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STENOGRAPHER'S MINUTES

THE RESERVE BANK
ORGANIZATION COLIMITTEE.

"FEDERAL RESERVE DISTRICT DIVISIONS AND LOCATION
OF FEDERAL RESERVE BANES AND HEAD OFFICES."




Portland,

Ore.

Tamiary 30,

1914.

Law Reporting Company, Official Stenographers
115 BROADWAY,— NEW YORK
TELEPHONE. 282O RECTOR

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2672

• 1,; « January 30th, 1914.

Hot pursuant to adjourrmait at 10:00 A. Mm - . <

THFl STZ!KETA.rY 0 ^ r iH7 TRTASUFY.
THF; S^:P..TTTA5Y or- AG.RTJUI.TUJT:

AVVTABA O 1 ^:

.

A^ L. r i l L S , p r e s i d e s t , P i r s t ' atio.-;al Bank, P o r t l a n d ,
Oregon.
H0>. OSrTALD "VJ5ST, Governor of Oregon.
"7. E. 0OJ'IA:;, pr-esideijt,

0" thv/csterri H I e c t r i e C o . ,

P o ^ t l a . i d , Oregon.
? . S. lnnrP.S, P o s t m a s t e r , P o r t l a n d , Orero^.
V, E. VATTITa-., p r e s i d e n t , Jackson 3ou. ty Ban k ,
Medford,

Oregon.

5» V, CARTER^ P r e s i d e n t , United S t a t e s ' a t i o - . a l
Bank, A s h l a n d , O' r egor #
C. C. OOLT, p r e s i d e n t , Ur:ion ^ r eat Joinpa,:^,
P o r t l a n d , Oreeon.
T. J. j-iAHO^'EY, C a s h i - r , P i r s t ^ ' a t i o ^ a l Bank,
Heppner, Oregon.




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2673
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ME. 8--TV33L13Y. H i v e S :ock) > o r t h Y a k i m ,
^

>!. B-. SPOOKS, of

Golden d a l e , "/"ash.

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'ash.

^ i .j-,

\ 5* Brooks '•: Co., p r i v a t e Backers t
*"*

*li**»«!-i*-4«/r/i$ JO A

?

.,-.;:•>- 0^ S. L0VKLVO-, Exa:.ii::er, Po--tla.::d Cleaning House
As 90 c i a t io:-i, E x - S t a t e 5a-ik rxai.ii.er of Idaho, a d
N a t i o n a l I^aiik Exa i n e r .

URI?^

~'£'&:ii,

7, D. "".'H.Ti"X7.P'Tr-HT, p r e s i d e n t , p a c i f i c TTxpo-'t luzaber
C o . , po:*tla id , Oregon.
A. C. DTXOlv, Booth-Kelly Lumber Oonipa y, "Eugene, Ore.
31. ]?. JOKVSOtf, P r e s i d e n t of t h e J o n r i s r c i a l Oluo,
E o i s e , Tclaho.
I1* H. PAPvSO-S, C a s h i e r , P a c i f i c ^ a t i o ^ a l Bank,
B o i s o , Tdaho.
7. L. THOITSO:-, p - ' e s i d e n t , Ainericaii ' a c i o ; a l 3a ik,
P e n d l e t o . i , O-ego::.
7 # J". BU.^'S, of 5a If our, Guthrie c J o . , E x p o ' t e r s ,
c
P o r t i a id, p"'efTor..
?I. H. KOUSEIi, 7lie---t .Exporter, Po:-tla^d, Ore.
•7. G. SHUHAM, Casliier., P i r s t ' a t i o ^ a l Bar.k,
« a i t s b u r g , 7a siu
T
J.. Smith, .?'anager f i : a r s h a l l - 7 e l l s Hard'-vare Co. ,
P o -.-• t l a -id, Or ego a •



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J . D. A'JKMY. A s s i s t a n t C&shier, J i ^ s t • a t i o n a l Ba.ik,

T a l l a T a l l a , W"afh- _
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..-.•, K, W ^rTTCKFXL, p r e s i d e n t , : " i t c h e l l - l e r / i s C o . ,
o
( A g r i c u l t u r a l TmplGments) Po"'tla;id, Ore*

v^$8ft&

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* ADAJ'S, P r e s i d e n t , Va::cou¥er 1-atio.ial Bank,

• C. A, :rIALBOJ5JT, Heprese-.itiiig tlie 7r.-u.it Industry of
Northwest, P o r t l a n d , orego.:.

'"'/'''•

P. L. ST.^v'ART, Cashier, Kelso S t a t e Baok, Kelso, Tash.
E. J". 5UHKE, of H. C. Jucld h Boot, 7ool Merchants,
PendletOxi, Ore. a.jd Boston.
J # 7. DATJS'-'.TT, Cashier, United S t a t e s ^ a t i o . i a l Bank,
C e n t r a l i a , 7a six.
7TLITA?I /'c* ASTr.K, Par-m -^ * o-tgage I-oar.s , P o r t l a n d ,
Oregon.
CAR! saHAIL^'-tr^R, of The Kazelwood Conrpai-c, Dairy
P r o d u c t s , P o r t l a n d , 0:"e.
1. A. L.TT/TS, P r e s i d e n t , Allen & Le*7is, Thole s a l e
G-roce'"s, Portia•••d, Ore^o : .
P.. L, RUSK, p - e s i d e n t , Poneroy S t a t e Bai.k, Pomcroy,




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A. T.. HUGGT'-S , ' "anager, F l e i s c h . e r , 1-Tay r ?: Co. ,
3a le ^y

r

o o d s , po"~tla*:d, Oregon.

K

*?:fiy-* -^ ''<•''? ••.A'**

E. 7. "BRIGHT, of "-"enchants» Tipccha •-,£e, por e l a n d ,

7. 7U X DODSO- , T~ade Coar-iissio,: e:% po-tla/ad

' : <^

CJhasibe*" of COI^TO^CS. P o r t l a n d , Ore«fe:"'Vir^?-v^
GEORGE "^ HYATT, p r e s i d e n t , "'allov/a " ' a t i o ^ a l Ba;ik,
E n t e r p r i s e , Or ego.:.

.; ,
• if

/ -i

?im G. HOPSO-", United States ^ g i n e e r , portlaxid,
Or ego i..
PHA?:KI:T> GflT^TTH, p r e s i d e n t , por tland Sail-vay,
Tight o: Po*;er Co. , Portland, n*"ego:.'.
J. H ALBERT, p r e s i d e n t , Capital --atio.ia 1 Ba -k,
^
Salem, or ego/;,
D^.«

ir

. J* KKR^, p-esideivc, Oregaoi-v Agricultural

College, C o r v a l l i s , Ore^o,-.
S. G# SAKG.^T, O-ego • State Ba^k .Exaiair.er, Portland,
:

J*. H. L^"*TS, Orego..;- S t a t e S-'igineer,

G,. B. HHGAROT, E/igincer, P u b l i c Dock
P or t lav; d, Or ego.-:.



Po-tland,

ConLi

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L # D. WALKER, E s t a r a d a S t . Bank, CanTDy , Oregon.
P . 1 . MKfERS, La Grande N a t i o n a l Bank, La Grande,

Oregon.
m':

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2676-2677

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*t w i t ^

Y,;,'

^RED J» HOL?£ES, La Grande N a t i o n a l Bank. La Grande.

Oregon.




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The Secretary of the Treasury:

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(Jentlemen, the Federal

Reserve Act requires t h i s Committee and charges i t with ^
the duty of dividing the country into not l e s s than eight
nor more than twelve Federal Reserve D i s t r i c t s , and the locat i o n within each one of those d i s t r i c t s of a federal reserve
bank, which involves, f i r s t , the s e l e c t i o n of one c i t y i n
the d i s t r i c t as the headquarters for such "bank.

The law also

requires the Committee, i n making the apportionment of the
country, t o havo due regard t o the convenience and customary
course of "business, and it does not require the Committee to
observe state l i n e s i n the creation of these d i s t r i c t s .
The Committee i s having these hearings throughout the
country for the purpose of e l i c i t i n g certain facts rthich
w i l l be useful to the Committee In reaching such a determination.

7/hat we want, of course, are facts and not oratoryi

not that we object to oratory, but as a rule oratory Is
not founded on f a c t .
This i s an economic problem of very great importance to
the country; i t i s a national problem and not a local one.
W ere obliged t o appeal to the patriotism of the American
e
people t o a s s i s t us %n reaching t h i s conclusion with a thorough



disregard oS local consideration, such as pride or prestige.

2 679

Vie expect t o give an opportunity to every one cf
tJbe comnnmities gxsit3d aad thcsi ^onmonities which are '
contiguous and dnaira t o b-3 heard at the pl&cos where the
hearings are held, to give a l l the facts that they want to
.

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prosont t o the Coimnitteo t h a t have a "bearing upon t h i s prob?.em.
V/e w i l l now proceod . 0 examine the witnesses , and I
believe the f i r s t

one i s Mr I i i l l s r who represents tha F i r s t

National Bank of Portland.
ST-AIEMSHE 0? ABBOTT LO'V IIILL3.
Tha Secretary oi the Traasury:

Mr H i l l s , w i l l you kindly

s t a t e your full na,o occupation and residence.
Mr H i l l s :

Abbott Low M i l l s , bankar, president of t h e F i r s t

National Sank of Portland.
Ths Secretary oi the Treasury;
Mr H i l l s :

V/hom do you represent?

2 cm president of the Portland Clearing House.

The Secretary cf the Treasury:

How, i f you havo a inap of

the proposed d i s t r i c t , wo would l i k s t o see that
Mr H i l l s :

first.

V& have i t there i n large s i z e , and we have a

small map r i g h t behind yo-a.

The large one has been enlarged

from t h i s smaller map.
The Secretary of the Treasury:
this territory?



V/hat do you comprise i n

^

Mr k i l l s :

Mr M i l l s

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2680

Oregon, Washington and. Idaho, and a small por-

t i o n of Montana we think should go in*fc*fitly*;•*••$.<; ># •..'.
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The Secretary of the Treasury:

V/h&t i s the combined

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national banking capital of the proposed d i s t r i o t ? ar#
iir M i l l s :

About ^47,000,000., which at 6 par cant would

give about ^2 t 400 t 000 capital for a reearve oity.'^^'
The Secretary of the Treasury:

What would be the resources

of the bank, 1 mean what roserres would i t hold, based upon
the national banking law?
Mr Liills:

About #10,000,000.

2he Secretary of the Treasury:

And you have not made any

estimate, 1 presume i of the e l i g i b l e state bank In the same
territory?
iir Liills:

V/o have here the state bank examiner who we thougi

would speak to you Iat3r; but his figures are about 10 per
cent of the state banks that have indicated thsir desire t o
join the system and of the other 90 per cant about 45 par
cent afe undecided and 45 per cent do not want t o join.
The Secretary of the Treasury:
iir M i l l s :

How many are e l i g i b l e ?

1 an not prepared to t e s t i f y as t o the capitaliza-

t i o n of them.
The Secretary of the Treasury:



You may present your case

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Mr

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tn your own way.
- Mr Mills:

2 6 8 1

Mills

-... .^^-- ,-. > -,.,-^-»

W shculd like t o c a l l your attention t o the $
e

faot that 3atur3 has sot aside t h i s northwestern territory
as a d i s t r i c t "by i t s e l f -

And whether now or at some future

time, we belieV6 there should be a Federal Reserve
i n that territory that Eature has given u s .

,/&a >f*r

If you w i l l notice on the larger map there, the mountain
ranges on the south, the Siskiyou Mountains f divide^ t e r r i t o r i a l l y from California.
map.

The gantlezaan is pointing to the

On the east ?;e are separated by the Rocky Liountains. It

makas a territory by i t s e l f of 254,000 square miles, which
i s as large a s the original thirteen s t a t e s , except the state
of Georgia.

Oregon i t s e l f is as large as Hew York, Connecticut,

Massachusetts and Vermont.

Tha narks on that map, on the

right hand map are these*

Those small red dots indicate the

banks that do business and carry their balances in Portland,
in that t e r r i t o r y .

On the l e f t hand map the red dot indioates

the banfc8 that on a ballot which v/s have taken, which I w i l l
mention, have indicated Portland as their preference for a
Reserve City for t h i s northwestern

territory.

Tha green

represents Seattle *s showings and tha square yellowish mark
indicates the banks that wish Spokane .



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Mr Hills

2682

Right close by you Is an absolutely accurate map with
the dots on i t showing the choice of the different banks
and the different parts of the territory I have mentioned,
The red ones indicate Portland, the blTaeish green ones indicate Seattle and the yellowish ones Spokane.

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The Clearing House Association s e t t out t o a l l the banks
in Ore gon, Washington and Idaho and Montana, as far eafltc^S
as B i l l i n g s , a circular, of v/hich t h i s i s a copy* (Handing
papGrs.)
Ihe paper submitted i s as follows:
1.

liame of benk?

2.

Location?
City of

County of

State of

3
%

Capital and Surplus (not including undivided profits)

4*

With which city» Portland, Seattle or Spokanef do you

have the largest amount of banking business?'
5*

In which c i t y do you <x:rry the largest balance?

ۥ

What was tha amount (in dollars) of the drafts drawn

by you tn 1916 on
(a)

Portland

(b)

Seattle

C c V Spokane

$ . . : . .
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7 . Upon which of the above mentioned c i t i e s do you chiefly
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depend for exchange transfers?

Mr Mills
8.

2683

Upon which of the above mentioned c i t i e s do you

chiofly depend upon for coin shipments? %$»:. ,&L<:.. !z«--\ ,'^s^
9»

Please indicate your f i r s t , seoond and third choice

of the above mentioned c i t i e s for a Federal reserve bank.
10.

Do you intend t o subscribe for stock in a Federal

reserve bank?
Mr Mills:

.
She l e t t e r s sent out wora 960, and as 2 say,

w sent them to a l l the banks of Oregon, Washington, Idaho
o
and Montana as far as Billings, omitting Seattle, our o n
w
city and Spokane.

We, however, sant i t to Tacoma, and lacoma'e

banks naturally a l l voted for Seattle, and their totals are
included.
The f i r s t three questions have neoessarlly nothing to do
with tha vote; it was simply for our own information in compiling our returns.

But tha fourth question, acd I would

like to call your attention to ths questions and answers,
the fourth question, "With which city, Portland, Seattle or
Spokane, do you have the largest amount of banking business",
the replies were, by number, £97 of the banks claimed Portland
aB the city with which t t e y h T the largest amount of bank&C
Ing business.
The Secretary of the Treasury:



What was the total number

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of r e p l i e s ?

;pfe

Mr M i l l s :

M r Mills

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3684

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66*5« There were 9&) blanks sent out and

or two-thirds, replied.

297 claimed Portland a s the city

with which they have the largest amount; 122 claimed that
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Seattle was the c i t y , and 133 claimed Seattle as tte c i t y .
In other words, by mmbar of r e p l i e s , Portland received more
favorable responses than Seattle and Spokane together*

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This return was a l s o compiled by capitalisation and sur-

plus.

By capitalization and surplus from these banks, and I

leave out the thousands and ^ust read i t by millions, Portland
received twenty million capital and surplus favor1 able to i t .
The Secretary of the Treasury.

That includes state and

national banks?
Mr Mills:

That includos state

and national banks, a l l

the banks i n the t e r r i t o r y .
The Secretary of the Treasury:

Have you separated the state

and national banks?
Mr K i l l s :

Ho, they are a l l together.

Ehe Secretary of the Treasury:

Ycm &0 not know how nany

national banks there are?
Mr Mills:

No.

They are a l l in here praotically, because

i t i s true they a l l replied.



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Mr M i l l s
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The Secretary of the Treasury:
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You can separate them, of

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ocRirse?
Mr Mills:

I think I can.

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The Secretary of the Treasirry: That may be filed later.
Mr Mills:

Seattle raceived $lQOOO,OOa capitalization and

STirpltis and Spokane seven million.

In other words, by capital

and surplus, Portland was $SO,OQQ,000 to Seattle and Spokane
together $17,000,000 of capital and surplus.

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To the f i f t h question, in which city do you carry the
largest balance, the same proportion prepalls*

And I might

say that every Oregon bank favored Portland, whereas a large
proportion of Washington and Idaho favored Portland, but no
Oregon bank voted for any city other than Portland.
In reply to the &$&Xh question, ££8 banks goted in favor
Of Portland, and 3A21 for Seattle and 14K5 for Spokane. By
capitalization, ^ortlandy $H8:G0a,00Q:, Seattle, $8,000,000
and Spokane $6,000,000.
To the seventh q,uastxOB, "Upon which of the above mentioned
c i t i e s do yoTi chieS depend for exchange transfers?" believing
that that was a pertinent question for your eommittee to linowf
In order t o find out where the exchanges were made,
returns were as fallows:



the

Portland 263, Seattle, 95 and

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Spokane 1*55.

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Mr Mills

Ifl capitalization

2686^-;i^'

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Portland 18,000,00a, Seattle

7,000,000 and Spokane 5,000,UOQ, Portland being one and onehalf times mor3 than both the other c i t i e s put together, so
f i r as the transfer of exchanges and money went • ^ \

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Afe The eighth question,"Upon which of the above mentioned
c i t i e s do you c h i e f l y depend for coin shipments n t looking for
the center from which they draw the coin t o transact the business
for the interior the rot urns wore as follows:

Portland, 242

o i t i e s , Seattle 82 c i t i e s and Spokane 124 c i t i e s .

In other

words, Portland was nearly 40 c i t i e s more than Seattle and
Spokane put together.

By capitalization Portland was 16,00Q,00C

Seattle 6,000,000 and Spokane 5,000,000.
The ninth question, porhaps the most pertinent, "Your f i r s t
cholco of the above mentioned cit ios far a Federal reserve
bank", a l l of Oregon Bofced for Portland, 21 banks in Washington
for Portland and 96 for Seattle and 70 for Spokane.
55 voted for Portland and 4* for Spokane.

In Idaho

In Montana 10 voted

for Portland, 10 for Seattle and 39 for Spokane.

Naturally

Spokane i s mora nearly accessible from Montana than soay of the
rast of us.
The t o t a l of the vote for the c i t i e s , for a Federal Baservo
Bank was : Portland, 304, Seattle 106, Spokane 155.



By capita-

l i z a t i o n $18,000,000 for Portland, #8,000,000 for S e a t t l e ,

fet Mr Mills
-" $7,000.000 f or Spokane. lf%$,^z
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&»*, " • # ? - J - "•-.*,? Xni.
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V/G asked i n the l a s t question, "Do you intend t o subscribe

for stock i n a Federal Hesorve Bank?"

The answers were, Yes,

280 banks, Ko, 191 banks, trndacided, 17C banks.

By capitaliza-

; v: y: ,. ^,tion^26 ,OOQ,OOQ to subscribe for a Federal Reserve Bank, ,; -W;
-",

$6,00Q,G0Q no, and ^8,000,000 undooidsd.
V/ould you l i k e t o have me file
The Secretary of th3 Treasury:

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this?
Eow many of tha banks decid^ig

to .;,-v. * ^° subscribe war3 national and how nuiny were state banks?
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Mr Mills:

All the national banks, p r a c t i c a l l y .

T v Secretary of tha Treasury:
h3

Yas, but how many of that

number?
Hr H i l l s :

I have not that separated.

3 will f i l e that

later.
The Secratary: of the Treasury:

Of courso tha separation of

the national banks from the state bank is very important for
us t o have .
Hr H i l l s :

Unfortunately, i t i s .

The Secretary of t h e Treasury:

7/ill you f i l e a copy of t h i s

statement and a copy of your l i s t of inquiries and also the
replies received?
Mr M i l l s :



them out •

Ye3, we have them here.

W w i l l have to sort
e

Gil

V^Mr Mills

2688

^ Tha Secretary of the Treasury:
later.

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Yes, they can be filed

You might make the analysis I have suggested and

give ua the footings for the national banks and showf?
tbs state "bank " y the sane process, and also indicate h w
b
o
many of tba state "banks Indicated thelff intention t o ;joinf
classifying them by s t a t e s .

And you might also t e l l XS '
J

i f they are eligible under the Act, h w many are eligible
o
Tender the Act.
Mr Mills:

*ft*' '-:'>"*'

Under the state law of Oregon any state bank

Is eligible who has tha requisite capital.
no state prohibition, I ucdarstand

1 mean there is

in Washington there is

some sort of a prohibitionThe Secretary of the Treasury:

Is there any prohibition

in the charter of any state banks against taking stock in
anothor bank?

Mr Mills:

-3&

&z•%:--•.

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E'hoy hava t o amend i t , I understand. J'-'r

Mr Gookingham:

Yes, they can a and t hair c h a r t e r .
m

The Secretary of The Treasury:

i&r Cookingham, are you

going t o t e s t i f y ?
Mr Cookingham:

.;:-.,.15c, 3 do not think so*

The Secretary of the Treasury:

!7ould yon give us a l i t t l e

brief on that point to be fildd a3 an exhibit, or \diat would



M Mills
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2689

be better, would be to havo the opinion of the Attorney f *\ General of the s t a t e , s t a t i n s what his view of the power
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•

.

-

. .

.

•

.

.

,

.

.

_

.

.

•

.

•

of the state bank to subscribe i s , cither the Attorney

%u

General or ths State Bank Examiner, whichever has ths
. :>l * 'J*"'1**^^**

determining voice*
M Mills:
r

**', •

km& *,&%£ * * ^ ^

W have the State Back 3xaminor here today,
e

i f you would like t o hear him.
The Secretary of ths Treasury:

You may proceed.
' -

Mr Millsr

••'ML''-

- . - .

' • • : * • .

.

•

I inquired and found from the banks in Portland

the following*

W asked how many bank correspondents tha
e

Portland banks had in the other c i t i e s on this territory,
in other words how many banks in this territory kept acoounts
in Portland, and we found that in Oregon 869 banks kept accounts i n Portland, but they aro duplicated somewhat.
The Secretary of the Treasury:

You mean there are 865

accounts and not banks?
Mr H i l l s :
Montana, 31.

Yes,

From Washington, 532, Idaho, 136 and

T/e gathered from our ten banks in Portland the

following s t a t i s t i c s :

T

Je asked them to advise tte Committee,

of the t o t a l amount i n money of the remittances forwarded
in 1913 by the Portland banks to Oregon, Washington, Idaho
and liontana; in other wards, the amount of oheoks that we



sent back t o those different places.

And on the othar hand,

2690

Mr Mills

we asked for information as to the amount of remittances
received in 1913 by the Portland bank, what we sent out and
what came i n to us.
worth of items.

To Oregon we forwarded $132,000,000

Prom Oregon the Portland banks received .„_.

200,000,000, showing that the business was baok this way.
1o Seattle we forwarded$32,000,000

of items and received

from Seattle $43,000,000 of i t 3 n s .

In other words, thare

were more of our cbecks went over there for business than
came i n .

Prom Spokana there were 17,000,000 of remittances

forwarded and 25,000,000 received from Spokane.

Prom the

balance of the state of Washington §46,000,000 remittances
forwarded and #81,000,uOO received from the state of Washington.

3n other words, the ramittances forwarded to the

t o t a l of the state of Washington by the Portland bank were
$97,000,000 and there were received from the banks i n Washington $150,000,000-

• '"

In Idaho the remittances forwarded wore $3,000*000 and
$15,000,000 received from Idaho.

The ren&ttajKjes

t o Montana were &3,000,000 and received from Montana $5,
The t o t a l of remittances forwarded by Portland banks dxu>
ing 1913 to these four s t a t e s were $241^000,000 and
from those states §43Z¥>$>QfrrDQQ;.



May 3 f i l e t h i s ?

IP ^

W

lir H i l l s
The Secretary of the Treasury:

exhibit.

n$.- t$^ xtr^
- .

••

_^

' •

•

.

.

.

.

.

.

.

.

'

•

.

-

.

•

•

.

.

Yes, f i l e that as an

V&..A U ^ r ^ - ^

.

.

2691

.

.

.

.

.

.

•

.

.

&&£&$; >«S>£#M- ^K$W? ./.C#.r
f

"

t

.

^ _

-?

*

C

, ^

-

'

^

-

'

.

'

' • '

- * • < " *

.

f

Tho papers above referred to were accordingly f i l e d ,
Mr MillsT""Portland carries no bank balance in any other
oity i n the northwest, I mean the banks of Portland, but a l l
the c i t i e s of the n o r t h s s t carry balances in Portland. T e
7
have compiled b re from our Portland bank a statement of the
=
average daily balanoss maintained by the banks of Seattle,
Spokane and Taooma in Portland;

1 suppose that means tha

average amount that i s hero every day in the year, during
the years, to tha credit of thoss banks, and which i t i s necessary for thorn t o maintain i n order for thorn to do business
for their customers in Portland.
The ave rago daily balances maintained i n Portland by the
banks of Seattle , and no bank in Portland has any balance?
there, was $*20,Q0Q.

The d a i l y average balance maintained

by Spokane In Portland was |&69,0OQ.

The average daily

balanoe maintained by Eaccma was §321,000.

In other words,

those three Washington c i t i e s maintain an averaga daily
balance i n Portland for the acoomodation of thG business adf
their ai-stomers and the n e o e s s i t i e s of commerce, amounting*-t o $1,211,000.



Secretary d

the Treasury:

That was for the year 1913,

#

Mr M i l l s

M Millsi
r
K

'-xX

e n t i r e

••'

2692

Yes s i r , the average daily balance sayB for

'*^J&&-_

t h e

'

#$••;-?.?
y e a r .

-.,••••..

••zs&ifx.}«£%

•••..•,•••

-

-

'
' •••

The Secretary of the Treasury:

.

. •.;•.,
•

"•••.

I s i t increasing or-;;..;-:-:, :

decreasing annually, have you any comparison? ; _^^
wx Mills:

;

•_.,. . : X

1 have no comparison.

;i 4 | , a ^

I simply aslcod i t for

1913.
The Secretary of the Treasury:

You w i l l make some com-

parisons for tha l a s t five years and l e t us see how that
has been running, w i l l you?
Mr M i l l s :

Yes. May 3 f i l e this?

The Secretary of th3 Treasury:

Yes. '.7e ehould like that

comparison for five years.
Mr i l i l l s :

V ' v&ll have t h t t prapared.
^
a

(The paper was accordingly f i l e d . )
Mr Mills:

Kowf the other points we wish t o bring out,

corroborative of what 1 have stated of the financial
figures we have gathared by the clearing house, we think
cun be better brought out, perhaps, by the corroborative
evidence of some of our witnessos.

\7e had intended to

have tha Governor hare t o speak on the geographical situat i o n , but he misunderstood the date and w i l l be here t h i s



afternoon or perhaps tonight, and consequently we r i l l ask

^ J . H v ^ ' V

SOICQ

••".:

'

A . L.

Mills

'.

•'•

2S93

of these othar gentlemen t o t e s t i f y .

Mr Cookingham:

I thought 2 would state t o the Secretaries

what these man expect to t e s t i f y *
The Secrstary of the Troasury:

<
n
W would rather f i n i s h
e

with Mr Mills f i r s t and then taks them up.
UT H i l l s :

; 7 , •/vtr-'Zv'/';'•;'?:•

I a through with my direct testimony.
m

Tha Secietary of the Treasury:

You are, of course, famil-

iar with the provisions of tha Act, that there shall be a
minimum capitalization of these banks of not Is BB than four
million dollars*

How do you expect to overcome that

deficiency here?
Mr Mills:

1 think i t i s almost an insuperable obstacle

to the establishment of a bank in the northwest.

I bslieve

the only possible way i t could be done would be by the
government subscribing.
The Secretary of the Treasury:

You mean by that , that

individual subscription, for instance, could not be obtained?
Mr H i l l s :

1 do not believe you could get them. I think

the limitations on what would be received from this stock,
the fact that i t could not be hypothecated and has no vote
and i s limited to $25r00Q with a maximum of t per oent that
a man could receive, wAth the p o s s i b i l i t y of a double
l i a b i l i t y , would prohibit tte general subs or ipt ions.



There

%••['•

A. L. luills

••

2694

\

might be a few, but I do not believe i t would be general.
The Secretary of the Treasury:

I f that be true, are ^ \

you not arguing for an impossibility? --•---*•--*- ^
a

Mr Mills:

;J

ITo, I am assuming that i f the government

thinks that t h i s t e r r i t o r y i s so situat3d that i t should
have a reserve bank, thon tha government w i l l have to
help out on t h i s c a p i t a l i z a t i o n , because I do not believe
from private subscription or the state bank, i t can be
made up.
The Secretary of the Treasury:

r

/hat i s your theory i n

laying out t h i s d i s t r i c t , as to the t o t a l number of
d i s t r i c t s that the country should be divided into?
Mr M i l l s ;

Eight,

The Secretary of the Treasury:
other d i s t r i c t s ?
Mr Mills:

Have you outlined the
.;

I have not studied tho question very much.

The Secretary of the Treasury:

Have you any suggestion

as t o that?
Mr Millet

In a rough way.

Of course I do not know

the trend o f business i n the south so well as I would in
the northwest, but I should think that Boston, Kew York,
Washington, Chicago, St Louis, Hew Orleans, San Francisco



B

V
•

•

A. L. U i l l s
-

•

•

-

2695

'

and Portland impossible.

;

.

.• - * r

.

;

The Secretary of Agriculture:

'
i

•

•///;.;" .

In your Judgment at t h i s

time, on the "basis of the minimum, i s i t desirable to
attempt t o establish a d i s t r i c t i n the northwest?
We H i l l s :

.

I do not think so. I think at t h i s time there

should be a resorva bank i n San Francisco, a branch in
Portland, and one in Los Angales.
The Sacretary of Agriculture:

Leaving the remainder of

thi d i s t r i c t s suggested by the law for future? determination?
Mr M i l l s :

Yes.

The Secretary of the Treasury:
with San Francisco?
San Francisco?

What are your relations

To what oxtcnt do you do buftinees with

W would like somo information on that
e

pointMr M i l l s :

3 did not get thesa s t a t i s t i c s from a l l the

banks, but 3 thought possibly you

might ask a question of

that nature, and I had our exchange d a r k s compile f o r me
the t o t a l of draft and telegraphic transfers of the First
National Bank, v/hich I represent, during the year 1913 t and
i t w i l l answer your question i f I read thesa t o t a l s , I v
think.

On Uav/ York we drew ^28^iX)0yXi(XLast year, an

average of



B

A. L. Mills

2*96

multiply that by four or f i v e , to cover the c i t y ; but
t h i s i s our own individual

b a n l ^ ^ ^

The Secretary of Agriculture:
Mr K i l l s :

$26,472,000.."

.'

How much was that?
, /

The Secretary of the Treasury:
Mr Mills:

*

:

. . !

Drafts on Nov? York?

Yes.

!Eha Secretary of the Treasury:

You could give us these

statements for the clearing house, of course?
Mr H i l l s :

Ue can give i t for a l l .

The Secretary of the Treasury:

V/o would prefer it for

the national bank alone and than tho state bank separately.
Please make a note of that .
. Mr Mills:

Hew York was $28,472,000; Chicago was

$6,982,000; San Francisco was $14,702,000.; St Louis.,
#2,400,000: Boston £943,000;

St Paui>, $3,191,000; Omaha,

•$ltf64tQ0O and Saeranento, 4>e5O,OG(K

In other v?ords, on

UQW York we drew double the acount that we did on San
Francisco, and we drew on Hew York four and one-half timas
what we did on Chicago, and nearly nine times what wa did
on St Paul.
The Secretary of the Treasury:

What are ths specific

reasons, Mr Llills, for tha great excess there in favor of



. ,--. ± •'.-:•;•!-£-H

B

A. X,. M i l l s

2697
ffk ji|

*. j^ff^'Vy'

Hew York?
iir M i l l s :
;

•

Our merchants buy most of t h e i r goods i n ••'••.••!
•i*f-.r • ~ " ^
~

- ' - -.
'

f

i

.

.

•

.

-

.

:

_

;

.

_

*"'.- ^••l;'"r,

•*••••»'.'->
"

.

-

.

r

-

•

"

'

•'

->

-

-

^ty*-y.~ ry*9&--

•

'

-

'

r

.

'

-'

.- , f
•

fff.-^f»

••

. licart^ & -jw*''. ,-JRi\J^
'

•

•

•

*

•

*

•

-

. • * "'

, . _ ^

I o York, and have to make their settlements in H w
Tw
e
York.

.

\ .

..-

..

The Secretary of the Treasury:

..

y^l^]^

That i s on acoount of

the sattlement of balances, of course? " *.**''
.
Mr Mills: Yos.
The Secretary of the Treasury;

Ordinary commercial

transactions.
Mr i a l l l s : Yes.
The Secretary of the Treasury:

Where do you carry the

bulk of
Mills:

Hew York.

The Socratary of the Treasury:

How much of your reserve,

what percentage, i s kept there, would you say?
Mr Mills:

Oh, W carry about 10 per cent, I should
Q

think, i n Hew York.
Tha Secretary of the Treasury:

T<m per cent of your

reserves?
Mr M i l l s :

I think so% You mean of the t o t a l reserve of

25 per cent, do you not?
The Secretary of the Treasury:



Yes»

l

B
-

,

•

Hr iviills:

•

•

•

.

~ A. L. Mills

•

• •

-

par cent of the 25 par csnt?

•

•

.

'

•

•

•

.

'

.

>

!

"

,

"

Yes.j

You mean you keep 10
T*

tv*i t t ^ ^ ^ jfji

^ •-*' »«r««* %&M&&*, tw Is ? ^ t " '

The Secretary of the Treasury:

3 thought you meant 10

per cent of the amount.
Mr k i l l s :

•

2698

vie ara required to keep 25 per cent.

