BALTIMORE.
BANKS NEARER TO RICHMOND.
hrs. min.
Cities in F ifth
F ederal R esebve
D istbict.
hrs. min.
hrs. min.
Maryland.
$23,584,920
30,000
830,000
55,000
245,000
75,000
42,000
590,000
30,000
40,000
175,000
50,000
38,000
44,000
110.000
60.000
30,000
30,750
50,000
30,500
50,000
50,000
$135,157,705
103,022
6,764,939
310,867
2,216,339
309,475
178,490
3,532,785
200,069
235,589
1,238,132
280,232
184,181
317,884
525,020
454,888
157,406
106,143
258,829
198,653
591,406
378,144
46
1
3
1
2
1
1
3
1
1
2
1
1
1
1
1
1
1
1
1
1
1
$26,240,170
$153,700,198
73
Number of Banks,
R esoubces.
Mailing Time
(Richmond).
T otal
Surplus.
Mailing Time
(Baltim ore).
R esoubces.
Capital and
Number of Banks.
Surplus.
T otal
Mailing Time
(Baltimore &
Richmond).
Capital and
Number of Banks.
j
BANKS EQUIDISTANT FROM
BALTIMORE AND RICHMOND.
Capital and
T otal
Surplus.
R esoubces.
1
j
Brought Forward
7.30
4.30
9.30
8.10
2.00
13.00
4.00
2.00
4.00
2.00
1.00
8.00
3.00
1.00
9.45
7.00
5.00
7.00
3.30
3.30
7.00
.. Federalsburg ..!
. . . Frederick . . .
.. Friendsville ..
__ Frostburg
.. Gaithersburg ..!
... Grantsville ...
.. Hagerstown ..
... Hampstead ...
.... Hancock __
.Havre De Grace.
... Hyattsville ...
. Kitzmillerville .
. . . . La Plata. . . .
....... Laurel .......
.. Leonardtown ..
... Lonaconing ...
. Mechanicsville .
. . . . Midland . . . .
. . . Monrovia . . .
. . . Mount Airy. . .
...Mount Savage...
.Carried Forward.
19.30
11.00
16.00
11.10
4.30
19.00
13.00
12.00
12.00
10.00
5.00
13.00
14.00
5.00
21.00
14.00
16.00
14.00
8.30
8.30
14.00
i
“ APPEN DIX A ” — Continued.
BANKS EQUIDISTANT FROM
BALTIMORE AND RICHMOND.
T otal
Su rplu s.
R esoubces.
1
tA
Ca p it a l an d
T otal
Surplus.
R eso urces.
hrs. min.
. ' !V I '
Mailing Time
(Baltimore).
Ca p it a l an d
ej
M
0
00
C
cj
Mailing Time
(Baltimore &
Richmond).
EC
X
0
BANKS NEARER TO RICHMOND.
BANKS NEARER TO BALTIMORE.
<w
o
u
OJ
.Q
a
E3
£ hrs. min.
Cities in F ifth
F ederal R eserve
Ca p it a l an d
T otal
D istrict.
Su rplus.
R eso urces.
h rs.
m in .
M aryland.
-....
......................
........
........
........
........
........
i
!
i
$26,240,170
80,000
38,000
187,500
30,000
31,000
158,000
35,000
160,000
125,000
200,000
175,000
41,000
26,000
181,000
93,000
42,000
1S7,500
32,000
55,000
80,000
465,000
$153,700,198
283,592
221,384
1,106,785
198,914
317,965
939,272
159,227
875,331
654,692
1,099,374
915,790
133,108
i <>9.985
1,000,695
481,160
533,042
1,159,058
364,747
509,580
471,604
1,731,513
73
1
1
2
1
1
2
1
2
1
1
2
1
1
2
1
1
2
1
1
1
3
$28,662,170
$166,987,025
102
Brought Forward
2.00
2.00
8.00
1.30
0.00
7.30
4.00
3.00
3.30
2.00
6.00
3.00
2.00
7.00
3.00
2.30
0.00
2.00
2.00
6.45
2.00
..New W indsor..
. . .North East.. .
.... Oakland . . . .
. . . . P a rk to n ___
. . . Pikesville . . .
..Pocomoke City..
... Poolesville ...
... Port Deposit...
. .. Rising Sun.. .
. . . Rockville . . .
. . . Salisbury .. .
..Sandy Spring..
.. Silver Spring..
.... Snow Hill....
. . . Sykesville . ..
.. . Thurmont . ..
. . . . Towson . . . .
..Union Bridge..
.Upper Marlboro.
.. Westernport ..
.. Westminster ..
.Carried Forward.
10.00
10.00
11.00
9.20
5.00
8.45
6.30
11.00
11.30
4.30
9.00
7.00
4.30
22.00
8.00
10.30
5.00
10.00
13.00
11.00
10.00
Reproduced from the Unclassified / Declassified Holdings of the National Archives
“ APPE N D IX A " — Continued.
m in .
h r s.
F if t h
|
F e d e b a l R e se b v e i
D is t b i c t .
h r s.
m in .
m in .
B an ks.
R esoubces.
in
NEARER
TO
R IC H M O N D .
C a p it a l an d
T otal
Su bplu s.
R esoubces.
of
Su b p l u s .
C i t ie s
Mailing
T im e
(R ic h m o n d ).
T otal
B an ks.
C a p it a l an d
BANKS
|
Number
j
B A L T IM O R E .
Mailing
T im e
(B a ltim o r e ).
Number
h r s.
TO
of
R esoubces.
NEARER
Number
Subplus.
BANKS
Mailing
T im e
(B a ltim ore
&
R ic h m o n d ).
T otal
of
Ca p it a l a n d
B an k s.
