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THE RESERVE BANK
ORGANIZATION COMMITTEE

* FEDERAL RESERVE DISTRICT DIVISIONS AND LOCATION




OF FEDERAL RESERVE BANKS AND HEAD OFFICES*

San Francisco. California.
February 3, 1914.

3**

2883

3*h Frenelsee, Cal., Feb. 2, 1914.
^et pursuant to adjournment at 10:00 '. * .
*
2R^3^NT:

MIL?0g 3. -?SB?3S, (ian yr3Bn^sc^, fal.)

j!
}
!

W^LTOK R. nD9?^, (3aa Francisco, Cal.), appearing
far the Ran Traneiaco Chanbar of Commerce.
C. ?. * i ? ' 0 T , 71 ca President Bank of California ..
*T?TS!
JAMR3K. LYXC^, First National Bank of Ran Prancisao,

i appearing for the Urn Frunelsno Cle^rinc Honse /ssociptlon.
j
j
j

F. ' . LI?***;;, vice President Wella Farao Nevada Nat,

ional Bank.
W3S?INGT0N D0P3T, 'nglo & London, Paris, National
Bank, appearing for the 3an Francisco Clearing Honae eaamitteei
W. W. PHIU;IjrS, (Preano, Cal.) appearing for the
Fresno County ChB&ber of Commerce.
H. P. LILI^KTRAL, -Anglo California Trust Company,
3aa Francisco. Cal. appearing for the Anglo California
Ttust Company.




jew

2884

A. 3BA3B03ft, (San Francisco, Cal.) appearing for
the Italian-American Bank.
A. 7. THOMPSON, (Can Francisco, Cal.) appearing for
the General ^lectric Company.




€"3^"^ P.

D"" *<J, Jan Francisco, Cal.

iwm

2885

!i

The Secretary of the Treasury:

Gentlemen, the Federal

Beserve Act requires t h i s Committee to divide the country
i n t o not l e s s than eight nor more th»n twelve Federal
Heserve* D i s t r i c t s , and to locate within each one of them a
Federal Beserve Bank,

In rsaekint; our doiermination the

law requires that the d i s t r i c t s shall be iipportioned with
due regard to the convenience and customary course of
lousiness, and shall not n*eesaarily toe eo-terminus with
any at*?te or s t a t e s ,
?/« s h a l l be very glad to hear from the gontlsneB here
who are prepsrsd to elucidate t h i s problem for us, 1 33e
the f i r s t on the l i s t submitted ia !.'r, Robert Uewton J^ynch.
;

STWWi

0 / 20BTT!? U T T S LTKHH.
TTO

the Secretary of the Xreasury: !',r. Lynch, w i l l you
please state you* f u l l n^ac, residence and occupation?
|! Mr« Lynch; Robert Newton X-ynch, Manager 3an Francisco
iChaiEber o f Cos^eree.
Tha Sec?€tar^ of the ?reasuzy: I c t h i s tha proposed
j j l i s t r i c t , *-r. Z.ynch (indicating nap)*
Mr. Lynch; Yes, ??r. Secretary.

The white *rea shows

the d i s t r i c t that i a abac l a t e l y aoclnatod " y 3aa Francisco,
b




3*E*

R g Lynch.

26E6

a^^ the blsek district sho^s the whole extreme area that is
affected by San FrEnciaee sj-d Srn lYFnclacc I^y.
Hu* Secretary cf th# ?reasujy:

Finfly describe that for

th(? purpcaee of the retard.
]^r. Lyrch: Thf li&iTiet ^ho^^ ly( -hhlte —
3*he Secy€t&yy cf th^ ?T^8i?iry:

Jxet n&v,i' th€. 3t^t^a.

?*Y^ lynch: Yea, ^^i*t^lRi^ i^!&t of tha teriitr:ry of
3&lifortta m^L B\v?aRn, sh^^o th^ ^l^tii-^t in which ^ m
pTanoi3ec ricrch^Ytta ^&y catsuitn with freight y^tee that are
lKcrc favorable ta thia dtatri.^t t^^n to a3^ o^r^r point.
Saa l?3r^n3lHco r^roh&nt^, 'kf^ ^-^, m*n abit to ic ba3inc33
amd tc #iff<54:^ th4; whoiv t^ryftu;^, ineiodin^ t M Stctee of
W-tshtxgtcs, Oregon, Idaho, ^^vada, Cv,lifomi^, Utah &nd
*ri!6cm . The Kap, v,hlle shewing in black the other terri! t^ary, iihcnU really 1^ ^haded^ eo^B.^neiR6 w^th the Oregon
linf, r.nd R!.r(?ln& to blf^. fitth^ e(^en cf the territory.
^h^ S^ciet^r^ af th€? T3.^f^ury:

rt^G.o you finish ^R with

! P rap of thrt ^h^rseter v^hl<h w m 3 6 i#ho^ th& ^r^duaticn of
!

!j
!jthnt influenced
i Mr^ "ynrh: Y^a, J hrv^ snch a mai*. w M e h i h th$ ccurae of
i
! thes€ matters, I will present to yon.
rr. KonvsrBp; will y^a m p ^ l y the K&F fjn^i^hed by th#




J*HF

R B Lynch

2887

Transportation Department?
(A map was hare proancad).
?he Secretary of the Treasury: Yon sr&y pycoeed, Mr. Lynch.
Mr. Lynch: I hnve copies of this map whieh ?ill bs
browjht in in &ae aonTse, If I may present thex now.
i

The geographical position is th^ flrat point I desire

to make, if I ttay. San Francisco is located almost equally
distant fror ^^^^rh Co3.imbi. .„

^ ^rc, f little closer

}te the Me^ieam M a e at tha bottom of California, nxd
taking ? point dc??K in

riLen^. it is about equally '^f-

jtaat in the country frets tha north to the south. Its
!
!
^L&eal gecgr&phioal position givaa it a docrinating position
'i

aver this satire district which ia expressed here n^on the
tsap.

?hRt ^eographieal po itlon in self-avid nut pnd ia

dominated by the idaA situation.

Ran yrrimiaeo 3ay is

the B3C0KA largnat l&nd locked harbor in the world—
The Secretary of the Treasury: In order to save titse and
ipot go svergroHjud ^it^ hifh i;h^ Gom&ittee is perfectly
f&Biiliar, we suggest that you omit that, bectuae we are
thsro ahly familiar with the geographical position and with
the co&^a?3i^l inparttnee sf ^an Prrneisno*
"r. Lynch:




Th^ ^ejnitory described here ^ p ^ populat-

B888

in*

R N lynch

ion of 5,000,000 people, ^nd California has half of that
population, 2,500,600.

:he 3an PTamlaco TSayetwntlea

right aroumd the Bay have been one-^ifth nnd one-dixth
the entire population of the Pacific Co^st. I hRve hero
ehayts.

The first chart will show thtt of the metropolitan

areaa of the four cities, Ran Francisco, Loa Angelas,
^eattl^ ^nd rortland, that ^an Frrnciaco h#s 606,000 or 44
jpBr eent of the tot*l, as Angeles 438,000 or B8 per cent,
af the total, deattie 259,000 or 1^ psr cent of the total,
000
! K d Portland 215,/er 13 per cent of th* total.
JB
! The Secretary of the Treasary:

?hat do yon iMeluae in

! t # pep^U-^tion of San Firncisco.
}h
*r. lynch; I include tha citjes in the Metropolitan rren
the aettHsl contiguous cities.
The Secretary of the ^reannry:
*r. Lynch:

^hpt are thoae^

Oaklpna, Alameda, Berkeley ^nd 3*n Frtnolsco.

i Rha Secretary af the Treasury: Are those ceRHaa figures?
! 3^r. 3ynch: A'hese are figures of the United gtntea Censn*
[
l f r 1910. The Bay area tuXes in nearly 1,000,000 people
ib
i^r€nmd ^%m Pr^nciscc 3ay.
Tha second ch^rt T h*vn her? shows that as^UKin^, ^ division of the territory frcm the nwrth line of California




£890
frtm

& I I$mch

clear south, including Arlzonr, Utah, California and Hevada,
that California has a population of r,r77,00G, ^rteh, S57f;,OGO,
Arizona 204,000 end leyada 81#00O, or o total of S,057,000.
,| Sfeahlngton has 1,141,000, Oregon 572,000 pud Idaho 32t,000.
I or e total af & 140,000.
'
>

Therefore out of the graai.

total of 5,000,000 th« entire southarn terrltrrv trt&u In
; orer 3,000,000 of th*t population.
;

I have a farther w*p here colored In order to fierrcnstr^te th^t t&et Rnd rlao 8howinc "h
these various status*

v i

^ Elleag« la

It shows thrt California hjps 7,771

i allies of railway, which I s about equal to a l l of the other
i territory with th* s«jeption of "aBhington. This railway
!' mileage i s displayed in the ehrrt which I h> © shown.
fv
j
j

Wm Secretary of the treasury:

If you will b« good

\ enough to furnish the Oois*;ittee with thr#e coplee .
I-

||

Kr* Lynch: T e a , I w i l l .

ii

j!

{The charts abov^ r:Cerred to wero filed.)

;

Ifr. Lynch:
factures!

The next point i s on the question of manuThese are a l l Halted States Census figures, and

the l&flt available.

California hes ^529,761,000 in lcanu-

j; factures, as ouch as or mare th*n half of a l l the balance
oi

he territory described in the chart.




7he territory

\

Jw*

R 3 Lynch
1

i t a e l f including California, TTtah, Armsona and Hevada, i s
194,000,

*ashin£ton has -220,746,000, Oregon

$95,000,000, Idaho 522,400,000, a total of $346,000,000.
and California lias more than equal to a l l the to lance of
the territory combined in infarafsetured products. Corrn^riag
the e i t i e s ©a Kanufacttirecl products,
has £133,000,OCC, Loa Angelea \.68,000,000,

;<n

rerulue.o

Seattle

JSO,000,000 and Partland ^46,000,000.
Thm Secretary of the Treaaury: ''ill yon furnish any
information aa tc th«^ dirorsification of these industriea.
!!

^r. Lyneh; Tea, I w i l l hava at tha rloaa a P3Ttpl«t& book

I;

which ha a be$n preppred in advsnee, which ahows the varioua
indtifttriea i a Cal.ifornip, c«Bparing thes rlso I^r years,
which w i l l be f i l e d at the oloae*
On the question of exports and irports in th» harbor
of 3aa Fr^nciseo, I !»••« a chart showing that ©ur exports
to foreign eotintries are #04,000,000, to the Itlpntie
ijSeaboprd %2Z,000,000, to Hawli Jl^,000,000, to the
r h i l l i p i a e s ?5,OQ0,0OO and to Alaska "2,000, GO, maktag a
t o t a l of }101,OCOr0OO.

^ i t crar Alaskr fieiires ao not

i&elnd© the great amount of expr t s thpt go to Seattle anft
are r e - a h i f | » d , beenns^ we do not h Y a direct l i r .
^©




"ho

2891
J«*

8 I lynch

£ttget Sound figure* mxe 8' own here for purposes of eowparison, showing #89,000,000 as against JlOl,OGO,GOO.
Our Import* for the fiscal year —
fho 3eer#tary of the ^reaaury; Do you Kean thrt according to your figttres th^ U i ^ t i c Se-'ho^ra exports are only
f£3 ,000,000.

fh» aeeretary of the Treasury; I see, to the Atlantic

Kr, Lynch:

They »r# |2B#000,000,

I here a chfirt here

ehowlsg in the matter of lcgports from foreign countries
ij#S9tO0OtOOO; fro« the Atlaatie aeabo^rS y¥41,OOQ,000, from
Hvmxii |26,000 t 000, from ths rhilippia«» $2,000,000, aai
from AlaalEa |4,000,000, or ft total of £134,000,000.

For

the purposes of comparison with Pugst Sound, they heTe
129,000,000 froc foreign countries, J6,000,000 fro* th«
Atlantic iSea^OPra, §96,000 fros ^ w a i i , }15,00Ot00O from
Ithe Philippines enfi $6r,QGG,000 fro« Alaslca, maJdng © total
c:

,000,000.
I h&re $L third Ksp here showing the territory tributary
T ^r^npisco Trztr, foreign ports, shoeing tHe exact

Importation from 3&jwa9 Chine, 3i**, Indo-Chinw, TmXoh.




$89£

I! pew

R a Xynch

I M l i l s , Hawaii, Philippines, Australasia, Mexico, Central
Aseria*, and the west eoafrt of 3outh AcerlOR, shoeing the
s t r a t e g i c position of 3aa Francisco.
I hrve here, v.r* Secretary, »s i l l u s t r a t i v e rcsteri.Bl, a
l e t t e r addressed to the Ch^Kber of Corarerca by one of the
moat prominent exporters l a 3aa Freuaeiacso, which I would
l i k e to retti: *I5 S3? :iii?*BXj31fcriI? rcTSIOirL ""ST.

^c

confirm our etatesent that in the export luaber bueiness
frsas t h i s coast, the bulk of which consists of Oregon Pine
Bhip^ed from Pu^et £»ouna xn&. Coia&bi^ I^ivor ports &x&
^adiroodl t>3K Northern California ports, the most of these
trs-d s sre conammfited in >im Francisco by th« exporting
merchants, with the «.~e7its of the K i l l s here — end even
whsn they deal with the & i l l s dire<jt in the north the
financing i s concluded here — not oaly the pejment of the
m i l l s ' invoices but th« drawingfor the cargo on the
foreign Irayer.

^e aheald s a j , without having actual

f i g u r e s , th^t mere thm

90£ of the foreign Iturber shipKants

are no henaled.
the export houses of the Pacific Const rre located in
sen.

"^^^ firs^TK

. rrsagi-^ents for handling

c r e d i t s end b i l l s of exchange are here sn£ not in the




TT.111

K S Lynch

2892

jperts — nor* so far as w* know, to any very greet extent,
I either ia I'ortl*md, Seattle or faaoKR.
i

i

©Or ©wa experience h?s to do prlisarily with shipments
Of lumber to i u s t r s l i a , West Coast, U. F# end South *friea.
We believe we are »fe»olutely Bafe l a »*yin^ th^t mpat
|| of the others i n the trrde flnpnee in the mme wsy«
[
I
•
I
I t i s true *lac th^t it we were unking e shipKent of
!! grain, flomr or other merchandise, even thoxigh ftfc o r i g i -

I

/ziftted at S e a t t l e , "*aco®a or Portl«kadt we should finrnee
•\ frda: Here find we think a grent ijart of the b^alneae in
these l i n e s origins tea with 5sn Francisco houses end i s
denltrwith l a the svi^e way.
Further thsa t h i a t when the San Freneiseo fins has a
lcr*nch house i n the Horth, the ftetti^l finpnein^; l e don*
through 3an 'r^nclseo, &s the f a c i l i t i e s for foreign
exch^nge are here.
3*urs f a i t h f u l l y ,
By A. F. f*\anet President."
C^i th^ nneatioa of lobbing snd transportation, I h^ve
here a statement from the Southern l a c i f i c Compfmy, showing
ij th^ir *ntiri f l o r a s at the end of the ye&r enuing June
il



R I Itfach

2894

50th,1913, showing that there were shipped out of San
Frsaeiseo by r a i l s tons of freight to the ©<mtr»l d i s t r i c t ,
eomp i s i n g part of the fcras described in t*»t «**** "*^rt
4,876,486 tons of freight; to ether California
points 1,180,140 tons; to a l l California pclnts 6,056,8?,6
tons.

?o Oregon, Herada, Utah, Arisen? end Sew Mexico

508,000 tons.

?« i m fr«a eastern points 1,065,455 tons,
P d

Kafcint* © t o t a l of tons of freight which originate in iian
Francisco Bay of f ,4^6,612 tons.
!?hers

1B

by oowparisom l a

YPIUSS

the ©scport f i b r e s

which we h&ve just glT«n you.
The nurcber of paesengers interchanged betweon 3an
Francisco &sd th« central d i s t r i e t heretofore referred to
was 5,518,294; for points outside of the central d i s t r i c t
of California, 881,244, KUkln- to a l l California points
6,19? ,638,

To Oregon, Kevada, TTtaa, Ariaone &n& Hew

TTerico, 84,85£,

^o ^nd from eastern points 199,018, or a

t o t a l of 6,843,408.

Pasasngers carried coastwise were

286,635, and to «^* fror. foreign ports 52,452, making a
grand t o t a l of 7,182,496 passengers handled ottt of 3an
Franfiisiso l a s t year, each passenger jca-actically o^rrylas
with hire a ton of freight.



I f we wore to include the

jmw

B * Lynch

2895

r i v e r Do«ts and foreign s e r v i c e and other matters, there
was a t o t a l o f 38,000,000 people handled out of 3*n $r*n-

e i s c o , including local t r a f f i c .
In regard te railway systems, we have locatedhere the
»?ein o f f i c e s of the 3©mthera Pacific, Western Pacific, and
th©

a c i f i e Coast business of the Sante 7@. All eastern

railroad having o f f i c e s on the Ooaet find i t most convenient

f

nd necessary to have their general Pacific Coast

agent located In Jan Francisco and branches throughout the
coast,
fa© Secretary of the Treasury;

Have you prepared any

is&pg showing the transportation f a c i l i t i e s and the tiine
consumed in reaching th© principal points in t h i s territory?
Mr, Xynch:

You fcsve th^t preliminary map, ^r. Converse?

!?he Becret&ry of the Treasury;

iPor instance, we should

l i k e a isap which shows the inajdffiUK and BdLniirtOR time to
S e a t t l e , facoiss, Phoenix, Arizona and LQS Angeles, and theee
various in^crtant points throughout the

iatrict.

Mr* Lynch: W hare a map graim7?9&—
e
llei Kclntosh;

W have a «sap showing not exactly the
e

aajriirm r^a minibus:, but the area reached i n 1£, E4 and 36
hours.




i*«

* I zomeh

Mr, I>ynch:

2896

Mr* Hclntcsh w i l l present thrt with his tea-

jtioony.
I The Secretary of the Treasury: That aright be prepared,
i f you h^vA not i t in th»t fora:, showing the actual tir.e
to these important points in the d i s t r i c t , not ao much by
the sone systesj as by the ^5 rest time, ?het aan besubKitted later*
&Y. Iiynch: f e w i l l prepare aueh a wap,

I hf»re a pre-

liminary map here showing the exact distances to those
p o i n t s , these are the 12, 24 find 36 hour 20x1*8, which we can
resell i a that tiixe,

This Kiqp w i l l aho-w actual distances

to various p o i n t s .
fa& Secretary of the 'treasury; I f ycu w i l l add to that
the tisse require** to reach those principal points along
with the d i s t a n c e s , I think i t w i l l be useful.
te.

Lynch:

Xes, I w i l l retain U d s sap *m& f i l l those i n .

The Secretary of the ?reasnry:

You msy f i l e th*t l a t e r ,

and. also have 1% made in t r i p l i c a t e t i f you w i l l .
Mr. lynch:

Y#s.

We h^ve out of Ssrn Francisco ^ay, !!r.

Secretary, th» Kost complete interrr"1 waterway system on
Co»st.

There i s en actual water drainage of California

from the 3an Josqtdn and Saeranento Valleys, bringing into a




E897
JKW

R I T.ynch

cordon b a s i n i n San Francisco B«y t t e w a t e r s o f the s t a t e ,
which s.r© very h i g h l y * D P v i a b l e , & < which g i v e a very
n3
i d e a l d i s t r i b u t i v e system by water from 3an ?rpnoisco.
Day b e f o r e yestord&y an oeea;i dtetT&e? caif.* i n with a
cargo of lumber and docked a t 3aeran:ento•
Tae S e c r e t a r y o f the treasury; 1?hat i s rather tunwaal,
i s i t jiaf;
Mr. I^nch: Yes, tho high water helped that out aowewhat.
But with tha various projects that the government has, i t
w i l l l>e possible for sot:« ocean ships to go clear to 6acvm&nto.

fhis internal w&terway sydtea I fancy you do not

©#ra to have any farther statet&«&t about,
The Seoretcry of the Treasury: If you hava st&tisties
there, you asay f i l e the* as exhibits.
vr.

