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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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ME. 8--TV33L13Y. H i v e S :ock) > o r t h Y a k i m ,
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>!. 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
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*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 cc J o . , E x p o ' t e r s ,
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,
«Ta i t s b u r g , 7a siu
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, Wo ^rTTCKFXL, p r e s i d e n t , : " i t c h e l l - l e r / i s C 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.:.
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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
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o o d s , po"~tla*:d, Oregon.
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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
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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.:.
.; ,
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?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^.«
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. 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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Y,;,'
^RED J» HOL?£ES, La Grande N a t i o n a l Bank. La Grande.
Oregon.
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£-1
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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.
We ere obliged t o appeal to the patriotism of the American
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
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Mr k i l l s :
Mr M i l l s
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Oregon, Washington and. Idaho, and a small por-
t i o n of Montana we think should go in*fc*fitly*;•*••$.<; >3# •..'.
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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tn your own way.
- Mr Mills:
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Mills
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We shculd like t o c a l l your attention t o the $
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 .
filar.
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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?
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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
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^
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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:
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She l e t t e r s sent out wora 960, and as 2 say,
wo sent them to a l l the banks of Oregon, Washington, Idaho
and Montana as far as Billings, omitting Seattle, our own
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&TC the largest amount of bankIng 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;
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$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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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 .
Thv3 Secretary of tha Treasury:
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.
We w i l l have to sort
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 "by the sane process, and also indicate how
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 XJS '
i f they are eligible under the Act, how many are eligible
Tender the Act.
Mr Mills:
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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:
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E'hoy hava t o amend i t , I understand. J'-'r
Mr Gookingham:
Yes, they can am and t hair c h a r t e r .
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
Mr 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*
Mr Mills:
**', •
km& *,&%£ * * ^ ^
We have the State Back 3xaminor here today,
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*
We asked how many bank correspondents tha
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^
- .
••
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' •
•
.
.
.
.
.
.
.
.
'
•
.
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.
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.
.
Yes, f i l e that as an
V&..A U ^ r ^ - ^
.
.
2691
.
.
.
.
.
.
•
.
.
&&£&$; >«S>£#M- ^K$W? ./.C#.r
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.
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. T7e
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 $1,211,000.
Secretary d
the Treasury:
That was for the year 1913,
#
Mr M i l l s
Mr Millsi
K
'-xX
e n t i r e
••'
2692
Yes s i r , the average daily balance sayB for
'*^J&&-_
t h e
'
#$••;-?.?
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^'a v&ll have t h t t prapared.
(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
We would rather f i n i s h
with Mr Mills f i r s t and then taks them up.
UT H i l l s :
; 7 , •/vtr-'Zv'/';'•;'?:•
I am through with my direct testimony.
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
We would like somo information on that
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 • ~~ " ^
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'
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•
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. • * "'
, . _ ^
ITow York, and have to make their settlements in Hew
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, WQ carry about 10 per cent, I should
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:
How much of that i6 reserve
and how much represents exchange balances, a balance for
exohange?
I&r Mills:
Do you separate that item at all?
iio, we? do not attempt to separata that item.
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
We carry a fair balance in Boston and Phila-
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 wo do the most *
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 Hew York, it would be
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 e.md on
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; how far is that going to a l t e r ,
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
"but i t w i l l naver make th= San
Prancisco draft as good i n Hew York as the Hew York draft;
"0i>3 . » ^ 3 1 ^ 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:
We hope sooner than t i n t .
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.
We have other witnesses who w i l l show yox.
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. We w i l l
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.Tr. Hills:
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&- >r.r s^&ta-'^ V h M ^ & r ^
* 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 • igqjjr "*'""'
"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,
" '
:
/ !sJow there will, of course, be some distinctively local
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^'ow in Section 16 of the Act there is a provision
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 : -
We have a packing establishment here, carrying
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 :
On a five year period the t o t a l is 355>348.
•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.
We also draw from
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 "by states are as follows: Oregon
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
Co C. Colt
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, "by the Portland banks?
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?
T-V. 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 "by chattel mortgage? .
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.
•'--•-•
._. •
_• ,. ,
We never have had a loss*
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?