B A N K S E Q U ID IS T A N T F R O M
B A L T IM O R E A N D R IC H M O N D .
M abyland.
,
$28,662,170
32 500
120,000
32,000
$166,987,025
218,428
452,995
223,494
102
1
1
1
130
400
3 30
W h ite H a l l . . .
W ill ia m s p o r t ..
. . W o o d b in e . . .
9.20
7.00
8.30
11,669,000
60,331,889
12
1.30
1'
D i s t . of C o l u m b i a
4.00
Brought Fortvard
V ir g in ia .
$ 177,500
13.00
$ 921,692
172,750
575,000
3,739,242
3
87,500
39,000
463,395
210,525
1
14.00
1,103,953
27,750
$850,250
$2,025,645
1
2.30
7.45
19.00
4.20
10.20
3
$41,244,920
173,683
$232,800,676
1
123
9.40
9.40
9.40
5.00
. . . A b in g d o n . . .
. . A le x a n d r ia . . .
. . . . A lta v is ta . . . . .
. . A p p a la c h ia . . .
. . . B e r r y v i ll e . . .
. . . B la c k s t o n e . . .
........ B r is t o l .........!
. . . B roadw av
. . . B uchanan . . . i
. . . B uena V is ta . ..
. C h a r lo t te s v ille .
.Carried Forward.
3.30
7.00
22.30
6.20
3.45
9.00
10.10
9.00
4.40
1
$ 66,000
$250,549
1
74,000
390,278
1
25,000
95,787
1
3
60 000
504,000
245,805
2,471,296
7
$729,000
$3,453,715
“ APPE N D IX A ” — Continued.
BANKS EQUIDISTANT FROM
BALTIMORE AND RICHMOND.
R eso urces.
&
£i
a
£
C a p it a l an d
T otal
PQ
Su rplus.
R esources.
Z
o>
.a
a
s
&
hrs. min.
31,000
$2,025,645
118,007
3
!
1
j
12.45
$41,244,920
$232,800,676
123
....
I
i
1 ....................
|
130,000
!
|
i
50,000
....................
1,386,285
247,116
i ....................
$381,250
$2,143,652
4
80,000
482,251
!
68,700
I ....................
582,225
35.500
27.500
252,404
129,816
1
1
1 $41,636,620
$235,880,773
131
Z
D istrict.
10.15
9.10
20.00
9.40
10.00
5.00
8.00
7.15
14.30
6.15
10.20
3.50
5.00
15.00
17.00
4.30
16.00
8.00
8.00
u
Ca p it a l an d
T otal
Su rplus.
R esources.
.a
FI
3
i
7
Brought Forward
13.30
....................
hrs. min.
F ederal R eserve
V ir g i n i a .
m
a
oj
M
o
Cities in F ifth
hrs. min.
j
$350,250
BANKS NEARER TO RICHMOND.
Mailing Time
(Richmond).
Subplus.
i
o
m
M
a
a
:
Mailing Time
(Baltimore).
T otal
C a p it a l an d
Mailing Time
(Baltimore &
Richmond).
1
m
”3
si
PQ
q-i
BANKS NEARER TO BALTIMORE.
. . . Chase City. . .
. . . Chilhowie . . .
. Christiansburg .
..Clifton F orge..
.... Coeburn
. . . Covington . . .
1....... Crewe .......
— Culpeper ....
j.... Danville . ...
|__ Emporia ....
. . . . Esmont . . . .
. . . . Fairfax . . . .
. . . Farmville . . .
. Fredericksburg .
.. .Front Royal...
........G a l a x ..........
. . . . Gate Citv. . . .
.. Gordonsville ..
.... Graham ....
. . . Hailwood . . .
. . . Hamilton . . .
.Carried Forward. l
3.30
10.00
8.30
17.20
9.00
2.40
10.00
5.45
2.20
12.15
12.00
4.00
2.20
11.00
11.00
20.40
3.30
13.00
8.30
13.50
$729,000
90,000
$3,453,715
390,130
2
1
2
1
42,000
222,500
55.000
263,000
30.000
192,504
1,405,273
271,421
1,519,055
154,400
4
2
1
857,500
96.000
35.000
4,855,213
395,706
116,087
2
2
154,300
210,000
799,818
831,186
1
34,000
195,345
1
1
25.000
60.000
74,724
203,209
29
$2,903,300
$14,857,786
1
1
Reproduced from the Unclassified I Declassified Holdings of the National Archives
“ APPEN DIX A ” — Continued.
Capital and
T otal
Surplus.
R esoueces.
hrs. mill.
a
52
13
53
Capital and
T otal
Surplus.
R esources.
ffl
n
o
u
a>
a
£
I
i
$2,143,652
$41,636,620
4
30,500
40,000
$235,880,773
14.00
237,380
32,500
133,818
..........
$421,250
$2,381,032
5
300,000
199 000
117.000
2,400,489
894,981
512,562
?,
2
2
113,000
686,604
2
$42,428,620
$240,682,696
141
31.00
10.20
19.15
7.40
9.00
5.40
7.00
3.30
12.45
10.40
12,00
22.10
10.10
9.00
S.10
ci
M
O
%
->
<U
.o
Capital and
T otal
Surplus.
R esources.
29
2
2
$2,903,300
140.000
380.000
$14,857,786
1,013,085
2,379,368
1
1
30,000
62,500
186,477
355,814
1
1
46,500
71,270
311,057
294,369
3
2,700,000
11,453,196
1
1
2
1
1
1
4
70,000
46,600
167.000
40,000
60,000
200,000
4,090,000
395,150
151,879
1,026,036
256.901
282,638
1,474.047
20,602,313
51
$11,007,170
$55,040,116
a
j
Brought Forward
9.15
9.10
7.00
18.20
11.00
173,469
£
j
hrs. min.
