View original document

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.






Denver, ^dorado.
January 36th, 1914

Law Reporting Company, Official Stenographers



Denver, Colorado, January 36, 1914.
The Secretary of the Treasury.
The Secretary of A g r i c u l t u r e .
GORDON JONES, appearing for Joint Com»ittee
of the Denver Chamber of Commerce and Clearing House.
GEORGE BFRGEP, appearing for Colorado National
Bank, Denver.
ALEXIS C. F08TIR, appearing for Causey, Foster
St Company, Investment Bonds, Denver.
JOHN C. 08G00D, appearing for Vic tor-American
Fuel Company.
A. E. de RICQLES, appearing for American Livestock & Loan Company.
WALTER A. DUON, appearing for Great Western
Sugar Company.



THOMAS BPRERIDOt, Miner, Cripple Cr e ek, Colorado,
representing Production and Reduction of Precious Metals.
RICHARD H. MALONE, representing Transportation
F a c i l i t i e s of Denver.
1I0RRI80N 8HAFP0TH, appearing f o r Denver Chamber
Of Conjr.erce,

JOHN C. MITCHELL, appearing for Denver Clearing
House Association.
J . FRANK EDKOHDfl, appearing for Fire Insurance
W. W, AR'^TRONCF, appearing for National Coi-per
Bank of 8 a l t Lake City.
C. $• SPRTON, appearing for THah -^tate National
Bank of Salt Lake City.
GEORGE E. A3B0TT, appearing for First National
Bank of Cheyenne, Wyoning.
H. VAN DEU3EN, appearing for fyoning Bankers1 Association.
C. ! • BLACKWELL, appearing for Executive Comnittee,
lew Vexico Bankers 1 Association.

appearing for Vinnequa Bank, of


"•KNR7 C. HALL, appearing f o r Chamber of Commerce,
of Ccloraao 3prizi&s.
JOHK 1 . bLuntY, appearing for Morey Meroantile Company.
W. D. TIDWiLL, appearing for Denver and Colorado
State f r u i t A&aoci&tiona.
WILLIAM « . LLOYD, appearing for f e e t e r n Union T e l e graph Coipar. jr.


V* P. ALi4J, appearing f o r Mountain StateeTelegrapk
& Telsphoiid Company.
IJ2YZR HARHXSOH, appearing f o r Penn Mutual L i f t
lnTur^noa Company.

TlLuXAK P. itcPHSg Merchant, Denver, Colorado.


The Secretary of the Treaevry:

The Federal Reserve Act

requires this Coanittee to divide tht United 8tates into not
Ides than ei^ht or were than twelve Federal Reserve Pietricts,
and to lecate vrithic each one of these districts headquarters
for a Federal Reserrt Bank.

In reacting our determination,

the lav requirss that districts shall be apportioned with
due regard to the convenience and custo&ary course of busi-


aess and shall not aec*tsarily be oo-tArmlnus within a state
or states.


The problem before the Coamittes is largely an eoonomio

It is not a political one and i t is in no sense a

looal ens.

It ia dietinctly national, and it has been neces-

sary for the Coinittee to jay in every community in which
ve have had sittings that matters of local pride of of local
prestige must necessarily sive way before the oowmon interest.

The patriotism of the country must be appealed to in

order that this question iray bs f e t t l e d in suoh manner as
to bring to the country the »axi*ujn of the advantages that
<* .
thio b i l l i s iefigned to produoe,


We axo nco-5aear.Uy obliged to make this trip or to cover

t h i s ground in the shortest possible tiff.©, net only because



we feel it is to the interest of the country to settle this
question as quickly as possible, but also because of the
aeary duties that are preseing upon the Secretary of Agriculture and myeelf.

We are not, therefore, able to give as

muoh time as we would ordinarily like to gire to gentlemen
in thess respectire communities who naturally want to talk a
great deal about purely local characteristics.

What the


Committee is seeking Is not so much oratory, but certain
fundamental facts, and 1 desire to ask that, as far as possible, the gentlemen confine themstlyes to those things which
are essential and necessary to enable us to determine the
question before us.
I think it would be wise for each community represented
here to select a certain spokesman

1 do not know how many

DenTer has chosen, but we would suggeet that they be sslsoted
with reference to the presentation of the oass from different aspects so that the same ground won't be oorered twice,
and, of course, the earns suggestion applies to any other community that may be here today.
1 see Mr* Gordon Jones is on the list first rsprssenting

fill he please take the stand?




The Secretary of the Treasury:


Mr, Jones, state your

full none and occupation and your residence, for tht benefit
of the record.
Ur« Jones:

Gordon Jones, Banker, Denver.

The decretory of the Treasury:

Mr, Jones, the Committee

likes to begin always by having presented a map showing the
territory which you suggest for a Federal Reserve District.
Hare you prepared suoh a map?
Mr. Jones:

The map will be presented by the next speaker*

1 hare juet a few preliminary remarks, as Chairman of the
Joint Committee of the Clearing House and Chamber of Commerce.



Gentlet.en, you hare traversed a considerable portion of
what wae designated in our early geographies as the"Great
American Desert."

In 1637, when a bill was pending ia Con-

gress to establish a post-routs from Independence, Missouri
to terminate at the mouth of the Columbia River, Daniel Webster explained in the Senate:

"that do we want with this

vast, worthless area; this region of savages and wild beats,
of deserts, shifting sands and whirlwinds of dust, of cactus
and prairie dogs?

To what use oould we ever hope to put



t*e>se great desert* or these endless Mountain ranges, impregnable and covered to their very base with eternal snows?*
We hope to show you today in the very brief time alloted us
the wonderful aohieYemente of an indefatigable and persevering feet.

le believe the importanoe of this region will be

impressed upon you to such an extent that the insistence for
a Federal Reserve Baak oannot be denied a people who have
made a aoet wonderfully fruitful country out of "this vast,
worthlees area."

Denver ie the recognised center of the

territory between the Missouri River and the Paoifio Coast;
, ! without a rival, and supreme in her command of all kinds of
bueineee carried on throughout this region —
commercially and agriculturally.


Denver is a most natural

seleotion in carrying out the purpose of the FederaJ Reserve
lot; for we understand the new law contemplates that the
people of the entire country shall share equally ia its benefits.
The states of this region are more similar in kind and
character, with a natural similarity of needs and securities,
than almost any other section of the country.
is uaiqus.

This rsgion

Its oonditions and its needs are not understood

and oannot be appreciated outside its own boundaries.

It it




aa empire within itself, of itself and by itself.

No branca

bank, dominated by a parent located elsewhere, would furnish
the faoilitiee needed.

A special training, from years of

actual experience and intimate contact with our owm conditions
has qualified us to administer the affairs of our own federal Reserre Bank in such manner that the needed benefits may
be extended, our banking, commercial and agricultural interests at the came time furnishing the greatest degree of safety to the bank*

We be^iere you are now in the city that ad-

ranced, among the first, the idea of regional banks, instead
of a oentraliaed institution with branches.

This was adro-

cated before the Yreeland Committee at its hearings in Den•91, lOTember 8, 1911, and is only mentioned that you may
understand that outside of local interests or financial gain
there would be here an especial pride in making a regional
bank a success*
In presenting our claims 1 would like to mention one thing
which makes Denrer pre-eminently the logical location for
the Federal Reserre Bank, and that is, the most modern mint
in the Hnited States-

Tou are already aware that there is

BOW in the vaults of this mint a oash balance exoeeding
$500,000,000 .

| .

Is would remind you that there has been de-




p o s i t e d and purchased at t h i s mint s i n c e lbO3 nearly three
hundred t r i l l i o n s of d o l l a r s worth of b u l l i o n , and that gold
and s i l v e r b u l l i o n i s r e c e i v e d froi
ing s t a t e in the Union.

Canada and every produc-

90 percent* of a l l the Alaska gold

Is sold to the Pnited States assay office at Seattle and r e deposit 4d in the Denrer Mint*

All the bullion purchased

by the United States assay off iota west of the Missouri River, excepting ths United States assay office at Carson, l e v ad a, i s sent to the Denver "dint as a re-deposit.

This bul-

lion cosies froa United States assay offices located at Hslana,
Montana, Boise, Idaho, 8alt Lake City, Utah and Seattle, Washington.

Ths average amount received from this source i s

$17,800,000 per annum.

Coin i s shipped from the Denver Vint

to a l l ths sub-traasuriee of the Unite

Btatss as well as

to the banks in every part of ths country.

During ths year

1813, whioh was an average year, gold bullion was received
from Alaska, Arizona, California, Canada, Georgia, Idaho,
Mexico, Montana, levada. Hew Mexico, Oregon, South Dakota,
Utah and Wyoming.

These deposits were in addition to those

xeceivod from ths United States assay offices already mentioned.
flinos February, 1*06, there has been coined at Denver Mint




in gold, silver tubaidiary and minor coins, $183,046,360,
and the institution has earned in various ways as the result of its operations 110,890,316.34.
We would like to call to your attention the faot that in
the division of the United States into Consular Districts
the following great foreign powers have selected Denver on
aocount of its logical and geographical location ae one of
the prominent cities of the country where they have established headquarters of their Consular representatives, to-wit:
Austria-Hungary, Belgium, Denmark, France, Germany, Great
Britain, Italy, Japan, Mexico, lorway, Swe_den and Switzerland.
These facts are important and significant, especially so
when we consider that neither Kansas City, Omaha nor Salt Lake
City are Consular seats.


We will have no difficulty in furnishing the necessary capitalization within thie region, even if the Bational Banks
should not provide the full amount.

Our state institutions

art greatly enthused over the privilege accorded them of
joining the system and many have signified their intention
of becoming ae&bera.



The 8eoret*try of the Treasury:


Let us have the next wit-

ness, who can produce the map.
Mr. Jones:

Mr, George Berger, of the Colorado Hational




Tht 8eoretary of the Treasury:


Give your full naae and



Mr. Berger:

George B. Berger,

President, Colorado lation-

al Bank, Denver.


The area of the territory we claim is 932,540 square miles;
population, 3,193,891.

There are, therefore, something less

than four people to each square mile, in a very sparsely populated territory, but it ie a territory of tremendous undeveloped rescurcee, and with the development of those resources
it will grow in population in having a Federal Reserve Bank.

1 have here a statement showing the capital and surplus of

, the National Banks in the states, if you care to have the
total, or I can give the states.
The Secretary of the Treasury:
Mr. Berger:

lationai Banks?

National Banks alone.

The Secretary of the Treasury:
Mr, Berger:

The total is $56,907,841,

Capital and surplus?

Capital and surplus.







The Secretary of the Treasury:

You do not include un-

divided profits?
Mr. Bsrger:


Of the state banks, capital and surplus,

The number of banks in the territory clai»#A#

national banks, is 466; state banks, 1153, or a total of

Aggregate deposits, covering business in the terri-

tory, $277,908,000.

That is based on the reports of the

Comptroller, of October 21, 1913, but it is necessarily estimated where we hare to split a state.
State banks dsposits

an aggregate of $323,159,000, or a

total of #500,067,000.
How, the number of bank accounts and the aggregate balances
(average four months) received by the Denver Clearing House
Banks from their customer banks in this territory, is as follows:

(1 havs given that in detail.)

The Secretary of the Treasury:


Total, $16,780,000.

Let us have the states.

Colorado, 513 is the number of banks; aggre-

gate deposit, $13,600,000.
The Secretary of the Treasury:

That includes stats and

national banks?
Mr. Berger:

State and national banks.

The Secretary of Agriculture:

How about national banks?




Mx. B e r g e r :

1 have not separated them.

The S e c r e t a r y of t h e Trsaaury:

Will you have them s e p a r -

a t e d and g i v e us a t a b u l a t i o n of t h a t ?
Mr* Berger:


Hew Mexico;

Twenty-four banks,

Twenty-one banks,
T * e n t y - f c u r bunks,


F i f t e e n banks,




That i s t w e n t y - s i x

c o u n t i e s i n Nebraska, and i s e s t i m a t e d .
The S e c r e t a r y of t h e Treasury:

That i s the s t a t e and

Mr. Berger:

That i s state and national.

(Twenty-four counties estimated) Ten banks,


(Eighty-two counties estimated) t335,000.

The Secretary of the Treasury:
Mr. Berger:

Row many banks?

Six banks.

In Oklahoma: No banks, no deposits.

Thirteen banks, $100,000.

In Idaho; Ten banks, $100,000 deposits.
la Montana:
South Dakota:

Ten banks, |3&0,000 deposits.
(Eight counties estimated) Two banks,






The Secretary of the Treasury:

Do you mean those are the

banks that keep balancea in Denver?
Mr. Berger:

Those are the banks that keep balances in

Denver, yea sir.
The 3ecretary of the Treasury:

And you have not got the

national bankat
Mr. Burger:

1 hare not segregated them.

This ie

national and state.
The Secretary of Agriculture:

Do you know how many etat*

banks would be eligible?
Mr. Bar gar:

No, I haven't that, no sir.

The Secretary of Agriculture:

Do you know the c a p i t a l i z a -

tion of the different banks?
Mr. Borgar:

No, 1 haven't that.

The Secretary of the Treasury:
Mr. Berger:


The yearly vcluice of cash business sent by

Denver Clearing House Banks, to Colorado, $350,530,000.
To Dt«h:


TO lew Mexico:
To Wyoming:
To Hebraska:

(Twenty-six counties estimated)

Twenty-fcur counties in Kansas, $3,000,000.





Eighty-two counties in Texas, $4,000,000.
The Secretary of th« Treasury:

What do you say, that that

represents clearances?
Mr, B«rger:

That represents the volume of business, cash

items that the Denver banks sent to these banks in these
various states for collection.
The Secretary of the Treasury:
Mr, Eerger:

Covering what period?

This ccv3red 1913.

The Secretary of the Treasury:

Just for that year?

Mr. Berger: Yes.
The Secretary of the Treasury:
Mr. Berger:

Check collections.

Check collections?
Xighty-two co mties in

Texas, #4,000,000.
Three oounties in Oklahoma, $150,000.




South Dakota:

(Eight oounties) $330,000.


Th# Secretary of the Treasury:

On that point, what is

your practice here in check collections?
checks free?

Po you collect




Kr. Pe.-gor:



The Oecrat-.ry of th* Tr«*a-iry:
Kr. Ii^rb^r:

For your depositary bankst

i/. Wyonirii,, Colorado, Ptah arid Ne* Mexico,

wo c o l l e c t and charge th« actual oont to UHJ in the«e other
a t i t e * W# *dd 1*> o*i>ts a hundred to the c o s t ,
Tiis 3sor3iary of the Tr3&3ury:

Mr. B^r^dr:

*hat do yea pay OR bal-

Country bdnke^a, we ;ay 3± ^sreant.

The ^ ^ r v U r r of th« Treasury:
.Mr. D^r^er:

Unifona rul-9, yga.

! • tL*it a unifona ruieT
T'jarly voluaa of out-

of~1»o*m busiaa^o }>aadled by the Der-vor Clearing Houa*
borJ:« fox thoir ' n t o u r ^anke in t h i s ration*
Fror Cclcrrvdo:



3aff Haxioo:

(Twenty-tix couritiet, aatioatcd) $2,000,000.

(Trfanty-four oou:iti9s, asti^atad)
$C, 130,000.

(Xiiht.y*t«o counties, estimated) $3,500,000,











George Berger
South Dakota:

(Ei-;ht counties, estimated) $80,000,

or a total of $339,550,000.
Denver Clearing House banks handled, approximately,
$16,000,000 in shipments of currency, gold and silver, incoming and outgoing, for Customer banks in the above outlined territory during the yaar 1S13.
The Secretary of the Treasury:
Mr. Berger:


$16,000,000, currency and gold ship&snts,

et cetera.
The Secretary of the Treaaury:

Have you any apportion-

ment of that?
Mr* Berger:

I have not apportioned that, no.


clearings for the year Ibl3, $478,333,333.
Denver haajbnly six Clearing House banks, w^ioh accounts,
in a measure, for the fact that that item is not larger.
Average deposits in all the Denver banks, —
The Secretary of the Treasury:


Are all the Denver Nation-

al banks in the Clsaring House?


Mr. Berger.

They are, yes sir.

The Secretary of the Treasury:
Mr. Btrger:

Rot all the stats banks?

Ions of the stats banks.

It is confined

to national banks.

deposits in all Denver banks, $75,000,000, 1913.


Gecrge Berger
On Ootcber 21, 1913, tha Denver Clearing louse banks had
lo*&a and re-disccunts to com try banks, $1,340,800,
The 3#cratury of the Treasury:

What did you say the

figures were for 1913?
Mr. Bergor:


The Secretary of the Treasury:
Mr. Berger:

Total deposits in the Denver banks?

The 8«.cretary of the Treasury:
Mr. Berger:

Total deposits.


$75,000,000, *Kate and National — a l l banks.

The Secretary of the Treasury:

1 aee.

And the national

banks about $37,000,000?
Mr. Bergar:


On October 21, IL 13, the Denver Clearing

House Banks had loans and re-di3Ceunts to country banks,

At that tiice the banks held cccmiercial paper,

that i s , paper they had bought in the open i arket, $2,734,000.
Th« Secretary of the Treasury:
banks re-discounting
Mr. Berger:

as borrowing of other banks?


The Stcretary of the Traasury:



How nuch of the Denver



Borrowed nothing?

. t
! \

The Secretary of the Treasury:
What time was this?
Mr. Berger:
This waeA0ctober 21st call, and I merely m#n




George Berger
ticn this about the commercial paper to ehow that Denver
baxke r.eze acle to supi-ly their h.cme demand and aiao to buy
a coz* side rat 3e in the or en market at that time.
Tre Secretary of Agriculture:

What is the time of your

heaviest ^e.and?
iir. Eerier:

The ti&e of our heaviest demand usually cones

ic the fall.
Th# Secretary of Agriculture:
borrow ir^c

On the average, how much

cb ycu have to dot
Mr, Berger:


You i..aan banks ir: Fcnveri

ecretar7 of Agriculture:

J£r, Parser:


It i s very ssldcii that tbe banke in Denver

borrow — very eeidoit.
The 8©aretary of Agriouitura:

Rave you figured out -he

c a i i t a l , I irTean the strength of this proposed regional bank?
Mr. Borgor:

Tes, I htive i:-jrc.

Assuming tr»at fa regional

baiik, comprising only national banks, for the mentioned territory, i s jplaoed in Eanver, thio bank wculd, without aubscription froit the Government or ths public, have a capital of
approximately $3,4GG,CC0 and deposits would be about

Aftii thrse years the d e c e i t s wculd increas*

to $15,00Q,C'v;C.

TLia doos not includs any air cunt of govern-


George Berger

i »ent United States deposits that would be placed in the bank;
I assume there would be


Then, assuming that all the

stats banks qualify and join the system, this bank would commence business with a capital of about (7,000,000 and with
dtpositsof about $14,000,000.
The Secretary of Agriculture:

How many of those hart ths

requisite capital?
Mr. Berger:

1 haven't got thoss figures.

The Secretary of the Treasury:

How can you make an as-

sumption jfithouu knowing that, 1 mean an intelligent assumption?
Mr. Bsrger:

No, perhaps you cannot make anAassunption .

1 an only going on the fact that this proposition

or new

plar- h*s\ bean received very favorably, and 1 think the state
banks would be compelled to come in.
Th# 8«cr<*tary of the Treasury:
Mr, Bsrger:

State banks could not qualify if not eligible.
Perhaps trus, but 1 think most of thsm will

Ths Secretary of the Treasury:
qualify if thsy ars not eligible.
the eligible banks

Ths question is that of


I know, but thsy cannot
If we had soms line upon



George Berger
Mr. Berber:

1 can give those, of course, later.

The Secretary of the Tr2asury:

We would like tc have

Do you know what the law ie with respect to the right

of the banks in this territory, —

let us take Colorado


the statc;bankf 8 to subscribe tc this stock?
Mr, Berger:

I understand it has not, —

under the present

law, that it cannot hold stock in another.
The Secretary of the Treasury:

Do you know how it is in

any of the other states?
Mr. Berger:

Nc, 1 dc net.

Th# Secretary of the Treasury:

8o that for the purjroeee

of your discussion you itust necesearily limit this wholly
tc the national banks?
Mr. Berger:


The Secretary of the Treasury:

Kow, Mr. Berger, the law,

of course, as 1 said to you before, requires this Co&mittee
to have due regard to the convenience and customary course
of the b sinesB in the different districts that *>&.? he allotted.

1 notice you have taken in here, —

take Montana to begin with.

well^ let us

To what extent has Denver com-

Bercial intercourse and relations with Montana?
Mr. Berger:

Well, 1 think that is largely the livestock
1 have no figures, because some one that will



George Berger
follow ne canbive you figures in that rsspeot.
The Secretary of Agriculture:

Should you aa> that the

nove&ent of trade is towards ffcnver or towards the east from
Mr. Bergar:

1 should think, the way it is now, it ie

rather towards the east than towards Denver*
The Secretary of Agriculture:

We had documents presented

at another hearing showing t: at 8C percent, of the banks de•ired to go to St. Paul.
T^e Secretary of the Treasury:
The Becrotary of Agriculture:
cent., to Chicago.

Fr<» Montana.
And the remainder, 30 per-

I hat reason have you for thinking that

they would like, for convenience, tc be connected with Denver?
Mr. Bexgsr:

1 have no reason.

The Secretary of Agriculture:
UT. E&rger:

Mr. Berger:

It is purely arbitrary?

It is purely arbitrary.

The Secretary of the Treasury:
district, —


In the laying out of thie

how was this, you had a committee?

The Secretary of the Treasury:

Did your eomnittee give

any consideration to the normal course of buein:se in thie
d i e t r i c t , or did you just take an arbitrary territory that




George Berg9r
you thought would be a good thing for Denver or that would
supply the required capital?
Mr. Bergar:

Of course we had to baar that in mind, Ux,

Secretary; we had to ehow the capital, and in doing that we
extended the territory perhaps further than the present courses
of trade would justify.
The Secretary of the Treasury:

Now, to what extent, when

yeu oo«e right down to the real facts, —
this Committee must have, —

and that is what
to what sxtentAwould a district

here be normally and naturally served by Denver?

1 an talk-

ing about the contiguous and tributary territory with vrhich
the bulk of the business is largely done with Denver.
area would that be?


In other words, what is the sphere of

Denver's normal influence?
Mr, Bergar:

The sphere of Denver's normal influence would

be Colorado, Wyoming, Utah and New Mexico.
The Secretary of the Treasury:
Mr. Berger:

New Mexico?

Excluding, possibly, eone part in the Pecos

The Secretary of the Treasury:

Have you any figures here

that would give us the banking capital of the national banks
in that particular territory?


Gecrge Berger
Mr. Berger:

No, I have not.

The Secretary cf the Treasury:
Mr. Bergar:

1 can.

The 8»o:et&xy of the Treasury:

Could you give us that?

1 observe you have con-

the west-em half of Nebraska in this district.


testimony v;as submitted to us at Lincoln, which showed practical unanimity of sentiment in Nebraska for attachment of
Nebraska tc the On aha district.
Mr. Berger:


The Secretary of the Treasury:

And people in Guana, cf

the Chanber of Commerce, they asserted that the normal courses
of trade throughout Nebraska are eastward to Omaha and Chicago.
Mr. Berger:

1 think that is true.

