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fit. L o u l •



Law Reporting Company, Official Stenographers
3820 fttCTOR



St. Louis, Mo., January 31, 1914.
The Organisation Committee met pursuant to adjournment
at 10:30 A.M.
The Secretary of the Treasury.
The Secretary of Agriculture.
Featus J. Wade, Esq.,St. Louis, Missouri, Represent-

I ing Mercantile Truet Company and St. Louis Clearing Rouse
F. 0. Watts, Esq.,St. Louis, Missouri, representing
Third National Bank of St. Louis and Special Committee.

A* L, Shapleigh, Esq., St. Louie, Missouri* represent


ing Business Men1a League and Shapleigh Hardware Company*
E. C» Simmons, EsquSt. Louis, Missouri* representing
Simmons Hardware Company*


Thomas H* West, Esq^St • Louis$ Missouri, represent-

I ing St. Louis Union Trust Company*
Robert 8. Brooking* * Esq., St. Louis. Missouri.

David H. Francis, Esq., St. Louis9 Missouri^ re( presenting Francis Bros. & Company*
J# C« Van Blper, Ksq., St. Louis, Missouri, rei
presenting American Trust Company.



Edwards Whitaker, Eeq., St. Louis, Missouri, re*
presenting Bremen Bank*
Jackson Johnson, Esq., 8t. Louis, Missouri, representing International Show Company.
Joseph R. Barroll, Esq., St. Louis, Missouri, representing Butler Brothers.
Murray Carleton, Esq., St. Louis, Missouri, representing Ferguson-Carleton Dry Goods Company*
Breckinrldge Jones, Esq., St. Louis, Missouri, representing Mississippi Valley Trust Company.
Edward F. Goltra, Esq., St. Louis, Missouri, representing Hisaouri Iron Company.
D. C. Nugent, Esq., St. Louis, Missouri, reI presenting D* C. Nugent Dry Goods Company.

I*. W. Duncan, Esq., Musk ogee, Oklahoma, representing
| First National Bank of Muskogee.

Thomas 1. Long, Esq., Hopkinsville, Kentucky,
Cashier of First National Bank.


A. H. Eckles, Esq., Ropkinsvill., Kentucky, Cashier
of the Planters Bank and Trust Company.
J. H. Brown, Esq., San Antonio, Texas, representing


San Antonio Clearing House.



R. R. Stookton, Esq., St. Louie, Missouri.
Wirt bright, Esq., President of Rational Stock Yards
A. R. Waite, Esq., Joplin, Missouri, President of
National Bank of Joplin.
0. H. Leonard, Esq., Tulsa, Arkansas, Vice-President
of the Exchange National Bank.

Sterling Fort, Esq., Clarksville, Tennessee, President

of Northern Bank of Tennessee.
S. S. Faulkner, Esq., Helena, Arkansas, President of
First National Bank of Helena.
Henry D. Sexton, Esq., President Southern Illinois National
Banfc, East St. Louis, Illinois.
Luoius D. Turner, Belleville, Illinois, President of
the Belleville Savings Bank.
William II. Kavanaugh, Esq., Little Rock, Arkansas, President
[of Southern Trust Company.
Samuel W. Reyburn, Esq., Little Rook, Arkansas, President
Union Trust Coapany.
C. H. Murphy, Esq., Eldorado, Arkansas, Cashier of
Citizens National Bank.



David 8* Lanssen, Esq., Cairo, Illinois, representing all
the Cairo banks and Cairo Commercial Club*
A. H« Elnchey, Esq., Cape Glrardeau, Mo. representing
Southwest Missouri Federation of Commercial Clubs.
J« F. Abell, Esq., Paducah, Kentucky, representing Faducah
Clearing House*
W. J. Ecklea, Esq., Ft, Smith, Arkansas, President
Merchants National Bank*
Henry Rels, Esq., Evansville, Indiana, Vice-President
Evansville Clearing House.
J. H. Winters, Esq., Qulncy, Illinois, representing
Qulncy National Bank*

Jackson P. Pearce, Esq., representing the Ricker

Rational Bank«

H« F. McNally, Esq., Chllllcothe, tflesourl, Cashier of

Citizens National Bank*
Janes P. Hlnton, Esq., Hannibal, Miaflouri, Cashier of
Hannibal National Bank.
S. T. Trimble, Esq., RuBBelvllle, Kentucky, Director
of Cltlxens National Bank.

W. L. Keaple, Esq., Collinaville, IlllnolB, representing
Improvement Association of Collinsvilie.



W. F. Paxton, Esq., Paducah, Kentucky, President of thi
Citizens Saving Bank*
0 # H # Leonard^ Esq.,
J. H. Jennings*


The Secretary of the Treasury:


Gentlemen, the meeting

will come to order*
Mr. Secretary Houston will make a statement of the purposes
of the committee*
The Secretary of Agriculture:

Gentlemen, we are charged

today by the Federal Reserve Act with the duty of dividing
the country into not less than eight and not more than
twelve districts, and of locating in each of the districts,
a place for a regional reserve bank. The law requires that
due regard shall be given to convenience, and to the customary course of trade • We are here to get all the information
we can bearing on that problem. We desire to know the
opinions, of the bankers and of the business men of St.
| Louie as to where a bank should be located In this section,
' where it would best serve the business of this section,
! The problem Is a purely economic one. Of course, you
! realize that it Is a national problem; you realise that the




• committee cannot easily map out any district without reference;
, to all possible dietriots. It Is a problem that we desire



to consider in the broadest possible way, aside from any


mere local considerations or considerations of local pride,



| We should like to have all the facts we can get concerning





the course of business in this section, and especially
; concerning the financial movements, and connections. We
| shall, therefoie, aak the gentlemen who desire to be heard
to direct their re&arks, to those points.
Tfc are familiar in a general way with the industrial
situations in the different sections of the country, especially in this section, and we shall concede in advance
al] the oratory that you might desire to furnish. What we
want la the facts, and we should be very glad to hear any
jj representatives of the business men and the bankers, of the
( city.
Who Tiill firat o^eak?
Tho Secretary of the Treasury: Mr. Wade seems to be the


The Secretary of Agriculture: Mr. Wade, will you keep

;; your seat please, and give the reporter your full name and
{ your occupation, and what you represent.

Fcatus J. Wade, occupation, President of the Mercantile ;

I Trust Company and Mercantile National Bank, and as President
f representing the Clearing House Association of 8t. Louis. ;

The Secretary of Agriculture: Mr* Wade, may 1 ask you to

1; speak as Xoud as it is convenient so that those who are here



may hear you, and if you have in mind a district that
you desire us to consider, and you have a map of it, it would
[be a convenience if re could have it at this time*
Mr. Wade:

A map will be presented here,Mr. Secretary,

Those of us charged with the responsibility of presenting
the claims of 8t» Louis for a Federal Reserve Bank, and seeking the territory that we are going to ask you to allot us,
fairly realise the difficulties that you are confronted with,
and while the territory that we are going to suggest for the
St. LoulB Reserve Bank is much larger than we really desire,
yetf from our knowledge of this locality, we think it importj ant that you should give us the territory remotely away from
I us, for the reason that it will be a borrowing territory,
while we are distinctively a lending locality.
In order to conserve your time, and to utilise the opportunity given us, we have divided our work up.

Those follow-

ing me will present plats and data in addition to what I will

The banks of the section that we have suggested

for the territory for the regional reserve bank at St. Louis
comprise in numter 6,393.
The Secretary of Agriculture:

State or national?


Mr. Wade:


State and National, but of that number there

are 3,104 which are ineligible owing to the provisions of
the bill in regard to capital and surplus.
One of the common errors that are made in discussing the
subject has been to Ignore the state system, whereas an
examination of our territory, particularly, will prove that
the state system is of equal importance to the National
system. For Instance, in the territory that we are going
to suggest to you, there are 1,483 national bants, and there
I are 4,910 atate banks, and trust companies*
il The capital of the banks, that are in the territory,
from the standpoint of national banks, is over $300,000,000•
while the state banks and trust companies are about £250,000,000
The reason why we think a bank should be located in St.
;: Louis is that we have one seventh of all the capital Invested


i! in our banks and trust companies that is Invested in this
jj entire district, and we have one sixth of the deposits of
the whole district, and we have loaned into that district,

j outstanding today, 1247,000,000. We are distinctively a
•! lending community to the southwest and the middle west*

X believe you want no data in regard to the stability of

[ the town because you accept that, naturally, but In passing.



I want to say that St. Louie has been immune from bank
failures of any kind for more than a quarter of a century.
|; These 3,100 banks that are now ineligible are our
customers, and while there Is a provision in the law which
I gives the Federal Reserve Board a right to allow then

I to deal with us, yet we believe and *e hope that if you
will give us the district we have allotted, before the year
[expires we will induce a great many, if not all, of those
banks to increase their capital sufficiently to come into
the aystea.
{ Every National Bank in St. Louis has already notified
they are going to join. The State banks in St. Louis
I are eager to get the application blanks in order to know
{under what rules they can come in, and I am quite sure,
from what I know of the local situation here, that we will
[start out with a stock subscription of f75,000,000. of
j:capital and surplus in the banks of St. Louis* That is to


jsay, six per cent of that amount.
j Now* the territory that we have selected is entirely

I the commercial territory that Is trading with St. Louis.
We have tried to avoid as much as possible any other
territory • The bankers and the merchants of that locality





know us, we know them, we know the value of their oredit,
: they know what we have done for them.


In conclusion, we are all unanimous on one subject and

i we beg of you not to establish more than eight banks, no
matter where they may be located. If you can make eight
banks successful, which I have no doubt you can, and you
find it necessary and wise to expand the system, then the
others can be added at any time, as you have the power to
do so. But we believe, for the beat interests of the whole
country, particularly our section of the country, the establishment of more than eight banks would be a mistake,
to start with.
I I thank you, gentlemen*


I The Secretary of Agriculture• Mr, Wade, just a moment,
please* What did you say the deposits of this section,
with the balances, with the St. Louis Banks are?
Mr. Wade;

I did not have the balances with the St. Louis

banks. The capital of the national banks in the section
which we have allotted, the capital and surplus, is
#263,703,000; of the state banks and trust companies,
1395,811,000. making a total of $558,514,000, divided
aaong 6,393 banks, of which 1,483 are national and 4,910



are state banks and trust companies.
The deposits of the national system in this territory
are 11,010,438,000; of the state banks and trust companies,
The Secretary of Agriculture: Have you figured out
definitely what the strength of this regional bank would
Mr* Wade: Well, you cannot figure that out, Mr* Secretary because you do not knotr how many are going to come
in, but If all of them did come in,The Secretary of Agriculture:

Suppose only the

national banks come in, have you figured that out?

Mr* Wade: Well, that Is an impossible supposition


because we know that the state banks are just as eager


to come In as the national banks are.

The Secretary of Treasury: Assuming the national banks

as a minimus?
I Mr. Wade: Well, with the national banks as a minimum




it would be 113,500,000.
I The Secretary of the Treasury: What would be its
; capital?
Mr. Wade: Yes, air.



The Seoretary of the Treasury: What would its resources
; Mr. Wade:

Its resources would be about 0130,000,000.

in addition. In other words. It would be about f ; The Secretary of the Treasury: You do not mean that It
would hold that much in reserves, do you, just on the
national banks?

1 Mr. Wade*

You mean the reserves in the association?

The Secretary of the Treasury:

Yes, I aean In the bank*

Mr. Wade: No # it would be about $60,000,000.
THE SECRETARY OP THE TREASURY: Without reference to any
government deposits?

Mr* Wade: Without referenoa to any government deposits,

[ without reference to any state institutions?

The Seoretary of the Treasury: Yes; I understand; You

| are assuming the national banks now as a minimum?


Mr. fade: Tea, sir.


The Secretary of Agriculture: What is the praotice


1 in this city in the matter of paying interest on balanoe»?
Mr. Wade: As a general proposition, in fact, as a
universal proposition, the state banks all pay interest.
Many of the national banks do also. The usual rate is two



per cent on daily balance a.
The Secretary of Agriculture: What about check
Mr* Wade: Check collections are governed under a clearing house rule for those that are doing business and living
within the clearing house zone*

For flrmsf outside, In order

to induce outside deposits, it is discretionary *lth a bank
or a trust company, whether they charge for collections,
and where a thing of that kind 1B left discretionary, why,
there is usually no charge.
The Secretary of Agriculture: What would you say the
general rule is?
1 Mr. Wade: The general rule is to collect the checks of
! outside customers without charge•
; The Secretary of Agriculture: In making out this district,

;Ur. Wade, have you considered the other possible districts?
Hava you laid It out with reference to other possible d i s ~
I tricts?

M r . Wade:

We have laid out the country as we think it

would be beat for the country.
M r . Watti;

the Chairman of our Bankers Committee will pre-

sent that and the reasons why they a r e laid o u t .




The Secretary of the Treasury:

Mr. Wade, you spoke of

|the number of ineligible atate banks in this district, I

|have f o r g o t t e n the number•
Mr. Wade:

Ho?r isany rrere there?


The Secretary of the Treasury:

They must, therefore,

have a capitalization of less than f35,000.
Mr* Wade:

No; th«,t does not necessarily follow,

A atate

bank in St. Louis would be required to have a capital of
The Secretary of the Treasury:

I was thinking of country

banks, of course.
Mr* Wade:

Well, a country bank would be required, first,

!j to have a capital of $35,000. and then if it were in a city
of over 6,000 inhabitants, it would have to have $50,000*

The Secretary of the Treasury:

But a great majority of

j then, I presume, of the banks, you are deferring to, have
! lees than $25,000. capitalisation?
I Hr* Wade: Probably half of them, the others are dlaj qualified by reason of the fact that th^y are in localities


1 where their capitalization Is not up to the standard.

The Secretary of the Treasury:
the national banking act.

I understand; not up to


Mr. Wade:


Yea, sir.

i The Seoretary of the Treasury:

And you think tha$ the

Ibanks would be disposed to increase their capital to make
them eligible under this bill, do you?

Mr. Wade:

That is my impression, particularly if you

! give ue the district with those banks in it that are deal*
ing with us, and that will take our advice and be guided
I by our methods of doing business•

And we, of course, are

| vitally interested in getting every bank in our district
into our reserve bank, because ww want It the moat important
bank In the country if we can make It so*
The Secretary of the Treasury:

You are not trying to

make tthis a dominant bank, are you,
Mr* Wade:

Wo, air*

And there la one feature as to which

we could change the conditions throughout the United States
| and the commerce of the country if you give us the territory
we seek, and it is that we will sell our exports in dollars
Instead of in marks, pounds and francs*

We are right

here in the midst of a territory that creates fully fifty
per oent of the exports that create foreign exchange and
yet, because of the preponderance of capital and centralization of capital,in the eaet, we have been unable to create



a foreign exchange market; but if you give us a bank talcing
in the territory which we have laid down, which is some
of the poorest territory in the United States, as well as
the best, we will create a foreign exchange market in St.
Louie that will change the disgraceful condition of handling
the business of the United States today, because every
dollar we export and every dollar re import, we import in
foreign money, and if you will allow us to have a bank here
I strong enough to handle the foreign exchange of this section
of the country, we will then have the power to sell foreign
exchange in dollars and cents, and to buy Imports In dollars
and cents, which you and I know cannot be done today even
|in the Philippine Islands, that we own*

The Secretary of the Treasury: Mr, Wade# the argument

of the bankers in New York, in line with your suggestion, was


j that i t wan necessary to have a great, dominant bank in

I Sew York for the very purpose of dealing with this foreign
exbb&nge question*

Now, to what extent, do you think that

argument has force.
Mr. Wade:

It has no force, Fyom practicalyexperience

with one institution, comparatively new, practically unknown
in Europe* we have handled in cur office $30,000,000 of



foreign exchange in one year, and we could just as well
handle fl50,000,000. of foreign exchange in one year
with the capital that we have there.
The Secretary of the Treasury: You do not think, thereforo, that in order to command the respedt of Europe, as
was argued in Hew York, that it is necessary to have one
large, preponderant bank in this system?
Mr. Wade: No, sir, I do not.
The Secretary of the Treasury:

On the other hand, do you

not think that the European Bankers will look to this system
as a coordination of strong units, provided we get a
sufficient degree of financial equipoise in the districts•
Mr. Wade: No question about that.
The Secretary of the Treasury:

And that they will look

more to the strength of the system than to the strength
of any individual unit of the system,
Mr. Wade: Ho question about that. And the strength of
the system, Mr. Secretary, is going to be secured by dividing those banks up so they can stand on their own bottom
and take care of their own territory and never use the
power that is vested in the Federal Reserve Bank to con*
eider them altogether, except in times of financial con



gestion in that territory, and then they will have the
help of every bank.
I The Secretary of the Treasury: That is the question I
|was raising, whether or not the financial equipoise in
[getting together units that would toe so maintained and

[capable of taking care of themselves under ordinary conditions* and then the power of the Federal Reserve Board
to require essential cooperation in times of distress,
would not that be a system as an entirely that would be of
commanding influence in the financial world.
Mr. Wade: Absolutely.

And the theory of requiring a

great big bank to handle foreign exchange ie a myth. The
( foreign banker does not buy a bill of exchange unless he
is satisfied with the bill of lading attached, with the
drawer of the bill, with the accepter of the bill, and if
be is satisfied with thatf he would just as soon buy it
tiom a bank with a capital of $10,000,000. as he would
of a bank with a capital of 11,000,000,000.
The Seoretary of the Treasury:

Mr. Wade, there is one

aspect of this question I should like to ask you about*
Under the present system of carrying reserves, in the
different cities, and in addition to that exchange balances*



80 called, the country banks, carry very large balances

jln He* Tork and the other central reserves, and more par-


jtloularly in the central reserve cities, and New Tork exchange Is usually in demand*

Now, with this system of

parring, all exchanges between these federal reserve banks,
do you think it is going to be necessary to carry exchange
balances in the different cities, to the extent that it is
now done?
Mr* fade:

It will not be necessary to carry a dollar,

jlfr* Secretary, under the provisions of the bill. The
check of a bank of Chilllcothe, Missouri,* will be aa good
as the check of the National City Bank of New Tork, or the
National Bank of Commerce of St. Louis, New Tork or Chicago.
I The Secretary of the Treasury:

Precisely. Now, is not

that going to tend to destroy the artificiality of the
present system*
Mr. Ward:


The Secretary of the Treasury:

And restore normality

[throughout the country?
Mr* Wade: That is one of the sound, fundamentals of the

The Secretary of Agriculture: Mr. Wade, referring to the



argument that the Secretary just raised, it was contended
that there should be one very strong unit In the East,
not only to Inspire confidence abroad, but to control the
discount* • Is it your judgment that European Bankers would
direct their attention to any one of these eight or
twelve unite, or, would they think of the National Reserve
poner established under this system, and the powers of the




reserve board?

Mr. ^ade:

We cruet give the European the credit for

having the same average degree of intelligence that we




possess in this country, and if they will read that bill


they will see that while there are eight, separate, dietinct banks, the power is vested, and will tin questionably
be ueed at any time, to protect any of the weaker banks,
or any bank in any district in an hour of distress, and

they are going to deal with us as a whole.
While$ of course, they will deal *fith a bank in St.
Louis or with a bank In Chicago, or with a bank In Hew
York directly, yet they will recognize that in the last
analysis the transaction is with the National Reserve
System of the United States of America.
The Secretary of the Treasury: Precisely. Is not the




potential factor in the influencing of the gold, movements,
| and of exchange, the discount rate that may be establiehed
! from time to time?
Mr, Wade: Tee,
The Secretary of the Treaeury:

And since that resides

ultimately in the Federal Reserve Board, having the power
to review the rates of the different reserve banks, it can
exercise that power of review in the interest of all of them j
where required*
: Mr, Wade: That is true, and right there, Mr, Secretary,


lie where the power of the Federal Reserve Bank of St. Louis
will come in, if you give it a territory which we have
outlined, or approximately such, because we create the
exchange that is used by Europe to take gold away from us
or send it back to us* Now, at any time, with a strong
bank here, by looking up our bills of exchange, or by a
free selling of them, we can stop the flow of gold, or
bring it back to us any time we choose*
\ The Secretary of the Treaeury:

Now, Mr, Wade, we might

[like to ask you, or I might, rather, I might say, like
;to ask you some questions in relation to this district
\that you have in mind, but X will defer this until the map





can be presented, and I think It would elucidate this
matter rery considerably if we could have that map presented next. We might call Mr. Watts. I think you said
he has the map*
• UT. Wade: Tee, Mr. Watts has the map.
The Secretary of the Treasury: We might have Mr. Watts
(Statement presented by Mr. Wade, marked F* J. Wadefs
Exhibit No. 1, January 31st, 1914, and is attached
Mr. Watts: I will offer my apologies to the Secretaries,
for approaching with such voluminous documents, but they
j are not as formidable as they appear.



The Secretary of Agriculture:

We will decide whether

an apology is necessary after you appear a little further,
The Secretary of the Treasury:

You give your name to the

record, Mr* Watts, and your connections?
Mr. Watts: F. 0* Watts, President of the Third Hattonal
Bank of St. Louis and Chairman of the Special Committee
appointed from the 8t. Louis Clearing House Association.
Gentlemen, I want the privilege, if It is your pleasure,
of first presenting oertcfn exhibits and then It would give
ice pleasure to answer any Inquiries that you may desire to
propound to me, or to volunteer information, as suits your
The Secretary of Agriculture:

If you will, let me have

the map you have In front of you and proceed.
Vr* Watts: The first exhibit Is the map of the St. Louis

j territory.

The Secretary of Agriculture:

Of the proposed territory•

Row If you will just trace this map and give us the reasons
that you have for seledtlng this territory, and putting In


your argument In the way you wish then we will ask you quest- j




iona afterwards*
Mr. Watts: Mr. Commissioner the map as presented pro*
bably forms a composite of all the St. Louis commercial territory andof such other communications of trade and commerce
aa the mail order business, the circulation of the St. Louis
daily papers and of the banking transactions, being the
natural course of exchanges. It ia the consensus of opinion
of the Committee of sixteen representing St. Louis. It was
the idea of this committee, and those now being in charge
that the essential of any district was for it to have an
for it to be well balanced financially, for the privileges
of the act could not be exercised unless there was a foundation of reserve, of banking capital and resources. Nor
can the territory known aa the cotton territory, or the
[• agricultural territory, of this country be properly served
unlesa it is so balanced by another part of the country
furniahing that foundation for credit, banking capital,
reaourcea or reserves* The 8t» Louis idea conforms in my
opinion to this fundamental. We feel that in secondary
importance 1B the natural course of business. Banking, as ,
you know, ia the machinery of commerce, and follows ths




commerce of the country. We feel that the territories, as
outlined, follow, therefore, both the natural course of

business and the course of banking, the course of exchanges

I would call your attention to a map which might be

| taken in conjunction which, realizing that any district,
as the Secretary has so aptly stated, must be taken in
] consideration and in connection with all the other districts
to be formed. And we, therefore, take the liberty of pre; senting a map showing the connections that the proposed
St. Louis District would have with all other districts
of the territory.
It can be seen from that map—the second m a p — I desire
also to make a part of the exhibit certain figures covering the various districts.
The Secretary of the Treasury: The capital and reserves?
Mr. Watts: We have that indicated, both of the natural
ban):a and the state banks of that district, and the estimated
capital of the proposed federal reserve bank, taking the
national bank capital plus fifty per cent of the state bank
capital in the various districts*

Our reason for taking

fifty per cent of the state bank capital is that in our




opinion twenty-five per cent of that capital would be available and twenty£five per cent would not accept the terms of
the act.

So, for the purpose of making the figures, we have

taken the entire capitalisation of the national banks and
fifty per oent of the capitalization of the state banks•
The Secretary of the Agriculture: What is your information*

Mr* Watts, as to the legality of the subscriptions from state

: banks in this State?

Mr. Watts:

I understand that the Attorney General of this

State has given the opinion that the 8tate banks may sub!

scribe to the capital*
It will be seen that in the 8t« Louis district, as re*
lated to the entire system, that there are three banks—
four banks—larger in slse somewhat, though not materially
than the others•


It will be seen that districts number three and five are
in a larger area and have a somewhat larger capitalisation;
the idea being that these districts would bear the burden of the
I stable crop of this country, the two districts taking, as
they do, the entire cotton section.
The district number three,' running as far west as the



eastern line of Mississippi; and district number five, being
the*St* Louis district, taking in the ootton states of
Mississippi, Louisiana, Arkansas, Texas and Oklahoma*
We feel that it is necessary to give such banks, the
oanks carrying that district, a somewhat larger capital
than is given to other banks having a different kind of an
The Secretary of the Agriculture:

I notice in one of the

districts you include a part of Pennsylvania with the far
south. What was your reason for that?
Mr* Watts: That is for the purpose of obtaining sufficient banking capital and resources and reserves to balance
i the large amounts of cotton territory given to that district*

The Secretary of the Agriculture:

You want a borrowing

I section with the loaning section?

Mr* Watts: A loaning section with a borrowing section*




The secretary of the Treasury: Has that idea been

I followed wherever possible in laying out these districts?
Mr. Watts: It has, Mr. Secretary.
I The Secretary of the Agriculture: What would you do

1 then with Denver in No* 7?

That seems to be a sort of a



Ur, Watte:

Number seven, we haven't had much to do with,

like when we were boye and we were playing with the box and
adding puzzle, we got seven in and the eight was the one that
gave us the trouble*
The Secretary of Agriculture:

The seventh one here

is the one that has given you the trouble?
Mr, Watts: Well, we didn't finish the Pacific Coast,
The Secretary of Agriculture:

You don't give us the

capital that would be left for that district In this statement*
Mr* Watts: We have not, Mr* Secretary, and felt-**
The Secretary of Agriculture:

You don't mean you

could not discover It, do you, Mr. Watts?
Mr* Watts: We could discover It, but in such limited
quantities that I feared the miner would not consider It
pay. We felt that In the St» Louis district, or the Chicago district, as placed,—-we gave for those districts
what Is In our opinion the natural course of business and
the natural course of banking*

We felt that possibly or

probably there might be taken from Ho* 6 and No. 5 such



territory as seemed advisable for making fair proportions
with district Ho. 7. On the other hand we felt like advanci n g this, Mr. Secretary; in connection with that particular

; district, that Inasmuch as this is practically a government
system, that inasmuch aa it Is entirely under the control
of the Federal Government, and that inasmuch as the deposits
of the United States Government can and probably will be
used as a method of balancing *ny where In the system at any

| time, that the United States Government could well afford
In district Ho. 7 to give to that district an ample part of it
deposits for the purpose of meeting the needs of that district
in the matter of reserve.

The Secretary of the Agriculture: Wouldn't that be

j artiiiclal, Hr. Watts?



Mr. Watts: I don't think it would require BO ouch attent- |


j Ion of that kind for the reason that it is in a district


with very large demands upon it*


The Secretary of the Treasury:

Now in referring to dietrldt i

No* 5, as you have laid it out here, and having in mind the
requirements of the Aot: That the district shall be so
established as to servd the convenient and the customary
course of business of the country, we will take Indianapolis



and consider that*

Does Indianapolis have larger business re-

lations with St. Louis, for instance, than with Chicago?
Mr. TTatts: I donft think so, Mr. Secretary. But there
must be some inconvenience in the distribution of territory,
and In my opinion it is no violence to the business of
Indianapolis; and St. Louis needs the reserve and non-borrowing territory for the purpose of enabling it to carry Mississippi , Arkansas and the borrowing part of it a territory.
The Secretary of the Treasury:

Well, but aside from that

n o w — I am getting down to the fundamental that I have just
presented—Indianapolis the normal course of exchange and
business would be more to Chicago than to St. Louie*
Mr. Watts:

I think so*

The Secretary of the Treasury: We have testimony to that
Mr. Watte: I think so.
The Secretary of the Treasury:

Row take the whole of

that section, all of Indiana which you have Incorporated
Into that district, does the same argument apply?
Mr. Watte:

It is probably the only part of the district

to which the argument would apply.