How about Kansas City?
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 $7,500,000,
The Secretary of the Treasury:
- - r:
Where do you finance
most of that?
jnr*. Colt:
The bulk of it is financed in Portland and
Oregon, country banks in Oregon and the Portland banks, and
some in California.
The Secretary of the Treasury:
is where?
Your domestic distribution
&;••::'
2* J. Colt
^ :?lr. Colt:
2728
The domestic distribution comprises all of
Oregon, all of Washington, western Tdaho and northern
California, and Vancouver, British Columbia,
Vancouver, British Columbia.
We ship to
We camiot get much further ,C*<%
south than San -prancisco, although r/e sell a good deal of
product in San ^rancisco. :.^7MK;fe^
The Secretary of the Treasury:
of the freight rates?
itr. Colt:
r
/hy ca^ you iiot, on account
:
'M^^t?im
'9ffS:>
On account of the freight rates; the production
of live stock in southern California, prohibits it.
The Secretary of the Treasury:
^here is a large product-
ion in Los Angeles now, is there ,jot?
Mr. Colt: yes, there is a large packing house established
here.
T might also give you some figures on the produce
business.
The Secretary of the Treasuj-y: y,et me ask before you
start on that, do you have difficulty in financing your
requirements out here, as a rule?
Kr. Colt: At times we do, yes, sir.
The Secretary of the Treasury:
What happened to you this
last fall, for instance?
Mr. Colt:
Well, we had to reduce our stock pretty strong,
G
C. Cf Colt
2729
in order to take care of ourselves a t the time when the
money stringency was on* s#3&-&££ : r ^r
The Secretary of the Treasury:
. Colt:
'M%O^:
f^mf-, fo? *$*&
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^'"
Do you have any difficulty
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:
Do you have any difficulty
in selling that 30 day paper?
Mr. Colt:
> V
We do .?ot take any paper; i t is just open
accounts.
The Secretary of the Treasury:
Mr. Colt:
Tt i s just open accounts?
Yes, s i r .
The Secretary of the Treasury:
When you borrow against
those shipments, you assign the open accounts, as collateral?
Mr. Colt:
^Te borrow on our straight notes.
^
." -'
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:
• :• .
How would you do it? T
did not quite catch i t .
?5r. Mills:
We would expect that the borrower would put
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:
Tn effect
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 Wi llamet t e
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.
On the <|Jiestion of the movement of this wheat market,
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 "by
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
Of grain?
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:
On their farms? , . ^
On their farms, yes.
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:
quite lawful, for they are glad to get i t .
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 :
By contract.
The Secretary of the Treasury:
Mills:
- k\
Is that lawful, under the
•— * The Secretary of the Treasury:
'^
.
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.
We actually brought out money here - -
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:
Do you have any difficulty
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:
.
We s e l l them here or in San -prancisco.
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.
We do not s e l l them in "tfew York,
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
274-1
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:
We t&aak you very much.
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 common to Seattle
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 "be ^ery
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 am
•
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??!;-^.
:• ,
Two per cent, 10 or 15 days; the terms vary.
The Secretary of the Treasury:
Do most of them avail
themselves of the discount?
Hr. T)ixon:
vi
Do you take uotes for i t ,
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
We take his note and endorse it and take it
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,.
[Oho limitation
Vde can disccunt a l l we can bring
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 31
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?
Mr Smith:
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:
We have got that* You nar
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
own. concern, we distribute a l l the way from Bakarsfield to
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.
W3 cover the e n t i r e state
We keep fcur or ff.ve men In S e a t t l 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 W9 do not go at a l l ,
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-
•:/.:
We have abcut 10 p3r cent of our tra-vellng
forcje who are ,4a Gallf-OJ^aia and"Alaska*.^EO per--cant are
An the-sta^>-of Oregon.
r
^
'
4
'
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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? „
Mi* Smith:
Let at allo
\"*V
T'ha Secretary of the Treasury:
fortahle at ti»Eies»
Ma: Smith:
r
You mast feel very oom*
- " ~-
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? _.
Mx Ss&th:
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 SimmoaQS Hardware Company
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:
h e : r e ? •• ^
.