Western Nebraska, howf-

ever, and Western Kansas do some banking business in Denver.
The Secretary of the Treasury:

I understood froir; your

•tatetent that there are relatively very few banks that have
their accounts in Denver,
UT. Eerger:

Yes, vary few.

Tie Secret ry of the T*eaeuxy:

Now, as to Texas, 1 be-

lieve you stated that none, or that in Oklahoma, no banks in
Oklahoma had an account here!
Mr. Perger:





George Esrgar
The Secretary of the Treasury:

And Western Oklahoma, I

can understand that, because, of course, the railroad lines
here trend wholly to .<aneas City 9nd towards Chicago.
connections tith Denver are vsry bad.


Now, as to Western

Texas, you have got about hal?* th« State of Texas here.
Th« Secretary of Agriculture:
The Secretary of the Treasury:

Ho, not half.
Well, fully a third cf

Tou have got the entire Panhandle and this part west

of dan Antonio.
T^e Secretary of Agriculture:

Practically nothing ex-

cept £1 Paso, in point of commercial importance.
Th# Secretary of the Treasury:

Yes, but 1 an; speaking

of the area that ie embraced and of the courses of business
thr ugh that territory, the transactions and the trade, that
is where?
Mr. Berger:

I think the Panhandle we might consider our

territory, on account of the railroad line running down to
the Panhandle.
T^e Secretary of the Treasury:

You mean the Colorado 4

Mr, Berger:
of tine.

Yes sir, in point of accessibility, in point



George Berger
The Secretary of the Treasury:
Mr. Berger:

You mean the northern part?

The northern part, yes.

The Secretary of Agriculture:

That is largely a cattle

Mr. Barg^r:


The Secretary of Agriculture:

Do thO3e cattle cor.e to

Deny6r or Chicago or Kansas City?
Mr. Berger:

It is divided.

The Secretary of Agriculture:
Mr. Bergsr:

To what extent?

1 cannot tell you.

The Secretary of Agriculture:

It would be very valuable

to have that.
Mr. Berger:

I imagine Mr. Ricqles, who follows me, can

give you figures.
The Secretary of Agriculture:
Mr. Berger:

You have included Arizona.


The Secretary of Agriculture:

Does that business come

to Denver or to the West?
Mr. Bergsr:

It does not oome to Denver direct.


we have soae business in Arizona, a good deal of that busi*

neea koes to El Paso.

ft have included £1 F so in our dis-

trict, because El Paso £et8 that Hew Mexico business, and I
think it is fair to take in Arizona on that question.



George Berger
The Secretary of the Treaeury:

Doee not more of the

Arizona business trend towards California?
fcr. Berger:

I cannot say; not sufficiently informed

about that.
The 8ecretary of the Treasury:

le to Utah, how about

Salt Lake City?
Mr. Berger:

Salt Lake City carries a great deal of money

in Der.ver, to a ^reat deal of banking business in hare.


thin) Denver does a great deal of clearing for Bait Lake City
through the eastern cities.
The Secretary of the Treasury:

Salt Lake City is a re-

serve city and she would not carry very large balances ordinarily in Denver, which would not count as reserve.
Mr. Berger:

Perhaps not, but they have carried large bal-

ances in Denver, and they do now.

1 think it is for exchange

purposes and for purposes of convenience.
The Secretary of the Treasury:

For purposee of conven-

Mr. Berger:


The Secretary of the Treasury:

Do you know to what extent

Salt Lake City carries; reserves in other cities?
Mr. Berger:





George Berger
Th# S e c r e t a r y of t h e Treasury:

Where would they normally

go t o , t o C h i c a g o , wouldn't t h e y t
Mr. B e r g e r :

1 s h o u l d think they would go t o Chicago.

The S e c r e t a r y of t h e Treasury:

Where doee Denver c a r r y

her reserves?
Mr. Berger:

Mostly in Chicago.

The Secretary of the Treasury:
Mr. Berger:

To what extent?

It would only be a guess.

1 should say we

carried three-quarters in Chicago.
The Secretary of the Treasury:
Mr. Berger:

75 percent.?


The Secretary of the Treasury:

Where do you keep the re-

maining 35 percent.?
Vr. Berger:

St. Louis and New York,

The Secretary of the Treasury:

Of course you understand

that this bill provides that there shall be branch institutions?
Mr. Berger:

I do.

The Secretary of the Treasury:

And the districting is

»ade mandatory upon the Federal Reserrs Banks.


that it was not practicable, and 1 state that with reference,
of oourse, to the fundamental economic conditions, — as sun



George Berger
ing that a bank headquarters, however, could not be located
1 B Denver, what would Banverjs ehoioe then be as to the headquarters for a Federal Reserve Bank?
Mr. Berger:


1 should say, Chicago.

T n e 8eoretaxy of the Treasury:

Be Chicago.

No*, as be-

tween Omaha and Kansas City, what would it be?
Mr. Berger:

1 couldn't say.

I don't know.

I hare not

considered that sufficiently.
The 8eoretary of the Treasury:
Mr. Bsger:

How about 8t, Louist

I think Denver would prefer Chicago to 8t.

The Secretary of t e Treasury:

The normal course of your

business transactions is ror© with Chicago than 8t. Louis,
of course?
Mr. Berger:


The Secretary of the Treasury:

But if it is not practi-

cable in the division of the country to throw this territory
into either Chicago or the 8t. Louis district —


that districts are oreated there, which is not, of course,
yst determined — and than Omaha and Kansas City were under
consideration, the Coaaittee would like v ry m e n to know
where Denver would be most convenience*! in those circumstances?




George Berger

Mr. Bsrgar:

Personally, 1 •hould say Omaha, but I can-

not speak for anybody else; other bankers might have different opinions.
T&e Secretary of the Treasury:

That Is your personal

Ux* Berger:

My personal view.

The Secretary of the Treasury:

I want to say now, In or-

der that there may be no misunderstanding, that the questions
asked by the Committee are not indicative of any trend of
thought at all upon this proposition.

We ask questions in

order to bring out the facts and no inference must be drawn
that the Committee has any view whatever upon the proposi-


tion, becauss we don't know anything, have no opinion until
tbs facts are in from the entire country, and we ask the question in all these cities, what would be their choioe if they
oould not thsnselves be the headquarters for one of the Reserve Banks.

Mr. Jones put in his statement here and went

on to say that a branch bank oould not serve Denver.

Now, \

what is your view of that?
Mr. Berger:

My view is the sane as Vr. Jones'.

1 think ,

that a branch bank would be, of course, under the oontrol of
the parent bank.

Any questioning or tanceJL imagine, would go


George Berger

to the head of the bank fcr decision, and it might involve
might at times be very dangsrous, this question.


1 dcn't

j believe that a banking management sitting in Chicago


hare any knowledge of our collaterals.
The Secretary of Agriculture:

Who wculd manage the parent

Mr. Berger:

Who would manage the parent bank?

The Secret ry of Agriculture:
Mr. Berger:


1 presune the directors.

The Secretary of Agriculture:

Where would they be 8el3Ct-

ed fro^T
Ir. Berger:

They would be drawn from the district.

The Secret ry of Agriculture:
Mr. Berger:

The entire district?


The Secretary of the Treasury:

Now, if the headquarters

bank, including Denver, were located at Omaha, say, or Kansas City, merely to illustrate the point, and the directors
of that bank would be drawn from the entire district, undoubtedly Denver would have re.reservation upon that Board.
Now, the director* of the headquarters lank would be less
local to Omaha or Kansas City, as the case might be, eay? of
the Federal Reserve Bank, that is, the headquarters bank,



George Berger

than would be the directors of the lccal bank, because in
the nature of thinge the d rectors of the branch bank would
be more intimately associated with the more restricted district which that branch serves.

In those circur.stances,

you would likely have a larger representation on the Board
of this branch bank than you would have on the Board of the
Federal Reserve Bank itself.

Due to the familiarity with

the lccal conditions, and they play a very important part
in nt' at oases, you would naturally have on the branch bank
board of directors a larger representation familiar with
local conditions than you would have on the board of directors of the Reserve Bank itself.
Mr. Berger:

1 realize that, Mr. Secretary.

I believe

that it would give the final say where that money shall be
loaned to the people at the he**d bank, net the branch
The Secretary of the Treasury:

Th# branch bank will, of

course, have v ry large authority under the Act, for it is
controlled by a board of seven directors, and it is tht purpose of the Act to give it adequate authority to deal prompt-!
ly with conditions by telegraph and telephone, bringing these
inetitutions into intimate, close and quick touch with each


G3orge Berger
othjr, that nc delays of consequence are likely to arise,
except upon very large questions of policy, but upon the ordinary business of re-disocrant these Reserve Banks are exercising largely

re-disoounts between the member banks

acting as fiscal agents for the government.

l»n!t that the

normal course?
Mr. Berger:

Tee, but I still say that if there is not

enough money to 50 around aaong all the points, there might
be times of great stringency and the conditions surrounding
the branch bank wculd be bad at that tiae.
Tn« Secretary of the Treasury:
Mr, Berger:


Ihere that branch bank wo-Id take care of

the immediate territory*
The Secretary of Agriculture:

Why, if, under this bill,

these directors are drawn from the tehole district?
Hx* Bergsr:

There are nine directors.

Tho3e nine di-

rectors include a v^ry large district, and we might have nc
director on that board from C iorado; might come froc. some
other part of the territory,
The Secretary of


And another part of the

district might not have one?
Mr. Berger:


The Secretary of Agriculture:

80 that your argument


George Berger

would apply to one city as well as to another.
T^e Secretary of the Treanuryt

Now, on the other hand,

in 6ase the reserve bank of the district was to —

if th^rs

was not enough money, as you suggest, and an exigency presented itself, it would reaort, of courss, to its power*
under the Act, either ask some other restrv* bank to rediscount its paper, or else Lake a.-lication to the Federal
Reserve Board for issuance of currency.

The issuance of

currency in those circumstances vould be based upon the
eligible rapar required by the Act, and if the Denver banks
could supply that paper and some other banks could not, thsy
woe Id undoubtedly p,et their roney, because it is not going
to be handed around as a matter of accommodation, it is going; to be dealt with as a business proposition.

Bo that,

so long as the banks in Derver in t oae circumstances could
produce eligible paper required, paper and gold reserve required by the Act, you would get no relief froa. the Federal
Reserve Board.

The purpose of the bill is to prevent tvat

kind of contraction and constriction that the country has
suffered froE heretofore.
This tsrrttory, as you have laid out, the capitalization
dees not produce the amount of capital required by the Act?



Gecrge Berger
Mr. Berger:

Nc, it doss not.

The Secretary of the Treasury:

And if you limit the terri-

tory still further to the legitimate sphere of Denver^ terriI tory, —

1 r..3an Denver's trade influence, you would have a

very small and weak institution hsre, one li ely to be unable
to take oare of the legitimate demands that eight be made
upon it, sc that it would have to take care of what we call
a 86 80' able der.and.
Mr* Berger:

I realize that of course the smaller the

territory, though, the sraller the derrand.
The Secretary of the Treasury:
limiting territory!

What is your thought in

^hat have you aseuned to be the divi-

sion cut into districts, eight or ten or twelve »*
Jir# Berger:


Assumed eight districts.

The Secretary of the Treasury:

Is that ycur judgment,

that it would be better to have the minimum number of districts?
Vr. Berger:

It i».

The Secretary of the Treasury:
Mr. Berger:

Than the :,axiL:ur.?

It is.

The Secretary of the Treasury:

If you restricted Denver1a

territory to the scalier area you described, you would produce a T^ry weak institution here, which would very likely


I E8H





George Berger
have to be very largely a borrcwing institution, would it
Mr. Berg-ir:

I ai not so sure of that.

I ti ink that if Wl

can judge by the fdct that the Denver banks hare not been
borrower*, have nevsr rsaliy bean borrowers, that we c.ifcht
draw the infarjnce thatAregional bank would not naed a vary
large capital.
!**• Secretary of the Treasury:

Isn't it your idea t'at

division of the country into districts, these regional banks,
these com* unities should, so far as possible, be cade selfcontained and as nearly equal in financial strength, so that
they i.ay, as far as possible, take cars of the normal conditions in their respective districts?
Mr. Berger:

So far as possible, 1 think they shculd take

oars of their own particular districts,
Tn# Secretary of the Treasury:

l«t me aek you, bow


you regard ths trend of oomnarcial transactions, so far as
Denver is concerned, —

it is undoubtedly eastward and north-

Mr. Berger:


fke Secret.try of ths Treasurer:
Mr. Berger:


I believe you said that?


Secretary of the Treasury:

Would it not be better for



Oeoxge Bergsr

the benefit cf trie weetsin country to lay this district
out, definitely preserving the norial courses of business and
making a stronger financial district than the one you propose

I i;2an for the benefit of this section, isn't it

better to have a district with, if possible, a counterpoise
or borrowing end, as against a veil developed lending end,
so that the one may feed the other and that the normal business transaction ray be preserved and conserved?
Mr. Berger:

I am not so sure.

here which ie north and south.

Of course we have a line
The territory comprises

industries of great diversity, and it seems tc me that you
would have a more even der. and for money in this territory,
taken ae a whole, than you would if it *as laid out the other

If you laid it out the other way, —

go to Chicago

or Omaha, and the demand comes at one time of the yaar thsre,
in the fall.

1 think in this territory there would be a

very even demand.
The Secretary of the Treasury:

Any greater diversity

east and weet than over the strip lying north and south?
You are na ing an argun.enf or, rather, X(r. Jones did, 1 think,
about the v ry gr-at importance of the Hnited States iUnt
here because of the Ability to distribute currency quickly
 over a

given district.

That implies accessibility from


George Eerger
all parts of the district, rapid and quick communication.
Thia district, as ycu have laid it out, is net at all accesible in the highest degree tc Denver.

There are parts of

it that are quite remote in the matter of transportation.
Mr. Berger:

Our map shows the 24 hour limit; this green

circle (indicating) represents 34 hours' servic

fron. Denver.

It is true that Montana and Texas are a long way from here
in point of time and distance, tut what ether point are they
closer to?
The Secretary of the Treasury:

I think Montana is un-

doubtedly closer tc St. Paul and Minneapolis, the bulk of it,
low, the great trunk lines of railroads which cross Montana
east and west furnish very ra-id and quick service tc St.
Paul and Minneapolis, and undoubtedly the natural trend of
business in that territory is to those points, and it would
do great violence, According to the testimony alre dy submitted if it were attached to a iistrict lying south; in
other words, the mandatory requirements of the Act would
prevent us from attaching Montana, (unless ether testimony
were exhibited later on, in addition to what has already
been presented) for attaching Montana to the Denver district.
The Secretary of Agriculture:

We hare net heard, Mr. Ber-


George Berger

gar, but suppose that we find that Arizona .business trends
to some other point and Vontana business i© to socie other
point, and in view of the fact that there has been practically unani. ous representation that all of Kansas and Nebraska oujht to be attached tc e:3t rn points and we should
be ccrjelled, by those rei reservations and in conformity
with the law, to connect ther with othar points, then what
sould you suggeet?

Wo Id you think it better to hare

that constricted area or to have a larger area that would
put you in a district t at would have a strong bank, one of
con3iierable banking po*~ar?

Of course you know that under

the Act it is the intention that these districts shall be
nominally independent.
Mr* Berger:

1 ehould rather see Penver hare the one

©ttdiler district or smaller cubital,

1 don't think we can

consider the present entirely; I think we have got to look
to the future.


The Secretary of Agriculture:

We will >ave to do that

lover the whole country, not merely on9 section.
yr. Berger:

True, but we are in the center here of a

country that is only partially developed, a country of tremendous resources, and the next decade will see tremendous



George Berger
changes in the whole question.
The Secretary of Agriculture:

You understand that a scali-

er banking area would give you smaller banking power?
Mr. Berger:

1 understand it.

T^e Secretary of Agriculture:

And it i^the question the

Secret ry a3ked, whether or not,for the development of this
section, it would be bettsr to have a larger area and a stronger institution.
Ur« Berger:

I think for the development of this section

it is better to have Denver a regional bank than to have it
attached as a branch to some other bank.
The Secretary of Agriculture:

Now, if that area were

limited, you would probably have a banking capital of leas
than three rillions, wouldn't you?

Mr, B3rgar:

Tea, we would, if you confine it to national

banks alone.
The Secretary of Agriculture:

And reserves and deposits

of -Vx. Bergar:

1 have no figures on it.

The Secretary of the Treasury:

This bill provides for the

paxring of exchange between these federal reserve banks when
this syster. is in operation, and the reserve provisions of




George Berger
the i.ilJ. have been complied with, so it ia not n3Cess;iry to
keep reserves with aiiy other city.

To what extent do you

think, then, it ia gcing to be necessary to keep balances
in the present central reserve cities for purposes of exChangs?
Mr, Berger:

Well, speaking for the Denver banks alone,

I think Denver banks would keep accounts in Chicago and in
lew York, unquestionably.
T^e Secretary of the Treasury:

Even though the exchange

of the district in which Denver might be located would pass
at par anyvrhere, ycu think it would still be necessary?
Mr. Berger:

Yds, 1 think so.

The Secretary of the Treasury:

1 will you a ques-

tion vrhich 1 would like the Clearing House of Denver to consider for us.

1 will read this part of the Act:

8ection 13 of the Act provides, arong other things:
•Uj on the indorsement of any of its t.ember banks, with a
waiver of demand, notice and protest by such bank, any Federal Reserve Bank icay disoount notes, drafts and bills of exchange

arising out of actual commercial transactions; that

is, notfis, drafts and bills of exchange issued or drawn for
a6ricultural, industrial, or ccmrcercial purposes, or the pro


George Berger
oeeds of w) ion have been used, or are to be used, for such
purposes, the Federal Reaarve Board tc have the right to
determine or dsfine the charact3r of the paper thus eligible
for discount, within the meaning of this Act.1
We Bdould like to have the Denver Clearing House, —


we are asking the same question everywhere and also of the
commercial bodies interested, to consider that section of
the bill very carefully, and to a brief to the Committee within the next twc or three reeks giving us ycur
definition or your suggestion of a definition of the meaning
of coirxiercial .aper, under this Act, and also, as far as possible, suggest to U3 a standard form of nctes, drafts, and
bills of exchange, as related to the different forms of commercial transactions.
Kon# for instance, you h«ve, as I understand it out hare,
cattle i aper, as we call it, cattle paper?
Mr, Berger:

Cattle paper, yes.

T^e Secretary of the Treasury:

We wculd like your sug-

gestions as to what should be a standardized form of such
paper, what it should contain, so that it might be adopted
as a standard, commercial form for banks.

Such standard-

ization would be very useful in transactions between member



Beorge Berger
banks and the Federal Reserve Banka hereafter.

Will you

be kind enough to do it?
Mr. Berger:

We will do that, Mr, 8«cretary;

The Secretary of the Treasury:

Section 16 of the Act

alto provides, among other things:

"The Federal Reserve Board shall make and promulgate fro*
time to tine regulations governing the transfer of funds
and charges therefor among Federal Reserve Banks and their

i branches, and nay,at its discretion, exercise the functions
Of a clearing house for such Federal reserve banks, or may
designate a Federal reserve bank to exercise such functions,
and may also require each such bank to exeroise the functions
of a clearing house for its member banks."
We should be glad if the Denver Clearing House would o n sider alao that aspect of the natter and submit a brief or
suggestions as to what, in your judgment, would best facilitate carrying out the purposes of the Aot.

(Mr. Beggar excused.)

(The map, so identified, marked "Berger Exhibi t He. 1, Denver, January 3 6 / 1 9 1 4 . )
(Paper used ae basis for testimony, so identif i e d , marked "Berger Exhibit Ho. 3, Wfcver, January
36, 1914.")



Statement of

Alexie C. Foster

The Secretary of the Treasury:

Mr. Foster.

Give your

name, Mr. Foster, and occupation.
Mr. Foster:

Alexis C. Foster, dealers in investment

bonis, Denver.
The Secretary of the Treasury:
Mr. Foster:

Give your firm name.

Causey, Foster & Company.

The Secretary of the Treasury:

Dealers in investment

Mr, Foster:

Yes sir.

The Secretary of the Treasury:
fronting the Oomrrittee.

You know the problem con-

If you have any light that you can

shed upon it, we will be glad to hear from you.
Mr, Foster:

I have prepared a very short report, if you

care to have me read it.
The Secretary of the Treasury:

Yes, you may read it, or,

if it is wholly statistical, it may be filed as an exhibit.
Mr, Foster:

It is not wholly statistical, either.

The Secretary of the Traasury:
Mr, Foster:


Read it.

The undersigned committee, re-

presenting Denver Bond Dealers' Association, offer the accompanying figures, which we respectfully beg to state provt
Denver to be the most important banking center between St,



Alexis C. Foster.
Louie and the Pacific Coast.

In order that we might lay

before you actual figures rather than estimate*, we submitted
to forty-six houses in this city, dealers in investment s e c u r i t i e s , uniform blanks which we asked them to f i l l out
from their books, showing their purchases and sales during
the years 1»12 and 1913.

Twenty-eight houses responded as

Eighteen houses, large and small, for one reason

or another, were unable to furnish us statements.
Is have tabulated the figures taken from the books of the
twenty-eight houses.

We have made an estimate of the trans-

actions of the eighteen houses.

We have aggregated the ac-

tual figures and our estimates, and they show a grand total
of $164,968,924 of purchases and sales of investment securi t i e s by Denver houses for the years 1912 and 1913.


i s an average —
The Secretary of the Treasury:

We ought to be able to

collect some income tax out here.
Mr. Foster:
average of

1 believe you w i l l ,

1 am sure.

This is an

$82,484,462 per y^ar, or at the rate of more than

a quarter of a million dollars eaoh business day.
The figures do not include mining stocks and bonds, nor
any securities primarily speculative.



Alexis C. Foster
Now, our statement shows bona fide inv^atn.ent transacticna
in corporation stocks and bonds, municipal bonds and warrants,
irrigation bonds and securities, commercial paper, city and
farIL loans dealt in as investment securities.

All figures -j

indicate market value, not par value, and show actual amounts
in cash.
The above figure* refer to the general importance of Denver as an investment banking center.

For the information

of your Committee, *e have totalled the transactions in investment securities of Denver houses for the years 1S13 and I
1913 in the regions made up of Colorado, New Mexico, Arizona,
Utah, luaho, Montana, Wyoming, Western Nebraska, Western Kansas, the Black Hills section of South Dakota, the extreme
western part of Oklahoma, the Panhandle and the western
triangle of Texas.

These figures show total purchases and

sales in that region of $104,878,6b3.
The Secretary of the Treasury:

Have you got it divided

by states?
Mr, Foster:

Yes air.

T&e Secretary of the Treasury:
Mr. Foster:

Will you have the totals or —

The Secretary of the Treasury:

Read it, will you?

Just the totals in each



Alexis C. Foster.

Mr, Foster;


1912, $16,000,000.


Total purchases for the year

1 will leave off the odd amounts.

Tne Secretary of the Treasury:
Mr, Foster:


Sales in the same territory, $16,000,000.

In 1913, Colorado:

Purchases were $14,000,000, odd, and

the sales, $16,000,000, odd.
In the State of Ptah, the total is $829,000, purchases in
1512; sales in that state, that is, investment securities
in that state for the same year, $779,000.

