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PROCEEDINGS

of the FIFTH ANNUAL

of the STOCKHOLDERS'

MEETING

ASSOCIATION

FEDERAL RESERVE BANK of DALLAS

June 3, 1931
Adolphus
DALLAS,

Hotel
TEXAS

This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)

Page

Call to Order and Invocation__________________________________________________
6
Report

of the Chairman_

Report

of Committee

on Check Clearing

Report

of Committee

on Conditions

Report

of Committee

on Division

Appointment

7
_______________________________________
Functions__________________
8

10
of Eligibility______________________
of Earnings____

11
______________

13
of Committees__________________________________________________

AddressGovernor
Lynn P. Talley---------------------------------------------------------14

AddressJohn
E. Owens, Dallas,
Instructions

Regarding

J. H. Frost,
Report

of the

Texas____________________________________________
29

Election

of Directors
San Antonio---------------------------------------------------------37

Nominating

Committee

and

Election

of
Committeemen----------------------------------------------------------------------------

Report
Remarks

of Committee

on Resolutions

by Mr. George R. James

Washington,

42

42
---------------------------------------------

of Federal Reserve Board,
D. C----------------------------------------------------------------------43

PROGRAM
ANNUAL

MEETING

of the
STOCKHOLDERS'
ASSOCIATION
Federal

Reserve

Wednesday,
Palm

Invocation
Dallas.

June
Garden

Bank of Dailas
A. M.
9:30
Hotel
Adolphus

3, 1931

by Dr. David Lefkowitz,

Rabbi of Temple

Report of the Chairman:
Ben Johnson, President
Louisiana.
cial National Bank, Shreveport,
Reports of Committees:
Committee on Division of Earnings
W. M. Massie, Chairman.

Emanu-el,

of the Commer-

Committee on Check Clearing Functions
Oxsheer Smith, Chairman.
Committee on Conditions
P. B. Doty, Chairman.

of Eligibility

Appointment

of Committees:
Nominating Committee.

Resolutions

Committee.

Address: Lynn P. Talley, Governor
of Dallas.
Discussion and Open Forum.

of the Federal

Reserve

Bank

Address: "Should Membership in the Federal Reserve System be
E. Owens, Vice-President,
Republic NaLiberalized ?"-John
tional Bank & Trust Company, Dallas.
Instructions
Participation
in Election of
regarding Stockholders'
H. Frost, PresiFederal Reserve Bank Directors for 1931-J.
dent, Frost National Bank, San Antonio.
Reports

of Committees:
Nominating Committee.

Resolutions

Committee.

Luncheon in Danish
Federal Reserve

Room, Adolphus,
Bank of Dallas.

1:00 P. M., tendered

by the

OF STOCKHOLDERS'

COMMITTEE

ADVISORY

ASSOCIATION
Elected for the Year 1931-1932

A. QUERBES,

G. K. RICHARDSON,

First National

Carlsbad

Bank,

Shreveport.

J.

E.

F. M. MURCIiISON,

East Texas National

First

Bank,

E.

CI3ILDS,

Morris County National

Bank,

A. PALMER,
Yoakum National Bank,

Bank,

Yoakum.

Naples.
A.

P. B. DOTY,
First National

PETERSON,

J.

United States National

Bank,

Galveston.

Beaumont.

W. S. POSEY,

J. B. FORTSON,

First National

First National

Bank,

W.

GREGG,

National

Brownsville.

Bank,

Lubbock.

Corsicana.

Merchants

National

El Paso.

Palestine.

JOHN

Bank,

Carlsbad.

ANGLY,

A. B.

National

Bank,

P.

RILEY,

Junction State Bank,
Junction.

Bank,

WEDNESDAY

MORNING

SESSION

June 3, 1931
The Annual
Meeting
Association
of the Stockholders'
of the
Federal
Reserve
Bank of Dallas
convened
at ten o'clock in the
Palm Garden of the Adolphus
Hotel, Dallas, Texas, Chairman
Ben
Johnson,
President
National
Bank, Shreveport,
of the Commercial
Louisiana,
presiding.

THE CHAIRMAN: We will have the invocation
Lefkowitz, Rabbi, Temple Emanu-el, Dallas.

by Dr. David

DR. LEFKOWITZ: Thou in the heavens
above but close to the
heart of every one, we call upon Thee in earnestness
and in truth ;
God and Mind, guide and lead us.
Thou spirit
of the universe,
We look up to Thee, especially
at the beginning
of new labors, for
Thee labor in vain. So we
we know that they who build without
at this gathering
ask Thy presence
of those who have in keeping, if not the heart,
surely the circulatory
system,
of our nalife.
tion's commercial
days we especially
In these perturbed
and difficult
ask Thy
that wisdom
and vision, in
presence,
may come, and earnestness
tasks
the nation's
financial
the important
of reorganizing
conditions. We thank Thee, 0 God, for this great system
of Reserve
banks that help to stabilize
that are now
these financial
conditions
0 God, that
and we pray,
so heavily,
so seriously,
perturbed,
be with those of this system
Thou mayest
who have gathered
in all earnestness
here to consider
the great and important
tasks
that are now before them. Help Thou them to see the right path
and to devise the true ways that shall bring again a new era, if
hope and pray it be not-a
new era of
not of extravagance-we
and growth
unto this,
prosperity
and comfort
and development
our nation.Give

these men the power to send forth into the world, and
especially into our country, the much needed news of upward
looking and the still greater need of the lesson of thrift in hours
Harness back the turbulent,
and days and years of prosperity.
disorderly commercial and industrial advance. Help this organization of orderly financing to be the stabilizing factor amongst the
peoples of this nation and thereby, amongst the nations of the
world.Mayest
Thou be with these men in their labors,
guard
and
that
guide and keep them; grant unto them health and strength,
their labors with vision and with earnestness
they may continue
rest upon this nation ; may
and zeal. We pray that Thy blessing
it remember
him whose name we are today commemorating
and
on the part of all great patriots
may there be a similar self-giving
guard it and keep it in the
of this land. Bless Thou this nation;

hours of its trial; uplift it with the hopeful hearts and far-seeing
vision that Thou mayest bless it in Thine own time with peace
and prosperity and renewed happiness. Amen.
THE CHAIRMAN:

Committee

I

am

supposed

to

report

for

the

Advisory

:

Your Advisory Committee is unable to report very much
actually accomplished
since the last meeting of this group. You
are advised, however, that there was practically
a full member8, 1930, and we
ship of the committee
present on September
undertook then to organize committees to carry out the instructions given to us by the last annual meeting. This is shown by
excerpts from the minutes of this meeting quoted below:
"A committee of seven (7).to include the Chairman and Secretary of this Board, be appointed by the Chair to carry out the
resolution
at the June 19, 1930, meeting,
of the stockholders
relative to a larger division of the earnings of the Federal reserve banks with the member banks. Feeling that this matter
discussion before the Board meets
will be open for legislative
again, it was felt this committee should be appointed now for the
purpose of keeping abreast with the movements. Later the ChairW. M. Massie, Chairman;
John Gregg, W. C.
man appointed
Slaughter,
B. D. Harris and W. W. Woodson.
"Discussion
Board attempting
of the policy of the Advisory
for directors
any nomination
was deferred
or recommendation
from the next stockholders'
instructions
It was
pending
meeting.
however,
that a letter from this Board to the members
agreed,
in the election
their active participation
urging
coming
up this
year should be sent out in due course.

"The matter of Check Clearing Functions of the Federal reserve banks was discussed and it was agreed that the Chairman
should name a committee to study this question and be prepared
to make recommendations
on this if the matter is open for legislative consideration
this year. The Chairman appointed Oxsheer
Smith, Chairman;
E. A. Palmer, E. W. Graves, Nathan Adams
and J. B. Fortson.
"Question of wider latitude as to conditions of eligibility was
discussed and a committee, composed of P. B. Doty, Chairman;
G. K. Richardson and W. S. Posey, was named to study this question and be prepared to recommend a position on it to our Board
if this question is open during the year for legislative consideration."
The work accomplished
by the respective
reported
today.

by these several committees will be
later in our proceedings
chairmen

In addition to the formation
of these committees,
your officers sent a letter to the member banks, on September 30th, rein directors' election to be held in the Fall
garding participation
of 1930. Copy of this letter is filed for record.
The Chairman
and other members of your committee
express their appreciation
of the cooperation
shown them by the
officials of the Federal Reserve Bank and by other stockholders
in the furtherance
in supplying data and otherwise cooperating
of our work and are grateful for the honor you have shown us
that has been ours to serve.
and for the opportunity
We will have the reports
Mr. Massie
of these committees.
is not here to report for the Committee
on Division
of Earnings,
so we will have first the report of the Committee
on Check Clearing Functions.
OXSHEER SMITH (Cameron,
Texas)
bers of the Stockholders'
Association:
eral confession
of faith this morning,
that we have done little or no work.

: Mr. Chairman
and MemThere seems to be a genor rather,
an admittance

in the lobby of the
In talking
to Mr. McDaniels
of Hubbard
he expressed
hotel this morning
that there was so large
surprise
I told him that, being a country
at this meeting.
an attendance
he and I understood.
boy, I would speak to him in language
I
a free barbecue,
said, "If you will go home and advertise
you will
have a good crowd in Hubbard."
In other
words,
our Federal
Bank is paying
Reserve
thing in these
our expenses,
a welcome
times.However,

I am sure there are other and deeper reasons behind our presence than that. We come here with the thought
that we can learn something that we can take home, something
that will be of benefit to our own institution,
and at the same
to the best of our ability to the meeting
time contribute
of
stockholders
of the Federal Reserve Bank of Dallas.
Apropos of the times and the meeting, I asked my friend,
McDaniels, who travels a great deal, and who, as Taylor of the
Dallas News says, is "greatly
encrusted
with prosperity,"
so
much so that he cannot remain for any length of time in any
one town, where he was going this summer.
He said, "I went to Europe last summer but I am going to
hell this summer."
At our stockholders'
meeting
about a year ago we
committee
to do something
tried very earnestly
worth while. The old familiar subject
more to our earnings
arose as to how to contribute
through
our own well-being
and by so doing, of course, to further
Among
the things
increasing
suggested
our own profits.
was to

try to resuscitate
the old exchange charge, reversing the current
and restoring conditions so the country banks could live.
One of the city bankers very aptly remarked that the destruction of the exchange charge broke the country banks, which
was true because they lived very largely from the exchange
charge.It
of this charge that our commitwas with a consideration
We thought
tee was entrusted.
about the matter
very seriously.
We found
to exist,
this condition
of which
you are all aware.
bank and once
The exchange
charge
was made by the country
made, had to be passed to the city bank and by it to still larger
the checks. As
city banks and finally, to the man who deposited
by Federal
you know, the charge was eliminated
enactment,
or as
Reserve
Act put there
we think of it, by a joker in the Federal
by the national
Congress
when we were not looking
and we did
not awaken
place until it was too
and realize what was taking
late.

When this exchange charge was once eliminated by the country bank, the city bank in turn eliminated it, and it was eliminated further on the line until finally, perhaps at the end of the
line it was entirely free. They argued with us that they could
charge their customer and we could charge our customer, and
so on, but we found that the city banks continued making the
service free and in addition to collecting all these checks free, unloading them on the Federal, in many instances are allowing large
to use the funds before they are actually converted
corporations
into Federal funds.
Right here in the city of Dallas I called one large account
whose checks run into the thousands
and it is a question
whether it will even pay its own charges.
how this can be remedied.
We are at a loss to understand
We have considered the matter to a great extent, and not having anything
definite in view we have not gone to the expense
of running around in circles. We have no suggestion to offer except a protest at this unjust and unfair meddling in our business.
I am speaking, of course, of this great collection of checks
that come in to us each morning, gathered
from all over the
least,
world, with the demand on the Federal Reserve Bank-at
it operates to that effect-that
they must be paid in gold or its
equivalent, Federal reserve funds.
Our committee thus far has been unable to think of anything constructive
can be
and believes that nothing constructive
done without amendment
of this Act. At this time all we can do
is to moan for the departed. (Applause)

THE CHAIRMAN: We will have the report
of the Committee
on Conditions
of Eligibility,
of which Mr. Doty is the Chairman.
P. B. DOTY (Beaumont,
Texas) : Our committee
is in about
the same situation
We have
as the one which has just reported.
about as much of constructive
effort to report to you as that committee.When

the Advisory Committee met last September Ben felt
we ought to do something at least to show our appreciation
of
the honor of having been appointed on this committee, although
at the time there seemed really very little for the Advisory ComHowever,
mittee to do or any special work for it to undertake.
we thought there should be committees
appointed from various
sections to keep in touch with conditions as they might arise, and
therefore, selected chairmen of committees under three different
heads, as Chairman Johnson has just told you, reading you the
personnel of those committees.
When he asked me to act as Chairman of this committee, it
I especially want it included in
was with the understanding-and
the committee
the record-that
in the event
was to function
matters pending might be introduced into the discussions in Congress. In other words, during these times and conditions since
September
and for some months before, I think Mr. Johnson
mentioned, this committee was to serve by studying conditions
surrounding
and affecting business in the western territory.
I think most of us were very busy making studies of conditions as they actually occurred in our own localities and this
committee did not see fit to go into the matter of a study of a
question that might never arise. It was all we could do to attend
to those that were already existent.
the stockholders of the
However, the committee representing
Federal Reserve Bank of this district was appointed, in order to
keep abreast of the times and conditions and be ready to do some
work in the event it became necessary. In the meantime, for the
past several months, at least, there has seemed to be very little
in the press and in fact, very little discussion among bankers as
to any change in the requirements
of eligibility for notes and
securities subject to discount.
discussed
than
has
been
One feature
more
any other,
which
installment
is
that
the
making
paper
of
of
possibility
perhaps,
eligible. There is divided opinion on that, of course, as to whether
in
Federal
the
be
take
to
paper
reserve
allowed
such
we should
the other membanks. I have my own opinion and I am satisfied
but we do not believe at this
have theirs,
bers of the committee
that into consideration
for taking
time there is any occasion
at
this meeting
up from the floor or in
unless it should be brought
some other way.