.
. •,:::.:• •%
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
"ba obliged..'; H';;'•?'.....•..-... . ^*:- y:i/
;: :- - - : •.:-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*
We should "be glad t o
-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 M:lfc o he 1 1 :
-- :"
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:
M3C MitchalTL:
'^ ^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 Ye sirs r Company harAles from hare
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 own co-scntry and elsewhere,
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 "be used for
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 we can handle the largest percentage of
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 "be done from any Pu?get
Sound port —
"
The Secretary of the Treasury:
Hew, we would like to
have some facts and figures p/bout your trade and your own
operations..
Mr Mitchell:
Wo operate in t h i s whole t e r r i t o r y .
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 ma an ourselves?
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:
"ZQSf where do you shi"?
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.
V?e 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 wo could get a l l our stuff
An there we could do a l l the business for that t e r r i t o r y
i n there 9 Taut there are times when we zmst supply tham
• ' "H. \U Mitels UL
. ^ "'•' -' \
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:
WG cannot do that very well.
The Secretary of the Treasury:
Mr Mitchell:
Why not?
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
We would like t o know what your operations ar
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? ***2*1? ^ *'*ti'A-)i«^jB^ts * %
- Mx Mitctisll:
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:
We should like to have V
i f you will "be good enough to take a map and give us that
kind of data, wo will be giad t o htt^e i t .
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
Mvr Mitchell;
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:
We understand.
St is a
perfectly simple proposition, and if you know what we want,
we would like to ha-ve this character of data.
We would like
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 we distribute
from Spokane which we send there fron here.
The Secretary of the Treasury:
difference.
order.
That does not make any
We aX\ knew i t a l l proceeds fron Portland on
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?
Y/e 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:
We suggest the f r u i t
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 am presenting this matter on
"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
. "oy lagen
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 "by oonmon rate application.
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 common to Portia'
away from water competition and blue and red and green i s "fefr
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 we cannot caxry the figures so long, of
course, and yo-i liave it a l l in a compact statement there, ha
you not?
Mr Ilalboauf:
' ..
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, we would like \
^ : 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£:
Yes.
Malboouf.
' ; "; :
.if
_ The Secretary cf the Treasury:
HOY?
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.
How do you mean in each
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 mu
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:
My general understanding of the situation
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
Tb.Q Sacretary of the Treasury:
•
;
', " • ^ . • " - . ; \ ^ 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-
ma r<sdal conditions nust "be measured "by altogether
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:
We thank
^
!
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
How long has it been in
"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
"by i t s operations.
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:
How f a r do yo'j go into
-. •• .- .-• :^;'
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
We simply want to gat a lAne on the general a c t i v i t i e s .
'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. How
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.
Y/a 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?
My Hu^gins:
!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 me t h a t .
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 CO to 70 per
•
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 .
x" ^v^
^^'jFr^^^V , T ™ ' ™ P
^j
-a-2-
..
•
P. He Parsons
^ .
\
--
•
.
•<; ;-.;:.5 - ^ " '
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 Mr« Parsons?
Mr, Parsons:
i
We have five.
Tlie Secretary of the Treasury:
how many state?
How many banks are in
;
What is your view about
'--- %m «^" *-**
Well, my view about this is that the
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?
---
•
How far is Eoise from
^
Wo Parsons:
The Secretary of the Treasury:
go from Portland- to Eoige?
Mr« Parsons:
About 18 hours*
How long does i t take to
Gr-5
^o Ha P a r s o n s
2784
The Secretary of the Treasury:
:
Ey the "best trains?
Yes, s i r .
-$
The Secretary of the Treasury:
How far are you from
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:
Mr-o parsons:
Where do you keep your
- ' . s ''
*^ *#«*
And how do you divide i t ?
Probably 75 per cent in Chicago and 25 per
cent in "Nfew Yorks of the eastern part of our reserve.
The Secretary of the Treasury:
What is the general course
G-6
. --
Pt He- Parsons
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:
Do you think that for the "
time "being the i n t e r e s t s of "business, the "banking interest:
cf southern Idaho, would be well served "by having a Reserve
*'-:-*$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, "by directors - - you
heard the discussion of the provisions of the Act with
relation to tranches?
