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p h o n e : m a d is o n , 5a 8o
Committee on Locating
Federal Reserve Bank
in Richmond
From City o f Richmond:
W . H . A d am s
R . L e e P eters
From Banks:
O l iv e r J. S a n d s
J . K e r b B r an ch
J a s . N . B oyd
B. L. B sm ss
J, B . P u r c e l l
A
m e r ic a n
N
a t io n a l
Bank
E z e « n < iv e C o m m itt e e *
O l iv e r J . S a n d s , C h airm an
E . L. B b m iss
E d m u n d S t r u d w ic k
J oh n L a n d s t r b b t
B. H . R a n d o l p h
J. K b r r B ra n c h
R . L e e P eters
C l a r e n c e C o le m a n
B u il d in g
From Chamber o f Commerce:
B . C . L a ir d
E d m u n d S t r u d w ic k
S . D a b n e y C r e h sh a w
R ic h m o n d , V a.
From Business Men's C M :
» e b . 17, 1914.
J o h n L a n d st r b b t
D.
G . W h it e h e a d
From Travelers Protective Association:
C l a r e n c e C o le m a n
B . H . R an d o l ph
From United Commercial Travelers:
W . T . S h e ph e r d
0 . C. Ho ps
From Retail Merchants Association:
1. H i K a u f m a n
W . 3 . R h oads
Honorable John Skelton W illiam s,
Comptroller of the Currency,
Member of The Reserve Bank Organization Committee,
Washington,
D. C.
S ir :
We re sp e ctfu lly transmit to you herewith our argument
fo r a certain te rrito ry as a Reserve D istric t with Richmond as the
location of a Federal Reserve Bank.
\
i
* In preparing our b rie f i t has been our purpose to outline
& w e llt le f ined natural division of country as a lo g ic a l zone reqiuirfewfbranch banks, which we hold to be desirable.
We are f u ll y aware that the location of the Federal Reserve
fcanite'teanands consideration of the various zones in their rela tio n to
£ach other, and that fin a l determination must be in the in terest of
the country as A Whole, and that in respect to the situation as a
Wh0$ e, the Comiftittee is now in possession of more oomplete information
fluid a fu lle r comprehension than we can possibly have.
Therefore we
r e c o g n i s e that th is consideration may involve some mbdification or
«6lirg«»ei|t. o r the aone which we have presented, and that i t i s the
PH N M D N 5280
O E! A ISO ,
G e o . C . G r e g o r y , Secretary
C . P . W a l f o r d , J r .. Treasurer
F tom City o f Richmond:
W . H . A d am s
R . L ee P eters
From Banks:
O liv e r J. S a n ds
J. K e r r B ran ch
J a s . N. B oyd
E . L. B eh jss
J. B . P u r c e ll
Committee on Locating
Federal Reserve Bank
in Richmond
A m e r ic a n N a t io n a l B a n k
E z e c n tlT c C o m n itite *
O l iv e r J. S a n d s , C hairm an
E. L . B e m iss
E d m u n d S tr u d w ic k
J o h n L a n d st r e e t
B. H . R an d o l ph
J. K e r r B ran ch
R . L ee P e t e r s
C la r e n c e C o le m a n
B u il d in g
From Chamber of Commerce:
E.
C. L a ir d
E dm un d S t r u d w ic k
S. D a b n e y C r e n sh a w
R ich m o n d , Va.
From Business Men's Club:
J o h n L a n d st r e e t
D . G . W h ite h e a d
From Travelers Protective Association:
C l a r e n c e C o le m a n
B. H . R a n d o lph
From United Commercial Travelers:
W . T . S h e ph erd
0 . C . H ope
— 2—
From Retail Merchants Association:
1. H . K a u f m a n
W . S. R hoads
p r o b le m and t h e p r o v i n c e o f t h e Cornraittee t o make su c h a d j u s t n e n t s .
B u t we a r e c o n v i n c e d t h a t no z o n e can b e form ed h a v i n g t h e h e a d
q u a r t e r s o f a hank i n t h e S o u th A t l a n t i c S t a t e s w h i c h d o e s n o t i n c l u d e
a l l o r a l a r g e p a r t o f th e t e r r i t o r y / p r o p o s e d .
We a l s o b e l i e v e t h a t i t m u st and w i l l b e r e c o g n i z e d , t h a t th e
F e d e r a l R e s e r v e S y stem i s
e s s e n t i a l l y a b ranch b an kin g
s y s te m , 'w ith
s e v e r a l h ea d s i n s t e a d o f one, th e w hole c o o r d in a te d b y th e F e d e r a l
R e serve B oard, a f a c t w h ich a p p a r e n t ly i s n ot g e n e r a l l y or f u l l y under
sto od a t th e p re se n t tim e.
The la w demands 1a t e r r i t o r i a l d i s t r i b u t i o n
b a n k s , and t h e e x i g e n c i e s o f
im p orta n t s e c t i o n s ,
o f t h e pa.rent
th e s i t u a t i o n w i l l n e c e s s a r i l y l e a v e nan y
and many i m p o r t a n t c i t i e s
in th o s e s e c tio n s ',
to be
aerved b y b r a n c h b an ks*
We h a v e , a s
We
b e l i e v e , c o n c l u s i v e l y shown t h a t Richmond can
b e s t s e r v e t h e w h o l e z o n e mapped o u t b y u s b e t t e r thp.n a n y o t h e r c i t y
it o r any c i t y n orth o f i t ,
and t h a t Richmond i s
th e b a n k s i n t h e l a r g e r p o r t i o n
o f t h i s zone.
I t w o u ld n o t i m p a i r th e i n t e g r i t y
c e r t a i n t e r r i t o r y added t o i t
th e d e c i d e d c h o i c e o f
o f our argu m en t t o h a v e
e i t h e r a t th e n o r t h o r a t th e s o u t h .
in
Airman
G e o . C. G rbgoS iy, Secretary
C. P. W ALFORD, J r.. Treasurer
Prom City o f Richmond:
W . H. A dam s
R . L ee P etb rs
Prom Banks:
O l iv e r J . S a n d s
J . K b r r B r an ch
J a s . N . B o yd
B. L. B n a s s
J . B . Pu rc ell
Committee on Locating
Federal Reserve Bank
in Richmond
A
m e r ic a n
N
a t io n a l
Bank
B u il d in g
PH N M D O , 5280
O E: A IS N
B x t e n t W e C o m m itte e .
O l iv e r J. S a n d s . C hairm an
£ . L. B em iss
E d m u n d S t r u d w ic k
J o h n L a n d st r e e t
B. H . R a n d o l ph
J. K e r r B r an ch
R . Le e P btbrs
C la r e n c e C o le m a n
Prom Chamber o f Commerce:
B . C . L a ir d
E d m u n d S t r u d w ic k
S. D a b n b y C r e n s h a w
R ic h m o n d , Va.
Prom Business Men's Club:
J o h n La n d str e e t
D. G. W h i t e h e a d
Prom Travelers Protective Association:
C l a r e n c e C o le m a n
B. H. R a n d o lp h
Prom United Commercial Travelers:
W . T. S h e p h e r d
0 . C . H o pe
From Retail Merchants Association:
— 3—
1. H . K a u fm a n
W. S. R h o a d s
It
is d iffic u lt,
we b e l i e v e ,
t o e s t a b l i s h a s t r o n g z o n e in
t h e s o u t h o u t s i d e o f t h e z o n e v/e h a v e mapped o u t , w i t h due r e g a r d t o
c o n v e n i e n c e and t r a d e r e l a t i o n s ,
d ev elo p in g s e c tio n
and y e t th e s o u t h i s
th a t w ith in a few y e a r s ,
J u s t l y c l a i m and i t s
i f not a t present,
i t can
i n t e r e s t s mas^ demand a n o t h e r F e d e r a l Bank«
The S t a t e o f A la b a m a , w i t h i t s
B u st w ith in
su c h a r a p id l y -
g r e a t i r o n anc’ s t e e l i n t e r e s t s ,
a f e w y e a r s become se c o n d onl3’- to P e n n s y l v a n i a i n t h o s e
in d u stries*
The n o r t h e r n h a l f o f W est V i r g i n i a ,
t h e D i s t r i c t o f C o lu m b ia ,
and M a r y la n d , m i g h t , we b e l i e v e , w i t h b e n e f i t and i n t h e g e n e r a l
i n t e r e s t , be in clu d ed in the zon e,
B altim o re,
to b e s e r v e d b y a b r a n c h bank i n
s i n c e th e B a l t i m o r e & Ohio R a i l r o a d t i e s
th at s e c tio n
i n t i m a t e l y w i t h B a l t i m o r e , j u s t a s th e r a i l r o a d s in t h e z o n e p r e s e n t e d
t i e t o g e t h e r th e s t a t e s in t h a t zo n e .
T r a n s a c t i o n s o f b a n k s in t h a t s e c t i o n w i t h t h e p a r e n t bank
B i g h t b e c a r r i e d on e n t i r e l y th r o u g h t h e B a l t i m o r e b r a n o h w h i c h c o u l d
b«y®Ad q u e s t i o n s e r v e t h a t c i t y and s e o t i o n w i t h c o m p l e t e e f f i e i e n o y
and t o a d v a n t a g e a l t h o u g h th e w h o le s e o t i o n i s w i t h i n t w e l v e h o u r s '
©omnunlcation w i t h Richmond*
1IU47
A
Natural and Economic Territory
for a
Federal Reserve District
w ith
RICHMOND
as the Location of the Bank
Respectfully Submitted to
The Reserve Bank Organization C om m ittee
by the
C om m ittee representing R ichm ond
COMMITTEE REPRESENTING RICHMOND
Appointed by
C it y of R ic h m o n d ,
R ic h m o n d C l e a r in g H o u s e .
R ic h m o n d T r u s t C o m p a n i e s ,
R ic h m o n d C h a m b e r of C o m m e r c e ,
R ic h m o n d B u s in e s s M e n ’ s C l u b ,
P ost “ A ” T r a v e l e r s ’ P r o t e c t iv e A s s o c i a t i o n ,
R ic h m o n d B r a n c h U n it e d C o m m e r c i a l T r a v e l e r s ,
R ic h m o n d R e t a il M e r c h a n t s ’ A s s o c i a t i o n ,
R ic h m o n d R e a l E st a t e E x c h a n g e ,
R ic h m o n d A ss o c ia t io n of C r e d it M e n ,
R ic h m o n d T obacco E x c h a n g e ,
R ic h m o n d R o t a ry C l u b ,
R ic h m o n d B ar A s s o c ia t io n ,
R ic h m o n d M i n is t e r ia l U n i o n .
RICHMOND
AS THE LOCATION OF A FEDERAL
RESERVE EANK
(A brief prepared by G e o r g e J. S e a y , on behalf of the committee
representing Richmond.)
The territory mapped out by Nature as the most perfect geograph
ical division of this continent lies south of the Potomac river—east of
the Appalachian mountains—and extends to the Gulf. By reason of
superior facilities of communication and the consequent trade relations
which have sprung up and become established, portions of contiguous
States are now and long have been, commercially allied with this
territory.
It is, therefore, believed that one of the most sharply defined and
perfect zones for the operation of a Federal Reserve Bank is embraced
in the following named States: Virginia, North Carolina, South Caro
lina, Georgia, Florida, the Southern half of West Virginia, part of
Eastern Tennessee, and part of Eastern Kentucky.
Since the Organization Committee has at all of its hearings sought
and invited the expression of opinion, we now desire to express the
conviction that the Committee can render an inestimable service to
the country, the value of which will grow with time, by defining the
Federal Reserve Bank zones in harmony with commercial zones, de
termined by natural boundaries, so far as may be done in agreement
with the act.
It has been recognized as desirable, for purposes of economic com
parison, to cut the country into units, or divisions.
Given a natural division of territory, and the conditions in it,
financial and commercial, must always be more uniform than could
otherwise be the case.
The Comptroller has adopted six divisions—within State lines.
The Inter-State Commerce Commission, for comparison of the
operations of railways, has made ten arbitrary divisions—within State
lines.