In the year

1913, purchases, $926,CCC; sales in that state, $463,000.
Th© Secretary of the Treasury:

Business men don11 seem

to be quite agreed about 1913, according to your figures.
Mr. Foster:

We haven't any falling off in investment se-

curities in 1913.
The Secretary of the Treasury:

There seams to be a sub-

stantial growth there.
Mr. Foster:

1 think you will find that it shows up very

well with the year before.
Montana shows total purchases for 1912 of $340,000, and
the sales in Montana of the same y?ar, $167,000.

Purchases ,

in 1913, $294,0C0, and the sales in 1913, $259,000.

Purchases for 1912 were $3,139,000; sales in



Alexis C. Foster.

California for the same year, $1,837,000.

Purchases in Cal-

ifornia for 1913, $645,000, and the sales for the same year,
lew Mexico:

In 1*13, purchases $13b,000 and the sales #173,000.


Purchases for 1S12, $101,000, and the s a l e s ,

Purchases in 1S12, $1,993,000;

ales, $1,970,000.

purchases, *48b,GCC, sales, $603,000.


Idaho, — and by the way, Mr. Secretary, 1 would like to

say that we have always had a very large business in Idaho,
especially in municipal bonds; I believe the bond houses in
Denver have furnished considerable more than one-half of the
municipal bonds that have bsen issued in thatsfate.
The Secretary of the Treasury:

These securities, I was

going to ask you a little later, are the bulk of them municipal or corporation?
Mr. Foster:

I have them all here tabulated.

Th« Secret ry of the Treasury:

You need not go through

the tabulation, but the percentage would be about what, the
percentage of municipal an* of the corporation securities?
Mr. Foster:

In Idaho?

The Secretary of the "reaeury:
Mr, Foster:

Take the total,

Total purchases in 1913 of municipal bonds




Alexis C. Foster.
were $11,COO,OCC, and the total purchases of corporation
bonds dealt in was $16,000,000,
The Secretary of the Treasury:

That answeisit.

1 think

that covers about what 1 wanted to ask to get a line on the
distribution through these c i t i e s .
Mr. Foster:
last year.

For instance, laaho, we purchased $1,794,000
In Washington, we purchased tl,746,000,

The Secretary of the Tr3asury:

What did the sales air.ount

Mr. Foster:

Sales in the State of Washington were

$385,000 for the year 1912, and $331,000 for the year 1913;

and in Idaho, the sales were considerably larger than that,
The Secretary of the Treasury:

You may proceed with your

main argument.
Mr. Foster:

That, Mr, Secretaries, completes this report.

The Secretary of the Treasury:

1 f»ee.

Will you kindly

f i l e that as an exhibit to your testimony?
Mr. Foster:

Would you like one copy of three copies?

The Secretary of the Treasury:
(The papers, so identified,

in triplicate,were marked

•Foster Exhibit No, 1, Denvsr, January

36, 1S14.)


Alexis C. Foster.
Mr. Foster:

1 would be very pleased to answer any ques-

tions which you might wish to ask me.

We have separated

here actual figures from the estimated all the way through.
The Secretary of the Treaeury:

That is all, thank you.

(Mr, Foster excused.)
The Secretary of the Treasury:

The next w i t n e s s , Mr.

The Secretary of the Treasury:

Give your f u l l name and

Mr. Eda.onds:

J . Frank EdrcondsIA F i f e Insurance Companies.

I was not c a l l e d u n t i l t h i s morning, therefore 1 w i l l be
pardoned f o r reading what I hare gathered here.
The Secretary of the Treasury:

What kind of insurance

is it?
Mr, Edmonds:

Fire insurance and loans.

The natural

and recognised fire insurance centers of the West, are
Chicago, Denver and San Francisco.

3o thoroughly is this

acknowledged that over thirty-five fire insurance companies

^anagsrial departments in Denver, while eighty-five

other companies maintain offices in Denver for their traveling representatives and for their loss adjusters..



J. Frank Edmonds.

The Secretary of the Treasury:

You need not take this

down; it will be filed as an exhibit.

How far this question

of fire insurance indicates the trend of trade and coLjnerce,
it is pretty largely a local question, a few houses?
Mr. Edmonds:


This is very short.

The Secretary of the Tr3asury:
Mr. Idmonds:

Read it,

In no other city in the region are there

such departments.

This is caused by the recognition that

Denver is the logical point for handling the business, not
alcne for Colorado, but for the surrounding states.
Tie Secretary of the Treasury:
Mr. Edmonds:

Colorado, Wyoning, New Mexico and TTtah.

We handle from here

Utah, Arizona, North Dakota, South Da-

kota, Hebraska, Kansas, Oklahoma.
little later.

What surrounding states?

1 will deal with that a

The fire insurance premiums of Colorado,

Wyoming and New Vexieo amount to over $4,000,000, the majority of which passes through Denver, as do also the preBiums for other adjacent states.

There is one department

alone in Denver which handles over $600,000 in premiums annually.

The entire fire insurance business for the States

of Colorado, Wyoming, New Mexico, North and South Dakota,
Kansas and Nebraska, not only premiums, but the payment of

W H


J. Frank Edmonds.
losses is handled in Denver for ssven companies.

In addi-

tion, the premiums for ntah, Idaho, Montana and Oklahoma are
handled by one or core departments.

Premiums fron other

states also cone to the Denver departments, but as these are
outside cf the region fcr which Denver is asking a regional
bank, they are omitted from this presentation.

The premium*'

of one depar'irent in Denver alone are greater than the entire operations of any one of 174 companies for the entire
United States.
In addition tb the premiums, most of the losses are adjusted by c.en residing in Denv r, and a large proportion of the
loss drafts pass through Denver banks.

Although the region

of which Denver is a center is one of the most sparsely inhabited in the entire country, there are in Colorado, Wyoming
and Hew Mexico alone over three thousand agents, all of which
report to Denver,

The recognition of Denver by the insur-

ance world ae the geographical and financial center for the
convenient and economical handling of its business is further
evidenced by the manner in which the development of the counia
try and states around BenverAbringing to this city the executive and financial departments of all classes cf insurance
companies for the collection of premiums, the payment of loss

es and the investment of funde.

This cannot be said of any


























J . F r a n k Edmonds.
other city in the entire region from Missouri to the Pacific.
I trust your Committee will take these matters carefully
into consideration and that Denver may receive the regional


bank which i t s geographical position, no less than i t s present
financial operations would demand for i t .
(The paper, so identified, marked"Edmonds Exhibit

1, Denver, January 26, 1S14.")
(Mr, Edmonds excused.)

The Secretary cf the Treasury:

Mr. Osgood is the next

The Secretary of the Treasury:

Give your full name, Mr.

Osgood, your occupation and residence,
Mr, Osgood:

John C. Osgood.

I reside in Redstone, Colo-

My business is mining coal.

The Secretary of the Treasury:
Mr. Osgood:

What is your company?

Victor-American Fuel Company, the Company

1 represent.
The Secretary of the Tr3aeury:

You are familiar with the

problem confronting the Committee, Mr, Osgood.

Will you

kindly address yourself to any facts that will help the Committee in arriving at a conclusion.




John C, Osgood.

Mr. 08good:

1 have baen requested to con/cine several

subjects, Vr. Secretary, connecting coal and coke, iron and
s t e e l , Portland cer.ent. o i l and marble, mineral products of
Tn« yea* 1813 has not been U3ed on account of the strike
which interrupted the operations fomr months of this y^ar.
In the year 1913, Colorado

roduced 10,977,834 tone of

coal and coke, having a value at the mines of ?16,345,336,
This production was 38 percent, of a l l the coal produced in
the western half of the Hnited States (-vest of the lC'th Laridian).

This coal and coke was distributed approximately

30 percent, to railroads for usein and out of the state, 30
percent* was used in the state and 50 percent, vtas shipped
to points in Arizona, California, Idaho, Kansas, Mexico, Montana, Nebraska, Nevada, New Mexico, Oklahoma, Bcuth Dakota,
Texas, Utah, Washington and Wyoming.
Companies and individuals doing S5 percent, of this business have their headquarters in Denver and transact their
banking business here, as do companies producing 30 percent,
of the coal output of New Mexico,
* The tonnage of ccal nined in Colorado hae more than doubled
every ten year pariod since the industry was started.




John C. Oegood.

territory contiguous to Denver and including Colorado, Wontana, Hen Mexico, Utah and Wyoming, produced in the ysar 1S13,

37, £47,416 tons of coal and coke, having a value at the mines
of $43,635,131.

This production was 88 percent, of all the

coal and coke produced west of the 100th rraridian.
T^e Secret ry of Agriculture:
Mr. 0s b 0'u:

How much i3 that?

8- percent, of all the coal and coke pro-

duced west of the 100th meridian.

The remaining 11 percent,

was produced in Washington, California, Idaho, Nevada, Oregon and Alaska, (outside of Washington only 56,000 tons were


The Pnited States Geological 8urvey estimates that Colorado
coal lands contain 371 bullions, 770 millions tons, and in
the territory including Colorado, New Vexioo, Utah, Wyoming
and Montana, 1,450 billions tons,or fcr Colorado 11 percent,
and for the five states 46 percent, of the coal reserves of
the Pnited States (exclusive cf Alaska).
1 have a statercent giving facts and figures with reference
to the business and its centralization, so far as it is centralized in Denver and this vicinity.

1 have no further

memoranda in regard to coal and coke.

Any questions you

would like to ask, I should

e glad to answer them.


John.C. Osgood.
The Secretary of the Treasury:

To what extent is that

financed in Denver?
Mr, O*good:

All of the Coloraco business and 1 should eay

a large ^art of the Nsw Mexico business and some of th« Utah
business is financed in Denver.

The bulk of the coal is

lew Mexico is mined by three companies; one is a New York
co: pany, "the Phelps-Dodge int rests; one is a company which
has its headquarters locally in New Mexico and banks at Raton.
I think it does its out of town business at Denver; ir.directly, it is financed in Denvar.

Outside of one of the large conpanias, this busi-

ness is local, copper, dene in Salt Lake City,
The Wyoming business, the largest producer is the Hnion
Pacific Railroad, and it is financed through its general organization, and the remainder is local at Cheyenne, Rock
Springs and at various points in Wyoming, and in Montana the
business is financed locally or in the Northwest, St. Paul.
So far as Cclcrado is concerned, it has now direct connection
on Montana business, and *• have simply covered it because
cf the contiguous territory.
The Secretary of the Treasury:
subici tt


Ha v « you anything else to



John C. Osgood.
. r. Oflgocd:

1 have steel and iron.

The Colorado Fuel

& Iron Cor.pany is a strong, conservatively conducted corporation, \7ith a large surplus that is deposited in Colorado
banks and it directly eupjliee all the rails, or the bulk of
the rails, for railroad building and renewal -vest of Vissouri River and some portion of their rail3 go east of the
Missouri River.

There is no other plant of similar charac-

ter west of Chicago and St. Louie.
The Secretary of the Treasury:
Mr. Os^ocd:

And there are small blast furnaces up in

the Northwest, in Washington.
The Secretary of the Treasury:
Mr. Osgood:

Yes, we know,

is there anything further?
1 think of nothing more.

1 have the oil industry,

I haven't been

able to boil this down.
The Secretary of the Treasury:
prefer to have it filed.

That is statistical.

It is not possible to carry these

figures in our heads.

If you prefer to put that in the

record, just give us the volume and the area covered.
Mr. Osgood:

There are about 40,000 acres in Colorado in

operation and under development for cil purposes.


has been one oil com any in operation in Frer ont County
since 1889, which has produced nearly 8,000,000 barrels of



John C. 08gcod.


The value of the oil produced in Colorado list y^ar

was about $500,000.

Ths total production of crude oil from

the Salt Creek, Wyoming field in 1913, was 8,200,000 barrels,
estimated value about $5,000,000.

There are seven refiner-

ies in the Rocky Mountain territory.
ters in Denver.

Ail this headquar-

The companies owning and operating both

the Wyoming and Colorado fields have their headquarters here.
These c.irj-aniss furnish their products tc distributing companies located in Penvar, the Continental Oil Com:any, Texae
Oil Company, Great Western Oil Company, and others who market
the products frorr Penver throughout the territory west of
the 100th rr.eridian.

They do about ten million dollara vorth

of businaae in the territory of which Penver is haadquartere
and financing center.
The oil reserves of the territory are supposed to be exceedingly large, the United States government having segregated about 3,793,000 acres in the Rocky Mountain district
as supposed oil territory for future requirements of the
The Secretary of the Treasury:

Have you soaetliin* on

Mr, Osgood:

Yes, 1 have also something on marble and on


John C. Oegood.
Portland cement.

The marble business of Colorado has been

d«T»loped by the Colorado Yule V^rble Company in Gunnison
County, where they have expended $4f300,000 in quarries and
plants, and that $4,000,000 is comparatively new business,
Tn#y have distributsd their product largely throughout the
United States.

The new Pcetoffice at Denver is built of

their marble, and ai/ong other buildings which i t supplies
in different territories which i t s products can reach is
the interior of the Municipal Building, in New York City,
the interior of the Court House at Cleveland, and at Youngstown, Ohio, the exterior of the Denver Postoffice and State
Museum buildings, at Denver, and uany other large and important govsrni: ent and private buildings.

The supply i s

practicably inexhaustible; aprroxi^ateiy two billion cubic
feefcieveloped already by the workings, with business done
and the prospecting of the d r i l l s , and they are prospecting
a ia rge amount rr.ore, — a business which ought to grow very
rapidly, and i s growing.

It is financed in Denver, i t s

headquarters are here and a l l i t s business is here.
The Secretary of the Treasury:

Doas that cover a l l you

have to 3ay, )*r. Osgcod?
Mr. Osgood:

1 think that covers a l l the subjects that



John C. Osgood.

have beet given to me.

I will be v?ry glad to file the

(Papers, so offered and identified, were marked
•Osgood Exhibit No. 1, Denver,Colorado, January 26, 1S14").
(Mr. Osgood excused.)
Mr* de Ric^les:

I am going to ask if you won't grant

me a special ^rivilege.

I have prepaid a map of this west-

ern country out here, and if you will permit sr.3 to show on
the map our transportation facilities, where our cattle originate and where they go, and also in connection with sheep,
I wouid appreciate it vary n.uch.
wall map)

(fitness refers to large

This is Vontana (indicating) and this is the

city of El Paso (indicating).

Now, Mr. Secretaries, 1 \as

just thinking,coming down here, of one transaction our company, the American Livestock & Loan Company, has had this
ysar in connection with a bunch of two thousand four-year
old steers that originated down hsre in Texas, passed through
Denver and up to a \lace called Sugar City, Idaho, where
they are on feed, and thoee cattle are going to Tacoma, Washington, and probably most of their, are going to Alaska as live



A. E. de Ricqles.
cattle, and that transaction, involving the feeding of two
thousand four-year eld 3teere

ith sugar factory refuse,

beet pulp and the hay and molasses, is being financed in
Denver; the cattle originating in Texas and going to Tacoma.
This range country can be divided into two parts, that is,
the producing country and the consuming or finishing country,
The States of Arizona, New i'exico and the Panhandle cf Texas
and perhaps part of South 2 m Cr lor ado, can all be called a
producing country of sheep and cattle, and they havenft got
the feed down in that country to finish their cattle, so
they are shipped north to Wyoming, South and North Dakota,
and Montana, and into this country and largely financed
through Denver.
1 was looking at a bunch of paper thia morning, and found
in one bank five hundred thousand dollars of cattle paper
being carried in Denver here, and the different items include eight states, including ?/ontana, Colorado and the two
Dakotas, the Panhandle of Texas, Western Nebraska, and way
down here in Texas near El Paso.
This western country in Texas is similar to our Colorado

The people who live down in Western Texas, Bouth-

western Texas, New Mexico and Arizona, have similar inter
ests to
Federal Reserve Bank of St. Louis

ours, the ar.ount we have in their securities and the



A. E. de Ricqle8.
business dona between El and Denver in connection with
this cattle business and sheep buainsss, is v^ry large.
El Paso handles Westerr Arizona and tfew Vexioo business and
West Texas; practically all '"set Texas cattle business is done *
through El Paso, it does not go east.

The eastern part of !

Texas is n o t syr.pathstic ?ith Western Texas, -ith reference



to financing, so this business comes into £1 Paso and El Paso
is the gateway for Mexican oat tie.
Nearly 60 percent, of
the Mexican cattle that cere into El Paso r.ove into Wyoming,
Colorado and the Panhandle of Texas, and when they come out
are financed through Denver. '
Now, there is one thing we don't appreciate here in Denver,
and that io, that a great deal of our financial business does
not appear in our Clearing House, and a great deal of business that goes along these lines of transportation, while
it is done here, still does not go through our bank^ fcr example, our Stockyards Bank does a

ery large business; they

run four cr five million dollars in cattle paper ard re-discount

in Chicago or Oaaha, because they are not able to

be accommodated in this western country.
If you will notice here, (indicati g on map) we have a
railroad coiting up from Texas.

This is the Colorado A



A. £. dd Rioqlaa.
8outhdrn Railroad, which connects at Denver with the Hill
system, which goes to the Puget aound country.

Now, I

would li. e, if you plsase, to correct a statement made here,
namely, that Montana i9 nearer to St. Paul and Minneapolis
than it is to Denver.

*e are finishing this line, part of

which i3 in operation now, and beinj completed by the 1st
of July, of the Burlington, which puts Denvsr the nearest
city, when we will be nearer to both Butte and Helena than
they are to Rt« Paul and Minneapolis.

The rsason the stuff

has bijen ^oing to 3t« Paul and i'innsapolis, ia because for
a lonG time we were isolated.
On the map th-sre are shown, if you will be eo good as to
see, the area of each atate, the .opulaticn of aaoh state,
the population par square n.ile and the banking capital and
the surplus, also cattle, sheep and hogs in each state.
The Secretary of the Treasury:

That map may be filed

as an exhibit.
(The large wall ; ap referred to, to constitute
d3 Ricqles1 Exhibit No, 1, January 26, li;14.)
Mr. de Ricqlee:

And in the entire district, I would like

to call your attention to the faot that there are 749,000
square miles and we hare only got 3,075,000 people, and 1


A. E. ie Ricql?8.

want to call your attention to the fact that this ia only
3 7/10 persons to the square mile.

We are a poop country.
Thi3 country h^8 -ot a future, this ^reat ~eat,Awhich Denvar
is the center.

fe haven1t any big bank capital, but we

want a bank here in this great district served by thsse arteries of commerce, bv these railroads, and these railroads
terminate in Denver, everyone of them.
The Secretary of Agriculture:

What is the tctal volu&e

of buainess you refor to there?
Mr. de Rioqles:

Fron where?

The Secret*ry of Agriculture:

In that area you are point-

ing out.
Vr. de Ricqles:

The value of cattle received in Denver

last year wae $38,000,000,
The Secretary of Agrioulture:

You 3ay Denver banks are

not strong enough to handle the paper?
Mr. de Ricqles:

They do not.

The Secretary of Agriculture:

Well, can you get a b l | |

here that will be strong enough?
Mr. de Ricqlee:
would help us on.

That is something, sir,

e hoped you


A. E. de Ricqles.
The Secretary of Agriculture:

You know the bank,as es-

tablished, is a certain percentage of thebanking capital and
the resources of that district.
Mr. da Ricqles:

We thought the law would enable you to

give ue a bank by the government or
The Secretary of Agriculture:
the purpose of this.


Not at all.

That is not

This Act establishes a reserve of

the r3sourc38 within that district.
Kr. de Ricqles:

This district has about (53,000,000 cap-

ital and surplus.
The Secretary of Agriculture:
in mind here —

If this district you have

if you have got to get your paper elsewhere

to be handled, how do you propose to handle it under this
new arrangement?
Ur« de Ricqles:

Would not the regional bank take that

The Secretary of Agriculture:

Where would it get the re-

Mr. de Ricqles:

1 ais not in the banking business, &*r.

1 don't know as 1 understand your question.

The Secretary of Agriculture:

You know the regional

bank includes only, aside from the special instance that



A. E. cie Ricqles.
the Secretary called attention to, only the capital reserves
within the district laid out.

It is a certain percentage

which does not increase the banking power in that district.
The Secretary of the Treasury:

If you have a -veak dis-

trict, in oth3r wcrds, a fundai entally veak district, you
have got a fundamentally weak ressrve bank.
?'r. de Ricqles:

1 ai. not prepared to answer the finan-

cial end of the regional bank.

*hat we are trying to do,

is to £et credit to take care of our feeding operations.
The Secretary of Agriculture:

From that roint of view,

wou d it be better to have a larger, stronger district than
a constricted district?
tix. ds Ricqles:

We need all the credit we can get, toe.

The Secretary of Agriculture:

You have to discount in

the East?
tfr. de Ricqles:

Yes sir, a g,reat deal of the livestock

paper ie re-discounted, and that is what -te ?ant t., get away
from, although Denver carries a v*ry large arrount of it.
The Secretary of Agriculture:

One oth3r question:

Will this new road give you the time to Penvsr from Vontana, —

the course of trade, is it now east or south from







A. E. de Picqle8.
Mr. de Ricqles:

Most of the cattls and sh9ep busine*-?*,

the fat cattle from Montana go to Chicago cr to the Pacific

The Pacific Co-ist is working more and mere into the

fat cattle territory of Chicago, but the yount- cattle go
fron this country into that country.

They cannot breed

up there.
The Secretary of Agriculture:
Mr. de Ricqles:

1 know that.

They buy their young cattle through Den-

ver, and a great deal of it is financed in this city.
The Secretary cf Agriculture:

Where do the Arizona cat-

tle go?
Mr. de Ricqles:

The Arizona cattle are principally ycung

cattle, a ^reat deal of which come up here; probably 40 percent., I presume, of cattle that are scld come through Denver cr int^ this district.
The Secret ry of Agriculture:

Rather than to California?

Mr. de Ricqles:


California people get some cattle

from Phoenix, fat cattle, and they get a great rany Mexican
cattle that come up from Sonora through Nogales.
The Secretary of Agriculture:

The point 1 want to make

is this, that this district cannot adequately take care of
 that paper.



A. E. ds Ricqles.
Mr* de Ricqlee:

We have not been able, in the operation*

of cur business, to ^et sufficient credit in the western
country to meet it, the advancement it needs, and we need
credit out here to build up our business.
The Secretary of Agriculture:

It is not an independent

Mr, de Ricqlee:

No sir, it is not strong enj^gh.

The Secretary of Agriculture:
Mr, de Rioqles:

And you want that help?

1 would like to see it, yes.

If 1 nay ,

read something about hay produced in Colorado —

the hay pro-

duced in this state.
The Secretary of Agriculture:

We have those figures in

the government reports.
Mr, de Ricqles:
is where —

Well, the gr>at thing in our district

take the dry farming proposition, these men on

dry farms, themore of the livestock they have# and they must
be financed through Denver or in this district, and if they
can get the money to finance this busineee through a big
regional bank, it will increase the food supply of the country.
The Secretary of Agriculture:

of the

You understand the strength

bank will depend upon the strength of the area in-



A. E. de Ricqies.
The Secretary of the Treasury:


Their rela-

tion to that is the percentage of the combined surplus and
capital of the banks of the district, and percentage of
their resources.
Xr« vie Ricqies:

We are coupe!led, scmetiives, to borrow

where we sell our product, rather than where we produce our
raw material; it is back?;arde.

We would like to be able

to do it the other way.
1 have some things 1 would like to file.
(Various japers, so presented, narked'de Ricqies1
Exhibits Nos, 2, 3, 4, 5, 6, 7, 8 and 9,"respectively, Denver, January 36, 1&14.)
(Mr. de Ricqies excused.)