131
hrs. min.
Federal R eserve •
D istrict.
CO
M
S
a
Cities in F ifth
Virginia.
$381,250
BANKS NEARER TO RICHMOND.
Mailing Time
(Richmond).
£
a
a
BANKS NEARER TO BALTIMORE.
Mailing Time
(Baltimore).
m
o
3
£5
Mailing Time
(Baltimore &
Richmond).
BALTIMORE AND RICHMOND.
BANKS EQUIDISTANT FROM
33
. . . Hampton . . .
. Harrisonburg . |
... Herndon . . . . |
... Honaker
. . . Hot Springs...
. . . Irvington . . . j
. . . Jonesville
.. Laurenceville ..
.... Lebanon . . . J
.... Leesburg . .. .1
. . . Lexington . . . i
........L u r a y .......... 1
... Lynchburg . . . 1
. . . Manassas . . . '
l. . . . Marion . .. . j
.... Marshall . . . J
. . Martinsville .. 1
.... Monterey .... j
..Mount Jackson.. |
..Newport News..)
. . . . Norfolk . . . . 1
.Carried Forward.1
2.25
8.30
12.50
15.20
10.20
34.40
4.15
16.10
13.30
9.25
12.50
6.00
8.00
12.30
10.00
9.30
21.30
9.30
2.00
3.00
“ APPEN DIX A ” — Continued.
hrs. min.
F ederal R eserve
D istrict.
hrs. min.
hrs. min.
Number of Banks.
R esources.
Cities in F ifth
17.50
9.00
8.00
3.30
51
2
1
1
2
$11,007,170
105,000
100 000
77,500
155,000
$55,040,116
559 661
691 568
545 475
791,167
1
2
1
1
1
115 000
800 000
55 000
117 500
120,000
535 268
4 776 735
366 234
658 558
475,611
1
8
70 000
9,484,150
378 867
51,120,153
11.15
11.10
2
99,000
731,465
16.30
2
40,000
245,186
3.30
5.00
1
3
50 000
274,200
233 246
1,664,714
79
$22,669,520
$118,814,024
Mailing Time
(Richmond).
Su bplu s.
Mailing Time
(Baltimore).
R esources.
T otal
Number of Banks.
Su rplus.
C a p it a l an d
i
T otal
BANKS NEARER TO RICHMOND.
BANKS NEARER TO BALTIMORE.
Mailing Time
(Baltimore &
Richmond).
C a p it a l an d
Number of Banks.
BANKS E’QUIDI ST ANT FROM
BALTIMORE AND RICHMOND.
Ca p it a l an d
T otal
Su r p l u s .
R esources.
V irginia .
$421,250
$2,381,032
5
$42,428,620
$240,682,696
141
Brought Forward
20.50
9.15
8.30
4.00
326,979
73,500
8.20
85,000
9,998,581
1,775,000
1
13.50
6.00
16.00
8.40
11.30
8.10
11.00
500
545,339
9.00
26,000
50,000
216,816
11.30
123,000
476,325
9.30
13.30
5.25
215,143
19.25
i
$2,442,750
$13,399,733
11
$42,539,620
$241,443,178
143
12.20
10.10
. . . . Norton . . . .
. . . Onancock . . .
........O n le y ..........
. . . . Orange . . . .
.... Parksley . . . .
. . . Pearisburg .. .
... Petersburg ...
... Pocahontas ...
.. Portsmouth ..
. . . . Pulaski . . .
.. Purcellville ..
Radford . . . .
.. Richmond ..
.... Roanoke . . . .
.. Rocky Mount..
. . . . Rosslyn . . . .
. .Rural R etreat..
.......St. Paul........
........ Salem .......
. . . Scottsville . . .
.. South Boston..
.Carried Forward.
10.45
1.15
12.45
3.30
11.15
14.00
10.50
0.00
!
Reproduced from the Unclassified I Declassified Holdings of the National Archives
‘APPE N D IX A ” — Continued.
BANKS EQUIDISTANT FROM
BALTIMORE AND RICHMOND.
Surplus.
O)^
u2
T otal
C a p it a l an d
BANKS NEARER TO BALTIMORE.
j!+->§rd
us
R esources.
M PS
C a p it a l an d
Su rplus.
£ o'
H
T otal
BANKS NEARER TO RICHMOND.
C it ie s
in
F if t h
F e d e r a l R ese r v e
C a p it a l an d
T otal
D is t r i c t .
Su rplu s.
R esources.
79
3
$22,669,520
720,000
$118,814,024
3,194,874
1
1
220,000
120,000
977,615
568,349
2
72,000
521,881
1
40,000
273,500
2
1
1
147,500
25,000
47,000
834,842
92,051
239,123
1
2
42,000
610,000
337,195
3,303,045
94
$24,713,020
$129,156,499
R eso urces.
hrs. min.
hrs. min.
hrs. min.
V ir g i n i a .
$2,442,750
$13,399,733
$42,539,620
11
........ 75,000
427,916
145,000
$241,443,178
.......433,120
143
2
i
30,000
205.000
36,500
201,571
1,389,134
145,230
2
555.000
3,295,385
2
1
7.00
7.30
8.00
17.20
10.15
7.00
12.20
6.40
5.00
10.40
11.30
Brought Forward\
. . . . Staunton . . . J
. . . Strasburg . . .
. . . . Suffolk . . . .
.... Tazewell ___
. . . Troutville . . .
.. . Warren ton ...
.. Washington ..
.. Waynesboro ..
... Winchester ...
.. . Woodstock ...
.. . Wytheville . .J
6.20
8.30
2.15
13.40
10.35
9.30
15.00
6.00
8.30
10.00
1
W est
100,000
592,692
2
11.15
18.10
14.10
12.20
21.30
15.10
.....
