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Vannnn P.ity, lfpP
January 33, 1914

Law Reporting Company, Official Stenographers




Kansas City, Missouri, January 23rd,1914.
Ten o'olook A. H.


The Seo rotary of The Treasury,


The Seoretary of Agriculture.

P. f. GOEBEL, President, Kanaae City Clearing House
Dr.JNO.T. II. JOHNSTON, President, National Reserve
Bank, Kansas City.

E. F. SHINNEY, President, First National Bank, Kansas

J* H. WILES* Rapresnting,Commercial Club of Kaneaa

LEON SMITH, Representing,Jobbing Interests of Kansas



M . L. MoCLURE, Rep reseat ing Live Stock Interest e
of Kansas City.
C. Q. CHANDLER, President f Kansa&National Bank,


Wichita, Kansas.
F. P. HEAL, Chairman of Board, Southwest Rational
Bank of Comneroe, Kansas City.
JHO. A . CRAGIN, President, First National Bank,
Joplin, Missouri.
J. C , SWIFT, Representing Packing Industry of Kansas
W . B . KANE, Caehier, First National Bank, Carterville,
W . J. BAILET, President, Kansas Bankers Association.

WILLIAM MEE, President, Oklahoma City .Clearing House

Association, Oklahoma City, Oklahoma.
EUTER E . BR0W9, Seoretary cf Chamber cf Couiseroe of

Oklahoma City.
JOHN R. imLVANE, President of The Bank of Topeka,


Topeka, Kansas.
R. A. LONG, Representing the Lumber Interests of


Kansas City.



W. 8. Q0THRIE, President, Oklahoma Bankers Association.

180? !

W. B. HARRISON, Secretary, Oklahoma Bankers
Association, EDid, Oklahoma.
E. L. COPELAND, Representing Railroad of Kansas
W.R. 8TUBBS,I>airrenoe,Kaneaa.
F* G.OROWELL, Representing Grain, Ray and Flour
Interests, Kansas City.
J. 0. SCHNEIDER, German American Rational Bank 6t.
Joseph, Missouri.
FRED QIJIHCT, President, Planters State Bank, Salina,
L. W. DtnrCAH, Representing Clearing House, Muekogee,

S. R, MOSES, President, Oitisens National Bank,


iGreat Bent, Kansas.

T. H. DWTER, Representing Oklahoma Bankers.


G. R. UoOULLOUGH, Representing Clearing House,


Tulsa, Oklahoma.

CAMPBELL WELLS, P l a t t e City, Missouri.
W. F . RAHKIH, Representing F i r s t Rational Bank,

Taxkio, Missouri.


P* C. DXBGS, Repreeeiting Gtiarantee s t a t e Bank,
Axdmcre, Oklahoma.

a l

The Secretary o f the Treasury:


Oentlemen, t h e problem c o n - !

f r o n t i n g t h i s Co&ttittee i s t o d i v i d e the country under the


f e d e r a l Reserve Act i n t o not l e s s than e i g h t nor sure than


twelve districts, and to locate within each district a head- j
quarters or a federal Reserve Bank*
This ia tin eoonondo and not a p o l i t i c a l

problem, and


what the CoBioittee i s after i s facts*

W have been obliged, j

to say, everywhere we have gone* that it is not oratory we
want but facts, those facts that will enable us to determine*
as intelligently as possible> the customary courses of busi~ '
neat* and what will best conserve the convenience of business !

throughout the country in the organization of thia By stem.


In view of the limited time at the disposal of the Com* 1
mittee we have to ask the witnesses if they will not confine !
themselves as far as practicable to the character of informal !
tlon which the Committed desires, and we usually find that


we can get that information better by asking questions.


Statements which have been prepared, however, especially statacwnta of statistical infori&ation, can be filed as exhibits
to the testimony of the several witnesses;
Ve shall now proceed, and I believe this is the list,



is it, of the gentlemen who desire to b© heard?
Mr. Gocbel: Tes, sir.






Mr* Goebel: Messrs. Secretaries, the first thing I dasire ;
to do is to present to you the brief of our statements, con- •
taining all the facts that will be brought out by the witnesses,
and the figures contained in it, so far as possible, are


The Seorutary of Agriculture:

f i l l you, before you begin,

give your name and occupation and state what you represent?
Mr, Goebel: P. W Goebsl, president of the Commercial

national Bank, Kansas City, Kansas, and president of the
Kansae City Clearing House Association.

The Secretary of the Treasury: Are you here as the repre-

; tentative of the Clearing Bouse Association, Mr. coebelt

Mr, Goebel:

Tea, Mr. Secretary.

j T-ha Secretary of the Treasury:

Sow i f you will proceed

and «ake suca statenent as you oare to submit, f i r s t .
Mr. Gottbel:

Why, in drawing your attention to the sap of


the territory that we have outlined as being proper territory
for a national reserve back to be located at Kansas City, 1
desire to say that In this territory there are 1,334 national !
banks, with a capital and surplus of $155,000,000.00, and with
deposits of $641,000*000*00, and on a six per cent subscription basis would furnish a capital for a federal bank of
19,300,000.00, and would create a tewxte

deposit with this

bank of $38,500,000.00.
In the same territory there are 977 state banks
and truat companies that are now eligible and have sufficient
capital to cone into the systen any time they want now,
and assuming that t wo-thirds of those would oome into the
.'system they would add additional capital of $3,000,000.00
and additional r eeerre deposits of $10,000,000.00, caking
a bank with $13,000,000.00 capital and with f48,000,000.00
iof deposits..

In the sane district there are state banks that are now

not eligible on account of possessing insufficient capital,

3,661, which nave capital and surplus of

$63,000,000.00 and deposits of $394,000,000.00.

These are

not considered In the figures X have heretofore quoted, but

lit is, to say the least, likely that at least one-third of


them would make thesieelvee eligibXe,

In fact I know of a

great many of those banks that while they have not a sufficient capital, their capital and surplus are more than
s u m c l e n t , and I do not doubt but what there would be at
Xeuat $3,000,000.00 aore subscriptions from those now noneligible banks,

and further reserve deposits of about

the Secretary of Agriculture:

How does the law stand in

those statesT
Mr. OoebeX: In Kansas and Missouri the Attorneys General
have held that state banks can subscribe

for stock.



OkXahosa X think i t i s the sane, although X am not po&iftive


of that, Mr.Secretary, but X know i t i s in Kansas and


Missouri and Sebraska.

The Secretary of the Treasury J HOW about Colorado and Sew j

!, Mexico, have you any l i n e on thatf

Mr. Goefesl:

X have not any data on Colorado,

in Hew

Mexico X understand they can.
She Secretary of Agriculture:
Ux* GOdbsi:

Do you know about Texas?

Thexa has been no decision in T^x&e*

X have

no doubt, Gentlemen, that in any states where the law i s now
suah that they o an not, that the very ftext legislature will




remedy that, because 1 will not hesitate to Bay, after 30
years1 experience in banking in the country and in the city
of Kansas City of 12 f*ars, that every state bank of $3S#GG0t0C
&nd over capital will want to coma into the eystem for ma.ny
Thy Secretary of the Treasury: They have a simpler tz&thod
than that; they can nationalise, if they want to,
Mr* ooebel; Wall, a great many of the state banks would
probably hesitate to do it, because under the state laws
they can do things they cannot do under the national law*
Tha Seoret&ry of the Treasury; A great many have already

i Mr, Goebel: Yefti I know. There will be a tendency to do
that, but I think a large percentage of the state banks
will coma in as state banks*
H w there are 18 per oent ol the national banks in
this distriot in units* and S per oent in units of a l l banks. !

All the banks of Greater Kansas City have total deposits •

of $141,000,000.00.

the Secretary of the Treasury:- You mean all banks?
Mr. Ooabel: Yes, airj state and national.



The Secretary of the Treasury* How much of that i s national!


Mr. Goebel: The national banks have about $11Q,QOO#OQO.QO,
; of whioh there are $66,000,000.00 country bank balances.
i The Suoretary of the Treasury: What do the oountry banks
Mr. goebel: $68,000,000.00,
! want to draw your

H w of the $£8,000,000.00 I

special attention to the faot that there

! art* |17,000 f 000.00 deposits of other reserve banks that do
not oQKa to them as reserves but are kept h&x& because this i s
! the logical place for then to have balances.

They leave i t


here and use it of tener than their deposit

in other places*

They only keep in the central reserve banks A S much deposits
ae required by law in order to make a 25 per cent reserves
The Secretary of the Treasury: that is your rule about paying interest on balances? What interest do you pay?
Mr. Qoebel; Ihe rule is the maximum on time deposits, 3
per oent.
The Secretary of the Treasury: X as speaking of reserve
Mr. Goebel; £be aaxiimia is 3 per eent*

It will average

probably 2$ per oent.
The Secretary of the Treasury: Do you collect checks free



Mr. Goebel: W have what we oall ooiraon charge points on
which we a l l colleot exchange becaus* those banks charge
entry bank in Kansas City exchange.

The Kansas City banks

only charge their customers exchange where it costs them exchange, and in fact they absorb a great deal of exchange,
because on« bank in Kansas city may hare a par point in the
atatu and another one lias not, and they will absorb the
exchange in order tj> equalise.
The Secretary of the Treasury:

There i s but a rery small

percentage of items on whioh charge i s Bade?
Mr. Qoebel? Ye*.

The Secretary of the Treasury;

that would you say i t aggre-

- gated in the way of interest return on the balances kept by thje
oountry bank*?

X mean what does the free check collect! on

plus the interest paid amount tot

to. Goebels

I would say it would be about 8 | per cent.

The Secretary of the Treasury;
averages S& $*x cent.

You say the interest

Certainly check collection i s worth

morethan a quarter of one per cent.
ito, Goebel:

I do not think so.

The Secretary of the Treasury:

It i s estimated in other


oitiea to be worth anywhere from £ to 1 per cent.
Mr. Go«b«*i: Well, you aee we have & oountry clearing house
here and we have bawn trying to get the country banks to reduce their collection

charges and have brought this collec-

tion oharge down & great deal in the last two or three years
by sending our checks to the oountry clearing hois e.


the banks probably would have 15 letters to that city we
only have one letter.
The Secretary of the Treasury:

To what extent do you think

you have unduly stimulated deposits in the Kansas City banks
by these inducements to country banks? I mean stimulated
the carrying of balanoes here.
Mr. goebtl*

X do not believe Kansas City is any store liberal

then the c i t i e s around us.

In fact it i s not as liberal.

The Secretary ©f the Treasury:

If no bank anywhere allowed

interest on those balanoes do you think the banks would oarry

| as much here as they now carryt

Mr. Qoebel:

* think if none of the banks paid interest

' on balanoes our oountry bank balanoes would be increased
< materially, because there are a number of intexfer reserve



I citiea that give better returns than we do.
|17,000,000.00 of tola §68,000,000*00, as X say, are



balances kept by other reserve c i t i e s .
Of tha other practically $50»000,000.GO, that does
count as reserve, but there i s not over 45 per cent of this
required as reserve.

In other words, they keep much more

u*xa than they are requirea to keep because this i s the home

to which i t naturally drifts, the gateway of all this country.
To show how active these deposits are - this is a developing country and, therefore,«• have a vexy small percentage of time deposits, and to show how active these
deposits are 1 only havu to say that our average daily
clearings axe almost $10,000,000.00, consequently, the clearings for

every 14 business days amount to the total amount of

deposits, showing you the activity of these deposits, being
;commerolal deposits throughout, and country bank deposits

{which are commercial in their relation at home..

To further detoonstrateftbat this i s the great center for

the olearing of oountry ohecks X want to t e l l you we handle

every busy day more than 90,000 country items.

?hey come

in from a l l over the territory, are concentrated here, and
then are sent out to destination and collected.

More than

SO,000 for each business day* And in fact, so great are


lour mail f a c i l i t i e s and our opportunity for direct collection ;


that we collect a large percentage, aore than half, of all

the country checks of Oklahoma and Kansas for the St. Louis

Th«y send them up here because our route is more

direct and i t reaches the destination quicker and we hare a
%uioker and more direct way of getting to the point.
?h« banks of Kansas City have, at the last statement,
loans of $103,000,000.00.

Of these $27,000,000,00 were made

to and through country banks. You understand that a large
per cent of the loans that are extended to the country banks
are not regular re-discountsj they are in the nature of excess
loans to then.

A country bank with $25,000*00 capital could

only make a | 2500*00 loan, asd they often have a legitimate
pall for $3,000*00 or $5,000*00 loans on cattle or wheat, and
these loans are carried by their Kansas City correspondence.
So we have $27,000,000.00 of loans here, and a larger per
dent of the loans carried by the Kansas City banks will be

eligible for re-discount in the reserve bank than any other

center, i think, because the peroentage of loans in the Kansas
Pity banks that are secured by collateral of stooks ana bonds
U exceedingly snail.

As X say, t h i s i s a live oon&eroial


jpoftjsunity, the entire district which we have designated there

jM naturally belonging to Kansas City and entitling us to a



reserve bank here,


I want to call your special attention to the diversified •
interests in this territory, and I want to call your attention
to the fact that this xaaexre bank located at Kansas City

will have a da Band for re-discounts from i t s member banks
the year around.

It will not be a feast and a famine.



have manufacturers and jobbers who require accommodations all
the year around. Of course, the dry goods jobbers require
larger accommodations at oertain tines of the yea:, the
grocers at oertain other times of the year, but i t i s well
! balanced.

The packing industries, which are immense here,

and of which you will hear later* require accommodations the
year around*

Then t h i s i s the greatest market in the world

for stock and feed cattle.

The trade fro a farmer to faroar

; in cattle i s greater in Kansas City than in any other point
in the world, and a larger amount of these cattle operations
are financed here, beoause i t i e the headquartera, so we have
a feeder deaand that i s quite strong in March and April and
in October and SoYeaber*
Then ire have & cotton territory down in Oklahoma and



• Texas that requires large assistance at a time after the wheat;
|. j; crop has been harvested.


Now during

June and July and the first part of August

it take8 an enormous amount of money to finance the wheat
crop of Kansas and Oklahoma and southern Nebraska, but the
minute the threshing tint begins the money rolls in from the
country bank: to the oity here, and that minute the dealers
and exporters demand assistance and take the money froa the
We also have a large oorn territory where cattle are
fattened on oorn and shipped back to this market.
We hbve a mineral and oil country in southeast Kansas
and southwest Missouri and Oklahoma that is the greatest in
the United States.
And, a s I say, there will be a continuous demand for rediscounts by a reserve bank located here, and there will be

i ao undue demand

at any tics, unless we should have an extra-


i! ordinarily large crop of wheat and com, and then we would
be only too glad to use a l l our energies to finance i t .
In t h i s territory there should be located a number of
strong branches*: There should be two or three in the state
of Kansas, at least two in Oklahoma, one in Hew Mexico, one
in Colorado and possibly two or three in the Texas territory
that should be assigaed to this c i t y .

1831 !

I have seen the banking power of this city grow in 30
years from a total of $7,000,000,00 to a total of $160,000,000 00.
1 believe the next 30 years the potentialities are immensely
greater than they have been in the last 30 years, and Z believe, Gentlemen, after you have thoroughly investigated the
nutter you will cone to the conclusion that Kansas City £*
ithe logical place for a reserve bank.
I The Secretary of Agriculture:

What has been the growth of

the banking power of the oity since 1900T
• Mr, Gcfcel:

In the last seven years our increase in deposit^

has been 57 per oent and our increase of capital and surplus
has been over 200 per oent.

; The Secretary of Agriculture: Since 1900 have you the
Mr. Goebels

Toe; you will f iad i t right there in our brief *

j Ths Secretary of the Treasury: lir. Goebel, this dietriot
which you have laid out fox Kansas City iapliee that you have


considered the other districts that are to bo forced?
Mr. Qoebel: Tee.
The Secretary of the Treasury* Has this been laid/upon
the assumption that you would have eight districts in the
oouatry or a larger number?


Mr. Goebel:

I t has been laid out on the assumption of eight

d i s t r i c t a, but i f you will notice on your map there «
The Secretary of the Treasury:

Yes; I am going to ask you

about that.
Mr. Goebel: You will notice that red l i n e .

That i s on the

assuBg)tion that there w i l l be nine d i s t r i c t s *
The Secretary of the Treasury;

Let me ask you t h i s :


tak* in here about half the state of Missouri, I should Judge.
Mr. Goebel:

Hardly; about a third.

i The Secretary of t he Treasury:
Mr. Goebel:

About a third?


The Secretary of the Treasury: And what is the theory
upon which you do thatf
jj Mr. Gosbel: Because the business centers here.

The cattle

jLs shipped here, the feogs are shipped here, the grtfn comes
here and the bank balances are held here.

j The Secretary of the Treasury: Have you any s t a t i s t i c s to
present in t h i s particular territory, and have you defined i t
bf any statement of counties*
! Mr. Goebel: Yes; 45 counties in Missouri. There are 360
franks in the 45 counties and they have 773 bank accounts in


. .
P. W Goebel.


The Secretary of the Treasury: How many counties are there
in the state, the total number?
Mr. Thralls:
Mr. Goebel:


The Secretary of the Treasury:

Now l e t us take the state

of Zowa here, where you are cutting out the southwest corner.
Bare you any facts to show that the normal courses of business
at* to Kansas City?

Mr. goebel:

That we take on the assumption that St. Joseph

i will be in this district and there will be a branch there,
and that territory i s direotly tributary to St. Joseph,

The Secretary of the Treasury: At Chicago we had repre-

; sentatives of the bankers throughout the state of Iowa, and
j business men, and there seemed to be an absolute unanimity
; of opinion that the entire state of Ohio should be embraced
, in the Chicago d i s t r i c t .

: Mr. G oebel: Tou e ee, Mr. Secretary, we m* a red line
j there. That i s lebatable territory, and they do a large
* **
I amourit of business in St. Joseph.


The Secretary of the Treasury:

Take the state of lebraskaj

! a l l of which, on the assumption there will be eight die

P. W. Goebel.

triota, you have taken into the Kansas City district?
Mr. (joebel: Tea.
The Seoretary of the Treasury: Do you think that the normal
oondition of business and the intereata of business generally
in Nebraska would be beat 6erred by incorporating that state
in the Kansas City district?
Mr. Goebel:

The normal courses of business south of the

Platte River, which embraces three tiers of oountiea —,

The Seoretary of the Treasury:

That ia on the assumption

there will be nine distriota, but I am speaking now on the
a s sumption of there being eight diatriota.
,' Mr. G oebel:

The entire southern half of the state of

Nebraska naturally


here; they keep their bank aooounts

The northern half we take on the assumption that Omaha

fould probably be in this diatriot.

If Omaha ia not in this

district than we would aot lay claim to the northern half of

But the southern half ia our natural territory,

; The Se oretary of the Treasury:

On the assumption of the

system constating of eight diatriota you include Omaha and
attach i t to the Kansas 0**7 district.

Are Omaha1 a relations !

generally with Kansas City or with Caioago?
Mr. Goebel: Chiefly with Chicago, but on account of the



P. V. Goebel.

size the Chicago territory would have, we did not presume,
in outlining thia map, that it would probably be incorporated
in the Chicago district.
Tht» Secretary of the Treasury:

Tou know the Act requires us

to have due regard to the convenience and customary course

of business in forcing these distriotst
Mr. Goebel: Tea.
The Secretary of the Treasury:
able violence to the

How would i t not do consider^

customary course

of business to take

Omaha away fro a Chicago and attach i t to Kansas City?
Mr. Goebal:

Not &t a l l , because there would probably be

a very strong branch a t Omaha, and the distance fro a


to Kansas City i s l e s s than i t would be to Chicago.
,! The Secretary of the Treasury:

Let us reverse the proposi-

Omaha wants to bs the headquarter* for t h i s d i s t r i c t .

How suppose Omaha was Bade the headquarters and Kansas City
was attached to Offiaha, would that do violence to the customary

course of buelnssst
Mr. ooebel: Zt undoubtedly would, because, as you s e e from
t h i s map, the great majority of the territory i s south aod west
from Kansas City.
The Secretary of the Treasury:

X am speaking of the exchange*

P. f. Goabel.

between Omaha, and Kansas City, for instance, because your


argument i s that with Omaha attached to t h i s d i s t r i c t whatever;
she Korea would, naturally cone to Kansas City azxi Omaha1*

exchanges would be with Kansas City.

How the reverse of the I

proposition i s also true.


to, cjosbol: jhe exchanges as far as they would be with the j
central rdaervd bank would not be with Kansas City* There

w i l l be & current of business s t i l l to the - if Kansas City


gets a reserve bank she will still hare large business re,lations with Chioago and probably with St. Louis on account |


of collecting facilities of items which would not be eligible !

for collection in the national reserve bank, such as ooupeng i

and notes, and there would still be a considerable trend of i

business of the cities with each other.


The Secretary of the Treasury: Tou take in a large part of ;
Arkansas here also?


Mr. Goebels A snail part, Mr,Secretary.
The Secretary of the Treasury:


The western part of the

state, and you take in the entire state of Oklahoma and the


northern part of Taxas. Where do these Oklahoma cities and


the western Arkansas cities do most of their busizass today,
with Kansas City or with 8 W Louis?

1 *





P« V. Gocbel.

Mr. Goebel;

The Oklahoma banks undoubtedly with Kansas City

the Secretary of the Treasury; How about western Arkansas?

Mr. coebel: W are only taking in western Arkansas along the

I line of the Kansas City Southern Railway which goes directly
fro* Kansas City to the Gulf, and the most direot nail f a c i l i t i e s
are along that railway to Kansas City.

That i s the reason.

; I will admit it i s debatable territory.

the Secretary of Agriculture:
I t . Worth, Texas.

Tou include both Dallas and

Tour relations with fUWorth are much more


'! intimate than with Dallas, are they not?


Mr. ooebel:

About the same.

The relations are quite in-

! tlmate with both o l t i e s and they both keep accounts here.
The Secretary ©f the Treasury: Are their relations more
intimate with KansaeGlty than they are with St. Louis - Ft.
Worth and Dal last , .
. Mr. ooabel; I would not say so now, because St.- Louis i e
a central reserve oity and Dallas and Ft* Worth are compelled
to keep their reserve balances, a large part of t heir balances^
in Chicago, BW Louis and Hew York.
Thtt Secretary of t h e Treasury;

Those reserves are arti-

f i c i a l anyway and they a re going to be altered entirely under
this eyotem, so 1 do not think we need to attach too much

P. W Goebel.

importance to them.
Mr. Goebel: Ho.
The Secretary of the Treasury: Ae to the courses of business and trade relationship between those c i t i e s , i s i t more
with Kansas City than with St. Louis?
Mr. goebel;

j think so.

The Secretary of the Treasury: Vould i t be true of Dallas?

Mx. Goebel:

I am not sure about Dallas, but Z an sure

i about Ft. Worth.

The Secretary of Agriculture:

Ft* Worth i s a great stock

Mr. Coebelt Yes, sir.
The Secretary of the Treasury: AM you think i t s relations

, would bs more intlnate?

Mr. Qoebel;

Yds, s i r . How take the Panhandle.

All the

; business of the panhandle cones to Kansas City because they


direct railroad serrloe from there, and that i s really Kansas j
City territory. It i s a great cattle country down there
' and there would bs at least two-thirds of that business done '
through Kansas City.
The Secretary of Agriculture:

What do you propose to do

with the western part of Colorado?



