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122.5-11 - Oklahoma Appeal pocket Boundaries of FRDistri7ts Wiv—tviAritYrt; Filing Pockets A 'racial "'I' and E" tibor mAtm-isil of extrema .oughnesa and durability. Id 'I'd swlelybr -ykWMANANOEt? F,MEG.0. FtCX*TIFiTTE117/47T. No.4524 IL. Size WI, x x 33/2 Expin. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 4tor BEFORE THE FEDERAL RESERVE BO' R D 4 Ill THE MATTER OF THE i'ETITION TO TRANSFER IL l'ORTION OF SOUTHERN OKLAHOMA FROld FEDERAL RESERVE DISTRICT NUM— BER ELEVEN TO FEDERAL RESERVE DISTRICT NUIBER Washington, D. C. —o— February 10, 1015. ire*11.4 4, http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Reported by Rexford L. Holmes, Shorthand Reporter, 322 Southern Building, Thshington, D. C. (The hearinr war, begun at 11:08 o'clock, a. m.) The Governor of the Board: 'entlemen, this is a peti- tion of certain banks of southern Odahoma to change the lines of 'iutrints :ros. 10. and 11. Unrlor the practic:1 of the 7:oard tho .r,7;t1tioner.7 w111 have to open r1m70, anJ we now cal] on the petitioners to pref-Int their case. kRGUTIESIT BY .WL11. 4. D. HARRISON, SECRETARY 07 THE OKLAHOMA RANTERS' AS OKLAHOMA CITY, OMAHOMA. Gentlemen of the Board: I would like to rtf)te first of all that the reply brief of the respondent was only -riled within the last ten da7s, nna it was impossible for us to have more than a day or two to look at it before we left home. However, we have been qble to bring ont some facts in conne,tion vith that brief that T am sure the Poard will be glarl to consider. The first statement on which ret.Tendent contendL. seriously is that our petition does not have the required signatures of two-thirds of the banks in the petitioning territory, and as it is conceded that we roull have no standinr, here unless we • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis hat] the two-thirds signatire, which are contained on the last Dtwe of our petition an,1 brief combined, alphabetically arranged, T would like to discuss first the c,ifficiency of the petition itself. Our petition shows 128 banks in this territory, of which 104 have si; nod the request for a change, vhile the respondent's brief chows 136 banks in the same territory, -- a difference of ei-ht banks; hut the respondent har used statistics rore • roecnt than there -tired by us, as cur petition was prerare0 1)r -rovc and Thllas bank was organized. was filed 7eptember 6 -- October 16th, rather. Our retition It ir a fact that there yre 17F harl'r in this territory, 'but not 136, as respondent eeniend,. 7rt eir-ht of these 135 bans are neT institution': formed and chartered since the Cxgvnization Committoe detcrmined the regional bank district line. lIerpondent has erronpolisly included one ban, the First 7ationa1 of IA-oken Bow, in the list as being located 1r Tulsa County. This bank is loc-Led in 7cOurtain county, and is not included in the territory arkinrr to be chanrtol, no County so included. for that natter is Tulsa This rarrIonablecrrer illustrates the un- familiarity of respondent with Cklahcrals affairs. Tulsa County and McCurtain County are three hundred miles apart and neither is in tbir territory. regardinf But the most important feature the udvht ner national ban77s 7e did not include in our list el peitionerd i thnt six of them ere converted state banks Tith the rnme o-Pficerr they formerly had, and there Is nc77 on file as a Part of our -netition exactly the same protest sipmed by an authorized officer of onch of these six • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis banks, requesting thi:, cbarwe. T call yellr atention to the paraq.raph in small print on the laLt page of our petition, nher. it says: (The original signature of each of the following banks to the above petition, t;irned by a duly authorized officer of the bank, is on file with the Federal Reserve Board. The same petition has teen sifjnod. by • 178 'tate Erin!ce in the territory askihg to be transferred, and the original signatures of these banks arc likovise on file with the Federal Reserve Board -out Lone of the ;:tate Banks are included in the following list of petitioners.) ef those state banks are the ones to which I refer that ha7e since 'boceme EatIonal banks, and all of those six signed tills petition and thope slips Tere signed by an officer of the banIt and now on gile with the Board. Our list of pe- titioners should thorcrfore be increased from 104 to 110. These six banks are: Merchants and Planters Eational Bank, Aa; Ameriean Jational 'ank, Dustin; Farmers National Bank, Hammon; Farmers Jational Bank, Holdenville; first lational Bank, l'Alcon;end 7irst lrational Bank, „inO_in. The remaining two of the eight adOitional banks respondent vishes added to our list, the First national, Talillina, and Yarmers 3-rational, ?lapel°, are new national banks with which we have hand no opportunity to communicate reF_-arding this petition. 7he First :Tationr al 13ank, of TaliTlina, Oklahoma, for instance, was orplinized De ember 20th, J believe, --at least late in T)ecember,--three monthS after our petition was filed. 'V011 if these two are conceded probably not the case, the cc, 1 ,0 v.ith the rcupondent, - : only twenty-siK, while the total nunl,er of non-petitioenro 1 total numer of petitioners is 110. • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 'e therefore 11:tve a majori- ty of tenty aboleve the requirement of ninety claimed by respondent, a, contained in the respondent's brief, --a majority of twenty-two of our petitioners have vithdrawn their request for a change; anil letters purportin contained in Exhibit to establish this claim are of resnorlent's brief. e7i11 not take http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis the time to r'o over all of them, but call your attention to the following: Exhibit A., to which I 7ould like noT to refer, --all of the letters in Exhibit .A in recTondent's brief, tv:cnty-two in number, are signed by officerr bf banks which are attached to our Petition. I might state here that these are the only letters of 11]1 the compilation in the back part of this book which are that signed our petition; also that signed by officers el onl:i seven of thee lel_terr, if you look through them,— of the tventy-two only seven are 1(!lre6'3ed to the 7eder9.l Reserve Board. Tifteen of them are OfIressed to irdividllals in their private capacity, and were not intended for use on this occasion, and we wiU prove to you Tithin the not far minutes that if it had been Irnovir that they wou3d be used for any such purpose as this, they 0°1)7(9 not have been secured. :totter • 2 -- I skip letter ro. 1, wnieh is a straight retractjon, because thiu bank, the kirst lational of Atlanta is owned by what i as known the Adams Syndicate of Texas, intended -- that gentleman evidently wants to be in the Dallas ')istrict. letter 70. 2, siFned MT J. T. Tea, president of the City 1Tational 'ank at Altan. Here i5 a letter from Mr. wood dated Febrnary 4, just the d y here addres.sed to Charles Teserve Board. fore NNe left home, mailed to me Hamlin, (lovernor of the Federal I have a carbon copy of the letter now on file with the :-.3oard, and signed. is a director in the nallas the president of the bank. bank, I might say: Kell 5. "Dear Sir:— "Some weeks ago Mr. Frank Kell phoned the writer asking if we would write a letter stating that we desired the district lines unchanged for the present time. "Mr. Kell's explanation of thid was that the Dallas Board wished to get things running smoothly, also that this letter would not prevent us from later on trying to effect a change to the Kansas City district. • "Now we wished to be placed on record as favoring a change to District number ten. "Fully 904 of our items are handled thru Kansas City and it is not at all convenient for us to be placed in the Dallas district. "Trusting that the Board will make this change as I feel that it is but justice to a large majority of Oklahoma banks, I am, • "Very respectfully, (Signed) J. T. Wood, President." It might be well to call to your attention that by looking at the map you will find Dallas is in the extreme southwestern portion of the state, near the Texas line, so if ninety per cent of their items are handled through Dallas, it is very evident that the larger per cent will be handled the same • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis way. Mr. Huff: You mean the Kansas City district? Mr. Harrison: The Kansas City district witlxim.handled through the Kansas City district. Mr. Huff: Is it in the county? Mr. Harrison: Yes; it is as far south as a county can be 6. in Oklahoma and not be in Texas. Letter No. 3, written by W. T. Clark, of Apache, is in • no sense a retraction. It is a personal letter not intended for any such use as that made of it, in which the writer tries 'to compliment the recipient and express as little dissatisfaction as possible with present conditions. At the same time tne letter plainly shows that the writer is still anxious for the change. We submit herewith another letter from the same party, issued within a week of this date, which I desire to read into the records. This letter is dated February 3, and is addressed to the Secretary of the Federal Reserve Board • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis t Thshington, and reads as follows: .1“). 7127 FIRST NATIOliAL BAEK Apache, Okla., February 3rd, 1915. "secretary, 2ederal Reserve Board, Washington, D. C. Dear Sir:— "Ly attention has been called to a letter written by me to iir. Oscar V,elle, Governor of the Federal Bank of Dallas, Texas, under date of August 31st, 1914. It appears that the letter has been filed with the brief in the case of transfer of certain member b banks in southern Oklahoma to the Kansas City District. Regarding this letter permit no to say that it was written by me to r. ons us a friend of long standing, and I felt like making my opposition to the lines of the District as light as I could on account of personal relations between us. However, if this letter is to be used in this contest, I wish to say that I am unalterably opposed to remaining in the Dallas District for the very good reason that banks in this section have no business with Texas cities. We feel that it would be a great business misfortune to us if we are to remain in the Dallas District for the reason that has been stated over and over, viz:--we have no business connections with the Texas City. "When I wrote the letter mentioned above, a copy 7. • of which is with the brief in your hands, not aware that an effort would be made to the federal banks clear items for country institutions. If this practice should be up we would certainly be placed in a very position; we would be proceeding backward the time. I was have member taken awkward all of "The sum total of the business is no banks in this part of Oklahoma have much business to transact with Texas points, but we go naturally to Kansas City and St. Louis, This condition is not of our making or choosing, but has come about naturally during a business experience of this section covering a period of many years. I doubt if we can ever change it. "This is the reason why we should have never been placed in the lower district, and the very good reason why we should be placed where it would be to our best interests. Very truly, • (Signed) T. Clark, President." If you will notice the letter to r- ts addressed to him at Houston, Texas, and not at Dallas, before he took his official position. It appears that the letter has been filed. THE FIRST NATIONAL BANK. Apache, Okla., Aug. 31, 1914. • P.61 Brf. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis "Mr. Oscar "jells, Houston, r2exas. Dear Sir: "I have your letter of the 29th instant, relative to the matter of making any changes in the present boundary lines of the Dallas Regional Bank. "I would be very glad indeed to favor you personally in any way that I could, but we feel in Oklahoma that our State should not be divided, and since we have, most of us, dealt principally with 6. • Kansas City, we naturally look that way for our banking connections. I like Texas and her people, but I would have to get acquainted down there. :aaturally, we are in close touch with Oklahoma City bankers, and they are very anxious to get the lines changed. I have not heard lately of any action being taken in the matter. "In our dealings with a Regional or Reserve Bank, I do not see that it can make very much difference whether the Bank is located in Dallas or Kansas City, however, as stated above, our business relations with Texas points have been very limited. "Out business outlook would be very good only from the fact that the cotton market is unsettled. Very truly, (Signed) T. Clark, President." • That is from one of the persons that the respondent relies upon to substantiate their petition. Letter No. 3 is by Harold ;Vallace, of Ardmore, cashier of the State National Bank, and is, to say the best, a neutral letter, and could not easily be construed in any other way. I might add that a large number of Mr. Wallace's stock-holders -practically all of them -- are Texas men, and if it had not been for strong uusiness associations which compelled his business to go the other way, he would certainly have been in favor of the • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Dallas Bank. Letter i1o. 6 is neutral, and not a retraction. It is sign- ed by T. H. Dwyer, President of the Chickasha Rational Bank, at Chickasha, Oklahoma. Mr. Dwyer ippeared before the Organization Committee in the hearing at Ransas City, and gave testimony decidedly for his part of the State to go to the Kansas City bank. I have here another letter written by Mr. Dwyer, addressed to the Federal Reserve 'Rord, • ashington, D. C., and dated Feb- raary 4, 1915: "As you will shortlj consider the application for change of boundaries of the Eleventh Reserve District simAy wish to impress on your board the fact that fully ninety nine per cent -He repeats that in figures, to make it emphatic. (99;) of our business goes to Kansas City, and that point is the natural out-let for us and this southwestern part of Oklahoma, and urgently ask that practically all of Oklahoma be placed in the Kansas City District. Yours very truly, (signed) T. H. Dwyer, • Iresident, Chickasha National rank." Letter No. 8, from the Oklahoma National Bank, Chickasha, Oklahoma, purporting to be a retraction, is signed by an inactive officer of that bank, whereas the original protest and petition on file in this Board is signed by an active officer, and has not been withdrawn. Letter No. 9, from the Oklahoma State National Bank, is not a retraction, and at best can only be interpreted as an acquiescence in a po:!tponeLent. Letter Eo. 11 is from the iirst National Bank, Elk 014, Oklahoma, signed by A. L. Thurmond, Cashier, and dated December 24, 1914, and contains this statement: in the Kansas City Dik2tridt, * "‘ie would prefer being furthermore, that bank is represented here in person b, airs L. K. Thurmond, wno is also http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 10. 'placed intorerted in the Fourth National and thoLe state banks in the 7,allas ditrict under this ruling. 2hurmon0 has interests come four thousand miler to tell this Teard their lie entirely with the Kansas City district. of the bank We also have a letter from the same of-ricer relations. from whom they secured a letter through perFonal He says: "Federal Reserve :'ashington, lentlemen:--" This letter is dated February 4, "some three or four weeks ago I wrote a letter to the Federal 7eserve ?oar(1, allas, Tey.ns, in which I stated that we preferred to be platled in the Kansas City District, but that we were willir to wait until the Tederal Reserve Banks were in F,ue runnilv- order, 07 1“)rds to this ect. It is our desire at thin tin, p.r0 has always Leon, that we should b e pieced in the Kansas City District, since pimcticq117 a7_1 of our business eomeL through that point. The believe that mattcru have adjusted themselves in the past thirty days so that we could be chan7ed to the Kansas City A.striet, and we do not want our former letter to be misinterpreted to to , ansus City Dis-: effect that we do not went in the , trict, and just as soon an we car get tviern. Very truly yours, (2ipmed) A. L. ThnrLlond, Cashier." Letter .NO. 12, fro!n the 'merican 7ational Tank, of 7olden,. ville, Oklahoma, is signed by the president of the bank. The orlIginal.slip, I may say, was signed by the ca:2hier of the bank, but, since both officers are active in the bank, I will submit 11. herewith another letter under date of February 4, 1915, addressed to the Federal Reserve Board, .::ashington, D. C. • "Gentlemen:We desire very much to be transferred from the Dall:s Reserve District to the Kansas City Reserve District, for the reason that nine-tenths of our business goes either through Kansas City or Louis. 7ie have been a member of the Federal Reserve Bank at Dalit-s since its organization and have never yet sent t.n item through the Federal Reserve Bank at Dallas or received one from them. ':;e can account for this only for the reason, as I said in In the outset, that most all of our business goes either through Krinsas City or St. Louis. I have just talked to the First i4ationtd Bank of this city and they also inform me that they have never sent an item, or drawn an item on Dallas. Therefore we urgently request that you transfer us to the Kansas City District, and oblige, Yours very truly, • (Signed) L. T. Sammons, President t American iational Bank, Holdenville, Oklahoma." 2rom another one of the gentlemen depended upon to substantiate their petition,--Letter ik). 13, from the iottional Bank of Commerce, at Hollis, is not a retraction, but an agreement to postpone, evidently given under pressure. Letter _tic). 14, from the State Lational Bank of Hollis, while a retraction, contains a statement too misleading to be • overlooked. The writer of this letter, ,-r./Cross, states that this bank is locvted forty-eight hours from Kansas City. Vie will admit tnat Hollis is the farthest point in Oklahoma from Kansas City, being at tne end of a branch line of railroad in the extreme southwestern portion of Oklahoma, but the actual http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 12. running time of trains between Hollis and Kansas City is eighteen hours. • It so happens Hollis is lec,ited so that they mast change trains at Altus and Lawton before they can go to Kansas City. In the same way a number of inland towns in Ok- lahoma would take forty-eight to fifty hours to get to Dallas. It io not a fair illustration of the difference between Kansas City and Oklahoma, or Dallas and Oklahoma. Letter :A. 17 -- it is stated to be from the First National Bank at Marlow, but should be from the National Bank of Marlow, of which Mr. ale, the party given, is cashier. It is a personal letter, evidently not intended for use as a retrac- • tion.. I have here a letter dated February 6, which came to me since arriving at Washington, addressed to the Federal Reserve http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Board, bearing the seal of the bank. TIE.; NATIONAL BLIT4K OF MARLO:. Marlow, Okla., Feb. 6, 1915. "To the Federal Reserve Board, Washington, D. C. Gentlemen: "My letter to Mr. Ben O. Smith,of Fort Worth, Texas, dated August 29th, 1914, was not written aitn the idea that it would be used as evidence that I favored the present division of the State of Oklahoma, in the Reserve Districting proposition. . "I have always been of the opinion and desire, that Oklahoma should be in the vansas City District, and if my letter was used otherwise I did not so intend. It is but natural that bankers of the smaller cities should try and remain in favor with their friends in the Reserve Contort*, and perhaps there are others who have written letters similar to mine, with no idea they would be used as evidence before 13 your Board." Gentlemen, there you have the key to all these letters. 411 I will read thet sentence again: "It is but natural that bankers of the smellier cities should try and remain in favor with their friends in the Reserve Centers, and perhaps there are others who have written letters similar to mine, with no idea teej wouli be used. as evidence before your Board. "1 will be glad to see the South part of our State placed with the :lorth in the Kansas City District. Very respectfully, (Signed) Tom 7:ade, Cashier,The National Bank of Idarlow." IP There is also another letter froni the State National Bank at Llarlow, contained in their brief, letter iLo. 18. Without commenting, I would like to read the following letter, under date of iebruary 6, to the Feder@ Reserve Board, Vjashington, D. C., from the State National Bank, Liarlow, Oklahoma: "Gentlemen: • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis "On January 9th I wrote you a letter in reference to the placing of certain parts of the State of Oklahoma in the Dallas Reserve Bank district. I would refer you to that part of mg letter eherein I stated that for the present I would withdraw our protest. After a careful consideration of the matter, and with especially the interests of my bank and the people of this vicinity in view, I deem it best to inform you that I now have as an earnest wish, that this part of Oklahoma at least will be transferred to the Kansas City district. "We deeply appreciate the honor that was conferred upon Oklahoma oy having a banker from our State on the Dallas Board, and trust that our action lin this matter will in no way affect his standing or position. In writing my former letter, I was 14 • considerably influenced by the natural desire on my part, and which was doubtless the case with others of this same part of Oklahoma, to advance one of our home people, and to aid him along all consistent lines. "se are very grateful for the kind treatment received at the hands of the Dallas Federal Reserve Bank, and regret th23t we do not find it consistent with our views to desire to still remain in that district. Respectfully, (Signed) O. R. McKinney, Cashier." Mr. B. A. McKinney, of Durant, Oklahoma, was elected a director in the Dallas Reserve Bank. I can not say whether there is any relationship between the gentlemen or not; the names are • the same. Letter No. 20, signed by J. A. Gilbert, Cashier of the Farmers and Merchants National Bank, Roff, Oklahoma, under date of August 25, 1914, addressed to the Reserve Bank Organization Committee, Washington, D. C., is a carefully worded letter, apparently given at someone's urgent request, containing this prophesy as a preliminary to any retraction: THE FARMERS AND IAERCHNTS NATIONAL BANK. Roff, Okla., Aug. 25, 1914. • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis "Reserve Bank Organization Committee, Washington, D. C. Sirs: "We understand that there is a move on foot to place the entire State of Oklahoma in the Kansas City Reserve District. "If the Dallas District will be as able to take care of our needs for funds as the Kansas City District, " 15 It is evident the writer was in doubt as to the service he could get from Dallas, or he would not have written thus. 4tio (Continues reading:) we prefer that the districts be left as they are, for the reason that we cre a cotton growing section and our needs are identical with most of the banks of the Dallas District. "We are not in favor of any move that will delay the completion of the organization of the reserve banks. Yours very truly, FARMERS & MERC1L1NTS NATIOUAL BANK, By (Signed) J. A. Gilbert, Cashier." These are all the letters we have to psent from the • twenty-two they have placed in that exhibit, but I think the tenor of those will show the personal letters were not intended . to be used here, and that the twenty-two named in the defendant's brief, are not to be considered as retractions. With these remarks in mind, a careful perusal of the letters in Exhibit A, which are the sole basiL, of raspondent's contention that many of petitioners have changed their minds, will show that only ten, at the very outside, of these communications can reasonably be construed as retrtctions. Some of them are to :Ir. Oscar 7iells, at Houston; some of them are to Mr. Smith at Port Thrth, who seems to have acted as a sort of "decoy duck" for the directors; others are addressed to members of the Dallas bank personally. I might say, in that connection, I have one of :Ir. Smith's letters here, an original letter, to show how he got these signatures. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis This is addressed to Mr. Tom ade, at Llarlow. FARMERS & MECHArICS '1ATIONAL BANK, • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Fort :orth, ?e=, Aup7ist 25th, 1914, ?om ,,ade, Cashier, Marlow, Oklahoma. -riend •:ade: "It has recently teen brought to our exist some oprosiattention that tiler.: may in the Elevenremaining tion to southern Oklahoma 'Dirtrict. Bank -no egional "T)o you happen to be familiar with the situation, and what influence, in your opinion, will that opeosition be able to exert with the nepartment. In view of the fact that a great majority of the Texas banks were so enthusiastic in electing an Oklahoma man as one of the directorF), wo sincerely hope that tllor is nothing in this report. --" Now here is the part to which I vish to call your attention: "A contest, even though it might be unsueeesefUl, I am afraid would result in leseening the prestige of the Oklahoma director, and inasmuch as southern Oklahoma is, to a groat extent, a cotton producing section, it .occurs to us that dt would be much better 4 or them to remain. with bThs that are familiar with : the cotton situation, rather than go to Kansas City. Very truly yours, (:'ip:ned) Bon n. Smith, President." Of course our boys did not feel like going up against a proposition 'Micro they thoucht the director' F influence would he destroyed if they tried to get out of the district. The fact that all of there efforts h:vo be-m made rith sp 17 little result indicates tie strength of the movement in Oklahoma Lnd the justice of the cause here presented. Out of 110 pe- titioning bankers not more than ten h:ve evidenc ed even under pressure what can reasonably be constraed as a retraction, and this leaves the petitioners with ten nore than the maximum number which respondent claims is necessary to sustain our petition. It may be well here to refer to a statement on page 47 of respondent's brief where it is claimed that it would be impossible to secure 309 signatures from banks in southern Oklahoma. I h=ve already stated that in our list of petitioners are includad 178 state bunks. • ,e did that, not because we thought the state banks were entitled to a Board hearing at this time, but in order that you mit,ht judge of the sentiment of the banks in that section, and those 170 are included in the 309 which respondent says it would be impossible to get without duplica ting the number. Respondent in his brief attacks the committee presenting this petition as unauthorized. This committee was selected unanimously at a meeting attended by a representative of practically every bank in the territory asking to be changed, and • was remlested and directed specifically to prevre and file this petition. Particular stress is laid in a number of places in respondent's brief on the fact that one member of the committee lives in Oklahoma City, which is outside of the territory asking to be changed, and. he repeatedly refers to this feet. This mem- ber of the committee is secretary of en association of which http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 18 every petitioning bank is a member land he lives in Oklahoma City because it is more convenient to transact their business from that point. I might say that at the time the Secretary of the _ssoJiation appeared before the Organization Committee in Kansas City and gave the same evidence that is being given now, he did not live in Oklahoma City. their affairs. He i.. paid by them to look after It is well to note that all of the non-petit1on4 ing banks in southernOklahoma are also members of the same association, and that if the sentiment were not overwhelming in favor of a change, their secretary would not be here taking part in such a contention. The other members of the committee and of the delegation present today are bankers actively engaged in that business in the territory asking to be changed. to appear here, who would have? If they have not a right Such objection is trivial and not worthy of consideration. It is true that this petition is not presented by such eminent counsel as represents respondent. In preparing for this hearing, the petitioning banks have frequently stated that they believed your body would care less for legal technicalities than for plain facts embodying banking izinciples and com- • mon justice. We have no oratory to offer, no fine technical points for which to contend, and no hairs to split with legal verbosity. We are not here as lawyers, but as business men rep- resenting a cause we believe to be just and right, and willing to aubmit our case to a tribunal we believe esires only authen- tic information on which to arrive at a fair conclusion. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 19 In the brief which has been on file with your Honorable Body practically four months, we have set forth in a manner • which can not be successfully disputed that southern Oklahoma had at the time the regional district lines were formed prao.... tically no banking relations with Texas, and especially with the city which has been designated as the center of District 140. 11. Respondent has not attempted to offset this showing but has resorted to many loss important assertions which bear only indirectly and remotely on the main point. On page two of our brief we make this statement in italics, speaking of the exchanges for the month of April between the two • cities: "Figuring percentages upon these items shows Kansas Ctty. to have handled 93.2 -farrai-g: and other Texas cities 6.8/0." Vie elaborate on that considerably in the orief, which I have not time here to present, showing that all the banking busines is with Kansas City or the northeast. Respondent has not at- tempted to offset this fact, but 1.,asses it over in his reply brief as facts abundantly known to the Organization Committee at the time the districts were outlined. If they were abundantly known to the Organization Committee, they must have been passed 411 http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis over without consideration at that time, because nothing could be more significant than that not less than ninety-five per cent of the territory that asks to be changed want to Kansas City and the northeast at that time, and does today. The Federal Reserve ,At provided in specific terms that the district lines should be formed with due regard to the natur.. 20 al course of =sines's. V:e do not blame the Organization Com- mittee for making a mistake in our case because they probably did not have the facts before them on which to base a fair conclusion. It was not to be supposed that some mistakes would not occur even in the case of such an able-body Organization Committee. of men as the But when it is shown, as our brief clearly shows, that the banking relations of southern Oklahoma with Dallas were practically nothing at the time these lines were formed, we think the mistake made becomes apparent. A letter from the Comptroller of the Currency is herewith submitted which shows that only four national banks in the territory • asking to be transferred carried accounts in Dallas. prior to Aril, 1914. I would like at this time to read here a letter from the Comptroller of the Currency to substantiate the facts which we have presente. in our brief and argument. This letter is dated April 24, 1914, addressed to Hon. Robert L. Owens, United States Senator, Washington, D. C. "My dear :enator: • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis "In reply to your letter of April 20, you are advised that there are five bunks, among those in Oklahoma allotted to the Dallas District, which reported accounts in Dallas on March 4, the date of the last call. These banks, together with the depositary banks, are as follows: - Am. Exchange First National, Ada, Dallas. Dat'l„ Chickasha National, Chickasha, - Commonwealth Nat'l, Dallas. - City Nat'l, First National, Kflowa, Dallas. City National, Madill, Dallas. 21 First National, McAlester, - Am. Nat'l, Dallas. xchange "There are also some twenty-three banks reporting reserve balances with FORT WORTH banks, and a few keeping their reserves in HOUSTON banks. • "It is possible that other banks on this list actually have balances in Dallas, in Stpte banks, or in national banks which they have not requested this office to approve as reserve agents. Respectfully, (Signed) Jno. Skelton Williams, Comptroller." Of those five national banks .for are located in that territory which is asking to be changed. • In one of the counties One of them is located is excluded from this petition. Of the four nationel banks, the First National Bank at Ada carries a cattle, oil, and cement account, which revires a Dallas correspondent. The Chickasha National Bank at Chickasha carries a heavy grain account, which requires a Dallas correspondent. The First National Bank at MeLlester is loc'ted in the. coal district., and every week has a pay-roll from Dallas which requires a Dallas account to handle properly. So that in three out of the four cases, some specific reason enters into why that bank carried a Dallas account. • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis In other words, there was absolutely no business of a regular character at Dallas at the time these banks were organized. Senator Robert L. Owen: The cement plant is located at Ada? Mr. Harrison: a large one. Yes, the cement plant is located at Ada,-- http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 22 is a 1L.rgo Also regardinR the accounts at Fort 7;orth, it packing center. unts Oklahoma raises many cattle, and those acco of the rt Fort ':.orth for the purpose of taking cc-re are cattle accounts which naturally go to Dallas. of business If, as respondent claims, the natural course in the years and banking is toward the south, why is it tht banks had discovpreceding 1914 only four out of 135 national ed, only a fraction ered this to be the case, and these four carri contention is too of their reserve balances in Dallas? Such a 1 he fact is that in spite of its absurd to -have any weight. 2 and never has geographical proximity, southern Oklahoma is not with any part of been in close commercial or bulkinr! relation Texas. heastern It is true that the five counties in the sout our petition are part of Oklahoma which have been excluded from as, and have connected by a special line of raiLaj with Dall relations; but outwhat may reasonably be called close Dallas adjoining county, southside of this small area, and perhaps one and fimncially from ern Oklahoma is as far removed commercially adolphia. Dallas as it is from San li'rancisco or rhil is nach worse than From a banking standpoint the situation As is contended by the geographical position would Indicate. on, and the same is respondent, the main crop in Texas is cott true of southern Oklahoma. Cotton begins ripening and is shipped days before the Oklahoma to market from southern Texas sixty od eradunlly shortens as crop is ready for shipment. This peri hern Texas, but the efone moves from southern Texas to noit 23 feet of this condition on the banking business is thtt the banks of Texas,which are very heavy borrowers in the cotton • season, exhaust their loan resources before the Oklahoma crop is placed on the market. Thuir loans are made first in south— ern Texas and gradually move northward, as the crop ripens. By the time Oklahoma cotton is harvested, Texas bnks are load— ed with cotton securities, and Oklahoma borrowers are at a great disadvantage compared with the borrower in southern or even central Texcs. It is very easy to look at a map and say, well, here is Dallas—or Oklahoma located right at the door of Dallas, as • respondent says in his brief, but cotton begins ripening in southern Oklahoma sixty days after it begins ripening in southern Texas. The respondent makes the contention that Dallas, being a cotton bank, and southern Oklahoma being large— ly a cotton producing territory, therefore the two should be in the one district. Cotton begins ripening in southern Oklahoma sixty days before the Oklahoma crop is placed on the market. Mr. Huff: In Texas. Mr. Harrison: line. • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis In southern Texas, down near the Mexican The time shortens gradually as you move northward across Texas, Southern Oklahoma is the farthest northern region of the cotton crop. The result of this is that the banks of Texas which are admitted to be very heavy borrowers at the cotton season exhaust their resources before Oklahoma is reached, and by the time southern Oklahoma has reached its borroting stage, the banks of Texas are obliged to go east for their resources, 24 and Oklahoma is obliged to go the same way, and at the very best all that southern Oklahom: could get from the cotton bank in Dallas would he the ragged end of the borrowing, when, according to our petition, showing they have borrowed on re-discounts upward of 823,000,0M in one year, as shown in the Comptroller's report, and if to those are added a large amount of re-discounts which, as you well know, is the practice of many bankers, to use them, placinf, it on their regul.r statement,--if, after that is added, some twenty-or thirty million dollars, you can see the position Oklahoma is in to obtain loans from the Dallas banks at the end of the cotton season, when the Texas cotton borrowers have been supplied first with the money and the resources have been exhausted. Senator Robert L. Owen: moment. 1,r. Chairman,--pardon me just a There is a call to tie Senate v‘hich will require Sena- tor Gore and myself to leave nov4. I am very sorry we can not continue to be here vdhile this hearing is going on, but I wish to ask permission, on behalf of the 3k1t-homa delegation, tL.t I might be given an opportunity to address the Board with regard to this mzi'6ter It the first convenient moment,--perhups this afternoon, as soon as this vote is over. some vote at twelve o'clock. there! They are going to take There is something going on up (Laughter.) The Governor of the Board: The Board will be vary glad to hear from you LA any time, Senator. There may be a little doubt about this afternoon, but there will be no trouble about it. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 25 Senator Owen: I wanted to give as little inconvenience to those representing the Dallas district as possible, and that is the reason why I suggested this afternoon. The Governor of the Board: 011, well, there will be no trouble about it. Senator Owen: The pairs are being broken at twelve o'clock, and so it will necessitate the presence of both of us on the floor of tae Senate at -that time. The Governor of the Board: that If you ct...n come t any timed/will be agreeable to you. Senator Owen: • Our State is very deeply interested in this matter, which accounts for our presence here this morning. The Governor of the Board: Senator Gore, would you like at some future time to addross the Board? Senator Thomas P. Gore, of Oklahoma: I should not desire to address the Board at length, certainly, but -The Governor of the Board: It will be understood that -- Senator Owen, we will expect you at three, subject to your pleasure. Senator Owen: If you please; I will telephone as promptly as I know, Governor. Mr. Harrison (continuing argument): Speaking of txm south- ern Oklahoma being a cotton section and Texas a cotton section, which is dwelt on very largely in the arguments of respondent, and also in the arguments before the Organization Committee, claiming that Oklahoma being a cotton, and Texas a cotton, district, they should be in one district, it should not be overlook http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 26 ed that there is a large amount of cotton, about one-third of the total Oklahoma crop, grown in the counties which are al- • ready in the Kansas City District. Therefore, the Kansas City banks are, and must continue to be, thoroughly familiar with handling this crop, as well as the extreme aoathern Oklahoma crop, which they have heretofore financed. Hence the claim of respondent, on page 54 of its reply, that the Kansas City bankers are not competent to finance the Oklahoma cotton crop is founded on a fRlse supposition. '/ will say the gentleman - the respondent - stated they did not say they were not able banks, but said their experience was not sufficient in cotton to handle this class of paper. • Now, Mr. Miller, the federal reserve agent at Dallas, a member of the board of directors, born and raised in Texas -Mr. Huff: Kansas City. Mr. Harrison: Kansas City excuse me if I make a mis- statement - born and raised in Texas, been a cotton banker all his life, own, or did before he became federal reserve agent, a large number of cotton banks, and certainly knows the cotton business as well as any banker in that section of the country. He is one of the directors. • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Mr. A. C. has spent all his life in the cotton regions of Mississippi', Alabama, and other southern points. r. L. A. Williams, another director in the Kansas City bank, has had fourteen years' experience in banking, all of it in the cotton district, and under these circumstances, it is absurd to say the Alfectors in the Kansas City bank are not qualified to handle that situation. 27 The Kansas City bankers have done it in the past successfully, in open competition with Texas banks,and our bankers and mer- • chants are not so ignorant that they need the paternal club of government force to compel them to learn where it is best to finance thair croos, It is well kno;J1 that Kansas City is the center of a great wheat, corn (.nd livi. stock producing bolt, ::nd it is tne money from these sourcys that has heretofore financed the Oklahoma cotton crop, and will do so with ease and satisfaction in the future if permitted. - slicy..-n on pages five to eight of peti- tioner's brief, the ability of rulsas City banks to finance Ok- • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis lahoma's products is immeasurably superior to that of the Dallas banks. And this accounts for the fact that such financing has always been done in Kansas City or some other northern or eastern point in the past. Take the question of re-discount, to which I referred a few moments ago, it is true at certain periods of the year the Kansas City banks -- the total they had was about two and onehalf millions in 1914, but those re-discounts were out of the way before the Oklahoma cotton crop came on the market. The re-discounts of the Dallas bank are at the highest point when the Oklahoma cotton crop comes on the market. It is on this unquestionable showing that your petitioners also base their claim that the natural course o2 business can not in any sense be said to be followed in the present division. In an effort to offset these clearly apparent facts, respondent sets forth statements as to the direction in which • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis cotton, grain, lumber and soree other products raised to a very limited extent in southern Oklahoma move. This argument is contained on pages 37, 38 and 39 of respondent's brief, and can be answered by a single stetement, reseondent has confused the case of certain lines of commerce ;dith the course of banking. Your petitioners are representing a banking proposi- tion, and while it may be true that some of the products to which respondent refers move southward to tne Gulf before moving eastward to European markets, the financing of these crops is all done from the north and east and the Gulf movement of freight in no way decreases the grounds for contending that petitioners banking relations ere with Kansas Cit27 and farther east. For instance, the respondent in his petition refers to the case of the Kemp 1 Kell Grain Company, one of the largest buyers La the Southwest. that country. they have e number of mills over Dow, the wheat talien out of Oklahoma - five- sixths - is purchased by two firms, either Rosenbaum and Company, of Chicago, or :irmour ad Company, of Chicago, and all the financing of that crop comes from the north and east. Respondent quotes on page 36 a statement from the Senete record that banks will not be prohibited from doing business with their previous correspondents, no matter in what district they are locLted, but i reserve balance in a ie well known that the keeping of a ra1 tan' almost Aways carries with 29 it the necessity of a balance in a bank in the region al center. Re-discounts - I secured this morning a statement of the • capital stock and deposits of the Dallas banks, Oompred with Kansas City, the Dallas banks have approximately seven and onehalf million capital and twenty-five million surplus; Kansas City national banks' capital -nd surplus -- and I included the surplus in the Dallas statement -- of fifteen million dollar s; deposits of one hundred and five million dollars. Kansas City deposits run seven to one of their capital and surplus; Dallas deposits run three to one of their capital aiid surplus. Respondent says, on pge 46, that petitioners "have the te- • merity to propose to further reduce the resources of the Dallas bank, and by so doing, the claim is put forward that this action would help both banks." The fallacy of such a criticism does not need explanation to any banker when it is remembered that southorn Okluhom, like Texas, is a heavy borrower at certain seasons and at the same seasons as Texas. While the change asked by petitioners would slightly reduce the capital of the Dallas regional bank, it would in much greater degree reduce the demand upon that institution for loans and therefore make its position stronger. • That is a quotation from the respondent's brief. lacy of this does not need explanation to bankers. The fal- It is true if our petition is granted, the capital of the Dallas bank will be reduced to about '366,0)3, but while that is true, the calls on elmt bank for loans will be reduced all out of proportion to the reduction of capital, so the position of the bank will be http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 30. strengthened instead of weakened. The Dallas bank, with the territory which we ask to be changed would still have more than one and one-Quarter millions above the required capital for a federal reserve bank. Respondent's brief is largely devoted to technical matters of no vital significance or import to this proposition, such as the formation of this committee, the form of the petition, whether it was signed by all the banks individually. Now the way we rot up our petition, -- and we tried to get it up as soon after the Organization Committee got up its decidion as possible -- we .nt out slips to the banks, identically the same slip with the Place for the officer of the bank to sign, a copy of wMch appevrs on the petition, and the original of which is with the Board in every case. 7e put it in as brief language as we could for your convenience, to cover the grounds which are contended for in this case. If we had done, as respondent shows we should p-epare a petition and send to every bank to have signed, it would be necessary to take a year at least to pet this petition around to the large number. of banks before we could have presented it to the Board., and then in the identical language as presented, and nothing would have been gaine(1, because every bank has signed the sarre, worded yetition in this case. :Respondent's brief is largely devoted to technical matters. If you will look at it you will find it is a lawyer's brief, voluminous, verbose, and replete with matterc that are not vit-1 to this question at issue. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis I surFose that if we were lawyer, and as eminent coun- http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 31. eel as represented by the respondent, we would probably declare this to be immaterial, unnecessary, and not responsive to the question asked; but the fact remains that a large part of the brief is not in response to the vital point put forward by us in this case: Where have the banks in the petitioning district been accustomed to transact their business, and what is the most convenient and best arrangement for them? That is what we have been trying to get at. Insinuations are many times thrown out thect this is a movement on the part of Okl_homa City, and not by the banks in question. Such an assumption gives too much credit to the abil- ity of Oklahoma City bankers to force into line 110 national banks and 170 state banks scattered over a wide territory, many of which banks have no financial connection in the metropolis of our State. To claim they could force into -- well, 110 out of 135 national banks, and 178 state banks in the same district, many of which have no financial connections at all with Oklahoma City! Oklahoma City is the natural center of the district asking to be transferred, even if it is beyond the border of that district, and if Oklahoma City bankers have taken any part in this movement it has been because the petitioning banks naturally looked to them for support in every movement in which they are interested. If the relations of -blies° southern Oklahoma banks with Dallas were such as is claimed by respondent, it would be utterly impossible for Oklahoma City to have any influence upon them, and it would be likewise absurd to charge ) such influence. Dallas carries 28,820 mercantile accounts in Oklahoma. I found this statement since coming here to -jashington, and in looking in Bradstreet's Illearn that the total number of all mercantile accounts ln Oklahoma City is a little less than 122,000, and including all of Oklahoma, and yet these respo ndants claim they carry 28,820 mercantiJo accounts in all this portion of Oklahoma. Mr. Huff: The statement is not that that many accounts in southern Cklahoma, but that many accounts in Oklah oma as allas had has made the district. Mr. Varrison: ern rklahoma. also. I stand corrected. I thought it was south- And that statement is made in the senate record We still have 8280 to the good after giving you all the merchants in Oklahoma. lich a statement, that Dallas carries 28,280 accounts in Oklahoma, and only five bank accounts, is a story that needs no refutation. It would be _utterly impossible. 7e are glad that Dallas secured the bank. Te believe that the great EMpire of Peas alone and unaided is suffic ient in financial and. commercial imnortunce to warrant the location of a. regional bank somewhere in that Ltate when there were to be tTelve such institutions established. 7e are not trying in the ;least to injure the Dallas bank, but only contendir.g for our own rights. Then it is considered that if all of the territory which we ask is transferred, the Dallas bank will still have more than a million and a quarter capital above the amount required by law, we do not see how a reasonable objection to the transfer can be http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 33 made. When it is further considered that we have excluded from our petition the only section of Oklahoma which is in any reason able degree related by business associations to Texas, and that a large per cent of the non-petitioning banks in the territory asking to be transferred are located in the counties immediate-, ly adjoining the five which we have excluded, and that only one county outside of those we have excluded has asked that it also be included, Johnson County, which immediately adjoins the countj of T3ryan,--the sincerity of our position should be clearly seen, and our efforts to act in harmony with the best interboth outs/of Texas and Oklahoma apparent. We ask therefore that in considering our petition you remem- • ber that it represents under any showing a margin of ten above the two-thirds requirement claimed by the plaintiff, as shown by a fair examination of Exhibit A. Further, I ask you to bear maminax this point in mind, while there are a lot of letters in the back of this brief, none of the letters oontriined in Exhibit C, and purporting to represent the feeling of bankers in southern Oklahoma, are from bankers whose n6mes aro attached to our petition,--not one of them,--and that all of the letters contained in Exhibit F, again purporting to represent the feel- • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ing of bankers in Oklahomp,--the petitionin territory,--are from territory that lo excluded from our petition, and have no more r'ght to appear here as an argument against Us than would letters from bankers located in some point in Texas, because they are conceded to the Dallas bank. In justice to the banks in the petitioning district, which http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 34 feel that their business relations have been unintentionally outraged by the present district lines, we ask you to re—dis— trict that territory so th, t their interests will be betler served, and the federal reserve system will not be handicapped by unwarranted artificial barriers raised against its proper development. Gentlemen, that is our position. any questions. We ,:re ready to answer V:e have some bankers here from the petitioning territory, who can speak for themselves, and we are at your service. I thank you. ARGUMENT OF MR. CHARLES C. HUFF, COUNSEL FOR RESPONDENT, THE FEDERAL RESERVE BANK, CF DALLAS, TEXAS. Gentlemen of the Board: I feel rather alone in this contoday pregationi with the great number of sixteen inch guns being trained upon me. I feel like as if I could not say, in tht, words of the Kaiser, that I had the right and God Almigh ty with me, I would probably go down in defeat today; but gentlemen, this law is on trial; this is no bankers' law, yet you stand up here and say what the banks wants If this law had been passed at the instance of the banks, but it was passed over the protests of the banks. You do not know the discussion that took place when this law was first proposed. The bankers were against the law; the bankers did not want this law. A healthy public opinion whipped this law onto the statute book. When the banks found out the law was going to be passed, then they came in for the first time and asked to be permitted to make suggestions, and they did perfect this law, and made it, in my opinion, one of the greatest pieces of legislation ever placed on the statute books. But this law was not passed, may it please the Board, at the instance of the banks alone; but it was passed to correct some evils that had grown up at the hands of the banks themselves; it was passed in order to give stability to the financial system of this country; it was passed in order to keep the reserve centers in the east from corralling all http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis -2- the money and the time of short crops and depreciation. The gentleman says that my argument in the brief is large ly technical. Lrining. Well, now, of course that is a good deal in You have, as neL:bers of this l'oard, made some rules which you have said were coing tL he followed in appeals of this kind. One of the rules was that a petition must be sirn- ed by two-tl'Arf3s of the member banks. promulrated on August 28, 1914. Now those rules were ?y objection was,--and it's Lechnical, blit it goes to the very foundation of thit, proceedinr, if the rules have been made,--my objection was that this petition was not founded upon a petition prepared in accor dance with t ese rules, but t&-o-inr that after the Crranization Com- mittee'6 report of the lines were made public, trct banks, at the instance of r. arrison, sent in protest slips. Now, lrtIF see if that is not correct, as found by 'r. 1Tarrison's own letters, away back in April: http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Mow, the first one is this: "T-T. CKLATTCYA BAKERS ASSCCIATICN. Office of the Secretary, Cklahoma April 7, 1914. "Tr C. B. A. T'Ev1;ERS IN DALLAS DISTRICT. Gentlemen: Without presuming in the least to dictate in the matter of the regional reserve bank districts, we feel that another letter at this time will be welcomed by you, in view of ,he many urrent letters and telegrams we have received." No- that is on Aeril 7, 1914. (Continues readinr:) "The wri ter has much information which it is impossible to convey' in a letter, but the main point is: After commun icating with Senators Cwen and Core, all Cklahoma's Congressmen, and after consulting with bankers in Kansas Cit y personally and canvassing the situation as thorou ghly as time has permitted, we are convinced that there is a reasonable chance, by proper activity, to get Oklaho ma placed in one regional district. "As for a brancl-, bank, t,he adIr linistration forces are inclined to adopt the policy of Flacing branches only where there are not overnight fac ilities for handling business. Under thnt polic:f 1 and the Districts as now framed, every city in Cklahoma is barred from obtaining a branch. "Cur information is, that 95% of the Oklahoma banks that have been placed in the Dal las District are very much opposed to this arrangement. We ask that any bank that is contented to remain in that Dis trict, please write us at once. All others should fill out the enclosed form AND RETURN TC TTT WRITER (Do not mai l it to Washington. Thi s is VERY IMPCRTANT AND STICUID }AVE YCHR I7r1IMIATE ATTEN4 TICN. P.73. Brf. "Further suggestions will follow developments. Very truly yours, (Signed) W. . 1TARRISCN, Secretary C. P. A." Now, that's the first letter . That was before these rul es were promulqated. Here Is the second letter, just a week later: "TTE CKLANCirA PArvRTIS ASS CCIATICN. Cffice of the Secretary . Cklahoma City, Okla., April 13, 1914. "TC T'TF, 7---ANT,- ADDRESSED: P. 74. Tq-f. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis "We have not as yet receiv ed from you one of the signed slips like the enclosed which we mailed you a week ago and asked to be return ed immedi8tely. This is exceedingly important, and we can not put too much stress on '-c the necessity of hearing from every Ckla homa bank in the Dallae District at once definitely. If you want to be in the Dallas District, please stat e that plainly. If you do not, sign this slip today, and mail to us, unless you akready have one in the mail. • "We admit that there is only a figh ting chance to ret the District changed, but we have rood reason to believe it can be done. Today we have received from Washington a signed statement by a hirh rove rnment official, whose support means as much to us as that of any other Tan, saying he things this chenee can be made if the banks will all sign the protest. "It is very important to not only send this in, but to wire your Coneressman and Senators, unless you have already done so. Let then hear from you direct in protest against the lines as at present forg ed, if you feel tliat way about it (The letter was signed by W. h. Harrison, Secretary, C. 1-?. A.) Now, the point I niWee is this, thet these protest slips • were not made and not filed in resp onse to this procedure, but were made and filed immediately afte r the announcement of these lines. I do not know whet the proc edure wes at that time. I cart not understand it. The/ were urged to "see your Congressman and to wire your Senator. " I suppose at th-t time the Board had made no regulations with reference to the matter, and yet certainly those slips wich were neet in to be directed to the delegation in Congress and Senators were not made as a protest to km base a petition on hereafter, because that was two, three, four months before the rules were promulgated, upon which this petition could only stand. Now, my position is that under this procedure laid down b:r you, that this petition has never been followed in acco rdance with your rules. Now, another position I take with reference to this mat- http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis •ter is that, uneer the statute, under the law creating these hanks tied this Board, this matter could only come before the T- oard called as a review, -- a petition for review. course they May say I am technical. Now, of Yet the well recognized rule of law is that where you are simply reviewing the action of sone other tribunal, that you can not chlinge it, except on an error of law, or where the finding upon the facts was so erroneous as to result in a miecarriage of justice and fraud. it says that"the determination of said Crganization Committee shall not be subject to review except by the Federal Reserve Board when organized . . " no other trib4nal could review it, and they ceuld only review it as a question of review o rather the finding of the Board Crganization Committee, upon the testimony taken on the hearing. Now, gen- tlemen, 1 will submit to you that in this entire brief filed by the -Tentleman from Cklahoma, there is not one reference to one line of testimony taken upon the hearing before the Crganization Committee. The Crganization Committee did not send any boys out to transact thie business. The Secretary of the Treasury, the Secretary of Agriculture, and the Comptroller of the Currency went themselves in person to every district in this United States. They saw the people; they came face to face with them; they got their opinions; they had the hearings; they saw the conditions upon the ground; and after seeing those conditions they made these findings, created those districts as they are now, and under the law, -- while it may be technic- http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis TT-e al, yet under this very law this Poard, as a lega l proposition, has no right to upset the finding of :hat commi ttee unless • there be an error in law or unless the find ing of the committee is so erroneous RS to wdont to a fraud upon the district as formed. 