The Secretary of the Treasury:
Mr. Dixon:

What is your occupation?

Manufacturer of beet sugar, —

Great West-

ern Sugar Company, General Manager.
The Secretary of the Txeae^jry:

You know our problems,

you have heard what we are driving at here.
facts that will elucidate it.

Give us any


Walter A. Dixon.
Mr* Dixon:

I wish to present for your consideration the

importance of the city of Denver as a distributing center for
the beet su^ar industry.

There are seventeen modern and

fully equipped beet sugar factories in the state; nine located in towns north of Denver, seven in the oouthern part of
the state, and one on the western slope, at Grand Junction,
Each of these faotories represent an average investment of
over $1#OGG,OOG; the total, exclusive of investments in lands,
being a out $31,500,000.
During the season of lt-13, 166,000 acres were devoted to
sugar best culture in the state, froir. which
of sugar beets were harvested.

1,841,000 tons

For this raw product the

farmere were paid approximately 110,350,000,

In the pro-

duction of this crop the fans era found it necessary to employ something like 24,000 field laborers, who, in turn,
were paid for their services about $3,447,000.

For labor

(comprising over 5,000 men) employed in the operation of
the factories, the iu^ar Companies paid $3,423,500, and for
manufacturing supplies, freight on beets, and miscellaneous
expenses, an additional $4,535,000.


The sugar produced In the state during the manufacturing .
season just closing amounted to about 230,000 tons, which, at



Walter A. Dixon.

a conservative market valuation, represents a total of about

This sugar is disposed of in all states east

of the Rocky Mountains, *ith the exception of a few of the
far-away New England States.
In addition to the rain product, sugar, there are two very
important by-products, namely, pulp and molasses, these representing an additional value of about il,380,000.


utilization of these by-products for stock feeding constitutes an industry in itself.

The pulp and molasses pro-

duced in the state the past season, fed with

alfalfa hay

or acme other nitrogenous food to balance the ration, is
sufficient to fatten 85,000 head of beef cattle.

The beet

tops also constitute a very valuable by-product when fed to
Statistics covering the financial results of feeding cattle on the by-products of the beet sugar industry will probably be embodied in data furnished by other speakers, and
in order that there may be no duplication. I have not included them in my report. •
1 night say, in conclusion, that the foregoing figures
affect Denver with relation to the State of Colorado only;
but if Denver is chosen as a point for one of ths regional



Walter A. Dixon.
banks, and takes in the territory, as 9hown on the map, the
Colorado figures would, therefore, be increased about 88 percent,, as we must then necessarily include thirty-two factories instead of seventeen, as there are fifteen beet sugar
factories located in the following s t a t e s :

tTtah, six;

Idaho, four; Nebraska, t~o; and one each in Montana, Kansas
and Arizona.
The Secretary of the Treasury:

Where do you do your f i -

Mr, Dixon:

We send our money to our cashiers at our sev-

eral factories, — 1 a^ talking here of the State of Colorado.

The coir.pani-8 1 represent, nine of them, are in North-

ern Colorado.
Th« Secretary of the Treasury:

Your companies, are you

entirely financed by the Denver banks, your ordinary requirements?
Mr. Dixon:

No s i r , i t takes considerable money to f i -

nance a beet sugar campaign.

For this last year, from the

15th of October until the time they finished their campaign,
the factories finished s l i c i n g the beets —
The Secretary of the Treasury:

What do you mean by cam-




Walter A. Dixon,
Mr. Dixon:

They started slicin;; the bests about the 1st

of October, and 1 think the last s l i c i n g will be finished
tomorrow or next week.
The Secretary of the Treasury:

You call cutting those

up a campaign in beet sugar?


It takes two years, — that is what we call

our 1913-14 campaign, and for this K13-14 campaign for
Colorado, 1 believe i t has taken $14,000,000 to finance


to pay the farmers and pay the factory labor, and i t takes, well, we won't begin to get our money back before two or
throe months from now.
The Secretary of the Treasury:
Mr. Dixon:

Yes s i r .

The Secretary of the Traasury:
Mr. Dixon:

You are borrowers?

Of necessity?

Yes sir.

The Secretary of the Treasury:

Hpon a crop that is being

Mr, Dixon:

Yes sir.

The Secret ry of the Treasury:

Productive enterprise.

Where do you get that money?
Mr. Dixon:

It has to come from the East.

The Secretary of the Treasury:

How cuoh do you finance




Walter A. Dixon.
in Denver?
Mr, Dixon:

practically none of it, as far as the Great

Western Sugar Company is concerned.

1 don't know about the

other companies.
The Secretary of the Treasury:

la that due to the fact

that resources are not here, or because you can get what you
want on better terns somewhere else?
&r. Dixon:

1 should say because the resources are net

The Secretary of the Treasury:

Well now, for the pur-

pose of developing this district, do you consider it better
to have a ieak district in resources and capital, or would
you consider it better to have a stronger one?
Mr. Dixon:

1 should eay, —

of courae 1 an not a banker

and have not looked into that phase of it, —

1 should say

that if we had a regional bank, and if the sugar companies
could borrow all the money that was necessary to run the
campaign, —

that was my idea of it.

T^e Secretary of the Treasury:
bank, —

You would rather have a

a district so laid out that you would have a region-

al bank with considerable power so it would be able to take
care of the normal deir.ands of the district, than to have one



falter A. Dixon.
that is not?
Mr, Pixon:


The Secretary of the Treasury:

That would seem to be

good business?
Mr, Dixon:

Yes sir, that would seem to be good business.

The Secretary of Agriculture:
business east?
Mr, Dixon:

Is the volume of your

Did you say it was east?
fell, it is east of the Rocky Mountains, yes

The Secretary of the Treasury:

Where is the trend, east-

ward or westward, in the distribution of the product?
Mr. Dixon:

The distribution cf the product is all east

of the Rocky Mountains.
The Secretary of A&riculture:
dense distribution?
Mr, Dixon:

What would be the area of

It shades off, 1 imagine.

Missouri Rirer.

The Secretary of Agriculture:

From here to Missouri

Mr. Dixon:

No, Missouri Riysr territory itself is the

The 8ecr3tary of Agriculture:'
west of Missouri River?

You mean the territory



Walter A. Dixon.
Mr. Dixon:

No, what we call Missouri River district itaslf

T^e Secret ry of the Treasury:
Mr. Dixon:

What dose that eirbrace?


St. Louis, Omaha; the State of Colorado ?rculd

take, 1 imagine, about one-tenth.
The Secretary cf the Treasury:

Where is the biggest dis-

tribution fcr your finished product?
Mr. Dixon:

Where ^e distribute from —

sold right hsre

in Denver.
The Secretary of the Treasury:

But it *?;oee to St, Louis,

Kansas City, On. ah a, and you say the largest consumption, of
course, is where the largest population is?
Mr. Dixon:

Absolutely, yet sir.

The Secretary of the Treasury:

Do you dc any financing

in 3t. Lcuie, Kansas City or Omaha**
Mr. Dixon:

Very li*t}.e, if any. financing.

Hew York is probably where we get all our



Chicago and
I don't

know as to the other companies, Vr, Secretary.
The Secretary of Agriculture:
to re-discount in the East?
Mr, Dixon:

But you do know you have

Oh,yes sir.

The Secretary of the Tr usury:


And those transactions, of



Walter A. Dixon.
course, don1t appear in the transactions of the Denver banks?
Mr. Dixon:

No, only this, allow me to say a word:


moneys are sent to our different towns wherein our factories
are located; they are deposited to the credit of our cashiers, and he pays the factory labor and the farmers for th«
The Secretary of the Treasury:
Mr. Dixon:

We understand that.

And the money all comes back into Denver.

The Secret >ry of the Treasury:
relation, that is the question.

A question of your credit
That is all, thank you.

Dixon excused.)

(Paper submitted by Mr, Dixon, as i d e n t i f i e d , marked


"Dixon Exhibit No, 1, Denver, January 26, 1S14")

• •*




T^e S e c r e t a r y of the Treasury:

1 am a gold miner, the owner of a geld

The Secratary of the Treasury:


What i s your firm, Mr, Bur

Vx, Burbridge:


Individual miner?


Thomas B. Burbridge.

Mr. Purbrid^.e:

Yes» ^ir.

The Secretary of the Treasury:
can £ive us on tVie problem, —
and knew what we want —
Hr. BurbriUge:

Now, any inf orrration you

you have heard the discussion

we will be glad to have it.


I have assembled data relating to the min-

ing and the reduction of petals in the territory indicated
by that cap (indicating).

It ia a distinctive ir.ining dis-

trict, including Colorado, Wyoming, and including El Paeo as
a reduction point, Arizona, ntfch, Montana, Idaho, South
Dakcte and looming.

This territory produced in 1S13, as

shown by the Geological Ropcxt , a copy cf which 1 have here,,

That is in cold, silver and associated rat-

ale, that is, copper, sine and lead.
The industry in 1<M3, —

that wae fGr the y ar 1913, and

there hue been no compilation, that io, it is too -arly to

the figures for 1&13, but a number of important entar*

prises 5ai« in and begun producing sr.d redveinc oree in i&13,
ana 1 have no doubt the census /ill show a very large increase over 1912.

1 arr. sura of •.1 at

I have oo»r^il3d, to show you th« activity of the industry,
the initial transactions of twelve operating comianies as
ecl1-cted from t>is territory, whose records were available



Thomas E. Burbridge.
to us in data 11, and it shows a use of money of 1218,^45,584
for the y?are 1912 and 1C13, which indicates the activity
of the industry.

There were a number of large operations


whose records

are not available now until their annual

statements are cut for 1^13, so 1 have compiled on Page 3
cf this cemcrandur. frcn their corporate reports to their
fctockhclders for 1912, the net earnings cf these showing
that they earned in iirl2, $68,C~0,G0C, which indicates to
you the profits flowing free thsse metal lining operations.
1 will also fils with you a detailed statement from Mr.
Annear, Superintendent of the Mint, shewing its operations
for 1913.

Th«y bought abcut #38,000,000 metals from us

in 1912; in 1913, f37,500,000, and you kno-J their resources.

is a copy of this detailed report of January 8th show-

to you —

showing $511,744,000 total, of coin bullion

credits and Ketal on hand.
Yon, Kr. McAdoo, have alreaiy given us assistance in this
it in ing operation, this country rroduolng gold, which is the
baae of money, by ths operaticr of your administration it-

1 hav« soma




Thomas E. Burbridge.
T^e Secretary of the Treasury:

That is s t a t i s t i c a l data,

of ccurae?
Wr. Burbridge:



The Secretary of the Treasury:

It is impossible for the

Committee to carry those things in their minds.
Mr. Burbridge:

1 have extended their names, showing the

actual figures.
The Secretary of the Treasury:

It would be better if

you would just f i l e then, as an exhibit.
Mr. Burbridge:

1 would be glad tc do sc, yes s i r .

(Papers, so identified, marked Burbridge Exhibit No.
1, Denver, January 26, 1914.^
The Secretary of the Treasury:

Where i s the financing

of your operations done?
Mr. Burbridge:


of i t i s done through Denver.


control of meat of these important operations in metal mining in this z ne is in Denver, because of the fact that bankers —
The Secretary of the Treasury:

Are you able to oomi and

at a l l tines the credits that are required?
Mr. Burbridge:

We don't borrow much money

actions are r ostly in nsoney.

Our trane-



Thomas B. Burbridge.
The Secretary of the Treasury:

You are producing gold,

whioh is the basie of n-oneyt
Mr. Burbridge:

Tes sir.

We come to Denver for all our

The Secretary of the Treasury:

Where do you get thoss

financing accommodations?
Mr. Burbridge:

Fron the Colorado banker*, generally, and

from local banks in the different states.

Many of these

operations are local, but a great many of them are interstate, like the transactions of the American Smelting & Refining Company.

That is one of the producing companies, a

smelting company that converts our ores, purchases them from
us at assay values; but most of the detailed business of the
metal mining is controlled through Denver.
The Secretary of the Treasury:

1 an speaking of the great

voluie of ths credits that you require.

Do you get them

he ret
Mr. Burbridge:

Very largely.

Denver banks supply it.

The headquarters of mo* of these large operations, a large
majority of these operations, is in Denver, because our
scheme of railroad transportation brings us here more than
to any other center.


Thomas B. Burbridge.
The Secretary of the Treasury.

Ycur credits rniture very

quickly, a frequent turn-over?
Mr. Eurbridge:

Yes air.

The Secretary of the Treasury:

It it* acre or leas a

continuous operation; it is not like carrying cattle for
six or eight months?

Mr. Bururidge:

Kc air.

It is f a c i l i t i e s we want, and

the fact that our organization —
The Seoretary of the Treasury:

You are sending gcli in,

and when you take it cut cf the mine, ycu usually pay the
Mr. Burbridge:

The fact that that Mint is located here

is of great benefit to this industry.
to then, that i s a l l .

Ye are just sellers

But the fact that they are here —

The Secretary of the Treasury:

That, cf course,


itates economy?
Mr. Burbridge:

Very n»uch indeed, and that contributes,

as you say, to practically all the great i n i t i a l business
arising in this seoticn and from which flows to the Mint
a very large part of their business.

I have just received

a package of annual and quarterly stmttfcents of some of the
very important operations which I wculd just like to add.



Thomas I-. Burbridge.

T^e Secretary of the Traaaury:

Just file them as ex-

Mr. Burbridge:

These are quarterly statements that are

shown in detail.
The Secretary of the Treasury:

Turn then over to *r.

|The documents;, eo identified, received and fcarke-"Burbridge Exhibit No, 3, Denver, January 35, 1914.}
(Mr. Burbrid ,e excused.)
Mr. Valone:

Vy naae i s Richard H. Malone, DenTar, Color-

The Secretary of the Treasury1

Bo you knew the problem

we are struggling with hare?
Mr. Malone:

Tea s i r .

The Secretary of the Trsasury:

You desire to give us

some li^ht on the railroad f a c i l i t i e s of the d i s t r i c t ?
Mr. Malcne:

Tee s i r .

The Secretary of the Treasury:

We are somewhat far.iliar

with t' at, but if you will be gocd enough to give us what you
have, I think

itwould be better to file it in the f rm of



Richard H. Maione.
an exhibit.
Mr. Maione:

I will.

The Secretary of the Treasury:

If you w i l l j u s t summar-

i s e rery b r i e f l y or a l l u d e to the important and impressive
p o i n t s that you want to b r i g out, then the whole matter
may be f i l e d as an e x h i b i t ,
Mr. Maione:

In my statement I have shown the s t a t e s em-

braced within an area of f i r e hundred rcilss of Denver, the
mileage, air-iine, and the time between Denver, compared with
San Francis oc, L.09 Angeles, Chicago, St. Lori i s , Kansas C i t y ,
S t . Paul and Minnaacolis.

And you w i l l find we can get

i n t o Omaha ono minute quicker than Chicago can.

We can get

there 49 minutes quioker than St* Louis car..
T^e Secretary of the Treasury:
Mr. Maione:

Yea 3 i r .

That i s a l l shown?

We have saven railroads into

The Secretary of the Treasury:
Mr* Maione:

Yes s i r .

The Secretary of the Treasury:


You have a map, jtou say?

Yea s i r .

Will you f i l e t h a t , pleas*?

We have the Atohieon, Topeka &

8anta Fe; Chicago, Burlington & 'iuincy; Chicago, Rock I s land 8t P a c i f i c ;

, Iv--- Colorado & Southern; Denver &



Richard H. Maloiie.Ric Gnride; Union Pacific and the Missouri Pacific.
are the Prairie Lines.


Also have the Colorado Midland,

Denver & Salt Like (that is the I*cffat Poad) and the Denver, & Northwestern.

That cake a five prairie lines

from the east and three trans-continental lines toward the

There are 1*8 passenger trains in -and cut every

twenty-fcur hrurs, and there ia hardly a hamlet from which
Denver cannot be reached by person, nail or express in 34
hour8 and at the very remotest in thirty-six houra, and 85
percent of the total population can be covered in fifteen
Vith the mountain barrier to the west of it, Denver has
become a great interior railway tertrinus.

Railroads end in

Denver ju. t as they do in San Francisco, New York and Chicago, Wid radiate from that point in practically all directions.

Even the great trunk lines which go tc the north and

south cf it have been compelled, because cf the strategic
position, tc uuild branches tc Denver, -hich have themselves
developed into trunk linea.

Denver's transportation facili-

ties are, therefore, quite as gecd as those cf Chioa^c, St.
Louis and San Francisoc, and because Denver is i terminal
point, they are in cne resrect more important than those of
Omaha, Kansas City, Salt Lake and other large oomreting
Federal Reserve Bank of St. Louis



Ricfcard H. Maione.
The Secretary of the Treasury:

Speaking of this epecifio

territory now?
Mr. Malone:

Yea sir.

The completion this year of the

Burlington Railroad connections in Wyoming, in a through
route via Denver fron Seattle to Galvs3ton, Till increasingly &ake Denver the natural center of trade fcr all Wyoming.
Through connections via Denver are now made from Los Angeles
to St. Paul and Minneapolis; from the Pacific Coast to the
Missouri River; with through trains already from 8an Francieco to Kansas City.
The Mountain States Telephone & Telegraph Company, with
headquarters in Denver, covers practically the entire territory within the five hundred miles radius, and conversation
can be carried on with other localities.
this rapidly.

I am going through

The mileages by railroad, and we have given

it to you by population, with population and the bank clearings for this year (Page 8 ) .
The Secretary of the Treasury:

What is Denver's claim

of population now?
Mr. M^lrne:

313,00(1 V M the census that you ^ave us,

The Secretary of the Treasury:

That Uncle Sam gave you?


' I8H

Richard R. Malone.
I T . Maicne:

Tnat Uncle Baa gave u s .

The Secretary of the Treasury:

Was he liberal, or the

Mr, Ualona:

Why, we vould not think he

gave us enough,

of course.
Kow, tLift being a terminal point, there w i l l not be the
danger of the trains being behind as there would be on the
through trair.e frog the Paoifio and the Atlantic and the
north Mid ecuth, so that if you had to hurry up —
The Secretary of the Treasury:

Do you know of any im-

portant c i t y that i s not a terminal point, in a way?
ttr* kalcne:

1 den't know of any that i s as good as Den-

ver la, unless i t would be Chicago or 8an Trancisco, beoauae they br^ik hjre.

Of course you realize that by the

economy in transportation, botft to the individaal members
and to tho many we w i l l savehours in transportation with
our rapid f a c i l i t i e s , and save expense by being closer in
the center herd.

If Omaha eh uld want money from a bank

in t h i s town, the train takes i t out at 3.00 o ! clook in
the afternoon and ve get that to Omaha as aoonas, if not
sooner than Chicago could.
The Secretary of the Treasury:

True, but you could g«t



Richard R. Malone.
it frc;:. Omaha as
Mr. Walone:

quick as aha could get it from, you?
Very true, but I want to call your attention

to the fact that we are just as clo3e to Missouri River as
Chicago is, and then again, I want to call attention to the
fact that they can come from Chicago to Denver, or
versa, in eighteen hours (?).


And 1 want to call your at-

tention to the fact, to the decrease of the cattle.


was a great depression in business in 1907, and if you had
a bank here, the rates of interest would be so regulated
so that it would not be —

where our cattlemen are paying

from 8 to 13 percent, in some of the districts now, and our
farcers and settlers, you might help us out on that line.
The 8ecretary of the Treasury:

That won't make a parti-

cle of difference, because the rate of interest that may be
charged by the bank will be the samt at all t e branohes
of the bank.

Then, again, the rate of interest established

by the bank for the distriot is subject to revision by the
Federal Reserve Board, at Washington, so you get the same
treatment as to interest where you have a branch or reserve
Mr. Malone:

I think not, Mr. Secretary.

The Secretary of the Treasury:

But you are bound to.




Richird H. Malcne.

There is no —
Mr. Malcne:
I state it?

Here is the reason I think we won't —


That is, the Denver banks carry today forty

per-cent of reserve and if they had a place of reserves and
re-disccunts they would not carry as large a reserve and the*y
would be more liberal in advancing money.
The Secretary of the Treasury:

The member banks have not

got anything to do with the rate established by the bank.
Mr. Ualone:
If they had, —

But oould not they discount if they had?
our banks, as testified here today, they do

not re-diacount much for Denver.

Kow then, if we were to

get a Federal reserve bank tier99 it would save carrying 40
perdent. reserve.
The Secretary of Agriculture:

That would be true whether

the bank was in Omaha or Denver.
The Secretary cf the Treasury:


The point is this,

that the re-disccunt interest rate is established by the
Federal reserve bank, and its bankers, the member banks haveby the
n't got anything to do with that, which is deterrinedAFederal
reserve Dank itself, and the same rate applies to the branches,



Richard H. Maicne.
and the Federal Reserve Board itself has the right to reriew the decisicns of the reserve bank.
Mr. Waione:

1 am trying to get our bank to quit carrying

40 percent, reserve.
The Secretary of the Treasury:

The Act deals with that.

You cannot get away from it.
Mr. Malone:

1 aleo want to call your attention to the

fact that the |l, OCC,000 you loaned to the banks in Denver
was beneficial, timely.

Denver, as a geographical and railroad center, as aforesaid, is the gateway through which there passes annually
an enormous tonr.age of agricultural and horticultural products, coal, coke, livestock, lumber, manufactured goods,
et cetera, the moVittemt of oropt in the fall being air ady
enormous and needing help financially.
In sunning up, Denvsr has the geographical position, Denver has the railroad facilities.
volur.e of banking capital.

Colorado has the largest

Our ?tate law* could be chang-

ed so that the state banks can come in.
The Secretary of the Treasury:

The question as to the

state banks is, how many of them are eligible under«iii
Act to membership in the Federal reserve bank.





Richard K. Uaioae.

Mr. V*l^re:

Tfrey are not now under cur law.

Tte Secretary of the Treasury:

But even if your law was

charged, the question would be hov rany are eligible, on
account 01 the capitalization, and on account of the other
requirements of thw Act.
Mr. M*lcne:

I want to call your attention to one thing:

If the banks do not take enough of this capitalization, some
of our people in Colorado would like to take some of the

The widows and orphans, when & man die* and laaves

$5,000, or Rore to his estate, it would be a most beneficial
place to invest some money,

A poor man could take dome

cf this morey and it would be a benefit.
I want to call your attention to the fact that you can
help '-MB western country, so that the commercial and livectook interests can be developed, and it would be a benefit
and wculd reduce the cost of living in those various places^
so that it would help in a reduction in the cost of living
in the United States, and then. 1 believe, this undeveloped
country would be developed and advance the interests for
the genaral good.
The Secretary of the Treasury:

The purpose of this Act

is to help all the country and 1 think its operations will


3357 i

Richard H. Maione.

be of such a nature that nc ] art of the country can fail to
be helped.

That is the reaaor. -.e think it is a good Act.

Mr. Malone:

I agree with you.

The Secretary of the Trsasury:

We might be able to make

this ap^ly to that.
Mr. Malone:

When you gentlemen

talk in regard to the

travel here eastward, the general trend of the travel
The Secretary of the Treasury:


No, 1 an not speaking

of travel, but trade, the trend of trade.
Mr. Malone:

How many of the»« do you want filed?

Th» Secretary of the Treasury:

Three of then, if you

Mr. Malone:

1 will have then, filed this afternoon.