P. W Goebel.

Mr. Goebdl: W thought that probably » uld have to go to
Pacific Coast, although my own personal notion i s we
ought to take in the entire state of Colorado.
The Secretary of Agriculture:

Co you think that western

Colorado business would normally go to the West?
Mr, coebel:

I t would normally go to Salt Lake city, aa-

Burning Salt Lake City would be a branch of Sun Francisco.

The Secretary of the Treasury: How* are your trade relations
with Denver?


Mr. Goebel:

?h& Denver femka keep large balances


The Secretary of Agriculture: Do you show that?
Mr, Goebel:
! Th«* Secretary of the Treasury: Hare you anything to indicate that: in the statistics you have furnished here?
i Kr. oosbsl: Yes; we will give you those figures.
I can
give you the balances, but 1 know the average balance of

Denver hers in the different batiks is over §1,000,000.00.
| The Secretary of Agriculture: You know perhaps, Mr. Goebel,
that the Denver people will request the location of a bank
Mr. Goebel!

Tes; we realise that, but I do not think you

can possibly gst a d i s t r i c t la which enough capital could


P. W Coebel.

be raised

ana enough reserves to take care of the business

in the d i s t r i c t

without doing absolute violence.

The Secretary of Agricultures

Do you think i t would create

a district that would be normally a center district?

Mr. coebel:


The Secretary of Agriculture:

And your idea i s to o&ke a

combination of the lending and the debtor
Mr. jjoebel:



The Secretary of the Treasury: Does Near Mexico go normally
to Kansas City?
Mr. Goebel:

j want to draw your attention to the faot tj&t

He* Mexico has 66 banks in the state and they hare 56 accounts
in Kansas City.
The Secretary of the Treasury:

With the district a s you

have outlined i t here, what would you put in the St. Louis
district* assuming a bank i s put there?
Mr. Goebel: X would leave in the St. Louis a i s t r i c t


counties in Missouri, two-thirds of Missouri; j would give

then a l l of Arkansas, unless it be that strip along the
Kansas City Southern which, as X say, i s debatable territory!
I would giTe them a l l of Louisiana and south Texas, all of
southern I l l i n o i s , part of Indiana, Kentucky, Tennessee.


F* I. Goebel.

The Secretary of t he Treasury:
Mr. (jo«sbel:

All of Kentucky and Tennessefct

The question io whether we should go any farthei

east than the Cumberland Mountain*.

That a ©erne to be a

natural trade barrier, and ny judgment would be that east of
the Cumberland Mountains would probably
Washington d i s t r i c t .
The Secretary of the Treasury:

g$> in Baltimore or

Hare you prepared a large map1

of the entire country showing the other d i s t r i c t s ?
Ux, coebel:

X huve not prepared that, but I would be very

glad t o prepare that for you.
The Secretary of the triaeury:
here for t h i s d i s t r i c t .

You have made an assumption

How these d i s t r i c t s are naturally


Mr. Goebel:

Doctor Johnston w i l l present a map.



The Secretary of the Treasury:
Mr. Goebel:

He has a nap?


The Secretary of the Treasury: And that indicates this
Mr. GoebeU

Tes, s i r .

I The Secretary of the Treasury:

How the argument has been

made by St. Louie that that territory ehoujttembrace the whole

||of the » t a t e , including Kansas City and Oklaaona and Texas.


P. V. Goebel.

iould or would not Kansas city be equally as well served i f


head bank were put at St. Louis and a branch at Kansas

Mr. Goebel:

I t would not, and Mr. jr eal > one of our prominen

bankers, will give you that later on.

i| iha Secretary of Agriculture:

What would you think of the

reverse of that, M * Goebelj haying a headquarters bank here
and a branch in St. Louie?
Mr. goebel:

Would that be equally undesirable?

That would be equally undesirable,

should have & reserve bank.

St. Louie

It has a territory that does not

include any of our territory; i t has a diversified territory
land would build up a great bank.
'j The Secretary of Agriculture: What would be your argument,

briefly, in defense of the location of two such banke in the
I state of Missouri?
! Mr. Goebel:

I want to state to you that part of Kansas City

i s located in Missouri and part in Kansas. W have not mene
tioned Kansas City, Kansas.

Should there be a l i t t l e diffi-

culty on tooount of there being two in one state, Kansas City
universally will be perfectly willing for you to locate It
on the Kansas side of the line.

The Secretary of the Treasury:

It Is not a question of

P. W Goebel.

|; their being in the same state so ouch as the matter of the

closo proximity of the two banks, and of whether they would oeive
the best interests
l*r. Goebel:

of business generally.

If you will study our brief and listen to the

men who will appear here you will find Kansas City is the
natural gateway to the Southwestern country.

If you 9111 com-

pare the figures of the deposits in thleseotion between
Kansas City and St. Louie, or any other city, you will find
i t has been cooing this way; naturally drifted here; their
home i s here*
W reoeive sore i n i t i a l shipments of grain and l i r e stock
and of/conaaodities from this territory which break bulk
they are unloaded, they are sold and resold, and the finances
of the whole proposition are handled here, which stakes i t the
Bost natural place..
The Secretary of Agriculture; What i s the distance fro si
her* to St. Louist
Mr. Goebel:

277 nifes.

The Secretary of Agriculture:

What i s the fastest tintsT



Mr. Goebeli

W leave hers at 9 O'clock i n the eTenlng and get



to St. Louie at 7:30 the next morning.
The Secretary of Agriculture* What i s tht time in the dayt


P. W. Goebel.

Mr. Goebel:

About the sane time.

The Secretary of Agriculture:

I t i s farther than from

Boston t o Hew York?
Mr. Goebel:


The Secretary of the Treasury:

And what i s the U s e from

here to bunv&ii
Mr. Goebel:

The time from h^x% to Denver i s 18 hours.
Tou teave at 6 o1 clock and get there at 18.

Mr. Thralls:
Mr. c;oebeli

18 hour*.

I want to draw your attention to

a asap in this brief that you will find gives these distances
very oonoisely.
The Secretary of the Treasury:

Mr. Goebel, if you included

that part of Nebraska south of the Flatte River and Arkansas
in the d i s t r i o t a s you haw outlined i t , what have you figured
that the banking capital would be and the banking power this
bank would have, inoluding capital and surplus?

What have

you figured that, south of the Platte River?
Mr. Goebel:

It would reduce i t about one-fourth.

The Secretary of the Treasury: Have you any exact data
, that?

JIT. Qoebtl:



Mr. Thrall*:

Tea* six*


I t would sake a banking power of $8,136,000.00.

. 1636
P. W. Goebel:

The Secretary of the Treasury:

What would i t s resources

be in the way of reserve deposits?

iur. G oubel:

I am speaking only of national banks.

The Secretary of the Treasury;
iir. jjoabel:

I understand.

The deposit would be, on the 6 per cent

basis, §34,000,000.00.
The Secretary of the Treasury:
Mr. coobel:

Tes, sir*

$34,000,000.00 deposits!

How, the same computation on state

banks that would oo»e in a s I Bade before, which i s not doing
violence - 1 think 1 have i t too low rather than too high;
1 wanted to be conservative in those figures - we would have
, a c a p i t a of §12,000,000.00 with deposits of $46,000,000.00.




The Secretary of Agriculture: Mr. G oebel, what would I t be j


i in 10 years?

Mr, GcebtJl: Ve have grown so rapidly in the last 10 years
; that 1 fear
the Secretary of Agriculture:


Probably double i t , would you

', not?
: Mr.
The Secretary of Agriculture* You have doubled in the last
10 yaars?

Mx, aoftbelt l a the U»t »«v«n years we have increased ffi



P. V. Goebel.

iper cent.
The secretary of the Treasury:

1 nean i s the normal rate of growth being stain-

Mr, Goebel:

la Kansas City growing as

Yes; the average rate of inoreaee from year to

Say the Sept ember oall last year has shown about

$10,000,000.00 inoreas9.

On account of the corn crop failure

in our territory t h i s last year it aay not increase quite so
much this year, but if the wheat crop matures as it prosiaes
now, i t will more than j&ake up for i t in the last six months
of the year •
the Secretary of the Treasury:

I think it would be well

for Doctor Johnston to com with his nap now..



The Secretary of Agrioulture:

Dr., will you give your

name and ocoupation?
Mr. Johnston: John T. H* Johnston.
The Secretary of Agrioulture: Do you represent any association here?
Mr. Johnston: President of the National Reserve Bank.
The Secretary of Agrioulture: You know our problem. Dr.
Mr. Johnston: Yes,sir.
The 8eoretary of Agrioulture:

And we understood that you

havelaid out the entire oountry into districts in a tentative

Mr. Johnston: Yes,sir*



The Secretary of Agrioulture: Would you let us see your


Mr. Johnston: Yes,sir.
The Secretary of Agrioulture: Just sake any statement
you wish.
Mr. Johnston: I would like, first, to sake a statement,

then I have soae questions to answer in regard to these


figures. I would state, Seoretary MoAdoo, when you requested



John T. M. John*on.

me to divide the United States into not less than eight,
nor more than twelve Federal Reserve Bank districts looking

to an absolutely fair adjustment in the real spirit of the
measure: that is, locating the Federal Reserve Banks where

; they can best and most naturally serve the entire country
with absolute justloe to all, I did not realise the diffi: oulty of the task.
Before going into the matter, I had to deoide upon the


j proper viewpoint of the undertaking and the fundamentals
J of the bill as a working basis; I believe in the administration's
j insistenoe that the measure should not be constructed solely
j as a bankers' bill, but for the best interests of all legitimate

enterprises in the United States, commercial, agricultural,
i industrial, financial. In solving the Federal Reserve looatli


problem the same idea has been kept in mind, so I have marked

! out the districts with this thought.


As to fundemantale,i
The first step is to decide the number of banks, whether
j eight, nine, ten, eleven or twelve.
The second is due consideration of the natural courses
j of oommeroe,- the existing trends of trade, and according to
 the bill not to adhere to the lines of any state or states


Dr. John T. M, Johnston.

when business ourrents run counter to, or along state
Another fundemantal to consider when working in sympathy
with the crux of the system, is the decentralisation of money
power; that is, to distribute the Federal Reserve Banks so as
to make them as near the same size as is consistent with the
highest business interests of the country, but In no case,
looating any one of them/as to injure any section.
Fourth fundamental- Regional districts should be as
near as possible self-supplying self-sufficient* I feel tha
making the map,
is about our viewpoint of/dividing the country, that each
district should be, as near as possible, self-supplying and
Working from this basis has caused me to re-adjust

the districts several times* For instance, I placed New


; Orleans a s a city entitled to one of the Federal Reserve
i Banks, thinking that the Panama Canal accentuated that
; location, but upon investigation and analysis, I w a s comi
polled to eliminate this oity for the reason that the
Tast oredit requirements of t h e south which focus at a
single season, make it imperative that southern states
extend their districts f a r enough north to insure In eaofe,

Dr. John T. M. Johnston.

the proper balanoing of banking resources and of demand
and supply at a given time* Also the northern and
western districts should extend southward to include territory having anusual demands at different seasons, in order
that the banking resources of each Federal Reserve district
may suffice to supply the needs of that district*
I realize that while the system has the power through
the Federal Reserve Board to compel one Federal Reserve
; Bank to supply the needs of another in stress or emergency, at
the same time this only supposed to be given in unusual
emergencies$ so unusual that it requires a vote of five
of the Federal Reserve Board to do It*
After solving the problem of making self-supplying


i dlatrlota to include the territory haying heaviest seasonal
demands to suoh. an extent as would render to all the utili!i

i ration of our banking resources as nearly equal as possible*

i we then have less difficulty In apportioning the remaining
! dietriots In whioh oredlt demands are more uniformly disi

txlbuted throughout the year.
In these eeotions of the country — that is, those that
are not aooentuatkdty

south and north — in these other


sections of the aouatry greater regard «ay properly be

John T. M. 7Johnston.

observed as to the convenience and the customary course of
business. Therefore* in the eastern districts, it would seem
that the divisions should adhere ib the spirit of the law in
its intent of decentralization, but in no case should the
system as a whole be constructed without due regard to the
strength and efficiency of the system as a whole, as the
greatest advantage of every bank in the country and of every
city and of every section will bemore fully realized by
the success of the Federal Reserve system as a whole*
Working on this basis, I submit a division of the territory for eight banks, one for ten and one for twelve• Tou would
note from the figures on the maps, that the capital furnished
| by the National Banks will be entirely sufficient even for the
twelve, save in the case of Dearer and Seattle • In Govern*
ment, 6 per cent on about two millions of oapital, and in the
case of Seattle, about a million and a half.
I should like to call your attention,Messrs* Secretaries^
to the facts and figures given In regard to the population of
these Federal Reserve cities and particularly the percentage
of growth according to the census of 1910• The percentage
of growth of Washington from 1900 to 1910 aooording to the
last oensue is 19 per cent; Hew York 33 per cent; Chicago



Dr. John T. II. Johnston.

38-7 per oent; San Franoisoo 31-6 per cent; St.Louis 19-1/4


per oent; Kansas City 51 per oent; Boston 19-6 per cent;



Minneapolis St.Paul 39-1/3 per oent.
At the same ratio of inorease for the next ten years as in j
the past ten the population of Washington would be 433,839;

New York 5,376,577; Chioago 3,083,849; San Franoisoo 511,519;


St.Louis 965,836; Kansas City 768,703; Boston 860,814; Paule- |
apolls 767.658.

Should the Committee select nine oities it seems Atlanta
should be added to the above eight; if ten, Seattle; if eleven,
Cleveland; if twelve,Denver.
Tou see the point. Here is eight. If we should take nine
it seems to me that in justice we should have to take Atlanta;
i,t we take/then,Seattle, if eleven, then Cleveland, if twelve,
then Denver.

And I wish you would notice on the map as the

Mississippi River runs from Minneapolis down to New Orleans
that on the 8 basis, while less than one-third of the territory is east of the Mississippi and over two-thirds offctis
vest of the Mississippi, on this eight proposition we have


plao ed six either on the Mississippi River or east of it, when
kt is only one-third space, and then, in the division of twelve,

ire nave given two-thirds still. We Have given eight on the




Dr. John T. U. Johnston.

Mississippi River and east of it and four west*

Here the

eight have one-third of the acreage and four have two-thirds•
And, gentlemen, this two-thirds has greater resources for the
future in population, in water power, in minerals, in oil, in
agriculture, in all the great resources that make for people
and money*
Perhaps I should give a reason for making Washington as the

or one of the Federal Reserve Banks, I believe the Federal

Reserve Bank system can be more intelligently comprehended, aajd
,«d more methodically and efficiently by the Federal
Reserve Board having under its immediate daily observation the
| practical operation of a Federal Reserve Bank.


Again the Nation's capital gives opportunity fox close
observation of the administration and 4of Congress. Then the

I capital is a natural mecca for Americans of every vocation
i and profession. Bankers and all olasses of business men are
drawn there constantly*'
Again the operation of the system oan be observed by foreign
>diplomats, ministers, consols from all the nations who are
stationed at the oapital as representatives of their governments, and as this system Is the last pronouncement on a

monetary measure of any of the world1 s great nations, I

Dr. John T. M, .Johnston.

believe it will be observed and oopied when studied by other
All other nations of the world have their Government
Banks located at their capital, and in a large sense, this
system organises the bank of the United States with eight
reservoirs instead of one.
If you want to ask me any questions I have just a few
, explanations of the figures and the districting.

The Seoretaxy of The Treasury: I think you have pretty

well oovered it here.1

Mr. Johnston: I should like to oall your attention to this

1 fact, that the proposed Kansas City Reserve Bank District
I is Intensely agricultural and largely undeveloped.

The present epochal agricultural awakening- in whioh

Bankers, as well as Farmers, Agricultural Colleges,. Mail

Order Houses and the public generally are so insistently en| listed, will double the reeouroes and pupulatlon of Kansas


j City's Banking territory in the very near future.
The proposed distriot for the Federal Reserve Bank of




Kansas City inoludea Kansas, Oklahoma,- Colorado and the Panhandle
of Texis, which heretofore has been largely a grazing country,


but now under reoent discoveries of drouth resisting plants





Dr. John T. II. Johnston.

and grasses, eftoh aa milo maze, :kafir corn, federita,
peanuts, alfalfa and with the silo method of preservation
and conservation marks the beginning of an e r a of multiplied
resources for this regional district, and this movement will
be accentuated by the good road3 agitation and construction.
I thought I would call your attention to that.
The Secretary of The Treaeury: Getting back to the map,
you omitted from this district the western half of Colorado*
Mr. Johnston}

I put it over aoroee the mountains with

San Franoisoo, after we cross the divide -—
The Secretary of The Treasury}* Have you any reason for .
that except the mountain range, or have you studied the normal
courses of business in that diatrlotT
Mr. Johnston: Really, Secretary MoAdoo, the whole of
Colorado comes more naturally here than it doea there, but
you told me in making this to give the other fellow a show,
not to be too dog-goned


I think those are the


words you said*

I waa trying to give the other fellow some.!
The Secretary of The Treasury: I do not recall that.' The

language doea not sound familiar.;.

However, of course, the •

point la to divide the country intelligently and with reference
to the economic problem, and in doing that we must confine



Dr. John T. M. Johnston.

ourselves to logical reason©.

How, if the normal courses

of business in Colorado would mean that the integrity of
that state should be preserved in the division of the country
into districts it ought to be done. I just want to gat your
idea aa to whether or sot the state should be treated as an

Ifr. Johnston) I ell, at first I put Denver with the eight
and also lew Orleans, and after these figures, which you can
study at your leisure, or/oould call your attention to then—
I found it impossible to include Denver and not force the

water to run up-hill.
The Secretary of The Treasury:

Now, you inolude the entire'

, state of Alabama in the St.Louis District?
; Mr. Johnstons Yes*
The Secretary of The Treasury: Is not that doing some
violence to the general course and trend of the business of
the state?
Mr. Johnston: Well, I wanted to be magnaniaous with our
friend St.Louie.
The Beoretary of The Treasury? fall,, you cannot be uagnaniapus
• This i» a oaee, as I said before, of perfectly logical treat- |

Dr. John T. U, Johnston.


- ment.

Kr. Johnston: Well, if you take in Atlanta, and have nine,

j of oourse, it would go with that district, but Atlanta has
' been in »y mind all the ti»e,and we have oapital sufficient
to take in Atlanta, if you preferred nine, and then Alabama
j would go to Atlanta.
The Secretary of Agriculture: What would you take in if
you were to locate a bank at Atlanta?

Mr* Johnston; That Is not put on this map* It would oertai.n-

! ly, about something like a district — I am not doing this

j scientifically, but roughly; I would take in Alabama and a
1 portion of Tennessee, but not Kashvllle, because that Is
I St .Louis territory; but I would certainly run across here

and take in that territory there (indicating on map) that would
fee nine*
The Secretary of Agrioulture; Just twopoints,Doctor. The
question was raised in the hearings in Washington, that both
Vorth Carolina and South Carolina apparently unanimously
protested against being oonneoted to any bank to the south
or west, saying that their wholecoO*Be of trade was with the
east; they wanted to be connected with sone bank to the north,
Richmond, Washington, Baltimore, Philadelphia. low again,

Br. John T. M. Johnston.

suppose you were to lay out a district like this, would
that be normally a eelf-sustained, self-sufficient, independent
distriot, or would it be normally dependent?
Mr. Johnston: Any southern district — the Cotton Belt,
in which they have heavy seasonal demands, and it is all
over, is almost ooapelled, or should be under the spirit of
this law, where every Federal Distriot is supposed to be
salf-sufficient and self-supplying, to go up north. I think
your point and their point is well taken.
The Seoretary of Agriculture: I just wanted to draw out
your idea about it•
Mr. Johnston: I think the point is well taken, and I
think the Committee, in the spirit of the bill, oust follow
the oourse of trade and go where the people who are doing
the business oan get there most quickly and most conveniently
and where the business goes*
The Secretary of The Treasury; The district you have indicated there for Atlanta would not have adequate banking
Mr. Johnston: I think then we would have to run it up
and oonneot it with a northern place. I did not give that



Dr, John T. tf. Johnston.

j; point any great attention, exoept looking at the thought that
i| we oould take that off and have suffioient capital, four
!; million.


The Secretary of The Treasury:

How, Doctor, disregarding


' queetlone of Magnanimity, looal pride, or prestige* and


treating this problem simply as one to bo dealt with on the

actual faots and what will be best for the entire country,
because the suooeBe of this system is going to depend upon
i the proper division of the country into units and the inter*
relation of those units, what would you allot to St.Louis and
what to Kansas City?
Mr. Johnston: Just what I have done there. I divided it
on absolute grounds of the trend of trade, and not on sentlsten^.
, The Seoretaxy of The Treasury: I understood you to say a
moment ago you gave Alabama to St.Louie as a natter of magnanimity?
Mr. Johnston; Where are you going to put it?
The Secretary of The Treasury: I do not want magnanimity
to figure in it. I want to get the cold facta.
Mr. Johnston: in order to oonneot it — now, as to
southern ootton raising needing money, needing heavy money

at times a&4 none at others, we ought to oonneot that either

Dr. John T. M. Johnston,

with St.Louis or bring it over here to Chicago. This very
view point that you spoke of at Atlanta was the reason I put
it with St.Louie. But connect it with a northern territory.
The Secretary of Agricultural: What would you think about
Cincinnati or Louisville?
l£r. Johnston: I do not think Cincinnati or Louisville is
to be considered unless you take 13 banks. Then I think
that Cleveland is the logical point JBfoa two things, first,
on aooount of location and because its increase in the last
ten years has been 40 per cent more than Cincinnati. I think
tendency forecasts destiny.
The Seoretary of The Treasury:

Take the Chicago District

as you have outlined it, you put the whole state of Ohio
in that?
Mr* Johnston: Tes.
The Seoretary of The Treasury: Do you think that disturbs
the customary course of trade and oosRserce?
Mr. Johnston:

It was sty Judgment, but I have not the

absolute and definite knowledge on the states of Ohio and
those eastern states that I have on the southern and western
states. I «a very familiar with Texas, Kansas, Colorado and
all this country} I have been in business her© a quarter of


Dr, John T. M. Johnston.

a oentury. I do not know Ohio as well as you do. I could
not state that, exoept Mr. George Reynolds told me It
naturally came to Chioago, and I think he is an honset man.
The Secretary of The Treasury: Uould you imagine for a
moment that he wae biased in favor of Chicago?


Mr. Johnston: Well.
The Secretary of The Treasury: Doctor, the state of Utah


I you put with the Pacific Slope.

Mr. Johnston: Tee* All my aeacciatea begged BQ to put
Arisona here back with Kansas* The Kansas territory natural!

{ covers so ntuoh that I ought to have gone over there, but you
said not to be ao greedy, and you kept telling me we should
give the other fellows a chanoe.
Ihe Seoretary ©f The Treasury: Dotoor, I am afraid your
powers of interpretation are not very accurate. What I eaid
was to prepare a Kap giving your best ideas fro® the economic
probless and fro» that standpoint only.
Mr.Johnston: That is what I have done.
The 8eoretary of The Treasury: How, without reference to
greed or anything else, if Ariaona ought to be in thia
distrlot we want to know it.
Mr. Johnston. Tea.