587,750
$13,827,649
12
$43,541,120
$247,500,310
153
....
....
1. . . .
j ...
|. . . .
i ....
I
V ir g in ia .
Alderson . . . .
Anawalt . ...! j
Aiisted . . . . 1
Belington . .. 1
Berwind . . . . I
Bluefield . . . .
i .Carried Forward.
10.35
16.00
13.30
15.20
17.00
12.00
“ APPE N D IX A ”— Continued.
BANKS EQUIDISTANT FROM
BALTIMORE AND RICHMOND.
BANKS NEARER TO BALTIMORE.
BANKS NEARER TO RICHMOND.
C it ie s
Surplus.
a 3
T otal
C a p it a l an d
ag
a *.8
R eso ubce s.
h rs.
C a p it a l an d
S urplus.
$13,827,649
F e d e r a l R ese r v e
R esoubces.
D is t r i c t .
«P3
1.025.000
i66,bbb’
235,000
1.540.000
35,000
80,500
65,000
235,638
268,939
$247,500,310
591,740
153
1
7,549,175
’
462,732'
151,399
1,782,314
59.000
70.000
381,058
295,652
13.15
15.10
14.40
11.05
10.50
18.25
11.00
1,340,752
6,625,084
221,57S
30,000
300,000
12.00
10.50
17.05
13.10
16.55
9.30
10.00
24.00
19.00
11.30
11.00
11.55
13.55
15.15
$2,683,250
$14,332,226
14
$47,035,120
$266,841,794
C a p it a l an d
T o tal
Surplus.
R esources.
94
$24,713,020
$129,156,499
i
62,000
1,827,000
25.000
” ” 319,392
8,098,825
188,849
33.000
232,710
75.000
50.000
293,321
381,438
343,200
1,371,000
45,400
1,646,256
6,171,718
188,636
$2S,544,620
$146,677,644
a
a)&
«2
168
•r-l p
hrs. min.
hrs. min.
$43,541,120
100,000
H£
o>
ti
m in . J
12
F if t h
T otal
W est
$2,587,750
in
V ir g i n i a .
Brought Forward
. Buckhannon
---- Ceredo ..
. Charlestown
___ Clark . . .
.. Clarksburg .
.. Clendenin .
. . . . Davis . . .
__ Elkins ...
.. Fairmont .
... Fairview ..
. Fayetteville
. . . . Gary . . .
.. Gormania .
... Grafton ..
. Griffithsville
. . . Hamlin ..
.. Harrisville .
.. Hendricks .
. . . Hinton ..
.. Huntington ..
. . . Kenova . . .
Carried Forward.
16.15
14.30
14.00
10.20
13.50
17.45
15.30
16.30
13.50
20.05
12.30
14.45
14.00
13.00
5
1
14.30
15.30
11.15
13.15
14.35
111
Reproduced from the Unclassified / Declassified Holdings of the National Archives
“ APPEN DIX A ” — Continued.
M a ilin g
o
Surplus.
R eso urces.
u
.Q
a
K S
N
E A R
E R
T O
B
L T I M
O
R
E
[
.
$14,332,226
77,500
a
c3
C a p it a l an d
T otal
M
VI
o
Su bplus.
R esources.
f-l
o
£2
a
a
fc
h rs. m in .
14
349,205
I
....
$47,035,120
85,000
$266,841,794
659,83tt
168
1
50,000
356,608
1
j
75,000
821,877
1
265,000
1,481,245
■>
39,500
50,000
450,355
300,190
1
1
3 0 ,000
!
75,000
517.769
1,441,033
273,450
659,756
1
2
1
1
i
j
$14,681,431
15
N
E A R
E R
T O
R
I C
H
M
O
N
T
o
D
.
C it ie s
F if t h
i n
h r s .
m
M
F e d e r a l
D
R
a
ed
ffl
e s e r v e
i s t r ic t
.
Vi
min.
h r s .
. . . .
. . . .
t a l
S u r p lu s .
R esources.
$28,544,620
$146,677,644
67,500
311,979
70,000
329,491
51,650
314,734
21,135
82,364
128,500
833,075
82,000
517,643
i
33,000
148,311
119
$28,998,405
$149,215,241
4>
£2
a
m
in .
£
in
F o rw a rd
K e y s e r
K in g w
9.30
13.10
14.00
. . . .
K e y s to n e
. . .
a n d
V ir g in ia .
B ro u g h t
6.30
17.15
11.00
C a p ita l
o
. . . .
o o d
. . .
1
21.30
120,000
369,000
$2,760,750
K S
e
03
W est
$2,683,250
B A N
T im
i
p
£
A
o n d ) .
M
q-i
B A N
ic h m
e
T im
a
T otal
j
.
a ilin g
D
m
X
Ca p it a l an d
f
M
N
( R
O
M
M
e
F R O
H
T im
T
I C
o r e ) .
N
R
a lt im
T A
D
a ilin g
I S
A N
( B
I : : D
M
E
o n d ) .
O
R
ic h m
K
R
O
&
K S
L T I M
o r e
A
( B a ltim
B A N
B
1,381,000
27,500
61,200
$49,663,320
6,876,907
132,602
619,030
$281,432,452
5
1
2
188
13.10
11.30
13.45
3.45
20.30
18.00
13.00
13.55
8.15
11.00
9.30
14.40
17.00
13.30
11.00
12.15
19.45
. . . .
M
. .
M
. ..
M
. . . .
. .
a r lin g t o n
. ..
a r tin s b u r g
. .
M
. .
a d is o n
a n n in g to n
. . . .
M
..
id d le b o u r n e
M
. . .
. .
M
M
. . .
. .
