The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
R ep rod uced from th e U n c la ssifie d I D e cla ssified H oldings o f the N ational A rchives
*
m
B S B k
iS m m m
§m m m m m s Silt
■«t
7P Z B
v | §|B i
te v j
jY /
Federal reserve bank of Atlanta.
Before, the Federal reserve board in
the matter of petition of First national
bank of Clarksville, Tenn. for change in
the geographical limits of F.R.districts
nos. 6 and 8 ...
r
C- v'
IPfc
> •
S fM :
i ’ t{
•.*
. _ .
b
.
.;>■ I
v£
•
Ic**
K
§\
If^
';iw
::
s>'
i a •n#§ v7 i ifiK
1
I
f
a
It'S
J
^
-
-l'y IfP
,
V
-
jSgfjS
1
w la
■
• "'
'
PH-■..... g i P B ifC T a
.■vsSBBB
. « i r.
v'
•
" t .r ^
•
l;i
w
m
■
s&y
riA
y
f\-
^ ■ : xr : t85F '
H
•"
p) I '
®®.'V
f■l y '..jgmA
jgbf f § :y-r—
:i
F
■-
W X
:
(<•'
• ft
>4
£-
«.
-.cST
* *** \-.
m!& w_ ~ 'v
tr'W*.
'
‘
cj
n
i
■j
V
V ®
\>
v / J) /
*>
'"-•j
:f
••>'^
1
l l
I
V
'
aL
' AK
1 "' /*V
(<r*
. - -A
|S:
;
\
E
v ^v v- s
V i'’,
^
:>
?*
*
M
. . '
-'f r
<.
' - S - ,
’ ^
’i
v
■
#/ ••r\ ?
^ , .
I“ if
&p i p -
y|
-
-i!
Jl"
r-- -
1m.
*
I i
! © Ii
x '
I
^
J'
m
I
,1
|
-
■■.
Reproduced from the Unclassified I Declassified Holdings of the National Archives
BEFORE THE
FEDERAL RESERVE BOARD
II THE MATTER Of
PETITION OP FIRST IATIOIAL BANK AID CLARKSVILLE IATIOIAL
BASK, OF CLARKSVILLE, TEIIESSEE, SPRIIGFIELD IATIOIAL BAIK
AID PEOPLES IATIOIAL- BANK OF SPRIIGFIELD, TEIIESSEE, FOR
CHAISE II THE GEOGRAPHICAL LIMITS OF FEDERAL RESERVE
DISTRICTS IOS. 6 AID 8, AS DETERMIIE3) BY THE ORGAIIZATIOI
COMMITTEE#
AISWER 01 BEHALF OF THE FEDERAL RESERVE BAIK OF
ATLANTA ( DISTRICT 10. 6. )
TO THE FEDERAL RESERVE BOARD:
Edward T. Brown, Deputy Chairman and Deputy
Reserve Agent of the Federal Reserve Bank of Atlanta, the
representative duly appointed by the Board of Directors of
said Bank to appear and answer the petition of the member
banks of said Federal Reserve Bank of Atlanta above named to
review the assignment by the Organization Committee of said
banks to Federal Reserve District Io. 6, and to alter the
lines of said District so that the said banks above named
shall be included in Federal Reserve District Io* 8, herein
after called Respondent, makes answer to said petition as fol
lows :
-1
The Federal Reserve Bank of Atlanta, comprising District Io# 6, contains 372 national banks, and would
have resources from capital stock on this date of #4,710,000.
if the entire capital stock had been paid in fu ll. At the
present time only one-third of said capital has been paid in#
Its gross capital, therefore, is the smallest amount of any
of the Banks in the Reserve system, and but little in excess
(a).