The Secretary of the Treasury: Now excluding that for the
purpose of die cue si on—you draw the line across Illinois
here north of Springfield.
Mr. Watts: Yes*
The Secretary of the Treasury: IsnH that doing violence
to the ordinary course of business?

Isnft Springfield9s re*

lations, business, commercial and financial, more with Chicago'
than with St. Louis?
Mr. Watts: I would be unable to say, Mr. Secretary, as
to that; but taking this occasion to speak of the modesty of
our friends of Chicago, claiming East St. Louis and the
entire southern part of Illinois, we felt like reciprocating
, in a sense—we don't claim Evanston and Englewood,
The Secretary of Agriculture: Is that a compromise?
Mr. Watts: Yes, a compromise.
The Secretary of the Treasury; That is a counter-claim?

Mr # Watts: Yes*
The Secretary of the Treasury:

How, Mr. Watts, laying

!' ott||;a line,here in Southern Illinois which would really conf serve the ordinary course of business, where would you put
| that line?




Mr. Watts: I would put it very near Springfield*
The Secretary of the Treasury: Well, how near?
Mr. Watts: I donft know but what Springfield would prebably te the boundry line.
The Secretary of the Treasury: Would you incorporate
Springfield in this district?
Mr. Watts: I think I would.
The Secretary of the Treasury: The City Itself.
Mr. Watts:

I think I would*

The Secretary of the Treasury: To what extent now are
its exchanges with St. Louis as against Chicago?
Mr. Watts: I fancy the larger part of its exchanges are
with Chicago at present.
i The Secretary of the Treasury:

Well, now when you get

to East St. Louis, how far north of that would be a normal
line if you would divide Illinois?


Mr. Watts: Well, Mr. Secretary, it is my desire to file
; with you several hundred letters that have been received
|| from bankets all over the country aa a result of a letter sent
I out by the St. Louis Clearing House Association, & copy of
! which I will also file. I desire to furnish the record with



these letters*
The Secretary of the Treasury:

These may be filed as

aa exhibit to your testimony.
Mr, Watte: You will find more than fifty letters there
from all over Southern Illinois which more aptly than I can
state it express the sentiment of Southern Illinois, and we
take it from that you will probably see how high up there
was a drift of business and the desire to come to St. Louis.
The Secretary of the Treasury:

I imagine that would be

true particularly to the territory through which these east
and west lines run—railways lines—which bring them into
close and convenient intercourse with St, Louis*
Mr. Watts: Yes.
The Secretary of the Agriculture:

Now the question is

how far north of St. Louis that line ought to be drawn•
Mr* Watts:

I think that line ought to be drawn just as

far north as would be fair betweenconvenience and violence*

The Secretary of the Treasury:

You want a twilight zone?


Mr. Watts: Yea. How I don't think the question of con-

. venlence should be the doalnent factor*

The Seotetary of the Treasury:
factor but a contributing one.

Hot the controlling



Mr. Watte: For 8t. Louis is in a different kind of

territory than Chicago, and therefore the line should be
forced as high up towards Chicago as would not do violence
to the territory.
The Secretary of the Treasury:
Kansas City*

Now I see you take in

Do you also include Omaha? The way your

line is drawn I cannot tell whether Omaha Is placed In the
'• Mr. Watts: We rather desired to leave that discretionary.
The Secretary of the Treasury:

In your figures do you

include Omaha in the capitalization?
Mr. Watts: No.
The Secretary of the Treasury:

That is not included?

Mr. Watts: That is not Included.
The Secretary of the Treasury: Would Kansas City's normal intercourse be more with St. Louie than any other city
in the volume of banking exchanges and commercial exchangee? j
Mr. Watts: I think so.




The Secretary of the Treasury: That it would be no re with j



St. Louis, Is that based upon*any facts that you have given j
or is that merely belief?




Mr, Watts: Well, I only state that as my own opinion ffom
close observation and experience covering a year and a half
or two years.
The Secretary of the Treasury:

To what extent does

Kansas City now carry reserve in St. Louis as against Chicago
and Kew York?
Mr. Watts:

Have you any facts on that?
I fancy that there is not much difference

between the reserve carried in the two cities. On the other
hand, I think the volume of business done with St. Louis
would be larger than with Chicago, but Kansas City bankers
could, of course, speak best for themselves on that.
The Secretary of the Treasury:

You have no data on that

Mr. Watts:


The Secretary of the Treasury:

Coming down into—coming

south you include Hew Orleans and the whole State of Mississippi?
Mr. Watts: Now, Mr. Secretary, I may state there that
after much discussion It was not included because St. Louis
particularly desired the territory, but because we felt that
j; the cotton territory or cotton belt of the country—



The Secretary of the Treasury: Tee.
Mr. Watts: —should be divided and put Into two strong
districts. St. Louis would just as soon the line would be
drawn west of Louisiana.
The Secretary of the Treasury:

Please understand in

; these questions it Is not gone into to indicate the preferences; It is for the purpose of developing the facts
that will enable us to determine h o w Mr. Watts: I understand thoroughly.

jj The Secretary of the Treasury:

Now, New Orleans, for

instance, are its trade relations and financial relations
more intimate with St, Louis, for Instance, than with Chioago
and New York?
Mr. Katts: I should say they were about equal with St.
Louis and Chicago, except that probably Chicago has some
larger bank capital and relatively It might be some larger
than St. Louis.
The Secretary of the Treasury: To what extent does New
I Orleans carry here reserves In St. Louis now?

Mr. Watts: I presume every bank In New Orleans has a

• reserve account In St. Louis.



The Secretary of the Treasury: Do you know what percentage of the New Orleans reserves are deposited here as against
New Tork and Chicago?
Mr. Watts: I do not.
The Secretary of the Agriculture: Take Nashville, Tenneeree—in regard to attaching Nashville and all of middle
Tennessee territory, for instance to St. Louis—
Mr. Watts: Mr. Secretary, I desire to say in regard to
1; Nashville I am qualified as an expert, probably the only sub*
! ject upon which I can qualify.
The Secretary of the Treasury:

If you can qualify as an

expert on Tennessee I will take off my hat to you*

I have

I been trying to qualify as an expert on Tennessee myself for the


I last year. I used to live there.

Mr. Watte: If you and I put our heads together we might

between us make one satisfactory solution of it. I realize
that the Secretary was a former citizen of Tennessee; and having


; myself lived in Tennessee for thirty years, and only recently-j


la year and a half a g o — left there, I feel very familiar with
Tennessee and the Kentucky territory. The trade lines, as

you will recall, are drawn very closely In Tennessee*




Hashville the bank of which I was the head had a very large
number of banks doing business with it throughout Tennessee,
Kentucky, Mississippi and Alabama.

We rarely ever attempted

to get banking business east of the Cumberland Mountains•


was distinctively a different trade territory, much more so than

Usually we go directly to Mississippi or Alabama.

The Cumberland Mountains, as you know, forms the trade line,
so that the eastern part of the state beginning with Chattanooga, would have Its trade relations with Cincinnati rather
than with Louisville or rather than with 8t« Louis, Louisville
being much closer as the crow would fly, but much farther
as commerce goea.

Therefore in the distribution of

territory—the location of a regional bank in district No*


4 would in my opinion effect the position of part of Tennessee
the eastern p a r t — I f the regional bank were located at Cincinnati I should say that East Tennessee should be put in the
No. 4 district*

Upon the other hand, if the regional bank

in district No. 4 were located at Cleveland or Pitteteurg,
I should say that East Tennessee should be placed in No. 3,
because the drift of business from East Tennessee would be
I more to the e a s t — t o Baltimore or Philadelphia, than to
any other city in district No* 4, than Cincinnati*




The Secretary of the Treasury: Well, now Nashville ie more
on the dividing line, of course?
Mr. Watts: Nashvillefs business is largely with St. Louis.
Kashville9s business is largely St. Louis and New York, Of
course, all lines heretofore left to New York,
The Secretary of the Treasury: fell, don't you think
Nashvillevs business is very largely with Chicago also?
Mr. Watts: Well, I don't think so in proportion to the
business of St. Louis with Nashville or those parts of Ternessee east of the middle or west Tennessee. I think if you
would take a poll of the bankers or business men of that part j
of Tennessee lying west of the Cumberland Mountains that seventy
five per cent would express a preference for St. Louis, after
waiving their own desire to have a regional bank in either
Nashville or Memphis*


The Secretary of the Treasury: Now getting back to Missouri
again for a momet. Representatives of St. Joe came to Chicago
yesterday and asked to be annexed to the Chicago District.
fhat would you say about the normal course of business so far
as 3t* Joe is concerned?
Mr. Watts: Well, I should say that due to the large Jbank






ing interest there that probably the interests would prepond- j
erate towards Chicago.
The Secretary of Agriculture: The same was true of Iowa* I
Iowa indicated, as far as we had an indication, a preference j
for Chicago?


Mr. Watte: Yes,
The Secretary of Agriculture: You have included Iowa?
Mr, Watts: Well, practically none. There was a small corner there in which the lines of railway led direct to St. Louis
Instead of to Chicago, and I included that part having the


location of the Keokuk dam, upon the principle that that great
work would somewhat change the industrial drift in that section
towards St. Louis .

The Secretary of the Treasury: Row you take in Eastern

Kansas, including Topeka. That territory seems to be tributoryi

and of course Is trlbutory—to Kansas City?


Mr* Watts: Yes.


The Secretary of the Treasury: And if Kansas City were in- '
eluded in this district I presume that would serve the normal
course of business?
Mr. Watts: Yes.




The Secretary of the Treasury: And of exchangee,
Mr. Watts: Yes. That Is an arbitrary line.
The Secretary of the Treasury: Now, of course, you under*
stand that there are applicants for reserve banks?
Vr* Watts: Yes.
The Secretary of the Treasury: Among them Kansas City?
Mr* Watts: Undoubtedly•
The Secretary of the Treasury:

Assuming that a reserve

bank were established at Kansas City, and another was establish
ed at St. Louis, the division of territory would be, as between St. Louis and Kansas City, very difficult, would it?
Mr* Watts: It would be rather difficult, but I don*t know—

The Secretary of the Treasury: Have they or not a very

distinctive territory which they serve?
Ur. Watts: Undoubtedly•


Every city has a distinct territ- j

The Secretary of the Treasury:

Is it or not more distinct* ;

ive in these two instances than almost anywhere else as be**


tween two cities serving—largely the same character of territ*
| Mr, Watta: I think Kansas City comes east a very short

I distance*



The Secretary of the Treasury:

Now southwest.


Oklahoma; are her business relations more with Kansas City
or St. Louis?
Mr. Watts:

I think it would require someone more expert

than I to divide up Oklahoma.
The Secretary of Agriculture:
Mr* Watte:

How about west Texas?

I rather feel that the same question would

apply to West Texas, Mr. Seoretary.

Certainly a large part

of Texas—a larger part of Texas, and possibly a part of
Oklahoma would come to St. Louis, even if a reserve bank
were established at Kansas City for district Ho. 7.
The Secretary of Agriculture:

The cattle business goes

to Kansas City also?
Mr. Watts:

Yes, sir.

The Secretary of Agriculture:

What would you think in

jj No. 7 there— Just for discussion— what would you think of

including Kansas City and part of this territory here In No*
7 and having that serve a regional bank In Kansas City Instead of Denver?
Mr, Watts:

I think It would be a logical thing to do, as

the course of business Is eastward from that section of the


The Secretary of Agriculture:

Would it not also serve the

i other purpose of giving a: loaning and a borrowing section?
Mr. Watts:

I think so*

The Secretary of Agriculture:

And a very diversified


Mr* Watts:

I think so.

The Secretary of Agriculture:

In that case how would you

be inclined to draw a western line of district five?
Mr* Watts:

I would start about* I should say—I don't

know the distance in mileage, but in a point on the Iowa
. line running south and possibly fifty miles east of Kansas
City, the mileage Is Immaterial, however.
The Secretary of the Treasury:
Mr, Watts:


Generally it may be seventy-five miles, might

be eighty-five miles• And running down southwestwardly,
taking in Joplln, Missouri, and the north Arkansas line,
putting the entire State of ArVansas in the St. Louie district
and then up to the very difficult, and the most difficult
question, of the line through Oklahoma*
The Secretary of the Treasury:
Mr* Watts:

And Texas*

And Texas?



The Secretary of Agriculture: West Texas?
The Secretary of the Treasury: Would you include under
those clrcunmtances, Mr. Watts, Nebraska in that district.
The Secretary of the Treasury:

Where would you put the

rest of it—in Chicago*

Mr* Watts: No*


The Secretary of the Treasury: Would you put Omaha with
Chicago or with Kansas City?
Ux* Watts: I think probably Omaha would prefer going to
Chicago. It would very forcibly prevent the view—the
natural course of business in exchanges for them would be
to go west or south*

But upon the other hand It would

quite a desirable thing to place them in that territory
for the purpose of further balancing the territory*
The Secretary of Agriculture: Of course, you know, Mr.
Watts, that the act makes the establishment of branch
\ banks compulsory?
Mr* f Watts: Yes*
The Secretary of Agriculture:

You think that branch

banks in parts of this territory could reach the facilities



Mr, Watts:


I think, therefore, Mr* Secretary,

aside from those districts in which there are localities
standing out in public opinion and in our relation with
foreign countries aa financial centers —

aside from those

points> where regional bnnfcs should be established that it
is rither imrr&teri&l, so far aa the service is concerned,
;whether a ban*: is located In one city or another, having
[due regard for the natural course of exchange.

I think,

for Instance, the entire cotton section of No* 3, or any
part of No« 5, could be just as well served from Philadelphia
or Baltimore as served from any other point, with a branch
located, for instance, in Richmond, and Charlottet and Atlanta,'
and Savannah, and Birmingham, and Montgomery, and Mobile, and
euoh points*
The Secretary of Agriculture:

One argument that has been

used la that the banlta do not feel at home. Fow you
.think tfcey would ^eel in sympathetic touch with St. Louis and
this territory?
Mr* Watts: Undoubtedly.

I think St. Louie can serve

Hew Orleans or Little Rock or Memphis or Hashville; and
those in that territory would be served through the branch



at those respective places just as well as if they had a
regional bank.

The law provides that, as you recall, the

local board will operate that bank, composed of four
appointees of the regional banks, and three of the federal
reserve board.

So that there would be a local board or

executive committee that passes upon the dally routine of
The Secretary of Agriculture:

Then the directors of tht

regional bank are not selected from the locality of that
bank at all?
Mr. Watts:

They are not.

The Secretary of Agriculture:

Tou think it would be good


| policy to distribute them?


Mr. Watts:

I think it would.


The Secretary of the Treasury:

Would the directof of

| the branch bank come nearer representing actually the
!: local community?




Mr. Watts:

I think so.


The Secretary of the Treasury:

That the directors of th*


j; regional bank itself would come nearer representing the
i; local community?



lfr# Wiitta:


I think so*

In thecase of the Federal Re-

serve Bank—that i s the headquarter bank—there i s selected
from a l l p**rts of the d i s t r i c t .

Now in thecase of the

| branch, the very object of having a branch bank i s for i t

; to look after the more local territory connected with
that branch.

And I assume, Mr. Secretary, (addressing the

j Secretary of Agriculture) that the area of this very influence would be at home ultimately, so it would bring It
in very close touch with the local influence•
The Secretary of the Treasury:
about Memphis.
Mr. Watts:

I would like to ask you

Memphis1 relations are more intimate where?
I think with St. Louis than any other city.

The Secretary of the Treasury:

Than any other city?

Mr. Watts: Yea.
The Secretary of the Treasury:

More so than with Hew

York, for instance?
Mr. Watte:

Well, not more*

There would be a difference

between intimacy, Mr. Secretary

and volume of commercial

Under our old system, you understand, we

all had to go to New York.
The Secretary of the Treasury:
tinder those circumstances?

You qualify "intimacy*


Mr. Watts:



We attended their dinners and did

everything else we could.
The Secretary of the Treasury:

Well, with the establish-

ment of this system and the disbursing of the necessity now
existing for maintaining theee exchange balances or reserves, you think that the normal course of things as between Memphis and St. Louie would be to have those balances
in St. Louis?
Mr. Watts:

I think «o.

The Secretary of the Treasury:

The normal transaction

or great bulk of them, would, you think, be with St. Louis?

Ux. Watts:

I think so.

I think the Memphis bankers

jj would eay, if you do not grant t M r request for a region• al bank, that they would like to be attached to the St. Louis
1; territory.

The Secretary of the Treasury:


Mr. Watts:

I thank you, Mr. Watts.

I feel like suggesting, Mr. Secretary, that

1 if district No.5 Is changed upon Its western boundry that
ji It would be very pleasing to have addAd to Its eastern

| boundry of St. Louis some of the territory, such as Louis-






j! ville, Kentucky, for instance, if a regional bank were


not established In Cincinnati.





The Secretary of the Treaeury:

Mr. Watta:


I believe, for instance. Louisville would

[prefer coning to St# Louis rather than going to Pittsburgh
!or Cleveland.
The Secretary of Agriculture:

As between St. Louis and

Cincinnati what would be your impression?
Mr* Watts:

I think Louisville would prefer going to

Cincinnati, but I think the only point in No* 4 which Louisville would prefer to St. Louis.
The Secretary of the Treasury:

The suggestion has been

made, Ur, Watts, that the regional ban* here should be
\ established in Kansas City with the branch in St. Louis•
! What do you think of that?


Mr. Watts:

Well, I would not think very well of that

for sentimental and other reasons which are apparent# I
aa sure.

I do not think it ie necessary for any such issues

to arise, because I think they serve rather different

territories; and In the language of a certain distinguished
Admiral "there is glory enough for us all*.


Mr* Secretary, before leaving, I would like to file with
you here as an exhibit a statement of the St. Louis Clear*



ing Rouea Association.

It is data that you probably could

not obtain otherwise, owing to a rule of the St. Louis Clear\ Ing House that when the banks are called on, national banks
or other institutions, both state and non-member banks,
must file with the secretary a statement.

So we have an

up-to-date statement of all the financial institutions of
St. Louis•
The Secretary of the Treasury:

Tou doNft thifak it would

be of much value to us or these banks in the Clearing
House in view of the tremendous alteration going to exist•
Mr. Watts:

This is a statement of capital and of re-

I want to file a statement of the number of banks

doing business in St* touie and the balance they carry
from the territory.
The Secretary of the Treasury:

Could you furnish these

in triplicate, Mr. Watts?
Mr. Watts:

I can have them made In triplicate.

The Secretary of the Treasury:

And also the maps, be*

cause it is difficult to copy these exhibits.
Mr* Watts:
in triplicate*

I would be glad to furnish these exhibits



The Secretary of the Treasury:

I am speaking more part-

icularly of the maps and the data you are now exhibiting


I mean make ue more copies.
Ur. Katts:

This is an exhibit showing the loans and

investments of the St. Louis bankers and trust companies
in this particular territay; particularly information that
the St* Louin banks have loans and Investments in this
territory, outside of Missouri of f63,500,000, and deposits
from that territory of $32,400,000, showing a credit of
131,000,000 in that territory.
The Secretary of the Treasury:

Do you care to retain

these until you make a copy?
Mr* Watts:


The Secretary of the Treasury:

The exhibits are to be

supplied and oan be numbered afterwards.
Mr. Watts:

1 would like to correct my friend Wade in

one statement he made*

He and I usually agree, Mr* Secret-

ary, but probably he is not as familiar with one particular
subject as I, being & bank doing a larger commercial
banking business with other banks in this territory*
I do not think it Is the custom here for the St. Couis



bank to take all outside checks at par.


I think rather they

have adopted—there has grown up because of the discretionary
rule of the Clearing House rather this: That in the immediate

territory of St. Louis, ir in those towns that

ordinarily expect the commercial center to take for them its
evidences of barter and exchange, that St. Louis is taking
them at par. But in territory, such as Tennessee, Miesisei
Ippl, Kentucky, Arkansas, Texap, Oklahoma and Kansas we only
•; furnish a par Hot, and the banks accept from their corree| pondents in those places such items at par as oan be used

by them without money coet.
I believe Mr, Wade would accept that as being a statement
as to what the facts are regarding the paring of checks
in this city*

Mr* Wade:

If I may be permitted to explain*

j Mr. Watts didn't quite understand me*
deposits of banks or bankers*

I think

He has in mind the

X had in aind the depotltft

; of commercial establishments whose headquarters are outy

! side of St. Louis, not ^anks#

Where a large commercial



establishment will Keep a substantial account in St» Louis .
it can generally, and I believe almost universally, clear
its check at par,, but not the banks; that ia the difference.
Mr. Katts:

I understood the purpose of the Secretary's

question to be to arrive at what were the artificial reserves and clearings at St, Louis?
The Secretary of Agriculture: That is it precisely.

The Secretary of the Treasury: You are, you say, Mr.

Watts, the chairman of the special committee of the
Clearing House. Is the president of this Clearing House
Association here?
Mr. Watts: Mr. Ifade is the president.
The Secretary of the Treasury:

I will address this

question to Mr. Wade:

Section 13 of this Act provides, aaong other things—

I I will just read the section, so you will see the point of
: the question.

"Upon the indorsement of any of Its aembefr 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 commercial purposes, or the
proceeds of which have been ured, or are to be used, for such
purposes, the Federal Keeerve Board to have the right to
determine or define the character of the paper thus eligible
for discount, within the meaning of this Act 8 .
Row there are some additional provisos which need not
read for the purpose of this question. What the committee
would like to have 1 B tfcieldea of the Clearing House Association, or the banks of St. Louis, as to what would be a
proper definition of commercial paper under the provisions
of this bill, and also as to what should be the fora of t h e —

as to what would be best to put forward as more or less of
a unlfork system of bills and notes of exchange, and 00
forth, in order to have the system made up especially upon
some basis of uniformity; and if you gentlemen will give
consideration to that and file a brief with the committee
[later on *>!!
|i Mr. Wade: Within what time, Mr. Secretary?

• The Secretary of the Treasury: Within the next two or
three weeks—aa early as practical.




Mr. Watts:

I am contenpleting leaving on a southern

I will take pleasure in filing that.

The Secretary of the Treasury:

As a matter of fact, you

may appoint a special committee for the purpose*

There is

another matter upon that we would like to have a similar
In Section 16 of the Act there is also a provision that
the Federal Peaerve Board shall make and promulgate from
time to time regulations governing the transfer of funds
and charges therefor among Federal reserve banV.e and their
branches, and may at its discretion exercise the functions
of a clearing house for such Federal reserve banks, or may
designate a Federal reserve bank to exercise such functions,
and may also require each such bank to exercise the functions
of a cldaring house for its member banks*
How that is a very important problem.
Mr* Wade:

Yes, undoubtedly.

The Secretary of the Treasury:

The Federal Reserve

Board and this committee would like while we are at work on
this problem to secure all possible data and information
which would enable the Federal Beserve Board, when organized,



to deal as promptly ae possible with all those phases of the
problem; and if in like manner you gentlemen would investigate
that subject and submit a brief, making recommendations—of
'course, it will have to be national in scope.
Mr* Watts:

Tee, I will take pleasure in doing so.

The Secretary of Agriculture:

Mr. Watts, I wonder If you

will put in an alternative map revising the districts?
i; Mr. Watts:

f Committee's

I would be glad to do so it if it is the


The Secretary of the Treasury:
I haa

Mr. Watts; if you care

a copy which I have indicated pages 14 and 19 as the

particular sections I have referred to*
Mr. Wattsr


The Secretary of Agriculture:

Will you give your full

name and what you represent?
Mr. Shaplelgh:

A* L. Shaplelgh, president of the Business

Men's League, and Chairman of the Shaplelgh Hardware Company•
The Secretary of Agriculture:

Mr. Shaplelghf you are

familiar with the Act and with the problem that we«*re



Mr. Shapleigh:

Yea, sir; I have read the act*

The Secretary of Agriculture:

We desire to have any in-

formation you can give UB—facts and business relations.
Mr. Shapleigh:

I will give you a few facts as to the

City of St. iouis first as to showing why that city claims
naturally the establishment of one of the Federal Reserve
First, because it is the fourth city in the United States•
Its industrial district is the third largest in the United

It has for years beenone of the three central re-

serve cities of the United States. The naae of Saint Louis
; as a banking center has been synonymous with solidity and


Its bank clearings for the year just closed aggregate four


< -^

j billions•



I will give you the exact figures*

I is a genuine oenter of population.

Saint I»oui«

About one-third of the

[ population of the United States reside within ten hours ride
of the city.

It ia entirely surrounded by land—its adjacent

territory not being interspersed with, or cut up by bodies
of water.


As a distributing center, it serves a population of
approximately thirty million people.

Twenty-six trunk lines

of railroads center here. These roads radiate In all dlrecttions—their rails covering a distance of 64,071 miles. These
figures do not include the mileage of controlled systems.
St. Louis Is advantageously located on the great Mississippi Valley water-way, which is used to a great extent today
and which with the completion of the Panama Canal will carry
largely Increased tons of traffic.

In 1914 the movement of

freight incand otilt of Saint Louis was 56,901,353 tons, of
which the railroads handled 2,189,309 carloads.
By the figures of the oenaus of 1910 Saint Louis leads the
world In the manufacture of stoves, street cars, chewing tobacco,
drugs, .chemicals, perfumery and kindred lines. That is one

Shoes, woodenware, clay products, vehicles,

not including automobilea, white lead, paints and kindred lines,
car seats and car furnishings*

The total value of the znanu-

! factured products of Saint Louis by the census of 1909 was

|f3£7,677,000*00• It is probably now more than four hundred
million annually.

Saint Louis is the focus of mid-continental distribution


of goods and leads all other markets in shipments of hardware,



agricultural implements, coffees, horses and mules, hardwood
lumber, millinery, saddlery and harness, bags and bagging, and
only one or two markets excel in shipments of dry goods, beer,
tinware, wool and other commodities.
It is the largest primary fur market in the world.
It is second in the manufacture of railroad freight and

passenger cars. The annual capacity being 52,500 freight cars
and 1320 passenger cars*
It is third as a cattle market.

There were 77,614 car-

loads of live stock received here in 1913.

It ranks second

as a hog market*
St. Louis is very close

to the center of population for

the Central States*
For the above reasons and mapy others, we claim one of
the eight Federal Reserve Banks should be located here.
Now with respect to the territory, in our judgment, which
; should be included in the Saint Louis District, it is as
All of Missouri; Southern Illinois including Springfield
and south of it; Southern Indiana including Indianapolis and
south and west of it*



The Secretary of the Treasury:

Are you taking the same as

this map?
Vr« Shapleigh:

Very close to it, but not exactly*

I have

neither Nebraska nor Iowa in this*
All if Kentucky; Tennessee> west of Knoxville and Chattani ooga, all of Mississippi, Louisiana, Texas, Oklahoma, Arkansas,
eastern Kansas including Wichita and east of it.
|; The above territory comprises about 12$ of the total wealth
of the United States*

It is a well balanced territory cover-

ing wheat sections, corn sections, cotton sections and other
crops, as well as ooverlng large manufacturing centers and
money lending sections.
The seasonable crops are all represented and the demand
for aid in crop moving can well be served from here by reason
of the fact that these various crops are harvested at differen
times and do not all mature at once.
Our lines of railroad and eiver touch quickly all points in
this territory and from no other point can this district
be served as well.
By means of package cars—and that la & St. Louis innovationdestined to prominent points merchandise from Saint Louis is



delivered to all principal places in this territory without
breaking bulk—thus affording a great saving in time*
Years of trading has brought all this district in close
touch with Saint Louis and this district looks pn Saint Louis
as its financial center*

With the transportation facilities

?: offered from Saint Louis and with the immense stock of goods

I kept here to be drawn upon this diatriot has looked upon
Saint Louis not only aa its financial central reserve city,
j but its merchandise central reserve city. A by-word in the
I trade is "Saint Louis has the Goods."