Dr. John T. If. Johnston,

The Secretary of The Treamiry: How, if those conditions

justify p&aoing Arizona In this distriot, if we consider this
as & district, then I should like to have the reasons for it,
and I ehould like to have the same reason with respect to
Arizona, Colorado and Utah, because what we want are the
facts that will enable us to reach a conclusion.
Mr. Johnston:

Now, with regard

to Arizona, you take the

cattle territory. We have, for instance, a bank that dooe
business with us at Phoenix, Arizona. That is in Arizona.
How, the cattle ooming up here from Mexico, about half of
them/to Kansas and about half of theis go over here to San
Franoisoo and Loe Angeles*

That is a great outlet there

for Uexioan oat tie, and it is difficult to Interpret. I
think to divide it half and half would be aore just.
The Secretary of The Treasury: Before we proceed further,
there are a great many people and our time is short* I
would like to ask how aany you want to speak for Kansas City
and I would like to know who are here representing other
Mr. Goebel: The list shows. At present we will only
oall oae aore Kansas City banker and3aier on, if we have
the -ti»«, wt would like you to hear one or two, but



Dr. John T* II* John&ton.

now v?c will only o&ll one more banker, Mr.
The Secretary of The Treasury: Have you any Kansas City
business men who desire to be heard?
Mr* Goebel: Tea} we have quite a number of them*
The Secretary of The Treasury: Wa isill hear Hr* Swinney



The Secretary of the Treasury: Mr. Swinney, w i n you
give your name and occupation?
Mr. Swinney: E. F. Swinney, president, First Hational
Bank, Kansas City, Missouri.
The Secretary of the Treasury; You know our problem,
Mr. Swinndy. How if you will give us your views on this
Mr,Swinney: Gentlemen, 1 have lived in Kansas City and
been in the banking business 27 years. I need not go into
any explanation as to how 1 have seen the city grow, but 1
want to say that we ask for this regional bank here for
the reason that it is the natural flow of business to this
point. It is just as natural as water flows down hill.
And while that map Bhows a large district - I am free to
say to you that in my opinion Kansas City really does not
ask for that much, because I believe that we should ask for
a district that is compact and that comes here under all

To my mind, you will have to huve a

regional bank between here and the Pacific Coast.' It is a
large jump, as you gentlemen will find when you start across.
That being the case, I believe that we should have a bank

n 2


32. F. Swinney.

composed of Kansas, oklahoina and northern Texas
J"t« Worth and Dallas.


I lived in Texas for ©earen years and

a half and I am very familiar with the coalitions there.
The country between these points, a line running to the
west, would give us a o a t t l e country and partly a cotton
country arid would bring an even, balanced district*


should have, I think, a part of N w Mexico, possibly east
of the Hock lalfcjad Railroad; we should have eastern Colorado; 1 do not say Denver; and we should go on a line south
of the P l a t t e River to the 41st meridian, 1 beJi eve i t i s ,
back down the Iowa line over about S %p 90 miles in MisO
souri into a d i s t r i c t that i s absolutely our own and that
comes here under a l l circumstances and cannot be taken a way
except under inducements that would have to be offered to
change I t .
The Secretary of the Treasury!

How, Mr. Ssinney, in that

connection hat your clearing house giren any thought to


t h i s question of the

delimitation of the d i s t r i c t


1 mean has the clearing house i t s e l f considered the exact
l i m i t s of the d i s t r i c t that ought to surround Kansas City?

Well, the l i mite that

have disousBed quite considerably.

I have mentioned we

n 3

£. F. Swinney.

Tlie Seoretary of the Treasury:
divide the state.

I am speaking of where you

I suppose you would take county lineB?

Yea, air.

The Seoretary of the Treasury: How 1 should ask if your
clearing house will not make a map and submit it to this
Co unit tee at as early a date ao possible, within the next
t«o weeks, addressed to the Commission at Washington, and
show exactly where you put the line in those states, the
county lines.
Mr. Svinney: Tea*
The Secretary of the Treasury: Beoause there is no way
with a sap like this that we can tell what you have in your


Mr. Thralls:

W have that information*

The counties are

given in the brief*
The Secretary of the Treasury:

X understand you are not

asking for t h i s d i s t r i c t .

In Missouri wo do.

The Secretary of the Treasury:

Take Colorado - do you name

the counties?

Yes; they are a l l named.

The Secretary of Agriculture:

How you suggested, Mr.


£• F. Swinney.

Swinney, that there ought to be a bank between Kansas city
and s&n Francisco?
Mr. Swinney:

Yes, s i r .

The Secretary of Agriculture: Do you think you could get a
territory there that would be a proper one?
Mr. Swinney:

I believe you could, Mr. Secretary. It is

a question, though.

Denver, of course, is the largest

town between here and that point.

You could go to the

north, I think, and take in Wyoming, part of Montana, Idaho,
oome down into Utah, and take part of Hew Mexico and part
of Ariaona.
The Secretary of Agrioulture: That would give you four
banks on a straight line west of the Mississippi River.
How o&ny banks were you figuring on in that suggestion?
Mr.Swinney: Wall, in that suggestion 1 would

figure at

least nine and possibly tan*
The Secretary of the Treasury:

Is it your idea that the

system should begin with the minimum of banks or with a
larger number, in your best judgment?
Mr. Swinney:

I was originally for four banks, but when

1 began to locate them it is really hard to place them under
tea banks.

£. F. Swinney.

Th* Secretary of the Treasury: Do you think you would get
sufficient capital in each unit to increase the number?
Mr.Swinney: We certainly would in ours.
The Secretary of the Treasury: I am speaking of the rest <
the country.
Mr. Swinney: There is no question of any section of the
country except this Western section.
The Secretary of Agriculture: Do you think it would be bettjsr
to locate a weak bank, as you say it would be there now, or
to keep it for future consideration?
Mr* S*imiey: Possibly you might keep it in abeyance. But
they have no use for a large bank in that country. Their
needs are not like ours. We have need for a large bank and
we can

supply ourselves in this distriot*

The Secretary of Agriculture: Do you know whether Denver
is a lending or a borrowing oity?
Mr. Swinney:

It is a lending city.

The Secretary of Agriculture: Largely?
Mr,Swinney: Yes, eirj except at certain seasons of the
The Secretary of Agriculture:

Mr. Swinney, the Act pro-

vid*i here in Sectioa 1 3 - 1 will just read t h i s section to

£. F. Swinney,

"Upon the indorsement of any of i t s member banks, with
a waiver of demand, notice and protest by each bank, any
Federal reserve bank »ay discount notes, drafts, and bills
of exchange arising out of

actual commercial transactions;

that i s , notes, drafts, and b i l l s of exchange issued or
drawn for agricultural, industrial, or comme? cial purposes,
or the prooeeds of which have been used, or are to be used,
for suoh purposes, the Federal Reserve Board to have the
right to determine or define the character of the paper thus
eligible for discount, within the meaning of this Act. 9
Informal proposals/the law attempted to define, and i t
was suggested th&t the law should contain a definition of
what commercial paper which would be eligible for such operation

should be.

This has been left to an administrative

interpretation and determination which, of course, gives a
better handling of the matter.

the Committee has to do

everything i t can tofacllitate the inauguration of this syoteo
and to have all the information possible for the Federal
Reserve Board when i t i s organized, and the Coauaittee would
be very glad if the Clearing House Association here would
consider that »attex and submit a brief.

S. F. Swinney,


Mr. Swinney: Very glad t o .
Secretary of Agriculture:

Juat simply define as to

paper should be eligible under that section.

Yes, s i r .

The Secretary of the Tre&eury:
jj any uniform fora

And along with that suggest

of notes ox acceptances, or anything of

that Jcind, that would elucidate the problem.
Mr. Swinney: As you gentlemen fcnow, our paper in tMe
d i e t r i o t would be made up larley of paper which reflects
tha credit of the commerce of the d i s t r i c t , such as oat t i e .
How I was very glad indeed to see that you gentlemen

in, at the last moment, Mr.Seo-cetary, the clause allow-

ing c a t t l e paper to be re-discounted.

That is one of our

most important items and there i s not any better paper anywhere.
The Secretary of Agriculture:

Of course you understand

we want you to consider t h i s for the whole country, but your
advice will be specially valuable on this
Xhe Secretary of the Treasury:


You can touch on i t from

both aspects, not only as a government problem, but with r e *
speot to your local d i s t r i c t .

X want to Bay that i n t h i s d i s t r i c t we do not


£. F. Swinney.

know any paper secured by bonds of the East.

The bank I

represent has $17,000,000.00 loans and we have not a dollar
of collateral in the bank that would be known in Hew York
City on the stock exchange; it i s entirely coisaercial paper
on fara products.
The Secretary of Agriculture:

There ie a second question

that the Committee would like to have the proper coffiiaittee
of the clearing house, or sooe other cocuoittee, furnish us
a brief on, and that i s bearing on the last paragraph of
8eotion 16:
"The Federal Reserve Board shall make and promulgate
from time to time regulations governing the transfer of funds
and charges therefor among Federal reserve banks and their
branches, and nay at i t s disoretion exercise the functions
of & clearing house for such Federal reserve banks, or may
designate a Federal reserve bank to

exercise such functions,

and »ay also require each such bank to exercise the functions
of & clearing house for i t s member banks.*

Very gl&d to do so.

The Secretary of the Treasury:
Mr, Swinney.

Thank you.

That i s a l l , thank you,


JohnH, Wiles.

The Secretary of Agriculture:

Mr. Wiles of the Cossaeroial


|[ Tito Secretary of


Please give your name and


j Mr.Wiles:


John H* Wiles, vice-president X>oose~Wiles

[pisouit Company.

I an representing the Commercial Club and

the manufacturing Interests c£ this city and section.
The Secretary of Agriculture: You know our problem, Mir.
Mr. riles: Yea, sir; I am familiar with it.
The Secretary of Agriculture: And we want any information
affeoting the course of trade here and your distribution area
and the area from which you receive bueinese.
Mr. Wiles: Mr. Secretary, I have resided in Kansas City for
30 years, during all of which ti&e 1 have been engaged in one
line of business. I have, therefore, had opportunities of
knowing the general trend of business ooming into this city,
and the particular seat!one from which it originates and


John H. Wiles.

In studying over the district that sight well be assigned
to Kansas City for service from a Federal reserve bank it
occurs to ne that i t would be quite reasonable aM well
| within the bounds of justice to take that portion of western
Missouri west of a line drawn north and south through Sedalia.
The Secretary of Agriculture:

Kay i ask if your views

accord with the suggestion on the map?
Mr. Wiles:

M views practically accord with the district

that i s outlined on that map.
The Secretary of Agriculture:

Without repeating that, will

you just state your reasons for such a district?

In the first place,

32 subordinate

the 16 trunk lines and the

lines and railroads that run into and out of

Kansas City serve that immediate territory more quickly and
to better advantage than that of any other commercial city.
W are particularly fortunate here in having a splendid
distribution for our products.
The Secretary of Agriculture: W are familiar with all that
Mr. Wiles: I t s , s i r ; I aa not going to quote any statistic 9 .
The Secretary of Agriculture;

If you have any exhibit to

give us, showing the distribution of any of your business
houses of their products, that would be valuable.


John H.


Well, i waB just going to say that perhaps 70

per cent of the business of our plant is in Kansas City, the
volume of which is in exoess of four millions of dollars, is
within the district embraced by the outlines which you see
upon that &ap.
Sow that business cones in hexs through the natural trend
of aff&irs and without our having to offer any particular indue
ments to attract it.
The 8eoretary of Agriculture:

That is your distributing


That is our distributing area.

Sow a oonoern

that has been manufacturing and merchandising for a great many
years find a,

from practical experience, that territory which

yields the business with the least resistance.

In other

words, when & jobber or a manufacturer goes beyond his natural
territory he must offer SOBS incentive to turn the trade,
an incentive either in price or in terns or in some other

Bow we have found from e xperience that the coamerce

and the business from that section oomss naturally into K&nea
City. We find that the people from those districts seem to
look upon this oityaa the center of commerce.
The Secretary of Agriculture:

How, Mr.Wiles, w e are


John H. Wiles,

jfaoiliar with, a l l that argument.
number of business©*.

I see that you have her* a

I aauume that you hare



distributing houses here?
Mr. Wiles: Tee, sir; we have.
The Seorotary of Agriculture:

It would *«re a great deal

of time and would be of very great service to us if i t ware
[possible for us to have a dossn of your leading houses
give us a aap indicating the area of their distribution,
with percentages, over the territory* with some hint of the
volume, shading the map, so to speak, according to the remoteness of the distriot f rom Kansas City.

Bo* those maps

would t e l l the whole story very Quickly and be a constant
reminder to us.

Of course it has been one of our duties

to interpret such things for a good many years, and i f you
could give us those facts i t would be vastly better than
any argument or general statement..
Mr.Wiles: Well, Mr. Secretary, we could very easily prepare
that sap and show thereon the percentages of business that
cones from ft prescribed district, but I am confident that
when that nap ie worked out, along the lines of your suggestion^ that the principal dates contained in that distriot
will Bhow perhaps 90 $** cent of the v>lum9 of Kansas City1 e


John H. Wiles.

The Secretary of Agriculture: That is just what we want,
and that will not need any interpretation.
Ux. wiles: I believe I could say offhand for myself
and other businesses here with which I &m familiar that the
facts, the actual facts taken from the records of those
businesses, would show that.
Tha Secretary of Agriculture: Yea.

How in Chicago, for

instance, w<* received a statement showing the receipts from
the r&ilro&ds of the cattle shipments and the area from
which tha cattle came. In St. Louis we received maps showing
the area and density and volume of business of certain of
tha great distributing houses. I see a number of such industries represented here. It would be v&xy auoh better instead of having these general statements) o&de if you gentlement who o an do so and desire to do so, would, either

separately or in conjunction, prepare these oaps for us.
Mr.Wiles: We should be very glad to do that for you, Mr,
8earet&ry, but if you will for a Koaent consider


The Secretary of Agriculture: Just let me finish the
Mr. tiles: Pardon »e>


John H. Vile a.

The Secretary of Agriculture:
i t today or tomorrow.

And w& are cot asking for

If you will seal i t to us at Washing-

ton i t will hare full consideration.

1 ;juet wanted to say

t h a t in order to Bare time.

1 was just going to observe that if you would

| for a moment consider that practically SO per cent of the
t e r r i t o r y embraced in that d i s t r i c t oay be reached by mail
X rom Kansas City in 15 hours you can better understand
why that business would naturally flow into Kansas City
rather than into aooe other point.
The Secretary of Agriculture: Veil, what we want now I s
the faots as to whether i t does or does not.
Mr. Wiles:

What you want i s the percentages of the

business transacted in that particular d i s t r i c t ?
The Secretary of Agriculture:
Mr. Wiles:

Do you want that as to any particular In-

dus try T
The Secretary of Agriculture:
Mr, Wiles:


Your typlosl industries.

Our typical industries, our most prominent

industries here?
The Secretary of Agriculture:
Mr. Wiles:

Yes, s i r .

W should be glad to furnish i t .


John H. Wiles.

The Seoretary of Agriculture:

It will s«re a lot of our

time and yours too.
Mr. Wiles: W will prepare such a map and furnish i t to
the Committee at a very early date.
The Secretary of Agriculture:

May I suggest that you can

do two things that have been done elsewhere, prepare maps
showing the areas of certain of your large typical houses
and then a oonposite nap.
vice that would render.

You can easily see what ser-

It would show the situation and

the facts would be before us.
Mr. Wiles:

1 feel, Messrs.

Secretaries, that I am in a

l i t t l e better position to outline a business district than
some other men, for the reason that we have established manufacturing plants elsewhere in the United States with respect
to their ability to serve certain territories.
The Seoretary of Agriculture: All we want you to do i s to
do that for us.
The Secretary of the Treasury:
Mr. Wiles:

Just l e t us have the map.

I am speaking now of territory outside of the

Kansas City district and, as I understand i t , we are not
hers considering any special dietriot, except that which
might properly be assigned to Kansas City.


John H. Wiles.

The Secretary of Agriculture: If you will just have those
maps prepared fox us we will appreciate it.
Mr. Wiles: We will be very glad to have those maps made and
file them with you.
The Secretary of Agriculture: Thank you. You will Bend
to tha Cocimittee at Washington, will you. Us. Wiles?
Mr. Wiles: Yea, sir.


The secretary of Agriculture:

Please give your name

and oooupation to the reporter.
Mr. smith: Leon Smith, President of the Smith-MoCordTownsend Dry Goods Company of Kansas City, Missouri.
The Secretary of Agriculture: Mr. Smith, in view of the

I request that we have just made, is it desirable to take the
| time here to develop your statement?
| Mr. smith: Well, Mr. Secretary, I do notknow that it is
I unless you would allow me to take my own business as an

example, representing all the jobbers*
Sfce Secretary of Agriculture: Yes.
Mr. smith: I might say, speaking for the jobbers, that
I naturally represent a ttlg distribution of merchandise in
this southwest territory. For 40 years my company has been
engaged In distributing these lines to this southwest territory, and for a like time have been studying territorial
conditions and trying to fix the boundary of a territory that
they oould make profitable*
How, taking our own organisation as an example, we
have 73 traveling men who fairly honeybomb this southwest,
and they are divided as follows*- I may say that ourtaainess,

according to the states that we cover is divided as follows;


Leon Smith.

Kansas first, Missouri second, Oklahoma third, Colorado
fourth, Texas fifth, Arkansas sixth, ITebraska seventh, Hew
Mexico eighth, in whioh the percentages work out this way—
a business that is running up into several millions of dollars
the percentageeare in this way —
The Seoretary of The Treasury: Tou did not state your

Mr. Smith:

The wholesale dry goods business.

33 per cent of our business is done in Kansas, 34 per cent
; in Missouri, 31 per cent in Oklahoma, 7 per cent in Colorado,


| 6 per cent in Texas, 5 per cent in Arkansas, and so on.
Now, I might say that our travelers, 72 in number, are
divided 23 in Kansas, 17 in Oklahoma and 15 in Missouri,
Of tdurse the reasons for that are obvious. We have been
working on it for a number of years and we have found we
can reach those territories profitably.

But you take the

eastern markets with whom we compete; take, for instance, a
house in St.Louis or Chicago, they would divide the state
of Kansas evenly between two salesmen, whereas we have 23
salesmen in that state• And the same thing would apply to
Oklahoma. And that brings us in touch; we are meeting more

people, we are covering the smaller towns as well as the


Leon Smith.

larger towns, and we go over those states like you would
do it with a fine tooth comb*

We do not miss anything where

there is a store*
The Secretary of The Treasury: All Kansas Cuty people do
Mr. Smith: Bow, I have maps showing the relative distances
from Kansas City to certain towns in the states that are outlined in that boixndary end showing the comparative freight
rates with St.Louie and Chioago, and I had intended to use
those to show you the inducements we used with those mileages
in order to get them to trade with us, and they are all in
our favor. If you or your colleague are open to a stoofc of
merchandise today I do not think Kansas City would have any
trouble to sell you, if you wanted to put it in this territory* We would

have the goods, we would have the freight

rates in our favor, we would have the time* That means
quick service* Merchants only get certain dates, certain
terms on their purchases, and if you consume a part of that
time in transportation that is lost to them*
I would be very glad to make you these maps and go into
that with you, but I can file them as an exhibit, whichever
way you like.- I have them


Leon Smith.

The Secretary of The Treasury: Just file them, would be
Mr. gmith: I would like, with your permission, to apeak o
one industry that is a little out of my liae, but I do so wit
the permission of the manager of the house. I refer to the
mail order business of Montgomery Ward. Yesterday the manag
of that house furnished me with some data of what they do
down here.

How, Montgomery Ward & Company are catering to


In 1805 the parent house conceived the idea

of establishing a branch somewhere in the United States where
they oould secure the best advantages, mail facilities, freight
and express.

They covered this country pretty thoroughly,

and in the end, much to their own surprise, they were forced
to locate a house In Kansas City, just 450 miles from the
parent house*

In this memorandum is shown the Business

developed in eight years of twelve million dollars or a
million dollars a month, spot cash, and all to consumers, an 1
the territory served by this house is within the boundaries
described on that map. I have it here.
The Seoretary of Agriculture: You have the map?
Mr. Smith; Yea,sir.
The Seoretary of Agriculture:

Just submit that, will you,

a 5

Leon smith.

Mr. Smith?
Mr. Smith: Yes,sir> I will.
(The map eo identified and referred to marked
Leon Smith, Exhibit Ho. 1, January 33rd, 1914.)

The Secretary of Agriculture: Ur. ICoClure, please give
your full name and oooupation to the reporter.
Mr. McClure: M, L. McClure.

yioe Present of Drumm

Live Stock Commission Company, head offioe at Kansas City,
with offices at St.Louis and Chicago.

I am also President

of the Kansas City Live Stock Ezohange*
The Secretary of Agriculture: Ur. MoClure, we woutf. like
to have any data or any maps which you have prepared showing
the distribution area, or the area from which Kansas city
draws it0trade.
Mr. MoClure: I have prepared all my figures and statistics from the map as indicated by the black lines, qualifier
think I
by the red lines, on the wall. I/have got all the statistic 8
that could be compiled in the business . I can give the

receipts from each of those districts.




M. L. MoClure.

The Secretary of Agriculture: Well, we could not remember
them, you know.
Mr. ifoClure: I can file them.
The Seoretary of Ihe Treasury: If you will ^ust file them
with the Committee it will, of course, have attention.
MX. UoClure: Kansas City is the aeoond largest live stock
market in the world,' coming next to Ohio ago. The total
amount of live stock handled here last year in oarlots was
137,000, the total number of all live stock was '7,606,538
head, whioh is praotloally about half of what Chicago handled],
but Chicago's receipts were made up mostly of hogs and sheep
the Kansas City cattle receipts coming within 300,000 head o
The total valuation of this stock sold in Kansas City
was $224,000,000.00.
The paokers in Kansas City bought and killed 1,240,862
head of cattle*
Feeder buyers from all over the United States came here
and bought 913,271 cattle*
Other packers over the United States, small paokers, in
small towns,-bought the balanoe of the oattle, 164,758.
The hogs were practically all killed in Kansas City.


M. L. MoClure

Of 913,000 head of cattle that we sold to feeder buyers
The 8eoretary of The Treasury: I think you had better just
file that, because the Committee cannot carry these statistio
in their head.
Mr. MoClure: I want to show we sold to Missouri 381,638
The total live stook sold from Missouri was 365,000 and
hogs 948,000, or 37,143 oarlots of a value of *f£th-eix millibn
I have made a comparison with the National Stock Tards
In regard to St.Louis. They sold 412,000 —
The Secretary of The Treasury:

I do not think it is worth

while to read those figures* We cannot carry them*

Just file

them and we will give It consideration at the proper time*
Mr. MoClure: There is another matter. In the matter of
the number of oattle in this district, the late 'et statistics
are that there are thirty-five million beef oattle, of which
about ten million are in the territory as marked out here on
this map, or praotioally one-third. There are something
twenty million milefc oows. He bought one-sixth of them
These live stook people are great borrowers of money.


M, L. McClure.

