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January 19-20. 1914



Law Reporting Company, Official Stenographers



Chicago, I l i a . , January 19th, 1914.
The Organization Committee met pursuant t o adjournment at 10:00 o'clock A.M., i a Room 603 Federal B u i l d i n g .
HARBY A. WHEELER, Tice-President of the Union Trust

A. C. BARTLETT, E i b b a r d , S p e n o e r , B a r t l e t t & Company.;
SOWS 6 . 3HBDI3, and


JAMES SDiPSQH, o f M a r s h a l l P i e l d & C o . ,


JOSEPH A. DS PRE3E, P r e s i d e n t , and
A. S. WSLTON, appearing f o r the Chicago A s s o c i a t i o n of Commerce.
C. 0 . PAlE3 t
W. T. KSHTOI, appearing for the Chioago Clearing
House A s e o c i a t i o a .

WILlIAii S . 3T03E,
P. F. B10S30M,





GiiOHGK 2 . PAGS, for Peoria Banks and Peoria Clearing House a s s o c i a t i o n ,
u I L L l ^ H. ABDSH303? Grand Rapids, i a c h . , appearing
for ?ourth national Bank.
E. L. 3TICZ1T2Y, iioulton, Iowa., appearing for
Pirat national Bonk,
J. C. iiASSBT?, Aterdaon, So. Dakota, appearing f o r
?or Minneapolis Civic and Commeroial A s s o c i a t i o n
and Clearing House A s s o c i a t i o n .
Federal Reserve Bank of St. Louis

S. a . TH0HP2, Ihorpe B r o t h e r s . ,
F. A, G203S,
£ . P. ni^LSOU,

0. M. EARKI3GI0S? Van Dusen, Harrington & Co.
H. A. SOEIT£Ht St. Anthony Falls Bank,
IESODOES WOLD, Soandanavian American Bank,
W. 1. HABEXS, Sen England Furniture Company,
s # P. EA^LSI, ?ars&ers & Mechanic a Savings Bank,

12 14


2H0J, H. H. HBSS, Eh. D., University of Wisconsin,

f Madison, Wiso.
H. M. HILL, Janney, Semple, H i l l , & Co.,


C. I . JATPUAT, F i r s t Eational Bank,

W# H. LEE, Hoxmepin Connty Savings Bank,


0 . £ # UCXIiniEY, Sioux P a l l s , Sou. Dakota.


J« B , PHALE2T, Sioux F a l l s , 3 o . Dakota,
HOVEY. C. CLARE, Minneapolis Lumber Oo.,


WMSSLXS U. 0R03BT, President Minneapolis Cham-

; o e r o f Ooaaeroe, and WaShlmrn Orosby 0 o . t



B. J. 7AIR7ISLS, Lindsay 3 r o s . , Agrioultural
£ , L. QAHPEJirSR, Shevilino Cooperative Lumber Co.,
f • A. OHAUBERLAIU, Seotffity Hatioaal Bank,
J032PH OIABiAJf, Vortnuestexn Hatioaal Bank,
?• 0* WX53S09, Security National Bank,
J, G. Uo HUOH, Uinneapolis Minn., for the Cham ber of Ooaneroe.
HA3HT 3* HELM, Minneapolis, Minn., for

RUSH e l l

Miller Milling Co., and Ohanber of Commerce.

ITLLIAii J. GBAY, Tio•-President, F i r s t Hational

lank* Detroit.

1 2 1 6-12 1 6

TRAI£ KPPER803, Tioe-Presidont, Iowa Bankers



JCHH Mo HUGH, President, First national Sank, Sioux
Qity, Iona.
W. U. DAVISt of Iowa City, Iowa, President, Jennie son Oonnty Savings Bank.
JQHI T. flliOirOH? Merchants national Bank* Gedar
Rapids, Iowa.

0. H. OiHBT, Presidant Ohioago Board of Trade,


J. M. nESQHBRT President, Drorera Sxohaags lationa:.


', Bank, Ohioago, U l e . ,
W. A* E3ATH, President, Exchange national Bank,
Ohioago, H i s ,

J . Q. R0UHD3, President, Oitisens national Bank,


f Pes Koines, Iowa*



J The Secretary of the Treasury:
iwll^. come to order*

Gentlemen, the meeting

The problem confronting this Committee

Is to divide the country into not less than eight er more
than twelve districts, as required by the Federal Bcaerve
Aot, and to looate within each one of those districts the
main office of a yederal Keserre Sank*

In doing this the

Committee has determined to hays these hearings throughout
the country, for the purpose of ascertaining on the ground,
as far as practicable, the faots relating to each district
land to the various eoraetmlties that are to be a erred.


Aet requires the Committee to hare due regard to convenience
and customary courses of business in determining the boundaries of these districts.

Ve should like, to hare the

witnesses address themselves, therefore, to aich faots
relating to the customary courses of business and exchange
and of Industry at will enable us to reach as Intelligent
a conolusien as possible; la the limited time at the disposal
of the Committee, because we hare to cover the whole country ,
we art unable to 11 sten to speeches*
want, no much as facts.

It i s not oratory we

And we shall hare to ask those who

come to present their oases to confine themselves as much
a s possible to those facts whioH are necessary to enable the


Committee to reach an intelligent conclusion.

I understand

that on behalf of Chicago we hare the Chicago Association of
Commerce which desires to be heard* Who w i l l represent them?

Mr. Harry A, fheeler:

I w i l l represent them at the

opening, Mr. Secretary*
The Secretary of the Treasury: Your full name and
business occupation*

Kr* wheeler: narry A* Wheeler, Vice-President of the
Union Trust Company, and rep re senting the Chicago Association of Commeroe Committee*
Gentlemen of the Committee, when the Chicago Association
of conmerce ascertained the dates on which this hearing was
to be held, a committee was appointed to enter into a caref u l study of Chicago»s trade territory, thinking that
pertiaps out of the commercial interests there ifrir DO a
showing «ade that would be of direct interest to you and of
some use in guiding your judgment with respect to the
geographical boundaries of Chicago's territory.
The Secretary of tae Treasury: -pardon me; before you
i f you
proceed,/hare such a amp we would like to hare i t before us*

Harry A# lheea*r«

Kr, Wheeler:
here now,

The nap w i l l be here and shouM hays been

i t i s nade up and before we finish our testimony

i t will be in.
I will outline to you the Banner in which i t has been

The Committee consists of JET. A, C. Bart let t,

of Hibbard, Spencer, 3art3*tt & Company; James Simpson of
|Ukrshall Field * Company; Mr. Homer A. StiUwell, of Butler
(Brothers; Kr. Joseph A. J>e Jree»et -president of the


?elation of Commerce, && Kr. A. D, Welton, forauerly of the
National Cttisens League, and the speaker.


Shis Committee

organised and iauudiately caused three hundred letters to

fbe sent to the leading branches of trade centred in Chicago,
[those houses best ab2* to represent the particular l i n e s
of trade that were being interrogated.

With each letter

sap was sent asking that they outline carefully on that
tap that territory from which more than 50 per cent of
their total sales or orders were reoeirod, or into which
territory more than £0 per cent of their product was d i s back
tribute** Replies came/from 1J0 of the 300, d e a r l y repreleutative of the best and the largest interests in 50
teparate lines of industry*

These 200 saps that were

•eturaed represent those «*preseions which can be put upon


Harry A. Ihteler.

j paper as to tho territory,

The other 50 replies were of

this character:

Jrom a large store neaufacturiag concern: "Twelve per
oeat of our volume of business i s la Iowa, tea per cent in

; I l l i n o i s , five per cant in Indiana, four per cent in
Xlnnesota, four per cent la Kentucky, four and one-ha If
; per oeat la Virginia, four per oeat la Tennessee, four per
oent in Ohio, fire aad three quarters per oeat in the State
I of Texas, alas per oeat la Missouri, two per cent in VIs; oonsln, three per esat la the pacific Coast States, with
1; percentages only slightly smaller in a U the other states
of the Uaioa*


i s Impossible fbr this company to indi-

oate any territory la which i t Is prominent "because i t s
sates i,n Iowa are greater than la I l l i n o i s , ia Texas they
are greater than la ¥isconoln,and Missouri oaly one per
oent smaller than the wjndthoa* state of the company."
VroM the igsuraao-e interest a came t h i s comment:


a l l of the large insuranoe oompanies operate generaB;
ageneles l a this c i t y , having Jurisdiction sad control of
the local afceats la t h i s field,

PremiUBSfor the insurance

DUB loess done ia these states are very largely remitted
to Chicago.

Tlie leases eeenrriag ia these various states

\ 0-5

Harry A. Wheeler.

: are paid "by drafts on Chicago "bank*, BO that the natural
, control of the insurance lrasiness in these state* centers
! rery largely in Chicago. •

Trom one of our large clothing houses, they say it i s
utterly impossible to define the territory ia which they
do business, and they say they are just as strong in Bew

: England and California as in Illinois, Iowa or other terri-

? tory.

Srem a large watoh factory i t develops that 62-3/2

I per cent of the product of that faotory, which i s a Tery

) largt onef i s sold to Jobbers within the states imniedlately
i bordering Chicago.

The Sscretary of the Treasury)

YOU night state for the

record new what states you have in your sdnd as related to
this district.
MT. Wheeler: We named ao states with respect to trade

We asked that to "be roltmtary from the

reoords of our respective houses.

But I can say to you

that the outline of the sap will take in the state of
Ifichigan — here w i l l he a B»P drawn with lines that will
show each particular return, multiplying the number of
l i n e s as that particular state was corered hy that industry,


Harry A. Iheeler


so the hea^ lines w i n show you the talk of the traffic,
and the light lines where they extend down over the country,
•where a more sparse distribution of commodities nay re at.
; But th&t nap w i n take in 3ttchigan, the entire lower portion^
' Ohio; and there i s a distinct division, one large group of '
i our;distributors going clear to ihe east "border of Ohio
j and the ether coming dovn through the centre of the state;

f and eo on across Indiana end I l l i n o i s , not taking the south*
• ern end of that state, and Iowa; a l i t t l e section of
f Missouri,and getting <!outi Into the Kansas and Colorado

territory, vhleh are Yery stong from Chicago; Heoraska

1 and that territory out there which will be outlined*


X hope yr, Walton w i l l oe here with this nap very quickly
Ve fcelicre, gent3nant that t h i s sap w i l l show you the
exaot trend of Chicago's coxsmeroe, end accurately.


purpose for which, t h i s map was procured was not to urge
an e&largeipart of Chicago's territory, in order to eater
late a scramble for a greater area than might ordinarily
cose to a contra like this, but In order that I t might be
aa actual showing, In order to clearly convey to your
Minds the real trend of commerce out of the City of Chicago,
and for that reason only.

Harry A. wheeler



The point that our people wish to make i s a desire to
serve the territory that i s tributary to this city; the
fact that Chicago has a large commercial territory i s due
j to transportation facilities, and these transportation
facilities have opened natural arteries over which commerce
must flow, and naturally the trend of the monetary relation
to a oomnmnity i s also over the sane channels end moves


neoesaarlV Into the commercial channels, and consequently i s

\ co-extensive with our commercial territory.


Sow here we have outlined a territory which Chicago
feels i s natural to i t , and controlled by it from a commercial point of view; and i f that territory seems to encroach
upon the boundaries that, in your own good judgment may
l i e with other regional associations which you say determine
upon, we are not i s the position of asking for an enlarged
territory for Chicago's sake.

The strength financially

of any b»k that might be established in this city, with
the natural territory that would belong to It, ev« if it
was Tory circumscribed, would undoubtedly give the regional
association in/strength ample for Its own needs or for the
needs of Its isuneUate territory,

we would also like to

SAT that the territory lying n«xt beyond, that i s not so

f 0-8

Harry A# Wheeler


favored perhaps In point of wealth, and whose "banking

resource* are t m l l e r and who must needs call upon a
wealthier or stronger district for support, If you give us
any part of that territory, i t will simply add to our
natural f a c i l i t i e s for service, and service In the territory that i s already looking to us, both as a distributing
centre for these coxuaeroial lines and also as an assistant
from i t s money point of view.

And beyond that, the

commercial Interests for which X think I can speak through
the Association of Commerce hare nothing to offer to you
beyond the illustration which we shall leave and the expression of hope that in your judgment you w i l l sake us as ser«
Ticeable as It i s possible for us to be to such a notion
of the country as would naturally come to us.
Vow our interests and this representation from the
Association of Commerce come from 4000 business* firms and
corporations, not Individuals; the Association does not
represent individual membership.


has a very 2arge

Interest to the we* snd northwest, and i t i s our obeerration, as we have occasion to disc use these natters with
merchants in the northwest, that their relations are
towards the east rather than towards the south; that their


Harry A. Wheeler.


I natural tendency i s to be related to an eastern market for

such assistance as thoy w i l l a&ays need, or for money
which they w i n need to carry on their business, rather


than to a southern market* Add we hare had In the As BO-



f elation appeals frost the organisations west to the Coast

asking that i t he seriously considered that i f they are not

. able to here a regional association of their own, tint
( they at least be related to the east rather than to the

\ south*

Z think that 1 s a l l X hare to say.

The Secretary of the treasury: Tour Association did not

X undertake, a s I understand you, to divide the country into

IP*, Wheel a*: Hot at all«
• The Secretary of the Treasury: o r t o n E i : e «°y euggestions
as to wh%t, in your judgment, would he the best division*
Mr* Iheeler:

sot at all*

They only "brought to you

the actual s t a t i s t i c a l facts froa t)» trades centred here
in Chicago, indicating the flow of commerce of t h i s city.
The Secretary of the Treasury: Without reference to the
(entire country?
I vr. ¥heelflrJ

Y«». • • took i t Ibr granted that you

would dlTlds that for



Harry A. Iheetor.



XT. Secretary, If I may make the suggest Ion as to the
order of call, wr. A. C. Bartlett has Just returned from
Boston* He i s to speak for the commercial interests; ar»
& Co.
John 0. Shedd, the president of Marshall Held/, w i l l take
Mr. Simpson*« place, and he Is preparing thi s morning some
i special figures which he thinks would he of interest to you

| relative to the distribution of certain lines of business*

(they say he slow in ooming orer here, but he w i l l "be here
5 and w i l l speak to thenu/

Mr. A» D. Wei ton, who i s preparing

| t h i s nap of which I spoke, wall be here shortly*
I Mr. Walton: The nap i s here now.

(The map was then laid before the Committee.)
10*. Wheeler! He will be the last representative of the

ABoociation of commerce, and w i l l explain the n*P i f

1 3 3 7.
Arthur D. Welton,

The Secretary of the Treasuryt Are you going to explain
this nap, Mr. Welton t
Mr. Welton: I believe I had better, I wae the manufacturer.
The'Secretary of the Treasury: Tour name, Mr. Welton ?
Mr. Weltont

Arthur D. Welton.

The Secretary of the Treasury! And your occupation ?
Mr. Welton: I an a newspaper man.
The Secretary of the Treasury! If you will explain this au
Mr. Weltont

Z have been connected with the National Citip

sens* League, as General Secretary, since the oourse of
this Eoyement, This map was the result of an effort on the
pact of a committee of the Chicago Association of Commerce
to ascertain from Chicago business men and Chicago business
interests the trend of trade out of Chicago.
The Chicago Association of Commerce has approximately
four thousand members, and these members are divided Into
subdivisions according to their occupations, and according
to the trade in which they are engaged. Xhere are some of
those subdivisions that, of course, are practically useless f!or

a 3b

Arthur D. Walton.

,; this purpose, beoause they Include lawyers and things of
( that kind, but in a general eray they are all engaged in manufaoturing or merchandise or other gainful occupations that
have a galue in the field of trade.
Out of about sixty of those subdivision, there were selected four representative concerns, and to them a letter was
addressed in which they were asked to indicate on a map that
I was enclosed the extent of the territory in which they though!
they dominated| or In which they sold fifty per cent or upwards of their product*
To those communications we had about 150 replies* I assume
that those 150 men selected in that way* or 150 concerns, are
fairly representative of about three thousand Chicago bueineap

On the individual maps enclosed they marked with

lines the territory in which they considered themselves dominant, and many of them made remarks In which they showed
that their businesses were very well organized, because many
of them gave the percentage of the trade in these various
fe gathered those maps all together, and without knowing

just what the result would be, we started to make a similar
number of lines on ens map to get a composite expression of


the t o t a l .
You will find, therefore, that where this line i s heavy,
while i t Is a brush line, i t represents the number of lines
that coincided at that point, or along those l i n e s .

In this

way you will see tfeat —
The Secretary of the Treasury!

This being the extreme limi

in which —
Mr. Wei torn But you see there are lines up here* there are
small lines a l l through.
The Secretary of the Treasury!

These cottcident lines re-

present the e z t r e u liirdt of those T
Mr, teiton:

These coincident lines ars shown all the way

You will see there ie less commercial territory in

Hew England according to these l i n e s .

You will see that therp

are also territories there that are coincident, indicating
that Chicago has the National field, or at least very9tauo;Ji of
the western f i e l d .

You will see that there i s a strong line

that comes up here north of fit. Louis, even when i t foes away
down to the southern boundary of Tennessee, or away down there
indicatinf a strong competitive point at St. Louis,

There are

a number of lines across Minnesota, indicating competitive
points at Minneapolis, St. Paul and Duluthj

also a lighter

a 4b

Arthur D. Welt on.

r line, indicating that Milwaukee is a competitive pbint.

There is a line down through the center of Michigan, indie


< ating there is competition for Chicago here*
The S d o r e t a r y °*


Treasury: You are going to submit to us

a key to this asap, are you not?

lire Velton: Tea, sir* I will say that this map is really


not finished* because there are still about twenty of those


map8 that are not indicated on it* but it indicates practi-


cally three fielde in which Chicago trade dominates. One ia


that indicated by this heavy line around the whole Pacific


Ooaat and the south; there ia a heavy line up here, and


there ie another one that ocmee in through this way on the


western border of Minneeota and Iowa, so that there are


really three districts in which Chioago is dominant according to the ohaxaoter of the trade.
There ie one that rune to the western border of Iowa and


rune up north of Michigan through the center of Ohio. There


is another one that takes in Ohio. There ia another one


that rune down the Ohio river, and there is still another
one that takes inthe southern part of Tenneesee. This light
lice ie south, of Columbus, but when it gets into the S at ion-

al field, it goes clear south to Texae.

X 2 3 1.

Arthur D. Weiton.
That le the general oharaoter of the nap, and there.are a
numbsr of letters that were also received that might be submitted to the committee, and which I would be very glad to
file, because they indicate in a general nay the nature of
the trade that these men have. Many of them give percentages}
and there are many expressions of fact in them.
The Secretary of the Treasury; Those letters may be submitted if you like and be wade exhibits to your testimony,
Mr* Yeltont

I think ttt would be Tory well to have them

submitted and put into the record in that form.
The Secretary of the Treasury: You will submit them together with this nap T
Mr. Yeltont

X will be very glad to*

The secretary of Agrioulture; You will submit a revised m
Mr. Yeltont

Z would like to take this one away and have

It completed, because we really were not quite through an wit
it* It was quite a task to prepare it.
The Secretary of Agrioulturet

That way be submitted later,

then will you have it ready t
Mr. Yeltont

I would be very glad to give it to you to-

morrow before you go away*
The fteoretary of Agriculture: That will be perfectly satis






Arthur D. Walt cm




j factory. Tou may jutt take this, Mr* Helton, and complete
f It for is* uo.

Mr* Wolton: All right. Will there be any objection to


\ putting this up on the bulletin board eo that every one mi gitaee it?


She Secretary of the Treasury: Sot at all, no sir. la a
representative of the Board of Trade here?
Mr* Porgan: lir. Bartlett represents the Chamber of Commerce
The seoretary of the Treasury: I understood you were not
here. We will be very glad to hear you row.


The Seoretary of the Treasury: Mr. Bartlett, will you

'< give your full name?

Mr. Bartlett: A. C. Bartlett.
The Secretary of the Treasury: And your occupation?
Mr. Bartlett: President of Bibbard, Spencer, Bartlett &
Company, wholesale hardware.
The Secretary of the Treasury: If you will give uo suoh
information ae you have which will help this Consmittee*
Mr. Bartlettt Mr. Secretary, I an afraid that I cannot
give you anything in addition to the information you have



A. C. Bartlett.

I already received through Mr. Wheeler. I have been absent
I frocj the city, c-.nd just returned last night, and did not knot
r until laot evening that I was expected to appear at this heai
ing this corning, so that I have not been able to compile
statistics at all, but must give you siaply in a general way
from the {standpoint of a merchant my idea, which is in perj feet conformity with the ideas of Mr. Wheeler and Mr. WeIton

in regard to the territory that is naturally tributary to
Chicago influences of a regional bank.
Of course, the majority of us are doing business in most oi
the states of the union, We have quite considerable trade In
the ttatt of Raw York and a large trade in Texas, but neithei
of those is directly tributary for the purposes about which
we art talking*

It would seem to mt> that it is largely a

question of longitude, rather than latitude. The location
of Chicago, its proximity to the Canadian line, fixes the
northern lint naturally, and the southern line so far as thii
particular section of the country is concerned in our ireaediatt vicinity, at least, would naturally be — perhaps it
would be the neutral lint between Bt. Louis and Chicago, a
lint which could bt as well served from one city as the oth




A* C. Bartlett,

Secretary of the Treasurer: Where do you think that line
? lsT


Ur. Bartlett: Hy own idea would be the line east of Chicago


• v/ould naturally extend down to the east an.i west of the lines
of railroad running east frorc St. Louis, the direct lines
running to the east from St. Louis.
l Upon the eaet, as I say, we have business, most of us, in
\ the far east* but at the same time we do not by any means
presume that the eastern section,like the western part of

this state and possibly the eastern part of Ohio would be as
wall served from Chicago as it would from Kew York or some
other eastern city*
Vest it is a little more difficult to determine, because
Chicago draws its business from the entire west and northwest]
a large proportion of its business in that direction,


and points west of Iowa.
Of course, the limit of Chicago in the west would be determined very largely upon whether you are going to establish
a regional bank on the Paoifio Coast/in the interior; but if
no primary banks are to be established on the Coast, that
section of the country is clearly, its commercial business an^

its commercial interests tributary to the city of Chicago.



A. C. Baxtlett,


Of oourse, the bankers are the men who can say most readilj

» and most intelligently with regard to the banking f a c i l i t i e s


I that will be offered in Chicago through a regional bank to
| the various sections weet of us*

The Secretary of the Treasury: Tou have not studied the
problem, have you, Mr. Baxtlett, with a view to determining
in any way definitely what division of the country into dietriots will be best?
Mr. Bartiett: Of the whole country?


The Seoretary of the Treasury: Tee.
Mr. Bart let t: Bo, sir* Of oourse, every one hae a genera!,
idea of it, but I have not studied it sufficiently to stake
any suggestions.
The Seoretary of ths Treasury: How far into the northwest
do you think that the sphere of Chicago's Influence, or of a
regional bank established at Chicago, ought to extend?
Mr. Bartlettj

That of oourae depends upon the number of

regional banks you establish. I suppose you are going to
establish ths Minimum number under the law probably that wil!L
eerre wsll all sections of the country. Row, of course, tha
would in * sense determine how far the region would extend

from ths city of Chioago of that particular reserve bank.


A. G. Baxtlett.

The Secretary of the Treasury: You would have to answer
that question upon some assumption you might make, whether it
is eight or nine or ten or eleven or twelve. You can take a|iy
assumption you like.
) Ur.Bartlett: Veil, assuming that you are going to establish
pay sight banks, the minimum number of banks, and I should
jrather infer that this being viewed properly in the light of
an experiment, a new banking law and a new plan, that you would
naturally start with the minimum number and sake those banks
as strong as you could, all the banks as strong; and I infer
jfroa what I have read and heard that the idea of the law makers was to have each bank independent, so far as possible, of
the others, and its territory not dependent upon other regional banks, axoept in oases of exigency, and that they should
be Independent of each other. In that case I suppose you
would establish sight banks—
Tho Secretary of the Treasury: Assuming eight would be
established, have you any idea In your own mind as to what
territory should be made tributary to Chicago, assuming that
a regional bank were established here?
Kr. Bartlett: 80 far as the north is concerned, I mean

the 1 mediate north from us, across to the east, as I outlined,

a lib


A. C. Bartlett

the central part of Ohio, and upon the south perbapsaJ8ae
down to the linee ot railroads running east, the trunk linee
running eaet from St. Louie.
So far ae the northwest ia concerned, and the far west, I
have taken it for granted that there would be a regional bank
on the Pacific Coaet.
the secretary of Agriculture: That le in the far northwesi
or in the west, or in California, for inetanoe?
Mr. B&rtlett: Well, in California, the Pacific Coast, I
surmise, would naturally include all territory, frcrc Seattle
to BanDiego, naturally all territory weet of the mountains.
The Secretary of the Treasury f Upon that assumption, how
fax to the northwest would you think that Chioago'e influenc
should extend?
Kr. Bartlett: Well, if there ia to be no regional bank
at the Twin Citiee, then I should assume that it would take
in certainly Horth and south Dakota, Wyoming and Colorado,
if you oall that northwest. It ie not the northwest, and then
would be a question with regard to Montana, a question which
X would assume could be better settled by the expression of
opinion froa Montana Itself. I could not say, but ay impres

sion ie that naturally their banking facilities are in the



A. C. Bartlett.


eaet, and they would naturally oome to the east for a regiodal bank If they had their own choice.



The Secretary of Agriculture: From your knowledge of business movements, would you say that Rorth and South Dakota,
Montana and Wyoming are more dependent on Chicago than any


other oity or cities?


Mr.Bartlstt: Than any other oity?
The Secretary of Agriculture: Or cities, say than St. Paul
and Minneapolis.
llr. Bartlettt I don't know that I could quite say that.
I think that would depend something, of course* upon a combination of the business interests. So far as my own particular
business is oonoerned, I should say that South Dakota — the
figures that were shown me this morning *£<s* South Dakota —
I haven*t them vita me, because they were, not indefinite,bb|t
at the same time they were not in form so that I could use
thea Yery well; but I recall that in South Dakota that we
sell as Many goods per capita as we sell, for inotanoo, in
the stats of Indiana.

That was the only way I could get at

I had not tisse to figure upon the sals of merchandise i,n

the state of south Dakota, or any other state, per capita.
We were selling just about the same quantity of goods in

I a!3b


i. C. Bnrtlett.

Pouth Dakota that we were in Indiana, and Y,Q have what we
consider a large trade in Indiana.
Eorth Dakota, I cannot say t-bout that, but I think perhaps
Eorth Eakota and Montana would naturally go to the Twin Citie^,
and potaibly South Dakota, but certainly those two would go
to the Twin Cities if there is to be a regional bank established there.
Ckt Beaastary VSalgrloulture i What would you say of Keb~
Mr. Bartlett:

I think the flow of trade west Is east and

west, and I think Sebraoka would naturally come to Chioago.
The Secretary Of the Treasury: The whole of the state?
Mr. Bartlett: It would be rather difficult to divide Bebraeka. Of course, you don't care to establish the lines
along the state boundaries! but it would be rather difficult*
I think, to dividefiebraskaIn any way.

I do not know of any

reason why the whole of Ktbraska would not naturally cone to
Ohio ago. The business of Chicago extends very largely into
Kansas* and I see no reason why Kebraaka would not.
The Secretary of the Treasuryt

How about Colorado and

Wyoming, does it go as far as that?
Mr. Bartlettt

Colorado and Wyoming would be in the sane

I alSb


i. C. Bartlett.

class with Kebraeka, naturally, because of its location. I
cannot aay a a to the business of Chicago as a whole, but so
Sax &e our own buainees ie concerned, we have what we consider
u very large business in Colorado*
The Secretary of the Treasury: Are you going to submit
those otatlatiog, Ur. Bartlett, to the Committee?
J*r« Bartlett: Well, I have not got it in form*

Ae I say,

I just arrived last evening, and I donot know whether it


i would be of any servioe to you*

If it would be, I should be

j very glad to submit it*

The Secretary of the Treasury: We should like to have it,

( and it may be made an exhibit to your testimony. Bo you thin,k
i you oould submit it before us leave here?
Mr. Bartlett: Tee, s i r .


The Secretary of the Treasury: If i t i s not ready then,

you oaa send it to faohington.
The 8»oretary of Agriculture:


That will give you more tine

I You OSB have two weeks.

The Secretary of the Treasury: Thank you, Mr. Bartlett.

| Is Mr. Shedd here now!




John G, Shedd.



The Secretary of Agrioulture; Mr* Bhedd, you know the problem confronting the Committee*
ir* Shedd: In a most general way.
The Secretary of Agriculture*

Dividing the territory of

the United States into not less than eight, and not in Ore than
twelve districts, and locating a federal


bank in each

of the districts. Wehaye to take note of the convenience of
; the different sections, and the course of trade, and we should
be glai to have any light that you can throw on the problem*
Hr. Shedd:

I took it for granted that an effort would be

Bade to locate these regional reserve banks in centers so as
to facilitate the movement of business through those natural
arteries and channels,
I thirk it ie taken for granted that the natural movement
of business in this country la from west to east, and about
the same —
The Secretary of Agrioulture;

In this section, you meant

Mr. Shedd: Tee* eirj almost In the entire northern half
of the country* and by the same logic, from southwest to north
east and from northwest to southeast* and at each city, each

large city In relation to its importance as a city, It draws



John G. Shedd,

i from the eaat, northeast and southwest a far distance, not so

| great ae made ir the relation to the west, but only in propor| tion to ite importance as a distributing city.
i In considering this matter I have concluded that a few facts
! as to those—
Tne Secretary of the Treasury: Gentlemen, in order that
you may all hear as distinctly as possible, I think you had
better move your chairs nearer, and then «e will try to £*~.
observe as much order ae roesible while the witnesses are

Please proceed, Mr, Shedd.

Mr* Shedd: I had started to eay that I thought that perhaps
the sequence in the territory at Chicago ae a regional reserve
center night be setae what based upon the volume of business
which to Chicago either in volume or per capita, and so
I prepared a brief stateraent of the conditions of our business
ae it applies to this territory around Chicago.
I find that eliminating the city of Chicago, that Illinois
ranks first in our business ae to the amount of our business
and the etate of Iowa second, and the consequence is in ay
judgment that Iowa is a very Important factor in establishing

a regional reserve bank located in Chicago.
The third state la Wisconsin and the fourth Michigan.




John G.Shedd

| Bow, the percaplta, whioh is somewhat varying with the population of the state© — for instance, the first three states,
Illinois, Iowa and Wisconsin, are our first three states as
to volume and per capita. When it comes to the fourth, we
j have Michigan as the fourth state in volume, but a very great
change In the per capita*
showing that Montana —

It immediately goes to Montana,

the population of Montana so far as

our business is concerned, seeks its channels through the
lines of transportation following a southeastern direction,
j making Montana easily accessible to this oenter for Its accommodations.
Our fifth state is Indiana, and our fifth per capita is
South Dakota.
Our sixth state is Minnesota, and our sixth per capita is
Our seventh state in volume la Minnesota, and our seventh
per capita is Michigan*
Cur eighth state in volume is Ohio, and per capita California*
Cur ninth state In volume is California, and per capita

I claeelfltd 9-A* being the eaad percentage per capita as



John C.She eld.


Indiana Is 9-A per oapita, making i t the same as

Our tenth in volume la Kansas, per capita Earth Dakota,
Cur eleventh in voluae i s Kebraska, and per capita Colorado
f Then cores 11-A per capita Idaho, 11~B, Ariaona.

Kow, Colorado i s fourteenth in volume, and Oregon in per

. capita.
Row, Rorth Dakota, or rather, Washington, ie fifteenth in
volume, while £tah i s the fifteenth per capita*
Oklahoma i e sixteenth in volume, Washington sixteenth per

Montana i s seventeenth in voluae, and as I indicated before,
i t ia fourth per oapita,

Indicating that so far as j opulatiot

i s oonoernad, i t s business is from the northwest to Chicago.
I1 Korth Dakota is eighteenth in volume, end Uissouri ie eighteenth par oapita.
Thoae fact*, of course, oannot be followed without a l i t t l e

The faot that Minnesota1© per capita i s as low es

I it ie i s svmithat affected by St. Paul's distributing business
and Minneapolis, trhioh are important distributing centers.
The saaft ia true of Indiana.

Inii&nepolia to quite an extent.

Indiana distributes from
But notwithstanding this,



Minnesota and Indiana clearly indicate from this in our business that they below easily in this regional zone.
Ohio about the eajne. Cur figures indicate very clearly
that it is tributary in ite business to Chicago, because you
will find that it is eighth in YOlunie in our business, and
with that indication, it ie in line with the logical line
that weald follow as to the banking neoessitiss.


John 0. Shedd*


The Secretary of Agriculture:

Do you find that that

,; volume decreases as you more into the veftera sections of


these slates or into the eastern sections of the eastern

1 stateA


Mr, Shedd: Ho, sir, in the various states — as to Ohio

', somewhat in the far east, out not as to Michigan,

The Secretary of Agriculture! You find i t fairly uniform?



20% Shedd: frairly wtlform.

Our distribution in Michigan

I l e very uniform throughout the state*
The Secretary of Agriculture: How would that be in Iowa,
and states west?
« Shedd? Iowa i s uniformly good from north to south,
and east to vest*
The Secretary of Agriculture: And Netraeka.
Kr. Shedd}

nepradca i s in the sane relation; we draw

from the entire state*
The Secretary of Agriculture:

The same wouSbe true of

I south Dakota?
Mr. Shedd* YOB, the whole state*
The secretary of the Treasury: And Vorth Dakota also?
Mr, Shedd! Vorth Dakota i s rather uniform*
The secretary of the Treasury: How about Indiana?

John 0, Shedd.

? Mr. Shedd: Indiana, I should say that the zone of
« influence of Chicago decreases as you go south of the centre {
;, somewhat, but the south quarter of the state, in a general
way; and i t i s the satm as to Illinois; we do not draw as

strongly from directly south, except1 as to a distance of
four or fire hundred miles.
The Secretary of the Treasury! Taking Indiana, for
; Instance 9 where does the influence of Chicago begin to
[ markedly shade, off, X mean at a point about how far north
i of Indianapolis, if i t i s north of Indianapolis*

!fir# Shedd: Veil, I would not say i t i s north of Indianj apoli s.
Ths pecretary of Agriculture? Suppose you were to take

I Ohio and come around in t h i s direction, how would you draw

the line,
yr. Shedd:
I hare
made an
and I wIi l ldopro
on which
I drew
a s*p»


narks, Indicating the influenc e which I thought would be
extended to a regional bank in Chicago,

j t starts at a

point near Tola do and runs south to Columbus and south of
Columbus, and passes wast south of Indianapolis, Tad* and
BPrtngfiold, t i l .




John G. Shedd.


The Secretary of the Treasury: You would taie in the

I whole of Iowa?
XT. Shedd: I would.

The secretary of the Treasury: And Kansas and Horth and

j South Dakota?




Th# secretary of tfc« Treasury: And liinnesota?



w . shedd: i would.

J The Secretary of fee Treasury: What does t h i s line here
jjmean (indicating)?

Mr. Shedd: That was a line which was drawn In case

r8t. Paul-Minneapolis should be considered necessary as the


location of a regional reserve bank! but t h i s i s a line

jl hare specially fixed In my mind.
The secretary o f the Treasury: "For Chicago alone?
Mr. SheddS Yes, sir.
The Secretary of the Treasury: Assuming one was located
at St. Paul-Minneapolis, in/case you would only take the
^southern half of Wisconsin.
• Shedd: Then T thought 11 was probable that the line
sight be drawn about in the position X have placed i t .
The Secretary of Agriculture:

Where would you draw the


John G. Shedd*

western Chicago line in ease St. Paul wore selected?

lir# Shedd:

Out t o the Rocky Mountato borders*


The Secretary of the Treasury:

Ho, an aiming St. Paul

< were established.
ur* Shedd: X chould suppose die would draw a3most entirety
I from the northwest*

The Secretary of Agriculture:

Vbuld you "be good enough

to go over that in the next tm da^n n £ at your leisure,

i and dratr, as definitely as you can, a map showing what


j; territory you would attach Chicago, f i r s t on the assumption
5 that no bank were to toe established in the Twin Cities and


ji then on the anaumption that one might be established there*
*r # ghedd! X diould be glad to*
The Secretary of the Treasury: In drawing the map please
state also what ascnptlon you took as to Uie number ef
regional banks in the country, whether your map i s made on
the theory that there are to be eight or a larger number*
lir. Shedd: Will that hare any influence on the f i r s t
question as to the — for instance, X notice, whether you
had more or lees, my thought would be that the northwest
as a whole should come southeast.

Tor instance, my thought

would be that fee states of Vashington and Oregon should

John G. Shedd

• coma southeast In any event, eren to Chicago*


The Secretary of Agriculture:

In any event you would

• bear in mind what you would do with this whole Dection
through here (indicating)?

The Secretary of the Treasury: The problem i s so interrelated that we like to hare the theory upon ihich any

: suggestion of this sort i s rode, as to the number of hanks,
f In the mind of the a n making up the map, as to v&ether

j he figure* on either or nine or eleven or twelve*
The Secretary of Agriculture: i f you have not time to do

• t h a t oefore we leave, any time within the next few weeks
w i l l do.
The Seoretary of the Treasury * Yithin the next two weeks*
Ifr. shedd:

X tfiall b« glad to prepare i t and send i t to

you after I have worked i t out.
The Secretary of the Treasury:

t » there a representative

cf the Board of Trade of Cfcioagi here?
Mr. Cenbyt
The Secretary o f tht TrsasuryS
Baa* and oeoupation?

You nay state your f u l l



c. H. Can>jr

Mr. Canby:

C. H. Cariby; President of Chicago Board of

J Trade.


The Secretary of the Treasury:



And your occupation?

Grain merchant*

The Secretary of the Treasury: Tou are familiar with the

J problem that we are dealing with?



Mr. Canby: yes, sir.
The Secretary of the Treasury! o* dividing the country

i into not l e t s than eight ^ more than twelve regional
[ districts*

If you "have some views which you care to submit,

t we would be glad to hear them*


ifT. Cabby:


secretary, the Chicago Board o f Trade

has a v i t a l interest in the question ^tffie'Jtfefcibasil reserve
•election and position, by reason of the fact that the
grain trade i s a purely cash proposition.

The origin of

every oar of grain, when i t i s routed for fee City of
Chicago, 1 s inwedlat ely aooompanied by a draft, and that
draft must be paid and financed In Chicago frequently one
w e * or ten days before the arrival of the grain.
Our territory includes practically a l l of Indiana west
of a line drawn down through the central portion of the
state to the Ohio filver; quite a considerable amount of


C H* Canby

I grain coming from what we term the Terre Haute district;

from that the line extends westward and orosees in a north*
' westerly direction the southern part of I l l i n o i s , reaching
to a point south of Springfield or Litchfield; we take in
a portion of the northern part of Missouri, a l l of the
; State of Vow*; during the wheat moving period we reach down
| Into Oklahoma as far as Enid and Oklahoma City; eastern

, and northern Kansas, along the line of the Union Pacific;

• Bebraska as far west as the wheat belt extends* We extend
} into South Dakota and the south 16 counties of Minnesota,
During the month of December alone we reoeived
2,000,000 bushels of com from South Dakota on through

We received probably a million bushels from the

southern portion of Sinnesota, <$wing to the fact that the
trend of traffic in the grain trade i s probably, in the
aYerqp year, at least 85 per cent west to east*


the past year t owing to the faot that there was a very
short crop of corn in xtat Oklahoma, Kansas and portions of
rexas, *• movement of corn has gone southward from Nebraska,
•klch In other years would have gone eastward*
' Our t o t a l receipts in the City of Chieago of a l l grains
luring the year 1913, were 357,000,000 bushels, on which


c.H. Canby

I the members of the Chicago Board of Trade paid drafts,
amounting, on monthly averages, to about $190,000,000*
This included probably 35,000,000 bu&els of grain which

; cane from Duluth, and also a tout 5,000,000 bushels of oats
i whioh we hare receive! from Port Arthur and JPort William.


| sinoe the new tariff has gone into effect.


Our area of distribution extends practically to every

!'Point east as far as the boundaries of Hew England extends*
fte extend southeast into Georgia, owing to recent rates
{that have been put into effeot*

So that our interest and

pur views on the question of the boundaries of a regional
e serve bank are very wide, as our territory extends so far
est and our business activities extend so far east.
I She Secretary of the Treasury: Kave you prepared a nap,
. Caaby?


Itr* Caaby! Ho, but I have prepared a brief, whioh I will
Is with you for reference.
The Secretary of Agriculture: Will you read i t , or i s i t
j | s t statistical?
Mr* Canbyi .ft i s simply statistical*


gives in detail,

fair example, t.he receipts of grain during the past yew
wtlch were flnlpieed by the Chicago banks, were of #ioat

C. H. Caiiby

50,372,000 bushels.



127,773,000 bushels










making a tot A of

These are exact figures from our Yeighmaster's returns.
The Seoretary of Agriculture:

Could you make « a

shading i t according to theTOlume, showing both the


! of receipts, and the distribution area also?

nr» Canby: Yes, t think we could.

Ye could give you what

might be called approximate information*

It would be a

difficult matter to get anything like that which would be
rery exact.
The Secretary of Agriculture: yes*
W. Canby: But we would do the best we could.
The Seoretary of Agriculture: y e s , i t would be helpful.
in% Canbyt A map of this oharacter?
The Seoretary of the Treasury: Yes.

or just take that

map end outline upon I t ,
Hr. Canby!

I will.

I w i l l f i l e this brief?

The Secretary of the Treasury:


C. H. Canby.




(The brief submitted by Mr. Canby i s as follows:)
I "Board of Trade of the city of Chicago,
Secretary's office.
Chicago, January 19th, 1914
To tho Honorable Federal peserre Bank Committee,
Hon. ¥1111 am G» Mo Ado 0, Secretary of the Treasury
Bon* David S« Houston, Secretary of Agriculture,
In support of the merits of the City of Chicago to be
tho pl'^oe of location of a Regional federal Reserve Bank
under the provisions of the new yedeml Reserve Act, the
president and Board of Directors of the Board of Trade of
tho City of Chicago beg to submit tho following as indicating tho outlines of the territory, the ccnoBfirclal
Interests of which, In a largo measure, center on the Board
of Trade of the City of Chicago, and their value —

Receipts of

50,372,000 bushel*




















c. H. Canby

having a value, based on careful weekly emputations, of

Of fOour, 10,096,000 b b l s . , having a value, in i t s
wheat equivalent, of |47,500,000.

Of a l l kinds of l i r e stock, 16,452,807 head, valued

j|at •409,154,674.00.

(TheBO figures w i l l be shown in the figures submitted

[by the Stockyards interests.)

Shipments of cured meats during the year were
614,048,000 lbs.
273,717*000 lbs.

101,303,000 lbs.


284,110,000 *

Xggs (oases)



There are numerous other s o i l products, such as flaxseed,
clover, timothy and other grass seed, besides many others,
aggregating an enormous total.
As indicating the territorial or regional extremes
to whioh the commerce of die City of Chicago reaches, i s the
railroads terminating here} they number 53 and have a

0. H. Canby

mileage of 101,000 miles*

Grain comes to t h i s center over

t these roads and in connection with many conn eating lines
i from a vide territory; some commodities, such as barley


and hops coming from the Pacific coast States.


major part, however, coming to Chicago originates within
territory outlined by a line drawn to the east of us ah out
midway across Indiana from the lakes couth to the Ohio
Rirer, vest to the Missouri Hirer across the state of Iowa
to the Vortlsrest including both Batatas, and even into

;: To stern Canada.


At the present time we are having quite good arrivals
of Saskatchewan Oats*
Lake arrivals of American grain from the hand of the
lakes and Canadian grain from north, shore ports of Lake
Superior t o t a l large quantities, reoeipts of Canadian oats
sine* the lowering of the tariff hare "become an important
The storage of the commodities mentioned, and ttieir
final distribution employs a sum of money in the aggregate
seldom i f ever equaled or employed in handling s o i l
products in any other c i t y in this or in foreign lands*
This memoranda does not include articles of great imp or-


C. H. Canty



i tanoe not handled on the Board of Trade, such as produce




i not susceptible of storing, lunber, coal, etc.



This Association very respectfully urges the location

j of a yederal peserve Bank and that i t he given a tarritory
commensurate with the commerce centering here*
Board of Trade of the City of Chicago,
C* H. Canhy,
presidwt. 11


««f»innrtfimtf« QJ JAMBS B#


The Seoretary of A e Treasury: Th.e clearing House Asso-


elation i s next.

yr. J-organ, you desire to t e heard first,

Z belitvo.

Mr. jnorgan; yea.
The secretary of the Treasury; Kindly state for jsh.%
record your full name and occupation,

H?; Jorgpn:

James B. Torgan; president of the First

Vat Ion a,IBank of Chicago, and Chairman of a Committee
•specially appointed t>y the Clearing House Association to
appear l>«for* you.

¥ • held a meeting of me clearing House Association


and discus Bed t h i s matter, and we discussed i t for a few
I /
Federal Reserve Bank of St. Louis

J. B* Morgan

hours and finally- decided to appoint a commit tea consisting
of myself, wr. Reynolds, Hr. W. T<, Pen ton, Charles G. Dawes,
and E. D. Hurlbut, to take the matter up and ley before you
the oo no en SUB of opinion of the Association.

That committee

has met twioe sinoe, and has delegated Mr. Reynolds and
myself to represent their views.
The concensus of opinion of the Association was that we
should havecoc^a*aii"di*^Iy a very large federal ^e serve Bank
located in Chicago*

Just how large that hank should he

j*ould depend, of course, on the number of banks* whether
t was to be eight or more, up to twelve,

We therefore

[considered our territory around us in sections, by states*
e had a meeting with the ASEOelation of Commerce Committee,
d while we did not see their map as i t was produced here,
e got the general outline of what they found, and i t
truck us as rather peculiar, or i t was rather striking,
that the result of their inquiry pretty well corresponded
l t h ttie figures that we had prepared to show how far we
uld serve the surrounding country from t h i s point*
The Secretary of Agriculture!

Hay I ask I f your committee

hfes prepared a nap?
Hr# Tergan: Hot a mapt but s t a t i s t i c s by s t a t e s , which

- -^

*• £• yorgan,

X w i l l hand you and explain.
The Secretary of the Treasury: Would sou be good enough
to prepare a map showing concretely on the nap just what
you hare in your minds.
10% Torgan: y e s , X ttiink we can do that.
The Secretary of Agriculture: With alternative auggeat| ions, if you pi case.


Morgant ye»»
The Secretary of the Treasury: And where you have gone
on the assumption, if you hare, that there should be eight
banks only, X suppose you have had in your mind what
diviaion should be made of the rest of the country into
d i e t r i e t s , in order to relate them, and we would like to
hare you make your auggeatlons on that line*
Mr. Morgan: Ye are son what embarrassed aa to that, Ye
do buaineaa with a l l these other c i t i e s which are going to
repreaent their own olaima before you, and we are put in the
embarrassing position of the nan that had two girls; i f
the one was farther away, he could have a good time with the
other one*
The Secretary of the Treasury: Yell, you are not more
embarrassed than Saw York, are you?

