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122.5-6 - Richmond, Va. Appeal pocket Boundaries of RDistricts YiWHANOTE Filing Pockets ------. ' A special"Y and E Char material of extrema .puglinese ttrid durability. 11Tc! L.y -1616.WMANAND1!UIE MECO. ROCHESTER. N. Y. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis sheet. Advance corrections. I Slubject to U. S. GEOLOGICAL SURVEY GEORGE OTIS SMITH, DIRECTOR STATE OF NEW JERSEY 74 ° 7 imam. • erno eeV 41° 41° Dr:kkes ›co andy Hook FortHaricoc a_ State Capitol CAMDEN County Seat Orange City or large town Town or village Steam Railroad • Relation of the State of New Jersey to sheets of the Standard Map of the World on the scale of 1:1,000,000 Electric Railroad Illti1411 Bordent ld.sboro .d. Cassvil ornerstown ales •Vanhise‘ alkewoo p. ewE ninjaits -- ------- k_ook.,st_owi dl_._W i ,-----•., Juliustown -Pointvill .Srnithv. e 40° Pleasant But-r ifit le o Osb-4Akehlurst 40° ghts -uddto ea_sidePark -v ce te "LY `Weno sbor Barne Warrem_Gr Surf'City leasant I. aft-rts -ka eachELa_ven_ e nterto C Initirc r ik g C Shiloh! . LANDIN Car a GETO Roadsiori k-LittLe_E gini,et g ceaTtville. ee antine _Atlantic City- oitElizab opel ,olagRort G-rea,t_E- g g cean City' sleys rsb iew • I, A_ eaisle Cit5r IV A B A Y. R, tone arbor GreenCr 390 390 • dwood_ olly-Beacla Ccild WestCap CapelVfayP • • 8) peMay • /f\CAPE H ENLOPEN . 750 R. B. Marshali, Chief Geographer Scale A, F. Hassan, Cartographer Compiled in 1912 10 1 10 10 10 ENGPAV,D AN D PRINTED BY TH E U.S.,EOLOGICAL SURVEY 500000 20 20 30 es 30 Mil 40 Kilometers 74° http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis REC IN F1 SECTION APR 2 610gg -‘• I\to OM.c. REXFORD E. HOLMES SHORTHAND REPORTER ROOM 322 SOUTHERN BUILDING WASHINGTON. D. C. Counsel Genetal. BoarA. klestve r',I G011 ' ,1 • • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis r • APPEAL TO THE FEDERAL RESERVE BOARD FRO THE ACTION OF THE ORGANIZATION COLMTTEE IN DESIGNATING RICIIHOND, VIRGINIA AS THE RESERVE BANK CENTER : --OF THE FIFTH DISTRICT -INSTFAD OF BALTIMORE, MARYLAND. HELD AT UNITED STATES TREASTIRY DEPARTMENT: WASHINGTON D. C. January 6 ) Reportod by: Rexford L. Holmss, Official Stono5rapher of Hoarin2;s, 622 Southern Bldg., Wadhirvr,ton? D. 0. ..rf..JeLent of the 'Ioard: Tho aentlemen, this in a - motion for the roview of the iction of th6 Fc6era1 1:;eserve.. AO. ..13fink Orennition 3o:TIttoo, In the Feteral a 7 chmond as eserve City for the ":Ifth ::Istrict. • Petitions: • have been duly file, n.nd would lilt- to t;:tk firot opening an oiaos ris also have *beim i to the orjer of Firocere on.. • woula bo glAi to hi71r fro;r1 both. to thnt r. Charle nrkol1, Coulsol• for thg) of Jaltimore: U! the rd plose, vo fl.suriae '..ht followin proe0.11.27 . of .1g1 tribumals, it would be our right, as the ordimry 4101) aN)olloes, to opc•n a.W1 cloe• -the nrsumnt, it hivine: boon. our intention to provide'n opening anJ oloLqng argualont. The :leosident of the . oard 3 • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis we would be glnd to ne 011.nel for I:lichmond, or froA you. iE, Couasel for the City of Richmond.: Ler;h th-t th,lt would bo tho•oonrso of proce, if aB there be no objection to such prodedI)re on tho pr,rt of the 3onrd. membonl this matt •r tl The hfIll be entirely willin dLiortion reFlAdent (), the J3o:Ard: 3ord hns to no tht e hotIr f he ord. s I un(lort:,:n, the for thL; hen:ring. 'ltimore„ )eine th should hw/e the ri:Jit to open to it moving party, -- thcA they Xi2Ieee, and the ;orir0.. • would oug , cst an ;Te4in•, of jT, thirty.minutc, m kLthen . Richmondfl hour, -ma the rotwinin by of itnd• . the be t nn up -ost tnt either or qould mr; both oitiew time t should have AJO • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis /-1 opportunity for five minutes to sum up at the close; and the Board will be glad to extend th!lt time; so if tiu!ti is agreef3ble to you all, we will consider that as settled. ( e re ,1 king n des))erqte effort to have that clock fixed-clock in the room -- but dC will get the time as nearly as possible in some other way. ) •76 will call on:Baltimore then to open . Tr. .Charles iIrkell, Coumlellfor the City of .13a1timore: the Board please, before opening the crgu m::nt, ;le wish -mike on bohlf of'3altii,aore a preliminary to rqotion which we assume will be unnocei76ary, but . duty to and 'Ai t hich we feel it our under the rules of the Board uirinqll question:3 of jurisdiction to bc rai.:,ed at this time, we viish to move thnt, when the Board takeb this e0 up for consideration and decision oC. uhc OPSO be p rticipt,ted In only 5.! th. five ,)ppointt. a0 rs of the .6 Board, and. thLit there be no 0 rticipf,tion by either of the two ex officio members of the Board, who are rlso , as 1,uch, members of' the Organtz ati'm Committee, whos e , , ction is the cause ffldr this appeal. To act of Cong ress, -- the terms of the -ct of Congress regulating thin riht of review (2.-o extremely brie -r. The lot doo:, not go into details, Os many procedural r,;ts do, if dealing with technica l legal mntt,,rs, became it va intended tlu ,t, this Board should not be ,--ovrne, by technicfaitic, but we no:ume in the j; by o7 the com;•i"„ o. by thiL• :)oa,-d, it o ns-ress, and nothing is in the intent, to depart from W30 not intencod ct indiwitinc such ordinary principals of jurisprudence underlying all lax, one of which princils is tat such a review should be before an unpre4udiced 41011 410 http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis tribunal, ihich has not formed an opinion which 7culd dis- qualify its nombere from reviewing the case with coen minds With that vie, which seems to us the clear spirit of the act, thou-h excressed in brief language, it would seem that this appeal slIculd be heard by the five members and that the hearing should not be participated in by the other two. Of course those general considerations are only strengthened if 'le look. to the Organization Committee, because the Organization Cohlmittee comprises the tic ex officio mmbers, -tho are representative official officers of the Government, who are evidently -put on the Board because of tile eminent desirability that in the practical working out of tills act, the Board should be in touch, as it is made in touch by the presence of those two members, with the important firn,Lncial denartedents of the Gcvernent. to That reasoning does not apply a matter not locking to the practical working of the act, but to the origination of the act, the putting of this act in motion. There is no occasion for h,Lvint_.: the joinder of these Treasury Officials with the Board, but on the contrary the a, pointed mebers under the act, are required by the Presid d ent • to be selected :iith a due rerd to the geographical divisions of the country; so it see-1s that we eay properly press this point, not only in view of the fundamental requirement that a review should be a re:a review, bef(re a court which has not expressed its vies or arrived at :t decie:lon, but in 3o, a review by the Board with representatives this case n1, of the districts of the country, board at http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis .3o much for that point; and. with that ashington. 111, prelimingry, I wili nd not merely an offici 1 roceed to whet we consider the merits of the cese. May I eaki The 1reeident of the 3oerd: you raise that disas a Question of law, or as a question addressed to the cretion of the Board? e rai e the point in both respects; we Mr. think it i eilinently a question of discretion, if the of the Board ;hould feel (.11y .loubt as to the legal rights parties. 's a matter of propriety, those two gentlemen shoud_ not perticipete. ut also rise the eueetion review as n matter of la., because we think a right of given by the statute means a real review, view not participated le boon made up, a real re- by judges whose minds have already nd :die have already sat in that case. The President of the Board: I would like to know their whether ;.ichmond ecquieseee in this suggestion; what attitude is in regard to it. ie would be very sled to hear from you The Counsel for the City of iiichmond: The City of of ‘ichmond wo ld be very glad to defer to the discretion the Board with regard to this riatter. Ye are entirely ill" ,L3 to let the matter rest in your hands. The act that has 2rovideo the :11 nner of review, qnd the question matter for the been raised presents a matter of lea and e is able diecrction of this Board. 7e feel that the Bonrd to determine that question. 00177,4M l'•'01/ TRY, . ...7ZT• Or :11,2 . ST.i.. . OP 3,YLTMOR-. Ora' 410 . 6 If the Board please, thnt both ottbmitted To:e the now to IlreceejA conic;erntion of! tic.) Boc,rd, I the alin argument on the merits of thio appeal. .ialtimore that tiO think. is . ' It -1.8 the cont.mtion bj the i7ciA; :oorne, out, and is irrez.101, borne our bricf, thL:t the City of diuuaszed in nova RIaltimore sho.111d be Itv2,(1e the redeml Y.erve :13tIns4 cunter iyistetid of tho City of Richmond. Te can only reker to these points in the 1thit1 time flowed. 7e cent rid that th • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis convonience an6; customary course of busine, with a due roiora for the ::AIHtowary our bustneso Asolutly reAuires act, , is rquirea by that 4'.a1timore bo 6ezdaatd a Fifth District, InE;ttYd o.. of the Rer.erv Ci'4 in this icholond, And :rilrtl'ilermere, we whi) rioniltituto t.11i•TAurd of rovie to exflmine the resoniA o.f! tho committoo itself. :Coq will ne resoning o-J7 the committco, the principals find tht t. on they aot(ld in pnictically evry other district, except this; revires the Bame ro,31t1t; and still further, 6nd eaercetic contest we Nx,tnt you. to Took to the very. made by the 01.ty of: lUchmone, itEcll, an(1 tA6ir argument be!forr titc ComDiltt. al& not cA.1 for :Ilabol.Jinatin '•h r umonts not on ly tho Oity c;f. ;ialtimore to Richinond in the LiArict 1;‘) vvhich both should 6eleng, but.. thoy nover (reamed of ;)olng made Roser7i0 city, exoept In a district which would not include Baltimore* T-11nF- that up, ,nd rei7erring to sor.cle of our reasons, fi.t-nd foremost we sc,Ly that Baltimore is tne 41011 fim:.ncial and industrial canitol of tis w.ole district, , ti)e point at w; ich :1.nd to which the business of the dis- • trict naturally cnverges, tat in every essential respect, so far as finance, comnerce, and industry are concerned, Baltimore i4 about five times as illIT)crt,nt as Richmond. Now :to 1,resent an array of statistics on that subject in our brief and it would not only be impossible in to tivie z....1107:ed, but a waste of time I Ctin. k, Ihen LLe is sec, out titer, to 1.1(1ss of st,;.tistics. elry tic Pc.trd 4.1t this tie A.th a Iwill only, by way of illustration, hurrld1i run over One or two of tbese fiEures: The population of E.ltimore in Ole 1910 cermus was 358,000; tUe pollulation of Richmond ae 127,000. m,nuf,;.eturers of Baltimore, -- tbat's anoti1r The atter that is utLtistical, in the sense that it is covered by the United states census, city of -ocording to the 1910 census the Baltimore, and this means t are very limited, as you know Lad city limits, which establishrients. The Baltimore 'etronolitn District ‘IaL.d 2,668, while Richmond had 380.. The amount of cacital ,-.4ccordini to tl:e ,ssessf„ent 411 http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis in Bi,Itimore was 164,000,000 in the If.etrol)olit,n district, , 109,000,000; Ind in Richmond 31,000,00e. The vo:lue of :Lanuftictured products in a year in Baltimore is . 000.00; mond in the Ltropolitn district !A.86,000, :260,000,000; in Rida- 47,000,000.00. 71,000 w,..L7e earners are employed in Baltimore; b1,000 in the etropolitan District, and 14,U00 in Richmond. There's thc rA- o of fully Tive to one. d we di •eu sow, of course, :obbing, tnluoporttion, rLnd other detail,: In our orLo.f. I only mention the nJove in dotigis we lo diocussed, shipping of course, though there ny othr is no r tio tiero,becuuse Richmond has no ship in su1)3t:.1,1tic 1 sense. , • in fn7; In .7.-11t-1m re z;olt hvve n L:ret n'ic seaport, a city flIcit ranks sccond to llew York with respect to exports, 4ind ,3 we shall show here ft r, this matter of )ort trade itself is of v9st im,lort, ex, )nce under the ;et. 13,7qtimore, in its foreign trade, hPd 117,0 00,000 of exports and •75,000,000.00 of iports in 191. "ne fir- urc 2 for Richm;md -re zero, so ,;(1 on (Ive , no r tio then ; there is no o,sis for commrir3on: nd t,0 shLppinc: in Bnitamorr, LI addition to its for( ign traoe , is enormous. The report of the :;ov, rnuPnt :lhown the v,11110 or the commerce -- foreign illd dometic trade rmounted to over 4-9,000,000 ourini; 1_915. Now those det-il, tInC • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis sipply 1.13uotratio= t),flt vee go into only difference betuet 3aoth.r would oe not or itom Fiiad question as to whether daltinoro Achmond is ahead, but ho, much 3it ore 1 hw,d, hothor five ti ,e, or t,;) ti co, or ten tines. airfers, but th rel ti on is 'Ilveays the ‘:ume. Nov.; these firarwl , lways :how thwt '3a3ti-lo:rn is tio far ahead of Richuond in every branch or co-;Ierce and industry, dustry. every f,7coat classilication of coizierce and inBut the fiaures a130 ahoy' that this :0.ass of bus- iness in Baltinord ha a very district it3o1f. ,; intipiate rei'ltion to this Indeed, ihen you e:4.t-Ane the f_Lcts, you will find the Ocganization Committoe, in layin! out the , ., limits of thia diatcict, haa 0.oked out a district -ich io always eoterJainus, and that the value of con,merca al-"ays pradoniiates in Baltip,ore. that,, 4.0 Only an illustration or tgo of thenl to ra2s on to other poizits. 113 rofo: LA our brief to the enorinous volu, v) of the shippin over trade in T;t1timore l running up into the millions., 2550000,000 in 1915. itself, but tiA-It I3hIppin No.g that i not only large in traue is almoat entirely done in this very Fifth Disteict, an the fi'wres In the brief that data bac'. to the zocord before the Orznnization Committee ohog over seventy per cent of the products of Balti2:0, 70 shippers and manufactures distributed in this F3ftla District alone. The sae is true in economic develop;lent. The , :roat Daltimoce truat companies and the TaltinoTe savings banks and Richmond has rather shoied a 21ightinc; attitude toward both trust companies lnd savings banks,for the very necessa- • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ry reason that Richmond has not very nany of those and Haltild.ore has, -- but those very institution that con3titute se iul)ortat a 'art of Ilerican business life have their ao- tivitios immodIte1y dirocted to the very c:ovolopment of the other 'parts of this district that are no* nr.do the Fifth -7 District. The -laviiir,s banks -- the nut, , _Lal savi%r s banks . http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis in Baltimore, have figures 6howina 2Z;000V)00 invacAce, by th- ee of the Lutual ovin31 banks a)on'e in boncIain cuth— ern ont- crl)rio, and of 00U700 evoryono knotvs that not cnly -bani3 but the truwt o%Ipocially ars 6xclueive— ly 9: lar3e1.y te'oti to coomnIc clovilo1; in -$ Couth. ThiJ ra4.1 (o4 up :*1 volus; Qi . i13J whid lIatimre in— t;olluAmble i5tRicmol. ait; a vol1.ia3 y „Jk:Yni Fifth . 71As1l J7:1„7;,, 1.11‘1 12:lit3 very cc.n.atnt L;l!oa cca !-cw. moreover Luoill— aoatio.rx, the ntor,, 1 in U.L ;4.11.4)1 ca1t:%7 cf•thi 7 , !1 t3a2:i0 143 t:;:u.o_ac to bankir ,azo Qat (;1 Moot) fjglAros .13c) 19 .vonmeritGa upuri tho3o tht whica 71±. gJii:c7;11: jho-;:ri in fit. .1;w:a,7; Lako it th!; 11-77ie, . no$t) tables 104;a-xly taloi!trurl!lici ;e02ntioh botmaf).1. b%nking: . rthioul:00:;ir 0-vol'y dotrAl Tutuall)(34:/i; of tlAtl Bo.:47J will ual1ix3 tabluo, toy OU1I 300 Riduoi41. If b..71 3f11 and look. at Vas . thts 31f73Incic M: a glanca. It ii un— fur :10..to. take saoro tinl to oall yom, attention t0 thu zlattcrz. but in IA 0011.7,11? form oya, Frithout the fl. ;ur,)4, neoclos: haa iho ratio i4 gro3t3r in soila Itori3 ttan in others'i vi(3[40, tha snotrouil :).rap!xldonoo 3 Aaaltindro ovol! Ridftmoal, favo. ot z ,3omethiri has bc:en said by the Organization Co,raittee ;Ind in the .•:ichmond brief, as to what bank will be considered. -eil, now, the Crganiz?-,tion Committee very summarily disposed of the matter by ignoring state banks and truzt companies. The Richm nd brief is on arbitrary way, combined national and state banks, 911,1 ignores trust companies and savings banks. It seems to us perfectly clear that any comprehensive view of this 7ederal P,eserve act .1.11 show immedintely the ±%.ict that Congress, in passing the act,— and everyone who has to do with he administration of the act understands this )oint; no one knows better than this Board the imnortnce and n, cossity that at sometile the state b:Inks and tr. t companies must all be regarded as 4 irtdependent of our sys ,m; and it is e desire of ev.r7- body, and one of the import. nt )roblems of this Board Ls to -ork out how they will be coordinate with the national banks. They may he brought in as technic:a members, as the net provides, for o tside, liKe non-ziembers of cle-ring houses. But it is futile to ir;norc such uanking capital that happens to be olitide the Tier° national bfif.:ks. But it is not necesr-ry for us to diell longer on this Point, for tho same reason that I have already indicated, in-cause • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis whether we compare Richmond and Baltimore on the 1) sis of national banks or Jhother you include state, trust and savings banks, or whether we form any kind of a combination such as national and banks that the mind can sugi-est, or imagine, -- the only difterence is not a question as to whether Baltimore or Richmond stands ahead, , 'Thing we can debate about is the ,- egree of the only prcdominance http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis You can not juu„sle the fisu es any way that will show that Richmond predominates over Baltimore. You can juggle them some way so the difference will ',Je Uo to three or 2our to five, or five to six, or seven to eight, or ten to one, but it sees to ua f:uitless to debate questions of multi ples. The point that our insistence is laid upon is the fact that Baltimore is prJdominantly our estimate a_ld that when we nuke o 'iouli say a,)out five as large as :lidh- mon; but it is fruitIcss to go into detail with them. point out in OU2 brief, it is impo33i-)1, 2 AS Iq-) take a view of t-is aituation without casilering all the banks, and it is reculiarly apIDro:,)riats in the case of Baltimore, whece its trust oo„Ipanias aTtd savings b?.nks are primarily, you might say, all helping the ievelonfflent of these southern state s that go to make up the Fifth Dist; ilt. . Now so much for those detail, and as I say, they are mentioned merely by way of illuTtcation. The ,nore you go in- to them, the raore details you , et, the tore emphatic becom es the absolute predominance of Baltimore over Richmond, and the impossibility of coa.1-aring the two. Finding that situation to be the case, namely, thz%t Baltimo, does predominate in population, banking resou :e :cos, , finances, manufacturing, commerce, a, 2 when you come to shipping, the foreign trade iiolf proseLts such a cozJparisc n between zero and a large quwAity, as to emphasize the rredon- inance of al.ltillIcre over 'Richmond. We next look at the action of the Organization Ccnnittee, and we naturally sulTozie that, in a oon;A.U.on like the one on which we find the Organization Committee has undertaken to http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis subordinate Baltimore to Richmond, :to would suggest that their action evidently as a zenoral rule has not indicated that they paid LI-Lich attention to questions of size and import— ance, necau3e we could ntturally expect that BaltiEurci had been sini;led out foe such di wheh we do actually lou other .aisteiote. i:iatior pct 'T'oxn the rost : t-.t what the committoe did in the The fact 1 that i practically every other case except 13altilaou the coLlmittee was abf3olutely guided by ';hat i a pe.,:footly proper tiliag to be gided by, . naFriely, by the, Zuot tAat the 1.ii.g3 st'A.ncls aheacL oity business ouLht, by reaso.ii of that fa(;t 1 to be the resorve elty in the the committee itaalf do? itr.ct. Whd.t did Determine no. f.com the Zacts, 1 aly to their owil rer,..soLlniL thc facts. ta fact.: 1;:le city th[s.t Thy t:lese are : IL ten out of the tvelve (Astrictii tants committee selected as the reseve city the largest city in populPtion in that district. In only tyo di3triots did he uorz,s.ittee u.Idertake to suoordinate a iarse oity to a sma1le - , and those 2 tdo districts wore tno Nov Orleans eald th Baltimore gow even in ne New Orle3ne diz!trict, they aubordin— ated New Orleana to Atlmta, which luzl a poy.29tion f ons— half. Ulu size of Net Orleans, hut even there the district was formed in sLch a peculia:: 'Jay t1- 1t everyone knoss, aE 4 . ,:rla com— mittee ramarkad, that the course of 'Lusialess in tilat district . is it from Atla- Ita to liew Orlei.as; the ci)urJa of basiness is z i.colA the Gulf toviara the East; and whether :L;w ..drlsan.B has bt;eLbadly troatoo. or not, wa a.e not here to a.. ov:31', If Uay geve recogu1t1o272 tc the 1:trge2t So that n that district, m, uould hive ILId to turn the course of busies Wlokware., go that doe not roi11i th(1 J;.1timore But in our diF'xiot, if the Board please., thcy hod not only suberdiaF:sed one oiti to a Tiwilor city, but ti7o citien, aaltimorn flAlinston, thlt t4re no closely situated rographially, th,rt they practically ralount to one enormous city, .rid they have aubordIntrGod ooth aJtion to the city of Richmond; iAna in netottion to Iltbordinriting lArge littoo to ervill citie;l, they undertook to do thr. very thing they snia they would not ao in Dew Orleans, to turn the course of trade hlekward, by sending busifleos from Baltimoro to when the committee whon overybody , .0 , 1:1 .n.)rth-. has solo in tho n .iport th.10, the co-r. of busine • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ward from the .orith. this com,littee its if, T12; the rea ontnr of - e ask you to n, nd vee what tne r0:1111-, would bo. alti.ror., the s-venth city r11( Union, end 'quthington , the sizteenth rro 141;bordinated to Richmona, the thirty ninth, and In $1ddition to that the course of lintline lu attems ,Ittla to be turned bockward, ;nil only one othor city in the t4111;rql tate“, New Orleans to a smaller city: and th,tt WFV4 hao been subordinated in .1 di3trict %viler.) It is neces,711iry to turn The courro of billinoo backwrd: hom- as in thifi ono they did both. In the Clevel'nd dirtrict let us see what has been the (1,110. r 7hy, in tine (.11oveland :dot- iot the OrgnAizntion , . , Gr,mlittee dimposd of the probl m in t 7o s, ntonoe;3. enqugh they ?at It vretor th110! •lf uriouuiy i,hn1 4lotr1ot* I (1,; uot know why they 91101)11 call att-mtion to snob qn )rionv11,7!Tue http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis chai-.1itt ee An tht all tho thm 0-. ! zani2lattoA OcAnittee said about juatifying t -hei selection of -cora Cleveland and 110,e1nd. , Baltil:lore. the United States, Now, 1.)t U3 Cleveland ia the airth It has 561,000 people, Baltirore ts the seventh, with 553,000 people, and Pittsburg is the eihth,'Ath 5330000. Al] three a2e 1)arotically the same oize, 30 thoi cities a 'e 1. th) very same diJtrict, fa-J! as population is concerned. And not to of racvel'Ind and Pittbur6av 3 ;(2 1-xtiorUly the sane size, and , pxstizx practbaa4 tho sa,..) size at as Balti, oro, do? and wl-PA doe J the The ea.ittoo Erlys wIthout 'Lny further ar111-. ent, that . the fact that 01ev ;_t.am:( , i3 the sixt# city,oflthou:h Pitts- butLe eighth is almotA the sa,zie size, is tlle aLfi'3cient in TIA6 ;sixth l&r,c)st oiLy-tip,t is in itself enough to justify Nakir.g Clevolai, the reserve city, and makizg throwPittaburg into the discard; and yet 17,th throe thousand in popul:Ition Olevelnd ahd stol, at the sixtl, city, and lnetea:.1 of app1yin:7, th reasonil., they Tme to the :soventh city, they take Ult.) s - vonth nmd sixteenth odieu together, and tack them on to the thirty ninth city, and Jr, addition to that try to turn the course of busjneos backward, in order to do tivit! Now, v- ,e;ntlomon, us ask you to apply the reasoning that f the Or, nh,tion Committee applied to the case of Cleveland nd Pittsburg. AMAI 4111 411, http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 'ittsburg? :hat are the facts , ? bout Cleveland and It is th::.t according to the conditions, there is no single reason that the committee reached in other di:Jtricts that uported n selo:tion of Clevelond over sburg e-cept 'he neleweiht in nopulation. colm.