The banks and loan companies and commission men have out
annually, standing out praotioally all the time, over forty
millions of dollars in loans to the live stock business, and
probably loaf1 during the year over '.'seventy million dollars.
A good deal of this paper made by the commission houses and
loan companies is rediscounted throughout the country.
The Secretary of Agriculture:

Could you give us a map,

Mr* MoClure, which would graphically represent those statistics over the territory that they cover, showing the distribution of your business and the reoeipts?
Mr. McClure: Tes,sirj I have got that all figured out.
The Secretary of Agriculture:

It would enable us to

graep it more quickly1
Mr. MeClure: Tea,sir.
The Secretary of The Treasury: How, Mr. McClure, if you
will file that with the Secretary we would like to have it.
That you are going to leave with the GoroBlttee, are you not?
Mr. MoClure;

I would like to prepare it in a little

better shape*
The Secretary of The Treasury: *ith a map, and then if yot
will forward it to the Committee at Washington,
Mr. MoClure:

I can give those statietios by railroads




M. L* McClure.

The Secretary of The treasury:
the map*

You cm file that with

All of that data you can just send to the Com-

The Seoretary of Agriculture;

Tou see we have got to

examine these and it is obvious that we cannot carry them
in our heads.
Mr* MoClure:

I know you cannot•

The Seoretary of Agriculture:

And the map would help us

very much to get hold of it •
Mr. MoClure: Well, i will turn this all in*
The Seoretary of The Treasury:

Thank you*



The Seoretary of Agriculture:

State your full name

to the reporter*
Mr. Chandler:

C* Q. Chandler*

Ibe Secretary of Agriculture:
Mr* Chandler:

Tour occupation*

President of the Wichita Clearing House*

The Seoretary of Agriculture: T<>u are located in south






central Kansas, are you not?
Mr. Chandler:


The Secretary of Agriculture:

Mr. c^ndler, you know

the problem with which we are confronted?
Mr. chandler:


The Secretary of Agriculture: We would be rexy glad to
have your assistance.
Mr* Chandler: Mr. Secretary, I have been intl» banking
business in the state of Kansas for thirty years. Some
thirteen years of that time has been spent at Wichita.
Wichita is a reserve city and is a banking center for
| a large territory, including the centeral, southern and
western Kansas, oentsxl and northern Oklahoma, and the
! Panhandle of Texas. We have 14 banks, 4 National and 10
State, with a capital and surplis of $1,500,000.00 and
deposits of $13,000,000•00.


Over four hundred banks in the trade territory tributary

S to Wichita carry active bank accounts with the banks in

I Wichita*
The Clearing House Association of Wichita has
; already Indorsed Kansas City.


The natural trend of both banking and commercial busines

in the district served by Wichita is toward Kansas City. The


C. Q. Chandler.

daily remittances ftf the banks of Wichita to the banks of
Kansas City amount to several hundred thousands of dollars.
Our own bank alone carries eight aooounts in Kansas City,
We have a oonstant trend of business this way, so much so
that it is a question with us to get our money out of Kansas
City, beoause our hogs, our oattle, our wheat, everything,
comes to Kansas City*
The securities of the state of Kansas are in the same
linesas all territory adjaoent

to Kansas City, and the

directors of a Federal Reserve Bank in Kansas City would
be more familiar with the securities of this agricultural
and stock growing section than any other place that a bank
could be located*
The statement has been made that Wichita and its trade
territory might possibly be included in the district of
a Regional Bank located at Denver, Colorado.,

The Wichita

Clearing House Association have not taken this statement
seriously, beliving it is ineoaceivable that Wichita would
be placed in a Regional Bank District in an entirely opposite
direction b to its natural trade ohannels.

Kansas City

is the natural point of olearance for the Wiohita district,
and the sum total of trade relations between Kansas city



C« Q« Chandler.

and Wichita each year amounts to millions of dollars * We
have praotioally no banking or commercial relations whatever
with Denver, and we would regard it as a calamity to be
plaoed in a district served with a Regional Bank located
at Denver.
It is the opinion of the Wichita Clearing House Association that the business interests of Kansas, Oklahoma,
northwestern Texas and eastern Colorado can better be served
by a regional bank located at Kansas City than at any other

We have in Kansas some 1146 banks and there are

over 2,000 accounts kept in Kansas City*
The Seoretary of Agriculture: How many Ifetional banks?
Mr. chandler: 313, 181 elegible state banks and trust
oompanies, and 753 other banks. . There is a large number
of small banks in the state of Kansas that serve small communities that oannot ever expect to come into the Regional
Bank, and they must be supplied by a Regional that is in
touch with their securities.
As you see here, there are 758 banks that could not
come in, and they would be served through Kansas City correspondent* which, in turn, would be in touch with the Federal
Buik here.


C. Q Chandler.


The Secretary of The Treasury:

In view of the fact that

the lot provides that the bank shall establish branches
throughout this district, assuming that a Regional Bank
should be established for this district only at St.Louis —
I merely put a hypothetical question — would you not get

I as good eervioe with a branch bank at Kansas City as with

a Regional Bank at Kansas City?
Mr. Chandler:


The Seoretary of The Treasury: Why not?
Mr. Chandler: Beoause our mail facilities are so much
better with Kansas City.
Ehe Seoretary of The Treasury: But you have a branoh
bank there*
Mr. Chandler: A branoh bank at Wichita you mean?
The Seoretary of The Treasury: No; a branoh bank at Kansas

Just assume — this is a hypothetical question —

assume you had a branoh at Kansas City and the headquarters
bank at St.Louis, your relations, of course, would be with
the branoh bank at Kansas City.
Mr. Chandler:


The Secretary of The Treasury: Would you not get just as

good facilities under those circumstances?

C. Q. Chandler.

Mr. Chaddler: I would rather always do business with
The Secretary of The Treasury: But if you had just as
good facilities what difference would it make?
Mr. chaoiler: Well, of course, it would not make any
| difference, but I dont believe we would get the same
facilities with a branch as with a Regional Bank.
The Seoretary of Agriculture: Suppose you had one at
Mr. (3handler: We would be glad to have it.
The Seoretary of Agriculture: Then what difference would
It make?
Mr. Chandler: We would be closer to headquarters if we
had it at Kansas City.
The Seoretary of The Treasury: Under the Act, the Regiona
Bank would have six directors chosen by the banks themselves
that ls» the headquarters bank, and those would be seteted
by the banks of the entire dlrtriot and chosen from over
the entire district, so that the six directors wouHnot
reside only In Kansas City if the head bank was there.
Mr. chandler: Certainly now. We should hope not.

The Seoretary of The Treasury: They would be scattered



C . Q. Chandler.

oyer the entire district.

If the branch bank were at

Kansas City the four directors ohosen by the Reserve Bank
would be more largely familiar with the local conditions
to which you refer.
Mr. Chandler: But the directors of the Regional Bank
if located at Kansas City would be more familiar with
Kaneaa than the directors of a bank located in St.Louis.
The Secretary of The Treasury: I am speaking of the
direotors of your branch bank in Kansas City. I say in the
very nature of things the direotors of the branch bank would
be more local to the community than the direotors of the
headquarters bank.
Mr. Chandler: Of course we would be better represented
If we had a Regional Bank here with a branoh in Wichita
and direotors selected from Wichita.
The Seoretary of The Treasury: You understand, furthermore, that the Aot contemplates a system of bank clearances
between these Regional Banks?
Mr. chandler: Oh, yes.
The Seoret*ry of The Treasury:

It will not be so diffi-

cult if this went into operation for you to get your balance
out of Kansas City.

It i s not going to be the old system

C. Q. Chandler.

jof check oolleotion with the incident delays, and there
ought to "be a great facilitation of the exchange and commerce
so I think undue significance is attached to the location of
the headquarters bank, and it seems to resolve itself largely
into a question of looal pride. We find in most places that
is the main argument advanced.
Mr. Chandler: Just as the Mississippi River flows from
St.Paul to the Gulf, just so all business comes to Kansas City.
The Seoretary of Agriculture: The suggestion the Secretary
makes covers that*

We find each place we go is the center.

Mr. ^handler: We are trying to show that Kansas City is
the oenter.
The Seoretary of Treasury: As Seoretary Houston happily
put it not long ago, each city is the center of the surround!]
Mr. Chandler: We feel that way about Kansas City.
The Seoretary of Agrioulture: Have you filed the resolution!
Mr.Chandler: Yes,sir.
The Seoretary of Agriculture: That includes the Clearing
House ?
Mr ^handler: Tea,sir•
(The resolution so identified and referred to
Barked Chandler Exhibit Ho. 1, January 33d,1914.)

n 1


The Secretary of Agriculture:

Give your name to the

Mr* Heal:

F. P. Heal*

The Secretary of Agriculture:
Mr. Heal:

Your occupation?

Chairman of the Board of the Southwest National

Bank of Commerce of this city*
The Secretary of Agriculture:

Mr. Neal, we would be very

glad to have your eag>hasis on any point that is in your mind.
Mr* Heal:

Well, to save time I was asked to say to you

gentlemen as to why Kansas City and its territory did not
feel that a branch bank was aa serviceable here as a parent
bank, and just listening to the gentleman who was on the stang
the proposition is always open that we like to do business at
headquarters, and the more important^larger the business the
more necessary it is to reach headquarters.
We feel that the business of Kansas City naturally,
whether it was a parost bank or a branch bank, would be so
large that it would be beyond the purview of a branch bank,
beoause we think we have already shown you by statistics
filed and by the statements made that a business naturally
centers here that would be much more than
any branch bank to undertake.

you might expect

Also, I would say nobody


n „
a S

F. P. Heal.

knows at this time what a branch back's funotions may be.
The Secretary of the Treasury:

Well, they are bouai to

•zeroise the same function as the parent bank exercises;
exactly the same function.

It i s only a question of the

general supervision of the parent bank. By the way, in that
oonnection your telephone service with St. Louis is good,
i s i t nott
lir. Heal:


The Secretary of the Treasury: Tour telegraph service i s
lir. Heal:


The Secretary of the Treasury:
Mr. Heal:

Tour train service i s good?

Tes, sir.

The Seoretary of the Treasury: And how are your trade
relations with St. Louis, are they intimate?
Mr. Heal: Tes, sir.
The Secretary of the Treasury: Are your relations more with
Chicago than with St. Louis?
Mr. Heal: Our financial business, do you mean?
The Seoretary of the Treasury: Yes; both financial and
Mr. Heal: our financial business is divided between the

p. 3

F. P. Heal.

two c i t i e s .

I think more of i t goes to Chicago than to

St. Louis in t o t a l , but i t i s pretty evenly divided.
The Secretary of Agriculture:

There i s no question, I

Imagine, under the law, that the branch banks will be required to render every service within the law that the com-

munity needs. The only difference under the law is the method
of seleoting directors.
Mr. Heal: Then might I not ask you, Messrs. Secretaries,
if a branch bank is sufficient for Kansas City why it is not
sufficient for St. Louis and every other oity? Why/have but
one bank and all the others branches?
The Secretary of Agriculture: We are trying to develop your
Mr. Heal: As I understand the theory of the bill it is
that there are sections of the country whose business is homgeneous and so important that it ought to be controlled by a
!'station which holds all its reserves.
The Secretary of Agriculture: Your argument then is that
the volume of business here is so vast and important that it
would justify the parent bank?
Mr. Heal:

I think it demands it. Might I just say one

word supplemental of Mr. McClure's testimony!

X wanted to


P. Heal.

o a l l your a t t e n t i o n t o the fact that t h i s c a t t l e industry,
t h i s packing industry, i s financed i n Kansas City in the main,
The Secretary of the Treasury/:* We may say here, Mr. Neal,
for the information of everybody, that no inferences are to
be drawn from the questions of the Committee as to the
bent of the Committee's mind.
Mr. Heal: We a l l understand t h a t .
The Secretary of the Treasury: We ask questions to develop
f a c t s , that i s a l l .

It does not indicate any view, one way

or the other, that we have, because we have not any. We are
trying t o g e t the information on which to form our views.


The Secretary of Agriculture:
Mr. Cragin:

J. A. Cragin.

The Secretary of Agriculture:
Mr. Oragin:

Will you give your name?

From where?


The Secretary of Agriculture:

Are you president of the

F i r s t national Bank?
Mr. c*agin:

Tea, s i r ; and of the Joplin Clearing House

n 5
John A. Crag in.

Ihe Secretary of Agrioulture: Do you officially represent
the Joplin Olearing House Association?
Mr, Cragin:

Tea, sir.

The Secretary of the Treasury:

Have you any resolutions?

Mr. Cragin: Why, your Committee was sent a resolution
rom our olearing house on the 14th of this month, bearing the
ndorsement of ev^xy bank in our city,

I suppose that has

eached you ere this.
The Secretary of Agriculture:
Mr. Cragin:

Probably at Washington.

X have a copy of the same, however, in m
Here i s a copy of the resolution that was passed

without the signatures.

The one that was sent to you had the

signatures .of every bank, including the Joplin national.
She Stxssatary of Agriculture:

Suppose you read that, i f

Mr. Cragin:


All the banks of Joplin, Mo.,

unite in asking your favorable

consideration of the following

resolution, to-wit:

RESOLVED, That the Associate Banks of the City of

Joplin, Missouri, do hereby petition and urge your Honorable
Committed to select Kansas City as the location for one of



John A. Oragin.

the Federal Reserve Banks provided for under our new Banking
& Currency Law, and that you so arrange this district to
include the City of Joplin, 18.ssouri, with Kansas City.
•Our City i s the center of a rich and highly productive
mineral territory, the output of which amounts to approximat*
l y $15,000,000.00 annually.
"Our Commercial

and Financial relations with Kansas

City are greater than with any other Ctdfty and the business
of this entire section of the State of Missouri naturally
flows in the direction of Kansas City, and we believe a
Federal Reserve Bank located there would serve us aost advantageously. "
That i s signed by the Clearing Bouse Association and
every bank in Joplin, including the Joplin National Bank
by Mr. A. H. Waite, president.
The Seoretary of Agriculture: ttr« Cragin, you spoke of
the volume of mineral business there,

is that related

to Kansas City or to St* Louis or to some Eastern city?
Itr. cragin:

I have a few very short remarks here I would

like to read, and then I will go into i t in f u l l .
In reference to our city, Joplin i s a oity of 40,000
population, situated in Jasper county, Missouri, one hundred


John A, Crag in.

and f i f t y - f i v e miles south of Kansas City, and has seven railroads, to-wit:

Missouri & Horth Arkansas; Missouri, Oklahoma

& Gulf; Missouri, Kansas & Texas; Atchison, Topeka & Santa
Fe; Missouri Pacific; Frisco, and Kansas City Southern;
operating 44 passenger trains in and out daily; five of said
railroads operating directly with Kansas City.
Four mall trains from Kansas City reach Joplin in
the morning between s i x and eleven o'clock; one mail train
from St. Louis reaches Joplin at 7:40 A. U

In the after-

noon we have three mails from Kansas City, and one from St.

That information I received from the postoffice.
The average bank clearings for the year 1913 were,
daily, $133,804.00; weekly, 1736,835,00; total for the year,
Joplin has 33 5 manufacturing industries of different
The Joplin district is the greatest zinc producing
territory in the world.

Joplin district zinc ores carry the

highest peroentage of metallic contents, and is the only
zinc ore produced in the United States suitable for the
manufacture of sheet sine.

The zinc output for the past

n 8

John A. Crag in.

two years was 1,185,384,977 pounds, and the lead output was
186,656,826 pounds, of the total value of $32,399,840.00.
Jasper county ships Bore surplus products than any
other county in Missouri.
The banks of Joplin - seven in number - feel that they
would be serving their best interests by assisting Kansas
City in the securing of a Reserve Bank, on account of the
close proximity, accessibility, and f a c i l i t i e s for rapid
and numerous communications.

It i s possible for a man to

leave Joplin in the morning, transact business in Kansas City
in the afternoon, and return to Joplin in time to arrive
at home the same night.
The Secretary of Agriculture:

is the volume of your miner.

business in this direction or in some other direotion?
Mr. Crag in:

The mineral business i» a peouliar business.

It takes three tone of fuel to smelt one ton of ore. The
result i s that it i s cheaper to take the ore to the fuel
than i t i s to bring the fuel to the ore.

Most of the ores

produced in our seotion go to Oklahoma and to Kansas, either
to the gas or to the coal.

There i s one other large ship-

ping point, and that i s in Illinois and Peru.

in fact two, La Salle


n 9

John A. Cragin.

The Secretary of Agriculture:

Is this business handled

through KanBaa City or some other city?
Mr. crag in:

It i s handled through both.

In fact, most

of i t i s handled through Joplin, and we clear i t , of course,
through either Kansas City or St. Louis as may best suit
our purpose.
The Secretary of Agriculture:

in which oity do you keep

your reservest
Mr. Crag in: W carry over twice as much money in Kansas City
as we do at any other point.

Some of the banks there carry,

they t e l l me, over three times as much money in Kansas City
as they do elsewhere.

There i s one, and possibly two, banks

in Joplin that do carry more money in St. Louis than they
do elsewhere,

but I only know of two.

The Secretary of Agriculture:

1 think some gentleman ap-

peared at St. Louis who had signed this resolution and said
he really thought the relation ought to be the other way.
Mr. Cragin: Tou refer to Mr. Waitet
The Secretary of Agriculture:
The Secretary of the Treasury:

I do not know the name.
Yes; that was Mr* Waite.

Tou would be equally well served from St. Louis as Kansas
City, with a regional bank, I meant

n 10
John A. Cragin.

Mr. Cragin: In every way, with one exception, and that
1 B accessibility.
The Secretary of the Treasury: What is the difference in
Mr, Cragin: About seven or eight hours additional time.
The Secretary of the Treasury:

The question of a night,

is it not, in either oase?
Mr. cragin:

In either case, you say, a night* But I can

juorp on the train in the morning and come here to Kansas City
and transact business and be home in my own bed the same
The Secretary of the Treasury: Assume you had a branch in
Kansas City you could do the same thing*
Mr. Cragin:

If the branch could do the same business that

a parent bank could, yes; if it had the same facility, if
the branch did not have to refer everything to headquarters*
The Secretary of the Treasury: Well, the seven directors of
the branch bank you would look for a good deal of power to
be conferred on them, and they would undoubtedly transact
a good deal of business without referring the details to
headquarters. That is the object of the law.

n ll

The Secretary of Agriculture:

state your name to the

Mr. Swift:

J. C. Swift.

The Secretary of Agriculture:
Mr. Swift:

Tour occupation?

President of the Swift & Henry Live stock

Commission Company, representing the packers.
Mr, Secretary, I appreciate your problem, and assuming
that Kansas City or St. Louis should have a bank, i t i s the
same problem that has confronted the packers for years, because they have houses at both c i t i e s .

It seems to me the

territory they have worked out as the territory that i s
naturally tributary

to the two markets, having houses

at both places, i s very impressive

of their opinion how

i t should be divided, and l o i n say to you, in a general way,
that the map as outlined there by the olearing house


dicates what Bdght be termed Kansas City's packing house
shipping territory.
The packing busicese has ohanged i n the l a s t few years*
I t i s no longer merely a slaughtering and refrigerating
business, but i t has become more and more a merchandising
business. -And while i t i s true that Kansas city i s the
second food

supply depot in the world, and ships in carload

n 12
J* C. Swift.

lots every day in the week, except the day we are not supposed
to work but do, we have a territory that we cover every
week with our traveling men, and I think that territory and
these routes are the best expression of what Jtears of


has found to be our jobbing territory *

In Missouri the irregular line there i s fairly representative.

Of course,TOhave one or two packers with no

houses in St* Louis, except distributing houses; they go
east farther, particularly in the *ortheastpart of the state.
Kansas City packers take practically half the state of
Kansas, we go south in Texas with our regular traveling men
as far as that black line, and ship in carlota every day to
the Ft. Worth house and they distribute from there. W take
in all the Panhandle, practically all of .Hew Mexico, and
while Denver does a good deal of the retail business of the
smaller supply points of Colorado, we ship

into Denver each

And we get as many cattle, ipr.Secretary ~ and that

i s with reference to your proposition west of the Mountains we get as many cattle west of the Mountai ra as east of the
Mountains from Colorado.
W get

sheep for killing out of Utah, we get practically

J. C. Swift.

everything that comes from Arizona, we get practically
everything that comes from Hew Mexioo, and in the spring
of the year we get as many oattle from south Texas as St.
Louis, and in the course of the year we get over 100 per

than St. Louis. le follow the season through and

take the oattle from central Texas, then the oattle from
Oklahoma, then the cattle from Arkansas late in August,
then the oattle from Colorado late in September and Ootober,
and then are ready for the cattle in thegied lots that have
been turning the corn into beef.
The Secretary of Agriculture: Tou know the situation.
Where do the Arizona oattle go?
Mr. Swift:

The Arizona oattle that come to market come

to Kansas City, with the exception that in the last few years
there has quite a trade developed with Los Angeles.
Ike Seoretary of Agriculture: that percentage would you say
oame to Kansas City and what percentage goes to Los Angeles?
Mr. Swift:

X would prefer to get those figures and submit

them, beoause L O B Angeles has developed as a live stock
market. And there is another thing about the New Mexioo
and Arigona trade, the young oattle are taken when yearlings
or two years old to the lorthern pastures and then go to


J. 0. Swift,

I would say without hesitanoy that there are more c a t t l e
from Utah,

and possibly more sheep

to Kansas City than to

any other single market.
The Secretary of Agriculture:

Would you undertake to pre-

pare us a map, suoh as I have before

suggested, showing the

area from which you draw, with such shading

as would give

us a hint of your distribution area?
Mr. Swift:

Tee; I would be very glad to have the six great

paokers - and t h i s i s as a matter of information:

I would

like to say that t h i s i s the only market that maintains big
plants for a l l of the Big iix.

I would


glad to have

eaoh packer prepare a map, not only showing his most productive trade t e r r i t o r y , but shading i t out as i t reaches
out, and 1 would like to say for the Committee's information
that t h i s live stock industry in t h i s town
than half the t o t a l tonnage of the town.

furnishes more

turns out a

yearly product of at least two dollars 1 worth of product
for every man, woman and child in the

country; i t i s right

at the door of a third of the meat supply, that i s , the live
stock that can be converted into meat, and also at the door
of a t e r r i t o r y

touohing the future development of Kansas


J. 0. Swift.


trade that has not realized one-half i t s p o s s i b i l i t i e s

in the l i r e stock l i n e .
The Secretary of Agriculture:

Wiil you also give us, as

far as you can, the data as to the Western movement?
Mr. Swift:

I would be very glad

t o , very glad indeed.

It w i l l take a l i t t l e time.
The Secretary of the Treasury:

You will have the time.

I think i f the s i x paokers would give a composite map showing
the influence of the combined industry in Kansas City.

There i s another significant feature.

If we

have a bank here naturally, St. Joseph being as close to us
as i t i s , would oome i n our territory.
spoken of Wichita.

Mr. Chandler has

It i s developing as a l i v e stockjmagket.

The Seoretary of the Treasury.

St. Joseph asks to go to

Mr. Swift:

St. Joseph asks to go to Chicago, but I think

i t i s 400 miles to Chicago and 70 or 80 miles to Kansas c i t y ,
and I think i f we had a bank here i t would be natural to
oome here.