Lynch. Y^s, those-are very iKportaat waterways with

a very large "carat of toam ,

t the present ti&;e handled

upon theK.
T © 3ocr9tai7 of tho Treasury: Tou Kight give us a brief
h
eutllne of th« extent to which those stx&AKB ere navigable
into the interior for practical purposeo of th^t character.
"r.

v.ynch: ?his a r t i c u l a r wcp which i s there- does not

Show i t *




k

:
~- ~

ynch

2898

Jh* Secretary of the Treasury: I t can be a p p l i e d l a t e r ,
Mr, lynch*

I w4.ll supply eoinplets data and f i l e it eg an

•xhitoit, i f I siay, of tha waterway ayate&B *n& the exw3t
ar.ount of tonnage handled upon them.
In regard to coastwise stew.era, there fere 71 coafptsies
controlled and operating in Jim Frencieco which rou fron:
•Be to g«v©n ships north end south along the coast, as far
louth as :©xioo and as far north as Alaska. Ihc tonnage in
1912 of these ships was, arrivals 4,&6Q,<&&; dep?:-r»iur«0
4 t 6£4,9G7 t or a t o t a l of 9»185t14f> tons,

r»ctlo&lly a l l

W the coastwise shipping of the jfaftfcCtfe Coast i s either
Simed, controlled or ope rated radiating from Jan Kr^ncisco

T&B Secretary of the treasury:

You say practically a l l

Of i t ?
Mr, lynch; Prsetioally s 11,
the Secretary of the Srwuwixy:

How do you account i'or

whPt gos a out *f. Seattle^
tfr. liyneh: T<m speak of cosstwise steamers?
Th» Secreitury of the Treasury: You ere referring to
eoAntvHsft ateafners only
Mr, iynchJ Yss, not ror©i£3i«




jmw

H % Xyaeh

fh© Secretary of the Treasury;

2899

I thought you were shak-

ing of a l l .
We* Zynch:
Seattle.

Io.

f&e H U Liae and other l i n e s &o out of

I do not 3caow of any iaportr-nt coi^twise ateeni-

Skip l i a e that I s owned or operated there,
She Secretary of the Treasury;

I misunderstood you*

KiV Xiyneh: I t «ay Ve tkut the Union Pacific own or cont r o l a certain l i n e which

COKOB

froa; Portland, out that i8

p r a c t i c a l l y a 3na Frsacieco l i n e .
San Frsnciseo has 17 foreign »tea*ahip l i n e s , a l i s t of
which i s supplied f »md I have also supplied a l i s t of the
71 coastwise ate» e r s ,
(fhs l i s t s atore referred to were usarlred f i l e d , )
Mr* LyneK

h«ye here a map showing the territory in

which Ssn Francisco i s .nupreme as the Jobbing centre, which
1 referred to at the beginning, end which gives the s t a t i s t i c s of the tr«n«port»tion from California to 3an Francisco
of the Various products of this atate.
I t i s worthy of mention that the products of California
are the greatest variety of exortic products produced in
any s i -ilar latitude in the world, ? n there being such a
»&
groat variety produced by intensive methods, i t Keans *»n




Jw*

R I lynch

Increase In population.

£900

I t i s not the same as forest or

Other products, which being denudeu, do not adinit imsedl a t e l y of increased population.
I have hero a l i s t of the various numbers of carload a
as follows:
50,000 carloads of oltrus fruit.
15,000 carloads of deciduous f r u i t , other then fpples.
3 , £00 carloads of apples.
9 t 000 carxoeds of dried fruit.
1,000 carloada of walnuts.
1C.000 carlosdB of wine.
10,890 carloads of canned fruits and v e g r t i t l e s .
5,000 carloads of beans*
Or a total of 108,S90 carload* which Rt ^n average
TtYmime of }0OO per oar nets #SEf517,000 per year.

This

does not take into consideration the rast tonnage of o i l s ,
gr«in, 8n6*r, hope, hideand leather, lumbert and so forth.
In which production this state ranks high, and which w i l l
be presented i n our exhibits. Neither has the iinaenae
Itrport^nt tinnage been considered,
for
Do you care/anything in regard to the development
of tr»nsuortation?




W hare en idaal developing situation
«

£901
jicw

H X Lynch

of transportation, which has been almost exactly in proportion to the development of the whole territory.
the Secretary of the Treasury: So you mean sufcurbpn or
of the whole district?
Mr# X*yneh; I am speaking of the whole district•

71 th

tha opening of the Pmuana Canal, of course, there i s aLgreat
gaoujit of activity to 3an Francisco Bay, and i t seers a
yeaeonsbl© thing to »ay that * every transcontinental line
Seeking the Pacific Coastt -lther north or south, wuot find
an ontl^t upon iian Francisco Bay. W are constftntly
«
lnfbrnrefi in regard to various surveys and projects made to
make that more easy and feasible.
fh* Secretary of the treasury;

Wfmt prosj>ective develop-

ment of rsilrop* f - M l i t i e s i s there?
Mr. Xiynch;
to San Plego.

There i s a line that i s to cross froK Ywta
There ! • a cut-off in Idai» which hringt

Boiae and the Idaho territory into direct itrmediate relation
to Jan Francisco, with the construction of a few hundred
Biles.

i
Zh® Secretary of the frwmmarr: I* thst under construetriont
J£r# Lynch: Ho, that i s net mnder constraction, ^ut the




£90£
jm

It I Ly»oh

necessity of ths e»a«* demands th^t ultimately i t fctist be
built,
Th* iee atary of the treasury* Tt i s P prospect?
Mr, Lynch: Yest i t i s a prospect, and i s only presented
a* eueh*

there ia a prospect, i f not Bsore than that,

for steamer lines eo«ing down in coneetion i^ith the Hill
Lines aa& the tr»n«-continentpl lines of the north, to
"bring to 3«ta yr»nciscc ?ay their passengers. X think while
th©r# are sany

ther rvsors and project , they -re hardly

worthy of mention at such A tiise as t h i s .
In regard to the Jobbing tr*d*, ^r. Secretary, gutter
n i l l be presented to you in concrete fort by two gentlemen
who w i l l illustrate fttra their own business the exaet
relations which they havo to this t?hole territory.
I would like to re«d a very short letter fra» one of
the large firms ©f 3aa Francisco that handle t«a aad spioes
and which i s rery pertinent •••- the pro position:
"Heplying to TOUT inquiry regarding the territory in
which w find i t possible to distribute
©

goods on the Pacific

Coast in ooupetition with other Coast c i t i e s ; our sone of
distribution extends from ' V-a.,- , on the north, to 71 r*so»
Texaej east, ia m geaerul way, as f«r ss the ^.ocky fountain




jw

R I lynch

2905

Broadly speaking, eanr.oditles In our line, Coff»#*t
feas and Spicea, are imported la greater volume, pnd at
sufficiently ffcyor^ble freisht r*t©s BO th«t It 1B quite
possible to rse^t competition In territory ?;here local
freight r^tes froK competing c i t i e s are less then the rate
trm

3an Frune loco.
Of course, other ffeetors enter into the que8tion; "but

we think direct importations to this point, lsrger voluae of
business, end the fact

that 3&n Francisco Is generally

recognised throughout the territory described as the
nretropolis of the Pacific Coast are the principal ones*
The Tea ?m(Le of San Francisco extends, we thunlc,
materially further east than the outlines glyen a bore as Jan
Fr&neieeo importers supply many jobbers throughout ths
Middle Test, r n the two largest 5?ea importing houses in
?d
the tiaited states hsve, within the past few years, established branches here liec^use the geogr«phiCRl location of
Mn Francisoo perr.its ecsnoKical uiatributioa throughout
the entire United &t*-tes«
Hhat we hf^ve written regarding our Pacific Coast trade
we bfiliave i s true with regard to e l l of the firms engaged
in the same line of business in this c i t y .




2904
J«w

H £ lynch

Trusting this gives you the desired information, we are,
Tery truly yours,
J. '• ?olger & Co.
I would like to say, Tr. Secretary, thrt the retries
as to the Middle 7est probably apply exclusively to the
Tea trade, at least i t i s more hopeful in that way, T»ut
t h i s w i l l show the distribution of this large houae.
7ns geographical position of 3an I'ranciBeo rnakss i t
ideal for jobbing houses of all kinds, and I

i l l d^fer that

subject to the other two gentlemen who flre here to speak *bout
it,
I teate a eeeparison here in a ohart showing a comparison
between -

r-ncisco, XiOs Angeles, Seattle and Portland,

of population, "bunk nle**ranees, v^lue of r.RnufscttLred
i

a r t i c l e s , postal receipts, foreign exports by sea, foreign
iwj^orts by sea, building construction, and eapital of national
ibanks;

I will read these figures i f you like.

?h* Secretary of the treasury:

Ho, I do not think i t i s

necessary to read them,
STr. Lynch: T *hink they f.re sufficient for your information, find they are a l l token ftoK the United States
•ttftlaties,
fhe Secretary of the Treasury:



Your c tnparisona in this

jtfir

B B Lynch

£906

chart are wade with th# population of the cltl'-s t «.-:•::SRIVOB
and not with the suburbs; i s that accurate?
Mr. Lynch: Including both.
ir»« trcpolitsn rrea,
metropolitan area l a

First the c i t y , and then the

The c i t y i e shown in blaek and ths
picked out, that i s to Bay, 3an Fran-

cisco l a 416,000 end there are 686,000 in the Metropolitan
area.
The Secretary of the treasury; '"hen you speak of Satttle
metropolitan area, what do you embrace within that'

Do

you tnke the whole Pugat Sound d i s t r i c t ?
Hr« X^fnchi STot merely take the actual — aa far a 8 tha
c i t y Kieht possible extend itsjelf in i t s p o l i t i c a l boundaries
taking i n just the iocediate urban territory.
fba Secretary of Agriculture: That l a the area of 3am
Franc 1 so o *
*
1'T. Lynch: 46 square miles*
Thu 3a«3r»1&ry of Agriculture: And Seattle i s 68, la i t
not?
Mr. Lynch: I har« »ot i t before me.

T have th»

figures aoflsewhere.
fhe Secretary of the treasury:
to t h i s oap.




You might add that data

JEW

H J? 2iyneh

Mr. £ynch:

2906

The areas o f these a i f f e r e n t c i t i e s , *nd also

the isetrc p o l l tan area?
Ths Secretary o f th# Treasury

area*

Yes, th« Metropolitan

In S e t t l e I think the s t a t i s t i c s they furnished

were mostly from the ifiiget aound d i s t r i c t .
Mr* Lyuch:

Yea, there are 18 c i t i e s —

The Secretary of the .^ro&aiiry: I f you have i t including
the San Fr^neis©© Bay d i s t r i c t in BUJ of these comparisons—
I hsTfQ not had ti^e to exar.lne your cherts — you Ki£ht
supply oose coEparntive data with respect to the 3an >"rane i s e s Bay d i s t r i c t , for inatasoe, and the Puget sound
d i s t r i c t . Could you d© that?
Kr, Xiyneh; Yea, I ahall do that.
Th® Secretary of the Treasury:

Those can be filed l a t e r .

•*T« Lynch: I have the statement of the e i t i e a and tha

ri^ht
acroa^e/befoire ms.
7he 3eor«tsiry of the ^reastirv: £hey mmj be ntoe^ to
these charts.
Mfee Secretary of Agriculture:

Ji©t me see thpt iteiror-

findtxm.

Mr. Lyneh: Tea, that will show the KT**M of the citias




fttO7
jgm

B 1 Lynch

Sow, **r, 3eeret©ries, the convenience of 3*m Francisco
tor . a e i f i e Coast business i s the ne: t point,

"e Emiatain

th??t while 5*a Francisco hmu it© area, this &mtm a* other
el t i e s on the Coast Bad in the country, that ther> 1: ;
l&rg* sense in which this *rea ineluaes other sr^Rs, Include
the other centres on the Csast.

It i s rery well illustrated

by the fir© insuranea business. All of the large fire
insurance oospealea ot the count;;/ have their pacific Coast
agents i a 3nn Fr&ncisco.

Jan ?raneisco i s one of the three

isetropolitfui aroaa of the Univ::..., states Ibr the fire insuranoe bueinoau, Chicago, I«w York and 3an i^r^noisco; that i s
where they dc business through brokers ana not agents t and
the

remitona clear here.
M&* 98 per Cfmt of the clearances of t: e rire inauronce

business are cleared in San Prsnrisoo.
I have not gone into the l i f e insurance matter, but a
I t t t e r has just arrived t and this i s frois one of the ir-portant l i f e ineuranee companies Vaeifie Coast agent, of the
Mutual Life Inwmtm* Compaay of Hew York, and with your
permission I w i l l read i t ;
Complying with your request to give you figures
showing the relative iisportanee of the various Pacific too*




j*s*

H X lynch

2908

States as l i f e insurance centres, J beg to advise that the
t i e l a to* short to rather complete d e t a i l s , but I trust
that the following w i l l answer your purpowe:
The history of the business en the Pacific Coast
nfiturally e l l radiates frost San Francisco, from ifhich pl*ce
not ^axsy ye are ago p r a s t i s a l l y ftU of the business of th*
Pacific Coast States was handled, wad the preeltsc Income
from a l l of these s t a t e s pass©- throu^hthese o f f i c e s , but
t h i s i s no longer true In the cases of the ^ j o r l t y of the
companies, plthon^h there aro notable exceptions, a s , for
instence* the Ketro^olitsa Life, which has R sub-hose office
there thrc

hich, I s s isfor^^

#

the . uainess and a l l the

p r e l i m c o l l e c t i o n s of »11 the Pacific Coast pad sereral
of the Hocky I ount^in at^tes clear, fad takixi^ into esnctideration tlie industrial, as well «ts the regular line
business th? t they trsnsaet. I believe they probably write
a larger business each year i n the territory covered than
any of the r e s t of us*

?here axe other coKpr>nles» I a*

inforrr.e^ t th*t clear a l l of thsir Coastbuainesa through the
San Francaiec o f f i c e , but i t woulft require an inaividual
in^iuiry froir, each office to ascertain tho extent that t a l s
applies^ s M I believe the issjority of the companies today




jiCff

*909

1 I lynch

ole&r their presims for tha territory involved through the
btmka i n the c i t i e s of 3eattl®, Spokane, Portlrnd *nd XAS
Aageles* and for ths purpose of giving the relative
lisport fence of the promliai ineei&e froF. thaiw various territ o r i e s , 1 hmr© copied the following figures from tl»
insarnnc© Ifaaar Book publishod by the Spectator CoKjiaRy^
13B ^llllett 3t»-t Hew York, aa clo»lag the business of
191£ (the 1913 figure a act yet bo ing uTailables)
£k© State of Washington^ I find, i s
oredited with having collected in l i f e insurance
preaiUKS in 191E

§8,819-,724-.

and these presim collections are very largely
divided between offices located at Seattle
tm& 3potone, m& i&mt proportion of than Bay
be remitted direct to 3®a Frsnrisoo I aa
ttr^tble to ascertain,
O-egon i s credited in the same year
with collecting in l i f e insurance premiums
v> 3 ^

Of

and I would say th**t th© grsat majority of
this was cleared through the Portland office,
'although, as la the ease of the Washington



|5 t 719 t 21&.

291v
$em

R I Lynch

business, I have not so way of ascertaining
how much of i t isciy have been resitted direct
to here.
California i s credited €Hnn the same
source during the sas« T«ar with having
collected

$82,990

t

m

and which 1 hare ao way of ascertaining how
these collections are divided between offices
hQxe and offices in Los Angeles, I would
assume that the business of the Company which
X represent i s fairly illustrative of that
division, &n& I find that this Company i s
credited in the California report filed with
the Insurance Inspector

as having collected

in the State in 1912

$1#7S7#S8?.11>

and X have asik&d the Cashi er to tfke off
of our books the amount of this thi^t was
collected through this office, snd he gives
m* the figure of

#1,260,140.30.

fh» differencefcf*tweenthis letter figure fm(L the
Conspany tstal collection in the .it* te ia whet ^ould have
been cleared through the tea Angeles office, with ths




B I

Lynch

£911

exception of certain preuiims th**t *re paid direct to Hew
Ycrk, both i n t h i s part of the jraxe and the lower part,
&&& which would enter into the Company1 a total tabulation, rnd
I ^ould be unable to aaearx^in what this arcountad to without
going over tfe© T*os Angeles books and finding exactly how
mamh passed tiirou^h th#& during that year, but i t could not
hsv© exceeded the difference between Jl t 7S7,S87.11 and
the amount collected through this office of *;l»260#140«S0,
T«ry truly yi urs,
W L. Hathaway.
#
Mimager.
X«w w« hare fbr California, Kr, Secretaries, a ooKplete
epitewse showing accurate o f f i c i a l figures on the production of California »nA compared by years, showing our ratio
of development, taking in our agricultural devalopKent,
financial conditions, &&& so frrth, &n& concluding with
a statement of the ea»ct production of California,
showing that l s » t

JQ&T

we h*d reached over a b i l l i o n dollars

i n products aad sjooifectured a r t i c l e s . I t Bhpws th? t in
t h i s state we produced l a s t year 597,000,000 of orchard
products, which *T® iteisi*«A here; SSfc.OGC.OCO of Tincysrd
products, £6,000 t 0Q0 of garden products; .50,000,000 of




•

2912
t*m

It I Lynoh

dairy and poultry products, S4l,00G,000 of fartr. products
comprising barley, wheat, oats, com, rye, md rice,
$71,000,000 of other farm products, ..:26,000,00a of field
crops sueh as potatoes, beans, onions, melons, and so forth;
510,000,000 of fish products; #£5,000,000 of forest
products, 141,000,000 of petroleum, £46,000,000 of ether
minerals, 569,000,000 Of farm anitsRla and products, pnd
520,000,000 of sundry other products not included above,
making a total of *541,©19,000,
aecordlag to '^

fhst our emnufaeturea,

Census of 1910, amounted to : 529,761,000.

is&king A total of over m billion dollsrs, These books will
u

-~ *1led with you, but psrticulrr attention i s called to

the suMtary of thevBlues which I have just rend*
All of these figures show thrt i^»n ^ W « / - B C O attind^ in
a dominant relation to the entire Pacific Coast district
and has actually within her supreme territory practically
S per cent of population, production and railway mileage
O
with the

xc«i^ion of Washington, end the other matters

which I h*re had occasion to brine to your retention*
I hare not undertaken to £0 into any of our hopes or
ambitions or the rai^id develdp&exit which i s going on#
iiafilce i t to say, California i s growing r.t the rate of




JOT

B I X^ynch

100,000

ycmr.

2913

I t want from one and one-half m i l l i o n t o

two tm& &n@ h a l f m i l l i o n l a the decade from 1900 tc 1910.
'The Secretary o f the Treasury;
growth o f asm Francisco I t s e l f

f

cive u s *m idea of the

now. How l a th*t proceed-

Ins?
VY* Lysehs

the city i t s e l f i s in a very restricted area,

only having 46 a^uikre K11©S tm& a largo part of our population rssidea around 6&n Fr&ncisoo Buy.

W have, according
e

to the census, 416,000 population*
i?h# Secretary of the Treasury; In the city liKita*
*?r* Xynchi

In the city limits.

According to the school

p»tt?ndanc© i n 191; , uain^ very eonservatire figures, wo
have 462,560; 3aa Franciaco'e growth ha a always be«n
steady, greduel &r& sur«.
The a®cr»t*ry of the freasuz^: Counting the * etrOi^litan
d i s t r i c t , wh^t do you showV
I'r* Lynch;
for 1910.

606,000 according to the goYermnent figuras

Save yom th« figures there, «ar. Sanley?