M
. . . .
o n o n g a h
o n tg o m
. .
o r g a n t o w n
M
N
. .
a r t in s v ille .
o r t h f o r k
. . .
P a r k e r s b u r g
. . .
j . . .
. .
. . .
N e w b u r g
(.N e w
. .
..
. . .
e r y
o o r e fie ld
M
. . . .
. .
a te w a n
P a r s o n s
. . . .
P e n n s b o r o
P e te r s to w
1. C a r r i e d
. .
I
12,30
14.30
13.05
6.45
16.00
21.00
16.00
13.15
10.45
13.30
12.30
17.40
13.10
16.30
15.30
. . .
n
. . .
F o rw a rd .
15.15
“ APPEN DIX A ” — Continued.
Capital and
T otal
Surplus.
R esources.
u
<D
a
d
£
w
M
Capital and
T otal
Surplus.
R esources.
d
03
«
•M
O
U
a>
.c
8
d
£
hrs. min.
$2,760,750
Cities in F ifth
F ederal R eserve
D istrict.
hrs. min.
j.t '“7
$2,760,750
BANKS NEARER TO RICHMOND.
Mailing Time
(Richmond).
d
M
s-i
o
BANKS NEARER TO BALTIMORE.
Mailing Time
(Baltim ore).
m
at
Mailing Time
(Baltimore &
Riclimond).
BANKS EQUIDISTANT FROM
BALTIMORE AND RICHMOND.
h rs.
min.
d
PQ
«H
o
tn
o>
.O
a
d
Capital and
T otal
Surplus.
R esources.
119
$28,998,405
$149,215,241
2
92,000
331,057
1
60,000
262,720
2
109,000
543,739
1
28,000
164,802
1
62,000
277,984
2
330,000
1,578,887
128
$29,679,405
$152,374,430
W est Virginia .
$14,681,431
$14,681,431
15
15
$49,663,320
180,000
220,000
$281,432,452
1,114,940
1,398,005
188
2
2
161,000
891,428
?,
26,250
65.000
52.000
112,791
431,865
200,077
1
1
1
26,000
103,226
1
85.000
85.000
60.000
411.000
57.000
121.000
41.000
708,175
745,721
426,748
2,596,577
422,976
914,887
377,173
30,000
215,197
$51,283,570
$292,092,238
1
1
1
3
1
1
1
209
Brought Forward
11.30
6.45
23.30
16.20
17.00
19.25
20.00
11.15
10.55
9.00
15.05
15.30
11.20
13.00
15.00
20.00
16.35
8.20
12.55
19.00
17.35
. . . . Philippi . . . .
. . . Piedmont . . .
. . . . Pineville . . . .
..Point Pleasant..
. . , Princeton . . .
....... Reedy .......
. . . Richmond . . .
. . . . Romney ___
... Ronceverte ...
.. Rowlesburg ..
.... St. Albans. . . .
. . . . St. Mar ys . ...
........S a lem ..........
. . . Shinnston . . .
... Sistersville ...
. . . . Spencer . . . .
.... Terra Alta. . . .
. . . Thurmond . . .
.Webster Springs.
....... Welch .......
.Carried Forward.
14.30
9.45
23.00
19.20
12.30
22.25
23.00
14.15
10.10
12.00
14.20
18.30
14.20
16.00
18.00
23.00
19.35
11.20
12.10
22.00
13.45
Reproduced from the Unclassified I Declassified Holdings of the National Archives
“ APPEN DIX A ” — Continued.
BANKS EQUIDISTANT FROM
BALTIMORE AND RICHMOND.
BANKS
NEARER
TO
.
W
M
T otal
C a p it a l an d
rt
cd
ffl
o
Su bplu s.
R esoubces.
u
.o
a
BANKS NEARER TO RICHMOND.
B A L T IM O R E .
0
G S ”0
ts)
.5
§a §
D2 03
Ca p it a l an d
Su bplus.
T otal
R esoubces.
w
§
h r s.
03
W
VI
o
O)
a *
& o
C i t ie s
$14,681,431
D is t b i c t .
u
<x>
p
&
26,250
$51,283,570
200,000
50.000
$292,092,238
1,185,386
350,803
h r s.
40.000
142,195
Winona
N orth
13.20
18.00
11.30
1320
19.50
12.50
14.00
11.00
13.00
11.10
15.20
11.25
$2,787,000
$14,837,975
16
$51,573,570
l $293,770,622
21:
T otal
Su rplu s.
R esoubces.
m in .
V ir g in ia .
... Williamson ...
....
Ca p it a l an d
w
128
$29,679,405
$152,374,430
17.00
14.30
16.25
19.00
2
235,500
1,597,854
11.20
16.00
9.30
11.20
17.50
10.50
9.40
6.30
8.00
8.30
14.00
6.55
1
1
1
5
1
1
1
1
2
1
1
O
30.250
315.000
65.000
1,850,000
35.000
125,000
26.325
50,000
510.000
150.000
42.600
320,600
257,815
1,497,667
365,046
9,526,956
155,581
539.420
115.360
3*6.691
3.51)9.364
779,941
349.932
2,13S,246
14N
$33,434,680
$173,684,303
Brought Forward
14 00
11 30
20.55
16.00
20.35
156,544
bJCS
Sa .a
cj
h r s.
m in .
209
1
1
®.
§
a
m in .
15
F if t h
F e d e b a l R ese b v e
5 a
W est
$2,760,750
in
....
C a r o l in a .
.... Ashboro . . . .
. . . . Asheville . . . .
j... Burlington . ..
1. .. Charlotte . . .
|... Cherryville ...
|.. .. Concord . . . .
!. . . Creedmor . . .
j........ D u n n ........
1.... Durham ....
'..Elizabeth City..
|........ Elkin ........