1 do not believe any gentleman follo wing me will controvert that well-known proposition of law. Now they say "You are technical." permitted it; you invited it. Well, now, if I am, 70u "At all hearin7s hereunder, all questions of fact, including jurisdictional and powers of the Pederal Reserve 7oard, may be argued." Now that may be technic- al, bilt, (entlemen, when you ccx!te to consider it, you ID appellate court; you simply have to take the testimony as introduced on the hearings. • are an All of these letters from banks in Cklahoma, about t',e conditions of 1. 11F,inss,--a1l of those letters alriount to nothing if you are , r oinr to try this case according to your own rules. That *hole brief, When you consider it, has to go out, because none of it is founded upon *Jot a single syllable of testimony taken at these hearings. It is r1/4 a trial do novo, but it is an appea l; it is for he purpose of determining whether or not the firs t -- thore three gentlemen who went into every part of this country, and :1() saw and heard every word of testi:Lony, who made maps, who got the opinion of he people on the groun d for the purpose of seeing whether those gentlemen made such a serious error of fact as to warrant you in sing that this findi ng of fact they made as to these districts was so very erron eous that we will have to over- http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 11-4 turn it, because it amounts to a (Jlestion or a matter almost of fraud upon the dlAstrict as forred. • When those rret,sts wore 0o7, gentlemen, another thing: first filed, it was said that ihey wore boincr filed because the State of Oklahoma was beinr divided. 'ow listen hero: This is what -r. Earrison hhicelf says: (7rom letter writtel by W. B. Forrison to (. E. A. rembers in Dallas District, dated Oklahona City, ri1 7, 1914:) Tie are co)minoed that there ;s v reasonable chance, by v,roier activity, to 7et Oklahoma placed in one rer:ion" al district. Dow, the point I ru • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis o is this, that when they sent out these ;)rotests from Harrison's of ice in kklahoma City, to be si:med in mind then was that all 0 point they by those ba'lho, to of alaboma v.as to be transferred to i'ancas City. see why that was not done. Now let's There are thirty banks in the five counties thnt tho7 have ecluded fror, this petit on. On file -with this brief, and on file Pre letters fror iwenty-six of Iiiose banks saying thnt they wart to be in the Dallas district. Since that time there have been letters sent in from a bank in Hup:o to the Federal Reserve Board, a copy of it being sent to Dallas; another letter addressed from the First National Bank at lurant, making twenty-eight of those ban3zs in those five counties that said they did not want to be in Kansas City, but the:/ were aware they wanted to be. row, is it not absolutely gentlemen as apparent as the nose on your face that when these got to feeling around down there for the ruroce of gettin,7 up not a petition, they ran across five counties that they could jar, and they said "lie will ceclude you gentlemen, and we will divide the State of (Jklahoma our selves in another way than the division of the Organization Coemittee." llow, they say to you, the very first try out of the box , "We want to get all of Okl ahoma into one district"; yet, e7entler nen, when they wont up against the five counties do= there where there were twentyeieTht banks, they said, 60h, no; we don't want to gc to Kansas City; you can not transfer us across :Z.a nsas into lAs[ouri. ;7e want to stay in Dallas." Then they did some dividing themselves. They made another division of the Sta te of Oklahoma, and they Day a very nice compli 'ent to :r. YcKinn ey in their brief, because they say "He is up there, and we don 't want to transfer him or this territory away and therefore cause hier to lose his job." rO11, the law takes care of him. There was no reason for dointl-at, but the roint I rel -e is thi s, that on file with this Board are twenty-eight letters from tho se counties whic', absolutely say they do not want to e;o to ens as City, and they are not going to Kfensas City, if they can help it. ovi,7entlemen, if you had includ ed those thirty banks and tried to get a petition, tha t gentleman leiows, they all now , that you could never h/eve,by any kind of figuring, scared up you r twothirds. How, let's see: He says a list of these banks was received ; I got it fray,' the boo ks in the 2ederal Reserve Lan k in Dallas; but there are 166 banks. row, three-fourths of them admittedly, by their own petition, never did file any protest. Thirty of them are excluded, mak ing 66; 23 wroe letters either say- http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis TI-h inp: that they d1(1 not want to be transferred or that they felt • that no nction should be taken.now, which would make 86 out of the 166,which would show thnt ono-half of the banks down there really were not behind this movement. Um, he says, gentlemen, that sorie of those banks have since written other letters. them last, since we did. to use them. of faith. 7,r, -loll, all T can say is they saw Those lctters, he says we ought not I do not know. I do not think there is any broach wrote them, red said he was interested in knowinT? the feolin7s of those men, and the letters were in reply to those letters of inquiry. • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Now, he takes up 1:!r. tond7iyofylit4 Wood's letter,--r. of Atus. Hero is what Tf..r. Viood said just on December 24th. says,-(Lotter signed by J. . cod, rrecid,At of t, e City al Bank, Altus, Oklahoma.) ation "Regarding proposoe, change of Southern Oklahoma banks Into :ansas City District: "I deem it unwise at this tic to rake any change, in fact, we are very well rleased with Eallas. Should a majority of Southern Oklahoma bankers favor Kansas City, the change could be effected at some future ti-e. That is what he said just on December 24t4 Here is what this man from Apache says,--and r 7 ght here I will say I have seen another letter from him, and ho does not want to be in any trict; he does not want any reserve hank. dis- He says in the last letter I saw from him that he did not want to be a member of any reserve bank any ;lace. 'ow, let's coo what he says: ;1-11. • (Lotter addressed to Vr. Oscar Wells, Houston, Texas, si7ned by 7r. 7. Clark, 'Lresidnnt of the First Hational Bank, Aache, Oklahoma, dated Au7ust 31, 1914.) 12.61 "I have your letter or the 29th instant, relative to the matter of raking any changes in the present boundary linos of the Dallas Regional Bank. "I would be very rqad ind, od to favor you rorsonally in any way that I could, but we feel in. alahema that our State should not be divided, .ow that's the woy the caTanination Committee divided it, but they contend it should not be divided that way, but that it is all right to let Harrison divide it. It is all rip.ht for Har- rison to make the division if he wants to, but fte Organization Committee, that made it their duty according to tie terms of • this law to pass on it, can not divid- it; but let Harrison divide it for us! (Continuos reading from above letter:) "I would be very glad indeed to favor you personally in any way that could, but we feel in Oklahoma that our State should not be divid-0, nnd since we have, most of us, dealt principally with -, ansas City, we naturally look that way for our banking connections. I like Texas and her people, but I would have to get acquainted down there. . 61 Brf. (Laughter.) -- (Continuos reading:) 7aturally, we are in close touch wIth Ohlaho,7a, City bankers, and they are very anxious to rret the lines changed. I have not heard lately of any action being taken in the matter. "In our dealings with a Regional or Reserve Bank, I do not see that it can rake very much difference whether the Lank is located in Dallas or Yansas City; however, as stated above, our business relations with It Texas points have been very limited. Eow that, gentlemen, is a letter that he wrote on Awrust 21st, http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis in response to 7,7r. Wells' letter. -j er 24th speaks Yew the letter from Mr. Thurmond o-;' .Decemb for itself. • Mr. Thurmond simply says he did not think they our7ht to have any change. row, he has nince written a letter; when he found out his brother was cominp: up here, he had to write another letter, being cashier of the bank that his brother is presidnt of, and his brother coning up here to get sorething done, ho could not have a letter like this outstanding. they say we over-reached them, but And say he over-reached us, be- cause he wont and got a later letter: and within a r!oriod of thirty days Thurmond has changed his nind and the whole thing, and something has happened within thirty days that -rakes him think it is all riftht to go ahead. • row, the gentleman in Eoldenville wrote In August, and this is what he said: (Letter from Hr. L. T. Sammons, .),resident of the American *National Bank, Holdenville, Oklahoma, dated August 31, 1914, addressed to Er. Oscar 7olls, Vico President, i?irst iational Bank, Houston, Texas.) P. 67 Brf. • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis . "In reply to your letter or August 29th, will say that, as far as I am concerned now, I had just as Poen be in the Dallas District as in the z.ansas City District, for the reason that I think the Dallas District will understand this cotton condition bettor than any other. I think the Dallas District will fully realize What we are up against in this cotton section, and will understand how to handle the situation better than if we were in a grain or any other territory. Therefore, I an perfectly content to rei-Tain in the Dallas District." Now that. is fror rr. T. Sannons, written to T:r. e11s On August 31st. State NaHere is a gentleman, 7r. Cross, Presidant of the tional Bank of Hollis. Ho says: (Letter from Ir. R. S. Cross, President of the State National Bank of ffollis, dated Hollis, Oklahoma, January 15, 1915, and addressed to Federal Reserve Board, .ashington. D. C.) "In regard to the rrorosed change --" This letter can not be neTied. subject to any objection becnuse it is lot ov, r1 directei to anybody in 1,allas, but is directed here prJ filed here. I assume tieere -rore this one will eess ithout any ceiticice:. "In refeard to the oroposed chanre in this Reserve District, we prefer to stay in the Dallas District, on account of the distance and connections which the mails reaJ:e. o are only twelve hours from Dallas and about forty-eight hours from :ansas City." If. 66 Brf. Now, gentlemen, here's a letter I wont to call :,-our careful attention to, beceuse it etlys that this men hes, while be started out thinking he ought to be in the 7Fensas District, thought the matter over and looked et it and feels he, ouht to let it alone. Bre says: (I - tter from Yr. Tom Cashier of the First :ational rank, I?oteau, Oklahoma, dated January 12, 1915 , and addressed to rr. B. A. LIcKinney, Federal Reser ve Dank, Danes, Texas.) "In those days of agitation, financial end wise, I am bccomii;g convinced that to "Let well otherenolizh alone" Is a geed axiom. P. 70 Brf. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis "The strenuous effort to effect P. chareee in ]eserve District No. 11, addin7 Oklahoma to the Federal City District, seemed to me to be a rroper proceZansas dure and for the best intereet of all of we Oklah oma bankers who petitioned; and, not to be cortrery, I sirrned the petition for tiels bank, like a majority, ;inee the matter will soon he heard '1):: the Federal Reserve Beard, I have given the question of chanIng, more thought than heretofore -at least more intelligent thought -- .7or the reaso n that I now kno nore Cooet the FeL'eral .eorvo Banks and their functions than heretofore, and I imagine this is true of thmost o. the banlere.. H-1 • "Tal-e the individual case of this bank. After summing it all up, I -find our mail service to Dallls is a row hours shorter than into Yans-s City. The S2VICE of one -bout the some as the Federal Reserve Bank appears to rotes are the nnme. discount know, I the ",c) fr as other. aF;ainst seomInPly check to balances and Items for credit be In Yenwould they as us for convonient are just as of the onrotion wofskst few A sas City or St. Louis. barl;s bus ehanRcd my ideas concerninp, them. "1 do not wad to be put in the T)osition of r-ol . with the other , Lack on the petition I signed alon! would drop you a line to Cklohoma bw-'ers, but thought more abort out finding the nodus operandi say Ilat since it th-Lt makes 60 difference of - cdorol .oserve "BfInc, to mo If the District remains li-- It is. In fact, T believe I ;.r - 'or It ,ow, as it, is. • • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis "I have flot ti;‘%t he otrolir c.,fort eing put:forth to change the boundary lines would naturally cause you to take a keen interest in the matter from a personal standpoint, and I wanted, in this letter, to express my "honest convictions" that perhaps a lot of us had rushed into somothir- that we really didn't know rhether we wanted it or not. That's writteA on Januar:i 12, from tile First National Bank of Pete' -a, Oklahoma. No , those lettors 11 in the brief. I will not re- hearse those;in till() brief are t.enty-six letters from bankers, I have told you about, in the five counties they have excluded. There are twenty-two letters from banks listed as petitionincreditors, some of .ciich have taken back what they -7rote. There are also letters from ot or ban:T-1s not listed as petitionin creditors. Now, those letters are all there. I will not the the Board's time to go through into the grestion of let+ers, any further. Now, let's consider the question mf -- they say the 'vital question" in this case. This Act says these"districts Call be ayportioned with due re rd to t:e convenience and custoiwry course of business, 'Ind s',,a1 not becessaril 3.ny .)t_te or ittcc. be coterminous 7:ith The districts thus created may be readjust- ed Ad now districts may from time to tilde be created by to Federal Reserve Board., not to exceed twelve in all." Now lot's see, wh,,,t does that fwan? That does not n,turally mean-necessarily live to mean the bankinr: business; it nns that the States - that the linos must be so nrranr;ed -s not to distrrb the trade relations, not t-.e LkIn reltions. Now it can not be contended, outleTrien, that practically ninety per cent of http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis the products of southern Oklahoma pass into Texas and Louisiana, say what you want to : . , bout it; but it is a cotton, corn and wheat country. It does not go north; it does not go east. Their aaa brief says th.t it -;.o0 ui;ost that is not in the direction of .J)allas. • But they said All right; let's coo. It is not in the direction of Dallas, but southwest is in the direction of the Gulf, thA entire commerce passes rir,771.t down throu,7h the State of Texas, and its ilea the bankin Gulf port. brsinoss tlie7 say !;eos to X'ansas Cit:T. If it a00S, it takes an unnAural trend and. it does not follau its commerce. But there is a renson as to why banking business .in Oklahoma it= first went to KAnzas City. you gentlemen well know, St. I6o-is City was mother. • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Under tho old law as as a reserve city; 1:onsas That condition prevailed for a il.eat number of years prior to the ostAlich .. orit of auy reserve cities in the State of Texas. Of course that ,o P:ansas City und St. Ionic a , ireat benefit over tlle other sections of that country, because they had to keep a part of their daposits in those reserve cities. Therefore, the business was started to Kansas City and ;.L. ],o is by a reason of this local advantage it had on account of bein reserve cities, r -nd this condi- tion prevailed for a rreat number of ye:lro prior to the ()stabliShment of any reserve cities in the State of Texas; so that when Texas became a State itT, reserve cities, :7..t..3.3asas City and St. Lois had tim aroaki fotten the trend of t7te bankin iness. Bat now that business did not follow its trend. aid not follow the course of business. busIt The banlmrs1 business wont in a different direction from everybody oleo's business, and yet they come up hero and say to you that because, for- 11-0 sooth, they have carried some balances in Kansas City, they • would have you transferral from the very door of the Dallas bank territory across the State of Oklahoma and the State of 7msas Into Lissorri, because, forsooth, they had carried some accounts in the banks up there, and. in hard times they had gotten some concessions there. But, gentlemen, what does the law moan It moans that the course of trado o that is,t3T course of comrerce, must not be disrupted by this division. Is it a hardship to say that ±km a man can get paid. for his product where it is sold; that a man can ship his cotton, his grain, c.nd his products into Texas and Louisiana down b;, the Dallas bank to be paid for • his products whore they are sold is a hardship, ..nd diverts the course of business It can not be insisted, and they wont at- tempt to tell you; they wont attempt to tell you that the cotton, the ;-rain, the corn, the surplus raised in southern Oklahoma, does not pass into Texas tcnd into Louisiana, and out through the Gulf port. They will not contend it, blAt they vall lay their case wholly upon the .uostion that the bankers, the chosen class, must be favored to the disadvantage Jaa, let's see the result. • tion loss than three months. 1914. Of everybody else! These banks have been in opera- They wore open on November 16, Next week they will be in o,el.ation three months. No man on earth can toll at this good day whether the conditions that haxa they paint so horribly will come to pass or not, no man can foresee. It is highly sooculative. now, however, would be a leap in the dark. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis To take any •clion 7;11;7 the banks hcve not oven roac'ied half of their efficiency. all paid in. Their capital is not It will take those banks three yo .rs to roach the height of their efficiency, yet in less than throe months after the opening or these banks these gentlemen ask you to tear these lines asunder! Listen to thefn prophesy evil, as they ask you simply to tear these lines to pieces and create come more! Now, ,.-entlemen, Of course you h_vo the physical power to do it. and write an order to do it. You can sit down But where would tilt lod to? S pose you woro to say, "All right, hr. Banker from South Oklahoma, although these banks have not gotten well started, although the Board has not even promul:ated A.1 the rules wit, reference to them, although we have not oven fixed it. so the State banks • could come in, and those banks '.1ro still in their infancy, yet, at your behest, at your re, vest, ,nd because, forsooth, if you put all the State of Oklahoma in one district, probably Oklahomc. Olt:, would get a brLalcIl bank, we will cut t ose lines asunder, and we will out you In'msas City district." 'ell, now, gentlemen, I say you can do it, but -,,ero would it lead to? The very instant that thing was done, over: dissatisfied community in the United St,tos :o"ld be sending by wire petitions ti ruet transferred. Oklfhoma is ,iot the only place in the world that feels that probably they ought to 11 ve been in come other district, or that they ought to have been in the canter of come aswithin trict. Tho pr_ctical result of overturning,tha-gaxiinax*xtrCless than three months, the judgment of 1;q) Organization Committee, http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis would simply led to an ;_Isolute disruption of those banks. 'Taw why would you do it? They do not say the Why would you do it? liallas bank is not takinp: care of the business in Oklahoma. They say that thoy are prophets, that t17.ey can see into the future, :.:Jad they say "We believe t;:t :- :hen they have a hi., crop, or the Texas banks would borrow all the money, and the .)allas leave the Oklahoma banks A.thout !.ny.' Jo you see that? wore to happen! That's - at they soe. low can you see that? Well, now, suppose that This law is fmmed just so it would cover.tbs a situation like that like a blanet< It says if one federal re- serve hank has to, it can discount wiVI anoter its members' • paper, so that if this terrible calamity comes to pass, if the Texas bankers :;ore to m up there to :exas and say, "ere, I want .;.11 your money to float our cotton crop," and if they were to (.:;et it all in August or September or (ctobor, and you came along in .;eve,nbor and wanted some money, all in the world you 11717t, would ve to do would be to take your paper and go to some bank that -:as not very crowded and did not have all that business, bunch! • :Id you would just be swimming like the balance of the Now, _;entlemen, I can not foresee that terrible calami- ty th_t they do. I do not catch it at all. Of course my hind- sight was always hotter than my foresi,7ht, but I I could see that oven with ITBut it is not going to happen "hile yo do not believe B -t it may happen. -ad I live. It may hap- pen some time. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis th,t, ;.;ontle:r,on, is the gist of this petition. H-r iTo', lot's see; r. .Larrison is a good letter-writer. just writes lots of letters! He When .iarrison 11.s not anythin- else to do he just sits down and takes a stenographer and writes some letters! Now, I do not v2E:sat mind most of the letters he writes, and. "irtve only t ed January 13. en exception to this one 110 says Loo his is dot- ankors in the Dallas district: "At the reuest of several bankers who are anxious to have oul' petition -ranted, I lm sending, : this letter. He did not say where those "onnIrs -ore situated, either. (Con- tinues reading:) "These bankers inform me that parties interested at Dallas are urgently requesting banks that have sined our petition to 7:ithdraw their plea and authorize Dallas representatives to state they wiSh to remain in that district. 7o do not know of a single bank that has complied with this request. " • :Tell, since they htve come up here, t".ey hve found some information; they hove loomed something, when they got to 2"ashington, or ahon they got this brief they le rned something, that some of them had taken sue: it either! ction, and d not gone back on (Continues reading:) "We do not Imo of (I sinr-lo hank that this request. e believe the bankers have enough good sense ;.:rid stamina to either weak-kneed or 1,-,ose-jointed at has complied with of Southern Oklahoma keep them from being such a time as this. "It is apparent that Dallas is considerably worried by our petition. • Well now, they may, but I had. not heard it; there is no rumor like that don Vlore. There may be an under-current that is depressed, bikt there is no stampede on account of your petition. They are still going on, and. the bank is open. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis I "The truth is, that they wore riven until January 1st to file an answer, and. that on January 8th no answer had boon filed, nor do we think any has been filed since. Ao answer can be filed to our petition which would really be an answer, because it is unanswerable. ---" tht's very nice to say about :ols a:Tn petition, and I am sorry I can not a7,ree with him. He pleads Runty to 'loving written a good one, and I will grant him that honor. (Con- tinues readino.7:) ", believe _Dallas is depending on political support to offset incontrovertible facts, and whilo, it is possible political support may win, wo are very willing to leave that mutter to the lederal Reserve Board. 1e have tN) Promise -r splendid support ourselves in high political circles, nd that promise " is in writing. - ell, that is kind of - reflectien on the su,port, that it has to be in writing boforo t], e:,, will count on it, but we will pass tat. (Continues reading:) "Our 1,0 ring will be - old l'obroor:7 10th, and Lossrs. Urair, and Robertson and the writer will probably reach hashington Fob. 9. If any at her bankers would like to o-o with us e would be pleJsed to know this. If any banila desire to contribUto to an expense fund to provide additional representation, they may do so in any amount they see fit, and we will use " the funds to the best of our ability. - - I never saw thorn when they would turn that down. _;ven Texas ban'ors will ta-e a little contribution to anything. (Con- tinues reading:) • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis "The most important step is for every blanker who is interested to write a personal letter at once to Senator Gore, Senator euen and Representative scott Ferris. It is being represented to ties() parties very insistently that tlio potitionino. ban s wish to withdraw, and such statements should be corrected in a this office supplied positive manner. Please k with copies of your correspondence on this subject. -arrison, Secretary." Very truly yours, (Signed) ;. ,ell, :10, I hve often :ondered why that was. • If these 7ehtlemen 1, J2J1 a case in 1The supreme Court, they would not be writins fieir representatives about it, have they got to do wit it? Ilaw, gentlemen, he says in this letter, and this is the thillz I want to take issue with him about, tht Dallas is dependent on political support. No man holding public office in 1)al1as has'von approached or taled to in this cartest. Dallas has never sought Po put this bank into polities. man, no senator, no representative, no man who holds a political office, has• over been approached concernial- this conte st, • or talked to about this proposition. hr. Harrison: r. nff: Lay I explain that point, hr. duff? Yes, rco ahead. Mr. Harrison: The Dallas papers stated just before that letter was rotten out that i'ostmaster Coneral Burleson had made a personal visit to Dallas, and was still there, and that they expected to Lave a friend at court, and that :as why the letter was written. off: ell, of course I do not !mow what the Dallas paper said, b,t I say to you crontlemen tkt when this matter • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis was first turned over to me, I said, "don't any man connected 'ith this bank write any man in office about this petition. This bank can not afford -- this bank simply can not affor d to r7o into politics, and to have any man in politics taking any action reference to this matter. ,,nd, gentlemen, that has been the procedure. :Tow tho thing I am trying to explain i • 11' t this letter in stating that we were dependent upon political au-oport is unfounded Ie are not depending upon v.ny support oacent the fact that the right of this contest is Ath the Dallas bank, and that the Organization Committee's action ou-ht not to be overturned. Now, gentlemen, in making this statement, I want distinctly to stato I do not :lean to reflect on any one. I know the gentlemen who represent Oklahoma, and some of thew are versonal frionds, and I am quite sure that, while the • written to may have been 14,ut this matter, that their interest in the mat- ter is simply to present the facts to this Board just like it is being done in thiz: instance, and. I do not want to give an impression otter.ice. BA, I simply .:7,.nt to correct the Impres- sion that has gotten around that part of southern Oklahoma that the Dallas bank ,;as trying to rush into politics. :Jr. Chairman, do you know wl„tit time I am to fixig run:: The Governor ol* the Board: :r. Huff (continuinp7): 1Welve o'clock. ITow, n.entlemen Er. Harrison says that on p4- e 54 of my brief I said the . msas City bank was not competent to take care of the cotton situation,. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis well, now, I am milt° sure that he did not ille().n to put it in that language, because I know that he dould not %:ant to mis- .uote me, or to put me in an attitude or position before this Board that would not be just correct, but hero was -hat was said: "It is therefore apparent that the. rederal ieserve Bank of Janus, mnaged ns it is and as it necessarily will continue to be, by a Board of Directors Who ht.Ive an intimate knowledge of the cotton ind!:zstry, can better serve the banks of Southern Oklahoma than the Kansas City lieserve nank, %:Ilich is operated by directors and officers who, though thorough17 qualified in a. general way and properly disposed toward their member banks, cannot, of coarse, understand the needs of a bank in a cotton growinc region." . the. Now, :;entlemen, that was mg statement.I made. I do not S say these 7entlemen are not competent. - I think they are competont. But here is the situation. The Dallas bank is neces- sarily officered by men who have had their entire banking experience in a cotton country. the cotton business. • They know the ebb and flow of They know that it is necessary to relate the credits to a certain period of the year, and the point I attempted to make was that a bank not officered by men who had had the actual, practical experience in the cotton country, would feel like probably at times that the credits wore -oing too far, and that t'.ley did not understand the cotton s:tuation as a bankfix would that was situated and manned or controlled by P:entle;aen who had put in their lives in bankinrs in the cotton States. And I had not criticized and do not mean to criticize thetkiakaraT bank. • 1 am (!ui%e sure th -t the 7nnsas Cit;, bank is -- has officers that can thoroughly take care of any business, but at the same time it does not necessarily follow that because they have good officers,that those officers have an intimate acquaintance with the cotton situation to such. an extent as that they could render the same kind and character of service as a banker fmmiliar with the cotton situation. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis row, contlomon„ 1ore is )t :O? tldn cropped art in it 0.istinotLi un:orstoo3 tc,.t::Hat this cantost, 'id I &In sayinp: new lo not in t.c wau of criticism, Tieouse I recez- • boon taeil %as boon pramtea by a llize that ',7,,atevor actlon deare to b000t the home tom, but zTeu can not escal:Ye t710 in 'Clio oontcct, • ono thins yin 0t.ma ortt .prominent and that is, thflt cUEthori Cit7 Ilanimrs hf:Ne violted tfhil 12- 3t:retioa of i2rocident filson, and. re not neutral. No:, of eolArso„ tot boila7 true, necosonrily it woild Io mf.toric:a to find out why it V/:J.). this aic- entlo7non sitt:atod triot,• 7A° apparoatl no intorost in tlhe mttter, voulj unnoutral, that they mulJ not lot t;:le £i ht .L:e on without talr- • ing part, : 1;ew„ I do. not Ca: their own people say so. Kiowa„ lOrA. .t they were ttildm 7:Irt, but Vow, horo ls a letter vTrItton Irom ThiS aan-.-thozT do not st-2 this follau at =a in coorcod, or anything of to 1:ind; ho ciays: (Lotter from C. 7;. Crum, Cac:hior of to Arst Ttic Zeaeral Reeerve al Dank, Kiewa, (klahoma, to G., u.nor aato of August ord, 7:Tatington, 1014.) • filleferrin, to the Cf.f:Ort o M1k.13107M1 C1t;77 t 7 that lc in Federal :x)cbanse that . art of ;f:Inc,az to 1*() serve District Moven, fr2m to x11 City Diarict, 7o aro plo!Jlood with the 7)istr1ct as mdc, idfool that to bucinot= of Southern c'klahema can be boot hcInCtIod throlth the ).o.11ao Axtriet, c,Tainnt this ol)f.zvo beiir ,ianti desire to ,7!rotest raaao." 77 Brf. • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis fTho.vo lo another letter from a bank at 2ishorlinco; cialotho -sono Ire.m a banTr at .Durant; aria I niht cay that hr. hcinno, the officer in the Domat ter. wv,s ropponciblo for that lot- aerols ono, however, from the First :altional 'z',anTr. at Prederick: (Letter written by Er. J. B. 'Beard, Jr., CasM er of the Pirst ilational Bank, Frederick, Oklahoma, to the Pederal Reserve 1- 3oard, 7ashin7ton, D. C., dated January 8, 1915.) • 2. 76 Brf. "It is my opinion that this movement was instigated by Oklahomn City bankers, and is being pushe d on account of interests of Oklahoma City parties, and not for the welfare of a majority of bankers in the District. "We are highly pleased 7ith the selection of Dallas as the reserve center of this District, and hope that no change will be made in the present District lines." :Jew, there are five or six letters in this file to the same tenor, and. therefore I say that I am not saying -I am not L'o.king the charge that Oklahoma City bankers have violated the laws of neutrality, but the banks in this distr ict themselves are making that char7e. • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis See? Now, of course, yith reference to this first letter of Lr.'.1rrison's, whore it says there will not be any bank in Oklahoma unless all of Oklahoma is put in one district, would furnish a very patent reason as to why this condition existed. gentlemen, in concludin7, I want to call your atten4 tion to one or two f'cts with reference to the Ixoximity of Dallas to this territory. I am goinr; to tai:e a few towns on the main lines of the railroad which run both to Dallas and to i'ancas City on the h. i. & T.: LeAlester seems to be the farthest town from Dallas. McAlester is 201 miles from Dallas, and is 316 miles from :ancas City. From :•IcA lester, the time to 1)allas by rail is six hours, and the neare st -- cies- http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis H-y est time to Kansas City is ten hours. rail, T_at's by the fastest .- over on the other side, the Rock Island, Purcell Goin:; is the first town south of the river. . Harrison: That's on the Santa Fe. Kr. Huff (continuing): On the Santa Fe, yes;--Purcelli3 Dm distance to Dallas is 206 miles; 2urcell's distance to Kansas City is 435 miles. On the Rock Island, Chickasha would probably be the farthest town north on that railroad, towards Kansas City. Chickasha's distance to Dallas is 211 miles; Chickasha's distance to Kansas City is 415 miles; Chickasha's train service to Dallas is eight hours and thirty minutes by one train, an,d seven hours by another, and its train service to Kansas City is fifteen hours by one train and twelve hours by the next. Ell; City, where Kr. Thurmond's bank is located, is 304 miles from Dallas, and it is one of the extreme towns, and 472 miles from Kansas City. On the line of railroad running from Elk City towards Dallas will be found the towns of Linnegama, Lewis, 1'rederick, Grandfield, and several other towns, all of which would be very much closer to Dallas than to Elk City. Going over to LcAlester, be- tween McAlester and Dallas, is found Durant, Colbert, and several other important towns that get nearer to Dallas and further away from Kansas City. Over on the Rock Island, Chickasha, between Chickasha and the Texas line, is Ardmore, liarietta, L'auls Valley,Grandfield, ilarrison: Santa Fe. Yoa :, re mistaken; they are over on the Yr. Huff (continuing): Yes, I am; Rush springs, Duncan, Comanche, Marlow, Ryan, Lawton Marquette, -- all of which would be closer to Dallas by a considerable distance than they would to Kansas City. Purcell is 26C miles from Dallas, and nearer than to Kansas City. Nearer to Dallas also would be even the towns of Paula Valley, Ardmore, Marietta, and one or two others wlio-e names I do not recall; but the point I want to show you is that you take all of that territory, over all of it, and --indeed, you take the most extreme pointslixtvAractically all of them, are about half the distance to Dallas that they are to Kansas City. You take the principal railroads that traverse that coun- try, and that rua into both lallas and Kansas City, and those points on those roads, the farthest towns from Dallas are practically about half as far as they are to Kansas City. Now, gen- tlemen, they will not dispute that. You take the time cards of the railroads. I have several; they are in my grip; and you will see it takes about half the time to go from the extreme point in this territory from Dallas and to Dallas as it would to Kansas City. Now, if this territory does not belong properly to Dallas, if this territory, situated within one-half the distance from Dallas as from Kansas City,--the farthest point,--and whose nearest territory is probably one hundred miles, if this territory does not belong in the Eleventh District, then where does it belong? If, in organizing these districts, the Committee made an error, which you are going to reverse, when they organ- http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis TT-at ized and established these lines; if they made an error in puttinr this territory right against the Dallas 'Rank in the Dallas district, what territories go into it, and how are you going to establish these lines? Now, gentlemen, it is a matter of impossibility to please bankers. Why, there is of three men not a man on earth, nor any committee I do not believe if the Saviour himself would come down here and lay out these lines,--that would satisf y all the bankers. If it was not the Cklahoma City bankers,-and they are just as good as anyone,--if it was not them, it would be somebody else. kick: It is just the natural American instinct to (Laughter) Now in (ermany, you could not do that. You might co over there in qermany, and you could not get Trarrison t even in the bosom of his family, to say but what it was a good thing, and that they did right; but over here, wheree ver a man feels it is his prerogative to kick at scriethinF that somebody else did, it is no trouble for a bunch of bankers to start up trouble like a hornet's nest in any part of the district; and they do it all over the country. and I could go down in Louisiana, have a contest in a week; get New Crleans or somebody to start a row down there, and there would be a contest. And, gen- tlernen, if you put the stami) of your a9! )roval on this contest, if you take this territory situated right in the face, almost, of the Dallas bank, and transfer it; across Kansas into l‘rissouri, then, Frentlemen, you have opened the flood gate, and you. will never close these lines so long as the law is a law, and that is no lie! http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis H-b' He was speaking this morning about some dire conditions • that he could see in the future, and I assume, therefore, that him you, having heard xim so patiently give you the evils that he can see,--that you will permit me also to do a little prophesying and a little soothe-saying; and now, gentlemen, let me tell you, suppose you were to say, "All right; you all are good fellows; you have got good fellows with ,you," and you say, "All right, we will just tear these lines to pieces because you want us to, and we will tear up these districts." In two years there would not be any law. If you do that, if you overrule the Organization Committee on the finding made upon the testimony, on the facts which exist in this instance, if you should do that, why you would not even get to go to meals; you would have to sit here all the time and hear contests: There would be such a rush of hot air you would have to cool off in the evenings! Everybody wanting to change their districts! Why, every city, every one of these towns that has not a bank would want one; and I would venture to say,--now, you understand, I am prophesying,--if you do that, in less than six months Harrison would be back up here saying that Oklahoma City ought to have either a bank or a branch bank; and in another eighteen months, he would saY, "Let's move the Dallas bank up to Oklahoma City!" men, you can not do it. This law is a practical law. GentleIn the opinion of thinking men, it is the best piece of legislation. put on the statute books in the last fifty years; but it can be brought into disrepute so quickly: http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis And the very people who ask you to do it would be the people 4',:o wouln bring the act, into disrepute. Now, one word as to the general effect of this law. Every- body knows that when this law is properly inter preted, and these banks are in good running order, that the condi tions, such as we had in 19C7, will fade as a mist before the rising sun. is not possible. It This law was enacted for the purpose of put- ting into these federal reserve banks the money that was ly tributary to the territory in which they were. proper It is very proper to keep from the eastern States a congestion of the mon- ey, and to let the money stay in the territory where the products were raised. Experience had taught that the custom that had prevailed in banking systems, and that the custom that had prevailed and had grown up under usages of the banks themselves, were not wise, and that in order to Five relie f to the entire people, some further legislation had to be enacted, and this legislation, my friends, was enacted as a result of this well matured public opinion, and this law was framed for the purpose of giving stability and of equal izing the banking facilities In the entire United States. Now you gentl emen are clothed with the authority; it is your duty to interpret this law, and to say that it does not get into disre pute. It's now backed 1-):' a Wealthy public opinion; everything is in its favor. But, gentlemen, these contests, if conti nued, if this digging keeps on, if nothing can be done unless there is an appeal, if the tine of this Board is to be taken up by harrying of bankers http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis coming on here and saying because I kept a deposit once up here, five hundred miles away, therefore you must take me right out • of the door of the bank I am in, and put me over four or five States into another bank, if that is going to keep up, gentlemen, it will not be long until your law will get into disrepute, and these wise gentlemen who are up here in the Capitol, who make no errors, who passed this law, and who are now watching to see its good effects, if a turmoil comes up, if contests continue, if digging keeps on, thoy will say, well, we made a mistake about that; we will just wipe it off, and that will be the result; ad that's sure to oe the result if things should • happen to take u turn in two years that some of us do not expect, and if some of our distinguished statesmen that now so eloquently defend their positions in ,ashington should lose out, and some of the other brand should come in, and this law is brought into disrepute; it is not their law anyway; they will say, we will wipe it off. Now, gentlemen, this law, in my opinion, and that of the press, and of thinking men -- of course when I say that, I just get in Harrison's class --. thinking men have pronounced this law as one whose benefits will be farreaching and substantial. • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis That of course means that the law, if it is let along, if you are going to tear down these districts in less than three months after these banks start, when are you going to put up the bars and keep them up? tell within three months? How can you How can you toll that these three gentlemen who went all over this country, and heard this testimony, are in error? Why, gentlemen, it occurs to me that the http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis only thing that can be done is to postpone ny action in this matter until these honks have been permitted to get on L firn foundation, until they are permitted to get the strength that the law authorizes them to get, so that you may intelligently pass an opinion,--not dream conditions as they portray them to you in prophesies of dire evil that may come, but that you may determine by exrerience ,flether this committee, in its judgment, has committed an error. And now, gentlemen, believing that this contest is not one of merit, and that this Board will commit a very grievous and far-reL.cl'ins error f they rhould overturn the juugment of the Organization Committee, I submit this matter to you, firm in the belief that business men as you are, you will simply weigh these facts, and will not transfer us out the door of the Dallas bEnk territory, vithinthe greatest distance being less tht..11 three hundred miles, to a bank four or five hundred miles away; and I submit this case to you, gentlemen, in all ec.rnestness, believing that the action of the Organization ComAittee was such as it should have been, that it was beet -upon a full arid fair hearing upon the ground, that nothing 11;:..s been shocrn to chrnge those facts, and that if you try this case on the same facts that the Board tried it on, if you have before you and consider simply those facts that the Organization Committee considered, and as your rules say you will consider, you will then be compelled to say confirm the judgment of the Organization Com- mittee, and. that these lines shall reziain established until experience shall have taught us that the error has been committed, and we will not try to prophesy and foresee error in the future. • I submit the matter to you. The Governor of the Board: You have ten minutes, Mr. Harrison. Mr. Harrison: ten minutes. I do not think it will require all of the I would like to explain first why in our brief we did not refer to the Organization Committee testimony. The testimony before the Organization Committee,--the only testimony submitted by Oklahoma bankers, was submitted at the hearing at 7ansas City; the only testimony given in that case was in favor of placing all of Oklahoma in the :ansas City district,- • not one word of contrary testimony. The respondent in his brief quotes a statement from Li.. Banks", made in that case, that Dallas was his second choise, but there was absolutely no testimony submitted before the Organization Committee, requesting that we be placed in any other than the Kansas City district. Of course, there were very kind suggestions and re- marks and remarks thrown out by the Kansas City bankers to prove to the Organization Committee that we ought to be in Texas, but I am speaking from the Oklahoma standpoint; therefore, we felt it was unnecessary for us to review testimony • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis which is absolutely all one ways ilot only so, but ,.1r. Howard of Dallas, who was the chief witness of Dallas before the Organization Committee, made this statement, on page 3236 of the record. The Secretary of the Treasury asked the normal course of Oklahoma's business, and their exchanges is with Kanaas City and St. Louis, is it notrEr. teplied, ii-g' "krimarily, yes, sir." On page 241 of the same record occurs this question by the Secretary of Agriculture: "Have you any communications on the part of Oklahoma people indicating their preference?" which To replied, "No, sir." Valat would be the use of our going into the testimony be- fore the Organization Committee, when it is all one way? Our brief simply amplifies the testimony which we gave at Kansas City, and which we believed you needed to have expanded, in order to have a true estimate of this action. As to the Lolitical elements of this, our brief statement, • we were willing to submit this matter to the Federal Board without regard to politics. I, will state that the banks in Ok- lahoma are different from Dallas, which is a federal institution, and yet represented in , :,ashington by no one. Those banks were represented by :enator Owens and Senator Gore Wind the congressmen referred to, and had a perfect right to see their interests were taken care of. would ever enter e have never believed politics into this case;if we had we would certainly not have been here. In the gentleman's argument regarding the course of trade, • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis he said "the course of trade for the South." He has only spok- en of one side of it, and has not said one word about the imports into that country, practically all of which, 9xcept the small amount which comes from Texas,--all the rest comes from Kansas City, St. Louis, Chicago, and the Southeast. It is not correct that the course is the other way; the course of 11-h' trade is from the north and oast, but the large volume of exports of cotton and freight r_:o by reason of freight resources, to the Cuif and eastern ports. He srolce about mail facilities, that it is two hours days -- from some points near -)allae to Kansas City. 'hat difference does it make to a bank that posts its lettcr in the morning and theletter is delivered the same night, or whether it gets on the train immediately and reches the bank the next morning? Is not a Point in this territor; There where a letter posted in the afternoon will not he in Kansas City bank the next morning. It does not make-any difference; over-night facilities are what v:e are after in the banking • business, I should have referred, in the course of the letterE, to the fact that the First National Pan( of Chicao;o, one of the twenty-two, is represented here in person by oho of the direotors, sent here for the Purpose of speaking for that bank,' In cr,oinr7 through the record of Exhibit A, I forgot to mention that -- I do not desire to detein the roard any longer -- we presented our arTument without oratory, --no evidence to show yell TO could make 9 speech, or anything of the kind, • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis but T do wish to cay ve believe we are entirely withi rules on this occasion. the It seems to re it is somewhat out of line for the 7entleman to come down here and say we have no right to present our petition when in the rules that are formulated by the Board it is provided that the representatives, that is, of the respondent ban'-, shall be river seven days in which to reply, http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 22d day of September -- or the Our petition was filed on the until the 22d day of September 15th day of September. He had He filed it on the 30th under those rules to file the reply. ing about it. We are willdAy of January. We have said noth necessary, to get up a reply; ing to give them nal summer, if hs, in which to file their but when they get three or four mont that we have not conformreply, and then come up here and say attention to their ed to the rules, we feel obligated to call the rules of the Board. awn failure to observe the terms of not called to the Mr. Huff: Mr. Harrison, the matter was first of January. attention of the 'alias bank until the It is not our fault. Mr. Harrison: I beg your pardon, but I have records from the Federal Reserve Board which dhow it as called to October, but we the attention of the bank on the 20th day of state that is will leave that to the record, and I will not a positive fact. The law itself states, -- I think I can rtioned, understand plain English: "The districts shall be appo determination provided, -- this relative to the review, -- "The ect to review of said organization convittee shall not be subj ided, except by the Federal ':eleerve Board when organized: Prov due regard to the That the districts shall be apportioned with l not necconvenience and customary course of business and shal 71e are here essarily be coterminous mith any State or States." d be subject contending that it was not so formed; that it woul are perto review at any tire under those circumstances; but fectly rve to abide by the rules of the Federal Rese y offered Board, because, under those rules the only testiron hero has been under the contention of *Oklahoma* If you can find one iota of testimony given at the Kansas City hearing • and the Organization Committee notified them to appear there and ;i1aff where they wanted to go -- If you can find one iota of testimony given before the Organization Committee, which shows we wanted to fro first to the 1)allas bank, we are willing to withdraw our plea. Every man who went there made the contonion we are makirg here today. Banking is not all our business; we have every other kind except export of cotton, and some of those products come from the east; and it was our natural location, and we should be permitted to go there. If this hearing is based on the testimony before the Organization Committee, as the gentleman contends, we are perfectly willing to have it decided on that ground, because every item of that testimony is in our favor. I feel that our facts have been presented as facts, and there are a number of tre issues which the gentleman presented which we do not thinkare pertinent or that this Board cares very seriously to consider; at least that is our opinio n of them. Vie came here to present these facts. It is not a fact that the vankers of Ohlahoma were against tip bill. the gentleman' I call attention to thefact that the author of this bill i;E' from Oklahoma, and is an Oklahoma banker. And the bankers cf Oklahoma stood behind him in this move, and it is not fair or right to come here and contend that the bankers of Oklahoma were opposed to this movement, whon we have done every- http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis thing we could to have this bill promulgated, and gut in force in the proper way, and we believe today we are better friends of the measure because of trying to get these banking relati ons transacted through their natural channels than men who would ask the government to compel banks to place their balances where they do not and never can belong, and we believe the Federa l Reserve Board has sufficient experience in the banking busine ss to know these are facts and that they have been stated as facts and can not be controverted. I thank you. The Governor of the Board: We will adjourn until three o'clock, when the Senators from Oklahoma can be here. (Whereupon the hearing was adjourned until three o'clbc k, p. m.) (The hearing was re-convened at 3:11 o'clock, p. m.) • The Governor of the Board: Gentlemen, I have just receiv- ed word from Senator Oven that it will not be possible for him to be here this afternoon, so th, t the only thing to do is to adjourn this until such time as we hear from him. would try and lei, us know when he could come. He said he So that I do not know that all the gentlemen care to stay here, but of course the representatives of the two bodies would naturally want to be here, and hear what the Senator had to say. Er. Huff: Mr. Chairman, would it be possible for Senator Owen to put his argument in writing, and give us an opportunity • to reply to it in writing? The Governor of the Board: I think it is perfectly open for you to one the Senator; I have no doubt both of you could see him about the matter. I think he would be very glad to see you. r. Huff: Of course, I have no disposition to want to cut the Senator off from being heard, but at the same time I have made a business engagement in Viashington, Pennsylvania, tomorrow, making my presence tore imperative. • a good ways from home. You will understand I am I got here yesterday, and figured we would get through today. Not only that, but I made quite an im- portant business engagement for tomorrow at Washington, Pennsylvania. s it is it will be a week from the time I leave here un- til I get back even at that, and I had just thought that possibly the Senator would not mina reducing his argument to writing, http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis and Eiving as an opportunity of replying to his , rguJlent by written argument. The Governor of the Board: ell, now, could you possibly come back the day after tomorrow, or are you so tied up that you could not do that? r. Huff: I have to be home ilondcy, and that is the only way I can do. The Governor of the Board: Eow, I suggest you go down and see the 2enator, and let us know about that,--both of you go down. Mr. Huff: I have in , shington, vennsylvanic„ tomorrow, Mr. Harding (addressing 1:,r. Harding, of the Board), a very important bu,;iness engagement. Mr. Harding: Tomorrow is Tharsday, you could leave there tomorrow, and get there Monday, could you not? The Governor of the Board: -ould there be any certainty that the donator would come Friday? YOU all know the character of the engagement he has. Huff: ing. I suggested that he reduce his remarks to writ— 3f course, I do not care v.hether that is finished in a week or ten days. The :',Jvernor of the,3ocrd: I suggest both of you go down and see him. Huff ; That will give me an opportunity to reply in writing. The Governor of the Board: Of courti*.e I feel this,--Lnd I think I express 'ore opinion of the whole 3o. t you have the right to be present when the Senator or anyone appears in this matter, and having been notified by us that two hours would • be the limit, you come here in good faith; so in a sense we are bound to accommodate ourselves to your engagements, or any of the other counsel; so I think th,3,t is the best suggestion, if you will see the Senator. Mr. Huff: Will you not agree to hvve the Senator reduce his remarks to writing any time? The Governor of the Board: As far as that is concerned, we can have the Senator present. Mr. Harrison: • I would not care to speak for Senator Owen, because I do not know what argument he will make. The Governor of the Board: I think it would be better if you both see him, 3o I think we can consider this is now ad— journed until you see the Senator, and we can convene again to-. morrow morning or afternoon. Mr. Huff: I can say to the Senator, can I, that it will be perfectly satisfactory to you gentlemen to follow a written ar— gument. The Governor of the Board: I think we would not bbjeet to that, if the Senator cares to do that. • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis mr. Huff: In a week or ten days. Mr. Harrison: I think the chairman's suggestion that the stenographer be present and take it down would certainly meet that requirement. The Governor of the Board: If you see him and let us know the result, I think we can arrange it in some way. Mr. duff: ”ell, of course, if Senator Owen is to come in person and make argument, I feel the only viay to answer that • would be by an argument. ment, I would be very glad to hear the argu- nd I a.Y. extremely regret that I am tied up this way, so, under the rules, under the papers, I knew any kind of an 1.7.,u- ment would pet through in one day, and therefore I made this ongacement tilz_Lt I have. The Governor of the good faith throughout, You have acted in perfectly rid, we will try in oome way to accommo- date you., but if you will see the :enator,1 feel -are you ;All be able to straighten that out in some way. idr. Huff: • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis All right, sir; I thank you. The Governor of the Board: e will now tdjourn. (Thereupon the afternoon ses3ion of the hearing was adjourn ed, to re-convene at call of the Governor of the Board.) 