There has not
several months for
and in view of that
interest
on the part
from what is now
just as it is.

during
to be any demand
the last
appeared
important
in the matter
changes
of eligibility,
fact, and in view of the lack of any particular
and the press for any change
of the bankers
the law, we have allowed the matter
to stand

However,
by Chairman
this committee
which was appointed
Johnson
the stockholders
stands
ready to represent
at any time
and if in the mind of anyone here today, there is the idea or sugis some work this committee
that
there
to do,
gestion
ought
or some particular
phase in which any of you are interested,
and
this meeting
feels it would be for the best interest
of all to
have some investigation
made or some propaganda
put into effect,
this committee
will be glad to hear any such suggestion.

In view of these things which I have outlined, the committee
has not delved into this matter to any extent, feeling there was
no particular necessity for such work. We had an understanding
among ourselves that we would be ready to act in the event
conditions should develop making such action necessary. In the
absence of that necessity, we have no particular
report to make.
Since Mr. Massie has not come in, we will ask Beverly Harris
of Houston to make a report for the Committee on Division of
Earnings of the Federal Reserve Bank.
Texas) : This committee,
BEVERLYHARRIS (Houston,
of which
Mr. Massie is Chairman,
did not have any meeting.
There was
but nothing
between
the members
some correspondence
could be
done because
of these facts.
last year we reviewed
You will recall that at the meeting
the bills and came to the conclusion
the
we would recommend
passage
with certain
amendments,
of the Glass bill then pending,
of
all of which is fully set out in the report
of the proceedings
last year's
these matAt that time it was anticipated
meeting.
ters were possibly
to come up and something
could be done at
happened
that session of Congress.
What actually
was that Conhaving
been taken
gress adjourned
except
any action
without
that
that the Committee
and Currency
recommended
on Banking
the Steagall-not
be referred
to the committee
the Glass-bill
of
the whole house of the State and Nation,
with the recommendation that the bill be passed.

The effect of that, as I construe it, was that the whole thing
that the
was side-tracked
and that it was not the intention
Steagall bill be passed but that this simply disposed of the arguthe matter to
ment and practically had the effect of adjourning
the next session of Congress.
Following

our last

session,

however,

Senator

Glass

intro-

duced an entirely new and different bill, which probably some or
all of you have seen, which incorporated
not only the bill which
we endorsed but a great many other things besides.
Our committee
that that
the
was of the opinion
changed
entire
situation
and nothing
could be done until Congress
reconvenes and until these matters
come up, as they undoubtedly
will.
We do not know what angle they may take or what other things
may be interrelated
of which we will have to take cognizance,
and
take action on. We have no clue as to what may be the
perhaps
thought
trend of congressional
or of the course that the Federal
reserve
amendment
may take.

The committee saw no good purpose or anything to be served
by having any meetings, but decided the matter had taken on an
entirely new and different status. While I did not expect to report for the committee, and I am speaking
only of my own
knowledge, I presume the matter is now thrown back upon this
body again to take any action they may see fit, either to create
a new committee, or anything the members may think best.
I believe Mr. Talley might have something to say. He knows
much better than I do what has taken place since and all that
I think a supplementary
has transpired.
report by him would
be enlightening.
Reserve
Bank
LYNN P. TALLEY (Governor
of the Federal
of
King of Utah had a resoluDallas) : You will recall that Senator
during
before the Senate
the entire
tion pending
session
of the
last Congress.
That was a resolution
to make an exhaustive
study
Reserve
Act and the effect of it over the period of
of the Federal
by the Senate
That resolution
to the
its history.
was referred
Committee
Senate
Banking
and was almost
and Currency
enCommittee
Then the Senate
tirely
on Banking
and
rewritten.
in a recommendation
that an exhaustive
Currency
brought
study
Reserve
System
but of the enbe made, not only of the Federal
States,
in the United
tire banking
and added a number
situation
branch
including
divisions
chain,
and
of the subject,
of other
group banking.

That resolution was adopted by the Senate and a sub-comwith Senator
mittee of Banking and Currency was constituted,
Glass as Chairman. At about the time of the adjournment
of the
began
last
Congress,
the
that
sub-committee
a series of
session of
hearings. They had a number of people appear in person before
the committee, including several of the members and officers of
the Federal Reserve Board, persons representing
a cross section
of the banking fraternity
of the country, and they sent out a
banks
to
the
member
and a particular
questionnaires
of
number
to the Federal reserve banks.
set of questionnaires
The sub-committee
is still actively continuing its investiga-

tions and studies and the collection of information,
and will continue its activity through the summer to greater or less extent.
This matter of division of earnings is included in the group
is studying and my sugof questions which the sub-committee
is continuing
its interest
gestion would be, if this Association
in that question, that it either appoint a new committee or continue the committee
it now.has,
and let the Chairman
of the
directly with Senator Glass. We know
committee communicate
Senator Glass is very much interested
and anxious to get the
viewpoint of as many people as he possibly can and to get all of
the information
on this larger study which is being made that
it would be possible to obtain.
The work of this sub-committee
is not in any wise of the
to be done
character that we ordinarily attribute
or understand
in Senate investigating
It is a very careful study
committees.
and inquiry for the purpose of obtaining information,
and I feel
is, the Comsure, when that committee makes its report-that
mittee of the Banking and Currency Division of the Senate-it
will definitely and categorically
certain changes in
recommend
the Federal Reserve Act which it believes to be constructive.
It is my
time.THE

opinion

that

would

be the

course

to follow

at this

this
the
line
CHAIRMAN
In
practice
of
previous
with
:
group, the Chair will appoint a Resolutions Committee of seven.
It is the Chair's conception of the functions of this committee
that
that they will receive and review any and all resolutions
members of the group may want to offer before this body, and
that they will prepare for publication such resolutions as in their
for
the
judgment
this
to
be
at
adoption
group
presented
should
close of the meeting.
ComI will appoint the following to act on the Resolutions
mittee :
W. W. Woodson, Chairman, Waco, Texas
W. H. Fuqua, Amarillo, Texas
B. D. Harris, Houston, Texas
J. C. Chidsey, Dallas, Texas
Irvin McCreary, Gatesville, Texas
W. C. Pierce, Marshall, Texas
A. F. Jones, Portales, New Mexico.
Of the present personnel of the Advisory Committee of the
Stockholders'
Association of the Eleventh District, the following
members' terms expire in 1932:
Texas
Yoakum,
E. A. Palmer,
P. B. Doty, Beaumont,
Texas

W. S. Posey, Lubbock, Texas
John Gregg, Brownsville, Texas
J. B. Fortson, Corsicana, Texas
G. K. Richardson, Carlsbad, New Mexico.
The terms
this meeting:

of the following

gentlemen

expire

this year, with

Oxsheer Smith, Cameron, Texas
J. P. Williams, Mineral Wells, Texas
Alf Morris, Winnsboro, Texas
Ben Johnson, Shreveport,
Louisiana
W. C. Slaughter, Durant, Oklahoma
E. W. Graves, Douglas, Arizona.
Therefore, it is in order to appoint a Nominating
Committee
to submit names for members of the committee to replace those
whose terms expire this year, six in all.
I will appoint the following:
J. W. Hoopes, Chairman, Dallas,
Tucker Royall, Palestine, Texas
S. R. Lawder, Houston, Texas
T. A. Wright, Winnsboro, Texas
W. M. Deas, Arcadia, Louisiana
J. W. Butler, Galveston, Texas.

Texas

We now come to the address of Governor Lynn P. Talley of
the Federal Reserve Bank. We will be pleased to hear from Governor Talley.
Bankers:
This is the
Mii. TALLEY: Mr. President
and Member
banks
Meeting
Fifth
Annual
of member
of the representatives
Association
the Stockholders'
in this district
of the
composing
Your meetings
have now been
Reserve
Bank of Dallas.
Federal
in
begin
tradition
these gatherto
to
create
enough
numerous
ings. While I hope your sessions
may never develop platitudinous
but that, on the other hand, live, important
and interroutine,
before
them,
be
brought
we are, I
questions
will
always
esting
developing
think,
and orderly
procedure
a custom
and
of frank
bankers
from which all of us-member
discussion
and directors
Dallas,
Bank
Federal
Reserve
the
alike-derive
of
and officers of
and benefit.
a great deal of information
The circumstance
on your program
of my annual appearance
placed upon me, someseems to have more or less automatically
duty,
the
on behalf
pleasant
of custom,
of our
what as a matter
to
discussions
directors,
bid
to
our
a
welcome
you
and
officers
bank,
If
hospitality
the
the
to
we
so
gladly
which
extend.
of
and

there were no other reasons for your coming here, we are glad
for personal contacts, making new acquaintof the opportunity
ances and a renewal and enrichment of those already formed. We
want you to know that we are happy to have you come as often
in
as you will to the city which is the domicile of the institution
which all of you have, on behalf of the member banks you repreinterest. We hope that you will
sent, a financial and functional
in this meeting, as you have in the past, and also in those which
may be held in the future, feel at liberty to express yourselves
with the utmost freedom, and to ask for any information
which
you think we can give you.
We know that the period through which we are passing and
have endured now for better than eighteen months has been a
trying one, particularly
in the banking field, and we are completely cognizant of the differences in degree in which many of
have been affected. While it devolves upon the
our members
management
of a Federal reserve bank to act in the light of
conditions
existing at the time and to weigh all transactions
with careful judgment,
we want to assure you of our sincere
effort to act at all times with due consideration
and sympathy
and from a desire to attain results that will be beneficial without the sacrifice of fundamentals
or departure from them.
I do not intend to dwell at any great length upon the depression in which the whole world finds itself at the present
moment, nor to undertake to discuss its causes and effects. It is
certainly unfortunate
enough to be conscious of conditions like
the present without talking about them.
I would like to leave with you a thought in this connection.
Depressions reveal probably as much as they cause. They create
easy to discover previous
a field in which it is comparatively
error. They emphasize a wisdom, if not necessity, for a search
for sound principle, and adhering thereto when the discovery is
made. I have thought many times during the present period that
we may be like the two children in Maeterlinck's
story of the
bluebird-the
You will recall that they
symbol of happiness.
searched far and wide for the bluebird in order that they might
have eternal happiness and returned empty-handed,
to find the
object of their pilgrimage perched in their own modest home.
In our search for a formula of normalcy and in our frequently expressed hope for a return of normal times, I sometimes
wonder if we are not more nearly in the midst of them when our
people have to go to work and search for work and mind their
economic p's and q's, than we are when felicitating
ourselves in
There is no
what we describe as a period of high prosperity.
Perhaps the
intelligence
for integrity,
substitute
and industry.
other days than these are the abnormal times and the proof may

lie in the fact that they do not last. This figure should not, of
because
the laws of action and recourse, be taken too literally
that
action
are inexorable
and it is inevitable
contraction
will
occur in the same degree that we have expanded,
when the reaction sets in.