(The statement of *r. Malene, consisting of sixteen
pages, so identified, narked "Malone Exhibit No. 1, Denver,
January 26, 1^14").
The Secretary of the Treasury:

You are going to give us

that map?
Mr. M&lone:

Yes sir.
(Mr. Malone excused.)



TM# Secretary of the Treasury:

Give your full nai^e, ad-

dress and occupation.
Mr. Shafroth:

Morrison Shafrcth, Denver, Colorado, Law-

yer, re; resenting the Char.ber of Con.nerce.
1 have here just a few points 1 want to call your attention to*

1 have a map showing the development of this

mountain country.

1 want to call your attention, in the

first place, to the output of metals in this country. You
will find that practically all the gold and silver in the
United 8tates is produced in this country, in this district
clair-ed for Colorado, and the California district.
It is
essentially^ gold and silver producing country of the
United States.
Tne Secretary of the Treasury:

Let me say, if you want

to give us these s t a t i s t i c s , that no can carry them
in hie head*

Just call attention to the points and then

file this.
Ur. Qiafroth:

Tee s i r .

The Secretary of the Treasury:

And we will be able to

give i t consideration when we review the record.
¥r. Shafroth:

Yes s i r .

It is about a quarter of a

billion dollars, the output of precious metals in this die


Morrison Shafroth.


There are just a few general points 1 want to call

your attention to.

In the first place, take the distance

from Kansas City to Ban Francisco, it is about two thousand
miles, and it seems to me Denver is the only possible location for a bank in that space, and Congress, evidently, had
contemplated that there would be one or two weak districts
in the system when it provided that under this Act the government itself would take the necessary stock in the regional bank, if the national banks in that territory and the individual themselves did not contribute sufficient.


to the fact that you will have only one bank, at San Franelswo, or even two banks, one at Seattle and one at San Fran*
cisoo, that w~uld leave a stretch of two thousand miles be! tween Kansae City and San Francisco without a single bank.
The Secretary of Agriculture:

Would it?

That is the


The Secretary of the Treasury:
Mr* Shafroth:

Now, would it?

It seems to me it would.

The Secretary of Agriculture:

Suppose you had it at

Omaha, including this district in it, yov would still have
the bank,
Mr, Shafroth:

Otiaha is practically the same distance as



Morrison S h a f r c t h .
Kansas C i t y *
The Saoretar/ cf Agriculture:

But on your point as to

the fact that this district would not have a bank,
!Vr. Shafrcth:

Wei., this central district, there would,

of course, be a bank on the adge, practically in this district, but, if you pi3aw, with a bank at New York and one
at Ban Francisco, Denver would have a bank in the sace
sense —

cr Chicago; that is, there is a space of two thous-

and milds there without a bank, a bank on sach edge of it,
but it is on the outside*
The Secretary of the Treasury:

Suppose you had a bank

at Omaha and you bud a bank at Denver*
Mr* Shafroth:

Tes sir.

The Secretary of the Treasury:
Ijr* Shafroth:

And the J>'int hers, too.

Yes sir.

The Secretary of the Treasury:

Now, the power of the bank

can be exerted at any branch, the full po^er of any bank
in this district can be exerted in any branch when required*
Mr* Shafroth:

Yec sir.

Th# Secretary of the Treasury:

And the purpose of this Act

wag to divide the country into districts so as to create a
nurber of strong communitiee, not to create weak communit




Morrison Shafroth.

ids, not to create *eak communities.

The purpose of the

Act ia not to create them when it can be avoided, but to
create a :

r of strong oonj: unities and then through that

strong cociunity to have the branches distributed over the
district in such a way that th# power of that community ray
be exerted a4: any given point in tirr.e cf necessity i roKptly
and effectively.

Now, you would not be without banking

facilities if the headquarters were at Omaha or at Kansas

1 mention those places merely to illustrate the point-

er, 3h&froth:

Tee, one, what would be the ot: er?

The Secretary of the Treasury:
Mr« Shafrcth:

At Chicago, then,

If they had fixed the nur.ber of banks at

four throughout the country, that would be in the same relation exactly.

The Secretary of the Treasury:
have eight, the minimum is eight.

Y^s, but you are bound to
That is why the terri-

tory, the contiguous territory to any Federal reserve lank
is, of necessity, smaller in each district,
Wr. Shafroth:

Yes sir.

The Secretary of the Treasury:

-9o that the Federal re-

•erve bank and it« branches in eaoh district, is brought
More intimately and closer in touch with the people in these


Morrison Bhafroth.
Mr. 8hafroth:

Yes s i r , but isn»t it a fact that the d i -

rectors of the regional banks, — suppose a regional bank
is located at Kansas City, for instance, and one at St. Louid
and one at Chicago, wouldn't i t be a fact that the directors
of those banks would be inclined tc over-emphasize and give
undue emphasis to the particular section in which they were
The Secretary of Agriculture:

there would thsy be drawn

Mr« Shafroth:

They would be drawn from the surrounding

country, but at the same time while they would aot as d i rectors for ths regional ba k, they would be stationed in
that city and —
The Secretary of A^ricuiturs:

Wouldn't it be their

duty to aot for every part of the district?
Mr. Shafroth:

It w uld be their duty, yea s i r , for erery

part of ths d i s t r i c t , but, take the city of Washington i t s s l f , the needs of that city are emphasized rnore than any
other city in the country, unduly emphasized.
Ths Secretary of the Treasury:

Is that referred to be-

cause i t happens that ths Treasury i s located at Washington?




3 ^

Morrison Shafroth.

Ir. Shafroth:

Yes air.

The Secretary of the Treasury:

Recently *e distributed

something like tnirty-aev3n mil:ions of dollars for crop
roving purposes throughout the country.

The needs of Wash-

ington were leas emphasised than any other part of the country.

The distribution was made as any conscientious rran,

any honest man wo Id be obliged to make it, with reference
to the : arits of the preposition and the needs of the time
and the country *

No matter where the headquarters nay be

situated, so far as this district ia concerned, the banks,
unier ths law, are divided into three classes, and the character, of the balloting will result in t e election of men who
are representative of the entire district.

It might trans-

pire that with a headquarters bank at Kansas City there would
not be a single Kansas City man on the board.

That may

On the other hand, it might certainly happen that

a Denver man world be on that board, but assuming that those
men discharge their duty justly and impartially *ith respect to the whole district, —

w# Bust assume that we can

get American citizens who are impartial and honorable enough
to discharge these duties no matter where the headquarters
•ay be.

The presuw.ption is tflde upon the fact that the


Morrison flhafroth.

headquarters' bank may be at some particular s;ot in the
Mr. "hafroth:

But don't you think i t i s human nature

to notice the needs of the particular section of the country
in which a l l the directors are drawn?
The Secretary of the Treasury:

They couldn't a l l be

dr&wn, — no mattsr whaxe that bank i s , they couldn't be a l l
drawn frt& one part of the d i s t r i c t ,
r. r>hafroth:

Ho s i r , but assuming that there would be

one director from Colorado, a director from New /exico, one
fror. South Dakota, — thay would have the needs of their

articular section of the country in nind, but they would

have the needs cf Kansas City next to their own country; Kansas City would be second choice of every director.
The Secretary of Agriculture:

As *. jaattsr of fact, Wr.

Shafroth, i s this always an unmixed advantage that ^here an
institution i s located, i t i s favorable to the comr. unity
more than eome*other place?

Isn't i t true that capitals

are frequently at a disadvantage?
Mr* Shafroth;

It ••errs to ae that the tendency ia to em-

phasize the particular d i s t r i c t .
T^e Secretary of Agriculture:

low, kfr. Shafroth,


226 5

Morrison Shafroth.

that an unfortunate argument to present, anyway, in favor of
Denver, because your argument is al2 directed to the fact or
for Denver, that ehe would be mere partial to herself and
take better care of herself than any other ;art of the district!
Mr, Shafroth:

No sir.

The Secretary of tha Treasury:

What is true of huaan

nature in Kansas City is true of human nature in Denver.
Mr. Shafroth:

Yes sir, that is true.

The Secretary of the Treasury:

If that argument were

good, then there would be objection to a Federal reserve
bank in any city*

On the other hand, we must assume that

honorable, honaet aen can be found to discharge these duties
no matter where the Federal reserve bank is located, and 1
believe they can be found.
Mr. Shafroth.

1 have no question about the honesty of

the men, but it is human nature to do that, and if Denver


Denver is in a distinctive district, with all these mining
0tat»»; Denver is the center of the mining states; Kansas
City is in the Corn Belt, and Denver is mere representative
of the mining interests in this western country.
The Secretary of Agriculture:

There again you are assum-

Morrison Shafrotb.
ing that the mer. are drawn from particular localities and
don't know the conditions.
Mr. Bhafroth:

1 a:: still bearing in mind the fact that

the center in which the bank ie located will always be the
second choice of all the directors.
The Secretary of Agriculture:

You rust not forget anoth-

er point, this paper you speak cf arises in the new banks
just as heretofore.

They will be the onss that will pass

on this paper.
Mr. flhafroth: But isn't it at the crticn of the direct- j

ore of the regional reserve baak that this paper is re-dis- :

They may rs-disoount, but it is not provided that'

they shall.


The Sec rotary of the Treasury:

Let me say this, that

evsn if it developed that directors cf any regional bank,
any headquarters bank, in any district, were faithless to
their trust, as you have suggested here that they might be,
Ths 8scratary of Agriculture:

And they wou-id be if they

showed faror to a certain section of the district over any


The Secretary of the Treasury? an instant
Federal Reserve Bank of St. Louis

If they were faithless,

remedy is in our hands, because the Federal Be-




Morrison Shafroth.
serve Board can dia&iss everyone of th9m and hav-s a new deal*
There i t power lodged in the Federal Reserve Beard to protect
those communities against that very thing.
Mr. 8hafroth:

1 do not mean that they will deliberately
I aay, unconsciously those things will have

sone weight.
The Secretary of the Treasury:

Cannot Kansas City, or

•ome otrar oomzunity that might be included in this d i s t r i c t ,
make the same argument against Denver?
Mr. Shafroth:

In a section of the country that is eaaen-

t i a l l y different from Colorado d i s t r i c t , no.
The Secretary of the Treasury:

8err.a of the meat profound

economists who have come before t* is Coiiirittee have talked
very etrongly for diversification of cc r.sros and industry
in the different d i s t r i c t s to be served, because then you
don't have the extreme der and that me single industry mak«s
upon the bank at a s i n . l e time of the year, and diversification tends to more uniformity of demand, therefore nore normal distribution of the benefits of the system throughout
the country d i s t r i c t s .

Yovfr5^611 ie directed tc the reverse

of that proposition*
Mr. Shafroth:

Yes s i r .



Morrison Shafroth.
The Secretary of Agriculture:

Let ire ask you another

Waiving these questions of local prestige,

which we ought to do and we are, when we are looking at the
permanent and ultimate interests of great sections of the
country, would it not be better for this section, which you
intimate is yet relatively weak, to have a larger area and
be differently connected so that it would have a stronger
grouping or banking power?
The 8«cretary of the Treasury:

And a larger amount of

resources, therefore, to take care of the needs cf the district.
Mr. Shafroth:

Well, if it could overcome the objection, -

if you could overcome the objection of distance, it seafrs
to me that, all other things being equal, it is, of course,
desirable to be in a strong district, but you will have certain sections of this country well, at l°ast a thousand
miles away, and we are to be at least a thousand miles away,
the distance between San Francisco and Kansas City, if you
put a bank at Ban Francisco and one at Kansas City, there
is a part of your iciddle section of the country that will
be a thousand nilas from a bank.
The 3«cretary of Agriculture:

It would be just as many



••rrison Shafroth.

miles from the bank that it night deal with as it is now.
We are not going to change the initial, ordinary movement
of ccmnerce and banking*
The Secretary of the Treasury:

The ordinary courses of

trade and commerce are net to be disturbed by this arrangement*
The Secretary of Agriculture:

Only the artificial.

The Secretary of the Treasury:
of it.

Only the artificial part

This cortpels this Comrittee to have due regard to

the convenient and customary course of business, and we cannot disregard those initial advantages,
Mr. Shafrcth:

Suppose that one district is given a great-

er convenience by some of the selections of bankers, it seems

to me —
The Secretary of the Treasury:

That L ight be done, but

our duty, then, is to minimize it.
Mr. Shafroth:

Yes sir.

The Secretary of the treasury:

To cause

the least

possible amount of it.
The Secretary of Agriculture:

1 notice that you are sug-

geetoti as representing the jobbing i n t e r e s t s .
MX. Shafroth:

No, that was a mistake.

Mr. Morey re-


Morrison dhafroth.
presents th8 jobbing interest*.
The Secretary of Agriculture:

I wondered whether there

would be available a map or series of maps showing the area
of distribution of your large houses.
Mr. Shafroth:

Yes, #r. Morey has three n,aps.

The Secretary of the Treasury:

We would like tc have

How, will you be good enough to file thie statistical

data you have and make it an exhibit tc ycur testimony?
Mr, Bhafroth:

Yes sir.

This is just general statistics

of thie country, manufacturers, mining and all that*
The Secretary of the Treasury:

We find it rather illum-

inating, sometimes, and informing to have a running discussion of this character with you and with witnesses as they
come up on the ata.d, because it develops a good many points
that Aould not otherwise be brought out.
Mr. 8hafroth:

1 want to call your attentirn to the postal

Denverfs postal reosipte are greater than any of

these states, ths receipts, that is, of Denver alone are onethird of the entire postal receipts of Nebraska or the entire
State of Kansas.
The Secretary of Agriculture:
on this map before you?

You have a sample of this



Mr. S h a f r c t h :



Tes s i r .

Tiie S e c r e t a r y of t i e Treasury:

Can you have a b l u e

p r i n t of t h a t map f i l e d w i t h t h e Committes?
Mr. S h a f r o t h :

Yes a i r .

( T y p e w r i t t e n s t a t e m e n t s u b n i t t s d by Wr, S h a f r o t h , a s
i d e n t i f i e d , marked "flhafrcth E x h i b i t No, 1 , Denver, January
36, 1 14.")

The S e c r e t a r y of t h e Treasury:

I should l i k e t o repeat

and emphasise what 1 s a i d a t t h e b e g i n n i n g of t h e h e a r i n g ,
that the questions asked by the

COIL., i t

tee do not indicate

any attitude whatever on the part of the
pect to any of these questions,


i t tee with r s -

Wherevsr the c i t i e s are

advocating a particular thing, we must, apparently, be in
opposition for tbs ]*irr>o*eAbringing out facts, that is a l l .
I s make t) is statement wherever wa go, because the
unfair inference is drawn that the questions ws ask ars i n dicative of seme view of our own.

W# have no view on this

•ubjsot; ve ars in a s t r i c t , judicial attitude, and we shall
fona no views until the entire country has bjen heard from
sc we can consider ths Troblem as an entirety,
Ws will now take an adjournment until




Gordon Jcnas.

WHEREUPON, At 1 3 . 3 0 P . fc. a rsC38a «as taken u n t i l 1 . 3 0
P. K.

The Secretary of the Treasury:

1.30 P. V.

I want to call Jonss

just a accent.
Tr e ^•cretary of the Treasury:

Mr # Jones, are you the

President of the Clearing House Association?
Mr, Jones:

No air.

The Secretary of the Trsasury:

What is your relation

to it?
Mr. Jones:

Just a member*

The Secretary of the Treasury:

Just a member.

I should

like to ask you, froc your knowledge of banking conditions
here in Denver, whether your banking relations and your trade
relation* are greater with Kansas City or Orraha?
*r. Jones:

Kansas City.

The Secretary of the Treasury:


ow much greater, do you

Mr. Jonee:

1 couldn't answer that offhand proportionate-




Gordon Jones.

ly, but considerable.

Tile Secretary of the Treasury:


And are

jmut MfcfcUg •xchanges greater with Kanaae City?
Mr. Jcnes:

Tea s i r .

The Secretary of the Treasury:
Mr. Jones:

Than with Omaha?

yee sir.

The Secretary of the Treasury:
Mr. Jones:

Much greater?

Much greater.

Tk« Secretary of the Treasury:

Could you furnish ue some

statistical data on that point later and send it to Washington to the Coiar.ittee tc be filed as an exhibit?
Mr. Jones:

Tee sir, 1 will see that that is gathered.

The Secretary of the Treasury:

What is the sentiment of

th# banking community, if you know it, as tc this proposition:

Sunoss that a district was established, —

to which

city would Denver prefer to be attached, if she herself
should not be mad* a headquarters, 1 rr.san if the headquarters reserve bank is not located hare, to which district
would she prefer to be attaohsd, to one of which Kansas Oity
was the headquarters or On-,alia?
Mr. Jones:



1 think the consensus of opinion would bs



Gordon Jones.

The Secretary of the Treasury:
submit to ua their views on that
Mr, Jones:

yea sir.

Clearing House.

Would the bankars here
articular proposition?

Mr, Mitchell is President of the

1 asked him to be here.

J. C. Mitchell

ie President of the Clearing House and 1 would like to have
him give his opinion.
The Secretary of the Treasury:

It is essential to con-

sider alternative propositions always, because if we cannot
give a city what it wants, then we would li e to know what
first, second and third choice right be.

*e should be glad

if you would have Mr. Mitchell come before the Committee.
We should like to ask hie some questions.
Mr. Jones:

We should be glad to set before the Coni&ittee

any circu.\ stances that they would like to know.
The Secretary of the Treasury:

You t.ean well on that

Tell us about the hoco^eneousness of the trade re-

lations of all parts of this state.

Is there anything dis-

tinctive on one side of the mountains, distinctive fron the
Mr. Jones:

No sir*

The Secretary of the Treasury:

1 mean, ary different



Gordon Jones•

Mr. Jenaa:

No sir.

The Secretary of Agriculture:

Do you know what part of

the trade of Westaxn Colorado would be apt to go towards
3an Francisco?
Mr. Jcnes:

1 would rather someone direct!v in the fruit

line would t e s t i f y to that.

There way be some shipping

that way, but 1 think nearly of i t comes this *ay.
The Secretary of ths Treasury:

Are most of the accounts

of Western Colorado bankers kept in Denver or not?
Mr* Jones:

1 don't believe there i s any kept in San Fran-

1 don f t believe there is any kept anywhere e l s e ,

outaice of Pueblo.
The Secret-ry of the Treasury:
Mr, Jones:

How about 3alt Lake?

We have a Salt Lake banker here.

He could


The Secretary of the Treasury:

If you could ask My. Mit-

chell up hare, vre should like to hear him*
Mr. Jcnee:

1 have a l e t t e r here, a joint l e t t e r from our

two Senators that was sent out and handed to r,e, which 1
should like just to turn In ae a matter of record.
The Secretary of the Treasury:
Mr. Cocksey for the record here.

Just turn i t over to


Fut this




Gordon Jones.
(The letter in question, as identified, received and
Barked "Jones1 Exhibit No. 1, Denver, January 36, 1S14.)
The Secretary of the Treasury:

Give your full name and

occupation, and state what you represent.
Mr. M*tcv.sll:

John C. Mitchell, Banker.

The Secretary of the Treasury:
Mr. Mitchell:

You are President of the -

Denver National Bank*

The Secretary of the Treasury:

The Penver National Bank,

and are you connected with the Clearing House officially?
Mr. Kitahell:
Mr. Jones:

Tea, I expect I an.
You are President.

Mr. Mitchell:

President cf the Clearing House.

1 just

returned from the Cast laat night, so 1 den it know just what
is going on*

The Secretary of the Treasury:

Mr. Mitchell, the Commit-

tee is obliged to ask in every city what its alternative
choices cay be.

Now, assuming that a regional bank or a

reserve bank was not established in Denver, what would Denver's second chcice and third ohoice be?

1 will say, for

instance, at between Kansas City, Omaha and Chicago?



John C. Mitchell.

Mr. Mitchell:

fell, sneaking for my bank, 1 would say-

Chicago would be our second choice.
The Secretary of the Treasury:

Would be your second

Aesuaing that Chicago was not possible of con-

sideration and that it resolved itself into a question of
OIL ah a or Kansas City?
Mr. Mitchell:

1 would take Kansas City next,

Tht Secretary of the Treasury:

Your exchanges, are they

•ore with Kansas Cit/ them with Omaha?
Mr. Mitchell:

Yes, v?ry much more.

The Secretary of the Treasury:

Is the general


of business transactions of Colorado more with Kansas City
than with Omaha?
Mr. Mitchell:

1 would say so, yes.

The Secretary of the Treasury:
Mr. Mitchell:

Considerably more?

1 would say considerably more.

1 know

our own business is.
The Secretary of Agriculture:

More with Kansas City

than with St. Louie?
Mr. Mitchell:

Tes, but Chicago very largely more than

Kanoas City.
The Secretary of the Treasury:

And very largely more thin


John C. Mitchell,
Mr. Mitchell:

Vary largely more than Omaha.

If Denver

oould not hare a regional bank here, it would be a branch of
Chicago with Kan acts City and Omaha also branches of Chicago,
The Secretary of tiie Treasury:

Aa&usiing that Oould not

be done?
Mr, Mitchell:

Assuming that could not be done, then we

will 8ay Kaneae City.
The Secretary of the Treasury:

Would you think it wae

wise in the r.a ing of a district to divide the State of Cole
rado so that the wastern half was in one district and the
•astern half in another?
Mr. Mitchell:

I would not eay eo, no sir.

The bv-sinesi

of tht* entire state comee to Denver.
The Secretary of the Treasury:

The business of the en-

tire state coiuee to Denver?
Mr. Mitchell:

Yes sir.

The Secretary of the Treasury:

And would be best served

through the preservation of it* integrity in the creation
of a district?
Xr. Mitohell:
Yee sir.
The Secretary of Agriculture:

Have yo - given any thought



John C, Mitchell,
to thia district that is suggested?
Mr. Mitchell:
I have.

Tell, this district, —

Before 1 left here

yes, I presume

for the east we were formulat-

ing a district in our minds, and that was about the district
we talked of.
The Secretary of Agriculture:

Now, as it stands, it ap-

pear* that it would be relati ely, perhaps, the weakest district that has been su:,.ested to ua in point of banking power.

It also includes Montana, and the indications up-to-

date are that Montana, 80 percent, of the interests there,
the banks, prefer St, Paul or Minneapolis, and 30 percent.

In other words, that their volurce of trade at

present largely goes east and not south.

Then there are

intimations that Arizona, to a very large extent, got* W**t t
and we might, under the law requiring us to give due considerat ion to the course of trade, —

other district.

might have to attach them to

That would still further weaken this.

Now, would you think it better to have a district that was
not normally independent in normal, or would it be
better tc connect with some of these old states to the east?
That is the problem, yo/ see, \hat will naturally confront
the Comr.ittee.


John C. Mitchell.
M*. Mitchell:

With relation to Montana, 1 believe that

that railroad connection that has been spoken of will probably change the trend of business tc some extent, bring it
towards Denver.
The Secratary of Agriculture:

fell, is not the flow of

commodities in Mo&ufca through that eastern section?
Vr. Mitchell:

The natural flow of all business is east.

The 3eoretary of Agriculture:

Would it be diverted to

Denver in any instance and then east?
Mr. Mitchell:

That would be eonething to be demonstrated.

