The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
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Federal Reserve Bank of St. Louis
122. - Boundaries °I pRDistricL
(1914 - 1927)1
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Federal Reserve Bank of St. Louis
•
.
.
1.ae,Irlt 24, 7c.g .3.
I ji
ood. Research 1119411410,
Litalu7erd Uniroity,
Dear air;
0•
In res ,onso to wour
t 17Lb., ida43ased to Hon. Carto r Glass,
afid 1i I
been roforrod to me in now/if:lame i ti his lottur t.o sou of Alk;ust
e :you aro ativi3cid that tile briofs and
23- de
aroriLtlits -)raso.-atii.',.to tho orcallizatiou coinnIttoo of tho 2cdoral ltoorv0 r3ankdi in con.ons for tho °oatIon
oati on 7.71th
of Fedora Reserve PiGttiots in tho Unitod
docrzvnt
)
1Aat,on, werc priatod :r.; z 1.
'ander tho cripti oi "L -_,ctatl. on o.:: .1'odera1 nesorvo
TAstricts in tho Unitod. btatos". This is
.1-c.lovra as mnt* roirimt #406, 63rd Conc;ress,
2116 3303310119 and Wt.1:1 pnblinhod by the Governmut Llrintiat; .)ffi of.) In 191/2.
.i1030170 13o&'d q1.3 .110
.
sarnius oopios of this clocumnt, lut ocinolbly
oololos may be had frota public librarios or
throuji tho 2odora1 llosorve :13=2; of "jah Vrau01300.
.
Uuyx)rint ondont of.:Documents at
'las.hington advises that he has no copies in
stock.
Very truly yours,
(Sed) De La Mater
J.
Chief Clerk.
-)
.(IS, KAN...
RECERICK HALE, ME.
SELOEN P. SPENCER, MO.
LAWRENCE C. PHIPPS. COLO.
V
..,BERT
.,..50N. TEX•
'SNARLER A. CU
WILLIAM J. HARI-
r•
,
CARTER GLASS,
ANDRIEUS A.JC
-..'1112
4:7"
teZ 0.44111"Tilt°
TRUMAN H. NEWBERRY, MICH.
WILLIAM B. MC KINLEY, ILL.
IRVINE L. LENROOT, WIS.
KENNEDY F. REA, CLERK.
August 23, 1923.
Ey dear Er. Eldred:
Responding to yours of August 17th, I have referred your letter to the Federal Reserve Board, Treasury Department,
with the request that they send you direct, if available, the desired
information.
The Senate Document Room has no record of this !material ever
having been printed as a public document.
Sincerely yours,
*444.
Wilfred Eldred,
Food Research Institute,
Stanford University, California.
Copy to Er. John DeLaMater, Chief Clerk Federal Reserve Board, Trezsury
Department, enclosing Er. Eldred's letter.
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Federal Reserve Bank of St. Louis
REQT:1\IED
d
127,
FOOD RESEARCH INSTITUTE
STANFORD UNIVERSITY
CARL L. ALSBERG
JOSEPH S. DAVIS
STANFORD UNIVERSITY, CALIFORNIA
ALONZO E. TAYLOR
DIRECTORS
August 17, 1923
Honorable Carter Glass,
United States Senate,
Viashington, D. C.
Dear Senator Glass:
Two years ago, while teaching at the University of
Virginia and giving an extension course in money and banking
at Lynchburg for the American Institute of Banking, I was
referred by a Lynchburg banker to the evidence which had been
presented by the city of Richmond to the Reserve Bank Organization Committee in connection with the selection by the
Committee of the cities in which Federal Reserve Banks iere to
be established.
I am informed that the Senate by resolution required
the Organization Committee to file copies of all briefs and
written arguments made by each city applying. to the Committee
for the location of a Federal Reserve Bank, together with
the poll of the banks and the reasons relied upon by the
Committee in-fixing the boundaries of the reserve districts
and locating the reserve cities.
Can you advise me whether this material was ever
orinted as a public document, and if so whether Zany or all
of it is available for distribution? I should be very appreciative of your courtesy if it is possible for you to have
it sent to me,
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Federal Reserve Bank of St. Louis
Thanking you, I am
Very truly yours,
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Federal Reserve Bank of St. Louis
Jaly 27, 1923.
Dur:zrt ::.ot or Uoixn,,
17. J.
tteuti on:
r. D. B. Wat:%ins, Dales Dept.
(,(3..atleraens
Receipt ita ac'tlicyalodoed of ,,Jour letter
of J-aly 26th, requostine a list of the :oder
al
Reserve ilanim and. descri-ntion if th.o territorie
s
eorved by each.
Thor° is auclosed. a copy of the Annual
Report of th--_,1 .'2oderal Reserve 3o=c1 coverin{,P
operations darine tho calendar year 1922, on -?
in..;•6
420 of vtlidx noare a map of the 2edora3.
Reserve
System indicatiTc the Fedoral Reserve .13allis
aid
their brnacilos.
On pages 41-1 to 4:19, inclusive,
is a description of the var5.oua .Yederul Reservo
istricts indicating the colintios in each dintr
ict.
Ver. a"...tly yours,
-
taignetti)
Fddy
Walter
Eddy,
Assistcat L. ooretary.
J
(Enclosure)
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Federal Reserve Bank of St. Louis
0 ,\
Z
7
L jar It LONPVI, 1
OF NEW JERSEY
ELIZABETH,N.J.
July 26, 1923.
Federal Reserve Board,
Washington, D. C.
Gentlemen:
Will you please give us a list showing the locations of
the Federal Reserve Banks and the territories which they
cover.
We will appreciate your early attention to our request.
V %truly murs,
v lp 1111/Pr
ales Department.
DBW-D
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Federal Reserve Bank of St. Louis
FEDi7.t.L_ iETT"`"
9...rte, “ 10, 17.I.
rear Povernor Young:
T acknowledge rfmeipt of your letter of the
35th irtstant, 4.r.1,
1tive to the saggestion of the
Aot1n7 Third Issistant Post!.ttRItmr 3111.1!ra1 that the
eties of Nortnoti, T9brering and Uarqmette be transf:erred to thl ;110.cazo relerfi1 Reaerw! -riiJtect.
.
hope thqt :mu will 'b=2 able,
you -11?1
44..70
you ete.te you Itelieve
tn !Imke nomif vrrarnts that will
over,!ome any cmr
thnt the tankere in those
roo,y bwit,
Vcr7 truly vurs,
Governo r.
Mr. R. A. Young, Gov,rnor,
Federal Reserve Bank,
Minr.canlis, Minn.
FEDERAL RESERVE BANK
OF MINNEAPOLIS
September
c
\(?)(''
2P 3;*
)
0L
Hon. W. P. G. Harding, Governor,
Federal Reserve Board,
Washington, D.C.
Dear Governor Harding:
This will acknowledge receipt of your
enclosing
lettex_pf . e_pteMb_er,8th4 addressed to Mr. Rich,
the Acting Third Assistant Posta copy at a letter froth
s of
master General relative to transferinp, the citie Federal
and Marquette to the Chicago
Negaunee, Ishpeming
Mr. Rich requested that I reply to
Reserve District.
as I formerly lived at Marquette,Michigan,
-the communication
Minneapolis
and am familiar with the railroad service from
It has never been satisfactory,although
to that district.
Circumstances,
we have tried repeatedly to have it improved.
seem to have
however, over which the railroad people do not
render a better
any control, make it impossible for them to
service.
I have talked the matter over with
that we can make
Mr. Rich very carefully, and I believe
complaints that the
arrangements that will overcome any
With that in mind,
banks of Marquette County might have.
sentative bankers to
we are asking a couple of our repre
fied that we can iron
come to Minneapolis, and feel satis
no request from
out the situation so that there will
• district. ;
those banks for transfer to the Chic
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Federal Reserve Bank of St. Louis
Yours respe. kuily
Gove
RAY-0
or
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Federal Reserve Bank of St. Louis
8,
September 8, 3.921
Dear Lir* Mob.:
I °solos. ibr 7:yar Lifor.lation cow of
q ioh was rocoivati tothv from the
a letteri ii;:P- I
koting Thin' Assistant :oat:ster Commie
together with a carbon of Iv rep1;1.
Very truly yours,
Governor.
Mrs John H. Rich, Fedeisl Reserve Agent,
Federal Reserve Bank,
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Oeptember 3, 1921
Jtjdear Sir:
a:limy/10E1ga receipt of your letter of the 7th instant,
find note ycrar inquiry as to whether it vould be pm:AU:able
to place Tiegaunee, Ishpeming and Strquette, Michigan, in the
Chicago Federal Refierve District*
ot providcls that the
Section 2 of the i'ederal Teaer
Itesorve Board shall have power of reviev over the
Federal
action of the Reserve Bark Organization Comitteo to the mtont
of adjastinE., the aistriots already formed* Ole 2ederal Reserve
Board has no rover, however, to abolish a district or to change
the location of a Pederal Reserve Bank* it is vested with the
authority, however, to transfer parts of one distriot to
another and it has on several occasions ca;Wroised this authority*
If the banking and business 00131U/lities of Xegaunee, Ishpeming
and 712r,pette should desire to be transferred to the nicago
District from the Ifirtneopolis District, it v,suld be in order
for those concerned to file a petition with the Pederal Reserve
Board, raking torrsel application for au.ch transfer and stating
the reasons 'why the change would be deoirablo• Upon receipt
of such application notice will be tiled with the lode:al
'Reserve Bank of iiinneapolis yawl a data for a hearing would be
sett in order that all arements for and against such proposed
transfer oould be subritItted to the Board.
Very truly yours,
Governor.
Romw wo 4 narrows,
Aating third Assistant Postmator Genera,
Past Office Departz2ent*
New`
DIVISION OF REGISTERED MAILS
IN YOUR REPLY. REFER TO
•
iloot Offire Brpartntritt
-417tk4E1\
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THIRD ASSISTANT POSTMASTER GENERAlt
S
Ititt.511ittgtnit
E
9
U
1921
oFfict: dfr
THE
coVEI:Not?
Sept ember
Honorable 1. P. G. HardiLL;,
Governor, Federal Reserve Board,
Washington, D. C.
Ly dear Sir:
Your attention is invited to the following communication from
the Superintendent of the Tenth Division of the Railway Mail Service
at Gt. Paul, Einn.:
"The bulk of the Federal Reserve business at Negaunee,
Ishpeming, and Marquette, Mich. is handled from the lilinreao1is,
hlinn., Federal Reserve Bank.
"In connection with investigations made to improve the
safety of dispatch of registered mail involving such matter,
it is found that time would be saved and greater safety ob-,
tained if this business were handled through the Chicago Federal
eserve District. If dispatchOvia Ish. & Chi. Tr. 111 at 5:00
▪
same would reach destination via Ish & Chi. Tr. 101, the
following morning.
"Present dispatch from Llinnearolis, is via Soo & 1:p1s. Tr.
8, to Champ. & Eilw. Tr. 3 via Pembine to Yackinaw & Calumet Tr.
2 at Champion, arriving Ishpeming 1:30, Negaunee 1:40, and Marquette 2:10 P.M.
"It is reconLlended that the Federal Reserve management be
requested to place Negaunee, Ishpeming and Marquette, Mich., in
the Chicago Federal Reserve District."
There are also transmitted herewith copies of letters from the
postmaster at Negaunee, Lich., on the subject dated May 27 and July
12, 1921.
1ill you kindly advise whether it would be practicable to place
Degaunee, Ishpeming and Marquette, Lich., in the C icago Federal Reserve District.
Sincerely yours,
QP
0 i ,G'T GD
2
/
j nclesure
I
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Federal Reserve Bank of St. Louis
'
rd
JActing T4 ...ssistant Postmaster General.
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Federal Reserve Bank of St. Louis
COPY
UNITED STATES POST OFFICE
Negaunee, Michigan
July 12, 1921.
Chief Clerk
Railway Mail Service,
Chicago, Ill.
My dear Sir:
er of May 21
With further referenoe to your lett
to and from the Federal
regarding safeguard of registered mail
Office are in the St. Paul
Reserve Banks. The banks of this
your attention to the fact
district and we desire to oall
presumed to be valuable
that considerable registered mail,
Saturday on Mack & Cal tr 2
is being received at this office
it necessary to carry
via Cha & Milw 3 2:00 P.M. which makes
Perhaps if this situation
this over to monday following.
at St. Paul, arrangements
Is explained to the Federal Reserve
ges to eliminate this
may be made to make necessary chan
n.
receipt of valuable on Saturday afternoo
Sincerely yours,
(Signed)
Peter Mardee, Jr.
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Federal Reserve Bank of St. Louis
COPY
UNITED STATES POST OFFICE
Negaunee, Michigan.
May 27, 1921.
Chief Clerk RMS
Chicago, I110
With reference to your letter May 21 regarding improvement
with view of safety of registered mails to and from the Federal
Reserve Banks and the banks of this city.
The bulk of such registered mails from this office is dispatched
on Ishpeming & Chicago tr 102 which we assume is transferred
to Chi Owen and Minn 1 at Fond du lac. If you think that
Mack & Cal 1 to Champion & Mil 602 dispatch would be better
we would be glad to take it up with the banks for this dispatch.
However Champion is a small junction town and can not see
where this mail would get the proper protection during the
wait of two hours.
We receive the bulk of this registered mail from the Federal
lays at
Reserve via Cha & Milw 3 via Mack & Cal 2. This mail
12:55 PM and we consider that it
Champion from 9135 AM to
would be much safer to make our DSS&A tr 10 express pouch, a
office
registered pouch. We would certainly suggest that your
conditions surrounding this lay over at
get a line on the
Champion. As we use local time in this city, the mail of
Mack & Cal 2 is due here at 2:40 this time PM. Therefore we
experience considerable difficulty in getting this mail to
and
the bank before closing hours. We realize the importance
holding this mail over night and frequently
the danger in
them.
use the telephone and send office messengers to notify
offices
Both the Marquette Diohigan and Ishpeming Michigan
dispatch
receive their Federal Reserve registered mail by this
we believe. While they are in Federal buildings, this mail
carries the same danger of the lay over at Champion if there
be
is any. Receipt of this mail over Ish & Chi 101 would
over night is concerned but we
good as far as not holding
know nothing regarding conditions at transfer points,
(Signed)
Peter Murdee Jr.
Postmaster
',P1::)>;:\Sr,;,
,
ca.'1(.::::521\i "E. •
Form No. 131.
°fine
ence
FEDERAL RESERVE
BOARD
•
Date_
itri_
March 19, 1,520
Subject:
o
he Annual Report of the Federal Reserve Board for 191S, gives
the counties cor:iprising the various Federal Reserve Districts.
In the Sixth Federal Reserve District the county of"Stone n
MississipiA was omitted, this county having been formed by reducilag Hai.rison
-inal area, and designating the northern half
County to one-half ita ori,s
"Stone" County.
The 1918 Annual Report shows 33auregard County, LouisianVas
a part of the Eleventh District, or Dallas Districti whereas it is wholly
within the Sixth or Atittnta District.
Kisc-37
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Federal Reserve Bank of St. Louis
Form No. 111.
Office Correspomence
To
From
Ur. &:oftd
FEDERAL RESERVE
BOARD
Date_
March 19, 1920.
Subject:
Mr. DataLlater
qier,4
In accordr\nco with our corrterIzttioz1orlored fir copy of letter)
to Rond_LicRaly & Coin, nny, in ref:4)0113e to a latter from thorn c:alinf: attiiiition to the omillsion of Stone County, 111$32issipy4, and with referonce
to Lai error in the Annu31 11,)port as to the district in which BotAuregrd
County, Douisinna. i 10011tOd•
When thin stri,tc-ment aper.zra in the t
inr.u.-.1.1 Roport for 1919, this
error will be corrected, and your r-cords ,
21iould be oh/tn.:pd. rocerlingly.
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Federal Reserve Bank of St. Louis
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
lAarcb 1t,
y Rt Company,
Rand .
536 South C1ri Streot,
Chicago, 1110
Ge.tlemen:Attentiou
r. E.J.Dalton.
Elanowledged of your letter of
Receipt
f
Marc- i 9tlirocting attention to an e--or nd to an
04-issidn' in the tiescription of certain Federal Reaerve
Districts as shown in the 1918 annufil report of the
FoUeral Rese--e Board.
Investi7,7ttion develops that the County of
thissishippi, w- , formed on January 1, 1916, by
Stone,
reducing Harriman County, :,issiselppi, in tne Sixth,
or Atlanta District, to about half its previous area
and doeignating the northern half "Stone" County.
5ever, was not advisei
The Federal Reserle Board, ho.
of t,As .cbange.
With reference to your iaquiry regwu(!ing
Ber-iuregard Cou 1y, inaiarAted as being in District No.
11. This county sould be shown in District No. 6,
the boundary line beton Districts Nos. 11 and 6
being the northern boundary of the Counties of Vernon,
Rapides and Avoyelles, Louisiana.
Our recoris ha %e been changed accordingly,
ard I tvJ obliged to you for bringing the matter to my
at*ention.
Very truly you,
(sive'
Assistant Secretary.
ISNN,
•
uOMPANY
11 . 131.:IMICEE:11`”
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.
11.1. 4rAvi11.1241mal1t436
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XCAGO -NEW 1r41111(114,LONDON
1,133.31.1
.1111,1111.11:3ti
:536 Naroccrulm c113.4A1ThAM 5-raau..z•T
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cmumai;to"
ViinicAtiam
March 9, 1920
c N\
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Mr. R. G. Emerson,Ass't.Seoretary,
Federal Reserve Board,
Washington, D.C.
Dear Sir,
In the Fifth Annual Report of the Federal Reserve Board
for the Year 1918, on page 872, District 6, under Mississippi,
Stone County has been omitted.
On page 875 in District 11, Beauregard County is listed
under Louisiana.
Should not this be in District 6 ?
Kindly give us a ruling concerning these counties at
your earliest convenience.
Address us, attention Mr. E.J.Dalton, and oblige
Yours truly,
RAIID MC21ALLY & COMPANY.
OVEls
Al
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Federal Reserve Bank of St. Louis
//S#
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Federal Reserve Bank of St. Louis
•rk!
/,,.••••"
RESERVE. BOARD FILE
FEDE L
V
May 10'
Dear Mr. Perrin:
adknowledge receipt of your letter of
.
.
M4y 3rd)reportiw your cor:.(33: ondeno
with the Spokane
.
;
b;Jalke regard'np trAnnfer of territory from thn ninth to
the twelfth fi3tr1ct. - The Board han been informed
unofficially tha!: tha Montana bahn will prohbly a* for
recomrenlation
a bracch, but will Vika no action until formAl
io.
13 r7)ceivod From thn FederAl Rellrim 114/1k of Minn-apel
I
the Bo:Ard
will bring your latter to tha attention of
At the rentin . on Monlay, but Co not balisive that
apy rea1jut4tmentm of rlietrict
will be , ./ored unless
convincing retoons Are offered in suprort of thn =sovment.
Very truly your,
Govrnor.
Mr. John Perrin,
ChairmAn o -f' the Bu .rd,
Fecilral Reserve Bank,
SAM FrAncisco, Cal.
FEDERAL RESERVE BANK
OF SAN FRANCISCO
ti
a
jo- losos
h .-\
. : f.
9i 4
JOHNPERRM
CHAIRMAN OF THE BOARD
AND FEDERAL RESERVE AGENT
:
t...2
i3
10,
31
0
y
3, 1919.
tlAY
Federal Reserve Bo9404.43-
ZNE)k
tiCS41°N°
Y\i%
Washington, D. C.
Dear Sirs:
I have today received the following telegram:
"Spokane, Washington
14T 2, 1919.
banks desire establishment branch Minneapolis bank.
"Helena
"Missoula banks favor Spokane as Federal Reserve center.
"Kalispell banks natural tributary Spokane business. Spok"ane bankers will use efforts to induce all member banks in
"Montana west of Butte and Continental Divide to make applicaWill you approve
"tion for attachment to Twelfth District.
"such action or suggest action that should be taken to bring
Missoula and Kalispell only eight hours from
"this about?
"Spokane with direct train service.
"SPOKANE AND EASTERN TRUST CCUPANY
"By R. L. Rutter, President
"EXCHANGE NATIONAL BANK
"By E. E. Flood, Vice President
"FIDELITY NATIONAL BANK
"By Thomas H. Brewer, President
"OLD NATIONAL BANK
"By W. D. Vincent, Vice President."
to which I have replied as follows:
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
"McLEAN
"RESERVE BRANCH
"SPOKANE
"Please comAinicate the following to Spokane and Eastern Trust
"Company, Exchange National Bank, Fidelity National Bank, Old
Your telegram second received. Readjust"National Bank.
ilment of Federal Reserve districts depends solely upon Federal
"Reserve Board as provided in Section two Federal Reserve Act
"The Federal Reserve Bank of San Francisco and the Federal Re"serve Bank of Minneapolis have no rivalry of terr2Drial com.
"9etition and each would view any proposed readjustment of
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Federal Reserve Board -
"their respective districts solely from the standpoint
"of the most effective service to members.
JOHN PERBIN, CHAIRMAN"
Chairman of the Board.
Eat:aAL
•
EiARD Fltr.
1SIATIONAL, BANK OF FAIIRMONsra
FAIRMONT, W.VA.
J.E.W ATS ON ,PRE slo
WALTON MILLER,V.cE
J.S.HAYOEN,VicE Prers'-r.
GLENN F. BARNS,CAsHIER.
N.E!JAMISON,Ass T. CASHIER.
.
JAMES H.THOMAS,Auorrow.
L.H.RANDALL, ASS'T.CASI-If ER.
SURPLUS $600,000
FAIR MO NT,W.VA .
March 19,1919.
5:10
COtNe
OFFICS
IOVI'S
GO'
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Federal Reserve Bank of St. Louis
Mr.W.P.G.Harding,
Governor Federal Reserve Board,
Washiripton'
fD.C.
rear Sir:We tank you for your very kind letter
of the 14th. t
,
Te have also had a letter/Trom the
Federal Reserve Bank of Richmond, explaining
the matter in detail and stating that they expected to take it up and make disposition az
soon as the next Liberty Loan Campaign was over.
We appreciate your prompt reply.
Yours truly,
Cashier
i
k_
RESERVE BOARD FitE
Wrch 17, 192 .
0
Dear Sir:
Replying to your 1-,tter of_the
15th
would state th -it t171 Fe
r1Reserve banks wIre locted
by the Federal Reserve Bank Org
Ani .Aion Committee before
.
the member:: of the Federal
Reserve Board ,iere 4p7o1nted.
Eirly tn 1q15 the rg- .v tion
, .
:es
war, made to ti-' Board tat it
rlyiF?s sc,
or the declnion:; of the Organization Cottee
but the Attorney Gmwral of the
United Staies rendlred
opinion that the Fed.lral Res
erve Board had no right to
ch:Ale the locItion of a Fedlra
I Pere balik,and the matter
was ,IccordIngly aropred.
Very trily your,
Governor.
/a°
\
\
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Federal Reserve Bank of St. Louis
Mr. G. H. Ccreell,
221 North Blatty St.,
Pittsburgh, Pa.
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Federal Reserve Bank of St. Louis
11:0‘4E Ei:a
FEDERAL RESERVE BANK OF RICH IsolQ6ld
FIFTH
DISTRICT
DIRECTORS
OFFICERS
GEORGE J.SEAY,GOVERNOR
CHAS A.PEPLE. DEPUTY GOVERNOR
GEORGE H.KEESEE.cAsHIER
C.V.BLACKBURN,Assi
CASHIER
THOMAS MARSHALL.JR ASST.DASHI ER
W.W DILLARO,Assr CASHIER.
JAMES A MONCURE.
ouw,criAmpqm
EDWIN MANN.eLuEnELD.w VA
D.R COKER.n.RTsv,,Lc.s c
HOWARD BRUCE.BALTIMORE.MD
CALDWELL HARDY,
H.B.WILCOX.BALTimoRE.mo
JAS.F.OYSTER,wAsH INGTON.
JOHN F BRUTON,wiLsoN, N.0 .
C.
EDMUND STRUDWICK.RicHmoNo
March 15, 1919.
1V1AR1 7 1919
o1:71
Hon. W. P. G. Harding, Governor,
Federal Reserve Board,
Washington, D. C.
My dear Ur. hardin:Your favor of the 14th inst. to hand
in reference te the movement for transfer to the
Fourth Federal. Reserve District of a portion of
West Virginia.
We had heard that such a move was being
discussed but have only just had confirmation of
it,
Enclosed please find copy of letter which
-r. Peple wrote the National bank of Fairmont, W.
Va., on the subject. I think a readjustment should
be made on a fair basis, witil a view to giving all
of our members the most efficient service, but such
portion of West Virginia as can reach Richmond as
readily as it can Baltimore should, I think, continue
to do business with us here. I do not, therefore,
think baltimore should ask for the transfer of territory simply for the purpose of increasing the volume
of business at that point. Such a move might also
suggest to Washington the idea of dealing with Baltimore, which I do not consider at all necessary.
As soon as Mr. Peple can get time to do
want to discuss the matter frankly with our
so, we
Baltimore 'Arectors, also possibly discuss it with
some of the Washington banks and then submit our
suggestions to the Federal Reserve Board. Lleantime,
we shall be glad to have any suggestions from you
in regard to the matte
Very t
yours,
Chairman of the Board.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
COPY
March 14th, 1919
Mr. Glen F. Barnes, Ceahier,
National Bank of Fairmont,
Fairmont, W. Va.
Dear Sir:
We have received your favor of March the 10th, edvising
us that certain balks in Barbourville, Test Virginia, and in
nearby towns are considering the advisability of applying to
the Federal Reserve Board for transfer from the Fifth Federal
Reserve District to the Fourth, in order that they may be able
to keep their reserve account at the Pittsburgh Branch of the
Federal Reserve Bank of Cleveland. Our attention has been
called to this matter several times of late, though we have
received no communications from any of the banks diesetly interested. Vve know, of course, that before granting such a request, the Federal Reserve Board would take the matter up officially with us, and we, therefore, thouint that it was best
not to take up the matter with any of the banks until they
approach us or the matter is brought up in an official manner.
te euite appreciate your preference to be transferred
to the Baltimore Branch of this Bank and we are satisfied that
several, if not all, of the banks to which you refer, would have
a like preference. Zhen the Baltimore Branch was established
vs felt confident that certain banks outside of the state of
Maryland, but more favorably situated with respect to Baltimore
than to Richmond, would, in the natural course of events, be
eventually transferred to the Branch. At the same time we felt
it would be wise to let the Branch acquire a certain amount of
experience before taking on any additional burden.
We would probably have broue.ht up the matter ourselves
and ascertained the wishes of member banks in a certain territory
before this but for the fact that our duties ns Fiscal Agent to
the Government and our rp.ny activities incident to the War have
ec fully occupied our time that we have naturally put off other
matters until a more convenient seeson.
.01 uill require a great deal of
This is a matter ve1.4
careful consideration and probably a considerable amount of in-
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Mr. Glen F. Barn es, Cashier,
National Bank of Fairmont,
airmont, W. Va.
- #2
Uarch 14th, 119
vestigation and correspondence. We could, of course, divide
the state of West Virginia along any convenient lines aid have
matters thoroughly understood between ourselves in Richmond
end the Baltimore Branch, but a transfer of certain balks from
the Richmond Bank to the Baltimore Branch would affect the
transit work in all of the other Fecleral Reserve Banks and
their Branches. Under these circumstancee, the transfer would
have to be carefully m9de along easily recognized lines and
would, of course, have to embrace all of the banks within a
certain territory, in order to prevent confusion in the transit
departments referred to.
We are no at the beginning of the Fifth, and we hope
the last, TAberty Loan campaign. Then that is o.;t of the way
it is our intention to take up thie matter. In the meantime
ye are doin7 everything in our power to neutralize any differences
in time, due to location, by making fair allowance in our transit
time to the West Virginia banks, regardless of cur three day
credit time for the state.
Very truly yours,
-
Deputy Governor
C AP-W
-
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
MAR 1 7 1919
GOVERNOR'S OFFIelf
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Federal Reserve Bank of St. Louis
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'SB -URGII POST
Cd4iAINTAINS LEAD
IN RESERVE BUSINESS
Pittsburgh Totals for Week
Exceed Cleveland by
$362,262,000.
Pittsburgh handily , maintained 'her
place as the leading center of the Cleveland Federal Reserve district for the
week ending March 5, according to the
official statement issued from the office
of the Federal Reserve system at Cleveland.
Cleveland is a poor second to this city,
having a total bank (business, computed
on debits to individual accounts and
debits to banks' and bankers' accounts,
of $234,493,000, as compared to Pittsburgh's $596,755,000.
The other centers in the district are
far below the total of Cleveland. Cincinnati, the third ranking city, .showed
a total of $84,349,000.
Totals for the week ending February
26, which are made public in the same
offcial statement, again show the decided superiority of Pittsburgh over
Cleveland as a financial center. These
give Pittsburgh a total of $131,616,000 to
the Forest City's $192,618,000.
The lead for total bank business in the
12 Federal districts is, as usual, main- •
tamed easily by the New York district,
which shows almost $6,030,000,000. The
business for the New York district was
$5,994,080,000 for the week ending March
5. Chicago is next with $1,773,347,000, and
the Cleveland district, due entirely to
the continued solid tIgures of the Pittsburgh center, ranks third with $1,004,783,000. *itbout the Pittsburgh totals,
the Cleveland d!strict would fall far below the coveted $1,000,000,000 mark.
The tatal business of the ,five leading
centers of the Cleveland district for
the week ending March 5 fellow; Pittsburgh, $596,755,000; Cleveland, 234,493,4300;
Cincinnati, 84,349,000; Columbus, 26,764,000;
Toledo, $26,000,000.
.111:111,
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http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
r
RittBVE WOJAD
\FEU.:
I
March 14, 1919.
Dear Sttr:
Receipt 11 •Acknow:10.1ged of your 1,
tter of
)4rch..lath ad.91,,
-Iirag that tiler!) is
7.s. M011tim lt
-
on foot to
brIng About the tr•An3f-yr, of certvin countior:, 1.n Northern
1 :tiia froo thz r'il'th Xo thil -Fourth Fede ..al R9r779
1
4
-i
District, 'Ind abating that the preference, of your Bunk is
-7
to be tr.mseerreci to the B. .1timore Branch of the Fecleral
Ba-:-)kof RichTrcnci.
The Boari.will bring this rratter to the irrecilqte
-ittlntion. of the Pedercil Thvrre Bark of Richmond,
'An
PO
.
as esrto,in tho victim of! ita officials al to 'your tr.- trinfEr to
the Baltimore Branch,
Very
yo'ars,
Governor.
Mr. Glenn F. Barn,
Thq National Bank,
Fairrivnt, W. Va.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
March 14,
Dear dr. Hardy:
The Board ha:; recc,ived a 'otter dtei!, Wirch 10th
from the Cashier of the National Bark 4o;7 Fair
mont, W. Va.,
reading as followg:
"A. trderltAnd thcrm is a movmen'i: on foot
requostIng th,11 banks of Barbour, Marion, Uono
rgalia,
Proiton, Rardolph, Tvlor and Upshur, .And poss
ibly
several other courties In Northern Neat
to
nuke !Application to thi7er l RalPrve
Board to tr:alsfnr
them from the Fifth Feciilr,l Reserve District
to the
Pittsburg BrAmch (:•!" the Fourth Faeral RestD
rva Bank of
Cleveland, Ohio.
fft hwro Ileen Invitad to join in
this movement,
but as a 131.0 portion of uul- )11tiins oricinat
es In the
East, ;itvid , beliove thts condition
m?
obtain with all
our coria Com:Anies in triz'. w!etion by reason of the
greater portion of thelfproduct going Et,
we, ther3fore, ouraves would much pr* or to be tr:-insf.a
rred to the
Baltimore BrInch of the 7ederal Reserve Bill*
of Richmond,
and believe all the banks In thistoounty arid
no doubt In
one or two adjoining counties, would join
us in cur effort
to acoomplish. this transfer,
w;.11 bl z:1,141 to have a lettcr from you in
ricg,4rd to the autter."
The Fairmont 73anit h. been ldvised that the matt
ls
er of
its transfer to the, BAltil.lorl Brancl-. hIs beim
re'erred to the
Fed-ral
rv L. ik of Richmond.
-r
Very truly ylare,
Mr. C-11d:Jell Hardy,
Chairman Federal ResIrve Bank,
Richmond, Va.
Goveriur.
•
THE NATIONAL BANK OF FAIRMONT
FAIRMONT, W.VA.
CAPITAL STOCK $400,000
J.E.WATSON,PForsioeN
,
J.S.HAYDEN,Vice PRes'r. WALTON MILLER,V.ccPRES'T
GLENN F. BARNS,CA sHic Fe .
N.E.JAMISON,ASS CASHICP/.
.T.
JAMES H.THOMAS,AuorroR
SURPLUS $600,000
L.H.RANDALL,ASS
.T.CASHIER
FA!RM0NIT,W.VA ,
March 10,1919.
5,21014113nos
a0130
IYINctVA
61.0, V
0311
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Federal Reserve Board,
Washington,D.C.
Gentlemen:
0
We understand there is a movement on foot
requesting the banks of Barboura Marion, Monongalia,
Preston, RanJolph, Taylor and Upehur, and possiblif
several other counties in Norther West Virginia, to
make application to the Federal Reserve Board to transfer them from the Fifth Federal Reserve District to the
Pittsburg Branch of the Fourth Federal Reserve Bank of
Cleveland,Ohio,
We have been invited to join in hhis movement,
but as a large portion of our business originates in the
East, and we believe this condition would obtain with all
our Coal Companies in this section by reason of the greater
port:oh of their product going East, we, therefore, ourselves
would much prefer to be transferred to the Baltimore Branch
of the Federal Reserve Bank of Richmond, and believe all the
banks in this county and no doubt in one or two adjoining counties, would join- us in our effort to accomplish this transfer.
We will be glad to have 4 letter from you in
regard to the matter. i1
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Yours
CaslYierF derai
..
30arti
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
1
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ttr-77
41
Febru_iry 1, 1919.
Dear Mr. Wills:
I adknowledge receipt e your letter
cf Janutia agthIpnclosing newspaper clirirwo.
The location of Li. Fediral Resrve bank,
as stated in it
charter, ci.nnot, Iccording to an
opinion of the Attorney General, be charsged durIng
thL1 life of its chlrtar, in' I do not beliaverthere
,
.ia any probability that the rl' xt Con7yeRs
consiAer
30
radicA in amerOment.
Vn‘y trnly
Gov-rror.
Mr. P. C. Wills,
Chaim= Fedorll Ren-rve Bank,
Cleveland, Ohio.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
R
FEDERAL RESERVE BANK
BOLA:10 SAIONIL3A09
OF CLEVELAND
6r,
03A1303?:1
January 29, 1919.
Hon. W. P. G. Harding, Governor,
Federal Reserve Board,
Washington, D. C.
301340 S.EIONU3A00
C
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dear Governor Harding:
The enclosed clippings are representative of a
number of articles that have been appearing in Pittsburgh
papers recently, and are, in my opinion, evidently part of
a program preliminary to an attempt to be made through the
next Congress looking towards the removal of the Federal
Reserve Bank from Cleveland to Pittsburgh.
I consider it my duty to inform you beforehand
of this situation.
You will observe that the figures of the parent
bank and of the branch in Pittsburgh are eonvaniently omitted
from these comparisons. It will also be remembered that in
Pittsburgh the Clearing House does not settle on a gold
basis, but trade balances for eashiersi checks, which considerably inflates the totals. In Cleveland settlement is
made on a cash basis and any carry-over is in the form of a
loan on which interest is charged.
I will send you tomorrow a comparison of the
of the
growth of the aggregate resources and liabilities
this district as of Deoember 31st, 1917,
member banks in
is
and December 31st, 1916. The increase in resources
was
approximately $361,000,000, of which 267,000,000
contributed by Ohio banks.
that
ment
will
Bank
t
Although I am a former Pittsburgher, I am confiden
justifying the establishwe will have no difficulty in
we
of the Federal Reserve Bank in Cleveland, and that
the Federal Reserve
also be able to furnish proof that
of Cleveland is now properly located.
Vary truly yours,
Chairman of the Board.
Enolosures.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
COUNT
Gray--Ira M. Johnston.$
iJ
63
nig
l'S FIITINCIAL
SIIIE1G-111 IS SHOWN • by
IN FEDERAL REPOHT
to:
Pittsburg's gigantic financial strength,
supplying more than half the total banking business of the entire district known
as the Cleveland Federal Reserve Banking district, is fully revealed in a statement issued from the officials at Washington. It shows that Pittsburg is
$243,346,000 ahead of Cleveland, which 11
ranked second in the list of cities' with
a credit of only *235,884,000 for the A
week ending January 15.
Cleveland, Cincinnati, Toledo and Co- 11
lumbus, the four centers which follow
Pittsburg in the Cleveland district in A
the order named, when combined, fail A
to reach the total of this city by *93,- A
815,000.
A
The New York district, as always, A
leads the list of districts with a total A
banking business, for the week ending A
January 15, of $5,706,874,000, followed
by the Chicago district with *1,(l63,176,000. Cleveland district is third in the
'list with $955,819,000, due to the sub- A
2
Istantial total supplied by Pittsburg.
For the week ending January .8, the 2
official statement shows the Cleveland
tidistrict business amounted to $1,063,)411,000. Ot this Pittsburg supplied
HE fedel over a half-billion, its figures revealing is itself decidiig
I federal reset -e
author , a bank business of $505,500,000.
The standing of the five leading cen- 3 Cleveland-) c. sba
:11 fl ters in the Cleveland digtrict
trict o, week ending January 15 is: for the
ago,
' When the Pittsburg
$4794.
)
30,000 iy five years
135.884,000 tricts, it was the
nd the cOuntr, Cleveland
Cincinnati
94,587,000 (istrict should be
vowed pnrpoc Toledo
29,028,000 :t, and it was left
Taeed at the a Columbus
25,910,000
center.; of their
pi
mnk
.
it
a referendu
• \.
• spective districts, were.
The bani(s pf the Fourth district declared by a large majority
. I favor of Pittsburg, but while the rule was followed everywhere
'se here it was set aside through influence exertel by Ohio
Aiticians, and Cleveland was given the bank. A • branch has
• ace been established in Pittsburg, but the main bank, with all
.He advantage accruing from it, remains in Cleveland.
Notwithstanding the discrimination in clevelan, favor, the
: ilk of the banking of .the entire district (corttprising Western.
1
• mnsylvania, Northeastern Ohio, and West Virginia) continues
be done in Pittsburg. This is shown by the detailed weekly re• trtS lvhiclv the reserve board at Washington is publishing. The
• Aria as a,.whole does a banking business averaging about a bil'n dollars a • week. and of this Pittsburg contributes more than
Two weeks ago the district total was *1.063.000,000.
• which Piltsburg'.s share . was *515.000.000. During-.the week
ling Jan. 15 the district total was *955.81.9.000. and Pittsburg's
are was $479.130.000: Cleveland's was $235,SS4-,000. CMPittsburg- did as much i)ttsinzSs as
vas 895 587.000.
leveland, Cincinnati. Toledo. and Columbus (the ;our other
centers in the districti, combined. And this is regularly the
:se. Some day common decency NV ill see to it that :Pittsburg is
ade.the district's reserve center and Cleveland the branch.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
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Pittsburg And The Reserve Bank
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lashington is itself decidi gHE federal reserve board
e
authoritatively the que„4 where the federal rese ,
bank for the Fourth reserve (or so-called Cleveland) c sr_°1 trict ought to be.
'When the reserve system was launched nearly five years ago,
nd the cOuntry was divided into -1_2 zones or districts, it was the
vowed purpose that the reserve bank of each district should be
laced at the•actual'financial center of,that district, and it was left ;
)a referendum of the banks to declare.where the center.; of their
•
I •
. :sspective districts, were.
Fourth district declared by a large majority 1
The banls•s of the
I favor of Pittsburg, but while the rule wasfollowed everywhere
'se here it was set aside through influence exertel by Ohio :
)hiticians, and Cleveland was given the bank. A branch. has.
'• ace been established in Pittsburg, but the main bank, with all ;
..••e advantage accruing from it, remains in Cleveland.
Notwithstanding the discrimination in cleveland's favor, the
Ilk of 11(e banking of the entire district (coutprising Western.
• stmsylvania, Northeastern Ohio, and. West Virginia) continues
be done in Pittsburg. This is shown by the detailed wcekly.re• ,rtS which the reserve board at Washington is publishing. The
• strict as a whole does a banking business averaging about a bil'n dollars a week. and of this Pittsburg contributes more than
Tkvo weeks ago the district total was $1.063.000,000.
which Pittsburg's share was :;};515.000.000. During the week
'Pittsburg's
'sling Jan, 15 thP district total was 4;955.81_9.000. and
Ciriare was $479.120.000: -Cleveland's was $;235,SS4,000.
.11UICS \vas 895.587.000. • Pittsburg- did as much i)usinzss as
-ieveland. Cincinhati. Toledo. and Columbus (the c01117 other lar.
,
t center- in the district ), combined. And this is regularly the
.se. Some,day common decency will see to it that Pittsburg is
ade the district's reserve center and Cleveland the branch.
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No 1530
E MERCHANTS NATIO_
OF
CAPITAL $100,000.°_o
R.T. LOW N DES,PREs1DENT
A.J.LODGE,VICE PRESIDENT
S. H.WH I TE,CASHIER
H. L. CUNNI N GHAM ,ASST. CASHIER
)ii
WEST VIRGINIA AT CLARKSBURG
SURPLUS 5100,000. _
00
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Federal Reserve Bank of St. Louis
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http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
December 2nd, 1918.
Dear Sirs;
iq
In accordance with your reque_st
returned herewith resolution of your Bank,
there is
regarding
the transfer from the fifth Federal Reserve District
to the Cleveland
District, which we
to this office in error.
however, if you
would
note was sent
It would be appreciated,
please be good enough to furn-
ish the information requested in the second paragr4h
of our letter to you dated November
Very truly yours,
Merchants National Bank,
Clarksburg, Y. Va.
Secretary,
4. .
4r
No 1530
RCIFIANTS NATION
OF WEST VIRGINIA AT CLARKSBURG
CAPITAL $ 100,000.°
R.T. LOWNDES,PREsiDENT
A.J.LODGE , VICE PRESIDENT
S. H.WH 1TE, CASHIER
H L. CUNN I N GHAM,Ass-r. CASHIER
SURPLUS $ 100,000. _
00
CIAARKSBURG,WATA.NOV
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http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
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http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
(
;ovomber 30, 1.316.
Actuelpt
Board of ii.coeL,olo
ct.
on
i..x.I.
,rt!zt from
is r4,:ao,ded,od
GA
joul. bc,a, Acid
LlorIrd
ovc2aor 26:ch. r,:'octin
to traa3fr your baz:c •nmli the FAie=orl A:!truit to
t;a› AxwAane.:. Diotriclt,
,
assilTa y3u to th: Attar[;11
3ranct.
;
p177 bc, brouvIlt to the 1,44 ,
7:oar a!r11.er, ,t1rip, ,
tontio%o. the Bon.rth
It irosi)ectrqUr suosted
t'i' t!n:
rid. !.1:7.o the t Lao at
iL rcv3o:Ire'3.
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http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
UTT
fiL2
,oveAmr 19, 1918.
14 dear Er. Lawder;
U00A
Mj
return from the Uhic4go
c:iuference I found your letter of the seventh_Instant
In con;AectIoA with the transfer of certain territory
from Districts 10A and Twlve, I woald sumest that the
point be raised officially throw:ft', judge Ramsey.
Li ?so has been made a Reserve dity,
efoctive December 2.
nines of the meetin, of the Directors
,
:l
of the 3ranch and report of cr)ortions have been read with
\
-„very much internat.
'!ory trod: :yours
,
...,00retary.
;:.r. •Jam R. Lawder,
iederal Reserve 3aalk,
Li 7aso, Texn.s.
B—H
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http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Uovember 13, 1918.
,ioar
r. IJawdor:
Your letter of Agly94,4r_aelre044o
jroderick, relative to the Gila Valley
H
rast ')ampany,
of Globe, Arizona, and enclosing cony of the minutes of your
lst airectorst meeting,
receivoa.
3rodoridlc is out of the city and will
be away for the romalnder of the week.
I will brilv your
letter to his !.2.ttention imoalately u2on his return.
Very trAly yours,
1..oiotaut ',=.iccretary.
,am R. Lawler,
11aluager,E1 .?so aranch,
Aderal :tcaerve T_Ia?.k of Dallas,
_1 %)nso, 2as.
A-H
DIRECTORS
SAM R. LAWDER, Manager
W. W. TURNEY
A. P. COLES
A. F. KERR
U. S. STEWART
11/
EL PASO BRANCH
FEDERAL RESERVE BANK OF DALLAS
EL PASO,TEXAS
J. M. PROCTER, Cashier
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
ITow:mber 7,
Mr. J. A. Broderick,
c/o Federal Reserve Board,
Washington, D. C.
Dear Yr. Broderick:
The management of the Gila Valley Bank 8:
Trust Company, of Globe, Arizona, w]lich has seven
branches, has indicated to us that it is their desire
to come into the Federal Reserve System. They are
now remitting for checks at par. Five of these banks
are in the Tuelfth District, including the main office, and three in the Eleventh District. The point
is that all of them get better service from the El .
Paso Branch than they can from San Francisco. ::".ost
of these towns are only a night's ran frail El Paso,
while it is a good deal longer to San Francisco.
They have indicated to me that they would like Gila
County, Arizona, transferred to the Eleventh District, and I have reason to believe that the other
banks in that county would welcome such a civnge and
that such a change would be beneficial to them. Also,
two of the banks in McKinley County, New Mexico,
have indicated to me that they would like to be in
the Eleventh District. As an e=mple of the discrepancy in mail time, it is necessary for mail from Gallup, in the Tenth District, to come through Albuquerque,
in the Eleventh District, before it goes to Denver,
and I understand that they would probably save a dy
in mail time if they were in the Eleventh District.
These matters are being referred to you for your advice, and not with an idea of bringing Up anything
which may not be in line with the policy of the Board
as regards district lines.
It was my understanding that El Paso vas to
have been designated a reserve city when the Branch
was established here. If such designation has taken
place, it has been overlooked by me.
•
PASO BRANCH
Page 2
FEDERA1, RESERVE DA.N1c OF DAI,1_,A.S
Co N'T'1 N LTA-TIC:0N SHE=
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
I attach copy of the minutes of OUT last
directors' meeting, which I believe will be of interFor the last fifteen days we have
est to you.
better then an averae of 7500 items a day,
handled
and other divisions of the Branch are correspondingly
active.
With best personal regards, Iam,
Yours very
.11
truly,
MINUTES OF THE ADJOURNED :.1.?ETING OF THE
BOARD OF DI ECTORJ OF THE EL PASO
BRANCH OF Thal FEDERAL RESERVE BANK
OF DALLAS, OCTOBER 18, 1918.
Imat
An adjourned meeting of the Board of Directors
of the El Paso Branch of the Federal Reserve Bank of Dal—
las was called to order by Chairman Lauder, at 10:10 o'clock
A.M. Friday, October 18th, 1918, in the Directors' room of
the El Paso Branch, with the following Directors present:
Sam R. Lawder, Chairman
A. F. Kerr,
U. S. Stewart,
J. 1. Procter, Cashier, Laid Secretary of the
Board, -as also 1-resent.
The minutes of the last meeting were read, and,
Kerr, seconded by la.. Stewart, were approved*
upon motion by
The monthly report of the lianager, covering the
operations of the Bank, was then read, which report was as
follows:
October 18, 1918*
To the Board of Directors
of the 7,1 Paso Branch.
Gentlemen:
For purposes of comparison I attach state—
ment of condition of the br,.nk, dated July 15th, a;ter
operation of one month, and October 15th, after operation
of four months*
I also attach a report of the physical
operations for the period July 15th to August 15th,
inclusive, and for the period of september 16th to
October 15th, inclusive*
The business of the bank, in all depart—
ments, has shown a gradual, but substantial increase.
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Federal Reserve Bank of St. Louis
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
CL„LPARATIVE STATELL24T OF CONDITIOliTIlE
EL PASO BRANCH, FEDERAL RES ':NE Bida OF
DALLAS, AT :I4DE OF BUSINESS JULY 15th ,
AND OCTOBER 102h.
RESOURCES
July 15th
Oct. 15th
Advances against B/L Drafts
27,447048 4 57,951.80
Expense current
30,818,62
3,311.17
Furniture and equipment
Overdrafts- Member Banks
,
2,500.58
42,294,62
.10
Difference Account
115002
43,451.33
Exchange for Clearing House
1,954053
405,745075 1,919,034069
Due from Head Office
MUtilated Currency other than our own
Fedcral .7'leserve Notes forwarded for
redemption
Collection Items- DebitsHead OfficeAccount Transfers bought
139,954.33
If
Items in process collection
from other Federal Reserve
Banks
1, 550,311.541
747.160.87
ft
Rediscounts in irocess collection from Head Office 267,154.15
341,395.90
Member and Hon-member Banks and Bankers
974,197.60
652,084,09
Vault Custodies
1,000,00
338,950.00
National Bank N tes and Notes other Feder
al Reserve Banks.
272,72500
659,081.00
Federal Reserve notes on hand
317,500.00
225,000.00
369.39
Nickels and cents
1,535.83
13,500.00
10,000.00
Gold Certificates
22,750.00
30,000.00
Silver Certificates
6,912.50
965.00
Gold Coin
23,300,00
43,950.00
Silver Coin
3,000,00
Legal Tender Notes
Other Federal Reserve Bank Notes #3,908,085,52,15,269,337.36
TOTAL - WW1
ON.
LIABILITIES
245071
Transfers Bought and sold
Net Charges
12.23
Interest Earned on B/L Drafts
1.00
Penalties on Deficient ResJrveL;
Due to U.J.Treasurer, General Account
42,850,496.76
.
Due to Member Bank Reserve Accounts
4,281.37
Due to Non-member Clearing House ccounts
580.53
Cashier's Ex ense and Return item checks
Collection Items- Credits::count Items received from other Federal Reserve Banks for credit Fed,eral Reserve Banks, Dallas, in process
572,054,25
collection
Member and Yon-member Banks and Bankers
329,413067
Federal Reserve Notes outstanding
150,000.00
Trust Receipts issued
1.000.00
-43,908,085.52
TOTAL
•
11.11
1,775.81
528.91
218.50
164,855.99
2,664,338.99
5,937.16
555,146.89
872,585.11
665,000.00
338 950.00
5,269.337.36
DISCOUNT OPRATION0
The offerings of Llember banks of paper have increased
during the past month, notwithoranding the fact that some live
stock and other products have been marketed. It is thought,
too, that the operations of the War Finance Corporation have
relieved some of the banks w.i-dch would otherwise have used our
facilities.
Little change has been shown or can be expected in the
conditions of the majority of member banks in this section, as
there is very little trading in live stock, and it will be
necessary, in many communities, to feed through the winter.
Offerings of banks are scrutinized very carefully by our Execu,
tive Committee, and all nom-essential credits are discouraged.