On previous occasion I have said that when a period like this
sets in, we may expect it to travel in four principal phasesdisorganization,
demoralization,
expedient
action and unfortunately last, the application of sound principle. In the beginning
of a cycle of depression, too many of us are inclined to wait for
conditions to change so that we can unload the hot ones on the
other fellow and extricate
ourselves from the unfavorable
and
into which we have been more or less
undesirable
circumstances
fail to
suddenly plunged. Those who adopt such a philosophy
realize and appreciate that so-called conditions result from mass
action by the individual.
industry-the
The agricultural
farmer,
if you please-has
I think,
We
than it is credited
more elasticity,
with possessing.
hear it said that a farmer-and
the country
often
sometimes
bank is included-can
than any other
indicome back quicker
This is in a measure
true, dependvidual or industrial
category.
ing largely
his opportunities
upon whether
are favorable
or unfavorable.
My own conviction,
however,
is that the farmer,
and
is the first to adjust
therefore,
the agricultural
his
community,
It is true that this is
to a new set of conditions.
operations
brought
but nevertheless,
it seems to me to be
on by necessity,
is that he borrows
less, makes fewer commita fact. The result
to liquidate
ments
which he expects
out of the proceeds
of an
he
oncoming
crop at a low price, and at the end of the depression
in a much better
finds himself
adjusted
position,
and where he
has more net funds to apply on old debts or with which to create
I think,
therefore,
new purchasing
power. In this circumstance,
lies the hope and phenomenon
that usually the so-called recovery
itself first in the agricultural
expresses
sections.
Notwithstanding
the widespread
deeffect of the present
the Eleventh
Federal
Reserve
District
finds itself in a
pression,
favorable
In the period from January
1,
comparatively
position.
1930, to May 23, 1931, there were 1838 bank suspensions
in the
United States,
in the Eleventh
Federal
of which only 58 occurred
District.
Reserve
Of the 58 suspensions
in this district
26 were
banks
banks.
The record
member
and 32 were non-member
of
District
bank suspensions
in the Eleventh
is unusually
small
for all districts.
The failures
in
when compared
with suspensions
District
the Eleventh
to only 3 per cent of the total
amount
bank failures
Of the failures
in the period mentioned.
in all districts
15.8 per cent were member
banks, while 84.2 per cent were
Comparing
bank failures
the total of member
in
non-members.

our district to the
find a percentage
considered alone
per cent of the
States.Throughout

total of member bank failures in all districts, we
failures
Also
the
8.9.
total
when
non-member
of
being
2
district,
in
low
only
our
are abnormally
bank failures in the United
total non-member

the United States over the period under consideration, one bank closed out of every 12 in existence, whereas
in the Eleventh District there was only one bank failure to every
24 banks in operation. I shall give you the statistical
record of
bank suspensions in each Federal Reserve District in the United
States, and while I have them separated here as to member and
disin
the
total
I
each
suspensions
non-member,
shall read only
trict to avoid tedium:
District

Member

Non-Member

Total

Boston
1
12
13
-------------------------------------New York
10
10
20
-------------------------------Philadelphia
8
21
29
---------------------------83
Cleveland
56
27
---------------------------------Richmond
190
161
29
-------------------------------198
162
Atlanta
36
-----------------------------------399
Chicago
355
44
-----------------------------------St. Louis
437
382
55
---------------------------------Minneapolis
201
174
27
-----------------------------Kansas City
174
156
18
---------------------------Dallas
32
58
26
---------------------------------------San Francisco
36
25
11
-------------------------1,838
1,546
292
Totals
---------------------------------I reported to you at your last meeting that we were then
holding in our assets the indebtedness
from two failed banks
amounting to $32,119.89, and in addition we were holding indebtin the
bank that went into liquidation
edness from another
Since that date 15 member banks have
amount of $33,354.83.
to us totaling $538,640.53. The indebtedclosed with indebtedness
ness of four of these has been liquidated in full and the indebtedness of the two banks referred to in my last report to you
has also been liquidated in full, including interest and expenses.
The failure of three banks can be attributed
primarily to defalcations. The failure of the remainder may be chiefly attributed
to badly over-extended
decline in the
condition, the tremendous
market value of agricultural
products and shortage of crops due
to drought conditions, resulting in a failure to realize on assets
in order to meet the unusual decline in deposits. The largest

owing us by failed banks since June, 1930, was $349,955
amount
in
time carrying
on April 15, 1931, and we are at the present
from
banks
12 failed
the indebtedness
amounting
our assets
In each instance
including
to $279,261.55,
expenses
of collection.
and in some instances
endorsements,
collateral,
we hold additional
time would cause us to believe that
and nothing
at the present
with this indebtedness.
any loss in connection
we will sustain
At the time of your last meeting
we had had some six or
in which to review and analyze the current
business
eight months
during
days
the latter
recession,
signs of which began to appear
1929, to be followed
of August,
with the crash in the security
market
on October 29th and 30th. As many of you will recall, the
System,
in the early stages
Federal
Reserve
of the depression,
adopted
redundancy
of funds
an easy money policy. The natural
the System
somewhat
coming from a policy of this kind relieved
left it with little to do other than recognize
and subsequently
downward
trend of money rates and maintain
the
the continued
System
in order to avoid lagcharge for credit in line therewith
rates would create pressure
ging so far behind that the System
instead
I
ease of conditions.
of being in accord with the natural
that in any period of depression
money
am sure we all appreciate
and more or less rapidly
rates will eventually
sink to a very low
to become just as abnormally
level and have the tendency
low
high in the preceding
period of credit
as they were abnormally
expansion.During

December, 1930, heavy currency withdrawals
were
reported by some districts due to bank disturbances,
which were
borrowings and by the developaccompanied by large temporary
ment of a firmer money situation
which continued for several
days. It was due to this situation and to avoid undue stringency
of money over the year-end that System purchases
were made
on December 30th and 31st last of $32,925,000 aggregate amount
of United States Government securities of various issues. Immediately following the close of the year money conditions were
more comfortable and the securities were sold back into the market. I may add that action on the part of the System in effecting
purchases
of Governments
seems to have met all requirements
in a satisfactory
manner.
At the January meeting of the Open Market Policy Conference careful consideration
was given to and authority
granted
for the sale of a substantial
block of Governments
in the event
it should become necessary to lighten the open market holdings
by reason of a rapid return flow of currency so usual at this time
however, due to
of the year. Such a procedure was unnecessary,
the delayed return of currency, with indications pointing to possible hoardings on a rather substantial
scale.
Money rates continued to decline and we found ourselves at
the April conference in a condition that System rates were out

of line with the market. This was clearly shown by the fact
that after receiving net imports of $280,000,000 of gold during
the calendar year of 1930, and having received $110,000,000 in
net imports up to the 15th of April, with $35,000,000 more afloat
and coming this way, there was a danger of impairing the gold
standard of some of the smaller European countries and an important non-European
nation. There was nothing artificial about
the reduction in rate, therefore, in view of the fact that a reduction in rates in the face of mounting gold stocks and an increase
of rates in the face of declining gold stocks is fundamentally
central bank procedure.
It was this situation that led to a further reduction in interest rates on demand deposits, bringing them in conformity
with existing conditions. The new rate had the immediate effect
of promptly diverting the flow of gold from New York, shifting
it toward other centers. The reduction in rates in New York made
it possible for France to sell dollars against francs, which had
the effect of strengthening
sterling both in New York and in
Paris, thereby enabling the Bank of England to resume its normal purchase of South African gold in the London market, increasing its gold by several million pounds and reducing its rate
to 21/2 per cent to avoid taking gold from other countries.
Feeling
interest
to you, I have
that it may be of possible
items of the
information
trends
gathered
concerning
of principal
has been compiled from
leading banks. This information
country's
banks located
in principal
weekly statements
of reporting
cities
May 21, 1930, to May 20,
States
for the period
of the United
1931. During this period demand deposits
show to have increased
$368,000,000
to $13,757,000,000,
while time deposits
were in$277,000,000
Other
interesting
to $7,409,000,000.
creasing
in loans to brokers
changes
and others on securities
are decrease
in other loans (including
of $1,341,000,000,
a decrease
commerin investments
in United States
cial) of $560,000,000,
an increase
Government
securities
of $1,105,000,000,
coupled with an increase
in other securities
For our own district,
owned of $843,000,000.
I find reserve
banks showed no change in individual
city member
deposits
March
at the time of the current
call report,
as comthis category
pared with March a year ago, deposits
within
remaining
at $393,600,000.
Bank deposits
city banks during the same period
of reserve
increased,
however,
$30,000,000
to $91,700,000.
approximately
Individual
deposits
banks within the Eleventh
of all other member
District
during
the period
by $62,to have decreased
showed
000,000 to $391,100,000,
less
some $2,500,000
or to an amount
than the individual
deposits
located
the seven
within
of banks
banks
during
the year
reserve
cities. Bank deposits
of interior
$4,100,000
to $39,635,000.
period show to have increased

Our loans t(, member banks on May 29th, the last business
day of the month, were $9,094,000, or slightly less than the
to
figure on May 31, 1930, at which time loans amounted
is reflected since
$9,457,000. However, a substantial
reduction
City banks
$25,911,000.
May 31, 1929, when they aggregated
were indebted to us at the close of May this year $1,607,000,
counwhile the remainder of the amount, $7,487,000, constituted
try bank loans. In this connection, I may state that there are
reduction of loans of member banks loevidences of substantial
cated in the live stock area of the district, due to current spring
According to our records, member banks within this
liquidation.
at the Federal Rearea have recently reduced their borrowings
$862,000.
serve Bank approximately
banks
by United
States
GovernLoans to member
secured
last
from
show
considerable
reduction
year,
ment
securities
to only $328,000
time compared
at the present
with
amounting
$1,039,000
figures
a year ago. While we do not have current
as
to the total borrowings
of our members,
condition
as of
reports
March 25th show the total of member
bank borrowings
from all
$6,800,000
of which
approximately
as 59,152,000
was
sources
Reserve
Bank.
from the Federal

loans to member banks during
The minimum outstanding
the first five months of this year was on January
13th, and
to $4,731,000. Maximum
borrowings
for the same
amounted
period were reached on the last day of May as reflected above.
The amount of our independent
holdings of United States
Government
dursecurities has remained practically
unchanged
ing the past year. However, we recently sold $80,000 First 41/1,
per cent Liberty Loan Bonds and $9,755,000 Fourth Liberty Loan
the proceeds in Treasury
Bonds and reinvested
Bonds bearing
33/% and 33/t, per cent interest.
The United States Government
held by the Open Market Policy Conference for the
securities
System on May 29th amounted to $444,468,000, our participation
being $19,241,000.
At the beginning of the current year our holdings of bank$8,574,000, including $1,079,000 bills
ers' acceptances aggregated
payable in foreign currency. Our holdings have gradually run off
having exceeded offerings.
to $4,091,000, due to maturities
Our buying
rates for bankers'
acceptances
at the beginning
from 13/, per cent to 2 per cent. However,
of this year ranged
as a result of frequent
reduction
of bill rates in the open market
from 1 per cent to
our buying
rates in effect on June 1st ranged
11/4 per cent.

During the first five months of this year we
purchased from
member banks and dealers in this district acceptances amounting

in this
to $845,000. This compares with $12,500,000 purchased
market during the same period last year. The reduction is almost
entirely on account of low rates in the open market. The small
by
is
banks
by
bills
evidenced
volume of
our member
purchased
the fact that on May 29th this year, we were holding for their
to $608,000, whereas at
accounts, for collection, bills amounting
the corresponding
date last year we were holding approximately
$3,321,000 of their bills for collection.
The rediscount rate of the Federal Reserve Bank of Dallas
on all classes of paper remained at 31/2 per cent from September
9, 1930, until May 8, 1931, when our directors reduced the rate
to 3 per cent, which rate is in effect at the present time. The
effective rates of the various Federal reserve banks range from
11/2 per cent at New York to 31/2 per cent at Minneapolis,
one
other bank having a 2 per cent rate, four 21/ý per cent rates, and
five, including Dallas, 3 per cent rates.
EARNINGS

AND EXPENSES

in the earnings
Knowing
that you are always interested
and
belief
that
in
the
institution
you are parexpenses
and
of your
ticularly
in a year such as this, I am giving you the
interested
It
is
figures
first
five
not my
operations.
months'
our
covering
detail
the
to
into
intention
by
to burden
sources
as
going
you
the
divisions
the
as
account,
expense
of revenue
of
various
and
I
these figures
in
be
proceedings.
published
your
available
will
figures which may
be glad to furnish
shall, however,
any further
be available
The gross
them.
in hearing
if you are interested
$442,806,13,
this
for the first five months
are
earnings
year
of
The
1930.
for
the
$727,203.98
period
of
as compared
same
with
furniture
total current
including
and
currency,
cost
of
expenses,
to $532,410.73,
house amount
to banking
equipment
and repairs
as compared
at the same date last year.
with $590,760.61

The expenses for the first five months are approximately
$58,000 less than they were for the same period in 1930. This
reduction is largely accounted for by a reduction in the cost of
currency of $19,000; a reduction in salary expense of $7,700; a
$17,600
reduction in the cost of furniture
and
of
and equipment
a reduction in shipping charges on currency of $6,000.
for furniture
The reduction
in expenditures
and equipment
for the replacement
by our providing
was made possible
of practically all of our old equipment
during the past two years out of
in shipping
The reduction
surplus
charges
on currency
earnings.
is due in
in the number
to a decrease
of
measure
a large
emergency
we have been called on to make.
shipments
which
You will
during
that
the early part of 1930 it was
remember
deliveries
necessary
large emergency
for us to make several
of
currency
to meet special situations
and while we have met some

requests of this kind during the current year, they have been
fewer in number and smaller in amount. In addition to these
larger items, I am pleased to say that a majority
of the items
in our expense account reflect a decrease over last year.
The complete table appears below:
COMPARATIVE