25C2-
•H 7T z s
proauced from the Unclassified I Declassified Holdings of the National Archives
(2 )
of the required minimum of $4,000,000. fixed by the Federal
Reserve Act. Respondent is advised that the capital of the
First National Bank of CLarksville, Tennessee, is the sum of
$100,000.00, with a surplus of $75,000.00$ Clarksville
National Bank, capital $100,000.00, and surplus $30,000.00;
Springfield National Bank, capital $60,000.00, and surplus
$60,000.00; the People© National Bank of Springfield, capital
$100,000.00, and surplus $20,000.00. The aggregate contri
bution of these four petioning banks when fully paid to
the capital of the said Bank would be approximately the sum
of $90,000.00. If said Banks were removed from the Sixth to
the Eighth District, it would reduce the gross capital of the
Federal Reserve Bank of Atlanta to approximately the sum of
$4,620,000.00, which sum would be only $620,000.00 in excess of
the minimum amount required. Respondent submits that these
figures alone furnish a very strong reason why the prayer of
these petitioning banks should not be granted, because if
these banks are withdrawn and i f for any reason only a very
few of the larger banks in the District should discontinue
business or withdraw from the system, it might easily be pos
sible for the capital of the bank in the Sixth District to
be and become reduced below the minimum fixed by the Act.
Respondent further shows to this Honorable Board
that the Federal Reserve Bank of Atlanta in the midst of the
eastern part of the cotton growing section of the South,
and the demands upon the resources of said Bank, in properly
financing the cotton crop annually will be considerable, and
when to these demands there is added the normal annual
demands which will be made upon said Bank by those engaged in
other agricultural, industrial and commercial pursuits in the
section, it is evident to respondent that a ll of its resources
Reproduced from the Unclassified I Declassified Holdings of the National Archives
(3 )
K ill be in constant use and demand. Respondent says that
for this reason any action which would result in a reduction
of the capital and consequently in the resources of said hank
should receive the closest investigation and scrutiny before
being put into effect, and respectfully urges that for the
reasons already stated no such reduction should be made or
allowed, unless in case of imperative necessity, and it is
respectfully submitted that the case presented by petitioning
banks in this instance is not of this character.
(b). Respondent calls attention that evidently
the Organization Committee considered the Tennessee River
a natural geographical boundary, and by reference to the nap
of Tennessee it will be readily noticed that the western
boundary of the Sixth District is fixed along said river,
with the exception of the County of Wayne.
-2 -
Respondent is advised that it is not necessary
to answer specifically many of the allegations generally
stated in said petition* Admitting that petitioners are
located in the tobacco growing sections of West Tennessee and
Kentucky, yet no satisfactory and convincing reasons are ad
vanced by petitioners why the Federal Reserve Bank of Atlanta
cannot meet a ll their reasonable, proper and lawful demands*
On the contrary, respondent says that said Bank can and will
take care of a ll such demands and requirements.
Reproduced from the Unclassified I Declassified Holdings of the National Archives
(4 )
(a) Petitioners allege that the town of
Clarksville and the town of Springfield are served by the
lines of the Louisville & Uashville Railway Company, and it
is here shown to this Honorable Board that said Railway
Company likewise supplies lines of connection between Atlanta
and said two towns. The distance from Atlanta to Clarksville
and Springfield is approximately 350 miles, whereas the dis
tance from said two towns to St. Louis is approximately
300 miles, so that the distance from Atlanta to said two
towns is practically the same distance from said two towns to
St. Louis. If this petition was granted, said two towns would
be only about fifty miles nearer to the reserve city to
which they would be then attached, than they are to Atlanta.
Respondent shows that at the present time mail
and express matter leaving Atlanta as late as 4:55 P. M. ar
rives in Springfield the next morning at 8:26 A. M. and at
Clarksville at 9:34 A. M. and such matter passing in the re
verse direction from Springfield and Clarksville fco Atlanta
moves practically within the same limits of time. Both mail
and express matter passes to and from Atlanta and said two
towns practically over night, and in time to be received
and handled in the early morning of the day following.
Respondent is advised that no greater facilitie s as to mail
and express or transportationsooc would be enjoyed by petition
ing banks if they were attached to the Eighth District than
they now enjoy at Atlanta.