The Seere^iry of the Treasury: Zell,
T*r. Lynch: W have not got i t #
e

191;:. for Instance*

Kay I have the privilege of

flllne it?
fhe Secretary of t h « » s « u r y i




Yes* Ww t was i t in 1900?
l »

^'W

E I X<yneh

2914

F r . I<ynch: In 1900, 686,875,
The Seeret&ry of the treasury:

So. thet i s 1910,

Hr. Lynch: Oh, 1900?
*ha Secretary of the treasury:

Yeat hare you the census

figures,
Mr. iynch: Yea, I think I here,

I 01m gire i t to you

for the Ban counties at the s m e n t , and can give the exaot
figures l a t e r ,

Taking the counties th&t border on Jan

JTreaeiseo Bay, we had in 1900, 658,000 people, while in
1910, according to the Censue, 926,000, or a growth of
300,000. The isetropolitan d i s t r i c t in 1900 was 455,847
and now i » 650,000,
The Secretary of Agriculture:

Ton hmre included Arizona

i n t h i s reap?
Mr, Lynch: Arizona i s included,
!Tfe# $«eretary of Agriculture; Have you anything to show
the course of tx? de fro« Arisons, •-•here does i t go?
Hr. Lynch: Arison* i s tributary to feoth £cs Angeles and
San Frnnciaco. 1 think Itr, Gardiner of the southern
Pacific Oovpany, an 9*$ert on that proposition, can t e l l you.
Itay I ask ktm to * nswer that question?
The Secretary of Agricultures W w i l l l e t hi* speak
e




i*w

H & lynch

£91$

later.
Mr* Lynch:

He I s s o t to b© called aa a witness. He i «

Just oae of the experts I have available* I vjould like to
have hlei answer that question*
Har. Gardiner: I did not catch the question.
fhe Secretary of Agriculture; I f you have finished, we
w i l l l e t S r . Gardiner take the stand*
Mr* Lynch: V^ery w e l l .
$TkTS$mm OF isf. a. ;,

...

.

The Secretary of th# treasury; w i n you state your n^me
and occu^ttion?
Mr* Gardiner: W. G, Gardiner; Senernl Pasoengftr A^ent
of the Southern Pacific Company.
The Secretary of Agriculture; They h^ve included on thia
imp & ^.rt of Sew Hexieo aad Arisons. y?e have not had &ajr
s t a t i s t i c s given us showing the course of trade from Arizona
what i t consists of &n& vhexe i t goes* Can you eover that
ground?
&r. aardinor: Largely c a t t l e in the f i r s t plpee. That
coses very Inrgely to California* A great deal goea east.
And buy, chiefly» that i s largely to Califcmif.




S9I6
jww

w# a. Qardiner,

?he Secretary of the Treasury:
Kr, Oardiner:

I t ceases to California?

Yes, s i r , s great deal.

xhs ^Secretary of Agriculture: Whet percentage would you
say of th« business ©f Arlson**, the cosacoaities of Arisonn,
eoKO wester
fir. Gardiner;

I could not eayposjtively, but I think

f u l l y half.
7he 3©eret»ry of the Treaaury;

Can you supply those

figures?
?!r* Gardiner: Tea, air* I ^ i l l hpr* theic Kade up end
filed

f

showing the oxaet figures*

The Secretary of Agriculture: Can you state the products
which go e a s t , nad to what points they go?
-!r* Gardiner: Tea, s i r .
The deeretery of the treasury:

And for th# western pert

Of Hew Max!co
"r,

fcrdiner:

Yes, s i r ,

the Secretary of the Treasury: How ebout rrtsht
£ r . O«jpdiner: ^e c^n

PISO

tmr* trtsh, partioulsrly the

western portion of i t , 3alt Late City,

Ogden i*»d west, which

i s a heary diBtriet.
?he Secretary of the Treasury;




Including ftslt take City?

im

2917
W. Qm Qferainer.

Hr. aaardiner: Yea. W w i l l have those figures tnsde up
e
? n f i l e d , showing the distribution of the cd&^erce.
*&
£ha Secretary of Agriculture; Xou Ef*y give the mar.& for
levada, i f you w i l l .
Mr* ^ardin^r; Tea.
7hf 3c-er«taz7 of ty^ Treasury: And Oregon•
Mr. Gardiner: Yen.
The Secretary of Agriculture;

How about tha aoutJM»ni

h&lf of Oregon, wh«re doea that g©t
*!r« Oerdiner; The southern >^lf of Oregon, the togne
Hiver afed TJEpqtift Valleys, the^rffttit goes north to Portland
end largely to th* «a«t.

A great deal of their apples go

to the east and to T^arope by *ay of I«w York. Hush of that
of i n t e r i o r Oregon ±& handled l»y us through Galveston to
Hew York, end hops the same way.
Tha Secretary of Agr1 culture; You send i t through t h i s
aoathern route.
Mr. Lynch;

Yes.

Th* Secrstary of Agriculture: Whsre i s th^t trads
tendled* i n I«8 Angeles or 3sn Frencisco?
!^r. Qardiner: Both.
The tfeexstary of Agrieultura: ^ hut percentage?
s




S*s*

W a

Jtr. aardiner:

fcardiner*

£910

I cazi her£ly''say,

Thn aeeretary of Agriculture: If you w i l l , include that.
' r . •••iBj.-v.iuvzi I w i l l find that oat nn& incorporate i t .

fhu Secretary of Agriculture: Idaho h*s no special direct
uuiij^eetton with 3an Fraaciaeo, ftaes i t ?

The trade does

not eo&e beret
T"r. Oaxdl&er: Bo» i t goaa largely inrou^h o«lt La3ce City
or Portland, but i t w i l l be to e great extent—
7h« Secretary of Agriculture:

X>oeo ruij part

of that which goes to dalt Lake City cams to
I r* Gaardiner; Xes t s i r .

3RJI

Frrnr-iaeoV

:?he projected line thf t llx.

Lynch spoke of t rur.uing from ^inBioucca to Boise t surreys
hf ve been trade &n& i t i s pu ly r

roject; whether they w^ll

be afcl© to fln»ae€ i t i s another question.
line,

i-.,

There I s another

£raat deal of preliminary worfc hre r-lready been

done, i n the building of the Oregon Short Xdne aouth to a
d i r e e t connection with the oou.hern
snpth«r l i n e hetnii built running

a c i f i e . There i s
.: which w i l l come

to wiouthezn OxBQcnt find part of the line i s rlrG&&? under
construction frem Klami?th F a l l s , which w i l l fora a l i n e into
Idaho nnd through thet into f'onUna.
The Secretary of Agxieulture; £h&t i s projected




JBM

W ••* U a r c i n e r

2919

ux. ^ardiner* That i© proaeexaa *nd partly b u i l t , known
as the Ore 50s ^astexn $a1lroad,
fae fctovx-uvary of the iareasury: #h© i s b&ck of thet?
Kr. Gardiner: Th& Oragca Short 74lne.
xhe Secietary of the ireasur^7:
of t

rhs i i r s t ljne you opoke
large
who i » behind t h a t , sny of tha/existing coK^rniest

Kr. rardtoer: B©#
fhe Secretary of t)» Treasury: Or en independent eaEpany?
Mr* Gardiner: Thoaa axe ladlTl&u*lB, ^he origin of the
projeot i s In Boiae*
4\ae secretary of ths treasury: How !on£ i s i t by tcall
ikon; here to l^alt Lake City?
&r« Gardiner j E6 hours 021 the f&atest tr^liu
Th& Secretary of the treasury: Thrt i s the fastestt
Ilr* ?ardf»6r: Yes.
the Secretary of the Treasury: Whet i s the ever^ge t i e.
would you say t Kail tlmeV
Mr. Gardiner: 'boat 28 or £9 hours,

eetbound la faster*

The aeexexary of the Treasury: I s your service often
interru^tedf
Hr. Gardiner; j»ot s i r , not aor© ao than ether roads* W
e
have had comparatively l i t t l e — there are some delays



fam

V Q Gardiner.

occasionally, but nothing tc t i e the l i n e s up and prevent
the movement of eos&erae.

£hen i n addition to thFt, es to

the north and south l i n e s which are being b u i l t , we have the
two l i n e s through tho 3acrrttrento Valley and cosine together
at Mibura, «nd the line over the SiBkayou mountains, th»
e x i s t i n g li#®»
On the Coast Line,

there i s hein& "built what i s kno-sm

as the Northwestern Pacific, runnine from

^, "ay north

Into T^ixeka, and the connection i s from thsre north to
*Tsrshfield, Oregon, and into Drain, Oregon, in the ^illa&ette
Valley, which w i l l be one l i n e .
2h© oocretary of Agriculture: I s i t intended to continue
that l i n e from "Surskii northsrard tc the Willi»ttette Valley?
*nr. Gardiner:

I t w i l l oontinue north to ?.?«rshfleld on

Koos Bay, &n& i t I s being built fro» I>r©im in the Willamette
Valley ov r to Marshfield, thr*t i s under construction.
2h% Secretary o f Agriculture; How near does thst bring
i t to Portland?
Mr. Gardiner: I t drains southern Oregon. I t i s probably
©bout E00 or €50 Kll<*st I do not laiow the -xaet diata oe #
The aeoretary of Agriculture: Fioe Portland.
!*r. Gardiner: From Portland, yes s i r .




But i t ibnr.s

£921
$**

W & Sart liter.

a second throng-h l i n e to the north*
The Secretary of Agriculture: I« i t the purpose to push
that l i n e through, pjoisptlyi
Mr. Gardiner: Oh* yea.

the Southern Baeifie i s building

it.
The Secretary of Agriculture; I imow you axe building
to *iireka» but nortksr&rd froK

urekf , i s xhut building

rapidly.
* r. Sar&iner:
hat i t w i l l be.
field.

Sot between Bure&i* and ^arehfisld at prcsont
"© are building b<%tween Drain end Earsh-

fjjgt part i s under constyuction.

There ia a third

through l i n e tram We#d up to Hla&ath Falls and around the
Jiakayou's

f

which w i l l foe connected up to sake a line to

the *aat of the 3is-kiyou f 8 t practically fbxwing a third
tiiro«ch line*
There i a another line partially fcuilt froa ?ernley i n
Seradaii a l i t t l e east of r.enot which was built over

into

California to Laaaao County for the opening of the lumber
tracts.

7h&t line i s being projected t*i& prepared to go

north to Kla^^tH f a l l s , which i?ill forK snothctr line east
of the * ountFins.




W & Gardiner

T e oecretury of Agriculture;
&

tttt

Suppose you f i l e a «ap

indicating those projected lines and indicating which rr%
imder a«tur,l construotion and which i t ie proposed to build
toy » raaponsifcle ooKp^ny, and which rre rerely project*.
Ky« Gardiner: The»« lines I speak of are Southern

acific

Line8, and I CPH file a map ishowing their exact at«tu»#
The .iocretfiry of Agriculture: rhet i s s l l . tou will
gire ua also that other info rrr at ion about the soTesent of
cocffioditieaT
Mr, Gardiner; Ye«.




2*23
fits*

. . .• "elntOBh.

The Secretary of the i're&aary:

¥r. "clntosh ia here,

and wants to be heard.
KAnranr -

- . - . u^iiTOdH,

The Secretary of the Treasury: *111 you gire j©ur
f u l l neve and occupation•
Kr. J'clBtosh: G. K0 Hclntoah, Ylce presltiant of the
Baak o r 4 e l i f e rata.
Sfe^ .Secretary of tho freasury: W would 113te to h«r«
«
the general sr^flRc^r #f the telepHome <n>Kp^ny hare,

ould

you be kind enough to get hir. for udf

The Secretary of the Treasury: ^ave his: here at 12
o'clock.

HOK, **r. Molntosh, i f we <st*n hrve a »ap of the

?ederal Jiea&TVB l)iatri«t as you propose i t t we w.uld
l i k e to h*?ve i t .
Hr» Helntoah:

^hi8 i s the F^p on the ocrrd.

2he 3ecretary of the Treasury:

I s this the Tfeders.1

Reserre District?
* r. ^elntosh:
pose.

It i s practioally the SSK* as we pro-

I have her© ssme f l a r e s , with which you gentle*ea
as
are quite/familiar as we are, th»t I ¥dll srefer to in
the
the way of explanation, in/order thfct they are



$m

0 K rein to 8h

89&4

arranged* Tne d l s t r i e t t h r t i s prrnossfl im th#* d i s t r i c t
known i n the Comptroller's report &e the Pacific s t a t e s ,
&#ally t h e eoura* of trade, Barring some portions o f tha
eastern s e c t i o n th^r? , 1?:. i*roa tho ?*ock^ *!oimtFins to tins
i « » t for mers topogrAphiofil r«a»ons, geographical reasons,
kg* f^oK the f»«t tl^it i »

i r l i # r 4»y» the center fc«*t

KM eBtnbliahed ^r r+iuftm of th« port.

I t i a not oar lib»

EDntion or suggestion to arrogate to ourselves commercial
r,onopoly of the cio^st,

but to reas & from tha conditions

hat e x i s t that the 1st i f i e Coast s t a t e s have always H &
&
do now have to depend upon tv'--.-^^lveg for their fi&a»*
i a l «80hiaery to a i^rge ^ztant,

n;y h^ve liad t s t?Ocs

ye of t h 4 r o^m fla^aei^l re<|uir exeats for the seasonal
a0r«al uses of sasiB@ss.

I do not r«f*r aow to

t a l i a a t i o n of newer and Aev?

^ns products* Taut to

he eeeeonel *ad nonr.fl uses of business s t any t i r e * They
ve had to tek© cere of th&m&elvas on account of t h e i r
w l f s r a g r s a t distance from the s e a t s of rasaey In
he e a s t ,

Ifnat d i s t r i c t i s defined rather \>r imtnre. In

he • a s t e r n s e c t i o n of i t there * re» s f course, portions
l o s e t* tke r a i l r o a d s which c o m e r s i a l l y would naturally
ijnow to ewce point further i n the e a s t ,
rorlnutE:.nosf thf t
!

V

consider,

oa^iuia, while geographically a s near

f% some other portions of the seotion, does not belong ta




jam

these people.

* X Mclntoah

W think
e

their -products mad their

business flows mr* to 3t» 1^ a
tees this way.

inne&polis than i t

The cattla of Sew Hesrleo , and the ainer-

ale of Sew Mexico, go north to Kansas city and Dearer
rather than this way.

The Ariaons country, we b«Her^t

i s tributary in a financial sense at least, and largely
In a emoceroiRl sense, to Xoe Angeles rather tMn to San
Francisco; but the point thnt we wish tc ? skr^, rithout
lgi»1^1sira th» eoietcereial irrport»nce of other aectiona,
Or arrogating to aurselree a Konopoly, snd that as to the
seat Jneans of putting into effeet th<« law which r l i of u»
w i l l have to work under for &any years, and which we are
tnoromshly in accord with — for our own selfish interests
we wish to see that machinery so adapted as to run with
the greatest smoothness and give the beet results to all
of us who are Interested in it*
I hare jresemted sose few figures of the population
@f the Coast which I wont refer to farther than to say
>
that there i s about an eighteenth ff the population of
the TJnited itates in this district we propose, and of
the banking oapital, curiously, the percentage of all
toe capital pnd the percentage of the nation* 1 banking




29*6

£etr

C J Hclntoeh
C

e a i i t a l on which we rely l a abont the saire.

There l a

&pproacliEat l y one-fourteenth of the nationrl barJrine capital
0 f the Fnited States In the Pacific s t a t e s .

Hnft while,

of course, thet &oes not necessarily ^evera the selection
of the points of reserve ban&s, i t wcul£ aee^ to Ir.rtiorfei tbut
wo could not rcaaona^ly ©xpect more than one i n the area
nnlens thero weys ftoee pextic-alr,rly stronr ^ftasons for i t ,
I
The fi^orea of the national b^nks

pon i?hioht at present

at lAnat a the eapitftliEation of thin new b&nic Braat be ma&e,
show that there ere * 1^0 f 000,000, in round numbers, of
• a p i t a l ritudi surplus which i s beint levied upon in this
whel« t e r r i t o r y ,

?hst i n c l des Alaska, which i s negligible.

I hare tsiren the CoKptrollerf s figures.
She 3eexetary of the freasurj: That i s not n*c«ss*jry
wder tv. 'ct.
Kr. UelntQsh'. l o , but I hare included AlsJto »«6ft«*»
the figures correspaM with the Gosiptro-Uer1 s figures. I t
i s 5120,000,000 with Alaska in or out. Of thio California
has 5*5*0001000. If California i s elirinoted from that
diatrict — a & i t i s inconceivpble that California could
&
be divided t without regard to figures-— there i s only
#45,000,000 left



tor a l l the other states, eocene ing at

Cr

c^eah

:927

the O*aadlPB line and •xtr-iiui*^ to the Hexiean l i n e . That
i s mxm #£1,000,000 short of the amount of capital that
i t would be necessary tc levy upon to produce th© capital
required for the Federal H©serve fc&nk. I t i s to be hoped,
and doabtlepi w i l l be the f a s t , thrt --.my of our state banks
w i l l accept the terrca of the Aet, «e hope they w i l l .
The Seoret&ry of the freastiry: Whst i s the lew?
liar* Kclntcah:

The law of California i e at present so they

a#y« I think i t was chfmged by

h*; l?st legislature for

the purposes of this act, to u^ke i t possible to comply,
Tits 3#oretary of the Treasury;

California has already

aoted upon that*
Ifcr. Keln'cssii: Yes, I t espresaly provides thft we dan do
ae*
flM Secretary of trie xreasur:

*^H you Idadl^r flj# as

an exhibit to the testiKon^ you h? ve ^iTen a eopy of that
Act?
Kr* Mclntosh: Ya»»
The Secretary of Agricu.uurej

Do you know how sasy of

theee state basks would be eligible by reason of their
capital?
tfr# Kclntosh: You Kean i a 3an Francisco?




2*20

pm

0 I WXntosh

?h* aseretary of Agrlemlture: «o, in th» state*
Mr, &CIntoah; So, I cauaac t e l l you that. I can set
those figure*. 1 should like to n*k* an explanation, l a
that connection, that while i t

1B

true ana we bop*

considerable nosfeer of *t*t# basks may ultimately

SOB*

COM*

into the system IQX unixicatiosi, i t i s not BO likely to
secure than here a s I t la in the Kiddle we at era or eastern
section of the country.
Our country i s a developing en& and requires the lnyestaent rn& tJie u«e of e g^emt aicount of ^anldn^ oa#ltal l a
long t i r o loans a and therefore a great eao unt of coney i s
invested i n saving* *enkav and our aarlagi* htaks are
treiteAdous i n s t i t u t i o n s where loan* sre tf de o t real estate
that ere not of the cherscter tnat o«»n be converted. Such
feaaka a s thet have their ovsn field and vettld not be benef i t t e d by cooing tmilQT the

ct.

The character of the

buainoAS they do would not be beno fitted "f they e a s e under
tke Aat. Uherefore* i n t h i s country i t i s not possible
that a* assay savings hanks w i l l oome in as in other part*
of the country where the loans are oi a different
character.
Ths ieeretary or the treasury;




Bave you only a torn

$m

C X Folntosh

2929

eowwreial banks i n the state?
Xr« Kelntosh: I think thexa are some five hundred and
odd throughout t h i s state* eo&reroial and wrings bunks.
ffca Secretary of the Treasury: I C B speaking of comO
«e r a t a l .
r

'r. ?!elntosh;

I have not tho ii.&*i-*Bm

A e Secretary of the Treasury: W would be glad to have
e
& l i t t l e l i g h t oa thft as to how wwny bpulcs, aside from
the sariaga banks» there are in the s t a t e ,
Mr« Mclntcsh:

In the centers l i k e 3an ?r»ncisco and I««

Angeles and Seattle snd Portland the Kaln cap! t a l i cation
i n banks i s i n the national btmks, a s you are aware9 ~nd
throi^hout the rural d i s t r i c t s , the disadvantage we spoke
Of would apply.