STATEMENT

OF EARNINGS

AND

EXPENSES
First Five
1931
EARNINGS:
$100,132.73
Bills Discounted
---------------------------32,283.55
Bills Purchased
-----------------------------Securities______________
302,235.85
States
United
3,492.68
Deficient Reserve Penalties---------4,661.32
Miscellaneous
-------------------------------$442,806.13
Gross Earnings
-------------------------DEDUCTIONS:Cost
$ 21,061.89
of F. R. Currency -----------------to
Repairs and Alterations
1,027.22
Banking House
-----------------------508,516.34
Other Current Expenses
-------------1,805.28
Equipment____________
Furniture
and
318,879.51
Profit and Loss
________Cr.
__
Dividends Accrued
108,293.94
-----------------------Total

Deductions
Net Earnings

$321,825.16
$120,980.97
------------------------

Months
1930
$196,291.30
155,469.47
359,972.10
8,566.42
6,904.69
$727,203.98
$ 40,453.99
4,413.99
526,412.93
19,479.70
Cr. 2,197.70
110,161.99
$698,724.90
$ 28,479.08

The latest available information
shows that as of April 30,
1931, all of the Federal reserve banks were operating at a deficit, these deficits, including accrued dividends, ranging
from
$77,000 to $1,006,000. Our profit and loss account at April 30th,
after providing for dividends, showed an overdraft of $159,644.60,
loss during May of $39,395.07,
which, added to an operating
would have shown an overdraft of $199,039.67, but for profits of
holdings
$320,020.64 realized in the switch of our Government
3%%$'s.This profit enables us to
from Fourth 41/4's to Treasury
show net available earnings in excess of dividend requirements
at May 31st of $120,980.97.
The amount of our earnings in excess of expenses and dividends at the close of the first six months' period is naturally not
available but a conservative
estimate places the amount at about
$82,000. Against this amount there will have accrued depreciation charges on buildings and equipment amounting to $23,000.
As you know, it is our custom to write off the depreciation

at the end of the fiscal year on December 31st.
This estimate
to you is the same as the one to be presented to our directors at their meeting tomorrow, from which
I believe you can safely anticipate the regular semi-annual
dividend of 3 per cent, to be credited to your accounts on June 30th.
Granting favorable action of our directors, it is very probable
that we will be the only Federal Reserve Bank of the System not
having to go into the surplus account to meet dividend requirements. (Applause)
charges

In addition
balance sheet figures, I have had
to these regular
figures
free
the
volume
and
cost
of
services
compiled
showing
banks during the first six months
rendered
of 1931. The
member
figures
but they are suffor June
estimated,
are, of course,
ficiently accurate
to warrant
their inclusion.
VOLUME
RENDERED
AND COST 0 F F R E E SERVICES
MEMBER
OF 1931
THE FIRST SIX MONTHS
BANKS DURING
May, Actual;
June, Estimated)
(January
Through

Numberof
Items

Amount

Check Collections
$3,323,401,643
Non-cash Collections______________19,337,670
70,672,809
217,752
---------- 50,385
Transfer of Funds______________
2,481,228,020
Currency Shipments
107,228,700
________26,851,740
Coin Shipments
3,428,395
________________23,578,675
Custody and Safekeeping__
68,184
Purchase and Sale of Bankers' Acceptances and U.
S. Securities____________________
69,597,600
1,314

Cost
$81,386
11,462
15,133
48,542
13,270
4,230
3,307

The cost of these free services is included in the expense
item previously quoted and the total cost of $177,000 compares
with an estimated dividend of $129,750 and is an addition thereto.
While the volume
shows a slight decrease
of these transactions
less.
over last year, the cost is also correspondingly
to
Our net
for
last
amounted
year
available
earnings
$10,087.32,
by law to retain
of which amount
we were permitted
only 10 per cent, or $1,008.73,
at that date was
as our surplus
$221,000
The
in excess
capital.
of paid-in
of twice the amount
remainder,
of the United
or $9,078.59,
was paid to the Treasury
States
31, 1930, after all closing
tax. On December
as a franchise
entries
had been made, our capital and surplus
accounts
stood at
$4,356,550
during
However,
the
and $8,935,626.67,
respectively.
first five
decreased,
due
months
of this year our capital account
to consolidations
to $4,291,400.
and liquidations,

While our earnings for the last six months of the year, based
on present holdings, will be less than those for the first six

months, due to reduced rates, it is estimated that our expenses
$42,000
due
to
further
be
of
at
an
annual
rate
reduced
will
still
infrom
And,
present
while
we
will,
already
effected.
economies
dications, close the year with a deficit, I would call your attention to the fact that our present surplus is some $352,000 in
amount and in addition we have reserves
excess of the statutory
available in amounts of $500,000 set aside as a self-insurance
fund and $26,514.48 to provide for possible losses in connection
with loans to suspended member banks.
During the early part of this year we shipped to the United
States Mint ten million dollars in gold and over one million silver
dollars. In addition to this gold and silver coin we shipped about
four million dollars in gold certificates ; in all, approximately
fifteen million dollars.
the prophets
At the time these shipments
were made, though
that prosperity
was "just
around
proclaiming
were vociferously
for our commodities
the corner,"
the prices being received
were
times yet to be
incurred
in more prosperous
low, and obligations
So far as we could determine,
there were no indicadischarged.
in the
tions that the prices
would increase
of our commodities
immediate
future
to be made on debts,
and with the payments
it appeared
that the trade balance
against
us.
would be heavily

The money we shipped had been held in the vaults of the
Federal Reserve Bank of Dallas and its branches
for several
years and, when released, was placed to our credit in the Gold
Settlement
Fund at Washington,
where it would be immediately
available to meet the trade payments
of this district as they
arose. Take the conditions and the prices that exist today and
I believe you will agree with me that our action was timely.
As a result of the Akard Street widening project now being
1,370
carried out by the City of Dallas, the city condemned
square feet of our property,
and consequently
we have been
to
under the necessity of making certain repairs and alterations
the front of our building. In this connection the city has awarded
us damages for the value of the property taken in the amount of
$31,029 and has assessed us $19,339 as benefits derived from the
widening project. Our contractors
estimated that the total cost
of repairs to the front of the building would amount to $26,980.
If this estimate
is approximately
correct, the total cost to us
would amount to about $15,000 after considering the amount received from the city of $11,690, being the difference between
benefits assessed and damages awarded.
Due to the inadequate
size and noisy location of our Directors' room it was decided to build a new Directors' room on the
fifth floor of our building. It was also necessary to make certain
other alterations
on the fifth floor to provide a more convenient

one-half
working
reflooring
approximately
of that
place, including
in the same contract
floor. This work was included
as that covering the alterations
to the front
and the total
of the building
$17,000. The architects'
cost is estimated
at approximately
reprein charge
sentative
and alterations
called our atof the repairs
tention
to the condition
and
of the side walls of our building
had become cracked and in some places
stated that the old mortar
had pulverized,
leaving
the joints
that
open. He further
stated
this condition
once started
would advance
very rapidly
and within a very short time the moisture
the construction
would attack
between
the limestone
slabs and the main wall of our building
that these joints be thoroughly
and recommended
cleaned out and
immediately.
repointed
Our contractors
that
this work could be handled
advised
overhead
cheaper at this time because of the very little additional
the contract
them at a
expense
was awarded
and, accordingly,
cost not to exceed $3,800.
In the early part of this year an examination
of the coils in
the fact that after
revealed
our ventilating
and cooling system
ten years'
and in such a state
of
use they had become pitted
had
repair that they were unfit for further
use. We accordingly
these coils replaced
at a price not to exceed $9,244. Final statehowever,
it is estimated
that the
ment has not been received;
$8,800.
cost will run approximately
building,
including
cost $1,148,417.42,
vaults,
originally
has been charged
off. We have set up a
of which $218,120.22
reserve
which on Decemof 2 per cent per year for depreciation,
ber 31, 1930, amounted
The cost of the repointto $148,572.50.
We feel, however,
ing will be charged
that the
to this reserve.
to the front of the building
cost of the alterations
and the cost
the Directors'
of building
room and alterations
on the fifth floor
is a proper charge to Building
Our ventilating
Account.
and cooling system
$45,346.24,
against
which a reserve
cost originally
of
4 per cent is set up yearly, which reserve
31, 1930,
on December
The cost of replacing
to $21,734.40.
the coils of apamounted
$8,800 will be charged
to this reserve.
proximately
Our

It might be interesting
to know that these estimates
were
made a year ago and by waiting a little while to have the work
done, it is being done at the present time for almost half of what
the estimates were a year ago. We have a little difficulty, when
we award one of these contracts
to keep the
or sub-contracts,
fellow who gets the contract from kissing us on both cheeks.
Since you are now through listening to me except for such
occasion as you may want to call on me in connection with your
discussions, I hope that you may find your meeting enjoyable and
profitable. (Applause)

in the
THE CHAIRMAN: I am sure we may all find satisfaction
He has very
items in the Governor's
report.
many encouraging
information
kindly
that may be
to give any additional
offered
in a discussion
requested
of his report.
is now open for discussion.
Texas) : It is evident
that
W. W. WOODSON (Waco,
you are
out of loans to your member
earnings
unable to make sufficient
Will you explain
banks to take care of the dividends.
with what
your earnpart of your operations
you were able to supplement
ings in order to take care of dividends?
The

meeting

Me. TALLEY: I would say the principal
cause under present
$500,000
is
having
being
since
over
reduced
expense,
conditions
living off
December,
1921. As a matter
of fact, we are somewhat
However,
by reason of that reduction.
as the
our expense account
decline it is more or less axiomatic
that
volume
of rediscounts
Those two phenomin the open market
will increase.
operations
ena have a very close relationship
so that in a policy of ease and
open
a reduction
of rates and in order to make them effective,
market
purchases
are made, which furnishes
us with an increased
amount
of earning
assets to take the place of the decline in discounts.In

Committee had
1924, before the Open Market Investment
defined its policies and became really active, and before the present Open Market Policy Conference was formed, we were permitted by the Federal Reserve Board to acquire sort of a backlog
of ten million dollars in Government
securities with which more
or less to defray our expenses.
The earnings on bills which are purchased in the open market-and
which I assume all of you understand
are offered to us,
for which we do not bid-has
been another contributing
factor in
the earnings.At
the end of last week our average
earning
rate on all of
our earning
assets
was 2-1/5 per cent on $42,000,000
earning
Of course, we are hoping that by the end of this year our
assets.
$100,000 less than
expenses
will have been reduced approximately
the previous
dividend
in itself.
year. That is almost a six months'

B. D. HARRIS(Houston, Texas) : In trading in bonds, when you
realize a large profit as you did this year, what latitude does the
bank have in setting up part of that profit as a reserve against
losses in bonds? Do you have to put it all into the profit account
the excess?
and then pay the Government
MR. TALLEY: We are rather
careful
never to appreciate
our
bonds in our portfolio.
We have never been required
to depreciThe bonds in our investment
ate them.
account
are there
only
in May simply
on a yield basis. In other words, the transaction

meant that in recovering the premium we had paid for the bonds
we
and that part of the premium we had already amortized,
received a yield of 41/4 per cent for the bonds for the time we
had them, plus the difference between cost and sale price of
$120,000. They were in the investment account on a basis of 3.47
per cent, which means that the rest of the coupon amortized the
premium and we would have owned the bonds at par on October
15, 1933, the first optional maturity.
I might say in that connection that in making a trade of that
kind, that is, in making this last trade, we were rather amused
to observe the open market was affected only to the extent of
$1.53. The price we paid for the bonds we put in the account in
exchange for those we took out was $1.53 more than the amount
we received for the other bonds.
That is worked out on a calculation to take care of the situation you have in mind. Those bonds are put in the account at a
yield of 3.05, meaning there will be enough of the premium absorbed and the difference in the decline on October 15, 1933, to
represent a net profit as of October 15, 1933, of about $221,000.
The franchise tax is not effective so long as we do not appreciate the bonds as long as we own them and make no changes
in the investment
account until we either dispose of the bonds
or exchange them.
W. Al. MASSIE (Fort
is represented
earnings
MR. TALLEY:

You

MR. MASSIE:
rency operations?

What

MR.
lege?MR.

TALLEY:

MASSIE:

Wcrth,
Texas) : What percentage
by your currency
operations?
mean

what

percentage

You mean

percentage
do you

by, reason

of our
get

out

of the note

of your
expenses?

of your

issue

cur-

privi-

Yes.