The channels of trade follow the channels of transportation.

! The channels of banking follow the channels of trade. These
| channels for this district all lead to and from Saint Louis
I and we ask that you establish one of the regional banks here,

so that Saint Louis may continue adequately to serve the
needs of this section, which has for so many years relied
upon this center.
I have in addition some matter here in the shape of an
exhibit, being resolutions from various commercial bodies
from many parts of the section described.
The Secretary of the Treasury:

I an


Those might be filed as



Itr* Shapleigh:

I would like to call your attention to a

few, Mr* Secretary, which relate to the questions that were
asked concerning southern Illinois*

There are a number from

that section.

The Secretary of the Treasury:

You might call our attent-

ion tc the territory without reading them, just giving the

Mr* Shapleigh:

One from Union City, Tennessee; Belleville,


Illinois; Cairo, Illinois; Cape Girardeau, Missouri•
The Secretary of the Treasury:

Are these the resolutions

of the Chambers of Commerce of these towns?
Mr* Shapleigh:

Most all of them*

Centralla, Illinois

;Commercial Club; Chester, Illinois, East St* Louis Commercial


They doK't want Illinois.

> The Secretary of Agriculture:

Are those in response to



Mr. Shapleigh:

These are in response to letters asking

[them what their views were with regard to the establishment
; i
I of a can): here and if they desired to be included in this
/ ;

The Secretary of Agriculture:

Have you any map showing the j



distribution area of St. Louie from your large distributing
Mr. Shapleigh:

The map I have will be practically the map

you have before you.
Of course, the distribution of goods from St* Louis varies
largely with the kind of goods*

If you will take the line of

industry in which I am principally engaged, we cover fortyone States of the Union*

Other men In the same line of busi-

ness here perhaps cover one or two more States*

The Secretary of the Treasury:

In Chjoago they had a

composite map and the line was made heavier where the territory served by the different businesses happened to co-incide,
and that was rather an illuminating map*

Mr. Shaplelgh:

I have this information, and which is not

yet fully tabulated, and that is a statement of the volume
of goods In the various lines distributed by St* Louis to the
i various cities in the Union*

If that would be of Interest

! to you I would be glad to have It compiled and filed with

:; you*;


TheN Secretary of the Treasury:

If you will have that

• platted on a map I think it would be useful*
The Secretary of Agriculture:

la that made up from &



number of your big business houses or the whole volume of business?
Mr. Shaplelgh:

That is the concensus from the represent-

ations of all lines of business. For instance in the dry goods
line, not one house's representations, but all of them; and
that would make their judgment as to the amount of goods,
for instance, which were put In Missouri, Arianaas, Tennessee,
Kentucky and the other States.
The Secretary of Agriculture:

There would be no easy

pay of showing the area from which St. Louie draws their
Mr. Shapleigh:

You mean the dietribution?

The Secretary of Agriculture:

No, from which it draws the

commodities flowing into St. Louis, the area.
Mr. Shapleigh: You mean the products of the farm and the
The Secretary of Agriculture: Any certain trade.
Mr. Shapleigh: Yes, I think that can be furnished.
The Secretary of Agriculture:; Or relatively furnish it?
Mr. Shapleigh:

I think I can give it to you without any

(difficulty at all.



The Secretary of the Treasury:

I thank you, Mr. Shapleigh.

The Secretary of the Treasury: Your name and connection,

Mr. Simmons?
Mr. Simmons: E # C. Simmons, Chairman of the Simmons Hardware Company •
The Secretary of the Treasury: Mr* Simmons, you know the
problem which we are trying to solve here, the division of
the territory into these districts. I should be glad to have
you give us any views you may have on that subjedt.
Mr. Simmons: Fell, gentlemen, I am here-*
The Secretary of the Treasury: You speak a little louder,
Mr* Simmons:

I aim here to ask for the establishment of

a bank In St. Louis because It is the best distributing center,
in my judgment, by far in the United States* It is the center
and hub of the grekt lli^Mesippi Valley, the fertility of ^ /
which is so well known talyou that it is hardly necessary tS
\ •
mention It, and the service from St. Louis reaches equally
well south and vest. St. Louis le a conposite city. That Is



to say, it Id the most southern and western.

Our friends from

the south class us as a southern city, and our friends from
the other sections class us as a western city.
The question of distribution of merchandise is recognized
to be a much more difficult problem than that of manufacturing.

The distribution from St. Louis has been built up in

such a large area where the daily tribute from that is so great
that It would seem to me almost unreasonable for us to ask
for a bank covering the entire area.
The service of our customers of St. Louis—1 speak now for
St. Louis as a whole—in the way of prompt delivery of goods
is perhaps one of the greatest factors in commanding trade«
Those not in business today as we are scarcely recognize that
the first thought when a man wants to send a mail order for
goode is where can I get it the quickest. We have a package
car servide from St. Louis that is especially well conduoted
and of very great help in the distribution of these goods. \
The place as to where people will buy is largely a matter/
of rates and of local temperament and to a large extent

The difference between the southern trade and the



northern trade, of which 8t. Louis enjoys quite an equal share,
Is shown In such a statement—a homely statementf probably
trivial statement, as this: When the southern merchants come
to visit our place they rarely ever leave the house without
asking to see the founder of the business* The northern
merchants never do* That Is simply the difference in the
customs and hospitalities of the different sections*
But the fact that St* Louis has tributary to It all the
States that grow cotton, and equally as strongly tias the
tribute of all the States that grow grain, and those two are

the great crops of this country, Is what makes it the best

I distributing center we have*

In certain lines of business the

I distribution from St. Louis has far exceeded that of any other
!city, notwithstanding our population Is not so large as some
I others•
I Almost every foot of soil directly tributary to 8t* Louis
Is fertile, and the products from It are tremendously varied,
embracing minerals, grain, cotton*
(i Ifr. Shapleigh has made some statements that I would have
made were I asked*

I am trying to give facts, as I see they

are desired, by stating that I submit to you here a sap whlcb



shows where our package oar service of this city extends,
very briefly, it will take but a moment.

Speaking for our

own buelnessThe Secretary of the Treasury:

Could you furnish us with

four copies of that, please?
Mr. Simmons:

Yea, sir, with pleasure.

The Secretary of the Treasury:

We would be very glad if

you will do that*
Mr. Simmons:

I will be glad to do that. We have six

houses, five besides the St. Louis house, and one more, which
is an exporting house, but we don't count that, and that map
shows the section we cultivate from the other houses, and also
from the St. Louis house, and shows espeolally that the die*
tribution from St. Louis is so much more satisfactory that it
permits a distribution more than all of the other five houses,
or fully as great.
How let me illustrate a little what I mean by the use of
Just the package car service and of quick transit of merchandise*

It is hard for those not engaged in general merchandise

to realize that many men make price secondary to prompt delivery.

We have a house in Wichita, which is only one hundred



miles from Oklahoma City. We have no package car service from
Wichita to Oklahoma City, and Oklahoma City, I don't remember
now, is four or five times the distance from St. Louie that it
is from Wichita, and yet all that section has requested us
to discontinue selling our business from Wichita and to get
it from St. Louis.
The Secretary of the Treasury:

What is the package car

j Mr* Simmons:

The package car service for example, Mr.

!Secretaries, twenty or thirty lots come to the Frisco Railroad
in St. Louis for Oklahoma from that many different houses;
they are all consigned in one car; the rates are the same as
though they went differently; that car is given special service to be put through asThe Secretary of the Treasury:

Mr. Simmons:

Is that a freight car?

It is a freight car. That same package car

service obtains in other cities the sane as there.
The Secretary of the Treasury:

It isn't in the nature of

;.an exrrees freight, but fast freight?
Mr. Simmons:

A very fast freight, but it has a great ad-

vantage, and it is the great thing that we are trying to



accomplish, and that Is to Improve car service.
I have a paper here which shows the circulation of our newspapers. We have a great many more travelling men. Our house
employes at least five hundred, and we find that wherever
St. Louis travelling men go the St. Louis newspapers go; and
that simply shows the circulation of them.
Here is a matter that some Aay consider a very trivial
one, but It shows where the Symphony Society of St. Louis goes
to shed Its beneflcents on different parts of the country who
;havo asked for them to come from St. Louis and give them the
benefit of the beautiful muslo they dispense.
Here Is a map I submit for your consideration showing what
we call the legitimate bounds of St. Louis1 territory as ex*
empllfied by the fact that we get a very large business from
that territory and that we sell in St. Louis in most every
line the principal part of the merchandise that is furnished
in every county In the State shown here.
I would be glad to furnish a duplicate of these• They
are made In our own shop—they are home made and all right.
The Secretary of the Treasury:

Please give us four

copies of that.
lit. Simmons:

I will with pleasure.



The Secretary of Agriculture: Rave you interpreted this
any where?
Mr, Simmons: Yes, sir, the back covers the whole thing*
The Secretary of the Treasury:

Mr. Simmons:

I see.

It is all printed there. I would like to

make my talk just as briefly as possible becaase I know what
I you want is facts, and therefore I am going to probably treei

I pass upon what might be called good form and show you some-



thing that has occurred with our own business in the last fort
eight hours, and recite to you the number of orders received

by our St. Louis house on Monday of thle week, and then
; tabulate it by states, to show the diversity of territory
j; of St. Louis—not only can cover but does cover regularly.

i From Missouri 447 orders; from Illinois 415; Texas 234;
Arkansas 178; Mississippi 164; Iowa 117; Indiana 98; Alabama
81; Kentucky 79, Oklahoma 74—0klahoma being divided between
this house and the Wichita house makes it a less number than
from here; Tennessee 66; Kansas 56; Louisiana 56; Colorado
| 33; New Mexico 32; Wisconsin 29; Arizona 28; California 20;
Nebraska 11; Idaho 11; and a lot of scattering from twelve
other states, making a total of about three thousand orders



received at that time, of which twenty-eight were full carloads.
The Secretary of Agriculture;
Mr* Simmons:

That was in one day?

One day of this week*

There was no padding•

There was not an item taken from Saturdays orders, wasn't
one single one from yesterday*8 orders; and I submit that
there is positive proof of the pplendid distributive point
that St. Louis has, because it would be impossible to receive
that many orders of which one-half--about one half—were from
our salesmen and about one half open mall orders from the
merchants—all wholesale orders; we do no retailing*
The Secretary of the Treasury:

Is it not a fact that the

Simmons Hardware Company has a larger area of distribution
than any other single concern In St. Louis?
Mr* Simmons:

I am not quite sure that is a fact*

I think

perhaps Mr. Shapleigh'e house has not quite as large as we
have, but they do a large business, and are very enterprising,
The Secretary of the Treasury:

I asked the question mere-

ly to get some indication of the extent to which general
business may have an equal distribution with the hardware
Mr* Simmons;

Well, my observation, sir, would lead me to



believe that the dry goods business$ the boots and shoes, and
other industries have about the same territory.

There are

five or six dry goods houses but practically only two large
hardware houses—two large ones and two others not so large.
The Secretary of the Agriculture:

Do you know whether any

of the other distributing houses have maps of that kind?
Mr. SiKffions:

I do not, air, Mr. Secretary. We have used

these In our business and sent them to our salesmen for the
last ten yearsf and we have simply adapted them to this purpose here*
The Secretary of the Treasury:

Do you care to take these

back and furnish the other copies?
Mr. Simmons:

I will, and I will furnish them to you to-

morrow, send you four copies of each*
The Secretary of the Treasury:
you very much, Mr, Blmmons,

Yes, if you will,

I thank



The Secretary of Agriculture:
Mr, West:

Your occupation?

Chairman of the Board of the St. Louis Union

Trust Company.
The Secretary of the Treasury:

Mr. West, we would be glad

I to have you views on this problem*
Mr. West:

I havenft any data, but I have gone over the

data that has been gotten up by the committee of the Clearing
I House very carefully with Mr, Watts, and it seems to me that

i the map that. I saw and went over is—the lines are admirably
| drawn on account of the fact that they embrace a large
territory that is a producing territory, cotton and so forth,
largely cotton; and he has endeavored to draw his lines so as
j, to pick a section of country that would not fall upon us at

i the same season of the year, the southern and western sections
jj It seems to me from the figures that have been given as to
: the area surrounding St. Louis that we occupy a central
position of the greatest commercial part of the United States«
The fact is it would seem to me that if there were only one
reserve bank that St. Louis would be the natural center, on
account of its embracing a rich territory, and you have a
producing territory, and this territory has been selected



in tbsway that I think would work out very well.
Of course, you run up against some part of the territory
here that might necessarily be claimed by others. For instance you take your number seven, which appears to be a
little lean territory. But the natural flow of the business as laid out by this map would be on the whole largely
towards St. Louis*

Of course, I don't mean to say that

there is not territory included in this that would go just
as naturally to Chicago*
| The Secretary of the Treasury:

To what extent right

there, Mr. West—to what extent of territory would you say
that Chicago might just as well have as St. Louis?

What is

jthe debatable ground in that respect?
I Ur* West: Well, you take for instance—I judge from the

questions you asked that we run—in running to Springfield,
|Illinois. Take Springfield.

I have no doubt their more


[natural inclination might be to Chicago, and yet they could
be served equally as well in St. Louis.
The Secretary of the Treasury:

What would do the least

violence, though to the customary course of business?
Er. West:

Well, I donU know as it would cut any—it

would in a way, but I don't see that It would cut any part*



loular figure.
The Secretary of the Treasury:

Now tfake northern Missouri

as well, St. Joe, for instance, and that district up there.
What would you say about that?
Mr* West:

I think that can be served just as well here

as anywhere, and naturally.
ing and changing.

There may have to be some shift-

There is one thing we have all got to

think about and that is—I am quite familiar with the cotton
section, having been in the cotton business. That business
has been changing for several years$ and the old fashioned
"way of doing cotton business has passed away. The ootton
is sold at smaller places, sold to buyers direct and shippedeither exported or shipped to the mills in New England; and
those bills of lading have largely been oaehed by their local
banks and forwarded to New York and there the exchange has
been sold, generally speaking.

If exported they sell to

New Tork houses, and I think that would still continue to
a certain extent, except if they had a local reserve bank
; that was large enough to take care of this business they
[ would more readily send it there, because they could get
• quicker returns, and the country banks could realise just that
much quicker, and certain season* of the year twenty*four hours



trould make a great deal of difference, because they are loaded
to the guards during that period.
The Secretary of the Treasury: What is the extreme limit!
I mean in the matter of time what is the extreme mall limit
here in your district? How take southern Texas, how long
does it take to get In there, Mr* West?
Mr. West: I don't think there is any point here that would
require much over a nights run,say twelve hours run, not
much over that.
The Secretary of the Treasury:

You couldnft get down

there is a nightfs r u n —
Mr. West: You couldn't in quite a night1* run, that
would be about thirty-six hours.
The Secretary of the Treasury: El Paso I suppose would
take about two days, wouldn't It?
Mr. West: Well, it would not be—that is really out of
the cotton section as that goes. This gives it
here (indicating map)—It runs from twenty-five to twentyseven hours; that takes in the extreme Texas border. The
average, I should say, would be about, from these figures,
some twelve hours, maybe a little more. But the point is
this with us in laying off this territory: At a certain
season of the year we are going to have a tremendous burden



to carry and take care of the products In this particular

I think there is no question but we can handle

It if you give us a certain territory that would be drawing
from it at the same period, and that is why I think this'
line Is drawn taking some of the lean with the fat. That
is my idea*
The Secretary of the Treasury:

Mr* West, would it be

your Idea under this act, and assuming these districts to
be organised as there—is your idea that if the regional reserve bank here needed funds and had in turn to rediscount
some paper that It would seek the assistance of some other
reserve bank with more money or make application to the
Federal Reserve Board?
I Mr* West:

Well, I think probably it would go tta the

reserve board up to a certain point.

I think that would

I thin* New York, for instance, which has to reach


tout over this producing territory In the use of capital
would, I think, Invite our business if we were overcome
and be glad to get It, and I think the natural thing would
be to go there with it largely • I don't think that we can
; get away from the fact that Hew York will still be a very



large money center.
: The Secretary of the Treaeury:

The tendency of the Act

in your judgment would be, therefore, to cause a rediscounting between the regional banks without resorting to the
compulsory power which is lodged In the Federal Reserve

That is, in other words, you feel that if New

York had the available funds and you had the paper that
the transaction would be between the two banks?


You wouldn't

like to have to resort to the compulsory power of the board
to compel one of these banks to rediscount for another.
Mr. Watts:

I don't think It would be necessary*

The Secretary of the Treasury:

It is a good thing to

Tiave the power rest somewhere.
I Mr. West: I don't think it is objectionable at all.

I didn't quite agree with it at first, tout I think it is
not unwise to have it.

The Secretary of the Agriculture:

Any other point, Mr.

[West, you want to bring out?
Mr. West:

No, I think not. The Committee has covered

the field very thoroughly.
I The Secretary of the Treasury:
•lews of that Committee?

You entirely endorse the



Mr. West:

Yes, so far as I have gone along *ith them

I think their grounds are well taken.
The Secretary of the Treasury:


I thank you*

Mr. Brookings:

I don't inow in what capacity I am called


here, whether as a school teacher or woodenw^re manufacturer
or banker?


The Secretary of the Treasury:

We would like to have

you set both as a school master and as a citizen.
The Secretary of Agriculture:

You know our problems and

we should be very happjry to have your views*
Mr* Brookings:

Ur. Secretary*

I really don't know why

they called me, except possibly thinking I might have retain*
ed some sort of a sentiment about this thing, as I have
been out of active commercial business for some years, and
in the University, you know, we recognise no regional limitations*

In a business way my concern, the concern I have

always been associated with, the Cupples concern, equally
has no regional limit*

It does business in every state in

the United States and most foreign countries*

But St. Louis

is the headquarters of the concern, and possibly our busl



ness might be some Indication of the way in which merchandise
might flow—might flow without much regard to its banking
influence • We ship goods very largely all over the United
States from different points, but the financial side of
our affairs center here entirely.

I have a certain sort of

sentiment about the St. Louis territory.

I have seen this

And in a general way if anyone if anyone had asked

regarding the banking business of St. Louis, the merchandise
relations of St. Louis to contiguous territory, if any person was asked in that territory ae to which was the metropolis'
the metropolis in my mind being the largest nearby city in
sympathy with the interest of that country—I should say unquestionably the reply would be St. Louis*
I am sure if you started with the northern line of Missouri $
and then spread out fan shaped as this territory practically
I does, which might touch Springfield, east of that including
i Southern Illinois, probably the middle and ami them Indiana 9
•astern Kentucky, Tennessee, Mississippi, and on the western
side it would come into Kansas, spread out again taking in
Oklahoma and Texas. Now I do feel that there is no city
of the size of St. Louis, no large city, that would be under-



stood as dividing that question as to the metropolis of that
! section, especially in the way of a city most In sympathy
with that section of the oountry.

All this Mississippi Valley

; country, of course, you know It has a tradition for many
many years of boats coming up the Mississippi River, while
the channel of that has been changed by reason of the railroad)
dividing it from the river still there is all through west
Tennessee, andWestern Kentucky, a dominating St. Louis interee

I along certain lines.
thing else to say.

I don't know that there is much of any-

With the University one of the arguments

we make all through this section of the country to induce
|students to come here, we say come to St. Louis, because
|;here Is where you will meet and make acquaintances of people
lithat will probably be of the most use to you in your future
!business or professional careers, St. Louis being unquestionably the metropolis of this vast section of the country*
do not know of anything more in detail«




The Secretary of Agriculture:

Mr. Brooking*, in

looking at the country as a whole, throughout this matter
we have had several districts suggested to us, such as
Section Three without the territory north of the Potomac•
If you will just take this map. We have had one suggested
to us from the Potomac through Georgia and Florida*


we have one suggested here of these mountain states* Would
I you think it to the best interest of a section like this
to be confined wholly to such territory as Indicated there,
or would you think it best for that section to be connected
with territory like Philadelphia or Pennsylvania?
Mr. Brookings:

I do not think I am quite competent to

rasa on a thing of this kind.

I should think you would have

the data and information that would give you a relative
j value of the flow of trade as compared with the balanced
! territory*

I think on the principle of this being altogether a

jj common country through there that it Bhould have some other

resources, manufacturing and agricultural products, *ftd
balance It*

In other words, a lending corn-unity, and that

it might properly take in Pittsburgh or some of that industrial section of the country•



As to this central country over here, I feel very much
as the others who have expressed their opinion, that It Is
sentimental largely; that a branch bank at Denver would
practically cover all the needs of the country, and it,
after allf you determine on eight banks, and after you get
all your data and information, there is bound to be some
action to take, if eight banks is the initialfeature.
The Secretary of the Treasury:

What is your idea, Mr*

Brookings, about that, that the minimum number would be
Mr, Brooklngs:

My idea is the minimum number, I am

perfectly clear~I feel that you could not have more than
eight banks of that mobility and of that importance
I that it seems to me the success of the measure requires.
The Secretary of Agriculture:

Mr. Brookings, there

j are intimations that we are going to be asked to establish
a district here in the southwest•

Mr, Brookings:

I suppose there is no end to the districts

| that you may be requested to establish, and I myself have


no disposition or desire to anyway belittle any particular
section, but the necessity.

The Secretary of Agriculture:

It is wholly with that*



idea I was referring to the point mentioned at the outset,
of having a district made up exclusively of borrowing

Would you think such a thing would be best for

that district?
Mr. Brooking*:

Ho; I should think it would be very bad.

I should think the district as nearly as possible, without
too much forcing of unnatural channels, that would be pretty
well balanced, would be the sine qua non, that Is, a very
Important feature. And I wish to endorse fully the enthusiastic utterances of my friend

Mr. Simmons, but I

honestly a n d truly believe there is n o city i n the United
States that embodies just that equilibrium that St• Louis
: does•

We a r e the very center o f a very large manufacturing,

i grain, mineral a n d live stock country.

There is certainly

no other city o f o u r size, o u r importance, our diversity
of interest that is anything like us close to the cotton

| trade south of us, if that is the main thing*



! speaking, I will say that I do not know of any other city
in the country that has as much to offer for a regional
bank as St. Louis.
The Secretary of the Treasury:

Thank you, Mr. Brookings.



The Secretary of Agriculture:

Governor/ will you give

your name, please?
Mr. Francis:

David R. Francis, Rouse of Francis Bro* *

The Secretary of Agriculture:

Governor, do you want

to talk to us?
Mr. Francis:

Yes, sir; I have some conception of the

I want to make a statement in the beginning

that you may not concede, but that I am prompted to make,
not only from what I have seen, but from what I have read.
i I ?ant to go on record as impressed with the energy and
fidelity with which this organization committee is perform-



ing a most difficult task.


The Chairman and Messrs. Secretary, you said in the begin-

! ning of this hearing that you would concede oratory and you
| did not want any sentiment.

There are some facts, however,

that are so impressive that they inspire sentiment and
approach to oratory*
I wish to have exhibited to you a map which I have had
prepared there - and if you gentlemen will raise it*
That is a map which has been prepared irith the census of

There have been circles drawn around the City of



St. Louie, one with a radius of 100 miles, one with a
radius of 300 miles, and one with a radius of 500 miles.
Thi 500 mile zone takes in 40,000,000 of the population
of this country•
The center of population of this country from the census
of 1910, or when it was taken, was at Bl&omlngton, Indiana, and
has been constantly moving west.
The zone of the corn production of this country is in


Dee Koine, Iowa*

i| The center of the wheat production is in west central
South Dakota, of oats, in southeastern Iowa, of cotton,in
Northern Alabama and live stock, the center of production
of horses is in central Missouri, of miles, in western
I Kentucky, of cattle, in northeastern Kansas, of hogs, in
southwestern Iowa, and of sheep in southwestern Wyoming.
I do not want to encumber your records with the map, but
if you desire it you may have it and I will file it as an
The Secretary of the Treasury:


(The map so indent If led and referred to was marked D. R.

\ Francis Exhibit No. 1 of January 31, 1914.)


Mr. Francis:


Now, I am familiar with the map which has

been submitted to you by the Committee, and while the territory embraced in the St. Louis division is large, it Is
homogeneous, it is territory which is commercially and
socially tributary to St. Louis*
You have asked a number of questions, concerning the
northeast corner of that division, Springfield - not the
northeast corner, but towards the northeast corner*


relations of Springfield, Illinois, with St. Louis are
unusually close, and becoming closer every day. There is
an electric line running from Springfield to within a stone's
[throw of where we sit, or certainly,to within a golf stroke
| of where you sit.
I The Secretary of Agriculture:

Tour stroke•



Mr* Francis:

That road has a bridge of its own; it brings


I in I do not know how many passengers every day, and our

! department stores operate free eleotrlc buses between that
s station and their respective establishments*

So that Spring-

I field, in my judgment, is much closer to St. Louis than it

I is to Chioago, and it is becoming closer every day.
\ The Secretary of the Treasury: That is the capitol of the

state, is it not?


Mr. Franoia:


It is the capltol of the state; it is ninety-

three milee from 3t« Louis, and, as I say, It can be reached
in a little over three hours from a station that is within
the Secretary of Agriculture's golf stroke from where
we sit no**
The Sedretary of Agriculture:

Might not the sentiment

which you referred to dictate that that be connected with
Mr* Francis:

I think not.

The social relations between

Springfield and St* Louie, in my judgment, are closer than
they are between Springfield and Chicago.

Southern Illinois

is eettled very largely by Kentuckians and Virginians, and
people from the south generally.
We include in our community about ten or twelve miles of
river front which contains a population today of approximately 100,000, and I think will double that in ten years. That
is virtually a part of St. Louie.
Now in taking the whole of Texas we may deprive Division
No. 7 of some banking capital which it will require, at
the same time I think there will be no trouble whatever in
securing all the capital desired for every Federal reserve
bank, four million being the minimum, I think that can be
done without the Government being called upon to subscribe



to Any of the atook.

I would be very glad, speaking for

myself personally, and I have no doubt I would echo the
sentiments of a great many of my friends, to subscribe to
the full limit giving to any individual in any one of those
banks, which Is f25,000•
The Secretary of the Treasury:

1 do not think it is a

question. Governor, of raising the capital that is required,
because that is simple, as you say*

It is a question of how the

oountry oan be apportioned in the best manner, that will
I beet serve the business of the oountry, and if we could
raise the capital as you suggest that would not justify us
in creating some district which would not of itself be
homogeneous and where the bank would not be successful in
the highest degree*

Mr* Francis:

This district is much more homogeneous


than No* 7 would be if you cut off from No* 5 western
! Oklahoma and western Texas and put in in No. 7.

The Secretary of Agriculture: What would fou think.