The Secretary of the Treasury:

Mr k i l l s :

,

iSo.

.

-.

V/e carry ubout a million dollars in Hew

York.
2hz Secretary ox the Treasury:

H w much of that i6 reserve
o

and how much represents exchange balances, a balance for
exohange?
I&r Mills:

Do you separate that item at all?
iio, w? do not attempt to separata that item.
e

The Secretary of the Treasury:
your reserve in BQM York?
Ux H i l l s :

Yes.

You c r r y 40 per cent of
•- -

-

The Secretary of the Treasury:

:j ; '
10 per cant of ths 25

per cent would be 40 per cent of the t o t a l reserve. TChsrc
do you carry the remainder, what percentage?
Mr K i l l s :

About half of that in Chicago and then a small

amount in St Louis. Those are the only three c i t i e s we can
carry our reserve in.
The Secretary of the Treasury:



2 understand t h a t .

B

A- L. Mills

(

• Mr M i l l s ;

2699

W carry a fair balance in Boston and Philae

delphia and quite a large balance in San Francisco.
The Secretary of the Treasury:

%K

^

Eov;, the San Francisco

"balance i s a perfectly normal balance, i t i s due, I mean,
to the normal n e c e s s i t i e s of trado, because i t does not
count as a reserve.
Mr Mills:
trade.

Yes, i t i s duo to tha normal nooessities of

3t largely arises from tha fact that to get exchange

on Hew York we keep quite a balanoe in San Francisco, be^ t u g e San Francisco transfers t o Hew York far us without
c o s t

•

. •...•.',:•'•• > ' . ;

.--

•^•i-'- ^ • / - • • ^ ^ ^ • • " • ^ i ^

The Secretary of the Treasury:

••-.r•r^^^;.:-'-^>;^^;^^-:;

; :

How, on t h i s question of

exchange, the lar? here contemplat3s and in fact provides
that there s h a l l be a parrlng of exchange between these
Federal reserve banks when they are established.

To what

extent, in your judgment, i s that going t o materially
alter the situation now with respeot t o exchanges?
Mr M i l l s :

I think It w i l l altar i t in t h i s respect,

that i t w i l l maks exchange free naturally where i t i s a
member bask on the reserve bank, as I understand i t , and to
that extent i t w i l l do away with the charges of exchange
that we have, but i t 7;ill not divorce us from the necessity



B

A. L.Mills

27C0

of our carrying a large account There w do the most *
o
business,, simply on aoocunt of delay.

For instance, iif* '

+

there was one reserve "bank in San Francisco and we were a
member ban?i and we send a moiaber bank a draft on San Francisoo i n s e t t lens nt of balances in H w York, it would be
e
collected free naturally through the reserve bank..

At th3

same time the l i a b i l i t y of the endors3?:s would not em on
. d
that draft until they had heard rat urn from Sa» Frances co
that i t was paid*

Frequently it would not bo looked "opon

with so much favor as a draft on the locality in which the
b i l l had been created.
The Secretary of the Treasury:

Assume on the other hand

you have a system of clearances contemplated by this b i l l
establishad a l l over the country, a system of clearances instead of check collection; h w far is that going to a l t e r ,
o
In your judgment, or modify tJie existing necessity for maintaining these large exchange balances in tha different
cities?
Mr Mills:

2 do not think we will have to carry such

large balances in these c i t i e s .

I think it will result in

reducing the msmbar of a coo ants * For instance, we carry foitf
in Eow Ycrk and we could probably reduce our accounts in



B

A. L. K i l l s

2701

Uaw York perhaps t o one. And if the Reserve Banks par
the country, i t w i l l save c o l l e o t i o n charges and simplify
business to that extent

y

" u i t w i l l naver make th= San
bt

Prancisco draft as good i n Hew York as the Hew York draft;
"i 3 .» ^ 3 1 ^ 0
0>

ot: t^c T.rs&ss.r:

it art; ,.L;-L:: itixc^;«ai«f

In other words, the endorsers w i l l be the people v/ho

-

receive the draft and t h e i r l i a b i l i t y w i l l not end simply
because i t i s parrefi through the clearing house, or i f t h i s
i s a universal clearing housa.
. - The Secretary of the Treasury:

,-

;'
The system as contemplated

by the b i l l v/ould r e s u l t , however, would i t not, i n destroying a large amount of the present a r t i f i o i a l i t y of
•"'•'-v- .-'"'--"*

accounts between these c i t i e s ?
Mr M i l l s :

Yes, t o cuite an extent.

The Secretary of the Treasury:

,.;,:,.,,,-;

And to that extent, of

course, would bring about more normal conditions of trade
and commerce and exchange.
Mr H i l l s :

*..'- -

\:

Yes. To i l l u s t r a t e t h a t , we carry i n Phila-

delphia a balance that we very rarely draw against except
to transfer t o New York.

That i s done because Philadelphia

pars the south f o r u s .
The Secretary of the Treasury:

Exactly, and t o that

extent i t i s a purely a r t i f i c i a l condition.

\


Mr k i l l 8 :

V

And Albany i s the same , for a l l Hew England.

B

A. L. Mills
The Secretary of Agriculture:

2702
Do you carry any balance

at Albany?
Mr M i l l s :

JJo, Philadalphia and Uew York par for Hew -

England and Philadalphia for the south.
The Secretary of the Treasury:

?7hat are jour allowances

of interest on reserve balances?
I!r Mills:

V/e pay 2 per c«3nt to the interior banks.

The Secretary of the Treasury:
free?

-

Do you collect checks

*

'

\
c.-

* -

Mr H i l l s :

Yes.

r

"
'

*' • "

:'
-

-

The Secretary of the Treasury:

*

•

«

'

Free c o l l e c t i o n of checks

absolutely?
Mr Mills:

V/e do not believe in any restrictions on busines

i f possible, free trade, we par the world here.
The Secretary of the Treasury:

Do you mean that as appliuc

to the t a r i f f as well as finance?
X

Mx M i l l s :

.

P o l i t i c s are forbidden.

The Secretaey of the Treasury:

_/

;

•

V/oll, treating that as an

economic problem.
Mr l i i l l s :

As an economic problem, I belie vs in i t . As a

theory, 1 do not.
The Secretary of the Treasury:

I notice, according t o you3

statement f i l e d with the Controller on the




21st of Ootober

fB

k

A. L. H i l l s

2703

l a s t , t h a t you seem t o hold in reserve here for other
n a t i o n a l banks $5 y 144.^OOQ.

Whs re a s , Seattle had for t h e

national banks $3,599,000.^....' -,; :m •hr;.v.. £.,r
Mr LI:ills;

v

. . ^ ,,..,_

I think that bears out tho statement I have

made about where tho balances are kept.
•'"> Iho Secretary of t h e Treasury:

T

Yes, but on the other

hand you had $3,90O,0OC> from s t a t e banks and private banks
and S e a t t l e had ^4,915,000.

You seam t o bs running rather

nock and neck.
Mr M i l l s :

'^f'^-^l^^*^

They may believe in s t a t e r i g h t s more than we

- The S e c r e t a r y of tho Treasury.-

Tha deposit simply for

the purpose? of comparison, i n order t h a t i t may be e a s i l y
referred t o i n the r e c o r d , the individual deposit of Portland Kational Bank seems t o bo $23,367,000, whereas i n
Seattle they are ^30,257,000,,
Mr M i l l s :

We have but four national banks i n Portland.

Our l a r g e s t bank i s the p r i v a t e bank of Ladd & T i l t o n , of
which bank Mr Cooking ham i s the manager, and i t i s not in that
report•
The Secretary of the Treasury:

You have the t o t a l s for

the s t a t e , n a t i o n a l and private banks of Portland


Did you

B

A. L. Mills

read the t o t a l deposits here?
&r Mills:

\

. - . . :;
.

You have not those

-1' "x u~l"*^\

.^ ^ ; r ^ ^

hr H i l l s :

V ^^ l^

Ho, 1 did not.

The Secretary of Agriculture:
tics?

2704

I3o.

2 can gat them for you,

The Secretary of the Treasury:

;

:

v

You oan give us thpso

figures, and at tho same time you might give like figures
for Seattle, for comparison; the t o t a l deposits in both state
and national banks and trust companies, and separate them,
giving the t o t a l ; and tho same information from Seattle and
Spokane might be included also in tho same way*
I understood you to say, Hr H i l l s , that you believed i t
would bo batter for the development of this t rritory and for
the greater convenience of business and for the customary
exchange i n business if a reserve bank woro establisted in
San Francisco.
~dx Liills:

-

~

^:

Hardly t h a t , s i r .

The Secretary of th3 Treasury:

And a larger amount of

t e r r i t o r y included i n the d i s t r i c t .
Mr i i i l l s :

lot for th-d convenience of business, but for

tho p o s s i b i l i t i e s of c a p i t a l i z a t i o n , 1 believe i t i s only
possible f o r one bank t o be located in San Francisco, at



B

A. L- Mills

2705

t

>

present, but when t h i s d i s t r i c t i s set apart, i t should'* 7
be hero, 3 believe.

•

--• • - * - « - - ~ . . A ^ . . .^ i . i * \ & r n

The Secretary of the Treasury;

Js not that ef i t s e l f one

of the most e s s a n t i a l elements i n convenience ^f businass,
t o have adequate capital?
Mr Mills;

I t saqms tp m Qach reserve bank i s as strong as

i t s neighbor, just as tha finders OB your handj they are
a l l united, and the raserva board nrust deal with them t o gether, and no rasorve bank would f a i l unless thay a l l failed
,. Tha Socrotary Qf tha Treasury:

I t i s not a question of

policy but t o have th^ resources t o take care of the nooessi t i e s of ths respectivo d i s t r i c t s ,

i s i t pr not your judg-

ment that as far as practioablo the Committee ougjat t o lay
out the country into d i s t r i c t s that will be, i n normal
times, self-contained? as
Mr H i l l s ;

Yes, 3 do.

The Secretary of Agriculture:

2 understand you t o say that

at present you would suggest that arrangement, and wait for
development before laying out additional d i s t r i c t s ?
Mr M i l l s :

That i s my personal belief-, that San Francisco

should be the Federal reserve bank of the d i s t r i c t comprising
the coast.



B

A. L. H i l l s
The Secretary of Agriculture:

8705
You have proTDably nearly

doubled your banking resources in t h i s section in fifteen
years, have you not?
Mr Mills:

I should think s o . I have not the data. I should

think we must have.
//
The Secretary of Agriculture:

And probably in another

f i f t e e n years you would have enough capital*
Mr Mills:
; T

I should think so*

The Secretary of the Treasury:

W hope sooner than t i n t .
e
What aro the normal

courses of business, speak^^g not so mich of banking exchange
but of movement of commodities as betrcesn Oregon and this
district?

What i s the area of distribution of cozemodities

from Portland?
2£r U i l l s :

f*

.

.

:..-..

1 should like t o advise you qf that by our

other witnesses.

W have other witnesses who w i l l show yox.
e

that a!3 the large implement houses have qentered here and
distribute agricultural impleimnts from Portland. He w i l l
show you that the ^ive stock territory of Oregon,Washington,
of Wyoming,
/Xdaho and part of Montana drains to Portland. W w i l l
e
show you by our merchants the territory they cover-

In

other words, that practically t h i s whole territory drains
just as the river drains from the mountains, and commerce



and trade follows those r i w r s down to Portland.

B

A. xi. M i l l s

2707

The Secretary of Agriculture:

Mr Liills, it was presented

t o us in Seattle that the failure to establish a Federal

*

reserve "bank in the northwest would do injustice t o the
northwest.

On that point, to wha t extent, for the present,

under the arrangs 109nt you- suggest, could the requisite serylO6 ba rendered through a branch bank?
Mr M i l l s :

&-ra-«5>ft

I cannot see why a branch should not have

the strength of the parent t r e e .

It perhaps would be a

l i t t l e more inconvenient, but i t would seem t o me that the
n e c e s s i t i e s of the d i s t r i c t could be cared for through the
branch.

A branch can be as strong as the parent.

The Secretary of Agriculture:

The suggestion was made

that the particular community would, in that oase , be dependant upon the parent bank, which might not, know the needs of
the community vtiite so w e l l .

What would you say on that

point?

Mr M i l l s :

•••••

.. ; ; ^ , . : i | * \ ; / • ' • ' • : - ' f ^

Through the organization of the branch bank,

tho branch ba£k, i f I know the law aright, has seven directors.
The Secretary of Agriculture:
Mr Millis:

Anil four

of those are appointed by the

Reserve bank, axe they not?




Yes*

B

- A -

L. Mills

The Secretary of Agriculture:
Liills:

2708
Yes

And naturally thosQ people would hava knowledge

of the eorDmunity i n which thay do business.

The home

. —,

bank, tho rosarvo "bank, would lean on tha ^nov;lodge obtained
from tha direotors of tho branch bank; and 1 cannot see why
i t would be an y more d i f f i c u l t than in ths branch banks
of our large British competitors that we have here,
Canadian Bank of Comaercu and other Englisji banks.

the
Tha

branch bank has tha strength o± tha home bank and receives
i t s knowledge froc ths officers of tho branch bank.
Tha Socrotary of Agrioulturo:

And as to tho directors in

the parent bank, they are drawn frofa the entire d i s t r i o t ,
are they not?
Ux Mills:

2 understand that three of them ar3 elected

by the bankors of the antiro d i s t r i c t , Class A, and Class
B are business men from the entire d i s t r i c t .
The Secretary of the Treasury:
Mr M i l l s :

Yes, bjztho banks, but they era business men.

£he Secretary of the Treasury:
Ilr E l l i s :

Yes.

And Class C are appointed by tho Fedoral

Raserva Board.



They are eleoted a l s o .

And the management of thsn bank, the chairmai

A.L-Mills

£709
•

'

*

•

•

of those l a s t three; i n other words, the "business element
has three representatives and the bankers have three, s i x
out of the n i n 8 . ^ 5 5 2 s . ^ ; t 5 tfe? ^ ^ e a t i ^ nr = -n*-*:**^
?
•

The Secretary of the Treasury:
;;three.

•

Mr Mills:

••••

•

And the government has
*•*. ^

tsp*e*iu*r& $£ *

The government has three.

The Secretary of Agriculture:

Do you apprehend that a

"board scv constituted would be any more partial to the
3. community in v/hich the bank happens t o ba located than any
other part of the d i s t r i c t ?
Mr M i l l s :

I would trust the Federal Be serve Board would

remove them, i f they were.
The Secretary of the Treasury:
that power.
Mr M i l l s : Yes.




_
The Board, of course, has

; r • ; ' . " ! - .

• • • - * . . . •

•

>

r
G-l

A. Lo Kills

The Secretary of the Treasury:

2710
Ts it not a fact, too,
.

Mr. Mills, that tha very character of the organization of
the "branch 'ba.D'k necessitates the selection of a larger number of directors familiar with local conditions than with
the parent,bank, naturally the sphere of operations of the
"branch bank is more limited than that of the Federal
Reserve Eank, anda greater familiarity would necessarily
result on the part of the local directors from the territory
attached to it.
Mr. ^rills: yes.
The Secretary of Agriculture:

There is another point

which of course we must bear in mind, that the initial
transactions ^rould be with the individual banks as heretofore,
T T . Hills:
.r

Absblutely,

The i:idividual bankers would

deal with the individual members of the community.
The Secretary of Agriculture:

precisely.

Mr. Mills: And it would simply act as an intermediary
between the reserve bank or the branch bank.
The Secretary of Agriculture:

As a matter of fact you

would follow the usual course through the branch.
Kr. Mills:



It is just a mother bank, whether you call it

G-2n

A. L. Mills ^

^

2711 v *

a "branch or a central "bank. ,r V?..4&- >. s^&ta-'^ V h M ^ & r ^
rr
* The Secretary of the Treasury:

T should like to address

to your Clearing House the question we are presenting to
the Clearing Houses of other cities.

The federal Reserve

Act provides in Section 13f among other t h in g s ^#_j • iqj ""
gjr *"
''
"Upon the indorsement of any of its member "banks, with
a waiver of demand, notice and protest "by such "bank, any
Federal Reserve Bank may discount notes, drafts, and bills
of exchange arising out of actual commercial transactions;
that is, notes, drafts, and bills of exchange issued or
drawn for agricultural, industrial, or conimercial purposes,
or the proceeds of which have been used, or are to be used,
for such purposes, the Pederal 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,"
We should like to have a brief containing suggestions
as to what would be a proper definition of commercial
paper, in contemplation of the provisions of the Act.
Mr. Kills:

Do you want me to answer that?

The Secretary of the Treasury:

l\o, T say we should like

to have a brief from your clearing House, and have it
consider it, and also suggest at the same time any standard


G-3

*

km L. Mills

2712

ized form of notes, drafts or bills of exchange which are

"\

to he circulated between the Federal Reserve Eanks and the
member bank,

" '

:

/ ! J w there will, of course, be some distinctively local
so
paper in each one of these different communities; for
instance, in one place you have lumber paper and in another
you have cattle paper.

Wherever you have some specific

character of paper that is more or less local to this region,
we should like to have some data about it, and suggestions
as to a standardized form which may be directed.

You will

have two or three weeks within which you may submit the
information.

We should like to have it, for instance, say

by the 1st of yarch, * f
. Wr0 ? 1 1 1 S :

you can

8©* ** ^° UB »

We shall have It for you.

The Secretary of Agriculture:

That is left to adminis-

trative determination rather than Ie gislativeP
Mr. Hills:

X read it and wondered how you would administer

that feature.
The Secretary of the Treasur3^: Tt is a very important
question, and one on which we should like to have as much
light as possible*



G-4

A. L. Mills

, •-, .
,

^ 2713

Mr. Mills: May T have a copy of what you suggest? r^,,,f^;^
The Secretary of the Treasury:
to you.

Yes, that will be supplied

l ' w in Section 16 of the Act there is a provision
^o

that "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 may at its discretion exercise the
functions of a Clearing House for such federal peserve
Banks, or may designate a Federal peserve Bank to exercise
such function, a.:d may also require each such bank to exercise the functions of a Clearing House for its member banks."
That is also a very important provision, one which, if
worked out in a practical and satisfactory way, may be of
very great benefit to the commercial interests of the
country as well as to the banking interests of the country,
and we should like your Clearing House to consider that and
submit any suggestions that you may care to in the form of
a brief, as to how that can best be effectuated.
nrr. Mills: May T have that also?
The Secretary of the Treasury:
Mr. Cookingham:

yes.

So much time has been taken, that T

think it would be advisable if we should let you know just



G-? .

:..

A. I . K i l l s

•

;

/

f 2714

what t h e s e witnesses expected to cover, and you may say that
you do not care t o hear them a l l .

?he

next witness was

Mr. Coman, president of the northwestern E l e c t r i c Company,
who would give the r a i l service into Portland, as compared
with the service into the other Coast towns.

Would you

care to hear t h a t ?
The Secretary of the Treasury:

We would prefer to have

some data of t h a t kind, which may "be submitted and f i l e d as
a p a r t of the record, and omit a l t o g e t h e r testimony as to
t h a t data.

We cannot carry a l l of t h a t in our heads anyway.
STATEMENT 03? C i C. COLT.

The Secretary of the Treasury:

Mr. Colt, give your f u l l

name and residence and occupation?
Mr. Colt:

Horth Portland, Oregon; President of the

Union Meat Company.
The Secretary of t h e T r easury # .

What i s the Union Heat

Company e x a c t l y , T mean i s i t an independent company, or—
MT. Colt:

Tt

i s a l l i e d with the Swift i n t e r e s t s of

Chicago, in the gen eral packing business.
The Secretary of the Treasury:
f a c t s on t h a t question*



Give us some leading

G-6

^ <, C. J. dolt

_ T h e S e c r e t a r y of A g r i c u l t u r e *
lishment here?

2715

Y o u have a p a c k i n g estab-

. -,,. • • • . . '

. .
,

1

m#i<* t i m s^iay .eae. •#«**•£• A*A' T ^ r ^ r * •
yrm Gelt!

..,,..•'
' . .v : -

W have a packing establishment here, carrying
e

on a l l the "brandies of the business that the larger packing
houses do.

T^e location of the present modern plant that

was constructed here in 19^9 — since that time the business
has been growing steadily with the development of the live
stock business throughout the Northwestern country.

At the

time the plant was located, there was also located the
Portland Union Stockyards, at this point, which is the
only open competitive live stock market west of Denver.
The value of the live stock handled through the Portland
Union Stockyards in 1913 was approximately $1^,000,000.
The Secretary of the Treasury:

T understood you to say

the only competitive live stock market west of Denver.
Mr. Colt:

Y e s, sir*

The Secretary of the Treasury:

Does not Seattle do a

good deal of business of that character?
Mr. Colt:

They have no open live stockmarket there.

The Secretary of the Treasury:
Mr, Ooftt:

y.o open live stockmarket?

3o, s i r , where live stock changes hands. There

are packing houses in Seattle and Tacoma, but this i s the



27l6
only stock yard similar to the ones they have in the Tfiddle
^Test and the east, the only one west of Denver. "

,-- -

# £ As an evidence of the st-ong position of this as a live
'
stock centre, and the rapid expansion of business it is in
sure to enjoy,/the subjoined tables the increase for the
various years is shown to be in fair proportion to that of
1913«

It has shown a steady growth since 1909.

-\ s

In the tabulated statements following, of the states
where live stock shipped here originates, and particularly
in that table containing the shipping points by carload
lots, it is shown that th e Portland Union Stockyards Company
draws its supplies from all of Oregon, Idaho, Washington,
Montana, California, Utah and Nevada, as well as some
business from Wyoming, Colorado and other states further
east,

""
•

Since the oiactment of the new tariff law, inquiries
are being received here

from Alberta from growers who

regard Portland as their natural outlet.

The Portland

Union Stockyards Company is the only one of a similar
nature west of St. Paul and Denver,
Without attempting to distribute the location of the
stock herds of the Pacific "Northwest, the figures on the



G-8

r, ,•
-;

C. C. Colt

2717

commercial movement to t h i s port are submitted as evidence
of the fact t h a t Portland yards are the real commercial
and financial

centre of the industry for practically the

entire coast.

T will not attempt to read a l l these
•-:-/:'%

_ figures.

±-:/::::^.:^...^

The Secretary of the Treasury:

^^^x-z

Read the summaries, and

give some comparisons.
Mr. Oolt:

yes.

T" 1913' the t o t a l receipts of c a t t l e

at the Portland Union Stockyards were
76,521; in 1911, 88,139

80,399 head; in 1912,

"

The Secretary of the Treasury:

Suppose you make your

comparisons in five year periods.
Vr. J o l t :

O a five year period the t o t a l is 355>348.
n

•phe Secretary of the Treasury: fto, T mean, take five
years "back, s£|r
jrr. Colt:

in 19°^> and then give us 193-3*

The yards were opened in September,-1909.'

The Secretary of the Treasury:
IT. Colt:

Well, "begin there.

There ?/QBea fer; months of that year only, "but

for the full year of 1910 there were 89,733 c a t t l e received*
The c a t t l e receipts a l l over the United States have "been
shrinking some.

This l a s t year, hovdever, showed a gain

over the previous year.



•

.

*

- * / ; - ,

.

•

" . • ' : •

G-9

C. -C. Colt.

The Secretary of Agriculture:
before

Mr.

the yards

Oolt:

were

2718
Where did the cattle go

o p e n e d ? K-fT-•••'-•

•••
.--

>

^

•.. *
•-

Tiier© was a slaughter house here and some of

that came by direct purchase and it was scattered through- ' \
'
out the entire Northwest, by killers who bought direct at
country points.
The Secretary of Agriculture:

Do you know about the number

that came here before you opened the yards?
Mr.

Oolt:

jt is hard to centralize it.

at the present time is the buying point*

mhe stockyards
There are about 30

buyers who look to this market at the present time for all
or a portion of their requirements.

Previous to that there

was very little businesstransacted here by buyers outside
of the city.

There has been a concentration of the

receipts here, and T do not know what the figures would
show previous to that time, although the number of cattle
and live stock handled through this market was comparatively
small*
The receipts of calves fo;- 1913 were 4,666, and in 1910,
8,297.
The total receipts of hogs in 1913 was 188,286, and in
1910,

83,323, an increase of 105,000.




G-10
^

C. C. Colt

2719

Tn t h a t connection T would like also to say that the

receipts of hogs in 1913 a l l originated in the territory
immediately tributary to Portland, T mean west of the Pocky
Mountains, from Idaho, eastern Washington, eastern Oregon,,?1
and a very few from northern California and central oregon.
Tn 19IO-II aiid a portion of 1912, the requirements of
live hogs for Portland and the Pacific Northwest were drawn
from as far east as Kearney, Eebraska; in fact, previous to
I909 there v/ere as many as 90 Per cent of the hogs killed
here in Portland drawn from Nebraska points.

Since

August of 1912 there have "been no live hogs shipped from
east of the Becky Fountains to this market.
The Secretary of the Treasury:

Where do you get most of

them now?
Mr, Colt:

The large receipts come from Oregon, the

"biggest percentage comes from Oregon.

W also draw from
e

Washington, Tdaho, western Tdaho particularly is getting
to "be quite a hog producing section.
Sheep receipts for 1913 totaled 295,730, and in 1910
were 167,418,
Horses and mules, 1550 in 1913, and 1741 in 1910.
The Secretary of Agriculture:
increase in sheep there.



There seems to be a large

Page 2720 missing from original document.




California largely, or from what part of California do
?;those

Mr.

come?-,

i,lilAiu'i > .„' •*-,,«, «,>^.v ...,»^ *v.-~-.,..^,..,,,.; * u «

Colt: That is represented principally from northern

California.

However, in the early spring of the year there

are some cattle which come here from as far south as Bakersfield.
The Secretary of the Treasury'.
Mr.

Very well.

Colt: Utah 5,7^4; Nevada 120; miscellaneous 5&5,

a total of 80,000.
*,
.

The receipts of hogs " y states are as follows: Oregon
b

9^-,319; Tdaho 70,960; Washington 19>371; Montana 958;
California 2,278, a total of 188,000.
Of sheep, Oregon supplied in 1913, 217,634; Tdaho
35,916; Washington 35,037; Montana 7,089, and California 34
head.

We get very few sheep from California points.

The Secretary of the Treasury:

You may just file that

with the reporter, please.

;,

(The paper was accordingly filed.)
Mr-

Colt: Another branch of the industry here which has

developed in the last two years is a company known as the
Portland Cattle Loan Conrpany, a£ the same nature as those
in the Middle West,
in August of 1912c



Tt v/as organized and started business
Since that time to January 1st, 1914,

G-13 .

c. c. colt

.

t h i s company has loaned to the stock men throughout the
Northwest approximately #10,000,000, aTx>ut 58,000,000 of
which has been paid, and something over §2,000,000 being
in force at the present time.

Loans have been made in the

states of oregOxT, Washirgton, Northern California, Idaho,
Utah and Western Montana,

Bankers and live stock people

throughout this di strict have assured the Loan management
that no other one thing has been a greater aid to the stock
industry than the f a c i l i t i e s offered by i t , and that the
company has been a great stimulus to the live stock production throughout the territory mentioned.
Becords show that the conpany has made loans on approximately 170,000 head of c a t t l e , and something like 700,000
head of sheep.

This has enabled stockmen who had c a t t l e

and no feed to purchase feed for the purpose of finishing
off the live stock for market, and those who had feed but
no live stock to purchase live stock ai: d feed i t for market.
Thus the company has been the means of a profit to live stock
people and to the farmers who were forced to market their
hay or live stock for want of sufficient funds to carry on
their operations aiid prepare their product for the market
in the most advantageous way.



All these loans are made

G-14

2

C C. Colt
o

723

under chattel mortgage.
The Secretary of the Treasury:
company controlled?
Mr. Colt:

•

By whom is that loan

./

The majority of the stock i s ov>rned by the

same people who own the Union Keat Company.

The local

"bankers here, Mr. Mills, Kr. Ladd an& Mr. Ainsworth are also
directors and stockholders of the company.

Tt

!ms formed

hore for the purpose of f a c i l i t a t i n g the handling of live
stock throughout the Northwest.
The Secretary of the Treasury:
Mr. Colt:
Mr. Mills:
Mr. Colt:

"/hat is i t s capital?

§100,000.
And the surplus is >?70,000.
n^he surplus is ^70,000.

The Secretary of the Treasury:

Where does this company

draw i t s funds from, where do you get your money now to
make these loans?
Mr. Colt:

The paper i s sold, some directly to the "bank

here, and in Chicago and tfew York and the 3Tiddle West and
California.
The Secretary of the Treasury:
financed?
Mr. J o l t :



Tn the Middle '7est.

Where i s the "bulk of it

• ' " t g r « V - " ];~'": ••-•' •'"•
•'•. .-•

0-lJ

3. C Colt

The Secretary of the Treasury:

2724 '?
What percentage in Port-

land, would you say, " y the Portland banks?
b
JCr. Colt:

T should say about 10 per cent. Am T correct

' 'i}:"

in ^^^^ii^$;^$L/
Alb-.

Mills:

Yes.

2Say T i n t e r r u p t ? ^ ^ ^

The Secretary of the Treasury:
!-:"r. Mills:

^ _..., ,, .
,

Yes.

«^ifAe,

.

.

'

The Portland banks hold themselves in reserve

at any time when they are unable to s e l l the paper in the
east, each giving them $200,000.

They will carry |600,000

u n t i l they are able to sell i t .
The Secretary of the Treasury:
s e l l in a year?
Yr* Colt:

Take

About what t o t a l do you

l a s t year, how much were your loans?

T think about $5,000,000 during the year.

The Secretary of the Treasury:

And you would say half a

million dollars was handled in Portland?
)ir. Colt:

yes.

The Secretary of Agriculture*

pw long i s the paper

handled, as a rule?
TV Colt:
- .

Tt runs from 30 days to six months, arid some-

times nine months, but the bulk is six months paper.
The Secretary of Agriculture"
paper?



The bulk i s six months

G-16
:

•

• $ •

c. c. Colt

2725

" • •

•

Kr. Colt*

T think so, six months, and under;

The Secretary of the Treasury:

•

^ -it, ixm

And all this cattle paper

is secured " y chattel mortgage? .
b
Mr.

Colt: yes. 'H:-S^T-Ai^^- ^^^.:Mt.&.im&*:.'...',"; „.:
;'

The Secretary of the Treasury:
brands, T suppose.
15r. Colt:

yes.

J

^ased upon specific
-

-,

.,

The Secretary of the Treasury:

"Hi'
How do you get the iden-

tification of the cattle?
Mr.

Colt: By "brands,

Mr. Mills:

There has never been a loss.

The Secretary of the Treasury:

What percentage do you

advance against the assumed value of the cattle?
}St, Colt: ?/here the moral risk is sufficient, we will
loan the purchase price of the cattle, providing the
borrower owns his own home and is willing to include in the
mortgage hi s hay, feed or grain, and perhaps some other
collateral in the nature of security.
The Secretary of Agriculture:

What do you rely upon

principally, the character of the borrower?
} r Colt:
!.

We rely more on the character of the cattle

than the borrower.




G-17

C C. Colt

2726

The Secretary of the Treasury:

You rely more on the

character of the cattle than on the character of the
"borrower?

Mr. Colt:

"

""f--z \-.;:y-:

yes.

•'--•-•

._. •

_ ,. ,
•

W never have had a loss*
e

The Secretary of Agriculture:

.^

f

'',"

Is t h i s paper easily

market ed?
Mr« Colt:

-..

;.,^..:; •,.-,.,; :^.-^^^
Yes. At times, in money stringencies i t is

difficult to move i t , "but generally i t moves very well.
The Secretary of Agriculture:

Where do you s e l l most of

that paper?
Mr» Colt:

Through the Middle West.

The Secretary of the Treasury:
Mr. Colt:

Chicago, St. Louis, St. Paul and Kiuneapolis.

The Secretary of the Treasury:
Mr. Colt:

What cities?

H w about Kansas City?
o

I am not sure whether any of the Kansas City

banks buy i t or not.

T do not believe they do, not direct

Mr. Mills: Hoc
The Secretary of Agriculture:

Are you going to t e l l us

joomething about the distribution area of the finished
product?
Mr. Colt:

The distribution area of the packing house

products i s rapidly growing.



Ve are at the present time

$

C* C. Colt

2727

making nsrgiilar shipments to European ports, particularly
Germany and some to Englar d and some to Turkey, in the way
of tallcw, seme to Cuba and Central American points, the
Hawaiian Islands, the Philippine Islands, Japan, China and
Alaska,
The Secretary of the Treasury:

What percentage of the

"business is foreign and what domestic?

.,

Ur» Colt: At the present time about 8 per cent of our
business, I should think, is foreign, during 1913The Secretary of the Treasury:

Ts that growing rapidly?

M*V Colt: Y es » s * r j * * is growing right along.
•
The Secretary of the Treasury:

\7hat is your annual turn-

over?
Mr. Colt:

The annual turn-over of the Union Feat Company

last year was about $7,500,000,
The Secretary of the Treasury:

--r
:
Where do you finance

most of that?
j r . Colt:
n*

The bulk of it is financed in Portland and

Oregon, country banks in Oregon and the Portland banks, and
some in California.
The Secretary of the Treasury:
is where?



Your domestic distribution

&;••::'

2* J. Colt

^ : l . Colt:
?r

2728

The domestic distribution comprises all of

Oregon, all of Washington, western Tdaho and northern
California, and Vancouver, British Columbia,
Vancouver, British Columbia.