-- to examine thr sati hen you hinh the memb, r. of the ic Beard pretend to he guide, by in the Richmond case, Pittsburg outolnsses Cheveland In every point. tine to delay your honors, -- the with that' but it Is so striking. iembers of the I have not oard -- Let me run over the lad; two tables in the Organition Committee': records, showing the figures for n-tioml , )/1; 11 brInks; I:embers of intiontl banks in Cleveland, seven; in 2ittsourg 21. Capital and sur)lus Clc-veb-nd, 14,000,000.00, litts- ourg, •*46,000,000.00. Per danita, Cleveland, 25,000,000; _l_ttsburg, 8f3,000, 000.00. Individual deposits, Cloveinnd '40,000,000; Fitts burg, ,'120,000,000.00. cnpito, Clevelnnd, 2,000,000.00, Pittsburg 22ö,000,000.00. IA:ins and dicconnt,-3, 62,0()0,000; Pittsburg, 111 A,0)0,0 0.00. . .or capita, ;1, -et :IC, 112,000,000; l'ittsburR, . 233,000 00. And then, .then you to b nks in— .o over all the c'igures pertaining http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis cludin,7; not only irtionvl banks, but others, you have to some thing thro101 the whole list; Cleveland is far behind Pittsburg in evcry slw:le item. o tht is why the Organiz , ion Comee thinks in o'her districts, in every district, ,occept in a p rtial sere, the ilew Orleans district, that's what they think, namely, that the im- portance of a city beiny the largest city, the mere pre6ominance of the sixth over the eighth, is enough to outweigh all this inequality in banking resource, , so far 2ittsburg and Cleveland :,re concrned; bat in the case of Richmond, Baltimore and 'ashinton are both thron out. line on that point we may take II) another quetion, and dispose of it, so far as oral . rgument is concerned, moth r point that Richmond lays grcat stress on, and that is this pole of banks, one of the things the Organization Committee refers to as justifying their selection of :lichmonc, rather than Baltimore. banks? There are -11Pt about Lh:t ,ole of answers to that: Pirst, and moat obvious is th:it Con .re a does not say tlnythin: in the law ;bout a vote of banks being t ken as the basis dfr selecting these cities. It would seem to us, if there win,' any sabdect that was absolutely argued in Congress, and that nothing more could be added to, it was, how far the banks sho id, and the public or the Board should have a say in determining the operation of this :let, end when Congress gave the banks the rite to voe a certain ny on c, rtain questions, and gflIe this Board and the OrD:nizition Committee the duty and right to pick out reservecities, the inference is clear that Conress realized that this vras not (:)ne of the things AMIII • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis to. be Cieterniined nnd yet by tri.ct. n vote, but by. national considertions; etty campaign methods among the bqnks in a dis- o it seems to us thot Congress nov r intended a matter of this kind to be determined by a vote, lnd there are obvious reasons why it is so. A vote of b , Inks is de- termined lfrgely by sentimental considerations and it is obvous that the pole in this case, -- it is obvios that state pride would lead 7irt inia b-nks to vote for ; ichmond. ]leen did not do so, notwitlIstanding state pride, but state ,?ride would lead Virginia bnnksto vite for . dchmond, regardless of business considerations;m and if you analyze the vote, you will note thit es to the second choice voto , nobody in FRryland ever Voted for Richmond, for second or third choice, and yet the Virginia banks voted very Jor-oly for Baltimore as second and third choice. In addition to that, the vote thr't the committee itself took over the whole United Gtates shows what the country thinks this district a:1 a whole. Over n thousand votes that the committee took contains suestions not only from the districts p rtLculPrly intereiL;d in end contiguous -o this J1ifth district, but from all over the country, and over - thousand , . niKs, sugested thr t Baltimore should be one of the eight of twelve reserve cities, Hndonly throe hundred -- some odd -- gag este& .ichmond, and if you compare the lirgo centers, New York, Illinois, Ohio, where the larger banks h've did not get n hendfull of been s'Ltutated, suggestions from llichmond those ANA 410 But, gentlemen, aside from the fact that this , . as a .Latter to be decided, on nationA. ;rcunds and on broad considerations and not by druming up energetic and very able basis, as votes on it 'Lay be, any very he realttruth af tale Natter is that these facts do not indicate anythinL, :Lore than the fact that a larver numbers of ban -s voted for Richmond, and the vote itself shows that the redominance amon:: the banters, if you measure their votes Am" by That 411 http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis weight of business, is in favor of Baltimore, is disdussed in our brief, and I cannot delay any longer tmon it; but the exclu.nation is simple, and that is that down there in Virginia and the Carolinas tkley have many small banks, and if you count one bank one vote, and ten banks with 025,000.00 capital each as ten times iacre than our Baltimore bariers with millions of dollars in Capital tad surplus that is the way you get a predomin-nce of votes in favor of Richmond over Baltimore; but if t' oe l votes were taken according to tae wei ht and size of the banks L,nd volume of business, the predominan ce would be in favor of Baltimore. In addition to the fact that the law does not aut. orize this „Iuestion to be decided by a vote of banks, and in addition to the furtr fact that the voting itself if you .1_1re JeiE;ht to the size of ti-le bank, and not :nerelL to the number, would favor Baltimore, the committee itself does not pay any attention to the vote of the banks because you only have to look at the Cleveland d 4 strict ;here everything araS in favor cf Pittsburg, asid again8t Cleveland, except the predominance in population ind AMA MOP • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis And what wa3 the vote there? Of tho vOtes there Cleveland 3ot about one hundrod and ten vot$3 out of six hun— dre(L :3.11d aoilo. Cleveland got lesa vote s, barely cne—third as mAny voted a3 Pittaburg, and bare ly half aa many ac Cin— cillnati in its o-rn State, and in Ohio there MOV5 oiies voting Cor Ciaoinxiti than for Clev eland. IT0Y, t;lat aho:s what t)lo vote JII°ount.1 to, .3.kron lith the () tiun 0(irimitt )k) its3olf. So much for tho quorl tIo:a o.. vote! just a oidL.,020 on ilhat the poonlo or rH.citnontl. thownlvoo think:. of. the 3itultion, lnd tht1 nufit he aumea in a vford: Richmon(1 'front boCo:.o the Orll nization Conrit tce and haq a v()ry oarefully prepared briof„ ilreparc0. by Mr. aye, zhiohax yco3lod the , ;ovevnin3 idea •of the entire brief in one o'4 tho 7 . sentarlcaz. The text of that lyciofia just ouch a3 mi3ht have boon 1,ceparod by any :1.1i) la-.7yor„ al though r. Gayo ia not a la, :yor„ and that text was 5tat,3d in the fit ollte,Loo, ligature had mar:ed out a 7.9orfit3ct dis— t riot, ;)ounaoa on the north by tlia Pototo. Hoi, the whole 01 ilieithiond.1 ,-; lrp.4rialit in tlieir brief, and the artf,tuileaat they nada at the hairin3 bolum tho Otion VA3 an elaboration of that text. They realized tnrit they lora eon tending, primarily ‘Ath Ativita, ia a diatriot onth oE tho Potouuc, ana uo :A44 Daltinore 7a5 oonoorned„ so far rv. their .roblemwa.3 concerned, their diat .jet ow;h t 1. on th north by the Potomac. ;lo brmnd- TAT' realized V.:It if you put B-11t1;,Q co in the .1iatriot, it -tould be the haaa of the One of the fron Soutl. Oarelmn showed that clearly. They asked him about putting ,:,aryland in the district, and he imfdediately answered, "I do nct t ink 04) • • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis it wci_ld be a good thing to h-ve the rserve bank away pp in a corner of the district. Th,t make Baltimore the hsad of the district, by putting iztrylzInd in the district". Tat js the only loiic,t1 reasoning. -y time is almost :cne, and I shall only want to yefer very briefly to one other point. It is cur conten- tion that Baltimore is geographically the lofical location for this bank, cographically in a real sense. That is already answered by what we have said about the relative il,_portance of the banks, because locating a bank is not a geographical question, not at least in any such an important sense as Richmond qould indicate. The most portant geographical .jleation is to put the bank where the largest amount of business is, not where the outside business cn o with least inconvenience, that doors. as And in that sense is close to its own Baltimore beinF, five times great as Richmond, 7ould have had the advantage. Then there are other reasons, and all are in of Baltimore. One favor is, the committee realized in the New Qtrke Orleans district the most important question ab'.ut geography is not the question of distance to the reserve bank, but the cotzse and direction of business. No :, the direction - of business in this district is nearly all from the South, and when you put a bank in Richmond, so far as Baltimore and Maryland are concerned, it is not a t.ltestion of distance, but of trying to make water run up hill, and. change the course of business, and when you -ut Baltimore at the head of this district, _Baltimore is in the direction from villioh the business col_ica, at the north of the district. argument, and not ori:inll ri..th ) U3 This i3 a 3imp1e --when but at Richmond, Richmond wcat up to the Organizaton CQL.ilittec, asking for this district, qichmend co,Itended thwt "Nature had mapped out for it a porf.)ct district, bounded on the north by the Potomlc River." Ur. Sayo, their spokesi:.an, in testifying be- fore the committee, said that district had an incontostible , , position, .)0121,, situated at the northern linit of the distciet. So far from beinz an argunefit arAinst it, it was their t3::t supportin-; their case. Now 2altiflore iJ %ear the northern limit of -- not the district that liohmona aaked for, but the district they actually got. I do not zdoan to overlook the fact that after RichLiond had filed tIleic hrif,a.r_d after they had covered apparently every question at the hearing, that the district might ) he mapped out IifCerently, Tr. Say() very clearly and ably wrote a lotto): a uonth later -rhon ho filed the brief, and ; . pointed out the fact that not it 3t9.ndin[ Naturols action in napping out ti,e ui.Jtriot, you could just a il put Balti- more in the diatriet, and put a branch bank in Baltimore: That showed roat cleverness in adAlAinu, his ar7aident, but it a pure aission of the superiority of Balti7.40o over • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis -, s RichLond aa a 23- erve center. My time has expired. 740 Pre-zilent oC the Board: Mr. narkell: Your motion took five min- llev, icach time have I left? The President of the Board: .inutea. Five 2.- The . otion took five or 31x ninutoa. 1Se. Markel: I. I au glad to know just hws; Nuoh time I havo loft. On this questioa of diatanco, thon, I can. .iay a Pririarily„ the courao of bil.aincos is of !illeh more iqportance than tho distance, aild if you wait authority on that, to 7lichmond, and that point RiehR.ond had in her brief; but the Or7,ani.4ation Committoo ia aloo goocL authority for that, and ovoryono 1-3006 tG agre about that, and everyone ar;reod that tho cou.rae of buainosa flows north-3ard to-rard Baltimore from • t,hsi aouth. In addition to that, distnce important in thii3 districts 74y? 13 rt47)o1ute1y un— Docause of the Not that tho wholo diatrict iG so compaet, that Baltimore is :Tithin r, • aevontoon houra of any other point in the district, -any other city of considerable ao there is only ono bu5ineas day alvidini: one end of the district and another, .i:'lether you put the bank in Tlaitiore or 'Richmond. Nol, our friends f, 7om Richriond plako a curious ar! 2,uont on that. , itlake a diIro, booauso elearin They aay that lours house nieeta in 1,c) florn— tog and it•akos a aiff6roneo w,t tine the budincas can reacIt the roaerve oeiltor. As I understand, this bank, so far as it opoatGa aa a cloJ ..oing house, r111 be autoLatie, oren - • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis or) ions aa the day lazts, ao diatanee 1.3 nlyt iriportant anyhow. It •:Tould not Tiave been unimportant out in Kansas City. It is very important there, if anywhere, becallso in Kansas City the roaoripl city is one thouaand rilo arty, 3eparatod by ono thousand.. miloa and by the Rocky Ymantaina from Kan4aa City, and yr.'t properly the so. Board thatlp:ht They put nothinr-; the of hank that, in and Kansaa City, and in nine of the twelve dist:data thi4 Organizati on Covtmittea has selected a r000rve city at r pr-latioully on the vary edge of the district, and no ono found fault .fQ, doin .! so. oltfto futther circumstance about tie. r;connhy of• Baltii:tors ia that Baltimoro„ as a mattor of fact, really • nearer tho bankiiv,•hu.sineas than Richond, cl.rld that arvan tho sarAstii1n banka. I have disol:!Ased in raferrIn to tho poll of The oilly wisential y:Itil? to be coniliderod is the differonco 'or)twoen nui4ber and volume. To have in the q.rpen- dix to ow: brlaf onumaratod ovary national bank city In the di,Arict. 4100 We took.aatIonal banks ainply becanw3 it made tho, prohlos smallor, than I o includod others, although tho national 'oank compa' iaon ia moro fivorablc to niaraond„ bocau3o 13altimore ;uld Maryland aro 3tro. ro -f. in trLM: conDanias i . than Richmond, and oven on national banka alone ,7/0 3110T, a1tilou 1 .1 thre aro' 1;:,ora natIona2 banks vftioh • graphioally, not by air lino, but by re nearor geoRichmond than Ba1tilaor6, whon you take tho tot7.11 resourca, by far • the. greater nutabor Iiaam33thlo to Baltimorc than Richrond; and whon you tako th000 rourco and d1vIe theL. by hours and oven the average diatanoe in iai1in hours from Balti- • more to all of t;f banh1nj,NJourceo in the diatriat, it is • 7.5 hours, wad to Richmond io 8.1 hours; so tho re1.1 truth 411 http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis about this, geostilphical argumcat„ speaking candidly, is we do not think it thou1, 'f5e auntrollinE,!, but so Tar as It .1 i3 to bo considered, it is In favor of 'Baltimore, booaus6 Baltimore is roally noaror tha donaity of baninr; bu3ine5s than Rieh- mond. e. The question of proA,nity to Philudciliaia. hag bo2n mantiolied, and the ComLittoe auggceted tint was the zaaeun for not pittin-r, a back in Ealtimore, that that contrwry a reason for (stab1iii/13 it in Rich.mond. Why, it puts Baltinore that much nearar to ii irew Chicac - ant', Booton, ./hinh aro tn , 1.)o.c..173 thfl.t bo mok:,t in tuc1)I1t, ana th.3 only other rc,3c7.-To . %)ities tit, it inovreLseJ tho distance Ittant% aut1 up oan rofer you gentlemen to the Richmond tes41011 tilLo.ay a.i; to the imy)ortapce of Atlanta. The whole Tieigbt of the aiehaload oaaa befor3 tha 0:zanizaticn ConaLittoe vae put on tholr intense de!3ire not t •thu http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis u.j tho ono thiyi. be tied to ailyt'aillg south of tioking out th:fouL,h ti oae io thc: (Uft not •7alit anytnin2; to 0.c, v,ith &tixta beoauJe t'hat was a borrow:La:1 district. Puttilal this bank at 711timo.ca make3 that ;Iii.d4 that mu3h nearer the otrico: reservo citiaa, and inc.t,oauoa ;Is distance fnam the Atlanta Dallaa banks, and the 7Z16:4.1.1oncl. peop3q haT3 1):%do olemr, httr tAan tho c(Juld, ot that the RighKona 'lank will not have la rse relations with thoeo cities. On the ialportance, 7rd1o33 or cot'llIce,u.rt. ;te oourae of busiT:ess, / orzitted to can att6117, te Ridhmolta atate. rent taat dLitaxica cioe.1 not a_ount etio tat the di- aad on tIllt Irroull. only refeT you, ,73nt1amen, es to 1,M) tolAtimony cf tho Suth Carolina 711.tnei.., and thF', intor.o .Caar they e=ili-oited lan. They daid f be Mchmond, 17-.3t:med to At- t roulc. be a oala„..ity to io attached to a place south of us. Now you gentlemen of course know that Daltir4ore is much further ceortraphically fron South Caroll- 0. na and North Carolina than Atlanta is, but those people said 0 it would be a calamity to attach the to a place south of then, that they would. fool that they were hansin dc)act end. on to a They wanted to be connected north of them, because ths course of business is nolth. In conolsion, 7- en1:le-,21en, what this Organization Commit, tee has done to the. people an, business of Maryland and BaltiA moJ:e is to impose on them the ezact cllamity that the South 41010 Carolina people asked to be delivered from; they have insiQted that Baltimore and Maryland should be tagged on to a city south of them, although the course of businesa la from the 110 Louth northward; and thoy have insisted tlw.vt the course of bunefis &o7:.16 he turned tvtokward, or a futile attempt should be made to turn the oonrso of business back from the north to l the south, lnd in ad, ition to dot-Jr that, tiley have suborClnatiifl the mnth and alxtaent ciUez of the United States to 30 the thirty-ninth city, -2thich is one-fifth the 31. of Baltimore one-tPird the size of Taohin7,ton, and 2,93F3 than one-seventh H p.o the size of the t. combinad. il http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis SKE1 • • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis OPENING AR(Mi. .= OF Ti2iGH R. PAM, OF RICHMOND, VA., IN FAVOR OF TE DESIOATION OF RICHMM7D AS 17T,DR L R2JJSERVE CITY POR THE 7I7TH FE,DERAL RESERVE DISTRICT. MR. PAGE: I shall confine lyself in open in this case largely to a presentai,ion of the purposes which Congress had in view in enacting what is known as the Federal Reserve Act and to an endeavor to point out the true tests, or criteria, by which the Federal Reserve Cities should be designated, te designation of the Districts, as .mde by the T'ederal Reserve Organization CommiLtae not bei '7, in review here. It would seem that such a coorse was orderly and logical in all cases, but it is particularly so in the one at bar for the reason that the brief filed on behalf of the City of Baltimore sho s in our opinion a total misconception both of the porpos :s of the Act and of what is required of a Federal Reserve City. I 1 in presenting or case, I state a matter well known to you, or of an elementary charact A., I do so from no idea that you are not acquainted with the subject, for I have never yet appeared before a body where I felt, on account of the great 1 410 ' practical experience 2nd lear ing of its !qembers, greater incarecity to render the 7rsoard assistence in arriving at a correct conclusion of i:;_he questions et issue, but statements of such matters are necessary in developing the point we rely upon to sustain the decLeion of the Federal Reserve Organization Committee in designating Richmond es the rederal Reserve City of istrict No. 5. 7rom a genarel knowledge of previos efforts at legislation on the subject, as well as from a careful review of the debates in Con7Tees during the different stages of the enactment of the law, we consicielr the definition of the purposes of the Act, as given by the learned author . or Magee on Banle.s and Banking, last edition, as brief, though comprehensive, as can be found. The definition there given is as follows: "By a careful study and review of the provisions of the Adt, it ertet be observed that Congress has enacted a measure intended to regulate the more equal distribution of • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis money for the use and benefit of commerce, throughout all sections of the United States, and to destroy centralized reserves." Assuming that this definition correctly sets forth the purposes of the Act, we shall endeavor to point out the true tests nr criteria by which the designation of the Federal Reserve City of rlistrict should be made. While the Act re'luires that the Federal Reserve -istricts shall • be "apportioned with Oue regard to convenience and the customary course of business", it does not expressly state that the Organizion Committee must be governed by the set,: censideretiors in reg,,rd to the selection of the Alderal Reserve Cities, but it has been assumed throughout the hearine-s had before the Organization Committee and in the arguments of coun:;e1 that it was the intention of 411 http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis of Congress that "convenience and the customary course business" should have the same influence in the decision c) the locetion of 7ederal Reserve Cities as in the case of the apportionAent of Federal Reserve Districts. In re- viewin7 the several briefs filed by various cities nziking s application for designations as Federal Reserve citie be- ore the Organization Committee, we find practical or the unanimity of opinion in respect to the requirements Act, except in the case of Baltimore. In the pAition filed on behalf of the City of Cincirnati, prepared under the direction of Ttederick C. rs Hicks, Professor of i]conoillics and Commerce of the, Unive view of Cincinnati, we find this clear and comprehensive of the statute in this respect: SKE-4 "First. Geographical conv.mianc:, v;hicli involves transportatton acil1ti3s--d r7Id and easy communica- tion with all parts of "Second. c'istrict. Irdustril and commercial deirelop i.ent and n'ecls of each section, which invelv:s consideration of the general move tent of commo-litias rnd of 1)1)sines5 transactions within the llstricts ad te transfr of funris an S. exchanges of credits ririsi-g therefrom. "Third. Th,: established custoia and tred of busines, as develop:d by the prasent system of bank reserves and checking accounts. In lain g out the districts and estab- lishinT the hee ,dclurters for reserve •banks, every effort will be made to promote broiness convenience movements of trade ars nor Ica commerce." "Te same general ideas are briefly expressed in the petition filed on beillf ')f of Clevrdand, Ohio. They are as follows: "(1). Satisfactory collmunicr,Lion throughout the grumpHia. district. • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis (2) Proximity to center of traffic d exchanges of the district. (3) Financial, commercial, industrial and civic strength in itself. (4) $• Satisfactory r.:latiors with tlle entire district. SKE5 And in a cotiti)n filed on -1)chalf of Louisville, Ky., and subscrF-00 to bz- :'essrs. 