4
RICHMOND AS THE LOCATION OF
Poor’s Manual, a very high railroad authority of very long experi
ence, m
akes eight divisions—within State lines.
The United States Government has established nine Judicial Cir
cuits, one of which comprises the States of Maryland, West Virginia,
Virginia, North Carolina and South Carolina. Richmond was selected
as the location of the Court of Appeals for this Circuit, and the Chief
Justice sits here.
There are no standard divisions.
Comparisons by States will always be desirable and necessary, but
these divisions are too numerous for economic purposes.
The Federal Reserve Act marks an epoch in the commercial and
financial history of the United States, and, while zones once deter
m
ined may be readjusted, the service which can now be rendered to
the country by the Committee in fixing these zones, which need not 1<
>*
coterminous with States, and, therefore, are contemplated to be ac
cording to the natural divisions and trade relations of the country, is
of the very highest order.
In fixing the zone which we have mapped out, we have been guided
by tins principle, and, in presenting an argument to prove that Rich
mond can better serve this zone than any other city in it, and that by
reason of her commercial and financial preeminence she is entitled to
be the location of a Federal Reserve Bank, we have endeavored to
eliminate all irrelevant matter, and have confined ourselves to the con
sideration of the following points, all of which are involved in the
operation of the act:
1. The importance of Richmond’s geographical position—her facili
ties of communication, her convenience of location and accessibility
to members with whom we now do business, and her advantage, of
location in all banking transactions between the North and South.
2. The present trend of business—the present course o f commercial
transactions—the natural currents of exchange—the present bank
ing and trade connections and banking customs of the people.
3. The natural advantages of Richmond’s location with relation to
other Federal Reserve Banks necessary to be established on the
Atlantic Seaboard, in a territory embracing one-half of the national
banking capital of the United States and 41 per cent, of the
population
4 Cooperative emmercial importance in the territory covered, measw ri hf aqpifafc depouts, and other banking transactions.
A FEDERAL RESERVE BANK.
5
5. Diversity of industries and agriculture—in their effect upon sea
sonal demand for credit and currency.
6. Necessity of having capital resources to handle the business of the
district.
7. The wishes and views of those engaged in banking and commerce
in the district outlined as to the location of their regional bank.
In presenting our case we shall be compelled to state facts and
figures which we know to be within the knowledge of the Committee,
and with which by now we fear they may be surfeited. We desire
to bring these facts together and present them in such form and
manner as will serve for convenient reference, and to make more
clear their relations to each other and their bearing upon our
position.
Addressing ourselves to these facts in their order:
1.
The Unsurpassed Advantage o f R ichm ond in
Geographical Position.
Practically and effectively on the Atlantic Seaboard, about
midway of the entire coast—reaping the greatest advantage of the
favoring curve—opposite the gap in the Appalachian mountains giv
ing the shortest, easiest and quickest communication between the
Coast and the great centres of the Middle West—within one hour
and a half of the greatest of Atlantic harbors—plans being now un
der way to make it the greatest naval base—in quick communica
tion by rail and water with all other parts of the Coast and easily
accessible to the ocean commerce of the world. Rear Admiral Stanford
has just made the following report on this harbor:
“ The most frequent mobilizations of the fleet are in Hampton
Eoads and large ships ordinarily assigned to other yards must
pass this point proceeding to and from the Gulf to the West Indies.
In view of this central location, and the use of Hampton Roads
as a base of operations, there is greater possibility of unforeseen
repairs being required for vessels than at any other coast point.”
Richmond’s three north and south trunks lines—the Atlantic
Coast Line, the Seaboard Air Line and the Southern Railway, and
we may be pardoned for reminding the Committee that the genius,
brains and energies of Richmond men were very prominent in the
development of the last two, and are prominent in the management
of the first.
RICHMOND A S THE LOCATION OF
T w o o f the most important east and west trunk lines— the Chesa
peake & Ohio, and the Norfolk & Western— connect Richmond with the
finest coal area in the world and the greatest natural producing area on
this continent, while into Norfolk, within two hours and a half travel
from Richmond, run the Virginian Railway from the W est and the
N orfolk & Southern from the South.
A ll o f which, is well known to you, but necessary to be stated for
the logical bearing o f our argument,
W e wish to impress upon the Committee the natural advantages
o f the territory surrounding Hampton Roads, because it is generally
regarded as inevitable that the heaviest population o f the State will
be divided between Richmoud and that territory. Mr. 0 . P. Austin,
f o r 15 years Chief o f the Bureau o f Statistics of the Department of
Com m erce, in a report on the zone which we have mapped out, which
rep ort fu lly confirms our own argument and position and accompanies
this brief, refers to “ the possibilities o f the great harbor at Hampton
R oads becom ing the natural gateway fo r the Mississippi Valley, with
its enormous production for foreign markets, and consumption of
foreign merchandise.” He also states that “ the officers o f the W ar
Department in charge o f the 105 river and harbor works on the water
frontage from the upper Potomac to the western coast of Florida,
report the value o f the water-borne freight traffic at these places in
1912 at the enormous sum o f $1,680,000,000, about one-half o f which
is at Hampton R o a d s.”
W e believe that this region must and will have an economic
developm ent which will fa r surpass any equal area in the Atlantic
States— A ll o f which has a practical and most intimate bearing upon
Richm ond as the location o f a Federal Reserve Bank for the South
Atlantic States.
Reverting to R ichm ond's railroad facilities— they place her within
eighteen hours o f all the important cities within the district defined,
with the exception o f part o f the most southern territory, and reference
is made to the map and time table accompanying.
She is therefore in a position to ship with the greatest promptness
and under the quickest schedule— currency— not only to the banks
in her zone, but to the numerous cotton, tobacco and peanut buyers—
and a telegram received in Richmond before the close o f banking hours
would enable currency shipments to reach practically all important
points on the next day, in most cases before the opening of bank, and
few situations will appeal more strongly to practical country bankers
than this.
A F E D E R A L R E S ER V E BANK.
7
Again,— Richmond is within easier and quicker reach of alt the
eastern centres o f trade and finance than any other important Southern
city, and is in the m ost exceptional position to aet for the North in
banking relations with the South, and for the South in dealing with
the North.
No other city in the Atlantic Coast States occupies this advanta
geous position.
The numerous lines to the South and West are not only a guarantee
o f promptness and efficiency, but an insurance against disaster.
Into W ashington and Baltimore and on to points beyond there
is only one connecting- line.
It is worth while to consider that a railway disaster, easily imag
inable, to this line would cut off the South from any Reserve centres
placed north o f Richmond, and should this occur at a critical time,
might cause financial confusion and even disaster to the South Atlantic
States, and, since this idea emanates from a railroad man, it is entitled
to the greater consideration.
2.
Present Trend of Business.
It is a fact, certainly applicable to the Atlantic Coast States, that
the trend o f business, the course o f commercial transactions, and the
currents o f exchange are Northward, or, in other words, from the out
side towards the centres o f finance and manufacture. This is the nat
ural course o f exchanges.
» W e believe that the operation o f the Federal Reserve act will revo
lutionize the existing method o f using exchange in making settlements.
> H o act or rule will, however, reverse the natural course of settle
ments— where the money is due, there it must be paid.
V irginia, occupying the position of head of the Southern States,
places Richmond in direct line with this natural trend, on the principal
avenues o f travel and transportation.
The railway lines from the South come into Virgiuia as into ;i
funnel, Richmond being at the apex— the one line of railway being the
tube leading to Washington and points North. She is a natural con
verging point.
The overwhelming volume o f travel and transportation must i>
i>
through this point.
8
RICHMOND A S TH E L O C A T IO N O F
3. The Natural Advantages of R ichm ond’ s L ocation w ith
Reference to Other Federal Reserve Banks
on the Atlantic Seaboard.
It is plainly contemplated in the Act, and must so w ork out in its
uormal operation, that these Federal Banks will act not only as clear
ing houses for members in their own zones, but between zones. The
clearings between zones we believe will develop into enorm ous p ro p o r
tions, and the bank most advantageously located fo r clearing the trans
actions of any large section o f country will have a great service to
perform.
Time and distance must necessarily be most im portant fa ctors in
determining the location and selection o f this bank fo r such a purpose.
To best perform it, the means o f communication must be superior.
The bank should not only be readily accessible to mem bers in its
own district, but in the general line o f trade and natural current o f
banking transactions of the entire section, so as to preserve the con
tinuous trend toward the centre o f manufacture and finance where the
greatest volume of settlements is made.
This essential principle is peculiarly applicable to the A tlantic
Coast States, and can there be worked out to greater econom ic advan
tage than in any other part o f the country.
It is axiomatic that quickness o f communication is better assured
by being on the lines of greatest frequency o f travel, and all railroad
schedules have been arranged with regard to the N orthw ard trend a n d
w ith p a r t i c u l a r r e f e r e n c e to t h e f i n a n c i a l a n d b u s i n e s s c e n t r e s i n l i n e
iv ith t h a t tr e n d .
Therefore, to serve its own zone as a whole with the highest effi
ciency and economy, and at the same time to equally serve other zones
in intimate relation with its own zone, a point m idw ay along the line o f
quickest and most frequent communication, offers the ideal location,
and Providence has placed Richmond in that position.
The Atlantic Coast States afford a distinct and peculiar problem
in putting into effect the Federal Reserve Act.
It was recognized both before and during the fram in g o f and
debate upon the act that the problem in the E ast was to decentralize
reserves—while the object in other parts o f the country is to concen
trate them.
The States bordering on the Atlantic Coast have about 41 per cent,
of the population and 52 per cent, o f the national banking capital o f
the country, as follows:
9
A F E D E R A L RESERVE BANK.
FIGURES IN MILLIONS.
New England States—
Maine ................................................................
Vermont ............................................................
New H am pshire...............................................
Massachusetts ..................................................
Connecticut ......................................................
Rhode Isla n d ....................................................
11
7
9
96
31
11
165
Eastern States—
New Y o r k .......................................................... 344
Pennsylvania .................................................... 253
New J e r s e y ....................................................... 46
Delaware ...........................................................
3
Maryland ..........................................................
29
675
Southern States—
Virginia ............................................................
North C a rolin a .................................................
South C a rolin a .................................................
Georgia ..............................................................
Florida ..............................................................
29
11
8
25
11
84
Total, $924,000,000, or about 52 per cent, of the National Banking
capital o f the United States.
In giving our views upon this situation, we are doing, as we under
stand it, only that which the Committee invites us to do, as before
stated, and chiefly because it has an intimate relation with our own
case. We, therefore, assume that the Atlantic Coast States, where the
Banking Capital essential to the operation of the System is heavily
concentrated, are entitled to, and perhaps must have several Reserve
Banks, located according to the density of banking operations, so as
to carry out the purpose and spirit of the Act, and not disrupt or dis
turb the natural course of business and financial settlements.
It is accordingly natural to assume, as we look upon it, that the
greatest cities in that section will i-eceive the first consideration, and
these cities are, of course, in geographical order: Boston, New York
and Philadelphia. And if the selection of these cities will, as we be-
12
RICHMOND A S T H E L O C A T I O N O F
Her bank deposits have not been built up becau se o f any induce
ments which other competing cities do not offer.
She is a natural Reserve city.
The law governing V irginia State B anks req u ires no specified
amount of liabilities to be kept either in va u lt o r in o th e r banks.
The business of Richmond has flowed to h er fr o m oth er V irgin ia
points and from Southern and W estern S tates as a resu lt o f natural
causes governed by the trend o f business, the n um erous and unexcelled
means of communication as well as by the a ttra ction o f capital.
The industrial and commercial relations and needs o f this section
have developed these banking relations.
The customary trend o f business, fre e fr o m all extran eou s com
pelling influences, has developed these relation s, and the established
custom of keeping checking accounts has sim ply g ro w n up as a natural
result of everyday business transactions.