The physical operations of the discount department
follow:
Lugust 15th
Number rediscount offerings received
Number items
Amount Number items rejected
Amount
Number collateral notes offered
Amount
Number rejected Amount
Discount on rediscount offerings Discount on collateral loans - - 1.verage number offerings handled daily
daily Pa.erage number items handled
Average daily amount offerings
•..11
received
Average daily amount offerings
accepted
Average daily amount B/L offerings
Average daily number B/L Drafts
received - Interest earned B/L drafts Daily average number when i)aid eellections handled - Number employes
Salary expense Mod
Oct. 15th,
68
81
427
624
047,197.87 1,126,817.50
73
150
223,633.38
399,919.58
73
43
1,037,000.00 2,917,400.00
4
4
36,000.00
55,000.00
10,766.28
21,40200
4,664.79
1
1,559.0
6
21
26
116,622.99
168,509.06
93,433.78
2,139.40
157,691.00
4,726.49
7
126.91
8
2
210.00
9
255.34
310.00
s of the
After discussion of the .:,atter with the officer
and I recommend, that our byHead Office, it is thought desirable,
Head Office and the
laws be amended, subject to aiTroval by the
that instead of civing our member
Federal Reserve Board, to provide
and bills payable, as
banks credit at face value for rediscounts
11 Paso Branch credit the
has been the custom heretofore, the
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Federal Reserve Bank of St. Louis
face of such offerings, less the discount, and forward the
actual items discounted, together with all necessary schedules,
to Dallas, for a_,)N.oval and pledge with the Federal Reserve
Agent, and return. Our method of accounting would be changed
so that we would carry all rediscounts and bills ,o.yable accepted by the El Paso Branch on our ledgers, and discount
earned and unearned w. uld be carried on the books of the Branch
until transferred to the Head Office at regular intervals. This
will avoid duplication of work and will be more satisfactory to
our member banks.
In accordance with the b7;-laws, Mr. Coles, on rctober
7th, designated Mr. Kerr to act on the Executive Committee
during his absence attending an important conference of War
Department officials in Vashington, and Mr. Stsuntt, on October
14th, designated Mr. Turney to act in his stead during his absence attending his son at Roswell during a serious illness.
DISTFICT CLEARING HOUSE OPERATIONS
An increasing number of items is being handled in the
District Clearing House, as is shown by the following re art:
The daily average of items from ,eptember 16th to
October 15th, inclusive, was 6520.
There are now only four towns in Arizona in the Tleventh
Federal Leserve District which are not on the .ar list of the
El Paso Branch, nine towns in New Mexico, and nine in that part of
Texas assigned to the M. Paso Branch. It is thought that ultimately
all of these banks will lend their co-operation in this ,iatter and
make remittance to us without a collection of charge.
The proper operation of this department,
all of the _others in the bank, has been seriously
the absence of clerks from the office, due to the
Spanish Influenza, as high as five employes being
time.
as well as
affected by
epidemic of
out at one
The physical operations of the District Clearing House
follows:
ITEMS DISPATCHED
LIVE])
ITEMS PC-
NO.
23828
Local C.H.
Dm-members 17933
Other F.R.City6489
6727
" F.R. Co.
5265
Dalla Co.
643
Dallas City
80251
Members
6498
Government
94
M.B.Debits
12427
Coupons
..A.scellaneous 622
162997
162997423,811,802.04
NO.
From
Bought 108
Members Exchange
Members immediate credit23803
81543
Members deferred "
15026
ziediAe "
F.R.Ban:cs II
3909
Mincellaneous
38608
F.D.Banks Deferred
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Federal Reserve Bank of St. Louis
AMOUNT
879,509.58
3,988,379.61
9,486,407,27
3,613,599.74
2,739,647.08
3,104,240.76
,T."OUT:T
7,535,227,86
1,411,451.63
3,876,479.46
1,498,533.71
1,274,1)36.54
191,134.46
5,628,390.75
993,103.73
407,692,90
27,275.49
967.975,46
23,8l1,802.04
.
14
.
c ; , y,::.
:i:.1.". :.;7 . 6
f
. . 0 .'
C
A. a.-. co .,
' ;i:,;5 0 0
— , .r
July 15th
October 15th
August 15th
$13,975,291,57 ;20,331,839.14
.
Total amount items :andled
125771
66741
Total number items handled
7
781,987
1
582,303.8
zverage daily amount items handled
2781
Average daily number itemd "
Average number non-member re40
mittances received daily Average number return items
56
daily
Number maps each thousand
2
items handled
Number misroutes each thousand
0.65
items handled
Average number items 12.,J.nd1ed
699
570
daily each employe
Average salary cost per item
.00373
.0049
handled
Total postage e.A:pense transit
ms
ite
Average postage expense per
items
Actual number days served by
117
employes 7
6
Number employes
470.0 0
326.98
•Salary expense month ending
net
Transfers bought and
601.24
245071
charges
23,811,802.04
162997
952,472.08
6520
53
78
3.4
0.7
896
.00337
256.69
.00159
182
8
550.00
395.69
CASH DIVIbION
ort
l be seen by the following rep
An increase in this division wil
ected in view of
exp
, and a further increase may be
currency shipof physical o-oerations
d Office to absorb charges on
of the Rea
the recent decision
ments from and to member bankst
oent
Received
NO.
Currency
Silver
Gold
79
27
11
117
A—OUNT
,1,531,656.00
235,353.99
208,492,50
1,975,502.49
NO.
76
37
17
129
AMOUNT
1,569,100000
147,650.00
233,500.00
1,950,250.00
August 15th
e transfers
Total number $transfers exclusiv
ce covering drafts .-1:aid by
to Head Offi
them
Daily average for same
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
October 15th
527
20
418
17
August 15th
e transfers
Total amount transfers exclusiv
drafts ra.id by
to Head Office coverinL;
them
Daily averaLe for same
Office covering
Amount transfers to Head
drafts
Daily averae for same
Office covering
Number transfers to Head
drafts
Daily average for stme
shipments - - Total amount incoming cash
Daily average for same
shipments - - Total amount outgoing cash
Daily average for same
ments
Total number outgoing cash ship
Daily average for same
shipments - Total number incoming cash
same
Daily average for
received - Total number i_eces currency
same Daily average for
ived Total number pieces silver rece
for same
Daily average
Total number pieces gold received
Daily ,Nerare for same
nt
Vault Custodies in custody this Departme
oyes
Number empl
Salary expense
c9,241,273.58
355,433059
c7,066,596.56
294,441.52
1,005,497.92
38,672.99
460,629.82
18,425.17
156
6
19442,054.00
55,463.85
1,680,910.00
65,035.00
112
4
130
5
113
4.5
1,975,502.49
82,312.60
1,950,250.00
81,260.41
129
5
117
5
263,992
10,999
190,000
7,917
1,000
41
338,950.00
2
250.00
MIL
1.4
October 15th
66,100.00
2
185.00
EARNINGJ AND EXPENSES
Branch are shown
Detailed figures showing the e penses of the
ings of the Branoh are not
below, and while it is realized that the earn
the Branch were inaugurated without
,ertinent, inasmuch as the services of
been received on transactions
regard to profit, the earnings which have
r of interest.
handled by the Branch are shown as a matte
EXPENSES
august 15th
Salaries, Bank Officers Clerical Staff
ft
111 others (C.L.:zell)
Directors' Fees
Officers and Clerks Travelling 1xLenses
Pent
Telephone
Telegraph
PostaLe
xpressage
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Federal Reserve Bank of St. Louis
October 15th
841.66
1,690.50
841.66
21 267.21
75.00
70.00
375.75
35.00
5.00
12:2..71
166.92
542.9C
34.66
449.20
249.88
October 15th
August 15th
$ Expenses:
Printing and Stationery
Repairs and Alterations
Al]. other expense - - Equipment
TOTAL ELENSE OPERATION - -
4,3:52.69
46.15
3.00
613,96
74.25
5,242.51
17.662.11
22,014.80
9,501,47
14,743.98
659.11
17.00
410.68
1..11
y
Net earnings
TOTAL
EARNINGS
- .4
"Zet charges, transfers bought and sold
rediscount offerings
Discount
Discount collateral notes
Interest earned B/L drafts
Penalties on Deficient Reserves
6
601.24
21,402070
1,559.01
128.91
228.45
23,920.31
Less rebates on prepaid
1,906.51
notes
22,014.80
Ratio operating expenses to gross earnings -
19.8A
,
395.29
9,671.86
4,664.79
255.34
14,987.28
243.30
14,743.98
/
35.6L6
AUDITING DEPARTLEJIT
DePartment reports veriDuring the period reported the Auditing
ft Stamps on hand; cashiers
fications of the cash; War Savings and Thri
hers issued; rediscounts and bill
checks, return item checks and expense vouc
s accounts have been reconciled.
of lading drafts; and that all member bank
annual convention of
On September 10th and 11th I attended the
addressed, my subject
h assembly I
the New Mexico Banicers Association, whic
of Dallas Deans
Branch of the Fedenal Reserve Bank
being "What the El Paso
largely attended, there was
While this convention was not
to its Members".
the El Paso
that the Federal Reserve Bank of Dallas and
every evidence
ers.
r memb
Branch were very acceptably serving thei
ted the Head Office,
During the early part of October I visi
routine
s on many matters of policy and
whcire I conferred with the official
meeting with the
ns of the Branch were
and where I found that the operatio
utive ComBoard of Directors and t;e rxec
satisfaction and approval of the
.
mittee, as well as the other officers
the tern place in conditions over
Practically no change has take
s for the
Texas being good and prospect
ritory, ranges in parts of Western
be had during the winter.
ncial support can
c
future bright, if the - roper fina
products have
Mexico, where agricultural
n,
The same is true of Eastern New
conditions affect stocicie
where varying
been hvarketed with good results but
cf them
the spring and winter, many
re
who will have to be carried throuh
ence that merchants everywhe
every evid
necessarily having to feed. There is
sits
avings depo
it to the very utmost,
perous.
in the district are curtaining cr3d
employed, largely,are pros
where labor is
are on the increase where points
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Federal Reserve Bank of St. Louis
be accepted
Whereupon, Er. Jtewart moved that the rel:ort
h motion was seconded by Er. Kerr and
and spread upon the minutes, whic
unanumously adopted.
of the
It was moved by Mr. Kerr, subject to the approval
the Federal Reserve Bank of Dallas and the Federal
Board of Directors of
of the by—jaws of the El Paso
Reserve Board, that the title of Article III
be amended to read:
as
Branch of the Federal Reserve Bank of Dall
"Offerings for Discount and Rediscount".
article, be amended to read:
and that Section 1, paragraph la), said
are kept at the
"Member banks whose reserve accounts
sending any paper eliPible
Branch shall have the option of
Reserve Bank, either
for discount or rediscount by a Federal
as for credit with the
to the Federal Reserve Bank of Dall
l
ch for credit. Such member banks shal
Branch, or to the Bran
it is their desire
Office whether
signify in writing to the Head
Office or
rings of such paYer to the Head
to submit theit offe
ified all such offer—
so sign
to the Branch, and when they have
ver, after
submitted in the ,:..nner chosen. Howe
ings shall be
er banks desiring to
memb
having exercized this choice, such
s either from the
this manner of submitting offering
change
vice versa, may do sO upon the
Head Office to the Branch or
r thirty days notice. Of—
approval of the Head Office afte
such member banks to the head
ferings of paper submitted by
Head Office for credit on
Office will be received by the
rings of such parer submitted
the books of the Branch. Offe
be received for immediate
by member banks to the Branch will
ect
the books of the Branch, subj
creuit, less the discount, on
e of the Federal
e Committe
to the approval of the Lxecutiv
immediate credit
of Dallas. Paper for which
Reserve Bank
Branch, together with such
has been given on the books of the
necessary, shall be uromptly
other information as may b.,
as
e Federal Reserve Bank of Dall
transmitted by the branch tot,
. Paper
Committee of that Bank
for aTTroval of the Executive
of
acted upon _promptly, and if any
so transmitted shall be
e Committed of the
to the Executiv
the same it; not satisfactory
shall be
of Dallas, the offering bank
kederal Reserve Bank
n".
rejectio
immediately advised of its
amended to
cted Items, said article, b
And that Jection 2, Reje
read:
which immediate credit
"If any of the paper for
Branch is, in the opinicya
has been given by the El Paso
Bank of
e of the Federal Reserve
of the Executive Committe
under
it
discour or rediscount,
Dallas, ineligible for
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Federal Reserve Bank of St. Louis
the provisions of the Federal Reserve Act, and regulations
of the federal Reserve Board, or is for any other reason
not acceptable for discount or rediscount, the same shall
be returned to the bank zi-kinu the offering, and the El
Paso Branch shall, upon advice from the Head Office, charge
the a,munt of the paper to the reserve account of the Bz-ink by
which it was offered, less the amount of unearned discount
thereon. The Executive Committee of the Federal Reserve Bank
of Dallas may authorize th Elezutive Comnittee of the El Paso
Branch to return offerings immediately to the sending bank
when the paper offered is clearly ineligible, er is for any
other reason not acceptable."
Which motion was seconded by rtr. 6tewart and unanimously adopted.
There being no further business before the Board, goon
motion duly made and seconded,adjournment was taken until the call
of the Chairman for the next regularly monthly meeting.
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Federal Reserve Bank of St. Louis
Chairman.
jecretary.
,
' PEDERAL.REZED E
BotLfiL
JUL 16 1917.
OFFjeE OF
AER,90ELANO
vtv
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Federal Reserve Bank of St. Louis
'L16! 91 inr
CIEL6 iaorgia
,
July 44, .14171
-
Corerno2
of
Son tor
taut c:aled.
He
iI
7
bein1 in
thn.t hie state oric:in:aly was oprose:i to their
e33 lo eaut Ath
the X42131.1) Di3trict bac=oe their busin
Orah1,nd Chicago.
,
17:1 thinl,s that if the riyominc banks
.1 of
pnrnittoa to join the 0lha Branch c. Groat d-,z1
thc hardshi:. -All be alinimted.
thio yeaI told the Senator tiv‘t wo had dincu3oed
southern part
tcry a1 tirl.t we rather tholIght that the
Ho sail that
of the State would want to co to Dmver.
that Cheyho (loubtea that very nuch. Ho even doubted
':sao
.olct want to r,o to Denver a3 their usines
onn ;
nainly east.
I said to his.'4 that we 9ou1d probably do
that we
:
1;0 have done 14 the case of 11, ra Orleans an. a31:
would eirculrt:s/the ban27.0 of the diotrict
that that no
for an c::proo:Jion o7 tclr wishes. He said
much pleased
:doubt 13ould satisfy everybody Lald 7m3 very
with the idea.
I believe that, under the circumstances,
:robnly that nicht be the safest course for
113
to purni-e.
no diThe Sln.itor all° indicated that IZToming had
be done
rector in the Kamm° 13:11k :7,:nA that if it could
ne of the State
they would appreciate it very much if someo
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Federal Reserve Bank of St. Louis
2
()
chant - would be c.prointetl.
of Wyoming - a banker or a mer
,
ming , %rc comtaxativIly
told him that the bmko in ryo
ld probably be dThult to
few and mall ancl that it wou
we would io the bent 7re
do what he Gumaated but that
raite proper to
micht be ,
:
could. My i. Ipre3sion i3 that it
ming a director if th:7; Omaha
have a ropreacntative of 'Uyo
l not be an irrcconcilablo
DrInoh. Senator Kendrick wil
it poo3ible to coly
enemy in ooze %!;e f;houlA not find
this part of hio oug- tion.
Sincerely your,
••
(Signed) Paul L. Warburg.
Copy to Mr. Delano.
December 22. 1916.
-
Memorandum for Mr. Jacobson:
Some time or other at your convenience, I should
like it if you would work out a statement showing the
effect on the Cleveland, Atlanta and St. Louis Reserve
Banks of making a change in the District lines, Riving
to Cleveland that portion of Kentucky east of the Tennessee River, and giving to the St. Louis Bank the rest
of Mississippi and all of Louisiana.
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Federal Reserve Bank of St. Louis
-1 ,z c;:cizivT7n)
' JAN 4 - 1917
i
t.
rYTFICE OF
w.,.... i./.zLANO
••••••••••••4
•
RECEIVED
JAN 4- 1917
OFFICE OF
MR. DELANO
DALLAS
DIST RICT
.
As at present
Constituted
Louisiana Banks
to be transferred
to Dist. No. 8.
After Proposed
Transfer
622
11
611
Capital and Surplus
89,867,000
02,975,000
086,892,000
3;L of Cap.& Surplus
2,696.000
89,000
2,607,000
No. of Banks
ATLANTA
No. of Banks
DISTRICT
As at present
Constituted
To be transferred
to Dist. No. 8.
389
Cap. & Surp.
1,667,000
3% of Cap.& Surp.
2 450,p00
(
(
CLEVELAND
As at present
Constituted
No. of Banks
( 21 La.
350
( 18 lass.
9,828,000 La.
1
47,934,000
3,905,000 Miss.
412,000
2 038 000
KeEtuck7 Banks
to be transferred
from Dist. No. 8.
V
I
After proposed
Transfer
55
(i‘
9 200,733,000
3% of Cap.& Surp.
After Proposed
Transfer
DISTRICT
755
Cap. & Surp.
/
810
013,084,000
t213,817,000
393,000
6,415,000
6,022,000 ./
ST. LOUIS
DISTRICT
To be transferred
to Dist. No. 4, To be trans- After proAs at present from Kentucky,
ferred from
posed trans
Constituted
(Dist. No.8)
La. and Liss.
fer.
No. of Banks
469
93,300,000
Cap.& Surp.
35 of Cap&Surp.
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Federal Reserve Bank of St. Louis
_
55
013,084,000
2,799,000
395,000
32 La.
464
18 lass.
12,803,000 La. 96,924,000
3,905,000 Liis
2,907,000
501,000
4111/
)
Form letter to be sent interested"
parties in matter of appeals from/
decision of Reserve Ba6 Organization Committee.
41.
4-4 '3-1
2
i
pc7i
4,1a41til ttt a
- t(8
, .1414 t/
:
1 WatA
i
\
BOATID
2
I 2- -
Sir:
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
In reviewing the decision of the Reserire bank
Organization Committee, which designated the twelve
Federal reserve cities and defined the geographical
limits of the districts to be served, the Federal Reserve Board realized that there were legal questions
to be determined as to its powers under the statute,
and it was for this reason that Regulation No. 1 provided that in all arguments on appeal the question of
jurisdiction might be argued as well as the merits of
each case.
Upon consideration of the several appeals it
became necessary for the Board to take advic, from the
3
Department of Justice as to the extent of its powers
under the statute. The opinion of the Attorney General, dated NOvember 22, 1915, which held that the Federal Reserve Board has not the power to abolish any of
the existing Federal reserve banks, intimated that there
was doubt about the Board's power even to change the location of any such bunk. It was, therefore, deemed advisable to ask that the Attorney General express his
opinion on the specific question whether the Federal
Reserve board can legally change the designation of any of the
Federal reserve cities. in response to this request the Attorney General has held that the Federal Reserve Board is
without power to change the present locution of any Federal
reserve bunk. A copy of this opinion is enclosed for your
information.
I am, therefore, directed to advise you that an order has soon entered dismissing for want of jurisdiction
all appeals and petitions requesting a change in the designation of the Federal reserve cities.
Respectfully,
Governor.
_
Fora letter to be sent interested
rtes in 1-„etter of eree„le from
decision of .eserve eank Organizution Committee.
4-23-16
Sir:
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Federal Reserve Bank of St. Louis
In reviewing the decision of the heserve Benk
OrLunization Committee, which eesii;nuted the twelve
Federal reeerve cities and defined the geogruphiCal
limits of the districts to be served, the Federal i\eserve Board realized that there were legal questions
to be determined as to its lovers under the statute,
and it was for this reasor that P.egulation No. 1 provided that in all arguments on ppeal the question of
jurisdiction might be ergued as well as the merits of
each case.
Upon consioeration of the several ameels it
became necessary for the Bourd to take advice from the
Department of .;ustice as to the extent of its powers
under the statute. The opinion of the Attorney Generel, dieted Nevember 22, 1915, which held thet the Federal heserve hoerd has not the power to eboiish any of
the existing Federal reserve banks, intimeted that there
Wee doubt about. the Board's power even to change the location of any sucn bunk. It was, therefore, eeemed advisable to ask that the Attorney Genorel expreso his
e
opinion on the specific question .hether the Feder- l
the designation of any of the
Reserve Board can illy change
Federel reserve cities. in response to this request the Attorney General has held that the Federal Reserve Board is
without power to change the present locetion of any Federui
reserve bunk. A copy of this oTinion is enclosed for your
inforeation.
1 um, therefore, directed to advise you that an oract' has peen entered dismissing for want or jurisaiction
ull eppeals and petitions reqeestine, e change in the designation of the Federal reserve cities.
hoopectfully,
Governor.
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Federal Reserve Bank of St. Louis
•
FEDERAL RESERVE BOARD
WASHINGTON
April 21, 1916.
Dear Ur. Elliott:
The Board decided this morning that it
4/23/it
would be well to put into your proposed letter giving
out the opinion of the Lttorney General, the fact that
the former opinion of the Attorney General that we
could not abolish any existing district intimated doubt
as to our power even to relocate a Federal reserve
bank within the district, and that, therefore, the
Board deemed it advisable to ask the Attorney General
to express his opinion upon this question.
It
Will you kindly redraft this letter and send
it back to me.
Very truly yours,
M. C. Elliott, Esq.,
Counsel, Federal Reserve Board..
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Federal Reserve Bank of St. Louis
•
FEDERAL RESERVE BOARD
April 18, 1916.
My dear Governor:As requested by the Board, I ukaiziA;
have prepared suggested form of letter f Pk°
rl
to be sent to the interested parties
transmitting copy of the Attorney General's opinion in reference to change
in location of Federal reserve banks.
I understand this is to be
taken up by the Board tomorrow but am
calling it to your special attention
today so that you may make such modifications as may seem advisable.to you.
Hon. Charlegi, S. Hamlin,
Governor.
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Federal Reserve Bank of St. Louis
•
I k.
FEDERAL RESERVE BOARD
April 17, 1916.
nEEORANDUM FOR COUNSEL:-
At the meeting of the Federal Reserve Board
this morning it was voted to request Counsel to
prepare letters sending copy of the Attorney
General's opinion on Redistricting to the Federal
Reserve Banks of Richmond and Cleveland, and to
the other parties in interest.
4r07
turn
ci
-
°
616
DEPARTMENT OF JUSTICE,
Washington.
April 14, 1916.
Sir:
you have
At the request of the Federal Reserve Board,
submitted the following questions for my opinion:
1.
ge
Can the Federal Reserve Board legally chan
Federal reserve
the present location of any
bank:,
(a) In the case where there has been no
alteration in the district lines, and
such
(b) In the case where there has been
lines as in the
readjustment of district
desigopinion of the Board necessitates the
reserve city in
nation of a new Federal
order that due regard may be given to the
ness
convenience and customary course of busi
2 of the Federal Reas required by Section
serve Act?
11.
cising
Must the Federal Reserve Board, in exer
readjust, preserve the
its admitted power to
$4,000,000 minimum capitalization required
ition
of each Federal Reserve bank as a cond
ment of business?
precedent to the commence
1.
essed the view
In my opinion of November 22, 1915, I expr
er on the Federal
that the "Federal Reserve Act" does not conf
the existing Federal
Reserve Board the power to abolish any of
s.
reserve banks or Federal reserve district
I believe that
icable to both
the reasoning of that opinion is equally appl
branches of the first question now submitted.
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Federal Reserve Bank of St. Louis
IL
•
616
Section 2 of the Federal Reserve Act provides:
As soon as practicable, The Federal Reserve
Bank Organization Committee shall designate not
less than eight nor more than twelve cities to
be knoNn as Federal reserve cities, and shall
divide the continental United States * * * into
districts, each district to contain only one of
such Federal reserve cities. The determination
of said organization committee shall not be subject to review except by the Federal Reserve
Board when organized: Provided, That the districts shall be apportioned with due regard to
business
the convenience and customary course of
coterminous with
and shall not necessarily be
any State or States. The districts thus creat
districts may from
ed may be readjusted and new
time to time be created by the Federal Reserve
Board, tot to exceed twelve in all. Such disdistricts shall be knoml as Federal reserve
number. * * *
tricts and may be designated by
Said organization committee shall be
as
authorized * * * to make such investigation
said committee
may be deemed necessary by the
in determining the reserve districts and in
icts
designating the cities within such distr
banks shall be severwhere such Federal reserve
ally located.
The same section further provides:
organiThe said committee shall supervise the
designated.of a Federzation in each of the cities
its title
al reserve bank, which shall include in
it is situated, as
the name of the city in which
"Federal Reserve Bank of Chicago."
designated
Since the Act thus provides that each city
location of a Federal
as a Federal reserve city is to be the
the location of a
reserve bank, it folloxs that a change in
the designation of
Federal reserve bank would in affect be
onment of one prea new Federal reserve city and the aband
viously designated.
I find no more warrant in the Act
and the
for the abandonment of one Federal reserve city
abolition of a
desilnation of a new one than I do for the
lished.
Federal reserve district when once estab
reserve city
The loaei to designate a new Federal
Or:ani.,:.tion Corn(twelve cities having been 1-1,111.aci by the
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Federal Reserve Bank of St. Louis
616
_3_
mittee), or to change the location of a Federal reserve
bank, is not expressly conferred by the Act on the Federal
Reserve Board.
If the Board possesses such power it is
only by implication from the provision that-The determination of said organization committee shall not be subject to review except by
.rovided,
the Federal Reserve Board when organized: P
That the districts shall be apportioned with due
regard to the convenience and customary course of
business and shall not necessarily be coterminous
with any State or States. The districts thus created may be readjusted and new districts may from
time to time be created by the Federal Reserve
Board, not to exceed twelve in all.
In my opinion there is no clear indication, either in
the provision just quoted or elsewhere in the Act, of an intent to confer on the Federal Reserve Board the power to
change the location of Federal reserve banks by the designation of new Federal reserve cities.
On the contrary, there
are indications of an opposite intent.
As stated in my
opinion of November 22, 1915, above referred to,--
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Federal Reserve Bank of St. Louis
The merely negative statement that the determination of the Organization Committee "shall not be
subject to review except by the Federal Reserve
Board when organized" clearly cannot be enlarged
into an affirmative grant of power to the Board to
review and set aside everything done by the Organization Committee. The reasonable view is that by
that language Congress meant that the determination
of the Organization Committee should not be subject
to review at all, except in so far as the subsequent
provisions specifically authorize a review by the
Federal Reserve Board. The only subsequent provision
authorizing a review of the determination of the
Organization Coniudttee by the Federal Reserve Board
is contained in the sentence-"The districts thus created may be readjusted
and new districts may from time to time be created
by the Federal Reserve Board, not to exceed twelve
in all."
Again, as stated in that opinion,-"A reading of the Act shows at once that the
Organization Committee was created not merely for
the purpose of attendin7 to the formalities of organization or to servo as a step-zap until the Federal
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Federal Reserve Bank of St. Louis
61
-4Reserve Board should come into existence, but
that it had an independent funtion to perform
and to that end Was invested with wide powefs.
That is to say, its furwtion was to cze
the system as contradiF,tiissi:ed frc-11 the function of the Federal Reseinve Board, which was
primarily to qdmi
.n.:ter the syst.em.
The duty of designating Federal Reserve cities belonged
to the Reserve Bank Organization Committee as a part of the
organization of the system, and the Committee was required
by the Act to designate not less than eight nor more than
twelve cities.
This duty is named first among those imposed
upon the Organization Committee, and it is imposed by the
same provision of section 2 which required the Committee to
divide the United States into Federal Reserve districts.
The same considerations that indicate an intention that the
several districts should be permanent would also indicate
that the designation of the cities was not to be made for
temporary purposes, but was intended to be permanent, subject,
of course, to change by Congress.
The designation was to
be made only after thorough investigation, and the same
machinery was provided to facilitate both the determination
of the districts and the designation of the cities.
Thus,
Section 2 provides:
Said Organization Committee shall be authrized
to employ counsel and expert aid, to take testimony,
* * * and to make such investigation as may be deemed
necessary * * * in determining the reserve districts
and in desiulatinR the cities within such districts
where such Federal reserve banks shall be severally
located.
In my opinion, this coupling of the duty of determining
the districts with the duty of designating the Federal reserve
cities within the several districts shows an intention on the
part of Congress that the cities so designated are to constitute the fixed centers in the scheme or system of division,
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Federal Reserve Bank of St. Louis
•
-5-
-616-
the duty of designating the cities being coordinate
with the duty of forming districts around them.
It
was left to the discretion of the Organization Committee whether it should designate the full number of
Federal reserve cities and establish the full number
of Federal reserve districts permitted by the Act.
The committee elected to designate and establish the
full number authorized, thereby practically suspending
the operation of the provision of the Act that "new
districts may from time to time be created by the Federal
Reserve Board not to exceed twelve in all. "
The prim-
ary if not the only purpose of that provision must have
been to take care of the situation in the event that
the Organization Committee had designated less than
twelve Federal reserve cities.
The fact that the Federal Reserve Board, aside from
the provision relating to the creation of new districts
"
from time to time, was merely given the power to "readjust
districts suggests that there was to be some permanent
characteristic or element in the districts created by
the Organization Colunittee.
If, however, in addition
to the power which the Federal Reserve Board has of
readjusting districts by changing their boundary lines,
it also possessed the power to change the location
of the respective Federal reserve cities within such
districts, then the Board could, by successive changes
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Federal Reserve Bank of St. Louis
616
-6
-
of cities and boundaries, entirely obliterate existing
districts and substitute in their place new districts totally different from those created by the Organization Com.
mittee.
I do not think that Congress intended to confer such
a power.
The Act provides that each Federal reserve bank is to
include the name of the city in which the bank is located.
By Section
4 it
is provided that the organization certifi-
cate of each bank shall state specifically - The name of such Federal reserve bank, the territorial extent of the district over which the operations of such Federal reserve bank are to be carried
on, the city and State in Inhich said bank is to be
located, the amount of capital stock and the number
of shares into which the same is divided * * *.
Upon the filing of such certificate with the Comptroller
of the Currency in the manner prescribed, such Federal reserve
bank shall become a body corporate and as such, and in the
name designated in such organization certificate, shall
have power - * * * * * * To have succession for a period of
twenty years from its organization unless it is sooner
dissolved by an Act of Congress, or unless its franchise
becomes forfeited by some violation of law. (Sec. 4.)
It is to be noted that there is no provision in the Act
by which the Federal Reserve Board may change the name of a
Federal reserve bank or amend its certificate in this respect.
The whole tenor suggests permanency.
The omission of Congress to grant, by express language,
the power to change Federal reserve cities is significant,
especially in view of the language of Section 11 (e) of the
Act, which confers the power - -
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Federal Reserve Bank of St. Louis
-7-
-616:
To add to the number of cities classified
as reserve and central reserve cities * * *; or
to reclassify existing reserve aria central reserve cities, or to terminate their aesignation
as such.
It would have been equally easy, had Congress desired to grant the authority tD designate new Federal
reserve cities, to have said so in express terms. (Tillson v. United Stat•)s , 100 U. S., 43, 46, quoted in my
opinion of November 22, 1915, s,liora.)
It may be suggested that changes in the "customary course of business" or other changes not foreseen
by the Organization Committee may result in inconveniences which the Federal Reserve Board cannot remedy if
its power to change the location of Federal reserve cities is denied.
The answer is that the remedy is with
Congress, in so far as it
may not already be supplied
by Section 3, which authorizes the establishment of as
many branch banks in any district as
may be found ex-
pedient.
To sum up my conclusion on the question of whether
the Federal Reserve Board can legally change the present
location of any Federal reserve bank, I am of opinion
that the Board has no such power, and that sucn power is
lacking whether there has been an alteration or readjustmert in the district lines or not.
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Federal Reserve Bank of St. Louis
616
- 8-
I I .
Coming now to the consideration of the second question
submitted, namely, whether the Federal Reserve Board, in
exercising its admitted power to readjust, must preserve
the $4,000,000 minimum capitalization required of each Federal reserve bank as a condition precedent to the commencement of business, I am of opinion that this question is to
be answered in the negative.
The Federal Reserve Act provides in Section 2:
No Federal reserve bank shall commence
business with a subscribed capital less than
$4,oco,000.
The so section also contains a provision requiring
subscriptions to the capital stock to be paid One-sixth * * * * on call of the Organization
Committee or of the Federal Reserve Board, one
sixth within three months and one7sixth within
six months thereafter, and the remainder of the
subscription, or any part thereof, shall be sul'ect to call when deemed necessary by the Federal
Reserve Board * * * .
Section
4
contains the following provision:
When the minimum amount of capitalstock
prescribed by this Act for the organization of
any Federal reserve bank shall have been subscribed and allotted, the organization committee shall designate any five banks * * * * to
execute a certificate of organization * * * * .
Upon the filing of such certificate with
the Comptroller of the Currency the said Federal
l'aserve bank shall become a body corporate.
The decrease of capital stock is authorized by the following provision
of Section 5:
The outstanding capital stock shall be
increased from time to time as member banks
increase their capital stock and surplus or
as additional banks become meMbers, and may
•
be decreased as member banks reduce their
capital stock or surplus or cease to be members.
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Federal Reserve Bank of St. Louis
616
-9Additional provisions relating to the decrease of
capital stock are found in Section
5
and
6,
as follows:
Sec. 5. * * * * When a member bank reduces its
capital stock it shall surrender a proportionate
amount of its holdings in the capital of said
Federal reserve bank, and when a member bank voluntarily liquidates it _shall surrender all of its
holdings of the capital stock of said Federal reserve bank and be released from its stock subscription not previously called.
In either case the
shares surrendered shall be canceled and the member bank shall receive in payment therefor * * *
a sum equal to its cash-paid subscriptions on the
shares surrendered * * * less any liability of
such member bank to the Federal reserve bank.
Sec. 6. If any member bank shall be declared
insolvent * * * the stock held by it in said Federal reserve bank shall be canecied * * * and all
cash-paid subscriptions on said stock, with onehalf of one per centum per month from the period
of last dividend, not to exceed the book value
thereof shall be first applied to all debts of
the insolvent member bank to the Federal i-eserve
bank, and the balance, if any, shall be paid to
the receiver of the insolvent bank. whenever the
capital stock of a Federal reserve bank is reduced,
either on account of a reduction in capital stock
of any member bank or of the liquidation or insolvency of such bank, the board of directors shall
cause to be executed a certificate to the Comptroller of the Currency showing such reduction of
capital stock and the amount repaid to such bank.
In Section
9 it
is provided:
If at any time * * * a member bank bas failed
to comply with * * * the regulations of the Federal
Reserve Board, it shall be within the power of the
said board, after hearing, to require such bank to
surrender its stock in the Federal reserve bank;
* * * * and said Federal reserve bank shall, upon
notice from the Federal Reserve Board, be required
to suspend said bank from further privileges of
membership, and shall within thirty days of such
notice cancel and retire its stock and make payment therefor in the manner herein provided.
It will be observed from the foregoing quotations
that the Federal Reserve Act expressly provides that no
Federal reserve bank shall commence business with a sub-
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Federal Reserve Bank of St. Louis
-616-10scribed capital of less than
zi,000,000. ( Sec. 2. )
They were each to be organized when the minimum amount
of capital stockhad been subscribed. ( Sec. 4).
Only
three-sixths of the capital subscribed is required
to
be paid in, the remainder being left " subject to call
when deemed necessary by the Federal Raserve Board.
(Sec. 2. )
The Act specifically provides for the decrease of
capital stock (1)
as member banks reduce their capital
stock; and (2) as they cease to be
members. ( Sec. 5.)
Member banks may cease to be members for any of
four causes cl.) Voluntary liquidation (Sec. 5);
(b) Insolvency ( Sec. 6);
(c) Violation of regulations of Federal Reserve
Board (Sec. 9 );
(d) Transfer from one Federal district
to another through readjustment
of districts (Sec. 2).
The Act specifically requires the cancellation of
capital stock where membership ceases under (a), (b) or
(c).
Secs. 5, 6 and 9 .)
No specific provision is made for cancellation of
capital stock where memoershib ceases under
(a).
supscribed in
While the minimum capital had to be .
order to commence business, the maintenance of that minimum
is nowhere prescribed by the Act.
The fact that the
Board is to determine whether more than half the subscription is to be paid in seems to indicate that the minimum
to be subscribed was fixed as a precaution to make sure
that ample credit should
of the system. •
be pledged to insure the success
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Federal Reserve Bank of St. Louis
616
Not only is the maintenance of the minimum not prescribed, but express provision is made for reducing the
capital stock as, or whenever, member banks "cease to be
members."
This language is general and includes in its
terms all cases in which member banks cease to be members..
It is coupled with no expressed condition that the minimum capitalization be preserved; and since the Federal Reserve Act required the orgainzation of the Federal reserve
banks upon the subscription of the minimum, it is obvious
that any reduction whatever made after commencing business
might reduce the capital below the minimum.
It is plain that a member bank can be a member only of
the Federal reserve bank of the district in which both are
located.
This is obvious from the nature of the Federal re-
serve districts and is assumed in Sections2, 4 and
9.
Of
necessity, therefore, when the Federal Reserve Board, in
the exercise of its power to readjust, transfers a member
bank from one district to another, such transferred bank
must cease to be a member of the Federal reserve bank of
the district from which it is transferred.
nhen it thus
ceases to be a member, the capital of the Federal reserve
bank may be reduced; and there is nothing in the Act requiring the reduction to be made subject to the maintenance of
a minimum capital.
It is to be noted that Section
5
provides that the
capital stock shall be increased and may be decreased under
the conditions
of Sections5,
6
therein mentionad.
and
9,
Succeeding provisions
however, make it clear that my is
here used in the sense of shall, as applied to cases aris-
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Federal Reserve Bank of St. Louis
•
616
-12-
ing under (a), (b) and (c).
It seems reasonable to
infer that it is used in the same sense as appliea to
(d).
But whether so used or used in its more literal
sense is here Lunate,:laI, for sc far at the answer to
the question submitted is cnncernad, the result is the
same whether the Board is required or merely authorized
to reduce the capital when member banks cease to be
members:.
Nor can any significance be attached to the fact
that specific provision is made for reducing the cap:,A
tal stock of a Federal reserve bank in cases arising
under (a), (b) and (c), while the Act is silent as to
cases arising under (d).
The cases specifically pro-
vided for include cases where the member banks cease to
be members Aa the direct result of their own acts or
conduct.
Cases under (d) arise where banks cease to be
members: as an incident of the ezer(?ise of the power of
the Federal Reserve
Board to readjust districts.
The
grant of the specific power to readjust carries with it,
as fully as if expressed in the Act, the power to do
what is necessarily incidental.
ed., 505;
(Broom's Maxims, 7th
193 U. S. 12.)
My conclusion as to the second question submitted
is that the Federal Reserve Act, in prescribing a minimum capitaztion of $4,000,000 for Federal reserve banks
as a condition precedent to cammencing business;, does
not require that such minimum capitalization shall be
preserved under the circumstances.
Very respectfully,
T. V% GREGORY.
Attorney General,
Tho Prezident,
The Mite House.
4/15/16
COPY
IZZL:IAIWILI I'M.
GO ITLEC:.
.
Eq
-
Attached hereto please find the distribution by groups
and states of member banIm in the 1st (Boston) P. a. district.
The standard of grouping is that adopted by the PreiLdinary
Organization Committee.
I
, roup 1 cohn)rises all member banks
with capital and surplus of .;250,000 and over, ,roup 2
co_xrises all member bunks with callitLa and surplus of over
e125,(;00 and not more than :,250,000, Group 3 comprises all
;
banks with capital anC. surplus of not more than ,125,(.00.
:eollowing the recapitulation showing the distribution
of banks by groups for the district as a whole, figures are
givcn showing the distribution by groups of the 54 banhs mist
Of the Connecticut river.
Those fiL;ures arc not identical
with those furnished you last evening, since they arc exclusive of data for the Llidllesen County rational Ban-e:,
which in Vebruary 1916 was absorbed by the Liddletown rational
Respectfully submitted,
(SGD) M. Jacobson
Larch 1, 1916.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Distribution by States and Groups of member wanaos
in the Federal Reserve District of Boston
:Ko. of:
:member: Capital
: ban:
Surplus
Capital :
and
:
Surplus :
:
Reserve
deposits
with F.
11.Ban:
:Subscrip—
:tion to
:stock of
:F.R.Bank
Maine
6
Group 1
10
3,550,000:4 1,983,000::;; 5,533,000:
332,000
n
2
17
2,025,000: 1,035,500:
3,060,500:
183,700
It
3
43
2,290,000: 3403,436:
3,293,436:
197000
Total
• 70
7,865,000: 4,021,936: 11,886,936:4
896,700
713,600
New hampshire :
Group 1
10
1,700,000: 1,800,000:
3,500,000:
210,000
If
2
19 : 2,075,000: 1,158,000:
3,233,000:
194,000
It
3
27 : 1,510,000:
517,500:
2,027,500:
122 100
Total
56
5t285,000: 3 475 500:
760,500:
8_1.
575,200
526,100
Vermont
Group 1
3
800,000:
460,000:
1,260,000:
75,600
tt
2
18
2,360,000: 1,092,000:
3,452,000:
207,200
It
3
27 : 1,825,000:
490,850:
2,315,650:
139,300
Total
48
4,985,000: 2,042,850:
7,027,850:
400 600
.1..
422,100
Massachusetts
Group 1
69 : 51,165,000: 37,470,000: 88,635,000:
5,318,100
" 2
57
6,750,000: 3,888,000: 10,638,00:
638,500
tt
3
41
2,677,500:
808,050:
3,485,550:
209,800
Total
167 : 60,592,500: 42,166,050:r 102,758,55012,767L700
.
6.166.400
Rhode Island
Group 1
9
4,700,000: 3,775,000:
8,475,000:
508,500
" 2
4
470,000:
205,000:
675,000:
40,500
ti
3
4
400,000:
81,000:
481,000:
20,900
Total
17
5,570,000: 4,061,000:
9,631,000:
726,800 :
577,900
Connecticut
Group 1
36 : 16,206,279: 9,826,652: 25,032,931:
1,562,200
tt
2
18
2025,000: 1,060,000:
3,485,000:
209,100
II
3
18
1,250,200:
385,000:
1,635,000:
98,100
Total
72 : 19,881,279: 11,271,652: 30,152,931: 1,973,500 : 1,869,400
Recapitulation:
Group 1
: 137 : 78,121,279: 55,314,652: 132,435,931:
8,006,400
" 2
: 133 : 16,105,000: 8,438,500: 24,543,500:
1,473,000
tt
3
: 160 : 9,952,500: 3,285,836:_ 13,238,336:
796,100
Total
: 430 :104,178,779: 67,038,988:' 170,217,767:S17.340,500
10,275,500
Connecticut —
•
West of River
Group 1
: 31
•
23,000,900: 1,305,600 : 1,360,054
it
2
11
2,190,000:
120,800 :
131,400
It
3
12
1 083 500:
64.100
65,010
Total
: 54:
26,274,400: 1,496,500 : 1,576,464
_
(a) Exclusive of (:;4,200,989 due to the
Old Colony Trust Conpany from the
Federal Reserve Bank of Boston on December 31,
1915.
Division of Reports & Statis
tics, Federal Reserve
Board,
'larch 1, 1916.
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Federal Reserve Bank of St. Louis
FALIFEL.LD
ITuraber of
banIca
Group 1
Capital and
surplus
courtilY
Due from
F.R.Bank
6% of capital an surplus.
9
ci:4,77C,1G0
;.502,500
•i:,;266,200
it
2
2
450,000
22,500
27,000
tt
3
4
323,500
16000
19,400
Total
15
:;5,543,600
:341,800
f:;332,600
Division of ileports & Statistics,
Federal Reserve Board,
Liarch 1, 1916.
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Federal Reserve Bank of St. Louis
•
k
LIMORANDUIV. FOR GOVE'RrOR HLI
0,
0
',I 1/
Attached hereto please find the distribution by groups
and states of member banks in the 1st (Boston) F. R. district
The standard of grouping is that adopted by the Preliminary
Organization Committee.
Group I comprises all member banks
,
!
with capital and surplus of .1 250,000 and over, Group II
comprises all member lanks with capital anci surplus of over
t125,000 and not more than ?,250,000, Group III comprises all
banks with capital and surplus of not more than .!q25,000.
Following the recapitulation snowing tne
distribution
of banks by groups for the district as a whole, figures are
given showing the distribution by c'roups of the 54 banks west
of the Connecticut river.
These figures are not identical
with those furnished you last evening, since they are exclusive of data for
the Middlesex County Kational Bank,
wRich in February 1916 was absorbed by tne Middletown rational Bank.
Respectfully submitted,
//t
Feb. 29,
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Federal Reserve Bank of St. Louis
1916.
•
FEDERAL RESERVE BOARD
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Federal Reserve Bank of St. Louis
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Federal Reserve Bank of St. Louis
New Haven, Connecticut,
February 12,
1916.
To the
Federal Reserve Board:
We have read with f7reat care and
attention the Reply made by the Federal Reserve Bank of
Boston to our Petition for Transfer from the District of
the Federal Reserve Bank of Boston to Federal Reserve District Number 2, of New York.
Their entire objection to the transfer seems to be
based on the broad ground of inexpediency
cular time,"
"at this parti-
laying peculiar stress upon that underscored
phrase, but give no material facts to support that contention.
Nor does it dispute most of the arguments in favor
of the transfer as advanced in our brief.
The chief arrilmrnt made and advanced in objection
to the change is that the Federal Reserve System has not
as yet had time enough, nor extended experience enough, to
work out;
therefore, not had time to show whether any
changes would be advisable or necessary;
that postpone-
rent of any Ihenge should be made to allow it to prove
out
by further experience whether such change would be advisable or not, as delay would be of no material hardship to
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Federal Reserve Bank of St. Louis
2
.
%he Petitioning Panks.
We submit that time nor extended experience will
not change the geographical location of these Banks nor of
this section, nor will it affect the natural trend of business of this section to New York which has existed for crenerations and which, we believe it fair to state, will, for
generations, so continue.
Nor will any amount of extended
experience of the Federal Reserve System change or affect
the necessity, justice or expediency of the transfer of
these Petitioning Banks to the New York District.
Furthermore, if any change is to be made, it should
be attended to now before the Federal Reserve Banks increase their functions and get into full and complete operation.
Such a change could now be accomplished very much
easier and with loss upheaval than then.
The Reply of the Federal Reserve Bank of Boston lays
particular emphasis on the assumel fact that these Petitioning Banks are not experiencing any hardship now and, for
that reason, no change is now necessary.
It is a fact that none of these Banks are experiencing any hardships, but it is simply because, with the
unusual
conditions now existing, very few Banks in any of the
Districts have had occasion to use the Federal Reserve
Banks;
but we believe it is always wise to prepare ahead for
even-tualities and emergencies before the danger is upon us
and
it is too late.
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Federal Reserve Bank of St. Louis
3
If this change can be granted it will mean thnt the
Ranks of this section will be assigned to their proper (iitrict, end ready rer any situation that may develop.
The Reply also states that the Petition for Detachrqent from the Boston District
ninadequate data,"
is
nor necessarily based upon
which we submit is not fair nor just to
our Petition, as we have furnished no data and made no claim
based on the operations or workings of the Federal Reserve
System as represented by the Federal Reserve Bank of Boston;
but have based the Petition entirely upon businos conditions affecting this section, and the natural affiliation
of banking business with New York City, together with the
tremendously greater volume of business of this entire section with New York, than with Boston.
When it is shown so conclusively that this section
is much more conveniently located to the 'vow York District,
and that practically all of it
business of all kinds goes
to New York, and that the banking business is almost entirely transacted there, why should this section be penalized
by an arbitrary ap,portionment to another Federal Reserve
District and obliged to transact its businees there, denying to the Member Banks the benefits and advantams that
should accrue to them from membership in the Federal Reserve System, when it is so clearly shown that such an assignment is unnatural, unimt and inequitable, and against
the known and acknowledged trend of business?
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Federal Reserve Bank of St. Louis
Conliderable stress to laid upon the point that New
York is the great distributing center of the country;
but
we affirm that this is all the more reason why these Banks,
from their convenient and advantageous location to this
great mart of trade, should be assigned to that District and
allowe'i. to reap the advantages and profits and conveniences
which this natural course and operation of business has provided;
but now denied them by action of law.
The Reply also states that this present Petition
11.1ati come under the power of re-ndjustment, and not of review, claiming thereby that a new issue is thus raised, and
that our petition must be now confined. to
"new facts and
data which have arisen since the original apportionment," etc.
re do not understand that the conOitions surrounding
this Petition are any different now than when it was originally made very nearly a year ago, or that the facts and
data then given are now irrelevant and ineffective.
Objection was made at the time these Banks were assigned to the Boston District.
But this Cowittee has nev-
er been favored with a copy of the record of the Orpanization Committee, made at that time, nor been favored with any
other reasons which prompted that Committee to assign these
Banks to this District;
and, so far as we are aware, they
were given no opportunity to In kieard on any review of that
apportionment.
It seems patent, however, that all of the
reasons for allying these Banks with the Federal Reserve
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Federal Reserve Bank of St. Louis
5
District of NEW YORK must have been disregarded.
And furthermore, because of that arbitrary assignment to the Boston District, none of the Member Banks of
this section have made use of the Federal Reserve Bank of
Boston, except to the extent required by law;
so that no
new facts, data, or cases of hardship, could or would arise
that could now be submitted.
We must base olir entire Petition upon the conrAtions
existing now and which have existed long before the Federal
Reserve System was enacted.
It is not our purpose to go
into a lengthy argument in reply to the answer made to our
brief by the Federal Reserve Bank of Boston, except to
briefly record again that our objections to inclusion in the,
Boston District were not intended, in any way, to be based
on potential functions of the Federal Reserve System which,
as yet, have not been undertaken on any comprehensive scale,
,
nor in any ray referred to any func tions Pertaininp, to any
check collection or Cleaning House System,
The statistics and data furnished concerning these
points was purely to show the trend of our banking business
to New York.
And we submit that, so far as we are con-
cerned, it is not a vital point whether New Yorlr. or Boston
will be made the logical point of clearing for Connecticut
checks.
It is essential to us that we be identified with
the District with whom, from time immemorial, our bustness
has been transacted.
* :21
c
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Federal Reserve Bank of St. Louis
6.
The Reply points out that thp, basis of our Petition
is
a
desiri:: to
900117n
the
MRXiMUrr.
of ban1cin7 facilities un-
der the Federal Reserve Act, and this, we had supposed up
to now, was a most laudable desire.
not be attained
District.
30
long
Ps
Ve know that this can-
we are attached to the Boston
Every phase and feature of our business directs
us to New York, as it can clearly be shown, in contradistinction to the statement, made by the Federal Reserve Bank
of Boston, that the ralls, train schedules, telephones, eto.,
are all much more favorable in the matter of frequency, saving of time, and expense, to New York, than to Boston.
We
can prove that very often Cash Letters from the Boston 'llearing House and from. Boston Banks are received too late to be
included in the work of the same day.
and that thta never
happens, except in case of error, with Cash Letters froll New
York.