As to the smaller banks, they are groat

In nukber \mt s e t l$rge i n capital.
fha &9QXQX&.TJ s f the

rsasurr:

>w

e would l i k e to hare

that information*
Sr» Malntoah: That information w i l l so forftishoA.
Oontimiing a s t o the character of ths bank which we think
would best serve the interests oi *he entiro section,
sad wit!»ut mj

foeliBg of local s e l f - i n t e r e s t s , our self-

i s h interest i s i n having the section served because




£950
C X nsfxtoaa

JKV

we are boat served when that la done.
W boilers that a b«ak in the section to serve i t
o
a d j u s t ly should be so capitalised and 09 suoh & also
afl to inspire confidence, ia order th*t the sentimental
as well as the practical effect of i t s operations ^ould
be at the best,
Taking the figures that are given for this section
sad ctoKpotla;*; from the national banks, again, we JinA
that the sttbscril>«d capital in a l l the national banks,
as they will undoubtedly agr-a to the Aet# will bo
$7,800,000•

The paid up capital will be ;£,900,000, and.

th« reserve deposits w uld afptozl^ate 036,000,000*
Bow, a bank organised with those f gores at the outset womld not % a very forbidding aggregation of capital,
e
Itevo are fire banks in the elty of &* Fraawioco whoso
oapital assets would e reed the oapltal assets of t o
Hesorve Bank i f it was formed frou the entire district,
thsore «re, I think, three banks in 3an Francisco whoso
ag8ar«f»te resources would exceed at the outset, until
the operation of the teak had attained

SOB*

degree ef

mgnitude, tho aggregate rosouroos of the reserve bank.
ffeo 3ecretary of the treasury: Those co«parlso»s dont




2931
jAw

C X Helntoah

seem to us B important bee? uae the function of the reserve
O
bank i s of a different character.
??r. ^clntoeh: ?hat i s very true.
The -Secretary of the Treasury:

The relative atrength of

any bank i s not ao i portent.
Kr. Kclntosh: But to giv© One an idea of the capitalisation
of thfe bank, rvnd I think you ^ i l i notice this in San Tr^>ncisco and t?I»ev?herft, they are capital!aeci out of proportion
to th*»ir fi^ o.iits in & way that th^y «rf not eln«wh«ret and
i t i s ciuer to our he ring to ro\^ upon our own refiouroea
end not •feeing able to hpvv ir>Rt*rt or

.-.ICB^

co^trunicntion

with the h^adi? of other jftnpncial centrrs.
fj» S^o

af

pry of the

-r rw v- : You referred P roTrsiit
.

ago to this d i s t r i c t bein:

-If-reliant d i s t r i c t < rci not

r e t i r i n g M«i8t«*«f>*» -Protr th« out»ide.
Mr. Mclntoah; I 64&n.t v.enn to put i t <juite that nay*
fv< ,><irrttp.yy of t.he ^reasRiry:
~» *

I »ay, to any great

extent,
?*r,

? w

' Intosh:

I tt<5aat to m*f w# w^re •«lf-relipnt by

reason of onr n-e«ssitie.*5. ^3 are not asserting ourselves
a s beinK s e l f - r e l i a n t , but we hare to b^. T * always h»4
«
to finance ourselves. W are ao frr rfticovori from coionunicae




toar

tm
C X Itolntosh

fio» that w> have had to capitalize ourselves BO OUT
*
ejeaeonsl eM ncrapl rennlroK^ntr. can be taken care of
largely "by ourselves.
ft*** Secretary cf the Treasury:
Imvs to rediscount

f

to what oxtont do ycm

considering the

i s t r i c t as a. whole?

Sid what extent would yon say that you hpve to rediscount
i n order to meet the seasonal or the peak dewuad?
Mr. I^Intosh: i?ell t th&t i s a d i f f i c u l t ouestloa to
aaswer.
fhe Secretary of the -r pa ry: I Kean th« extrece peak*
Mr* Kolntcsh:

B conditions h*ve be em i n the p»»t t San
very
JPamneisco "banks #*** rarely h&To rediacouj:ted#
^he Secretary of /griculture: Was thet because they
didnt want t o , or wh^t was the reason?
fc.

^clntosh:

^hero was yrobably a •ontir.entnl reason

to connection with i t that w i l l not nor appear slnoo tho
law h^s been changed•
The Secretary of the Treasury:

Under the existing system,

when you get dcwn to your reserve, whether conditions rereqfaire i t or not, you stop?
Mr, Mclnto»h: Tos t exactly so #
Uh« Seeretsry of the SrGasury: That i s , you 1mA to ttftf




3**

C K Molntosh

2933

TJecFtte© you were over your amount find you could not go
on unloss you would rediscount?
V,r. T'elntosh: There i s a reluctance to discount in this
section.
a© Secretary of the Treasury: 1?hen business was h&ndieapped by the ability to get funds. Hare you any idea
how jr.uch of a h*»nrHc«p haa b : m imposed on the demands of
business?
*!r. ^clntosh: I cant give you the figures.
I

!l

The Secretary of the treasury: I wean a Kere apprcxl-

nation,
Mx* r:clntosh;

I oaat gire any figures. I can only say

"that in annual seasons whan the peak of our crop season
ijin the north coincides with the payment of our t&xesv
Inhere i s «n annual pinch which has to be relieved.
I;

|

The Secretary of the treasury;

!; Sr» Melntosh;

That comes in the late f a l l ,

pgya^it wiU be due soon now.
thd f a l l .

W t doea thst ocourt
hm
£he second

Hhr f i r s t payment i s due in

I have a map which will show i t in a general

way,
fhe See etary of the frsasury:
there, and i t shows very plainly.




I see what you hrve

$m

C X Kclntosh

£934

We* Melnto&h: In connection tdth this d i s t r i c t , end
isith the idea of serving best a l l of i t without regard to
where the reserve baak i s locstea, I *rtah to call attention to that chart and explain i t in this v^Tmar; Th«
figures that are given tor cerx^in of the K*in crops —
there sre «eny others th*t dont enter into i t that I
hBve not thought neueaaary to

add— the figures I h T
^©

g*v#n here* not accurate by rcarked to give you fin idea
af i:h& lofc& which must be carried, and th« season which
th$7 Rre ts W car/led,
*

the eh^rt i s framed to ahow th.ot

at ©artala 9eas.na of the ye^r che r.oneya are reouired
#or th^ x>eak iaaS in iebraary, v:areh and Janu-vry, and
thej .run ofi^ tc tciJ:^ eare oi* the beginning of the load that
coicefe with th© &reen fruit in March, SJay and Juno,

The

pfefik of the ^&ricus Xo?*ds will be indict tod by the hi£he»t
portion ol the dif^raicatie line, not intended to be ba«*&
upon dollars but to give you th© idea of a crop of
$40,000,000 naessaury in California to be t^ken CPT«
Of* $h«e i s & l i t t l e help necessary in December and
ae:&in in wsntmiy tind again in Febr iary end March, and
i t 1© out by June.
T © Secretary of the ^raaaury: Couldnt you give un in
h




jp&

C X Kolntosh

£951

(addition to this diagrav. another one, just a composite
;|96«k9

s^d© up showing the consolidated |>eak in the wonth

•j

bf the greatest dewaad'
Kr. Kelntoah; By the montht
tte Secretary at the freaKiry* Tee, the different
months.
Ux* Melntoah: I R« afraid you h»ye gottea the idea th&t
these gaedustlona are intended to be gz^duations of collars.
They are not #
?he Secretary of the Treasury; I under at and that. It
i s the value** Tom stete the v&lue of the c/Op—
MXm MoXntosh: The value of the erop and the lines indicated

in no sense show the masbsrs of doU^rs involved,

^he lines indicate that that crog has i t s peak load in
February and Haareh, BB& that i s about the average anzmal
value of the crop that i s to be handled them.
fh& Secretary of the fr^asary: I a* speaMn^of smother
map showing the d«r.wid here trow, the ^a;- Francisco banks
sl^swins the varying dessad diuring tho ye&x9 month by
month, one line, dont you see, which «?ould give the
peak of the bank*
Mr. Molntosh:! will esdssvor to innre such z. m-p V.Q




C X Mclntosh

I-

2986

th^t msde, i f I understand your purpose. 7ld« sap,
line by l i n e , shows that the various eosKoaitleS"T © Secretary of the Treasury: I on spaakinsof on
h
emtiraly independent &apf with relation to your loans
sn& discounts.
Hr, Mclntoah: Tea.

I oan have a map of %m\ Kxnn pre-

pared.
The Secretary of the Treasury:

A composite map show->

img the aeeand upon a l l the bsnke In San ?rpncisco.
^r. M Into eh: Yes, we oan hare that done.
e
fh<* Secretary of tha treasury:

Yes.

-?e will give you

s&ple tiice to do thPt. You can forward i t about the
tirat

o f Maroh»

tux* Melntoeh: Yes, thr^t can be done*
Whs Secretary of the Treasury:

The earlier we can get

i t the better*
Mr. Kelntoaiu I t eaa fee eade much earlier. Do you
'want the San Francisco b&$iks alone?
?he Secretary of the treasury: Yas.
Er. Eclntoshi

The map here was presented to indicate

the crop conditions in this territory and showing the
seasonal crops &a& the period of Aeaand on +Un baalp




\

$£*

0 £ Mclntoak

2957

here. You w i l l notice the line of luaber I s f*irly eonii

listaftt throughout the year, except in the winter «onths
when the logging stops, and someti as the m i l l s are closed
down* But that i s f a i r l y constant.

To concentrate th©

lintbor l i n e s and grain line a, i t i s a question of feast
or famine,
the ssere-uaxy of Agriculture:

A greet deal of it

is

I financed in the east*
i Mr. Molntosh; Yes, but there i s a constant demand sn
our northern as well as our own bunks for the carrying of
the account*
The Secretary of the Treasury: Do you generally meet that
dor^nd here i n Jan Frroielsco from th^t souroe alone?
Mr* Kclntos^nfhe lumber?
flift iJeerotary of the "Jreasury: Yes.
K% Hclntcsh: T«sf w« bare b«^n able to take care of
a
i t . When we reach our lisr.it we have had to stop*
fhe Secretary of the treasury: Business has sf>d to
stop u n t i l you were able to t*ke eare of i t ?
Hr. Molntosh:
readjust,

That has brought about those things which we

c a l l panics*



Business lms had to stop u n t i l we could

C X ^elntosh

2988

She Seeretary of Agriculture: In other words, when
there i s a great reason to extend credit, you hare a
penle?
Mr, EeIntosh:Tta*.

Wh«a there ws* the greatest reason

to ©xtend c r e d i t , ths*e was the least a b i l i t y to extend
jjlt j «ad one of our icerc Hants made the r ; irk In my pree•I

«aee that you have j ist now «sadet when he was oautloncd
to be a l i t t l e alow In his requiretr.snte for the season,
"bee* use th&T* was a tamper erop ponding, &n& he asked
i f the o«Kper erop sight produce a psnic.
fha Secretary of Agriculture:

Just as you are becoming

strong, eeomoKlcally, you get a panic ?
Mr. Hclntosh: Y#s*
the Secretary of the Treasury: iaide frcn: thnt^ do
$mt hare asy «afe rediscount setters?
Mr* Helatosh; Sevey*

Thft Secretary of the treasury; You dont know whether,
a s things are now, you would be safe to redisceant?
Mr, Wclntosh: ! o . I t would seen;, therefore, from tha
standpoint of the population as co«p^red with the whole,
the capital of




^sbsalcs as compared with the whole, the

$ttw

c X Hclntosh

location of the capital within the
to the rest of the

2939

l e t r i e t as compared

i s t r i c t 3 , and the diversified char-

acter of the district— this *?ould seec to indicate
that thQTQ should be but one b**nk in t h i s district at the
present time with branches at suf h other points as are neesssary to serve the d i s t r i c t adequately, because i t i s to
out- i n t e r e s t to see i t i s served.
faa Secretary of the treasury: In that connection,
you understand th^t our problss i s a national onev and
that you e&nnot lay out one d i s t r i c t without considering
the whole; i t has to have a relation as to what i s to
be ^.one. In laying out t h i s d i s t r i c t have you in Kind
the division of the other parts of the country? Worn
i s i t to be done?
Mar, Mclntcsh: I t has been our opinion — I arc speaking now representing the concensus of opinion of the
Clenrln

touae

eoaaeittee, which has gone over t h i s matter

very thoroughly at the instance of the Clearing House
'ssoei&tion i t s e l f — I triad to make i t pl^ln a t the
outset t a t enr d i s t r i c t was separate and apart &n&.
could not l o g i c a l l y be ettached to any other d i s t r i c t ,
fhe Secretary of the fressory: So, no, not attached,
Imt i t has a relation $«wsaariXy to th« other parts of



jaar

OK rxlntosti

the c o u n t r y ,

2W0

low issny d i s t r i c t s hare yam assumed that

we would c r e a t e i f we adopted your suggestion?
Wr. irclntoah: '"a hare aot asamed t h a t , and I dent
toov

th^t we are eoiGpetent to t e l l you.

fhe S e c r e t a r y o f th# ^reasury: I s t h i s nrde with r e l a tion to eight districts in
^r. I'olatssh: M*

he country?

If there were only four, or i f there

were only two, or i f there were twelve we «u»t hftre one
or «ore within *v«t ?*reat which i s a natural urea

#—

if

there I s only one In the country we vast be served with
fenmehes here* I dost thisJc we are eap^dle of suggesting to you ttm natural dirisious elsewhere•

Our relations

are largely with larger eentsrs,
?!» Secretary of the treasuryi

It i s such & related

profeloB that in the laying out of districts you vould h » e
*Y
to glre attention to how i t could be related to other places
west of tY* tfi.8sisalppl riT»r, Howf»it i s the requirement
of the Ket that we shall have not .less than eight nor sore
than twelve districts*
»*• KoXntoah: tea«
fas Secretary of the Treaemry* I f y»m lay out a district
without reference to the msber of districts in the




2941
jaw

6 % tclntoah

emmtry, you wight tsk@ so ajueh of the country * • create
t h i s district that there might not » t eaaugh l e f t to go
«
around tha other d i s t r i c t s .
Mr. tfalntosh; That might be conceivable i f conditions
were not as they are. 0nr Idea la th*t Jfature haa laid
out this ©action for whateyer aubdivisions there axa in i t ,
?here can \>e no

ogieal ©o«fi«etion over the Hoeky T'omitrins

at this titte/ There i s no logical coaneotion with the
country arer th^ Hoaky Mountains# no flow of trade over
that r^nge of h i l l s at the present tiwe. there will oe#
doubtless» in the future, when realligment of the dist r i c t s rc*y ts-ke pl^ce.
fha 39cr£mry of 'griculture:

It mm represented to aa

in the north that latttre ted laid out a district up there.
We. Kalntosh: I as inclined to think they »** right.
The Secretary of Agriculture;

A d thrt a great in^uotioe
n

would D done i f the ^orthweat did not have a tank. Ffcr
e
instance, i f those thre^ Important sUtoe, including a part
Of Moatmti — at first they included a l l of It — were
attached to Saa Fn*nciacot what would you sayt
£r« Salntcsh: I would say that thsir ideas are of a
sentimental character. I spoke of the entire district west




£942
jm

C X Melntosh

mt the Hooky fWtet^ins

s bein^ divisible into a nnaber

Of banks, whatever nmcbor say be chosen* but they must to*
i n that d i s t r i c t . 7h*n I brou&ht the figures to ohow that
s t present, no setter what the norrcal lines would ultimately
be, there o&n be but one, Hltiicately i t i s quite conceivable
that you Kit*vt find i t in your discretion to increase the
d i s t r i c t . The c i t i e s of the north &ave their commercial

;

I
i»sport^iicet ••'nd I t i s growing trer.endoualy and they hare
behind the* a wealth of country th*t i s d ere loping rapidly—
there i s no question about that.
*8i* '3*f»r*t*:ry of Agriculture: ruat en their reproaentation
do you believe that Justin© would be done at this tire by
the location of n *&nk &t 3*a ??•««<-••'ar?.

^o what axt^nt

;

do you think a bank located, at 3&n Jfrrnciaco would aerre that
4

t without injustice to t ^ ^hole countryt

! r. ::olntof3h:

I can see a© auestion of i n j u s t i c e . There

ahottlii b*i br? nc^eg where branches are neceaaavy find where
the conditions of buaineaa justified.

Those branchea would

have exactly the sacse oapitrl and surylus &s though we had
but on** banlt in the country, ' s yon gentlefcan understand,
t o s t of us prefer —

i f we had only one bask in tho

country with branches Tfh&re necessary, we think we would be



,
j

C. K. KeXntosH

*****

.?*£

" e better served than we are now, far the reasons we
b
urge 2"or thU eo&st.

W think
e

the Htrtltwest will be better

eferv«c by an adequately ea$it& iaa^ bank, oat representing a
divarse cooatry— t>fttt«r eerrftd than th«y could b* with
their om if th«r& mr* mffiviznt
«&pit%lise i t *

Ultiniatti^

capital thtr^ to^«y to

that condition aay change. W are
e

not prsnarfid t• say m w that «upr«a%ey at e l l times
•>
*
eonxjto should l i s her«.

i

tni«

W are speaking &t today when the
e

0rgaril2a.ti-3»r, usuat lairs tjl&ca*

The Storetar;y «f the freaaury:
t>v 6 «mtire
at

.

ji ....

j.-.a»

T^u don f t relate titli' te

Ys« aa; natural con^iitiona should

But natural conaition- a.> s o t determine.

lte.%'^ , -:-,w- «... jiddlfyin1- th#v/.
Wrm Mclntoahx

i&
'

.ians by Iftrialatieiu

Tnt»

f>?ft s«er*tary of tlt^. Tr«a«ary:

(hir n^thed i s to deal with

the e audit ions rawdified hy l e g i s l a t i o n .

Hr

suld you divide

tn# rest mt th« country west o the Mississippi Birer?
Mr. Mclntoah;

1 don't think 1 **i e*as>*t«at to giir# yea

testi»«sy that would h® useful to yea «pon th^t point. W
e
neeeasarily hare no s t a t i s U e a in our hands as t^ the awe«e- f

^f trade in those States*

The S«cratarv



he treau^ry:

^ a» surprised to }*ar auch

f • K* Kclntoah

It44

an a4«ls«lon ffroia gaa TTaneiseo, beeaaao the bank fere '

.,n

the other c i t i e s bar* given ua tfttggtationt as to thfc best
division o? tlit

country.

1« i t /our • ! • * th?*i *„ ig bsst

t# ori?mniz* th% mlnitiro «r w^ytunw na«3^«r?
Mr. Kclnto^hJ

1 ahoulc *&\r the mlnlstai number #f dl»»

tricts*
She Si«r«tar^ #f th« ^r«a«uryj

In order to har* s«eh a

Ti«w, I a^hoiad think i t woul , be necessary to har* In xaind
" o tho»« d i s t r i c t s should b€ plac«d, and what their «qulphw
• ! • « in th* dxatsri WOUIQ b^«
Mr. d n t o s h :

If th«r# w«r^. si-ht

iatrictg, t^«. mlnlmwi

number prorlded for In the* Act, 1 couldn't att«o«pt ana 1
1

-

any of a« eould att«Bg>t to det«r»i»« th% txact

c i t i e s in which th*? ahoul. be located; but wo thiak tha
miaiaua ehou

organ!2*4 for the rtatfons that wo on^rost

oa* eh amid be h«r« -

th* ability 9f th« bank a to oaro for

+1"* n&*&& ^~ 4'^^ c^aawmlty which th«or aro to aorro*
^ « S«erfitary of

£h* Tr#a*ttry-

*H«t w ^ . be your b*»t
^ Od

judjpaont as to t&* d i s t r i c t a?
» • Mclntoahl

I woula rather not a«l«et eight e i t i o s

W s ^ i , b«ea«i»«t as I »ay, w« aro not thoroughly aliTo to
the situation as ts> tho «o<w«oat of ©#»oditi«« within tho
d i « t r i c t »ay of woat of tlio Hlfloitsippl HIYOT*



H will bo

&te

C K# stelnte*h*

£M*

fee easy to select three or easy te aeiect four, but elrht
1 could not a t t e s t to select; 3 could not attempt to seleot
th.fc = ijior four.
.
Tn* Secretary of the frsasuryj
r i , wher« wouxa j^« j>x«c« tJi^a?

W«XIf w«st of th* Mi«ei«9l^
"that number of c i u

you M«»tion?
Kr# ^cliii<»«ii:

l
I s&id th^t w« wer« sot s l i r t to the

»OY*-

wint of the prouucts saoxig thoas St&tea midfe$tw&&nthoao
State ft*
thfr Secretary of Agrieultares

Bo you thick for a moment

th&t if %. bamk were located in San Trapteloe* th« otker parts
of the <5istriet voiild be "better mrv%& than Ban Kraateisco?
Mr. .-.cSiiiiOaaX

3 b^g your par cum?

scretary of A^rie^lture:
were I&cat*4 l*ere San Vrancisco

jmi think i f the baftic
•-.-JU;.-.

better eerrea than

*ay other elty?
Hr» >:e2ntotsh:

By no sieant, not at all*

She Secretary of Agriculture:
i t i a ae©«»sary

1% h&» b e ^ ax^aed that

to have a b&ak in a particular l o c a l i t y

to $lr% that l o c a l i t y th* iat&reat on thfe Board of Directors.
Mr. Mclnto&hJ
ehape or manner.