It is to be considered that the F ed era l R e se rv e A c t w ill, with its
new principles of Credit and R eserve, clea rin g and p a r o f exchange,
alter in a great measure the banking custom s and p ra ctices which have
grown up under the old law, and may, and p ro b a b ly w ill, revolutionize
some of the practices of banking.
The trend and flow of exchanges w ill be a ltered to the extent that
they have become artificial, and to the extent that they have been in
fluenced by the location of Reserve Centres, the requirem ents o f keep
ing reserve accounts, and the custom o f sustaining balances in order
to command credit.
It is altogether probable that results in m any cases w ill be o f an
astonishing nature.
It is one of the purposes o f the A ct to p rom ote fre e banking rela
tions, and under free banking relations it is clea rly a justifiable con
clusion that the service Richmond will have to p e r fo rm w ill be a greater
one because of being a natural trade, transportation and banking centre.
The law of physics is the law o f commerce— it w ill fo llo w the lines o f
least resistance. We will develop this point fu rth er on.
To further illustrate the natural flow o f business to V irg in ia and
Richmond—
The National Banks o f Richm ond
on October 21, 1913, had deposits
from other National Banks o f .........$ 7,500,000
Deposits from other State Banks, etc. 10,000,000
$
17,500,000
A F E D E R A L RESERVE BANK.
which compares with corresponding
totals for Georgia
North Carolina . . . .
South C a ro lin a ___
13
9.700.000
8. 200.000
6,200,000
These deposits were exceeded by no other southern State east of
the Mississippi river.
Illustrating the rapid growth and concentration of banking capital,
the resourcs o f Richmond banks were in—
1890
1903
1913
$ 14,000,000
32.000.000
74.000.000
Her clearings in1900
1912
175.000.000
424.000.000
Richmond ranks in bank clearings among the first thirty cities in
the United States, and compares with other southern cities as follows:
Washington
Richmond .
Atlanta . . .
$387,000,000
424.000.000
693.000.000
In the case of Richmond these clearings were for the city alone,
while in the case of Atlanta they cover the State with its 117 National
and 669 State Banks, with a few exceptions, and, as we understand, also
points in adjoining States; and furthermore, in addition to her local
clearings, Richmond handled $400,000,000 in checks and drafts on the
southern States named, making her clearings on the same principle,
as we think, practically $800,000,000.
Richmond’s banking relations with States south of her show the
great intimacy o f trade relations with these States, aud the statement
following sets forth in the most illuminating manner the custom and
trend o f business under existing conditions, and notwithstanding' the
present system of bank reserves:
(From Comptroller’s Report of 1912.)
Number o f State and National Banks in—
Virginia ..............................................
North Carolina ...................................
South Carolina ...................................
West V ir g in ia ....................................
Georgia ................................................
204
Florida ................................................
12
RICHMOND A S T H E L O C A T I O N O F
Her bank deposits have not been built u p b eca u se o f any induce
ments which other competing cities d o n ot o ffe r .
She is a natural Reserve city.
The law governing V irgin ia S tate B a n k s re q u ire s n o specified
amount of liabilities to be kept either in v a u lt o r in o th e r banks.
The business o f Richmond has flow ed to h e r fr o m oth er V irgin ia
points and from Southern and W estern S tates as a resu lt o f natural
causes governed by the trend o f business, the n um erou s an d unexcelled
means of communication as well as b y the a ttra ction o f capital.
The industrial and comm ercial relation s and n eeds o f this section
have developed these banking relations.
The customary trend o f business, fr e e fr o m a ll extran eou s com
pelling influences, has developed these rela tion s, and the established
custom of keeping checking accounts has sim p ly g r o w n u p as a natural
result of everyday business transactions.
It is to be considered that the F e d e ra l R e s e rv e A c t w ill, with its
new principles of Credit and R eserve, cle a rin g an d p a r o f exchange,
alter in a great measure the banking custom s an d p ra ctice s which have
grown up under the old law, and m ay, and p ro b a b ly w ill, revolutionize
some of the practices of banking.
The trend and flow o f exchanges w ill be a ltered to the extent that
they have become artificial, and to the extent th a t th ey h ave been in
fluenced by the location o f R eserve Centres, the requ irem en ts o f keep
ing reserve accounts, and the custom o f su staining balan ces in order
to command credit.
It is altogether probable that results in m an y cases w ill be o f an
astonishing nature.
It is one of the purposes o f the A c t to p rom ote fr e e banking rela
tions, and under free banking relations it is clea rly a justifiable con
clusion that the service Richmond will have to p e r fo rm w ill be a greater
one because of being a natural trade, tran sportation and banking centre.
The law of physics is the law o f comm erce— it w ill fo llo w the lines o f
least resistance. We will develop this poin t fu rth e r on.
To further illustrate the natural flow o f business to V irg in ia and
Richmond—
The National Banks o f R ichm ond
on October 21, 1913, had deposits
from other National Banks o f .........$ 7,500,000
Deposits from other State Banks, etc. 10,000,000
17,500,000
$
A F E D E R A L RESERVE BANK.
13
which compares with corresponding
totals for Georgia............................. ... 9,700,000
North C a ro lin a ........................................ 8,200,000
South Carolina .................................... ... 6,200,000
These deposits were exceeded by no other southern State east of
the Mississippi river.
Illustrating the rapid growth and concentration of banking capital,
the resourcs o f Richmond banks were in—
1890 .......................................................$ 14,000,000
1903 ....................................................... 32,000,000
1913
74,000,000
Her clearings in—
1900 ....................................................... 175,000,000
1912 ....................................................... 424,000,000
Richmond ranks in bank clearings among the first thirty cities in
the United States, and compares with other southern cities as follows:
Washington ....................................... $387,000,000
R ich m on d ........................................... 424,000,000
Atlanta ............................................... 693,000,000
In the case of Richmond these clearings were for the city alone,
while in the case of Atlanta they cover the State with its 117 National
and 669 State Banks, with a few exceptions, and, as we understand, also
points in adjoining States; and furthermore, in addition to her local
clearings, Richmond handled $400,000,000 in checks and drafts on the
southern States named, making her clearings on the same principle,
as we think, practically $800,000,000.
Richmond’s banking relations with States south of her show the
great intimacy of trade relations with these States, and the statement
following sets forth in the most illuminating manner the custom and
trend o f business under existing conditions, and notwithstanding the
present system of bank reserves:
(From Comptroller’s Report of 1912.)
Number o f State and National Banks in—
Virginia .............................................................. 380
North C a rolin a .................................................. 429
South C a rolin a.................................................. 346
West V ir g in ia .................................................... 29 <
Georgia ............................................................... ”60
Florida ................................................................
14
RICHMOND A S T H E LOCATION OF
Number o f awouuts carried in Richmond by banks from —
Virginia .................................................................528
North C a r o lin a .................................................... 397
South C a r o lin a .................................................... 182
West Virginia ..................................................... 82
Georgia ................................................................. 85
Florida ................................................................... 18
Maximum deposits carried by other banks in Richmond—
Virginia ................................................... $5,467,697
North C a r o lin a ...................................... 4,465,455
South Carolina ......................................
926,779
West V ir g in ia ........................................
1,793,838
Georgia .....................................................
440,115
142,918
F lorida .....................................................
Maximum loans by Richmond to other banks in 1913—
Virginia ................................................... $1,459,080
North C a r o lin a .......................................
2,200,480
South Carolina .......................................
2,423,915
W est Virginia .........................................
90,700
Georgia .....................................................
669,900
Florida .....................................................
79,750
Maximum deposits in Richmond to credit o f individuals, firms and
corporations in—
North C a r o lin a ....................................... $3,225,369
South C a r o lin a .......................................
1,416,997
Maximum loans made in Richmond in 1913 to individuals, firms
and corporations in—
North C a r o lin a ....................................... $5,245,451
South Carolina .......................................
3,129,815
Maximum deposits o f banks and individuals outside o f V irg in ia
in Richm ond banks—
North C a r o lin a ........................................ $7,690,820
South C a r o lin a ........................................
2,343,776
Maximum loans by Richmond to banks and individuals in—
North C a r o lin a ........................................ $7,445,931
South C a r o lin a ........................................
5,553,730
A F E D E R A L R E S E R V E BAN K.
15
S o that— banks, corporations and individuals outside of Richmond
carried on deposit in Richmond banks, $18,000,000.
I t w ill be observed that in Virginia the nnmber o f bank accounts
with Richm ond greatly exceeds the number o f banks in the State.
In North Carolina it nearly equals the number o f banks, and in
South Carolina and W est V irginia the number o f accounts in propor
tion to the number o f banks is very large.
R ichm ond’s loans to other southern States, and to individuals and
corporations in these States, aggregated nearly $14,000,000, a sum not
fa r short o f the aggregate borrowings and rediscounts on October 21,
1913, o f national banks in any six southern States, excluding Texas.
Richm ond lends practically all o f this capital in the South outside
o f Virginia. She does not use it herself.
She is a Credit Clearing House.
T o meet the demands fo r crop and other purposes, Richmond dur
ing 1913 shipped $14,000,000 in currency into this section.
In the volume o f corporate capital, upon the income o f which Vir
ginia pays to the Government a tax, she ranks easily first among all the
southern States.
V irginia
Texas ..
Georgia
$942,000,000
873.000.000
485.000.000
The amount Virginia pays to the support o f the Government in
Internal Revenue taxes is exceeded only by that o f the State of North
Carolina among all the southern States.
Virginia ........
North Carolina
Georgia ..
Alabama
Louisiana
Tennessee
$8,300,000
8.900.000
541.000
338.000
5,000,000
2.300.000
These comparisons are not given simply to show the commercial
importance o f the State o f Virginia and o f the City of Richmond, but
rather to set forth the volume o f business transactions ceutred iu
Richmond out o f which grow banking transactions and customs of
trade, and trend o f commerce and exchanges, and exchange of credits.
The jobbing and the manufacturing business o f Richmond a tv
RICHMOND A S TH E LOCATION O F
further practical illustrations that she is a trading and distributing
centre. Her jobbing business is $80,000,000, and the value o f her manu
factures $100,000,000.
5. Diversity of Industry and Agriculture.
As to diversity o f industry and agriculture in the district which
Richmond could serve better than any other location, it cannot perhaps
be better illustrated than by giving the annual value o f products o f
factories, farms, forests and mines, which are the principal divisions
of labor.
The business of the Southern States as represented by industry
in these divisions is as follows:
Factories ........................................$1,391,000,000
1,197,000,000
Farms
266,000,000
Forests
106,000,000
Mines .
Total values o f all products
as above .............................. $2,960,000,000
Dr. S. C. Mitchell, in his admirable paper read to you at the
hearing given Richmond, states that:
“ The diversity of interests in this region are as striking as its
natural and economic unit}’. ”
Perhaps in no other division of the Uniled States will you find
so great a variety of interests.”
Tbe developing character of the District is of equal importance.
Your Committee shares with us the knowledge that it is within little
more than two decades that this region began its real recovery from
utter prostration, and that now its rate of progress exceeds that o f
any other portion of the country,
Mr. O. P. Austin, whom we have previously quoted, estimates
tbe value of the merchandise handled in the district at $5,000,000,000,
or more than the entire ingoing and outgoing foreign commerce o f the
United States.
Richmond is today and probably always will be the chief tobacco
centre of the United States.
Four governments, or their chief tobacco interests, maintain the
headquarters of their buyers, or handle their business through
Richmond.
A F E D E R A L RESERVE BANK.
17
40 p er cent, o f the tobacco crop raised in Virginia, North Carolina
and South C arolina in 1913, came directly to Richmond fo r re-handling
and m anufacturing, and Richmond banks supplied the tobacco trade
o f Richm ond in exchange to the various tobacco markets, and paid out
in Richm ond in 1913 the enormous sum o f $53,000,000, or 88 per cent,
o f the total value o f the crop in North Carolina, South Carolina and
Virginia.
A considerable portion o f this sum, however, was sent, to Kentucky
and W est V irginia.
O f the total collections o f internal revenue by the Government
from tobacco in its various form s fo r the year 1912, 20 per cent, was
collected from territory within ti radius o f eight hours from Richmond.