J« B. Morgan


W. Morgan:

x think we are embarrassed more than Hew York.

The secretary of the Treasury: They did not h e s i t a t e to
make suggestions when we heard them.

22r. yorgan:

Ye w i l l not hesitate either, 7.5-. Secretary.

We w i l l be Tory glad to make suggestions, and these suggestions we her*?hare, i f followed out, w i l l make natural

The Secretary of the Treasury: We would like suggestions,
because after a l l this 1 s a Tory serious economic problem,
and i t i s not a question of hurting somebody*s feelings or
hurting local pride* Ye must deal with i t as a business and
economic proposition and "bring to hear the best intelligence
we have.
VT* Torgan: You would not ask us to decide as between
Sflnneapolis and St. Paul, for instance?
The Secretary of the Treasury: Ho, we would excuse you
froa that.
VT. Torgan:

This statement, as you will s e e , starts out

with showing what the siso of a federal Be serve Baifc to bo
established in t h i s district would be, i f the territory was
confined to Ohieago alone* Vo would hare nine banks -*
these are taken from the last statement published by

J. B. Porgan

: Comptroller's Department. Vhile there are more than nine


; banks in Chicago, there are only nine banks that conform to

the regulations of the Central Reserve City bank*


have been some small banks started on the outside that do
not keep the 25 per cent reserves, and are not required to,
• that are considered the same as outlying banks, and they
are included with the rest of Illinois*

But in Chicago we


would have nine banks and we would contribute to the deposits'

! $20,707,000, and to the capital, $4,143,000.




If wo take In the rest of IIlino 1B we would hgre 450

; national banks added, with $9,046,000 added to the deposits
*- and $3,100,000 added to the capital.

If, therefore, we had

:i a d i s t r i c t that vis confined to our own state, we would
L have 4-59 banks — however this i s based, I may say, on

national banks alone and would have to be Increased by the

j number of stats banks whloh would come in, in proportion —


I the stats would hare 459 national banks with $29,753,000


deposits and $7,243,000 of capital.

If you extend into the State of Indiana, wo ha-* got to

[divide each stats in accordance with the reserve c i t i e s ,
ijand the rest of the state, because the reserve cities have

to contribute in a different proportion to the deposits


• 0-18

j . B, Torgan

from the rest of the state, so each state I s divided Into
' the two classes of banks, reserve city banks and the outlying
banks —
The georetary of the Treasury: Country banks?


VT» Morgan: Country bankB«

Indianapolis would con-

': tribute 5 banks with #1,522,000 deposits and #565,000 to

< the oapital and the rest of the state would contribute 251
I banks with #5,122,000 of deposits and #1,185,000 of capital.

The secretary of

the Treasury:

In these figures you are

; including the attire states?

The Secretary of the Treasury! You make no division of

I the state?
«r. yorgani

t sake no division of the state, beoause

we took i t from the figures of the state as the Comptroller
gives them in h i s statement,

Then i f we go into Iowa ve find four reserve c i t i e s

{there, cedar Rapids, Des Jfoines, Dubu<]ue and Sioux City,
Which would contribute the figures shown there; X do not

Ithink X need read themj but the whole

State of Iowa would

'contribute #7,328,000 to the deposits, and #1,963,000 to
the capital.

J. B. Jorgan


It we extend then into Klchigan we find Just the one

• reserve city there, Detroit, and i t would contribute
[ $6,482,000 to the deposits, and $1,379,000 to the capital.

Taking in Wisconsin we would get $6,621,000 added to

[the depoits, and $1,553,000 added to the capital,
Vow we think that there would rest our district probably,
there are to be more than eight banks*
The Secretary of the Treasury: vore than eight?
•wr. Torg&n: x f there are to be more than eight, we
probably would not be able to extend beyond that.

But we

are of the opinion that we should.
The Secretary of the Treasury: But with eight banks you
[would hare this district?


. yorgan! n t h eight banks we think we stould hare
that d i s t r i c t .
The Secretary of Agriculture:

In that case would you


;inolude the whole of I l l i n o i s and Indiana?

i Kr, Torgaat

y«a, sir, we think that there i s not any

jjoooaslon for diriding either I l l i n o i s or Indiana,

Te are

(getting l e t t e r s , two of which I received t h i s morning since
I came otb^ here, which earne in in the morning nail, from
/ i
two banks in the southern part of I l l i n o i s , which are


quite close to 8t. Loulsy saying that they do more business
with Chicago thanwltti St. Xouls, and urging upon us to urge
that tha wholo state be brought into t h i s district.
The Seoretary of the Treasury:

Taking Bast St. Louie, of

course that would go to St. Louis naturally.
Mr. ftrgant Yes, that ispraetlcaXLy part of St. Xouis*
Then i f Minneapolis or St. Paul i s not to hare a regional
reserve bonk, we would think Minnesota should be brought
into oujfc district, and in that case we would have 1555
banks*; with total deposits of #67,497,000 and total capital
of $17,096,000.


ftim $t there l a to be no reserre d 1y in Hebraska,
we think we would be entitled to the whole of Nebraska. And
we think that both these states, Nebraska and Minnesota, i f
they are not to hard a Federal Reserve Benk for themselves,
would agree with us that this would be the natural place
ter their reserw bank to be located.
If ifif&raskft was brought in, i t would increase the
deposit* by #5,306,000 and the capital by #1,477,000, on
the same linfV
If Mla^eapoll8-81. Paul do not ha-ve a reserve bank,
we would'think Vorth and South Dakota should be brought


J, B. Morgan

into our district, which would give us 2046 banks with
$75»37O,OOO deposits, and $19,350,000 capital,

ifcen we

think that we might have a good claim on a t least a large
part of Ohio,

The figures for the whole State of Ohio

[would bring up the numb a* of our banks to 2+561 and the
deposits to $92,826,Ooo/capitil to $24,984,000.
The Secretary of the Treasury: X see you have Kentucky
on this nap?
1P% Torgan*

I have.

The secretary of fixe Treasury:
JD% Torgani

That i s s t i l l another

There i s another possibility, yes, sir*

The Secretary of the Treasury: Assuming that you had all
the states that you have enumerated here, what division
did you have in your mind thex for the rest of the country?
Mr# Torgint

Veil, we thought Now York should have quite

a large bask established there.
The Secretary of the Treasury:

This would take about

ono-fourth, you see, of the available banking capital of the
entire federal Reserve System, 7 mean if a l l these states
were ine&ded in the Chicago d i s t r i c t , BO tint the remaining
seven would have te be divided among the remaining three




! quarters of the available capital.

Hew York suggested that

I they ought to hare a predominant "bank which would take from
I 45 to 50 per cent.

If t i n t were conceded, "be tar em Hew York

jl and Chicago you would hare 75 per cent, and that would not
givo the rest of the country much of a show, would it?
Iff. Morgan: No. Veil, that i s the difficult problem that
you gentlemen have got to solve, and i t i s pretty hard for
us to decide upon i t .

From our point of •viev, you know

If we are Just going to look upon i t territorially we are
really the centre and New York i s on the circumference of
the elrdie*
The Secretary of the Treasury: You would have a branch
of Chicago in Yew York, then?
Mr., Jordan: Y « S .
Th« Seoretary of the Treasury: Veil, wr* Morgan, the law
of oourse requires us to di-vide the country into not l e s s
than eight districts?
Sir. For gas 1


The Secretary of the Treasury:

I assume from your remarks

that you would prefer the minimum number of 'banks established,
Mr. Morgan: Y*»»
The Secretary of the Treasury: And that your feeling i s


J. B. Morgan

i t would be beat to establish the minimum number?
ur. Porgan; Yes*
The Secretary of the Treasuiyt

That being true, i t would

be of value to us to know just how yoi would divide the

of course, X understand that your suggestion would

be tentative, but we like tentative suggestions because
they give us information.

Te should like to have you submit

a tentative suggestion, i f you w i l l , a s to the division of
the country into those eight d i s t r i c t s , allotting to Chicago
what you think in such circumstances would be most advantageous from the point of view of the relation of t h i s
district to a l l the other districts in the country, and at
the saaua time conserving as much, as possible the trend of
business and exchange in relation to Chioago.
Mr. Morgan! Would you like to hove i t prepared and submitted later?
The secretary of the Treasuryt

Te would be very glad to

have i t while we are here, but i f not, just as soon thereafter as you can prepare It* Te are not required by the
Aot to follow aexxkxk state l i n e s , as you know*
HT. Morgan: Be, I know that.
the B«oretary of Agriculture*

Kay I ask, Hr« Morgan,


j . B, Jorgan

I t has teen stated repeatedy in these hearings that the
movements of business are from west to east, and from south
to North.

You suggest Ohio* What would "be the fact in

reference to Cleveland, for instance, and Columbus and
Cincinnati? Would that business naturally trend towards
Chloago, or does i t go east.
KT« Forgan: X think Cleveland would.
The Secretary of the Treasury: Would go east?
Mr. Morgan I Vo, x think it would come this way naturally J
Cincinnati would be sort of divided.

X think it would be

pretty hard to determine where Cincinnati should come.
Cincinnati banks a l l keep accounts i s Chioago, and of course
they a l l keep accounts in Vew York*
The Secretary of Agriculture:

Row about Detroit and

Toledo? „
W. Porgan:

X think they would come to this district,

X think both of them would come to this d i s t r i c t naturally.
The Secretary of tie Treasury: xndlanapolis also?
Jtr. Porgaii Yes, vndianapolis also*
'The Seoretary of Agriculture^ irhat i s the practice here,
Mr» Jorgan, with refersnee to the payment e f interest on


J. B. Porgan

Mr, Forgan: Ve hare no combination or rule regulating
Interest In the banks of Chicago.

Every bank acts Inde-

We hare not even a secret understanding, It has

beat absolutely free*

I think, however, that the banks as a

rule pay two per cent on country bank balances, and I do not
think that that rule i s broken except by some of the trust
companies, who, when the country banks hare a surplus reserre
more than they need and hare i t so they can put i t aside
for a l i t t l e time, they put i t into one of these trust
companies and get two and a half and sometimes three per
cent for I t , knowing that i t i s to be a dead balance and
not operated with*
She Seorotary of Agriculture: What i s the practice with
reference to collections of cheeks?
*r. Jorgan: Ye hare a Clear ing House rule In regard to
that with a schedule prepared by the Clearing Bouse, to;1
which the banks a l l adhere,

I can give you a printed l i s t

showing the charges on every point In the United States.
The Secretary of the Treasury;

There lino free collection

of cheeks?
Xr, Sorgant

There l a no tr^tt collection of checks for cur

commercial depositors*

Ve d e a r oheeks for outside banks.

f 0-26

J. 1. ifergan

The secretary of the Treasury* Those who keep their
reserves here?
Mr, Porgan: Vho keep their reserves here, and our rule i s
to oharge them actual cost*

If we can collect at a point,

for instance, i f we get checks on Minneapolis or St. Paul,
where they charge on everything, we would not collect that
for a oountry bank, i f they sent It to us they would have
to pay us what we pay when we send i t to St. Paul; but i f
i t was on a city which did not charge us, we would give the
oountry tank the advantage of our faoility to collect at par.
The secretary of Agriculture^ We are asking that, as
perhaps you know without ay stating i t , oeoause we are told
fro* time to time that TO must take note of the present
trend of ousiness, and yet in certain c i t i e s we find they
pay a s nuch as four per cent*
The Secretary of the Treasury! As indicated V hank
clearanc es.
The Secretary of Agricultures

Yes, and certain c i t i e s

nake these collections free, whioh has led to a very
a r t i f i c i a l state of things.
Tht Secretary o f the Treasury: yes.
ST. yorgap! Philadelphia did some years ago.

J. B, Morgan

The Secretary of the Treasury: Philadelphia, PittsTairgh
and Albany, and we heard of one l i t t t o city in the southeast
j that paid as much as four per cent.

ljr. Porgan: And Cleveland.

when we started that rule

[ here, I am very frank to sap we net with a good deal of
opposition from our customers, and we adjusted our original
t a r i f f s to meet the views of our customers, as represented
toy the different commercial associations who appointed
committees to confer with us* Siren then we found that some
of our customers started in to open accounts in these
c i t i e s that competed, offering to do i t for no thing. X* did
not to any appreciable extent affeot tike number of items
that came through us, norths volume of our busLnes&f f?e
never noticed It,

and i t very soon practical^ died out*

There may be a l i t t l e of i t l e f t , tut very l i t t l e *


fact i s , take the First 3 at ion a 1 Bank, we handle an average
of 27)000 country checks a day the year round* Mr* Reynolds1
bank must be up somewhere around 40,000, I suppose*
10% Reynolds! Yes, 80,000.
ytc. Storgan: X did net know you were so much larger than
we, but of course, now X think of i t , you have a larger
proportion of bsnk business than we hare; your proportion


jr. B. Torgaa

i s much larger of bsak business* But these figures which X
give you about the number of items we handle will be something that i f your Committee have not considered, the
Tederal poserve Board w i l l have to consider when it undertakes the handling of a l l these items, because i t i s a -very
serious expense*
The Secretary of the Treasury:

The Act provides in

Section 16, "the pod era 1 Reserve Board shall make and
promulgate from time to time regulations governing the
transfer of funds and charges thtrefer among Tederal Eesenre
Banks and their branches, and may at i t s discretion exercise
the functions of a Clearing House for such Tederal Reserve
Bank, or nay designate a Tederal Be serve Bank to exercise such
functions, and may also require each suoh b«nk to exercise
the functions of a clearing House for i t s member banks."

How that i s a provision of the Act which the Tederal

Reserve Board w i l l have to deal with, and the purpose of the
Organisation Committee i s acquire

such information a s we

may while we are making these investigations, as will be of
value to the Tederal Beserve Board In arriving at some
conclusions about that feature of the law* We should be
very glad i f your Clearing House Committee would consider

( G-29

j . B . Jorgaa


that question and make suggestions to us as to what in your
judgment would be the "beet method of handling i t , and as to
how those Clearing House f a c i l i t i e s should he provided by the
Regional Reserve Bank, in contemplation of the purposes of
the Act.

Would you be good enough to go into that and let us

hare your views on i t , I do not mean immediately, hut within
the next few weeksg
>Jr. Torgan: We would want to study i t rery carefully.
There i s not a section of the law that i s causing the
oountry banks apparently aore difficulty to know just how i t
i s going to be interpreted and what i s going to be done* We
hare more inquiries about that section of the law than about
any other part of it*
The Secretary of Agriculture: would not your committee
make a report on the matter for us?
XT, Torgan: To would be very glad to take i t up*
The secretary of the Treasury] We would be glad to have
suggestions. Ve are asking the same information from the
Boston Clewing House and Ute tfew York Clearing House and
other Clearing Houses; because ve would like to get a
compendium of opinion*
Xr. JtrgatfS

Of ©ourse, I t i s difficult to say what i t


j . B. Forgan


i means when i t says that the Federal Re serve Bank w i l l act aa
a clearing house.
The Secretary of the Treasury:

The Federal He serve Board

has the power to regulate that, and i t may prescribe a

We would like to hare the views of the Clearing

Rouses as to what system would be most acceptable and would
t e s t accomplish the purpose of the Act.
There i s another point here that we should be glad to
hare as much light on as possible.

In Section 13 of the

Act, Mr. Torgan, the powers of the Bederal Be serve Banks to
discount paper for member banks, i t i s provided, and X will
just read this paragraph:

"Upon the endorsement


of any

of i t s member banks, with a waiver of demand, notice fcfd
protest by such bank, any Federal Reserve Bank may discount
notes, draft a, and b i l l s of exchange arising out of actual
commercial transactions; that i s notes, drafts and b i l l s of
exchange issued or drawn for agricultural, industrial or
oomasroial purposes, or the proceeds of which have been used,
or are to be used, for such purposes, the federal Be serve
Board to hare the right to determine or decide the character
of the paper thus eligible for discount within the meaning
of this Act."

J. B. Porgan


Vow the definition of moh paper i s one of the things

which the Board w i l l hare to deal lith at an early stage of
like to
i t s organisation; and we ehouId/have the views of the
different clearing houses as to what would be a proper
definition of paper to meet the requirements of the Act,
and also as to what, i f any, uniform practice in the form
and tenor of such commercial paper should be prescribed*
Because I tain i t when this Act goes into f u l l operation we
w i l l in tine create a kind of commercial paper whioh w i l l
be more or l e s s uniform throughout the country, in order to
meet the requirements of this Act and the regulations of
the federal Reserve Board, and i t i s a very important subject*
V* Morgan: y e s , i t i s .
The Secretary of the Treasury; And we should like to hare
the opinions of the different clearing houses on that
Hr. Porgan:

T can st&to just in a word, i f you care to

have me do so now, a general idea of the subject*
The Secretary of the Tceacury: Yes* X should say, however,
before you start, that there are some provisos there that
i t i s not necessary to read at the moment, relating to this
definition; but for the purpose of this discussion you my


J. B. Torgan


{proceed on what I hanre suggested.
ji Kr. Forgan: The Monetary Coami salon that prepared the

AldrlohBill, had more difficulty with that subject than
almost any other; end I think that the Committees of the
House and Senate that prepared t h i s Dill also ran up against
the same difficulties.

The fact of the natter i s that they,

la wording the b i l l , tooth the old Aldrich b i l l and this M i l ,
hare taken foreign ideas, what I consider absolutely foreign
ideas, such as when I was a foreigner I used to do business
undor, but which do not exist in this country*
Commercial paper or a commercial note, used to be a note
Slrea by a firm or corporation

that bought goods from

another firm or corporation, and i t was discounted by the
firm that got i t , with their endorsement.
way business was done.

And that i s the

The manufacturers gave credit to the

jobbers, and the jobbers gars credit to the retailers, and
the Jobber paid the manufacturer by note and the retailer
paid the jQbber by a note, and that was extended a31 through
our commercial life*

Vow that practice s t i l l prevails la

A large concern like one of our large houses here,

l i k e sex shall 71 eld & Company, except that they nerer give
anything except cheeks, X belietre, but t mean any concern


j . B. iforgan

that di d ha* that line of lmsIness —
The Secretary of theTreaoary:

That sounds abnormal, does

i t not?
wr. Jorgan: yes. Any firm in that line of bastness doing
; a ousinessof that kind that had to use their credit, instead
of going to their "bank and borrowing their money on tteir
own note, would go to the manufacturer/ and would arrange
for their goods, for the manufacturer to draw on them at
60 or 90 days, and that draft would "be made when the goods
were shipped, and the firm accept ad i t .

Then i f the firm1 a

credit i s not sufficiently strong for i t s paper to go in
the market, i t goes to i t s lank and gets i t to accept for
i t , so that there i s a regular lot of commercial acceptances
which represent goods sold and deliyered, and the deliverer
of the goods gets the paper, endorses i t , and s e l l s i t on
the market or discounts i t at h i s bank.
Vow we ersntually developed away from that, and today,
to go to the other extreme, if any Jobbing house or any
manufacturer or pretty nearly any respectable retail house
BOW that has not got eredlt of i t s own to go to i t s sank
and discount i t s o « paper and pay oash for i t s M i l s i s on
a 'blacklist;

The poorest paper we hare, and we hare verj


J . B. Morgan

l i t t l e of i t in any of our hanks in Chicago, i s the paper
given "by the purchaser of goods for fte goods.

There are a

few lines of business where that old system i s kept up, hut
there are very few lines, and such paper i s the poorest
paper we hare In our hank.

The best paper we ha* got i s

the paper of the strongest houses, who hare credit of their
own, who make their own paper, go direct to their hanks
with i t , or to a broker and place i t on the market and get
the cash and use the cash discount*

This system of cash

discount i s the thing which has produoed that.

The whole-

sale houses and the manufacturing concerns whose customers
do not take the cash discounts, in the exchange of credit
information between these houses *ne with another, the beat
thing they can say about their customers i s that th«r
always take the cash discount, and i f thcybave anything to
aay against then, they say they do not take the cash d i s count*
Vow then that has created an entirely differ A t kind of
coau»rcial paper.

And when this matter i s settled,an* you

gtt down to the last analysis! the federal peserre Board
cannot do anything hut make a rule which w i l l apply to
business as i t i s ; you cannot upset a l l these credit

J. B.



arrangemeits, and i t would bo folly to attempt It; because
i t i s much better, much more conservative, to have i t as i t
i s than, to adopt the old way. You can easily see that the
expansion of credit i s not nearly as great.If the concern
that takes the ore out of the ground i s going to s e l l the
ore to the furnaoe on credit and take the furnace's note for
i t , and the furnace concern i s going to s e l l i t s iron that
i t produces to the manufacturing concern and take i t s note,
and i f the manufacturing concern i s going to sellmto the
Iron jobber and take his note, and the

iron jobber i s going

to s e l l to the retailer and tales h i s note, you hare f i v e or
six note a afloat at the same time, representing the same

XT you reduce a l l that business to a cash basis and

nave the ore producer, the miner, only borrow^ wat he requires
at his own bank to carry on his own business, and i f you
have the furnace concern only borrowing what i t requires on
i t s own credit, there i s a much l e s s floatation and expansion
of credit than there i s the other way,
Tfcey oarry i t to such an extent that in England a tailor
do4t not expect to bo paid inside of a year by anybody.
How we do not have any such credit system as that. . Ye pay
our b i l l s ,

we are much nearer on a cash basis than any of


j . B . Porgew


thece foreign countries, and that w i l l have to "be recognized,

jand the paper that 1B issued for commercial purposes must

be understood to be used for commercial purposes; if a
concern like the International Harvester Company or any of
those concerns places i t s paper on the market and uses i t s
money in i t s business, i t i s used for commercial purposes,
and i t w i l l have to be construed in that liberal line,or
the federal peserve Board will not get the best paper that
i s to be had*
The Secretary of the Treasury:

That i s just the question

we are examining into, and that i s the kind of light we want,
to enable us to determine uhat, intto light of our practice
and experience In this country, i s the best definition to
apply to commercial paper eligible under the Act,
Mr. Morgan: These foreign bankers w i n hold up their
hands at us In astonishment, that we w i l l lend our customers
money on their o n name*
over there.

Such a thing 1* not known at a l l

They always want more than one nans, and if a

customer goes to a bank they hare to give a bond sometimes
with two or three people on i t , to get mon^y.
The Secretary of the Treasury:

X tato* i t the powers of

the federal Reserve Board under this Act are ample to deal


J. B, Jtorgan

with this as these things develop.
Kr. rorgan: T C B .
The secretary of Agriculture: And i s i t not better to
leave i t in thi s broad way, instead of making arbitrary
«r. IFttrgan* Yes, so i t can "be construed to include i t .
X think i t covers i t when i t says can be used for commerc i a l purposes.
The Secretary of Agriculture: tx* heard t h i s thing discussed by a number of bankers a year ago when i t was up, and
they tried to arrive at a definition, and could not do it*
ffr. Morgan: gr. Vender lip of Hew York, aud myself, were
appointed a Committee at a meeting of bankers at Atlantic
City once, when we were revising the Aid rich, b i l l , to draw
up a definition, and we drew i t as near as we could, but
ware not satisfied with i t ourselves, and we came te the
condus&ea at that time that the language ebon* bo made as
broad as possible in order to cover the best paper that i s
to bo had*
The Secretary of Agriculture:

T* has the advantage of

being subject to easy revision i f you want to modify i t .
The Secretary of the Treasury* The purposes of the

i, G-38

j , B . Morgan

j, framers of the Aot was to lodge that power where i t could be
I exercised, and then if, t-i: sxperience developed and showed
I that changes wore necessary, i t could he dealt with.



f very much hotter to hare left i t in that fom. aa i t i s ,
irr. Morgan: I think so.

The Secretary of Agriculture:

That covers those two

points as to Section 15 and section 16.
30* • Morgan; You want the Conunittee to prepare a "brief or
i;! a statement?

The secretary of the Treasury: Vo should be elad to have
ft brief from the Committee upon those two points, and i f you
w i l l also give us the nap, giving of course, the capitalisation of the hanks which they will ha\e under.the Act, we
should be obliged to you.
Wr* Torgani You want the map and the Clearing House
queetion and the —
The Secretary of the Treasury: And the definition of
commercial paper*
Xr« Porgan: Yea.
The Secretary of the treasury*

You have a copy of the




&qy X take one of these naps?

J. B. Forgan.

The Secretary of the Treasury:

Y e s , take several of them,

so you w i l l have an opportunity to sutsnit an a l t e r n a t i v e
The Secretary of t h e Treasury:

T i l l you kindly s t a t e

your f u l l name and your occupation, f o r the record*
Mr. Reynolds*

George K. Reynolds; President of the

Continental Commercial national Bank of Chicago*
The secretary of the Treasury:
without our s t a t i n g i t *

You know our problem

T i l l you be good enough t o g i v e u s

your views?
}ir, Reynolds!

T e l l , we of Chicago fin d ourselv es somewhat

embarrassed In approaching a discussion of t h i s question
f o r the reason that we f i n d upon investigation that Chicago's
supremacy, so far a s her trade r e l a t i o n s with the r e s t of
the world are concerned, makes her practicality « centre of
that great area which represents the preponderance of our
I n d u s t r i a l , f i n a n c i a l and commercial r e l a t i o n s , a s i d e ,
perhaps, from what might t>e denominated a s speculative in
i t s character.

To recognise, however, that the formation

o f t h e s e Toderal Reserve Banks e n t a i l s a n e c e s s i t y f o r

0, II. Reynolds


certain things to he accomplished, particularly with
reference to fee number so formed.

And t think after a

careful study of the whole situation, the peotffc of Chicago,
irrespeotire of their lines of business, ha-© come to f e e l
that we should approach a discussion of this natter from
the standpoint f i r s t of desiring the most efficient oervioe
when your system has he® entirely inaugurated, and i s in
operating order.

Ye belieye that this can be done best

through the following of pertain general lines, namely, that
under certain lavs of business, the natural trend of business
i s from the vast to the east, and I think tha t would apply
rery generally as a general prinoiple.

There are exceptions

to that, however, which are created through the building
here and there of arge c i t i e s , unusually large c i t i e s , of
the importance of Chi cage and irew York, and so forth*


ws were to go into a discussion of this matter with refer*
enoe to asking for the largest area that we could possibly
get, and would undertake to *stot up our suggestions with
factsand figures, we would probably occupy your time an
hour or sore ia eplslniag to you what we hare in Chicago
that i s the largest of i t s kind in the world in that class
ef business* ve assume that you do not want that, and that


0. K. Reynolds


i t i s not necessary t and that you are, in a general way,
fariliar with a l l those conditions.

60 in the discussion

of this natter we hare tried to Trail the matter down to the
point of taking as l i t t l e of your time as may he possible,
and trying to conform to practical suggestions which, if
adopted, would result in the suit sff ioient service, in con*
siderlng the whole number of banks to be organized.
I think we would a l l agree upon the point that the
smaller the number organised at the start, the better.
There are many reasons for that.

plrst of a l l , the whole

thing i s somewhat of an experiment,

while we hefre confi-

dence in the outcome of i t , yet anything which is a change
sac from old time methods and settled conditions

to a new

order of things i s fraught with more or less peculation,
and i t i s all a change*

Therefore we bell ere that the

sm!3sr the number of banks started at the beginning, the
better i t w i l l be} upon the theory that i t w i l l divery from
natural «hannels l e s s business into other and unknown
channels,: or rather, i f I may so express i t , as against the
tide, thafa would be the oase if a very much larger number
were to be eetabli shed.
Chioage, as has bees shown by the gentlemen here in a



G. X. Reynolds

very brief way, cover s/tfiite a large

extent the entire


! country.

¥e oerve from Chicago both finanoial3y and commer*

jj cially & very large percentage of feusinesfi to the whole


Of course as we diverge and get away from Chicago

the proportion to the whole of the Business in thise territories i s diminished, While you might say on the one hand
that the illustration of Marshall y i e l d & Company was not a
conclusive one, for the reason that i t i s an exceptionally
large ooncern and therefore covers the whole country, or
': you might say the seme with reference to Mr. Morgan's "bank
or our own hank, for exauple, yet they are only topical
of a31 the other lines of lraoinese in Chicago, except perhaps
that thqr represent rather larger figures.

Illustrating the point that you nade a short time ago,

1D% Secretary, with wr, Morgan, as to the natural trend
being frem the west to the east, X would state that with
one exception, I think, we have in our own insltution a
larger volume of deposits from correspondents in pennayl' vania, for example, than any other state, X say with the
exception of one and possibly two states.
The secretary of the treasury;

or i s i t scattered?

I s that mostly from


0. V. Reynolds.


Mr. Reynold*:


i s mattered.

You take in Pittsburgh

[ and Philadelphia, of course a large proportion comes from
; those two cities*

It illustrates, and T «pote i t only to

!, illustrate, the point that where a city becomes over large,
|i unusually large, that i t , to a certain extent, breaks that
general rule of il\a trend froa west to east to a certain
The Secretary of the Treasury: Pardon me ibr interrupting
you, but I would like to know how significant that i s , to
what extent, how much in volume or what percentage of your
tot til business does that represent, have you any idea?
MJ\ Reynolds!

I could, of course, give you figures with

reference to our own business which would give you exact
data, on that,

X am quoting from figures takm in November,

which represents the lower.t average balances we have had
at any time during the year*

Our figures on that date

would show that in Pennsylvania, for example, we had at
that time, during the month of flovember, #7,400,000 of
The Secretary of the Treasury:

what percentage i s that

of the total?
Mr, Reynolds*

I do not know what the percentage would be,

G. H. Eeynolds
V <v

but i t would bs #95,000,000 t o t a l and ydu can get an idea
as to the proportion.
The Secretary of the Treasuryi

About eight per cent.

l£r* Reynolds* Yes* Bow the same thing would apply, going
to California, in like manner; we would hare five millions

If you go to Texas, we would have not so much, a

million and a half there.

I only meant to quote any figures

to illustrate that one point.
The secretary of the Treasury; Are those reserves only
or entire balanoes?
xr» ueynolds*

They are entire balances combined national

and stats baxks. We have them divided.
The Seoretary of the Treasury: what percentage of those
balances represent reserves and how much i s not reserve,

oouldyou say?
Kr. Reynolds*

Tha major portion of them would be reserve*

I do not know exactly what percentage i t would be.
The Secretary of the Treasury! 75 P»r cent?
Mr. Heynoldsi

Oh, y e s , I should say fully 90 per cent

would represent the reserves of those banks.
Secretary of the Treasury:

So that the amount kept

tor exchange purposes i s about ten per cent?


0. M. Beynolds.

Kr. Reynolds: Yes, "but at the same time th#- use a U of
i t , 'because a l l the balances of those large tanks would he
turned over every two or three days, and sometimes as often
as onoe a day.
How we believe that the natural territory which should he
given to these various reserve banks, or speaking for myself
in this particular, I should say, should he confined more
perhapB along east and west lines thin they ehou22 north and
south, because as Mr. Shedd end other gent 1 den hare shown
you, the natural trend i s more east and west.
The Secretary of Agriculture: That would, apply more
to the northern half?
ICr. Reynolds! Yes, because the trend i s flrom the south
to the north and the northeast, probably more northeast than
north, because while our relations with the extreme south,
Texas and the southwest, i s growing rapidly, yet Sew York
lias greater relations with them financially than we do*
The map which Kr. Velton has brought to your attention
and which you w i l l see later In finished condition, creates
what we might designate as two d i s t r i c t s there*

In the

discussion of i t locally here some of us regarded i t as
creating what we might c a l l an inner district comprising


G. K. Reynolds

the territory which Mr. Porgan indicated a s belonging
properly to Chicago, and we should feel that however large a
number or small a number of hanks should he established,
that that ought to he by aU means in our territory.


assuming that me Twin c i t i e s should not have a hank, that
territory would he extended and would create what they will
show on that nap, when i t oomes to you, as a secondary or
outer territory*

Probably 80 per cent as nany people of

the Association of Commerce are comprised in the whole
territory as they are in the inner territory*
80 that sunning up our territory under those rules, i t
might probably he regarded to consist of Indiana, I l l i n o i s ,
Iowa, Kiohigan, Wisconsin and possible a l i t t l e of the
southern part of Minna got a, flow we would probably hare to
give a l l of southern I l l i n o i s to Missouri, and we would get
from Hi • a purl or should get probably some of northern
KissourU, so that while we have made these lines


lines, v4 think in Hie adjustnent of the differences in the
various ftates they w i l l break about evm with the other
places. ;
The Secretary
Secreay of
o the TVttmryi
Ty Tt would he decidedly
useful t f the Committee I f in considering that question you



1 3 9 2.
0. M. Reynolds.

would indicate Just what part of these states should be
'divided between given c i t i e s .

You gentlemen know, for

instance, about southern Illinois better than we do* That
i s one of the purposes we have in mind in having these
hearings, to see what would do the least violence to the
ordinary course of business and exchange and commerce in
the different parts of these states, in creating this
Kr. Reynolds:

X might say for your record, and X would

like to hava i t in the redord, that the banks of Chicago
have not eent o\it any letters or circulars soliciting anj?
assistance from their correspondents that could in any wise
ibe meant to wield any influenoe in the location of a federal
Reserve Bank in this c i t y .

Many cities that have been

making efforts to secure these banks havs done so. We have
been sent many of them from various sections of the country
jbut we have adhered to the theory that we believe the ooxzsnd*
cial and industrial supremacy of Ghicagtit i e sufficiently great,
that the people outside of this district> when they find they
cannott got banks in their l o c a l i t i e s , and they cannot all get
them, their preference for Chicago would probably be more influential with you than i f wa should undertake to put v$ a


G. K. Eeynolds


here which would he a elfish In i t s purpose.
!: The secretary of the Treasury:

I might say in that


jconnection that any campaign for any particular c i t y t of
course, w i l l have no influence with the Committee, hut the

{only thing that i s going to determine the boundaries of

[[these d i s t r i c t s or Qie location of these Reserve Banks im

the facts which determine them, and It i s those facts

which we are trying to bring out, to reach a just conolttfilon.


1 Ttr. Bcornolds!

T would not he afcle a t the moment, hut


jhsfore leaving here I think X could prepare a recommendation
[Which you voider stand would be measured \xy our own esperienoe
jimore than hy a gueso, "because a gueoe means nothing unloae
i l t i s tacked up ty figures*


f ol Ph
George M. Reynolds

We have hundreds of letters from various sections of the
country, and if you will allow me, I would like to Introduce
one or two things here that would illustrate this very for-

j; Here is a latter addressed to me from a correspondent of
ours in Evansville* Indiana, carrying with it a resolution
passed by the Clearing House Association, — Evansviile as
!; you know is in the extreme southern part of Indiana — i n

which they pray your committee to give serious and careful
consideration to the appointment! or rather the designating
of that city in the Chicago district.
The Secretary of the Treasury: That may be filed*
Mr .Reynolds: I will file that. I have another telegram
that will bear upon the general subject that I would like
to present for general information*
I can bring to you hundreds of letters frees cur correspond9


enis, located at various places, who have written us , moat
of thea,beoauae they have had letters from other c i t i e s
in the
soliciting their co-operation s*r establishment of banks,
but this ooaes to me from Helena, Montana;
"Geo* Me Reynolde, President;
Rapliee receired to inquiries from National Banks in !


George M. Reynolds.

K-Tatana representing total capital and surplus of eight Billion dollars show that eighty par cent seleot twin Cities
twenty per oent seleot Chicago as first ohoice for location
of Federal Reserve Bank.

Ho other oities mentioned.


second ohoice eighty per cent ssleot Chicago and thirteen pe
oent seleot Twin Cities, all other points seven per oent.
Replies from state banks of Montana representing capital and
surplus ten million dollars expressing first choice location
of reserve bank eighty-three per cent seleot Twin Cities,
nine per cent Paoiflc Coast, five per cent Chicago, three
per cent Denver, and for second choice sixty-four per oent
seleot Chicago,eight per oent esleot Twin Cities, six per c
select Paoifio Coast, four per oent select Denver, eighteen
per oent no choice."
The crux of that telegram is that it represents what every
thine; that we get represents. For instance, in these western and northwestern and southwestern cities, I think the
feeling pretty generally is that if they do not get a Federa
Reserve Bank In their own city, that their purpose, like
these people, is to cozes into the Chicago district.
We have believed that we ought to be allowed to have a

district from Chioago practically to the Rocky Mountains,


George U. Reynold a.

between the lines, we will say, of a line running through
the northern part of Kissouri up to poaaibly a line taking
in a small portion of Minnesota, and that we ought to run to
the Rocky Mountains, and furthermore that we think that we
ought to extend east to a r°int taking in at least the northern half of Indiana, and as I believe, the western half of
Ohio and Uiohigan*

I believe those territories! If there is

n : bank looated In Cleveland, for example, would much prefer
coming to Chicago, because the greater per cent of their bus
iness comae here.
The secretary of Agriculture: Tou think Cleveland would
prefer to come to Chicago to going east?
Mr. Reynolds: I think so, yea air*
The Secretary of the Treasury: How about Cincinnati?
lir. Reynolde: I should think that would be about an even
break, Mr. Secretary*
The Secretary of Agriculture: Ur, Reynolds, this territory
that you have just mentionea/ls within comparatively easy
reach of Chicago*
Mr. Reynolds: Yes, sir, just a few hours.
The Secretary of Agriculture: About what tisie would you



George M. Reynolds*

ttr. Reynolds:

Over night, any of the territory that I

have mentioned would re&ch Chicago, with the possible exception of Eebraska or Colorado.
The Secretary of the Treasury:

The Dakota© would not be?

The Secretary of Agriculture: Tou did not mention those
in this last territory.


Mr, Reynold©:

I eaid to the Rocky Mountains*

The Secretary of Agriculture:

Burpose you take Montana,

I the raV.otaa, Wyoming, Colorado and Nebraska, you would be
perhaps 34 to 36 hours, or
Mr. Reynolds: Tee, eirj that is right*

We are assuming,

I Mr* Secretary, that there would be a banv established in the
Twin Cities*
The Secretary of Agriculture: But waiving that assumption,
what should you say as to the convenience or inconvenience
of handling that business at that distance?

I would eay that the convenience would be

favorable to them, rather than St. Louis* for the reason
that practically all their product coasea this way.
There is one point in connection with the consideration of
this matter that it seems to m* is very important.

The nee-

- for th# use of money at the tim# crops are raised

George H. Reynolds


is very urgent, but only for a short time* The real requirement, for the money during eleven months of the year at least
is in the center where the market^ for those things are created, and we have in Chicago a situation where we have large
warehouses, cold storage warehouses, grain elevators, and we
havelarge paoking concerns here. I will be followed a little
later by a gentleman or two, who will give you some figures
representing what the stock yards territory of Chicago means
in dollars and centa in the turn-over of our business, therefore, I will not undertake to discuss it.
The Secretary of Agriculture: X want to emphasize and just
bring out one or two points in this connection* What should
you say as to the convenience or inconvenience of handling
busineaa where It would take from 24 to 36 or 45 hours to
reach the regional bank?
Ur. Reynolds: I don't think it would make any difference
how long it takes to reach it, provided the trend of their
troduot was in the same direction, these things that we have
the tuxn-over on*
The Secretary of Agriculture: Just one point*
hare said nothing about branches.

ilr* Reynolds: Ho,

So far you


George M. Reynolds*

The Secretary of Agriculture: Suppose a branch bank were
established at the Twin Cities or Denver, or any other place
out here, how would that relieve the situation?
Mr* Reynolds: If I understand the bill correctly, it would
serve the same purpose that the bank Itself would*

That is

my interpretation of the bill*
The Secretary of the Treasury: The bill is mandatory in
that respect*

You trust establish branch banks*

Mr* Reynolds;

I am assuming there will be some branch


banks established*

Of course, the same recommendation would

apply to that as to the other*

I should like to see the

fewest number established to begin with, until we are sure
that we oan use them, until we are sure they will be selfsupporting.
The Secretary of Agriculture: You want evolution?
Mr, Reynolds: I think this whole plan should be developed
along lines of self-support after they are organized, and
that oan be done*
The Secretary of Agriculture:

So far as the law goes, the

only difference would be in the selection of directors*
Mr* Reynolds: Yes* sir.

The secretary of Agriculture?

One other point* Some gen-


George U. Reynolds

tlemen discuss this question aa if the whole character of ordinary banking transactions and inter-relations were going •bo
be changed.

Tour bank will continue to do business just as

before with any part of the country.
lir. Reynolds: We hope so.
The Secretary of Agriculture: This establishes reserves,
and perhaps nakes the places for holding reserves, and perhaps changes in the clearings, and a number of other things
that are not iumediately germane to this particular subject,
but I just wanted to bring out and call to your mind the fait
Mr. Reynolds: I think, Mr. Secretary, there is a great
deal of rcisapprehension in the minds of thepeople with refer-*
enoe to the importance of these banks, as to size, and 00
The Secretary of the Treasury: There is a great deal more
misapprehension as to their funotion.
Ur. Reynoldst

Tee, but what I was going to add is this.

X don't think it is so vital, that it seems so vital to the
bankers thesselves, whether the federal Reserve Bank in any
community gives a larger service, as it does the general

business interests of that oomani&ity. They want it to be so



Beorge It. Reynolds


| that the institution established in their territory, or the
j territory to whioh they are contiguous shall be sufficiently
large to justify all their requirements.
The 8eoretary of the Treasury: Doesn't that idea become
fees8 important when you o en aider that all these units are
coordinated very effectively through the Federal Reserve Board;
also beoauee thece banks have the right, under certain conditions, to get currency from the Federal Reserve Board for
the benefit of the member banks?
Mr. Reynolds: I think I can answer that better by saying
that in going into a discussion of the bill, it did not seem
to me it made so much difference there as it would on the
interpretation put on the law. The Federal Reserve Board
has a very wide latitude, and you indicated that here this
norning, but I do not believe it is going to seriously interfere with credit relations between business houses and with
banks anywhere, I don't believe it is, we hope not, at least .j
The Secretary of Agrioulture: I thought I caught a suggee-j
tion in your mind on this point. What is there in the ostab-j
lishment of one of these banks in any community, the oommun- j

ity as auoh . 8OB0 communities seem to look upon it as they
would getting a great corporation for public building.


"eorge 11. Reynolds*

Ur. Bpynolde: Local pride> I think, more than anything
else, probably,

I do believe, however,that an equitable ad-

justment of the matter would be to follow the lines of coro~
xneroial and industrial supremacy, ae in anything else*


the convenience and cue ternary course of trade can be observed
in t h i s , and these banka can be located, there would be more
aotivity for every city involved than if you merely limit
the bank —•The 8eoretary of the Treasury:

Have merely an arbitrary

Mr. Reynolds:

I would oay so.

The Secretary of Agriculture:

I did not mean to interrupt

lir* Reynolds:

I am only here to answer such questions aa

you want aa best I can, and I only have in mind making these

I have no specific recommendations to make at

a l l , they are only suggestions*
We, as Chicago bankers,carrying accounts of bankers in
every city of importance over the country* have been s o l i c i t ed repeatedly to do what we could to help other oo munitles,
and as I have already pointed out, we are in a l i t t l e em~

bftrrasament a« to a ff*

expression of our opinion; but I am


George M. Reynolds.

going to waive the chance of our be inc. criticized, and make
a few

ointa on this eo far as I see it, if I may do so, up n

the theory that that which is beat for the whole country, if
you oan arrive at that, will be beet for all of us.
The Secretary of the Treasury: As a matter of fact, lir.
Reynolds, we ar« all performing here a patriotic duty ,'? to
eatabliah a new ayetem, and we must distegard purely local
considerations, as I said before, or anybody*a feelings, get
at the faote and get the wieeet possible results. In that
ofirit, we will be glad to hare the subject discussed at all
Mr. Reynolds: I took a map, took a small map to the boys
in ouroffice whose duty It is to handle our business from
banks, both with reference to incoming items and outgoing
items, and asked them to mark upon it the different points
whloh they thought would be proper plaoes to hare located
eight of these banks, and I am going to give them to you for
dieouaeion, without recommending them, because I do not agr«*
with the points as they sake them, but on the figures showing
how we arrive at conclusions, they may be a little helpful
to you in the study of the general situation*
They brought that to me with the cities of Boston, Sew

George M. Reynolds

York, Chicago, St. Louis, Kew Orleans, Denver, Seattle and
Sam Francisco marked.
Bow, just taking a survey of the nap, it would 00em to me
that that might be a pretty fair distribution geographically,
but when you .take into oonaideration the capitalization of
the banks in this territory, i t is very disappointing.

You will see by that that Sew York i s allowed all of that
eastern territory down to the lire of Georgia.
Georgia, Alabama, Mississippi, Louisiana, and a part of
Texas, and a l i t t l e off of the south of Arkansas are put in
to the Kew Orleans distriot with a view of creating & t e r r i tory there sufficiently large to start a bank in that territory.
Those points when you cone to figure, disclose the fact
that to establish banks along that line, the Kew York district
would have a capitalisation of $374,000,000, and a surplus of
1367,000,000, and with that capital and surplus, i t would
give them a bank of about $38,700,000.
Boston wculd be given a bank of about 111,000,000 capital
on that basis.
Chicago would be given a bank of about $24,000,000 capital.

8t. Louis would be given a bank of about $11,000,000 capi-


George H. Reynolds.



And Kew Orleans, with all that territory in i t , would have
only about §5,000,0C0 capitalization.
When you get to Denver, it would only give them $2,110,000
oapital, and when you got to sanFranoisco they would have

When you get to Seattle they would only have

§2,400,000, neither one of whloh wot Id be large enough.
It seems to me that the effort to put a reserve bank in
Denver must entail either one of two things, either that the
territory must be made large/ enough to take in Omaha and
Kansas City, and sake a very large area and send their business up stream, or you have got to give them a territory
will extend over almost to the Coast;

and i t seems to me

that if you are governed by capitalization, possibly, that
you are going to establish for the present, at least, only
one bank on the Pacific coast, probably at S&n Franoiaoo, as
that Is the teOst central point.
The Secretary of the Treasury: What would you do at Sew
iir. Reynclds:

Kew Orleans i s the most difficult point to

handle that I know of,

Kansas City and St. Louie, Just across the stats frco each


George &• Reynolds

other, taking oare of a very large area geographically, and
very different territory, too, as a rule*

If it were not

for the creation of a bank in Sew Orleans, i f you allow the
St. Louie district to go down to Eew Orleans with a branch
down there, then another bank could be put in at Kansas City
very profitably that would serve a l l that southwestern territory, and i t seems to ice it would solve that problem very
much better than by putting one at Eew Orleans, perhaps.
The Secretary of the Treasury^ You think that Kew Orleans
would be wall served by association with St. Louis in that
way, I mean with a branch of the St. Louis bank?
Mr. Reynolds: I am as Burning, yea, that*&*branoh banks will,
do In their communities e aotly the same thing that the banie
themselves will do.
The Secretary of the Treasury; My question had reference
more to the courses of business, with what oity woild Rew
Orleans have a more intimate relationship?
Ux. Reynolds: It has a scheme of relationship with St.Louis
and Chicago, of course, but a rcore intimate relationship evtn
with Eew York than either of these.
The Secretary of Agriculture:

This map as i t i s drawn

here raises another problem that I wculd like to present.

f bl4b

George li. Reynolds

I It inoludes the whole south. That is a distinotly borrowing
< community,isn't it?