It is a well established fact that the prompt collection of chenke by as direct a means as possible is essential to the proper conduct of banking business, which,
would be impossible if these Banks wore left in the Boston
District and eventually endeavored to make use of any collection facilities of the Poston District, frITI endeavored to
obtain any of the advantages and privilems which the Federal Reserve Act is supposed to confer upon the Member Banks.
We cannot agree with the statement made that checks
of Meber ;Banks on the Federal Reserve Bank of Boston are
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Federal Reserve Bank of St. Louis
7.
as current in New York ea checks drawn on the Trederal Re
serve hank of New York.
All of to Ilearin
House Rules and ReP7ulations of
the larger cities in this section require that all settlements must be made in New York funds and no other, and
these settlements must be made by a New York Draft on a New
York Bank and no other.
It is, therefore, a fact that all
of the reserves now carried by these 3anks in the Boston
District lie dormant, as they cannot be used in any of our
Clearing House Settloiannte:
whereas, if we were attached
to the Now York District, such reserves could, be nade nore
or less active.
The point raised that a nunber of these Melrber Banks
carry accounts with Boston Banks h-ls no material bearing on
this Petition, as these Bann also carry similar accounts
with Banks in Albany, Philadelphia, (Milan pnd other places
to facilitate the collection of notes, drafts, etc., which
faeiltties the Federal Reserve Syotem never contempipted to
our
owledge.
It does not seam to us, therefore, that further de-
lay should be suffered, nor does it seem to us that further
time .or experience will bring to light any new reasons, evidence or data bearing upon this Petttion or the luestion of
Transfer.
And that being the case, there seems to us to
be every reason for acting favorably upon this Petition now,
•
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Federal Reserve Bank of St. Louis
in ordor that t'k-
io Tanks may avail them3nlves of t
advan-
Federal Rearvo Alt, now
tages and privtle7t1s rcranted by the
denied them.
Respectfully submitted,
(committee of National Banks
of Western Connecticut,
By
Chairmen.
<
December 18, 1915.
Dear Lir, 21liott:
Delano, Ohair:aan of te Jo=ittee on Redistricting,
asked me, tqis mornina, if I would ask you to prepare a draft of
letter to be sent to the respective caansol and parties in all
pendina petitions for change of desianation of a 2edoral resrve
bank, statik; that the Board fouls that the opiaion filed by the
:'..tt)rney General, by necessary implication, at least, would seem
to preclude the Board from chanatat; the desination of any Federal
reserve bank to another clAy in the same district, without prior
authority of ,1o2k;ress.
.
You mijat add that if counsel differ on this question,
the Board would be ,;lad to have them file any briefs on the
matter, which, in duo time, would bo sent by the Board to the
Attorney „;oneral with a request that he aive an opinion upon tais
question.
Very truly yours,
(aisnca) C.z.
.4 0. Mliott,
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Federal Reserve Bank of St. Louis
j)un:el, eoderal Reserve
oard.
-
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Federal Reserve Bank of St. Louis
12-11-15.
10110BANDUL
I have read Ur. Elliott's memorandum of December 10th, in which
he reaches the conclusion that the Board would not be justified in making
any announcement to the effect that the Attorney General has definitely
ruled on the question whether or not the Board has power to change the
name and location of a Federal reserve bank within the distriot.
I agree with Mr. 3111ott that the Attorney General has made no
definite ruling on this question.
The only question, to my mind, is
whether the opinion which he has rendered does not necessarily negative
any such power in the Board.
He hap ruled that a Federal reserve bank
has received a 20 years charter and cannot be abolished without an Act
of Congress.
To my mind, it would seem clear that removing, e.g., the
Federal Reserve Bank of Clevnland to the City of Pittsburgh and changing
its name to the "Federal Reserve Bank of pittsburgh", would be tantamount
to abolishing the Federal Reserve Bank of Cleveland and to creating a
new Federal Reserve Bank of Pittsburgh.
It should, however, be remembered that Section 2 of the Act
prescribes that the Organization Committee shall supervise the organization,
in each of the cities designated, of a Federal reserve bank, which shall
include in its title the nano of the city in which it is situated, as
"Federal Reserve Bank of Chicago".
This would seem to fix the name and
situs of the Federal reserve bank.
Similarly, National banks are obliged to include in their
certificate of organization, the name of the bank and place in which situa—
ted., and until the Act of May 1, 1886, National banks had no authority
either to chanse their name or their place of business.
This right was
--2-finally given them under said
Act of May 1, 1886, but they
were only
allowed to remove their location
to some place in the same Sta
te within
thirty milos of the original
location.
Prior to said. Act of !lay 1,
1886, from time to time specia
l
statutes wore passod by Congre
ss, authorizing change of name
and location.
These will bo found on pace 176
of the volume entitled "The 7at
iona1 Bank
Act, as Amended", publishod by
the Comptroller.
The first caso of a
special otatuto in thia list,
is a statute authorizing a ban
k to change
its location from the city of
:Tow York to the City of Brooklyn.
This
wan passed July 22, 1868.
The second Act on the list is
one authorizing
the City National Bank of TTow
Orleans to chance its name to the
Germanic
National Bank of Now Orlean
s.
The Enabling Act of 1886, of
courao, has no application to
Federal reserve banks, and
I fail to nee haw any change of
name or place
could be made by the Fed
eral Reserve Board without an
Enabling Act from
Congress, as such change
would be in derogation of the
charter given to
the bank for twenty years
by Congress.
Furthermore, 1 can find no
power of review in the Federal
Reserve
Board an to the designation
of Federal reserve cities by the
organization
Committee.
The power of review given, by
Section 2 is confined, to a review
of the determination of the
:
,rgonization Committee, and
Section 2 shows
clearly that this word "de
termination" refers only to
the districting made
by the urcanization Commit
tee.
There is a clear distinction,
throughout
the Act, between the act of
the Orcanization Committee in
leiamlIal
Federal reserve cities and
in determining Federal reserv
e districts, and,
as I have said, the onl
y power of review in the Board wou
ld seem to be that
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Federal Reserve Bank of St. Louis
-3
of reviewing the determination of the Committee as to district lines.
Should, however, the Board feel any doubt as to this matter,
I can see no possible objection to requesting an opinion from the
Attorney General,
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Federal Reserve Bank of St. Louis
r"
.
e
--
,•
k
•"
December 10, 1915.
Dear nr. Glass:
r.rlliott h s just tolo mo Vat you desire to
have a copy of the opinion filod by himself and by LT,' Cotton,
in the mattor of the power of the Federal Reserve Board to
abolish Federal reserve districts and :Federal reserve bunks.
I brought the ratter up the eth(T thy before the Board, and
it
as
d,informally, that I could send you euch copies.
I therefore tax p1ea:mu:0 in uondint; them to ziou in confidence, as they have not yet been formally published.
Sincerely yours,
Hon. Ckirter Glass,
E-use of Representatives.
Enclosures.
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Federal Reserve Bank of St. Louis
FEDERAL RESERVE BOARD
WASHINGTON
Deconber 10, 115.
My det....r Governor:
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Federal Reserve Bank of St. Louis
As requested, I have examined the opinion of the
Attorney General on the subject of redistricting with
the view of determining whether the conclusions reached
can be said to cover the question of whether or not the
Federal Reserve Board has power to change the location
of 4 Federal reserve _
bank.
_
I find nothing in the opinion to indicate that the
Attorney General had this specific question under consideration.
As an incident of the right of the Board to abolish
one or more districts in order to reduce the number of
districts, he did consider the question whether the Board
could legally abolish a Federal reserve bank and reached
the definite conclusion that the Board did not have this
power.
Whether he would consider a. change in the nz.rrie nd
locution of a Federal reserve bank as equivalent tc the
abolition of such bank cannot be said to be covered by
his opinion.
It is true that under the Act of 1864 national banks
were not authorized to change their names or places of
business. This riLht was vested in such banks by the
Act of May 1, 1886, a copy of which is hereto attached.
It may be that by analogy the Attorney General might
re,ch the conclusion that in the absence of some such expressed authority in the Federal Reserve Act the name and
location of 4 Federal Reserve Bank cannot be changed. On
the other hand, he might distinguish between the two
cases and reach an opposite conclusion. For example, he
might hold that this right existed as an incidental power
in the Board to readjust districts.
As I understand it, you desire a memorandum on the
question of whether or not the Attorney General's opinion
covers this question -nd do not desire an opinion of this
office on the question of whether or not the Federal Reserve Board may change the designation of a Federal re'serve city.
Governor Hamlin.
110
12-10-15•
do not think the Board would be justified in makinE any ,nnouncement to the effect that the Attorney Ceneral has definitely ruled on this question, or that the
Board can act upon this assumption without having him
consider that specific question.
Very sincerely yours,
•
Honorable Charles S. Hamlin,
Governor.
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Federal Reserve Bank of St. Louis
Counsel.
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Federal Reserve Bank of St. Louis
ACT OF /JAY 1, 1886.
Sec. 2. Any national banking association may change
its name or the place where its operations of discount
and deposit are to be carried on, to any other place
within the same State, not more than thirty miles distant, with the approval of the Comptroller of the currenc
y,
by the vote of shareholders owning two-thirds of the stock
of such association. A duly authenticated notice of
the vote and of the new name or location selected shall
be sent to the office of the Comptroller of the Currency;
but no change of name or location shall be valid until
the Comptroller shall have issued his certificate of
approval of the same.
Sec. 3. All debts, liabilities, rights, provisions, and
powers of the association under its old name shall devolve
upon and inure to the association under its new name.
Sec. 4. Nothing in this act contained shall be so construed us in any manner to release any national banking
association under its old name or at its old location
from any liability, or affect any action or proceedi
ng in
law in which said association may be or become u party
interested.
/0
A.) o
frt; 141-144
'
•
•
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Federal Reserve Bank of St. Louis
*12-7-15.
IlaTRACTS FROM I.:DTUTES OF BOARD 1...L.271fINGS
REGARDING 13.12)1STRICTING
January 6, 1915, page 7,
"By previous appointment, the session was devoted entirely to the hearing of representatives of the cities of
Baltimore and Richmond with reference to the location of
the Federal reserve bank for the fifth district."
Jammu 12, 19151. page 27,
"On motion it was voted to obtain the opinion of counsel
with reference to the right CI* the Board to change the designation of Federal Reserve cities and also the extent and nature of its power of reviewing the action taken by the Organization Committee in this regard."
January 13, 1915, page 32,
"By previous arrangement the morning session was devoted
to a hearing of the appeal from the action of the Reserve
Bank Organization Committee in designating Cleveland as the
Attorneys representing
Reserve bank city of District No. 4.
appeared before the Board to present
Cleveland and Pittsburgh
their cases."
January 27, 1915, page 66,
"The session was devoted to a hearing of the application
for transfer of certain member banks in Wetzel and Tyler
Counties, Vic:it Virginia, from District No. 5 to District No.4."
February 10, 1915, pace 105,
"By previous appointment the meeting was devoted to a
hearing of the application of certain banks in District No. 11
to be transferred to District No. 10."
March 4, 1915,_
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Federal Reserve Bank of St. Louis
177,
-
"The subject of redistricting appeals was taken up for
discussion, and Er. Miller moved that Ex. Warburg and Er. Delano
constitute a committee to look into the New Jersey appeal;
Er. Miller and Er. Harding to look into the appeal affecting the
counties of Wetzel and Tyler (West Virginia); Mr. Delano and
Er. Miller to look into the Nebraska-qyoming cases; all to report
to the Board on redistricting in these cases as early as possible,
and preferably on Tuesday, March 9th.
•
--2--
March 4, 1915, _page 177 (Continued,)On motion it Was voted that the Governor proceed to the
preparation of a statement for presentation of the case relating to powers of the Board in redistricting, for transmission
to the Attorney General of the United States, asking an expression
of opinion as to the power of the Board regarding the review of
the work done by the Organization Committee, the readjustment
of boundaries and the redistricting of the country.
The Secretary was ordered to transmit to the Committees
dealing with the redistricting question, the stenographic testimony
taken in the hearings."
March 12, 1915, page 215,
"The Sedretary of the Board read a letter from the Secretary
of the Treasury, Er. McAdoo, stating his position with reference
to the appeal of the northern New Jersey banks for redistricting,
and also his position with reference to the rate of rediscount
between Federal reserve banks, with the request that the latter be
recorded in the minutes."
Larch 12, 1915,_pace 216,
"On motion, the question of appeals in the redistricting
matter was laid on the table until Saturday, larch 13th."
April 26 1915 page353,3
3
"On motion, the date of hearing of the application of the
Wisconsin banks for transfer from the ninth to the seven district,
was set for May 20th."
May 7, 1915, page 385,
"The Sedretary of the Board read several telegrams relative
to the questio.' of making a change in the redistricting decision
affecting the counties in the State of Oklahoma transferred by the
Board's recent decision from the Federal Reserve Bank of Dallas
to the Federal Reserve Bank of Kansas City.
After consideration
of the subject in its various aspects, the Board directed that the
correspondence be transmitted to Counsel with the request that he
suggest a reply, giving the proper legal status of the matter."
lay 20, 1915, page 695,
-
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Federal Reserve Bank of St. Louis
"The question of entering decrees in the redistricting cases
was taken up, and after discussion it 71313 voted that separate
decrees be entered, one for each petition, and that these decrees
be submitted to the Board for entry as soon as possible."
•
--3—
Liaz 26, 1915, pace 431,
"The Secretary of the Board presented decre
es relating to
the redistricting appeals in Vest Virgi
nia, New Jersey and
Oklahoma cases." (The decrees above refer
red to are copies in
full in the minutes, on pages 431 - 440)
Juno 11t_1915 pe 501,
-
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Federal Reserve Bank of St. Louis
"The Secretary of the Board was directed to spend
such time
as may be necessary during the summer in study
ing the subject of
districting, and in preparing data likely to be
of service in the
future for use in connection with questions of
redistricting.“
•
1 / /15.
26
=TRACTS FROM IIIITUTES OF BOAPD LIMTINGS
REGARDING RIZISTRICTING
************
On Larch 15, 1915, page 227 "The question of redistricting appeals was considered
and referred to a committee consisting of the Governor,
Vice Governor and Mr. Warburg, to prepare a statement or
report relating to the same, for presentation and action
at the meeting of Tuesday, Larch 16th."
Larch 16, 1915, page 232 "On motion the following resolution was adopted:
The Board being in receipt of a letter from the Secretary of the Treasury stating that he does not desire to
stand in the way of a decision on the subjects under review
in the matter of redistricting and, although believing that
these questions are pressing for settlement and should be
concluded, has determined that under the circumstances of
the Secretary's illness and the prospective absence of two
other members, that no vote on these questions be taken
before April 15th, but that they be disposed of by definite
action as soon thereafter as practicable."
Lpril 28, 1915, page 363,:
"A letter from Governor Hamlin, with reference to the
date for consideration of appeals in the redistricting
matter, was read to the Board and noted."
April 30, 1915, page 370 "The question of dealing with the ap2eals of redistricting
was taken up for discussion, and it was the consensus of the
Board, after passing on the minor appeals for redistricting,
to announce that general questions relating to the changes in
the designation of Federal reserve cities, would be deferred
until more experience has been accumulated through the operation
of the s:/stem.
ay. 3, 1915, TaLp 372 -
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Federal Reserve Bank of St. Louis
"In accordance with previous orders, reports of the
committee on appeals from the decisions of the Reserve Bank
Organization Committee, were ta1en up for consideration, and
-2 - -
Mr. Miller offered the following resolution:
:liaaE,As, The Board has received and considered the
reports of its committee on appeals from the action of the
Reserve Bank Organization Committee affecting the boundaries
of certain districts,
BE IT RESOLVED, That the recommendations of the said
committees be adopted and approved, and that the petitions
of the banks of southern Oklahoma, northern New Jersey,
Tyler and Wetzel Counties, West Virginia, be granted; and
BE IT ALSO RESOLVAD, That the petition of the banks of
Wyoming and Nebraska be denied; and
BE IT FURTHM RESOLVED, That action on other pending
petitions be deferred until further experience in the actual
operation of the several districts, especially in the light
of the new clearing system which is about to go into effect,
and of the extent to which State bankB take membership in the
Federal Reserve System, shall have provided the Board with
the necessary data for a conclusion, it being the opinion
of the Board that action on petitions relating to changes
in cities designated as the location of Federal Reserve Banks
should be deferred until the Board shall have reached a
conclusion from experience as to any further readjustments
in the boundaries of the several districts, or in the number
of districts which may be desirable in the operation and
development of the Federal Reserve System.
On motion the reports and resolution for the same were received, and, after discussion, it was voted that the subject be
laid on the table until the next meeting, at which time the
appeals from the decision of the Reserve Bank Organization
Committee could be voted on individually, and the Secretary
of the Board was directed to prepare a decree and accompanying
map relating to each case."
May 4, 1915, page 376,
-
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Federal Reserve Bank of St. Louis
"The resolution presented on Monday, May 3, by Mr. Miller
relative to the action to be taken regarding appeals from
decisions of the Reserve Bank Organization Committee, was taken
up for consideration in accordance with previous agreement,
and was unanimously adopted.
The Secretary of the Treasury,
who was unable to be present, was by request, recorded as voting
in favor of the resolution.
On motion it was voted that formal orders in each of the
redistricting cases embodying decisions of the Board, should
be prepared by the Secretary and Counsel and approved by the
Executive Committee, and that when so approved, they should
be entered in the minutes of this date.
On motion it was voted that the Executive Committee prepare
and give to the press a statement regarding the action of the
Board in these cases."
Lay 14t 1915
page 394 -
"After discussion of the status of the orders regarding
redi9tricting, it was voted that Mr. Harding be asked by telegraph to investigate and report the best action to be taken
relative to the two counties in Oklahoma whose status, under
the redistricting order, had not yet been settled.
The Secretary of the Board presented an opinion prepared
by Counsel relative to the position of banks in northern
row Jersey as to rediscounting during the time that the process
of transfering them is in progress.
On motion the opinion
was adopted, and it was ordered that a copy thereof be sent
to all districts affected b.y similar transfers, and that the
text thereof be nublished in the forthcoming issue of the
Bulletin."
June lit 1915, page 500 "Mr. Delano presented to the Board the outline of a plan
for effecting the transfer of member banks from one Federal
reserve district to another, Prepared by Counsel of the Board,
while the Secretary of the Board also presented a draft of a
plan which had been prepared by the New York and Philadelphia
reserve banks acting together, as had been requested by the
Beard some time ago."
October 19, 1915 -
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Federal Reserve Bank of St. Louis
"Yr. Delano called to the attention of the Board the
question of the best method for disposing of business now
pending before the Board, and suggested the desirability of
a review of such business for the purpose of determining what
disposition is to be made of pending applications for redistricting and other matters.
After discussion,it was on motion voted to refer the
question of redistricting tc a special committee, consisting of
Messrs. Delano, Harding and Warburg, the Secretary of the Board
to act as Secretary of the Committee.
(It was not suggested in the discussion that any other than
the pending petitions for redesignation and redistricting were
As a fact C.S.H. raised
to be considered by this Committee.
the point that the New Orleans and Connecticut petitions should
not be considered by the Committee as no hearing had been given
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Federal Reserve Bank of St. Louis
--4 -
by the Board upon them.
Mr. Delano, however, pointed out
that the Committee might recommend whether hearings should
or should not be given on these petitions, and the matter
was dropped.)
446.
FEDEhAL RESERVT: pOARD
;
VASHINGTON.
December 2, 1l5.
To the
Federal Reserve Board.
Your Coihmittee on Redistric
ting has received and not
ed the
copy of the opinion of the
Attorney General addressed to
The President
of tLe United States, under
date of November 22, 1915,
to the effect
that the Federal Reserve Boa
rd has not the power to abo
lish any one or•
more of the Federal Reserve
districts, or any one or
more of the Federal Reserve Banks located in th
cities dosignated by the Res
erve
Bank Orgaization Cormittee.
Your Cor..mittee feels that the
re has been a serious mis
understanding, not only of the substa
nce and purpose of its pre
liminary.ruport filed with the Board on November
13, 3.915, but also of the
motives
which prompted it. Therefore, before
making any further reeo.
...mendations,
your Committee is desirous of recoun
ting briefly the facts- whi
ch led to
its action and on which it based its rec
ommendations, with the
hope that
a better understanding of the facts
as they appeared to
yourCommittee
may promote a common point of view
and conduce to a
continuation of the
h4rinonious cooperation and mutual goo
d will thcct has in
the past char-
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Federal Reserve Bank of St. Louis
446
acterized the work of the Boar
d and stamped it with the approval of the
public at large.
On Yclrch 1, 1915, hr. Elliott filed
with the Board an opinion
doa1int7 %flith the general po,vcrs of the
Board to review th:. deterzination
of te Or,:aniztion Committee, to read
just the Federal Rcsrv.:.
,
to chang
the dosigntion of the Federal Rscrv.,
cities,
to reduce
the nuciber of districts formed by th.; Org
anition Co=ittce.
it is to be
noted, however, that, in this opinion,
th.) question of rducti- was re.n
ferred to very briefly, and Er.
Elliott later advised the Board that
the
considk..ration of this particuLr quec
Aion was L.,;n:ly incidental to the
main questions discus6ed in t';:at
opinion and that, should the question
of reduction b specifically cn,:f
.dered ty th,; Board, ho would apprecit
o
an opportunity of reconsiderin6
his earlizr opinion on that particul
ar
point.
In view of the doubts raised by 1:r. Elli
ott, the Board decided
to avail itself of the opportunity of
S.,nator Owen's appearance before
it
in thu hearing of tht appeal of certain
Oklahoma banht; requ.,:sting a
transfer from the Dallas to the Kansas City Dist
rict, to ask for his views
conc:2rning tho intent of Congress and the mean
ing of thc F,..dr 1 Rese
rve Act
relating to the powers of the Board on
this whole subject. The
request
for Senator Own's viewswas not accident
al, but intentionall
y contplated to instruct and guide the Boar
d in aisp
osing of pending appeals.
His answer was that Congress Leant to
"rive to the Board the
poet
of the Government itself
in
f.ealins
With
this
system!'
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Federal Reserve Bank of St. Louis
446.
and that hc ;houLht thu power
of the Board "would extend cven to the
IcoJor of rec.ucing the diutricts".
It is understood, of course, that
this statement by Senator
Owen was :1,orsly his own personal opin
ion ana that it was made at a time
when another thew-h closely rla
ted subject was undcr consi4cration,
but
it at least indicates that thi% v-s
no decided improz,sion in Senator
Owen's mind that this pov'er to reducc
was not given the Board.
The, Board subsequently p1ih
ii the June 1, 1915, Bulletin
a resolution, which was passed unan
imously on ::ay 4, 1915, when both
Governor Hamlin and Er. Willi...Ls
were present, providing, among other
things, as follows:
• "That action on other pending
petitions be deferred
until further experience in the actu
al operation of
the sever(.1 districts, especially in
the light of the
new clearing system which is about
to go into effect,
and of the extent to which State bank
s to.ke 'eembership
in the Federal Reserve System, shall lay:
rroviaod the
Board with the necessary data for a conc
lusion, it boing the opinion of the Board that acti
on e
stitiono
relating to changes in cities dcs4;n_ted
Ls the location of Federal Feoserve banks ehoula Le
c.fcrrec until
the Board shall have re:.ched a conclusi
on fro experience as t any further readjustments
in the boundarls
of the several districts, prnuu.be
r of
tricts,
.
which ayb__eirab1;intort
ionnd uevelopl:lent
of the Federal Reserye_lystem.." (The
italics are ours)
Your ComsAttee is positive that
no objoction vae raised at
that time by any member of the Boar
d or by any 1embor of CcnE
rese,
indicating dissent from the prop
osition that the Eoard had
the right to
reduce
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Federal Reserve Bank of St. Louis
/ 11111111 1111111111111111111111111..........,
111 :
146
the nuu:cer oi districts
.
Indeed, such an argument was never raised in
the brifs of counsel on
the various appeals heard by the Doard.
On October 19, 1915, the
following vote was passed, "to refer
the ouestion of redistricting
to a special Cocrittee consistin
DUiciO, Mr. HardirJ; and
Mr. Warburg".
of Mr.
Counsel for the 3oard -der
soon thereafter rovosted to
prepare opinions as to the lesal right of
thc Board to reduce ta number
of districts. Mr. Cotton iiled his for
ral
opinion on Novelar 22, 1915,
otating unqualifiedly that the Federa
l Reoeirv &ard is fully a).th
.
c:ze iv the .Lct to redl:tce the n-orrbe
r of districts.
who, in aocordrc,
3
c-Jr_ request,
reconsidorin him earlier owl
nicn cf Ilzrch 1, 7115, filed his opin
ion
with the Governor .cr. rove
ulber 23, 1911, ar. on 'Ioveu-ber 22, 191
5, the
Attorney General delivere
d his opinion addressed to The Presid
ent.
It
-,- "cc note4,th9refore, that at
the time of raking its
preliminary ro:icrt on 1:oveb
er 13, 1915, your corrrcittee did not believe eiti.er that member
cf Cenress
take tha position that the
Board was v4ithout power
to reduoe the nUrcer of districts or
that nembers of the Board would,
in vie; of the unani:wus re.00lution
above quoted
take that vie:: unli_;as iorc
ed to adcot i. by tb conc1usi7e
opinion of
Counsel.
Your cor:ittee began its wor
k by elaborating, a re-port zubrr
ol.ttin6 definite alternati
ve plans, but finally conclude
d that it would be
preferable to ask :;na Dca
first to pass upon the que
stion of policy and
the principle involved.
comudttee had, howevor,
reached a conviction
that the country would be
bettor served by a roclolct
ion in the number of
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Federal Reserve Bank of St. Louis
446
- 5 districts to eight or nin
e.
The reasons on which this conviction was
based seer::ed to convincin
g exd conclusive to the committee that it
liol;ed the Eoard
aciept unanimously the recommendation dhiCh it
outU.lad. The committee is
:
desirous of emphasizing in the strongest terms
its absolute confienco,
not
in the unerlying principles of the
Federal aeserve Act, but
also in t'::e machinery provided for develo
ping
such principles into a eys
tem which has already brought immeasurable
benefits to this c=ntry and
which; —heher with twelve tanks or eight,
will prove of inestimab
le value. That the number of banks and dis
tricts
originally created was larger
than is con:.ucive, in the opinion of you
r
committee, to the most effici
ent operation of the syste77 and to the
greatest safety of the countr
y is not nc fault of the Act, but is
due
to the fact that the ,rgani
zation C,omvittee, which, though acting
in the
best of faith, could not,
short tiro allctted to it, acquir
e such
knowledge ancl.experience. as is absolutel
y necessary to a final determina
tion of such an - irtClitln-t-tucsti
on.
The Attorney 2eneral has sin
ce danici the right of the Poa
ra
to reduce the number of dis 4 1-icts
;
d.otermine bj the Oranization
Committee,
and in vie' of that your committee
is not desirous of naking an,
; further
recomrendations at this time. It
wishes, however, tc emphas
ize the fact
that at the time of filing its
preliminary report, no clou
bt existed in its
mind as to the Jisdom of reclucin
the number of districts
in the near future, but also tls.c right of the
ecard to make such a
reduction.
7our comrittoe io reey to
submit an .abstract of
the arguaents
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Federal Reserve Bank of St. Louis
446
- 6 that were prepared by it when
it suppcsed that the subject was to be discussed on it
mclrits, and it
is
of the opinion still that these arguments
will assert themselves sooner or later
, and that the country
not
reet satisfied until the Federal Reserve Syste
m shall have been developed
to render its maxi=um possible efficiency.
Furthermore, your committee
feels that, if the adjuetrent is not rade at thie time,
it is more than
likely to lee made at some future time, but wit:: far greater
difficulty
and disturbance.
In reviewing the evidence lefore. the Organization Committee
it
was noted that, of the eighty-four -vitnesses, only
nine recommended the
formation of twelve districts;
a large majority favoring not to exceed
nine districts.
Your committee concluded, as a result of its study of the question, that the greatest protection from future disturbance was
the immediate
astem enjoying its maxim7.1m degree of usefulness
and service.
The(: ltr: -ould not permit any cubsequent interfe,nce
with a machinery once perfected, - vlir.reas, .icakneeeec, such
as those which
seemed to your committee to exit new, off:: a constant targe
t for critics.
For those reasons, not to mention the many practical
advantages incident
to carrying out, prior to January 1, 1916, any changes that
might have
been docizled upon by the Board, ycur committee was
sincerely anxious to
secure prompt discussion and full consideration of its
recommendations.
As the chairman of th.:; committoe.repeatedly
stated, the desire
for -immediate consideration of the question was not
prompted by any intan-
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Federal Reserve Bank of St. Louis
446
,
);
(:)11 th.z: part of your ocm'
.
LlY
tr,., forc
tb
cird to takc any un-
considcrcd action, and the
fact t'..,at th,, request of two member
s of the
Board for anoth.:r prclir
dnary rort in writing ae to the rea
sons for
its recomn3ndation3 wa3 oppo.
J.:;1
the conrittea was, as
sxrlained by
tb....3 committee, .0131y beca
uc,a it desirei to have the report
diccuesed
without delay
on itc mcrits/and at that tir
o lay before the 72:c-1rd all the fac
ts and
figures it liv:d collected. Suc
h
course ':ias in consonanc with
our usual
practice .
The committee had postponed
filing.its reort on acco=t 'of
Socrtary McAdoo's ab3cnce
in the west, :nd later wait(:d unt
il Mr. yard ins had called on him at his :',O
U30 to 3.2riz
..Jhir informally of the views
of the ccmmittee arid ecevre any
$uzEestions hic]i he might 333 fit
to
make. The Secretary, however,
of his cNn
and later )y illness ia hie fa:Lily,
to
t:.... ratter with 1.r.
and the conmittee then filed its rep
ort on Suturday, November 13,
1915, fixinz
fella:ring Monday for di3cussion
by the full Board, the
Secretary of the Treasury having
statecl to members that he wou
ld be enaged on hie report to Coagress
until the 15th, which the
committee aumed would leave him free after tha
t date. Hovever, ccn
sider7tion uf
the report was .
.?ostponod until Mone.F.y, :J. . .71:ed
-,c.
r 2;2, 1915, 1:3, aus.:
,
, of thQ
inability of the Secretary of t",-_e Tr
.-7ry to
1:.1. ent until that
At the meeting cf rovorber
th.; e;inior, of the Att
orney General, already referred to, VVE.13 pre
eented;
the letters of two
Thited
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Federal Reserve Bank of St. Louis
443
8
State Senators.
v.
Ycur Cormittee aired to repeat that at no tire
has. there been a discussi
on of th.: Commdttoe, original report of
c
November 13th or of the revi
sed report of November 17n.
The Com-
mittea taerolo:.0 reErets tat
before it had the opportunity which
it dezirea to zake an ox%11 ::re
sentation of facto and arguments,
\and various clta, in it
peso
son, the Attorney General's opinion
was sought witout it9
Your comittee believes that it .iould have been fair
er to
The President, to the Attorney General,
and to the Federal Reserve
System, if the case . .
11F.i bon submitted to the Attorney General witi
c. full presentation of argument
s on both
idc
of the ciuestion.
If
the Attorney Generat for exam
ple, had unerstood that no closing of
banking officoeas contaratcd but
tht in ave,:y city where a Reserve
Bank was abandoncf, a brnc.:1
, rould be establishe, he would Lot
:
have been isd 7- believe that the Couvdtte
,o
e's recommendation "would
profoundly affect
business throunci.lt vz
.
.
cu:r::nts of trA.e
alter the whole fast of
sections of the country," eto.
If your comittee was right in its conclusions
as to the advisability of a smaller numl)sr (if district
s, - ho permanency which the
Attorney Generz.1 z:la every one of uc
eoires for the fut17.re of th9
system would have been icet soov.
rea by prom2t ana courageous acti
on
now.
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Federal Reserve Bank of St. Louis
9
Your CoiL.mittec, however, fully appreciate
s the authority of
the Lttorney Gcneral's orinion
and, : ub,:sitting to the conclusions
,
reached throin rends th(A tho Boar:1
abandon, at least for the
presnt any plan of redistricting whic'n involveo
the con:,olidation of
aay districts and that the Board now
a&...roJo
tsoli to the srecifit; aT-
peals pending and to such readjust-e
nts as r.ay bo pcmuissiblo and practicabl3 undcx the i.ttorn..y Genoral's opini
on.
There aro now r,endihg b,:forc the Board for disposal five
apl=lications,
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Federal Reserve Bank of St. Louis
. First:
The al_Ilication of e(.rtin illerabor banks located
in Western Conncticut requesting that the territory in which tny are locatod be transferred froni
the First to the Second Federal Reserve District.
The Cor.I.dt- , e resr.ctfully rcormends that a date
be fixod for th.: herin
of oral arr,uments before
the Board rclativu to this appal;
Second:
application of crtain member banks located
in Tisconsin ru_.ating that the terriy i
.
;idch
thoy arc located be tr&nsfcrred fror, the Ninth
to
the Seventh Federal Reserve District.
The Cotteo
r,upectfully r-cornds that the Board
s‘:..nd a lcAter
ballot to .12. Llember banks of thc 1:inn
ai:olis District involvcd in this appeal, reque
sting th
they
rely 1.
.roLtrtly to
the
Federal
RGscrve
446
-10Board, stating whether th..); wish to be transferred to the Seventh or to remain in the Ninth
District, and stating also whether they feel
that their interests are being harmed by re=ining in the Ninth District;
Third:
The application of certain member banks located
in Louisiana requesting that the territory in which
they are located bc) transferred from the 'Eleventh
to the Sixth Di3trict.
The committee respect-
fully recommends that, unless the Federal Reserve Dank of Dallas desires to be heard in
the matter, the cas-, of the Louisiana banks be
decided upon -Oa.; facts haa in the possession of
the Board without any further hearing, but if Da14
las desires to be heard that a date for the hearing be promptly fixed.
Fourth: The application of member banks located
in
and
Fifth Pittsburgh and Baltimore requesting
that those
cities be designated as Federal Reserve
Cities in
place of Cleveland and Richmond, respe
ctively o
Your committee wishes to call
the Board's attention to the
opinion of Ir. Elliott, dated
March 1, 1915, which, in answer
to the
question "Cat the Federal Reser
ve Board, under the terms of the
Federal Reserve Act, designate
other Federal Reserve Cities
in place of
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Federal Reserve Bank of St. Louis
446.
- n
thosr, soloct d by the Oranization Con-Lmitt.:.o?", held th..A the Board
,
has no legal power to chanlLe the designation of a Federal ReserV.: City
unless such change is nec, .ssary in order to accommodate the convenience
.
and customary course of business in a rcadjustod district.
Elliott,
in disposing of this point, stated:
"If, therefore, the Board conclude that the districts
are not apportioned according to the purpose and intent of -the Act and determines that it is necessary
to readjust such district; it vvould seem cloar that
it possesses an implied povor to change the designation of the Federal reserve cities. If, however,
the districts are not rcadjust,.d, it seems very doubtful unether this power can be implied, and to change
the designation of cities without readjusting the
districts would necessitate resolving this doubt in
favor of
._;(creise of this power against the apparent in-Lnt of Congress. "
On the strength of t'nis opinion of its Counsel; the Board
might woll-be justified in undertaking such changes in the designation of Federal Reserve Cities as nay be necessarily incident to
the readjustment of the districts in which they are located.
the other hand,
because
in view of t1- , gr.„at i2dioortanc... of
.
of the doubt expressed by hr. Elliott,
of the uncertcAnty in the minds of t:ie committee.;
and
this
the
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Federal Reserve Bank of St. Louis
°Hoot
of
particular
Board
the
thL
opinion
point,
it
suggestion
of te
sub_its
that -Lti
Attorney
for
subject, and
and also b causc:
as to the inttInt
Gr..nral
on
consideration
GovL.rnor
On
bein-
of
446
-12structtyl to aildres a lcttsr to TAG President, akkina him kindly to
request th.:. Attorney General to give his opinion on thc folloing
(1)
Can the Federal Reserve Board legally change the present lo-
cation of any Federal Rescrvc Bank?
(a)
In the case where there has boen no alteration in
the district lines? and
(b)
In the case where there has been such a raadjustment of
district linos as in the opinion of the Board necossitates the designation of a now Federal Fecerve City in
order that the convenience and custurary course of business may be accorrodated as required by law?
(2) Iltst te Board, in exercising its admitted poer to readjust,
preserve the $4,000,000 minimum capitalizc..tion of each and every
Federal Reserve Bank.
Your committee finds itself unable to make any spccific rocommandation relating to the changes in the designatien of the cities
of Cleveland and Richmond as Federal Reserve Cities in the Fourth
and Fifth Districts, respectively, but it feels that any attempt
to determine those questions should be deferred until the Board•
is advised finally and definitely, not merely of its po4er to
'Az AeGignation of a city, but also, first, whether the power
to make such a. change is dependent upon further readjustments in
the
district lines, and, c;ocond, whethr, if it is dependent upon such
readjustments, the It4,3CI.,C.00 capital licf.it must be preserved in
making such changes in the district linos.
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Federal Reserve Bank of St. Louis
6
•
446
-LiYour corrdttoo also fls that if tiF,: 1-.. ter is put up to
t.
.
tho Atternoy Gcnoral, ho ohould be advi:lod that, while there Lre dis,scnt i,dju.;.wtr.t of ?,.istricts which do not
.
tinct fe:„..tu:sz.; in ..1T,o prc
tbor,/;e1!os to t,)-;
,
con.4sd
bst. jucint GI ti;:% cor.mitt, and do it ln
its opinien ccml': strictly 4ith the injl:nction tl:,Lt duo r.:ari mkt
-,
he had to ths c:inv,nience and cu:)tomary course of businese, we recognize tho aifidculty of 7',j.j.,v:stil:g th3sc vatti:rs so long as the Bcard.
is bound to preserve taolve districts, and at the slire time rmintain
for cach bank a capital large enough to covrand sufficient prestige
and confilam3.
In ..ic ol.inion tla
( ,
.
:11::oynoy Gc;r1:al formulata the cLuory,
Would the 1:c- roi to roadjust ditrict, il:ich is
'..von th3 Loard,
xprsly conferrod
, nullified or 1-en.lorc.1 iDoto nt if ti:; pov:or to
-
abolin dis:icts a7. bc.nks iT., withhc10.7'i
4
to this is that tho rulinP :if
YolAr co-Littools res7;on.;e
Attormy
en-:al, as a practical
matter, nullifies the Board's powei to roajust the districts inasLfach as such readjustment of moco:ity mast be mc_dc xit:a a view to
preserving an adequate capitalization for each bank, several of
.
..Inch are no
rnitt,3
close to the limit prescribed for
and of s2::edier t:iv: thai. ii conducive, in th:: opinion of your
committee, to th3 'oczt :..11., .
— .-
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Federal Reserve Bank of St. Louis
he Organization Oor:.-
to of th:.: system
Resl:GctfuI1- znr.1::ted:
:
4
Committee
F. A. !kANO
P. .:'. 74ARBLRG
1'. CI. HOXINC-
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Federal Reserve Bank of St. Louis
O
flovember 29, 1915.
1:ly dear dr. President:
I have your note of November 24th, stating
that you will with pleasure sugest to the Attorney
General that his opinion on the subject of the powers
of the Pectoral Reserve Board, ho not published for the
Present.
After writing you this letter I found that
in some my the New York
un had obtained some in-
formation as to it, and much mis-information, which
it proceeded to nublish.
It was thought better,
therefore, by the Board, that the whole opinion
should be published, and we accordinL;ly notified the
Attorney jeneral to this effect.
ilalieve me,
Very sincerely yours,
2rovernor.
The President,
The white
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Federal Reserve Bank of St. Louis
FEDERAL RESERVE BOARD
November 27th, 1915.
dear Govz!I'Lur:am handing you memorandum(
I
prepared by Mr. Dulany showing collection
of definitions of the terms "designate" and
"determine".
I have asked him to look
through the cases to which he refers on
page two and to give me a memo of the interpretation given this language as used in
the statutes.
Very sincerely,
:on. Charles S. Houdin, .
overnor.
o
•
THE WHITE HOUSE
WASHINGrON
November 24, 1S15
My dear Mr. Bamlin:
Thank you for your letter of November
second.
I shall take pleasure in sugEestinE to
the Attorney General that his opinion on the sUbject of the powers of the Federal Reserve Board
to reduce the existing number of Federal Reserve
districts should not be published for the present.
Cordially and sincerely yours,
Hon. Charles S. Hamlin,
Federal Reserve Board.
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Federal Reserve Bank of St. Louis
•
11-23-15.
MEMORANDUM FOR JUDGE ELLIOTT.
DEFINITION OF 'WORDS "DETERMINE" AND "DESIGNATE.”
"Designate" is defined by the New Standard Dictionary,
as follows:
(1) To cause to be known or to make recognizable by some
murk or sign, as by a particular name.
(2) To mention by a distinctive name, identify by name.
(3) To mark out or name for a specific purpose.
Webster's Dictionary defines the word "designate" to be:
(1) To murk out and make known; to point out; to show.
(2) To call by a distinctive title.
(3) To set apart for a purpose cr duty.
A collection of the definitions of the word "designate"
is collected from Volume 2 of Words and Phrases, page 17.
Among the definitions given there are the following:
The word "designate" means to point out or specify.
State v. Noah, 20 N. D. 281.
124 N. W. 1121, 1126.
The word "designate' means to mark out and make known;
,
to point out; to name; to indicate; to show; to distinguish by mark or description; specify; to call by a distinctive title; to indicate or set apart for a purpose
or duty. State ex rel Rocky Mountain Telephone Co. V.
City of Red Lodge, 33 Mont. 345; 83 Pacific 642.
The word "designate" is defined by the Standard Dictionary
to mean•
To mention by a distinctive name; identify by name.
By Webster: To point out; to name.
Eng. Enc. of Law, 405,
By 9 Am.
to designate, as to point out, or to mark by some 7arAs
ticular token; to show or point out; to indicate by
description, or by someting known or determinate.
St. Louis Police Relief Association v. Tierney, 116
Missouri Appeals 447, 91 S. W. 968.
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Federal Reserve Bank of St. Louis
The word "designate" means to mark out and make known; to
point out; to name; to show. Blackburn v. Welsh, 138
Ky..267; 127 S. W. 991, 992.
•
•
The word "determine" is defined by the New Standard
Dictionary as follows:
(1) To reach a definite purpose concerning; decide.
(2) To fix or give definite form to.
(6) To fix the bounds or limits of, as God determines the
course of history.
"Determine" iF defined by Webster's dictionary to be:
(1) To fix the boundaries of; to murk off and separate.
(3) To fix the form or character of.
(5) To ascertain definitely; to assign to its true place in
a system.
A collection of the definitions of the word "determine"
may be found in volume 2 of Words and Phrases, page
24, but
in all those cases cited the word "determine" is given
some
special meaning as used in a particular statute, and
the definitions lo not appear to be pertinent.
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Federal Reserve Bank of St. Louis
At-i--‘47,21r4-
C.e2t „ti
4
4i)
•
•
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
. .-- umgmgwroewsmmmvarmo===r nXnra"" . '
7
FEDERAL RESERVE BOARD
WASHINGTON
November 22nd, 1915.
M.C.ELLIOTT
COUNSEL
dear Governor:-
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Federal Reserve Bank of St. Louis
/
i
On March 1st, 1915,/this office filed with the
•
..
Board an opinion dealing generally with the subject of
the riht of the Federal Reserve :card to review the de-
termination of the Organization Committee, to adjust
from time to time the Federal reserve districts created
by that Committee, and to establish new districts.
In
that opinion the question was incidentally considered
whether or not the Federal Reserve Board, under its power
to review, or under its power to readjust the districts
created, could legally reduce the number of districts by
consolidation or otherwise.
The :oard has requested that this subject be
further considered but it is understood that it desires
at this time to have counsel reconsider only that part
of the opinion of T:.arch 1, 1915, wIlich deals with the
followik, question:
"Can the Federal Reserve Board, by the consolidation of two or more districts, reduce the number
of Federal reserve districts?"
The powers of the Board relating to the modification of Federal reserve districts are contained in Section 2 of the Federal Reserve Act.
in part as follows:
This section provides
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Federal Reserve Bank of St. Louis
-2
"As soon as practicable, the Secretary of the
Treasury, the Secretary of Agriculture and the Comptroller of the Currency, acting as 'The Reserve 2ank
Organization Committee', shall designate not lass
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 determinatei9n of said
.
.
organization committee shall not be subject to review
except by the Federal Reserve Marc' when organized;
PROVIDED, That the districts shall be apportioned
with due regard to the convenience and customary
course of bueiness and shall not necessarily be coterminous with any State or States.
The districts
thus created may be readjusted and new districts may
from time to time be created by the Federal Reserve
Board, not to exceed twelve in all. Such districts
shall be known as Federal reserve districts and may
be desiFnated by number.
A majority of the organization committee shall constitute a quorum with
authority to act".
It will be observed that the organization committee is empowered (a)
To clulai
not less than eight nor more than
. twelve cities to be known as Federal reserve
cities.
(b)
To divide the continental United States
into districts, each district to contain only
one of such Federal reserve cities.
Section 2 further provides that
"Said organization committee shall be authorized
to employ counsel and expert aid, to take testimony,
to send for persons and papers, to a:minister oaths,
and to make such investigation as may be deemed necessary by the said committee in determininr the reserve
districts and in designating the cities within such
districts where such Federal reserve banks shall be
severally located.
The said committee shall supervise the organization in each of the cities designated
of a Federal reserve bank, which shall include in its
title the name of the city in which it is situated, as
'Federal Reserve Bank of Chicago'"
The Federal Reserve Board is authorized (a) To review the determination of the organization
committee,
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Federal Reserve Bank of St. Louis
(b)
To readjust the districts created, and
(c)
To create from time to time new districts, not
to exceed twelve in all.
Whatever power the Board has in the matter of re-
districting the continental United states must, therefore,
rest upon the interpretation to be given to the language "The determination of said organization committee shall not bc subject to review except by
the Federal Reserve Board
The dietricto thus
created may be readjusted and new districts may
from time to time be created by the Federal Reserve Board not to exceed twelve in all".
The question under consideration is - can this
language be reasonably construed to give the Board power
to reduce the number of Federal reserve districts and to
liquidate or dissolve one or more of the Federal reserve
•
banks organized by the organization committee?
If we consider the language above quoted without
reference to any other part of the Act and attempt merely
to give the usual or ordinary meaning to the words used it
becomes immediately obvious that at least two different
interpretations are poezible and it is, therefore, not free
from ambiguity.
It is accordingly necessary to consider
both possible interpretatione in order to determine which
one is consistent with other parts of the Act and is in accord with the intent of Congress.
On the one hand it may be argued that the power
vested in the Board to "readjust the districts created"
gives the Board the power not merely to change the lines
of each and every district (preserving, hovever, the entity
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Federal Reserve Bank of St. Louis
•
of each individual district) but that it may in its discretion consider the whole subject de novo and may divide the
continental United States into an entirely new sat of districts.
This interpretation is based upon the assumption
that when Congress provided that "the districts thus created may be readjusted" it meant that the composite whole
be readjusted and not merely that each individual district was subject to change.
If this be true, the certifi-
cate showing the Federal reserve cities and the geographical
limits of each Federal reserve district whic., the organization committee is required to file with the Comptroller may
•••••
•-•
be modified at any time by the Federal Reserve 2oard in any
way that it deems necessary or advisable.
In this vier, it may be contended that the language which follows, namely, "and new districts may from
time to time be created by the Federal Reserve Board, not
to exceed twelve in all", was not intended to mean that
•
,•
,
additional districts may be created but merely thatulstricts with new lines and new territorial extent may be
V
created without reference to the entity of those districts
created by the organization comLittee.
Construing this general language to mean that the
Board has an expressed power to alter at will the entire
plan of districts created by the organization committee,
it may then be argued that this expressed power carries with
it such 1ailalai...21azp as may be necessary to carry out
..
the intent of Congress in the matter,
That is to say,
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Federal Reserve Bank of St. Louis
•
-5-
if it becomes necessary as an incident of an; readjustment made by the Board to change or cancel the designation of a Federal reserve city or to dissolve or liquidate a Federal reserve bank, the Board has an implied
power to do these things us incidents of the expressed
power to readjust the districts.
141.a.Mil,
If, therefore, this interpretation can be
sus—
tained under the usual rules of construction of statutes
uhe ,
juestion submitted - has the Board the power to reduce the number of Federal reserve districts, may be
answered in the affirmative.
Before applying the usual rulec of construction
to this interpretation ( Thich, for convenience, will be
referred to us interpret tion No. 1,) attention is called
to an alternative interpretation which is equally possible
when the language in question is considered without reference to other parts of the Act.
Under this second interpretation it may be argued that the power to readjust the districts created
vests in the Board the power only to readjust or to change
the lines of each district created by the organization
committee.
That the power to create nt4 districts not to
,
7
exceed twelve in all was intended to give the Board the
right to increase the number of districts if the organization committee had created less than twelve. that Congress
did not intend that the districts created by the Organiza-
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Federal Reserve Bank of St. Louis
-6-
tion committee should have merely a temporary
or experimental status as districts but while subject
to modification as to size and shape were nevertheless
intended to
have
permanent status as entities.
If this view can be supported by the applica-
tion of the usual rules of construction the question under
consideration - whether the Federal Reserve Board may
reduce the number of districts - may be answered in
the negative.
IL will be observed that to make effective
the
power vested in the Board under interpreta
tion N. 1, it
is necessary to imply that it has power as
an incident of
"rez,djustment" to change or cancel the desig
nation of Federal reserve cities and to liquidate Federal
reserve banks.
••••
It is, therefore, necessary to consider whether
these implied or incidental powers are in conflict with any
ex......000.0010.100101.1110110100
pressed provisions of the Act.
Upon an examination of the statute we find that
the organization committee is expressly authorized to designate not less than eight nor more than twelve Federal
reserve cities. Let us assume that the power in the Board
to create new districts is equivalent to an expressed
power to designate Federal reserve cities.
In support of this assumption the Act provides
that "the districts thus created may be readjusted
" and
when we turn to the context to learn how the distr
icts
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Federal Reserve Bank of St. Louis
were "thus created" we find that the or3dnization
committee is required to first designate a Federal
reserve
city and then to define. thp_LgozFaphicals
of the
district to be served.
It is, therefore, clearly neces-
sary in order to create a district to designate a
city
and to define the limits of the district.
Accordingly if the power in the Board to create
nev district '3 is construed to mean to create additional
districts or districts other than those previously
created by the organization committee, it is clear
that the
Board has an expressed power to designate Federa
l reserve
cities for such districts and that this power
to designate cities in those districts created by the
Board does
e
.7, 0.411 1 saw.,
4
,
,
not conflict with the power of the committee
to designate
cities in districts which it has created.
,
On the other hand, if we construe this power
to mean that the Federal Reserve Board may create new
dietricts out of two or more districts created by the organization committee, we must assume that the Board has the
power to nullify the designation of Federal reserve cities
made by the committee.
It is significant in this connection that in defining the power of the Board to create new distri
cts the
Board is limited to a maximum number of twelve
but is not
limited to any minimum.
a
•
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The organization committee is required to
ate in the manner above shown not less than eight nor
more than twelve Federal reserve districts.