We ship to

We camiot get much further ,C*<%

south than San -prancisco, although r e sell a good deal of
/
product in San ^rancisco. :.^7MK;fe^
The Secretary of the Treasury:

of the freight rates?
itr. Colt:

r

/hy ca^ you iiot, on account

:

'M^^t?im

'9ffS:>

On account of the freight rates; the production

of live stock in southern California, prohibits it.
The Secretary of the Treasury:

^here is a large product-

ion in Los Angeles now, is there ,jot?
Mr. Colt: yes, there is a large packing house established
here.

T might also give you some figures on the produce

business.
The Secretary of the Treasuj-y: y,et me ask before you
start on that, do you have difficulty in financing your
requirements out here, as a rule?
Kr. Colt: At times we do, yes, sir.
The Secretary of the Treasury:

What happened to you this

last fall, for instance?
Mr. Colt:



Well, we had to reduce our stock pretty strong,

G

C. Cf Colt

2729

in order to take care of ourselves a t the time when the
money stringency was on* s#3&-&££ : r ^r
The Secretary of the Treasury:

. Colt:

'M%O^:

f^mf-, fo? * *
$&

At what time was i t most '

T think we felt it worse probably during the
%

fall. ,. ...
. i...

'

The Secretary of the Treasur?/-: ".••-•ovember, for instance?
Mr. Colt: Y e s i

sir

«

]

The Secretary of the Treasury:

'

;
"

What vas the reason for

that?
•Mr. Colt:

There seemed to "be a stringency of money, that

is all.
The Secretary of the Treasury:

The "banks would not loosen

up and finance you, or jrour paper was not good?
ITT. Colt:

The paper was all right, but the money was hard

to get.

. . ; • , _ . .

The Secretary of the Treasury:
Mr. Colt:

They

'VK-:-

They would not loosen up?

take pretty good care of us as a rule.

The Secretary of the Treasury:

To what extent were your

operations reduced by the inability to get credit?
Mr. Colt:

I do >iot think the operations were reduced,

but fortunately for us the fall of the year is the time we



a

c c. coit

-

2730

are liquidating our stock to the greatest extent, and i t
came a t a fortunate time, because our stock ready for the
market went into natural channels, and it enabled us to
turn much of our stock into cash.
The Secretary of the Treasury:

'^''^-':^^l4•'^^•^.^^M^'"
D you have any difficulty
o

in converting the paper you receive for shipment into cash,
or what i s your custom, v/hat credit do you extend to
customers?
Mr* Colt:

xn the packing house lines our terms on fresh

meat are weekly terms, and packing house products 30 days.
The Secretary of the Treasury:
cash?
Mr. Colt:

What i s the discount for

,isio discount, net.

The Secretary of the Treasury:

D you have any difficulty
o

in selling that 30 day paper?
Mr. Colt:

> V

W do .?ot take any paper; i t is just open
e

accounts.
The Secretary of the Treasury:
Mr. Colt:

Tt i s just open accounts?

Yes, s i r .

The Secretary of the Treasury:

W e you borrow against
hn

those shipments, you assign the open accounts, as collateral?
Mr. Colt:



^ e borrow on our straight notes.
T

^

." -'

2731

C. C. Colt

The Secretary of the Treasury:

You are more fortunate

than some other people in that respect, then* ^ ; ; ; •*> v
•• .
'
*. M r . C o l t :

y e s . ,-fs'";fe^•'.^i':;fr"/S-^.:'-'--^:::-V '•'^•'•.fe^K-ii?-':--.^;;^"/4 c i

The Secretary of the Treasury:

i/v*

What ?;ould he the practice

in the banks, yr. H i l l s , in cases '/here you di d not consider
t h a t the maker of the note was sufficiently responsible,
and you had to take c o l l a t e r a l , would you take the assignment of the account against the notes?
•z ?!r. H i l l s :

^ 0 , we would require t h a t such account should

be put into a note which had a certain due date, and take
the note as c o l l a t e r a l .
The Secretary of the Treasury:

You would take the notes

as the account assigned?
never
Mr. Mills: liot we/did such a thing unless a man was about
to go bankrupt.
The Secretary of the Treasury:

• :• .
H w would you do it? T
o

did not quite catch i t .
?5r. Mills:

W would expect that the borrower would put
e

such of those amounts as he thought were good into the shape
of notes due in 30, 60 or 90 days, and we would take those
as collateral.
The Secretary of the Treasury:



T^ effect it is the same

££,-i9?\^

.;•

G

C. C. Colt

2732

thing.
Mr. Hills:

T effect
n

it is the same thing, yes; it i

the customer's note, but it is not an assignment of the
actual a c c o i m t ? ; ^ ^ . ^ ^
The Secretary of the Treasury:

,
of

^

course, the note is
, — „ * . -: .

"better than the open account,
Mr. Mills:

j

Tt is better to take.

The Secretary of the Treasury:

Tt relieves question as

to the account,
• The Secretary of Agriculture:

Have you some other data,

Mr. dolt?
l^r. Colt:

In connection with the produce, which is also

a branch of our business, these figures, T may say, are as
nearly accurate as we can get them, and are compiled from
the s t a t i s t i c s of some of the state officials.

«presh meat

and products sold by this company a:od other organizations
of this state outside of Portland in the year 1913, that
is the distribution outside the City of Portland, aggregated
approximately #9,000,000.

The products received in Portland

and then shipped out, according to the estimat e of t h i s
company, would run approximately 33,000,000.
The Secretary of the Treasury:



Are you speaking of the

0

C. C. Colt

2733

"by-products of your business?
Mr. Colt:

1>JO, of the produce business.

The f i r s t

item i s

packing house products, beef, and poultry i s second.

The

p o u l t r y products received in Portland and shipped out during
the year amounted to $3,000,000; t h a t i s b u t t e r , eggs,
p o u l t r y and cheese,

f'^

'

The Secretary of Agriculture:

Mr. Eurns, we w i l l hear

from you.
ST AOTT©?T OP W. J. EURMS.
The Secretary of Agriculture:

'Vill you give your f u l l

name and occupation.
Mr. Burn si

^. J*. Burns, in the shipping b u s i n e s s , export-

ing and importing.
The Secretary of Agriculture:

You know the problem that

we a r e confronted with, and we are very much i n t e r e s t e d in
knowing the volume and movement of t r a d e , and we would be
glad to have t h e information you can give us,
Mr. Burns:

As I understand, you want information as to

the volume and trend of the wheat business in the Northwest?
The Secretary of Agriculture:
Mr. Eurns:



yes.

T have prepared a map here designating the

0

•

different

V. J. Burns

,

2754

d i s t r i c t s comprising what is called the

Oregon

country, Oregon, Washington, Idaho and a small part of

The Secretary of Agriculture:
Mr. Burn s:

West of che mountains?

Ha s t ot the "maun tain s, an d the W llamet t e
i

Valley, yes, s i r .

O^e portion is designated by a green

stamp as territory which is exclusively tributary to Portland.

Then we come to a territory marked blue, which is

equally tributary to the Sound, but which will, in the event
; of the Columbia River ever being opened to navigation,
tributary to the Columbia River.

Then we come to a further

d i s t r i c t marked in red, which is tributary to both places,
but is beyond the zone of the river.

.

„

The t o t a l production of grain in t h i s Country i s , roughly
speaking, about 2,000,000 tons of wheat, about 300,000 tons
of oats, and 300,000 tons of barley,

T have given i t in

tons, and have also prepared a map in bushels, as i t might
appeal to you more, as you are accustomed to bushels.
O the <|Jiestion of the movement of this wheat market,
n
T would say t h a t of the wheat there is exported on an
average each year about 1,300,000 tons, aod iiie movement to
market of that i s divided about equally, of late years,



G

W. J . Bums

"between the Sound and Portland.

2735
That is very largely

depending on where the markets are to "be found for the
wheat.

At one time i t will go in large volume to the &_%%,

Orient, and at another time i t may go to Europe, and it may
go to California,

''/hen i t comes to supplying the California

and Oregon markets, Portland is generally looked upon as a
more advantageous point to operate from; whereas, when it
goes to the Orient, there are greater f a c i l i t i e s for shipping there, so the movement in that case is apt to go " y
b
the Sound.

'AM?

•* '
•

-

-'"^a..*

T hav e prepared a statement here showing the movement
of the wheat to the different points for the l a s t crop year,
and for the f i r s t part of the present year, which will bear
out what T have said.

If you care, T shall leave this

with you.
The Secretary of Agriculture:

Y e s, we would be very glad

to have that.
yxr. Eurns:

,

.\ • . , •
,

Tn regard to the export of barley, a certain

amount of that goes abroad, and T have prepared a statement
with regard to that also, showing the movement of barley on
an export basis.

?Tost of the barley i s consumed at home,

only a small portion being export barley.
The Secretary of Agriculture:



What has been the growth

G

W J. Burns
.

2736 -T

of t h i s business in the last few years? . :* y rr; .^^ . r. v*r*
Mr. Burns:
few years.
ago,

Well, it has not grown very milch in the last
Tt did take an upward turn four or five years

but has remained stationary since then.

The Secretary of Agriculture:
Mr.Bums:

;

,r

c«>

m&4v&r

O grain?
f

Yes, the tendency of the country i s ':o get into

other l i n e s , and apart altogether from the physical movement
of the grain, T would just say that the business was originated here and was centered here in the beginning, a d then
spread out to the Sound, but i t i s very l a r g e r , you might
say, controlled from here, and this i s where, for instance,
they make up the standards of quality and so on, to govern
the whole business-

j t i s supposed to be the headquarters,

and as being more directljr in touch with the whole d i s t r i c t .
The Secretary of Agriculture:

'•Vhat percentage of i t is

value would you say comes here?

>Jc; • • '•*:&:•r#:-f

Mr. E u r n s :

^ e l l , t h e v a l u e s would be v e r y evenly d i v i d e d ,

much a s t h e q u a n t i t y and v a l u e would c o i n c i d e .
The S e c r e t a r y of A g r i c u l t u r e :
Mr. Burns:

yes,sir.

h e r e t h a n i n t h e Sound.

Eetween h e r e and t h e Sou-:d?

The f i n a n c i n g i s done more l a r g e l y
A good many of t h e houses f i n a n c e

their operations here but direct the shipments to the Sound.



%7?r;*jVW%y»7m2

G

•.•
:

^

J- Bums

,,,

•

2737

;y^j

As a collateral to that bus ix? ess there has grown up here
a large business also in loaning throughout this territory
to farmers,

^hare are several large agencies here repre-

senting foreign capital who have made a "business of making
loans to farmers on long time mortgages. tS)Hlfl ?,,$ %%yt •**
The Secretary of Agriculture:
llrm Burns:

O their farms? , . ^
n

O their farms, yes.
n

It is a "business which

i s supplied mostly with foreign capital, and T should judge
there are $15,000,000 or §20,000,000 altogether represented
here in these different agencies.
The Secretary of the Treasury:

'yhat foreign country

supplies most of that capital?
Mr. Burns:

Most of i t comes from England and Scotland.

There i s also a company which operates from the Netherlands,
which has i t s office in Spokane*

Tna* i s ^n® only other

large company in the "business.
The Secretary of Agriculture:

vThat percentage of the

value of the farms do they lend on?
Mr. Burns:

^)ot over half.

The Secretary of Agriculture:
Mr. Burns:

^ e l l , as much as five years.

The Secretary of the Treasury:



And for what time?

What rate of interest?

;

^

Q

W j . Burns
.
Mr. Eurns:

: ^ 2736

Seven to eight per cent.

• - T h e Secretary of the Treasury:

•,"'*':: Mr. Burns:

.

Is that lawful, under the

quite lawful, for they are glad to get i t .

•— * The Secretary of the Treasury:
the legal rate?

I mean to say, what Is

* X ^
^

2^s# IJ©»

Mr. Burns?

t think 10 per cent is the legal rate.

Mr. K i l l s :
'^

- k\

By contract.

The Secretary of the Treasury:
Mills:

But what is the legal rate?

Six per cent, but ten by contract.

Secretary of Agriculture:

mhere i s no amortization

principle here for longer terms, and an annual payment on
the mortgage?
' Mr. ?;urns:

Ho.

Some are made on annual payments, but T

do not think any loan is made for a longer term than five
years.

'

'

The Secretary of Agriculture:

:

'"~-'•'•"•'' *•• > -

i s that done more largely

here than any of the northwestern c i t i e s , so far as you
know?
Mr. Burns:

Y©S»

T should say so.

The Secretary of Agriculture:

T^a*

mBt

-V shows clearly the

area from which these different communities draw?



G

2739:- v'./H

W. J # Burns

Mr. Burns'

Yes, T think so.

The Secretary of Agriculture:

• ,
To what extent i s t h i s
t

community able financially to take care of this business,
or to r/hat extent do you have to depend on the outside?
Mr. Burns:

There is some dependence put on the outside,

but not very great, T should say.
used to be*

It is less now than it

T^srs are several large banks here which

supply capital, but at times assistance i s obtained from the
outsidej from San _rancisco and sometimes from Europe. Tn
the time of the stringency here we had to get assistance from
Europe.

W actually brought out money here - e

The Secretary of Agriculture:

Ts the greater part of this

lending on mortgages by foreign capital?
Mr. Eurns*

Yes> there i s not very much domestic.

The Secretary of Agriculture:

Eut as to the handling of

the crops themselves, that is handled here locally largely?
Mr. Burns:

To a great extent, T should say now.

The Secretary of the Treasury:

D you have any difficulty
o

in disposing of your commercial b i l l s ?
Mr. Burns:

Bills on whom?

The Secretary of the Treasury:



T mean bills against

G

W. J. Burns

shipments?
?fr. Burns:

' •-••

..-

v^

^--.V"^
.

yes>

or

foreign b i l l s * ^i-

Uo, we can s e l l them here.

The Secretary of the Treasury:

. -

-^

,

Do you s e l l them here or

l:::-:^::-'-:/^:r-,'^^::---:,^ -^^^:^.-:^;>-^z:y^;^^(

in yew York?
Mr. Burns:

274-0

on London?

The Secretary of the Treasury:
Mr. Burns:

.

W s e l l them here or in San -prancisco.
e

The Secretary of the Treasury:

To what extent in San

Francisco, and to what extent here, would you say?
Mr. Burns:

well, we s e l l about half of them in San
- * \*> r *?-;

Francisco.

-

The Secretary of the Treasury:

And half of them here?

Mr, Sums:

'

Yes.

, .,,

The Secretary of the Treasury:

.

Do you get equally good

terms here and in San ^rancisco?
#

Burns:

Yes.

W do not s e l l them in "tfew York,
e

because *rew York does not care to deal with documentary
b i l l s ; they prefer clean b i l l s .
The Secretary of the Treasury:

What i s the time of your

extreme demand h e r e , what part of the year?
?TT. Eurns:

Tn the f a l l , October, November and December.

The Secretary of the Treasury:



And every year do you find

G

W J . Burns
#

difficulty

2 41
7 -

in getting your capital requirements or

r e q u i r e m e n t s ?

Mr, Burns'

.

..*•_:. v~

•;-•••

•,*••••••>:-'•::••..

.••':•%.:••

/:n^-v-

financial

A - i -,•:.:*:".'..

v r - ' - M t.~+

Well, we have to make some arrangements, but

we manage to do i t ; but i t takes a l l v/e can do to do i t , .
The Secretary of t h e Treasury:

You had more difficulty

t h i s f a l l than usual? >-y #*;< %k akyv^y-;*-?^-* *„**;_ •
Mr. Eurns:

Well, T would not say so.

IMO, X would not

say we had more d i f f i c u l t y t h i s f a l l .
The Secretary of Agriculture: Have you any further

facts

you desire to present, Mr. Burns?
"y?^

Eurns:

T think t h a t is a l l .

The Secretary of Agriculture:

W t&aak you very much.
e

Let those maps be f i l e d .
r

#f

v

(The maps were accordingly f i l e d . )

• • - • • • • • • • - -

^ ?;%.?
"'W'-'-^k^'''-''"^','

D:-T OP A, J. DTXO>J.
The Secretary of the Treasury:

~

^<<*'''$>•

% t

t0f£

You may state your

full

name, residence and occupation?
Mr. Dixon:

A. J, Dixon.

T am manager of the Booth-Kelly

Lumber Company, and am speaking in behalf of the timber and
lumber manufacturing
organization.



i n t e r e s t , but not for any particular

G

2742

A. C # Dixon

T would like to introduce this map, which shows ^within
the heavy red lines the timbered area which is more or less
directly connected or tributary to Portland.

The legend

which perhaps T will have to look at for a moment, is
attached.

-T ;
^

The green stickers placed there in a portion of

Idaho, a XL of Oregon and part of southwestern Washington,
represent the timbered area that is entirely tributary to
Portland, in this way, that the lumber not only largely
goes through Portland to reach its ultimate destination,
but the trade relations of the manufacturers are with Portland, and the financing is done through banks that are all
doing business exclusively in Portland.

The red stickers

are pjlacsd in territories where there are competitive
conditions; that is, the rates for the shipment of the
products are the same to ^eattle as they are to Portland,
and of course the shipment of merchandise out.
The Secretary of the Treasury:

Tn the territory of the

green stickers the rates are more favorable to Portland?
Mr. Dixon:

Yes.

The blue is a small portion of south-

western Washington where the financing is done through
Portland, and the shipment of the product is to the sea and
the trade relations are partly with Portland, but open to



t -•••;:i

G

A. C. Dixon

other

t e r r i t o r y .

•

. T -. :j ;/•••• iv«&6

2743
-V1 r > ^ r

$*.-.•.**•.?,

The Secretary t£ the Treasury:

o ^ t t u

That is c m o to Seattle
o mn

as well as Portland, is i t , the territory ipdicated by the
b l u e .

» - ••

•'•** •'•'•

j/rr, Dixon:

- ^ '•'•••-: ; •

H*-*-*'V

^li

4

"^

; ,, '

^ _,

• •>,

. ,;

•-'-. ^ • • • V ^ ^ € f ' v

l^o, not so much so, in that t£ie harbors are

closer to the Portland Harbor and railroad connection is
better via Portland than via Seattle, but since i t has a
<... seaport of i t s own, i t is open to the world.
possesses
The Secretary of the Treasury: Which the largest
_, amount of available timber, Washington or Oregon?
Mr. Dixon:

Oregon has much the larger stand of timber.

As to availability, T do not thir-k T could answer that,
because I have no data on that.

Washington is largely

developed at this time, as to transportation f a c i l i t i e s .
Oregon has the greatest stand of permanent timber.
The lumberman's interest in the matter of financing is
just that they would like to have i t considered, T Ihixsk,
from the standpoint of the size of the lumber industry f i r s t ,
as ranking from fourth to second in the United States in
the value of the product and the number of men employed.
As to our particular location here, we would like to
have you understand the volume of resource compared with



G

A. :• Dixon

2744

the total volume in the United States.

36 per cent of all

the timber in the United States is standing in Oregon,
Washington, Idaho and western Montana.

If J-Tontana is

\% '

eliminated, it makes very little difference, "because only
5 per cent of this $6 per cent is in western Jlontana* #f'f
Prom the statement which I have made relative to the
map, 76 per cent of this timber is tributary to Portland,
that is in the non-competitive territory T have mentioned,
in Oregon, western Idaho a d southwestern Washington,
per cent of this total is in Oregon proper.

48

In other words,

practically 18 per cent of all the timber in the United
States is standing in the State of Oregon.

The county in

which I live, 125 miles south of here, is the heaviest
timbered county in this state, and proba"bly the heaviest
timbered county in the United States. The ultimate conditions as to manufacture in this territory must " e ^ery
b
different from what they are at the present time.

In Oregon,

for instance, we are manufacturing not to exceed five per
cent of the timber that is manufactured in the United
States, while holding 18 per cent of it.

Tn Washington at

this time they a^e manufacturing not to exceed ten per cent
of all the timber that is nanufactured in the United States,



:

G

*

•

;

•

;

'

%

'

r

W

*

'

"

•

•

. A. C Dixon
*

2745

;

while holding very much less than we have in Oregon, but
s t i l l more proportionately than the present condition oftvf
their manufacturing industry indicates.

The prediction i s

freely made "by students of the lumber industry than within
five years from this time, instead of the two states

of

Oregon and Washington manufacturing approximately'" 15 per
cent of the lumber manufactured, they will manufacture at
least 35 P e r cent.

This prediction is based on the de-

creasing timber stand in the south, and on the opening of
new markets to the northwest.
As to the value of the product of this t e r r i t o r y , T
notice from the newspapers that you had that pretty
thoroughly stated to you by the people up north; something
like §150,000,000, considering the auxiliary industries,
t h a t i s , by-products, boxes, sash and doors, interior trim,
furniture, and so forth.
The relations of the lumber manufacturers in the d i s t r i c t
T have referrecto, especially the non-competitive d i s t r i c t ,
are very direct with Portland.

Lumber is largely shipped

through Portland to the east and by cargo tp Pacific Coast
points, especially in California,and to foreign ports.
The Secretary of Agriculture:



To the east, what do you

W^^Wf^Y^^:^'^"^

G

~;^: ^"-"'^• ,'-^^;; -•;•

A. C. Dixon

2746

mean?

;?

Mr. Dixon:

Via the so-called Harriman or Hill l i n e s to

Chicago, and points between the coast and Chicago; some
east of Chicago, but comparatively a small percentage^

The

trade relations follow the lumber very largely, and for the
same reason.

The haul i s a l l down h i l l , and the trade goes

with the traffic i t s e l f .

Our financing a l l over the slats

of Oregon i s done, as you have heard, almost altogether with
Portland.

,-:/:r^,^..-

•— :-;^:.-%:-'v

•''*" The special needs of the lumber men for more elastic
and stronger financial ar^anr/enents are brought out by some
new developments at this time, and by the natural condition
of their t~ade.

A large portion of their sales in t h i s

section to a l l over the United States are made to the
farmers and fanning communities, and long credits are
necessary and are given by the r e t a i l e r s and wholesalers
to a s s i s t in the distribution of the lumber, and of necess i t y are given them ^oy the manufacturer.
The added reason a t t h i s time, by reason of the' opening
of the Canal we expect to reach increased markets and expect
to have the world for our markets, and we \7ill need i n creased financing as we increase these markets and as the



G

A. C. Dixon

2747

distance to market increases,

'

*;''.*

The most important reason in connection with the lumber
industry as differing from other trades or industries, is
the tremendous cost of opening up a lumber business and the
cost of carrying the natural resources, to perpetuate it,
Tt is no unusual tiling for the lumber mail to spend from half
a million to a million and a half dollars building a railroad, providing a way to get to his natural resources or raw
product.

And for that investment and the added investment

in his manufacturing plant, he must of course, have a long
time stand of timber which will last him a number of years.
So that he has especial needs, different and greater than
for the ordinary manufacturing enterprise, where the raw
product is bought from day to day.

He must secure his and

hold it for many many years. The large percentage of the
expenditure of the manufacturer after he

begins operating

is for labcr, payable weekly or certainly at least once a
month, and he needs,

not especially at any particular

season, but all the year around heavy financing.
present time a considerable portion of the

At the

financing for

the lumber interests in the northwest is done in San
Francisco and in the Fiddletfest,Chicago end further east



G

A, C- Dixon

than t h a t , Chicago and Detroit,

2748 £>\<;
Comparatively l i t t l e of i t ,

T should say, i s done in the Northwest, especially the long
time

financing.

-..- -i-..,

;r5::.;_,ur /. •

The Secretary of the Treasury:

- \ - rt ^

.,-••<;;•-,.—• ,...r ;-,' -, w ^ a - t

You do not rely on the

l o c a l markets for that?
lp% Dixon:

.

The larger concerns cannot.

familiar with the smaller ones,

it

financed from Portland?
.-Hiy^ Dixon:

^7

ovrn

T am not so

is because the local

banks at times cannot take care of i t . . .
The Secretary of the Treasury:

*

'

To what extent are you
%Jt

particular company is financed partly

in Portland at times, and partly in San Francisco and partly
east, and that i s true of others, T think, ±f £ A m &&&%'& •-.
>$
The Secretary of the Treasury:

The financing T a
m

•

referring to does not relate to your permanent plant, but
ordinary business transactions and sales.
Mr. Dixon:

^rdinarily in our own local town and Portland

and San ^rancisco*
The Secretary of Agriculture:

To what extent in San

Francisco?
Mr. Dixon:

$0 per cent of our current loans, of the amount

we currently borrow.



A,

:

C, Dixon

The Secretary of the Treasury:
Xfir. Dixon:
The
are

yes, sir.

Tn Sar Prancisco?

.. ^

As a manufacturer, what

the terms upon which you s e l l lumber to the wholesaler

llr. Dixo:a:

-~\^ :

w

,--. _ \ _ -

60 days are the maximum terms*

The Secretary of the Treasury:
or sell on open account?
Mr. D i x o n :

cash?

y'-. •'•

?fr. DixOii:

*

„, ±> "
•
>
-"

;s
*~

^/hat is the discount for

-:^y^&^'^i??!;-^.

:• ,

T o per cent, 10 or 15 days; the terms vary.
w

The Secretary of the Treasury:

D most of them avail
o

themselves of the discount?
Hr. T)ixon:

vi

D you take uotes for i t ,
o

On open a c c o u n t * '

The Secretary of the Treasury:

not.

..

.,....«

Secretary of the Treasury:

or retailer?

•

' 2749 ' ,.
*

^r^-• • •.-

Tt depends on the year.

^

;v?:x

Last year they did

o^dkiarily T think b e t t e r than 60 per cent of our

accounts are discounted.
The Secretary of the Treasury:

7/hen you discount these

accounts, how do you do i t , do you assign the accounts or
f i r g t put them in the form of notes? Mr. Dixon, and then




W

/

A, Co Dizcon

;

27J0

pledge those notes as c o l l a t e r a l to your 07m notes?
MTo Bixon:

Ey di sscunt I imicretand you ir-ean fSsoount

on the iirvoice^
The Secretary of the Treasury:

.

,,

I ms speaking of that

as "between the purchaser and yourself, "but I mean when he
does not take advantage of the discount and takes advantage
and
of the 60 days time, and you wajit to realize jL discount
those accounts» what do you do? ; : £.'. J
Mro Dixon:

v

|;

s

W take his note and endorse it and take it
e

to the "bank5 or "borrow on a straight note of our own.




A. C. Dixon
The Secretary cf the Treasury:

'

y,.2751

T7hsre you cannot borrow or

a straight note cf your own ysu put tha account of the purchaser in the form of a note?
Mr

P i x o n :

:

Y e s .

'•'••'••'• X '

'
:

The Secretary cf the Treasury:
that or hypothecate i t ? £&r^'b£-*
Mr IHxon:

Yes.

.'. \

* l :- '<

;->> . , . J

v

vfp # % •

And you e i t h e r borrow on
•T

. ',;;_, V

A good many sel£ with a draft and b i l l of
l /s

lading attached, to the bank«>? ^ir* i^z&'*,'•
Shn Secretary cf Agriculture :

'

You gave the amount of

business here as about ^150,00Q,OOO?
Mr Dixon:

' •. -

.

,

Yes? in the Oregon and Washington f i e l d .

The Secretary of the Treasury:

To what extent are you abl»

to discount such b i l l s as you ha"va described, i n Portland?
Mr Dixon:

I think there is no limit for the discounting o:

those b i l l s i n Portland.
here,.

[ h limitation
Oo

Ve can disccunt a l l we can bring
d

scmetimss in "borrOTTicg on straight

notas i s the amount the banks are allowed t o lend to some
one indiTa dual.
The Secretary of the Treasiiry:

Did you experience

difficu

last f a l l i n fAnanoi»g your own requirements?
Mr Dixan:

Gur ovv'n company did not, for the reason we made

some sales of tiicbor*




But asaxiy ethers did.

B8

A. G, Dixon

MK9

Ths Secretary of the Treasury: /What extent, may 3
1
did the Portland ba2ilk:s ava&l thamselves of the government
deposits

l a s t

Mr Mil?xs:

yeas?

- ' ' -I ':••.• \ • ..-: •;:••> ', ;->•;

I n our own case cur "bank had $550,000

and returned %t i n two months.

:>:%** * *-• •*-*-•»*- %&tej£q#r^~

5he Secretary of t h e Treasury:
.-'

•

...

Did t h a t help t h e s i t u a t i o i

Yes, sentimentally very
•y-:.;^;\.^;-:i-,^.

6

?;'

The Secretary of Agriculture:

1

- . •'

Y e s . I ®& that

^ri"-. \'••" T.-'X-

and

Will you f i l e your mapBdajba

with usy Mr Ittxon? V v^T/^fecffUa
Us H i x o n :

'"

£hare were ^350y0QQ a l l o t t e d to u s , and we took

t h e whole ainonnt.

Mx M i l l s :

l-^ey^cjt^

„&&%.

$?*%; fe

p$

(The m?.ps were accordingly filed*) i'j^.'i..
or Jo SUCH.

The Secretary of the Treasury:

"

"'

Give us your f u l l name,

address and occupation,, Mr Smith. * ,^^
;
Mr Smith:

^ay Smith, Portland, manager af Marshall Wolls

Hareware Company •
The Secretary of the Treasury:

"-'^-IT^^H^.

^ '

Give us some idea of the

extent nft. and distribution of the wholesale hardware "business
3 understand you are to sp9ak of that.
Mr Smith: Yes.
The Secretary of Agriculture:




Are those duplicate maps

'
-

...

iT> 9*"- '* J
•" 7 - ^ 5 ' ^ v

.

'
"
'•''.

which you have there?
M Smith:
r

Eo.

^ 7 £\ ^
**^ *•

; ^

3 hav3 ascninod that in considering "this

question for the northwest that the t e r r i t o r i e s of Soattloand Portland are going to be of the most interest.
tig maps)
i a conside-fing this northwestern territory, from a
jebbing standpoint, 7L have tried to divide that-territory
two ways:

one between Portland and Seattle, showing the

t e r r i t o r i e s t o which the rat3S of Tort land and Seattle, are
more favorable than from any other Jobbing pMnt; In anothc
wry including the t e r r i t o r i e s of Everett and Bellingham
and Tacoma.

And on that basis with the- two comparisons I

hava. figures* showing the population, the total agricultural
products and tho timber.

'

.:.' '" . '

Tho Secretary of the Treasury:

W have got that* You nar
e

not reoount that, but what is the sphere of your trade Influence, your distributing influence frcin Portland^ so far
as hardware is concerned!?
Smith:

• - -•

ff

^^

>:-'n &*•?"

*
"

Well, putting i t individually, speaking of oui

o n concern, we distribute a l l the way from Bakarsfield to
w.
Some, AJLaska, but we da not oal2 that a l l our natural terr i t cry*




Jay Smith
^lis Secretary cf the UTreestiry:

3 inea:a-7fte1^ouLd

co-2?2Idar yrar natural sphere of trade An£luanoe bare,
e you are s
Mr arclth: / i J J ths state of

*

az^atoxit a

Gjiaz'tQ:* o£

Secretary of the 3?rss?3Taryj
and that part of
Mr Smith:

You do not go- beyond

TCashiugton?

'

'- ::

7"7es, we d,o9 but 3 regard that as the t e r r i t o ;

&a whiob we haira an advantage.
of Washington.

W cover the e n t i r e state
3

W keep fcur or ff.ve men In S e a t t l e .
e

The Secretary of the Treasury-:

But you have an advanta;

In the whole cf Greg en and part of Washington?
Mr S m i t h s

Yes.

.-••-X"'-..;^ ;.;±<\ ^/-/''. ~ -'t^^

The Secretary of the Treasury:
Montana?

-

Hx Smith;.
as Esdiee.

—

Eow abcut Idaho and
'"v; -" , ; '•-

^ .

Ve run into Idaho as fax

3n ths Spokane t e r r i t o r y W do not go at a l l ,
9

as we have 1 houeo a t Spokane ..
She Secretary of ths Crsagury:
ifornia?
Mr Smith:

^':^h:^ljryW')iM'

i:'V*^v*i
Eow abcut northern Cal-

•:/.:
W have abcut 10 p3r cent of our tra-vellng
e

forcje who are ,4a Gallf-OJ^aia and"Alaska*.^EO per--cant are
An the-sta^>-of Oregon.




r

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4

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•

•

•

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B5

-

£

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'

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•

'

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'• • ' •

' • •' ' • '

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•

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•

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'

,

;

•

Jay Smith

, _

. • • , . • • ; . • ' • • • • • . . . . ; • •

2755

The Secretary cf the Treasury:

What is your annual

turn-ever?
Mr Smith:

You mean new the volume of "business? The

volume of "business into our capital?
The Secretary of the Treasury:
in a year.
Mr Smi*h:

.
•
Two and a half tiaras. ;

lbs Secretary of the Treasury:
Dean?

Yes9 th3 t o t a l "busines*

a

• ;^,..

Yes, "but what does that

1 do not know ycur capital-.

Kx Smith:

:

, ' '•

Our t o t a l sales of the concern that I repre-

sent s as a whole, aro a*boat between $14,000,000. and
$15,000,000f but in t h i s t e r r i t o r y here our sales would
ran "between three and four Jiillion dollars.
The Secretary of the Treasury: TChere do you do the
rest cf your "business?
MrvSmth:

"

"

,.

,

Duluth, Winnopeg^ E&nontcn and Spokane.

- The Secretary cf the Treasury:

You have much larger sa

outside of t h i s practically exclusive t e r r i t o r y than you
have in it?"
Mr Smith:
stood.




,^^
Well, perhaps the situation i s not under-

The headquarters of cur concern are at Duluth.

Tho Secretary of the Treasury:

This is a "branch, I

W..

B6

Jgy Smith
/ • '

• •

•'

•

•

•'.:•••."•

r,.

'•'{

275€

,:..:;••...•:;-'..:;-.