1 (Thc hearing was resumed at 3:15 o'clock, p. m., Febru ; ry 11, 1915.) The Governor of the Board: senator (Hon. Robert L. Owen), we will be very glad to hear from you. Let read, before you begin, this communication from Mr. Carter, a member of the House: "February 9, 1915. "My dear sir: "Herewith I hand you a number of letters received by me on the question of the division that no exists in the ,,tate of Oklahoma with reference to tlo Federal Reserve Bank Di,tricts • "You will note that a large majority of them favor a change being made so that the entire tate might be placed in one District, and I am inclined to think that it would be better for our State. Very truly yours, (Signed) U. D. Carter." "Chairman, Federal Reserve Board, Trealury Department, Washington, D. C." • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ARGUMERT Y ION. ROB7RT L. OIEN, UNIT7D ST.ATES SENATOR 10RO OKLAHOMA. I think the letter of Mr. 6arter was simply written in an off-hand way, and did not intend to mean that if it miht be thought judicious to place some of his account with the Dallas district, that it might not be wisely done. :hen the urgenization iDoard was charged with the duty of dividing the nation u!, into twelve districts, and determining what city sheald be the hal.itat of t;le proposed federal reserve http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis bank of that dist-J:ict, it broug.ht up a great variety of acute situations in which the ambition of states and the ambition of cities were involved, and was an extremely difficult problem for the Orga7:dzation Board to work out. I was of course inti- mately aware of the difficulties they were meeting, and when at last they made these divisions and it was submitted:to my attention that this proposed line had been drawn through Oklahoma, while I very keenly regretted it, still the organization rioard had done the best they could with an extremely difficult and Involved situation, and for that reason I stated to them at to time that I would not at that time 1.-ise any issue about it, but would let the matter reet and come up in re;ular order befor the federal Reserve Eoard. order. It now comes up in proper Ly purpose in that delay was not because of any indif- ference to the matter, nor because I did not appreciate what the wishes of the people of Oklaoma were, but because if that demand had been pressed, urging the r'rr),.anization 73oard to reconsider their vie:: at the time, it would have made. a precedent for a great many other demands made by various cities, such as _ittsburgh and Baltimore and others that felt t at t;ey S should have had a bank location, and the question of these lines would have been brought forward, and I thought it bettor for the eisting good order not to raise the issue. Oklahoma was settled in large measure from the north and east; first, from St. Louis. St. Louis was the first important wholesale center, and their traveling men were the first ones to come into Oklahoma in any considerable numbers, and afterwards Kansas City became an im ortant - and a very important distributing center, -- so much so that an observation of the map shows tho connections 1:eteieen 'ansas City and N:lahoma, be- • ginning with the railroad just on the edge of Oklahoma, which passes back and forth across the state line at various points, the road running: from ansas city to the Gulf, the so-called "Pittsburgh and Gulf,' then comes in the :rice° Railway, the Lansas City, Oklahoma and 111f, the 37. K. & T., the Sante. Ze, the Rock Island, and a number of other lines, mal-ine eleven different connecting lines running into Kansas City fro. Oklahoma. Of course, those lines connect with various cross lines, binding them together, so that more recently Kansas City has • l'aduaL:7 been receiving a more and more i portant part of our business, both commercial, financial and social. :or that reason, and because th6 extension of commerce has been first from St. Louis, and from ;.a.nsas City, the merchants throughout our State have established their accounts in that district. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis he http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis more and more last fifty years it has been gradually growing latclosely connected with St. Louis and Zansas City, and of its terly still more strongly with -ansas City, because very close proximity to our tate. It is for that reason tht d these facts have transpired to which !:r. Harrison has calle the atL Tntion of the 3oard, that in zansas City you will find all the banks of Oklahoma, almost without exception, have an account. venient to They use it as a reserv,.? city. 12hey find it con- o there, becaus( of the interchange, --commercial, financial, and social. for our 5tate. It has gotten to be a business center ,o have very pleasant relations, too, with 2,al- las, but they are relations more of a social character, due to the fact that many citizens from Texs, as Oklahoma was opened -up, come in to find LI-nc' in Oklahoma. 7e have several hundred thousand people who at one ti e or another lived in Texas. Fe our relations are very friendly indeed with Texas, but the firnmcial relations with ')allas at -:11 events are very small, , except some banks established by citizens who live in Texas r and who established several small banks on the southern bo±de :. of Oklahoma bucause they thought it would be profitE1-1, Now, 1r. Harrison has laid these figures bef-)re the and I wish to say this to the -oard, that, oard, at Texas as :111pire, -almost a mighty empire -- it is big or than the German ps greatand I think it is more fertile naturally -- it has perha of Texas er natural resources, because nearly all of the land will be abundantly available for agriculture. There h.ve been r:overndiscovered in rpcort years, due to the activity of our merit, many drouth resisting plants, that is causing that land, even on the far west, to have great value, and those values will steadily enlarge, so that the time will come when, in my judgment, all of that 1% -ad heretofore known as "staked plains" will be extremely productive. They hale found the Yaffjr corn and milo-maize :end foterite, all of which resit drour-',It lel a wonderful fas ion, standing quietly by when the e is no rain-fall for six weeks, and then suddenly reviving. Those plants are en- tirely different in charater from Indian corn, which when. -dice shocked by severe drought, does not recover. hold their own against sevor1 drouth. These -elants will Their nature is such that they do not discharge moisture within the body of the plant, but bold it firmly, and when the rain does come, immediately they spring forward and deliv r the grain. It is very Food corn, too, ma'inr: often forty or fifty bushels to the acre. '2hat is a very important consideration, because it means that this vast empire of the south::est will grow larger and larger and more important in its production of great agricultural values and therefore A all commercial values, and therefore of all financial value. (:o that Pallas, starting out as it does with approximately five millions of ca ital, may expect, within a comparatively few years, to ,:, _;et larger and larger, and 111/ http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis more and more important. '-en we look at the eblic utility banks of .:Airoee we find that there are about t:enty of those banks. land has one, and Even little Hol- elgium has one, though very small, not much bigger than a county in Texas and I call attention to that because there might be an idea that 2allas was 7oing to suffer some harm from allowing these clearings of Oklahoma to be taken through a central point of Oklahoma. Under the rederal Reserve Act it wae, provided that there should be branch bans. The State of Oklahoma, having its capital at Oklahoma City, almost in the exact phsical or geographical cente -r. of the State, e. city which has sprung to e population of seventy thousand people. ITow with a very larp:e comercial and financial i-usiness; with somewhere about 350 bank accounts in the various banks in the State centered at Oklahoma City, would naturally like to be allowed to clear through a city belonging to the State. • They get to- gether, -- the bankers of Oklahoma do -- in the state banking i as association, and these same men who are engaged in ban' irF; directors antl officers are engaged also in other 'cusiness for which for their natural comenience they ,-et to,e-et er in Oklahoma City. It is a social center as well as a commercial and filancial center, and these people all -now each other, and they naturally feel that if there is a value to the clearinp-s of a local character, -- a commercial value to them, an industrial or a financial value to these clearing, that Oklahoma might be permitted to have the values which their win people create, • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis rather than to transfer one-half of the -tete to ljellas and another half the state to 'lansas iity; and then on the theor77 that there is no center to the State, deprive the Sate of a 1.:rnch au I do not think it is an improper ambition at all for Oklahoma City to desire whatever of - alue there might be to VIr local clearings created by the -crlues within the confines of that particular litate; much less is it an improper thing for • the banks oL the State, ihose clerin7s are involved, to desire to have those clearings :through a central point, :!,'en they are in the habit of meetinr- together in social interchange or business int-:rchanges at the conventions that are constantly taking place in Oklahoma City throughout the year. '3o that I thinl: the action of the t3oard is a very wise one, in laying down the question, How do these banks stand ',bout this? -hat do they say aboul, it? quainted with evert, detail. • They are intimately ac- They know where their exchanges go. The, 'mow where they .rould like to have their clearings take place. And as they have the knowledge affecting this matter in their hands, in their minds, their view ought to carry great weight; and so when the rr7anization Board made the first line, and I called their attention to the desire of the people of Oklahoma that these clearings should be through a center in Oklahoma by a branch bank at some time, the suggestion was math- before the Board itself was organized, I elieve, that the ;roper step to take was to ascertain what the banks felt about t at, and if they preIerred to go to Dal- • las, they should have that right; if they prelerred to go to Kansas Oity, they should hcve that right. It was left in a way to them, not entirely perhaps, but their view was to be very specially considered, and therefore I advised them that the proper thing to clo would be to ascertain what the bans themselves desired about it, so the voice was taken, and a http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis very 1....rge preponderance of them, -- three-fourt;is or more -expressed themselves favorably to having the State of Oklahoma • .ansas uity, looking forwrd, of go to .;, course, to he clearing through a branch bank at some poiLit in P'.1ahoma. Now, as far as the argument roes that Dallas could not extend the financial accommodations to the banks in southern Oklahoma that :ansas City could, in the argumont made by I thin' there is great force r. duff that Dallas, in such a con- tingency, might borrow money from banks in the n rth, where the wheat crop had been harvested, where they were collectinp. this money. I think there is also force in the fear that Oklahoma mi7ht suffer from lack oi accommodation, since the cot- • ton crop does mature, beginning on the Gulf, a good many weeks in advance of the crop in Oklahoma, where the north edne of the liAe of cotton producing exicts. I think there is some force in the contention that it would not be so convenient for the Dallas bank to furnish this accommodation to the banks of Oklahoma as hansas City, but I do not think tnat is of sufficient importance to make a very great point about it. But I thi k the matter of state pride is a matter that deserves groat consideration. • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis I do not think that should be disre(rar'ed entirely, and especially where there is an actual financial value involved which is created within the confines of -tate itself. Now, it is shown by the records that the groat volume of our business goes through Kansas City, that all of our banks have these accounts in Kansas City. Thme of the banks in Ok- lahoma have two accounts in Kansas uity, with two different re- serve w-ents, so that . -reat preponder: ansas City shows a vex ance, in our banking busine:'s over Dallas. I do not munpose accounts in Dallas, that any of the bans in Oklahoma keep reserve rtinr, financial because Dallas has not ly:en looked to as a suppo center of our section. e have a good many connections b: rail about double the with Dallas also, -- probbly four or five, but number with Kansas City. t .„:he argument as to the over-night mail would apply almos because it is enua3ly as well to Dallas or to Oklahoma city, City. only on,: night to either !Jtalas or Kansas Leaving the e, we can leave central part of Oklahoma., where I live, .yt :-uskon;c there at very late at night, and t to :ansas City the next on the five morning, and in fact we can leave Oklahoma City in it. Louis the next mornO'clock train, the M. K. & T., and be er than 1:ansas City; ing, which is several hundred miles furth gh Kansas City, and our people have just naturally cle,,.red throu because http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis of its convenience, and Lecause a mere matter of over- night was not of great importance. The items come up over night, that's the and they get the credit without correspondents, and end of it. The correondents got the returns the next day, and the day after. it. Now, I think that's about all the argument there is in conIn the act itself there was provision that the natural I think venience and course of trade should be considered,and that the frie evidence is var. conclusive 7:ith regard to that. course of trade and the convenience of the tate has been empha- that ii,ansas City sized by the evidence submit'ed here as snowing was our natural center. People seek the place of their own convenience, and the fact that they have gone there is . final answer to whether it is convenient or not. The f ct that they hive gone therf proves th:t it is the movt convenient place. If D llas IDA been the moLt convenient place, they %,ould have gone to Dallas. If Dallas had been the line from which they 2, they would h. ve They have not gone to 1)11,.s. They have gone would naturally send their financial busine gone to Dallas. to ICiasvs City, .na th t's an idastr that in my judgment is con— clusive. It of course is true that our cotton b lea physically go largely by these roads running to the Gulf, via GLave. ton, and New Orleans beoaue it is a shorter line to tide water, but the financing of cotton shipping goes to New York, via Kansas City east, because the punch se of cotton is generally through New York, 'nd the exchanges go through Kansas City. I have received a great many letters from OkLhoma b_nkers relating to t is matter, favoring Kansas City, and I have sent them Nil at least I instructed my secretary to send them all — to the Board for the inform tion of the Board. I hardly assume th.t you gentlemen would h ve time to re d ti,Lt volume of letters coming in in th t ay, because you have other cares besides the reading of these letters, but they unanimously -- I do not re call any letters I received favoring Dallas. Now, I do not think there ought to be any pride of opinion about these districts. The Feder'l Re. erve Org nization Board had an awfully difficult problem to solve, and they did it the best they could, and when they made th:t decision, I acquiesced http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis nd I would in it without any delay, giving them to understc they have no bring it up in an orderly way, ;ind I 'm very 1:urc pride of opinion about this. or the other ,,bout it. I do not think they care one way I do not think it till do Dallas the ntic district least harm, because the Dallas district is a giga h more rapidly any way geographically, ?_,nd it is t, di.trict ..hic loping. thPn other prrt of the United Sttites is deve 11 that part, ;:own in that country down in the extreme southwestern 1E' one of the most mag— Brownsville country, on the Rio Grande, world, not only by the irriga— nificent productive domains in the Grande, but there is under tion that is possible from the Rio the latitudes above, and ground writer there th, t sweeps in from country; 'nd it is a very gives artesian water over much of that red dollars an acre any time. rich soil, ,iorth three or five hund of its on, tnd there need 3o Dallas has an imperial domain as, as she will never the less be no jealousy on the part of Dall grow greater as the years have a very great bank, and which will http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis go by. people of Texs The Dallas bank alli be as grcrA as the could desire. should take your Now I do not think of any oth‘r thing I Oklahoma hLve showed time to present. In brief, the people of convenience for them has by their acts that the line of business account:' zre with Kan— taken them to Knsas Uity, because their COUITO of trade is shown oLs City, and are not ,,ith Dallas. The as, and as the purpose to be with Kansas City, and not with Dall , I think that our claim and spirit of the law are to be observed should be permitted is verythestrong th't the people of the to accustomed to go,ftnd that to go/City where they htve already been 12 the hoa11. be ]lowed to have a situation where the contempla- tion of the reserve act for a branch bank might be carried out as to the State of Oklahoma, because if one-half the 3t9te goes south, and one-half the State goes north, obviously there would be no sufCjoieAt justification to demand a branch lprik in the Auto at all. Now I thought in the drafting of the federal reserve act that in reality it was not originally meant to follow those state lines, that the question ,f convenience of 1,1- ae should be the controlling factor, rather than state lines, :,nd I think so now. I think those fifteen or twent:7 banks,--whc.tover the number is that dec,ire to F't) . to Dcllas -- I Ger: no reason on earth why they should not be permitted to go, nor do I see c.ny urgent rec.son why county lines should be divided bocause under the system as it ho existed all these years in Awerica, the First liationnl link of !uskogoe, for instance, has a reserve agent in •liew York, and the Arundle kiational Bank hniii a reserve agent in Cnicago, and the Commercial Dational Bank an agent in St. Louis, the Third iational in ICE.nues City, the Reserve ilational /-nd other banks the sc.irle ;,ay. where. tr.ey A.ense, They take their reserve .gent:: - nobody'F' disconcertPd b.; it. You take the banking encyclopaedia here, the2e correnondents of every single bank running don the pago,--it ioc,o not create my confusion. The bank iimealxkxxxit does us it plet,ses tand there ia no Jifficaltj about 11 ft all, so tL-t if these counties are cut out, just by county line, we have no objection to that especially, but I think thht this dividing line ought to be made in http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 35 cordence witn the overwhelming v,ishes of these people, und I. thank you gentic.rien for the courtesy of your attention. The Governor of the 3o,9rd: oenator, I was vsked by a mem- ber of the Board to ask you au to what in your ofinion is the mec.nin of that clause in ,:ection 2, "The deterAnation of said. Organization Conmittee shell not be subject to review except by the 2ederal Reserve Board when organized." "review." Does that Terl that we That is the word, re to review z, record of the Organization Coalmittee, or does it mean that we are to take up the ;latter entirely anew, a.s if we were Senator Owen: S separate organization? interpretation of that language is that it is to review the action and not the record, because nobody knew ;rhere this line w:s until aniloanced. ;tow could there oe any prinry presentation of evidence upon a situation that was not known until after it was determined? 1,nd when you consider the task that the Organization Board had. before them to dn.-,vi these lines and to draw them rapidly, bec?.-use the' hf,d, to go all over the Jnited ,-,tvtes, three thousand miles long, and fifteen hundred miles across, it was obviously impossible for them to pat a microscopic examination on the evidence as to proposed • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis plan': here, there and yonder. get out of it olive! They did very v'ell indeed, to (Laughter) iind evidently a. review must mean E.. review of their action, not r reviev, of ti ,e evidence, because you can not submit evidence on a cr.i3e not known. If Oklahoma had known that that line ;,as pronosed, and Oklahoma had presented this evidence, and had had a hearing upon such a division, then it -night be, properly contended thLtt Okla- ,56 homa chotild bo committa to tho 01:1:711v1 r(J:or t but to confine Oklahoma to reebrVY'qlch 1,3 impoccilole to 1.;.0 -made, is akinrr fi ri11 rcallzr wioh to the imosrablo, nrul, no one, I to answr any A.11 ectnc cny of yoi .7ant1e. mon maN :carc, tc propound. • ;00o PLho (;rrmrnov of tho 70ari: V7 on car° to aoi: any (1.11.(Y-7tionn? . cottoa io loxr;o1-,,- cm, In porta t to It rot? mto•L'7 rrron: Uorth S http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Itjz nut.1h of it 3ocic to I 7o Aot 1.)111., Am not rilljt- ryf 'Ir. it1n'lloor, no trinr.i.r7ort:',..TA'n th17, cotton south :'.t .'r of con-y,;:tir,ne5 to '..A.Lts thrOnis!thiz or cnor points? f'.3on°%tor: Mr. No. Dolcno: ..011. T T .yon .ntlomeni, 711.7cr. to aok a fillo7tIon: i.no.o act 3.0../ruaro: "T'lo (7_77..strietc Vrac e:r.-.1; C. may adjutofl and. nov al_triotc may from tinIn to time ?c17(.77 t not to crr'nod t-:;-',1iro. 1):1: the PodFri croatoC_ ,17." Senator Owon: You um3.orotand tiat lcu7ne3 At dlTerAionarz: with thip 1oar6 to antcrminn mirfat bo? ntor (' - or).-: 1 thinlr it 6oe2. • .yc tc; mt770 0,4 -7- http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 37 ferent alinments other than supT:ested? 2or instance, in this case, on petition, would we have the authority to do it? 6enator Oven: -r. Delano: You would have the authority. On our own knowledge of the conditions? Senator Owen: Or any other district. The intention was to give the Board the power of the p:overnwent itself in dealing with this s',yste:n, rld so fpr as it would be expedient to do, and as the law indicates. The Governor of tne Board: That is the general power of re-districting would point to the future? Senator Owen: yes. The Governor of the Board: -- whereas the power Co re- view would refer to the past? Senator Owen: Yes sir. The Governor of the Board: 3o ten years in the future, if c.'2. went tk) redistrict, we may? Senator Owen: Yes; you would still have the right in the future to ohtinge these lines. Dr. to “ould thet extend/the power of reoucing the num- ber )f districts? Senator Owen: The lti; gives twelve districts. I think that it would extend even to the power of reducing the districts. I am speaking now merely of the power. Dr. Yee. The Governor of the Board: you, Senator, for coming. Vie are very much obliged to o8 ARGUMENT IN REBUTTAL BY MR. CHARLES C. HUFF, COUN— SEL FOR RESPONDENT. Gentlemen of the Board: I desire to be heard on just the two questions asked the Senator, As to the question of review, thil Senator saia that mans that this is a trial de novo. ;tell, I think that's the first time it over occurred to anyoody it was, because the Board came to make its rules - regulations for the appeal specifically provide you shall refer to the testimony taken before the Organization Committee. 4c)w we have tried -- scrupulously tried -- to try this on that testimony, to pre- sent the matter on a review. • CU30 That's what it means;- novo is no review, but a new trial. a trial de ::nd while Oklahoma has seen fit to go out and got letters and statistics, when it enme to answering this brief, we lookea at your regulations which said thLt you shall refer to the testimony on the record taken before the Organization Committee, and refer to it by page, and on that we have scrupulously tried to act. ixow we would be at an entire disadvantage if they can come in here with other statistics taken here and there over the State of Oklsnoma. no opportunity to see them. • V,e had 1;03 had no reason to believe that that testimony would be considered, bnd then to be presented with the question that this review means to try this case over anew, without one side having any opportunity at all of presenting testimony, is a surprise and not entirely just and fudr. Now, the Senator, i um quite sure, meant to give you his best information about the cotton export and moving of the crop not http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 39 being financed in the South, but 1s Islistel(e in that natter, think t is purely because he had not looked into the question. in this record taken before by the Organization Com attte, there was a stetement on page 123 showing the cotton area or the South, and the cotton area in Oklahoma. P.23 Brf. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis eow it said: "'Dallas cotton buyers have salaried men covering all sections of Texas, Oklahoma, .i,rkansas and Louisiana, and paid out for cotton last year approximately 02,000,000, and approximately 48U,000,000 of this cotton was financed directly or indirectly by the Dallas banks." M)e that's a record before the Organization Committoe. That re- futes the k.entleman's statement teet it was financed in the east. ilow that's the only testimony tLet we thought that the Board would consider. mony. 1 should have gotten up additional testi.- Just look, .--entlemen, just for a fee; moments, et what a short change has made in those banks. liow it appears in the brief of Jklahoma bankers, and it appears from stetements made by Senator Owen, Lnd these othEr gentlemen, the.t three hundred someodd banks signed Frotests, yet this bank has not been in operation but three epnths, and they were forced to exclude five counties because twenty-eight of those banks had already gone on record as wanting to stay in Dallas. They have also l a gentleman informed me todLey, written a letter to this Board, saying they wLnted you to exelude from this petition any names fro County, steying just as Johnson said in hie letter, teet it, they rushed into ,.ometning before they knew anything about and that we should work this thing out. argument. junator Owen made a very pretty and logical 40 But you follow that arguent to its coilclusion, md you have not but one bank, gentlemen. • If, because Oklahoma banks had clone business in Kansas City, you are going to cut off this portion of Oklahoma, and send to Kansas City, then what say to Jew :,lexico? ';;hat will you say to i:rkansas? you say to Louisiana? will you 18hat will 'hat will you say to A.ssissippi? who have done no business in ;eorpit:.? It was a practical impossibility for anybody so to arrange these districts t.s that they would necessarily follow the lines of bank recount, iness. • ow bank accounts do not mean trend of bus- Tnese gentlemen can go and do business in Kansas City. They have open market facilities there, if they want, the Yet at the same time it would be a distinct advantage to them to have another facility to their South, where their 12.roducts are sold, and where all their products are shipped. low, in one letter in this brief and there are only two additionn3 stvtements of fact, gentlemen, in this entire brief of the Dallas bank. It is based entirely on the record made before the Organiv,ation Committee. In two inti-Ices, because these gentleuwn 11N3 tried to make it appear in their petition that the commerce flows north from Oklahoma,--I got a letter from a cotton broktr, and a_ member of the Jew Orleans xchange, in which he thought ninety per cent of the cotton raised in southern Oklahoma was shipped into Texas, and most of it was financed that way. I got another letter from . 11111, who is one of the biggest grain dealers in the southwest, stating that :wout ninety per cent of the surplus of all the grain products raised in south- http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 41 ern Oklahoma were either sold in Texas or Louisiana. That's where they wore sold, or that they were shipped out through the Gulf points. Now, another thing: If, gentlemen, the trend of comelerce wore to the Gulf, as these gentlemen state it is, on account of the favorable rate in that connection, then the trend of imports necessarily is throuth the same way. It comes to Galveston, Noir Orleans, from the Gulf, and not the railroads into Oklahoma,— the heavy freight--and that's apparent even from their own brief that the imports taking water rates come right in through the State of Texas all of it that comes in this territory. Of course there is a groat deal of force, if you do not stop to consider, in the gentleman's x.gument that the banks -;hat iThe banks say ou'eht to control, 1u if that's true, gentlemen, if what the banl-':v say is goinr, to control, then you have not a district in this United states that will stay hitched. By the sLIfe) orocess you wi'l detach Arizona and New Mexico from this Text„s district, you will take Louisiana and Mississippi from your (Ieurrija district, and so on all through the line, until when :you get through trying to follow the whims of the ban'-s, you will not have any districts. Now, I differ from Senator Cwon as to what the 'cord "reIt's found in view" means. It is nothing but a bill of review. the statute. You can not put a new construction on it now, be- cause that would suit somebody that wants it that way; but the; word "review" reans just what it says, that you , ave got to tae this record which is already made, and you have got to put 42 ts shall the test of reason to it, and cee whether these distric stand, or whether the error of t'ee Organization Committee was such a gross one as that you would feel warranted on that account to sot aside that opinion of the Oranization Committee. hnd unless you do that, if you are goinr: to try Oklahoma's case on now testimony, presented for the first time on this hearing, and hold the Dallas ban: down to the record, then, gentlemen, there is (lothin7 for us to answer. find out what's in their mind. were filed with you. .0 cannot e have not the letters; they have not the data. _e wrote a let- stateter up here and said, Thy, this petition is replete with e understood from ments and data that we have nerer seen. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis your rules that this case was to be tried upon the record made before the Organization Committee. letter came back and said, You understand the rules correctly. nd the testimony will be found, giving the address where I could got it, and at the same time the secretary was instructed to send out a record, copy of ±iichwis filed, from which we were to answer this petition. Now, when you come up here -- we are answerinp; a set of feets that the Organization Com.:ittee had. of facts. e never saw their sot .e never had an opportunity. :0 did not know the T3oard wanted us to go over there and 7;:et letters and statements. I have lived right on the border in southwestern Oklahoma myself for several years. I think, gentlemen, that as to the question of teat portion lyine: next to Texas,--all these banks may have done blisiness in Kansas City, and yet the fact remains that those people do busi- http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 43 mess in Texas. Now, in this record, taken from the Organization Committee's record, it shows that the Dallas merchunts have accounts of some me: %Wird 28,000 accounts -- in Oklahoma. 11 the tate of 0'z-1811o:ea. Of course that Jow the gentleman yesterday said tnero are not that many merchants over there. does not take a merchant to have an account. Well, it Gin manufacturers, or any other business men may have the accounts; and that testimony -- that's the testimony that we were asked to prepare our reply upon. Bow if the Board is not going to consider that, if this Board is going to s&y,-All right, the llw says "review," and "review" means to look over whet somebody else has done, yet we say that in addition to "review," we will take some letters that you have neyer seen, a:id we will try this ease, we will try your rights Upon a statement of fret that you never saw, that you had no opportunity of seeing, end wleireh our own rules do not say that you shall try it upon! I feel, gentlemen, -- but of coarse I personally have no interest in this matter -- I feel that this law is absolutely on trial. hile there wa.6 some prophesying done yesterday, and while 3enetor Owen believes that it will be probably all right to cut .these lines asunder, and to begin thus early, before your bank's in operation, before the officers of the bank really have an opportunity of getting accuainted with to member banks,--thet to do that, now, to absolutely disrupt these districts at this time, would be the most serious blow this law 44. could receive from any source, and that the law is useless, and that its purpose would be defeated by its own friends. Now I recognize that the Oklahoma bankers feel that the case is weak, desperate, else they would not have asked Senator Owen to leave his duties in the Senate and come down here in an effort to save a weakening case. They have had more talent on the firing line and in reserve than I had expected to see, but, gentlemen, be that as it may, the facts can not be changed, anl that is, that every part of this territory tributary to Texas raises the same products, is the same character of territory as Texas, and that if you will let six months pass, every • bank, or the majority of the banks, as they are doing now, getting over in line, will say to you, just as this man said from ,--I wanted to go to Kansas City, but v.e rushed into vomething different; we knew something about it, and just a little time will work all these things out, whereas to disrapt these districts now will mean a continuous disruption of all the districts in the United States. I thank you gentlemen for listening to me so courteously, and for giving me the opportunity of speaking to you. • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis M. Harrison: Regarding new matter, an examination of the Dallas brief and our brief will show that all the new matter which is pertinent to this case is already answered in the Dallas brief, and the references in our brief to additional letters and testimony, etc., has not been even mentioned at this hearing in any way except by counsel for the Dallas bank. In 45 other words, it has not been put into force here at all. Our statements at this ile_rinF: have all been based on matters which are amply and fully set forth in this petition, without any reference to the additional metter to which he objects, and it is perfectly satisfactory with the members of our delegation that all that matter that the Board does not vAsh to consider it, shall be excluded entirely. new matter. That is, what he calls Take the facts set forth in our petition fully, and consider those facts, and never mind the other letters which he says he has not been able -o see, and which are referred to in a general way. • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis If we had published them all here, we would have a record larger than that banking encyclopaedia on the table. r:.e do not feel it WDS necessary •to do so. Regarding these letters of :Tr. Carter, my attention was called to them just while he was speaking, because an examination )-±' some of these letters will show, I think, all but one of the banks from the five counties which we have excluded, that replied to Lir. Carter 's letter, contained here,--Ur. Carter has a copy of hiu letter to the banks, and their replies, and the replies from all but one or two that gave any reply, from these five counties, prefer to go to Kansas City. The Governor or the Board.: Did they ever send writen let- ters? lir. Harrison: Yes, I will explain that. These were written before the district was organized, cnd I,Tr. McKinney was elected a director, and one of these letters which respondent has named --from the same bank named there as protesting against the 46 change, has one of the strongest letters here, stating that all their business goes to Kansas City. from I I refer to the letters and other towns from County. V;ell, it will take too long to go into them, but it is of interest along this line. Take before the peculiar condition arose of Mr. McKinney being elected a director of the bank, and these bankers expressed themselves that their business went in to Kansas City, °von/those five counties that have been excluded. As to the financing of the cotton crop, it was said five millions was paid for by the Dallas banks. Mr. Huff: • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Eight million. Mr. Harrison: Eight million dollars; well, the fact is the money comes from the east. Take Anderson E.: Company; every draft they draw is on Philadelphia; they never pay on local banks. It is to be had through the banks, but is not Texas money. The cotton goes through the Gulf to the ports, and is consumed by the mills. not Texas money at all. It is paid for by north and east always, I believe that is all. The Governor of the Board: We will take this under advise- ment. Mr. Harding: review. I want to ask a question upon the matter of If we are going to review evidence, and are not review- ing fcts in this case, then there must be some evidence on the questiup of this boundary line. Now, is there not evidence on that, or has there not been? Lir. Huff: Yes, sir; at the Kansas City hearing they .took 47. testimony as to the trend of business. 'hen they got down to our territory, they took testimony again on the trend of busin- • Oklahoma business men testified -- Mr. Lott, who is here, ness. testified for Zansas City as to the trend of business, and said cotton was financed probably mostly in the east, -- New York and Boston for the present, and at that hearing the Oklahoma side had its inning, and the testimony as found in the record was taken. Harding: But 1 can not find, -- it has been some time nOw since I looked over it -- that at that time it was in contemplation to establish the boundary line such as was determined on. • If there was not any such boundary line in contemplation, was there not evidence on such a boundary line? Mr. Huff: ,e11, of course, at that time there was no notice given as to where the lines wore to be. :A eac;1 one of th,ee hearings, and especially at the lansas City hearing, Ur. McAdoo asked witnesses from Oklahoma the following question. "?here do you prefer to be?" St. Louis." He say, And they said,"Kansas City or Then he asked, "How would you like to go to Den- ver?" One said, "I had not thought Denver would got a bank. Denver would be all right as one of the second or third choices, • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis but the first choice was St. Louis." 1,:r. F:obinson here, when he was asked his first choice, said it was St. Louis; his second choice was Kansas City, and his third choice was Houston. So that that you will find all over/record, when references were made by witnesses as to which way they wanted to go. Mr. Harding: That was on the supposition that the '-tate of 48 Okl:lhoma was going into one district or another district, was Lr. Huff: Igo, sir; I do not find wlything said as to if .jou make the line f,t Ctinton River, v,hcre will you tht. decide to go? There is nothinp: like that in the record tht I can find. Mr. hcrding: I did not me, n a line like tLht, nut was there any argument Or any evidence on a proosition to divide the State? r. Huff: I do not think there was; I did not find it. Mr. Harding: • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis for un :ell, then, of c„Iurso there is not anything to review on tilt rjimstion, is there, in the evidence submitted? :Ir. Huff: ,ell, you have got to take the stlme testimony that the./ took, arid see Oiether or not, with that testimony before you, you would make the E-ne division of the line th.,t they made. Harding: IsTr. fluff: That is your point. 1 tdiank you. You, sir. The Governor of the Board: will take this under tldvisc- ment and let you know when a decision is reached? 1.91:ro Harrison: I thank the Bo;_lrd very much for this hearing. (V,horeupon, the hearing was adpurned sine die at 4:05 o'clock, p. m.) 1r 1,1,2(• 38 ARGUMENT IN REBUTTAL BY MR. CHARLES C. HUFF, COUN.. SEL FOR RESPONDENT. • Gentlemen of the Board: I desire to be heard on just the two questions asked the Senator, As to the question of review, the Senator said that means that this is a trial de novo. Well, I think that's the first time it ever occurred to anybody it was, because the Board came to make its rules - regulations for the appeal specifically provide you shall refer to the testimony talc.we have tried -en before the Organization Committee. .Now scrupulously tried -- to try this case on that testimony, to present the matter on a review. • That's what it means;-- a trial de novo is no review, but a new trial. And while Oklahoma has seen fit to go out and get letters and statistics, when it came to answering this brief, we looked at your regulations which said that you shall refer to the testimony on the record taken before the Organization Committee, and refer to it by page, and on that we have scrupulously tried to act. :Now we would be at an entire disadvantage if they can come in here with other statistics taken here and there over the State of Oklahoma. no opportunity to see them. We had We had no reason to believe that that testimony would be considered, and then to be presented with the question that this review means to try this case over anew, without one side having any opportunity at all of presenting testimony, is a surprise and not entirely just and fair. Now, the Senator, I am quite sure, meant to give you his best information about the cotton export and moving of the crop not http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 39 being financed in the South, buthis mistake in that matter, think tis purely because he had not looked into the question. in this record taken before by I Now the Organization Committee, there was a statement on page 123 showing the cotton area of the South, and the cotton area in Oklahoma. Now it said: "'Dallas cotton buyers have salaried men covering all sections of Texas, Oklahoma, /aikansas and Louisiana, and. paid out for cotton last year approximately 02,000,000, and approximately 80,000,000 tot this cotton was financed directly or indirectly by the Dallas banks." P.23 Brf. Now that's a record before the Organization Committee. That re- futes the gentleman's statement that it was financed in the east. • Now that's the only testimony that we thought that the Board would consider. mony. I should have gotten up additional testi- Just look, gentlemen, just for a few moments, at what a short change has made in these banks. Now it appears in the brief of Oklahoma bankers, and it appears from statements made by Senator Owen, and these other gentlemen, that three hundred someodd banks signed protests, yet this bank has not been in opera.tion but three months, and they were forced to exclude five counties because twenty-eight of those banks had already gone on record as wanting to stay in Dallas. • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis They have also,a gentleman informed me today, written a letter to this Board, saying they wanted you to exclude from this petition any names from Johnson County, saying just as Mr. said in his letter, that they rushed into something before they knew anything about it, and that we should work this thing out. Now, Senator Owen made a very pretty and logical argument. 40 But you follow that argument to its conclusion, and you have not but one bank, gentlemen. • If, because Oklahoma banks had done business in Kansas City, you are going to cut off this portion of Oklahoma, and send to Kansas City, then what will say to New Mexico? What will you say to Arkansas? you say to Louisiana? you That will What will you say to Mississippi? who have done no business in Georgia? It was a practical impossibility for nrybody so to arrange these districts as that they would necessarily follow the lines • of bank accounts. iness. • Now bqnk accounts do not mean trend of bus- These gentlemen can go and do business in Kansas City. They have open market facilities there, if they want them. Yet at the same time it would be a distinct advantage to them to have another facility to their South, where their products are sold, and where all their products are shipped. Now, in one letter in this brief -- and there are only two additional statements of fact, gentlemen, in this entire brief of the Dallas bank. It is based entirely on the record made before the Organization Committee. In two instances, because these gentleman had tried to make it appear in their petition that the commerce flows north from Oklahoma,--.I got a letter from a cotton broker, and a member of the New Orleans Exchange, in which he thought ninety per cent of the cotton raised in southern Oklahoma was shipped into Texas, and most of it was financed that way. I got another letter from Er. Hill, who is one of the biggest grain dealers in the Southwest, stating that about ninety per cent of the surplus of all the grain products raised in south http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 41 ern Oklahoma were either sold in .2exas or Louisiana. That's where they were sold, or that they were shipped out through the Gulf points. Now, another thing: If, gentlemen, the trend of commerce were to the Gulf, as these gentlemen state it is, on account of the favorable rate in that connection, then the trend of imports necessarily is through the same way. it comes to Galveston, New Orleans, from the Gulf, and not the railroads into Oklahoma,— the heavy freight--and that's apparent even from their own brief that the imports taking water rates come right in through the State of Texas -- all of it that comes in this territory. Of course there is a great deal of force, if you do not stop to consider, in the gentleman's argument that the banks -what the banks say ought to control, but if that's true, gentlemen, if what the banks say is going to control, then you have not a district in this United States that will stay hitched. By the same process you will detach Arizona and New Mexico from this Texas district; you will take Louisiana and Mississippi from your Geturgia district, and so on all through the line, until when you get through trying to follow the whims of the banks, you will not have any districts. Now, I differ from Senator Owen as to what the word "review" means. It is nothing but a bill of review. the statute. You can not put a new construction on it now, be- Its found in cause that would suit somebody that wants it that way; but that word "review" means just what it says, that you have got to take this record which is already made, and you have got to put 42 the test of reason to it, and see whether these districts shall • stand, or whether the error of the Organization Committee was • such a gross one as that you would feel warranted on that account to set aside that opinion of the Organization Committee. And unless you do that, if you are going to try Oklahoma's case on new testimony, presented for the first time on this hearing, and hold the Dallas bank down to the record, then, gentlemen, there is nothing for us to answer. find out what's in their mind. were filed with you. We cannot We have not the letters, they We have not the data. We wrote a let- ter up here and said, Why, this petition is replete with statements and data that we have nerer seen. We understood from your rules that this case was to be tried upon the record made before the Organization Committee. A letter came back and said, You understand the rules correctly. And the testimony will be found, giving the address where I could get it, and at the same time the secretary was instructed to send out a record, copy of whichmas filed, from which we were to answer this petition. Now, when you come up here -- we are answering a set of facts that the Organization Committee had. of facts. • • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis We never saw their set We never had an opportunity. We did not know the Board wanted us to go over there and get letters and statements. I have lived right on the border in southwestern Oklahoma myself for several years. I think, gentlemen, that as to the question of that portion lying next to Texas,--all these banks may have done btsiness in Kansas City, and yet the fact remains that those people do busi- 43 • mess in Texas. S Now, in this record, taken from the Organization Commit- • tee's record, it shows that the Dallas merChants have accounts of some -- 28,000 accounts -- in Oklahoma. means all the State of Oklahoma. Of course that Now the gentleman yesterday said there are not that many merchants over there. does not take a merchant to have an account. Well, it Gin manufacturers, or any other business men may have the accounts; and that testimony -- that's the testimony that we were asked to prepare our reply upon. Now if the Board is not going to consider that, if this Board is going to say,-All right, the law says "review," and "review" means to look over what somebody else has done, yet we say that in addition to "review," we will take some letters that you have never seen, and we will try this case, we will try your rights upon a statement of fact that you never saw, that you had no opportunity of seeing, and which our awn rules do not say that you shall try it upon: I feel, gentlemen, -- but of course I personally have no interest in this matter -- I feel that this law is absolutely • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis on trial. While there was some prophesying done yesterday, and while Senator Owen believes that it will be probably all right to cut these lines asunder, and to begin thus early, before your bank's in operation, before the officers of the bank really have an opportunity of getting acquainted with the member banks,--that to do that, now, to absolutely disrupt these districts at this time, would be the most serious blow this law. 44. • could receive from any source, and that the law is useless, and that its purpose would be defeated by its own friends. Now I recognize that the Oklahoma bankers feel that the case is weak, desperate, else they would not have asked Senator Owen to leave his duties in the Senate and come down here in an effort to save a weakening casei. They have had more talent on the firing line and in reserve than I had expected to see, but, gentlemen, be that as it may, the facts can not be changed, and that is, that every part of this territory tributary to Texas raises the same products, is the same character of territory as Texas, and that if you will let six months pass, every bank, or the majority of the banks, as they are doing now, getting over in line, will say to you, just as this man said from ,--I wanted to so to Kansas City, but we rushed into something different; we knew something about it, and just a little time will work all these things out, whereas to disrupt these districts now will mean a continuous disruption of all the districts in the United States. I thank you gentlemen for listening to me so courteously, and for giving me the opportunity of speaking to you. • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Mr. Harrison: Regarding new matter, an examination of the Dallas brief and our brief will show that all the new matter which Is pertinent to this case is already answered in the Dal-, las brief, and the references in our brief to additional letters and testimony, etc., has not been even mentioned at this hearing in any way except by counsel for the Dallas bank. In 45 other words, it has not been put into force here at all. Our statements at this hearing have all been based on mat- • ters which are amply and fully set forth in this petition, without any reference to the additional matter to which he objects, and it is perfectly satisfactory with the members of our delegation that all that matter that the Board does not wish to consider it, shall be excluded entirely. new matter. That is, what he calls Take the facts set forth in our petition fully, and consider those facts, and never mind the other letters which he says he has not been able to see, and which are referred to in a general way. • If we had published them all here, we would have a record larger than that banking encyclopaedia on the table. We do not feel it was necessary to do so. Regarding these letters of Mr. Carter, my attention was called to them just while he was speaking, because an examination of some of these letters will show, I think, all but one of the banks from the five counties which we have excluded, that replied to Mr. Carter's letter, contained here,--Mr. Carter has a copy of his letter to the banks, and their replies, and the replies from all but one or two that gave any reply, from those five counties, prefer to go to Kansas City. • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis The Governor of the Board: Did they ever send written let- ters? Mr. Harrison: Yes, I will explain that. These were written before the district was organized, and Mr. McKinney was elected a director, and one of these letters which respondent has named --from the same bank named there as protesting against the 46 • change, has one of the strongest letters here, stating that all their business goes to Kansas City. from I I refer to the letters and other towns from County. Well, it will take too long to go into them, but it is of interest along this line. Take before the peculiar condition arose of Mr. McKinney being elected a director of the bank, and these bankers expressed themselves that their business went In to Kansas City, even/those five counties that have been excluded. As to the financing of the cotton crop, it was said five millions was paid for by the Dallas banks. Mr. Huff: • Eight million. Mr. Harrison: Eight million dollars; well, the fact is the money comes from the east. Take Anderson & Company; every draft they draw is on Philadelphia; they never pay on local banks. It Is to be had through the banks, but is not Texas money. The cotton goes through the Gulf to the ports, and is consumed by the mills. not Texas money at all. It is paid for by north and east always, I believe that is all. The Governor of the Board: We will take this under advise- ment. • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Mr. Harding: review. I want to ask a question upon the matter of If we are going to review evidence, and are not review- ing facts in this case, then there must be some evidence on the question of this boundary line. Now, is there not evidence on that, or has there not been? Mr. Huff: Yes, sir; at the Kansas City hearing they took 47. testimony as to the trend of business. When they got down to our territory, they took testimony again on the trend of businness. Oklahoma business men testified -- Mr. Mott, who is here, testified for _Kansas city as to the trend of business, and said cotton was financed probably mostly in the east, -- jew York and boston for the present, and at that hearing the Oklahoma side had its inning, and the testimony as found in the record was taken. Mr. Harding: But I can not find, -- it has been some time now since I looked over it -- that at that time it was in contemplation to establish the boundary line such as was determined on. ID http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis If there was not any such boundary line in contemplation, was there not evidence on such a boundary line': Lir. Huff: iell, of course, at tnat time there was no notice given as to where the lines were zo be. At each one of these hearings, and especially at the iansa s City hearing, Mr. i:clidoo aAred wimesses from Oklahoma the following question. He says, "Where do you prefer to be?" And they said,"ansas uity or St. Louis." Then he asked, "How would you like to go to _Lienver?" One said, "I had not thought _Denver would get a bank. Denver would be all right as one of the second or third choices, but the first choice was St. Louis." Mr. 1;:obinson here, wheli he was asked his first choice, said it was $t. Louis; his second choice was Kansas uity, ana his third choice was Houston. So that that you will find all over/recor d, when references were made by witnesses as to which way they wanted to go. Mr. Harding: That was on the supposiuion that the State of 48 Oklahoma was going into one district or another district, was it? t Mr. Huff: No, sir; I do not find anything said as to If you make the line at Canton River, where will you thr.Lt. decide to go? There is nothing like that in the record that I can find. Mr. Harding: I did not mean a line like that, out was there any argument or any evidence on a proposition to divide the State? Mr. Huff: I do not think there was; I did not find it. Mr. Harding: • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Well, then, of course there is not anything for us to review on that question, is there, in the evidence submitted? Mr. Huff: Well, you have got to take the same testimony that they took, and see whether or not, with that testimony before you, you would make the same division of the line that they made. Mr. Harding: Mr. Huff: That is your point. I thank you. Yes, sir. The Governor of the Board: We will take this under advise- ment and let you know when a decision is reached? Mr. Harrison: I thank the Board very much for this hearing. (Whereupon, the hearing was adjourned sine die at 4:05 o'clock, p. m.) http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis -11 ARGUYEYT OF MR. CHARLES C. 7UFF, COU3.7EL FOR RESPONDENT, TITE FEDERAL RESERVE BANK, CF DALLAS, TEXAS. Gentlemen of the Board: I feel rather alone in this contoday, greation,( with the great nuTriber of sixteen inch guns beinp: trained upon me. T feel like as if T. could not say, in the words of the Kaiser, that I had the right and God Almighty with me, I would probably go down in defeat today; but gentlemen, this law is on trial; this is no bankers' law, yet you stand up here and say what the banks want! If this law had been passed at the instance of the banks, but it was passed over the protests of the banks. You do not know the discussion that took place when this law was first proposed. The hankers were against the law; the bankers did not want this law. A healthy public opinion whipped this law onto the statute book. When the banks found out the law was poingr to be passed, then they cal.e in for the first ti-te and asked to be Der.flitted to make suggestions, and they did perfect this law, and made it, in my opinion, one of the greatest pieces of legislation ever placed on the statute books. But this law was not passed, may it please the Board, at the instance of the banks alone; but it was passed to correct some evils that had grown up at the hands of the banks themselves; it was passed in order to c-ive stability to the financial system of this country; it IvaE• Passed in order to keep the reserve centers in the east from corralling all http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis -2- the money and the time of short crops and depreciation. The gentleman says that my argument in the brief is largely technical. training. well, now, of course that is a good deal in You have, as members of this Eoard, made some rules which you have said were going to be followed in appeals of this kind. Cne of the rules vras that a petition must be sipm- ed by two-thirds of the member banks. promulrr,-.ted on Aur-ust 28, 1914. Now those rules 7ere 7-3r objection was,--and it's 1c),Jt it goes to the very foundation of t'-)is proceedinc-, if the rules have Teen made,--my objection was that this oetition was not founded upon a petition repored in accordance with. these rules, but showing that after the Crganizaticn Corn mittee l 6 renort of Vtle lines were made public, that banks, at the instance of -r. TTarrison, sent in protest slips. Now, let's see if that is not correct, as found by - r. -arrison's own letters, away back in A_pril: Now, the first one is this: "THE CKIAHCIPA RANKERS ASSCCIATICN. Cffice of the Secretary, Cklahoma 11111 http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis "TC C. B. I. April 7, 1914. -1,11'F-.9ERS 17- DALLAS DISTRICT. Gentlemen: Without presuming in the least to dictate in the matter of the regional reserve bank districts, we feel that another letter at this time will he welcomed by you, in view of the many urgent letters and telegrams we have received." No is on April 7, 1914. (Continues reading:) "The writer has much information which it is impossible to convey in a letter, but the main point is: After communicating with Senators Cwen and Gore, all Cklahomals Congressmen, and after consulting with bankers in Kansas City personally and canvassing the situation as thoroughly as time has permitted, we are convinced that there is a reasonable chance, by proper activity, to get Oklahoma placed in one regional district. "As for a branch bank, the administration forces are inclined to adopt the policy of placing branches only where there are not overnight facilities for handling business. Under that policy, and the Districts as now framed, every city in Oklahoma is barred from obtaining a branch. "Cur information is, that 95; of the Oklahoma banks that have been placed in the Dallas District are very much opposed to this arrangement. We ask that any bank that is contented to remain in that District, please write us at once. All others should fill out the enclosed form AND RETURN TO TiE VRITEP (Do. not Tail it to Washington. This is VERY IKPORTA7T AlqD SHOULD ErAvE YOUR INMEDIATE ATTEN4.