Governor, about the outtlng off of western Missouri, and
Kansas and extending No. 7 eastward?
Mr, Francis: Well, I should dislike to sea Missouri
divided in anyway, but that reminds me of something I was



going to speak of, and that is that these divisions, In ay
judgment, should be based, not solely upon the business of
the country as it is today, but upon the business of the
country as it is likely to develop•

No one can foretell


What will be the effect of the completion and operation

of the Panama Canal, not only on the business of the entire
[country, but on the commerce of the Miss is* ipji Valley
Already the Argentine is shipping corn to Gulf ports
as well as Atlantic ports* Over a million bushels of
Argentine corn have been received within the past four or
five or six weeks. The country that we have embraced in
this division Ho* 5 has more territory to be developed in
it than any district lying east of us or north of us, and
we anticipate with hope, if we do not hail with delight,
the coming of the time when the development of this country
! will not be dependent upon one section of this country
I and one center, where all the money has been assembled.
I We are tired of being told that a section of the country



cannot have a railroad because, a construction of a road-bed
there will interfere with the operation of some other system*
and that other system will enter that territory at its own



good time and pleasure. Mr. Wade impressed me very muoh
I when he said that ke could establish here a foreign tank,
|a bank which would enable us to sell our exchange in dollars

; and cents and pay for our imports in dollars and cents,
I instead of pounds, marks and francs•
i I agree with Mr* Simmons also, or Mr. West, I believe it
was who made this statement, that if there shouldbe but
one regional bank outside of Hew York that he thinks that
St. Louis should have it.
Now I trust you will not consider us presuming when we
say that we think St. Louis, outside of New York, is about
j the beet known city in this country throughout Europe and
j, throughout China and Japan. You cannot go into a town In
I Europe with twenty thousand people or more that you do not
I see diplomas hanging there from the St. Louis Exposition
held here in 1904. They know St. Louis better than they
know Chicago.

St. Louis is better known In China and

Japan than Chicago.

I am not disparaging Chicago*

I am

a little surprised that Chicago did not ask that St. Louis
be Included in Its division as well as East St. Louis.
Now, this, as I said, is our natural territory.

We do

business, as Mr. Simmons and Mr. Stapleigh and others have



told you, not only with this entire territory, but with
almost every section of the Union*

We are the largest

city southwest of the Mississippi Diver* and the Mississippi
Fiver is a factor in the development of this country,
which not even this Committee can affordto ignore*


think it is going to be in the future more than it has In
the recent past, an artery of commerce, and along its banks
are mi H i ins of acres of rich soil that are about to be

I am saying nothing about the production of

those aores, but I mean to say that we want here a bank
that is strong enough to furnish the capital to reclaim
those lands.


Some of us have been very active in this favor of measure


from the time it was first mentioned.

We believe In It

We think that the country will be benefited

greatly bi it*

I am not going to dwell upon that fact,

; and I have nothing more to say to you, but would be very
glad to answer any questions which you may propound. '
Our case has been so thoroughly and so tersely stated
ij by the gentlemen whoHiave preceded ne that it would be
|j super-arrogatl6n for ne to give you any figures.

I have

^a number of then here, but they have been covered by the



speakers that have been presented to you.
The Secretary of the Treasury:

You concur, Governor,

very thoroughly in the views that the gentlemen who have
preceded you have expressed on this teubject?
Mr. Francis:

I do; very thoroughly.

The Secretary of the Treasury;

We are very much obliged

to you. Governor.
We will take an adjournment until 2:30.
Whereupon, at 13:35 o'clock P. M., a recess was taken
until 3:30 o'clock P. H#



The Secretary of the Treasury:

Mr. Van Riper.

The Secretary of the Treasury:
our problem.

Mr. Van Riper, you know

Have you anything to add to what these gentle-

men have already told us about this question?
Mr. Van Riper:

Well, I have not any facts or figures.

I might say that I am president of the American Trust Company and Chairman of the Committee of the Clearing Rouse
who met with clearing houses throughout the southwest,
and the bankers in the southwest.

I do not care to talk

to the Committee about St. Louis or the commercial end of
I am intensly interested in the bill itself, believing it
I to be the greatest piece of constructive legislation since
the Civil War.

I believe this bill was pasaed and that

in the minds of the framera of it and of the administration
it meant for regional banks or reserve banks to be so located
as to not disturb the^iiannele of trade, in a diversified
district so as to be self supporting, and that no attention
particularly was to be paid to state lines, and that the
banks should be as nearly equal as possible*



I noted and read with a great deal of interest the testimony in New York and especially that part of the testimony
relative to the necessity of a>big bank in Hew York City
on account of the way it would look to the foreigner, the
people in the old country who have to do business with it, *
and it occurred to me that in that part of their testimony
there was not very much to it, from the fact that this
Federal Peserve Board, with all its powers, controlling all
of these banks* will naturally, and without any suggestion
from anyone, publish a statement from time to time which
is a consolidated^ statement of the Federal Reserve Banks,
| showing the assets and liabilities, and which as a whole

I will probably impress Europe more than any banking institutioi
whose statement is published.
I do not think there is anything in this cry about the
necessity of a large bank in Few Tork.
I think there is a great deal in the thought that these
banks ought to be practically as near of equal oapital
stock as possible\ and that the regions ought to be,
the reserve districts ought to be laid out with that in
•lew. Therefore, I disagree somewhat with the witnesses
here as to the location of these districts.



I believe that a district in He* York should be a very
confined district which would be a large bank, even if it
was Manhattan

alone; I believe in the Boston district; I

believe there ought to be one located at Philadelphia,
Washington or Baltimore*

I believe in Washington for the


simple reason that the Reserve Board, in ray judgment, ought
to be in constant and daily contact with an aotive bank*
A branch bank means as much to Baltimore Philadelphia,
and I think, in fact, it means much more to a great many
communities, than a reserve bank itself.

I believe another

[bank ought to be established south of Washington that would •
take in all of that great southern territory.

That would

be a lean bank in a way, but Boston says that within themselves they have more coney than they need, New York the
eame thing, Philadelphia the same. Therefore, the lean
|district, which must be one, would naturally be tied onto
jthe very strong district#
I believe the next district ought to be located so aa to
take in Western Pennsylvania, New York,Ohio, eastern Kentucky and Tennessee, and located either at Pittsburgh,
!Cincinnati or Cleveland, and that would make a bank of
practically ten per cent of the entire stock of the regional

That would make five, and leave the whole west with



three banks, or, in otfter words, there would he sixty-five
per cent of your capital stock used up practically whenever
you come as far west as the west line of Ohio and eastern
Kentucky and Tennessee, and a line from there south, leaving
only three places on the map where I think reserve banks
should be established, one at Chicago, one at St. Louie
and one at San Francisco•
The Secretary of Agriculture:

Mr. Van Riper, would

you make a map for us giving your ideas definitely, outlining those districts?
Mr. Van Piper:

I would be glad to.

I issued a map and

some figures, both of which I misplaced, both the maps and
the figures.
This territory that is outlted for St. Louie I think,
is In the natural trend of trade*

I have been all through


i the Southwest very recently and talked with all the tankers
| through Oklahoma and Texas, that is, in the principal cities,

!; It ie the natural trend of trade and has been since the be'

The territory from Kansas goes direotly through

Kansas City and It flftws to St. Louis, this having been a
oentral reserve city all these years. When you get as
far west a» Colorado you get to Denver and their tendency



le toward the east and toward Chicago and St. Louis* and
it seems to me with the territory divided up that these
three banks having thirty-five per cent, which Is no more
capital than they ought to have considering what they must
care for - I do believe that the capital stock and the
three banks in this western territory, which would mean
this to the entire west - there are thousands of banks
throughout the west as well as In Illinois, Indiana and
Ohio who keep reserve accounts - I do not mean reserve
I accounts, but I mean who keep a little account in New York,
Chicago and some in St. Louis, but mostly in Hew York, and
for one express purpose, and that is to furnish exchange
to their customers* They have no business in Hew York,
they never re-discount In Hew York, but they keep their
money there only for that purpose*

I believe that there

are thousands of these accounts that are In Hew York at
this time going to be moved back nearer home for the
reason that a draft drawn on a reserve bank is just the
same as a draft on Hew York, Chicago or St. Louis in the
territory where it is to be sent*
The excuse for drawing out of Hew York Is greater than
any other central reserve city,; next Chicago and next St*
Louis, and I believe It will center in the great west where



only thirty-five per cent of the entire capital stock iswill center moneys to such an extent that each bank will
stand on Its own bottom•

I do not believe with three banks

furnishing the capital for the great west but what each one
will be capable of taking care of Itself and taking care of
its territory absolutely.
My plea for the strong bank in St. Louis Is this - in
St« Louis rather than in any other city - for the reason that
!! the bankers are going to do business not only with the
reserve bank, but they are going to do business with the
banking friends they have made In all these past years*

St. Louis alone has three institutions of practically over
ten million of capital stock and numerous other institu-

} tions of large capital, while a bank in this locality would
: have, based on the national bank figures, something like
thirteen millions of capital, or, In other words, would
have its proportion of the entire capital that is to be
distributed if only Its banks, which some of us are in ~
; hope will be established - only eight - it would only have
I its proportion, and it would serve a territory which is
[ developing very fast and which is going to need large sums
f of money which St. Louis and the large surrounding territory



baa furnished and oan still furnish for not only their
development, but to take oare of their commerce*
I had many talks with men located in cities where they
desire a reserve banV«

They had no idea apparently of the

branch bank or is function. They had

not looked enough

into the question to realise that the functions of the branch
bank are practically the same as the reserve bank, as I
interpret it, until it was explained to them, and they,
of course, were for a reserve bank in their own locality*
But many bankers throughout the southwest, who had definite*
ly made up their minds for a reserve district, said to me
"Since youhave talked with us and talked about this
diversified territory and especially about the functions
of the branch bank, we are satisfied we would be better
served by a branch bank than a reserve bank**
The thought I had in mind was that if a bank was located
In St. Louis with probably nine directord we would possibly
have one director, not to exceed two, and the balance would
be scattered all over the southwest, while the branch bank
would have its four local directors and the three appointed
by the Federal Reserve Board, which would naturally mean
that the man In the town where the branch bank was woutt



coma in direct contact with people he knew and in securing
any aid he might desire he would be among his friends who
know the business and would probably secure accommodations
much quicker than we here In St, Louis who might have only ~
one director out of nine, and, therefore, the other eight
might not be so familiar with the things that we had to do.
I think that Is the advantage of the branch bank*
The reason why this territory, and I think the people In
it, would like to come to 8t. Louis largely is that the
large banking capital here, the large trust companies, who
have indicated that they are going into this system, as well
as the national banks, know the southwest and the southwest
would come here for banking facilities and for moneys for
the developments that are entirely outside of what the
reserve bank will give them*

In that particular I differ

from some of our committee as to the territory and as to
the divisions.

I believe that the division ought to be made

In the trend of trade and the capital stock as nearly equal
as possible*

In other words, in Denver, for instance, I do

not know - in some of these maps that I have seen - you
could not get four million of stock in Denver, and you
would make people do business In Denver who never bad a





cheok on Denver in the whole wide world*

This whole country


; trends toward the east.

Denver trends toward the east.. I

do not thinV. it would make any difference to Denver whether
they went into St. Louis or Chicago, if they had a branch

j: bank the ret ae far as facilities are concerned^ and I think
the same of the west and the northwest.

The Secretary of the Treasury:

I assume Denver is more

|j accessible to Chicago than to St. Louis, Is it not?

I mean

the train service is better?
Mr. Tan Riper:

No; I do not think so*

I have been west

twice this summer, and the service is all through Kansas
City practically, .except the one through Omaha.
think It makes an hour difference, hardly.

I do not

In fact I think

they would reach St. Louis just a little quicker than
The Secretary of the Treasury:

The Bock Island does not

•i go through Kansas City, nor the Burlington- I mean from
Chicago to Denver. Theie are certainly more direct lines than
of communication between Chicago and Denver, more of them
passing through Kansas City and St. Louis, is not that a
Mr. Van Riper:

I do not know as I could say that, and I



think you are probably wrong, because the Missouri Pacific
runs from St. Louie to Denver, the Rock Island the same

I have been twice over the lint.

The Wabash and

Union Facific have a through train every day*
ton has a through train.

The Burling-

I do not think there is any

difference in that, and I do not think it makes any difference
at all.

The Secretary of the Treasury:

I was acting more for In-

is formation*
Mr* Van Riper:

I think they are practically equal on

that, excert they would reach St. Louie ahead of Chja&go
as to hours, I think.
The Secretary of Agriculture:

I understand you are

suggesting the inclusion of all this western and southwestern country to the Rockies?
Mr. Van Riper:

Yes, sir.

I do not want to disturb what

St. Louie has asked for, but I do not believe there should
be more than three banks, because there it only thirty-five
per cent of the entire capital stock left* practically
thirty-five per cent; and I think those banks ought to be
as nearly equal as possible, fto that the reserve Board does
not have one week one over here and another good strong one



ov«r hare; but that they have practically eight as equally
balanced aa it is possible, as to territory, without disturbing too much the trend of trade *
The Secretary of the Treasury:

Your idea then would be

to have, then, three banks west of the Mississippi Fiver
counting Chicago, for instanoe?
Ur. Van Riper:

Counting Chicago.

The Secretary of the Treasury:

One Chicago, one St.

Louis and one San Francisco?
Mr* Van Riper.

Yes, sir.

The Secretary o* the Treasury:

Tven you would divide this

territory to the Rocfcy Mountains between Chicago and St.
Mr. Ufan Riper:

Just in accordance with the trend of

The Secretary of the Treasury:

What would you do with «

the northwest?
Mr, Van Riper:

The same in the northwest here. There is

a dividing line somewhere here*
The Secretary of; the Treasury: Is not the trend in the
northwest more east and west than north and south?
Mr* Van Riper:

Yesj I think it is more east and west.



The Secretary of the Treasurer

You reduce the power

of the Pacific coast bank very materially under those
Mr. Van Riper:

I hardly think so, in this:

I believe

Oregon and Waehington, being flore directly north, while it
is true the trend of trade is this way they would have
their branch banks.

In fact, I do not know that they would

have to send anything to the parent bank at all.
The Secretary of the Treasury;

Touwould attach them to

San Francisco?
Mr. Van Hiper:

I certainly want to equalize the capital*

It is hard, of course, to equalise this capital without
disturbing somewhat, but I say with the least disturbance
poaftible it ought to be done, I think.
The Secretary of Agriculture:

If you will be good

enough to give us your map drawn according to your ideas
we will appreciate it. You can send it to the Committee
at Washington if you do not make it up before we leave.
Mr. Van Riper:

Yes, sir.

The Secretary of the Treasury;

I think if you can hand

it to the Committee before we leave tomorrow it would be
better, and male four of them, if you please.



Mr* Van Riper:

I will do that. Thank you*


Mr. Chairman, I have to present here eight-four letters
from banks in Arkansas and In Oklahoma, and there are more
to follow afterwards, but I would like to have these made
The Secretary of the Treasury: They may be made exhibits
to Mr. Van Riper'a testimony*
(The letters so identified and referred to were marked
Van Riper Exhibit Ko* 1, January 21, 1914.)
Tfce Secretary of the Treasury;

Mr. Whitaker*

The Secretary of the Treasury: Mr. Whitaker, will you
state your name and occupation to the reporter*
Mr. WhUaker: Edwards Whitaker, president of Bremen
Bentlemen, I am somewhat familiar with the problem before
you, and being a member of the Clearing House committee
I think I was put on it more to explain about the State

Mine is the largest ip the State, and from the

experience I have had I think the Stat* banks are very

much inclined to cone into the ayetern. In this State,


i| however, they have run up against opinions eaylng th*



local law would prohibit it. Since one opinion was publisted through the press the Attorney fleneral, the Bank
Coaaniasionex and the Governor have signified their willingness to permit the banks to go ino, rather indicating
they would secure the necessary legislation afterwards.
That being the case, I am satisfied that the great majority of banks that are eligible, and some that are not
eligible will come in. I have one instance in mind where
they are increasing their capital stock ao as to be able
to enter the ayatem.
I have been over the map with the Committee, and while it
may look that we are pretty grasping, still I think you
should bear In mind that the City of St. Louis ia the last
forty or fifty years haw been a reserve city; that all the
\ channels of commerce and everything have been broken loadt-

I ing to the city, and everything in the southwest, when it

was a wilderness, looked to St. Louis, even aa far north
as the Dakotas, when the fur trade was here, and lately
the Government has seen fit to, send its furs here and I
understand this late sale wjfe most satisfactory, more sat, isfactory than that In London, and on that account I think
! St. Louia has a very strong claim for a regional bank.



The other people in the different sections, I think, will
find that it will work to their advantage, and the expression
I have had through ay bank from southern Illinois^ Kentucky,
Tennessee, Oklahoma, they all prefer St. Louis to any other
i place.
Koi rlth th&t statement, as you have had so many statistics and will hear from the merchants, who can give you
better information than the bankers, I Fill not consume any

I more of your time.
The Secretary of the Treasury: Mr, Johnson^

The Secretary of the Treasury: Mr. Johnson, state your .

i naase and occupation, please.

Mr. Johnson:

Jackson Johnson, President of the Inter-

i national Shoe Company•

The Secretary of the Agriculture: Mr. Johnson, you have

I heard the statement of this problem and the questions we
have been ask ing • We should like to have you give us any
additional information that you have that would throw light
I on this.

Mr. Johnnon:

It has been covered very fully by the

| bankers h#r« # and also by the merchants;

I have very

| little to add to it, gentlemen• What I have in mind

ly la that in dividing up thia country and making
eight regional banks, assuming that would be the number,

that there should be taken into consideration about all


things the flow of trade, the natural trend of trade, which
| is ©ore nearly according to the natural condition^ than is

; the flow of capital that has been brought about largely by
I banking conditions.

St. Louie Is pre-eminent in the South-

I west, especially west of the River, and I take it that it
ia largely a matter of a question what the St. Louis territory will be, not that St. Louis will not be recognized as
one of the logical centers • And in laying out this terrii tory I would have in mind the one faot> that you would like

! to balance the borrowers with the lenders as nearly as
possible, and to that end we should have to take not only
* the manufacturing sections but the grain section along.with
the cotton section*
In the last few years west of the Hlver has produced from
forty-five to fifty per cent of the cotton crop*

If St,

Louis covers Texas, Louisiana!"Arkansas and Oklahoma they
will then have in their territory half of,all the cotton
crops looking to this center to be financed*

Ho* to balance

that I think that we should take along *ith Missouri, say,


Kansas and a portion of Nebraska and southern Illinois.
Secretary of Agriculture: Have you any facts, Mr*
Johnson, which you could give us concerning the area of
distribution and the volume of distribution over particular
parts of that area of your business?
Mr, Johnson: Wei}, our business extends all over America,
and we do not quite a little foreign business, but we are
stronger in the Southwest than any other section


I think all of St, Louis ia stronger in the Southwest.

The Secretary of the Treasury:

About what is the field

'. of your influence, so to speak?

What is your distribution


Mr* Johnaon:

We cover all of America except New England.

The Secretary of the Trea&ury:
Mr. Johnson:

Where is it mostly

Where ia the largest business?
I should say the southwest. The flow of

i the trade in this country is from the southwest to the north!

All the lines or railroads ~ if you follow the lines

[ of the railroads, you follow the line of conferee.
The Secretary of Agriculture:
Mr. Johnson:

How about Mississippi,

t?el3, Mississippi is a strong commercial

territory for 8t • louis; very strong*
Tho Secretary of Agriculturer

Do you have large shipments

for there?
Ux. Johnaon:

Yea, sir, our business in Mississippi, Ala-

b&sa* Georgia and tbeCarolinas ia probably all about the
The Secretary of Agriculture:
Mr. Johnson:

How about Colorado?

Well, we cover Colorado end are strong in



The Seoratary of Agriculture: I wonder if you could
gire us a map showing the percentages of the United.
Mr. Johnson:

I could give you a nap showing the amount

of business our Company does in each State*
The Secretary of Treasury: We should like to have that,
particularly in reference to the Southwest•
Mr. Johnson: Yea, air.
The Secretary of the Treasury: Do you have a large
business with Louisiana?
Vr. Johnson: Yes, sir*
The Secretary of the Treasury: Arksnaafc, I presume, is
very ouch your territory?


Mr. Johnson: Tea; Arkansas/ I suppose, outside of St.
Louis is the strongest trade alliance.
The Secretary of the Treasury: How aboutTexas and
Mr* Johnson: Texas is almost equally strong. Of course,
Southern Texas is out off In a measure on account of cheap
water transportation from the East, that is, the section
around Houston, Oalveston and Beaumont.
The Secretary of the Treasury:

If you will be good

enough to give us these statistics, four copies, Mr. Johnson



Mr. Johnson: Yes; I would be very glad to.
There is one other thing I want to mention in reference
to the point raised this morning as to whether Springfield
should go to Chicago or to St. Louis. Our company probably
employs one tenth of all the labor in Springfield, so,
naturally I shouldfeel that the trend of trade would be
this way rather than towards Chicago. In fact, I think It
should be.
Mr. Wade: Springfield, Illinois?
Vr. Johnson: Springfield, Illinois.
The Secretary of the Treasury: How do you mean you employ a tenth of the labor, do you have a factory there?
Mr. Johnson: Yes, sir.
The Secretary of the Treasury: Thank you, Mr. Johnson.
Mr* Barroll:
The Secretary of the Treasury: Mr. Barroll, please give
your name and occupation?
Joseph R. Barroll, House Manager of Butler Brothers.
The Secretary of the Treasury: Can you add anything new,
Mr* Barroll, to what has been presented already to the


Mr. Barroll:


Well, I have a map here that may be of

interest to you gentlemen as outlining the natural trend of
trade towards St. Louis, and if ytiu will excuse the sunburst
of prosperity that I have endeavored to show there?, The Secretary of the Treasury:

You seem to be accurately

portraying conditions.
Mr. Barrollr

In explanation of the map, let me say that

at the time our St. Louis house was established, we had a
houtse In Chicago, and although St. Louie is within 300
miles of Chicago, we found that there was a peculiarity
about the trade tributary to St. Louis which made us resolve to open & house in St. Louis, with the result that
the opening of the house In St. Louis has given us eight
times the business from this center that we formerly secured from Chicago, showing that there is a natural trend
of business in that district to St. Louis, whth we could
not secure from Chicago.
Now, while It is true that salesmen can annex almost
any territory to their home town by strenuous effort, our
particular house Is subject, I think, to the natural flow
of trade, because all of our business is secured by mail,
and the mail orders naturally flow along what might be


called the natural tradelines.
At the time the St. Louis house was started, we sent
special clerks out throughout this territay in the center
to visit the different states, in fact, to visit every town
in every one of the states, giving the merchants an opportunity to select which town, or which city they would
patronize, and this map is made up from the voluntary electio
en the part of the merchants as to whether they would buy
• from St. Louis, or Chicago, or Hew York, as the case might
i be»
Understand, of course, that there 1 B no effort on my
| part to suggest a bank territory with this map.
The Secretary of the Treasury:
Mr* Bar roll:

I understand.

It Is merely a map illustrating the trade

territory of St. Louis.
The Secretary of Agriculture:

You have nothing to show

how this shades off?
Mr* Barroll:

No; I have not prepared any statistics as

| to that.

The Secretary of Agriculture;

Co:;Id you do that by

\ States in that section?


Mr. Barroll:

Yes, sir; if those figures would be of any



value, I should be very glad to prepare them.
The Secretary of Agriculture: Let us see how it shades
off as it leaves St. Louie?
Mr. Barroll: The percentage to the total, I suppose,
would be sufficient?
The Secretary of Agriculture: Yes.
The Secretary of the Treasury: And if you wouldvAOt
object to giving us the total volme also, so that we
night get BO to approximation of the value of this business
to the district here, it would be useful* If ydu prefer
not to disclose those figures, you need not do so*
Mr, Barroll: I will prepare something for you that I
think will be of advantage*
The Secretary of the Treasury: This map may be filed
as an exhibit to Mr. Barroll*s testimony.
(The map so identified and referred to, marked Barroll1a
Exhibit Ho. 1, January 31st, 1914.)
The Secretary of the Treasury: Mr. Carleton.
The Secretary of the Treasury: Mr. Carleton, please give
your name and occupation:
VtJ Murray Carleton, Chairman, of Ferguson-Carleton




; Day Goods Company.

Mr. Secretary, as I as faoillar with the question that
Is before you, - I have been sitting here moat all morning -

I there la really nothing I can add to what has been covered
Vr. Shaplelgh, Mr. Simmons, Mr. Bar roll and Mr. Johnson •

, Of course, I do not Intend to offer any suggestions about
j the banking end of this business, but there are a few things

I might say as to what has toada possible this sunburst
of Mr. Barroll; You take a line from Puget Sound to Raleigh/

• Carolina, running straight across, and the freight rates in
that section and south of that are favorable to St. Louis,
and that is really the basis of the building up of the
The Secretary of the Treasury: Are they more favorable
I than to Chicago?

Mr. Carleton: Yes, sir, more favorable*


The Secretary of the Treasury: Throughout the competitive
Vr. Carleton: From a line from Puget Sound southeasterly
to Raleigh, Horth Carolina, find south of that, it is proven
territoy, it ie territory where St. Louia can beat competition from any market on an equal basis on freight rates.



. Siamons referred to tfcie car service.

It is based

I on several years experience as Chairman of the Traffic Bureau

i of the Traffic League, and based on the knowledge that St.
I- Louis enjoyed that differential in freight ratea. For in\ stance, take Des Moines, Iowa, equal distance with Chicago,
! the freight rate ia a trifle in our favor, and the time abou*
the same.

It forms a triangle. And take a circle from

Des Moines, and go aa far away across the State of Illinois
north as far as llonmouth, quite a distance above Springfield, and along down to Terre Haute, Indiana, Western
Kentucky,and Western Tennessee, and of course, the territory
that the Committee of the Clearing House has presented to
you is practically debateable territory, I mean, the proven
territory of St. Louis commercially, speaking of where we
can place large lines of merchandise.
The Secretary of the Treasury:

Do you come in competition

in your line with Kansas City, for instance?
Mr. Carleton:

Well, yes, Kansas City supplies a local want

there, though we go,right by Kansas City into Oklahoma, and
sell nearly a fl,000,000 worth of goods, my house does, in
Oklahoma last year, right through Kansas City's gateway; a
large business in the State of Kansas, Southern Nebraska,



Southern Iowa

We recognize Kansas City as a good market •

The Secretary of Agriculture:

Could you give us such

a map as we have suggested?
Mr. Carleton:

Yes> I saw the importance of that; Mr.
Secretary this morning when you referred to it.
The Secretary of Agriculture:

These maps will be very

helpful, especially In certain sections of the country*
Mr. Carleton:

I think X could give you the total of the

jobbing business in the dry goods line, but can comprise
my own business with other houses*a
The Secretary of Agriculture:

And showing how it shades

off from the other territory.
Mr. Carleton:

Yesf sir.

TheSecretary of the Treasury:

Could you not, in connect-

ion with the leading Jobbers, prepare some sort of map that
would give us in consolidated form, Mr. Carleton:

I could undertake to do that, Mr. Secretary

I if I had the time:

The Secretary of the Treasury:

We will give you time,


The Secretary of Agriculture:

How much time would you


f require?

Would two weeks be sufficient?


Mr. Carletonr

Ten days or two weeks.

The Secretary of the Treasury:

Showing the sphere of

I your trade influence.

Mr. Carleton:

Tee, sir, I will do that.


The Secretary of Agriculture:

And send it to Washington

to the Committee.
The Secretary of the Treasury:

Juat address it to the

Beserve Bank Organization Committee at Washington.

Mr. Carleton:

There is just one thought that occurred to

me that has not been touched on here, if you will indulge
me a moment, that the trade goes in natural channels, and
it is competitive*

Trade does not follow banting, but

banking will follow trade. I believe that is fundamental*
The Secretary of the Treasury:

Trade follows transporta-

Mr• Carleton:

Yes. It is not what we are - as I understanc

the spirit o f this bill, it ia to adjust some things that
have not been right in the past, and if that adjustment comes
then we have the banking facilities in St. Louis that are
adequate and commensurate with its commercial situation.
The Secretary of the Treasury:

The bill not only intends

to, apply corrective measures, but to make provision for



things that have not heretofore been supplied.
Mr. Carleton:

We recognize that, and if you will give

St. Louis the bank it should have, so it will be on a
parity with its commercial standing*
The Secretary of the Treasury:

We can, at least, promise

you fair consideration*
The Secretary of the Treasury:

Mr. Jones, will you

!j kindly etate your name and occupation?