; ;

::.••.!:

•'; : > f

: ^ l ^ T -

;

i

V . ^ .
• ' .-: v

Ur S-jQith:

5!his i s a 'branch, and cur "business i s ' * --v--;:V.

finaiicad a t Diiluth.

"'

The S e c r e t a r y of the Traas-cry:

;: -

Speaking of t h i s "branch

a l o n e , what i s your t o t a l "busira s s h a r e , what dO3s i t
::j/ ;

a g g r e g a t e a yoar?
f

-

Mr Snith:

.

-

.

.

.

.

•••

j

'

•

•

\ •- -/'•
'

•

•

•

•

Duluth?

Mr Smith:

•

-

'

-

'

'

Between thi'ee and four zsillion dollars .

The Secretary of the Treasury:
from

•

"
YesT"'^

2t is financed wholly
-

'

*"

She Secretary of the Treasury:

^^*^

Th.3 local "branch here

dees not havo t a worry about that? „
M* Smith:
i

Let at allo

\"*V

T'ha Secretary of the Treasury:
fortahle at ti»Eies»
Ma: Smith:

r

You mast feel very o m
o *
-" ~
-

I 5ael very aaish so*

2he Secretary of the Treasury:

3?ha3a tranches are not

such "bad things a i t e r a l l , are they? ;
Tha Sacratary of Agr-jicult-are:

r.^..;:.^,:::~

i r e you one of the largo :

dlstr^to.tAng hcrcuaes i n this section? _
.
M Ss&th:
x

I think i^i o^or Z^tnQ we are the lazgest.

5!ha Secretary of the Eraasury:

Ar.i t o what extent do

you ooone 4n ccsnpetitiOB wXth tha Sm o Q Hardware Company
i ma S







B7

Jay Smith

^

2757

of St Louis, is that a competitor in this d i s t r i c t ?
Llr Smith:

Hardly.

E&ey n&vQ some representatives

out here, "but they can simply touch the high spots, and
are net raally competitors.

The Secretary of the Treasury:
he:re? • ^
•

.

.

. •,:::.:• •%

They have no branch on

<4i......,,

^t Mr Smith: No*
The Secretary of the Treasury:

That w i l l do t Mr Smith,

and if you will f i l e any figures you have as an exhibit
to your testimony, together with those maps, we shall
" a obliged..'; H';;'•?'.....•..-... . ^*:- y:i/
b

;: :- - - : •.:-V:;-^; '

&*.,(!Phe maps produced "by Mr Smith were f i l e d . )
^ Tha Secretary of Agriculture:
ing for the bank?

Have you anyona Is r e spe

You represent the clearing house and

the bankers here i n t h e statement that for the present yc
think the headquarters bank should be at San Francisco,
I£r Mills?
Mr M i l l s :

...

. . ..+

-•

Ko7 that was my personal opinion; 2 was not

instructed t o represent them.
The Secretary of the Treasury:
on t h a t ?
Ur H i l l s :

What would t h e i r views
^

3 think the majority wou]iL agree v/it-h me,

V?>

B8

'

S ^;« >

Jay Smith

2758

although 2 have nsyer canvassed the s i t u a t i o n *
3 he S e c r e t a r y of t h e t r e a s u r y :
?

3 t h i n k i t might be wo]

to have seine of those gentlemen hare t h i s
The S e c r e t a r y of A g r i c u l t u r e :

.,_..„,.*,.',„

afternoon*

W should "be glad t o
e

-have a core general expression of views en that
Mr M i l l s :

Weald you l i k e t o have cue now who i s Jnere?

She S e c r e t a r y of A g r i c u l t u r e :
1

Mr Oookingban:

sentative

question

Yes.,

,.,, j : _ .-&•£••.

2 wou].d suggsst t h a t you oalA a r e p r e -

of t h e A g r i c u l t u r a l Jlnplenent t r a d e .
v f

3- STAEBMBIiT OP H. Y/. 12ITCEEIL..
5?he S^ecratary of the t r e a s u r y :
„ address and ocoupaticno;
Mr Mlc o he 1 1 :
:f

-- :"

Yen are president of i t

Yice p r e s i d e n t . 'r^::'-:r:''•.*:• •:. ^V-'-:-•

!l?he S e c r e t a r y of the ^.rsasury:
an p r e s i d e n t .

You nay s t a t e yemr f u l l

H- W. Mi t a ha JU , Hit one 13-Ie wi s Har dwar e

She S e c r e t a r y of t h e Ereasizry:
MC MitchalTL:
3

'^ ^ivJ

You are dorai on t h i s

You nay give us some idea of your "business

and w.hnt sp.bere your t r a d e influence extends over^ i f
you p l e a s e .




Mr M i t c h e l l :

li

T/s "be^-ieve t h a t the business of the

lW

B9

•*

W?^^f

S759

E. \U M i t c h e l l

a g r i c u l t u r a l iiapleaent (ftstrifcution in a gifvm t e r r i t o r y
properly r e f l e c t s the natural trade center of the * &•,;. :
* ••••*<
' '
agr^. cultiiral cr producing section.
a gift cultttr al implement
west,

;

Portland is the

trade cent or of the Pacific EortL

embracing tba s t a t e s of Oregon end Washrmgtoa,

a l l cf Icrth-arn Idaho acd Southwestern 2&aho i s too well
known t o those cf us who have lived here y t o require stating,

lo'sntigtaxrtiate t h i s F3tatera3nt, 3 w i l l state th3

faot that the entire "business i n t h i s t e r r i t o r y of such
concerns as the John Da ere Plow Company, the Mollne Plo;7
Company, the Oliver PIOT? Company, the Parren-Orendcrf 'Plc.
Companys which are a l l concerns which operate throughout
the e n t i r e United States,, and many of them throughout the
and any number of l o c a l l y ownad jofbing houses, as
as threshing machine companies, operate in t h i s terr i t c r y 0 operate from here.

$his i s t h e i r headquarters.

The Snt 3 m a t r o n a l Ear Y sirs r Company harAles from hare
e
a l l of the s t a t e cf Oregon and a l l of the s t a t e of Washington excepting t h a t portion north and east of the Snake
Blver and the Cclumoia Elver.
£he aggregate volume of t h i s business handled through
JForfcland w i l l amount i a rcsnd numoers t o §8,0Q.Q,00Q >
G




B1Q

E. 1« M i t o b e m

$10,000,000 p e r annum.

' '

- -

2760

A3 compared t o t h i s , t h e implensni

"business done t h r o u g h a l l Puget Sound c i t i e s w i l l n o t
exceed, and I doubt i f i t w i l l e q u a l , five p e r cent of
these f i g u r a s . | ; ^ . V : ^ - * W ^
?

- - ^ !rt*W&>. 'V*%Mb$&.

As a g e n e r a l t h i n g , t h e r e i s no e x i s t i n g c o n d i t i o n xfck

without a well defined reason for i t .
this condition.

This is true of

There is a good and sufficient reason why

this i s so, and I will endeavor to put i t "briefly in this
way*

Grant, to "begin with, that the odean route, particu-

larly with the early opening of the Pamns Canal, eliminate
from consideration a l l points in the t e r r i t o r y mentioned
except tha Paoific Coast seaboard points, insuring the
minimum transportation charge on commodities shipped from
the eastern portions of our o n co-scntry and elsewhere,
w
and outside of t h i s t e r r i t o r y , we have as a competitor
in this fiald only Puget Sound points, and i t matters not
which one of the Puget 3otmd points might " e used for
b
cornxarison, the results would be the same.

Assume, for

illustration^ that you are about to engage in the d i s tribution of cur commodity, or any other commodity through
out the Pacific northwest or in the scope of country lying
west of the Reeky Liountains to the Pacific Ocean, and from




H, ',,* Mitchell

.

27£1

the British lime on th9 nortli to the northern line of
California and Kevada on the south.

Assume that you

cast

up "before yon and analyse the situation something a f t e r
t h i s fashion:

we want t o locate at cne place and one plac

only from which w can handle the largest percentage of
e
this t e r r i t o r y t o the "best a&vantags and the smallest percentage a t the 1. ast posoihle disadvantage.

If we locate >

Portland we can handle to t a t t e r advantage than to any othPacific Coast seaboard point

9

the entire state of Oregon,

a l l of southern Sdaho, than could " e done from any Pu?get
b
Sound port —

"

The Secretary of the Treasury:

Hew, we would like to

have some facts and figures p/bout your trade and your o n
w
operations..
Mr Mitchell:

W operate in t h i s whole t e r r i t o r y .
o

The Secretary of the Treasury:
us some f i b r e s
Mr Mitchell:

Yes.

Eow, can you give

as to the amount of "business you do?
Vc you m an ourselves?
a

Th.9 Secretary of. the Treasury:

Yes, showing how i t

is

distributed, a l l over these s t a t e s .
Mr Mitchell:

^e do sometMng like "between a million and

a million and a half.




The Secretary of the Treasury:
Mr Mite b a l l :

Agricultural implements and vehicles*

Ths Secretary cf the Treasury-.
Mr Mitchell:

All kinds? g *
&

Yes. y'zM-vw- ^rc- vHh&a.?,

The Secrotary of the Treasury:
Mr Mitcheli:

What class of implement

-• '-

«AT-

All kinds of implements-

Yes s i r s^~. a%i- t'm &&?:fmM•£ ',

Tpz Secretary of the Treasury,

Where is your chief

d i s t r i b u t i o n , 3 mean where is most of i t distributed, in
Oregon, or —
Mr Mitotell:

-:r :-:..--•-,*••
I t is distributed through this entire

t e r r i t o r y 2 have ;just referred t o .
The Secretary of the Treasury:

'

.-... .:. : :
Where is the largest

percentage distributed, In what s t a t e ?
Mr Mitchell:

Prom here?

The Secrotary cf the Treasury:
Mr MitchellE

YeS«

Do ycu mean that that-which i s shipped In

here and shipped oat of here —
The Secretary of the Treasury:

" Q f where do you shi"?
Z S

year stuff mostly* where do- you s e l l ?
Mr -Mitohall:

The largest percentage..--of that which i s

shipped In here and out of hare i s shipped into Oregca,
I presume*




H I/. Mite hell
»

. *

The Secretary of the Treasury:

£763

What peroeatag3 of ths

t o t a l business is done -m tbe state of Oregon? ; ' K
*
Mr Mitchell:

I could not say offhand.

Ve maintain a
?

branch house in Spokane which operates in the territory
north of the Snake- River and the Columbia Biyerc just es
"the 2nte rnaticnal Harve s t s r doe s.




The Secretary of the treasury:

_,.., _,...
That would seem to inrt

that Portland would not be the chief distributing center
for the whole t e r r i t o r y a
Mr Mitchell:

Absolutely the only point a t which you

can get the goods in at. tha lewest rates and distribute
them out t o the best advantage4

In other words, stock

hero i s arailable for a l l points to the least
disadvantage.

possible

3 do not mean to say that a l l stock is

available hare for distribution to a l l othar points to
better advatnage than i t i s from those other points to
certain i?3ii6diate d i s t r i c t s .

For instance —

The Secretary cf the Treasury-

You maintain a branch

at Spokane becai'.se you can get a better distribution
fcr part of your t e r r i t o r y from there?
Mr Mitchell:

Yes.

And if w could get a l l our stuff
o

A there we could do a l l the business for that t e r r i t o r y
n
i n there 9 Taut there are times when we zmst supply tham

• ' "H. \U Mitels U
L

. ^ "'•' -' \

with something they have not in stock and we ha79 to
f i l l them up with a mixed «ar.

- \

Tha Secretary of the Treasury:

. ,\, ±. • ••.....;...^;5g-

What percenter of

your business is done from Spokane and what from Portland
Mr Mitchell:

There is a great deal of "business, and ir

fact a l l of us who operate in this t e r r i t o r y , who ship a
great deal of our business

;v

,

direct from the factory t

the dealer, because ha buys in quantities which will admit
of either straight or mteed carload shipments —
The Secretary of the treasury:

Where the information

yon could give us would be of some ralte would be t o show
on a map the distribution of your business ovex* these stat
not only the amount you distribute from Portland and Spok£
but also what you distribute direct from the factory upo:
order.

If yo*a could give us such a map, i t would be use-

ful,
Mr Mitchsll:

W cannot do that very well.
G

The Secretary of the Treasury:
Mr Mitchell:

W y not?
h

One year they may take the stock froni. the

factory and another year they may take a raized car from
here*
5!he Secretary of the Treasxiry:
differonce.




That does not make anj

W would like t o know what your operations ar
e

G15

,

^ H. \t\

tfitoboll

•

2765

f o r QVXJ one y o c r , so v/o s a y know t h e sphere of your trade

Mr Mitchell:

!Phoy may order a oarlcad from tha factory

this spring and some shorts out 3f here later.->!«£, ^ " '
The Secretary of Agriculture:

What i s the significance

of what you. are presontang? * * * ? ^ *'*ti'A-)i«^jB^ts * %
*21
- M Mitctisll:
x
of operations.

lfo sixow t i n t Portland is the natui-al baso
^

w

*+P* °^fesJf$i&: - " " " "

The Secretary of the Treasui-o/f

But you cannct show i t \T.

omt figures.
Mr Mitohell:

Yasr you can, ly "the geography and topogra:

of t he c ount ry.

"

Tho Secretary of the Treasury:

Excuse u s , tut we know t."

kind of figures we prefer to co.-vwitnee us, and arguments of
that character would not be convincing without something t^
support them.
Mr Mitctell:

V/ell, you ?;ould h©ve to knov; the country.

The Secretary of tha Treasury:

W should like to have V
e

i f you will " e good enough to take a map and give us that
b
kind of data, w will be giad t o htt^e i t .
o
lir Mitchell:

Well, i t will vary*

The Secret ary of Agriculture:

Hara i s the point. You arc

stating this i s the distributing canter and then you are
stating i t i s not distributed from .hero but from tha



B14

Ho '//..Mitchell

fact cries a

;<r

Mr Mitchell;
v

t

^

L-—.

.

P

•. ^ w

t

I t i s the point of operation, and it is

the point at which the principal stocks are carried.

Just

as you are going to make a reserve bank at a point wi^re a]
^ o t h e r s will* b a s e on i t ?-. r^*-~ .-•*»'; .••T. .T" - . - v - -• -. ./;. ^ ; ;?;^

* The Secretary cf the Treasury:

W understand.
e

St is a

perfectly simple proposition, and if you know what we want,
we would like to ha-ve this character of data.

W would like
e

to have you take one year, no natter wtat year, and t e l l us
what the distribution was, not enly from Portland, acd also
Spokane, but from data from the e a s t .
Mr Mite 1B 11:

There may be a good deal that w distribute
e

from Spokane which we send there fron here.
The Secretary of the Treasury:
difference.
order.

That does not make any

W aX\ knew i t a l l proceeds fron Portland on
e

You direst the namofaoturer whs re to send it and

direct the Spokane branch*
Mr Mitehall:

You us an as to ry operations alone, or as

to a l l the houses?
The Secretary of the Treasury:
i t from a l l the nooses.
Mr Mitchell;




By what time?

Ye would ba glad to have
/

2767

H. w.
The Secretary of tha Treasury:

Ir? we could have i t

vitbin two weeks i t would ba s u f f i c i e n t . " '
.

...
•

'

'i'1

Mr Mitchell:

•

.

.

.

._ . .
.

.

.

'-•-£:•-

'

••

I friess uS can 'get

The Secretary of the Troasury:

,
•

"

i t ' ^ W f
You soe wo get a picture

of the distribution of the trade influence of these houses
in Portland by that means, and that cf courso is instructive.
If you can sand that to the Committee by the 15th of February
in Washington, i t w i l l ba attached as an exhibit to your
testimony.
TCho is next?
Er Cookingham:

W suggest the f r u i t
e

The Secretary of the Treasury.
of that at Ssattlo .

Industry.

Y/ell, wo had a good deal

Is he t o speak for those s t a t e s , covcrii.

the entire states?
Llr Cookinghaxn:

Yes.

The Secretary of the Treasury:

Well, we will hear from

Mr HalboeiEf.
STjffiBMEUT OF C. A. MALBOEUF.
Tho S e c r e t a r y of the Treasury:

YO~J may s t a t e yonr f u l l nan

residence and occupation.
Mr Molboeuf:



Charles A. Malboouf; I am a f r u i t

broker

B18

; -i

Cc L. M

ed at ^Portland, ar.1 2 a presenting this matter on
m
"behalf of ths Chamber of Gsmerce . /}-©£.

'^i^M^^'

Z would like tc submit t h i s map which shews
the territory covering tho fruit

. " y lagen
o

acreage which is excliisiTel

Icsal to Portland, that which is competitive with Portland
with 6oixal rate and located on or adjacent t o water courses,
othar t e r r i t o r y which Is tributary to

Pcrtland._f±aasciainiy,

and Gtil^i f-urthor t e r r i t o r y which is t r i t u t a r y to Portland
perhaps not financially "btit " y oonmon rate application.
b

The

legd.nil there shews tha exclusive territory in groen, the
wator t e r r i t o r y in "blr.e, and the outside t e r r i t o r y not t r i butary to Portland in red, the blue and red c m o to Portia'
o mn
away from water competition and blue and red and green i s "er
ff
southern part of Idaho, so remote from Portland as to be har.
considered in i t s territory^ Based on as near official s t a t i :
tics

as we can gather, the total fruit

acreage in tha three

ncrthwesto rn stats s *
—
The Secretary of tha Treasuryz

I t will net be neoessary t-

read that, because w cannot caxry the figures so long, of
e
course, and yo-i liave it a l l in a compact statement there, ha
you not?
M Ilalboauf:
r




' ..
Yes, either on that legend or oa another

Co A. lialboeudf.

statement which

•

„ 276C.

$, will submit.

The Secretary of the Treasury:

So, if you will just

summarize "briefly the value of the industry and how much
of i t is handled financially from Portland, w would like \
e
^ : h ' * . . ^ : ^ ' ..v,-? -"./7.;:>v;" % ': ~r'ri::--.-^-;.:^^x:

have t h a t .
Mr Malbaeuf:

Of tha t o t a l of 60o,00Q? acres in the north-

west , Portland's t e r r i t o r y includes a t o t a l of 321f0Ga. Thai s ap]?roxinately the relative acreage of the t o t a l , which i
financed and handled commercially from Portland, is 60 per
oe n t .
The Secretary of the Treasury:

What does that represent

money value for the l a s t year?
Mr Maiboeuf:

As to production?

Secretary of the Treasury:
Malboeuf:

Yes.

Production for the last year was approximate

ten million dollars*
The Secretary of the Treasury:

That was what was handled

at Portland?
Mr Malbceuf:

Uo, i t was handled in various ways. That

includes the t o t a l money value cf the orcp
territory.

There has not been —

The Secretary of the; Treasury:
as res you referred to




out of the Port:

That is out of tha 300,00C

as being tributary to Portland?

B2Q

c . k.

\ 15r Ma^bCGu£:

Malboouf.

Yes.

' ; "; :

.if

_ The Secretary cf the Treasury:

HY
O?

much of that was

financed hare in Portland, would you say? ,
_, Mr Malboeuf:

f

Well, I would have to refer to the banks rs

to the financing of the crop.

In a general way only, I es-

say that zn the "bulls of that t e r r i t o r y the most of the f i r
c:ing is done by the local bank in eaob different
The Secretary of the Treasury:
difSorent

district.

H w do you mean in each
o

district?

Mr Maiboouf:

For instance, in the d i s t r i c t of Hood Rive

the Ecod River Bank financed the growers direot 5 and in
Wonatohea and Yakima and sa forth.
The Secretary of the Treasury:

Have you any idea how m
u

of that business cones t o Portland and i s financed here ir
Portland, 1 mean of the crop i t s e l f ?
Mr Halboeuf:

M general understanding of the situation
y

thai; in the t e r r i t o r y served

by what we call exclusive

t e r r i t o r y , also a large portion of the water oonpatitive
t e r r i t o r y in the state of Y/ashingtcxQe and the western part
of scut hern X&aho, i t is finaioed from Portland.
Ete Secretary of the UTrsaeury:

What would you say that

represents i n dollars and eents, about, as an estimate?




•%.f
•

"

•

.

-

.

;

•

.

•

.

Mr Malbceuf:
the

y e a r

C - Ac

2x913.

'

:

v

ApproxAmat 3 l y $5,00Q, 00a 1 ast yg ar , for
., \ . / ; ' ' •

•. •
•

... • •.

v

T . Sacretary of the Treasury:
bQ

•

;

', " • ^ . • " - . ; \ ^ v g ; i . . .

lake your nous a, for in-

stance, ha? Each of that "biislness v:as handle d "by yo-ar house
to give us an idea?
..-.,Mr llalhoauf:

4

^k-3xSa&::W^..

2 ara not with any particular house.

The Secretary of the Treasurer:
age business.
Mr lialboeuf:

.-.•^afr.

.

.

2 thought you had a "broke
^ -

3 am an independent broker, merely buying i r

the country for outside acaountfi.
The Secretary of the Treasury:

How. tho volume of busines'

dona, for instance, through your brokerage house or by you
would be what?
Mr MalbO8uf:

Approximately a t o t a l cf 125 cars, which won.

mean cHose to ^IOOJOOOThe Secretary of tlio Treasury:

And that is handled purely

on a commiss^ 0n "basis ; I TTQsume *i
Mr Malboeuf:

"^as s i r .

Uor as far as I am concerned i t is

but i t was purchased either for. aash. or on cons i grim ant from
the grower.
The Secretary of the Treasury:

To what extant wuere they

purchases and to what extent were they consignments?




S

•

x

C. A. Malboe'if.

f
•

Mr Malfcoe-a£:

•

•

•

.

•

•

,

.

.

-

•

•

•

•

•

"

•

•

"

*

'

'-

"

2772
'••&)

The purchasers were about one-haSf of the

q u a n t i t 7 1 m a n t i one d . - ^, | .^,• ^

:

r

^he Secretary of t h e Treasury;

•..• • :-eiv' ^

^'•^•:i^^Si0-

^

now do you finance t h a t ,

with the l o c a l bank? • '....,.,•,; ,.' ,. . ( v:- ..-•. -.V,. ' .•l:>i
Mr lylalboeuf:

Yes, with t h e local bank*

That was paid c

to t h e grcwer through Portland and the check drawn from
Portland.
The Sgcretary of the Treasury:

Ho\7 do you finance that

i n t u r n with the local bank hero, what s e c u r i t y do they r e quire?

Fruit i s such a perishable thing that 2 would lik-'

t o g e t an idea of tha wcy these transactions are handled an
Mr Malbca-af:

3n buying this fruit the Portland man on

whose account I purchased the fruit was tha diroot purchaser fron tha grcwer3 and he paid the grower ir* oash and
ha shipped it abroad*
The Secretary of the Treasury:

And those foreign bills :•

suppose are handled by the banks hare?
Mr Malboauf:

'-

^n al3 cas^s.

The Secretary of Agr&culture:

V^hich handles the greater

part of this fruit business, Portland or Seattle, in this
section?




B

C. A* Maiboeu* .
Mr Mal"bceuf *

2773 ; .

Based on financial conditions at the present

tisce, Portland has handled the greatest part of i t .

Com-

m r<sdal conditions nust " e measured " y altogether
a
b
b

different

conditions niiiasdE than these which regulate other industries.,
for instance grain; "because fruit i s not drawn here , "but pas*
av/ay from here, w.hethsr through Portland cr otherwise.

Portl

has actually "become a center on acccunt cf the growing indust
in t h i s section, and is today the headquarters o£ one of
tho largest selllr>.g agencies in tha Northvrest*

The second

l a r g e s t , a t Spokane at the present tima, will make this i t s
headquarters, "beginning 7/ith the: season5s "business, to cavar
the t e r r i t o r y tributary to Portland.

-

.

V A•

The Secretary of the Treasury:

W thank
e

^

!

The Secretary of the Txaasury:

Mr Hoggins, will you state

your nama , residence and oocupafcion»*..<rar ta&si :•?*'* is *
MT Eugglns:

iiaos T. BuggiiZiB; genaral nanager of Fleischne:

Mayer Company, whale sale dry goods.'
The S-ssrstary cf the Eraasizry:
l&r E3igg;\ns:
think.




"^gjLW %h»

Sow old i s your house?

The present house Is about •— sin09 1876, 3
'{

;

B

te03

T. Hoggins

The Secretary of tha Treasury:

2774
H w long has it been in
o

"business in Port Ian 4, sinca that tine?
Mr E»ig£ins :

,

Since that time.

The Secretary of the Treasury:

(Jive us some idea cf ths

trade influence of your house, or what t e r r i t o r y i s cove re
" y i t s operations.
b
Mr H-iggfcis:

:

Oar hoase is the only oxclusive wholesale
^ve cover the states of

hcusa An the city of Portland.

Oregon^ ?7ashington3 Idaho and as far east as Boise, Morthe:r
California, Alaska and the Hawaiian Islands. • ;-....' : -:.:.-:'/
The Secretary of the Treasury:
California?

Mr E»2Sgin?3:

.v-^v;-c/:..-• .

..••-• - r

•
•

.

•

•;, ; > . ; ; • , ; , . . : • / .

•':.

The S e c r e t a r y of t h e T r e a s u r y :
est p a r t of y o u r "business?

state

.

Y/e go down perhaps a s f a r a s Red Bluff and

i n t o Hinnboldt CoTxnty.

Mr Huggins:

H w f a r do yo'j go into
o

-. •• .- .-• :^;'

Whare do you do t h e great

;; r-•

;

o ^

fhe g r e a t e r p a r t of cur "business i s i n t h e

o f O r e g o n * - 1 ^ - ^ -: -'••<- -:-^- ---•''',':,.;,

The Secretary cf the Treasury*

\.

"

::

'

'^

Can yciL give the percen-

tages i n those different s t a t e s of your business?
Mr H&ggins:

2n Oregozig we do 30 per cent, in Washington

32 per cent, and in the ethers 8 per cent.




B

A, I . Kuggins

277E

Ths S o c r e t a r y cf t b s T r e a s u r y :

How much c o m p e t i t i o n

haTw you from S e a t t l e i n y o u r p a r t i c u l a r
Mr EuggAns:

line?
••':"-

W e l l , we have c o m p e t i t i o n p a r t i c u l a r l y

i n V/sstern Y/ashlngtoB; and t o a very sVight extent

in

Oregon.

~^*^?

The S e c r e t a r y cf. t h s T r e a s u r y :

Hov; much competiti on hai
;

you from San Prancesco?
Mr Euggins:

• ~<r—^,

Prom San Prano^nco our main competition

i n Western Oregon.

.

:•

.

„ The S e c r e t a r y of t h e T r e a s u r y :

• :?v

. '

;

is

Wijat p e r c e n t a g e of the

e n t i r e wholesale &ry goods "business i n Oregon would you
say i s

dene "by your houce here i?a P o r t l a n d ? ..

_ Mr Hugg^ns:
guess.

That I could not s a y ; i t would be only a
"

•

•

':

'

Tha S e c r e t a r y of the T r e a s u r y :
what would you say?
M r Huggins:
?
guess.

;"'"

" .'
'

7 e l l , for a wild g u e s s ,
,

-,

- '

-

3 do not imow t h a t I could even make a vrild

You see the e a s t e r n houses c e l l here and t h e San

F r a n c i s c o houses s s l l h e r e , and tha S e a t t l e houses to some
extent.

Spo^are does not do any di-y goods business

to

amount t o a n y t h i n g , except a l i t t l e i n e a s t e r n 0r3gon.
She S e c r e t a r y :




Where do you get y o u r chief

competition,

B

A. T. Huggins

277?,

who a r e your chiajC conipatitors?
Mr Euggins:

.

'

The chief competitors a r e the middle west

houses.

'

The Secretary of the Treasury:

'

.;' ';

a t Lou;fca§ for iastanoe,

ard Ghicago?

/::

Mx Haggtn?3s

St Paul, Mi2^ieapolis f

Kansas City, Omaha,

Ohio ago, and St Iicuis ? and of course wa have the San Prancisco lions GS and the UeshiDgton houses.
M The Secretary of t h e Treasury:

, '/''

What i s the volume of

your gross "business i n a year; take for 1913, for instance?
Mr Huggins:

1 v/ould p r e f e r not t o answer t h a t .

£ The Secretary cf t h e Treasury:
^ -

:

- ^ • • • m

give that away?

'

*

^

^ ^

:•, ^

You would prefer not t o

^

Mr EcLggins: Yes.
* The Secretary of the Treasury:

Well, i t is not important

W simply want to gat a lAne on the general a c t i v i t i e s .
e
'Mr Eagglns:

3 could give you ac a:a indication of how our

"business i s distributes^ where our travelers are located...
The Secretary of the Traapury:

W9ll, the percentage in

the different states i s sufficient for our purpose. H w
o
afcout your fimiDCing, where i s that dons? -z:^<
Mr Bagginss




Partly %n Portland and partly in Hew York*

Chiesg-o tuna St IiciTis, r,*ll mf
, B .:..?• ^ug,;;l'.u" •

jfrap.r t h s r ^

tao. & T. Huggins tovrl£3>.; s *r. St
*

The Secretary of the Treasury:
Mr Hc_gg£iis:

To-what extent i a Port-

U e l l , our banking i s done here.

Ya d l s t r i i
/

the monoy through a bank i n Kew York, but our main bankin?
i s done here.
The Secretary of t h e Treasury:

Do you have any trouble

,. about g e t t i n g t h e neoossary accamcdaticns i n Portland?
. Mr IIugg:\ns:

I7ell, we have no trouble as far as amoxuat

goes, but sometimes we can do b e t t e r as t o rates in the
.. open market by placing our paper i n Uew York»
:^J;

The Secretary of the Treasury:

r

^

.,,....

Da you do a;ay business

Chicago amd St I«oidis? s e l l any papar there?
,_ ^ Mr Huggins:
C h i c a g o *

Bo, we do no money business i n St Louies and

». ^ • ^ ' ^ ^ - • - ' -

y

= -.

-,•* '?•'*'.'•*•#"'"'•'••w

& m The Secretary of Agriculture;
• , ; Mr Euggins:

^~

•';/-•

-' i*

Qr San Francisco?

Bo, nor Los Asgeles*

I also wish t o mentic

the Hiillinery business, in which we have a large wholesale
hcaso here.

^

The Secretary of the Treasury:

Mr Hoggins:
these f i g u r e s .




3s that part of your

Ho t t h i s is another coxroarn which gave me

;

. .,.•..

• > /• i ^ ^ - 7 ^ v i v - ; < - V - > ' - ' .

j

v - v . "

i '

• ,-.-• * ' * - ? Y - r

- V ' - *

'-•;"""

P-

:

" -

1

" "

B.

i r l

" ? ^ .

:""

T

™'

=•

" ' • < * ' . / • • • * , " • . * • • - V

"

* • « ' . ' •

'

, - : . . * * , ''••'•". •>

n

",.;.' ..J

. '

'" ' . ! / •

, ,' -

. ^

"

-

-•

•

•

* '"*' /

:

> tF

- ~~ ; ; -.-

A, T. Huggins

2778

The Secretary of the Treasury:

You are not selling

any aigrettes now, are vou?
M Hu^gins:
y

!No, it is no'; safe. feO per cent of t h e i r

"business i s dona in Washington, Idaho, Montana, and British
Columbiae

Then the wholesale furnishing goods house here,

: the largest house, states that 34 per cent of their business is done in tha state of Washington.
Tha Secretary of the Treasury:
. Mr Huggins:

;:^/

And what in Oregon?

They did not give m t h a t .
e

get these figures.

;

'

1 had hard work t<

Some people do not like to give away

figures as t o their business.
The Secretary of the Treasury:

They are not giving away

much when they simply t e l l you percentages of distribution.
i

Mr Huggins:

I understand that.

There was one other item

I was asked to get, and that is as t o the woolen mill IndusThera are
tries.
. in tha state of Oregon eight mills.
The Secretary of the Treasury:
Mr Huggins:

Yfoolen mills, yas.

year is about§2SL, 250 s00O. - . \
The Secretary of the Treasury:
Mr Euggins:
oant goes east.




Woolen mills?

'

Their production for a

.
Q£ finished produnrts?

Cf finishad products, which from C to 70 per
O
•

I

^

; -

A, T. Hoggins

3

• T.he_ Secretary of the Treasury:

2779

What is the character

of the product4? blankets?
Mr Hoggins:

The Secretary of the Treasury!
Mr Euggins :

y

Blankets,, flannels and cloths.

'

Uot garments?

So, this is not made up, t h i s is in the

The Secretary cf the Treasury:

You do not make wearing

apparel, you only make "blankets and cloth and things of tfc
kind?

"*'

'.-*..Ar**?

**"? Mr Euggins:

^

^

r

v

- ; r r *•;•• - ^ > — • - - - - - - - , ~ - • - ~ «

And Mackinaw, and things of that s o r t . Then

in the state of Washington there are three mills.
^

none

i n California.,

h.. "•-"•." '•:• ;"v : •;• '-'•••; : V , 't;''_":

"/:'c The Secretary cf t h e Treasury:
*/""f Mr Euggins:

Eight.

are much obliged t o you. -*-•*•'

;

'

:

v!

There a
• ; : -;| : ^

And how many i n Oregon?

'''* "" ;.' f ^"''^ r ^

The Secretary of the Treasury:




_ • ^ _ _

$J

" \ : ^ -1:"

3 think t h a t i s a l l - ^*e
w- *

STATiEMEyT OP PRA^K H. PARSONS.
;^;
s S e c r e t a r y of t h e Treasury:

vr<, l a r s o n s , w i l l you

e ^your f u l l name, r e s i d e n c e and occupation?
Mr. P a r s o n s :

,^*

Prank E. P a r s o n s , Cashier of the P a c i f i c

N a t i o n a l Eank, a t Boise, Tdaho.
The S e c r e t a r y of t h e T r e a s u r y :
Mr. Parsons^

T r e p r e s e n t t h e E o i s e C l e a r i n g House.