MR. TALLEY: No central bank would be worth anything
at all
if it did not have the note issue privilege-Federal
reserve
notes
bank and not by it. I have no late
are issued to a Federal
reserve
figures
but from
1928, out of about
1920
through
on that
$8,400,000
$6,250,000
was derived from the
surplus
accumulated,
earnings
reserve
notes, that is, by reason
on Federal
of the issuing power based on a minimum
gold reserve
of 40 per cent.
MR. MASSIE: The major portion
by that
of it is represented
?
operation

MR. TALLEY: The major portion of our accumulation
to surplus is created through the note issue power. That is, it was, but
of course, it isn't now. That situation is more or less reversed

because the circulation

account

is very low.

like to ask Governor
Texas) : I would
I. W. PACE (Troup,
for a member
it desirable
Talley or some one else if they consider
to
41/4's and subscribe
bank or its customers
to sell the Fourth
the net yield on the
the 31/;'s, in view of the fact I understand
be bet2 per cent. Would it perhaps
former
now figures around
is over to make that
ter to wait until the subscription
period
it?
desirable
if
it
is
to
make
change,
is what we
to that question
MR. TALLEY: The best answer
41/4's. Whether
did. We exchanged
we were smart or
our Fourth
We
lucky, I do not know, but we sold at the top of the market.
in exchange.
for those we bought
did have to pay a higher
price
el
4ý
had an optional
in selling
However,
maturity,
a
a bond that

probable maturity of only two and one-half years, and purchasing
a bond with a ten-year maturity, you can see that the fluctuations
in price on the ten-year bond would affect the yield less than it
did on those we sold.
It is very difficult to make an arbitrage
profit in the exchange
bonds because
the market
the
not only senses
of Government
between
but in fact, anticithat
relationship
exists
all issues,
pates it.

Most of you saw a circular that was sent out about a week
or ten days before this new issue was announced by a prominent
Government
dealer in which it was suggested that the 3%%8'sbe
be purchased
sold and that F4's and 2 'ý4;'s certificates
and offered in payment
in exchange for the new issue. Within two
days after that circular was sent out and four or five days before the Treasury
announced the terms of the new issue, the
because you had only
profit was entirely eliminated
arbitrage
your average yield on the issue outstanding,
which was about
3.04, and the coupon yield on the new issue was 31/s. That was
only 81/2 points, so the price of the 27/s's and the 23/j,'s went to
a flat basis on June 15th maturity.
The premium we paid on a yield basis absolutely absorbed
all accrued interest
you would get on that date and the new
31/8's were immediately
quoted at a premium of 16/32, which
made the yield about the same as the present issues outstanding.
The only basis of comparison
that you have in making
of your secondary reserve or surplus
your current investments
funds is really your bill rate and your correspondent's
rate on
your balances. In other words, if Fourths are selling on a 2 per
cent basis, you know that the 2 per cent yield upon the Fourths
for the length of time you would own them is 11/2 per cent better than your balance rate and 1 per cent better than your bill
rate.

Of course, while the element of time enters into it, you can
figure on sacrificing a certain part of the premium you would
pay on your Fourths if you sold at less price than you paid down
to, say, a 1 per cent yield and you would still be a half of 1 per
cent better off than you would be on your balance rate and you
would be .45 points better off than on your bill rate by reason
of your income tax deduction.
To ask anybody at the present time what they would do
with their money is a very difficult question, as I am sure you
all appreciate,
and as far as the System's attitude toward that
policy, we are trying to make them do something with it.
THE CHAIRMAN:

Mr. Massie,
Your Committee
Ma.

MASSIF:

Are

there

any

other

questions?

do you care to make a supplemental
on Division of Earnings?

report

for

No.

THE CHAIRMAN: In setting up the program for this meeting,
the Program Committee considered a number of possible subjects
for discussion that were pertinent for the consideration
of this
meeting and settled, finally, on two. One subject was whether or
not a unified system of banking in this country is desirable for
the business interests
of America. We could not complete that
item on the program, the speaker we wanted not being available
for us. We had better luck with the other subject, which was,
"Should Membership in the Federal Reserve System Be Liberalized?" for we were able to secure the consent of John E. Owens,
Vice-President,
Republic National Bank & Trust Company, Dallas,
to discuss this subject.
We will hear from Mr. Owens at this time.
I want to ask
Mr. Chairman
MR.OWENS:
and Gentlemen:
the pardon
of this group for the reason that I did not adopt the
took over the subject
that
subject
was given me but instead
first mentioned.
which Mr. Johnson

I want to say as a preface to any other remarks, that a few
Governor Talley and told him I would
nights ago I telephoned
like to ask a few questions and get a little information
and I
Promised him faithfully I would not hold his time for longer than
ten minutes. I got to his house about eight o'clock and as I left
he said, "Thank you" very hosabout ten and said, "Goodnight,"
pitably-as
if he appreciated
that I was going. (Laughter)
I can't resist saying one other thing. Dr. Lefkowitz, in that
beautiful prayer, expressed such an abnormal knowledge
of business as to be almost a scandal with a preacher.
What I am going to say is appropriate
to the first subject
mentioned and not to the one mentioned in the program. I would

to be in
like to make this suggestion-every
man here ought
keep
in
his
library
the
of
proceedings
and
and
of
own
possession
I obtained
Sub-Committee
the Senate
and Currency.
on Banking
to
Walsh
it
Colonel
Governor
Talley
from
seems
and
and
a copy
in
fashion
banking
it
thought
the
that
a
general
represents
me
that we can get from no other source. I think it is a marvelous
to bankthing to have and if you have any interrogation
relative
Reserve
System,
Federal
ing principles,
the
group
or
chain,
branch
banking,
much
you can come to your own conclusions
in that little
better
expressed
after having
read those thoughts
book than in any other way I know.
This shareholders'
and came into being
group was organized
and difagainst
our Dallas bank, but all protests
as a protest
ferences
position
seem to have been ironed out and our present
Justification
for our continued
is one of tranquillity
and harmony.
by the things we discuss here and
existence
will be demonstrated
the constructive
work we may do. The directorate
of our Federal
Bank is here to explain, to counsel and advise. Our Dallas
Reserve
bank is infinitely
our reserves
more than a place to carry
and
discount
It is a vast bureau
for the
of information
our paper.
library
banking
mind. It has a rapidly growing
econon financial
to
employed
omy and has some of the finest minds of the country
information.
It has a field force
statistical
gather
and disseminate
banks
whose duty it is to keep in touch with not only the member
in the nation.
but with every item of financial
It should
welfare
be the bankers'
club for this district,
and its services
are manifold. This shareholders'
is an open forum
meeting
and will be
what we make it.
As a bit of philosophy,
I would suggest
that there
is but
Nothing
is static;
life
one thing permanent,
and that is change.
is flux, flow, movement.
This fact to staid people is most disconIt seems
to postulate
itself
that
truth
is evanescent,
certing.
Just about the time we learn to patter
nebulous
and unfixed.
a
"New occasions
teach new dutiescreed new revelations
appear.
time makes
the time
ancient
good uncouth,"
and just
about
to a Rock of Ages some
we feel that we are comfortably
anchored
daring
into the unknown,
soul throws
a new outpost
and we
have to learn all over again.

Also as a basis for the following discussion, let us admit that
there is but one intelligence
and that is, a knowledge of God
laws, and that there is but one virtue, and that is
Almighty's
obeying them.
Banking participates
in this law of change, much to the
distress of the orthodox mind who believes certain principles to
be fixed and holy. With the discovery and recognition
of virtue
it. When a salutary truth is dismust come force to perpetuate
covered in banking, it must not be embalmed, but imposed. The

history
dignified
has
been
in
banking
this
country
not
a
proof
but has often been demonstrated
cessional
progress,
of economic
by failure
in values
Our tremendous
increase
and
and despair.
from the wilderness
from the raw to the finished,
rapid changes
to civilization,
has covered
many a weakness
and fundamental
error.
As communities
and states
values,
progress
slows down
to success. The same
necessary
profitable
growth
on a 10 per
when that rate has declined to

settle down to more or less fixed
judgment
is
and a more refined
policy that would show for a bank
be used
cent current
rate cannot
6 per cent.

A bank must change its processes
in a rapidly growing
country when the values of that country have reached a mean
level and where speculative
rises no longer serve to protect a
careless customer and a weak loan.
Every
has been an invasion
step forward
of what has been
has been resented
considered
every control
as an
vested rights;
We
have
banks
the
attack
of
state
on personal
seen
old
-liberty.
issue go into the discard and the National
Bankchaotic currency
ing Act of 1863 lend its strengthening
influence to the security
of
this land and we have seen the chartered
institutions,
state and
drive the private
banks
into the history
national,
of the past.
Banking
is not a private
debusiness;
by reason
of the people's
posits, a bank is a public service corporation.

As the public contribution
in deposits is greater
the capital stock and the bank check, credit currency,
ing institution
becomes a national organization
that
under a national and unified control.

by far than
every bankshould come

Much is still said of state rights
and much of it is buncombe.
When men want to perpetuate
they appeal to state
a weakness
they think in
rights but when they want a strong,
unified virtue,
terms.
national
honest.
When we think of the Father
Let us be historically
let us not talk of George Washington,
but let us
of his Country,
think of Alexander
Hamilton,
the first bank. Senwho started
timentally,
but practically
we are Jeffersonians,
we are Hamiltonians.
From the date we passed
(Laughter)
out of the Confederation
and formed a constitutional
government
we have been
Hamiltonian
forms and passing
going toward
on to the Federal
Government
more state and local powers.

Jefferson
was opposed to the first bank because it was
national. Jackson swung the big stick when he exclaimed: "The
Federal Government-it
shall be preserved!"
and state rights
died in haggard, heroic glory with Lee at Appomattox.
Since then
has been rapid.
our nationalization
and federalization

Washington,
in his farewell address, said: "Let us beware
of foreign entangling
alliances"
and since that time we outtraded Napoleon for the Louisiana Purchase, stole Texas, bought
Alaska, absorbed Hawaii, became nurse for the Philippines,
and
for Cuba. (Laughter)
godfather
Recognizing
that interstate
matters
are national, we have
set up Pure Food laws, turned the powers of State Railway ComCommerce Commission, and so on.
missions over to the Interstate
The tendency is to turn all cases from a dog fight to a poker
folk are
game into the Federal courts for trial, and sentimental
wanting a uniform Federal divorce law. As they pay a part of the
bill, the road system has gone under Federal control and corn
Amendment.
whiskey is measured by the Eighteenth
"There is no God but Allah"
The pious Mohammedan
intones,
Mecca, but we turn our yearning
toward
and kow-tows
eyes to
Washington.
Why look backwards?
We have become
a nation.
State rights
belong with the family album, pressed
flowers in the
old Bible, daguerreotypes,
and the sword grandfather
wore at
Shiloh.About
fourteen
the Federal
Reserve
years
ago we started
System
from the economic
Banking
flowers of the
and garnered
and it is truly "heir to all
old world every perfume
of experience
in the files of time." It is the greatest
the ages and foremost
act
in our national
history
partaking
of aristocratic
management
and
democratic
(Laughter)
control.

Set up in twelve banks, in separate units under Federal control, each bank has nine directors-three,
appointed by the Federal Board-six
elected by the member banks of the particular
district, the three, representing
the appointed directors, being the
aristocratic
group, the six the democratic leaven. There are twice
(which
as many directors elected by the ballot of the electorate
is the group of member banks) than are appointed by the Federal
Board. This should convince us that though we are considerably
federalized,
we are still healthily democratized.
To the shareholders
of this meeting I would suggest that the
Good Book says: "The last enemy to be overcome is death," but
I say unto you, the first enemy to be overcome is indifference.
This indifference
is astoundingly
indicated
by the appallingly
small vote cast for the directorate.
The shareholders
should come to the meeting-they
should
make known their views-they
should advise the directors, and
they should share in that inestimable, ineffable joy of cussing the
Government,
a privilege so dear to the hearts of all good American citizens. (Laughter)
We have too many banking systems-there
should be but
one. I wonder how many of you agree to that? It is the special

to discuss this very thing.
province
of a meeting
of this character
How many of you have read carefully
Owen D. Young's
stateHe
ment to the Senate Sub-Committee
and Currency?
on Banking
thinks there should be but one control and that should be the FedHe believes
System.
that all examinations
eral Reserve
should
It is rather
come from that quarter.
radical and it means that all
banks should be national
banks
and discipline
and regulation
should come from one authority.

in such a suggestion,
to my
There is nothing distressing
mind, and I am sure that should this be done it would be impossible for 6,000 banks to fail in a decade. The railroads are inCommerce Comtegrating
in this fashion under the Interstate
mission, much to their benefit.
With forty-eight
we have fortystate laws and one national,
The good bank no longer
nine competitive
and irrational
systems.
itself to local loans and demands
confines
a spread
of risk and
has diffused
The widening
profit.
use of acceptances
a genial
demands
banker
credit
and the country
someover the nation
thing besides chattel mortgages
Through
his city
for his portfolio.
Reserve
he is enabled
to do that
correspondent
and the Federal
thing he has insisted
doing-diversify.
customer
on his farmer
His customer
buys no more exchange
but all remittances
are
is no longer
but namade by checks. His association
parochial,
tional, and why should not his control be national?