Breckenrldge Jours, President of the Mississippi Valley
Trust Company, St. Louis,
The Secretary of the Treasury:

Mr. Jones, will you kindly

give us the benefit of your views as to this proposed
Mr. Jones:

X have heard the statements of the other gen-

tlemen, and without attempting to repeat what they have
gone over, I have only one or two suggestions that possibly
have not been covered in the same way.

I mention that

in the main because my business brings me in touch with that

The merchants have/to Id you of the mercantile in-

terests and the commercial bankers of the banking relations
and collections,

I would like to draw your attention to



St. Louis as the center of the Investments of the Southwest
and to the very important part which St. Louis, ^n response
to the public demand, has talcen in connection with the
matters of internal Improvement all through the southwest*
I believe If you were to make Inquiries largely in the territory that has been set out by the Committee here In the map
filed by the Clearing House Committee,-the men in that
territory, If they wanted money in such amounts that they
could not get at home for Internal improvements, whether it
was the building of larger hotels, street railroads,
gas companies, electric companies, or a matter of that kind,
and you asked them where they would go, that a very, very

large proportion of them would say St. Louis was their
natural market, and that Is where they have been getting
their best accomdations,
I think there is no other city in the territory that is


mentioned, or on the map that we h&ve shown there, that


can compare in any way at all with St. Louis in that re-

i gard. The large capital and surplus that is in the banks
; and trust companies In St. Louis is not here for sentlmen-



tal purposes, but it is here because it has been found nec

essary to respond to the needs of the territory that Is



tributary to this center, and the fact that that capital
and surplus is so much larger in St. Louis than in the
'other cities in the district which we have pointed out,
I think, is largely an answer to the question which you
gentlemen are asking, that is, as to what is the trend of

I think attention night be drawn to the fact that here

| in St« Louis there are 13 general offices of the railroads.
You may fairly consider, I think, that a railroad places
its general offices on matters most convenient in the
line of travel and in the currents of business and trade•
No railroad, I believe, that enters St. Louis from the
Southwest or West has general offices anywhere about but
*hat are In St • Louis *
The Secretary of the Treasury:

You think that this dis-

trict that is outlined by your Committee is about the district that St* Louis ought to have?
Kr. Jones: I believe that is what you would fairly denominate the trad* territory of St, Louis, and I believe
that it is equalized in a way that would enable a bank here
to fairly take care of the needs of that district*
Just one other statement as somewhat an evidence of the



trend of travel and trade, that there are more through
trains passing through coming into this Union Station at
St. Louis than into any other one station on the continent.
There are practically 300 daily trains coming Into St.

And I ask you gentlemen in going into any other

hearing that you have in the territory pointed out on that
map, If you will ask the question as to where the people
in that territory naturally go for their commodities, the broadway, - the answer will be almost certainly
St. Louis.
The Secretary of the Treasury:

Thank you.

The Secretary of the Treasury;

Mr I Goltra, kindly give

your name and occupation?
Edward F. Goltra, President Mlasourl Iron Company.
The Secretary of the Treasury:

Will you be good enough

to give us any new light you can, Mr. Goltra, on this probi

Mr. Goltra: As I Intended, the problem is one of financial geography, so to speak*

I am sorry the map is so

Ji large./ I did not make it, but it seemed to me that this
map would assist in the solving of the problem probably as



well as any map that could be presented•
I do not favor any general divisions that have been
made here as th* divisions for this problem, but in making
up the division when you are sizing up the claims of any
of the various centers, you will have before you, gentlemen,
the statistics here which are absolutely accurate, and which
will give you a very clear idea as to how, if you subtract from one portion of one section, it would be necessary, in order to equalise, to add another portion to that
I speak for the Iron and steel interests •
The Territory that is suggested by our Committee is
territory which the iron and steel manufacturers ship to

It is true that we bring our pig iron now

from both Chi cage and theBirmingham districts, &nd in fact
as far east as Detroit and Toledo, but St. Louis is a great
fabricating center, and while we will bring pig iron from
Birmingham, for instanoe, to St. Louis, we will fabricate
that into other articles, finished articles, and we turn
out raw material in a different form down towards them, or,
at least, very clone to them, so that the territory which
our Committee has outlined to you thoroughly and reasonably



and truthfully represents what, from an iron and steel
standpoint, would toe a tributary territory to St. Louis*
I appreciate that in the solving of this problem you
must take into contemplation the future as well as the
immediate present, and I would call to your attention,
gentlemen, that Chicago began to rise right afterSt*
Louis had exhausted her sources of supply of raw material
in the shape of iron ore. At the time whenthe iron ore
that was tributary to St. Louis, so to speak, became
exhausted, the discoveries were made up here on the
Meseaba Range, and with the movement of that ore through
\ Chicago, Chicago began to rise, but the enormous amount
! of iron ore that has been taken out from Lake Superior
i range has now brought those ranges down to such a low
percentage of metallic contents that ores, which could
not have been used heretofore, when they had some high
percentage ores at hand, ores which are now tributary to
St. Louis, are, *o to speak,coming Into fashion, and In
point of fact, as I said before, looking not Into the far
future, but into the immediate future, matters are on foot
here to again place St. Louis on the pig iron map.
There is one other thing that I would like to call to



your attention, gentlemen, and that is this:

it seems to

me th^t we, the American people, are engaged in a
measure upon an experiment "because, as I understand the
correct definition of an experiment, it is something that has
not been tried before. The bill provides for at least
eifeht, and possibly twelve regional banks. I respectfully
ask that you most seriously consider that re should not
make a greater experiment than is necessary, by having
twelve instead of eight banks*

I strongly ask for eight

The Secretary of the Treasury:

this map may be marked

as an exhibit.
(The map so identified and referred to, marked
Edward F* Goltra's Exhibit 1.)
The Secretary of the Treasury:

Mr. D.C. Nugent.

The Secretary of the Treasury:

Mr, Nugent, kindly

state your name and occupation?
Mr. D* C. Nugent, President of D. C. Nugent Dry Goods
The Secretary of Agriculture:

Mr- Nugent, have you

anything to add to what these other gentlemen have given



Mr, Nugent:

I think I have, Mr. Secretary, and inasmuch

as I am the last member of the Clearing House Committee
; to appear before you, our Chairman, Mr. Watts, like a
good general, has kept his best soldiers for the last,
for the rear, so that they will protect everything that
has gone before *

They have told you that trade follows transportation,
and also that the banking facilities will follow trade,
but there is an influence back of that all which they
have not mentioned, and to which I wish to call your


As representing

the retail interests of St. Louis, and

catering to the ladies, I want to say to you that where
the ladles come, there other things will follow, and I
would like to just fortify what I have said by a few
statistics which I would like to read to you gentlemen
as reasonf for Hoc at ing a regional bank In St. Louis
from the retailers standpoint.
The Mercantile sales of St. Louis, as furnished to me
by the License Collector's Office, show a grand total of
over three hundred and

fifty millions annually, (and



these do not Include the sales of Manufacturers,
Commission men, or Brokers) and this fact offers a good
reason why a Regional Bank should be located in this
In face of the fact that the United States census
returns for the ten year period, 1900 to 1910, show an
increase in population of but nineteen per cent, the Retail Sales of St. Louis during this same period increased
more than fifty per cent.
This is proof that the Retail Dealers of St. Louis are
drawing to this City, business fro» the surrounding
country in a constantly increasing volume and from a constantly enlarging territory.
Many of the Retail Houses of 8t» Louis operate large
and well equipped Mall Order Departments, issuing therefrom approximately three million catalogues, price lists
and bulletins annually*

In this way are cared for the

needs and wants of hundreds of thousands of customers
in the States tributary to St« Louis, namely; Texas,
Kansas, Oklahoma, Arkansas, Kentucky, Tennessee, Louisiana
Mississippi, Nebraska, Indiana, Illinois, and Missouri.
Tour attention is called to the remarkable Increase In



the last ten years in the floor space occupied by the
six largest Department

Stores of St. Louis*

Ten years

ago these Stores used 600,000 square feet; today, they
cover an area of 2,500,000 square feet*
Furthermore, the Stocks of Merchandise in St* Louis
ten years ago were but $30,000,000; today they amount
to #50,000,000•
We respectfully submit that these enormous increases
in Store Equipment, in Stocks carried, in Capital invested
and in volume of Bales by the Retail Business of St* Louis
in the past ten years,have put this City far in advance,
from the standpoint of retail facilities, of any City
to the South or Vest of us.
St* Louis is today best equipped to handle the Retail
business of the middle Western and Southwestern States,
and that it is handling this business, and in a highly
satisfactory manner, is shown by the amazing expansion
which has taken place |n the p*st ten years, and which
still continues in the Retail, business of St* Louis•
The convenience and the customary course of business
which the lawmakers had in mind in determing the location of the Reserve Districts, seem to me are tare


^ 1689

manifestly met, as indicated in the foregoing brief
sketch of the growth of the Petail Business in St* Louis
frith which I am most familiar.
The Secretary of Agriculture:

How far east and west

does the retail jobbing district extend?
Ur. Nugent:

East and West?

the Secretary of Agriculture:
Mr, Nugent:


Well, I should say as far west as Fort

Dodge, Kansas in a direct line. Dodge City, Kansas,
Abilene, Kansas, to the northwest Lincoln, Nebraska
All of those people's faces are familiar in our stores
for shopping•
The Secretary of Agriculture:
Mr. Nugent:

Terre Haute, Indiana, Danville, Illinois*

The Secretary of the Treasury:
Mr. Nugent:

And South?

El Paso, Mexico.

The Secretary of Agriculture:
Mr. Nugent:

How far east?


Tee, a large trade from Evansville, and

some from Louisville# but not so much, but a great deal
from Evansvilie.
The Secretary of the Treasury:
Do you get as far south as that?

How about*New Orleans?


Mr. Nugent:


Tea; we have considerable business there;

there are no competing stocks as large as we have here,
no open stocks aa large for their selection in any of
that territory.
The Secretary of the Treasury:

la your Parcel Post

busineaa growing?
Mr, Nugent:

Oh, yea*

The Secretary of the Treasury:

Tou find that is

Mr* Nugent:

Yea* reaponding very largely•

The Secretary of the Treaaury:

That ia extending

the sphere of your trade Influence, ia it not?
Mr, Nugent:

Well, I do not think so so much*

The rpro-

visions of the Postal Laws are such that it handicaps the
sail order business beyond 150 miles from any point, and
to that extent it gives us a cinch on the 150 mifee,but
beyond that, the others have better advantage; but having

larger stocks and better facilities, we overcome tjiat advantage »
The Secretary of the Treaaury:

Thank you, Mr. Nugent•

Aa there are a number of gentlemen, from outside towns
we will hear from Mr. Faulkner first, of Helena, Arkan-


sae. He Kant8 to leave, I believa.




The Secretary of the Treasury:

Kindly give your naae

and occupation,
Mr. Faulkner:

S, S. Faulkner, President of the First

National Bank of Helena, Arkansas,
The Secretary of the Treasury:

Mr. Faulkner, you had

something you wished to present to the Committee?
Mr, Faulkner:

Mr. Secretary, I have not anything to say

about the advantages of St. Louie, why they should have a
regional bank, as I think their advantages have been fully
explained to you, but I want to say in behalf of our Cleari ing House that we feel that St. Louis is that natural point

j: for our section of the State of Arkansas. We are on the

jj weat bank of the Mississippi in the eastern part of the
i State.

The Secretary of the Treasuryt
Mr. Faulkner:

Juat south of Memphis?

Yes, sir. We have a population of about

j. 15,000 F«op!»; we have five banks, and the Clearing House
has passed a resolution endorsing St. Louis as the logioal
point in that section of the State for the regional reserve
The Seorotary of the Treasury.

If you will fil* that.



Mr. Faulkner:

I have a copy of their resolution.

The Secretary of the Treasury:

Just file,that,please,

as an exhibit*
(The resolution so identified and referred to is marked
S. S. Faulkner Exhibit No.l, January 1, 1914•)
The Secretary of Agriculture: Mr* Faulkner, what do
you say about Memphis?
Mr, Faulkner:

I do not think that Memphis would be of

advantage to us on account of its size as would St. Louis«
We can get better aocazmodations from St. Louis and always

St. Louis has been our logical banking point. In

fact I think it has been for most of the banks in that
section of Arkansas•
The Seoretary of the Treasury:

Do you think the whole stat<

of Arkansas should normally and naturally be Included in a
district of which St. Louis was made the reserve bank?
Mr* Faulkner:
about Memphis

Yes, sir.

If there should be any question

our part of the State would naturally be

partial to Memphis on account' of being nearer, but we realize at Henena we could, not possibly have the advantages
at Memphis that we have at St. Louis.
The Secretary of the Treasury:

You are not seeking to



have the reserve bank located at Helena?
Mr, Faulkner: We would if we thought there was any chance
for Memphis•
The Secretary of Agriculture: Is that the idea of
other business men also?
Mr* Faulkner:

Yes, sir*

The Secretary of the Treasury:t Thank you, Mr. Faulkner.
Now we will hear from East St. Louis - Mr* Sexton.
The Secretary of the Treasury: Kindly state your name
and occupation.
Mr. Sexton: Henry D. Sexton, president Southern Illinois


National Bank, East St. Louis, Illinois.
I am not going to burden you very much. I will just refer

| to some facts here. I am representing at this time the
St. Claire County Bankers Association of Illinois, immedi

! lately opposite across the river here from St. Louis. At
a meeting they appointed a committee and adopted resolutions
i and we were asked to present the following facts, and further j
i asked to say we hope that St. Louis would be established
: as a site for one of the regional banks.

The Secretary of the Treasury: And that you be attached




to that district?
UT. Sexton:

And that we bo attached to that district, yes,

The population of St. Claire County is 144,870. We have
two cities, East St. Louis and Belleville, one with a population of 80,000 and the other wish a population of 30,000.
The agricultural farm value in that country is $40,000,000,
the live stock value in that country is $50,000,000, the
farm crops, fruits, and nuts, is $5,780,000.
The coal mines, being located in the coal regions of
Illinois is five million tons annually.
We have nineteen banks in that country with a capital,
surplyo and profits of $3,974,000; deposits, $18,000,000,
-resources $23,194,000; estimated annual clearings $295,535,00
The Secretary of the Treasury:

How many are national and

how many are state?
Mr* Sexton:

Well, I could not answer that right off, but

I know there are more state than national;; it was about two
to one.


Of these clearings I would say eighty-five per cent is
done in the city of St* Louie•
The number of industries we have there is 130 with an



estimated capitalization of $100,000 and employing 35,000
people; an annual pay-roll of $20,000,000, with a coal consumption in East St. Louis alone of three million tons.
I attach to this, which I will file) a list of the most
important products created in that territory.
As to transportation, we have twenty-four railroads, with
a total trackage of 293 miles, side lines and switches,460
miles, with the values of the properties exceeding $15,000,
Xnterurban line, with main line track of 63 miles and
thirteen miles of sidetracks, or side-lines, total value
In considering these statistics we desire to call your
; attention to the fact a large majority of the industries
: located in East St. Louis and St. Claire County maintain
f their important banking connections in the City of St.


|; Louis and are principally financed by St. Louis institutions
; Likewise, it is estimated that the major part of the East
! St. Louis industrial pay-roll is spent in the stores of
St. Louis*
The banking transactions of theSt. Claire County banks
are chiefly handled through St. Louis banking Institutions.



three of the largest of these banks belonging to the
St. Louie Clearing House Association, thus constituting
St. Claire County on Integral part of the financial and
industrial community of St. Louis and rendering it exoeedlngly desirable to us as bankers and most important to
the agricultural and commercial interests of the country
that it be included in any district created by your
Committee In which the City of St. Louis may be located.
With reference to the City of East St. Louie, I want to
say that East St. Louis ranks as the ninety-first city in
size in the United States. There are forty-eight states
In the United States; eighteen states have no city as large
as Fast St. Louis, seventeen states have one city larger
than East St. Louis*
The Secretary of the Treasury:

All that statistical

data it would be better that you file, beoause we cannot
carry it in our minds.
Mr. Sexton:

I will file it*

(A statement so identified and referred to was marked
Henry D, Sexton, Exhibit No. 1, January 31, 1914.)
The Secretary of ine Treasury:

The only point is that

East St. Louis wants to be attached to the St. Louis district*


Mr, Sexton:


Yes, sir. One other matter*

I want to

present one other matter in behalf of the bankers. In
; determing what proportion of Illinois should be constituted
a part of the St. Louis district, I beg to offer you a map
; here which shows the north line across the State of Illinois,
; which you will observe from this point to the southern point,
; about in the center, is located the city of St. Louis.
! These lines are the north lines of the different groups from

|l six to ten that constitute a part of the Illinois State
Bankers Association•

They have put this territory below

here into six to ten groups, that is, five groups, and all
the railroads radiate towards St. Louis, and ah A majority
of the banking business is transacted in St. Louis within
that territory, and to my mind that is about the proper
line across the state ~ if southern Illinois is added to the
St* Louis district that it constitute that territory•


the bankers themselves have fixed that on account of conveniencee in railroad, mall and other things.
The Secretary of the Treasury:

You mean the bankers of

this section?
Mr* Sexton:

Yes, sir; the Illinois State Bankers Assoc-

iation formed themselves into groups.


The Secretary of the Treasury:

What group represents this

Mr. Sexton:

Five groupsI they constitute fifty-two

The Secretary of the Treasury:

Have those five groups

taken any formal action on this?
Mr# Sexton:

Not to my knowledge.

The Secretary of the Treasury:

Would it be possible to

get an expression from themas to where they prefer to be
Mr* Sexton:

No doubt of that, but hardly by tomorrow.

The Secretary of the Treasury:

Would you undertake to

I communicate with those groups and get some official expres!; eion from them as to what they would think would be the


! best arrangement of this southern district of Illinois?


Mr. Sexton:

I would be pleased Indeed to do so*



The Secretary of Agriculture:

And if not for this

i whole territory -~



The Sedretary of tf*e Treasury:


What part of it should


I Committee
come to St.
£nd what part should come to Chicago.



f You do that and settid i t to the Reserve Bank Organization



Mr. Sexton:

I would be glad to*

The Secretary of the Treasury:

In the meantime leave this

as an exhibit•
Mr, Sexton:

I have with a * a book which describes these

I would be glad to leave it*

The Secretary of the Treasury:

I think that would hardly

be necessary*


The Secretary of Agriculture:

Are there any others

who have additional information*
The Secretary of Agriculturer

Please state your

name and occupation*
Mr, Burner:

Lucius D. Turner, Belleville, Illinois,

President of the Belleville Savings Bank*
The Secretary of Agriculture: Do you desire to express
! the opinion of Belleville on this problem?

Mr. Turner:

Yes f sir* Primarily we are very much inter-




ested in having the Federal Bank located in the City of

!. St. Louie, and with all this array of facts and figures
from a commercial standpoint it seems almost overwhelming,
and that it would go almost without saying that St. Louis,

as a atty, is entitled to a Federal Beserve Bank. But in



addition to that it seems to me that these gentlemen have
been a little bit modest*

As you know, when Camilla was

asked to show her jewels she simply brought her two boys
and said, "These are my jewels•* I think the men who manage
the affairs of St. Louis ought to be taken into consideration, their conversatism, their honesty*

They will make

this currenoy law a success, they will put their shoulders
to the wheel*

In the bank, which is for the benefit of tht^T

: whole country, the people of this city and bankers, and business men can be relief upon to do that very thing. They
have done so in the past and will do so again. I feel klnd:

ly to them because theBelleville Savings Bank has a capital


< of $150,000, a surplus of $300,000 and undivided profits

!' of $991,000, it has deposits of nearly fS,000,000, it keeps

I the

most of its reserve in the City of St. Louis, practically

|150,000; it has a large reserve in Chicago, about $30,000,

; and it has a large reserve in New York City, so that I can
speak disinterestedly when I say that X prefer St. Louis to
all these other places, jfothwithstanding I do business with
all of these places*


The City of Belleville follows right upon the limit of
I the City of East St. Louis. They are both in the same county.



East St. Louis extends to the east seven miles, Belleville
takes It up and extends It on to the west ten miles further.
It is a very rich agricultural country as well as a
rich mineral country. The country is so rich, in fact, that
you will remember when Claries Dickens the elder traveled
over this country he designated that country as lookingglass prairie, It was so rich.

The Secretary of the Agriculture:

I have been over it

i; since that time*



Hr« Turner: Now then, from a practical standpoint the

| resources of the country are very great*

First, Its mineral output*

Its output of coal alone is

four million tons a year, and this of Itself Is quite im; port&nt*

The value of its farm property is $40,000,000,

t it produces a wheat crop annually of nearly3,000,000
; and that is around about between eighty cents, ninety cents

and a dollar a bushel, which is a large factor; It also has
a corn crop of over 2,000,000 and that is anywhere from

I' forty to sixty centa a bushel. It has very large manufac• turing plants.

Belleville itself is a city of about 30,000 people; the

r country itself possibly 125,000, conservatively estimated.



Taking Bdllevllle and East St. Louis we think they are only
one city, because the limits of one join the other*
The Secretary of Agriculture:

And economically you

regard the community as largely a part of 8t. Louis?

! WEH


Mr. Turner:

It 1 B very largely a part of St. Louis*

The Secretary of Agriculture:

To what extent do you

speak officially for the community?
Mr. Turner:

I present here a resolution of the Commer-

cial Club of Belleville.
The Secretary of Agriculture: Will you file that?
Mr* Turner:

All right, sir.

(The paper so identified and referred to, marked
Lucius D. Turner, Exhibit No, 1, January 21, 1914*)
The Secretary of the Treasury:

Kindly state your name

and occupation?
Mr. Wright:

Wirt Wright, President of the National

Stock Tarde National Bank*
The Secretary of Agriculture:

Mr. Wright, have you

any additional facts to present to the Committee?
Mr. Wright:

I wish to speak particularly with ref-

erence to the live stock industry which centers here at |

St. Louis, with the suggestion The Secretary of the Treasury:

If your argument is

addressed iserely to the fact that East St. Louis should
be attached to St* Louis, I think you had just better



file your statistical date as an exhibit to your testimony , and we will give it consideration.
Mr. Wright:

I should be very glad to do that.

I have

prepared tables showing receipts of live stock by states
in this territory represented by the map prepared by the
Clearing House, and the distribution of manufactured
meat products in that same territory by States*
The Secretary of Agriculture:

Did you make a map show-

ing that?
Mr. Wright:

I have a map showing the territory deliv*

ing live stock to the St. Louis market and tables prepared
showing the distribution.
The Secretary of Agriculture:
Mr. Wright:

Let us see the map.

The map is merely suggestive as to the

other; it is practically in outlines coincident with the
map prepared by the Clearing House Committee.
The Secretary of Agriculture:

This relates to the live

stock industry?
Mr. Wright:

Live stock and the distribution of manufac-

;j tured meat products, and the distribution of horses and

i| mules. This is the largest horse and mule market in the


The Secretary of Agriculture:

How does it rank in

Mr. Wright:

We are the third largest live stock market

j; in the United States, and X might suggest in this conneo*r
: ion that that the marketing of live stock and the distribution of the manufactured product probably follows the

natural lines of trade as much as any other one industry


; ftfr the reason that we have so many other competitive

markets, and the delivery of live stock to this market depends purely upon the transportation service, the demand
at the market, and the facilities for financing, and that
is true, of course, of the Kansas City market, under the
Chicago market, so that the delivery of live stock to
this market and the distribution of the manufactured meat
jj products probably represents pretty closely the actual
j; St» Louis territory from a natural business standpoint*

The Secretary of the Treasury:

Chicago, according to

* your statistics here, iB first, Kansas City second, St.
;; Louis, third.
Mr. Wright:

That is correct.

The Secretary of Agriculture:

What is the percentage

as betveen Kansas City and St. Louis and East St. Louis?


Mr, Wright:


As to the amount of live stock received?

The Secretary of Agriculture: Yes.
The Secretary of the Treasury:

And the meat products

llr. Wright:

I am not aaq^u&inted with the distribution

of Kansas City, but the receipts of Kansas City are probably 25 per cent larger than St. Louis,
The Secretary of the Treasury:

How much larger is

Itr* Wright:

I would not hazard a guess as to that,

probably twice as large as St. Louis*
The Secretary of Agriculture:

But in your mind there

i would be no question that East St. Louis should be

j: attached to St. Louis if the bank is established here?
Mr. Wright:

Absolutely, from the standpoint of the

live stock industry, which, it is unnecessary to remind
! you, is in a critical stage right now.

The present

lines of communication between this territory and this
market ought not to be disturbed any mote than is absolutely necessary, purely from the standpoint of the live
stock Industry, which Is one of our great industries
in this territory•



With your permission I would be glad to file these
i tables.
The Secretary of the Treasury:

File this with the map.*

(The map so identified and referred to marked
| Wirt Wright's Exhibit Ko. 1.)

(Statement so Identified and reffered to marked
Wirt Wright's Exhibit No. 3.)
The Secretary of the Treasury:

Mr, Waite#

The Secretary of the Treasury:

Pleaea give your full

I name, occupation and address?
Mr. Waits:

A. H* Waite, President of the Joplln

National Bank at Joplln, Missouri.
We live down in the extreme southwestern corner of the

Without any attempt to advertise, or to say any-

thing relative to the importance of our city, we would
just like to state that during the year 1913, our country produced about |18,000,000 worth of zinc and lead

We did not produce quite so much in 1913, on

account of the prioe of ore; there was ateut


tone more ore, but we receive* $10.00 per ton lees fir
it, which# of course, reduced our output nearly $4,000,000,



I have been banking in Joplin for 33 yeara continuously*

The natural trend of our business comes to St. Louis•

The Secretary of Agriculture:

You are nearer Kansas

; City, though*

Mr» Walte:

Yes, sir, we are 155 miles directly south

of Kansas City, but St. Louis is rather the daddy of our
country on account of in the very early days all of the

I product came to St. Louie, and was sold by the commission
merchants in St. Louie, and it was very natural for it
to come here, and very natural Tor us to continue to come
The Secretary of Agriculture:

Do you represent any

Association, Mr. Waite:

Mr. Waite:

No, sir, I do not, Mr* Secretary.


The Secretary of the Treasury:

What ie the sentiment

: of the bankers in your town as to where you should go?


Mr. Waite:

Well, I would like to explain that situation

if you will bear with me. The Kansas City boys, I think,

f are a little quicker on the trigger than the St. Louis

j; boys. Row, the Kansas City boys, I think, asked the
Clearing House of Joplin to pass resolutions in favor of

Kansas City, which they did.

I personally rather want



to join the Association in St. Louis*

We have made our

application, which we ought to do, but the Clearing House
! passed a Resolution favoring Kansas City.

I signed that,

before the last one. There were two statements made in
the resolution that I did not like*

The first was that the

natural trend of business was Kansas City, and that we
wanted to join the Kansas City Reserve Bank.


I want to join the St. Louie, but I signed that, The Secretary of the Treasury:
Mr. Waite :
Kansas City.

With repugnance?

Tee, with a great deal.

Not because of

I want to say when you go out to Kansas City

you will find the busiest live wires out there you ever
saw; they are certainly on their job, and Kansas City is
full of that sort.

We call it "pep*.

The nicest lot of

fellows you ever met, and if Kansas City was not out
there, I think you would have no. trouble about determinjj ing the location of a Federal Reserve Bank for St. Louis,
I but, naturally, they are ambitious, and it is right that
| they should be. They will ask you to remember them.
The Secretary of Agriculture:

Mr. Waite, this is a

question of fact, not a question of resolution.