"•£?."*' Parsons:
yes,
-
•'"
The Secretary of the Treasury:
'-,:• . .
Do you not think you woul
get the same f a c i l i t i e s practically that you would with a
Reserve Bank in Portland,
' \^]+••^•;^:-.---;
'
Hfro parsons:
- -'
*•
-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 OP Po Pe
_ 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.
My occupation
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 .
We had
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:-%
We had an account with Denver and
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.
We have a number of
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 own t e r r i t o r y ,
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*
"*»ow our business in there at the present time, live stock
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.
We ourselves sell con-
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:
^Af* d**-^* •
^hen does that peak come?
About the f i r s t of June,
11 ow formerly.. T
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
\ -,iv Jv ,..j. ^ ;;i\^
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?
We s e l l p r i n c i p a l l y the sheep paper.
The Secretary of the Treasury:
Mr, Johnson:
""-••* "-r v
,
We nev a* have had*
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 UJew York,
The Secretary of the Treasury*
i
J
TTOW
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•
We have a country here which
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.
"Mo"body
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*
We cannot t e l l anything about t h a t ,
"Sow
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?# 51* Johnson
£
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:
'; Jf"
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
We held a meeting at "Mampa and I wired the
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.
We w i l l take an adjourn,.
-
.. _Jr
Whereupon, at 12-45 o ? clock r . l^ p a recess was taken
u n t i l 2^30 o'clock P« Mo
2803
APTER RECESS.
•:-
2:30 P.M*
,^;.. ^
tt %l
STATELIEST OP H0B«, OSWALD WEST,. GOVERNOR OP
'•..-
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 me to
-.- .
^ ^ ^ ^
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 "M.ew England a number of educated gentlemen
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 "by local c a p i t a l i s t s .
The "Northwest is peculiarly situated, and T cannot see
for the l i f e of me where any particular advantage would
to t h i s
COM£
section from the location of a Regional Bank in
California,,
Perhaps Mr0 Mills thinks differently,
Taut T
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 "be done largely here in the Northwest.
There is
nothing in common between California and Alaska, and that i s
^orthweSb territory,,
..£-•*-J:-&:.;~
We have heard a great deal of tali: about the
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*
We are
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 .it which you think vrould "be
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 -va -t to assure 3rou that - re men
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 am concerned, T have always followed the west r i t h the
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*
W3 have to knou that before
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.
'
G0V0
West:
V/e 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 my belief t h a t the state banks
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
"^ow when you stop and think that those
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.
Mow those three s t a t e s with a combined area of 260.000
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:
We w i l l not admit we are
bored, therefore your apology i s unnecessary.
• ;Gov. We at:
Go ahead.
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 "X find myself now harking
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:.r' our fortunes tod&y have come
from that quarters
?-re were overlooking one of the greatest
resources of this state at -chat time,
' r Vx%mk "*£# -
Those things are all "jf.-ing fully developed now, and
the "tf orthwest is making f. wonderful growth*
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
We are people who stand for good judgment.
Y7e have been
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 So
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, -we will hear i t .
^ Mr Sargsrnt:
I dicl not Iciow that I_was t o te called on, an,
I only have what I had in my room-
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 YD nt ing state banks from subscribing for stock in tl»
Federal Reserve system, as state banks are permitted to invest*
25 per cant cf their assets An stocks cf other corporations.
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
\
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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, how many banks are reserw agents?
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:
TV bar a is a reserve agsnt
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/-3 hava no central reserve system,
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 . We are very much
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.
Of the
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 ,
Hr6,OOQrOOQ
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:
We would be very glad to
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
.
.
.
.••••••:•*•-•-•
••
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2 8 2 2
Edward Cookingham
^ • j t , » ,
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A -
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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 $4,000,000 for a regional bank that we ought to have one
in the nor"chvs9st.
The northeast is a very large region.
Portland is 771 miles from I3an Francisco, and the states of
Washington and 3 da ho, as you know, are very much farther
ramoved.
And if i t were, possible for us to comirand the
c a p i t a l . I believe that we should have a regional bank in
this
district.