(b) Respondent is advised that while it may be
true that tobacco furnishes the principal commercial crop
of the section in which petitioning banks are located, and
Reproduced from the Unclassified I Declassified Holdings of the National Archives
(6 )
that a large percentage of said crop is exported to
European countries through Hew York, yet this condition of
affairs is not exceptional with the tobacco crop, but is true
to a very great extent of many other commodities produced in
the Sixth and other D istricts. Respondent cannot agree that
it would facilitate the business 3c of petitioning banks for
these tobacco transactions to move westward through St Louis
merely because the larger part of the tobacco growing section
is attached to the Eighth District. Respondent cannot
agree that the mere coincidence that two of the Directors of
the St. Louis Bank are familiar with the details of how the
tobacco business is conducted furnishes any good and sufficient
reason why petitioning banks should be attached to the
Eighth rather than the Sixth District.
(c)
Respondent says it is true that
Federal Reserve Bank of Atlanta will probably have demands
of large volume upon it during the season when cotton is
being harvested and moved in the section which it serves,
but taking into account the capital and surplus of petition
ing banks in this case, the probable aggregate amount of the
legitimate demands of petitioning banks upon said Bank will
not likely cause said bank any embarrassment in meeting the
same, whether it be true or not that cotton and tobacco are
harvested and marketed at the same time of the year.
The cotton crop as a rule is harvested and marketed commenc
ing in August of each year and extending over the fa ll months
and probably into the months of January and February of each
year, although as a rule much the larger part of cotton has
passed out of the hands of the grower by the first of January
each year.
Respondent respectfully calls attention to the very
Reproduced from the Unclassified I Declassified Holdings of the National Archives
(6 *
able brief presented on behalf of Louisville, Kentucky,
to the Organization Committee by the Honorable Ollie M. James,
Honorable Stager Sherley, Honorable Richard W. Knott and
Honorable John V/. Barr, Jr. and printed in Senate Document
485, on page 187, from which respondent wuotes as follows:
"Tobacco is different from other crops in that
it does not go to market in the fa ll along with cotton, corn,
etc. The season begins in December and extends through March,
depending largely on weather conditions. As ean be at once
seen, it , like whiskey, ean be moved after the pinch in the
cotton section is over. Surplus funds from tobacco sales ean
find employment in the South during the planting and growing
season."
If these gentlemen correctly state the matter,
the two crops are marketed at different periods of the year,
at least in large part.
Respondent further calls
attention to the fact that the banks of St Louis probably
have heavier and greater demands upon them to move the cotton
crop than is true of Atlanta, he being advised that the St.
Louis banks supply in large part the capital neeessary to
move and handle so much of the cotton crop ± as is raised in
that State, Arkansas, and the parts of the States of Tennessee
and Mississippi which are in the cotton belt. If respondents
information is correct, and he affirms that it is correct,
the St Louis Reserve Bank would be confronted with the same
difficulty which petitioners allege now confronts the Atlanta
Bank in regard to the matter of furnishing funds to move the
cotton and tobacco crops at the same time. Therefore, no
advantage would be gained to the petitioning banks to be con
nected with the St. Louis instead of the Atlanta Bank in
these respects.
Reproduced from the Unclassified / Declassified Holdings of the National Archives
(7 )
(d)
Respondent shows that petitioners
that "Unmistakably the trend of the business of the two
communities is northward, less than 1fo of the business being
South of Nashville, Tennessee." If tlis is true, it is
difficult to understand how their situation would be bettered
in the banks were attached to St. Louis, which lies
almost due west of both Springfield and Clarksville. If the
trend of the business of the two communities is unmistakably
northward, it would seem more logical for petitioners to be
attached to the Cleveland Bank than to the St. Louis Bank,
but respondent insists that for reasons already stated and
those hereinafter stated, it is not necessary for petitioning
banks to be removed to either of said reserve bank citie®.