• TION. P.73. Erf. "Further suggestions will follow developments. Very truly yours, (Signed) W. B. HARRISON, Secretary C. B. A." Now, that's the first letter. That was before these rules were promulgated. Here is the second letter, just a week later: "THE CKLAHTAA BANKERS ASSOCIATION. Office of the Secretary. CkiFlhomn City, Ckla., April 13, 1914. "TO TFE BANK ADDRESSED: P. 74. Erf. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis "/e have not as yet received from you one of the signed slips like the,enclosed which we mailed you a week ago and asked to be returned immediately. This is exceedingly important, and we can not put too much stress on the necessity of hearing from every Cklahoma bank in the Dallas District at once definitely. If you want to be in the Dallas District, please state that plainly. If you do not, sign this slip today, and mail to us, unless you already have one in the mail. • "We admit that there is only a fighting chance to pet the District changed, but we have good reason to believe it can be done. Today we have received from Washington a signed statement by a high government official, whose support means as much to us as that of any other man, saying he things this cllpnge can be made if the banl-F will all sign the protest. "It is very important to not only send this in, but to wire your Congressman and Senators, unless you have already done so. Let them hear from you direct in protest against the lines as at present formed, if you feel that tt way about it (The letter was signed by W. C. E. P, 4) Harrison, Secretary, Now, the point I make is this, that these protest slips were not made and not filed in response to this procedure, but were made and filed immediately after the announceent of these lines. I do not know whatthe•procedure was at that time. can not understand it. I They were urged to "see your Congress- man and to wire your Senator." I suppose at thEt time the Board had made no regulations with reference to the matter, and yet certainly those slips which were sent in to be directed to delegation in Conc-ress and Senators were not made as a prote:=t to km base a petition on hereafter, because that was two, three, four months before the rules were promulgated, upon which this petition could only stand. Yow, my position is that under this procedure laid down by you, that this rPtition has never been followed in accordance with. your rules. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Now, another position I take with reference to this mat- lit ter is that, under the statute, under the law creating these banks aid this --ioard, this matter could only come before the • Board called as a review, -- a peeition for review. course they may say I am technical. Now, of Yet; the well recognized rein , of law is that where you are simply reviewing the action of some other tribunal, that you can not change it, except on an error of law, or where the finding upon the facts was so erroneous as to result in a miscarriage of justice and fraud. Now, it says that" the determination of said Crganization Committee shall not he subject to review except by the Federal F.eserve Board when organized . • no other tribunal could review it, and they could only review it as a question of review c rather the finding of the 7oard -- Organization Committee, upon the testimony taken on the hearing. row, een- tlemen, I will submit to eou thee in this entire brief filed by the gentleman frorn Cklahona, there is not one reference to one line of testimony taken upon the hearing before the Organization Committee. The Organization Committee did not send any boys out to transact this business. The Secretary of the Treasury, the Secretary of Agriculture, and the Comptro ller of the Currency went themselves in person to every district in • this United States. They saw the people; they came face to face with them; they got their opinions; they had the hearings; they saw the conditions upon the ground; and after seeing those conditions they made these findings, created these districts as they are now, and under the law, -- while it may be technic- http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis al, yet under this very law this Board, as a legal proposition, has no ri7'-t to upset t"'e finding of that committee unless there be an error in law or unless the finding of the committee is so erroneous as to amount to a fraud upon the district as formed. 1 do not believe any gentleman following me will covItrovert that well-known proposition of law. Now tey Fay "You are technical." permitted it, you invited it. Well, now, if I a71I, you• "At all hearings hereunder, all questions of fact, including jurisdictional and powers of the 7ederal Reserve Board, may be argued." Now that may be technic- c entle-en, when you come to consider it, you al, but, , are an appellate court, you sifLply have to take the testimony as introduced on the hearinr,s. Ckln;- oma, about All of these letters from banks in conditions of business,--all of those let- ters amount to nothing if you are r-oing to try this case according to your own rules. That whole brief, When you consid- er it, has to go out, because none of it is founded upon tkie a !single syllable of testiMony taken at these hearings. It is not a trial de rovo . 1 but it is an apl)eal, it is for the purpose of determining whether or not the first those three gentle- men who went into every part of t!lis country, and who saw and heard every word of testiiriony, who made maps, who got the opinion of the people on the [-round for the purpose cf seeing whether those gentlemen made such a serious error of fact as to warrant you in saying that this finding of fact they made as to these districts was so very erroneous that we will have to over- http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis H-f turn it, because it amounts to a question or a matter almost of fraud upon the dAstrict as formed. • Now, gentlemen, another thing: When these protests wore first filed, it was said that they were being filed because the State of Oklahoma was being divided. Now listen here: This is what Mr. Harrison himself says: (From letter written by W. B. Harrison to C. B. A. Mem- 2. 73 Brf. bers in Dallas District, dated Oklahoma City, April 7, 1914:) I u*** we are convinced that there is a reasonable chance, by proper activity, to get Oklahoma placed in one regional district. ** IT Now, the point I mai:e is this, that when they sere out these • protests from Harrison's of iee in Oklahoma City, to be signed by these banks, the point they had in mind then was that all of Oklahoma was to be transferred to Kansas City. see why that was not done. Now let's There are thirty banks in the five counties that they have excluded from this petition. On file with this brief, and on file are letters from twenty-six of those banks saying that they want to be in the Dallas district. Since that time there have been letters sent in from a bank in Hugo to the Federal Reserve Board, a copy of it being sent to Dallas; another letter addressed from the First National Barlr • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis at Durant, making twenty-eight of those banks in those five counties that said they did not want to be in Kansas City, but they were aware they wanted to be. Now, is it not absolutely as apparent as the nose on your face that when these gentlemen got to feeling around down there for the purpose of getting up a petition, they ran across five counties that they could not Hg jar, and they said "We will exclude you gentlemen, and we will • divide the State of Oklahoma ourselves in another way than the division of the Organization Committee." Now, they say to you, the very first try out of the box, "We want to get all of Oklahoma into one district"; yet, gentlemen, when they went up against the five counties down there where there were twentyeight banks, they said, °Oh, no; we don't want to go to Kansas •••• City; you can not transfer us across Kansas into Missouri. want to stay in Dallas." We Then they did some dividing themselves. They made another division of the State of Oklahoma, and they pay a very nice complii,ent to Yr. YcKinney in their brief, because they say "He is up there, end we don't want to transfer hiu or this territory away and therefore cause him to lose his job." Well, the law takes care of him. There was no reason for doing that, but the point I make is this, that on file with this Board are twenty-eight letters from those counties which absolutely say they do not want to go to Kansas City, and they are not going to Kansas City, if they can help it. Now, gentlemen, if you had included those thirty banks and tried to get a petition, that gentleman knows, they all know, that • you could never have,by any kind of figuring, scared up your twothirds. Now, let's see: He says a list of these banks was re- ceived ; I got it from the books in the Federal Reserve Bank in Dallas; but there are 166 banks. Bow, three-fourths of them ad- mittedly, by their own petition, never did file any protest. Thirty of them are excluded, making 66; 23 wrote letters either say- http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis H-h tng that they did not want to be transferred or that they felt that no action Should be taken.now, which would make 86 out of • the 166,which would show that one-half of the banks down there really were not behind this movement. Now, he says, gentlemen, that some of those banks have since written other letters. then last, since we did. to use them. of faith. Well, all I can say is they saw These letters, he says we ought not I do not know. I do not think there is any breach Mr. Wells wrote them, and said he was interested in knowing the feelings of these men, and the letters were in reply to those letters of inquiry. • Now, he takes up Mr. Itinad4xlext1t4 Wood's letter,--Yr. Wood, of Altus. Here is what Mr. Wood said just on December 24th. He says,-(Letter signed by J. T. Wood, President of the City National Bank, Altus, Oklahoma.) "Regarding proposed change of Southern Oklahoma banks Into Kansas City District: "I deem it unwise at this time to make any change; in fact, we are very well pleased with Dallas. Should a majority of Southern Oklahoma bankers favor Kansas City, the change could be effected at some future time. * * * " That is what he said just on December 24th/ • Here is what this man from Apache says,--and right here I will say I have seen another letter from him, and he does not want to be in any district; he does not want any reserve bank. He says in the last letter I saw from him that he did not want to be a member of any reserve bank any ;lace. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Now, let's see whe:4 he says: H-i (Letter addressed to Mr. Oscar Wells, Houston, Texas, signed by Mr. W. T. Clark, President of the First National Bank, Apache, Oklahoma, dated August 31, 1914.) F.61 Brf. "I have your letter of the 29th instant, relative to the matter of making any changes in the present boundary lines of the Dallas Regional Bank. "I would be very glad indeed to favor you personally in any way that I could, but we feel in Oklahoma that our State should not be divided, ***." Now that's the way the Organization Committee divided it, but they contend it should not be divided that way, but that it is all right to let Harrison divide it. It is all right for Har- rison to make the division if he wants to, but the Organ ization Committee, that made it their duty according to the terms of this law to pass on it, can not divide it; but let Harri son divide it for us! (Continues reading from above letter:) "I would be very glad indeed to favor you personally in any way that T could, but we feel in Oklahoma that our State should_ not be divided, and since we have, most of us, dealt principally with Kansas City, we naturally look that way for our banking conne ction I like Texas and her people, but I would_ have to get s. acquainted down there. P. 61 Brf. (Laughter.) -- (Continues reading:) Naturally, we are in close touch with Oklahoma City bankers, and they are very anxious to get the lines changed. I have not heard lately of any action being taken in the matter. "In our dealings with a Regional or I do not see that it can make very much Reserve Bank, whether the Bank is located in Dallas or difference Kansas City; however, as stated above, our business relations with Texas points have been very limited. * * *" Now that, gentlemen, is a letter that he wrote on August 21st, in response to Mr. Wells' letter. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis H-j Now the letter from Mr. Thurmond of December 24th speaks for itself. • Mr. Thurmond. simply says he did not think they ought to have any change. Now, he has since written a letter; when he found out his brother was coming up here, he had to write another letter, being cashier of the bank that his brother is president of, and his urother coming up here to get something done, he could not have a letter like this outstanding. And they say we over-reached them, but I say he over-reached us, because he went and got a later letter; and within a period of thirty days Thurmond has changed his mind and the whole thing, and something has happened within thirty days that makes him think it is all right to go ahead. Now, the gentleman in Holdenville wrote in August, and this is what he said: (Letter from Mr. L. T. Sammons, President of the American National Bank, HolEenville, Oklahoma, dated August 31, 1914, addressed to EX. Oscar Wells, Vice President, First rational Bank, Houston, Texas.) p, 67 Brf. • "In reply to your letter of August 29th, will say that, as far as I am concerned now, I had just as soon be In the Dallas Distrjet as in the Kansas City District, for the reason that I think the Dallas District will understand this cotton condition better than any other. I think the Dallas District will fully realize what we are up against in this cotton section, and will understand how to handle the situation better than if we were in a grain or any other territory, Therefore, I am perfectly content to remain in the Dallas District." Now that is from Yr. L. T. Sammons, written to Yr. Wells on August 31st. Here is a gentleman, Mr. Cross, President of the State National Bank of Hollis. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis He says: H-k (Letter from Mr. 7. S. Cross, President of the State National Bank of Hollis, dated Hollis, Oklahoma, January 15, 1915, and addressed to Federal Reserve Board, Washington, D. C.) 410 "In regard to the proposed change --" This letter can not be Nadal subject to any objection because it is not even directed to anybody in Iallas, but is directed here and filed here. I assume therefore this one will pass without any criticism. "In regard to the proposed change in this Reserve District, we prefer to stay in the Dallas District, on account of the distance and connections which the mails make. We are only twelve hours from Dallas and about forty-eight hours from Kansas City." E. 68 Brf. Now, gentlemen, here's a letter I want to call your careful attention to, because it says that this man has, while he started out thinking he ought to be in the Kansas City District, thought the matter over and looked at it and feels he ought to let it alone. He says: (Letter from Yr. Tom Wall, Cashier of the First National Bank, Poteau, Oklahoma, dated January 12, 1915, and addressed to Yr. B. A. McKinney, Federal Reserve Bank, Dallas, Texas.) "In these days of agitation, financial and other. wise, I am becoming convinced that to "Let well enough alone" is a good axiom. P. 70 Brf. • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis "The strenuous (Jffort to zffect a clange in Federal Reserve District No. 11, adding Oklahoma to the Kansas City District, seemed to me to be a proper procedure and for the best interest of all o we Oklahoma bankers who petitioned; and, not to be contrary, I signed the petition for this bank, like a majority. Since the matter will soon be heard by the Federal Reserve Board, I have given the question of changing, more thought than heretof ore -at least more intelligent thought -- for the reason that I now know more about the Federal _ieserve Banks and their functions than heretofore, and I imagine this is true of themost of the bankers. H-1 "Take the individual case of this bank. After summing it all up, I find our mall service to Dallas is a few hours shorter than into Kansas City. The SERVICE of one Federal Reserve Bank appears to be about the same as the other. So far as I know, the discount rates are the same. Items for credit and balances to check against seemingly are just as convenient for us as they would be in Kansas City or St. Louis. A few weeks' operation of the banks has changed my ideas concerning them. "I do not want to be out in the position of goi-g back on the petition I signed along with the other Oklahoma bankers, but thought would drop you a line to say that since finding out more about the modus operandi of rederal Reserve Banks, that it makes do difference to me if the District remains like it is. In fact, I believe I prefer it now, as it is. • • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis "I have flet that the strong effort teing put forth to change the boundary lines would naturally cause you to take a keen interest in the matter from a personal standpoint, and I wanted, in this letter, to express my "honest convictions" that perhaps a lot of us had rushed into something that we really didn't know whether we wanted it or not." That's written on January 12, from the First National Bank of Poteau, Oklahoma. Now, those letters are all in the brief. I will not re- hearse those;in the brief are twenty-six letters from hankers, I have told you about, in the five counties they have excluded. There are twenty-two letters from banks listed as petitiofing 1 creditors, some of which have taken back what they wrote. There are also letters from other banks not listed as petitioning creditors. Now, those letters are all there. I will not take the Board's time to go through into the question of letters, any further. Now, let's consider the question xf -- they say the "vital question" in this case. This Act says these"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 readjust- ed and new districts may from time to time be created by the Federal Reserve Board, not to exceed twelve in all." Now let's see, what does that mean? That does not naturally mean -necessarily have to mean the banking business; it means that the States - that the lines must be so arranged as not to disturb the trade relations, not the banking relations. Now it can not be contended, gentlemen, that practically ninety per cent of http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis the products of southern Oklahoma pass into Texas and Louisiana, say what you want to about it; but it is a cotton, corn and wheat country. It does not go north; it does not go east. H-n Their own brief says that it goes southwest. that is not in the direction of Dallas. • But they said All right; letTs see. It is not in the direction of Dallas, but southwest is in the direction of the Gulf, and that entire commerce passes right down through the State of Texas, and its Gulf port. Now the banking business they say goes to Kansas City. If it does, it takes an unnatural trend and it does not follow its commerce. But there is a reason as to why banking business in Oklahoma kma first went to Kansas City. Under the old law as you gentlemen well know, St. Louis was a reserve city; Kansas City was another. • That condition prevailed for a great number of years prior to the establishment of any reserve cities in the State of Texas. Of course that gave Kansas City and St. Louis a great benefit over the other sections of that country, because they had to keep a part of their deposits in those reserve cities. Therefore, naturally, the business was started to Kansas City and St. Louis by a reason of this local advantage it had on account of being reserve cities, and this condition prevailed for a great number of years prior to the establishment of any reserve cities in the State of Texas; so that when Texas became a State with reserve cities, Kansas City and • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis St. Louis had tim already gotten the trend of the banking business. But now that business did not follow its trend. did not follow the course of business. It The oankers' business went in a different direction from everybody else's business, and yet they come up here and say to you that because, for- sooth, they have carried some balances in Kansas City, they would have you transferma from the very door of the Dallas bank territory across the State of Oklahoma and the State of Kansas into Missouri, because, forsooth, they had carried some accounts in the banks up there, and in hard times they had gotten some concessions there. But, gentlemen, what does the law mean? It means that the course of trade,that is,the course of commerce, must not be disrupted by this division. Is it a hardship to say that titm a man can get paid for his product where it is sold; that a man can ship his cotton, his grain, and his products into Texas and Louisiana down by the Dallas bank to be paid for his products where they are sold is a hardship, and diverts the course of business? It can not be insisted, and they wont at- tempt to tell you; they wont attempt to tell you that the cotton, the grain, the corn, the surplus raised in southern Oklahoma, does not pass into Texas and into Louisiana, and out through the Gulf port. They will not contend it, but they gritt lay their case wholly upon the Question that the bankers, the chosen class, must be favored to the disadvantage Of everybody else: Now, let's see the result. tion less than three months. 1914. These banks have been in opera- They were open on November 16, Next week they will be in operation three months. No man on earth can tell at this good day whether the conditions that km they paint so horribly will come to pass or not, no man can foresee. It is highly speculative. now, however, would be a leap in the dark. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis To take any action Why the banks have H-p not even reached half of their efficiency. all paid in. • Their capital is not It will take those banks three years to reach the height of their efficiency, yet in less than three months after the opening of these banks these gentlemen ask you to tear these lines asunder! Listen to them prophesy evil, as they ask you simply to tear these lines to pieces and create some more! Now, gentlemen, of course you have the physical power to do it. and write an order to do it. You can sit down But where would that lead to? Sup- pose you were to say, "All right, Mr. Banker from South Oklahoma, although these banks have not gotten well started, although the Board has not even promulgated all the rules with reference O to them, although we have not even fixed it so the State banks could come in, and these banks are still in their infancy, yet, at your behest, at your request, and because, forsooth, if you put all the State of Oklahoma in one district, probably Oklahoma City would get a branch bank, we will cut these lines asunder, and we will put you in the Kansas City district." Well, now, gentlemen, I say you can do it, but where would it lead to? The very instant that thing was done, every dissatisfied community in the United States would be sending by wire petitions to get transferred. Oklahoma is not the only place in the world , that feels that probably they ought to have been in some other district, or that they ought to have been in the center of some aswithin trict. The practical result of overturning,ftrizzaxtixamqxim less than three months, the judgment of the Organization Committee, http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis H-q would simply lead to an absolute disruption of these banks. Now • why would you do it? They do not say the Why would you do it? Dallas Dank is not taking care of the uusiness in Oklahoma. They say that they are prophets, that they can see into the future, and they say "We believe that when they have a big crop, the Dallas or the Texas banks would borrow all the money, and leave the Oklahoma banks without any." Do you see that? were to happen! That's what they see. Now can you see that? Well, now, suppose that This law is framed just so it would cover tict a situation like that like a blanket. It says if one federal re- serve bank has to, it can discount with another its members' • paper, so that if this terrible calamity comes to pass, if the Texas bankers were to go up there to Texas and say, "ft.:re, I want all your money to float our cotton crop," and if they were to get it all in August or September or October, and you came along in November and wanted some money, all in the world you itscxx would have to do would be to take your paper and go to some bank that was not very crowded and did not have all that business, and you would just be swimming like the balance of the bunch! • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Now, gentlemen, I can not foresee that terrible calami- ty that they do. I do not catch it at all. Of course my hind- sight was always better than my foresight, but I do not believe I could see that even with my hind-sight. But it may happen. But it is not going to happen while you and I live. It may hap- pen some time. Now that, gentlemen, is the gist of this petition. H-r Now, let's see; Mr. Harrison is a good letter-writer. just writes lots of letters! 40 He When Harrison has not anything else to do he just sits down and takes a stenographer and writes some letters: Now, I do not MUM mind most of the letters he writes, and have only taken exception tot.his one. ed January 13. This is dat- He says to the bankers in the Dallas district: "At the request of several bankers who are anxious to have our petition granted, I am sending this letter. * * * n He did not say where those banks were situated, either. (Con- tinues reading:) "These bankers inform me that parties interested at Dallas are urgently requesting banks that have signed our petition to withdraw their plea and authorize Dallas representatives to state they wish to remain in that district. We do not know of a single bank that has complied with this request. • T/ Well, since they have come up here, they have found some information; they have learned something, when they got to Washington, or When they got this brief they learned something, that some of them had taken such action, and had not gone back on it either! (Continues reading:) "We do not know of a single bank that this request. We believe the bankers have enough good sense and stamina to either weak-kneed or loose-jointed at has complied with of Southern Oklahoma keep them from being such a time as this. "It is apparent that Dallas is considerably worried by our petition. --- " 40 Well now, they may, but I had not heard it; there is no rumor like that down there. There may be an under-current that is depressed, but there is no stampede on account of your petition. They are still going on, and the bank is open. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis H-s "The truth is, that they were given until January 1st to file an answer, and that on January 8th no answer had been filed, nor do we think any has been filed since. No answer can be filed to our petition which would really be an answer, because it is unanswerable. ---" Well, that's very nice to say about his awn petition, and I am sorry I can not agree with him. He pleads guilty to having written a good one, and I will grant him that honor. (Con- tinues reading:) "We believe Dallas is depending on political support to offset incontrovertible facts, and while it is possible political support may win, we are very willing to leave that matter to the Federal Reserve Board. We have the promise of splendid support ourselves in high political circles, and that promise Is in writing. - -" Well, that is kind of a reflection on the support, that it has to be in writing before they will count on it, but we will pass that. (Continues reading:) "Our hearing will be held February 10th, and Messrs. Craig and Robertson and the writer will probably reach Washington Feb. 9. If any her bankers would like to go with us we would be pleased to know this. If any banks desire to contribute to an expense fund to provide additional representation, they may do so in any amount they see fit, and we will use the funds to the best of our ability. - - - - " I never saw them when they would turn that down. Even Texas bankers will take a little contribution to anything. (Con- tinues reading:) "The most important step is for every banker who is Interested to write a personal letter at once to Senator Gore, Senator Owen and Representative Scott Ferris. It is being represented to these parties very insistently that the petitioning banks wish to withdraw, and such statements should be corrected in a positive manner. Please keep this office supplied with copies of your correspondence on this subject. Very truly yours, (Signed) W. B. Harrison, Secretary." H-t Well, now, I have often wondered why that was. If these gehtlemen had a case in the Supreme Court, they would not be • writing their representatives about it, Mat have they got to do with it? Now, gentlemen, he says in this letter, and this is the thing I want to take issue with him about, that Dallas is dependent on political support. No man holding public office in Dallas has even approached or talked to in this contest. Dallas has never sought to put this bank into politics. No man, no senator, no representative, no man who holds a political office, has ever been approached concerning this contest, • or talked to about this proposition. Mr. Harrison: Mr. Huff: May I explain that point, Mr. Huff? Yes, go ahead. Mr. Harrison: The Dallas papers stated just before that letter was gotten out that Postmaster General Burleson had made a personal visit to Dallas, and was still there, and that they expected to have a friend at court, and that was why the letter was written. Mr. Huff: Well, of course I do not know what the Dallas paper said, but I say to you gentlemen that when this matter • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis was first turned over to me, I said, "Don't any man connected with this bank write any man in office about this petition. This bank can not afford -- this bank simply can not afford to go into politics, and to have any man in politics taking any action with reference to this matter. And, gentlemen, that has been the procedure. Now the thing I am trying to explain is that this letter in stating that we were dependent upon political support is unfounded. We are not depending upon any support except the fact that the right of this contest is with the Dallas bank, and that the Organization Committee's action ought not to be overturned. Now, gentlemen, in making this statement, I want distinctly to state I do not mean to reflect on any one. I know the gentlemen who represent Oklahoma, and some of them are personal friends, and I am quite sure that, while they may have been written to about this matter, that their interest in the matter is simply to present the facts to this Board just like it is being done in this instance, and I do not want to give an impression otherwise. But I simply want to correct the limpres- sion that has gotten around that part of southern Oklahoma that the Dallas bank was trying to rush into politics. Mr. Chairman, do you know what time I am to ftmix run? The Governor of the Board: Mr. Huff (continuing): Twelve o'clock. Now, gentlemen, Mr. Harrison says that on page 54 of my brief I said the Kansas City bank was not competent to take care of the cotton situation. Well, now, I am qlkite sure that he did not mean to put it in that language, because I know that he would not want to mis-quote me, or to put me in an attitude or position before this Board that would not be just correct, but here was what was said: http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis H-v "It is therefore apparent that the Federal Reserve Bank of Dallas, managed as it is and as it necessarily will continue to be, by a Board of Directors who have an intimate knowledge of the cotton industry, can better serve the banks of Southern Oklahoma than the Kansas City Reserve Bank, which is operated by directors and officers who, though thoroughly qualified in a general way and properly disposed toward their memper banks, cannot, of course, understand the needs of a bank in a cotton growing region." the Now, gentlemen, that was mg statement.I made. I do not • say these gentlemen are not competent. petent. But here is the situation. I think they are com- The Dallas bank is neces- sarily officered by men who have had their entire banking experience in a cotton country. the cotton business. • They know the ea and flow of They know that it is necessary to relate the credits to a certain period of the year, and the point I attempted to make was that a bank not officered y men who had had the aotual, practical experience in the cotton country, would feel like probably at times that the credits were going too far, and that they did not understand the cotton situation as a bank= would that was situated and manned or controlled by gentlemen who had put in their lives in banking in the cotton States. And I had not criticized and do not mean to criticize the filkturtmomm bank. • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis I am quite sure that the Kansas City bank Is -- has officers that can thoroughly take care of any business, but at the same time it does not necessarily follow that because they have good officers,that those officers have an intimate acquaintance with the cotton situation to such an extent as that they could render the same kind and character of service as a banker familiar with the cotton situation. H-w Now, gentlemen, there is another thing cropped out in this contest, and I want it distinctly understood that what I am saying now is not in the way of criticism, because I recog- • nize that whatever action has been taken has been prompted by a desire to boost the home town, but you can not escape this thing, this one thing will stand out prominent in this contest, and that is, that Oklahoma City bankers have violated the instruction of 2resident Wilson, and are not neutral. Now, of course, that being true, necessarily it would become material to find out why it was gentlemen situated without this district, who apparently had no interest in the matter, would be unneutral, that they would not let the fight go on without tak- • ing part. Now, I do not say that they were taking part, but their own people say so. Kiowa, Oklahoma. Now, here's a letter written from This man --they do not say this fellow at owa is coerced, or anything of the kind; he says: (Letter from C. W. Crum, Cashier of the First National Bank, Kiowa, Oklahoma, to the Federal Reserve Board, Washington, D. C., under date of August 14, 1914.) "Referring to the effort of Oklahoma City to change that part of Oklahoma that is in Federal Reserve District Eleven, from the Dallas to the Kansas City District, we are pleased with the District as made, and feel that the business of Southern Oklahoma can be best handled through the Dallas District, and desire to protest against this change being made." P.77 Brf. • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis There is another letter from a bank at Tishomingo; another one from a bank at Durant; and I might say that Mr. McKinney, the officer in the Durant bank, was responsible for that letter. Here's one, however, from the First National Bank at H-x Frederick: (Letter written by Mr. J. B. Beard, Jr., Cashier of the First National Bank, Frederick, Oklahoma, to the Federal Reserve Board, Washington, D. C., dated January 8, 1915.) • P. 76 Brf. "It is my opinion that this movement was instigated by Oklahoma City bankers, and is being pushed on account of interests of Oklahoma City parties, and not for the welfare of a majority of bankers in the District. "We are highly pleased with the selection of Dallas as the reserve center of this District, and hope that no change will be made in the present District lines." Now, there are five or six letters in this file to the same tenor, and therefore I say that I am not saying -- I am not making the charge that Oklahoma City bankers have violated the laws of neutrality, but the banks in this district themselves are making that charge. See? Now, of course, with reference to this first letter of Mr. Harrison's, where it says there will not be any bank in Oklahoma unless all of Oklahoma is put in one district, would furnish a very patent reason as to why this condition existed. Now, gentlemen, in concluding, I want to call your attent tion to one or two facts with reference to the proximity of Dallas to this territory. • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis I am going to take a few towns on the main lines of the railroad which run both to Dallas and to Kansas City on the M. K. & T.: farthest town from Dallas. McAlester seems to be the McAlester is 201 miles from Dal- las, and is 316 miles from Kansas City. From McAlester, the time to Dallas by rail is six hours, and the nearest -- clos- H-y eat time to Kansas City is ten hours. rail, • That's by the fastest Going over on the other side, the Rock Island, Purcell is the first town south of the river. Mr. Harrison: That's on the Santa Fe. Mr. Huff (continuing): On the Santa Fe, yes;--Purcellis fter distance to Dallas is 206 miles; Purcell's distance to Kansas City is 435 miles. On the Rock Island, Chickasha would probably be the farthest town north on that railroad, towards Kansas City. Chickasha's distance to Dallas is 211 miles; Chickasha's distance to Kansas City is 415 miles; Chickasha's train service to Dallas is eight hours and thir- • ty minutes by one train, and seven hours by another, and its train service to Kansas City is fifteen hours by one train and twelve hours by the next. Ellp City, where Mr. Thurmond's bank is located, is 304 miles from Dallas, and it is one of the extreme towns, and 472 miles from Kansas City. On the line of railroad running from Elk City towards Dallas will be found the towns of Minnegama, Lewis, Frederick, Grandfield, and several other towns, all of which would be very much closer to Dallas than to Elk City. Going over to McAlester, be- tween McAlester and Dallas, is found Durant, Colbert, and • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis several other important towns that get nearer to Dallas and further away from Kansas City. Over on the Rock Island, Chickasha, between Chickasha and the Texas line, is Ardmore, Marietta, Paula Valley,Grandfield, -Mx. Harrison: Santa Fe. You are mistaken; they are over on the Mr. Huff (continuing): Comanche Yes, I am; Rush Springs, Duncan, Marlow, Ryan, Lawton Marquette, -- all of which would be closer to Dallas by a considerable distance than they would to Kansas City. Purcell is 26C miles from Dallas, and nearer than to Kansas City. Nearer to Pallas alo would be even the towns of Pauls 'Valley, Ardmore, Marietta, and one or two others whose names I do not recall; but the point I want to show you is that you take all of that territory, over all of it, and --indeed, you take the most extreme points,/practically all of them,— are about half the distance to Dallas that the-/ are tc Kansas City. You take the principal railroads that traverse that coun- try, and that run into botl, 7allRs and Kansas City, and those points on those roads, the farthest towns from Dallas are practically about half as far as they are to Kansas City. row, qen- tlemen, they will not dispute that. You take the time cards of the railroads. I have several; they are in my grip; and you will see iL Lakes about half the time to ;-o from the extreme point in this territory from Dallas and to Dallas as it would to Kansas Now, if this territory does not belong properly to Dallas, if this territory, situated within one-half the distance from Dallas as from Kansas City,--the farthest point,--and whose nearest territory is probably one hundred miles, if this territory does not belong in the Eleventh District, then where does it belong? If, in organizing these districts, the Committee , made an error, which you are going to reverse, when they organ- http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis '- a' ized and established these lines; if they made an error in putting this territory right against thb Dallas Rank in the Dallas 110 http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis district, what territories go into it, and how are you going to establish these lines? Now, gentlemen, it is a matter of inpossil-Ality to please bankers. Why, there is not a man on earth, nor any committee of three men -- I do not believe if the Saviour himself would come down here and lay out these lines,--that would satisfy all the bankers. If it was not the Oklahoma City bankers,-and the: are just as good as anyone,--if it was not them, it would be somel)ocr else. kick! It is just the natural A-ierican instinct to (Laughter) Now in Ger'ilany, you could not do that. mir-ht go over there lin Germany, snd. You ou could not get Harrison, even in the bosom of his family, to say but what it was a good thing, and that they did rir-ht; 'but over here, whereever a man feels it is his prerogative to kick at something, that somebody else did, it is no trouble for a bunch of 'hankers to start up trouble like a hornet's nest in any port of the district; and they do it all over the country. I could go down in Louisiana, and , have a contest in a week; get New Crleans or somebody to start a row down there, and there would be a CD ntest. And, gen- tlemen, if you put the starrp of your aporoval on this contest, if you take this territory situated right in the face, almost, of the Dallas bank, and tragsfer it across Kansas into Missouri, then, gentlemen, you have opened the flood gate, and you will never close these lines so long as the law is a law, and tha.; is no lie: H-13' He was speaking this morning about some dire conditions • that he could see in the future, and I assume, therefore, that him you, having heard mm so patiently Frive you the evils that he can see,--that you will permit me also to do a little prophesying and a little soothe-saying; and now, gentlemen, let me tell you, suppose you were to say, "All ric-ht; you all are rood fellows; you have got Food fellows with you,' and you say, "All right, we will just te,r these lines to pieces because you want us to, and we will tear up these districts." In two years there would not be any law. If you do that, if you overrule the Crganization Committee on the finding made upon the testimony, on che facts which exist in this instance, if you should do that, • why you would not even get to go to meals; you would have to sit here all the time and hear contests! There would be such a , rush of hot air you would have to cool off in the eveninrrs: lEverybody wanting to change their districts! Thy, every city, every one of these towns that has not a bank would want one; and I would venture to say,--now, you understand, I am prophesying,--if you do that, in less than six months Harrison would be back up here saying that Oklahoma City ought to have either a bank or a branch bank; and in another eighteen months, he would say, "Let's move the Dallas bank up to Cklalloma City!" men, you can not do it. This law is a practical law. GentleIn the opinion of thinking men, it is the hest piece of legislation put on the statute books in the last fifty years; but it can be brought into disrepute so quickly! http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis And the very people who ask H-c' you to do it would he the people who would bring the act into disrepute. • Now, one word as to the general effect of this law. Every- body knows that when this law is properly interpreted, and these 17,ans are in good running order, that the condiLions, such as e had. in 1907, will fade as a mist before the rising sun. is not possible. It This law was enacted for the purpose of put- ting into these federal reserve banks the mone:r that was ly tributary to the territory in which they were. proper, It is very proper to keep from the eastern States a congestion of the money, and to let the money stay in the territory where the pro' oucts were raised. Experience had taught that the custom that had prevailed in banking systems, and that the custom that had prevailed and had Frown up under usages of the banks' themselves, were not wise, and that in order to give relief to the entire people, some further legislation had to he enacted, and this ; legislation, my friends, was enacted as a result of this well matured public opinion, and this law was framed for the purpcs.a of giving stabilit:r and of equalizino the banking facilities in the entire United States. \Tow you gentle-men are clothed with tlie authority; it is your duty to interpret this lc-cY, and • to say 'hat it does not get into disrepute. It's now backed by a kealthy public opinion; everything is in its favor. But, gentlemen, these contests, if continued, if this digging keeps on, if nothinc7 can he done unless there is an appeal, if the time of this Board is to be taken up by harrying of bankers http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis coming on here and saying because I kept a deposit once up here, five hundred miles away, therefore you must take me right out 4, of the door of the bank I am in, and put me over four or five States into another bank; if that is going to keep up, gentlemen, it will not be long until your law will get into disrepute, and these wise gentlemen who are up here in the Capitol, who make no errors, who passed this law, and who are now watching to see its good effects, if a turmoil comes up, if contests continue, if digging keeps on, they will say, well, we made a mistake about that; we will just wipe it off, and that will be the result; and that's sure to be the result if things should 111 • happen to take a turn in two years that some of us do not expect, and if some of our distinguished statesmen that now so eloquently defend their positions in 7:ashington should lose out, and some of the other brand should come in, and this law is brought into disrepute; it is not their law anyway; they will say, we wipe it off. Now, gentlemen, this law, in my opinion, and that of the press, and of thinking men -- of course when I say that, I just get in Harrison's class thinking men have pronounced this law as one whose benefits will be farreaching and substantial. 111 http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis That of course means that the law, if it is let along, if you are going to tcar down these districts in less than three months after these banks start, when are you going to put up the bars and keep them up? tell within three months? How can you How can you tell that these three gentlemen who went all over this country, and heard this testimony, are in error? Why, gentlemen, it occurs to me that the H-e only thing that can be done is to postpone any action in this matter until these banks have been permitted to get on a firm • foundation, until they are permitted to get the strength that the law authorizes them to get, so that you may intelligently pass an opinion,--not dream conditions as they portray them to you in prophesies of dire evil that may come, but that you may determine by experience whether this committee, in its judgment, has committed an error. And now, gentlemen, believing that this contest is not one of merit, and that this Board will commit a very grievous and far-reaching error if they should overturn the judgment of the Organization Committee, I submit this matter to you, firm in • the belief that business men as you are, you will simply weigh these facts, and will not transfer us out the door of the Dallas bank territory, within'-'the greatest distance being less than three hundred miles, to a bank four or five hundred miles away; and I submit this case to you, gentlemen, in all earnestness, helievine that the action of the Organization Committee was such as it should have been, that it was best upon a full and fair hearing upon the ground, that nothing has been shown to change those facts, and that if you try this case on the same facts that the Board tried it on, if you have before you and consider simply those facts that the Organization Committee considered, and as your rules say you will consider, you will then be compelled to say we confirm the judgment of the Organization Committee, and that these lines shall remain established until ex- http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis perience shall have taught us that the error has been committed, http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 11-f' and we will not try to prophesy and foresee error in the future. I submit the matter to you. The Governor of the Board: You have ten minutes, Mr. Harrison. Mr. Harrison: ten minutes. I do not think it will require all of the I would like to explain first why in our brief we did not refer to the Organization Committee testimony. The testimony before the Organization Committee,--the only testimony submitted by Oklahoma bankers, was submitted at the hearing at Kansas City; the only testimony given in that case was in favor of placing all of Oklahoma in the Kansas City district,not one word of contrary testimony. The respondent in his brief quotes a statement from Mr. Banks', made in that case, that Dallas was his second choise, but there was absolutely no testimony submitted before the Organization Committee, requesting that we be placed in any other than the Kansas City district. Of course, there were very kind suggestions and re- marks and remarks thrown out by the Kansas City bankers to prove to the Organization Committee that we ought to be in Texas, but I am speaking from the Oklahoma standpoint; therefore, we felt it was unnecessary for us to review testimony which is absolutely all one way. liot only so, but Mr. Howard of Dallas, who was the chief witness of Dallas before the Organization Committee, made this statement, on page 3236 of the record. The Secretary of the Treasury asked the normal course of Oklahoma's business, and their exchanges is with Kansas City and St. Louis, is it not7"Mr. replied, "Erimarily, yes, sir." On page 3241 of the same record occurs this question by • the Secretary of Agriculture: "Have you any communications on the part of Oklahoma people indicating their preference?" which Mr. To replied, "No, sir." That would be the use of our going into the testimony before the Organization Committee, when it is all one way? Our brief simply amplifies the testimony which we gave at Kansas City, and which we believed you needed to have expanded, in order to have a true estimate of this action. As to the political elements of this, our brief statement, we were willing to submit this matter to the Federal Board • without regard to politics. I will state that the banks in Ok- lahoma are different from Dallas, which is a federal institution, and yet represented in Washington by no one. Those banks were represented by oenator Owens and Senator Gore and the congressmen referred to, and had a perfect right to boo their interests were taken care of. would r enter We have never believed politics into this case;if we had we would certainly not have been here. In the gentleman's argument regarding the course of trade, • he said "the course of trade for the South." He has only spok.- en of one side of it, and has not said one word about the imports into that country, practically all of which, except the a http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis small amount which comes from Texas,--all the rest comes from Kansas City, St. Louis, Chicago, and the Southeast. It is not correct that the course is the other way; the course of H-ht ^ trade is from the north and east, but the large volume of exports of cotton and freiht go by reason of freight resources, to the '',11.1f and eastern ports. He spoke about mail facilities, that it is t7o hours -days -- from some points near 'Dallas to Kansas City. That difference does it make to a bank that posts its letter in the r-orni_ac and theletter is delivered the same night, or whether it gets on the train immediately and re. ches the bank the next morning? There is not a point in this territor where a letter posted in the afternoon will not he in Kansas City bank the next morni-iv. It does not make any difference; over-night facilities are what we are after in the banking business. I should have referred, in the course of the lettcr, to the fact that the First National Bank of Chicago, one of the twenty-two, is represented here in person by ohe of the directors, sent ilere for the purpose of speaking for that bank. In going through the record of Exhibit A, I forgot to mention that -- I do not desire to detain the 7oard any longer -- we presented our argument without oratory, --no evidence to show you we could make a speech, or anything of the ki d, but T do wish to say we believe we are entirely withil the rule',: on this occasion. It scems to -e it is somewhat out of line for the gentleman to come down here and say we have no right to present our retition when in the rules that are formulated by the Board it is provided that the representatives, that is, of the respondent ban'-, shall be given seven days in which to reply. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Our petition was filed on the 22d day of September -- or the 15th day of September. • He had under those rules to file the reply. the 22d day of 2eptember He filed it on the 30th :e have said nothin,- about it. dv of January. e are will- inc, to give them -1.1 summer, if necessary, to get up a reply; but when they get three or four months, in which to file their reply, and then come up here and say that we have not conformed to the rules, we feel obligated to call attention to their own failure to observe the terms of the rules of the Board, 7r. Huff: 1:r. Harrison, the ratter was not called to the attention of the -)allas bank until the first of January. It is not our fault. :Tr. Harrison: I beg your pardon, but I have records from the Federal Reserve Board which show it was called to the attention of the ban': on the 20th day of October, but we will leave that a positive fact. to the record, and I will not state that ig The law itself states, -- I think I can understand plain English: "The districts shall be apportioned, provided, -- this relative to the review, -- "The determination, of said organization com-Tittee shall not be subject to review except by the Federal ::. - eserve Board when organized: Provided, That the diLtricts shall be apportioned with due regard to the • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis convenience and customary course of business and shall not necessarily be coterminous with any ,tate or States." We are here contending that it was not so formed; that it would be subject to review at any ti a -1n -le: those circumstances; but are perfectly wi- lin„17, to abide by the rules of the Federal Reserve Board, because, under those rules the only testiony offered http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis here has been under the contention of Dklahoma. If you can find one iota of testimony r-iven at the T:ansas City hearing -and the Organization Committee notified them to aPpear there and where they wanted to go -- If you can find one iota of testimony given before the Organization Com-Attee, which shows we warted to p'o first to the 7allas bank, we are willing to withdraw our plea. Every man who went there made the contention we are maT-irp: here today. Banking is not all our business; we have every other kind except export of cottcn, and some of hose products core from the east; and it was our natural location, and we should be permitted to go there. If this hearing is based on the testimony before the Organization Committee, as the gentleman contends, we are perfectly v.illing to have it deciled on that ground, because every item of that testimony is in our favor. I fool that our facts have been presented as facts, and there are a number of tl'e issues which the gentleman presented which we do not thinkare pertinent or that this Board cares very seriously to consider; at least that is our opinion of them. We came here to present these facts. It is not a fact that the van': , ers of Oklahoma were against this bill. I call the gentleman's attention to thefact-that the author of this bin i from Oklahoma, and is an Oklahoma banker. And the hankers of Oklahoma stood behind him in this move, and it is not fair or rip-ht to come here and contend that the bankers of Oklahoma were opposed to this movement, when we have done every- H—kr thing we could to have this bill promulgated, and put in force in the proper way, and we believe today we are better friends of the 11, measure because of trying to get these banking relations trans— acted through their natural channels than men who would ask the government to compel banks to place their balances where they do not and never can belong, and we believe the Federal Reserve Board has sufficient experience in the banking business to know these are facts and that they have been stated as facts and can not be controverted. I thank you. The Governor of the Board: We will adjourn until three o r clock, when the Senators from Oklahoma can be here. a http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis (Whereupon the hearing was adjourned until three o'clbck, http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis In the Matter of the Petition to Transfer a Portion of Southern Oklahoma from Federal Reserve District Number Eleven to Federal Reserve District Number Ten. ARGUYENT OF SENATOR T. P. GORE •0 http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis In the Matter of the Petition to transfer a portion of Southern Oklahoma from Federal Reserve District Number Eleven to Federal Reserve District Number Ten. BEFORE THE FEDERAL RESERVE BOARD OM M. 1.11 ••• MAY IT PLEASE THE BOARD: On February 13, 1915, subsequent to the oral argument made before your Board in the above matter, Senator T. P. Gore filed a written argument with your Board, in support of this contest, a copy of Which argument having been published in the March number of "The Oklahoma Banker", edited by W. B. Harrison, Who was in charge of the contest on behalf of the Southern Oklahoma bankers before your Board, under the heading, "Kidnapped' Says Gore". It will be noted, in passing, that the contestants have persistently sought, from the beginning, to try this contest and the issues involved in this proceeding in the public print of Oklahoma and upon the influence of their Senators and Congressmen rather than rest the case upon its merits before your tribunal. Respondent would not have asked permission to reply to this argument were it not for the fact that it was printed and spread broadcast over the State of Oklahoma and some of the statements therein contained are such as ought not to be permitted to pass unanswered and are such as would tend to http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis -2- create dissatisfaction in the minds of Southern Oklahoma bankers who have always and are now desirous of remaining in the Eleventh District. In the argument made by Senator Gore is found the following language: "Two kinds of powers are conferred and two kinds of duties are imposed on your Board by the Federal Reserve Act. Certain provisions of that law are mandatory. In their execution the Board has no choice--no discretion. It cannot consider circumstances. It cannot be influenced either by its own wishes or the wishes of others. "The manner of executing other provisions of the Act is discretionary. In respect of these the Board can take counsel of circumstances. It may be influenced by local needs and by the wishes of those whose vital interests are affected by its action." At the threshold, therefore, of the issues discussed by Senator Gore is found again the question, What are the powers of the Board with respect to this proceeding. Section 2 of the Federal Reserve Act reads, in part, as follows: "As soon as practicable the Secretary of the and the ' Treasury, the Secretary of Agriculture Comptroller of the Currency, acting as 'The Reserve Bank Organization Committee,' shall designate not less than eight no::' more than twelve cities to be known as Federal reserve cities, and shall divide the continental United States, excluding Alaska, into districts, each district to contain only one of such Federal reserve cities. The determination of said 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 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 http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 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 organizatie)n committee shall constitute a quorum with authority to act. "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 me 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." It is therefore necessary for your Board to determine what is the meaning of that portion of the law which provides that, "The determination of said organization committee shall not be subject to review except by the Federal Reserve Board when organized". 