The Secratary of the Treasury:
Assuming that that capital
could not be raised, how do you think this district should
be created, and what states should be embraced?
Mr Cookingham:
If the capital cannot bo raised here., I
think that the Pacific Coast d i s t r i c t of California, Oregon,
Xdeaho p.nd Washington should ba made one d i s t r i c t .
The Secretary of ths Treasury:
What would you do with
/'•$, -<^¥'>V .V*^""^^ V^"/
B
Edward Cookingham
Nevada?
M}
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• 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 we are justified in asking
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 now in which yon would have a strong
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
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" * ' ' ' r - . • - • • : ' • ' ; • •
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B
Edward Cooking ham
2827
country and wo need a l l our capital for our ourrent
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; we have no money
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:•**-,* &f i , ^ 1 . ^
The Secretary of the Treasriry:
Canyon ^udge, of courr.
"* there are figures and "by consulting the s t a t i s t i c s we
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 -
We do, of course, take care o±
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.
-••
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-:.* The Secretary of the Treasury:
'
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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, An other words, leading money, when you
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 own capital?
Mr Gcokingham:
a little
X will have to answer that perhaps at
length, lir Secretary.
We endeavor always to run
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 .
By the
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 whom are large.
.
The Secretary of the Treasury:
•
- "i
_?***
•Tdt^JVJ^-
far-?-.
• • •
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What I me an is t h i s ,
suppose there was an excess of demand over and above your
a b i l i t y to supply ±t with your own capital<"•' • • » • • •
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 :
/
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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:
'
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£8$t
In other words, you-
•
Ho s i r .
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The Secretary of the Treasury:
, . . . - " ' ,„*•
For the purpose of takii
care of the excess demand?
Mr dcokingham:
V/e never do.
*
The Secretary of the Treasury:
\ *
That is exactly the poinL
That seems to "be the practice generally of the banks of
the country, they rediscount with reluctance . J
iir Cookingham:
I think you understand why that
She Secretary of the Treasury:
is.
2 know there is a common
and foolish sentiment that i f you rediscount the bank i s
weak or rather over-strained.
Do you have that same feel-
ing that the national banks have?
iir Gookingham:
yes,
V/ell, we are governed by the same feelin^
although we recognize that redisoouiiting i s an entire:
legitimate function of banking, and should be very generall y used by the banks when necessary, in times of stringency
or w h ere there is an extra or di nary d e maud. , ^ / -^ ^ ' ^ ; ^
The Secretary of the Treasury:
mate demand.
Mr Cookingham:
What 2 mean i s a l e g i t i r-.--rr:-.rf"-^-^&rr"!-'
Yes, but the fear that a l l the banks
have of exposing the .fact t o the public that they have bee.1
•
' •
, '-.y. •••V-' "•'"'•4^"'
SdVi/ard Cookingham
compelled t o Lcrro-.v i s t h e
:
&r"&$
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 we consider that one of
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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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 how it would be possible for us to decide before the
&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
Mr Cookingham: Yes.
^ft«;
The Secretary of the Treasury:
Of course, you can com:
in l a t e r ; there i s no limit on the state banks. •
'ficrr53 «X
' 2t, Mr Cockinghad:
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, we would be contributors to tha extent of
#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
•" ••.-•••. :.••
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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 GO few state banks in the United
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 •
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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.
,
-
Mr Cookingham:
.
.
.
•
•
•
'
,
"
Bow, I observed in ona of tha Hew York
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 we are to enter, we are
prohibited from certifying our e l i g i b i l i t y by that conditi'
The Secretary of the Treasury.
My offhand opinion would
ba that that would not be a prerequisite to membership.
- .J*ir Cookingham:
I am very glad t o hear t h a t .
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 own
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:
My recollection of the
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 Gn stock of such
bank.
-
.
^
, _ .^t^y^^-^'
The Secretary cf the Treasury:
chasing i t s
The
Q^
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•-.••..
-/•r^.^>,^•.,•••.•
That relates to pur-
" ,- ' '
I aia very glad t a- hear of that inter_^i ^
.