The S e c r e t a r y of t h e Treasury:
credential, there?
;

Mr» Parsons*

Have you a r e s o l u t i o n or

+,; + i-*•«,

Yes,

-

The S e c r e t a r y of the Treasury:
Mr, P a r s o n s :

Whom do you r e p r e s e n t ? ^

(Reading):

Read i t ,

please,

"At a meeting of t h e

Boise

C l e a r i n g House A s s o c i a t i o n h e l d t h i s 2?th day of January.,
1914, Mr, P. H, p a r s o n s , Cashier of t h e P a c i f i c

National

Bank, was unanimously'' e l e c t e d as a committee to r e p r e s e n t
t h i s A s s o c i a t i o n and o t h e r bunks, and t o accompany Mr. P. S«
Johnson of the Boise City N a t i o n a l Bank, who r e p r e s e n t s t h e
Boise Commercial Club, t o appear b e f o r e the Reserve Bank
Organizer Committee in t h e i n t e r e s t s of a Northwest P e d e r a l
Reserve D i s t r i c t .




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•

P. H Parsons
e

^ .
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--

•

.

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V i c e - P r e s i d e n t , -*•*> 3'-,-^'
Lo

Bear,

:

- '

-•

'

•

^

Secretary."

•••

,

"'•••

•'

'- ^

The . S e c r e t a r y of t h e T r e a s u r y :

. Parsons:

t h e r e ?

?.pr. Parsons:

.' - V
'•
•

,;

•

^

-^ir -• •.-.•'

-

. : : • : " < ' ! _

*.*..••'

. • ;. : •>«

MTII

^f

That i s t h e Commercial

"NOW have you a Clearing
"•

-.^•:iH-^-

Yes,. \$''T^-^bSr'x/. -S## ^^."bas

from that body?

w ^ TI-^V
Yes:

Have you a resolution
.

•
•
'

"To the Honorable Reserve Bank $%& *

Organization Committee, Portland, Oregon.
^

•;. •

.•.; • " <•.''.y.-'-. i.&^y^&ry*•*:''•••
•./ •

? The Secretary of the Treasury:

KTo Parsons:

.••••

7^r. Johnson represents the Commercial Club,

The Secretary of the Treasury:
H o u s e

Gentlemen:

This is to certify that at a special meeting of the

Eoard of Directors of the Eoise Commercial Club held
January 27th, 1914, the following resolution was adopted:
RESOLVED, that it is our opinion that the commercial
and agricultural interests of southern Idaho and Boise will
be best served by the establishment of a federal Reserve
District in the Northwest, embracing the states of Oregon,




» \

-BOTSm^CIjEART^G HOUSE ASSOCIATION
G. X. F l e t c h e r ,

^«

X

^ ^y, .:

G-3

P. H. Parsons

2732 y

Washington, Montana and Idaho.
BS IT PITRTHSR RESOLVED, That our P r e s i d e n t , P . P. '_.- -.-'\,
Johnson, be and i s hereby a p p o i n t e d a commit t e e , of one to* '
r e p r e s e n t t h e B o i s e Conimercial Club b e f o r e t h e Reserve Bank
O r g a n i s a t i o n Committee a t t h e i r meeting t o be h e l d in l-}"-?*-5a
P o r t l a n d F r i d a y , J a n . 5 0 , 1914, our s a i d committee having
f u l l power t o a c t a s h e may deem b e s t i n connection w i t h
a l i k e committee from t h e Boise C l e a r i n g House A s s o c i a t i o n .
J<

„,,
f V i

K

T %

.

•.. . - . ^
m % .

r

•

••;: •

v.

R e s p e c t f u l l y y o u r s , ••*$kni'.*tf6\.. 1W* -%

•: ~ -ivi:
fit- • - " * • * •

••..••-.-

'
•

.

S

•v,-./:;-,

• • . • • •

R . W . C h i l d s ,

•> •
• v ,,...•.

•

l #

^ ; 6 t e f e ^ Secretary."

The Secretary of the Treasury:

your -Clearing H o u s e ? ^ ^ ^
M

'",

Parsons*

^ .

"Wr* Parsons-

---

How meny national and
•£^#T^^-\^*'f&*m:'*--'

Pour national and one state."

The Secretary of the Treasury:
t h i s question j M « Parsons?
r
Mr, Parsons:

i

W have five.
e

Tlie Secretary of the Treasury:
how many state?

H w many banks are in
o

;

What is your view about
'--- %m «^" *-**

Well, m view about this is that the
y

i n t e r e s t s of the banks of soutliena Idaho would be best
served by a peserve Bank: located a t Portland instead of at




Hv

<^4

:

-•'••• i:". -

p

0

Ho

Pardons

a n y of t h e o t h e r c i t i e s t h a t have "been mentionedy Spokane,
S e a t t l e and so on, "^•"'"'-

.

The S e c r e t a r y of t h e T r e a s u r y :

..•:"",' '•/
^That would be your second

choice;, if there was not one at Portland?
Mr. Parsons:

San Tiranciscd0

The Secretary of Agriculture:

- ",;
Is i t your judgment, Mr.

Parsons, in view of a l l the circumstances, that a separate
d i s t r i c t ought to be created at this time in the "Northwest?
Kr« Parsons:

T hardily think that there should be.

• The Secretary of Agriculture:
"be better served
Francisco?
Mr.

one strcr.g institution located at San

v -

P a r s o n ? :

You think the section would

T d o *,

. -"-

.-•>•/..-.?>••.: •:•

,-.•:.'.:•.•

The Secretary of the Treasury:

-.:..-..--

And adequate breaches? of

c6urse ? in the r e s t of the district?
Mr» Parsons:

•., :

-

Yes, adequate branches6

The Secretary of the Treasury:
Portland?

---

•

H w far is Eoise from
o
^

Wo Parsons:
The Secretary of the Treasury:
go from Portland- to Eoige?
Mr« Parsons:



About 18 hours*

H w long does i t take to
o

Gr-5

^o H P a r s o n s
a
2784

The Secretary of the Treasury:
:

Ey the "best trains?

Yes, s i r .

-$

The Secretary of the Treasury:

H w far are you from
o

San -Francisco?
Mr* Parsons:

You mean in point of time?

The Secretary of the Treasury:
llTo. Parsons:

About 48 hours*

The Secretary of the Treasury:
route?

lirtw&sZ

Kr. Parsons:

Which is your shortest

T®&_, ^ ••
•

Via Ogden«g*ury:

€ The Secretary of the Treasury:
"banking r e l a t i o n ?
Mr? Parsons:

yes. , i : .--

^

n

&&& *? $$*& -

where is your principal

In portland or somewhere else?

Our p r i n c i p a l "banking relations are with

Chicago and New York, in the sastc

?or the western part i t

i s about equally divided "between Portland and San Francisco,
-_The.Secretary of the Treasury:
reserves?
Mr« parsons:

:.;.

:t

/. v

*'

New York.> and Chicago.

The Secretary of the Treasury:
M- parsons:
ro

Where do you keep your
- ' . s ''
*^ *#«*

And how do you divide i t ?

Probably 75 per cent in Chicago and 25 per

cent in " fw Yorks of the eastern part of our reserve.
N
e
The Secretary of the Treasury:




What is the general course

G-6

.-

Pt H - Parsons
e

278f

of "business in Idahc and southern Idaho, what is your
general trend?
Mr. Parsons:

T would say westward.

The Secretary of the Treasury:
yr. Parsons:

Yes-

*

The Secretary of the Treasury:
. M r

o

parsons:

Mr. Parsons:

".'/'.
doming to Portland?

:
Y e s , \ :•..%..;<",•-•-•..-:'•••. - '
'

The Secretary of the Treasury:
come3 here?

Westward?

'

,

•: "

•.•;'v; •.'fi'-;-

The "bulk of your business
/ ", '.

Yeso

The Secretary of Agriculture: Are you in very close touch
with Denver?
Mr* Parsons:

'.•.*.
"Mot very muchs

The Secretary of the Treasury:
do you keep in Portland?
Mr. Parsons:

What part of your reserves
^'^—^i'-^^^^yr''-^'^-''

I suppose possxbly 15 per cent, ; ; ;
';,

The Secretary of the Treasury:

You mean 15 per cent of

the amount of money you keep in reserve?
Parsons:
The Secretary of the Treasury:

'* '
You do not mean 15 per

cent, that is y ur total reserve, "but you mean 15 per cent
of the money you keep in resei've?



•rii-''l:''"

G~7

2- H, Parsons

Kr» P a r s o n s '

2786

Yes o

The S e c r e t a r y of t h e T r e a s u r y :

Why do you keep such a

l a r g e arzount in Chicago, i f t h e bulk of your b u s i n e s s i s
westward?
Hr-> P a r s o n s :

On account of t r a n s f e r s *

We f i n d t h a t r/.

can u s e Chicago o r JHexr York exchange in making the t r a n s f e r s
and we b u i l d up our b a l a n c e s from t h e r e .
The S e c r e t a r y of Agriculture-*

^ .

As I u n d e r s t a n d i t , t h e n ,

your f i r s t c h o i c e i s r e a l l y f o r Sa.11 ^ r a n c i s c o ?
Hr 9 P a r s o n s :

' ^,^ ^.

I f t h e r e i s t o be a Reserve Bank, my f i r s t

choice i s Portlands

J- : ^

.

; The Secretary of Agriculturi3:

,

v,•

v^

You mean if t h e r e i s to be

one in the Northwest?
Parsor.s:

If there i s to be one in the Northwest.

The Secretary of Agriculturs*
prefer there be but one?
IP-** parsons:

Eut for the present you

;

;•

,

Yes : that ^as the opinion, not only of the

Boise bank5 but at t h i s meeting at our .

/-:- •'. ,v._' . Clearing

House Association there were banters there representing
eastern Idaho and western Idahoa and I have had a talk with
a great number of bsnkers in southern Tdaho, asking them
as to their opinion about a iieserve Bank for the northwest




Gr-8

2T. H> P a r so.--B
<

States here,

I tost of them favored a b r a n c h or a bank a t

Portland 5 if there i s to be a Reserve Eank placed in t h i s
Tviorthwest d i s t r i c t :

Tn case there i s not, San Francisco

seemed to be the preference*

*

The Secretary of Agriculture:
was t h i s .

-r*?** -

^That T wanted to get at

T understood you to say t h a t your own judgment

i s at t h i s time there should not be a Northwest d i s t r i c t ?
}Tr.

.

Parsons:

Yes,

"

"

•'•

The Secretary of Agriculture:

.- •

v,-,^,;,

And that there had b e t t e r

be a l a r g e r d i s t r i c t with headquarters at San Francisco?
:..' WTo Parsons:

Yes,;";

'

.

The Secretary of Agriculture:

-'

•: ;

;. .•

:

,/.:

.

To what extent would that

opinion be shared by the bankers in southern Tdaho, do you
t h i n k ?

- ;.': : .;->^:r••-•"'•"••••

Tfr, Parsons:

. '7-'-

^ " 7 : ' ••' W

'

^

7

'

^

T — - ~ / . ^ ^ : ,

T think i t would be almost unanimous, if

there was no p o s s i b i l i t y of a bank here*
The Secretary of Agriculture:

. .

-<":*Jte

T know, but to vtfiat extent

would t h e i r opi-iion be t h a t we ought not to attempt to
c r e a t e a t t h i s time a northwest bank?
}~Tc parsons:

. •

T suppose a very large per cent, 90

o r

95

per cent of the backers would f e e l that way.
The Secretary of Agriculture:




That there ought not 60 be?

&~9

•

Mr* Parsons^

3?. H. Parsons*

.

2788

That there ought not to "be.

The Secretary of Agriculture:

D you think that for the "
o

time "being the i n t e r e s t s of "business, the "banking interest:
cf southern Idaho, would be well served " y having a Reserve
b
*'-:-*$L':W-

Ba.rik in San ^rancisco and "branch "banks nearby?
Mr, Parsons:

Personally, and T am speaking for myself^'-'-'

now, T do not "believe they would "be as well served with a
"branch "baxik here as they would with a Reserve Bank; that is
ths i n t e r e s t s of the "banks of southern Idaho, owing to the
close communication that we have here with Portland as
compared with

California*,

•.~B™••'^.H'/^,-

The Secretary of the Treasury:

vv:v^;^-^--,-•;:

Tf you had a strong hank

in Portland and managed, of course, " y directors - - you
b
heard the discussion of the provisions of the Act with
relation to tranches?
"•£?."*' Parsons:

yes,

-

•'"

The Secretary of the Treasury:

'-,:• . .
D you not think you woul
o

get the same f a c i l i t i e s practically that you would with a
Reserve Bank in Portland,

' \^]+••^•;^:-.---;
'

Hr parsons:
fo

- -'

*•

-rt-

' -

.-

J

-.

- .

-.

-

Tn case there was not too much red tape

connected with i t , T personally would think we would get
"better r e s u l t s in dealing directly with the principal than




G-10 •

Po H. parsons

' .
2789 G

we would with an a g a n t . .,,.., •

.

The Secretary cf the Treasury:

. ,; . , _

w.

.„,.... \

,_.

; -/t*j

Would i t in your judgment

be better to organize a district stronger in resources and
banking power than to organize a weaker and smaller one,

% -.
->

that i s , with a view to the future development of this great
and growing section of the country?
Hrc Parsons'

Si

.. •

. .,, Ju -'*

,

Ky judgment would be. of course, that i t

would be better to organize a stronger d i s t r i c t , a stronger

STATBI2NT O Po Pe
P
_ The Secretary of the Treasury:

Mr0 Johnson, w i l l you

s t a t e your name, residence and occupation?
Ifr# Johnson:

Pe 37, Johnson, Eoise, Tdaho.

M occupation
y

i s Cashier of the Boise City National Eark, but T am representing the Boise Commercial Club,,as i t s president and
representative here*

„ • • ,

The Secretary of the Treasury:
views?

Jlr. Johnson:

'.'••?•'*&.:•'&'*

T dido

.

r

- W **•

+

-

•
•

You heard Ifr. Parsons'
\

I have some r e s o l u t i o n s here from

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




You may read them, p l e a s e .

G-ll

Pc F. Johnson

Mro Johnson:

(Reading):

2790

"At a meeting of the Eoise

Clearing House Association held t h i s 27th day of January,
1914,

Mr. Po IL Parsons, Cashier cf the Pacific National

Eank7 was unanimously elected as a committee to represent
t h i s Association and other banks3 and to accompany Mr. F.
Johnson of the Eoise City National Eank, who represents th
Eoise Commercial

C1UTD;

to appear "before the Reserve Eank

Organizer Committee in the i n t e r e s t s of a Northwest federal
Reserve Districto

s? v

B 0 T S 3 CLE4ITD)G HOUSE ASSOCTATTOM ...•-,,;
Go Vc

Fletcher,

W Ln Bear,
.
' S • ' Secretary. ****

.

.

;

T w i l l state I came away rather hurriedly and the Eoise
"bankers and the commercial interests fead not considered i t
necessary to be represented until the very l a s t .

W had
e

had several invitations to go to Seattle from outside
"bankers, but the day before we held this meeting we receiva telegram from your Secretary at Washington requesting
us to appear at Seattle, and we wired asking permissl on to
appear at Portland.




Then on account of M r. Armstrong1 s

iV^iW'-^.-v-.

E1. Johnson

-

2791
ti ;?

testimony a t DonYer, vre f e l t v i t a l l y interested^ as t h e
bankers and business men, so far as T know, ha

no con-

nection with Penver : and we would not want to be attached t
Denver in any e v e i t .

v&X ?•% •i.ifcO'as^i.crT %ffiti$$:%&& •
/
<

The Secretary of the Treasury:

You hav e .^o f i n a n c i a l

relatio.os with Denver?.WB t^t$^^;:'"t-^3B..t V-^ft
,

Mro Johnson:

l^o.

\?ifi4:-%

W had an account with Denver and
e

closed i t , because we had practically no use for i t .

You

take our commercial interests at Boise, and if you will
notice on the map, we have a l i t t l e t e r r i t o r y cut off from
a l l the r e s t of

the country*

Tt

is developing rapidly.

There i s a new t e r r i t o r y , about one and one-half millions
of acres of land which has nearly aH been put under water,
that i s most of i t is now and the rest will be added.

The

largest part is the Government reclamation project 3 and sonu
Gary Acj7"5 and as that grows up i t i s going to make an
i n t e r i o r d i s t r i c t of i t s e l f ,

and Eoise has become the

financial centre of that territory.

W have a number of
e

jobbing houses there, and the banking interests of the small
banks centre in Boise and we take care of most of those
banks.

Some of them come to Portland direct and some to us.

and then i t i s up to us to make our arrangemeartts outside.




. ;--/•

, " - • " • '

G

.

•

; :Po Fe Johnson

•

27S

But from the n s t u r a l geography of the country, everything
tends dcwa to the Snake River and the Columbia Kiver to tfcu
seaboard, and as wr* Parsons explained, i t i s the shortest
distance to Portland, by far*

''—

••^^L-

There was a good deal of discussion among the bankers
and others as to the advisability of a Northwestern
d i s t r i c t s and at f i r s t we thought that San Francisco with
one large bank perhaps 3 was the best«.

But we feel that if

we could have a bank in Portland^ that they know our needs
and the needs of that country b e t t e r , and we probably would
be better served than we would at San i?rancisco, although
we might get the same result from an ageicy here which woulbe governed largely by how that agency was managed,
The Secretary of Agriculture:

You understand that the

directors of the Reserve Eank would be drawn from a l l the districts?
!lro Johnson:

Yes, but in a l l probability if we were

tacked on to San Francisco, the best we could expect would
be that we might possibly get one branch in our d i s t r i c t ,
but they would take in Salt Lake City and southern California and Washington, and here are Spokane, Tacoma, s e a t t l
and Portland.,and^all-..±hes.e- lajri^ereplace3 whialrwould .want




:

^« ^o Johnson
representation,

-

•

,

The Secretary of the Treasury:

- .

. ;:

2793

; ****£,

Supposeyou had a branch

in Portland unaer those circumstances, to which Boise was
attached: the directors of that branch bank are chosen with
reference to the local conditions to be served by i t ,
ITr0 Johnson:

yes. - y^9'''"

- - ^r'i*ilar

The Secretary of the Treasury:

1^:.,?^ ^

You undoubtedly v/ould get

representation on that branch. ** *$' » £ & wa "$&£'£%'.'.
• & ' •" & $
ly-, Johnson:

of course, assuming that you would have

several branches, with a branch' at Portland, if I t was to
serve the loise t e r r i t o r y , we would have representation,
j

.

.

• . • ^ * -

•

.

^

•

-

•

•

':•':: The Secretary of tha Treasury:

-

,

.•

-

. ,

••

.

•

_ •

' .

• -

••

There would be seven

directors of the branch bank,
?.ro Johnson:

On the other hand, in our o n t e r r i t o r y ,
w

even though our banking c a p i t a l is

small today, i t v/ould

suit us better to have a branch in whichever d i s t r i c t we
are located, because we would have those conditions to meet*
"»w our business in there at the present time, live stock
*o
i s the predominant business 3 and the sheep industry and
l i v e stock — of course, you hav e had figures from Mr. Colt
as to the carload movement of that stock, although most of
our sheep, mutton and lamb, goes east and the fruit




that

G

I1* Pa Johnson,,; ,'

'.

•

.'

2794

goes out of that country goes east, but i t i s financed
.locally,,

iplis sheep men are a l l financed there locally

with the assistance of the east.

W ourselves sell cone

siderable paper "based on the statements and the securityback of these different

concerns,,

The conditions around

Boise a t the present time in our particular instance makes
a peak load of about$400v000 more than the normal load,
which i s about $1,500,000 of loans which we carry in our
individual banks,

t^f^iV^^^a

v The Secretary of the Treasury:
,;:

Ti/rr, Johnson:

^ f d *^ •
A* * - *

^hen does that peak come?

About the f i r s t of June,

1 o formerly.. T
1 w

was banking in Wallace7 Tdaho, which was s t r i c t l y a mining
community, and the bank with one and a quarter millions of
deposits had no demand for money,

I also have a bank in

, - the Twin Palls d i s t r i c t , which was organized when they
f i r s t opened that d i s t r i c t , just nine years ago, and i t
opened for business, i t will be nine years the coming March,
1 went into Twin Palls through the solicitation of friends,
,.^nd-found we could work the two together, because they were
•a3arays_JLoo3dLzig. fo-rJLcans in the northern part of the state,
and before T.moved ..to Boise I had arrangements with the
bank T am now i n , the Boise City national, whereby we




c

~

" '• '?• E* P, Johnson

,2795

loaned them for their peak load and carried those loans an
they were liquidated along the l a t t e r part of July, althoi;
they are getting so they liquidate l a t e r now.

Then the

demand came from what we c a l l the Palouse country,in the
'wheat country, to harvest the crops and handle the wheat,- ' •
"•
and T placed that same money there*

T w i l l gee that back

about the f i r s t of the year, QS the stock loa^s went up do*
b e l o w ,

- ' > > ;
-

:

' J

V

^'-..

'

•

•

'.

.
.

_

Our business at Boise is getting

•

-

.

"

•

<

:

•'.••;.
.''••.;

:

more diversified, The.

loans made on cattle are principally for feeding in that
country.

They feed quite a few cattle, and those begin to

liquidate early in the winter, they commence in January am"1
gradually go down*. Sometimes some are carried along away
into May, but the bulk is liquidated early in the spring.
The Secretary of the Treasury:
the p e a k ?
lire Johnson:

:

%-'lj} /':-^C:/rA- "S-^

'*^> •&: \^-x < -/',

We finance the peak with Wallace, Portland,

Spokane and the east,

•.:^;>i^r;^-'^;;:r' :

The Secretary of the Treasury:
instance, what percentage?
ICr* Johnson:

TThere.do you finance

-'E: '

. :: n
.^

How much in the east, for
\ - i Jv ,..j. ^ ;;i\^
,v

y-S-^

T would say you take the actual peak we

carry, we would probably carry in the east from 50 to 60




:wf/'*a$

G

p a 3\ Johnson

per cent:

2796

i t v a r i e s .at d i f f e r e n t

The Secretary of the Treasury-

Mr. Johnson:

' " • '
fhat

Yes,

'"•' -

i s c a t t l e paper?

W s e l l p r i n c i p a l l y the sheep paper.
e

The Secretary of the Treasury:
Mr, Johnson:

""-••* "-r v

,

W nev a* have had*
e

Ths S e c r e t a r y of the Treasury:

"'r

Have you any d i f f i c u l t y

in s e l l i n g t h a t - p a p e r in the east?
Mr* Johnson:

"v

times*

;

^hat i s l i v e stock paper7

The beauty of that is t h a t you can

show j u s t how much a roan gets f o r h i s wool arid how many
lambs he h a s , and you have a check on him, ' "'
The Secretary of the Treasury:
Chicago or ifei York?
Mr0 Johnson:

Mr. Johnson:

Do you s e l l mostly in

,

' "

*-*---*^^^

Some in Chicago end some in Ue York,
Jw

The Secretary of the Treasury*
i

J

TO
TW

isrit divided?

T would say about equally^

The Secretary of Agriculture:

" s **^

At present Montana seems

to desire to be connected with a bank to the east. ~ Mi'o Johnson:

So I have secac

The Secretary of Agriculture:

. "*"'"*

' " " *"J»?3«.» & ^
*

Not only the part east of

..the mountains., but the part west of the mountains,
Mro Johnson:
much to the




Well, the trend of their business i s very

east.

G

.

•

. Po 3 * Johnson
?

2797

The S e c r e t a r y o.f A g r i c u l t u r e :

Yes, and t h a t is a f a c t o r

we have t o take into cons i d e r a t iono
Wf* -Johnson:

• -,•>,-,;,, ,-,••„
,

.-<•,:../.

I think you v/ould make a very great mistake

if you organized the full number of d i s t r i c t s and only left
one for the Pacific Coast•

W have a country here which
e

i s developing rapidly and our i n t e r e s t s will "be somewhat
different

from the i n t e r e s t s of San -cirancisco and i t is too

large a t e r r i t o r y to

serveo

^.,/{ •- # v.-s^.^z - , ^ iv %n%
,> *

The Secretary of the Treasury:

W-

You mean :tt v/ould "be a

mistake to organize twelve^ and out of the twelve give only
one to the Pacific Coast? '^..v,/^' ^^i^H^^y
TTr- Johnson*

'hl'^•>&$...

Yes, and if there could "be a d i s t r i c t held

in reserve and we had something to work on in that way, v:e
•could-overcome the lack of capital in this Jsorthwest dist r i c t , and.latea'
- • ,

such a d i s t r i c t .

when we could overcome i t , we could have
lf:^v4s*&&:-)i^

The Secretary of Agriculture:

A number of sections of the

country are developing very rapidly, and we understand, of
course 3 how rapidly this Northwest i s develop ing.

" ob d
M"oy

can t e l l what the future i s going to "be with reference to
the trade with the Oriento
The Secretary of the Treasury:




v . ' ., • .'- v - '
And Alaska.

G

]?o Po Johnson"""'
The Secretary of Agriculture:

Arid every city from

Pittsburgh to S e a t t l e i s expecting a great deal from the
J.

Panama Canal*

W cannot t e l l anything about t h a t ,
e

"o
Sw

would you advise us to create a minimum number of d i s t r i c t s
and leave the e l a s t i c i t y for future development? ,,./ »s&g&zpw,, Johnson:

T would, yes e '• >'• **.i'%*:,riz:~-

The Secretary of Agriculture!

And in t h a t case, to

create one at San Francisco and not create one in the "Morth
westo ^ ^ ^ - / 7 * ^ ^ ^
Mr. Johnson!

--•—:.-,-

T must confess T had figured a l l the time

u n t i l recently that there was no possibility of a Northwestern d i s t r i c t ,

T knew vre did not have sufficient

^•banking capital to take that stock and make uiJ the iiecessar;
capital, and T did not know how to finance i t .

But if we

are going to have a Northwest d i s t r i c t s which we would like
to have if we can.? we want i t to be representative, and we
war.t to impress on the Committee that the great majority of
us prefer Portland.

•

The Secretary of Agriculture:
your choice i s Portland?
Mrd Johnson*

If there i s to be a bank,
^r/i

Yes»

The Secretary of Agriculture:




if-^^ii^tt^

under no circumstances do

• %*< 3 # 5 * Johnson
? 1

£

T

'

'

-

2799

you Trarrt to "be connected with Denver?
Mrc Johnson:

. ,•-,

2Jo5 and we would regret very much being

connected with S e a t t l e , "because i t takes us that much furthe:
away, "because you take the map* and you w i l l see Seattle i s
away up in the corner of Washington and out of the regular
t r a v e l from that portion of t h e d i s t r i c t .
The Secretary of Agriculture:

V v;
^-

In what degree do you look

to Spokane?
.^-W« Johrison:

.,

-.77..; -yr •:,;; • /.;,.,; y,
T have had more "business with Spokane, for

t h e reason T am i n t e r e s t e d in "banks in Spokane, having lived
in t h e northern end of the country c l o s e to them, and we
h a v e had interchange r e l a t i o n s , an d a s T say, I e s t a b l i s h e d
t h o s e "before T had any i n t e r e s t i n southern Idaho, and we
have extended them sine e*

probably i f i t was not for t h a t

the b u s i n e s s would have d r i f t e d i n t o P o r t l a n d .
saya ^;tvrfcri:

-

^-:-S

The Secretary of the Treasury-

'

I could not
•'::^'•^•'S-'^./Y.JX^

You understand the Act

provides that no matter what action this Organization
Committee may take with respect to these d i s t r i c t s , i t is
subject to review by the pederal peserve Board when organized, an d you also understand, T presume, that the Federal
Reserve Board has power to readjust these d i s t r i c t s at any




I.I'

0

';/,'

!

I

,

;*

I

p

^o 2\ Johnson

time in the future0

I

,

,

'

2&00

Uow if the Committee. should decide or

the minimum number or any number less than the maximum, it
would be within the power of the Board in. the future to
create additional di stricts"up to the maximum*
3£r« Johnson:

'; J"
f

Yes ? that is as T understand it.

The Secretary of the Treasury:

So that the purpose of th<

Act was to give some latitude there to the -^ederai Reserve
Board, so it could meet the changing conditions of the
country*
Mr. Johnson:

Of course you realize that after a district

is established and the Federal peserve Bank is onbe e stablishedj. and they have their plant, you might change the
relative district, some of the territory "between that and
some other district, but it would be pretty hard to make a
new districto
The Secretary of the Treasury:
you have the power.

MT. Johnson:

Tt

is not difficult, if
.>:•„ .'••'-•

I mean if you had all the districts

organized to the maximum number*

If you nave some left

you could at any time organize one district out of a portio:
of another.
The Secretary of the Treasury:




^hat is what T am referri,

to,and T understand t h a t to be your view, and that i t would
be well to organize some ::i.unber l e s s than th e maximum now,
so s.3 to leave rocni for adjustment.
2Hr9 Johnson:

^ ^ - ^ . ^ «&*/*• "

Yes, unless you f e l t you could organize

one in the ]>!orthwest*:'-. - .,;.*!^ i ' • /
The Secretary of the Treasury:

;... '.,

'•

,

* *
-

Yes? unless the facts

would warrant our organizing one in the "Morthnrest which woul-meet the requirements of the Act, aid

also serve the

convenience and customary courses of business 0
.

Mr* Johnson:

Speaking of the feeling of the bankers

down t h e r e , group one of the Tdaho bankers held a meeting —
The Secretary of the Treasury:
?jrr. Johnson:

What does group One cover?

Group one covers a l l cf the t e r r i t o r y

between Twin P a l l s and Huntington and on the branch 3.ines,
Tt i s the southwestern part of the s t a t e .
have no group*

The southeast

W held a meeting at " a p and I wired the
e
Mm a

secretary asking for information regarding the group.
i s composed of nine national and seven state banks.

Tt
This

meeting was discussing the Currency B i l l , and T was chairman
of a committee which sent in a report*

In t h a t discussion

they a l l spoke in favor of a d i s t r i c t in the Northwest, and
recommended t h a t the minimum c a p i t a l , which was §5,000,000
under the old b i l l , be reduced so they could have one in the




\
m

Q ',;.•

Z?. ?• Johnson

Northwest,

T j u s t mention t h a t

2802 "'
so a s t o g i v e you some

idea of the feeling of the other banksThe Secretary of the Treasury:

The minimum capital under

the b i l l is $4,000,000. " :' -•'^•.•^C :'• *\
•
Mr. Johnson:

Tt i s now, yes.

The Secretary of

the Treasury:

ment now u n t i l half past two.

W w i l l take an adjourne
,.

-

.. _Jr

Whereupon, at 12-45 o ? clock r . l^ p a recess was taken
u n t i l 2^30 o'clock P« M
o




2803
APTER RECESS.
•:-

2:30 P.M*

,^;.. ^

tt %l

STATELIEST OP H0B«, O W L WEST,. GOVERNOR OP
S AD
'•..-

THE STATE OP WASHINGTON.

The S e c r e t a r y of t h e T r e a s u r y :

" ' ' ' '*

Governor West, I suppose

.you a r e f a m i l i a r w i t h our problem?

The S e c r e t a r y of t h e t r e a s u r y :

'"

,^-^% k- tv*"

To d i v i d e t h e country

i n t o n o t l e s s t h a n e i g h t nor more t h a n twelve P e d e r a l Reserv
d i s t r i c t s , w i t h t h e l o c a t i o n of a p e d e r a l Reserve Bank in
each one*
subject.

We would be very
-

Gov* West:

happy t o have your views on t h i s

•
Well, of course you know we are a l l selfish ~ -

The Secretary of the Trea.sury:
admit that?
Gov# West:

You do not want m to
e

-.- .

^ ^ ^ ^

Well, i t i s true, whether you admit i t or not,*

and we are looking out for Portland f i r s t ,
looking out for the "Morthwest.

and then we are

T was unable to be present

t h i s morning, but T understand the feeling among some of us
i s that if we carijfot get i t for Portland i t should b e in
Califcrnia.

T differ from some of them in that respect,

because T believe that the Northwest is entitled to




G

.

Grov. West

recognition in t h i s line*

.

2804

There i s no question as to the

City of portland being the f i n a n c i a l centre of the Northwest, in my opinion,

Fortunately,

in the early days ther^

came here from " .w England a number of educated gentlemen
M
e
with f i n a n c i a l

i n s t i n c t who developed into splendid bankers

and created f o r t u n e s , ar-d there has nothing that has ,
happened since in the way of a panic or anything else which
has ever been able to separata them from any of t h e i r money
•tso ther-e i s no question as to Portland being the financial

fceentre.
t

. ^ ,&&#

Of course, Seattle lays its claim*

T remember when I

was employed? in a bank in a smaller town than this, where
the bank had a chattel mortgage on everything that was loos?
in the eastern part of the State of Washington, and the
only reason that they let go of it was because the security
was not adequate

In the early days the Indians met here

near the junction of the Willamette and the Columbia to
trade, it was a trade centre.
rivers brought them here.

They came here because the

It was the same thing that

brought the early settlers here, it was the opportunity fo:
wealth which brought these early financiers here.