1 can't «e& that i t avpliee in

&j*y wayf

The bank* that are to operate with the

banks of the various d i s t r i c t s under the lav should be



g*h

mu

located wher«> the greatest aeed far than exiats t wV-rw tfca
greatest contact aun ^

- . - they are t ; aerv^ sxiccs,

but a$ to tarring better la one section tha n another, no;
there can be a^

a stxo

a "bank i s not to be locate

t ^ 3*rrin^ th« fact th%t
:. ,re th«r« I s a &«,w*r** Bank

or a branch that iu 0 « cla^ or t*$lYt hour» #r t h i r t y » i x
Hi
hours: r&aoY&d fr^B the ability t3 r«dlsc^unt in

ca»« of

haate, 4 can »e^ ao cMfx-e^u>&^ 01 g^rrica.
I

Ths S^crstar^ ofA^rieultur#:

In

U»c l%rg#r c i t i e s you

wdaia rx&ye no area tuau waul a not ft s«rv«<l»
»
>
Mr# Helntosh:

Kot w w#tild
&

h.^re

m araa that would
o

not

be **r?ed, &aeatt&« ««d«r #or coudition , as 1 haT« tri^d to
point out, ths?

l^avs opam t h t i r correepaadtnet in th««%

Tarioua arsas ir* iai« n^rth miu cjvafehf and with bra&eh**
where the»« area* exint th«y wo«Xd bt sarraa w«ttw thaa witji
a branch r#prft»«srujag ^&* capital of the entire d i s t r i c t
than th«y would be by a baak rt^rossnting the capital of the
other a&ction.
The Secretary V Agricultur&j

Wam» of tht» s>««m« that

the directors aJwuia ^e located there*
f
Mr* Xelntosh:

I t l i not th« intent that they will Ve

chosen, 1 believe, by th* Beserre B«tt^ its*lf •
The Secretary of the treasury:




Jfowt reTer«in- that

;
;

gvdt

C. K. Mclntoah

«M7

argoa«nt t suppose that the headquarters of the bank was
&t Portland and th* branch la San Franciaeo, how would
tli at work?
Hr» lelntoiih:

I t would work as far a* San ?rancisoo was

conesnjed, as far a* i t s ability to u t i l i s e the bank; 1»t i t
shauld b$ with dua regard to th# ciiatwaary eourso of

tasiaoss*
Th*i Secretary of Agricul>ar«t

The roXfimo

of trade i s

hare.

i

£r# Melntosh:

Absolutely*

1 was %p»roachiag th* point

now

&s to "ffhr w« ttiou ht th* batik ahyula be located in Sam
Jfraacisco.

W have t r l s 4 to males i t cl*ar that ths.ro
&

should be a hmk or baaks within that territory*
tried to point out

We hare

that tfctrs ea» be at this tia* l o g i c a l l y

Imt one, and 1 h«d a fow figures hor« to explain why wo
thou^rht i t should be hero.

Thfc gsnUsosji *1m pr^-e-oc m%

(^ve the figures showing ths ^o^alation here.

That i s not

beeao^e of the e l i a a t e ; i t i s becanae the businossis here.
The people ar* hart a33d thii i s where the buaiaess i « being
done, in t h i s concentratsd sxos^

Ths map showa now Uis

I 2 t 24 sad 86 hour zones in a way, and ye)t tliecr ars s o t
sone .




They are »ore.

It Is not cont^^lated that a l l

j

gwh

G* K# *©lntoth*

2K8

the territory withia thss* zoae* are within t«*lv* hours,
«r within twenty four houra, or within

thirty aix hours of

San Tranclsco; but f&«r*Y*r a broak in thfe l i n e
sfoers
i

ths railroad cross* a that l i n e , and that i s 12, 24

and 3d*
**st,

occur a i s

W hw« railromd* north mna
*

:

"' t^n "- the
•>

60 fch-it the fft&tttr** that «xi»t in California a rail*

r©»4 map wo«ia giTt yau v « o l i t t l e infdrB^ticin

about, rho^e

are the towne tth«r* the train a pass at partieul&r hotL^s.
"Kife S#or«tarjf
would

af

%h% Treasuryj

Wsll, <tf eours%t that

bft g«*s* work as to tht %xa#t ti«# to sea* largt c i t y ,

The exact tiae to Salt Lak« City w* don f t knov*

That i s th«

oTDjsct of asking for it*
Mr. Mclntoshi

W will
€

give i t to you txactly.

The figurss

Of ca i t a l and surplus of a l l b*nka r&pdrtini? t* th*
CNtoqptroUer of sns currsn^,
ae of oetofc*r Slat, 1913 t that

1 -o of %* national sank a,
J«
*ad bsfor* to you,

I show that within thtss Pacific States, thl# ar«a t^at ws
h&r% outllnmd,
aaa .
*ntti^

«8 $%r e«at of a l l th« baakiag capital

.- • e v . ~- th* national banking ©a^ital i a in Saa
and t h i s territory*

And that i a aot aeeiatntalj

I t i s aot arbitrary* i t as not b«#attso of condition a sthtsr
thtm i t « n*sdB+



I t i# hori b«caua« the us* f*r i t i s h«r*.

!•*

$• £» Kela to siu

the Secretary of the treasury*
Mr* Helntoeh:
ara sho*n*
will

Yes*

2949

The fact i s i t i s here*

The figures of the deposits in baafc*

This Beserve Basic i * to be % banker's bank an4

clear for othsr

banks*

?h* figU; ea df the d«p«sit«

8h«w tJiat 4B p#r c§Dt #f a l l luuik d«p»dit« with 9th&r l>anks
1

within t h i s territory i s an deposit with San Tr&ncito*

The Secretary »f tfc* Tr^amirys

KaT« you pr«fpar«d any s t a t e -

ment by Stat.ej. flowing to wha& extfont the national tanks in
othar states

&&mp thtir rtamer*a in San yr^ndacot

}lr. i;.cInt0 3hi

'

I h«re a*& pr^ared anythinr: ^3'iowinp: that*

The Seeret«ry of th* Tr%*wryt

I would like to hare that

bv

States shewing the aaount of r*««rys« kept by th* national.
j
banka of £ i< & Pacific Coast states in th« bank* in 8HI
>%
e
j
Jraacisccw
I6r. Mclntoahi

That can only b« don« by th* bsnlc* h#r«» W
#

can prepare that f*r ^«u t i f you desire*
th« S««retary of the Treasury:

W have similar information
©
i

s^^lled by th« other cities*
Wr. itelfttoahJ

Yes, w« ean furnish that*

This 4S per eent

ia not deposited here in 8*a ?raacisco alon* or b^eause Sun
yrancisco i s m reserr* city, because within this territory




#fe

C» K, Me Jn t o s h

39 SO

t3t«re ere 26 ether reserve c i t i e s that are smrrouaded fcy
banks, and feaiueea are earrifcu in these eth«r reserve c i t i e s
then these reserve c i t i e s are vezr saafbrtsmtiaL contributors
to our 48 per c«at*
The Secretary df tfce Tr«a«aryj

I wa« juet galng

we would like to h&r* that ahowa separately*
the
the r*s*rr* ofAthtr cities*
Mr* Mel n t o ah:

to say

W would like
e

I e&n -iire ^ou. t h a t new approxiaately^ but

I van - I T * i t -;o ; ^u aeearatfcly at another time*

It i»

eight or t*n mXllionm «f dell ere at a l l tinfca#
The geeretary of th« Trea»iryt

Will ^ou juat include that

i B ^OUJf .'.t=ii:&i:; ;^t1?

Kr. '.cl^Joh:

Yes, sir, th»sft reeerre cities*

Th* Secretary df the Treasury:
1

Ifeat interest de yem allew

en reservest
3.ir* Kcintoahi

Two per cent as a neraal*

The Secretary of the Treasury:
lir# Melntesh:

What afee-ut checkingt

W have aa rules ana regulations of any
e

character?
The Secretary ef the Tr«aauryj
Mr* Mel^toah*

What i s the practice?

Thfe practice i s to aea^fte

ta c t l l e o t tke

out of pocket e«pea*e %i* hmk* are subjected to &j»ept l a




«*&

0* X* Melntosiu

2951

instances wfesre ths account itself from which the amount
would ba collected justify & remission of it.

There

is no

regulation, no rules each ba nk handles its own affairs as
i t »«ft* f i t .
The Secretary of the Tr+mmryt

That i s rsally in *ffeet

a cheeking or par ring of checks, its
W. Mclntoahx

»©, sir*

fhe Secretary «f ths

It notf

You mean to #ay parrtng of checks?

Treasury:

T$»»

Mr» MelMtOfldi3 Xe, by no m6aa»*
Tht Secretary o

th« Trtasuryj

T^ what extent

w$uld /ou

»ay i t wast
Kr» Hcl^tosh:

I t would fee d i f f i c u l t to sa^ to what extant

prsportiesi&tsl.y amd fee d i f f i e a l t to ^acertain, b*eau»« one
jar*k«8 h i s arraa^tatntp
He

with the gs(rtieul*ur ^»ank or account.

i s subjected to thi« charge in relation to the condition

at the time, an4 i t might 1« changed fro» month to month.
Our general enetesi iato feadeaTor to col Leot actual out
of pocket •3^^nse
The Secretar

frast the account that uses the deposit*

o

the Treasury:

Th« va lu» «f th&t

in^>mation i s t h i s , that i t gi^es us a l l a e upon the extent
to «hieh these b nk clearaacea are a r t i f i c i a l or natural.
Wm Melntoshs




The bank clearances are natural, because

gwh

C. K* Mclntoah.

2992

I

i!

we offer res such f a c i l i t i e s —
The Secretary

of tfe« Treasury:

All bank clearings

now

are a r t i f i c i a l , and of course i t doe* affect the situation.
W hare found in mm% of th* c i t i e s
e
stance, in

hica-o an-f ?f#w Y^rlc, #h^re i t ^a» eho"9tn that

the bank cl^arane«s wars a r t i f i c i a l *
i t s face i t wsuld
tant

of the east, far i»»

Por a

«aall c i t y f on

indicate that Al^bany waa the mosst impor-

center, but i t d€rel©ped that maisy of fchs basics carried

dspoaita In Albany for

aele reason th^fc th«y p^ld in ters-

e s t «n th* «h*ckin" ^cc^iUitd*
Hr* VcJntomhj

3 would lilcs to

that these eoraparisom

c a l l attention to the

fact

, - . / i . j . - ^ b<»u..e•:.-••= r^ur c i t i e s

of ths coast, a l l of whieh cit.i«» pay interest on their
d s p o i t s , and a l l of itiich c i t i e s ar& in th-.

a;i:, ^vaa*

tion*
The Secretary of the treasury:

It i s our custom to

inm i r e in taeh c i t y ths extent to which
lir.Mclntosh:

that i s a r t i f i c i a l .

th^ra is nothing a r t i f i c i a l , because we

hare no such arraqgeaftut as par ring ouu- checks*

there

a penalty ^>on it^ias coming through San Franeiseo for
northern and seutharn points.
Ihe Socretary of the treasury:



Xa what extent do

?QVL

is

g«ti

ktsp your res«nti« i a n a t i o n s hmk* i» San yranciaco?
Mr. Mglntosh: Thsir reserves are distributor* betwoon
K«w York, Chicago and

SU Lo^is.

The Secretary of the Treasury*
th?*t i s kept in
;

»r» Melnt^ah:

tht

lh«t i« ^i€ : &ro«ata««

r^«p«ettr« eiti%«?

That wuld

b« difficult to

t e l l $ but 1

should s&y that out of th? «ntir« r«««rr«« in those thr$«
cilii^S! probably S ptr csat would b# in tf«r York and 35
O
t- 40 per oent 1i ^>1@ago and a aaia 11
fhe Stcrttary of ths fr«a«sry:
!

^r* Mclr^toah:

•

amount in St. Lavtia.

Lee.: in St. Loui«t

Yeg*

15i« S*cr«tary of the Tr#»j«Bryi

You Iw^p about ton or

[ fifteen p§r <soat in ^t. Louia,
I
||

Mr* 3iclat5«hi

|l lactisn^»

ji

hsr©*

Yoo*

That i s lfltrg«ly ae a »attor of col-

W haro not a grsat dea»n4 for St* Louio connection
f
e

Cliicaito oad K w York ar* c^ntfirs for oxciuuago.
®

Th« Soerotar.

.•;" the Tr^asarys

i t la mintr to haT* whfcn
r ^f

tisia

^K*at effect do you thinly
;-3t6a

i s eststbliahed, to

the parring of *xeh&ng« botw««n thoae differoat d i s -

tricts?
Hr. Melnto^n:
i

I ean f t esnceire w« w i l l g#t i t *

The Secretary af tht Troaourys




Particiaarly in thoso

g*H

!

Br* lie In to ah:

C« Km Hslntoah.

2f&4

2 ean*t conceive that we w i l l get a | « r r *

ing ©f *xKh*nf?«*
Th* §#cr#tary of

the Treasury*

So far as the cheeks ar%

C5ncsrn#<lf the dif^^r^nt r*s#rro banks —
S r Melatoish;
&»

Y*s f but our exchange c h a r t s JM^

*•

+B»*an*4 \v th$m who m% «^^ -^miisr® of the Association at
r
a l l t and which w« eannot c o l l e c t throu^i th« a a * e l a t i o n .
In certain citi%« arbitrary charges/aad#» Tho»« charg««
are mad• cametim** " v cl aring ragula t i o n , and wHaatime* t«
b
j u s t i f y e*«t af ahimr«nt#

W w i l l hare ns way of aroi ding
a

those eh*rg*««
2h* S«eretary of th- l^asurys

1 ne f

eakini? aiore

p a r t i c u l a r l y of the «ff«et that w^l<i b#praduced after
thos® rz&*rr*9 diwq?pear — 1 aean the rsssrves in t^e^«
c i t i e s disappear.
Mr* ^clntoshJ

Yea.

Th% S«€r#tary

of t h i treaaary^

Aad the parrin^ of ch«ck

aim e-sr*i*~-ng*« *»#tw#€n th^ r*&«rT« hankg th«asftlT«8»
Mr* Melatoah:

Yea.

Th« Secretary af th« treasury:
w i l l l i k e l y produe*

As to what tff&ct that

«q?on th« j&aiatenane* of balances in

Chicago *nd I « r Torv for *xnhanff« purposes only, w« don*t
know.



gwft

ksow»

C. K. Mel n to ah*

Suppoas

ehceka of one

^r» Hftlnteahi

2965

whan th© reg«iT§ banks are e s t a b l i s h e d t h t

r«s#rr« banfc mast fee tak*n

J ea« eonedlr* of no w ^

at pax by « y

T y which oar
>

acuiY^ baluie«« with a or CAi«&go and #*w York correapondenta
e^n b* ftXiainated*
Thfc S«er^tary of
Mr* Melntoshi

the xxeaaur./:

'Xhv wixx os mtjoiii«d»

they wlix hm &£difis4 to a certain extant

dsubtlfces* b«caas« i t i# aat ^aini.

Th« S««retary $f ^ne irsasur^;
pur|>O9#«.

" rsservfe that fhzy ar*

You k^-^ i,h«n for cxeh

Kow, on th^ oths-r hand, suppose you g*t the

substitution of a sysi&zi of clearances bet^^.n th«s* banks,
as cotit«3^iat%4 W ***• Act, or again at th« present ^ s t ^ a
of alow and tedious ©heeic collection, to «hat extent will
thiKfe abate the nse«#sity of k e y i n g larg«i balaaces in

the«»

e i t i d s for tawJhangft puri
10r# Melntoahi

If i una*rstand yoar quoatlon, the clear*

3me«3 of thft ch€Ci£S on e&aworn eeat*r» f w^uld bo bttweea
thft banks and th# Fsdorai R#*«nre B«k«

theaeelvea.

3*

i t not 30?
Th« Secretary of the Tr&aumry:



Tft0t between th* M*afc*r

gwh

€?• Km KclntQsh

2$&$

banks*
Hr. Melntssh:

I t w i n a^dify i t to a certain extsnt

uri4#u"bt*ui.ty, vuu ... c ^ a o t r«aot^ our s^tstsrn accounts, or
do away with the nscesait^ of maintaining e&chaage fe£Uas*s
thsr%#

Mue^ >" the HBUf&Cvwou good* mquirfe

ma^\ifactur*d in th* t a s t .

>A«re ar«

The fac dries cannot loe*t«

hers an account tf t l « searcitv of popiaatidTi,

u ... ^h«

preeftnt time $nr merchast* that purchase thtir good* *ast
of the mountains at th$ prft«&nt ti^e r«(^iire f r^gire con-*
sidsrabls &nc cas«tant ejcch'inge*
Th« S#erfetar-

-^^ * Uii '^^asury:

lhat d- ^ - ^ thl.n>: «f th«

s^stsm of clsara^ices propes&d " y this Aet *s against th6
b
^ JC
U^ J

itutu for the present ay@tfem of efcaektn^ %n& c o l l e c t s

ionst

Hare y#u at«di«d that?

!fr# Mclntotih:
caurss,

T€at to a considerable ext«nt w« hav««

^i

as far as local eX«%r3**c&s are coneenaeap i t eaanot

3ypero#4« thtau

J aflftfl t^

Mjf th* "Ntnks $f S^n Francisco

w>uld not e3Uar thfemseiTSs through th« IUe«nr* Aaaociation;
2 c^iiui #d»eeiv* that thsy v^^a*
fh& S#erstary of thfc Tr^a^iry:
Mr* M©Into»h:

1 cnr'*

^ppoafc %hf*j da*

<^"-eiY€ that that i s possi^l«»

have to el#ar eheoks u$#a #«^i othtr*




!•

&tk

C» K* Melntosh*

the Secretary of the Treasury:
to two phases of this Act.

357

3 willoaai y&mr attention

You represent th* Clearing House,

do you?
Hr. MclntoshJ

Ys3 t sir*

The Secretary of the Treasury;

Mr. Mclntoj&t, on this que»~

tion of elearane«« 9 we «r#uld llk« to 3u"tealt a question to
t v e clearing hou#«, as« ve miteittftd t« th% clearing h«us# in
a l l the c i t i e s *

Section IS of the Act provides, on paf?« 19

t . ^ t , "The fftder^l Eesenr* B»ard

i i a i ! mak# and pr#3®ilgats

fr^a tij-ie to t i s s rsjsmlatisaa goTerning th«

transfer of

funds and charge* tto.tr*?or maimg federal Bsserrs Banks
and thsir "branches, and may at i t s discretion

sxsrein* the

functions *f a elearin^ h«uas tor such Federal £teserve Ban :<af
or may designate a Federal Bes«nr« Bank to exercise such
functions f and »ay al»» rea.oire each such bank to exsreis*
the functions of a clear in? house far i t s msafcer

>5«JCS**

l\ro^, we should be glad if i/^ clString hou»a ef San
Trancisco would cons' &*r that prOTisidn of ths Aet «aid
aufcaait to th4 Ct&jiaittae at your e a r l i e s t convenience, not
l a t e r than March 1 s t , a V i f f «f your visws as to ho# ttiat
best miirht he earri^d aut#
Mr. STeJntoatu



1 can t e l l y«ut Mr. Secretary, that as far

g*h

C. K. MelntOish*

29^g

5.3 the clearings Det?re«si m&Bber Denies art conc&rntd,
th*r« &r« other things
Th€ Score-tor?

of ^

to consider,
•

--.^:

that w« ^articulsrly cars to

1% i« not a

mitUr

t this juncture,

liut

m«r«lv to g«t you to consider th« qu*«tion ami suteit a
brief $n i t ,

beeaa** i t i s & irtry iaaportant proposition,

ana w- *gjit tne yiewe of th« di.ff«r«nt cxtari

. -r?

t h i s sttbjtet*
Mr. --C i !>v;« ..!: :
fh# Secretary

'-r-rv *'r/iit

^ r j I Wiii. prtsetat i t ,

of the Treasury!