011ie ,. James, Swa e Richard Knott and John V. Karr, Jr., almost the identical language is found: (a) Geographical convenience. (b) The industrial develo, -lent of the section. (c) The estaolished trend of business. (d) The extent to 'Yhich each section is able, inde- lendently, to finance the needs of its own region' , The city of rf),shington 1- resented a pa,..er at the oral 01116 http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis -oaring' before the federal _esorve Organization Committee which fully sets forth the requirements of a Federal Reservo City. Mr. A. O. Austin, for fifteen years Chief Statistician of the United States 3ureau of Statistics, quotes it with aproval at page 29 of the oriinal petition of the City of Hichmond. It is too long to read here today, but we take the liberty of referring you to it. It thus appearing that the bankers and students of finance, ,)lt forward by the various communities to represent their claims for a Federal ?.,eserve Bank before the Organization Committee, agree with sincalar unanimity upon what is required ot a city desiring such designation, it is not surprising that the Federal ':;eserve Organization Committee should itself have come to a imilar conclusion. In the 60 • 3KE6 decision of the 'ederal Reserve Organization Committee, determining the Federal Reserve Districts and the location of the 'llederal eserve Fanii, at paLe 361 of the record, that honorable body thus summed up the question: "Among the many factors which governed the decisions ia determining the respective districts and the selection of the cities w'rich have been chosen, were: "First. The ability of the member banks within the district to provide the minimum capital of quired for the 7edera1 4,0'10,000. re- eserve huh, on the brlsis of 6 per cent of the capital stock v.ad ;uprls of member banks within the district. "(3econd. The mercantile, industrial, and financial connections existing in each diz;trict and the relations between the various portions of the ditrict and the city selected for the location of the 7ederel Re3arve Bank. "Third. The probable ability of the 7ederal Reserve Bank in each district, after organization and after the • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ,.rovision of tho eder-1 eserve act shall have gone into effect, to meet the legitimate demands of business, whether normal or abnormal, in accordance with the spirit and provisions of the Federal Reserve Act. "Fourth. The fair and equitable division of the SKE7 - -eserve BaiI.S among.' the available capital for the 7ederal . district created. "IPifth. The general geographical situation of the dis- trict, trans.,ortation lines, and the facilities for speedy coalunication eotween the 2ederal Ileserve Bank and all portions of the district. "Sixth. The ixipulatioi, area, and prevalent business activities of the district, whether agricultural, nanufacturinp:, mining, or comaercial, its record of growth and development in the _past and its oroppect for the future." On the other hand, Baltimore, throughout its brief, • filed with this honorable bod:', lays the greatest stress ur)on the size of Baltimore as com,ared with that of Richmond, and makes no effort to prove, and it is unable to prove, that it better fulfils any of the requirements of the Act, as understood by the financial world at large, and the Pederal . eserve Organization Com. ittee, than Richmond. l If, therefore, we can show that Baltimore has a vrong conception of the purposes of the Act, and of what is required • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis of a city deslrinu to be bamed as the 'ederal :1eserve Ci'u; of a District, it follows that its evidence has no bearing an the questions at issue and that its arguments are misdirected. To illustrate our contentions in these respects, we refer, first, to page 30 of 9altimore's Brief, where it is SKE8 said: "Without undertal:ing a minute review of the provisions the Federal Reserve Act, with which this Board is familiar, it may be said that a cardinal feature - if not the cardinal feature - of the new system is its comprehensiveness. The , resent banking system had been found inadequate. It had been found to create an artificial concentration of the money of the whole country in New Yor-c. City (and to a lesser extent in Chicago). • This concentration, it has been thought, made the banking system too dependent upon speculation in the stock market and too little adapted to meet the more strictly commercial and agricultural floods of the country. Congre6s set out to correct these conditions, not, however, primarily by forbIddine the fractices which have been deemed undesirable or unduly prominent in our banking system, but mainly by expanding the system and providing new (and supposedly more efficient) channels by which the money and banking resources of the country might naturally • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis flow towards the cofitlercial transactions, as distinguished from speculation in stocks." At page 33 this further definition aa)ears: "With, porha, a more accurate sense of proportion, it might f irly be said that the Federal Reserve :3anks 41011 SKE9 410 are banks vested (1) ,ith s-Necio.1 iJoers of gret iA not vested in other banks, and (2) iith uneral er to conduct all branches of thc business of banking, ea:cept that, in transactions with the labile, they may not perform certain important but routine Thnctions of ordinary bankinc, which are expressly or by im)lication reserved to the aember banks beloncinG to the same united system." 410 http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis The learned authors of 3altimore T 2 T3rief, when next a(proaching this subject, at pare 39 of the brief, quote with manifest approval the editorial reply of the Journal of Commerce, of April 24, 1914, to a letter which had been sent that paper by the Richmond Comittee, which letter, however, in not printed in Baltimore'L brief. In the editorial in question these novel views of the purposes of the Act appear. "The Richmond Committee says that in the middle and southern portion of its district an desi nated, the three , State, Virginia, North Carolina and South Carolina, have nearly 6,000,000 population and 1,223 banking institutions, while the northern part, in 7,hich 3altimore is situated, has less than 3,000,000 population and only 494 banks. It also shows how much more convenient for railroad and mail com.unicAion Richmond is than 3altimore to thin large portion of SKEl0 the district." Purther quotinc: "To our mina this has very little to do with the case. It is not a question of area and distances, or of population and number of banks, ElO much as of density of population within certain areas, volume and character of transactions and number of daily communications to be made. 410 A limited area mirht be marked out in this city containing a reater opnlation than any cue of the three H3ates named, and anothrr in which more commercial and financial business 111 is transacted in a day than in all three of them, while there 1 in the only a fraction as many banks in the whole city as tates which constitute the southern part of the Richmond District." Evidently not being satisfied that the facts and conditions surrounding Baltimore justii:ied the desicnation of that city by the -,Iederal .eserve Organization Committee as the location for a 'Federal Reserve 1-3an7„):, the learned 111 http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis author3 of 5altimore l e Brief again define the scope and purpose of the Act, •17inu it this remarkable construction: "The princial purposes of Conr.ress, however, in devisim this addition to our oxistinp system, .:as evidently not so much to improve conditions at ordinary times as to 51E11 provide a more satisfactory system in times of stress. occurrence oT .panics and the inadequacy The • the present system to deal with ranjcs were undoubtedly foremost in he minds of Congress, as they have been in the minds of all ;ho have intorer;te0 thennelveo in banking: and financial reform in this country. ::xceyt for certain 20 called seasonal strains (which have not been greatly felt since the :anic of 1907), our existint system has been fairly ; 410, http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis satisfactory in ordinary times. It is in times of stress ti)Lcb the weaknesses of the present system become manifest. These weakneses it wai. the prime purpose of GonEress to cure." The above being fair samrles of t're understanding of the authors of 7 'altimore's brief of the purposes of the Act and of what is required of a -ederal T?Pserve City, natural tha it is they filled their brief with matter wholly irrelevant emd im-nterial; unless, perchance, 7altimore, realizing that she did not possess the true requisites of a 7ederal Reserve City, a required by the ct, resorted to the expedient of exteLlir - her Fenorfa virtues, her possessLon of which is undilled, in the hope that she miOt still be designated. I regret that I shall be unable, on account of the SKE12 shortness of time allowed for oral arruo)eat, to call your attention to the overwhelming weight of evidence in H11)1 ort of our claim that ilichmond meets al] the reclidrements of the Act, as anderstond by tho:'e learned in finance, and that altimere fails to do 20. I shall leave this part of the case to my associate, the 7onorable Eppa Runton, Jr., who is necaliarly well qualified for the underta,-inr; and shall devote the rest of my time to a few points which in My oljnion should have great weirht with you in forming your decision. ?irct, it irKl.s plainly contemilated in the Act that 2ederal Banks should act not only as clearing houses for the members in their own districts, but between districts. The clearinp between dirtricts, we believe, will develop into enormous proportions and that the bank most advantageously located for clearing transactions of r1-17 large section of the country will have a great service to perform. that Richmond rather tlAan The 'ederal O http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis We claim occunies this position. eserve Orp:anition Committee having, for obvioucl rnd jut reas)ns, :elected the cities of loston, New 'ork, and Philadelphia, in georaphical order, as Reserve Cities, could not have accomplished a proper divioion 0? the banking power of t1-1- :last mid of the territory gederally, by naming t1- 0 nearby city of Baltimore in the . 11 410 SKE13 111 northeast corner of the District No. 5 as the fourth city alln;. the Atlantic seaboard. Second: The overwhelming preference of the banks and: ,altimore, of the people in thr District for Richmond over , assumini_ that they had intelligence enough to know "ht was best for their buriness interests, founded on present banking connecti ,nr and the customary course of trade, should, and doubtless did, have great weight with the 7ederal Reserve Organization Cormittee in locating the 'ederal Reserve • City of District iTo. 5 at Richmond rather than at ialtimore. Further, I would respectfull: call your attention in some detail to the fact th-t although "Daltimore's banking resources are greater than those of Richmond, they are not to the same extent availalae for the requirements of Ustrict Ho. 5, and also to. the failure of 7altimore and of :7aryland keep apace during the last decade with the growth in banks and banking resources, and in comriercial and industrial development genora11:7, with Richmond and Virginia • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis and v:ith :orth and outh Carolina, with ;,hich Richmond is inseparabl„- connected. On pacre 21 of the 7altimore brief, the divisioA oJ hrr OV7er iven as follows:Total ')anking Resources. 3KE14 114,973,000 7ational Banc. State Banks, trust companies, and stock savings companies. . 80,183,000 . 102,708,000 Dauel savingr, banks. Total . . • ,)297,864,00fl 4 The resources of mutual savins banks and trut companies are T;182,000,000, or 60 per cent of the eetire 41011 bankinc resources of 1),altimore. field of their own and they caneot, as at present constituted, enter the systozi. • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis , :rust co- apanies have a eaviegs banks cannot, in the nature of their eueieess, become members. Again, we would eoirt out that in the itemized statement of resources on page 19 of the Baltimore brief, the fact that "128,000,000, or 4Z per cent of the whole, are "investments, bonds, securities, etc." The actual use Tialtimore is making of its banking resources, as well as its rate of projress in the world of fiAance, can best be known and unde stood by referring to is iwn estimate of these matters when not engaged in endeavorinc to promote its claims as the financial capital of a ?ederal 7leserve District. such evidence as this can be found in the report of the Comiiion for the Revision of the Taxation ;yetem of the State of Ilarland and the City of Baltimore, appointed in pursuance of Calipter 779 of SKE15 • the Acts of the General Assembly or 7f,ry1and, 1912. The re ort is signed by the followin, ron onsible citizens of the state of noryland:- . baker, J. Harr,: :"ahool, E. Jtanloy Cary, J. H. Gambr 11, Jr., Calif= 1. Cooper, and Vernon Cook. (See pages 28g and 288 of said report). The truth of what the distinguished Committee has said of Baltimore in connection with the lack of rrogress In the bankin, world is borne out by statistics botl: in regard to the City of 7a1timere and to the 'tate of 7aryland. • Por the purpose of comnaring the growth of the City of "Baltimore and the tate of Maryland with the City of Richmond and the ; -tate of Virginia, we refer you, first, to the reports made to the Comtrol er of the Treasury, on ::arch /, 1914, by all of to national Banks of each of the States in District No. 5, and then to the combined statement of National and State banks in said District. AGGREGATE RESOURCES. 1902 • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 1913 Increase Per Cent Maryland. . . 30,575,000 :56,989,000 26,414,000 86 Baltimore . . 82,019,000 110,989,000 28,877,000 35 Virc2inia . . . 38,220,000 100,295,000 62,075,00 162 Riehuond . . 16,730,000 56,576,000 39,846,000 238 rt]i Carolina 18,865,000 62,459,000 43,594,000 231 south Carolina 13,724,000 42,082,000 28,358,000 207 $ SZE16 http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis COMBINED 5TAT=i1T OF NATIONAL & 1902 TATi BANKS. 1913 2er Cent. Increase Virginia (Inelnd394,728,000 inf; Richmond) 218,211,000 123,483,000 130 ir,orth Carolina 33,322,000 117,315,000 82,994,000 252 South Carolint:. 2_8,138,000 95 185 I 000 _L. 67,047,000 238 .156,18G,000 430,712,000 :274,524,000 176 73,454,000 153,766,000 80,312,000 109 123,613,000 199,525,000 75,912,030 61 West Virinia Maryland. (Including Balti(lore). From sworn secial reports submitted to the ComItro11e, of the 7reasurj, it ap,ears that the National Banks in Richmond were lending in the thirteen southern state on January 13, 1914, more money than was beinc loaned in those States by the national bans of any other city in the country, except hew 'ork. The total loans and discoants in the thirteen Southern States by Balti ore, Yashington and Richmond are as follows:Baltimore,. Washi,gton. Richmond . 6,891, 915,000 33,473,00 These f4:ures show that in those portions of District No. 5 outside of the Stater of Vircinia and Maryland, the Richmond national banks are lending twice as mnell money as 0 401 SYM7 all of the national banks of Baltimore an Aned. ,:achin ton cum- They also sho.:: that although Richmond was not a : reserve city, the banks and truot companies in the thirteen Southern ! tatos had on (lc osit in the national banks of Richmond on February 14., 1914, :9,876,000, or slightly more than the banks of thi section had on deposit in the city of Baltimore, and four tiNe,, as mach as they carried in 'ashin:,ton, although these two cities have long enjoyed II! the benefits of being reserve cities. In conclusion, the present position Ix have shown that rAchm)nd occupies as the financial center of the District; the wonderful progress she has made in the last ten ;ears and the certainty that tiv,t rate of Progress wili be maintained and ii,creased, founded as it is upon Ihe unprecedented develocment of the great natural resources -people of of the District; her intimte knowlddge of the . t- le District, of their industries and financial needs; her central location and nneoualled transportation connec- • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis tiOAS with every section of the District: and, lastly, the overwhelminL ex ression of the wish and desire of a sreat majority of the banks of the District to continue to do business With her,made it entirely fit and proper that the Federal Reserve Organization Committee should have 3KE18 . S named Richmond as the Federal Reserve City of District No. 5, and will lead this Honorable 'Iody, we confidently submit, to a like conclusion. Hunton statement follows • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ani Edmonston follows Holmes Federal 1 Reserve Board 1/6/1Z 12:0 A 411 http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ARGUMENT OP MR. EPA HUNTON, O RIC=OND VA., IN : FAVOR OP THE DESIGNATION OF RICHMOND AS TH- FEDERAL RESERVE CITY FOR THE FIFTH FEDERAL RESERVE DIST7.ICT. If the Court pleases, the -'ederal 7,eserve Act leaves it to the Organization Committee to determine the reserve by this '3oard. cities of each Oistrict, subject to review The Act itself fixes no criteria by which to determine the reserve cities. An examination of the terms of the Act will, however, throw much livht upun the intention of Congress in this respect, and it seems to me that the best aid which T can give to this 3oard in reaching a conclusion in thi- matter is to poiict out those considerations which seem to indicate Baltimore as the reserve city for the district, and those which seem to indicate Richmond, and Veen those considerations are before the oard, to balance them and nee where the balance lies. I will first consider 7altimore. My friend, in his opening, has indicate6 that he relies very largely upon its size, which- e admit and recojnize. The record dis- cleles, and the Board will recM, that at the hearing before tie ')I-ETallization coalittee '3altimore was first heard, and that at that meeting she insisted upon her size being the determining factor. "here were two other consi6erations that she urged very forcefully and very earnestly 11,.)on that occasion, namely, the number of banks 10 A0 aKE2 second, in the fifth district- amil other business organizations ,1 which favored 7,altimore; and third, that 3a1timore had a 1,referential freight rate. ;To, I will endeavor to show that the only consideration which favors Baltimore is ito size, and that when the facts are ascertained, the other two factors vanish, she possessim neither as again[A, ::ichmond. Now, my friend has said that the vote of the banks amounts to nothing, because in the Act there is no reference made to a vote of the bans, yet he says that the ietermininp factor should be the 111 size and the population of Baltimore, as if there were a statement in the Act that that should -,e) the guide to control this J3oard or the Organization Comilittee in reaching its conclusions. low easy it would have Leen to have pre- scribed in the Act, had that been the intenthoa of Congress, that the largest city in each reserve dis-Grict should be tho reserve city; or, if it was not the intention of Congress to make it simply the largest in population, how easy it • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis would have been to have said that if there is in any dishas a city which,im twice, or three or fonr times the trict :opulation of any other city, that it should be selected as the reserve city. But there is no mention in the Act of that, and it is clear that it was not the intention of arKE3 Congress that that should be the sole determining factor. Thee is no question that it is a factor of weight, a factor that will. carry consideration, and which, if other factors combine with it, will determine the location of the reserve city. 3ut "All!" says my friend to the Organiza- tion Comittee, "you established the reserve cities in the largest six cities in the United States, and when you got to laltimore, you skipl ed it, the seventh in size", and criticism is made in the brief and in the oral argument of the Organization Committee and its published stateme_at, 411 along with its decision, which my friend has quoted. My friend says that after enumerating the first six largest cities in the United States, the seventh should follow in a the next naming ofit reserve city, but he fails to emiinasize this factor stated by the Organization Cohr_.ittee in the announcement of its decision, that geoL n, hical „ situation and all other considerations fully justify t:!_cir selection. • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis If that had been trio of Baltimore, the seventh city in size, it also would have been selected, but it is the absence of those considerations that has led to bhe Organization Comnittee passing over the city of ';_latiLlore and fixing Hiehmond as the reserve city for the fifth district. That Baltimore is not geoc .rarhicall,7 situated is not due •to the fact that it is at the northern end SZE4 the dintrict, but it is due to the fact that the Act prescribes that the five appointed members of this Board shall be appointed from different districts, or that not more than one of them shall be from any reserve 'district, and that they shall be distributed geographically over the Unite. States. Now, if you were to make Baltimore a re- serve city, you would put four of the reserve cities of the Atlantic : tates, 13oston, New York, Philadelphia and Baltimore, in the extreme northern part of the Atlantic seaboard MP http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis states, and leave none between :altimore and the Gulf, with the exception of Atlanta. ;ore than that, you would make the reserve city of the fifth district a cit; not intinately and not ditinctively a southern city, and not intiriatoly conikected and familiar with the distinctive crops of that district, and not intimately familiar its banks, its hankers and its banking situation. Tow, it in conceded that Baltimore has comiercial, industrial and financial power r;omewhat with reference to it size, 1,ut this record will show clearly that the larger portion of its financial transactions are with the territory to its north. :y learned friend calle v‘ry near making that statement in his openine argument. The record will also disclose that a lare iltrt of its commercial, and I imagine of its financial transactions, are with the west, 3KE5 and this record will demonstrate that instead of Baltimore boinc the financial, commercial and industrial capital of the fifth district, the credit belongs to the city of Richmond. They claimed that the voLe of the banks, for instance, in their original hearing before the Organization Committee, and the campaign of the city of Ilichmond, to which my friend has alluded, - a campaign was also waged by the city of Baltimore and it fel down, as results were not produced there by it. S --3altimore was heard first by the Organization Committee, and she presented to the Organization Com iitLee the fact that a number of banks in the District favored Baltimore, and a number of other business institutions, and you will be astonished, after the argument of my friend, to learn that I believe ten f,re-es of the fifteen page brief filed by the city of 7altimore was devoted to that factor in their case. 3ut they were not aware, then, of wht had been the results of the Idchmond campaign, conducted upon as high a ground as that of the campaign of !II http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis the city of Baltimore, but when they discovered that Che Richmond case was presented to the Organization Committee, we her nothing more of the effect to be given to the votes Later, of the banks, except in their brief.amixiiktimy.thkngxjn their oral argument, they say that no im.ortance should be SKE6 attached to theth because they are not mentioned in the Pederal 2eserve low, that was an enormous factor in favor of Baltimore when they believed that a majority of the ban. :s were in its favor. It is a factor of no conse- quence when it is demonstrated that it has not a pronounced ajority, but that a overwhelming majority of the banks in the district is in favor of the city of Richmond. :-ere tan that, at Baltimore's hearin 411 before the Organization -. resented, it Committee, before I3ichmond's cane had been : was claimed that it had a preferential freight rate over • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis the city of ichmond, and tilt-A that drew the currents of comrierce and of business to the city of Baltimore, and that tL:t was a determining factor in favor of the city of Baltimore, they being unaware tif the fact that when Richmond's case was presented, instead of 7,altimore havi.,L: a referen- tial freilt rate as against Richmond, Richmond, from her geograi)hical location, had a preferential frelf;ht rate over the city of Baltimore, and that there a ;reference of 11.2 A per cent per hundredweight 1 on all goods or corn: odities of the class going through Richmond, a difference of thirteen per cent: I wanted to say that that was developed uon the hearing of the City of Richmond, and since that hearing, either in the oral argument nor or in the briefs, have we heard a single reference made to the T- factor of a preferential freight rate in favor of the City of -Baltimore as determining whether it should be the reserve city r not. So that .I say the claim that Balti- more was the choice of the bani:s has been dtsproved by the evidence, the fact that Baltimore had a preferential freight rate has been disproved by the evidence, and it leaves no factor in favor of the City of