The Secretary of Agriculture:


The problem is to

got a district that would, in no m a I tin: ;9, be independent
and self-sufficient, and the question is, how to relate these
different comrunities here to secure
Mr. Mitchell:


My own opinion is, that if we can get a

figure that can approximate the capital necessary at the
present time, we will have no difficulty in getting the required capital in a short time.

1 have no doubt, in my

opinion, but what with the state laws fixed so that etatw
banks can come in, that they will, and those that are eligible will undoubtedly come in, because 1 believe they will
be foroed to com* in.



John C. M i t c h e l l ,
f l » S e c r e t a r y of A g r i c u l t u r e :
Mr. M i t c h e l l , a t p r e s e n t ,
Mr. M i t c h e l l :

Are t h e r e many s t a t e b a n k s ,

itfc rr.ore than $ 2 5 , 0 0 0


Q u i t s a good r.any, 1 should s a y , y s s .


ar# s t a t e banks i n Denver, v^ry l a r g e o n e s , and i n Colorado
• p r i n g s , and some i n P u e b l o .
(«r, Fitchell excused.)


Mr. Jones:

Regarding the closeness to Montana, that the

railroad man has already given, 1 can ^ive you our record
right now.
The Secretary of the Treasury: Tee.
Mr. Jcnes:

From 8t. Paul to Billings, 892 miles; takee

twentyrfour houre. .
From Denver to Billings, by the way of the new cut-off,
657 miles, giving Denver 335 milee closer proximity to Bill-


ings and, naturally, all points west of Billings in Montana.
The secretary of the Treasury:
Mr. Jones:

When did that happen?

It will shortly be completed.

The Secretary of the Treasury:

Kindly |ive your full

nare, address and occupation.
Mr. Armstrong:

f. W. Armstrong, ?re-3ident, National Cop-

per Bank, Salt Lake City, Utah.



W. W. Armstrong.
The 8eoretary of the Tr-asury:

Do you represent the

Clearing Houat?
Mr, Armstrong:

I do not.

I am not accredited from any

of the banks of Salt Lake City, except our own.
Th# Secretary of the Treasury:

Has the Clearing House

had any meeting about tl is matter?
I don 1 1 know.

We are not ambers of the

Th# Secretary of the Treasury:

There is a clearing house

Mr* Armstrong:
Clearing House.

Mr, Armstrong:


The Secretary of the Treasury:

You know our problem.

Will you kindly give us your viewe on it?
Mr* Armstrong:

1 like to point out the territory

that Salt Laks City feels it could serrs by^ having a reservs
bank, ^ M if you will peraait, 1 wilj just mark it out there
(indicating trap) .
Ths Secretary of the Treasury:

You mean a reserve bank

in Bait Lake City?
Mr, Armstrong:

Yes sir.

lins running up here to

Taking this line, the eastern


Ths Secretary of the Treasury:

Announce it by states.







W. W. Armstrong.
Mr. Ar:aatron&:

Vtah, the -7eot3rn ora-third of Wyoming,

southern tvro-thirdu of Iciaho and tho da8t3rn half of Nevada.
1 c a l l attention at the same timo to the Tact that the Rocky
fountain range outs right down nero through —
T«ie c'aoretary ol ihe Treasury:

You caan thsre, Montana,

Colorado, lyociing aad Xe* .ioxico?
Mr. ArL.strong:

Oure would be a l l on the i?est side of the

The ^ecr^tary oi' the Treasury:

Hare you figured out the

of a back that you would get frou that territory and

i t e resourcee?

XT* Arcatrong;

ree s i r .

The Saoretiry of the Trjaaary:


What would you have?

We would have a four million dollar bank,

ffe would fumiah about a million dollars of the c a p i t a l .
The Secretary of the Trsaaury:
al banks aioue?
Jir. ArEwtron-:

You wetta from the nation-

"e ^c?ld furnieh about 9 million dollare

TLe fieorat'try ox* A^rioulture:


Who ^ould?

The national banks alone.



W, W. Armstrong.
The Secretary of the Treasury:

Of Utah —

you mean of

•alt Laka City?
!*• Armstrong:

Yee sir*

The Secretary of the Treasury:

Well, you aay

you would

haTe four rill ion dollars capital?
Mr, Armstrong:

We would have to have.

The Secretary of the Trs^ury:

But you would have, 1

eay, with the banks in that district?
Mr. Armstrong:

Not with their eubaori:tion alone, no air,j

Tht Secretary of the Trsasury:

Where would ycu

et the

reet of it?
Mr, Armstrong:

From the govarnrnent.

The Secretary of the Treasury:
Mr* Armstrong:

We hope so.

The government?
Our argument in favor of

our district is directly opposed to all o t e r ar.xmr.ents furnished by the line of evidence that has been given here this
morning to ycur CotJiittee.

W# feel that tith regional banks J

and we are very much in favor of them, that the law presumes
to help the weak, and we claim to be the weakest spot in the
United States.

We make that claiir, eo far as banking cap-

ital and banking deposits are concerned.'
The Secretary of the Traasury:

The purpose of the



!• I. Armstrong,

vision in the law was to supply any deficiency that might
be caused by the failure of the national banks to subscribe.
Mr, Armstrong:

Yes sir.

The Secretary of the Treasury:

It i9 not intended to set

up a large number of weak districts and then ask the public
or the government to supply the capital.
Mr, Armstrong:

No, probably not.

The Secratary of the Treasury:

The theory of the law

was not that.
Mr. Armstrong:

Possibly not.

The Secretary of the Treasury:

And the purpose of the

law, of course, is to create, as far as possible, districts
of sufficient resources to enable them to care for themselves in normal, and then through the association
banks to give relief required in abnormal tiroes.
Ui. Ar&stron^:

1 don!t presume to argue the law with

you, but 1 would like to call your attention to the fact
that ths law provided for just such a case as ours by an
arrangement that the Federal Reserve Board can re-discount
when there is not sufficient caiital to handle the business or
the particular districts,
The Secretary of the Treasury:

And can require another



bank to re-diaoount, but in tines of emergency only, and upon
the vote cf five members of the Board.
Mr. Armstrong:

Well, it prwided that method.

The Secrstary of the Treasury:
Mr. Armstrong:

But in emergencies.


The Sscretary of the Treasury:

You would not call i t an

• • e r ^ n o y %o have an ordinary demand that your bank could
not take cir© of in the usual way?
Mr. Arsstrckg:

Well, there might be emergencies e x i s t -


ing in an undeveloped ccuntry like ours, the greatest section cf the United States that remains yet undeveloped.
The Secretrjry of Agriculture:


The main object of the b i l l

was net for the United States to supply banking power to a
particular ccajLunity.
Mr. Armstrong:

That aeeAB to be your idea.

No, not e n t i r e l y tljmt.


We have a ccuntry—

there has ceen broughtout here two questions:
country peculiarly applicable to a branch bank.

We have a
It is a

CGJu&uAity in i t s e l f .
The 8eoretary of the Treasury:
Mr. Armstrong:

You want a branch?

Ho, I didn't mean branch, I mean regional

reserve bank, if you w i l l pardon me.
The Secretary of the Treasury:



Assuming that you ccuitdn't


W. W. Armstrong.
ge£ a rseerve bank at Bait Lake City, whare would the bankers
of 8alt Lake City prefer —
fer to be associated?
Mr. Armstrong:


with what city would they pre-

What would be your naxt choice?

San Francieco.

The Secretary of the Treasury:

la the trend of your busi-

ess more westward than eastward?
Kr. Armstrong:

No sir, the trend of our business will be

more westward than eastward as scon as the Panama Canal is
built and working.
Tt^e Secretary of the Treasury:
Mr*' Araetron^:


think it will be?

1 don't think there is any doubt about it.

The Secretary of the Treasury:

t?ow long does it take to

gst from Salt Lake City to San Francisco?
kr. Arnstron;:

Twenty-three hours —

The Secretary of the Treasury:
Mr. AriEstron^:

twenty-four hours.

How long to Denver?

About the same, in the question of tire;

about equal distance.
Th 8 Secretary of the Treasury:

Do you think the customary

course of business and the convenience of business in the
whole State of Htah would ba best served by attaching your
state to a district of which San Francisco was the headquartere for the bank?


*"• W. Armstrong.

Mr. Armstrong:

I do.

The Secretary of the Treasury:

How far do you think you

reflect the vieWi* of bankers and business r en in ntah on
that proposition?
Mr. Armstrong:

1 believe 1 reflect it quite fully on that

| particular proposition, Mr. Secretary.
The Secretary of the Treasury:

What is your next choice

after Ban Francisco?
Hi, Armstrong:


Th# Secretary of the Treasury:
Mr. Armstrong:


The Secretary of the Treasury:
Mr. Arh.atronb:

It would be Denver?

It would be Denver.

The Secretary of the Treasury:

Coming eastward?

And if not Denver, then

Omaha or Kansas City, between those two?

kx. Armstrong:


The Secretary of the Treasury:

Your relations would be

closer with Omaha than with Kansas City?
Mr. Armstrong:

Yes sir.

The Secretary of the Treasury:

Are there any other repre-

sentatives of Salt Lake City here?
Mr. Araatron,,:

1 ai^ sorry to say there are not, sir.


W. % Armstrong.
Is have no other representative excepting myself.
The Secretary of the Treasury:

le the Clearing House go-

ing to send representatives to be heard at any point?
Mr, Armstrong:

1 don't think they will.

1 don't think

they are taking any interest in it.
Th« Secretary of the Treasury:

They d. n't care where

they are put, is that the idea?
Mr. ArE9trong:

1 tried tc induce some of then; to come

over here and appear before your Committee, talked it over
with 8o»e of them.

Our bank does not belong to the Clearing

House in this matter, it is not in harrcny with ths Clearing House of Salt Lake, but 1 believe that 1 reflect in what
1 havs said the deeire, generally, of the bankers of rTtah
and of Southjrn Idaho and of this territory 1 speak of here.
The Secretary cf the Tr-asury:

Hi~ve you got a state as-

sociation of bankere?
Mr. AxMtrong:

Yee sir.

Tfe* Secretary of the Treasury:

Has that expressed any

visws on this subject?
Mr. Awetrong:

It has not.

The Secretary of Agriculture:

Who is president of that



Mr. Armstrong:



1 think i t i s FranV Knox, President of

the Kttierml Bank of the Republic.
Tta Secret ry of the Tr^aaury:
Ux« Ar&t*tron&:

1 think s o .
Of Salt L«*ke City?

Yea s i r .

Trie Secretary of the Treasury:

Take the name down.

T i l l yea i l e a s e give the nanse of the president
bank of the a s s o c i a t i o n of
Hr. Armstrong:



of the s t a t e


Mr. Frank Knox.

ecr5ti.ry of the '"rsasury:

fhc i? pBaaicient of the

Cl arini, ^ou^e?
« r . Armstrong:

Ux, C. ^# Button, of the ^tah State

l a t i o n a l Bank.
Tbe 3<»oretary of the Treasury:

there do you kaep your

balances, your roeerrMf
Mr. ApKetron^:

Keep meet of theiK in Now York.

Tl:9 «eoratfxy of the Treasury:
:'r. Arr^trong:

Ws are a reserve c i t y , ^alt Lake i s .

T' *i s-urit^rv of tha Trs&eurys
» r . Ar^U-on,-;:

i s ka^

1 know you a r e .

icoet of our reserre money In

Se;£ Ycrk, Bca^i in Chicago, none in
T^« ^^cretary of the Treasury:

¥ c 9 t l y in Kaw York?


t . Louis.

What percentage of your

r e s e r v s s are kept in Nsw York and what in Chicago?


W. W. Armstrong.
Mr. Armstrong:

I would say about three as to seven, three

and seven.
The Secretary of the Treasury:

70 percent, in New York

and 30 percent, in Chicago?
Mr. Ar.atrong:


The Secretary of the Treasury:

What is the custom about

finterest on bank balances in Salt Lake?
Ur. Armstrong:

We pay Zl percent, on bank balances.

The Secretiiry of the Treasury:
Mr. Armstrong:

Ana c o l l e c t checks free?

Tes s i r .

The Secretary of the Treasury:

To what do you regard

that if equivalent in the interest returned on balances —
one percent. — free collection?
Mr. An stron-:

No, 1 don't think so; on our class of

trade, 1 don't think so.

1 don't think this particularly

pertains to us.
T: e flecre^try of the Treasury:

What i s the capital of

your bank?



IL* Secretary of the Treasury:
Mr. Ari.atron^:

|65 f 000.


1 i. ight say, in this connec-

that 1 also represent five other national banks in

33 S3

W. W. Armstrong.

that particular district that 1 have mentioned, being an executive officer of five oountry banks or pining camp banks.
Tf;e Secretary of the Tr-aury:

Those banks, have they

all signified theii acceptance of the Act?
Kr, Artstron_:

Ivary one of them.

The National Cop-

per was the first ens in the West, west of the Mississippi,
in the TTnitt4 States.
The Secretary of the Traaeury:

That is all, thank you.

{VT, Armstrong excused.)
The Secretary of the Treasury:

Mr. Abbott, of Cheyenne,

is next.

T^e Secretary of the Traasury:

Mr. Abbott, what is ycur

V'r. AbVott:


1 an President of the First Natio$-

al Bank, of Cheyenne.
The Secretary of the Treasury:
Mr. Abbott:

What do you represent?

You tiean in the way of banking

1 am simply

The Secretary of the Treasury:
clearing house, do you?

You don 1 t represent the


Gec.E. Abbctt

Mr. Abbott:

No sir, not at all.

The Secret?ry of the Treasury:

You have no clearing house

^r# Abbctt:

No, we have none.

The Secretary of Agriculture:

How many banks have you

Wr. Abbott:

We have four banks, three of w) ion are na-

The capital stock of eaoh is $100,000, and of de-

posits, about te,000,000.
The Secretory of the Treasury:

What district would you

prefer to be attached to?
r'r. Abbott:


The Secretary of the Treasury:

And if not Denvsr, then

Where would you go next, as between Or aha and

Karats City, for instance?
Mr. Abbott:

Or,, ah a.

T^e Secretary of the Tra> sury:
Mr. Abbott:

Yes, because of our

The Secretary of the Treasury:

0, aha?
Omaha being second choioe

and Kaneat City third?
Mr, Abbott:

No, Chicago third.

Th« Secretary of the Tra^sury:

Chicago third.

And it




George E. Abbott.
Kansas City on ycur list at all?
Mr. Abbott?

Not at all.

It is out of our precinct sn-

tirely; we have nothing in sympathy.
The Secretary of the Treasury:

Have no exchanges with

Kansas City and trend of business in any way?
Mr, Abbott:

Hon« whatever.

We don't keep even an ac-

count there.
(Mr. Abbott excused.)
The Secretary of the Treasury:


Give ycur full nac.e, ad-.i

drees and occupation.
Mr. Van Deusen.

H. Van Deuaen, Banker, Roo;- Springs,

The Secretary of Agriculture:

Yon are ^ecrstary of the

fyOtting Bankers' Association?
Mr. **n Peusen:

1 air., y3e sir.

The Secretary of Agriculture:

Have you bsen delegated

to speak in any way for the bankers in Wyoming?
Mr. Van Deueen:

I have.

The Secretary of Agriculture:

In what form have they

•xpressed their wishes?


Van Deusen:

1 have sounded the opinions of the baak-

H. Van Deusen.

ert* through the state, and 1 arc satisfied that the bankers
and the varisd interests of the state are favorable to Denver as the location of this regional, district bank.
The Secretary of Agriculture:

Did they pa3s any reso-

Mr, Van Deusen:

The northern section of bankers have

done ac, and 1 hava correspondence from a set of banks on
the Onion Pacific favorable to Denver,

It is for this lo-

The Secretary of Agriculture:

How n.any banks are re-

presented in that Association?
Mr. Van Deu3en:

We have 103

The Secretary of Agriculture:
Mr. Van Deusen:


The Secretary of Agriculture:
UT. Van Dev9en:

National or state?

In what pfdportion?

We have thirty-one national banVs and

seventy-two state banks.
The Secretary of Agriculture:

How nany state banks would

you say would be eligible, if the law were favorable?


is, that have the requisite capital?
Vr. Tan Deusen:

Frotably half of them.

Th« Secretary cf Agriculture:

Is there any restriction



H. Van Deusen.

in the Wyoming law against
Vr. Van Deusen:


At the present time, y83 sir.

Ti"-e Secretary of the Treasury:

You said there was a reso-

lution passed by the northern bankers?
i'r. Van Deuaen:

Yss sir.

It was circulated the

The Secretary of the Trareury:
Mr* Van Deusen:
you with.

What is that resolution?

1 havs a copy of it that 1 can furnish

I haven't it here.

The Secretary of the Treasury:

Whit is the purport of

Give it* purport.

Mr. Van Deusen:

It simply indorsed Denver as location

for a regional reserve bank.
The flecre ary of Agriculture:

What would be their second

choice, do you think?
*:r. Van Deusen:


The Secretary of Agriculture:

You represent the bank

directly, do you'
*'r. Van De a en:

Yes sir.

The Secretary cf Agriculture:
balances do you carry with Denver?

Wrat percentage of ycur



H. Van Deusen.
Mr. V*n Deueen:

From five to tsn percent.

The Secretary of Agriculture:
Mr. 7*n Deuaen:

From 40 to 50 percent.

The Secretary of Agriculture:
Kr. Van Peueen:

With Omaha?

Why dc you prefer Denver?

Because it is located in proximity,

closer proximity to cur state than Omaha.
The Secretary of Agriculture:

Would it change your nor-

mal current of business if you were attached to Denver, rath
er than to 0u.aha?
iV:r, Van De us en:

Tc a certain extent, 1 presur.e it would.

The Secretary of Agrioulture:

Where does the volume of

business in your con..i.unity go?
VT, Van Deusen:

Goes on east.

The Secretary of Agriculture:

Pcss it coa.3 south or gc

UT. Van Deusen:

To the eaet.

The Secretary of Agriculture:

Yex you prefer to have

your banking relations with a bank in Denver?
*LT. Van Dousen:

8 Q far as regional bank is concerned,


The Secretary of Agriculture:
Hr. Van Deueen:

Tour second choice is Orcah* ?

My second choice would he Omaha.





H. Van Deuaen.


Tfc# t0#*#tary of Agriculture:

Have you got any third

Mr, Tan Deueen:

No third choice expressed.

Xkf Secretary of the Treasury:

Suppose you had to have

a third ohoice, what would you say then?
Mr. Van Deueen:

1 presume it would be Chicago.

1 would

not state that with any authority, however.

The Secretary of the Treasury:

Nor with any grsat de-

gree of confidence?

Mr. Tan Deusen:

No sir.


The Secretary of Agriculture:

Wh«n car. you file that

Mr. Van Deuaen:

This afternocn.

(Subsequently, a rasolution of ?heridan,Wyoming Commercial Club was received and marked "Van Deusen Exhibit
Ho. 1, Denvar, January 26, 1914; also letter from the In1


duetrial Club of Cheyenne, marked Van Deusen Exhibit No. 2,
De ver, January 36, 1C14.")
Mr. Van Peusen:

If you will allow me to rr.ake a state-

ment, not cniy the baakers, but the business can of Wyoaing, have expressed themselves on this question to some extent through the banks, and taking my own view and knowledge



H. Van Deuaen.
of the opinions of the business ren there, 1 think they can
be considered as a criterion of the opinions of business men
in othsr towns in fyo&ins.

Rock 3-rings is two hundred


fciles from Salt Lake; it is four hundrsd milse froi: Denver,
and 1 find, upcn investigation, that from 75 to 90 percent. j
a.ore business is conducted with Denver than with Salt Lake



We are in this portion of Wyoming that Kx. Armstrong;

would include in the district of Salt Lake, the weotarn one*
Tb# Secretary of the Treasury:
Salt L*ke?
i^r. Van Deusen:

You don't want to go to

We would not care to.
(Mr, V&n Deusen excused.)

The Secretary of the Trmae^iry:

Ur. Blackwell is the next'


After Vr. Blackwell, we will have Mr. Roof, of


He might be ready to come rrromptly to the stand

after ^r. Blackwell.
State your full name and address and occupation.

Ux. Blackwell:


N. Black-veil, Raton, New Mexico, Pres-;

idtnt of the First National Bank.




0. I. Blackwell
The Secretary of the Treasury:


Do you represent any bank-

ers1 Association?
Kr. Blaokweli:

Yes sir, I am Chairman of the Executive

Committee of the New Mexico Bankers1 Association.
The Secretary of the Treasury:

Do you ccme with any au-

thority fro* that Association?
Mr. Balokwell:

Yes sir.

T**o Secretary of the .Treasury:

Have ycu resolutiona

with you?
ir. Blackwali:

The ^entlenen hers in Denver have the

It was passed by the Association at its meet-

ing last week in Albuquerque.
The Secretary of the Treasury: What is the purport of it? j

Mr. Blaokweli:

The purport of it was

indorsing the

efforts put forth by Denver for the establishment of a regional bank here,
The Secretary of the Treasury:
by Denver?


What efforts put forth
Hag Denver been puttingAefforts in New ?<*exico? j

fcr. Blackwells

They had a representative before the As- j



The Secretary of the Treasury:
not had any representative there,

1 see.

Suppose they had

hat would you have done?



C. N. Biackwell.
Mr. Biackwell:

We w:uld have indorsed Denver.

The Secretary of the Treasury:

Wr. Bl&ckwell:

The same thing?

The same thing.

Th« Secretary of the Treasury:

Well, are ycur relations,

trade relations, normally with Denver, cere sc than rith any
other city?
IT. Black#ell:

Yes sir.

The Secretary of the Treasury:

Do you keep your ressrves I



Ux. Blaokweli:

Tea sir.

The Secretary of the Treasury:
Mr. Blaokweli:

To what extent?

I should say 30 percent.

The Secretary ofthe Treasury:

Where do you keep the rest

of them?


Mr, Blaokweli:

Well, we have

accounts in Kansas City,

also in Chicago and New York.
The Secretary of the Treasury:
ed, what proportion?

Well, how is it distribut-

20 percent, in Denver, how Luch in


Kansas City?
Mr. Blackv.-ell:

Probably 10 percent.

The Secretary of the Treasury:

That is 30.

Where is



the rest of it?





Mr. Blackwell:

N. Blackwell.

The rsst would be in Chicago and New

The Secretary of the Treasury:

More in Chicago than in

low Tcrkt
Mr. Blackwell:

Ho sir, the majority of it would be in

Hew York.
The Secretary of the Treasury:
choice after Denver?

Well, what is your second

What would be the core normal course

of business for you suter Denver?
Mr. Blaokwell:

It would be Kansas City.

The Secretary of Agriculture:

Are you in the western or

the eastern part of the state?
tr. Blaokwell:

Extremely northern portion.

The Secretary of the Troaaury:
Mr. Blaokwell:


Raton, yes sir.

The Secretary of Agriculture:

How with this section,

the southeastern-central p^rt of the state?

Where would

it go?
V'r. Blackwell: In New Mexico?
The Secretary of Agriculture:
Mr. Blackwell:



They are n.ore convenient to Kansas City.

Secretary of Agriculture:

These two railroads lead


C. K. Blackwell.
directly northraat?
Kr. Blackwell:

Y38 sir.