A s to diversity o f erops o f tlx* District, in their effect upon the
demands f o r credit and e n r r e n e jt f— Richmond being situated at the
northern limit o f the district, occupies this iucontestihle advantage
as a Federal R eserve Bank location— The climatic differences o f the
Southern States in their effect upon crop development come in orderly
rotation up to V irginia. The demands upon the Federal Reserve Bank
o f Richm ond would be uniform and continuous.
The peak o f the load would doubtless be in the fall, but that would
be the case everywhere else, and it is the purpose o f the new law to
provide fo r it.
Further illustrating the diversity o f crop and industrial conditions
in this district— the railroads serving it are at present among the most
prosperous in the country. W e do not know how to account for it on
any other basis than the diversity o f interests and the consequent
absence o f any general depression.
A dded to her advantages fo r assembling and manufacturing the
products o f industry, her facilities fo r distribution heretofore described
are positively unsurpassed by any other southern city.
W e will give yon a very recent concrete instance.
One o f the very large corporations o f this country, with headquar
ters at St. Louis, has ju st selected Richmond as one o f two depot* on
the Atlantic Seaboard most advantageously located fo r the storage and
distribution o f its products— New York being the other point.
Richmond is a R eserve Centre o f products.
6.
Capital Resources o f the District.
A s to the confines and capital resources o f the district o f which
Richmond is the logical and most advantageous location for a Federal
Reserve B a n k :
18
RICHMOND AS THE LOCATION OF
The rules laid down by the Organization Committee for their guid
ance are so just and wise that all men must acquiesce in and approve
them.
Under the language of the law, and the spirit and purpose o f the
Act, we believe that the natural territory o f a district,—considering
geographical convenience, natural boundaries, ease and quickness o f
communication and transportation—as great diversity of industry and
agriculture as may be found anywhere, natural trend o f business and
exchanges, the banking customs and trade relations o f a majority por
tion of the territory, the desires of a majority portion o f the people,—is
embraced in the zone mapped out to be served by a Federal Bank lo
cated in Richmond; namely—
Virginia,
North Carolina,
South Carolina,
Georgia,
Florida,
Southern part o f West Virginia,
Part of Eastern Tennessee,
Part of Eastern Kentucky.
These States have adequate national bank resources to contribute
the necessary capital and reserves for a Regional Bank.
They also have a strong system of State banks, which would add
largely to resources should these banks elect to enter the System, which
possibly may not be counted upon in time for organization of the Fed
eral Banks.
National banking capital in the proposed district according to the
Comptroller’s figures October 21,1913—
Capital
and
Surplus
Capital Subscribed
to Federal
Reserve Bank
Virginia ........... ,, $ 29,300,000
North Carolina . . . . .
11,300,000
South Carolina .
8,500,000
Georgia ............
22,900,000
Florida ............ .......
10,600,000
West Virginia, onehalf .....................
8,300,000
East Tennessee
8,300,000
East Kentucky .......
1,300,000
$1,758,000
678,000
510,000
1,374,000
636,000
$100,500,000
$6,030,000
498,000
498,000
78,000
A F E D E R A L R E S ER V E BANK.
19
The total capital and surplus o f the State banks in the States
named, including one-half o f W est Virginia, omitting for the moment
those portions o f Kentucky and Tennessee included in the zone, is
$68,000,000.
Now as to the net deposits requiring reserves:
Net Deposits
Virginia ..............................................
North C a r o lin a .................................
South C a r o lin a ..................................
Georgia ................................................
F lorida ................................................
W est Virginia— say one-half..........
$100,000,000
36,000,000
23,000,000
50,000,000
33,000,000
29,000,000
Total net deposits .................. $271,000,000,
not taking into account the portions o f Tennessee and Kentucky, in
cluded in the district, fo r lack o f Comptroller’s figures.
C lassifying these as country banks, the amount o f Reserve
required to be kept in the Federal Reserve Bank, under full operation
o f the act would be—
say 5 per cent., o r ..................................$13,000,000
Government deposits divided in pro
portion to the capital involved
would probably be, say, 6 per
cent, o r ............................................... 9,000,000
State banks might swell the amount
say ....................................................
2,000,000
Full paid capital ..................................
6,000,000
Total probable resources............$30,000,000
Omitting from consideration the note issuing powers of the bank, the
resources would serve as a basis fo r the expansion o f credit in the usual
way to possibly $75,000,000.
It is considered by many that the credit business o f these banks
will fa r overshadow the note issue business, and we share that view.
Now the banking power o f these banks is not to be measured solely
by capital resources, but by their ability to acquire gold, and to build
20
RICHMOND AS THE LOCATIO N OF
up deposits and loans in the usual way upon their resevw s a* a bas<\
and also by their note issue power upon this base.
It is estimated that the floating supply o f gold or its representative
in this country not in banks is approximately $800,000,000, doing duty
as currency, or hoarded.
It is certainly not performing its greatest economic function as
currency.
In Federal Reserve Banks it would serve as the basis fo r two and
one-half times its volume in a safe and sound currency, and it is clear
that here is a large source of gold supply.
It is probable that with stable banking conditions, as one beneficial
result of the act, gold will to a large extent cease to be boarded; and
gradually come from hiding.
The total amount of borrowings and re-discount,s o f all the
Southern States, excluding Texas, was on October 21, 1913, about
$40,000,000, and of the States named $25,000,000.
It is clear that the resources of a Federal Reserve Bank in the dis
trict mapped out would be entirely adequate to serve the district.
Furthermore— It is to be borne in mind that the reserve figured
upon is the minimum reserve,— and if the banks make any use whatever
of the Federal Banks they will be compelled to keep more o f their
reserve with them.
The area covered would be about 250,000 square miles, and the
population about 10,000,000.
7. Wishes and Views of the Banks and People in the D istrict
and their Present Banking Connections.
In Virginia, out of a total of 437 banks, 404 have voted fo r R ich
mond as first choice.
In North Carolina, out of a total o f 486 banks, 373 have voted fo r
Richmond as first choice and 69 as second choice.
In South Carolina, out of a total of 405 banks, 82 have voted fo r
Richmond as first choice, and 122 as second choice, Columbia being o f
course first choice;—only 18 of the remaining banks in South Carolina
voted, and these were scattered.
The capital and deposits of the South Carolina banks voting first
for Richmond wore greater than those voting first fo r their own city—
Columbia.
A F E D E R A L R ESERVE BANK.
21
So that— out o f a total o f 1,328 banks in three States, of the number
voting, 863 gave Richmond as first choice and 191 gave Richmond as
second choice.
Elim inating Charlotte and Columbia, 1,002 banks out of a total
o f 1,328 in the three States regard Richmond as the proper location
of their Federal Reserve Bank.
In W est V irginia, in the southern half of the State, 49 banks have
selected Richmond as first choice, and 26 as second.
Richmond has been designated as the preferred location by firms
and individuals, outside o f Richmond as follow s:
Virginia .............................................................1,063
North Carolina ............................................... 870
South Carolina ............................................... 141
W est Virginia ................................................. 154
W e are therefore fully justified in the statement that there is a
very strong feeling in Virginia, North Carolina and South Carolina
that they must be included together in any zone which may be formed,
and that whatever territory may be incorporated in their zone, a
Federal Reserve Bank located in Richmond would serve their interests
better than i f located in any other city.
The interests o f these three States are too closely interwoven to
be separated.
I f any further corroboration can possibly be desired by the Com
mittee, we respectfully refer to the sentiments expressed by North
Carolina, South Carolina and also by West Virginia bankers at the
healing given Richmond in Washington on January 15th, and to the
exhibit o f resolutions, petitions, letters and telegrams accompanying
this brief.
W e respectfully submit that compliance with the letter and intent
o f tiie law, which declares that the Federal Reserve Districts shall be
determined with due regard to the convenience and customary course
o f business, would demand that these three States shall be kept
together in one district, so that their mutual trade and financial rela
tions may not be disrupted or disturbed.
The district we have outlined is the most perfect geographical
division o f the country that can be carved out. Nature has placed
her boundaries, sharply defining it. W e believe it is an equally perfect
economic unit. It is a political division equally sharply defined.
20
RICHMOND AS THE LOCATION OF
up deposits and loans in the usual way upon their reserves as a base,
and also by their note issue power upon this base.
It is estimated that the floating supply of gold or its representative
in this country not in banks is approximately $800,000,000, doing duty
as currency, or hoarded.
It is certainly not performing its greatest economic function as
currency.
In Federal Reserve Banks it would serve as the basis fo r two and
one-half times its volume in a safe and sound currency, and it is clear
that here is a large source of gold supply.
It is probable that with stable banking conditions, as one beneficial
result of the act, gold will to a large extent cease to be hoarded; and
gradually come from hiding.
The total amount of borrowings and re discounts of all the
Southern States, excluding Texas, was on October 21, 1913, about
$40,000,000, and of the States named $25,000,000.
It is clear that the resources of a Federal Reserve Bank in the dis
trict mapped out would be entirely adequate to serve the district.
Furthermore—It is to be borne in mind that the reserve figured
upon is the minimum reserve,— and if the banks make any use whatever
of the Federal Banks they will be compelled to keep more of their
reserve with them.
The area covered would be about 250,000 square miles, and the
population about 10,000,000.
7. Wishes and Views of the Banks and People in the District
and their Present Banking Connections.
In Virginia, out of a total of 437 banks, 404 have voted for Rich
mond as first choice.
In North Carolina, out of a total of 486 banks, 373 have voted for
Richmond as first choice and 69 as second choice.
In South Carolina, out of a total of 405 banks, 82 have voted for
Richmond as first choice, and 122 as second choice, Columbia being of
course first choice;—only 18 of the remaining banks in South Carolina
voted, and these were scattered.
The capital and deposits of the South Carolina banks voting first
for Richmond wf*re greater than those voting first for their own city—
Columbia.
A F E D E R A L R E S ER V E B A N K .
21
So that— out ot* a total o f 1,328 banks iu three States, of the number
voting, 863 gave Richm ond as first choice and 191 gave Richmond as
second choice.
Elim inating Charlotte and Columbia, 1,052 banks out of a total
of 1,328 in the three States regard Richmond as the proper location
of their F ederal R eserve Bank.
In W est V irginia, in the southern half of the State, 49 banks have
selected R ichm ond as first choice, and 26 as second.
Richm ond has been designated as the preferred location by firms
and individuals, outside o f Richmond as follow s:
Virginia
North Carolina
South Carolina
W est Virginia
1,063
870
141
154
We are therefore fully justified in the statement that there is a
very strong feeling in Virginia, North Carolina and South Carolina
that they must be included together in any zone which may be formed,
and that whatever territory may be incorporated in their zone, a
Federal Reserve Bank located in Richmond would serve their interests
better than if located in any other city.
The interests o f these three States are too closely interwoven to
be separated.
I f any further corroboration can possibly be desired by the Com
mittee, we respectfully refer to the sentiments expressed by North
Carolina, South Carolina and also by West Virginia bankers at the
hearing given Richm ond in Washington on January 15th, and to the
exhibit o f resolutions, petitions, letters and telegrams accompanying
this brief.
W e respectfully submit that compliance witli the letter and intent
o f the law, which declares that the Federal Reserve Districts shall be
determined with due regard to the convenience and customary course
o f business, would demand that these three States shall be kept
together in one district, so that their mutual trade and financial rela
tions may not be disrupted or disturbed.
The district we have outlined is the most perfect geographical
division o f the country that can be carved out. Nature has placed
her boundaries, sharply defining it. W e believe it is an equally perfect
economic unit. It is a political division equally sharply defined.
RICHMOND AH TH E LOCATION OF
The inhabitants are more homogenous than in any other division
or part of the United States. All o f these considerations have a prac
tical bearing.
Our crops and the credits based upon them, are distinctive, and
the management o f the Regional Bank should bear the closest rela
tion to, and have the closest familiarity with, the needs and customs
of the district. For this reason, as well as fo r all the foregoing reasons,
whatever territory may be added to this zone, the headquarters o f any
bank organized to serve the zone or any large part o f it, should not be
located north o f Richmond.