Baltimore, except its size, which was been dwelt upon this morning, and which the act itself shows was not intended by Congress to -')e the con- • trolling factor. Be-s44e-e-, if accompanied by the other conditions that existed as to the six largest cities of the Unitf3d States, would have controlled it, but it does not in the case of the City of Baltimore, its business being largely done with the territory to its north and with the terrlory to its west. Thera can be no further letd,„; or stronger illustration of that factomild- the factX stated by colleague that in January, 1913, the national banks of the City of Baltimore were lending less than :77 1000,000. • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis to entire thirteen southern states, and at the time the City oP Richmond was lending to those saue southern states nearly t34,000,000., nearly five times as ,auch as a city that coms and claims to be the financial capital of the fifth distriet. It seers to .e that we might leave • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis t:lere this claim of tIJ City of 3E,ltimora that she is the c_mtr of the fifth district, as it is absolutely rette4 by the fact that W, a s'nle ti1V3 the national banks of the City of Richmond, which itrcli is is only onefifth its size, were lending nearly five times as ,uch to the southern sl,ates as the City of Baltimore. There -Pore, we claim that the only factor In favor of Baltimore, and e think t'llat due weir ht s,lould be given to it, is that , 73,t1timore has a larger population than Richmond, but that it does its business very largely with the territory to its north and the territory to its west. Now, lt us consid:r for a moment what are the factors that we claim poi2t Co Richmond as the federal reserve city. First, the oalection would distribute of Richmond instead of 7:altimore reserve cities more evenly in the differ- ent sections of the country. that. I have already alluded to One of the purposes of the act, as I understand, is tc prevent too great concentration of resources and banking capital in any one section, and to concentrate more in other sections so as to give to the whole country a more even distribution thereof. I[cw, if you put a large part of the banking resources in the four cities of http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 9 Boston, New York, Philadelphia and Baltimore, you will have violated t'ie spirit of the act, whjch I undrstand is a proclamation of financial freedom to this country. than that, 7,7ou will have volated th More terrttoril and geograplicra division, and :you will have lefrbut one sin71: federal reserve city in the Atlantic states between Baltimore and he Gulf, not a controlling factor, by any mean;, but one of a nulAblr pregnant with -leaning to the gentlemen who have devoted intelligent study and time to this question, and who, it SOCZIS to me, must inevitably desig- nate Richolond as this reserve city. The second is t'tat Richmond has closer relations and a more intimate Icnowladre of the distinctive crops of the district than Baltimore. The South Atlantic states have three peculiar crops, cotton, tobacco and peanuts. Tle annual value of these three crops are aroximately as follows: Cotton, 1255,000,000.; tobacco, f232,0')0,0n0.; peanuts, 0.5,000,400. which is in the arc There can be no question that a city o? production o‘' these three crops must .now bett!r their financial n-!eds. They must be more intellig:ltly financed fro;'i within that froll without. Richmond is within the area of nroduction. not. 7t'altimore is It seens to me that at this time there could be no better illustration of that than the statement that the 10 • i‘ Richmond banks an( bankers are infinitely more familiar with t'le cotton situation in the south now in the time of this crisis in that industr:r. I think le -"ay a ,snJe that it is hardly probable that the area of cotton should co le to be limited by legislation. production Thjs important and vital matter in that great industry must be bronght about by personal influence and by financial pressure, and the bankers of the City of Richmnd, from their knowledge 411 and familiarity with the bankers of thee coiton states and the State of Virginia, are in a better position • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis to reduce the area of cotton production in this country than is the City of Baltimore, which is to the north of it. Again, there are for foreim frov,ern lents, or their buyers of cotton and tobacco, who have their headquarters in Rich-lond, and this shocking statement, it s, :e'ls to shows the distinctly pceol,11-,r relations of RIchqond to these peculiar crops. In 1015 40 per cent of the tobacco crop raised in Virginia, North Carolim, dnd So-th Carolina came directly to Richmond for re-handlinF, .11(1 :znufacturing, and Richmond paid out in connection with it the enormous sum of .. ,,53,000,000, or , C per cent value of the crops of those three states. or ',1k1 total A portion of this, howev,r, went to 7- ntucky, which is not in the fifth district. Those facts show the intimate relations of 11 Richmond with the three distinctive crops of tha fifth district, and ny belief Is, thol.h the record does not scw, and T 'oresume that statistics would 'e dirficult to obtain, that in tlie financing or the peanut crop it is :lore pronounced than it is as to the other three. Ti third is preferential frt7ht rates, which I have already alluded to. 411 411 Baltimor Mr. Ilewcol!Lir, viien testifying for shington, said: rats are the _,rime factors in the purchase and sale of commodities, and in shapirc- the ncnial flow of • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ,trade in commercial and manufacturing centers enjoying the advantages of freight rates lower than those established." It see .s to le that Mr. Newcomer announced the absolutely correct 2roposition, believing, howev!r, at the ti , -3 2 that It was perlps Baltimore that had the preferential freilt rat s. But it is true when it turns out that it is to Richmond that the preferential frei7ht rateX belongs from its geographical position. Not only is that true, but there is a quicker deliv:ry by one to -four days In Richmond t'ian in Baltimore, and this pref ,rantial freight rata applies to all commodity and class rates. It is doubtless due 4,o this preferential freight rate that the tonnage in certain Virginia cities in 1913, in North Crolimi, South Carolina, raoruia and enormous amount of aerida reac'qed the 908 tons, -,nd or this from Richmond alo. a there was 629,45 tons. those f-Agures for Baltimore. Yow, we have not got Te know that they were there for Rich,aonil l and we had thouffit they would produce them locause we believed Baltimore \-41 they would show the inferiority of as .the commercial center of the fifth district as clearly as the loans from the national banks of tAa fifth district show that it is inferior as a; financial canter, and I hay • sen from this record that there vnre inderrmdent invoAigations made by the Treasury Depart)ae,red that those indenendent investigations ment, 'tnd it a_ i disclosed those facts as to naltimore. Richmond is more convenient than Baltimore to a larger numb.:r of banks in t.hc. district. There are 484 national banks in the district, and 1,122 state ban's. There are in vir[:inia, North Carolina and South Carolina ' 1,123 bans, leaving 483 in the rest of the , istrict. • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis All of these banks in North Carolina dnd South Carolina are about four and one-half hnurs nearer to Richmond than to Baltimore. The same is true of most of the banks in -01t counsel or Baltimore in their brief say: within one "Practically the whole district being 1m business lay of either Baltimore or Rjch:ilond, the question of di:Ytance obviously becomes immaterial. of t'ie The exact hour ay at which a mail transaction is consummated is unimportant." I agree with iny friend that the exact hour of the day at which a bank transaction is accomplished is unimportant, wit '1 this single proviso, and it is Ln important one, and that is that it be received in time to -oe cleared 111 http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis on that day; otherwise it is very ,Iatrial. Now, such is the connection of Richmond with North Carolina and South Carolina and with a great:r portion or Virginia hnd a part of West Virginia that its mails reach there -- we know that the ban1:6 1 and especially the country banks send out their mail after they close in the evening, and from that territory the all reaches Richmo:A largely by the time the banks open, so that immaterial as the time may be at which the mail l'my arrive, provided it is in time to be cleared, -- it reaches the to be cleared that day. Richmond ')anks in tile We know that the clearing houses generally close .A about eleven o'clock, if a transaction / 4 comes too laLe to be cleared a day. that day there is the A47/of Now, if you take the distance from that territory to Tialtimore, many of those transactions it woulri. be YA 411 4111 iigpossible to clear on t'Int but they would be delayed and would only be completed in the transactions of the next day. So that while I agre with my friend as to the exact time at which mail arrives is unimportant, I do maintain that it is of the utmost importance that it should be rc!ived in Lila to be cleared on the same day. Amin, another factor in favor of Richmond is the relative increase in the banking resources of Richmond and 411 • Baltimore. That Richmond's resources have in-reased much more rapidly than those by in of Baltimore has been established colleague upon authority of the Baltimore ±4eople themselves, but I do not 'know whether this Board caught the fact that that document was appended to the r7ime of ly distinguished friend who so ably represents Baltimore with accept it his colleague on this occasion, and we may f\mmpant therefore as an absolutely fair and impartial I would not like to a2• ( g/HiLek 7 1 say • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ftrro-nf4mont of the national ban's of Baltimore. The national banks in Richmond in December, 1904, had capital and. Pur_Iml of '3,115,000; in :"arch, 1914, an increase of 199%. 9,314,000, In September, 1904, the Baltimore banks had capital and surplus of .418,262,000, and in Larch, 1914, a9,205,000, an increase of oAli No,, it seems to me th. t is a very im - ortant factor 411 SKE15 • to be taken notice of, that Richmond's mere se w.,is 199, while Thltimore's increase was onlzr 51. It is more striking with the :tater, to the south, that sectioA of the country whici. has, I am happy to say, assumed such a position of progress and of ,,rosperity in our entire country th,t has made it marked and looked to for investment and dovelo ment and for lirogre s. '111 The increase in the aggregate resources of the nationvl and state banks is just as striking. The record does not • give the statistics for the two cities, but it does 111 http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis them for Virginia, including 7dchmond, for :7aryland, including Baltimore, and for the other states in the district, from 1902 to 1915: Virginia (including 2ichmonC, 1902, ,728,000; 1913, :)216,221,000; per cent of increase, 130. Maryland (including -Ialtimore), 1902, 1_23,613,000; 1913, ''299,525,000, an increase of 615. So that the financial, industrial and commercial capital of this district, assuming that all that my friend claims for it is true, world soon vanish unless it ,ot renewed. III 1902 Maryland had nearly :29,0)0,0)0 more bank resources than Virginia, while in 191'.': Virginia had nearly SKE16 019,000,000 more bank resources than Maryland. The banking resources of North Carolifia had increased in the same time of South Carolina, 238;L, and of 7est VirOnia 109%, but of Laryland only 61%. It seems to me that that is an imiortant factor. 1,ot - only has the Organization Commjt'uee desi!2nated the cit that has the most intimate finumcial relation with the fifth district, and has the largest transactions with the fifth district, but it has selected the city that is growing and progressing at a steady, healthy rate, and which is nearest to the ,'ection that is increasing normally and rapidly. Another factor in favor of 2,ichmond is that the custoLlary course of business in the district is with Richmond and not with Baltimore. Eothinf- will more Ilearly indicate the trend of business in the district to Richmond than the banking relations betv:een Ric:111110'nd and the other States in the district. • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis In considerin, these banking relations it must be remembered that Baltinore ws one of the original reserve cities, and that Richmond was never a reserve city until it:; designation as the 'Federal reserve city of the fifth district. From the Comptroller's report for 1912 it appears that there are 380 state and national banks in Virginia, and 41, SKE17 that they carry in the Richmond banks 526 accounts. In -lorth Carolina there are 429 banks, and they carry in Richmond banks 397 accounts. In South Carolina there are 346 banks, and they carry in the Richmond banks 162 accounts. In Yest Virginia there are 297 banks, and the:: carry in Richmond banks 82 accounts. The maximluq. de, osits carried in :ichmond banks in 1913 by banks from Virginia, ::orth Carolina, :'outh Carolina and 'est Virginia are 12,653,769. The maximum dey.osits carried in ..lichmond bans by individuals, firms and cororation: • from Lorth Carolina and :'onth Carolina are .4,64',366. The maximum oi de,osits by banks, individuals and corporations • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis from rorth Carolina in :Achnond banks is ''7,690,620, and from South Carolina :;2,343,766. From thiP it appears that banks, corporations and individuals in the district, exclusive of Maryland, carried on deposit in the _7.ichmond banks over •17,000,000. The maximum of loans made by banks in Ilichmond in 191Z to Aher banks in Virginia, I:orth Carolina, ,olith Carolina and West Virginia was '6,174,175. The maximum of loans made by banks in :Achmond in 191C to indlividuals, firms and corporations in rorth Carolina was "5,245,451, in South Carolina :'3,129,615. • SICE18 • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis The maximum of loans to ban s, indi-Tidm.as and corporations in Horth Carolina was, therefore, '7,445,931, and in outh Carolina -5,553,730. To meet the demand for crops and other purposes, Richmond durinr the :fear 1913 shipped.14,00,0 -,0 in currency into the southern States. Now, we have not those fiLures as to wish we had. I believe that they would altimore. I how that the clairt that Richmond is the financial center of the filth district would be established by them, ,:nd I trust that it is true that the independent investiEation made by the Treasury Department, which it was not in our power to IJIaix, will estaolish the facts as to those thinus as to the city of Baltimore, and I feel assured that it will confirm the wisdom of the Organization Com_ittoe and lead this Board to affirm its decision in dosignatint, :icT,Tiond as the reser ve city. It is a difficult matter to show clearly that 'altimore is not the industrial and commercial center, but I accep t the statement of one of the witnesses for Baltimore that convenience is the servant of comerce, and that it makes 'the trade currents which create financial and many other business relations. Assuminc that that is a correct riii- SKE19 ciple, and I believe it to be, it is irresistibly established that Richmond, with its preferential frei4:ht rate, along with the distinctive character of its crops, is the commercial and industrial capital of the district, and not the city of laltiNoro. he come now to what my friends have labored with, and I am not goinp to deal with the toll of banks taken by the f.1) • city of Richmond, but I am going to deal with it as taken by the Organization Committee. I believe in the roll of the banks in the district made directly by the Comprtoller's office Richmond received 167 votes to 128 for Baltimore, and that was a factor that my friends thought should have an enormous amount of weight when first they alo;.eared before the Organization Committee, and which they have devoted so much time in their brief to minimizing and ridiauling. Those fires do not :how the 1'1111 force of Rich- mond's position, because in the 28 votes were cast for Coluubia, ,outh Carolina, by banks in South Carolina, • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis and 19 for Charlotte, by banks in North Carolina, while Washincton's 12 votes were cast for itself. It is clearly established by the testimony that the banks voting for Charlotte and for Columbia favored Richmond as their secolld choice, and we may assume for the sake of argument that 4411 aKE20 the banks of Washington were in favor of Baltimore as their second choice. Adding to Richmond her second choice bj Charlotte and Columbia, and adding to Baltimore her second choice by the city of Yashi/vt n, it would make the number of banks in favor of the city of Illc]imond 214, and that in favor of Baltimore 140. It seems to me that that is the most conclusive factor of all th't the Organization Committee and this Board has before it in determinill, this matter 111 • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis primarily, this banking problem of the selection of the reserve city. The banks know which is the city of conven- ience, and whore is the customary course of business. They are not controlled by even so adroit a campaign as the city of Baltimore which cou d not got a majority. They are not controlled by sentimental reasons, as evidenced by my friendlp statement that a lot of banks in Virginia voted for the city of Baltimore. They are hard headed business men determining business requirements by the course of business that they have had, and by their convenience, and they know that it is to aichmond that they must look for a more intimate acquaintance, for the knowledge of their financial needs, and for the knowledge of their peculiar crops, and that is why one of the witnesses before the Organization Com'Attee said that he would be a little ray from home to 411/ SKE21 co to Baltimore. Now, I say that the bert evidence of convenidence and 41/0 the customary course of business is the showing of these 214 bans, as against the 140 for the city of Baltimore; that they know what are their financial needs; that they know that it is to :lichmond that they must go. My friend has referred so much to the anwillin, ness r )-1 of - iiti-o-414- trtout to go into a district of t riich Atlanta Was the reserve city, and I recognize it, but not because it • was not to the north. of it, as my friend would argue, but because Atlanta was a borrowing community and Richmond was a lending community, financing the cities to the south of i and lending ,334,000,000 approximately at a time wren Baltimore was lending- less than :/,0')0,000, and that was the reason why the cities did not del- ire to -o to Atlanta, but , waned to p.o t3 a city as tics their reserve city where their financial needs could be met and where they had been in the habit of having their financial needs met. • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Now, my friends say that we never dare to talk about Richmond, as compared with Baltimore, in a district where Baltimore was a member of the district. Let as see whether my friends are not in error in that res_ect also. At the hearing in 'TashinGton before the Organization SKE22 411/ Coin:Atte° I.Tr. Norwood, of Greenville, :outh Carolina, and Rhett, of Columbia, south Carolina, while testifyint in favor of Richmond as the reserve city, both stated that :aryland should -on added to the district. ;:r. Bruton, of ',Tilson, worth Carolina, testifying in behall: of Richmond, said that he would feel that "we would be a litt'e way from home to -Ga'-_e us to TIaltimore". Before the action of the Organization Committee 11r. George A. :olderness filed a brief for 'uhe North Carolina Bankers Association, adding Maryland to the district, and makes a stronE arument in favor of the solectiom of Rich • mond as the reserve city Jf a district which includes Maryland. It is difficult to understand, therefore, how this statement can be made in the brief for the city of Baltimore. I quote: "It cannot be too strongly stated that before the action of the Organization Committee no one ever thout ht • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis of comiarinc Richmond with 3altimore, or qaestioning the commercial and financial pre-eminence of 1:-atimore in what , has now been made the fifth district." '(et there is the testimony of these gentlemen showing that while the district, as mapped out by Richmond, did not include Llaryland, that the fact that it might include Mary- SKE23 land was contemplated, and that the answer was still aich- 411, mond in preference t) 4, http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis IoW, I want to say this. this It see P to me that taking atter as a matter de novo, that the vieiht of the testimony and the record establishes the fact that iiwtead of 3alti'lore being the financial, industrial and commercial capital of the fifth district, .tnd being the most convenient to the customary course of business, it is Richmond where the convenience of the customary course of business would be best nubserved. I say, as an original proposition, that is true, but this does not come up as an original proposition, 1,s this -3oard has held when it gave to the city of Baltimore the opening and the conclusion of this presentation. It comes up not as an appeal, but as a re- view of th , actian of the Organization Connittee by the Reserve Board, and may I pause for an instant to say that a review is a common method used by the courts, that a petition for a re-hearing is not an unusual thing, and according to my recollection, though I cannot give the instances, this has been the case in this country, that where appella,e courts are made up of the judges of the lower court, that the judge deciding the case in the lower court has been a member of the tribunal to re-hear and review 5KE24 themselves. 