!.. Fayetteville . .
{.Carried Forward.
“ APPE N D IX A ” — Continued.
BANKS EQUIDISTANT FROM
BALTIMORE AND RICHMOND.
BANKS NEARER TO RICHMOND.
BANKS NEARER TO BALTIMORE.
CI t i e s
in
F if t h
C a p it a l a n d
T otal
Ca p it a l an d
T otal
F ederal R esebve
Su rplu s.
R esoubces.
Su b p l u s .
R esoubces.
D is t e i c t .
hrs. m i n .
Mi
H
W
)
a;
I
C a p it a l an d
T otal
Su rplus.
R esoubces.
$33,434,680
30.000
250.000
130.000
70.000
592.500
122.000
$173,684,303
138.578
1,615.237
567.013
270,713
3.333.864
701.784
625,687
224,262
904,693
1,427.392
97,837
119,202
1,236.260
192,970
357.911
211.567
614,033
558,146
435.716
462.241
572.206
$36,238,730
$188,351,615
hrs. min.
hrs. min.!
N orth C a r o l in a .
$2,787,000
$14,837,975
16
$51,573,570
$293,770,622
212
21.30
14.00
11.00
14.50
10.30
13.45
S .0 0
20.30
15.00
11.00
29.40
14.15
12.00
15,20
16.00
11.30
19.00
14.00
16.45
16.00
16.30
$2,787,000
$14,837,975
16
$51,573,570
$293,770,622
212
Brought Forward
. Forest City..
,. Gastonia . . .
. Goldsboro ..
.. Graham ...
Greensboro ..
. Greenville ..
. Henderson ..
Hendersonville
.. Hickory . . .
.High Point..
. . . 0 efferson . . .
Kings Mountain
. . . Kinston . . .
. Laurinburg .
. . . . Lenoir . . . .
.. Lexington ..
.. Lincolnton ..
.. Louisburg ..
.. Lumberton ..
. . . . Marion . . . .
. . . . Monroe . . .
.Carried Forward.
148
19.30
1
12.00
2
6.30
12.50
7.35
9.20
3.50
18.30
13.00
9.00
26.40
12.15
7.30
10.50
14.00
9.30
17.00
7.40
11.45
14.00
12.00
1
1
2
1
1
1
1
1
1
1
2
1
1
1
2
2
1
1
1
174
110.000
119.000
51.500
240.000
250.000
27,550
31.000
275.000
30.000
64.000
30.000
128.500
112.500
73.000
67.500
Reproduced from the Unclassified / Declassified Holdings of the National Archives
“ APPE N D IX A ” — Continued.
BANKS E'QUIDISTANT FROM
BALTIMORE AND RICHMOND.
<D
Ca p it a l an d
T otal
Ca p it a l an d
BANKS NEARER TO RICHMOND.
BANKS NEARER TO BALTIMORE.
R esources.
R eso urces.
D is t r i c t .
16
$51,573,570
$293,770,622
20.10
14.30
9.30
12.40
$14,837,975
16
$51,573,570
$293,770,622
212
a
C a p it a l an d
T otal
Su r p l u s .
R eso urces.
C a r o l in a .
174
Brought Forward
212
15.00
15.30
15.10
13.30
14.30
13.40
11.00
12.00
9.50
12.00
22.40
13.30
13.50
11.10
15.40
15.00
$2,787,000
m
^3 -3
o
*h
hrs. min.
hrs. min.
N orth
$14,837,975
F if t h
F e d e r a l R e se r v e
hrs. min.
$2,787,000
in
T otal
Surplus.
Surplus.
C i t ie s
.. Mooresville ..
.. Morganton ..
.. Mount A iry..
. . . New Berne. . .
. . . Newton . ..
. . . . Oxford . . . .
. . . Raleigh . ..
Roanoke Rapids
.Rocky M ount..
.. Salisbury ..
___ Shelby ___
.. Statesville ..
. . . Tarboro . . .
. Thomasville .
.. Wadesboro ..
. Washington .
. Waynesville .
. Wilmington .
. . . Wilson .. .
Winston-Salem
.C a rried
F o r w a r d .
13.00
13.30
13.10
9.00
12.30
6.15
6.30
6.00
2
150.000
70.000
1,505,000
150.000
462,500
,351.615
279,647
409,895
417,348
799,903
301,717
1,185,852
5,883,901
253.339
465.745
1,192.091
1,316,181
1,322,688
449,723
264,691
513,530
554,238
401,738
9,119.478
652,460
2,300,299
202
$41,182,730
$216,436,079
1
1
1
1
1
2
3
1
4.20
10.00
20.40
11.30
9.20
9.10
11.10
10.30
18.10
1
2
10.00
2
5.00
10.00
2
2
1
1
1
1
1
1
$36,238,730
61.000
63.000
100,000
180,000
60.000
230.000
890.000
56,500
40.000
250.000
208.000
245.000
70.000
33.000
120.000
Capital and
T otal
Surplus.
R esources.
Mailing Time
(Baltim ore).
BANKS NEARER TO BALTIMORE.
Number of Banks.
Mailing Time
(Baltimore &
Richmond).
BALTIMORE AND RICHMOND.
BANKS EQUIDISTANT FROM
33
&
a
cd
P
Q
T otal
Capital and
o
Surplus.
R esources.
<D
.Q
a
& hrs. min.
Continued.
BANKS NEARER TO RICHMOND.
Cities in F ifth
Federal R eserve
D istrict.
hrs. min.
Mailing Time
(Richmond).
“ APPE N D IX
oa
a
Oj
PQ
o
S
H
o
Capital and
T otal
Surplus.