This position, and all o f these conclusions are separately and
independently confirmed, by the learned and experienced authorities,
Dr. S. C. Mitchell and 0. P. Austin, former Chief o f the Bureau o f
Statistics o f the Department o f Commerce, whose papers have been
filed with you.
Finally—
Why Richmond can better serve the zone mapped out than any
city in it, or any city in territory north o f Richmond which might be
added to the zone, and why Richmond may therefore be entitled to the
location o f a Federal Reserve Bank.
In the entire zone mapped out Virginia is the dominating State
financially, and Richmond clearly the dominating city. Since colonial
times Virginia has been the dominating State in the South.
Richmond has played a part far ahead o f any other city in the
zone in its development from a banking point o f view, an industrial
point o f view and a railroad point o f view.
Long ago Richmond found that in this zone she had a preferential
freight rate territory, and that in this territory the cities north o f
her could not compete on equal terms with Richmond. This prefer
ential territory extends through the zone described to southern Georgia
and Alabama and the eastern State line o f Mississippi.
It does not embrace the State o f Florida because of water com
petition. The territory is more graphically portrayed on the map
which accompanies.
The trade relations o f Richmond in this territory, out o f which
spring banking relations and settlements, must continue to grow, and
more and more exclude cities north o f Richmond.
The average first-class rate in the territory gives Richmond an
advantage over—we will say Baltimore, by way o f illustration, that
being the next large city o f commercial importance north o f Rich-
A F E D E R A L R E S E R V E BANK.
23
niond— gives Richm ond an advantage of 11 2-.10 cents per hundred
pounds, or approxim ately .1 per cent.
.3
This relative proportion in favor of Richmond applies to all
class and com m odity rates, and in some instances it is greater in
favor o f Richmond.
F or full details we refer to the statement of Mr. W. T. Reed,
President o f the Richmond Chamber o f Commerce, which statement
accompanies.
Commercial supremacy in this territory must go hand in hand
with banking suprem acy, particularly under a natural and free sys
tem o f banking.
Granting the selection o f this territory, or any large part of it, as
a zone, the advantage o f Richmond in point of time and distance in
dealing with the members o f the zone is so great as to exclude any
city north o f her from consideration; and the equal advantage of
Richmond as a clearing point between zones, for the same reasons,
would likewise exclude any northern city.
It is firm ljr to be borne in mind, as we understand, that the pur
pose o f the F ederal R eserve A ct is to afford additional banking facili
ties to the people, and that Federal Reserve Banks shall be so placed
as to best serve the people with reference to the operation of the
system as a whole. Should Federal Banks be placed in the three great
cities o f the E ast which we have named, that fact in itself, we believe,
would ju stly exclude from consideration the location of headquarters
o f another bank in any city north o f Richmond.
They are not intended to be local, and for that reason brandies
are provided, and due consideration is not generally given to the power
and facilities o f these branches.
It goes without saying that this zone mapped out will be provided
with these additional facilities, superior to any which they have here
tofore enjoyed, by the location o f a bank in Richmond, that branch
banks will answer local needs, and that the zone will be more inde
pendent o f the financial considerations which have bound it to large
money centres in the E a s t; and this, too, was intended, and can best be
brought about by the location o f a bank within the region described as
a natural division o f country.
Is there any man who doubts that, if State lines were obliterated
and the country apportioned in these geographical divisions, Rich
mond would by acclaim be chosen the capital of this division f
Although resting our claims upon the financial strength and the
RICHMOND AS THE LOCATION
economics of the situation, we have also those considerations in our
favor which are most powerful in moulding' the character and ideals
of a uation.
Richmond has a place in the affections of the South which no other
city possesses.
She has a place in the annals of the nation and the world which
is imperishable.
The debt of the nation to Virginia is inextinguishable.
It is difficult to see how this Republic could have been formed but
for Virginia.
Richmond lias that dignity of standing, that atmosphere o f senti
ment and history, that position in science and learning, which render
her worthy of any honor or distinction that can be bestowed upon her,
and the intelligent judgment of the whole country, having a knowledge
of these considerations, would approve the location o f a Federal
Reserve Bank in Richmond.
The names of Virginians will be associated for all time in the
financial history of this country with the Federal Reserve Act.
All of these considerations pre-eminently distinguish Richmond
as the location of a Federal Reserve Bank.
THE SOUTH ATLANTIC COASTAL PLAIN
A distin ct geographical and clim atic unit--Its products,
peculiar to its own soil and climate, should be
financed by m en acquainted with
local conditions.
(B y
P. A u s t i n , f i f t e e n y e a r s C h i e f o f th e U n ite d , S t a t e s B u r e a u of
S t a t i s t i c s ; S e c r e t a r y o f t h e N a t i o n a l G e o g r a p h i c S o c ie ty .)
0.
Nature has set aside the South Atlantic frontage of this continent
as a distinct and peculiar section, and lias given to it a class of products
which are peculiar to itself, and with the financing of which its own
people are m ore closely acquainted than those of any other section are
or can become. The Atlantic Coastal Plain, which in recent geological
ages emerged from beneath the ocean, stretches from New York south
ward to the G ulf o f M exico, and is shut off from the West by great
mountain ranges.
P E C U L IA R IT IE S OF PRODUCING POWER.
A t the northern end it is a narrow and sandy plain, but gradually
widening tow ard the South. A t about the point at which the Potomac
crosses it, it suddenly broadens to a width o f approximately 200 miles,
and at that point enter two new and important factors in its producing
power— a fertile soil and a genial climate.
E X P E R T TESTIM ONY AS TO SOILS.
P rof. J a y A . Bonsteel, a distinguished soil expert of the Department o f A griculture, in a general description of the soils of the United
States, which appeared in the 1911 edition of the official publications
o f the Department o f Agriculture, “ The Agricultural Year Book." and
in a similar discussion o f the soils contributing to the trucking system
o f the South Atlantic Coast, presented in the 1912 issue of that official
publication, says:
RICHMOND AS THE LOCATION
economies of the situation, we have also those considerations in our
favor which are most powerful in moulding the character and ideals
of a nation.
Richmond has a place in the affections o f the South which no other
city possesses.
She has a place in the annals o f the nation and the world which
is imperishable.
The debt of the nation to Virginia is inextinguishable.
It is difficult to see how this Republic could have been form ed but
for Virginia.
Richmond has that dignity of standing, that atmosphere o f senti
ment and history, that position in science and learning, which render
her worthy of any honor or distinction that can be bestowed upon her,
and the intelligent judgment of the whole country, having a knowledge*
of these considerations, would approve the location o f a Federal
Reserve Bank in Richmond.
The names of Virginians will be associated fo r all time in the
financial history of this country with the Federal Reserve Act.
All of these considerations pre-eminently distinguish Richmond
as the location of a Federal Reserve Bank.
THE SOUTH ATLANTIC COASTAL PLAIN
A d istin ct geographical and clim atic unit--Its products,
peculiar to its own soil and climate, should be
financed by m en acquainted with
local conditions.
( B y 0 . P. A u s t i n , f i f t e e n y e a r s C h i e f o f t h e U n i t e d S t a t e s B u r e a u o f
S t a t i s t i c s ; S e c r e t a r y o f t h e N a t i o n a l G e o g r a p h i c S o c ie ty .)
Nature has set aside the South Atlantic frontage of this continent
as a distinct and peculiar section, and lias given to it a class of products
which are peculiar to itself, and with the financing of which its own
people are m ore closely acquainted than those of any other section are
or can become. The Atlantic Coastal Plain, which in recent geological
ages em erged from beneath the ocean, stretches from New York south
ward to the G ulf o f M exico, and is shut off from the West by great
mountain ranges.
P E C U L IA R IT IE S OF PRODUCING POWER.
A t the northern end it is a narrow and sandy plain, but gradually
widening tow ard the South. A t about the point at which the Potomac
crosses it, it suddenly broadens to a width o f approximately 200 miles,
and at that point enter two new and important factors in its producing
power— a fertile soil and a genial climate.
E X P E R T TESTIM ONY AS TO SOILS.
P ro f. J a y A . Bonsteel, a distinguished soil expert o f the Depart
ment o f A griculture, in a general description of the soils of the United
States, which appeared in the 1911 edition o f the official publications
o f the Department o f Agriculture, “ The Agricultural Year Book,” and
iii a similar discussion o f the soils contributing to the trucking system
o f the South A tlantic Coast, presented in the 1912 issue of that official
publication, s a y s :
26
RICHMOND A S THE LOCATION OF
“ The Norfolk Fine Sandy Loam extends from Eastern Virginia
southward along the Atlantic coast to Florida and thence westward.
Among all the truck soils in use or available along the Middle Atlantic
Coast, the Norfolk fine sandy loam easily occupies the premier place
both with regard to its total extent and its wide range o f possible prod
ucts. It has been formed as a sedimentary deposit, laid down under
the waters o f a more extended marine occupation, and later elevated
to become a portion o f the present land area.
AN IDEAL SOIL FOB M ABKET GARDENING.
Physically it is almost ideally constituted fo r the intensive grow
ing of crops. It is o f prime importance fo r the production o f vege
tables and small fruit. In the eastern counties o f Virginia and North
Carolina it is also used for the production o f corn, winter oats, peanuts,
and bright cigarette tobacco, and from the southern boundary o f V ir
ginia to Texas it is highly prized as a cotton soil. Where local trans
portation facilities are adequate it is intensively farmed fo r the
production of vegetables and small fruits for shipment to northern
markets.
PRESENT PRODUCTS M AY BE HAN'T TIMES MULTIPLIED.
Soil surveys throughout this region have encountered a total area
of 4,346,000 acres of this soil, and it is possible that 20 million acres
will be found to exist. Not one-tenth o f one per cent, o f this total area
is now occupied for truck farming, and it is probable that not 25 per
cent, is now used for any agricultural purposes other than grazing.”
EXPERT TESTIMONY A 8 TO CLIMATE.
These extracts from official descriptions of the peculiar soil factor
in the producing power of this section should be considered in con
junction with that other important factor, climatic conditions.
A GBEAT OUT OF D00B 8 GREENHOUSE.
That the conditions of climate are as peculiar as those o f soil and
equally effective in developing a production different from that o f
other parts of the country is also indicated by Professor Bonsteel in
hi.* 1012 discussion, in which lie describes this coastal frontage as
• a great out of doors greenhouse,” and, in another place, “ the great
‘
winter garden which supplies the cities o f the northeastern States with
fresh vegetables demanded for consumption during the later months
of winter and those of early spring.”
A F E D E R A L RESERVE BANK.
27
THE GULF STREAM A FACTOR IN PRODUCING POWER.
This peculiar condition o f climate and thus of producing power
he attributes in part to the presence o f the Gulf Stream, which, as is
well known, flows close to the Atlantic Coast as far north as Cape
Hatteras, but leaves the Coast at that point, moving in a northeast
wardly direction across the Atlantic.
A TROPICAL AND SUB-TROPICAL CLIMATE.
The peculiarities o f climate (and, therefore, of the producing
power) o f this section are also pointed out in the International Ency
clopedia, edited by that great scholar and educator, the late Daniel
Coit Gilman, fo r twenty-five years the President of Johns Hopkins
University, which says: “ The United States has been divided into
eight (climatic) sections; two o f these are tropical, Florida and Texas;
two are sub-tropical, including the coast States from Texas to Virginia
and the California region; the other four sections are temperate or
boreal.’ '
IT S PRODUCTS REQUIRE FINANCING FROM W IT H IN THIS AREA.
These statements from two distinguished authorities regarding
the peculiar characteristics o f the South Atlantic frontage in the great
factors o f production, soil, and climate, are presented with the purpose
o f sustaining the statement already made by us, that the chief products
o f this section, which must prove the basis o f its requirements for
credit and currency, are peculiar to this section, and would be much
better understood in their relation to credit and to currency require
ments by the officers o f a bank located within that section than would
be possible elsewhere.