There is a straight
and narrow way that leadeth to safety
Commerand a broad and loose way that leadeth to destruction.
cial organizations
are learning the value of the trust; city administration the strength
of the city manager plan. No longer does
the town dweller get his water from the individual well or cistern, but draws it from the giant cooperative
reservoir where
purity and sanitation may be compelled. The Comptroller's
office
is an autocratic
institution - the Federal Reserve more democratic. The member banks elect two-thirds
of their governance
in the Federal Reserve and through this representation
flexibility
can be assured. The Federal Reserve is not perfect but it can be
Perfected. The laws of creation are still in operation as they were
in life's early morn.
Monotheism
is more satisfactory
than polytheism
and the
conception that there is one just controlling power is more happy
than the myriads of gods and devils of the older day. Concentration of power and virtue and intelligence
is the essence of
wisdom. Hamilton had the idea of integrated
control; Jefferson
the idea of an individual virtue that needs no control. Jefferson's
thought was the more lovely; Hamilton's
the most correct.
There is one oft-repeated
error in the expression that government must not concern itself with business, but it has, it will,
it must. As in a baseball game, it must act as an umpire, but

its
it
is
it
to
out
of
catching,
getting
pitching
and
goes
when
It seems to me that the idea of the Inter(Laughter)
sphere.
Commission
taking
and superover the control
state Commerce
The idea that
is but common
a
sense.
of the railroads
vision
five states should accommodate
through
freight
shipment
passing
is unsound
itself
to five different
and
rulings
and authorities
Comto the Federal
this power is gradually
passing
consequently
mission.Gentlemen,

there must be some change in the governance
of banking. It cannot stand still, and this body should undertake
In my
to voice some viewpoint. Do you want branch banking?
opinion the integration
of power in the Federal Reserve System
would defer this question for another twenty-five years. Merging
the Comptroller
office into the Federal Reserve
of Currency
would be a simplification and a start towards this integration.
Personally,
my mind is not clear as to how this concentration
System
in the
Federal
Reserve
be acmight
of program
but I am clearly
complished,
of the opinion that we would benbanking
history
is simply
efit from a national
policy. Our recent
It is plainly rotten.
The let-alone
a thing that cannot be ignored.
policy will not suffice. Virtue
and strength
must be discovered
Concentration
and must be imposed.
of power is simplification

and if we cannot come under some central
of administration
trol we must look for branch banking.

con-

The trend today is toward branch banking. I could make a
speech on both sides of the question, and I have done so. A few
years ago Mr. Hecht of the Hibernia was opposed to branch banking but I have a suspicion he is beginning to favor it. I look upon
branch banking with some fear. Branch banking is easy to control but it has, certainly,
Under our
some serious objections.
present system an isolated failure does not destroy the structure,
but the failure of a great bank with innumerable
branches would
be a terrible calamity.
If the state banks would voluntarily
join the Federal Reserve System it would make our path of progress
more clear
those banks who refuse to join are beneand unquestionably
fited through
the correspondent
who is a member. One of the
greatest
contributions
of the Federal Reserve System is the
stabilization
of interest rates, and after all, the most precious
The entire study of economics
word for commerce is stabilization.
is based on the expansion and contraction of credit.
What we mean by good times is expanding credit and what
we mean by bad times is contracting
credit. Expanding
credit
means increased production,
contracting
credit, reduced production. Therefore,
The
contraction
means also underconsumption.
laws of God Almighty do not argue, but operate, and it is impossible to conceive of a condition so well adjusted that consump-

tion and production may be perfectly balanced, but through a uniin credit may be amelfied program the evils of over-expansion
iorated. Under our present system these excesses serve to correct
but at a dreadful cost, and we have every right to
themselves,
hope that through wise practices these great peaks and doleful
valleys may be in some degree stabilized. However, this will only
banking
increased
through
program
a
of
national
wisdom,
come
backed by unified economic power.
The Good Book tells of a time when "there
were no kings
in his own eyes,"
in Israel
was right
and each man did what
that Scripture,
you will find that
and if you will but continue
Israel was in a devil of a fix. (Laughter)
There must be kings in Israel. There must be leadership,
and
I do not accept every promise
above all, there must be control.
and conclusion
of Mr. Owen D. Young, but it seems to me that a
If
those
firmer
means
much.
national
control
along
with
program
is the best,
who hold to the idea that a dual system
of banking
System
Reserve
then all state banks should come into the Federal
program
of
and by conference
a more unified
and agreement
If this be impossible
economic
of acmay be instituted.
virtue
banking
then we may surely look for branch
complishment,
and
it will simply be a question
of the survival
of the fittest.

Again, let me express my conviction that democracy will be
safe in banking so long as the banking fraternity
elects six out
in each of the Federal reserve banks. I look
of nine directors
with some fear on branch banking in which the entire credit of
the nation may be centered in too small a group. The ever-ascending march of virtue is ruthless. It destroyed the state banks of
issue by the imposition of a tax and it has eliminated the formation of the private bank from the national scenery.
It is going to correct the evils of a condition in which banks
may fail by the thousands,
spreading wrack and ruin in their
paths.Let
before - there are
me reiterate
a thought
expressed
those who have a Chinese mind. Virtue to them consists in a
reverence of the past and a fear of the future, but I will repeat
that life is flux, flow, movement.
Let me assure you, gentlemen,
that the present weakness
Must pass away. The people will not continue to endure the unbearable, so we must look for
radical changes in our structure.
Evolution works from the top down
from
the
revolution
bottom up. Let us by thought
and discussion discover the evolutive path and avoid the
revolutive process. We do not want the
unholy hand of the politician to swing this reform. It is our particular job, "and greater is he who ruleth himself than he
who
taketh a city."

In my opinion,
to enter into a
we are just now beginning
How is it going to come about?
Like it has
period of relaxation.
are
always come about in the past. The farmers
of this country
to society
going to make these
occasional
contributions
of an
When a bale of
any recompense
entire crop without
whatsoever.
hands there is a tie bill to pay;
cotton passes from the farmer's
is the interest,
is the ginning
bill to pay;
there
there
the exthe freight,
change,
and the various
elements
of charge,
and his
is simply giving
contribution
away a year of work.
It is my idea we are going to get a period of relaxation
out
that is going to be followed
by cotton.
They will be
of wheat;
given away to pay the hauling
and the other
charges
and the
money will be distributed
at the cost of the fellow below. This
is a national
tragedy
to do with this discussion.
and has nothing
However,
it is as corrective
for God
a thing
as it is possible
Almighty
to have given as a law. If we had fifteen to twentyfive years of what we call prosperity
in this country,
it would ruin
in this country
every bank and every mercantile
establishment
because prosperity
goes to our head.
like
There is one large value in a great depression
It develops
which I believe we are just emerging.
every
exposes
every fallacy
and lays bare every foolishness.
Scripture
is appropriate:
"Before
I was afflicted
I
but now have I kept Thy word. It is good for
astray,
have been afflicted,
learn Thy statutes."
that I might
this period and has not learned
who has gone through
Depressions
is devoid of imagination
and intelligence.
sary and are the stepping
stones to higher things.

this from
weakness,
A bit of
had gone
me that I
The man
anything
are neces-

We may view the future
for out of
with faith and serenity
the bitter experience
of the past we will step to a higher
plane of
life with renewed
American
faith
(Apand a greater
wisdom.
plause)MR.
MASSIF: May I avail myself
the Chairof the privilege
me a moment
ago and rise to a point of informaman accorded
In reading
the title of the subject
Mr. Owens,
tion?
assigned
I was wondering
if there was not an
which he so ably handled,
and that the last word in the title
error on the part of the printer
"subsidized"?
(Laughshould have been, instead
of "liberalized,"
ter)
THE CIIAIRIIAN:
is quite as acceptable

The Chair will say that
under one title as the

Mr. Owens'
other.

address

has been made to the lack of active participation
Reference
in the very important
duty which
on the part of the stockholders
is theirs
interest
in the election
of taking
a definite
and positive
We have some opportunities
ahead
of us for this
of directors.
year in that respect.

The
National

has asked
committee
Bank, of San Antonio,

Frost
President,
Mr. J. H. Frost,
to speak to us on that subject.

I have wondered
MR. FRosi': Mr. Chairman and Gentlemen:
how I happened to be selected by the Chairman to speak to you
on the subject of the Election of Directors and it occurred to me
possibly he wanted to be perfectly sure that he would not inadvertently stumble upon a candidate and give him an opportunity
to talk. I want to assure you he has been successful in selecting
that kind of man to speak to you. I have already had my experience, and I will say to anybody who might have in mind being a
candidate for director of this Federal Reserve Bank, that after
associating with the men who are already on that Board, whether
he likes it or not, will get rid of any idea he might have that it is
just a nice compliment. He will find that those men are taking
their duties seriously and that it means real work.
from our Chairman,
inviting
When I received a telegram
me
to say a few words to you with regard
to the method
of electing
directors
Reserve
Bank, it seemed at first to me
for the Federal
that I or any member
banker
tell in a very few
could offhand
words all there was to know. I do not want to alarm you at this
late stage of our meeting
into thinking
that what I have to say will
take much of your time. On the contrary,
it will take only a very
few moments.
However,
when I began to look over that part of
the Act referring
to the selection
and the rulings
of directors
I was really surprised
to find how very hazy I
upon the subject,
to it.
Was in my own mind with regard

I am sure that the idea of the Chairman
in asking me to
Speak to you was not so much that he thought many member
banks were in need of instructions
as to the mechanics of how
to cast the ballot, but I rather think that he was of the opinion
that anything which might cause us to take more actual interest
in seeing to it that the best material available might be serving us
in the capacity of directors would be beneficial.
As we all know, the Board consists of nine members-three
Class A, representing
the banks, who may be and generally are,
active bankers ; three Class B, who must be at the time of their
election actively engaged in agriculture,
commerce or industry,
but not
an officer, director or employee of any bank; three Class
C, who shall not be an officer, director, employee
or stockholder
Of any bank.
ChairThe Class C directors, one of whom is designated
man, are appointed by the Federal Reserve Board and for our
purpose may, therefore, be left out of consideration.
The Class A and Class B directors are, however, both elected
by the
for the kind of
member banks, so that the responsibility
rnen who compose two-thirds
of the Board is directly upon the

for
threedirectors
B
A
Class
banks.
each
serve
and
member
director
Class
B
A
Class
terms,
and
one
one
only
and, since
year
is elected each year, violent or radical and sudden changes in policy are not probable.
banks
For the purpose
of member
of assuring
representation
into
Groups
1,
divided
district
in
banks
the
the
are
of all sizes,
having
2 and 3, Group 1 being composed
a combined
of banks
last
$399,000-and
in
numbering
excess
of
and surplus
capital
banks
having
Group
being
2
banks;
64
of
a comcomposed
year
bined capital
and not less
not in excess of $399,000
and surplus
last year 257 banks,
than 5100,000-numbering
while Group 3
banks having
is composed
capital
and
a combined
of all member
last
395
$100,000-and
less
than
about
year
numbering
of
surplus
banks.Last
was elected by Group 1 banks
year a Class A director
Class
A
Group
banks.
This
Class
B
director
by
2
year
a
and a
director
will be elected by Group 3 banks and a Class B director
will be elected by Group 1 banks. Next year a Class A director
by Group
will be elected by Group 2 banks and a Class B director
3 banks. So that in each election a Class A and a Class B director
is chosen each by a different
group.
During
bank enthe latter
part of September,
each member
from
titled to vote in the election
a communication
will receive
the Chairman
of the Dallas Board, advising
of the approaching
and enclosing
a blank form for nominations
of Class A
election
and each bank will have the right to send
and Class B directors,
in one nomination
These
be
of each class.
nominations
must
by the Board of the member
bank and must be in the
authorized
hands of the Chairman
25th. The
of the Dallas Board by October
Chairman
to each bank in
of the Dallas Board will then forward
the two groups entitled
to vote a list of the nominations,
showing
by whom made, and a ballot for voting.
This ballot must be cast within fifteen days after its receipt
and must be in the hands of the Chairman
of the Board at Dallas
15th. The vote must be for
not later than 3:00 p. in., November
the first, second and other choices of the various
but,
nominees
The
of course,
not more than one choice for any one candidate.
by an officer duly authorized
by his Board
vote must be executed
I might mention
here that for many years the law
of Directors.
that some one officer of each bank should be authorized
provided
to cast the vote for such bank, but that the law on this point has
bank
now been changed
so as to permit the directors
of a member
by title instead
to designate
of name several
officers,
any one of
that
whom
may cast the vote, and, further,
such designation
by a subsequent
should be permanent
unless changed
resolution.
This amendment
in the law is the direct result
of a recommendation
Association.
made by your own Stockholders'