Ux. Reynoldo:

f a l l , yesi particularly that section of i t

s t i l l aJhores to one crop, of cotton particularly•
The Secretary of Agriculture: Do you think it ie a good
idea to create a district that is almost exclusively a bor! rowing district?



Mr. Reynolds:

I think, Mr. Secretary, that that ie a dif-

fio : ;lt problem that you gentlemen have to solve.
The Seoretary of Agriculture;
l i t t l e aore fully*

Let ae proceed with this a

Wo had a suggestion the other day for tbe

formation of a district item the Potomac to the end of Florida*

Z raised tha sane question there, and asked whether

or not i t would not be really better for those states In tha
| south to be oonneoted with communities like Maryland and Pen*
sylvania, where you would hare a combination of a landing
oo asunity and a borrowing ocoaunity, and also of an indust r i a l and agricultural.

That shows tha provieIonia import-

| ant in this direotion, ien't it?

Mr. Reynolds:

I think i t i s ,

X think that our ciietriot



I here would come?nearly following tha line of averages, tha

i law of averages, if we could have a l i t t l e of tha south, tot


Be or go IU Reynold©.

example* but I realise that it would be almost a physical
impossibility to work that out.


The Secretary of the Treasury: The district as you read

jit out here lacks diversification, doesn't it?

Mr* Reynolds:

It lacks diversification in some respects,

jj lacked diversification for borrowing froa the west, aepeo| i a l l y , because you have taken In Ohio and Michigan and Ind] iana* and there are very large financial transactions in the

I nanufaoturing lines that require large amounts of capital,
vrhioh would offset the laok of borrowing a great deal of the
time during the year from these western agricultural section*
and I have had that in mind somewhat in the recommendations
which I have made.
The seoretary of Agriculture: In this nap here you have
another district that is wholly borrowing* and you would nat-

i urally suggest that that be related to these distriots that
are stronger financially and of a different oharaoter,
Mr. Reynolds: My recommendation was that we should go
from Chicago to the Rooky Mountains. We do not take in
large sections over the width of the territory, which would

give us here, for example,you can see if a bank in established in the Twin Cities as we assume there will be, and as

b 16b
George U. Reynolds

we believe there should be, that would follow the lines east
and weet the same way clear to the Rooky Mountains, and should
do so.
The 8eoretary of Agriculture: You do euggeet the establishment of a Be serve bank in Minneapolis?
Mr. Reynolds: Or St.Paul.
The 8eorotary of the Treasury: Tou are oareful to say one
or the other?
tr. Reynolds: I am going to allow them to settle that with
you gentlemen as best they may.
The Secretary of the Treasury: Ur.Reynolds, if you extended
Chioago as far as the Rooky Mountains, taking in Denver, you
would do that upon the theory that Minneapolis or St. Paul
should have a bank, and that wculd take the rest of the territory in the northwest only as far as the Rooky Uountains*
or through to the Coast?
Mr. Reynolds:

I think they are asking for a territory

through to the Coast. I have not myself- had any idea of
their territory extending out there, but it does seem to me
that a division of the territory along this line, with a possible solutionof the natter, so that Kansas City and St. Lou

la sight both have banks, would be & very good one. I know


George U. Reynolds.

there lsagreat .-leal of criticism from the outside because
they are so oloae together.
The Secretaryof the Treamiryt

They are not as close toget-

her as Boston and Ken York, are they?
ttr. Reynolds: So, I don't know the exaot distance. I will
expose rty ignorance of geography if I answer this question.
If a larger number of banks are to be established, s#t& the
sphere of activity of the Sew York and. Chicago banks is; to
be restricted, there la the possibility of the establishment
of a bank in Pennsylvania or possibly Ohio, some place that
would serve very satisfactorily the area in there. On the
other hand, I should think that Philadelphia or Baltimore,
particularly Philadelphia, could serve as you have suggested,
Secretary Houston, that whole Atlantic Coast, if you want to
restrict lew York.

ire are only talking about possibilities.

The Secretary of Agriculture: X know, but there are certain ideas that we want to bear in mind, and that w a what I

had in mind in »y question in reference to that south Atlantlo Coast eeotion, aad Philadelphia.
I suppose you would think that B O far as possible in normal times, eaoh of the districts should be eelf-eufficienU

Mr. Reynolds: I think that is one of the principleB that


George tt. Reynolds•

• should be followed as nearly as oan be,



The Secretary of Agriculture: That is what I am trying to


get light on, whether or not if we were to establish such
districts as you suggest here, or a south Potomac district,
we should be acting wisely, in view of the fact that they
are normally borrowing communities?
lir, Reynolds: I don't see howit oould be made to maintain
itself profitably and normally, because—
The Secretary of the Treasury: You mean on that basis because of the proportion —
ilr. Reynolds: About six months in the year there would
be no borrowing, and six months of the year ev^ry bank would
want to borrow a great deal &ore than they could furnish*
The Seoretary of the Treasury; Hr, Reynolds, in^this connection, Louisville seems to be included in your map there
[in the Chicago district. It is a very important city, and
you have Louisville, Cincinnati and Cleveland, I believe, in
your map,
Mr* Reynolds: Yes.
f The Secretary of the Treasury: Where does Louisville do
post of its business, with Chicago or with Eew York, would

vou say?




George 14, Reynolds*


Mr, Reynolds:

I Chicago.

I would gay that they do more business with

I had & l i t t l e conversation within three or four

[ days with two or three Louisville bonkers hero, who said thyy


were arplioants for the location of a bank in their city, but
falling in that, they wanted by a l l means to gat in this d i s trict.
Thie map that I have here i s a map made by my boye in the
office and does not represent my views, as I have already
pointed out, because I do not believe these banks could be
plaoed where they have been placed on thie map, but I brought
i t out and showed i t for tkcaaJce of dieousaion.
The Secretary at the Treasury*

Mr. Reynolds, wouldn't you

be good enough t o review thia natter yourself very thoroughly
tou doa*t have to do i t today or tomorrow, but later on, ae
Kr. Forgan ie going to do, or perhaps you gentlemen say agree
in the suggestions.
Mr, Torgant

Kr» Reynoldst

I iw>PKBROSA£ to do i t for our Co&siittee.

Perhaps do i t as the clearing houae oocmit-

The secretary of the Treasury:
Hr. Reynolds:

That will ba better,

I would say I would have no objection to giv-j

ing an opinion as to where i t teems to o§ there should* be


George M. Ray r-olds.

banks located.' It seems to me that there are certain—
The Secretary of the Treasury:


$ou mean cities?

There are certain points — I believe,

for inetanoe, Boston and Kew York and Chicago and san Franoleoo and Minneapolis and St. Paul — I will qualify that in
the re cord,-and St. Loulo and Kanaas City, with one over in


Baltimore or Philadelphia serving that east coast.

I probably have failed to mention in that recommendation

•I towns in whioh we have many friende, many correspondents, all
of whom we would be very glad to serve if we oould, but we
realise that the line will have to be drawn somewhere.

The secretary of the Treasury;

And upon the assumption

further that that can be taken oare of —
Mr. Reynolds: It has seemed to uo, lAr, Examiner, from wh*t
we have heard on this matter froa ou$jjide communities, many
of whom are hers to express their own opinions for themselves
later, that they nearly all wanted to get in this district If
they oould not get a bank of their own. You take Kansas City
and St. Louie, for exa&sple, many people say, well, they oould
not think of having banks so close togetherj but when you
take into consideration that three dollars, probably, of Kan| eas City business cones to Chicago to one to 8t. Louis, you




George M* Reynolds.

can understand that tha Kansas City bankers, if they do not
hfcve one of their own, T&culd prefer to octae here* tnd ^e
would like to have them,
; The Secret:ry of the Treasury:

Kansas City and St. Louis

a rather distinot tsrritory, do they net?
Mr. Reynolde:

They do, yes; and they both serve large

areas, particularly so when i t i s considered that if Kew Orleans i s not to be given a bank, that the St. Louie territory will be extended to the Gulfy
I do not know that I have anything else especial.

The gen-

tlemen who have preceded me have covered the ground pretty
The Secretary of the Treasury: t& are very much obliged,

la there anyone else from Chicago to be heard?

Mr, Reynolds: Mr. Fletcher and Mr. Heath, from the stockwould like to be heard.
The Secretary of the Treasury:
Mr. Forgans


Mr, Secretary, I have a telegram from Memphis

eking me to put in a claim for Memphis, and particularly so
n account of i t s g«»graphioal position and the fact that
t originates acre foreign exchange than any other southern

John Fletcher*

The Secrataxy o f the Treasury:

Would you f i l e t h a t , too ,

Mr. Forgan?
The Secretary of Agrioulturej

Pleaee g i v e your name and

occupation, Mr. Fletcher?
Mr. Ffctoher;

John Fletcher* President of the Drovera Ra-

t i o n a l Bank, Union Stock Yards.
The Secretary of A g r i c u l t u r e :

Mr,Fletcher, you have heard

t h i o d i s c u s s i o n , haven't you?

Tee, s i r ; I have.

The Secretary of Agrloulture:

We would be very glad t o

have any Information you can g i v e u s .

I t was suggested, Mr. S e c r e t a r y , by the

c l e a r i n g h o u s e , t h a i Mr. Heath and myself prepare 8one f i g ures that would g i v e your Committea an i d e a of the volume of
b u s i n e s s t r a n s a c t e d through the y a r d s .

I t i s ft p r o p o s i t i o n

that In the opportunity of p r e s e n t i n g one does not need t o
f e e l any embarrassment, i t i s r a t h e r hard t o be modest with


the f i g u r e s t h a t I have.
During the p a s t y e a r , t o make i t b r i e f , we have handled
through the Enion Stock Yards 1 6 , 4 5 3 , 0 0 0 head of l i v e s t o c k ,

John Fletcher

in round numbers, with a valve of §409,000,000.

That means

two million and a half cattle, 375,000 calves, 7,57C,C0Q
hogs, 5,900,000 sheep and 90,000 horses.
The value, to put i t in a fora that would be such as could
be remembered — I might suggest to you that since 1S00,
since the year 1900, there have been handled in the Union
i stock Yards over sixteen million head of livestock annually,
with an annual average value of |300,000,000.

That means an

average of ovar one thousand carloads per day, with an averiage value of over a thousand dollars per carload, or over a
million dollars worth of animals sold, delivered, and paid
for in cash on every business day, from January 1, 1900, to
the present time.

In the handling of that business of a a i t

lion dollars a day, an average of a million dollars a day,
i t means a turn-over in the two banks at the Cnlon Stock
arda of something like four billions and a half a year, or
15,000,000 a day.

It means that we have a section of land

n practioally the heart of this oity known as the tnlon
took Yards, whloh provides a market for cattle,hogs, horses,


heap and grain a l l over this territory, whloh has been dieussed here this morning, and providee a cash market which


nablee ue, without the use practically of currency — enables


John Fletcher

the farmors to run this stuff into the yards in trainloada
and have it handled, settled, and the money book in their
home banks on the following morning, the returns for it.
The Chioago market, of course, as you undoubtedly know, is
the center, the ohief distributing point of the animal food
products of the world. We run over there in the tlnion Stook
Yards a great soap industry, hiae tannery and leather industries; fertilizer products are handled, and it is a large
wool market*
The soap industry amounts to over §30,000,000 annually}
the fertilizer business runs 110,000 tons annually from this
market or over $2,200,000 at the present market value, and
the wool runs something over $10,000,000, about half of it
territorial wool, while the other halfis such as is taken
froa slaughtered sheep. Territorial wool is such as is sheared and brought into the market*

The leather and tannery bus-

inese is something like $13,000,000.
low, the packing industries, a number of the large paoking
industries there, of oouree, runup in exoess of a billion
dollars annually. The livestock industry, of which the oenter is in the union Stook YarJe l\r»$ in Chicago, represents

something over $000,000,000 head of livestock with a value

b 25b

John Fletcher

according to the figures I gave you of fire billion dollars*


and that will giro you an idea of vrh&t it means to finance
through this western country that sort of an industry.
I would just like to make this suggestion along with the
remarks that Z have made, showing something of the volume of
business there, and that is that the range proposition is
practically a thing of the past) that the packers and others interested in various markets of the country; but the
Texas range is practically a thing of the past} that ire are
now preaching to the corn belt farmer the importance of
raising cattle in this seotlon, and it is very important that
that be done, in order to maintain the price of land in this
That is all X have to eay.
The Secretary of Agriculture: Thank you, Mr. Fletcher.
The Secretary of Agriculture: Will you give your full
name for the record?
Mr. Heathi

W. A. Heath, President of the Livestock Sx-

ohange Rational Bank.
I question whether X

can add very much to what Mr. Fiet-

W« A. Heath.

oher has already stated. I have similar figures in regard
to comparisons here which may be interesting to you. The bill
itself makes £.n exception or specifies certain livestock
industries, and certainly justifies the figures that I will
give ycu.
Here i© our livestock territory around Chicago, which
covei*© -~ for instance, one large comnjnoion house told me
thia morning they had in one day a shipment from Alabama
ancir ixc& Washington, so that ycu can «ee hew wide the terri—
tory io*
The Secretary of Agriculture: The state of Washington?
iix. Hoath: Yes, state* In the handling; of this livestock
nduBtry* there are six or seven principal markete other
ban Chicago, what they call the river markets, St« Louis,
:ansas City, St. Joe, Omaha, 8ioux City and

St. Paul. Thes

ire certain territories there that are directly tributary to
heee other cities, and there 1$ ground which is called ?&&kx
ighting ground, common to all of us.
I have statistics here covering the receipts of cars In
eteil for the ten *onth© of 1913. It ia fair to assuae that
he otha* two months would run in about the saise proportion.
The total receipts of care at all &arkete* these six or

?• A. Heath

Beven markets that I mention,

run into 528,088 care of l i v e -

Of that, Chicago handled direct shipment6, direct to

Chicago 39,5 par cent.
The Secretary of the Treasury: What doee that represent in
money? the turn-over ?
Mr* Heath:

That would represent—

The Secretary of the Treasury:

I mean Chicago.

Mr. Heath: You might multiply that by §1,000 to *l,50C.
The Secretary of the Treasury:

I am talking about Chica-

g o ^ proportion*
llr. Heath: Chicago1© proportion would probably run larger
in dollars than i t did in the proportion of cars, because I
think that the larger per cent of the finished product Is
marketed in Chloa£O. That proportion would be increaaud to
a l i t t l e bit over forty per cent, when you consider that
there are probably aeven or eight hundred cars that have come
through the other markets* unloaded there probably for feed~,

ing or ether purpoeea, and then ccae to Chicago? so that out j
of all this territory which Chicago serves, together with thq
other asarkote, y^erhaps ever a t o t a l of forty r«*

oer fc o f


total product ia marketed here in Chicago *

Perhaps one other thing might interest you.

The state



W. A. Heath.

I which shipped the largest number of care in these ten months


to Chicago waa Iowa, over 100,000; Illinois shipped 61,000;
Indiana, 6^700; Minnesota 10,244; Montana, 7,485.
The Secretary of Agriculture: How about Kansas and Rebraska?
Mr. Heath: Kaneas had 1,176 and Kebraska 2,167.
The Secretary of the Treasuryi

How do these figures com-

pare with the previous year?
Mr. Heath: Sir?
The Secretary of the Treasury: Have you made any comparison with the previous year!
Mr. Heath: A comparison with these other markets?
The Secretary of the Treasury: Bo, have these figures
been compared with the record of the previous year, and have
you cot them?
Mr. Heath: These figures I introduced are for ten months
The Secretary of the Treasury: I understand, but take
merely the same period in the preceding year, and what does
that show?

Mr. Heath; That would probably show about the same proportion, perhaps.



. A. Heath,

Mr. Fletcher:

May I give you the figures, I have them right

! here?
The Secretary of Agrioulturo: Tou might let them go In as
an exhibit, Mr.Fletcher.
Mr. Fletcher}

Tea sir} I will do so.

There la just one

point I want to c a l l attention to, that in 1912, in spite of
the reduction in ouiaoii* in 1913, the valuation of the total
livestock coming into Chicago was $375,000,000 as against
1409*000,000 in 1913.

Do you want that filed?

The Secretary of Agriculture: Tou can f i l e It as an exhibit to Mr. Heath's testimony.
Mr. Heath: This i s a ten months statement, and the other
one that I have there i s for the year.

Georgs W. C u r t i s .

The Secretary o f t h e Treasury!

I s there anyone from

Chicago who deal r e s to fee heard in addition to those who
hare already been heard?

That completes the l i s t we have*

T understand Peoria i s hero, end wishes to be heard.
The Seoretary of the Treasury*

Give your occupation and

s t a t e who you represent.
Mr. Curtis:

I am a hanker, and represent the Peoria

Clearing House Aerooiation, end the Associated Banks of
The Secretary o f fee Treasury!

Tfill you s t a t e "briefly

what I t i s you want to present to us?
Mr* Curtis:

Ye want to present to you, Yr, Secretary, the

request o f the Peoria banks that th«r s h a l l ho assigned to
the regional bank which we assume i s to h e established a t

Vhea the federal Reserve £&w "became an established

f a o t , X think i t was generally assumed that a regional bade
would be established a t Chicago*

The Peoria banks have

f e l t , I f they thought anything about i t , that I t was so
l o g i c a l that we should b e attached to Chicago that they
probably gam l i t t l e thought to any other pe s i t ion*


0» ¥ . Curtis

The Secretary of Hie Treasury: How far are you from
Wr. Curtis: Ye are 1JD miles by the shortest railroad
and l 6 l miles "by the longest*
The Secretary of the Treasury: Veil, the bulk of your
transact ions are witi Chicago, of course*
Mr. Curtis: Yes* May 1 read this statement?
The secretary of the Treasury:
$r* Curtis*


If you please.

The Honorable, The Re serve

Bank organization Committee, of fee federal Reserve Act.
The undersigned, a l l mambers of the Peoria Clearing
House Association and comprising a l l of the banks doing
business la the City of Paoria, I l l i n o i s , respectfully but
urgently request that the territory contiguous to Peoria be
assigned and plaoed within the d i s t r i c t to be covered by a
Regional: Reserve Bank, which i t located
.i •
at Chicago, I l l i n o i s ; this choice i s not only unanimous,
but without reservation a s t o any other city where a
Regional Reserve Bank might "be located.




In the natural



trend of the business affairs of trade and commerce and the
." ''
ordinary flow of exchange, a vastly larger proportion of


C. ¥ . Curtis

the present business of Peoria, and the territory immediately contiguous thereto, i s with Chicago as compared with,
a small proportion with other centers within an approximately
equal distance*
Sixteen l i n e s of railroad enter Peoria; eight of these,
or one-half tha to tal number, costounicate vith and reach

Upon tvo of the lines operated between peoria and

Chicago there are eight through pasoenger trains e&oh day,
while three sleeping oars are operated between the points
daily on night trains*

She express and mail f a c i l i t i e s

are frequent and ample between the two points, end inadequate between Peoria and other points in comparison,


I s located nearer Chicago than any other large commercial
center, i s in almost the geographical cent ar of


belt of I l l i n o i s , and the class of paper used by Peoria
Banks deserres and coai&sjn&s a lover rate of re-discount at
Chicago than in any other city in fts Hlsslosippi Valley*
Inquiry by the Peoria banka having country bank
eorrespondents as t o their preference in the location of
their regional Reserve Bank has been made, and with the
exception of one reply which expresses a preference to
another c i t y and four which express no preference, probably


C. Y. Curti»

ninety per oent of r e p l i e s bare teen received, and such
correspondent 'banks express a decided desire to "be located
within the Chi o a go di s t r i c t .
The natural trend of gmoral t u s l n e s s hero, commercial
and manufacturing a s well as f i n a n c i a l , has for many years

favored Chicago, an don t h i s account i t seems to

us that our preferenoeand request in t h i s "behalf should
aeet your favor.
Ye earnestly ask that peoria and t h e territory contiguous t o i t be located within the Chicago d i s t r i c t and not
bo assigned elsewhere*
Respectfully yours,
By V. I* Stone, V.Pt.4: Cashier
By Ynu C» Y h i t t , Pres*t.
BASK o f P e o r i a ,
By John V i n l e y ,
By H, Hodriok, P t .
By Terd.Luthy,
• President
By Charles 0 . ulrieh,
By y« If* Blosson,
By E. Himrod, Cashier.


C« ¥• Cur tip

BX3CE SAVINGS & TH0ST CO. of Peoria,
l y 0, ¥• Curtis*,



The Secretary of the treasury!

That may be f i l e d as an

exhibit, einoe i t has been incorporated In the record*

There has been some discusion as to whether

Peoria, in the central part of the state, might not go to a
regional bank which night be located at St. Xouis.

There i s

a large section of southern I l l i n o i s which, if a regional
bank were to be established at St. louis, might seem, by
reason of railroad and express f a c i l i t i e s , more naturally
tributary to St« Louis than to Chicago,

on the other hand,

that section which we know as the corn belt of I l l i n o i s i s
largely contiguous to and i s Berred by Chicago.

There i s a

Tart difference in the price of fee lands and in the wealth
of thV different sections* Vhat i s generally regarded as


the corn belt of I l l i n o i s extends from the southern part of
the northern portion of the state to «hat we know as the
old Xndiftnspollt & 8t, Iouis Railroad, now t h e Big Pour; and
that nedtion ssoas to be divided off naturally "fey-5v:-_ urn
along tiie l i n e of the I* & St. L. Railroad.

The country

north, of i t i s general^ corn country and south, of i t i t i s


C. V# Curtis.

j grass and wheat.

The s o i l la neither 00 strong nor BO


I produetire, consequently the territory i s less rich,

Peoria i s situated, as ve say in the manorial, in almost
the geographical oentre of that corn "belt section, and
"because o f the fact of the wealth of the section and of the
farms and the people there, the paper which they use i s
naturally rary such hotter than In the southern end of tie
state — excuse me for malting the comparison — tut i t does
comaand a lower rate of discount in Chicago than in St.

8t» Louis has always feeaa able, I think, to obtain

higher rates than we naeded,either in Peoria or Chicago.
The Secretary o f the Treasury: Tour point i s that as
your relations are almost entirely with Chicago, that i t
would fee a serious dislocation of business i f you were
assigned to the regional bank at St. louis rather than

Ye f e e l so*

The Secretary of the Treasury: A l l right*
i t consideration.
say, 1 assume*

Ve w i l l giro

Vow that i s a l l that Peoria wants to

I do n e t suppose anything could fee added to


The Towa Barkers Association i s here, represented*


I s Mr, l&person here?

There i s a l » a coKmittee from

Boo roinea, I Relieve.
T&r, I^porsonJ

Would you rather hoar us "before lunch?

The Becretary of the Treasury*

Jfow many of you are to "be

Hr. Spparson!

There are f l s * .

The Secretary of the Treasury:

Co you a l l want to speak,

or w i l l soae one represent you?
yr. Epparean: Tt w i l l tie very short from each one.
The secretary of Agriculture:

Put each one desires to

Wm Epperson: Yes, we would like to, and we would like to
hare then cone In the order named on our list*
The Seerttary of the Treasury;
after lunch.

Then we w i l l hear you

Ve will now take an adjournment until 2:15.

whereupon, at 12:45 o'clock ?• H* a reoess was taken
« a t i l 281J o'clock K M.


The Seoretary of the Treasury:

' 2:30 P. K.
The Towa Bankers Asso-

ciation, I believe, are to be heard f i r s t .

I s Mr. Rounds,

of Boa Koines, here?
IDr. Rounds: Yes.
8TAT3M»T 07 J. 6. ROUNDS.
The Seoretary of the Treasury: Kindly give us your f u l l
name and address and occupation?
Kr. Rounds: J* 0* Rounds, President of the Citizens
national Bank, ^es Koines, Towa.
The Secretary of the Treasury:

Mr. Rounds, the committee

i s required to divide the country into not l e s s than eight
nor more than twelve districts, and to locate a federal
Reserve Bank in each of those d 1Btriots.

Have you some

ideas on t h i s problem that you would like to present to the
Mr. Rounds: y e s , sir*
the Secretary ©* the Treasury;
Hr. Rounds:

Will you proceed.

The Bankers Association of Iowa i s repre-

sented by a committee of five gentlemen.

I inferred from a

telegram that I received Saturday that the Den Itoines


J. 0. Bounds

Clearing House Association was also to be granted a hearing,
and a committee was appointed; but in conference wi-Qi the
other hankers of the state we soon learned that the sentiment
of the state was unanimous as to their relations to the
Reserve Bank, and therefore the i>es Koines Clearing House
lias merged i t s Interests with the State of Iowa, and this
commit tee represents the unanimous sentiment and wi dies of
the 1740 banks of the state.
The Secretary of Agriculture!

How do you gather that

impression, nr# Rounds?
Kr. Bounds: Ve gathered It f i r s t "by correspondence with
bankers in the leading towns.

A little

later the Executive

Council of the Towa state Bazicers Association had a meeting
*t 3>es Koines, last Tuesday, and we submitted the natter to
them, and t h i s Council represents the eleven group districts
into which Towa i s divided, and there was a representative
present from each group, and they were a l l unanimous in
their decision on the question.
The Secretary of the Treasury: You mean the Council was?
HJ% Bounds? Yes, air.
The secretary of the Treasury:

To what extent do thqr

reflect the views of the 1700 batiks?


J» G. Bounds

Mr. pounds:

The Council appointed a committee to take i t up

with the hankers in their respective districts; that i s , the
member of the Council representing each dietriot took i t up
with the members in h i s district, and in that way —
The Secretary of the Treasury:

Did they get a unanimous

expression of opinion from a l l the hanks?
Hk> Rounds: So far as we hare heard* l*e have not heard
any dissenting opinions.
The Secretary of the Treasury:

But you ha* no exaot data

as to the number of hanks which actually haTOhem consulted?
yrr, pound*: Ho, I have not.
The secretary of the Treasury:

So you do not know whether

you hare authority to speak for the whole 1700 or not,
except through the action of the Council, I mean*
MT. Rounds: T e l l , I have so far as any info mat ion to the

There are about 50 bankers here today from the

State of Towa representing every part of the state, from the
extreme northwest corner, Sioux c i t y , to Shenandoah, in tho
extreme southwest, and there i s no dissenting opinion.
The secretary of the Treasury: That i s the opinion of
your bankers there about this sattert

Mr. Bounds: As to where we want to be located?



J» 0* Rounds

The Secretary of the Treasury: Yes*
in*. Rounds: ft i s in the reserve district of Chicago*
The Secretary of the Treasury? What do you think that
district should embrace?
Mr. Bounds: That i s a pretty hard question to ansirer
offhand, but I should say i t ought to embrace some territory
east of Chioago and the territory west of Ohioago along tho
main l i n e s of traffic*
The Secretary of fee Treasury:

How far west?

Mr. Rounds* I would say to the Rocky Mountains*
She secretary of the Treasury: V i l l you take a sap here,
Mr, Bounde, and call out the names of the states you think

should be included In the Chicago district?
Mr, Rounds* X should say that the larger part of I l l i n o i s
and of Wisconsin, a l l of Iowa, Veoraska, the »uth part of
South Itekota. or possibly a l l of South Dakota, Colorado and
The Secretary of the Treasury:

How about Minnesota?

• Mr, Rounds^ Veil, i f the regional bank i s located with j
referenoe to the provision in the law, that due cone iteration
shall be given to the convenience and customary course of;
business, Minnesota and the north half of South Dakota and


X. 0, Bounds

Horth Dakota, HOntana, and perhaps Idaho, the states that
are on the three Tronic Line a In the northern territory,
'' would naturally be in one distriot, that i s , the ordinary
oourse of business passes back and forward "between isinneapollj
and St. Paul and through those states*
The secretary o f Agriculture:

Did you mention Michigan,

xr # fieundsf
xr* Roundst So, s i r , T did not.
thing east of Chicago.

T did not mention any-

I should think perhaps Michigan and

Indiana might properly be In the Chicago d i s t r i c t .
The Secretary of Agriculture:

Have jou any resolutions

or l e t t e r s that you desire to f i l e with the Committee, or
any mapst
Kr. Bounds*. I hare a table here, or a statement showing
the percentage of business of the railroad l i n e s in Iowa
showing Chicago, Xinneapolis, Kansas City and St. Louis*
I also hare a map of each separate line and a combined map
showing a i l of the l i n e s in the state.

The separate map

shews the relation of that particular road to the state.

the Secretary of the Treasury*
exhibits t o your testimony*

Mr. Bounds? Yes*

Those may be f i l e d as


J. G# Bounds

The secretary of the Treasury:

Those are tie naps of the

transportation lines?
yr, Rounds? yes* Here i s Bo. 1, the Bock Island System*
and there i s Bo* 2, the Uort live stern —
The Secretary of the Treasury:

These might he filed as

exhibits to your testimony.
Hr. Bounds: Yes, I "brought them for that purpose.
The Secretary of the Treasury: T i l l you read your remark a
ur. Round8, or will you f i l e them?
Mr. Bounds* I hare not any remarks typewritten to read.
This i s simply a synopsis*
The Secretary of Agriculture:

Just giro urn your leading

JJT. Bounds: The info mat ion contained in the table comes
from railroads that represent 8,339 miles of road in Iowa,
of whioh 1,058 i s double trade, and these roads hare other
independent l i n e s with a mileage of 575 mi lea as feeders.

The l i n e s that we do not hare reports from, the I l l i n o i s
Central, Minneapolis & St. Louis, and theWbaah, hare an
aggregate mileage of 1785 miles, with two independent lines
of only 32 miles as feeders.

The I l l i n o i s central i s an

east and west l i n e and l i e s "between the Chicago, Milwaukee


J» G« Bounds

* St. Paul Railroad and the Hortbrestern; and while they did
not furnish, any report, i t i s fair to assume that their
traffic with Chi carp i s at out the same as those two lines.
Tho Kinneapolis & St. Louis Railroad i s a north and
south lino that dfd not report, and i t possibly has store
business with l&nneapolis and St. Paul than with Chicago.
TheVabash bu cine as ve concede w i l l $> to St. Iouis*
Now, with that explanation X w i l l give you the information*

The f i r s t road i s the Rook Island.

The authority

there i s the Vice-President, who i s traffic manager of the
freight department*

Their business to Chicago i s 8? per

eent; to Minneapolis and St. Paul 4*7 per cent; to Kansas
City 8 per cent; to St. Louis .03 of one per cent.


mileae* of this road i s 2,449 miles.
The Horth Tee tern Railroad, the ^resident t the authority.
The traffio to Chicago i o 85 per cent; to rinreapolie*and
St. Paul, 10 per cent; to Kansas City £ per cent; to St.
XottU nothing*

Mileage 1689 miles.

The third i s the Milwaukee and the division traffic
manager i s the authority,

So Chicago i t i s BO per cent,

to Minneapolis and St. louis 10 per cent; Kansas City 10
per oenti to St. Ioui« nothing.


Mileage 1912


J« G. Rounds

The fourth I s the Chicago^ Burlington & Quincy, and the
auditor i s the authority,

So Chicago i t i s 52 per cent;

to Minneapolis and St. Paul one per cent; to Kansas City 13
per cent, and to St. Xouls 3* per cent.

Mileage 1509 miles.

The next i s the Chicago Great Western and the di'vision
freight aerat i s the authority.

To Chicago i t i s 70 per

cent; to Minneapolis and St. Xouis 20 per cent; nothing to
sas City) to St. louis 10 per cent.

Mileage 779 mile a.

As previously stated, the I l l i n o i s Central, Yahash and
nneapolisfc St. Louis did not answer our inquiry.
Vow the combined percentage o f the lines reporting i s as

To Chioago 74.8 per cent; to Minneapolis and

St. Paul 9*1 per cent; to Kansas City 7,1 per cent; and to
Jt. louis 9 per oent.


rol Ph

J. G. Rounds,

The Secretary of Agriculture: What is the part of the state
that the Wabash serves?
Mr.Rounds: I can best illustrate that by showing a map.
That will tell the story very graphically.
The Secretary of Agriculture: Very little of it?
Mr. Hounds: Very little of it. The mileage of the YT abash
is 209 niles. Perhaps I ought to correct that, or add to
that statement that I made as to the Illinois Central, no report, mileage 739; Wabash, no report, 209; Minneapolis and
St. Louis* 837.
The Secretary of Agriculture: You might file that, Mr.
Mr. Rounds: The passenger trains on these roads are as
follows: There are nine trains scheduled daily between Iowa
and St. Louie. Four start from Burlington on the east line
of the state, two from Dee Moinee* two from Counoil Bluffs.
There are nineteen trains to Kansas City scheduled daily.
Orer half are trains starting from Chicago or Minneapolis and
St. Paul, and crossing portions of the state.
There are thirty-two trains from Iowa to the Twin Cities
daily, that is, Minneapolis and St. Paul. Seventeen of these
start from St. Louis, Kansas City or Chicago and cross only

J« G. Rounds.

portions of the state. There are 63 passenger trains dally
that start from the Missouri Rivar, or interior Iowa points*
and run to Chicago•
The Secretary of the Treasury: Do you feel that to attach
the state of Iowa to a district of which Ohio ago would be
I the headquarters, would be serving the natural course of business in the state?
Mr* Rounds: Tee sir; we feel that the business of the
whole state of Iowa would be better served by being attached
to the Chicago district, and that all relations with each
other — our railroad connections with the different towns
throughout Iowa, we want to be in one district.
The Secretary of the Treasury; Suppose a bank ware located
at St. Paul or Minneapolis, would It do violence to the ordinary course of business in the state, or would you be equally
well served if you were connected with that district?
Mr. Rounds! Bo, sir.


The secretary of the Treasury: You wculd not?
Mr* Rounds: I would like to state thle in this connection.

This that I have already given refers to the course of bus- ;
iness outside of the banking business. Taking a broad view >

of that provision, that it don't limit i t to banking

J« 0. Hounds*

ly, but limits it to the general commerce and business of
the ccuntry, it isnft any use to state to you gentlemen that
the banking business follows in parallel lines with the other business, commercial business; and confirming that, I
mill say that the business of the bank that I represent, of
its total business, 67.3 per oent went to Chicago; 25.5 to
Eew York; 3.7 to Minneapolis and St. Paul combined;

3*1 to

Kansas City; and 1.5 par oent to St. Louis. In other words,
95 per oent of our business went east, and the other five
per oent was distributed amongst the other four oities named.
The Secretary of Agrioulture: There is no request from
Iowa for the location of a bank, is there?


Mr.Rounds: Bo, sir. I make that clear to the Committee,
that Iowa ia not asking anything.
The Secretary of the Treasury: That ia rather exoeasiva
aodesty,isn't jt?
Mr. Rounds; Exoept for a good home outside of the state.
The Secretary of the Treasury: Uxmh obliged, Hr. Hounds.
The Secretary of the Treasury: Mr. MaHugh, will you give
your full name to the Secretary, and your occupation and re-




John MoHugh

Ur. McHugh: Jofcn MoHugh; President of the First Eational
Bank of Sioux City.
The Secretary of the Treasury:

Hare you anything t o add

t o UT* Round1& statement, &T+ MoHugh?
Mr. ttcHugh: I would like to preface what I have to say by
fceir.arking that the representation of Iowa bankers here t h i s
morning was practically and fairly representative of the ent i r e Atatei for thiD reason, that a large number of those
here today are group chairmen of the Iowa Bankers1 Association, and in each case these chairmen sought the opinions
of bankers in their respective groups before coming hare*


They then met here t h i s morning, and delegated a committee
of five to present Iowa's case t o you thin afternoon;

so in

saying that they are unanimous* for bAiag in the Chicago Dist r i c t and putting the state into the Chicago District* we
are yoioing the sentiment of the large majority of the Iowa

I think i t is safe xo say that of eighteen hundred bankers\
in the otate, with a total capitalization and surplus of
about $80,000,000 and total resources of about $600,001000, >.

there i s eoaroely a bank that has not got a Chicago account, i

John ttoHugh

and in fact in a great many caass their principal account Is
in Chicago*
The Secretary of the Treasury; How cany of those banks
are national?
Mr. McHugh:

I think about four hundred, although I haye

not got the exact number*
Ur, Bounds: 340.
The Secretary of the Treasury: 341,
The Secretary of Agrioulture: Mr. McHvgh, you are nearer
to Minneapolis than you are to Chicago, aren't you?
lir. HoHugh: We are nearer in one sense* but not in the
The Secretary of Agriculture: Have you more direct communication?
Ur% McHugh; Tell, ye have direct communication and we have
good rail facilities into Minneapolis, but a large portion of
our business goes to Chicago,
The Secretary of the Treasury: That is your largest parket
Mr, KoHugh: That is our largest market* that is the market
for our jobbing and livestock, and our financial affaire. It
is our principal headquarters, and in urging your consideration to the end that Iowa be put into the Chicago District3


c 6b

John McHugh


(I think that the best interests of the business of banking

[and agricultural interests, will be served by doing so#

I tfculd like to e&y a word, if I may, in regard to a por-

jition of the territory in Eebraska and South Dakota that is
peculiarly and particularly Sioux C i t y ^ territory•


City haa two national banks, with a total capitalization and

f surplus of upwards of $3,000,000*


>I aren
of Agriculture: You are right on the line,



Mr. McHugh: We are on the western boundary of the state,
and we serve South Dakota, northeastern Kabraska and florth~
western lovra, more partioulBarly than any other part of the

We haTt upwards of a thousand bank accounts car-

ried in Sioux City fro© the surrounding tributary territory,
and a great many of the smaller banks carry their principal
account in Sioux Oity. For that reason, I wish to call your
attention to the fact that it would seem to m* and to the
other bankers in Sioux City, who are appearing before you
here, not only representing the banking interests, but the
cos&eroial interests of the city, that if any plan were contemplated that wculd jrut South Dakota off into the Minneapol-

is district, if such a district were proposed, and Kebraoka






into another d i s t r i c t , i t .vould prova vary disadvantage^ ;



0U9 to the business and banking interests of Sioux City, as I
we see it; and it weald seem to us that we would like to have j

your consideration of that fact,

We are a livestock market$ we axe a financial center* to a '

certain extant* and we are a Jobbing center for that portion !
of Kebraaka, South Dakota and northwestern Iowa*
The Seoretary of the Treasury: What interest do you pay


J; on bank balanoas?
j! ttr. UoBugh: Two per cent.



The Secretary of the Treasury: that is your practice about

| ohooktt oolleotingT

Bo you collect oheoks free for your cor-

!; reopoadeat banks?



Mr, MoHugh; That depends altogether,

In soae oases we

!j hare an arrangement with other basks throughout the territory,
and where we hare that arrangement, we make no oharge.

The Secretary of the Treasury: la that the eneral prac-


j tioe that prevails?


Mr. MoHught Tea, air*


The Secretary of the Treasury! that do you consider that

i in regard to the interest rate, as an addition to the inter-

i est rateT

Is it worth one per cent?

c Bb


John KoHugh

Mr. MoHugh: Bo, about half of one per cent.
The Secretary of the Treasury:

So you have been paying

about two and one-half per cent?
Mr, KOHugh; Total interest and cost of collection*
The Secretary of the Treasury:

Sfhat amount of reserve do

you oarry i n Sioux City?



Hr. itoHugh:

Well, I think the bank deposits of Sioux City {

— I haven't got the figures — they are upwards of eight

million dollars.
The Secretary of the Treasury;

upwards of eight million

Mr, UoHtaghi


I think they axe, ye8 s i r .


I would like to

oall your attention also to this faot,that

the trend of business being to the east in financial and JobJ

bing and livestock affaire, It would seem to me that we would
like to urge, and we would like to have your consideration :
to the end that Hebraeka, as well as Iowa, be considered for;
the Chicago territory* Any other step I believe would be


disadvantageous, not only for the Nebraska territory, but to
Sioux City* on account of the territory we serve in Nebraska.

The secretary of Agriculture: What about western Kebraoka?
Mr. MoHugh: Western Hebr&ska particularly is a cattle oouxt*

John MoHugh,

|1 It i s not an agricultural country when you get out t o the



I westers line. At the sane time, I believe that the entire



etate of Nebraska ought to be in the Chicago territory, from
what I know of the business of the otate.
The Secretary of Agriculture: That would you say of southeastern Kebraska?
Mr. Me Hugh i I think it ought to be In Chioago territory.
The Secretary of Agricultures Rather the territory
to the south or southeast?
Mr* MoHugh: By all means, very emphatically.
The Secretary ofAgriculture: Do youthink it would be unfortunate if it were included in a district of which Kansas
City night be the oenter.
Mr. McHugh: Z don't think it ought to bo. I don't think
the bu«ineaa Interests would be served.
The Secretary of Agrioulture: The same would be true of
Mr. KcHugh: Absolutely

, yes eir.

The Secretary of Agriculture: It would be reversing things
to send it to Denver.
Mr. McHught

Absolutely, it would be backing up.

The secretary ©* the Treasury?

Do you pay the same rate of

c 10b

John MoHugh.

interest en tho balanasa of state banks ae you do on nationel banket
Mr. y.oHugh: Toe, sir.
The Seoretaxy of the Treasury:

I see, according to the

Comptroller's statement of October 21, you held about
£3,101,000 of the reserves of other national banks?
Mr. ucHugh: That ie shown there?
The Secretary of the Treasury; Tea, and about $4,500,000
of state bank and trust company balances.
Mr. McRugh; Our deposita are low now at this time of the
year, so that my estimate of eight million dollars would be
approximately correct.
May I read a l e t t e r that ie addressed to Mr. Reynolds?
This ie from the Vermilion Rational Bank of Yeririlion, south
Dakota, which i s located close to the south line of South

It i s addressed to Mr. George M. Heynolds, Presi-

dent of the Continental & Commercial Rational Bank, Chicago,
and reads;
"Dear Mr. Reynolds:~
It Is greatly desired by the banks located in the southeast corner of south Dakota, that that part of the State be
included in the boundaries of the d i s t r i c t , in which the


John iicHugh.

Federal Reserve Bank of Chicago will be located, Chicago is
| the natural market for this aeotion and in point of oonvenif enoe and ouetosiary oourae of business ia far ahead of any


other likely Raserve City*
You Hill confer a great favor upon us, if you oan and will


present this fact to the Organisation Committee, when it is

! in cession in your olty.
Thanking you in advance for any effort you may make in our
Tours very truly,
C, H* Barrettj President."
The Secretary of the Treasury: Let that go in ae an exhibit.
The Secretary of Agriculture: Tctu suggest then that the
southern part of South Dakota and all of Iowa, and all of
Kebraska be —
Mr. ucHugh: In theCbioago Dietriot.
The Secretary of Agriculture: Tec.
Mr. McHugh: Teej I would certainly suggest that much territory, but I would like to include the whole of the state
of South Dakota, because ir. our city we have bank accounts

from the northern part of the state, as well as the southern


John ttcHugh



paxt of the state • Of course, that depends largely on how
many banks you hare, whether you limit it to the minimum or
the maximum*
The Secretary of Agriculture: What is your population,
Ur» KoHugh: Of Sioux City?


The Secretary of Agriculture: Yea,

ji fix, UoHugh. It is fully 60,000.
The Secretary of Agriculture: Anything else?
Ur. uoBugh) I think of nothing else.
The Secretary of the Treasury: Mr. Davis.
The secretary of the Treasury: Mr. Davis, state your full
name', and your occupation*
Mr. Davie: Walter M. Davisj Iowa City, lowaj President of
the Johnson County savings Bank, Iowa City, Iowa.
The $ecretary of Agriculture:

What bank do you represent?

Kr. $avie: The Johnson County Savings Bank, of Iowa City.
The! Secretary of the Treasury: Before you begin your testimony, will you tell us whether or not the state banks in
Iowa have authority under the Inoorporation Act, to take

! ol3b

Walter B. Davis

stock in these reserve banks, and to become members?
HT. Davis; My own judgment is that they have not. However,
we have not had any opinion from our Attorney-General as yet*
The Secretary of the Treasury: Has such an opinion been

Mr. Davis: I understand that it has, not by myself*
The Secretary of the Treasury: Will you please give us
such information as you desire to submit?
14r. Davis: The only information that I care to suggest is
this* Of course, I want to preface my remarks, by saying
that I do not know whether the state banks, savings banks,
and trust companies* can come within the new law or not, or
whether they desire to do BO later on*

Second, of course, I

do not know whether it is the intention of the new law to male
It policy that they shouldf in other words, to encourage them
to cone in.

Uj thought was that it was the pel icy of the law to eo establish these reserve banks as to create as little as possible of business disturbance* By that I mean, that a reserve
bank should be so established that it weald take care of
the natural commercial business that went into that locality


Walter U. Davis.

If that is the policy of the law, it woald seem to me that
Iowa alaould be includad in Chicago territory, for the reaeon
that Chicago, aa it ia not necessary for me to state, is the
point where the great bulk of the Iowa business comes to, it
being a corn and a hay producing statef
The Secretary of the Treaeiary; The bulk of your business
is with Chicago?
Mr. Davis: The great bulk of our business is with Chicago,
The Secratary of the Treasury: Is that true of the business
that you do, including banking?
Mr* Davis: Decidedly so.
The Secretary of the Treasury}

As well as of the ordinary

farm products and commercial business in the State*
Mr, Davisi

Decidedly *o.

The Secretary of Agriculture: How far are you from Chioagct
fir* Davisi

330 miles, I think 235 &iles*

/The secretary of Agriculturet
Mr* Daviaj

How far from Minneapolis?

I think it is 300 and something miles. I aa

not exactly sure ae to the distance.
The Secretary of Agriculture: Kansas City?
Mr. Davisi

X would sot undertake to give the nileage to

Kansas City, I go there so edition I do not know.

!: ol5b


Walter M. Davie.


The Secretary of Agriculture: That is all.



The Secretary of the Treasury: Thank you. Mr.Hamilton.




The Secretary of the Treasury: Mr* Hamilton, will you
pleaee give your full name, address and occupation?
Mr* Hamilton: John T.Hamilton; Merchants National Bank;
Cedar Rapids, Iowa*
The Secretary of the Treasury: If you will give the Committee such information as you wish to submit*
Ur* Hamilton: I have no special information to give the
Committee, except to say that my judgment is that we ought to

I be with theChicago regional bank.
The.Secretary of the Treasury: Do you concur in the views
which have been expressed by the other gentlemen who just
! preceded you?
Mr •Hamilton: As far as I oca Id hear what they said*
The Secretary of the Treasury: You are willing to take


chanoea on them, anyway?