I «oula l i k e to a&£#

©i«re i a another qu%ation

Soetion ' J - * the Act proriafes:

•Upon the endorsement of sm> of i t s mo&b«r b«tks 9 with
a wair*r of doaaad, ---Met ami pr«t«at by «ach bank, any
?6&6ral iLGmrr*

Bank may discount n o t e s , d r a f t s , and

b i l l s of Gxcnan£<i a r i s i n g o
actions; that i s ,
issued or ora^

actual eoaoftr

">-rm»-

notss, drafts, ana b i l l s of exefeftug*
^ricultur«l f

industrial t or o«JBffl*rcial

purposes, or the proceeds of which haT& b*«a u««dt or art
to b-o ueftd, "or »u«h purpos*a, the ytdoral Re«enr« Board
to hars th?: right to d«terainfe or d*fin« tho character
th« $%&*r thus e l i g i b l e for discount, within th« Meaning
of t h i s AeU*



)

gtfk

$• Km M In tosh.
e

2959

S*vf m proper definition of essnmsrelal paper i s ons
of **eat ia^ortance.

p

£h& *ttb4*et has to b* c o n s i d e r s r*ry

ear* full* by ths ?*4«ral Bossrvts T»ardt when or^anis**, and
•so are asking ths

commercial ootii&s and the different

clearing hoases td con aider that suestion alao and submit
a brief giving their views and du

,isn# a« to tmat i *

a proper G^finition &f cmmmreiml p .
ioa of gueh a standard ©f

, md also a «igg«flt-

farm far different chartst*r« of

n s t t a , b i l l s of weehange, and

so forth, % wool a be best
«

ulted to th« operationd of this ?*d$ral Bea«rye Syst«A*
Aad in ^tat connection, therfe &r&, of co\irsfi, in thft»t
igifferent eozamttnltJlssf particular l i n e s of e«ssa«rei&l paper#
bfsr instance, on* pl&e« would gtt o a t t l s , another placs
would g*t Xwaber p«p**rtan*thsr plaoe would

got fi*uit

^%p*r, 30 to sp*akf and i t has bees t&alifiod that thero
ifas a certain eharacter of pap*r based upon other ^>oda.
:4a to thos* partiealar or specific characters of papor,
|w# should lUcs to hare sUFg«****a® ssMio defining the form
now in us« or that should be U8*d»
•••>• 4elnto^is

Vor^ w s l l , s i r .

W had conaiaersa that
«

the ehansrs in th* •erbiagt of that *n« saction from tha
original T*rbiags mad* i t apparent wi&i was intoadad, that




gait

» *

that pap«rfttMftdL*e#n«i«t of that whieh ha* b

#r

would b* used in ths e«aa*reial traaoaotiona in the carryinsr sn ©f the business of th« cozrammity*

Bat we will &
o

verv ? L 4 t© consider that w«i giv* you «ur ideas ia rsgmrd
?&
td i t *

1 can $«s that th«rft mi^it V« mam qtt*«tion in

rsgard to that % ths law n^w r%ad«,
3
T>»# S#eretmr^ of Agriculture:

Th« adraatage «f

hie i s

that i t i s l e f t to adminlatratiYe interpretation*
&?• Meinto^i:

You would l i k « a hri*f?

t5i« Secretary of tha

Treasury:

^iggestioos not or*l# as t-o

T«s«

You can sak« your

"^rmt but •« to ^AW i t can

hz best d^>ne.
Mr# ^cl?ito«h!
transactions,

Yss.

In that eonn^otion, •p«»kiii^ of our

th« ®kn pr&neieeo banks «*rry th*ir owa

L#ndoa &* ^ i * n t a l balances.
ru

W dea*t do that throu^i
§

&ndthar csntsr, *n& t h i s ohart that waa shown y»u, A«win
th* |>#a*l*«« *f th« crowing »*a«on i «
aeaaon lt»ftXf *

r«ally th* cropping

The baoke are aot rsli6T«a of «*«h at this

time, but i t i s ca^i that «an b* *tili52*4 for th* purp**«
of thi* Act.

Th^ Lonoon aecoimto *l»w th« TOlunft of

Lonaoa ouaino#^t %«4 »• «« :
account*.



1 m&jcs

r i r owtl
>

L*n**"

%Bd

Oriental

3tat«««at a*r%ly to ahow too

@ X* Helntoah.
*

3^1

character of our bank* and ta« sort of paper we ^»e#
:w* e*n

But

f i l e such & brief i f y»n desire,

the Seers t*ry < ' "~«, fr«%^ryj
^

Y««.

It

iix t « of
>

material assistants* to as*
Th* Sscretar

~r th« Trtasuryj

fh« M i l pr*Tid«e y#n

«gr «»ta"blish foreign tnachta.

Th« Sftcretwry «f ths fr««fc»ur>rj
aaT«ntag« to any of
to th*

I s thafc l i k ^ y t* fee of

- - S»n ^iftncisco baak«9 with r«^#et

CN^Itt

Mr. MelnIdah:

Ve

because the tr*dt of thi

Orient Is largtl>Teent«rs<l here.
indfefea that i t w i l l

It i s very l i k e l y

of gr&*t j^vantagt.

strong Oriental banks.

Their bud rises at pr«»fcnt i& on«

that i s peculiar, yos kn«w, anel i t i s
ths hands 9f stron

There ar#

uad*rat>oa to b* in

p&opl* who Har* th*ir branches h^r«

for the ptirp#e» of taking n&rt of this «nd of th« Ori^ilt al
business #f cr»4it »o4 #r«dit »achin6ry»

yor th* p«r»

p^ses of purelia«in>r thf. b i l l s to cars for th* exported
material a »f th« Btsitt.t and for the purpos* of

furnishing

the credit aachiaery to -l?rla«r in th« laport* into the
St»t# # the San yranciac* banks today attend to that,




they

g*&

C* Km Molntoah*

<io tli a* wrle*

2962

These oth&r people are l a the open

market,

these foreign b&-—*: th#^ bay the M i l a and fum*^:
credit ismehinsry.

But the Ionics in San £ranci*e» fumiah

the credit ^Mhiiifery u«*d against their London balance a
for th« ii^#rtati©n t»f stuff that com eg fr^ia Ori&ntaL
parts; fett th* ability to tatoblish branehea in th« Ori«at
ma& b« T*ry ral^Able in tiste to COJH* to th*

bmnke of Sui

Tr^^isoo, B«e«4#6 t^eir eonnections are mtJjaate ther««
1 h*T*ntt anything further particularly to e*y axc«pt
that for th« r«a«9n« stated hitherto, thmt of cotnparatiro
isolation of t h i s territory «nd th« figures of capital
and distrf'bTitlaa af capital, anrt ths diversity of the
d i s t r i e t indL wit«dt thers can os

out ono bank.

?or the

reasons rif«iiv sliswint-' th* euatOBiary eo^rss of business
as centered, the financial operations in San Francisco,
&s the other fm*t»t we feel there ^io«ld be but
rd
one bank in th&t d i s t r i c t and that should be here at
Saj3 Francisco,
If there are vn& other questions, % should be gla4
to answer

th^ai if 2 earu

The Secretary of thz Treasaryt
%Into«h,
is



Yata mi^it suggest, Mr.

vherft v«o think the branches should be placed

2963

G. K. Hclntoah

If * federal Bank i s loaoted in San ?ranoi oe.
c i t i e s or important canter* in the d i s t r i c t would you
locate the braneheet
Ur. Mclntoah:

I think that branches should be placed as

conditions develop tlieir ae«*»sity.

Two branches Bight

be necessary in the north, one in the south, and one in
the eastern part of this te

itcry.

Salt Lake should

have a branch and Los Angeles should undoubtedly have a
Branch, and either Portland or Seattle, or both should
have branches, depending on the needs of th« service.

If

they were not served properly # there should ba a branch.
It i s to our intereet as aach as i t i s to theirs that they
should be served.
The Secretary of the Treasury:
Mr. Mclntosh:

I think that i s a l l .

If I nay be permitted, the superintendent

of state banks i s in the roan, and I think he can give
you oo«e s t a t i s t i c s that will be valuable tc you in regard
to state banke, i f you care to l i s t e n to i t .
The Secretary of the treasury:
hear froa him b r i e f l y .




W n i l l be very glad to
e

•

Aiden And*rsen

3964

STAGIEST OF ALB!* AWBER80H.
Th« secretary of the Treasury:

Mr, Anderson, give yv«r

f u l l naae and address?
Mr* Andereon:

Alden Andersen, Sacramsntc; Presidsnt of

the Capital Rational Bank, and one or two others.
The oacratary of Agriculture:

Were you the State Cos&iss-

ioner?
Mr. Anderson:

I was the f i r s t Superintendent of Banks

under the Banking Aet of 1909.

X a& also delegated to

attend thie as«ting by the Saeraaente Clearing House, along
with Mr* Beloher and Mr* Henderson.

Would you like to hear

f i r s t the position of the Saoraaento Clearing House, the
associated Banks?
The Secretary of Agriculture:
Mr* Anderson:
Clearing House.

Tee*

All the banks hsrs are intereeted in the
8a*rsaente, as you know, i s about 90 » i l s s

from Ban Francisco, and about three hours distant*

I think

probably the quickest way I could give you the idea of the
banks there would be by reading a l e t t e r prepared by the
Cpnaittss:




• •

Aldan Anderson

8a«ra«anto# Cal., January 31»t, 1914.
Hono D. F. Houston,
Secretary of Agriculture.
Hon. W G. McAdoo,
#
Secretary of the Treasury,
Composing the Be serve Ban* Organization Coral t e e :
Sir*:
The Saoranento Clearing House presents herewith the
following data and figures for the record, which Kill give
you an idea of the financial, agricultural, and hortleultural
interests of t h i s part of the state aad will help to
eaphasiza the

eed of having the Reserve lank in San

Francisco*
Sacramento la the capital of the state of California
situated ninety miles from San Fra&eisoo on the Sacramento
River, which i s navigable the year around*

It has two

transcontinental railroads, the Southern Paclfio and Western
Pacific, and a nu*fcer of interur&an lines and feeders for
the above mentioned trunk l i n e s , waioh connect wita all ths
important points to the north# ea»t # south and west.
The total hanking capital and eurplus of the city of
Sacramento anounte to |5,000,000.QG; Undivided profits




A Id en Anderson

$854,000.00; CowaQrcial deposits £l?,000,000,00; Savings
Deposits $17,000,000.00$ Total Bank reeouroes $43,000,000.00
Four national banks, three comae re ira atate banks and five
savings banks.
The total bank clearings of Sacramento for the year 1913
were $108,368,688.3*.
The average Monthly total voluae of business done by
the bank a of Sacramento i s vary nearly $45,000,000*00.

The

average voluae of business per month sent to the following
c i t i e s la as follows:
San Francisco

#8,933,434.00

Hew York

718,000*00

Chicago

683,400.00

Seattle

300,000.00

Salt Lake City

117,000.00

The nuaser of banks carrying accounts v*itb banks in
Sacraaiento eituatsd in California, Wsstern Nevada sad
southern Oregon are 304 j
banks.

114 national banks and 190 etate

The number of banks in this territory ae sho*n oa

the map contiguous to Sacramento are 150.

The ban** -uriag

the crop moving ssason, which is froa Fsbruary tc July in
this d i s t r i c t , *ave borrowed as high as $3,000,000.0% Ths
total capital and surplus of thess banks is |30,310,360.00



Alden Anderson

f£f?

and the total deposit* ttl#i0O960O,OO.
The State departments traneaet a large volume of businees
In thit city and i t necessitate* a great number of bank*
throughout the State carrying aocounte in this city.

The

total volume of buainsss with the State Treasurer1 e office
during the year 1913 ie ae foil owe:
Receipt*

$34,655,3*9.80

Disbursements

35,539,493*44

The above includes 14,000,000.00 received fro* bond eale«
Sacramento ie the distributing center for northern and
central California and W e tern Sevada and hae ten Million
e
acre* of f e r t i l e valley and foothill •oil*
of the deciduoue fruit growing district.

It ie the center
Ovar 785 of the

deciduous fruit oi the entire etats i s produced within a
radius of fifty a i l e s of the city.

There wore 15,000

cars of fruit shipped this last season at a v*lue of
#18,000,000*00,

During the aonth of July, 1913, there were

30,377 cars of freight shipped in and out of this aity;
during the month ©f December, 1913, there were 35,634 cars
shipped in and out of this city.
There has been spsat in ths last few years nearly a
billion dollars in i&proveaests in this vicinity, such as




Aides Anderson

3966

I reclamation projects, railroads, etc*
I

gacraaente Is a Jobbing ©enter doing betwasn thirty and
forty B i l l i o n s of business annually.

The Sacramento River

j; stands fourth among the rivers of the United States for
tonnage carried*
Attached hereto are paaphlets giving the s t a t i s t i c a l
information regarding eone of the aattere which have been
aentiened above and giving same in f u l l d e t a i l .

In addition

thereto the various crops sad industries of this section
are mentioned©
Respectfully submitted,
Anden Anderson,
Special Committee*
I . A* Brown,
Secretary of Committee.
The Secretary of Agriculture:
Mr. Anderson:

What about the state banks?

That i s the point*

I hezrt

the inquiry

you aade of Mr# lielntosh, and there i s a l i t t l e item there
that probably you do »ot understand, and which will have *
considerable relation to their attitude in joining the
Currency Hsserve Bank.

Under the California law nobody

i » psnsitted to advertise or elai» they have savings



A Idea Andersen

3969

deposits ualess thsy are qualified under the stats law.
Heretofore the ruling of the Comptroller has been that the

not
national Act did/spec i f iealljr permit the carrying of savings
accounts, therefors ths State Superintendent of Banks has
ruled that the national banks did net have the right to
carry savings accounts or advertise for them.

They have

carried them under time deposits, out of course, they are
not on a competing basis with the state banks.

The State

Law of California permits departmental banks; i t permits
s t a t e banks to carry a department which Is absolutely independent of the other, under one Board of Directors and one
organization, and they w i l l have their commercial department
and savings department.

As Mr* Mclntosh said, there are a

great many things In California in process of development,
and i t requires long t l a e loans, and accounts in California
are probably not as liquid as they are In the central or
eastern part of the country.
out they generally stay.

And when they get the loans

The etate banks that have ths

savings departments, although they are permitted by the
s t a t e law to join the Currency Act, might be restriotsd la
their endeavors to get money to loan out on those long time
loans, and i f the oonstruotion of the Central Reeerve Board



AIdea Anderson

3970

should he that the national banks could advertise for savings
accounts, there would be a considerable number of the stats
; banks that would go Into the currency measure*

I think that

ths general tendency would be that ths larger banks would
go in under provisions of the Act, bsoauss i t has bsen very
favorably received sad considered by a l l of them.

But ths

s a a l l e r banks w i l l probably h e s i t a t e , because the fact of
these savings accounts being necsssary to handle ths business
has eada pretty nearly every national bank in ths state to
a greater or l e s s degree a f f i l i a t e d with state institutions.
|

In Sacramento, for instance # each national bank except
ens has a f f i l i a t e d with I t , soaetimss with absolutely the
sane d i r e c t o r s , a s t a t s bank devoted almost wholly to savings

I account**

AM i f those banks that ars affiliated do not

go under the Act i t w i l l be simply because of ths fact that
they f e e l that ths national baaks will taks cars of their
needs and requirements*
W w yen asked the question of Mr. Mclntoah with rsspect
o
to the rc-diseounts # and what he said applies vsry correctly
to Sacramento*

There has been a sentiment against re-

discounting, but when ths banks up thers needed money they
borrowed i t .




ths tendency at Saeraaentc, I think, has

Alden Anderson

3971

bean to borrow more aoney In the cast. New Tork and Chicago
rather than in San Francitoo.

l o t because there irae any

disposition— and aa you oan eee 9 the volume of business
i e with San Francisco— but siaply because the rates were
a l i t t l e cheaper and their relations are in that direction.
W are in the centre of a producing section.
e

I was at one

t i a e sanager of the Fruit Distributor©, which shipped about
85 per cent of the deciduous fruit of the state.

All of

that business concentrated in Chicago, and New York, and i t
brought the banks in closer relation with thea, and they
could get their noney a l i t t l e cheaper*

But they nevar

discounted, that ie one of the things we like about the
new Act*
The Secretary of tha Treasury:

I t makes re-discounting

reepeetable?
ilr# Andersons

Respectable*

Our highest deposits up

taers are Just the opposite froa the south and Middle f e e t .
The highest depe i t s cose along in Hovembsr, because that
i s the time we have realized on our products*
e s s e n t i a l l y a producing section.

W are
e

W aave the nines and the
e

timber, but tae production of the other products ie increasing very rapidly.



As the Panaaa Canal i s finished, i t would

Aldan Anderson

3973

s e e * to accentuate the position of Sacrassnto as the clearing house for a l l this part of the territory.
The Secretary of the Treasury:

W thank you very smoh,
e

Mr* Anderson*
The Secretary of Agriculture:

I think perhaps we had

better hear fron the telephone teenager, i s he here?
Mr* Janes K. Lynch:

There are just two gentlemen who wish

to appear as witnesses*
The Secretary of the Treasury:

Do you wish to sake a

statement?
Mr* Lynch:

I do not wish to appear as a witnsss, but to

have two other gentlemen who are here.

One i s Mr. M*pea,

President of the Reno Clearing House, sad who i s co*petent
to speak for ttoe State of Hernia; the other is Mr. E. f.
Wilson, Manager of the International Banking Corporation,
who has lived in Salt Lake City and has communicated wita
the banks of Salt Lake# and has a amber of eoaaunioatlons
which w i l l be of Interest to you.
The Secretary of ths Treasury:
of Reno.




W will hear Mr. Mapcs,
s

G. 1 . Mapes.

09T3

STiTwnrr OF GEORGE W# MAPES.
The Secretary of Agricultures Tou may state your name
and reeidenoe?
Mr. Mapes:

oeorge w, Mapes, Reno, Nevada.

The Secretary of Agriculture:

Tou represent the Clearing

House Association?
Mr, Maps*:

Yes, s i r .

Here ie a note.

The Secretary of the Treasury:
Mr. If apes:

Just read i t .

This i s the resolution (handing paper*)

The Secretary of the Treasury:

The 3eno Clearing Rouse

wants a bank here, and wants to be attached to the Reserve
Bank in San Francisco.
Mr* Mapes:

That i s the substance of the matter.

Tea, s i r .

The Secretary of the Treasury:

Is thsre anyone elee here

who oan speak for the hanks of levada?
Mr, Mapest

Well, we had a asetiag there and this is the

resolution which was adopted.
The Secretary of the Treasury:

Will you read the reso-

lution.
Mr. Mapss:

I MI not a very good reader.

The Secretary of the Treasury*




Mr. Ceokaey, will you

G. W. Maps*

39?4

please read the rseolutlon*
Mr. Cooksey:

(Reading)
KEHO CLEARING HOUSF ASSOCIATION
Organised 1907.
Rene, Nevada, Jan* 30 9 19X4*

Mr* Gee* W« V&pee,
8aa Franclaeo, California.
Dear Sir;At a meeting of the Reno Clearing House Association,
held this afternoon, the following resolution* were ananiaously adopted:
RES0L7KD, that «e respectfully petition the Reserre
Bank Organization Committee to designate San Francisco, as
one of the Reserve cities for the establishment of a Federal
Reserve Ban*, it being the natural financial center of the
Pacific Coast*
RESOLVED, That this Association for its nemher sank*
hereby petitions to ba included in the District estasllehing
8an Francisco as the location of a Federal Reserve Bank*
RESOLVED. That Geo. F. Mapes, President of the Washes
County Bank of this city, be appointed the representative of
this Association to attend ths meeting of the Reserve Bank



\

I

I

Go W* Mapes

3975

Organisation Coaaltte* be held in San Francisco, February
2nd and 3rd, 1914.
These resolution* express the eentlment of this Aseoelation In this aatter, and this letter will fee your author*
ity to represent the Reno Clearing Ho us a Association at the
aseting of the Reserve Bank Organisation Coaaittee on
February 2nd and 3rd*
Respectfully,
R» C, Turrittin,
President*
If, D. Fairehild,
Secretary.
The Secretary of Agriculture:

Is anybody here who asm

speak for the other banks In Nevada?