On November
15th at 3:00 p. m., the ballots are counted
and
having
first choice votes, which are a majority
of
any candidate
has first
If no candidate
elected.
all votes cast, shall be declared
of all the votes cast, then votes
choice votes which are a majority
for first and second choice for each respective
will be
candidate
then having
of all
added together
a majority
and any candidate
If, however,
votes cast will be elected.
no candidate
yet has a
shall be
majority
of all votes cast, then votes for other choices
candidates,
added to those of first and second of the respective
having
the highest
of votes will be
and the candidate
number
elected.As

for
burden
to
is
fact,
it
you
necessary
not
a matter of
yourselves with this detail of the mechanics of the vote and the
manner of the count, since the instructions
received at the time
for nomination and for election of directors will be very clear.
thing is for you to realize the responsibility
The important
to the composition
which you have with respect
of the Board at
Dallas. The framers
of the Act must have had this in mind, for
the law states
but that
that each bank may make nominations
In other words, voting is maneach bank must vote for directors.
datory.With

regard to the duties of directors, let us see what the
law states. "The Board of Directors
shall perform the duties
to the office of directors of banking assousually appertaining
ciations and all such duties as are prescribed by law. Said Board
the affairs of said bank fairly and impartially
shall administer
in favor of or against any member
and without discrimination
bank or banks, and shall, subject to the provisions of law and
the orders of the Federal Reserve Board, extend to each member
bank such discounts, advancements
as may
and accommodations
be safely and reasonably made with due regard for the claims and
demands of other member banks."
These
to
are broad
powers,
and, since we have the right
select the men who will exercise
we should be exsuch powers,
tremely
Bear in mind
interested
in their selection.
and careful
that these directors
in the first place are charged
with the responsibility
that
are handled
of seeing
our reserves
so as not
under any circumstances
being
in danger
to become
of either
lost
in non-liquid
investment
that they may not
or so involved
at all times be immediately
available.
here, referring
I might interpose
to the statement
which the
Governor
made, that out of the assets of failed banks which we
Were holding
Bank, which,
in this Federal
Reserve
considering
Present conditions,
believe about $275,000were very small-I
there
was no reason to anticipate
any loss whatever,
which means
that the
affairs of the bank are looked after and that the assets
are being handled
in such a way that our reserves
are not in
danger
form
of being lost nor in danger
of being in non-liquid

Federal
Bank
Reserve
in
the
be
trouble
there
that
any
would
so
be
is
to
its
amount
so
an
small
requirements-$275,000
meeting
tied up in the assets
of failed banks that it is inconsequential.
Bear in mind, also, that they must at all times maintain
a
such that they will be able to quickly and unhesitatingly
condition
from
to
their total
us
as
cash
up
paper
good
and
eligible
accept
to our several
in proportion
loaning
always,
of course,
ability,
Bank.
to the capital
and deposits
of the Reserve
contributions
they must be ready to refuse
This means
credit
as wisely and
the offerings
fearlessly
whenever
of a member
as it is granted
bank are not up to standard
as to eligibility
either
or safety,
bank are out of prothe borrowings
of a member
and whenever
to its contribution
to the System
or of too continuous
portion
do not and cannot
Of course,
duration.
the directors
pass upon
This is the province
the merits
of each transaction.
of the operby the
but the operating
officers
are selected
officers,
ating
Board,
to
at the pleasure
of the Board,
are removable
subject
for the
the final responsibility
their instructions,
and therefore,
safe and proper conduct of the affairs of the bank belongs strictly
and fully to them.
I hope you may permit
me now to mention
a resolution
at its first meeting,
passed by this Association
with the spirit of
been in full accord,
but which could easily
which I have always
be interpreted
too narrowly
and thus
work to our detriment
I refer
instead
to the resolution
of to our betterment.
recomin office for directors
the idea of rotation
mending
of the FedBank.
eral Reserve

This resolution
that a director of this Fedrecommended
eral Reserve Bank should not be elected for more than two
terms of three years each. Personally, I feel that, basically, the
idea of rotation is sound, for several reasons, such as the advantage of having as many active bankers in our district as
possible who have had the experience of serving on the Board
of the Reserve Bank. Secondly, it is without doubt a very great
compliment to receive election to the Board by the member banks
and one which should not be confined to a few men in the district. It is likewise also true that ordinarily there are more than
a few men eligible to serve who are fully able to do so efficiently
and to the advantage of the stockholders.
At the same time, there is much to be said on the other side
of the question. Fundamentally,
what we are after is the service
of those men of the highest character and most able to perform
the duties which will be incumbent
efficiently
upon them as
We may very well imagine a case where one man's
directors.
ability and especial fitness for the position is outstanding
among
the bankers of his group, or, in the case of a Class B director,
among those eligible to serve. We may also imagine a critical

condition prevailing, such as that in which we now find ourselves
in this country, where it might seem to us that we could ill
director
whose
afford to lose the services of an outstanding
second term might be about to expire.
It is my belief that, in such cases, the member banks should
the recommendation
embodied in the
not hesitate to disregard
stockholders'
resolution above referred to, and that they should
elect such a man to a third term, a fourth, or as many terms as
he might be willing to serve.
I now wish to refer to the resolution passed at the meeting
in June of last year, recommending
to the
of this Association
"that no pledges or promises of votes in favor of
membership
in the Federal Reserve Bank of
any candidate for a directorship
Dallas be sought for, or given, but that each voting member shall
be prepared to vote in favor of the candidate who, to such member, may at the time of the election seem to be most desirable
and the one who can best serve the interests of the district."
I had something to do with this resolution and am glad to
have this opportunity
to express myself, after having had a
year's time to think the matter over, as still being very strongly
of the opinion that the underlying principle involved is sound.
does not by any means prevent or frown
This resolution
having in mind far in advance the fact that a
upon stockholders
new director will be eligible for election next November, and discussing one with another the merits of the various possibilities
as candidates. The whole purpose of the resolution is to prevent
pledges of votes so far in advance of the election that, if the
practice should become regular, we would be passing the position
of director around among our membership
purely as a complimentary matter and not selecting our directors on account of
our belief in their fitness at the time of the casting of our vote.
In concluding, let me urge each of you to check up on your
records at home and see to it that your Board shall pass, if they
have not already done so, the resolution authorizing
any one of
several officers designated by title to cast the vote of your bank
for directors of the Federal Reserve Bank. When this has been
done, let me urge you to keep in mind the fact that the Class A
director will be elected this year by Group 3 banks and the Class
director by Group 1 banks.
Give some thought to the man who might be the best possible material for the position, whether he happens to be the
director whose term expires or not. Discuss the
several names
which may occur to you with your friends, and place in nomination your choice at the proper time,
be during the
which
will
latter
part of September or the early part of October. Then be
Prepared to vote first choice for your nominee and second and

other choices for other nominees, in accordance with your preference, but do not by any means pledge yourself far in advance to
vote for any director,
either as first, second or other choice,
except, of course, first choice for your own nominee. I have no
doubt but that the member banks in this district will perform
their duty in this respect and that, in doing so, they will reap
the benefit therefrom.
(Applause)
CHAIRMAN:

THE
Committee.MR.

We will have the report

of the Nominating

HOOPES: Mr. Chairman
and Gentlemen
: The Nominating
Committee
the following
for election
wishes to submit
nominees
Advisory
Committee
to take the place of
on the Stockholders'
those whose terms expire this year :

A. Querbes,

President,

First

National

J. E. Angly, President,
Texas.

East

Texas National

A. B. Childs,
Texas.

Cashier,

F. M. Murchison,
Texas.

Morris

President,

County

First

Bank, Shreveport,

La.

Bank, Palestine,

National

National

Bank,

Bank,

Naples,

El Paso,

A. J. Peterson, Cashier, United States National Bank, Galveston, Texas.
W. P. Riley, President, Junction State Bank, Junction, Texas.
The committee recommends
the election of these nominees.
THE CHAIRMAN: Are there any other nominations?
MR. MASSIE: I move the nominees recommended by the Nominating Committee be elected by acclamation
and the Secretary
be instructed
to cast the ballot. The motion was seconded and
carried.
CHAIRMAN:

THE
Committee.

We will have the report

of the Resolutions

Air. Chairman
Mx. WoonsoN:
and Gentlemen:
the following
tions Committee
respectfully
submits

The Resolureport:

"We take pleasure in noting the favorable position of the
banks of the Eleventh District as shown in the excellent report,
made by the Governor of the Federal Reserve Bank of Dallas,
indicating
that the banks of this district are meeting present
conditions with courage and ability. We regard the management
of the Federal Reserve Bank of Dallas as capable and efficient
and commend it for pursuing policies that are sound for meeting
to kno'
the exigencies of the present situation. It is gratifying

the management
bank's surplus
date.

was able to earn dividends without depleting the
during the past year and the present year to

"We recommend
of a committee
of seven to
appointment
of division of Federal Recontinue the study and consideration
thereto.
serve Bank earnings and legislation pertaining
"We recommend a committee of seven be appointed to study
a cost analysis of commercial accounts based on activity of said
by the
accounts, looking to the adoption of uniform practices
member banks."
We regard that as very important
at this time and believe
that committee should spend considerable time in studying that
I would like to suggest to the incoming
Chairman,
subject.
Beverly Harris is assembling
a lot of data on the subject and
would be a good man to be on the committee. I believe we could
get a good report from the work that has been done already along
that line. At Waco the banks are already studying the matter
as the best system of introducing a service charge based on activity rather than on the arbitrary
fixing of a definite rate.
that member banks take greater interest
"We recommend
in the election of directors of the Federal Reserve Bank.
for the courtesies and enter"We express our appreciation
tainment extended member banks by the Federal Reserve Bank
of Dallas.
"W. W. WOODSON, Chairman
"W. C. PIERCE, JR.
"B. D. HARRIS
"J. C. CHIDSEY
"IRVIN McCREARY."
I move the adoption of the report.
The motion was seconded and carried.
to have with
TilE CHAIRMAN: We are all very much pleased
us today a very distinguished
man amongst
us and throughout
this country,
that I have heard
in the
a man whose addresses
past have been dripping
with words of humor,
at times of optiI am sure we are all very happy to
mism, and always of wisdom.
know
R. James,
a member
of the Federal
we have Mr. George
Reserve
Board, with us today and will be glad to have him say a
few
words to us now.

GEORGER. JAMES (Member, Federal Reserve Board, Washington, D. C.) Mr. Chairman, Ladies and Gentlemen:
I came out to
listen,
is
There
to
a
nothing I could add to
make
speech.
not

that I would want to
your program in the way of information
promulgate
after listening to the very able talks you have had
today.There
is a world of wisdom expressed
at these meetings
you have here in Dallas. It is always a pleasure to be here. It is
always a pleasure to me to meet these old friends, many of
whom I have known for many years. I suspect I have been coming to Texas longer than almost anyone here. Some of you have
lived here longer but I remember when the end of the railroad
was about at Fort Worth and from there on one either walked
or went on horseback and sometimes rode in a wagon. In those
days I made wagons and sold some of them.
My old friend, Patrick, was one of the old boys; I remember
when he first started in banking. My memory goes back to the
days when the trials and tribulations
were much greater than
they are now.
I have an old friend in Houston-all
of you may know Roy
Farrar-who
he
frequently
sends me a little pamphlet-perhaps
is generous and sends them to you, too. These little pamphlets
influence to me in my job
are always welcome and a sustaining
in Washington.
When I hear people talking about hard times and
the difficulties they are called upon to meet, I pick up one of
Farrar's pamphlets and read about one of the boys at San Jacinto
or around the Alamo in those days and it is inspiring.
I have been inspired with what your Governor has said and
impressed by what Mr. Owens had to say. Those two
particularly
addresses ought to be published in separate pamphlets
and distributed widely, and when you do that I am going to ask that
liberal with the Federal
you send me a large quantity of them-be
Reserve's money in printing them. There are a lot of fellows I
would like to send them to so that they might read them and
get the philosophy and wisdom contained therein.
I told Ben Johnson in Washington
the other day I wanted
to come out here and be with you once more, at least, but that
I hoped he would not ask me to make a speech. (Applause)
Following announcement
by Mr. W. J. Evans of the Federal
Reserve Bank of Dallas regarding
the luncheon at 1 o'clock in
the Danish room of the Adolphus Hotel, given by officers and
directors
of the Federal Reserve Bank of Dallas, the meeting
adjourned
sine die at 12:40 o'clock.

DIRECTORS-FEDERAL

RESERVE

E. R. BROWN,
Dallas, Texas.
S. B.

W. H. PATRICK,
Clarendon,

PERKINS,

Dallas,

J.

Texas.

R.

E. HARDING,

Waco, Texas.