R e sou rces.
hrs. min.
a
£
15.30
19.00
18.20
17.15
13.00
22.50
12.40
12.00
11.10
13.00
14.30
13.45
15.30
13.00
9.00
14.30
22.45
14.30
14.30
23,50
20.50
202
1
1
1
1
1
1
1
3
1
1
1
5
1
1
1
1
1
4
1
1
1
$41,182,730
105.000
62.500
115.000
37.500
125.000
52,000
60,000
1,800,000
28,500
135.000
60,000
1,825,000
31.000
54,750
162,000'
26,200
180.000
680,000
120,000
26,700
75.000
$216,436,079
340,760
271,90S
351,526
264,340
460,870
143,778
304,312
10,731,444
146,302
645,774
254,325
11,056,286
226,975
278,938
770',095
105,848
603,647
3,105,325
586,430
73,493
365,661
232
$46,943,880
$247,524,116
South Carolina.
$2,787,000
$14,837,975
16
$51,573,570
$293,770,622
212
Brought Forward
18.00
21.00
20.20
19.15
18.00
27.20
15.10
17.00
13.00
17.30
17.00
16.15
20.00
18.00
14.00
16.30
14.45
16.30
17.00
28.20
22.50
$2,787,000
$14,837,975
16
$51,573,570
$293,770,622
212
.. Abbeville . . .
. . . . A ik e n ........
Anderson . . . .
Batesburg . . .
.. Bennettsville ..
.. . Bishopville ...
Camden . . . .
Charleston ...
. . . . Cheraw . . . .
. . . . Chester . . . .
. . . . Clinton . . . .
. . . Columbia .. .
. . . . Conway . . . .
.. . Darlington ...
.. .. Florence . . . .
. . . .Fort Mi l l . . . .
. . . . Gaffney . . . .
. . . Greenville . . .
... Greenwood ...
. . . Hartsville . . .
. . . Lancaster . . .
Brought Forward
Reproduced from the Unclassified I Declassified Holdings of the National Archives
‘APPEN DIX A ” — Continued.
BANKS E'QUIDISTANT FROM
BALTIMORE AND RICHMOND.
Ca p it a l an d
T otal
Su r p l u s .
R esources.
! *<x>
EH u d
60lf! §
S3■
4-<
BANKS NEARER TO BALTIMORE.
BANKS NEARER TO RICHMOND.
C i t ie s
in
F if t h
C a p it a l a n d
T otal
F ederal R eserve
C a p it a l an d
T otal
Su rplu s.
R esources.
D is t r i c t .
Su rplus.
R esources.
232
$46,943,880
$247,524,116
1
1
1
1
1
1
2
1
3
2
2
1
1
30,000
29,000
110,000
28,000
107,000
28,250
500,000
29.000
1,235,000
380,000
184,000
30,000
65,000
177,215
237,367
472,751
165,202
479,208
197,259
2,297,774
147,855
4,407,833
1,235,331
736,514
133,348
307,002
250
$49,699,130
$258,518,775
hrs. min.
hrs. min.
hrs. min.
I
Sou th
$2,787,000
$14,837,975
16
$51,573,570
$293,770,622
$14,837,975
16
$51,573,570
$293,770,622
212
j
Brought Forward j
212
19.00
18.30
19.50
19.50
21.30
21.10
15.30
18.00
15.30
19.00
1S.00
21.20
21.20
$2,787,000
C a r o l in a ,
. . . . Leesville ....
. . . Lexington . ..
. . . . Marion . . . .
. . . . Mullins . . . .
. . . Newberry . ..
. . . Prosperity . ..
. . . . Roc k H ill___
. . . . Sharon . . . .
.. Spartanburg ..
. . . . Sumter . . . .
.. Walterboro .. i
. . . Yorkville . ..
i..Grand T otals..
17.00
16.30
14.50
14.50
17.30
16.40
13.30
16.00
13.30
17.00
16.00
16.20
16.50
121
“ APPEN DIX B ”
(Based Solely 011 Figures in “ Appendix A.” )
Distance in Hours,
Mailing Time, be
tween N a t i o n a l
Banks
in
Fifth
District
anp
Total Resources of All National Banks in the
Fifth Federal Reserve District.
—
0
Not more than 59 mill.
1 hr. to 1.59 min.
2 hrs. to 2.59 min.
3 hrs. to 3.59 min.
4 hrs. to 4.59 min.
5 hrs. to 5.59 min,
6 hrs. to 6.59 min.
7 hrs. to 7.59 min,
S hrs. to 8.59 min.
9 hrs. to 9.59 min.
10 hrs. to 10.59 min.
11 hrs. to 11.59 min.
12 hrs. to 12.59 min.
13 hrs. to 13,59 min.
14 hrs. to 14.59 min.
15 hrs. to 15.59 min.
16 hrs. to 16.59 min.
17 hrs. to 17.59 min.
IS hrs. to 18.59 min.
39 hrs. to 19.59 min.
20 hrs. to 20.59 min.
21 hrs. to 21.59 min.
22 hrs. to 22.59 min.
23 hrs. to 23.59 min.
24 hrs. to 24.59 min.
26 hrs. to 26.59 min.
27 hrs. to 27.59 min.
2S hrs. to 28.59 min.
29 hrs. to 29.59 min.
31 hrs. to 31.59 min.
34 hrs. to 34.59 min.
R ic h m o n d .
0
y2
iy 2
2y2
3%
4%
5%
61/2
m
sy2
9%
io y 2
111/2
121/2
13%
14i/o
151/2
16 1/2
171/2
181/2
191/2
20i/o
211/2
221/2
23%
241/a
261/a
271/a
2Sy2
291/2
311/2
34i/2
Average Distance of all Re
sources of National Banks
in Fifth District...................