This dimply speaks for

RenoT
Mr. Mapes:

I do not know of any one*

Of course, I got

this this BOrnin« by mail. The Banks of Namia, a large
number of thea, belong to this Clearing House Association,
and as I understand, this is a nesting of that association.
You take all the ban its, you sight say, of Nevada, they are
correspondents principally with San Francisco or the west.
There has been so«e talk sf having a Regional Bank there in



•

«• W. Hapes

2976

Carson, wfeloh would fee but a short distance froa the town
of Reno# 35 mile©, but most of the banks in Nevada, I think,
have their correspondents principally here in San Francisco*
The Secretary of Agriculture: You thiak that represents
the aentlsent of the banka of the state?
Mr* M&pes:

j think so, yes, sir*

This oaae to you,

I did not expect to represent the banks here at all* The
bank that I aa an officer of or president of is a stats
and
bank,/of course, we are eoaewhat undecided in regard
to the different opinions of even the different Speakers in
the House of Congress; they do not seem to be as well
posted as they »lght be or ought te be* And our correspondent* —• I aa the President of this Washoe County Bank
at Reno, Wevad*, and the other b&nks in Rea© are national
banks, &ost of them, and they belong to this Clearing House,
and even the banks at Ton*pah and banks scattered throughout
the State, like at Clko, are aeabers of the Clearing House.
The Secretary of Agriculture?

Ie there any restriction in

the law of Kevada tdiich prevents stats banks from subscribing?
tfr* Mapes: Tee, you might say they aro prohibited at
the present U » e , the way the law cf the state is, but that



•

0. W. Maps*

atTT

H perhape aay tee oh ringed at the next Legislature.
The Secretary of Agriculture!

W thank you very «uch#
e

Mr. ifape a*
Mr* Mapee!

That le a l l I can a ay.

I have nothing further

to eay.
8TATQneiT OF I.W. WILSOI*
The Secretary of the Treasury:

Will you pleaee give your

f u l l nass and address and occupation?
Mr* Wilson!

£• W Wilsoa f Manager of the San Franciaco
*

Bank of the International Banking Corporation.
The Secretary of the Treasury:
Mr. Wilson:

San Francisco*

Tou reside where?
I lived in Salt Lake City

at one ti&e.
The Secretary of the Treasury:
Mr. Wilson:

How long since?

l i n e years, practically*

The Secretary of ths Treasury:

Bo you repreeent the Salt

Lake City bankers at all?
Mr. Wilson:

Hot at a l l .

i have seae tslegrasis here and

information on the subject*
The Secretary of the Treasury:
Mr* Wilson:

from them.

T^e Secretary of the Treasury:



froa «*©«?

Sutoeit them.

I« W. Wilson

I

Mr* Wilson:

2978

And fro* southern Idaho.

i

:

The Secretary of the Treasury:

Are these voluntary* or

aave they been evoked by inquiries?
Mr* Wilson:

they are a l l replies to telegrans.

The Secretary of the treasury!

F*ve you the original

telegram, or copies which you sent?
Mr, wiieon:

Yes*

The Secretary of the Treamiry:

File the copies of the

i;

ji

j telegrams you sent, with the replies.
:
Mr, Wilson:

Shall I read the* to you, or Just file thea?

j The Seoret&ry of the Treaeury:
j

Bead the telegrane to which

these replies are the responee.
Mr. Wilson:

This Is a telegram to the Governor of the

1 State of Idaho, at Boise, Idaho, John M. Hainee. He has
also been connected with banking In that district at Boise,
and has been a resident of the etate for about 35 years and
is quite well informed, I think*

This is the tel«gra» I

sent hist
•Regional Bank Organisation Comaittee hers Monday,
| Would appreciate night letter f ro« you expressing personal
)
it

ji opinion as well as opinion of the loading bankers of Boiee
as to whether southern Idaho should not bo attached to thle



*. w. Wilson

territory.

3979

If not now at least when Canal la completed and

projected railroad extension from Hsvada into your territory
built.
1. W. Wilson*
This is his reply:
•Boise, Idaho, January 31et, 1914.
E» W, Wllaon,
International Banking Corporation,
San Francisco, Cal.
Every ons hers believes San Francisco should have Regional
Reserve Bank.

If sore than one is located In west we should

also support seas town nsarsr our territory*

If the west

is not ts have wore than one bank there can be no question
about the priority of San Francisco9 s clalau
John «. Raines#
Governor*1
I telegraphed MeCornick & Coepany; that is ths oldest
bank in Salt Lake City, and Mr. MoOomick hae been in the
business there f o r —
The Secretary of ths Treasury:
Mr» Wilson:

That is a private bankt

It is a stats bank now. He has bean in

fcuainsss thers since 1869, I believe*




-j

The telegram was

E* W. Wilson

3980

aim liar to the one I sent to Governor Hainee, and it 1* as
fellow* •
The Secretary of the Treasury: Have you a copy of it?
Mr. Wilson:

It is attached to the back of the answer*

•Regional Bank Organisation Coaaittee here Monday*
Would appreciate night letter from you expressing personal
opinion as to where Utah ae well ae southern Idaho should
be connected*

If southern Idaho business can he bandied
will
better elsewhere at the present tine/there be a change
when Canal is completed and promised railroad from Nevada
into Southern Idaho ie built*
t% *• Wil&on**
The following is the reply:
•Of course our first choice for a Regional Bank is ?alt
Lafca, second choice San Francisco, Do not think a railroad
frose Nevada to southern Idaho or the completion of the
Panama Canal would sake a particle of difference to Utah
or Idaho*
MtCornick & Co., Bankers*9
The Secretary of the Treasury: That is the first man we
have heard yet who did not think the Panama Canal would
solve the whole situation (Laughter)•



T. W. Wilaon

Mr* Wilaon:

8981

This la a reply iron ths Pingree Rational

Bonk of Ogden*

I sent these four telegraae because these

banks are all interested la Southern Idaho;
•If we cannot have reserve bank in Utah favor Saa
Francisco first,

Denver next. Believe Idaho9s condition

very similar to ours*

I wish you success*
Pingre• national Bank."

The Secretary of the Treasury: He prefers Deaver second*
Mr*

Wilson: So» "If we cannot have reserve bank in Utah,

favor San Francisco first, Denver next."

low this is an

exception which I think provee the rule*
The Secretary of the Treasury: And la fairness you want
to read that?
Mr. Wilson: This is the only one I have. It comes
from Hr. Congriff. President of the Continental national
Bank of Salt Lake City, who is interested in Idaho banks
%n& in Wyoming banks, and in one bank in Denver*

He says:

"Laying all ssntlaent aside and after serious consideration I ass firmly of the opinion that Utah and eouthera
Idaho should be within the

Chicago district and neither

Canal or railroads will change the situation for a generation




J. E. Con&ltt*9

£• W, Wilson

3*8*

I telephoned Saturday to Mr. Cains, the managing
director of the Oakland Chamber of Commerce, who case here
from Salt Lake City about six months ago, m& vhe was manager
ox the Salt Lake Cham bar of Commerce for four or five years,
and prior to that waa in the Banking business. He writes
as follows:
•OAKUWD COMMIBCIAL CLUB,
Oakland, California, January 31st, 1914.
M2% E. w. Wilson, Manager,
International Banking Corporation,
Mills,Building,
San Francisco, Calif*
Dear Sir:
In response to your requeet for aome reasons why Salt
Lake City and the inter-mountain country should be included
within ths sons of a regional bank to bs established at
San Francisoo; I beg to submit the following:
Sinee the earliest days San Francisco has been a rsservs
center for the banks of the entire inter-mountain district.
Most of them have carried heavy reserves in your city at
all times. A study of bank balances carried by the banks
of ths inter-ttountain region would show Hew York first in



2« W. Wilaon

amount, Chicago seeoztd or third, San Francisco second in
eeoe ease* and third in swat of the others.
Conditions in very early day* justified the establishment of & branch bank at Salt Lake City by the old WelieF&rge bank of San Fraud see.

There hare bean so&s ai&n^ea

in trade oenditlcns since then, but with the opening of the
Paaaxaa Canal, the pendulum will awing back again.
It i e self-erident that with ohea^ wafer ratee» Aram
Surepe and the Atlantic aeabcard to the Pacific Coast, the
entire inter-ottsttain region will turn to San Francisoe Ba-y
ae the natural jobbing center*
The relation* of Central California with the interKttrataln weat have aluay* beem soeet cordial and the new
condition a brought about by the opening of the oanal will
tend to bring tfeeee diotriota oloeer together in a l l their
bualaees relations.
8e»e weake ago* I sent telegrame to the national banks
of Salt Lake City and G-;d«n asking fer •& eJ^reeaion of
preference and I am pleased to hand you th@ raplies herewith.




You will note that while aome of these expres* a hope

D

1. ¥ . Wilson

9*84

for the aatAbliabment of » regional bank In Salt Lais City,
they a l l exprea* a ^referenoe far San Franciaco aa against
any other «i*y.
19 mm «xperionoe In banking i n Salt Lake City slid a
large aottfuaintance throughout the ist^iMso^f^taia weet le&ds
me to tii* conoluaion ^bat a l l the d i s t r i c t included in the
ftt&tee of 0t«h # Herada, Southern Idaho and Western Wyot&lng,
should be included i n the San Franeiaoe a one.
Very ainoerely ycur»#
Jofte^i S. Caine,
SHMglns Director. •
How he eMleeee a copy ef the telegraa of inquiry that
lie aent.
The Secretary of the Treaaury:
Mr. Villon:

that l e that?

Head that.

I t i » dated Deoe^er ^7th.

•(^ieetlon ef locating regional bank In am Franciaco In
preference to ether coast points apecial order Baniu-AroundHarbor meeting her* loaiay.

An axpr#a«ion from y&ur bank,

or from you personally to ma farorlBg San Franoi^oo would
be greatly a^preolated.

Answer c o l l e c t 4U| y »#**&£« Mondajr

iLorning.




#«NNI

X. Caine, Kbmaglng Director,
Oakland C©assert!al Club.*

D

E. W. Wilson
Hera i e a reply from the Preaideat of the Deaeret

Rational Bank of Salt Lake City,
•The Deaeret national Bank favora Sun Franoiaao
for Regional fttnk.
John C. Cutter, •
ind from OgdcRt
•We certainly f&ror San Franois$o for Regional banking
In prafsweaae to easy ether co&3t c i t y .
Fir^t Hational Bfink,*

Here i s one from another Salt Lake City Bank:
•We etrongly fav«r 8aa Frajioisoo, the geographical
and financial center ef Pacific Oeaet ae the proper location
for a Regional Bank,
lational City Bank,
W F. Adame# Vice President. 1
«
The following i e frosa W W. Armatrcngt President Sational
«
Copper Bank:
•We are rery hopeful that a \mited syeteaatl© effort
of banks and b a s i n e t intereats in t h i s tnter-^ountaiJft aecUom
w i l l be inaugurated to land a regional bank for Salt Lake,
f a i l i n g i n that am convinced that Utah banxing a &
a d
oe«a«rclal inter set* will be practically unaaaimoua for Utah



3

! • V. Wilaon

to be Bade part of territory under jurisdiction of regional
bank located i n San Francisco,

Consult Wilson in re ay

views.
W. W, Amatrong t
President, Hational Copper Bank,"
Mare i« the reply from Hr. J, Coagrif f, Provident
Continental National B&nkt gWt I»aka:
•All intereata here an4 ^unrounding territory urited
i n prociotin* tolt Lajfee^ clair for Hegienaa Bfcnk."
Here i s a l e t t e r from rrank Enoxt dated Deo ember 30th:
"Joseph E. Cuine, IteiMfcging Director,
Oakland Cotmercial Club,
Oakland, Calif.
Friend Joe:
I received your night l e t t e r but aa our Gle&ring
House Aeaociation wae to hold & meeting to-day to take up
the <juestion of securing a Feiaral Reserve Bank for this
c i t y , I did not knwr t^at reply to sake, farther than that
the organising ooELittee h&a not

segregated the United

Stated Into eight or twelve d i s t r i c t * y e t , and I d# net
knew what section of the oounfcry we w i l l be apportioned to;
i f to a aeation taking i n Sas Franciaoo, perwmalXy, I would



V

V-

9w

M^

vf4

WF^WBP^H^WW

SW^V^F

be in faror of that c i t y , although we are instructed to
seoure #a$ hare; of course, I a&not giving that any
-onsi deration, because X do not think there would be a
chancy as£ San Francis©* would be the beat plaee tor ue«
Denver i s also aafclng strenuous efforte to secure i t .
Cannot t e l l aawtMni* about i t until I eee tha report,
Youre Tery truly,
Fran* Knox,
Preeilcnt, 1
Hero i s a telegram iTrem Jamee Pingree of the Pingree
Mationaa Bank, Ogdmt Utah:
•Shall be very pleased to aid you to obtain Eeglonal
Bonif fer S«i Francisco.

Hope you will be auccasaful.

Beat

wialiea.*
Here i » a l e t t e r fro® the First Sational Bank ui j^-ian,
Utah, ef December 29th:
8

Mr, Jos, K. Caine, Itaaging Director,
The Oakland Coes&erolal Club,
C^&land, Oalinrrnia.

Hy dear Sir:
Replying to your night l e t t e r ef the 27th i n s t . , beg
to advise that we today wired you, oonfirasatioa of which



D

X. W. Wil*m

»« fee* to «noloe« herewith.

We have bean receiving re-

quest • for assistance in getting the Bank legated at Denver
but up to thia tXmm have not ssa4« up our wdndm which
location would be meat favorable to the Inter-Mountain
Country.

Ho**r*r, of a l l the e&ast c i t i e s , San Francisco

i » our choice entirely.

Your* Tery truly,
John Pingree,
techier.*
Just a word with reference to southern Iciaho,

The

distance from Boise City by way ef Qgd«e here now l e 1132
a i l e a , with, a contemplated road tfhich i s a proepeot a» yet
tout wfeieh w i l l oertalnly be built as a m t t e r of necessity
that w i l l reduce that distance to ?83 miles.

The Twin Falls

country will toe reduced to aeren hundred odd sailed*

Ae i t

i s now# th«y go to Qg&cfr and then around to Boiee, which la
about 400 miles«
The Secrstary of the Treasury:

Meet of the Boise banks

who appeared before the Consult tee at Portland, favored
Portland as against any ether place*
Mr, Wilaoni

T«99 air*

The Secretary of the Tre&eury:




But they favored

Francisco as second choice?
Mr. Wilson:

That i s a l l X desire to say.

The Secretary of the Treasury:

Hew £© y©u feel about

the part of Utah oast of the i&ountains?
Iftr. Wilson:

There are only two or three hanks there, &n£

they &re tributary to Salt Lake.
The Secretary of the Treasury:

You think the t a l l should

go with the hide, d© you?
Mr, Wilson:

Tee*

I say two ©r three; I mean a few.

I

hare no doubt these baz&e would prefer to g$ where Salt Lake
City goes.
The Secretary of the Treasury:

You think the state as

an entirely should fee dealt with?
Mr. Wilaon:

Yes, I think I t e$n be safely included in

one section,
Mr. Jasee K. Lynch:

They are two merchant* here who

were t© hare fellowed Mr. Lynoh, th© Pre&ident of the
Ghae&er of tenderae# aooorilng to the original program.
Tfee Secretary of the Treasury:

I think this itap ind4>-

aatee pretty thoroughly what we wanted to know, i f i t i s
accurate.

We only aek that I t be accurate.

Mr. Jttff.ee X. LJmch:




You might have t h e i r w#rd ©n i t .

B

V* I* Moore

mm

Ttur are Mr. Moore and Kr. gsberg, and they are largo
jobbers and distributero out of Sim Francisco.
The Secretary of the treasury:

W will hear from them
e

briefly.
3 A I E T 0? W. 9. KHU.
T TM H
The Secretary of the Treaoury:

You a»y »tat« your name,

*4Ldr«s« an4 occujpationT
Mr. Moor«:

W 9« Moore.
,

President of the Moore-Watson

Dry Goods Co., San Franciaeo.
What I sh&ll say will bo very bri«f«

As & jobber of

dry goods wo do business snd distribute goods in a l l of th©
^tatos that aro inoludod on that may there, as well as 4s
Alaska, the Eaatiian Islands and some in the1 Philippines.
To giTS sons ldsa of the axtsat to which vs do business in
thoss states outside of California, X will say we travel
f i r e mm in t&e 8tate of Oregon and four in the state of
Washing torn aad those along the border travel into Idaho.
W havs t«» men 1B Isrmd* and two In Arizona and low Mexico.
o
Of course, we most with local esjapetition in Portland,
a s a t t l s aad >poiLane on the north, and in Los Angeles on the
south, but we are able to distribute merchandise in a l l of




B

W. X. Moore

3991

that territory from 3an Franciaco.
The Secretary of Agriculture:

I euppose there euro other

housed 1$ that more Ustant territory that distribute more
in proportion?
Mr, Moore:

Ok, y e s , a»d tli&t i s their OWR territory,

certainly.
The Secretary of Agriculture:

You dominate that section,

do yeu think?
Mr. Moore;

Ye«# air, Warn Tranoiece dealnates i t , so far

&a local ceaaditione are oonaerned.

Of couree. Hew York and

CMoago and o«ier e&stern e l t i e e s e l l gooie In our line
within a l l of tlUa territory, 'out we are eupreme within
that light colored territory there, eo far aa any loo&l
competition i s concerned, except perhaps Loe Angeles, idiioh
ooj&ee up into part of the San Jo&quin Valley.
The Secretary of Agriculture:
than*, you*




I think that l a a l l .

W
e

WfATBSSm OF MILTOK H.

The Secretary of Agriculture:

lhat l a your position?

|
i

Mr. Isberg:

Vice President of M. A. Ounst & Conpeay.

We coyer that entire territory

!

indicated on the map, Mr.

Secretary, with the possible exception of Salt Lake.

Our

two *ioe president*, i^jo are directors, of our general
campimy, reside on the pacific Coast, reside in San Franciaco, not by preference of climate or by any particular
d s s l r e , but beoauae the main office of the oeejpaay west
of the Mississippi i s located in the oity of Son Pranoiaco,
Tht natural jobbing eetiters on the Pacific Coastf not only
for our business, but for practically a l l oon^oiitie* that
move by r a i l and water up and down the Pacific Slope are
3as Francisco, Los Angeles, Portland, Seattle ani Spokane,
These f i v e c i t i e s eaoh hare their own localised conditions,
but no one of the four, exclusir© of San Francisco, reports
t e any of the other points*

In other words, Spokane reports

direct to San Francisco; Seattle, Portland
the same,

and Los Angeles

the percentages of business done on a hundred

per cent basis are somewhat as follows, including Honolulu,
which i s a l i t t l e l e s s than 5 per cent of the business:
$0 par cent of the business I s done in S&n Francisco^

I

w i l l gire the exact figures ee that the record isay be clear.



D

M. H« Ssfesrg

399Z

18 p*r cent in Los Angeles, 14 psr oent in Portland, 11
per eent in Seattle, and $ per eant in 3fok-..vn^.
the on* point at iaaue, a* ha* been developed byyou
and Secretary MeAdoo, ie the point of Arizona.

Arisen*

1* distinctly tributary, in our line of business, to Lea
Aagfe^ea.

Hth a l l of th* business in Arizona, which fur-

nlsh«s less than 4 par cent of 19 of the business done in
Los Angeles, the entire I*o» Angelas pare en tag e le 19 out
of 100.

Bel36, Idaho, i s at the present tips tributary

and n i l l probably favor Portland on aooount of the Oregea
Short Line which deliver* merefeandiae to them at the present tiffi# better than i t can be dome froa San Francisco.
I mat to press the serious note in the matter m that
a l l the pointe are tributary and are f inane ad through Sam
Francisco.