DIRECTORS-EI.

J. L. HERMANN,

PASO

BRANCH

A. F. JONES,

Portales,

Texas.

FARRAR,

W. D. Gentry,
Houston, Texas.

Houston, Texas.

DIRECTORS-SAN

M. CRUMP,

San Antonio, Texas.

New Mexico.

BRANCH

DIRECTORS-HOUSTON

R" M.

Texas.

J. R. MILAM,

Texas.

El Paso,

WILLIAMS,

Fort Worth,

Texas.

J. J. CULBERTSON,
Paris,

P.

Texas.

Mineral Wells, Texas.

C. C. WALSII,
Dallas,

OF DALLAS

BANK

ANTONIO

BRANCH

FRANZ C. GROGS,

San Antonio,
R. T. HUNNICUTT,

Del Rio, Texas.

Texas.

Abilene, Texas
F. & M. National

W. R. Keeble

Cashier

Albany, Texas
First National

Joe B. Matthews

PresidentCashierVice

Allen, Texas
First National

James

Alpine,
First

G. W. Baines

Texas
National

Garland
President

Anna, Texas
First National

H. G. Giles

Cashier

Arcadia, Louisiana
First National

W. M. Deas

PresidentCashier

Atlanta, Texas
Atlanta National

Henry

Bailey, Texas
First National

A. King

G. E. Carpenter
Ray Brock

Cashier

J. W. Tolleson
D. W. Ramsay
Mrs. J. W. Tolleson

President
Cashier
Asst. Cashier

Chas. H. Stroeck
P. B. Doty

PresidentPresident

W. T. McNeill
L. B. Moore

Vice President
Cashier

Cecil Thomas
G. T. Webber

PresidentRepresentative

E. C. Fagg
Jas. R. Bass

Vice President
Cashier

Cameron, Texas
Citizens National

Oxsheer

President

Canton,
First

W. L. Steed

Vice President

G. K. Richardson

President

E. T. Fry
Frank Barnard

Cashier
Asst. Cashier

C. M. Moore

Vice President

Bardwell, Texas
First National

Beaumont,
Texas
American
National
First National
Bellevue, Texas
First National
Big Spring, Texas
West Texas National
Bowie, Texas
Security National
Brownwood,
Texas
First National
Caddo Mills, Texas
State National

Texas
National

Carlsbad, New Mexico
Carlsbad National
Celeste, Texas
First National
Celina, Texas
First State

Smith

Cisco, Texas
First National
Clarksville,
Texas
First National
Colorado, Texas
City National

Cashier

E. W. Bowers
B. W. Sunkel

Cashier
Asst. Cashier
Jr.

T. W. Stoneroad,

Commerce, Texas
First National
Cooper, Texas
First National

Corpus Christi,
City National

A. Spears

Texas
Bk. & Tr. Co.

Corsicana, Texas
First National
First State

Vice President

D. N. Hargrave
C. C. Apperson

Vice President
Cashier

T. B. Good
W. I. Bartley
A. D. Stockton

Vice President
CashierAsst.
Cashier

W. R. Norton
R. H. Norton
DirectorPresidentVice

J. B. Fortson
Geo. E. Jester
J. E. Butler

President

Crandall, Texas
Citizens National

Vice President

Daingerfield,
Texas
Citizens National
Dallas, Texas
Dallas Bk. & Tr. Co.

First National
Liberty State
Mercantile
Bk. & Tr. Co.
of Texas

National
Republic

Bank of Commerce
Natl. Bk. & Tr. Co.

J. D. Gillespie
J. Ollie Humphreys
Joe Agee
O. C. Bruce
J. C. Chidsey
Gray Thomas

Chr.
Vice
Vice
Vice
Vice

R. L. Thornton
J. W. Hoopes
B. C. Malone
J. K. Whitley
J. B. Adoue, Jr.
F. F. Florence
Stanley Longmoor
W. Z. Hayes
John F. Owens
John R. Haven

PresidentVice
President
Vice President

W. A. Philpott,

Dawson, Texas
First National

C. M. Newton
J. F. Smith

Jr.

of Exec.Com.
President
President
President
President

PresidentPresidentVice
President
Vice President
Vice President
Vice President
SecretaryTexas
Bankers
Assn.
PresidentGreat
Southern
Life Ins. Co.
President
Cashier

DeLeon, Texas
F. & M. National

R. R. Harvey

Vice President

Denison, Texas
Citizens National
State National

Ford Seale
W. L. Peterson

Vice President
President

Durant, Oklahoma
First National

Dial Currin

Vice President

Edgewood, Texas
First National

W. H. Pickens

Vice President

J. E. Hill
W. 0. Alexander

Vice President
Cashier

Fred A. Newton
J. L. Clarke

President
Vice President

D. H. Moyers

President

J. C. Reagin
0. W. Reagin

President
V. P. & Cashier

H. H. Wilkinson
Ed. H. Winton
R. C. Martin
W. M. Massie
W. B. Cayce
W. L. Pier
Otto Frederick
W. M. McDonald

President
Vice President
V. P. & Cashier
Vice President
Asst. Cashier
President
Vice President
Cashier

Franklin,
Texas
First National

D. J. Mouk

Cashier

Galveston, Texas
U. S. National

J. W. Butler

Vice President

A. R. Davis
Roland Coomer

President
Cashier

Irvin McCreary
L. S. Holmes

Vice President
Cashier

Glen Rose, Texas
First National

C. A. Bridges

Vice President

Gorman, Texas
First National

0. P. Newberry

President

Graham P. Stewart
C. C. Bloodworth
R. V. Tidwell
H. L. Tidwell

President
Cashier
Vice President
Cashier

Eldorado, Texas
First National
Ennis, Texas
Citizens National
Ferris, Texas
F. & M. State
Forney, Texas
Forney State

Bank

Fort Worth, Texas
Continental
National
First National
Fort Worth National
Stockyards

National

Garland, Texas
State National
Gatesville,
Texas
Bk. & Tr. Co.
Guaranty

Graham, Texas
First National
Graham

National

Grand Saline, Texas
State National

Grandview,
Texas
First National

Grapevine,
Tarrant

Texas
County

Greenville,
Citizens

Texas
State

Greenville

J. C. Alsup
J. E. Andrews
J. E. Persons

President
Vice President
Vice President

C. P. Lane
0. Williamson
T. S. Wilkinson

PresidentCashierAsst.

E. D. McNatt
B. R. Brown
J. D. Leatherwood
J. W. Birdsong
J. A. Norton
J. L. Norton

DirectorCashier

Cashier

National

Natl. Exchange

Vice President
Cashier

Hamlin, Texas
F. & M. National
Handley, Texas
First National
Houston, Texas
First National
Houston National
Second National
South Texas Com'l Natl.

Sam R. Lawder
Melvin Rouff
B. D. Harris
E. F. Gossett

Vice President
Vice President
Sr. Vice President
Vice President

Pat E. Hooks
H. E. Chiles
W. B. Rees

PresidentPresidentCashier

Junction, Texas
Junction State

W. P. Riley

PresidentVice

Kaufman,
Texas
F. & M. National

Michaux

Kemp, Texas
First National

L. J. McDougald

PresidentVice

J. E. Barron
W. K. Crawley

President
V. P. & Cashier

B. F. Lyon
S. J. Stout
W. Y. Perry

PresidentVice
President
Cashier

M. H. Milliken

Cashier

Hubbard, Texas
First National
Itasca, Texas
First National
Itasca National

Lamesa, Texas
First National
Lancaster,
Texas
First National

Nash

President

Leonard, Texas
Leonard National
Lewisville, Texas
First National

Liberty, Texas
First Liberty

B. G. Riviere

President

G. A. McCreight

President

W. 0. Stevens
C. E. Maedgen
Jno. D. Mitchell

Vice President
President
Cashier

Luling, Texas
Lipscomb Bk. & Tr. Co.

S. J. Francis

President

Malakoff, Texas
First National

H. C. Riddlesperger

Cashier

Longview,
Rembert

National

Texas
National

Lubbock, Texas
Citizens National
Lubbock National

Marshall, Texas
Marshall National
Mart, Texas
F. & M. National
First

National

McGregor, Texas
First National
McKinney, Texas
Central State Bank
Collin County National

Melissa, Texas
Melissa National

W. C. Pierce,
Roy Marcoin

Jr.

President
Cashier
President

T. M. Wilson
I. A. Farris
Earl B. Smyth
Lee Brady

President
Vice President

J. Edwin Brown
G. W. England

Vice President
Cashier

A. H. Eubanks
Henry W. Warden
Thos. Johnson
Howell E. Smith
J. H. Merritt

V. P. & Cashier
Vice President
V. P. & Cashier
Chairman
President

J. E. Gibson
H. S. Wysong

PresidentCashier

N. E. Shands
0. H. Britain

Vice President
Vice President

Emile Nussbaum
David Murphy
J. F. Smith

Vice President
Vice President
Cashier

Clarence Scharbauer
M. C. Ulmer

President
Cashier

J. G. Cheatham

Vice President

W. H. Roach
Ben A. Yeager

President
Vice President

Melvin, Texas
First National
Mesquite, Texas
First National
Mexia, Texas
City National

Midland, Texas
First National
Milford, Texas
First National
Mineral
State

Wells, Texas
National

Mt. Vernon, Texas
First National

Dr. J. M. Fleming

President

Chas. C. Huff
M. A. Asher

President
Vice President

A. B. Gallaway
A. B. Childs

PresidentCashier

Nevada, Texas
First National

Geo. H. Jones

CashierCashier

Nocona, Texas
Peoples National

Joe L. Janeway

Ozona, Texas
Ozona National

Scott Peters

Cashier

Palestine,
Texas
East Texas National
Royall National

J. E. Angly
Tucker Royall

PresidentPresidentVice

C. F. Lee
G. F. Winberly

President
Cashier

R. A. Davis
D. S. Coleman

PresidentCashierVice

Post, Texas
Citizens National

W. 0. Stevens

President

Rails, Texas
Security State

J. Edd McLaughlin

Vice President

Rosebud, Texas
First National

C. F. Brown

PresidentPresidentPresidentPresidentP

Royse City, Texas
First State

W. H. Adams

San Angelo, Texas
First National

Geo. E. Webb

San Antonio, Texas
Commercial
National
Frost National

Z. D. Bonner
J. H. Frost

Santa Anna, Texas
First National

Burgess

Murchison, Texas
First State
Naples, Texas
Morris County

National

Perrin, Texas
First National
Plano, Texas
First National

Bk. & Tr. Co.

Santo, Texas
First National
Sherman, Texas
M. & P. National
Shreveport,
Louisiana
Commercial
National

Weaver

J. T. Cantrell
C. Hatchett
P. R. Markham
L. S. Omohundro

Vice President
Cashier

Ben Johnson
0. G. Bell

President
Asst. Cashier

Sinton, Texas
Commercial

W. C. Sparks

Vice President

Spur, Texas
Spur National

W. B. Lee

PresidentPresidentCashierV

Stephenville,
Texas
National
Farmers-First

Jno. W. Frey

Strawn, Texas
Strawn National

J. I. Encke

State

Sulphur Springs,
First National

Texas

Teague, Texas
Teague National
Temple, Texas
First National

P. & Cashier

B. C. Cain
J. E. Woods

PresidentVice
President

P. L. Downs

in Temple

Terrell, Texas
American
National

B. L. Gill, Jr.

Vice President

Texas
Throckmorton,
First National

Garland

Vice President

Toni Bean, Texas
First National

E. 0. Thomas

Vice President

Trenton, Texas
First National

Jno. Donaghey

Cashier

Troup, Texas
First National

Jno. Walton

Cashier

Tyler, Texas
Peoples National

Eubank

Pace

W. M. Haddad
Sam R. Greer
J. M. Stephens
Henry M. Eagle

Director
President
Vice President
Cashier

Valley View, Texas
First National

Chas. E. Peery

Cashier

Valliant, Oklahoma
State Guaranty
Farmers

S. V. Hackworth

Vice President

Waco, Texas
First National
Liberty National

W. W. Woodson
C. F. Dumas

PresidentVice
President

Texas
Waxahachie,
Citizens National

Earl Eagan

Vice President

Texas
Weatherford,
First National

W. S. Fant

PresidentCashierVice

West, Texas
State National

H. C. Edwards

Texas
Wharton,
Security Bank & Trust

Co.

R. J. Wright

President

Texas
Whitewright,
First National
Planters

National

W. H. King
F. F. Douglas
Guy Hamilton

PresidentVice
President
President

J. C. Lybrand
H. Gilchrist
C. A. Jones
R. W. Curtis

President
Vice President
CashierVice
President

Alf Morris
T. A. Wright

PresidentCashier

Wichita Falls, Texas
First National
Wills Point, Texas
First National

Winnsboro,
Texas
First National
Worthain,
Texas
First National

M. C. Strange
R. Q. Seely