And Oklahoma City, which i s developing quite

rapidly as a l i v e stock center, 1 believe has expressed i t s e l
as desiring to come here, and i f you add Wichita and Oklahoma
City and St. Joseph and Denver, or eliminate Denver, you


J. C. Swift.

have got the heart of the lire stock industry as developed
in the last few years.
The Secretary of Agriculture:

Ft. Worth i s your center for

distribution and receipts in Texas, i s it not, around Dallas?
Mr* Swift:

Ft. Worth i s the live stock town of Texas,

but the railroad f a c i l i t i e s are such that none of that
Panhandle cattle, that dot up there in the northwest corner,
goes to Ft, Worth; all of the Panhandle cattle come to Kansas
The Secretary of Agriculture:

I meant as between those

two c i t i e s , Dallas and Ft* Worth.
Mr* Swift:

Swift & Company and Armour & Company have

plants at Ft* Worth*
The Secretary of Agriculture: As a matter of fact the cattle
go around to get out of the gaarafttine*
Mr. Swift:

They have clean pens in Ft. Worth and you can

ship into Ft* Worth and not ccaie under the quarantine*
The Secretary of the Treasury:

I understand that.

you will prepare that map it will be of service to us*



The Secretary of Agrioulture: Give your name to the
Mr. Kane: !. B. Kane, Carterville, Missouri.
The Seoretary of Agrioulture; What do you represent?
Mr. Kane: I believe I am what you would call an interlooking director. I am Cashier of the First National
Bank of Carterville, Vice President of the Citizens State
Bank of Wagoner, Oklahoma, and Vice President of the First
State Bank of Looust Grove*
The Seoretary of Agrioulture: And your linterlock states
as well as business?
Mr. Kane: Tea,sir; which makes me very familiar with the
business in that section of the country.

I believe that Kansas City should have a reserve

bank for the reason that it affords us the best facilities
for doing business easily and well. The transportation facilities of our section, both in Joplin territory and in
Oklahoma, are far superior to what they are to St.Louis.
In faot, there is only one railroad from the southwest
crosses the Ozark range of mountains to St.Louis, while
thero are five lines of railroads extend up here to Kansas


« B«

Geographioally the Ossark Mountain interpose a barrier
between us and the east and forced the construction of five
lines of railroad running north and south• That naturally
brings the commerce in that section to Kansas City*
Dor telegraph facilities with Kansas City are much
superior to those of other plaoee> our telephone service
is perfect; our transportation facilities are as good as
they could be.
Our cattle, grain, and all the commodities of that
section are diverted, on account of this barrier, to Kansas
City, and I know of no way that it can be overcome unless
you overcome the laws of nature •
The Secretary of Agriculture:

Your business men's ielatiois

are more intimate where?
Mr, Kane: In Jasper fCounty, Missouri, although I make
a weekly visit to Oklahoma.
The Secretary of Agriculture:

I say where do your busines

men go?
Mr. Kane: To Kansas City, ^e do must of our business
in Kansas City. We buy in our Jasper County Bank commercial
paper here. I usually carry $75,000.00. This morning I


. B. Kane*

bought $40,000,00 here. In our Oklahoma banks we rediscount in Kansas City.

Our facilities for doing business

here with these Kansas City banks is better and more satisfaotory*

The time we save is valuable*

over night of our

If we need money

correspondents$ all we have to do is to

telephone to Kansas City and we have it in from five to
seven hours*
The Seoretary of Agriculture: Are any of the banks/which
you are connected eligible under this law?
Mr. Kane: Two of them are, and the location of the Federal
Reserv e Bank will be a faotor that the directors in many
of those state banks will take into consideration, and I
believe in locating a Federal Reserve Bank it would be well
to consider the interests of the state banks and not send
them off too far to do business*
The Seoretary of The Treasury: Would not their interests
coincide to a large extent with those of the National Banks?
In other words, wheteTer a Federal Reserve Bank is located
in the general interests of the National Banks that would
also serve the general interests of the state banks?
Mr. Kane: Tea; but if the Federal reserve bank was too
far off they would probably arrange to do their business


Yf. B* Kane*

through some National Bank, a member of the Federal Reserve
Bank, and I am positive there are some state banks I know
of that will join the Federal Reserve Assooiation if there
is a bank located in Kansas City.that would not join if it
was farther away*



The Seoretary of Agriculture:
Mr. Bailey:

W. J. Bailey.

The Secretary of Agriculture:
Mr. Bailey:

Give your naae to the Report r.

What do you represent?

The Exchange national Bank, Atchieon, Kansas,

and I am president of the Kansas Bankers1 Association.
The Secretary of Agriculture:

Are you authoriaed, Governor J

to speak for any particular group}
Mr. Bailey:

We have biroulaxised all the banks of

Kansas, and while we hare not a letter from every bank, we
have not a letter that is not favorable to Kansas City, and
1 think I can express the universal sentiment VQ£. every

of these bankers that we want the bank here.

I have

a resolution here which I will file*
The Secretary of the Treasury: You might read it.
* Resolutions unanimously adopted by the Executive
Council of the Kansas Bankers1 Association in Session at
Kansas City* Mo., January 17, 1914.

Resolved , by the executive committee of the Kansas

Bankers1 Association, that since it ia to the direct interest of 114? banks and trust companies of this state
that one of the federal reserve banks, provided for under
the federal Reserve Act, be located at Kansas City:

n 2
J. Bailey,

We do hereby petition and urge your Honorable body to consider favorably the application of that great city for the
location of one of these banks:
And that in apportioning the districts, you
include the entire state of Kansas in the district with
Kansas City,
The regular flow of our commercial and financial
business is to and from Kansas City.11
That is the thing that concerns us.
"That cijy i s our natural market, distributing and
financial center*
"Her railroads, radiating through our state,
give us better transportation and mail facilities than can
be had from any other city*
"The failure to establish a federal reserve bank at
Kansas City would cause

serious inconvenience to the businea

interests and bank of this entire state, which is one of the
greatest agricultural, mineral and manufacturing states of
the Union* *
We still retain our modesty*
"Kansas City, ranking sixth in bank clearings,
seventh in postal receipts, second as a live stock market
and tenth in manufacturing, proves her supremacy in this

n 3


W. J. Bailey.

great Southwestern territory.*
(The resolutions, 00 identified and referred to,

were Barked Bailey Exhibit 1, received in evidence


on the 33d of January, 1914, and are attached hereto.)

I The Secretary of Agriculture: Tou said you had circularized
f he banks, Governor?
Mr. Bailey: Tea, sir.
The Secretary of Agriculture: Have you a copy of the letter
that you wrote then?
Mr. Bailey: I have not.
The Secretary of Agriculture:

Would you f i l e a copy of

|| Mr. Bailey:

Z will f i l e a copy.

|| The Secretary of Agriculture: And a summary of your replies?
: Mr. Bailey:

Tee, sir; would be glad to.

In addition to


that, in Kansas we have what is called the Bankers Deposit

;Guaranty & Surety Company. It ie|an organization created
by the banks of Kansas - not by all the banks of Kansas, but
all the stockholders are bankers in Kansas, and that company

issues insurance on depository and fidelity bonds, and they
passed a resolution somewhat similar to the one X read, which
; I will file.


n 4

W. J. Bailey.

(The resolutions of the Bankers Deposit Guaranty

& Surety Company, so identified and offered, w»»received in evidence and narked Bailey Exhibit


received in evidence January 33d, 1914, and ate atI

tached hereto.)


i The Secretary of the Treasury: Are you going to f i l e the


]replies you received to this circular, or only a summary?
'; Mr. Bailey: I have not the replies, which came to the
; secretary, and I will ask the secretary how many of them


j there were*
Mr. W W Bowman: A goodly number.
. .
The Secretary of the Treasury:

M y we ask that you send

a copy of the circular letter with the original replies to
the Committee at Washington, and f i l e them as an exhibit?

Mr. Bailey:

Yes, sir; will be glad to.

The Secretary of the Treasury: Do you think that the
customary courses of business and the general convenience
of business would be best served by a bank at Kansas City?
Mr. Bailey: W certainly do as far as Kansas i s oonoerned*
The Secretary of the Treasury:

Suppose one were located

only at St. Loiis for this general distriot, with a branch
here and branches in such places as necessary in Kansas,

1 *5

¥• J* Bailey.

j would you not get the same f a c i l i t i e s , aside from any
question of local pride?

Mr. Bailey:

I had the theory in the start we did not

1 need these banks, that we only needed one and that the
I branches would do, but now since they have got into the
: regional reserve business,this whole Southwest, with i t s
! p o s s i b i l i t i e s , ought not to be shut out with a branoh.
The Secretary of the Treasury;

i t out with a branch*
Mr. Bailey;


W do not intend to shut

I hope not.

The Secretary of the Treasury: W are talking about the


j soheme of organization, which does not seem to be thoroughly

The purpose was to divide the country into

districts so there is a headquarters bank for each district,
which would be better than only one bank loo a ted somewhere
in the East, probably, and branches throughout the country,
and then have the branches in each district so located as
to bring the facilities of the bank in that district into
close contact with the people throughout the district.
Mr. Bailey: I would not be able to answer that more than

I feel there is a spirit of business in the terri-

tory adjacent to Kansas City that is different from the



¥• J. Bailey.

spirit of business in the territory adjacent to St. Louis.
Tie Secretary of Agriculture:

You think i t i s a distinctive

Mr. B^lsy 2

I d°«

I think i t i s a distinctive territory

and that there i s a distinctive character to this territory,
and i t i s a great undeveloped territory that lies southwest
of Kansas City; it i s a great borrowing territory, and we
feel, as Kansas bankers, w ought to have a regional bank
here and be in the

A class.

There m y be some sentiment

in that, but it seems to m there is a lot of good business
sense in i t , if we are going to have a lot of regional banki
I believe the territory of St. Louis is better defined and be1
ter developed.
The Secretary of the Treasury:

You speak of Kansas as a

borrowing state?
Mr. Bailey:

Yes, s i r .

The Secretary of the Treasury: Am I understanding you
Mr. Bailey: We do borrow.
The Secretary of the Treasury:

The problem confronting

Coiaaittee ie, of course, to so arrange the territory


it ahall not conaiet wholly of borrowing territory, but




1. J. Bailey.

that it shall be licked up with a lending territory ae well.
Mr. Baileys

I would suggest that just at this time the

banks of Kansas have in Kansas City a good many millions
of dollars.

1 would have to ask Mr. thralls of the Clearing

House Association how much, but I assume they are the heaviest
depositors of any other state adjacent to Kansas City,
and while it takes money to feed our cattle at certain times
of the year and to move our crops at certain times of the
year, I did not even want to infer that Kansas, as a general
proposition, was a borrowing state or her people were constituted that way.
The Secretary of the Treasury: What we have reference to
is the seasonal borrowing.
Mr. Bailey:

That is what I referred to*

The Secretary of the Treasury: And in all such oases it
seems wise to connect such territory up with a territory
that has a large lending power, in order that these units
may be as self-contained and self-supporting as possivle.
How the question is, should you have a district with Kansas
and St. Louis both in it?
Mr. Bailey: I should judge we would have a stronger institution here in Kansas City, because we would not have

W. J. Bailey.

to divide with that great cotton country down there that
absorbs this great amount of money at certain seasons of the

In other words, the territory of Kansas City is the

kind that diversifies its borrowing, wheat, cattle and corn,
and three or four Sorrowing periods in the year.
The Secretary of the Treasury: Thank you very gaioh.
Mr. Goebel: I would like to get in the record a statement
signed by 1500 banks, expressing their desire that a Federal
reserve bank be located at Kansas City:
Missouri 211
Hew Mexioo 20
Oklahoma 397
The Secretary of Agriculture: Vere those voluntary or were
they in response to letters?
Mr, Goebel:

*n response to letters*

The Secretary of Agriculture: Have you copies of the letters
sent out?
Mr. Goebel: Yes, sir.
The Secretary of the Treasury: They may be filed as exhibits. Bring the letter to which they are responses, and

XL 9

f. J. Bailey.

f i l e that with them.
The committee will adjourn until 2:30.

Whereupon at 13:50 O'clock P. It, a recess was taken
until 3:30 O'Clock P. M.



3:30 o'clock P.M.
The Secretary of Agriculture: Gentlemen, the Secretary of
the Treasury will be here in a few minutes ana to expedite
oattore we might proceed with the hearing, since everything
that is said will go into the reoord.




The Secretary of Agriculture: Tour name?
Mr• Bee: tfilllaa Kee,

: The Secretary of Agriculture: Tour occupation, Mr* Meet


Mr. Mee: Banker.



The Seoretary of Agriculture: What do you represent?
Mr* Mee: I am President of the Security Sational Bank,


also President of the Oklahoma City Clearing House.

^The Seoretary of Agriculture: Mr. Mee, do you represent
the Clearing House Association?
Mr. Mee: Yefi*sir, I am one of the members here representing
the committee.
The Seoretary of Agriculture: Are you delegated to represent
the Clearing Rouse?
Mr. Mee: let,sir.




The Secretary of Agriculture: Hare you any resolutions?


Mr* tfee: No,sir, I have not. Ve did not take any official I
action or appoint a committee«


The Secretary of Agriculture: Do you know the problem the i
Committee is dealing with?
Mr, Meet



The Secretary of Agriculture; We will be glad to have you \
express your views.


Mr. Uee: The Oklahoma city bankers, I will say personally, ;



I that I have Inquired of every member who is eligible to be




a member of the Regional Bank, and they all support Kansas
City, and St«Louis was their second choice*


The Secretary of Agriculture; You are speaking of Oklahoma j


Mr. Uee: Yea,sir* They also unanimously favor keeping the ;
entire state intaot in the regional district, and that it
should not be placed in Texas ox Denver, Colorado.
The Secretary of Agriculture; Tou dont want to go south?


Mr. Kee: South nor weat. T?e have no buainesa whatever,


no buaineea connections with Denver and only very little with j
Texas. Once in a while during the fall-when cotton ia »oving/
the southern portion of the state has some connections, but




! very little.

The Secretary of Agriculture: How cany banks are there in


j Oklahoma City?
; Hr, Mee: There are 14 banks In Oklahoma City, 6 of which
i belong to the Clearing House*
j The Seoretary of Agriculture: How aany of those are National
Mr« Mee: Fire National that belong and one that does not.
The Seoretary of Agriculture: Five of the nine are national
Mr* Mee: Fly© of the nine are national Banks, yes,sir.
The Seoretary of Agriculture: I dont know whether anybody
has told us whether there ia any legal barrier to subscriptions
by State Banks?
Mr. Wee: Z asi not prepared to disouas that question. There
will be a gentleman probably from Ardmore —

The Seoretary of Agrioulture: To what extent are your

; banking relations with these two cities that you mention?


Mr. Meet

As near as I oould estimate it, it would be about

; so per oent, 30 to 25 per cent to St.Louis, about 75 to 80
; Kansas City. To illustrate that, 1 asked *y remittance clerk


yesterday to give me the remittance of our bank to Kansas City

for the last week and the remittance to St. Louis. The remittance
to Kaneae City was something over i540#000.Wfand between
ninety-four and ninety-five thousand to St.Louie.

St.Lou 1B

i© a central reserve city, while our balances here do not count
as reserve*


The Secretary of Agriculture; Whateijdterest do you get on I
I your balances?


j Mr. ifee: Two per cent.
The Seoretary of Agriculture;

Could you give the facts for

any other tank than your own?


: Mr. Mee: I oould not, but Mr. Guthrie, President of the


State Bankers Association I think can.
The Seoretary of Agriculture: He is here?


Mr. Mee: Tea,sir. I do not expect to go into that detail.
• The Secretary of Agriculture: lhat city is the rolune of
your business men's trade withT
! Mr. Mee: That is divided, mostly east and with Kansas
Of course the tanking largely is with Kansas City. [
: I »ight state that Oklahoma City's: -banking interest is largely


with Kansas City and Chicago. The cotton interests are divided




to the east almost altogether. flew York and Boston very




The Seorataxy of Agrloulture: Do you think there would be j
a unanimous dlainollnatlon to be attached to any other bank j
to the eouth?


Mr. Mee: Bo, there le absolute., unanimity not to be




The Secretary of Agriculture: I said disinclination.
Mr* Me©: I am certain of that, Mr* Secretary*
Tbe Secretary of Agriculture: Suppose New Orleans would
request a regional bankT
Mr* Mee: We do practically no business whatever with
The Secretary of Agriculture: So your first ob&ftoe Is
Kansas City and your second St.Louis?
Mar* Mee: Yes, sir*
The Secretary of Agriculture; Is there any other fact
that you desire to state?
Mr* Mee: He,sirj there Is nothing exoept capital and
surplus and soae matters like that* which I think you will
get from so»e of the other gentlemen*



The Secretary of Agrioulturej

Thank you very

j The Seoretary of Agriculture:

Please give your


Mr* Brown: Elmer £• Browni
The Seoretary of Agrioulture: What is your occupation,
Mr. Brown?
Mr. Brownj Secretary of the Chamber of Commerce of Oklahoma
The Seoretary of Agriculture: Tou know the problem that
we are confronted with?
Ure Brown: Ye* $ sir.
The Seoretary of Agrioulture: le will be very glad to have
your triews.
Kr. Brown: He are here for the purpose of urging —•
The Seoretary of Agrioulture: May I ask before you begin
if you are delegated ia anymy to represent the business
Mr. Brown: Yes,six, the Chamber of Commerce of Oklahoma
City asked ae to be present here*
The Seoretary of Agricultures fas taat an



Hr. Brown: Yes,sir, froa the President. One of the
important —»


The Secretary of the Treasury*

Will you ©peak a l i t t l e

louder, so these gentlemen oan hear you.
Mr. Brown:

One of the important features to ay mind was


that we did not want the atate to be divided between two,


i put into two regional districts, nor did we want It to go to
• the south or to the weet, any district largely comprising

; territory to the south or to the southwest; but we prefer tbajt
, it be in a district to the north and eaat, and would prefer
• a district with Kansas City as the — including Kansas City
as the regional bank, for the reason that we believed that
would entirely eliminate any danger of having our state diemembered, also following the regular channels of trade«
: \- The Seoretary of Agriculture:

Waiving the question of

di am enter iDent of the state, what would you say?


Ur* Brown: I should say by all means to the northeast,
Kant as City* As an illustration, the malls going south
are probably not more than ten per cent, of the mails going i


to the northeast, I should say even les* thanfhat, probably j
not aore than fiye -pet cent, of the *ail* moving southward of


total, as against £S per cent, moving to the north and northeast.
The Secretary of Agriculture: There ie nothingt in your
mind about any point to the south or west?
Mr. Brown; Ho,air.
The Secretary of Agriculture: What would you say as "between
| Kansas City and 81.Louis.
Mr. Brown: Well* decidedly Kansas City, because there is
one day saved in the transmission of nail or exchange^*
The Secretary of Agriculture: To what extent oan you speak
of any. other locality than Oklahoma City?
Mr. Brown:

I have not been delegated to speak for them*

I have some statistics presented by the entire state as to the
volume of business*
The Secretary of Agriculture: On what are those based?
Mr. Brown: So you mean how are they compiled?
The Seoretary of Agriculture: Yes.
Mr. Brown $ They are from the federal census and state
The Seoretary ©f Agriculture: Do you Bean the volume of
busia«0» to any given point, or —



: Mr. Brown: Ho*
| the Secretary of Agriculture; Or simply showing the strength
of the industries?

j l!r. Brown; Only the strength of the industries, and the
particular needs of the industries of Oklahoma .for such asaistanoe a» a regional bank can give* '
The Secretary of Agriculture: We are familiar with the
development of Oklahoma, Kr. Brown, with its groat, rap id
industrial evolution* Perhaps it would be better for you to
just bring out anything that la in your mind ae to the needs
of the at&te*
Mr. Brown: Aa illustration andj^roof that we would fare
better to go to the northeast, to be connected to a point
j northeast id the matter of cotton*

While at Oklahoma City
j the 3? firms handled about $43,000,000.DO/of cotton, the



! paper,
as you know, does not follow the ootton, the ootton
being billed dlreotly, so that the paper does not follow it,

but would more likely go through Kansas City, or the north -j
I east, than it would to the south wherethe ootton is billed


from the eowpress*



The Secretary of Agriculture:

You might d i r e c t yourself


; more especially with reference to whioh of the cities that
you have disou&eed that you would prefer*

a l



j1 Mr. Brown:

I «ould eay Kansas City, because we are

b e t t e r acquainted, and the Xanaae City b&nk&rs &nd the
Regional bank at Kansas City would

be totter acquainted


with the conditions in Oklahoma, and therefore better prepared to give

credit to Industrial concerns*

The Secretary of Agriculture:

Would they bs Ksasaa Oity

) tinkers?
\ iir. Brown; I judge that being that near# they would be
In closer communication with Oklahoma^
j The Secretary of Agriculture:

W o would be the directors

that would pass on your paper?
iir# Brown: That I donft know.
The? Secretary of Agriculture*:

It i s conceivable


thoru iui^ht not be a Eansaa City ftun on the Bpard,
: Kr. Brown: Ho, but I t i s probable" that they would be
from this district.
Thtt Secretary of Agrioulture:

Yes, from that entire

I Mr. Brown: Yea, from this entire district.
! The Secretary of Agri-culture:

If you have any s t a t i s t i c s ,

ijir, Broarn, that you would like to f i l e as exhibits to your
testimony, ve should be glad to have them presented.



i Mr. Brown:
Mr. Goubel:

I w i l l be pleased t o do t h a t , thank you,
I would l i k e to get i n t o the record the r e s o -

l u t i o n by tats Secretary of the Kansas R e t a i l e r s for their

The Secretary of the Treasury:

That may be f i l e d as a paxt


of thtf record.
i; lir. Goabal:

| Mr, Kemp:


would l i k e to c a l l Mr, Kemp,

Gentlemen, you havt^ heard a number of Kansas



jplty bankera, and I am going to give way to Ux. Mulvane,
a atate banker of Top@ka# Kansas, president of the Bank of
*ho wont a to get a^ay on an early train.


; The Secretary of the Treasury:

Mx. kulYane, w i l l you s t a t e

jfor the record your f u l l name and your oooupation and addreeeT
Ur, llulvane:

John R. Uulrane; president of the Bank of

Topeka, Top^ka, Kansas*
ii Th<s Secretary of tha Trwtaury:


you r©present



!Clearing House Association* Mr* Hulv&ne?
Mr. Mulvane;


Mr, J. B. Burrows.

s i r , Mr. Burrows w i l l represent them,

n 3


The Secretary of the Treasury;

You know

the problem

confronting u e , Mr. liulvane?
Mr. Mulvane:

Yea, s i r .

Thu Sacrst&ry of the Treasury:

Will you give us any views

!you h&vs to offer?

&r* Mulvane:

About 65 pur cent of the business from

I town co&es t o Kansas City, m represented by our regular
day by day, day by day.
and Xansaa City.


Ye have 28 t r a i n s between my town

have a town of about 50 1 000 people*

Our b u s i n e s s n a t u r a l l y comae here*

The Secretary of the Treasury:

This i d our natural oant&r,
I s that true of a l l of the


! banks do you think of Topeka, that the percentage i s about
the aaffiu with a l l the banks of Topskat
Mr* Mulvane: I would think so. X would think there could
not btt much differenoo.
the Secretary of the Treasury:
of sentiment about

Ux* Iful^ane:

Is thera praotical unanimity

the desire t o be attached to Kansas City?

i l l of them.