Host of

the first banks that were started in the State of Washingtv




G

'

^ Gov. West

•'

280p

V-

were financ-ed "by-Oregon financiers, and the stock In a\gooj(
many of then todajr i s controlled " y local c a p i t a l i s t s .
b
The "Northwest is peculiarly situated, and T cannot see
for the l i f e of m where any particular advantage would
e
to t h i s

COM£

section from the location of a Regional Bank in

California,,

Perhaps Mr0 Mills thinks differently,

Tu T
at

could nev &• see any particular use for having a San Francisco correspondent with a "bank except to have a place to
accumulate cash to trade off for silver for use up here in
the hop picking season,

The Northwest is situated aticut

halfway "between southern California and Alaska*

And, thanks

to the administration, we are now unlocking Alaska, and
there will be great development there.

Banking business

will " e done largely here in the Northwest.
b

There is

nothing in common between California and Alaska, and that i s
^orthweSb territory,,

..£-•*-J:-&:.;~

W have heard a great deal of tali: about the
e
of not having sufficient

capital; that i s , the combined

capital of the banks in the northwest not being
to justify

probability

the establishment of a Regional Bank.

sufficient
Tf the

private banks would come in 3 the c a p i t a l could undoubtedly
be supplied, and there i s nothing in our "banking law, as T




%

'

. *

Gov. West

2806

understand i t , which would i n t e r f e r e with the private "banks
coining in.,

Furthermore, there i s one thing that so many

of you gentlemen from the east cannot appreciate*

W are
e

a growing community here ? and we are not dealing

only in

the things that we have today, Tout the things we expect
to have tomorrow^ .;-... 1.. r,hi---.& iu». v*^;.:Xd "t u-t '«? •-•fcr'v \'.p
The Secretary of the Treasury:
dealing in f u t u r e s ,
Gcv. West:

though, do you, Governor?,*;

The Secretary of the Treasury:

c a p i t a l for two Regional

I thought the west was

opposed to dealing in futures*
Gov. West:

v

£<?&*JS

Tt i s 90 days "before you have to decide, and

"before t h a t we may have sufficient

:

You do not "believe in

Well, it depends whether there is a profit in

^it cr not.

You gentlemen know the ground you

*wish to cover, and T donot care to bore you with a lot of
' things you have heard "before? and if there is anythiKg you
care to ask me, T am more cr less familiar with this
entire territory, and would be glad to answer any questions
The Secretary of the Treasury:

Do you think the state

"banks, under your law, have the right to take stock in thes
Federal Reserve Eanks?




^

West

Grov. ^est:

-m

2807

T do not think- there is any question about it.

The Secretary of the Treasury:

Who is the proper authority

to pass upon that, the Attorney General or Eank Examiner?
The Eank ing Commissioner. '•"' ***• ^*^tt< r-

GUY. '-Zest:

The Secretary of the Treasury:
GOT,

V/est:

construction

Yes,

on it.

The Bank Commissioner?

T think he would put a very liberal

&&j^&*j£%;.::£&&$&*:

. The Secretary of the Treasury:

*•#• *.
•.•.

/

-

You think you could set

any sort of construction en . t which you think vrould " e
i
b
suitable to meet the occasion — I am putting a very leading
questioii to you,
,^, GOY. ^est:

r*^t * ni/.^r3.txy

T \70uld be glad to ansv/er i t .

T do not think

there i s anything vhich stands in the v/ay at allo
The Secretary of the Treasury:

The problem in mest

respects i s am economic one, and as to the growth of these
sections of the country, T - a -t to assure 3rou that - re men
v
vho live on the other side- of the country are not unfamilaar
vfith i t ; v/e ars v^ry familiar trith i t .

So far as I perso.'.i~

a l l y a concerned, T have always followed the west r i t h the
m
greatest possible i n t e r e s t , and T think T have kept fairly
well informed with i t s progress and development. And of
course vre take into consideration the great growth you have




•

Gov. West

2808
.•_*?••

had here and the great p o s s i b i l i t i e s that are before you;

- •'

but under the law we are required to organize the d i s t r i c t '
with a minimum of net l e s s than 54,000,000 of capital, and
unless the state banks should voluntarily come in within
the sixty days/ in which the national banks are required to
subscribe, so that when the Com-iittee goes to apportion the
country we know whet amount of capital i s actually available, rre cannot guess a t that*

W have to knou that before
3

we ca*.i comply with the imndacory provisions of the Act, and
unless they cone in so we w i l l know that we can get the
c a p i t a l in this, d i r t r i c t , naturally we uould have to re'Xy
upon the r s t u m s of the national banks alone.
'

GV
0 0

West:

Ve understand that*
/

The Secretary of the Treasury:

Vcw the national banks

alone in the d i s t r i c t which has "boen proposed here have not
sufficient

c a p i t a l to contribute the minimum required by the

Act; and the question confronting us is tc link up a ; •;,:
sufficient

amount of t e r r i t o r y to take care cf t h i s d i s t r i c t

and a t the sarie t i n s to comply with, those requirements*
Gov, Wests

I aa firm in m belief t h a t the state banks
y

would ccme in«

The Secretary of tho Treasury:




Eut we would have to know

\ West

,

28t)9

before we could take that into consider-

Gov. West:

That eouSbe ascertained at an early date.

The Secretary^ of the Treasury :

We have already said to

all the eligible state banks, and the ineligible ones for
that matter, in order that we might develop the extent of
their abilityy the necessary rules and regulations and
application for membership in this system.

If they act

promptly, so we may know what they will do, we of course
will be able to act upon the returns*
GOY. West:

In those three states, Washington, Oregon and

IdahoT of course our friends on the north will insist that
that territory is not served by Portland.

The fact of the

matter is that we get all of the o**egon packing business
and we get —

probably Kr. Kills has looked the matter up

and knows to the dollar what percentage we get, but T would
say we get $0 per cent of the business out of those two
statesc

My experience is that the bank balances are carriec

in Oregon, and are not carried in Washington or Tdaho,

The

Washington and Idaho banks carry bank balances in Oregon.
The Secretary of the Treasury:
figures on that.




^r. Mills has given us

G

:,
Gov. ' T est:

^ Gov. TTest
Yes-

•

2810

" o when you stop and think that those
^w

three s t a t e s with a combined area of 260,G00 square n i l e s ,
and with a population of a l i t t l e over 2,000,000 of people,
growing rapidly — Oregon's population increased over 62 percent in the l a s t ten years, and the other s t a t e s at about thf>
same r a t e — and with the opening of Alaska and the coming
of the Canal, you can figure out what i t w i l l mean.
M w those three s t a t e s with a combined area of 260.000
o
square miles, have a population of about 2,000,000 people,
with resources that are undreamed of in some of the eastern
s t a t e s , and the combined area of the B r i t i s h I s l e s i s
120,000 square miles with a population of 37v°°O,OOO — you
w i l l pardon me for boring you with these figures, but T want
the facts in your minds —
:

The Secretary of the Treasury:

W w i l l not admit we are
e

bored, therefore your apology i s unnecessary.
• ;Gov. W at:
e

G ahead.
o

Spain and Portugal, with a population of

.

21,000,000 and an arrea of 232,000 miles, and Germany with
208,000 square miles with a population of 59,000,000 people,
and Austria v/ith 24-1,000 square miles' and a popuj-atioi: of
41,000,000, we have resources t h a t are undreamed of.

Here

in Oregon we have one-fifth of the standing timber.

There




G

Gov# West

2811

is enough timber in Oregon alone which can "be cut and sawed
for ^lo a thousand feet, which would brir,g a sum in which
is five times the national debt.

And by the way, that*<w ."
.
-

reminds me of some of these old conservative bankers, and
our friend here on the right and the rest of them, if you
only knew how hard it was to borrow money from them, you
would know how strong the financial instinct was,

I asked

my old employer, who was one of the finest men and the best
bankers in the country, as I entered the bank, what was the
essential which led up to a successful "banker,,

He says,

"whenever you see a man coining vhc? is an auctioneer, promoting a sawmill or describing the grandeur of the scenery,
you want to lock the vault and reach for your six shocter. "
So that " find myself now harking
X
and the timber industry,

back to the saw mill

£ut \,imea have changed since that,

There was a time whai the baiker looked with suspicion upon
the sav/mill man, but most o. our fortunes tod&y have come
:r
'
from that quarters

? r were overlooking one of the greatest
-e

resources of this state at -chat time,

' r Vx%mk " £ *#

Those things are all " f - n fully developed now, and
j.ig
the "f orthwest is making f wonderful growth*
t
.

And I want to

say this, that T think v e are entitled to it.
.

I am not




-•"-•••

Cx

••? ~^ (TfSilifrv-' -• S '••*=••"

TiWJf r?t;¥sf

*?^

(JOT. West

supposed to t a l k p o l i t i c s here, but T am going to t e l l you
this:

¥e out here in the northwest have t r i e d to play fair

W are people who stand for good judgment.
e

Ye have been
7

with t h i s administration right down the l i n e in our policies
and we have not been asking any favors.
b-3 given a square deal,,

All we ask is to

¥e did everything we could to

"bring abcut t.he passage of t h i s lav/, because we wanted to
put the "business of the courier/ on a firm footing,

T was

glad tc see the administration get the glory, because T
l i k a the a&n5.ni s t r a t i on and happen to be a Democrat in
p o l i t i c So

Eut nost of. th^se gentlemen around here arc

Republic an S
o
not.

I wish they were a l l Democrats, but they aro

But when i t comes down to a matter of business ar.d

good judgment, they are a l l rea,dy to join hands to help
along with the show, and they have giver, every support in
t h i s thing e

yhey do not expect anything in return except a

square deal, and t h i s Northwest is entitled to something
in that l i n e .

T

7e have the resources, we have the t e r r i -

tory and we have got the good people, and 7 think we are
e n t i t l e d to i t ,

that is if the combined c a p i t a l of the

banks i s sufficient

to do i t .

'^e dc not expect an

impossibility, but if i t is possible we want i t , and we




West
est

.

2813

.. •:.::.r,

g e n e r a l l y get v/hat we go a f t e r in t h i s country, if we have
- c u m?

to send the n i l i t i a a f t e r i t . * ^
The Secretary of the Treasury:

--

u t #

^#:^

:

_

Governor, :>-ou v:ill cer-

t a i n l y get a square deal, and you vrill net have" to"send the
m i l i t i a to get it«

(Laughter and applause).

••••*•' • y-€:':M:i^.

¥e would "be glad to have you take a seat with us nov;,
Governorr^'^-^*1^*' ^^^ s - 7°
Gov. 7 e s t :

Thank you,"*

The Secretary of the Treasury:
now? - tf'-^e «?Rjw^
ITro M i l l s :




Yes.

^
TS the 3ank Examiner here

£814
Bl

,
V

s
• >

- ^

v,
.*

. . .

,, ^ .
. —

<*«

»

>

v

-•

••••

.

- •

'

"

"

.

-

•

STATEMENT OP S , G. S..RGBKT .

•

^ec.rartary of the Ireasirry:
and

position..

Mr Sa^^ant:
of Washington.
°

i

... , • . . . - .

Ycu may s t a t e your name

.,. , ~ ,-.. - ,. .,^

.•...•,• -,.-

S. G. Sar@snt, superintendent of tank, state
*. ^ v ^ > r ^ . r i v - «

?/;;« t,,.,-»,,•',

* Ci- .JJS^:.

,>,££

tj-;.e£-&-lZi

2•••

IDha Secretary of the Treasury:

. i l v M

A,^*i.wi

-

- CHAT'S,t.fi.1

S

You know our problemc and

if you have some data you want t o submit, - e will hear i t .
w
^ Mr Sargsrnt:

I dicl not Iciow that I_was t o te called on, an,

I only have what I had in m roomy

The number of bants

under^ s t a t e supervision is 170f with a t o t a l capital and surplus of£ll978Q9GQO.

The rediscounts wera §70,000 and the

b i l l s payable |2Q2,QQ0, making ^272,000 borrowed money. The
deposits commercially, in round numbers9 wera $34,900,000;
time and savisigs, $20s700,000; postal savings, ^750,000-; due
banks, $3,800,000; making a t o t a l of $60?150yQOQ. The
t o t a l ra sour cos cf tha s t a te banks amomnt to $74#0OO,0QQ.
*A

4,

In reply t o a l e t t e r from the department requesting the

Qxpressicn of opinion of the Federal Reserve system, thoy
replied as follows:

Twelve state banks signified t h e i r in-

tention of joining a t once.

These tv/alve representing

c a p i t a l and surplus of §l?0Q0:0Ga»

77 are considering i t but

are undecided at this t ime c representing capital and surplus




B2

'

of $ 6,400,000.
>

S. G. Sargent

•
"

' . . . ' .

.. j-;';>.<,>

00 do not expect t o ooin, r e p r e s e n t i n g

c a p i t a l and s u r p l a s of $3,100,000.

El did not r e p l y , reprV-

s a n t i p g a c a p i t a l and surplus cf §1,200,000.

';•%.,/''"

Of the 170 state banks, ILO have the necessary"capital
t o entitle them t o membership.

The t o t a l capital and surpl;

of thasc amount to £10 ? 750,GOO/^v*:^
22-V2 par cent of the leans of the state banks are seour
by real estate mortgages.

1'bere is nothing in the Oregon la.

pre Y nt ing state banks from subscribing for stock in tl»
D
Federal Reserve system, as state banks are permitted to invest*
25 per cant cf their assets A stocks cf other corporations.
n
The Secretary of the Treasury:
as sets?
Mr Sargent:

'c ;f
Yes.

25 per cent of their total-

- •r

Glne Secretary of the Treasury:

That is an affirmative

power which woiild soen t o put the state banks here in a posi<t i o n to subscribe, if they want t o .
Mr Johnson;

*

Hare is the law covering that. (Handing

paper.)

• -•' - -

£he Secretary of the Treasury:

-

:

~

That seems t o be a negative

ly aff-lrmati^oly power which would sojm to make it a l l right.
Hr Sargent:




Yas, there is nothing else stated anywhere.

I f 'J,Ll~fJ),-'"•>"' ' '' ."

S.S. Sargent

B3

Thoso are a l l th3 figiiras I YL d prepared.
The Secretary of the Treasury.
ground*
;•

T

I think that covers the

;/ill yoit f i l e that with the reporter?

Mr Johnson:

This i s the annual report with a l l the

a bst ra c t s .

• i l ; -*-: •:>£.;..

The Secretary of the Treasury:
t

•£

That might bd attached also

(The papers submitted by Mr Sargent were f i l e d . )
The Secretary of Agriculture:

You have no doubt if e bank

were established in the northwest it ought to be in Portland
**

Mr Sargent;

I think s o , yes.

The Secretary of the Treasury:

I snspeoted that was your

view s o strongly that I did not ask the qttestion*

How, what

would be your second choice, i f a bank should not be located
at Portland?

Y/here would you say, considering the general

conditions here of the Pacific Coast , would be the next most
l o g i c a l point t o put the headquarters of such a bank?
Mr Sargent:

San Francisco.

Tho Secretary of tha Treasury:

You would not think Seattle

was tho noxt best?
Mr Sarhort :

Ho s i r , not for Oregon bank.

Vary few Oregon

banks carry balanoss in Seattle.
The Secretary of the Treasury:



What is the law about the

reserves of the state bank, how touch are they required to

•\'"'"-v'- : 's;' ' • " • V 'V ,:

B4

,

.

carry?

t;

• ;., • - •
—

Mr Sargent:

S. G. Sargent.
v

\

'

2817

£ t f e : /^rii>>-•;*•'.?"..• ' jt-r-r. •i>'A^vfc&i.tf'^;&'-:;

15 par cent outside of c i t i e s of over

5Ov0GO inhabitants, and reserve "banks aro required to carry
25 per cent against their donand deposits and 15 per cent
a ^ i n s t their time and savings deposits.
?*. The Secretary of the Treasury:

Then you permit the bank

to- count balances v;ith r<3S3rve banks as reserves?
Mr Sargent:

Yos s i r .

The Secretary of the Treasury:

To what oxtent have you

reserve agents in Oregon, h w many banks are reserw agents?
o
to Sargent:

Kearly a l l the Portland banks and banks in

towns like S-alem, Eugene and Albany and towns of fron four
to six or seven thousand inhabitants.
The Secretary of tha Treasury:

T bar a is a reserve agsnt
V

pernittcd to keep i t s reserve, or i s i t rogaired to?
Mr Sargent:

It is not required.

The Secretary of the Treasury:

You have not any central

reserva back of that?
Mr Sargent:

Y- hava no central reserve system,
/3

Tho SQcratary ox the Treasury:
kaep the ordinary rssarva?
Mr Sargent: YJS.



no.

So theybare only required to

; ^

•'

S.

••

G. Sargent

"•••",••

The Secretary of the Treasury:
of

o t h e r

"banks?

Mr Sargant:

m

. ^ _ ,.

' - : > : • •

m

" ' : • >

-*:;-_

.

2

8

1

8

:J-.,.»•»?,.

And than hold tha reserves

. - : / , ; • - V ^ ; ' : , : ^ : . i , • : - : " . ' . . " . . '•••.;•'

^';..•••..,::'.-..-:•.••:.:•^.;V.:

Ho, they are required to keep the same reserve

that c bank in a town of over 50,0QO is required to keep.
The Sscretary of tho Treasury:

YQS, I understand that.

That is the very system that the Federal statute is designed
to :

annihilate.

Mr Sarfcent: YQS.
The Secretary of the Treasury:

Is there any thought of

abolishing the reserve systam in this state?
Mr Sargent:

Zt saocs hardly advisable feo make the reserve

regulation for state bank so low as 12 or 15 per cent,
whatever i t i s in the Rreserve Bill.
The Secretary of tho Treasury:

^Vhat I mean is that the

Federal statute i s t o eliminate Reserve agencies.

After

three years no bank can count any balance with another
bank as part of i t s reserves.

Is i t the purpose in Oregon,

so far as you know, to maintain that system here, pemitting
one bank to count as reserves a balance in another bank?
Mr Sargent:
repealed.

Well, 3 suppose our lav; would have to be

1 do not know what the intention i s .

The Secretary of the Treasury:



I moan, foas there been any

2819

B 6

:•'.:-.

*

discussion of

Uft:

Mr Sargent:

g. Gr.Sargent
^;

^y&

.

f

f

Ho, 2 beliave not.

The Saoretary of the Treasury:

I t leads t o pyramiding of

r e s e r v e s , as you know, and of course i t has "boon found to
te & very otje ctienable and pernicious system under t t e
n a t i o n a l "banking law.

I think t h a t is a l l . W are very much
e

obliged t o you.
FURTHER STATEMBHT OP KR. A.L.MILLS.
Lir M i l l s :

This morning you asked me to divide tha s t a t i s -

t i c s between s t a t e an& national bank, and I hav6 had that
prepared during the noon hour.

I do not think i t i s necess-

ary t o re ad i t ^
The Secretary of the Treasury:

You mi^ht just give the

t o t a l s , if you pleasa.
Mr M i l l s :

The f i r s t question was'With which

c i t y , Portland

Spokane or S e a t t l e , do you have the l a r g e s t banking balance?"
Th3 answer from the national banks was $11,OQQ',OOQ and
from s t a t e banks ^8,000,000.

1 w i l l s k i p t o question 9.

"Your f i r s t ohoioa of the above mentioned c i t i e s for a
Federal Reserve bank."
29 for



The national banks, 108 for Portland,

S e a t t l e and 35 for Spokane, with a c a p i t a l of

*

B7

.

•:•••:$'

A.L.Mills

4>-

2820

.

#11,000,000 for Portland, <;*3,000,000 for Seattle and
|2,00a,000 for Spokane, of the national banks.

O the
f

state "banks there wora 188 that preferred Portland, 77
Seattle and 120 Spokane, -with a capitalization of the state
banks of $7,000,000 for Portland, ^4,000,000 for Seattle
%nd -|4,000,000 for Spokano.
As to the question about entering the reserve system,
which I think you v/era anxious to understand, of the national
bank 183 voted yes, reprosanting a capital of $20,492,000;
no, 2 banks in the thrae s t a t e s , representing a capital of
£322,000; "undecided seven national banks representing a
oapital of #561,000.

In other words, ^20,400,000 of the

national banking representation mould come in as against
$600,000 of the -undecided and those voting no.Of the state
banks 97 voted yes, representing a capitalization of

The Secretary of the Treasury:
Mr Mills:

I think so.

a oapital of #6,000,000.
of §7,0OQ,000.

Are those eligible banks?

189 banks voted no, representing
1&9 were -undecided, with a capital

In other words, out of the total oapitaliza-

tion of the s t a t e banks in the three s t a t e s ,

r6,OOQrOOQ
H

decided yes, Tindecided ^7,000,000 and no, ^6,000,000, about



B8

A. xi. H i l l s

one-third yes.

May 3 file

this?

Tha Secretary of the Treasury:
Mr Mills:

2821

If you please.

.;
••

This morning you said you would like to hear

from some of the Portland bankers about their opinion.
Mr Cookingham is the vice president of Ladd & Tilton, the
largest state bank in the northwest and the largest state
bank in Q-rcgon.
The Secretary of the Treasury:

W would be very glad to
e

hear from Mr Cookingham.
STATEM3UT OF EDT.7ARD COQKIUGHAH.
The S e c r e t a r y of t h e T r e a s u r y :

You may s t a t e your f u l l name

residence and occupation.
Mr Cookingham:

Edward Cookingham, vice president of

Ladd & Tilton Bank, Portland, Oregon.
The Secretary of the Treasury:

You night state the capital-

ization and surplus of your bank.
Mr Cookingham:

The capital of our bank i s $1,000,000,

the surplus $1,000,000, and undivided profits about §275,000.
Our bank i s the oldest bank on the Pacific Coast with one
excoption, the national Bank of D.O.Mills, which is the only
older bank upon the Pacific Coast.



It is one of the largest

.

.

.

.••••••:•*•-•-•

••

'•;-

• •/- -

B9

^

^

-

^ -

.

.

:

.

v

.

. .

; , . : ^ |

2 8 2 2

Edward Cookingham
^ • j t , » ,

, ^

A -

.

s t a t e i n s t i t u t i o n s west of the Mississippi Rivar, and
i s the l a r g e s t bank from point of deposit in tho state of
Oregon, even l a r g e r than tho national banks-1
The Secretary of tha Treasury:
Mr 1

* Cookingham:
.

What are your deposits?

Our deposits are nearly ^14,000,000.

The Secretary of the Treasury:

How, yo"n know ths problem

confronting the Committee, and we should like your best
judgment as t o whether or not i t would bo advisable at t h i s
time t o organize more than eight of these Fadoral Reserve banks
i n tho country.
Mr Cookingham:

V/hat is your best judgment on that?
From an economic and banking standpoint,

i t i s my view tfcat the fewas the number of regional banks
designated, t h e b e t t e r .
The Secretary of the Treasury:
Mr Cookingham:

For tho time being?

For tha t i n s being.

The Secretary of the Treasury:

Are you influenced i n that

view by the faot that the Federal Reserve Board may, l a t e r
on, with the development of the country, o r ^ n i z e additional
districts?
Mr Cooking ham: Yes, 3 believe that —
The Secretary of tha Treasury:



flexibility could be provided?

So that elasticity and

-,,,.. Edward Cookingham.
Mr Cookingham:

Yes, I balieva tjsat should b3 kept in

mind by the Federal Reserve Board, A - Wizte fcr/34
The Secretary of the Treasury:

2s it your judgment that

i t would be wise to organize at this time a bank in thesa
throe states separately } with such a small amount of available
banking raaoureos as ycu could get?
*

'•
if

Mr Cookingbam:

I thxnk, Mr Secretary, that/we could com-

mand the capital sufficient to provide the minimum capital
-

of $4,000,000 for a regional bank that w ought to have one
e
in the nor"chvs9st.

The northeast is a very large region.

Portland is 771 miles from I3an Francisco, and the states of
Washington and 3 da ho, as you know, are very much farther
ramoved.

And if i t were, possible for us to comirand the

c a p i t a l . I believe that we should have a regional bank in
this

district.

The Secratary of the Treasury:

Assuming that that capital

could not be raised, h w do you think this district should
o
be created, and what states should be embraced?
Mr Cookingham:

If the capital cannot bo raised here., I

think that the Pacific Coast d i s t r i c t of California, Oregon,
Xdeaho p.nd Washington should ba made one d i s t r i c t .
The Secretary of ths Treasury:




What would you do with

/'•$, -<^¥'>V .V*^""^^ V^"/

B

Edward Cookingham

Nevada?

M}

'

• 2824

^ " & ^. ^^-•^^ ^*:>^-./!?#<Sft»i. Ii4%%tm lm

Mr SookAngbam:

Isvada also, I would include lievada. And

the regional bank, I think, should be located at San FrancisGo.

But I think the reserve Board should ba*liberal in

the matter of stationing branches in the reserve d i s t r i c t s .
I do not think that the establishment of branches is at a l l
harmful, but on the contrary

will be very beneficial, and

as they will conmand the full strength of the parent bank,
i t is cy judgment, and I think w are justified in asking
e
for the establishment of branches properly distributed throughout this large geographical district in the northwest, if
the regional bank is at San Francisco.
The Secretary of the Treasury:

Considering the necessities

of this region, i t s constant nooassitios for available
oredits, and the increasing need of such credits to taka oare
of the constant development of the d i s t r i c t , would i t , in
your judgment, be wiser t a organize a sufficient amount of
t e r r i t o r y as a d i s t r i c t n w in which yon would have a strong
o
bank, capable of taking care of that development, rather than
to divide this t e r r i t o r y into weaker banking units.
Mr Cookingham:

In regard to that, if I havo under-

stood correctly and do s t i l l understand correctly the spirit



B

Edward Cookingham.

:

•

' V

and scope and intent of the Federal Reserve law, it is
that i t s entire power throughout the entire country
shall be oo-ordinatod through the Federal Reserve Board
in Washington and that the Central Body, having supreme
autocratic power and authorized exprossly by the law to
transfer funds at will from one part of the country to
the other, by that method of co-ordination, the number of
banks does not cut such an important figure as it otherwise would.
The Secretary of the Treasury*

well, I think you state

the case a bit too strong y when you say the autccratio
power t o transfer funds from one part of the country to
:;•*;•• 'ism

the other.
-Mr Cookingham:

V/Q11,

to require rediscounts, which is

substantially the sane.
The Secretary of the Treasury:

You can require one

to rediscount for another upon the affirmative vote of
five members of the Board, but naturally, questions would
arise as b^waen the banks as to the character of collateral
whioh one bank would take from the other, and it would
not , therefore, be a power which could be exerted in the
"onlimited degree you have just expressed.



Mr Cookingham:

Well, some of the banks must

. • £ •;•."
:

:

.-)•

-''A.1'.

:

' - / ' ' '•', 't ' v "'^'j^f:

E8E6
be of very much g r a a t e r s t r e n g t h than othars in oth3r
eactions.

for i n s t a n c e , the UGVJ York bank and the Chicago

"bank w i l l be very much more powarf-ul probably than a bank
i n t h a south, and i t has bean my conception of the Ian
t h a t the south v.ould need t o have help i n the shape of
rediscounts from the other regional banks in order t o make
the system as f u l l y successful as you intend i t t o be.
The Secretary of t h e Treasury:

Mr Cooking ham, taking

these three s t a t e s of Oregon, Washington and Idaho, would
you c a l l t h i s a borrowing d i s t r i c t or a lending d i s t r i c t ?
Mr Cookingham;

You mean from the standpoint of active

banking c a p i t a l ?
The Secretary of t h e Treasury:
Mr Cookingham:

Yes, of active business -

I t is a lending d i s t r i c t with reference

t o i t s own i n d u s t r i e s here, t o u very considerable e x t e n t .
I t i s a borrowing d i s t r i c t i n the matter of mortgages on
farms and mortgages on large ofiice buildings and i n v e s t ments of t h a t c h a r a c t e r , where large fixed c a p i t a l is r e quired, which can be procured from the large l i f e

insur-

ance companies or from foreign loan companies i n much
g r e a t e r q u a n t i t y and at b e t t e r r a t e s than Oregon, Washingt o n and U&eko can afford to loan.




I t i s a developing

S f c

' ' - '

•

•••

• • ' ' • '

:

'

.

».,.'..

. • • ' ; ' - • ' ' • • ' • - ! • ' : * • :

' ; ' \

. ; , . ' • - " • ' - * i ! * ^ » M ^ ^

1

" * ' ' ' r - . • - • • : ' • ' ; • •

' ; • • - ' •

" • '

:

'

:

. .

"

•

'

•

'

•

'

•

•

.

•

•

•

•

"

' • ' ' ' . .

^ . - ' * ;

:

^ts_

B

Edward Cooking ham

2827

country and w need a l l our capital for our ourrent
o
operating expenses.

Our current operating capital is

a l l required, and v/2 arc unablo to put largo sums into
fixed invcLtm,nts.

^ f t ^ ^

The Secretary of the Treasury:

I am speaking of the

commercial needs of the d i s t r i c t , I moan for commercial
and industrial needs and those combined transactions which
enter into daily coismerce and activity.

Is it in that

respect a borro?;ing or a lending d i s t r i c t , I mean to say
i s there a surplus of available banking capital and
resources now to take oare of your own usos?
Mr Cooking ham:

Only for our own usos; w have no money
e

to loan t o buy paper frora th-3 outside to any appreciable
extent.

Zt is done to some extent.

The Secretary of the Treasury:

Are you able to take

care of the extreme seasonal demand without rediscounting?
Mr Cookingham:

Hot entirely, s t i l l we do pretty gener-

a l l y , take care of our requirement here.
Tho Secretary of the Treasury:

When is your extreme

demand?
Mr Cooking ham:



Our

extreme demand comes in ths fall

season.

• . - • • . . ,

The Secretary of the Treasury:

Atoays? <.V?;

.Mr Cooking ham-.

Always in the f a l l season when the
the
whaat is being marketed and that is the tame of/greatest
s t r a i n which is put upcn our "banking institutions in thi-1
section.""1

t e

*-.#nilc-iS axid 3 half -in ax:•**-,* & i , ^ 1 . ^
f

The Secretary of the Treasriry:

Canyon ^udge, of courr.

" there are figures and " y consulting the s t a t i s t i c s we
*
b
could pick i t out, "but perhaps you have i t in your mind,
to what extent do you have to rediscount or "borrow,
" from outside to take care of the extreme &ercau4?
'^ **' Mr G 0 okiug ham:

Qur "bank ne ve r "bor rowe d anyfc hing,

"'• speaking for cur own 5vnst3itutiont siince the panic of
l

19C7, not a do l i a s -

W do, of course, take care o±
e

othar "banking i n s t i t u t i o n s In t h i s section, "but we "borro-.
nothing ourselves.
-••

'

•

'

.'""•~-';i

'

"

-:.* The Secretary of the Treasury:

'

'

* •

r

*

I s that "because you

simply stop after yoTi exhaust your available spending
c a p i t a l , or "because you never exhaust i t ?
i t a l i t t l e awkwardly.

That ezpresse"

Y/hat I mean is t h i s , do you

simply stop, A other words, leading money, when you
n
have employed your available capital?

3n other words,

would you be willing to rediscount to take care of the




B

Edward Cockinghain

'

8829

additional demand in excess of your o n capital?
w
Mr Gcokingham:
a little

X will have to answer that perhaps at

length, lir Secretary.

W endeavor always to run
e

with a very strong reserve, usually from three quarters
of a million to a million and a half in excess of the
legal requirements of the Iaw3 of the s t a t e .

B the
y

adoption of that policy we usually keep in strong position t o ta?^e care of the peak of the load when i t comes in
the f a l l .

Of course 7 do not moan to say we can supply
,

every dollar of capital that we ars called upon to supply •
during the whsat moving see.scn, because sometimes the wheat
moves with great rapidityj. and when pricos are high it
takes an enormous amount of money.

But the other "banks are

a l l doing t h e i r share, hence v/e have "been able , without
borrowing, to take care of the wants cf our own particular
•-•••.---;--V:^-::- •'•'•

customers, some of w o are large.
hm
.

The Secretary of the Treasury:

•

- "i

_?***

•Tdt^JVJ^-

far-?-.

• • •

'

What I m an is t h i s ,
e

suppose there was an excess of demand over and above your
a b i l i t y to supply ±t with your o n capitalw
<"•' • • » • • •

Hr Cookingham:

Yes.

']'

The S e c r e t a r y of t h e T r e a s u r y :

/

**

^

.

s

- J

,,/.--,v. •

Do yo-^ s t o p meeting t h a t

demand a s soon a s you get dcwn t o t h e minimum r e s e r v e ?
Mr Cookingham:




We a r e obliged t o , yes s i r .

..

8

Edward Cookingham
The Secretary cf the Treasury:

never rediscount?
Mr Coo3ringhaia:

'

'

"

£8$t

In other words, you-

•
Ho s i r .

'

The Secretary of the Treasury:

, . . . - " ' ,„*•
For the purpose of takii

care of the excess demand?
Mr dcokingham:

Ve never do.
/

*

The Secretary of the Treasury:

\ *

That is exactly the poinL

That seems to " e the practice generally of the banks of
b
the country, they rediscount with reluctance . J
iir Cookingham:

I think you understand why that

She Secretary of the Treasury:

is.

2 know there is a common

and foolish sentiment that i f you rediscount the bank i s
weak or rather over-strained.

Do you have that same feel-

ing that the national banks have?
iir Gookingham:
yes,

V/ell, we are governed by the same feelin^

although we recognize that redisoouiiting i s an entire:

legitimate function of banking, and should be very generall y used by the banks when necessary, in times of stringency
or w h ere there is an extra or di nary d e maud. , ^ / -^ ^ ' ^ ; ^
The Secretary of the Treasury:
mate demand.
Mr Cookingham:

What 2 mean i s a l e g i t i r-.--rr:-.rf"-^-^&rr"!-'

Yes, but the fear that a l l the banks

have of exposing the .fact t o the public that they have bee.1




•

' •

, '-.y. •••V-' "•'"'•4^"'

SdVi/ard Cookingham
compelled t o Lcrro-.v i s t h e

:

&r"&$

S8ol^,:p

^ v .,one t h i n ^ v / h i c h koeps a l l

good banks from re discount i n g .