Mr. Hamilton: Yes sir; I would be; I know the men. Our



train 3ervio8 oones from Chicago. We have all the main roads!
going west that pass through our entire state* Take the


John T* Hamilton

C* B # 1 Q,, The Chicago, Rook Island and Pacific; Chicago &
Eorth Western, and the Chicago, Milwaukee & 8t. Paul* they
have direct lines, traversing our whole state from the Mississippi to the Missouri River, and the Illinois Central has a)
line —
The Secretary of the Treasury: Yea, we have got all that*
Mr* Hamilton: And the Great Western lines. With the number of trains that radiate from Chicago through Iowa, it makep
our service —

our passenger service, our mail service, and

everything of that kind, we can ccme here quicker than we
could to any of these other places that have been mentioned
by reason of the increased number of trains we have and the
increased speed of those trains en the main lines* Most of
them are doable-tracked! and two or three of them send out

special mail trains that carry nothing but mail*
The Secretary of the Treasury: The customary coarse of
iness in yfcur state is with Chicago?
Mr*'Hamilton; Toe, air*
The Secretary of the Treasury: Throughout the state?
Mr. Hamilton: Yes, sir; very largely so.
The Secretary of Agriculture; Tou think it would be unfor-

tunate to include it in a district connected with any other

o 17b

John T. Hamilton.

Mr. Hamilton: I really do, because I think it would change
the entire course of the whole business of the state, you
would have to establish new relations all around, and we prefer the quick and reliable service that we gat from Chicago.
The Ssoretary of Agriculture: Is the greater part of the
buaineoo of your institution done there?
Mr. Hamilton: The greater part of ours is with Chicago,
and our next with Sew York City. The great bulk of the business, however, ie with Chicago.
The Secretary of the Treasury: Thank you, Mr. Hamilton.
The Secretary of the Treasury} Mr. Epperson, will you
please give you? full name and your residence and occupation?

Mr. Epperson: Frank Epperson} Vice-Preeident of the Manning & Epperson state Bank,

Tics-President of the Iowa

Bankers* Association.
The Seoretary of the Treasury: Mr, Epperson, give us your
opinion as to where Iowa should be put in the formation of
these regional dlstrictst

Mr. jppereon: Mr. Secretary, by a l l the laws of trade





Frank Epperson.


and commerce, Iowa should be aligned with Chicago.


i s no portion of the state even remote that does not look


to Chioago as its financial and commercial center.

I that, to align Iowa with any other city wculd be



I feel

to retard

our agricultural activities.

The secretary of the Treasury: You have heard the views
I of your associates here, and you concur in all that they have

! said, do you?
Mr. Epperson: With respect to aligning the entire state of
Iowa with Chioago, I do.
The Secretary of Agriculture:

Have you any opinion to ex-

press about the other states that have been mentioned?
Mr* Epperson:

The Chicago district, do you mean?

The Secretary of Agriculture:

Nebraska and south Dakota.

Are you familiar with the conditions there?
vx, Epperson:

I am. I will include the south half of Soutt

Dakota, that part of South Dakota especially that i s tributary
to Sioux City, in the Chicago D i s t r i c t / states of Eebraska anc.
Iowa, Wisconsin, and the northern peninsula of Michigan; and
that portion of Indiana north of a line drawn due east from
The Secretary of the Treasury t Where weald you pat Colorado?




Frank Epperson.


Mr. Epperson: in the Kansas City district.
e Secretary of Agriculture: Have you studied this question
for the entire country? Have you made out in your own mind
Hr. jppereon: Yes, sir.
The Secretary of Agriculture: Have you made a nap?
Mr. Epperson:

I have it in my mind.

I just got this map

a few minutes ago, and I left my other one at the hotel.
The Seoretary of Xgvavtirjnfc

How weald you divide the

country, Mr. Epperson?
Mr, xppsrsont I don't care to express an opinion on the
division of the Hew England states.

I am not familiar with

conditions there at Boston and Sew York.
The Seoretary of Agriculturet

Suppose you take the coun-

try weBt of Chicago, Chloago and west of Chicago.
Mr. sppersont

I would establish a reserve bank at Chicage

and include in Chicago's territory that portion of Indiana
north of a line drawn due west from Cincinnati.

That por-

tion of I l l i n o i s — that line froa Cincinnati Is to go to
the Mississippi River — that portion of I l l i n o i s north of
that l i n e , Michigan, Wisconsin, Iowa, that portion of South
Dakota that i s tributary to Sioux City, and a l l of Eebrae


c 20b

Frank Epperson,

The secretary of Agriculture: What other districts?

In the Kanees City district I wculd put Kan-

aas, Colorado, Rer Mexico, Oklahoma and Texas,
The Secretary of the Treasury: The whole of Ter&a?
Hr, Epperson: I think so,
The Secretary of the Treasury: What would you do with
Arizona and Eet? Mexico?
Mr. Epperson

I included Kew Mexico, I think•

The Secretary of the Treasury: I beg your pardon.
Kr« Erperson: And Arizona.
The Secretary of the Treasury: You would put Arizona i*
Mr. EPP©;rBon: y«8> sir*
The Secretary of the Treasury: What would you give to St
Mr, ^pperson: I would not have one at St* Louie.
The Secretary of Agriculture: What other districts?
#r. t psxaoa: I wcaVd have one at Minneapolis, extending !
from Wioconsini taking in Minnesota, and Rorth Dakota,


Montana, Idaho and Washington.


The Secretary of Agriculture: ihere ia the oenter of that)
Mr. EppersonJ

At Minneapolis or St. Paul.

The Secretary of Treasury: Ihica i* your preferenow?


Frank Sppsxeon.

M '. Epperson: Tall, now, I would put i t on tha line bel
j' tween the two o l t i e s .

The Secretary of the Treasury: What would you do with St.

i! Louis?
Mr. gpperaon:

I would leave that in the Kansas City t e r r i -

The Secretary of the Treasury: You would annex St. Louie
to Kansas City. How about Arkansas ?
Mr. Epperson: Louisiana and Arkansas oan be handled from
Cincinnati, with branehbanks at Memphis and Bew Orleans.
The Secretary of the Treasury: How about California} that
part of the country?

Mr. Epperson: One at San Franoiaoo, for California, Seraday Oregon and Utah.
jfhe Seoretary of Agrioulture: Tou put Washington in Minn/ i •
eapolis, did you, or 8t. paulT

' 7.

Mr. Epperson*

How ia that?

' The Seoretary of Agrioulture : Where did you put washingtonf
/ Mr. Epperson: Washington ia with Minneapolis.
d Seoretary
outline that
it toof
as Treasury:
an exhibit Tou
to your
Mr. aap








1359 %
Frank Epperson.

person* You can do that a little later, you need not do
it at the moment.
The Secretary of Agriculture: If you would send it to us
The Secretary of the Treasury: yes .
Mr Epperson: Send it to you?
The Secretary of Agriculture: Tee, f;at Washington.
The Secretary of the Treasury: Or if you can have it done
today, you can send it here, and it will be attached as an
exhibit to your testimony.
llr. Epperson: I have just one other matter that I want to

I have a petition here. Petitions and resolutions

are usually of a stereotyped form and easily gotten, but
this one is one a little bit out of the ordinary:
'To the Reserve Bank Organization Committee.
The financial and business interests of Iowa


having always been tributary to Chicago, we, the undersigned,'
representing the financial and commercial interests of every j
section of the Stats, respectfully petition your honorable


body to plaoe the entire State of I ova in the district to be

served by the Federal Reserve Bank of Chicago, thereby

Frank Epperson.






carrying out the intention of the ^ct providing that districts
shall be apportioned with due regard to the convenience and
customary course of business."


This petition is signed by every man that is here today



from Iowa present, and as I eay, it is not an ordinary peti- I

tion. These men have cane to Chicago, being interested en-

ough in this matter and this petition, which shows the sincerity of purpose that is behind it*
The Secretary of Agrioultwei

It can be filed as an exhi-

Thank you. Mr. Russell*

Mr. Reynolds: Mr* Secretary, before Mr. Russell takes the
stand, may I take time to read,a telegram, which I have
been requested to present to your committee today?

It is dafc

ed at Houghton, Michigan, and is as follows:
"Existing business relations and facilities of transporta<
tion and ooamunioation make it imperative that north Miohigan!
be attached to Federal Reserve district with Chicago as oen- :
ter. Will you please make every effort to that end.


Houghton national Bank, Houghton Citizens Rational Bank,
Houghton, First Rational Bank Hanoook, superior Rational Bank,

Bank, Lake
Bank Calumet,
Lauriua, First
First national

c 24b

Frank Epperson.


Bank, Hubbell, With resource© of over thirteen million dollars."
Mr. Russell ie going to represent Michigan, ani I would

like to call his attention to that as he takes the stand*




The Secretary of the Treasury: Kindly give your full name, I
residence and occupation,ttr.Russell.
Mr* Russell: George H. Hvasell; President of the Peoples1
State Bank, Detroit; and Chairman of the Detroit Clearing
House Association.
The Secretary of the Treasury; Mr* Russell, you know the
problem confronting this Committee, of dividing the country
into not less than eight nor more than twelve districts, for
the location of a Federal Reserve Bank in each?
Mr* Russell; Tee, sir.
The Secretary of the Treasury: We would like particularly
to know what the views of Detroit are as to what district
the state of Michigan should be embraced in, and your views
generally on this question, this problem?
Mr. Russell:

I represent the Detroit Clearing House Asso-

ciation, who have invited me to appear before you, although I



George H» Ruesell

am the president of a state bank* and under our law there ie
still a prohibition against our going into the Federal Re*
serve Association, for the reason that we cannot invest in
any kind of stocks, tout that of course, will be removed in
the session of the next legislature in January, and we will j
probably with others be very glad indeed to come under your J

system, But Detroit we think is of sufficient importance in |

cities andin business, to apply for a recionel Reserve Bank
if si Ore than eight would be established in the etart.
But giving up that idea, for the reason that we are a border city, we wish to express on behalf of Detroit, which is
the reserve oity for the whole state, our deoided preference
to be annexed to the Chicago district. The business wiadem
of this is right here. Our reserve accounts are largely in
Chicago, and It is either Chioago westward, or £ew York eastward with us. Uy own bank with forty millions of deposits


maintains nine branches in the c i t y , and we have others in




Eaoh of those nine banks has tiro outside ao-

ocunt,a, ori8 in Chicago and one in Kew York.

They are the

only ones that the branches use in the different parts of
our growing c i t y ,
Our ol<JaxingB of this year have shown the greatest of a l l





George U. Russell,

increases in the country.

We are 18.1 per cent larger than

last year, whereas the whole is something less than four per
oent l e s s , and we have to maintain relations with Chicago
for the entire west.
The business of Michigan, as you may know, i s largely
State banks* We have almost four to one state banks as agafcnst Rational.
The Seoretary of Agricultures

How would the capital and

deposits ooatparet
Mr. Russellt

Unfortunately I have not the s t a t i s t i c s with

ne, but the deposits In the state banks are very largely in

of the national banks. We hage had a good law, and i t

has been generally used.
The Secretary of the Treasury; what per oent ofyour reserve
do you keep in Chicago and what in Sew York?
Mr. Russellt

I should think of our reserve, sometimes i t

run spore In the west, some times more in the east, but nearly
half and half of that that we keep here.

Under our laws the

reserves are counted for us In the different states of the
J»h foX



G. H. RUBsell

The Secretary of the Treasury!

I s that true of a l l the

banks, national as well as state, that their reserves are
about equall y divided "between uewYork and Chicago?
Mr. Kiis sell!

I should think the national banks would keep

Bore in Yew York than in Chicago, something more. vr. Gray
i s here, representing the national bank system, and he w i l l
know better how to answer those questions*
The Secretary of the Treasury: What inducements are held
out by the banks of Detroit for the accounts of other banks?
Hl*« Russellx We are holding a large HHIIBK of the
deposits of the State of Sichigan, and we are dividing i t
principally with Chicago, Chicago having, by reason of r a i l
communication, the beet c a l l on the northern Peninsula; and
the/ have a good deal of the western part of the Michigan,
and we divide that with them and have probably t;\.-: majority
of the eastern part of the iower Peninsula.
The Secretary of the Treasury;

T e l l , i s i t your opinion

that the ;riew of the hankers and lousiness men of the tower
Peninsula, of Michigan i s that the whole of Michigan should

be attached to the district of Chicago, if a regional bonk
should'be located here*

Mr, pu is s e l l :

Absolutely, no question about i t .


0. H. PusselL

The Seoretary of toe Treasury* You think the whole state
would want to come to Chicago?
vr. $usselli

The whole state would want to oome to

Chicago •


The secretary of the Treasury: You think there i s pract i e a l l y a unanimity of sentiment on that question?
KT. RUB s e l l :


I am posit lye of it*

The Seoretary of the Treasury:

Are the customary courses

of business to and from Chleagot
20% RUB sell I yes, sir.
The secretary of tite Treasury:

i«ore than with any other

fir. Bus s e l l i

I would say our "business with Chicago, and

they clear for u s largely for the west and southwest, would
be five to one to what i t would "be to an Ohio or an easterly
The .Seoretary of the Treasury! Utore should Toledo be put?
So you know anything about the conditions in Toledo, as to
whether her interests would be best served ty Ohio ago or by
seme other! point?
,W» Ru a t e l l I I cannot say*
their «ituatlon #

T am not here to d i s m s s

I nerer wanted to l i v e there, and necwr



CU H. Bussell.

The secretary of the Treasury:

And for that reason you

are not fa si liar with any faeta concerning the situation?
Itr* Russell:

I do not care where thay go to*

The Secretary of the Treasury*

Just so they do not go to

fir* RUB s e l l :

They are our principal competitor in south-

ern Michigan in paying higher rates of interest than we scan
to be able to afford*
The Secretary of the Treasury: Your information i s
accurate, i think.

We thank you very much*

. aray!

X am Vice-president of the First national Bank

of netroit, and I am here for the purpose of representing
that sank and also some of the other banks in the City of

The 'banks there, of course, would like very

Biuoh, like every ether eity in the nation, to have a
regional bank there.

They recognise a l l the advantages to

the other banks in the city of having a regional bank there;
but we rtcognise our geographical limitations, and therefore
we are no t h e * for the purpose of applying for a regional



W# j» Cray

I t , therefore, i s of the utmost importance for us

| to know in what district we shall be located.

There i s not

the slightest question in ray mind that Detroit should toe
attached to the Chicago d i s t r i c t t "because X assume that your
Committee will appoint chlcagoas one of the regional districts*

Under the Act the committee i s required to suit

the convenience of the business public, and if you do that,
so far as Detroit i s concerned, there i s not any question
"but what Detroit should toe attached to this district here,
because tie bulk of the business t h a t we do is sure with
Chicago than i t would be with one of the smaller eastern
cities that we might be located with.
The Secretary of Agriculture:

Do you agree that i t i s

larger with Chicago than with any other city, and in more
intimate touch?
Xir. Gray:

I should say so.

We perhaps might do more

business with Hew York, but there i s no other place that
touches i t ; and so far as the other c i t i e s which have been
spoken of as regional cities in the eastare concerned;, there
Is no question but what our business should be done here;
i t would suit ttie convenience of our people ouch more to
hare i t here, t hsre *tanc#dt with the other bankers In


*• J*

Detroit and know just how they f e e l about i t , and I speak
for them.
The Secretary of tie Treasury:

In view of the fact that

this b i l l provides for par ring of exchanges between these
different regional banks after ths system i s established,
do :ou think you would find i t necessary to carry such large
balances in Hew Voile for exchange purposes?
2£r* Gray: ifr. Secretary, like yourself I havebeen a
lawyer, and I have not been a beaker so very long, so that
I do no t know how ~
The Secretary of the Treasury: You and I are not alike
in that respect.

I have only been a one-horse lawyer and

never a banker at any time*
Mr. Gray:

I will try to get you in some time.

The Secretary of the Treasury:

The law forbids*

I T , 5ray: lhat t moan, to be serious, ?/r. Secretary, i t
that I do not know how such value w opinion i s in that
regard, but I would say i t would be necessary f o r the banks
to oarry certain balances in Hew York anyway, in order to
have convenience of business, and I think that I s a matter
that has to be worked out slowly, and i t just depends how
business goes along, whether we can do as you suggest or not.

¥ . J . Gray


Th« Secretary of the Treasury:

T was only speaking of tie

jproTision of the Act, and was wondering to what extent the
' parring of exchange would oaks i t necessary or even deeiri

.able to carry such large "balances in Hew York purely for
• exchange purposes, or in any other city, for that matter*

Wr. Gray:

I would not think i f there was parring of

exchange DStweea regional banks it would "be necessary to
carry so large a aba lance, because instead of paying a man
with Hew York exchange, i f he wanted i t , we could pay with
San rranoiseo exchange.
The Secretary of the Treasury! You could pay him in any
kind of exchange on these banks.
Mr. Gray: Yes, i f i t would work out, and that i s what
I mean, you would have to see how i t would work out*
The Secretary of Agriculture:

Bo you f e e l you can speak

for the entire sta tat
Mr. gray:

only in this «ay9 that Detroit i s the metropolis

of Michigan and ths business i s nored through Betroit and
we do a large portion of thsKichigan business with Chicago, j

and in that way I think I could speak for Michigan, But I


aean X hart no direct authority from any of the other banks
in the state.




*• J» Gray

The Secretary o f the Treasury!

Your fee at judgment i s t h a t

the customary course of "business of the 01 t i r e state would
be conserved "by attaching Kichigan t o a regional d i s t r i c t of
which Chicago was the centre.
Mr. Gray:

There i s not the s l i g h t e s t question about i t in

my opinion, wr. secretary*
The Secretary o f the Treasury:

Ye thank you very much,

Mr. Gray*
Vow i s Minneapolis here?
irr. Flake:

Minneapolis 1 s here.

The Secretary of the Treasury:

Kindly g i v e u s your f u l l

name and residence end occupation?


IDr. Hake:

Douglas A* ?lske; Minneapolis, Minn.; lawyer,

and president of the Minneapolis Civic & Commerce ABBOclation.

This association —

The Secretary of the Treasury:

Are you Identified with

any banks?
&r. Plate:

I am identified with no banks, nor will I

enter into tha t natter at all*

I simply want to make a

preliminary statement as to the document* which we intend to


D. A* Kike

present, which w i l l be the basis of a l l the talks you w i l l
hear t h i s afternoon, and in order to amplify and simplify i t ,

we thought we would t e l l you about these data and follow i t
up by th speakers as announced*
The Secretary of the Treasury: You say proceed*
Mr. jpiskeri

The Civift Commerce Association represents

5000 business men, oitisens of Minneapolis* We hare
prepared, Mr. Secretary, a brief, which i s not as ponderous


as i t looks, which sets forth in a brief and concise way
the importance of the nortbrest and why a regional bank
shou£ be located in that territory and why the location of
the bank should be a t Minneapolis, the financial centre of
that territory*
There i s no useless language in that book, only such
as was necessary to brinr? together and hitch together the
figures which we hare presented*

We feel i t our duty to

a s s i s t you gentleman in every way possible to get absolute
data of the northwest in your possession in such shape, by
charts and naps, that upon simply looking at i t you would
become intelligent at once upon our oondition.

These charts hare beat prepared by Br. ness of the

, G-9

D. A. Tide*

tfniversity of Yisconsln, which stamps than with r e l i a b i l i t y
and accuracy*
With the indulgence of the secretaries, at a later time
in the hearing, X will take up t h e explanation of a few of
these charts, soowing the relative Importance of Minneapolis
and some other c i t i e s which, we w i l l mention at that time.
At this time I simply wish to present t h i s "book to the
Secretaries, and to introduce Mr. Joseph Chapman of
Klnneapolls, who represents the Minneapolis Clearing House.
The Secretary of the Treasury: yery well*' Ye would he
obliged i f you could give u s a few extra copies of this
Mr* Ticket Ye have some, and when t am called the second
time I w i l l bring the additional copies and w i l l also explain
these charts, as to the relative importance of the cities*
The Secretary of the Treasury: Ye should like to have
half a dosen copies If you can l e t us have them.
W% riske:

very well*

The Secretary of the Treasury! You may state your f u l l
name and your residence and occupation?


Joseph Chjpamn

Mr. Chapman: Joseph Chapman; Vice-President of the Xorth
Western national Bank of Minneapolis, Jiinn.
The Secretary of the Treasury:

I see that you hare laid

out here a d i s t r i c t , accordng to this diagram, embracing a
large part of the State of Wisconsin and the northern part
of 109% a l l of Minna aota, including Minneapolis and st« Paul,
part of North Dakota, South Dakota, Montana, part of Idaho
and also the State of Washington.

Have you figured the

hank capital that such a 'bank would have* and the resources
whioh would "bt available for i t .
Mr. Chapman: Ho, s i r , "because I do not intend to speak
a"bout tha^particular d i c t t i c t .

That map does not refer

particularly to what I am going to say*

X am not going

to advocate the location of a regional "bank in any particular

I would like to say just a few words on this d i s t r i c t ,

the States of Minnesota, worth and South Dakota, Montana and
Washington - •
The 8ecr«taryiof the Treasury:

And of course the northern

part of Idaho*
Mr* Chapman: And tte northern part of Idaho*
The Secretary of the Treasury: You exclude in your
argument her* part of Wisconsin?

Jo soph Chapman

Mr. Chapman: I only exclude i t because of the language of
the Act I t s e l f , which says there shall be not
than twelve banks.

This district very property includes the

northern half of Wisconsin, as that i s direotly tributary to
the Twin Cities, and we would be delighted to hare that
country figured in that territory.

But for the purpose of

our presenting this matter by states, we hare eliminated
Wisconsin and northern Iowa, which also does a great deal of
business with Minneapolis.
This aeotlon of the country that I refer to, Minnesota,
Worth and South Dakota, Montana and Washington, oomprlses
447,070 square miles, or one-fifth of the en tire area of the
United States.

Tt a3so contains one sixth of the arable

lands of the United States*

This i s a territory nearly

three times the slse of new York, pennsyl-vania and a l l of
the Hew BsglanA State*.

Traversing this country from east

to west are four great trans-continental lines, the
Minneapolis, St. Paul & Sault Bto. Maria, the Great Northern
Railroad, the northern Paciflo, and the Chicago, Milwaukee
* St. Paul.
The Secretary of the Treasury!

How long does i t take the

fact mail trainc to go from Minneapolis to Seattle?


jroseph Chapman


l!r« Chapman: About 60 hours*
A Voice!

4-7 hours*

The secretary of ihe Treasury! How much i s i t ?
Hr* Chapman: 47 hours, the gentleman from St. Paul said*
The Secretary of the Treasury:

That i s the quickest

route, i s i t ?
Mr. Chapman: That 1 s the quickest route*
The Seoretary of the Treasury: That i s the nail, or i s
that your limited train?
Hi*. Chapman: That i s the fast mall*
T-h e Seoretary of the Treasury:

I see* "proceed*

ST. Chapcian: rvery pound of freight, every express
package, every mall package, every letter that comes from
the Puget Sound territory into t h i s district passes through
Minneapolis and thai St. Paul and then on to final destination, if the f i n a l destination i s not the M B c i t i e s .
The trains reach Minneapolis about 30 to 3? minutes earlier
than they reach St. Paul, and leave Idnneapolis for t h i s
entire western country from half to three quarters of an
hour later*

Those l i n e s of railway to this district hate

grewu since 1900, from 19,706 to 29,642 miles on June 30th,
1911, a l l with terminals a t Xinneapoli s and St. Paul.


Joseph Chapman

The two c i t i e s of Minneapolis and St. Paul had a population
at the last census of 516,152 people, of which Klnneapolia
had 501,408.

Minneapolis gained in the ten year period from

1900 to 1910, 47 per cent, and Bt. Paul 31 per cant in

At that name rate of increase the population

of Minneapolis at the time of the next Tederal C en BUB w i l l
He 450,000, while that of 8t. Paul will be 280,000 people*
I am not going to speak particularly of Ulnneapoli s and St*

t wish to c a l l your attention to the development of

thi e wonderful agricultural territory from 1870 to the tine
of the laat 7 ederal censue of 1910*
m 1870 the total ralue of the farm products of the
State/of Minnesota was*27,440,000 and la 1910, $270,000,000*
She territory of Dakota produced in I870, #400,000 of
agricultural products, wealth*

la 1910, north Dakota

produced alone $200,000,0001 while south Dakota produced
•l73,OOo;oOO, a growth from #400,000 to #375,000,000 la a
period of 40 years*
Kbntana produced #1,376,000 in 1870, and #60,500,000
in 1910*
State of WaeHngton produced #2,000,000 in I870,
and #101/300,000 i a 1910.



Joseph Chapman

Or a t » U l growth from #31,216,000 to $804,600,000 in
, a period of 40 years.
If you w i l l look on the map, Minnesota, and North and
South Dakota have only from 27 to 35 P« r <**nt of their
tillable s o i l under cultlTation, aocording to the reports of
the Department of Agriculture at Washington*

The Department

of Agriculture at Washington in 1909 gives these three stat ea
146,000,000 aeres capable of cultivation out of a total
under cultivation in the United Statee of 311,000,000.
Judging from the tremendous increase In the production in
these states in the last years, i t i s harder impossible to
over-estimate the probable production in the next 20 years*
The population of ttese li-vu states in 1900 was
2,350,022, and in 1910, 4,654,695, a gain of nearly 100 per
The increase in business, agricultural products and
banking capital and deposits i s many times greater than the
iaor ease in population, as w i l l be shown by the following
In IS98 the t o t a l deposits of the 216 banks in Minnesota
were #59,370,000; in Sotth Dakota thi deposits of the 190
banks wero $9,713,000; the deposits of the 111 banks In



Joseph Chapman

I north Dakota were $9,109,000; or a total for th» tliree
j states of $78,192,000.

In 1913, the deposits of the 1046

j banks of Minnesota were $379,013,000; the deposits of the
625 basks in South Dakota were $90,530,000; and of the
751 banks in Worth Dakota $90,000,000 , ox a growth in 15
years from #^8,000,000 to #559,000,000.

It i s not possible to take any similar area in the

tfaited States and show any/era approximating this*

Vow in the d i s t r i c t i t s e l f there are 2,978 banks with

a combined capital of #109,000,000 —
The Secretary of the Treasury:

Are yon speaking of

national banks?
W% Chapman: watlon&l and state.
The Secretary of the Treasury:


HJr. Chapaan: yes.
The Secretary of the Treasury:

HOW aany national banks

hare you?
Mr. Chapman: I hove them a l l separated here for you.
A t o t a l combined capital of #109,944,000, and surplus of
|6l>7H t ioO with deposits of #858,660,000, and loans to
ovitonars of #765,220,000,

652 of the 2,978 ar« national i

banks and the balance, of 2,326, are state banks.

In round

' 6-17

Joseph Chapman

numbers $80,000,000 of the c a p i t a l and

surplus, of a t o t a l

|l70 t 000 f 000 in that d i s t r i c t i s held ty the national

tanks and $90,000,000 by the s t a t e tanks*
The Secretary of the Treasury:

What Is the surplus of


j t h e national banIcs?


wr. Chapman:

The surplus of fixe n a t i o n a l books?

The Secretary of me Treasury:

$80,000,000 capital, and

how much surplust
Vr. chapman:

About •26,500,000,

The secretary of the Treasury:

That would give you a

oank there with about $6,000,000 capital?
Mr* Chapman: y e s , a / L i t t l e l e s s than $6,000,000.
The Secretary of the Treasury!

What would I t s resources

Mr. Chapman: T e l l , the deposits which could toe furnished
to a federal hank would he a l i t t l e short of $20,000,000,
about #19,000,000.
The Secretary of Agriculture:

ghat ** ***** t n « national

Mr. chapman! y e s , from the national 'banks*
The Secretary of the Treasury:
Mr* Chapman* yes*



Joseph Chapman

The Secretary of Agriculture: What i s the law as to the
state banks in that section joining this system?
Mr. chapman: I think the law would haia to be amended to
allow a state bonk to own stock in t h i s federal Reserve
The secretary of the Treasury: You mean In all these
»r. Chapman: T think ao.

I know we are looking that

matter up in Minnesota now, and the matter i s up before the
Department to see i f i t can be arranged.
The Secretary of the Treasury: You may proceed*
Hr. Chapman: On the map you ha-» before you we show the
dlstanoea between the Twin c i t i e s and rarioua supply centres
for the northwest; also the distances between Chicago and
these centres.
The Secretary of the Treasury: Hay X ask you a question
just here:

I f a bank were established at Minneapolis,

where should Duluth go?
Mr. Chapman: Duluth would go to Minneapolis.
The Secretary of the Treasury:

T* the great bulk of i t s

business with Minneapolis or with Chicago?
Mr. Chapman: Yes, I t i s grain and ore.



Joseph chapman*

The secretary of Ike Treasury:

Tt i s more with Minneapolis

than with Chicago?
* Chapman: Veil, T should think so*
The Secretary of the Treasury: Bit you do not know the
facts about that*
Mr* Chapman :

I do not know, out ray judgment would he

most certainty they do more business with Minneapolis than
they do with Chicago*
The secretary of the Treasury: ^roceed*
Mr, Chapman: The only possible inducement that could be
offered these 2,526 state banks to join this system would
be the convenience and usefulness of such a bank to them, and
that convenimce and usefulness l i e s in making i t possible
for then to use the system along the lines of present established relations*
In a l l this district that we have been speaking about,
25 years &t the mo it, and for a large part of i t 10 years,
shows the period of greatest development.
I am going to turn back and call your special at t ait ion
to these figures, which are marvelous.

Prom 1900 to 19IO


the agricultural wealth of Minnesota increased 68 per cent; ;
of forth Dakota 2U per cents South Dakota 162 per oent;


Joseph Chapman

Montana 112 per cent; and Washington, 191 per cent*
In a period of time from 1900 to 1910*

That i s

Those percentages,

Mr. secretary, will give you sane idea of why this region
that we are speaking at out now particularly i s known a s the
oread casket of the world,

A leading miller In Minnoapoli s made the statement tiro

I years ago that 33mtana alone i s capable of raising wheat

! enough to feed the eitire United states,

As enhancing the importance of this district, we may
mention the fact that within the last few days the local
Parliament a of the provinces of Manitoba, Saskatchewan and
Alberta ha* unanimously passed resolutions to "be forwarded
to the Dominion Parliament at Ottawa, in favor of removing
the Canadian tariff on wheat, and the present premier of
Manitoba, who strenuously opposed xxxx reciprocity, and one
of the conservative members of the present Cabinet, hare
come out strongly la favor of such, removal.

It i s

confidently predicted in Canada that It i s only a $iestlon
of a short time whm this tariff w i l l oe removed, and when
i t i s removed, Minneapolis i s hound to be the cash market
for a large amount of the wheat to be grown in those
provinces t la westers Canada, VIth diversity, variety and


Joseph chapman

! rolume of production from the s o i l , the forest and fee mines,
! no other d i s t r i c t of simi&r area in the United States can
; begin to equal it*


In conclusion I wish simply to say that in my opinion

I one of the greatest perils of our country i s the very rapid
growth of our great c i t i e s at the expense of the rural
| communities*

The problem of the future i s going to be to

! feed the people of America*

Gentlemen, the strongest

i argument we can present for the location of a federal
Reserve Bank in this d i s t r i c t i s that such a bank would be


of the greatest assistance in the development of the richest
agricultural section of the United States*

I desire to

thank you for your attention*
The secretory of the treasury: What i s the practice In
Minneapolis about the payment of interest on bank balances?
The See rotary of Agriculture:

Is somebody else going to

speak on the banking feature?
Kr. ohapjaan: Yea, Mr* Chamberlain w i l l speak on the
banking features*
The Secretary of the Treasury: I s he better informed
about the reserve question up there and a l l these banking

problems tkan you are?



Joseph Chapman

"»«r. ChapBoan: Hb, I think I can answer the questions, and

| i f I can, I w i l l be glad to do i t .
The Secretary of the Treasury: what x want to know i s

! what the practice i s about the payment of interest on bank
:' balances and reserves in Minneapolis*

Kr. Chapman: Two per cent.
The Secretary of the Treasury:


Mr. Chapman: yea.


The secretary of the Treasury;

Two per cent?

HOW about the collection

of checkst
W» Chapman: You heard what T«r. Morgan said t h i s morning
about the exchange charges of Minneapolis and St. Paul?
There are no free collections of checks.

On account of that

rule of the clearing House in the Twin c i t i e s , whereby the
banks make aa exchange charge on a l l checks coming into
jj that territory, the banks in both Minneapolis and St. Paul

, l o s t considerable business from I l l i n o i s , Indiana, Ohio and



other s t a t e s , which m

not directly tributary to us, but

which kept accounts there on aocount of « llecting checks}
so that the balances i s the banks in Minneapolis and St.
Paul are as nearly legitimate banking balances, held there
on account of Minneapolis and St. Paul being a nark at, as


any two c i t i e s

Joseph Chapman

in the United states*

The Secretary of the Treasury;

T&e practice i s the same

in St. Paul as in Minneapolis?
Mr. Chapman} yes.
The Secretary of the Treasury:

Because you hare a Twin

j. Cities clearing house?
Mr, chapman: yes*
The secretary of the Treasury: Hare you in this brief
here any facts or figures which, w i l l show what percentage of
the Business of t h i s territory i s done at iflnneapolis and
St. Paul as against Chicago.
Mr. Chapman: Ho, sir, not as against Chicago.
The Secretary of the Treasury! HOW mudi of i t passes
through Chicago, for Instance, and how much stops there*
Hr. Chapman* Ho, we can find the argument in that "book
shoving tk superiority of Minneapolis over St. Paul as a
I banking centre and market.
The Secretary of the Treasury;

And nothing else?

Mr. Chapmant Ho, s i r , nothing e l s e .
The Secretary of the Treasury: You do not give us any
light on the question of hating this territory nerved by a
regional bank in Chicago with a branch at Minneapolis or


Joseph Chapman

! St. Paul?
Chapman: Yes, I think we do.

secretary of the Treasury: You haTOdealt with ttiat

j»r. Chapman: yes.



Our entire argument i s based on that,/

there must t e a regional bank in t h i s vast territory whioh
Z hare described.
The Secretary of the Treasury: Ye31, I say as against
having the headquarters at Chicago, with a branch at
Minneapolis, attaching Hinneapolis and St. Paul and that
territory to the Chicago district; hare you any Information
here which would giro us any light as to whioh arrangement
would be the most advantageous in this territory?
Mr. Chapman:

Yea, that i s for file shipment of

ourrsney for the purchase of grain*

Theprincipal point

we sake i s that in the purchase of grain the local elevator
buyer must be near a ready souroe of currency supply.
The Secretary of the Treasury: Sow, assuming that you
had * branoh of the federal £,eserve system which, of course,
would be capable of supplying a l l your necessities, would
you net be about as effectively served as if you had a
Beglonal Reserve Bade there Itself?


Joseph Chapman



vr. Chapnan: Hof s i r .


The secretary of fee Treasury:


Mr* Chapman: WoU, the only branch banks that I aa

why not?



I acquainted with are in Canada,

in those banks the managers

i of the local branch have not th© authority that the hetd
; offioehas*


The Secretary of the Treasury:

But do you understand


the provision of this b i l l about the Branches? A branch
I, bank ia composed of seven directors, and you have practically,



l o c a l management.
W. Chapman:


The Secretary of the Treasury.

Jour of those directors

art chosen by the Regional Bade for the district,
Mr. Chapman: Yes*
The 8 tot Mary of the Treasury!

of course, they are chosen

with respect to their knowledge of looal conditions; and
three are ciosen by the federal Eeoerre Boards so you hare
aa actual wo iking organisation there under the general supervision and oversight of the Reserve Basic of the district*
icr. Chap man: Yes*
The Secretary of 3** Treasury: How with such f a c i l i t i e s
« • these provided, you certainly would be able to get a l l


0-26 -

Joseph Chapman

the currency you needed, and probably with the same effect
as i f you had the headquarters bank i t s e l f .
Wr. Chapmn:

That would depend entirely en how you worked

that system out,

T know of no place where a branch has the

same authority as the central institution*
The Secretary of the Treasury* Veil, you have telephone
connections withbChicago?
W, Chapman; Yes.
The Secretary of the Treasury: And quick telegraphic
communication; and of course, a very large amount of discretion i s lodged In the local Board.
Mr. Chapzcan: The question of servioe 1 s the question we
hare In mind In the location of that bank in Minneapolis.
Minneapolis has always been a city that served an agricultural territory*

The offloers In the banks in Minneapolii

hare been in those institutions none of then l e s s tIan 2$
years, and they are intimately acquainted with the conditions.
The Secretary of the Treasury: y e s , we know that, but

there i s a point la connection with this particular die-


trlet that you hare laid out there, which i s quite important4
and that i s that you hate practically l i t t l e diversification


Joseph Chapman

of industry*
Mr. Chapman! Ho, that Is not so at all*
The Secretary of the Treasury: You ha ye, as X understand
, i t , a very large amount of farming in this district?

JXr. chepman: yeo.


The Secretary of the Treasury! Your argument was directed
Tory largely to that, and that i s the reason X am proceeding
on this assumption, that your demand must come at one season
of the year; that i s , you hare your peak demands then. Vow
i s that not rather an unfortunate situation? would not that
be largely a borrowing district a l l the time and hare to
rely upon outside d i s t r i c t s for asslstance wheneror the
extreme demand came*
xr* Chajraan: No, air, I do not think so* We are getting
so we do not rely upon anybody now*
The Secretary of the Treasury: vhat were ywu* re-Alseounts
l a s t fa a , for instance?
1D\ Chapman: you asm in ay own institution?
The Seoretary of the Treasury! No, I am talking about
t h i s district*

Rare you figured that up at all?

Vr, Chapman! t o , there would be no wqr of finding that
out* Bui 1 know there has been a remarkable change in the


Joseph Chapman

l a s t ten years in the re-discounts in that territory.
The Secretary of the Treasury:

I t is rather a simple

matter to figure i t out, because the returns are now made
so that the re-discounts are known, and your indebtedness
I to other banks i s shown by the Comptroller's reports, and I
I thought you night know tho se figures.


Kr# Chapman: The only question i s , being interested in a
stock holding bank under this sy tern, Hhether there would
be enough demand for the money a l l the time to use i t ,


i have not only grain which we must furnish money for in the
f a l l , but our business i s peculiar.

The mills in Washington

ship lumber to the 1200 or 1500 yards in Iowa, which hare
headquarters in Minneapolis*

They ship i t to these yards

in Minnesota, Berth and Soutii Dakota, and Montana ,
business i s centred in Minneapolis.

and thai!

The farmer borrows the

money from the l o c i lumber yard from the spring until he
gets h i s rettrns from h i s or op in the fall*

About the time

that lumber man i s paying off, we are loaning money for

i t i s not what you would c a l l a one-crop country

at a l l .
Sow/Minnesota alone furnishes 53 per cent of a l l the
/ -.
iron ere manufactured in the United States* The state of

Joseph Chapman

Montana, which ig i s t h i s d i s t r i c t , i s the largest copper
producing state —

The Secretary of the Treasury!

Howmuoh of that iron ore

i s financed through Minneapolis?
Mr. Chapman: yery l i t t l e , if any*

The Secretary of the Treasury:

That is what X thought*

I t goes down the lakes.


ur. Chapman:


goes down the lakes and is financed

either in Chicago, H«w York or Pittsburgh.

But the money

that i s paid to those miners, hundreds and thousands of
of dollars to the employes in those mines, i s all s p o t in

That i s cash.

The Secretary of Agriculture:

when i s your extreme demand

for money?
Xr« Chapman t

our extreme demands for money would come in

at out Worember.
The Secretary of the Treasury:

How long dies i t last?

Mr. Chapman: Hot ©rer 60 days*
The secretary of the Treasury:
grain, i s It not?

«r* Chapjnani

That i s practically for


Yea, sir*

The Secretary of tb« Treasury:

And the rest of sour time

Joseph Chapman

you can take care of yourselves, generally?
Mr. Chapaan: Yes, sir, we can*
The Secretary of the Treasury: But at that time you have
to re-discount, do you not?
Mr. Chapman: Yes, sir.
The Secretary of the Treasury: A great deal?
ID*. Chapman: No, I would not say a great deal; not a s
much as we did ten years ago*
The Secretary of the Treasury: Haturally not,
Mr. Chapman: Hot half*
The Secretary of the Treasury: But what does i t amount to

i f we could get any light on that, i t would he of

Xr» Chapaan:

X w i l l get those figures for you, as to what

the re-discoun t was at the time of the last statement, or
October, the October statement would he l>etter9 as showing
the highest.
The Secretary of Agrloulture: Do you suppose i t would he
possible for you to get any data bearing on the question s&
which the Secretary asfced, as to what part of this trade i s ;
haniled through St. Paul and Kinneapolis and what part
through Chicago, directly?

I s there any way to gjt any line


Joseph chapman

on that*
\rr, Chap&an: Those figures as regards grain w i l l be
presented by the gentleman who w i n follow me at this time*
The Secretary of the Treasury: But I mean as to the
general production of this district*

X suppose the railroads

oould giro you that data without much trouble, as to how
such stops a t Minneapolis end how much proceeds beyond,
KT« Chapman! Ye have our tonnage figures here, wad MT.
Pi eke w i l l illustrate that point warn he comes to i t further
along. Ye would like to hare that grain market situation
taken up by Mr. McHugh, Secretary of the chamber of Commerce*
The Secretary of Agricultures

Ye are just trying to bring

out your argument and get aXL the light we can against the
establishment of a branch bank there and a parent bank somewhere else*
]pr« Chapman I In t h e language of the Act I t s e l f , I cannot
determine just what authority these directors o f the branch
banks are going to hare* The only thing X hare to g» by i s


my eafcerienoe of what branch bank manager's /in other instl»
tutions i s . ' Ye would prefer to be a centre and have that
auttority lodged there and distribute i t from there, on to
the branches to the west of us* Outside of that, we only — '
Federal Reserve Bank of St. Louis


I G-31

Joseph Chapman




The Secretary of Agriculture: ©f course, under tl» Act

! i t i s possible for orrery functiondfcscharged by the parent
j bank to be di seharged by the branch.

Mr. Chapman: yes*


The Secretary of Agriculture I The only difference would
be possibly some slight differ enoe in the constitution of

[ the Board, but ovm in the* case of the Board of the Reserve
i; Bank, you understand, of course, that i s not made up from a
particular locality, except the member banks decide i t that
way* You might hare a repreBentatlTe on the Board of the
Begional Bank no matter where i t was located*
Mr* Chapman t yes*
The Secretary of Agriculture: And on the other hand, if
I i t wers in Tiinneapolis you might not hare any or might only
[ bars one*
The Secretary of the Treasury:

They hare to be chosen

from the mtlre district by the banks which are classified
onder thia Act into three classes, and a s the Secretary
•ays, you might not hare any representaUre on the Board,
beoaute th» banks in the district might not happen to elect

And en the other hand, with the local branch bank

you would be sure of representation*

Bow, as I understand


Joseph, Chapnian,


the situation, what you need is currency promptly supplied
; at the time of extreme demand*

L*r. Chapaan:


The Secretary of ths Treasury: flow the presumption I s

that viUi a propor/managed bank, of course you would seoure
just the setae benefits as you would through the headquarters
bonk I t s e l f .
&*• Chajnan:

I could not figure how you could put a

branch in Kiuneapolis and serve that territory to the west
of un without making such a large bank of Chicago that i t
would be out of proportion to the rest of the United states*
The Secretary of &e Treasury: You night hare branches
in other parts of the territory.

They are not limited to

IP*. Chapman: But there nu3t be a headquarters somewhere*?
The Secretary of the Treasury: Yes, naturally*

But there

ig one point X should like Tory much to have you bring out*
You can sap plan en t that by ava mining the Comptroller18
reports, said of course we can do that ourselves*

But take

the last comptroller1 e report and scalee up data showing what
the borrowings of the banks were in t h i s district at 3ie
time of extreme demand last f a l l , and contrast that with

Joseph chapman


i the available resources of each a tank as you h»re laid i t
j out.

We should like to hwre that data.

Mr. Chapaan)

t will get that for you and X w i l l say that

; the banks of Minneapolis did not ha?e ftay rediscounts and
I we did net take any of the rrovommcnt nonsy offered for

I asststanoe in staring the crop. That shows the indcpqadmoo
; in a financial way in which this centre I aa speaking about
I has grown in the last ten years.

The secretary of the Treasury! Yas that due to the


j shorter orop or did you hacre wore soney this year and did
not need i t .
m*« Chapmmi VGH, It was bath.
The Secretary of the Treasury!

wnat was the orop shortage

I s this di strict?
V* Chapman I Oh, there was a shortage, and there waa not
as sjBoh noney required to handle i t , on account of the
f excellent weather ve had to handle i t , and i t was gotten In


in hatter shape.
The Secretary o f the Treasury* You had an application
for assistance?
Hr# Chapman? yes* and we did not use it«
The fteoretary o f tho Treasury;

I undomtand, hut i t was



reserved for ycu*
Mr* chapnaa!
?he Heorotary of the Treasuryi

But the fortunate eireum*

stances of which you speak ma do i t unnecessary for you to
use i t ?
10% chapman i 70s*
The secretary of tho Treasury: But you had i t in roservs?
10% ChapmanJ wo had i t in reserve* and that i s why we
figure that t h i s system we are going into i s going to he
very valuable,

Whether we use it or noti <*e have it*

The Secretary of Agricultures You extend -our district to

The BooroUry o f Agriculture!

Have >ou coo suited with

these yeople out there?
Mr, Chapman* VeU 9 net a s t*r vent as Seattle* Ye haye
oonsulted with our friends in J&ntuna. Mr. Reynolds read a
telegnus t h i s morning that the Helena clearing House ~» t
w i l l Introduce that again* You had i t once, i t i s the sano
teiegrsAk addressed to Mr« ehaahorlain of the clearing House,
the *as» telegram a s %T« Bsjnolds road t h i s nomings

•Rtplles recoivod to inquiries frost national Banlca in

• 6-35

Joseph Chapman


; Montana repra coat ing total capital and surplus of eight
:: million do liar a ahoar that eighty por cant select TffiR

; and twenty per cent s&ect Chic ago a a f i r s t choice for
| location of pud oral ^aoorre Barfr, no othor citloa mentioned,

I; for second choioo eighty pur cent select Chicago and thirteen
par cant select Twin c l t l e n , aU othar points sevsn per cent*
P.©plies from state fcaaka of Montana repreaantlnff capital and
surplus tea ad 111 on dollars cap r taring f i r s t choice for
i location of reserve ofc&9 eighty/per cent select T*iis c i t i e s
j, nlite per cent pacific Coast, fire per oont Chicago, three
I per cont Benrer and for seeood choice olxtj four per cent
I select cMcapo,eight per cent eelsct T»ln C i t i e s , «Lx per

I eeat

select Pacific Coaet, four per cent select Eeavar^

eighteen per cent no eh»ise*
Selena Clear Ing House Aiss*n«*
The secretary o f Agriculture! Hftio you any information

froa Idaho?



«r # chapmant Ho, I hare no special infonsatira*


principal reason we attach those sta ts* to the rdnncapoli o
hank Is that the trmde channelB are east ssA vest*


I s net onotaor section la the t!nlted stats0 that l e a s
unique and composite In one d i s t r i c t as this particvliir




Josqph Chapman

district I am speaking about.

The Secretary of Agriculture: You are aware of the

;, ence of Spokane, Seattle and Portland out there?
;: Mr. Chapman: Yes, Spokane and Seattle banks both carry
| heavy balances with Minneapolis, due to trade relations.

The secretary of the Treasury: Will you f i l e with us a

[ statement showing to what act en t those 'banks carry their
reserres in Minneapolis?