The Secretary of the Treasury:

If you did not have a bank

i n Kansas City, what would be your second choice?
Mr. Mulvane:

The natural trend of our business i s Chicago

next in roluae of business.





The Secretary of the Treasury:
Mr. Mulvane:

What i s third?

S t . Louis.

jj The Secretary of Agriculture:

Do you

know what proportion,

how i t would d i v i d e up?
'! Mr. ttulvune: Looking over the exchange, X b e l i e v e that
jpoeeibly frost my bank i t runs about 65 per cent Kansas City,
to Chicago # 10/

t o St. Louis

and about 5 to Hew York*

d i e o c c a s i o n a l l y and we have aome l i f e Insurance t o
c o l l e c t down i n Hew York*
The Secretary of the Treasury:

You do not seem to be

strongly t i e d t o Hew York.
! Mr. uulvane: We are t o o far


} The Secretary of the Treasury:

You are t i e d t o Hew York


only in case of death?
, Mr. Mulvane: That is all.

! The SJorataxy of the Treasury: Yours is a stats bunk, Mr.
'! Mr. Mulvanu: Y^a, s i r , the oldest bank in the state;
! The Secretary of th« Treasury: %hat seeus to be the


probability in reference to neobsrship in this Association
by Btate banks?
Mr. Mulvuna: Our bank expects to become a neaber if we




,' are permitted.

The Secretary of the Treasury:

if! Mr.

What i s your capital,




Mr. Mulvane:



The Secretary of the Treasury:

j think you might break in

; with that.
Mr.. Mulvane:

1 believe so. W will try i t , i f the law w i l l

Secretary of Agriculture:
to be rather nodest i n t h i s
Mr. Mulvane:



Why not?

The Seoretary of Agriculture:

Mr. Mulvane, Kansas

l e have heard

no sugges-

of any regional bank exclusively in Kansas.

Mr. Mulvane: W will t e l l you what we might do.

W might

coffiproKise with you and put t h i s regional bank over in
Kansas City, Kansas.

That would suit us just as well.


Governor i s hsre and I believe he w i l l grant permission to
go over there.
The Secretary of the Treasury:
Mr. Mulvane:

There i s just one other idea 1 want to state |

t o you gentle&en.
In the various

Thank you, Mr. Mulvane.

bu Bines a of t h i s territory, I want you :



ji t o ruBsmber t h a t there are 14 d i f f e r e n t Portland oeiaent
p l a n t s p u t t i n g out an isnense product, with headqu&trers

! in Kansas City.

I happen to belong to oife of them and we

|j have

to keep headquarters hare* doing I forget how much

but a very large business*
The Secretary of Agriculture:

Mr, jjulvan^;

Ho, I could not*

of 3,000 barrels a day.

Could you approximate i t ?
Our plant had a capacity

X don't know what the others are.

Mr, Thralls:

The figure* will be f i l e d , jp% Secretary*

Mr. MulTane;

That i s a l l .

The Secretary cf Agriculture:

Ur, Goebel;

Than* you very kindly, Sir.

I would l i k e to c a l l Ifr* R. JL Long of Kansas

: City, president of the Long-Bell Umber Company.






The Secretary of w^gripalturftjl presun© you have some i n foroation, Br. Long, relating to the lumber industry?
Mr. Long:

Yes, s i r *


The Secretary of Agxiculture:

Connected with Kansas

Mr* Long:





Yes, s i r .

Do you want me to g i t e i t to you?

The secretary of Agriculture:


Tou may proceed, except



i*-ii i3.. statistics, we would prefer to have you file
them, that is all.
j to. I»oog:

It is very brief.

The Secretary of Agriculture: You &&y givs the general
results* yea, but I &m ©peaking of details,
Mr, Long:

Total capital employed by manufacturers of

lumber located jfrXaasas City,


Total value in dollara and cents of lumber marketed
wholesale through Kansas City, and cleared here, ^40,155,270.0
By comparison, St. Louie has about 60 per cant of the
&fix>unt, or about 132,000,000.00, and Chicago about 70 per
cent, or about §32,000,000.00.

Amount of money coming into this city on account of head-

quart are of numerous retail lumber yards being located here,
I ^17,687,883.00, Chicago receiving about 70 per cent of thia
amount, or about 412,000,000.00, and St. Louis about


, psr cent of this amount, or about $5,300,000.00.

Th» Secretary of the Treasury:

How far do your operations

i cover these states which are dsscribed in this district here?

iir. Long: Our lumber, about 11 per cent of it goes export.
We ship to practically all the states east of the Rocky

i Mountains, but you understand that lumber is all paid for






through this office and cleared through the banks in Kansas
City, and these figures indicate that.
The Secretary of Agriculture: Where do you draw your luaber
I Ux, Long: Our lumber is manufactured in Louisiana, Texas
,|and Arkansas.
I The Secretary of Agriculture:

And your distribution i s prin-


oipally ovar what states, the distribution of the product
j itself?
> Mr. Long: Well, as I say,." w« practically cover all the
otatee In tfc* Union, Texas - ~

; The Secretary of


Z & speaking of the states

| of this district, particularly, about what are the perotaatagest
Mr. L°nS:

About 11 $et cent of it goes into Iftseouri.

:larger portion of the balance goes into Texas, I l l i n o i s ,
"Kansas, indiuna, Oklahoma* Ohio, Nebraska, Ioaa, Arkansas,
Michigan, Kaw York, the Hew England states, Pennsylvania,
Colorado and Hew Mexico.

The Secretary of Agriculture:
Mr. Goebel:

Mr. Guthrie, president of the Oklahoma

i Bankers1 Association*

Thank you, Mr. Long.



O W, S.

Se Secretary of Agriculture:

Will you give your f u l l

Mr. Guthrie?

! Mr. Guthrie:

W. S. Guthrie, president of the Oklahoma



Bankexa* Association,
Tht Secretary of Agriculture: Are you connected with a

: Jlr. Guthrie; Y O B , air.
The Secretary of Agriculture;
Ur, Guthri«:

$111 you give that please?

Farmer» fiatlon&l Bank, Oklahoma City.

Th& Storetaxy of thd Treasury:

Will you proceed to t e l l

what views you have to express?
; Mr* Guthrie:

. came h«r« to repr«&ez& tii^ view$

in a

general way of the Oklahoma Bankers1 Association.
Tha Secretary of Agriculture:

idrt Guthrie:

I am president of the Aeaociation and was

by the executive oozosdttee to represent as near

a s possible their

feeling i n the

Tht> Seoretary of the Treasury:


In nh&t sense are you a

Speak a l i t t l e louder,

Mr. Guthris: W have in Oklahoma about 930 bank*.


of those are national banks, and I daresay are e l i g i b l e


ji 10




to the regional reserve stock.

W will contribute pOBsibly

$800,000.00 Q£ the c a p i t a l etock.

There i s about all t o l d

if If teen Billions capital and surplus that could be contributed by the national banks ana state banks that will
ijbe eligible, providing they are eligible.
l| The Secretary of Agriculture: May the state banks under your

l aw subsvribe?


|| Mr* Guthxier

That I px^sui&e i d to be detarminad*


wight not under your lav.


|| The Secretary of Agriculture:

Is there any barrier in


your law at a l l , that i s what j am trying to find out.

J Mr, Guthrie: The barrier as 2 understand it was held by
our Attorney General, at least, not so held, but It has
ibeen held that ^a • -., state
other corporation.

banks cannot hold stock in any



Kansas City in this xaap has shown that there are £39

;banking points in Oklahoma, and 1 think they are approximately
at least correct, if not technically eo, for the nui&ber of

bank acoounts in Kansas City from Oklahoma, and I think i t
i s safe to say that five-sixths of the business of Oklahoma
' Is done with Kansas City, and drafts drawn; In fact those
'are actual figures or very close to i t .



Th« Secretary of the Treasury:

You axe speaking of the

banking business alone?
Mn Guthrie:


T ^ banking business.

Of course wo are

l a r g e l y dependent on and aore particularly interested in
t h a t than anything e l s e .
l a to Kansas City.

The flow of the banking trade

I t l a true that we a l l or a number of

us h&Y«* account a in St. Louie, i t i s true that
The Secretary of the Treasury:
Mr. Guthrie:


Have accounts in St. Louis, y e s .

The Secretary of Agrioulture:
Un Guthrie:


National banks?

That i s a l i t t l e better than two-thirds of

our banks.
The Secretary of Agrioulture:
Mr. Guthrie:


There are 275 i n Kansas City.

X w i l l qualify soy remark t o say

that the volume of business - the amount of deposits i s
greater certainly i n Kansas City.
The number of checks that we sent from Oklaho&a City,
for example,

l a s t tseek was - I have those figures - the

amount of reaittanoes l a s t ve^k was $3,566,700.00, the Kansas
City remittances,

and the remittances t o fit. Louis were

|S00 # 600.00 # and that i s about the r a t i o that w i l l go through
the year.



n is


f jxe See»tary of the Treasury:

Would you be served p r a c t i c a l l y

l a s w e l l by : a regional bank at St. Louis

as by one at

! Kansas City?
kr. Guthrie: W have some doubts in that regard.
The Secretary of the Treasury: Assuming that you had a
branch at Kansas City,for instance, and a bank at St. Louis.
Hr. Guthrie: Well, I can only answer that question similar
to the answer that you received from other witnesses this
morning y
The Secretary of the Treasury: You prefer to deal with

W want to be near headquarters.

It i s just

!:Mke an arny that wants to do good work, i t has to be close
to Its caaO.,, of supplies, and Oklahoma Is a considerable portion of ta« territory to be represented, and furthermore, we
are s t i l l developing.
The Secretary of the Treasury: What i s your second choice?
Kansas City is your f i r s t and what i s your second?
Mr. Guthrie:

St. Louis 1B our second choice.

Our oosuBittet

passed a resolution to that effect, and I have i t here.
The Secretary of Agrioulture:

Mr. Guthrie, i s there any



V. 8. Guthrie.

differeaoe in your Judgment between your section of the state

and the eastern section, take I£ua|oge«*, for instance.
i! Mr. Guthrie: W hardly believe there i s , with regard to the

flow of trade,

Oklahoma i s unlike any other state X think

In the Union that you will hare to deal with* W have various
crops in Oklahoma of everything that can be raised in the
jjfceajperate aone* wh^at, cotton -—
The Secretary of the Treasury:

How far do you represent

the sentiment, or do you think you represent the sentiment


the bankers of the entire H^ateT

I see you are president


of the Bankers1 Association of Oklahoma*

j Hr« Quthxi&t } « i l i gay in reply to that that immediately

following ouz executive ootenittee meeting on January 15th,

pur secretary eent out a letter

and ask^d the aliaple queici-

tion, in what state would you prefer a federal reserve bank*
C per cent of the answers received deelgnated Kansas City.
i The Secretary of Agriculture:

Could you t e l l us whether


there was any variation in thoee replies from East to Weott
! iir. outhrieJ Well, • oould not t e l l you that.

A few - 1


think Mr. garrison has the figures - 15 or 30 designated
either Kansas City or fit. Louis and some actually designated

a 14


W S. Guthrie.

Oklahoma City.
The Secretary of the Treasury: Will you f i l e the original
letter of inquiry, a copy of i t , with all replies received
to it?
Kr. Guthrie:

Yea, sir.

The Secretary of the Treasury: And send that to Washington,
i f you please.
Mr. Guthrie: All right.
The Beoretary of the Treasury:

i wonder if you could chart

those oo a nap.
Jir. Guthrie: W can do i t ,
i The Secretary of Agriculture: Attach a map to i t .
; Mr. Guthrie:

Yes, sir, if our seoretary will do that.


i: The Secretary of the Treasury: At the earns tl&e you might

the replies wherover they favor St. Louis as first
and so mark thsm, and where they fsaror Kansas City
ae f i r s t choice* mark them.
Mr, Guthrie:

When we started up here, the replies were not

a l l in yet, but that was the percentage.
She Secretary of the Treasury:

You will get that to th$

committee in Washington.
ISr. Guthriej

These replies that we have reoeived, we hare

i a is

W. 8, Guthrie.

hero now.
The Secretary of Agriculture;

Mx* QUthrie:


The Secretary of the Treasury:

You caa chart them for us? !

Yes, a i r .
You eaa chart the is within


j t h s next two weeks, and you stay feave the remaindor of the

ifr; o u t h r u :


Y^«# ^iar*

Secretary of t&$ Traaeury:

Thank you*

The Secretary of the Treasury:

Pleas© state your mm


and your address.
We. Harrison:

I . B. garriaon* Enid, oklahoiim,

The Secret ary of Agriculture:


That i s i n the northwestern j



|! section?




Hr. Harrison:

Yes, sir.

The Secretary of the Treasury:

Can you add anything to

what Mr.Guthrio just told ue?
Mr. Harrison:


would like to say regarding the distribu-

tion of the replies so far received, that there i s no dif-


whatever between the laatern or aouthern or northern

n 16
W Bw Harbison.

of the state.

I have the original evidence keys, ani I


alao have ths letter here which *ae sent out and there ia

kbeolutsly nothing in that letter relative to Kansas city or
'Oklahoma; but we did say in that letter that we thought i t
would be a oalansity to attach Oklahoma or any part of i t to
or to any place ia Texas, and the ©Tidenoa here a l l
'ahowa that i s the* opinion of everybody elas,
Thsy/all .,
jjarrangsd alphabetically, so you can find any to^n that you want
ffa did not gat replids from a l l that w sent thu l e t t e r out

W n**rax do on a circular l e t t e r .

W sent out 373

J & r^oeiv«^L back 168 of the blanks, ari about 18 l^tta
and the 18 l e t t e r s ware a l l of the aafce tenor, that they wanted
to go to Kansas City or gt, Louis, but thsydid not care much
! which.

That was the IS l e t t e r s .

I fixe Secretary of the Treasury:
that we have made of Hr. Guthrie*

Youfc&veJiattxd the request
If you w i l l be good enough

; to maid auoh a xcap as we ftsked for and have i t f i l e d at
| Washington.
i Mr. Harrison:

j did not quite under stand.



The Secretary of A«ri«ulturei

Take these answers and

i chart them on the states.


Mr. Ha***»9&:

^ a t i s hardly necessary, they a re so one-


1. B. Harrison.


The Secretary of Agriculture:

It will be helpful.


The Secretary of the Treasury: That will make the map



look all the better from your standpoint*


The Secretary of Agriculture: Just one word, ^here have '
been suggestions that points in Terns might ask for a regional

Tour letter seems to have conveyed some prejudice


against that idea.


Mr. Haiti son:


Ho, sir, I beg your pardon. If you will

read the letter it says that the northern part of the stateit does not say all of Oklahoma. It says it would be a
calamity to attach the northern part of the state*


were of the opinion that if a Texas City waald planned, that
a large part of southern Oklahoma would want to go that
way, but the evidence shows absolutely the contrary.
They have 183 banks and there are only four that desire to
go to any point in Texas, and those four from the best information I oan obtain are owned and controlled by Texas
The Secretary of Agriculture: You think there would be a
decided disturbance of business relations to attach the banks

in Oklahoma to any Texas City?




n 18

1. B. garrison.

Mr. Harrison:

No question about i t at all* W have no

joonneotion except Some cotton business there at certain
seasons which doss go that way, but th$ exeh&nge go a a

axouad the other way, and none of our banks actually want to go

tbat way and none of them I think evan want to go to Denver*

: The Secretary of Agriculture;

How about Haw Orluaiis, down



I Ux. garrison:

I would l i k s to say that we have acted

entirely with the idea of helpfeng


It i s not our

[position here t o help Kansas City or to try to work against
any other c i t y ,
W did not know even what th* facts
jrere regarding the feeling of our bankers until we sent t h i s

but, but the natural channels of trade and oouoerce si&ply
i t v certain- here, and «e were/auoh astonished at the
unanimity of the result that anybody would be. W exe
a majority, but we did not expect
Secretary of Agriculture:

You are not primarily concern-}

about Kansas CilyT
lir. Harrison;

Not a b i t .

The Secretary of the Treasury:

Thank you, Mr. garrison.

The Seoretary of The Treasury: Please give you name,
occupation and residenoe.
Mr. Copelandi

E. L. Copeland, Secretary and Treasury

of the Atohison, Topeka & Santa Fe Railway 0©s»pany, Topeka,
The Seoretary of the Treasury: Hhere are you located,
Mr. Cop eland?
Mr. Copeland: Topeka, Kansas.
The Secretary of The treasury: Mr. Copel&nd, do you
want to submit so»e faote or views about this problem?
Mr. Copeland: Tea,sir.

I would like to give ay

opinion as a financial officer of one of the largest
railroads in the United States, owing to the fact that
transportation is cur greatest industry, and anything
Effecting the finances of this country affect, erst?
transportation company*
I represent the Atofcleon,,Topeka & Santa Fe Railroad
Company, which for a number of years had its terminus in
Kansas City, B M then we built about 450 Riles to Chicago;
but the whole balance of the line terminates and delivers
its freight through Kansas City.


Ispeak as the finanoial officer of that eouspany with
800 banks that are in sideJ of that territory practically
adjacent to Kansas City. Through those banks I collect
j $3,000,000.00 a aonth, wbloh, a majority of it, 80 per cent
I of it, la collectible through Kansas City. Anything that is
| detrimental to Kansas City will effect that standing, and
the fundamental principles of credit are greatly Involved .
I therefore want to say that I a» fully In accord with Kansas
City's receiving a regional bank. For 25 years the bankers
of Kansas City, who are the brainest, brightest, up-to -date
i bankers and business men of this country, and have built up
this western country by backing every industry that has been
established, assisting the railroads which have expanded so
rapidly through this west, because without the help of Kansas
City we could not have expanded so far and established so
many industries along our line> and In establishing that,
we have established a credit wherein the employee, of every
railroad receives his oheok, whioh he knows will be bankable
through this ©itf» because of the fact that Kansas City is
as large a financial center as any other center in the United



States coarparatifely with its district.
The Seoretary of The Treasury: You understand, of course,
that the operation of this aot will not interfere with any
of those relationships that you now have established?
Mr. Cop eland:

It will not if itglves Kansas City a

regional bank.
The Secretary of The Treasury: But whether you hays a
regional bank here or not, your relationship with your
present oorrespondante

and with your banks will not be

affected one way or the other.
Mr. Cop eland:

I think it will.

It has taken us years—

The Secretary of The Treasury: In what way?
Mr. Cops land itfh err did/Sovexnaent
Savings Banked



Because theywant people to have confidence

in the Government. How, they are getting back to these
regional banks. Way?

Because they want the people to have

confidence in these banks where they are established.
The Secretary of The Treasu ry: Tou dont touch the point
at all.

The relationship that the Santa Fe System has-

established with banks and bankers throughout the country
will not be affected in the slightest degree by the location



E. L. Copeland•

I of one of theeo regional






Mr. Copeland:

It will i f Jrou take i t' off of our line,* i t



will have an effect as to the standing of Kansas City.
The Seoretary of The Treasury:

It hasnt anything on

earth to do with it, not a thing.
Mr. Copeland: If you do not Indorse as a ooaunittee a
regional bank in Kansas City, you give us a branoh bank,
dont you?
The Seoretary of The Agricultural:It has nothing to do
with your relations, your existing banking institutions.
! Mr. Ccpeland: If those banks eontlnue banking with
: Kansas City I admit ~~
' The Seoretary of Agriculture: They will continue to do


I just as they have heretofore done.

The Seoretary of The Treasury: These reserve banks are
i a different proposition* Y°u apparently do not understand


|i what this act states.


Mr. Copeland:

I think I understand i t ,

but i t i s a question


| of


retaining the trend of trade thxagh its present channels

iant that oorreotT
The Seoretary of Treasury: *e will be glad to hear about

! that trend of trade, but the point you wake as to $he


E. L. Copel&nd.

relations of your railroad to your banking correspondents
will not be changed in the slightest unless you voluntarily
ohange them*
Mr* Copeland: How about paying our employee©?
The Secretary of The Treasury: That will be done Just as
it is no;.
Mr. Copeland:

They will not clear through Kansas City

unless the Kansas City banks —~
The Secretary of The Treasury: They wont deal with this
regional bank, they will deal with the same banks they have
been dealing with.
Mr. Copeland: They may*
The Secretary of Agricultural; Regional banks do not inter*; fere with those operations in the slightest degree*
Ur. Oopeland: But it places Kansas City on a standing with
the other oentral points of the United States.
The Seoretaryjof The Treasury;

It looks—

If you have any facts oon-

o e m ing the trend of business we will be glad to hear them*
Mr. Copeland: Thef have all been exploited by Kansas City
men and I did not believe you wanted se —
the Beoretary of The Treasury: fe do not unless you have


E. h, Copeland.

something new to add. If you have anything new to add we
will be glad to receive it.

Mr. Cop eland: I dont know as I oan add anything exoept


establishing the credit of Kansas City through this vast
' territory. That whole vast territory is practically on this

j Santa Fe System —
> The Seoretary of Agriculture: Hay I auk, Mr. Cop eland —

I eee that your line atopa at Canyon City.
Mr. Copeland! Pueblo — that is right it goes on up to
Canyon City, yes,sir.
The Seoretary of Agriculture; What would be your view aa
to the relation of Coloado to Kansas City aa far as you can
judge by the railroad business? fcould it be related to
Kansas City or Chicago?
Mr. Copeland: I think it would be related to Kansas City. |
The Seoretary of Agriculture: Ihat about Western Colorado?
Mr. Copeland: It seems to me that —
The Seoretaryof Agriculture: You oanot speak froa the
business of your line?
Mr. Copelands

Ho,sir, our dealing is entirely through

the eastern part of Colorado.
The Seoretary of Agrioulture; Could you give us any hint


E. L. Copeland.

as to the drift of trade in Arizona and Hew Mexico, to
what extent it is to the east and to what extent it is to
the west?
Hr. Oopeland: New lfexioo is entirely to the east over
our line, most all through Kansas City. Arizona is most
all to the west.
The Secretary of Agriculture: Cattle go more to the west



Hr. Copeland: Ho, it i s

about divided.

They come over j

the road to the east; i t ie about divided, I think, the

Arizona traffic from east to west, and the Hew Hexioo more
I would like

to add just one point as to the railroad

expenditures through the western district.

You may not know

and you may know that the Interstate Commerce Commission
report separates the railroad by either eastern, southern
or western. The western territory covers a l l west of the
Mississippi River.

This compilation here shows that the

lines west of the Mississippi River expend yearly
$825,000,000.00 for operation.

How, that inoludes a l l

west of the Mississippi River oUar to the Pacific Coast,
and this territory adjacent to Kansas City reoeires of that


amount a sum equal to $15,000,000.00 a month, or practically
$800,000,000,00 a year.

Through Kansas City, this is still

going. The railroad business through this aeotion is growing
rapidly every year, and consequently the payments through
Kansas City, from a railroad standpoint are gradually increasing.
The Seorataxy of Agrioulture: Thank you very muoh. shall j
we file this map as an exhibit?


Mr. Copeland:

You oan, yes,sir.

I showing the live stook figures.

There is a l i t t l e pamphlet!



Mr. Stubbs: I am more a farmer than a "banker, and If you
will permit me I am going to speak of that olass of people wh|>
furnish the railroads and the banks all their business, le
would not need any banks if it wasnot for the farmer, the
producer of live stook and grain and agriculture.
The Secretary of The Treasury: Prooeed, Governor.
Mr, Stubbs: And Kansas City is the very heart of the
greatest food produoing oountry in the world, and that
oountry is now going up-hill; it has not started down hill.
It is undeveloped.