'When the Board's attention was first called to this provision of the Act your Board then construed of the Act in line with the position taken by respondent in this contest, and at that time took the same view of this prothe law as the respondent has urged; and, among the rules and regulations so -oromulgated by the Board on August 28, 1914, is found the following: "Peti',ions 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 he the sane as for petitions for changes in the designation of Federal reserve cities, except that the board of directors http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 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. "The Board will not hear testimony, but the parties will be limited to the record before the Organization Committee. "At all hearings held hereunder all questions of law or fact, including jurisdiction and powers of the Federal Reserve Board, may be argued." It will thus be seen that your Board construed this provision of the law simply as giving parties interested a right of appeal and limited the consideration before your Board to the testimony 'taken by the Organization Committee. Your rules so promulgated provided the manner in which an appeal could be taken from the decision of the Organization Committee in order that your Board might review its action. If that provision of the law is to have any effect, it should necessarily, therefore, be construed in line with the rule of law applicable to appeals and reviews as determined by the courts of our land. In the case of Weekawken "Wharf Company v. Knickerbocker Coal Company, 54 N. Y. Supp., 566, 567, it was there held that the war:d "review", as used in Code's Civil Procedure, paragraph 779, providing that where costs of a motion are awarded or proceedings in the action on the part of the party required to pay the same, except "to review or vacate the http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis order"., are stayed until the payment thereof, must be taken to mean to review on appeal; for that is the only method whereby a review may be had. The word could not have meant renewal of the motion or a re-settlement of the order. The word "review" means simply that the court on appeal may be asked to consider the question presented below as a ground for the determination in the order. Reference to this case will also be found in Words & Phrases, Volume 72 pages 6214 and 6215, under the heading of "Review". The case of State of Missouri ex rdl Bentley v. Reynolds, reported in 89 S. W., 877, is of service as indicating the view the courts put on the word "review", Where found in statutes similar to the one under consideration. Under the law of Missouri, any action or neglect of the officer or member of a political convention or committee, or of any judge or clerk of primary election, or any public officer or board, with regard to the right of any person to participate in a primary election, is subject to review by the appropriate remedy of mandamus or certiorari, as the case may require. As bearing on the correct construction to give the word "review", found in the Federal Reserve Act, a quotation from this Missouri case is here made: "Sec. 23. Jurisdiction of and Review by the Courts.--Any action or neglect of the officer or members of a political convention or committee, or, of any judge or clerk of primary election, or of any public officer, or board, with regard to -6Y.- • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis the right of aly person to participate in a primary election, convention or committee, or to register, or with regard to any right given to, or duty prescribed for, any elector, political committee, politcal convention, officer or board, by this act, shall be reviewable by the appropriate -remedy of mandamus or certiorari, as the case may require. In addition thereto, the Supreme Court of this State, or any justice thereof, or the court of appeals having jurisdiction over any city to which this act is applicable, or any judge of such court of appeals, or the circuit court of any such city, or any judge of such circuit; court, shall have summary jurisdiction, upon complaint of any citizen, to review such action or neglect. Such complaint shall be heard upon such notice as the said court or justice or judge thereof shall direct. In reviewing such action or neglect, the court or justice or judge shall consider, but need not be controlled by any action or determination of the regularly constituted party authorities upon the questions arising in reference thereto, and make such decision and order as, under all the facts and circumstances of the case, justly (justice) may require. For any of the purposes of this section, service of a writ of mandamus, certiorari order or other process of such court, or justice or judge thereof, upon the chairman or secretary of such convention, committee or board shall be sufficient.' "It is in the first sentence of that section that the attempt is made to subject certain acts of the election officers to review, 'by the appropriate remedy of mandamus or certiorari'. The act recognizes that the remedy afforded must be appropriate to one or the other of the writs named. It authorizes the use of either of those writs only When it is appropriate, and it does not undertake to amend the law with reference to either of those writs by giving it a function it did not before possess. Therefore, When the nature of the case is such that the common-law writ of mandamus or certiorari is appropriate, the statute says it may be used, but the statute goes no further. But Section 23 does not purport to cover a case of contested election with either of those writs, or to bring every action of the election officer under review. The language is: 'Any action or neglect of the of- http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ficers . . . with regard to the rights of any person to participate in a primary election, convention or committee, or to register, or with regard to any right given to or duty prescribed for any elector, political committee, political convention, officer or board, by their act,' etc. In other words, if a party has been denied the right to vote at the 'primary, or denied a seat in the convention or in the committee, or denied the right to register, or any such specific right or duty given to or prescribed for him by that statute, he may have the remedy of mandamus or certiorari when it is appropriate. The next succeeding sentence, which essays to confer summary jurisdiction on certain courts and judges, is limited, also, in its scope to 'review such action or neglect', that is, the action or neglect already mentioned." It will thus be seen that the Supreme Court of the State of Missouri, in passing on that statute, which gave the right to review the action and neglect of any officer or member of a political convention, etc., held that the statute only authorized the court to review such action and neglect of said officer, that is, such action or neglect mentioned in the statute, and refused to extend the scope of that statute so as to make possible a contest of a primary election under the statute. In the American & English Encyclopaedia of Law, Volume 21, page 349, First Edition, under the heading "Review", is found the following: "A second. examination with a view to amendment, reconsideration, revision. Used more particularly to designate the examination of a cause by an appellate court, and the second examination of a proposed public road by a jury of viewers or, as they are sometimes called, a 'jury of review'. In the first sense it signifies any of the different modes by which a jv.clicJal act may be revised, as appeal, writ of error, rehearing, etc." - Under the heading, "Grounds for Review", Volume 23, • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Cyclopedia of Law & Procedure, page 886, is found the following: "A proceeding of this kind, for the review of a judgment, may be maintained for want of jurisdiction (that is, of the tribunal rendering the judgment or decision), for the insufficiency of the complaint to show any right of action, for error of law committed by the trial court, for material new matter discovered since the rendition of the judgment, for fraud practiced in obtaining the judgment, or where the judgment was taken against the party in consequence of surprise, mistake, inadvertence or his excusable neglect, or to correct a mistake in the form of the judgment, but not on account of matters which may have been pleaded in defense of the original action, nor merely on account of a conflict ift evidence." The action of the Federal Reserve Organization Committee in establishing the present lines of District 11 amounted to a decision or judgment. The Federal Reserve Act gave interested parties a right of review before your tribunal. That right of review, however, can only be maintained on one of the follov,ing grounds: 1. Because the Organization Committee did not have jurisdiction to make the order establishing the lines Which it did. 2. For error of law committed by the Federal Reserve Organization Committee. 3. On account of material new matter discovered since the date of decision which was not known to the parties at the time of the decision. 4. For fraud practiced in obtaining the judgment of the Federal Reserve Organization Committee. 5. Because the Federal Reserve Organization Committee's judgment was taken in consequence of surprise, mistake or inadvertence, or on account of excusable neglect on the part of the parties now complaining. 6. Because of a mistake in the form of the decision promulgated by the Federal Reserve Organization Committee. If any one of the above grounds has been shown to exist, then, of course, the Federal Reserve Board would be au• thorized to reverse the ruling of the Organization Committee; but it is not claimed in this proceeding that any of the grounds authorizing a reversal upon this review, which grounds are named above, exist in this proceeding. Therefore, nothing has been shown Which will justify or permit your Board, in passing upon this appeal and in reviewing the judgment of the Organization Committee, to tear that order asunder and reverse the solemn findings of the Organization Committee. It is evident that Congresn had in mind, When it used the language it did use in this statute, that it should limit the right of the Federal Reserve Board to reverse the decision of the Organization Committee upon appeals, unless for reasons justifying a reversal, as shown above. Congress knew that every dissatisfied community in the United States would be appealing to your Board from the decision of the Organization Committee and asking your Board, upon these appeals, to reverse the Organization Committee's judgment and • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis to change the district lines. Therefore, Congress specifically stated that the judgment of the Organization Committee should -10- not be subject to review except by your Board, and used the • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis word "review" becaase of its significance, Which limited your right to reverse the action of the Organization Committee to one of the grounds laid down in the law books in proceedings of appeal and review. It is quite evident that it was the purpose of Congress to require these districts to be maintained as originally determined by the Organization Committee, unless upon review you could reverse its decision for some one of the grounds above set out and not to permit a change Of the district lines until experience showed you that the lines so established by the Organization Committee were incorrectly established and should be changed. In the same section of this law is found the following language: "The districts thus created may be readjusted and new districts may, from 'glue to time, be created by the Federal Reserve Board, not to exceed twelve in number." It is evident that it was the purpose of Congress to require your Board to review only the action of the Organization Committee and not to reverse that decision unless you could do so upon one of the well known grounds applicable in passing upon this character of proceeding as a court of review. It was for the purpose of giving stability and a sense of security to the action of the Federal Reserve Organization Committee that Congress permitted your Board only to http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis -11- review its actions under the legal limitations which that word carrieswith it. It was not Congress' intention, however, to require you, after these banks had been established and had been in operation a sufficient length of time to enable you to intelligently detertne Ilhether the Organization Committee had com mitted error, to then refrain from changing the lines af the district or creating new districts if the Board, in its wisdom, then determined, after a trial of the law, that error had been committed in the establishment of the present district lines, because Congress specifically statesthat the districts thus created may be readjusted and new districts may from time to time be created by the Federal Reserve Board, showing that Congress recognized that time might determine and might show that there had been error in the establishment of these lines, and that, when that time should arrive, your Board's hands would not then be tied, but that your Board could then exercise the right of changing the lines or of creating new districts if, in its wisdom, experience had shom you that that was the wise thing to do. It was evidently the purpose of Congress to permit you to work out the problems arising under this law in a thorough and systematic manner, rather than to permit your time to be taken up in hearing endless contests and appeals When it limited your right to act upon the judgment of the Organization Committee to your right to review its action only on appeal. -12- In the argument of Senator Gore is found the following language: "I respectfully submit that there are two considerations which should control the action of the Board in the premises--the general interest and ultimate success of the Federal reserve system on the one hand and, on the other hand, the vital interest and wishes of the Oklahoma bankers who seek the transfer. "That it is the deliberate wish of the Oklahoma bankers to be transferred to the Kansas City District is established by evidence that is not only convincing but overwhelming. That 110 national banks out of 135, reinforced by 178 state banks, should have joined in requesting the transfer leaves no room for doubt upon this point." The fallacy in Senator Gore's position is that he desires this Board to determine this contest upon the wishes of some bankers in Oklahoma City, joined by certain Southern Oklahoma bankers, rather than to determine this contest upon the interests of the entire country and the testimony heard and considered by the Organization Committee. It is needless to state to your Board that bankers have refrained from having anything to say whatever about this contest. • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Dallas From a quotation of the rules promulgated by your Board it will be seen that the directors of the Dallas Bank were required to select a representative to eppear and answer this petition. This the Dallas Federal Reserve Bank did, and this is the real crime that has been committed in the eyes of Senator Gore. No Dallas banker has written your Board or has appeared before your Board in any manner which would show that Dallas desired an aggressive guardianship over its -13- Oklahoma neighbors. • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis No Senator from the State of Te::as has written your Board or has appeared before you in this contest. No member of Congress from Texas has sought to interfere or suggest in any manner how your Board should determine this contest. At the hearing before your Board neither of the Texas Senators and none of the eighteen members of Congress appeared beforeyou or had one word to say with reference to this matter. Senator Gore further contends in his argument that, because the Oklahoma bankers had established connections in Kansas City, St. Louis and Eastern financial centers, therefore the SOuthern Oklahoma banks should not be included in the Eleventh District but ithould be transferred to the Tenth District. A careful analysis of this argument will lead. to only one conclusion, and that is, that there Should be no banks in the Vest or South, but that what banks existed should exist in New York, Boston, Philadelphia and Chicago. The bankers of St. Louis and. Kansas City have done their business altogether with these cities. There is not a district created but what, in some parts of the district, there are banks that have done bIliness in other cities than the city designated as the place of the reserve bank. Thee is no use in severing any ties that Oklahoma bankers may have with Kansas City banks. Because Oklahoma bankers may have done business with Kansas City banks furnishes no valid reason why they should not be furnished another http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis -14- business connection to the South and in the vicinity where all of their products are sold. It is not the purpose and object of the Federal Reserve Act to destroy banking facilities vLich banks have heretofore had, but to give them additional facilities, to the end that the country as a Whole may have a more stable and satisfactory financial basis. Instead of injuring the banks in Southern Oklahoma in permitting the district lines to remain as they are established, the retention of Southern Oklahoma in the Eleventh District will strengthen the advantages and facilities of these Southern Oklahoma banks and will inure to their substantial benefit rather than to their detriment. If they have connections in Kansas City they can retain their connection and, in addition thereto, they will have a stable and satisfactory connection in that portion of the country Where the entire products of this part of Oklahoma dre sold. Senator Gore takes issue with the statement made, to the effect that Dallas Wholesale houses carried, at the time of the taking of the testimony by the Organization Committee, 28,000 accounts with merchants and business men in Oklahoma, and claims that there are only 22,000 merchants in Oklahoma. This testimony was taken before the Organization Committee, and is found on page 115 of the Senate Record, and shows that Dallas jobbers had on their books at that time 28,280 accounts with mrdhants and parties in the State of Oklahoma. It did not necessarily man that these accounts were all with Oklahoma merchants, as there are numbers of concerns in Oklahoma carrying 1•111 accounts with Dallas merchants Which are not classed as merchants. F°r instance, there are a great number of oil com- panies, gas companies, gins, cotton-seed oil mills, manufacturing enterprises, and concerns of that character Which are not listed as merchants in the commercial agencies but Which are, nevertheless, business institutions in Oklahoma. This testimony taken by the Organization Committee goes to show, and does disprove the statements made by the representatives of the S6uthern Oklahoma banks to the effect, that no business was done by Oklahoma with Texas. Senator Gore says, in his argument: "It is highly desirable that the political unit and the financial unit should comprise one and the same territory. It is highly undesirable that Oklahoma should be cleft asunder in the middle from one end to the other, that the veil of her financial temple should be rent in twain, that her bankers should be divided, that her people should be divided, that confusion .should be made a necessity and that unity should be made an impossibility. Vihy pronounce such a sentence against an unoff ending State?" Evidently Senator Gore had drawn heavily upon his imagination When he saw the political unit of his State and the financial temple rent in twain. Oklahoma bankers have been doing business with Kansas City, St. Louis, Chicago, Little • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Rock, Fort Scott, Fort Worth, Houston, Dallas, New York, and other financial centers before the establishment of the Federal Reserve Banks, and no one claimed that the political unit or the financial unit of the State had been torn to threads nor had believed, until Senator Gore made this argument, that it -16- was hurtful to the State of Oklahoma to have her bankers 4 . http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis have financial connections in nearly all of the leading financial centers. Every one believed, until this argument, that such a condition was highly satisfactory and that it was to the best interests of the State for the banks to have financial connections in all of the financial centers, yet, when the Organization Committee adds one more financial center to the list of financial connections and gives to Southern Oklahoma banks one more highly useful financial connection, the Senator from Oklahoma rises up in his might and says that such action has rent asunder the veil of Oklahoma's financial temple and was a severe sentence upon an unoffending State. Senator Gore draws a very strong indictrJent against whoever was responsible for the establishment of the present district lines and calls the judgment and action of such tribunal a terrible sentence against his State. Of course, the Senator was trying to create the impression that Dallas or Dallas bankers were responsible for this sentence against his State, which he paints as being so unjust and terrible. Let us consider, however, the origin of this action thich he pronounces a sentence. 'Who were responsible for the establishment of the present lines? The Organization Committee, composed of Mr. McAdoo, Mr. Houston and Mr. Williams, two of them members of the Cabinet and one of them the Comptroller. of Currency. Does this Board believe that the action of the Organization Committee was a crime and sentence against the State of Oklahoma? Can this Board, in view of the indictment http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis -17- made against these three gentlemen who compose this Organization Committee and who established these lines, thus convict the Organization Committee and proclaim, by its judgment, at the indictment so drawn by Senator Gore was in fact well founded? The Organization Committee, by its decision in the establishment of these lines, is held up as a tribunal which has rent asunder the political and financial unft of Oklahoma and rent the veil of her financial temple in twain, divided her people politically and financially, and left the State an object of sympathy. If the Board can subscribe to this in- dictment, then, of course, this contest should be successful. If, however, this Board believes in the patriotic motives of the Organization Committee and believes that the Organization Committee did its duty in the best manner possible, then we contend that the Board cannot sustain this contest and cannot pronounce the judgmen.!, of worse than incompetency against the Organization Committee Which established these lines. Senator Gore further states in the course of his argument: "It has en urged that Oklahoma City or that the bankers of Oklahoma City are responsible for this contest. This allegation is disproved by the practically unanimous wish of the entire banking fraternity of the State. But if it were true I am prepared to defend such ambition on the part of Oklahoma City. If it were so it were not a grievous fault and Oklahoma City should not be compelled grievously to answer it. Is not the ambition of Oklahoma City that the State should be a financial as well as a political unit, that the interests of .18- id* http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Oklahoma should be fraternized and united, that the future growth and greatness of her people should not be foreclosed or fettered, is not this ambition on the part of Oklahoma City quite as legitimate as the desire on the part of Dallas to kidnap one-half the bankers of Oklahoma, to lead one-half the State into captivity against its will and to enhance their own fortunes by the sacrifice of that of their unwilling neighbors? Could such wedlock as Dallas proposes be auspicious, honorable or enduring, dictated by selfishness and force on the one part and submitted to with reluctance and protest on the other? Should not divorce precede matrimony in such a case? "Let us admit that this is acontest between the Gebition of Dallas on the one hand and the ambition of Oklahoma City on the other. The ambition of Dallas is unsupported. There is no other weight in the balances in her behalf. On the other hand there are many weights in the balances in behalf of Oklahoma City. Her ambition, if you please, is reinforced by the united, by the almost unanimous wish of the bankers of the State. Her aribition is reinforced not only by the widh but by the interest, by the convenience, by the established customs and habits of a circle of business men iliose sagacity Is beyond challenge. Her ambition is seconded by the present welfare and by the future destiny of the entire citizenship of a sovereign State. Against these powerful considerations Dallas can plead naught but lust for the birthright of her brethren. I neither wonder nor complain that Dallas should desire so fair and fruitful a conquest. I am unwilling, however, that she should consummate this desfre --the sacrifice of my own State and my own people." It will thus be seen that the Senator now practically admits what was so conclusively shown on the hearing, that Oklahoma City was the instigator of this contest and had nourished it from the beginning, with the assistance of certain bankers In Southern Oklahoma. The Senator defends this ambition upon the part of Oklahoma City, and says it is a laudable ambition, and one that should ')e cherished and fostered, rather than denied. We will concede that the aaibition is commendable, but, in conceding this fact, no one should lose sight of the dire results her that would follow the accomplishment by Oklahoma City of ambition in this matter. This is not the only contest before this Board. This is not the only appeal from the Organization Committee's decision. If it be conceded that this contest should be granted because it was originated by Oklahoma City and fostered by certain bankers in Southern Oklahoma, and if the contestants did prevail in this contest, let us consider, for a moment, What would result. Oklahoma City is not the only ambitious city in the United States; Oklahoma City is not the only city in the United States that could secure the assistance and backing of bankers in its vicinity. Other cities have ambitions and have banker friends in their vicinity Who would foster and assist them in their ambitions. New Orleans desires to have a branch bank and has bankers in its vicinity who would foster that ambition. Nashville desires a branch bank and has bankers in Tennessee who would foster its ambition. • • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Pittsburg desires a bank and has numbers of bankers in Pennsylvania and in the territory near it that would 'be glad to cherish and aid in its ambition. Denver has an ambition to have a bank or branch bank, and has a great scope of country whose citizenship would aid it in its ambition. Birmingham naturally would prefer to have the Federal Reserve Bank rather than to see it maintained at Atlanta. Al]. over the United States are other cities with friends to back their ambitions, and if this Board should up- http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis hold the indictment made by Senator Gore of the Organization Committee's work and should grant the contestants their desires in this contest, the floodgate would be opened and contest after contest would find its way before your Board and your time would be taken up in disposing of contests made possible and brought about as the result of the ambition upon the part of cities. Your banks are in their incipiency. They are all still infants and have not yet shed their long clothes. They have, as yet, been unable to procure the capital stock made possible by the terms of the Act. The officers of each of these banks are striving day and night to make the success of 'these banks possible and to vindicate the wisdom of Congress in the passage of this law. Would it not be the part of wis- dom to let these banks work out their problems for a year or two and let them at least get upon a paying basis before the district lines are rent asunder and your Board flooded with numerous and endless contests? Senator Gore states that the ambition on the part of Oklahoma City is quite as legitimate as the desire on the part of Dallas to kidnap one-half the bankers of Oklahoma, to lead one-half the State into captivity against its will, and to enhance their awn fortunes by the sacrifice of that of their unwilling neighbors. We again call the attention of the Board to the fact that if Oklahoma was kidnapped, as Senator Gore .(C;o capvity says it was, if one-half of the State Was led i. by being placed in tile Eleventh District, then these Oklahoma http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis -21- bankers and this territory was kidnapped not by Dallas, not by the Federal Reserve Bank of Dallas, but the gentlemen who were guilty of the kidnapping were the gentlemen Who compose the Organization Committee who established these present lines. If the Board believes that the Organization Committee kidnapped a portion of Oklahoma and led a portion of the State into captivity to Dallas, and that, by reason of this kidnapping and this enforced captivity the Dallas Bank was established, then, of course, subscribing to that doctrine, your way is clear and the contestants should prevail. believe that If, however, your Board does not Secretary McAdoo, Secretary Houston and Mr. 'Wil- liams were kidnappers and if the Board does not believe that these three gentlemen led into captivity to Dallas a portion of Southern Oklahoma bankers and fettered and bound them in this district, to the detriment or the State of Oklahoma, then, of course, you cannot decide this contest in behalf of the contestants and the ambition of Oklahoma City cannot prevail. Senator Gore says: "Could such wedlock as Dallas proposes be auspicious, honorable or enduring, dicated by selfishness and force on the one part and submitted to-with reluctance and protest on the other? S"ould not divorce precede matrimony in such a case?" The question arises, who married Southern Oklahoma to Dallas? Did Dallas do it? Did Dallas bankers do it? Did any representative or the City or Dallas perform this ceremony which Senator Gore says is so irksome and unnatural? the gentlemen Who made this match? "Who were It was not Dallas citizens. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis -22- It was not Dallas bankers. not Texas Congressmen. It was not Texas Senators. It was It was no citizen of the City of Dallas, but this marriage Which he protests against was performed by two eminent members of Presidenttlilsonts Cabinet and by the Comptroller of Currency of the United States. If you gentle- men believe that Secretary McAdoo, Secretary Houston and MY. Williams should be censured by reason of their action in this behalf, if you subscribe to this accusation brought against them by the Senator from Oklahoma, then, of course, your duty is clear. You should enter a decree annulling this alliance. If, however, you believe that the Organization Committee was prompted by the highest motives, that their conduct is not subject to the criticism brought against them by the Senator from Oklahoma, that in the establishment of these lines this Committee was prompted by the desire to do the most good for the greatest number of people, then we submit that you cannot assist Senator Gore in fostering the ambition of Oklahoma City. What has Dallas done that would justify Senator Gore in making such an argument? done by Dallas: Here is all that has been The Federal Reserve Bank of Dallas, in re- sponse to instructions from your Board, has requested its counsel to make reply to the petition of certain Southern Oklahoma banks and to represent it in this contest. all that the record shows that the That is Dallas Reserve Bank has done, and this same record conclusively shows that no citizen of Dallas has in any way sought to do anything further than _ http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis to the Federal Reserve Bank of Dallas has done in response your instructions. On the one side of this contest stands in the Dallas Reserve Bank making a reply to this petition, accordance with instructions given by your Board. I On the other side of this contest is found W. B. Harrison, Secretary of the Oklahoma Bankers Association, a resident of Oklahoma City, Mr. Mee, President of the Oklahoma City Clearinghouse Association, both of Oklahoma's Senators, and five or six of her Congressmen, together with a portion of the Southern Oklahoma bankers. The gentlemen bringing this contest charge it as a crime that the lines, as established, divided the State of Oklahoma, yet they themselves seek still a division of the State, because they have not asked that five Counties in Southern Oklahoma be transferred to the Kansas City District. There are thirty banks in those five Counties in Southern Okla-. homa which are, by the petition of contestants, left in the Dallas District. There are thirty-four member banks of the Federal Reserve Bank of Dallas in Southern Oklahoma who have not, to this good day, asked to be transferred. There are one hundred sixty-six banks in Southern Oklahoma members of the Dallas Federal Reserve Bank. never asked to be changed. Thirty-four of these banks have Thirty of the one hundred sixty- six were eliminated by the parties bringing this contest. Twenty-two others wrote letters protesting against any change in the lines or stating that nothing should be done at this time, making eighty-six of the one hundred sixty-six banks -24- Which have, in one way or another, showed that they were not in sympathy with this contest. Since that time probably eight or nine of the twenty-two banks above referred to have written other letters indicating that they desired to join with the other banks in Southern Oklahoma in being transferred to Kansas City. S°me of these banks have written letters both ways, show- ing that they did not know themselves what was best for them. Thus it will be seen that this is not a unanimous request upon the part of Southern Oklahoma banks to be transferred to KansEis City,, but that less than two-thirds of the banks in Southern Oklahoma desire a change. Senator Gore states that one hundred seventy-eight state banks in Oklahoma desire to have the district lines changed. It is here suggested that the interests of the state banks cannot very well be considered, because these same state banks havenot asked and procured a change of the State law in Oklahoma so that they could join any Federal Reserve Bank, dlowing that the state banks, instead of having an interest in this matter, are either indifferent or not in sympathy with the purpose of the Federal Reserve Act. It will be noted, from the quotation above, that Senator Gore states that Oklahoma City's "ambition is seconded Tm*, http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis by the present welfare and by the future destiny of the entire citizenship of a sovereign State. Against these powerful con- siderations Dallas can plead naught but lust for the birthright of her brethren. I neither wonder nor complain that http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis -25- Dallas should desire so fair and fruitful a conquest. I am un- 111. lling, however, that she should consummate this desire--the sacrifice of my own Stat and my own people." This indictment, may it please the Board, against Dallas, cannot prevail, because Dallas is not responsible for the establishment of these lines. This indictment, therefore, must necessarily be classed as another of the Senator's indictments against the Organization Committee. If anybody was sacrificing the Senator's home State and his people, it was not Dallas, promptedby a lust for the birthright of her brethren. among Xosephls brethren. Dallas cannot be classed If the Senator's State and his people have been sacrificed, he cannot lay that crime at the door of Dallas or Dallas bankers. He cannot ask the conviction of Dallas at your hands for such an offense, but if such an offense has been perpetrated it was not by Dallas nor Dallas citizens; it was not by Texas nor Texas citizens; it was zation Committee. by the Organi- If the Board believes that these gentlemen have sacrificed the Senator's home State and his people and can subscribe to this language of the Senator, then, of coarse, the Board cannot become a Dartictpts criminis in this terrible offense, but must necessarily join the Senator in furthering the ambition of Oklahoma City and in loosening the bondage which binds his State andhis people. If, however, you do not believe that you can convict two members of your Board and the Comptroller of Currency of this offense, if you believe these gentlemen, acting as the Organization Committee, acted for the -26- best interests of the United States as a unit and were not seeking to further the lust of Dallas for the birthright of her brethren, then, may it please the Board, you cannot join Senator Gore in his charge, and must, of necessity, decline to entertain this contest. It is apparent, from Senator Gore's argument, that he has dealt largely in imaginary grievances and hasnot descended to a discussion of the facts as shown by the record. He has attempted to build a straw man, in order to knock it down. He claims that the Southern Oklahoma bankers are practically a unit in asking this transfer. out by the record, as your Board knows. This is not borne In truth and in fact there are practically as many banks in Southern Oklahoma Which desire to remain in the Eleventh District as there are which desire to be transferred to the Kansas City District. A great many of the leading bankers of Southern Oklahoma have taken the position that the Federal Reserve Organization Committee knew more about this situation than the Southern Oklahoma bankers and that the action of the Committee should not be changed until time demonstrates that their action was erroneous. raft, http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis On February 13, 1915, NY. R. K. Wootten, President of the Oklahoma National Bank of Chickasha, Oklahoma, in writing to NY. H. L. Jarboe, Jr., President of the Drovers National Bank of Kansas City, says: http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis -27- "Replying to yours of February 11th, I am in favor of the Oklahoma Nati onal and other banking interests I am connected with remaining in the Dallas District, because we are already in that district and don't know, by any means, that it is to our interest to be changed. "The Districting Board, being on to; mast, located us in the Dallas District. The Dallas Bank is manned and directed by a strong set of directors and officers. We don't know at all that it is to our interest to be changed, and until we do know more for sure where we are and What is to our interest we are in favor of letting things stand as they are." This is an expression from one of the strongest business men in Oklahoma and the President of the Oklahoma National Bank of Chickasha. A copy of this letter was for- warded your Secretary on February lath, and is on file with the records of this proceeding. Vie cite that as an instance to show the Board that strong bankers in Southern Oklahoma find the bondage of which Senator Gore complains extremely pleasing some. and not at all irk- We confidently believe that if this contest is denied that within six months three-fourths of the banks in Southern Oklahoma will be congratulating themselves upon having been permitted to remain in the Eleventh District. Southern Oklahoma bankers are doing business with the Dallas Reserve Bank pleasantly and profitably. They are now convinced that their legitimate needs will be cared for by the Dallas Bank and that they can obtain service at the Dallas Bank, whfch is considerably rarer than the Kansas City Bank. If thIs portion of Oklahoma does not belong in the -28- Dallas District geographically, then all of the districts have been erroneously created and your Board will have to create new ones. !NI* http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis The directors and officers of the Federal Reserve Bank of Dallas are in entire sympathy and accord with the purposes of the Federal Reserve Act and are in uympathy with the problems which daily confront your Board. It is the earnest desire of the directors and officers of the Dallas Bank that the wisdom of the Federal Reserve Act may be demonstrated and that• they may hay e an appreciable part in working out the problems confronting all of the banks in carrying out the terms of this Act and in building a stable, substantial and nefi- cial financial system which will inure to the benefit of the entire people. Earnestly believing that the district so created by the Organizatcin Committee is one in which it can demonstrate the advantages of a Federal Reserve Bank, the Dallas Bank urges your Board not to change its present district lines, but to permit it to assist in working out the destides of the banks so created under the terms of this law. Respectfully submitted, CHARLES C. HUFF, Counsel. , BOARD FILE cLOLRAL tISERVE PETITION OF Certain Banks in Southern Oklahoma TO THE Federal Reserve Board To Change the Lines of Federal Reserve District No. 10 and Federal Reserve District No. 11 so That All of Oklahoma Except the Counties of Marshall, Bryan, Choctaw, Pushmataha and McCurtain will be in DISTRICT No. 10 WIRIMMIND As this petition is being filed, the cotton fields in the section asking to be transferred are white with a crop estimated at approximately 1,000,000 bales. The market is demoralized and the situation acute. Kansas City banks are well supplied with money from wheat, corn, cattle and other northern crops to assist in financing this product. Kansas City is Oklahoma's natural avenue of relief for the farmer, merchant and banker, and such relief accords with the thoroughly established lines of commerce and finance, as the facts herein set forth prove. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ' http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis TO THE FEDERAL RESERVE BOARD, Washington, D. C. GENTLEMEN: The banking and commercial interests of the State of Oklahoma, and particularly the bankers and business men of that portion of Oklahoma which is included in District No. 11 of the Federal Reserve System, respectfully petition your Honorable Board to transfer from Federal Reserve District No. 11 to Federal District No. 10 all Oklahoma counties now included in District 11, except the counties of Marshall, Bryan, Choctaw, Pushmataha and McCurtain. Why Five Counties Are Omitted. reasons for not asking the transfer of the five Our counties named are: First, these counties are closer to Dallas than any other part of Oklahoma, and are connected with Texas by a line of railroad not serving any other section of our state. Second, because of this peculiarly close geographical connection with Texas, many banks in these five counties are either owned outright by Texas bankers or are closely associated with Texas institutions, and prefer to be in the Dallas district. Third, Mr. B. A. McKinney of Durant, Bryan county, has been elected a director in the Dallas bank and we have no desire to interfere with his services in that position. His neighboring bankers in the five counties named, many of whom, like Mr. McKinney, are former Texans, were ardent supporters of him for the position referred to and would sincerely regret, as would also petitioners, any change in the district which would deprive the Dallas bank of his services. We ask that this transfer be made: FIRST:—Because the present districting is not in accordance with the spirit of the law which provides in Section 2, "the districts shall be apportioned with due regard to the convenience and customary course of business." (a) Course of Business The course of Banking business in Oklahoma has always been to the north and east. The data which we submit to you shows this conclusively to have been the case in http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 1 the past, and also that it is the desire of the bankers in Southern Oklahoma to continue to let their business follow the natural channels in which it has heretofore run. The tabulation of figures contained in reports from a number of banks in the Dallas District counties of Oklahoma, the originals of which we submit to You, shows that during the month of April the banks in question cleared through Kansas City items amounting to $4,737,199.58; that the same banks cleared through Dallas no items at all, but that they cleared Texas business, through correspondents in Denison; Sherman and Fort Worth, to the amount of $345,617.19. Figuring percentages upon these items shows Kansas City to have handled 93.2%, Dallas 0%, and other Texas cities 6.8%. The same banks received in cash items from Kansas City banks, during the same time, $808,392.94; from Dallas only $642.68, and from Fort Worth $8,068.79. Figuring percentages on these items shows Kansas City to have handled 98.8%, Dallas 0.08%, and other Texas cities 114%. We invite the attention of your Board especially to a perusal of the leters from which these figures were tabulated, as many of them show the dissatisfaction existing among the bankers in Southern Oklahoma and their evident desire to be included in the Kansas City District. Oklahoma-Dallas Relations. As showing further the trend of business toward Kansas City, we also submit for your consideration a letter from Mr. Thralls, Manager of the Kansas City Clearing House, showing that 381 banks in Southern Oklahoma, on May 9, 1914, carried with Kansas City banks 414 accounts. We are advised by Senator Owen that the Comptroller's office in April furnished him with a list of five national banks only, in the Southern District, which show Dallas correspondents. We submit herewith letters from four of these banks showing in each case a special reason requiring the carrying of the account in Dallas. Statistics for state banks are not available, but there is no reason to believe they would alter the proportion. Accounts secured by Dallas banks from Oklahoma since the regional districts were established should not be _construed as due to the natural trend of business. Dallas banks have evidently recognized that the trend of business in Southern Oklahoma is to the north and east, because we have never heard of banks in that city soliciting business in Oklahoma, nor have we seen representatives of those banks at Oklahoma Bankers' Convention, until http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 2 the last one held in May, 1914, just after the announcement was made showing the boundaries of the reserve districts. In proof of the fact that Dallas banks have not sought business in Southern Oklahoma, we submit a letter from the City National Bank of Dallas, dated May 20, 1914, written to a Southern Oklahoma banker, in which they say: What Dallas Bankers Say. "We have no adequate facilities for handling Oklahoma points when the items bear previous Oklahoma indorsements as well." We also submit a letter from the Commonwealth National Bank of Dallas, dated May 12, 1914, in which they say: "We clear Oklahoma items through our St. Louis and Kansas City correspondents and consequently would hardly be in a position to handle items on Oklahoma bearing prior Oklahoma indorsements." These letters show conclusively that Dallas banks are without the facilities to handle, direct, Southern Oklahoma points, which proves there has previously been no exchange business between these sections of any importance. On the contrary, the banking business of the whole of Oklahoma has gone mgre largely to Kansas City on account of quick, direct, overnight mail transmission, and because of the financial assistance furnished by Kansas City bankers in past years beforc. Dallas was a place of any financial importance. It is further true that Dallas has never assisted in financing Southern Oklahoma's interests, with the exception of a very few points near the Oklahoma line. What Freight Shipments Show. That the trend of commercial business, as determined by existing freight rates, is northeast and southwest, and not southeast toward Dallas, is also shown by a statement made by W. V. Hardie, Secretary of the Oklahoma Traffic Association, in a letter which we herewith submit to you. Mr. Hardie says "the whole trend of commercial trade from the Southwest,—Kansas, Oklahoma, Texas and New Mexico,—is from the north and northeast to the south and southwest, while the trend of financial relations as a result, is in the reverse direction, to care for the commercial operations." Mr. Hardie also quotes freight rates from eastern manufacturing points to different southwestern points, including Wichita, Oklahoma City and Dallas, showing an increasing scale as the city is located further south, and draws the conclusion that so long as the present freight rate sys- http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 3 tems are maintained, Southern Oklahoma will remain in closer touch, in a commercial way, with cities to the north and east. Mr. Hardie also calls attention to the fact that a large percentage of the railway mileage of Oklahoma leads into northeast gate-ways, such as Kansas City, St. Louis and Chicago, Kansas City being the principal gate-way for Oklahoma railroads. Mr. Hardie's statement is substantiated by a statement of Mr. J. W. Hutchins, Vice President and Manager of the Oklahoma Stockyards Company of Oklahoma City, in which he says his company has not been able to divert business from the north to Oklahoma City, but that its trend is from Texas and Southern Oklahoma north and east. Mr. Hutchins' statement is also submitted for your examination. Showing of Farm Loan Companies. A large factor in the development of any new state, such as Oklahoma, is the furnishing of farm loans to the farmers, through local agents representing non-resident investors. In this connection we call attention to a letter from Mr. Fred S. Gum, President of Gum Brothers Company, which company has praced a large number of farm loans in Oklahoma for eastern investors. Mr. Gum's letter gives a list of all the farm loan organizations operating in the state, and calls attention to the fact that only one of these companies has a head office in Dallas, Texas, and that the volume of business handled by this company would not exceed three or four per cent of the total investments made in Oklahoma through these companies. In this, as in other lines, the trend of business has been to the north and east. (b) Convenience in Doing Business. We contend that the phrase "Convenience in doing business" includes the idea as to the ease with which business may be transacted, as well as the question of mail facilities. The Federal Reserve act was framed with the primary -Purpose of providing an easy means of re-discounting commercial paper held by the banks, and it is expected that through these rediscounts the supply of currency will expand and contract to meet seasonal requirements. It follows, therefore, that the banks of Southern Oklahoma should be attached to that district in which long acquaintanceship has already placed the necessary credit information regarding these banks in the possession of the probable managers of the bank, and to which the business has always naturally flowed. The situation at present is such, owing to this acquaintanceship, that any good bank http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 4 in Southern Oklahoma will be granted a re-discount immediately upon application to its Kansas City correspondent; whereas, an application to a new bank to the south of Oklahoma would result in delay, in many cases, until an investigation could be made, and as these applications for rediscounts in the future will doubtless be made at times when prompt action is necessary, another reason is afforded why these banks should be attached to the Kansas City District. Mail Facilities. to the Organized Committee by presented The Brief Dallas showed that many Southern Oklahoma points were closer to Dallas than to Kansas City in mileage. We submit herewith data showing comparisons of train schedules from all county seats in the section you are asked to transfer to Kansas City and Dallas, compiled by Mr. Fay Thompson, Division Passenger Agent of the Rock Island lines in Oklahoma, from schedules in effect May 22, 1914. This data covers twenty-seven points, and an examination of it shows tha,t from twenty-five of these points trains leaving at 1:40 P. M., and later, reach Kansas City before 8:30 A. M. the next day; and from only three points is it necessary to leave in the morning in order to reach Kansas City the next morning, two of these points being in the extreme southeastern corner, and two in the far southwestern caner of the state. Inasmuch as overnight mail service is all that is necessary to meet the requirements, a shorter mileage in favor of Dallas to many of_tbese points is not material to the issue. We also submit letters from three of the largest cotton concerns located in Oklahoma, viz.; Harris-Irby Cotton Co., Anderson & Clayton Co., and Dodson & Williams, showing that they finance no Oklahoma cotton in Dallas. LOAN AND DISCOUNT FACILITIES. SECOND:—In the second place, Southern Oklahoma should be placed in the Kansas City District, because the figures show the Kansas City District will be better able to meet the re-discount requirementA of the Southern Oklahoma banks, than will the Dallas District. The Report of the Comptroller of the Currency for 1913, giving the figures on reports of condition from November 2E0 1912, to August 9, 1913, shows these figures as to re-discounts and bills payable of banks in the Kansas City District: Kansas, including all reserve cities, shows a decrease from $519,000 to $392,000 in the time mentioned (Pages 399-01.) http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 5 Nebraska, during the same time, decreased from $1,663,000 to $546,000. (Pages 415-417.) Missouri, including Kansas City and St. Joseph, a slight increase from $527,000 to $571,000. (Pages 411-13.) Colorado shows an increase from $393,000 to $455,000. (Pages 385-387.) Wyoming shows an increase from $53,000 to $81,500. (Page 447.) A tabulation of these figures shows a net decrease of $1,109,500. Heavy Dallas Re-Discounts. Turning now to the figures applying to the states in the Dallas District during the period above mentioned, the following increases are shown: Louisiana, outside of New Orleans, $998,000 to $2,460,000. (Page 403.) Texas, $3,330,700 to $17,509,600. (Pages 435-437-439.) New Mexico, $113,000 to $223,700. (Page 419.) Which figures tabulated show a net increase of $15,751,300. The Comptrollers Report shows that in the same period bills payable and re-discounts of Oklahoma banks, excluding Oklahoma City and Muskogee, increased from $998,000 to $1,690,000, a net increase of $692,000. (Page 427.) Transfer Would Help Both Districts. While we have been unable to secure information showing the division of these Oklahoma figures, as between the Northern and Southern Oklahoma banks, the situation in our state is such, that it is no doubt true that Southern Oklahoma banks had the largest portion of these accommodations. It will be noted from these figures, that the increase in re-discounts in Oklahoma could have been taken care of by the decrease in the Kansas City District, with $407,500 left over, while at the same time the net increase in the Dallas District was nearly twenty-three times the Oklahoma increase. This is a most cogent reason why the transfer should be made, it being understood that it was the primary purpose of the Organization Committee to make the districts self-sufficient in so far as it were pos- http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 6 Map of Oklahoma Showing Present Districting and Districting Requested by Banks • 17; 0 71,..7••••••••Torli• 1•47,1• • meg. MISS ll'"': 0...0 ..00.1 J'.••••• • .0.0 • ..64 . .1:". "' • •••••• f e•rery .10. l....... ••••, %Away T E X A S WPM • 1 : I. • .., MA H A R °Fr"" s'•••• s".•• . *CIMARRON •`." .1 , • 0 /G" r • •.; .., I. ' ....... •Ve •441.•••••• tgo.•••:7 A if 1.•••• "'" i 1.0• B EAV Won..• ER •0.8.0.4 . 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"...41 : 1"1" . ) '.1.•741 •••""0: , ' "' ( -10 00' E -1 4 - 777 ..... ........... . ,....... .r., ne100A -J1 200 0•101( ....t....il •••••••• ‘00,, 7.5•1 .n.i".1 ...,,... ,1 C 014 ,... *,,... ..,,... . •,..., .er:::,.. „...." i.••• I }-• • ' • ••• C•01,e, t. . i". -.7. .,,r----,. .- ,. . ,. . . ......;_---, A.1.T.s. • .......".". PH trt.......„,... r.....1 A.76:71 • • • •11 $••••••▪• • rt„ I .*" M U R ,s •••••••• • Pu •••••••• ••••••• •••••• TIMM. Ova_ • PA. 0, HMATAH A r- zeaseratioggru 1 .1 f.0.1 • ..... cow*. •.44 son, JF FFE R5 ON. ,,c.•CS •••stI1.:1.0.67. .,,,, ...., • •.r'." ..,Z,...7.,...‘ " , • 1""'0.Vdet f.. r.:',...17.. ...::.; •" . . S.,.1.1RTA I IN •••10, r" * • "'"" •,,„%,":7, •••••• Um. ••••• irvori A N • • 0••••••ie" 444`...• r tit tliti t.t (Pi. • •••••• 11 1•0112••••1 sos 4•4•4•4 ji 0' ;713' R 0.00; 0.1•••• 1 4•••* 47 . 0 --•-•-.,,,""/ 0rett• • •""• .-- •••• 01..GEE.1.• 15KEE • I IOW •••••• tow! S •mins to mom • ,..„,••• I r.,*) •KO. T A •1••• •71.7.1. • •••••••0 dri) - C 0.0.0 ••• , >' v L Kti U 51 IA.0.0 3 N E 3c.OL 1/ Cv0.0041 P A 00.• SHER cot • c40044 3H 4$ """"'--1'. "." - R0 1 RFI •••••••,,,. """*". ••••••••• DELAWARE\ ye*. N 0 B 11A,.E I ;.., ....-.N..r. ..„,,.... ...., • j 11•111. OS AGE •••••••• WAR D 100.. : : •••vot$,..k.• Gem. .10.4.4••••• 1•••••••• •16“.A.