Respondent is advised that a ll of said banks do considerably
business with the banks of Nashville, Tennessee, which is one
of the important cities attached to the Federal Reserve Bank
of Atlanta, and shows that one of the Directors of the Federal
Reserve Bank of Atlanta, Hon. W. H. Hartford, is a citizen of
that city, which is situated very near to Clarksville and Spring
field, (less than 75 miles distant). His knowledge of the bus
iness conditions of that territory will make it easily possible
for the Federal Reserve Bank of Atlanta to become accurately
advised of the needs and demands of petitioning banks and a ll
others therein, whether there be anything unusual or extra
ordinary in the nature and course of business in said section
or not.
In addition to the foregoing, respondent is ad
vised that a very much larger per cent of the business of said
Reproduced from the Unclassified I Declassified Holdings of the National Archives
(8 )
tno communities is south of Nashville than that stated in the
petition, and asserts that investigation would disclose this
to he the fact. It is naturally very difficult to obtain exact
sta tistics on such a matter, hut respondent is advised that
a very considerable amount of business in said two communi
ties is toHard the South and not Northward. Also respondent
states that petitioning banks on account of their location
close to Louisville, one of the important cities in the Eighth
District, as well as to Nashville, one of the important cities
in the Sixth District, are virtually enabled to utilize the
facilities of both of these banks, the Atlanta bank directly
and the St. Louis bank indirectly. Said banks dfcing business
with Nashville, send their checks on Louisville to the banks at
Nashville, and in payment of these checks Louisville sends
the Nashville banks checks on the Reserve Bank of St. Louis,
which checks in turn are sent by the Nashville banks to the
Federal Reserve Bank of Atlanta for credit, and recently
interchange of business of this character resulted in the
establishment of a credit balance in favor of the Federal
Reserve Bank of Atlanta against St. Louis in excess of
$50,000.00. No reason is seen by respondent why this ar
rangement and interchange of financial balances cannot
continue, and it results, as stated, in petitioning banks
and others in their neighborhood enjoying the credit fa c il
ities of both the Atlanta and the St. Louis Reserve Banks,
the former directly and the latter indirectly.
Respondent also calls attention to the well known
fact that large amounts of tobacco is now being raised in the
State of Florida, and the peculiarities of the tobacco industry
Reproduced from the Unclassified I Declassified Holdings of the National Archives
(9 )
in general, if any exist, will necessarily have to receive,
and in fact have received, the careful study of the officers
and directors of the Atlanta Bank.
(e)
Further answering respondent advis
of the petitioning banks, to wit, the Peoples National Bank
of Springfield, has already and since the first of January,
1915, availed itse lf of the facilitie s offered by the Federal
Reserve Bank of Atlanta and has applied for and obtained a
loan from said bank to the extent of $22,000. Respondent says
that the officers and directors of the Bank found no difficulty
in accommodating said bank, as one of its member banks, and
easily and readily and quickly responded to its request to
participate in the discounting privileges to the extent stated,
and said Bank, through its proper officers and directors, is
ready to likewise and similarly respond to a ll of the ordinary,
legitimate and reasonable demands of said banks when called
upon in the future, whether by said peoples National Bank, or
others of the petitioning banks.
-3Further answering, respondent says that the
relations of petitioning banks with their correspondents will
in no wise be altered by the operation of the Federal
Reserve Act, or by their being placed in the Sixth or the
Eighth Federal Reserve District. It is true they will be
expected to keep the reserves required of them under the Act
in the Federal Reserve Bank of Atlanta instead of in the
Federal Reserve Bank of St. Louis, but there can be no serious
inconvenience in this.
If the prayer of the member
Reproduced from the Unclassified I Declassified Holdings of the National Archives
d o )
banks of Springfield and Clarksville is granted, doubtless
other similar petitions in this Reserve District and in other
Reserve Districts will be presented to this Honorable Board,
and i f this or other similar petitions are granted, so far as
the Federal Reserve Bank of Atlanta is concerned, it will
at once bring prominently into view the capital requirements
of said Bank as measured by the terms of the Federal Reserve
Act.