Is there

not any way.of showing where the business of Joplin goes?


ttr* Waita:


I think, Mr. Secretary, we could present

to you the heavy shipments of ore, which is the principal
product of our country, and I think we would have no
trouble in showing you that that ore, and those metals,
come this way*
The Secretary of Agriculture: What about the banking
relations and the business men's relations?
Mr. Walte:

I think that all the banks in Joplln carry

an account in St. Louis, as well as they do In Kansas City,
but my Impression is, Mr. Secretary, that their larger
balances are carried in St. Louis. That is our experience
In our bank*
The Secretary of the Treasury:

Do you carry balances

in Chicago and New Tork?
tfr. Waite: Tee, sir*
The Secretary of the Treasury: . To *hat extent? *
1 Ux. Waite: Well, our balances in New York are largely
: for purposes of drawing our New York drafts* We have cue|i tomers thnt require New York Exchange, and our principal

Ij: balance is carried for that purpose*


Our principal

balances, howeve^, are carried in St* Louis*
The Secretary of Agriculture: Could you let us know



j what percentage of your business is in those cities.
Mr. Waite:

What business do you have reference to,

the banking business?

could do
The Secretary of Agriculture: Yes, Mr. Waite, I think 1/

I that without much trouble.

I would be very glad to •

i The large part of the business, I think, Is the shipment
I of metal and ore.

We have a town *of 40,000 people and

:; our miners are all Americans, and they are industrious
; and ordinarily make money.

We have some bankers who were

' miners.
The Secretary of Agriculture:

It is your impression

Joplin would be better served if it were attached to a
bank located in St• Louis?
Mr. Waite:

Well, Mr. Secretary, personally, I would

feel that way.

I donft like, however, to say a word

: against our friends in Kansas City, because I know that

they are going to ask for a Federal Reserve Bank, and if

j I had my way I would give them one.



The Secretary of Agricultures: You would be generous
in distributing them?


Mr. Waite: Tee, sir, very generous.
The Secretary of the Treasury:

You would not, though,



if you nere under oath to administer this law *ilh absolute impartiality and try to divide the country into
districts in such a way as to conserve in the greatest
measure the convenient and customary course of business,
would you?
ITr* Waite:

Well, I think there is no doubt in the

minds of the people but that is the purpose of this

You gentlemen have come out for that purpose,

and I know the people have faith in your purpose, and
in your thought of doing that sort of thing*
The Secretary of the Treasury:

I meant by that, that

you would not divide it merely on sentiment or generosity*
Mr. Waite:

Well, not entirely, Mr, Secretary.

I can

see how you gentlemen can give Kansas City a Federal Re*
serve Bank - perhaps not quite so much territory as St*
Louis would like to have. I appreciate and admire the
spirit of St. Louis to get as much territory as they can,
I have never thought that there was any doubt of St. Louis

getting a Federal Reserve Bank, nor have I ever given it
a thought that there was any rivalry between St* Louis
and Kansas City*

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




The Secretary of the Treasury:

Pleaee give your

name and occupation?
Mr. Leonard:

0. R. Leonard, Tulsa, Oklahoma; occupation

Vice President of the Exchange National Bank.
The Secretary of the Treasury: Mr* Leonard, you are familj! iar with the problem the committee is struggling with?
jj Mr. Leonard: Yes, sir.
The Secretary of the Treasury: And I suppose you want to
ij give us some information as to the sentiment and desires
of your town with respect to the division of the country
into districts , and as to what city you ought to be attached
Mr, Leonard:

I would say I noticed in consulting your maps

we are not even on the map*
The Secretary of the Treasury: You have not consulted
the right map because you are on our map anyway.
Mr. Leonard:

I represent a district that has not been

mentioned heretoday. I represent a district in the heart
of the oil and gas industry of the mid-continent field, at

Tulsa, Oklahoma. A few years ago, of course, we had no city.
Today, I think, without any doubt we have a city of 36,000


j or 40,000 people, and business is very active; we have two ©fi



the largest banks in Oklahoma!
The Secretary of Agriculture:

State or National?

Mr. Leonard;: National. Two of the largest aggregate
deposits of any bank in Oklahoma*

As my Joplin friend said,

the Kansas City people are very quick on the trigger* They a^
a very nice bunch of fellows; we are very fond of them; they
came to T^isa and we endorsed them.

Since that time we have

j become a little more familiar with the conditions, and it is
a question in our minds whether the Committee would locate
two banks in Missouri. When they possibly thought in their
minds they would only locate only eight In the entire United
I States, we hardly thought that was possible*

There is one

thing, however, that we do have in our minds, that If you expect to locate a bank in Texas, we do not want to be attached
to that, because we have no business relations with Texas,
neither do we have any business relations with Denver, Colora
The only business relations we have where we would like to be
: attached to would be either Kansas City or St. Louis*

The Secretary of the Treasury:

Well, as between the two,

f which do you think would best serve the convenience and cus*
tomary course of business in your territory? \

Mr. Leonard:

Well, possibly, Kansas City can serve us a



little quicker, but St. Louis has always given us good
servide, and I am sure it would be entirely satisfactory,
so far as we are concerned, if there was only one to be located, to be located in St. Louis; it would serve us without any question*
The Secretary of the Treasury: Suppose you had a reserve bank here and you had a branch in Kansas City, a
branch of that bank In Kansas City, you would get adequate
service tinder those circumstances, would you not?
Mr. Leonard:

I think so*

The Secretary of Agriculture:

How was the question

raised before your banks?
Mr. Leonard: Well, it was largely solicited.
The Secretary of the Treasury:

What representations were

made to you, for instance, about the matter?
Mr. Leonard:

Well, nothing further than that Kansas City

was, - it is only about 300 miles from Tulsa, andSt. Louis
i is about probably 500 miles•

Of course, we take a train out


of Tulea for Kansas City and we reach there much quicker
I tfcan we do 8t. Louie, and practically only one line of road
> from Tulea to St. Louie.

The Secretary of the Treaeury:

With which city have you



the most trade relationships, and the volume of your
business is done where?

Mr. Leonard:

I would say the volume of business possibly

was with St. Louis from the iron industry*

For instance,

Pittsburgh alone made a statement at Tulsa last year at a
banquet that they had sold 180,000,000 of iron and products in our territory, flow all that cornea through St.

St. Louis furnishes large amounts of long piping

and things of that kind for the oil fields.
The Secretary of Agriculture:

On which of those cities

is your section of the country the more dependant financially
Mr. Leonard:

I should say St. Louis, for this reason:

; St. Louis has practically financed the internal improvements,

1: although Kansas City has never - like making loans on

buildings and various things of that kind, St. Louis has
largely done that.

Kansas City has been very good to finance

short time paper and things of that kind equally, I think,
with St. Louis, but for the internal improvements, St. Louis,
| I presume, is a great deal more interested In all those
| things.

The Secretary of Agriculture:
Mr. Leonard:

Larger financial undertaking

Yes, sir; St. Louis finances those*



The Secretary of the Treasury:

Where do you keep the

bulk of your reserves?
Mr. Leonard:

Well, now, speaking from Tulsa, - it would

be different from othe* cities - we carry large balances
In Pittsburgh and New York*
The Secretary of the Treasury:

You do that for a

specific reason?
Mr. Leonard:

That is for the oil business; that is for

a specific reason*
The Secretary of the Treasury:

Are you attsabted to

Pittsburgh at all by the high rate of interest that is
paid on your balances there?
Mr. Leonard:

Not particularly, it is more reciprocity,

The Secretary of the Treasury:

You would keep it there

Mr. Leonard:

We would keep it there anyway.

The Secretary of the Treasury:

Outside of that special

consideration, and as between St. Louis and Kansas, where
do you keep the larger part of your balances?
Mr. Leonard:


We have more in Kansas City.

The Secretary of the Treasury:

That would imply that

you have more active accounts between Kansas City and Tulsa



than between St. Louis and Tulsa?
Mr. Leonard:

Yea, sir.

The Secretary of the Treasury:

Does Kansas City pay a

higher rate of Interest for balances than St. Louis, or
is it the same?
Mr. Leonard:

Just the same.

The Secretary of the Treasury:
collections, the same?

And the matter of check

The cost of collecting checks Is

the same, the charge for collecting checks?
Mr. Leonard:

Well, Kansas City is a little more lenient

on the collecting of checks.
The Secretary of the Treasury:

Does that influence the

size of your balances there?
Mr. Leonard:

I think so.

The Secretary of Agriculture: How much more lenient?
Mr. Leonard:

Well, that part of it I have never figured

It out to know just what it would be.
The Secretary of Agriculture:

But they are more liberal

in the matter of check collections?
Mr. Leonard:

Yes, sir, it seems to me they have a better

organization for collecting the checks than we get in touch
with than St. Louis*



The Seoretary of the Treasury:

Is there very much

division of sentiment in Tulsa as to where you want to go?
Mr* Leonard:

No, sir, I think not*

The Clearing House

had a meeting and discussed this matter since we endorsed
Kansas City, and the only thing we feel about it is this,
that we want to be attached to one or the other of those
The Secretary of Agriculture:

You do not want to go

Ux. Leonard:

No; we could not do that; we have no bus-

iness relations with the south, none at all.
The Secretary of the Treasury:
The Secretary of Agriculture:

All right*
Mr* Fort*

The Secretary of the Treasury:

Kindly state your name

please and occupation?
Mr. Fort:

Sterling Fort, President of the Northern Bank

of Tennessee, Clarksville, Tennessee,
The Secretary of Agriculture:

Do you represent any

Mr* Fort:

No, sir, 3ust the bankers of Clarksville.

The Seoretary of the Treasury:

Do you come with authority



to apeak for all of them?


We had a.conference down there with this

St. Louis Committee*



The Secretary of the Treasury:

What St. Louis Committee

was that?
Mr. Fort:

Some St. Louis bankers were around getting

facts, and we just all agreed that we wanted Nashville or Lou
ville first and St. Louis second.

That is the authority

that I have from Clarkavillo.
The Secretary of the Treasury:

Would it do great vio-

lence to the normal course of buiineas in middle Tennessee
if that section was attached to St. Louis?
Mr, Fort: What is that?
Ihe Secretary of the Treasury: * I say, would it do great
violence to the ordinary course of business and exchange if
middle Tennessee were attached to a district, of which St.
Louis would be headquarters.
Mr* Fort:




The Secretary of the Treasury:

Are your relationships

considerable with St. Louis now?
Mr. Fortr

Yes, six.

The Secretary of the Treasury:

Financial and otherwise.



Mr* Fort:

Our staple crop down there is tobacco.

Clarkeville is the largest strictly dark tobacco market
in the country.

We are in the center of what is known

as the black patch. We grow and have a heavy export of
dark tobacco*

Ninety per cent of it is exported to

foreign countries, and, of course, is paid for with foreign capital. Those exchanges are now made largely
through New York, but it requires from 4 to 6 days*


Louis is as near us in mall facilities as a town 10 miles
away. We can mall a latter tonight in Clarksvllle and
it Is in St. Louis the next morning, and then back the
next day*
The Secretary of the Treasury:

Do you keep any part

of your reserves in St. Louis?
Mr. Fort:

Yes, sir.

The Secretary of the Treasury:
Mr. Fort:

Kow much of them?

Well, we do not have to keep a reserve, you


The Secretary of the Treasury:

Oh, you are a state

Mr. Fort:

My bank is a state bank.

The Secretary of the Treasury:

Where do you do the most



j, of your tanking?
Mr. Fort:

Well, Louisville and Nashville principally.

St. Louis haB lately stolen from Tennessee the best

\, banker we had, we think, in the person of Mr. F. 0.

I Watts.

The Secretary of the Treasury: * la that the reason you
want to be annexed to the St. Louis district?
Mr* Fort:

That is one reason*

We think he is gpod

stuff, and, in fact, Tennessee fells like we furnished
the ginger that made the Honorable W, G. HcAdoo
bore New York full of holes, and we are also very proud

I of the fact that the President's Father was a Professor
j in our College at Clarksville, and so we feel like we

| know a good tiding when we see it, and we feel like St.
f Louis is a pretty good place for arregional bank*

The Secretary of Agriculture:

Tour first choice, you

say, would be for a district with Louisville as the headquarters?
Mr. Fort:

Louisville or Nashville-

The Secretary of Agriculture:

Do you think that would

be better for the country than these others?
Mr. Fort:


Well, I don't know about that.





The Seoretary of Agriculture:

Do you think it would t» a

stronger district?

Mr, Fort: Would Louisville and Nashville?
The Secretary of Agriculture:

To have a district with

Louisville or Nashville as the location instead of one at
St. Louis*
Mr* Fort:

No; I could not say that*

The idea is, as I

understand it, to make a balanced financial institution
of this regional bank, and in our territory there we have
a feast or a famine*

Our maximumrsreoiipts in Clarksville

of tobacco are around 40,000 hogsheads, or 60,000,000
pounds, and the minimum 30,000 hogshead, or 30,000,000
pounds, and it takes about 90 days to handle it*
The Secretary of the Treasury:
Mr* Fort:

What is the value of that?

The value of that is from #3,000,000. to

The Secretary of the Treasury:

And it is handled in a

period of about 90 days?
Mr, Fort:


The Secretary of the Treasury:
Mr. Fort:

December, January, and February, usually. That

depends on the season.

At what time of the year?

Some times a season is changeable•



This year we had a favorable season, and the tobacco has
come in earlier; last year, we had the reverse*
The Secretary of the Treasury:

As a rule, it is December,

January and February of each year?
Mr. Fort:

Yes, sir*

The Secretary of the Treasury:
Mr. Fort:

T^ank you*

I just want to aay to you gentlemen when you

have gone the rounds, and have all the statistics, if you
cannot agree, we would be glad for you to compromise and put
a regional bank at Clarksville*



The Secretary of Agrioulture:

State your name and connect-

Mr. Dunca^:

L* W. Dunca, cafehter of the First National

Bank of Muskogee.
The Secretary of Agricultures
Mr. Duncan:

What do you represent?

The Uuskogee Clearing House,

The Secretary of Agriculture: Have you any resolutions?
Ux* Duncaa:

No, sir, we haven't*

They just commissioned

me to be present at both the St. Louis and Kansas Citfc hearings
and endorse either one city or the other •
The Secretary of Agriculture:

Are you indifferent?

Ur. Duncan: Well, I would not be in a position to commit
myself to either one*

I think the relations between the two

cities are very much the same as far as we are concerned*
The only thing we want to guard against Is being put into a
southern district. The period of the year that we nedd money
they need mdney in the south*

We want to be in either St*

Louis or the Kansas City district*
The Secretary of Agriculture: You are not here to advocate!


either one or the other?
Mr* Dun&n: No, sir*





The Secretary of Agriculture:

You donft care at this time

to express an opinion?
Mr. Duxcan: No, sir*
relationship is

I could state here our personal

really closer to Kansas City, that is, person-

al acquaintances, but we have always regarded St. Louis a* the
financial center and we have looked to St. Louis to finance
: any large matters.
!; The Secretary of Agriculture:

Where do you keep your re-

Vr» Duncan:

Huskogee is a reserve city and we keep it

in St. Louis, Chicago and New York.
The Secretary of Agriculture: Which has the larger
volume of transactions with your section, St. Louis or Kansas
Mr* Dunaan:

I think the number of items we handle is

probably two or three times larger through Kansas City than
St. Louis* We handle Missouri, Kansas and Oklahoma through
Kansas City, and the Oklahoma item consisting of the
volume of the business.
The Secretary of the Treasury:
Mr. Duncan:

Is Muekogee a reserve

Tee, sir. I have forgotten tout I thought it



The Secretary of the Treasury:

How as between the three

j central reserve cities where do you carry the largest balan»?


St. Louis. We have always carried a big

balance in St. Louis*

Recently, within the last two or three

years we have carried nearly as large a balance in Kansas
City, but up to two years ago over half of the exchange in
St. Louis•
The Secretary of Agriculture:

Taking the enterprises

in your section, which of these cities to your section
is most desirable?
Mr, Duncan:

Well, that would depend, of course. All of

our stock and grain and hay, all that business passes through
Kansas City, practically all of it; and all of our wholesale
people buy from St. Louis at Chicago.

I don't think there

is a great deal of wholesale buying done with Kansas City.
The Secretary of Agriculture:
Mr, Dunoan:

Yes, sir.

The Secretary of the Treasury:

You are tied to both places?

We thank you.



The Secretary of the Treasury:

Give your full name and

Mr* Long:

Thomas W. Long, Cashier of First National Bank,

Hopkinsvllle, Kentucky.
The Secretary of Agriculture:
Mr. Long:

Only that bank*

What do you represent?

There is only one national

bank in the city*
The Secretary of Agriculture:

You want to tell us about

your relations?
Mr* Long:

Yes, sir; I would be very much pleased to do

The Secretary of the Treasury:

You are in the south-


|! western part of the state and just north of Clarksvllle?

Mr* Long:

North of Clarksville, we are going to take

I Clarksville In before the next census*

The Secretary of Agriculture:

You haven't been skillful

enough to take them in up to this time?
Mr* Long:

No, sir, not yet.

I am sorry that I didn*t

bring a map showing that Hopkinsville was the center of the
United States*



The Secretary of the Treasury:
Mr. Long:

We will admit that.

I am glad we are in the St. Louie district.

We are in the center, as Mr. Fort, of Clarksville, told you
of the largest tobacco district in the world. Our county,
Christian County, in Kentucky, raises more wheat than any
other county in the state*

Our banking facilities are not

of the teat. Perhaps our county has less than three aurtere
of a million dollars bank capital. Thus a portion of it is
where we are compelled to borrow money. Heretofore we have
been going to Louisville, and to be perfectly candid with
you Louisville is our first preference in the establishment
of a regional bank.

It is one hundred miles nearer than St.

It is State town> and we are very intimately

associated with them in a business way, and in a social way
too. Next to Louisville our choice is St. Louis, beyond any
possible question. Many of St. Louis9 prominent men were
from Kentucky and we are almost an intimate here as we are
at Louisville. They are ao4uainted with our methods; they
are acquainted with our circumstances. Especially the
folks of the Third Kational, Mr. Watts and Mr. Houston; they


i know our people by name and know whether a note on Ed Jones
i would be good for ten thousand dollars or twenty-five thousandL
dollars, and we feel at home In St. Louis.

I understand that most of the national bankers— the majority of the national bankers in eastern Kentucky have accounts in Bt. Louis. It would be very muchto the advantage of our community if we could not get in the Louisville district to eome to St. Louis.
The Secretary of the Treasury:

This lsnft a national

Mr. Long:

Yes, sir, and the only national bank in the

The Secretary of the Treasury:

Have you a bankers

association here for this western end of Kentucky?
Mr. Long:

No, sir. We are a part of the State organization

and #he 8tate has some district organizations. There are no
meeting organized—meeting of the bankers. They had a meeting a few days ago and expressed this what I am expressing.
The Secretary of the Treasury:

What bankers had that

Mr. Long:

All of the four banks.

The Secretary of the Treasury:

Four banks—


Mr. Long:


Of Hopkinsvilie. There are two gentlemen here

from the Planters Bank, the cashier of that bank and one of
|; the directors. I would be very glad if you gentlemen would

give them a few minutes here.
The" Secretary of Agrioulture: We would be very glad to
do ao.
Mr. Long:

If we can't get Louisville we want St. Louis.

We are in direct connection, get on the train at night, spent
the day and go back home the next day.
The Secretary of Agriculture: We would be glad to hear
from one of those gentlemen. The time is ao short we can


I; only hear from one of them.
The Secretary of Agriculturer Give your name and position.
Mr. Eckles: A. H. Ecklee, oaehier of the Planters Bank
and Trust Company, Hopkinsville, Kentucky.
The Secretary of Agriculture: Do you desire to endorse
what has been said by Mr. Long?
Mr. Eckles- Yes, sir. I don't know as I could add anything
special, and I don't like to take up your time, except I might
add out of 963,000,000 pounds of tobacco raised in the United



States Kentucky produces three hundred and sixty thousand*
We are endorsing Louisville for flr»t place, and I donft know
as I can add anything to what Mr. Long las said.
The Secretary of Agriculture: You are advocating St. Louis
as your second choice?
Mr. Eckles:

Second choice.

The Secretary of the Treasury;

Mr* Duncan, did you want

to be heard here?
Mr. Duncan:

Mr. Secretary, the Little Rock delegation

la coming tomorrow*
The Secretary of the Treasury:

Mr. Brown of San Antonio

seems to be here.

The Secretary of the Treasury:

Do you desire to be heard

here or In Texas when we reaoh Texas?
Mr. Brown:

I am from San Antonio and the Clearing House

had a meeting last Monday in which they appointed three of
us to come up to this meeting.
The Secretary of the Treasury:

All right. We expected to



'hear you in Texas but we w i l l hear you now.

Kindly give

I your full name?

Mr* Brown:

J. N. Brown, President of the Alamo National

Bank, San Antonio, Texas.
The Secretary of the Treasury:
Mr. Brown:

And you are a committee?

A committee of three appointed to come to this

| meeting.
The Secretary of the Treasury:

A committee representing

Mr. Brown: Representing the clearing houae of San ^ntonio.
The Secretary of the Treasury: Are you the chairman of
the committee?
Mr. Brown: Why, we didnft elect any chairman*

I was

just requested to make a statement*
The Secretary of the Treasury:

Mr. Brown Just make your

UT. Brown:

The {blearing house adopted a resolution at the

last Monday's meeting with reference to the scope of the
district in which San Antonio would lifce to be placed.
The Secretary of the Agriculture: Hare you a copy of that
resolution with you?
Mr. Brown:

Yes, sir.





The Secretary of Agriculture:


Mr. Brown:

Suppose you read it.

Resolved that it is the sense of the members

:; of the San Antonio Clearing House that in arranging the dieji trlcts with reference to Regional Banks that this section
!, would be benefitted by being placed in a district west of the

; Mississippi River embracing the entire State of Texas and
j| extending north to Include St. Louis, Mo. and all of the
territory intervening.
Resolved further that the S*n Antonio Clearing House
favor the establishing of a Regional Bank in Texas, but if
this can not be accomplished, retaining the district as outlined, we waive the claim for a Regional Bank in Texas as
we feel that the outlines of the district are of more iaportanoe than the location of a Regional Bank in our State.
The Secretary of the Treasury:
Mr. Brown:

What district did you out-

Well, talcing San Antonio—San Antonio you

know is in the southern part of Texas.
The Secretary of the Treasury:

You have seen the map

presented here by St. Louis of that territory?
Mr. Brown:

Yes, sir. And that embraces all of the

territory that we speak of, and more. We didn't go outside



of the territory I have mentioned to discuss either east or
west—Mississippi on the east and Louisiana, or any district
on the west exceptint that we thought the entire State of
Texas should be kept Intact, and that the interest of Texas
would be best served by being connected with a district west
of the Mississippi River geographically, that embracing
a greater diversity of interest.
i The Secretary of Agriculture: Now, Mr^ Brown, your territory extends from the Rio Grande to St. Louis?
| M r . Brown: Y e s , sir* We are about one hundred and thirty
!or one hundred a n d fifty miles from the Rio Grande.
; The Secretary of Agriculture:

1 know the section intimate-

Would y o u suggest that a regional bank be placed in

fTexaa with which S t . Louis should be connected?
M r , Brown:

Yes, sir.

The Secretary o f Agriculture:

Have it aa one of your

branches possibly?
M r . Brown:

Yes, sir.

The Secretary o f Agriculture:

Y o u think that would be

in justice to the course of^trade?. What city would you
suggest in Texas?


Mr. Brown:


Well, San Antonio is not an applicant. There

are three applicants.

I would not like to express a prefer-

ence between those three.
The Secretary of Agriculture:

Do you think it would be

normal to relate St. Louis to one of those financial capitals?
Mr. Brown:

Well, of course, we haven't—Bone of our cities

are anything the size, you know, or importance as St. Louis.
The Secretary of Agriculture: Waiving the question of
local pride, looking at this thing in its large view, if
you were mapping out that district and had the responsibility
I of making the location would you select one of the Texas
|cities or St. Louis?
Mr. Brown:

I have a personal State pride to see the

bank there, but I believe that St. Louie would serve the best.
The Secretary of the Treasury:

What cities did you have

particularly in your mind for the purpose of the district?
You refer to the whole of Texas but you embrace Louisiana,
Arkansas, Oklahoma and Missouri in the district?
Mr. Brown:

We had specially in mind Tex&s, the whole of

Texas, Arkansas, Oklahoma, and that portion of Missouri that
is adjacent to St. Louis*

I donft know whether it would in-



elude the whole of Missouri or not, but we hadn't thought of

either of the other western cities.
The Secretary of Agriculture:
I Mr. Brown:

All of Louisiana.

All of Louisiana.
Louisiana interests and

Texas interests are very much identical • They are both cotton
jgrowing States; grows some sugar and some rice*
|are the same.

Our interests

If we do borrow money we borrow money at the

isame time*

If we have a supply of money we have a supply

of money at the same time*
The Secretary of Agriculture:

You think it undesirable

to have a district aade up entirely of States that had these
movements at the same time or that would normally borrow
money at the eame time?
Mr. Brown:

At the eame time.

The Secretary of Agriculture:

Let me ask you another

quest ion . You people in San Antonio have a great deal of
touch with the cattle business?
Mr. Brown:

Yes, sir*

The Secretary of Agriculture:

Would you throw west Texas

into a district related to St. Louis or Kansas City?
Mr # Brown:

I think it would be better served from St.

Louis, or any other city embracing all of the western


The Secretary of Agriculture: What is your reason for
Mr. Brown:

Well, a great deal of our country comes to

St. Louis, but I donft think that that fact is of very much
importance with reference to cinnunicatlon and railroad

We are juat as convenient to St. Louis as

we are to Kansas City.
The Secretary of Agriculture:

In your section which is

II looked upon as a true center for financial transactions

jor for financial enterprises in Texas, St. Louis or Kansas

jl Mr. Brown:

St. Louis I think.

The Peoretary of the Treasury:

Do you have larger amount

of business with St. Louis than Kansas City?
Mr. Brown:

I believe the entire State has. There may

I be some portions of the very far western section I am not
familiar wit£.
The Secretary of Agriculture: Take San Antonio?
lfr. Brown:

Take San Antonio I suppose as compared to

Kansas City St. Louis has two or three times as much busi


ness from our section as Kansas City,
The Secretary of the Treasury:

Where do you keep your

reserve, Mr. Brown, under the present Bystem?
Mr, Brown:

Of course, we keep the reserve in the three

central banks in St. Louis, in Chicago and New York.
The Secretary of the Treasury:

Dividing it about

Mr. Brown:

Dividing it about equally between the three

The Secretary of the Treasury:

The rates of interest are

the same in each, or about the same?
Mr, Brown:

Oh, I don't think there is but very little

difference in the rate.
|i The Secretary of the Treasury:

Would you find any

necessity for keeping a balance in Chicago and Kew York,
assuming this system in operation and a reserve bank at
8t* Louis and your section of the country attached to that
Mr. Brown: We would always keep some accounts in Hew
The Secretary of the Treasury:
Mr. Brown:


Largely on accouht of the exchange. You see



our cotton goes largely to New York. The buyers either have
an agency in San Antonio or Houston and buy for eastern
houses or foreign houses•

All of our foreign exchange goes

through New York, and of course we would, as I understand the
purpose of handling outside drafts regional banks can
only credit par upon receiving banks in their particular
The Secretary of the Treasury:

Assuming now it was a

parring of exchange between those reserve banks so that the
I check otf your reserve bank would pass at par in New York;
would there under those circumstances be any necessity for
keeping accounts thereft>rexchange purposes?
Mr. Brown:

There would for this reason—

The Secretary of the Treasury:
Mr. Brown:

To settle balances?