A N A R E A OF PECULIAR AND VARIED PRODUCTION.
What are the products o f this section which nature has thus set
aside with a peculiar soil and climate, and, therefore, a class o f prod
ucts to itself? Beginning at the South, we may name sea island cotton,
approximately 7 million dollars; phosphates, about 10 million; pea
nuts, 15 m illion; turpentine and rosin, 30 million; cotton seed oil and
cake, approximately 45 million; fruits, 15 million; tobacco, 32 million;
vegetables, exclusive o f potatoes, 36 million; sweet potatoes, 15 million;
products o f the mines, 100 million; animals, sold or slaughtered on
farms, 92 millions; all cereals, 167 millions; cotton, 255 millions; all
farm crops, 690 millions; all manufactures, 987 millions; these being
in nearly all cases the figures o f the census o f 1909.
28
RICHMOND AS THE LOCATION OF
THE WORLD’S CHIEF PRODUCER OF IMPORTANT ARTICLES OF COMMERCE.
It will be seen that a large proportion of the articles produced in
these six States are intensely local, the product of the peculiar soil and
sub-tropical climate referred to by the distinguished scholars already
quoted. The United States is now one of the principal spongeproducing and exporting countries of the world, and practically all of
this produce is peculiar to the coast o f Florida. We are the world’s
largest producers of turpentine and rosin, and practically all o f our
output is produced in Florida and Georgia. Our sea island cotton is
famed the world over, and practically all of it is produced along the
extreme South Atlantic Coast. Of the 23 million dollars worth of
citrus fruits produced in the United States, nearly one-third are grown
in Florida. The United States is the world’s largest producer o f rock
phosphates, and most of this is now mined in the State of Florida.
The value of peanuts produced in the United States increased from
714 million dollars in 1899 to 18% millions in 1909, and 78 per cent, of
these were produced in Virginia, North Carolina, Georgia and Florida.
Of the approximately 120 million dollars' worth of cotton seed oil and
meal produced in the United States in 1909, more than one-third was
the product of Virginia, North Carolina, South Carolina and Georgia.
Of the one billion pounds of tobacco grown in the United States in
1909, practically one-third was the product of the six States—Virginia,
West Virginia, North and South Carolina, Georgia and Florida.
VALUE OF ITS DISTINCTLY LOCAL PRODUCTS $500,000,000 FES ANNUM.
The value of these distinctively tropical or sub-tropical products
of this section is, stated in round terms, 450 million dollars per annum;
sea island cotton, 7 million dollars; citrus fruits, 6 millions; sugar,
3 millions; dry peas, 3 millions; peanuts, 15 millions; sweet potatoes,
15 millions; turpentine and rosin, 30 millions; vegetables, 36 millions;
fruits, 15 million; small fruits, 4 million; tobacco, 32 million; cotton
seed oil and meal, 45 million; cotton, 255 million; while, if we add
to these the phosphates and sponges of Florida, and other land and
water products peculiar to that section, we get a grand total of ap
proximately 500 million dollars’ worth of products distinctly tropical
or sub-tropical in character.
ITS PRODUCTS SHOULD BE FINANCED FROM W ITHIN ITS OWN AREA.
The fact that the grand total of the production of this section is
made up of a large number of articles not closely related to each other,
A F E D E R A L RESERVE BANK.
but having fo r each a distinctive characteristic as to production and
use, intensifies the importance of selecting some convenient point well
within that section as the locus of the Reserve bank for the district.
While the economic methods of the South as a whole have been criti
cized upon the ground that it does not sufficiently diversify its prod
ucts, such charge cannot be sustained with reference to the area which
we are bringing to your attention. One of the speakers who appeared
before your honorable body, a gentleman of high standing in the finan
cial circles o f the capital city o f the nation, remarked that one of the
objects o f this law is to decentralize reserves as they now exist and
distribute them among several reservoirs, each reservoir to be located
with regard to the due convenience o f a district wherein a great num
ber o f diversified industries are carried on, to build up every branch
o f industry and commerce; a suggestion which, we submit, applies
with great force to the South Atlantic section as one having great
diversity o f production, and to Richmond as the natural center of the
finance and commerce growing out of such production.
RICHMOND A N IDEAL FINANCIAL CENTER OF THE DISTRICT.
That this great mass of distinctively southern products can be
more intelligently understood and financed from a distinctively south
ern city cannot be doubted. Not only would Richmond be conveniently
located fo r the prompt transmission o f mails and expressage to the
section in which this great mass o f products originates, but the ac
quaintance o f her people with the peculiar products in question—the
phosphates, the naval stores, the peanut crop, the tropical fruits, the
tobacco, the cotton seed oil and meal, and the sea island and upland
cotton, their seasons o f growth and preparation for market—all these
would be better understood and the interests of their producers better
served from Richmond than Washington, which has no active business
relation with the producing, manufacturing, or commercial interests,
or from Baltimore, which is still farther removed from the area of
the chief production o f these peculiar and distinctively “ local”
products.
VOLUME OF LOCAL BUSINESS REQUIRES A RESERVE BANK.
The section lying south o f the Potomac and east o f the Appa
lachians is amply sufficient in area, population, and the value of its
products fo r the service of a regional bank. The population o f the
six States which we propose as that section—Virginia, West Virginia,
30
RICHMOND AS THE LOCATION OF
North Carolina, South Carolina, Georgia and Florida—is, in round
numbers, 11 millions by the census o f 1910; the value o f its farm
property, 2y2 billion dollars; its capital invested in manufactures,
over one billion dollars; the products o f its manufactures, nearly one
billion dollars in 1909, and now much more than one billion; the value
of its farm crops, by the census of 1909, 690 million dollars; the prod
uct of its mines, 100 million dollars; the length o f its railways, 29,000
miles; and the navigable mileage of its rivers, over 5,000 miles, or
one-fifth of the total of the United States. The officers o f the W ar
Department in charge of the 105 river and harbor works on its water
frontage from the Upper Potomac to the western coast of Florida, re
port the value o f the water-borne freight traffic at those places in
1912 at the enormous sum o f $1,680,000,000, of which about one-half o f
which is at Hampton Roads.
VALUE OP MERCHANDISE HANDLED $5,000,000,000 P E R ANNUM.
The census o f 1910 placed the value o f the manufactures o f this
area at 987 million dollars; the farm crops at 688 million; the prod
ucts of the mines, 100 million; the farm animals slaughtered or sold,
92 million dollars; and, adding a reasonable estimate for the products
of the forests and fisheries, the total production o f the area in that
year may be set down at nearly 2 billion dollars, indicating that the
annual value of its various products at the present time is more than
2V; billion dollars. Most of this 21/0 billion dollars’ worth of annual
products is moved from the place of production to other parts
of the country or to other sections of the world, and in their stead
there is purchased about an equal value o f other merchandise, suggest
ing that the value of the merchandise handled in this district in a single
year is approximately 5 billion dollars, or more than the entire foreign
commerce of the United States.
BUSINESS OF THIS A R E A IS R A P ID L Y IN C R E A SIN G .
That this enormous total of 5 billion dollars’ worth of merchandise
annually handled in this section is likely to grow very rapidly, is
apparent from the figures of actual growth during recent periods.
The total value of the manufactures produced in these six States
increased 123 per cent, from 1899 to 1909, while the gain in all other
parts of the country was but SO per cent. The value of all farm crops
in these States increased 120 per cent, for the period from 1899 to
1909, while that in other parts of the country increased but 83 per cent.
A F E D E R A L R E S E R V E RANK.
3)
The coal production o f this area increased 250 per cent, in the ten-year
period, while that o f the country as a whole only doubled. The capital
invested in manufacturing in these (States increased 171 per ceut. from
1899 to 1909, while the gain in the whole manufacturing capital of tli<
*
country was but 105 per cent. The wages and salaries paid in manufac
turing increased 123 per cent., while that in other parts o f the country
increased but 80 per cent. The railroad mileage increased 70 per cent,
from 1890 to 1911, and in the otlier portions o f the country increased
but 47 per cent. The internal revenue paid increased from 10 V- million
dollars in 1903 to 21 millions in 1912, a gain o f 100 per cent., while the
gain in the other parts o f the country was but 40 per cent, in the same
period. The estimated true value o f all property as shown by the
United States Census increased from 4 billion dollars in 1900 to over
5 billion in 1904, an increase o f 26 per cen t, while the increase in other
parts o f the country was but 21 per cent. The total indebtedness less
sinking fund o f these six States was according to the United States
Census, 94 million dollars in 1890, and 100 million in 1902, an increase
o f less than 7 per cent., while the indebtedness o f other States o f the
Union showed an increase o f 64 per cent, in the same period. The
average per capita indebtedness o f these six States fell from $12.82
fo r each individual in 1890 to $11.02 in 1902, while that o f the country
as a whole increased from $18.16 per capita in 1890 to $23.73 in 1902.
The expenditures on public roads in these six States now aggregate
about 15 million dollars per annum, a fact which in itself promises
great development o f its agricultural power.
A LL GREAT INDUSTRIES REPRESENTED IN THIS REGION.
The value o f the three great products o f this section,— agriculture,
manufactures and mining—are quite evenly distributed in proportion
to the products o f the entire United States. The farm crops o f the
section in question form ed in 1909 about 12 per cent, o f those o f the
entire United States, the manufactures about 5 per cent., and the
minerals approximately 5 per cent, o f those o f the entire United
States.
FOREIGN COMMERCE OF THIS A R E A R A PID LY GROWING.
The value o f the foreign commerce o f the frontage from the mouth
o f the Potomac to the western coast o f Florida is now approximately
150 million dollars, and shows a rapid growth when compared with
other sections o f the country. At Norfolk and Newport News
m
RICHMOND A S TE E LOCATION OF
especially, lying as they do at that great natural harbor of the United
States—Hampton Roads—the exports of the fiscal year 1913 show a
remarkable growth, having practically doubled in the past two years.
A GATEWAY FOB THE PRODUCTS OF THB MISSISSIPPI VALLEY.
The possibilities o f this great harbor in becoming the natural
gateway for the Mississippi Valley, with its enormous production fo r
foreign markets and consumption o f foreign merchandise, are w orthy
of serious attention in considering the future possibilities and p roba
bilities of the commerce and commercial requirements o f this section.
With two great railway lines now transporting to this p ort the
merchandise of the upper Mississippi Valley, over remarkably easy
grades and free from the interruption o f a northern winter climate,
it may be expected that the remarkable growth o f recent years will
be continued.
A SHIP CANAL POSSIBILITY.
Still another possibility o f an enormous increase in the foreign
commerce o f Hampton Roads is found in the suggestion o f a ship canal
to connect the Great Lakes with the Atlantic Ocean. Our experience
at Panama has demonstrated the ability o f our country and its
engineers in opening a passageway fo r ocean vessels through a country
where the natural obstacles are much greater than those which lie
between the Atlantic and the Great Lakes, and i f the Government o f
the United States should see fit to utilize fo r this great enterprise, the
men and machinery which have accomplished the work at Panama, the
route from Hampton Roads, along the lines suggested by George
Washington to the Ohio River and thence to the Great Lakes, would
be worthy of serious consideration, and if adopted, make this the gate
way for the outflow of the products o f that greatest producing section
of the world—the Mississippi Valley, and the route by which it would
in turn receive its requirements from foreign countries.
PANAMA CANAL WILL INCREASE TRADE AND CURRENCY REQUIREMENTS.
The Panama Canal will, when opened to commerce, immediately
stimulate the coastal trade of this section. A t present a narrow strip
of country along the Atlantic frontage sends its merchandise fo r the
Pacific Coast by water by way o f the trans-isthmian railways, which
demand for their service one-third o f the entire coast to coast charges,
the annual volume of that trans-isthmian traffic between the Atlantic
A F E D E R A L R E SE R V E B AN K.
33
and Pacific Coasts being now more than 100 million dollars per annum.