The farming resources of this vast

empire of which Kansas City is the center are undeveloped
and they need cash, they need money. The food products
of this oountry that Kansas City represents and whioh is
dependent on Kansas City for financial and commercial
relations — the food products can be doubled, Kr. Secretary,
if we have proper banking facilities and proper means, and
I am in favor of 13 banks and not 8 banks.

I am in favor

of branch banks in Wichita and Oklahoma City and the cities
out through here, and a regional bank for Kansas City that
will oome in touoh with the problems of this great oountry
that is undeveloped.



. R. Stubbs.

I have got some land In Colorado that we have developed
in the last three or four years that was a desert five years
ago. Thia year we raised 800 tons of alfalfa on account of
a pumping plant. Irrigation has not been touched in this
country; it has only been started, and I believe it is the
duty of this Government and of this administration at this
time to enoourage the development of this great west that
furnishes the food stuff of the nation and furnishes the
business of the railroads and the banks and the oommerce.
I believe, again, you have got to come in touoh with
the small banks, with the little ten thousand dollar capital
banks. Yfe have got several hundred of them, Colonel Mulvane'i
bank of $300,000*00, one of the largest state banks, if not
the largest, but they run down to $8,000.00, and there is
one in every county and in every village praotioally in the
state, and we want the finanoial center here that can meet
the demands of the little folks.
I believe in your bank system, and I believe it is a
good start in the right direction — that the regional banks

I am glad you passed the law, but I believe you have •

got to oome to where you oan touch the small fellows. Most
of your banks will be in Hew York and Boston and Chicago and



W. R. Stubbs.

St.Louis, if you please, and big places, San Francisco,
but here in Kansas — this is a Kansas town; Kansas City.
Kansas City is Kansas principally, and Kansas men have made
Kansas City and Kansas money.
I want to tell you these banks would not amount to
muoh, would they, Pete Goebel, if it wasnt for Kansas money
and Kansas people* Goebel lives in Kansas. I am not modest
I want to tell the truth and want you to r'eoognize it, and
I believe this great Government ought to recognize the people
who produoe the food stuffs and feed the folks, and you oant
do that better than to locate this Regional Bank in Kansas
City. Thank you.
The Secretary of Agriculture: Governor, may I ask you
if you have any advice as to where Colorado should be attached?
Mr* Stubbs: Well, sir, we ship our alfalfa hay to Kansas
City and get the oash for it here from a little farm we have
out there, and I believe Kansas City is the logical ipoint.
The Secretary of The Treasury: You mean for Colorado?
Mr. Stubbs: Yes,sir; but a branch bank at Denver. I
believe that this thing ought not to be restricted; it ought
tote extended as fully as necessary to oome in direot touch
with the people of this country. Thank you.


The Secretary of Agriculture: Give

your name to the

Mr* Crowell; F« G. Crowell.
The Secretary of Agriculture: What is your occupation?
Mr. Qbowell: Vice President of the Hall-Baker Grain
Company and formerly President of the Board of Trade of
Kansas City, Missouri*
The Secretary of The Treasury:

What is it you desire

to submit, Mr. Orowell?
Mr, Crowell:

I desire to discuss the four propositions,

first, the volume of grain handled at Kansas City and
financed here, the amount of flour manufactured at Kansas
City and financed here —
The Seoretary of The Treasury: And the distribution of
Mr. Crowell: And the distribution of itj the amount of
hay that is brought to this market and distributed Irom
and the amount of feeds that are brought to this market
and distributed from here*
In the evidence that has been introduced so far it
has appeared in the press, as taken by this Commission at


F. G* Orowell<

other cities, I am inclined to believe that not a fair conclusion has always been drawn in reference to the grain.
Kansas City is a primary market»

What Is meant by a

primary market is that the grain is bought from the farmers
and shipped by them either direct to Kansas City or bought
from the farmer by grain men at the smaller towns in Kansas,
Oklahoma, Nebraska and Colorado and shipped to Kansas City.
The volume of grain brought to Kansas City and inspected
here for the last 12 years consists, on an average, of 70,000

To be exact, last year in grain alone abo$t seventy

million bushels was brought into Kansas City, inspected here,
unloaded here, handled here, and paid for by Kansas City
grain men through Kansas City banks. In addition to this
about forty million bushels of grain bought in Oklahoma,
Kansas, Southern Nebraska and Colorado was financed by Kansas
City grain men, cleared through Kansas City banks and forwarded from the point of origin to the point of destination
without stopping at Kansas City, making a volume of about
one hundred million bushels of grain of a value of about
seventy/millions of dollars which came to Kansas City and
is distributed from here either for export or to the milling
trade in the east.

In addition to this, gentlemen, 80 per


. G* Crowell.

cent of all the grain that is exported from the gulf ports
of Galveston, Port Arthur and New Orleans is bought by
Kansas City exporters and sold direct to the continent and
to the united Kingdom and financed through Kansas City*
That varies all the way from twenty million bushels to
fortymillion bushels• And the question that confronts
us frequently is in reference to getting a ready market
for our foreign grain bills upon the exportation of this
large amount of grain whioh, as I say, is financed through
The volume of grain that is naturally tributary to
Kansas City comes from south of the Platte, from all of
Kansas, from all of Oklahoma, from eastern Colorado and
from the Panhandle of Terns*
Within the last four years there has developed in what
is known as the semi-arid region, or that part of the country
In extreme Western Kansas and Eastern Colorado, a trade which
oomes to Kansas City and has no other market* That is a trad
in kaflr corn, mllo maze and federita. Last year we brought
into Kansas City, and this is the only market for its distribution, about two millions of bushels of that grain, and
this same territory, poaprieing an empire m itself, BO far

F* G. Crowell.

as Eastern Colorado is concerned, extreme Western Kansas,
a strip in Oklahoma and the Panhandle of Terns, is developing
a large quantity of this which must seek an immediate and a
ready market.

This grain is being distributed at the

present time by Kansas City merchants all throughout the
eastern states and some for export*
Into Kansas City they were shipped last year 36,000
cars of hay*
Kansas City is the first primary hay market in the
United States, or in the world, and this product is distributed all over the south and in the east*
In field seeds and garden feeds Kansas City handled
last year about 65,00Q/pounds at a value of something over
a million dollars.
I want to refer briefly to Kansas City in reference to
its being a milling center.

Kansas City is third in its

milling capaoity of any city in the Ujaited States, being only
surpassed by Minneapolis and Buffalo. Its output last year
was 2,335,000 barrels of flour and a great deal of this
flour is also sacked for export, or a portion of it. Out side of Kansas City, Missouri, and in the states of Kansas,
Hebraska and Oklahoma there was milled 15,343 barrels of




This flour

of dollars*

is at the value of seventy-four millions

Therefore, you have coming through Kansas City,

paid for by Kansas City flour merchants, by Kansas City grain
and hay men, approximately one hundred and seventy-five
millions of dollars annually, whioh is to be financed through
Kansas City or by Kansas City merchants through Kansas City
There has also grown up in Kansas City and throughout
the states of Kansas and Oklahoma a large milling trade in
what is known as alfalfa products. That is right in its

In this last year in Kansas City, Missouri, alone

there was manufactured out of alfalfa what is called alfalfa
foods for beasts about seven hundred and fifty thousand dollars
worth of products.
That is about all I have to say.
Secretary of The Treasury: Thank you.

n 1


The Secretary of Agriculture:

Give your name to the Re-

Mr. Schneider:

J* a. Schneider*

The Secretary of Agriculture:
Mr •Schneider:

Where from?

3t* Joseph, Missouri.

The Secretary of Agriculture:
Mr* Schneider:

What i s your occupation?

V i c e - p r e s i d e n t of the Gaaaman-American Nation

a l Bank, S t . Joseph, Missouri*
The Secretary of the Treasury:

I f you w i l l kindly

Mr. Schneider:

Very w e l l .

You know

our problem, Mr4

address roMTa&lt t o i t .

Tfe i n S t . Joseph f e e l very

f r i e n d l y toward Kansas City* I have made some investments
here/made some money* But i f you w i l l look at t h a t map X
think you w i l l agree with me we belong t o Chicago, and every
argument made here today by t h e people from south and west of
Kansas City seems t o me to be an argument i n favor of our
opinion t h a t we belong t o Chicago.
The Secretary of the Treasury:

What reason i s there for

Mr* Schneider:

Tou w i l l n o t i c e t h a t second dark spot

there r e p r e s e n t s S t . Joseph, with about $30,000,000.00
bank a s s e t s .

Tou w i l l n o t i c e north of there Kansas City

n 3


J. G. Schneider*

has vey few correspondents*

You will notice in southeast

Nebraska Kansas City has very few correspondents, and in
southwest £owa very few bank correspondents.
There are about 800 country banks in that territory that
do business in St. Joseph,

I think very few of them do busi-

ness in Kansas City, their natural river point being St.
Joseph and their natural eastern point being Chicago*


per cent of our business is with Chicago* We have very
little business south and west of Kansas City, And If Mr,
Seal's argument is correct that they would rather be hooked
up with Chicago than St* Louis, then our argument is also
certainly correct*

He says the natural trend of trade from

this country is to Chicago. If that is a fact you ought not
to ask us to step backward 50, 60 or 70 miles. That is what
you would do if you put us in the Kansas City district.
Here is a letter from our Clearing House Association.
It is just a page and will take me just a minute.
(Letter read.)
Mr.Schneider: How just a few brief facts. It will not take
me but two or three minutes. We are second in manufacturing
in the state of Missouri, and that is borne out by the statistical department at Jefferson City. We are the fourth live


J. G. Schneider.

stock market in the world.

We are second in every department

of jobbing except in the matter of agricultural implements.
W have the largest saddlery and harness manufacturing establishe
ment in the world.

W have four l i n e s to Chicago; a l l of our

grain goes to Chicago.

W keep some accounts in St. Louis

simply for c o l l e c t i o n f a c i l i t y .
Look at that map again, and notice the map that was prepared here i n Kansas City, and you will see that Kansas City
has very few bank accounts north of St. Joseph in northwest
Missouri, very few in southwest Iowa and not a great many
in southeast


That i s our territory.

We have

nearly thirty million dollars of bank assets, and we belong it
The secretary of Agriculture:
Mr. Schneider;

Is yours a national bank?

Mine i s a national bank with total assets

of about $6,000,000,00,
The Secretary of Agriculture:

Have you considered Section

24 of the Act?

I don f t recall just what Section 84 i s .

The Secretary of Agriculture:

I w i l l read i t for you - as

to loans on farm lands.
Mr. Schneider:


think I know what you refer t o , yes.


J. G. Schneider*

The Secretary of Agriculture: A national bank may sake loan©
on lands situated within its reserve district?

Yes, sir.

The Secretary of Agriculture:

You could not go south of

you in that case?


W wouldn't want to.

The Secretary of Agriculture:
Mr. Schneider:

Uor west?

W wouldn't want to.

The Secretary of Agriculture:

I just want to call attention

to that.
Mr. Schneider:

In addition to being in the banking busi-

ness I am in the farm loan business, in fact I was in that
business 10 years before X went in the banking business, and
I make loans all over northwest Missouri, northeast Kansas,
southwest Nebraska and southwest Iowa,
The Secretary of the Treasury:

Mr* Schneider, in order to

concede the request that you make there i t would be neoessary
to attach to the Chicago district

the northern strip of

Missouri, because you could not attach one city in northern
Missouri without carrying
Mr. Schneider:

that territory with it?

That ie what we suggest here, to attach

everything north of the Hannibal & St. Joe Railroad.


6.. So line id er.

The Secretary of the Treasury:

How many counties are in-

cluded in that area?

i don't believe I could t e l l you that.

The Secretary of the Treasury: How wide a strip would you
say that was?
Mr, Schneider:

j couldn't say, but there are 147 banking

towns in that territory•
The Secretary of the Treasury: What i s the distance from
St, Joe to the north line of Missouri?
M* Schneider:

Ify geography Is at fault, Mr,Secretary;

I do not believe I can t e l l you.
The Secretary of the Treasury:

How far are you from Kansas

Mr, Schneider:

About 60 miles by air line.

The Secretary of the Treasury;

Considering the function

which this re&&Tve bank has to exercise, that i s , holding
the reserves of the banks within i t s district, rediscount ing
for member banks, but not necessarily interfering with the
ordinary transactions between banks themselves, how far do
you consider it of vital importance that St. Joe should be
attached to Chicago against Kansas City, considering the
function which this reserve bank has to perform?


J. & Schneider.

Chicago,- and

i think we can get the same f a c i l i t i e s i n

our big jobbing trade in St. joaeph demands

Chicago exchange * W do not hUve c a l l for any Kansas City

Our c a l l i s for Chicagodrafts.

The Secretary of the Treasury:

On that point exactly, there

w i l l be a parr ing of exchange between these reserve banks*
Ur, Schneider:


The Secretary of the Treasury: How in that aspect of the
case Kansas City exchange, if it were a reserve bank, vrould
pass current the same as Chicago exchange?
Mr. Schneider: Yes, sir; but the fundamental purpose is to
have that redeemed as quickly as possible, so why not let
it flow naturally toward


The Secretary of the Treasury: You are speaking of currencyMr* Schneider: Yes, sirj and exchange too. What is the use
of drawing on Kansas City if the money has to go to Chicago?
What 1 am speaking of is that our jobbers in St. Joseph want
Chicago exchange 100 times where they want Kansas City exchaige once.
The Secretary of the Treasury: Taking the next step which
confronts us here, a system of check clearances instead of


J. <*• Schneider,

heck collections, as the bill contemplates, so that the
ethods now existing may be very considerably reformed, how
ar do you think it would make any difference whether you
ere attached to Kansas City or Chicago?
Mr* Schneider:

Just this, Mr. Secretary*

If you are going

to pay a bill in Chicago is it not much easier, is it not
in accordance with the spirit and intent of this law, to
'draw on Chicago than to draw on Kansas City?

Chicago is our

natural place. 75 per cent of our business flows there. We
have very little business in Kansas City or southwest of
Kansas City*
The arguments of every one of these men from Kansas,
Oklahoma and south and west of Kansas City are an argument
in favor of our being in the Chicago district*
The Secretary of the Treasury: Are you able to say what
the sentiment

of the 147 banks north of the Eaxaibal

& St.

Joe Railroad is with respect to Chicago and Kansas City?
Mr. Schneider:

Bo; but 1 think I am safe in saying the

bank* in the northwest corner of the state and the southwest
corner of Iowa aod the southeast corner of Nebraska would
rather be attached to Chicago than Kansas City, because that
is not Kansas City territory*

south and west of Kansas City



is the Kansas City territory*

All the arguments given here

today are to that effect.
The Secretary of the Treasury: Assuming you are not attache
to the Chicago district and assuming again a district is
situated there, what would be your second choice?
Ur. Schneider:

I haven 1 1 any second choice. The reasons

seem so preponderating in favor of Chicago that I cannot
imagine any other place being a natural place for me.
The Secretary of the Treasury:

X thought you might say

St« See*
Mr, Schneider: Well, yes,, if you will encourage me a little
bit I will.
The Secretary of the Treasury;

Seriously, though, if

you would not be attached to Chicago what would be your
secoixl choice?
Mr •Schneider:

There must be some other place,
i don't believe I would have any second

The Secretary of the Treasury:

Would it be St. Louis as

against Kansas City?

I don't think there is much difference

between St* Louis and Kansas City* St. Louis Is south of
Kansas City, Heither one of them is the logical place for us.


<* &• Schneider*

Kansas City i s e n t i t l e d to a l l south and west, but when she
goes up in our

territory she remift&s me of the Sweded who saic

he could l i c k everybody in the county, and after he had been

said "I think I took in too much territory•*

I think Kansas c i t y i s taking in too much.
not to be asked to come t h i s way.

I think we ought

Our treed i s toward


The Secretary of Agriculture: Where would you draw the
line between Kansas city and St. Joe?
Mr,Schneider: Well, draw it right north of Atohison,
The Secretary of the Treasury: H O W much of the north
Kansas territory do you think should be attached to the
Chicago diatrict under those circumstances?
Mr. Schneider: Everything south of a line running parallel
with the southern line of Buchanan county, which is the county
St. Joseph is in.
The Secretary of Agriculture: Would it then divide the
Mr, Schneider:

Yes; I should think that red l i n e on the

map should be brought down*
Tfee Secretary of the Treasury:

And put as much into Kansas

as has been carried into Nebraska?

J. G* Schneider.

to. Schneider:

Ko; 1 think you would want to leasre to Kansas

City everything that is cirectly west of Kansas City and
everything that is south of Kansas City.

Take west and south,

but I do not think that Kansas Gity ought to come north and

That naturally flows to Chicago, as Mr* jjeal himself

told you*

If they cannot get it in Kansas City, rather than

go to St. Louis they will go to Chicago*

That clinches my

The Secretary of the Treasury: Omaha, of course, is an
applicant for one of these banks?
Mr. Schneider: Tee*
The Secretary of the Treasury: Assume that Omaha was made
one of the banks, would your relations be at all with Omaha?

That is such an improbable thing that I

never have speculated on it.
The Secretary of the Treasury: Tou do not know what is
probable or improbable as far as this Committee is concerned*
Mr. Schneider:

No; but sometimes I can make a pretty good

The Secretary of the Treasury:

You have no particular re-

lations with Omaha?


Ae I say, 75 per cant of our business


i s with Chicago.
The Seoretary of the Treasury:

Where do you do the r e -

maining 35 per cent?
Mr. Schneider:

New Toxk, St. Louis, Kansas City, omaha

and Denver.
The Secretary of t h e Treasury:


what percentages?

Take Kansas c i t y , St. Louis and New York.

I would not attempt t o divide up that 25

per c e n t , Mr,Secretary, because, as I say, the only thing
t h a t I s e e i s Chicago.
The Secretary of the Treasury:

That i s a l l .

The Secretary of Agriculture:

Give your name to the Re-

Mr. Quinoy:

Txed H. Quinoy.

The Secretary of Agrioultuxe:
Mr. Quinoy:

What do you representt

I represent the Chamber of Commerce o f

S a l i n a , Kansas, and through them the bankers of t h a t t e r r i tory.
The Secretary of Agriculture:
t o speak f o r them?

You are delegated toy them


Fred H* Quincy.

Kc. Quincy;

Yes, sir; by the Chamber of Commerce at a

meeting called at the request of the bankers*
The Secretary of Agriculture: How many banks are there

In Salina we have 30,000 people, four banks,

two national and two

state. We have between 50 and 75 ,

country banks that keep balances there. Speaking for
the banks, we favor Kansas City for this regional bank for
the reason that it is the natural place for us to do business*

That is where we do business now,

From the standpoint

of a state banker, and representing a bank that is eligible,
the bank that 1 represent would not feel disposed to join
the Association if we had to go to Denver or St. Louis. We
prefer Kansas City*
The Secretary of Agriculture;
Mr, Quincy:

Would your bank be eligible?

Tea, sir; our bank has $100,000*00 capital.

Speaking from the standpoint of the Commercial Club, or the
Chamber of Commerce, they passed resolutions which 1 have
here and will file with the Committee and will not take the
time to read them*
The Secretary of Agriculture:

That is to the same effect?

Yes, sir; they express a preference for Kansas

Fred H Quinoy.

City and have no second choice.
The Secretary of the Treasury:

Thank you.

How l e t us have

Muskegee, please*
I might say that any additional data of a s t a t i s t i c a l
nature which you d e s i r e to f i l e on behalf of Kansas city
may be mailed to the Committee

and w i l l , of course, receive

f u l l consideration at the proper time*

W do not, as a

r u l e , take testimony i n extenso on s t a t i s t i c a l matter, because
i t i s impossible to carry s t a t i s t i c s i n your head, but we do
l i k e to have those matters on f i l e so i n rendering the dec i s i o n the Committee may have the s t a t i s t i c s before i t ,
aid we e s p e c i a l l y want the maps because those diagrammatical
and s t a t i s t i c a l maps are very helpful,
Mr. Goebel:

May I now give 33 resolutions from various

Kansas clearing houses and various organizations into the
The Secretary of the Treasury:

They may be f i l e d .

6TJS1 E E T O Ju. J * ffJHCAN.

The Secretary of Agriculture: Give your name and
occupation to the Reporter.


S* W, Duncan,


L. W. Duncan, Kuskogee.

i appeared in St.

I do not know as 1 have anything additional to say*

I t was only in response to a telegram from Washington that
I cane; they wired

i f I would represent them here.


did not know 1 would appear i n St. Louis at a l l .
The Secretary of Agriculture:

Just for t h i s record, will

you state do you represent the Clearing House?

yes* s i r .

^5Phe Seoretaxy of the Treasury: We have h i s testimony in
St. Louis,

X was t o be present at both hearings, and

really I think i t i s immaterial to the Muskogee Clearing
House which c i t y i s selected*
the district*

W are more interested in

Kansas City would be agreeable t o Muskogee,

The Secretary of Agriculture:

You do not want to go south,

was your main point?

So, air; we don't want to go south.

The Secretary of the Treasury: Let this telegram go in the
record there.
•Tulsa, Okla., Jan. 33, 1914.
«Iilliam Hut t i g ,
Preat. Hat'l Bank of Republic, K. 0. Ho,

L» W. Duncan.

•We are very strongly in favor of Kansas City as the location
for a reserve bank. Our balances In your city are ten times
greater than our balances in St. Louis and our business is in
your favor at a ratio of about six to feae. If you see fit
you may use this telegram in clearing up our position with
the Committee. Our Mr. Leonard went to St. Louis without
instructions. We expected him to obtain information as to
relative merits of St. Louis from the Committee viewpoint and
report back to us. We note by press reports that he favored
St. Louis as the location.this is not our position in the
matter. As he acted without instructions we feel that he
has not committed the bank in regard to the matter.

•Exchange HatT l Bank,
"By P* J, White, President.*




The Secretary of The Treasury:

Give.your name and

Mr, Moses: E. R. Moses, Gread Band, Kansas*.
The Seoretary of The Treasury: What do you represent?

I represent

a national Bank and two State

The Secretary of The Treasury:, And you desire to toe
attached to the Kansas City district?
Mr. Moses: Yes,sir.
The Secretaryof the Treasury:

You have no second ohoioe?

Mr. Moses: None whatever; We do not do business in St.

We pulled out of there nearly two years ago* Our

business is only with New York and Kansas City*.
The Secretary of JRferioulture:


per cent is with

Kansas City?
Mr. Moses:

80 per cent.

In regard to the mercantile business, I put out over
twelve hundred thousand dollars worth of farming implements
and machinery and 90 per cent came from Kansas City, and
in various other lines I think fully 90 per cent came through
Kansas City*


The Secretary of The Treasury:

Give;: your name and

Mr. Dwyer: T. H. Dwyer, President Chase Hill National
Bank. Our interests are with Kansas City, Mr, Secretary*
The Secretary of The Treasury: What do you represent?
Hr. Dwyer:

I represent the Oklahoma bankers*

X am a

member of the State Executive Committee of the Oklahoma
Bankers Association and attended the meeting the other day
and was ordered to come here and report on this proposition*
The Seoretaryof The Treasury: We have heard from your
Association already?
Mr. Dwyer: Yes,
The Secretaryof The Treasury:

You confirm all that has

been said by your associates?
Mr. Dwyer: Yes,sir. I want

to confirm this much more

and will not take your time; I know you are short of time.
We would like Kansas City to have a Regional Bank. If they
cannot have one we want them to have a branch bank, and also
Oklahoma City to have one.
The Secretary of Thaa Treasury:

And your second choice

would be St.Louis if you did not have a batik at Kansas City?