$114,094,615
66,185,066
12,083,25S
8,280,775
13,067,926
61,625,229
17,598,400
22,789,426
35,951,110
22,779,593
24,256,535
22,792,562
10.269,536
36,885,356
25,114,105
18,108,144
18,994,924
16,261.354
4,661,564
4,832,641
4,727,186
2,213,703
1,938,743
331,057
235,638
|
$51,120,153
4,776,735
4,846,039
27,505,345
65,91S,639
122,435,443
27,435,990
5,964,922
24,291.662
26,317,387
25,728,599
30,621,723
23,105.766
58,627.293
25,703,911
3,911.054
15,607.607
6,171,837
4,282,278
2,909,447
4,671.653
1.511.349
1,935,856
1.259,391
235,638
97,837
143,778
73,493
97,837
133,818
133,818
$567,127,372
$567,127,372
7.3 hrs.
8.1 hrs.
“APPEN D IX A.”— Continued.
BANKS EQUIDISTANT FROM
BALTIMORE AND RICHMOND.
C a p it a l
and
S u r p lu s.
T o ta l
*cS
m
BANKS NEARER TO BALTIMORE.
a ®*d
hi §
I?! a
R eso u bces.
C a p it a l
T o tal
and
a
S u b plu s.
I
2 •
P-i **
§
R
eso u bces.
•H
BANKS NEARER TO RICHMOND.
C it ie s
F ed era l R eser v e
5
16
.
3 A
S3 £
« «
a
h rs.
m in .
m in .
$51,573,570
$293,770,622
h rs.
19.00
18.30
19.50
19.50
21.30
21.10
15.30
18.00
15.30
19.00
18.00
21.20
21.20
T o ta l
S u r plu s.
R eso u r c es.
232
$46,943,880
$247,524,116
1
1
1
1
1
1
2
1
3
2
2
1
1
30.000
29,000
110,000
28,000
107,000
28,250
500,000
25),000
1,235,000
380,000
184,000
30,000
65,000
177,215
237.367
472,751
160,202
479.208
197,259
2,297,774
147,855
4,407,8&3
1,235,331
736,514
133,348
307,002
250
$49,699,130
$258,518,775
a>
5§
C a r o l in a .
17.00
16.30
14.50
14.50
17.30
16.40
13.30
16.00
13.30
17.00
j 16.00
.. Walterboro ..
16.20
. . . Yorkville
16.50
. . . .
and
I
m in .
Brought Forward
212
C a p it a l
sc a
D ist r ic t .
S outh
$14,837,975
®
F if t h
3®
h rs.
$2,787,000
in
L e e s v ille
. .. . I
. . . Lexington . . .
___ Marion . . . .
___ Mullins . . . .
. . . Newberry . . .
. . . Prosperity . . .
....Rock Hill....
___ Sharon . . . .
.. Spartanburg ..
. . . . Sumter .......
!
$2,787,000
$14,837,975
16
$51,573,570
$203,770,622
212
..G r a n d
T o t a l s ..
121
“ APPEN DIX B ”
Distance in Hours,
Mailing Time, betireen N a t i o n a l
Banks
in
Fifth
District
M can
Distance
(flours.)
(Based Solely on Figures in “ Appendix A.” )
0
0
%
1%
2%
3%
4%
5%
61/2
7%
8%
9y>
101/2
111/0
121/2
131/2
141/0
15 %
161/2
171/0
181/2
19%
20 1/0
211/2
221/2
231/2
241/2
26i/2
271/2
281/.
29i/o
31i/o
B a l t im o r e .
R ic h m o n d .
$114,094,615
$51,120,153
66,185,066
12,083,258
8,280,775
13,667,926
61,625,229
17,598,400
22,789.426
35,951,110
22,779.593
24,256.535
22,792,562
10,269,536
36,885,356
25,114.105
IS.108,144
18,994.924
16.261.354
4,661.5<>4
4,832,641
4,727,186
4,776,735
4,846,039
27.505,345
65,91S,639
122,435,443
27,435,990
5,964.922
24.291,662
26,317,3S7
25,728,599
30,621,723
23.105,766
2,2 13,7 03
1,938,743
331,057
235,638
58,627,293
25,703,911
3,911,054
15.607.607
6.171,837
4,2S2,27S
2.909,447
4.671.653
1,511.349
1,935,856
1.259.391
235,638
97,837
143,778
73,493
97,837
133,818
133,818
34%
Average Distance of all Resources of National Banks
in Fifth District. . .
Fifth Federal Reserve District.
|
AND----
Not more than 59 min.
1 hr. to 1.59 min.
2 hrs. to 2.59 min.
3 hrs. to 3.59 min.
4 hrs. to 4.59 min.
5 hrs. to 5.59 min.
6 hrs. to 6.59 min.
7 hrs. to 7.59 min.
8 hrs. to 8.59 min.
9 hrs. to 9.59 min.
10 hrs. to 10.59 min.
11 hrs. to 11.59 min.
12 hrs. to 12.59 min.
13 hrs. to 13.59 min.
14 hrs. to 14.59 min.
15 hrs. to 15.59 min.
16 hrs. to 16.59 min.
17 hrs. to 17.59 min.
IS hrs. to 18.59 min.
19 hrs. to 19.59 min.
20 hrs. to 20.59 min.
21 hrs. to 21..59 min.
22 hrs. to 22.59 min.
23 hrs. to 23.59 min.
24 hrs. to 24.59 min.
26 hrs. to 26.59 min.
27 hi*s. to 27.59 min.
28 hrs. to 2S.59 min.
29 hrs. to 29.59 min.
31 hrs. to 31.59 min.
34 hrs. to 34.59 min.
Total Resources of All National Banks in the
$567,127,372
$567,127,372
7.3 hrs.
8.1 hrs.
@FedFRASER