Ho point oan imilvidually finance Itself

without knocking at the door of San rranoisco, so far as
our line and most jobbing lines in this country are concerned,

I do want to go on record that we have depots at

eaoh of these plaees*
Sfcs Secretary of the Trsawry:
Mr. Lynoh:

The district superintendent of the telephone

Gmmptuny i s h e r e .




I thank you*

D

M H. Saberg
*

The Secretary of Agriculture:

We w i l l hear hlau

STATSffii? OF THOS. FHAHCIS DI&UBY.
The Secretary of Agriculture:

Hhat ooapany &o you repr#*

sent?
Mr. Delury:

Pacific TdXtphea* 4 Tela^raph Company.

The Secretary of Agriculture:

Bo you Hare l i n e s to

all

these points In thkm district?
Mr, Bslury:

Tes t s i r .

fhe Secretary of Agriculture: To Fernxandt
Mr. Delury: Yes, sir.
The Secretary of Agriculture:

To Ssattle?

Mr. Delury: Yes,
The Secretary of Agriculture:
Mr. Belury:

Boise?

Beise, yes.

The Secretary of Agriculture:

Salt take?

Mr. Belury: It is not finished yet.

We will hare one.

The Secretary of Agriculture: !*©s Angeles?
Mr. Delury:

Yes*

The Secretary of Agriculture:

To Phoenix?

Mr. Delury. Yes.
The Secretary of Agriculture:




Wsm long does i t take to

9

T. F. Delury

3fft&

reach Portland?
Mr* Delury:

Well* we ©an reach Portland within two

mlnut os i f every thing i t geifg right.
The Seorstary of Agriculture
Mr. Delury:

That i s over 700 s i l e s ?

Tes, s i r .

The Secretary of Agriculture: Can you reach Seattle?
Mr. Delury:

If everything la clear, we can reach Seattle*

The Secretary of Agrloultpre:

Can you hear distinctly?

Mr, Delury: Tes9 sir.
The Secretary of Agriculture:

How aany trunk lines have

you get?
Mr. Dslury: Well, I think we have three, K •: I anmot
"
sure*
th9 Seorstary of Agriculture:

To what points?

Mr. Delury: We have s*t to Portland-Seattie twc direct,
and then we have the outsi ie lines going out.
The Secretary of Agriculture:

Are there any private lines

of oessmeroial bodies?
Mr. Delury:

I*t that I knew *f.

Tlte Secretary ©f Agricultures

Is your servioe often

disturbed by atoms?
Mr. S«lury:




It has ©sen during thia iaat stona—we Have

*

t . T. Delury

399*

had considerable trouble.
The Secretary of Agriculture:
Mr. Delury:

For ?jhat length »f time?

f a l l , the Eureka l i n e was out for about

t«n days, but the other l i n e * ware not out except Inter*
Ed Tit ent trouble.

The Burska l i n e was the worst l i n e we tad

on account of t h i e recent storm*

That i e in good working

order now — in good shape,
T&e Secretary of Agriculture:

Hae your services been out

to any of these ether point* for a day or half lay?
Mr. Delury:

Hot that I know ef.

Well, we have had a

l i t t l e trouble around Portland with a aleet afeonn, or something l i k e that, but not t h i s eeaeon.
The Secretary of Agriculture:
Mr, Delury:

How i e i t to the south?

The southern l i n e a are a l l right, so far

ae X know*
The Secretary of Agriculture:

These points ooul 1 be

eaeily reached at any ti©e by telephone or telefera»?
Mr. Delury:

Tea s i r .

The Searatary cf Agricultures

I thinit that is all. Is

there any other representative?
Mr* Lynch: We hare representatives from 9an Jose aad
from Fresno,
The Secretary of A«rioulture: I should like to hear
briefly from Fresno.



I suppose the position of San Jose

is a$j*reat, that they f«*ror §«* Fraaaia***

D

Alfred Kutner

3tt7

STATWWt OF ALFRID KUTHER.
The Secretary of Agriculture:

What i s your nsmt and ifeo

d© you repreaantt
Mr* Kutner:
Fresno.

M/ name i« Alfred Kutner and I represent

I am the President of the Faners National Bank of

Freano.
The Secretary ef Agriculture:
Mr, 2utn«r:

Four national feat&a In Fre»no,

The Secretary of Agriculture:
Mr. Kutner;

Stow «any tanks &a?« you?

Sew many state bank#t

flier® i s ons ce«£i«»©lal iMoak and two aavin^*

banks*
Th« 8«er«*ary of Agricultura:

Be ycm speak for any bank

axcept your sun?
Mr. Kutner:

I am delegated as a delegate hare*

The Secretary of Agriculture:
Mr, Kutner:

So, X hare no reeolutiens.

fhe Secretary ©f AeTiouXture:
Mr. Kuteier:

Have you any r9©olution»t

Wmt de you desire % sayt
e

I 4c» f t desire % say anything exoept that
e

we are in faror of San Franciaeo.

We knew Uiat I s our

natural eenter.
the Secretary of Agriculture:

Tou pr*f*r t3iat to aay

point tn the north or south, «o y©ut




D

Altrod Kutner

Mr, Kutner:

399$

Yea.

The Secretary ©f Agriculture:

Hare you any ether repre*

aentatiya?
Mr. Kutner:

X don't think *•«

fh« Secretary ©f Agriculture:

Is there aay ©ther ge»-

tlecBoa in th© r©oa that ha» not been called en by any of
these beii©»?
A gentlenua:

X am here in behalf of the Cfcfe&er of

the flhfAer ©f Cesoueroe and eieari»« House of Seattle,
the ohanber of CoL^eroe and Cos»ieroial Club at TJfcc©saa#
to nake reply to the claia of San Pranolsco.
Yhm aeoretary ©f Agriculture:
reply*

We ion't oare to hear any

We hare already beard Seattle.

If you have any

f&ats that yeu draire t© «ub«it, we will a»k for the facts*,
but we ton f t oare t© hear any arguaent.

Xa there anything

else?
STATXMUT Of E W R P. 2 . THOT.
D AD
Mr* Troy:
oiation.

I aa repre* en ting the Public 0imer3hlp AssoThe Public Ownership Association would l i k e to

ask your body, i n *uak rule* a© th#y alg^t eake, to proTile
that the directors and other aettbere of the officere of




D

St*. ?• 2. Troy.

the reaenre tonka who shall be associated with the reserve
board shall

m>t be representing any public service corpora-

t i o n , because we find in San Francisco that the public
service corporations are represented an the boards ef directors of the banks here, and they use the teaks to intimidate the people of the oity and the newspapers and the
merchants*
The Secretary of Agriculture:

How, you are bringing up

& matter that should be brought up before the Federal
Reserve Board aad net before this Cora:.! t tee.

Our problem

i s to organise theee d i s t r i c t s .
Mr. Troy;

1

I thought you would l i k e to hear that matter.

The Secretary of Agriculture?

The Federal Reserve Beard i s

bound by the terms of the law, which places certain lijaitationo on i t a powers in selecting the repreaontatiye of
the government, an a there are certain lisiitationa also
placed on the action of the banks in the d i s t r i c t in
s e l e c t i n g their representatives.
How, i f you have as? oemumication you desire t&
have the Federal Reserve Board consider, when i t i s appointed, I suggest that you fersailat* i t and send i t t«
Waahinggon.




j

j

D

£4w. P.E.Troy

Mr. Troy: We certainly will.

9000

W thought if your Come

mittee had anything to de with the matter you could forwalate a rule ee that no emit tb&t tad any connection with
i!

'

a public service corporation could be represented en 13M
Board.
the Secretary ef Agriculture :

ID,

This GesKittee i s

r entrusted with the duty ef diriding this country xnte
districts and locating these centers for the banks* and I
think you had better fonsulate i&at yem deeire to say &n4
you can send i t , in order to aake It certain that i t will
have proper consideration, &ddre*#ed to the Chairaari of
tills Cfflaadttee at Washington.
Ur. Troy:

Thmnk you* W wantei to call your attention
e

to the fact that the Public Senrioe corporations use the
baniii^ power te intiisidftte the people In order to strengthen the banking femmr against the people*
The Secretary ef Agriculture:

Fer@yO.ate that as briefly

as possible and send i t to the Cosset tee at Washington.
STATBflDfT Or W. W. PHILLIPS.
Mr. Phillips:

Z represent the Fre*no Chacuosr ox1 Co^^eree

X wleh te say that our Talley le one largely agrioultural
««d dewrelcyAng very rapidly, end we require a great deal



W* W. Phillip*

3001

of soney to carry on the development which Is going on.
Our with is that this ttaalttee should establish a strong
regional bank in San Francisco which can furnish the
money at time* when we sorely need it9 and which we bare
not been able to get heretofore from San Francisco and
from our local banks. With that regional bank no doubt
we will be able to get sufficient funds to develop the
agricultural resources of that portion of the state*

We

are very much in hopes that the government will go on
with its farm bank loans, but, of course, that is outside
of your jurisdiction*
The Secretary of Agriculture:

Is there any other gentle*

san who desires to be heard?
STlTfMOT OF W. S. FAFLFY*
The Secretary of Agriculture:

What is your name and

occupation?
Mr* Farley:
cuetoms*

I. S. Farley*

I am deputy celleotor of

Mr* 8«retary, I have prepared a statement at

the request of Collector of Custoas Davis in regard to
the cuetoms business here, but ae it has been largely
covered by Mr. Lynch in the early part of the hearing.




I* S* Farley

3003

perhaps it is not necessary to go into it. Hie figure*,
however, are not at recant as these are, and perhaps by
•imply filing this statement, it would be sufficient.
The Secretary of Agriculture: fee*

That may be filed.

The document so filed is as follows:
•CUSTOHS BUSINESS AT SAI FFAICISCO.
By H, B. Farley, Depity Colleotor of Custoas.
The total amounts of duties, tonnage taxes, fsas, etc.,
collected at this port during the past fire calendar years
were as follows:
1909.

- $6,731,839.31

1910- •

7,146,009.0*

19U

0,811,030.53

1913- - - - - - -

6,680,638.03

1913.

- 6,431,063.54

The tariff act of 1913 reducing rates of duties has
neoessarily caused decreased receipts; and the act of 1909,
prohibiting the importation of opium, has lessened the
duties collected at this port ay about 1800,000 annually.
Another matter causing a reduction in duties at this
port is the increasing quantities of free goods imported,
the percentage of such in co»partsen with dutiable goods
being greater than at ether large ports. For instance,



I . 8, rarity

3001

the free goods imported at this port iiave grow to 75 par
cent of the total imports, whereae at Boston, previous ts
present t a r i f f placing wool on the frss l i s t , tht imports
there of frss goods were approxlaatsly only 50 per osnt of
the total laporte*
The amount of duties colleotsd at any port i s , therefore,
not a oorrsot gauge of the ouatoae business)*
While the duties oolleotsd annually at the great port
of Boston have seen aors than 300 Billions sf dollars 9 against
l s s s than 7 Millions at this port, the imports there oenslst
largely of raw weol and sugar, and sy the placing < f neol
on the frss l i s t and the reduction in duties on sugar en
the f i r s t of next March, the present tariff will reduce the
duties at Boston approxiaaatsly 11 Billions of dollars
#8,000,000

on

wool gji* $3,000,000, on sugar).

The imports at this port of jcerchandise from foreign
ports have groim from §51,469,033 in 1909 to Ha # WO,398 in
1913; the exports of doasstio aerchandies frea $30,431,489 in
190S to 168,937,863 in 1913.

In adiitlon to sxports thsrs

ars out shipments to Alaska, Hawaii, Tutuila, and 0av».
The Philippines, so far as cuetome business i s concerned,
ars a foreign country, and ths s t a t i s t i c s of our traas wito




I . 8, Farley

3004

those islands are included in the exports above.
Most of the shipasnts from this port to Alaska are transshipped at S e a t t l e , and, therefore, are oredited to ehipaenta
froa that port*

The s t a t i s t i c s of shipaente froa this port

to Alaska oover only ehlpaents aade by Ysssels that clear
directly to places in Alaska*

These shipaents were

$2,868,943 la 1909 and $3,161,373 In 1913.
Our shipaents to the Hawaiian Islands in 1909 aaounted
to 113,154,809 and ress to tl9,994< 091 in 1913,
Our shipaents to Tutuila and Gaua in 1913 amounted to
$167,071— a material inorease over former years*
In addition to the foregoing, and also part of the
coit erce of this port, wers the exports of foreign aerchandies either after being duty paid, or froa warehouse* in bond
without the payment of duty*
for 1913*

True figures totaled | l , 159,041

Foreign merchandise in transit through the

United States totaled t1,512,311 additional*
Then there are shipaente to Atlantic ports Tia the
lstfeauscs of Tehuantepee aad Panaaa, which aaounttd, in 1913
to $10,858,935 via Tefcuantepee and to $6,010,339 via Panama*
l o s t a t i s t i c s are available for shipments arriving at
t h i s port by either Tehuantspec or ?anaaa, as such s t a t i s t i c s



I* S. Farley

3005

are compiled only at port* of departure* of vessele, and
then not sspar&teiy for sach port of destination; out i t
i s assumed that the value ©f Jisrchandisa arriving by these
route* equals the ahipaents fro* this port.
Likewise merchandise shipped from Alaska, Hawaii, Tutuile
ana Guam i s covered only in the s t a t i s t i c s sad* at ports of
departures cf vessels*

Tiiese s t a t i s t i c s for the

fiscal year

ended June 30, 1913, compared with previoue years showing
graiual increases, seem tc -warrant the stateaent that the
valua cf &&rchandi»e shipped Xros Hawaii to this port for
tha oalendar /ear of 191^ oxoaadod ta?#OOO,OOO; froa Alaska,
1^5,000,000; and fros Tutuila and Quau an amount equal to
•hipi»ent» from here to those islands, vi*: 1157,071.
Tha v&lvia of refined bullion exported to foreign ports
in the ya&r 1913 counted to $14,750,872, and ths iaporte
of the sawd amounted to J3,318,900.
Goi

*»ilv^r uoin sxpors^a to foreign countries

totaled only $144,756 and the imports of the eaue
$1,718,941.
The shipments of gold and s i l v e r coin to Hawaii, Tutuiia,
and £la*ivi* were vauiUgd $348,70S.
So figures are available covering th« valua of gold and




H. s. Farley

3006

silver coin returned fros? Hawaii, but estimating from figures
©f previous /ears probably three-quarters of a million would
not be an excessive figure.

The value of shipments of

refined bullion anu coin frer. A lea k t to this port is not availi
able.

During 1913, 18 vessels laden with domestic coal

arrived from Atlantic porta via the Strait of Magellan or Cape
Horn, and 6 vessels likewise arrived with general aarch&ndise.
Six vessla wereelearsd froa this port for Atlantic ports
via either the Strait of Magellan or Cape Horn, with cargoes
of general itereb&nuloe.
Estimating the coal cargoes at double the vessels1 not
register tonnage (and often a ccal cargo equals two and a
half ailes th« net tonnage), and the value of the coa.1 at
$3 a ton f. o» % . Norfolk, the value of domestic coal brought
>
into this port froa the Atlantic coast totaled $350,000.

j

Istiaatin* the cargoes of general »erehandise at $165,000
each, the total value of such cargoes in and out of this port
reached $3,000,000.

Thie i» not an sxesssive estimate, when

the fact is considered that the cargoes of vessels with general Bsrchandiae range in value from £100,000 to #500,000.

Ths

Matsonia, which cleared a few days ago for Honolulu, carried
a cargo valued at mere than f300,000, and the cargo ol the



! • • • Farley

300?

&ti*6

Cbiy* ttaru, recently cleared for the Orient, was valued
at more than £400,000.

•

Trom the foregoing statement and deducting the value
of imports by rail m bond ($1,999,419), i t would appear
that the total deep eea oeeuceree of thie port, inward and
outward, amounted to more than 1350,000,300 in the past
year*
lo cue tome s t a t i s t i c s are available for the ooaetwiee
trade along the mainland, and the value of thie trade oaa
be estimated only by those f&Alliar with or engaged in the
•aae«
But ae an indication of the importance of thie port ae a
trade oenter, i t sight be well to aote that forty foreign
governments sain tain their consular repreeentatlves in this
city.
The dally travel in and out of this elty aleo lndieates
the Gomir.ereial importance.

The official figures on f i l e in

the custom house shows that for the flsaal year ended June
30, 1913, 39,957,573 paessngers were carried on the transbay ferriss to and from the east ehore and to and from Marlin
County; 400,000 on river and otaer bay steamers; 1,300,000 by
sea (domestic and forsign); and 7,000,000 by rail to and
fro* San Vateo County and the south — a total of nearly



I . S. Farley

49,000,000,

3008

This i s a daily aver&gs of ovsr 130,000, showing

that 65,000 i s the average nuuber of persons that arriirs in
and dspart fre* this city every day in ths year.
GOMPASATIVE ^,*'«WHT OF CUSTOM BUSINESS AT PACIFIC COAST.
?Q*T8 FOB THE FISCAL YTAK FHDSD JUFE 30, 1913.

Thoss figurs© from rsoent annual rsport of Secretary of
ths Treasury.

Forts
Seattls

I B ports
J

Experts

Rsoeipts

|83 9 333,333

131,016,031

11,437,664.56

24,490,733

33,336,438

504,693.11

3,^?,965

9 # 373,S36

6dl,003.30

68,309,909

76,394,060

6,439,739.83

Lcs Angelas
3,747,601
(Including San Psdro)

353,568

741,865.3S

541,381

94,304.98

TacoMA

Portland
San Francises

San Diego

635,657*

Ths afcovs figures do aot include reo«ipts, on account of
ths Departaents of Cosasros and of Labor, for tonnage tax,
head tax, and other payments »ade at ths Gustoa Houss for

j

thoss departments, i^iich amounted for the f i s c a l ysar endsd
June 30, 1913, to $45,961.53 at S s a t t l s i $35,469.73 at Taco&a;
#3,187.30 a t Portland; S74,l^).81 at San Francisco, §7,943.87
at Los Angslss, and 17,934.38 at San Disgo.



I* »• rarity

IOOt

8AK FRANCISCO1 R <*KA TFADF FOB THE CALFHDAR TEAR OF 19X3.
Iaports for San Francisco,
•

163,650,398

forwarded in bond,

7.485.307 170,135.606

Export* (domsstio Ifdae.)
$68,937,863
(foreign
• )
1,159,041
(foreign
•
) (In transit) 1.&13.3U

71.6Q9>314

8bipaent» to Hawaii,

19,994,091

Rsoaipt* froa

•

(estiaated)

37,000,000

Shipment© to Alaska,
Receipt* from •

3,161,373
(••tiaatsd)

5,000,000

Shipaeats to Tutuila and Guam,
K«««ipt» trm

t

•

.

107,071
107,071

(a»timat«d)

10,858,936

Shipment* via T«huant«p«c to Atlantic ports,
Receipts

•

•

fr«i

9

•

(sstlfiatsd)
10,858,* p

Ship* nts via Panama to Atlantic ports,
Roceiots

•

•

from

*

*

6,010,3^9

(estimated) 6,010,339

Exportsand shipments of coin and refined bullion
Caps Horn of Doasstio Merohanaise

1,000,000

Arrivals froa Atlantic Coast, saas route,
Da»stic Merchandise,

1.350.000
|

Lass importations received sy rail in bond
Total Deep sea trade through San Francisco,




353,155,058
1.999.419

f

350,155*639

I.

$• Farley

3010

Vo cu»toa s t a t i s t i c s are available for the coastwise
trade along the mainland, and the value of this trade in and
j| out of this harbor oan only be estimated by those faailiar
1

with such trade*
The exports fro* this port to the Phi 111 pines In 1913
totaled $6,074,387, and the isports here free those islands
amounted to 13,861,111 4uring the same period.
During 1913, the exports from this port to Japan totaled
$37,354,365 and the imports here fros Japan amounted to
134,915,316 froai the eaae period.

The trade of this port

with Japan, both inward and outward, i s , therefore, sore
than one third of the total trade of thle port with a l l
foreign countries."
The Secretary of Agriculture:

Ie there anybody else who

desires to bs heard?
(Vo response.)
The Secretary of Agriculture:

If not, the hearing will

be closed in this city*

(Whereupon, at 13;40 ©'• clock P.W., the hearing at 8*a
Francisco adjourned.)