The Secretary of the TrQ&8ury:

la it your judgment that

the general convenienoe and customary course for business
throughout the entire state would be beat subserved by as8ooiation with Kansas City or with Denver?
of the entire state now.
Nr, Blaokwell:

1 ai speaking



Well, rr.y opinion ie the entire state woul^L

be better served from Denver, although the southeastern cor-i
ner —

that is known as the Pecos Vaijey section —

tle core convenient to Kansas City.

is a litf

They can be served

from Denver just as well as Kansas City.
The Secretary of the Traasury:

How would they get to

Mr. Blaokwell:

They would coae to Araarillo, Texas, and

then over the Colorado & Southern.
The Secretary of Agriculture:

Is that the course of

trade for that section?
Mr, Blackwell:

1 think the general trer-.d of it would be

towards the east, for that section.
The Secretary of Agriculture:

it is

directly north?

But on this other section



C. N. Blackball.

!*• Blackwell:

North and so'ith.

Tie 8scrstary of Agriculture:
Mr, Blaokwell:

Much of it go ir< south?

Vsry little.

Th« Secretary of the Tr3a8ury:

The bulk of ycur business

at Raton is coal?
Vr. Blackweli:

T'-at is ^ne of the heavy industries tl ere,

but we are in a heavy cattla and sheep section.
Ths Secretary of the Treasury:

In the cattle and 9hasp

business, that livestock business goes 2cstly to which place,
Kansas City or Denver?
Mr. Blaokwell:

It is divided.

Ths Secretary of the Treasury:
Mr, Blaokwell:

In about what proportion?

1 should eay probably 60 percent, vrculd

go to Kansas City and 40 to Denver, —
fht Secretary of the Treasury:
Mr, Blaokwell:

tvis section.

SO and 40?

Tee sir.

The Secretary of the Treasury:

And the aortal course of

exchanges,as bstwaen Penvsr and Kansas City, is what?
Mr, Blaokwell:

About equal.

The Hecretury of the Treasury:
>r. Blaokwsll:

Tee sir.

Ths Sscretary cf the Treasury:

About 50 and 50?

Have you a third choics?



C. 9. Blackwell.

VT. Blackwell:

Wei:, Chicago *ould probably be third

The Secretary of the Treasury:
Mr. Blackwell:

Chicago would be third?

Tee eir.
(Xr. Blackwell excused.)

(Resolution of Executive Corrrrittee of New Mexico Bank
•Xs1 Aaaociation received and marked "Blackwell Exhibit No.
i, Denver, January 26, 1914.")

The Secretary of the Treasury:

State your full name and

VT. Roof:

Fred A. Rcof, Banker, Pueblo.

T^e Secretary of the Treasury:
Mr. Roof:

And your occupation?


Th« Secretary of the Treasury:

What bank are you associat-

ed withT
Mr, Roof:

The Minnequa Bank of Pueblo, State Bank; also

engaged in national banks in other points.


Pueblo here.
Th# Secretary of the Treasury:


Are you representing any



Fred A. Roof.

association of bankers or olearing house associations?
Ux. Roof:

1 a& representing the Pueblo Clearing House.

The Secretary of the Treasury:

By a resolution, or

. t

is your authority evidenced by resolution?
Mr. Roof:

Ho, 1 think there is no resolution passed.

There is a representative of each bank in Pueblo hare today,
The Secretary of the Treasury:

What city do you prefer

to be attached to, «r. Roof?
Kr. Roof:


The Secretary of the Tr asury :

How far is Pueblo from

Kr. Roof:

130 miles.

The 8ecretary of the Treasury:

The bulk of your ex-

changes and your business is with Denver?
Mr. Roof:

The greater percentage, yes sir.

The Secretary of the Treasury:

To what extent do you keept

reserves in Denver?
Hr. Roof:

Probably 50 percent, of our bank reserves are

kept here.
The Secretary of the Treasury:


And the rest where? .,

Kansas City, 8t. Louis, Chicago and Hew York.



Fred A. Roof.

The Secretary of the Treasury:

Does Kansas City have the

largest proportion of the remainder?
Mr, Roof:

No, Chicago and Hew York about even; Kansas

City, comparatively small.
The Secretary of the Treasury:

What wouii be ycur second

Mr. Roof:


The Secretary of the Treasury:
Mr. Roof:


I should think that.

The Secretary of the Treasury:

Suppose Chicago could not

be considered, then what would be your second choice?
Mr. Roof:

Kansas City.

The Secretary of the Treasury:
Mr. Poof:

Yes sir.

As against Oir.aha?

On that point, however, 1 have not

consulted with the other bankers.
The Secretary of the Treasury:

You are speaking for your-

Mr. Roof:

Yes, on that particular point,*

Tl e Secretary of Agriculture:

How rrany banks are there

in Pueblo?
Mr. Pocf:

Six, 1 think.

Three nationals and three


Fred A. Roof.
The flecretary of Agriculture:

as to

Mr. Roof:

Are the state banks strong

oe eligible, if the law permitted?
One would be eligible only, and that is a sav-

ing* bank.
The 8e cretary of the Treasury:
Wr. Roof:

A savings bank?

Yes, a savings association and trust company.

The Secretary cf Agriculture:

You are President of the

Colorado Bankers' Aosociation, are you?
Mr. Roof:

Yes «ir.

The Secretary of tne Treasury;

Has your Association had

any neeting to act upon this question?
Mr. Roof:

T. e Executive Council did last weel.

The Secretary cf the Treasury:
Mr. Roof:

What was the action?

They indorsed Denver, and there should be a

resolution filed with ycu, which is to that effect.
Tt- Secretary of the Treasury:


fill you file such a

Mr. Roof:

1 will sae that it is filed.

(The resolution of Colorado Bankers1 Association sub•eminently received and ; arked nRoof Sxhibit Ho. 1, Denver,
January 36, 1914.")
The Secretary of the Treasury:

What do you think the


Fred A. Roof.

sent i^ent of the bankers of the Ptate would be with respect
to Kansas City ae an altarnative after Denver?

If Denver,

I mean, could not have a reserve bank?
Mr. Roof:

1 phould think 5t would be equally divided as

to second choice between Kansae ^ity and Omaha; probably the
northern part of the State for Omaha and the southern and
western part of the State for Kansas City.




The Secretary of the Treasury:

Would you think it wise,

in any circumstance.., to divide Colorado in the creation of
a district?
Mr. Roof:

No eir, 1 would not.

The Secretary of the Treasury:

You think the'hide had

better go with the hair?"
Mr. Roof:


Tes air.

The Seerat ry of the Treasury:

What would be a fair part

and divieion, as between Omaha, for instance, and Kansas City,
assuming that each had a reserve bank; to what extent should
the northern part of the State go, for instance, to Omaha?
Mr, Roof:

1 ehould think a line east and west through

TLe Secretary of the Treasury:


A line eaet and weet


Fred A. Roof.

Mr. Roof:

Yes sir.

The Secretary of the Treasury:

How much of Denver would

you put in the Kansas City district, in cougar is on with Omaha?
Mr. Roof:

Well, Denver selected a point for itself,thcase <

points, I don«t thin*:, should be put with Kansas City.


bly Colorado Springs iright be included, and north of that


say south of that would be Kansas City and north, Omaha, would
be my judgment, if you found that to be necessary.
Tie Secretary of the Treasury:

You don't think this State

should be divided by a north and south lira, under any conditions, that is, that half of it should go, for instance,
to San Franciscot
Mr. Roof:

Oh, no —

1600 miles to San Francisco.

The Secretary of the Treasury:
Mr. Roof:

Or to Salt Lake City?

Well, there might be —

no, I would say Ho.

There is a little part of the territory that would be more
easily accessible —

that is Salt Lake would be more easily

accessible, but the natural current of our Commerce would
be towards the River or Denver, unquestionably, of the whole
The Secretary of the Treasury:
ness is eastward?


T&« general trend of busi-



Fred A. Roof.

fcr. Roof:

Yes sir, in this state.

The Secretary of Agriculture:

Taking a line east of Den-

ver, is the trade th9re towards Denver or towards the east?
V'r. Roof:

Unquestionably all the trade in Colorado east

of Denver is towards Denver, unquestionably.
The Secretary of Agriculture:
Igr, Roof:

It ocmes back to Denvsr?

It cornea back to Denver and Pueblo, yes air.

The Secret ry of the Treasury:

How far east does that

•phere of influence extend7
Mr. Roof:

1 would 3ay —

1 ai talking about Ccioradc, at

least as to Colorado.
The secretary of the Treasury:

1 at: speaking of towards

Kansas and Nebraska, going eastward, how far does Denver's
sphere go, do you think?

Hr. Roof:

1 couldn't answer intelligently myself.


Pueblo we get some considerable business for, say, one hundred miles eiist of the State Line —

one hundred and fifty.

(Mr. Roof excused.)
The Secretary of the Treasury:

till you kindly give your

full name and occupation?


Henry C. Hall, Lawyer, Colorado Springs.


Henry C, Hall.

The Secretary of the Treasury.

Do you represent any as-

sociation, Vr. Hall£ cr organization of Colorado Springs?
Mr. Hall:

1 aaa here at. a member of a delegation from the

Chamber of Comnarce of Colorado 3prings.
TLe 8ecre ary of the Treasury:

You know our problem, Mr.

If you have any suggestions to o'fer, we will bs glad

to receivj than,
yr. Hali:

Of oo-ira* Colorado Springs, li;-e the rsst of

Colorado, feels very strongly in support of Denver in this

Our idea of tba

natural division of this terri-

tory is that we should start with what is known as the Dry
Belt east cf us, that is to say approximately, as indicated
in fact this norning, about the lOCth parallel, cr where
the tiaie change* from central tc mountain tine, for the reason that it is about there that irrigation, as a

part of

a rioultuie, begins, and stretching fron there westward to
the Pacific Coast irrigation is i ore fcr lees in use, and a
division which wovld give, let us say, Denver a


bani: and San Franciyoo another, these two regions would embrace between then practically all the irrigated lands that
there ie in the United ?-atea.

Of course those who are ex-

part faxuere on the lands of Illinois or Arkansas have very






- . .

Henry C. Hall.

little comprehension of the probleme that arise in connection
with irrigati n, the irrigation works, the maintenance and


storage of water and the a plication of water to land by means
of irrigations systems*


Our idea wouldAthat such a Belt would stretch north and
south of us, that it would embrace Wyoming, it would embrace
Utah, embrace the mountains of Colorado because although more
abundantly watered, still irrigation is used in the meadows
and so on in the mountains.

It would embrace New Mexico,

it would ta*e in at least part cf Arizona, which lies just
south of Colorado, and it would take in the Panhandle of

The Secretary of the Treasury:

Well now, reducing this

to the question of Colorado 3prings itself, and as to the
disposition of Colorado Springs, you say it would desire,
of course, to be attached to a district of which Denver
should bt the headquarters for the reserve bank?
Mr. Hall:
Yes air.
The Secretary of the Trsasury:

Now, what would be Colo-

rado 8prings* second choice?
Kr. Hall:

Wel^, 1 air. not authorised to say, by the Cham-

ber of Commerce, what would be the second choice.

1 can



Henry C. Hall.
give you some individual ooinicns, for exaaple, the



rado Title & Trust Company, cf which I am a director, I think
our choice \ould be Kansas City for seccnd.
The Secretary cf the Treasury:

That wculd be the next

point with which you have the largeat amount cf business,
normal business, —

Kansas City?



Mr. Hall:

No, our normal business with Kansas City is

not BO very large.

Now, for example, the Trust Company,

of which I have just spoken, has reserves cf approximately

It keeps $100,000 in New York, it keeps another

fIOC,000 with ether b-mks in Colorado Springs.
The Secretary cf the Treasury:

De you keep those in

national barks altogether, those reserves?
Mr. Hall:


It keeps an eighth, I should say,

that wculd be a quarter each —

here in Denver.


Then in

Chicago about $30,000.00, in Pueblo about $15,000.00, in
Kansas City only about $13,000.00.
The Secretary cf the Treasury:
large reserve in New York?
Itr. Hall:
For convenience.
The Secretary of the Treasury:

Why do you keep such a

Yours is a savings bank,




enry C. Hall.

ing« bank, 1 understand?
Mr, H a n *

N O , it is a title and tr at company.

The 3ecre ry of the Treasury:

Do you do a general


ing business?
Mr, Hall:

Tee sir, checking accounts.

The 3eoretcjry of the Traasury:

And you koep a reserve

there for purposes of exchange?
tfr. Hall:


The Secretary cf the Treasury:
ed to keep —

And yon are net requir-

by the state law hsre you are not required to

keep reserved of that magnitude, are you, in the national
Vr. Hall:

Oh, no.

The Secre ary of the Treasury:

You could keep them in

state bank8?
Mr. H a l } :

Yce sir, we could.

Th© Secretary of the Treasury:

But you prefer to ksep

then* in national banks?
Mr. Hall:

Y3«, we keep our reserve in New York in a

trust coupany.
The Secretary of the Treasury:

national banks in New York?

You den't k?ei it in




Henry C. Hall.
Mr, Hal: :

1 a

A Spectator:
Mr. Hall:

not certain v.hether any of ours


The Hanover National.
New, this, region, jentlerren of the Con. it-

tee, embracing as it would, fron. five to six hundred thousand square miles, and with a population ranging from about two
to three million would, in the first place, represent a respeotable part of the surface of the Hnitad States, although
population is relatively sparse.

It would represent a di-

versity of industry, because of our n.ining, quarrying, and,
by mining, 1 rn^an ccal, gold, copper mining —

precious met-

T^e Secretary of the Treaa"ury:
is limited.

E cuse me, as our time

That data has been brought out befc e, per-

haps§ but, considering the requirements of the Act hsre that
the district shall be apportionsd with due regard to the
convenience ard customary course of business, wo^iiyou say
that we would i e carrying out that provision of the Act to
embrace Montana, for instance, in this district?
Mr. Hall:

1 should think it doubtful, unless it was the

lower part of Kcntana, but the present railroad connection
extending into Montana J ay change that situation.



Henry C. Hall,

The Secretary of the Treasury:

Yes, but has not t1 is

Committee got to act, in a large measure

with respect to

established facts?
Mr. Hail:

I presume it must, and by what is manifestly



. The Secretary of the Treasury:

To what extent would the

northern part of luahc, fcr instance, be included?
Ur, Hall:

1 should think that would be remote from us.

The Secretary of the Treasury:

Take Arizona and Korthen

Mr. Hal :

leix, we find as a matter of actual trade con-

d tione, that our wholesale grocers supply those regions,
and the wholesale house distributing points, for instance,
for that part of the country, are largely Denver, Colorado
Springe and Pueblo.
T&a Secretary of Agriculture f

Mr. Hall, could you not

get a district in which the wh le area would normally be
at present
covered by the ircvement of counoditiee if you tcck one towards the east?
The Secretary of the Treasury:
as the Secretary means —

Extending north and south

east and rest wculd be rr.ore 16gi?a








Henry C. H a n ,
Wat, Hall:

That would be illogical to our miads, because

we get out of the irrigated lands into the non-irrigated
The Secretary of Agriculture:

Do you think a district

ought to be selected with reference to a particular kind of
Mr. Hall:

Not solely, but 1 think that is one of the rea-

Tfrt Secretary of Agriculture:

Just what figu« would

that cut in this problem?
Mr. Kail:


8imply one of the factors, as we would have

to dial with agricultural securities of various kinds,
The Secretary of Agriculture:

The whole district would

pass on those cases, whether it were arranged one way or the
Ur« Hall:

Well, 1 heard that expounded this morning, and

X an not prepared to discuss or analyze that.

1 am only

giving you our view of it and the way we look at it.
bility is a Biain point for us, and we


know by exjarience

that if the regional bank were placed in Kansas City, there
would ooia tlaes of floods when Kan-as City is not accessible for a week or two weeks at a time. The
Federal Reserve Bank of St. Louis

Secretary of Agriculture:

Suppose yo'; had a branch?



Keitry C. H a n ,
Mr. Hall:

A branch, wall, that 1 will say 1 an not

prepared fully to di9cu38.

It ae^ms to us, however, that

if this region is i.ot entitled to a regional bank, iz should
at l^ast have a branch in Denver.

It might be that a branch

would suffice, but our feeling is that circumstances hsre
would warrant the establishment of a regional bank and ??ould
aid in development of the region and, consequently, benefit
the whole country.
The 5ecre:ary of the Treasury:
Mr. Hall:

Thank you.

There is no part of the region 1 have indicat-

ed that is not accessible to and from Denver.
(Mr. Hall axoussd.)
The Secretary of the frsasury:

T believe that exhausts

th# list of witnesses whe have been presented hsre.
Mr* Moray?
tlfc Secretary of the Treasury:

Give your full name, ad-

dress and occupation*
Ur. Moray:

John f. Moray, President of the Moray Mercan-

tile Corrpany, Wholesala grocers.
The aecret ry of the Treasury:

bmsineTs here?

You are engaged in the




John I. Moray.
Mr. Moray:

Yea sir.

The 8acretary of the Traasury:

Ha/e you got a map whioh

indicates the sphere of your operations and distribution?
Mr. Moray:

Y-s sir.


The Secretary of the Tr3asury:

Frofc Dentedr in your par- '

tioular line?

Yes sir, 1 have a map here, in a general -vay,

on the wholesale grocery business, and also one on dry gooda,
one on boots and shoes.

They have been prepaxsd by others

in those lines.
The Secretary of the Treasury:
Ifr. Morey:

You might file those maps.

This one (indicating) is marksd Wholesale Gro-

ceries; this one that is not marked —
The 8eoretary of the Treasury:
Mr. Morey :

that is very rough, sir.

Let us see those.


Tbie one is boots and shoes and caps (indicat4

is far as 1 know, the wholesale grocery cne would

be Tery similar to the wholesale hardware also.
The Secretary of Agriculture:

j fc

Somebody was to give us

that, I believe.
yr. Morey:

I don(t knof, sir.

The Secretary of tHI Troasury:

Woaid you not undertake

to raake up a map which would show the shading off of the dis-


John W. Moray.

tribution as it gets farther away from Denv3r, a composite
tap showing these several phases, that might be sent to the I
Com&ittee a little later?
Mr. Morey:


I couldn't do it myself, but 1 thin, we could

get together and do that.
The Seorotary of the Treasury:

We should like to have

•uoh a ttp, that is, you can indicate —

you know whefce the j

trade is thickest, where it is


concentrated, and show- i

ing as it thins out to the ext3rior limits of distribution, •
and send that map to the Reserve Bank Organization Committee!
at Washington.
yr. Morey:

Yes sir.

1 hafesome general figures, if you

w a n t theiii.

Th# Secretary of the Treasury:
Mr. ilcrey:

If you will read them.

The total dry goods jobbing business, includ-

ing furn shings. and hat business cf tha city of Denver,
amounts to approximately fo,000,000 a ysar.
The wholesale boot, shoe and rubber business anounts to
about $3,000,000 a year.
The wholesale drug business aaounts to about $3,000,000.
T&* wholesale

rocery business to about $20,000,000.

The whcleiale hardware business to #1*50^-^000; and 1 have


in this report also the con iesicn men and fruit



J'hn W. Morey,

i-Toduce men, although 1 understand they have a separate r e - i

preeentative hsre, of about $S,C 0,000, from the city of
Denver alcne.


Then 1 have included in this list information

that has been given to me from Pueblo, Colorado Springs and j

the other cain jobbing points in Colorado.

don*t know whether you wish me to include this.




Springs' annual wholesale business, exclusive of manufacture-s,
about $3rG0C,00Q; Trinidad, $2,5C0,C00, and Pueblo,

Pueblo does not include any manufacturing.

The Secretary of the Treasury:

Will you fils that with

the stenographer?
Wr. Mcrey:

Yes sir.

(The paper, so identified, marked "Morey Exhibit
No, 1, Denver, January 36, 1914.*)
The Secretary of the Tr aaury:

From your knowledge of

the tra^e conditions in this territory, what would be the
tore nort-al ccuree cf things, as betv/aen this territory^, the
Colorado territory and Kansas City or 0n;aha?

Is more busi-

ness dose, is there a greater exchange of ccm odities or
business between Kansas City and the Colorado trade than betwaen Ouaha and Colorado? Mr.
Federal Reserve Bank of St. Louis


Well, 1 will say it was almost a stand-off,




John W, lorey.

acmawhere near a atand-off, according to parts of the .ate
The Secretary of the Treasury:
Mr. Moray.


at ft whole?

So far as the territory is affected, New Mex-

ico and ths southern part of the state, we Come in conflict
with Kansas City; in the northern part of the state and up
in Wyoming and the western end of Nebraska territory, why,
it is ent rely Ocaha and Kansas City doea not get in there
at all.
The Secretary of the Treasury:

Where do you get your chief

competition, Kansas City, Omaha, Chicago or St. Lcuis?
Mr, yorey:

We get it largely in our particular line, the

wholesale grocery business, 1 should say from Chicago, Omaha
and Kansas City —

core from Chicago, 1 presume, than any-

here else.
The Secretary of Agriculture:

Is that true of the south-

ern as well as the northern part of the state, from Chicago?
XT. llcrey:

1 don't believe Chicago gets in a* strong in

the southern part of the state as
eaat3rn and Teatern part.

they do in the northern,


The Secretary of the Treasury:

What is that due to, freigl

ratea or greater activity on the part of their salesmen7



John W. Morey.

Mr. Morey:

Wall, more activity on the part of their sales-

men, and the faot that this was originally all Chicago territory, in the wholesale grocery business, and Denver business
hag grown up at the same time that the Omaha and Kansas City
business has.
The Secretary of the Treasury:

What would you think would ,

be the more normal thing to do, assuming that a reserve bank
was not established here in Denver, that itbe attached to a
district where Kansas City would be the headquarters, or a

of which Omaha would be the headquarters, treating

the state as an entirety?
Mr. Morey:

1 would say Chicago.

The Secretary of the Treasury:

No, I am speaking now of

Kansas City and Omaha.
Mr, Morey:

Of thosatwo alone?

Pretty hard to state;

in our line, possibly Kansas City.
The Secretary of the Traaeury:

Well, disregarding either

of them, you think Chicago would be next?
Mr. Morey:

Yes, that would be first.

T^e Secretary of the Treasury:

Disregarding wither Kan-

sas City or Omaha, Chicago would be first.

(Mr. Morey excused.)

Thank you.



W.P. Tidwell.

(The three mape presented by Mr, Horsy, mark 3d -Morey Exhibits Nos. 1, 2 and o, Oenvar, January 36, 1914.)
The Secretary of the Treasury:
Mr* Tidwell:

What is your occupation?

Secretary of the Denver Fruit Association

and Secretary of the Colorado ?tate Associations, wholesale dealers.
The Secretary of the Trsasury:

Have you something you

want to submit?
Mr. Tidwell:

T>e fruit industry in entirely different

from any cthsr industry we have is what is known as the Rocky
Mountain section, which embracas Colorado, first, ^estarn
Nebraska and Kansas, the southern portion of 1-aho, southern
Utah, Northern New Mexico, the Panhandle district of Texas
and a portion of Oklahoma.

The fruit and produce industr •

in the State of Colorado is only twelve years of age, which
was about the first business we ever had.

The volume of

bue:n3ss, to ^ive you it in round figuras, is $33,502,196,53 ,
The 8 cret ry of Agriculture:

What area does tlat include,

"hat that you mention?
;/r, Tidwell:

city of


Practically all of that is cleared in the



!"• D. Tidwell.

The Secretory of the Treasury:

No, but what area do

these figures cover?

ilr, Tid-reli:

The products principally of Western Nebraska

and Kansas, Colorado, Northern Texas, Northern Ns* Meaico,
Utah and South ?rn Idaho.
The Secretary of the Treasury:
Mr. Tidwsll:

One year.