Secretary of the Treasury:
'"•"
^;'^'::>-,:.-:
That i s my inte rpre tat
course you cannot take that as aathoritative , "because
ld
.
.
own stock and making ioars on i t s own stock.
ilr Goolxingham:
pretation.
" '
have to s o t on i t formally, but t h a t is my own
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 my .judgment
. . 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 own stock or ma
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: We will see if ..e canno
,
'
B'
Edward Conkingham
j.
-
- ^
f /
I
'
£839
deal with those two points promptly, T mean more offif. T «3 1 ~\ "TT
V-/ J _ C L J L . _ y *
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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
Gn the question of the banking resources of the country.
The Secretary of ths Treasury:
Mr CookinghsLi:
And the banking capita
I am glad to get those two points
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 we are the largest ban& here, they natura
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, AT*> S'tfOfl
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, ,-,•
Mir*. AtosTv'orth:
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 "be
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 .
We had b e t t e r make one l a r g e bank on tht
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:
MT* Adams:
: 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 STATEAOHVT 03* EDWARD C-. CRAWFORD.
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 XL right.
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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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:
On cuestio.is of large policy,
-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.
Of course, the
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:
We would
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 my /fotion of a l l
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 .
*vow a great many
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 "be "better with the other end of
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:
"Mot only through the
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^ ••*&.»• £**&**-
Do you represent anything
•.+ - - - • . . .
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?
'••TT. Shuham:
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.
STATEMTI^T OP T. L. TKO^SOt-.
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
We are in the heart of the great wheat
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:
How much "business have you
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 vve are on this
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.
We take a different attitude dowards
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 own
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 OF K. L. KUSH.
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 my own state
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*.
Tn that case you v
suggest the headquarters at San Praicisco?
d:
Yes.
V.
G
**r
o2
T
V
v
» Jo K e r r ,
*"<O
r
-•:
2864-
STATETOT0? :TT6 J. TCERR? R e s i d e n t
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 am doubtful
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 OR ••ould be presented by others and T have
not included the s t a t i s t i c s covering those- questions and did
iJ
G
.
Wo Jo Kerr
•
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 "by the agricultural college in this work.
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 "by r a i l from Seattle
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.
Tn order
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. Of these
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
We have engineering, forestry - -
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:
How many do you graduate?
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.
On the "basis
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
We have a l l those facts en
•"<• .
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.
We have of course,
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
We have the catalogue
showing ycur stud-ants and everything of that kind very full
How much has the state, spent directly toward the study of
agriculture*
Mr. Kerr-
..,
.„, . . , _ , , ^
, u ^ *>^j.%.
The t c t a l amount expended "by the college for
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"
-j?rom the state?
"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 me to give themo
T may give one as an
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
Wo JA Kerr
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 down the surface moisture
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»
We are expending this year something over $100,000 in
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,
Mr
Korr.
Mr kerr:
Yes.
'
2873
I an familiar with a l l
'
•-•••'•-
. - • • • • — ••<
This is v.ithout any limitation. If
the- Lever Bill should be- passed, immediately upon t h e '
certification of that Act, the necessary amount to "be
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 2fcfcsdfcK± d e l i v e r e d , I would say about twenty minutes.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.
Thw Secretary ff t h . Treasury*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:
How long doss i t taka
;
-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:
How are your f a c i l i t i
with Seattle and Spokane, and Boise, Idaho, for In-*"'*"
stanco?
Mr Eurkoe:
, . -•
-"'•"'
We have good f a c i l i t i e s to Seattle and
Spokane, but not to Boise,
':-
we do not reach Boisa.
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 how much for the
"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:
How about the service —
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
..
How is your time to So
. 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, how long does i t take within a medium radius, we,,
will say, t o deliver a message, how much time do you a l l
'-•'
B€
•'
f o r
tksfe?
Mr Bobb:
\u
. ,:•.. :..
A.Ro"b"b
-•:
"" " ^ ;*;
_
: --1 • •''
V!
lB.be average time is ten minutes from the ti:
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 we relay it
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 . We also
"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, wo will hear then briefly.
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 "be allowed to go on
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.
Y/o 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.
@FedFRASER