Say for instance sometimes we get out one

hundred to one hundred and fifty thousand cotton exchange
a day.

If we send that to St. IiOuis there would be a day*e


If we sent it direct to New York it would reach

there and credited to us one day earlier than St. Louie,
The Secretary of the Treasury:

Suppose you had a system

of clearings between these different reserve banks by which
you get the credit a s ~




! Mr* Brown:

Take the St. Louis reserve bank—

The Secretary of the Treasury:

Assume you would get

just as quick credit through the St. Louis bank as you would
It the exchange was sent to Hew York, then the hecessity
for keeping money in Hew York for exchange purposes would
disappear wouldnft it?
Mr. Brown:

You eee it Is not supposed that member banks

draw on the regional bank for that purpose as I understand



Even If we wanted to sell exchange on St. Louis we would

e necessarily compelled to buy of some St. Louis bank-

not the regional bank*

And the same in reference to Hew

[York we could get to Hew York a day earlier, and then in
[selling exchange we would draw on Hew York, and we would
save a day f s time.
I The Secretary of Agriculture:

How would in your section


the State of Texas being attached to Hew Orleans be received?
Mr. Brown:

I don»t think Texas would think its interests

could be served from New Orleans because our interests are
the same; ©imply in my judgment borrow at the same time,
and neither of us have very large manufacturing interests,
and our business would be all one kind.

In other words,


all the banks in the district would be effected in the same
way, all of the demands for money and of over-supply•
The Secretary of Agriculture: Have you very large relations with New Orleans?
: Mr # Brown:

We have considerable but not near so much as

St. TiOuifl. I suppose our balance in New Orleans don't
run ten per cent of what they do in St« Louis •
The Secretary of Agriculture: Would that be true of
San Antonio as a whole?
i Mr. Brown: I believe It is. I believe it is pretty
generally with reference to the banking interests; I believe

lit is.
j The Secretary of Agriculture: I thank you.

i: The Secretary of the Treasury:
!be heard from San Antonio?

Did anybody else want to

Unlese they can add something

jnow to what Mr. Brown has said I don't think it will bo
necessary to hear them.
!! Does Mr. Terrill wish to be heard?
j! Mr. Terrill: I would bather you call on Mr. Frost.
Mr, Frost: Mr. Frost says he does not wish to be heard.



The Secretary of the Treasury:

The Committee will ad-

journ until 10:30 tomorrow morning.
(Thereupon, at 4:40 ¥M.$

the hearing was adjourned to

Thursday, January 23nd, 1914, at 10:30 AM.)



St. Louis, Mo., January 33nd, 1914.
Mr. Pursuant to adjournment at 10:30 A.M.

Parties as before.


The Secretary of Agriculture:

Please give your full name

to the reporter?
Mr* Stockton:

R. H. Stockton*

I The Secretary of Agriculture:

And your business, Mr.

Mr* Stockton:

Manufacturer of ranges for cooking*

The Secretary of Agriculture:

Mr. Stockton, you know the

iproblea that we are trying to solve, of locating—arranging
these districts and the location for a regional reserve bank?
Mr. Stockton:

I believe I do.

The Secretary of Agriculture:

We have had a great deal

of information presented by the gentlemen here. We would be
glad to have any additional light you can throw on the
Mr. Stockton:

By business, as I say, is of s^oh a nature

and of such a shape that I volunteered the information to
Mr. Watts that I thought I was prepared to come down here and
show you gentlemen the actual facts, as I noticed in yester



day 1 * papers, you were hunting for a little more detail*
I have a few maps Bhowing my businessand how these different claims are made.

Shall I show you?

The Secretary of Agriculture:


I" Mr. Stockton: Take theState of Illinois, if you please,
(exhibiting map); a little question I believe as to whether
Bt* Louie should go above Springfield.

Here is where Spring-

field is located (indicating), and here is the business I
have in that part of the State that is north of Springfield*
Each one of these tacks represent a town in which I transact
The Secretary of the Treasury:

What is the significance

;of the different colors?
Mr. Stockton:

The standing of the merchants; that is all*

The Secretary of the Treasury:
| Mr. Stockton:

Not the size of the order?

No, sir; the standing of the merchants.

I The Secretary of Agriculture:

Is the volume of your busi-

neee considerable in that north central section?
j; Mr. Stockton:

Yes, sir; the volume of business is more in

proportion there than it is her*.

There is a section of the

country right in there(indicating) that isn't very good.


Secretary of the Treasury:

Has Chicago got any com-

peting store manufacturer of similar standing and character
to yours?
, Mr. Stockton:

Not in size.

Chicago is not much of a

oarket in our line, Detroit covering the line almost entirely

in that direction.
The Secretary of Agriculture:

Have you the largest busi-

ness in this section in your line?
Mr. Stockton:

Yea, sir; I have considerably the largest!

!j The Secretary of Agriculture:

Now if you will show us

some of the other maps.
Mr* Stockton:

In tone we send one thousand and fifty-

seven tons into that state in a year.
; The Secretary of Agriculture:

Tou may show us Indiana,

llr. Stockton, if you will*
| Mr. Stockton:

Well, I donft believe St. Louis has made


much claim for instance as to Iowa.
fcess in Iowa than we do in Illinois•

We do a larger busi-


And y^u can see follow-

jlng the point you wanted to make there whether the business
(of Btt Louie covers the state or whether it might be centered at one particular point, you see we sold 1394 tons of



manufactured goods In Iowa last year.
The Secretary of the Treasury: %hat is the money value
of that about, per ton?
Mr* Stockton:

The money value is about one hundred and

fifty thousand dollars.
I have the same showing of the State of Indiana. We cover
that state pretty well*

This part there (Indicating) is a

poor country, our goods being a little high priced don*t
sell so well there. Practically we cover the territory*
Here is very little sold.
The Secretary of Agriculture:

Four hundred and fifty-

eight tons'?
Mr. Stockton:

Four hundred and fff$y-eight tons in that

The Secretary of Agria&ture: How can you show us

Mr. Stockton:

Yes, sir. You see considering the state

i of the country, in Mississippi where people are either very
rich or very poor, and I believe it isfmore so there than
j, anywhere else,~-we cover that state ****** *e#y well.



The Secretary of Agriculture:
! three tons?



One hundred and'thirty-'.




Mr. Stockton:

Yes, s i r .

i; The Secretary of Agriculture:

Could you shotl us Oklahoma.

and Texas?


Mr. Stockton:


Yes, sir. Oklahoma is I might say our

territory, of course.

It is considered really as much so

as the State of Missouri, from the ease with which we can
get in there, and being a new country we think that we do
better in Oklahoma in proportion than any state in which
we sell goods; for instance, three hundred and thirty-seven
Items of manufactured goods.
The Secretary of Agriculture:

Six hundred and seventy-

four thousand pounds?
Mr. Stockton:

Yes, sir; twanty-nine car loads.

The Secretary of the Treasury:

Show us Texas and

Mr. Stockton:

The maker of these maps had to make that

in two divisions.

This is the eastern section; the other,

however, comes on here.
The Secretary of Agrioulture:
Mr. Stockton:

That is Dallas andFt.

When you getr to the pan-handle country



you will notice it is not very much*
! The Secretary of Agriculture: One million one hundred
and fifty-two thousand pounds?
1; Ir. Stockton: Tee; five hundred and seventy-six tone.
The Secretary of Agriculture: Let us see Louisiana
now #
Mr. Stockton:

Louisiana. I don't know whether you

kentleaen are thoroughly potted in that state, but it is a
little on the order of Mississippi. There isn't many good


distributing towns, but wherewer there ie we transact business.
The Secretary of Agriculture: These are towns distributing goods?
jj Mr. Stookton: I should say wherever we ship—we ship

;everything from 8t. Louie. While I am at it it may be approp o
•to say I talked to my chief clerk this morning and I find

j*e received during the year 1913 not to exceed forty comj




plaints against delays in shipments. Our shipments don't
average—exceed an average of sixteen hundred pounds. So
we make an average of one hundred and twenty to one hundred
and forty shipments every day, and our railroad service is





eo good that we do not received on an average of over fortyClaims in a day as to delays, and most of that arises because the merchant himself attempts to route the goods,
i The Secretary cf Agriculture:

Now will you show us Kansas

and Arkansas?

Mr. StocXton:

Yea, eir»

Arkansas is, we consider, tbor-

oughly covered, except this part in here, which is the Ozark
Uountains. We shipped one hundred and fifty tons in there
>y covering one hundred and three points. But this blank
section here la where the Oaark Mountains reach into it.
The Secretary of Agriculture:
Mr. Stockton:


Kansas makes a good showing.

The Secretary of the Treasury:
The Secretary of Agriculture:

How about Nebraska?
Six hundred and thirty-

»evon thousand tone in Kansas.
Mr. Stockton:

Yes. This i the drought stricken country

Jier« (indicating), and probably always will be.
Her* are nhipnentB in Georgia, which is a strictly cotton
country; three hundred and forty-seven tons, and we oover



the country well.
The Secretary of Agriculture:

Take Nebraska.



Mr, Stockton:

Yes, sir*

The Secretary of Agriculture:
Mr. Stockton:

This is eastern Nebraska?

Eastern Nebraska*

The Secretary of Agriculture:

You cover that whole state

but especially the eastern part?
Mr. Stockton:

Yes. There is no railroad in here (indic-

This comes pretty close to the black belt, How

we cover South and North Dakota just as well as this.

I The Secretary of Apiculture:


Three hundred and fifty-


Mr. Stockton:

Yes, air.

The Secretary of Agriculture:

I thank you, Mr. Stockton.

I think that covers the section in controversy.



The Secretary of Agriculture: Who represents Little
TheSecretsry of Agriculture:

Please give your name

to the stenographer?
Mr. Favanaugh:

William M. Kavanaugh•

The Secretary of Agriculture:
Mr. Kavanaugh:

State your business?

I am President of the Southern Trust

Company, and President of the Little Rock Railway & Electric Company.
The Secretary of Agriculture: You know the problem, Mr,
Kavanaugh, that we are trying to settle, the question of
I the district and the center for a regional reserve bank*
Mr. Kavanaugh:

Yes, sir.

The Secretary of Agriculture: Will you tell us what is
in your mind - what you desire?
Mr. Kavaaaugh:

Representing the business interests, in

fact, all of the interests of Little Rock, and I believe
all of the interests of the State of Xrkansas, which are
varied, mining, ifcimber, agriculture, commercial and manufacturing, it is our belief one of the large regional
reserve banVe should be establiBhed in St. Louis, and we




want to become members of that bank*

! The Secretary of Agriculture:

Do you represent any par0


tioular association, Mr. K&vanaugh.
Mr* Kavanaugh:

I am here now as a delegate from Little

Rock Clearing House Association, which adapted a resolution*
j The Pftcretr.ry of Agriculture: Will you give us the
essence of the^e?
Mr. Kavanaugh:

These resolutions are as follows:

"WHEREAS, it is of extreme importance to the City of
Little Book and the State of Arkansas that one of the Regional Reserve Banks be located in St. Louis and that every
effort should be made to assure the establishment of an
institution commensurate with the requirements

of the

Southwestf And
WHEREAS, Little Rock is now situated in the St. Louis
banking district and it is of vital interest to the
commerce of this city and state including both trade and
agriculture that Arkansas should be in the Federal Reserve
District of the St. Louis Federal Reserve Bank, And
WHEREAS, After deducting the Hew York and Boston terrii

tcry, Ninety per cent of the banking business and commerce



of this seotion i8 tritniary to St. Louie.
NOW THEREFOHE EE IT RESOLVED, by the Little Rock Clearling House Association allied with te little Rock Commercial Organizations at a meeting held January 12th, 1914,
that we urgently recommend upon the Organization Committee
the celection of St, Louis as a location for one of the
Regional Reserve Banks and further urge upon said Committee
that Arkansas be placed in the territory of said St, Louis
Reserve Bank, and
I BE IT FURTHER RESOLVED, That Gordon H. Peay, Ed Cornish,
Sam W. Reyburn, C. A. Pratt, W. H* Fav&naugh, R. B # Duncan,
andR* E, Wait of the Little Rock Clearing House, and Geo,
R. Brown, Secretary of the Little Rock Board of Trade,
and C. C. Kirkpatrick, Secretary of the Little Rook Cham-


Iher of Commerce, be constituted a Committee to present
the foregoing resolution to the Organisation Committee and
that a copy of the resolution be forwarded to the Organization Committee of the Federal Reserve Board, Washington,

V. C.»


The Secretary of Agriculture:

There is no doubt in

your mind, Hr. Kavanaugh that Arkansas should! If possible,
have a location to the north•


Mr. Kavanaugh:

Hone whatever,

The Secretary of Agriculture: And that it should be
St. Louis rather than any other city7
| Mr. Kavrnaugh:

Yes, sir.

I The Secretary of Agriculture:

You would not loot with

favor on a district with a regional bank to the south anyway.
Mr- Kavanaugh:

No# sir*

The Secretary of Agriculture: What would be your principal objeotion to that?
Mr. Kavanaugh:

Our bistness has always been with St.

Louis. IThen we needed money for developments or in times
of distress, we have gotten it from St, Louis. St. Louis
has done more to help develop the resources of the State of
Arkansas, and is doing it now, andwe believe willcontinue
to do so, than any other city.
The Secretary of Agriculture:

What is the extent of

your business connection with Kansas City?
Mr. Kavanaugh:

Well, our grain business; the grain

is shipped from Kansas City into Arkansas; we ship
some lumber; aome fruit, and I should say a little coal
probably into Kansas City, principally.



The Secretary of Agriculture:

You would think it un-

desirable to ha~e a district made up exclusively of these
southern, or southwestern states?

!; Mr. Kavanaugh:

Yea, sir,

I The Secretary of Agriculture:

What would be your ob-

jection to that?
! Mr* Kavanaugh:

Well, our objection is that car relations


have always been to the north, have been in St # Louis.
The Secretary of Agriculture:

Would it be a self suffi-

cient area, or would It be a dependent area?
[I Mr. Kavanaugh:

Way, it would be a dependent area. The

south and the southwest havendt the capital with which to
develop the county, and conduct the business.
The Secretary of Agriculture:

You think it is necessary

to attach the borrowing and lending sections?
Mr* Kavanaugh:

Yes, sir, and one will depend upon the

The Secretary of Agriculture:

And you think you express

the sentiment of the entire state, as well as tit Clearing

I* House.


Mr* Kavanaugh: I think I do, sir. There are gentlemen
here from the largest cities in the state; Mr* Faulkner was




Ihere yesterday from Helena. Mr, Eohols is here from Ft,

jsmith, one of the beat cities in the southwest, Mr.


Landaen is here from the State National Bank of Texarkana,
and I met this morning the Manager of the largest manufacturing company, Mr. Roe, of the Cotton Mill at Monticello,
who in a director in two of the banks. I thought he would

be here, but he said he came here as a manufacturer to
urge that Arkansas be attached to St. Louis*
The Secretary of Agriculture:

You would notoare to go

to Memphis?
j Mr. Kavanaugh:

We would rather go to St. Louis, but

Memphis is our neighbor and the relation would be very
The Secretary of Agriculture:

Do you think it would be

Mr* Kavanaugh:
go to St« Louis#

We think it would be to our interest to
Mr* Reyburn is here with some statis-

The Secretary of theTreasury:

I would like to add one

or two questions, Mr, Kavanaugh:
Mr. Kavanaugh:

Yes, sir.

The Secretary of the Treasury:

To iihat extent do you



carry your reserves in St. Louie now?
: Mr* Kavanaugh:

I should say out of the reserves

parried by Little Rook 75 per cent is in St. Louis.
The Secretary of the Treasury:
Mr. Kavanaugh:

And where the remainder?

Chicago and Hew York.

The Secretary of the Treasury:

How ia the division be-

tween those two?
Mr. Kavanaugh:

I should say, judging from aty own ex-

perience, they would be equally divided between Chicago
and New York*
TheSecretary of the Treasury:
Mr* Kavanaugh:

75 per cent in St. Louis?

Yes, sir*

The Secretary of the Treasury:

Do you carry any in

[Kansas City*?
Mr. Kavanaugh:

Some of our banks do, but the institu-

tion with which I am connected

does not carry any Kansas

City account*
The Secretary of the Treasury:

Do you carry Any in New

Mr. Kavanaugh:

A small amount*

The Secretary of the Treasury:
poses •

Just for exchange pur-



Mr. Kavanaugh:

In my particular business, I am In the

treet railway business, and it is owned down there.
I The Secretary of Agriculture:

Do you say Mr. Reyburn

has something?
i Mr, Kavanaugh:

He has some statistics.

The Secretary of the Treasury:

They might be filed.

Mr* Kavanaugh: He also represents 113 banks, over the
The Secretary of Agriculture:

Suppose you just take

the chair a moment, Mr. Reyburn, and give your name and
The Secretary of Agriculture:

What is your occupation?

Mr* Reyburn, President of the Union Trust Company of
Little Rook, Arkansas.
The Secretary of Agriculture:

Do you endorse the state-

ment made by Mr* Kavanaugh?
Mr. Reyburn:

Yes, sir.

The Secretary of Agriculture:

What do you represent,

Mr. Reyburn?
Mr. Reyburn:

I.represent chiefly the banking interests.

I have been a banker all my life, and am a director in



j|a National Bank, and President and Manager of the Union
j,Trust Company.
j| The Secretary of Agriculture: Do you represent officially
any as?ociation or group?
Mr. Reyburn:

On the Committee of the Clearing/Association

{and the Commercial bodies of Little Rock to present this
I The Secretary of Agriculture: To what extent could
jyou speak for any of the banks outside of Little Rock?

;| Mr. Reyburn:

I have w wide acquaintance in the state,


having been connected with banking there for the last 20
j|years, and I think I know the sentiment of bankers and
!business men generally.
The Secretary of Agriculture: What is the nature of your
Mr. Reyburn: These are letters in reply to a letter sent
out by ue on the 13th from bankers all over the state.
The Secretary of the Treasury: Have you a copy of the
letter you eent out?
Mr. Reyburn:

Tee; it is in here in several places

where they have replied, on the face of the letter.
The Secretary of Agriculture:

What is the drift of their


i| Mr. Reyburn:

An enthusiastic endorsement of St. Louis.


if The Secretary of Agriculture: You said you had some stall
jtistica. What do they cover?
Mr. Reyburn: This what the judge referred to.
'I The Secretary of Agriculture: Will you file that as an

jexMbit to your testimony?
(The papers so identified and referred to, marked
|S. W. Reyburn1s Exhibit 1, January 23nd, 1914.)

Ur. Kevanaugh:

One reason for our preferring St. Louis

over Kansas City la the difference In time*

It i s only

ijten hours over night

from Little Rock to S t . Louis, and

from S t . Louis to Little Rook; Kansas City is eighteen
Mr. Murphy, President of one of the banks of Eldorado,
right on the Southern Line, is here.
The Secretary of Agriculture: Please give your name to
the stenographer?
C. H. Murphy.


The Secretary of Agriculture: Tour occupation?
Mr. Murphy:

Cashier Citizens National Bank, Eldorado,



; The Secretary of Agriculture:-

Do you endorse Mr,

iKavanaughfs representation?

I Mr. Murphy: Yes, sir; and all of our business trend is
jjto St* Louis, and the state line, the politick line,
fia the commercial line*

The Secretary of Agriculture: You are on the southern


Mr. Murphy: Yes, sir* Eldorado is the county seat of
Union Cpunty, and the southern boundary of Union County
is Louisiana.

The Secretary of Agriculture: Do you carry accounts

in St* Louis?
Mr* Hurphy:

Yesf sir, we carry accounts in Little Bock,

St. Louis and Chicago*
The Secretary of Agriculture: -Any in Kansas City?
Mr* Mprply: No, sir, nine whatever*
The Secretary of Agriculture: What percentage do you
carry in St. Louis.
Mr* Murphy: We carry about 10 per cent in St. Louis
and the balance in New York*
The Secretary of the Treasury:

You are a National Bank



do you say?
Mr. Murphy:


Our balances are created from the

sale of lumber and cotton, and the pay roll checks
from the Iron Mountain and the Book Island, and nearly
all of that i » P « is payable in St. Louis, and, I felt,

! being right on the southern boundary of the state, if
j New Orleans was made a reserve center, and if we were put

I with New Orleans, it would be an artificial placing, and
if we were put with St. Louis, why, it would flow with
the trade and the way the exchanges all move.
The Secretary of Agriculture:

I think that is sufficient


Cairo, Illinois, Mr* Laneden.

The Secretary of Agriculture: Will you give your full

name and your business.
fir. Lansden:

David S. Lane den, I am Director of the

Alexander County National Bank at fiairo, and I appear for
all of the banks in Cairo, and the Cairo Commercial Club,

which is the business organization of that community.
The Secretary of Agriculture: Have you any resolutions?
Mr, Lansden:

I'think the resolutions adopted by the

Commercial Club have already been presented here.

I have



a copy*
The Secretary of Agriculture:
Mr. Sansden:

I do not recall them.

Well, they were sent to the Business

ken's League, and I suppose they were presented yesterday.
Mr. Wade:

They were filed with the others.

Mr. Lansden:

The resolution was simply to the effect

that we believe a reserve bank should be established in
St. Louis, and that we believe Cairo and the greater part
of Southern Illinois, in fact, all of Southern Illinois
should be in the St. Louis district.
The Secretary of Agriculture:

How far north?

Mr* Lansden: We have drawn a line across the State of
Illinois on this map, which indicates our judgment
as to that part of the state which should be included in

i the St. Louis district, which line leaves all of the
State for the Chicago district except 38 counties, in
the southern part of the state*
The Secretary of Agriculture:

On what basis did you

make that division?
Mr. Lansden:

On this basis:

I find upon examination

of bank directories, that it appears that every bank in
all the county seat towns in each one of the northern


,' tier of counties follow that line for business in St.
I Louis and keep accounts here, and every one of those

|| places can e a s i l y be reached by railroad from St. Louie„
|| None o f them are over 1 5 0 milee from S t . Louis*

Speaking for Cairo, particularly, I would say this,
| we have two National Banks there, both of which have al|; ready adopted resolutions to go into the system, and we


have two state banks that have not yet acted upon the
question, but our exchanges,between the banks, and our

| community are settled almost entirely by drafts drawn

on their St. Louis Correspondents*

The course of business

i for our part of the state is much more towards St. Louis
| than towards Chicago•

In fact, there is as much business

I from our part of the state with 8t. Louis as with Chicago
and New York put together, almost twice as much*
The Secretary of Agriculture: What percentage of your
accounts is kept in St. Eouis?
Mr. Lansden:

I am not able to give you the exact figures,

but the gentlemen who are with me here from the banks
have stated it is considerably more than half of the
The Secretary of Agriculture:

What else do you keep



Mr, Lanoden:

The Alexander National Bank keeps two

accounts in St. Louis, one in Chicago, and one in New
York; the Cairo National Bank keeps accounts in New York,
Chicago and St. Louie, and small accounts in Louisville
and Memphis; the First Bank & Trust Company keeps
accounts in Chicago, St. Louis, New York, Louisville,
and New Orleans.
The Secretary of Agriculture:

You have no doubt that

you express the sentiments of the business men and bankers of Cairo?
Mr. Lansden:

I have no doubt at all of that*

The Secretary of Agriculture:

Will you mark this ex-

(The map so identified and referred to, marked
D. S. Laraien1* Exhibit No* 1, January 33nd, 1914.)
The Secretary of the Treasury:
choice for a bank?

Have you any second

Suppose you were not attached to the

St. Louis district, where would you want to go then?
Mr. Lansden:

We would have to go to Chicago then.

The Secretary of the Treasury:

That would be the next,


Mr* Lansden:

That would be our next choice• Of

course9 we are in Illinois, and we have the same amount
of State pride that ordinary people have, "but in this
case the convenience and course of business is towards
St. Louis*
The Secretary of Agriculture: Mr. Hinchey.
The Secretary of Agriculture:

State your name and

occupation, please*
Mr. Hinchey:

A. H* Hinchey, Cape Girardeau, represent-

ing the Southeast Missouri Federation of Commercial Clubs.
The Secretary of Agriculture: What do you desire to
present to the committee?
Mr. Hinchey:

Well, Mr. Secretary, I represent the

commercial organizations of twenty counties in Southeast**
ern Missouri; not only the commercial organizations but
district organizations of otherprofessions and callings•
We held our annual meeting Monday, at which there were
500 delegates, business men of Southeast Missouri, representing the 20 counties in Southeast Missouri, and tfrere
were visitors there from three of the towns in tfortheastern Arkansas who participated in our meeting as visitors



and endorsed this movement*

There was a resolution

unanimously paeaed by this meeting endorsing St. Louis
|i for one of the regional banks and asking that it be done.

The Secretary of Agriculture: Have you a copy of that?


Mr. Hinchey:


I have the resolution,



The Secretary of AgricultureJ Will you file that and


\ make it an exhibit?

Mr* Hinchey:

Yes, sir*

(The resolution so identified and referred to, marked
A. H. Hinchey18 Exhibit No. 1, January 33nd, 1914,)
Mr. Hinchey:

I would like to state, Mr. Secretary,

: that the part of the oountry I represent is in the center
of the Mississippi Valley and it is one of the most
rapidly growing parts of the Mississippi basin, and I
represent a country down there that has done a great deal
in development in the past two or three years by its
own resources. We have expended $15,000,000. for drain/age work, and we are now expending 15,000,000. more of
our own money. We have the largest railroad mileage of,
any rural district in the United States, and we want to
build move, and want to develop more; and we feel that St.
Louis will be the beet place for us to look for our finan-



cial assistance.
The Secretary of Agriculture: What percentage of your
business would you say would be with St. Louis?
Mr. Hinchey: Practically all of it.
The Secretary of Agriculture:

You would have no second

Mr, Hinchey:

No thought for any other place.

The Secretary of Agriculture r And that is true of
your 30 counties?
Mr. Hinchey:

That is true of the 30 counties.

The Secretary of Agriculture:

Well, I think that is

The Secretary of Agriculture:

What section do you

represent, Mr, Abell?
Mr, Abell:

Paducah, Kentucky Clearing House.

The Secretary of Agriculture:

And will you tell us

what Is in your mind in this connection?
Mr. Abell:

Well, our sentiment in Padaoah is unani-

mously in favor of a federal reserve bank in Eouiaville,
if that is possible. Seventy five per cent of our checks,
I think, are cleared through Louisville; fifty per cent of



our reserve, I think, is carried there. Next to that,
we would favor St. Louis from a geographical standpoint,
and I think it comes second in business.
The Secretary of Agriculture:

Do you know what per-

centage of your reserves are carried In St. Louis?
Mr. Abe11;

Well, roughly speaking, I have it 30 per-

cent, although I have no statistics.
The Secretary of Agriculture:

Your first choice then

is for Louisville?
Mr. Abe11:

Yes, sir.

The Secretary of Agriculture:

Your second for St.

Mr. Abell:

Yes, sir, we have about $1,500,000 banking

capital in Paducah, deposits of about $3,500,000. The
City is about 30,000 population.
The Secretary of Agriculture:

Do you have any

reaolutlons to present?
*v Ur* Abell:


I have not*

The Secretary of Agriculture:

Has your Clearing House

taken action?
Mr. AUL1: Well, an informal meeting.
The Secretary of Agriculture:

Do you represent the



Clearing House?
Mr* Abell:

Yes, sir, I am a delegate from them.

The Secretary of Agriculture:- You can officially
speak for them.
Mr. Abell:

Yes, sir.