I t i s a s e n s e l e s s prcposi

t i c n , but t h a t i s t h e v/ay i t i s looked on a l l over t h a
T

Ju>ted S t a t e s . ~,iWt> ^,* >.,•:. . i H

- ••
to, fa-:1*

The Socretary oi the Treasury:

I t i s , of course, a

per ootly senseless proposition, and yet i t is hard to
combat an idea oi that kind.
Mr Cookingham:
.

Yos.

One bank cannot combat i t .

The Secretary of the Treasury:

To that extent you auto-

matically limit the business of the count ry.;•;. •
Mr Gookingham:

Yes s i r 3 we do.

T|23 Secretary of the Treasury:

-;J
The Federal Reserve

Aot7 of course, isdesigned to make rediscounts popular.
Mr Cookingham:
-

Yes s i r , and I hope i t vdll-

The Socretary of the Treasury:

And therefore £ive the

alaotiotty to credit which is demanded by the extreme
demands y/hich are made by the necessities of trade, and
ccmmarce.
Mr Gookingham: Yes s i r , and w consider that one of
e
the very strong features of tha b i l l , and one of i t s very
beneficial features.
The bocretary ol the Treasury:
your bank to




Is it the intention of

enter th6 system?

Mr Cookingham:

In regard to t h a t , Mr Secretary, I nay

•

•

•

-

•

•

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•

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<•

•

•

•

Edward Cookiugham

•

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2832

say that the attitude of our bank towards the Bill is
distinctly and in every way friendly and not at a l l v
hostile, but the question of the entry of state banks
into the system i s one that has not been clarified to a
sufficient

extant yat t o enable us to decide.

X do.not

see h w it would be possible for us to decide before the
o
&5rd of February, which is the date of the expiration of
i'

the time set by the Committee.

%€: The Secretary of the Treasury:
•$|sf banks?'--^f-^MpL

~*. 7'$$$'rp'^" ' " '
That i s for national

••••:;.L^:ur.i:.:,r^; •

4

M Cookingham: Yes.
r

^ft«;

The Secretary of the Treasury:

O course, you can com:
f

in l a t e r ; there i s no limit on the state banks. •
'ficrr53 « 2, Mr Cockinghad:
Xt
'

But I would like to call atten-

t o that one point in regard to the state banks, beet
i t will hinge the attitude of a good many of the
state banks in the northwest, our own included,

frith

m oiariii •

our million dollars of capital and million dollars of
surplus, w would be contributors to tha extent of
e
#12Q900Q> to the reserve system, which is a fairly materi a l sum in the Eorthwest , especially considering we are
short of oapital.




... - . . . ( - • (
B

Edward Cooking ham
Secretary of the Treasury:
Mr Cooking ham:

•

2833

I t is anywhere, I think.

How, the Act provides, and I have be on

giving t h i s 4ot a good deal of study, because our people
'..•?.•• -j^'-tv

t*O.V. *3.t&. » ^ r ; U v - j . r

,•/•:•'r-.v. - t ^ x ^ ' .

-.-•'::

a l l fse?. so friendly towards i t , and "because our disposition is to enter the system, and I have not been able to
discover any rules that have yet been issued governing the
ontry of state banks, and I have written off a quotation
.S&&3-&

w&3£

t t , £M: ; 0

•" ••.-•••. :.••

-.

.. . v>; ; ,.v

from the Act, section 9, with -which you are very familiar,
of course.

The organization Ccnraiittee, or the Federal

Be serve Board shall establish by-laws for the general government of i t s conduct in acting upon applications made by
state banks.
SCOT,

^

u n t i l the state banks know just v&at tha regala-

tions and by-laws are t o be , I do not see how any state
I n s t i t u t i o n can declare i t s e l f , and I think that is one
reason why there have been G few state banks in the United
O
States which have applied for membership. :•
The Secretary of the Treasury:

>

r

Those regulations have

baen issued and probe.bly you will receive them any day in
the mail now.
Mr Cooking ham:

3 sae. There are other points besides

that that, have an effect upon the entry of state banks.




Ill •

i

• . . - , , . . .

B

-.

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Edward Cookingham

28^4

2 dc not know that you would want to take them up now,
but they are important , and I would e i t h e r like to man** ,,,,
t i o n them now or just t a l k with you l a t e r about them.v
Tha Secretary oi the Treasury:

For the record you might

mention them, because we should like t o know what the poin
are.

They may have t o be dealt with by the Fedaral Reserv.

Board when i t is organized. , . . - " / , • : .;/."-. ., - . . . ' . . . , . .'•••^'i.^-.'z
Mr Gookingham:

One point i s t h a t the e l i g i b i l i t y ox

s t a t e banks i s affected by the l i m i t a t i o n of making loans;
in other words, the Oregon stata law permits banks t o loan
. £0 par cent of t h o i r c a p i t a l and surplus t o one borrower.
The Secretary of the Treasury:
changed.

That w i l l have t o be

Each s t a t a bank entering the system w i l l have t o

_"". oer i f y t h a t i t s e l i g i b i l i t y i s complete in respect t o excess loans by c u t t i n g any 20 per cent loans i t may have dov
t o 10 per cent t o confoim t o th-3 law.
,

-

M Cookingham:
r

.

.

.

•

•

•

'

,

"

Bow, I observed in ona of tha H w York
e

papers that you have issued a certificate for the state
banks to sign on making application for antry, that they a?
eligible,

iiow, before a state bank can become entirely

eligible and certify that i t is e l i g i b l e , it must proceed t
out i t s loans down to the 10 per cent limit, not an easy
thing in ttese times, and one which might work considerable



B

Edward Cookingham.

2835 " ' ^

hardship upon good clients who are entirely responsible.
ITow, that is an important point.
facilitate

Of course 3 we might

'. .
-?„

anl help t h e i r borrowing the money elsewhere,

but i t must be done before we can certify to our e l i g i b i l i t y , and no matter hew anxious w are to enter, we are
e
prohibited from certifying our e l i g i b i l i t y by that conditi'
The Secretary of the Treasury.

M offhand opinion would
y

ba that that would not be a prerequisite to membership.
- .J*ir Cookingham:

I a very glad t o hear t h a t .
m

The Sec_3tary of the Treasury:

3 believeV ::

would take the view that the state bank

the Board

joining the

system would have a reasonable time within which to make
those adjustments.
Mr Cookingham:

If that ruling could be made, I think

that would overcome a very serious objection, r,'!&??y/.:
n The Secretary of the Treasury:

I t is something towhicl

we will give attention.
Mr Cookingham:

^

• •''

;

How, there i s one more provision of the

law $n regard to ownership of stock.

As you know, as you

have just seen,the Oregon state law permits stats

insti-

tutions to invest not more than 25 per cent of their asset?
i n stock.

Hew, many of the state banks, including our o n
w

have stock, not purchased for speculation, not purchased




i

£

•

Edward Cookingham.

*

2836

for any purpose of an illegitimate character, but stock
which has come into the possession of the bank in the

%;;

usual process of business and which would naturally have
been acquired in the gro-jth of a private bank like ours,
which has been doing business over half a century.

low,

what w i l l be the attitude of the Board in regard to those
stock holdings?

Will the laws of the state continue to

govern the state bank, or will they be compelled to cbserv.
the requirements of the national banks, which substantial!;
prohibit the ownership of stocks.
Che Secretary of the Treasury:

M recollection of the
y

provisions of the Act i s that there are only certain speci:
things that you myst conform t o if you become a member.
Mr Cookingham:

I have a memorandum of i t here, Mrv
%

SecretaryThe Secretary of the Treasury:
quoted^

Read i t . if you have it
'"

Mr Cookingham:

:v i: i

I t i s in section 9-:

^ ' |£W:(ti[*;".^:;'-":P
"Any bank becoming

a member of the Federal P.eserve Banks under the provisions
of t h i s section, s h a l l , in addition to the regulations
an.t restrictions hereinbefore provided, be reoaired to cor
form to the provisions of law imposed on the national bant
respecting




the limitation of l i a b i l i t y which may be inac.i

B

Edward Cooking ham

. ' 2S\>7

wy any perscn, f i r a or corporation t o such bank."
is

what we have *a.st covered.

That

Then the prohibition

st making purchases of or loans G stock of such
n
bank.

-

.

^

, _ .^t^y^^-^'

The Secretary cf the Treasury:
chasing i t s

The
Q^

~".

•-.••..

-/•r^.^>,^•.,•••.•

That relates to pur-

" ,- ' '

I aia very glad t a- hear of that inter_^i ^

.

Secretary of the Treasury:

'"•"

^;'^'::>-,:.-:

That i s m inte rpre tat
y

course you cannot take that as aathoritative , "because
ld

.

.

o n stock and making ioars on i t s o n stock.
w
w

ilr Goolxingham:
pretation.

" '

have to s o t on i t formally, but t h a t is m own
y

Tiew, there is no question about i t .
witth
"Mr Cooking ham:
2 would say that/ those two matters
clar±JFJrij&. I think ymi would have a large number of
s t a t e banks enter the Haserva system, that is m .judgment
y

. . t \ If you w i l l make the conditions attractive to the state
banks and make i t possible for them t o come in without
large sacrifices

on the part of themselves and t h e i r

clients —
The Secretary of the Treasury:

As you know, the

national banking Aat prohibits any national bank from
purchasing i t s own stock or making loans on i t s own stock
Mr CookAngham:




I know t h a t , yes s i r .

_

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Edward Cooking ham

The fcocr tary of the Treasury:

^ J

The requirement here

i s tha- if a state bank should be cons a member of this
system, that i t should comply with tho Federal ststuto 1
that regard and make no purchases of i t s o n stock or m
w
a
loens on I t s own stock^r Oookingham;

,yaa61,:r.:

iCUll

Rs ,. i j S 5

""

That would b 3 vary easily complied vdti
<

•and i s an entirely roasonablj provision. . .
The Socr t a r y o. tho Treasury:

.

There is no difficulty

in t h a t , and th3re i c no purpose in this Act to impair
the ordinary powers of a state bank which i t exorcises
xmder tho state law, except in so far as there is a specific provision in the bill*

*&'£'' * *

The Socretary of AgricuD.tu.re:

'

'

Of course, i t i s desir-

able t o have as many banks in the country in this system
as possible, and whatever Board is going to be oreated
is goin~ to administer this in a reasonable way within
tha discretion given them by law, and I do not apprehend
any

trouble.

^\"'"::"':"':

idr Cookingham:

r

.

.

.

-•—•;:-•:-••-:.••:•-•

;ith thosa two important points clar.
»

ified, I think i t i s going to make i t very much more
easy for the state banks to enter.
Secretary of the Treasury: W will see if ..e canno
e




,

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B'

Edward Conkingham

j.

-

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£839

deal with those two points promptly, T mean more offif. T «3 1 ~\ " T
T
V-/ J _ C L J L . _ y *
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.

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•••••'•
.

'.<ill the state banks be require

*

"-:":";•.

to

come in bef or e Pe bruary 21st? __ :<; c.,-( i;- -, ~#TJ:-.,^."^ • • ; •
The Secretary of the Treasury:

Mr Cookingham:

They are not required

I did not I:now but that the ruling haa

been made.
'v-iJhe Secretary of iLgjari culture:

Th3 only point, as I

.^ said to you outside the meeting, i s that I think the
state banlis ought to bear in mind that their action in
, ' t h i s matter has a bearing on our d i s t r i c t i n g of the
entire nation, and certainly that i t has a bearing on
tfci - original selection of directors of these reserve
banks.
Ur Cookingham:

Yos.

n Tho Secretary of tho Treasury:

They would not have ar

opportunity to pgrticipr-te in the selection of the
ofiicors and directors of these banks, if they came in
a f t e r they wore organized, .1 mean u n t i l after the next
elect ion 6




Mr Cookingham:

I rcaliza t h a t .

9

;v Edward Cooking ham
The Secretary of the Treasury:

V';>"-'( .^-"^J'ftv;:^ 2840

And so far as the

Organization Conmittee is concerned, i t would be a grea'
advantage t o know "before the 2»5rd of February, for inst.
j u s t how many state banks would become members of the
system,

Then we w i l l knew how much available

t h ra i s to a l l o t to the country.
The Secretary of Agriculture:

,

capital

:v ; -

I t has a v i t a l bearing

G the question of the banking resources of the country.
n
The Secretary of ths Treasury:
Mr CookinghsLi:

And the banking capita

I a glad to get those two points
m

cleared up.
The Secretary of Agriculture:
understand.

That is inf ormal, ,you

^-^-x ,MP;'^

The Secretary of the Treasury:

Bat I think i t would t

e n t i r e l y safe to r e l y upon i t .
Mr Cooklnghsm:
inquiries.

3 understand.

I have had a mraber of

As w are the largest ban& here, they natura
e

look to us as a leader in the mutter*
TJaa Secretary of the Treasury:

3 think the organizati

Gonnrlttee w i l l make a prompt ruling on t h i s question.
k r CookinghaTn:

And tharo i s no need t o submit it

in a moro formal way?




furt.

•/• Z'<, Edward Cookingham
Seer ataxy of the Treasury:

.

£041

Ho, we have i t i n the

record and w i l l take i t up and deal with i t .

You have

a memorandum embracing these questions?
Mr Cookingham:

I just made one of ny own.-

EhQ Secretary of the Treasury:

Suppose you formulate-

the question and address i t t o us formally "before we
loave.

Just e:abc&y i n t h i s formal camrrxin±cation>

Mr Oookingham:

If I cannot get i t done t onight, can

2 mail i t t o you in Sen Francisco?




The Secretary of the Treasury:

Yos.

Jo Ze Ainsworth

2842

STATiilJIEVT 07 J o C, A * S'tfOfl
T>
The Secretary o f the Treasury: * ? T . Ainsworth, will you
s t a t e ;rour f u l l name, residence and occupation?

,\•:,;-£•

if, ,-,•

Mr . AtosTv'orth:
i*

J\ tf7 "Ainsworth, president the United

States National EarJi, Portland*.^"-.:, • v.^w**•.-.. *«->^«.-WT.«
The Secretary of the Treasury:

The Committee vrould like

to know your views as to whether or not it would be wise
to attempt to organize a "bank for these three states with
the limited "baiLfcing capital and resources v/hich would " e
b
a
available, or to organize a larger d i s t r i c t with/headquarte1*
bank somewhere in that
~ Mr» Ains:;crth:
.

district.

I do not think under the Act you could

create a Federal Bank in this d i s t r i c t unless we had outside
c a p i t a l furnished by the government.
The Secretary of the Treasury:

Unless, of course, the

state banks would supply i t .
Mr, Ainswcrth.:

*> x~i-

y e s , i f they would*

The S e c r e t a r y of A g r i c u l t u r e :

- -.

And even then i t i s a

question,,
The S e c r e t a r y of the Treasury:

Yes, T know.

TThat distrie-

would you think would be e f f e c t i v e h e r e , if we cannot




o 0. Ainsworth

' v ^

organize the extreme Northwest, these three s t a t e 3 , into on
would you say these three s t a t e s , including Nevada and
California would make a homogenuous and well diversified
d i s t r i c t ? _,- ; ^

r^sifc^sf.* ^r-x &%£:>:*/*& •: i*n?-?-

Mr. Ainsworth:
,.

\::;..:;-';

I do, yes, sir*/**-. ^^ ^%^ a^«^^%, ^ ;^

The Secretary of the Treasury:

Under those circumstances

where do you think the headquarters "bank should "be?
Mr. Ainsworth:
-

San ^rancisco.

The Secretary of the Treasury:

You would think then that

branches should be established a t Portland Seattle and Los
Angeles-, T suppose*
Mr# Ainsworth:

T think the reserve city should have very

favorable consideration from the Committee for branches.
The Secrretary of the Treasury:
Mr". Ainsworth:

Spokane, for instance?

yes.

The Secretary of Agriculture:

Under that contingency you

would suggest, if not for other reasons, the creation at
this time of eight or more districts?
Mr. Ainsworth:

I should say they should be kept to the

minimum, so that the banks would have some size and power
and ability*
The Secretary of the Treasury: That is all, thank you.




G-3

C. !•• Adams.
STATESOINT OF C. 3>
\

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

*p-. Adams, w i l l you s t a t e

your f u l l name, r e s i d e n c e and occupation?
Mr. Adams:

C. ]?. Adams, P r e s i d a i t of the S e c u r i t y Savings

& Trust Company, P o r t l a n d The S e c r e t a r y of t h e Treasury:

^
You have heard t h e quest-

ions we have j u s t p u t t o t h e s e gentlemen.
about t h a t ?
Ifr. Adams:

What i s your view

,-"„( •'Ify view i s t h a t i t i s nonsense to t a l k about

p u t t i n g a Reserve Bank up i n t h i s country a t t h i s time in
these three s t a t e s .

W had b e t t e r make one l a r g e bank on tht
e

Coast and p u t i t i n San ^ r a n c i s c o , and give us e f f e c t i v e
branches.
The S e c r e t a r y of t h e Treasury:
t a k e membership i n t h i s
Mr. Adan s:

system?

T t h i n k so.

The Secretary of the Treasury:
Mr, Adams:

$1,000,000.

The Secretary of the Treasury:
M * Adams:
T

: 1

-- *-"*\•.'{• > " ' r ; '* "

What is your capital?
^^iC^j^^^r.^
And your surplus?

$600,000.

The Secretary of the Treasury;




js your bank l i k e l y to

That i s a n , thank you.

G-4

'

K G. Crawford,^

•

'•V, :.i:a«l S A E O V 03* E W R C-. CRAWFORD.
T TA H T
D AD
The S e c r e t a r y o f t h e T r e a s u r y :

, 284-5

/„ "'.1

W i l l you s t a t e your name,

r e s i d e n c e and occupation?
Mr, Crawford:

??:•,

Edward G. Crawford, V i c e - P r e s i d e n t of t h e

Luiiib-erman: s N a t i o n a l Eank,
The S e c r e t a r y of t h e Treasury:

^
Do you concur i n t h e

these other gentlemen have expressed about this district?
?fr. Crawford*

T do in a measure, Mr, Secretary.

I think

we ought to have a regional bank in the Northwest, however,
if i t is possible, if

the capital can be raised.

T think

we ought to be entitled to i t ; so far as the strong part
of i t i s concerned, I think that will come a X right.
L
The Secretary of the Treasury:

Yes, but knowing the

limitations imposed upon this Committee by the statute, what
would you say?
Mr, Crawford:

The only reason T think that we ought not

to have a bank in the Northwest i s lack of capital, assuming
that cannot be provided.
The Secretary of the Treasury:

Assuming that to b e t~ue,

would you think i t would be best to include these three
s t a t e s with Nevada and California as a d i s t r i c t ?




Gr-5

E* G. Crawford*

?fr« Crawford:

.

2846

Yes, sir.

The Secretary of the Treasury;
Arizona?

'

What would you do with

'""-' ' "• &'-^ ^r-ri^u.^', f - - V t c , r

The S e c r e t a r y o f A g r i c u l t u r e :

„ ., -"'.•*'

Are y o u f a m i l i a r w i t h the

t r a d e down t h e r e ? tll-'tf%^ %t?*%r*c.hzp. ; # .-»%.*. •*, . i / ^
%
? T

#

C r a w f o r d :

H o . ^ t ' - ; ^ - ; ; ; ^ ' ; f ;••::-/:,. • , ' • : • £ • . » • ; • ' ; • ' ' . . ' ,

The Secretary of the Treasury:
e'•-•--.-•••"

• • '
•

"

'

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^

^

^

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v

^

^

^

^

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-

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y

^

^

-

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•

or with Utah?
, . . . "

'

Mr. c^av/ford: ^Io#
The Secretary fit the Treasury:

put you would think that,

including the two states with the Northwestern states, you
would get a well diversified and homegenuous district?
IT, crawford:

You can* •-.

Y

' The Secretary of the Treasury:

California, Idaho, o re so« >

Washington and Nevada.
vi

~ikt& Crawford:

That would seem the natural thing to do.

The Secretary of the Treasury:

And under those circum-

stances, you would think the headquarters bank would have to
go to San ^rancisco?
Mr. Crawford:

Yes, i f i t i s impossible to raise sufficieii

capital here*
The Secretary of the Treasury:




You believe if that were

0-6

E, G. Crawford.

2847

done you could get good efficient f a c i l i t i e s here through
the "branches?
^•rr. Crawford-

^ ••**«», - lair®1 n-rc'•/>:•& 6 *r ? ttwfc

Will the branches be able to co.iduct the

business expeditiously?

,,

;

?

><n

The S e c r e t a r y of t h e T r e a s u r y : . Undoubtedly.

They ^ i l l

be governed by Eoards of D i r e c t o r s chosen from - ^*r. C! r a v ; ^ o r d :
the parent

They w i l l not have to r e f e r questions to

institution?

The Secretary of the Treasury:

?Tr. Orawfoi-d:

O cuestio.is of large policy,
n

-Yould they be willing to re-discour-t paper

at once?
The Secretary of the Treasury:
The Secretary of Agriculture:

T should think so.
The *.vhole matter i s a

matter of regulation, a- d T suppose the regulations a r e
going to be drawn with a view to the convenience and prompt
handling of business.
The Secretary of the Treasury:

; ^.
The purpose of the b i l l is

to accomplish exactly t h a t .
The Secretary of Agriculture:

T cannot imagine any

regulation ^ould be drawn by the reserve Board or by these
regional banks, putting t h e i r heads together, which would



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.

•

G-7

E. G, Crawford

i n t e r f e r e with b u s i n e s s , because t h e whole purpose is to
facilitate

i t , and the law p r o v i d e s that

they s h a l l discharge

t h e o r d i n a r y d u t i e s of d i r e c t o r s of the bank. *
The S e c r e t a r y of the Treasury:
Olmstead here?

'

y,

That i s a l l .

Tfnot, we w i l l hare Mr,

;

*

I s Mr,
ftolbrook.

STATELIEST OP MERBTTT I . HOLBHOOK.
The S e c r e t a r y of the Treasury:
namen

You may s t a t e your f u l l

r e s i d e n c e ar d occupation?

? r r, Holbrook:

^ e r r i t t L. Kolbrook, Vice-President of the

Merchants N a t i o n a l Eank.
The S e c r e t a r y of t h e Treasury:

You have heard the quest-

i o n s and answers which have been made?
Mr. Holbrook:

^fell, i n d i s t i n c t l y .

b u t could not hear the o t h e r s .
The S e c r e t a r y of the Treasury:

T heard Mr. Cookingham,
.;;_.; ^

The question i s whether or

not i t would be wiser to organize a d i s t r i c t composed of
t h e s e t h r e e Northwestern s t a t e s or a l a r g e r d i s t r i c t composed of t h e s e t h r e e s t a t e s with Nevada and C a l i f o r n i a .
view of the f a c t that

Tn

the r e q u i s i t e c a p i t a l under the Act

cannot be f u r n i s h e d by the t h r e e Northwestern s t a t e s , what
would you say was t h e berit t h i n g to do under the circum


Cr-8

M. L* Holbrook

stances.

•'.,-•***.

Mr. Holbrook:

284-9

.

.

•'

• •vK v , r ' : " : '

of course, if it is impossible to raise the

requisite capital in the Northwest, there is no option, we
simply would have to give it up and go in with the San
pra cisco d i s t r i c t ,

v

T have always very much favored

establishing a regional district in the Northwest on account
of the large territory and the difference in the industries
and resources of this section compared with the San -crancisco
district.

T have always felt we would get much better

service if we had independent facilities to hardle this
territory.

I have always felt and feel now strongly that

practically a l l the banks in the country will go into the
system as soon as they can, and that has been clearly iudi•*.•.-fl-

oated by the testimony here today.

of course, T think they

very properly will wait a short time until they see hot/ the
system works.

That is entirely proper.

The Secretary of the Treasury:
Mr. Holbrook:

That is the state banks?

That i s the state banks.

O course, the
f

national banks will go in, but T refer to state banks. And
if they a l l go in, we should have sufficient capital in this
district*
The Secretary of Agriculture:



Would net California stand

G-9

M. L. Holbrook

2850

the same chance of not being served that Oregon-would?
!&•• Holbrock:

I take i t t h a t San ^rancisco would have a

R e g i o n a l E a n k . r,.~M'^^%&,

\~&%'h&%.*,ymi ..%&?. -••/$i;.t&$•;•$'"

The Secretary of Agriculture!
Not San Prancisco people•
!

Mr. Holbrook!

But who would direct it?

* " "^i$iS'#'*• W^^^iiB^

lw, they would serve that territory in that

section, ^^-^^^^.r^r^yp^.*

Tne bank would be directed

The Secretary of Agriculture:

by directors selected from the entire d i s t r i c t , no matter
how big i t was.

The member banks select the directors and

Oregon would have as much in proportion to say about i t as
California would,
Kr. Holbrook:

Yes, in proportion, of course.
?

have the minority representation.
The Secretary of the Treasury:
*rr. Holbrook:

W would
e

Sj\^

So would Sal ifornia.

California i t s e l f , yes,.but T take it they

would have more than this proportion.

T am not certain, T

have always taken it for granted - The Secretary of the Treasury:
have control.

They could not possibly

T*ie government has three, an£

the e.itire district have six.

jt

the banks of

is not possible that the

c i t y in which the headquarters bank i s located could control




G-10

the "bank.

M L. Holbrook &
.
'-^r^**V ^ ^ - V ^

Kr- Holbrook:

>o, T do iot think th ey would control,it,

adTersely to our i n t e r e s t s , anyhow, "but m /fotion of a l l
y
t h i s ^legislation i s that the design i s to reach the different
t e r r i t o r i e s and create d i s t r i c t s which are homogeneous and
closely allied and that are convenient, Instead of going
clear to ^ew York, we will go to San -mrancisco.

And if we

can just go here, or to Seattle, so much the "better* The Secretary of Agricultu-e:

Ts i t clear that it is

necessary to have a homcgenuous territory?

!For instance,

in the east vie have had two d i s t r i c t s suggested to us, one
reaching fron the Potomac -t:ive:~ to Florida, that i s to say,
the southeastern d i s t r i c t , which is a "bcrtowing d i s t r i c t ,
the cotton d i s t r i c t and corn d i s t r i c t .

* o a great many
vw

people have suggested to us it vfould be very much "better to
attach t h a t section to a highly industrial seption like
Pennsylvania, Ealtimore or Philadelphia,

and include those

s t a t e s in that t e r r i t o r y .
The Secretary of the Treasury:

T:-cluding

the lending end

with the borrowing end.
The Secretary of Agricultureg enuous t erri to ry«




So as not to have a honie--

'^'-TJW'M^.I

2852

M, L. Holbrook

G-ll

•9

Tf. Holbrook:

* - >- . .

*'ell, there are two sides to that.

T have

always had an idea i t would " e "better with the other end of
b
the proposition. "V think i t T s a l l ^ a natter of*speculation
and development under the i a w # ^ f ^ W * ^ ^*"M*
% The Secretary of^Agriculture:

T et

us not forget that the

present individual banks will pass on the paper and securit i e s a s "heretofore, and then that the Regional reserve Banks
will be composed of directors representing these individual
fcanks, no matter how highly diversified the territory may
"be, and you will get men who are familiar with the conditions. *%&
Mr. Holbroela:

'
Yes«

•" ' '/

The Secretary of Agriculture:

" o only through the
Mt

individual banks, but through the branch banks, as well as
through the Federal reserve Board.
Mr. Holbrook:

That is t<-ue.

,A .

,;

The feeling has always been

general that the closer home we could get this service the
more effective i t would be.
The Secretary of Agriculture:

yes, but s t i l l i t would

be relatively intimate anyway.
W. Holbrook: Yes.
The Secretary of Agriculture:




Eecause you f i r s t have your

G-12

M L. Holbrook
.

individual banks and the branch "banks and th,e parent bank
with directors representing the entire d i s t r i c t .
.. The Secretary of the Treasury:

rnhe branch bank will have

a more intimate relation to the community than the head^ r ^ ^ ^ i i k _itself.
> Vir. Holbrook:

.

^

if

.

^;':t^..o?^^;||

•

Ts that so?

w

The Secretary of the Treasury*

You have seven directors,

and they are more or less local to the branch.
thank

you#

v

:
r;-^.

-$••..•

That i s a l l ,

'•*• - *--

. , Now T t h i n k we w i l l have t o push along a b i t *
some of t h e s e out of town gentlemen*
-t

""""•"

There a r e

Who a r e they?

STATETIE?>>T OP T. J . MAHO^EY",

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

"Mr. Mahoney, w i l l you

s t a t e your name, r e s i d e n c e ar? d occupation?
Turr. ilahoney:

T. J . Mahoney, Cashier of t h e p i r s t Mational

Bank, Heppner, Oregon.
The S e c r e t a r y of t h e T r e a s u r y :

._*'';
Do you r e p r e s e n t anything

i n a d d i t i o n t o your home bank?
•wr. Mahdney:

!^o, s i r .

The S e c r e t a r y of the T r e a s u r y :

What i s your view about

t h e b e s t Jxlace f o r a F e d e r a l p e s e r v e Bank.




ST A ; V ' . ,

•.-•"'•

:

G-13

T. J« Mahoney«

Mr. Mahoney:

.

T t h i n k if we have s u f f i c i e n t

'

•

,

'

" . - !

2854
c a p i t a l in

t h e P a c i f i c Northwest, t h a t P o r t l a n d v/ould answer the purpose
of the c o u n t r y , from our s t a n d p o i n t as a country bank.
The S e c r e t a r y of the T-reasury:
ip% Kahoney:

Heppner.

That i s in e a s t e r n Oregon.

The S e c r e t a r y of t h e Treasury^
c h o i c e alfter P o r t l a n d ?
. Ma honey:

You a r e a t what place?

What would "be your- next

,..,..

San P r a n c i s c o .

The S e c r e t a r y of A g r i c u l t u r e :
"balances?

"There do you keep your
•

Mr. Mahoney:

.;'•«'-

We keep our l a r g e balances in P o r t l a n d .

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

Do you keep any balances

i n San -prancisoo?
Mr. Hahoney:

We keep b a l a n c e s in §eat t i e , Spokane and

•tfew York, but t h e g r e a t bulk of our b u s i n e s s iw # i t h P o r t l a n d , T would say 90 p e r cent of our b u s i n e s s i s with
P o r t l a n d , and we borrow our money in P o r t l a n d .
STATEMENT OP ?>r. G, SHUHAK.

The S e c r e t a r y of the T r e a s u r y :
Mr. Shuham:

W. G. Shuham.

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




What i s your name?

Where a r e you from?

G-14

:

W G, Shuham
.

i<rr. Shuham:

2855

Waitsburg, Washington, in t h e Walla Walla

Valley in southeastern Washington, about 20 miles east of
Walla Walla*

..ryy^;^^,%t^^;*^!\...

The Secretary of the Treasury:
but your own bank?
Mr. Shuham*

.-

:

?& - ^i>0^ •* . • £**&**• &»

D you represent anything
o
•.+ - - - • . . .

f-ortl&r*

Yes, that i s about a l l at t h i s time.

The Secretary of the Treasury:

Where do you think t h i s

Federal Reserve Bank should be located?
Kr. Shuham:

^e had r a t h e r hoped that one could be estab-^m^'-:-

l i s h e d a t Portland.
The Secretary of the Treasury:
Seattle?
vr. Shuham:

h

~t~

yes, we do.

The Secretary of the Treasury:
Kr. Shuham:

you prefer Portland to

Why is that?

<vell, it is more accessible, and the natural

trend of our business is all Portlandward. , - , ;.'.
•-•
The Secretary of the Treasury:

^/hat is your next choice

after Portland?
' • T Shuham:
•T.

On the volume of business T believe T would

be forced to say San ^rancisco.
The Secretary of Agriculture:
business?



That is of your banking

..\L'S

.%•'.•

- ' • - • • / . ' . '

• '

T-"rf>'"' '

" f . G« Shuham

G-15
•»rr. Shuham:
f l o u r .

, ........

t

y e s , on account of

.mv ^w.f

pr?

,*v

A

2856

he grain shipments and

^-•'»^,'. ,^..? .. rv ^* •

The Secretary of Agriculture:

-" ' ' • ' ^ ' V , | - " ' ' j

^:-.^.,^i

J ^ L •*..,-..-.: - i . * ^ -

%a t about the general

'business of your community, where does that go? ^ - ^
Tt i s unquestionably to v /ards Portland.

JfrM Shuham:

The Secretary of Agriculture^

And in the second place?

J'r. Shuham:

do you mean?

Tn the '.orthv/est,

The Secretary of Agriculture:

-'hat i s the next largest

percentage, to San Prancisco or some other city?
?<r# Shuham:

Tf you mean the business of the merchants?

The Secretary of Agriculture:
Kr. Shuham:

yes.

T suppose i t v/ould be Spokane or Seattle

probably.
The Secretary of Agriculture*.

That i s a l l , thank you.

S A E T^ OP T. L. TKO^SOt-.
T T M IT

The Secretary of the Treasury:

" r . Thompson, w i l l you

sta te your f u l l name?
?Tr. Thompson:

. ^

*?. L. Thompson, President of the State

Bankers 1 Association.
The Secretary of the Treasury:
State Bankers



1

you are president of the

Association of Oregon?

G-l6

W. L. Thomp so n

Mr. Thompson:

2857

T have t h a t honor, y e s , s i r .