T. H. Dwyer,

Mr. Dwyeri

That is it exactly^ and 80 per oent of our

business oomes through Kansas City.

Mr. Sawyer: State Bank Commissioner of Kansas.
The Seoretary of The Treasury: Mr. Sawyer, let us have
your views on this problem.
Mr. Sawyer: I think you have been furnished with statistioal information with regard to banks of Kansas. We have
930 State Banks in the state, of which number 181 are eligibl
to beoome members of this association, and of the 930 I presume 900 of them have account in Kansas City* This is the
natural clearing house for Kansas*
The Seoretary of The Treasury: Have you made a ruling as
to whether the Kansas banks that are eligible may subscribe
to stock in the banks?
Mr. Sawyer: We have a provision in the law against banks
investing in the stooks of other banks and corporations, but
our attorney general has held they can made a distinction.
The Secretary of The Treasury: On this particular matter?
Mr. Sawyer: Yes,sir.


T. H. Dwyer.

The Secretary of The Treasury:
this is not an ordinary stock,
Mr, Sawyer:

That is on the theory
but a national system?


The Seoretary of Agriculture:

I would like to ask what

you think about the suggestion that the northern strip of
Kansas should go to Chicago?
Mr..Sawyer: Well, I believe that 80 per cent of the
business comes to Kansas City now, but as between Chicago
and St•Louis

I presume the greater part of it would go

to Chicago•
The Secretary of Agriculture: That northern strip?
Mr. Sawyer: Yes.
The Secretaryof The Treasury: Do you think that the
ordinary course of its exchange and business transactions
in that northern strip is more with Chicago than with
Kansas City, or the rererse?
Mr. Sawyer: No; as between St•Louis and Chioago I
think probably the greater per cent is Chicago, but I
think 80 per cent is Kansas City.
The Secretary of Agriculture: Kansas is pretty solid
for Kansas City.
Mr. Sawyer: fell, it is the natural olearing house for


all our products and all our exchanges.
The Secretary of The Treasury: You heard the remarks
of Mr; Sohneider, the representative of St;Joei & moment
ago* in which he was suggesting that the northern part of
Missouri might be attached to the Chioago district, and he
thought the northern part of Kansas might likewise go

Do you feel that any part of Kansas should "be

attaohed to the Chioago District?
Mr". Sawyer: I dont think BO, Mr. Secretary; because
of the mail facilities and the transportation facilities
and proximity to Kansas City;


The Seoretary of The Treasury:

Governor, we should be

very glad to have you give us any information you can on
this subjeot;
Mr. Hodges: It has been suggested that the Kansas laws
would not permit our state banks to participate in this
Regional Bank'. I feel warranted in giving you gentlemen
the assuranoe that If there is a delinquency that the suooeeding or the ooming legislature will remedy it'.

Governor Hodges.

My distinguished predecessor emphasized the fact that
Kansas City#Mis&ouri, was made up of Kansass. I believe
that three-fourths of the great industries of this city are
managed, ortheir directors or stockholders are Kan sans. T<e
are vitally interested in this. The establishment of this
bank in Kansas City, Missouri, means perhaps more to Kansas
than to any ofher of these states ^
Our state is yet in its Infancy, and if you will pardon
me, last year was the worst drouth we have had in the history
of this state In 45 years, and yet our normal increase in
agriculture and live stock was two hundred and forty-two
millions of dollars,and these bankers have stated to you
that the big end of that is cleared through Kansas City*
If a bank loans money it wants the best assets


The assets of these great banks that you intend establishing,
and I hope therewill be twelve instead of eight, is the asset
of one hundred million peoples In Kansas we have about
three billion dollars worth of property upon our tax rolls.
That gives us $1,750.00 each for every man woman and child
in Kansas. We have about two hundred and ten million dollars
on deposit in our banks. That gives us about $135 each
circulating medium or currency•

Tkese things are apparent

Governor Hodges*

when we know that the average wealth throughout the United
States ia $1300 per capital and the average credit or ciroulating medium is about $35. And so Kansas will give you,
when we borrow money through you the best assets in the
United States by 50 per cent in one instance and 300 per
cent in the other.
The natural commercial gravitation of the middle west
is towards Kansas City, and these two great cities arenfche
port, the established port. Our state is 50 years old. $e
are yet in our infancy.
You are establishing these banks and this bank perhaps
will be here a hundred years from now. You cannot foretell
what Kansasw«Ll be in a hundred years. Judging by the past well, you cannot judgethe future.
We hope this bank will be established on the Kansas side
of the line.

I would not be a Kansan

if I did not hope for

that, but if it is not, then we waat to join these good
friends over in Missouri, because three-fourths of them are
Kansans, and establish it on this side of the line.
The Secretary of Agriculture: Governor, may I ask you
a question?
Mr. Hodges: Certainly;

Governor Hodges*

The Seoretary of Agriculture:

I should be glad to know

why you suggest twelve instead of eight?
Mr. Hogges: If one is a good thing, twelve is just
twelve times as good*
The Secretary of Agriculture:

Could you proceed with that

up to 25,000?
Mr* Hodges: #oj

th^e mist be a sensible line of demarkati<in

And l*t me suggest just one more thing, Mr- Secretary#


expect to establish your banks where you have your greatest
commerce, your greatest activity*

If you establish eight

banks, then why should we get away from Kansas City when
Kansas City clearings are only sixth in the United States»
If this as a commercial center ranks sixth and you establish
eight banks is not that conclusive evidence you should have
one of those banks here*
The Secretary of The Treasury:
clearings,, gentlemen*

There is one thing about

Under our present system there is a

good deal of artificiality about the clearings of the
different cities* They are not always indicative of the
true standing of those cities. A short time ago we took
evidence in Hew ,England, and among other things the City
of Albany came under view** It was testified that^were two



Governor Hodges,

billion bank clearings in a year in Albany. On the face
city of
of it it would look like a/tremendous trade importance, but
the truth is Albany holds out great inducements to other
banks to keep reserve balances there, not only in interest
allowance, but in free check collections, and those banks
all testified their balances were absorbed by these advantages held out, which were purely artificial* And the
same thing is true as to other cities, and I would not want
you to base your argument too strongly on that,
Mr. Hodges;

Then we can congratulate ourselves as there

has been no evidence eet forth today that the bank clearings
in Kansas City have been padded along the same line*
The Secretary of The Treasury: We have not gone into that
Mr* Hodges:

I might add

one thing-

They spoke about

the Joplin districts We have a Pittsburg district down
here, a sort of a thumb on the hand of commerce, and last
year the output was |740,000,000.00, 17,000,000.00 more than
the gold output of the United States, including Alaska, and
our good farmers1 wifes sold $83,000,000.00 this year of
butter, eggs and poultry alone. That is $7,000,000.00 more
than the Government paid intfce Louisiana Purchase, about a


Governor Hodges,

third of the acreage of the United States. So personally
we hope you will see fit to establish this bank here, because it means more to our state than to the others*
The Secretary of The Treasury: Thank you, Governor.

The Secretary of Agriculture: Will you give your name
and occupation*
Mr. McCullough: G. R. McCullough, President of the
Tulsa Clearing House and President of the First National
The Secretary of Agriculture: What do you represent?
Mr. MoCullogh: I represent the Tulsa Clearing House.
The Secretary of Agriculture: How many banks in that?
Mr. MoCullough: Eight banks.
The Seoretary of Agriculture: State or National?
Mr. MoCullough: Six Hational and two Astate«
The secretary of Agriculture: Did they request you to
speak for them?
Mr. MoCullough: They did*
The Seoretary of Agriculture: Will you tell us what


George £• HoCullough.

your method is?
The Secretary of The Treasury: Have you any resolutions
from them?
Mr# McCullough:

The Association passed resolutions favorink

Kansas City as a location for a Regional Bank and it was submitted here*

We are in favor of Kansas City as the location

for a Regional Bank, first, because it is onr natural banking
center and d e a r ing center*
We have a population of more than 30,000 people, eight
banks, with deposits of nine and a half million dollars, and
initial clearings of more than sixty million.
the heart of the Mid-Continent Oil and

We are in

Gaa field, of which

during the past year the total average production of oil was
325,000 barrels per day, and more than $6$,000,000.00 of oil
was marketed last year*

We speak of this merely to show that

our request should be considered along with the others.
The Secretary of/Treasury: What would be your second
choice If you did not have a reserve bank here ~- headquartetjs
Mr* MoCullough:

Our seoond choice would be St.Louis naturally«

The Secretary of Agriculture:
eeotion a oattle section?

To what extent is your



George R. McCullouglu

Mi*. McCullough: Well, not so extensively as it used to

The range has been out up and it has hampered the

cattle trade*
would indicate —

Now, our balances, as the telegram read
I think I am safe in saying that 75 per

cent of our bank balances are carried in Kansas City banks.
tfe have

four accounts, I believe, and I think every bank

in Tulsa carries from three to five Kansas City accounts.
Our business is here*
The Secretary of Agriculture: Where is the larger share
of the

contact of your business men?

Have you anything

bearing on that?
Mr. MoCullough: Ho; I have not, but it is largely with
Kansas City#
The Seoretary of Agriculture: Thank you#





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

What do you r e p r e s e n t ,

Mr. Well e?

£hey j u s t o a i l e d me; I was here.

I am i n t h e

banking b u s i n e s s a t p l a t t e C i t y , about h a l f way between
here and S t . Joseph, t h e Wells Banking Company.
The S e c r e t a r y of t h e Treasury:

X suppose you want t o t a l k

about t h e p l a c e northern Missouri should be p u t .

Only t h e p o r t i o n of i t i n which 1 r e s i d e , P l a t t e

The S e c r e t a r y o f t h e Treasury:
Mr.Well a:

Where i s P l a t t e City e x a c t l y

That i s almost on an a i r l i n e about h a l f way

between here and S t . J o s e p h , t h e county s e a t of P l a t t e county;
i t l i e s on the r i v e r .
The Secretary of the Treasury:

To which place would you wan

to be attached?

Our business i s almost altogether in Kansas City.

The Secretary of Agriculture:

I should think that would be


Yes, s i r ; I do not see why they called on me at

The Secretary of the Treasury:

Here are some telegrams that

siay be f i l e d and sent t o Washington.


a S


The Seorfctaay of the Treasury: Mr. Goebel, I would like to
ask you a few questions. This district, as you have outlined
it, making Kansas city the reserve bank, 1 should like to
get some idea as to the extent of the season of maximum demand when Kansas City banks hare to re-discount or borrow from
other banks.
Mr. Goebel: When the Kansas City banks borrow from other
The Secretary of the Treasury:

Yes; what was the extreme

borrowing of the Kansas City banks this last f a l l , for instance, to take care of the situation?
Mr. Goebel:

X would say that we re-discounted

or sold

paper to the amount of probably ten to fifteen million
dollars - t e n to twelve million dollars.
The Secretary of Agriculture:

Over what period?

Mr. Goebel: Well, for about 60 days.
The Secretary of the Treasury:

That i s the period of

maximum demand?
Mr. Goebel:


The Secretary of the Treasury: And do you think that that
was necessitated by the demands of approximately the district
that you have outlined hers?


n 3

, Goebel.

lir. Goebel; Yes*

Of course that was simply the surplus

demanded from that district.
morning, about

W carry, as I told you this

twenty-six million

right now, and that paper

that we sold simply represented the surplus demand.
The Secretary of the Treasury: How far i s such a district
a s you have outlined capable of taking care of itself without
borrowing from other districts?
Mr* Goebel: As X said this morning, Mr,Secretary, the
district I have outlined would practically carry i t s e l f the
year around unless, as Z stated, we should have an extraordinarily large crop of wheat that i t would take quite a
long time to finance between threshing machine and mill, or
an extraordinarily large cxdp of corn which would make a great
demand for feeding stock, or a failure of the corn crop, as
we had this year, necessitating the purchase of corn from
other districts and shipping in here.
The Secretary of the Treasury:

Now assuming St* joe was

eliminated from this d i s t r i c t and the boundaries of the
district were considerably reduced in other directions, taking
Ft* forth and Dallas out -

I am only speaking now of debatabl

territory. Suppose you took out a l l the debatable territory,
would you then have a district whioh would be sufficiently


n 4

P. W Goebel,

self-contained and with resources adequate to take care of
Mr. Goebel: Yes; except as 1 say, an abnormal demand.
The Secretary of the Treasury:

Of course, one of the object

of the Act is to take care of abrnorrnal demands.
Mr* Goebel: This district under ordinary conditions would
have sufficient to take care of itself.
The Secretary of the Treasury: Under

conditions of merely

a normal crop do you think it would take care of itself?
Mr. Goebel: Yes, sir; I do.
The Secretary of the Treasury:

Kansas City, in other words,

generally has a surplus of capital for lending purposes?
Mr. (joebel: Yes, sir*
The Secretary of the Treasury:

If you left Denver out also

would that be true?
Mr. Goebel:

Yes, sir; leaving out a l l debatable terri-

tory i t i s m judgment, baaed upon 30 years1 experience in
banking in the immediate Kansas city territory, there would
only have to be a call from this regional reserve bank on any
other reserve bank in case of special occurrences*

I hope

that every onoe in a whjye we would have to call on some other

bank to move an enormous crop.


P. W# Goebel.

The Secretary of the Treasury: That would be a very good
and a very heppy reason for doing it*
Mr, Goet>el: Yes, sir. I want to make a statement in regard to the clearings of the Kansas City banks, and I want to
nake it officially as president of the Clearing House Association, that our clearing house balances are paid every day*
There is no padding In the clearings* Our clearings are large
because, as I stated to you this morning, our capital and our
banking resources are obvious because there is a great
initial point here of the products coming ia that are bought
and sold and later on, after they are sorted, resold again,
which makes it a very active proposition.
The Secretary of t he Treasury:

Is there anything more

you care to add, K r* Goebel?
lir, Goebel: Only this, that I am, as I told you, president
of the Commercial Rational Bank of Kansas City, Kansas, and,
therefore, a Kansas banker, and out of the over eleven hundred
Kansas bankers Z do not think you could get three bankers
that would say to divide Kansas. They would all insist on
coming to Kansas City and they have no second choice.
The Secretary of the Treasury: That is the population of
Kansas City, Kansas, and Kansas City, Missouri?


P. W. Goebel.

Mr. Goebel:

About 360,000 in Kansas City, Missouri, and

about 90,000 in Kansas City, Kansas; 88,000 at the last

I am quoting census figures of four years ago.

The Secretary of the Treasury:

Probably twice that large

Mr, Goebel:


The Secretary of Agriculture:

What separates them except th

state line?
Mr. Goebel:

Hothing except paved stfceets between them*

The Secretary of Agriculture:
Mr* Goebel:

And policemen?

Yes, s i r ; and they have

saloons on this side

of the line and i t i s dry on the other side of the line, but
i t i s only a nickel carfare*
The Seoretary

of Agriculture:

Which has the more liquid

Mr. Goebel:

Kansas City, Missouri.

The Seoretary of the Treasury;

Will you kindly give your

nave and occupation?

W. F* Raskin, First national Bank of Tarkio*

a 7


V. F. Rankin,

The Secretary of Agriculture: How far axe you from Kansas
Mr. Rankin: About 133 miles. We are right in the northvest corner of Missouri,
The Secretary of Agriculture:

i do not see it on this map.

Mr. Eankin: That single dot up there.
The Secretary of Agriculture: Right in the extreme corner?
Mr. Rankin:

Tee, sir; about 165 miles north of St. Joe

ind about 75 miles south of Omaha.
The Secretary of Agriculture: What is the population1?
Mr. Rankin: About 2500.
The Secretary of Agriculture: And you want to speak for
those interests as a whole, do you?
Mr.Rankin: Yes, sir; I want to speak for the farming interests and for the feeding interests. We figure it would be
an advantage to have a regional bank in Kansas City for the

It takes a vast amount of money to feed the oattle

and the hogs that are fed

through this part of the country.

Take the state of Kansas and the south half of Nebraska and
the western half of Missouri, that all has to be handled
the banks.

The farming community does not earn money

enough to handle the cattle. They have the money in the far a,

n 8

*• y. Raskin,

but have to borrow this aon»y, and t he closer they can get
in touch with these people here we think the better.
The Secretary of Agriculture: You buy your stuff here?
Mr. Rankin: We buy it in the three river markets, Omaha,
Kansas City and St. joe; principally in Kansas City.
The Secretary of Agriculture: And where do you ship?
Mr, Rankin:. fell, our cattle go to Chicago and our hogs
to St. joe and Kansas City.
The Secretary of Agriculture: How would your product be

in value?

Mr.Rankin: Veil, Z suppose about half of it to St. joe and
Kansas City and about half to Chicago.

We are in Chicago

territory other than Kansas City territory, our relations
are all with Chicago, that is, praotically so, outside of the
river markets, and we do about, j should say, 75 per cent of
our business with St. Jfoe and Kansas City.
The Secretary of Agriculture: You feel, in sjs>te of the
fact that you send about half of your product to Chicago, that
you ought to be in this district?
Mr,Rankin: Yes* sir; because we buy all of our stuff in
either St. Joe or Kansas City. That is the buying place;
that la where we want to float the paper that we have to


f. F. Raskin.

The Secretary of Agriculture:

What would be your second



The Secretary of the Treasury:

pid you say Kansas City

Mr. Rankin: Yes, sir.
The Secretary of Agriculture:

What would be your opinion,

Mr,Rankin, with reference to that entire northern strip of

i think it would all be Kansas City. After

you get east of us a ways it would divide between Kansas Citj
and St. Louis.
The Secretary of Agriculture: Chicago drew a line from
the eastern to the western boundary there and inoluded that
whole strip of Missouri in Chicago.
Mr.Rankin: Well, I think they would properly take about
the north quarter.
The Secretary of Agriculture:

The north central quarter?

Mr. Rankin: Tea.
The Secretary of Agriculture:
the northwestern corner

But you are clear that

should come to Kansas City?

W F, Rankin,



Their first choice would be 8t, Soseph,

because they are a l i t t l e nearer St. Joseph, teut that i s
not possible, so they feel that Kansas c i t y i * the next point.
W handle a good many cattle ourselves. W feed about 10,000
cattle a year.
The Secretary of Agriculture:

Tou know you might s t i l l

continue your present relations, and would continue your present relations with your present banks?
Mr. Rankin: Veil, i t i s a good deal easier to know these
fellows than to know the fellows farther away*
The Secretary of Agriculture:

But you would not deal

with the regional bank,
Mr, Rankin: He would have^to pass on i t .
The Secretary of Agriculture:

He would have to pass on

the banks, perhaps,
lir, Rankin; Well, the closer they are to the party that
wants the money, the closer they are to the people that
are producing i t , the better they know the security.
The Secretary of Agriculture:

1 3ust want to eisphasise the

fact that you will s t i l l be dealing with your same bankers
Mr. Raskin:

tesj but i t i s quite true *fcen you get a teUoi

-. i

W. F. Rankin,

too big he don't know you so well, the l i t t l e fellow. He
knows these Kansas City fellows.
The Secretary of Agriculture:

He probably would know you,

judging from what I hear,

Well, but he might not some of the others.

The Secretary of Agriculture:

Thank you very much.

The Secretary of the Treasury:

Kiadly state your name and

Mr. Dings:

p* C. Dings*

Z am with the Guarantee State

Bank, Axdmora, Oklahoma, but hare been appointeduas a committjee
representing the southern part of the state for the Oklahoma
Bankers1 Association, we being located 35 miles from the
Texas l i n e and in purely a cotton country, yet we want the
Committee to understand that we want the state kept intact
and do not want to go to the south*
The Secretary of the Treasury:

Where do you want to got

16\ Dings: We waxft to come to Kansas c i t y first> last and
a l l the time*
The Secretary of the Treasury:

What i s your second choice'

Mr. Dings: Xhe second choice would be t h i s :

since coming


P. C* Dings*

here today I learn that a branch bank has all the privileges
and powers and accommodations for us that a regional bank

T^at being true, my second choice would be a branch

bank at Oklahoma City*
The Secretary of Agriculture: In that case would you care
where the regional bank was?
Mr* Dings: Well, all of our business is with Kansas City*
The Secretary of Agriculture:


The Secretary asked

what your second choice would be for the regional bank*
The Secretary of the Treasury:

If you did not have it at

Kansas City where would you then prefer to have it?
Mr* Dings: As I say, it does not make any difference to
us as long as we have a branch bank in our own state*
The Secretary of Agriculture: You are pretty near Ft*
Worth and Dallas. You do not want to be connected with a
bank at any place in Texas?
Mr* Dings: I am afraid that neither Ft* Worth nor Dallas
will get a regional bank, hence we wou&have to go farther
south to Sew Orleans*
The Secretary of Agriculture:

Suppose one were at Dallas*

Mr*Dings: That would be our second, choice*
The Secretary of the Treasury:

It would be?

P. C. Dings.

Mr. Dinge: Yes, sir, from the fact that three months in
the year there i s the cotton season and 60 per cent of
our business goes south of Ft. Worth, Dallas or Houston.
The Secretary of Agriculture:

Do you get advances from

their discounts?
Mr. Dings: W do not borrow any money there, only on b i l l s
of exchange.

W borrow our money in Kansas City and Slew York.

The Secretary of Agriculture:

Do you think i t would be

possible to create a district with a bank somewhere in Texas
as the center that would self-sufficient inrjsofrmal times?

I believe that

The Secretary of Agriculture:

Or do you think i t better

to attaoh such territory to one that i s normally a lending
Mr. Dings: W would like to see in southern Oklahoma, i f
there i s going to be a bank in the South, that i t be in Texas,
and take Hew Mexico from Kansas City.
by losing that.

They won't lose much

And then not have one at New Orleans.

The Scoretary of Agriculture:

Tou would prefer Texas to

New Orleans?
Mr. Dings: Yes, s i r ; by a l l means.
The Secretary of Agriculture: But your f i r s t choice i s


Pa C. Dings*

Kansas City?
Mr* Dings:

Yes, sir*

The Secretary of the Treasury:

The Committee is on the

point now of adjourning, and before doing so if there is any
one here who has not been heard who desires to be heard and
is prepared to present any new facts, the Committee will hear
them briefly, but we should like to have new facts aai not
to cover ground that has already been discussed.
Is there any one, under those circumstances, who car&s
to present himselft

Si not, the hearing will be closed*

The Committee will now aljoura*
Before adjouuuaent let me say for the Committee that
it must not be inferred, as X said before, that the questions
the Committee has asked of the witnesses in the slightest
degree indicate any opinion on the part of the Committee*
The Committee will form no opinion on any of these matters
until the testimony has been taken from the entire country,
so that the relation of the entire country to all of the
districts can be seen and the general problem can be considered.

Whereupon at 4:50 P. M*, on the 23d day of
January, 1914, the Committee adjourned to meet at



Lincoln, Nerbaska, on the 34th day of January,
1914, at 10 01 Clock A. H.