Mr. Chapman: Yes*

jl The Secretary of the Treasury: Have you any idea of the
• extent to which they do that?
HT, Chapman:

X could make an estimate, "but I think the

banks In Seattle alone or Tacoma - The Secretary of the Treasury:

A l l of them.

You are

tubraolng the whole, state,


Mr. Chapman: Yes, but we are not asking for Oregon.

The Secretary of the Treasury1
Tacoma, Seattle and Spokane*

I understand, but take

Mr. Chapman: I should say the banks of Seattle and Tacoma
carry on deposit with the Twin Cities banks #2,000,000.
The Secretary of the Treasury:
sore of their


So you think they carry

there than in any other city?



Joseph Chapman

\ Chapnan: Ho, because we are not a reserve city.
; There i s an artificiality connected with some of this
' proposition by reason of the fact that three c i t i e s in the
! United States are central reserve c i t i e s and balances, count
Ij as reserves with them, and balances carried by Seattle with
\ Minneapolis woul only be as large as the actual business
j retirements c a l l for, because i t would not count In their

' statement a s reserve.

The Secretary of Agriculture!

That i s perfectly normal.


Tgr, Chapman: Yes, sir, that i s normal. As I stated, I

( do not think there are any two c i t i e s In the United States
where the bank balances are more normal than In Minneapolis
and St. Paul.
The Secretary of the Treasury:

with the par ring of

exchangee between these Federal ^eserve Banks, Mr. chapman,
do you not think that the necessity for carrying these
a r t i f i c i a l baJ&noes In different cities" for exchange purposes
i s going to largely disappear any way.
jrr. Chapman: yes, I think i t w i l l .
The Seoretary of the Treasury: fa are going to have
greater equality and uniformity of exchange throughout the

country because the exchange of t i n t yederal Reserve Bank


Joseph Chapman

, d i s t r i c t would pass at par everywhere.


?n% Chapman: Yes.
iphe secretary of tie Treasury: And ttiat w i l l materially
alter some of the present methods?


30% Chapman: Thero i s no creation in my mind at a l l about



The Secretary of the Treasury: Hew York exchange i s now


• more in demand than any other exchange,for perfectly tbrious
j, reasons*
Secretary of Agriculture: What was your thought
;: about looming?
Chapman: That depends on wba£ you are going to do
with San ^ranoisoo and vmrer*

If you hare ft bank in San

jj Francisco, Wyoming would certainly go in there* But I
f should agree with the gentleman this morning from Chicago.
that the trade territory of Chicago should gonwest to
Rooky Mountains and include portions of Colorado, if not a l l
of i t , and Wyoming. Utah, Sevada and Arizona belong to San
yranoiaco, a s well as does Oregon. HewXexieo and Oklahoma
probably belong to Kansas City, if you estabUsh a bank
in that city.
The Secretary of Agriculture: Hare you thought or


Joseph Chapman

Interested yourself much in the general question of the
j dirisLon of the whole country?

Mr, Chapman: only in this way, that the honks should be

! located in natural markets, and «hat T mean "by natural
| markets i s both in finance and the movements of trade* The

; financial capital of the Hew Bi gland States i s Boston* They
would probably hare to have a bank there anyway, new York

| would hare to hard a bank, and in order to serve as a

j protection or buffer to the rest of the United States, I
* think Ken York should have as much territory and as large
| a tank as you possibly can give it*

They stand there as a

bulwark between the rest of the United States and Europe,
Is oase Europe should have trouble and hare to s e l l our
securities, and there ought to be a bank in sew York city of
sufficient slice to command the respect of these European
The Secretary of Agriculture!

Do you think i t i s going to

f a l l upon Hew York in i t s entire aspect, in ease such a
trouble arises?
W» Chapman: YOB, T think they always hare looked to
lew York*
fhe Secretary of tfc« Treasury: You are talking about


I the present system?
1f r.

Chapman! Yes, sir*

The Secretary of Agriculture:

So you think the foreign

banks w i l l look to Sew York entirely under t h i s system, or
look to the whole power of the pederal Reserve Bank which
i i s co-ordinated through the Central ^eserve Board*

Iir# Chapman: I think until you get this system working

j and i t works out by evolution, that those gentlemen over in

Europe are going to be more impressed by a large bank in


Bow York City than by a system of co-ordinated banks throughout the United States which they do not understand) as to
how i t will work.
The Secretary of Agriculture: What do they look upon in
the ease of the Bade of England?
Mr. Chapman! They look to the old established Bank of
JEogland as being a s strong a s the Book of Gibraltar,
The Secretary of Agriculture*

Tor controlling the rate

of discount, i s i t not?

The Secretary of Agriculture! What controls the rate of
discount in t h i s system?
XT* Chapman J What controls the rate of discount in this




Joseph Chapman

aystam that we are talking about?

The Secretary of Agriculture! yes*
XT. Chapican: The yederal ^e serve Board in Washington.


The Seoretary of Agriculture:

1 then?


¥on*t they look to that,


vr« Ohajaan: Hot on the start*

The Federal Reserve Board

in Washington w i l l hare to demon at rate to the people In
Europe that the/ are going to run that bank and are masters
! of i t , first*

i* 1» *B experiment*

I beliere i t i s going

< to wonc out a l l right, and we are glad to be a stockholder
i' in i t , but the system i s not going to be a success right
f from i t s inception.

Ve w i l l make some mistakes in It*


Joseph Chapman.
fol Ph
4 15
The Secretary of Agriculture: You mean It is going to bo
a failure?
Mr. Chapman: So sir; I do not.
The Secretary of Agriculture: Then it will be a success?
Mr. Chapman: Tee air; eventually, it sill.
The secretary of Agriculture: If it ie going to be a sucoeea from the start, it won't be a failure from the start.
Mr. Ghap&an: I say it has got to be demmnatrated to these
gentlemen in Europe that it is a-success.
The Secretary of the Treasury:

The gentlemen of Europe

to whom you refer are pretty keen citizens of their country,
and I think they are about as keen on banking as any people
in the world.
Mr .chapman: Tee,, air.
The Secretary of the Treasury:

Would It surprise you if I

said to you that throughout the course of the disoussion at
Washington concerning the provisions of this b i l l , these
people were exceedingly well informed about it?
Mr. Chapman: Tes, s i r .
The fiaoretary of the Treasury:

And that they already un-

derstand this system?

Mr* Chapaan: Tee, s l r j I know they do.

\ d 2b


Joseph Chapman•


The Secretary of the Treasury: And the expression of

1 ion which hare been rendered about It would indicate that




!' they consider the strength of the different units here ao be- i



ing based very largely upon their co-ordlnatede power with
our federal Beserve Board?



Mr. Chapman: I don't doubt that i s so, and that i t i s go- !
ing to work out, but I am only giving you cy opinion that I j
think a large bank would be more impressive, because they are I

i used to dealing in large figures, the Bank of Barmany; the
JBank of England) the Bank of Franoe; immense totals, they
stand there like the Hook of Gibraltar, and my idea In making
f that statement was that in the beginning it was very important to impress the people in Europe that everything was absolutely safe and sound on this side of the Atlantic, and that
we had a strong bank located in our flnanoial capital, In
Kew Tork City*
The Seoretary of the Treasury: The Bank of England, as
you know, ha* lees capital than some of the private banks.
Mr* Chapmant

But they have had experience for generations

to back them up*
The Secretary of the Treasury : We are going to atart

this syitei off with banker* with expajrienoe, as well*


d 3b
Joseph Chapman.





Yea, s i x .


Tto Secretary of the Treamiry :

And I think that ire can


{ tr^tcfc our banker© againot soae of the other© in the world*
The Secretary of Agriculture: Perhaps you will take the
I trouble to make a map expressing your idea of theee diatriofcs.
j: Would you base i t or. the minimum or maximum?
Ux,Chapman: Mr. Secretary, I should baa© i t on the minimum,
and alloff room for expansion

You have about the hardest

wcrk t o do in t h i s connection of any two men I know of ai.ywhere.

You have get to satisfy,—-

The SeoA©taxy c* tho Txearary:

We are getting a l o t of,

ing f o r .

Qot&u of i t cay not be just what you are look-

Thero are five cardinal points that I would have

in r.indin these bankb, £ew York, BOB ton, Chicago, San Franoleao and Uinneupclie, and then I would begin putting the



i n , booauo« — UincoapoXia i s going t o be the financial

Gibraltar between thia country &nd the great Dominion of

Wt» are going %o o an if-cense trade with that coun-

try. There i s not a aan l i v i n g today that can begin to at*
satinate the p o a e i b i l i t i e a of the development of Western
Canada, flowing down through t h i s gatew&y into the states*



Joseph Chapman.



Then I would suggsst a bank in either Kansas City or St. Loui t , in either Philadelphia or Baltimore, in either Sew orl«anp
or Atlanta.


The Secretary of the Treasury; How large would you aaks


i the territory around Bew York? Have you in your nind the
[ extent of territory you would sorer there?

Mr. ghapmanx Bo sirj I have not. There i s the hardest
I think you will haTe to faoe, in Eetv York.
The Secretary of Agriculture $ Suppose you take one of
those saps and send us your views.
Mr* Chapaant I woula be glad to do i t .
The Secretary of the Treasury:
Mr* Chaptani

Thank you, Mr.Chapman.

We appreciate the time you have given us, Mr*

The Secretary of the Treasury:

Let us h&v© Mr* KaHugh.

Mr. ForgantWill you let ne read a telegram?
The Secretary of the Treasixryt

Tea, sir .

Mr. Forsauat This telegram that I have just received i s addrtsssd

to the Federal Peeer^d Be*u Orgenizaticn, sent to

the Care of the First Bational Bwik;
•Exioting business relations and f a o i l i t i e c of cx
and transportation sake It tapertttive that Kcrthsrr. Kiohlgan

.1 5b

John c ,

b* attaohad to Federal Saserve District having Chicago as a




We trust you w i l l give t h i s oaraful act favorable

041 i t e r a t i o n , Houghton Rational Bank; Hoxighton Citizens Ka- j
tion&l Sank} Houghton Firet national Bank, Hfmoook Suparicr
Eat ion el Bank, H&neook First Rational Sank., Caliraat First Rational Bank* Lake Linden First Kail Bank, tauritim Firet Katl
Bank, mabboll, v i t h raaouroaa of over thirteen w i l l i o n dollurs*

Hough tor. Rational Back.1*

They telegr&phed thoir different corroepcndente here
/ t o plaoo i h i e strongly before you, but that has nlra&Iy bssn
done, and we at pa &r here on tehftlf of fill
8TA1X15KET OF JOHK 0, UoHugh.
The Seoretury of the Treasury!

Give your fuTtl name* yo\ur

ocourotion and reeidenoe, rleaee*
Ut» lfcHii£hi

JohnO. MoHughj Soorotary of Ohasttoer of COB-

o e r o t , Mlnn$apolifl> Uinneeota.
The Secretary of the freseurys;

Tjave you any fnota in a l -

rfition t o those whioh have been preeented, Mr* UQTd\i&i, that
you want to present to the Cocsitteot
Mr. MoHuefel

Hr* Staxetary, I have been atktd to prtpar*

&nd preoent t o you a very briaf atateaont oailing, attention

ft 6b


John G» MeHugh.
;o the importance of tha territory outlined generally by Mr*
hapiaan, &n3 to present to you tables and charts illustrating
:t$ which we will leave with you*
The Secretary of the Treasury:

Is that covered in that

?rinted volume T
Mr. KcHugh: In that brief argument*
The Secretary of the Treasury: You don't call this a brief
xrgux&ent* do you?
Mr* McHugh: The argraent i s briefer than might appear* The
reading matter in an ineignifleant portion of the total• Threefourths of it —
The Secretary of the Treasury:

I was not objecting to i t ,

>ut X just wanted to be sure about the correctness of the
era* •
Mr. KoHughs Termsi of oourae, arefrelatlTe*


if the volume oonsiats in graphic chartB, and probably one1 alf of the balance ir tables for reference purpoo^c, so that


|he argument itself ie comparatively brief# and tLa tables
that have to do with the development and growth of that 000lion of country from an agricultural standpoint are all at~
faohed* Thie itatement it on about three and & half page**

id only refers to material pointe of cont etrikiag importauoe

John G* MoHugh*



shown in the tables, and has to do in a general way with calif
ing your attention to the following features.


The Secretary of the Treasury: If you desire to read that,
we will, of coarse, permit yOu to do it, but if it is all
j printed here and ready, we rill read it anyway*
Mr* ||OHugh: The point is that I do not think it is neoeasary for me to read it*

I believe that it is the desire of

the representatives from Minneapolis that I bring your atten! tion, however, to a few features, in order that you shall see
j the theory on which we present this*


The Secretary of the Treasury:


Mr* voHugh:

su pose you bring that out*

First, as Mr* Chapman outlined to you, from a

\ grain produoing standpont, and from the distribution of that

« product, these states of Minnesota, Korth and south Dakota,
I and Montana, especially, are peculiarly co-ordinated, and
[ Minneapolis i s peculiarly the distributing center, and your

| attention will be called in this printed matter to the relat i r e growth of those four states from an agricultural standpoint, as ooicpared, for instance, with the relative growth


pas the
& total
and St.
to grain
Joe. southwestern
In other
flax eeed
&B& us

d 8b

JJohn G, McHugh

potatoes In those four states which represent something like
$441,000,000 a year*

That i s lower somewhat than the t o t a l


of the same things produced in Missouri, Oklahoma, Kansas,
Kebraelca and Colorado, five s t a t e s , practically connected with
the thxee southwestern markets, Omaha, Kansas City and St.

But ic t h i s statement your attention will be called to

the fact that the rate of development in the four northwesti

ern states Is five or six times as rapid as the rate in the j
southwestern states, although at the present time those five |
; great states in the southwest still produce a greater total
on account of their being older than the northwestern states*
Another important factor which Mr. Chapman has touched
upon io tha immediate possibility of the boundary line being
eliminated as a barrier to the incoming grain, and the great
probability that if this barrier is removed, that the distributing centers, Minneapolis and Dulutb will be very greatly affected by the Inflow of grain from this section. In
fact, STen today perhaps a million and three-quarter bushels
of grain ware iaported, roughly, into Minneapolis during
the past yaar, and duty paid, and perhaps five or six million bushels Into Duluth, both inbound, anc! duty pall} so

that notwithstanding the tariff boundary, there is a move-

John "• *wwu**i


esant from Western Oanaia Into the States, and i t i s at the
preaent tiise*
Western Canada w i l l produce probably t h i s year 4CO,Q0C*O00
to 4S0|000^000 bushels of grain, and wo figure that probably
Fort William end Port Arthur, the Canadian ports on the lake
will receive SO0*OO0»0OG bushels of that.

If the bowdary

lines should be eliminated by the elimination of the tariff,

no small a percentage &e 20 per cent of the grain which
flows into fort TfilJiam and Port Arthur should be diverted

1; to Vinr.earolio and Buluth, It would moan an Increase of
about 40>0C0,000 bunhele, or possibly $30,000,COO inoreaaed
In epeaking or? thie territory, the previous epeakera hare
spoken cf the faot that some portions of south Dakota are
tributary to


in Iowa such as Sioux City;

and In

tent correction in thip argument or brief we hare di&cusaed
Kii.r.eeota, Rorth and south Dakota and Montana as the four
states that were tributary to Minneapolis and Duluth} but
your attention should be called to the faot that a large po»
tion of the grain from northern Eebraeka and northern Iowa
i t distributed through and received at the center of Minn

eapolis, and a rery large portion of the elevator Interests


d 10b

John G, UoHugh

I buying thie grain direct, are in Minneapolis; in fact* every
| year a very large quantity of winter wheat is brought up
| from Kebrasfca and Kansas and as far south as Oklahoma to Minn-*
eap9lie,oitt acoount of ita enormous importance as a a l l l i i g
center, and thie grain brought from the southwest to Minneapolis will carry from five to fifteen million bushela a
year, but i t i s a very considerable portion.
In the Chicago statement something was sail of scuthern
I Minnesota, about a certain portion of grain being brought


i from Southern Minnesota into Chicago*

It is difficult to es-

timate the exact movement of grain in Southern Minnesota or
in S or them Iowa; but I think it is very xrobable that the
quantity of grain received from northern Iowa in Mi&neappfels
is quite equal to the amount of grain from southern Minnesota that Is received in Chicago! especially if the amount of j
grain received in E braska, Kansas, and Oklahoma is eliminaj

ted, because It shows Oklahoma: , Eorth and South Dakota,


Montana and Minnesota as being directly and peculiarly tributary to Minneapolis and Euluth,
Minneapolis and Buluth are* ofocurse, aisong the very first

grain »ark*t« in tht country, liirme&polis being outside of
Chicago altogether tht leading grain market in the country.

d lib

John 0 . McHugh


The grain i s , as i s well known, the small grain or wheat c?

rci: i s marketed with unusual rapidity, and i t Is a strain

jupon the financial reeeuroea of the section that i s quite
\ different from corn.
In other words, tbs demand for money in the movement of the
grain crop to Dakota, Montana and Minnesota, pute a strain
for a certain period upon the finanoial resources of the
country, greater than that occasioned by ths corn crop, which
tends to Dove with greater evenness through tfre year.
In the f a l l , in the beginning of the movement, about the
first of September, the terminal elevators at Minneapolis
and Duluth and ths country elevatore are praotioally empty
in ordinary normal years.

Thie last summer, owing to a very

large crop ths preceding year, and sons general oonditione,
an unusual quantity of grain was carried over in the terminal
elevators at Minneapolis and Duluth.

Thie represented per*

haps for both about |13,000,000 in value, and for the four
months from September 1st to January 1st, this stock on hand
in those two oentere inoreaeed by about $30,000,000, or to
about #37,000,000.
At the earns time, the country elevator the five
thoueand odd local oc&ntry elevators rose from nothing to


John G. MoHugh

about eighteen to twenty million bushels, or dollars worth.


, In othar words, thore is toiay probably in the oouatry e l e -


j vators tributary immediately to Minneayjolis and Duluth and


I in the terminals at Uinneapolis and Duluth about fifty-three
I to fifty-five million dollars in value in grain.

The Secretary of the Treesury:

That i s , there i s now, you

Mr. ttoHugh: There l e now, today.

In other words, that

vast stock of grain h&s inoreaaed at the oountry stations add
in the terminal markets during the four months, from September to January f i l e t , and that growth in value in a took a in
prioe will represent from fifty to fifty-five million dollars
value, a l l of whiohio a oaeh propooition.
In addition to that, a certain amount of grain i s alto stor-f
ed by the purchaser in the oountry elevators, and the outstanding storage tickets represent a l i a b i l i t y that at times
puts quite a strain upon the banks.

For instance, in 190?

the storage tickets outstanding

probably represented


about eight million dollars, and these were presented on ao- ;
count of the panic of that f a l l attached to drafts for pay*


uent, which, on account of the general situation could, not be
made. The point being that the movement of the grain crop


14 17,

John C. McHugh,

of the northwest puts a relatively greater strain during the
crop aovlng period upon the financial centers, than i s the
case where the crop i s distributed with more evenness ower
the entire year,
Second, Minneapolis and Duluth, as the statement till show
receive a yry

much larger percentage of the total crop and

actually distribute i t , than ia the oaee in the southwest.
Take, for instance* the percentage of the crops of Nebraska,
Kansas, Oklahoma, Colorada and Missouri distributed through
the three southwestern grain markets, i t i s touch l e s s in proportion to the total amount raised than ia the case in the
northwest, Minneapolis,
The* Secretary of the Treasury:

It a ©ems to ua that that

data that you are elaborating there i s all included here*
Mr. McHugh: Yes, i t i f .
The Beoretary of Agriculture: We cannot carry it in out
The Secretary of the Treasurys

We think it would be vary
nioh better if we were to sickly take the figures/and give j
then careful consideration at the proper time.
The point that is in our minds principally i« ae to whether
or not this district could be better served.from Chicago



! d 14b


*• MoHugh.

with the neaessary branches, than to have a separate dis~

trict at Mlnneapoli a or St, Paul, as they are asking for,and
the facts that have been brought out here in the statements
that your associates have made, together with the submission
of this, will give ue pretty nearly what we %ant.
Mr. HcHugh; That was &y only purpose hero, was to lay before you in very concise fora the facts concerning our situation at Minneapolis .

You will find in these tables the rnanu-

featuring processes that go on at Minneapolis, both in the
flour mill and linocei oil ^Manufacture, and the distribution
of that product in the raw form, ao well as in the manufaotured form.
The Secretary of the Treasury;

This ciatter* however, as

you say, i s all here concisely stated, and we will give that
consideration , We can really digest i t better that way. I
think there i s one other gentleman from Minneapolis* i s there
or are there it are?

There are several*

The Secretary of the Treacury;
ten o*clock in the scorning.

„ _ _ , fed

Then sre will adjourn until

We will resume at that time.

Whereupon, at 4i40 o'clock P. M,, the Committee adjourned

g9t \9\fo *t ten o.aloe* i- *-






I l i a * , January 2 0 ,

The o r g a n i s a t i o n Cotcmittuc taut pursuant to aftjouranent
| * t lf>:oo o*clock A.M., in Eoora 603 Federal Building, Chics*/;©,

| 111*.




Proa # S e c u r i t y

Pi rat
CiYic & Coshercu Autn. t

A# yitf


Pros* Aberduen

John B # H i t c h « l l |


a^orgc H# P r i n c a ,
John J # Pl&nniigfen! P r « e t So* St* PAUI K^tional B
jr# ¥ # Wh#a;er t P r u s t i Capital 2ruat Co#
Tfta# H&giYnyt ? r « » t # l S t . Paul Union Stock iarde Co*
C# W# Gordon,


P h i l . V# Harsog,
Charles W# &ae©f

Henry A# Iferrill f Qrrdim, I'errlll & Greitr, l£3portorat
John A, Swgnaon, The 3candan&vian American
Charlea H. F# Smitht


B# Tf# B&lley, Praa. First national

A# P* Dmwnonf Prea. PIret Rationed Bs*ni:f
Praoil: B# Yet tart Cauhiert Iowa national Bank*



E# Zi:^enn^nt rnun^ber Cor^nittte from Clearing Houae
Bt T. Porb0Bt Flret Katlonal ^ftnkt and Clearing Houst
tin win


Joieph A, T&bke, Logan County, I l l # Fei«ratit>n of

Philip E. Ifuhl, Logon County, 111. B&«kori Ago ci«iti&»,



Secretary of the Vrvunuryi


Ch&at>^rli»inf w i l l youj



I at&ta your f u l l nacau ^nd occupation?
? f r. Chamberlain: President of the fSeeurltlee H&tion&l


Bonk of I;lnno5polis t rtn6 rxnihar of t^e tflnnefrpolls Clearing
Houoo Aauocl&ticn,
The Socrert^ry of the Traaifturys

You know our problen«

I f you can shad i^ny l i ^ h t on i t f ^i* vould he g l ^ i to
from you #
Mr* Chsmbarl^in:

%ell t l*r# Socr^tury, I h&ve l>u«n

by th« Clearing Tiouuci Afi&oci&tion of !iinn
to p r e s e n t our %r&ui3ent f o r thu loe&t.on of & H^gioned
B nk *t Ifinne&pollti*
to my thbi

i n the / r e p a r a t i o n of our e*nef every

of the Clearing House h&a hi^d & p&rt*

We have repre**

here to&ac from #rary pajsh^r of the Miraueapalie
Houte AaeoeitiUon^ and t h i s p&per th#t I hm® i «
the enceniUB o f opinion of th$ e n t i r e memherthip* We
w r i t t e n i t f i t i s n o t very long t md we h w « f^*lt i t our duty
to giTt you the facta on *sfoich va haea our el*i*nf %nci I
would consider i t » fr*Tor i f ;-ou would elles? me to rcod tha

It is not long*

F, A, Ch&mberloin,


Mr* Chairman wid gentleman of ths P
Or/j&nlnation Committal
If your Conjmitt^e ifcikll designate the
vmbrr*cin/; irinnesote, Uorth and South ID&kotfc, !Iont&na
W&shinpton aa a Federal Resjerrc D i s t r i c t , you will "be charged
with the further duty t sacond only/ii^ortance to the
of deoignatin: with such territory^

a Federal

city #
Section 2 of the Act requires;

*Ih«*t the Federal

heserv^ diutriote eh&ll be apportioned vfith &xi% r<ig**rd to
the convenience %nd cu&tom&ry cour^^ of t>unine^0 mid
not m*ct*ss&rily 1>€ coter*ainouti with t?ny st^t*i or
^ rn^l puscpoaa snd s p i r i t of thin ra%uirciKitnt| with
cct to the rcecrvo di«triots f iu ^eculi&rl^
in ii^^ign^tin,; thu ree^rv^ c i t i ^ ^ #

I t io cmpeoifrlly tha

conv#niijnca of the people within the d i s t r i c t ^id th&
ftnrj euttomftry couret* of "buvineoo therein which mutt
•»rlly b« controlling in the Helvetian of & reserve city #

or p o l i t i c a l riaai&ons ahauld hwra l i i t l ^ f
, wtight in the naleetion of euch » city #
By the csnius «f 1910 VinneapoXifl h^d a population



F. A* Chamberlain,


i o f 301,408, while S t . Paul was g i w n 214,744.
Twin Citioa, over 516,000*

Mlnn^upolle 60/v, S t 4 Paul 40^#

The Secretary of the Treasury:

In fco far && you era

reviewing f a c t s whidi are* &lre&dy incorporated in thtt printed;
brief that h « *bvvn ouT»nitted h@ret I BUggeat thft»t you
ov®r thoac i^nd wirasply f i l u thoao, bac&usc the tima of
Conmittoe i s

oo limited th&t there i s no necessity f o r

repetition* I f you have nny &cldition&l d&ta which i e not
covered in thi« printed brief, I sutggost that you paa» on
to that #


Our entire fergument in embodied in this

p*par, %nd in order to do our duty <*n<i present i t to you
** we ©ae i t f i t h&«* bfia©n th«d wi»h of the Clearing House
member ship th^t *~

Th^ Secretary of the Tr&atsury;

I juot w&nt to say thit#

Vv h&va, of (ourso, a l l th^t data &bout the population
know I t perfectly«

W& know *b ut ^our rtiilroacl

end your CDnmtsrcc and industry*
succulent faim #

Ha h&v# idl th^t here in

And isAiilc we do not w&nt to out anybody off f

we also do not want to rcpc&t the %«r^c thing t ttcaucfl i t i s
d i f f i c u l t to e&rry t h i s e t a U s t i c a l data i n our hiiad«» But
i f you w i l l addrea« yourstlf more p^rti cMliirly to th*t


P# A# Chuabarlain*


banking relations* and your r e l a t i o n to ot*u?r parts of the
country, wo 4h^uld be obliged,
Ur. Chamberlain;

Anything you # i * j although I &*a s a t i s -

f i e d I C&JI suve your time i f you w i l l tallow me to re&d
The Secretary of the 2rt*aiiur>:
Mr# Chasiborlain;


Vary well, you

lead in population of

over S t . Paul of 86 1 664 in 1910 (and now in *11 probability
conoid«ri*bly greaUr) t e l l e but % email port of th& real

The constantly increasing prueti^e mid precedanco

Df Minneapolis oyer St # Paul ^s the eosameroi&lt manufacture
i n s M*d banking cantr^ of tha T?orthvr@»t i s «o marked and
indisputably provsn by the fact a &nd figures o f uffici«&
records %s to leave no r:oa for doubt or diacusuioru
St # F&ul h&d thu €*dy%nt6a;c of buing the older c i t y &n&
tha c a p i t a l of ihu s t ^ t e f ^hich, In th& days of auaaJLl things f
giiVu i t &n &rti i c i a l losd QTVT Minneapolis, but oam^ncing
with 1G80, ft dscads of raid rivalry m& cot^ipotition s s t tn f
ui the end of which Minn apolio tr&u wall in the I e 4 o f St«
?nul in pr&ctiofclly ^11 thu l i n ^ s of a c t i v i t y in sihich %ham
e i t i t s w*r® %n%BeMt md sverj yuux sino# hm but emp

Inert;fcood t h i s l^&d*
c i t y should ba smltctad ^nlch t by reason of i t s

P# A. Chasiburl&in.


l o c a t i o n , the extent and variety of i t a ouaine»a, the volume
of itebenkin*? capital tai<l surplus, i t a resources in availrilslo dupottito, ua well as i t s «iae and coicnarci^l and
general importance, i e ma at intimately connected with, end
icoet closely touches, the various a c t i v i t i e s of the whole
We wish to ehow the supremacy of Minneapolis as the
location for & regional V»nk over ^ny other point which
would properly serve the district.

Xn reference to i t s "banking capital and surplus

at the present tirei
Minneapolis - Capital









$ 6,750,000.00



as against

Bt. Paul *



$ 9,600,0C0.(

P. A. Chamberlain.

VinrB ftpolis *
3 t . Paul -


$112,244,000.00 - 66# October 21 £83,543,216.00
58.403.000.00 ff

THIRD: Bank c l e a r i n g for 1913 j
$1,312,412,257,00 Bt. Pftttl -

550.516,562.00 «

| t h i s Tr,«keB •* toted clearing for the yefcr 1913 for the two
c l t i o i of ^1,042,927,b!9,00 of which Uinneapolin 1 proportion
«»• 72^ a-'.J St.Paul 2d>'.
Compwr«d wlSb the bank do^ringo of Ulnneapolis f o r
th* y e w 1913 t thuoe of Hew Orleans wur« «


Atl&nt* -


Sa»ttl« -


Denver •


SvoV&ne -


?fct d«>rlng« o f }Iinnt»poli« exceeding ty over $100,000,000
those of - t . P*ul »n-l fie*ttie combined.
Just In wh*t degree the beginning of the crop aovusumt
•onutlly eJTfeoU Hinneepolie «&y be eeen in Table Ko.28

herewith, which ehow» thftt weekly cle»rinR8 roee


p # A* Chamberlain •


from |17 t 766 t O0O # O0 i n August, 1913 t to #57»616 t 000.00 in
October, 1913, &nd in St«

Paul from #9t79OtOO0*0Q in August,

to $12 f 5d3,000,00 in October,

Co&p&rlaona f o r a period of

years ahow th &t tho^e change* *&waya occur at crop moving
time *>r& th&t ?5inneapolia alw&yo carries the load of
providing money wA credit f o r the Northwcat*

I t i e during

thia »e*aon wa norm^OLly hftva the c r e a t e s t domurA for
with which to handle


t h i s great *rgicultural production^

Elevator capacity nearly 40 f 000 t 000*

In i h i e connt^ctlont

we w uld c a l l your %tt$ntion to the feict th^t tba lowest
average weekly clearings of Klnneapolia exceeded toy r^hout
51,000,000,00 th« hi|5iaat average weekly clearings of
St # Paul for the year 1913*
3Unne«poll& b&nk» handlod i n 1913, ^217,909,000.00
worth of groin dr«uft», &nd shipped out fur the purchase of

grain in thu m&y of currency, $34|35Q 9 000 f 00| of which
420,782,000^00 wae ^hippad during th« months of Au^at t
Heptem1>«rf Octoh^r itnd Hovsmbsr*
Tht Sue r t t a r y of the Traararyt

Ch^rt Ho # l #
Vhila you uru dealing


thow figxiroa, Vr» Chaxdbarl 4 n f can ^ou t e l l ua how much
money waa horrowad in Minneapolis, how auch re^discounting
yon did thar« f o r the purpow of handling th^s crop movement

A. Cheaaberlaiiu


Kr. Choaberl i n :


Fr, Secretary, the b«.riko of


I did no ru^dincountin? •


The Secretary <f the Iraanury;
lCr# Chiiaatoerlainj


Kot at a l l f neither did wo bwu any

The Secretary of th& Treasury:

You re-dlaoount, dc ;ou


Secretary o f %h% Treasury:

ITaratofora haw you not

bs*n required to do that?
¥r # Chamberlidii;

"Kof s i r , It its Tery seldom th&t th«

of Minneapolis have done any re-di a counting

I t has bcon

oino*j the leading batifes of Minneipoli* hay# done any
Your ldta t of cour^iif in to get thtt amountj
of credit required in this crop moving p@aflont md I wioh tc
explain irhat I

hara Just et^tud in thin way, thot the graii:

»dn of Indlanapolifii

tha m^n who v\n\ the terminal ttlcYbtora

and i^io own th» l i n t elevators extending O l o v a the norths
* « c t | art T©ry large 1>orr0w«r»| th^y Ijorrow to th«ir limit j
of th» b*n>9 of Minneapolis md Vhm th^ Vfe8t anount mom


i t atcttaary i t l>orrow«d by reason of ^ @lr connectiotis

A. Chtsnberl*ln #


i in the e a s t , t*nd by reason of t h e i r a c l l l n g papers through
The Sfccret&ry of

he ?rea«uxy:

You h&ru no Ides* what

t h a t &raunta t o , have you?
Ur« Ch&mherlain:

I cannot give you, of ccuree t the exact

f i g u r e s , but I should say th t in the huif^ht of thecrop
movement, &t lo&Bt $60,000»000,
The ^acrotary of the Trefctuxy:

Where i s thc*t financed

nootly, in Chlca«r.of or ?.iew York?

?"r# ChtaberladTi;

I t ii^ financed fron ?f^ine to

r Thc? broVera s e l l tMtt pajjer &11 over thu United Staton t
Chic&ro b&n):a fumioh m good 4fcaOL# Bvit the fact that
h&B baen h le&Un<r gr^in market for ©o m&ny
the fifCt t h a t tho ^ a d n psper of t h a t centre 1« so woll

I naiicrt m^kcdlt tru^ th&t thesro 1 n no cl&ftaof

we csill coi^neroi&I p&pcr in the country th%t hm m
higher standing thm thiit of the %rt*ln men of Minneapolis*
The Secretary of tha Tr«s«ur7t


You ^»okci of not using

thorn wis a reearT§ition of crop moving

mada at thu r a ^ u s s t of KinnuapoliB, but >au dia not
to use i t #

A, Ch«abcrl&in,

th&t that reeerr»tion was there, but we thought as lonui as
we cauld gut *long without i t , i t rairrht be ueed for better
purposes where thoy miRht need i t more.
The Secretary of the Treasury:

That i e exactly right,

I but I wwi only "bringing i t out for thi© purpose, tb«»t with
i the Federal Reserve B ^ a holding a sixailar reserve, you
would have the swae con forting situation} I mean the thaory
of the Act i« th&t tho reservation would b« a&de by th&t
ise cms.
Mr. Chaaberl«dn$

I t w&o very comforting indsed.

The .'^cretexy of the Ireaeuryt


You ai6|j' proceed, Mr,

Thura %re 2,978 b&nk« in

Horth rvck]£ot»t South T'Skota, Wontwifc &nd T>&ahington, &nd the
of eccounte c&rricd in the Minneapolis banks during
1913 w*s 3,329.

This exceeds the. nunber of b^nks

in the d i s t r i c t of which we are speaking *nd i s accounted
for by the f a c t of our having Accounts from banks in Wis~
cousin tnd low* snd the further ffcet thatm&ny butkskeep
sore thsn one account in Minneapolis in order to obt&in

nonty *nd credit for crop moving purposes,
fhe tot*l out-of-town checks handled by the bufrs of

A. Chamberlain,


Hint* opolia during 191., was #1,See,274,000,00.
The prooeae of (growth ir. rational bank capital and
surplus af the two c i t i e o fron 1872 to '.he present time
i s strikingly illuiatr&ted hy T*."ble Ko # 2.
In 1G72 the cf.;.)it&l «-n<J eurplue of r. rition&l "b&nkB in
3 t , Paul was two -nH on«-hE»lf tir^so th««t of Minneapolis,

In 1872:



in laaoj
S t . Paul





















P# A, Choa»erl&in.




§ 4,500,000,00



3 t . Paul.

$ 5,102,000.00


$ 5,200,000.00


$ 1.290,000.00


$ 6,490,000,00

In 1900$



!U. Paul

$ 4,000.000.00
697,000.OP -


$ 4,697,000.00


$ 3,600,000.00




$ 4,467,000.00 -

Thin table shows th.*t i t was between 1690 and 1900 that
ITinm apolls paaead S t . Paul in the &rxmnt o f i t s braking
cs^it&l and surplus.

?rorc 1900 on to 1914 the banking

&nd surplus of Minneapolis have increassd so
that at th« prssent tim$» i t i o nearly twice as great
as th&t of S t , Paul.

I t took Minneapolis almost thirty

years to s^«al and pass St, Paul in these respects, (*n& new,
in a period of fourtetn j-carts, i t has becosie in a bs:

% A# Chamberlain*


both as lo c^pltiJL Bnd Burplu**t d^jpouit©, &nrt
&eftrln£*9 the superior of St # Paul in & proportion of
almoat two lo onu#
Ku thine: could poaaifcly preotmt naru graphically th©
almost inavit^blo certainty th^t this lo&a will not only
V ttfcintwined in thy future t l»ut greatly increased*


l . r d 1» not 5rtiricii*l| i t reeulta and could orly result
frmt the gra%ter

oub&tfceitl&l growth of &inne/jg*cli«s in ^

w*yt «ind from thot avaa greater growth of th&t
t e r r i t o r y lyinpr ^aetward to tho Pacific Co&at directly
to and depunclng upon KlnwftpoXlB as i t s
c:» diotritouting Mid blinking centre

in rdmost

l i n t of i t a nbteri^l development #
Banking l^»ourc**m of VinneBot«it Korth und South
Montana m<l Ytthing ton #
As citewing the banking: ru»oure^© of thii 6t%t«« of
Minnesotft, Korth Dakota South B^kotat Vontan» and
the following figures »r# ©i^mificaat*

fl hmn

In ^at»ll Tint will not wonry you ^uttfc t>iemf
totisl e»?it«l am«5 tuxplus of
of thsae 8t*te» i f #171 f6031000

?. A, Chamburl&in.


C&]>it&l of State *n& National Banks In Klrmesota. $ 45,425,000,






• Ko th r*kot&

# 14,015,000
















» ?/ontim&

4 13,591,000.









« Washington









| 30,315,000,



South Dakota



Total e&pltal of the at&toe neciod
Total surplus
Totid of both capital t-nd surplus -


$ 12,644,000






The tut&l deposits of %*m ^tmVa of the st»tos»ted e»ro $a&at666,000,00, with loans of $765,220,000,00
The "business of ih& two c i t i e s , Hinra spoils and St,
Paul, i s un 'uuhtedly well ru floe tod In iht receipts of
their rocpectivo o f f i c e s .

For 1913, the total receipts

of iJinm s p o i l s ' Post Of floe wore $2,150,185,00 i of St. Paul,

The total receipts of "both c i t i e s for that

year were §3,428,782.00.

Expressed in terras of percentage,

apolie furnished sixty-three per cent, of this total,

P. A. Ch&sn><;rl&in4



and St. P&ul thirty-seven per


It .» -Me c mbined effect of a l l theae various


tieo Which point with unerrin - certainty to the const**tly


inere«»eim; 8uprunr>cy of "irineapolie in eve -y js&fcter which
i t i*t fill ncittsri^l or r^lenr^nt U the revjuireisunts o f this*
Currency B i l l #
Within » fe*i taontha «OL1 of Ihv poet office tnifcinsais r»mt
dep^rtntnta ^ i l l be n;ov©d from tho Old Padursa Building


in Minne&relia to the nnw one which le no^ ®to&nt completed
rmd rfe&d,y

for occup%nci'« Thie rtiawTal will leave *t l e a s t

t«.o floora, g.ound &nd aecond, in the old b u i l d i n g unoccupied.

Thu old Pcdoral Building ia * eu"bst&ntiul ont,

i » idotolly locoled in thu very heart of the ijuainaaB
banifln^ centra of Ifinneapolit,


It. ie within an average of

lilock md ^ hftlf froui the leading "balks of our c i t y . I f a
for th»t building
purposa, i s Chftrfc
i s th«
The Sacrat»ry of the Traaturyt
are ld«&l
wi wrguaent
here »a to tho r*l%tive merits of S t . P&ul &nd »inn«t|>oli8
for th« location of % Regional B*«k.

I underetand your

purpose, o f courut, hut the point i » wy mind, »peakinp: for

*t lo&ot, la thlaj

^here w i l l a h«mk, i f one should


F . A. Chant)-rl&ln.

! be l o c f t t d thore, host serve ;*« purpoau of the d i s t r i c t ,
.| not t^« l o c s l purpose of S t . ?»ul or Klnn«q>olle*

How i f

«.»n*: or t>n- other af thees citi&s hue & ouporier «(4ivr.nt»ge
f r

jnarpoctt of uerring th» <:longoted d i s t r i c t «hi4sh
hove cugiTi.'8tcdt th**t wight "be hroufiht out — •

I'r. Ojftabcrl ,in:

r c*n brinr th»t out VBZ^ cle&rly, Hr.

Tho Gurrot»r>- of t^o treasury:

But I eaaura© th^t a

for this district located in either city would

C"h»mburl ain:

Kvur^ pausoenger coiaing fxen North

Xh«t iiticr«t»^>- at th« trcasuiy;

Wo haiYe got that point,

thi»& thcr« i s ft Hfcvin? of ^5 minute a in coming in*
Wr, Chans"burl d n :

??o, thot i s not tht point,

The .ittcrcfterj of the Xreiiaury: Go
*r» ChtcBbtrl&in:

Every pwrntngcr coaini! fross J?orth

to »ithar of tho Twin Citiot on ^?ttly l i n « o f
v a s t pwothrough !!ian#*poli» l>eforc he can got to St # P&ul#
3fh« Secr«t»ry of tho Trtttuxys
ICr» Ctiwaa>8rl%iiil


Y&B, m understand thnt.

That io ahaolutely tha f6Ct t with the

of iwo «tiitlorjft#

Kow when i©u oo»« to thiuV. th*t


zhui i s i;ue of ©very pound of
;m\J cf im.ry car of f r ^ i ^ t ,
tbri for eowYc*nlcnc^#


w& of ersry l e t t e r
wcai to t*0ir*&ii«& the
cms of

pur^oeco of

thia b i l l t ITlnreapolla ha« the
t ia the dif£*r<*nc$ in

of the Treasury;
About 35


I so- undvrstcod*

lUg^t on thitt point, if I &«$*

iixi)ltein to ^c*u ana

n Horth D&ot* 8c?n4# tu feh

ta our

If t h o » drttft* were attat froa *«i' point ia Horth
t>ie affceraatm ^efore t th«jr «oul*ibe in KlnxMshells
the »:>mti3g*

I f they w«r« ca^t to at* Paul th*iy would

in St# Pnul a h^lf ante:,rjLCor no Xat«2*9 TiuV t))«?« in a
l o s t in the a a t t a r of pr»»«ntation of %h&% «so»unt of

If you will rswafttMrf I «ti»ta4 ^o y^u tha aaount


%\ A* Ohmsto&rlzkn*


of the grain d r a f t s handled by vhe Uinm*j>oli8 b*nk* lm%

Secretary of tine Tre&eury;
Vr # Chwaberlfrln:

ff&n you reallssu what & difference


m&>:0» to the r r o i n producing population of thin e n t i r e
The Sooreiuzrj

of th«? Tr^^gurys

ifr # Cha&vberl&in*

B e l i t the ooinfc 1 E t h i s ,

Thoao praotiooft wid oper^tion^ &re not

going to ba I n t ^ r f e r r e d with by the tfat&bllgJaitms of tiaia


r # Ch«8&barl«ins

Bat they would be greatly interforedi

with b j th^ HBt&bliahiait of tMa b*>n3c in St # ?^ul^
The Sucrethry of th© Treasury]

Thte 7«dar6l B e i o r w

1» ISO i n g to axcrcleo & ra-dlecounting

function for the

of J'lnrr:fcpolia «id St # P^ul Kid «*li Wi*» bmkn of


Sow i t i s only yfatm ha bonks in th#ns citit»8

hawing tr«ns*otiou6 with the ^federal
of rcura« f ort not linxlt^d solely tu
bvn othar things thftt





happen «*** but i t i» only with

to thos« op@r%ti^n» tfc*t thurii i s «njy ehmic««
! r r # Chwibarl^inj

t o t me t o l l jou how thtit w i l l wo*5: out f

i f 1 ^ny b t i&law«a,

Th«»e b«n3es9 3300 o? thi*Bt ^ind you,

ih*t Jceep »«eounts in Wiune&poliSi ^by hsvo they


F. A, Chamberlain



these accounts in Minneapolis of late years to a greater extent than in our sister city?

It is simply because of our

facilities In this respect that this lead has been increased
and maintained*

How that has resulted during that 30 years

In the increasing of the acquaintance between the Minneapolis
bankers and these bankers in the northwestern country*
this acquaintance is an invaluable thing in banking.


you going to ask these men that have their personal acquaint- |
anoe with the Minneapolis bankers, where they have been doing
their business for years, where they have oome to get their
re-discounts, and where, in my opinion, they will continue to
| oome—for instance, the small banker sends the paper at the
present time, aooording to the definition that I would consider the correct one as to commercial paper, whioh is not
jthe paper.—
The Secretary of the Treasury: Which is not eligible
paper under this Act?
Mr. Chamberlain: Ho.

How he is going to go to his

friends, to those with, whom he has done business for 3fr years,
to help him out when the crop movement comes.
on for a number of years.

That ie going

I hope and believe that this bill,

at it works out, is going to solve all these problems, but

F. A. Chamberlain



for tho n«jxt few yes re we wljl have the burden of financing
for thset ecuntry bnnke.
tit n i l ,

There la no quoetlcn sbcut that

Tfe have with va *. number of bankers from thle re-

£lra» find I would like, i f you cara to do »o, to hare tht»
t e l l yeu «o tc thlo clrcusatsnoa*
Klr-neopelis has lcn^ f infincod th« Bortbvsftt orcp mcvei^ont.

th« interooto of iin pocpls In pr*ln e level era, l i a

lumber yerdt, briuaohee of ;rod^o<3 time

and In nus&reruis oeu»-

try b^nkt« hare B».d« banking reocrda that nfford iiaiodir.tQ

to th« credit cituf ticn in th« Hortiwaet,

Tho par»en»l Roqusilntsjcis* of the iliimep.polie banker* with
tho bnnkoro of the antlro Hortte»esi onfi tbeir intimate knowlftdgfft of %hn tarrltcry 1 r* wh oh they are operating would be
quite indlopenenble to the Federal effioare in oMrm Q^ the
Rrmareff.ent of & Federal Roeerve Bank in thie territory,
theee enrvloeo «nd fmcllitioo will be readily e^tondod.
I t le the |>e<3ttll*r merit tf thi« b i l l whlob h»e eo
i t to the IntelH^^oa and cfrecisr.oa of the
peopl* that i t i s tc be %h& eepeolf I tanAtntiA of
the loritlmftte irAlustriee of the wiiel* oowtry, be they ag-

i ©eaaeroial or isimufftcturinf.