4141/ 1107, I say that this Organization Committee visited eighteen different cities in their efforts to reach wise conclusions, and hearings were given to over two hundred cities that came in touch with the financial men and the business men of all sections of the common country. They were aqthorized to employ experts and counsel - I do not see how counsel could aid so much in that difficult and delicate discussion, for which, even in the resentution of this view of it, I feel that I am no poorly qualified but they had the authority to employ experts and to make independent investigations, and I say that the decision of that Organization ComNittee is primarily right in all courts, both State and Ilederal, and should carry as much weight as is given to the wisdom of a jury or to the report of u. master or special master, and the rule, I believe, in Jlraost every jurisdiction is that such a report shall not be overthrown unless it is plainly wrong, and the burden upon ny 4111 http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis friends is not smuch as it was before the Organization Committee. The burden is upon them to estahlish to the satin- faction of thin 7oard that the action of this Organization Committee is clearly wrong; otherwise, as the 3oard has done in ,2iving to them the opening and conclusion, following •• SKE25 http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis the legal principles in such mattEirs, unless plainly wrong, must its decision, with the greater familiarity that they have with it from their personal touch with the situation from the personal hearings that they gave in these eighteen cities, and from the personal hearings of the two hundred cities, as the trial coart, seeing the witnesses and hearing t' eir testimony is able thereby to give more intelligent judment and the proLer weight that is due to them, - so, say the courts, unless 21ainly wrong, it must be affirmed. I want to say that T do not believe that our friends realize the proc7rsss that the city of licl_mond has made in the last two decades, more especially in the last, and I can understand their disappointment that in a controversy of this sort, friendly upon our part at least, that the prize, which could be given to but one, came to Richmond instead of to Baltimore. It may have been astonishing even to our own people to Imor v:hat the development had been, because thirty years prior to those to decades a large part of the city was in ashes. Its wealth had been swept away, the flower of its manhood had been given in response to the call of her State. The struggle during those thirty years was a slow and laborious one, and we remember even in this controversy that viiihr in that hour when we were 4141/ SKE26 4110 passing through the valley of death we never turned to our sister city of Baltimore for sympathy, encouragement and aid that she did not res)ond promptly and efficiently, and we do not forget that today. And we believe and we hope that if the decision of this Organization Coalittee is affirmed by this Tloard, that the time will come when the city of Baltiilore at least will not be ashamed of the regional bank of Richmond as a worker in the development of this great financial machinery which is to bring financial freedom and equaluy to all cections and all parts of this country, and give flexible and stable currency, under your wise administration of this Act which is an epoch in the financial history of this country. • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis aKE27 • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis CL0611.1(1• ARGUMENT OF nR. VERNON COOK, OF BALTMORE, MD., IN FAVOR OF THE DESIGNATION OF BALTILORE AS THE FEDERAL RES= CITY FOR TH2 FIFTH FEDERAL RES22.VE DISTRICT. Gentlemen of the 'Board, in the short time that remains for oral discussion it is impossible for us to lay before you all the many ways in which Baltimore, as we see it, has an advantage over Richmond for the location of a reserve City. Je can therefore only briefly touch on some of the more salient points of the argument. Now, as I see it, the underlying theme or text of the argument for Baltimore is this, that as we look about the country and find that the hills and valleys make certain natural reservoirs for water, so the course of business and the exigencies of trade form certain natural reservoirs for surplus banking capital, and we claim that Baltimore and always has been, one of those natural reservoirs for banking capital, and that ichm, nd never was, and in the ) - nature of things, for a great many years to come never can be such a natural reservoir for money. 7:e claim also that Baltimore is not only a natural reservoir, but a natural reservoir for this particular :ifth district, including these Stater, the Virginias, the AMAI SXE28 do I say this? 1111 Now, why Carolinas, Maryland and the District of ColumbiL;.. My opponents on the other side have made me very startlim BEE= statements, it seems to me, but none more startling to me here than the statement made by Mr. 7unton that Baltimore does not have its business with the south, but has its business with the north. Those of us who live in Daltimere have been hearing for many years about Baltimore's southern trade, one of the things we always talk about, one of the things that we worIc for, one of the things we pride ourselves upon posf:essin3. the facts? what are Does Baltimore have its business in the south or in the north? have the figures in our brief on page 11, and ve show that of all the products or coeds manuOr factured mmill distributed by ,Ialtimore, thcre is 27,000,000 worth distributed in the State of Maryland itself, and that in the rest of this district there is ::)51,00C,030 worth of products distributed. together, the result i • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Now, when we add those figures that 70;; of our manufactured products, and 70,) of the goods which our great jobbing houses send out go right into this very fifth district. Those are the figures on authorities that cannot be questioned, can lot be doubted, and they are set forth in our e say, therefore, our bu7iness is with this district. SKE29 Take the great jobbing houses of -Faltimore, turning out as they do and sellinc millions of dollars worth of goods in the solli;h. The r',alti:iore Bargain House alone has 75,000 accounts in the south. The well known firm of Hearst Brothers has l0,0')0 ',.ceo-unt.: in the south. result of thin? ',:hat is the The result of this is that it makes a natural flow of money from the south, from this district, e• • into 'altimore. These coods are cold by the Baltimore jobbers to Baltimore manufacturers and merchants in the south. They are sold on credit, and when the time of the year comes around when the southern 1)eople have harvested their crops and have t otten in their money, they pay their debts to Baltimore; then a flow of money comes in from these thousands of accounts,;these thousands of merchants all over the south, who owe 'altillore, begin to pay, and there is a perfect streme of money flowing from this district to Baltimore. After the crops are harvested, after the gret;_ demand for money in the south lets up, it flows back to • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis this city as the natural jiace for it to be as a reserve center. Then, in addition to that, not only is there the flow of money from the southern merchants to the Baltimore wholesalers, but another [Treat current that has set in S. SKE30 • toward raltiLltore is the payment of the dividends and of the coupons evidencin the interest that jc due to the Balti- more investors. l Now, my friends on tho other *ic- e sneak very slightingly of the savings banks of ;ltimore, and dimiss them with a word or two, because the capital of a savings bank in Baltimore could not be any (Tood to the rest of this 11N11 fifth district. Now, what are the facts? In the letuer filed in the brief from Mr. Richard H. Edmunds, the great statibtician of the south, he says that our three principal Baltimore savings banks which have their money invested largely in bonds, which my opponents would have you think therefore is no Load to the south, :Ir. Edmund says that out of 60,000,000 bonds held by these three savings banks alone, 23,O c,000, or more than 38, rei,resent investments i1 ten States south of the Potomac and east of the Mississippi. Now, when these coupons come due, there is another current, as I say, of money into Baltimore. • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Purther than that, there are three trusL companies in Baltimore alone that act as fiscal auents for 200,V0,000 of southern securities in the fifth district alone. Now, when the coupons on those southern securities are paid, that all necessarily has to be cleared through Baltimore. Now, my opponents say that Baltimore does not under- •• SKE31 • stand the industries or the crops of this fifth district, and they call attention to the fact that their three great crops are cotton, tobacco and peanuts, and they think we do not understand much about them. Most of that tobacco, as a matter of fact, is shipped through 3altimore. We think we have a good deal to do at times with the financing of the cotton crop. S. Not vory long ago, when this Board was . considering the matter of the cotton pool, Richmond was asked to raise only : i1,000,0DO, and Baltimore was asked to • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis raise .2,1500,0[)0 toward that pool. But the significance of my opponent's alyiunoii.t in his mention of cotton and tobacco conditions, to my mind is this. It is true that those are the three Iroducts of the Virginias and the Carolinas, and it is because they rely so largely on these three products that they never can become a great natural reserve center for surplus funds, because, as in a manufacturing plant it is necessary to keep your plant going as many says in the year as possible, so in the bankine business it is important to keep your capital working all the tiine. A State that has three crops only, tobacco, cotton and peanuts, can work a banking capital only through a part of the yearl it has only a seasonal de:fJand, but the faaces that become great banking centers and centers of 3TLE32 • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis reserve funds are the cities that are not only large cities, but cities thf'1; have a diversified demand for capital. "e in 3altimore have use for capital not only in the tobacco season and the peanut season, but we have use for it 36: days out of the year. -, I do not -know how . far you gentlemen are familiar with . 3altimore and its real position, but we say in our brief that it i2 the leadin - city in the country in the manufacture of men's clothing', in copper, in tin and sheet iron :,roducts, in fertilizers, in cotton duck, in ntraw hats, arid in the tanning and preserving business. In addition to this, Baltimore not only handles the business of its own manufacturers, but it is a great transfer point; I mean it is a great seaport. ",:ith the excel tion of Now "Tor, the city of Baltimore has more exports than any port on the Atlantic Coast. are ahead of 3oston, and we are very largely ahead of Philadelphia in the import business. Now, then, another thing must not be lost Si, ht of. One fifth of all the capital of those reserve banks is contributed by the Baltimore banks; a proximatelj one fifth of all the deposits in this aichmond bank, the required deposits come from baltimore. mean? Now, what does that That means in effec t that one fifth of all the •• • SKE33 • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis businos this bait): does, and one fifth of all the business that it is going to do :nut come in and out via Taltir)ore.. You cannot get away from that. year comes when the hen the season of the onth is laying its debt to Baltimore, and when rur-,-ans funds beEin to accu,Rulate in Baltimore, we will send 114, the proper proportion of them to 2.ichmond, and then the season comes around a6ain for the greatest strain, and everybody wa 'ts to get these reserve funds at Richnadd, one fifth of must come out via 71 alti#ore, ) because 'Y.iltimore not only contriLutes a fifth of the resources, but it is a fact that Baltimore, if the facts could be known, will have credited more than one fifth of the paper eligible for discount in this district. Now, a merchant in North Carolina or .;outh Carolina who had me chandise to ship to Richnond would be a very foolish indeed if he sent it up to Baltimore, with instructions to turn it around and send it back. to Richmond, yet, gentlemen, that is exactly what we do with the money in this district if you permit the reserve city to stay in Richmond, because at every season of the year when the flow of money comes that way, we would have it flowing in to BaltimDre and back to aichmond, making a round trip, whereas if you allowed it to come to Baltimore, Ellowe0 these thin, to be clez..roci in 3altimore, allowed these SYE34 http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis resources to be Idled u be 70/7 - in 3altimore, the situation would much simplified. , These fact are not new. 4 is anything 1 ircovered by us. I am not claiming that that It is something that has already been recognized and been reconized by the Government of te United 3tates. If we eo ba& to 1864, which I believe was when the national banking act was passed, reserve cities were created, I think 19 oi theLl, by the reL;ional act. was not. L '3altimore was ,,ne of those cities; Richmond orponents seem to think that gave lialtiore a somewhat artificial advantage over Richmond, but that is not the case, because a later act provided that any city with, T think, very little l'opulatioi: or banking capital, could, if its bankers saw fit, ask to be made a rescrve city and could bo made such. here is the most startTing thing in this proposition, that until this new law was passed Cr:atinz this new banking rystew, the '?.ichm(ind bankers never considered apiarently that Richmond was a proper place to be a reserve city. in and asked for such a thing. city, They never came 3altimore was a reserve ashinEton in this District was a reserve city, Charleston, south Carolina, was a reserve city. They were the natural reserve cities, and Richmond had not even SICE35 asked for it. 41011 Now, 411 opponents cite a great number of arguments and reasons which they contend make in favor of Richmond. Let Its look briefly at one or two of them. It is said in the first place that Richmond lends more money in the south, as it is put in the report of the Organization Committee, and also in the brief. • They : claim that Richmond lends :33,0.)0,000 in the south, and . Baltimore only :6,000,000. Those figures might look very important, but whit are those figures? them a moment. Let -m‘ analyze hilt do the,r mean by the south' Why, when you come to read through the report, you find that what they mean by the -outh, the thirteen southern States, includes Virginia but does not include ::aryland. So that when you say Richmond lends ,33,0 i"),000 in the south, it simply means that Richmond is lending most of that right in Richmond; it simply means that Richmond is lending more in Richmond than T;altimore is lending in Richmond. 411 http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis But if you want to make a fair comparison, a real comparison, and tabulate figures and see in is district what banks ace lending the most money in the district, or in the south, including 7:aryland, what banks are lending the most money, there is not the slightest Joubt in the world that these figures will be entirely reversed. S1E36 Now, further than that, another point that is made by our opponents is the point that they are nearer the geographical center of the district. Just a word on that. What has the geographical center of a district to do with a question like this? If we were oint for a water iiower oing to est blish the lant, the geographical center might have cerain advantages, but we are establishing a center here for the banking business. fore, where the banking business is. You must go, thereIf you XX= were establishing a bank in ITew York City, and the directors of • the new bank in rew York City should propose to put it out in Central Park because it is nearer the geographical center of the city than Wall Ctreet, would not they simply make themselves a laughing stock in the eyes of everybody? Has the comlittee paid any attention to the geographical centers in any of these districts, will: one or two possible e::ceptionsi They have n t. District, ITew York City • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis district. is If you tak6 the ilow York in the southeastern end of that If you wanted the geographical center, you ,o would have to t-_ up State somewhere about Utica. If you take the Northern District and want to find the geographical of that, I believe it is somewhere in the nite ,Mountains. If you went ouY to the San 7rancisco District, and tried to find the geographical center of that, perhaps SKEW • you might hit Reno inFltead of San .'rancisco. So, you could co all throui:h these districts and rhow that the ceogra ical center has nothing to do with it. ':!e are not here like a lot of school boys trying to solve a proilletq in reometry. The lines of bankIns and the course of trade lay no attention to geographical centers; they pay no attention to centers of possible districts that may be • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis constructed. On the contrary, we find that when we look over our c-ountry, that the great cities and the great banking centers are of one of two claF.ses in the middle west. The, are the reat railroad centers, particularly the great railroad transfer ,ioints. :!ost noticeable, of course, are Chicago and 3t. Louis, and hon we get away from the midOle west and come nearer the Jacific Coast, we find that these great centers are invariably the ,,reat seaports of the country. In Chicao and St. Louis the railroads link together the eastern and the western lines, and on the coast the other termini of these railroad lines link themselves with the ocean liners, and those sea orts, therefore, are kept constantly busy because. they have not only their own business, but they have the handling and re-handling of the business of the other sections of the countrj, someth;,1g that is coi g on all the year round. Now, our opononts ay particularly uhat this Corn- eb • 138 an mittee, whose report is now -1_ for review, lays a very great stress upon what they call the per capita argument. That argument is thin. They say: "True, Baltimore is a larger city; true, Baltimore has more banking capital", and it is not shown by them how great the disparity is but they say An must look not only at that, but you. MUSt look at the per capita, and then it is figured out that the per capita banking capital in Richmond is considerably O greater thar it is in Baltimore. At first blush that mirht seem to have some force; it might seem to indicate • that perchance the people of Richmond had some particular aptitude for the ban _ing business that leads them to put their monej into it in greater proportion than other people do. What do you mean by bankin: pei capita? That moans, of course, the banking resources, divided by the number of people. that. There are two factors there wicn will vary A large banking ca ital, or a large 'milling poliula- ti:)n tends to Increase the per capita, but a small popu- • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis lation equally tends to increase the per capita. We show in the brief how this argument for Richmond is reduced to an absurdity when we compare other cities with it and show you that the per capita in Richmond is larger than the per capita in .'.hiladelphia, Chicago and New York. '11-t; it becomes even more striking to my mind when we •• • SKE39 compare it to rome of the small cities. Now, the Organiza- tion Committee laid almost co:Itrellin- stress on the fact that Richmond had u capital and surplus and banking capital of 373 per capita, higher than ilew York, Philadelphia and Cleveland, diow, let us look at a few small towns. T do not know whether you are familiar with this place, but we have a little town called Ellicott City a few miles outside of Baltimore, not noted as a banking center, but very remarkable for its banking capital. that while l'AcLmond has The population will sho_ ;173 per capita, Ellicott with something, like a thousand population, has a per capita of .D.30, almost twice as much as Richmond. If we take the mining town of Oakland in western :aryland, we find that it has a per car,ita of 487; we find that Rockville, not very far from here,has a per capita of .a.200; Centerville, on the western shore of I7aryland, has a per c,)pita 7 of ,,255, as against lllchmondis 73. So that when we see these figures, the result evidently is that your large • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 1:er capita arc,ument rimply proves that you are a small city, and it is evidently all that it does prove. How, then, the next point made is on the growth of banking capital, and there my opponents take great delight SKE40 http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis first of all in citing a report of a Maryland coralission that was ap: ointed to study and revise all the taxing laws of the State of 2aryland, and they apparently seem to think that thor have inade a great point by quoting this, because I happened to be one of the. members of that commission, and they read a lon extract in which we showed, v,hich was undoubtedly the fact, that the taxing laws of Maryland, which imposed a very high rate of taxation on the national banks, had tended to retard the development of natiGnal banking capital in Maryland. 1-1 this. 'hit the point My opponents on the ot.er side, not living in Maryland, and not knowing exactly what we are doing out there, apear to be peacefully ignorant of the fact that partly as a r - sult of that report, in which I had some little hand, the last iftIslature of the State of Maryland , (VAw' repealed this burdensome, of taxation of our national entirely new system, an banks, and they have efltablished the ban,.s, very similar an entirely new method of taxing per cent tax. to the New York system, the one So that relieved of this heavy with banking ca •ital in Maryland forward with a reasonable burden, we have the right to look pment of Maryland banking expectation to the rapid develo from that, and further , ca. )ital in the future. But aside of Richmond in its than that, what does this growth • S SKE41 banking capital in the part ten years show? Why it shows that Richmond is growing; that is all. It does not show it has gotten anywhere near Baltimore as yet. We have to deal with the present, not with the past or with the . future. What is the proper reserve city today? If Rich- mond ever does grow to proportions where it is near to Baltimore or superior to Baltimore, if that comes within the lifetime of any man in this room, why this Board, or • some other board, can then change it, and take the reserve city back from Baltimore to Richmond. But the fact that Richmond has grown faster in the past ten years than Baltimore simply means this, that a growing city, a develo:7,ing city •- Richmond is that, as my brother has said, and is notv fully reviving from the disastrous effects of the Civil War - what you might call a young and developing city naturally grows faster than a city that has already fully leveloped. That is simply for the same reason that a young child grows faster than a man. • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis That does not ',rove any superiority of the child over the man. Richmond is just beginning to revive from the calamity that it suffered many years ago, and we are all glad to see it is reviving so rapidly. We know Richmond has made progress, and we think that we in Baltimore have had some hand in it. How many RIchmond securities have been sold in Bal- •f• S1342 • timore? Why it was only yesterday as I was leaving my of:rice that a salesman cane in wanting to sell me some Virginia securities, and that is what we have all the time. As Edmunds tells you, and it was a minimum estimate, the amount of Baltimore capital invested in the southern 6tates below the Totomac is :200,0n0,000. Another point much discussed IP the poll of the banks. el , there are two lolls of the ban s. mond poll. One is the Rich- I have never been able to understand that. I have looked at it and tried to fic -are it out from their • brief, and I got this far, that according to the Richmond poll Baltimore rot nine votes in the whole district. we have sixteen banks in PAaltimore. ::ow, I was immediately satisfied from that. I did not ;:o into it any farther. The poll taken by the comlittee shows 167 banks voting for Richmond, and 128 IntIng for -3altimore. two coments I want to make on that. There are In the first place, at the time that the poll was taken, the southern banks • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis did not know, nobody knew, just what the boundaries of the districts would be, and if you read te proceedings, you will evidently find that the southern banks had a choice between Ltlanta on the one hand and Richmond on the other, and the majority of them, the great majority of them, said that they wanted to be connected up with Rich- 2KE43 http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis mond, because the course of business in this district was from the south to the north, not from the north to the south. As one :orth Carolina ban:_er said: "If you con- nect us wit you connect us with a dead end." According to our opionents, that is all right, to connect Baltimore with a dead end. In fact, the whole situation here, from their point of view, as to this district, seems to be that they started out with a little district they mapped out for themselves south of the Potomac. They wanted to be at the north end, bPcause they thought the city at the north end would have the advantage, and they mapped out the Virginias and the Carolinas, and presmabl y they took in some more southern cities with it. Then when it began to be apparent that :tlanta was making strong claims, and that Georgia would naturally co with Atlanta, the then Vircinia and