The Secretary of the Treasury:
?*r. Thompson:

pendleton, Oregon. ^ca^Vls.,,,'4; '.

The Secretary of the Treasury:
y-r. Thompson:
•

•

Naturally you would be.

>

What is your bank?
7rr, Thompson:

Are you a Ranker yourself?

Yes, s i r .

The Secretary of the Treasury:
. - • •

"/here do you live?

:

" -^
•

• ,
rf

The American "National, at Pendleton*

The Secretary of the Treasury:

7/ha t is your view about

the best location for a pederal gesenre Eank, if one were
located in the Northwest?
?*r. Thompson:

^rom our standpoint, Portland naturally*

The Secretary of the Treasury:

Ts most of your business

with Portland?
Mr. Thompson:
with Portland.

The greater percentage of our business is
W are in the heart of the great wheat
e

section and also on the border of a large stock growing
country, and we are peculiarly interested in the Federal
Reserve Act, in the fact that our country is really a
borrowing section, due to the fact that v/e have both of
these interests.
The secretary of the Treasury:




H w much "business have you
o

G-17

W. I . Thompson

with S e a t t l e , how does i t divide as between Portland and
Seattle?

' ~"

. Mr. Thompson:

:

''"'

Hs

'

^"^

'^^r".

' " ^ " ' "*1*'f :**LV .. *

Our business with Seattle, our business

during the past year, v-hich T looked up, as compared with
Portland, was about one-sixth our t o t a l exchange transactions.

Our transactions with Portland las,t year were about

53,000,000.

iJ r

* '"*.?.

* The Secretary of the Treasury:

That would be your second

drcice for a location of a bank?
} Vr, Thompson:

San Prancisco#;^V^i;-.^

The Secretary of Agriculture:
gra in go ?
* T.r. Thompson:

-.

Where do your cattle and

^-

Naturally to Portland.

About o^e-quarter

to oie-third of our grain goes to the sound, Tacoma and
Seattle.
The Secretary of Agriculture:
yr.

Thompson:

-rrery rarely.

The Secretary of the Treasury:
Mr. Thompson:
rarely.

Does much of i t go east?

Very rarely?

Sometimes our barley goes east, but very

Our county produces about one per cent of the wheat

of the United States, so you can get some idea of the



importance of that question.

And while v e are on this
v

ii

n

• r&K,?,v.?:y:.'.

G-18

W. I . Thompson

' ' ^ "
*
^

2859
matter, T rrould like to ask this question of the Eoard. 7e
are in the heart of an Indian country, that i s , we have a
large Indian, Reservation on our herder, and some time during
the past year, or just about the time that the administration was changing hands, the Indian Department "began to
make regulations governing the conduct of our banks, outside
the Comptroller1 s office, arA we were prohibited from borrowing any money or re-discounting i t , in order to hold any
Indian funds, which is abs&lutely contrary, of course, to the
purpose of the Federal peserve Act, and one which has forced
the country banks, ^'hich we are purely in principle and in
business, to beat the devil about the bush in order to
finance our country.

W take a different attitude dowards
e

the people in our section of the country than the ordinary
city banker, as expressed by some */ho have talked today, and
that i s that we do not hesitate to ask for outside assistance and help to take care of our country, and we do not
find any sentiment against our re-discounting among our o n
w
People.
The Secretary of the Treasury:

You want to know if the

regulations of the Secretary of the Interior are paramount
to the Comptroller of the currency?




0-19

*• L. Thompson

1!*". Thompso.::

'

.

Yes, s i r .

The Secretary of the Treasury:

Tf you " i l l send that

circular to the Secretary of the Treasury with your question,
we w i l l see that you get an an srer*
*f.

Thompson:

Tha^k y o u ,

;•,,

^

^

••

;m;^t^7 in 'vnlSTA.T."ETIEvT O K. L. KUSH.
F
The Secretary of the Treasury'

Mr. Push, w i l l you state

your name, occupation and residence?
1U& Kush:
farming.

R L* Hush, Pomeroy, Washington, "banking and
«

.-. :-[':^:- -./" ' .. > ..v/;: ^' •;:-;;/i^
•

The Secretary of the Treasury:

what i s your choice a s to

the l o c a t i o n of a pederal ^eserve Bank, i f you had a r>orthwestern

district?

V-~**rm Bush:

T should rather have i t in Portland.

The Secretary of the Treasury:
it

in Portland?
! r r,

flush:

You would prefer to have
^

:

Yes.

The Secretary of the Treasury:

How close are you to

Spokane?
?Tr. Rush:
The



About 100 miles south of Spokane.

Secretary of

J

.he Treasury:

"/here dc you keep your

G-20

R. I. Rush

reserves?
?Tr. Bush:

. 2861

•

. - ';;r"::';?^v

'

Tn Portland principally.

The Secretary of the Treasury:

' "

*

is the normal course of

your business more with Portland than with Seattle and
Spokane?
}«t- Bush:

!

~
About fou~-fifths

of the products raised in our

country in which T do business are marketed in Portland.
rnhe Secretary of the Treasury*
products?
'.

Bush:

^hat is the nature of those

/ • • ' • • . , "

"' ' "

G r a i n and s t o c k .

. •••'

The Secretary of the Treasury:
^fr. .Rush:

yes.

,

r.*.,-J-,'«.-*-.

GraJUi and stock?

.

• *-.

.

The Secretary of the Treasury:

7

/hat would be your second

doice on the pacific Coast for a federal Reserve Bank?
. Bush:

'"fell, I would rather have i t a t Spokane.

The Secretary of the Treasury:

And what is your third

choice?
Mr. Bush:

so
"Tell, T hate to be/disloyal to m own state
y

as not to say Seattle.

(Laughter)

The Secretary of the Treasury:
being loyal you would say Seat ;le?



Yes*

So for the purpose of

G-21

R. L. Bush

f 2862

The Secretary of the Treasury:

But for the purpose of

business what would you say? tva't*

"

Mr. Bush:

"fell, T think I would say San t?rancisco.

The Secretary of the Treasury:
.

• .• ••'?•

we a r e much obliged to you.

STATEMENT OP CHASO S. LOVELASD. ;3|Sfl3:

The Secretary of the Treasury:
name a nd occupa t ior.?
Mr. Love land:

--»r. Loveland, s t a t e your

'f;^^^'-^yWt'-:

Charles S. Love land, Examiner for the Port-

land Clearing House.

^-lefts stf&ifcH' t

The Secretary of the Treasurj r :

You ai-e the Examiner for

the P o r t l a n d Clearing House?
T-Tr. I,ove3and:

Yes, s i r .

-

LA

The Secretary of the Treasury'-

You mean you are employed

by t h e Portland Clearing House a s t h e i r Examiner?

The Secretary of the Treasury:
this question?
}-r. Loveland:

'That is your view about

Did you have something you wanted to suggest?
T have prepared a fer; figures here culled

from the reports, showing the capital and surplus of the
national banks and the state banks, with their contribution
of reserves and capital.




T have prepared that for the

0-22

a. S. Lovelaud

'2863

Pacific Coast s t a t e s , as shown in the summary of the reports
"but T presume you have a l l that.
The Secretary of the Treasury:

'
^e have that data in

another form, but t h i s might be filed as an exhibit.
(The papers vere filed accordingly. },:Tx:\ / IAV
. The Secretary of the Treasury:

Have you any ^iews to

e g r e s s as to the best place to locate a -nederal reserve

",I'tr. lovel&nd:

The trend of "business is strongly towards

Portland from the d i s t r i c t s which T examined as a • aiional
Exami-.-er, a.id that v/as Tdaho aid Oregon, and a part of
'•Tontana f^om Billings this way.
we have not sufficient

Put in view of the fact that

capital v/ithout a31 the state "banks

coming i n , and under the la*/s of the different
are unable to,*

states they

outside of Oregon, T thiuk probably that

the b-anch service '.vould t?ive us frood service, if we cannot
get the Reserve Ban k.
The S^-C'-etary of Agricul^u e .
*

T that case you v
n

suggest the headquarters at San Praicisco?




d:

Yes.

V.

G

*r
*

o2

T

V

v

» Jo K e r r ,

*"<O

r

-•:

2864-

STATETOT0? : T J. T E R R e s i d e n t
T6
CR?
of the State A g r i c u l t u r a l College,
•• The Secretary of Agriculture:

•

-president TCe'-r, you have

heard the discussion this morning.

Tould you give us the

benef i t of any viev;s you hav e" on this subj ec t,
tx "'To TTe-r:

very "briefly, "r. Secretary, I a doubtful
m

as to the value of anything T might s ^ contributing to the
.discussion of the aftercoO'.'.

T have "been asked to speak ver

"briefly regarding the agricultural outlook in t h i s d i s t r i c t ,
particularly in Oregon, and to indicate something of the
future there is for the Oregon farmer and the agencies that
are at work in promoting the development of the agricul-:ura
of the state*
In Oregon the t o t a l land area i s 6l,188,000 acres.
t o t a l land in farms is 11,600,000 acres, 19 per cent.

The
The

improved land in farms is 4-l/f million acres, 36 per cent
of the land farmed, a^d only 7 P^" cert of the total,

The

t o t a l number of farms is 45,502 and the average size is 256
acres, a id the average value $11,609.
According to the State Assessment Bolls there is t i l l a b l
land in Oregon aggregating 23?5OC,OOO acres, of which more



G

7/, J . Kerr

.,

2865

t h a n 80 p e r c e n t , or 1 9 - 1 / 2 m i l l i o n a c r e s i s a s y e t u n c u l tivated.

' ' •' ••'

X

- -W^V'^:
•

.

•

>^;

"

•

•

•

•

.

•

V
'

.

^

?&*&$% .••'•
*

•

-

• •

'

<

'

;

•

Tn central Oregon alone, with, a total land area of
26,568,000 acres, the acreage cultivated is only 791,800
while that of t i l l a b l e land uncultivated is nearly 9,j00,00C
acres.

j * will "be observed that great as are the agricul-

tural resources of Oregon, these resources are yet largely
undeveloped.
:

1;

r

^

The small number of farms, however the large size of

jthe individual farm,

and the enormous area of tillable laud

yet unplowcd, a l l indicate the great possibilities that yet
remain for the development of agriculture in this state^ - •
i^* The Secretary of Agriculture:

Could you give us the

growth in the number of farms in the last five years?
~>Tc Ker--:

MO, s i r , T could not.

T understood that to be

covered by another speaker and did not go i:ito those
statistics.
The Secretary of Agriculture:
Kr. Kerr:

ves,

v/e can get J:hem.

x also understood th?; t certain

questio^s

relating to the amount of wheat produced and the dairy
industry and so O ••ould be presented by others and T have
R
not included the s t a t i s t i c s covering those- questions and did



iJ

G

.

W Jo Kerr
o

•

not want to t u r d en you with any r e p e t i t i o n ,
..

The Secretary cf Agriculture:

s t a t i s t i c s .

Jlr. Kerr:

~ ••- tf-.-j

' ; • ? * , _ , - : . ;,•:•-

2866

/*
IV«&-r!~' "*

y e s , we have those
;,; - ,

n . :* n * * & & " "

The State Eankers Association of Oregon, the

Oregon Development League, the Portland Commercial 01u*b,
and the State Agricultural College and other organizations
are a l l working together for the development of the
a g r i c u l t u r a l resources cf th.: state,
t

I have been aslced to indicate something of the future

of the development of agriculture and the nrixx part t'iat
i s "bci-ig played " y the agricultural college in this work.
b
As a "basis for what I may say, it may "be proper to indicate f i r s t something of the position this institution
occupies iu the higher educational field of/the Northwest.
As you of course know, vrQ Secretary, thora are t " j land
grant i n s t i t u t i o n s 01: the Pacific Coast,

The distance a l l

r a i l from tha southern liac of California

to the northern

line of Washington i s "between I69C and 1700 mifles.

The

College of Agriculture at Berkeley, cc-nr5tituting part cf
the State University, and the Oregon Agricultural College
at Ccrvalliso

By r a i l i t is 691miles from Berkeley to

Corvallis and 400 miles north from this city to the north




W, J # Kerr
line of Washington,

2867

i t is 424 miles " y r a i l from Seattle
b

east tc the Washington State College, which is within six
or eight miles of the Idaho State Line, over a range of
mountains*

Tn those respects, therefore, the Oregon State

Agricultural College occupies a unique position, having a
very large field,

.

,.

- *fov; as to the work of the institution —
The Secretary of Agriculture:
?ri%. Kerr*.

The college or the area?

The Secretary of Agriculture*
Mr, Kerr!

is i t largely agricultural?

The college?

T v/ill indicate that, Mr. Secretary.

T order
n

to get a better idea of the work v/hich the institution is
doing and may do in this field, T may state first that the
college plant now inventories §1,581,000, cf which l)8l0,000
is in "buildings and "5771,000 in equipment, live stock

and

The income for the present year for maintenance is
§4.39,300 and for capital, buildings, equipment and improvements $24-9,GOO, or a t o t a l cf :)o88,300.
The college community this year numbers 2,643. O these
f
the faculty, experiment station, staff and extension workers
number in the aggregate 227, with a total enrollment of



• , ' * ' - i : ; . *•;,::t:<'(

•V.-,.

J L -

.-5 ,

!• * . « " ' - • * •

. •• _ ^ _

" * - J * .TC&nf^^ '

students of 2 ; 4l6.

T

•...-.

_.

.,

"

^

*• ,

••'••'•'•••

2868

This last .inoOudjafljcagiaar.students

1646 and short course students 770.
The number of agricultural students up to date is "betwe*
tkffl*

1^00 and loOO out of the t o t a l enrollment*;."
The increase in the ^development of the agricultural
v/ork of the i n s t i t u t i o n during the last six years has "been
about nil e-fold,

That i s , there has "been an increase of

over 9 0 0 Pe r cent in the amount of agricultural v/ork aotuallj
d o n e *

•*'*""""~

' • ' . - ? • ' - ; ' - '

-

r

-.

The Secretary of Agriculture*

.

Have you technological

work as well as agricultural?
r# TCerrt

The institution covers the usual field of the

land grant college e

W have engineering, forestry - e

The Secretary of the Treasury?

H°W many students are

enrolled in agriculture?
Mr. TCerr:

You mean the long course?

The Secretary of Agriculture:
Mr. Ke—:

y es »

Upv/ards of 900a

The Secretary of

Agriculture:

Working towards a

degree?
Mr. Ke-rr'.

yes.

The Secretary of Agriculture:
Kr. Kerr:



H w many do you graduate?
o

Last year "between ?0 and 60, a,id this year it

G

'

W Jc Kerr
.

-•

2869

will oe much ..larger* You wi 11.understand ,the reason for thai
when T say that

seven years ago the t o t a l number of

a g r i c u l t u r a l students was 80, '' ' *& & ' :%i0&p§]:.i%..
"• . * £•
You w i l l be interested in t h i s , T think.

O the "basis
n

of state population the number of agricultural students in
the State Agricultural College is a

l i t t l e less than five

times t h a t in I l l i n o i s , 4-l/2 times that in Indiana, 3-l/2
times that in Michigan, and nearly twice that in Kansas,
with a lesser population,

,^r -? \& ?'
.?

The Sec^eta^y of Agricultu"e'
record in the office
^Hr. Tcerr- yes.

at Washington.
t ;Iis

The Secretary of Agriculture'
that directly
tr

r«' TCerrt

W have a l l those facts en
e

•"<• .
Have you anything to p""essn-:

bears on this problem?
Directly relating to the development of

agriculture and only relating to the question you have
under consideration

indirectly*

The Secretary of Agriculture:

yes.

W have of course,
e

a p r e t t y ffcll and complete inventory of the agencies which
are operating for agriculture',

perhaps if you would just

summarize them, i t would expedite matters.
!'r. Kerr:




Well, I have intended —

J, Kerr

The Secretary of Agriculture:

2870
W have the catalogue
e

showing ycur stud-ants and everything of that kind very full
H w much has the state, spent directly toward the study of
o
agriculture*
Mr. Kerr-

..,

.„, . . , _ , , ^

, u ^ *>^j.%.

The t c t a l amount expended " y the college for
b

resident instructional work this year is $270,000, and of
that about 70 per cent is in the field of agriculture. Then
in addition to that for agricultural extension work the
income for t h i s present year up to date is $67,800,
-•

\ The Secretary of Agriculture^
Mr» "Kerr"

-? o the state?
jr m

"No, that i s the total income from the state

and the county, with about $10,000 from the Department of
Agriculture, in cooperative work,
T may pass over the different points here and indicate—
t have twenty things given here as indications of the
service rendered in the field of agriculture, but i t will
take too long for m to give themo
e

T m y give one as an
a

i l l u s t r a t i o n , because i t affects a large area of the state*
For instance, in central Oregon there are some two million
acres of t i l l a b l e land with an average elevation of 4000
feet and an

annual reeipitatioa of 11 inches, most of whici

u n t i l recently has been known as desert land and used for




G

W JA Kerr
o

grazing only-

Investigations indicate that the largnr

portion of t h i s area has an underground flow of water at an.
average of over ten to fifteen feet "below the~ surface.
Three years ago a branch experiment station was established
on a typical piece of this land.

It has been demonstrated

t h a t i t is possible, by the use of certain moisture conserving t i l l a g e methodSj to drive d w the surface moisture
o n
u n t i l i t unites with the moisture rising from the underground
water, thus practically transforming dry land into subirrigated land* M
The crops on t h i s land last year yielded in wheat 48
seed
bushels per acre, alfalfa/l20 pounds, field peas 29 bushels,
indicating what can be done over that area of 2,000,000
acres, and so on»
W are expending this year something over $100,000 in
e
agricultural experimental work, $60,000 at the home station
and #40,000 at the seven branch experismital stations, flow
the greatest agency fur the development of the agriculture
of the s t a t e i s the agency of the college, because whatever
new truths may be discovered through research and investigation, however much may be done in residential work, the
rapidity of the development of the agricultural resources




. J. Kerr £.

2872

of the state w i l l be governed by the extent to which the
people on the farms are able to utilize this information,
to apply the

scientific principles in agriculture properly

flow Oregon has, and T should like to mention this in
conclusion, one of the most comprehensive laws, probably
the most comprehensive extension law in the states.

This

law was passed by the last legislature through the cooperative efforts of the different agencies mentioned.

It

contains a provision first appropriating $6,000 to the
office of the State Superintendent of Public Instructions
for promoting industrial education, chiefly agricultural in
the public schools and this work, done in cooperation with
the agricultural college, and $27,5°O a year for itinerant
school work, general publication work by bulletins and so
forth.

I t contains a provision under which the several

counties may appropriate money or levy a tax for farm demon
stration work and the maintenance of county agents, and the
amount provided by the county, with certain limitations, is
duplicated from the State Treasury.
Another provision under which the state through the
Agricultural College cooperates with the Department at
Washington, or with any division of the government —




Bl

W J.. Kerr
.

The- Secretary of the Treasury
that,

M
r

Korr.

M kerr:
r

Yes.

'

2873

I an familiar with a l l

'

•-•••'•-

. - • • • • — ••<

This is v.ithout any limitation. If

the- Lever Bill should b - passed, immediately upon t h e '
e
certification of that Act, the necessary amount to " e
b
provided by the state becomes available from the state
treasury without further legislative enactment, and if
tho Department cf Agriculture should make available five
thousand or twenty five thousand dollars on the provision
that the state duplicates i t , upon certification of that
fast, this amount immediately becomes available from tho
st ate treasury

STATEMENT OP D-3. DUEIIEE.
The S e c r e t a r y of t h e Treasury:

Will you state your nama

and occupation? • • *
*
Mr Durfcoc:
pany.

D. S. Durkcc, manager Postal Telegraph Com-

"'

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

\ : e should l i k e t o get

some information about the t e l e g r a p h f a c i l i t i e s
P o r t l a n d and San F r a n c i s c o .

between

For i n s t a n c e , how long does i

take o r d i n a r i l y t o get a business message through.




2 do




BZ

D. S* Durkoc.

not mean a rush messaga, but I mc-an the ordinary
course of business t r a n s a c t i o n , about what time is r e quired to d e l i v e r a mesaage?
Mr Durkoe:

. ,.

From the time i t i s f i l e d here u n t i l i t

i s 2ccdc ± d e l i v e r e d , I would say about twenty minutes.ffs fK
The Socrctary of t h e Treasury:
sufficient

Do you think t h a t i s

figura t o put i t a t ? ^ ^ ^... ...„.

k r Durkco:

Yes. "•*'MA^mJi*.'±^J;«~- •'*L> -^*r Jt l/ ; '*-',

The Secretary 01 the Treasury:

I mean t o be d e l i v e r :

t o t h e party t o whom i t is addressed.
i.-lr Durkoe :

- : "". * • / >-.', ••' '
«

Y^s s i r .

The. a a c r e t a r y 01 t h o T r e a s u r y :

;

Have you abundant f a c

i l i t i o s betueon Portland, and San Francisco?
i-r D u r k o o :

Y o s . ;•>... ^ r !:v,*-**; ; «. v ' : '%i£ ; 'flW- ^•>»>1 f^-nfY^V"'

The becr^tary 01 the Treasury:

,-hat is the rate betv;.

Portland and San ffraiioisco?
ilr Durkee :

It is 50 cents for ten words and three

cents ±or each additional word, the regular day rate.
T w Secretary ff t h . Treasury*h
rate?

'

iir Durkeo:
words.

^h^

is the day l e t t t

W i ^ ^ i - •,::,;,,. : •••";- - '

The ^

l e t t e r rate i s 75 cents for 50
.<v,, '; LI±AS&> .* mm *^.~^

The Secretary of the Treasury:

H w long doss i t taka
o

;

-J^S.Durkee.

B3

:

* d, >;. / .:.
:-

.

2875

o r d i n a r i l y t o get a day l e t t e r through?
Mr Durkse;

T

.,3 do not handle day l e t t e r s » '*'•'""•'*

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

You do not?

Tho P o s t a l does n o t .

The S e c r e t a r y of t h 3 Treasury:
ters?

""

.

Mr Durkee:

-

How about night l e t -

F4ft.y cents for f i f t y words.

Eho Secretaryb of the Treasury:
- '

r

.

"*

*; -

Ten cents for each additional ten words,

or fraction thereof.

'

,

The Secretary of the Treasury:
Mr Durkee:

; ;,

And what is the ezti>

-'"'rate?''"''* ;""*•;*? / :^'r;."<;.;-;%: ;;>^.;-^:
Mr Durkee:

<

One cent a word?

Yos s i r .

•5, "1

The Secretary oi the Treasury:

H w are your f a c i l i t i
o

with Seattle and Spokane, and Boise, Idaho, for In-*"'*"
stanco?
Mr Eurkoe:
, . -•
-"'•"'

W have good f a c i l i t i e s to Seattle and
e

Spokane, but not to Boise,
':-




w do not reach Boisa.
e

The Secretary of the Treasury: 2s
there?
*.%:. pr-r* . "
Mr Durkeo:

Yos s i r .

Tho S e c r e t a r y of t h e Treasury:
Mr Durkoe:

the service good
' .
. . ~"->^'

Yes s i r , s p l e n d i d .

(tfiick and. ozpeditioiis

I i

B4

E876

D. S.Burkee
Secretary of the Treasury:

What are the rates

between Portland and Seattle?
Mr Durkee:

25 cents.

The Secretary o the Treasury:
±
e x t r a words?

ay

Mr Durkee:

-?\ * >v- r :.• ^'iiT-y

And h w much for the
o
"i&s ?;.-h$ ,'XxX^ ;••:>• *r

25 cents and two.

The Secretary of tho Treasury;
Mr Durkee:

What is the night rate?

Eight l e t t e r rate is 25 cents for 50 words.

The Secretary of the Treasury:

H w about the service —
o

you are not so familiar with the service San Francisco
down t o Los Angeles, I presume?
Mr Durkae:

..

^j-

Well, the service is good, that is about

a l l I could say about i t .
The Secretary of the Treasury:
.

"

•

'

*

,

*

/

'

,

/

'

•

'

•

.

.

•

•

-

Js this a district of fie,
•

;

;

. ' .

• .

.

or a d i v i s i o n or only a l o c a l office? 2-??&K/:l*:.f-r>
iir Durkee:

Only a local office.

The Secretary of tho Treasury:
Office?

t^.*i.fc-,-.;•;:"•

Mr Durkee:

The d i s t r i c t office is in Seattle.

California, as well?




Where is the district

- v > :".V • ,

The Secretary of the Treasury:

Mr Durkee:

'•"

;

ms.

You mean covering
m'%h^::m,-m^i^'-^;^^

Ho, the d i v i s i o n office f o r t h e whole coast

B5

D. S. Durliee
2877

i s i n San Francisco.
The Secretary of t h ? Treasury.

That i s a l l . Thenk

"\ \ K

you.
IILilT OF riILLIAM ARTHUR R0B3.
The Secretary of the Treasury:

You nay state your nar.

and occupation.
Mr Robb:

•

T/illiain Arthur Robb, manager Western Union

Telegraph Company.VA^/-;;;;.;,

. X-:\}^^^-$.

The Secretary oi the Treasury:
o n l y ?

Mr

. V .

Bobb:

; •.._:•'•••:.•'•'• : . ; ; j ; :

v

" -

Y e s s i r . --•••>^ ; -

:-,:<-—^^•-^vr^y^

The secretary oi the Treasury:
Francisco?

Mr Hobb:

^-"...-,.-.-. ;

Is this a local office

..

H w is your time to So
o
. 3 - .:'\--•_•,.r^^^,/'^^••

Our time i s regulated so that the mossaga is

a delayed message if i t is not in San Francisco ten minu
aftor i t is filed.
The Socrrtary 01 the Treasury:
Cisco office?
iar Robb:

You mean in the San Tr

;

In the San Francisco office.

The Secretary of the Treasury:

In the business dist ri.

there, h w long does i t take within a medium radius, we,,
o
will say, t o deliver a message, h w much time do you a l l
o




'-•'




B€

•'

f o r

tksfe?

Mr Bobb:

\u

. ,:•.. :..

A.Ro"b"b

-•:

"" " ^ ;*;

_

: --1 • •''

V!

l . e average time is ten minutes from the ti:
Bb

i t i s received in an office until the time i t is delive
Gd? t h a t I s , the average time.

*.?i*.s \-..:..<:? %isivXtm^

Tlie Secretary of t h e Treasury:

Have you ample f a c i l i ;

"between Portland and San Prancisco? v-;£-.:^?^7,
Mi* R o b b ;

Ye So

^ i ^ ^ > * * ^ * ;

•.

•
;

The Secretary of t h e Treasury:
CXI

1/ xia U

UJ&A^O •

My Robb:

** -

Mr Robb:

*>"•?-''•

^fQs s i r , we have four multiplex wires.

..

,, ^fe^ •
•

:

During even the

rush

./??*^-"''

During even t h e rush hours.

The Secretary of the Treasury;
Mr Robb:

;,"•:.• .:-'•.•/.,•'

Do yoii dispatch me seat-

ra The Secretary of the Treasriry:
hours? "

• ' • - .

^ul^m.Vif^.

How i s i t at Seattle?

At S e a t t l e we have four different wires.,

The Secretary of t h e Treasury:

Your r a t e s are the san

as thn Posta2?i;7 01 v«^ *,.>
Mr Robb:

They are the same • - c "::;

The Secretary of t h e Treasury:

"

' ;'

You send a day l e t t e r '

What i s your charge f o r day l e t t e r s t o Saa Prancisco?
Mr Robb:

75 cents f o r 50 words.

The Secretary of t h e Treasury:

v
What i s the time. re~<




B7

Y/\ A. Hobb '"
,-.- -' "kK

'

, , v

quired t o d e l i v e r a day l e t t e r ?
Mr Hobb:

'.'' '"''*"'* ^su»-.-.'^

A day l e t t e r i s considered do ayed a f t e r

being 2Q ninutaG i n the office.
The Secretary of the Treasury:
iar Hobb:

2679

-

- ?r -'i&

After twenty minutes?

Yes s i r . As a matter of fact they get out

of the office

i n side of ten minutes usual?*y, unless thor.

i s some •anjxpjoted congestion.^ '^;;-:;-;:"'"-.^i"*^"'--,:';
.

The Secretary cf the Treasrury:

sidorod dciaya.I.
iir Hobb.

You say they are con-

To what estant are they r e a l l y dolayed?

I should say they are not delayed over 20

minut es.

y ; : ^ . \ .•;•'-"•: • -;,. •:= r.r2r-::'-;

The S e c r e t a r y of the T r e a s u r y :
day l e t t e r t h r o u g h :ln tiara?

Do you u s u a l l y get a

Abcut what tfjna does i t t a k -

t o d e l i v a r a message t o San Francisco from here?
Mr Hobb:

3n about twenty minutes, u n l e s s they are
",';- -

clelayca.

: :

;';-'

'' -":-^'-^y

The S e c r e t a r y of t h e T r e a s u r y :

., ""

•..-,..,.

^ ..,.

Of the a.olive r y w i t h i n

a r a d i u s of your office would be t e n minutes mcra; do
you mean to cay a day l e t t e r would get through o r a i n a r i l :
i n about 30 minutes and be d e l i v e r e d ?
idr Robb:

.'••

Yes s i r .

The S e c r e t a r y of t h e T r e a s u r y :
B o i s e , Idaho?

How i s your s o r v i c e t o

and p o i n t s i n Nevada from here?




B8

.,. A . HotD

liir Rcbb:

YJQ have a d i r e c t wire t o Boise and r e l a y

for a l l points intermediate, a l l intermediate points
"between here and Boise.

The same thing is true between

here and Taccma, we relay to those points.
The Secretary of the Treasury:
relay?
Mr Rcbb:

.A. ,

yr^'

*'^5vr-vi

V/hat do you mean by

^.?^, ^ ^ •j^j^fT-*. • J^/^ ^:^ A-

The Overland Trunk Line from the east and frc

San Francisco delivers the business to us and w relay it
e
to those points.

They are considered way points.

The Socretary of the Treasury:

But as between these

c i t i e s you have direct wires and no relay is required?
Mr Robb:

Yes.

^'W'

The Secretary of the Treasury:

2 mean Portland and

S e a t t l e and Portland and San Fruiicisco.
Hr Robb:

Yes.

' *'7' f' '' * '

v...^^^:*

The Secretary of the Treasury:
between Portland and Spokane?
Mr *iobb:

- .'

And i s i t the same

?-^^

.

Yes, v;e have two direct wires . W also
e

"K> -:..-.•

have two d i r e c t wires to Chicago and als ^ two t o Los
Azigelos-

*

The Socretary of the Treasury:

< c

''*

'

.Is thorc anybody hero

who c a n ' t e l l us about the telephone service betwu m her:




B9

•'".

W. A.Robb

and San .T-'.tan^sco?
HUIS?

Hava you any other witnesses,

'

Mr Mills:

- ""' •'- .' •'.
. - '•
' 2 8 8 :

:\-'/r^

•••'...

-vy'%>£,-'

UoB not unless you want sorac others.

The Secretary of the Treasury:
about to adjourn-

Hew, the CoraEittee is

Bcfora doing s o , if there is anyone

who cares to be heard, who can present any now light on
t h i s problem, w will hear then briefly.
o

Are thorj any

out-of-town people here particularly who want tc be hear
on t h i s prcblczn?
Mr AoT. Smith:

Hay I ask a question. Will state bonks

which carry postal savings funds " e allowed to go on
b
as they now arc, or have to cone in under the Federal
Re servo system?
The Socretary of the Treasury:
to carry "

They will not be allov;

postal eavAngs funds unless thoy become

monbors of thu Fcdoral Resarve system after t h i s organ!•sat i on is p or f c ct Q d •

....;'

:

-

. 1

2 may say before adjournment thr.t i s must not bo
assuTned by anyone that tho gxostiens asked by the Committao of any one indicates any opinion or ber# of mind
of the Commit too cr any trend of thought.
questions in ordjr to brin^ out the facts.

Yo ask those
/

B

•

'

' VJ. A. Robb

'

* ' < • ' - 1' -

'

2882

I want t o say f u r t h e r on ba half of the Committee
t h a t we have boen vary muoh impressed since we have "been
here i n t h e northwest with the s t o r y of your very great
daVGIopraant, and we ar^ glad t o have come hare and gotten
at f i r b t

hand t h * information which we r e q u i r e to enable- i

t o p a s s i n t e l l i g e n t l y on t h i s p r o p o s i t i o n .

And I need

not say t h a t the Committee w i l l give t h e n e s t thorough
and c a r e f u l

c o n s i d e r a t i o n t o a l l the f a c t s which have boan

p r o s a n t e d , and i t w i l l render i t s d e c i s i o n without

refor-

enoc t o any l o c a l c o n s i d e r a t i o n here or anywhere e l s e .
are

charged with t h e performance

bility,

'7c

of a very great r e s p o n s i -

one which i s of n a t i o n a l s i g n i f i c a n c e and import-

a n c e , and wo believe t h a t the value of t h i s system t o the
people of t h i s country r e s t s upon i t s

jcing dealt with

as a n a t i o n a l problem, and t h a t the advantages which you
arc going to get from the establishment

of these banks i s

going t o come from t h j s t r e n g t h of t h e e n t i r e systom, and
a d e c i s i o n of the q u e s t i o n upon the merit of the problem
itself.

You may be a s s u r e d , as 3 s a i d t o t h e Governor u

few moments a g o , t h a t you are going to get a squarj deal
a s f a r a s we know how t o give i t .




: -'-Ui-'•;.-;>*4-"*'-

The h e a r i n g w i l l now be adjourned.

V/herenpon^_ajL 4LJB.H*, the hoaxing

was adjourned.