With the possibility o f passing the products of the eastern and western
coasts across the Isthmus without the cost of rail movement, the
volume o f this traffic between the Atlantic and Pacific Coasts will
greatly increase. In addition to this, the export of our manufactures
and agricultural products to the western coasts of South America,
and) in fact, to all the countries fronting on the Pacific, may be expected
to rapidly increase with the opening of the Canal, and thus greatly
enlarge the foreign commerce of this South Atlantic country, and the
requirements o f currency for that purpose.
SmOEABIZATIOH.
Now to sum up the great general facts as to the production, commerce and commercial possibilities o f the area in question.
The section o f country lying south of the Potomac and east of the
Appalachians is set aside by nature as a distinctive region by reason
o f its peculiar soil and climate and geographic surroundings, and has
therefore products peculiar to itself.
Its total products which aggregated nearly 2 billion dollars in
value in 1910 and more than that at the present time, are distributed
with remarkable uniformity among the three great industries: agri
culture, mining and manufactures; agricultural and mineral products
forming about one-half, and manufactures the other half o f this grand
total.
The agricultural products represent an unusually large variety
of articles which have their peculiar seasons o f maturity, and thus
co-operating with the manufacturing and mining industries in main
taining within the district a comparative uniformity and steadiness
o f demand for currency.
Approximately one-third o f these three great articles of commerce
—manufactures, farm crops, and minerals—are produced in the two
Northern States of the group—Virginia and West Virginia—and
approximately two-thirds in the four States lying to the South—North
Carolina, South Carolina, Georgia and Florida; but as most o f these
products o f the Southern States move toward the North, Richmond,
which lies within sixty miles o f the southern line of Virginia and on
the natural line o f the northward trend of commerce and communica
tion, becomes the natural center for the trade and finance of both
sections o f this natural region.
The productions o f this area may he expocted to increase with
34
RICHMOND AS THE LOCATION OF
great rapidity. Both manufacturing and agriculture showed in the
period of 1900-1910 a much larger percentage o f growth than that of
all other parts of the country, and with the greatly increased use of
water-power through the co-operation o f electricity the contribution
of the rivers of this section to its manufacturing power will rapidly
increase its industrial and commercial activities.
The foreign commerce of this section may be expected to rapidly
increase. The value of the merchandise exported from the ports from
the mouth of the Potomac to the western line of Florida is now
approximately 140ihillion dollars per annum, and those two cities at
the great natural harbor—Hampton Roads—have actually doubled
their exports in the last two years, suggesting that the possibilities
of this section as the gateway for the surplus products of the
Mississippi Valley should be given careful consideration in connection
with the financing of its prospective business.
The value of the merchandise passing over the waters of the
navigable rivers and harbors from the Potomac to the western
boundary of Florida was 1% billion dollars in 1912, the total value
of its own products in 1912 fully 2V billion dollars, and the value of
2
the commerce handled by it, approximately 5 billion dollars per annum,
and may be expected to increase with great rapidity in view of the
rapid growth which has characterized recent years.
Richmond is the natural railway center for the movement of this
commerce and its mail and express requirements with reference
thereto, having three trunk lines from the South, two from the West,
and two from the North, and a close communication with Norfolk,
with its western and southern lines.
MARYLAND AS A POSSIBLE FACTOR IN THE RESERVE ZONE.
While a portion of the State of Maryland lies geographically and
geologically within the South Atlantic coastal plain, the distinct area
proposed as the basis of a banking district, that State has not been
included in the proposed Federal Reserve Region, because of the fact
that its products are, as a whole, not of the distinctively tropical or
sub-tropical type which distinguishes those of the section further
South, where the presence of the Gulf Stream affects climatic condi
tions, and also because of the equally important fact that the trade
currents carry most of the commerce and therefore the finances of that
State towards the great commercial and financial centers at the North.
On the other hand, it has been thought proper to include West Virginia
A F E D E R A L RESERVE BANK.
35
in the proposed regional bank area, even though it lies outside the
coastal plain region, because o f the fact that the commerce and finances
o f a large part o f the State, especially the southern half, are distinctly
associated with those o f the Atlantic coastal plain, and with the State
o f V irginia and the city o f Richmond, a fact which is clearly shown
in the discussion o f present banking relations of Richmond with
surrounding territory.
It is proper to add, however, that a careful comparison of the
figures o f industry, production, and commerce of the two States,
Maryland and W est Virginia, when considered article by article and
item by item, show that a substitution of Maryland for West Virginia
in the statement o f products, manufactures and business conducted
would not materially change the total of the area as a whole, or
seriously affect the percentage of growth, or other evidence of pros
perity o f that area. The population of West Virginia in 1910 was
1,221,000, and that of Maryland was 1,295,000. The combined value
of the products of farm, factory and mine were, in West Virginia, 274
million dollars, and in Maryland, 366 million dollars; and the value
o f all farm property in West Virginia, 314 million dollars, and in
Maryland, 286 million dollars.
STATEMENT
Showing Freight Rates from Richmond to Southern West
Virginia, Eastern Kentucky, Eastern Tennessee,
North and South Carolina and Georgia; also
tonnage from Virginia cities into North
and South Carolina and Georgia.
(B y R ic h m o n d C h a m b e r
of
C o m m ebce , W il l ia m
T. R eed , President.)
The railroads serving the above-mentioned territory years ago rec
ognized 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 de
livery than Baltimore, or any city north o f us. In view o f this fact
the rates into this territory were fixed at an average approximately o f
13 per cent, lower than Baltimore. The average first-class rate in the
territory designated by the railroads as the natural territory to Rich
mond is 75 2-10 cents per hundred pounds, while the average first-class
rate to the same territory from Baltimore is 86 4-10 cents per hundred
pounds, giving Richmond an advantage on the first-class rate of 112-10
cents per hundred pounds, or approximately 13 per cent. This relative
proportion in favor o f Richmond applies to all class and commodity
rates, and, in some instances, it is greater in favor o f Richmond.
Attached herewith, on page 41, is a map clearly defining the terri
tory recognized by the transportation companies as Richmond's terri
tory, and in which the above-mentioned freight rates favorable to
Richmond apply. Attached, also, on page 40, are the actual rates
in groups o f cities in this respective territory, giving the respective
rates to these cities from Richmond and Baltimore. These cities are
chosen with respect to their prominence, and also with respect to their
proximity to the borders of the territory as designated l\v the map.
on page 41. Some o f the rates in the interior of this territory will even
show greater advantage to Richmond.
The Chamber begs to call attention further to the tonnage originat
ing at and forwarded to this southern territory. North and South t ’aro-
38
RICHMOND A S T H E LO C AT IO N
lina, Georgia and Florida, from the Virginia cities; Richmond, N orfolk,
Portsmouth, Suffolk, Petersburg, Lynchburg, Roanoke, Danville and
South Boston. The total tonnage from these cities fo r the year 1913
reaches the enormous amount o f 2,228,908 tons freight, and o f this
amount the tonnage from Richmond into this territory was 629,495 tons.
Owing to the limited time, and also to the fact that the tonnage
into Eastern Tennessee, Eastern Kentucky and Southern W est V ir
ginia had not been separated by the railroads from the tonnage to this
territory and points beyond our territory, we are unable to give the
actual tonnage to this portion o f our territory.
We have been unable to get the tonnage from Baltimore into R ich
mond’s territory, North and South Carolina, Georgia and F lorida, but
from such information as we have received we feel assured that any
statement Baltimore makes, that her tonnage exceeds, or even ap
proaches, the amount o f tonnage o f Richmond in the territory men
tioned, is a pretense, and, inasmuch as Baltimore made this claim before
the Honorable Committee at W ashington, it is incumbent upon the
Baltimore people to state their exact tonnage, as we have done, and
which we are prepared to verify.
STATEMENT OF RATES FROM BALTIMORE AND RICHMOND, SHOWING
DIFFERENCES IN FAVOR OF RICHMOND
IV
jiIm m
are chown with respect <o (lioir prominence aiul_ also with respect to their p roxim ity t o the bunlorn o f
the territory <Wi(Oliit«i on map.
C O L U M B IA , S. C.
RALEIUH, N. C .-O O L D S B O R O , N. C.
QREENSBORO, N. C .
, I I2 ; 3 | 4 ; S : *
I
Baltimore
Richmond
2 3 : 4
5
Baltim ore
Hichmond
78 67 55 143 37 28 24 i29 28 23 37 W 54
I'.l 51 42 132 2S 2) 17 *22 21 18 2ft 32 42
10 13 .ill
« 7
>
7 ‘ 7
7
7
9 J1
3
2
4
5
6
A
J. 6 5
K
B
C
H
E
iD
I
F
Baltim ore
27 129 <34 i Richm ond
21 22 24
• 5' 5 U
>
6
2
3
4
13 11
7 10
Richm ond
:85 74 61 49 42 32 25 31 30 27 42 49 58
6« 58 48 3s 33 25 18 24 23 20 33 38 46
«)
17 16 13 11
7
7
5
8
4
3
II
7
7
9
7
*
A
B C D
E H
F
9
8
8
7 10
ft
1
5 12 5 1)
MACON. O A .
6 A B C D E
iH F
5
F
89 7 5 >65 53 '43 34 ;20 39
j28 40 [51 55
76 '64 '56 45 |35 27 16 3(> 128 23 28 >42 .50
I
>
j 3 '• 2 . . . 8 J 2
1 | 4 |S
CHARLOTTE. N. C
HA M LET. N. C.
ABERDEEN N. C.
1
D E H
AU GU STA, O A.
>
•
>>
'< 46 38 33 27 • > 22 •• 20 I*7
55
46 3« :«) 2H 21 17 17 16} 15 n
0 10
C
12
NE1VBERN N. C.
i
B
'*> i75 ;#5 53 .43 34 20 30 29 28 ,40 :51 55
;76 164 jS» |80 41 34 18 ;27 ;24 21) |36 4S |44
___________!l3 11 : 6
n
A
6 A B C D E H F
2 . 4 4
S '6
A
B
C
D
E
55 62
184 79 |64 52 43 40 24 34 28 27 45 55 >55
ill
6 |l2 : 9
8 '. . .
8 10
4
4
4
C|D
E
111 J 2
A M E R IC U S , Q A .
FAYE TTEVILLE . N. <
1
3
2
I
5
4
6
A
B
C
D
H
E
F
B altim ore
Richm ond
85 74 61 49 39 26 24 20 19 16 39 39 36
68 58 4* 38 31 20 18 IS 17 14 31 31 34
8
17 16 13 11
6
2
6
2
2
8
8
2 ( 3 1 4 5 , 6
AIR
HI F
98 87 78 '63 52 111 34 i45 37 i36 55 57 72
98 87 78 ,63 52 41 34 -45 37 136 55 57 72
2
C H A R L E S T O N A N D H U N T IN G T O N , W . V A .
LU M BERTO N . N. C.
I
.
Baltimore
Richmond
I 2 3 4 5 6<A B C D e ! h F
---------------------------------.----------------------------------------| Baltim ore
92 81 « s 56 46 35 27 32132 27 475.56 58 j Richm ond
.80
fill 50 40 32 22 28 i25 22 41 47 50 j
12 II
8
6
6
3
5
4{ 7
5
6} 9
8
’ ~
LANES. S . C .
I
Baltimore
Richmond
2
i
4
5
6
A
! __
B C D E H
F
92 81 68 56 46 36} 27 32} 32 27 47} 58} 58
85 75 62 30 4*: 32 24 2!» 28 24 44 47 50
7
6
6
6
<
;
4} 3
3} 4
3
B altim ore
Richm ond
2
3
4
S
6
A
B
C
li
v,
6
5
I
3
3* 4
3
4
54 47
54
47 i
354
------------------------ --------- -
—
___ 1
1 — 2L_.
_. ;
:
3
4
SB
04
51
4‘
S
1
6
38
1
2
2
4
;
5
*
I
5
Baltim ore
, l<" ' ,'n,oml
3* 11* 8
5
1
2
3
K N O X V IL L E . T E N N E SSE E .