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Federal Reserve Bank of St. Louis
-8Under the power vested in the Board "new districts
may be creErted from time to time not to exceed twelve in all".
Tf, therefore, this poter to create new districts is to be
interpreted as giving the Board the right to reduce and to
eliminate there would seem to be no limitation on the Board's
power to reduce and it might create a number less than eight.
..1••••••••••••=....M•1•••••••*
.,.
It is hardly reasonable to say that the power to create new
districts gives the Board the power to create such districts
without reference to the action of the organization com.ittee
since in this event they might abolish all but one or two
On the other hand, the fact that a maximum is placed
on the new districts to be created by the roard but no minimum
is expressed in the provision which deals with ti -s power of
the Board, indicates very strongly that Congress intended
the
number of districts created by the organization committee to
have a fixed and permanent status and to constitute the minimum
number to be established.
That it merely intended to give the
7oard the power to increase the number to the maximum.
This
view appears to be sustained by the history of this legislation
.;:-1.1e1.1 will be dealt with later.
Considering the second i5lied Rower under interpre,tation 7o. 1, we are here confronted with a. conflict with an
expressed rower which is even more clear.
As above shown, if we assume that the Board may make
an entirely new map of the districts and may reduce the number,
we must assume that it has, as an incidental power, the right
to liquidate one or more Federal reserve banks.
Upon referring
to section 4, however, we find that when
the necessary formalities have been compliod with
and a certificate of organization
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Federal Reserve Bank of St. Louis
7
9 -
has been filed each bank becomes a corporation with certain
specified powers, including the power "To have succession for a period of t:enty
years fron its organization unless it is sooner
dissolved by an Act of Congress, or unless its
franchise becomes forfeited by some violation of law".
To adopt intororetation 7o. 1
therefore
we
must assume that the imlied tower in the Eoard to
date these banks as an incident of readjustiLent is sufficient to overcome this extressed power in the bank to
have succession for a period of ti:;enty years "unless sooner
dissolved by an Act of Congress, or unless its franchise is
forfeited by some violation of law".
atch
an
assumption
is clearly contrary to the establiehed rules of construction
laid down by our courts.
Rouse, Hazard
For example, in the case of In re
Co., 91 Fed. flop. 100, the court in quoting
with approval the decision in the case of State v. Inhabitants of Trenton
38 7. J., Law 67, says:
"The legislature must be presumed to have intended
what it euresoly stated, rather than that which might
be inferred from the use of general terms".
It may be said to be a cardinal rule of construction that when two interpretations arc possible, one of
which is in harmony with other provisions of the Act and
the other repugnant to other provisions, that which
harmony must be adopted.
is in
Inasmuch, .L,
therefore, as internre-
tation 7o. 1 involves the necessity of vesting implied or
incidental powers in the Ecard which are repugnant to other
exp ressed provisions in the Act
while interpretation 7o. 2
is in harmony with these provisions, the second interprets.-
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Federal Reserve Bank of St. Louis
tion should be adopted.
7hi1 e this rule is so uniform it needs little
citation of authority to sustain it, the language of the
court used in a fevv cases in which this question arose
is called to the 2oard's attention,
In the case of 2.,ontclair v. namsdell. 107 T.
152, the court said:
"It is the duty of the court to give effect,
if possible, to every clause and word of a statute,
avoiding, ii it may be, any construction which implies that the legislature was ignorant of the
meaning of the language it employed".
Followinte, this decision of the Supreme Court of
the United States, it i, of course, necessary to give
effect to the provision which gives banks a period of
twenty years succession as well as to other provisions
which are inconsistent with interpretation :To. 1.
Again in the case of United States v. Paltimore
OSWBCo. 159 Fed. Rep., 37, the court says "The maxims and rules adopted for the purpose
of interpreting the meaning of a statute require
that we attend to all its provisions, and, if possible, attribute to the language in 7hich each is
expressed a meaning which will pemit other provisions to have their due effect".
In the case of Pate Refricrerating Co. v. Sulzberger,
157, U. S., 37, the court says:
"There the language of the act is explicit, this
court has said, there is groat danger in departing from
the words used, to give an effect to the law which may
be supposed to have been designed by the legislature.
It is not for the court to say, there the language of the
statute is clear, that it shall be so construed as to embrace cases, because no -rood reason can be assigned why
thgl,yeye oxcided
ita_nmyisnp. Scott v. Eeid,
10 Pet. 524, 527".
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Federal Reserve Bank of St. Louis
-11 —
Applying this doctrine to the present case, if
it is clear under interpretation No. 2 that the Toard may
modify the districts but cannot reduce the number, it
would seem to be inconsistent with the rules of construction to extend this power to include the right to reduce
the number if such a construction is inconsistent tith
other parts of the Act.
As said in the case of In re
Matthews, 109 Fed. Ben,, 615,
"It is the cardinal rule of interpretation that
statute should be construed not only so that every
a
part of it should stand, but so as to give force,
meaning, and effect to ever-, tart of it".
In United v. Jackson, 143 Fed. Rep, 785, the
court said "Another canon of construction is that every
part of a statute must be viewed in connection with
the whole, so as to make all the parts harsionious,
if practicable, and to give a sensible and intelligible effect to each; nor should it ever be presumed that the Legislature meant that any part of a
statute should be without meaning or without force
and effect".
Many other caseito the same effect might be
cited but in view of the unifomity of decisions on this
subject this is considered unnecessary.
Inasmuch, therefore, as it will be necessary to
fail to give effect to other provisions of the Act if interpretation No. 1 is adopted, it remains only to be considered whether interpretation No. 2 is consistent with
•
the context and with other parts of the Act.
From an examination of the hearings held by the
}louse and Senate Committees while the bill was pending,
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Federal Reserve Bank of St. Louis
•
it will be found that the question of the number of districts to be established was the subject of much discussion and of deliberate consideration.
There were many
who advocated a very small number of banks and others who
contended for a large number.
It was finally determined
•
roormov•
to fix a maximum and a minimum and to yest the power in
a committee to be known as the Organization Committee, to
establish not less than eight nor more than twelve districts with the power in the Feder-1 Reserve Board to create new districts not to exceed th'elve in all.
The House bill provided that the organization cornmittee should designate "from among the reserve and
,
tr,.-.1 reserve cities" a number of Federal reserve cities,
the total number so designated not to be less than twelve
The House bill further 'provided that "The districts thus created may be readjusted and new districts may from time to time
be created by the Federal Reserve Board herez
inafter established, actirlg, upon a joint akplication made hy. not less than ten member
banks desiring to be or7anized into a new
district."
, c.
/A ' 'ZtfiZZL".".
c-171
Later in the same Section the bill provided that "No Federal reserve district shall be
abolished nor the location of a Federal ,rsmatjawils_911Q40, except upon the application of three-fourths of the member banks."
From this it appears that according to the House
bill the Federal Reserve Board might alter the limits
of any given district,
on the apclication of ten mem-
ber banks, or it might abolish a district and change the
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Federal Reserve Bank of St. Louis
-13-
location of a Federal reserve bank upon the application
of three-fourths of the member banks in such district.
When the bill reachea the Senate it modified
the power vested in the Board to alter the lines of a given
district by striking out the provision that such alteration should be made only upon the application of ten
member bunks.
ate
Was
The effect of this amendment in the Sen-
clearly to vest in the Board the power to alter
the lines of a given district on its own motion.
The power, however, to abolish districts and
..."*••••.•
to change the location of Federal reserve banks upon the
••••••••,.
application of three-fourths of the member banks was
eliminated in toto by the Senate and this elimination was
•••••••-••••••
agreed to in conference.
If any inference may be drawn from the history
of these amendments, therefore, it seems clear that the
conferees agreed that no district should be abolished,
even upon the application of three-fourths of the member banks.
Interpretation No. 2, therefore, seems to be
consistent with the_intmt_g_clam!!3 as indicated by
the history of the bill and since a modification of the
individual districts does not involve the elimination of
a district nor of a Federal reserve city, and does not
necessitate the liquidation of a Federal reserve bank,
it is possible, under this interpretation, to give effect
411
,4
qlk
to all other provisions of the Act in accordInce with the
accspted rule,; of construction in such cases.
In considering the question submitted, I am conscious of the great public importance of the 2oard's decision
in this matter and realize that the question is one upon which
counsel may, and in fact do, differ.
I have endeavored, there-
fore, to call the 73oard'e attention to the two possible viewpoints and to explain at some length the reasons for conclusions reached.
appear to me that any
2riefly summarized, it ._interpretation which vests in the Board the power to reduce the number of districts makes it -necessary to also vest in the Board
implied or incidental powers wIlich are repugnant to other expressed provisions of the Act.
That, on the other hand, the
provisions in question are subsceptible of another equally reasonable interpretation which is in harmony with the spirit and
purpose of the Act and which will give ofrect to all other provisions.
I am
4-hereiore
of the opinion that this second in-
terpreion must be P;iven effect and that following the usual
rules of construction in such cases the 2oard is without nower
toreduce the number of districts by consolidation
or o the r-
ice, and that each Federal reserve bank now organized is en. •
titled to have succession for a period of twenty years unlees
sooner dissolved by an Act of Congress or unless its franchise is forfeited by some violation of law.
Respectfully,
'on. Charles S. Hamlin,
:..xovernor.
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Federal Reserve Bank of St. Louis
counsel.
/
0/ /Ncvember 22, 1915.
My par Governor: -
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Federal Reserve Bank of St. Louis
, On March 1st, 1915, this office filed with the
Board an opinion dealing generally with the subject of
the right of the Federal Reserve Board to review the determination of the Organization Committee, to adjust
from time to time the Federal reserve districts created
by that Committee, and to es:tablish new districts.
In
that opinion the question was incidentally considered
whether or not the Federal Reserve Board, under its power
to review, or under its power to readjust the districts
created, could legally reduce the number of districts by
consolidation or otherwise.
The Board has requested that this subject be
further considered but it is understood that it desires
at this time to have counsel reconsider only that part
of the opinion of March 1, 1915, which deals with the
following question:
"Can the Federal Reserve Board, by the consolidation of two or more districts, reduce the number
of Federal reserve districts?"
The powers of the Board relating to the mdification of Federal reserve districts are contained in Section 2 of the Federal Reserve Act.
This section provides
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Federal Reserve Bank of St. Louis
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in part as follo:is:
"As soon as practicable, the Secretary of the
Treasury, the Secretary of Agriculture and the Comptroller of the Currency, acting as 'The Reserve Bank
Organization Committee', shall designate not less
than eight nor more than twelve cities to be knowr,
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
organization conALittee shall not be subject to review
except by the Federal Reserve Board when organized;
PROVIDED, That the districts shall be apportioned
with due regard to the convenience and customary
course of business and shall not necessarily be coterminous with any State or States.
The districts
thus created may be readjusted and new districts may
from time to time be created by the Federal Reserve
Board, not to exceed twelve in all.
Such districts
shall be known as Federal reserve districts and may
be designated by number.
A majority of the organization coLLmittee shall constitute a quorum with
authority to act".
It will be observed that the organization committee is empowered (a)
To designate not less than eight nor more than
twelve cities to be known as Federal reserve
cities.
(b)
To divide the continental United States . . .
into districts, each district to contain only
one of such Federal reserve cities.
Section 2 further provides that -
"Said organization committee shall be authorized
to employ counsel and expert aid, to take testimony,
to send for persons and papers, to administer oaths,
and to make such investigation as may 'ee deemed necessary by the said committee in determining the reserve
districts and in designating the cities within such
districts where such Federal reserve banks shall be
severally located.
The said committee shall supervise the organization in. each of the cities designated
of a Federal reserve bank, which shall include in its
title the name of the city in which it is situated, as
'Federal Reserve Bank of Chicago".
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Federal Reserve Bank of St. Louis
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44L
The Federal Reserve Eeard is authorized (a)
To review the determination of the organization
comilittae,
(b)
To readjust the districts created, and
(c)
To create from time to time new districts, not
to exceed twelve in all.
71hatever power the Board has in the natter of
redistricting the continental United States must, therefore,
rest upon the interpretation to be given to the language "The determination ef said organization committee shall not be subject to review except by
the Federal Reserve Board . .. . The districts thus
created may be readjusted and new districts may
from time to time be created by the Federal Reserve
Board not to exceed twelve in all".
The question under consideration is - can this
language be reasonably construed to give the Board power
to reduce the number of Federal reserve districts and to
liquidate or dissolve one or more of the Federal reserve
banks organized by the organization connittee?
If we consider the language 'above quoted without
reference to any other part of the Act and attenpt merely
to give the Ilsual or ordinary meaning to the woras used it
becomes immediately abvious that at least two different
interpretations are possible and it is, therefore, not free
from ambiguity.
It is accordingly necessary to consider
both possible interpretations in order to determine which
one is consistent with other Darts of the Act and is in
accord with the intent of Congress.
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Federal Reserve Bank of St. Louis
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440
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On the one hand it may be argued that the power
vested in the Board to "readjust the districts created"
gives the hoard the power not merely to change the lines
)
of each and every district (preserving, however the entity
of each indiVidual district) but that it may in its discretion consider the whole subject de no7o and may divide the
continental United States into an entirely new set of districts.
This interpretation is based upon the assumption
that dhen Congress provided that
he districts thus
created may be readjusted" it meant that the complete whole
might be readjusted and not merely that each individual district was suieject to change.
If this be true, the certifi-
cate showing the Federal reserve cities and the geographical
limits of each Federal reserve district which the organization co=ittee is required to file with the Comptroller may
be =dined at any time by the Federal Reserve Board in any
way that it deems necessary or advisable.
In this view- it may be contended that the language which follows, namely, "and new districts may from
time to time he created by the Federal Ileserve Board, not
to e:cceed twelve in all", was not intended to mean that
additional districts nay be created 'cut merely that districts with new lines and new to 1.itorial extent may be
created without reference to the entity of those districts
created by the organization comalittee.
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Federal Reserve Bank of St. Louis
440
-5
Construing this general language to mean that the
Board has an expressed power to alter at will
the entire
plan of districtd created by the organization commi
ttee,
it may then be argued that this expressed power carri
es with
it such incident:,1 powers as may be necessary to
carry out
the intent of Congress in the matter. That is to say,
if
it becomes necessary as an incident of any readjustme
nt
made by the Board to change or cancel the designatio
n of
a Federal reserve city or to dissolve or liquidate
a Federal reserve bank, the Board has an implied power
to do
these things as incidents of the expressed power
to readjust the districts.
If, therefore, this interpretation can be sustained under the usual rules of construction of statu
tes
the question submitted - has the Board the power
to reduce the number of Federal reserve districts, may
be answered in the affirmative.
Before applying the usual rules of construction
to this interpretation (which, for convenienc
e, will be
referred to as interpretation No. 1) attention
is called
to an alternative interpretation which is
equally possible
when the language in question is consi
dered without reference to other parts of the Act.
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Federal Reserve Bank of St. Louis
•
440
-0
-
Under this second interpretation it may be argued that the power to readiust the districts created
voste in the Board the power only to readjust or to change
the lines of each district created by the organization
committee.
That the power to create new districts not to
exceed taelve in all w,s intended to give the Board the
right to increase the nunker of districts if the organization committee had created less than twelve; that Congress
did not intend that the districts created by the Orgr,nization committee should have merely a temporary or experimental status as districts but while subject to modification as to size and shape were nevertheless intended to
have a permanent status as entities.
If this view can be supported by the application of the usual rules of construction the question under
consideration - whether the Federal Reserve Board may reduce the number of districts - may be answered in the negative.
It 1%ill be observed that to make effective the
power vested in the Board under interpretation No. 1, it
f_s necessary to imply that it has power as an
incident of
"readjustment" to change or cancel the designation
of Federal reserve cities and to liquidate Federal
reserve banks.
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Federal Reserve Bank of St. Louis
440
-7-
It is, therefore, necessary to consider
whether these implied or incidental powers are in confl
ict with any expressed provisions of the Act.
Upon an examinatien of the statute we find that
the organization committee is expressly authorized
to designate not loss than oi
reserve cities.
t nor ;Ilene than twelve Federal
Let us as6ume that the power in thc Board
to create now districts is equivalent to an expressed
power to designate Federal reserve cities.
In support of this assumption the Act provides
that "the districts thus created may be readjusted"
and
when we turn to the context to learn how the districts
were "thus crea-ted" 4e find that the organization committee is required to first designate a Federal reserve
city and then to define the geographical limits of the
district to be served.
It is, therefore, clearly neces-
sary in order to create a district to designate a city
and to define the limits of the district.
Accordingly if the power in the Board to create
new districts is construed to mean to create additional
districts or districts other than these previ
ously created
by the organization connittee, it is clear that
the Board
has an expressed power to designate Federal
reserve cities
for such districts and that this power to
designate
cities
in those districts
created by the
Board does
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Federal Reserve Bank of St. Louis
•
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not conflict with the power of the committee to designate
cities in districts which it has createa.
On the other hand, if we construe this power
to mean that the Federal Reserve Board may create new districts out of two or more districts created by the organization committee, we must assume that the Board has the
power to nullify the designation of Federal reserve cities
made by the committee.
It is significant in this connection that in defining the power of the Board to create new districts the
Board is limited to a maximum number of twelve but is not
limited to any minimum.
The organization committee is required to create
in the manner above shown not less than eight nor more
than twelve Federal reserve districts.
Under the power vested in the Board "new districts
may be created from time to time not to exceed twelve in all."
If, therefore, this power to create new districts is to be
interpreted as giving the Board the right to reduce and to
eliminate there would seem to be no limitation on the Board's
power to reduce and it might create a number less than eignt.
It is hardly reasonable to say that the power to create new
districts gives the Board the power to create such districts
without reference to the action of the or„anization committee
since in this event they might abolish all but one or two banks.
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Federal Reserve Bank of St. Louis
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On the other hand, the fact that a maximum is placed
en the new districts to be created. by the Board but no minim"
is expressed in the provision which deale aith this power of
the Board, indicates very strongly that Congress intended the
nur4aber of districts created by the organization committee to
have a fixed and permanent status and to constitute the minimum
number to be established.
That it merely intended to give the
Board the power to increase the number to the reaximum.
This
view appears to be sustained by the history of this legislation
which will be dealt with later,
Considering the second implied power under the interpretation No. 1, we are here confronted with a conflict with an
expressed power which is °Ton
more clear.
As above shown, if we assume that the Board may make
an entirely new 'map of the districts and may reduce the number,
we must assume that it has, as an incidental power, the right
to liquidate one or more Federal reserve banks.
Upon referrinz
to Section 4, however, we find that when the necessary formalities have been complied with and a certificate of organization
has been filed each bank becomes a corporation with certain
specified powers, including the power " To have succession for a period of twenty
years from its organization unless it is sooner
dissolved by an Act of Congress, or unless its
franchise becomes forfeited by some violation
of law."
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Federal Reserve Bank of St. Louis
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-10To adopt interpretation No. 1, therefore, we must
assume that the implied power in the Board to licuidate
these banks as an incident of readjustment is sufficient
to overcome this expressed power in the bank to have
succession for a period of twenty years " unless sooner
dissolved by an Act of Conress,or unless its franchise is
forfeited by some violation of law."
Such an assumption
is clearly contrary to the established rules of construction
laid down by our courts.
Rouse Hazard
For example, in the case of In re
Fed...
...._Real.... 100 the court in quoting
.2..
with approval the decision in the case cf State v...Inhabitants of Trenten _38 N. J.
Law 67, says :
" The legislature must be presumed to have
intended what it expressly stated, rather than
that which might be inferred from the use of
general terms. "
It may be said to be a cardinal rule of construction that when two interpretations are possible, one of
which is in harmony with other provisions of the Act, and
the other repugnant to other provisions, that which is in
harmony must be adofted.
Inasmuch, therefore, as interpre-
tation No. 1 involves the necessity of vesting implied or
incidental powers in the Board which are repugnant to other
expressed provisions in the Act, while interpretation No.2
is in harmony with these provisions, the uecond interpretation should be adopted..
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Federal Reserve Bank of St. Louis
•
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While this rule is so uniform it needs little
citation of authority to sustain it, the language of the
court used in a few cases in which this question arose
is culled to the Board's attention,
In the case of 1:ontc1air v. Ramsdell
107 U.S.
152, the court said :
" It is the duty of the court to, give effect
if possible, to every clause and word of a statute,
avoiding, if it may be, any construction which implies that the legislature as ignorant of the
meaning of the language it employed."
Following this decision of the Supreme Court of
the United States, it is, of course, necessary to give
effect to the provision which gives banks a period of
twenty years succession as well as to other provisions
which are inconsistent with interpretation No. 1.
Again in the case of United States v. Balti-ore
0SWRCo..,..159 Fed. Ru.37,, the court says " The maxims and rules adopted for the purpose
of interpreting the iileaning of a statute require
that we attend to all its provisions, and, if possible, attribute to the language in dhich each is
expressed a Leaning ihich will remit other provisions to have their due effect."
Ih the case of Bate Refrierating_Co.v Sulzber- er
,
157_____J.
the court says :
" Mere the language of the act is explicit, this
court has said, there is great danger in departing
from the words used, to give an effect to the law which
may be supposed to have been designed by the legislature. It is not for the court to say, where the langso
uage of the statute is clear, that it shall be/construed
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Federal Reserve Bank of St. Louis
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as to embrace eases, because no good reason can
be assigned why they were excluded from its provisions. Scott v. Reid, 10 Pet. 524, 527."
Applying this doctrine to the present case, if
it is cle r under interpretation No. 2 that the Board may
modify the districts but cn not reauce the number, it
would seem to be inconsistant with the rules of construction to extend thf.s power to include the right to reduce
the number if such a construction is inconsistent with
other parts of the Act. As said in the case of In re
Natthews
109 Fed. 112p. 615
.
" It.is the cardinalT rule of interpretation
that a statute should be construed not only so
that every part of it should stand, but so as to
give force, meanin, and effect to every part of it."
In United .
§ta.tes
Jackson .153
7
....fe'cl::::_h:rp::-. 85, the
court said " Another canon of construction is that every
part of a statute must be viewed in connection with
the whole, so as to make alLthe parts harmonicrls,
if practicable, and to give a sensible and intelligible effect to each; nor should it ever be presumed
that the Legislature meant that any part of a statute should be without meaning or Tithout force and
effect. "
::any other cases to the same effect might be cited but in
view of the uniformity of decisions on this subject this is
considered unnecessary.
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Federal Reserve Bank of St. Louis
-440Inasmuch, therefore, as it will be necessary to
fail to give effect to other provisions of the Act if interpretation No. 1 is adopted, it remains only to be considered whether interpretation No. 2 is consistent with
the context and with otl= - arts of the Act.
From an examination of the hearings held by the
House and Senate Coittees while the bill was pending
it will be found that the question of the number of districts to be established was the subject of much discussion and of deliberate consideration.
There were many
who advocated a very small number of banks and others who
contended for a large number.
It was finally determined
to fix a maximum and a minimum and to vest the power in
a committee to be known as the Organization Cc_mittee, to
establish not less than eight nor 1:lore than twelve aistricts with the power in the Federal Reserve Board to create new districts not to exceed twelve in all.
The House bill provided that the organization committee should designate "from.among the reserve and central
reserve cities " a .number of Federal reserve cities ,
the total number so designated not to be less than twelve.
The House bill further provided that The districts thus created may be readjusted anc. new districts
from time to time
be created by the Federal Reserve Board
hereinafter established, 4ctipg_Apon_a_joint
. application made_by not loss than ten member
banks
desiring to be orfanized into a new
district. "
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Federal Reserve Bank of St. Louis
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Later in the same Section the bill provided that -
_No Federal reserve district, shall be
abolished nor the location of a Federal reserve
bank changed, except upon the application of
throe-fourths of the member banks. "
From this it appears that according to the House
bill the Federal Reserve Board might alter the limits
,
of any given district, plon the application of ten r.- em, or it might abolish a district and change the
.
ber banks
location of a Federal reserve bank upon the application
of three-fourths of the member banks in such district.
When the bilLreached the Senate it modified
the power vested in the Board to alter the lines of a
given district by striking out the provision that such
alterations should be made only upon the arlAication of
ten member banks.
The effect of this iiendreent in. the
Senate was clearly to vest inethe.Beard the power to alter
the lines of a given district en its own motion.
The power, however, to abolish districts and
to change the location of Federal reserve banks upcn the
application of three-fourths of the member banks was
eliminated in toto by the Senate and this elimination
was agreed to in conference.
If any inference may be drawn from the, history
of these amendments, therefore, it seems clear that the
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Federal Reserve Bank of St. Louis
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conferees agreed that no district should be abolished,
even upon the application of three-fourths of the member banks.
Interpretation No. 2, therefore, seems to be
consistent
ith the intent of Congress as indicated by
the nistor: of the
Lll ahd since a modification of the
individual distracts does not involve the elimination of
a district nor of a Federal reserve city, and does not
necessitate the liquidation of a Federal reserve bank,
it is possible , under this interpretation, to give effect
to all other provisions of the Act in accordance ;iith the
accepted rules of construction in such cases.
In considering the question subnlitted, I
am conscious of the great public iLportance of
the Board's decision in this matter and realize that the questi
on is
one upon which counsel may, and in fact de, differ
, I
have endeavored, therefore, to call the Board'
s attention to the to possible view-pJints and to
explain at
some length the reasons for conclusions reached.
Briefly sul;zilarizeci, it appears to me that
any
interpretation which vests in the Bciard the
Tower to
reduce the number of districts makes
it necessary to also
vest in the Board impliec. or incidental
poers which are
repugnant to other expressed
provisions of the Act.
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Federal Reserve Bank of St. Louis
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That, on the other hand, the provisions in question
are susceptible of another equally reasonable interpretation which is in harmony with the spirit and
purpose of the Act and which will give effect to all
other provisions.
I am, therefore, of the opinion that this
second interpretation must be given effect and that
follcy:fing the usual rules of construction in such
cases the Board is without power to reduce the nu:_ber
of districts by consolidation, or otherwise, and that
each Federal reserve bank now organized is entitled
to have succession for a period of twenty years unless sooner dissolved by an Act of Congress or unless
its franchise is forfeited by some violation of lawn
Respectfully,
n. C.
ELLIOTT
Counsel.
Hon. Charles S. HaLlin,
Governo r.
11/29/15
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Federal Reserve Bank of St. Louis
•
IZovombor 22, 1915.
The Pronident,
The Thito
Derr
r. Presidont:
Thenk ycu very much for sendinc ze the
//-il -j .
opiniof the Attorney General on the subject of
the powors of the Federal ReserVO Board to reduce
the existinc number of ?edema reserve districts
and Federal reserve banim.
I laid thia before
the Board this morning, and the members requested
me to state that it vmuld be very gratifying to
them if, for the present, you direct that this
opinion be not published, and I 'mow that the
ecrett:Lry of the '2roasury will Gladly juin in this
request.
Believe me,
Very rospectfully yours,
q,EiEned) C, S, -Aaent:
Ormornare
•
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Federal Reserve Bank of St. Louis
I
November 22, 1915.
The Honorable,
The Attorney General.
Dear 7:T. Attorney General:
Confirming my telephonic communication
this morning, I would say that the mambers of the
Federal Reserve Board would be very much gratified
if you would see that your opinion rendered to
the President, on the powers of the Board, be not
published for the present.
Believe me,
Very sincerely yours,
(igned) C, S
Hamlinl
Governor.
dill
'
STATEMENT FOR
5,TIE
. I,• ,
V` 1
PRESS.
7
November -25- •191i"
A committee appointed by the Federal Reserve Beard to considerz appeals
from the decisions of the Reserve Bank Organization Committee regarding the
determinatien of Federal Reserve districts and cities, today reported to the
Federal Reserve Board that the following appeals are nee pending:First, the appeal of Baltimore that it be selected in preference to
Richmond as the Federal Reserve City of the Fifth District.
Second, the appeal of Pittsburgo that it be selected in preference to
Cleveland as the Federal Reserve littatitist City of the Fourth District.
*Third, the appeal of a group of banks in certain counties of Wisconsin
that they be taken out of the Minneapolis District and added to the Chicago
District.
Fourth, the appeal of certain banks in the Western half of Connecticut
that they be taken out of the Boston District and added to the New York
District.
Fifth, the appeal of certain banks of Louisiana that they be included
in the Atlanta District and operate through the New Orleans Branch in preference to being included in the Dallas District.
The Committee asked for instructions as to whether these five cases be
dealt with in a comprehensive way by considering the broader question of
reaajustment of districts or whether it should handle each question by itself.
There was also prestinted to the Board an opinion of the Attorney General
of the United States dealing with some phases of the legal right of the Board
in regard to action on such appeals. After a general discussion of the Nthole
situation, it was unanimously agreed that further investigation of the powers
of the Board with reference to the whole question was required before any
action could be taken and the report of the Committee was laid on the table
pend.ing the making of further investigation of the subject.
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Federal Reserve Bank of St. Louis
NoveMber 19, 191$.
Sirs:
You
have asked to 1):: advised as to the extent of you
present power to rearrange Reserve Bank districts.
The powers of the Coard in this regard are defined
in 9ection 2 of the Act.
The general scheme of or ,L,Lizatiun of the Reserve System under the Act is that the Reserve Bank Organization Con ittee shall designate not less than oi,:hL nor
cities to be kno%in
as
More
than twelve
"ederal Reserve cities, and shall divide
the "nited ;atea into LU.st , cto, ea& dLst:ict to contain only
one of s-ch Reserve cities.
Then, under direction of th
Organ-
ization Conmittee,the national banks of each such district (and
elirible State banks) shall organize and form
4
Reserve Bank fo
the district by filing the proper certificate with the Comptroller of the currency. Each Ret3erve Bank then
entity ( ection 4 of the Act).
becomes a corporate
The Reserve Board is not select-
ed until the Organization Committee have completed the district
ing. (Under Section 10 of the Act the President in his choice
of the appointive rembers of the Reserve Board is not to select
more than one from any one Reserve District thus created.)
It
is cl ar that the Act intends that the Organization Com.!littee
shall organize and get the Reserve system in shape to do business in advance of the selection of the Reserve hoard.
It
equally clear, however, that the Act intended
that the viork of the Organization Committee in the creation of
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Federal Reserve Bank of St. Louis
,th ) Reserve Districts should not be final
eance
y the Reserve Board.
T!ro
j,sul)joet to
cation 2 of the Act, deal
with the determination of the Organization Colulittee as to
creation of Reserve Districts, reads:
"T 'e determination of oala organization committoc
shall not ')c. sllblect to review except by the Pederio
1
2eservci Board when orGaaized : Provided, That the districts shall be. apportioned with due r,!/.2.ard to the
* *
convenience and customary course of lz-zsiness
dit lets thus created may be read,lusted, and 11(1;i
Tie
districto yay from tivie to time be createu by the Poderal
.7n3erve 7oard, not to emceed twelve in all."
It is by the proper interpretation of this language,
read in connection with the rest of the Act, that your questions
must, be answered.
-he language voted confers athority upon te Roik;rvo
Board to act only after the determination of the Orc;anization
Connittee has been made.
Thri 'oard ist;C:he power to reviesi the
,
dotrrmination of 1:' 3 Organization Conmittee, with the inutru0tion that dit-icts shall be J.:pportoned with due regard to the
convenience and c”stonury course of business, an i -citruction
f='om the connection of t11,,, words, ts addressed to Ole
Reserve Board.
Then tlr: Act ac qloted provides that the dio-
triots thus . created may be re-adjusted and ne';i diat-icts may
1
from tine to time be created by the Reserve 7loard not to exceed
twfave in all.
The wordo "t- Ato created" refer to the mode of
cr7tien thus de3cribed, that 19, by deterninatien
i%ation Conrittee.
The use of
aCIllstnent of rn ad,iustent of the districts
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Federal Reserve Bank of St. Louis
Organ-
word re-atli7sted, irlstead
07 adjusted, inclicates t' at the Board was to 17_av
a'Ase from tirm to time.
tl
'lower a7ry3r
nece.7slity
should
'Plc word re-adluctment innlieS th,e
exertcse of all the powers which were exorcised upon adjustment, and thIle clearly embfaoes u reviou of Lhe dotrmination
of the Organization Counitteo both as Lo RoJervk:
tricta.
It is argued that tie express authority contailled in
the words "no, distiota may from time to Line be created" is
inconsistent wit
authority implied or derived from the word
climber of districts, or to change
nro-adjusted" to decrease ti 1
the Peserve eLtios.
ThuI'u in no such inconsistency.
The: phrase
of The Act is That ne,; districts may be "created", but the word
:rm
"cr ated" iu lot s;;Eionymous with the t,
Licrease.
Tho Act
J
does not confer exnreso authority to "111c:row- ed ctiotj.ot8, the
word "iqcrease" does not appear in tlIc Act.
T.
le w ord "create"
means to mark out, to delineate, to determine,diatricte.
the authority to "ereato"
Thus
cistricts is the exe2cise of t'ie
same power v.'hi_ch the Oreanization OoLii,ittee exdfc;iued in the
beGinnine l Lt:w it is most sicnific,tnt that the Act thus uses
the
3W0
word "croattid" to
determination as to
Distf'icts by the Organization Committee and also by the Reserve
Board.
Havin, that true meanifv of the term "created" in rind,
and having regard to the fact that this Reserve Act intended to
establish a systm viM.ch should bc sufficient for the chancing
needs of the country at all tires, it 3ee:1:, clear that the
word
"re-adjuatedn enbraoes
incilkdes the Power, not only to
chancfl
territorial limits or boundaries of
dist:iota alread:,
established, but cauo incluctes the po..er to reach a
determination which may dininish the total number of s:Ich
diutricts and
Ohanze the Tlesorvn Cities.
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Federal Reserve Bank of St. Louis
In other 'aords, it is a po- ,er
.
to
draw te Aserve district m4
afresh.
It is notable that tido uimple acid natural construction of the Act hao found cl,:ar ex.prossion in an argument of
-,:euerve lioard on 14:1). 10,
the 'on. lobert L. Owen befoA) the :
1915 in rpard to a 7)eLition o- st!rtain bank
homa (at page
ing).
35
et Aefi.
I- :,;tenoc,raphic
of Soutmord Okla. port of that lear-
In that argument he laid don clearly three points:
first, that in a review of Lhe a termination of the Organization
,
Com littee the rcview by the hoard is of the action of the Corrilttee, not of the record on which they acted; uecond, that the
power of tl-e loard to 'edist .ict ia complete, (au
suid "The
intention was to give the "Board the power of the government itself in dealin:2 with this system * * * ); and, third, that the
po%-er of the 7oar0, extend
to a reduction of t:le nunber of Re-
serw
The only argument proposed aLainat Senator Oweals constroction is based woon u di'forent portion of th: Act.
tion 4 of '.1(1 Act p,..wideu that v4 _on tits Orguaization
Sec;Littee
shall have established distdcts each national bank in the district so conutituted shall become eligible for nembership in
the 'Reserve Ili;.aks, that certain of th
mA:rib() foc stock an
3'0
21i,:iblu banks shall then
rnakL: a certificate which shall be the
organiation certificate of the Reserve :ank of the district,
and Pirtlier provides that the Reserve Bank of th- district
organized, have, ,4:orw, other corporate powers, the
following:
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Federal Reserve Bank of St. Louis
"Second. To have succession for a period of twenty
years 'from its organization, unless it ssooner diauolved
by Lim Act of ConL;ress, or unless its franchise becomes
forfeited by sone violation of law."
In connection with this language there is also to be rerembered
the language of Section 11 of the Act, which naues
non(; the
s)ecific powers of the Reserve Poard the following:
"()) o suspend, for the violation of any of the
::
provisions of this Act, 1.11, onerations of any Federal
reserve bank, to take possession thereof, administer the
same durin the period of suspension, and, when deeried
advisable, to liquidate or reorganize WWII bank"
and in the
Sare
connection is to be borne in mind the first
sentence Of Section
3
of tne Reserve Act w'lich reads:
"Each. Federal reserve bank shall establish branch
banks wi - An the Federal resarve district in which it
Is located and may do so in the distric-Li of any. Federal
reserve bank which may have been suspended".
These t rec provisions last above quoted nrovide iath(i existence of any Reserve Bank by
chinry
Act of Con_ress or, on violation of law, by the disciplinary
authority of L ,c Reserve 'oard.
The argumet which it
Is
0'1,i'L
They are in themselves cl;:ar.
to build upon them is that in-
asmuch as the Act tus provides in detail rduchinery for termination of the life of a Reserve
,ank (whenever (onc:ress wishes
or the law is violated), "hilt -)1.ovides no Liadhinerj for termina•
tion of the life of a Reserve bank if J'zch tarmination sould
arise from re-di3tricting, therefore_: po,er 1,o re -district civen
by Section 2 must b) construed as no. Including power to terL1jfl
ate a Reserve 'ank or a
Reserve
District.
That is the argument,
but it is, it seems, a strained and unnatural one.
vallenesJ about Section 2 of the Act.
There iu no
The \iords "review",
"created", "readjusted", in that section are clear--and grant a
clear aid
poer which is ample to permit the tormina-
tion of a Reserve Bank or Reserve District if necessary to
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Federal Reserve Bank of St. Louis
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Federal Reserve Bank of St. Louis
carry it out.
The fact t7ia, Section 4 in stating 1311.0 limit of
the corporate existence of a Reserve Tiank provides it shall be
twenty years unless sooner dissolved by Act, of Congress or for[
f . ited for violation o. * law is not a declaration of intention
promise that., th
that, or
Reserve bank may not cease to func-
tion or exist for some other reason.
;:,,orn is the promise made?
to ,
If it be such a promise--
hot to L.Jy member bank, because
it is oonceded by every one that ay particular member bank may
be r.etached from a Reserve District and made ineligible for membership by
a shift of list .Act Loundaries.
Since that cLn be
dole to one member bank, it can be done to any member bank in
the dist'ict--and no one of then has any riht
o object to
redistricting because it results in ending its connection with
the Peservo Lank of which it was a member.
Act does not provide machinery
for
The fact that the
terminatin
the existence of
icting--if it be an omission at all-.7),eserve Izink on redist,
Li no reason for uocidinL, that the clear language Of Section 2
(which grants the power to readjust the districts) means some.
thing less than it says.
The language of Section 2 gives a
complete power to redistrict and there follows from that coraplete grant of power, by necessary Implication, the a thority
to take all steps necessary for that end.
It is important to remember that the Board has
alreadY,
by rodistrjeting, in the case of New Jersey banks, transferred
banks from on
listrict to another.
y that action the Board
has already "croated" fl4 Reserve 7)istricts.
By such action
it has already changed the corporate powers of the Reserve 3anks
Involved.
If Section 4 Of the Act contains a promise that the
corporate powers of each Reserve
,ink should exist until Con-
gress end them or L1-2 law is i-iolated, then that promise has
been broken already—since the former corporate powers of the
Reserve Bank uf Philadelphia have been taken away and new aqa
lesser corporate powers given.
Yet if that action was not au-
thorized by the Act, then Section 4 of -ulle Act absol-qtely nullifies all power
readjustment under Section 2.
No ouch result
will be adopted unless unequivocal lano.lac,e requires it.
It is t- 1:3o to be rerenbered tiiat the Reserve :hoard
,
has no
as yet reviewed or affirmed in any way the dotermina7
tion of the Organization Committee as to all the
VILA action it takes at this time will be t:1,
diet 'iota,
and
action of original
review (under Section 2 of the Act) as well as of re-w,justment.
If those two words "review" wad "re-adjustment" mean
anything, they mean .hat the Poard nay do over again, and differently, whatever the Organization Committee did, even if such
action mean the chantjing of Reserve Cities and such redrafting
of the map of the districts as will mean the elimination of
acne district or the combination of one district with another.
The power in tha Reserve Mv.rd is et
an
tine
o make a new dis-
There is n.limitation on that power save the ex44
\
pressed- commands of Secticn 2 that in so districtinL: the countrict map.
try there shall be not less than eigh
nor more than twelve dis-
tricts, and "that the districts shall be apportioned with due
regard to the convenience are. cstomary course of 1)usine58".
\
rCElp0CtfUl1y yours,
k\i
Federal Reserve - oard,
Washington, P. C.
JPC..13.
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Federal Reserve Bank of St. Louis
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Federal Reserve Bank of St. Louis
t
iievauber 17, 1915.
Dear Mr. Secretary:
have asked Air. Willis to send you two copies of the
report of the Redistricting Committee which was considered
yesterday.
I have only one cony.
At the m)eting this morning it was agreed that the
question of sending copies to Secretary Houston and Senator
Owen should remain in abeyance, but that Ur. Delano should
write Mr. Glass that the liedistrictint ‘;ammittee contemplate
;
main; auothur report, and in view Of this fact ir. Delano
said he woula ask LW. Glass to return the report already
sent to him.
Very sincerely yonre,
(Signed) C. S. Hemline
Governor.
Hon.
ill1ezn G. itteAdoot
Secretary of the Treasury.
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Federal Reserve Bank of St. Louis
•
, •
i4
• Same letter to
Copy for
Tilliams,
Miller.
licC-r The
r. lizar(ling's information.
F•;L,Delano.
17, .1915.
-
::0Ve.r.:ber
My dear Governor
On behalf of the Committee on
Rodistrietinn.,
enclosc
aEcrted., or :cv
cc
r
aT:1
ort which
submitted_ by the io!Tilitiee
tsubs4- i-
tute -for the renort uated
You
will
f5.r1
that
ii0110
-C IVO
Pat es
-
of
the old re,00...*t 2,a7, oeon omitted, for
the reason t'qvt the colmittee tilouc7ht
tha ; therelyy they would make clear the
4
true ?ur000 ut th
Oorami ttoe in nri ,
senting this report of prcwrese n.-f,
this time, and asking for instruction.
Kin6.1zi
ecet this as a snt;t1-
tut() for what was previously submiticu.
Yours very truly,
Hon. C. S. Hamlin,
Governor.
and.
tit>
REVISED REPORT.
FEDERAL RESERVE
VIASHINGToll
7-413-
BOARD
Nover..ber /7, 1915•
TO the Federal Reserve Board.
There are now pending for consideration by the Board the:.
folldwing appeals from decisions of the Reserve Bank Organizatio
n
Committee, regarding the determination of Federal Reserve Cities
and District lines :
First :
The appeal of Baltimore that it be selected in preference to Richmond as the Federal Reserve City of the
Fifth District ;
Second:
The i4Tea1 of Pittsbrgh that it be selected in preference to Cleveland as the Federal Reserve City of the
Fourth District ;
Third :
The appeal of a group of banks in certain counties
of Wisconsin that they be taken,, out of the Einneapolis
District and added to the Chicago District ;
Fburth:
The appeal of certain banks in the western half of
Connecticut that they be taken out of the Boston District and added to the New York District; ( The Board
has not fixed the time for hearing this appeal ).
Fifth:
The appeal of certain banks of Louisiana that they
be included in the Atlanta District and operate through
the New Orleans Branch, in preference to being included
in the Dallas District. ( This appeal has not been heard
by the Doard, but the facts of the case are being investigated ).
Your Committee recommends that these five cases be dealt with
in a comprehensive way by considering the broader question of readjustment of Districts.
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Federal Reserve Bank of St. Louis
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Federal Reserve Bank of St. Louis
- 2 -
413
We nay assume that among the important objects
which
Congress desired to achieve in enacting the Federa
l Eeserve Act
were:
1.
The creation of independent banking centers indeteiminate in number and regional rather than local
in character - in each of which would be concentrated
a substantial portion of the banking reserves of its
District which could be effectively utilized as the
basis of an elastic system of credit and note issue
and which would create and sustain a ready market for
commercial paper and bankers acceptances.
2.
The steadying of interest rates by more nearly
equalizing the supply of credit facilities in different
parts of the same district or between districts, more
particularly by making available for active use where
needed, funds which might otherwise or elsewhere be
unemployed.
3.
The establishment of an economical and efficient
system of clearings and collection of checks and of
transferring funds within or between districts.
Decentralization of credit facilities through the
agency of team great and strong reginnal centers, subject to
feature
centralized supervision, is the)glomoodocaTpmdm2=0Wwhich differentiates the Federal Reserve System from any other comparable
banking system, and the success of our new American departure
in the field OctoMactWiTiffiltorciqx7
61009stect of reserve banking will
be conditioned upon the wisdom and discrimination with which
this plan of administration is applied.
Abundant evidence is
to. be found, both in the debates of Congress and in the Reserve
Act itself, that the framers of the Federal Reserve Act were
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Federal Reserve Bank of St. Louis
-4
113fully alive to this fact
but it is necessary to recognize and empha-
size that however much importance the framers of the Act attached to
the choice of suitable divisionsin the effective administration of the
system, the Act, nevertheless plainly regarded this as a question which
could not be settled in advance and a question that could not even be
definitively settled by the Reserve Bank Organization Committee on the
basis of such investigation as could be had before the actual inauguration of the new bunking system.
The Act, therefore, did not undertake
to fix the boundaries of districts nor even the exact number. Congress
was satisfied to prescribe an 'upper and a lower limit within which the
precise number of districts should be determined in accordance with
changing conditions and after the necessary experience might be at hand.
The ultimate judgment on this important question was to be that of the
tdd nothing to impede the free exorFederal Reserve Board, and Congresse
cise of the Board's judgment on this question other than laying down
the requirements that the districts should not be more than twelve in
number nor less than eight, and by prescribing that due regard should
given to the
"convenience and customary course of business."
Observation of the actual working of the Federal Reserve
banking system and of the factors that make for strength and for weakness, has satisfied your Committee that there is a limit in the preswill
ent circumstances of the country, beyond which decentralization j
defeat its purpose without making for independence.
Experience has
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Federal Reserve Bank of St. Louis
-4
-
-413-
satisfied us that the fundamental purpose of decentralization
as well
as the other important objects of the reserve system, will
never be
attained in the degree which your Committee believes possible without
at least a partial consolidation of certain now contiguous district
s.
The Reserve Bank Organization Committee to whose judgment in the
first
instance the question of fixing the number and boundaries of the Federal Reserve districts was referred, did not have and could not have
had the data, which alone could be derived from experience, necessary
for a final disposition of the problem. It; conclusions were necessarily more or less conjectural in character and, therefore, not to
be regarded, under any reasonable construction of the authority and
responsibilities of the Federal Reserve Board in the matter, as final.
It may be assumed that the Act, in referring the problem of districting
along with other preliminary questions to the Organization Cbmuittee
for initiative action, did so with full appreciation of the difficulties_and the importance of the problem and in order not to delay the
organization of the Federal Reserve Banks by postponing consideration of the question until after the appointment of the Federal Reserve Board; * and this method of handling the problem was doubtless
also adopted by Congresssin fulliappreciation by it of the fact that
(*)
See speech of Hon. Carter Glass, December 22, 1913) on
the conference cor.s.littee report on the Federal Reserve Act.
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Federal Reserve Bank of St. Louis
•
-5-
-413-
in its first stagesbthe whole reserve bunking organiz
ation would be so
flexible in character that such readjustments in the
fundamentals of
the regional structure as might commend themselves as
necessary or
expedient to the judgment of the Federal Reserve Board, could
be made
without injury to or impairment of the normal development of
the system%
In organizing the new banking systom it was obviously necessary to begin at some point, even though it was to be expected that
some of the action taken would have to be revised.
The task of the
Organization Committee was of necessity one beset with many and
varied difficulties and uncertainties. No one can appreciate this better than your Committee which, in reviewing the problem of districting, has had the advantage of much definite knowledge derived from
experience which was- lacking to the Organization Committee.
It there-
fore implies no criticism of the work and findings of the Organization
Committee if your present Committee, with the benefit of a year's
obsertation of the workings of the Federal Reserve System has reached
the conclusion that the regional structure outlined by the Organiz
ation
Committee can be simplified in some of its features with a
gain in
efficiency and economy of operation.
It is, indeed, a tribute to
the insight exercised by the Organization Committee in
laying out the
boundaries of the reserve districts
that the readjustments considered
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Federal Reserve Bank of St. Louis
-413.
necessary by your 'ommittee should be found to invol
ve so little
change in the fundamental lines of the Organization Ce=it
tee's map.
Opinions, it may wellTbe expected, will_long differ as
to the best
alignment of districts under the Federal Reserve Syste
m.
However
much experience may do to help the solution of the probl
em, experience alone may not fOr a very long time, perhaps never
, be expected
to settle it..Thoto will .always be a considerable
margin of doubt
on points of detail which will have to be resolved
by the unaided
judgment of the Board.
It is true that alL the data which may in
time be expected to become available, are not yet at
hand for a
final
-and definitive solution of the problem
if experience alone
is to settle it, but your Committee is
of the opinion that there
has already been uuffiCiwat experience to make
it possible to
undertake the work of readjustment with intel
ligence and substantial confidence in the permanency of the resul
ts.
Any risks of
possible necessary. readjustments of a minor
character in the future
are to be regarded as slight and negli
gible compared with the :possio--
.ble:injitry to be done through
holding back the development
of the Federal Reserve SYstem and keepi
ng the business and banking
communities of the several districts in a
state of susT)ense as to
what willlbc the final disposition
ofthe districting question, to
say nothing of the considerable dislo
cation ZMit:li,±674 -ItUICICEEC in
01
established arrangements which every
additional day of delay will entaiL
-413
Speaking practically, therefore, on the question of readjustment of districts, your Committee is firmly of the opinion that so far
as any large and comprehensive handling of the problem is concerned,
it is a question of now or never ! The time has come when the Federal
Reserve Board must either accept the responsibility of sanctioning
the existing arrangement of districts or else of making in the near
future such revision as in the exercise of its best judgment it now
believes to be necessary.
Your committee, having presented the case for redistricting in its general aspects, before making further report and submitting a definite program asks instructions on the following
(a)
Shall the committee prepare and submit a plan of changes
in district boundaries involving the consolidating of adjoining districts and reduction in the number of districts ?
or,
(b) Shall the committee proceed to reconliend answers to
each of the five cases now on appeal before the Board without touching
the larger issues involved in a comprehensive handling of the redistricting problem ?
Respectfully submitted,
Comr7ittee (
(
(
Appendices attached
11/17/15
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Federal Reserve Bank of St. Louis
F. A. 177 170
.
P. M. WARBURG
W.P.G.HARDING
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Federal Reserve Bank of St. Louis
Appendix 1.
Aggregate
Capital &
Surplus of
Member banks
Sept.2, 1915
3 Per Cent
of Capital
and Surplus
of Member
Banks, Sept.
2, 1935,
Per Cent
of Share
of Capital of
F. R.Bank
paid-in
by mmber
banks in
Cities
NctrrLd.
$57,071,000
2,750,000
1,600,000
3,200,000
3,025,000
1,930,000
1,800,000
$1,712,130
82,500
48,000
96,000
90,750
57,900
54,000
33.2
1,5
.9
1.9
1.0
1.1
1.0
3.1
.1
Now Haven, Conn.
Hartford,
6,820,000
5,950,000
204,600
178,500
4.0
3.5
.3
.3
Concord, N. H.
Portsmouth,
Manchestor,
Keene,
1,150,000
540,000
1,300,000
1,100,000
34,500
16,200
39,000
33,000
.7
,3
.6
.1
.0
.1
.1
Providence, R. I.
8,850,000
265,500
5.1
.5
Portland, Maine
3,125,000
93,750
1.8
100,211,000
3,006,330
58.2
5,5
172,09,385
5,172,082
100.0
9.4
Nar.-.e of City.
1. Boston, Mass.
Worcester,
Lowell,
Springfield,
Fall River,
Hav3rhill,
Holyoke,
Total, Above
Cities
TOTLI, for DISTRICT
Per Cent
of Share
of total
paid-in
capital
of all
F. R.
Banks.
.2
.2
.1
.
1
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Federal Reserve Bank of St. Louis
APTINDTX 2.
Aggregate
3 Per Cent
cap. n
of cap. &
surplus of
surplus of
rember banks,member banks
Sept. 2,
Sept. 2,
19 15.
1915.
Name of City
2.New YorkCity
Buffalo
Rochester
Syracuse
Albany
Per Cent
of share
of cap.
of F.R.
Bank paidin by member banks
in cities
named.
Per Cent
of Share
of total
paid -in
cap. of
all F.R.
banks.
243,425,000
12,100.000
4,275,000
4,235,000
4,300,000
7,302,750
363,000
128,250
127,050
129,000
66.4
3.3
1.2
1.2
1.2
13.3
•7
.2
.2
.3
2,200,000
1,060,000
10,644,000
66,000
31,800
319,320
.6
.3
2.9
.1
.1
.6
Total,Above Cities
282,239,000
8,467,170
77.1
15.5
TOTAL for DISTRICT
364,526,860
10,935,806
100.0
20.0
3.Phi1ade1phia,Pa.
Scranton
Reading
Wilkes Barre
Allentown
Lancaster
Chester
York
Johnstown
61,480,000
6,200,000
4,750,000
3,750,000
2,725,000
2,332,000
1,985,000
1,953,000
1,800,000
1844,400
186,000
142,500
112,500
81,750
69,960
59,550
58,590
54,000
35.0
3.5
2.7
2.2
1.6
1.3
1.1
1.1
1.0
3.4
.3
.3
.2
Total,Above Cities
.
1221175
88,178,175
36,095
2,645,345
.7
50.2
4.8
TOTAL FOR DISTRICT
175,398,550
5,261,956
100.0
9.6
Jersey City,N.J.
Hoboken
Newark
.1
.1
.1
.1
.1
.1
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Federal Reserve Bank of St. Louis
-413-
A'EFIDI"' 3.
Aggregate
capital e7-;
surplus of
member banks
Sept. 2,
1 9 1 5.
3 Per Cent
of cap. &
surplus of
member banks
Sept. 2,
1 9 1 5.
Per Cent
of share
of cap.of
F.R.Eank
paid-in by
member banks
in cities
named.
NAEE OF CITY
4.Cleveland,O.
Cincinnati
C14,400,000
20,550,000
C432,000
61(1,500
7.3
10.4
Pittsburgh,Pa. 46,460,000 1,393,800
Washington,"
2,209,000
66,270
Erie
2,050,000
61,500
Per Cent
of Share
of total
paid-in
cap.of all
F.R.banks.
23.4
1.1
1.0
o
-7-ltal;Above Cities
85,669,000 2,570,070
TOTAL for DIS'- 198,020,096 5,940,603
TRICT
* * * * * * * * * * * * * * * * * * * *
5.Richmond,Va.
9,885,800
296,574
Baltimore,l!d. 19,005,710
570,171
Washington,D.C. 12,669,250
380,077
43.2
100.0
*
*
4.7
10.9
*
*
*
-Y.
-X-
-X
*
* *
8.8
16.9
11.3
41,560,760 1,Z46822
37.0
2.3
111,645,470 3,349,364
100.0
*
.6
1.0
.7
6.1
Total,A,:oveCitie5
TOTAL for DISTRICT
.8
1.1
**************************************************
***********************4:**
6.Atlanta,Ga.
Birmingham,Ala.
Nevi Orleans,La.
8,600,000
3,300,000
6,730,000
258,000
99,000
201,900
10.7
4.1
8.3
Total,AboveCifi7s
-M- 7630,00
8 6
558,900
7
23.1
80,408,747 2,412,262
100,0
4.4
7.Chicago,I11:
74,975,000 2,249,250
Indianapolis, Ird. 9,730,000
291,900
Eilwaukee,Wis. 9,800,000
294,000
Detroit Eich._10250
2000
307 500
Total,Abmic Cfties 104,755,000 3,142,650
34.0
4.4
4.4
4.6
47.4
4.1
.5
.5
.6
5.7
TOTAL for DIS-221,263,906 6,637,917
TRICT
100.0
12.1
TOTAL for D13TRICT
.5
.2
.3
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
-413APPENDIX 4,
Name of City.
8. St.Louis, No.
Louisvi112
. .2Ky.
Total, Above Cities
Aggregate
3 Per Cent
Per Cent
Cap. &
of Cap.
of share
Surplus of
surplus of
of cap.
member banks,member
of F.R.
Sept. 2,
banks Sept. Bank paid1915.
2, 1915.
in by member banks
in cities
naLled
38,640,000
1,159,200
41.4
7,722,000
231 000
)
8.2
46,340,000
1,a90,200.
49.6
Per Cent
of share
of total
paid-in
cap. of
all F.R.
banks.
2.1
.4
2.5-
TOTAL FOR DISTRICT
92,670,447
2,780,113
100.0
9.Minneapolis,I:inn.
St. Paul
Duluth
Total,Above Cities
16,960,000
10,100,000
3 950 000
31,610,000
508,800
:
103,000
138 500
930,300
20.0
12.2
4.7
36.9
TOTAL FOR DISTRICT
84,704,850
2,541,145
100.0
4.6
10. Kansas City,17.c.
Omaha, Nebr.
Denver Colo.
Total,Above Cities
13,556,000
8,233,000
7 288
.2000
29,079 /000
13.5
8.2
7.2
28.9
.7
.5
.4
1.6
TOTLL FOR DISTRICT
406,680
247,050
218,640
872,370 ,
5.1
.9
.6
.2
1.7
----
101,089,245
3,032,677
100.0
5.6
11. Dallas,Tex.
7,271,500
Ft.Worth
4,300,000
Houston
7,250,000
Galveston
800,000
__San Antonio3 840.000
Total,Above Cities
23,461,500
218,145
129,000
217,500
24,000
115,000
703,845
7.9
4.7
7.9
.9
4.1
25.5
.4
.2
.4
2,759,759
100.0
5.0
TOTAL FOR DISTRICT
91,991,961
.2
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Federal Reserve Bank of St. Louis
413
Appendix 5Per Cent
of Share
of Capital of
P.R. Bank
paid-in
by membor
banks in
Cities
named.
Aggregate
Capital &
Surplus of
nmbor banks
Sept.?, 1915.
3 Per Cent
of Capital
and Surplus
of Member
Banks, Sopt.
2, 1915,
12. San Francisco,Ca1.45,185,000
Seattle, Wash.
5,390,000
Portland, Oro.
7,900,000
Los Angolos,Cal. 9,775,000
Salt Lako City,
Utah
3,280,000
1,355,550
161,700
237,000
293,250
34.5
4.1
6.0
7.5
98,400
Per Cent
of Share
of total
paid-in
capital
of all
F. R.
Banks.
2.5
Name of City.
2.5
.3
.5
Total, Above
Cities
71,530,000
2,145,900
54.6
4.0
TOTAL for DISTRICT
131,435,490
3,943,065
100.0
7.2
TOTAL for 1E/C3ER
)
Banks in Specified( 922,663,435
Cities
)
27,679,902
50.5
TOTAL for lEtaBER
Banks in all
Reserve Cities
)
( 814,999,450
)
24,549,983
44.8
TOTAL for COUNTRY
Banks
)
(1010,565,557
30,216,967
55.2
TOTAL for ALL
MEMBER BANKS
)
)1,825,565,007 54,766,950
100.0
100.0
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Federal Reserve Bank of St. Louis
413
Apendix 6.
LIST OF CITIES SHORING PERCENTAGE OF CAPITAL
WHICH THEIR MEMBER BANKS BEAR TO THE ENTIRE CAPITAL OF
THE FEDERAL RESERVE SYSTEM
(Cities are listed in accordance with percentage
of their capital in the Federal Reserve System)
(Rank)
1. New York
(Percentage) (Rank)
19.
13,3
Milwaukee
(Percentage)
.5
2,
Chicago
4.1
20.
Los Angeles
.5
3.
Philadelphia
3,4
21.
Indianapolis
.5
4.
Boston
3.1
22.
Providence
.5
5.
Pittsburgh
2.6
23.
Atlanta
.5
6,
San Francisco
2.5
24.
Omaha
.5
2.1
25.
Portland, Ore.
.5
7,
St. Louis
(lann ,5c St. Paul
combined)
1.5
8.
Cincinnati
1,1
26.
Louisville
14
9.
Baltimore
1.0
27.
Denver
.4
10.
Minneapolis
.9
28.
Dallas
,4
11,
Cleveland
.8
29.
Houston
.4
12.
Kansas City
.7
30.
New Haven
.3
13.
Washington, D. C.
.7
31.
Now Orleans
.3
14.
Buffalo
.7
32.
Scranton
.3
15.
Newark
,6
33.
Hartford
.3
16.
Detroit
.6
34.
Seattle
.3
17.
St. Paul
.6
35.
Reading, Pa.
.3
18.
Richmond
.6
36.
Albany, N. Y.
FEDERAL RESERVE BOARD
WASHINGTON
November 16, 1915.
Dear Er. Delano:
Yesterday afternoon you quoted a remark that I made
Saturday afternoon, in which you stated that I said I did not
believe any reputable lawyer would give an opinion that the Federal
Reserve Board had the power to redistrict the United States and
incidentally abolish a number of Federal reserve banks.
I desire
to say that, - of course absolutely unintentionally, - you misquoted what I said.
You had just told Er. Williams and myself
that you had consulted other counsel than Er. Elliott and had
received an opinion to the effect that the Federal Reserve Board
clearly and unequivocally had this power.
I, of course, supposed
that you could only have had reference to Mr. Cotton, and I said
that for the life of me I could not comprehend how an
eminent
lawyer, of reputation and standing as a jurist, could reach such
a conclusion, but I added, that I appreciated fully that lawyers
often, with the highest motives, reach radically different conclusions.
I had no intention of in any way disparaging Er. Cotton,
for whose legal attainments I entertain the highest respect.
I merely write this to you to correct an evident misapprehension of what I said and what was in my mind.
Very truly yours,
Hon. Frederic A. Delano,
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Vice Governor, Federal Reserve Board.
40,244z.
ik.64.4/Zt
e.14v.
#
14
,01!
Whereas, a committee was duly appointed by the Federal Reserve
Board on October 19, 1915, to examine and report on pending petitions for
redistricting and redetermination of Federal reserve cities upon which
hearings have been held, and
Vihereas, said committee has reported asking instructions as to
whether to report upon said petitions, includi.g others on which no
hearings have yet been held, or, in lieu thereof, to report a plan for
redistricting the entire United States, incidentally abolishing several
Federal reserve banks, and
Whereas, said committee in its request for instructions has
incornorated a general report in favor of such redistricting and abolishing
-1 reserve banks, and
of Feder
Whereas, said committee in said report has based its conclusions
(a)
Upon observations which it has made of the workings of the
FedeN-1 Reserve Act, but has failed to report what such observations have
been,
(b)
Upon certain experiences which it has had under the Federal
Reserve 2,ct, but has failed to specify what such experiences were,
(c) 'upon the adMission that up to date no conclusion could be
justified by the e16'eriences already observed, but fails to state any reason
for such conclusion,
(d)
Upon alleged savings in overhead expenses, but has failed
to state any figures or to give any facts to sustain such statement,
(e)
Upon saving in the cost of redemption and issue of Federal
reserve notes, but has failed to give an: fi; ures to justify such conclusion,
.
:
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Federal Reserve Bank of St. Louis
--2
(f)
Upon the necessity of balancing the panking situation and
making weak banks stronc, without citing a single instance of such weakness
or lack of balance.
(g) Upon the necessity of removing sectionalism, without detailing
any instance where such sectionalism now exists,
(h)
Upon the benefits which would accrue to the clearing system
by such redistricting, without explaining in any way how creating further
delay in collection of checks by enlarging the area of districts would
fac,ilit-te either collection or clearing,
(i)
Upon the benefits to be derived from limiting Federal re-
serve cities to cities where subtreasuries exist, without suggesting what
said benefits would be;
Whereas, said committee in said report states that it is of
opinion that the Federal Reserve System as at present constituted is inadequate to meet difficulties which may arise after the conclusion of the
present European War, that its present apparent adeouacy rests only upon
the fact that it has not been put to the test, the same being susceptible
of the interpretation that the Federal Reserve System as at present constituted is a failure, and,
Whereas, said committee has recommended that Federal reserve
cities should be made Central reserve cities thus increasing their required
reserves to a minimum of 16 per cent, in order to deter cities without
banking status from seeking to become Federal reserve cities, as well as
to increase their reserve deposits,
Whereas, said committee has pointed out that every real and
imagined difference of opinion of the Board will be taken advantage of by
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Federal Reserve Bank of St. Louis
01
••••••..
'
4
‘
_
_-
he critics and enemies of the Federal lieserve System, and that, therefore,
unanimity of action is desirable, - without disclosin
the facts upon which
the unanimity of the committee is based, and,
Whereas, said committee fails to point out the reasons which
have weighed with its individual members in reaching its conclusions reported, but contents itself merely with the statement that each member of
the committee has reached his conclusions in his own way; now, therefore,,
be it resolved:
(1)
That said committee report in detail what the observations
and experiences are under the Federal Reserve Act which have impeLled the
members to the conclusions reached in said report.
(2)
What, if any, statistical information the committee has
.../prepared to justify its conclusions as to the desirability and as to the
.
jossibility of bringing about the diminished expenses in overhead charges
and cost of issue and redemption of Federal reserve notes.
(3)
Whether or not said committee has prepared any concrete
plan of redistricting and abolishing Federal reserve banks, any such plan
to be submitted to the Federal Reserve Board for its consideration, to enable
it more intelligently to give to said committee the instructions it now asks.
(4)
Whether said committee in reaching its conclusions had in
mind the opinion of counsel of the Federal Reserve Board that said Board
had no lawful authority to reduce the existing number of Federal reserve
banks or districts, and whether any legal opinion has been asked
or secured
from other counsel of the Board, annexing a copy of any such
opinion.
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Federal Reserve Bank of St. Louis
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Federal Reserve Bank of St. Louis
FEC;7?A
1
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3
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q.
":horeas, a committoe vas duly appointed by the T7oderaiTheservc
Board on ()ctobor 19, 1915, to eccanino wad ro:
lort on :),. Indinc, potitions for
.
rodistrictirk; and rodetermination of ',.'ojeral rosary() citios upon which
hoarings havo been held, ;d
Vib.oroas, said committee has ro2orted asking instructions as to
whether to report upon said pet .tions, including others on Which no
hearings have yet been held, or, in lieu thereof, to report a plan for
redistricting the entire United States, incidentally abolishing several
Federal reserve banks, ald
vihoretts, said corrmittoe in its requost for instructions has
incorporated a Goztral repart in favor of oath redistricting and abolishing
of !, oderal reserve banks, and
'
liereas, said cornittee in said my;ort has based its conclusions
(a) Upon oboorvat ions which it has rude of the vParkings of tho
Fodor].
operve Act, but has failed to reFort what such observations have
- boon,
(b) Upon certain e:q)eriences which it has had under the 7odortil
Hosorvo i.ot, but has falod to :areal* vhat such ozocriences were,
(c) Upon the &mission that up to dato no conclusion could be
justified by the exnoriences already observed., but fails to state any reason
for such colelusion,
(d) Upon alleged savings in overhead expenses, but has failod
to state any firpros or to ;ivc„ aro facts to sustain such statomant,
,
,
(o) Upon saving in the cost of redemption and issue of Irideral
roservo notes, but has failed to give vp,y fiL:ures to justify such conclusion,
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Federal Reserve Bank of St. Louis
(f) Upon the necessity of balfmcint; the banking situation and
making weak balk.s otrorg, without citing a BiflflC instance of
such Wea1).1200s
or lack of balance,
g) Upon the necessitv of removin r; sect ion:11 ism, rzi th out detai
ling any instrnee vhere eath emtionaliam now exists,
(h) Upon tho benefits villehhwould accrao to the cleari
ng system
by such redistricting without explaining in my wv how creati
ng nuother
delqv in collection of .chOciks by onlarGing the area of distri
cts wsuld facilitate either collection or clearing,
(1) Upon the berpfite to be derived from limiting Pedore.1 reserve cities to cities viler° 3ubtreasardea az.ist, withou
t sngoctinf whrt
said benefits maid bo;
Whereas, sail comittee in said rTort states that it is
of
opinion that the 1'ederal itenerve 5;fstan as at :resent 00 netitu
1
ted is inadequate to moot difficulties vhich moil arise after
ttr conclusion of the
present 7.:;aropeon Yar, that its present apparent adequa
cy rests only upon
the fact that it has not been put to the test, tho same
being uasceptitde
Of tho int orpretation that the Federal Reserve System as
t
at present canstitut, is a failure, and
y1
Vaoroae, said comnittoe has roccomaadcx1 that .'edera
l reserve
cities should be made Caitral reserve citioe thus
increasing their required
reserves to a minimum of 18 por mitt in order
to doter cities 171thout
bailicing status from seeking to booDmo Vedoral
reserve citioe„ as well as
to increase their reserve deposits,
valorem, said committee has pointed out that
every real nl
imaJ.ned. difference of opinion of the Board will
be taken advantage of by
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
4.7.1
the critics and onomies of the Foderal Tionorvo :.lystera4 and that, there
fore,
ananimitiy of action is desirable, - without discloning. tho f.
:Cta upon which
the unanimity or the committoo is based, aryl,
7,horoan, said committoe fails to point out the reasons
vilich
have woidhod with its Individual menbers in reaching its
conclusions
re-
ported, but contonts itoolf merely with the otato
ment that oach member of
the committee has reached his canelasions in his awn
way; now, therofore,
be it resolved:
(1) That said ecmdttee ropwt in dotail 'What the
observations
and ezporioncos aro under the Podoral :eserve Act
rhich have impellod tho
members to the conclusions reached in said
report*
) 7,hat, if ciy, statistical information thc commi
ttee has
propared to justify its cane:banions as to the desir
ability and an to the
possibility of brineAng about the dininidhod expense°
in overhead charms
amd cost of issue and rodomption of Foderill reserve
naterio
(0) V4hethar or not said com itteo has prepared amy cancr
oto
pima of redistricting and abolishing Federal reserve banks,
any sudh plan
to be submitted to the Foderal Eoservo 3011.P1 for its
consideration, to enable
it Moro intollicently to jvo to said committoe the
instructions it now asks.
(4) Yilothor said committee in roathing its concl
usions had in
mind the opinion of counsel of the FederA.
losorvo Board that said Board
had no lawful authority to roduco the exist
ing number of Foderal resorvo
banks or districtn, and uhether any local
opinion has boon askod or securod
frwil other counsel of the Board, annexing
a copy of my sudft opinion.
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Federal Reserve Bank of St. Louis
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
-3,ViD FILEJ
111:11AL
•
TR EAS( RY DEPARTM ENT
°
WASHINGTON
November 15, 1915.
My
dear-Governor Hamlin:
to
Will you please say- the Federal Reserve Board that
the funeral of my son-in-law is expected to take place this after.•
-• •
•
.
•
noon and naturally I do not feel like attending any meeting_whilp_
that is in progress.
Moreover, on account of the illness and
death of my son-in-law, which delayed very seriously the preparation of my annual report to Congress., and because of indisposition
of my own, which has kept me more or less confined to the house for
the last ten days, I am at
he moment under very great pressure to
complete my annual report and put it in the hands of the printer
before 12 o'clock tonight, as required by law.
I am allowed by
law until the 20th instant to revise the proofs, and this will of
necessity consume a good deal of my time until then.
Moreover,
there are very pressing questions in the Department which must have
my immediate attention as soon as I return to the offico, which I
hope to do not later than Wednesday.
It seems to me that in a
matter of such great importance as the one presented to the Board
by the CoLurittee, of wriich Mr. Delano is Chairman, ample time should
be given for its very thorough consideration.
I received from %:r.
Delano at 4:20 P. VI., on Soturily, the 13th instant, a copy of this
report.
Governor Hamlin hr.s shown me a copy of the resolution he
offered to the Board this morning, cal.ing for additional facts and
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
information, which it seems to me are so material to the issue
that they should be supplied by the Committee for the consideration
of all members of the Board before intelligent discussion of the
report can be had.
It is obvious that every member of the Board
should be supplied with the fullest possible information about this
matter before it is voted upon, and I presume that every member of
the Board desires to be fully informed before taking action.
How-
ever, I am unwilling to be put in the position of asking the Board
to show me any personal consideration.
Since a majority of the
Board has already tabled the resolution offered by Governor Hamlin,
I wish only to say that if the Board determines to act upon the
report of the Committee before all the members of the Board can be
fully informed of the facts upon which the conclusions of the Committee's report are based, I beg that you will record me as voting
against taking any action upon the Committee's report before said
information is supplied.
I suggest that this matter be taken up
on Monday, the 22nd instant, at which time I shall be glad to attend
a meeting of the Board.
I hope that the Board will reconsider Governor Hamlin's
resolution and adopt it, and that the information therein called for
will be furnished before the 22nd instant.
If, however, the Board
should decline to reconsider and adopt the resolution presented by
Governor Hamlin, or considers a week's delay unreasonable, the responsibility, of course, rests upon it for such action as it may see
fit to take.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
I can uee nothing in the situation which demands hasty
a for thorough, deliberate
action; on the contrary, I see every reaso
and dispassionate consideration.
We have ample time to treat this
importaqt matter ia this spirit and with this purpose.
Siaoerely yours,
Hon. C. S. Hamlin,
Governor, Federal Reserve Board.
0'
Liovember 13, 1915.
rtf confiOontinl.
.......06.1•••••••••••
fly dear Mr. Delano:
On reaching my hotel toni7ht I find your confidential note, with inclosure of report of your committee,
.or Alich I thanh you.
I had reaci, in
of yesterday a paragraph to the efect
Washiston 3tur
tl)e rederal
Reserve Board contemplated_ so
ralch action as that proposed
by your committee; but, be
raewhot incredulous, I called
Dr.
il1is over the 1 1;hono lr.
-rro-,erly might,
hO
reing 'r,csurst thr
night to c,scertain, if I
he iubliction
d u, real basis in
it hr-A., I today prol ared a state-
the right of the
mont for the newopv. ,ars in which I chrllenge
.hp,t Ic suegested and comment on the reason as.rd to
BoL,
or for the meditnted 1 -Tocec1ng.
signed by
Fowever,
tation, I am
r
aside IL- em my utter distaste for newspaper dispu
the matter just
otherwise dissuaded from ublic discusion of
moment.
You hrNe been no conAstently Gourteous mCi corderate also, th;)t
)
dinl to me, my dear 127. 7A- lane, and so conci
view thrt
it I)A.ns no to liflre to disagree 2.7dieelly with any
al reyou e::reos concerning the aamAatstration of the feaer
20 strongly
J
serve s- T:tem. Yet, the very fret that I have felt
impressed by your
drawn to you and have been ro confidently
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
e
.
ccrnent dovetion to t11c
tly,.e l'!opervo .t.O
L,.I.Torr-Jtcno
rt
e
v)ith renTect to te conrdtteo - ct,o
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ork
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hinall0
h1 !. fery menbero o
.nc -nd
011c c Flr..±4
ionrd Organ1.thr,t to
Clirvonezi k3onnittee %-iho hood
m
it the - ton -A t the rlairu
.
.
C011,14 tteo won1-1. t: tra
.
1 7 ni;4 On
nr7 the •i7exa:ri. few !limbers
-lumber of recion-1 beals.
o::: eithcr brnnoh o
Congor1
o7sagf7erntion of the re
riYster) 77hich roocive(
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cl.t 4 .-t there mu raloh
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,
r. -it- rburet B "Lipine
criat corr. ider.t!on; iv
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pltoonoolvea
now ntly not 'tor minted "Go trw
lc:2nm
recervee or 112:Ing
aonrb1z !once• trtAtion
c rc
ttention outlAcht the ower
banLe. I !An:
ibra.
ratr
1-)flthe
number
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of the
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-rt *.r.'ron every othThr
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ity for .Lieh no dcf
Crtaurtv/.tioii o nuthor
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oil'vend I1...aow it 011.10.
, to-t of to r'et
fona1 in tly
1411
o too ho
r7orr:lon of. thr- intent
,
ri21 ,(10(1 thc.
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Federal Reserve Bank of St. Louis
ourrincy iiil, r
oricirr .12.y
c0atyin0
?.ao rofc:;:.eAoa
o 1;hc
licit Ion
'eyon:1 'GP t Involvoa I
t111.*.)
ro r.ervo
h re 7.,. tine to the cZ rtor
n,rrn
bnk, Mob couV Lo tcrniz‘vt&I only 1.),y act of Con-
o
,
v1017t
Gro op or
1.7 no
Ofbo1nr
i; 0*
Po tO 1)('
rl-oolnl intoroci;n "
tion to
2.0 vicloil that
7.
tho
of
rrU ation
Of
,:u1;joc-
or/
r3Cn!or1t
.
tr.do - 711.101".
tri2t sir11!2
no for:If:v.i rca
nor the loc '(;ion of
c C
o nod tf)
oo ntr o1 by
Oz**127:;2111
re f3Ca'7700fill. !:*0
.
7ere
tit 4-
1'0 - iCiOnt.
:
the ,jo7.-71.7 tt 0 oo bitt er?,:c7 0
n woo 21c
,1d.
1rim'.
e:.
z.
co-- 1 rocierve
NIMP•
of .1;hre
urths o
re riber lof.laLa of
t
eh
•••••••••
ohyrtor-11
co nil1et wit
tea tho
t
•
tho • di)
:
170 0
air to Connittoo, noting the comaiet, 0_171 Trz-
ne,riftneyit cited;
VOtee. Of
ni on o
'
of :I:ow "I:r!.nho nrovnilc in the IjO1GO COM-
,
o=CO ty.!: t?, r- •
tt00
1-To
0
0 CO .11'.0'17.0(113
2
on, of two, oonouTroJ in thc
for 1;hc reason iwno atea
70
r; 1
the :corri
no(liiring
Porl.ra t'-uti-ority to "orotybe nevr 01.tw1etc,"
tto torn by innedirtely
nl oloarly inalering th.2.t the notlue
:
ric::; to bo 147 multiplio!- tyion,"not to 0.7.icee0 1;=2.ve in t11."
.
.
nalliat0"aoocns t mnn to "(10(::)20y-
net:1z;
d not give,
,o, ,1 - 7/Or
oven bY irOio:.tion, nor Intend Lo rive, the 1•, r, 1)0
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
to
reju
,
lo not, In ny b lief,
tho numbe:.A of' brzho 1".127 t croctod.
rij .tifforont &.1
:
clotion Ia tty.. oat :or
o vcctico o
Cert-10,1,7lThoro
;Wit3,..0a.
iotci
,
:
:
lc no .- nnot-iit of ;- utLo:eity to "p.boliL- h" 01
.
.
33a."ort'od oi ttlo •L.0: .rd to -re, -lust" tlictriel; iftnef,
in thc
tTtion
COrT,
•1'01;0
t3c
allo be roncozrIbly
ttco in loc ;112,r;
Into
01-;.: of the ,),erii-
roviow," i:kcon a !,o32., thc,
0701 to
or.la the
Cti;.tricto, no
raoLn 0tinot,
likadjuotrxmt
to "abo3.1.011
ho
onG;reos ..,1.on(- the
.
3to
rotioa:v14
tion 7ith 300tion
tion, r.c it 3ocr1L, to no,
Inter
right to a col-ire bwits•
ntcr re!r '61on
--t; on,:bac: roaa in oonneo-
jie,vionla b
.r200, ctcndli
if° otch
no.
hrcce,
2
tio otr41- .10a con tzlaction
over c,arlIbi
00t
not 'cie
pi1e
no , iotrb coninc in . 1. in
L:ion o± tho act
f
:
n. char, conflict .1.71th the ciatztol.‘-3.1- o iLrov0121;
rtion
1nvo1vin
60E1 in
tc fej.orr.A. re:ix-Tye LSZ/0-1
Aloh rcIon to Lc; recrrdoci, in
the • or. o
"270 viow''
the Ortg,t..411.'lition Oovn ttoo ao to clat?.1-t;
rc taw,
b1:1
h-a. be on,
bofoe the 1: • ilk pro rocoa to bo eboli oho
.o1or
U01.1:
(2)
,i;str2ct
merit of & re (asni h000)vo 43nk"in o
tir
o. the
nflounced
-1.0
( ro ulna. by VI° ci,ct, itt.;o1
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
-
i cantrou.r.4
ny
.
chould h .ye boon. tra:on (1) loc.fore the •.ocrotr
wie
or
o
'Titled 15y
•enqyr.
uo
CAL.
aerwm.re
C
to
4 5
.
.c-Proviclionc oi. thi:
undor
aiiiirmerrime•
hove cold, it
rn, never inteirTha
tern° phoula Lear un:,7 ::uoh eon truotion
,you-il QorirOtteo
,
•7.1.c 00t1 o
1n
wh-t tnnetion o
u o
tho
ord.
oderP1
I
log4 L tlon intonaed. to wit() on t
a
1a
Lin
Antoci renron
-
''-
no: I: 1riornoo
not
hotel, hero flocurlont
I
rn 7.7riting
r,ro not, ry ilrble; 'but, in
eorreltt,
:o-rOOM 10 rimakirTit evilence o:r 1,lio
the urchlveo
inn
o 130
the nn:.. 1 urn 2iuribor of:: 7:02orve btlnko-
t T2:7
..ind
oonten,lotoa abolition of certf- in
re carve 'w n2.:f.3•
,otily
br
11.12ncrit from the
nd I t
i::143
ovror t
,
Oorrdttoe': nrcarrit :Tor the
gree
oribocl. to to
iu
tutra *tv,t the
et tut° book.
you ht;ve t
•
'o:,-..-eovc,r, r,r,nr,
c loqicr nor
• ne; therr.nf,cer a of the
(ro . onento of the feder.1. rescz
proi,ocod
n
but
cdoi.t in the interprotr,tio:a
o
hich 1 fear
not an12.10.1t1z; scs.y
then,
S'or tue oT.tre,orainory .0.t1;:1on pro. 08°0..
ny oil u.1 L:
th
-t
therio
,
w.ro - 71th
0:•;et corn Ii tiona nrre r: liod to
.
1Irot one of the o:F.1.1Aing rorci-vo 1/-nl...8
ue tion,
- .one dollt,r tuule7 the oorirattltion o: 3,robt, b1.0 rer;:mr.:00 rrd.e 1,-y
..:--11-aion o:;" r000liveo
0 thor ,'b.c1 boon no dooent-t
hlch Conft;rocto (loliber(toly
jo not 1.!.nov-i with
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
h. ,t ov3.en
d° your kiorr.itt co 0.--n
,
eo- rrrio I
or .1.4.y Ito
dowel*
,
cupootion
O
t ..lonr'Tenn 1ii mong in •.onnorl'Anc,
Pna 1;1,10
nie.wation Cornitteo in eciitrbilxhine.:, twcave rocervo brx(13);
but I omnot in gine tITI; 1
reirstoc
o 1.'.ck o
olf ono or tho roneri.-70. be-xarm
the cIll_r:vr
nbolinhod bo rocornondod to tile 'o,
it
cugzoct:tons to Coirror3F;
7,7opeof:ef" to be
n
.;
11
.
`'irrnifinont
to th
include :1;1-1
Toctrn3. rope:eve
-7:'-2
urn to rx- rib, 1)::n2:n of 45 mr cent of tho
act cuthorir:ing
non:4ri1y rxrcti1cb3.0 .0
,
1J).ottli;le ribo , thuf radior:'.31y re1uo1nc
the cf.)ital rofourceo o
the bn.n.2:0 Ittrtbermoro,
1t
-;
t in t1:-. o
to rrle the rcnoureos of ntrong bnnkr
of the
It in t.), coraljoto, not a
fid ..oaLor bolahn in tine of (Amen.
Trt'prkentary
:
row ay.:ea, boorune
0
IVOt El.
-l
cm3. ot thinl:, eithor, th. t yorr evidence rel2ton to
the retmon given in tbe 11-011,1nr-ton :Arr i'or tLo
oorttin bolika
,
41-4
to Vic al"I'.evIL 4 6 "fora- o:f! the b r nh
1:or tho onartor ondin3 ;:iettniber
the netril.rdstrttoreo
rota-J
tried to
to orn
ond•
bo1it1oi
onoon•
O.
You 'Lilo':
eds.rca a:cool-ye
nil I know thfI
no h.:Iro not
iihe contr.rj,
.
trieel. not
onc,op; to ny 'Lnovaodt7e they h.n.vo intriguoa to thin
Ana tilt- . to me i
not ;')! -t;on1ohig
or f7. member of .:,;hc ,TVard
z7n1. cys yovo cor----11ttc0, our mutual friond
roclineil tii;1; ho
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
lort roney•
.
hnvo boon - t ..r:11:-TIod al thcco
-.7-.
they ort:i,?1100,
o::L2-en no
•,.111110 I
-
o 120'fe.;
i
o to oconomior, of till- ViOW, I :11 011.00rfilily
to clonoee t7 .L11;tJcrc
i
noinr, Allister
20 t3C i XJ r•J ,71Z
c dooio
o rcool, tho
r:
c(..Alq.71)
.
o orcl. :::ocorve Aittrit a cithor thrc
ho1i t1c
toi:tealit to o...),nfor,
flx.
hostility to Ift.c
* wain :11y
,r-,„11 7. if tho
o:'
or by
cdc.1 rcloc:rio rot m
b0
e tj to -1-,o1:1J111 oe:rt- in
have 110t oarnol
•
'...,•.,..z.burgt 13 avo *
will be L.3J.-Itoil)
1)7.../3,21).
um-tr.
1.
rocorvo *tg. r11:a boo'um
LteI'll:0 it
caor1 rof--,rvo cyot
cat77,ray floolro
,
o.orciio oi nt ority
a hsic clool,!'Ja•at lop.;
4k
Ct
11
tlyy
coif Ole
f;o1 to him f7.-nc1. to th,::
. —,ora
of
1;1112 bollof' \.,i)
failed to
ogni°ea
hone to
'ho f.:Leccreattli;eil by
ot t&t tilt; orr& itr.iolf
It.
e iiioo:i-
rouler tLC pert3ict oat
ut, into o -1-, rat:ton na.•t
•o
rovI:!.ono of tht:1 foiloral reriorvo rot
nombor of tho flot. r(1* I rrunt Etfl f'117110
,
act:ton !..ro 000d by you:.'
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
y
h1oh wero inton oa
,
onr.ble the foiloral r(., fiery° 1.xml;c3 to 0Cra 01:r:011300• .:'r1;.1.
o 0Xfl 0. on3o6.
?liui
IQI ao
771.11 IoIV could orrllo the oo
It in 1:1;e7 dclii itc jticirrn°tat th-t the
:
,
*. IS' tkcn t this tine
arouse r: spirit of ferment
.11(1 of bitter resentment in the
country, espocially in tiTc 1...rge section: r.- .ffected, which would
, !
• si)oedily be re- :looted in .%ration
I
I have fr-.117.- .ly
.
Congreps.
!The d • -•
-,rbur
in the hindliert
spirit of sincere frientlohip th:It his concept sis of the fedora
reserve system as a purely "emorgen
..orcir;n to the
of the
cirnin.
the Oongrons tIrt brought the
nov.)r intenjed by finybodur
inztitution i
ion , 7ch rc...eornended
.
em into being.
ird cny effective
coytion s. 22(1 I.,v,ssago o:;_• 1;1
!
hOull be
:holly
It ',;ns
2.-t in the in-
thr:t these
ractically moribund, for nine out of evcry ten years of
their existence t
or to rr.trieve
.
only be ..ut into
(dtion to 'aave a situation"
clicaater.
If,
.-:o mint a system of that kind. 5.7e cn return to the
hyurid 1Treeln.nd-Aldrich scheme, -hich
the
oul
eav.:b1( m to t bolich
,
ederal ionrvo Bov.rd, as t11 c.:-• the 2ederal reso fve
-
nd con,luct the onterfriFle from a corner bureau in the .2rwlsury
-i yan(i.inis•
I htivo mioecd th't in the - ederal '4- escrve Act we
hr,d institutor" fl greet end. vital benicing sy;stem, not merely to
correct or
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
.;are ;:oriodical fintnoic.l uob-uchos, not simply
1
t1.1
1v o1,
(-; co
t. nlIng commilty
scourItyto
tualtloc,
tri
I.:10110;
()WTI°rLon
it
o_. or-
0
to increo t10 ccitt;)11:110:3 of o11.2.- iaTur.)r)fl
iicJiorr
0Telf);.n
ion4
yet to tilink that I iri1-ro r-11;;,..c.;onoo1vod
I hvve
..-.rto
oto; fn1, 4v1;
vthich
to
CV-
rftr Oatc Crt
.10
(117 0
to foCtorta r000rve ,wotom, ;111oh
tooR. tho
ify;onco---in
hoci:
poco oncnio•
'„u hc:avt-11 o
ac.
laf. ney
th0
`11) ric thi
„
re c:1 111(Anon
nd' g&e1
1
D- 5:1011.:;ly
3tr.7,rtling.
fru do
i. i)cliove nuoh
,
ublic. by 'Ulf:
‘
thr count.T.iy to t3- c e'oint o
inc;tntly.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
it
'Jar in the hiBtory of the orath, .4.11,
,
r.),n(1. E trcacti", be Gr VC
a rein
Etlt I 0
crept lii)ortu to fttggeflt
oa. (Er ito
oill.Toak:-n
h fly won !rut,
the ,r.)tortriCiinclntin
oo th'
• o
'7:1P;£)
onre:t
#;; t!'( vcry v.'oc2
,
riot
le;•
ii.ttci
dl otinotly agp,inf. ray
.t
ll
hou. lone
n
7o the courtcoy o•
L
woroo,
(*ncluilo withont tr4rirkg
I
th n 1calrooEled. to ocky,
:.itton ton
r. Del no, hen I
;our
to
I telievo
tt)on onaotivor th.rt
,
ler,otor•
oderel ioscvo
nniO, nr1.
ut n eiroL to entis r7rico
lt
no.
ould :,:;31/11.1; in i rical-to dolfut f-ala
I qo not c.t '11 pz,rt1cii:;t1to in ;Tom.. l'oars.
o Irv() t grcr:..t 13:71-L urig. cryten t
I
0c
s
ov',itricif in 3:.rcr.-: floor:Algivo
•
'
,
-II ohnoe
tl
rct uf:7,1
ho • .e to
•i..)cy.-Eore
'caw
Ottla • :1J.;
I
lion. '1. A.
odor.:1 ii0001 0 ocra,
7
on, D.C.
',1coh1
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
ho
r :It
n
f,1
2:now
ter di -tincbe
renter'
clircnont
r...bic to 1.1-
:jc-c.7 York
corairA
tho: c
121 c:ontlano
n1 o'; or: i;(- it • it12 (3011:fla CTICO •
i
tion, nor fo-: ozzz oott:-.1t17 fl7
in 1;11
1iic
1Ottc:
t
itton
6,r3(.11.11)c
clid to '.A7.1
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
De -tr
,
r,5::`Dercit
fc,r yQur informati071, a
I encl.:
,
i.
.:orz:cIu oL n inti3rvieg 71 hich I had yaiatarday at t..i.rnoon
ith Mr. Parling.
:-ev.torandu
I h -vi 3,2Jt
confims n,y r:oLliction of 3T1r
to Mr.
,rding, 7ho
I told him that I ,
,,hould ,1.:1.-:.!, t li.s ni: A,t) you, ',And Iva
:Asked. if I ,Tould not, at the 3arze tit, be 33 good :la to
tell rou tt, 401.en llt. call:1,', on 70u two or 1- 3.33 in-lnings
:
ago, h3 carrie6 ,vith him n. on:17 of. tho ,:onitl.tt-- fits r:Iport
4
..a.nd map r:hoqing the propc3ed redistrictin. --ith 13.3rTrais—
:
aion from thts coratattee to leavo it 71.th 3rev,A for y.,ur
!
inicrwation; '.:--ut that ht fund you so conc,--.rried over the
-1
illness in the houtie, ha decider; not to in*:mo t!Ii7.•
matter upor ycur attention.
He eta.tt--.3 that he no.1 has it
in 'rlis ' ek, lx.i. 411 '03 1110i.15C tt) ecnd it .,..o yeu sould
*
.
you e•A
to see it before it LEI submitted to the Board.
mixt "risk.
Personally t
rot 3•:*Iall 0:IA11:Jr the rerort or tho
Mar..
Silicer31y yours,
(SITTLeC) Jr
Hon. 1k. G. McAdoo,
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Snretary of the Tre:snry.
Novenb.,r 12, 1?15.
/47240PANDUU.
*len Cr. litr!lykl: anA I )114 di,
;cuos11 amsth-ar ravitr yeat:.r4'7 .ft!!r,
Lcon vM.ch ho h1P1 cnlIel to
I took tha liberty of ftskin,= him ho-4
ae.tteri ntood
t!in como.itt-o whic T-t1 conalierin7L tht nlbjeet of r•Ililtricting.
Ho said th, Lte rnrort 1-171 irlot rt ban
4
but thqt th9 comrAtt- would probably submit a prclininnry rnport in a fiy4
, I-yn;
I nlorator)1 that it wovl! Irobr,bly be hnnid An on Uondly.
Vs then
wet' rteatntly together thc Fro° in con.. of the
situntior, tho arguentr, vbich he thought !1 er in f-vor of rIt../cint:
,
.
thl numf5f Fatierl Reserve FInnVe from thn 1,
resient numbm- of 12 to O.
c! id
A
tht thl princirll tr!ulontft in fvvor of
etaller numbr of t.1 -m4re:
,
7,1
FirM., by reducln
c:f br
,r1:4 eotle of tho banks now unprofitble would b
iiirte1An1
cxwc:1- of th.111te!:, would us lultlrtelly roluced. He thowtt thIxt
•aystom Vr.!%1; rAwa on to ,
!
,ttach if it'
enomi, *roll bo nble to roint out that eone of tho tnat,
were not e,
rnir4;
nni light ehr.me thnt to thin extent it /its unsuocseaul.
Hi
thought tIvA by re4uoiln th nuribr of bAnkl that it oull bitr
zir for f7,11
of the bnnkg to err! 1tvn
n tir stock.
Thc second rf.m .,vhich hi !)rentoi w-e thr3 by reluc
iu7 the bank
froN 13 to
nrJ rluirw,ino th iitricte, tele 8 bar13'ou1 iitv
tltrgor
cr
,OLItl r1 lar&:w e.oects
would owl”re or fvor-!bly -ittl the big sem;
ter bmnka in their ref;rective liTtricto. R poiLtl cut,
a3
roval, 'OA
ttlr:1 "t7.3 onbiA. in. Yiem CrlolTa
tank ir Dallas, o.nich with lerser
p,xcletc thin t/o rvviroct1v4 Fell,r11 Rq .crve Bulke in thozm
.
413tr1cts at thia
tile; 'Ilea ert
othIr iistrictvl rhers menbmr bsnka ev!oedel in oat ett
, ,
,
thl Felerra Rew:rv, Ennks.
'
told
it,centrtlIze th
rolot „iistricts
,nito uses eni at
,
trm, Ihicb blvc.
hit: that I felt moro
Vinr; !!!v -,-r th-7.t it
wi, to
,v
ftnrneIø1 re5our,.'ea
.
thivc country Finl rtn!ko it Imre cr.,.my for
in rroceAn of Jciv.elopvent to secur, cono7 nth. for 7,
2
,7-tireAAonlblo rt,a rathpr then nt the 1 ,
tvy rartortiomt
p1.5.4 in 031 ;met in so ftety differint
Ha ropliTi thlt .1vlomqvc1:7tior3 cov!1 be smcuri
stro-,11t
tnllatior of brene bnn tlmt it
contenlmted thtt if thl
at
Dall3, Kinneepolis, Kanals City nri Bonton shoul
d 151 elossi thn.t
brana
eltlhlished ZL t)lci”e olticslwith a ne7v brink
in Nev Orv!”10 ha tht„wht
,
rropor rlaca for R reserve bank.
He expel tht he thouht it very lovirAle
th.-tt reacrvo blmko !?ho11
be lovAel in nub-trelwar7 citien n1 ointe1 out nn a. 7.rinc
ipn1 reon for
this t1nt the SWI-Tr17
,.nurart coull be th',. lepolitariee for th9
Federn Ilcs.3rve
Notne, etc., In' rolivo thn Fa3er71.1
k7antl of the respontibility mna
cuatody of $o
tillicnn of dollaro.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
I suivrette1 that tIle roderni Reaerva A-7.ents -ero probr,
bly
iosTable
•111.24Ik
of ret, itz, tJ ctistc!iy of tieett not
f.in
xl thl Suh-Tre-eurtre, re a rul
e;
that vhen thiflAininivtretion cws
in it Nun 7 that then)!.ero
numblIr of
Sub-Trersurers it office who ,
lere not by ,
Iny JToane Ten of as ,t.trA
&Ince, trttIning
,
r1Tponeibility zowifi of or Fed?Ta
l Rezervl Ant3,
mulb ?I Ur. Ingle t:f Riehrond.
I ',,,ntiorr to hS. tt t71
,1
1A-Trews:
ot Gar Fmreiseo, T,ricr to thieA
ttrto,7'1:3
ttzml
ztoc17. brkiklr
nnlh
used hi' offisinl rovit!on to riv
rti, hit borl bu3ina!ll, o01
41
9
r cor!;17
,
He sti.1 in rly tt 'Itttsvr
t'r11 Su-Tre,, .ryizrr=! nt an':177rmi't
.
tb. t
ner7o A.?yyLta,
1?ith th
ub-rrtntIrlr, lt , " be the Ocivrn
.m1
mint tt
hot thr R4eerve Bnnk4 if anythin7
&Qu
0rzn!1!7:.
nv .1 ability cf
if tl.:a inww -k ;La
i roanh10 ni
Ho call that 3 1 ooiell r.,,lec;n
;
,
for reiioin thi numbr:r of ban
thrt therr ItiTht 111 more bler
ks
nr.14
12rIctuse tlm nvg:lrve Act
nooh Fl55J-pl Roaorwe Dnrk
f.ntatiLeh .:malghoz". ittho tumbn,r of !mai oui.
octsier to (=Tly
thll proriaion
of tho
I Imic!, *Iltprov!
1t
,
Th ihu
1P telnng,u1
)
,
sr9.01 Fo4rel Rect
m, to real
1
,rvr,, Btrk =J. lotablith hrt
newsl e?
thot tlo.A1 rmdutpI new pitu ,,tio
r.*
Ur. Hmr3inf7 furthrwort em,1
1 trt 'sf thouir:Itt fj,-t
colmtry irto P iietriotI To7le
!iriliw.; the
eizTlIfy tba r- ettr]r of
tlent! zr tho collection of
,i:
I toli him th.rt I
urm144 to 39t hor. t.M;
fAtcomplishoa. I tali him tlm
mIlt be
t it e?.”:ei to etntt
1rr
be delnyal, it A. 4k, ffl.r ett.
':v1:1 ellrttitly
.Tle, in rqltn4A Mot!
,
ualho1h.avt to
lona n11 cheek. thrtue:h Win
rolt1 to Chiono,
4iat.wt or 4
$piditional r-th.r thn hme3
r S110
thlm ohlrT4! r!irectly it t%,
! MirinNApolie
bmgk i tht tnertoree1 lintnnce to
Chic,..gc involIinz
'1t of pr•ctIc'117 ozz
more fitny from points in th(! wlti
,
,r71 portion of th.1 liltrilt.
I toli Ur. 1114kr1in
tht-uht if rt rr7olit5.on elo;;
'.1
t!)
''.;rolight !orth.4 elArletl trim 11 to 6,
tlIzit it -1(11111
Nbout,
n ffs7ht in Congron'; thett
1#ntern nni :%utb*rn Eamtov3
siett,
,Alves of the d1ltr4 ete to be
ebolIlhe_)! 77v:0.1 13T: tpt to pr-tna an' 2p7- re.
t atronzly
Ini deuen1
Irorr nrw lt thrm en7 thzt. T hrvr
ani
3
bqoro acquieleinr, in allei
th10
plen.
Hid he th,
7m7ht thTt rt prorolition to r*d
uel
numbr of ttcl:
enA ervo f:rpenveu roul h4 I./sleet
ed by “ror,1a Iv lany -:leetionc of
thA covz.ttry,
th, prorolitions to ttack brIttzl
3t
or criatini fln,ttai:%1
:
:
vn, rr_Ily received tmeh mrrrort frorr the., reo
:
rle, on thnt
-o77 in.frrmt: t1Li
ret0.4 e.prrovl.d the nyate-, It worl
thtr1111
d be
vot
ought not to In orer!tvi to secure
vst7s.
I expreweel ay aurpriee rt hi vievroirt ez to
thu ey Itqz..0 lack
,
of poruIrit7; revrrteed tbv, It
t
tme oontr&ry to -.4 obaervItion
J1,071ent, (?
az4 thrtt, it my
r ,
?mnt of t
erle in t‘rIc amntrF r,
7:Trrie! tbo
R4Icrve Act .1
,
n rrtrt
!!vccnrtt.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
-3—
end ma hovinz 'ocen of tremonioue ond eopscial oorvice in tha poet year, which
hos beon n porticulerly critical on for butinroo on< finonce.
soli, "too, but thero ort P. gront many lioostisfiad poople
impocunious oloolo oho ktve boon hoping for r long time for o tyltro
ohic'o
ooull enoblo thoo to r3t, .monoy on unsecurod or unotouni notes on!! obligetions
but thio oyotom, of course, lino not enabled such peoolo to get the tccolo7
ola—
tIon for Alc -. they hovo boon clamoring, oxil that thoroforo
peoolo oxo
ooinst thio oymteme, nni thot thsro wero
zreot oony otorlo throlohout tho
country whb ht thouoht voted join this cloAs of !..)n in donounc
iro or dooreorit—
ini: tho oyotto 1.14 it now stntle.
j: I thouglit that the Lloa=ri Senators oould be Art
to appooe
tho abolition of tho Kanomo City bonlo.
He sail he thought not; tat
Oenator Reti Isom cominc uy for reeloction Joon end thot he
.
o
owl! not soo likly
to onto,vonlze the imoortont bankino Intorosta in Er_storn
Miosouri
oloht
bo 'conafitood if the Kansto eity mol St. tool bonko ohool3
bo
Ho oeli„ holoolv?r, thot he 411 not want to take rart in
any pion
ohich ofoulA emborrass the Alimitiotration n1 thnt he
olohod to aly to rro,
oimply so ;Tan to man thot thin mizht be done -first, thnt the comoittoo
should film ito osperi proliminary report,; that tho matter
ohou9 thon
over for
foo
,
tht Secrotory :40oloo
bs given An oprortunity
to consider it.
Tht if the Socretory of tho Trensury shoo.14 bo
opoosod to
it, thot.h, TiTht thot brin tho Aubject to tho attention
of the Proei4ant.
If thn Proailent thouoht the prorosod action nnolso
, that ho seni for Govornor
Dolono and es1 him not to rreta thn onttor further ona
ho thought unior Oct,
eirtumotqncos tho cotwitteo lowold drop tho oottor for tho
rrItInt.
I amproaofti no opinion as to the a3v1sobil1ty o
toko ouch a couroe.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
hovin- tho N,
tter
II •
•
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
1.41
/qui is-"%VPRAWfp,,t!11.1,7
1.
MPIN
Pr gglIPMF7
.
/I#
FEDERAL RESERVE BOARD
November 4, 1915.
Dear LI'.
You may remember that yesterday
some reference was made to the
sugcestion
of one of the member bunks, 1
think of the
Linneaolis District, that t.ie 1:unber of
districts should be reduced.
Could you
lot me see this letter.
Sincerelz
H. Parker :dills, Esq.,
SecretarL', Federal Reserve Board.
-‘
\
\, .v
•.(1 ?s.,
?Q`
Ire
1‘ ,
,\
To The Feaeral RO1.0f70 Board:
There are now pending for considertion by the Board
the following cases in connection with the doteruination of
Federal
eserve ,ities and changes in District lines:
A.rot:
The appeal of Baltimore that it be selected in
preference to iichmond as the Yederal :iescrve
of the Filth District;
iocond:
.
The appeal of 2itteburph that it be uolected in
preference to Clovelcoad flb the Federtll oer7c CitLof the Fourth Metrict;
Yhird:
The appeal of a group of banks in certain countice
of 'Ileconsin that they be tAen out of the Linneapolis District and added to the Chic:117o Dictrict;
Fourth:
The appeal of certain buake in the western half
of Connecticut that they be taken out of the Boston
Di2triet and added to the hew York District; (The
Board has not fixed the time for hearing thil,? appeal).
Fifth:
The appeal of certain bunkc of Louisitt.na that they
be Inciudeu in the Atlnta District wld operate
throuh the liow Orleans Branch, in preference to
bein7 included in the Dallas District. (This appeal
has not boon heard by the Board, but the facts of the
case are beInr investigated),
„
ricen4A.,442, .._11-1
Your Cornitteo has ce.tiart4,4e
that these five cacc.,
should be dealt with in , compreheneivo way by considering the
a
cuestion of .1,eftlOitimcbrelesig.
may actumo that anon
the irAport=t objects which_
ConrocE; desircia to achieve, in enacting the flzdera ROBO2VO
2.ct, wore:
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
77
(7,
(1)
The creation of simookr1 independent banking eenters,kin
cacti of which was to be concentrated a substantial portion of
the reserves of its distzict so as to render them effectively
available au the ba211s of an elastic system of credit and. note
i3SUO and thus create and sustain a ready market for commercial
Deeper and bankers' aceeptz,laces;
(2)
Thc.steadying of interest rates
available for active use
by
Astrietv: 7
7
7
- --
_fitn(3.13 vOtherwise<cincraployed;
part2 of district 7‘
(Z)
The establishment of an efficient and. ccenoraical uystem
of clearing and col:Lactic* ,hockE and of transferring 4\andE;
A
within districts or bqtween them.
The rest
opera
a
•
ar
._pt;ionce•N,u_tlic actual
e--
kthp Pcdcral .zec rve B
!ystem has convinced
king .-
fundamental oWecte will be more
\
Z:rue-17
effectively and economi ally ceetiro
districts, reducing this
by a comolidt
4 •
01
o nine, and at
the same time more rally carry out the_ spirit of the ,ct, which
seems to contemplated tht
as our population and wealth
creases, there iill be a ne.essity for the erection of more
distrietere is a lim t beyond which decentralization
defeats Its purpose and -nakes for weakness rather than for
indepondenee.
The stronger 4ch district, the greater will
be its cap!/city to act as an independent center, the freer,
and, Iherefore, more t)ffectuE,1
the Interplay of idle
ceserve money and the broader its basix of useful service.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Zeserti, Iliddle of Pace 2..
3:
-ur much 1m. ,orUnee the fruerc of the :ederaj
iom)-1
ROCO:7VG Act attc.ched to the regional Tirineirie in the effectiTe
1;h:
adt:lint2,ation. of .
;Ietem, it i
recognize and eta7hexi:5c
nevzyrt:holok;t nceirj to
Aot regarded thic as c. (leotion
which ohould he finally settled. not siully on tLe -bzic of tio
inveztic;ation bu the Orcanivation Corazittes, but on the :Arcagth
of (mperience undf3r operLting conditioas, klud threfe. Idriot
uaderte to fl= the botalies
nnuber.
Thv yore aatiifictl
tLe ditric, nor the exact
rosoribo an nprer anJ, a lower
.
lilt within which experience ohoula detine tLe Trocire
bor.
lhej Liu avtai.4.,„ to impedo the CI:Ec eaccreic of judlont
upon this
611
tort ton, other tile= requirin3 4
due coacideration
be given to the cuotoraary ecurso of buimcs.
1;eocntralization ot oreekit
liLhment ad operation 5i t;.otive
1itio
t
OU1i thti eztab
vigercus remitna1 centera
ia the orc:lic J2rincit'le vlieh difierentiatec the .:ederzll Reserve
bankinu c;ittem from alv other ccmrart:ble 2vEtein, but tiloro iv.
limit beyond which decentmaization defeats Ite
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
4.na
-
lor
j;:znerionce
nAher tan for inf7orendmoe.
eaknes
,
that the fnnaamtvia I• n; *:oonev,
ac the other. cbjectr
Tbo
he
1.7tem ri71 ns:.-rr he accemlicliedith
partial con2oaidztion of the dictrilts.
out at lcmzt
ment in
te
well
.
.
7'.a4117 Ordx.nitioa ;_roc,1,1o, 4A) 17hoc
quec;ti(;11 ,f diotricti
irat inc•Laco
1
ferrea, did not, zte. could not
ITLie rE-
ta bc.2ea u.pon expltlaca
:Ive thc
a of the rroblvm; and it zatv
nec€;c1;ury for a Mix final div,-perl.tim
,
be tl.' u=f1 tilt:A the A.ct, i
refen7i
thi
cza other 1,reliminzlry
Jui, lor thcirinii.1deAciOn,
quo:A:lona to the Or:7unizAtio'a Co7
difficulties and
of the probleal und
yreeiatioa of thsdiLvortanca
did :20 with full
,orgavdzation
in order not to (Lel:i tho
lankra uatil the J.)cintraollt oT thc
01 thc
ed3r:„a nourne
1,
is.eEerve r.;o4rd.; au
dcubt-
the f-kA that in its lirst Aagi
.c)
lesP, this Ims arecite!le in
wAio;c
the whole :ecervtl TR:.Ln'K or,:zani
rec.duLttlient
c haa to be Id.,a(lo, col
to the etrol34
:Footnote:
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
cu4 bo so flc:ziiao that uueh
made
serieu
aevcloyaent of ti!cl
c,,191z on the
rter ulasz, 1)0
FetIcral aerierve Act.)
fereAce ao:port 011t
(cte c;peech of
It wi;-.4.; obvouziw' 11,:..)c4=zjiky to get thc Hc,item etrted
:
to
tt,
Mc tata
'war necescaril
of the Oralzation Corraitteo
eiifY,lea:it one, 4viili
Im7:lies no criticizm
of their work for yollr Comnitte, with the v7irieLoc of a
,
to have reached a ecacluuion that the roloztal at,atctura. laid 45ovm
by that Oon:aittee can aow br.) elm::aified in acue -pti,;.,ticulro with
3 ain in efficiency nald econom:,7 of oporrAioll.
,
Ted, it
a tributo to the foreeight aut sagacity shorn oy the Committee
in 1zv1nf:,7 donn it
ila
ntc
tht
hcrein.-
after rot:c=ended invcIvoa co little cht4n7e
V13ir oripl.nal plans.
It ga4 -oa cxgratJA thul, the datu aro flot at 1.2aad
fcr
d4.
itat-11 =la finitivt aolun OY 11-12 rro1e. 71; but ;;Iyur
.
is of the triAnicn t71..a.t
rocr
U1L
s1i8ht anL. neglicible
Of t'ho :z7vtem
rickz which
oX
UL
of poccitle ane
LUfl.archur:JAJ'ter IL thi
eollIa.zcd with holfUn
.
ommlittee
tiree,rr
4evnlnepttInt
uommutitf!..n cf
the dixtriots in Et otate of cunpemse as to 7hat the final
1isro2i-
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
titan o
th
cLttc:tio
i.
:t -0 to Lo, to cay nc.h1nç;
trrOTS
adcl.it1°nal
r, e'tjiferltWcine; it lc a
,
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
c
itiorLeole
f 1.10:Lay 1711.7. errt
on of: mow or acv
I
The time 'nac come when the Federal 2.ecervo 3oar1.
nist accept the ropeneibility of eanctioniug the en-Acting
arranrcmcnt or, elee, making w.i.ch
to be uecee6ary.
a revision
aL it determinec
Your Cerwaittce, therefore, iz propovin
the followiw
Two pis= f,a‘cl cz.bmitto, herewith:
a
Diatrietc, anJ A.an 2, with oil:;t
itrict
TI.m 1, with nlie
Txe. on17 dif-
ference bet7eon th= ic thgt in 21tva 1, the 'Boston 57)1c:trict
lo 11411. itained: viheze:.1,c, in .ann 2
,
it _Le ao.mblned with the
District.
ra ora3z to =gain
11077
th,w;e
which are beforo raL, ';70 will mdlx t
.(nect tho Lu=
O11ii.. brief statenont:
rirt3t:
In no rlattr oTtcappeW of Vf„e City of flaltiLIero it '!ould nropoee to doca with it by dolvinr:
the
appoal,
t ddinr. the ttate of :ary1n116 to the
PhiladolpMa District:
In the c=e of the appeal of the City of
.;?itti;bur7h,
It lc propoced to deny It, but to ehaLce the bouuda
r:i
of the 7chiladolphia District co ac to include
the
tato of 2oane7l7aa1a, an woll ac the couth
11334" of :Now Jorcey, and. tl,e Statou of 7)paaware ern
ania
:dland. Under this plan, 2ittuburgh tzd
Baltimore
ho expected in Ellie eoarze to bec=e branc
hes or
ar caoieu of the Philadelphia aarik:
.
Third:
In the eace of the appwil or the
leconclz bankcjt
lc propopod to dlanoco of that by
cobln1n,!7 the Ldn,
neapolle and thc Chica.,7e jlActricts;
l'ourth:
:En the ease of tho alypeza of the
bazIx in the weztorn
half of connoctieat, it It propo
ce to f7ruat it, in
21an 1, by including 3euterla
Connecticut (1aittiold ami
New haven Countioo) in the If=
Aztrict, ana in
ann 2, b-;" conining the Lew Ior'z
,
and 3octon Districts
into one Tutrf:.ot,
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
In the case of the appeal of certain bank in
livaipiana that thoybo transferred to the .Alanta
Dictriot and be inoluaed in tho territer7 of the
liew Orleans arlInch, it is proposed to (iispose of
it by the chrIne In the boundar:7 of the Dallas
District, vhich lc altered so as to include all of
the :tate of Louisiana, the inuthorn hcaf of the
::t4te of Liseissippi .and the corner o the ;:itatc
of 1127 .mma,
.
eituttod
AB betwoca .A.tua 1 and .Laaa 2 there is not a azczit deal
of aiffccaco.
.J.fle Boctoa Dicti'ict will still be a
strosk: oaci,rid
eventh in point of capital, with
banks and cL totQ e3apita1 of
boon paid in.
member
, one-half of which has
It an aaoath;ent to the Z'edcral
ozorve
were
pauilod pormittea the mutual aavizrt banks of 1.aellachusotte to
onto: the System eLQ special or acoocinte mv;!bcre, f.1 considerable increaeo in mcborship and capital of the Noaten i3ank
might be ozpoctod..
Jn the other hand, 3octon doe l; much of
buulaeus throurh T;O",,7
,
IP
10r1C,
The fact that the 3oston Ban;c
will al46ye find it difficult to moot itv epenacc ;:a.ld charges,
and that there All be =oh uanecossary and 07
.
3eneive return
shipmentin of federal '?.ocervo netec between the two Oietrictc,
may be cited ae a reason in fa.vor of combininc7 it with the
Rua York Dixtriet.
Indoea, prominont 3ovton banker
haIrc
mired tat there arc teal many Dletriote aaa that it
vould he
bettor if Boston ,or& includtd in the Nov 'ZorIc
7lictrict
Under oithor plan, New ;iorl- ic tle stronFv
et '011.1tzct in point
of cantLZ., t')1. z,76,ocio 13 ono cc, Luld
3
::.2,3Z6,0C.)0 in the
othor, ono-hAll of which hab bolla paid. in.
-.Cuxtheraore.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
eioaring operation
of Nov
siderable pe.
:tion of flow
banks today e=tend to a coniiard.
In rewoect to to VArd. Irdzitz•ict, the principal
changt lx,t3 boon to include tho weDtern part of 2enneylvania,
i.e., 2ittsburit, etc., and all of J1
171aafa.
Dicxtriet with ':;1.5,39a,000 cupit,
d,
:1nf third in point of
reeources,
2he preueat Clevo1a(1.
consiaerubly
atorod, westorn 2;anaz417ania baLlc aubtr-cted, thcyze being
adCle4i, an the ether hand, that part of 7oet Virc1nir„1 wt of
the :Altvhordes, the southweLtera part of Indlan
in tho
included
11=11; Diutrict, centml 21:entudky, ridL1c 'aria eastern
207,Lloe2co nnd tIle northern bz,11" of
It i2 f2,1.7XICtOCI.
that Cincinnati, rathern than taevelana„be m-1:4e the ::lefJerve
City of the Ditrict, bein
tral to tlIc entire DiEitriet.
portion et
a sab-treasar,y point ana TrIrZT eenIt fr rzoporod
1t-2o tLat a anall
outheaotern comer of Ind.i=n ch&11 bo taken
from tho Chiego Axtric'i; !Ind aadOa tD the Cincinnati
It would he von to l'mvo the moulber 11:z.:uko of
.
vau
,sod before the propoued boun4Lary ic
This Dit:trict
istrict.
ind1an4 ma-
1i1doto;ninoA.
ha7c a caplial of :':1)-2o::imatelz :,9,27y0,000
,
aad raT:lit fourth in point eI rocollroes.
It le ascumed tat
branc,h All be maintrAned in (aovelund for the une
of banks
in northern Ohio, hut Clneinnati, OM the Alio
ror b
1onc
been reeognize and erJtablif;hod al: the
chief baaking contez
lurge part of the
'aeot cn7 the ;dieglIenie
toed
eaat of the ,
'Ilesiseippi River ac far south ac eentrU Alabama.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
rurthormare, cineinnati ie a natural termimi poir.lt for all
p secnfter vad Treii!,ilt traffic; vAtoe breE± A the Ohio .1vor
and 2ausenr,cr an.Aai1uehedulce are usually Lk) cxrallea au
,
to compel a lay-over at that point.
The :Aehmoni4 and .d.tiz.nta Dietriota haw; been 60Mblued, thus ereatille; a etranser Dietrict and reta1nini7; the
,
.
bank of ,Alanta an m bmneh.
The 1e7;7
t% its territory.. ITriirorcr, h,x3 been allotted to the eleventh
,
Tlietriet, while
LrZr1M and the western part of . !clitt
:
htwe berm t11ottc,1. to DIntriotv .7; a:Id 4, reepectirdly.
7h1c
make8 a Dietriet vIth V et:Tit/2,1 of 39,925,000, if%tInking ;%.1„Ith
.
In point of irrortAnee.
The
)1.1.clao Di.z:triot
onlargea by combinin?7 it
with the Yinneanolit District anti the1ua5r“.7b,
esIdon the
tatet
of 7,forain,p', and !obranit-o., whieh
M8,01;
portance to !lbw
et1T4tr1 of :
la:?,81-0,000) fana
or
fhttvin,!,
a ":trict neeona in im-
havinf7 a large area, thtrash much e. it is cpnrcoly vettlea.
57
The Cornittee o=peets that tho :Federal - ecerve link at ninnearoliz 'mill be contintio
ae a brnneh and believer thnt, act =eh,
It c1li bo in 9. Iltroner position to nerve itc teretory thnn
as an Intlopendont Invt1,tution, inThrior in rozo!:zreov to
lo7oml of tho member ban:o
ti Dictriet.
The St. Lonit :11;1m1-et 52 enlareb7 ombracing the
%oxisp. C.Jty Dtrint (rIt% the exception of* the
StrAct of
'yorni.nr; and Nbratilva): that 1.3, th
'
eetorn ette of rineour4 ,
tho 2tr.tes of Kansan and Colorv.ao f:ola part
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
of Onftheme
-10-
Now rex41eo rAre added tc> lt, ..7.12i10 the central portion of Xentacky and couthera Inditaa aro cub-treted.
The eapitfalta-
tion of this Dierriet is slmoet doubled. beilv*. Snereasod f:cln
J243,366,000 to
)102,000, pattin
rank of capitalization.
Zanclas City Federal
1f:tee in
it in tile fifth 1)
rforotofox, Int.; the IA. Loulk; an6.
1
eserve unite (Irtlic been weak onet;.
Voz
reasons T.Z.mady explained, the Comittee ir IT the opinion
that it voetIon
or
the co/Intry rill be bettor
one ot zong bank than by two of inadecntate cities
-
;oreover
iz the only 6tato '1().a having two Fedora Reserve
cltioo, whIla one of the eompellinF; 2eneone for .miting the
'farloa,s eitw .Dietriet with. that of
:,auAv le the Importance
:
of securing for the onlargod District the .:Idvantage of J. aviI-2
a sab-teoacury.
To Illustrate: gold accumulating with the i'ederal aosorvo
of the
LOU1Tedcral
Kamv4; City Tor
recorvo for t. Louis.
serve Bank may not now be countod as
In ordar •th be 23 coanted, it rut be :thipro 1"4)
or to some srab-treaeury point :for =count oT the Gold ettle- horcanl, if .'!...anoao Litu *)3co:to!, a brunch of t'lc
,
mentnd
St. Louis '.ifoderal Recorve Bank, all sold at Zansas City will
::ouw rotm.wre a;Ta tt 1..:.;ule nay transfey.,~
'or part 0-t
Fold from it awn vaultz to the Gold nettlement land n1 thE)a7c
airalmniaccunmato !lo1'1 at Kancaz City and, of eorirso, eon;Teruel:7,
Louis may pa7 out at .nac City and aocumulz4o
a.
at •!t. ...431zio or in the o1 Settlorlont
Purtliermoms
currencg la the form ol 2oderu1 Reserve notes may, in the
lut=T, bo iod. in
..;ouir! or :.,/,n3aLl City, zec7ra1oa
whether the gold lc kept in St. Louis, Xanamti City, or in
t!lo
lninthn
It Inip;M bo
ttoi tt;i0112.‘
OrIa11t30
com,Liaerc;c1
emreful17 ana, for uorilo reasons, valid ht177.c preferroa to 0a:7:bine Dia/it:dote Vo. 10 and V°. 11, instead ol!
a ana 2:0.
11,
at the same. tirao rmtting the T.(1-„: 07,:uleaao branch in Dizitrict
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Federal Reserve Bank of St. Louis
13ut zilch a eorfbinati
vro1.2.1d hs.wo a:ctralted.
two sub-treasury eition
both tI,c1
,
City ana t
.loining tcwther
C7T f.)277, 4);:!.Yin
a1inn 7Avt::•1otc
icn az
-L
ithuttvay s1.71-
trotzur7 :points.
The prez;
/antrlctri
1 nrot mesh alt°red
the
beln.7 Vi7,0 zubtr,l.ctioz.OOf .--,..ror.v3, to
prViD
tat0 2.ill0
i1 tho
Uit1oi
o tarto
corL bw tho Kew Orloft:a lzanch or tho ri%th Dictrict th;lt
;
1. tho roroultildcr e 1:10,a1elana„ tho uotrthern hs11 of Ilun
inppl
and a anall come: e Alabama, at the name tilae nakin
the Retlerr:c uentrof the Dintrtet inetcad oi*
New Orleans
Thi r2
gd .703 tho preno”od neTT Orloane Dietriet a frib-tr.oaamr7
,
point
at teadrinartcrs tlnd
canitta of :::,60
710,000.
It 1F.:
of coarne, t:co.t a braach 7111 to naintlin, 71t
aq
lup
anJ
later, as the oecallion rtquiroo, brane'llef,I or loca
l ur7on.cloc
stronz araamnt In the opinion of the '.',1=tttitc
1
the headquarten'; of thle :iutrict at Now :.)ri
cano, iv tlo
im.pozt..
,
;(;
thir, eea?ort, by reanon of the openln
Panama c: 1,741a1 and, ot7 011- 0:,:pay10.1112.
77:11(1
AU trad0.
a11 Pran(thief0 Diotriot rorrtine enti?olj
lan.obtanced
ana rav:Ice oiftth under *Ivsn I
and. sevonth 711130
point of importance,
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Federal Reserve Bank of St. Louis
oT
1 n 2 in
.
-12
:t
be obcorved tbtA in
I aad icur districtc 1.1,1:Hr
thrdlf::ttricts urzi
been eliminated by the colabinaion.
in
AO
he fore2vinEl readjustment
caL:e has any districl bcn
1= 2 have
awcvor, it io contondei that
utilatod.
In respect i
district:; which It 1.; 1)roye2ad to climine, the
o11oi
Vac
c-n be
-f
es.ido. t4Lor o. t;h0 ba2is of tho rQsult of a i ear'z oration.
As to "Iirmearolis, tho _ank is sall anO, very d cidedly
ev,r;Aladowca &i
a h-va =Joon to
3o1i8 byap,aixrci;,.1
t. .aul and :Lineul
by the local ban.lwro, and thei,; seems to be no
doubt ab,A,it It, that the
oi intersta,
io one of very little divorsity
the. rusult is that the cosonal demand for bank
credits colitiues for the croy. moving
criod only, thich is a
short perioa of th(2 ;eur.
In the case of the :'t.J.4ouiE and ...ansi,c Git;" Idstricte,
which I Irxroced to cowbinc,
;:auL
v;d13. az ialusazcity, is a ,
Lit maw be 2Uit1 that't. Lcuis,
bank and not
surortiag.
in 2:ccpect to the ;tianta '1Jistrict, it ma;" be said that
the Lank i
not onay weak f-.1.nd ccetional in chc.racter, but colfich
uad Exit-centered in its manac;emesit.
La .cos-pact to Boston, Jour CommIttec ;o mce ih
,
--01u the loint of view or occarili7 the moct economical L.:11 .el_ecti ;c
1
operation and ect,:lbliching Ped6ral Recerve PlunE -v.hich, in point
o
eviti 9 will cemn.ro favorably sAith the largest Leber br;.tikc
2, conof their Districts, there o.n not be tiny doubt tht:t i-lan
._
2olidr,t1nL5 the Boston Iictrict 7ith the 7ov tor: :DiEtriet, IL the
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Federal Reserve Bank of St. Louis
advisable one.
But your Con- littee j. conl:ciouc of the fact
!A
1
:1
•;,
that in preeribing the
had in
in
Mlitital-1711
nurilber of :triets, ecnress
the dozire to avoid eentraliction of rmer ia an&
It might, therefore, he theuht that a con-
vin7le
District
bination of the New York District yith the Boston
woulef be ..;abject to crIticim ex, violt,tin
the ajcet Congress
haa in vies.
Coriittee
ftcr nnch reflection, is satisfied
that cabotantial .1dvantar;e:;
reF;r1t frou the new arrrIrc7ealen.
The establishment of an economical and effective
or7anization for the clearing and collection of checks and
for the transferrin
lities.
6.1717fic,
of funds is a problem beset with serious
In order to facilitate its accomplishment the
Board, with the co-operation of the Treasury Denartment, has
established a Oold Setloment Puna, enabling each Federal Reserve Bank, at the Treasury or any sub-treasury, to pay in or
recei7e rold for its ovn account with the Gold
ettlement
or for account of any other rederfa Reserve Bank.
Fund,
The establish-
ment of this fond has renderea unnecessary in erinary routine
transactions, the shipping of fold or gold certificates between
any Federal Reserve Banks situated in Districts 'there the
Treasur,7,, or sub-treasurieer arc loccd.
But in a)istricts
,:itftout zub-treaeuries there Lwst be 0 continuance
ra0At2,
of ship-
with attendant expense, to and from the nearest sub-
treasury or Treasury points.
This has provrEd a serious era-
barrtisaammut Axa taus way of devlaopini; a
zi4tizfactor7 013a:ring
anu collection plan and your L'ommittee has, therefore, been
forcoI to the conclusion that it i
imperative so to readjust
Disti.icts th,f,t each c;i11 have ',7ith1n its oun boundaries either
the Treasury or a sub-treasury point.
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Federal Reserve Bank of St. Louis
g
Cr.
14
•,...
dinitrive effloiene: in the ol,crzltion of the bunizs
e:mmrle,
will be promoted by a nmaller number of active banks; for
in the eoFA of note
by reduction oi overhed charge, bj reauetien
by
circultior due to the multiraiciki of diLA:viel,s, incidentally
1
.
rodction ta the nuuiber 0 banl:
dis-tricts, and. the con-
seGuent reductionin the number of ,' 7r4ief Itcaminors.
72hiL; ic zome-
i
.n moL. ber
thing in which the Govermaent is evali Llore lateresta_ thcbank8, becuuse A;k1(t Gevratz,ei-lt 1:3Q0iVak earainz011l
in ezeec
of
c;ix percent on the capitul, hence tie oparatLen of t:Lo :Teaorza Reserve ::,anks on the lowest basis of operzAilig eirensec compatible
au14 of this LoLrd.
with saffn,7 and efficiency is an i
•
&iert104"4
li be its
he stro ge each ai:Lt!riet i,
and therefore
capacity to act s i indeperident cter, the fretr
c
t.:le more offectval will be the iritcepla;i of the idle reccrve
monsv and to broader i.to basic ca: uofli. service.
posvss
rrreatqr power of stabilicinc
and cToRlizinr; interest rate
:1thin their widened field of
Large Districts
ol)eraton, while rediscount transactions between Districts
will be eimpler and more etioil; effected.
- smallef number
will not only provide a basis of P;feator coaality anonp: Dis
trIctf7 denling rrith one rmotlier, but Uils elimination of Peclerl
3ankr, of iiladet:uc.te size will generally enhance
the prestige of each rederl 3e8orve nank in dealing with its
member btunks zInd will secure thb.t absolute confidence which
is necessary for the Thllest devalopmeAt of the fiew banking
system.
For e..;:f.uple, in sercrai of the present Districts the
total resources of the Fedcrl leserve Banks do not measure
up to those o:17 the larger National and state banks e their
respective 7)istriets, and hence suffer in public estimation-
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Federal Reserve Bank of St. Louis
J
15
To
f
u'ra up, the arumente in fc.ver of the pro- )oned read:
7)1ut. 71cts may he stated brilf17 ar 71J11o7s:
juotnent 01
oiminic!led overhead e:Tenceo account of rent, salaries, 3t.c,
olOrt or nine
rcauctiaa in the numbor of Dictidetz to
thc apirit of the lavr which con'd rot
La imoonoonanco
m1mm nanbez of 3aalice
have oontemn1ato4 bcginnily; vTith the
::panclon,
.
and :1&71.7 n3 opportunity for el.
tan e. the country intintoito
q.
mazo comicto or
nrtuxcl
4..
cor7i1 oLcItnry
ban5.nr7 nria buoinesu -unM.
rictE
,
The 111;': c.0,0:111 to hive eontenplated Dizt
larpx) area
with brandLec cmd 1oc%1 almrciev.
5.
'2110 recirtiroraant thn.t Dictrict
3.nk
rcectivilv the
n tin to the lowainz
notec of another Die trit atull rethr
the
17:oavy b7.3.rdC72 upom tc ):,:c2orro Benlco in
Dist:Met thro17s
.
7:iE! vill bc concmc of bankiz relatIvoly near each
l!euer DIztriet').
ech oT
Pistricts viii have a
C. Unar Ito rroposed plan/itt the
ne - 101.1mond TiotrJet.
.
ao:b-trsanr7 flt headc!nartere, e:,:cept
1
th1 tou, not
,olf of tlr meln Treevur7
which arm vrail itz
oldomn7
b7
gnr ditant.
facilitate clet4rInf
Tho enlarrIn7 or tho Olutricts will
nrthening tLia
roductr17 overhead cxpeneec, by ztro
operat1onr3
through the creation of bramth
.
etatc4E1 of tho Reserve 13f;211,:s,
tion of. nor° badka
17mal artmcioc, eccraro thr co-opera
ban:tx
7.
and bankers.
be1n7 weal:, are
At 7rone71t, rscne of the Batki . bncides
The propoccd redictricting makes
eootIonta In character.
9.
no
tbeim noro Tlaticnal In chracter and at
plan,
Y617.te I1ne3 7tore 7cncrally thnm the old
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Federal Reserve Bank of St. Louis
Vico toll=e
•
:
.
•
9.
•
AnonF the Inlidental tNconomiov to be realined by 41101116ht'ho numbev of "..istrictr:1 1& tt o
reduc1nf7 the irronlmi. of
eiatOflCletl'ictu nte, thorc-fore, the nuzfber of chief øx--
1
03
As the C,orerrincritis liatorat%tod only in pa...ofitra in e:;:eecs
of C, to redoral .2oecr7e 3oar.
coct2
co:lac:2_110d In reilucing the
oreiT fotleonable way to n
(yorwr,flon of tlle .13nOrz
raialnun.
13.
t the pref3ent time in
number of' the
.17tri.ets the Tednre.1 lloofIrelo 3rt
rand liapot.10Att?t,nomo
Fold01.7Zr1
ileverro
clo not measure up in caTyltal
thtt In.rr7c, flz.tiozi1 or
tte baake.
It
a matter or r.roat intportiaro 1.f. the 'Fedora ibeerve Bankr,
t:tilto Vac ir tra0 p1ac
meapaure
th.tho p1.11.1.1c ciatimtion as Central
tn
reEstige with tte 1f1.1.E:ecr:; cm-
=re 0.1 b5n.k..1.3 of tlitslir peep vtltive Tttitt,
Uoe sorand
:IlotiFectrally elfbraitted,
.••••••
Conaittee
„
if.th Dra.rt.
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Federal Reserve Bank of St. Louis
)
.
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Federal Reserve Bank of St. Louis
c-112.416
TRESS STATMMIT
FEDERAL RESERVE BOARD
Sept. 28, 1915.
The Federal Reserve Board today authorized the
statemciat thn.t no question of rer.:oving or in •2-iy
way altering the status of the Federal Reserve
Bank of Linneapolis or of the Federal Reserve
district in .7:Lich the tank is situ.tted, has
boon before the Bo-rd or has had consideration
by ft in any way whatever.
2
Od, r, iqj-
ciD
7"
'
STATELENT FOR THE PRESS.
Larch 16, 1915.
The Federal Reserve Board today
announced that, in view of the neces-
sary absence from the City of two members of the Board and the illness of
the Chairman of the Board, it had been determined to take no action for at
least a month longer with respect to appeals from the decision of the Organization Committee in the matter of Federal reserve districts.
Action however, will be expedited as soon as a full meeting of the
Board can be secured.
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Federal Reserve Bank of St. Louis
i.D":111\1. IIESEMZ
BOW OVE
P
t‘rlar
Of 5 191
WHEREAS, The Board received on March
sub-committees
on appeals from the action of the Reserve Bank Organization Committee affecting
the boundaries of certain districts, and,
WHEREAS, In view of. the sudden illness of the Secretary of the Treasury
the Board decided ,-41 take no action on these reports before April 15.and,
WHEREAS, After a further delay of three weeks it is deemed to be unfair
,
to the pAtioners and prejudicial to the interests of the Federal Reserve
Sy
m to defer action any longer, and';
WHEREAS, The Board is in a position to act affirmatively with respect to
three of the four petitions so far considered, on the basis of an experience
sufficiently characteristic and extensive to show wherein certain readjustments in the boundaries of the Federal Reserve Districts can be made which
would brier, them into closer harmony with the "convenience and customary
course of business";
NOW, THEREFO,RE BE IT RESOLVED, That the recommendations of the sub-com'
mittees aforesaid be adopted and approved, and that the petitions of the
banks of southern Oklahoma, northern New Jersey, Tyler and Wetzel Counties,
West Virginia, be granted; and,
11 IT ALSO RESOLVED, That the petition of the banks of Wyoming and
Nebraska be denied; and,
BE IT FURTHER RESOLVED, That action on other iterratng petitions
be deferred
until further experience in the actual operation of the several
districts,
especially in the light of the new clearing system which is
about to go into
effect, and of the extent to which S ate banks t4,0
membership in the Federal
-t/idl
1P7
,
Reserve System, shall hav skapp1144-44.the Board the
necessary data 4.e-r-maicing
/
4
xfaul,Platzaaats-ixt.--acr.-arriauce...-Aulth•-ishe----"Voperiiiiiiat-and -enst-emary
c rse- -of
F Z1
4
p44.
intsinamend, f-trp.Mievffiore, that it is t e opinion
of the Board that action
4
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Federal Reserve Bank of St. Louis
on petitions relating to changes in cities designated as the location of
the Poard shall have
Federal Reserve Panks should be deferred u
,r51 readjustreached a conclusion from experience as to wt further Er,Err
A
Ak,__
n the number of
ments in the boundaries of the several districts, or
rejeL
,
1
i 4101, Ifre--.414-6,
t
districts, ft43 AaeesIntry 10 the o44siotixa operation and development of the
Federal Reserve System.
A. C. M.
5 - 4 - 15.
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Federal Reserve Bank of St. Louis
•
111
FEDERAL RESERVE BOARD
WAS
March 5, 1915.
The Honorable,
The Attorney General.
Sir:
Section 2 of the Act of December 23, 1913, known
as the Federal Reserve Act, imposes upon the Reserve Bank
Organization Committee the duty of designating not less than
eight nor more than twelve Federal reserve cities, and of
dividing the continental United States, excepting Alaska,
into Federal reserve districts, each district to contain only
one Federal reserve city.
The Section further provides that
the determination of said Organization Committee shall not be
subject to review except by the Federal Reserve Board when
organized, with the proviso that the districts shall be apportioned with due regard to the convenience and customary course
of business, and shall not noceszarily be coterminous with any
State or States.
The Section also provides that the districts
thus created may be readjusted and new districts may from time
to time be created by the Federal Reserve Board, not to exceed
twelve in all.
The Organization Committee under said section 2 is
further authorized to employ counsel, to take testimony, to send
for persons and papers, to administer oaths, and to make such
investigation as may be deemed necessary in determining the
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Federal Reserve Bank of St. Louis
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Federal Reserve Bank of St. Louis
reserve districts and in designating the cities within such
districts where such Federal reserve banks shall be severally
located.
The Organization Committee after giving public
hearings in many places in the United States, at which the
testimony of many witnesses was taken, and later printed,
finally,on April 2, 1914, divided the continental United
States into twelve so-called Federal reserve districts, and
duly designated a Federal reserve city in each of said districts.
Acting under said determination and designation,
the Reserve Bank Organization Committee proceeded to organize the various Federal reserve banks and to supervise the
election of six directors for each bank.
The Federal Reserve Board, upon its organization,
appointed the Government directors for each bank, and on
November 16, 1914, the banks were opened for business.
The Federal Reserve Board has received a number of
petitions, all seasonably filed, for review of the action of
the Organization Committee in determining Federal reserve
districts and in designating the cities within such districts
where the Federal reserve banks were to be and were located,
and has heard arguments of counsel based upon the record taken
by the Organization Committee.
Inasmuch as several important legal questions have
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Federal Reserve Bank of St. Louis
•
arisen in connection with the determination by the Federal
Reserve Board of these petitions, I am directed by said Board
to ask your opinion upon the following questions of law:(1)
In reviewing the action of the Reserve Bank Organiza-
tion Committee in establishing Federal reserve districts, is
the Federal Reserve Board, as a matter of law, bound to confine itself to the record taken by said Organization Committee,
and to determine solely the validity of the decision of said
Committee upon said record; or, on the other hand, has the
Federal Reserve Board power to decide for itself what it believes to be a proper determination of the matter based upon
said record of the Organization Committee?
In other words,
is the power of the Federal Reserve Board limited to a review
of the propriety of the decision of the Organization Committee,
based upon the record it took, or can it render its own
decision upon such record as if it had originally taken the
testimony?
(2)
Has the Federal Reserve Board, as a matter of law,
the right to change the designation of a Federal reserve city
made by the Reserve Bank Organization Committee and designate
another Federal reserve city in its place?
That is to say,
does the power of review given to the Federal Reserve Board
apply to petitions for changing the designation of Federal
reserve cities as well as to petitions for changing the boundaries
of Federal reserve districts?
(3) Can the Federal Reserve Board, by changing the
--4--
boundaries of Federal reserve districts, consolidate districts,
thus reducing the total number of the districts below twelve, the number fixed by the Organization Committee?
I enclose, herewith, copy of an opinion of our Counsel
upon these questions.
Inasmuch as the Board cannot render a decision upon
these petitions until your opinion has been received, we should
esteem it a favor if you could expedite the matter.
Very respectfully yours,
Governor.
Enclosure.
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Federal Reserve Bank of St. Louis
221
STATEMENT FOR THE PRESS:
May 4, 1915.
The Federal Reserve Board today. -nassed the following resolution
regarding redistricting appeals:
BE IT RESOLVED:
That the recommendations of the respective coin-
1:aittees be adopted and approved, and that the -petitions of the banks
in sol:Ithorn Oklahwa, northern New Jersey, Tyler and Wetzel Counties,
West Virinia, he granted; and,
BE IT ALSO RESOLVED,
That the rctition of the banks of Wyoming
and Nebraska be denied; and, •
BE IT FURTHER RESOLVED,
That action on other pending petitions be
deferred until further experience in the actual operation of the several
districts, especially in the light of the new clearing system which is
about to go into effect, and of the extent to which State banks take
membership in the Federal Reserve Systeia, shall have provided the Board
with the necessary data for a conclusion, it being the ooinion of the
Board that action on petitions relating to changes in cities designated
as the location of Federal Reserve banks should be deferred until the
Board shall have reached a conclusion fro-z! oxporienco as to any further
readjustments in the boundaries of the several districts, or in the
number of districts, which may be desirable in the operation :Ind
devolopzIont of the Federal Reserve System.
The
VP'! n
.
on tho resolution was unanimous, Secretary McAdoo who
was not present, asking to bo rocorded in favor of it .
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Federal Reserve Bank of St. Louis
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Federal Reserve Bank of St. Louis
/4'
3,-7,L RVE ZOlin Fit;
-
FEDERAL RESERVE BOARD
WASHINGTON
M C. E LLI OTT
:arch 1st, 1915.
II11
/
3
4
JUN 2 5 1915
?Weal &verve!„Tvariz
COUNSEL
"SUBJECT. Review of determination of
Organization Committee, modification
of districts created and change in
--Ornae ral Trer6tfrtre—t*i t e .
Mrs
•
dear GovE;rnor:-
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Federal Reserve Bank of St. Louis
li"Og. the honor to acknowledge receipt of 9.
copy of the resolution of the Board requesting an opinion on the following questions:
I.
II.
III.
IV.
That are the general powers and duties of the
Federal Reserve Board in reviewing the detenni. liation of the Organization Committee?
Can the Federal Reserve Board, under the terms
of the Federal Reserve Act, designate other
Federal reserve cities in place of those selected by the Organization Committee'
Can the Federal Reserve Board alter the geozraphical limits of the districts created by
the organization Committee?
Can the Federal Reserve Board, by the consolidation of two or more districts, reduce the
number of Federal reserve districts?
The provisions of the Federal Reserve Act which
it is necessary to construe in considering the foregoing
questions are contained in Section 2 of the Act and are
as follows:
(a) "The determination of said organization
committee shall not be subject to review except by
the Federal Reserve 7oard when organized: Provided,
That the districts shall be apportioned with due
regard to the convenience an] customary course of
business."
(b) "The districts thuzl created may be readjusted", and
(c) "'Jew districts may from time to time be created 1)y the 70doral Reserve Board, not to exceed
twelve in all".
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Federal Reserve Bank of St. Louis
410
4
116. S. H. No. 2.
A discussion of the general powers of the Board
to review the determination of the Organization Committee
necessarily involves a consideration of the other questions submitted, but as far as possible the several questions will be discussed separately in the order above indicated.
I.
That are the general powers and duties of the
Federal Reserve Board in reviewing the determination of the Organization Committee?
The scope of the power of the Federal Reserve
Board to review the determination Of the Organization Committee will depend very largely upon the construction to
be placed upon the language "subject to review".
It is necessary to determine from the context,
and from a general consideration of the circumstances under which the Act was passed, whether Congress intended
(a) to vest in the Board the power to consider de novo the
whole subject of determining Federal reserve districts and
designatin Federal reserve cities without reference to the
decision of the Organization Committee, or (b) to vest in
the Board the right to review the determination of the Committee in the same manner and to the same extent that an
appellate court reviews a decision of the lower court.
If the former view is adopted it is necessary to
conclude that Congress intended to vest no independent powers in the Organization Committee but to limit its functione to collecting and analyzing information to be submitted to the Federal Reserve Board for its consideration in
designating the Federal reserve cities and in defining the
geographical limits of the districts to be served. In
other words, if no weight is to be given to the decision
of the Committee and the Board is to consider the whole subject anew without reference to the determination of the Committee and without restriction, the work of the Committee
is necessarily of no effect.
In view of the general character of the language
used in vesting this power of review in the Board, and of
the absence of any details as to the method of procedure to
be followed, it is important to analyze the powers apparently vested in the Organization Committee and those vested in
the Federal Reserve Board in order to determine what weight
should be given to the decision of the Committee and to what
extent and under what circumstances it is subject to modification by the Federal Reserve Board.
Powers of the Organization Committee.
From an examination of the Act it appears that,
briefly summarized, the Organization Committee is empowered
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Federal Reserve Bank of St. Louis
(O. H. :Zo. 3.
and directed (a) To designate not less than eight nor more than
twelve cities to be known as Federal reserve
cities.
(b) To divide the continental United States, exclusive of Alaska, into districts, each district
to contain only on of such Federal reserve
cities, and
(c) To supervise the organization in each of the
cities so designated of a Federal reserve bank.
In performing these duties, the Organization Com-:
mittee is authorized "To employ 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 committee in determining the reserve districts and in designating the cities within
such districts where such Federal reserve banks shall
be severally located."
Powers of the Federal Reserve Board.
The Federal Reserve Board is empowered, in so far
the organization of the several Federal reserve banks is
concerned (a) To appoint three of the nine directors of
each bank and to designate one as the Federal reserve agent and chairman, and one as deputy Federal
reserve agent, the three directors so appointed to
be known as Class "C" directors.
(b) To call for payment of the first installment
of subscription of the member banks.
as
This last power is vested alternatively in the
Organization Committee and the Federal Reserve Board) and
while the Organization Committee is not empowered to appoint the Class "C" directors, it is authorized to act as
chairman of the Board of Directors (pending the appointment
of such chairman by the Federal Reserve Board), in holding
the election of the three Class "A" and three Class "R"
directors of each bank.
The remaining powers of the Feder_11 Reserve Board, with the exception of certain duties in
reference to the transfer of public stock, relate to the
supervision of the Federal reserve banks when organized
rather than to their organization.
It was clearly contemplated by Congress, therefore, that the organization of the several Federal reserve
banks should be proceeded with immediately upon the passage
of the Act and that such organization might be carried to
practical completion before the Federal Reserve Board, under the terms of the Act, should be called upon to exercise
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Federal Reserve Bank of St. Louis
At. H. !To. 4.
any specific powers in reference thereto. This is indica.ted not only by an analysis of the Act as it passed,
but also by the history of the particular provisions of
the Act under consideration, as shown by the language in
the House bill, the modifications made by the senate, and
the language agreed to by the Conference Committee.
It seems clear, therefore, that Congress expected that the right of review might be exercised by the
Federal Reserve Board after as well as before the establishment of the Federal reserve banks.
Consequently, it
must be assumed that the power to review the determination
of the Committee is the same in either case.
The Act in terms vests a broad discretion in the
Organization Committee, and the power to employ expert aid,
to take testimony, to send for witnesses, etc., is vested
exclusively in that Committee.
Furthermore, it is required, under the provisions of the Act, after completinf!,
the work of designating the cities and determining the districts, to proceed immediately with the organization of the
banks.
The conclusion appears to be fully justified,
therefore, that Congress did not intend that the Committee
should merely collect and analyze information for submission to the Board since otherwise it would have provided
that the incorporation and organiz7:tion of the Federal Reserve banks should be undertaken only after the Federal Reserve Board had rendered its decision and had thus given a
more definitely fixed status to the districts created and
the cities designated.
On the other hand, Congress manifestly intended
to vast very broad powers in the Federal Reserve Board and
inasmuch as the Board is charged with the supervision of
the banks when created, and the responsibility of the successful operation of the system is so largely entrusted
to its care, it seems clear that the decision of the Committee was not intended to be final but that the Board
should have the right to modify the districts - (a) if,
upon an examination of the record consisting of evidence
submitted to and information collected by the Organization
Committee, the Board should conclude that the districts
are not apportioned with due regard to the convenience
and customary course of business, or (b) if, as a result
of the operation of the system, experience should demonstrate the fact that some other apportionment will
best accomplish the purposes and objects of the Act.
This view seems entirely consistent with the alternative construction suggested, namely, that the right
of review vested in the Board is analagous to the right
of an appellate court to review the decision of a lower
court.
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Federal Reserve Bank of St. Louis
C. OH.
No. 5.
It is true that a court will ordinarily review
a decision of a lower court only in those cases where
there have been errors of law, or in the case of some
newly discovered evidence,- that is, new matter which
has arisen since the decision of the lover court and not
evidence which might have been offered before that decision was rendered.
The failure on the part of the Organization Committee, however, to comply with the proviso of Section 2,
namely,"that the districts shall be apportioned with due
regard to the convenience and customary course of business",
would constitute an error of law and would justify a review
and modification by the Board of its determination. Unless,
however, the Board finds upon its examination of the record
referred to that the Committee has clearly failed to comply
With the proviso quoted and has not, in its opinion, apportioned the districts as prescribed by statute, the decision
of the Committee would seem to be final so far as the present proceedings are concerned.
History of Provisions Relating
to Organization of Banks.
The history of the provisions of the Act under
consideration furnishes additional evidence of the basis of
The House bill conferred no
the foregoing conclusions.
power on the Board to review the decision of the Organization Committee on its own motion but provided that upon the
application of not less than ten member banks a district
'tight be readjusted.
This bill provided that the Committee
should consist of the Secretary of the Treasury, the Secretary of Agriculture and the Comptroller of the Currency.
The Senate bill provided that the Committee should
consist of the Secretary of the Treasury and two other members of the Federal Eeserve Board.
The determination of
this Committee, under the terms of the Senate bill, was made
subject to review by the Federal Peserve Board. The Conference Committee restored the provisions of the House bill relating to the personnel of the Committee and retained the
provision that the decision of the Cormittee should be "subject to review" by the Federal Feserve Board.
The language
used in the conference report was adopted when the bill became a law.
The Senate and House bills and the Act as passed
all provided that the organization of the banks shall be proceeded with immediately upon the passage of the Act, evidently intending that the work of the Organization Committee
should be acted upon at once and that it should not be subject to review except by the Federal Reserve Board, and then
only for the reasons already stated.
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Federal Reserve Bank of St. Louis
4IPS. H. No. 6.
II.
Can the Federal Reserve Eoard, under the terms
of the Federal Reserve Act, designate other
Federal reserve cities in place of those selected by the Organization Committee?
The power to designate other reserve cities in the
place of those selected by the Organization Committee is not
expressly given by the Act.
In the bill as it passed the
House, the Organization Committee was required to designate
from the reserve cities authorized by law not less than
twelve to be known as Federal reserve cities, and to divide
the continental United States into Federal reserve districts.
In the Senate bill the qualification that such cities should
be selected from the reserve cities was removed and the selection was made entirely a matter of discretion with the
The bill as it became a law left the designaCommittee.
tion of the cities a matter of discretion.
The qualification above quoted, limiting the discretion of the Organization Committee, and which provides
that "the districts shall be apportioned with due regard to
the convenience and customary course of business", refers
specifically to districts and not to the cities designated.
The Organization Committee is authorized "to make such investigation as may be deemed
necessary by the said Committee in determinincr, the
reserve districts and in desi_gpatin, the cities
,within such districts".
In defining the power of review vested in the
Federal Reserve Doard, the language used is "The determination of said Organization Committee
shall not be subject to review except by the Federal
Reserve Doard".
It appears, therefore, that the only limitation on the discretion of the Committee relates to the determination of the
districts, and that the power of review likewise refers to
that determination and does not refer specifically to the
designation of the cities.
The power, therefore, to change the location of
the Federal reserve banks is clearly not an expressed power
under the terms of the Act and, if it exists, must be said
to be implied (a) From the fact that construing the language "subject to review" in a broad sense, it may be said
that to apportion the districts "with due regard
to the convenience and customary course of business", it is necessary to consider the location
of the Federal reserve cities in each district,
notwithstanding the facts that the designation of
cities appears to be a matter of discretion, and
that this qualification refers to districts rather
than to cities.
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Federal Reserve Bank of St. Louis
•
or such power may be implied (b) From the fact that the power to "readjust" the
districts created carries with it the power of
designation of the Federal reserve cities, since
a district may be so readjusted as to transfer a
Federal reserve city to another district or as to
place a Federal reserve city in an unsuitable
portion of an altered district. In either case
it would be necessary to designate a suitable
Federal reserve city for the readjusted district.
If, therefore, the roard concludes that the districts are not apportioned according to the purpose and intent of the Act and determines that it is necessary to readjust such districts, it would seem clear that it possesses
an implied power to change the designation of the Federal
reserve cities.
If, however, the districts are not readjusted, it seems very doubtful whether this power can be
implied, and to change the designation of cities without
readjusting the districts would necessitate resolving this
doubt in favor of the exercise of this power against the
apparent intent of Congress.
III.
Can the Federal Reserve 7oard alter the geographical limits of the districts created by
the Organization Committee?
The power to "readjust" districts, as shown above,
is vested in the roard independently of the power to "review"
the determination of the Organization Committee. The power
to "review", as any court review, contemplates a review
within a reasonable time, either before or soon after the
establishment of the system, and, like a review by a court,
should be limited to the evidence submitted to the Organization Committee, as suggested in the answer to Question I.
The power to readjust, however, is not limited in time and
would seem to be a continuine: power, Congress evidently intending to provide a means for altering the districts even
after the determination of the committee as such had become
fixed by a lapse of time or by being affirmed by the Board.
Therefore, if, later, in the supervision of the
operation of the several banks, it should be demonactual
strated that a readjustment of the geographical limits of
the districts will best serve the purposes of the Act, the
Board is expressly authorized to make such readjustment just
as it can do so now under the power of review if, from the
evidence submitted to the Organization Committee, it feels
that the requirements of the Act were not complied with by
that Committee.
IV.
Can the Federal Reserve Board, by the consolidation of two or more districts, reduce the
number of Federal reserve districts?
C. H. No. 8.
IIP
I am unable to find in the Act any power, either
e4preused or implied, by which the "oard can, by consolidation, reduce the number of districts. It is true that
it has the power to readjust the districts created but the
power to "readjust" can hardly be said to include the power
to eliminate, and any change 7.hich results in the elimination of a whole district could hardly be said to have been
contemplated by the Act.
If Congress had intended the power to "readjust"
to be sufficiently broad to authorize an increase or a reduction in the number of districts it would have been unnecessary to grant the express power referred to above to
create from time to time new districts not to exceed twelve
in all.
In other words, under the well settled doctrine
of nexpressio unius est exclusio alterius" the fact that
Congress expressly granted the power to increase the number
of districts but did not in terms grant the power to reduce
the number indicates very clearly that it did not intend to
vest this authority in the Board.
Regulation No. 1.
In view of the foregoing opinion, it seems proper
to refer to Regulation No. 1 adopted by the Board, prescribing method of procedure in appeals from the decision of the
reserve Bank Organization Committee.
As above shown, the provision of the House bill
vesting in the member banks the right to file an application for readjustment of districts, VVLS not incorporated in
the bill as finally passed, but the matter of review and readjustment was left to the Board to consider on its own motion.
In order that the Board might have the assistance
of the views of the parties in interest, however, Regulation
No. 1 was adopted and representatives selected by the parties interested were invited to discuss any questions of law
or fact including the powers and jurisdiction of the Board.
In the discussion before the Board, the questions
considered above were not argued at length. The jurisdiction of the Board to review the decision has not been questioned but counsel for the reserve banks have, in their arguments, taken the position that the decision of the committee should stand unless clearly shown not to be in accordance with the purpose and intent of the Act, and have
directed their arguments mainly to the merits of the case
as disclosed by the record.
respectfully,
Hon. Charles S. Hamlin,
Governor.
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Federal Reserve Bank of St. Louis
4110!/r
,
eel •
•
169.
FEDERAL
RESER7E
BOARD
WASHINGTON
SUBJECT,: Review of determination of
Organization Committee, modification
of districts created and change in
designation of Federal Reserve Cities.
My dear Governor:I have the honor to acknowledge receipt of a
copy of the resolution of the Board requesting an .opinion on the following questions:
' I.
What are the general powers and duties of the
Federal Reserve Board in reviewing the determination of the Organization Committee?
Can the Federal Reserve Board, under the terms
of the Federal Reserve Act, designate other
Federal reserve cities in place of those selected by the Organization Committee?
Can the Federal Reserve Board alter the geographical limits of the districts created by
the Organization Committee?
IV.
Can the Federal Reserve Board, by the consolidation of two or more districts, reduce the
number of Federal reserve districts?
The provisions of the Federal Reserve Act which
it is necessary to construe in considering the foregoing
questions are contained in Section 2 of the Act and are
as follows:
(a) "The determination of said organization
committee shall not be subject to review except by
the Federal Reserve Board when organized: Provid
ed,
That the districts shall be apportioned with
due
regard to the convenience and customary course
of
business."
(b) "The districts thus created may be readju
sted", and
(c) "New districts may from time to time be
created by the Federal Reserve Board, not to
exceed
twelve in all".
_Q_ ',4'O
(
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1)
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Federal Reserve Bank of St. Louis
1111\I C. S. H. No.
A discussion of the general powers of the Board
to review the determination of the Organization Committee
necessarily involves a consideration of the other questions submitted, but as far as )ossible the several questions will be discussed separat.dy in the order above indicated.
I.
What are the general powers and duties of the
Federal Reserve Board in reviewing the determination of the Organization Committee?
The scope of the power of
Board tc review the determination of
mittee will depend very largely upon
be placed upon the language "subject
the Federal Reserve
the Organization Comthe construction to
to review".
It is necessary to determine from the context,
and from a general consideration of the circumstances under which the Act was passed, whether Congress intended
(a) to vest in the Board the power to consider de novo the
whole subject of determining Federal reserve districts and
designating Federal reserve cities without reference to the
decision of the Organization Committee, or (b) to vest in
the Board the right to review the determination of the Committee in the same manner and to the same extent that an
appellate court reviews a decision of the lower court.
If the former view is adopted it is necessary to
conclude that Congress intended to vest no independent powers
in the Organization Committee but to limit its functions to
collecting and analyzing information to be submitted to the
Federal Reserve Board for its consideration in designating
the Federal reserve cities and in defining the geographical
limits of the districts to be served. In other words, if no
weight is to be given to the decision of the Committee and
the Board is to consider the whole subject anew with reference to the determination of the Committee and without restriction, the work of the Committee is necessarily of no
effect.
In view of the general character of the language
used in vesting this power of review in the Board, and of
the absence of any details as to the method of procedure to
be followed, it is important to analyze the powers apparently vested in the Organization Committee and those vested in
the Federal Reserve Board in order to determine what weight
should be given to the decision of the Committee and to what
extent and under what circumstances it is subject to modification by the Federal Reserve Board.
Powers of the Organization Committee.
From an examination of the Act it appears that,
briefly summarized, the Organization Committee is empowered
2.
0
S. H. No. 3.
and directed (a) To designate not Jess than eight nor more than
twelve cities to be known as federal reserve cities.
(b) To divide the continental United States, exclusive of Alaska, into districts, each district to
contain only one of such Federal reserve cities,
and
(c) to supervise the organization in each of the
cities so designated of a Federal reserve bank.
In performing these duties, the Organization Committee is authorized "To employ 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 cummittee in determining the reserve districts and in designating the cities within
such districts where such Federal reserve banks shall
be severally lOcated."
Powers of the Federal Reserve Board.
The Federal Reserve Board is empowered, in so far
as the organization of the several Federal reserVe banks is
concerned (a) To appoint three of the nine directors of
each bank and to designate one as the Federal reserve agent and chairman, and one as deputy Federal
reserve agent, the three directors so appointed to
be known as Class "C" directors.
(b) Tm call for payment of the first installment
of subscription of the member banks.
This last power is vested alternatively in the
Organization Committee and the Federal Reserve Board, and
while the Organization Committee is not empowered to appoint the Class "C" directors, it is authorized to act as
chairman of the Board of Directors (pending the appointment
of such chairman by the Federal Reserve Board), in holding
the election of the three Class "A" and three Class "B"
directors of each bank. The remaining powers of the Federal Reserve Board, with the exception of certain duties in
reference to the transfer of public stock, relate to the
supervision of the Federal reserve banks when organized
rather than to their organization.
It was clearly contemplated by Congress, therefore, that the organization of the several Federal reserve
banks should be proceeded with immediately upon the passage
of the Let, and that such organization might be carried to
practical completion before the Federal Reserve Board, under the terms of the Act, should be called upon to exercise
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Federal Reserve Bank of St. Louis
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Federal Reserve Bank of St. Louis
C.S.H. No. 4.
any specific powers in reference thereto. This is indicated
not only by an analysis of the Act as it passed but also by
the history of the p,rticular provisions of the Act under
consideration, as shown by the language in the House bill,
the modifications made by the Senate, and the language agreed
to by the Conference Committee.
It seems clear, therefore, that Congress expected that
right of review might be exercised by the Federal Reserve
the
Board after, as wellTas before, the establishment of the Federal reserve banks. Consequently it must be assumed that the
power to review the determination of the Committee is the same
in either case.
The Act in terms vests a broad discretion in the Organization Committee, and the power to employ expert aid, to take
testimony, to send for witnesses, etc., is vested exclusively
in that Committee. Furthermore, it is required, under the provisions of the Act, after completing the work of designating
the cities and determining the districts, to proceed immediately with the organization of the banks.
The conclusion appears to be fully justified, therefore,
that Congress did not intend that the Committee should merely
collect and analyze information for submission to the Board
since otherwise it would have provided that the incorporation
and organization of the Federal Reserve banks should be undertaken only after the Federal Reserve Board had rendered its
decision and had thus given a more definitely fixed status
to the districts created and the cities designated.
On the other hand, Congress manifestly intended to vest
very broad powers in the Federal Reserve Board and inasmuch
as the Board is charged with the supervision of the banks when
created, and the responsibility of the successful operation of
the system is so largely entrusted to its care, it seems clear
that the decision of the Committee was not intended to be
final but that the Board should have the right to modify the
districts - (a) if, upon an examination of the record consisting of evidence submitted to and information collected by the
Organization Committee, the Board should conclude that the districts are mot apportioned with due regard to the convenience
and customary course of business, or (b) if, as a result of
the operation of the system, experience should demonstrate the
fact that some other apportionment will best accomplish the
purposes and objects of the Act.
This view seems entirely consistent with the alternative
construction suggested, namely, that the right of review vested
in the Board is analagous to the right of an appellate court to
review the decision of a lower court.
C. S. H. No. 5.
It is true that a court will ordinarily review
a decision of a lower court only in those cases where
there have been errors of law, or in the case of some
newly discovered evidence,- that is, new matter which
has arisen since the decision of the lower court and not
evidence which might have been offered before that decision was rendered.
The failure on the part of the Organization Committee, however, to comply with the proviso of Section 2,
namely, "that the districts shall be apportioned with due
regard to the convenience and customary course of business",
would constitute an error of law and would justify a review
and modification by the Board cf its determination. Unless,
however, the Board finds upon its examination of the record
referred to that the COmmittee has clearly failed to comply
with the proviso quoted and has not, in its opinion, apportioned the districts as prescribed by statute, the decision
of the Committee would seem to be final so far as the present proceedings are concerned.
History of Provisions Relating
to Organization of Banks.
The history of the provisions of the Act under
consideration furnishes additional evidence of the basis of
the foregoing conclusions. The House bill conferred no
power on the Board to review the decision of the Organization Committee on its own motion but provided that upon the
application of not less than ten member banks a district
might be readjusted. This bill provided that the Committee
,should consist of the Secretary of the Treasury, the Secretary of Agriculture and the Comptroller of the Currency.
The Senate bill provided that the Committee should
consist of the Secretary of the Treasury and two other members of the Federal Reserve Board. The determination of
this Committee, under the terms of the Senate bill, was made
subject to review by the Federal Reserve Board. The Conference Committee restored the provisions of the House bill relating to the personnel of the Committee and retained the
provision that the decision of the Committee should be "subject to review" by the Federal Reserve Board. The language
used in the conference report was adopted when the bill became a law.
The Senate and House bills and the Act as passed
all provided that the organization of the banks shall be proceeded with immediately upon the passage of the Act, evidently intending that the work of the Organization Committee
should be acted upon at once and that it should not be subject to review except by the Federal Reserve Board, and then
only for the reasons already stated.
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Federal Reserve Bank of St. Louis
C. S. H. No. 6.
II.
Can the Federal Reserve Board, under the terms
of the Federal Reserve Act, designate other
Federal reserve cities in place of those selected by the Organization Committee?
The power to designate other reserve cities in the
place of those selected by the Organization Committee is not
expressly given by the Act. In the bill as it passed the
House, the Organization Committee was required to design
ate
from the reserve cities authorized by law not less than
twelve to be known as Federal reserve cities, and to divide
the continental United States into Federal reserve distri
cts.
In the Senate bill the qualification that such cities should
be selected from the reserve cities was removed and the selection was made entirely a matter of discretion with the
Committee. The bill as it became a law left the designation of the cities a matter of discretion.
The qualification above quoted, limiting the discretion of the Organization Committee, and which provid
es
that "the districts shall be apportioned with
due regard to
the convenience and customary course of busine
ss", refers
specifically to districts and not to the cities
designated.
The Organization Committee is author
ized "to make such investigation as may be deemed
necessary by the said Committee in determ
ining the
reserve districts and in designating the
cities
within such districts",
In defining the power of review vested in
the
Federal Reserve Bourd, the language
used is "The determination of said Organization
Committee
shall not be subject to review except by
the Federal
Reserve Board".
It appears, therefore, that the only limitation
on the discretion of the Committee relates to the determination of the
districts, and that the power of review likewise refers to
that determination and does not refer specifically to the
deeignation of the cities.
The power, therefore, to change the location of
the Federal reserve banks is clearly not
an expressed power
under the terms of the Act and, if it exists
, must be said
to be implied (a) From the fact that construing the
language "subject to review" in a broad eense, it may be said
that to apportion the districts "with due regard
to the con7enience and customary course
of business", it is necessary to consider the location
of the Federal reserve cities in each district,
notwithstanding the facts that the designation of
cities appears to be a matter of discretion, and
that this qualification refers to districts rather
than to cities.
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Federal Reserve Bank of St. Louis
C. S. H.
No. 7
or such power may be implied (b) From the fact that the power to "readjust" the
districts created carries with it the power of
designation of the Federal reserve cities, since
a district may be so readjusted as to transfer a
Federal reserve city to another district or as to
place a Federal reserve city in an unsuitable
portion of an altered district. In either case
it would be necessary to designate a suitable
Federal reserve city for the readjusted district.
If, therefore, the Board concludes that the districts are not apportioned according to the purpose and intent of the Act and determines that it is necessary to readjust such districts, it would seem clear that it possesses
an implied power to change the designation of the Federal
reserve cities. If, however, the districts are not readjusted,
it seems very doubtful whether this power can be implied, and
to change the designation of cities without readjusting the
districts would necessitate resolving this doubt in favor of
the exercise of this power against th* apparent intent of Congress.
Can the Federal Reserve Board alter the geographical limits of the districts created by
the Organization Committee?
The power to "readjust" districts, as shown above
is vested in the Board independently of the power to "review"
the determination of the Organization Committee. The power
to "review", as any court review, contemplates a review
within a reasonable time, either before or soon after the
establishment of the system, and, like a review by a court,
should be limited to the evidence submitted to the Organization Committee, as suggested in the answer to Question I.
The power to readjust, however, is not limited in time and
would seem to be a continuing power, Congress evidently intending to provide a means for altering the districts even
after the determination of the committee as such had become
fixed by a lapse of time or by being affirmed by the Board.
Therefore, if, later, in the supervision of the
actual operation of the several banks, it should be demon-strated that a readjustment of the geographical limits of
the districts will best serve the purposes of the Act, the
Board is expressly authorized to make such readjustment just
as it can do so now under the power of review if, from the
evidence submitted to the Organization Committee, it feels
that the requirements of the Act were not complied with by
that Committee.
Iv.
Can the Federal Reserve Board, by the consolidation of two or more districts, reduce the
number of Federal reserve districts?
C. S. H. No. 8.
RV
4!,
I am unable o find in the Act any power, either expressed or implied, by which the Board can, by consolidation
reduce the number of districts. It is true that it has the
power to readjust the districts created but the power to
"readjust" can hardly be said to include the power to eliminate, and any change which results in the elimination of
a whole district could hardly be said to have been contemplated by the Act.
If Congress had intended the power to "readjust" to
be sufficiently broad to authorize an increase or a reduction
in the number of districts it would have been unnecessary
to grant the express power refereed to above to create from
time to time new districts not to exceed twelve in all. In
other words, under the well settled doctrine of "expressio
unius est exclusio alterius" the fact that Congress expressly
granted the power to incre,se the number of districts but did
not in terms grant the power to reduce the number indicates
very clearly that it did not intend to vest this author
ity
in the Board.
REGULATION NO. 1._
In view of the foregoing opinion, It seems proper to
refer to Regulation No. I adopted by the Board, prescr
ibing
method of procedure in appeals from the decision of the
Reserve Bank Organization Committee.
As above shown, the provision of the House Bill
vesting
in the member banks the right to file an
application for readjustment of districts, was not incorporated in
the bill as
finally passed, but the matter of review and
readjustment was
left to the Board to consider on its own motion
.
In order
that the . uard might have the ,ssistance
s
of the views of the
parties in Interest, however, Regulation No.
I was adopted and
representatives selected by the parties interested were
invited to discuss any questions of law or fact including
the
powers and jurisdiction of the Board.
In the discussion before the Board, the questions considered above were not argued at length.
The jurisdiction
of the Board to review the decision has not been questioned
but Counsel for the Reserve banks have, in their arguments,
taken the position that the decision of the Committee should
stand unless clearly shown not to be in accordance with the
purpose and intent of the Act, and have directed their arguments mainly to the merits of the case s disclo
sed by the
record.
Respectfully,
( Signed ) M. C. ELLIOTT
Counsel
Honorable Charles
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Governor.
S. Hamlin,
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
141
2../r
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
I
•
-
`1,06,
iv•ci"c(
6/K
cti
cAd,ei tcZ
zte-rcie-e-e/.-e-e
/ 7V
E
L
What; do recrods show as to
vote passed
asking Mr. Elliott to give
opinion as to
our right to reduce
number of Federal
reserve districts.
in January, last.
The vote was some time
•
•
•
•
•
FEDERAL RESERVE BOARD
WAS
January 12, 1915.
Dear Governor:
Mr. Miller said to me before leaving that he thought
that we should know definitely what the rights of the
Board are with respect to the question of reviewing the
determination of the Organization Committee concerning
the allocation of the twelve Federal Reserve Banks, districts, etc.
We must reach some conclusion, and I would strongly
urge that a letter be written to the Attorney General
and that he be asked to give us his ruling in this matter.
Yours very truly,
z
Hon. Charles S. Hamlin,
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Governo r.
,/
•
tk4
0
87Docket No.
FEDERAL RESERVE BOARD.
File No._
Office of Counsel.
Subject:-
Cr 170,,(Lirht3
frcr tt
fcr
t-,- r73Tor
Diary of Proceedings.
D7ate.
1914.
L;t. 14E.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
ir vcr4,7-m r,
'
yorp
71
1r
trirr
.1•rey.
eL1t cf thtt414.17 cf /?..rttrn
aitirnhn cr thp Fklerta PaPerve likak et PhiThAelvkin notVicd
o!
Mr. Ctarlos J. rtfAcs d.1A4u1.:tdr
,
11441; re MilA4earYik.
cf •17e,
cf r(titi(nirp 1;;;Dkv K,, 11, 1.o Vv. '1.nelet3.
.
4
J:. rl:t. :et for J, rt:%71
Nctico of
VWay brilf
m6I2.ed to Mr. }ce
uor.in
pcstdble.
ttt rtiet ti.I.;"
Le
No'..ico of 1.f.:,
,rinc 1jjj to'
'r V. Vnn Nucor* Ctiirrn,
New Jernay nmkorn Atwoci:Jicn o P. V.
no 5P9, rev,vrka N. 4
•
87'
FEDERATJ faSERVE BOARD.
Docket No.
File No.
Office of Counsel.
Subject:-
Date.
Petition of Pittsburgh bunks praying that Pittsburgh instead
of Clovelz,nd be denigrated as the Federal Peserve City in
theJeurthDistriGAJL__
Diary of Proceedings,
Aug. 11914.
Petition und brief filed in behalf of Pittsburgh.
Sept.15, I
Cleveland banks notified of Pittsburgh petition.
Solt.2,
Colonel J. J. Sullivbn designated reprecenttive of Cleveland banks.,
e
Sept.250
0
Oct. Z.
Dec. 10,
Petition and brief of Pittsburgh sent to Cleveland Cle• ring Muse
Acsoci;_tion.
Reply brief filed in behalf of Cleveland.
11
Dec. 16. 0
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Hearing set for January 13, 1915.
Notice of hoaring.mailed to . T. Smith for Pittsburgh and
J. J. Sullivan for CleveLnd.
-
O
87
FEDERAL RESERVE BOARD.
Docket No4
Office of Counsel.
Subject:-
Ptition of mtmlbor bLnke of . Nebriuku onU Tyoming ree,ucetirc
trAwfor from Di:Arict No. 10 tx Pis:trict h. 7.
D'ate.
1914.
Ncv. 14.
17.
Diary ot Proceedings.
P,
7tition fil, OE baRlf rf bnnkn in NebriAsku inc Tyoninc.
!cl
Bricf
bc1...lf of moubsr bE.nkc. of Netr.flke ;,nd Tyoning.
,
Ncv. 1Y.
CLirmn of thc Foderl Iln:Icry Punk of 1t.nrE..5 City notified of
petition of member Lank of Nebr;A;kft hnd 'yominz.
Nov. 48.
MeptrF,.. Pobineon
Gor,drich, A.tcrr yt
L, croe Building,
K:Lneee City, domicnE,ted to rorrerent tt.s. Feckxv1 Po-orv R:,nk
f.f Kwliv,:,u City.
NLv,
Brief of fr-titionir.c Darks
DOC. 41.
iled to Venmrc. Potinocn rd CoAricl.
Icbineon ;2nd CoodrieL ts)lellrert .rcr tlArty d:Iye extannion
of time for filinE reply brief.
Dt;c•
Thirty &Aye extension trnted.
Doc. 10.
113- rivt_ r., for Fel,rut,ry 3, 1915.
11,
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
87
FEDERAL RESERVE BOARD.
Docket No.
File No.
Office of Counsel.
Subject:-
Petition of rmmber banks of Totzcl z;.nd Tyler Ccuntieo, 7'nt
for u trnefer fru:. D1f7trict
to District re. 4.
Diary of Proceedings.
14.
ScIA. lb.
Oct. 27,
Oct. 30.
Petition and brio fili in bahalf of Member bank
irct;o1 t.ald Tyler Countie:t.
in
redorL1 Peorve Bank cf Plchmond notified of petition.
Frra PuLton denik rated
DtIlk of Fichmond.
repreenttive cf +Jr redemi Pecrervi
Brief of pctitionint. Imnkx; maile6 to Frra Hunton.
Pearirc zet for Ji,ntiz.xy .7, 1015.
V-z;c. 160
-
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Notice of licarinu, mailcd to Epr:1 Hunton and A. C. J. ckscn,
rirut
N4ti—nal 13nk cf ,iptervville, T. Va.
•
FEDERATJ f0:SERVE BOARD,
87
Docket No.
File No.
Office of Counsel.
SUbject:Pctitjor f Bltirore banks rmyinE
Piltir.cr€ 1.c.ttai:, (1 of
FiaTond
dtflinntod vc tYo FoderT,1 Talcrv Olty ir rt.trict
Diary of Proceedings.
Sort
14
41(.11,•
NIA
"
t. Ll,
Ntition
briers filt4 ty Biltir.oro b-nkie•
PiehmtJ bonko notifind
S. R. 12 .0 f'.nd Fr
rl.rroint tive
Scut.
*
Oot. 5
eo. 10
*
"
ft
10
ea. 16, -11
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
WAtinor, relitivn.
Uuntcn cf Picilvrd f
cf PichmenJ
1341Uncrn bank°
tc 1. P. P:-ce
Eurton•
Tnty ccTio. or r(-117
2tA for .Vnutlry 6, 19156
mrAled to Caro r:nd Vt!tal frr Baltirorco •11d
rotico of Yt.
tc Uunten krld r:Ke for Pichmcnd•
•
87
FEDERAL RSERVE BOARD.
Docket No.
File No._
Office of Counsel.
Subject:-
D- te,
a
Petition of certin member tanks in r.outhern Ok1.3hemzt re^m6Ftlrig
,
a trnefrr frcm Dietrict ro, 11 to rictrict rc. 10,
Diary of Proceedings.
1914.
Sert.15.
Petition and brief filed.
Oct. 271
Chairman, rderz-“1 Po - ervo pbnk of Dm3171:.; nviified of this);
-
['cc. 16.
IAtter written to ftr. TenAson urEinj, nre'Ay PITrintrent of n
rT:-reoent tIv fcr tLe alllas tank. 13ricf of rctiticni:
,!E
banks accompanied thin letter 7.it} the rorme!lt 1,h:A it 110
r, ferred to the roprerenttiv tie socn ;: dele14.nNted.
?
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Federal Reserve Bank of St. Louis
87
FEDEhAt, RnEliVE BOARD.
File No....
Subject:—
Date.
Docket No.
Office of Counsel.
vatitien of cortair. membor bP,nkc in Tennessee requesting that
McntEomery nd Pcbertson Countios be tr!nrcrrod
from rictrict Nc. 6 to Pitrict No. 8,
Diary of Proceedings.
Potition filed. (No brief cubmitted at yct, December 16).
Chairmn# ?edema Peserve Bank of Atlanta notified cf fs:titicn
an requeFtod to devirmte a r rresentLItive.
Docile).
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Lettr writton to ConcresnmiAl Byrns recuestInr inrrrmtion
0)out briefs in eurrort of retition of rember bnnks.
JFD
•
EX-OFFICIO MEMUERS
WILLIAM G. McADOO
SECRETARY OF THE TREASURY
CHAIRMAN
JOHN SKELTON WILLIAMS
COMPTROLLER OF THE CURRENCY
CHARLES S. HAMLIN. GOVERNOR
FREDERIC A. DELANO. VICE GOVERNOR
PAUL M.WARBURG
W P. G. HARDING
ADOLPH C. MILLER
FEDERAL RESERVE BOARD
H. PARKER WILLIS. SECRETARY
.
ADDRESS REPLY TO
WAS
FEDERAL RESERVE.130 RD
•
December la,
. ,r1
:
1‘•
h"°"'
-(TANN- " 01:
7
TOODRrRD.
124,
DeL Mrs. Woodford:
,r
The f 1 owing da*.es have been fixed for
hearings in the matter of/
carious apreals from the decision
of the Reserve Bank Organization Committee:
Jan. 6; Baltimore v. Richmond.
Jan. 13; l'ittsburgh v. (
'leveland.
v Jan. 20; Banks of northern New Jersey..requestirg transfer from
Philadelphia to New York District.
Jun. 27; Banks of certain counties in 'est Virginia requesting
transfer from the Richmond to the Cleveland District.
Feb. 3; Banks in Nebraska and Tyoming requesting transfer from
v the Kansas City to the Chicago District.
No date has as yet been fixed for either the arpual of banks in
certain counties in Tennessee or the appeal cf banks in southern Oklahoma.
I will notify you as soon as herinL,s have been decided on for
these latter two cases.
I am giving you this information because Yr. Allen wants you
to
answer certain inquirie
as to these dates ,
!acie in let 4ers which
Kitzmiller will turn over to you.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Very truly yours,
(
rATT7T: F APP7AL9 FROM D7CTSTair; Or Tr
,
.
P.71S711V7 BIM ORGATTIZATION CrrigiTT
211.
•
1.
*
*
*
*
*• *
*
,4
4
j2 71 1q14
--
*
FAL YOB
tion of Pittsburgh mob or bpnks
prming
rt Pittsburch instead of Clev
elan d
V 2'e
;losirnatod as the Federal re.erv
e city in
District No. 4.
POOVADOMMINNIA
1,ot
1914
(A)
Petition and brief filed on boh
slf of 7.'ittsburch
banks Atrust 12, 1914.
(B)
Cleveland banks notified by thi
c office ;eptember
15, 1914, thrt this petition and
brief hp.d been
filed av. requetdd to dosifT,P
te sorlo ropresentrztive toarnser in their beh
alf.
Colonel J. J. f::.ullivan dosirnat
ed to 3.orrev ent
Cli1701:-.nd banks !.'optonber 22,
1914.
(D)
Copies of petition v./1i bri at*
of Pittsburgh banks
sent to Cleveland Clor,rine
House Association
!7,ertember 25, 1914.
(7)
reply brief of Cleveland filed
nallber 3, 1914.
Mils it will be seen that tho
nmt step in this cave is the dosirjr.
tion
of a day for a hoDrinc, by this
Board.
2.
Petition or .t.3il1tiraore brinks
rreyirr: thnt
Baltirrre insteed of Pichrion
d be desirnated
as the rederal reserve
city in Dietriet No. 5.
(A) September 11, 1914,
171:1timore filed retition
and brief.
(B) ::;eptoribor 15, 1914,
Elotrnond. bflnlcs notified by
this office thkA.
Totition and brief hid boon
filed and requested. to
doirnte some repro& entative to aproar in their
behalf.
(C)
..',optomber 21, 1914, L. i.
Pre an
7.7v Hunton dos/gritted to relveseart 71c
hmond banks.
Artgmbor 25, 1914, pntiti
on cad brief of Baltirioro
banliz ruilod to I:osrrs.
Hunton are Pare.
(E)
October 5, 1914, reply bri
ef filed in behalf of
Richmond ballits.
This case tzraitis v. hfx,ring by
the Bonrd4.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
(C)
Nov'ombor 1, 1914, Cher lor j.. Tondi (.1.os1rrntoci
,
as repro ontp t1 vo f to 7(40.oral ,,.nt-.ervr. Bvia:
of Philndelphia•
(7)) :Tovanber 17, 1914, potition
briofs of the
banks of northern New Jorno: rntloa to Cherlos
,
nonds.
briof rut ho Ma) 13.,‘,7 Mr. ItholIds bafori)
ot for this caso.
6.
itearine m' be
aotition of town rt
°to rtson
Colnit.;Ins of Tonnossoo to ho trtinsforro6 frm.
7)Ictriet :To. 5 to T':Istri ct, No.
(A)
irovo7. or
71.1)
5, 1914, petition CU cxl. in bohplf
.
.
of brt-oks of .:,tiawart, LontrmE1r7 nnd 7,obcrt—
s0.11 C°Witles
1:o briflf In support of said piytition }-1:.2 as :cot been reoolvod. 71v ,
raloo cntl
On
-0.rn rub, . fit ors in cq3.011 erlsos rrovide t'hut t briof
F
:
7
rust bl filod WithIn fivo drizis of t rntition. These five dercjr: r ,To ccr
,
sine o e1apio.
e
.Otitori or ilembor bf4130 of 1.76orr.sk1t
to ho trfins ferrod from
triot No. 7.
'.717-ozning
at No.. 10 to 7)1 LI—
(;,.)
(3)
4
TtitIon ii rii1f of 4 1-6-? b rritE of .7lebrv.slcp_
6
and W,:y-orlinc, ff1 io :10,
7(11711)er 14 rind brief
in support
Novembor 17.
rovombor 17, 1914, rodorta
orvo '!'-rrnk of
Kimsns Ciksr 1101;1 ft od thrt r1d pclit ion
and brief had boon filld nr.td ro:milrtod
to des if-Tx to snmo rorTes entv tive to
appoer In its bohn.lf.
:To rorrisentrtive hrs yot boon dos icnr.ted •
I
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
11,
3.
Petition of member baale3 located in Wetzel
Tyler CountI es, ',vett Vi rgiria, •riiyi re: that
said. countioF.
trensferred from . )5.5.1trict
1
Noe 5 to District ITN 4.
;3eptembor 3.5, 1914, petition aid brief filed
in behalf of member banks of 7etzel and
Tyler klountioe.
October 27, 1914, Federal .":';.eserve ilfank of
Tz.ichmoncl notified that such petition md
brief •:e.,d bean filed r.rii re. ,:iueeted to
.
desigmte some repref:entrtIvo to appear
in its behalf.
October 30, 1914, 1::;ppt itunton desicnated to
repr000nt Iiichriond PederE. Peserve Bank,
,
1
November 27, 1914, petition t d brief of
Wetzel f)./11 Tyler Counties mailed to
rappa Hunton.
This cose
the filinE of rep17 brief by Lr. Hinton before a
day eon be Met for o boe.ring thereof.
4.
Petition of member banks of sou thorn Oklahoma praying
that the territorL in whi oh they are lecated
,
transferrnci. from District No. 11 to District 7:o.
10,
(A) September 15, 1914, petition z:nd brief filed
in behalf of the bamYs of southern OkinhOma•
(B)
October 27, 1914, Federal 7:eserve Bank of
Dallas notified t.iat said retition and
brief hrti been filed in bthalf of the bcnIes
of southern Oklehomat and requested to 10—
sif7DIto a representative to appear in its
ba half.
Tho Federal leserve . 3;..11k of Dallas ha.s not yet desiTnnte.:.;
;
tive to appear in its be-relf.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
rerrit7entrl—
5, Petition of member banks in northern New jerspry
praying thr. t the territory in ythi ell they re
located be transferred from District :lo. 3 to Dif,trict
No. 2.
(A) September 26, 1914, petition and brief in
behelf of bails of northern New Jersey
filed.
(B)
Octobf.:r 26, 1914, .`••nairrirrn, ;.'ejora.1 ! esorve
-,
:
Bank of Fhiladelphia notified that said
petition ona brief ilf d been flied
rerpested
desirnate a representative
ayrear in itr behalf.
—
RINTSED 17PT1T.
=ILL
77-7*V7
-ITNGTO:T
-413-
20.LD
N.m2mber 17, 1115.
to the Fedc-ral Reserve Boara.
There are now pending for consideration by the Board the
follo,.ing appeals frou decisions of the Reserve Bank Organization
Committee, regarding the determination of Federal aerve Cities
and District lines :
First :
The appel of Bultinore thi;t it co sAacted in preference, to Richnond as the Fcd,r1 Re:serve City of the
Fifth District ;
Second:
The appeal of Pittsbrgh that it be selected in preference to ClevelaLd as tn Federal Reserve City of thc.
Fourth District ;
Third :
. The appeal of a group ol Ilanks in certain.counties
of Wisconsin that they be t.....,:enpout of tte'Ei'nneapclis
' - iistrict and added to th: C'Licago District ;
Fourth:
The appeal of certain ei. .nks in the western half of
.
COnnecticut that they be taken out of the Boston District and added to the lisw York District; ( The .Board
has not fixedthe tine for hearing this c..preal ).
Fifth:
The appeal of certain banxs of Louisiana that they
be included ir the Atlanta District and operate through
the New Orleans Branch, in preference to being included
in the Dallas District:. ( This appeal has not been heard
by the bard, but the facts of the case are being investigated ).
Your Committee recommends that thct. five cases be dealt vitr.
,e
in a comprehensive way by corsiderin& the broader question of
readjustLient of Districts.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
•
-2 -
vie may assume t. at an.ong, the important objects which
Congres clsired to achieve in enacting the Federal Reserve Act
were:
1.
Thc: creation of independent banking centers indeterminate in number and regional rather than local
in character - in each of which would be concentrated
a substantial portion of the banking reserves of its
District which could be effectively utilized as the
basis of an elastic system of credit and note issue
and which would Create and sustain a ready market for
commercial paper and bankers' acceptances.
The s:eadying of interest rates by more nearly
ectualizing the supply of credit,facilities in different
parts of the sane district or between districts, more
particularly by making available for active use where
needed, funds which might otherwise or elsewhere be
unemployed.
3.
The establishment of an economical and efficicint
system of clearings and collection of checks and of
transferring funds within or between districts.
Decentralization of credit facilities through the
agency of the great and strong regional centers, subject to
centralizod supervision, is the plan of organization which differentiates the Federal Reserve System from any other comparable
banking system, and the success of our new American departure
in the field of management of a system of reserve banking will
"be conditioned upon the wisdom and discrimination with which
this plan of administration is applied.
Abundant evidence is
to. be found, both in the debates of Congress and in the Reserve
Act itself, that the framers of the Federal Reserve Act were
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
-413fully alive to this facti,but it is necess&rv to rcco,;nize and eL.pilasize that however muc
in,r.ortanee the fraLlers uf the Act attached to
the choice 9f suitable divisionsin the effective administration of thc
system, the Act, nevertheless plainly regarded this as aquestion which
could not be settled in advance and a question that coulci not even be
definitively settled by the Reserve Bank Organization CoL„Littee on the
basis of such investiEation as could be had before the actual inau,:uration of the neY banking systen.
The Act, therefore, did not undertake
to fix the boundaries of districts nor even the exact number. Congress
was satisfied to prescribe an -.;pper an
a lower liit within which the
precise nuLiber of districts should be determined in accordance with
changing conditions and after the necessary experience right be at hand.
The ultiLate judgnent on this ir.gportant question was to be that of thr
Federal Reserve Board, and ConL,ress:cdd nothing to iupede the free exercise of the Board's judo_ent on this question other than laying down
the requirements that the districts should not be more than twelve in
number nor less than eight, and by prescribing that due regard should
e given to the
"convenience and customary course of business."
Observation of the actual working of the Federal Reserve
banking system and of the factors that rake for strength and for 'feak—
i
ness, has satisfieo your Co. .,ittee that thre is a lifait in the present circumstances of the country, beyond which decentralization ray
defeat its purpose without aaking for independence.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Excrience has
I
-413-
-4-
satisfied us that the fundamental purp)e of c.centralization as ';;e11
as the other iortant objects of the reserve syster, will never be
attained in the degree„ which your ComLlittze believes pos&ible without
at least a partial consolidation of cotrtain no
contigu:cAs districts.
The Reserve Bank Organization Coulmittee to whose judzment in the first
instance the question of fixing the number and boundaries of the Federal Reserve districts
as referred, did not„h-Ave and could not have
had the data, which alone coula be derived from experience, necessary
for a final disposition of the problezi. I
cenclusion:I• wer% n.)ces-
c 'rily more or lees conjectural in character and, therefore, not to
be regarded, under any reasoaable construction of the authority and
responsibilities of the Federal Reserve hoard in the matter, as final.
It may be assuNed that the Act, in referring the problem of di.5tricting
along with other prelioinary questions to the Organization Cb:.-diittee
for initiative actior, diu so with full a17pr:ciation of tho aifficulties and the:. in.cortance of the proble
organization of the Federal
an
i
order not to delay the
Eunk: by 1!:stponinE; considera-
tion of the question until after thc aprointt )f th
Federal R
serve hoard; * and this method of handling the problem vas doubtless
also adopted by Congresssin fulli ppreciation by it of the fact that
(*)
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
See speech of Hon. Carter Glass, December 22, 1A.3, on
the conference comndttee report on the Federal Reserve Act.
-5in its first staGesethe .ehole reeerve
er6anization would be eo
flexible in character that such readjustments ir the fundafeent ls of
the regional structure ee eliLht comrcend tl-e- celve: as necessary or
expedient to the judgr!ent of tlie Feral Reserve Dolrd, could be Eade
witeloat injury to el impairment of the normal development of the system.
In er6anizing the new banking syste; it was obviously necessary to begin at some point, even though it %vae to be expected that
some of the :,ction taken %;ould have to be revised.
The task of the
Organization Coitteu was of necessity one beset ‘dth many and
varied difficultice and uncertainties. No one can appreciate this better than youe Col.deittee which, in reviewing the problere of districting, ha o had the advantage of much definite knowledge derived froLl
experience which was- lacking to the Organization Committee.
It there-
fore implies no criticieel of the work and findings of the Organization
Committee if. your present CoLlmittee,
the benai'it of a year's
observation of the workings of the Federal Reserve Sister' has reached
the conclusion that the reional steucture outlined by the Organization
Committee can be sielplified in some of its features eith a gain in
efficiency and economy of operation.
It is, indeed, a tribute to
the insight exercised by the Organization Caunittee in layinc, out the
boundaries of the reserve districts. that the readjustments considered
,
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Federal Reserve Bank of St. Louis
necessary by your committee should be iound to invo2v,_ sc littlo
change in the fundamental line:is, of the Organiiion Committee'
Opinions, it may
map.
expected, vill long differ as to the best
alignment of districts under the Federal Reserve System. Howcw'r
much. experience may do to help the solution of the problem, experience alone r,ay
to set;1
for a very lon:,; time, perhaps never, be expected
t. ri_r, will always be a considerable m
of doubt
on points of detail which will have- to be resolved by the unaided
judgment of the Board.
It is true that all_the d ta which may in
tilne be expected tc becoms available, are not yet at hand for a
final-and definitive solution of the problel_ if experience alone
is to settle it, but your ComdAttee is of th., opinion that there
has already been
LLI:.11.a.
experience to L- -ke it possible to
:
undertake the York oi readjustont with intelligence and substantial confidence in the permanency of the results. Any risks of
possible necessary readjustments of a Linor ch,,racter in the future
are to be regarded as slight and negligible compared
with the in
jury possibly to be done throuLh
holdin‘ back th, development
;
:
of the Federal Reserve SysteL. and keepin
the business and banking
colunities of the soveral district
state of suspense as to
what will
-be th
in
final disposition of the districtin: question, to
say notldnL of the considerable dislocation and disturbu
nces in *
established arrangements which every additional
day of delay will entail.
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Federal Reserve Bank of St. Louis
R.7.1••
4eakinE practicalay, t'nerfore, on th. quostion of readjustment of districts, your Comittee is firmly of the opinion tha
SO
far as any large and comprehensive handling of the problem is concerned, it is a question of now or never t
The time has come when
the Federal Reserve Board must either accept the responsibility of
sanctioning the existing arrangement of districts or else of making
in the near future such revision as in the exercise of its best judgment it now believes to be necessary.
The problem is preeminently one for the exercise of general
judgment as to what willmake for the most effective organization
of the Federal Reserve Banking system and your Committee does not,
therefore, think it necessary to develop at length or in detail
the reasons which have weighed with its individual meaers, each of
whom has reached his conclusions in his own way.
Attention Llay,
however, be called to some of the considerations in favor of a reduction in the number of districts.-
Some of these which recom-
mend themselves on the ground of business efficiency are so obvious s.s not to require extended reference. They are the increased
economy of operation that would result from diminished overhead
expenses
diminished, costs of issue and redemption of notes, etc.
Cut however important these and similar considerations of a strictly
business nature, there are in the opinion c,f. your co_ittee, adminis-
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Federal Reserve Bank of St. Louis
•
-8-
-413-
ministrative advantaaeseoi' a largQ ;Ind compollIng character that
would result from a well conceived readjustment of the districts.
(1)
The Federal ..eserve syste1.1 is still in the developmental
stage; the test ef Lti ca-leacity is still to come.
The primary re-
sponsibility for makfeee, it a success rests with the Federal Reserve
Boarci.
In the opinion of your committee, experience already shows
the erly..rrassment
the Board may expect in dealing .eith and
through units that are weak.
Effective decentralization of banking
facilities, we believe, depends not merely upon the number of Federal
Reserve Banks but upon the vigor with which they function.
To achieve
the purposes of the Act thc component units of the Feeral Reserve
syo
.tem must
strong enough in t ;;Lsives to be effective, large
.
enough to co:eL,anc, respect, and extive enough to exert a continuous
and decisive influence in the banking affairs of its district. This
means that in the less yell developed and settled parts of the country
a welliconstructed district muTt embrace a territory sufficiently
wide in extent and diversified in its interests to give ba,Ince to
its banking situation, and not too much tied up to a cdrisle crop or
line of industry, e,nd that everyydistrict should be free from any
sugestion of sectionalisre.
) L reduction in the districts eill help the working
out of the check clearing and collection 17;roblem by securing a sub,
tr.sury in every district as well as by reducing the overhead expense' and hence, overcoming one of the obstacles to the undertaking.
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Federal Reserve Bank of St. Louis
•
-413-
(3)
Last and perharo Lost import.,;.t
st not let the fact that
le reservo banking sy3teL ha..4 zone through the first year of its opration without ally liatowaw.d evont in its life, misleaa or deceive
Us
as to the future.
responsibilities if
We should, as a Board, be unworthy of our
did not realize that severer tests than any
to .anich the system has yet been expsed might be expected.
Sooner
or later this test will core and -:;.hen it corxs it will cole with
a suddenness and abruptness for vtioh we uust now prepare.
Fcon-
or.lists and financi:Ts are not agreed as to precisely what thc situation will be when the war is over.
fronted with a ;ik
;antic proble
That th,. world A.11 be con-
in inuustrial, co
ercial and fi-
nancial reconstruction as a result of the disorganization of credit,
coramerce and industry wrought by the
r and tho destruction of
life and property is, hovever, agreed. No one can pretend at this
time to calculate /iti accuracy the extent of the shock to vihich
our banking and credit system wilLbe subjected, but it is
tain to be of extraordinary sovLrity an4 oxtnt.
. cer-
Readjustillents
in the .Jorld of commerce and finance ouch as the world has not seen
since th,, close of the Napleonic wars iil1 have to be worked out
and we, as a nation, must be ready to meet alike the necessities
and the opportunities of the new and changed situation, and for
this purpose our chief r€liance must be the perfected Federal
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Federal Reserve Bank of St. Louis
-10-Reserve System.
-413-
This Leans, in tne jydgment of your Committee that
all the several reserve hilnks raust be made capable and strong
,
ble arri. accuritoed to act with promptness, with vigor, ';:ith intellience, and when neuesry, in concert with one another, and
in subordinatior to broadly conceived policies national in their
scope and purpose.
Of the twelve Federal Reserve Banks one-half may be said
to be strong %lid th3 nther ha'- .
f loak.
The remedy for this situation,
in the opinion of your committee, is such a readjustment of the
districts as will leave us with perhaps eight or nine districts,
all of adequate extent and banking power aid each able to suppor
t
a strong and active regional center.
Your committee has reached
this conclusion only after much reflectiun and not
ithout con-
sideration of the obstacles, legal, political, and administrative,
which will be encountered in working out a program along the lines
indicate(:..
It is our belief that the members of the Federal Re-
serve Board
not be deterred from fidelity to their hiLher
and more difficult responsibilities by any adventitious considerations, or by local and personal sympatnies.
It ought tnerefore,
in our o:dnion, to be possible for the board to act in substantial if not coLplete accord on this question if we keep
steadily
in mind the best development of the Federal Reserve System
and
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Federal Reserve Bank of St. Louis
•
sot our lo - Iv to i1.o syst9m ,Abov
and byond any othcr. Both
the Fecler....i aeservii Boara -nd tic Fed.ir,L1 Lescrve
ar , still
on trial before the bar of public opinion anc advantage will be/
taken o; every real or imagined difference of c*injon in the Board
by its critics and the enemies of the Federal Reserve System
. We
should not hesitate, however, because of this difficulty;,prompt
ness and unanimity of action is the way to meet it.
ConcTesc had
n mind when it made the provision
that the Federal Reserve Boara might add to the
number or reclassify •
the cities heretoNre classified as Reserve and Centr,
1 P:eserve
Ciies is evidet :And it seems reasonol._s to draw the
conclusion,
in vie-.; of
diferences in reserve requirements, that cities
of sufficient L:r.otance as banking centers to be named Federa
l
Reserve C..,:nters sllould also be classed as Central Reserve
Cities
and their reserve requirements raised to 13%; :Jherea
s, cities
which , fror, their geogrc.phical position and
rank in the banking
Jorld, might be classea as branches of Federal Reserve Banks,
should be classed as Reserve Cities.
To acceept this reasoning and adopt this groupi
ng of
the cities
oule not only strengthen the Reserve Banks by
increasing
their reserve deposits, but . ould also effectively
.
inhibit cities
without adequate banking status from seeking the
benefits of
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Federal Reserve Bank of St. Louis
-413
recognition as Feder al Reserve Cities, -dthout being willing to
accept the burdens and responsibilities which should be a
..
sary concomitant of the privilege. Your Committee believes that
such a rule should be adopted by the Board and that it would so
far towardfacilitating any readjustment of the districts.
Your coLuittee, having presented the case for redistricting in its general aspects, before making further report and submitting a definite program asks instructions on the following :
(a)
Shall the committee prepare and submit a plan of
changes in district boundaries involving the consolidating of adjoining districts and reduction in the number of districts ?
or
(b) Shall the coi.hAttee proceed to recomAend answers
to each of the five cases now on appeal
befote the Board without
touching the larger issues involved
in a comprehensive handling
of the redistricting problem ?
Respectfully submitted,
(
F. A. DELANO
• 4.
P..11. WARBURG.
Committee(
(
Appendices attached .
11/13/15
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Federal Reserve Bank of St. Louis
W. P. G. HARDING
Appndix 1.
Per Cent
of Share
of Capital of
F. R.Bank
paid-in
by member
banks in
Cities
Namd.
Por.Cent
of Share
of‘tietal
paid-in
capital
of all
F, R.
Banks.
Aggrogate
Capital
Surplus of
Member banks
Scpt.2, 1915
3 Per Cent
of CaFito.1
and Surplus
of lcmber
Bank, Sept.
2, 1915.
$57,077.,000
2,'/.50,000
l,600,000
3,200,000
3,025,000
1,930,000
1,800,000
$1,712,130
82,500
48,000
96,000
90,750
57,900
54,000
35.2
1.5
0
1.9
1.8
1.1
1.0
Now Haven, Conn.
Hartford,
6,820,000
6,950,000
204,600
178,500
3.5
.3
.3
Concord, N. H.
Portsmouth,
Manchostor,
Koene,
1,150,000
540,000
1,300,000
1,100,000
34,500
16,200
39,000
33,030
.7
.3
.3
.6
.1
.0
.1
.1
Providence, R. I.
8,850,000
265,500
5.1
.5
Portland, Maine
3,125,030
93,750
1.8
.2
100,211,000
3,006,330
58.2
5.5
100.3
9.4
Name of City.
1. Boston, Dass.
Worcestor,
Lowell,
S2rinsfield,
Fall River,
Haverhill,
Holyoke,
Total, Above
Cities
3.1
.1
.1
.1
.1
.16
TDT.,..L for DISTRICT
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Federal Reserve Bank of St. Louis
172,409,385
5,72,282
•
ri'rr'riix 21
.Aggregate
3 Per Cent
cap. &
of cap. &
surplus of
surplus of
Eeber banks,meiaber banks
Sept. 2,
Sept. 2,
1915.
1915.
Name of City
2.New YorkCity
Buffalo
Rochester
Syracuse
Albany
Per Cent
of share
of cap.
of F.R.
Bank paidin by member banks
in cities
named.
Per Cent
of Share
of tatal
paid-in
cap. of
all F.R.
banks.
243,425,000
12,100.000
4,275,000
4,235,000
4,300,000
7,302,750
363,000
128,250
127,050
129,000
66.4
3.3
1.2
. 1.2
1.2
13.3
.7
•2
.2
.3
2,200,000
1,060,000
10,644,000
66,000
31,800
319,320
.6
.3
2.9
.1
.1
-6
-ota ,Above Cities
,2,239,000
8,457,170
77.1
15.5
TOTAL for DISTRICT
364,526,860
10,c.35,806
100.0
20.0
3.Phi1ade1phia,Pa.
Scranton
Reading
Wilkes Barre
Allentown
Lancaster
Chester
York
Johnstown
61,430,000
6,200,000
4,750,000
3,750,000
2,725,000
2,332,000
1,985,000
1,953,000
1,800,000
1,344,400
186,000
142,500
112,500
81,750
69,960
59,550
58,590
54,000
35.0
3.5
2.7
2.2
1.6
1.3
1.1
1.1
1.0
3.4
.3
.3
.2
.1
.1
-1
.1
.1
.*2_12eI
1114-11
1
ia17Above Cities
cd-
1
.1203J 175
88,178,175
36 095
2,645,345
.7
50.2
.1
4.8
TOTAL FOR DISTRICT
175,396,550
5,261,956
100.0
9.6
Jersey City,N.J.
Hoboken
Newark
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Federal Reserve Bank of St. Louis
-413-
AF7T-7\1 "FY 3.
Aggregate
capital
s'.Arplur.i of
;fl.ember banks
Sept. 2,
1 9 1 5.
3 Per Cent
of cap. &
surplab of
member banks
Sept. 2,
1 9 1 5.
.14,403,000
20,550,000
432,000
61.
1,503
7.
1.0.4
1.1
Pittsburgh,Pa. 46,460,000 1,393,80q
Washington,"
2,209,000
66,27C
Erie
2,050,000
61,500
*-4
-..
Total, Aboveaties 85,669,000 2,570,070
23.4
1.1
1.0
2.6
.1
.1
Per Cent
of share
of cap.of
F.R.Bank
paid-in by
member banks
in cities
named.
NArE OF CITY
4.C1eveland,O.
Cincinnati
*4
4-
Y
4
*
5.Richmond,Va.
9,685,800
Baltillore,rd. 19,005,710
Washington,D.C. 12,669,250
Total,A;Dvc,Cities
TOTAL for DISTRICT
439
*
*
296,574
570,171
380,077
41,560,760 1,346 1822
111,645,470 3,349,364
.a
_
43.2
4-
*
*
4.7
100.0
TOTAL for XT.,. 198,020,099 5,940,603
TRICT
-Y
Per Cent
of Share
of total
paid-in
cap.of all
F.R.banks.
10.9
4
4
*
*
7
-Y-
*
8.8
16.9
11.3
.6
1.0
.7
37.0 -----
2.3
100.0
6.1
*1-444,************************************************4**4***********4444**44
6.Atlanta,Ga.
Eirmingham,Ala.
New Orleans,La.
8,600,000
3,300,000
6,730,000
258,000
99.,000
201,900
Total,AtovoCities
18,630:0 0
0
558,900
TOTAL for D13TRICT
10.7
4.1
8:3
.5
.2
.3
80,408,7147 2,412,262
100.0
4.4
7.Cbicago,I111
74,975,000 2,249,250
Indianapolis, Incl. 9,730,000
291,900
Eilwaukee,Wis. 9,800,000
294,000
Ntroit lach. 10 250 000
307 500
Total, Almte Ciddes 104,755,000 3,142,650
34.0
4.4
4.4
4.6
47.4
4.1
.5
.5
.6
5.7
160.0
12.1
TOTAL for DISTRICT
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Federal Reserve Bank of St. Louis
221,263,906 6,637,917
-413APP7NDIX 4.
ALzrepte
Per Cent
Per Cent
Cap. &
of Cap.
of share
Surplus of
surplus of
of cap.
member banks,member
of F.R.
Sept. 2,
. Lank paidbanks
1915.
2, 1915.
in by Lio;:iber banks
in cities
Name of City.
Per Cent
of share
of total
paid -in
cap. of
all F.R.
banks.
.
18", - -- 4O,0e0 6
231,90
71 700.2COO
-.
-----__ 0
46,340,000
1,390,200
isville
.
Total, Above Citic.:s
2 .1
8.2
49.6
2.5
TOTAL FOR DISTRICT
'92,670,447
2,780,113
100.0
5.1
9.Minneapolis,Y.inn.
St. Paul
Duluth
Totul,Above Cities
16,960,000
10,100,000
3 950 000
31,010,030
53E,800
303,000
118 500
930,300
20.0
12.2
4.7
36.2
.9
.6
.2
1.7
TOTAL FOR DISTRICT
84,704,850
2,541,145
100.0
4.6
10. Kansas City,E0.
13,556,300
406,660
Omaha, Nebr.
8,233,000
247,050
..._ Denver,Colo.
7 288,P.9.9..........2)-8..64.9
Total-- - ,ties
'
,A ove CY-- ---------j----/000
29,079
872,37v ;
TOTLL FOR DISTRICT
11. pallas,Tex.
Ft.Worth
Houston
Galveston
San .
.
t
intonio
Total,Above Cities
TOTAL FOR PISTRICT
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Federal Reserve Bank of St. Louis
101,089,245
•••
7,271,560
4,300,000
7,250,000
800,000 .
3. 840 000
23,461,500
91,991,961
13.5
8.2
.7
.5
.4
7'2------ -- 17.76T---- 28.9
5,032,577
100.0
5.6
218,145
129,000
217,500
24,000
115 00C
703,845
7.9
4.7
7.9
.9
4.1
25.5
.4
.2
.2
1.2
2,759,759
100.0
5.0
Apl,cnciix 5.
Por Cent
of Share
of Capital of
F.R. Dank
paid-in
by member
banks in
Cities
named.
Per Cent
of Share
of total
paid-in
capital
of all
F. R.
Banks.
Acgr,:gato
Cafital
of
1.errber banks
Sept.2, 1915.
3 Per Cent
of Capital
Surplus
of Y.ember
Banks, Sept.
2, 1915.
12. San Francisco,Ca1.45,185,000
Seattle, Wash.
5,390,000
Portland, Oro.
7,900,000
Los Angoles,Cal. 9,775,000
Salt Lakc City,
Utah
3,280,000
1,355,550
161,700
237,030
293,250
34.5
4.1
6.0
7,5
2.5
.3
98,400
2.5
.2
Nam.:; of City.
.5
Total, Above
Cities
71,530,000
2,145,900
54.6
4.0
TOTAL for DISTRI3T
131,435,490
3,943,065
100.0
7.2
TOTAL for 1:E=R
Banks in Specified( 922,663,435
Cities
27,679,902
50.5
24,549,983
44.8
30,216,967
55.3
TOTAL for LEI1ER
Banks in all
Reserve Cities
( 314,999,450
) -
TOTAL for COUNTRY
.Banks
)
(1010,565,557
TOTAL for ALL
MIER BANKS
)1,825,565,007 54,766,950
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Federal Reserve Bank of St. Louis
100.0
103.0
41 ?
Ap3rdix 6.
LIST OF CI= =TING PaCENTAGE or CAPITAL
THEIR=7= ;NY.E; SEAR TO TE =IRE CAPITAL OF
TiiICH
TET TIIERAL RZSERVE
..ercentago
(Citius are listud in accordarce with 1thoir capitctl in th,7; Federal Rosol-ve Sy.stem)
of
(1.6nk)
7
1. Few York ,
(Perc:
.ntac.u) (Rank)
13.3
19.
lAili;-ukee
(Porcontage)
.5
2,
Chicago
4.1
20.
Los Angclos
.5
3,
Phila'3.elphia
3,4
21.
Indianapolis
.5
4.
Boston
3.1
22.
Providence
.5
a
5.
Pittsburgh
2.6
,o.
Atlanta
6.
San Francisco
2.5
24.
Omaha
.5
7,
3t.
2.1
25.
Portland, 01;.
.
I la
St. Paul
combind)
1.5
E.
Cincinnati
1,1
13:.
Louiz:ville
4.4
9.
Baltimore
1.0
27.
D.:nver
.4
.4
10.
Einneapolis
.9
28.
Dallas
11,
Cleveland
.8
29.
Houston
12.
kansas City
.7
30.
Now Haven
13.
washington, D. C.
.7
31.
Now Orleans
,3
14.
Luffalo
.7
32.
Scranton
.3
15.
Newark
.6
33.
Hartford
.3
16.
Detroit
..,6
34.
Soattlo
.3
17.
St. Paul.
.6
35.
Reading, Pa.
.3
18.
Richmond
.6
36.
Albany, N. Y.
.3
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Federal Reserve Bank of St. Louis
.0
EX-OFFICIO MEMBERS
/
/
CHARLES S. HAMLIN. GovERNoit
FREDERIC A. DELANO. yoltE Goyz_RNQ
PAUL M.WARBIJRG -- v
.2
---- W. P. G. HARDING ,
.
1
,...
6 1 ADOLPH C,,Illa LLEC,„I A ii Li 1
_
0
•
WILLIAM G. McADOO
SECRETARY OF THE TREASURY
CHAIRMAN
JOHN SKELTON WILLIAMS
COMPTROLLER OF THE CURRENCY
, t, ti
r
,
FEDERAL RESERVE BOARD 1- E.Ddlt " ' H.
i "
\-.-
PARKER WILLIS, SECRETARY
ADDRESS REPLY TO
WASHINGTON
FEDERAL RESERVE
October 31st, 1114.
Mrs. Woodford:-
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Federal Reserve Bank of St. Louis
Please prepare letter to all petitoners asking
for change of designation of Federal Reserve cities,
or redistricting of Federal Reserve districts, for
' the signature of the Secretary to the Board in the
following form:
Sir: In reference to your petition asking
(herein insert substance of petition)
, you are advised that owing to the pressure
of detail matters demanding the Board's attention
at this time incident to the opening of the several Federal Reserve banks and placing the system
in operation, the Board has found it impracticable to fix a date for oral hearings prior to
November 16th, at which time it is contemplated
the Federal Reserve banks will be opened.
that
As soon thereafter as the Board can
conveniently do so it will arrange a date for
oral argument and you will be given notice so that
you may be prepared to present your ase to the
Board.
Respectfully,
Secretary.
BOARD
October 29, 1914.
Sir:
At the regular meeting of the Federal Reserve Board on October
27th it was voted to inform all petitioners for redistricting af
Federal Reserve districts, or for changes of designation of Federal
reserve cities, that no dates will be assigned for arguments until
after the establishment of the Federal reserve bunks, but that
such postponement will not prejudice the petitioners as to the
merits of the case, nor will any payments made towards the
capital stock or of reserves in any wise prejudice the final
decision of the matter.
Respectfully yours,
,
A letter as above to be sent to all people
on list to be furnished by Judge Elliott.
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Federal Reserve Bank of St. Louis
•
EX-OFFICIO MEMBERS
WILLIAM G.,McADOO
SECRETARY OF THE TREASURY
CHAIRMAN
JOHN SKELTON WILLIAMS
COMPTROLLER OF THE CURRENCY
CHARLES S. HAM LIN, GOVERNOR
FREDERIC A. DELANO, VICE GOVERNOR
PAUL M.WARBURG
W. P. G. HARDING
ADOLPH C. MILLER
FEDERAL RESERVE BOARD
H. PARKER WILLIS, SECRETARY
ADDRESS REPLY TO
WASHINGTON
FEDERAL RESERVE BOARD
October
Dear Lir. Allis:
As I unierstand it a motion was made and voted upon to
inform(all petitioners for redistricting of Federal reserve
districts, or for changes of designation of Federal reserve
cities, that no dates will be assi,;ned for arguments until
after the establishment of the Federal reserve banks, but
that such postponement will not prejudice the petitioners as
to the merits of the case, not will any payments made towards
the capital stock or of reserves in any wise prejudice the
final decision of the matter.)
Very sincerely yours,
it,...41.04.41LiCaPi4.0.6.....4"4415
Dr. H. Parker
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Federal Reserve Bank of St. Louis
Secretary, Federal Reserve Board.
,4riezz.
EX-OFFICIO MENIEVS
MUMMS.MCADOO
SECRETAEY OF THE Tilt
V
clim,,A,01
k..,,
JOHN SEE TOR WiLLIAA
ROLyt rt!OF MX:CURRENCY
CO MO
—
CHARLES S. HAMLIN, GOvEP,MoR- --1
FREDERIC A. DELANO, VICE GOVERNOR
PAUL M.WARBURG
W. P. G. HARDING
kV
ADOLPH C. MILLER
r EtAMr..
FEDERAL RESERVE BOARD
PAR KE2 WILLIS, SECRETARY
ADDRESS REPLY TO
/
WASHINGTON
FEDERAL RESERVE BOARD
l
.
:
je
October 21, 1911:
Mrs. Woodford:Please prepare for the signature of the Secretary
to the Board a letter to the Chairman of the Eoard of Directors of the Federal Reserve bank in each district in which
r
an ap.,licntion has been filed by any of its member banks to
The letter should be as
be transferred to another district.
follows:
There is enclosed for your infomation
copy of Regulation Yo. 1_ governing the method
of procedure in appealing from the decision of the
Reserve Bank Organization Committee.
You will observe that where banks as members of one Federal Reserve Rank request the Feder.oard to review the decision of the Oral Reserve 7
ganization Committee and to transfer the territory
in Ahich such banks are loclited to another district,
a petition to this effect should be referred to a
representative selected by the Federal Reserve Dank
for reply.
Petitions have been filed in this office
for transfer of some of your member banks and you
are accordingly requested to designate some representative (preferabl? an attorney) to whom such petitions and briefs Piled in support thereof may be
referred for reply.
Respectfully,
Secretary."
..
iircotoomwicopororwA~IiiiitiCalielLtOrib*40,‹Jk1,44,,WW."
-t
1
)11/k
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Federal Reserve Bank of St. Louis
0
EX-O FFIC., MEMBERS
'
WILLIAM G. McADOO
SECRETARY OF THE TREASURY
CHAIRMAN
JOHN SKELTON WILLIAMS
FED RAL RESERVE BOARDt
COMPTROLLER OF THE CURRENCY
CHARLES S. HAMLIN, GOVERNOR
FREDERIC A. DELANO. VICE GOVERBOR
PAUL M.WARBURG
W. P. G. HARDING
ADOLPH C. MILLER
WILLIS, SECRETARY
t
°DRESS REPLY TO
WASHINGTON
FEDERAL RESERVE BOARD
October 17, 1914.
Dear Mr. Warburg:
I have your memorandum of October 16th, enclosing opinion
of our Counsel, Ur. Elliott, on the subject of the statuatory right
of review by the Federal Reserve Board.
I agree entirely with Mr.
Elliott's conclusion that the power to readjust Federal reserve
districts from time to time was not intended to cut down the power
of review by the Federal Reserve Board, whatever that power may be as
to such districts.
The powers given are:
United States into districts;
districts;
first, to divide the
second, the power of review as to such
third, the power to readjust the districts thus created;
fourth, the power to create new districts not to exceed twelve in all.
It would seem to me that the first three of these powers do not in
any vay conflict with one another.
I also agree with Mr. Elliott in the statealent that under
our rules of procedure, all questions of law are open for argument,
and, therefore, I think we should not undertake to decide this question
at the present time.
::or do I see any difficulty, assuming that we
have a power of review, in the way of our exercising this power at
any time.
This leads us to the question of what our power of review
really covers.
On this question I should prefer to express no opinion
until we heve heard the arguments, end have been assisted by our Counsel,
and, in fact, I have reached no conclusion upon this queetion.
I will,
hovever, state some of the questions which will probably be raised.
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Federal Reserve Bank of St. Louis
You will notice that Section 2 states that the determination
of the Organization CoLnmittee rhell not be subject to review except ly
tl.e Federal Reserve Bcerd, when organized.
"determinntion" mean?
What does this word
It might be argued that the second peragraph
of Section 2 really defines this term.
In this pnrvgraph it is pm-
vided that the Committee Aay make such investigetions us it my deem
necessary in detsrminine the reserve districts an
in desieratine
the cities vrithin such ('istrict where such Federal recerve banks
shall be located.
It might be claimed that where the first paragraph
says that the determinvtion of the Organization Committee rhall be
subject to review only by the Federal Reserve Board, that what is meant
is that the determination of the Federal reserve districts is the only
question that shall be open to review, and that the designation of the
cities is final, when once made by the Organization Committee.
It might be pointed out in favor cf this construction, thet
the proviso following the reference to the determination of the
Committee has wholly to do with the districts end hes nothing to do
with thc clesienation of the Federal reserve cities.
On the other
hand, it might te pointed out that this is a very narrow construction
of the word "determinetion", and that if this word did not embrace mere
than apportionment of the districts, it Iqould not have been necessary
to give the Board distinct
from time to time.
power to readjust and create new districts
In other words, it would probably be claimed that
the eord"determination" is a broad term, covering both the designation
of the Federal reserve cities and determination of the Federal reserve
districts.
As I have said, I have reached no corcluFion on this question
but I ar.i thoroughly satisfied that whether or not we have tr.f li6ht to
review Loth the deterAinatior es to districts, and the designation
of the Federal reserve cities, such right will not in any way be
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Federal Reserve Bank of St. Louis
--3-1
Lffecte, by opel.int the rpserve banks, but that our right, if there
:
1
be a right, can be exercised at any time.
The point,
or
course,
may be talon that unless an application for review L., filed rithin
a reasonable time, it will not be entertained
by
the Board, but
assume that the pending applicz-tions rere seasonably
agree with you that it ,
po:z1d be well to take up this matter at our
next hieeting.
Very sincerely yours,
Hon. Paul :1. Varburg,
7ederal Reserve Board.
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Federal Reserve Bank of St. Louis
,SFOCIO
MEMBERS
CHARLES S. HAMLIN, GOVERNOR
FREDERIC A. DELANO. VICE GOVERNOR
PAUL M.WARBURG
W. P. G. HARDING
ADOLPH C. MILLER
-LIAM G. McADOO
SECRETARY OF THE
TREASURY
CHAIRMAN
JOHN SKELTON WILLIAMS
COMPTROLLER OF THE CURRENCY
FEDERAL RESERVE BOARD
H. PARKER WILLIS. SECRETARY
ADDRESS REPLY TO
WASHINGTON
FEDERAL RESERVE BOARD
October 15th, 1914.
My dear Mr. Warburg:-
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Federal Reserve Bank of St. Louis
In re power of the Federal Reserve Board to
review the determination of the Organization
Committee in the matter of designation of
cities and defining districts to be served.
The statutory right of review by the Federal
Reserve Board is contained in the first paragraph of
Section 2 of the Federal Reserve Act. The specific language is as follows "The determination of said organization Committee shall
not be subject to review except by the Federal Reserve Board when organized.*********The districts
thus created may be re-adjusted and new districts
may from time to time be created by the Federal Reserve Board not to exceed twelve in all".
The question arises whether the last sentence
shall be construed as qualifying the first And as defining
the extent of review by the Federal Reserve Board. That
is to say, was it intended by Congress that the right of
review vested in the Federal Reserve Board should be limited to re-adjusting the districts from time to time or
did it intend to vest in the Board the power to consider
the whole subject ab initio and to affirm or reverse the
decision of the Organization Committee in any or all of
Its details.
The word "determination" is variously defined
- "The act of deciding; judicial decision as of a
as
controversy; authoritative or final conclusion as to
any point of inquiry".
The dictionary gives as a synonym the word
"decision".
Giving the language its broad, general meaning,
therefore, it would seem that the power to review the
decision of the Organization Committee is vested in the
Federal Reserve Board in addition to the power to re-adjust the districts from time to time.
It seems proper, however, to call attention to
the fact that this is one of the questions which, under
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Federal Reserve Bank of St. Louis
I
Mr. Warburg - No. 2.
the method of procedure for anpeal prescribed by the
Federal Reserve Board is left open for discussion
upon the hearing of the appeals filed.
As the statute fixes no time limit for the hearing of these appeals it is probable that this review To avoid, however,
could be had at a later period.
of estoppel on account of the
any possible question
right of member banks having becoming fixed, it would
seem desirable to dispose of this question of review
as soon as can be conveniently done.
Respectfully,
Hon. Paul M. Warburg,
Member, Federal Reserve Board.
Counsel
r
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Federal Reserve Bank of St. Louis
-----------
BOARD ME\
FED3P,L Ri....SERVE
September 23 1914. -•
•
111117.1..TAT,
In tho r:L1-,ttor oi
fro:-
or tho
Ilecort;: 13:An% Orr,caliaItion Ccxttor- , it nproc.r3 from au):
.
,
3
records that on1,7to oitiv hays ?i1i fermi
rotition
to be desigm.tod ari the radon:Li Paserve City of the district in p)...,:.te of the Federal Reserve City r.anect by the
Committee.
Both Baltir.o...c..;
tions and. briefs.
,Ld.
W8 Zii!•_1
roti-
Richmond :12.a lisen n.otiried ona tho
mombar banks loci-zted in Richmoni have de3ign..:_teci repro
3ntativ3s to answer the netition.
:Ind
Copi3s of patition
brief are boing mailed to these roprc:senta.tives.
In the case of Cleveland the reprosentative
has
not boon eelocted by the try.ember banks in Cleveland,
and
oecond notiou ii br.3ini L
; -Ltilell today, calltx,-. Lleir at.
tentio- ). to thi:i
.
In P.
111.3
b!::1. '1 IL,'..vt3 Zilod rotitionr.).
,t :.`s; a oortc,in portion of ono ter:'..tozy
.
trv...nzforred to .inother
Uh-lor ;'o ! nol of pro--)
co,iuro pros...:rib.d in :17.1.7.h a !Ion, th
Bo=aof Dir:)ctorr; o:
the C1eve1f:z.1 bank in authoo1.7.od to oelect
tho roprosentativo anl not th2 'xnber banks of the Federa
l Rosary° City.
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Federal Reserve Bank of St. Louis
Class "A" =lad,
"Bn Dirooter3 are authorized to net
..ont Of the Class "0" Director3 in
i.
pending the ar-:..eintr.
t-
ing the representative.
2
In view of the - Lict that Class "C' Directors will probab4
be cl:,-rointed in the near future, is it the desire of the Board
that the Class "A" Lind Class "B" Directors be convened at this
time for the purpose of selectilar a representative; or shall this
LI:Ater be deferred. until the full Boani of Diroctorz cal be or,
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Federal Reserve Bank of St. Louis
r2MORANDUU
FOR
JUDGE
ELLIOTT.
In the natter of appeals from decision of Reserve
Bank Organization Committee in designation of Federal Reserve cities and districts:
Petitions have been filed, as follows:
PITTSBURGH:
Brief and petition of Pittsburgh banks praying
that Pittsburgh instead of Cleveland be designated as
federal reserve city, in district No. 4.
Petition and 25 copies of brief received and
filed August 12, 1914.
Cleveland banks notified on Sept. 15, and requested to select a representative to appear for Cleveland.
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Federal Reserve Bank of St. Louis
Ips)
•
T.MIORANDIRT FOR JUD 17 PILTOTT
In the matter of appeas frorl decision of
Reserve BInk Organization Committee
in designation
of Federal Reserve cities and districts:
Petitions have been filed as follows:
WEST VIRGINIA:
Petition signed by all banks of Wetzel and
Tler countie;, requesting trwasfer of these tilo counties
from District No. 5 to District No. 4.
Petition received and filed August 27, 1914.
20 copies of brief received and filed September
15, 1914.
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Federal Reserve Bank of St. Louis
MEMORANDUM
FOR
JUDGE
ELLIOTT.
In the matter of appeElsf ma decision of Reserve
Bank Organization Committee in designation of Federal Re—
serve cities and districts:
Petitions have been filed,
33
follows:
OKLAHOMA:
Petition signed by 104 National banks in Southern
Oklahoma requesting transfer from District No. 11 to District
No. 10.
Petition and 20 copies of brief received and filed
September 15, 1914.
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Federal Reserve Bank of St. Louis
LIEMORANDUr
FOR
JUDGE
ELLIOTT.
Regulation No. 1, prescribing the method of procedure in appeals from the decision of the Reserve Bank
Organization Committee, was sent to the following banks
on Sept.
A, 1914, in response to protests filed:
District No. 1.
CONNECTICUT - Requesting transfer to New York
district:
Ansonia Natipnal Bank,
Ansonia, Conn.
First-Bridgeport National Bank,
Bridgeport, Conn.
Birmingham National sank,
Derby, Conn.
LIENORANDUU
DISTRICT
FOR
JUDGE
ELLIOTT.
No. 3. - NEW JERSEY - Requesting transfer to NEW YORK
district.
Northern part of New Jersey
Per Hon. W. E. Tuttle, Jr.,
Hon. 7. I. LcCoy, and
Hon. E. W. Townsend.
National Newark Banking Co.,
Newark, N. J
Carlstadt National Bank,
Carlstadt, N. J.
New Brunswick Board of Trade,
New Brunswick, N. J.
Clinton National Bank,
Clinton, N. J.
Middlesex County, National
New Brunswick, N. J. •
Elizabeth Board of Trade,
Elizabeth, N. J.
Board of Trade,
New Brunswick, N. J.
National State Bank,
Elizabeth, N. J.
Group No. 1 of the N. J. Bankers Assn.,
Perth Amboy, N. J.
Essex County Bankers Assn.,
Essex County, N. J.
Passaic Board of Trade,
Passaic, N. J.
The Flemington National Bank,
Garfield, N. J.
Peoples Bank and Trust Co.,
Passaic, N. J.
First National Bank,
Garfield, N. J.
The Associated Banks of
Passaic, N. J.
First National Bank,
Hoboken, N. J.
Paterson National Bank,
Paterson, N. J.
Commercial Trust Co.,
Jersey City, _I. J.
First National Bank,
Perth Amboy, N. J.
New Jersey Bankers Association,
Jersey city, N. J.
First National Bank,
Plainfield, N. J.
First National Bank,
Lyndhurst, N. J.
Second National Bank,
Red Bank, N. J.
Essex National Bank,
Hontclair, N. J.
First National Bank,
Ridgewood, N. J.
Newark Board of Trade,
Newark, N. J.
Board of Trade,
Summit, N. J.
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Federal Reserve Bank of St. Louis
Rutherford National Bank,
Rutherford, N. J.
Peo, les National Bank of
Westfield, N. J.
TI
DISTRICT
No.
5.
BALTINORE - (brief filed)
WEST VIRGINIA - Requesting transfer of Tyler and Wetzel Counties
from District No. 5 to District No. 4:
First National Bank,
Sistersville, W. Va.
First National Bank,
Liddlebourne, 'W. Va.
Farmers & Producers National Bank,
Sistersville, 7. Va.
First National Bank,
New lartinsville, VI. Va.
Peoples National Bank,
Sistersville, 71. Va.
Senator 7414 E. Chilton,
West Virginia.
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Federal Reserve Bank of St. Louis
•
DISTRICT
No.
6.
Protests against failure of Reserve Bank Organization Committee
to designate :Taw
ORLEANS
as a Federal reserve city:
New Orleans Association of Commerce
Lartin Behrman, Mayor of New Orleans
Louisiana State Chamber of Commerce
John S. Seymour
Vicksburg (Miss.) Clearing House Assn.
Gulfport (Miss.) Commercial Union
H. P. Todd, Natchez, Miss.
TENNESSEE.
CIARKSVILLE
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Federal Reserve Bank of St. Louis
banks requesting transfer to ST. LOUIS districts
Clarksville National Bank
First National Bank
First Trust & Savings Bank
Northern Bank of Tennessee
Hon. Joseph 7. Byrne.
•
DIJMICT No. 8.
ILLINOIS.
Ayres .National Bank, Jacksonville, Illinois, transmitted by
Hon. W. J. Bryan, requesting that :.()rsan County, Illinois,
be transferred to CHICAGO District.
First National - Bank cf 7ovay, Lidiaila, protesting against being
place:: in
T. LOUIS District.
lissoum.
First National Bank, Cowgill, :Assouri, protesting against
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Federal Reserve Bank of St. Louis
Caldwell County, :assouri, being placed in OT. LOUIS District.
DISTRICT
No. 9.
MICHIGAN - Protests against being placed in Minneapolis district;
prefer CHICAGO.
G. H. Reynolds, Pres., Continental & Commercial "Tational Bank
of Chicago, transmitting petitions bearing 271 names of ousiness
concerns located in the Upper Peninsula of Michigan, praying for
change to Chicago district.
Menominee Commercial Club
Commercial Bank of Menominee
First ITational Bank of Escanaba
P. H. O'Brien, Circuit judge, Houghton
Houghton :Tational Bank
First ITational Bank, Iron Mountain
Miners' National Bank, Ishpenning
First 1:ational Bank, Marquette
Marquette Commercial Club
WISCONSIN - Protests against being placed in Minneapolis
district.
Senator Isaac Stephenson,
Representatives Edward E. Broune, Thomas F. Konop, id:
K. Reilly,
transmitting protests from that part of Wisconsin assigned
to Hinneapolis.
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Federal Reserve Bank of St. Louis
Citizens Bank, Algonia
Commercial Club of Antigo
Citizens National Bank, Appleton
First National Bank, Ap leton
Chilton National Bank, Chilton
Coleman State Bank, Coleman
First National Bank, Crandon
First National Bank, Dale
7IJC NJIN - Continued.
Dalton State Bank,
Dalton, Wisconsin,
National Baal: of -, De Pere, Wis.
Citizens National Bank, Green Bay, Wis.
Farmers j: Lerchants Bank, Lena, Wis.
Stephenson National Bank, i:arinette, Wis.
Citizens 1:ational Bank, Lierrill, Wis.
Lerchants
I:anufacturers Association, :,:ilwaukee, 71s.
Citizens National Bank,
Oconto, Wis.
State Bank of unconto Falls, Onconto Falls, Wis.
First Natiunal Bank, Shawano, 7is.
German-American National Bank, Shawano, Wis.
Citizens State Bank,
Sheboygan, Wis.
Citizens National Bank,
Stevens Point, Wis.
First National Balk,
Stevens Point, Wis.
First National Bank,
Wausau, Wis.
First National Bank, 7eyauwega, Wis.
Resolutions signed by all banks in Fox River Valley,
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Federal Reserve Bank of St. Louis
•
e•
1,IEMOBA1WUM F02 JUDGE ELLIOTT.
;
DiSMICT No. 10 - NEBRaSKA - Requesting transfer to CHICAGO
DISTRICT No. 7.
First National Bank,
.1rlington, Nebr.
City National Bank,
Omaha, Nebr.
Pir.:)-t National Bank,
Bayard, Nebr.
Commercial Club of Omaha,
Omaha, Nebr. (aesolutions from)
First National Bank,
Elgin, Nebr.
Lorchants National Bank,
Omaha, Nebr.
The Fullerton National Bank,
Pullc;rton, Nebr.
Nebraska National Bank,
Omaha, Nebr.
First National Bank,
Gering, Nebr.
The Hartington National Bank,
Hartington, Nebr.
Omaha Clearing House Association,
Omaha, Nebr.
•
Omaha National Bank,
Omaha, Nebr.
First National Bank,
Harrison, Nebr.
United States National Bank,
Omaha, Nebr.
First National Bank,
Lynch, Nebr.
First National Balk,
ilainview, Nebr.
Commercial Bank,
Long iine, Nebr.
First National Bank,
Scottsbluff, Nebr.
Liinden Exchange National Balk,
Linden, Nebr.
Packer l National Bank,
South Omaha, Nebr.
Lerchants National Bank,
Nebraska City, Nebr.
Stockyards National Bank,
South Omaha, Nebr.
Norfolk National Bank,
Norfolk, :Iebr.
First National Bank,
Spalding, Nebr.
First National Bank,
North Bend, Nebr.
Tilden National Bank,
Tilden, Nebr.
Omaha and South Omaha Bankers,
Through Senator Hitchcock.
Saunders County National Bank,
Wahoo, Nebr.
First National Bank,
Omaha, Nebr.
Citizens National Bank,
Wayne, Nebr.
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Federal Reserve Bank of St. Louis
•
DIST2ICT 116. 10.
wy.a.aral - Protests
arainst inclusion of Wyoming
in District lIe. 10.
• Stockmen's National Bank,
Casper, Wyoming.
Shoshone National Bank,
Cody, Wyoming.
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Federal Reserve Bank of St. Louis
First National Bank,
Douglas, Wyoming.
Stockgrowers National Bank,
Rawlins, Wyoming.
First National Bank,
Shoshoni, Wyoming.
DISTRICT No. 11.
- Requesting transfer to
National Bank of Anadarko,
Anadarko, Okla.
KANSAS CITY District.
The Schaefer-Doolin 1artgage Co.,
Alva, Okla.
Farmers n Merchants national Bank, The First National Bank,
Arapaho, Okla.
Hobart, Okla.
First National Bank,
Vorden, Okla.
American National Bank,
Atoka, Okla.
First National Bank,
Elk City, Okla.
Kay County Bankers Association,
Kay County, Okla.
Duncan national Bank,
Lone Wolf, Okla.
The First National Bank,
Blair, Okla.
Beckhaln County National Bank,
Sayre, Okla.
The Calvin National Bank,
Calvin, Okla.
First National Bank,
Lountain View, Okla.
Citizens uf
Centrahoma, Okla.
First National Baal:,
Snyder, Okla.
First National Bank,
Clinton, Okla.
First national Sank,
Apache, Okla.
The Oklahoma State National Bank,
Clinton, Okla.
First National Bank,
El Reno, Okla.
First National Bank,
Westherford, Okla.
The City National Bank,
Duncan, Okla.
German National Bank,
Westherford, Okla.
First national Bank,
2aanchard, Okla.
Peoples State National Bank,
Custer City, Okla.
The Farlers national Bank,
Cordell, Okla.
First National Bank,
Thomas, Okla.
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Federal Reserve Bank of St. Louis
Oklahoma (continue,
Robert L. Knie, Attorney,
Heavener, Okla.
The First National Bank,
Stigler, Okla.
First National Bank,
Hydro, Okla.
First National Bank,
Valliant, Okla.
The Keota National Bank,
Keota, Okla.
First National Bank,
Woodward, Okla.
Citizens of Konawa, Okla.
American National Bank,
-malm, Okla.
7et
First National Bank,
Konawa, uhla.
First Natio_al Bank,
Custer, Okla.
The City National Bank,
Lawton, Okla.
E. E. Brown, Secretary, Chamber of Commerce,
Oklahoma City, Okla.
The Lawton National Bank,
Lawton, Okla.
The Farmers State Bank,
Carnegie, Okla.
2
Banking Company,
Lawton Clearing House Association, Chouteau Trust
Chouteau, Okla.
Okla.
Lawton,
First National Bank,
Lawton, Okla.
First National Bank,
Duncan, Okla.
First National Bank,
Lone Wolf, Okla.
Bank of Eakly, ,
Eakly, Okla.
American National Bank,
McAlester, Okla.
Pay State Bank,
Fay, Okla.
The Farmers National Bank,
Maysville, Okla.
The Bank of Gage,
Gage, Okla.
First Notional Bank,
McAlestpr, C)kla.
State Bank ez Trust Company,
Howe, Okla.
First National Bank,
Mill Creek, Okla.
Farmers National Bank,
Hydro, Okla.
Oklahoma Stock Yards National Bank,Farmers State Bank,
Oklahoma City, Okla.
Niowa, Okla.
Bank of Pontotoc,
Pontotoc, Okla.
The Union National Bank,
Purcell, Okla.
The First National Bank,
Sentinel, Okla.
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Federal Reserve Bank of St. Louis
Citizens State Bank,
Lawton, Okla.
'First National Bank,
Ledford, Okla.
Citizens National Bank,
Lorrison, Okla.
Oklahoma Qcontinue.
1...uskogee Naticnal Bank,
Muskogee, Okla.
•
State Bank of Stratford, Okla.
First National Bank,
Muskogee, Okla.
The Oklahoma State Bank,
Sentinel, Okla.
The Com:dercial National Bank,
1:_uskoL;ee, Okla.
Security State Bank,
Shawnee, Okla.
The DIstang,State Bank,
r.ustang, Okla.
Union State Bank,
Shawnee, Okla.
The Farmers National Bank,
Oklahoma City, Okla.
Shawnee Nation Bank,
Shawnee, Okla.
Security National Bank,
Oklahoma City, Okla.
National Bank of Commerce,
Shawnee, Ohla.
The Stockyards State Bank,
Oklahoma City, Okla.
State National Bank,
Shawnee, Okla.
Oklahoma City Clearing House Association,First National Bank,
2yan, Okla.
Oklahoma City, Okla.
First National Bank,
Wat
-uraka, Okla.
First State Bank,
Bush Springs, Okla.
First rational Bank,
Wanette, Okla.
Farmers State Bank,
Ripley, Okla.
Bank of Commerce,
71aturalm, Okla.
Chickasaw National Bank,
Purcell, Okla.
Oklahoma State Bank,
Wilson, Okla.
First State Bank,
Pocasset, Okla.
State :ational Bank,
7:anette,
First ::ational Bank,
Perry, Okla.
The Bank of Union,
Union, Okla.
Guaranty State Bank,
Texola, ukla.
Farmers
Lerchants State Bank,
Talihina, Okla.
First National Bank,
Tahlequah, Okla.
Central National Bank,
Tahlequah, Okla.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
46,:11_ :-, _-- ....,,.--,,,- ,
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iLL:7
i)J-/-;73-D-77::: i
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i
FEDERAL RESERVE BOARD' --I
0
REGULATION
No. 1.
WASHINGTON
. .
,
PROCEDURE IN APPEALS FROM DECISION OF THE RESERVE BANK
ORGANIZATION COMMITTEE, .
q1
-114/
1. Petitions for changes in designation of Federal reserve cities.
Petitions for review of the action of the Reserve Bank Organization Committee in designating
Federal reserve cities must be signed by duly authorized,officers of a majority of the member banks
located in the city requesting a review.
Such petitions must set forth briefly the grounds and reasons relied upon for such review.
Within five days after mailing said petition the petitioner shall file twenty copies of a brief setting
forth fully the grounds relied upon for a review of the action of said Reserve Bank Organization Committee.
The secretary of the Board shall notify all member banks in the Federal reserve city of the district
in question that such petition has been filed, and shall request such banks to designate a representative
to act for such city at the hearing thereon. He shall also send to the representative of such banks, when
designated, a copy of the brief filed by the petitioner, and said representative shall be given seven days
within which to file twenty copies of his brief in reply.
The Federal Reserve Board will thereupon fix a date for the hearing of oral arguments by counsel,
which arguments will be limited to one hour on each side.
The Board will not hear testimony, but the parties will be limited to the record before the Organization Committee.
The record need not be printed, but reference may be made in the briefs by page to the report filed
by the Organization Committee with the Senate of the United States and ordered printed, and may
likewise be made by page and volume to the typewritten testimony of the witnesses appearing before'
the Organization Committee at the hearings held by the Committee.
2. Petitions for changes in the geographical limits of Federal reserve districts.
Petitions for review of the determination of Federal reserve districts by the Organization Committee
must be signed by duly authorized officers of at least two-thirds of the member banks in the territory
which the petition asks to have taken out of one district and annexed to another.
Proceedings as to notice, filing of briefs and arguments shall be the same as for petitions for changes
in the designation of Federal reserve cities, except that the board of directors of the Federal reserve
bank and not the member banks in the Federal reserve city shall select the representative to appear
and answer the petition. Class A and B directors elected may act, pending appointment of Class C
directors, in the selection of such representative.
At all hearings held hereunder all questions of law or fact, including jurisdiction and powers of the
Federal Rcserve Board, may be argued.
FEDERAL RESERVE BOARD,
August 28, 1914.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Governor.
FEDI-RAL fi,i,TSER\tf. BOARD HLE 1
• /
112.40
L1.1c,TDUU FOR T}17.;
r
cf-
e Borxd to re.
In reirence to,t. o 1-1.-}tit of the Fed.ore.1 Reeerv
tee
:i
the districts define, by the Organization i3onnit
in such 'roe.
and the -proper :Irocedure
Virgo
Congrea3 ranifeatly intended te give, and did give to
the dintrifAe for:ed
the Federal Rol:serve Board the i.00r to revise
re, however, was not
by the Organization Committee. Th 1-,rocedu
epecifically 60f1ned.
Section 2, after providing that the OrrAnization Contn twelve
mitts° shall deeicnato nct leal than eight nor :cre
cities, etc., providea as follows:
"The dotorminination c f said Cri:anization CoFittee
l reshall not be subject to review excert by the Federa
ft The districts this
*
serve Board when organized
be from
created :Ifty bo readjueted and LciAt dietricte
vederal Reuerve Board, not to
time to time °routed by the
exceed teelve in all."
Inasmuch as the Act contemplates that the banks shall
it is clear that Conbe eiTunized by the Org4nteation Ccrilittee
e Board shall have the
r,,roaci intenJed that the Federal Reserv
the Crf:anization Conrinht to change the dietricts do fined by
bunks al well ma before, se
mittee after the orf!arization of the
that they may make
the languape of the statute expresely statee
roly
and not that they
auzh changes from time to time,
review the mrk of the Or arization Ccwrittee.
,ry to carry out
,
In doterminint, t:e Iroeedure nocesuthe ordinary laws governing the
nIch a revision of the dietriets
rifj1\0 of utoekholdore in 1,rivate corporat;one cannot be speciapplied in the case of etockholders of Fenfiral Reeerve
tanks.
A ZtockhoL or In a private corporation on an equity
in all t\e property of the corporation after provieion io nado
r, of a
for paymelt of its indobtedneea. In the case, howeve
value for
Fe er.l Ra:ervo bank, the ,stock has a fixed raximur,
all pructical curpoees, an the equity over rind above this ri.ximum
. The
:
4
belongs to \1- United States aril not to th, stookholders
therefore, of the otockholder of a Pc.2,eral reproperty ri6t,
serve bank mi be said to be purely statutory, e.rid not analagous
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
-2—
tc tho propAr.ty richt of a stockholder in an ordinary private
corporation.
The subscription to stock of a
doral 'Reserve bank
involves rot Nerely the purchase of an inte7-est, but curries
with it membership in the Fe6ora1 Reserve oyAom, .;Ihich in un—
c:or the supervision of the F:tral FAservo Board.
Section 4 special:Lily yrovides that :ember banks may
subscribe to the capital atock of the Yederol :
,
,eaerve 1:ank 'in
LL!.ortfiance with the provisions of this Act' and all stock in
subject to the provisions of tho rederal Roo zvi Act.
Section 5 provides thatwtho capital stock of each
Federal Reserve bunk shall be divided into sharee of one hun—
dred dollars ouch nd the outstanding capital stock shall be
increased from timo t time as rember banhs increase their cap—
ital otock and surplus, or M3 additional banks becovic remb,
.)ra,
aci ay be decreased as :omber banks reduce their capital *tech
..
or !!,urplue or cease to be :j al)
Sharon of the car,ital
i .
l 12sai.
stock of Fe,,;orz.7.1 Reserve banks owned by zetzber lanks shall not
be trani3forred or hypothecated."
Section 5 further provides that 'A bank c.Iplying for
wcook in a roeral reseryo Lantz at any time after the organi—
zation thereof must subscribe for :An amount of the cafital stool.
of 't,11(a Fec-eral Hon.:Tye bank equal to sl.x per centun of the raid—
ul co.lAtal stock and surplus o f said applicant bank, paying
therefor it; par value plus ono—half of one p
centum a month
fr
t,:e p.iriod of the last dividend."
It further rrevides
for the surrender of stock so subscribed where the rember bank
hau decre'lsod it capital stock or goes into liquidation, and
,tres surrendered ehall be
that "In eJther cane the sl.
canceled and the rember banks nhttll receive in payment therefor,
un
• re5;u14tiono to to prelcribod by the Fe.;ora.1 Reserve Bo-_;rd,
a 3UM equal to its °ash paid—upbscript:onn on the hires nur—
rreldered and one—half of one pr C-antum per :onth from the period
of the last dividend, not, to exceed the book value thereof, less
any liability of ouch member lank to the Vet: ,
ral Relerve
k,ain, in Section l, sul--soction h, in defLnin the
fo7v3re or the r3Jeral Reserve board, the renewing languaze is
used: "To suspend, for the violation of any of the provisions
of this Act, the operationa of any Yeaarli Resc!rvo bank, to take
roosesion theraof, administer the name during the period of sus—
ponsion„ 111,(;, when deemed advisable, to liquidate or reorvanize
ouch lank."
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Por k
,.
In vie; (f to provisions the folio .ing ccnc
luoions appear to le .;- oti 'Jed:
e
FIRST:
SECOND:
THIRD:
FCJIITH:
That the Federal Benerve Board has the porv3
r
te readjust and change the dietricts from
tine tc time, and to create ne• diet
ricts.
Since all N7ticnal banLs are reeuireci,
tc become members of the Fevieral Reserve bank
of
the district in which they arc located,
the
power to change the districts must necessar
ily carry with it the ower to terminate
the eligibility of 1 member bank to memb
ership in one Felt-oral Reserve bank, and to
transfer as eli5 2ibi1ity to another Fede
:
ral
Reserve bank.
As the '.IOA to hold eLock is dependent upon
membership in the System, ellen a bank
is
made ineligible to :embershir its right to
hold otock ceases.
Since due provision is made for the amount to
be paid to a ieember bank when fir any reason
it loaves the system (namely, its cash paid
subscriptione plus one-half of cno 1,17.
cent
per month from the period of laet divi
dend)
the traneer of elembership to another
district cannot be said to impair any contract
ual relations as betwen the •enber bank
and
the Feileral Reserve bank, ae the orig
inal
subscription is made with notice of this
fixed value of the stock.
If these conclueione are correct it
would seem that
where
district is re:Idjusted is above
provided those banks
h. cu are -thereby reads) ineligible to
membership in the bank
of their or1inel district could be
required to surrender their
etock. (which cannot be transferred or
hypcthecated) in that bank,
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
411101
1•11.
and to boome merNbers of the bank in the ne;/ district.
In like -annex*, vhere tic districts aro o(neclidated,
one bank could, in 'effect, be liquidatod by tranoforring its
aasot* to the
^..n1; which suocoode it, ana havin
that bank pay
the stockholders of the liquidating bank thoir cash paid subscriptions plus one-half of one per cent per nonth fror data of
last didivend,(alsuming, of course, the av3ets are sufficiont
to do t'As) and inmediately there fter or
vAncijent with this
payment,National banks might ho required to purch%se sock in
the surviving bank on torrs provided in VIo Act.
as rembors would, howovor, prof,ably have
surviving bank or not, and rrobably could nct
rratt-r of law to do so.
noopootfully,
State Lanls
ol-tion to join the
roluirod as a
•
FEDERAL RESERVE BOARD FILE
rt,
February 27, 1914.
te,
4
FEDEAL lot
Mu FILE
1.11-. J. V. Norwood,
Norwood 7!Aional rank,
Greenville, S. C.
Hy dear Sir:
I have your letter of February 23rd and have read the
same vith interest.
Your sugestions will have careful con-
sideration.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Very truly yours,
Secretary.
4
:A
S. A. MOORE, CASHIER.
J. W. NORWOOD, PRESIDENT.
NtMeWt1.011 ArAnricsNA44
,
22
B. A. COOK, Ass-r.CAsHiE)§.
re AMIE
itt
GICEENVILLE,S.C.
,
Coratriltff
Res qnnk Oug
Februry 23, 1914.
Hon. D. F. Houston,
Secretary of Agriculture,
Washington, D. C.
oit
4r?
e?
FED:RAL RESERVE BOARVILE
• / 2- 2,
on
From the papers I notice that the Organizatiin
tant that every district
Connittee considers it impor
d be self
which a Federal Reserve Bank is located shoul
discounting for member banks.
sustaining in the matter of
to Mr. Sands
I herewith enclose a copy of a letter written
bears partly on
of Fichmond the first of this month, which
The portion of the letter which refers to
this subject.
I would be
this matter I have indicated with red ink and considerpleased to have you give these arguments such
ation as they seem to merit.
this
To quote from memory, the cotton nine in
which cost about
state operate sbout 4,500,000 spindles
ted
Their total paid in capital and ac - umula
t100,000,000.00.
0.00, leaving a floatprofits amount only sone 190,000,00
0001 -00.00.
ing debt on the plants of approximately ,110,
in process of manuFurthermore, there is at all times
and the mills
facture about t5,000,000.00 worth of cotton,
assets such as raw
are compelled to keep or hand Vick
, amounting
cotton, fuel, supplies, and manufactured goods of cotton
brigs the debt
to fully 1'10,000,000.00. This
It is selmills alone in this state up to t25,000,000.00.
All cf this bor.rowed ncney
dom less. It is often far more.
principally
except 1,10,000,000.00 debt on plants (carried
ng agents) is, or could be,
by machinery dealers and selli
rediscount
represented by commercial paper suitable for
by banks.
Dear Sir:
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
The needs of capital in developinp agriculture in
The
this section are doubtless fully understood by you.
borrow s large part of
fertilizer and cotton oil business
Their borrowing will amount to millions
their capital.
While our banks can supply in a
in South Carolina alone.
large measure the needs of their custoners, and while prudent bankers will be exceedingly careful with loans when
they find they have to rediscount, still a strong and
well managed Regional Reserve Bank to serve this territory
would be a very helpful factor in developing: our naterial
resources, and would benefit us along other lines---political, educational, moral.
J.W. NORWOOD, PRESIDENT.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
S. A. MOORE, CASHIER.
B. A.COOK, ASSTCASHIER.
"two() NvriONtL BtNK.r„
Mau No
n
C
GtumENvELLE,S.C.
Hon. D. F. Hollston
Pane 2.
I fully realize that the Organization Coumittee
will try to locate the Bank where tLe entire district will
be most benefited and I believe that their efforts will
be crov,nel iih success.
Very tnily yours,
\
BOP,RD
FLOEF‘AL ilESERVE.
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ot
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http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
dts:1
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RESr_RVE BOARD P.'
'Aver O.
;
'Uctrict.
Fej_enrX!
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7!curate rturfis faA
tte
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,
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tevritry thr
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http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
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Federal Reserve Bank of St. Louis
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FDERAL RSSMRVE ACT. .67,CTIO 2 DESICEATIV OF TM)Eit,1, RESXRVE CITIES
AND DWTRUIUATIOV OF FEDT7aAL RESIMV7. DISTRICTS.
House Bill.
Senate Bill.
The Urganization Com:aittee
shall designate from among tile
reserve and central reserve cities
now authorized by law a number of
such cities to be known as 'Federal
reserve cities.
The Secretary of the 'reasury
and no less than 2 other ele.ebers of
the 7ederal Reserve Board hereinafter provided for, to be assigned
by the Preeident, acting as the
Ueserve Bank Organization Committee
shall designate not less than 8 nor
more than 12 cities to be known as
Federal reserve cities.
Fleall divide the continental
United Stai;es iuto districts, such
districts to contain one of such
Federal reserve cities.
Shall divide the continental
United States, including Alaska,
into districts, each district to
contain one and only one of such
'
7ederal reserve cities.
ehe deterelination of said
erganization Committee shall not be
subject to review except by the
Federal %ecerve Board when organized.
The districts thus created
may be readjusted and new districts
may from time to time be created by
the Federal oserve Poerd hereinafter established, acting upon a
joint application made by not lose
than 10 member banks desiring to be
organized into a new district.
The districts thus created may
be readjusted and nevi districts may
from time to time be created by the
Federal Reserve Board, not to exceed
12 in all.
The districts thus constituted
shall be known as Tederal reserve
districts and shall be designated
by nu.4ber according to the pleasure
of the Organization Coeveittee, and
no Yederal reserve district shall
be abolished, nor the location of a
Federal reserve bank changed, except
upon the application of ie of the
mceaber banks of such district.
Such districts shall be known
at:'
7ederal reserve districts and may
A elajorit;"
be designated by nuelber.
of the Crganizatior. Comelittee shall
constitute a quorum with authority to
act.
The rganization Committee
The Cruanization CoeiLlittee shall,
is authorized to eeiploy counsel,
in accordance with reguletions to be
established by itself, proceed to or- make investigations, etc., "in
determining the reserve districts
ganize in each of the reserve cities
designated us Lereinbefore specified
and in deterwining the cities witha Federal reserve bunk, such Federal
in such districts where such Federal
reserve bank shall include in its title reserve banks shall be severally
located.
the name of the City in which it is
The said Com:aittee shall
situated, as "the "ederal reserve bank superviee the organiza tion in each
The total number
of Chicago", etc.
of the cities designated of a Tederal
of Federal reserve cities denignated
reserve bank,
by the urganization Goanittee shall not
be less than 12.
'uthority given to it to employ
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
-2-
House Bill.
counsel, make investigations, etc.,
for the purpose of deterwinini; the
reserve cities to be designated and
organizin6 the renerve districts
horeinbeforo provided.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Conate Bill.
http://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
@FedFRASER