Carolina district had to look around I for something else to make it ±a a full grown distr ict. They figure it out in one of their speeches or brief s somewhere here, which contains the expression that Phila delphia, heing l\*ITa district made lip of Pennsylvan ia, Dir:land was left as a sort of floater, and they did not know just where to put that, so my friends from 2ichmond then come forward in a sort of supplementary brief or letter and show that raryland, beinc left in this piLifal con- • 410 11 3KE44 • dition of a floater, that they will kinc11:7 o ; en the doors and lot us in to their district. attitucle. They will lot us in. That is their whole Thee) look to us for thett resources, one dollar out of every five they got from us, yeL we canot have this brink because we are too near Philadelphia, and I understand Yr. Hunton to say, what is a surpri;e to me, that '1;alti 'pre was an extreme northern city. I have lived there all my life, and I can sa,) that-- Mr. EUETO:i: I did not say that, at least I did not intend to say anything of the sort. Mr. COOT:: If you did not say it, that is the end of it, but I understood you to say that if the fora banks were iiven to Boston, _hiladelphia, iew York and Baltimore, you would have four ii the extreme northern part of the country. Ye have boon taught to believe that Baltimore is 9ort of on the boundary line, FO to speak, and in con- sequence mainly and largely has been a southern city, and we feel it is the gate to both the southern and northern • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis E:tates, we feel it is the gateway between the north and the south, and as that gateway it is entitled to recognition by reason of the securities it ho az', by reason of the business that it does. Now, look at thiP just another way. Suppose you gentlemen were the real owners of this hank for the fifth SILL 45 • district, and sup)ose you wanted to put it in the place where it would be a success and make money for yourselves as stockholders or for other stockholders, can an; man within the sound of my voice have a shadow of a doubt that you would place this bank in Baltimore where you could get hold of some business, rather than in Richmond where you would not have anything like the chance? Look at the things which Baltimore business men look at. Look at our foreign trade. Look at the grain we are exI orting right now to the 'warring nations in FAirope, and the bank acceptances, , foreign bankers' acceptances that are sold in 141w York. Richmond in her brief says they can still be sold in Pew York, and Baltinore is not going to suffer. That is not what we are here for. are not making an argument for the benefit of Baltimore. It is true that our pride is somewhat hurt that we are passed over, the seventh city, as we claim the sixth city, in the Union passed over for the thirty-ninth city, and I • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis appeal to you, not for the good of lIaltimoro, but for the ?pod of this fifth reserve district, to put this bank .here it belongs, and put it where it can get business. Do,not sit, down and say, Fts my friends do: Let hew York gobble up that foreign acceptance business as it always has." We say: "no, send this bank over to 3altimore where • an46 it can make a fijit for it, and where it can get it. And I say to you that we are not here asking for this bank for 3altimore i s benefit. Perhaps it may benefit the banks of - vltimore in some respects, in drawing (.ome local business, but we want this bank to be a success, and we believe it is goi/v to be a success. oelieve you can make a Federal reLional bank work any- • • .here, even if you put it in the back woods, but we want to make it work well and against the least resistance. Water can run down hill but you can force it uf, hill if Pumps, j y)u construct an artificial system of t eserveirs and pipes. I say you can make a regional bank work anywhere, but if you want to make it work to the best advantage and with the least friction, you iust make it work according to the laws of nature, according to the laws of bosiness and the con e of trade; you Laust put it, and I appeal to you gen- tlemen to put it not in an artificial reservoir where you. ' have got •to be pumping all the time at- ,:ainrt resistance to • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Eet this mono,/ to 2ichmond, but put it in the natural reservoir where it belongs, and which we insist is 3altimore. The CHAIITTAII; ',E3 want to exc)ress our appreciation of the great ability shown by both sides in presenting SKE47 http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis this case. We will take it under advisement and later advise - Tou of the decicion. (heroupon, the hearing was adjourned). — a over " , 4 lie 1' % cilk \ofitme ef SiterieTal _ Y..ets rYso , RUC.'LNPlt-fe R4 BEFORE THE FEDERAL RESERVE BOARD. IN THE MATTER OF THE DESIGNATION OF THE FEDERAL RESERVE BANK IN DISTRICT No. 5. • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis REPLY BRIEF ON BEHALF OF THE RICHMOND MEMBER BANKS OF FEDERAL RESERVE BANK OF DISTRICT No. 5. EPPA HUNTON, JR. AND LEGH R. PAGE, Counsel of Respondents. IVER/IITT WADDRII CO. RICHMOND. RA. 1950 http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • BEFORE THE FEDERAL RESERVE BOARD. IN THE MATTER OF THE DESIGNATION OF THE FEDERAL RESERVE BANK IN DISTRICT No. 5. REPLY BRIEF ON BEHALF OF THE RICHMOND MEMBER BANKS OF FEDERAL RESERVE BANK OF DISTRICT No. 5. • —7- http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Before replying to the Brief filed by the petitioners in behalf of the City of Baltimore, we respectfully direct the attention of this honorable body to the fact that the Brief in behalf of Baltimore is in disregard of Regulation No. 1 of the Federal Reserve Board in the matter of procedure in appeals from the Reserve Bank Organization Committee; first, it is filed "on behalf of the citizens of Baltimore," whereas, Regulation No. 1 makes the majority of member banks located in the city requesting a review the petitioners; and, second, the Brief is filled with matter wholly new and not contained in the record before the Organization Committee, whereas the said Regulation No. 1 provides that "The Board will not hear testimony, but the parties will be limited to the record before the Organization Committee." The Brief for Baltimore is in point of fact a presentation of her claims on entirely different grounds from those originally relied upon. While we do not make objection to consideration by this honorable body of any new matter which Baltimore may desire to present in the attempt to strengthen her case, it is manifestly impracticable to reply fully within the time allotted to us, even if permitted, to any new contentions, statements or statistics which require on our part research, verification and the preparation of counter statistics. We respectfully submit, however, that we decline to be parties to such violation of the rules of procedure laid down by this Board and feel that it is expected of us that we reply to those parts of the Brief only which refer to matters in the record before the Organiza- http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 2 tion Committee. We submit to the Board what consideration it will give to those parts of the Brief not in the record and will ourselves cite certain instances only to show how unreliable are the statistics contained therein. In the statement of the RESERVE BANK ORGANIZATION COMMITTEE relative to its decision determining the Federal Reserve Districts and the location of the Federal Reserve Banks under the Federal Reserve Act, the Committee gave its reasons at some length for designating Richmond instead of Baltimore as the Federal Reserve City for District No. 5. The Committee's reasons given in said statement are alternately attacked in the Brief filed on behalf of the citizens of Baltimore as based upon a misconception of the purposes of the act, or as inconsistent with the grounds upon which the selection of other Reserve Cities was made, and finally inference is made unmistakably that the Committee was actuated in designating Richmond by motives other than those disclosed in its statement. While we shall undertake to amplify the several positions taken by the Committee in its designation of Richmond as a Federal Reserve City of District No. 5, by giving additional facts in the record, we deem it unnecessary to defend the Organization Committee from the criticisms made against it. As a preface to our reply, we respectfully call attention to the fact that the Organization Committee named by Congress to perform the difficult task of designating "not less than eight nor more than twelve cities to be known as Federal Reserve Cities * and shall divide Continental United States, excluding Alaska, into districts, etc., etc.," was made to consist of the Secretary of the Treasury, Secretary of Agriculture, and the Comptroller of the Currency; that Congress entrusted this work to this Committee knowing at least the incumbents of two of such offices, and that the determination of this Committee was reached after "Every reasonable opportunity had been afforded applicant cities to furnish evidence to support their claims for Federal Reserve Banks; and that the majority of the Organization Committee, including its Chairman and the Secretary of Agriculture, were present at all hearings, and stenographic reports of the proceedings were made for their deliberate consideration. Independent investigations were, in addition, made through the Treasury Department, and the prefer- • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 3 ence of each bank as to the location of the Federal Reserve Bank with which it desired to be.connected was ascertained by independent card ballot addressed to each of the 7,441 national banks throughout the country which had formally assented to the provisions of the Federal Reserve Act;" and, "Following its policy declared at the very outset, the Committee refused to be influenced by the purely local and selfish claims of cities or individuals, and discharged the duty imposed upon it by Congress after exhaustive investigation and study of the entire country, with unbiased minds and according to its best judgment." Extracts from Statement of Federal Reserve Board, pages 361 and 365 of the record. It is a rule of law, generally followed in both State and Federal practice, that great weight should be given to the conclusions of trial courts and masters who have the opportunity of hearing the witnesses testify, observing their capacity and acquainting themselves with circumstances and surroundings not open to appellate courts, and that such conclusions should not be set aside or modified except in cases of palpable error and mistake. For which reasons, and because of the character and qualifications of the members of the Organization Committee to perform the task in question, we confidently submit that their decision should be affirmed unless plainly wrong. The contentions of Baltimore, as set forth in the Brief, are divided under four principal heads, with an infinite number of subdivisions. Baltimore has had several months to prepare this Brief. The time, seven days, allowed the member banks of Richmond, within which to prepare a brief in reply is too limited to admit of answer in detail to the many theories and contentions advanced by Baltimore. Reference to the synopsis of these contentions, which appears at length in both the petition and the Brief of Baltimore, shows that they are all variations of the same general idea. It will be seen by inspection of this synopsis that it is impracticable to reply to these contentions seriatim with any continuity of argument. They are too closely inter-related, going back and forth from one beading to another, expressing but one central idea in different forms, all growing out of the size of Baltimore. In reply, we shall, therefore, treat them as a whole. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 4 At the outset, Baltimore takes exception to the fact that the Committee did not first designate the Reserve cities and then proceed to arrange the districts. This position seems to be taken by Baltimore because the designation of Reserve Cities is mentioned first in the act and upon the assumption that Baltimore would have, under such a course of procedure, stood a better chance of being selected. In taking this position, Baltimore arrays herself against what must be admitted as the controlling purpose of the act, viz: that the traditions, habits and common understandings of the people, as well as the character and growth of industry and the banking connections of the different sections of the country, to be divided into sections, required the most careful consideration. It is perfectly evident that the division of the country into districts was far more important and complex than the designation of Reserve Cities. The fact that certain large cities might be clearly marked out in advance as proper locations for Reserve Banks in nowise modifies this. It is one of the admitted purposes of the act, a purpose admitted in debate, to bring about financial local self-government as far as may be consistent with stability and the general safety, to restore to normal conditions financial movements and relations which have been artificially built up by the old National Bank System. To illustrate Baltimore's conception of the purposes of the act, we quote from its Brief, on page 70, as follows: "The principal purpose of Congress, however,in devising the addition to an existing system was evidently not so much to improve conditions at ordinary times, as to provide a more satisfactory system in times of stress." In the Brief of Baltimore, paramount importance is given to the size of her population and the magnitude of her resources, without taking into account the unfamiliarity of her people and her failure to employ her resources with the balance of the district. Incontestably, Baltimore is the largest city in population in the district, and her banking resources greatly exceed those of any other city, but it does not, therefore, follow, as Baltimore assumes, that she is the natural commercial, industrial and banking center of the fifth 5 district; that all business in the fifth district naturally converges at Baltimore; and that in every essential respect, in commerce, finance and industry, she is about five times as important as Richmond to the Fifth District. Upon this point, and upon the question of due regard to the customary course of business in the fifth district, the testimony establishes Richmond's superior importance to the district. S http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis The determination of the location of the Reserve City of any district we deem to be primarily a banking problem. This is not admitted in terms in Baltimore's Brief, but her argument is directed chiefly toward this point of view as is indicated by the Synopsis of Parts 1, 2 and 3, which, as stated, is reviewed by us as a whole, having regard only for those facts and principles set forth in, or germane to, the record. The Organization Committee states, on page 368 of the record, that "it should be borne in mind that the Committee could consider primarily only the statistics with reference to assenting banks. In this section of the country, as in most others, the assenting banks were the national banks." Baltimore, page 79 of Brief, also takes exception to this position, and complains that in determining the Reserve Cities all banking power outside of the national banks was ignored by the Committee, and advances the theory that "the new system is, on the contrary, intended to constitute but the governing or regulating part of a comprehensive system embracing all banks." It is new doctrine that the "system" will seek to regulate anything outside of itself. Baltimore furnishes no proof whatever, and there is none, that the Organization Committee in making its decision ignored all banking power outside of national banks, and due consideration of that portion of bank resources of the district, outside of the national banks, entitled to most consideration, namely, State banks, would inevitably lead to a decision in favor of Richmond. In considering the power, operation and development of the system as a whole, it was natural, lOgidal and essential to consider ririmarily the present COMponent parts, and, sedond, the banks likely to come in it. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 6 On page 21 of the Baltimore Brief, the division of her banking power is given as follows: Resources. National banks $114,973,000 State banks, trust companies and stock savings banks 80,183,000 Mutual savings banks 102,708,000 Total $297,864,000 In the Comptroller's annual reports the resources of the trust companies of Maryland are given as $74,000,000, statistics for Baltimore not being separately given. It may be reasonably and safely assumed that the trust company resources of Maryland are centered in Baltimore, there being only three other cities in Maryland of more than 10,000 inhabitants. It is certainly fair to Baltimore to assign $70,000,000 or more to the trust company resources of Baltimore. The limited time at our command does not enable us to ascertain the exact figures. The combined resources of mutual savings banks and trust companies are, therefore, approximately $172,000,000, or 58 per cent. of the local banking resources. Trust companies have a field of their own and it is hardly within the limits of probability that many, if any, of them, considering the regulations imposed upon commercial banks, will enter the system as trust companies. Mutual savings banks would not, of course, in the nature of their business, become members. In considering Baltimore's banking resources with reference to the Federal Reserve System, therefore, only the national banks primarily, and the few State banks, secondarily, could reasonably be taken into account, and, with these facts in mind, it is clear that the commercial banking resources of Baltimore, particularly in relation to the fifth district, are not of the potentiality which is claimed. As a further fact illustrating the usefulness of this great portion of Baltimore's financial resources to the banking interests of the rest of the fifth district, we call attention to the itemized statement of resources on page 19 of the Brief, showing $128,000,000, or 43 per cent. of the whole in "investments, bonds, securities, etc." 7 Therefore, since, in fact and theory, the location of the Reserve Bank is, in its essence, primarily a banking problem, we shall proceed to analyze the banking conditions and resources of the fifth district and present evidence to show which city is in a position to perform and is performing the greatest service to the district, with the maximum of economy, and further showing that within a few years there have grown up relations between Richmond and the larger portion of the territory, so intimate and wide-spread, that the decision of the Organization Committee, after defining the area of District No. 5, could not have been otherwise than it was without violating the economics, as well as the physical and financial facts of the situation, and the convenience and desires of those most intimately affected, as appears in the statement of the Organization Committee. ( http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Baltimore contends, pages 89 and 90 of Brief, that the Organization Committee had absolutely nothing to do with the increase in the growth of Richmond, and particularly with the ratio of increase. This opinion is expressed in this language: "The Committee, however, properly had absolutely nothing to do with increases as such." "The Committee has to do with the present, not with the past, or with dreams of the future." While it is proposed to refute the contentions of Baltimore with the presentation of facts which relate to the present, this view is so unsound that it cannot go unnoticed and unchallenged. In considering the operation of the system, it is futile to contend that there must not be taken into consideration the vitality and growth of certain component parts, and of outside interests most likely to become component parts, when such parts have been progressing at a rate which, if continued for a reasonable time, will completely overlap Baltimore and Maryland. There is no other factor so strongly indicative of the trend of trade. Analysis of the Banking Situation in the Fifth District. In the fifth district there are, approximately: 484 National banks 1,122 State banks Total number of banks 1,606 http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 8 Distributed as follows: National Banks State Banks Total Maryland 103 65 168 District of Columbia 12 24 36 West Virginia 162 117 279 Virginia 132 228 360 North Carolina 72 353 425 South Carolina 48 290 338 484 1,122 1,606 For convenience, and because of limited time to determine accurately, this includes the whole State of West Virginia, although a very small part of that State is not in this district. Of the number of banks, both State and national, there are in the three States, Virginia, North and South Carolina, 1,123, against the number in the rest of the territory, 483. It is, perhaps, more than fair to Baltimore to assume that onethird or ninety-three of the West Virginia banks are in what may be claimed as Richmond's territory. As a matter of fact, out of 144 banks voting in a poll taken by Richmond, seventy-five voted for Richmond first and second choice, Baltimore not being the first choice of but four of them. See Richmond Brief, page 46. Therefore, it is obviously fair, and will answer every purpose of the comparison, to say that in the territory which Richmond can serve more quickly, coveniently, efficiently, and with greater satisfaction to those served, there are 1,216 banks, as against "Baltimore territory" 390 banks. See Richmond's Brief, page 46, and evidence hereafter adduced. The ratio of 5 to 1 which Baltimore continually proclaims against Richmond is nearly reversed here. With due consideration to not only "dreams of the future," but to reasonable probability of future development, it is not illogical to suggest that self-interest will in the near future incline Washington to that field which offers the best prospect of profit in the use of her resources, which field certainly lies south of her and with which field she is not at present familiar. It is fair to treat Washington as neutral territory, but it will not materially affect either the figures or the purposes of the comparison 9 here given, to allow Baltimore's claims to Washington's resources, although said claims are not supported by a single line of evidence. In comparison with the ratio of growth of her own State as well as with that of the city of Richmond and every State in District No. 5, the national bank resources of Baltimore show a retarded growth, the causes of which may well give her anxiety. The fitness and the preparedness of Baltimore to become the Reserve city of District No. 5 is the vital point of issue raised by that city. If Baltimore desires this tribunal to know the volume and growth of Baltimore banking capital and other matters pertaining thereto as the same are known to Baltimore herself, we especially refer this honorable board to the report of the Commission for the Revision of the Taxation System of the State of Maryland and City of Baltimore, pages 287 and 288, from which the following is taken: "The Banking Conditions in Maryland. / 7 http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis "Ten years ago the total capital in Maryland of national banks was $17,050,000; in 1912 it was $17,607,000. This was an increase of only $557,000, or 3 per cent., which compares most unfavorably with other States. "Baltimore city has over two-thirds of the banking capital of the State. "The following shows the changes that have taken place in the amounts of capital, surplus and undivided profits in ten years in Baltimore: 1903 1912 Capital $12,403,260 $11,790,710 Surplus 6,514,400 7,970,010 Undivided profits 1,532,060 2,082,787 "Compared with the increases of banking capital that have occurred in other States, the Maryland increase is far from satisfactory. "Innumerable requests have been made by the commercial interests in Baltimore for increased credits and for a development of banking facilities. Any person interested can receive sufficient assurances that the business interests have not sufficient banking funds to successfully carry on their business. This complaint is not exceptional, but http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 10 general, and nearly all classes of business men who are large borrowers must have either Philadelphia or New York financial connections." The geographical relation of Baltimore to the banking resources of the district is elaborately treated in the Appendix to the Baltimore Brief. The following statement will show in illuminating comparison the real position which Richmond occupies to the banking resources now in the system, and to those banks which may with reason be counted upon as most likely to come into the system. The relative geographical positions of Baltimore and Richmond on the map will be readily carried in mind in examining these statements. COMBINED STATEMENT OF NATIONAL AND STATE BANKS. (As classified in the Comptroller's Reports.) IN THE FIFTH DISTRICT, SHOWING COMPARATIVE RESOURCES IN 1902 AND 1913. • This statement is made to show the concentration of resources of those banks in the fifth district which now enter into and are likely to become a part of the Federal Reserve System. Statistics of "State Banks" in the District of Columbia are not accessible. Aggregate Resources. 