• http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis C 11 A 1 G / 1 This print is from a map of Oklahoma showing groups of the Oklahoma Bankers Association. The blue line shows present division of the state between reserve districts Nos. 10 and 11, (groups 1 and 5, and Hughes county, being the portion assigned to district No. 11). The red line shows the division asked in the petition. Reasons that the five counties be not transferred are fully set forth on page 1 of the petition. Five sixths of the national banks in the section asking to be transferred have signed the accompanying petition filed with the federal reserve board. -I •• 40. WO 1 75" I y DOMES 7141,4f •(t . ••... r.er •••••• I sible to do so, and one need not be a prophet in order to be able to say truthfully in which district re-discounts could be the easier made. Aother fact in connection with this matter is that the Louisiana and Texas demand for re-discounts comes earlier than the Oklahoma demand, and it is quite possible that Southern Oklahoma may need re-discounts at times only to find that Texas and Louisiana have already absorbed the supply, which occasions inquiry as to the ability of the Dallas Bank to take care of re-discounts in its district without having to call upon other districts for help. Comparative Loaning Resources. The 1913 Report of the Comptroller of Currency shows individual deposits in the Dallas district August 9, 1913, against which the required reserves are to be held in the Federal Reserve Bank, to have been as follows: Country Banks City Banks $98,872,800 $73,411,300 Texas Louisiana, Outside of New Orleans 13,606,900 12,826,500 New Mexico 20,857,200 Southern Oklahoma $146,163,400 $73,411,300 Total Reserve deposits required, 5% country banks...$ 7,308.170 4,404,678 Reserve deposits required, 6% city banks Capital Stock Dallas Bank $11,712,848 5,634,091 Less 35% Reserve Deposits $17,346,939 4,099,496 Loan Resources Re-discounts and bills payable $13,247,443 20,193,300 —$ 6,945,857 , on the outstanding this district in re-discounts With same date, of $20,193,300, it is apparent that it would require $6,915,857 to make up the deficiency. Turning now to the figures applying to the Kansas City District, the Comptroller's Report, of the same date, shows individual deposits as follows: http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 7 Country Banks City Banks Nebraska $47,925,100 $ 50,222,500 Wyoming 11,242,600 Colorado 31,237,200 47,166,700 Kansas 51,489,200 14,050,800 Missouri (Kansas City and St. Joseph) 83,811,600 Northern Oklahoma 26,071,500 11,429,600 $167,965,600 $206,681,200 Reserve deposits required, country banks 5%. $ 8,398,280 Reserve deposits required, city banks 6% 12,400,872 Total reserve deposits Capital Stock Kansas City Bank Less 35% Reserve against deposits $20,799,152 5,594,916 26,394,068 7,314,703 Loan Resources $19,079,365 Only $2,027,000 rediscounts and bills payable were outstanding in the Kansas City District on that date, leaving a balance available of $17,052,365, compared with a deficit of $6,945,857 in the Dallas Bank. How Proposed Change Would Benefit. These comparisons show conclusively that the re-discounts and bills payable of Oklahoma banks, which were (in the entire state) $1,690,000 on August 9, 1913, can be better taken care of in the Kansas City District than in the Dallas District. A compilation of re-discounts and bills payable on August 9, 1913, from the Comptroller's Report, shows that District 11, with $20,193,300 outstanding, is exceeded only by District 6, which includes Georgia, Alabama, Florida and and parts of Mississippi, Tennessee and Louisiana, this district showing $21,459,000 outstanding. On the other hand the Kansas City District, with only $2,027,000 re-discounts outstanding, was one of the districts showing the smallest amount of re-discount requirements on that date. It follows, also, that the transfer of Southern Oklahoma to the Kansas City District will help supply the investment needs of the Kansas City banks, as it is evident from the figures quoted above that the Kansas City bank http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 8 will need to look elsewhere than to re-discounts of its member banks to absorb its loan surplus. It is true that the act confers authority upon your Board to require one Federal Reserve Bank to re-discount for another; to which reply may be made that if you will transfer that part of Oklahoma asked to the Kansas City District you will never need to make such an order, so far as petitioners needs are concerned. It has probably been represented to the Organization Committee that Southern Oklahoma should be included in the Dallas District, inasmuch as it was The cotton growing section of the state. We call attention to this, inasmuch as it was stated at the Dallas organization meeting,"Oklahoma north of the Canadian River is a non-cotton growing section, while south of the river cotton is raised. They have put the cotton growing section of Oklahoma in with the Dallas district." If this be true, in our opinion, it affords the best of reasons for transferring Southern Oklahoma from the largest cotton growing reserve district in the system, to the district which includes cotton grown in Oklahoma only. Protests of Banks Practically Unanimous. Again, we believe the transfer should be made because it is the well nigh unanimous desire of the banks in the section represented by your petitioners that they be attached to the Kansas City District. Bankers in Southern Oklahoma have expressed themselves on their preference between Kansas City and Dallas most emphatically. Soon after the districting was announced and the general opposition to the lines as formed became apparent, W. B. Harrison, Secretary of the Oklahoma Bankers Association, sent to every bank in Oklahoma (State and National), located in District No. 11, a letter in which was enclosed one of the accompanying forms of protest to your Board. Each bank was requested to notify the Secretary if it was content with the districting, and if it was not so content to sign the protest and return it to him. A total of 325 replied, 309 protesting against the present arrangement, and asking that they be placed in the Kansas City District, and only 16 reporting that they are content with the present lines. The remaining forty have not been heard from. Many of those that did not reply are small banks that take no interest in any matter of this kind, and others are owned by or associated with Texas banks. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 9 But not only did 95% of the banks protest in writing on the form prescribed, but scores of them accompanied the form with letters expressing their great disappointment in this matter, and declaring their business relations outraged. The tenor of these letters, a number of which are attached hereto, demonstrates again that Kansas City is the natural financial center for our state, and that Dallas is practically unknown to them in such relations. Protest of Millers' Organization. That other business interests are against the present arrangement, is shown by resolution adopted by the Oklahoma Millers' Association, at its annual convention, May 20th, in which they say that the natural trend of trade in the grain business is between Kansas City and all parts of Oklahoma, and urge upon our Senators and Representatives in Congress the deep obligation resting upon them to see that a re-adjustment be effected, so that all Oklahoma shall be in the Kansas City District. This resolution is submitted for your inspection, as is also a resolution adopted by the Oklahoma Press Association, at its annual meeting held in Ardmore, a Southern Oklahoma city, asking that the whole state be placed in the Kansas City district. Transfer Would Not Injure Dallas Bank. A transfer of the Southern Oklahoma Banks to the Kansas City District, would still leave the Dallas Bank with a capitalization of 25,261,190, according to the figures of August 9, 1913, which show that the combined capital and surplus of those Oklahoma banks asking to be transferred to the Kansas City district, on the date mentioned was $6,217,413. Six per cent of this amount is $373,044, which deducted from the Dallas Bank's capitalization, as reported by the Organization Committee, would leave the capitalization above natned, which is over a million dollars, or 30% more than the minimum required capitalization specified in the act. Oklahoma Asks Only Fair Play. It is the belief of the bankers of Oklahoma, that the present division of the state will operate to hamper the upbuilding of the financial interests within the state, through the diversion from Oklahoma financial centers of bank business to which they are legitimately entitled, by reason of the fact that many bankers will feel compelled to open accounts in Dallas, other than with the Federal Reserve Bank. We Oklahoma bankers have asked nothing of the Organization Committee for the purpose of building up any http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 10 financial center, realizing that our cities are not located so as to entitle us to have an Oklahoma city designated as a Federal Reserve City, but we do ask that we be left alone to work out our own destiny, and placed in the district in which, if the plain intent of the Act is to be regarded, we should have been placed. Our people have gathered from the four corners of the Union, they are young, active, full of enthusiasm, and are not afraid of the outcome of commercial rivalry, if given an even start. For instance, Oklahoma City alone has 330 bank accounts from banks in Southern Oklahoma; Muskogee also has many, and so have other growing cities. The banks of one of these cities last year paid for Oklahoma cotton the sum of $10,342,902.99, and loaned to banks in Southern Oklahoma $875,304. Each year will see these and other Oklahoma cities take a larger share in financing Southern Oklahoma products, if by law the reserves are not forced southward. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 11 Summary. To sum up: We have shown that the flow of banking business from the section represented by your petitioners is to Kansas City and the present reserve cities of Oklahoma, which are north of the district line, and not to Dallas, by figures tabulated from original letters. That commercial business tends north and east, because of the freight situation (set forth in letter by Mr. Hardie) ; That Southern Oklahoma has overnight mail facilities on most of the railroad trunk lines leading into Kansas City gate-way; That acquaintanceship, gained through years of banking in the past, renders it easy for your petitioners to do business with Kansas City; Most important of all, that the re-discount needs of Southern Oklahoma can be met in District 10, without question, while there is grave doubt of their being met in District 11 ; And, finally, that it is the desire of the bankers in the section you are asked to change, by an overwhelming majority, to be transferred to District 10, so they may continue to let their business run in its natural channels. For which reasons we urge that your Honorable Board issue an order transferring Southern Oklahoma, except the counties of Marshall, Bryan, Choctaw, Pushmataha and McCurtain from District 11 to District 10. Respectfully submitted, FRANK CRAIG, President City National Bank, McAlester, Oklahoma. GUY C. ROBERTSON, Cashier First National Bank, Lawton, Oklahoma. W. B. HARRISON, Secretary Oklahoma Bankers' Association. Oklahoma City, Oklahoma. Committee. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 12 PETITIONERS. To THE FEDERAL RESERVE BOARD, WASHINGTON, D. C. GENTLEMEN: This bank, having been placed in District No. 11 of the Regional Reserve Banking System, declares its natural course of trade and financial communication violated, and urgently requests that the districts be so re-adjusted that it will be in District No. 10, with headquarters at Kansas City. (The original signature of each of the following banks to the above petition, signed by a duly authorized officer of the bank, is on file with the Federal Reserve Board. The same petition has been signed by 178 State Banks in the territory asking to be transferred, and the original signatures of these banks are likewise on file with the Federal Reserve Board but none of the State Bavks are included in the following list of petitioners.) Bank First National First National Addington First National Alex First National Allen City National Altus First National Anadarko National Bank Anadarko First National Apache National First Arapaho First National Ardmore State National Ardmore Ardmore National Ardmore American National Atoka First National Blair First National Blanchard Citizens National Calvin Citizens National Chickasha Chickasha National First National it Oklahoma National Clinton....Oklahoma St. National First National Comanche First National Cordell National Cordell State National IS Farmers National City First National Custer Ss 41 .• •Peoples St. National Davis • First National Duncan. .7 City National Duncan National Eldorado First National Elk City First National Gotebo First National Hartshorne First National astings Nat. Bk. of Hastings Heayener State National First National Hobart First National 411 City National Si F & M. National State National Holdenville American National .0 First National Hollis National Bk of Corn. State National Hydro Farmers National First National Keota Keota National Lawton —eity National Lawton National 41 First National Lindsay First National Lone Wolf First National Mangum First National Mangum National Town— http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Bank Marietta National First National State National Marlow ..National Bank of Marlow Farmers National Maysville First National American National McAlester City National First National First National Mill Creek First National Minco First National Mountain View First National Olustee Pauls Valley....Nat. Bank of Corn. " Pauls Valley National First National Poteau Union National Purcell National —.I....Chickasaw " First National Quinton National M. F & Roff Rush Springs First National First National Sayre ' ...Beckham County National Sentinel First National Snyder First National Spiro First National Stigler First National American National Stratford First National Stuart First National Sulphur Park National Temple Temple National Thomas First National Tishomingo Farmers National First National Verden First National di National Bank First National Wapanucka Washington First National First National Waurika Weatherford German National First National First National Wetumka IS American National Wilburton...Latimer Co. National Walters National Walters First National Total number of national banks in territory 128 Number asking to be transferred Two-thirds majority required .84 ir by rules National banks in territory not petitioning Town— Marietta t BEFORE TIIE FEDERAL RESERVE BOARD AT WASHINGTON. In the Matter of the PETITION TO TRANSFER.A PORTION OF SOUTHERN OKLAHOMA FROM FEDERAL RESERVE DISTRICT NUMBER ELEVEN TO FEDERAL RESERVE DISTRICT NUMBER TEN. ANSWER AND BRIEF OF RESPONDENT THE FEDERAL RESERVE BANK OF DALLAS. CHARLES C. HUFF, Counsel. 2 Main St., Dallas. Phone M. 4091. / W. M. Warlick, Law P., 8101 http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis CONTENTS Pages Special Exceptions to Petition 2-4 Formal Answer of Respondent 4-7 Remarks 7-10 Counter Propositions (a), (b), (c), (d), and (e) 11-12 Statement under Counter Propositions (a), (b), (c), (d) and (e) 12-17 Counter Propositions (a), (b), (c), (d), (e), (f), and (g) 17-19 Statement under Counter Propositions (a), (b), (c), (d), (e), (f) and (g) 19-28 Argument under Counter Propositions Submitted by Respondent and in Reply to Contentions made in Petitioners' Brief 28-56 Appendix 57-101 Exhibit A, 1 to 22, inclusive 59-73 Exhibit B, 1 to 2 73-74 Exhibit C, 1 to 14, inclusive 74-81 Exhibit D 82 Exhibit E 82-83 Exhibit F, 1 to 26, inclusive 84-97 Exhibit G 97-101 http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis BEFORE THE FEDERAL RESERVE BOARD T WASHINGTON. In the Matter of the PETITION TO TRANSFER A PORTION OF SOUTHERN OKLAHOMA FROM FEDERAL RESERVE DISTRICT NUMBER ELEVEN TO FEDERAL RESERVE DISTRICT NUMBER TEN. ANSWER AND BRIEF OF RESPONDENT THE FEDERAL RESERVE BANK OF DALLAS. To the Honorable Federal Reserve Board: The petition filed herein seems to be a joint petition and brief, and does not appear to be in conformity with the regulations of the Federal Reserve Board with reference to petition and supporting brief. In replying thereto, this Bank, which will be referred to herein as respondent, will, therefore, file its answer to the petition, and in support of its answer, follow with its brief answering the petition of the Committee and supporting the answer so made by it. Now comes The Federal Reserve Bank, of Dallas, Texas, respondent, and, answering the petition filed with your Honorable Body, purporting to be on behalf of "Certain Banks in Southern Oklahoma" and asking http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 2 the Board to change the lines of Federal Reserve District No. 10 and Federal Reserve District No. 11, so that all of Oklahoma except the Counties of Marshall, Bryan, Choctaw, Pushmataha and McCurtain will be in District No. 10, says: Respondent specially excepts to the petition so filed by three parties, to-wit, Frank Craig, President of the City National Bank, of McAlester, Oklahoma; Guy C. Robertson, Cashier of the First National Bank, of Lawton, Oklahoma, and W. B. Harrison, Secretary of the Oklahoma Bankers' Association, of Oklahoma City, Oklahoma, purporting to act as a committee for certain banks in Southern Oklahoma, for the following reasons, viz.: (a) The said petition is not executed in the manner and form prescribed by said Federal Reserve Board, governing the procedure in appeals from the decision of the Reserve Bank Organization Committee, in that the same is not signed by two-thirds of all the member banks in the territory sought to be transferred, but is in fact signed by three individuals, acting in their individual capacity as a committee. (b) The memorandum appearing on the final page of said petition, purporting to be a copy of a petition alleged to have been signed by certain banks in Southern Oklahoma, is not a fair or true representation of what is in fact, on file with said Federal Reserve Board, but same is an attempted consolidation by said committee, of certain slips or memoranda of protest claimed by said committee to have been executed by certain banks immediately following the announcement http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 3 of the district lines by the Federal Reserve Organization Committee, which action, if any, upon the part of said banks, was long prior to the filing of the petition herein by said committee, and it nowhere appears in said petition that said banks, for which this committee claims to be acting, filed this petition for transfer or authorized their names to be used in connection therewith, or authorized this committee to refer to any previous action taken by them as a basis of seeking to show that they were joining in this contest. (c) At the time the petition signed by Frank Craig, of McAlester, Oklahoma; Guy C. Robertson, of Lawton, Oklahoma, and W. B. Harrison, of Oklahoma City, Oklahoma, was filed by them, it does not appear that a majority of the banks listed by them as petitioners had knowledge that their names were being used as petitioning banks asking for a transfer, or that said banks were informed or had knowledge that any prior protest or action upon their part was being used, and urged as a basis upon which to insist, that they were petitioning a transfer from the Eleventh District to the Tenth District. (d) That the petition so filed, which this respondent is called upon to answer, is replete with references to letters, statements and data, which said committee filing said petition state are being filed with said petition, and called to the attention of the Federal Reserve Board, and this respondent here says that so much of said petition as refers to said letters, statements and data mentioned in said petition, should be stricken out, and that said letters, statements and data mentioned in said petition should be stricken from the record herein, http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 4 for the reason that said petition and the additional testimony referred to therein, to-wit: the letters, statements and data, constitute new testimony introduced on this hearing for the first time and not adduced before the Organization Committee, and, therefore, cannot be considered under the regulations of this Board governing appeals from the decision of the Reserve Bank Organization Committee. II For further answer to said petition and in support of the exceptions set out in paragraph one above, this respondent says that the petition filed by said committee did not, at the time of its filing, and does not now, correctly represent the real wishes and sentiments of the officers of a large number of the member banks listed in said petition on the final page thereof as petitioning banks, many of whom, subsequent to the filing of said memoranda of protest with the Reserve Board, immediately after the announcement of the district lines by the Federal Reserve Organization Committee and previous to and subsequent to the filing of said committee's petition, after they had taken time to thoroughly consider the Organization Committee's action and their own best interests, have expressed themselves both in writing and verbally, to the effect that they are satified with the lines established, and that no action should be taken at this time looking to a transfer of any portion of the territory from the Eleventh District to the Tenth District, and this respondent believes, and upon such information and belief alleges, that resort was made by said committee to said claimed memoranda of protest for a compliance with the rules established by this Board, 5 requiring the signature of two-thirds of the member banks in the territory sought to be transferred only, because said committee feared that they could not, at that time, have secured the necessary signatures of twothirds of the member banks in the territory sought to be transferred, as required by the regulations of this Board in this character of proceeding. In support of the allegations in this paragraph contained, and as illustrative of our position on the exceptions contained in paragraph one above, reference is here made to copies of letters from officers of certain member banks listed in said purported petition as petitioning banks found in the appendix to this brief and marked Exhibit A, numbered 1 to 22 inclusive, to which letters the considerate attention of the Board is requested. III For further special answer herein, respondent states that it is well known that, at the time the protest slips were signed by some of the member banks, many of the banks executing them were influenced in so doing by an appeal to their State pride and were opposed to the action of the Organization Committee in the establishment of the lines solely because the State of Oklahoma was being divided and the Northern portion of said State placed in the Tenth District and the Southern portion of said State placed in the Eleventh District, and that said committee filing the petition herein, has segregated certain counties with a view of leaving them in the Eleventh District and that this Board cannot assume that the lines fixed by the committee of three would meet the wishes of the member banks, if said banks were http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 6 executing the petition themselves, as they would be required to do under the rules of this board if they were in fact asking for a change of Federal Reserve District lines. IV For further special answer, respondent says that the activity for a transfer of territory from the Eleventh District, to the Tenth District, arose outside of the territory sought to be transferred, and that whatever action in the way of protest that was made by member banks within the territory sought by said petition to be transferred was taken upon the invitation and request of parties residing outside of the territory sought by said petition to be transferred, and this respondent here suggests that such outside action was inspired by a laudable ambition upon the part of certain parties non-resident of the territory sought to be transferred, to so arrange the district lines as that the thriving, prosperous and progressive city of Oklahoma City, Oklahoma, might stand a chance to be considered favorably as a location for a branch bank of the Kansas City Reserve Bank. In support of the suggestion herein made, reference is here made to copies of two letters sent out from Oklahoma City, Oklahoma, on April 7 and 13, respectively, found in the appendix and marked Exhibit B, numbered 1 and 2. V For further answer, respondent says that there is no widespread dissatisfaction among the banks of Southern Oklahoma to the location of the present lines of the Tenth and Eleventh Districts, as would appear from the statements in the petition filed herein, and as indicative of this fact, reference is here made to copies of letters from banks in Southern Oklahoma, addressed to the Federal Reserve Board, and to officers and member banks of the Federal Reserve Bank of Dallas, copies of which letters are to be found in the Appendix, marked Exhibit C, numbered 1 to 14, inclusive. REMARKS. Federal Reserve Board, governthe by 1, Regulation ing procedure in appeals from the decision of the Federal Reserve Organization Committee, provides, among other things, as follows: "Petition 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 be taken out of one district and annexed to another." Is the petition herein in conformity with this regulation? The parties who filed this petition do not claim that the member banks for whose benefit it was supposed to be filed, ever saw it, signed it, or authorized any one else to sign it for them, or even had an opportunity to sign same. In order to show a semblance of compliance with the regulation of this Board, the committee so filing the petition refers to protest slips claimed to have been filed by certain banks in the territory sought to be transferred. There is no claim made that the member banks designated as petitioning banks authorized this committee to include them as petitioning banks on account of some prior protest. These protests, if made, were made before the organization of this respondent, and at a time when the protesting banks had no means of http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 8 determining whether they could obtain satisfactory service from the Dallas Bank or not, and such protests as were made were made,. not upon the initiative of member banks, but in response to the invitation of parties outside of the territory sought to be transferred. These protests, when made, were made largely in response to State pride and were made largely because the State of Oklahoma was being divided. After the Eleventh District had elected as one of its Directors a man from Southern Oklahoma, who was familiar with the wants and needs of that territory, and after this respondent was organized and began business, it nowhere appears that any member bank in Southern Oklahoma protested at being included in the Eleventh District, or that any number of member banks in this territory then availed themselves of the opportunity afforded them by this Board, of filing a petition to be transferred to the Tenth District. We submit to this Board that there is no petition prepared, signed and filed by two-thirds of the member banks in the territory sought by this purported petition to be transferred from respondent's district to the Tenth District, as required by your regulations, and that this question is fundamentally jurisdictional, and that, therefore, this Board should sustain respondent's exceptions contained in paragraph one of its answer and that this proceeding should here now be dismissed. Regulation No. 1, promulgated by this Board for guidance in proceedings of this character, among other things, provides: "The Board will not hear testimony, but the parties will be limited to the record before the Organization Committee." 9 The purported petition filed herein nowhere refers to the record made before the Organization Committee, but said petition is based solely upon letters, statistics and testimony which the petitioning committee says it was filing with this Board at the same time it filed the petition. This respondent earnestly urges and insists that it should not be called upon to answer new matter and testimony filed with the Board in support of the purported petition, and which this respondent has never seen and has no way of seeing, and which was not a part of the record made by the Organization Committee, and respectfully insists that its special exception (d), found in paragraph one above, should be in all things sustained, and that said letters, statistics and data so referred to in said petition, constitute new testimony, not adduced before the Organization Committee and should not be heard or considered by this Board, and that such new matter and additional testimony should be purged from the record herein and that its exceptions should be sustained to such portions of the petition as are based upon or refer to such new and additional testimony. In connection with the exceptions in paragraph one above, the Board's consideration is also asked of the special answer of respondent, contained in paragraph two, and particularly to the letters therein referred to, copies of which can be found in the Appendix. Respondent has made no special effort to obtain an expression from the member banks listed in said petition as petitioning banks, but believing that a great number of said banks have not authorized the use of their names in connection with this proceeding and believing that a great number http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 10 of said banks so mentioned in this petition as petitioning banks were in fact satisfied and content to remain as member banks of this district, respondent asked an expression from a few of the banks best known to it, with the result that each bank so inquired of has answered that it was making no effort to have territory taken from respondent's district and placed in the Kansas City district, and that it was satisfied with the district lines as established by the Organization Committee, and that they did not feel like any effort should be made to change the lines of the district until a fair test had been given the action of the Organization Committee, the letters made use of herein being irrefutable proof of the contention of this respondent that the purported petition was not in fact the petition of the banks listed in said petition as petitioning banks. It is here respectfully suggested that the use of these letters by respondent cannot be considered as the introduction of new testimony, but should necessarily be considered in support of its jurisdictional objection and as going to the good faith of the purported petition which it is here required to answer. REPLY TO THE CONTENTIONS MADE IN THE PETITION AND BRIEF FILED BY THE COMMITTEE. If this Board should fail to sustain our contentions above, and should decide to consider the petition filed by the committee, then this respondent requests that it be permitted to further answer to the merits of said petition. 11 The petition states that the transfer of territory should be made: "First—Because the present districting is not in accordance with the spirit of the law which provides, in Section 2, 'the districts shall be apportioned with due regard to the convenience and customary course of business.'" In reply to the first contention of petitioners, the following propositions are respectfully submitted: (a) In establishing the present district lines, due regard was given by the Organization Committee to the same question here presented by petitioners, and the present lines were established, because it was evident that the greatest volume of commerce from Southern Oklahoma was southward and to the Gulf. (b) The large volume of commerce from Southern Oklahoma being to the southward and through Texas, no violence was done in placing Southern Oklahoma in the Eleventh District, with its Bank at Dallas, Texas. (c) The principal crops and products of Southern Oklahoma being identical with Texas products and crops, the Dallas Bank can understand and care for the wants and necessities of Southern Oklahoma much better than the Kansas City Bank or any other Bank. (d) The Organization Committee having taken much time and painstaking care in the establishment of the present district lines, and it being apparent that it was an absolute impossibility for any committee to so district the United States as that its action would meet with the entire approval of all persons, both within and without each respective district, the action of said committee should be given full faith and credit, and no http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 12 change should be made in the present district lines of the Tenth and Eleventh Districts until a reasonable time has passed and the action of the Committee has been given a full and fair test, to the end that the Federal Board could then determine whether or not any error had been made by the inclusion of any territory within a given district. (e) All of Southern Oklahoma being nearer Dallas than Kansas City, it was not only proper but necessary that it be included in the Eleventh District, and the fact that possibly a majority of its banks had heretofore done considerable business with Kansas City banks, furnishes no reason why the action of the Organization Committee should be overruled and that territory, situated almost at the door of the Dallas Reserve Bank, should be transferred to a bank situated hundreds of miles away. STATEMENT UNDER THE ABOVE PROPOSITIONS. The petition, under subdivision headed "Course of Business," refers to data which petitioners state was being filed with this Board, and inasmuch as such data is not accessible to respondent, it will be impossible for it to reply fully to the new matter and testimony which it has never seen and which it has no opportunity of seeing. In addition to the record of the Organization Committee, respondent, solely for the purpose of answering the new matter and testimony filed by petitioners, and without waiving its objection to a consideration by the Board of such new testimony, also will use and refer to some additional letters and statements not found in the 13 record of the Organization Committee, copies of which will be found in the Appendix to this brief. Particular reference is here made to the maps found on pages 108, 109, 110 and 111 of the copy of the record filed by the Organization Committee with the Senate of the United States, the date of the letter transmitting such record being May 18, 1914. On page 115 of said Senate Record will be found the following: "Signed statements from the Dallas jobbers show that they sell to 28,280 merchants in Oklahoma, 3,151 merchants in New Mexico, 5,698 merchants in Arkansas and 7,222 merchants in Louisiana." On page 116 the following: "The map attached will show that all of the territory claimed in Oklahoma, Arkansas and Louisiana, is within 15 hours by rail from Dallas. That every portion of the territory can be reached from Dallas in less time than from St. Louis. With the exception of a small portion of northern Oklahoma, north of the Canadian River, it can be reached from Dallas by rail in shorter time than from Kansas City. The only portion of the territory that can be reached from Denver in a shorter time than from Dallas is the northern half of New Mexico, and a small portion of the Panhandle of Texas. Less than 5 per cent of the population in the territory, exclusive of Texas, can be reached more quickly from Kansas City or St. Louis, than from Dallas. Eight hundred and ninety-three of the 943 National banks are nearer Dallas than they are Kansas City, St. Louis, Denver or New Orleans. One thousand, seven hundred and sixty-one of the 1,816 State banks are nearer Dallas than any other of the cities mentioned." http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 14 On pages 117 and 118 the following: "It is a region in every sense, express and implied, in which that word is used under the law. Including the relatively small territory outside of Texas, which has for its convenience been put with Texas, and which can with most advantage to it be best served from a Texas bank, the region contains or produces approximately: "One-sixth of the area of the United States (such area is large enough for a district, while, if added to the other territory claimed by St. Louis, the enlarged district would embrace approximately one-third of the total area of the United States). "One-twelfth of the population of the United States (the increase during the last decade being 39 per cent). "One-eighth of the National banks of the United States. "One-tenth of the State banks of the United States (the number of total banks increased in the last 14 years 454 per cent). "One-seventh of the total farm production of the United States ($1,000,128,597). "Two-fifths of cotton production of the United States ($381,132,400). "Four-ninths of total cotton-seed production of the United States ($54,785,550). "One-tenth of live-stock production ($205,224,132). "One-half of cotton exports ($253,020,000). "One-eighth of the total exports of the United States. "With the exception of some territory in the extreme western and southern portions of the district, and a small area in southwestern Louisiana, every point in the district is within 12 hours' mail service of Dallas, and those remote portions of the territory are within closer mail service to Texas cities than any other city which has been under consideration as a location for a regional bank." 15 On page 118 the following: "For eight months in every year a regional bank in this district would have money to loan; for 12 months in an ordinary year it could take care of its own member banks and have money left. During the exceptional year (1913) just passed, it could, at the peak of its advances to member banks, have financed itself. If, however, under extraordinary stress, it should need to re-discount the receivables of member banks to a small extent with other regional banks, or to issue emergency currency, it would simply be making use of these features of elasticity which have been advertised as among the chief excellencies of the new banking law. "If the Texas regional bank should be a lender bank 8 months out of every year, and 12 months out of an ordinary year, why should it not every 4 months, during an occasional extraordinary year, be a borrower or noteissuing bank?' William Mee, President of the Oklahoma City Clearinghouse Association, testifying before the Organization Committee at Kansas City, said that the Oklahoma banks did business largely with Kansas City banks, and then added: "The cotton interests are divided to the East almost altogether, New York and Boston, very largely" (p. 1919, typewritten copy of Testimony taken by the Organization Committee). P. C. Bings, of the Guarantee State Bank of Ardmore, Oklahoma, testified before the Organization Committee at Kansas City, that he was there as a committee representing the southern part of Oklahoma for the Oklahoma Bankers' Association, and, while so testifying, he was interrogated by the Secretary of the Treasury, and answered as follows: http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 16 "The Secretary of the Treasury: If you did not have it at Kansas City, where would you then prefer it? "Mr. Bings: As I say, it does not make any difference to me as long as we have a branch bank in our own State. "The Secretary of Agriculture: You are pretty near Ft. Worth and Dallas. You do not want to be connected with a bank at any place in Texas? "Mr. Bings: I am afraid that neither Ft. Worth nor Dallas will get a regional bank, hence we would have to go further south, to New Orleans. "The Secretary of Agriculture: Suppose one were at Dallas? "Mr. Bings: That would be our second choice. "The Secretary of the Treasury: It would be? "Mr. Bings: Yes, sir, from the fact that three months in the year there is the cotton season and 60 per cent of our business goes south of Ft. Worth, Dallas or Houston" (pp. 1998 and 1999, Transcript of Testimony taken by the Organization Committee). Sam I. Hynds & Company, cotton merchants, and members of the New Orleans Cotton Exchange, in a letter to B. A. McKinney, a Director of respondent, made the statement that practically all of the cotton produced in Oklahoma, sold for export and to New England mills, passes through Texas ports or New Orleans, and, further, that farmers and merchants who ship cotton on consignment forward same to Houston, Galveston or New Orleans. In other words, almost the entire Oklahoma cotton crop is shipped by way of the Gulf. See letter in Appendix, marked Exhibit D. Frank Kell, the principal owner of the Wichita Mill & Elevator Company, and the Oklahoma City Mill & Elevator Company, the largest mill operator and grain 17 dealer in the Southwest, in a letter to B. A. McKinney, a Director of this respondent, shows that practically 90% of the grain, such as wheat, oats and corn, raised in Southern Oklahoma, moves southward and is consumed in Texas and Louisiana or moves out through Texas Gulf ports. See letter marked Exhibit E in Appendix. Particular attention is called to the trend of questions asked by the Secretary of the Treasury at the hearings in Kansas City and Austin, which indicates that the matters made the basis of this first complaint in the petition were being duly considered by the Organization Committee. The second proposition advanced by petitioners, headed "Loan and Discount Facilities," is as follows: "Second—In the second place, Southern Oklahoma should be placed in the Kansas City District, because the figures show the Kansas City District will be better able to meet the re-discount requirements of the Southern Oklahoma banks, than will the Dallas District." In support of this proposition, petitioners use data and new testimony not contained in the record of the Organization Committee, a great part of which is not fully shown in the petition. In reply to the second contention so made by petitioners, respondent respectfully submits counter-propositions as follows: (a) The reports of the Dallas Reserve Bank, made to this Board, and of which this Board is fully apprised, show conclusively that the petitioners' fears are unfounded and that the Dallas Reserve Bank is able to furnish http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 18 proper and adequate discount facilities to all of its member banks, including the banks in Southern Oklahoma, and that the Southern Oklahoma banks have already begun to use the Dallas Reserve Bank as a medium of discount, and that of the discounts made by the Dallas Reserve Bank, 25% of the amount was for Southern Oklahoma banks. (b) The showing of petitioners under their second proposition proves only and conclusively that the banks in the Eleventh District in Texas and Louisiana are thoroughly cognizant of the needs of their territory, and furnish readily and fully the necessary funds with which to move the products and crops of their territory, and that, when necessary, they will borrow sufficient money for this purpose. (c) The Federal Reserve Act was purposely designed to take care of just the contingency suspected by the petitioners to arise, but which has not been shown by the petitioners to have arisen; and if such a contingency should arise, adequate provision therefor is made in the Act without the necessity of changes in district lines. (d) The petitioners wholly fail to show any condition of inability upon the part of the Dallas Reserve Bank to properly care for the needs and necessities of the Southern Oklahoma banks, and until such a condition is shown, there can certainly be no reason or cause justifying a reversal of the judgment of the Organization Committee in establishing the present district lines. (e) Neither the present district lines nor the terms of,the Federal Reserve Act prevents any member bank in Southern Oklahoma from carrying an account with any other bank in Kansas City or elsewhere, and the in- 19 elusion of Southern Oklahoma in the Eleventh District. does not deprive any member bank of its right or privilege of carrying an account with Kansas City banks, if it desires. (f) According to the terms of the Federal Reserve Act, it is impossible for the reserve banks to reach their full measure of strength and usefulness for a period of three years from the date of the opening of the banks, and until such a length of time has elapsed in which to permit the reserve banks to in a measure reach the maximum of their strength and efficiency, certainly no action should be taken by this Board changing the present lines of Districts Ten and Eleven, because at this time the banks have not been in operation a sufficient length of time to enable the Board to correctly determine whether the judgment of the Organization Committee in establishing the present lines was erroneous. (g) The very purpose of the Federal Reserve Act was to furnish stability to our financial system and to change some former methods in the banking world, and to prevent a repetition of the disastrous conditions which have befallen this country in the past, and which were believed by the framers of the Act to have been occasioned in a large measure by customs and methods heretofore pursued, and certainly no just criticism can be made of the acts of the Organization Committee in establishing the present district lines, when it is said, as it is said in the petition, that such action in a measure changed banking customs heretofore prevailing. STATEMENT UNDER PROPOSITIONS (a) to (g), INCLUSIVE. See former Statement hereinbefore set out. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 20 On page 118, Senate Record, will be found the following: "The unassailable fact is—St. Louis and Kansas City will not dispute it—that when Texas needs money to move its crops, its banks can not borrow money in any considerable quantities in either St. Louis or Kansas City, and must go to Chicago or to the Atlantic seaboard. Balances are kept in St. Louis now, not in order to secure loans there in time of need, nor because trade sets that way, but in order to secure exchange facilities and provide means for making collections at par. "The re-discounts and bills payable in the district Texas has defined, were $23,000,000 at the peak of the heaviest demand of 1913. How much duplication or pyramiding was in this sum it is not easy to say; but, as shown in the Dallas Book of Facts, more than threefifths of the amount could have been absorbed by the reduction in the percentages of reserve which are provided for under the law. The National banks in the territory would have had $15,000,000 more of loanable funds at that time, if the present law had then been in force, leaving only $8,000,000 to be taken care of by the regional bank. Its available funds for that purpose would have been far in excess of these demands. "If the new law is simply going to provide new machinery (perhaps more complex than the old) for doing what is already being well done under the existing banking system, its importance and efficiency has been vastly exaggerated. We do not believe it is so limited in function. We think it was intended to provide elasticity and a means for equalizing seasonal inequalities, to relieve strain where strain has been great under the old system. It is, however, going to be a handicap instead of an advantage, if its effect will be normally to restrict Texas banks or banks in any other single district, to their regional bank and affect their open market connections. If it is going to be thought 21 a crime, or even bad banking, for one regional bank to use the surplus funds of another at one season, and to render the same service to another bank at another season, the law will prove to be absurdly inadequate. "Moreover, why should it be thought inevitable that the member banks will deal only with the regional bank when wanting to borrow money? No one doubts that banks which now have resources beyond their local needs will continue to lend that money to other banks to meet seasonable requirements. If the new law is to create in the Government a monopoly of the business of loaning money to National banks to meet their seasonable requirements, it has not been so advertised. Member banks will, of course, maintain their legal reserve with the regional banks, but they will deposit as in the past surplus funds with other banks, receiving interest on daily balances and having constant transactions in the borrowing and loaning of money as heretofore." On page 120, the following: "Southern Oklahoma is identified with Texas in every way. Texas people settled it up; Texas buys its cotton; her cattle graze its ranges; Texas buys its stock, its gas, its oil and its lumber. Northern Oklahoma is divided, a part preferring Kansas City, a part preferring St. Louis. Texas is closer to it, however, in every way, and can serve it better than any other State. "No doubt there are many people in Louisiana, Southwestern Arkansas and Oklahoma, who would prefer not to be put in the District with Texas cities. There are many, however, who favor the Texas district. Some violence must be done, for manifestly this committee can not please those holding such opposing views. The nearest possible reconcilement—if the endeavor is to be made to please everybody—would be, to put Southern Oklahoma with the Texas district and Northern Okla- http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 22 homa with the St. Louis district, assuming, of course, that no bank is to be put at Kansas City." On page 112, the following: "Nine trunk-line railroads radiating in 27 different directions, with 91 daily passenger trains: Chicago, Rock Island & Gulf Railway; Gulf, Colorado & Santa Fe Railway; St. Louis, San Francisco & Texas Railway; Houston & Texas Central Railroad; Missouri, Kansas & Texas Railway of Texas; St. Louis Southwestern Railway of Texas; Texas & New Orleans Railroad; Trinity & Brazos Valley Railway; Texas & Pacific Railway. "Five electric interurban railroads radiating in seven different directions, with 156 daily trains, handling 4,000,000 passengers annually: Northern Texas Traction Co., Southern Traction Co., Texas Traction Co., Eastern Traction Co., Dallas-Corsicana Traction Co. "Dallas has headquarters and general offices for the Southwest, of the Western Union, Postal, and Mackay Telegraph Cos., with 262 circuits, handling 18,497,300 telegrams per year. Dallas ranks sixth in the United States in total volume of business. "Dallas has headquarters and general offices for the Southwest of the Southwestern Telephone (Bell) Co., with 159 toll circuits, originating 554,000 long-distance calls per year, increasing at the rate of 50,000 calls per year; 2,924 toll stations operated from Dallas as headquarters; 643 towns served from Dallas on 50-cent rate, 169 on 25-cent rate. Fifteen and nine-tenths per cent of all the telephones in Texas are in Dallas. "Dallas has the largest telephone development per capita of any city in the United States. "All express companies operating in the territory have headquarters at Dallas. "Only six cities in the United States have a larger volume of express business than Dallas. "Dallas has more express business per capita than any city in the United States. 23 "Dallas has 176 mail receipts and 137 mail dispatches daily. "Dallas has 111 daily exchanges of mail pouches direct with towns in Texas. Dallas has 65 daily mail dispatches to railway post offices. Dallas has 80 daily receipts of pouches direct to Dallas from other Texas cities. Dallas has 57 mail receipts daily from railway postoffice lines, exclusive of the 80 direct receipts from Texas. In reaching territory outside of Texas, Dallas has 57 receipts of mail and 65 dispatches of mail daily. "While Dallas is the fifty-fourth city in size, its postal receipts are thirty-third in volume, and as much as any two cities in the territory combined." On page 123, the following: "M. H. Wolfe has furnished the following cotton statistics: "Cotton area of all the South, 892,072 square miles. "Cotton area in 12 hours' ride of Dallas, 437,794 square miles, or 49 per cent. "Total cotton produced in South last year, 14,101,000 bales. "Cotton produced in 12 hours' ride of Dallas, 6,1 2 per cent. 857,000 bales, or 48/ "Texas produced last year 4,902,000 bales. "Oklahoma produced last year 1,057,000 bales. "Arkansas produced south of the Arkansas River 505,000 bales. "Louisiana produced 393,000 bales. "Dallas cotton buyers bought last year 1,459,000 bales. "Dallas cotton buyers have salaried men covering all sections of Texas, Oklahoma, Arkansas and Louisiana, and paid out for cotton last year approximately $92,000,000, and approximately $80,000,000 of this cotton was financed directly or indirectly by the Dallas banks." At the hearing before the Organization Committee in http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 24 Austin, Texas, on February 9, 1914, Thomas H. Ball, of Houston, testified before the Organization Committee, and while he was testifying, the following interrogatories and answers were given: "The Secretary of the Treasury: Suppose New Orleans made exactly the same argument you are making, that she did not want to be attached as a vassal to Texas, what is this Committee to do? There are various sections of the country that are arguing that they ought not to be attached to anything, they must be kept off by themselves, they do not want a re-united country on the financial question; and so, if that argument is good here, it is good in other sections of the country we have visited, so we are bound to consider this question from the economic standpoint, having relation to all these parts of the whole, and that is the only way we can consider it. "Mr. Ball. Yes, and I do not expect you to do it any other way. And if New Orleans puts up that kind of an argument, she is at perfect liberty to do so, and I will not resent it; and I do not resent these people coming in from St. Louis and trying to make representations, and do the best they could to get us in with them. "After all, the responsibility will come back to you gentlemen who are charged with it, and you will give such attention to our representations and views and figures as you think they are worthy of. And though you slay us, we will still serve this administration. We gave up the tariff on our raw material, against the judgment of a great many without a murmur, and we are trying to do what is right, and we want to help you in your great task; but we certainly think, with a State of this magnitude, and this showing, which must appeal to you as reflecting some degree of credit upon our people and their resources, we do feel very deeply in earnest about this matter, and we think that, with 25 the Pacific Coast, conceding it to San Francisco—I do not want to be in the attitude of hostility towards St. Louis, and I had her on the list of the eleven cities that I thought ought to be given regional reserve banks, but I do think that Texas, with her position, her great geographical area, her tremendous resources, the manner in which she is forging to the front in every line, and the confidence of her own people, that she can take care of the situation; that these points which have been suggested by our committee and by the Dallas committee, will not be any more bitterly opposed certainly to being attached to Texas, than Texas will be to being attached to these other points, and I was just suggesting that because while we are amiable, we want to do all we can; we want you to consider as far as you can consistently with your enormous responsibility, the desires and wishes of this great State of ours. "The Secretary of the Treasury: That is what we came here for, to get your views, and we are going to give fair consideration to every argument that has been presented. But I should like to say just this in answer to your remarks, that though we slay you, you will still be loyal to the administration, Colonel— "Mr. Ball: Well, I mean the Government. "The Secretary of the Treasury: I want to say that in that connection, of course I assume you are speaking facetiously,. but somebody may not understand you, and therefore I do wish to say, that it is impossible, of course, in the laying out of these districts as required by law, to slay any section of this country, or injure any section, whatever these districts may be. This new system is bound to be more beneficial than what you have got today, so that while the desire of every local community will be impossible to meet, and if we allowed every community to lay out its own district, we would never get the country divided into these districts; the purpose of the committee in having these hearings through- http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 26 out the country has been solely to give the people of this country the largest and amplest opportunity to present the views as they see them for our consideration; and we are going to give those views fair and impartial consideration and our decision will be rendered from that standpoint, and no other. "Mr. Ball: We know that, Mr. Secretary." Mr. W. W. Collier, Commissioner of Banking and Insurance of the State of Texas, testified before the Organization Committee at the hearing at Austin, Texas, on February 9, 1914, and, while testifying, the following interrogatories and answers were given: "rue Secretary of the Treasury: We should like some information as to that, and also whether State banks, under your law, are entitled to become members in this system. "Mr. Collier: Yes, sir, there is nothing in our law to prevent them becoming members. "The Secretary of the Treasury: Is there anything that authorizes them? Are they permitted to own stock? "Mr. Collier: Yes. Under the statutory provision they can own not in excess of 10 per cent of the capital stock of the corporation in which they are investing. "The Secretary of the Treasury: You mean 10 per cent of their own capital? "Mr. Collier: No. 10 per cent of the corporation in which they are investing. "The Secretary of the Treasury: That would seem to give them ample power. "Mr. Collier: There are 849 State banks in Texas, with a total capital, surplus and profits of $44,645,000. I will omit the odd figures. They have total deposits of $96,000,000 and total resources of $149,000,000. 27 "The Secretary of Agriculture: What has been the growth in the last five years? "Mr. Collier: The growth of the banks during the fiscal year 1912-1913, there were 111 new charters granted, with aggregate capital of $3,358,500. The growth of the deposits from the time the State Bank Law went into effect in 1906, was $8,000,000; 1907, $19,000,000; 1908, $22,000,000; 1909, $39,000,000; 1910, $48,000,000; 1911, $58,000,000; 1912, $71,000,000; 1913, $96,000,000. "The Secretary of Agriculture: That is the growth in the last seven years? "Mr. Collier: That is the growth since the system was established. "The Secretary of the Treasury: How many are eligible under the Federal Reserve Act? "Mr. Collier: 377, with an aggregate capital and surplus of $31,857,500. "The Secretary of Agriculture: And deposits? "Mr. Collier: I did not give the deposits, because I was not called on until this morning for this data, and did not have time to prepare that, but it is fair to assume that the deposits of those would be about $60,000,000. "The Secretary of the Treasury: Have you any indication from these banks as to their purpose with regard to the Federal Reserve Act? "Mr. Collier: I will say this, Mr. Secretary, I have had, I suppose, inquiries from almost every one, and the attitude of the Department of Banking in Texas is to encourage them to become members. "The Secretary of the Treasury: Are they showing a disposition to come into the Federal Reserve system? "Mr. Collier: I believe it is fair to assume that more of them would become members if a Federal Reserve Bank is located in Texas, than they would if it was located otherwise. "There is one point I want to touch on, if you will pardon me. That is, it has been suggested that having http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 28 a Reserve Bank located in Texas, where it was entirely a borrowing country, would not be advantageous or wise. I want to say that if the banks used their reserves, they would always be able to take care of themselves. At the date of the last call, our State banks in Texas only had four and one-half million dollars borrowed, and had in Eastern Exchange over $14,000,000." ARGU MENT. Petitioners state, on the first page of their petition, their reasons for omitting the Counties of Bryan, Choctaw, Marshall, McCurtain and Pushmataha from their application to transfer certain territory in Southern Oklahoma from the Eleventh District to the Tenth District. Their reasons, as stated, may be correct, but a very sufficient and potent reason will also be found by reference to Exhibit F, 1 to 26, inclusive, in the Appendix, wherein will be found copies of letters from twenty-six member banks situated within this territory, stating most unequivocally that they are situated in the District of their preference. As shown in the Appendix, Exhibit "G," there are one hundred and sixty-six member banks in Southern Oklahoma within the Eleventh District. The Committee filing this petition have excluded from the terms of the petition the Counties of Bryan, Choctaw, Marshall, McCurtain and Pushmataha. In these five counties there are thirty member banks, as shown by Exhibit G, in the Appendix, the name of each member bank being preceded by a star. Deducting these thirty banks from the number of member banks in Southern Oklahoma, there are left one hundred and thirty-six member banks. 