For a year?

Thii is practically all cleared

through the city of Denver.
This Industry is different from a great many others, oft
account of its perishacla nature, and it is a difficult matter for us to get the r. ney, except at home, and in that 3ec>i
tion, so far as the fruit and produce industry in concerned,;
Denv3P is horns.
Now, a regional bank, — 1 am free to con-


, fees 1 air not posted on the law, but my idea of a regional


bank would bs a sectional bank.

The section 1 have outlin-j


ed, so far as our industry is concerned, is a section separ-^


ate and distinct from any ether part of the country.

Cur |

business licjs in ths exchange of goods of a corishabie na- |
turs that imst be converted into cash rapidly.

In the east-

ern part of ths country all of ths fruit business, practi
cally, is handled by what is known as commission merchants.
Federal Reserve Bank ofIn
St. Louis
this country it is handled exclusively by wholesals dis-


W. P. Tidwell.
tributors who buy for cash and the goods are sold all over
the country.
The Secretary of Agriculture:
this business?
Mr. Tidwell:

What is your relation to

1 did not get it.
I am Sec etary of the Denver Association

and also of the State Association.
The Secretary of Agriculture:
Mr, Tidwell:

Fruit Association?

Yes sir, fruit and produce association,

in which my duties in the few years 1 have been with them
are to compile these figures and to know just how the business trends.
The Secretary of Agriculture:

To what extent are the

fruit growers in this section organised for production and
Mr. Tidwell:

Well, sir, the organization of associations !

to handle the business is in its infancy, and there is a
v?ry strong feeling of friendship and co-operation between
the wholesale distributor and the grower.

The grower has

his associations, and in some places one lean's orchard is
vjry, very small, and they have to combine in order to move
out carloads and our ratas of freight are so high that we
have to neve a carload business exclusively.



W. D. Tidwell.
The Secretary of Agriculture:

la there much co-operation

among the producers in shipping?
¥r. Tidwell:

Gradually becoming stronger every day, sir.

The Secretary of Agriculture:

It is not organized any-

thing l U e the Califcraia Fruit Growers1?
M*. Tidwell:

Ho, but to a

large axtent, they are getting

in that way, and the California prcduot, you understand,
passes through the city of Denver as a diversion point.
The railroads, it will be explained to this Committee one
feature that they havj not touched upon, is the diversion
business in perishables.

It takaa an immense amount of

•oney, and all godda reaching from the Pacific Coast, practically all of them center at Denver as a diversion point.
We are in a position to reach Minnesota or Louisiana.


After you get further east, it ia different.
field of distribution in Denver.
coney tc dc that.

It is a wider

Now, you realize it take*

Our tanks have to carry that;



not borrow money in Chicago or cannot borrow n-.oney in New
York; have to borrow it at our ho&e banks, and in the discussion with the various people interested in this line, who
have been nadied, *e know that the reserve of tha Denver banks
is very heavy; on account of peculiar location, they have to



W, D. Tidweil.

carry a heavy reserve here.
The Secretary of the Treasury:
Mr, Tidwell:


Well, if we had a l i t t l e panic in this

country, i t takes time to get money.
Th« Secretary of the Treasury:

Carry i t because they con-

s t a n t l y faar a panic?
Mr. Tidwell:

fe?»r cf

1 w i l l say we are inAa panic a l l the time.

Th* Secretary of Agriculture:
Mr, Tidwellr

We are going to change that.

That is nhy we .fant a regional bank here.

The Secretary of Agriculture:

At what season of the y a r

i s ynrur dercand the heaviest?
Hr. Tidwell:


f e l l , s i r , in the fruit industry i t w i l l

run alens fro* the f i r s t of September up to the f i r s t of

Then we al90 have a heavy den and in the early

The Sacrsjary of Agriculture:
Ui. Tidwell:
that kind.

For cultivation?

Jet s i r , purchase cf boxes, and things of

Of course during the suiwiier, — well, the moveS

ment really begins along in July.
Th$ S^cretajry of the Treasury:
do you g i r t theBe lanke?
 of cote

What sort of


I voar, i s th^re any oecvliar

c;iv»n b-r the fr^uit assooiations?




W. D. Tidwell.
Mr. Tidwell:

No sir, only the rsgular bankable paper.

The Secretary of the Treasury:

How is it secured?

••«&, what do they exaot in the way of security?


You can-

not give warehouse receipts and things of that kind?
Hi. Tidwell:

We cannot at the present tine, but we hope

to ba able to in a short time; hope to be able to have a
standard so that when we give a bill of lading for apples
it will have the same •."feet as a bill of lading for cotton.
As 1 eay# the industry is in its infancy.
The ?ecretary of Agriculture:

Art you standardizing your

Mr. Tidwell:

Yes sir, now have a standard barrel in the

United States and the aiple box will be standardized, in this
session of Congress; the saie way with berry boxes and various other things; standardsar3 gradually bein^ created.
The 8eoret<xry of Agriculture:

Your first choice is for

Mr, Tidwell:

Denver first, always.

The Secretary of Agriculture:

What would be your second

Mr, Tidwell:

It is a j.ost difficult question to answer,

our people depend wholly upon Denver for their money.



W. D, Tidweli.
The Secretary of Agriculture:

Over what arsa is yoUrpro-

duct distributed?
Mr, Tidwell:

At the pre3$nt time, the Pnited ^tates of

Am erica.
The Secretary of Agriculture:
Mr, Tidwell:

New York calls upon us; Pennsylvania.

The Secretary of the Trs^eury:
to Hew York?
Vr. Tidwell:

Where do you send it first?

To -vhat extent do you send

What percentage cf your business, 1 mean?
Of the products

of Colorado and TTtah, about

15 percent.
The Secretary of Agriculture:
Mr. Tidv/ell:

Chicago gets about 25 percent.

The Secretary of Agriculture:
Mr. Tidwell:

And to Chicago?

Kansas City?

Kansas City sets a very small percentage of

the fruit business.
The Secretary of Agriculture:
Mr. Tidweli:

Hew Orleans?

New Orleans gets, possibly, 5 percent.,

about the same as Kansas City.
The Secretary of the Treasury:
Mr, Tidwell:

St, Louis?

St. Louis don't get so much even as Kansas

City, although that has grown in this ^ast year, —


re that the business has &rown quite a little bit with St.


H D. Tid.vell.
Louis this
The Secretary of Agriculture:

This industry is growing

Well, sir, twelve years a^o we didn!t have

Mr, Tidwell:

We have $33,000,000 now.

Fifteen years a x the

fruit industry of the nnitsd States was only $50,000,000;
fifty years ago t) ere wasn't any at all.
The Secretary of Agriculture:
n't a M t e t much of it.

A good deal, but they did'



J*r. Tidwell:

It was all for local consumption; inter-

state business was not considered.
The Secretary of the Treasury:
Mr. Tidwell:

Inadequate transportation.

And we didn't have the area, either.

The Secretary of the Treasury:

File that paper with the

(The paper submitted by Mr. Tidwell, marked "Tidwell
Exhibit No. 1, Denver, January 36, 1914.")
The Secretary of the Treasury:

Give your full name and

your occupation.
Mr. Lloyd:

William J. Lloyd, General Manager, Mountain



William J. Lloyd.

Division, Western Union Telegraph Company.
The Secrat-.ry of the Treas ry:

Now, V<r. Lloyd, you are

fair.iliar with the problem before this Committee.

Can you

shod any light on the question as to whether Denver should
have a regional bank and as to whether this district is one

ought to be create*?

Mr. Llo/d:

Only in this, Mr. Secretary, that the Tele-

graph Company four years ago made Denver the administrative
center for Montana, Wyoming, Idaho, Utah, Colorado, New !*3Xioo, Kansas and Nebraska.
The Secretary of Agriculture:
Mr. Lloyd:

All of Kansas and Nebraska?

Yes sir, all of Kansas, yes sir, the eight

Within six months we have made Penver the fiscal

agency and all moneys, all revenues from these eight states,
are remitted now to the fiscal agent at Denver.

Out of

these revenues we pay the o;9rating expenses, maintenance,
repalr3and construction and all the natural expenses of the
The Secretary of Agriculture:

To what extent are you de-

pending on banks in this comiiiunity?
Mr. Lloyd:


Secretary of the Treasury:

To what extent do you think



William J. Lloyd.

that has a bearing upon the economic ^robleir involvad in
the division of the country into these districts

and the

establishment of these reserve banks?
jjr, Lloyd:

1 am simply 9ubr.itting this to you as a mat-

ter of information to ahow you the judgment of the Telegraph
Company in


The Secretary of Agriculture:

That it was the convenient

center fcr that distribution?


Yes sir.

It was the center selected after

careful study of the situation.
The Secretary of the Treasury:

^hat sort of facilities have

you with Kansas City, telegraphing Kansas City?
Mr. Lloyd:


The Secretary of the Treasury:
Itr. Lloyd:



The Secretary of the Treasury:

How long does it take

to get a message through now under normal conditions to Kansas City?
Mr. Lloyd:

Our time limit on --

The Secretary of the Treas ry:
Mr. Lloyd:

Quickest dispatch.

Our time linit on business is supposed, for

90 percent, of the business, within a period of ten minutea.



William J. Lloyd.

The Secretary of the Treasury:
yr. Lloyd:

Within ten minutes?

Yes sir.

The Secretary of the Treasury:

And the same with respeot

to Omaha?
Hr. Lloyd:

fhe same on all trunk routes.

The Secretary of the Treasury:

And you have ample trunk

routes to Kansas City and to Omaha?
Mr. Lloyd:

Omaha, Chicago, San Francisco, Los Angeles,

Salt Lake.
The Secretary of the fre^jury: And this istoeWestern Union?
kr. Lloyd:

This is the Western Union, yes sir.

The Secretary of the Treasury:

That is all.

Thank you.

(Mr, Lloyd excused.)
(Paper submitted 3y Mr, Lloyd, marked"Lloyd Exhibit Wo.

Dsiiver, January 36, 1914.")
The s e c r e t a r y of thti Treasury:

What is your f u l l name and'

Mr. Allen:

W. P. Allen, Assistant Treasurer, Mountain

S t a t e s Telerhone & Telegraph Company.



W. P. Allen.

The Secretary cf the Treasury:

is that a part of the

American Telephone & Telsgraph Company?
px, Allen:

Yes sir.

The -ecret^ry of the Treasury:

What sort of telephone

facilities have you got with Kansas City and Omaha?
Mr. Allen:

Ample, sir.

The Secretary of the Treasury:
of service frequently or
Ifr. Allen:


Not vary frequently, no sir, vory infrequent.

-The Secretary of the Treasury:
)kT. Allen:

Is the service good?


The Secretary of the Treasury:
yr. Allen:

Do you have interruption


Yes sir.

The Secretary of the Treasury:

Hon long does i t take you

to get connection?

Mr. Allen:

I c a l l 3d up in my rooin at Omaha and got my

wife in four minutes,

The Secretary of the Treasury:

But you are connected

with the.Company.

Mr. Allen:

They didn't know that; i t was in the hotel and

they didn't know 1 was connected with the Company.

Tie Secretary of Agriculture:
Federal Reserve Bank of
St. Louis

le this city your headquar-



W. P. A l l e n .

&r. A l i e n :

Yes s i r .

The Secretary of the Treasury:

1 would hat© to


you how long i t too:*: me to get a connection, so 1 arc very
much intarooted in knowing ho</ lcng i t takes business v.en
to get one.
yr. Allen:

You can get ^uick connection with Kanaaa City?
Ys3 a i r .

The Secr3ta.ry of the treasury:

Is i t any quicker than

with Omaha?
A.'r. A l l e n :



The Secretary of the Treasury:
*<r. Allan:

A out the sams?

About the same, yes sir.

The Secretary of the Treasury:

How much is the differ-

ence in time that there would be in getting connect ion to
Mr. Alien:

Be no difference in time.

The Secretary of tve Treasury:

No differ3nce; or to St.

Mr. Allen:

Or to St. Louisj depends, of course, on con-

gestion of traffic, and for some p: rticular raascn it might
take longer one tirre than others, but ordinarily it



take the same length of time.
The Secretary of the Tr3apury:

Have you ample wires to



W. P. Allen,
do the normal business quickly?
Mr, Allen:

Yes air.


The Secretary of Agriculture:
Mr, Allen:

What territory do you cover?

Our territory is practically —

if 1 might

show you this map (showing) our territory is practically the
territory outlined in that.

Our territory is seven states

and the north portion of Texas, the Panhandle of Texas.


hava about 600,000 square rr.iles and about two percent, of the
;; population, in that area.

You can see the cl evelopment hare


in comparison with the eastern territory.
The Secretary of Agriculture:

You handle all of Montana

Mr. Allen:

We handle absolutely everything, yes sir;

evsry collection —

all the money that is collected in our

territory is deposited by our representatives in these difi

ferent banks where we carry accounts.

We have some 326

bank accounts, which means that the disposal of each of them
comes under the control of the treasurer in Denver and is
disposed here.

Excess receipts, after expenses are paid,

are drawn into our principal depositaries, at Helena, -alt
 Lake, Denver,
Federal Reserve Bankinto
of St. Louis

Albuquerque and El Paeo, and then from there

33 3S

f. P. Allen.
The Secretary of Agriculture:

From the point of view of

credits, you are not dependent, are you, on these banks?


yes, we are borrowers.

The Secretary of Agriculture:
Mr, Al.en:

You are borrowers?

We are borrowers at certain times rathsr ex-

The Secretary of Agriculture:
which vary from
ffc* Alien:

Depends upon the conditions

season to season?
Nc particular season in our business; just

towards the latter part of the year we are in need of funds.
The Secretary of Agriculture:

Do you borrow ir this sec- i


tion or from the outside?
Mr. Ai.en:

We borrow largely in this section; the balance

we get from New York.
The Secret ry of Agriculture:

What percentage would you

Mr. Allen:

1 should say probably 40 percent, in this city,.

The Secretary of Agriculture:
jyir. Alien:

Namely, in Denver?

Denver, and the r st of our territory, yes.

The Secretary of Agricul ure:

Over what period does thii

Ui. Allen:

T^i» borrowing period?




W. P. Allen.
The Sec etary of Agriculture:
i*r. Alien-.


A period of three or four months.

The Secretary of Agriculture:

Is it considerable in the

Mr. Allen:

yes, it will aggregate between a trillion and

two Eillion dollars.
The Secretary of the Treasury:

Mr. Alien, what can you

say, or can you give me any general idea of the cost of a
private wire per annum from Denver to Kansas City?
Vr. Allen:
1 cat*

No sir, I am not in position to give you that.

£*% it and let you have it.

The Secretary of the Treasury:

It is perfectly feasible

to have such private wires, is it?
Xr« Alien:

yes sir.

The Secretary of the T


Where you would get ex-

clusive use of the wire?
H*. Allen:

Exclusive use of the wire, yes.

The Secretary of the Treasury:

So that if you have a

branch here and the headquarters bank in Kansas City, or viceversa, it would be perfectly simple to connect those two banks
by private wires?



W. P. Allen.
fcr. Alien:

Tee sir. we hare such.

The Secretary of tha Treasury:

So that you could have

practically instantaneous communication between them?
UX* Ailcn:

fe bave those arrangements now.

7h© Cacretary of Treasury:
#r. Al^en:

You have.

Yse »ir.

The oecratar>- cf ths Xraae.ry:
Mr, Allen:

Omaka the same?

How about ChicagoT

I tiiink f« have *mo?\ an irritt^ient for Chi-


The Secretary cf the Trjasury:

Do you get thoroughly

satisfactory eorv.ce?
y/r. Aiiftn:

yee air, thoroughly.

The 8d^ratary of the Trsasury:

How far can you talk from

Denver now?
yr. Allan:

Tali tc N«T York.

1 dcn f t think it is com-

itercidl, however.
The Seci';tiJ*y cf Agriculture:

Do storms interfere very

Xr, Al^en:

1 was i-ing to say we don't advertise it as

ooamsrciai, for the sirapla reason that the elements have to
be just right, Aixd i t tal^a a tslt^hone man to talk
favorable cirouicatancet.

in un-



W. P. Allen.
T^e Secretary of ths Trsaeury:

There is no difficulty

of that kind between Kaj&9as City and Denver?
ttr. Alien:

No sir.

Tiie Secretary of the Treasury:

Or Ocaha and Denver or

Chicago and Denver?
ifr. Aijen:

Ko sir, not at all, ;just like talking around


The Secretary of Agriculture:

With a private vrire, how

long would it take now to call Kansas City?
Mr. Allen:

You would ring it yourself —

be no d3lay at

all, and you can use that wire both for telephoning and tsiegraphing at. the 3ai:.e time.
The .^ecrstary of Agriculture:

Can you tell us the strength

of your ^taf' in t •: ia territory?
Ui. Ailen:

As tc employes?

The Secretary of Agriculture:
Vr. Allen:

The force.

About 6,000 employes.

1 have soi:ie ether

statistics as to amount of disbursements.
The Secretary of the mreasury:

File the

with the atsneg-

Yes s i r .

r'ake that in

Vr. A}len:

And the map.

The Secretary of the Treasury:



Mayer Harrison.
the exhibit.
(Statement submittad and also the map previously referred
to marked fAlien Exhibits Nos. 1 and 3, respectively, Denver, January 36, 1914.")
The Secretary of the Treasury:

If Mr. garrison can con-

tribute anything new, we would like to hear from him.
The Secretary of the treasury:
Mr, Harrison:

The life insurance interests.

The Secretary of the treasury:
Mr. Harrison:

Whom do you represent?



Life insurance?

1 just want tovery briefly explain

this one pags by saying that Denver is the insurance center
of the entire district froi. the Missouri River to the Sierra


Mountains, and from Canada to Mexico.

Nineteen companies

have their head offices in Colorado.

Every company, both

foreign and domestic, haa
so managerial departments.

a general agaaoy in Denver and al$30,000,000 of insurance money,

premium** losses, expenses, went through the Denver banks
in the ysar 1913.
The investments of a number of the

.r^at companies have

become so important in the Rocky Mountain region that it has
b en deemed advisable and they have found it absolutely neoes
sary to
Federal Reserve Bank of St. Louis

establish financial departments in Denver.

One life



Meyer Harrison.
insurance alone, through its Denver financial department,
loaned upwards of $35,000,000 within the past five years on
property located from Seattle to Duluth, from Los Angeles to
Kansas City.
Many of the rraat insurance companies, both foreign and
domestic, realizing the great future of the Rocky fountain
region, are rapidly establishing their western headquarters
in Denver.
The Secretary of the ^reasury:

Tnat insurance company do

you represent?
Mr. Harrison:

The Pean Mutual Life, of Philadelphia.

The Secretary of Agriculture:

Your mai n point is that

this i3 the convenient point for the admir.i strati on of business over a large area?
Hr. Harrison:

Exactly, particularly this region that has

bean mentioned hers today;

J matter of grea1 convenience, es-

pecially for our financial apartment.
The Secretary of the Treasury:


1 imagine, from the qual-

ity of the air 1 have baen oreatning here today, that there
•*ould be little for life insurance Coic^anias to do in this


Mr. Harrison:
of our
Federal Reserve Bank of St. Louis

There are very few losses here, on account

wonderful climate.




Meyer Harrison.

The Secretary of Agriculture:

Till you file that, please?

(The paper submitted, in duplicate, received and marked
•Harrison Exhibit No. 1, Denver, January 26, 1914.")
(Mr. Harrison excused.)
The Secretary of the Treasury:

Have you anything new that

you can contribute to the information we have received today?
Mr. McPhae:

To my n.ind, there have been one or two con-

ditions that have been overlooked.
The 8«cretary of the Treasury:

State firet your full

narr.e and your occupation.
• Mr. WcPhae:

William P. McPhse, Merchant.

The firet one is ae to the effect that the Panama Canal
Will have upon this district here as a distributing center.
Merchants here, large shippers, generally look for distributive ratee which will enable us to enlarge very much the territory which is immediately tributary to us.
The Secretary of the Treasury:

Of course that is rather

You have no idea just how that is going to

affect you?
Mr. McPhee:


It has to come, sir.

Secretary of Agriculture:

We expect to get moat of


William P. McPhee.
that in Naw Orleans.
The Secretary of the Treasury:
The Secretary of Agriculture:
• T . McPhee:

And San Francisco.
And Houston.

Wei., the effect of the Coast trade fill be

that the railroads will be largly relegated to inland trade,
and that they will have to derive their revenues froci that
and will naturally have to serve the manufacturers, industries
and jobbers which are in the inland territory.
Ths Secretary of Agriculture:

Meet people mistook the

effect of the Suez Canal, and it is toe far in ^he future to
; rophesy anything definite,
vfr. WcPh^e:

AnotVer matter was the question of the terri-

tory hare Veing 30 far retoved fron the other centers.

I do

not atteiLj-t, of course, to interpret any phase of the law, but

when they made provision here —

when that provision was made j

for geographical location, it seemed to me it was pretty apt
in the cade of Denver.

If the law were interpreted to take

the centers of population, Denver, of course, and the territory
west of the fcissiseippi River,would have no regional banks
because the concentration of population is all east.
The Secretary of Agriculture:

It has got to be divided

into districts, and every district would have one.




William P. McPhee.
Mr* McPhee:


Well, Denver has been shown by the number

of banks here, by our convenient location, to be more oonveniently eituated, as —


The Secretary of the Treasury:

That is a question of

transportation, and we hare been pretty well loaded up with
Mr, McPhee:

1 know you hare.

The Secretary of the Treasury:
the economic proposition?
Mr. MoPhee:


Have you anything more on


In our business we distribute to practically

all the territory showa there; we distribute all through Montana and all through Arizona, and even into parts of California.
The Secretary of Agriculture:

That is the lumber busi-

Mr* McPhee:

Lumber and the paint business.

The Secretary of Agriculture:

You reach all parts of this

section in considerable volume?
Mr* McPhee:

everything frot that line that runs through

the middle of Nebraska and Kansas; reach all of that territory and even go into El Paso*

(Mr. McPhee excused.)



Ths Secretary of ths Treasury:

Gentlemen, if there should

be anyone here from the outside now who has not been heard
and who can contribute any new light on this problem, the
Comrittee will be glad to hear from hia, if he will come forward and speak briefly and to the point.

Is there any one?

If not, the hearings will now be closed.
Mr. Gordon Jones:



statements that have

been Bade wit} reference to what Northern Colorado Eight desire, the gentleman testified to the nseo . of Southern Colorado, and 1 don't think he is in touch with Northern Colorado.

Also some sentiment from Utah and that section regard-

ing their preference for Denver instead of the Coast.


would like to introduce that.
The 8eoretary of the Treasury:
Mr. Jones:

Have you got it here?

H<?» not here.

The Secretary of the Treasury:

1 raay say that any brief

that Denver may wish to file between this time and the 15th
of February, may be filed and be forwarded to the psserve
Bank Organization Committee at Washington, and will be given
consideration, and should anybody else interested in this particular question in their community, that have not been heard,
care to express any opinion or to submit any information or
Federal Reserve Bank of St. Louis

of a similar oh&racter, it may be sent to Washington


in l i k e manner.
The hearing w i l l no*? be adjourned.

WHEREHPON, At 3.10 P, U>9 January 26, 1914, the Corna i t tee adjourned to a e e t at S e a t t l e , Washington, January 39,