The Secretary of the Treasury:

That is the sentiment

of the clearing house?
Mr. Abell:
yes, sir*

That is the sentiment of the clearing house,

Mr. Paxton is also here from our city.

TheSecretary of Agriculture: And he endorses your
Mr. Abell: Yes, sir; and he is much older in the banking business.
TheSecretary of Agriculture:

All we want is the sen-

timent of the people, and that will be sufficient?
Mr. Abell: Yes, sir.
The Secretary of Agriculture: Thank you, Mr. Abell.
Mr. Echols of Fort Smith,
The Secretary of Agriculture: Will you tell us what
you represent, Mr. Echols?
Mr. Echols:

President of the Merchants National Bank,


Fort Smith, Arkansas.
The Secretary of Agriculture: Do you represent any
Mr. Echole:

Tee, sir; I represent the "banks of the

Fort Smith district, about 83 banks«

I bear requests

from the 88 banks that St. Louis be made the regional
reserve for that district.

That was filed here yester-

day •
The Secretary ot Agriculture: Have you a Clearing
Mr. Echole: tfo, sir.
TheSeoretary of Agriculture: What percentage of
the banks do these 88 banks represent?
Mr, Eohols: That is more than fifty per cent of the
banks doing business in Forth Smith; about seventy-five
per cent of them.
The Secretary of Agriculture/
speak officially for them?
Mr. Echolls:

And you think you can


Yes, sir, /

The Secretary of Agriculture: What percentage of
your business do you think is done in St. Louis?
Mr. EchoIs:

1 should say 50 per cent.



The Secretary of Agriculture: And Kansas City?
Mr* Eohole:

About 30 per cent; the balance in New

York and Chicago*
The Secretary of Agriculture: You are closer in a
banking and industrial way to St. Louis than to Kansas
Mr. Echo Is:

V^Ty much, yes, sir*

The Secretary of Agriculture:
thank you very much*
Evansvilie, Indiana, Mr* Rels.

I think that Is all,



The Secretary of Agriculture: Please state your full
name and occupation to the stenographer, Mr* Reis.
Mr. Reis:

Vice President of the Evansville Clearing

TheSecretary of Agriculture:- Do you officially represent the Clearing House?
Wr. Reie:

As Vice President and also President of a*

| bank there - Vice President of the Evansville Clearing
House - we wish to pay our respects to the Honorable gentlemen and give our assurance of loyalty to the Federal Reserve
Act and our desire to support it*
- We are located on the Ohio River. Kentucky is opposite
us and Illinois on the right*

We do business with the

three states, Indiana, Illinois and Kentucky*

The banks

at Evansville have about three hundred correspondents in
that section so that we are a money center, and when the
people in that section want anyaanooamodations, of course
they do not think of going to the larger cities, they comt
to Evansville, where we are glad to take care of them*
we really need down there later on, when the proper time
comes, is a secondary regional bank*
The Secretary of Agriculture:

Do you mean a branch?





Mr. Reis: A branch bank. We hope to be honored with that

later on when the proper time comes*
1 have a little information here, if you will allow me to
read a few words*

It will not detain you but a few minutes,.

"Evaneville has thirteen banks and trust companies with
total resources of approximately $37,000,000.00, so ably
managed that there has never been a failure. At the close
of 1913 Evansvilie ranked 58th among 134 of the largest
cities of the country in bank clearings and in population
it was 80th, in accordance with the United States census
of 1910, which was 69,647. Based on the city directory
for 1913 the population is 89,105.
"The bank clearings of 1913 as compared with those of
1903 showed a gain of 133$.
"The clearings for 1912 were $136,976,000.
"The clearings for 1902 were I 57,091,041.
"The following comparative statement of the bank clearings
of cities of about the same rank as Evansvilie clearly attest
the claim that this /city in proportion to population, is amon
the best commercial and manufacturing centers in the United
There ia some other information, arid some resolutions here



1 I would be glad to submit.
The Secretary of Agriculture:' Just read the resolutions,
will you?
Mr. Reie:


At a meeting of the Evansvllle Clearing House,

duly called and held on the 14th day of January, 1914, the
following resolution was offered, seconded and unanimously
I; adopted,


"WHEREAS, The Bankers of Evansvilie believe that the

| Federal Reserve Act is based on fundamentally sound principles, and, If met in a spirit of earnest co-operation
by the bankers of the country, has in it the possibilities
of much good and, believing that the Interests of this
community and of the adjacent territory, of which it is th*
financial center, can best be served by the inclusion of
the City of Evansville in the geographical limits of the
district to be served by a Federal Reserve Bank in the
City of Chicago,
*And WHEREAS, the Organization Committee named by Congress is about to meet in the City of Chicago for the
purpose of conferring with bankers in the Middle West
relative to the establishment of a Federal Reserve Bank in

said district.


"NOW THEREFORE BE IT RESOLVED, that the President of the
Evan8ville Clearing HouBe Association be and he hereby is
authorized to convey to the Honorable William G. McAdoo,
Secretary of the Treasury, and to his associates on the
Organization Committee, the assurance of the loyal and
earnest support of all the banks in Evansville to the end
of achieving the best obtainable results for the banks,
for their communities and for the country under the new
banking and currency measure»
"AND BE IT FURTHER RESOLVED, That the President of this
Association be and he hereby is authorized to respectfully
request that, in the event of the establishment of a Federal Reserve Bank in the City of Chicago, the geographical
confines of the district to be served by it extend southward
at least as far as the Ohio River and that such confines
may include the City of Evansville and adjacent territory•
•AND BE IT FURTHER RESOLVED, That this Association ex*
press the hope, through its President, to the Organization
Committee, that, in the successful working out of the
Regional Batik plans, it may be deemed expedient to establish
branch banks in such Regional Reserve Districts, the City
of Evansville may be chosen as the location for a branch



bank to serve the communities of Southern Indiana, Southern
Illinois and Western Kentucky, of which territory it is the
recognised financial and commercial center.»
The Secretary of Agriculturer

Will you file those as an

exhibit la your testimony•
Mr. Reis:

Tee, sir*

(The statement and resolutions so Identified and referred
to were marked Henry Reis, Exhibit No* 1, January 32, 1914*)

The Secretary of Agriculture: Why did you not present

[ that in Chicago?

Mr* Reis:

I think it was forwarded prevately to the


jj Honorable Seoretary and perhaps not delivered, so it was
deemed best to come here with it as the proper place.
The Secretary of Agriculture: Have you any second choice?
Mr* Reis:


St. Louis•

The Secrnt4ry of Agriculture: What percentage of your
business is done with Chicago and what percentage here?
Mr* Reis:

I think about four or five times as much in

Chicago as we do here*
The Secretary of Agriculture: Would that be true of the
banks there generally?
Mr* Reis:

I think BO.



The Secretary of Agriculture:

Your first choice then is

to be attached to Chicago and your second choice to St.
Mr* Reis:

Yes, sir.

The Secretary of Agriculture:
Mr* Reis:

How about Louisville?

We have not so much with Louisville as with

St. Louis•
The Secretary of Agriculture:

Your city is industrially

in closer touch with Chicago?
Mr. Reis: Yes, sir.
The Secretary of Agriculture:

What is the difference

in time?
Mr. Reis: The distance to St. Louis is very much shorter,
but still our business seems to drift towards Chicago.
The Seoretary of Agriculture:- Suppose Evansville were
attached to a bank here, if one were established here,
would it cause any serious inconvenience of disturbance?
Mr. Beis:

I think not, sir. We can adjust ourselves

to any change that is made and we oan be perfectly happy

in St. Louis if we 4o not get Chicago.
The Secretary of Agriculture: Thank you.
Quincy, Illinois, Mr. Winters or Mr. Pearce.



The Secretary of Agriculture:

State your full name to

the reporter.
Mr. Winters:

J. tf. Winters.

The Secretary of Agriculture: What do you represent?
Mr. Winters:

The Quincy National Bank, and Mr. Pearce

is here for the Bicker National Bank, the only two national
banks in Quinoy.
The Secretary of Agriculture:
Mr. winters:

Yes, sir.

The Secretary of Agriculture:
Mr. Winters:

There are two?

How many state banks?

Four, and one private bank.

The Secretary of Agriculture:

Do you speak simply for

your bank?
Mr# Winters:

I apeak for our bank and Ricker Bank and

for the Mercantile Trust and Savings Bank directly; I have
an expression from the State Savings Loan and Trust Company*
The Secretary of Agriculture:

And what do you desire to

Mr. Winters:

We desire to be attached to the St. Louis

district, believing that our interests are materially with
that city.



The Secretary of Agriculture: To what extent do you think
you can apeak of the business interests, the business men,
merchants and others?
Mr, Winters:

Decidedly, sir, in the same favorable manner*

Quincy is a large manufacturing and trading point, the .
largest, I believe, between St. Louis and Chicago*

We are

130 miles from St. Louis and 260 miles from Chicago, and the
manufacturing and trading interests of Quincy have spent
many years In developing a trade that is largely with the
West and Southwest. The Items that come to Quincy banks
are at least two-thirds cleared with St. Louis and Kansas
City as against one third with Chicago*

The volume of that

business is pretty hard to estimate, but as an indication,
the local clearings of the banks there are in excess of
$75,000,000 a year. There are five lines of railroad extending out of Quincy into the West and Southwest, and along
those lines of railroad there are more than one hundred
banks that have Recounts and direct connections with the
Quincy banks*


The Secretary of Agriculture: • Do you know whether there
are any banks at Quincy that want to be attached elsewhere?
Mr• Winters:

I do not, sir.



The interests of the banks to my. mind are directly with
this district.

The banks in Missouri contiguous to us there

have been for years carrying their accounts with us; they
have been borrowing money from us, and they have been selling securities to us* Now, I think the most important
reason of all is that Quincy banks have banking resources
of at least flSjOOOjOOO.

More than half of that must go

outside of its immediate territory for Investment*

We have

cultivated the West and the Southwest for our investments
and we believe it Is very Important to us that we be in
the same district to make that relation closer and stronger
and better for our advantage, and for the territory that
we have heretofore served•

We feel that if we were out off

from this West and Southwest district it would be almost a
calamity to us.
The Secretary of Agriculture:

What percentage of your

resources are carried here?
Mr* Winters:

With ourselves at least two-thirds*

The Secretary of Agriculture:

Where else do you carry

Mr. Winters:

At Chicagj we carry nominal amounts at

New York.
Secretary of Agriculture:

I think that is sufficient.



Mr. Winters.
Do you think, Mr. Winters, that Mr. Pearce has anything
to add, or just to endorse your statement?
Mr. Winters:

Well, I do not know.



The Secretary of Agriculture:
Mr. Pearce:

What do you represent?

The Picker National Bank,

The Secretary of Agriculture:

What are your views of the

Mr. Pearce:

My views of the matter are that it would he

very much to our interest to toe connected with the St.
Louie district, from the fact, as already stated to you by
Mr. Winters, that we have quite large manufacturing interests that have spent years in building up a trade in the
South and Southwest, from the fact that the Missouri territory, if a reserve bank were established In St. Louis,
would very probably immediately west of us be attached to
St. Louis, that is, the Missouri part of our correspondents
and our trade is more than half, 1 think, west of us in
Missouri. The tendency up east and north of us la to go to
Chicago for their clearings and their correspondence.

There is one other matter which I believe Mr. Winters did



not speak of, and that is the law providing that national
banks may loan upon real estate and the line which would
come though would cut very close to us, we presume. If
we were in the Chicago district we would probably be cut
off entirely on the west.

As I understand the law the

national banks are not allowed to loan except upon real
estate within the reserve district in which they may be

That would out us off from the immediate terri-

tory that would naturally belong to us and T?ith which we are
most familiar and that we are best situated to serve* Were
It not for that line which might out off there I presume
that we could be very well served by either the Chicago
or St, Louis district, although preferably the St* Louis

If I remember, reading the law, it provides


they can only loan on real estate within the reserve
district in which they are situated.

This line coming

through, if we are put into the Chicago district, would
undoubtedly follow the Mississippi Biver past Quincy, which,
as you know, is located on the Mississippi River and would
cut off the territory west of us entirely•
The Secretary of Agriculture:

That is where your relations

would naturally be?

Mr* Pearce:

That is where our relations are fully one-



half, or more than half.

If that line were left out of the

question I think we could be served very well by either district, but preferably by the St. Louis district.
One thing Mr. Lansden said, if it is permissible, he
would like to change his map that he put in here to Adams
and south of Adams instead of Pike.
The Secretary of Agriculture:

Will you just take the map

I and change it*
Thank you very much, Mr. Pearoe.
Mr. McNally.
The Secretary of Agriculture:

Give your name to the steno-

Mr* McNally:

R. F. McNally.

The Secretary of Agriculture: What do you representT
Mr. Nally:

Cashier of the Citizens1 national Bank,

Chilllcothe, Missouri.
The Secretary of Agriculture:

Do you represent any group

or Association?
Mr. McNally:

I am the representative of our clearing

house association.
The Secretary of Agriculture:



Mr. McNally.



The Secretary of Agriculture:
Mr. McNally:

You have no resolutions?

No resolutions.

The Secretary of Agriculture:

How do you speak for the

clearing house?
Mr* McTTally:

Well, in this way, that in regard to the

proposition recently advanced by St. Joseph I believe, to
put cur section of north Missouri in the Chicago District,1
that we are opposed to it. The position of my bank is that
we prefer to be in the St. Louis district, because we handte
tfcegreater part of our business from there*
The Secretary of Agriculture:
Mr. McRally:

What about Kansas City?

Kansas City is mostly our shipping interest;

the hogs and cattle go there, and the grain down to St # Louis
The reserve accounts are distributed, from what I can learn>
about equally between the two cities • Practically every
bank in northwest Missouri has a St. Louis account as well
as at Kansas City.
The Secretary of Agriculture:

You are very much nearer

to Kansas City?
Mr. McNally:

Eighty-five miles from Kansas City and

225 <£?OB St. Louis.
The Secretary of Agriculture:

Row many banks are there?


Mr. McNally:



The Secretary of Agriculture:

Do you think you state the

preference of all of them?
Mr. McNally:

No, not in regard to between St. Louis and

Kansas City, I do not.
The Secretary of the Treasury:
Mr. McNally:

How about Chicago?

As toChioago I think I do. We have very

few relations with Chicago.
The Secretary of Agriculture:

Suppose a bank were estab-

lished at each place what would be your preference?
Mr. McNally:

Well, for neighborly, sentimental reasons

1 think the preference would be with Kansas City.
The Secretary of Agriculture:

What would be the trade

Mr. MoNally:

The balance of trade, if you couftt the dry-

goods and the shipping interest, the balance of trade is in
favor of St. Louis, outside, of course, of the live stock
and hogs.
The Secretary of Agriculture:

Could you give us any ex-

pression from all the banks of their first and second choice?
Mr. McNally:

Well, I think that from our immediate vicin-

ity the first choice, for the reasons given, will be for



Kansas City, but my own preference, however, is for St.
Louie, but there is one thing that must be remembered, in
our part of the state very few banVs will be eligible to
enter this system because of capital requirements.
The Secretary of Agriculture:

Is youra a national or a

state bank?
Mr. McNally:

National bank.

The Secretary of Agriculture:

How many of the banks

there ore national?
Mr. McNally:


The Secretary of Agriculture: How many of the state banks
do you think would take steps to enter the system?
Mr. Mortally:

In our county out of about fourteen state

banks there is only one state bank eligible to enter the
reserve bank system, and I do. not think it is going to enter.
The Secretary of the Treasury:
Mr. McNally:

Eligible for that reason?

Because of capital requirements, at Shula,

a little town.
The Secretary of Agriculture:

Do you know the preference

of the other national banks?
Mr. McMally:

I talked to them before I left. It did not

have any decided preference but rather inclined towards



Kansas City because they knew the people up there a little
The Secretary of Agriculture:

How many state banks in

your section do you say would probably be eligible?
Mr. McNally:

In our county out of fourteen - either

thirteen or fourteen, and I think it is fourteen, one is
eligible, and I have polled them indirectly and I know of
none that intends to comply with the capital requirements.
Only one state bank in our section, our county and the
adjacent counties, only one have adopted resolutions to join
the system, that is the Carrollton State Bankoof Carrollton.
That is the only one so far as 1 can learn.
The Secretary of Agriculture:

Thank you, Mr. McHally.

Mr, Hinton of Bnnibal*
The Secretary of Agriculture:

Give your name to the

Mr, Hinton:

James P. Hint on.

The Secretary of Agriculture:
Mr. Hinton:

What is your occupation?

Cashier, Hannibal National Bank, Hannibal,

The Secretary of Agriculture:

What do you represent, Mr.


Mr. Hinton:

I represent the clearing house of Hannibal.

The Secretary of Agriculture:
Mr, Hinton:


Officially; and the Commercial Club*

The Secretary of Agriculture: And what do you desire to
Mr. Hinton:

Well, we want to be in the St. Louis district

While officially I cannot speak for our entire district,
I would like to state that the First Congressional District,
comprising ten counties of northeast Missouri, in which we
are located, doea four-fifths of its business with St.
Louie. Out of 140 banks with a capitalization of three and
a half million $3,100,000 does its business with St. Louis,
The Secretary of Agriculture:

That district extends to

the northern border?
Mr, Hinton:

To the Iowa line, yes, sir; the ten counties

In northeast Missouri.
The Secretary of Agriculture:
goes to Chicago?

What part of that business



Mr. Hinton: Well, to be exact, 24 of the 140 banks
have accountfl with Chicago and not with St. Louis.
The Secretary of Agriculture: Hot at all with St.
Mr. Hinton:


The Secretary of Agriculture: How many with St. Louis
and not with Chicago?
Mr. Hinton:

Oh, 50 or 60. Ninety six have their prin-

cipal accounts with 8t. Louis; 30 of the banks do not have
accounts with either city, but clear through larger banks,
like our own and those of Quinoy.
The Secretary of Agriculture: Do you know how many
of the banks there are National?
Mr. Hinton: No; I do not; I should say not to exceed.
10 in that entire district.
The Secretary of Agriculture: What would be their relations?
Mr. Hinton: ; Tnelr relations would be entirely with St.
Louis, I should say. Our own bank is a National BanV, and
we keep at least 50 per cent of our reserve in St. Louie,
about 33 per cent in Chicago and 35 per cent in New York,
but we clear at least 75 or 80 per cent of our items in



St. Louis, ao that our active business is very much larger
with St. Louis than with both of the other cities.
The Secretary of Agriculture: Tou heard the suggestion
from Quinoy that on account of this provision for lending
to a certain extent on lands, that it would be unfortunate
to be included in the northern district?
Mr. Hinton: Well, it would affect us if you cut out
any portion of Missouri and Fut it in the northern district,
If you put us in the northern district, it would very
seriously affect us, not alone the banking conditions
as between the two cities, but the nail faoiiitiee are such
between Chicago and Hannibal it would be impossible for us
to handle our business with any satisfaction.
The Seoretary of Agriculture: You think the entire
seotion ehould come into this district rather than Chicago
if those two districts are oreated?
Mr. Hinton:

I think there is no question about the

greater proportion of the banks keeping their accounts,
voluntarily with St. Louis, and it is evident that if
a vote should be taken, all of the banks to the Iowa line
would prefer St. Louis.
The Secretary of Agriculture: Have you any resolutions



to offer?
Mr. Hinton: Well, the resolutions of the Commercial
Club have been filed through the Committee of the St.
Louis Associations.
The Secretary of Agriculture: Is there any other fact
j that you desire to bring out?
Mr. Hinton:

Nothing else, sir.

The Secretary of Agriculture: TJmk you very nruoh.
Mr. Trimble, of Russellville, Indiana.
The Seoretary of Agriculture: What is your occupation?
Mr. Trimble:

I am a lawyer, director of the Citizens

National Bank of Russelville, Kentuoky.
The Secretary of Agriculture: Just where is that?
Mr. Trimble: That is in southwestern Kentuoky, near
the Tennessee State Line.
The Secretary of the Treasury: How far from Cairo,
ttr. Trimble:

It is quite some distance. I live in

Hopkinsville, Our banking connections are almost altogether
with Louisville, Nashville and New York. Of course, we
would much prefer to be in a Louisville District if Louie




ville can get it. We would next prefer to go to Nashville
if there is any possibility of Nashville having it, but
we do not want to be with Cincinnati. We would muoh


prefer to be with St. Louis rather than Cincinnati, because we have no business connections with Cincinnati,
or the Cincinnati banks, while we have some connections
with St. Louie, I think there is not much connection between
our section and St. Louis, The connection between St.
Louis and our section now is in a business way; the financial connections all go east.
The Secretary of Agriculture: How do you explain that?
Mr. Trimble:

I suppose we are better known there; it has

been the rule always that accounts have been kept in

and New York but St. Louis now sells a great

deal of merchandise in our country, and we have business
relations with thea in that way.
The Secretary of Agriculture: Do you keep accounts
in Louisville?


Mr. Triable: Yes, air.
The Secretary of Agriculture:

Do you get interest?

Mr. Trimble; Yes, s i r .
The Secretary of' Agriculture: What per cent?


Mr. Trimble:


Two per cent; 1 think i t i s .

The Secretary of Agriculture:

What aTaut check collect-

Mr. Trimble:

They go through Louisville.

The Secretary of Agriculture:
Mr. Triable:


Yes, s i r .

The Secretary of Agriculture: Would it do any violence
in your Judgment to your peoples interests there if you
were awarded to a reserve bank in St. Louis?
Mr. Trimble: Well, I hardly think so, but, of course,
we would very much prefer to be in Louisville.
The Secretaryof Agriculture: Loiisville is your first
Mr. Trimble: Yes, sir.

The Secretary of Agriculture: Nashville your seoond?
Mr. Trimble:

Yes, sir.

The Secretary of Agriculture: Thank you.
Mr. Francis:5' Mr. Secretary, here is a resolution just
handed me with the request that I file it with you.
The Secretary of Agrioulture: Will you incorporate
that in the record?
(The resolution so identified and referred to, marked

Exhibit 1, January 22nd, 1914.)



The Secretary of Agriculture: iMr. Kemper, of
Collinaville, Illinois.

The Secretary of Agriculture: Give your name to the
reporter, Mr. Kemper?
Mr. Kemper:

W. L. Kemper, Collinaville.

The Secretary of Agriculture: Juat where ia Collinsville located?
Mr. Kemper:

Juat acroas the river from St. Louie .

The Secretary of Agriculture: Have you a resolution?
Mr. Kemper:

I have a resolution from the Improvement

Association of Collineville.
The Secretary of Agriculture: Do you pre«ent this?
Mr. Temperf

Yes, sir.

The Secretary of Agrioulture: Endorsing St. Louie?
Mr. Kemper:

Aa a center.

The Secretary of Agriculture: Will you attach that to Mr,
temper's testimony?



(The resolution so identified and referred to, marked
Kemper'a Exhioit No. 1, January33nd, 1914.)
The Secretary of Agriculture: Do you desire to add
anything to that?



Ur. Kem^ex:


Ko, sir; except the natural flow of bus-

:. iness is to St. Louis, and, of course> any other city,

Chicago, or any other, would greatly inconvenience us.
The Secretary of Agriculture:

You are economically

i a part of this city?
Mr. Temper:

Yes, sir, we are only an hour's ride

: from the city.


The Secretary of Agriculture:
sufficient, Mr. Kemper*

I think that will be

! WEH


The Secretary of Agriculture: Well, will you give your
name and business?
Mr. Paxton: W. F. Paxton, president of the Citizens
Savings Bank, Paducah, Kentuoky.
The Secretary of Agriculture: What do you desire to
present to the committee, Mr. paxton?
Mr. paxton: Hoth.lng in particular, except say that
following the line of railroad travel Louisville is the

most convenient place for a regional bank for us; after


that we prefer St. Louis. That was the action of our—
The Secretary of Agriculture: That has all been presented here, I believe.
Mr. Paxton: Tea.
The Secretary of Agriculture:
Mr. paxton:

Tou have nothing to offer?

Ho, s i r .

The Seoretary of Agrioulture:

Mr. Paxton endorses the

request that Louisville be given first consideration and
St. Louis second*



The Secretary of Agriculture:

How are there any other

gentlemen here that desire to he heard on this teubject,
gentlemen who represent other communities who can add anything to what we have?

Mr* Leonard:

I would be glad to be heard on this one

The matter has come up here that no bank can loan

on real estate outside of their district, which I guess is
Mr. Secretary of the Treasury:
Mr. Leonard:

That is true.

As testified yesterday theOklahoma

district has been financed for internal improvements by
St. Louis. Now if these trust companies of St. Louis, whi<b
I am not informed, should go into this regional bank we
would be absolutely cut off. Kansas City has not financed
our Internal improvements—
The Secretary of agriculture: Well, the provisions of

the act—


The Secretary of the Treasury:

The provisions applies

only to National banks/
Mr. Leonard: Well, %;«ould It apply to a state bank If



it joined the association?
The Secretary of the Treasury:

Yes; it would apply to

a state bank if it joined the association. They can only
loan money on real estate within the Federal reserve district in which they are. My understanding is that a number
of these banks in St. Louis expect to join—that is, the
state banks and trust companies.
The Secretary of Agriculture: That applieB only to a
national bank.
The Secretary of Treasury:

Oh, I believe you are right.

That applies only to a national bank.
The Secretary of Agriculture: The provision applies
only to national bank associations, those not situated in
the central reserve city, on farm land situated within its
Federal reserve dietriots.
Mr. Leonard:

Well, that would not affect us any.


Mr. Landsene:

I would l i k e to ask one question.


has been decided, i f anything, as to the time within which
a s t a t e bank may apply Ifpr membership in the Federal
reserve or pass the resolution to become a membert



is, must they act within sixty days?

The Secretary of Agriculture: No limit on the state

j banks.

Mr. Land8ens: The reason I ask it the paragraph of

j section 3 of the law says that national banks are required,

and every eligible bank in the United States is authorized
within sixty days.
The Secretary of the Treasury: Yes.
Mr. Landsans: Now does that limit—
The Secretary of the Treasury: There is a subsequent
provision which permits state banks to apply at any time.
Mr. Landaens: At «ny time.
The Secretary of Agnoulture: Is there any other gentleman that desire to contribute anything to this hearing?
If not the hearing will close.

Mr. Francis: A question, Mr. Secretary. The gentleman
just read where a national bank is compelled to come in
within sixty days. There isn*t any time fixed for a state
bank or trust company to enter the system. But can this



Committee give us any information as to how a state bank or
trust company will have a voice in the organization of the
reserve bank?
The Secretary of the Treasury:

They will have to be-

come members of the regional organization inorder to have
a voice in the selection of directors. National banks
have sixty days within which to accept the provisions of
the Act.

Within thirty days after the organization oommitt-

ee has laid out the districts and located the headquarters
of the ban}:s the national banks and the other banks which .
have signified their acceptance of the provisions must subscribe to the stock. How after that the organization is
effective; the banks are organized.

If the state banks

come in within that time they participate in the selection
of directors.
Mr. Francis:

Come in within thirty days after the

Federal Reserve Board have located—
The Secretary of the Treasury:
Committee makes thedecisions.

Thirty days after the




Mr. Jennings:

I would l i k e t o ask i f the twenty-five

;J per cent clause to a national bank on real estate applies

to the state banks, too?
The secretary of the Treasury:

The Committee does not

desire tc give any formal ruling on that, but it is a
matter that the Board, when organized, will rune on; but I
should say that—simply say informally—that that has
application only to national banks*
The Secretary of Agriculture:

If there is no other

gentleman who desires to be heard the hearings will close,
(Whereupon, at 11:55 AJf., the hearing was adjourned to
meet in Kansas City, Missouri, January 33rd, 1914•) ,