Theee tpeouUtivo

which are, and ftiw».y» h«v» been ••nentitiUy t.ara-


; 0

F* At Chambarlain


[ anaentlelly p&raaitio&l ere, with rare wisdom, not fostorad

by thla b i l l and ara only reeognlied by I t to be expressly
axeludad frcia eny ef tha benefits of l t c proviaiena*
The Fodaml RanerYC d i a t r i o t e , except poaeibly in minor
p a r t i c u l r r e , *nd tha Faderal Rosorve ©itie* whioh your Com*
r i t t o e w i l l deaigpg^te, w i l l , I n a l l huosn p r o b a b i l i t y remain
j unohangal for rivo* tfinf fifteen or perb^pe twant^-fire

Tha iiaportssjrit and far^raachln^r effect of ycur work

in thone nsfiract0 cannot wall b$ exa^^ratod*


Qh&rpiod wit) t1 e duty of cseotinfj not merely tha r
of the prao&nt but nloo of providinpr for tho probabla r e quiroiaanto cf t^ ^ future*

The deolimetion cf t b i s t o r r i d

tory txm a Federal Re^iirTft d i s t r i c t and of !!irai*&pell« &*
thft reserra city w i l l beat norvo the interent© cf thftt portion of tha antntry and fully n:eet the re^ulrentontt of tfea
Currency Bill*
Th« Seoratary <f tb© Troaauryt

If & Faderal Reaerve B?nk

war© cstubliahed ^t Minnai*poH8 or St#Pnul t imd anothtr on©
s t Chios go# what dlfctrlot Ahouid Dulutli, for inetanea* ba
aoci?rr.ed to?

Mr* Chn»barlalni

To Kinneapoli0 f without quastim*

Saoratary of tha Treanuryt

fhara ie nc cjueetion about


F« A. Chamberlain


that in ths sinds of anybody?
Mr, Chamberlaint

Hot in ay Kind. Wall, n o w —

The Seorotary of the Treasury} Ho« about those people

\ thenoelves, what do they think nbout it?

Mr. Charaberlains

Tho Duluth jsffiliations are hore and can

apeak for themnelves.

But I trill otato this to you, that

every touohol of grain that ftres to Duluth, of all^kinde,
kinds of afxioultural products which go to Duluth—now X do
not want to cuke tlicit too ctrong, but I w i l l any that in icy
opinion the preponderating bulk of that grain i s bought by
ttinne&folie people, i s financed by Uirmenpolle people, goee
thrcuf-Jo. the elevators belcnfrlng to the Kinnettpolis pesple,
Duluth la a gre&t terminal for i t , you understand, but in
covinpr Xh& xrztxi from tha farm to the terminal e leva tor,
Minneapolis does the business, whether i t gees to Kinnsspolia
or jSuluth.
Tha Secretary of the Trtaauryl
Mr* Chaaberlsini

Superior i s a warehouse*

Tha Eeorttary of ths Treasuryi

Would i t naturally go to

or to Mianaepolis or St. Paul?

Mr» Chamberlaint

How about Sup«riort

The saae proposition oooss in there ex-

Mimsapolis does the fii»nolr.g of tlas grain tmtil


F, A. Chmaberlaia


i t cato there, &ad that i s t>e tiae tfc&t i t requires tim

m»n the jp-aln gets to Duluth a»d in put l a ' a

DulutU a l e r t e r —
Tho Secretary cf tho Tro&eurys

that i s the purposa of isy

inquiry, whether they sro\ild be beet ©srvad by being i n that
d i s t r i c t cr in Uiia cr.e, it onei wae created*

Hr# Ckrj&bdrlaint

3Da ray ^udrssumt imdoibtedly

Tba Saor*tary of th« Traosury:

Whiish «h<nil4 dieloont©

crdiiiRry coureea of axoknuge and of buoin«o0 the leaat?
Mr. ChiiKberliiint

Uy cy;inicn i o I'inn*£.pcli6.

fha S^crotftry of Agriculture!

IJhn.t peroent

trade in this d i « t r i o t l e handled directly in
tovi wh&t parce»t&sf in Cliicago# ehoula ycu eayt
Hr. Cha&bsrlitint

I hart not tha exrtOt figuree, font X w i l l

eak» tide ae a bread et&toieent, that a l l tb» Inuelneeo i m t i l
i t $3ta to J^uluth i e finanood at Minneapolis.
Tli« Secretary of the treasuryi

I n&m in this whole t e r -

ritory ymi h&v& l a i d out, what percentage i t bfiji41e4 d l r t o t l y %% XiimftRpftMt wa^ wJjat p«reentji?53 i » OfeieageT
Ir* Chamberlain?

that i e alvtn T«ry f u l l y in Mr»lteRu^i*B

flfsurtt # whieh fea hs.t e^ven you.
She Sacretary of ths Trefceuryt

Th*t t« rsoTSr^ii tv-«ro» I s


* . A* Chaidberlain.



Mr* Chaxribarlains Yes, I t i s corerad fully*
2ha Secretary of tha Treasury:

What reason have you for

thinking that Washington would t>e serr&d well from Minnea*
Mr, Chaabarlaini

The great trans-continental line a, tha

Vorthern pacific, the Or eat northern, tha Xilwaukae
^Extension a l l con« — that in tha Qreat Horthara and tha
Northern Paoific ooma diraotly throush Waahtngton, and tha
Hllw&ukee runs to Baattla and of ooursa tha l%n« runs right
froa tha Pacific to tha Lakas*
She Saoratary of Agricultural

That i s trua 9 "but to what

aactont does i t "bring tha products and oomaroa of that state
to Xinneapoll*, and to what extent —
>Xr. Oh«a(b«rl&int

The antira products of Washington are

aithar from tha soil in tha way of agriculture or from tha
forests in tha way of lua&ar*
Tha Secretary of Agriculturei
Mr. Chamberlain:


The prairies 'between Washington and the

lakes are the Markets for t h i s entire product of lumbarj
rery l i t t l e of i t goes anywhere else*

Sat Secretary of Agriculture I Do you know that i t i s

»• A* Chariberlaln


! handled at Minneapolis*
Kr. ttuarfborlains She luaber products?
2he Seoretary of Agriculture*

Any of it*

The Secretary of the Tre&nury: x» the bulk of that
business financed or handled at Chioago or Minneapolis or

Mr* Chasfeerlains

So far <%s X know, X do not know of any.

of i t feeing handled in Chicago.

She Seoretary of Agriculture:

Do you know of i t s being

handled at Minneapolis?
Mr* Cluwbjriain:

X know Kinxtsapolis i e the centre for

the entire lmtoer distributing "business of the northwest,
what X awan i s the line lusfcer nan*
She Secretary of the Treasury*

So what extent do the

Seuttle bunko keep their reserves in Minneapolis and Bt.

Mr* ChaafeerlainJ

X think Mr* Cfcapaan made a guess at

that yesterday, and that i s a l l X oould do* The Seattle
banks a l l keep accounts in Minneapolis*
The Seoretary of the treasury!

Sow you can collect those

figures Tery easily*
Mr* Churtberlaint

¥« would be glad to do it*


* t A. Ch«Bfc*rlain




Xht Bftcr»tary of the Iroaeuryj
j If

And we would "bo Tory glad

you would analyse that and t e l l us how much i t kept i n

Minneapolis and S t . Paul and how much in Chicago and how
nuoh i n H«w York.

, ChuBLberlnint

I would \>% very glad to do that for you.

* . A. Chwaberlato

The Secretary of the treasury!


X would like to ask you

one mere question, Kr, Chamberlain*
Oonsi daring the fact that under thio b i l l , when i t goes
f u l l y into effect there will be a parring of exchanges "between these 7ed«rsl Reserve Banks, how far do you think that !
i s going to reduce the necessity for banks within the dis* ;

t r i o t s keeping accounts in present reserve centers, oontinu- >
ing to keep accounts — X don't mean reserve accounts, but


I 1 mean exchange acoounts/ ALL exchange* passing at par be*
tween these banks, will there be any neoessity for that?
Ur. Ohasiberlaini


l*or lnstance 9 i f a hank in Horth Dakota ;

at 7argov say9 i t now carries! of oourse9 an account in Hew I
Tortcf and a large account in Chicago, and the rest of i t s
business i s done in fit* Paul and Minneapolis.

Zf X under*

stand your question, there i s a possibility that i f they
should belong to a rescrrs city in Minneapolis, that they
could cheek on the Re serve Bank, and that that check would
be good in Hew Toifc or S«o Francisco er »«w Orleans. Of
course, i f that was absolutely the ease, there would be no
occasion for an account anywhere else that X see.
The Secretary of the Treasuryt
to bring tmt#

That i s the point I want

7* A. Chamberlain

Mr. Chamberlains


the whole matter would then amount to

t h i s , that of course, ^ow York has always got to be t in my


opinion, tho mala rooerroir for tho final payment of th« pro- I
f;ducts of agriculture, and nil that.
The Beeretary of the Treasury:

That would then be a mat*

tor of clearances?
Mr. Chamberlains

I t would bo a matter of expreaat ngthe

monuy, that would be about all* Vhotter that i s 4ono "by
tho Gor«*mentf or the Qorernaant sends the mon^y to How
York, where i t has got to bo usod, or dono by tho aocumulation of money l a that oontor, a s haa horotoforo boon tho
case, would bt a matter —
d o S*er«tary of tho Treasury:

I t would bo a question of

the settlement of balanoos t that i s all*
XT. Chamberlain! Tes, s i r .
tho Secretary of tho Sroasuryt

Zhat i s about what i t would

oom« do«n %9$ wouldn't i t t
ttr. Chsmborlainl

Y«st s i r t although i f you will pormit *•

to stato my opinion of that, I cannot understand — i t has
boon * matter to which Z hare given considerable though, and
% cannot cos hew i t i s possible to slier tho flow of monoy
to those great eastern centers.

P. A, Chamberlain


I t i s Jurt as inevitable that the money from these crops
shall accumulate where i t i s needed to pay for the goods,
which art rtturned for i t , as It i s for the credits tlwmselTei
to go to these markets*


The Secretary of the Treasury* This b i l l doss not seek to
interfere with the fundamental flow of anything. It only
seeks to provide superior sieans of regulating wa& controlling
that flow, also for facilitating thoso transactions*
XT* Chianbirlain: Xr* Sooret&ry, the banks of Minneapolis
rr«ry ono of thos aignifiad their intention of going into this system*
The secretary of Agricultures

She national banks?

Mr* Chranlxtrlaini She national banks* Th«y did i t rery
She Seeretary of the Treasury; I recall your telegram*
Mr. Chofeerlaiai

Shey. did i t whhle-heartedly, and with the

idea that they are eoing to do everything in their power to
make this system a suooeeo, and we earnestly hope that our
fondest wishes will b» realised. Ye are going to do *rvry~
thing that wo osa to help It along*
She Secretary of the treasury*
country h&vt ihowt that spirit.

The bankers throughout the

* . A. Chaaoerlain*

The aeoretary of Agriculture*


Mr. Chaafcarlaint i f a fcank

were not established in Minneapolis, what would "bo your see*
ond choice?
She Secretary of the TreasuryJ
Mr* Ghasibarlalni

St. Paul?

Zhere oould only fee one second choice,

and I wish to show you why even that i s not possible*
You yesterday asked that Mr. Chapman — X think i t was fir.
Chapman — to prepare a map showing the area in the country
that would fee required i f Minnesota, north and South Dakota
and Kontana wore addod to the Chicago regional feank — this
•eation were added to Chicago*
Ohio ago9 allowing for their inner circle that they talk
afeout, Wisconsin* Jfichigan, Ohio, Indiana, I l l i n o i s and Iowa,
these states that X haTe named hare an area of 306,000 sojuar*
Miles, with & population of 20,000,000,

3hey hare a hanking

eapital of ^S72,000,000 and tank deposits of |l,270,000,000.
These are national hanks.

In other words, in percentage that

central area would fee S3 per cent of the population of the
country in that central area} I t would "be Id per cent of the
tanking capital, the national banking capital, and 21 per
cent of the entire task deposits of the United States*

low, i f you include this larger area which we are hoping

*• A, Chamberlain

to haY* as our district, you would hare thess figures.



would h«?e an area that would include Montana, wyoalng,
Horth Dakota, South -j^akota, and Minneapolis — you would
h&Ye an area of over one Billion square nil«s of torritory^
a population of

2a,000,000, a "banking oapital of |&o59000,00(>

I and bank deposite of $1,7^,000,000.
Xho S«crctary of J^rioulturoi
n«a«8Sary altornatiYt*

X%»$ hut, that i s not the

Boa«thin5 aiighi te excluded from

that di at riot.
Vr* Chmoerlaint

You could not «xolud« i t i f you did not

haY* i t at Minneapolis*
The Saoret&ry of Agrieulturet

You could »xolude something

here (indicating on nap).
The Secretary of the Treasury: You could exclude Ohio, for
inotsaoe, and Indiana, and a large part of the State of I l l i n o i s , i f such a district as that wars orsatsd.
The Secretary of Agricultural
siderattfc of that d i s t r i c t .

V* are not bound to the con-

All X want to know i s what

would os your second choice, in a case a fcaak wsre not located there.

i « are net bound by these figures, they do not

signify anything.

Mr. Ounsberlsini

?• A. Chamberlain


The S«cretury of the Treasury: Hor by that suggested diatrict.
Secretary Houston*s question it§, assuming a resenre 1>ank
wero not establishad for this northwestern district at ittnneapolis, what would be your second choice for auoh a bank,
what city?
Hr» Chiaborlains

i"hat i s a r*ry difficult question for me

to answer* You are getting right back to the central "bank1*!



Thio would be a central bank then.

Sho s«oretary of the Treasuryt
we wiH


if you cannot answer i t ,

you t Ur* Chrunborlain. Shank you.
Off J . Z, PHJ.KSA,

Kr. Phelaat

Kfir n««e i s J. X. Phelan, I am President of

t&e ? i r i t Hational Bank of Bowaan, Horta Dakota,
The secretary of the Sfreasuryt Mr* Ehelant i f you can add
aoaething new to what we have already drawn out here, we
should be glad to hare i t .
Kr/ Phelani

Kr. Secretary, I am not going to make a speech,

because I could not i f I wanted to, but wh« X get orer being waredto death X »«ar *e aW« to say something.

She Secretary of ths Ireasuryt

X hope you don't mean that

3* S. Phelan.


the secretary here looks savage*
Mr. Phelan: Mr, Secretary, X look upon hia to he my
friend, heoause I hare eat here all day yesterday and so far
today, and X have listened to the tale of the millionaire,
t>i£S<*r business, commerce, and there has sot been & word
about humanity nor the people*
How, X lire 950 miles wast of Chicago, and 550 miles west
of Xinneapoli s, in an extreme and the newest part, little
developed, of southwestern North Dakota, I live from choice

in town not ov=r six years old, and with less than one
thousand inhabitants*

X have lived l a the northwest for

54 years, and X have been on the frontier most of the time,
that i s , X have been out in aotive l i f e , and spend most of
my time outdoors*
How, the thought has been striking me in this confusion
of figures and s t a t i s t i c s that you are losing sight of the
huaan element* X contend everything i o considered, what
has "been and is,but X Relieve, gentlemen, i t i s your duty
to consider what i s to he*
In our part of the country, nobody who has not traveled
that country by teem or auto or railroad can conceive of
the magnitude of i t and what has been done there in the

J. 2 , Fhelan ,


| l a s t thirty-fiTe years, and I am especially desirous, and I
I belieye I represent — I m & maab«r of the fforth Dakota

B&akers1 Association,, and I would not say anything that X
belieyed or thought our people would not approvo of, but the
• thought in our part of the country i s that a regional bank
johould 1>« located in the Twin Cities.


The secretary of Agricultures

1 Mr. PhclMii

which one?

7r«f*ra1)ly Ittnnoapolia.

Ihm i t como»to

Chicago, and th« eplandid mtn that aro in churga of tho
banking oy»t«B of CMcago, they ara uiinply eplondid, and
that l a a l l you eaa say about i t .
oua work for tho northwest.

They hare done a aanr*l-

You can say th» son* thing

about St. Paul, and thi bankers there9 the sane thing of
How, the Minneapolis bankers or the Bt. Paul bankers, with
two or three exceptions are not Billionaires, they are not
ioh sen*

They are sen sue* as you people here, earring the

eoplo l a your oapaoity, beoause you oannot help i t .


annot t e l l what leads you on thoroj you oannot t e l l what
Leads »• <m to stay ia ta« country.

I t i s part of wy l i f « .

belleire l a i t .
then 11 oflaws to the jeagnitude of our country, X would

7 # 2 , Phelan


i like to iaprees on you the f ct th&t in our state — and I
] will say before going any further, there in no doubt in ay
aind about the intelligence buck of this new banking
and there i s no doubt in ny aind about i t s suooess.

It a l l

depend* upon the nttn thrtt you aoleot to run those banke,
and to bo suootaaful you hare got to haT« man in touch with
] th« peopl«, who hayo got level-headed Judgment, who know
th« country, know the riaki they arc taking t and know tht
orediti in that country, and hano« who coaa in ptroonal oont ct with i t .
And th» sraattst n«o«itity that will co»s, and why there
should b* a r o s i e s t bank in th« northw»«t, from that vast
•xpanM of tarritory th«r« t and 1 aiding men who know that
rthioa and can »«!?• i t —
8*cr«tary of Agrittulturot

Xr. Ph«laat you r«ffloab«r

th» m«ab«r banks tha»»«lT»» a«lect six of tho dirtoto n of thi» bank, thty do not oom« from any on* locality.
KT. ?h«lanl

Z ahould M^ than for that rta»on that the

looatisn of » bask ia the northwest should be so fixed in
rter that they could do their seleetia* and get the best
*ea in ths oountry ts serf e i t .
She Secretary of the treasury* Xr# Wiolan,, you are sat


2 , Phalan


that * regional bank at Kinna&poliB or St #
would peat aarve the interests of your di»trict, or that
part of the distract?
Ur. Phalanx

Thore l a no doubt of i t .

The Secret* ry of tho Treasury*

I s the view of everybody

with who* you hara come in contact the ucuuo on thia point,
or i a thara any aubatantial differenoa of opinion aoout i t
up thorat
Ur» Phalant

V«U t thoro are paoullar condition a up thora.

for Jnatance, thara i a on* genius in our northwest* who
poraonally nanagoa hi 8 property, nnd I know that from haTing l>a«n on tha R&ilroad CoKaiaslon four year a, and in the
moot t r i v i a l natter that would coma vp regard Mr. Hill 1 a
ty*%m.9 i t could nevar be paaaod on without hi a taldng
poroonal oogni«anoa of i t and approving or disapproving.
That ff«niue haa accuaulatod or developed a property in vy
time ainoe X waa a young man 34 or 3S years ago, capable of
being capitalised at «ix hundred nilliona of dollara.
How, that i i only * part of tha property of that country,
that has bean developed inside i f a generation*
the future that I want to i»pre»a on you,
only this vast



i s not

territory that I an faniliar

I , X, PheXan


with mid hare gone or or a number of tiass, to the west of
the Twin Cities, "but the idea of that vast Canadian terri|




You «re making commerce, and you people in t h i s adminis*



J tr&tion

ar« rearing tha reolstance fr<w corameroe in that

I diistriot*

You ara goi»S to 8^c<^ i t poaaibla for i t to flow


j 'voroat th« l i n « .

You co up into that district, eyen at Man-

i t >a, tnd i t aurprlBOB a gre&t many poople that there are

or eight parallel lines of railroad running east and

west in that territory.

They turn 25 oft 30 miles apart, and

they are built with intelligence•

Only in the last three

or four years hare they gone craay up in Manitoba in the
matter of dereloping and getting beyond their limit, and
ahead of the times.
When X vas up there two years ago X read in tome inmigratioa literature, and i t i s correct, th&t you tato a compass
and put one point on the American boundary and the other to
the northern limit of the wheat producing aroa andswing
i t around, *nd i t i l U coma to Tmapa, Florida,
lh»n I t comes to the p o s s i b i l i t i e s of commerce, there i»
©•er one huadredailliona, an* I *°*n J010* h o w
Merio«n capital in that Canadian country*




!That has got to

3P. 2 . Tholan


came back, and there i s & l o t no re going to go there before
that can come back.

Th*t country has got to "be served*

You GO up to Winnipeg, and when you go in the Chamber of
Connoroe you don't know w lather you ar«t in Hinnaapolia or
Winnipeg. flow and than you come in contact with a typical
S n g l i t a a n , and that la the main reason in ay mind that Z
want to impress upon you the importance of t h i s thing.
?&k* i t back early

35 years ago, whm they were commencing

to develop at St. paul, they leveled hi 11B, and that was before they got the hydraulics

system of leveling h i l l s .


took out h i l l s that were HS high as the third story of buildings, in order to develop — X wasftwanty->twoyears old then
— and going to Minneapolis you oan see that development
there was along the point of least resistance.
the secretary *t tht treasuryi

Your argument i s , Kr, She-

Ian, that we ought to take into consideration the posaibili t y of the future growth of t h i s section, and not "be controlled V the preaant element*
Kr. Wwlans

Xfcat i s rlgat.

there i s anotaar point in

thai has *••» and I s should not fe« di*turt>adt should

not %% saorlflfttd, Imt i t should T>e served and protected,
•ad y t t m* should h*rs ins possll>Uity of what must be in

3* Phelan*


our country provided for.
The Secretary of the Treasury: Zxaotly, that i s what we
arc goin& to try to do.
Hr. PhaliuiS

Another thing, the people that we deal with

i s th« country, we l i r e with these people, we know what they
want, and we know at times that thsre haft been drastic liquidation that ought not to be, and the remedy i s Tory simple*
2v«ry tondoncy of th« currency law and th« present l«gielation now i s to rtliore thoso people.

I t i s a natural thing,

going b«*ak to on* of the big citioe, "but the "big c i t i e s , ths
are good places to v i s i t , 1>ut people that want to live, they
ought to go to the country and they ought to stay there,
«h» secretary of tha Sreasuryi

w* are Tery much obliged,

Mr. Tfeelan.
Hr, Tialcet

Mr. secretary, X would lifceto

file four more

copies of our brief*

XT* Tiafcei

My Bane i t Douglas A. Walte; X reside at Minn-

eapolis sad a s President of the Minneapolis Civic Congress


I m going to >• brief and take * very few
t represent three thousand citiaena of Hiaa-

X H«?« yo» * t t t !•* «•




*° t t

a>)Out n T t


Douglas A. riske.



minutes at the longest*
What I hav* got to say may not add anything to what has
ba»m collated and ttm&ssed in this "book, "but with a l l the mass
of testimony you are taking, and a l l the figure a that are
1)0ing presented, we feel that there aro certain features and

that should be brought

«n masse at this timot la a very

few wards.
The Secretary of the Treasury I Mr. tfiakt, will you kindly
address yourself

Tory briefly to those points.

Ve have given

Minneapolis so such time, we must give 8t. paul a chance*
The Secretary of Agriculture!
The secretary of the Treasury:

Just giye new facts.
Unless you have nor facts,

i t w i l l not be neotssary to go into any of these old ones,
Chambwrlaini Mr. 8«oretary, I Just receive* a t e l e that answer* your last question* (Reading)*
*UT« P. A. Chawbarlain,
Congress Hotel, Chicago*
At 01 earing House meeting today you, Jaffray and Chapman
were f u l l y authorised to represent our Assooi«tlott in suoh
nsaner aj your Judgment dictates,

the unanimous feeling of

the ambers of the Association being that a Federal Reserve
Btak be looaUdhore. *thirwi«# l a Chicago*"


Dojiglai A. flake.

B*orotary of tho Troasuryi



Hr. Pinko: Th«ro i s ono point that you brought out yes-


| t«rdr»y, Kr. Saorotary, about this b«ing entirely
| district.

a ©no-orop

Tho census of 1910 — that i s Kinnoapolls an*

St. Paul•
Tho soorrtary of Agricultural

I merely *u&«d the quostion.

| X understood i t was cororod in that book.

XT. Tiskss

X just siMply want to stale* tho statement, i f I

aay bo allowtd, that tho Xinntapolis-St. ?aul industrial

was tho twelfth oent*r of tho ontira United States

aooording to that oonsus, with an annual output in value of
n*arly two hundred and f i f t y Millions of dollars, which
would ostablish ia your Minds tho fact that wo aro ono of tho
Gr«at ladustrlal canttrs up thare ia this <wtlr« country.
tho only reason that any faots havo te*n %uot#d as to tho
comparison botwooa tho two o i t l o s , i s ia ordor to assist
you g«nU«aon i a dotsminina ths plaoo whoro tho roglonal
bank should bo located, providod a rogionaX bank bo glron to
ths northwest.
V* thought that was a porfoetly proper thing to do.
Wo aays % Yory friondly fooling towards St. Paul and th«y

hart towards us.

Douglas A. Wake.

The Secretary of the Treasury:


wa do not misunderstand

Mr. Flakes

i f you &r« goins to locate a regional bank i a

the northwest and i t i s tat wo on Minneapolis and St. Paul,
whom are you going to locate that bank? It has seemed to
us according to tht text of the law, and the principles you

aaaouaoed at a l l these hearings, that theae things

should be taken into consideration i f there are two placesj
51 rat, Minneapolis i s a metropolis} Second, mnneapolls i s
a flaanoiA center, because her bank clearings are 72 per
cent of the t o t a l and her deposits are $101,000,000, as
against $52,000,000 and h«r banking capital i s $20,000,000,
as against •11,000,000.
The secretary of tht Treasury! v« hare a l l of that, Xr»
71 eke. You need not give us these old things that we hare
already had*
Xr# Wekei

I m si*ply wiyiag that these facts, i t i s a

metropolis, i t i s * financial center, i t i s a grain trade
center, i t 1 • a manufacturing neater —
Sh* secretary of ttot treasury*

Don't you think that that

has been impress** upon us sufficiently*

we hare had i t

frost other witnesses, and wo are thoroughly oognisantnov

Douglas A.


of t h s f a c t s , and whils I do not want to out you off,



would bo a wasts o f tins in going further into ths Bam»

*a ha?<s not ths t i n s .

Tho limited tima at our d i s -

posal does not permit i t *
Tho Seorttary of Agriculture*

W« ara accustomed to i n t e r -

p r e t those things 9 Mr. ffiake.
Mr. Tlsksl

I did not wish to encroach upon the ti»«, hut

there was ths fact that we wars supreme —>
Tha 8»or«tary of t h s Trsasurys

Z know, ** have that,

Xr» Tiakts—In a l l thoss partioular l i n e s .
X do not wish to iapo>s upon you at a l l , but as representing a larg« constituency, X thought i t would not l)s unfair
to take f i r e ainutes of your t i n s *
Ths Sserstary of t h s Trt&surys

Don't sdsundsrstand us*

Thsss f a c t s hay* bsen ipprssssd upon us Tory thoroughly
and s f f s o t l T s l y

by a numbar of sl«|^«at gantlsaon htrs, and

I think I t w i l l be giT«n dus weight.

W« shall go through

|your data and s t a t i s t i c s hsrs with grsat oars, and see
t h a t Minneapolis has erery posslbls f a i r consideration.
Kr # Tisksi

)«y X suggest, Kr* Ssorstary, that ths saao

reason• that h*rs smds t h i s condiUon a faot as to Miancapols , would be controlling rsasons for looating a bank at Minn

I>ouglas A» ?iske t


oapoliu ao as not to interfere with the natural How mid
trend of Business,
The Secretary of the Treasury; fe understand that, that
1ft your argument*
Mr. Plakei

That l a the argument.

Tho Secretary of the Treasury* Yen. Now, Kr. Bassstt,
Does Ur. Baesett want to ho
Kr. Baasttts

To»t sir.
o? J . c« BASSET.

Tho 8°oratory of tho Treauury: You are from South Dakota?

The 8i«r«tary of the Treasury: Please give your name,
residence) and ocoupationt
I Itr, 7 as4ettt

JJB* ^aeuett, Pr«»id«jt of the <Afcerdeea

•national 9aflik# Aberdeen, South l>akota.
X do not eare to burden you particularly with a lot of
U a t i s t i o s , tmt early i^iea thi*»atter e#»e up relatlT« to a
Regional bank, tha olnaring houao at Afeard«#n, oonslsting of
fix banks, held a swetlag

to take opinions relatire to the

location of a regional bank,
t o r your information X want to state thst Aberdeen i s 290

A* Bassctt


a i l e s *•** of Minn a t o l l s and 700 mil** weat ©f Chicago,
Ihft S»cr«tary of th« treasury*
Mr Bassattt

On what road i s i t ?

On Uie main l i n e of th§ Chicago, Milwaukee*

Puget Sound Road* Vt hare endoaTorod at that point to t\dld
up a mail country »is« l>anking center within the territory
of th» ?win Cltiot.

At that point w« oorar in a way th»

banking acooUnta and th« gftn^rnl tanking buslnavs froa the
Sflnneaot* lin» to praotically th« Montana lino, and a strip
of territory praotloally one hundred mild a wid« ox tending
about f i f t y Mll*a into th» aoutharn line of Korth Datota.
Ztt* S*«r«tary of th« trmantryt

Qiv* us the raAids of thi*

Mr. BatMttt

About ^5,000 aquar* MIXOS*

Sao Saorotwy of tho Troamuryt How, your contention i s
that Ab«rd««n, and a l l of that tiootion of South Pakota should
*tUoh*d t a abank at Xinnoapollst

fas 8«or«taiy of tlw trsasuryt

Or 6t» ?»ul, as tno ease

Itr. 3ia«sottl

m f s n f c l y &t !linn«apolis # 1»«eausa tha Uulk

of our tiusinsss i i dons with Kinnoapolis, or at th# Twin
Oiti*s, at l**st»

f WB


! • 0. Bassett

seerotary of tho frmturyi


would you say that tho

j bulk of that territory, north of th« 45th dogr*«, or par] a l l e l of latitud* should b« attaohad to tho Minneapolis dist r i c t , or tho nlanoapolis*8t, Paul district, i f & bank
•hould b« tstahllshtd there*
Mr. 3)aas«tts

Ihero do you auian?

fho 8oor«tary of tho Troasuryt

lust look at thl & nap,

X«ro l o tho 45th parallol, tho Una just south of Aberdeen,
which i s tho southtra Xiao of tho stato of Kontaaa. Would
you say t h i s rogloa

through thor« ou^it to cont iato Bt.

Paul or ldaaaapolist
Mr* Bassottt

Xhat region la th*ro9

.containing at loast

about two thirds of tht stato*
tho g«erotai»7 of tho troasurys
Kr JUksottt

Two thirds of tho statof

xos sir} at tho sawo tiae l a tho southom

purt of tho stato thoro i s a good d«al of busiaoss that
got* to MtaaoapsUs*

As was indicated to you, I think, yos-

t*rday t V Xr« KoHutfi, of 81 ou* Cl1y, a good doal of that
o a t U o buaiatss go«s down iato Sioux City,

aad indirectly

i a t o ChioaffO, but I t l i our dosiro through that oouatryt
and X bolioro X «aa #oak adTistdly, bsoauso Xfca?o1>»oa l a
th« country M yoirs l a tho Itaaklag busiaoss, and m

1* 0. Sassett


od practically with eTtry banker through that territory* and
I know from conrtraations with a largo majority of men that
they art strongly in faror of tht Twin Citios, particularly
Minneapolis, on account of their general buaintss, tht larger shars of i t "being don» thore.
About sixty per oent of our buslntss 30 dont in Minneapoli s , as Against ths rost of tht country.
Tht Saorstary of Agriculture: About what percentage?
Ur, Passet11

About sixty por osnt of our ^usissss cover-

ing that strip of country, That i s an agricultural country a« you know, soatwhat angaged in the stock business^
but a country which i s yery rioh and going to inorease.
The SeoreWyof th« Trsasuryl that would bo your stoond
ohoio* for % bankt
XT* nasMttt

Outside of tht Twin Cities?

ths Sterstary of tht Treasury: Yes*
We* BasMtts

Chioago, naturally, *h«rt i s ont thing wt

want t t f»Uowt i s tht trsnd of tht lint «f amerce and
tht line of railroad traokt. fhtrt w»t a propositita by
•onebody sosu t i a t ae*i when tht currency matter was first
argued that •oartd t» to Asath# btcaust thty %M u# wt wtrt
liable to be in the »ta?tr diotriet. that would bt »tarting

C. Basavtt


, and vt would nev«r got anywhere*

fh«r# i s on* oth«r point I want to call to your att«n»

, tlon,th&t I b*U«T* th« stat* bank*, the larger fltat*
bonks, would b* Much more apt to Join tha A«»ooifttloa it
• tht rwglonnl bank 1« In th« north««st rather than In Chicago. o£ OOVDTM, at th« preo&nt tl»« our laws do not admit,

and I think that <pn«rally th« laws of othur states do not
I adsit 9t it at* banlci carrying stook In a ^«d«ral Bank, but
| X pr«MM, and t h&rdn't any doubt — I know in our stat*

| that will b# arrani{«d for at th« first stsslon of th« legi©*
latttr* and X m*mm» that i s true generally, and X think that
i th« l a m r statt banks would b« Much »ona apt to join i f i t


[ wart in th» avrthvtst whar« I t I s tasilt r«aehed, and whsrs
thsy art sOrsadr ia touoh with tho eannral buslntss situs*
X do not oar« to burden you wita statlstios*
fhs Ssorstary «f tbs trsasmryt

Thank you. Kow, *s

[ asar frasi 9%. Psja» Kr. itiiolwU, X b i l i w s i« th»




John a, Mitchell

your naoe, residence and occupation?
Mr, Uitohellx

John R. Mitchell; President Capital 28*-

ticnal Bank, 3t. Paul.
The Secretary of Agricultures Mr. Hitohell, have you a
nap of the district?

lir. latohellt

Yeo, air; Mr. secretary. I want to say,


• Mr. Secretary, that X represent the St. Paul Clearing House


I Aauociation, and we havo filed our application for the 1»~

cation of s regional rseenre bank in St. Foul, for the reaoon. that we bell ere that i t le absolutely necessary, in
locating the eight regional reserve banks to cole a separate 11 * trio t out of the northneotern states*

Store tar y of Agrioulture:

Have you & nap showing the

di at riot you hare in aind a» tributary to St. Paul?
Mr, iXitohells

Ye would inoludft in that diatriot lUimem*

ta # forth and South Dakota, Montana, Idaho and northern
Tlio Secretary of Agricultures
Mr* f£itgfe«lli

Tou leave out Washingtot

Ve would leave out Washington and Oregon

itndor oat eoasldsTfttldzu

In our f i r s t consideration we

woul-j loava out WaaMnggoii and Oregon*
The Secretary of Agriculture:

You would include a l l at


John R, Mitchell

l£r. zatohellj

I would induce all of Idaho,

The Secretary of Agriculture:

How about ^youiing; would

you include thatt
Mr* Uitohallt

Ho, we did not include Ifyoaing.

Tha Secretary of Agricultures

Tour territory la differ-

ent from that auggeeted by Kiimeapolie?
Ur. Mitchellt

Poeaibly i t la a l i t t l e different• X be-

l i e v e JUnr.eapolis included Washington and Oregon.
The 8ecrotary of Acrioulturet

Ho, Wa&hington and the

northern part of Idaho*
Mr* Hitch all i

A great deal of ^-ohingt on1 B bualneae ootsea

to ui # that la true, a great deal of lusher buainasa ootseji
to ua*
The Secretary of Agriculture;

X juet wanted to get the

diatriet in cy sdnd*
Ur, mtohalls We would include northern WLeoonaln for the
reason tha.t i t ia tributary to the Twin Cltiee,
I©wf we 1» eliere that i t ia abaelutely neeeaaary, and that
your Honorably body wUl fi»d i t i a , in eateMiehing the®
eight diatricte, to place one in the Twin Oltiea.
the reaaon that we naie application.

That l a


John R. Mitchell


We believo that & bank located In St. Paul will serve the
diatriot Juat as wall aa e bank l o c a t e in our slater city,
Minneapolis, whioh we addt i s larger, in a way, and the
argux&enta which have been Bade hero for the location of a
bank in that district by the Minneapolis gentlemen, apply
Juat ao tiaich for tho liioation of a bank in St.Paul aa the
argument* do for the llcation of a bank in Minneapolis.
There oan be no question about that.
The Secretary of Agriculture:
Kr. Hi t oh e l l t

Thcro seems to bo.

There la no question about i t from ay point

of Tiew, and I don't Relieve there could possibly be from
the Uinneapolle point of view.
The Secretary of Agricultures

Well, you do not care to

add anything to the volume of faota about the trade, con>mcroe end proluctlon?
Ur. kitohellj

They are the sa»e* arentt theyt

Practically the same.

The Secretary of Agrlo^ltires
Mr. l a t c h e l l j

In general.

In general,

Tho Secretary of Agriculture*

In caeo A bank were tetabf

l i a h e i i n one or tho ether of thooo oitiea, what i s there
that would teaks St.Pta* a bettor |>lact than Minno&poliet

Mr# HI tot e l l t

In adlitien to the big erain buaincoa thai

f D

JoHn B. Mitchell


1« tributary to St. Paul, as wtll as to Minneapolis, wo have
a very largo livestock industry, tihich we desire to callyour
attention to, about which I shall not so into details, a*
the gentlensan following ua will give you



and sosift fieuros on that.
That l a in i t s Infancy ao yet, but we r«gwet that as a vorj
rory Important factor in dotoraininc tho 11 cat ion of this
Tho Secrstary of Aerieulturet

Which oity to-day in your

Judgment hanllts ths larger volume of business trade in that
Kr. UitchaUi

St.Paul i e unquestionably the jobbing

center of the northwest.

The Toliuas of grain business i s

handlel in Minneapolis.
The Secretary of .Agrloulturei

To whioh &9*u the course of

trale banking tranaaotions tend a*re largely, lanneapollt
or St. Fault
I2r* mtohellt

iiirmeapolls has larger deposits*

It i t

true, then St. Paul.
The Seoretary of Agriculturei

Would i t create *ore of a

disturbance of the »or*al course to throw i t to St. Paul or
leave i t in Mi«aeaj>©U*t

John B. Uitoholl


llr. Hitch til: x oawnot BOO as it would &&X9 any particu- j

Xar dlf £erenoe«

1 corjr.ot see that i t would disturb buaineaj

ccnnoction* in any way.
The Sac rotary or th« Troasuryt

He scatter in which city

you i-ut i t ?
Lr. Uitchsll:

Ho tat tar i n which oity you put i t . I

&o a i i t i l a bit further —
Tho Stcretary of Acrioulture: Would you otato your roaacrva for that?
Mr. Uitcheilt

For tho reason that tbo imil aenrioe id pr&jo-

tically — tho ftaco acrrioo io Given St.P^ul aa i s civon
lanrsA^olio, and th« faot that i t i s the eace ao to inter*
tst ;.*ytonti on balanoea and collecUono, practically the
The Secretary of th« Tre&auryi

la there just on* o

hcuao in both cities?
Mr* Uitohtllt

8o t wo have tno clearing houoea, oat oltsu>

ing hcuao i n St. PftuI and ont cloarirg houao in Uinnoftpolit.
The Swrotory of the Troasuryt

Z mosa to say# tha Twin

City oltaring Souatd b&ro the «a&« ruleo?


Kr« latch ell» Z think practically the aaise rules.


John a, Mitchell


The Secretary of the Treaeuryj So It ie praotioally one
in a&dnietratien, in that way?
Mr* ISitehell! We art practically one large city.
The 8eoretary of Agricultural fh&t ia the differenoe
between the limit* of the two cities?
; Kr# Ultohellt

Ton silea froa centre to centre*

I The S do rotary of Agricultural How aaioh from centre to
| suburbet

Ur. latchallt

We j\acp —

The Seoretary of the Treaeuryt There ie a diTiding line
between tfeemt
Ur. Mitehellj

Only an imaginary line*

The Secretary ef Agricultural

Ie there any other item

you doelre te inphaaistt
Hr* MiteheUt

There ie no ether item I deeire to eaU"

yowr attention to, fcentletaen, excepting that I want te ©all
your epeeial attention te our large lire etock induetry
waioh Mr, ffhneler, who wiU follow m*$ wUl tou«sh
OF !• W,
The Secretary ef the Treasury! &• fheeler, wUl you
tiro ue your full name and occupation.



J. W. fheoler

«r # fheelert


J. W. Iheeler, Vice President of the Capital

national Bank of St. Paul,
St. Paul has prepared a ooneiae, and X think ruccat unanswerable argument for the creation of one of the new
regional banks in Twin Cities.

It would take about 30

Ddnutea to read this brief. Of necessity a Tory large
portion of it as to faots and figures would be a repetition
of the faote and figures given by Minneapolis* There are
certain things that the gentlemen frost Minneapolis have
passed over, and what I would like to do would be to file
this brief for your consideration when you have time to look
at it, and eioply dwell on two or three of the things that
are contained In the brief that have not been aentlened*
The secretary of the Treasuryt

That is a Itgioal thing to

do, and we would like to have you do that.
Mr* Iheelert

For a wen lor, the facts of Minneapolis and

St. Paul agree as to statistics.
The Secretary of the Treasury! On the general territory*
&£r» Iheelert

On the general territory, yea, sir. But

there is one thing X would like to speak of that we have
elaborated in this brief under the head of the federal
Importance of St. Paul, and if you will perait ae» I will


J. W* Wheeler

just read a short extract*



(Peloral Importance of St. Paul)
It haa been adisittel, I think, by the gentlemen in

lanneapolla that 8t« Paul, from the inception of the railway
building of the Borthweat has been the railroad centre* We;
have prepare! one part of this brief on that point, and I
will paes it*


There i s one other thing that haa been spoken of, and
that i e the change in agriculture*

For a l l time this pro-

posed distriot that we are urging upon you gentlemen must,
of necessity* be an agricultural 11 strict.

During the las

decade there haYe been yery rapid changes in the type of
agriculture indulged in in that dietrlot; passing from the
aiopier forme of agriculture to the xsore corny lex foraa, and
8 t . Paul has been the centre*

So X want to reed just for a

some factt In regard to St* Paul as the live stock
oar&ot* (Reading paragraph entitled 8t. Paul as a
•took market.)
The Secretary of Agricultures

Ur. fhaaler, aa Z

stand it, your argument ia primarily for a regional bank in
the Twin Cities, and secondarily in 8t*

Mr. Wheelert Tea.


J* W # Iheeler


Tha Secretary of Agriculture: You eiaphaoize the broader
polntff first.
Ur. Iheelerj Tea, that is the view we take ofthis cotter.
I hoard & question oakei & coccnt ago in regard to Duluth.
Zf you will percdt me, I would like to read one short
quotation from this brief nhich we are going to leave with
the Coccittee. It io not ltaa significant in another way
that Duluth, the third city in else in the Sorthweat* and
of particular importance in a ooxoruerclal sense has the
entropot of the tnonsoua trade of the Great Lakes, expressed;
its opinion on the whole subject in the following language* j
^uotol from the editorial oolusne of the Duluth Kcwa-Tribune^—
The Sooretary of the Treasuryt

Tou assume that they speak

for the people or DulnthT
Jtr. Iheelert

X aoauao 90* They may not speak for the


clllicnaires of Duluth, but 1 take i t that they speak for

the people of Duluth. They of course* would not speak
for the lUnneapolis grain houses that have branch offices


Th# Secretary of the Treasury! Well, you my r§*& the
ttr. theolsrt »That the northwoet should have one of these

J« V, SJhtoler

ahcul 1 he oorwluaive without ar&waant* 2t«
in the last 20 yenura bits b»en jAienogenal,
i t a e l f nspiily nr.d potential?.

It i s

In X%& reaources, i t s

natural wodth anl lt« hui;*m cntirciea# i t itt the
| rogion of a l l tho utate*

It ahould bo oonctiod one of

sight wit?.out »AUcation; tm&, a l l tbinge ooruiJUtorei,
rro beliere tliic ehould be llioatoi at St. Paul."
That l e j>art of the #4itoriel end oorero the quotation.
One of the other epeakorn froa* St* Paul will apta& of
the faot Uuvt St. Pnul in the jobbing cantro of the north,
I trill f i l e thie brief in cor.clu*icr,,



The f i r e t etep in determining t^jsr« ragion&l roaertre

I bunke are to he establish**!, tm&% be the iivl*iun of the
I Unitel States into suitable 'Itatricts.

The aole desire of

( your Honorable Bedy i e to oonault the beet interests of the
country, and to take euoh jseaauren aa will

! fnoiliUte i t e bueincais and conduce tothe
1 ftpemtiem »f the »«* currency «y»t«K« ^ * j^r^a* #f the
j folloning etat«aent i» merely to #et

with yew by reason ©f their more «r lee»
that My *i^ T** *& r«MJ^«e eon<iluti«aji| a»d f I r 4

of o i l , i t la <Uolred to prove tho propriety# possibly
tho ncceoalty of caking the Korthweat* popularly ©o-oail*l
and independent regional roaervo dietriot.
The terra *Borthweot* will be uaol throughout with two
u.c&ning«; the flrat inolu&ing tho five atatea, Minnesota,^
L'ortli Dakota, South Dniota, Uontana. and Idaho; and the
oocond, oevcring ooven etatoa« adiins to thcos juat men*
tlonod the ot&taa of Waahington and Oregon*

It oay seem

bout to you, iribio have a national problem to consider, to
include the entire Paoifio Cooat froa north to oouth in
one diotriot.

It. oaxy eeeu best to you to cake one district

of the northers t i e r of states from the Hia&i«dipplr£lver to
the P a c i f i c

These a even states are closely tied to one

another by the fact that four transcontinental lines of
railroad travareo them*

The Graft Rcrthom, the northern

Fftoifio, the Chicago, & SI* F&ul and the
lOnneapolia, St. Paul & Sault Ste* Marie Railroad*, running

St. Paul to Seattle, Taowua and I»orUand# wnite %hm

In a olo«e com unity ©f intereat an4 e£ t»ttHa*i» relation*.
Tif« «uch a« theat umy easily ©?erri4« geographioal
•in©* *3»t bu»ln*«» of bank* «ith «»* another
^9»m^M to sreatly upm abundant and <suiofc int«roe»aunioatioi|.