D ; E
H
F
92 kl 68 56 46 35 27 32*. 32 27 47} 56 58
85 75 02 50 41 34 24 29 28 24 44 47 50
7
i
L E X IN G T O N A N D L O U IS V IL L E . K E N T U C K Y .
'
O R A N G E B U R G .S . C.
I
2
3
3} 9
1
j
1
8
40
3
95
84
80
79
65
64
11
Itultimure
Richm ond
2
1
'
1
*
4
:
50
50
...........
•
* 1
45
43
2
1
37
37
v
J
t
MAP
SHOWING
RICHMOND’S PREFERENTIAL
FREIGHT RATE
TERRITORY
DISTANCE AND TIME TO RICHMOND
FROM THE FOLLOWING CITIES
Via S. A. L. Ry.
P ete rsbu rg iA . C . L .—
X . & - W ..........................
'
A lbe rta (V irgin ia n..............
)
L fiO o s s e iS o u .i....................
X o r lin a ................................
R a le ig h ................................
H am let iN . & 8. C a r . '. ........
C a m d e n...............................
C olu m bia iA . C . L.— S o u . i .. . .
D enm ark <A C . L .i..............
.
Savannah.............................
J a ck so n v ille
.........................
O c a la..................................
P a lm e t to.............................
H am let—C h ester ................
.
G reen w ood..........................
............
A thens iCen. o f G a .i
A tlanta iC . o f G a — S o u .....
.i
D ist. Tim e
22
61
79
9$
157
254
327
360
394
501
639
775
911
351
425
505
550
0:36
1:50
2:20
2:45
4:40
7:45
10:05
11:05
12:00
13:08
16:58
20:45
27:29
11:25
13:14
16:43
18:15
Via A. C. L. R . R .
Petersburg <X. 4 W .—
S . A . L . ........................... 22
52
J a rra tt?1
Virginian i..............
E m poria f.Southern'.............. 62
83
............
W eldon iS. A . L .i
R oek v M ou nt ...................... 119
.
W ils o n ................................. 136
244
W ilm in gton.......................
286
P em broke..
0:36
1:00
1-55
2:14
3:00
4:12
94)0
Flow1 ’<
1*
C h arleston
.Savannah i f .
Jaekm m ville 'F . E . C .—( ! . S.
683
4- F-—.s. A . I-.— Soil.) .
676
S t. A u p if t in c...............
M
P a la tk a . .
............ (K
Tampa
m
294 7:05
................. 396 lO M
o f (la .— S o u .)... 511 12:20
568 1625
640
.
A u gu sta .
1625
18:08
20:42
846 zm
443 14:20
Via Sou. Ry.
D ist. T im e
D anville...............................
G reen sboro..........................
Spartanburg.........................
G reen ville............................
Atlanta (C . o f G a.— S. A . L .)
Salisbury— A sh ev ille...........
.
M orristow n...........................
K n oxville (L . & N .— Tenn.
C en tra l)..........................
Y u X . & W .R y .
Petersbu rg (S . A . L .............
)
.
Burkeville (S o u .).................
L yn ch burg (Sou.— C .& 0 . ) . . .
R oanoke (V irgin ian.............
)
R ad fo rd (V irgin ian )..............
B luefield..............................
Via C . & O . R y .
Doswell (R . F . & P .)............
Gordonsville (S o n .)
..............
C harlottesville (S o u .)
...........
Basic (X . 4 \V.)...................
Staunton (B . & O .)...............
C lifton F o r g e
.......................
C o v in g to n ............................
Huntington (B . 4 0 .).........
V i.R .F .4 F .R « .
141
189
239
282
358
386
550
380
509
6:55
7:25
9:30
11:50
12:45
18:15
15:10
17:25
509 17:25
22 0:36
73 2:38
144 4:30
197 6:20
241 7:45
348 12:00
373 10:40
28 0:45
76 200
97 2:44
123 3:44
136 4:05
193 5:4C
147 601
205 6:08
272 8:10
369 11:00
419 12:10
17
24
F redericksburg
...................
W ashington........................
m
62
116
0:31
0:45
1:27
2:44
M AP
SH O W IN G
T IM E
BY R AILR OAD
FROM RICHMOND TO OTHER POINTS
IN REGION O U T LIN E D
NATIONAL AND STATE BANKS
_
Xum ber
Banking
X um ber
B ^
.
Number Bank
A c c o u n ts
C a r r ie d b y B a n k s
R ich m on d
T°»™
w ith A ccou n ts in
in R ic h m o n d
V ir g in ia .........................................
266
437
288
50 0
N o r t h C a r o l i n a ...................... ..
308
486
229
403
S o u t h C a r o lin a ..........................
222
405
122
181
W e s t V ir g in ia (16 C o s . >
........
40
95
61
82
T e n n e s s e e 1 10 C o s . ; ................
24
41
13
20
K e n tu e V v ' :io C o s .) .................
57
111
3
3
G e o r g i a .........................................
449
844
63
76
F l o r id a .
155
■257
14
15
.
44
RICHMOND POLL OF BANKS
Choice i Va.
Colum bia
S.C. W .Va.T enn.
4IS S i *2 ; 4»
J W 132 26
1st
R ichm ond
N.C.
2d
3d
1st
2d
3d
..........................
35
10
3
K y .G \.
Fla.
T ota ls
1335
li
102 1
102
9 111
1st
Atlanta
Id
3d
163
i
i
Savannah
C harlotte
1st
2d
3
d
!....... i
46
I i : 17
lit
Birmingham
B altim ore
2d
3d
1st
2d
3d
4 ........
1
4
11 i 55 7 11
.... 1 ...... 1
104
1st
Washington
2d
3d
Cincinnati
2d
Lou isville
3d
3d
Jacksonville
2d
3d
N ashville
2d
3d
Pittsburg
2d
1st
3d
10
•
,
1
3
j.
28
9
9 t (
....... 1
102
1st
1st
1st
1st
M
23
!
I
56
CAPITAL, SURPLUS, PROFITS AND DEPOSITS OF BANKS
VOTING FOR RICHMOND
STATE
Choice
Capital
Surplus and
j
Profits
Deposits
j
Virginia
1st
$30,011,097
$23,151,500
$163,645,126
North Carolina
1st
21
<
$14,542,770
2.203.100
$ 7.844.000
1.232.000
$ 81.996.650
8.190.000
South Carolina
1st
2l
<
$ 4.909,800
5.209.714
$ 2.966.000
2,753,800
$ 18,743,000
8.058,000
( ieori'ia
1st
2d
31
*
$
730.300
5,334,900
570.000
$ 278.000
3.482,200
653.000
%
Ut
$
320.000
1.895.000
245.000
$
74.000
586.000
262,000
$ 1,690,000
5.676,000
2,353,000
$ 2.561.000
2,909,175
350,000
$ 1.641.000
1,859,000
35.000
$ 4,084,000
12.775,000
507,000
Florida
21
<
31
<
West Virginia
• Cos..
1ft
1st
2.1
U
538,000
19,147,500
1,412,000
Tmiitem *J Co*..
O
1
*1
2.1
31
*
*
908,350
547.500
1.075.000
$ 423,300
234.000
359.000
$ 6,041,000
2,379,000
5,664,000
KVnlu<-ky
V Cos. •
>
21
<
31
*
1
450,000
5.725,000
t
118,000
3,113,372
$ 1.502,000
17,140,000
$52,065.172
$361.631,276
Total
T otal <'.•!(»)(al. Sttrpliw au*l Profit#,,
T otal iM-jttmitr .
$131,672,878
36! 631.270
PARTIAL LIST OF MAXIMUM DEPOSITS AND LOANS
OF RICHMOND BANKS IN 1913
M a x im u m D e p o s it s o f B a n k s f r o m
Virginia...................................
West Virginia.........................
fieorgia....................................
S5,467,679
1.793,838
440.115
North Carolina . . .
South Carolina. . . .
Floriila...............
$4,465,455
926.779
142.918
.
M a x i m u m L oan' s t o B a n k s in
Virginia...................................
West Virginia.........................
$1,459.08(1
{10,700
(ir o r g ia ........................................
WI9.900
North Carolina .
.South Carolina.
$2.‘JOO,4sO
2.423.M5
.
Floriila.
7!*.“ SI
M a x i m u m D e p o s i t s t o C k e m t o f I n m v i i >u \i .s . F i i i m s \n h C o k p o k v t i o n -. i v
North Carolina......................
S3.2£>,:DI!>
South Carolina..
t M li i 'i " ”
M a x i m u m L o a n s t o I n d i v i d u a l s . F i k m s a n i * C o k p o i , a t i <>.\» i x
North Carolina......................
S5.245.45l
South Carolina..
$3
M a x i m u m D e p o s i t s o f B a n k s \n i > I s m v i u c u . '
Smitlii'aruliiia.. .
North Carolina......................
$-.$4oT.*;
M a x i m u m L o a n s t o B v n k > \m> 1 n w \ i i *u u .»
North C a ro lin a ....................
$7 445.931
South Carolina . .
>5 533 7:*>
CHART SHOWING G R O W T H OF RICHMOND BANKS
*r< s t& £ ://v
* f//.£ ./o w s
DEPOSIT FLUCTUATIONS OF RICHMOND BANKS
M
STATEMENT OF CAPITAL, SURPLUS AND DEPOSITS OF
THE NATIONAL BANKS LOCATED IN THE
SOUTHEASTERN STATES
........ ---------------------------------
-
........ ..................
'
G r o s s D e p o s it s
S u r p lu s
C a p it a l
............
$1 7 ,6 0 0 ,0 0 0
W e s t V i r g i n i a ................
............
10 ,0 00 ,00 0
i
6 ,4 0 0 ,0 0 0
6 4 ,0 0 0 ,0 0 0
N o r t h C a r o l i n a ............
............
8 ,4 0 0 ,0 0 0
i
2 ,8 0 0 ,0 0 0
4 6 ,0 0 0 ,0 0 0
S o u t h C a r o lin a ..............
|
$ 1 1 3 ,0 0 0 ,0 0 0
V i r g i n i a .............................
|
$ 1 1 ,6 0 0 ,0 0 0
3 0 ,0 0 0 ,0 0 0
2 ,1 0 0 ,0 0 0
............
6 ,3 0 0 ,0 0 0
G e o r g i a ..............................
............
15 ,1 00 ,00 0
|
9 .3 0 0 ,0 0 0
6 3 ,0 0 0 ,0 0 0
F l o r i d a ..............................
............
7,5 0 0 ,0 0 0
!
3 ,0 0 0 ,0 0 0
4 0 ,0 0 0 ,0 0 0
A la b a m a ...........................
............
10 ,2 00 ,00 0
i
5 ,8 0 0 ,0 0 0
5 0 ,0 0 0 ,0 0 0
M is s is s ip p i ....................
............
3 .4 0 0 ,0 0 0
!
1 ,6 0 0 ,0 0 0
1 7 ,0 0 0 ,0 0 0
L o u is i a n a .........................
............
3 ,0 0 0 ,0 0 0
j
2 ,3 0 0 ,0 0 0
1 7 ,0 0 0 ,0 0 0
K e n t u c k y .........................
............
12 ,3 00 ,00 0
j
5 ,2 0 0 ,0 0 0
4 6 ,0 0 0 ,0 0 0
T e n n e s s e e .........................
............
13 ,2 00 ,00 0
;
5 ,5 0 0 ,0 0 0
7 8 ,0 0 0 ,0 0 0
C a p it a l a n d
Washington City..................
.................
Richmond. Va
Atlanta, Ga....................
C a p it a l a n d
Surplus National
Banks
Surplus State
Banks
$11,500,000
10,700,000
9 700 000
$16,200,000
7,300,000
7,!
52
Total
Deposits
$27,500,000
18,000,000
17,000,000
$83,000,000
53.000.000
35.000.000
M AP OF U. S. JUD IC IAL CIRCUITS
’ H Y S I C A i.M AIM )K
\IIKIl STATUS
.
r,c y,\t. of
MiU;'
.„v
; ’ • »" V
** >
' ,-*
v>'~
s
' ' ----S v'”