No one can doubt but that careful consideration
was given by the Organization Committee to such matters as
convenience, accessibility and the trend of business in the
apportionment of the various Districts, and the selection of
Reserve Cities. This was a duty imposed upon the Organisa
tion Committee by the Federal Reserve Act, Section 2, which
is as follows:
’’That the Districts shall be apportioned with
due regard to the convenience and customary course of business
and shall not necessarily be co-terminus with any State or
States. ’’
In determining what regard was paid to this pro
vision of the Act by the Organization Committee, no better
way can be devised than to quote from the report of the Com
mittee itse lf. Said Committee said:
’’Among the many factors which governed the com
mittee in determining the respective districts and the selec
tion of the cities which have been chosen, were:
First. The ability of the member banks within
the district to provide the minimum capital of #4,000,000,00
required for the Federal Reserve Bank, on the basis of 6fo of
the capital stock and surplus/member banks within the
district.
of
Reproduced from the Unclassified I Declassified Holdings of the National Archives
Second. The mercantile, industrial and financial
connections existing in each district and the relations
between the various portions of the district and the city
selected for the location of the Federal Reserve Bank.
Third. The probable ability of the Federal Re
serve Bank in each district, after organization and after the
provisions of the Federal Reserve Act shall have gone into
effect, to meet the legitimate demands of the business, whether
normal or abnormal, in accordance with the spirit and provis
ions of the Federal Reserve Act#
Fourth. The fair and equitable division of the
available capital for the Federal Reserve Banks among the
districts created.
Fifth. The general geographical situation of the
district, transportation lines, and the facilitie s for
speedy communication between Federal Reserve Banks and a ll
portions of the d istrict.
Sixth. The population, area, and prevalent
business activities of the district, ehether agricultural,
manufacturing, mining, or commercial, its record of growth
and development in the past and its prospects for the future.
"In determining the several districts the com
mittee has ebdeavored to follow State lines as closely as prac
ticable, and whenever it has been found necessary to deviate
the division has been along lines which are believed to be
most convenient and advantageous for the district affected."
In explanation of their decision as rendered
on April 2, 1914, from which these excerpts are taken, sub
sequently the said Committee made a further statement, April
10, 1914, to wliich attention is called and in which they
reaffirm the above.
When du» regard and consideration is given to
the very thorough study and investigation of the subject,
the great care which was exercised by the Organization Com
mittee in the performance of its duties in the laying out of
the country into twelve d istricts, there must arise a strong
presumption that the very considerationd which are advanced
by the petitioning banks in this case were duly passed upon
of
and considered by said Committee, and the attaching/peti
tioning banks to the Sixth District instead of the Eighth
District was deliberately done. It will be prestoed at least
Reproduced from the Unclassified / Declassified Holdings of the National Archives
(1 2 )
prima facie that said Committee considered the fact that
equal
petitioning banks would enjoy/if not the same mail,
express and transportation facilities i f attached to the
Atlanta District as they would i f attached to the St. Louie
D istrict, and their principal business, as they themselves
now allege, constituting only a small portion of the tobacco
crop, the Bank at Atlanta could furnish them a ll reasonable
and proper rediscounting accommodations, notwithstanding
the fact that said bank would likewise be called upon to
furnish similar accommodations for the cotton industry and
a ll other agricultural and commercial industries in the sec
tion# Respondent respectfully submits that the decision of
the said Committee should not be lightly altered or overridden.
Respondent in sists that there has not been sufficient time, as
yet to determine what will be the result of the operation
of the bank# under the Federal Reserve Act in the districts
as they are now made, and it is respectfully claimed that
sufficient time should be given to the practical operations
under the Act in the Districts now formed to determine
whether it is as effective, efficient and satisfactory as it
would be if their boundaries were changed.
All of which is respectfully submitted on behalf
of the Federal Reserve Bank of ATLANTA.
deputy Chairman and Deputy Reserve Agent.
Counsel.
@FedFRASER