J# ¥• thseler


The figure* gioen hereafter are all absolutely official,
being taken either froa the return* of the United State*
Census or from official report* by heads of department* or
bueinee* organisations* they are intended to eerte your
convenience Aether you deolde to aake a northwestern
diTieien running east or west, or to include only the store
ooopaot territory ending with the Hooky Mountain*.
the total area ofthe five states nsntlonee i s 464,019
square sales; and of the *eren, 689,843 square mile*. Shi*
i s frea 15 to SO per oent of the total area of the Unite*
State** the population of too fire states ineroasod from .
S,8T7 # au In 1900 to 3,938,B99 in 1910; and of the seven
states, frosi 3f»O8»05O to 5,752,964,

fho inoroaso in

tho former eass «aa 39.9 par osnt sad in the latter 61 per
cent a* oooparoi with an inoroass in the United State* for
the ***• period of to »*r cent* Tou wili undoubtedly* in
reserre dietriots, take into consideration
ratio and probability of lnoroase m population and in «r«ry;
kind of industry* When those districts have once boon ettabr
lished, they cannot ea*Uy bo changed, A readjusts*** of


any one would •*** the re-arrftngaaeat of others; with a l l


th* confusion incident to tho transfer of backing relations

J . W. C o o l e r


and the possible removal of one or Boro regional reserve
banks from one c i t y to another*

I t oan be avoided only by

the ore&tlon i n the Horthvrcat of a separate d i s t r i c t ; for
nfcloh there i e abundant warrant i n the existing volume of
business, and an absolftte neceooity i n the certainty of
oozing development &s eeaourod by i t s paat hiatory and by
the aaourst of i t s undeveloped resources*
t h i s being pre-ecinently an agricultural region, the
amount and value of s o i l product* are indicative of present
iay?ertaaco, and their changes indicative of future growth.
The inoreaee i n the value of a l l crops groim i n the United
States between 1899 and 1009 m e 63 par cent,

the increase

i n Minnesota *&s 67.3 per cent; i n Eorth Dakota 834*3 per
cent; i n Bomth Dakota 184.1 per cent; i n Montana 177.9 per

cont; i n Idaho 370.7 pw cent; i n mahinggon 335.4


**& i n Oregon 1*4*9 pot cent*


Jn lorth Dakota, ^datio and

fh« er*p* of 1909 were ©ore than tHrt*>.t*»M «••


raiuable t * those of 1E99*

In Morth Dakota *n& aAVso i n

South Dakota, thtr« m»# in th««t ten years, aa inoT«ase
of ever one sdllion «»or«i in the area of land dovoti)! %©
crop*. Agriculture, iihioh yeur oomsittte desires e


W* Bheeler


to nerve and encourage, l a increasing here at a r i t e which
theae fieurea ahow to be phenoiatoEl,

that rate ef| Inoreaae

w i l l be maintained eubotaatially for cany yeara itf ooc».


doea without eaying that the wtrketing of theee cropa
valued i n 1&Q9 at $562,666,657 for the five at&tea^ and at
$691,6^4,435 for the seven, den&nds asple
The annual reports of the grain inspection
of Uinnoeota and I l l i n o i s for the «orop year" 191l4
e i r e the owlceul recelpta of Grain for their principal
zaarketa aa f o l l o w s
Duluth 41,779*

Chicago 174,605, Hlnnoapolla

for the calendar year 1913 they were aa

Chieago 203,853 caxa, Mlnneapolio 160,5&4, Duluw;

67,920; the cain for the year 19X3 bringing the teioX f o r ^
two grain marketa of Minneoota to en amount conaideiV^bly i n
exoeaa of the Chicago receipt a.

In addition to the


ersin roceiptfl of our dlotrlct a rery large bualneaa ia\ dona
by S t . Paul with the Gen&dlsa lorthareat, which i d U inore>M»
etoadily with the dcrelopaent of that country and the
ineritable relaxation of tariff rtatrictionc.
fhe Qwrrmaf Mat freTidea that ea«h national bank
aubacrlbe £w atock to the aasount of slat ^ttr cent of I t s

J« W* fhealer

1485 |

paid in capital and eurplue, and fixoa the xainlnam capital j
of a regional reaerre bank at $4,000,000, By the report of
the offioe of the Comptroller of the Currency aa of October !
21, 1913, the national banks of the five states mentioned


have a oosfelned capital and surplua of $67,737,967, and thoao
of the acTen atatea #88,849,316. Six per cent of the
former amount la $4,005,478, and of the latter $5,930,958.
Either district, therefore, can qualify under the law
without calling for supplementary oubaorlptlona ae authorised
in tho law and the result a arrived at do not include northern
Vlaccnsln which is tributary and should be In the district.
I better baslo for calculation In a oaae like this is
tho total ancnmt of capital engaged In all kknda of banking


buslnosai and eren acre so, perhaps, tho total number of
banking Institutions*


11th an eye to tho future, tho

number of banks, indicating the needs already felt in a


, \



growing aeotien, ostabllahes the true relation of the


territory considers* to tho *toelo country, Xn both rospoctsj,


theAaima of the lorthwett and of St. Paul are satiafaotorUy





antiUed to consideration,


Aooordlng to «io report of tho Comptroller of tko


Carmcy, tho ia«*or of national banks on July f, 3p



J, w. f e e l e r



intho United States was 7,490.

The nuaibar in the five

states was $31, and in the 99tm states WHO 793«
i s almost <me»nlnth of the whole.


The Xattor

The number of a l l


financial institutions reporting, including atate and saving^

banks and trust ooc^paniea, by the oa&e report was 25,263
for the United 8tates, 3,683 for the five states and 3,4$3
for the seven*

The former i s one-ninth of the whole

approximately, and the latter Is nearly one-oeventh* Beyond i
a doubt cany of these institutions will apply for peralssicn
to com* in under the new law* But raaroly on the basis of the
nu&ber of existing national banks, aa related to the whole ,
nuu-ber, and as indicating inc^riiate financial neods of a
country in the full tide of growth, the claim of the Hortiw
west to be constituted a separate district seems to be well
founded* The total loans and discounts of all banks were*
Mcor&ng to the CoaptroUerU report, f375,093,168 for
tbs five states,and 1796,303,331 for ths seven*
For esntr&Ustd banking purposes, 8t* Paul and
Minneapolis can be considered as one great city of more thai
half & million people* In addition to the other reasons
oonUin.I ia thio statement, why, St Jfeua i s entitle! to

I t s present b&nki$g busia«ss shows a volume


J. Vm Iheoler


worthy of the establishment of a regional reserve bank.
The total capital stock, surplus and undivided profits
of ail lto banking institution* la $13,219,646. The govorncumt deposits hare, October l f 1013, were over §3,000,000,

end the balances of ecu try banka wero over $18,500,000.


Tha exchange draim in 1913 m a $450,633,733. All the
t of the 8tat« Treaaurar of Miimeoota in bahalf of

[ twenty-thrat atatt JLnatitutlona and twenty-nino state
; Jcpartw«nt«,with thr»a txocptioni, are kept with st« Paul
; banka* The tranaaotlona of the State irith the 330 banks
throughout the state with which it does bualnesa are conducted through St. Paul banke*

The following etatement of

buaineaa done by the 8 tat a Treasurer cf Minnesota during
the year 1913 ia ooro algnifioant than an argument could be:
8t Paul Banks
laimtapolle Banks






Buainess development as a rule follow! the U n e e i&arked
mx% and the channels worn by history* The Horthwest Is no
exception. Thrte»<$«»rteri ef ft century have paaeed alnce
the firat *«ttle««it ©* St. Paul. For »ore than eixty year a


J. ¥• Iheelar


it h&a boen the local point for the financial, historical
and governmental development of all the upper portion of what
wua oricin&lly tha Horthweat Territory,

From St. Paul

have radiated lino a of buaineaa that put and still keep tha
people of tliooe atatea in close touch with their natural
and original e«ntro.

From 8t# Paul enterprising mm have

gono out to eatablieh ntm centres of buoinoaa throughout
tho tributary country, Srery thing baa contributed to make
anJl kacp thio olty tha place to wfcloa the people of tha
H^rtlnroat naturally look for buaineaa leadership and


I t will ba in vlaoe merely to atato, without olabcration,

] a £fn of the principal pointa which entitle St. Paul to
oonaidor&tlon froa & buainaaa point of via«.

It ia tha

capital of the State) and in a real aenae, tha capital aa
wall aa tha gateway of the northwest*

It ia the head of

navigation on tha Eiaaiaaippl Blver* and bnown nationally
aa tha s&at important railroad centra »e«t of CUoaco and
north of 3t. Louia.

It la tha leading jobbing oantra of

thia aootienj ha.ving in the atapla linea auoh &* dry gooda,

&n&* a«d hordnara, houaaa that axaftiaongthe
aatabliahmanta in tha country. It la the


J . W» T&eeXcr


lex root dry goo3s and gento furnishing learkat In tho fiorthwoat# jobblnc in those linos mono §18,000*000 or^uolly* .
I t has the soaoitl X&rgeat Kholosale toy and notion house,
end la fourth in rank In tho distribution of rdLllincry goo'.e
In tlio United Stctao.

I t la one of the largest boot and

shot Raurnifaoturing centres in tho country.

I t h&a one of

tho ^rinolp&l national live atook markets, so Important that
tho details of tills will be given separately* I t h&s
: Z&rgeat la* book publishing hou*©, tha l&i'gast art



1 house* tho 1 orgeat individual horaa dealing co^kicrn, and the j

f lM*go«t plants for tho imm^fActure or £T&»* oarpeto In tha
Zt loads t h t uountrjr in «moX«sol# XecrA trading* Xt

loads ths Unlttd States in t^it n&r.ufacture of high ola#«
Xura and M ^ grm4o rsfrifierfttoro.

Xt h«m out of tuo Iwrgsst

plants la tho world for tho is&kfettg of gasolins firo onginos*
lit has ths XargMt publlo coli storogo plant la tho Kortb|fo»t* Xt has ono of tho six tfnltoi States Customs Porto
thoro to& I s in«pe«tt4. Thcso s,ro so&o of tho princij/&i


atoms In a Hot tfhleh Kl£ht bo lencthonoi to & considerable:
it oat*


J # IT, tJhoeler




S t . Paul l a a oort of Sub-*mpital for the entire northweat»

Tho flocal departments of the Government lioated

hero take i n , through tho Customs and Internal He venue


o f f i c e s , In round nuiabere, four million olx hundred thousand j

dollars a year.

It Is Port Office Koadquartoro, oftl funds

for the stato btlng sant to thio offloe.
tjuartoro of a radlway


I t io tho head-

oorvioa for tho tent di at riot.

It ia tho hsadquwrt«ra for tht rural carrier aoryioe.



I in tho »«at of tho Depftrtt.ant of Juetioe, inoludin^ tha

I United 8ta.tt8 Court of Appoals, the United St&tos Di at riot
; Court and the of floes of the District Attorney, mr»h&l, and
: epeolal agents*

T>-e tot Department foraiorly had headquarters

here; and slnet the re-arranset&ent of the military depart-»
Konts of the country* the {rurchaaifig acency of the Quarter&asttr f s Oepartoent Is s t U l retained.

It maitea disburse*

meats for Forts Tollowotone, Xeogh and Woeoulu, Montana,
and fort Antlllng* Hinneaota, aggres&ting |500»000 annually.
Supplies are also sent to Fort Brady, 12i©higa*u The Agricultural Department has heaisiuortcra at South St. Paul, *ith
9, large corps of inspectors for the stock received at that

J. W. Racier

important tsarket.

Two <f«partraenta of the Unitati State*

B\gtnear»a service have thoir headqeuartera here, mien the
garrioon at Fort Snelllng la at full strength the total
annual dlaburaemsnt on army account will bo $650,COO.
Sinoo the business of tho banks la co~teriaino\is with *he
postal senrloe on which ao large a part of the credit system
depends* a fair oonoeptlon of the importance of the torritorj
, senrel from 8t. Paul may be had by rcumbering that the
Tenth Di rial on of the Railway Mall Service* with
here* ecbraoea the states of Minnesota, northern
Vleoonaln, forth and South Dakota, with juriaiiction also
j over laall aanrlca on lines ex tending: Into Montana. Icwn and
[ HebraaXa,

This sweepe In territory from Sault Ste* liaria

on the eaat, Ohloa^o on the Southeast* Ctnaha on the south

Rapid City on the Southwest, weatward allng the lines

of the four northern transcontinental eystems* To the whole
I of t h i s , St. Paul has the relation of a oomeroial centre*
{ The t o t a l route mileage, or Biles of lines over «hieh
i oars run, attha end of the fiscal, year w&a 26.30B, the
total annual mileage 43,037,691, and the total nur-bor of
| umll ©lerke, Includliig offloiale, atthe present tii»e


J. W, Wb-oelor


Without going into detail, tho record* ahow that twenty*
four Paderal offiooa, a l l , oxoepting tho aeveral a^tacioa ©f
tho DepartJEont of JTuatioe repraaanting dlatlnot Foderal
goYorn&ontal funoticna, are centered in 8t« Paul* Their
a o t m t i o a raAiato froa thi« point in a l l <*ir«ati<m« fro©
the up^or peninaul« of Michigan to the Pacific Coast,


of theae bnmohta of the Ooremt&ont'a work rotiuire largo

fuada f o r diaoura«&tntaf and &ax*y of thosa tako in largo



Tht total l i a t of Teloral officials and employe© |

in St* Paul, and xmd-r juriadiction of the Foderal head^uartara in St. Foul, including the army, nutabara I>,eoa

I t would bo tolioua to giro tho aoparato itaue

of thoir bfila&eo ihoota, any of a l l of tfcich oan bo furniehid
i f da air ad.

I t i« sufficient to a tat 8 horo that €ho

and Uaburaetaowta of tbo St. Paul Post Office o&ca rango
free four c i l l i o n to four and one-half tdllion dollara

Of «io othar y«d«ral officoi, thirto«ft #§ not

c c l l t o t «ny soney, but roooivt froffl tbo goyerm^nt m
totol 9t $l,57X,S08.74 f©r aj^onditurta*

thi»» *Ad«4 to

tha lntarbal roromia, ouato»o and laieoeiaanaoua rao«ipt»,
t ^ B » a t o t a of t M T f , ^ , * 8 .

Adi tho roooipta &nd

4ioburo«&«ato of ^ « ?<>•% Office *** *fe« * ° * a l «»«»* **

J. W. Wheolor


n rruaent money handled in Saint Paul annually io above
sixteen million dollars, and constantly growing* The in*
crease in postal receipts in the ten years from 1904 to
1914, was 63*9 per cent*

The money oriera issued are well

above a million and a half yearly, the i&oney orders paid
ovtr two millions and a half. The St. Paul Postal Savings
Bank has had high rank from tho beginning* Ita net deposits
on January 1st. 1914, were $709,407.00.
All of the above is exclusively Federal money taken in
and paid out in the course of transacting the Govarnent1*
business* It nay be adial as a not important detail in
the establishment of the proposed federal institution, that
there are now three large public buildings in St. Paul


bythe United States Government* in whi; h a regional reserve
bank can be aooogcslafced without requiring the expenditure
of an/ money for construction*
The development of railroads in the Northwest states
is one of the chief factors of their past growth, the surest
guarantee of their future progress and an indispensable aid
in binding the* together as a unit for banking purposes.


J. V, Sheeler


In 13E0, the eeven etatea &b©70 nientloned had 5»4-S3 mile®
of railrcadi in 1910 they had 30,363 nlle«/j in the last tea I
years their Inore&se in mileage was 41.65 per oeat as
ooap&rel with 24,34 per oent forthe United 8t&t©B,


Paul me the terminal of the first railroad built In


Uinnodota, and i t retmins the actual or potential taroiml


of the ten railroad systeos that now enter the city.

The* •

ten nystets* had an aggregate edleage of 55,768 miles in


October, 1013,

Three of these eyatows have their general


offices here.

8t* Paul i s the acknowledged railroad oentm

for the whole northweetera country,

Upwards of ten camion

^asaenser* p&se through i t s Union Depot erery year*
The Minnesota Tranafor, located in St. Paul, ie the
freight clearing house for business extending frees the
£le#l*sigp4 BlT«r to the Puciflo Coast an* for a wrr large
volute of businees to the east m& oouth.

In 1C13 the osrs

handled at ^ie Hi«ne**ta Transfer nu^ered 70St18T and t t e

to 15*3, the inorease in the busia#»« ww 70^7 per sent*

The transfer yards «e»tain ©It 77 miles ©f traekj ead feeeides
the distributien tf thjr«u|^ frei#it ears* « l l ©f whieh take

local industries iriKioh haf#


J« ?• Wheeler


trackage oonn action*.
To the financial icportonoa of a bueinaaa of thia
aagnltulQ and It* need of lioao banking acoocciolaticn, Is
a3 lei the abundanoe and eaa* of coci-amioatton with the whol<
faorthivsatarn territory.

The nueber of train* aarryiag

c a l l oars which arrive hero daily la 64, and the number
dop&rting ia G3, Two foet cail trcJLna, handling icail
cxcluaiTcly, arrlTa ftr.i two depart daily from St. Paul.
Croat Sorthern tpaoial faat mil

trainu tank* %ho run tvm

St. Paul to Saattlc* a. diatanco of 1814 n-ilea, in 4? lioura
:o udr.utaa, aa oonpajrad with 50 fcoura and 35 mixmrm
for the faat &ail over t&« tnioa &ad Southtrn ftutifio from
OuaJia to Can Francisco,

Shis Croat northern traaseoft*

Unsntol s a i l train la tha faataat long diatane* train in

The through tijse achodule ahows How quioUy a l l

interpellate r-ointt art oerrei.
Xn average of 340 paamtn$er tralna op orating in mid out
«f the St. Paul Union depot daily girao abundant aail
ic&tlon with crtry part of the territory*

Thia aerrioo 3mi

%rum up nAturally in anawar to the deessmig of tha trestj
t>irou£h i t } butineaa oonnaotiona wfeich could net b* disturb id
without lees to eXl parties h&ro lintod togothar the ueresal


J« W, Wheeler

eoassunitioe of this territory frcra St. pp.ul to the Pacific
Their eentiasent in D i e matter hae been dcubtlees
faore or lees fRallinr to you by direct expression.


nore incidental evidence of i t you may be reminded here
that tbo busk* of ft olty so f&r distant a.s Butts, Mcntena,
in reply to a rsqueet thst they ally themsalvae ?fith Seattle,
£poki*tt« ©r ^ortl»nd in th« requoet for a
reesnre b^ivk, r»pli«d that all their bueinoee
were with St« Paul imd thnt they preferred tc be represented

I t i s not lose »i$niflcnnt in another wny the.t

EuLuth, the third oity In else In the KcrDrteet, tm&. of
; p-rtlcyul-r :laportmce in a oonmerolal Ronoe as the contropot
' of the sncmcttB tr^do ef the Ore t ^akes, expreaees i t s
I opinion on the whole subjeot In the following l^nffu^go,
j quoted from the Eiitcrlr.1 oolxunno of the Duluth B«ws Tribune I

ths lorth»e«it »ho«la have cne of those banks should

\ be oencausiTS vithrut as8U»siit.
• twenty ytuire h«s seen pheno»enp»l.
i rapidly end potentially*

Its development in the last
It ie fi»44nf Itself

In the rescuress, i t s natural


[ wealth and i t s huiasn ensrfies, i t i s the ir«st«at
\ region of a l l the states*

I t shculd be ocnded«d cna of

these tight bunfcs without taiesticnj end, a l l things cm-


©idared, we boliave thie ehoild be located &t St»


i t i s wkttor for regret that no eecur&te e t a t l e t l o e


• have been kapt fpoa year t c your of the volume of the
i Jobbing trad« i n tha Horth«feet.

I t i « , however, a fact

j w e l l known «T«n outeide tliio rogicn, and iinciueetimed withia
i t , thRt 8 t . Paul i n it© jobbing centre.

I t ] » • bean th»

I o e n t r e l l i n s point of the wholoonle trude &u long a* i t fcae
j bean the railroad o«ntra, and for a eimilar reason,


j hcuees und tb«ir repraer.nUtivea and e e l l thair goo>« a l l

threw i?!h the t e r r i t o r y t c the iihcrea of Fa get Sound. Ths


soet reliable eetincte of the total trade in round nurcbere
i e t400 t 000 t 000.

Thllo the aotirity of c ccmmimity in smnufaoturing i t
1 ueviklly in proportien to ite ape, ths lorthweet if n&kinr
ire t pregrtee in th«t y-nrtlauXar*taftTlmff4««t re^ehed the
et»f» of growth where i t ie praotiorble to »&ke at « profit
a l*r*e ehare cf the pr©4u«t» fonterly brou^it froa pointe
further «»et.

A reference to the oentue report en ssmu-

facturtt eetibliehte thie law, a«d exhibite the reawteblt

of inortaee in th» nutrnfaeturiag bueineee cf the


tf« Wheeler*

Tht t o t a l value ef ths ©scufeoturee in tfa*
?'t tbs l a s t e«nsu* wss £54S,lC0,000j BI-A i s tbgt
S i U t t s , $855,851,000,

St. Pe.ul*e sssxaif&cture* are

ths eeuatry l a t h s i r gain i n number of w&g
t i « d for fcurtdsnth pl&et in g&tn i n vAlue of produote
Tfce iiicr«ft©t bstvien 1904 and XB08 in w a ^ e&rstra in S t .
Prml ira» C4.6 per o t n t , and in value of products, 53, B par

", in vifttr net only the buainsse &t preterit eentorsd

in S t , Paul but i t s jrcb&bia future incrs&tss, snd tbft
i n i t s d i s t r i b u t i o n , probably nottoin* i s »ore
than i t s pccitlcr. as & l i v e a took it&rket.
Kcrthwoot i s i r l » a r l l y tank mitt
»n n g r i o v l t u r a l rsgicn*


dwaye roaain, f i r s t of &U»

LnrRt &ad varied &» are i t s mineral

r s s o u r o s s , s t ths hs»4 of lAko Superior and in ths Bocfcy
md i t s luab»r supply, ths s x t s n t cf
i s se l»rga «nd i t s produdtivsnsis so
s b l a tliftt priwury «»* sscendary products ef tlm s&rtli w i l l
always e o n s t i t u t s i t s i ^ s e t s e t ecuroo of Vfaltli and
b a s i t and s s a s u r s of i t s rir.rr.clal


Ko l w lo batter ooUbliohad than thnt trbloh dooraos a
oh'\nm froa whact prcduoticn to a ©ore diversified i&duetry,
i-r.i especially to tho raising of live etcofc, ae a region
advance* ir» years.

Agriculture b^ooaoe mere prcfItalia

by biaooffiilr.^ ©or® intftntird.

Thle saens not «ily tb» aob-

• tiluticn cf fAra4 for gracing l&nd, *iut the grwinj? cf aor»
ttcok en f-ra».

A ocneider^blo portion of th* ls»d

rucly uflod for wh»r«t raising ie devoted to the raising
cf ccurtt grsint wsd fodder oropts for the feeding of live
j atcck, which io lrxcnoely acrs prof its. hid»

the Uhlted

States Cansus ropcrtft ehew s dccrentQ «f 1^,0 per ocnt in
tht t c U l whsot ucninjjp free 1803 to 19OS, Tbii dooreaoe
took plftot in the elder etate»«

While there wao a. wry

inoretvee in Sorth Cakotti, Mentis, I4«ho eai lte«hinthe urea f e l l off &O.XB


oent inOaneeeta. tmd 19.B

psr ©#»t in Scuth Ds.ket& and 13. Q per otnt in Oresont thee*
etfttee heinf elder ««d therefore following the lm jutt

Ths eaee preeeea le eheum in a oerretpending
ef 43*8 psr eent in the Stnte ef lew Terk, 58,3 per

In meMpttf 43 P$r eont in Obie »nd 74,8 per ee»t in
« Tfc» day of the mprvmaf
the l e r t h w t hae pe«««d.

ef wheat raieing in

ffcs wheat product, wheat reetlpte

J« W, Fhoeler

fti triieary marketo end a l l comceroinl end finr-noial tratie•ticne b&tad en wheat growing Bust progressively decline*
The oubatituticn of live stock product* for the leading
cereal in proceeding acre rapiaiy in the Horth?r©et then
anywhere else,

m tht United States the mraber Df ftll oattli

on f^r»« deoropoed 5f91D,B44 in tha ton years batwoen 1S00
end 1910J bat in the fiva lorthweetern state* tho nuabar
inor«-aod G15,94?, end in the seven etatee 648,096. Suoh
& ahowlng 1* poislbl« only on the batia of n prencmnocd
imd tormT.ont •ovonont toward A ehsngp in the afrrloultural
methods that hr a betn proved oocnonlo^lly deair&ble*

It ie

juat RB •ii^iifio&nt that the entire Increase in the v>;lue of
»11 onttle on ft me in tba United States in ten years i t
ldantleal with the inora&ee


in these seven states* Out

ef the twtnty-fottr million odd doll&rs for the whole country,
«ore than ninetesn Billion dollsre of the i n e r e w ««r» i »
th# f i r i t five «t»te§»

One ninth of the entirt inersftse of

the v*l«« cf a l l twine en fsr«s took plnee in the sa*e

He thing was »©n> olenrly brought out in the dls»

euselcn in oengrss* en the tenas of the Carrenoy !»&»» *»*
in the prt»i!ls*tifla *t Y*®* HoncrRble Cowaiittee, th»n the

t« ecnaull th* interettc ct the fftnaer.

Even if


i t ware decided that cnly eirtit aueh bnrke should be
liahsd, tho tfcrthweat in thia p-rtioular ia cle-rly entitled
to eno; nrj. i t will now be ahown that on this ba-ia St. Peul
ia antmad to that cne.

The Scute St. Paul Livo Stock ocrkot hao become cno of

tha ;ro teat in tha country, ani in i t s grcwth frea year to
year i t hne really no rival.

All tha weatorn iRarkota

ehcwod a daorattea in crttlo raoeipta for 1913 eoapsred with
1913 oxcopt South 8t. paul end K-naao City,

In hog

rooeipta Soith St. F*ul ahorod an lnoranoa of 27 por oant,
throe tiaaa tha combined peroantnte of gains in a l l othor
to OR aha.

In ahaop recoipta seuth St. Paul we* secend only
Both in ttbaolute ietpcrtftnea and in rel&tive

rrowth tfc* South St. Paul etcck market ia one of tha aoat
lssports&t in th* country.

Thase llvo a took receipte art

diatri^utad ovar a l l tha atotoa of tha torthweat, more than
hoX<" i »lllicm »hM»p eeatinf from Mcntttna a.lone. South St.
Paul la by He * Mia a faadinir or tr&nafer et&tien for a took
en tha way %e Chicago* M practi8%lly fell oalvaa, hoga *nd
horaaat 9i,& par om% rt tha cattla und 00 $®r osnt of tha

J. V« Vheeler

efcaep received there are tlao eoid there,
Thl« It* Also a etocker f»nd feeder market, Kueh, of the
liva etoo* reeelved lo returned to the country to Be
fattened. Ifor* th n «no~i»lf of the 531,000 ha&d of cattle
end cnlvea received lnai ysar were Hou^tt for that
) Thin demnnde exoellent banking faoilltlee, Scaa of tha
| fanaem who eoae to that mrket to bur live etook h»v»
«&tqr of thea reerulre to be flneaoed,
K«re into re *a i^ortts&t relation of the live etock
to the fia&aoial lntereete and the flnwvolal
f*elUtleft oontered In St. PFUI. k groat lesxt
to Kid the live etook trade, hoe been built up
It will require e&crneue expe&elon to eoet future deatftnle*
The lcpfic «utetftftdlnr e&do in South St« 7&ul to f imere
thrcufiwut the *ortfe»eet on live etock being prepared for
market tamm* to f enr end one-half sllUon dollar*. Theee
loane were node by twe bnvks, one cattle 1©«* oocytaty,
twenty cc»iecion hcuaee wad fifteen brokere looatedte
Bouth 8t. tt*l*

The tctal low* for to* yew *sgre**ed

eewa and e&t-fielf Blllien dollarc C^piUl «e employed
tun»« crtr oilfckly, t&4 l*r& credit ree«-uroei are rewired*
Theee !©*»• were ewttered thrcugh the tUtee frc« the


J. V. Wheeler

j Iiie«ieoipri River tc tht acaky Bcuntaine, including Iowa,
\ Xt ie eatlat&ted taut $000,000,00 of South St. Paul ooney
; waa loaned in thia way in ttent«na. A emeervntive eetinate
• cf the total Mioont of aonoy paid out for li*» otooJt in St.
! Paul aurin? 1913 i s forty Billion dollari.

Tb.le lt«ia of the oonnorolal and fln&noiftl lntorottt

[ ftrcupdd in St. F&ul ha» bean treated in sosi* detail fortro
' rdaicno.

It ia not0ntrally knovn to the public.

| only ft bdfinnin*.

It iff

Mdaflured in dollars, i t will baccaii

! with a Tory few years probably the soot iaportant eln^Le
interest In the Bcrthweat.

Mo a jure d in value to the

agricultural intereet of the ocuntry, i t eennot be over*

Kuagured in terse ef finanoe, ae related t*

the r^rpcoe eeatisplated in the paaeage of the new terreney
Aotv i t ie a powerful ergueent for the ereoticn of the
Korth»t«t into a dletinet dietriot, and the eetablielmtnt
ef a rttLvt*X rteerr* bank at 8t. Paul*

I t would be iaty to add to the fereifoinr * n r y
a**mt «f fadti and ftatietioe Utarinit « botli theee

Bat t** J»rp«tw of thie etatemwnt i t no* %9



eaouaiwr tht Coaalttto with dotsila, but to draw th« brood
lineo of tht natural argument for Bffcrtfctro&tarnRaoerve
EUtriot, eentarlng naturally at 8t. Paul,

the fact*

proe<*ntod toes tc wwrrrmt that orraag»B«nti and, thould way
othart be dttlrtd upon any topic net ocvared hare, or thould
vioeuKsntary proef be enlled for of any of tha tt&ttatntt
hartin, either w i l l to Airnltbtd with ploaeure.
Tha brvnktrt and butlnttt t«n of St. Pml, oxoaklns ter then| aslvot snd ttr


tht banktre, tht buiinoaa mtn, tht fonaora—

' for tht whold leoplt of thlt ttotlen whioh it n&torftlly jutt
into i t t full development md prcopfrity, and trhloh
look* to St.Paul at i t t orpltal in B occmeroiftl and
flnrnjial a«na« at truly at i t lo tht poliUeal capital of
Illnrotou, tht Itading ooanonwt&lth of tht Sostbwttt,
fully rt^ut9t tht ttt&bliihKtnt of tuoh a dlotrlot, with
beundaritt tuoh at tha.ll totm boat to you to tttablith In
view of tht wholt of tht «r*at taalc th&t hat boon ecndtttd
to your handi, and fcr tht loontien in St. Ftul of out of
tht roglrjinl rottrrt banJct which will ainl^ttr to pwtrfully
to th*t dittriot»t ftiturt growth.

or m* s. KX

Xf tht Cowl t i t t pl«»it, I would U** to «onrt«t »


John B. Mitchell

statement thr.t adght poesibly ba mi einterpreted, that I
& Recant ago, and thrt was that the State of Washington
not Included in the dietriet whioh we thcugit ehould be
incluuftd in the Kcrthwoetorn dietriot. I t wae not included
for tfco re-a on th»t i t wae net neoeeeary, in our Judgment,
in crdcr to eet&blieh the bank, eo far f-.e the
of c f j i t r l ie O'noeroed,

Of ccurae, we wruld Ilk* to have

TTcohlnrrtcai in our diet r i o t , end in one of cur oonpil^tiene
we have included it*
The Seoretnry of the Treasury:

I underotand.

The Seoretary of the Treasury;

Mr. Magivny, w i l l you

et&te ycur f u l l na»e and occupation?
Kr, U&givnyt f i l l i u i Itegivny, President of the St. Paul's
Union 8took Tards Conpany, South BU Paul, USnn.
Che Seoretary of the Treasuryt

Do you want to submit io»e

dftt* in re«5*rd to the ttoek yerde?
Mr. Itefivnyt

Tee^ a l i t t l e in addition to what i f

oubnitted in the brief, *»d what parh&pe w i l l be •ubaitted
by •emeene e l t e .

X **at to show particularly the growth

of the live itock bueineee in thie territory and how i t i t



dependent on St. p&ul In ft way in that respect.

The Secretary of the Treasury!

And you are ahowins that

with tfco theory th&t thnt io an argument in f&vor of putting
: tha bank in St.


rstiwr thsn in Minna&pelle?

Ur. iff i?ivnyi Yes. The situation in the territory
tributary tc St. Paul o&y bo briefly oumscFrised as follows
Elvor*tf lod fanaing w i l l bring er«*t*r wonlth cjad ireftter

; wealth ssuet be adoquately represented by credits or currency
| in order to permit out territory to develop ae rapidly att
• ita etnditlms ehfi.ll warrant,
^ St. Ptvul h^o bo«n described.

Tbs territory olsli&ed by
Percit me to revietr the


| Bltuatlcn in th-1 torritcry with reepeot to the live stock
|: industry whioh All experts arrec Is the true exponent
j of ftgrlcultural proeperity*



Uinr.oecta ia oradited with about 1,750,000 hoge mA
about 2,000,000 cattle principally of tho dairy type. Corn

I end alfalfa exe bacosing staple producte ©f Klnneeota and
( wh;ct lo t&king a be ok feat*

This eeena nore live ttock

! c«d there ie no teed reason why Itinnccota ehculd *iot produce
6,000,000 te 0,000,000 gnp annually »nd 1>e & bif faeter
in beif prcdu0tion.

In 1»W W a w w U t&r*»r* puroh&»ed

em the St. fcml market $4,63? cattle end SO,204 «heep

f **

Willis* Magtaiy

48,454 oattla wad 37,458 aheap la 1913, an inoreaee
of Marly 80 par cent in cattle end U 0 par cent In *haap»
Conoidtr th? 8tat« of Sorth Dakota* ?ha eanatie aooorde i t
aoaathiag lika 300,000 ho^a.

Ik 1913 wo r»O9lved frb»

•%*%• 188,000 hegt M againat 66,000 hop* in W10* or to
inoroao of 1S4 per east.

Tfao oattl* rodoipta of 101,532

•ho*, an In art a*© of 3d por otnt wbllo the theop rtooiptt

79,486 sh«ir an inortaaa of 33 por otnt ovor tho pr«viouB
thi« from a BUto that tufferod on account of a
chert wfeaat orop ooao tbroo yoara ejro.

Tiiolr bankert

«ci:« up to tbt faot that dlversifieu faraimg «at noooasary
tfeay bart ainoo boon jot ting into Xiv* etooX at rapidly
a* potalbl* wad raloing corn and alfalfa, fcaat year forth
Dajota faraara purohasad on our narkat 13,439 oattla at
agalnat *,09S in 1912, an i»oraaaa of 237 par oent. Montana,
th4 atatt that h** paaaod ctit of tht range oattla buaineaa
atat ua 38#0C0 cattla last yoar and 523,000 ahaap. Bar
Mttlara and thoaa waat of thara wira buyara on our market
of X0f X03 oattia aa afaiaat 6 f 183 oattlt i» MM$ aa ifioraaiji
of m par ©ant.

l a addition 1S0.69T oattXa a»d 60,011

•haap *«r* Aiatributtd from thia warkat to farmara i a

, I l l i n o i i , lew., Habraefc&t Siaaouri, and Bowth


H i l l s * Magivny

Bind* the removal ©f tariff ohargee, we reoeivsd
' laat fall from Canada over 13,000 oattU and that business
. i» beooming regular and is growing. Canada also purchases
; sheep and oattlf on our market tout not a$ yet in any large
\ volnmne*

These figuree are glrtn to show you insofar aatotir

| territory if eeneexntd itt prouuotion of lire itook hai not
j oxoeeded £6 par cent of its possibilities TH» paopU in
| Minnaapolla and Horth Dakota are Tory


in ©arneet in

j their deeire to institute diT»reifled faraimr and lire
! etook, Taey aaintain eotire and effeotlve development
leaguee and better farming asooeatiens for that purpose*
They are developing a» rapidly ae eapital e&n be obtained*
! St. Paul is the center to which these people look for help*

i •
in the lira stock bctsinsss. Sinker* Xron Berth Dakota nave
oeme to me from time to tiset and no small number of them,
etatini tb&t their ooamitteos needed U v e etook and aekinf
financial aid to earry the». fhe poini is obvious* ]We
eeuldnU meet more than a email part of their wants. Our
market laetyear snowed inorsases in cattle, hogs and eheep*
It W M the result of growth in our territory and not *f
abnormal oonditiocs ef veather euoh as eaixssd an increase





; in the ttovement cf c a t t l e to Kansas City er of cholera
, conH tier.* that o&used a Boveaient of horp to ether points.
Ve showed healthy Increaseo whsre other large markets ahewed
: deoraaooa.

Liy» ©took will be the basis of woelth of tho

t o r r i t c r y whioh presents the grottos field for grewth in
thie ccuntry*

X speak new for tfaa territory naturally

tributary to fit. Paul*
by proper financing.

That growth will be o&terially aided
Proper fln&ncinr will be possible if

& regic&fcl reserre bank ic located at St. Paul.
The Seorstary of the Traatury: Hr. FlannRg^n, you asy
ycur f u l l name and ooeupatlon.
Ifr* Flumagant

John J. Flannapji» President of 8took

Yards Saticnal Bank, Scuth St. Paul.

I will be aJ brUf

as possible in ttating wf aiission here aft this table.
haT» been associated


ia 8t. Pawl in furthering the

interests of l i w stock growth in this inaenss area tributary
tp t ) e Twin Cities.

The yards were started in IS87, and

f ©r»«rly we had to go to Iowa and Kissouri to obtain our

In 2*88 thsr# were soaething like 383,000

bsad cf stook §lea#itered therej and in 1913 we h&d ralssd

J« J* Fiaimagon*

In our oim vicinity, after the pursuit of .• education and
enlisting tha services of ctir agricultural colleges sad
county colleges, and there were grown and marketed at our
asrkot the mm of 2,600,000 haatl of live stock, tha value
of which wao §40,000,000, that wo distributed to the * r-.
farmers of the northwest*
I h&v* been for 84 year*, as I said before, advocating
tha crowth. of liv» otcok and corn growing, ond so jsuah ao$
I im pXeaaed to state, while X will not say i t i s frost my
offer to, that Kinnesota has obtained great proainoncw ae a
oorn state; in faot i t led tha Union last year*

The Boo rotary of Agricultures TTo had had a l l that

i fully presented to us* Will you not address yourself to
any new faets or any ei^rtifleant conditions*
Mr* Tlcxjit&ni

1 mi^it say that St. Pmil it? olRmoring

for this great resi^nrl banki institution, and we think ws
can further the interests of\ths northwest by making loans



to these formers mi to do good by raising Xiv* stook.
fb* Soorstary of %h* frsasuryt

the only quostion here i s ,

assuming thfet tuoh a bank ie to be orstted, whether St«faul
i s a better pi&os than Miimeapolis for the headquartere* U
you h&w» any fact that hue not betn broufgit out alrt&dy to

J* J» Flarm^gaiu

i oi cw that St. paUi i 6 batter thr-n Minnaspelis fcr that
j purpeoe, we w<mld be «?led to hsve i t .

Ur, Fl^raa&gani

| end I


^ e i l , I bailor© i t la.

It i s By lusae city

born and raised, thsre,

Tba Bvorttrj

of Agrloulturo? Wo oculd not cetabUah a

[ tr.caorltl or monument thare.

Hr, Flioaiapaii

Hot t t ali#


Thft fl«ordUry of th» Trawuryt


ICr* FlJU3SApu&t Wo hate clwayo b:en R great deacoratio

On that ground*

oity, If th&t w i l l bftvo any effeot,
Tho S«or»tury of tha TreRfruryt

Pomit »o tc *ay that It

tho l*»t thmtj^it that w« will hava in the aoluttca of this
It io not * politic**! but tn oocnomio problem
mxaX bf dofclt with with than in view*
T2it Stortt&ry of Agricultural

And so far from i t , that

i t eugnt not to b# montlcr.ed In this oonneoticn.
Mr* rirrjioi^mt

I t Juat comirrod to 100 ©a th0 spur of

»o«ent« I think th» »ituition has b»on pretty ««11 00Y«rtd

f roa c»r point ©f rl**9 fti -to the l i w fttoik int«ri«itt#
wo «U1 lot tha natter r o t i» your creed




Tho Boorotwry of tho Troaouryt

t f t l i you ©tat© yeur u l l

nr»ad p&d occupation?
Kr« Prino*t

Csorge Ht Prince, Chairsum of Jtorohsnte

S a t i ' n a l Bank, S t . Paul,
The S e o r e u r y of the Treseuryj

low, i f you w i l l bs f?ood

©neu$i to wldraoc ycur©«lf t o e»y new f»<jt« whioh have not
boen brought c u t , vfcloh w i l l show that S t . Paul i s & better
pla.0* f o r t h l f bank than UinnoapoUo, «9 would be glad t o
hare i t ; but w* do n o t oara to h a w elKply & rapctiticn of
what wo hAVt j u s t h*d, b«9Kut« our ticw in too valuable*
Kr* Prinoti

X think th« fn^ta have a l l boen brought out

i n tho pap«r which Vr» Hhoaltr ha« l e f t with yoti, end tha
•xtr&ot« whioh ho road t o you*

I moroly want t o emphasis*

th« fftot that w» boliote tboro 1« a real need for a
bank i n cur M o t i o n of th» ocur.try t o *$rt9 that teotioa
f r t » tho T«in Cltifts t o the Puget Sound, which i s tributary
t o u a # and f c r » a t o n t wnioh h a w already been t t a t i d | I
baUoro i t thculd bo i n S t , Paul«
It i t a ii0iifieant faet that tha Stwl Corporation,
which naj fwalfioatle&i a l l Oftr th» Iteited Statot,
ragienal mrih«a»*f looatad in the foUowinr cltieti

Bettca, Htw Tcrk# Pittefcurgh, Chicago, gt, %wU> Ban
Fr&r.olnoo, low Orleans and Et, Paul,
X dc- not knew that I eta* add anything to what ban
bo«B alrtttdy t&ld here, W« wcuia include tfet western end
northern prirt of Vltccnoin wad Mlnnoactft, Horth «wad South
B&ltotR, Hcntana^ Idaho and 1teflhtn£fc«u

Th« 8«or*t&ry of th« Traasuryt


Ur. PrSr«o«! Vtll f tharo io a qucetlcn vhathor «• vreuld


?be whole of Idehof

inoludt the wholo of Idaho or cmly the northern psrt. Th«

; cruthorn p r t , i t i« pottlbla 9 would rccrc ncturfclly oon«
into th« Oath* dittriot, i f th§r» wx« cn« eotabllthod in
or into Chicago dittriot*

v« art not otrtftin Rbcwt

I that, although Wft fe&vt included that.

But there i t ft

In «y ulnd whothor i t would not be cfcitf fti
•tnrtd poa»lbly, et tho n&tural obsamtl i» ri^it ima.

Tbt Sterttary of th* Treacuryj Wt »rt waxoh obliged to you,
Jir. Prinot*'
or o* tr. OORDCH.
fir. «ksrd«m I «a t»« cf tfet
do » larft buolofttt la tfeit pr©j?&ta4 rtfiimal rttenrt



dietriot, and for the manuf»oturere &»d jobbers of St,P&ul
*e would like tc 060 the baak located v.o ns&r isa poanibio.
Our business in tin* linao tjjRt I represent, thrtfc i s t in the
lias* thi:.t &r« cfiiMifcaturad and sold in the Twin Citie» #
do tha r,ajcr portion of tbft buQlnesa deno in tfcuse f i w
ctitaa, Mi«»«BfS»f Borth nnd Bflttth D^ketn, UraUann. and
including Idaho* Wd h^vo & largo taiftlneftft there, and In
»anr in»t!mo«0 tta firms with whom we do bu«lnt»« do e l l
their bualneaa in tha T^in Oitiet» «md th« majority of i t ,
I boliavo, in St. Ptiul.
The S«or«tary of the Trenmiryt Ron about iret^lnKton, do

jou do a l*rge bunineuo there?



Kr« Oordcnt Teo, but we do net do «& nuch in

• at ve do In Mlnneeota, for the r eon en that tr&shlnftcn
I larg oitiee*

If you ellain&te Spokana, S-:ttlo end

we do do * Tory large buoinese in the ocuctryj proportie&6tely» no*t X tsaan«
Th« iecritwrf 6 ^ ASrioulturet

Would i t mite eny

onoe whether the rtterree *er« held in Sti^n»ttpoll« or

«r* Gerd«&f

8ft **r *9 eur tmcinaeg ie

Ine Beoretary of Aerlmlturet


0# W# Cordon

Mr, Gordon* Bo# I do set think i t would. We believe that
! St. Pr.ul ic the plnee*

The Secretary of Agriculturet

But ycur main argOEsnt i e

for one in that Hootlent
Hr« Gordons Too, this sootien that we acrva; and wo
; biiUew, Mr. Secretary, that i f you wars to t&ko 40 pins,
r fcr intlaaoo, And ttlok th«in in tcwr.a in Berth fcaketa and
| than BP to the Roneral aorchnnto thoro fmd Eok them vhoro
! thoy did thalr business, and who finanoed then in their
, bourse of no«d, &• thsy do havoifoen they hard crop failures*



• you wruld find/75 per eent cf yeur inquiries that St.
| Paul van tho eity th&t did that*

X do not isean to tain

&zqr et&ted so looted nu&ber, but juet t&Xe ther. &e you
choose at h&phwwjrd*
Tho SeoreUry of the Treasuryt

Xe there rjiyono hero

ropr«*entin« Idaho or Hentiuaii with authority to open* for
Anybody out there?
Kr» Corbaleyi

X vh&t eh&pe oem ve tftke th&t upt X A*

canaror of tho Chamber of Cea»erO9 of,i
fh» Seorotary of tho Sreaauryt

Wo wiU, | w p 8poktt»

either e-t Portland or Seattle,
Kr» CorbaXoyt Xf tlvore are any trade aenditlone which you

I "r

A* F* Bawton*

! wr-T.t to aafc abeut In Idaho, I can nastror ae to them,

Ths Saorstary of the Treasury! Ite have not the tlae

I to t&ko that up haro.


Seorotary of tho Traasury* Will y&x «tat« your txxlX
nxd cooopHtionT
V£r, Daw tent

A* I1* D&w*cn, President, First S&ticn&l Bank,

D-Tenport, low*,
Thft SeoraUry of the Trsaauryj

I presume you gentlemen

v i U want to t e l l ve wbere Iowa <m«$it to go*
Mr. Xfewteau That l e f-11, simply to eAphaeite vh&% mM
protentei to the Cewitteo yo«terday«

We fasve ao

ooneern with either our baUlfcamnt eieter oltiee up the
river or our lw«or eieter oity down the river* *• k»d ee«e
fear that peeeibly the Kleeieelppl River night be dealgnRted &e the weetern lino of the Chio^go region,

This map

which th* 0ia»itt«e to* prepared eheuld perhape have ioae
l i t t l e MMiidmonti.

UtTenport* Xw*# ie one of the tfcr*e

e l t i e e whiah wOte up the Tri«-Citiee# a cosasunity 0f
1S5,QOO people • •

SearettJfT *^ **• ^reaturyl

Thi^t wfte intended mere to


A* F. Dawocn

bo an eutlinc »np then anything
Mr. Dawtent

And tho largest industrial eontre en th*

UiosiBcif 1 Hlr«r between St. Pnul end St. Louie,
Tba SoereUry of theTreaeuryx

Ycur point ic what? You

jwcr.t tc b» ineludtd in the Chicane dietriott
Hr. Eawteat

By a l l msaiis,

Th« S«er*tary ef th» Trtftcuryj

Ht t i* iho feot you want

I to iofreta en us new?
Mr* Itowocnt Yds.

All cur biislntsn i« in this direction.

iof iho «xohc&pvo cf P^vunport end th0 Tri-Cltioa banks,
ne-rly 80 p«r cent, of thee ere cent tc Chioago,

The eamo


i t true in th« anount cf exchsn^o wrJttm.

X rr^^k not

only for Vxrtcpcrt but tor All th9 cities in cootern leva,

;that «t should bt included in tho Chicago dictriot.

The €oor«t»ry of tha Troeevryt

Thoeo faote fcav* a l l baen

brought out.

I Mr« J5»wi«ii 8o If X m*r 3««t fil«» a brief it&t«««mt frta
[ tho Cl«f ring Houtt Astooifttion, X will not teke up imy
further tim*
I fh* 8«or«Ury of th# Trt&furyi t o t , tast »ay ba »ad«

fart of th# r«eord«
(Tb« ^par I* &• follew«)t

A* Ft Daweon

'Jrjw&ry 13th, 1S14,
Ren, ffilliuB C. MeAdco,
Hen. D. E. Houctoa,
Ccmlttoa en Org&nisatJcn,
Rgf, I l l i n o i s ,

The D^vohpprt Cloarirt? H^uee Aseociatlcn, at it»
cwtifi? en yeftlerd&y, deolded tmaniaoua y to retpeet
yc\xr CcEaUttce to Include Bavttnpert in ths Chioago
uiuer the r#dtr&l Reoorra lot*
% •

Bftvanpcrt io «. psrt of tba Tri-Oitiic, e«
ocaaur.ity of 125,COO paopie ci'.de up of tUo City and Book
Iolr.ijd ar.d Mo line, Zlllnoit.

It Is tbu u^rxiwouo wish of

the Uimke in th» T^-Citioo to oo An tb» ChiCf^o ro^ion.
Pr&atioally a l l ef cur direct bualneea iiit«ror\irsa i s ^ith
Chic fro. i l l ohipoentii of fens produce trem thin ooiamiiiity,
c« well »c a l l of E&etern Xo«%, f« to C M c ^ rrd m
a l l of our puro&iftos ocat froa th$r#•


Ten will obsenn

th^t ftll troiitporUtica end nail facilitlsu of cure arc with
C&ie* gc «sd fcr fifty y«»r«, thii leeality h&* !»*«

la pr&otiealir * U tou»ia«»» traimWith Chios £0,
f t »lBOir»lffe-cy-#»therefore, in m»WLnf up ths




A« F.

I tc Su »arvaw by Xh* m o r e l Zlsserw Saafc at Chicago, thftt
B-rai^crt rnc tfco tarriicry surrouailirtg tia in S&«fc»m
wiiX {jo In*.;ud3dl in i t t

2 BJB cure «o vcicc the

of tb» buila or this Icc^lity in ar*kinjs;

"Vary truly ycurs 9
(ttiBRCd) r. ?• Brctmlie*
KfiT* Dfcva;:^ort Clarrinff Houao*.
Mr. Kitoi*lH

S i . Paul would Ilka te h&vo you wOl en

Kr« 2Kll^y# of tba Fir»t X»tl o&l Bank, for not aora than
or thrc* &lnut«t, »« b« hfct a tala«nui which bt would
t o ofr«r.
Th» t « o r t u r y «f tb«Ttr»couryt 1* «iXX 2Mar fro* hi»» i f
ho 1>M anyUilisc ftt« t r efftr»
or im, t• H. B/XLFT

1h* SoortUry of tl» Trauwwrt T«i wiy

Mr. BftlUyt

«• H* BstU«y# Pr««i4«Bt «f tbi f i r s t

P»»X* Mr# S«ertt»ry»
i f r-»yon* «ia htr«

»A which I tfeli* Rftf b« cf i&t*rt*t f



and I wculd like to re&d and present then to the Ccsoittae.
Qao Is from tht Helena Clo»*rin£ Kcuoo Association, undar
date of January 17th, addressed to the St. Paul Clearing
Hou«o As»colnticn, to OQ as ex-cfficia President?
•R«pllao reeolvod to inquiries frca SeticnRl banks in
Hcntftna rcprcaontinr totsl capital end eurplua cf ei^ht
Dillicn dollar* show that eighty par cent a elect T*in Citiet
nnd twtnty per o«nt «eleot ChiCRgo —•
Th» Storetary of the Treatury^ ?e hnre h^d thivt telegras»»
Thrt vae pretent*d yeotorday.
Mr« B'.ilwyi

Z hrre cno other frco C^eondo, Ucnt&xia, whioh

I think would bo of interest j
•W« havt Jnet wired Secretary of the Treasury OM follows:
At ninaty-eiffat por cent cf e l l oorolsftndieinp live stock
&nd *grieulturAl buein«eo of this locality p&ae«A throu^
tht T»in CiUe« ^tonay we btliera the eel#otie» of 8t»
Psul «.« cur r«4«ml H*»drvo City would beet ecntervt tht
inter*ett ©f thlt loc&lity snd influence mtucy mort ttatt
inatttutione to ocaa in under tht saw lav*

E* W* Bromn,
Cftehi«r Firet SUt« B«s«k««
Secretary cf ths Tr«£«uryt

You msy f i l t thrt with


H, Bailey,

the Consoittee, end those letters *lso, m X presume they
tru -t like tenor*
?-*r* Beiluyt


Xhe Kecrttery of the Iree.euryj

^e thenk >«u.

(The l e t t e r s submitted by Ur. Sailey ere &s follows)!
"The First Bbtiontl Bank of 01 endive,
Glendlre, Uontene, Beo* 30, 1913.
irra L, i'« Beiley, Preet.
St. Peul f Winn.
Deer 8irt
Tour wire reoeiYed, end in oonfoxnlty vith your
I h'To Just eent to the Secretary of the Treesury the
foliowinfr wire i
tjfcrsirous ct being 6 YOBfcer Bank, we wish to urge
the deaigorttion of St. Peul e.s the location of s
Reserr« B*nk for our district* 9
•Xt strue* m et f i r s t es wry string* th%t our entire
territory Areas Chicegu to the Cotst wss l e f t out iu the
piece o f mcetinr*
Xt any, however, here been u delioecy »bout itsming
either St. Paul or tfimie*polie, «»d thereby «3«»«ssitig s

To lesere -he Twin Citi«« out m * Resorrs


k location for thi« ^wle territory would aeem to t>e out
of the '.;ue»tion.
Yours very truly,
C. A. ITwreton,"

Of Hont«a»»
« 31,

Pres* First Hfctional B*rtct
3t. Pwil, Vlnn,

Upon rtetipt of your tclegrta of tho 2-th oukinr that
*• ttl«gr»ph th« fioer«t»ry of t>-« Trowury urglni; the
detlgnttloc of fit* Paul M t^o location of « Fidaral
B«nkt X ls»cdl*t«ly »ent 3ecr«t*ry ifeAddo • t«lBgr«n M
•In rtt»ign»tinK y«dor«l Et»«rre Citiei »n<! t«rritori«t,
Z f«ol thrt Host«n»| whoee buiin«»» i» inooaoaon with th*t
of Bortto IMcotai tad Hinn«tot»t ahould b« lnelnded in *
d l t t r i c t to th« n i t of ut »»d wculd r«Bpsotfuliy urg« St.
M Bes«rr« City »«d th»t troat«n» ^>e include<

in Itt dl»trlot#


Our business naturally drifts E&etward a»d i t would
no t only ba inconTttticnt but inhonaonious were we included
in Western or Southern district,*
•At the time of vending this telegram I was not aware
th tit, during wy *bseoce the local clearing house beak in the
Twin Cities, the understanding being th&t St.
^innoapolie would



eeide between thc;.oelvea «hl di of the

two c i t i e s woul4. be designftted or, le&vu i t to tho Federal
Eeeerre Bcerd#
It eaean to be the general opinion throughout Wont an ft
this etete should be Included in Sestem territory
i t *leo eeeas to be ganeroily ooncodod th&t the Twin
Cities should hero s bwik md that we should be in that

Th« feeling l o o l l y seems to bo that either St.

Pfcul or yinnckpolie would be H eatlffftotorj location, but *s
most of the bsnks c*rxy both St # Peul M& XJinnespclis
accounts, they hsrdly f^tl lik« discriainsting in tmx


either of the c i t i e s ,
Persont&ly, I tmror a t . Psul end eltho my teleg*ea»
eve heretofore &of&9

i t •* ••rienee with the telegri«

•«»* to WsshiagMin by the loeel elstrlng house,
th» twin CiUst, I m willing to l e t i t sfcwid and



hope that St. Paul ciBO b* designated «* tho location &nd

a l l , wish Vontana to be included in i t s territory.

Later on, ihare i s every probability of Helen* wishing
to obtain •» br»nch of th. ^«derfcl Eesenre Bwxk «oid m will
th«a s o l i c i t support for such & designation.
With kindest regards, Z «a,
Cordially yours,

3. tforenn&n,


07 y #

the Secretsry of the Treasuryt


State your full

nans end

oceup Svtlon?
yr. YetUr:

? . B* Yttter, C sshier Iowa National B&nk,

Bftronport, lows.
X h i n nothing further to ssy oacespt the fact th*t Hr#
Dawson has presented our fide of tbs «rguiaent. Wo want to
be put in ths Chiosgo district and truld like the whole of
Iow» included.

X fcelirre i t i s tl» genorel ssntiaent of

all She benfcs in the state, and I hwe been in pretty elo»«
touch with th«t*




The Bacretary of th« Treasury: Your f u l l
Vr. Vtbars

H« K. Wehor, President of the ? i r s t tfational

Springfield, I l l i n o i s ,

we are not qppaaring hero in the interest of

my regional *«ak, but repre«entin(? the clearing House of
Sprin^fi«ld« end we fa el th»t we would like to express m
opinion M to whort* we would live to Toe located *o a member

The iovsr&l bmke of the city havethrou^i their

directorates w\<& their stockholders expressed * desire to
bacoKtt »«aber% tnd they will be loyal in any event, no
cat tor where wsmaQr be locfttad, and attempt to raake this new
b i l l » »oet oucoassful one in i t s operations*

Ve have

not u Terr great rfsal of financial power or strength there.
Vc haft a OMSblssd capital and surplus of approximately
$4fOOO,OCO, and a* deposit line of $15,000,000, and we handls
the paper of K«rchanta and manufacturers and farmers to the
ttxtent of perhaps fro» *oO,000,000 to §100,000,000 annually,
Wet 60 years y 79 per eent, i f not 90 per sent* of the drift
of our eoH»erdal energy has been northward, m& the a en time n
of our people l e if, la your wlsdoa, your *on« «oult be aade
«ue5t • «li»ya«tsr that Springfield would f a l l in a

H# K # Wei>©r#


•hi;> of & northern region*! benk, we would foul nuch at
hoco and highly gratified with th« location given us,
The Secretary of the Treasury} You mean you prefer Chicago?
#r. Wberj

Wo prefer Chic*f?e to my other point*

The Secretary of the Troas*ry:

I would like to &ek you,

?.fr# *eber, what part c f I l l i n o i s would you eay ought to he
tributary to St. Louie, if & reserve hmfe should he eetibllehed there} about where ehould the line he drawn?
Vr, Vehert

My eufl^eitlon would he th&t Illinole should

6U be ineluled la Chicago. I thin? the drift of fOl our
co.-acroifd energies Is &orthwmrd«
The S«cretfcry of the Trewiuryj

You would not st«y that

* bout E*St St. Louie, would you?
'Jr. Tuberi

1 think « , rosy largely #

The Seorstftry of the Treasury!

And eorau of these other

c i t i e s to the eouth?
yr # Vcherj

I think so, very lia^ely.

The Secretary of the treasury!

fhers se««s to t>e s^

difference of opinion **mt th*t t end w» *rs mnxlous to
get your ri«w.
Ktm Websrs T«% I toiow tJ*ers I s # l t s a difference «f
opinion in t»*t rsf»rd«

H # K« W«rb«r#


Secretary of Agriculture: You j&prestmt the banks
&r. Vefeer:

I «n President of the Springfield Cltwins

Route Aseeci&tion and of the ?irst !7*tion&l Bank.
The Ssorttary of Agriculture:

And you officially repre-

sent thent?
Mr, labor:

I officially represent the entire ban kins

The Stcrttwry of tht ?r«Muryt V« think you* Io there
one else from Springfield who dtslxtt to bo heard?
iir« Picmes

Zf you pletae*

7h4 B«or«tfcry of th« Treasury; You wecr s t i t i your nwoe.
Vr. Pfcjne: Mw»xd V# Payne, Springfield, IU.J president
of tht SUt« »*tion»l *3«ik. Howntny aiiiuUs c*n I hSFst
Th* Secretary #f ths Trcwufyi

You may take what tla»

you dee ire i f you liaTi t i t h i n g atir to offer ««•
»r # Payne;

I f««l *t hm& here, »«o*Mt« J *« t*&*


hoot of Atorelnii Uno^la* *« r«pr«s«nt th« agricultural
diet riot* of


Wt aws the heart of tho Com Bolt*


L i t t l e Soacaason County, in 1912 raised 418,000, 000 worth
cf fam product!.

In 1907 «r« hid the distinction of payin

cash, the only oity in the Unitsd States of 60,000 people
excopt Richmond, Va, We will always pay o *h am long m
w« have hogs^nd cfctUa to ahip, We raise com, wheat,
oat* •*•
Jhe Secretary of tht Troa*jryi

P&rdon ae t Ifr, ?*ynet Iwt

XSQ ax« ^aitt fMailiiir with thoe«f&ot»*

I preeuao you want


to urge th»t Springfield 'be put into the Chicago district,


i f * ho*4qufcxt«ri bulk i» lo<»t«d thore,


?'r# ?»yntt


Th« hftir on sty head botra witns«0th&t

I ham* huon in *11 tho i>«ica sinoo lt>73. in 187S old

r.ecrataxy of th* frsasuryt

If you h*4 started after

this h i l l fc#gaa you pxefcafcly would hsvo fclaek hair an*.
J*r# Paynti

Old man Slair, in 1673, telegraphed ue, with-

out any solicitation on our part, •Xou oan haw your halsnos
in easH i f you want i t # »

Evsr since th«n ws hairs l e w d

Chicago and hara kept our raeerroo in chicftgo and hare
ahlppsd our products to Chicago•
Ths Oecrstary of ths trassuryi

cojMShara f

what psrc«ntag« of your

» •

i:r> Paynet

90 p«r cent.

Our wires buy their good* in

When we feel tick we coat, to Chicago—
Jhat ia the TOMon 90

The Secretory of Agricultural

Jconl of your buainoB»car,«8 to Chicago, probbbly.


Y«t #

Vhea m f e s l good we atop i*t thfc l a

tym S>i«xm#n#

Then wn aro sob^r and w&nt to t&nte

up wt cnm« to Chioi.|r«i wten w« %rir drunk and want to sober
up *$ corrt to Chte*i!O| andlt i s here ^hdre WQ ce« the
•X tar of the night before * And «r# Xecp our

the Secretary of the ?ro»«ary :

A rtglon&l %>«ok would not

look very good to you Use aornlng ftftor, tould i t t
Vr# ?»yn«i

It i s hor« whero wu V«ep our reBonrei» cod wo

do butints• h«ro.

I t i s port of IHinoit.

Xho SoeroUry of A*rict*lturoj T«u keep oil your liquid
rosorrts hertf
Kr# Poynoi Yoi #

*« *x«B%rt of Chicago aad wropreud

of Oiicogo for i t * ^odaoto wad *ro fond of Chicago for %%*

Iho Ster«t*xy of %rlciil*uj»>

Wt undoxtUai th«

2 think.



^w* do
^i*w *
»• «w»t

'— of
• -



W* P * y n c #



business with the State Treasurer of Illinois* and million•
of dollars passthrough Springfield frora the State Treasury,
Mid a great deal from Oiioago,
The secretary of the Treasury! ttell, the no raid location
for Springfield le with Chicago, *nd 90 per cent, of your
bwOcinr treoe»otione »re here*
vr. Pa^nct Yes.
T-t seeret»ry of Agriculture: You h*ve long established
relation* here*
iir« P»yne: T« w « t to put our money in a hfrnk th&t is
going to p*. diridands *nd thst i s dependent on diversified
products o f sericulture snda»nufaoture#
the ^ecr«tsr/ of ^e^1 culture:

Midi froa th«it the other

questions exe the determining once, and you have \>rought then

Kr, Payno; Yes, «• went to make Chicago the money oantre
j of t v e world*


I t i s our state and our people*




the 0#©reMtfy of ths tre»4iuryi
and ccevatlon*
leyst 14»»f« »• Keys, Presidwit,

t i l l you state your nmk


£. a# Keye.


vr. P*yn« )IMSM1« a * t of the tulk, ?«d I hwo not
much to
The 3«eret*ry of the Treasury:

T?O did not leave you much

» to i v , did



Vx* Feyej

Xof but h« otsltted one thing.

We ehlp from

• Springfield Itrge quentltlee of oo«l# Our p^jrroll «toounte
j to four r fIYO a i l l i o n dallare on CD*1 ^one, which all

north to Chloego »nd the northweat. That buoinoao

hue to bi» a«ttl^d with ihroug^i Chicfego* H« hM ooverod
everything el»e t X think*
Th« Sucret»jy ot Agricultures

T*ere i t no <Ufferene« la

eentlment down iheret
!'r, ruyti Ve t i l *gree upon her ing rhic^o »e" our Money i
60 to 90 per cent* of the bueinws comas here,
Th« HftcrtUry ©f tht TMMusyt* It wowid t>« tht
pl*e« for you to g9» on *ccount of your totttlntti y«3*tlont»


T««» I wottld «ogg«itt liownwr, th»t Jtft $t#

wwt 0 t . a a i r County, *ad » f«w of tl»»* do«n th«r«


0t # t«ui» o u ^ t ©rooewjr to 1M* in the St» lomi« dlttrlct*
Secr«t»ry #f Agri»ata3»!

Wtro 1»

* document from

B. Keys,


r r . Hollitter, Vico-Preoid«nt of tha Sfetlonra Bank &t Grand
«<*pids, unA fron tfr. Watero, advocating Chicago aa the
location of a i'eoonre Bank in vichlgfcn,

Shut ussy go in

tbu record,
(The paper ic m follows):
•Chicaf^, I l l i n o i s , January 20, 10.14,
Th« P.c«©rv« Ban*: Organiaation Cosaaltteas





Vr* Nudity Xm Vatara andmyicilf, infomally repre-

s«ntinfr t^e National Banks of the City of Grand Hup ids,
l'ichip;»nt wnn pr»B«nt t- urg« the inclueion of Michigan '


in '.hu Chicago Pod oral Httonrft District. In their own
city the banks represent capital, surplus and undivided





profits aggregating seven ail 1 Una of dollars, dtpcait* to
the %s»unt of thirty-fire millions,

Those b&nka represent.1

tha western part of the State of Michigan particularly, but

so fax m our observation i?oes we can speak for the entire |
State th»£ the nvturtl tr«nd of business i s towards Chicagd
rr,thar th«« towsxd any othir point.

This i s parti<«larly j

true of the wee Urn portion of the State and the %*&<* Shore
district, which I s the natural highway of cosaaunication

B, t), Keys*


The trade end transportation f&eilitiee are auoh

thatlt --c-uld cause t» serious dirursion of business to
to send i t in wty other diroetien in my large
UmiMT tht pr#»ent State 1m of Klchigwi It la not
for th« Ststn imd tiiYln^i bteikc, aft yt£t# to tecoK^
it part of th%j Ttdnx&X Hestrre Syatem, "but undoubtedly tht
Stfcte ltnt«illba so smenied th»t this c&n bo brought about
&t tin cbrl^ d«te, md i t la our opinion tbfet awiy etate


fflv«ii tho prirll0ee t u l l l join thu n&tionai


Very roapectfully,
(Slgn*&) a a y H« HolliBter,
Y, Pt# Old National B«n3c#

Dudley 2#


Ondnaaa of Boexdf


Grand H&plds'


iTatioaal City



Jhu Seeretar^ «f the Treasuryt


7mm. 8fc« Joseph we

been Mbd to hear Xr# Forb«».

Bucaaasst or a. i# F
The Secretary «f *h« treasury}

You w

ifcftt« your n*ae.

1 imn

»• $• Forbaa*




l*r# ?crbct;

Xi# T # Forboa, Preaidcnt of ?irat :-l*tion«&

S Bank of S t # Joe^ph^



Yho . ecratary o f tha TroMuryi

^c expactedto hew St #

Jaaaph t*t tun*** Clty #
Hr# ?oxbc«;

So yow did! but the Clearing Houst mnt un

hura vo Mik that we bu attached to the Chicago territory*
Vu %ro un^nlnouja in th&t ro^ue©t#

The bmVa of S t . Joseph

f#ul th lit tlntlr buslnMH i s In Chicago territory «*^- th&t
of their a^ttleta*nt» pr*ctict»lly come to Chicago and the
l i n e * fell run to Chicfrro &ndour r^Urotda all run to

The Secretary of Agriculture: How raeny ban):a do you
vr. ?orbet:

In the Clearing Houset five.

The Secretary of the Tree*wrys ?ire national banks?
Kr# For st

Four national banVe and one state.

The Secretary- of A^ieuXtursj Ihat peroenUgeof your
buelneeagoes t o
The Bterstary of Jgrieuituref
irr# Porbssi


Well, 1 should s*y st l*a«t


R. ?• Porbes.

The secretary of Agriculture:

And what part to jr

?fr# ?orl>es: In what eenee do :-ou
Tho Secretary of Agriculture j Do you keep exch&jj&e
• b&lr.cea there?

i?r. 7orbus: Kansas City not beins * reserve city, o«r


{ reserves are not carried there*

7hu Secretary of the Treasury: T« wara speaking of

j exehmtges with Kansas City a* against Chicago, for
:.'r« Forbes:

2he exchangee with KtntbB City M comp&rod to:

CMc* o axe rastly in tha ici .ority.

X ehculd judge raaybe

25 per cent* of our •xehange Vaeinessvould go through
The ttftcretftry of the Trowsujy: !Do
krgely in Chicago?


l^r. Forbeti Yes*
the Seerstary of ths Treasury:

How such da you keep in

.• Louie?
H*. ?orbos:

We Jceep * psrt of our reeerveii in

loUecUon purpoeei, ©ur seHtfeem it©rj» in eeutJieastera


» T. Jerboa


Tha S# or nary of tho treasury! What perceotaga should you
Kr. ?arbess

Z could not an war that. I h*T« not figurod

the percentage•
The s*>orotary of ths


«Efh%t p%rt do you Iceop

York, of your r**«rr«ff

Ju#t •auugh to ao«t our «xchAng

that I n t o »ayy tha imlAne** cwrri&d in Waw York aro not
haary bal&ao«», ntr«ly to a»tt tht draft B WO draw fro* day
to d*y.
Sh« S«er«tary of Agrloultur*!

Ara your trad* connections

with Kftnoa* Cityt

Ho, sir*

secr»tiuy of Agrioulturot

Ih«y ar«»uoh oloser wtth


Mr» ?oriHi*t ©i«jr »r« nojnt intin&tt with Chicago*
Tht s«or«t^ry of tht Srtasury* this i» « «u««tio» of
dopositlnc a part t f y**r r***rm in a partlotaar point^
hmin& a dopoaltary mmmhtr* aootssiUa, for r^dlsoountlag
op«r»tlon« ia tl»«« of n«o«««ity, wllhthft B«»«^« ****•


laoorporato St. *o*#pii in thi Chlo%# dittriot, «>u3A
noot»»ltatt tald»« ti» iwrth^m part o* Kl»»ouri and adding

R. T. Pro»«s


i t to that district.
th« Secretary of the Treasury:


there any damand that

tho etat* should ho s«parated in that fashion?
Kr. yort>ss8 Xt i s froa our district.
2hs Otorstary of ths Xroaslry: But I an speftJdng atout
ths northern lint of Kleiourl, with a line drawn south of
Bt. Jocoph^ for instanooy would you say that district wants
to t»o attached to a district Of which Chicago BHotittfet th#
!33*« Forbtsi

Y«S| Z should say »<># on account of tha nail

corrioa and natural dsvwlopnsnt of that territory* Wa
Isslitrw that ths territory alons tht St. Joseph. * Hannioal
Railroad from St. Joseph to ths Xissouri Siv«r and that
part lying north ©ugit to oono into Chicago tsrritory for
ths rsason that traAs dsvslopsisat i s with Chicago.
«»s stttrstary of ths trsasuryi Ihs tstamisiasnt of tiiis
bank will sot int«rf«rs with your normal ssahangt* in
^usihsss with your oorrsspondsnt hanks* Y»» of courtsi
understand that,

ths Rsssr?s * * * will aol* • I"""* o

rsssrTss t and i t will >• uiiliasd for «srta*» pwrposss 1»y
nsttb«r banks only.

R. T. yorbes

Hr. yorbaij



The secretary of tho yraaauryi

How would you not be as

wall »erred in that ragard with a Recenre Bank esttfblishad
at Kaaeas City or St. Louis?
ttr. Porbasi

Well, i doubt i t , for tha reason that wa ara

a pratty heayy sattllng point on aastern exchange, and i t

a question of tha apaoulation of tho exchange drafts

that wt iaaue.
d a Sacretary of tha Trsasurys But aupposa there i» a
parrl ns of axohan^a batwaan a l l thoae tutfrr^ Banks, i s not
| that going to suit art. ally ohsngs that situation?

* Tortaai


Zt will, axe apt as to tlaa. Of oourss —

The Secretary of tha frsasuryt But you will have a system

j of ohaok collactiona hara and exchange passing at par between

tha different federal nassrvs B'Wcs* Tha b i l l oontaaplatas
soma auoh thing.

Assisting that that wara dona, would not

tha nooaaaity of whioh you speak largely disappear?
10% »orb««t

that i s p o s s l b l s ,

¥• undarstani that ths

prinoipal raason wa hars for saking this request i s that
tha established trade i s with Chioago. The bulk of our
trade runs t o Chicago.

Our packing housas ara there, and

i t glres its an abuadanoa of Chioago and aastern exchangei

B, T. Porbes.


and In our settlements through our clearing houses we settle
on exchange and wo have to settle on practically a Chicago

The banks at the present tine are almost prohibited

froa taking Kansas City


The Socretary of the A riculture; Your business men look

! where?


Xr. Porbest

To Chic Ago.


Tho Saaretaryof Agricultures

They would not look with

I muoh faTOr of being attached to any other city in that
{ rogiont
Xr, Porbesi

Ko# sir*

The Secretary of Agriculture i

St. Louis, Kansas City,

Qtoaha, or any of them?
Mr. Jorbes:

Ho. w» oan best illustrate that ia this

sense, that the question was askod of fire number* of the
Clearing House how of tan they had been to St. Louis on
busintss i a ths past tares and a half y«ars» and I do not
tMak thers has beta a softer of ths 8t» Joseph banks who
has been to St, Louis on actual business for thres yoars.

R» T. Porbes.


The secretary of Agriculture: How would they look on

!&•• Forbosx v« haye no second choice*
The secretary of Agriculture! x 8 there any large relation "between St. Joe and Qnahaf
W* 7orbe»: Ho9 thorn territories are rathar 'built 19
independently, and depending mostly on Chicago, -ge are
not aaldni for anything earn apt to te attaohod to the territory — the figures I have papartd are of l i t t l e conaeQ.uiinoep X presuB*9 to the Cosnittee*
The Secretary of the Treasury! They say fee filed as an
exhibit to your testimony*
Mr. Tortwii

x win f i l e thea later.

The Secretary of the Treasury* You ean f i l e them later/
UTm Tortesi

But they are of l i t t l e eonsequenoe in that

respect tx*«pt to show the T0lunet perhaps, that ccmes that

The 8«oretary of Agriculture I Tou do show that,
Kr# I^rfeesi

we will show it* I h*f# only had tae oapi*

UliJiatioa li»ret aad in taking la this territory that l i e s
th«t l i n t of railroad, tt i s rather sisaifiotnt from
! th« standpoint of «*• ©apitaUsatiw, There are only afcout

B. S. Vert**,

t«anty-flY« national fcanko In i t , Mid outaido of St.
they ir« n i l snail oountry tank*, five bank a in 8U Joseph,
and fttamt twenty national tanks l a tht territory.
the Secretary of Agricultural

What I s th«

l a jawouri &• to tht ability or th« state feuikt to

lh«r« l a a d i m r a t o * of opinion there, ia there

! nott
Mr* 7ort>»n

Thare I t a differ*ae» of opinion a« to the

l e g a l i t y of the eufceortpUon, tub the AttonMQT General has
| ruled that they may m&eerifee*

the ^Secretary of Aarlculture 5 The Attorney Oeneral hatf
Mr, 7ort>*e» Tee# e i r , the Tax OojMietloner hwi reoowiend«d that the toanks eiA»«ori1>e«


have adieeated that the

r«»e<a.uUon fee adopt edby a itook Tote, •uthorUing the
•ubwription, and Z feelieve that the state Twrnke of Klaeouri
w i l l eTiattially oome into tht syete^ and the larger
ones w i l l ooae l a now*
the set rotary of Airlottltnret

Ihen did tat Attorney

i oen.ral render th«st opiniont

BT. rorteei

Oo»t %m *r t l r e t wt«k» ago.


f a t secretary «f Agrlomlturtt
prepared, and til*

If you *1U hwre the*

%h i t « i n 1»t an t*M%it t t y<mr



Xho «.oorotary of Agrionaturoi

Thank you y «ry »ueh,


I bolioro thoro la a cowBittaafrom Indianapolis which
lilco to ho hoard*
Stalnalcors Toa, air*


Tho eeerotary of Agriculture

Ihioh OQO i f to oo hoard

j first*

Kr. Stanakon ttr. Halolt i s h«roa Mr. liaott i s tho

| doait of tho fcanfcars*
Xho «po«rotary of Agrievlttirot

S^pposo ho oosos first*


Xho s«orotary of tho froasvry t

that i s your f u l l naat t

j Xr« iralottf

Mr. nalotti

Tolnoy X* ifalott, Chairman of tho Board od

Sirostor* of tho Indian* jration*l ^arik, whloh eanlt 1
rvpr«»»Bt at this etnforowo*
Xho 8o«rotai7 «^ th« Troaaury* »• you rfjr#so«l th*
oioarin« h«*« 9 too t «r. iralottf



X ommot ao|i-» not, of ©twrso —

etarotaiy «f ths Xroasuryt Xho 01o*i«« Honot hat no

V, T, Malott


GOGStittto her« 9 has I t ?

Mr. tralottj

Xono %h*t X know of,

i hare bees praeident

until t h i s yoar of tht clearing houat tor nan? yours,
2ht B«orotary of tho Troasurys Howf Mr, Kalott, X presmo
you want to t a l l u«f or d r « us your Tiows a* to what should

b« done with Indian»jpolii or Indian*, or oottu


&% Volotts Both/ Indlwi^olli i s th« g«ognjphio*l and
'• fin&noial e tat or of th« 8t*t« of Indian*. It i s * groat
I railroad eontort M you know, and * groat aanufftoturfetg cooi tor* To hay sort tlmn two thousand Industrio^ great and
i asall* fh« groat outlot —

Tat 8«orot*ry of tho Trtasuryt

Vlll you spoajc & l i t t l e

j Xoudort


l£r. Halotts

"3tit groat outlot for this nanufaituriag euo*

lntss i s largely through this gateway* t hwro pom conn to tod with thofcft&&ngluainoa* of tho olty of XndianapoU*
for Boro than fifty yao^m. My eonnaotioa with banking unto*
datts tho ostaJbUahBoat of tHt national banking systoaf and
t hod an opportunity of obstrying tht doroloPmoat mi trsnd
of tho buHnoss of our ©itgr and stats, and t wish to w
to you gontlo»O!i that i t i f largoly in this dirootiOBt ths
drift of our bvtlntts i s largoly in tho dirocUW> of 0hi~

V. LRalott


th« g«or«tary of tht 7r*a»uryt H*T« you any xa«aaa, or

you taad« aiy estimate of tht perctnt&s* of business

froa Xndianapoll*, and througi notharn Xndiana, that comes
to Chicago, or through thi» gateway?
Hr. y a o t t j

jfot but I would l>ogl«l to haT« th« prtTiiaga

cf furoltfilng it*
Th« 8«er«tary of tht Tr«uwryi V« should b« glad to hart

your cl» rin^ ho us* or your tanks, ia any way that you ««o

: f i t , prtpart *os« data on that •ufcj«ct, and file i t with

j thft coaaltt >, so that m may 1i« att.« to glT« i t oonsldoraj tion,

lhat w« particularly would lilc* to know, Kr. Kalott,

j I s whtro tht noraal ooura* of'buainati i«*

Wr. JCalotti

X uadar«tanA«



tho s«orotarar «f tht tw*»uryi And what would sort ©on*
•tnrt tht iattrttta of Xndi«iapolit and tht ttatt

j of Indiana i a tht adjuttatat of thttt district*.
[ ior. ICalottt X will * t «Ud to givt you that.

Sht 8aor«tary of tht Xrtajn&rys c«n you t t U u» now what
ptretntast of ymr rtstrvtsiart oarritd ia Ohic»ot
tir* yalotts Ko, X cannot.
th« 8««rH*jy «f thw ©rwumryi »o you ««TSr tht tsullt of


V. ?• UftlOtt


them l a Chicago or H*w York?
KT. galottl

¥• carry sort in Chicago than wedo in Hew

York, in f&ot, the buslmes relations between our olty and
Chicago are greater or closer thm those with any other olty*
Tho 8«or«tn.ry of Agrloulturtt

Row ar« your relations vita

Wr. nalottt

V* do ooaparatlYtly l i t t l e ouslness withCin-

Our t»usla««s does not go in that direction*


comas largely In t h i s direction*
The s«orotary of the Treasury! Horth?
Kr. lUlottt


The Secretary of the Treaeuryi
Mr. MAlottt

Row about fit* Louist

Vot nearly so gre*vt.

3Hi« secretary of tho Treasuryi

Do you do aore with ft,

Louis than Olaoiaaatit
Mr. Xalottt

Yes, c<mpHT*Xtr*ly l i t t l e with Cincinnati*

If X should roughly estimate the business of Indianapolis
with lew Yorkf Ohioego and S t . louts, I would say that about
three-sevenths of our transit business ! • in Chicago.
Tho Secretary of the Tro»«uryi
*r* JfalXott!

Jtoout what proportion*

About thre*-wenths perhapi two seyenth*

fwith w«» TorkjOae-MTtnth with St.Muii sad one-tevsnth

V. *. Malott


; divided, possibly between Louisrille and Cincinnati,


Ihat i s a rough estia&te.


The secretary of Agriculture

I f a bank were stationed


j at Chicago *nd one &t fit, Louia, would you include the
whole of Indiana in the Chicago district?

I think i t should bev froa the f act that the

trend of trade i o in that di motion largely.

We have rail*

roads west of Indianapolis extending to Evanorille, to go*
Albany on the Ohio Riyor, and largely in thii direction*
I think the whole statt should be included.
She secretary of Agricultures
Mr. nalotts

Row about $*rr* Hautt*

T«rre K^ute i t Tery intin&tely conneet«d with

Z have a good idea of the business of frr% UmU

having been the nooeiver O f the Yandalla Stystem of Railroad*
running through i«rre jjautt, for nor* than ei^it ytart*
fh« 8«oretary of Agrioulturex

l» would aiqpreoiato i t

•«ry *ueb. i f ytrn would give us th« data the seeretary a«k«
«d for.
}Sr Malotti

I would be y»ry glad to do to*

2he georetary of Agriculturei

| Uaonyt


Mr. VaioUt

Tos, sir*

Jk* an •AiT>it to your

V. S. Xelott

2ho secretary of the Treaeuryi



you will send that to

to the Reserre sank organisation Comaitteo, we
he glad to giro it consideration when we return there*
That w i l l giTe you ample time to go into the question thoroughly*
Hr« 11*1 o u t

X want to sey that the bank that X am connect*

<sd with handles About fifty million* of dollar* of foreign

transit i t one, a month*

The picroUry of Agricultures

You have be* in touch with

th vt eltuatlon for A great many years*
XT. M&lott t X have beei l a touch with thi situation there
for more then f i f t y ye rs«

X WAS oonneoted wtti the old

Branch Tt*ek of the State of Indiana, AS one of the office re,
end A dlrsotor l a my youth}

organised the gerohaats Kation-

al BAttk| of which X *»s Preeident, in 1865, «nd in 1802 X
became FreAldeat of the Indiana HAtional BAakt end until A
year AfiO l a e t July WAS president of that inetitution, end X
beosme Chairwin of the Board of Directors,
fh« peoretwy of Agriculture*

f t would be vtry much ob-

l i g 4 W» K a o t t , i f y«m wttld h«re Any infomAtioa thAt you
get for us along the seme Ungearing ^ o a the stAte


whole, through your SUte Bankers1


V. *• KalOtt


| t i o n , —you Might collaborate with th«a f or co-operate with
j then i n giving t o u s such information a s w i l l boar upon t h i s

Jfc% t f a l o t t l

Ttevtk yoUf I w i l l t># Yary plaaaad to do EO#

! Xh&ok you«




Tha s a aretniy of th« Tr#a*uryt Xr« St^anakar, do you do*
•Irs to b« hoard?
Kr, Btolnnlierl

l u s t aaroly to add to what lfir Jtalott says*

pr«sid«nt of Ui« Indiana Hatioiwa Banic. You asked Xr«

Kalott ono qusstioa about what proportion of our reserves
was carried l a Chio«jp9 sad the ref»er?es we carry in other

Ve *%rry i&out on at third in Chicago,

the Secretary of the Treasury! there do you esrry the
other two-thirds?
Kr. Stalnakert
Ve earrjr it In JTew Yortc sad 8t» louii*
lh« Seoreiary of the treasury! t n«%tM* that you gentlemen
are representing only one bank h*rt f

Are yom speaking for

anything fcut your baifict
ST. Stalaakert

JTo9 fir*

Secretary of the


#ther tanker* of the cityt

»Hat l i «** «*nti»ent

Frank »• Stalnaker*

Mr. StAlnolctrs


X understand that we would like — all of

us would l i k e y«ry much to be attach ad to the Chicago dis*
t r l o t f because business flows that way*
Tho Secretary of Agricultures

f i l l th* clearing hou» or

th« bunk* ae a whole give us an egression of opinion?
Xr« Stalnakert

X am sure they will, and X an sorry that

thoir &tt«ation was not called to itbtforo*
Ih« BecrttiLry of Agricultural
p o l l s & htaring l a t s r
Mr* 8talnakars

W« «qi*ct to giro Indiana-

at soa« point.

w will >>• •«*/ *l*d to ^a hoard*

Th« 8«er*tary of Asrieulturoi

¥« nay giro you a hearing

and wa probably will givt you a haaring at Oinoinnati on
our return*

¥• ar« going to hold a session at Cincinnati,,

and we could hear Indianapolis at Cincinnati, possibly the
17th of the ttonthf or Cleveland on the ttth*
30** Stalnafcers

T» «*•• * C1**** ***? ^ r t a n d g ^a Cincinnati

and we »iuld rather teU«hat we know here than to go down
there, because we wsnt %9 be attached to this d i s t r i c t . We
would na want to be talking against Clnoinnati*
the 8*cretar/ cf the trewwrys

*©» would not be talking

ag4 net %hm$ *ti&* pre»enting your *iew».

Shuy will hoar

of i t , n« matter whither you present i t or not*

drains P. Stalnaker

Hr. St&lnakers


we will ©* glad to hare a hearing, and 1

sure our clearing home will prepare themselves*
Ih« Secretary of the Treasury: we will have, as I understand i t , a hearing at Clnoiimatl on the lota of February,
but i f you prefer not to be hoard, and merely to submit a
brief, we ahall he glad to have that,
Kr. Stalnakeri

Too air} we will t>e rary gl*d to have

tho prirllege of being hoard*
Ihe Secretary of tho freafturyt

Certainly, we expeot to

sire you an opportunity to be heard*
The Secretary of Agrloulturos

If you are oomlngthare,

you Might have that brief with you when you ooxe to Cincinnati •
Kr. StfOnakort

Ve will have It prepared,

the Secretary of the freaturyi

I *uppo»e no one el»e de-

t i r e * to be heard on t h i s question, in view of that arrangemont, icr* Stalnaker.
Kr, Stalnakort

Vo9 e l r ,

fho socretory of th«
neoeeeary to hear anyone el»e now*
Ifr. StalnakerJ

Ho, sir*

tho fioorotary of Agriwature*

Here i» • Utu*

trm a

bnrJt in l&mkegcn, aaklnc that they be attached to
the Chicago Fcloral Roacnro B*nk»
fh# Secretary cf the freaeuryt

fhie will bo incorporated

i n tho veoord,
(The feel* l e t t e r 1« M follow*)
•Chicago, Illlnoio, January SO,
tho Reaonre B&nk OrganUatien Co^uitto«»

Tho e&fit&l and §ui*plua of tht iluakogon,
hmka tuaounta to |6?d f 000 # inoiuding the national banks
and tho aavings bank*

X hay« read oy«r tho oos»aaioatlo»

hftr.lcl i n by Mr* tatoro and Ifir* Holliotor, rtprtsonting the
Oran! Rnjila banka, and as «• aro situate! about tho tiso M
they ore, x agree with the Tie* they have taiten Mrtae oaW
t e r aa.4 heartily enlorae Chioa^o ao the iooation for a Federal keaerve Bank.

Taking into ©oneidemtioa that we»t

gan h&M been i n the nabit of teing about twe~third« «f
touftineee thr<s«^b Chioago* i t woaid inoonvonieaoe u» rery
to Iwre tho Hagional bank locate* anywhere tort Chioafo#

geerge *• Abbott, Cashier.

Frank D, S

R&c&ley Katlorva

The Secretary of the Traaauryt

B«for« the Cwaaittee

Jcunaa «e ahoull like to »ay that of anyone horn daatroa to
be )\9*r& to offer any new facto that wUi have any bearing
u;or. t h i j

ltuaticn t wo wlXl give thooi an opportunity*

Tht Oftcrotary o£ the Treasury* Do you deairo to be
lir, Wing t ¥o« # air*
TJto Socratsiry of the Trtnsuryt
Mr. tnngt

Tou na&tt

E. SU fing, U. Cro«stf Viwonain, r«presenta^

tiro of tho Baiavia S&Uonal Bank,
We ar* in & debatable territory* &«d i f thert ia ft r©»
g i o n a bank pliweZ &t 8t. Paul or Minnoa.?clia, «« would
l i k o to re on reoori »• idching to *>• iRelttdod iaitht <!h4ea&0 district*
fh* 8«orotnry of tht frtaeuryt
•eutbtm cr northern part of
Mr. tTingt

In the weot*m part*

fh# 3«or©tary of tlio
Mr. tinet

I A Crooeo.

Ihero ar« you# in thi

E, M»

Tho Secretary or Agriculture*

Sight on tha Southeast

iir. Win&t

In here (indicating on fimp»)

The Secretary of JftcitBAtsstf

Tou want tc go to Chicago

inatofti of to SU Paul or Hlnno&peliet
Mr. rrir.,:: 70s -a ara nearer St. Paul or Minneapolis;
but 75 por cant of our buaineea ia done with Chicago ani
tlint ia cur naturnl center*
The Socr«tft|^ of tho Troaaury

Ar« you tipoaJcing of La

Croaoc tu) a -'•'/•hole, or juot thia bankt
Mr, tinei/ X thouitht Mr, Barton of tk« other natioaal ban*
horo # but i f not, X will wsj that we agrw on
Secretary of Aericulturei

Are tbero atate baalta there?

There i e one etate ©su* there that i» eUgible.

The Secretary of tho Treteuryt

tUsy 4oii«t you «ib»it your

Ticrto i n writing to the Co^iittoeT
Mr. Winst


We can lo thmt. X *a«te4 to briefly a»it« thie

The Secretary |if Acricultures


s t a t « t n t mi we wUl attach i t to your



J . L. iioCullOch*

07 J, L« itoCULiOCH.
Tho Socrotary of t.h<t Treeauryt

Ploaoa give your naae and

rsailcnoa i£r. UcCulloahf
Kr* HcCullocH

J. L. UcCulloch, Proai lont of the Uarion

, liivricn, Xndi%n&*
Socratary of the Tra&mrjt

Are you » t i l l Pr«sid«mt

of tho ZRtUtjm ItoJTk«rU Aoaooiatlon?
llr. Ho Cull c oh:

X K. not*


In Saptocbor X ito&t out.

X am

• t i l l Chairman of the Currmvzf Cosml\%99, unfortunately*
Tho Secretary of t)io Trea«uryt



fcert of Mr« Mtaottt
Ur. UcCulloc.t

Yoa# o i r .

Th« Secretary of tho fretuuryi

X think I t would »•

i f the InUrum BmnkeHa A»»i»oiation would take up thla
quention &n1 nuboit to the Co»atte« euoh fact* and data
w i U be uneful i n 4ot«rmlnlnc
b* vsito fdtli reepoot to Inllpjw.
Mr* M«Cua3b<M»ln

tliat would co»« m&f


which X am chnirssn*

S#cretary of t*« Tr^furyt
teofor* u» ftt

WU1 you t«^« that up mi

3 . L* MoCuIlcoli*

ouch a brier to ~t at
Ur* iteCullochs


cultural \Aa
\An to^what
to|what amngouwnt
Tfca S c s r o l r y cf Acriuulturat
utull beat aervo thot Ufforent parts of tho otata, and tho
whelo state*


Mr* 2/cCuUcchs
t'luhol tot

jjc you


Tho Secret try of Tron.»uryt

to uhmt they should bo at-

that district Inliana ahould

Hr. MoQidiooht

Wo will b« glad to 1o

The Socrrt ry or tho Trtftauryt

Tou do net nouetsarily

h*ir«*te put the uhol« »tst« Into ono 4i«triot#

1&» oocaoit-

too haa tho powor to dlorecarl otett linca«
Tho Secretary of i^rieulturet

to *enr«

Of the 11 f for ant part** of the itstto*
The S«cr*tnry of tb« Tromauryt
couracu of t>ualR0s« in tho atnto*

T*a# *WR
Inoidontal to th*t» of

ccuroo, you havo to RAflttae that tho coimtiT A« £<*«£ to bo
dlvi !oi into certain Ualriota, in eriar th&t you
ttnsiae ho^ I n d i a n u l l l f i t into the ofitiro oohoise,
«U£se*ticno that you my car« to subisit fi<mg tfe&t


J. L, l&cOullooh.

Ur. XfaCuiioa't

The aaoumption whether or not St, Louis \

wft» to have n. re nerve ban* lms & mterlal effect.

If i t in

between St. Louie &nl Chicago, we coul'f very eaally deter*
Tho Seoretnry of the Tror.aijryt

Tou can aea\u»e the nitezw

We Ion11 know v^oro Uioy urn goine to be« We are

trying to get fncte now.
The Sec rotary of Afirlculturoi

T^tat ietthe reaaon I naked

about Cinoinnatl.
Mr« HoCullocht

I t r i l l be c&re complicated of course i f

Cincinnati «aa to bt oonaldered no probably getting & reoorvo brvrjt,otherwise i t would be very easy.
The Secrotary of the Trtenuryj
bt he*rl.

Doea unyoiie else deiire to

If not, the Co«iittee will now ft4joum,

thereupon at 13*30 ©•©look P» M*» Jsnuary »0# 1914, the
Coa. i t t e a adjourned.