1913 1902 Increase Per Cent. Virginia (including Richmond) $ 94,728,000 $218,211,000 $123,483,000 130 North Carolina . 33,322,000 117,316,000 83,994,000 252 28,138,000 South Carolina 95,185,000 67,047,000 238 $156,188,000 $430,712,000 $274,524,000 176 $ 73,454,000 $153,766,000 $ 80,312,000 109 Maryland (including Baltimore).. $123,613,000 $199,525,000 $ 75,912,000 61 West Virginia . Resources of national and State banks in Virginia, North Carolina and South Carolina as above $430,712,000 Add banks of West Virginia which voted for Richmond as the location of Reserve Bank (see record) 43,392,000 http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 11 Total resources of national and State banks in the fifth district of which Richmond is the natural and most 474,104,000 convenient Reserve City All other banks in West Virginia (including that portion 110,374,000 not in the District, about one-eighth) 199,525,000 Maryland (including Baltimore) Washington and the District of Columbia being counted as neutral territory. When it is called to mind that within the area of resources designated as Richmond territory there are, as hereinbefore stated: 1,216 National and State banks in number 390 And in Baltimore territory only it is plain to see where, in the present operation of the system and in its future development, violation would be done to the convenience and customary course of business which are required to be regarded by the act, if the Reserve Bank were located in Baltimore. When to the foregoing are added the further facts that, even not including that portion of West Virginia in which relations with Richmond are more close and convenient than with Baltimore, there are in the three States—Virginia, North Carolina and South Carolina 5,920,000 inhabitants in an area comprising 119,000 square miles, against 2,950,000 inhabitants in the rest of the district in an area covering only 30,000 square miles, it is easily seen that without indulging in "dreams of the future," the inevitable development in the Richmond territory, possessing in overwhelming proportions all the factors essential to any development—population, area, natural and financial resources, number of banking institutions, all the factors which enter into the transactions of mankind—it is easily seen how greatly Richmond is superior to Baltimore as the location of the Reserve Bank. The following statements show the growth of banking resources of Baltimore and the State of Maryland, as compared to the other principal cities and States in District No. 5: We do not think the figures need any comment, but will merely direct the attention of your honorable body to Baltimore and Maryland and Richmond and Virginia. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 12 STATEMENT OF NATIONAL BANKS OF THE COUNTRY FROM THE COMPTROLLER'S REPORTS. SHOWING RATIO OF GROWTH IN COMPARISON WITH BANKS IN THE FIFTH DISTRICT, IN 1902 AND 1913. Aggregate Resources. NATIONAL BANKS IN THE WHOLE COUNTRY. 1913 1902 Increase Per Cent. $6,114,000,000 $11,037,000,000 $4,923,000,000 80 NATIONAL BANKS IN THE FIFTH DISTRICT. 1913 1902 Increase Per Cent. Maryland $30,575,000 $ 56,989,000 $26,414,000 86 82,019,000 110,896,000 28,877,000 Baltimore 35 Washington 27,661,000 58,191,000 30,530,000 114 District of Columbia 1,975,000 2,140,000 165,000 8.5 West Virginia (all) 33,751,000 88,611,000 54,860,000 162 Virginia 38,220,000 100,295,000 62,075,000 162 Richmond 16,730,000 56,576,000 39,846,000 238 Nofth Carolina 18,865,000 62,459,000 43,594,000 231 42,082,000 28,358,000 207 South Carolina 13,724,000 Capital, Surplus and Undivided Profits. NATIONAL BANKS IN THE WHOLE COUNTRY. 1913 1902 Increase Per Cent. $1,201,000,000 $2,046,000,000 $845,000,000 70 NATIONAL BANKS IN THE FIFTH DISTRICT. 1902 1913 Increase Per Cent. Maryland $ 7,474,000 $10,277,000 $ 2,803,000 38 Baltimore 20,415,000 21,901,000 1,486,000 7.3 Washington 5,111,000 11,855,000 6,744,000 132 District of Columbia 679,000 577,000 102,000 18 West Virginia (all) 17,908,000 11,116,000 163 6,792,000 Virginia 8,238,000 22,396,000 14,158,000 172 Richmond 3,725,000 10,365,000 6,640,000 178 North Carolina 5,021,000 12,988,000 7,967,000 158 South Carolina 3,436,000 9,883,000 6,447,000 188 • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 13 COMBINED STATEMENT OF NATIONAL BANKS AND STATE BANKS OF THE COUNTRY, AS CLASSIFIED IN THE COMPTROLLER'S REPORT, SHOWING RATIO OF GROWTH IN COMPARISON WITH BANKS OF THE 5TH DISTRICT FROM 1902 TO 1913. Aggregate Resources. NATIONAL AND STATE BANKS OF THE WHOLE COUNTRY. 1913 1902 Increase Per cent. $8,423,000,000 $15,180,000,000 $6,757,000,000 80 NATIONAL AND STATE BANKS OF THE FIFTH DISTRICT. Maryland (including Baltimore). $123,613,000 $199,525,000 $ 75,912,000 61 West Virginia (all) 73,454,000 153,766,000 80,312,000 109 Virginia, (including Richmond). 94,728,000 218,211,000 123,483,000 130 North Carolina .. 33,322,000 117,316,000 83,994,000 252 South Carolina .. 28,138,000 95,185,000 67,047,000 238 With respect to the wishes of the banks of the district as to the location of the Reserve City, Baltimore is satisfied neither that the decision be left to the banks nor to the Organization Committee. On page 83 of the Baltimore Brief the following appears: "With respect to the division of the country into districts and the designation of Federal Reserve Cities, the act leaves nothing whatever to the decision or vote of the member banks. On the contrary, it leaves the matter to be determined by the Committee and the Federal Reserve Board, with due regard to the customary course of business and without regard to State lines." and on page 87, the following appears: "The 'one bank one vote' method, which Congress refrained from applying to the designation of Federal Reserve Cities, but which the Committee professes so to have applied in the fifth district, not only subordinates the interests of the country as a whole to local interests, but also subordinates to the wishes of the bankers in the district (i. e., the national bank officers and directors) the wishes of the owners of the banks (i. e., the stockholders) and the customers, (i. e., the general commercial, industrial and agricultural public which deals with the banks). http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 14 The Committee itself, however, has not really been governed to any substantial extent by the votes of the member banks either in dividing the districts or in designating the reserve cities." In presenting the claims of Baltimore before the Organization Committee at the hearing at Washington, Mr. Waldo Newcomber took a different view of the value of the opinions of the banks in the district concerned, as did Mr. Ingle who followed him on the stand. Great importance was then attached to the views of bankers and merchants in the argument made before the Organization Committee, and ten and one-half of the fifteen pages of the Brief, afterwards printed in the record, is taken up with extracts from letters from merchants and bankers from Virginia, North and South Carolina, Georgia, Alabama, West Virginia, and points as far west as Ohio, Illinois, Missouri, and northwest to Minnesota. Mr. Newcomber testified: "We have had a large number of letters sent to us, and within as brief a time as a week ago today we sent out letters asking the different banks and merchants in the South whether they cared to express a preference for Baltimore. We have with us, actually filed with our Secretary, some ten hundred and fifty letters which are entirely irrespective of a very large number received from various banks which have not been sent to the Secretary of the Association, and which I personally know amount to four or five hundred more, and they are coming in at the rate of one hundred tand one hundred and fifty a day. I just want to mention the fact, which I think is interesting, that of the ten hundred and fifty-two letters filed with the Secretary of the Association, seven hundred and fifty-two express a decided preference for Baltimore as their first choice, and two hundred and eighty-two state that they have committeed themselves to some town in their locality, presumably for patriotic reasons, and if they cannot get it there they would like to see it in Baltimore." Mr. Ingle, following Mr. Newcomber on the stand, went at great length into the preference that had been expressed by various communities from Florida on the south to Maryland on the north for Baltimore as a Federal Reserve Bank. As long as Baltimore thought the bankers and merchants preferred her, it was a convincing reason why she should be named, but when the duly authorized agents of the banks and banking associations of http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 15 these States spoke, and after the poll had been taken by the Federal Reserve Board, the preference of bankers is no longer worth considering, and their choice, which Baltimore had striven unsuccessfully to gain, is belittled, and declared to be of a "sentimental character, and evoked by campaigning methods." Baltimore contends that she is nearer, in point of time, to the greatest volume of national bank resources in the fifth district, and gives the result of computations to prove this in Appendix B, Page 121 of the Brief. We have been unable in the time at our disposal to test the accuracy of these tabulations except in one or two instances, which do not agree with the information at our command. The principle upon which the final result is computed we believe to be wholly fallacious. In considering which of two places is nearer to the centre of resources of a district with the purpose of determining which is more conveniently located with reference to the rest of the district, it would appear that the resources of each city itself, in turn, should be excluded from the computation. In other words, the issue would properly seem to be whether Baltimore is nearer to the centre of resources of the rest of the territory including Richmond, or whether Richmond is more accessible to the rest of the territory, including Baltimore. The Brief for Baltimore, however, takes into account Baltimore's proximity to her own resources, which are placed at zero in point of time, and while the same rule is applied to Richmond, Baltimore's whole resources being larger than those of Richmond, apparently turn the scale in her favor. Deducting in the case of each city the resources of that city, which obviously is the correct method, would reverse the result. Baltimore would then stand, according to her tabulation, at some average point of time between one-half hour and thirty-four and onehalf hours within reach of $453,000,000 resources, while Richmond would within the same time be in reach of $516,000,000. / / Again,— Richmond is within 1 2 hour to 141 2 hours of $473,000,000 resources, while Baltimore can reach only $380,000,000 resources within these periods. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 16 On the other hand, when it comes to distant points, Baltimore is / 151 2 to 342 hours from $72,000,000 resources, while Richmond is thus / 1 distant from only $42,000,000 resources. The mean distance (hours) of Richmond from $122,000,000 resources which must take in Baltimore is stated by Baltimore as 5 / 1 2 hours, and her distance from $66,000,000 resources which must include the District of Columbia, is set down at 4 hours. / 1 2 The actual average time of six trains daily carrying mail from Richmond to Washington is three hours seven minutes. This is an error in computation on the part of Baltimore of one hour and twentythree minutes, or 44 per cent. In the ease of Baltimore, apparently 51 2 hours mean distance / in the tables, taking the time from Washington to Baltimore at one hour thirty minutes, as given by Baltimore, the actual average time from Richmond to Baltimore would appear to be four hours thirtyseven minutes, an apparent error on the part of Baltimore of 53 minutes, or 19 per cent. These corrections would operate on at least $170,000,000 resources in favor of Richmond against $51,000,000 in favor of Baltimore. In the same manner Baltimore lays claim to being nearer than Richmond to $18,000,000 national bank resources in Virginia, but gives Richmond a closer proximity to $30,000,000 national bank resources in West Virginia, and of course to all the bank resources of North and South Carolina,—Appendix A. These tabulations comprise 17 pages of the Baltimore Brief, and are therefore treated here at length because of the importance which is apparently attached to them. In their bearing upon the questions at issue these tables, even if correct, and not arbitrary and fallacious in method of computation, are not comparable in value to the statements presented by us indicating the distribution of bank resources by States of the district, the number of institutions, comparisons in growth, area, population, material resources, etc., and the relative position of Baltimore and Richmond to all these factors. In this connection, the Brief for Baltimore, page 51, makes this surprising statement: http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 17 "Practically the whole district being within one business day of either Baltimore or Richmond, the question of distance obviously becomes immaterial." "The exact hour in the day at which a mail transaction is consummated is unimportant." It is well known among bankers that if mail arrives, or transactions are consummated after Clearing-House hours, which usually occur early in the day, it means the frequent loss of a banking day. The mean distances, measured in time, in the Baltimore tables, cannot, therefore, be given the value assigned them. The hours of arrival of mails enter into the question in a vital way. The overwhelming volume of bank mail is dispatched after banking hours, and in the case of the smaller banks particularly, usually at a very late hour in the day. A difference of a very few hours in the arrival of mail at any point will and does often make the difference of a banking day. The course of the mails is not alone to be considered in this connection, for it is to be assumed that representatives of the member banks will be compelled in the ordinary course of business to make frequent visits to the Reserve Bank. It would be a matter of great consequence to many bankers to lose the ten hours of time between Richmond and Baltimore and return. Upon the point of convenience and time in consummating bank transactions, we respectfully refer to the testimony of the witnesses from North and South Carolina at the hearing before the Organization Committee in Washington, to which reference is made, in another connection, hereafter. Reference is also made to the two maps accompanying this Brief, one showing the centre of the national bank resources, the centre of production and the centre of population of District No. 5, and the other the mail advantages of Richmond over Baltimore. Having due regard, therefore, to the convenience of those who transact the business, as well as to the customary course of business, we maintain that Richmond is the most convenient and suitable place for the Reserve Bank of District No. 5. On page 16 of the Baltimore Brief the statement is made that "Richmond has no exports or imports at all," and on page 74 the http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 18 statement is made that Baltimore "creates foreign exchange from the export of grain and similar products alone amounting to over $40,000,000," and reference back to page 16 is made. The inference appears to us to be made that Richmond handles no foreign exchange. While there is no direct evidence in the record on this point as to Richmond, we could, if permitted, readily present evidence to show that a very large volume of business is transacted in Richmond which creates foreign exchange, which exchange is now being handled by Richmond member banks. This foreign exchange is relied upon to furnish a considerable part of the business of the Reserve Bank, if located in Baltimore. Practically all of the foreign exchange made in Baltimore, as testified by witnesses at the Washington hearing, page 787, is sold in New York, where it can continue to be sold. Among other inaccurate statements in the Baltimore Brief there are two under the heading "Agriculture," pages 8 and 9. These give statistics not in the record. In refuting these statements without violating the rules laid down by this honorable body, we refer to a letter from Smyth Bros. -McCleary-McClellan Co., submitted with hundreds of other documents accompanying the Brief for Richmond, a part of the record, showing that of two items, horses and mules, in which she is credited by Baltimore with no business, Richmond handles more in a month than Baltimore handles in a year. With reference to Richmond as a distributing point involving railroad communications, we respectfully refer to page 17 of the Richmond Brief showing the selection of Richmond as the best distributing point on the Atlantic Seaboard next to New York. This brings us to one of the most important factors in determining the supremacy of any city in a given district,—the matter of freight rates. Mr. Waldo Newcomber, at the hearing in Washington, made the following statement: "Baltimore is unequalled among the eastern and southern cities of the country. Freight rates are the prime factors in the purchase and sale of commodities, and in shaping the normal flow of trade in commercial and manufacturing centres enjoying the • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 19 ' advantages of freight rates lower than those established. • Lower freight rates are granted Baltimore, not arbitrarily, but by virtue of her position in the apex of that favoring curve of the Atlantic Coast which reduces to a material extent the distances to and from other eastern parts." Pages 721 and 722 of testimony taken before the Organization Committee. In a statement prepared by Mr. W. T. Reed, President of the Chamber of Commerce, of Richmond, filed as part of the Brief on behalf of the Committee representing Richmond before the Organization Committee, the following appears: "The railroads serving the above-mentioned territory years ago recognized Richmond as the proper distributing point, and the above as the natural territory to Richmond, owing to the fact that they were enabled to give quick service, and from one to four days quicker delivery than Baltimore, or any city north of us. In view of this fact the rates into this territory were fixed at an average approximately of thirteen per cent. lower than Baltimore. The average first-class rate in the territory designated by the railroads as the natural territory to Richmond is 75.2 cents per hundred pounds, while the average first-class rate to the same territory • from Baltimore is 86.4 cents per hundred pounds, giving Richmond as advantage on the first-class rate of 11.2 cents per hundred pounds, or approximately 13 per cent. This relative proportion in favor of Richmond applies to class and commodity rates, and, in some instances it is greater in favor of Richmond." We also refer to the map, page 41, of the Richmond Brief, showing Richmond's "Preferential Freight Rafe Territory," embracing the greater portion of the area now in the fifth district. It is significant that in the Brief filed on behalf of the citizens of Baltimore no further mention is made of the fact that "Freight rates are prime factors in the purchase and sale of commodities, and in shaping the normal flow of trade." In this respect, therefore, Baltimore must be considered as having abandoned her claim. The Brief of Baltimore makes the repeated statement that Richmond recognized the preeminence of Baltimore in any territory including both cities, page 26 of the Brief, and that "others from Richmond itself evidently realized that Baltimore is the natural capital of any district in which Maryland is the most northern State." Page 58 of Brief. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 20 The letter of the Richmond Committee, transmitting its Brief to the Reserve Bank Organization Committee, clearly sets forth Richmond's position as to the inclusion of Baltimore and Maryland in the district. This letter, doubtless through oversight, is not printed in the record and it is, therefore, appended to this Brief. Again, it is claimed that the banks of the district in voting did not understand that the district to be determined upon might include Baltimore as well as Richmond. For a complete refutation of these unfounded claims, we respectfully refer this honorable body to the Brief filed on behalf of the North Carolina Bankers' Association, by George •A. Holderness, president, page 315 of the record, laid before the Senate by the Reserve Bank Organization Committee, to the testimony of various witnesses who appeared before the Reserve Bank Organization Committee at Washington and to the poll of votes on page 46 of the Richmond Brief. The following are extracts taken from the Brief of North Carolina: "When before the Committee in Washington on the fifteenth of January, Mr. J. W. Norwood, of Greenville, S. C., and Mr. R. G. Rhett, of Columbia, S. C., stated that Maryland should be added to the district outlined by the Richmond Committee, and from further study of the question it appears that this should be done, as well as all of West Virginia. And it is believed that this can be done without in any way interfering with the natural territory of any other district, since it appears to us that the North Atlantic States should be divided as follows: "Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, and the eastern part of Connecticut, with Boston as the Reserve City. "New York, western Connecticut, northern New Jersey, with New York as the Reserve City. "Pennsylvania, southern New Jersey, and Delaware with Philadelphia as the Reserve City. "This leaves Maryland in the nature of a 'floater.' "With this added territory our district would embrace the following States: Maryland, Virginia, West Virginia, North Carolina, South Carolina, Georgia, Florida, the eastern part of Tennessee, the eastern part of eastern Kentucky, and the District of Columbia. This territory, with its diversified interests and banking capital, would be entirely independent and amply selfsustaining under not only normal conditions, but under almost any conditions. IP) http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 21 "Now,with this territory fixed upon, the next question is which city within this territory could best serve the whole territory. On this point we respectfully submit that Richmond is unquestionably the city. Ninety-one per cent. of the banks in North Carolina, including all of the national banks except six, have already expressed themselves in favor of Richmond, and the banks so desiring Richmond represent 89 per cent. of the capital, surplus and profits of all the banks in North Carolina, and 98 per cent. of their deposits. Of the said 91 per cent. of the banks voting for Richmond, 373 of them are expressly for Richmond as first choice, and the balance of 69 (except three for Baltimore) are equivalent to a first choice, as they name Charlotte or blank as their first choice. "Not one of the North Carolina banks has expressed a first preference for Atlanta or Washington, and only three for Baltimore. South Carolina has expressed its preference for Richmond almost as strongly as North Carolina, and has given Atlanta only two first choice votes and Baltimore one. "The States of Virginia, North Carolina and South Carolina, with national banking capital and surplus of $48,000,000, are as unanimous for Richmond as the same number of institutions can be for any one thing. * * * "As stated by Colonel Bruton when before you in Washington, it is important to have a sufficient amount of currency within easy reach of the tobacco, cotton and peanut sections of North Carolina, and this may be said of South Carolina and the more distant southern points. As shown by the time-table filed with the Richmond Brief, currency wired for from Richmond in the evening can reach the greater portions of this territory by business hours the next morning. "Richmond, as stated by Mr. Norwood when before you in Washington, is practically one business day nearer the majority of this territory than Baltimore is." Witnesses appearing before the Reserve Bank Organization Committee at Washington testified as follows: Mr. Geo. A. Holderness, of Tarboro, N. C.: Secretary of the Treasury: "I may have missed something you said while I was reading. Is it your observation that the course of trade is with Richmond, instead of Baltimore " Mr. Holderness: "Absolutely, sir. About twenty years ago I was a traveling man from Baltimore. I noticed that there were a great many lines of goods that Baltimore sold at that time http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 22 almost entirely. Now they have no representative in that line. Heavy groceries, heavy drygoods and domestics. Richmond has almost shut them out." Mr. J. Elwood Cox, of High Point, North Carolina, testified: "I think Richmond is the only city that could be familiar with the three great lines in North Carolina,—cotton, peanuts, and tobacco." He testified further: "I simply want to emphasize the fact that the bankers of North Carolina, as I see it, very much prefer Richmond, because all of our trade, or practically all of it, is with Richmond. We have accounts with other northern cities, but 95 per cent. of the banks of North Carolina, I think, keep accounts with Richmond. I doubt if 25 per cent. keep accounts with Baltimore." Secretary of the Treasury: "To what extent would you have to keep accounts with ot1i3r cities assuming that Richmond was the Reserve Bank of this district? To what extent, after the establishment of such a bank, would you have to keep balances in other cities, like New York, Philadelphia and Baltimore?" Mr. Cox: "Naturally we would keep some in New York." Col. John F. Bruton, of Wilson, N. C., testified: "Our banks in the eastern part of the State deal almost exclusively with the producers, the farmers, and speaking for Wilson, N. C., Rocky Mount, Kinston, Greenville, and two or three other points, we handle quite a large volume of tobacco, and have to pay for a great deal of it with money—currency— and on that account a convenient point from which to get the currency is extremely important with us. If we cannot get the currency it would close up our institutions and destroy our markets. For that reason our people are intense in their desire to have their Regional Reserve Bank located in Richmond." Secretary of the Treasury: "Where do you get most of your currency now?" Mr. Bruton: "We get it from Richmond and ' Norfolk." Secretary of Agriculture: "Is it your impression that the business in North Carolina, the banking business, is related to Richmond more than to any other place?" http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 23 Mr. Bruton: "Yes, sir, I feel so, Mr. Secretary, and I feel like we would be a little away from home to take us to Baltimore." Mr. J. C. Brown, of Raleigh, N. C., testified: "I came really representing the State of North Carolina rather than Raleigh, Mr. Secretary. * * * The best I can do,I think, is to reaffirm what has already been stated about Richmond, its ideal location, midway between the North and South, and its intimate relations with both sections. The fact that Richmond, already known to our people, knows their needs, knows the condition of our crops, knows the character of our people, so that there need be no delay, not only in the shipping of currency back to us, but in the passing on our paper. They are thoroughly familiar with that because they have been lending money to North Carolina for a long time, and we believe that they would be able to serve our people more advantageously than any other point which could be named." We feel that in no way can our Brief be better strengthened than by annexing to it the statement made by the Reserve Bank Organization Committee, accompanying its designation of the Federal Reserve Districts and the Federal Reserve Banks, so far as it deals with the fifth district. It is earnestly maintained that the decision of the Reserve Bank Organization Committee is in accordance with the terms and spirit of the act, and is sustained by the record, and that its decision should be affirmed by this Board. THE THE THE THE THE THE THE THE THE FIRST NATIONAL BANK, MERCHANTS NATIONAL BANK, PLANTERS NATIONAL BANK, AMERICAN NATIONAL BANK, NATIONAL STATE AND CITY BANK, CENTRAL NATIONAL BANK, BROADWAY NATIONAL BANK, MANCHESTER NATIONAL BANK, SAVINGS BANK OF RICHMOND, EPPA HUNTON, JR., and LEGH R. PAGE, Counsel of Respondents. Members of the Federal Reserve Bank of Richmond of Federal Reserve District No. 5. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 24 FROM THE STATEMENT OF THE RESERVE BANK ORGANIZATION COMMITTEE RELATIVE TO ITS DECISION OF APRIL 2D, 1914, PAGE 367 OF REPORT SUBMITTED TO THE SENATE. "National Bank Statistics. "For States of Texas, Virginia, Maryland, Georgia, Louisiana and Mississippi as of March 4, 1914, according to sworn reports made to the Comptroller of the Currency: Area Population sq. miles. Census 1910. Texas, including Dallas. 265,780 3,896,542 Virginia, including Richmond.... 42,450 2,061,612 Maryland, including Baltimore 12,210 1,295,346 Georgia, including Atlanta 59,475 2,609,121 Louisiana, including New Orleans 48,720 1,656,388 Mississippi 1,787,114 46,810 Capital and Surplus. Individual Deposits. Loans and Discounts. State of Texas, including Dallas $76,785,584 $197,663,338 $215,114,326 90,887,858 107,410,063 Virginia, including Richmond 29,732,696 Maryland, including Balti28,267,876 83,217,876 more 91,136,942 51,382,061 Georgia, including Atlanta... 24,479,345 61,852,579 Louisiana, including New Or12,128,866 leans 32,000,521 34,804,354 Mississippi 5,168,192 17,045,324 18,669,200 "From the above statement it will be seen that in each item, capital and surplus, individual deposits, and loans and discounts, the national banks of Virginia, including Richmond, largely surpass the national banks of Maryland, including Baltimore. "The capital and surplus of the national banks of the State of Virginia are 60 per cent. greater than the capital and surplus of the national banks of the States of Louisiana and Mississippi combined, including the city of New Orleans, while the loans and discounts by the national banks of Virginia are more than three times as great as the loans and discounts in the national banks of Louisiana, including New Orleans. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 25 "While the capital and surplus of the national banks of Georgia largely exceed the combined capital and surplus of the national banks of the States of both Mississippi and Louisiana, the loans and discounts made by the national banks of Georgia exceed by $13,000,000 the loans and discounts of all the national banks of Louisiana and Mississippi combined, including the city of New Orleans. "The capital and surplus of the national banks of Texas amount to four times as much as the capital and surplus of the national banks of the States of Louisiana and Mississippi combined, and the individual deposits in the national banks of Texas also amount to about four times as much as the individual deposits of all the national banks in Louisiana and Mississippi, the only States from which New Orleans received as much as half a dozen votes as first choice as the location for a Federal Reserve Bank. "In the poll of banks made directly by the Comptroller's office, Richmond received more first choice ballots than any other city in the district-167,against 128 for Baltimore,35 for Pittsburg, 28 for Columbia, S. C., 37 for Cincinnati, and 25 for Washington. Of the remaining 21, 19 were for Charlotte, N. C., and 2 for New York. Leaving out the States of Maryland and Virginia, Richmond received from the rest of the district three times as many first choice votes as were cast for Baltimore. "District No. 5 is composed of the States of Maryland, Virginia, West Virginia (except four counties), North and South Carolina, and the District of Columbia. These States have always been closely bound together commercially and financially, and their business dealings are large and intimate. The reports made to the Comptroller of the Currency on March 4, 1914, by all the national banks in each of these States show in every essential respect that the business of the national banks of Virginia, including Richmond, is greater than the national banks of Maryland, including Baltimore, or any other of the five States embraced in District No. 5, as appears in the following table: http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 26 Capital, Surplus and Loans and Total IndividUndivided Profits. Discounts. ual Deposits. Virginia $33,544,631 $107,410,063 $90,887,858 Maryland 32,390,057 91,326,942 83,217,376 West Virginia 18,209,326 56,789,538 61,421,332 North Carolina 13,527,086 44,051,033 36,051,154 South Carolina 10,332,439 28,860,456 23,330,916 District of Columbia. 12,685,411 26,253,432 29,520,053 "Advocates of New Orleans have criticized the decision of the Organization Committee, and have given out comparative figures as to New Orleans, Richmond, and other cities which are incorrect and misleading. An analysis and study of the actual figures will be found instructive and can lend no support to the claims of New Orleans. "From the sworn special reports recently submitted to the Comptroller of the Currency, it appears that the national banks in Richmond were lending in the thirteen Southern States, on January 13, 1914, more money than was being loaned in those States by the national banks of any other city in the country except New York. The total loans and discounts in the thirteen Southern States by the four cities referred to are as follows: Richmond Baltimore New Orleans Washington $33,473,000 6,891,000 19,477,000 915,000 "The figures also show that in those portions of District No. 5, outside of the States of Virginia and Maryland, the Richmond national banks are lending twice as much money as all the national banks in Baltimore and Washington combined. They also show that, although. Richmond is not a reserve city, the banks and trust companies in the thirteen Southern States had on deposit in the national banks in Richmond on February 14, 1914, $9,876,000, or slightly more than the banks in this section had on deposit in the city of Baltimore, and four times as much as they carried in Washington, although these two cities have http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 27 long enjoyed the benefits of being reserve cities. That southern banks should carry larger balances in Richmond, where they could not be counted in their reserves, rather than in Baltimore or Washington, where they could be counted, is suggestive. "The figures show that the capital and surplus of all reporting banks—national, State and savings and trust companies—per capita in Richmond as of June 4, 1913, was $131 in Baltimore,$85 in Washington, $88, and in New Orleans, $60, while the loans and discounts made by all banks and trust companies in Richmond, on the same date, amounted to $393 per capita, against $190 in Washington, $213 in Baltimore, and $194 in New Orleans. "The amount of money which banks and trust companies in the various parts of the country carried on deposit with Richmond—a nonreserve city—on February 14, 1914, amounted to $10,970,000, or nearly twice as much as the balances carried by outside banks with the national banks of Washington, which on the same day amounted to $5,516,000, and one and a half times as much as they carried on the same day with the national banks of New Orleans, a reserve city. "The statistics furnished the Organization Committee shows that on March 4, 1914, the capital and surplus of the national banks of Richmond, per capita, amounted to more than twice as much as the capital and surplus, per capita, of the national banks of either Baltimore or Washington, and three and a half times as much as New Orleans, while the individual deposits of the national banks of Richmond amounted to $201 per capita, against $86 for Washington, and $76 for Baltimore, and $50 for New Orleans. The loans and discounts in the national banks of Richmond on the same day were reported at $279 per capita, against $77 for Washington, and $108 for Baltimore, and $51 for New Orleans. "Especially significant are the following statistics showing the growth in capital and surplus, loans and discounts and individual deposits of national banks in the three cities named: Richmond Washington Baltimore New Orleans Capital and Surplus. September, March, Increase 1904. 1914. Per Cent. $ 3,115,000 $ 9,914,392 199 6,215,000 11,365,000 83 18,262,900 19,205,900 5 6,250,000 6,773,000 8 http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 28 Richmond Washington Baltimore New Orleans Loans and Discounts. $12,946,000 15,018,000 48,755,000 20,088,000 $35,593,000 25,405,000 60,312,000 17,285,000 175 69 23 *13 Richmond Washington Baltimore New Orleans Individual Deposits. $11,257,000 20,017,000 40,910,000 19,425,000 $25,705,000 28,491,000 42,553,000 16,857,000 128 42 4 *13 "In other words, the figures show that the national banks of Richmond were lending on March 4, 1914, twice as much money as all the national banks in the City of New Orleang, and 40 per dent. more than all the national banks in Washington. "In the original decision of the Committee the various economic and other factors which entered into and determined the Committee's action were enumerated and need not be repeated here. This statement is made for the purpose of disclosing some of the details which influenced the Committee's findings." * Decrease. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis COMMITTEE ON LOCATING FEDERAL RESERVE BANK IN RICHMOND RIcHMOND, VA., February 17, 1914. COPY. Honorable Reserve Bank Organization Committee, Washington, D. C. SIRS: We respectfully transmit to you herewith our argument for a certain territory as a Reserve District with Richmond as the location of a Federal Reserve Bank. In preparing our brief it has been our purpose to outline a well defined natural division of country as a logical zone requiring few branch banks, which we hold to be desirable. We are fully aware that the location of the Federal Reserve Banks demands consideration of the various zones in their relation to each other, and that final determination must be in the interest of the country as a whole, and that in respect to the situation as a whole, the Committee is now in possession of more complete information and a fuller comprehension than we can possibly have. Therefore, we recognize that this consideration may involve some modification or enlargement of the zone which we have presented, and that it is the problem and the province of the Committee to make such adjustments. But we are convinced that no zone can be formed having the headquarters of a bank in the South Atlantic States which does not include all or a large part of the proposed territory. We also believe that it must and will be recognized that the Federal Reserve System is essentially a branch banking system, with several heads instead of one, the whole co-ordinated by the Federal Reserve Board, a fact which apparently is not generally or fully understood at the present time. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 30 The law demands a territorial distribution of the parent banks, and the exigencies of the situation will necessarily leave many important sections, and many important cities in those sections, to.be served by branch banks. We have, as we believe, conclusively shown that Richmond can best serve the whole zone mapped out by us better than any other city in it or any city north of it, and that Richmond is the decided choice of the banks in the larger portion of this zone. It would not impair the integrity of our argument to have certain territory added to it either at the north or at the south. It is difficult, we believe, to establish a strong zone in the South outside of the zone we have mapped out, with due regard to convenience and trade relations, and yet the South is such a rapidly developing section that within a few years, if not at present, it can justly claim and its interests may demand another Federal Bank. The State of Alabama, with its iron and steel interests, must within a few years become second onl ,to Pennsylvania in those industries. The northern half of West Virginia, the District of Columbia, and Maryland might, we believe, with benefit and in the general interest be included in the zone, to be served by a branch bank in Baltimore, since the Baltimore & Ohio Railroad ties that section intimately with Baltimore, just as the railroads in the zone presented tie together the States in that zone. Transactions of banks in that section with the parent bank might be carried on entirely through the Baltimore Branch, which could, bes yond que- tion, serve that city and section with complete efficiency and advantage, although the whole section is within twelve hours' comto munication with Richmond. The zone as a whole would, of course, be greatly strengthened financially. About $3,000,000 of capital and $9,000,000 in deposits would be added to the Federal Bank. The banks in the entire zone mapped out by us would, we believe, be overwhelmingly in favor of it, with Richmond as the location of the Federal Reserve Bank. • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 31 Part of the minority of banks in the zone which did not vote for Richmond appeared to favor Baltimore only because they believed that the inclusion of that region would strengthen the zone financially, while they recognized the superior advantages and convenience of Richmond as a location, and the more intimate and extensive relation of Richmond to the zone, Richmond also having the great additional advantage of being one banking day nearer to a large majority of the banks in the zone, an economic consideration in itself of such importance as to be conclusive. Respectfully submitted, GEORGE J. SEAY, In behalf of the Committee representing Richmond. http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis , I itcl )\ \ t li \ / r../ \ 1 — 7 ---• ---'. ° '• / f,,..•‘, I 7 • / 40 • L •• • • ,./...•• % (1) • • ? •4• w_ .!/ .. 0• ••• ! • e• • • i • ••• • •• •. -/ . • 0 e• •i SO • • ••f• • filo 4• • as •(... •0,.0 • • e • •••• • ••w • - ./. • • • 0•. ) \ • • \ •••/ • • / / k., I \• •\• • s0 , \ • ._ . _ .. • • •• ••• , ;1.6 rive. A • ./ • O: \ a A..11 f-as- : • • •a %.__. / . •er 41 •••••• ..:•:/-:-. •••• s -0 ./••• . •:•••• ••• a •• .-jelly-ie • s_ et . —— • • • 4 • • ; • 4 ir -/ 1 4 ,e'g Ogele - - - 7-- -•-•1, Ir _. , _ •••.-• •woo I..,_._ o . -eo• 0.4 • • •• ••• • k.. • • •• • ••• ..e •• • r• 4 • 4):• -. . • ... • 00 •• / • • o 7\-• . oos to_ a % Olt 0 e • •• ,)• • • • ii. I • • 00;• : 8 • • • • ./ •: • • ••• ( f/s• ./.\....,.I • ) •...• .4I .-. 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EyotNEERS RiCWAIOND VA http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • RICHMOND POLL OF BANKS Choice Va. N.C. S.C. W.Va. Tenn. Richmond 1st 2d 3d 415 3 373 69 Columbia 1st 2d 3d Atlanta 1st 2d 3d Savannah 1st 2d 3d Charlotte 1st 2d 3d Birmingham 1st 2d 3d Baltimore 1st 2d 3d 4 11 Washington 1st 2d 3d 6 Cincinnati 1st 2d ' 3d Louisville 1st 2d 3d Jacksonville 1st 2d 3d Nashville 1st 2d 3d Pittsburg 1st 2d 3d 82 122 49 26 3 25 10 11 Ky. Ga. 7 47 4 56 12 Fla. Totals 4 952 12 305 1335 5 I 78 102 9 102 \ 9 111 9 8 11 -I 7 , 96 22 1 112 49 2 22 1 30 2 6 25 41 66 46 18 9 8 8 64 • 1 1 46 17 1 55 1 10 1 7 4 11 1 1 3 6 } 104 2J 20} () 9 6 I 1 22 24 2 1 28 9 3 31 14 1 163 21 59 42 102 1, I 33 23 9 9 1 56 1 10 3 1 1 I 3 2} 5 3} 3 3 http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis o -, ).e.,, , 4„ .* 4- r.,.. .4+ 0 '-#. -0 •._ • -• • •_ S. itas • N s .• — • 0 +00 .• •.• — ••. •• •v : 0 00.•0 • . t.....6%% • 00 ,s0. 0,-..•. 4, •- •• v vr ••• • •••••6* • •, •IV • • 0 % : • : • 411 1 4 . •6 :4) • • x ••,::°••••.• 0 ••• . • • 4° • 6: • 7 x xi• i' • •• 400 • go. : e r.... l : eate.0 41 4 Il • 4 • • .8::• •• • + • •:-... .• ..... • aot ••••• •.:. Je.tr •• :::•••) . • ••:.** cl. ._ • • . • .. •,..., e o •• • •• • •o%nit ••• 1/ • 4 :qr.: . ••:•:•••••. •• *4; • og ko s 4p +o • .• . • - ..•0- •. :- 00- ..- _••.-... I. 00o 0% • 0 . • • 00 • v pee *. .• ••.. .0 00...•se • . • •.. • 00 • • • • 400„ . 00 •• 00.r 0 0.... 4 . • • 0 • • I' . . 0 ....:: . • . • od ,Vcv 0:ie. .. . .. po 0 • • 0 t • •0 . ' • • , 0 • Seto wee • • • • e • e • • y •• : • Orb% t o F.. o o oo•• •o • 0 0 000 0 0, 4 o'%. .0 ' . • • o• o o o0 0o 0 0 0 _ k w o c). ° "C • oc.A • . 0 • a., 0o •0 0..• 0 0 -08 0 0 ,a o • ' % • • o" \ 0 ° ° di otis o ID'6% 0 0 • 00 • 0 0 o 00000w •0 • • 0 o0 0•., 00 o •_„ o•o 00 .., • o o CID • 0 00 0 00 0 410 x 0 o 00 A- 0 x 0 0 0 0 0 0 F x 0 0 00 0 0 • 0 MAP 0 SHOWING LOCATION OF BANKS VOTING • FOR RICHMOND FIRST CHOICE INDICATED THUS SECOND CHOICE INDICATED THUS THIRD CHOICE INDICATED THUS r) . COLTON GL.ARhE CAVIL PRATT- 11,c. ENGINEER'S RICH rh 0N 1:), VA -17 http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis CAPITAL, SURPLUS, PROFITS AND DEPOSITS OF BANKS VOTING FOR RICHMOND STATE Capital Choice Surplus and Profits Deposits Virginia 1st $30,041,097 $23,151,500 $163,645,126 North Carolina 1st 2d $14,542,770 2,203,100 $ 7,844,000 1,252,000 $ 81,996,650 8,190,000 South Carolina 1st 2d $ 4,909,800 5,269,714 $ 2,966,000 2,753,800 $ 18,743,000 8,058,000 Georgia 1st 2d 3d $ 730,300 5,334,900 570,000 $ 278,000 3,482,200 653,000 $ Florida 1st 2d 3d $ 320,000 1,895,000 245,000 $ 74,000 586,000 262,000 $ 1,690,000 5,676,000 2,353,000 West Virginia (16 Cos.) 1st 2d 3d $ 2,561,000 i $ 1,641,000 2,909,175 1,859,000 350,000 ", 35,000 $ 4,084,000 12,775,000 597,000 Tennessee (10 Cos.) 1st 2d 3d $ 908,350 547,500 1,075,000 423,300 234,000 359,000 $ 6,041,000 2,379,000 5,664,000 Kentucky (35 Cos.) 2d 3d $ 450,000 5,725,000 118,000 3,113,372 $ 1,502,000 17,140,000 $52,085,172 $361,631,276 Total $80,587,706 Total Capital, Surplus and Profits. Total Deposits. $ 538,000 19,147,500 1,412,000 $132,672,878 361,631,276 48 • http://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • °PITTSBURG 0 I, o LANCAST ern TOR. 0 PHItlySE I'S VI 4,4 f MIN4Y:ON -Ern dborns-rIP•R- r.4.1rt•• 0 i C. s ‘ r oL ,...nRseurta 0 v "747 0CRi41( RSBuRG otri96 ...14065HRYGT41. . / "MU 5rON \ I • / •••• • • . • r MOU 711 MA I L A5cLAT1cVirOlt.ti-Tr2 FtLITAL5L"RVCCTI;aom RIcii morio -T120e . S BAL-rv4oRr., t 12 , rTTL R) -TAL- nr2VICL APIto5vtc1-1 riq 13 lc mu5i g0 HROUG 1-1 'PIC IMOiND "opt , fiALTO 15ALT ivAIL TO 12IC H MOriD WHICH MU 5T co TrfUouGH BALT"mkt - /"IL WHICH CAM MOTZt- con vroiLtITIY GO TO 1:2 crim OrlD-ri MAIL WHICH coo MORL C.0~t/IILelILI go TO bom.. eloikt 82% CA el 35tTTLR Tit RVT_I) - HoLTOrl CLATZ Kt.& PRAT CIVIL r.c/c,iriLro • Pic tim0111)- VA 4 a-4- 111`•• 7 /r/4 P crvor-ID - . . • . v . ./.-•. r .,, 13A1-7(;1 .1,_,. 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