29 In order for any territory to be transferred from one District to another, it is absolutely necessary, under the rules and regulations of this Board, for appeal from the decision of the Federal Reserve Organization Committee, that two-thirds of the member banks in the territory sought to be transferred, join in the petition asking to be transferred from one District to another. Thus it will be seen that it requires a petition signed by ninety member banks before this Board would have jurisdiction to hear any petition at all looking for a transfer of territory from the Eleventh to the Tenth District. Attention is here called to the fact that certain banks which filed protest slips with the Federal Reserve Board, some time before the opening of the Federal Reserve Banks have been listed by the Committee filing this petition as petitioning banks. The Board's attention is respectfully called to copies of letters from twenty-two of these banks so listed as petitioning banks, found in the Appendix, marked Exhibit A, 1 to 22, inclusive, which letters show not only that these banks are not petitioning banks, but that the great majority of them are perfectly satisfied and want to remain in the Eleventh District, and that the remainder feel that no change should be made now, and that no effort should be made to change the lines until after the Federal Reserve Banks have been in operation a sufficient length of time to enable your Board to intelligently and properly determine whether or not the Federal Reserve Organization Committee made error when it established the present lines. On the last page of the petition will be found the http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 30 statements: "Total number of national banks in the territory sought to be transferred, 128. Total number of banks asking to to be transferred, 104. Two-thirds majority required by rules, 85.". Each of these statements is erroneous and misleading, and none of them can be accepted as correct. In the first place, there are 136 member banks in the territory sought to be transferred. In the next- place, out of the 104 banks which the petition lists as petitioning banks, the Board will find, upon examination of Exhibit A, 1 to 22, inclusive, that twenty-two of these banks have, in effect, expressly stated that they are not petitioning this Board to make any transfer of this territory at this time. In order for the Board to hear a petition from the banks .in Southern Oklahoma, that petition, in accordance with your regulations, must be signed by the duly authorized officials of ninety member banks. Respondent has heretofore insisted, and now insists, that this petition has never been authorized or signed by any banks in the territory sought to be transferred, with the exception of the City National Bank, of McAlester, and the First National Bank, of Lawton. The third man signing the petition does not even claim to reside in the territory sought to be transferred. If your Board overrules the exceptions heretofore urged and overrules the contention here made, that no proper petition has ever been filed, in accordance with your regulations, then most certainly, when you deduct from the number of banks which this Committee states are petitioning banks, the twenty-two banks which have expressed a desire either to remain within the Eleventh District, or a purpose not to urge any change or trans- 31 fer at this time, you will then have left only eighty-two banks, or eight less than the number required to file a proper and legal petition under the Board's rules and regulations. Attention is here called to the fact that whatever protest slips have been filed with your Board antedate the letters from the banks in Southern Oklahoma shown in the Appendix and referred to in this brief. Attention is further called to the fact that there are sixty-two letters from banks in Southern Oklahoma showing that they are not in sympathy with the Committee filing this petition. Had not the five counties above mentioned been excluded from the territory sought to be transferred by this petition, it would have required one hundred and ten banks to file a proper petition under your rules. It is, therefore, apparent that the Committee filing this petition were forced to exclude from the territory in the Eleventh District situated in Oklahoma certain Southern Oklahoma counties or that it could not have claimed, even by referring to prior protest slips, to have filed a petition which could be considered at all under your rules. It will be noticed, from certain expressions found in the letters in the Appendix, that the reason first assigned by certain parties outside of the District why Southern Oklahoma should not be included within the limits of the Eleventh District was, that the State of Oklahoma was being divided. Appeals were made to the patriotism of the bankers in Southern Oklahoma to protest against the inclusion of Southern Oklahoma within the limits of the Eleventh District because, and http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 32 for the sole reason, as first claimed, that the State was being divided. Under the first proposition in petitioner's brief page 1, is found subdivision entitled, "(a) Course of Business," and the contention is there made that because the Oklahoma banks have heretofore done some business with Kansas City banks, therefore the course of business was to Kansas City, and that, for this reason, the transfer of territory should be granted. In order to properly analyze the contention made by petitioners, it is necessary to view the circumstances which forced the course of the banking business to take the unnatural trend and not follow the course of commerce. Under the old law, St. Louis was a central reserve city, and Kansas City was a reserve city. Chicago, New York, and other Eastern cities were central reserve, or reserve, cities. This condition prevailed for a great number of years before the development of the great Empire State of Texas. Kansas City, St. Louis, Chicago, and other cities were reserve cities for a number of years prior to the establishment of any reserve cities in the State of Texas, and, under the then existing law, it was incumbent upon the banks to carry balances in the reserve cities. Therefore, Oklahoma banks, Texas banks, Louisiana banks, New Mexico banks, and Arizona banks, and a great many other banks in the Southwest, were forced to carry balances and do business through Kansas City and St. Louis, because of the advantages those cities had by reason of being reserve cities; and this business, which the petitioners state is the natural course 83 of business, was built up by virtue of this condition just mentioned, which forced the trend of the banking business to be to Kansas City and St. Louis, rather than to follow the commerce, which was to the South and Southwest. It may be conceded that a great many banks in Southern Oklahoma heretofore, have done and now do, business in Kansas City, but the conceding of that point does not necessarily show an error in judgment on the part of the Organization Committee. The Federal Reserve Act does not force these banks to discontinue carrying balances in Kansas City, if they find it to their advantage to do so, but simply requires them to also carry part of their reserve in the Federal Reserve Bank of their District. Instead of working to the disadvantage of the banks in Southern Oklahoma, this Act works to the distinct advantage of these banks, in that it permits them to retain a banking connection in Kansas City and opens for them a very valuable banking connection with the Reserve Bank in Dallas, in the very locality where their products are marketed and paid for. On the first part of the second page of petitioners' brief, is found certain figures claimed by the petitioners to support their theory as to why the transfer of this territory should be made. These figures are not new. They were known to the Organization Committee, and are readily explained in the light of what has heretofore been said with reference to tile forced banking connections heretofore existing at Kansas City and St. Louis, and other Reserve cities. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 34 On the 'second page of the petition is found the following: "We invite the attention of your Board especially to a perusal of the letters from which these figures were tabulated, as many of them show the dissatisfaction existing among the bankers in Southern Oklahoma, and their evident desire to be included in the Kansas City District." Such letters therein referred to are not accessible to respondent and are not found in the record of the Organization Committee, and constitute new testimony, introduced on this hearing for the first time, in violation of the regulations of the Board, and cannot be considered; but, if considered, and if, as stated by petitioners, these letters show dissatisfaction among some bankers with the establishment of the lines, then the question arises, whether or not this is simply a bankers' law, or if this law shall be permitted to perform the functions which its authors and friends claim for it; that is, to be a benefit and relief to the business of the entire country. It may well be here suggested, that it would be impossible, indeed, to frame any law with reference to banking matters, which would please all bankers. In fact, when this law was first proposed, a great many bankers were against it in its entirety, and this same dissatisfaction, which petitioners state these letters show, may grow out of the dissatisfaction held by certain bankers to the law itself. Because some banks in Southern Oklahoma have heretofore done business with Kansas City, does not show that that is the natural trend of business, but the pe- 35 titioners themselves in the brief, show that the trend of business, that is, the trend of commerce itself, is not in the direction of Kansas City. Everybody else's business except the bankers' business, goes to the South and Southwest, and, therefore, the Dallas Bank is in line with the trend of the commerce and business from Southern Oklahoma. The next subdivision of petitioners' brief, entitled "Oklahoma-Dallas Relations," page 2, refers to a letter from Mr. Thralls, manager of the Kansas City Clearinghouse, which letter we are unable to find in the record of testimony taken by the Organization Committee and we, therefore, naturally conclude that this letter is also new testimony furnished by the petitioners for the first time. But what has been above said with reference to the course of business, in our opinion, completely answers this contention of the petitioners, and the contention itself, we submit, is not worthy of any serious consideration. In this connection, we desire to call the Board's attention to a portion of the testimony set out under our second statement above, which will also be found on page 118, Senate Record, and is as follows: "If the new law is simply going to provide new machinery (perhaps more complex than the old) for doing what is already being well done under the existing banking system, its importance and efficiency has been vastly exaggerated. We do not believe it is so limited in function. We think it was intended to provide elasticity and a means for equalizing seasonal inequalities, to relieve strain where strain has been great under the old system. It is, however, going to be a http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 36 handicap instead of an advantage, if its effect will be normally to restrict Texas banks or banks in any other single District to the Regional Bank and affect their open market connections. * * * "Moreover, why should it be thought inevitable that the member banks will deal only with the Regional Bank when wanting to borrow money? No one doubts that banks which now have resources beyond their local needs will continue to lend that money to other banks to meet seasonable requirements. If the new law is to create in the Government a monopoly of the business of loaning money to National banks to meet their seasonable requirements, it has not been so advertised. Member banks will, of course, maintain their legal reserve with the regional banks; but they will deposit as in the past, surplus funds with other banks, receiving interest on daily balances and having constant transactions in the borrowing and loaning of money, as heretofore." This quotation is from the record of the Organization Committee, and, of course, it would be absurd to suggest that the Organization Committee did not give due consideration to this statement, as well as the other facts introduced, before it at its numerous hearings, and it is apparent, from a careful reading of the Federal Reserve Act, that its purpose was not to limit member banks to Federal Reserve Banks, but was enacted for the purpose of giving the member banks the benefit of the new facilities in addition to the facilities they had already enjoyed. On page 3 of petitioners' brief is found subdivision entitled as follows: "What Dallas Bankers Say." Under this heading, reference is made to letters from two banks in Dallas, which letters, from their dates, 37 show to have been written after the hearing of the Organization Committee, and which letters are not found in the record before the Organization Committee. The letters, however, when read and considered, form no basis upon which to predicate the argument that the Federal Reserve District lines should be changed. If Dallas banks have not sought business from Oklahoma banks, it may be to the disadvantage of the Dallas banks, but it certainly does not show a reason for transferring territory situated at the door of the Dallas Reserve Bank, to a bank situated several hundred miles away. On page 3 of petitioners' brief is found subdivision entitled: "What Freight Shipments Show." The statements made by the petitioners under this heading refute the contention that the trend of business is to Kansas City, but show that it is to the Southwest, or towards the Gulf. In this connection, reference is here made to a letter from Sam I. Hynds & Company, cotton merchants and members of the New Orleans Cotton Exchange, to B. A. McKinney, which letter, marked Exhibit D and found in the Appendix, shows that practically all of the cotton produced in Oklahoma, sold for export and to New England mills, passes through Texas ports or New Orleans, and further shows that the farmers and merchants who ship cotton on consignment, forward same to Houston, Galveston and New Orleans. Reference is also made to letter from Frank Kell, reputed to be the largest grain operator of the Southwest, to B. A. McKinney, designated as Exhibit E; http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 38 which shows that practically ninety per cent of the grain, such as wheat, oats and corn, raised in Southern Oklahoma, moves southward, and is consumed in Texas and Louisiana, or moves out through the Gulf ports. We submit that these two letters are new testimony, but they are only used to refute the new testimony adduced on this hearing, and which was not adduced on the hearing before the Organization Committee. It is absurd to say that the freight rates to Gulf ports in Texas and Louisiana are not lower than they are to the Northern and Northeastern markets from Southern Oklahoma, because it is a self-evident fact that commerce follows the trend of lower rates. If there were equally as good markets for cotton and grain in Kansas City, St. Louis and Eastern points, and the rates to those markets were lower than to Gulf ports, it would then be natural that the commerce flow in those directions, instead of through Texas, and to the Gulf. We have not felt that it was necessary to set out the different freight rates on these commodities, because, whenever it is shown to this Board, that the commodities themselves move to the Gulf and Gulf ports, it then becomes evident that the freight rates in that direction must be the favorable rates. On page 4 of petitioners' brief is found subdivision entitled: "Showing of Farm Loan Companies." Under this subdivision, reference is made to letters showing that Eastern money had been used for farm loans in Oklahoma. We have no doubt but what that statement is true, although this fact is not shown in the only record to which we have reference; that is, the testimony before 39 the Organization Committee; but, granting that Eastern money is loaned on Oklahoma farms, does that show any good reason why the portion of Oklahoma South of the Canadian River should not be included within the Eleventh Reserve District, with its bank located at Dallas? Will the inclusion of this territory within the Eleventh District in the least manner prevent a continuation of loaning of money on Oklahoma farms by Eastern capital if it so desires? It is not contended that these farm loans are made from Kansas City, but they are made in Oklahoma as well as in the entire Southwest, by parties all over the Eastern States, and certainly the fact that part of Oklahoma is in the Eleventh astrict, with its bank at Dallas, cannot, in the remotest degree, affect this character of business. On the fourth page of petitioners' brief is found subdivision entitled: "(b) Convenience in Doing Business." Under this subdivision, petitioners contend that, because Southern Oklahoma banks have heretofore done some business with Kansas City banks, therefore the officers of the Kansas City Bank would be in better position to find out about the Southern Oklahoma banks, and would render quicker service than the Dallas Bank. Of course, this contention, followed to its logical conclusion, is an indictment of the entire theory of the Federal Reserve Act. Under this heading is found the following: "The situation at present is such, owing to this acquaintanceship, that any good bank in Southern Oklahoma will be granted a re-discount immediately upon application to its Kansas City correspondent; http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 40 whereas, an application to a new bank to the south of Oklahoma would result in delay, in many cases, until an investigation could be made, and as these applications for re-discounts in the future will doubtless be made at times when prompt action is necessary, another reason is afforded why these banks should be attached to the Kansas City District." If the applications for loans that petitioners refer to are to be granted by the correspondent banks in Kansas City, then certainly the inclusion of Southern Oklahoma in the Eleventh District would not affect the Kansas City correspondent's knowledge of the Oklahoma banks so applying for loans, and this contention, when analyzed, falls of its own weight. If the point sought to be made by petitioners is that, by reason of the fact that the Kansas City banks are acquainted with the Southern Oklahoma banks and that, by reason of that acquaintance, they would furnish the Federal Reserve Bank at Kansas City with information regarding the Southern Oklahoma banks, then a complete answer to that proposition is that the Kansas City banks do not possess an absolute monopoly of knowledge regarding Southern Oklahoma banks, and that the same information which they have has been and is readily obtainable by the Dallas Reserve Bank, when making investigation of the solvency and condition of Southern Oklahoma banks. An analysis of the re-discounts made by the Dallas Reserve Bank will explode this proposition in an instant. There are 757 member banks in the Eleventh Reserve District. Out of this number there are 166 banks in Southern Oklahoma.. Reference is here made 41 to reports filed with this Board by the Federal Reserve Bank of Dallas, which show that the Federal Reserve Bank, of Dallas, out of the total amount re-discounted by it, has furnished re-discount facilities to Southern Oklahoma banks of more than twenty-five per cent of the total. Thus it will be seen that this apparent hardship which petitioners dreamed would develop, has not developed, but has faded in reality, when put to the test suggested by petitioners. On the fifth page of petitioners' brief is found subdivision entitled: "Mail Facilities." Petitioners there contend that Southern Oklahoma should have been included in the Kansas City District, because of the mail facilities. In support of this contention, reference is made to testimony not accessible to respondent, because not found in the record of testimony taken by the Organization Committee; but an analysis of the position so taken by petitioners shows that the contention is absolutely unfounded and that the weight of the testimony accessible to your Board and to respondent establishes the fact that, instead of the mail facilities from Southern Oklahoma points to Kansas City being better than to Dallas, the reverse in fact is true. Reference is here made to a letter from W. S. Cross, President of the State National Bank of Hollis, Oklahoma, to the Federal Reserve Board, dated January 15, 1915, designated and shown as Exhibit A-14, found in the Appendix, reading as follows: "In regard to the proposed change in this Reserve District, we prefer to stay in the Dallas Dis- http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 42 trict, on account of the distance and connections which the mails make. We are only twelve hours from Dallas, and about forty-eight from Kansas City." This letter is from the President of a bank which has been listed as one of the petitioning banks asking for this transfer. We refer further to a portion of the first statement set out above, wherein there is a quotation from page 116 of the Senate Record, reading as follows: "The map attached will show that all of the territory claimed in Oklahoma, Arkansas and Louisiana, is within 15 hours by rail from Dallas. That every portion of the territory can be reached from Dallas in less time than from St. Louis. With the exception of a small portion of northern Oklahoma, north of the Canadian River, it can be reached from Dallas by rail in shorter time than from Kansas City." Attention is called to the fact that no part of Northern Oklahoma, north of the Canadian River, is included in the Eleventh Reserve District, and that, therefore, by the testimony here shown and considered by the Organization Committee, it is absolutely established, beyond any controversy, that all of the territory in Oklahoma included within the Eleventh District, is shorter. distance by rail from Dallas than it is from Kansas City. Attention is further called to a portion of the first statement found in respondent's brief, quoting from pages 117 and 118 of the Senate Record, reading as follows: "With the exception of some territory in the extreme western and southern portions of the District, 48 and a small area in southwestern Louisiana, every point in the District is within twelve hours' mail service of Dallas." If further argument is necessary to refute this contention of petitioners, the Board will only have to turn to the maps on file with them, and look at the territory in Southern Oklahoma sought to be transferred, when it will be seen at a glance that this territory is almost at the door of the Dallas Reserve Bank, and is several hundred miles from Kansas City. On page 5 of petitioners' brief is found subdivision entitled, "Loan and Discount Facilities," from which we quote: "Second. In the second place, Southern Oklahoma should be placed in the Kansas City District, because the figures show the Kansas City District will be better able to meet the re-discount requirements of the Southern Oklahoma banks, than will the Dallas District." Reference is here made to the testimony set out in the second statement above of respondent, being a quotation from page 118 of the Senate Record, as follows: "The unassailable fact is—St. Louis and Kansas City will not dispute it—that when Texas needs money to move its crops, its banks can not borrow money in any considerable quantities in either St. Louis or Kansas City, and must go to Chicago or to the Atlantic seaboard. Balances are kept in St. Louis now, not in order to secure loans there in time of need, nor because trade sets that way, but in order to secure exchange facilities and provide means for making collections at par. "The re-discounts and bills payable in the District Texas has defined were $23,000,000 at the peak of the http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 44 heaviest demand of 1913. How much duplication or pyramiding was in this sum it is not easy to say; but, as shown in the Dallas Book of Facts, more than threefifths of the amount could have been absorbed by the reduction in the percentages of reserve which are provided for under the law. The National banks in the territory would have had $15,000,000 more of loanable funds at that time if the present law had then been in force, leaving only $8,000,000 to be taken care of by the Regional Bank. Its available funds for that purpose would have been far in excess of these demands." It will thus be seen that the only testimony introduced before the Organization Committee, and which is the only testimony that can be considered by this Board, refutes in toto the contention made by petitioners. As further hearing on this point, reference is now made to a portion of the first statement of respondent, quoting from page 118 of the Senate Record, as follows: "For eight months in every year a Regional Bank in this District would have money to loan; for twelve months in an ordinary year it could take care of its own member banks and have money left. During the exceptional year (1913) just passed, it could at the peak of its advances to member banks, have financed itself. If, however, under extraordinary stress it should need to re-discount the receivables of member banks to a small extent with other Regional Banks, or to issue emergency currency, it would simply be making use of these features of elasticity which have been advertised as among the chief excellencies of the new banking law. "If the Texas Regional Bank should be a lender bank eight months out of every year and twelve months out of an ordinary year, why should it not every four months during an occasional extraordinary year, be a borrower or note-issuing bank?" 45 Under the terms of the Federal Reserve Act, the Regional Banks cannot reach the height of their efficiency for a period of three years. At present they are operating only with a portion of the capital provided by the terms of the Act. Before tearing up these Districts and crippling the Bank of the Eleventh District in its operation, would it not be the part of wisdom to wait a sufficient length of time until the Dallas Bank could, in a measure, reach the height of efficiency made possible for it by the terms of the Act? At this time there is nothing to indicate that the grounds of fear entertained by the petitioners will ever materialize. To act now would be a step in the dark, and would be to anticipate a condition when there is nothing to justify an expectation of its realization. Although the Dallas Bank has not, in the smallest degree, reached the height of its efficiency, yet, at this time, all of the legitimate wants and needs of. the Southern Oklahoma banks are being taken care of as fast as they are suggested. Suppose, in an exceptional year, it should become necessary for the Dallas Bank, in order to move the great cotton crop of its District, to re-discount the receivables of its member banks to a small degree with other Regional Banks, would this constitute a crime, or would the Bank then be simply putting into operation the very terms of the law under which it was created? The testimony which this Board must consider does not show that even it will be necessary to do this; but, if an extraordinary period should come and this became necessary, would not this course be much better than the tearing up of the present District lines and the in- http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 46 elusion of Southern Oklahoma in the Kansas City District, where admittedly there is no need for additional territory What we have just said above, in respondent's opinion, completely disposes of what has been said by petitioners under subdivisions headed: "Heavy Dallas Re-discounts," "Transfer Would Help Both Districts," and "Comparative Loaning Resources," found on pages 6, 7 and 8 of the petition. On page 8 of the petition is found subdivision entitled: "How Proposed Change Would Benefit." Petitioners have already attempted to show to this Board that the Dallas Bank lacks the resources to care for its member banks in Southern Oklahoma, and yet they have the temerity to propose to further reduce the resources of the Dallas Bank, and, by so doing, the claim is put forward that this action would help both banks. If the Dallas Bank, with the inclusion of the 166 member banks in Southern Oklahoma, does not have sufficient resources to meet the dire conditions which petitioners profess to see in the future, then, in respondent's opinion, it is a strange course of reasoning to say that, if you weaken this already claimed weak bank by taking from it almost one-fourth of its means of available resources, you will, in that manner, help the already claimed weak bank. Respondent does not, for an instant, concede that the Dallas Bank will not have resources to care for all of its member banks in Southern Oklahoma and elsewhere, but simply points out the fallacy of the reasoning http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 47 of petitioners under the heading: "low Proposed Change Would Benefit." The proposition is here laid down that, under the testimony taken by the Organization Committee, the Dallas Bank, with the inclusion of the Southern Oklahoma banks, will have adequate resources to care for the legitimate needs and necessities of each of its member banks. It has just been shown that this Bank could have cared for all of the needs of its member banks for the year 1913, which was one of the heaviest borrowing years in the history of the Southwest. If the petition is denied and the Bank of Dallas is permitted to work out its problems in the manner prescribed by the Federal Reserve Act, in respondent's Opinion, time will show that not only have the petitioners been in error as to their claimed foresight of calamity, but that the Dallas Bank will become one of the strongest institutions created by this Act. The next subdivision of the petition is headed: "Protests of Banks Practically Unanimous." Under this subdivision, the contention is made that banks in Southern Oklahoma were practically unanimous in protesting against the present District lines. It is there shown that W. B. Harrison, Secretary of the Oklahoma Bankers' Association, and a resident of Oklahoma City, sent out a letter to the banks in Oklahoma, asking them to sign protest slips and return to him. It ls claimed that 309 banks signed protest slips, indicating their displeasure at the establishment of the present lines. If 309 banks in Southern Oklahoma signed such protest slips, then there was either some duplication or http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 48 error has been made in the count. There are only 166 member banks in Southern Oklahoma. Petitioners themselves, for reasons which they found sufficient to themselves, excluded the banks in five counties, leaving only 136 member banks in the territory which petitioners ask to be transferred. Out of this number, 32 admittedly, according to the petition, never filed any protest. Of the remaining 104, twenty-two liave since that time indicated either a preference to remain in the Dallas District, or a desire to see no change made at this time. Thus, it will be seen that, upon careful scrutiny, this contention cannot stand. The next two subdivisions found in petitioners' brief, are headed: "Protest of Millers' Organization" and "Transfer Would Not Injure Dallas Bank." What has already been said, in respondent's opinion, completely disposes of the contentions made under these two headings. The next and last subdivision in petitioners' brief, is headed: "Oklahoma Asks Only Fair Play." Under this heading it is said: "It is the belief of the bankers of Oklahoma, that the present division of the State will operate to hamper the upbuilding of the financial interests within the State, through the diversion from Oklahoma financial centers of bank business to which they are legitimately entitled, by reason of the fact that many bankers will feel compelled to open accounts in Dallas, other than with the Federal Reserve Bank." It is here suggested that when the Committee filing 49 this petition prepared the petition, it saw fit, for reasons of its own, to divide the State and to leave five counties of Oklahoma in the Eleventh District. If the division which the Organization Committee made of the State of Oklahoma when it established the present lines was hurtful to the State of Oklahoma, why does it not follow that, by the same course of reasoning, the divisions which the Committee filing this petition makes of the State of Oklahoma would be equally as hurtful? The above quotation shows that probably some financial center feels that its territory has been encroached upon by reason of the establishment of the present District lines. It may be possible that there is more under the surface than the above statement would show. In a letter from the First National Bank of Colbert, Oklahoma, to the Federal Reserve Board, dated June 15, 1914, the following is found: "I understand that bankers of Oklahoma City are making an effort to transfer us to Kansas City. I wish to protest against any change being made, as I feel that it is to our interest to remain as we are" (See Exhibit F-11). Reference is here made to a letter from the First National Bank of Frederick, addressed to the Federal Reserve Board, under date of January 8, 1915, found in the Appendix, designated Exhibit C-4, from which the following is quoted: "It is my opinion that this movement was instigated by Oklahoma City bankers, and is being pushed on account of Oklahoma City parties, and not for the welfare of the majority of the bankers in the District. We are highly pleased with the http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 50 selection of Dallas as the reserve center of this District, and hope that no change will be made in the present District lines." Reference is further made to a letter written by the First National Bank of Kiowa, addressed to the Federal Reserve Board, dated August 14, 1914, found in the Appendix, and designated as Exhibit C-7, reading as follows: "Referring to the efforts of Oklahoma City to change that part of Oklahoma that is in Federal Reserve District No. 11 from the Dallas to the Kansas City District, we are pleased with the District as made, and feel that the business of Southern Oklahoma can be best handled through the Dallas District, and desire to protest against this change being made." Reference is further made to a letter from the Tishomingo National Bank, directed to the Federal Reserve Board, dated June 15, 1914, found in the Appendix, and designated C-13, from which letter we quote as follows: "I notice from the press that there will be a committee of bankers from Oklahoma to appear before you in an effort to get all of the State of Oklahoma placed in the Kansas City Federal Reserve District. This committee will doubtless represent that 95% of the banks of Southern Oklahoma of the Dallas Reserve District are protesting against being left in the Dallas District, and probably there are a majority of banks South of the Canadian River on record as protesting against the division, but I wish to submit that the majority of these protests have been made as a direct result of a persistent campaign waged by Oklahoma City bankers. These Oklahoma City bankers have emphasized the fact 61 that our State has been divided and put into two different Districts, while, under the present condition, our State is divided into a dozen or more different Districts. Some of us borrow our money from and keep our reserves with New York, while others are with St. Louis, Chicago, Kansas City, Fort Smith, Little Rock or various other centers. * * * The Oklahoma City banks sent out the protests all ready to be signed up by the different banks, and urged that every bank join in the protest." Quotation is now made from a letter from the Durant National Bank, directed to the Federal Reserve Board, dated June 13, 1914, the letter being found in the Appendix, designated Exhibit F-12: "We believe that a large part of the sentiment manifested by some of the banks in Southern Oklahoma in desiring to be transferred to the Kansas City District is due, in a great measure, to the agitation brought on by Oklahoma City. They are in the Kansas City District themselves, and, believing that benefit would accrue to their own city by having Southern Oklahoma transferred to Kansas City, have conducted a vigorous campaign to bring about that result." We quote further from a letter written by W. T. Clark, President of the First National Bank of Apache, dated August 31, 1914, to Oscar Wells, Houston, Texas, the letter being found in the Appendix, and designated A-4, as follows: "Naturally we are in close touch with Oklahoma City bankers, and they are very desirous to get the lines changed. I have not heard lately of any action being taken in the matter. In our dealings with a regional or reserve bank, I do not see that it makes very much difference whether the bank is located http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 52 in Dallas or Kansas City; however, as stated above, our business relations with Texas points have been very limited." On page 2 of the petition is a statement to the effect that the parties filing the petition had never seen representatives of Dallas banks at the Oklahoma Bankers' Convention until the last one in May, 1914, just after the announcement was made of the present District lines. The committee filing the petition have seen fit to testify to this fact, and we, therefore, presume that it will be legitimate if we do a little testifying also with reference to the presence of Oklahoma City bankers at Dallas; and, as a matter of information, and as throwing light on the immediate question under discussion, it is here stated that, upon the occasion of the meeting of the representatives of all of the banks in the Eleventh District at Dallas, on May 30, 1914, for the purpose of nominating candidates for the several directorships in the Eleventh District, a delegation of Oklahoma City bankers was in attendance, and was present at a caucus held by Southern Oklahoma bankers the day previous to the general convention. These gentlemen from Oklahoma City had prepared and brought with them a resolution which they asked the Oklahoma bankers to adopt, to the effect that it was the sense of the caucus that Southern Oklahoma should be transferred to the Kansas City District. Great pressure was brought to bear in their efforts to get this resolution adopted, but the caucus of Southern Oklahoma bankers voted down the resolution. It is, therefore, apparent from the statement and 53 letter quotations above, that Oklahoma City has more than a passing interest in this contest. If it has an interest in the contest, of course, the Board hearing the contest is entitled to know that Oklahoma City has manifested some concern over the change of lines, and if the contest was instigated through the efforts of Oklahoma City bankers, and was not a voluntary move upon the part of Southern Oklahoma banks, this fact will, of course, be duly weighed and considered by the Board. It is more than evident that the bankers of Oklahoma City are not neutral onlookers in this contest, but that they have, from the beginning, violated the laws of neutrality, and at times have taken an open and vigorous position for a change in the present District lines. That fact being established, it, of course, becomes pertinent to find a reason for this violation of neutrality upon the part of Oklahoma City bankers. This activity upon the part of the Oklahoma City bankers may have been brought about by reason of a well defined idea that these bankers may entertain that Oklahoma City would be an excellent place for the designation of a branch bank of the Kansas City Bank in the event the Oklahoma City bankers should be successful in bringing about a change of the present District lines, as prayed for in the petition. Respondent does not imagine that it would be hard to convince Oklahoma City bankers that their city would be an excellent point for the designation of a branch bank. Indeed, that ambition on the part of Oklahoma City is a worthy and commendable one, but should not, in our opinion, outweigh the facts hereinabove presented. It has already been abundantly shown that the grain http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 54 products of Southern Oklahoma pass into Texas and Louisiana and that the surplus not consumed therein passes out through the Gulf ports in these States, and that the cotton from Southern Oklahoma all passes through Texas and out through the Gulf ports of Texas or Louisiana. The wisdom of the Organization Committee, therefore, becomes more manifest when it is considered that the financing of the cotton crop during the progress of production and while being marketed, is a problem and a burden to the banker, not understood or appreciated by those living in sections outside of the cotton district. Generally speaking, the business of a cotton community ebbs and flows once in a year, necessitating periods of expansion which might not appeal favorably to persons not conversant with conditions which produce them. It is therefore apparent that the Federal Reserve Bank of Dallas, managed as it is and as it necessarily will continue to be, by a Board of Directors who have an intimate knowledge of the cotton industry, can better serve the banks of Southern Oklahoma than the Kansas City Reserve Bank, which is operated by directors and officers who, though thoroughly qualified in a general way and properly disposed toward their member banks, cannot, of course, understand the needs of a bank in a cotton growing region. If weight and credit is given to the argument of the petitioners that, because the Southern Oklahoma banks have, in a large masure, done business with banks in Kansas City, therefore, Southern Oklahoma should be transferred to the Kansas City District, then, by the same course of reasoning, Texas and Louisiana should 55 have been attached to the New York District, because the financing of the Texas and Louisiana banks heretofore has been largely through New York. The petitioning committee's argument continued to its logical conclusion, would necessarily lead to the result that there should be only one Federal Reserve Bank, and that a central institution located in New York City. The Federal Reserve Act, in the opinion of the majority of thinking men, is the greatest piece of constructive legislation placed upon the statute books within a period of fifty years. If properly worked out, panics such as this country has suffered in the past will disappear as a mist before the rising sun. The Act was intended as a benefit and a stay for the business of the United States. The success of the Act now depends upon the patriotic co-operation of the bankers throughout the country. If the bankers of the United States will hold up the hands of the Federal Reserve Board and the officers and directors of the Federal Reserve Banks, the success of this legislation is already assured and the blessings and benefits flowing therefrom will be widespread and substantial. If, however, the time of the Federal Reserve Board is to be taken up by contests between jealous communities, the success of this legislation will be jeopardized and the benefits arising therefrom will be materially diminished. Respondent, therefore, submits this matter to the careful consideration of the Board, upon the record made by the Organization Committee, firmly believing that the action of the Organization Committee in establishing the present lines was correct and proper, and will result beneficially to both Districts. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 56 The original letters referred to in this brief are being filed with the Secretary of the Federal Reserve Board for the use and benefit of the Board. Respectfully submitted, CHARLES C. HUFF, Counsel for The Federal Reserve Bank of Dallas, Texas. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis APPENDIX http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 59 EXHIBIT A. THE FIRST NATIONAL BANK OF ADA. Ada, Okla., Sept. 1, 1914. (1) MR. OSCAR WELLS, First National Bank, Houston, Texas. My dear Mr. Wells: I am in receipt of your letter of August 29th, relative to a movement on the part of certain Oklahoma bankers to have the Southern portion of Oklahoma removed from Dallas Reserve District and placed in the Kansas City District. I think that I got into disfavor with the Oklahoma bankers immediately after the designation of this District, by reason of my publishing my opinion of the District, which was: "That it was very pleasing to me as it was arranged." Afterward, considerable pressure was brought to bear on Mr. Norris and myself, in which an appeal was made to our patriotism to the State of Oklahoma, and after it had gotten down to the point where we were told that every other bank in Oklahoma besides the First National of Ada and one other, had signed the request that all of Oklahoma be placed in the Kansas City District, I was prevailed upon to •sign such a request. You may feel assured that I will do nothing whatever te have the boundaries of this District changed. I am enclosing you with this a circular letter that I have Just received from W. B. Harrison, Secretary of the Oklahoma Bankers Association, wherein you will note that Comptroller Williams has decided, after a full consideration of the matter, that no currency association will be formed in Oklahoma, and has advised all banks to join the currency association in their District. It rather strikes me that this is almost equal to a decision against changing the Reserve District as already established. I appreciate hearing from you, and when I can be of further assistance to you in this country, it will be a pleasure to me. With kindest regards, I am, Yours truly, Enc. A. G. ADAMS President. A.GA-RHG http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 60 THE OKLAHOMA BANKERS ASSOCIATION. Office of the Secretary. Oklahoma City, Okla., Aug. 31, 1914. (1-X) TO 0. B. A. MEMBERS: After thoroughly discussing the matter, the Executive Committee has decided there is little the Association as a body can do to help out the cotton situation. It is a problem for each individual banker to work out. No one knows yet what the price of cotton will be when the Oklahoma product comes on the market; it may be lower or higher than the price in 2 to 9 cents. Most of the Texas, which now ranges from 71/ propositions put forward for holding the cotton crop INDEFINITELY are believed to be impractical, but it is important to market the crop slowly, and where the farmer is in a position to hold some of the crop over, he should be encouraged to do so. Oklahoma has a very liberal warehouse law, and cotton warehouses, bonded, should be arranged for in every important cotton shipping town. This will help the farmer and the banker alike. Warehouses will make it possible for the banker to obtain accommodations he could not otherwise secure from his correspondents, and especially from the regional reserve banks. Bankers should seize the present opportunity to induce the cotton farmer to get away from that crop into diversified farming and live stock. Comptroller Williams has advised all National Banks to join the nearest currency association, and many Oklahoma banks are inquiring whether such an association will be formed in Oklahoma. Full consideration of the matter has resulted in a decision in the negative. It would require almost the entire number of eligible banks in the Oklahoma portion of the Kansas City District to obtain the necessary capital for such an association, and it is doubtful whether the Comptroller would approve of its organization. It is already known he does not approve of crossing District lines. Hence, banks In the Kansas City District should join the Kansas City Association, and those in the Dallas District, the Texas Association, if they desire emergency currency. There is danger of getting too much of this currency on the market, because it cannot be used as reserve, but requires additional reserve to handle it, so the emergency currency should not be put Into circulation unless actually needed. Remember that the notes and collateral to be offered for re-discount must be in tip-top shape and prepare your securities accordingly. 61 0. B. A., Press reports that the Executive Committee of the crop onto or any of its officers, favors rushing the cotton false. They the market or oppose cotton warehouse plans, are farmers to the and bankers the n betwee ation favor co-oper suggesreceive to glad work out this big problem. We will be tions from you. Yours truly, W. B. HARRISON, Secretary. CITY NATIONAL BANK. Altus, Okla., Dec. 24, 1914. (2) MR. FRANK KELL, Wichita Falls, Texas. Dear Mr. Kell: Oklahoma banks Regarding proposed change of Southern into Kansas City District: any change, in I deem it unwise at this time to make a majority Should fact, we are very well pleased with Dallas. change the City, Kansas favor bankers of Southern Oklahoma time. future some at effected be could at this time. I trust that there will be no change made Yours very truly, J. T. WOOD, President. THE FIRST NATIONAL BANK. Apache, Okla., Aug. 31, 1914. (3) MR. OSCAR WELLS, Houston, Texas. Dear Sir: to the matI have your letter of the 29th instant, relative lines of the y boundar present the in changes any ter of making Dallas Regional Bank. in I would be very glad indeed to favor you personally any way that I could, but we feel in Oklahoma that our State us, dealt should not be divided, and since we have, most of for Principally with Kansas City, we naturally look that way but people, her and our banking connections. I like Texas would have to get acquainted down there. Naturally, we are In close touch with Oklahoma City bankers, and they are very anxious to get the lines changed. I have not heard lately of any action being taken in the matter. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 62 In our dealings with a Regional or Reserve Bank, I do not see that it can make very much difference whether the Bank is located in Dallas or Kansas City; however, as stated above, our business relations with Texas points have been very limited. Our business outlook would be very good only from the fact that the cotton market is unsettled. Very truly, W. T. CLARK, President. THE FIRST NATIONAL BANK. Ardmore, Okla., Dec. 24. 1914. (4) TO THE FEDERAL RESERVE BOARD, District No. Eleven, Dallas, Texas. Dear Sirs: There has something been said about, and some protest been made against, the Southern part of Oklahoma being placed in Federal District No. Eleven, and, in connection with this matter, we desire to say, so far as we are concern ed, we are absolutely satisfied as it is now. It is true that when the Districts were first designated by the Department at Washing ton we signed a printed request that was circulated for that purpose, to have Southern Oklahoma changed, and placed in the Kansas City District. But, so far as we now can see, we think we would be better served, and have so far been better served, by the Dallas District, than we could have been by the Kansas City District. Very truly, C. L. ANDERSON Cashier. STATE NATIONAL BANK. Ardmore, Okla., Sept. 4, 1914. (5) MR. OSCAR WELLS, Houston, Texas. Dear Mr. Wells: In reply to your favor of the 28th ult., we understand that there is gill some work being done to try to have us transferred to Kansas City. Of course, the majorit y of the boys in the Southern part of the State were against dividing 63 Oklahoma, and preferred to have it all in the Kansas City District. We, however, have decided to remain neutral, as we have very friendly relations both with Kansas City and Texas. In our case, most of our officers are Texans and have a large acquaintance in that State, and, naturally, we feel that we will be well taken care of. With best personal wishes, I remain, Yours very truly, HAROLD WALLACE, Cashier. THE CHICKASHA NATIONAL BANK. Chickasha, Okla., Aug. 31, 1914. (6) MR. OSCAR WELLS, Vice-Pres. First Nat. Bank, Houston, Texas. Dear Mr. Wells: I am just in receipt of yours of 29th, relative to the Southern portion of Oklahoma making an effort to connect itself with the Federal Reserve Bank at Kansas City, instead of the Dallas District, and in reply I will say that I attended a meeting of the State Executive Committee of the Oklahoma Bankers Association, of which I am a member, on Saturday, August 29th, and this matter came up for discussion before the meeting. I suggested that we pass the matter over now and make no effort at all to do anything along this line, as it had already been ordered and decreed that we were to be Placed in the Dallas District, and that I for one saw no hopes Of making any changes and that it was far best for us to go on and make the best of the situation and later on, if we found that it was not convenient for us to handle our business through Dallas, that we could then take the matter up with the Federal Reserve Board and ask for the change at some future date, but that at the present time I saw no hopes for any change being made in the District. I am glad to say that My views were considered in the matter, and it was passed over without any action being taken. In justice to Mr. pings, of Ardmore, I will say that he agreed with me on this Proposition, and we two were the main ones who advocated no Change being made at this time, and I don't think anything more will come of the proposition. Being a Texan myself, feel very much at home with a great many of the Texas http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 64 bankers, but there is a strong feeling here for a change. With kind personal regards and best wishes, I am, Yours very truly, T. H. DWYER, President. THE FIRST NATIONAL BANK. Chickasha, Okla., Aug. 31, 1914. (7) MR. OSCAR WELLS, Care First National Bank, Houston, Texas. Dear Mr. Wells: I have your favor of the 29th, advising that owing to the division made in locating Federal Reserve Banks at Dallas and Kansas City, you have been very much interested in the affairs of the Southern portion of the State, and in reply beg to state that we naturally thought all the time that we would be put in a District whereby we would patronize a bank located at Kansas City or St. Louis, and we preferred Kansas City, our mail facilities being very good, and of course having done a large per cent of our business at Kansas City, but after learning we hal been placed in the 11th District, with a Bank to be located at Dallas, we did not allow ourselves to be discouraged, as we felt this matter was of much importance to the whole country, and had been well looked into by the gentlemen making such division, and if it developed that it was a disadvantage to the State to be divided, it could later be worked out. We have contented ourselves on being able to transact our business satisfactorily with the Federal Reserve Bank at Dallas, and we should still be able to maintain our business relations with Kansas City, St. Louis and other Eastern points. We have no special objection to make as to the mail facilities at Dallas, and if our securities which we have in Oklahoma can be recognized at the Federal Reserve Bank at Dallas by the Board, we know of no reason why our business should not be pleasant. I appreciate very much the interest you are taking in the affairs, and hope to see you often on the Board. Yours very truly, BEN F. JOHNSON, Vice-Pres. BFJ- 65 THE OKLAHOMA NATIONAL BANK. Chickasha, Okla., Aug. 31, 1914. (8) MR. OSCAR WELLS, First National Bank, Houston, Texas. Dear Mr. Wells: Replying to yours of August 29th, while to begin with, it was the opinion of our bank, considering the trend of business in this section, that it would be best for us to be in the Regional Bank District with Kansas City or St Louis, however, since the boundaries were fixed different and not knowing Just what would be best for us, we have never joined in any move looking to a change, and don't think we shall until after we have tried out the proposition and realize what is best for us. Some of our Oklahoma banker friends have criticised us severely for the stand we have taken. Anyway, their views have not changed our plans. Thanking you for your letter, and hoping it may be Proven it is best for us to be coupled up with the Dallas Reserve Bank and that all of us may see lots of benefits under the new scheme, I am, with personal regards, Yours very truly, R. K. WOOTTEN, President. RKW-BH THE OKLAHOMA STATE NATIONAL BANK. Clinton, Okla., Jan. 16, 1915. (9) FEDERAL RESERVE BOARD, Washington, D. C. Gentlemen: In the matter of change in the boundary line between 10th and 11th Federal Reserve Districts, the hearing of which is soon to come up before your Board, it might be wise to post Done your decision until the different Regional Banks get into full working order in all its functions, and then it could be readily ascertained to which District the questioned territory belongs. If the discount rates are kept somewhere near equal, it matters but little to which District any of us belong, until http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 66 the functions of the Clearing House are put into operation, and then some re-adjusting will most likely be in order. Yours truly, C. W. BREWER, President. THE FIRST NATIONAL BANK. Comanche, Okla., Dec. 26, 1914. (10) FEDERAL RESERVE BOARD, Washington, D. C. Gentlemen: Some time ago we expressed our preference to be in the Kansas City District, but since they have begun operations and we have thought the matter over, will say that it would be agreeable to us to remain in the Dallas Federal Reserve District. Very truly, R. M. RALLS, President. THE FIRST NATIONAL BANK. Elk City, Okla., Dec. 24, 1914. (11) MR. FRANK KELL, Director, Federal Reserve Bank, Dallas, Texas. Dear Mr. Kell: In regard te making any changes of the boundary lines of the Federal Reserve Banks: In my opinion it would be best to wait until the Federal Reserve Banks are in good running order. We would prefer being in the Kansas City District, but we are willing to wait until the Board of Directors of the Federal Reserve Bank have their banks in good running order, as to make any changes now might cause some complications and we would want to reserve our right of trying to get changed as soon as the Reserve Banks got in good running order and where it would not cause any complication. Very truly yours, A. L. THURMOND, Cashier. ALT-AH 67 AMERICAN NATIONAL BANK. Holdenville, Okla., Aug. 31, 1914. (12) MR. OSCAR WELLS, Vice President, First National Bank, Houston, Texas. Dear Sir: In reply to your letter of August 29th, will say that, as far as I am concerned now, I had just as soon be in the Dallas District as in the Kansas City District, for the reason that I think the Dallas District will understand this cotton condition better than any other. I think the Dallas District Will fully realize what we are up against in this cotton section, and will understand how to handle the situation better than if we were in a grain or any other territory. Therefore, I am perfectly content to remain in the Dallas District. Yours very truly, L. T. SAMMONS, President. NATIONAL BANK OF COMMERCE. Hollis, Okla., Jan. 5, 1915. (13) THE FEDERAL RESERVE BOARD, Washington, D. C. Gentlemen: Having had a conversation with Mr. Frank Kell, of Wichita Falls, Texas, who is a member of the Board of the 11th District, regarding the contemplated change from the 11th to the 10th Federal District of the Southern part of Oklahoma, I Wish to say that it seems to me that the first thing we should do Is to lend all of our energies toward the perfection of the Federal Bank plan. We are in the 11th District, and as yet I have been unable to decide as to which District it would be most to our interest to be permanently placed in. We have a direct railroad connection with Dallas and, from the standpoint of convenience it seems that Dallas would be our preference. Of course, there is a possibility that the financial interest of the State of Oklahoma might be injured should the boundary lines remain as they now are, but as it has not been tried out, and the entire plan is an experiment, I hardly believe that the matter could be intelligently settled at this time. Respectfully, C. W. GILLILAND, CWG-m President. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 68 THE STATE NATIONAL BANK OF HOLLIS. Hollis, Okla., Jan. 15, 1915. (14) FEDERAL RESERVE BOARD, Washington, D. C. Gentlemen: In regard to the proposed change in this Reserve District, we prefer to stay in the Dallas District, on account of the distance and connections which the mails make. We are only twelve hours from Dallas and about forty-eight hours from Kansas City. Yours respectfully, W. S. CROSS, President. THE FIRST NATIONAL BANK. Mangum, Okla., Aug. 31, 1914. (15) MR. OSCAR WELLS, Houston, Texas. Dear Mr. Wells: I am very glad to have your letter regarding the move on part of the Oklahoma bankers to be transferred to Kansas City District. Personally, we would prefer to remain as we are, in your District. However, this is on .second judgment, as we preferred Kansas City at first, and when the remonstrance was first made, we joined in this, but since then we will stand pat on Dallas. I want to congratulate you on being selected on the Board, and we feel that the entire District will be benefited by having you as a Director. With kindest personal regards, Yours very truly, H. MATHEWSON, President. THE FIRST NATIONAL BANK. Marietta, Okla., Aug. 27, 1914. (16) MR. BEN 0. SMITH, President, F. & M. National Bank, Fort Worth, Texas. Dear Smith: I am duly in receipt of your favor of the 24th inst., and 69 note what you say about it having been brought to your attention that there might still exist some opposition to the Southern part of Oklahoma being included in the Eleventh Regional Bank District, and desiring to know from me, in my opinion, what this opposition, if any, will amount to or exert With the Washington Department. In reply will say, as far as my personal views are concerned, when I first learned that the Southern part of Oklahoma was to be included in the Dallas District, instead of Kansas City, I thought it was a mistake and that it would have been better if we had been placed in the Kansas City District.. However, since then, and after thinking the matter over more carefully, I am frank to say, that while from one standpoint it looks like it would be better for the State of Oklahoma to all be in one District, from a financial standpoint and the further fact of Dallas being very centrally located as a cotton point and in a sense having a great deal more transactions and business with banks in the cotton section than Kansas City, it appears to me, as you say, that the Dallas Regional Bank should be more competent and possibly have more experience in the handling of cotton than the Kansas City Bank would. On this account, I am very much in favor of the District being left alone and the Southern part of Oklahoma remaining in the Dallas District. * * * * Hoping, however, that this opposition may not amount to Much and that there will nothing come of it, and the District .remain unchanged, and further, that I have made myself clear, as to how I stand personally, with regard to same, with kindest regards and best wishes, I remain, Yours very truly, F. B. CONRAD, President. THE FIRST NATIONAL BANK OF MARLOW. Marlow, Okla., Aug. 29, 1914. (17) BEN 0. SMITH, President, F. & M. National Bank, Fort Worth, Texas. Dear Mr. Smith: In my opinion, there is not much opposition to being in With Texas among the small banks, or at least nothing like there was at first. Anyway, there is no agitation of it. Most of us have come to the conclusion that it makes no difference http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 70 where we are. So many much greater and more grave matters are coming up that I doubt if anything is tried that will change the District lines. Today's papers say that a meeting of bankers is on in Oklahoma City, but I had heard nothing of it, although I am reported to be there. A few people would like to have the change made, but they are not getting up much enthusiasm. With the best of regards, and hoping to have more business some of these days for you, Yours very truly, T. L. WADE, Cashier. THE STATE NATIONAL BANK. Marlow, Okla., Jan. 9, 1915. (18) FEDERAL RESERVE BOARD, Washington, D. C. Gentlemen: Some months ago, when we were advised that we were to be placed in the Dallas District (No. 11), we, along with others from this country, entered our protest, as most of our business had been in Kansas City and St. Louis. After further consideration of the matter, we desire to say that we will, for the present, withdraw our protest and will be satisfied to remain in the Dallas District until the system has been given a thorough trial, and until such time as we ascertain from experience whether or not, in our judgment, it would be better for us to be in the Kansas City District. Respectfully, 0. R. McKINNEY, Cashier. THE FIRST NATIONAL BANK. Poteau, Okla., Jan. 12, 1915. (19) MR. B. A. McKINNEY, Federal Reserve Bank, Dallas, Texas. Dear Buck: In these days of agitation, financial and otherwise, I am becoming convinced that to "Let well enough alone" is a good axiom. The strenuous effort to effect a change in Federal Reserve District No. 11, adding Oklahoma to the Kansas City Dis- http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 71 trict, seemed to me to be a proper procedure and. for the best interest of all of we Oklahoma bankers who petitioned; •and, not to be contrary, I signed the petition for this bank, like a majority. Since the matter will soon be heard by the Federal Reserve Board, I have given the question of changing, more thought than heretofore—at least more intelligent thought —for the reason that I now know more about the Federal Reserve Banks and their functions than heretofore, and I imagine this is true of the most of the bankers. Take the individual case of this bank. After summing it all up, I find our mail service to Dallas is a few hours shorter than into Kansas City. The SERVICE of one Federal Reserve Bank appears to be about the same as the other. So far as I know, the discount rates are the same. Items for credit and balances to check against seemingly are just as convenient for us as they would be in Kansas City or St. Louis. A few weeks' operation of the banks has changed my ideas concerning them. I do not want to be put in the position of going back en the petition I signed along with the other Oklahoma bankers, but thought would drop you a line to say that since finding out more about the modus operandi of Federal Reserve Banks, that it makes do difference to me if the District remains like it is. In fact, I believe I prefer it now, as it is. I have felt that the strong effort being put forth to change the boundary lines would naturally cause you to take a keen interest in the matter from a personal standpoint, and I wanted, in this letter, to express my "honest convictions" that perhaps a lot of us had rushed into something that we really didn't know whether we wanted it or not. With the kindest of regards, I remain, Cordially and sincerely yours, TOM WALL, Cashier. THE FARMERS AND MERCHANTS NATIONAL BANK. Roff, Okla., Aug. 25. 1914. (20) RESERVE BANK ORGANIZATION COMMITTEE, Washington, D. C. Sirs: We understand that there is a move on foot to place the entire State of Oklahoma in the Kansas City Reserve District. If the Dallas District will be as able to take care of http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 72 our needs for funds as the Kansas City District, we prefer that the Districts be left as they are, for the reason that we are a cotton growing section and our needs are identical with most of the banks of the Dallas District. We are not in favor of any move that will delay the completion of the organization of the Reserve Banks. Yours very truly, FARMERS & MERCHANTS NATIONAL BANK, By J. A. GILBERT, Cashier. Tishomingo, Okla., Dec. 19, 1914. (21) TO THE HONORABLE FEDERAL RESERVE BOARD, Washington, D. C. Gentlemen: The undersigned banks of Johnston County, Oklahoma, hereby petition your Honorable Board to make no change in the lines of the Federal Reserve District as established by the Organization Committee, and we express ourselves as satisfied with the lines as they now exist. If in the event the lines should be disturbed in any manner, we ask that at least Johnston County be permitted to remain in the Dallas District. Respectfully yours, THE TISHOMINGO NATIONAL BANK, L. L. CALDWELL, Cashier. FIRST NATIONAL BANK, Wapanucka, Okla. R. E. WADE, President. FIRST NATIONAL BANK, Milburn, Okla. J. W. WALKER, Cashier. *FARMERS NATIONAL BANK, Tishomingo, Okla. C. B. BURROWS, President. THE FIRST NATIONAL BANK. Wapanucka, Okla., Dec. 22, 1914. (22) MR. B. A. McKINNEY, Durant, Okla. Dear Sir: Your letter bearing date of the 19th inst. received, and In reply will say that we are perfectly satisfied in the District No. 11, and will be glad to sign the petition to stay in 73 the Dallas District, and be glad to do all we can for you. I remain, Yours very truly, R. E. WADE, President. EXHIBIT B. THE OKLAHOMA BANKERS ASSOCIATION. Office of the Secretary. Oklahoma City, April 7, 1914. (1) TO 0. B. A. MEMBERS IN DALLAS DISTRICT. Gentlemen: Without presuming in the least to dictate in the matter of the regional reserve bank Districts, we feel that another letter at this time will be welcomed by you, in view of the many urgent letters and telegrams we have received. The writer has much information which it is impossible to convey in a letter, but the main point is: After communicating with Senators Owen and Gore, all Oklahoma's Congressmen, and after consulting with bankers in Kansas City personally and canvassing the situation as thoroughly as time has permitted, we are convinced that there is a reasonable chance, by proper activity, to get Oklahoma placed in one regional district. As for a branch bank, the administration forces are inclined to adopt the policy of placing branches only where there are not overnight facilities for handling business. Under that policy, and the Districts as now framed, every city in Oklahoma is barred from obtaining a branch. Our information is, that 95% of the Oklahoma banks that have been placed in the Dallas District are very much opposed to this arrangement. We ask that any bank that is contented to remain in that District, please write us at once. All others should fill out the enclosed form AND RETURN TO THE WRITER (Do not mail it to Washington). This is VERY IMPORTANT AND SHOULD HAVE YOUR IMMEDIATE ATTENTION. Further suggestions will follow developments. Very truly yours, W. B. HARRISON, Secretary 0. 13. A. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 74 THE OKLAHOMA BANKERS ASSOCIATION. Office of the Secretary. Oklahoma City, Okla., April 13, 1914 (2) TO THE BANK ADDRESSED: We have not as yet received from you one of the signed slips like the enclosed which we mailed you a week ago and asked to be returned immediately. This is exceedingly important, and we cannot put too much stress on the necessity of hearing from every Oklahoma bank in the Dallas District at once definitely. If you want to be in the Dallas District, please state that plainly. If you do not, sign this slip today, and mail to us, unless you already have one in the mail. We admit that there is only a fighting chance to get the District changed, but we have good reason to believe it can be done. Today we have received from Washington a signed statement by a high government official, whose support means as much to us as that of any other man, saying he thinks this change can be made if the banks will all sign the protest. It is very important to not only send this in, but to wire your Congressman and Senators, unless you have already done so. Let them hear from you direct in protest against the lines as at present formed, if you feel that way about it. We have received 220 replies to date, of which 215 have been protest. Remember we are working day and night on this proposition in your interest and intend to keep up that work until we get a decision. So please do your part by forwarding the slip to us by next mail. Yours truly, W. B. HARRISON, Secretary 0. B. A. EXHIBIT C. THE FIRST NATIONAL BANK. Altus, Okla., Dec. 24, 1914. (1) MR. FRANK KELL, Director of the Federal Reserve Bank, 11th District, Dallas, Texas. Dear Sir: In my opinion it would be unwise to make any change of the line of Southern Oklahoma from this District, especially 75 Just now. Trust your Board will consider the matter carefully and decide not to make any change. Yours very truly, J. A. HENRY, President. THE FIRST NATIONAL BANK. Broken Bow, Okla., Aug. 14, 1914. (2) HON. B. A. McKINNEY, Durant, Okla. Dear Sir: We desire to congratulate you upon your election as a Director of the Federal Reserve Bank of this District, and to congratulate the District upon its wise selection, which is entirely in accord with our own personal wishes. We are now ready to give our heartiest support towards retaining the Southern part of Oklahoma in the Dallas District, as it is now divided. We will oppose any plans which may be presented to include us in the Kansas City District, and if there is any way in which we may be of assistance in .this matter, kindly let us know. We are satisfied with our Directors, and with the District as it stands. Yours very truly, • F. L. MALLORY, (Seal) Cashier. THE FIRST NATIONAL BANK. Coalgate, Okla., 8-24-14. (3) FEDERAL RESERVE BOARD, Washington, D. C. Gentlemen: We have been informed recently that there is a movement on foot to transfer the banks in Southern Oklahoma now In the Eleventh District, headquarters at Dallas, Texas. Speaking for ourselves, as well as for many other bankers In this section of the State, we much prefer being in the Dallas District than that of Kansas City, and would regret very much to be transferred. Hoping that you may see matters as we do in regard to this matter, we remain, Very respectfully, R. P. CARSON, RPC-MKH Vice-Pres. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 76 THE FIRST NATIONAL BANK. Frederick, Okla., Jan. 8, 1915. (4) FEDERAL RESERVE BOARD, Washington, D. C. Gentlemen: It appears that an effort is being made by certain Oklahoma bankers to change the boundaries of this District, and that they have presented a petition to your Board, asking that all of Oklahoma except a few Southern Counties be transferred to the Kansas City District. It is my opinion that this movement was instigated by Oklahoma City bankers, and is being pushed on account of interests of Oklahoma City parties, and not for the welfare of a majority of bankers in the District. We are highly pleased with the selection of Dallas as the reserve center of this District, and hope that no change will be made in the present District lines. Yours very truly, J. B. BEARD, Jr. Cashier. THE NATIONAL BANK OF COMMERCE. Frederick, Okla., Sept. 1, 1914. (5) MR. OSCAR WELLS, V. P. First National Bank, Houston, Texas. Dear Mr. Wells: Your letter of the 29th ult. is just received, and I wish to say, in reply, that I have been one of the few in Southern Oklahoma who have been entirely content with the arrangement of the District. It appears to me that the arrangement was perfected after a comprehensive and a thorough examination into the claims of all parties concerned, and by a committee which had a much better opportunity to weigh matters with justice. I feel altogether inclined to remain in the Dallas District, and in fact am glad that we are placed there. I am glad you wrote me about the matter, and with kind personal regards, I am, Yours truly, C. W. HOWARD, CWH-MMC Pres. 77 THE FIRST NATIONAL BANK. Grandfield, Okla. Apr. 4, 1914. (6) CITY NATIONAL BANK, Dallas, Texas. Gentlemen: We wish to congratulate you and your city upon the securing of the location for one of the Regional Reserve Banks. And we are indeed glad to be located in a District with the central city so close to our doors. We thank you for the services tendered in connection with handling business through the Reserve Bank, and when the Opportune time arrives for opening an account in Dallas, we shall remember your good bank. Yours respectfully, 0. E. MAPEL, Cashier. THE FIRST NATIONAL BANK. Kiowa, Okla., Aug. 14, 1914. (7) FEDERAL RESERVE BOARD, Washington, D. C. Gentlemen: Referring to the effort of Oklahoma City to change that Part of Oklahoma that is in Federal Reserve District Eleven, from the Dallas to the Kansas City District, we are pleased With the District as made, and feel that the business of Southern Oklahoma can be best handled through the Dallas District, and desire to protest against this change being made. Yours Respect., C. W. CRUM, (Seal) Cashier. THE LEHIGH NATIONAL BANK. Lehigh, Okla., June 11, 1914. (8 and 9) TO THE FEDERAL RESERVE BOARD, Washington, D. C. Gentlemen: We, the undersigned banks, of Lehigh, Oklahoma, hereby Protest against any change being made toward re-districting the Southern part of Oklahoma, which is located in the 11th Reserve District. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 78 The undersigned banks are satisfied with Dallas for the reason that we have daily connections with this city, whereby we believe that it will be to our best interest to be associated with this bank. Further, we do not believe that the Reserve Board will allow any discrimination in the interest rates, owing to the strong demand for assistance during the marketing of our cotton crop, which the entire 11th District is called upon to finance at the same time. Assuring you of any assistance or information that we have, at any time called upon, we are, Very truly yours, THE LEHIGH NATIONAL BANK, Lehigh, Okla. TOM MITCHAM, Cashier. THE MERCHANTS NATIONAL BANK, Lehigh, Okla. OLLIE L. BEARD, Cashier. THE FIRST NATIONAL BANK. Milburn, Okla., June 6, 1914. (10) TO THE FEDERAL RESERVE BOARD, Washington, D. C. Gentlemen: We feel it our duty to say a few words in behalf of the Reserve Board in locating the District line as they did through the State of Oklahoma. Inasmuch as the Southern part of the State is devoted to cotton growing, as well as the balance of the Eleventh District. We believe it would also be to the best interest of all concerned should we have a Board of Directors coming from Texas, the Southern part of New Mexico, and the Western part of Louisiana, rather than one coming from Colorado, Wyoming, Nebraska, and those other States that know nothing about the problems of a bank charged with the duty of financing a cotton crop. It appears to us that the Federal Board has acted wisely in placing us in the Eleventh District, with Dallas as a reserve center. We therefore commend them. Yours very truly, C. B. CARTER, (Seal) Asst. Cashier. 79 THE FIRST NATIONAL BANK OF ROM?. Rolf, Okla., Aug. 21, 1914. (11) FEDERAL RESERVE BOARD, Washington, D. C. Sirs: There is a movement on foot among some of the bankers of Oklahoma to try to have all of Oklahoma placed in the Kansas City Federal Reserve District. We understand that a delegation is already on the way to Washington for that purpose. We feel that there are a great many of the bankers of Southern Oklahoma who feel as we do about the matter: We would much prefer that the arrangement be left just as it is. The interests of Southern Oklahoma are identical with those of Texas and the other cotton States. We are strictly a cotton country, and what would serve Texas the best would also be best for us. On the other hand, were we to be placed with Kansas City, we would only be a very small cotton producing community, placed with a large country, where practically nothing is known about cotton, or the handling of it. Dallas Is much easier to reach from this section by mail or telephone, and we feel that practically everything is in favor of Dallas, over Kansas City, as far as Southern Oklahoma is concerned. We are sure that in considering this proposed •change, both Sides of the question will be fully considered, and we feel that you will decide to let the Districts remain as they are. No doubt, there will be more agitation for a change than there is against a change, as there are a great many more banks in Oklahoma who are in the Kansas City District, than are in the Dallas District, but we have discussed the matter With a great many of the bankers of Southern Oklahoma, and we believe a great majority favor remaining in the Dallas District. Very respectfully, H. HUGHES, Cashier. THE FIRST NATIONAL BANK. Ryan, Okla., Jan. 7, 1915. (12) MR. OSCAR WELLS, Governor, Federal Reserve Bank, of Dallas. Dear Sir: While there is being made strong efforts to re-district our section of Oklahoma by a few of our members, we feel http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 80 that it will revert to a great inconvenience to us in the way of collecting items, proceeds of our products, nearly all of which are shipped towards the Gulf ports, thereby placing the credits of all country banks like ours in Texas cities. It Is always desirous to get as prompt collection or returns for products shipped. If the clearance arrangements are solved, as desired, we will then of necessity have to clear such items in opposite direction to the point drawn on and delaying payment. Southern Oklahoma products are similar to those of North Texas, cotton being our most valuable product, all of which is shipped to Galveston port. For these reasons, we think it to our best interest to remain as originally platted, and trust your good officers will urge upon the Reserve Board to leave the District remain with our section, at least, in District 11, for which we will greatly appreciate and think it to our best interest that you do so. Thanking nu for whatever assistance you can lend to this end, and with continued best wishes, beg to remain, Yours very truly, J. H. WHITESIDE, Cashier. THE TISHOMINGO NATIONAL BANK. Tishomingo, Okla., June 15, 1914. (13) FEDERAL RESERVE BOARD, Washington, D. C. Sir: I notice from the press that there will be a committee from Oklahoma appear before you in an effort to get all of the State of Oklahoma placed in the Kansas City Federal Reserve District. This committee will doubtless represent that 95% of the banks of Southern Oklahoma of the Dallas Reserve District are protesting against being left in the Dallas District, and doubtless there are a majority of the banks south of the Canadian River on record as protesting against the division, but I wish to submit that the majority of these protests have been made as a direct result of a persistent campaign waged by Oklahoma City bankers. These Oklahoma City bankers have emphasized the fact that our State has been divided and put in two different Districts, while under present conditions, our State is divided Into a dozen or more different Districts. Some of us borrow our money from, and keep our reserves with, New York, while 81 I others are with St. Louis, Chicago, Kansas City, Fort Smith, Little Rock or various other centers. You will find on investigation that the reasons given by these banks protesting against Southern Oklahoma being placed with Dallas for wanting the District changed, will vanish as soon as the Federal Reserve system is put in actual operation. The Oklahoma City banks sent out the protests all ready to be signed up by the different banks and urged that every bank join in the protest. I thoroughly believe that it is unwise to make any change in our District at this time, and that time will prove the wisdom of the Organization Committee in dividing Oklahoma along the line of its natural line of division. Respectfully submitted, L. L. CALDWELL, Cashier. WAURIKA NATIONAL BANK. Waurika, Okla., .Sept. 1, 1914. (14) OSCAR WELLS, Houston, Texas. Dear Sir: Replying to yours of 29th ult.: Our judgment has been all the while to keep every interest together as much so as possible. We think the Southern part of Oklahoma should be kept in the 11th District, that being the cotton producing part of the State. Those of us who hale from the South seem, and the cotton country seem, to be of that opinion; but, when you find a banker from the North, who Is not acquainted with the cotton business, as we are, and they want out and go to Kansas City or St. Louis. We think it a grave mistake to transfer us to one of those Districts. We think we would be lost sight of in the mixup of the commercial and cattle interest. Of course, there is argument pro and con, BUT LET US STAY WHERE WE ARE. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Yours very truly, WADE ATKINS, President. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 82 EXHIBIT D. SAM I. HYNDS & CO. Cotton Merchants. Durant, Okla., Dec. 19, 1914. MR. B. A. McKINNEY, Cashier, Durant National Bank, Durant, Okla. Dear Sir: We beg to advise that all cotton produced in Oklahoma and sold for export to foreign countries, is shipped from Oklahoma via Galveston or New Orleans, and in our opinion fully seventy-five per cent of Oklahoma cotton sold to New England or Canadian mills, is also shipped via Galveston or New Orleans, and practically all cotton produced south of the Canadian River or Rock Island Railroad, is shipped via Gal, veston, thence by water to New England or Canadian points, as the combination of rail and water rates via the Gulf is less than the all rail rates from Southern Oklahoma. We also beg to point out that farmers and merchants who ship cotton on consignment, forward same to Houston, Galveston or New Orleans; in other words, almost the entire Oklahoma cotton crop is shipped via the Gulf. Yours very truly, SIH-M SAM I. HYNDS & CO. EXHIBIT E. KEMP & KELL. Wichita Falls, Tex., Dec. 21, 1914. MR. B. A. McKINNEY, Durant, Okla. My dear Mr. McKinney: I have your favor of 19th inst. The movement of the wheat crop from that part of Oklahoma included in the 11th Regional District, is nearly exclusively to the south, either through Galveston and New Orleans for export or to Texas for local consumption. In the territory above named, there is probably a larger per cent of the grain moved to Texas for local consumption by reason of the fact that the adjustment of rates from this territory is more favorable to a Texas destination on a domestic basis than to any other point for consumption, either for domestic or export use. Most of the wheat grown in this territory above outlined is grown in the Southwestern part of the State of Oklahoma, where the commercial affiliation is largely with Texas con- 83 nections, and I might say, almost exclusively with Texas connections, so far as the grain business is concerned. The surplus oats grown in the State of Oklahoma embraced in the 11th District, is very largely consumed in the Southeast, either in Arkansas and Louisiana, or beyond the river, through the Memphis gateway. Some of this comes to Texas, and is consumed in a local way, when the Texas crop is short; but most of the crop in the territory above named goes to the Southeast. The surplus corn of this part of Oklahoma is nearly all moved to Texas or to Galveston and New Orleans for export. Seldom does the surplus corn of that section move in any other direction. Now and then you will find seasons when, for a short while, it will move through the Memphis gateway. This lasting only until such time as the Kansas corn may commence to move freely. I feel quite sure that so far as the surplus grain grown In the territory above named is concerned, that 80 or 90 per cent of it moves to the South and Southeast, either for local consumption in that territory, or for export through Galveston and New Orleans. I do not think that the opening of the Panama Canal will Increase or in any wise affect the movement of grain from this territory for export, as the Pacific coast is well supplied With grain grown west of the mountains. Now and then we May have a shipment of oats to go to the Pacific coast, during Years when the crop of this cereal is short in that country. Later, we may be able to increase our volume of flour moving out through the Gulf ports for export by extending our trade to the west coast of South America, and probably the PhilliPPine Islands and Japan. This, however, is quite remote and in a measure quite doubtful. There is no doubt that the imports through Galveston and New Orleans, induced by the opening of the Panama Canal, Will largely increase the volume of tonnage destined to Southern Oklahoma, as the rate from the Pacific coast, through the canal to the entry ports of New Orleans and Galveston, plus the rail rate from New Orleans and Galveston to final destination will be lower than the all rail rate across the continent. Indeed, the canned goods shipments have already commenced to Move in this direction. I shall be pleased to have your further inquiries at any time that you think I can be of service to you. With kindest regards, I am, Yours truly, PKG. FRANK KELL. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 84 EXHIBIT F. THE FIRST NATIONAL BANK. Achille, Okla., June 12, 1914. (1) FEDERAL RESERVE BOARD, Washington, D. C. Gentlemen: Inasmuch as the banks in the Northern part of Oklahoma are making a strong fight to have all of the State of Oklahoma placed in Reserve District Ten, I wish to state how the Directors of this Bank feel about the situation. We realize that the Southern part of Oklahoma is a cotton growing country and that we have practically the same crops and conditions that the people of Texas have to contend with. The business trend of this part of Oklahoma is towards Dallas, and we feel that we ought to have our banking facilities in the same part of the country that our other business is centered. We are of the opinion that the Directors of the Federal Reserve Bank that is to be located at Dallas, in Reserve District Eleven, will better understand the conditions that we have to contend with and therefore will be in a better position to take care of the needs of the banks located in the Southern part of Oklahoma. We want to file a protest against any change that may be made in the lines of the Reserve Districts that would place this part of the State in Reserve District Ten. We feel that we properly belong to District Eleven, and we hope that no change will be made. Respectfully, W. G. COTNER, (Seal) Cashier. THE FARMERS AND MERCHANTS NATIONAL BANK. Achille, Oklahoma, June 10, 1914. (2) THE FEDERAL RESERVE BOARD, Washington, D. C. Gentlemen: The proposition to revise the findings of Committee in locating Southern Oklahoma serve District No. 11, Dallas, Texas, is very this section of the country, and, on behalf the Organization in Federal Reobjectionable to of this bank, I 85 the earnestly protest against any change being made from original decision. Our interests and those of Texas are closely merged, and I might say, identical. The character of the soil is practically the same, our crops are of the same character, and the principal markets for our cotton crop, give us exchange on Dallas, and Houston, Galveston and New Orleans in payment thereof, at the same time afford us a better price, because of the grain shorter haul to destination. Our corn and other small where Texas of sections those in crops find a ready market the agricultural conditions make other crops more profitable, In consequence of which, very little corn and oats are raised. with Since this town was established, our trade relations is it that feel I and Texas points have steadily increased, to our best interests that we remain a member of Federal Reserve District No. 11. It is probably true that the majority of Oklahoma banks maintain their reserves in Kansas City, St. Louis and New York, but this is no doubt due to the fact that these connections were established before reserve cities Were designated in Texas, and it is convenient to draw Eastern s from exchange in payment of the purchases of our merchant the that believe I r, Altogethe cities. Northern Eastern and Southg embracin Organization Committee acted very wisely in ern Oklahoma in the Dallas Reserve District, and I sincerely trust that no change will be made from the original desiginterests nation, because I believe it will be prejudicial to our to make any Change. Very truly yours, W. E. HOLLAND, Cashier. (Seal) THE ANTLERS NATIONAL BANK. Antlers, Okla., June 17, 1914. (3) THE FEDERAL RESERVE BOARD, Washington, D. C. Gentlemen: with This bank desires to express its complete satisfaction be to Eleven, being placed in Federal Reserve District Number logical the is Dallas opinion, our served from Dallas, Texas. In should Point for the Southern section of Oklahoma, and we or Louis St. the either be sorry, indeed, to be attached to opposition whatever that satisfied are We Kansas City District. the there has been to the placing of Southern Oklahoma in http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 86 Dallas District, is due to the agitation of persons whose personal interests would be better served by some other arrangement. Respectfully, ANTLERS NATIONAL BANK, By M. D. JORDAN, Cashier. THE FIRST NATIONAL BANK. Aylesworth, Okla., June 4, 1914. (4) THE FEDERAL RESERVE BOARD, Washington, D. C. Gentlemen: Realizing that there is an attempt being made by some of the banks in Oklahoma, located in District No. 11, and others in the Northern part of the State, to bring pressure to bear upon you to change the boundary lines of District No. 11, so as to place the entire State of Oklahoma in District No. 10, we, as a member bank of District No. 11, wish to say that we heartily endorse the division of Oklahoma made by you in outlining this District, and wish to enter our protest against any chango whatsoever in the territory included therein. The natural trend of the business of the banks of Southern Oklahoma is not toward Kansas City and the placing of us in District No. 10, would necessitate our forming new relations altogether. The State of Oklahoma should be divided, from the fact that the seasons are the same, and the crops grown are identical with those of the State of Texas, while the Northern portion of Oklahoma is the same as the State of Kansas. At the Bankers' Convention, held in Dallas for the purpose of recommending Directors for the Regional Bank, Southern Oklahoma was shown due consideration, both in giving us a Director, and in selecting B Class Directors who were thoroughly identified with Southern Oklahoma interests. Yours for District No. 11 to stand, Respectfully, JAS. N. KING, (Seal) Cashier. THE BENNINGTON NATIONAL BANK. Bennington, Okla., Aug. 25, 1914. (5) THE FEDERAL RESERVE BOARD, Washington, D. C. Gentlemen: After studying the situation carefully, I am convinced it 87 is to the best interest of our institution for us to remain in the Eleventh Reserve District. The matter of having our entire State placed in the District with Kansas City as the center, has been agitated, but owing to the fact that our interests are largely dependent upon the cotton crop, I feel that we can be served much better from Dallas than from Kansas City, and therefore write this letter in behalf of our section remaining as it is. Respectfully, L. E. BATCHELOR, President. FIRST NATIONAL BANK OF BENNINGTON. Bennington, Okla., Aug. 25, 1914. (6) THE FEDERAL RESERVE BOARD, Washington, D. C. Gentlemen: We desire to express our satisfaction and desire to remain In the Eleventh Reserve District, of which Dallas is the center. We feel that, owing to the fact of our principal resources being derived from the cotton crop, our conditions and circumstances will be better understood in Dallas than at Kansas City, and for this reason it is our wish to remain in this District. Respectfully, LEWIS T. MARTIN, Cashier. THE FIRST NATIONAL BANK. Bokchito, Okla., June 4, 1914. (7) HON. FEDERAL RESERVE BOARD, Washington, D. C. Gentlemen: We want to protest against any change that might be Made in the lines of the Federal Reserve District that we are in. The crops grown in Southern Oklahoma are the same as those grown in Texas and are not the same as those grown In the Kansas City District. We think the Committee acted wisely in dividing the State as they did. Respectfully, TOM KING, Cashier. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 88 THE FIRST NATIONAL BANK. Boswell, Okla., June 15, 1914. (8) THE FEDERAL RESERVE BOARD, Washington, D. C. Gentlemen: The purpose of this letter is to protest against any change whatever of that part of Oklahoma now in Distric t No. 11, to District No. 10. At first we were of the opinion that it would have been better if all of Oklahoma could have been in one Distric t, even If the Southern part would have been in Distric t No. 10; but, since studying the matter more closely, as to climate, soil, and crops, and the cattle and stock business, we are more fully convinced that we can be better served from the Dallas District, and it is our honest opinion that the same rule will apply to nearly all of the Southern part of Oklaho ma. As stated above, we are against any change whatev er of the North line of District No. 11, in Oklahoma, and our appeal to you is, that you make no change, as we believe that the Organization Committee showed good judgme nt in dividing the State as they did. Yours very truly, W. W. MORAN, Cashier. (Seal) THE STATE NATIONAL BANK. Boswell, Okla., June 16, 1914. .(9) THE FEDERAL RESERVE BOARD, Washington, D. C. Gentlemen: We desire to protest against any change in tile Federal Reserve Districts, so far as they relate to the Southern part of Oklahoma. We believe that our interests will best be served by continuing in the Dallas District, because of the similarity of the climate, soil and crops, and the further fact that the Dallas Bank will be managed by a Board of Directors who are acquainted with the needs of a bank in the cotton district. We believe the Organization Committee showed good judgment in dividing the State as they did, and we trust that the lines as established will remain as they are. Yours very truly, W. W. JETER, (Seal) Cashier. 89 THE CADDO NATIONAL BANK. Caddo, Okla., June 17, 1914. (10) THE FEDERAL RESERVE BOARD, Washington, D. C. Gentlemen: There has been considerable discussion lately among the banks of Southern Oklahoma with reference to being placed in District No. 11 with Dallas, and I desire to say that we are entirely satisfied with the condition as it is and certainly hope that no change will be made placing us in some other District. In the first place, I believe that we can get better service from Dallas, because they are nearer to us, and are more familiar with our wants. I believe it would be a mistake to change this part of Oklahoma back to the Kansas City District, as the Organization Committee would have to give a great deal of time to the consideration of other changes. I respectfully request that no change be made, Yours very truly, F. P. SEMPLE, (Seal Cashier. FP-MT THE FIRST NATIONAL BANK. Colbert, Ind. Ter., June 15, 1914. (11) THE FEDERAL RESERVE BOARD, Washington, D. C. Gentlemen: I understand that the bankers of Oklahoma City are making an effort to transfer us to Kansas City. I wish to protest against any change being made, as I feel that it is to our Interest to remain as we are. I feel that the Dallas District understands our needs and knows our condition better than Kansas City, and would be in a better position to assist us. I think the Federal Reserve Board acted wisely in placing this Portion of Oklahoma in the Dallas District. Yours very truly, W. H. McCARLEY, President. (Seal) http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 90 THE DURANT NATIONAL BANK. Durant, Okla., June 13, 1914. (12) THE HONORABLE FEDERAL RESERVE BOARD, Washington, D. C. Gentlemen: The officers and directors of this bank are thoroughly satisfied with the arrangement of the Federal Reserve Districts, and we protest against the Southern part of Oklahoma being transferred to the Kansas City District or any other District. We believe that the Organization Committee used good judgment in placing this part of our State in with Texas, because many of our citizens are from that State, we have similar soil and seasons, and similar crops. We know them and they know us. We believe that a large part of the sentiment manifested by some of the banks in Southern Oklahoma in desiring to be transferred to the Kansas City District is due in a great measure to the agitation brought on by Oklahoma City. They are in the Kansas City District themselves and believing that benefit would accrue to their own city by having Southern Oklahoma transferred to Kansas City have conducted a vigorous campaign to bring about that result. They lined up a great many banks in this part of the State before those banks had stopped to consider what was for their best interest. We think the enterprise they have shown is worthy of commendation, but then we feel the Board should also know to what extent they have been active in the effort to get Southern Oklahoma transferred to the Tenth District. We believe that a bank managed by a Board of Directors coming from Colorado, Wyoming, Nebraska and the other States of the Tenth District, would not know and care for our needs like the Texas bank would. Yours very truly, (Seal) JAS. R. McKINNEY, JRM-MES Vice-President. THE STATE NATIONAL BANK. Durant, Okla., June 13, 1914. (13) HONORABLE FEDERAL RESERVE BOARD, Washington, D. C. Gentlemen: This bank desires to express its satisfaction with the Federal Reserve Districts as established by the Organization Committee. We believe that our interests will best be served 91 by connection with the Dallas Reserve Bank, rather than any other District to which we might be transferred. We think that the Committee showed a thorough consideration of our needs when they separated the cotton growing region of Oklahoma from the other section of the State and placed it along with Texas and the other States which have cotton as their chief product. We respectfully protest against any change being made in our Reserve Bank connections. Respectfully yours, GREEN THOMPSON, GT-MES Vice-President. THE FIRST NATIONAL BANK. Fort Towson, Okla., 6-23-14. (14) FEDERAL RESERVE BOARD, Washington, D. C. Gentlemen: Some time ago we made a protest against having been Placed in the Dallas (No. 11) District, but we now want to Withdraw our objection, and state that we are perfectly satisfied with said District, as we feel that our interests are more Closely allied with the other banks in this District .than they would be with those of any other to which we could be attached. Yours truly, CHARLIE SWITZER, Cashier, THE FIRST NATIONAL BANK OF HAWORTH, Haworth, Okla., Aug. 14, 1914. (15) MR. B. A. McKINNEY, Federal Reserve Bank Director, District No. Eleven, Durant, Oklahoma. Dear Sir: Having our attention called to the fact, by our mutual friend, Mr. R. D. Wilbor, of Hugo, Oklohoma, that we had failed to file our protest with you, protesting against being attached to the Kansas City Federal Reserve District, as suggested by the Kansas City and Oklahoma City bankers: In this connection beg to state that we are unconditionally opposed to being attached to the Kansas City Federal Reserve http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 92 District. Kansas City is foreign to us in a financial way, and they are not acquainted with the local conditions of Southeast Oklahoma. And we further believe that the Federal Reserve Board acted fairly and impartially in making the division of Oklahoma as they did and putting Southeast Oklahoma in the Dallas District, thereby making it possible for the Directors of the Federal Reserve Bank to know the conditions of each locality in their district. You can use the above letter for your authority to file our protest against any change in the Federal Reserve District No. 11, and if we can serve you further, command us. Yours very respectfully, A. M. HOFFMAN, (Seal) Cashier. THE FIRST NATIONAL BANK. Hugo, Okla., June 16, 1914. (16) FEDERAL RESERVE BOARD, Washington, D. C. Gentlemen: We would like to express ourselves as being satisfied in District No. 11. We believe that the lines as they are now drawn, in reference to that part of Oklahoma being in District No. 11, were well defined by the Organization Committee. This from the fact that the greater part of this section mentioned Is a cotton growing country, and naturally should be served by a bank which will be supported largely by this factor. We oppose being annexed to the Kansas City District, and are entirely satisfied in District No. 11. Yours very truly, R. D. WILBOR, (Seal) President. FIRST NATIONAL BANK. Idabel, Okla., June 17, 1914. (17) HON. ORGANIZATION COMMITTEE, Federal Reserve Board, Washington, D. C. Gentlemen: It appears that considerable effort is being put forth by bankers of this State in the 10th District to bring about a change whereby all of Oklahoma would be in the 10th District. 93 At the beginning, we were disappointed, looking at it from a patriotic view, in having our State divided in two Districts, but further consideration makes it plain that our interest and that of Texas are very much the same in industry, and we feel that our interest will be best served in the 11th District. Respectfully, H. C. MORRIS, Cashier. THE FIRST NATIONAL BANK. Kenefick, Okla., June 6, 1914. (18) FEDERAL RESERVE BOARD, Washington, D. C. Gentlemen: We desire to state that we think the Organization Committee used good judgment in placing Southern Oklahoma in the Eleventh Federal Reserve Bank District, as that part of Oklahoma placed in the Dallas District is essentially a cotton producing region. We feel that our interests will be served better by a Board of Directors coming from Texas, Western Louisiana, Southern New Mexico, than one coming from Nebraska, Kansas, Colorado, Wyoming, or any other State that knows nothing of the great problems involved in financing the cotton crop. Respectfully, BRUCE MAY, Vice-President. '(Seal) THE FIRST NATIONAL BANK. Kingston, Okla., June 6, 1914. (19) FEDERAL RESERVE BOARD, Washington, D. C. Gentlemen: cutting We wish to commend the action of your Board in growing cotton a is off that part of the State of Oklahoma which section and attaching it to the Eleventh District. by a We feel that our interests would be better served of part Western the Texas, from Board of Directors coming one than Louisiana, and the Southern part of New Mexico, those other coming from Colorado, Wyoming, Nebraska, and of a bank problems the about nothing States that know http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 94 charged with the duty of financing a cotton crop, and we sincerely hope that no change will be made in this District. Yours very respectfully, JNO. LANDRAM, (Seal) Cashier. THE FIRST NATIONAL BANK. Madill, Okla., June 6, 1914. (20) (21) (22) RESERVE BANK ORGANIZATION COMMITTEE, Washington, D. C. Gentlemen: We, the undersigned National Banks of Madill, Oklahoma , believe that your Committee exercised a wise judgment in locating Southern Oklahoma in the Dallas District. Geographically, Dallas is convenient and easily accessible to our section; a large percentage of the population of Southern Oklahoma is composed of Texans, which tends to a closer acquaintance of the two peoples, and thus obviates what might be a serious problem in the selection of suitable men to direct the affairs of the District Reserve Bank. The agricultural conditions and products of Southern Oklahoma and Texas are almost identical, and the business relations between the two sections are close and of long standing. We understand there is a movement towards locating our section in another District. In view of the conditions stated above, we think the change would be very unwise, and we wish to enter our unqualified protest against any change whatever. Respectfully, MADILL NATIONAL BANK, By J. W. DERRICK, Cashier. CITY NATIONAL BANK, By W. H. LAWRENCE, President. FIRST NATIONAL BANK, By F. B. HERRON, Cashier. THE FIRST NATIONAL BANK. Soper, Oklahoma, 6-17-14. (23) FEDERAL RESERVE BOARD, Washington, D. C. Gentlemen: The Reserve Bank Organization Committee, in establishing the Reserve Districts, saw fit to place Southern Oklahoma, in 95 which we are fortunate enough to be located, in District No. 11, with headquarters in Dallas, Texas. In view of the complaint which has been made in regard to the action of the Board, in dividing the State of Oklahoma between Districts Nos. 10 and 11, the officers and directors of The First National Bank of Soper desire to go on record as being of the opinion that the interest of Southern Oklahoma and the interest of this bank can be better served from Dallas than it can be from Kansas City, and to further express themselves as being perfectly satisfied with the action of the Committee of the formation of the Bank Reserve District of the Southwest. Yours very truly, A. J. STEEN, Cashier. (Seal) THE FIRST NATIONAL BANK OF STERR,ETT. Calera, Okla., Aug. 22, 1914. (24) HONORABLE FEDERAL RESERVE BOARD, Washington, D. C. Gentlemen: The officers of this bank are satisfied with the action of the Organization Committee in placing this part of Oklahoma in the Dallas Reserve District, and protest against any change In the lines that would transfer us to another District. As we are in what is essentially a cotton-growing region, we think we are fortunate in being included in a District whose Directors so thoroughly understand the cotton business; and especially is this true in view of the difficulty that will confront us this fall in handling the cotton business on account of the European war. Respectfully, J. C. KENTON, Cashier. THE FIRST NATIONAL BANK OF VALLIANT, OKLAHOMA. August 21, 1914. (25) FEDERAL RESERVE BOARD, Washington, D. C. Gentlemen: Relative to the opposition of the State being divided as to the Reserve Districts, beg to request that any and all opposition voiced by this bank, be ignored. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 96 We have gone into the proposition and feel that placing the Southern part of this State in with Texas, was an act of wisdom, owing to the community of interest between this section of the State and Texas. Thanking you to act in accordance with the above covering our wishes, we are, Yours truly, THE FIRST NATIONAL BANK, VALLIANT, OKLAHOMA, (Seal) By JAS. M. CECIL, Attest: President. W. E. WATKINS, Cashier. WEW-LCS THE FIRST NATIONAL BANK. Woodville, Okla., June 10, 1914. (26) FEDERAL RESERVE BOARD, Washington, D. C. Gentlemen: In the matter of the protest which is being made on behalf of the State of Oklahoma by certain of the banks located therein against the action of the Federal Reserve Bank Organization Committee, I beg to advise you that it is the desire of this bank that the District remain as laid out and designated and, in support of my protest against any change, beg to submit that, in my opinion, the interests of the banks located South of the Canadian River in Oklahoma will be best served by remaining in District No. 11, Dallas, rather than by being attached to the 10th Reserve District, Kansas City. The principal crop of this section of the country is cotton, and all the exchange for that commodity goes south either to Dallas, Houston, Galveston or New Orleans, and cattle and hogs are shipped mainly to Fort Worth, Texas, while our corn and small grain products find a market either at home, or are distributed through those sections of Texas which raise little feedstuffs. The character of the soil is practically the same as that of Texas; the majority of our people are Texas born or descendants from Texas people, and I cannot see any advantage that can result from any change in the decision of the Organization Committee, while there are many advantages that will accrue to us by being so closely in touch with the Federal Reserve Bank located at Dallas, and I sincerely trust that the 97 lines, as originally fixed, attaching Southern Oklahoma to the Dallas District No. 11, will be sustained. Very truly yours, M. U. AYRES, Cashier. (Seal) EXHIBIT G. OKLAHOMA NATIONAL BANKS IN ELEVENTH DISTRICT County Town Bank *Bryan *Farmers & Merchants Nat'l. Bank Achille *Bryan Achille *First National Bank Pontotoc Ada Bank National First Pontotoc Merchants & Planters Nat'l. Bank Ada Jefferson Addington First National Bank Grady Alex First National Bank Pontotoc Allen First National Bank Jackson Altus City National Bank Jackson Altus First National Bank Caddo Anadarko First National Bank Caddo Anadarko National Bank of Anadarko *Pushmataha Antlers *Antlers National Bank *Pushmataha Antlers *Citizens National Bank Caddo Apache First National Bank Custer Arapaho First National Bank Carter Ardmore Ardmore National Bank Carter Ardmore Bank First National Carter Ardmore State National Bank Atoka Atoka American National Bank *Marshall Aylesworth *First National Bank *Bryan Bennington *Bennington National Bank *Bryan Bennington Bank *First National Carter Berwyn First National Bank Jackson Blair First National Bank McClain Blanchard First National Bank *Bryan Bokchito *First National Bank *Choctaw Boswell Bank *First National *Choctaw Boswell *State National Bank Tulsa Bow Broken First National Bank *Bryan Caddo *Caddo National Bank *Bryan Caddo *Security National Bank Hughes Calvin Bank National Calvin Hughes Calvin First National Bank Grady Chickasha Bank Chickasha National Grady Chickasha Citizens National Bank Grady Chickasha First National Bank http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 98 Bank Oklahoma National Bank First National Bank Oklahoma State Nat'l. Bank First National Bank *First National Bank First National Bank Cordell National Bank Farmers National Bank State National Bank First National Bank Peoples State National Bank First National Bank City National Bank Duncan National Bank First National Bank *Durant National Bank *First National Bank *State National Bank American National Bank First National Bank First National Bank *First National Bank Francis National Bank First National Bank National Bank of Commerce First National Bank First National Bank Farmers National Bank First National Bank National Bank of Hastings *First National Bank First National Bank State National Bank City National Bank F. & M. National Bank First National Bank American National Bank Farmers National Bank First National Bank State National Bank City National Bank National Bank of Commerce State National Bank *First National Bank Town County Chickasha Grady Clinton Custer Clinton Custer Coalgate Coal Colbert *Bryan Comanche Stephens Cordell Washita Cordell Washita Cordell Washita Custer City Custer Custer City Custer Davis Murray Duncan Stephens Duncan Stephens Duncan Stephens Durant *Bryan Durant *Bryan Durant *Bryan Dustin Hughes Eldorado Jackson Elk City Beckham Fort Towson *Choctal,v Francis Pontotoc Frederick Tillman Frederick Tillman Gotebo Kiowa Grandfield Tillman Hammon Roger Mills Hartshorne Pittsburg Hastings Jefferson Haworth *McCurtain Heavener Lenore Heavener Lenore Hobart Kiowa Hobart Kiowa Hobart Kiowa Holdenville Hughes Holdenville Hughes Holdenville Hughes Holdenville Hughes Hollis Harmon Hollis Harmon Hollis Harmon Hugo *Choctaw 99 Bank *Hugo National Bank Farmers National Bank First National Bank *First National Bank *First National Bank Keota National Bank *First National Bank First National Bank Peoples National Bank City National Bank First National Bank Lawton National Bank Lehigh National Bank Merchants National Bank First National Bank First National Bank *City National Bank *First National Bank *Madill National Bank First National Bank Mangum National Bank First National Bank Marietta National Bank National Bank of Marlow State National Bank Farmers National Bank First National Bank American National Bank City National Bank First National Bank First National Bank First National Bank First National Bank First National Bank First National Bank First National Bank First National Bank National Bank of Commerce PauIs Valley Nat'l. Bank First National Bank National Bank of Commerce Chickasaw National Bank Union National Bank First National Bank http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis County Town *Choctaw Hugo Caddo Hydro Caddo Hydro *McCurtain Idabel *Bryan Kenefick Haskell Keota *Marshall Kingston Pittsburg Kiowa Pittsburg Kiowa Comanche Lawton Comanche Lawton Comanche Lawton Coal Lehigh Coal Lehigh Garvin Lindsay Kiowa Lone Wolf *Marshall Madill *Marshall Madill *Marshall Madill Greer Mangum Greer Mangum Love Marietta Love Marietta • Stephens Marlow Stephens Marlow Garvin Maysville Garvin Maysville Pittsburg McAlester Pittsburg McAlester Pittsburg McAlester Johnston Milburn Johnston Mill Creek Grady Minco Kiowa Mountain View Carter New Wilson Jackson Olustee Garvin PauIs Valley Garvin PauIs Valley Garvin Pauls Valley LeFiore Poteau LeFlore Poteau McClain Purcell McClain Purcell Pittsburg Quinton http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 100 First National Bank F. & M. National Bank First National Bank First National Bank First National Bank Beckham County National Bank First National Bank First National Bank First National Bank *First National Bank First National Bank *First National Bank American National Bank First National Bank First National Bank First National Bank First National Bank Park National Bank First. National Bank Temple National Bank First National Bank Farmers National Bank First National Bank Tishomingo National Bank Farmers National Bank *First National Bank First National Bank National Bank of Verden First National Bank Walter National Bank First National Bank First National Bank First National Bank Waurilta National Bank First National Bank German National Bank American National Bank First National Bank Latimer County National Bank *First National Bank First National Bank Southern National Bank Ringling Carter Roff Pontotoc Roff Pontotoc Rush Springs Grady Ryan Jefferson Sayre Beckham Sayre Beckham Sentinel Washita Snyder Kiowa Soper *Choctaw Spiro LeFiore Sterrett *Bryan Stigler Haskell Stigler Haskell Stonewall Pontotoc Stratford Garvin Stuart Hughes Sulphur Murray Talihina LeFiore Temple Cotton Thomas Custer Tishomingo Johnston Tishomingo Johnston Tishomingo Johnston Tupelo Coal Valliant *McCurtain Verden Grady Verden Grady Walter Cotton Walter Cotton Wapanucka Johnston Washington McClain Waurika Jefferson Waurika Jefferson 'Weatherford Custer Weatherford Custer Wetumka Hughes Wetumka Hughes Wilburton Latimer Woodville *Marshall Wynnewood Garvin Wynnewood Garvin Total number of member banks in the Eleventh District in Southern Oklahoma-166. 101 Total number of member banks in the Counties of Bryan, Choctaw, Marshall, McCurtain and Pushmataha, which are excluded from the territory sought to be transferred by the Committee filing the petition-30. Total number of member banks situated outside of the Counties of Bryan, Choctaw, Marshall, McCurtain and Pushmataha-136. Total inumber of member banks required to file petition in accordance with the regulations of the Federal Reserve Board-90. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis